S.G.P. v. Tehachapi Unified School District ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 S.G.P., Case No. 1:22-cv-01066-ADA-BAK 12 Plaintiff, FINDINGS AND RECOMMENDATIONS RECOMMENDING GRANTING PETITION 13 v. FOR APPROVAL OF MINOR’S COMPROMISE 14 TEHACHAPI UNIFIED SCHOOL DISTRICT, ORDER VACATING SEPTEMBER 28, 2022 15 HEARING Defendant. 16 (ECF Nos. 1, 9) 17 18 I. 19 INTRODUCTION 20 Currently before the Court is the parties’ (“Petitioners”) joint petition (“Petition”) for 21 approval of a minor’s compromise, filed on August 22, 2022. (ECF No. 1.) Plaintiff S.G.P. 22 brings this action through her parent and guardian ad litem, Clarissa Parks (“Parks”). The matter 23 is before the assigned Magistrate Judge for the issuance of findings and recommendations 24 pursuant to 28 U.S.C. § 636(b)(1)(B), and Local Rule 302. The Court finds this matter suitable 25 for decision without oral argument and the September 28, 2022 hearing shall be vacated. See 26 Local Rule 230(g). The Court, having reviewed the petition, the declarations and exhibits 27 attached thereto, and the Court’s record, recommends the petition for compromise of the minor’s claims should be granted. 1 II. 2 BACKGROUND 3 On August 22, 2022, Plaintiff instituted this action by filing a petition for a minor’s 4 compromise of “claims arising under the Individuals with Disabilities Education Act (“IDEA”), 5 the Americans with Disabilities Act (“ADA”), Section 504 of the Rehabilitation Act of 1973 6 (“Section 504”), and any other known or unknown claims arising out of Plaintiff’s educational 7 program.” (Pet. Approv. Minor’s Compr. (“Pet.”) at 1-2, ECF No. 1.) 8 On August 24, 2022, Defendant Tehachapi Unified School District (“TUSD”) made an 9 appearance in this action. (ECF No. 5.) On August 24, 2022, Plaintiff filed a motion to appoint 10 a guardian ad litem, and on August 25, 2022, the Court granted the motion and appointed 11 Clarissa Parks as guardian ad litem. (ECF Nos. 6, 8.) This action was initially assigned to 12 District Judge Dale A. Drozd, however, on August 24, 2022, was reassigned to District Judge 13 Ana de Alba. (ECF No. 7.) The Court found it appropriate to construe the Petition both as a 14 complaint and as a petition for compromise of the minor’s settlement. See P.R. by & through 15 Rice v. Fresno Unified Sch. Dist., No. 119CV00220DADBAM, 2019 WL 1651267, at *1 (E.D. 16 Cal. Apr. 17, 2019). The Court also found it appropriate to set the matter for hearing before the 17 assigned Magistrate Judge for the preparation of findings and recommendations, and on August 18 25, 2022, set this matter for hearing on September 28, 2022, at 10:30 a.m., in Courtroom 9. 19 (ECF No. 9.)1 Through this order, the Court shall vacate the September 28, 2022 hearing. 20 III. 21 LEGAL STANDARD 22 “District courts have a special duty, derived from Federal Rule of Civil Procedure 17(c), 23 to safeguard the interests of litigants who are minors.” Robidoux v. Rosengren, 638 F.3d 1177, 24 1181 (9th Cir. 2011). “In the context of proposed settlements in suits involving minor plaintiffs, 25 1 Although Judge de Alba’s standing order did not specify as to whether a petition for minor’s compromise should 26 be set before the District Judge or the Magistrate Judge, Judge Dale A. Drozd’s amended standing order in light of ongoing judicial emergency in the Eastern District of California, specified such motions should be heard by the 27 assigned Magistrate Judge for the preparation of findings and recommendations. The assigned Magistrate Judge found it appropriate to set such motion before the Magistrate Judge unless there was a further order from the District 1 this special duty requires a district court to ‘conduct its own inquiry to determine whether the 2 settlement serves the best interests of the minor.’ ” Robidoux, 638 F.3d at 1181 (quoting 3 Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)). 4 The Local Rules for this district provide that “[n]o claim by or against a minor . . . may 5 be settled or compromised absent an order by the Court approving the settlement or 6 compromise.” L.R. 202(b). “In actions in which the minor . . . is represented by an appointed 7 representative pursuant to appropriate state law, excepting only those actions in which the United 8 States courts have exclusive jurisdiction, the settlement or compromise shall first be approved by 9 the state court having jurisdiction over the personal representative.” L.R. 202(b)(1). In all other 10 actions, the motion for approval of a proposed settlement shall be filed pursuant to Local Rule 11 230, and must disclose, among other things, the following: 12 the age and sex of the minor or incompetent, the nature of the causes of action to be settled or compromised, the facts and circumstances out of which the causes of 13 action arose, including the time, place and persons involved, the manner in which the compromise amount or other consideration was determined, including such 14 additional information as may be required to enable the Court to determine the fairness of the settlement or compromise, and, if a personal injury claim, the 15 nature and extent of the injury with sufficient particularity to inform the Court whether the injury is temporary or permanent. If reports of physicians or other 16 similar experts have been prepared, such reports shall be provided to the Court. The Court may also require the filing of experts’ reports when none have 17 previously been prepared or additional experts’ reports if appropriate under the circumstances. Reports protected by an evidentiary privilege may be submitted in 18 a sealed condition to be reviewed only by the Court in camera, with notice of such submission to all parties. 