                          In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 04-3731
LINDA T. and GENE A., as parents of,
and on behalf of their minor son,
WILLIAM A.,
                                        Plaintiffs-Appellants,
                              v.


RICE LAKE AREA SCHOOL DISTRICT,
                                         Defendant-Appellee.
                        ____________
          Appeal from the United States District Court
              for the Western District of Wisconsin.
         No. 03 C 628—Barbara B. Crabb, Chief Judge.
                        ____________
      ARGUED MAY 3, 2005—DECIDED AUGUST 2, 2005
                     ____________




  Before FLAUM, Chief Judge, and KANNE and SYKES,
Circuit Judges.
  SYKES, Circuit Judge. In this case we review the denial
of a claim for attorneys’ fees under the Individuals With
Disabilities Education Act (“IDEA”), 20 U.S.C. §§ 1400
et seq. The district court denied the claim because although
Linda T. and Gene A., parents of William A., prevailed in
part in a state administrative agency hearing challenging
2                                                No. 04-3731

certain aspects of William’s educational program, their
success on the merits was de minimis. We affirm.


                      I. Background
  William A. is an autistic child who attends the Rice Lake
Area School District (“the District”) in Barron County,
Wisconsin. From age three to six he attended the District’s
early childhood program located in Red Cedar Hall, a
facility that offers a functional-based, prevocational cur-
riculum to disabled students. William attended kindergar-
ten at Tainter Elementary School, and for the first grade he
was placed half-day at Red Cedar Hall and half-day at
Tainter Elementary. From the second through the fifth
grades, William attended Tainter Elementary full-time.
  William’s intellectual and social development are signifi-
cantly delayed. According to the District, in August 2003,
when William was twelve years old and preparing to enter
sixth grade, his reading and math skills were between the
mid-first to mid-second grade level. The District determined
that William’s expressive language and communication
abilities were approximately at the level of a 2-to-2-½-year-
old, and that in terms of daily living skills such as personal
hygiene, dressing, and eating, he functioned at the age of a
3.3-year-old child. William is cheerful and compliant but
seldom initiates verbal exchanges and takes cues from
peers inconsistently. William was sometimes disruptive in
class and was removed from his fifth-grade regular class-
room on some occasions.
  On April 30, 2003, the District convened an Individualized
Education Program (“IEP”) meeting to determine William’s
continuing eligibility for special education, develop an IEP,
and determine his placement for the 2003-2004 school year.
William’s parents participated in the IEP team meeting.
The parents and the District had come to very different
views about the appropriate placement for William. The
No. 04-3731                                                 3

District believed that William would receive little or no edu-
cational benefit from being placed full-time at Rice Lake
Middle School because the regular sixth-grade curriculum
is too complex and fast-paced for him. Although the special
education teachers at the Middle School acknowledged that
William could work on some of his objectives and goals
within a regular classroom, they pointed out that none of
William’s own objectives and goals are part of the regular
sixth-grade curriculum.
  The IEP that was developed for William offered placement
half-day at Red Cedar Hall and half-day at the Middle
School. The description of the special education program in
the IEP is the same for both locations and indicates that
William will receive “an individually designed program for
Autism serviced through the Cognitive Disabilities
Program.” Under the IEP, William will receive “special edu-
cation 100% of the time” and “will participate with non-
disabled peers whenever appropriate.” The IEP also pro-
vides that “on-going autism training will be offered for the
staff that work with” William, including participation in
autism workshops and training, the amount and frequency
of which were to be determined “as opportunities arise and
are deemed appropriate.”
  William’s parents were dissatisfied with the IEP and
requested a due process hearing before the Wisconsin
Division of Hearings and Appeals. They challenged the IEP
on three grounds. First, they argued that William’s place-
ment half-days at Red Cedar Hall denied him the right to
receive a free appropriate public education in the least re-
strictive environment as guaranteed by the “mainstream-
ing” provision contained in 20 U.S.C. § 1412(a)(5)(A). Linda
T. v. Rice Lake Area Sch. Dist., 337 F. Supp. 2d 1135, 1137
(W.D. Wis. 2004). William’s parents sought an order placing
William at the Middle School full-time. Second, the parents
contended that William’s IEP did not contain sufficient
particulars about the instructional training services to be
4                                                No. 04-3731

