MO Dept. Education v. Springfield R-12 , 358 F.3d 992 ( 2004 )


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  •                    United States Court of Appeals
    FOR THE EIGHTH CIRCUIT
    ___________
    No. 02-3765
    ___________
    Missouri Department of Elementary      *
    and Secondary Education; Missouri      *
    School for the Blind,                  *
    *
    Appellants,               *
    *
    v.                              * Appeal from the United States
    * District Court for the Western
    Springfield R-12 School District;      * District of Missouri.
    Andrew Lewis, Parent and natural       *
    guardian of Katherine Lewis, a         *
    minor child; Martha Lewis, Parent      *
    and natural guardian of Katherine      *
    Lewis, a minor child; Katherine        *
    Lewis, a minor and a child with a      *
    disability,                            *
    *
    Appellees.                *
    ___________
    Submitted: June 9, 2003
    Filed: March 1, 2004
    ___________
    Before MELLOY, HANSEN, and SMITH, Circuit Judges.
    ___________
    SMITH, Circuit Judge.
    The Missouri Department of Elementary and Secondary Education (DESE)1
    and the Missouri School for the Blind (MSB) appeal the district court's2 order
    affirming an administrative panel's decision requiring them to provide, participate in,
    and pay for the education of Katherine, a severely-handicapped deaf and blind child,
    at a specialized private school. We affirm in part and reverse in part.
    I. Background
    The facts of this case describe a parental nightmare–Katherine's parents
    watched as the scholastic needs of their child were processed through the grinding
    machinery of state and local education bureaucracies. Katherine resides within the
    Springfield R-12 School District (the District). The District began providing
    educational services within the school district to Katherine when she entered
    kindergarten for the 1989-90 school year.3 The District attempted to provide an
    appropriate educational program for Katherine, including hiring numerous outside
    consultants and providing training programs for District staff. Despite those efforts,
    Katherine's behavior deteriorated significantly during the 1997-98 school year, and
    in February 1998, Katherine's parents, the Lewises, removed Katherine from public
    1
    DESE is a department of the State of Missouri. By state statute, it operates
    three state-school programs for children with disabilities: MSB, the Missouri School
    for the Deaf (MSD), and thirty-six State Schools for the Severely Handicapped. When
    a student attends one of these state-school programs, the local school district pays
    only its local tax effort, and DESE pays the remainder of the cost for the student's
    education.
    2
    The Honorable Scott O. Wright, United States District Judge for the Western
    District of Missouri.
    3
    Katherine's disabilities include the following: hearing impairment; visual
    impairment/legally blind; cognitive/developmental delays; physical anomalies,
    including repaired cleft lip and palate, ventricular sepal defect, skeletal malformation
    and oral/facial anomalies; significant aggressive, self-abusive, and non-compliant
    behaviors; severe language delays.
    -2-
    school. The Lewises advised the District that they intended to place Katherine in an
    out-of-state residential setting at Perkins School for the Blind in Watertown,
    Massachusetts (Perkins).4 The District agreed with the Lewises that a residential
    placement was needed, but believed that MSB could provide an appropriate
    residential program for Katherine due to its proximity to the Lewises' home and its
    lower cost.
    In March 1998, the District referred Katherine for admission to MSB. Some
    three months later, on July 2, 1998, MSB notified the District that it would not accept
    Katherine. The school claimed it did not have an appropriate program of services for
    Katherine, even though it previously had–and advertised that it continued to have–a
    program for deaf/blind students. Rather than accept Katherine, MSB recommended
    that the District consider placing Katherine at the Missouri School for the Deaf.
    In August 1998, Dr. John Heskett, then the Assistant Commissioner of
    Education, Division of Special Education within DESE, told the District that the
    rejection letter from MSB was "curious," and "he was having difficulty understanding
    why [Katherine] would not be eligible for services to Missouri School for the Blind."