19 20 L.R. 202(b)(2). 21 “When the minor or incompetent is represented by an attorney, it shall be disclosed to the 22 Court by whom and the terms under which the attorney was employed; whether the attorney 23 became involved in the application at the instance of the party against whom the causes of action 24 are asserted, directly or indirectly; whether the attorney stands in any relationship to that party; 25 and whether the attorney has received or expects to receive any compensation, from whom, and 26 the amount.” L.R. 202(c). “Upon the hearing of the application, the representative 27 compromising the claim on behalf of the minor or incompetent, and the minor or incompetent 1 attendance.” L.R. 202(d). 2 In Robidoux, the Ninth Circuit cautioned that the typical practice of applying state law 3 and local rules governing the award of attorneys’ fees “places undue emphasis on the amount of 4 attorney’s fees provided for in settlement, instead of focusing on the net recovery of the minor 5 plaintiffs under the proposed agreement.” 638 F.3d at 1181. District courts should thus “limit 6 the scope of their review to the question [of] whether the net amount distributed to each minor 7 plaintiff in the settlement is fair and reasonable, in light of the facts of the case, the minor’s 8 specific claim, and recovery in similar cases.” Id. at 1181-82. “Most importantly, the district 9 court should evaluate the fairness of each minor plaintiff’s net recovery without regard to the 10 proportion of the total settlement value designated for adult co-plaintiffs or plaintiffs’ counsel— 11 whose interests the district court has no special duty to safeguard.” Id.; but see A.G.A. v. Cty. of 12 Riverside, No. EDCV1900077VAPSPX, 2019 WL 2871160, at *2 (C.D. Cal. Apr. 26, 2019) 13 (“Some courts have read Robidoux to suggest it is improper to evaluate the reasonableness of 14 attorneys’ fees provisions in proposed settlement agreements of minors’ claims . . . The Court 15 declines to adopt this approach.”).2 16 The holding of Robidoux was expressly “limited to cases involving the settlement of a 17 minor’s federal claims,” and the Circuit did “not express a view on the proper approach for a 18 federal court to use when sitting in diversity and approving the settlement of a minor’s state law 19 claims.” 638 F.3d at 1179 n.2. Some district courts have extended the application to state law 20 21 2 In A.G.A., the court noted the action had “a key distinguishing feature from the facts presented in Robidoux [where] the district court had denied in part the parties’ motion to approve the proposed settlement, which included 22 as a material term that plaintiffs’ counsel would recover approximately 56% of the settlement amount as attorneys’ fees . . . The Ninth Circuit found the district court abused its discretion in denying in part the motion based on the 23 amount of attorneys’ fees alone because it placed ‘undue emphasis on the amount of attorneys’ fees provided for in [the] settlement.’ ” 2019 WL 2871160, at *3 (quoting Robidoux, 638 F.3d at 1181). The A.G.A. court found that in 24 contrast, the attorneys’ fees at issue were not a material term of the settlement agreement, there was no express provision for attorneys’ fees, and in approving the settlement, the court thus only considered whether the net amount 25 distributed to each plaintiff was fair and reasonable in light of the facts of the case, the minors’ specific claims, and recover in similar cases, as required by Robidoux. 2019 WL 2871160, at *3. The court found the “amount of attorneys’ fees at issue here is an independent matter, the obligation arising from the retainer agreements between 26 Plaintiffs and their counsel,” and would evaluate the request in light of the special duty to safeguard the interests of the minor litigants, as well as the local rule requiring the court to fix the amount of attorneys’ fees in an action 27 involving a minor. Id. The court applied California law to evaluate the request for attorneys’ fees pursuant to the local rule, and in line with other district courts throughout California. Id. (citations omitted). The court reduced the 1 claims. See Calderon v. United States, No. 1:17-CV-00040-BAM, 2020 WL 3293066, at *3 2 (E.D. Cal. June 18, 2020) (noting that although Robidoux “expressly limited its holding to cases 3 involving settlement of a minor’s federal claims . . . district courts also have applied this rule in 4 the context of a minor’s state law claims.”) (citations omitted); A.G.A., 2019 WL 2871160, at *2 5 n.1 (“The Ninth Circuit did not express a view on the proper approach for a federal court to use 6 when sitting in diversity and approving the settlement of a minor’s state law claims . . . however, 7 the Court has federal question jurisdiction and is exercising supplemental jurisdiction over 8 Plaintiffs’ state law claims . . . as the case ‘involves’ the settlement of Plaintiffs’ federal claims, 9 the Court applies the Robidoux standard to the entire settlement.”). 