Cano-Angeles et al v. Department of Education of Puerto Rico et al
Filing
38
OPINION AND ORDER. Signed by US Magistrate Judge Bruce J. McGiverin on 10/14/2015. (jm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
YOLANDA CÁNO-ANGELES, et al.,
Plaintiffs,
v.
Civil No. 15-1005 (BJM)
COMMONWEALTH OF PUERTO RICO
(DEPARTMENT OF EDUCATION),
Defendant.
OPINION AND ORDER
Yolanda Cáno-Angeles and Genaro Herrera Dos Reis, personally and on behalf of
their son, FHC (collectively, “Cáno”), appeal the administrative decision of the Puerto
Rico Department of Education (“the Department”), arguing that the administrative law
judge (“ALJ”) incorrectly determined that she lacked jurisdiction to resolve Cáno’s claim
for reimbursement of transportation expenses pursuant to the Individuals with Disabilities
Education Act (“IDEA”), 20 U.S.C. § 1400 et seq. Docket No. 29. The Department did
not oppose the appeal, and I granted Cáno’s motion to deem the appeal submitted for
adjudication. Docket No. 30. The parties consented to magistrate judge jurisdiction.
Docket No. 22.
For the reasons set forth below, the ALJ’s decision is REVERSED, and the case
is REMANDED to the ALJ.
BACKGROUND
These facts are drawn from Cáno’s verified complaint, which the Department
failed to answer. Docket No. 1 (“Compl.”). Fed. R. Civ. P. 12(a)(1)(A)(i).
FHC’s Transportation Expenses
FHC has attended the Instituto Modelo de Enseñanza Individualizada (“IMEI”)
since 2007. Compl. 4. He has received a transportation scholarship to pay for his
transportation services to IMEI and to the following weekly therapy sessions: (1) five
Cáno-Angeles, et al. v. Commonwealth of Puerto Rico (Department of Education), Civil No. 15-1005 (BJM)
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speech therapy sessions at the Clínica Terapeútica para el Desarrollo del Niño; (2) three
occupational therapy sessions at the Centro de Evaluación e Intervención Pasos; (3) three
physical therapy sessions at the Guimerfe Center in Caguas; (4) two swimming therapy
sessions at the Guimerfe Center in Cupey; and (5) one visual-functional therapy session
at the Centro para el Desarrollo de Inteligencia Visual y Académica. Id. at 4–5.
The Department’s Special Education Manual provides for reimbursement of
transportation expenses according to the rates certified by the Public Service Commission
(“Commission”). Id. at 5. The Department’s other guidance document, Directives for
Transportation Services for Special Education Students, indicates that the reimbursement
rates for academic years 2012 to 2014 are set by the Commission. Id. To determine the
Commission’s rates, the Department’s guidance document states that the rates should be
obtained from the Commission. Id. Cáno obtained certifications from the Commission for
the trips to IMEI and to the various weekly therapy sessions. Id. However, the
Department refused to reimburse Cáno for her transportation expenses incurred during
2012 to 2014 according to the rates certified by the Commission.1 Id. at 6.
Administrative Proceedings
On May 1, 2014, Cáno filed an administrative complaint against the Department,
requesting the reimbursement of the transportation expenses. Id. An administrative
hearing was granted, and held on September 16, 2014. Id. At the hearing, the Department
argued that Puerto Rico Law 148 of August 3, 2008, (“Law 148”) deprived the
Commission of jurisdiction to establish the applicable transportation rates. Id. According
to the Department, the applicable reimbursement rates are set by the Puerto Rico
Department of Transportation and Public Works (“DTOP”). Id. The Department claimed
that there was a clerical error in the language of the two guidance documents discussed
above, but did not present any evidence to support that claim. Id.
1
In her appeal brief, Cáno asserts that the Department has refused to pay her any
reimbursement for her transportation expenses. Pls.’ Appeal Br. 17 n.7.
