Hatikvah International Academy v. East Brunswick Township Board

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 20-2083
_____________
HATIKVAH INTERNATIONAL ACADEMY CHARTER
SCHOOL, Appellant
v.
EAST BRUNSWICK TOWNSHIP BOARD OF
EDUCATION;
A.K. & R.K. on behalf of H.K.
____________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 3:20-cv-2382)
District Judge: Honorable Anne E. Thompson
_____________
Argued: April 12, 2021
Before: CHAGARES, JORDAN, and SCIRICA, Circuit
Judges
(Filed August 19, 2021)
Thomas O. Johnston [ARGUED]
Johnston Law Firm LLC
151 Forest Street
Suite A
Montclair, NJ 07042
Counsel for Hatikvah International Academy Charter
School
Jodi S. Howlett [ARGUED]
Cleary Giacobbe Alfieri & Jacobs, LLC
955 State Route 34
Suite 200
Matawan, NJ 07747
Counsel for East Brunswick Township Board of
Education
Michael I. Inzelbuch
555 Madison Avenue
S.I. Bank & Trust Building
Lakewood, NJ 08701
Counsel for A.K. & R.K. on behalf of H.K.
_____________
OPINION OF THE COURT
_____________
2
CHAGARES, Circuit Judge.
H.K. was a student at Hatikvah International Academy
Charter School (“Hatikvah”), a public charter school located in
East Brunswick, New Jersey. After H.K.’s parents unilaterally
moved H.K. from Hatikvah to a private school, Hatikvah and
H.K.’s parents agreed on an individualized education program
(“IEP”) that kept H.K. at the private school. The East
Brunswick Township Board of Education (“East Brunswick”),
H.K.’s resident school district, challenged this IEP in state
administrative proceedings.
The parties dispute whether the financial responsibility
for a student’s pendent placement costs rests with the resident
school district or the student’s former charter school under the
Individuals with Disabilities Education Act (“IDEA”) and N.J.
Stat. Ann. § 18A:36A-11, when the student’s former charter
school implemented the IEP that placed the student at a private
school. The District Court concluded that financial
responsibility for H.K.’s tuition costs rested with Hatikvah but
ordered East Brunswick to pay for his transportation costs. We
hold that financial responsibility for all pendent placement
costs rests entirely with the resident school district. We
therefore will reverse in part and remand.
I.
H.K. is a fifth grader who has been diagnosed with
attention deficit hyperactivity disorder, oppositional
tendencies, and developmental delays. He lives with his
parents within East Brunswick’s geographic boundaries. H.K.
was previously enrolled at Hatikvah, a local educational
agency. See 34 C.F.R. § 300.28(a) (defining a “[l]ocal
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educational agency” as a “public authority legally constituted
within a State” to direct or serve public schools). Although
both East Brunswick and Hatikvah are funded by taxpayers,
East Brunswick’s annual budget is approximately twenty-five
times greater than Hatikvah’s budget.
In September 2018, Hatikvah proposed an IEP under
which H.K. would attend the Bridge Academy School, a
private school. H.K.’s parents instead unilaterally enrolled
H.K. in a different private school, the Laurel School of
Princeton (the “Laurel School”). H.K.’s parents subsequently
filed a due process petition under the IDEA against Hatikvah
and East Brunswick, seeking reimbursement for H.K.’s costs
of attendance at the Laurel School. East Brunswick did not
object at the time to H.K.’s placement at the Laurel School.
Hatikvah and H.K.’s parents settled on the record before
the Administrative Law Judge (“ALJ”), and Hatikvah agreed,
inter alia, to implement a new IEP that kept H.K. at the Laurel
School. East Brunswick did not participate in the proceedings
and was not party to the agreement. Counsel for East
Brunswick, however, was present when the settlement
agreement was placed on the record. The ALJ approved the
settlement. East Brunswick subsequently filed a separate due
process petition with the New Jersey Department of
Education’s Office of Special Education Programs in which it
challenged H.K.’s placement at the Laurel School and argued
that East Brunswick could provide H.K. with a free,
appropriate public education in a less restrictive environment.
