R. et al v. Matayoshi et al

Filing 54

ORDER REJECTING THE 51 MAGISTRATE JUDGE'S AMENDED FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFFS' MOTION FOR AWARD OF ATTORNEY'S FEES AND COSTS: "On the basis of the foregoing, the magistrate judge&# 039;s Amended Findings and Recommendation to Grant in Part and Deny in Part Plaintiffs' Motion for Award of Attorneys Fees and Costs, filed December 29, 2012, are HEREBY REJECTED. Plaintiffs' Motion for Award of Attorneys and Costs, filed S eptember 5, 2011, is HEREBY DENIED. IT IS SO ORDERED.". Signed by District JUDGE LESLIE E. KOBAYASHI on February 23, 2012. (bbb, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifica tions 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
JUSTIN R., by and through his )
mother JENNIFER R.,
)
)
)
Plaintiffs,
)
vs.
)
)
KATHRYN MATAYOSHI, in her
)
)
official capacity as
Superintendent of the Hawai’i )
)
Public Schools; and
)
DEPARTMENT OF EDUCATION,
)
STATE OF HAWAII,
)
)
Defendants.
_____________________________ )

CIVIL NO. 10-00657 LEK-RLP

ORDER REJECTING THE MAGISTRATE JUDGE’S AMENDED FINDINGS
AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART
PLAINTIFFS’ MOTION FOR AWARD OF ATTORNEY’S FEES AND COSTS
On December 29, 2011, the magistrate judge filed his
Amended Findings and Recommendation to Grant in Part and Deny in
Part Plaintiffs’ Motion for Award of Attorney’s Fees and Costs
(“Amended F&R”).

Defendants Kathryn Matayoshi, in her official

capacity as Superintendent of the Hawaii Public Schools, and the
Department of Education, State of Hawai`i (“the DOE”, both
collectively “Defendants”) filed their objections to the Amended
F&R (“Amended Objections”) on January 12, 2012.

Plaintiffs

Justin R. (“Student”), by and through his mother, Jennifer R.
(collectively “Plaintiffs”), filed their response to the
Objections (“Amended Response”) on January 26, 2012.

The Court

finds this matter suitable for disposition without a hearing

pursuant to Rule LR7.2(d) of the Local Rules of Practice of the
United States District Court for the District of Hawai`i (“Local
Rules”).

After careful consideration of the Amended Objections,

Amended Response, and the relevant legal authority, the Court
HEREBY REJECTS the Amended F&R for the reasons set forth below.
BACKGROUND
The parties and the Court are familiar with the factual
and legal history of this case, and the Court will only discuss
the events that are relevant to the review of the Amended F&R.
In the instant action, Plaintiffs challenge the
administrative hearings officer’s (“Hearings Officer”) Findings
of Fact, Conclusions of Law and Decision (“Decision”), filed on
October 11, 2010.

The Hearings Officer concluded that he lacked

subject matter jurisdiction over Plaintiffs’ request for
impartial hearing (“2009-2010 Request for Impartial Hearing”)
because Plaintiffs were merely trying to enforce the provisions
of a prior settlement agreement with the DOE (“2010 Settlement
Agreement”) and were not challenging the identification,
evaluation or educational placement of Student or the provision
of a free and appropriate public education (“FAPE”).

Justin R.

v. Matayoshi, Civil No. 10-00657 LEK-RLP, 2011 WL 2470624, at *5
(D. Hawai`i June 17, 2011).
On June 17, 2011, this Court issued its Order Affirming
in Part and Reversing in Party the Hearings Officer’s October 11,

2

2010 Decision (“Remand Order”), affirming the Decision to the
extent that it dismissed the portion of Plaintiffs’ 2009-2010
Request for Impartial Hearing seeking to enforce the 2010
Settlement Agreement.

Id. at *15.

