United States District Court, D. Delaware
M.K., by and through his Mother, BARLOWE K. Plaintiffs,
PRESTIGE ACADEMY CHARTER SCHOOL, et al., Defendants.
Austin McHugh United States District Judge
case concerns both substantive and procedural questions as to
the enforceability of an agreement between a parent and a
charter school in settlement of claims under the Individuals
with Disabilities Act (IDEA), 20 U.S.C. § 1400 (2004).
The substantive question is whether the agreement can be
enforced against the Delaware Department of Education, as the
responsible State Education Agency, where the charter school
has ceased to exist, leaving the child with nowhere else to
turn to vindicate his right to a free and appropriate
education. The threshold procedural question is whether
Plaintiff has waived federal jurisdiction because the
settlement was finalized outside the statute's resolution
process, or whether jurisdiction nonetheless exists because
the case necessarily presents a substantial issue of federal
law. Because I am persuaded that the agreement is enforceable
against the State, and because I further conclude that
resolution of that question necessarily creates a substantial
federal question, Delaware's pending Motion to Dismiss
will be denied.
The IDEA Framework
Individuals with Disabilities Education Act (IDEA) requires
states to “make available a free and appropriate public
education [“FAPE”] to all children with
disabilities residing within their borders.” D.S.
v. Bayonne Bd. of Educ., 602 F.3d 553, 556 (3d Cir.
2010). The Act seeks to ensure that every child with a
disability has access to a FAPE that is tailored to meet his
or her unique educational needs. Charlene R. v. Solomon
Charter Sch., 63 F.Supp.3d 510, 512 (E.D. Pa. 2014). The
central mechanism for securing this right is the
Individualized Education Program (IEP), which is a package of
special educational and related services designed to meet the
unique needs of a disabled child. H.E. v. Palmer,
220 F.Supp.3d 574, 577 (E.D. Pa. 2016). To administer those
services, the IDEA relies on states' education
IDEA requires states to submit a plan of compliance to the
Secretary of Education in exchange for federal money. §
1401(9). The Secretary then distributes federal funding to
State Education Agencies (SEAs), which are responsible for
apportioning those funds to schools and other Local Education
Agencies (LEAs). § 1413(a). That process requires LEAs
to apply to their SEA for funding. § 1412(a)(11)(A).
With this funding, the LEA provides services to children with
disabilities through, inter alia, developing an IEP
after evaluating the child and continually making revisions
as appropriate. §§ 1414(d)(1)(A)(i), (d)(4). The
Fourth Circuit has aptly summarized the framework as follows:
The IDEA delegates supervisory authority to the SEA, which is
responsible for administering funds, setting up policies and
procedures to ensure local compliance with IDEA, and filling
in for the LEA by providing services directly to students in
need where the LEA is either unable or unwilling to establish
and maintain programs in compliance with IDEA. The LEA, on
the other hand, is responsible for the direct provision of
services under IDEA, including the development of an . . .
[IEP] for each disabled student, the expenditure of IDEA
funds to establish programs in compliance with IDEA, and the
maintenance of records and the supply of information to the
SEA as needed to enable the SEA to function effectively in
its supervisory role under [the] IDEA.
Gadsby v. Grasmick, 109 F.3d 940, 943 (4th Cir.
enforces a child's right to a FAPE by providing
procedural safeguards that allow parents to contest LEA
decisions regarding their children. Specifically, it requires
states to adopt procedures affording an opportunity for any
party to present a due process complaint regarding the
“identification, evaluation, or educational placement
of the child, or the provision of a [FAPE].”
§§ 1415(a), (b)(6). Upon the LEA or SEA receiving
that complaint, parents are entitled to an impartial due
process hearing. § 1415(f)(1)(A). The findings and
decisions that result are appealable in both state and
federal district court. § 1415(i)(2)(A).
addition, out of concern that such adversarial proceedings
alone could breed distrust and discourage cooperation between
the parents and school personnel, Congress amended the IDEA
in 1997 and 2004 to facilitate the amicable resolution of
disputes prior to the formal due process hearing. T.L.
ex. rel. Latisha G. v. Pennsylvania Leadership Charter
Sch., 224 F.Supp.3d 421, 425 (E.D. Pa. 2016)
[hereinafter “T.L.”] (citing H. R. Rep.