10 IV. 11 DISCUSSION 12 Plaintiff seeks to compromise known and unknown claims under: (1) the Individuals with 13 Disabilities Education Act (“IDEA”); (2) the Americans with Disabilities Act (“ADA”); (3) 14 Section 504 of the Rehabilitation Act of 1973 (“Section 504”); and (4) any other known or 15 unknown claims arising out of Plaintiff’s educational program. (Pet. 2.) Thus, the Court will 16 apply the Robidoux standard when reviewing the settlement. See, e.g., Est. of Sauceda v. City of 17 N. Las Vegas, No. 211CV02116GMNNJK, 2020 WL 1982288, at *3 n.3 (D. Nev. Apr. 15, 18 2020) (“The Ninth Circuit has made clear that its standards apply in federal question cases.”). 19 A. The Petition Satisfies the Requirements of the Local Rule 20 Upon review of the Petition, the Court finds the Petitioners have sufficiently set forth the 21 information required under Local Rule 202. See Hughey v. Camacho, No. 2:13-CV-02665- 22 TLN-AC, 2019 WL 1208987, at *3 (E.D. Cal. Mar. 14, 2019) (“Plaintiffs have met the 23 procedural requirements of Local Rule 202(b)(2) . . . Plaintiffs have identified the Minor, G.H., 24 as a six-year-old male; and have identified the claims to be settled in the pending action, all 25 relevant background facts, and the manner in which the proposed settlement was determined.”). 26 The Court shall now summarize the information that was presented in compliance with the Local 27 Rule. 1 1. The Minor 2 The Petition identifies the minor Plaintiff as 10 years old, however, as of the date of this 3 findings and recommendations, she is now 11 years old. (Pet. 2.) Plaintiff resides with her 4 parents (the “Parents”), in Tehachapi, California, within the boundaries of the Eastern District of 5 California, and within the area of the Defendant school district. Plaintiff has been diagnosed 6 with Rett Syndrome, a rare genetic neurological disorder which occurs almost exclusively in 7 girls, and leads to severe impairments, including the loss of functional use of the hands, slowed 8 brain and head growth, loss of mobility, breathing irregularities, seizures, and intellectual 9 disability. (Id.) Petitioners proffer that apraxia, the inability to perform a voluntary motor 10 movement despite having the cognitive intent, is perhaps the most severely disabling feature of 11 Rett syndrome, interfering with all body movements, including speech. (Pet. 2-3.) Rett 12 syndrome is not a degenerative disorder, and barring illness or complications, children diagnosed 13 with Rett syndrome are expected to survive into childhood. (Pet. 3.) As a result of apraxia, 14 Plaintiff is unable to fee herself, stand unsupported, walk, dress, or independently meet any of 15 her personal care needs. (Id.) Plaintiff does not have the ability to speak, and is nonverbal. 16 However, according to treating doctors, Plaintiff’s condition is now stabilized, and she is 17 expected to make progress in reacquiring some of her delayed skills, including communication 18 skills. 19 The Petitioners submit that Plaintiff has been eligible at all relevant times to receive 20 special education and related services under the IDEA, under the eligibility categories of 21 “Multiple Disability” and “Orthopedic Impairment.” Plaintiff is currently placed in a special day 22 class (“SDC”) for students with moderate to severe disabilities. (Id.) 23 2. Disclosure of Attorney Interest 24 The Court finds the Petition satisfies the requirements of Local Rule 202(c), pertaining to 25 disclosure of attorneys’ interests. Specifically, the Petition specifies that Plaintiff is represented 26 by Goriune Dudukgian of the California Justice Project in both the Special Education Action and 27 the Civil Action; that Mr. Dudukgian was contacted and retained directly by Parents, who were 1 these cases, either directly or indirectly, at the instance of any party against whom the causes of 2 action are asserted; that Mr. Dudukgian is not related to any party in this case; that Mr. 3 Dudukgian has not received any compensation, to date, from Parents or from any other source 4 for services rendered in relation to the Special Education Action or the Civil Action; and that Mr. 5 Dudukgian does not expect to receive any compensation for these matters other than what is 6 specified in the settlement agreement. (Pet. 9-10; Decl. Goriune Dudukgian Supp. Pet. 7 (“Dudukgian Decl.”) ¶¶ 1-17, ECF No. 1-3 at 1-6.) 8 3. The Petition Describes the Causes of Action to be Settled 9 On March 1, 2022, Parents filed a request for a due process hearing against TUSD with 10 the California Office of Administrative Hearings (“OAH”) (the “Special Education Action”). 11 (Pet. 3; Ex. 1, ECF No. 1-3 at 7-22.) The Parents alleged that TUSD had failed to provide 12 Plaintiff a free appropriate public education (“FAPE”) during the two years preceding the 13 complaint, as a result of alleged violations of the IDEA. These allegations are summarized in the 14 Petition as follows: 15 1. TUSD denied Plaintiff a FAPE during the COVID-related school closures during 16 the 2019-2020 and 2020-2021 school years by failing to develop and offer service delivery 17 options that were appropriately tailored to Plaintiff’s individual needs and designed to ensure 18 equitable and meaningful access to the distance learning opportunities that the District was 19 providing to its non-disabled students. 