The ALJ concluded in June 2021 that East Brunswick failed to
4
show that it could provide H.K. with the education provided
for in his IEP.1
In response to East Brunswick’s due process petition,
H.K.’s parents filed an emergency motion to compel East
Brunswick to pay for H.K.’s costs of attending the Laurel
School while East Brunswick’s due process petition was
litigated. Hatikvah supported the motion. The parties agreed
that H.K. should remain at the Laurel School while East
Brunswick’s petition was pending, meaning that the parties
agreed that the Laurel School is H.K.’s pendent placement for
purposes of the IDEA. They dispute only whether Hatikvah or
East Brunswick should bear the cost of H.K.’s pendent
placement. The ALJ concluded that East Brunswick would
transport H.K. to and from the Laurel School but that Hatikvah
would be responsible for both tuition and transportation costs.
Hatikvah sought an automatic injunction under the
IDEA and a preliminary injunction from the District Court and
asked the court to vacate the ALJ’s order to the extent that it
required Hatikvah to pay for H.K.’s costs. The District Court
granted in part Hatikvah’s motion and vacated the portion of
the ALJ’s order requiring Hatikvah to reimburse East
1
The ALJ ordered East Brunswick to reimburse Hatikvah
for H.K.’s costs from the date of his IEP — October 28, 2019.
H.K. has attended the Laurel School, however, since
September 2018. Because the ALJ’s order did not address
reimbursements for the 2018–19 school year and because
Hatikvah has represented that it will appeal the ALJ’s decision,
absent relief from this Court, we conclude that this case is not
moot. See United Steel Workers Int’l Union v. Gov’t of V.I.,
842 F.3d 201, 208 (3d Cir. 2016).
5
Brunswick for its transportation costs. East Brunswick does
not appeal from this decision. The court otherwise denied
Hatikvah’s motion, so Hatikvah is currently required to pay for
the tuition costs of H.K.’s pendent placement. Hatikvah timely
appealed to challenge the District Court’s decision with respect
to tuition. H.K.’s parents support Hatikvah’s position in these
proceedings.
II.
We have jurisdiction under 28 U.S.C. §§ 1291 and
1292(a)(1). The District Court had jurisdiction under 20
U.S.C. § 1415(i)(3) and 28 U.S.C. § 1331. We review de novo
the application of the stay-put rule to a given set of facts. D.M.
v. N.J. Dep’t of Educ., 801 F.3d 205, 211 (3d Cir. 2015).
III.
Hatikvah contends that East Brunswick is responsible
for H.K.’s pendent placement costs under the IDEA’s stay-put
rule and N.J. Stat. Ann. § 18A:36A-11. We agree. The stay-
put rule requires that, “during the pendency of any proceedings
conducted pursuant to this section, unless the State or local
educational agency and the parents otherwise agree, the child
shall remain in the then-current educational placement of the
child.” 20 U.S.C. § 1415(j). This rule is protective in nature
and reflects Congress’s policy choice that all children with
disabilities remain in their current educational placement until
the dispute about their placement is resolved, “regardless of
whether their case is meritorious or not.” Susquenita Sch. Dist.
v. Raelee S., 96 F.3d 78, 83 (3d Cir. 1996) (quoting Drinker v.
Colonial Sch. Dist., 78 F.3d 859, 864–65 (3d Cir. 1996)). The
stay-put rule consequently functions as an “automatic
6
preliminary injunction,” and the “usual prerequisites to
injunctive relief are not required.” D.M., 801 F.3d at 211
(quoting Drinker, 78 F.3d at 864) (quotation marks omitted).
The primary factor in determining a child’s current
educational placement is the IEP that was “actually
functioning” when the stay-put rule was invoked. Raelee S.,
96 F.3d at 83 (quoting Drinker, 78 F.3d at 867). The stay-put
rule does not immediately take effect if the parents
“unilaterally move their child from an IEP-specified program
to their desired alternative setting.” M.R. v. Ridley Sch. Dist.,
744 F.3d 112, 118 (3d Cir. 2014). The rule protects the new
placement, however, “if the parents and the State or local
educational agency agree to the change.” Id. at 118–19
(quoting 20 U.S.C. § 1415(j)) (quotation marks omitted).
