                                                                                                                           Opinions of the United
1999 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-30-1999

Ridgewood Bd of Ed v. N.E.
Precedential or Non-Precedential:

Docket 98-6276




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Filed March 30, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 98-6276

RIDGEWOOD BOARD OF EDUCATION

v.

N.E., as Guardian Ad Litem for M.E., an infant;
MARY E., Individually and as Guardian Ad Litem for
M.E., an infant,
       Defendants/Third-party Plaintiffs

v.

FREDERICK STOKLEY, Superintendent; JOHN CAMPION,
Director of Special Programs; CHARLES ABATE, Principal;
WILLIAM WARD, Principal; LORRAINE ZAK, Psychologist;
KATHLEEN McNALLY, Social Worker; CAROLINE
JANOVER, LDT-C; GEORGE NEVILLE, Principal;
HENRY HOGUE, Psychologist; JUNE ANN DIBB, Dr.,
Psychiatrist; JOAN CHRISTIAN, LDT-C;
SUSAN LYNAUGH, Psychologist,
       Third-party Defendants

       N.E., as Guardian Ad Litem for M.E., an
       infant; Mary E., Individually and as
       Guardian Ad Litem for M.E., an infant,
       Appellants

On Appeal from the United States District Court
for the District of New Jersey
D.C. Civil Action No. 97-cv-02039
(Honorable Nicholas H. Politan)
Argued November 4, 1998

Before: SCIRICA and ALITO, Circuit Judges,
and GREEN, District Judge*

(Filed March 30, 1999)

       REBECCA K. SPAR, ESQUIRE
        (ARGUED)
       Cole, Schotz, Meisel, Forman
        & Leonard
       25 Main Street
       Hackensack, New Jersey 07601

        Attorney for Appellants

       CHERIE L. MAXWELL, ESQUIRE
        (ARGUED)
       Sills, Cummis, Zuckerman, Radin,
        Tischman, Epstein & Gross
       One Riverfront Plaza
       Newark, New Jersey 07102

        Attorney for Appellees

OPINION OF THE COURT

SCIRICA, Circuit Judge.

I.

The issue on appeal is whether Ridgewood Board of
Education provided its student M.E. with a "free
appropriate public education" as required by the
Individuals with Disabilities Education Act, 20 U.S.C.A.
S 1400 et seq. (Supp. 1998). The District Court found the
board of education satisfied IDEA because it provided M.E.
"more than a trivial educational benefit." Because we hold
that IDEA imposes a higher standard, we will vacate and
remand.
_________________________________________________________________

*The Honorable Clifford Scott Green, United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.

                                  2
II.

A.

M.E.1 is a seventeen-year old high-school student whose
learning disabilities qualify him as a "child[ ] with
disabilities" under the Individuals with Disabilities
Education Act ("IDEA"), 20 U.S.C.A. S 1400 et seq. (Supp.
1998). M.E. has attended schools in Ridgewood Board of
Education's school district since the fall of 1988, when he
started second grade at the Orchard School. At the
beginning of the second grade, his teacher noticed that his
academic skills were far below those of his classmates and
the school moved him to the first grade. At that time, the
school told M.E.'s parents that he did not have a learning
disability and was in fact very intelligent.

M.E.'s difficulties continued in the first grade. On the
recommendation of his teacher, his parents enrolled him in
summer school. Despite this extra instruction, M.E.'s
second grade teacher commented that his skills remained
very weak. Standardized tests conducted during the second
grade confirmed his teacher's assessment: M.E.'s scores
ranged between the fourth and ninth percentiles. M.E.
again attended summer classes on the school's
recommendation.

Hoping that a new school might help their son, M.E.'s
parents asked Ridgewood to transfer M.E. to Ridge School,
another elementary school in the Ridgewood district, for the
third grade. But M.E.'s difficulties continued at Ridge. As a
result, Ridgewood and M.E.'s parents agreed that M.E.
should receive Basic Skills Instruction twice a week and
work with his teacher after school twice a week. M.E.'s
parents also had M.E. examined by independent learning
disabilities teacher consultant Howard Glaser. Glaser's
October 1990 evaluation found that there was a great
discrepancy between M.E.'s intellectual abilities and his
academic performance: although M.E.'s intelligence was at
_________________________________________________________________

1. M.E.'s claims were brought by M.E.'s father as guardian ad litem and
his mother as guardian ad litem and individually. To minimize
confusion, we also refer to the family as "M.E."

