I. v. Department of Education
Filing
94
ORDER DENYING (1) DEFENDANT'S MOTION FOR A PRELIMINARY INJUNCTION AND (2) DENYING AS MOOT PLAINTIFF'S MOTION FOR AN ORDER TO SHOW CAUSE WHY DEFENDANT SHOULD NOT BE HELD IN CONTEMPT, DIRECTING THAT A GARNISHEE SUMMONS ISSUE, AND IMPOSING SAN CTIONS re 77 ; 83 ; 93 - - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 8/24/12. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
MARCUS I., by and through his )
parent and next best friend, )
KAREN I.,
)
)
Plaintiff,
)
)
vs.
)
)
)
DEPARTMENT OF EDUCATION,
State of Hawaii,
)
)
)
Defendant.
_____________________________ )
CIVIL NO. 10-00381 SOM/BMK
ORDER DENYING (1) DEFENDANT’S
MOTION FOR A PRELIMINARY
INJUNCTION AND (2) DENYING AS
MOOT PLAINTIFF’S MOTION FOR
AN ORDER TO SHOW CAUSE WHY
DEFENDANT SHOULD NOT BE HELD
IN CONTEMPT, DIRECTING THAT A
GARNISHEE SUMMONS ISSUE, AND
IMPOSING SANCTIONS
ORDER (1) DENYING DEFENDANT’S MOTION FOR A PRELIMINARY
INJUNCTION AND (2) DENYING AS MOOT PLAINTIFF’S MOTION FOR AN
ORDER TO SHOW CAUSE WHY DEFENDANT SHOULD NOT BE HELD IN CONTEMPT,
DIRECTING THAT A GARNISHEE SUMMONS ISSUE, AND IMPOSING SANCTIONS
I.
INTRODUCTION.
On April 12, 2012, this court granted Plaintiff Marcus
I.’s motion seeking a stay-put order authorizing Marcus to stay
at his current private school, Loveland Academy, and requiring
Defendant Department of Education (“DOE”) to pay that expense
through completion of the present litigation.
Marcus is an
autistic child receiving services from the State of Hawaii under
the Individuals with Disabilities Education Act (“IDEA”).
The
DOE’s appeal of the stay-put order is now pending before the
Ninth Circuit.
Two motions are now before the court.
The first is the
DOE’s motion seeking a stay of this court’s stay-put order
pending disposition of its appeal.
The DOE styles this as a
preliminary injunction motion, although there is nothing
“preliminary” about it.
The court DENIES that motion.
The
second is Marcus’s motion asking this court to hold the State of
Hawaii and/or the Superintendent of the DOE, Kathryn Matayoshi,
in civil contempt, or, in the alternative, to issue a garnishee
summons to First Hawaiian Bank, which allegedly holds funds for
the DOE and the State of Hawaii, for the amount of money owed to
Loveland for Marcus’s tuition (“contempt motion”).
Because the
DOE has recently paid Loveland’s bills, Marcus’s contempt motion
is DENIED as moot.
II.
BACKGROUND.
The court incorporates and adopts as its findings of
fact the extensive factual background laid out in its Order
Partially Vacating and Remanding the Hearings Officer’s June 9,
2010, Decision, ECF No. 34, and its Order Granting Plaintiff’s
Motion for Stay-Put, April 12, 2012, ECF No. 68.
For the
convenience of the parties, the court here summarizes the
procedural background relevant to the present motions.
On May 25, 2012, Marcus filed the contempt motion now
before the court, arguing that the DOE was continuing its refusal
to comply with this court’s stay-put order relating to Marcus’s
placement at Loveland.
On May 29, 2012, the DOE filed the
preliminary injunction motion now before the court, seeking to
stay enforcement of the stay-put order.
2
On June 14, 2012, this court held a hearing on Marcus’s
original contempt motion, which the court found unclear.
At that
hearing, the court instructed Marcus to file a supplemental
memorandum stating exactly what contempt sanctions he was seeking
and against whom they should issue, and to include law
establishing that this court could impose such sanctions.
No. 84.
The court invited the DOE to respond.
Id.
ECF
The court
also continued the hearing on the contempt motion until August
21, 2012, when it would be hearing argument on the preliminary
injunction motion.
Both parties filed supplemental memoranda.
On August 15, 2012, less than one week before the
continued hearing on the contempt and preliminary injunction
motions, the DOE filed another supplemental memorandum stating
that, on July 31, 2012, it had paid all of the outstanding bills
for Loveland.
At the continued hearing on the contempt motion,
Marcus agreed that the DOE had substantially paid the money owed
to Loveland for Marcus’s tuition through June 2012.
III.
ANALYSIS.
