Perez v. Sturgis Public Schools

CONSIDERING WHETHER SETTLEMENT CONSTITUTES EXHAUSTION UNDER IDEA

Miguel Luna Perez (“Perez”) contends that if a claim is non-IDEA, and the claim does not seek relief that could be recognized under IDEA, then exhaustion is not required. Brief for Petitioner, Miguel Luna Perez at 15–16. Perez defines “exhaustion” to mean when a claim is pursued “to an appropriate conclusion.” Id. at 29. Perez argues that an appropriate conclusion includes not only decisions on the merits, but settlements as well. Id. In this case, Perez argues that he properly exhausted his IDEA claims when he settled with Sturgis Public Schools (“Sturgis”) through the administrative process. Id. at 29. Further, Perez asserts that IDEA officers can only offer equitable relief—not monetary damages for claims like emotional distress and lost income—which Perez is seeking. Id. at 21. Thus, Perez argues that because IDEA does not provide compensatory damages, Perez does not have to exhaust such a claim and is free to pursue litigation for those damages in the courts. Id. at 18.

Sturgis argues that settlement is not exhaustion of the administrative process. Brief for Respondents, Sturgis Public Schools, et al. at 47. Sturgis continues that although settlement resolves Perez’s administrative claim, the settlement leaves the administrative procedure incomplete. Id. at 47. Sturgis further contends that 20 U.S.C. § 1415(l) focuses on the kind of harm the person with a disability experienced, rather than the remedy being sought. Id. at 18. In other words, Sturgis contends that § 1415(l)’s exhaustion requirement applies to all actions pertaining to a denial of a free appropriate public education, not the individual’s preferred remedy. Id. at 17. Sturgis also concludes that any damage calculation would depend on the establishment of a FAPE developed through the administrative process. Id.

EXAMINING CONGRESSIONAL INTENT

Perez argues that Congress enacted § 1415(l) to ensure that IDEA was not the only mechanism by which people with disabilities could sue. Brief for Petitioner at 15. Perez contends that § 1415(l) allows individuals to sue under other statutes like the ADA. Id. Perez also concludes that, when § 1415(l) says that exhaustion is only required “to the same extent as would be required had the action been brought under [the IDEA],” this means Congress did not envision requiring exhaustion for individuals with disabilities seeking non-IDEA monetary damages. Id. at 18.

Sturgis contends that Congress enacted a total exhaustion requirement to provide disabled students a free appropriate public education. Brief for Respondents at 23. Sturgis notes that Congress considered the IDEA administrative process the best tool for providing a FAPE because the process is both faster and cheaper than non-IDEA litigation in the courts. Id. Sturgis asserts that Congress’s goal, even in monetary damages cases, is first to provide the child with a free appropriate public education as quickly as possible. Id. Sturgis concludes that parents should be encouraged to complete the administrative process before the child then files for damages in the courts. Id.

ANALYZING STATUTORY INTERPRETATION

Perez interprets the language of § 1415(l) to mean that exhaustion requires courts to look at what relief the individual wants, and whether IDEA gives that relief. Brief for Petitioner at 16. Perez contends that “relief” means “remedy.” Id. Further, Perez contends that § 1415(l) considers the individual’s choice of remedy when determining exhaustion. Id.

Sturgis rejects Perez’s interpretation of the word “relief” in § 1415(l) to mean “remedy.” Brief for Respondents at 25. Sturgis argues that “relief” is linguistically vague and should be interpreted according to historical and contextual understandings. Id. at 25–26. Sturgis contends such a reading means that exhaustion requires a focus on the harm, rather than the remedy for the individual’s claims. Id.

ASSESSING EXHAUSTION AND THE ADMINISTRATIVE PROCESS

Perez contends that IDEA exhaustion is satisfied by a settlement with the school, not only by a decision on the merits. Brief for Petitioner at 29. Perez argues that because he settled his IDEA claims, and the hearing officer then subsequently dismissed them in their entirety, they were adequately exhausted. Id. Perez further notes that settlement is the preferred way of resolving IDEA claims. Id. at 31. Although Perez acknowledges that exhausting IDEA claims may sometimes help improve the administrative record, Perez asserts that such concerns do not apply to claims seeking monetary damages. Id. at 23. Further, Perez argues that non-IDEA claims, like ADA claims, include elements such as intent that the IDEA does not require. Id. at 24. Perez points out that ADA claims also include defenses that IDEA does not have. Id. Thus, Perez concludes that pursuing an IDEA-claim does not provide a relevant development of the record. Id.