The Court also reversed the

Decision to the extent that it dismissed: 1) the portion of
Plaintiffs’ 2009-2010 Request for Impartial Hearing alleging that
Student’s March 3, 2009 individualized educational program
(“IEP”) and October 28, 2009 IEP did not provide a FAPE; and 2)
the portion of the 2009-2010 Request for Impartial Hearing
challenging the failure to review Student’s math and reading
goals.

Id.

The Court urged that, on remand, “the [Department of

Commerce and Consumer Affairs (“DCCA”)] expedite this matter to
the fullest extent possible because Student has either graduated
or will graduate at the end of the 2010-2011 extended school
year.”

Id.
Before the district court returned the record to the

DCCA for the remand, however, the magistrate judge held a
settlement conference on July 6, 2011.

The minutes of the

settlement conference state, inter alia: “Case is settled.
Counsel shall file within 30 days a stipulation of settlement to
have the Court determine reasonable attorneys fees if any,
recoverable by Plaintiff.”

[Dkt. no. 34.]

On July 18, 2011, the

magistrate judge approved and filed a Stipulation for Retention
of Jurisdiction on the Issue of Attorney’s Fees and Costs and

3

Order (“Stipulation and Order”).

[Dkt. no. 36.]

It states, in

its entirety:
WHEREAS, a verbal settlement was reached by
the parties at the settlement conference held in
this matter with the Honorable Richard L. Puglisi
on July 6, 2011;
WHEREAS, the settlement does not include
Plaintiffs’ claim for an award of their reasonable
attorney’s fees and costs;
NOW, THEREFORE, IT IS HEREBY STIPULATED AND
AGREED by and between the parties hereto, through
their respective undersigned attorneys, and with
the approval of the Court, that the Court shall
retain jurisdiction to determine the issue of
Plaintiffs’ entitlement to reasonable attorney’s
fees and costs, if any.
[Id. at 2.]

The parties did not put the terms of the settlement

on the record or submit a stipulation for the dismissal of
Plaintiffs’ claims, and the district court did not enter a
judgment.
On September 5, 2011, Plaintiffs filed their Motion for
Award of Attorney’s and Costs (“Fee Motion”).1

On November 18,

2011, after briefing by the parties, the magistrate judge filed
his Findings and Recommendation to Grant in Part and Deny in Part
Plaintiffs’ Motion for Award of Attorney’s Fees and Costs
(“F&R”).

The magistrate judge found that Plaintiffs are the

prevailing party for purposes of the Individuals with
Disabilities Education Act of 2004 (“IDEA”) based on the parties’

1

Neither the parties nor the district court filed any
documents in this case between the Stipulation and Order and the
Fee Motion.
4

agreement to settle the instant action (“the CV 10-00657
Settlement Agreement”) and concluded that they are entitled to
reasonable attorneys’ fees and costs pursuant to 20 U.S.C. §
1415(i)(3)(B).

[F&R at 5-7.]

The magistrate judge recommended

an award of $51,790.55 in attorneys’ fees and $865.09 in costs,
but allowed the parties to submit supplemental briefing regarding
Plaintiffs’ request for additional fees and costs beyond the time
period Plaintiffs addressed in the Fee Motion.

[Id. at 19-20.]

Defendants filed objections to the F&R on December 2, 2011
(“Objections”), and Plaintiffs filed a response to the Objections
on December 12, 2011 (“Response”).
The magistrate judge issued the Amended F&R after the
parties filed their supplemental briefs.

The Amended F&R

includes the same prevailing party analysis, [Amended F&R at 68,] but the magistrate judge increased the recommended award to
$56,460.62 in attorneys’ fees and $865.09 in costs [id. at 2324].
I.

Defendants’ Amended Objections
In their Amended Objections, Defendants incorporate by

reference the factual and legal arguments in their Objections and
their December 12, 2011 response to Plaintiffs’ supplemental fee
request, which Plaintiffs filed on November 28, 2011.
Objections at 2.]

