Community Country Day School, et al v. Erie School District

Filing

NOT PRECEDENTIAL OPINION Coram: FISHER, HARDIMAN and ROTH, Circuit Judges. Total Pages: 7. Judge: ROTH Authoring.

Case: 14-3608

Document: 003112000963

Page: 1

Date Filed: 06/25/2015

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 14-3608
________________
COMMUNITY COUNTRY DAY SCHOOL, A Pennsylvania Non-Profit Corporation;
FANANDA CLINTON, Parent and Natural Guardian of D.C.;
JUANITA CORREA, Parent and Natural Guardian of S.C and A. M.,
Appellants
v.
ERIE SCHOOL DISTRICT
________________
Appeal from the United States District Court
for the Western District of Pennsylvania
(D. C. No.1-14-cv-00019)
District Judge: Honorable J. Frederick Motz
________________
Submitted under Third Circuit LAR 34.1(a)
on April 30, 2015
Before: FISHER, HARDIMAN and ROTH, Circuit Judges
(Filed: June 25, 2015)
________________
OPINION*
________________
ROTH, Circuit Judge

*

This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

Case: 14-3608

Document: 003112000963

Page: 2

Date Filed: 06/25/2015

Community Country Day School (CCDS), Fananda Clinton, and Juanita Correa,
appeal the District Court’s dismissal of their complaint alleging that the Erie School
District refused to pay the tuition costs of CCDS students in violation of the Medicaid
Act’s freedom-of-choice provision,1 and the Due Process Clause of the Constitution. The
District Court dismissed the complaint for lack of standing and failure to state a claim.
The District Court also denied leave to amend the complaint. We will affirm for the
reasons stated in the Magistrate Judge’s well-crafted opinion.
I.2
Clinton and Correa are parents and natural guardians of children enrolled at
CCDS, a private school providing educational and medical services for children with
moderate to severe mental and emotional disorders. CCDS provides medical services
through its partial hospitalization program, which is federally subsidized under the
Medicaid Act. The medical services are integrated into CCDS’ academic program
throughout the school day.
Pursuant to a settlement agreement, the School District paid CCDS to educate
Medicaid-eligible students receiving partial hospitalization services at CCDS from 2003
to 2007. The District voluntarily extended the payments, albeit in lesser amounts,
through 2011, but discontinued all payments thereafter. Despite CCDS’ repeated

1

42 U.S.C. § 1396a(a)(23).
Because the District Court dismissed Appellants’ claims pursuant to Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(6), we accept as true all well-pleaded allegations and
construe the complaint in the light most favorable to the non-moving party. See Lewis v.
Atlas Van Lines, Inc., 542 F.3d 403, 405 (3d Cir. 2008).
2

2

Case: 14-3608

Document: 003112000963

Page: 3

Date Filed: 06/25/2015

requests for tuition subsidies, the School District refused to pay on the basis that it did not
refer or place any of the students in CCDS.
On January 23, 2014, CCDS filed a suit in “its representative capacity” on behalf
of students who were enrolled at CCDS by their parents and/or guardians for the purpose
of receiving medical services in CCDS’ Partial Hospitalization Program. CCDS alleged
that the School District’s refusal to reimburse CCDS for the educational services
provided by CCDS to its students violated (1) the parents’ right to choose CCDS as a
partial hospitalization provider under the Medicaid Act’s freedom-of-choice provision,
and (2) CCDS students’ right to free public education. The District moved to dismiss the
complaint for failure to state a claim because Appellants had not alleged a violation of
any right guaranteed by the Constitution or laws of the United States enforceable under
§ 1983. The Magistrate Judge filed a Report and Recommendation, recommending
dismissal of Appellants’ federal claims for lack of standing and failure to state a claim.
Appellants filed objections to the R&R along with a motion to amend the complaint,
seeking to add a cause of action under the Due Process Clause for discontinuing tuition
payments without a hearing. The District Court dismissed the federal claims, declined to
exercise supplemental jurisdiction over the state law claim, and denied leave to amend
the complaint. This appeal followed.

3

Case: 14-3608

Document: 003112000963

Page: 4

Date Filed: 06/25/2015

II.3
A.
“Absent Article III standing, a federal court does not have subject matter
jurisdiction to address a plaintiff’s claims, and they must be dismissed.”4 The Supreme
Court has established that “the irreducible constitutional minimum of standing contains
three elements[,]” injury in fact, causation and redressability.5 The party invoking federal
jurisdiction bears the burden of proving standing.6
As to the alleged violation of the Medicaid Act’s freedom-of-choice provision, we
agree with the Magistrate Judge that the parents and CCDS lack standing to pursue the
claim. Clinton and Correa allege that the School District “violated the[ir] civil rights . . .
by requiring them to waive their right under law to choose the provider of Medicaid
partial hospitalization services . . . as a condition of receiving from the Erie School
District an education legally required to be paid by it.” But, according to the complaint,
Clinton and Correa did choose CCDS as their children’s partial hospitalization services

