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July 24, 1991


The opinion of the court was delivered by: Gerry, Chief Judge:


Plaintiffs filed this action under the Education for All Handicapped Children Act ("EHA"), 20 U.S.C. § 1400 et seq., as amended by The Handicapped Children's Protection Act ("HCPA"), 20 U.S.C. § 1415 et seq. (West 1990). In March of 1989, plaintiffs filed a petition with the New Jersey Department of Education seeking a hearing regarding the placement of their son, Daniel, in an appropriate special education program. As a result of these proceedings, as more fully detailed below, the parties entered into a settlement agreement. Pursuant to section 615(e)(4)(B) of the EHA, plaintiffs seek attorneys fees and costs as prevailing parties of those proceedings. Plaintiffs filed a second petition in March of 1990 for a determination of whether the defendant Haddonfield Board of Education ("the Board") was responsible for the cost of a substance abuse treatment program that Daniel attended. Pursuant to EHA section 615(e)(2), plaintiffs appeal the June 20, 1990 ruling of an Administrative Law Judge ("ALJ"), who held that the program was a "medical service" and, therefore, the responsibility of the parents.

Presently before the court are both parties' respective motions for summary judgment.


A. The First Petition

A detailed account of the procedural history is required for proper resolution of these motions. During the 1988-89 school year Daniel was a tenth grade student who was classified as emotionally disturbed. In particular, Daniel has expressive and attention disorders, and has a tendency to become frustrated because of his inability to express himself and because of very low self esteem. See, P.App., at Pa3.*fn1 As an emotionally disturbed child, Daniel is eligible for free special education services. See, EHA §§ 602(17), (18); 614(a)(1)(C)(ii). Pursuant to Daniel's individualized educational program ("IEP"),*fn2 Daniel attended classes as a day student at the Alternative School in Cherry Hill, New Jersey for half a day, and the Haddonfield Memorial High School ("HMHS") for the other half. As a result of disciplinary and other problems encountered at the Alternative School, Daniel's parents sought to have Daniel enrolled full-time at HMHS. Although the Haddonfield child study team assigned to Daniel did not concur in plaintiffs' request, the parties agreed to allow Daniel to enroll full-time at the school. As a condition of enrollment, however, Daniel and his parents signed a "Performance Contract" which provided that Daniel would be suspended from the school and transferred to an alternative program outside the district if Daniel failed to comply with his performance requirements. D.App., at Ba13. This agreement was appended to Daniel's 1989 IEP.

On January 13, 1989, Daniel was suspended from HMHS as a result of an altercation he had with a teacher. At that time, the child study team recommended that Daniel be placed as a day student at the Yale School in Cherry Hill, a special education school for emotionally disturbed children. The Fields responded that they did not consider Yale appropriate because of the level of the program. D.App., at Ba21. Rather, after consulting with Dr. Leonard Krivy, an educational consultant, the Fields sought to have Daniel placed in a residential, twenty-four hour per day placement. For financial assistance in securing a residential placement, the Fields were referred to the New Jersey Division of Youth and Family Services ("DYFS"). The DYFS case manager responsible for the Fields' request met with the child study team and other high school staff members on February 28, 1989. On March 8, 1989, however, the DYFS informed Daniel's child study team that the Fields were apparently no longer interested in the services of that agency since the Fields did not contact them despite several requests to do so.

On March 28, 1989, the parties participated in a mediation session. The Board maintains that the "fountainhead" issues identified and discussed were Daniel's classification and residential placement. Because the parties were unable to resolve the dispute, a hearing was scheduled before Administrative Law Judge Bernard Goldberg pursuant to N.J. Admin.Code section 6:28-2.7(e)(4)(vi). Around this time, the Fields once again contacted the DYFS to see about getting Daniel placed in a residential placement by that agency. However, on May 10, 1989, the DYFS informed both parties of its determination that a residential placement was "not appropriate" for Daniel. See, D.App., at Ba40.

Prior to the administrative hearing, ALJ Goldberg indicated that he would only hear the issue of whether Daniel needed a residential placement, and not any dispute between the Board and DYFS over who should pay in the event that a residential placement was ordered. At the suggestion of ALJ Goldberg, the parties agreed to resolve the classification and placement issues by way of an independent evaluation by an independent child study team, with both parties being bound to the team's recommendations. See D.App., at Ba48. The Fields also reserved their right to pursue the remaining claims of expunction and reimbursement of counseling and attorneys fees until after the independent evaluation. The Cedar Hill Learning Disability Center ("Cedar Hill") was assigned to perform the evaluation.