                                3
the ninety-fifth percentile, his reading skills were at the
second percentile. Glaser also found that M.E. was learning
disabled and recommended that M.E.'s parents ask
Ridgewood to evaluate M.E.

Ridgewood's Child Study Team (CST) evaluated M.E. in
March, 1991. The Ridgewood CST agreed with Glaser's
assessment that there was a great discrepancy between
M.E.'s abilities and his performance in school. It also noted
that the discrepancy was growing and that M.E. was
becoming very anxious about his academic performance.
But it refused to classify him as learning disabled because
it concluded that he was not "perceptually impaired" within
the meaning of New Jersey law.2 The Ridgewood CST
recommended that Ridgewood provide M.E. with "increased
multi-sensory support" and that his parents obtain
counseling for him.

M.E.'s academic difficulties continued throughout the
remainder of elementary school. In fifth grade, M.E.'s
teacher and his parents asked Ridgewood to evaluate him
again. Ridgewood refused to do so. In sixth grade,
Ridgewood agreed to re-evaluate M.E. only after a learning
disabilities teacher consultant hired by M.E.'s parents
recommended it do so. The Ridgewood CST's May-June
1994 evaluations consisted of an educational assessment, a
psychological assessment, a health appraisal and a
psychiatric evaluation. The CST concluded that M.E.
remained far behind his classmates and recommended that
he and his parents seek counseling to explore his feelings
of inadequacy and depression. But the CST maintained that
M.E showed no signs of perceptual deficits, again refused to
classify him as perceptually impaired and determined that
he was not eligible for special education.

M.E.'s in-class troubles worsened during the seventh
_________________________________________________________________

2. N.J. Admin. Code tit. 28, S 6:28 (1991) defines "perceptually impaired"
as "a specific learning disability manifested in a disorder in
understanding and learning, which affects the ability to listen, think,
speak, read, write, spell and/or compute to the extent that special
education is necessary for achievement in an educational program." New
Jersey uses the phrase "perceptually impaired" instead of IDEA's phrase
"specific learning disabilities."

                               4
grade, where he consistently failed English and received
incompletes in other classes. Concerned that Ridgewood's
CST had erred in failing to classify M.E. as perceptually
impaired, M.E.'s parents asked Ridgewood to provide an
evaluation by an independent child study team. After the
parents filed for an administrative hearing, Ridgewood
agreed to the request and contracted with Bergen
Independent Child Study Teams for the evaluation.
Ridgewood Director of Special Programs John Campion
ordered Bergen not to recommend whether M.E. should be
classified as perceptually impaired or how he should be
educated. M.E.'s parents strongly disagreed with these
limitations and asked the Parent Information Center of New
Jersey to intervene. After the Parent Information Center
determined that Bergen could make classification and
placement recommendations, Bergen agreed to make these
recommendations in the final team report it would provide
to Ridgewood but not in the preliminary evaluation reports
individual team members would prepare.

Bergen's team staffing report diagnosed M.E. with a
learning disability in reading and writing and recommended
that Ridgewood classify him as perceptually impaired.
M.E.'s parents allege that Ridgewood intentionally withheld
this report from them despite their repeated requests and
that Ridgewood gave them the team staffing report only
after the New Jersey Department of Education ordered it to
do so.

On March 17, 1995, Ridgewood agreed to classify M.E. as
perceptually impaired. It recommended that he continue in
the Basic Skills Instruction he had been receiving for six
years and developed an individualized education program
(IEP) for the 1995-96 school year. The IEP called for thirty
minutes of individual Orton Gillingham3 instruction in
reading and spelling, resource center instruction in English
_________________________________________________________________

3. The Orton-Gillingham technique is a "linguistic-phonetic approach
[towards reading] with an emphasis on teaching the student to learn how
to decode words." Wall v. Mattituck-Cutchogue Sch. Dist., 945 F. Supp.
501, 505 n.4 (E.D.N.Y. 1996). It is designed to "enhance a dyslexic
individual's capacity to read, write, and spell." Pascoe v.
Washingtonville
Cent. Sch. Dist., 1998 WL 684583, at *1 (S.D.N.Y. Sep. 29, 1998).