    He assured the District that MSB could provide an appropriate program for Katherine,
    and that Katherine would be accepted at MSB. On September 14, 1998, Dr. Yvonne
    Howze, MSB's Superintendent, wrote a letter to DESE administrators and the District
    describing the type of program that would need to be created to serve Katherine at
    MSB. The District and DESE interpreted this as an acceptance letter for Katherine to
    attend school there. However, Dr. Howze later denied that it was a letter of
    acceptance. According to Dr. Howze, the letter merely described parameters for a
    potential program. While the state and local education officials debated their relative
    4
    Perkins is a residential school that educates students who are blind, visually
    handicapped, deaf-blind, or multi-handicapped blind. Perkins's student body totals
    approximately 200 students, including over fifty deaf/blind students. Perkins employs
    a staff of approximately 700 people.
    -3-
    capabilities and responsibilities, the Lewises placed Katherine at Perkins for the
    1998-99 school year.
    On October 6, 1998, the Lewises filed a due-process request with DESE
    pursuant to the Individuals with Disabilities Education Act, 20 U.S.C. § 1400 et. seq.
    ("IDEA"). The Lewises claimed that the District could not provide Katherine with a
    legally-mandated free appropriate education and that Perkins was the appropriate
    placement for her. The District settled the claim with the Lewises by agreeing that it
    would reimburse Lewises for the cost of Katherine's placement at Perkins for the
    1998-99 and 1999-2000 school years. In settling, the District relied upon assurances
    from Dr. Heskett, on behalf of DESE, that DESE would reimburse all of the District's
    eligible expenses for Katherine's placement at Perkins. The District then planned to
    seek reimbursement from a state fund called the Extraordinary Cost Fund.5 The
    District subsequently filed an Extraordinary Cost Fund Application with DESE for
    the 1998-99 school year.6
    5
    The Extraordinary Cost Fund is a fund appropriated by the state legislature
    and established by regulation of the State Board of Education (5 CZAR § 70-742.170)
    for the purpose of reimbursing school districts in Missouri for extraordinary costs
    associated with providing a free appropriate public education to disabled students
    under the IDEA. When a school district makes a claim to the Extraordinary Cost Fund
    for reimbursement, it must assume responsibility for an amount equal to five times
    its current per-pupil expenditure, or in the case of the District, a total of
    approximately $25,000. Then, because the total amount of requests for any given
    school year may exceed the amount of money appropriated to the fund for that fiscal
    year, school districts may be reimbursed on a prorated basis. The Extraordinary Cost
    Fund is capped and does not provide dollar-for-dollar reimbursement.
    6
    The total cost of Katherine's program at Perkins in 1998-99 was $175,363.77.
    The Extraordinary Cost Fund reimbursed the District $106,267.69, leaving
    unreimbursed costs of $69,096.08, for which the District was responsible. If
    Katherine had attended MSB during the 1998-99 school year, the only cost to the
    District would have been an amount equal to its local tax effort for the year, or
    $2,644.82. During the 1999-2000 school year, the total cost of Katherine's program
    -4-
    On April 18, 2000, representatives from the District and DESE again discussed
    Katherine's placement options. Pursuant to DESE's request, the District sent
    Katherine's individualized education program to DESE for review. On May 15, 2000,
    representatives from the District and DESE again met to discuss Katherine's
    placement. The District expressed its concerns about the cost of the program at
    Perkins and indicated that the current level of state support was insufficient. DESE
    took the position that MSB "would have no way to defend refusing a referral if one
    were made at that time." Despite these assurances, MSB again found Katherine
    ineligible for placement after reviewing her individualized education program and
    determined that Perkins was the appropriate placement.
    In a telephone conversation with District representatives on June 2, 2000, Dr.
    Stephen Barr, the succeeding Assistant Commissioner of Education, Division of
    Special Education for DESE, reversed MSB's refusal of admission. He assured the
    District that MSB was an appropriate placement option for Katherine and that she was
    eligible to attend the school for the 2000-01 school year. Dr. Barr stated that MSB
    would be Katherine's educational placement because he determined that: (a) the
    Lewises and the District could not reach a reasonable agreement to educate Katherine
    in the District; (b) MSB formerly had a program for deaf/blind children; (c) if DESE
    had to spend a million dollars over five years to educate Katherine, it should spend
    those funds to build capacity in the state; and (d) legislators would be upset at
    spending $185,000 for an out-of-state program each year.