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The ALJ questioned whether she had jurisdiction to resolve the reimbursement
dispute in light of the Department’s claim that Law 148 deprived the Commission of
authority to establish the applicable transportation rates. She asked the parties to brief the
issue, which they did. Id. at 6–7. Cáno argued that the ALJ had jurisdiction over all
matters pertaining to the “related services” to which special education students are
entitled, including the amount of reimbursement for transportation expenses. Id. at 7.
Cáno also pressed that Law 148 has no provision concerning the manner in which parents
of special education students are reimbursed for transportation expenses. Id.
On November 10, 2014, the ALJ dismissed Cáno’s administrative complaint,
concluding that she “lack[ed] jurisdiction to resolve the controversy regarding the
applicable rate for [the] transportation scholarship.” Docket No. 35-4 at 4. The ALJ noted
that “the IDEA Act [sic] has granted administrative law judges the jurisdiction to hear
cases in which there is a disagreement regarding reimbursements.” Docket No. 35-4 at 3.
However, she reasoned that “[g]etting into the merits of the controversy requires
interpreting other enacted laws and deciding over matters for which IDEA Act [sic] has
not given us authority to intervene.” Docket No. 35-4 at 4.
DISCUSSION
Cáno argues that the ALJ erred in dismissing the administrative complaint for lack
of jurisdiction, and that this court should order the Department to reimburse her
transportation expenses according to the rates set by the Commission for the academic
years included in the administrative complaint, and for the 2014-2015 academic year,
which was not presented to the ALJ.
I.
Department’s Authority to Resolve the Reimbursement Dispute
The IDEA is a Spending Clause statute that seeks to ensure that “all children with
disabilities have available to them a free appropriate public education.” 20 U.S.C. §
1400(d)(1)(A). Under the IDEA, school districts must create an “individualized education
program” (IEP) for each disabled child. Id. § 1414(d). The IDEA is “frequently described
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as a model of ‘cooperative federalism.’” Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49,
52 (2005) (citing Little Rock Sch. Dist. v. Mauney, 183 F.3d 816, 830 (8th Cir. 1999)). It
“leaves to the States the primary responsibility for developing and executing educational
programs for handicapped children, [but] imposes significant requirements to be followed
in the discharge of that responsibility.” Bd. of Educ. v. Rowley ex rel. Rowley, 458 U.S.
176, 183 (1982).
“[C]ourts have generally interpreted the IDEA as allowing reimbursement for the
cost not only of private school tuition, but also of ‘related services.’” Díaz-Fonseca v.
Commonwealth of P.R., 451 F.3d 13, 31 (1st Cir. 2006). The definition of “[r]elated
services” includes “transportation.” 20 U.S.C. § 1401(26)(A); see also Díaz-Fonseca,
451 F.3d at 31. And the regulations provide that “[t]ransportation includes . . . [t]ravel to
and from school and between schools.” 34 C.F.R. § 300.34(c)(16). When a local
educational agency fails to provide the related services to which a student is entitled
under the IEP, the child’s parents may demand an administrative due process hearing. 20
U.S.C. § 1415(f)(1)(A). After that hearing, any “aggrieved party” may challenge the
administrative decision by bringing a civil action in state or federal court. Id. §
1415(i)(2)(A).
A.
Standard of Review
The ALJ determined that she could not resolve the reimbursement dispute because
the IDEA did not grant her jurisdiction to do so. 2 When a state agency interprets a federal
statute, circuit courts have generally held that federal courts review that interpretation de
novo. See Qwest Corp. v. Minn. Pub. Utils. Comm’n, 427 F.3d 1061, 1064 (8th Cir.
2005); MCI Telecomm. Corp. v. Bell Atlantic Pa., 271 F.3d 491, 515–17 (3d Cir. 2001)
(“Generally . . . deference is accorded to the interpretations of federal statutes by federal
2
Cáno cites authority discussing the doctrine of personal jurisdiction to argue that the
Department had authority to resolve the reimbursement dispute. Pls.’ Appeal Br. 14 (citing
Pritzker v. Yari, 42 F.3d 53, 57–59 (1st Cir. 1994)). But that doctrine does not shed light on the
standard of review applicable to the agency’s interpretation of the IDEA.