                                5
and supplementary instruction in science and social
studies. M.E.'s parents maintain they objected to the IEP
and allege that Ridgewood coerced them to agree to it by
threatening to break off all discussions concerning M.E.'s
educational program unless they approved the IEP. The IEP
proved ineffective. M.E. made minimal improvements and
Ridgewood changed his grades to pass-fail in order to
minimize the impact on his self-esteem.

At the end of the eighth grade, Ridgewood decided that
M.E. should no longer be placed in regular classes. For the
1996-97 school year, it proposed an IEP that provided for
resource center instruction in all academic classes, two
daily periods of supplementary instruction with a teacher
trained in the Wilson reading program and
speech/language therapy once a week. It also scheduled
regular classroom instruction for physical education and
electives. M.E.'s parents disagreed with the IEP, claiming it
provided fewer services than his inadequate 1995-96 IEP
and arguing it would stigmatize M.E., damaging his
already-fragile self-esteem. On May 27, 1996, M.E.'s
parents requested a due process hearing before the New
Jersey Department of Education, contending that
Ridgewood's proposed IEP for 1996-97 failed to provide a
"free appropriate public education" within the meaning of
IDEA and requesting that M.E. be placed in private school
at Ridgewood's expense. Concerned that Ridgewood would
not provide their son an adequate education, M.E.'s parents
began to visit other schools and eventually asked
Ridgewood to place M.E. at the Landmark School, a private
school in Massachusetts that specializes in educating
students with learning disabilities. After Ridgewood refused
their request, M.E.'s parents then asked that Ridgewood
pay for him to attend Landmark's summer program. After
Ridgewood refused, M.E. attended Landmark's summer
program at his parents' expense and, according to his
instructors there, made steady and considerable progress.

B.

While M.E. was at Landmark, an Administrative Law
Judge conducted seven days of hearings on his parents'
complaint. In the fall of 1996, M.E. returned to Ridgewood

                                6
to begin ninth grade. On November 27, 1996, the ALJ held
that Ridgewood's 1996-97 IEP failed to provide M.E. with a
free appropriate public education. In arriving at this
conclusion, she considered the testimony of M.E.'s parents,
Howard Glaser, Dr. Mae Balaban of Bergen, M.E.'s
classroom teachers and the Ridgewood CST. She also
considered a letter written by Dr. Balaban on November 4,
1996, over a month after the last hearing. In that letter, Dr.
Balaban criticized the 1996-97 IEP, stating that she was
"convinced that [it] will not result in . .. an adequate
education." She strongly recommended that M.E. be placed
at Landmark, where he would "be given the chance to
develop at least average reading and writing skills so as to
become a functional adult."

The ALJ then ordered Ridgewood to pay M.E.'s tuition at
Landmark, holding such a placement is warranted when"it
is shown that it is not appropriate to provide educational
services for the pupil in a public setting." Concluding that
M.E.'s Landmark placement would remain appropriate until
Ridgewood "offers an appropriate program and placement",
the ALJ nonetheless refused to order Ridgewood to pay for
the non-tuition costs of the Landmark placement. The ALJ
also denied M.E.'s request for compensatory education,
finding that Ridgewood's failure to classify M.E. as disabled
did not rise to the required level of bad faith or willful
misconduct. Finally, the ALJ concluded that M.E. was
entitled to reimbursement for the tuition costs of attending
Landmark's summer program in 1996.

C.

On January 20, 1997, pursuant to the ALJ's decision,
M.E. enrolled in Landmark at Ridgewood's expense. In April
1997, Ridgewood filed a complaint in federal court under
20 U.S.C.A. S 1415(i)(2) (1998), an action that had the effect
of appealing the ALJ's decision. M.E. brought a
counterclaim seeking compensatory education and the non-
tuition costs of attending Landmark. He also filed a third-
party complaint against various Ridgewood administrators
and child study team members, alleging violations of IDEA,
the Rehabilitation Act of 1973, 29 U.S.C. S 701 et seq., 42
U.S.C. S 1985(3), 42 U.S.C. S 1983, New Jersey state law

                               7
and the United States Constitution and seeking
compensatory and punitive damages under 42 U.S.C.
S 1983.