20 2. TUSD denied Plaintiff a FAPE in the two years prior to the filing of the Special 21 Education Act by materially failing to implement her operative Individualized Education 22 Programs (“IEP”). 23 3. TUSD denied Plaintiff a FAPE by failing to review Plaintiff’s IEP at the times 24 and intervals required under the IDEA. 25 4. TUSD denied Plaintiff a FAPE during the 2020-2021 and 2021-2022 school years 26 by failing to offer IEPs that were reasonably calculated to enable Plaintiff to make progress 27 appropriate in light of her circumstances. 1 2020 and August 31, 2021 IEPs. (Pet. 4.) 2 During this time, Parents, through counsel, also notified TUSD of their intention to 3 pursue civil claims for damages on behalf of Plaintiff for alleged violations of the ADA and 4 Section 504 (the “Civil Action”). (Pet. 4; Dudukgian Decl. ¶ 7.) Specifically, Parents alleged 5 TUSD had violated the ADA’s “effective communication” requirements by failing to provide 6 Plaintiff with a working communication device during the 2020-2021 school year, and by failing 7 to consistently use the device during the 2021-2022 school year.3 (Pet. 5.) Parents further 8 alleged TUSD violated the ADA and Section 504 by failing to provide Plaintiff with necessary 9 services, accommodations, and supports during distance learning – including but not limited to 10 an in-person aide – and thus denying Plaintiff an equal opportunity to participate in and enjoy the 11 benefits of TUSD’s services, programs, and activities, and meaningful access to the benefits of a 12 public education.4 13 TUSD disputes Plaintiff’s claims in both the Special Education Action and Civil Action. 14 (Pet. 6.) At an OAH mediation held on April 6, 2022, the parties began negotiating a global 15 settlement of all claims, in an effort to avoid litigation. A settlement was not reached, however, 16 the parties continued to negotiate in good faith. (Pet. 6.) A claims representative from Self- 17 3 The Petition cites to 28 C.F.R. 35.260, however, the relevant regulation appears to be Section 35.160. Under the 18 regulations implementing Title II of the ADA, governmental entities must “take appropriate steps to ensure that communications with applicants, participants, members of the public, and companions with disabilities are as 19 effective as communications with others.” 28 C.F.R. § 35.160(a)(1). This includes the duty to “furnish appropriate auxiliary aids and services where necessary to afford individuals with disabilities, including applicants, participants, 20 companions, and members of the public, an equal opportunity to participate in, and enjoy the benefits of, a service, program, or activity of a public entity.” Id. at § 35.160(b)(1). 21 4 Petitioners highlight that Section 504 provides, in pertinent part, that “[n]o otherwise qualified individual with a 22 disability in the United States . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal 23 financial assistance . . . .” 29 U.S.C. § 794(a). Further, Title II of the ADA similarly provides “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the 24 benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C. § 12132. Petitioners correctly note that although there are some minor differences between 25 Section 504 and the ADA, “the elements of a valid Title II claim do not differ in any material sense from those of a valid section 504 claim and the two may be addressed together.” A.G. v. Paradise Valley Unified Sch. Dist. No. 69, 815 F.3d 1195, 1204 (9th Cir. 2016). The Ninth Circuit stated that the focus of Section 504 is “whether disabled 26 persons were denied meaningful access to state-provided services,” and while Section 504 does not require substantial adjustments in existing programs beyond those necessary to eliminate discrimination against otherwise 27 qualified individuals,” both statutes require “reasonable modifications necessary to correct for instances in which qualified disabled people are prevented from enjoying ‘meaningful access’ to a benefit because of their disability.” 1 Insured Schools of California (“SISC”) was also involved in the negotiations, and the 2 negotiations took approximately 2.5 months. 3 The parties entered into a Final Settlement Agreement and Release (the “Agreement”), 4 resolving all of Plaintiff’s claims, contingent on: (1) approval of the Agreement by TUSD’s 5 governing board; and (2) this Court’s approval of the minor’s compromise. (Pet. 6; Agreement ¶ 6 8.) 7 The Court now turns to determine whether the amount of the net settlement to the minor 8 is fair and reasonable, in light of the claims to be settled. 9 B. The Terms and Amount of Settlement are Fair and Reasonable 10 For the reasons explained below, the Court finds the “net amount distributed to each 11 minor plaintiff in the settlement is fair and reasonable, in light of the facts of the case, the 12 minor’s specific claim, and recovery in similar cases.” Robidoux, 638 F.3d at 1181-82. 