M.D. v. Downingtown School District: Removing an Arbitrary Financial Limitation on a Compensatory Education Award

 

Synopsis:  In a recent case, M.D./Downingtown Area School Dist., a Pennsylvania Special Education Hearing Officer imposed a limitation on an award of compensatory education that reduced the award by “case load proportionality” and rendered the award all but illusory.  The family, believing that the financial limitation was unjustified, appealed the decision to the United States District Court where, represented by McAndrews Law Offices, it argued that the financial cap on the award should be removed.  On appeal, the federal court found that the Hearing Officer’s imposition of a “case-load proportional” financial cap was not consistent with IDEA’s remedial purposes, and ordered the cap removed.

In administrative hearings brought under the Individuals with Disabilities Education Act (“IDEA”) presiding Special Education Hearing Officers often award, as equitable relief, hours of “compensatory education.”  Typically, such hours may be used by the family to purchase hourly educational services, such as tutoring, to attempt to compensate for the failure of a school district to provide a Free Appropriate Public Education (“FAPE”), as required by IDEA.  Hearing Officers, in awarding compensatory education, often tied the maximum cost of the award to the full hourly costs to the school district of providing the services denied to the student.

In M.D./Downingtown Area School Dist., the family of a student, M.D., faced an unprecedented additional financial limitation, in that a Hearing Officer imposed a “case load proportionality” limitation on an award of compensatory education that caused the award to be virtually worthless.  In that matter, the student’s family brought an administrative Due Process Complaint against the school district, and a multi-day evidentiary hearing was conducted.  In the hearing (where the family was represented by a law firm other than McAndrews Law Offices), the family sought to establish that the school district did not appropriately address M.D.’s Specific Learning Disability in reading. The presiding Hearing Officer held that the District denied M.D. a FAPE during her third grade (2009-2010) school year by failing to deliver appropriate reading interventions, and awarded one and one-half (1.5) hours of compensatory education per day for the district’s violations.  However, rather than allowing the family to purchase hourly services at market rates, the Hearing Officer imposed an unusual and severe financial limitation on the amount of compensatory education awarded.  The Hearing Officer ordered that the

[c]osts to the District of providing the awarded hours of compensatory education may not exceed the full cost of the services that were denied.  Full costs are the case-load proportional salary and fringe benefits that would have been paid to the actual professional [Certified Reading Specialist] who would have provided the District services.  This principle sets the maximum cost of all of the hours of the compensatory education awarded.

Therefore, under this order, “if the Reading Specialist in the elementary school was responsible for 10 students the proportion would be one-tenth of the cost of the salary and benefits.”

The family, believing that the “case-load proportional” financial limitation was unjustified, appealed the decision to the United States District Court where, represented by McAndrews Law Offices, it argued that the financial cap on the award should be removed.  On appeal, the federal district court agreed with the argument of McAndrews law Offices and ordered the “case-load proportional” monetary cap on the cost of services be removed.  The Court noted that compensatory education is a judicially-created remedy, the purpose of which is to replace education services a child should have received in the first place, and that such awards should aim to place disabled children in the same position they would have occupied but for the school district’s violation of IDEA.  The court found that as:

a policy matter, the rationale behind compensatory education is to compensate a student for the rights the district already denied.  Because the procedure underlying compensatory education is to first determine the extent of the deprivation, and then fashion a remedy that should aim to place disabled children in the same position they would have occupied but for the school district’s violations, the monetary limitation imposed by the Hearing Officer runs counter to the policy rationale underlying the equitable relief that compensatory education is designed to provide.

For guidance, the Court looked to case law on the subject of reimbursement for private school tuition, and noted that the approach in such case, “consists in determining whether the services sought by a parent are reasonable….” (emphasis added).  The Court further stated that, “it defies logic that a qualified specialist could be contracted for the same price as the case-load proportional cost of a classroom teacher” and concluded that the “appropriate cost of compensatory educational services must be bounded by reasonableness” and ordered the parties to submit additional evidence regarding the “reasonable cost of compensatory education services….”  The parties later stipulated that an appropriate hourly rate for private reading tutoring in the Downingtown Area is seventy dollars ($70.00), which is far more than the hourly rate as imposed by the Hearing Officer’s financial cap.

M.D. illustrates that Hearing Officers do not have unlimited discretion in imposing financial limitations on compensatory education awards.  Although reasonable cost limitations for such awards are fairly widely accepted, unreasonable limitations are unfair to families who must purchase educational services at higher hourly rates than the “cost” to school districts for providing such services.  The Court in M.D. found that Hearing Officers should not be allowed to water down compensatory education awards by imposing arbitrary limitations such as a “case-load proportionality” requirement.  Indeed, as the Court held, the hallmark for such awards should be the “reasonableness” of the cost of services to the family.