    Later that day, during the scheduled individualized education program meeting
    between the Lewises and the District, the District recommended a change in
    placement to MSB for the 2000-01 school year, relying on DESE's assurances that the
    at Perkins was $170,952.16. The Extraordinary Cost Fund reimbursed the District
    only $67,763.02, leaving $80,943.68 of the District's expenses unreimbursed and
    $22,245.46 of the Lewises' expenses unreimbursed. The District's local tax effort for
    1999-2000 was $2,828.19.
    -5-
    necessary resources would be provided to develop an appropriate program for
    Katherine in the State of Missouri. However, the Lewises continued to recommend
    Perkins as the appropriate placement. Disregarding the Lewises' recommendation, the
    District provided the Lewises with a Notice of Action form that proposed changing
    Katherine's placement from Perkins to MSB. On June 30, 2000, the Lewises filed an
    IDEA due-process request that initiated the current proceeding.
    After a five-day due-process hearing, a three-member panel determined the
    following pertinent matters: (1) MSB could not provide a free appropriate public
    education to Katherine, and Perkins was the appropriate placement for her; (2)
    Katherine is a "severely handicapped child" as defined under Mo. Rev. Stat.
    §162.675; (3) DESE must provide special-educational services for all severely-
    handicapped students who are not being provided such services by a local school
    district, either at a state-operated school or in private placement, pursuant to Mo. Rev.
    Stat. § 162.725; (4) Pursuant to Mo. Rev. Stat. § 162.740, the financial responsibility
    of a local school district for educating a "severely handicapped child" is limited to the
    amount of its local tax effort; (5) DESE is responsible for the cost and expenses of
    Katherine's placement at Perkins for school years 1998-99 and 1999-2000, minus the
    District's local tax effort; (6) DESE and MSB violated 34 C.F.R. § 300.344(a)(4) by
    failing to provide at the June 2, 2000, individualized education program meeting a
    representative who was knowledgeable about MSB's curriculum and financial
    resources.
    The district court affirmed the panel's decision in all respects relevant to this
    appeal. The district court also awarded the Lewises their expert-witness fees and
    expenses, copying costs, and exhibit costs to be paid by DESE. This appeal involves
    interpretation of the IDEA, the planning and pecuniary feud between state and local
    educational entities under Missouri law, and litigation-expense responsibility under
    federal law.
    -6-
    II. Analysis
    DESE and MSB raise three issues on appeal. First, they argue that the IDEA
    requires neither of them to have a representative attend a student's individualized
    education program meeting, to review and revise that student's individualized
    education program, or to select the student's least restrictive environment, when those
    agencies may only potentially be a direct provider of educational services to the
    student. Second, they argue that Missouri's education statutes require both the state
    and local school districts to educate, and pay for the education of, severely
    handicapped students. Finally, DESE and MSB contend that the Lewises' expert
    witness fees and expenses associated with the due-process hearing cannot be
    recovered as costs.
    We review de novo the district court's decision. Indep. Sch. Dist. No. 284 v.
    A.C., 
    258 F.3d 769
    , 773 (8th Cir. 2001). However, this does not mean that we start
    with a clean slate. Rather, we must give "due weight" to the outcome of
    administrative proceedings, giving particular consideration to state officials'
    educational judgments. Board of Education v. Rowley, 
    458 U.S. 176
    , 206 (1982). This
    means that a court should ordinarily defer to the administrative panel's judgment in
    building the record, but it is within its discretion to hear other evidence if a party
    provides "some solid justification" for expanding the record. Indep. Sch. Dist. No.
    283 v. S.D. by J.D., 
    88 F.3d 556
    , 560 (8th Cir. 1996). A district court's determination
    of whether an individualized education program meets the requirements of IDEA is
    a mixed question of law and fact that we review de novo. E.S. v. Indep. Sch. Dist., No.
    196, 
    135 F.3d 566
    , 569 (8th Cir. 1998). Absent a mistake of law, findings of fact are
    reviewed for clear error. 
    Id. Matters of
    law are reviewed de novo. 