13 The Agreement fully resolves all known and unknown claims arising from or related to 14 Plaintiff’s educational program through June 28, 2022, in exchange for the following settlement 15 terms: 16 1. TUSD will pay Plaintiff damages in the amount of $15,000, subject to and 17 payable consistent with this Court’s approval of the minor’s compromise. 18 2. TUSD will fund speech and language and augmentative and alternative 19 communication (“AAC”) assessments of Plaintiff, to be conducted by a non-public agency 20 (“NPA”) selected by Parents. The proffered monetary value of this settlement term is 21 approximately $2,750.13 22 3. TUSD will fund up to 25 hours of training of all District staff who work with 23 Plaintiff, as well as training for Parents, on setting up and using Plaintiff’s AAC device. This 24 training will be provided by an NPA selected by Parents at a rate not to exceed $150 per hour. 25 All staff who work with Plaintiff will be required to attend the training. The proffered monetary 26 value of this settlement term is $3,750. 27 4. TUSD will fund a bank of 100 hours of compensatory education services for 1 settlement term is between $10,000 and $16,750, depending on the type of compensatory 2 services accessed by Plaintiff. 3 5. TUSD will amend Student’s IEP to provide at least 50 minutes of mainstreaming 4 time per day, outside of lunch, recess, or P.E. The monetary value of this settlement term is 5 proffered to not be quantifiable. However, the Petitioners submit that this was one of the most 6 important aspects of the settlement for Parents, because it will ensure that Plaintiff is included 7 with her nondisabled peers for a greater part of the school day moving forward. 8 6. TUSD will contract with a mutually agreeable NPA to provide Plaintiff with aide 9 support during school days, at a rate not to exceed $85 per hour. In addition, TUSD will contract 10 with the NPA to provide 20 hours per year of behavior supervision services. These NPA aide 11 and supervision services funded will be provided to Plaintiff for a minimum period of two years, 12 in lieu of the aide support and supervision services that were previously provided to Plaintiff 13 through her IEP. The proffered monetary value of this settlement term is approximately 14 $216,000.5 15 7. TUSD will reimburse Plaintiff’s attorneys’ fees in the amount of $25,000 for the 16 Special Education Action, and will pay up to an additional $5,000 for attorney’s fees and costs 17 incurred in obtaining approval of the minor’s compromise. Petitioners proffer these attorneys’ 18 fees were negotiated separately by the parties and will not be deducted from Plaintiff’s award. 19 (Pet. 6-9; Dudukgian Decl. ¶14.) 20 The parties jointly recommend approval of the proposed settlement as fair, reasonable., 21 and in the best interests of the minor Plaintiff. (Pet. 11.) The parties proffer that the total 22 monetary vale of the proposed settlement to Plaintiff, excluding the attorneys’ fees, is 23 substantial, totaling more than $245,000. (Id.) This includes the payment of $15,000 in damages 24 for settlement of the Civil Action; and the funding of various assessments, services, staff 25 training, compensatory education, along with the amendment of Plaintiff’s IEP to provide for 26 5 Petitioner’s submit that Plaintiff’s IEP provides for 377 minutes per day, or approximately 31 hours per week, of aide services (called “intensive individualized services” in the IEP). Given a 40-week school year, this equates to 27 2,480 hours of NPA aide services, at a maximum cost of $210,800, that will be provided to Plaintiff under the Agreement. Given a typical hourly rate of $130 for behavior supervision services, that is an additional $5,200 in 1 additional mainstreaming opportunities, for settlement of the Special Education Action. (Id.) 2 The parties have directed the Court to caselaw that demonstrates the fairness of the proposed 3 settlement. 4 First, in I.H., the court approved a minor’s compromise of claims arising under the IDEA, 5 ADA, and Section 504 that provided for a net payment of $20,000 to the student, along with 6 “420 hours of individual reading instruction, 120 hours of individual writing instruction, 125 7 hours of individual math instruction, 25 hours of individual study skills counseling, and 35 hours 8 of individual speech and language services.” I. H. v. Oxnard Sch. Dist., No. 9 CV191997MWFMRWX, 2021 WL 4771800, at *1 (C.D. Cal. Apr. 13, 2021). Petitioners note 10 that, as in this case, the settlement in I.H. provided for these educational services (except for the 11 speech and language services) to be delivered by NPAs. See Id. (“Speech and language services 12 will be provided by a District employee, and all other services will be provided by certified 13 private ‘nonpublic agencies.’ ”). 14 Second, in J.S., the parties reached a settlement, prior to litigation, in a case involving 15 both IDEA and damages claims by a minor student against a County Office of Education and 16 local school district. J.S. v. Santa Clara Cnty. Off. of Educ., No. 19-CV-06668-VKD, 2019 WL 17 7020321 (N.D. Cal. Dec. 20, 2019). There, the IDEA claim alleged that the defendants had 18 denied a FAPE “during the 2018-2019 school year by, among other things, failing to provide J.S. 19 with a timely educational placement or to offer placement in the least restrictive environment; to 20 timely convene an [IEP] team meeting, or to implement his IEP; to offer adequate goals, services 21 and assistive technology; to conduct a behavioral assessment; and to make a clear written offer.” 