On July 30, 1998, the District Court reversed the ALJ's
decision that Ridgewood had not provided M.E. a free
appropriate education. The District Court also held that the
ALJ should not have considered Dr. Balaban's November 4,
1996 letter because Ridgewood never consented to its
admission and because Ridgewood had not been given a
"full and fair opportunity" to cross-examine Dr. Balaban on
the portions of the letter that contradicted her live
testimony before the ALJ.

In finding that Ridgewood had provided M.E. a free
appropriate public education, the District Court stated that
IDEA requires only that an IEP provide a disabled student
with "more than a trivial educational benefit" and, relying
on the testimony of Ridgewood's witnesses and Dr.
Balaban, concluded that Ridgewood's IEP had done so. The
District Court found that Dr. Balaban never characterized
M.E.'s IEP as "inappropriate" but testified that the IEP
would provide M.E. with an educational benefit.

Because it reversed the ALJ's determination that
Ridgewood had not provided M.E. a free appropriate public
education, the District Court also reversed the ALJ's
decision that Ridgewood pay M.E.'s tuition at Landmark,
stating that even if M.E.'s IEP were inappropriate, no
evidence suggested that he could not be educated in a
public setting.

The District Court affirmed the ALJ's decision to deny
M.E. compensatory education and reimbursement for
tutoring expenses. It rejected the ALJ's conclusion that
compensatory education requires bad faith, stating our
opinion in Carlisle Area School District v. Scott P., 62 F.3d
520 (3d Cir. 1995) established the right to compensatory
education once the school district knows or should have
known its IEP has failed. But the District Court held M.E.
had no right to compensatory education because M.E.'s IEP
had not been a failure. At the same time, the District Court
dismissed M.E.'s request for expenses and costs in the
administrative proceedings because M.E. was no longer the
prevailing party.

                               8
The District Court also granted Ridgewood summary
judgment on M.E.'s third-party complaint seeking
compensatory and punitive damages under 42 U.S.C.
S 1983. M.E.'s S 1983 claims asserted violations of S 504 of
the Rehabilitation Act of 1973, the equal protection clause
of the Fourteenth Amendment, 42 U.S.C. S 1985 and IDEA.
The District Court dismissed M.E.'s S 504 claims because
he had not demonstrated he was " `excluded from
participation in, denied the benefits of, or subject to
discrimination at, the school' " and dismissed his S 1985
claim because he had not shown that the alleged violation
of his rights was motivated by "racial or `otherwise class-
based' animus." It dismissed M.E.'s IDEA claims because it
determined Ridgewood had fully complied with IDEA. In
addition, the District Court held all of M.E.'s third-party
claims failed "to overcome the qualified immunity enjoyed
by municipal employees sued in their individual capacity."

M.E. appealed to this court on August 26, 1998. Before
we heard argument, the District Court on September 1,
1998 enjoined implementation of its July 30 order, an act
that kept M.E. enrolled in Landmark at Ridgewood's
expense. On September 9, a motions panel of this court
stayed the District Court's September 1 order, which
effectively reinstated the District Court's July 30 order. But
M.E. remained at Landmark pursuant to an agreement
between his parents and the school. At oral argument on
November 4, 1998, M.E. asked this panel to require
Ridgewood to pay his Landmark expenses. After oral
argument, we ordered Ridgewood to comply with the
District Court's September 1 order and pay M.E.'s tuition,
residential and transportation costs at Landmark. M.E.
remains at Landmark at the present time.

III.

A.

The initial question is whether the District Court erred in
deciding that Ridgewood's 1996-97 IEP provided M.E. with
a free appropriate education.4 We review the grant of
_________________________________________________________________

4. In his brief, M.E. contends the District Court applied an improper
standard of review to the ALJ's decision that his 1996-97 IEP was

                               9
summary judgment under a plenary standard. See In re
Chambers Dev. Co., 148 F.3d 214, 229 n.12 (3d Cir. 1998).

Congress enacted the Individuals with Disabilities
Education Act ("IDEA"), 20 U.S.C.A. S 1400 et seq., to assist
states in educating disabled children. In order to receive
funding under IDEA, a state must provide all disabled
students with a "free appropriate public education." 20
U.S.C.A. S 1412(1) (Supp. 1998).5 This education must be
tailored to the unique needs of the disabled student
through an individualized educational program ("IEP"). See
Board of Educ. v. Rowley, 458 U.S. 176, 181-82 (1982).

