Kerr Center Parents Assoc. v. Charles
| Decision Date | 09 March 1988 |
| Docket Number | Nos. 84-4299,84-4335,s. 84-4299 |
| Citation | 842 F.2d 1052 |
| Parties | 45 Ed. Law Rep. 1052 KERR CENTER PARENTS ASSOC.; Jasen Richardson, By and Through his parent Candace Richardson; Matthew Hasek, By and Through his legal guardian Barbara Hasek; Joseph Barrett, By and Through his parent Robert Barrett, Plaintiffs-Appellees, v. Donald CHARLES and Lake Oswego School District, Defendant-Cross-Claimants Appellees, v. Karen ROACH; Verne Duncan; the Children's Services Division, and the Oregon Department of Education, Defendants-Cross-Claim-Defendants-Appellants. Nancy G. KLINGER et al., Third-Party Plaintiffs-Appellees, v. CENTENNIAL # 28J, et al., Third-Party Defendants, and Karen Roach; Verne Duncan; Children's Services Division and Oregon Department of Education, Third-Party Defendants-Appellants. KERR CENTER PARENTS ASSOC.; Jasen Richardson, By and Through his parent Candace Richardson; Matthew Hasek, By and Through his legal guardian Barbara Hasek; Joseph Barrett, By and Through his parent Robert Barrett, Plaintiffs-Appellants, v. Donald CHARLES; Karen Roach; Vern Duncan; the Lake Oswego School District; the Children's Services Division; and the Oregon Department of Education, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
David B. Hatton, Oregon Developmental Disabilities Advocacy Center, and Steven Brischetto, Portland, Or., for plaintiffs.
Hunter B. Emerick, Lake Oswego School Dist., Portland, Or., for Lake Oswego School Dist. and Donald Charles.
Robert W. Muir, Asst. Atty. Gen., Salem, Or., for defendants-appellees.
Appeal from the United States District Court for the District of Oregon.
Before FLETCHER, ALARCON and WIGGINS, Circuit Judges.
The Oregon Department of Education and the Children's Services Division of the Department of Human Resources appeal from an order of the district court granting summary judgment in favor of the Kerr Center Parents Association and the Lake Oswego School District. The Kerr Center Parents Association cross-appeals from an order denying its petition for attorney's fees.
The district court found that the state agencies were in violation of the Education for All Handicapped Children Act, 20 U.S.C. Sec. 1401 et seq. (EAHCA), for failing to insure that adequate funding would be provided for the education of children residing at the Kerr Center. The court ordered the state agencies to reimburse the Lake Oswego School District for the costs it incurred in providing educational services to those children.
The state agencies contend that the suit was barred by the state's Eleventh Amendment immunity and by plaintiffs' failure to exhaust available administrative remedies. They also argue that the court erred in its determination of the merits, as well as in the relief ordered. We reverse and remand to the district court.
Plaintiff Kerr Center Parents Association is composed of the parents of 30 handicapped children residing at the Kerr Center. The Kerr Center, a private facility, is certified by the federal government as an intermediate care facility for the mentally retarded which is part of the Medicaid system under Title XIX of the Social Security Act, 42 U.S.C. Sec. 1396 et seq. It is also licensed by the State of Oregon's Department of Human Resources as a residential training center. Jasen Richardson, Matthew Hasek, and Joseph Barrett are handicapped children residing at the Kerr Center.
Defendant/cross-claimant/third-party plaintiff Lake Oswego School District (LOSD), a municipal corporation, is the school district in which Kerr Center is located. It provides public education to the children residing at the Kerr Center. Donald Charles is the Superintendent of the Lake Oswego School District. Third-party plaintiff Nancy Klinger is a resident and taxpayer of LOSD.
Defendants/cross-claim defendants/third-party defendants Oregon Department of Education (ODE) and Children's Services Division (CSD) are Oregon state agencies. The Oregon Department of Education is the agency responsible under federal law for ensuring that all handicapped children in Oregon receive the "free appropriate public education" required by the Education for All Handicapped Children Act (EAHCA), 20 U.S.C. Secs. 1400-1420 (1986). The Children's Services Division of the Department of Human Services is responsible under Oregon law for administering certain state funds for children living at the Kerr Center. Verne Duncan is the Superintendent of Public Instruction for the State of Oregon, and Karen Roach is the administrator of the Children's Services Division. Together, these four defendants are referred to as the .
