Perez v. Sturgis Public Schools

Issues 

May an individual sue in district court for monetary damages after accepting a settlement offer through administrative proceedings under the Individuals with Disabilities Education Act?

Oral argument: 
January 18, 2023

This case asks the Supreme Court to determine whether settlement with a school satisfies the exhaustion requirement under the Individuals with Disabilities Education Act (“IDEA”) so that a student might bring a claim for monetary damages in a district court. Miguel Luna Perez asserts that IDEA’s exhaustion is satisfied by a settlement with a school, not only by a decision on the merits. Perez further argues that requiring individuals to exhaust their claims in lieu of settlement would be futile. Further, Perez asserts that allowing non-IDEA claims to proceed without IDEA exhaustion would not cause individuals to bypass the administrative IDEA process. Sturgis Public Schools and Sturgis Board of Education (“Sturgis”) counter that settlement is insufficient for exhaustion requirements especially when the individual seeks monetary damages. Sturgis further contends that allowing non-IDEA claims to proceed without IDEA exhaustion might result in parents seeking monetary damages in the courts to the detriment of their child’s free appropriate public education. The outcome of this case has important implications on the substantive rights of children with disabilities in terms of the dispute resolution proceedings between the schools and parents.

Questions as Framed for the Court by the Parties 

(1) Whether, and in what circumstances, courts should excuse further exhaustion of the Individuals with Disabilities Education Act’s administrative proceedings under Section 1415(l) when such proceedings would be futile; and (2) whether Section 1415(l) requires exhaustion of a non-IDEA claim seeking money damages that are not available under the IDEA.

Facts 

When Miguel Luna Perez (“Perez”) was nine, he emigrated from Mexico and began school in the Sturgis Public School District. Perez v. Sturgis Public Schools at 2. Since Perez was deaf, the school assigned him an aide to assist him with learning sign language. Id. However, the aide did not know sign language. Id. Nevertheless, Perez seemed to advance in the school system, and the school placed him on the Honor Roll each semester. Id. Just before graduation, however, the school informed the Perez family that he would be unable to graduate with a diploma and would only be awarded a “certificate of completion.” Id.

Perez subsequently filed a complaint with the Michigan Department of Education. Id. Perez contended that the school denied him a proper education and violated several statutes, including the Individuals with Disabilities Education Act (“IDEA”), the Americans with Disabilities Act (“ADA”), the Rehabilitation Act, and two Michigan disability laws. Id. The administrative law judge (“ALJ”) considered the IDEA claim but dismissed both the ADA and Rehabilitation Act claims due to lack of jurisdiction. Id. Prior to the IDEA hearing, however, Perez settled with the school. Id. at 2–3. The settlement required the school to pay Perez’s attorney’s fees, provide Perez sign language instruction, supply Perez any compensatory secondary education, and provide for Perez to attend the Michigan School for the Deaf. Id.

Later, Perez filed both ADA and Michigan state law claims in the United States District Court for the Western District of Michigan against the Sturgis Public School and Sturgis Board of Education (“Sturgis”). Id. Perez demanded monetary damages and declaratory relief for emotional distress, arguing that the school discriminated against him and failed to provide the appropriate resources so that he could adequately participate in his classes. Id. Sturgis disagreed and contended that because Perez already settled his IDEA claim, the administrative process was incomplete. Id. Thus, Sturgis argued, Perez was barred from bringing any claims due to a lack of exhaustion. Id. The IDEA requires parents to complete the IDEA’s administrative process before bringing any suit under federal law that concerns the “denial of a free appropriate public education” (“FAPE”). 20 U.S.C. § 1415(l). The IDEA states that parents must first exhaust the IDEA’s administrative procedures “to the same extent as would be required had the action been brought under [the IDEA].” Id.

The District Court ruled for Sturgis. Perez v. Sturgis Public Schools at 3. Perez appealed to the United States Court of Appeals for the Sixth Circuit. Id. The Sixth Circuit affirmed the dismissal of the case. Id. at 11. The Sixth Circuit first found that Perez’s case is subject to IDEA exhaustion because the central issue concerns the harm from whether the school denied Perez a free appropriate public education. Id. at 7. The Sixth Circuit ruled that the individual’s harm, rather than the individual’s desired remedy, should characterize the claim. Id. at 7. Second, the Sixth Circuit found that Perez’s settlement procedure failed to establish whether Perez received a free appropriate public education, and thus cannot constitute exhaustion. Id. at 8. Third, the Sixth Circuit determined that no futility exception exists for § 1415(l). Id.