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administrative agencies, not to interpretations by state agencies.”); Sw. Bell Tel. Co. v.
Pub. Util. Comm’n, 208 F.3d 475, 482 (5th Cir. 2000); GTE S., Inc. v. Morrison, 199 F.3d
733, 745 (4th Cir. 1999) (court reviewed “de novo the [Virginia State Corporation
Commission’s] interpretation of the Telecommunications Act.”); Orthopaedic Hosp. v.
Belshe, 103 F.3d 1491, 1495 (9th Cir. 1997) (“We review de novo a state agency’s
interpretation of a federal statute.”); Turner v. Perales, 869 F.2d 140, 141–42 (2d Cir.
1989) (“district court erred . . . in holding that the appropriate standard of review of the
New York Department of Social Services’ interpretation of federal law was governed by
the test set forth in” Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837, 843–44 (1984)).3 But see Bellsouth Telecomm., Inc. v. Sanford, 494 F.3d 439,
447–48 (4th Cir. 2007) (“[E]ven with our de novo standard of review, an order of a state
commission may deserve a measure of respect in view of the commission’s experience,
expertise, and the role that Congress has given it in the Telecommunications Act.”) (citing
Skidmore v. Swift & Co., 323 U.S. 134, 139–40 (1944)).4
Moreover, because the Administrative Procedure Act does not govern the
Commonwealth of Puerto Rico Department of Education, City of Arlington v. FCC, 133
S. Ct. 1863, 1868 (2013), is inapplicable here.5 See, e.g., Gilliam v. Miller, 973 F.2d 760,
761–62 (9th Cir. 1992) (court affirmed trial court’s determination that because
3
Under the Chevron framework, courts apply a two-step analysis, and must defer to a
federal agency’s reasonable interpretation of an ambiguous statutory provision it is charged with
administering. See Chevron, 467 U.S. at 843–44.
4
Under Skidmore, the level of respect granted to an interpretation “depend[s] upon the
thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier
and later pronouncements, and all those factors which give it power to persuade, if lacking power
to control.” 323 U.S. at 140.
5
In City of Arlington, the Supreme Court recently held that “the distinction between
‘jurisdictional’ and ‘nonjurisdictional’ interpretations is a mirage. No matter how it is framed, the
question a court faces when confronted with an agency’s interpretation of a statute it administers
is always, simply, whether the agency has stayed within the bounds of its statutory authority.”
133 S. Ct. at 1868. That inquiry is resolved by applying Chevron, but “for Chevron deference to
apply, the agency must have received congressional authority to determine the particular matter at
issue in the particular manner adopted.”) Id. at 1874 (citing United States v. Mead Corp., 533
U.S. 218, 229 (2001)).
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defendant’s “action was taken in his capacity as a state officer, the [Administrative
Procedure Act was] inapplicable.”); see also 5 U.S.C. § 551(1)(C) (“‘agency’ means each
authority of the Government of the United States, whether or not it is within or subject to
review by another agency, but does not include . . . the governments of the territories or
possessions of the United States.”). Accordingly, I proceed to review de novo whether the
IDEA grants the ALJ authority to consider state law when resolving the reimbursement
dispute.
B.
ALJ’s Authority Under the IDEA to Consider State Regulations
The ALJ determined that Cáno was entitled to reimbursement for transportation
expenses, but that she could not determine the applicable reimbursement rate because she
would have to consider Puerto Rico law cited by the Department. However, the IDEA
permits hearing officers to consider both federal and state law when resolving
reimbursement disputes. The plain language of the statute requires a hearing officer to
“possess knowledge of, and the ability to understand provisions of [IDEA], Federal and
State regulations pertaining to [IDEA], and legal interpretations of [IDEA] by Federal
and State courts.” 20 U.S.C. § 1415 (f)(3)(A)(ii); see also 34 C.F.R. § 300.511(c). And
the Supreme Court has noted that this statutory provision requires “the appointment of
[an] ALJ with technical capacity to understand [the] Act.” Schaffer, 546 U.S. at 69.
