G. W. v. Ringwood Bd. of Educ.

28 F.4th 465

G. W.; MK. W., Appellants

v.RINGWOOD BOARD OF EDUCATION

No. 20-3552

United States Court of Appeals, Third Circuit.

Argued: October 27, 2021

Opinion Filed: March 16, 2022

John D. Rue [ARGUED], John Rue & Associates, 40 South Fullerton Avenue, Suite 29, Montclair, NJ 07042, Donald A. Soutar, Coyle Law Group, 55 Madison Avenue, Suite 400, Morristown, NJ 07960, Robert C. Thurston, Thurston Law Offices, 100 Springdale Road A3, PMB 287, Cherry Hill, NJ 08003, Counsel for Appellants

Jessika Kleen [ARGUED], Machado Law Group, 1 Cleveland Place, Springfield, NJ 07081, Counsel for Appellee

Before: GREENAWAY, JR., KRAUSE, and PHIPPS, Circuit Judges.

GREENAWAY, JR., Circuit Judge.

The Individuals with Disabilities Education Act ("IDEA") establishes an administrative process to vindicate a student with a disability's right to a free appropriate public education ("FAPE") from his or her school district. That process culminates in a due process hearing wherein an impartial hearing officer, usually an administrative law judge ("ALJ"), considers whether the school district has provided a FAPE. After the hearing, the IDEA envisions entry of an order detailing the ALJ's conclusions. The aggrieved party is then permitted to appeal that administrative determination in a federal district court. In this appeal, we consider whether the entry of a "Decision Approving Settlement" in an IDEA dispute satisfies the jurisdictional prerequisite to an appeal of an administrative IDEA determination pursuant to 20 U.S.C. § 1415(i). We conclude that it does. Accordingly, we will reverse the order of the District Court and remand the matter for consideration of the merits.

I. BACKGROUND

M.W. is a minor child eligible for special education and related services pursuant to the IDEA. Appellants G.W. and Mk. W. are his parents. On August 16, 2018, Appellants filed a Petition for Due Process against appellee Ringwood Board of Education (the "Board") before the Commissioner of Education of the State of New Jersey. On September 17, 2018, the New Jersey Department of Education gave the parties notice that the matter had been transferred to the Office of Administrative Law ("OAL") and a hearing before an ALJ was scheduled for October 4, 2018. After an adjournment, the hearing was rescheduled for May 7, 2019. On May 7, prior to the scheduled hearing time, the ALJ met with counsel for both parties. After conferring with counsel, the ALJ met with G.W. and a representative from the Board.¹ The parties purportedly entered into a settlement agreement and the terms of the agreement were read into the record.

In a "Decision Approving Settlement," the ALJ made the following findings:

1. The parties have voluntarily agreed to the settlement as evidenced by their signatures or their representatives' signatures on the attached document.

2. The settlement fully disposes of all issues in controversy between them and is consistent with the law.

A50-51.

The ALJ also explicitly ordered "that the parties comply with the settlement terms." The settlement agreement, among other things, reflects that the parties would each bear their own fees and costs.

On May 10, 2019, Appellants wrote separately to the Superintendent of Ringwood Public Schools and all members of the Board repudiating the agreement. That same day, Appellants filed a motion before the ALJ to "set aside the settlement."

On June 14, 2019, Appellants filed a complaint in the District Court for the District of New Jersey. The complaint alleged that Appellants did not knowingly and voluntarily enter into the agreement; they sought relief pursuant to the IDEA (Count One), the New Jersey Declaratory Judgment Act to declare the settlement void (Count Two), and the New Jersey Declaratory Judgment and Civil Rights Acts to declare the attorney fee waiver void (Count Three).

The Board moved to dismiss the complaint. In resolving the motion, the District Court sua sponte raised the issue of subject matter jurisdiction. It characterized Plaintiff's complaint as arising out of contract law and questioned whether the ALJ's bare findings that the settlement was entered into voluntarily and resolved all disputes before the OAL satisfied the jurisdictional requirements of the IDEA.

Accordingly, the District Court denied the motion to dismiss without prejudice and directed the parties to brief the issue of subject matter jurisdiction.

After the parties briefed the issue, the District Court concluded that it was without jurisdiction. It held that no jurisdiction was conferred by two provisions of the IDEA providing for the enforceability of settlement agreements in the federal courts: 20 U.S.C. § 1415(e), the mediation provision; or § 1415(f)(1)(B), the resolution session provision. It also held that no jurisdiction attached pursuant to § 1415(i) because the ALJ's decision was not based on "substantive grounds," as required by § 1415(f). The District Court accordingly dismissed the matter without prejudice for lack of subject matter jurisdiction. Appellants filed this timely appeal.