Perez appealed, and the United States Supreme Court granted certiorari on October 3, 2022. Joint Appendix at 1.

Analysis 

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.

Discussion 

RESOLVING EDUCATIONAL CONFLICTS PROMPTLY AND COLLABORATIVELY

A group of professors (“Professors”), in support of Perez, assert that requiring further exhaustion after voluntary settlement will undermine the IDEA’s goal of encouraging prompt resolution of educational disputes. Brief of Amici Curiae Professors, in Support of Petitioner at 22. The Professors maintain that the IDEA’s purpose is to enable speedy and efficient special-education services. Id. at 24–25. The Professors argue that every minute of instruction is critical for students and lengthy delays in educational services can be catastrophic. Id.

The Former U.S. Department of Education Officials (“Officials”), also in support of Perez, contend that narrowly construing the IDEA’s exhaustion provision will promote efficiency. Brief of Amici Curiae Former U.S. Department of Education Officials, in Support of Petitioner at 17. The Officials maintain that parents of children with disabilities seeking education services for their children have no incentive to bypass administrative procedures. Id. at 18. Furthermore, the Officials state that a ruling for Perez will not substantially increase the burden on the courts regarding IDEA-related claims. Id. at 20. The Officials further contend that parents may only recover a relatively limited range of monetary damages under the ADA and thus are not incentivized to sue. Id.

The National School Boards Association and Michigan Association of School Boards (“School Boards Associations”), in support of Sturgis, assert that the IDEA’s dispute resolution mechanism strongly encourages a collaborative resolution of disputes. Brief of Amici Curiae National School Boards Association and Michigan Association of School Boards, in Support of Respondents at 5. Specifically, the School Boards Associations maintain that, by requiring parents to exhaust the IDEA’s administrative remedies, IDEA creates a scheme to allow local education agencies to work interdependently with parents to solve problems such that the relationship between the schools and the families is better preserved. Id. at 11.

The School Superintendents Association and other school professionals’ associations (“AASA”), also in support of Sturgis, contend that if parents can skip exhausting administrative remedies, they will have less incentive to work with the school in the future, which will significantly weaken the collaborative relationship between schools and parents. Brief of Amici Curiae of AASA, the School Superintendents Association, et al., in Support of Respondents at 8–9.

CONCERNS OVER THE RIGHTS OF CHILDREN WITH DISABILITIES

The Officials, in support of Perez, assert that the IDEA, the ADA, and the Rehabilitation Act all contribute to protecting the interests of children with disabilities. Brief of Former U.S. Department of Education Officials at 8. The Officials maintain that the IDEA, however, is still distinct from the ADA and the Rehabilitation Act. Id. at 10. The Officials contend that the IDEA specifically provides certain rights for the education of disabled students. Id. at 11. The Officials contend that the Rehabilitation Act and the ADA only address reasonable accommodation requirements and anti-discrimination issues. Id. at 11. Furthermore, the Advocates for Children of New York, also in support of Perez, contend that disabled students cannot secure their rights without the futility exception. Brief of Amici Curiae of Advocates for Children of New York, et al, in Support of Petitioner at 19.

The School Boards Associations, in support of Sturgis, argue that the IDEA’s present structure helps to preserve and address disabled students’ educational necessities. Brief of National School Boards Association and Michigan Association of School Boards at 17. Specifically, the School Boards Associations maintain that the IDEA administrative process usually can resolve the educational disputes in an expeditious manner, preventing serious emotional distress. Id. at 23–24. Further, the School Boards Associations conclude that students and parents can seek educational services or equitable relief in the administrative proceedings under IDEA. Id. at 20. Given the present remedial structure, the School Boards Associations also argue that speedy access to the court system before exhausting the administrative remedies is unnecessary. Id. at 23.

Conclusion 

Acknowledgments 

Additional Resources