We have previously explained in disputes between
parents and school districts that the financial responsibility for
a student’s pendent placement costs lies with the resident
school district. See, e.g., id.; Raelee S., 96 F.3d at 84. The
IDEA itself does not specify which party must pay for the
student’s stay-put costs. See 20 U.S.C. § 1415(j). But it is
“well established” that the resident school district must fund a
student’s private placement if it is the educational setting the
student’s current IEP prescribes. M.R., 744 F.3d at 119. This
financial obligation “arises automatically” when the private
school is the student’s pendent placement. See id. at 123
(“[T]he obligation arises automatically from a determination
that the private school is the protected status quo during the
period in which the dispute resolution process is ongoing.”).
Consequently, “financing goes hand-in-hand with pendent
private-school placement.” Id. A party therefore does not need
to request separately reimbursement for the student’s stay-put
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costs. See id. (rejecting the school district’s argument that “the
IDEA does not automatically provide for reimbursement”); see
also Raelee S., 96 F.3d at 84 (“[W]e conclude that a school
district may be required to pay for tuition and expenses
associated with a pendent placement prior to the conclusion of
litigation.”). Although our prior cases interpreting the IDEA
have not addressed disputes involving charter schools, we see
no reason why their reasoning and interpretation of the IDEA
should not extend to this case to require East Brunswick to pay
for H.K.’s pendent placement costs. See, e.g., M.R., 744 F.3d
at 119; Raelee S., 96 F.3d at 84.
To the extent the IDEA and our case law are not
dispositive of cost allocation in this situation, New Jersey law
is. New Jersey law explicitly extends the resident school
district’s financial obligations to costs associated with an IEP
that a charter school implements. N.J. Stat. Ann. § 18A:36A-
11 broadly requires charter schools that provide services to
students with disabilities to comply with state laws. But it also
explicitly provides that “the fiscal responsibility for any
student currently enrolled in or determined to require a private
day or residential school shall remain with the district of
residence,” not with the charter school. Id. § 18A:36A-11(b).
The statute, however, does allow the resident school district to
challenge the student’s placement within thirty days of
receiving notice of the IEP. Id. Although the statute does not
specifically refer to pendent placement costs, it can be read in
harmony with the IDEA to require that a resident school
district that challenges a student’s private placement must still
fund the student’s pendent placement costs, even in cases
where the charter school created and implemented the
student’s IEP. Raelee S., 96 F.3d at 84; see N.J. Stat. Ann.
§ 18A:36A-11(b); see also Dig. Equip. Corp. v. Desktop
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Direct, Inc., 511 U.S. 863, 879 (1994) (“[C]ourts should
construe statutes . . . to foster harmony with other statutory
and constitutional law.”).
In this case, H.K.’s parents unilaterally moved him to
the Laurel School. H.K.’s parents, however, and Hatikvah, the
local educational agency, subsequently agreed to a new IEP
that kept H.K. at the Laurel School. Because Hatikvah agreed
to the IEP that prescribes the Laurel School as H.K.’s
educational setting and because H.K. was already a student at
the Laurel School when the stay-put rule was invoked — points
that the parties do not dispute — the stay-put rule protects
H.K.’s pendent placement at the Laurel School. East
Brunswick therefore must fund H.K.’s pendent placement at
the Laurel School, including tuition and transportation costs.
See M.R., 744 F.3d at 119. Hatikvah’s status as a public
charter school does not change East Brunswick’s financial
responsibilities. See N.J. Stat. Ann. § 18A:36A-11(b).
East Brunswick argues that Hatikvah is not entitled to
relief under the stay-put rule because its claim concerns only
monetary damages, not H.K.’s stay-put placement. But we
have made clear that “financing goes hand-in-hand with
pendent private-school placement.” M.R., 744 F.3d at 123.
East Brunswick’s financial responsibility began under the stay-
put rule once there was an agreement with respect to H.K.’s
pendent placement. See Raelee S., 96 F.3d at 84. The IDEA
does not require Hatikvah to request separately reimbursement
for H.K.’s pendent placement costs. See M.R., 744 F.3d at
123; Raelee S., 96 F.3d at 84–85. Hatikvah is thus entitled to
relief under the stay-put rule.
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Our conclusion also does not render illusory East
Brunswick’s right to object to H.K.’s placement. N.J. Stat.