Moreover, courts have permitted hearing officers to consider both state and
federal statues when resolving reimbursement disputes. See e.g., Gadsby by Gadsby v.
Grasmick, 109 F.3d 940, 953–54 (4th Cir. 1997) (reimbursement available even where
plaintiffs “failed to comply with Maryland’s laws and regulations governing
reimbursement of private school tuition under IDEA”); T.G. ex rel. T.G. v. Midland Sch.
Dist., 848 F. Supp. 2d 902, 929 (C.D. Ill. 2012) (court affirmed hearing officer’s denial of
reimbursement where “primary reason for denying Plaintiffs reimbursement” was their
failure to comply with “federal and Illinois regulations.”). And in D.S., the district court
considered a hearing officer’s dismissal of a due process complaint where, as here, the
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hearing officer claimed to lack jurisdiction over the complaint. D.S. v. Dist. of Columbia,
699 F. Supp. 2d 229, 235 (D.D.C. 2010). In that case, the hearing officer claimed to lack
jurisdiction because the student was not enrolled in a school within the district. Id. at 234.
The trial court reversed the hearing officer’s dismissal, reasoning that “[n]othing in IDEA
or the case law interpreting its administrative review procedures suggests such a
limitation.” Id. at 235.
Similarly, the IDEA does not suggest that a hearing officer is prevented from
considering state regulations when resolving disputes. To the contrary, under § 1415(f)
and the IDEA’s model of “cooperative federalism,” Congress intended to create a system
in which hearing officers consider both state and federal law to ensure that the Act is
properly being implemented at the local level. See 20 U.S.C. § 1412(a) (participating
States must certify to the Secretary of Education that they have “policies and procedures”
that will effectively meet the Act’s conditions); id. § 1415 (f)(3)(ii) (ALJs must have
technical competence to understand both state and federal law pertinent to the IDEA);
Schaffer, 546 U.S. at 52. Moreover, the record indicates that the ALJ did not consider the
effect Law 148 has, if any, on the reimbursement dispute. Rather, the ALJ refused to
consider the state regulation in contravention to the IDEA. See 20 U.S.C. § 1415(f)(3).
Affirming the ALJ’s interpretation of the IDEA would lead to absurd results, as an ALJ
would be deprived of jurisdiction any time one of the parties alleges that a state law is
implicated––regardless of whether that state law actually has any effect on the merits of
the dispute. Accordingly, the ALJ erred when she determined that the IDEA did not
authorize her to consider whether Law 148 has any effect on the applicable
reimbursement rate for Cáno’s transportation scholarship.
C.
Appropriate Remedy
Cáno acknowledges that the ALJ did not consider the merits of the reimbursement
dispute, but urges this court to award the amount of reimbursement she sought in the
administrative hearing, as well as reimbursement for the 2014-2015 academic year that
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was not presented to the ALJ. In D.S., the court remanded the case to the hearing officer
where the hearing officer did not consider the merits of the complaint and dismissed it on
the ground that she “lacked jurisdiction.” 699 F. Supp. 2d at 235–36. Other courts have
similarly remanded IDEA cases to the hearing officer where the hearing officer did not
consider the underlying merits of the dispute. See Jenkins v. Butts Cnty. Sch. Dist., 984 F.
Supp. 2d 1368, 1380–81 (M.D. Ga. 2013) (“[R]emand to the ALJ is the most appropriate
remedy when the . . . complaint was dismissed without an evidentiary hearing and the
reviewing court lacks findings and conclusions on the merits of the plaintiff’s claims.”);
D.N. v. N.Y. Dep’t of Educ., 905 F. Supp. 2d 582, 589 (S.D.N.Y. 2012) (“rather than
reaching the merits of the unreviewed claims, [court] remand[ed] . . . matter to [the state
agency]”); Somoza v. N.Y.C. Dep’t. of Educ., 475 F. Supp. 2d 373, 391 (S.D.N.Y. 2007)
(noting that “in cases where a de novo standard applies, ‘courts tend still to return the
decision to the agency in order to rely on the agency’s expertise and protect the integrity
of the administrative process.”), rev’d on other grounds, 538 F.3d 106, 116 (2d Cir.
