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Derek H. v. Department of Education

United States District Court, D. Hawaii

August 29, 2016

DEREK H., by and through his Mother, RITAKO H., Plaintiffs,


          Alan C. Kay Sr. United States District Judge.

         For the reasons set forth below, the Court ADOPTS in part, REJECTS in part, and MODIFIES in part the Findings and Recommendation to Grant in Part and Deny in Part Plaintiffs' Motion for an Award of Attorneys' Fees and Costs, issued by Magistrate Judge Chang on May 31, 2016. ECF No. 62.


         The Court and the parties are familiar with the extensive factual and procedural history of this case, and the Court will not repeat it here except as necessary.

         This case comes before the Court on appeal of the administrative decision in the due process case of Derek H. (“Student”), by and through his mother Ritako H. (“Parent, ” and collectively with Student, “Plaintiffs”), against Defendant Department of Education, State of Hawaii (“DOE”). See Findings of Fact, Conclusions of Law, and Decision (“Decision”), Ex. A to Compl., ECF No. 1-1.

         On July 31, 2013, Parent filed a request for impartial hearing on behalf of Plaintiffs with the State of Hawaii Office of Administrative Hearings. Id. at 2. The request challenged certain actions of DOE in connection with the preparation of a November 13, 2012 Individualized Education Plan (“IEP”) for Student. Id. at 16. It also challenged the substantive and procedural fairness of the IEP itself. Id. at 16-17. The case was assigned Administrative Case No. DOE-SY1314-011 and a due process hearing was held before Administrative Hearings Officer (“AHO”) David Karlen on November 12-14, 2013. Id. at 2-3.

         Importantly, Parent's filing of the hearing request invoked the “stay-put” provisions of the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. § 1400 et seq., requiring DOE to fund Student's then-current educational placement during the pendency of the proceedings. See 20 U.S.C. § 1415(j). Pursuant to an earlier administrative decision dated May 7, 2012 (the “May 2012 Decision”), Student's then-current educational placement was private school Autism Behavior Consulting Group, Inc. (“ABC School”). ECF No. 12 at 153. The May 2012 Decision concluded that Student was eligible to receive compensation for his attendance at ABC School beginning in extended school year (“ESY”) 2012, and continuing through the 2012-2013 school year to ESY 2013. Id. at 155. Such compensation “include[d] Student's education and related expenses, including lunch and daily transportation to and from [ABC School].” Id.

         AHO Karlen issued his Decision in DOE-SY1314-011 on February 27, 2014, concluding:

(1) Petitioners established that the DOE failed to properly assess Student in the areas of his seizures and his hearing prior to the November 13, 2012 IEP but that Petitioners have not established that this was a violation of the IDEA; (2) Petitioners failed to establish that the DOE predetermined placement; (3) Petitioners failed to establish that Parent was denied participation in the November 13, 2012 IEP meeting; (4) Petitioners established that the November 13, 2012 [IEP] denied Student FAPE but that Petitioners are not entitled to any relief; and (5) Petitioners failed to establish entitlement to ESY services.
Under the rather unique circumstances of this case, Petitioners are deemed the prevailing party to a limited extent.

Decision at 43.

         Plaintiffs initiated an appeal of the Decision by filing a Complaint against DOE in this Court on March 24, 2014. ECF No. 1. Specifically, the Complaint indicates that Plaintiffs “seek the review and reversal of the Decision limited to the issue of remedy, ”[1] which AHO Karlen had denied to Plaintiffs despite finding that DOE denied Student a free appropriate public education (“FAPE”). Compl. ¶ 10.

         DOE filed an Answer to Complaint and Counterclaim on April 23, 2014. ECF No. 9. On May 6, 2014, Plaintiffs filed a Motion to Dismiss Counterclaims and Strike Affirmative Defenses, arguing that DOE's counterclaims and defenses were both untimely filed and deficiently pleaded under Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). ECF No. 21. On September 2, 2014, the Court issued an Order Granting in Part and Denying in Part Plaintiffs' Motion to Dismiss Counterclaims and Strike Affirmative Defenses (“Dismissal Order”). ECF No. 32. The Court dismissed DOE's counterclaims without prejudice and struck all of DOE's affirmative defenses without prejudice. Id. at 29. The Court instructed that “[a]ny amendments must be filed within thirty (30) days of the issuance of this Order, ” id. at 29-30, but DOE never filed an amended document.

