D.M. ex rel. E.M. v. N.J. Dep't of Educ.

D.M. & L.M. o/b/o E.M., LEARNING CENTER FOR EXCEPTIONAL CHILDREN, Plaintiffs, v. NEW JERSEY DEPARTMENT OF EDUCATION, et al., Defendants.

Civil Action No. 14-4620 (ES)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

November 17, 2015

NOT FOR PUBLICATION

OPINION

SALAS, DISTRICT JUDGE

This matter comes before the Court on Defendants' motion to dismiss Plaintiffs' Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (D.E. No. 33). Defendants are the New Jersey Department of Education ("NJDOE"); Linda Chavez, NJDOE Passaic County Supervisor of Child Study; and Peggy McDonald, NJDOE Director of the Office of Special Education Programs (collectively, "Defendants"). The Court has considered the parties' submissions and decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78(b). For the reasons below, the Court grants in part and denies in part Defendants' motion to dismiss.

I. Factual and Procedural Background

The Court previously discussed the factual background of this case as it relates to Plaintiffs D.M. and L.M. (collectively, "Plaintiff Parents") and their daughter, E.M. (D.E. No. 23, Aug. 28, 2014 Opinion ("Op.") at 3-4). Therefore, the Court will primarily detail the factual background as it relates to Plaintiff Learning Center for Exceptional Children ("LCEC") and will briefly restate the facts underlying Plaintiff Parents' claims.

A. Background Regarding LCEC

LCEC is a private school for students with disabilities ("PSSD"). (D.E. No. 1, Complaint ("Compl.") ¶¶ 2, 34). LCEC's students have been classified by their local school districts as eligible to receive special education and related services pursuant to the Individuals with Disabilities Education Act ("IDEA") and New Jersey statutes and regulations. (Id. ¶ 38). Each student that attends LCEC has an Individualized Education Program ("IEP") that designates LCEC as his or her educational placement.¹ (Id. ¶ 39). LCEC currently maintains two programs, which are informally known as the "Speer program" and the "Scoles program." (Id. ¶ 36). The Speer program is located in Clifton, New Jersey and is housed in the same building as Today's Learning Center ("TLC"), a private, regular education school.² (Id. ¶¶ 37, 45, 48).

To comply with the IDEA's mandate that students be educated in the "least restrictive environment," LCEC integrates students in the Speer program with TLC's students for non-academic activities, like lunch and recess.³ (Id. ¶ 40). This practice is often referred to as "mainstreaming." (Id. ¶ 17). Currently, ten students in the Speer program have IEPs that also call for mainstreaming in their academic programs. (Id. ¶ 41). LCEC provides this academic mainstreaming by integrating the ten students, to a varied extent, with "the regular education population at TLC." (Id. ¶¶ 41-43).

Before the start of the 2011-2012 school year, NJDOE required LCEC to apply for "non-temporary approval" of its Speer program. (Id. ¶ 47). Accordingly, LCEC submitted a "Comprehensive Program Proposal" to NJDOE, which explicitly listed the "[i]ntegration of disabled and non-disabled peers to promote appropriate social modeling and language" as a unique feature of LCEC's program. (D.E. No. 1-6, Ex. A, Comprehensive Program Proposal at 7; see also Compl. ¶ 49). By letter dated July 19, 2011, NJDOE approved LCEC for the 2011-2012 and 2012-2013 school years. (D.E. No. 1-7, Ex. B, Approval Letter; see also Compl. ¶ 50).

In 2013, LCEC sought approval to relocate the Speer Program to 199 Scoles Avenue, where the Scoles program was housed. (Compl. ¶ 53). To that end, on August 5, 2013, LCEC submitted forms to NJDOE that detailed its academic programs. (Id. ¶¶ 54-57; D.E. No. 1-8, Ex. C, Relocation Forms). On December 2, 2013, during the course of the relocation approval process, the Interim Executive Superintendent for Passaic County, Scott Rixford, sent a letter to LCEC. (Compl. ¶ 58). This letter requested "a statement of assurance that non-public school students from TLC are not in class with public school students from LCEC." (D.E. No. 1-9, Ex. D, Dec. 2, 2013 Letter From Scott Rixford at 2; see also Compl. ¶ 58).

By letter dated December 19, 2013, LCEC responded to Rixford and challenged NJDOE's authority to prohibit it from mainstreaming. (D.E. No. 1-10, Ex. E, Dec. 19, 2013 LCEC Response Letter ("LCEC Response Ltr.") at 2; see also Compl. ¶ 61). In pertinent part, LCEC stated that it was "unaware of any code provision that prohibits the location of special needs children and typically developing children in the same classroom." (Dec. 19, 2013 LCEC Response Ltr. at 2). LCEC further asserted that "the 'mainstreaming' of students with special needs is encouraged by federal and state education laws and regulations, and would be done pursuant to the students' Individualized Education Plans." (Id.).