A.
Preliminary Injunction Motion.
The DOE seeks a stay of this court’s stay-put order.
The DOE proceeds under Rule 65 of the Federal Rules of Procedure
and seeks what it calls a “preliminary injunction,” an unusual
type of order for a case already on appeal.
There is, after all,
nothing for this court to preliminarily enjoin.
3
“The purpose of
a preliminary injunction is merely to preserve the relative
positions of the parties until a trial on the merits can be
held.”
Univ. of Texas v. Camenisch, 541 U.S. 390, 395 (1981).
This court has already ruled on the merits of this case.
Marcus
initiated this action as an appeal from a decision by an
administrative hearings officer.
This court ruled on the merits
of that appeal on May 9, 2011, vacating and remanding parts of
the hearings officer’s decision.
A Rule 65 preliminary
injunction is inappropriate under the present circumstances.
In the alternative, the DOE requests that this court
stay its stay-put order upon its posting of a supersedeas bond
pursuant to Rule 62(d) of the Federal Rules of Civil Procedure.
The DOE does not establish that Rule 62(d) applies to the court’s
stay-put order.
Under Rule 62(d), a party is generally entitled
to a stay upon the filing of a supersedeas bond as a matter of
right.1
See American Civil Liberties Union of Nevada v. Mastro,
670 F.3d 1046, 1066 (9th Cir. 2012).
However, Rule 62(d)
excludes an “action described in Rule 62(a)(1) or (2).”
Rule
62(a) describes orders that are not automatically stayed after
being entered, including “an interlocutory or final judgment in
1
Rule
may obtain a
described in
after filing
allowing the
approves the
62(d) states: “If an appeal is taken, the appellant
stay by supersedeas bond, except in an action
Rule 62(a)(1) or (2). The bond may be given upon or
the notice of appeal or after obtaining the order
appeal. The stay takes effect when the court
bond.”
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an action for an injunction or a receivership.”2
62(a)(1).
Fed. R. Civ. P.
If this court’s stay-put order is an order enjoining
the DOE from ceasing payments to Loveland on behalf of Marcus,
then Rule 62(d) is inapplicable.
In NLRB v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988)
(per curiam), the Ninth Circuit affirmed a district court’s
denial of a Rule 62(d) motion to stay an order enforcing
subpoenas.
The Ninth Circuit stated that it found persuasive the
Seventh Circuit’s reasoning that Rule 62(d) applies only to money
judgments.
Id. (citing Donovan v. Fall River Foundry Co., 696
F.2d 524 (7th Cir. 1982)).
See also In re Capital West
Investors, 180 B.R. 240, 245 (N.D. Cal. 1995) (denying a Rule
62(d) motion to stay a bankruptcy court order confirming a
debtor’s reorganization plan “[b]ecause the stay of right under
2
Rule 62(a) states in its entirety:
Automatic Stay; Exceptions for Injunctions,
Receiverships, and Patent Accountings. Except
as stated in this rule, no execution may
issue on a judgment, nor may proceedings be
taken to enforce it, until 14 days have
passed after its entry. But unless the court
orders otherwise, the following are not
stayed after being entered, even if an appeal
is taken:
(1) an interlocutory or final judgment in an
action for an injunction or a receivership;
or
(2) a judgment or order that directs an
accounting in an action for patent
infringement.
5
Rule 62(d) has been limited to an appeal from a money judgment or
its equivalent . . . and because an order of confirmation is not
a money judgment or the like”).
Although this court’s stay-put order requires the DOE
to pay money, it is not a money judgment.
Rather, the Ninth
Circuit has repeatedly referred to stay-put orders as “automatic
injunctions.”
See, e.g., N.D. v. Haw. Dept. of Educ., 600 F.3d
1104, 1111 (9th Cir. 2010); Joshua A. v. Rocklin Unified Sch.
Dist., 559 F.3d 1036, 1037 (9th Cir. 2009); Doe v. Maher, 793
F.2d 1470, 1486 (9th Cir. 1986).
This court thus treats its
stay-put order as an injunction and concludes that it falls
within the exceptions to Rule 62(d).
Even if this court’s stay-put order is not in the
nature of an injunctive relief order covered by Rule 62(a)(1), it
still fails to fall within Rule 62(d).
That is because the DOE
wants to post a bond to stay payments to a nonparty.
The whole
theory behind a supersedeas bond is that a prevailing party may
recover on a judgment through the bond if, at the end of
appellate proceedings, the losing party cannot itself satisfy the
judgment.
What the DOE seeks, however, concerns payments to
Loveland, a nonparty, who would have no security if the DOE
posted a bond in favor of Marcus and his parents!
