Settlement Agreements in Special Education Disputes

by Bill Crane, Esq.

Bill Crane is Of Counsel to Massachusetts Advocates for Children. He works with other MAC attorneys on systemic special education issues, consults to attorneys representing low-income parents and students in special education disputes, and writes occasional postings for the MAC blog. 

Bill was a Hearing Officer at the Bureau of Special Education Appeals from 1999 to 2014.

This is the fourth of what is expected to be occasional postings on special education law and practice.  In my first posting (September 2014), I reviewed the United States Supreme Court’s decisions pertaining to special education.  In the second posting (October 2014), I provided an overview of First Circuit special education decisions.  In the third posting (December 2014), I discussed the “retrospective testimony” rule.  Retrospective testimony refers to testimony, for example in a BSEA proceeding, that certain educational services not listed in the IEP would actually have been provided to the child if he or she had attended the school district’s proposed placement.

In this posting, I discuss a recent First Circuit decision in which the Court was asked to determine whether a settlement agreement relieved the school district of an obligation to perform or fund an additional evaluation sought by parent.  South Kingstown School Committee v. Joanna S., 773 F.3d 344 (1st Cir. 2014).

This is the first time that the First Circuit has addressed settlement agreements within the context of a special education dispute and for that reason alone, the decision merits careful attention. In summary, the decision indicates that the First Circuit will consider all settlement agreements relevant to IDEA disputes; and, if permitted to do so by the language in the agreement, the Court may try to reach a result that supports the informal resolution of IDEA disputes through settlement agreements and at the same time avoids locking the parties into positions that may preclude the student from receiving a free appropriate public education where the circumstances on which the settlement agreement was based, have changed substantially.

I turn to the procedural and substantive history of this dispute, drawing not only from the First Circuit’s decision but also from the federal District Court’s decision (South Kingstown School Committee, v. Joanna S., 2014 WL 197859 (D.R.I. 2014)), the Hearing Officer’s decision (South Kingstown School District, Rhode Island State Educational Agency, 61 IDELR 179, 113 LRP 19804 (2013)) and the full text of the parties’ settlement agreement. (I found that the only way to sufficiently understand this dispute was to read all three decisions, as well as the settlement agreement itself.)

Parent filed a hearing request on February 17, 2012, alleging that student was being denied FAPE and requesting private placement.  The hearing request also asked that the school district conduct achievement and cognitive evaluations and that it pay for independent educational evaluations regarding assistive technology, speech-language, occupational therapy, reading, math and a proposed educational program.

The parties settled their dispute pursuant to a settlement agreement dated April 18, 2012 in which the school district agreed, essentially, to place student in a particular private placement for the remainder of the 2011-2012 school year and all of the 2012-2013 school year.  The settlement agreement also required the school district to conduct the following evaluations that were needed for the student to be placed at the private school: educational, cognitive, speech-language and occupational therapy.  Through the settlement agreement, parent agreed that all issues raised in her hearing request were resolved, and also expressly agreed that a previously requested and agreed upon neuropsychological evaluation would not have to be done.  The settlement agreement also waived any other educational claims that parent “knows or should have known” about, settling all claims through the date of the agreement. The hearing request was dismissed with prejudice on December 12, 2012.

The school district completed the four agreed-upon evaluations in April and May of 2012.  However, parent soon determined that, in her opinion, all of the evaluations were inappropriate.  She requested school district funding of an IEE with respect to each of these four evaluations.  At the same time, parent requested new evaluations in a number of areas, including a neuropsychological evaluation.

Because the school district believed that its evaluations were appropriate and that it was not required to conduct any further evaluations by virtue of the settlement agreement, it filed a hearing request, which led to a decision by a Rhode Island Hearing Officer on January 12, 2013.  The Hearing Officer identified only two issues to be resolved: first whether the school district’s four evaluations were appropriate and second whether any further evaluations were needed at this time.  Regarding the first issue, the Hearing Officer concluded that the psychological and speech-language evaluations were appropriate and that the occupational therapy and educational evaluations were not.

Regarding the second issue, the Hearing Officer stated that she took a look at the “big picture” and (without actually explaining the bases of her analysis) concluded that a comprehensive psychoeducational evaluation was necessary.  She explained that this comprehensive psychoeducational evaluation “should include assessments in reading, writing, math, sensory difficulty, written language, executive function, behavior, independent functioning, difficulty with balance and gross motor skills, and assistive technology if deemed necessary by any of the aforementioned assessment [sic].”  South Kingstown School District, Rhode Island State Educational Agency, 61 IDELR 179, 113 LRP 19804 (2013).