IDEA leaves to the courts the task of interpreting "free
appropriate public education." See Rowley, 458 U.S. at
188-89. The Supreme Court began this task in Board of
Education v. Rowley, 458 U.S. 176 (1982), holding that
while an IEP need not maximize the potential of a disabled
student, it must provide "meaningful" access to education,
id. at 192, and confer "some educational benefit" upon the
child for whom it is designed. Id. at 200. In determining the
quantum of educational benefit necessary to satisfy IDEA,
the Court explicitly rejected a bright-line rule. Noting that
children of different abilities are capable of greatly different
achievements, the Court instead adopted an approach that
requires a court to consider the potential of the particular
disabled student before it. See id. at 202; see also Hall v.
Vance Cty. Bd. of Educ., 774 F.2d 629, 635 (4th Cir. 1985)
(stating that Rowley holds that "no single substantive
standard can describe how much educational benefit is
sufficient to satisfy [IDEA]").

We first interpreted the phrase "free appropriate public
_________________________________________________________________

inappropriate. Because we will vacate the District Court's judgment that
the IEP was appropriate, we need not determine whether the District
Court applied the proper standard of review to the ALJ's decision.

5. IDEA defines "children with disabilities" as children who need special
education because of "mental retardation, hearing impairments including
deafness, speech or language impairments, visual impairments including
blindness, serious emotional disturbance, orthopedic impairments,
autism, traumatic brain injury, other health impairments, or specific
learning disabilities." 20 U.S.C.A. S 1401(a)(1)(A)(i) (Supp. 1998).

                               10
education" in Board of Education v. Diamond, 808 F.2d 987
(3d Cir. 1986), when we rejected the notion that the
provision of any educational benefit satisfies IDEA, holding
that IDEA "clearly imposes a higher standard." Id. at 991.
Examining the quantum of benefit necessary for an IEP to
satisfy IDEA, we held in Polk v. Central Susquehanna
Intermediate Unit 16, 853 F.2d 171 (3d Cir. 1988), that
IDEA "calls for more than a trivial educational benefit" and
requires a satisfactory IEP to provide "significant learning,"
id. at 182, and confer "meaningful benefit." Id. at 184. We
also rejected the notion that what was "appropriate" could
be reduced to a single standard, id., holding the benefit
"must be gauged in relation to the child's potential." Id. at
185. When students display considerable intellectual
potential, IDEA requires "a great deal more than a
negligible [benefit]." Id. at 182.

As noted, the District Court held that an IEP need only
provide "more than a trivial educational benefit" in order to
be appropriate, equating this minimal amount of benefit
with a "meaningful educational benefit." But the standard
set forth in Polk requires "significant learning" and
"meaningful benefit." The provision of merely "more than a
trivial educational benefit" does not meet these standards.

It appears also that the District Court may not have given
adequate consideration to M.E.'s intellectual potential in
arriving in its conclusion that Ridgewood's IEP was
appropriate. Although its opinion discussed the IEP in
considerable detail, it did not analyze the type and amount
of learning of which M.E. is capable. As we have discussed,
Rowley and Polk reject a bright-line rule on the amount of
benefit required of an appropriate IEP in favor of an
approach requiring a student-by-student analysis that
carefully considers the student's individual abilities.

Therefore we will vacate the judgment of the District
Court on this issue and remand for proceedings consistent
with this opinion.6
_________________________________________________________________

6. We see no error in the District Court's decision to strike Dr.
Balaban's
November 4, 1996 letter for the reasons stated by the District Court.

                               11
B.

Because we have vacated the District Court's judgment
that Ridgewood provided M.E. with a free appropriate
public education, we must review all the judgments that
flow from it, specifically, that M.E. was not entitled to
placement at Landmark, that he was not entitled to
compensatory education, that he was not entitled to
expenses and costs as the prevailing party at the
administrative hearing and that he could assert no third-
party claims under 42 U.S.C. S 1983.