Third-party defendants Centennial # 28J, et al., are school districts in which Kerr Center children resided at the time they were placed in the Kerr Center. They are referred to as the "resident school districts" of these children, while LOSD is referred to as the "attending school district." 1
]
Pursuant to the EAHCA, the State of Oregon has agreed to ensure that all handicapped children in Oregon receive a "free appropriate public education." By virtue of this agreement, the State qualifies for receipt of federal funds for special education. In addition to EAHCA funds, the State uses funds from a variety of sources, both state and federal, to provide educational programs for handicapped children.
Local school district programs are funded through EAHCA "flow through" funds, Basic School Support, the Handicapped Child Program, and local school district funds. EAHCA "flow-through" funds and Basic School Support, a state fund, go directly to local districts and are generated on a per capita basis by all children in local school district programs. The Handicapped Child Program is a state fund which provides partial reimbursement to local districts for the added costs of educating handicapped children.
State-operated programs, of which the Kerr Center is one, are special education programs named in the state statutes as recipients of general fund dollars. These funds are administered by CSD. In addition to general fund appropriations, state-operated programs are funded by EAHCA "discretionary" funds and Chapter I funds. The latter are provided by a federal grant pursuant to 20 U.S.C. Sec. 2761 et seq., and are generated on a per capita basis by children in state-operated programs. On the other hand, children in state-operated programs are not counted in determining a school district's allotment of EAHCA flow-through funds or Basic School Support.
Children at the Kerr Center receive educational services from the Lake Oswego School district. These services are funded by a biennial appropriation of state general funds together with Chapter I funds. For the fiscal period 1981-83, LOSD was allotted $18,487 in Chapter I funds and $132,281 in state general funds to cover the cost of educating the Kerr Center children. In years when LOSD uses its own funds as well, it is eligible for partial reimbursement through the Handicapped Child Program. On the other hand, since they are enrolled in a state-operated program, the Kerr Center children do not generate Basic School Support funds or EAHCA flow-through funds either for LOSD or for their resident school districts. Moreover, the State bills the county school funds of resident school districts for a portion of the cost of educating those children.
Under the funding arrangements described above, the educational services provided by LOSD to the Kerr Center children depend upon the appropriation of state general funds. General fund appropriations for services provided by local school districts to children in state-operated programs are made pursuant to ORS 343.965(1), which, prior to amendment in 1981, provided for appropriation of an amount "equal to the cost [to the local school district] of such education". The local school district would then receive reimbursement in this amount from CSD. However, in 1981, the Oregon legislature amended ORS 343.965(1) to make the appropriation "subject to the availability of funds."
Then, for the 1982-83 school year, the legislature appropriated fewer funds than were needed to cover the cost of educating the handicapped children residing at the Kerr Center and other private facilities listed in ORS 343.960. In July, 1982, LOSD determined that it could not lawfully make up the difference and that it would have to drastically reduce the program offered to the Kerr Center children.
In August, 1982, plaintiffs requested a "due process hearing" from LOSD and CSD pursuant to 20 U.S.C. Sec. 1415(b)(2). 2
Plaintiffs also requested assurances that the Kerr Center Children would continue to receive educational services pending the outcome of the hearing. 3 Plaintiffs notified the Oregon Department of Education and requested that it initiate direct service to the Kerr Center Children. In response, both CSD and LOSD declined to provide a hearing. CSD denied that it had any responsibility to provide funds beyond those appropriated by the legislature, and LOSD notified plaintiffs that it would no longer provide educational services for the Kerr Center children
On September 3, 1982, plaintiffs filed a complaint in the United States District Court for the District of Oregon requesting declaratory and injunctive relief. In their first cause of action, plaintiffs alleged a violation of their right to a free appropriate public education under the EAHCA, Sec. 504 of the Rehabilitation Act of 1973, and 42 U.S.C. Sec. 1983. In their fourth cause of action, plaintiffs alleged that defendants violated their right to procedural due process under the EAHCA, the Rehabilitation Act, the Fourteenth Amendment, and 42 U.S.C. Sec. 1983 by (1) failing to provide a "due process hearing" and (2) refusing to maintain plaintiffs' current educational...
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