    Id. A. Involvement
    in Individualized Education
    Program Planning and Implementation
    In their first point on appeal, DESE and MSB argue that the district court erred
    by determining that they violated the IDEA by: (1) failing to have a representative
    -7-
    present during the creation of Katherine's individualized education program; (2)
    failing to review and revise the individualized education program to consider the
    communication needs of a deaf-blind child; (3) failing to consider any harmful effect
    on or quality of services provided to a child when selecting the least restrictive
    environment for learning; (4) determining that they were directly involved in
    educating Katherine.
    The IDEA requires states that accept federal funding to provide a disabled
    student with a free and appropriate education. Gill v. Columbia 93 Sch. Dist., 
    217 F.3d 1027
    , 1034 (8th Cir. 2000); Yankton Sch. Dist. v. Schramm, 
    93 F.3d 1369
    , 1373
    (8th Cir. 1996); 20 U.S.C. § 1412(a). Section 504 of the Rehabilitation Act requires
    the same. 29 U.S.C. § 794(a); 34 C.F.R. § 104.33. A specialized course of instruction
    must be developed for each disabled student, taking into account that child's
    capabilities. 20 U.S.C. § 1414(d)(1)(A). The services that a school district provides
    to a child are to be summarized in a written individualized education program. 
    Gill, 217 F.3d at 1034
    .
    The IDEA's procedures ensure parents' participation in the ongoing
    development of their child's educational program. Sch. Comm. of the Town of
    Burlington v. Dept. of Educ. of Mass., 
    471 U.S. 359
    , 368 (1985). If a child requires
    special education, the entity responsible for that child's education must form a team
    to formulate an individualized education program7 in light of the child's abilities and
    7
    An individualized education program is appropriate under the IDEA if it offers
    instruction and supportive services reasonably calculated to provide some educational
    benefit to the student for whom it is designed. 
    Rowley, 458 U.S. at 201
    ; Blackmon v.
    Springfield R-XII Sch. Dist., 
    198 F.3d 648
    , 658-59 (8th Cir. 1999). Federal law does
    not mandate that special education "maximize the capabilities" of disabled children,
    but states are free to establish a program with such a mandate if they wish. 
    Rowley, 458 U.S. at 198
    ; Fort Zumwalt Sch. Dist. v. Clynes, 
    119 F.3d 607
    , 612 (8th Cir.
    1997). One purpose of the IDEA is "to ensure that all children with disabilities have
    available to them a free appropriate public education that emphasizes special
    -8-
    parental views about the child's education. 34 C.F.R. §§ 300.343(b)(2), 300.346(a)(1).
    The parents, the child's teacher, and a school official knowledgeable about special
    education must be included on the team that devises and reviews the individualized
    education program, and parents are free to invite other individuals with expertise to
    participate. 
    Burlington, 471 U.S. at 368
    ; 34 C.F.R. § 300.344. The individualized
    education program must be reviewed at least once a year, and it should be
    periodically revised in response to information provided by the parents and to
    ongoing evaluations of the child's progress. 34 C.F.R. § 300.343(c)(2). School
    districts and state education departments may be held liable for failing to meet their
    obligation under IDEA. 20 U.S.C. § 1415(a), (i)(2)(a).
    In a suit by an aggrieved party under the IDEA, the court engages in a twofold
    inquiry, asking (1) "has the State complied with the procedures set forth in the Act?"
    and (2) is the individualized education program "reasonably calculated to enable the
    child to receive educational benefits?" 
    Rowley, 458 U.S. at 206
    –07. "If these
    requirements are met, the State has complied with the obligations imposed by
    Congress and the courts can require no more." 
    Id. at 207.
    The IDEA distinguishes between state education agencies (i.e. DESE) and local
    education agencies (i.e. school districts). 34 C.F.R. § 300.2. Typically, state education
    agencies oversee local education agencies in educating disabled children, and state
    education agencies are given the main responsibility in implementing IDEA
    requirements. 34 C.F.R. § 300.370. This case presents the less common situation in
    which a local education agency is unable to educate a student, and the state education
    agency then steps in to provide direct services to the student. The IDEA contemplates
    education and related services designed to meet their unique needs." 20 U.S.C. §
    1400(d)(1)(A); Neosho R-V Sch. Dist. v. Clark, 
    315 F.3d 1022
    , 1026 (8th Cir. 2003).