provided to the staff. The parents asserted that rather than
simply state that such services be provided “as needed,” the
IEP should specify the amount and frequency of instruc-
tional training services that would be provided. Third, the
parents requested that the District retain an independent
consultant to train staff on how to implement William’s
IEP. Id.
  After a three-day hearing and the filing of posthearing
briefs, the Administrative Law Judge (“ALJ”) issued a deci-
sion on the merits of the parents’ claim. That decision is the
focus of this attorneys’ fees dispute. The ALJ concluded that
William “would not receive a satisfactory education in the
regular education classroom setting at the Middle School
during the morning” because the regular education class is
substantively unrelated to the goals and objectives of his
IEP. Id. at 1138. Accordingly, the ALJ held that placing
William at Red Cedar Hall for half of the school day was
acceptable. Id. The ALJ also concluded, however, that the
IEP did not identify with sufficient particularity the
available and appropriate opportunities for William to
interact with nondisabled peers during his half days at the
Middle School, instead stating only that he would partici-
pate with nondisabled peers “whenever appropriate.” Id. at
1138-39. The ALJ found this lack of specificity to be incon-
sistent with the “mainstreaming” standard and ordered the
IEP team to reconvene “to determine what mainstreaming
opportunities are appropriate for [William] and to revise the
IEP and placement offer to include such opportunities to
the maximum extent appropriate.” Id. at 1139.
  With respect to the staff training issue, the ALJ also
found the language in William’s IEP too vague and directed
the IEP team to revise the IEP “so that it clearly states the
amount and frequency of autism training that will be pro-
vided to the staff who work with [William].” Id. Finally, the
ALJ rejected the parents’ request that the district be
ordered to hire an independent consultant to train
William’s teachers. Id.
No. 04-3731                                                 5

  William’s parents then filed the present action in the
district court seeking attorneys’ fees pursuant to 20 U.S.C.
§ 1415(i)(3)(B) as the prevailing party in the agency pro-
ceeding. The parties did not contest the conclusions reached
by the ALJ. The only issues before the court were whether
William’s parents “prevailed” in the legal sense in the
agency proceeding, and if so, what amount, if any, would
constitute a reasonable fee award. Id. at 1140.
  The district court held that although the parents did not
prevail on the issues of William’s placement and the reten-
tion of an independent consultant, they were entitled to
prevailing party status to the extent that the ALJ ordered
the IEP revised to provide greater specificity regarding staff
training. Id. at 1142. But the court held that the plaintiffs’
success before the ALJ was de minimis because the issue of
greater specificity in the IEP was merely a “secondary
concern” and the ALJ’s decision did not require the District
to provide William with any new or additional services. Id.
at 1143-44. The court thus declined to award attorneys’
fees, citing Farrar v. Hobby, 506 U.S. 103, 115 (1992), which
holds that a plaintiff who formally but only nominally
prevails may be denied recovery of attorneys’ fees. William’s
parents appealed.


                      II. Discussion
  The IDEA contains a fee-shifting provision that permits
an award of attorneys’ fees to a prevailing party: “In any
action or proceeding brought under this section, the court,
in its discretion, may award reasonable attorneys’ fees as
part of the costs to the parents of a child with a disability
who is the prevailing party.” 20 U.S.C. § 1415(i)(3)(B).
IDEA’s fee-shifting provision allows an award of reasonable
attorneys’ fees to the party who prevails in an administra-
tive proceeding as well as an action in court. T.D. v.
LaGrange Sch. Dist. No. 102, 349 F.3d 469, 479 (2003). The
6                                                   No. 04-3731

parties do not disagree about the district court’s deter-
mination that the parents prevailed at the due process
hearing on the issue of greater specificity in William’s IEP
regarding teacher training. The only dispute on appeal is
whether, having determined that the parents had prevail-
ing party status, the district court erred in denying them
attorneys’ fees because their success on the merits was
de minimis.
  A party “prevails” for purposes of federal fee-shifting
statutes when he or she obtains “actual relief on the merits”
of a claim that “materially alters the legal relationship
between the parties by modifying the defendant’s behavior
in a way that directly benefits the plaintiff.” Farrar, 506
U.S. at 111-12. However, the Supreme Court in Farrar held
that “[i]n some circumstances, even a plaintiff who formally
‘prevails’ . . . should receive no attorney’s fees at all.” Id. at
115 (citation omitted); Monticello Sch. Dist. No. 25 v. George
L., 102 F.3d 895, 907 (7th Cir. 1996). The prevailing party
inquiry “does not turn on the magnitude of relief obtained,”
but the size of the fee award does. Farrar, 506 U.S. at 114.
The Supreme Court has said that “the most critical factor”
in determining the reasonableness of a fee award “is the
degree of success obtained.” Hensley v. Eckerhart, 461 U.S.
424, 436 (1983). Therefore, “the degree of the plaintiff’s
success in relation to the other goals of the lawsuit is a
factor critical to the determination of the size of a reason-
able fee, not to eligibility for a fee award at all.” Tex. State
Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782,
790 (1989). The reasonable fee award for a prevailing
plaintiff who obtains only a “Pyrrhic victory” is zero. Farrar,
506 U.S. at 117 (O’Connor, J., concurring).
  We review the district court’s determination whether to
grant attorneys’ fees under the IDEA deferentially, revers-
ing only upon finding an abuse of discretion. George L., 102
F.3d at 907 (citing Ustrak v. Fairman, 851 F.2d 983, 987
(7th Cir. 1988) and Max M. v. New Trier High Sch. Dist. No.
No. 04-3731                                                  7