22 Id. at *1. The student’s tort claim sought “damages arising from a January 31, 2019 incident in 23 which an SCCOE employee allegedly verbally and physically assaulted J.S.” Id. Had the parties 24 not settled, the student also intended to assert additional claims under the ADA, Section 504, the 25 California Unruh Civil Rights Act, and claims under the Fourth, Eight, and Fourteenth 26 Amendments. Id. The court approved a settlement which provided a net payment of $12,500 to 27 the plaintiff, of which $5,500 “intended to settle the tort claim” and the remainder was “intended 1 2021, whichever occurs first.” Id. at *2. The court found that the settlement was “fair, 2 reasonable and proper” and “commensurate with settlements approved in similar cases.” Id. The 3 court also recognized that there was “some value in the parties’ early resolution of this matter, 4 without incurring the additional time and expense of potentially protracted litigation in which the 5 nature and extent of J.S.’s claimed injuries likely would have been challenged by SCCOE and 6 the District.” Id. 7 In C.F., the court approved a minor student’s settlement of IDEA claims after the school 8 district deemed the student ineligible to receive special education services, a net payment of 9 $10,000 to the student for obtaining educational services. C.F. v. San Lorenzo Unified Sch. 10 Dist., No. 16-CV-01852-RS, 2016 WL 4521857, at *2 (N.D. Cal. Aug. 29, 2016) (“$10,000 of 11 the total fund will go to provide C.F. with educational services. Plaintiffs and their counsel 12 entered into a written fee agreement and agreed the attorneys will receive $55,000 of the $65,000 13 fund.”). 14 In R.Q., the court approved a minor’s compromise in a case involving TUSD. R.Q. v. 15 Tehachapi Unified Sch. Dist., No. 116CV01485NONEJLT, 2020 WL 5940168 (E.D. Cal. Oct. 7, 16 2020), report and recommendation adopted, No. 116CV01485NONEJLT, 2020 WL 6318223 17 (E.D. Cal. Oct. 28, 2020). There, the student had appealed an ALJ’s decision in the underlying 18 due process case, and also sought “damages related to [TUSD’s] refusal to draft a Behavior 19 Intervention Plan to address the boy’s behavior that interfered with his ability to access his 20 education.” Id. at *2. In the proposed settlement, TUSD agreed to pay $34,000 “represent[ing] 21 12 hours of compensatory education for the child,” with $4,000 of that amount going to the 22 parent for reimbursement for costs incurred during the time the child did not attend school, and 23 the balance going to an ABLE account “as compensation for harm suffered by the boy.” Id. The 24 court noted “that the child has been receiving his schooling in New York for at least a year . . . so 25 it is not possible for the District to provide him compensatory education services [and that] the 26 attorney and the boy’s parent agree that the settlement reflects the maximum the child could 27 recover.” Id. Also, $100,000 went to attorneys’ fees. Id. 1 damages against school districts, in the Eastern District of California. See P.H. v. Tehachapi 2 Unified School District, 2018 U.S. Dist. LEXIS 11671 (E.D. Cal. Jan. 23, 2018) (net payment of 3 $21,250); T.L. by & through Layne v. S. Kern Unified Sch. Dist., No. 117CV01686LJOJLT, 4 2019 WL 3072583, at *3 (E.D. Cal. July 15, 2019) (net settlement of $24,750, with attorneys’ 5 fees in excess of $150,000), report and recommendation adopted, No. 117CV01686LJOJLT, 6 2019 WL 3459151 (E.D. Cal. July 31, 2019); S.V. by & through Valencia v. Delano Union 7 Elementary Sch. Dist., No. 117CV00780LJOJLT, 2019 WL 2635949, at *3 (E.D. Cal. June 27, 8 2019) (net settlement of $25,713.53), report and recommendation adopted, No. 9 117CV00780LJOJLT, 2019 WL 3253969 (E.D. Cal. July 19, 2019); K.B. v. City of Visalia, No. 10 115CV01907AWIEPG, 2016 WL 5415668, at *4 (E.D. Cal. Sept. 27, 2016) (net settlement of 11 $11,685.15). 12 Petitioners further state that it is important to note that each of these settlements were 13 approved before the Supreme Court’s recent decision in Cummings v. Premier Rehab Keller, 14 P.L.L.C., 142 S. Ct. 1562, 1571-76 (2022), which the parties proffer stands for the holding that 15 emotional distress and other types of non-economic damages that are not compensable in 16 contract actions are not recoverable under Section 504. (Pet. 14.) The Petitioners submit that the 17 decision reduces the expected value of Plaintiff’s damages claims, because her injuries were 18 primarily mental and emotional and, if the case was litigated, TUSD would likely contest the 19 nature, extent, and causation of Plaintiff’s injuries. 