No. 108-77, at 85 (2003); Pub. L. No. 105-17 (1997); Pub. L.
No. 108-446 (2004)). Two additional processes were added: the
resolution meeting and period [hereinafter “resolution
process”], and the mediation process.
resolution process begins when the LEA receives a proper due
process complaint and requires that a due process hearing not
be held until at least 30 days after the filing of that
complaint. 34 C.F.R. § 500.510(b) (2007). In the
interim, the LEA must hold a resolution meeting-akin to a
pretrial settlement conference-within 15 days of the filing
of a due process complaint. Id. § 300.510(a).
The meeting allows parents to “discuss their complaint,
and the facts that form the basis of the complaint, ”
and gives the LEA “the opportunity to resolve the
complaint.” 20 U.S.C. § 1415(f)(1)(B). To ensure
productive resolution meetings, the IDEA requires the
attendance of “a representative of the [LEA] who has
decision-making authority.” Id.; see
also 34 C.F.R. § 300.510(b)(5) (allowing parents to
seek the intervention of a hearing officer if the LEA fails
to produce the required decision-maker). The parties may also
agree to expand or contract the initial 30-day time frame
between the filing of the complaint and the initiation of a
due process hearing. See §§ 1415(e)(2)(B),
(f)(1)(B)(i). And if a settlement agreement is reached
“at a [resolution meeting]” or during the
resolution period, the parties can execute an agreement,
which is then enforceable in state or federal court.
§§ 1415(e)(2)(B), (f)(1)(B)(i), 1415(f)(1)(B)(iii).
Although it is less relevant here, a resolution reached in
the mediation process under 1415(e)(2)(F) is likewise
enforceable in federal or state court.
disputes regarding a FAPE denial are between parents and
LEAs. Here, as discussed more fully below, M.K.'s school,
Prestige, was a charter entity that Plaintiff contends will
soon be defunct. Accordingly, Plaintiff has sued the State of
Delaware as the responsible SEA, and Prestige has not
defended the case.
now 16 years old, attended Prestige Academy Charter in
Wilmington, Delaware from August 2011 to the end of the
2013-14 school year. His mother, Barlowe K., filed a due
process complaint on his behalf against the Charter School in
November 2015. The complaint alleged that Prestige failed to
appropriately evaluate M.K. and provide an appropriate
educational program to meet his needs, despite his being
eligible as a student with disabilities under the IDEA.
Barlowe K. eventually executed a settlement agreement with
Prestige on May 9, 2016 [hereinafter “Settlement
Agreement”]. See Ex. A. 7, ECF No. 1-1.
Settlement Agreement itself required Prestige to
“provide payment or reimbursement for up to $30, 000
worth of legitimate educational expenses for [M.K.] to be
utilized between [then] and M.K.'s 21st birthday, ”
id. ¶ 3, in addition to attorney's fees in
the amount of $15, 000, id. ¶ 5. Requests for
reimbursement that qualified as legitimate educational
expenses, as defined by the Agreement, were to be paid within
30 days of receipt. Id. ¶ 4. These included
expenses for tutoring, related services (as defined under the
IDEA), vocational training, educational evaluations,
behavioral and social skills training, and assistive
technology. The State of Delaware is not a party to the
agreement and did not participate in the negotiations.
reaching the Agreement, the Hearing Panel Order dated January
4, 2016 states that, on December 30, 2015, the parties orally
agreed to waive the 30-day waiting period in light of
“settlement negotiations [that] were taking
place.” Def.'s Ex. A-1 p. 1, ECF No. 4-1. That same
order states that the resolution period ended on the day of
the verbal waiver. The parties memorialized that waiver in a
written agreement dated January 22, 2016, and ended the due
process hearing by stipulation on January 25, 2016.