Roughly two months later, LCEC received a letter dated February 14, 2014 from Defendant Linda Chavez, stating that LCEC's application for relocation had been denied. (Compl. ¶ 63; see also D.E. No. 1-11, Ex. F, Feb. 14, 2014 Letter from Linda Chavez ("Chavez Ltr.") at 1). Chavez stated that the basis for the denial was LCEC's practice of "plac[ing] special needs children and typically developing children in the same classroom. . . . in violation of N.J.A.C. 6A:14-4.7(a)." (Chavez Ltr. at 1 (internal quotation marks omitted); see also Compl. ¶ 64). LCEC claims that, as a result of this denial, NJDOE "was now disapproving a program it had previously approved only two years prior, at which time the mainstreaming aspect of the Speer program was explicitly identified for the DOE, and the DOE approved it." (Compl. ¶ 66).

Subsequently, by letter dated March 18, 2014, Defendant Peggy McDonald advised LCEC that it was being placed on "conditional approval" status effective the date of the letter, in part because LCEC's mainstreaming practices violated N.J.A.C. § 6A:14-4.7(a). (D.E. No. 1-13, Ex. H, Mar. 18, 2014 Letter From Peggy McDonald ("McDonald Ltr.") at 1-2; see also Compl. ¶ 73). As a result of its conditional approval status, LCEC is prohibited from accepting new students. See N.J.A.C. § 6A:14-7.10(b)(1)(i) ("An approved private school which is issued a conditional approval status may not accept new students."); (see also Compl. ¶ 76; McDonald Ltr. at 1). As of the filing of this action in July 2014, at least one school district planned to remove three students from LCEC for the 2014-2015 school year because of LCEC's conditional approval status. (Compl. ¶¶ 83-84). LCEC claims that its conditional approval status has led to substantial financial loss. (Id. ¶¶ 89, 93).

LCEC initially appealed its conditional approval status to the New Jersey Commissioner of Education ("the Commissioner") by filing a motion for emergent relief on May 21, 2014. (Id. ¶ 111). This motion was transmitted to the New Jersey Office of Administrative Law ("OAL"),and the Commissioner issued a final decision on August 10, 2014, denying LCEC's motion for emergent relief. (D.E. No. 33-1, Memorandum of Law in Support of State Defendants' Motion to Dismiss the Complaint Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) ("Def. Mov. Br.") at 4-5). In addition to filing the motion for emergent relief, LCEC also filed a Petition of Appeal with the Commissioner, challenging NJDOE's decision to place it on conditional approval status. (Compl. ¶ 122). This appeal was subsequently consolidated in the OAL with a related appeal, challenging NJDOE's denial of LCEC's request to relocate its program. (Id. ¶¶ 99, 122-23).

In May 2015, LCEC and NJDOE filed cross-motions for summary decision regarding the pending petitions of appeal. (See D.E. No. 39-1, Initial Decision of ALJ Bass ("ALJ Op.") at 3; see also D.E. No. 36, July 17, 2015 Joint Ltr.). On August 14, 2015, Administrative Law Judge ("ALJ") Ellen S. Bass issued an Initial Decision dismissing the petitions of appeal, granting NJDOE's motion for summary decision, and denying LCEC's motion for summary decision. (ALJ Op. at 12). In pertinent part, the ALJ concluded that NJDOE's action "in March 2014, placing LCEC on conditional approval because children were improperly mainstreamed, was appropriate and consistent with law and regulation." (Id. at 11). On September 24, 2015, the Commissioner of Education adopted the ALJ's Initial Decision as the final decision in the matter. (D.E. No. 45-1, Commissioner of Education Decision).

B. Background Regarding E.M.

Plaintiff Parents' daughter, E.M., was classified by her local school district as eligible to receive special education and related services under the category "Multiply Disabled." (Compl. ¶ 21). Since January 2011, E.M. has been a student at LCEC pursuant to an IEP that designates the school as her out-of-district educational placement based on her academic, social, and emotional needs. (Id. ¶¶ 22-23). Among other things, E.M.'s "IEP calls for her to [be] integratedwith regular education students in a small classroom at TLC with a low student-to-teacher ratio." (Id. ¶ 25). According to Plaintiff Parents, "the mainstreaming component of [E.M.'s IEP] . . . is essential to E.M's education," (id. ¶ 29), and E.M.'s "IEP team is in agreement that LCEC is the most appropriate placement for E.M., as the mainstreaming component is a large part of what E.M. needs to be successful," (id. ¶ 32).

C. Procedural History

On July 23, 2014, after LCEC commenced administrative proceedings challenging its conditional approval status, Plaintiffs filed the instant, three-count Complaint. (D.E. No. 1). Plaintiff Parents allege in Count One that Defendants NJDOE and Chavez have violated E.M.'s rights under the IDEA. (Compl. ¶ 138). In particular, Plaintiff Parents seek a judicial declaration that Defendants NJDOE and Chavez's "interpretation of . . . N.J.A.C. 6A: 14-4.7(a) interferes with E.M.'s right under the [IDEA] to have her program implemented as formulated by [her] IEP." (Id. ¶ 138(...