    Congressional policies indicate a preference for educating disabled children in a
    mainstreamed classroom whenever possible. 
    Gill, 217 F.3d at 1034
    ; 20 U.S.C. §
    1400(c)(5)(D).
    -9-
    such scenarios. For example, if a state education agency oversees a local education
    agency's creation and implementation of the individualized education program or if
    the state education agency is providing direct services, the state education agency is
    responsible for creating and implementing the individualized education program. See
    34 C.F.R. § 300.341 and § 300.370.8 Furthermore, 34 C.F.R. § 344 names those
    people who must be part of the individualized education program development team,
    including a representative of the public agency who (1) can provide or supervise
    specially designed instruction to meet the child's needs, (2) is knowledgeable about
    the general curriculum, and (3) knows about the availability of resources of the public
    agency.
    Missouri's statutory scheme implementing IDEA supports the proposition that
    DESE is responsible for providing a representative at the individualized education
    program. To begin with, the parties do not dispute9 that Katherine is a "severely
    8
    34 C.F.R. § 300.341 provides that the state education agency shall ensure that
    each public agency develops and implements an individualized education program
    for each child served by that agency or by a private school or, if the state education
    agency directly provides services to the child, the state education agency is then
    responsible for developing and implementing the individualized education program.
    In addition, 34 C.F.R. § 300.370 indicates that state education agencies must use
    federal funds to support local education agencies or other state agencies in meeting
    shortages or to provide "direct services" to effectuate the IDEA. "Direct services" are
    defined in this provision as "services provided to a child with a disability by the State
    directly, by contract, or through other arrangements . . . ." 
    Id. 9 Although
    DESE and MSB argue that they should not be responsible for
    Katherine's education because there was never a judicial determination that Katherine
    was a "severely handicapped" child, absolutely nothing in the record indicates that
    either entity contested that Katherine was severely handicapped. In fact, Katherine
    was so severely handicapped that MSB did not have a program to meet her very
    extensive needs.
    -10-
    handicapped" child.10 Because Katherine is a "severely handicapped" child, Mo. Rev.
    Stat. § 162.725 establishes that DESE becomes the direct provider of educational
    services to Katherine. Specifically, the statute provides that DESE "shall provide
    educational services for all severely handicapped children residing in school districts
    which are not included in special districts provided that such school districts are
    unable to provide appropriate programs of special instruction for severely
    handicapped children . . . ." Mo. Rev. Stat. § 162.725. Accordingly, because the
    District could not provide an appropriate program for Katherine and was not part of
    a special school district, DESE became responsible as the direct provider of
    educational services to Katherine. Once the District notified DESE and MSB that it
    could not adequately educate Katherine, the IDEA and Missouri state law placed the
    onus upon DESE and its divisions to provide Katherine with a free appropriate public
    education, including the requirement that DESE provide a representative at
    Katherine's individualized education program planning meeting. Therefore, we affirm
    the administrative panel's and district court's findings on this issue.
    B. Missouri's Payment Schemes for IDEA Claims
    DESE and MSB next argue that the administrative panel and district court erred
    in determining that DESE was responsible for the cost of Katherine's tuition payments
    at Perkins for the 1998-99 and 1999-2000 school years. They assert that Missouri's
    statutory scheme provides that both the State and local school districts are required
    to educate–and pay for educating–severely handicapped students. In other words,
    10
    A "severely handicapped" child is a child under the age of twenty-one "who,
    because of the extent of the handicapping condition or conditions, as determined by
    competent professional evaluation, are unable to benefit from or meaningfully
    participate in programs in the public schools for handicapped children. The term
    'severely handicapped' is not confined to a separate and specific category but pertains
    to the degree of disability which permeates a variety of handicapping conditions and
    education programs . . . ." Mo. Rev. Stat. § 162.675(3) (2000).
    -11-
    DESE wants the District to shoulder the financial burden for educating Katherine. We
    disagree.