Def.'s Ex. A-2, A-3, ECF No 4-1.
exchange, Plaintiff relinquished her and her son's
statutory rights under the IDEA, the Rehabilitation Act, the
Americans with Disabilities Act, the No Child Left Behind
Act, and the Delaware state special education statutes. They
also relinquished their rights arising from Prestige's
noncompliance with any IDEA provisions concerning
identification, evaluation, and development of an IEP for
M.K., such as claims for compensatory education, tuition
reimbursement, and reimbursement for attorney's fees.
Plaintiff did, however, reserve the right to litigate issues
of non-compliance, and claims arising from physical injuries
that may have occurred while M.K. was at Prestige.
has since failed to make any payments under the Agreement,
according to allegations in the Complaint. It has also not
renewed its charter, and according to Plaintiff, will soon
cease to be a viable entity. That means it will not be able
to satisfy its obligations under the Agreement. As a result,
Plaintiff contacted the Delaware Department of Education
[hereinafter “Delaware”], as the governing SEA,
but Delaware has denied responsibility for the relief
negotiated in the Settlement Agreement.
has sued Prestige and Delaware alleging two counts: (i)
violation of the IDEA, and (ii) breach of contract regarding
M.K.'s “ongoing federal right.” Delaware
premises its denial of responsibility on the fact that the
Agreement was not made through the resolution process, and on
that same basis has moved to dismiss the case for lack of
subject matter jurisdiction. In the alternative, Delaware
moves to dismiss for failure to state a claim, contending it
has no legal responsibility, and supporting its position with
eight different arguments.
Delaware's motion is two-fold, first challenging the
existence of jurisdiction under Rule 12(b)(1) and second,
contending that Plaintiff has not made out a legally
cognizable claim under Rule 12(b)(6). The standard of review
for the latter is well-settled. I accept as true all of the
factual allegations contained in the complaint, and assess
whether they make out a plausible legal claim. Bell
Atlantic Corp v. Twombly, 550 U.S. 554, 572 (2007).
Depending on the nature of the challenge, that same standard
may apply to the former. That is the case if the
jurisdictional challenge is facial-that is, Plaintiff's
allegations have not been contradicted. Mortensen v.
First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 892
n.17 (3d Cir. 1977). But if the contrary is true, rendering
the challenge a factual one, the reviewing court is allowed
to “consider evidence outside the pleadings and resolve
any disputed material facts in order to evaluate the
jurisdictional [challenge].” Tonge v. Fundamental
Labor Strategies, Inc., No. 16-cv-6310, 2017 WL 4347663,
at *5 (E.D. Pa. 2017) (quoting Constitution Party of Pa.
v. Aichele, 757 F.3d 347, 358-59 (3d Cir. 2014)).
Defendant challenging Plaintiff's allegation that the
“Settlement Agreement was reached pursuant to [the]
IDEA's resolution process, ” Def.'s Mot. 2, ECF
No. 4 (citing Complaint ¶ 13, ECF No. 1), I construe
Defendant's Rule 12(b)(1) motion as a facial
jurisdictional challenge. Indeed, that an agreement was
reached pursuant to or during the IDEA's resolution
process is dispositive of the legal question: whether the
IDEA provides the basis for jurisdiction. See T.L.,
224 F.Supp. at 425 (E.D. Pa. 2016). As a result, it is a
legal conclusion that I would not consider under the
controlling Rule 12(b)(6) standard. See Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (“[W]e are not
bound to accept as true a legal conclusion couched as a
factual allegation”) (quoting Twombly, 550
U.S. at 555)).
to the facts underlying Plaintiff's allegation, Defendant
supplements the pleadings with public documents from the
administrative proceedings leading up to the Settlement
Agreement. See Def.'s Mot. 2, ECF No. 4. These
documents reveal that Plaintiff agreed to waive the
resolution process. See Id. But even if the
complaint alleged otherwise, which it does not, and I
considered such allegations factual which, as explained
above, I do not, that would still not amount to a factual
jurisdictional challenge because I could properly consider
those documents under the Rule 12(b)(6) standard, and
likewise on a facial jurisdictional challenge. See
Ludovico v. Mun. of Norristown, No. 17-cv-2214, 2017 WL
4404308, at *2 (E.D. Pa. 2017) (“[A] court may properly
look at public records, including judicial proceedings, in
addition to the ...