[Amended

Defendants argue that the CV 10-00657

Settlement Agreement does not render Plaintiffs the prevailing

5

party for purposes of an award of attorneys’ fees and costs.
Defendants acknowledge that their obligations under the CV 1000657 Settlement Agreement constitute a material alteration in
the parties’ relationship.

[Id. at 11.]

Defendants, however,

argue that the CV 10-00657 Settlement Agreement does not render
Plaintiffs the prevailing party because it lacks a sufficient
judicial imprimatur on the alteration of the parties’
relationship.

Further, Defendants argue that, if the Court is

inclined to award attorneys’ fees and costs to Plaintiffs, the
recommended attorneys’ fee award in the Amended F&R is excessive.
Defendants state that they have the same objections to
Plaintiffs’ original fee request that they raised in the
Objections, and they argue that the amount of the supplemental
attorneys’ fees that the magistrate judge recommended is
excessive because the magistrate judge did not apply a reduction
based on Plaintiffs’ limited success in the case.
II.

Plaintiffs’ Amended Response
In their Amended Response, Plaintiffs emphasize that a

judgment on the merits and a consent decree are not the only ways
that a party can obtain a sufficient judicial imprimatur on a
change in his relationship with the opposing party to warrant
prevailing party status for purposes of an award of attorneys’
fees and costs.

Plaintiffs argue that, pursuant to Ninth Circuit

case law, a district court can find a judicial imprimatur on a

6

legally enforceable settlement agreement where the parties
stipulate to the court’s continued jurisdiction over the issue of
attorneys’ fees.

Further, Plaintiffs argue that this Court

should grant the full award of attorneys’ fees and costs that the
magistrate judge recommended, and that this Court should not
apply any further reductions to Plaintiffs’ fee request.
STANDARD
Defendants timely filed the Amended Objections pursuant
to 28 U.S.C. § 636(b)(1) and Local Rule 74.2.

This Court must

undertake a de novo review of the portions of the Amended F&R to
which Defendants objected.

This Court “may accept, reject, or

modify, in whole or in part, the findings or recommendations made
by the magistrate judge.”

§ 636(b)(1).

A de novo review means

“the court must consider the matter anew, the same as if it had
not been heard before and as if no decision previously had been
rendered.”

U.S. Pac. Builders v. Mitsui Trust & Banking Co., 57

F. Supp. 2d 1018, 1025 (D. Haw. 1999) (citing Ness v.
Commissioner, 954 F.2d 1495, 1497 (9th Cir. 1992)).
DISCUSSION
The Amended F&R set forth the following summary of the
applicable law regarding the award of attorneys’ fees and costs
in IDEA cases:
Under IDEA a prevailing party is entitled to
seek attorney’s fees and costs. See 20 U.S.C. §
1415(i)(3)(B)(i)(I) (“the court, in its
discretion, may award reasonable attorneys’ fees
7

as part of the costs . . . to a prevailing party
who is the parent of a child with a disability.”).
Generally, parties are considered prevailing
parties if “they succeed on any significant issue
in litigation which achieves some of the benefit
the parties sought in bringing suit.” Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983) (quoting
Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.
1978)). “The success must materially alter the
parties’ legal relationship, cannot be de minimis
and must be causally linked to the litigation
brought.” Van Duyn v. Baker Sch. Dist. 5J, 502
F.3d 811, 825 (9th Cir. 2007) (citing Parents of
Student W. v. Puyallup Sch. Dist., No. 3, 31 F.3d
1489, 1498 (9th Cir. 1994); Park v. Anaheim Union
High Sch. Dist., 464 F.3d 1025, 1034-37 (9th Cir.
2006)). Additionally, the change in the parties’
legal relationship must be judicially sanctioned.
See P.N. v. Seattle Sch. Dist. No. 1, 474 F.3d
1165, 1171 (9th Cir. 2007) (citing Buckhannon Bd.
& Care Home, Inc. v. W. Va. Dep’t of Health &
Human Res., 532 U.S. 598 (2001)).
[Amended F&R at 6 (alteration in Amended F&R).]