The school district then appealed to federal court. The federal District Court found that the school district’s occupational therapy evaluation was appropriate and therefore no school district funding of an IEE in this area was required.  Instead of considering the appropriateness of the school district’s educational evaluation, the Court turned to the question of whether the HO should have ordered a comprehensive psychoeducational evaluation. The Court found that the HO had essentially sua sponte ordered a psychoeducational evaluation, and found no justification for doing so, particularly with the lack of evidentiary support for the necessity of such an evaluation.

With respect to relevancy of the settlement agreement, the Court found that the “plain language” of the settlement agreement “foreclos[ed] with prejudice any more evaluations beyond those provided for by the Agreement until after the 2012-2013 school year.”  South Kingstown School Committee, v. Joanna S., 2014 WL 197859 (D.R.I. 2014). The settlement agreement does not explicitly foreclose further evaluations, other than a neuropsychological evaluation. Nevertheless, the Court concluded that the “plain language” of the agreement did so, apparently relying on the language in the settlement agreement that settled all past and current educational claims through the date of the agreement, together with the parties’ resolution of student’s educational placement through the 2012-2013 school year.

The federal District Court allowed the school district’s motion for summary judgment.  Parent then appealed to the First Circuit.

The First Circuit understood there to be two evaluations at issue: the occupational therapy evaluation and the psychoeducational evaluation.  The Court affirmed the District Court’s decision regarding the appropriateness of the school district’s occupational therapy evaluation and turned to the psychoeducational evaluation.  The First Circuit, as did the District Court, ignored the question of whether the school district’s educational evaluation was appropriate (and therefore ignored the question of whether an IEE in this area should be paid for by the school district) and instead simply considered the correctness of the HO’s order for a psychoeducational evaluation.

The First Circuit resolved the psychoeducational issue on the basis of whether the parties’ settlement agreement foreclosed this evaluation.  The Court found that the settlement agreement required the school district to conduct only four evaluations and that the agreement also resolved parent’s claims to all of the evaluations she had previously requested in her hearing request. My reading of the settlement agreement is that this is exactly what the settlement agreement expressly did.

Without analysis, the Court then jumped to the conclusion that the psychoeducational evaluation ordered by the HO was one of the evaluations that the parent had requested in her hearing request and therefore was resolved through the settlement agreement.  But as explained above, a review of the HOs decision makes clear that the psychoeducational evaluation ordered by the HO overlapped some of what the parent had requested through the hearing request, but there were significant differences which the Court simply ignored.

The First Circuit was then faced with the following situation: the Court found that the settlement agreement foreclosed parent’s claim for this evaluation (because it concluded that the evaluation was requested in her hearing request and therefore resolved by the settlement agreement) but for how long a period of time should this evaluation claim be foreclosed going forward?

Parent took the position that the agreement resolved her claims regarding evaluations only through the date of the agreement and therefore she was free to make further requests for evaluations.  The school district initially took the position that the settlement agreement resolved parent’s claims for evaluations through the 2012-2013 school year, consistent with the federal District Court’s decision as discussed above.

The settlement agreement expressly resolved the question of student’s placement through the 2012-2013 school year, but there is no language in the settlement agreement that expressly foreclosed, for any period of time, parent’s right to evaluations in the future—in other words, the language of the agreement would seem to support parent’s position. Nevertheless, the Court dispensed with parent’s argument by concluding that it would lead to “a meaningless outcome of their negotiations” if parent “could nonetheless turn around the next day [after the agreement was signed] and demand the foregone evaluations.”  South Kingstown School Committee v. Joanna S., 773 F.3d 344, 354 (1st Cir. 2014).

The Court still had to determine the period of time during which parent was foreclosed from an evaluation claim.  The Court adopted the school district’s “revised approach” that parent had waived her right to any further evaluations through the 2012-2013 school year “except when her request for one arises from a change in the conditions that prevailed at the time she signed the Agreement.”  The Court found support for this conclusion in the words of the settlement agreement that parent waived “any and all causes of action … [of] which [parent] kn[ew] or should have known” when she signed the agreement. Id.

