J.H. v. Nev. City Sch. Dist.

J.H., a minor; by and through her guardian ad litem SARAH H.and SARAH H. and DAVID H., Individually, Plaintiff, v. NEVADA CITY SCHOOL DISTRICT, Defendant.

No. 2:14-CV-00796-TLN-EFB

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

March 6, 2015

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

This matter is before the Court pursuant to Defendant Nevada City School District's ("Defendant") Motion to Dismiss Plaintiffs' Complaint. (Def.'s Mot. to Dismiss, ECF No. 7.) Plaintiff J.H., through parents Sarah H. and David H., ("Plaintiffs") filed an opposition to Defendant's motion. (Pls.' Opp'n, ECF No. 9.) The Court has carefully considered the arguments raised in Defendant's motion and reply, as well as Plaintiffs' opposition. For the reasons set forth below, Defendant's Motion to Dismiss is GRANTED IN PART and DENIED IN PART.

I. FACTUAL BACKGROUND

Plaintiff J.H. is a child eligible for special education services under the qualifying condition of specific learning disability.¹ (Compl., ECF No. 1 at ¶ 8.) On July 8, 2010, Plaintiffsfiled a due process complaint against Defendant before the California Office of Administrative Hearings ("OAH") in compliance with 20 U.S.C. § 1415(c)(2), which sets out procedures for filing a due process complaint under the Individuals with Disabilities Education Act ("IDEA"). (ECF No. 1 at ¶¶ 10-11.) On April 14, 2011, the parties entered into a settlement agreement resolving all educational claims prior to and through the 2012-13 school year. (ECF No. 1 at ¶ 12.) Among other obligations, Defendant agreed to fund 480 hours of private instruction for Plaintiffs with the nonpublic agency Lindamood Bell through June 30, 2012, and to establish a compensatory education fund in the amount of $12,000 to be accessible for private tutoring in academics or arts and other services. (ECF No. 1 at ¶¶ 13-14.)

Plaintiffs subsequently alleged that Defendant did not comply with the settlement agreement and failed to pay for any Lindamood Bell services provided to J.H. after June 30, 2012. (ECF No. 1 at ¶ 19.) Plaintiff further alleged that Defendant failed to reimburse Plaintiffs for dance lessons provided to J.H. (ECF No. 1 at ¶ 21.) As a result of these alleged deficiencies, Plaintiffs filed a compliance complaint with the California Department of Education ("CDE") on December 21, 2012, pursuant to Title 34 of the Code of Federal Regulations ("C.F.R.") section 300.152, which provides for minimum state compliance procedures. (First Compliance Compl., ECF No. 1-3.) The compliance complaint sought access to the compensatory education fund for the 2013-14 school year and reimbursement for the dance lessons. (ECF No. 1-3.) On February 15, 2013, the CDE issued an Investigation Report, finding that Defendant was in compliance and ordered no corrective action. (Feb. 15, 2013 CDE Investigative Report, ECF No. 1-4.) On March 19, 2013, Plaintiffs filed a request for reconsideration with the CDE. (Mar. 19, 2013 Req. forRecons., ECF No. 1-5.) Plaintiffs' request for reconsideration alleged that the CDE misstated the facts and misapplied the law. (ECF No. 1-5.) On April 23, 2013, the CDE issued a Reconsideration Report finding that Defendant was out of compliance with regard to reimbursement for the dance lessons. However, the CDE did not provide Plaintiffs access to the compensatory education fund. (Apr. 23, 2013 Recons. Report, ECF No. 1-6 at 3-4.)

On July 22, 2013, Plaintiffs filed a second compliance complaint with the CDE seeking reimbursement for tutoring services obtained after June 30, 2012, and access to the compensation fund for the 2013-2014 school year. (Second Compliance Compl., ECF No. 1-7.) On September 16, 2013, the CDE issued an Investigation Report, finding that Defendant was out of compliance with California Education Code section 56043(i). (Sept. 16, 2013 CDE Investigation Rept., ECF No. 1-8.) On October 21, 2013, Defendant filed a request for reconsideration with the CDE, alleging that the CDE had misapplied the law. (Oct. 21, 2013 Req. for Recons., ECF No. 7-2 at 8.) On November 21, 2013, the CDE issued a Reconsideration Investigation Report, with only minor changes from the September 16, 2013 Investigation Report. (Nov. 21, 2013 CDE Recons. Investigation Report, ECF No. 1-9.) After no appeal was made pursuant to 20 U.S.C. § 1415(g), the CDE mailed a letter to both parties on December 24, 2013, declaring the case closed. (Dec. 24, 2013 CDE Letter, ECF No. 7-3 at 91.)