This Court

agrees with the magistrate judge’s recitation of the applicable
law.
The Court’s review of Defendants’ objections begins
with an examination of the Stipulation and Order that the
magistrate judge approved.

“The power of federal magistrate

judges is limited by 28 U.S.C. § 636.”

Estate of Conners by

Meredith v. O’Connor, 6 F.3d 656, 658 (9th Cir. 1993) (citation
omitted).

To the extent that the Stipulation and Order purported

to determine the district court’s jurisdiction over this case,
the magistrate judge lacked the authority to enter the order.
Cf. PSC Indus. Outsourcing, LP v. Burlington Ins. Co., Civ. No.
10–00751 ACK–BMK, 2011 WL 1793333, at *3 (D. Hawai`i May 10,
8

2011) (“This Court treats a motion to remand as a dispositive
motion, requiring the issuance of a findings and recommendation
by the magistrate judge.” (citing Keown v. Tudor Ins. Co., 621 F.
Supp. 2d 1025, 1029 (D. Haw. 2008); Sylvester v. Menu Foods,
Inc., Civ. No. 07–00409 ACK–KSC, 2007 WL 4291024, at *2 (D. Haw.
Dec. 5, 2007)).

This Court, however, HEREBY construes the

Stipulation and Order as a findings and recommendation and ADOPTS
the Stipulation and Order.
Turning to the content of the Stipulation and Order,
although it notes in a recital paragraph that the parties reached
a verbal settlement, it does not dispose of any of Plaintiffs’
claims or direct the parties to submit a stipulation to dismiss
for court approval.

The only action taken in the document is the

parties’ agreement and the magistrate judge’s order to retain
jurisdiction over the issue of attorneys’ fees and costs.
Further, there is insufficient information in the Stipulation and
Order for this Court to independently approve the CV 10-00657
Settlement Agreement as resolving Plaintiffs’ claims.
“Typically, [t]he construction and enforcement of settlement
agreements are governed by principles of local law which apply to
interpretation of contracts generally.”

O’Neil v. Bunge Corp.,

365 F.3d 820, 822 (9th Cir. 2004) (alteration in original)
(citations and internal quotation marks omitted).

“Where the

evidence in the record shows that all the essential elements of a

9

contract are present, a compromise agreement among the parties in
litigation may be approved by the court and cannot be set aside
except on grounds that would justify rescission.”

Miller v.

Manuel, 9 Haw. App. 56, 63, 828 P.2d 286, 291 (Ct. App. 1991)
(citation omitted).

At the time the magistrate judge entered the

Stipulation and Order, there was no evidence in the record of the
terms of the CV 10-00657 Settlement Agreement,2 except that the
agreement did not include a determination whether Plaintiffs are
entitled to attorneys’ fees and costs.

Nor are there any

findings by the magistrate judge regarding the circumstances of
the CV 10-00657 Settlement Agreement.

This Court therefore

cannot find that all of the requisite elements of a contract are
present.
Thus, the Stipulation and Order does not dispose of any
of Plaintiffs’ claims on the merits; the parties never filed a
stipulation for dismissal; and the Court cannot, based on the
record prior to Plaintiffs’ Fee Motion, approve the CV 10-00657
Settlement Agreement.

Under these circumstances, this Court’s

2

The Court notes that Defendants submitted a copy of the
parties’ Compromise and Settlement Agreement as an exhibit with
their memorandum in opposition to the Fee Motion. [Filed 9/19/11
(dkt. no. 40-2).] The Court, however, declines to consider the
content of that exhibit for any purpose beyond that for which
Defendants presented it - the issue of whether Plaintiffs are the
prevailing party for purposes of an award of attorneys’ fees.
There is no indication that, by submitting the exhibit,
Defendants intended that this Court would consider the exhibit
for the purposes of approving the CV 10-00657 Settlement
Agreement and incorporating its terms into a court order.
10

June 17, 2011 Remand Order remains the only court order
addressing the disposition of Plaintiffs’ claims.

