A.R. v. New York City Dept. of Educ.

Federal District Court

___F.3d ___LEXIS 8124, 2005 WL 1088427 (2d Cir. 2005)

May 10, 2005

Do “winners” in administrative hearings governing special education issues constitute “prevailing parties?” If so, are the parents entitled to attorneys’ fees pursuant to the Supreme Court’s controversial Buckhannon decision? They do and they are, on both counts, according to the second circuit court of appeals in the very important case of A.R. v. New York City Dept. of Educ.

The background of the case revolves around several sets of parents who instituted four separate administrative proceedings challenging the special education programs that the New York City Department of Education (“Department”) provided to their disabled children pursuant to the Individuals with Disabilities Education Act (“IDEA”). In two of the proceedings, the impartial hearing officers (“IHO”) entered decisions for the plaintiffs on the merits while in the two others, the IHO’s recorded and “so ordered” the terms of settlement agreements between the parties. The plaintiffs sought but were denied attorneys fees from the Department pursuant to IDEA’s fee shifting provision, 20 U.S.C. § 1415(i)(3)(B), and then brought suit in actions in the U.S. District Court for the Southern District of New York. Two district court judges awarded the parent plaintiffs attorneys’ fees as “prevailing parties” under IDEA prompting this appeal by the Department.

The circuit court tackled two issues, addressing first whether the plaintiffs were in fact “prevailing parties,” and then analyzing whether the amount of attorneys’ fees requested was “reasonable.” At stake was over $15,000 in fees relative to the four separate cases.

In a thorough and comprehensive decision, the circuit court rebuffed the Department’s challenge, which was based on the tenet that the plaintiffs who settled their cases with settlement agreements “so ordered” by IHO’s were not prevailing parties eligible for attorneys fees, and, inter alia, that the rates sought by the plaintiffs were outrageously excessive. With regard to the first issue, the court carefully scrutinized the subtleties of the fee shifting theories discussed by the U.S. Supreme Court in Buckhannon Bd. & Care Home v. W. Va. Dep’t of Health & Human Res.,532 U.S. 598, 600 (2001). While Buckhannon specifically addressed the fee shifting provisions of the Americans with Disabilities Act and the Fair Housing Amendments Act of 1988, its application to other fee shifting statutory schemes has been significant. In this case, the court found that the administrative imprimatur of “so ordering” the two settlement agreements resulted in the administrative analogs of consent decrees. The court found that there was no reason to distinguish the outcomes of the settled cases from those heard by the IHO and decided on the merits. Buckhannon’s critical language, established in the context of judicial proceedings, that “court ordered consent decrees create the ‘material alteration of the legal relationship of the parties’ necessary to permit an award of attorney’s fees” mandates that administrative orders were, in essence, administrative consent decrees. Here, the terms of the settlement agreements specifically incorporated the terms of the settlements in dispositive administrative orders, clearly fitting the Buckhannon requirement for “administrative imprimatur.”

In affirming the substantial attorneys’ fees award, the circuit court found the fees to be reasonable based on the “community” where the litigation occurred. In rejecting the Department’s contention that the “community” consisted of the wider geographic area constituting the five boroughs of New York City, rather than the community of the Southern District of New York (Manhattan), the court indicated that the strong nexus between the court, the lawyers, and the where the clients reside all weighed in favor of viewing the community as Manhattan based. In addition, the fees were determined to be “reasonable” based on the expertise of the lawyers involved, the prevailing market rates (the lodestar method), and the general rates charged by other attorneys in analogous administrative proceedings. In addition, the court added a final blow to the Department by indicating that the plaintiffs might be entitled to additional legal fees in connection with the second circuit appeal.

This case may be accessed on the second circuit court of appeals’ website athttp://www.ca2.uscourts.gov or by going to Westlaw of LEXIS websites.

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