What might account for this way of thinking about the agreement and what does its analysis tell us about how the Court will decide future disputes regarding settlement agreements?  It may be difficult to make sense of the Court’s reasoning through normal contract analysis which would have to be based upon Rhode Island contract law and to which the Court made no reference.  The Court’s interpretation of the settlement agreement seems to reflect a desire to reach a result that makes sense to the Court within the context of an IDEA dispute, so long as the Court can locate a presumed purpose and at least some language from the agreement to support its desired conclusion.

More specifically, what appears to be going on here is the First Circuit’s desire to respect (and perhaps try to balance) two important and potentially competing considerations in special education cases: in the Court’s words, “the role settlements may play in resolving IDEA disputes” and, at the same time, “the legitimate concern with allowing IDEA settlements to bargain away–potentially for all time and without regard to the change in conditions that may arise in the course of a child’s development–the statutory right to a free appropriate public education.”  The Court made clear its awareness that “conditions … often do [change] as children grow and develop” and appeared to want to fashion its remedy with this reality in mind.  And the Court was able to find a way to interpret the agreement in a way that reflected these two considerations. Id.

The Court concluded that “the record does not reveal any sufficient change in circumstances” and therefore determined that parent could not prevail under its change of circumstances standard. The First Circuit explicitly declined to answer further the question of to what extent must conditions change in order for a release to no longer bar a claim in a future dispute. Id. at 354-55. At the same time, the Court’s decision seemed to be saying that, as a general rule, if a settlement agreement can be shown to deny a student an appropriate education (as guaranteed by the IDEA) as a result of a change in circumstances particularly where the change of circumstances could not have been reasonably anticipated by the parties and therefore addressed in the agreement, the obligations of the parties under an agreement may need to be reconsidered in this light.

There were several other important aspects of this case relevant to settlement agreements in IDEA disputes.  In order to reach the merits of the dispute, the Court had to first resolve the question of whether it may even consider the parties’ settlement agreement.  Parent took the position that the Court may not.  She pointed out that the agreement was not reached as part of a mediation or resolution process and that the IDEA only grants authority to a court to consider agreements reached in these contexts.  Therefore, according to this argument, the Court had no jurisdiction to consider the agreement.

The First Circuit disagreed.  In taking jurisdiction over the settlement agreement, it relied upon a federal Court’s general authority under the IDEA to review the challenged decisions of a Hearing Officer.  It also relied upon case law in which federal courts have routinely given effect to state-law settlement agreements in disputes involving federal law claims.  Id. at 352. One may safely conclude from this analysis that the First Circuit (as well as the Massachusetts federal District Courts) will consider any settlement agreement that is relevant to an IDEA dispute.

A related question, briefly discussed in dicta (in footnote 3), is whether the Hearing Officer has the authority to consider a settlement agreement in the first instance.  (It is important to distinguish “consideration” of an agreement for purposes of resolving a school district’s responsibility under the idea and “enforcement” which would nearly always be beyond the scope of a Hearing Officer’s authority.)  The Court explained that it need not and therefore would not address this issue, but nevertheless noted that it is a “question that seems to have divided lower federal courts”, citing two federal district court decisions.  The Court was apparently unaware that the overwhelming weight of authority requiring a special education Hearing Officer to consider any settlement agreement relevant to an IDEA claim, typically as a matter of exhaustion of administrative remedies.  This includes all four of the Circuit Court decisions that have addressed this issue.[1]   As the federal District Court wrote in this very case, “[w]hatever may be the scope of a hearing officer’s jurisdiction to enforce an IDEA settlement agreement, the cases are uniform in holding that is error simply to ignore it.  [Citations omitted.]” South Kingstown School Committee, v. Joanna S., 2014 WL 197859 (D.R.I. 2014).

Thus, the First Circuit’s decision does not resolve this matter for BSEA Hearing Officers, who have been split on this issue for many years.[2]  Nevertheless, the Court’s decision provides a strong incentive for BSEA Hearing Officers who have not been willing to consider agreements to do so now, if for no other reason than to avoid appeals of their decisions to federal Court.  Particularly where consideration of the agreement would change the outcome of the dispute and where the Hearing Officer ignores the agreement, the Hearing Officer is essentially inviting the losing party to appeal to federal Court so that the agreement can be considered and the Hearing Officer’s decision reversed.

This decision also provides a useful discussion of evaluations and independent education evaluations. The Court explained the importance of evaluations as follows:

Evaluations are integral to the way IDEA works… They assist in determining … [t]he content of the child’s Individualized Education Program, or IEP. The IEP sets forth the services a disabled child will receive and the educational goals for that child. The IEP thus gives practical substance to IDEA’s right to a free appropriate public education. And for that reason, evaluations are a key means—perhaps the key means—for deciding the content of the protections IDEA offers. [Internal quotations and citations omitted. Id. at 346-47.]