2008).
Remanding this case to the Department is the appropriate remedy here because
the ALJ did not address the reimbursement dispute on the merits. See D.S., 699 F. Supp.
2d at 235–36; Jenkins, 984 F. Supp. 2d at 1380–81; D.N., 905 F. Supp. 2d at 589;
Somoza, 475 F. Supp. 2d at 391. The state agency has not provided its expertise on the
reimbursement dispute, or made findings of fact or conclusions of law for this court to
review. See D.S., 699 F. Supp. 2d at 235–36; see also Town of Burlington v. Dep’t of
Educ., 736 F.2d 773, 790 (1st Cir. 1984) (“the Act contemplates that the source of the
evidence generally will be the administrative hearing record, with some supplementation
at trial.”).
Cáno contends that this court need not remand because the appeal presents a
purely legal question. See Ezratty v. Commonwealth of P.R., 648 F.2d 770, 774–75 (1st
Cir. 1981) (The interests underlying the exhaustion doctrine are not implicated where
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“the issue [involves] a pure matter of law as to which specialized administrative
understanding plays little role.”). The First Circuit has reasoned that the exhaustion
doctrine “allows the agency to develop a factual record, to apply its expertise to a
problem, to exercise its discretion, and to correct its own mistakes, all before a court will
intervene. Insofar as Congress has provided that an agency will decide a matter in the
first instance, to apply the doctrine normally furthers specific Congressional intent.” Id.
Cáno suggests there is only a legal dispute here because the Department has admitted that
FHC is entitled to reimbursement for his transportation scholarship, and because the
Department’s guidance documents establish that the applicable reimbursement rates are
set by the Commission. Though the Department admitted below that Cáno is entitled to
reimbursement, it did not concede that the reimbursement rates are to be set by the
Commission. Nor is the applicable rate of reimbursement evident from the guidance
documents Cáno submitted, or from other evidence submitted to this court. Under these
circumstances, proper adjudication of the dispute would benefit from remand to the
administrative agency so that the ALJ can develop the record and make findings of fact
and conclusions of law. See Dubois v. Conn. State Bd. of Educ., 727 F.2d 44, 49 (2d Cir.
1984) (trial court correctly determined that administrative record was “incomplete,” but
incorrectly concluded that plaintiff had not exhausted administrative remedies).
Moreover, the ALJ noted in her ruling that the “payments received by [Cáno] are
calculated at the same rates as those of the other students.” Docket No. 35-4 at 3. The
Department argued before the ALJ that the applicable rate of reimbursement for the
transportation scholarship had been settled by another hearing officer in administrative
complaint number 2013-098-004. Docket No. 35-3 at 2. Cáno claimed that the applicable
reimbursement rate was not adjudicated in that prior hearing. Docket No. 35-2 at 4. The
record from that administrative hearing has not been presented to this court, nor is it
evident from the administrative record that it was presented to the ALJ. That there may be
a prior resolution of the applicable reimbursement rate for Cáno’s transportation
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scholarship is another reason why remand to the ALJ is appropriate here. See Theodore v.
Dist. of Columbia, 772 F. Supp. 2d 287, 292 (D.D.C. 2011) (res judicata applied in the
context of IDEA administrative proceedings to bar plaintiff from relitigating an issue that
had been adjudicated in her prior administrative hearings). Because the administrative
record is insufficiently developed to resolve the reimbursement dispute, and because the
ALJ did not consider the merits of that dispute, remand to the ALJ is the appropriate
remedy here.
CONCLUSION
For the foregoing reasons, the ALJ’s decision is REVERSED, and the case is
REMANDED so that the merits of the parties’ reimbursement dispute may be resolved in
the first instance by the ALJ.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 14th day of October 2015.
S/Bruce J. McGiverin
BRUCE J. MCGIVERIN
United States Magistrate Judge
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