Sturgis argues that settlement is insufficient, and that exhaustion is typical when the individual seeks monetary damages. Brief for Respondents at 21. Sturgis contends that the reason for statutory exhaustion is to allow the administrative regime to address claims before the courts do. Id. Sturgis argues that full exhaustion enables the administrative agencies to exercise their special level of expertise as they develop the administrative record. Id. at 22. Sturgis notes that administrative agency expertise is especially relevant here, where the courts are not as prepared to handle the nuances of education policy. Id. at 22–23. Sturgis notes that the administrative procedure will also help accurately define what FAPE the student was denied, and in turn show what damages the school owes the student in future court proceedings. Id. at 28.

CONSIDERING THE RISKS OF PARALLEL LITIGATION

Perez further argues that allowing non-IDEA claims to proceed without IDEA exhaustion would not cause individuals to bypass the administrative IDEA process. Brief for Petitioner at 25. Perez argues that individuals would not bypass the process because the IDEA process is quicker and more efficient than non-IDEA and presents a lower burden to recovery. Id. Further, even if parents brought simultaneous claims under both an IDEA and non-IDEA claim, Perez asserts that the courts could handle them in their own turn by using their staying powers. Id. at 26.

Sturgis urges that allowing non-IDEA claims to proceed without IDEA exhaustion might result in parents seeking out monetary damages in the courts, thus sacrificing a speedier free appropriate public education for their child. Brief for Respondents at 24. Sturgis also refutes Perez’s contention that parallel litigation can be handled through the court’s power to stay the non-IDEA claim while the administrative agency develops the IDEA claim because the claims are too substantively similar. Id. at 28–29.

EXAMINING FUTILITY & AGGRIEVEMENT

Perez argues that requiring people with disabilities to exhaust their claims in lieu of settlement would be futile. Brief for Petitioner at 41. Perez notes that IDEA incorporated a futility exception and cannot require him to reject a settlement to preserve his non-IDEA claims. Id. at 42. Perez urges that requiring exhaustion beyond a settlement would encourage administrative forums to needlessly fight IDEA claims even when the child’s claim is destined to win. Id. at 39. Perez further argues that, had he been forced to litigate in the administrative forum, he would have achieved the same relief that he had already obtained through settlement. Id. at 49.

Additionally, Perez refutes the Sixth Circuit’s aggrievement test that requires that the individual be “aggrieved” by the findings of an administrative IDEA proceeding—which the Sixth Circuit interprets to exclude settlement actions. Id. at 38. Perez contends that exhaustion is focused on whether the administrative process has been completed, not on who wins or loses the proceeding. Id. at 41. Thus, Perez concludes that a child need not suffer the consequences of an administrative decision to sue for damages under another statute. Id. at 40–41.

Sturgis counters that Congress knew how to create a futility exception and chose not to do so with § 1415(l). Brief for Respondents at 30. Sturgis also argues that any judge-made exceptions are invalid due to the nature of the statute. Id. Additionally, Sturgis contends that even if there is a futility exception, neither settlement nor unattainable damages qualify as futility for purposes of IDEA exhaustion. Id. at 36. Sturgis concludes that futility is unavailable under IDEA in the form of settlement or unattainable damages. Id.

Moreover, Sturgis contends that aggrievement is a required element of exhaustion. Id. at 47. Sturgis argues that a separate part of the IDEA statute only recognizes exhaustion once the parties have been aggrieved by an agency decision. Id. at 47. Here, Sturgis argues that Perez has not been aggrieved by any agency action because the administrative forum did not formally deny Perez the monetary damages that he sought. Id. Rather, Sturgis argues that Perez’s settlement bypassed the necessary aggrievement and thus failed to satisfy the exhaustion requirement. Id.