3

The District Court had subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and
1367. We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review
over a district court’s jurisdictional determinations and grant of a motion to dismiss for
failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). See Reilly v.
Ceridian Corp., 664 F.3d 38, 41 (3d Cir. 2011). We review the denial of a motion for
leave to amend the complaint for abuse of discretion. See Hudson United Bank v.
LiTenda Mortg. Corp., 142 F.3d 151, 160 (3d Cir. 1998).
4
Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006).
5
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
6
Id. at 561
4

Case: 14-3608

Document: 003112000963

Page: 5

Date Filed: 06/25/2015

provider.7 Significantly, the parents do not allege that their children were turned away
from CCDS or that they are contemplating withdrawing their children from CCDS in
favor of free public education. Nor do they allege that their decision to choose CCDS
burdens them financially. Because Clinton and Correa successfully exercised their right
to choose CCDS as a provider of partial hospitalization medical services, they have not
alleged an injury in fact.
The parents’ lack of standing is fatal to CCDS’ representational standing.8
Moreover, CCDS cannot assert third party standing relative to the parents’ claim under
the Medicaid Act because it has not shown that the third parties face obstacles that
prevent them from pursuing their claims.9
Even if Appellants were to have standing, their Medicaid Act claim would fail on
the merits for the reasons stated in the Magistrate Judge’s opinion.10

See J.A. 89-90, 95; see also J.A. 94 (“Each plaintiff Parent and each parent and
guardian of the Represented Students has chosen CCDS to provide partial hospitalization
medical services for his or her Student or Represented Students.”).
8
See Natural Res. Def. Council, Inc. v. Texaco Ref. & Mktg., Inc., 2 F.3d 493, 504-05 (3d
Cir. 1993) (holding that representational standing is established when 1) the members
would have individual standing to sue; 2) the interests the organization seeks to protect
are related to its goals; and 3) the claims do not require individual participation by the
members).
9
See Taliaferro, 458 F.3d at 189 n.4 (noting that a litigant may bring a case on behalf of
a third party when: (1) the litigant has suffered an injury in fact, giving him a sufficiently
concrete interest in the outcome of the issue; (2) the litigant has a close relation to the
third party; and (3) there exists some hindrance to the third party’s ability to protect his
own interest).
10
We also agree with the Magistrate Judge that Appellants cannot assert an IDEA claim
because they failed to exhaust their administrative remedies.
7

5

Case: 14-3608

Document: 003112000963

Page: 6

Date Filed: 06/25/2015

B.
Appellants also challenge the District Court’s denial of their motion for leave to
file an amended complaint adding a Due Process claim.
Federal Rule of Civil Procedure 15(a) provides that a party may amend a pleading
once as a matter of course before a responsive pleading is served. Because a Rule 12(b)
motion to dismiss is not considered a responsive pleading, Appellants were entitled to
amend their complaint once as a matter of course without leave of the District Court.11
Nevertheless, we need not address whether the District Court erred in denying
Appellants’ motion for leave to amend because the amended complaint fails to state a
claim. No federal law requires the School District to subsidize private education
provided in conjunction with a medical program at CCDS.12 Because Appellants have
not pled deprivation of a property right, they do not have a cognizable § 1983 claim
based on the Fourteenth Amendment.13 To the extent CCDS argues that it has a property
right to tuition reimbursement based on the School District’s past payments pursuant to
11

See Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000).
See 55 Pa. Code § 5210.37 (“The education program may be provided at the same site
as the partial hospitalization program, but is considered a separate, though
complimentary, program and shall not be included as part of the partial hospitalization
program for reimbursement purposes.”); accord 20 U.S.C. § 1412(a)(10)(C)(I) (“This
[IDEA] subchapter does not require a local educational agency to pay for the cost of
education . . . of a child with a disability at a private school or facility if that agency made
a free appropriate public education available to the child and the parents elected to place
the child in such private school or facility.”). See Wise v. Ohio Dep’t of Educ., 80 F.3d
177, 185 (6th Cir. 1996) (“[T]he parents were not entitled unilaterally to place their child
in the facility of their choice and expect that their children would receive a free public
education. Whatever its virtue as social policy, IDEA only requires states to provide
children with disabilities an appropriate education, not the very best possible special
education services.”).
13
See Chambers v. Sch. Dist. of Phila. Bd. of Educ., 587 F.3d 176, 194 (3d Cir. 2009).
12

6

Case: 14-3608

Document: 003112000963

Page: 7

Date Filed: 06/25/2015

an expired settlement agreement, we disagree. Even if the District’s failure to continue
payments constitutes a breach of the settlement agreement, it does not implicate the
Fourteenth Amendment.
We will not consider CCDS’ claim, raised for the first time on appeal, that the
District violated the Equal Protection Clause by paying for the public education of
students at Sarah Reed while refusing to pay for the education of similarly situated
students at CCDS.14
III.
For the foregoing reasons, we will affirm the judgment of the District Court.

See Smith v. Comm’r of Soc. Sec., 631 F.3d 632, 637 (3d Cir. 2010) (“This court has
consistently held that it will not consider issues that are raised for the first time on
appeal.” (quoting Harris v. City of Phila., 35 F.3d 840, 845 (3d Cir. 1994)).
14

7