The Remand

Order remanded the case to the DCCA for a new hearings officer3
to rule upon the issues of the alleged denial of FAPE and the
failure to review Student’s math and readings goals.

Although

those issues are separable legal issues from the issue whether
the Hearings Officer had subject matter jurisdiction over the
portion of Plaintiffs’ 2009-2010 Request for Impartial Hearing
seeking enforcement of the 2010 Settlement Agreement, this
Court’s Remand Order was not a final and appealable order because
it does not force the DCCA to apply a potentially erroneous rule
which may result in a wasted proceeding, and the parties would
not be denied review if an immediate appeal of this Court’s
Remand Order were unavailable.

See Aliah K. ex rel. Loretta M.

v. Hawaii, Dep’t of Educ., 788 F. Supp. 2d 1176, 1190-91 (D.
Hawai`i 2011).

Under the Remand Order, this case would be

effectively stayed pending the resolution of the remand, and this
Court would consider the decision on remand and render a final
decision thereafter.

The judgment entered pursuant to that

decision would be final and appealable.

See id. at 1190.

Insofar as the remand to the DCCA would not divest this
district court of jurisdiction over the case, the Stipulation and

3

Since issuing the Decision, the Hearings Officer had left
the DCCA, requiring the DCCA to assign the case to a new hearings
officer on remand. Remand Order, 2011 WL 2470624, at *14.
11

Order, which merely states that the district court shall retain
jurisdiction over the issue of attorneys’ fees and costs, has no
effect.

Retaining jurisdiction over the issue of attorneys’ fees

and costs was unnecessary because this Court had not lost
jurisdiction over the case in the first instance.
The Amended F&R relies upon the Stipulation and Order
as providing the requisite judicial imprimatur on the CV 10-00657
Settlement Agreement to render Plaintiffs the prevailing party
for purposes of an award of attorneys’ fees and costs pursuant to
20 U.S.C. § 1415(i)(3)(B)(i)(I).

[Amended F&R at 6-8.]

The

Court HEREBY REJECTS the Amended F&R’s finding that Plaintiffs
are the prevailing party because the Stipulation and Order, which
has no effect, does not constitute a judicial sanction of the
change in the parties’ relationship.
Further, under the circumstances of this case where,
other than the Remand Order, there is no court order disposing of
Plaintiffs’ claims, the Court FINDS that there is no judicial
sanction of the change in the parties’ relationship.

The Court

also FINDS that Plaintiffs are not the prevailing party for
purposes of § 1415(i)(3)(B)(i)(I).

The Court therefore CONCLUDES

that Plaintiffs are not entitled to an award of attorneys’ fees
and costs under the IDEA.

In light of this Court’s conclusion,

the Court need not reach the remainder of Defendants’ objections
to the Amended F&R.

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CONCLUSION
On the basis of the foregoing, the magistrate judge’s
Amended Findings and Recommendation to Grant in Part and Deny in
Part Plaintiffs’ Motion for Award of Attorney’s Fees and Costs,
filed December 29, 2012, are HEREBY REJECTED.

Plaintiffs’ Motion

for Award of Attorney’s and Costs, filed September 5, 2011, is
HEREBY DENIED.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, February 23, 2012.

/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

JUSTIN R., ET AL. V. KATHRYN MATAYOSHI,
LEK-RLP; ORDER REJECTING THE MAGISTRATE
AND RECOMMENDATION TO GRANT IN PART AND
MOTION FOR AWARD OF ATTORNEY’S FEES AND

13

ET AL; CIVIL NO. 10-00657
JUDGE’S AMENDED FINDINGS
DENY IN PART PLAINTIFFS’
COSTS