As we have explained, evaluations are crucial to IDEA. They help ensure children receive the free appropriate public education Congress envisioned. [Id. at 356.]

And so, in sum, what are the take-away points from this First Circuit decision regarding settlement agreements?  I suggest the following:

  • The Court concluded that it has the authority to consider all settlement agreements relevant to a special education dispute (including agreements reached outside of a mediation or resolution process), but the Court did not resolve the question of whether Bureau of Special Education Appeals Hearing Officers have jurisdiction over settlement agreements.
  • The decision indicates that the First Circuit values informal resolution of special education disputes and therefore will seek to interpret agreements in a manner that does not render them meaningless—or, more accurately, will seek to avoid rendering them meaningless from the perspective of the Court’s understanding of the purposes of the agreement.
  • The Court may also seek to interpret agreements in a way that avoids locking parties into positions that, because of changed circumstances, would preclude a student from receiving an appropriate education in the future.
  • The decision provides an important reminder that to the extent settlement agreements are not sufficiently clear and comprehensive, the First Circuit (and the lower federal Courts) may misunderstand the parties’ intentions and resort to their own sense of what obligations the agreement should impose on the parties.

[1] School Bd. Of Lee County, Fla. v. M.M. ex rel. M.M., 2009 WL 3182971(11th Cir. 2009) (because breach of Settlement Agreement claim relates to FAPE, claim must first be considered in an administrative due process hearing before it can be considered by court); H.C. v. Colton-Pierrepont Cent. School Dist., 2009 WL 2144016 (2nd Cir. 2009) (“due process hearing before an IHO [impartial hearing officer] was not the proper vehicle to enforce the settlement agreement” but IHO had responsibility to “consider the settlement agreement to the extent it might have been relevant to the issue before him, i.e., whether H.C.’s 2006-07 IEP provided her with a FAPE”); T.L. ex rel. G.L. v. Palm Springs Unified School Dist., 304 Fed. Appx. 548 (9th Cir. 2008) (exhaustion of administrative due process required where claim is breach of settlement agreement regarding educational services under the IDEA); J.P. v. Cherokee County Bd. of Educ., 218 Fed. Appx. 911 (11th Cir. 2007) (claims regarding alleged breach of contract involving special education issues must be addressed through administrative due process remedies prior to consideration by the court).

[2] One current BSEA Hearing Officer has consistently considered agreements relative to an IDEA dispute, and one hearing has consistently declined to do so. Compare In Re: Jake (Masconomet Regional School District), BSEA # 11-2194, 16 MSER 408 (Oliver, 2010) (“If parents were not legally bound by a mediation or resolution/settlement agreement that they voluntary entered into and derived the full benefits of, query whether any school district would ever [enter] into … any type of agreement with parents [and] [t]he intent of the statutory and regulatory provisions with respect to mediation and resolution agreements would be effectively subverted”) with In Re: Israel and the Monson Public Schools, BSEA #10-5064, 16 MSER 296 (Byrne, 2010) (“the BSEA exists to enforce the public duties set out in the IDEA and to ensure on behalf of individual students that those public responsibilities are appropriately developed, designed and implemented,” rather than to give effect to an agreement that includes “terms incompatible with the application of one or more of the IDEA’s mandatory substantive provisions”) and In Re: Agawam Public Schools, BSEA # 02-2374, 8 MSER 103 (Byrne, 2002) (“Private parties may agree on terms that are mutually beneficial logistically or financially but which should not be endorsed by a government agent [e.g., the BSEA] charged with upholding a civil rights statute”). Two other BSEA Hearing Officers have been reluctant to consider or interpret agreements but have nevertheless done so occasionally, particularly when necessary to avoid an unjust result. See Student v. Worcester Public Schools, BSEA # 1302473 (Putney- Yaceshyn, 2013) (relying on agreement to support dismissal of claim); In Re: Student v. Pentucket Regional High School, BSEA # 12-8636, March 11, 2013 (relying on agreement to support dismissal of claim) (Figueroa, 2012); In Re: Swampscott, BSEA # 99-3434 (Figueroa, 1999) (HO considered transportation to be determined by agreement of the parties).

[Photo credit – Tim Pierce https://www.flickr.com/photos/qwrrty/3446221502]