    DESE and MSB assert that Missouri's statutes include provisions for both the
    State and a school district to "contract" with public or private agencies to provide
    services to severely handicapped children, thus indicating that a school district can
    also be liable for the full amount if it contracts with another agency. Their argument,
    however, is only true in part. Two Missouri statutes apply here. First, the State of
    Missouri may contract with "another public agency or with a private agency" when
    doing so would be in the best interest of the child. Mo. Rev. Stat. § 160.735. There
    is no restriction on whether these agencies are in- or out-of-state. In comparison, a
    school district may also contract with other districts or public agencies for such
    special educational services, or "[i]f the board of education of the district finds that
    no adequate program for handicapped or severely handicapped children is available
    in nearby districts or through public agencies, it may contract with any organization
    within the state which has programs meeting the standards established by the state
    board of education." Mo. Rev. Stat. § 162.705(1) (Emphasis added). This provision,
    unlike section 160.735, restricts a school district's ability to contract by indicating
    that the district may only contract with in-state public or private entities that have
    state-approved programs.11 A school district, on its own, cannot contract with an out-
    of-state entity under this statute, while DESE is not restricted in such a manner. In
    addition, section 162.705(2) further provides:
    Per pupil costs of contractual arrangements shall be the obligation of the
    district of residence, except districts which are part of a special school
    district, or special district of residence; provided, however, that if the
    contract is with another district or special district, the district providing
    the services under contractual arrangements shall include children
    11
    DESE and MSB fail to note that § 162.705 limits a school district's ability
    to contract only with entities in the state.
    -12-
    served under such contractual arrangements in determining the total per
    pupil cost for which the district of residence is responsible. If the
    contract is with a public agency or an organization, the district of
    residence shall be entitled to receive state aid as provided in section
    163.031, RSMo, and in section 162.980. Where the state board of
    education contracts for special educational services pursuant to
    subsection 1 of this section, the state board of education shall submit to
    the responsible district a bill for the per pupil cost payable by that
    district under the terms of this subsection. Failure of a district to pay
    such cost within ninety days after a bill is submitted by the state board
    of education shall result in the deduction of the amount due by the state
    board of education from subsequent payments of state moneys due such
    district or special district.
    This section further supports section 162.740, which limits a district's cost per child
    by the local tax effort.
    The hearing panel's and district court's decisions echo the same theme–no
    Missouri educational agency wanted to take responsibility for educating this child,
    and all of them were attempting to "pass the buck," both figuratively and literally.
    Missouri statues make clear that given the facts of the instant case, the "buck" stops
    with the Missouri Department of Elementary and Secondary Education. We affirm the
    administrative panel's and district court's decision that DESE is responsible for the
    cost of Katherine's education for the 1998-99 and 1999-2000 school years, minus the
    District's local tax effort for those years.
    III. Payment of Fees and Costs
    Finally, DESE and MSB argue that the district court erred in awarding the
    Lewises their expert-witness fees and expenses as part of their costs in pursuing this
    claim. DESE and MSB assert that the IDEA does not specifically allow such an award
    and that Congress and the Supreme Court have not specifically included expert-
    witness fees as part of the costs in IDEA cases.
    -13-
    We recently addressed and decided this precise issue in Neosho R-V Sch. Dist.
    v. Clark, 
    315 F.3d 1022
    (8th Cir. 2003). In Neosho, we upheld the district court's
    denial of expert-witness fees as "costs" under 20 U.S.C. § 1415(i)(3)(B), a general
    statute regarding recovery of costs. We held that although "costs" include something
    more than attorney's fees, Congress failed to specifically include witness fees as part
    of the costs that can be recovered in IDEA cases. The relevant facts in the instant case
    and Neosho are indistinguishable. Neosho thus controls this issue. Consequently, we
    reverse the district court's award of expert-witness fees, and remand for the entry of
    a modified judgment that does not award any expert witness a fee or expenses in
    excess of that authorized for ordinary witnesses by 28 U.S.C. § 1821 and § 1920. In
    all other respects the judgment of the district court is affirmed.
    ______________________________
    -14-