Special Education Update: Settlement Agreements

The federal court of appeals over Ohio recently held that a parent’s claim against a school district for breach of a settlement agreement did not require administrative exhaustion¹. The court also held the settlement agreement did not release claims brought pursuant to 42 U.S.C. § 1983, a statute that allows for suits against governmental entities for constitutional violations.

The student here had cerebral palsy, among other health conditions. The parents claimed the aids who were assigned to assist him frequently left him alone in the restroom, crying and unable to clean himself. The parents also claimed that aids verbally, physically, and sexually abused the student.

 After the parents filed a request for a due process hearing, the parties reached a settlement during the resolution session. The final settlement agreement included a release of all claims “arising under the IDEA and concomitant provisions of state law enacted in compliance therewith * * * .”

Later, however, the parents filed a lawsuit alleging the school and other defendants violated 42 U.S.C. § 1983, among other laws, and that the school breached the settlement agreement.

The trial court dismissed the case, finding any § 1983 claims arising before the settlement agreement were barred by the terms of the settlement agreement and that any such claims arising after the settlement agreement required administrative exhaustion under the IDEA.

The court reversed on both accounts. As to the pre-settlement agreement claims, the court noted the release language only applied to IDEA claims and concomitant provisions of state law whereas the allegations “clearly point to physical, non-disciplinary, and non-educational injuries, which cannot be redressed by any remedy available under the IDEA.” Thus, the Court held the § 1983 claims do not “arise under the IDEA” and were not released in the settlement agreement. As to the post-settlement agreement claims, the court found the abuse alleged was non-educational in nature and could not be remedied through the administrative process. Thus, exhaustion was not required.

The trial court also dismissed the breach of contract claim for failure to exhaust. The court of appeals reversed this decision, too, based on the 2004 Amendments to the IDEA, which state that if resolution is reached at a resolution session, “the parties shall execute a legally binding agreement that is . . . enforceable in any State court of competent jurisdiction or in a district court of the United States.” The school attempted to argue that the settlement was not reached “at” the resolution session because the settlement agreement was not actually signed for 97 days after the resolution session and included terms that could not have been known at the resolution session. The Court rejected the school’s arguments, finding federal law allowing a parent to continue with a due process hearing if a complaint is not resolved within 30 days is “clearly inapplicable” to this situation. The Court also held, “It is not dispositive that the contract incorporates some information learned by the parties after the resolution session because agreements reached during a meeting are often refined and finalized long after the meeting concludes.”

The moral of this story is to choose your words carefully in a settlement agreement. If the parties intend to release all claims, including those arising under § 1983, the release language should specifically state that fact.

• ¹ F.H. v. Memphis City Schools, 2014 U.S. App. LEXIS 17102 (6th Cir. Tenn. 2014)↑