In the past,
the DOE has apparently greatly delayed payments to Loveland,
which, to Marcus’s benefit, has not immediately suspended
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services to Marcus.
In such circumstances, the court questions
whether a bond would guarantee eventual payment to a nonparty
like Loveland.
Moreover, it is unclear how much money the DOE would be
required to bond.
The DOE has already paid amounts owed to
Loveland to date, and it is unclear how much it will have to pay
going forward.
There has been no indication as to when the Ninth
Circuit will rule on the DOE’s appeal.
The DOE is not entitled
to a stay of this court’s stay-put order under Rule 62(d).
The court notes that, at the hearing on the DOE’s
preliminary injunction motion, the DOE’s attorney committed to
paying Loveland’s future bills, thus indicating that the DOE does
have the funds to do so.
Finally, although it was not properly briefed, the DOE
appears to also be relying on Rule 62(c) in seeking a stay.
The
DOE’s motion states that it is brought under 62(c), but the
memorandum supporting the motion does not address Rule 62(c).
The DOE, in any event, is not entitled to a stay under Rule
62(c).
Generally, once an appeal has been filed, a “district
court is divested of jurisdiction over the matters being
appealed.”
Natural Resources Defense Council, Inc. v. Sw. Marine
Inc., 242 F.3d 1163, 1166 (9th Cir. 2001) (citing Griggs v.
Provident Consumer Discount Co., 459 U.S. 56, 58 (1982) (per
7
curiam), and McClatchy Newspapers v. Central Valley Typographical
Union No. 46, 686 F.2d 731, 734 (9th Cir. 1982)).
62(c) contains an exception to that rule.
However, Rule
Under Rule 62(c) a
court may “suspend, modify, restore, or grant an injunction on
terms for bond or other terms that secure the opposing party’s
rights.”
The Ninth Circuit has explained that Rule 62(c) “grants
the district court no broader power than it has always inherently
possessed to preserve the status quo during the pendency of an
appeal; it ‘does not restore jurisdiction to the district court
to adjudicate anew the merits of the case.’”
National Resources
Defense Council, 242 F.3d at 1166 (quoting McClatchy Newspapers,
686 F.2d at 734).
“[A]ny action taken pursuant to Rule 62(c)
‘may not materially alter the status of the case on appeal.’”
Id. (quoting Allan Ides, The Authority of a Federal District
Court to Proceed After a Notice of Appeal Has Been Filed, 143
F.R.D. 307, 322 (1992)).
Under Rule 65(c), this court “only
‘retains jurisdiction during the pendency of an appeal to act to
preserve the status quo.’”
Small v. Operative Plasterers’ and
Cement Masons’ Int’l Assoc. Local 200, 611 F.3d 483, 495 (9th
Cir. 2010) (quoting Natural Resources Defense Council, 242 F.3d
at 1166).
The stay requested by the DOE does not seek to preserve
the status quo.
Marcus is currently attending Loveland at the
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DOE’s expense pursuant to this court’s stay-put order.
His
future tuition will not be paid by the DOE if this court grants
the stay requested by the DOE.
A stay of the stay-put order
would have the same effect as a ruling by this court that Marcus
is not entitled to stay-put.
A stay may make it impossible for
Marcus to continue attending Loveland, if his parents are unable
to make the payments.
Although the court acknowledges that
staying its order would not affect the issues on appeal, the
requested stay would change, not preserve, the status quo as far
as the parties are concerned.
This court lacks jurisdiction to
change the status quo.
Not does the DOE show that a stay is warranted.
“There
is substantial overlap between [the factors governing stays] and
the factors governing preliminary injunctions.”
Nken v. Holder,
556 U.S. 418, 434 (2009) (citing Winter v. Natural Resources
Defense Council, Inc., 555 U.S. 7 (2008)).
See also Miller v.
Carlson, 768 F. Supp. 1341, 1342 (N.D. Cal. 1991) (“[The]
standard for evaluating the desirability of a stay pending appeal
is quite similar to that which the Court employ[s] in deciding to
grant [a] preliminary injunction.” (citing Lopez v. Heckler, 713
F. 2d 1432, 1435 (9th Cir. 1983))).
In deciding whether a stay is appropriate, the court
looks to four factors: “(1) whether the stay applicant has made a
strong showing that he is likely to succeed on the merits; (2)
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whether the applicant will be irreparably injured absent a stay;
(3) whether issuance of the stay will substantially injure the
other parties interested in the proceeding; and (4) where the
public interest lies.”
Nken, 556 U.S. at 434 (quoting Hilton v.
Braunskill, 481 U.S. 770, 776 (1987)).
See also Perry v.