20 As a final consideration, Petitioners note the early resolution of this case also benefits 21 Plaintiff, as rather than having to wait a year or two for her causes of action to be litigated, the 22 settlement funds will be immediately available to Plaintiff, which will enable her to access vital 23 educational assessments and services. Plaintiff will also begin receiving an additional 50 24 minutes per day of mainstreaming time at the start of the 2022-2023 school year, which is well 25 before a decision from OAH would be expected if the parties were to litigate the Special 26 Education Action, and as a result of early resolution, the parties have not yet incurred significant 27 costs in this case, thereby allowing for a greater award to Plaintiff. 1 the facts of the case, the specific claims, and recovery in similar cases. See I. H. v. Oxnard Sch. 2 Dist., 2021 WL 4771800, at *1; J.S. v. Santa Clara Cnty. Off. of Educ., 2019 WL 7020321; C.F. 3 v. San Lorenzo Unified Sch. Dist., 2016 WL 4521857, at *2; R.Q. v. Tehachapi Unified Sch. 4 Dist., 2020 WL 5940168. 5 The Court now turns to consider the proffered manner of distribution of the settlement 6 funds. 7 C. The Manner of Distribution of the Settlement Funds is Reasonable 8 In light of Plaintiff’s disability and familial economic factors, she is currently on several 9 public assistance programs including Medi-Cal, and receives services through Kern Regional 10 Center, which provides services to individuals with developmental disabilities under the auspices 11 of the Department of Developmental Services. Petitioners submit that it is anticipated Plaintiff 12 will continue to receive public assistance and will remain a beneficiary of these programs even 13 after she reaches the age of majority. 14 Given Plaintiff’s age and disability, her net recovery in this matter, her current, ongoing, 15 and future disability-related needs, and concerns about the discontinuation of her critical public 16 benefits, Plaintiff, through her guardian ad litem, requests that the Court approve the 17 disbursement of the settlement proceeds of $15,000 into a CalABLE account,6 for use on current, 18 ongoing, and/or future “qualified disability expenses.”7 Petitioners submit that the California 19 Achieving a Better Life Experience (CalABLE) Program is a State-sponsored program created 20 under 26 U.S.C. § 529A that enables disabled individuals to save for disability-related expenses 21 by putting money into tax-advantaged investments, while protecting their eligibility for means- 22 23 6 Petitioners note that under the California Probate Code § 3611, “the court making the order or giving the judgment referred to in Section 3600 shall, upon application of counsel for the minor or person with a disability, order any one 24 or more of the following: . . . (d) If the remaining balance of the money to be paid or delivered does not exceed twenty thousand dollars ($20,000), that all or any part of the money be held on any other conditions the court in its 25 discretion determines to be in the best interest of the minor or person with a disability.” Cal. Prob. Code § 3611(d). 7 “The term ‘qualified disability expenses’ means any expenses related to the eligible individual's blindness or 26 disability which are made for the benefit of an eligible individual who is the designated beneficiary, including the following expenses: education, housing, transportation, employment training and support, assistive technology and 27 personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses, which are approved by 1 tested public benefits programs. (Pet 15-16, citing CalABLE, Frequently Asked Questions, 2 https://www.calable.ca.gov/faq (last visited September 21, 2022). Petitioners proffer eligible 3 individuals can deposit up to $16,000 per year into a CalABLE account, and earnings and 4 withdrawals receive tax-free treatment if they are used for “qualified disability expenses,” 5 ranging from education, housing, transportation, supported employment, health care services, 6 assistive technology, and personal support, among other qualified expenses. Id. Petitioners also 7 proffer that CalABLE accounts have a low annual flat fee of $37, and low administrative fees for 8 things like paper statements, electronic funds transfers, etc. Id. 9 Petitioners submit that given the amount of the net settlement proceeds in this case of 10 $15,000, the creation of a special needs trust is not a viable option.8 After consulting with an 11 estate planning attorney, Plaintiff’s counsel determined that the estimated initial cost of setting 12 up a special needs trust is between $5,000 and $7,000 in legal fees to pursue the state court 13 procedure for approval in probate court. (Dudukgian Decl. ¶16.) Beyond these up-front costs, 14 there would be yearly court costs and legal fees for the accountings, and a trustee would be 15 entitled to fees as well. (Id.) Petitioners submit these costs would take up a substantial portion 16 of the Plaintiff’s settlement proceeds, which would better be used on paying for “qualified 17 disability expenses” through a CalABLE account, instead of paying an attorney and trustee. 18 Additionally, Petitioners submit that depositing the money into a blocked account is also 19 not appropriate, given that Plaintiff is only 10 years old and is expected to have on-going 20 disability-related expenses – such as for purchasing or replacing assistive technology and durable 21 medical equipment, educational services, habilitative services, and personal support – until she 22 reaches the age of majority. Petitioners contend it would be “extremely cumbersome’ for 23 Plaintiff’s parents to have to seek the Court’s approval every time they seek to make a 24 withdrawal from the blocked account. (Pet. 16-17.) 