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BOROUGH OF PALMYRA v. F.C.

April 22, 1998

BOROUGH OF PALMYRA, BOARD OF EDUCATION, Plaintiff/Counter-Defendant,
v.
F.C., A Minor through his Parents, R.C. and M.C., Defendant/Counterclaimant/Third-Party Plaintiff, v. DENNIS HURLEY, RONALD CANCELLIERE, DAVE BELL, MATTHEW BUSCILLO, ROSEMARIE BLUMENSTEIN, DORI LEVY, GARY HORTON, HOWARD COHEN, and THOMAS DELMOORE, Third-Party Defendants



The opinion of the court was delivered by: SIMANDLE

OPINION

 SIMANDLE, District Judge:

 Plaintiff Borough of Palmyra Board of Education ("Board") brought this action appealing the November 13, 1997, decision of Administrative Law Judge Joseph Fidler ("ALJ") of the New Jersey Office of Administrative Law. In that decision, the ALJ determined that under Section 504 of the Rehabilitation Act, 29 U.S.C. § 794, and the implementing regulations at 34 C.F.R. 104.33, the Board is responsible for the tuition and transportation costs of defendant F.C.'s attendance at a private school. Defendant F.C., a minor through his parents R.C. and M.C. (collectively, "the Cs"), counterclaimed seeking temporary and permanent injunctive relief compelling the Board to comply with the ALJ's decision. Presently before the court is F.C.'s motion, upon order to show cause, seeking a preliminary injunction to compel the Board to comply with the ALJ's decision by paying for F.C.'s tuition in the private program pending final review of the ALJ's decision and the Board's cross-motion for a stay of that decision.

 These cross-motions were heard on April 17, 1998. This case requires the court to determine whether the local school board should be required to bear the costs of tuition and transportation to a private school program rendering special educational services under Section 504 of the Rehabilitation Act of 1973 while the Board appeals the order of a State Administrative Law Judge, which required it to bear these expenses. This court's findings follow pursuant to Federal Rules of Civil Procedure 52(a) and 65(d).

 I. Background

 F.C. is a 15-year-old student who resides within the Palmyra Board of Education District. He has been diagnosed with a severe case of Attention Deficit Hyperactivity Disorder ("ADHD"). The counterclaim alleges that F.C.'s disorder causes him to be easily distracted, disorganized, and impulsive and has negatively affected his performance in school. (Counterclaim P 8.) The Cs suspected that F.C. suffered from ADHD as early as November 1992 and informed the Board of their suspicions at that time. (Counterclaim P 9.) In April 1993, the Board confirmed that F.C. did suffer from ADHD, but informed the Cs that F.C. was not eligible for special educational services under the Individuals with Disabilities Education Act ("IDEA"), 20 U.S.C. § 1415, et seq.1 (Id. at P 9.) The Board allegedly did not inform the Cs that F.C. might be eligible for special services under Section 504 of the Rehabilitation Act of 1973 ("Section 504"), 29 U.S.C. § 794, until June 1994. (Id. at P 11.)

 In April 1995, the Board produced a written Section 504 plan for F.C. The Cs allege that the plan failed to address F.C.'s unique academic and affective disorders and was never fully implemented by the Board. (Id. at PP 14, 18.) Dissatisfied with the Board's efforts to accommodate F.C.'s disability, the Cs sought an administrative hearing before the New Jersey Department of Education in October 1996 and placed him at the Hill Top Preparatory School, a private school for educationally handicapped students, in February 1997. (Id. at P 20.) The matter was transferred to the New Jersey Office of Administrative Law, which is responsible for conducting hearings for contested issues under Section 504. See N.J.A.C. 6:28-2.7. The case was assigned to Administrative Law Judge Joseph F. Fidler ("ALJ") on December 24, 1996. (Counterclaim, Ex. A at 2.)

 The ALJ conducted a hearing over seven days during the Spring and Fall of 1997, hearing testimony of 16 witnesses for the Cs and one witness for the Board. The Cs asserted that the Board had failed to develop and implement a Section 504 accommodation plan that effectively addressed F.C.'s disability, necessitating F.C.'s placement at the Hill Top School. (Counterclaim P 21.) The ALJ issued a 43-page opinion on November 13, 1997, concluding that the Board had indeed failed to provide F.C. with a free appropriate education as required by Section 504 and 34 C.F.R. § 104.33. (Counterclaim, Ex. A at 37.) The ALJ further found that because the Board's Section 504 plan for F.C. was "seriously deficient," the Cs were entitled under 34 C.F.R. § 104.33 to enroll F.C. in the Hill Top School. (Id. at 39.) Pursuant to his findings, the ALJ ordered the Board to reimburse the Cs for the costs of F.C.'s private placement from the time of his enrollment until the Board offers F.C. a free appropriate education, consistent with the requirements of Section 504 and 34 C.F.R. § 104.33. (Id. at 39-40.) The Board has yet to comply with the ALJ's decision. *fn2"