Ann. § 18A:36A-11(b) gives resident districts the right to
challenge a student’s placement within thirty days — a right
that East Brunswick has already exercised. Requiring East
Brunswick to fulfill its financial obligations does not interfere
with this right. The resident school district’s responsibility to
pay for the student’s stay-put costs while challenging the
student’s placement “remain[s] intact” until the final resolution
of the dispute, regardless of whether the school district’s “case
is meritorious or not.” See M.R., 744 F.3d at 125 (quoting
Drinker, 78 F.3d at 864) (emphasis omitted); see also Drinker,
78 F.3d at 865 (“[I]mplicit in the maintenance of the status quo
is the requirement that a school district continue to finance an
educational placement made by the agency and consented to
by the parent before the parent requested a due process
hearing.” (quoting Zvi D. ex rel. Shirley D. v. Ambach, 694
F.2d 904, 906 (2d Cir. 1982)) (alteration in original)). New
Jersey law similarly imposes this requirement on resident
school districts and does not exempt resident school districts
from this financial responsibility when they challenge the
student’s placement. See N.J. Stat. Ann. § 18A:36A-11(b).
East Brunswick is therefore permitted to object to H.K.’s
placement, but it nonetheless must fund his pendent placement
costs.2
2
East Brunswick relies on our non-precedential opinion
in L.Y. ex rel. J.Y. v. Bayonne Board of Education, 384 F.
App’x 58 (3d Cir. 2010). East Brunswick’s reliance on L.Y. is
misguided. The Court in L.Y. was not only faced with
distinguishable and non-analogous facts, but also the Court
explicitly recognized that the school district “bears fiscal
responsibility for a child’s special education services when the
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We recognize that our conclusion today may raise
concerns that a public charter school unnecessarily will send
students to a private school to shift fiscal responsibility to the
resident school district. But reaching the opposite result and
requiring charter schools — whose budgets are frequently
much smaller than those of school districts — to bear the
financial burden in turn could lead to charter schools refraining
from placing students in private schools, thus depriving
students that require private placement of an appropriate
education. See M.R., 744 F.3d at 126 (discussing how stay-
put protection is necessary to prevent parents from facing “the
untenable choice” of removing their child from the child’s
private pendent placement or bearing the costs of this
placement themselves); Raelee S., 96 F.3d at 87 (discussing
how the IDEA requires that school districts bear the financial
burden). New Jersey has explicitly rejected this alternative in
favor of requiring resident school districts to bear the financial
burden. N.J. Stat. Ann. § 18A:36A-11(b). In other words,
New Jersey’s decision to give charter schools the authority to
implement IEPs while leaving financial responsibility with the
resident school district means that any tension stemming from
the separation of financial responsibility and decision-making
authority is an apparently deliberate policy choice. See id. Just
as “Congress has imposed a significant financial burden on
States and school districts that participate in [the] IDEA,”
Florence Cty. Sch. Dist. Four v. Carter, 510 U.S. 7, 15 (1993),
New Jersey too has placed this burden on resident school
districts. See N.J. Stat. Ann. § 18A:36A-11(b). Although “we
are mindful of the financial burden which will, in some
IEP requires placement at a private school.” Id. at 61.
Moreover, our non-precedential opinions are not binding, and
we do not rely on them as authority. 3d Cir. I.O.P. 5.7.
11
instances, be borne by local school districts,” Raelee S., 96
F.3d at 87, our IDEA case law and the language of N.J. Stat.
Ann. § 18A:36A-11(b) require that the resident school district
pay for the student’s pendent placement costs, even if the
student’s former charter school created and implemented the
current IEP.3 See, e.g., M.R., 744 F.3d at 119.
IV.
Because we conclude that East Brunswick bears the
burden of H.K.’s pendent placement costs under the stay-put
rule, we will reverse the District Court’s Order with respect to
H.K.’s tuition costs and remand for further proceedings.4
3
Our recent decision in Y.B. v. Howell Township Board
of Education, 4 F.4th 196 (3d Cir. 2021), does not alter our
conclusion, given that the stay-put provision did not apply in
Y.B., whereas it does in this case. Id. at 201.
4
Because we conclude that Hatikvah is entitled to an
automatic injunction, we do not reach whether Hatikvah is
entitled to a “traditional” preliminary injunction.
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