25 8 The Court notes that pursuant to California Probate Code § 3604(b), a special needs trust may be established only if the Court determines all of the following: “(1) [t]hat the minor or person with a disability has a disability that 26 substantially impairs the individual’s ability to provide for the individual’s own care or custody and constitutes a substantial handicap”; “(2) [t]hat the minor or person with a disability is likely to have special needs that will not be 27 met without the trust”; and “(3) [t]hat money to be paid to the trust does not exceed the amount that appears reasonably necessary to meet the special needs of the minor or person with a disability.” Cal. Prob. Code § 1 Based on the amount of settlement, and the Petitioner’s proffered explanations as to why 2 the manner of distribution of the monetary net settlement funds into a CalABLE account is the 3 most prudent method of distributing the settlement funds to the minor, the Court finds the 4 manner of distribution to be proper and reasonable, and recommends approval. 5 D. Attorneys’ Fees 6 Attorneys’ fees in the amount of twenty-five percent (25%) are the typical benchmark in 7 contingency cases for minors. McCue v. S. Fork Union Sch. Dist., No. 1:10-CV-00233-LJO, 8 2012 WL 2995666, at *2 (E.D. Cal. July 23, 2012) (“It has been the practice in the Eastern 9 District of California to consider 25% of the recovery as the benchmark for attorney fees in 10 contingency cases for minors, subject to a showing of good cause to exceed that rate.”). Given 11 the holding in Robidoux, it may be error for this court to reject the settlement simply because the 12 Court finds that the attorney fees sought are excessive. Velez v. Bakken, No. 2:17-CV-960 WBS 13 KJN, 2019 WL 358703, at *2 n.4 (E.D. Cal. Jan. 29, 2019) (noting holding of Robidoux makes 14 reduction of fees simply for finding them to be excessive error, and additionally finding that 15 attorneys’ fees amounting to 46% of the settlement, though higher than benchmark, was “not 16 excessive because of counsel’s experience with similar cases, the amount of time counsel spent 17 investigating the claims, and the risk counsel took in pursuing this action on a contingency 18 basis.”). 19 As noted above, TUSD will reimburse Plaintiff’s attorneys’ fees in the amount of 20 $25,000 for the Special Education Action, and will pay up to an additional $5,000 for attorney’s 21 fees and costs incurred in obtaining approval of the minor’s compromise. Petitioners proffer 22 these attorneys’ fees were negotiated separately by the parties and will not be deducted from 23 Plaintiff’s award. (Pet. 6-9; Dudukgian Decl. ¶14.) 24 Given the proffered value of the entirety of the settlement and not just the net monetary 25 amount, the Court finds the requested attorneys’ fees to be reasonable. Specifically, the $30,000 26 is substantially less than 25% of the proffered value of the entirety of the settlement to the minor 27 Plaintiff. Thus, in consideration of the facts of the case and claims brought, the risks and costs of 1 total, the Court does not find the attorneys’ fees excessive. See Velez, 2019 WL 358703, at *2; 2 Robidoux, 638 F.3d at 1181. 3 V. 4 CONCLUSION AND RECOMMENDATION 5 Based on the recovery in the similar cases cited above, the facts of this case, and the 6 minor’s specific claims, the Court finds the net amount of $15,000, to be distributed to the minor 7 through the CalABLE account, in conjunction with the non-monetary services to be provided 8 under the terms of the settlement, to encompass a fair and reasonable settlement of this action, 9 and recommends granting the petition for compromise of the minor’s claims. 10 Accordingly, IT IS HEREBY RECOMMENDED that: 11 1. The joint petition for approval of minor’s compromise (ECF No. 1), be 12 GRANTED; and 13 2. The proposed settlement be APPROVED as fair and reasonable. 14 This findings and recommendations is submitted to the district judge assigned to this 15 action, pursuant to 28 U.S.C. § 636(b)(1)(B) and this Court’s Local Rule 304. Within fourteen 16 (14) days of service of this recommendation, any party may file written objections to this 17 findings and recommendations with the Court and serve a copy on all parties. Such a document 18 should be captioned “Objections to Magistrate Judge’s Findings and Recommendations.” The 19 district judge will review the magistrate judge’s findings and recommendations pursuant to 28 20 U.S.C. § 636(b)(1)(C). The parties are advised that failure to file objections within the specified 21 time may result in the waiver of rights on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 839 (9th 22 Cir. 2014) (citing Baxter v. Sullivan, 923 F.2d 1391, 1394 (9th Cir. 1991)). 23 / / / 24 / / / 25 / / / 26 / / / 27 / / / 1 Further, IT IS HEREBY ORDERED that the hearing set for September 28, 2022, is 2 | VACATED. 3 4 IT IS SO ORDERED. FA. ee 5 | Dated: _ September 22, 2022 UNITED STATES MAGISTRATE JUDGE 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28