On August 17, 1989, Cedar Hill issued its findings and recommendations based on a neuropsychiatric evaluation performed by David J. Gallina, M.D. The report concurred with the Haddonfield child study team's classification of Daniel as emotionally disturbed. Dr. Gallina also recommended a day program rather than a residential placement and specified particular areas that should be addressed to correct Daniel's condition. On August 28, 1989, the parties participated in an IEP conference to outline Daniel's special education program while a suitable placement was investigated. The parties agreed that homebound instruction would be provided while the search for a suitable day program proceeded.

Dr. Barbara Rell, Supervisor of Special Services for the Haddonfield School District, sent a draft of the IEP to the Fields for their review and signature. Dr. Rell noted that an appointment had been scheduled with the Yale School for the Fields to visit. The Fields signed the program, but made numerous revisions to the document, including a notation of the Fields' continued protest of Daniel's classification, a demand for a reading specialist, the development of a distributive education program, transitional counseling on an "as needed" basis rather than one session per week, and implementation of a behavior modification and recreational program while Daniel was on homebound instruction. D.App., at Ba110-17.

As a result of the Fields' modifications, on September 8, 1989, the Board requested a due process hearing with the Department of Education. On that same date, the plaintiffs submitted an ex parte emergent relief application to Judge Goldberg, alleging that the Board was not providing tutoring to Daniel.*fn3 Judge Goldberg granted plaintiffs relief on September 13, 1989, and ordered the Board to provide ten to twenty hours of tutoring during normal school hours.*fn4 The Board intimates that Judge Golberg's order violated the Board's due process rights since they were not notified of the hearing, the order did not allow the Board to move for dissolution or modification of the order in violation of N.J. Admin.Code section 1:6A-12.1(d), there were no findings as to substantial likelihood of success or irreparable harm, and the order was not sent to all parties for purposes of raising objections as to its form within five days as provided in N.J. Admin.Code section 1:6A-12.1(f). However, the Board complied with the order and provided sufficient tutoring services. During this time, various day placement programs were being investigated in addition to the Yale School, including the Mill Creek School located on the grounds of the Institute of Pennsylvania Hospital.

At a settlement conference on September 27, 1989, placement at the Yale School appeared to be the most viable resolution. On October 11, 1989, however, the parties were informed that Daniel was denied admission to the Yale School. On October 13, 1989, after visiting the Mill Creek School, the Fields determined that that school was an acceptable placement, and Daniel was enrolled immediately.

After negotiation, the parties agreed to a consent order which, inter alia, provided that the Board would (1) place Daniel in the Mill Creek School, provide transportation, and incorporate the recommendations made by Cedar Hill into Daniel's program; (2) develop a distributive education program that incorporated Daniel's after-school employment; (3) provide reimbursement for SAT training; (4) provide Mr. and Mrs. Fields with three sessions of counseling with Daniel; and (5) expunge Daniel's record of the January, 1989 suspension. P.App., at Pa20-21. Plaintiffs also reserved their right to seek attorneys fees. As far as the reimbursement for family counseling services, the parties agreed in a settlement conference to split the $5,000 evenly. A consent order was signed by the ALJ on November 13, 1989, and the $2,500 fee for counseling services was incorporated into the consent order in a written decision dated November 14, 1989.

B. The Second Petition

By February of 1990, Daniel's behavior at the Mill School was deteriorating. He was inattentive in class, verbally abusive to teachers, unmotivated, and doing poor academically. One day, Daniel was discovered showing a bottle of Valium to other students. The school immediately convened a "crisis meeting" with Daniel's parents. During that meeting, Daniel admitted taking the Valium from his mother, and also admitted to smoking marijuana and occasional drinking.

The possession of drugs on campus is grounds for automatic suspension from Mill Creek. Mill Creek advised both the Board and Daniel's parents that Daniel was expelled and that he would have to attend a residential substance abuse program in order to be readmitted to Mill Creek. Mill Creek recommended the Strecker program, also part of the Institute of Pennsylvania Hospital, and stated that Daniel could remain in school if he attended that program. Sandra Schoenholtz, assistant director of Mill Creek, opined that Daniel's possession of drugs may have been part of a larger problem, his emotional disturbance, and that his behavior and performance in school were linked together.

The Fields enrolled Daniel in the Strecker program at their expense. Although Mill Creek recommended a sixty day admission, Daniel attended Strecker for twenty-eight days, which exhausted his lifetime insurance benefits for psychiatric care. As a result of the Board's refusal to pay for the substance abuse program, the plaintiffs sought a hearing before the Department of Education. A hearing was conducted on May 7, 1990. After hearing testimony from Dr. Louis Pica, Jr., a psychologist and one of Daniel's counselors, Sandra Schoenholtz, Daniel's father and Dr. Rell, the ALJ determined that the care in question was medical in nature and thus not a school district responsibility.