On February 19, 2014, Defendant petitioned for a writ of mandate and a writ of administrative mandate against the CDE in the Superior Court of California, County of Nevada, seeking to vacate and void the second compliance complaint findings and reconsiderations to the extent that they are adverse to Defendant. (State Ct. Compl., ECF No. 7-3 at 97, 113.) On October 22, 2014, the superior court dismissed counts one and two of Defendant's complaint without leave to amend for failure to name an indispensible party. (Order on Dem., ECF No. 12-1 at 4.)²

On March 28, 2014, Plaintiffs brought this suit against Defendant for denial of Plaintiff's free appropriate public education ("FAPE") for failure to implement Plaintiff J.H.'sindividualized education program ("IEP") under the IDEA, 20 U.S.C. § 1400, et seq., and Title 34 of the C.F.R. section 300.323(c)(2). Plaintiffs also brought claims for attorneys' fees under the IDEA and for breach of contract. Defendant filed the instant motion, arguing that this Court does not have jurisdiction to hear Plaintiffs' claims because such claims are time-barred under the IDEA. (ECF No. 7-1 at 10.)

II. STANDARD OF LAW

Federal Rule of Civil Procedure 12(b)(1) allows a party, or the Court on its own initiative, to challenge the court's subject matter jurisdiction at any stage in the litigation. Fed. Rule Civ. Pro. 12(b)(1) & (h)(3); Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006). Under Federal Rule of Civil Procedure 12(h)(3), the Court is required to dismiss the action if it lacks subject matter jurisdiction. Fed. Rule Civ. Pro. 12(h)(3); Kontrick v. Ryan, 540 U.S. 443, 455 (2004). A federal district court generally has subject matter jurisdiction over a civil action when: (1) a federal question is presented in an action "arising under the Constitution, laws, or treaties of the United States"; or (2) there is complete diversity of citizenship and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1331, 1332(a).³

With regard to federal question jurisdiction, federal courts have "jurisdiction to hear, originally or by removal from a state court, only those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action, or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983); see Republican Party of Guam v. Gutierrez, 277 F. 3d 1086, 1088-89 (9th Cir. 2002). "[T]he presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F. 3d 1083, 1091 (9th Cir. 2009) (citation and quotation marks omitted).

III. ANALYSIS

a. Denial of FAPE (Count I)

i. The IDEA

Plaintiffs seek to bring an action against Defendant for denial of FAPE claims in violation of the IDEA, 20 U.S.C. § 1415(i)(3), and Title 34 of the C.F.R. section 300.323(c)(2). (ECF No. 1 at ¶¶ 1, 45.) Defendant contends that Plaintiffs' claims are time-barred under the IDEA's statute of limitations for bringing a civil action under 20 U.S.C. § 1415(i)(2)(B). (ECF No. 7 at 10-11.) The Court finds Plaintiffs are time-barred and GRANTS Defendant's Motion to Dismiss Count I.

The IDEA is a federal statute enacted "to ensure that all children with disabilities have available to them a free appropriate public education." 20 U.S.C. § 1400(d)(1)(A). To comply with the IDEA, school districts must create an IEP for each child with a disability. Id. at § 1414(d). If a parent does not agree with his or her child's IEP, the parent "shall have an opportunity for an impartial due process hearing, which shall be conducted by the State educational agency or by the local educational agency." Id. at § 1415(f)(1)(A). "Any party aggrieved by the findings and decision made [in the due process hearing or by placement in alternative educational settings] who does not have the right to an appeal [. . .] shall have the right to bring a civil action." Id. at § 1415(i)(2)(A). The IDEA further requires the exhaustion of all administrative remedies on all claims prior to filing a civil action.⁴ Id. at § 1415(l). An aggrieved party "shall have 90 days from the date of the decision of the hearing officer to bring [a civil action], or, if the State has an explicit time limitation for bringing such action [...], in such time as the State law allows." 20 U.S.C. § 1415(i)(2)(B). "The district courts of the United States shall have jurisdiction of actions brought under [the IDEA] without regard to the amount incontroversy." 20 U.S.C. § 1415(i)(3). (ECF No. 9 at 4.)

The Court finds that Count I of the complaint is properly asserted under IDEA, which "specifically requires implementation of a Student's IEP in order to provide a FAPE." Id. at § 1401(9)(D). (ECF No. 9 at 5.) The IDEA creates an enforceable right for FAPE and that denial of FAPE falls squarely within the purview of the IDEA. 20 U.S.C. § 1414. However, Defendant alleges that Plaintiffs' claims are time-barred under the IDEA's statute of limitations for bringing a civil action, 20 U.S.C. § 1415(i)(2)(B). (ECF No. 7 at 10-11.) Defendant asserts that Plaintiffs waited 127 days from the last CDE report before filing this action and 94 days from the last CDE correspondence...