203, 859 F.2d 1297, 1302 (7th Cir. 1988)). “An abuse of
discretion is found only when reasonable persons could not
take the view espoused by the district court.” Id. Here, as
we have noted, the district court declined to award attor-
neys’ fees because the degree to which William’s parents
succeeded at the due process hearing was so slight that it
did not support the recovery of any attorneys’ fees.
  The district court analogized the facts of this case to those
in George L., and we find the analogy sound. In George
L.,the parents of a disabled child convinced a hearing officer
that the school district failed to provide their child with a
free appropriate public education but did not prevail on
their claim that the private school into which they had
unilaterally placed him was the least restrictive environ-
ment for his education. George L., 102 F.3d at 906-07. The
hearing officer ordered specific changes to the child’s IEP,
including particular amounts of individualized instruction,
but declined to authorize placement at the private school
and ordered only interim reimbursement of the parents’
private school costs until the new IEP was implemented. Id.
We affirmed the district court’s denial of a fee award, noting
that under Farrar, “when a plaintiff’s success is simply
technical or de minimis, no fees may be awarded, even if
the plaintiff has succeeded on an issue in the litigation and
may thus be technically a ‘prevailing party.’ ” Id. at 907.
Although the parents in George L. won changes in their
child’s educational program, they lost their primary claim
regarding his placement in the private school. Accordingly,
we concluded that the district court did not “abuse[ ] its
discretion in finding such achievement de minimis in the
context of the Parents’ broader goals in this case.” Id. at
908.
  Similarly, in this case, William’s parents succeeded only
on their claim that William’s IEP required greater specific-
ity in certain discrete areas; they lost on the placement
issue, which was most important in the context of the ad-
ministrative proceeding as a whole. As the district court
8                                                      No. 04-3731

noted, the ALJ did not require the provision of any addi-
tional or different services to William; by requiring greater
specificity in the IEP, the ALJ was simply ordering the
District to complete an evaluation it had already begun.
Linda T., 377 F. Supp. 2d at 1144. We see no abuse of dis-
cretion in the district court’s reasoned determination that
this degree of success is de minimis and insufficient to
support an award of attorneys’ fees.
  The plaintiffs argue that the district court’s analysis was
deficient because the court failed to take into account a
1997 amendment to 20 U.S.C. § 1415(i)(3)(D), which, they
contend, creates a presumption in favor of an award of
attorneys’ fees under the circumstances of this case. In 1997
Congress amended the fee-shifting statute as part of a
broad overhaul of the IDEA. See Pub. L. No. 105-17, 111
Stat. 37 (1997). Among other changes, the following limi-
tation was added to the fee-shifting provision:
    Attorneys’ fees may not be awarded relating to any
    meeting of the IEP Team unless such meeting is con-
    vened as a result of an administrative proceeding or
    judicial action, or, at the discretion of the State, for a
    mediation described in subsection (e) of this section that
    is conducted prior to the filing of a complaint under
    subsection (b)(6) or (k) of this section.
20 U.S.C. § 1415(i)(3)(D)(ii).1
  The parents argue that this new language creates a
“presumptive eligibility” for attorneys’ fees in cases where,
as here, a new IEP meeting is ordered as a result of an ad-