Under the EHA, federal funding for state special education programs is conditional on the state maintaining "a policy that assures all handicapped children the right to a free appropriate public education." 20 U.S.C. § 1412(1). The EHA provides for parental notice of proposed changes to the IEP and for an opportunity to present complaints with respect to the child's IEP. Id. §§ 1415(b)(1)(C, E). Additionally, the parents or guardian have a right to "an impartial due process hearing which shall be conducted by the State educational agency," id. § 1415(b)(2), and state agency review of the due process hearing. Id. § 1415(c). Section 1415(e)(2) provides that any aggrieved party may appeal the final decision of the administrative process in either state or federal court.

  A.  Right of Prevailing Party to Maintain Action for
      Attorneys' Fees

The EHA initially did not provide for the recovery of attorneys' fees. Accordingly, in Smith v. Robinson, 468 U.S. 992, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984), the Court held that plaintiffs who prevailed at the administrative level could not bring an independent action for attorneys fees. In response to Smith, Congress enacted the HCPA which provides in part:

  In any action or proceeding brought under this
  subsection, the court, in its discretion, may
  award reasonable attorneys' fees as part of the
  costs to the parents or guardian of a handicapped
  child or youth who is the prevailing party.

20 U.S.C. § 1415(e)(4)(B).

Notwithstanding this provision, the Board initially argues that plaintiffs are not entitled to attorneys fees for work performed at the administrative level, recognizing an apparent split of authority on this issue. In fact, of the many courts to address this issue, only two published opinions hold that a plaintiff may not bring an independent action for attorneys fees under the EHA. Moore v. District of Columbia, 886 F.2d 335 (D.C. Cir. 1989) ("Moore I"), vacated, 907 F.2d 165 (D.C. Cir.) (en banc) ("Moore I"), cert. denied, ___ U.S. ___, 111 S.Ct. 556, 112 L.Ed.2d 563 (1990); Rollinson v. Biggs, 660 F. Supp. 875 (D.Del. 1987). The Rollinson decision has been roundly criticized, and has been rejected by at least two courts in this district. See, E.P. v. Union County Regional High School Dist. No. 1, 741 F. Supp. 1144 (D.N.J. 1990); Chang v. Board of Educ. of Glen Ridge Township, 685 F. Supp. 96 (D.N.J. 1988). In an exhaustive opinion exploring the statutory scheme and legislative history of the EHA and HCPA, Moore I was vacated by the D.C. Circuit by a unanimous court sitting en banc. Moore II, 907 F.2d 165 (D.C. Cir. 1990) (en banc). The Third Circuit, without analysis, has recognized the right to bring an action for attorneys fees in dicta in Arons v. N.J. State Board of Educ., 842 F.2d 58, 62 (3d Cir.), cert. denied, 488 U.S. 942, 109 S.Ct. 366, 102 L.Ed.2d 356 (1988). Additionally, every federal circuit court to address the issue has concluded that a court may award attorneys fees to a parent who prevails in administrative proceedings. See, e.g., Rapid City School Dist. 5 1/4 v. Vahle, 922 F.2d 476 (8th Cir. 1990); Moore II, supra; McSomebodies v. Burlingame Elementary School Dist., 897 F.2d 974 (9th Cir. 1989); Mitten v. Muscogee County School Dist., 877 F.2d 932 (11th Cir. 1989), cert. denied, ___ U.S. ___, 110 S.Ct. 1117, 107 L.Ed.2d 1024 (1990); Duane M. v. Orleans Parish School Board, 861 F.2d 115 (5th Cir. 1988); Eggers v. Bullitt County School Dist., 854 F.2d 892 (6th Cir. 1988). As it is by now all but undisputed that a federal cause of action for attorneys fees exists, we need not add to the much that has been written on the issue, and hold that plaintiffs' claim is authorized under the plain language of the EHA.

B. Are Plaintiffs Prevailing Parties?

Defendant next contends that plaintiffs are not entitled to attorneys fees since they are not "prevailing parties" within the meaning of 20 U.S.C. ยง 1415(e)(4)(B). According to the Board, it is apparent that plaintiffs' main goal was to secure a residential placement for Daniel after he was suspended from HMHS. After the child study team recommended a day program such as the Yale school, plaintiffs filed the due process petition challenging this determination. Since the end result of the litigation was the affirmation of the child study team's initial recommendation of an out-of-district day placement (which was rejected by the Fields months before the due process petition was filed), the Board maintains that there was no material alteration of the legal relationship between the parties that justifies prevailing party status. Plaintiffs point out that, although they failed to secure a residential placement for Daniel, the "thrust" of the due process petition was to obtain an appropriate educational placement for Daniel. Additionally, ...

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