         On July 21, 2015, the Court instructed the parties to confer with one another regarding certain outstanding transportation and speech therapy payments Plaintiffs alleged that DOE owed. ECF No. 42. In the event the parties could not resolve such matters, the Court called for further briefing from the parties representing their positions with regards to the payments. Id. Following the submission of further briefing the parties later submitted, the Court issued a Minute Order on July 24, 2015 referring the matter to Magistrate Judge Chang for purposes of settlement; failing settlement, the Court requested findings and recommendations from Magistrate Judge Chang regarding the same. ECF No. 45.

         On December 8, 2015, the Magistrate Judge issued as his findings and recommendations Plaintiffs' Revised Findings and Conclusions Regarding Outstanding Costs and Expenses (“Speech Therapy F&R”), adopting Plaintiffs' proposed findings and recommendations with respect to $7, 689.14 in reimbursement for Student's speech therapy expenses. ECF No. 52. However, the court declined to award Plaintiffs their requested $1, 231.39 in reimbursement for transportation costs, as the record failed to establish that such services were necessary or appropriate. Id.

         On December 29, 2015, this Court issued an Order Adopting Plaintiffs' [Sic] Revised Findings and Conclusions Regarding Outstanding Costs and Expenses, and Dismissing as Moot Plaintiffs' Administrative Appeal (“Order”). ECF No. 53. The Court concluded that its adoption of the Magistrate Judge's findings and recommendations and the operation of stay-put mooted this action. Id. at 6. The Court explained that IDEA's stay-put provision already obligated DOE to reimburse the costs of Student's placement at ABC School during the administrative proceeding below and the instant judicial appeal. Id. Because those proceedings spanned the 2013-2014 school year - the same period for which Plaintiffs sought reimbursement as an equitable remedy for DOE's denial of FAPE - the Court found it was unable to grant Plaintiffs any further “effective relief” in the “real world.” Id. (citing Miller ex rel. S.M. v. Bd. of Educ. of Albuquerque Pub. Sch., 565 F.3d 1232, 1250 (10th Cir. 2009)).

         On January 12, 2016, Plaintiffs filed a Motion for an Award of Attorneys' Fees and Costs (“Motion for Attorneys' Fees”), requesting $67, 847.63 in attorneys' fees and $1, 062.32 in costs. ECF No. 55. Plaintiffs also filed a Statement of Consultation in connection with their Motion for Attorneys' Fees on January 28, 2016. ECF No. 56. On February 11, 2016, DOE filed a Memorandum in Opposition to Plaintiffs' Motion for Attorneys' Fees. ECF No. 57. Plaintiffs filed a Reply Memorandum in Support of Plaintiffs' Motion for Attorneys' Fees (“Reply”) on February 25, 2016. ECF No. 58. In their Reply, Plaintiffs requested an additional $5, 120.59 for time spent litigating the fee request. Id. at 15.

         On May 31, 2016, Magistrate Judge Chang issued his Findings and Recommendation to Grant in Part and Deny in Part Plaintiffs' Motion for an Award of Attorneys' Fees and Costs (“F&R”). The F&R recommends that the Court award Plaintiffs $23, 509.94 in attorneys' fees and $491.88 in costs. Id. at 32. Plaintiffs filed their Objections to Magistrate Judge's F&R (“Objections”) on June 14, 2016. ECF No. 63. On June 28, 2016, DOE filed a Response to Plaintiffs' Objections (“Response”). ECF No. 64.