1
  Effective July 1, 2005, this subsection now reads: “Attorneys’
fees may not be awarded relating to any meeting of the IEP Team
unless such meeting is convened as a result of an administrative
proceeding or judicial action, or, at the discretion of the State, for
a medication described in subsection (e) of this section.” See
Pub. L. No. 108-446, 118 Stat. 2715 (2004).
No. 04-3731                                                  9

ministrative proceeding. The amendment cannot reasonably
be read in this way. We note first that the amendment
pertains to claims for attorneys’ fees associated with IEP
meetings; the claim currently before the court is one for fees
associated with the proceeding before the ALJ, not fees
associated with the new IEP the ALJ ordered.
  As for the substance of the argument, the 1997 amend-
ment is plainly a limitation on awards of attorneys’ fees: it
prohibits recovery of fees associated with IEP meetings
unless the meeting is convened by order of a court or
administrative agency. This language does not create a
“presumptive eligibility” to an award of attorneys’ fees by
inverse implication; it removes discretion from the court
over a certain category of fees but does not compel the exer-
cise of the court’s discretion in favor of the category of fees
included in the prohibition’s “unless” clause. The court’s
general discretion to award attorneys’ fees remains gov-
erned by § 1415(i)(3)(B), which requires the court to deter-
mine prevailing party status and what amount of fees, if
any, is reasonable under the circumstances. The 1997
amendment prohibits the court from including in any fee
award a certain type of attorneys’ fees; it does not purport
to alter the basic statutory framework for determining
whether a fee award is appropriate in the first instance.
  We have previously held that the 1997 amendments pro-
hibiting recovery of attorneys’ fees in certain circumstances
do not “indicate a Congressional intent about anything
related to the ‘prevailing party’ requirement” in the IDEA
fee-shifting provision. T.D., 349 F.3d at 476. Rejecting as
“quite strained” an argument similar to that advanced here,
we concluded in T.D. that the new fee-limiting provisions
“do not inform anything about the meaning of the term
‘prevailing party’ in the IDEA because they are relevant
only after a plaintiff has been deemed a ‘prevailing party.’”
Id. In the same vein, we conclude here that the fee-limiting
provision in § 1415(i)(3)(D)(ii) constrains the exercise of the
10                                                No. 04-3731

court’s discretion over the size of a fee award under
§ 1415(i)(3)(B) to the extent that it excludes fees incurred in
connection with IEP meetings except under certain limited
circumstances; the limiting provision does not create a
presumptive entitlement to fees where the exception to the
exclusion applies.
  This interpretation of the statute is reinforced by a House
Report—cited by William’s parents and an amicus— which
accompanied the draft legislation:
     The Committee believes that the IEP process should be
     devoted to determining the needs of the child and plan-
     ning for the child’s education with parents and school
     personnel. To that end, the bill specifically excludes the
     payment of attorneys’ fees for attorney participation in
     IEP meetings, unless such meetings are convened as a
     result of an administrative proceeding or judicial action.
      ....
     Questions have been raised regarding the relationship
     between the extent of success of the parents and the
     amount of attorneys’ fees a court may award. In ad-
     dressing this question, the Committee believes the
     amount of any award of attorneys’ fees to a prevailing
     party under part B shall be determined in accordance
     with the law established by the Supreme Court in
     Hensley v. Eckerhart, 461 U.S. 424 (1983), and its
     progeny.
     As we stated in the 1986 report accompanying the legi-
     slation that added the attorneys’ fees provisions: “It is
     the committee’s intent that the terms ‘prevailing party’
     and ‘reasonable’ be construed consistent with the U.S.
     Supreme Court’s decision in Hensley v. Eckerhart, 461
     U.S. 424, 440 (1983).”
H.R. REP. NO. 105-95, at 105-06 (1997), reprinted in 1997
U.S.C.C.A.N. 78, 103. When the Supreme Court held in
Farrar that de minimis success on the merits will not sup-
No. 04-3731                                               11

port an award of attorneys’ fees, it relied explicitly on
Hensley. See Farrar, 506 U.S. at 114. If “the most critical
factor in determining the reasonableness of a fee award is
the degree of success obtained,” Hensley, 461 U.S. at 436, it
follows that there is a certain point below which the plain-
tiffs’ success will support no award at all. Nothing in the
1997 fee-limiting amendments to the IDEA affects this
principle, derived from Farrar and Hensley.
  The district court reasonably concluded that although
William’s parents achieved something of legal significance
at the due process hearing, their victory was de minimis
and did not justify an award of fees. This was not an abuse
of discretion. The judgment of the district court is
AFFIRMED.
12                                       No. 04-3731

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit




               USCA-02-C-0072—8-2-05