II. JURISDICTION AND STANDARD OF REVIEW

This Court has "jurisdiction pursuant to 28 U.S.C. § 1291 over a dismissal for lack of subject matter jurisdiction." Nichols v. City of Rehoboth Beach , 836 F.3d 275, 279 (3d Cir. 2016).²

"We exercise plenary review over a district court's order dismissing a complaint for lack of subject matter jurisdiction." Batchelor v. Rose Tree Media Sch. Dist. , 759 F.3d 266, 271 (3d Cir. 2014) (citing Taliaferro v. Darby Twp. Zoning Bd. , 458 F.3d 181, 188 (3d Cir. 2006) ). "A challenge to subject matter jurisdiction ... may be either a facial or a factual attack." Davis v. Wells Fargo , 824 F.3d 333, 346 (3d Cir. 2016). This is a facial attack on jurisdiction, "contest[ing] the sufficiency of the pleadings." Batchelor , 759 F.3d at 271. This Court thus "review[s] only whether the allegations on the face of the complaint, taken as true, allege facts sufficient to invoke the jurisdiction of the district court." Id. (quoting Taliaferro , 458 F.3d at 188 ).

III. ANALYSIS

We begin from the premise that "[f]ederal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute." Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). "It is to be presumed that a cause lies outside this limited jurisdiction and the burden of establishing the contrary rests upon the party asserting jurisdiction." Id. (citations omitted).

Appellants argue that 20 U.S.C. § 1415(i) confers jurisdiction over Count One of the complaint to the District Court, and that the District Court had supplemental jurisdiction over Counts Two and Three of the complaint pursuant to 28 U.S.C. § 1367. They interpret this Court's decision in P.N. v. Clementon Bd. of Educ. , 442 F.3d 848 (3d Cir. 2006), as acknowledging jurisdiction over settlements of administrative matters embodied in an ALJ's consent order. They theorize that the ALJ's incorporation of the terms of the settlement into its final order is a decision on the merits and that the ALJ's direction that the parties comply with the agreement preserves jurisdiction for the District Court. Appellants also argue that the District Court should have exercised general "arising under" jurisdiction pursuant to 28 U.S.C. § 1331 over Count One. They submit that their claim arises out of the IDEA and that the District Court was without discretion to decline jurisdiction.

The Board denies that federal question jurisdiction is invoked by Appellants' claims. The Board submits that the IDEA only empowers federal courts to review settlements arising out of the prescribed mediation process or resolution session in § 1415. It notes that the settlement agreement in this matter was not reached pursuant to either process. It maintains that § 1415(i)(2)(A) can only confer jurisdiction if, after a due process hearing, an aggrieved party seeks review of a hearing officer's findings and decision determining on substantive grounds whether the student received a FAPE. In its view, the colloquy before the ALJ and accompanying order in this case do not meet that standard.

A. IDEA Statutory Scheme

Congress enacted the IDEA "to ensure that all children with disabilities have available to them a [FAPE]." Y.B. v. Howell Twp. Bd. of Educ. , 4 F.4th 196, 198 (3d Cir. 2021) (quoting 20 U.S.C. § 1400(d)(1)(A) ). " ‘The IDEA offers federal funds to States in exchange for a commitment[ ] to furnish’ a FAPE ‘to all children with certain physical or intellectual disabilities.’ " Id. (quoting Fry v. Napoleon Cmty. Schs. , ––– U.S. ––––, 137 S. Ct. 743, 748, 197 L.Ed.2d 46 (2017) ) (alteration in original). The IDEA directs States to "implement specified procedural safeguards to ensure children with disabilities and their parents are provided with due process." Batchelor , 759 F.3d at 272. "These safeguards, known collectively as the IDEA's administrative process, provide parents with an avenue to file a complaint and to participate in an impartial due process hearing" addressing, among other things, "the provision of a [FAPE] to [their] child." Id. (quoting 20 U.S.C. § 1415(b)(6)(A) ).

"Following completion of the IDEA's administrative process ... the IDEA affords ‘[a]ny party aggrieved by the findings and decisions’ made during or pursuant to the impartial due process hearing an opportunity for judicial review." Id. (quoting § 1415(i)(2)(A) ) (alteration in original). Accordingly, "the IDEA ‘confers upon disabled students an enforceable substantive right to public education in participating States.’ " Y.B. , 4 F.4th at 198 (quoting Honig v. Doe , 484 U.S. 305, 310, 108 S.Ct. 592, 98 L.Ed.2d 686 (1988) ).

B. Jurisdiction over the Complaint

Appellants contend that the "Decision Approving Settlement" entered by the ALJ here is an appealable determination arising out of their due process complaint. We agree.

The Board submits that perfunctory approval of a...