         A district court reviews de novo those portions of a magistrate judge's findings and recommendation to which an objection is made and “may accept, reject, or modify, in whole or in part, the findings and recommendation made by the magistrate judge.” 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); United States v. Rivera-Guerrero, 377 F.3d 1064, 1070 (9th Cir. 2004); L.R. 74.2. Under a de novo standard of review, the court “review[s] the matter anew, the same as if it had not been heard before, and as if no decision previously had been rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006).

         “[The] district court has discretion, but is not required, to consider evidence presented for the first time in a party's objection to a magistrate judge's recommendation.” Akhtar v. Mesa, 698 F.3d 1202, 1208 (9th Cir. 2012) (citation omitted). It may also consider the record developed before the magistrate judge. L.R. 74.2. The district court must arrive at its own independent conclusions about those portions of the magistrate judge's report to which objections are made. United States v. Remsing, 874 F.2d 614, 618 (9th Cir. 1989); Benihana of Tokyo, LLC v. Angelo, Gordon & Co., Civ. No. 15-00028 ACK-RLP, 2015 WL 5439357, at *2 (D. Haw. Sept. 14, 2015); see also United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“The statute makes it clear that the district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise) (emphasis in original). The court reviews for clear error those portions of the recommendation to which there is no objection. Abordo v. State of Haw., 938 F.Supp. 656, 658 (D. Haw. 1996) (citing Campbell v. U.S. District Court, 501 F.2d 196, 206 (9th Cir. 1974)).

         Objections to a magistrate judge's recommendation are usually treated as non-hearing motions to be decided on the submissions. L.R. 7.2(e). The Court finds that a hearing in this matter is neither necessary nor appropriate. See id.


         In reducing the amount Plaintiffs requested for attorneys' fees and costs, the Magistrate Judge found that fees incurred during the present appeal to the United States District Court should be excluded from the award, with the exception of some of the fees accrued in connection with Plaintiffs' Motion for Attorneys' Fees. F&R at 20. For hours spent on the administrative proceedings, the court made several deductions from the requested fees for time spent on clerical tasks. Id. The Magistrate Judge also made an additional 30% reduction to the fee award for time spent on the administrative proceedings, due to the fact that Plaintiffs achieved only partial success in those proceedings. Id. at 24. Finally, the Magistrate Judge denied Plaintiffs' requested copying costs because Plaintiffs failed to sufficiently describe the need for the copies; however, the Magistrate Judge granted Plaintiffs leave to submit the appropriate documentation supporting such costs by June 7, 2016. Id. at 30.

         Plaintiffs state that their Objections are “based on the fact that the [F&R] recommend[ed] that the Court deny Plaintiff prevailing party status for proceedings before the United States District Court (USDC), wholesale deny any award of attorney's fees for the proceedings before the USDC and reduce the attorney's fees for the proceedings before the Administrative Hearings Officer David Karlen.” Objections at 2. Plaintiffs argue that in addition to finding Plaintiffs to be prevailing parties in the instant proceedings, the Court should also “award Plaintiffs their reasonable attorneys' fees and costs as requested pursuant to the briefing in this matter (as reduced by $8, 000.00 by Plaintiffs and absent the supplemental briefing as required by the Magistrate Judge) for a total amount of fees and costs of $64, 968.22.”[2] Id. at 14. Plaintiffs therefore appear to request the entire award they initially sought in their Motion for Attorneys' Fees without specifically objecting to each basis on which the Magistrate Judge reduced the award.[3]

         Local Rule 74.2 states that a party objecting to an F&R must “specifically identify the portions of the order, findings, or recommendation to which objection is made and the basis for such objections.” See also Seto v. Kamai'Aina Care, Inc., Civ. No. 10-00351 SOM-BMK, 2011 WL 6779776, at *1 (D. Haw. Dec. 27, 2011) (overruling objection that failed to specify what was being objected to and the basis of the objection). The Court will not, therefore, review de novo those portions of the F&R to which Plaintiffs have not specifically objected, and will instead review those portions for clear error. See Reyna-Tapia, 328 F.3d at 1121; Abordo, 938 F.Supp. at 658.