 On December 16, 1997, the Board commenced this action, appealing the decision of the ALJ. *fn3" On appeal, the Board asserts that the ALJ improperly held that under Section 504 the Board had the burden of proving that it had offered F.C. a free and appropriate education. *fn4" (Compl. P 15.) The Board also challenges the ALJ's ultimate determination that the Board failed to offer F.C. a free and appropriate education under Section 504 and 34 C.F.R. § 104.33. (Compl. PP 21, 22.)

 The Cs filed a counterclaim and third-party complaint on February 25, 1998. *fn5" They allege that by failing to inform them of their rights under Section 504 and then by refusing to comply with the ALJ's order, the Board and the third-party defendants have violated and are continuing to violate F.C.'s rights under Section 504 and are guilty of contempt. *fn6" (Counterclaim PP 27, 38.) They bring claims under 42 U.S.C. § 1983 and directly under Section 504, over which this court has subject-matter jurisdiction. *fn7" Among other monetary relief, the Cs seek an order compelling the Board to comply with the ALJ's decision.

 II. Discussion

 Presently before the court is the Cs' motion for a preliminary injunction compelling the Board to comply with the ALJ's decision and the Board's cross-motion for a stay of the decision pending the outcome of the Board's appeal. The standard for determining whether to stay an administrative decision is essentially the same as that applied to an application for preliminary injunctive relief, and the court will address them together. When considering whether to stay an administrative decision or to issue a preliminary injunction, the court must balance four factors: (1) the likelihood that the moving party will prevail on the merits of its claim (appeal); (2) the likelihood that it will suffer irreparable harm if the preliminary injunction (stay) is not granted; (3) the prospect that granting the injunction (stay) will result in substantial harm to other interested persons; and (4) the public interest in granting the injunction (stay). AT&T Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1427 (3d Cir. 1994), cert. denied, 514 U.S. 1103, 131 L. Ed. 2d 757, 115 S. Ct. 1838 (1995); Kershner v. Mazurkiewicz, 670 F.2d 440, 443 (3d Cir. 1982) (en banc).

 1. Likelihood of Success

 The Board argues that it is likely to succeed on the merits of its appeal because the ALJ improperly ordered it to pay for the costs of sending F.C. to a private school until the Board proposed a plan that complied with the requirements of Section 504 and its implementing regulations. *fn8" The Board contends that "no District Court has ever required that a school district pay for a private placement under Section 504." (Pl. Br. at 8-9.) The Board has apparently overlooked the recent decision from the Eastern District of Pennsylvania, Christen G. v. Lower Merion School Dist., 919 F. Supp. 793 (E.D. Pa. 1996), which involved an action under the IDEA and Section 504. Id. at 797. The plaintiffs, a mother and child, claimed that the defendant school district had failed to offer a free appropriate education to the child, who suffered from ADHD. Id. The plaintiffs placed the child in a private school during the period when the defendant failed to provide her with a free appropriate education and sought to recover the costs of the private placement. Id. The court held that reimbursement for the costs of private school education was appropriate relief under both the IDEA and Section 504. Id. at 816, 821.

 The Christen G. court's holding is consistent with the regulations implementing Section 504. The regulations mandate that schools to which Section 504 applies must provide a free appropriate education to qualified handicapped students. 34 C.F.R. § 104.33. Such free education "may consist either of the provision of free services or, if a recipient places a handicapped person in or refers such person to a program not operated by the recipient as its means of carrying out the requirements of this subpart, of payment for the costs of the program." 34 C.F.R. § 104.33(c)(1). The regulations further provide for the payment of transportation costs to and from the private program. 34 C.F.R. § 104.33(c)(2).

 The Supreme Court has endorsed the Section 504 implementing regulations. In Consolidated Rail Corp. v. Darrone, 465 U.S. 624, 104 S. Ct. 1248, 79 L. Ed. 2d 568 (1984), the Court noted:

 
This Court generally has deferred to contemporaneous regulations issued by the agency responsible for implementing a congressional enactment. [Section 504's] regulations particularly merit deference in the present case: the responsible congressional committees participated in their formulation, and both these ...

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