Schwarzenegger, 702 F. Supp. 2d 1132, 1135 (N.D. Cal. 2010).
“A stay is not a matter of right, even if irreparable
injury might otherwise result.”
Nken, at 433 (quoting Virginian
Ry. Co. v. United States, 272 U.S. 658, 672 (1926)).
“The party
requesting a stay bears the burden of showing that the
circumstances justify an exercise of that discretion.”
Id. at
433-34 (citing Clinton v. Jones, 520 U.S. 681, 708 (1997), and
Landis v. North American Co., 299 U.S. 248, 255 (1936)).
The DOE
does not carry its burden.
With respect to the likelihood of success on the
merits, this court has already expressed its opinion in its stayput order.
The Ninth Circuit expressly stated that Marcus is
entitled to stay put at Loveland Academy.
Although the DOE has a
point in arguing that the stay-put issue before this court was
not fully litigated before the Ninth Circuit, this court cannot
ignore the Ninth Circuit’s express statement.
With respect to irreparable harm, the DOE argues that
it will suffer irreparable harm by paying Marcus’s tuition
because it contends that it will be unable to recoup those funds
10
even if it prevails on the merits of its appeal.
This court
rejected a similar argument made by the DOE in denying the DOE’s
preliminary injunction motion in Dep’t of Educ., Haw. v. C.B.,
Civ. No. 11-00576 SOM/RLP.
See Order Denying Plaintiff’s Motion
for a Preliminary Injunction, Civ. No. 11-00576 SOM/RLP, 2012 WL
220517 (D. Haw. Jan. 24, 2012).
The court adopts that rationale
here.
With respect to injury to other parties, the DOE’s
requested injunction may well harm Marcus severely.
The Ninth
Circuit has stated that Congress recognized a “heightened risk of
irreparable harm inherent in the premature removal of a disabled
child to a potentially inappropriate educational setting.”
Joshua A., 559 F.3d at 1040.
With respect to the public interest, the court notes
that this case involves competing interests that were also in
issue in C.B.
As it contended in C.B., the DOE here argues that
an injunction is in the public interest because “the public does
not benefit in having its taxpayer dollars spent frivolously on
unilateral private placements, especially those placements that
are not . . . current educational placements.”
Preliminary Injunction at 8-9, ECF No. 77-1.
Def.’s Mot. for
However, the public
interest is also served by the orderly enforcement of
court orders, particularly stay-put orders, which function as
automatic injunctions.
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Of utmost concern to the court is the recognition that
staying the stay-put order would contravene the purpose of the
stay-put statute.
“The purpose of the stay put provision is to
maintain the status quo and to prevent school districts from
unilaterally denying placement to a student while a dispute over
the placement is being resolved.”
Joshua A. ex rel. Jorge A. v.
Rocklin Unified School Dist., 2007 WL 2389868, at *2 (E.D. Cal.
Aug. 20, 2007) (citing Honig v. Doe, 484 U.S. 305, 326 (1998),
and Van Scoy v. San Luis Coastal Unified Sch. Dist., 353 F. Supp.
2d 1083, 1086 (C.D. Cal. 2005)).
Forcing Marcus to leave
Loveland for nonpayment of tuition is the very result the stayput provision is designed to prevent.
Taking into consideration the unique facts and
background of this case, the court denies the DOE’s request that
it stay enforcement of its stay-put order.
B.
Contempt Motion.
Marcus’s contempt motion is DENIED as moot.
The
purpose of holding a party in civil contempt is to coerce
compliance with a court order.
There is no action to be coerced
in the present case because, as Marcus concedes, the DOE has
substantially paid the outstanding dues owed to Loveland for
Marcus’s tuition.
Marcus may have a good argument that sanctions
should issue under the court’s inherent power or under 28 U.S.C.
§ 1927.
However, the DOE was not on notice that Marcus was
12
proceeding on those grounds.
Nor is Marcus’s request for
sanctions in the form of attorney’s fees supported by the detail
required under Local Rule 54.3.
IV.
CONCLUSION.
The DOE’s preliminary injunction motion and Marcus I.’s
contempt motion are DENIED.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, August 24, 2012.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Marcus I. v. Department of Education; Civil No. 10-00381 SOM/BMK; ORDER (1) DENYING
DEFENDANT’S MOTION FOR A PRELIMINARY INJUNCTION AND (2) DENYING AS MOOT PLAINTIFF’S
MOTION FOR AN ORDER TO SHOW CAUSE WHY DEFENDANT SHOULD NOT BE HELD IN CONTEMPT,
DIRECTING THAT A GARNISHEE SUMMONS ISSUE, AND IMPOSING SANCTIONS
13
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