         I. Entitlement to Attorneys' Fees and Costs

         In a case arising under IDEA, a court, in its discretion, “may award reasonable attorneys' fees as part of the costs . . . to a prevailing party who is the parent of a child with a disability.” 20 U.S.C. § 1415(i)(3)(B)(i)(I). In order to attain prevailing party status, “a plaintiff must not only achieve some material alteration of the legal relationship of the parties, but that change must also be judicially sanctioned.” Shapiro ex rel. Shapiro v. Paradise Valley Unified Sch. Dist. No. 69, 374 F.3d 857, 865 (9th Cir. 2004) (internal quotation marks omitted). “A prevailing party is one who succeeds on any significant issue in litigation which achieves some of the benefit the parties sought in bringing the suit.” Van Duyn ex. rel. Van Duyn v. Baker Sch. Dist. 5J, 502 F.3d 811, 825 (9th Cir. 2007). However, the success “cannot be de minimis and must be causally linked to the litigation brought.” Id.; see also Me. Sch. Admin. Dist. No. 35 v. Mr. & Mrs. R., 321 F.3d 9, 15 (1st Cir. 2003) (stating that a prevailing party must “succeed on the merits of a claim or defense, ” but that “a party may be considered ‘prevailing' even without obtaining a favorable final judgment on all (or even the most crucial) of her claims”), cited by Park ex rel. Park v. Anaheim Union High Sch. Dist., 464 F.3d 1025, 1035 (9th Cir. 2006) and Shapiro, 374 F.3d at 865 (9th Cir. 2004).

         The Magistrate Judge found that Plaintiffs were prevailing parties for purposes of obtaining attorneys' fees because they had achieved “limited success at the administrative level.” F&R at 11, 15. Plaintiffs do not contest this finding. What Plaintiffs do contest is the Magistrate Judge's further finding that Plaintiffs have not prevailed in the instant appeal of the administrative decision. See id. at 12; Objections at 2.

         In making this finding, the Magistrate Judge explained that neither this Court's dismissal without prejudice of DOE's counterclaims nor its striking of DOE's affirmative defenses without prejudice conferred prevailing party status upon Plaintiffs because these rulings did not materially alter the legal relationship between the parties, and did not serve to adjudicate the substance of the counterclaims and defenses. F&R at 12. Furthermore, the Magistrate Judge found, the fact that Plaintiffs obtained reimbursement for speech therapy in the instant proceedings did not render Plaintiffs the prevailing party because such reimbursement was already required pursuant to DOE's stay-put obligation. Id. The Magistrate Judge explained, “[T]here cannot exist a change in the legal relationship between the parties when the order concerning reimbursement simply required Defendant to do something it was already obligated to do pursuant to stay put.” Id. at 13-14.

         The Court notes as an initial matter that Plaintiffs' continued litigation of this case resulted in $215, 856.50 in payments to maintain Student's ABC School placement; however, this was not due to the legal success of Plaintiffs' counsel. See Objections at 9 (“By initiating this instant action, Plaintiffs ensured that Derek continued in his appropriate program and placement [and] that they were entitled to reimbursement for tuition and related services . . . .”); see also Response at 7. Rather, these payments were made pursuant to DOE's mandatory stay-put obligation, which DOE has not contested in this case.[4] When the DOE does not contest its obligation to pay for stay-put, such payment cannot confer upon an opposing party prevailing party status. See Dep't of Educ., Haw. v. M.F. ex rel. R.F., Civ. No. 11-00047 JMS-BMK, 2012 WL 2415525, at *3 (D. Haw. May 31, 2012) (stating that the receipt of stay-put relief does not render a party a prevailing party when the DOE does “not dispute that it was required to pay for stay put”).

         Furthermore, the Court agrees with the Magistrate Judge's conclusion that the dismissal of DOE's counterclaims without prejudice and striking of its affirmative defenses without prejudice did not alter the legal relationship between the parties or confer upon Plaintiffs prevailing party status. See F&R at 12. The Court never reached the merits of DOE's counterclaims or defenses, and in fact granted ...

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