1. Placement at Landmark

The District Court held that Ridgewood was not required
to pay M.E.'s tuition at Landmark for the 1996-1997 school
year because his IEP had provided him a free appropriate
public education. But even if M.E.'s IEP were inappropriate,
the District Court said there was no "evidence in the record
suggesting that it is not appropriate to provide educational
services for [M.E.] in a public setting." M.E. contends the
District Court's approach requires a student seeking private
placement to show not only that private placement is
appropriate but also that all public placements are
inappropriate. This approach, he argues, places an
impossible burden on the student. We are not convinced
that M.E. correctly interpreted the District Court's holding.
Nonetheless, we do not believe that IDEA requires the
student to prove that all public placements are
inappropriate.

To determine when a disabled student is entitled to a
private placement, we look to Florence County School
District Four v. Carter, 510 U.S. 7 (1993), in which the
Supreme Court held that a student may be entitled to
reimbursement if "a federal court concludes both that the
public placement violated IDEA and that the private school
placement was proper under [IDEA]." Id. at 15. Under
Florence County, a court may award a disabled student the
cost of his private placement if (1) the court determines the
student's IEP is inappropriate and (2) the student
demonstrates that the private placement he seeks is proper.
See Walczak v. Florida Union Free Sch. Dist., 142 F.3d 119,

                               12
129 (2d Cir. 1998).7 A private placement may be proper if
it is appropriate and provided in the least restrictive
educational environment. See Oberti v. Board of Educ., 995
F.2d 1204, 1213 (3d Cir. 1993). To meet the Florence
County standard, a disabled student is not required to
demonstrate that he cannot be educated in a public setting.
Under IDEA, the relevant question is not whether a student
could in theory receive an appropriate education in a public
setting but whether he will receive such an education. We
note the ALJ concluded that Landmark would remain
appropriate until Ridgewood offered an appropriate IEP.

Ridgewood contends that the "least restrictive educational
environment" requirement bars M.E. from attending
Landmark because Landmark's residential program is more
restrictive than Ridgewood's. Under this approach, M.E.
could receive an inappropriate education in Ridgewood's
schools but be denied a private placement because it is
more restrictive than placement in a Ridgewood public
school. But IDEA requires that disabled students be
educated in the least restrictive appropriate educational
environment.8 See Oberti v. Board of Educ., 995 F.2d 1204,
1213 (3d Cir. 1993) (stating that IDEA requires an
education to be appropriate and provided in the least
restrictive educational environment); Kruelle v. New Castle
Cty. Sch. Dist., 642 F.2d 687, 695 (3d Cir. 1981) (stating
that inappropriate educational environments are not
relevant for "least restrictive environment" analysis); see
also Cleveland Heights-University Heights City Sch. Dist. v.
Boss, 144 F.3d 391, 400 (6th Cir. 1998) (holding that
private school's failure to satisfy least restrictive
environment requirement does not bar parents' claim for
_________________________________________________________________

7. We note that the District Court has the discretion to determine the
appropriate amount of reimbursement. See Florence County, 510 U.S. at
16 (stating that reimbursement is equitable relief to be awarded after
consideration of all relevant factors). For example, the student cannot
receive total reimbursement if the fees of the private school are
unreasonable.

8. We also note that the appropriateness of a private placement is
evaluated by the same standard set forth in part III.A. of this opinion.
In
other words, parents of a disabled student need not seek out the perfect
private placement in order to satisfy IDEA.

                               13
reimbursement); Board of Educ. of Murphysboro v. Illinois
Bd. of Educ., 41 F.3d 1162, 1168 (7th Cir. 1994) (stating
that the least restrictive environment requirement"was not
developed to promote integration with non-disabled peers at
the expense of other IDEA educational requirements" and
does not apply unless education is appropriate).

We are unable to determine if the District Court applied
this standard in concluding M.E. was not entitled to
placement at Landmark and therefore will remand this
issue to the District Court for reconsideration.

2. Compensatory Education

Under IDEA, a disabled student is entitled to a free
appropriate public education until the student reaches age
twenty-one. See 20 U.S.C.A. S 1412(2)(B). An award of
compensatory education allows a disabled student to
continue beyond age twenty-one in order to make up for the
earlier deprivation of a free appropriate public education.
See M.C. v. Central Reg. Sch. Dist., 81 F.3d 389, 395 (3d
Cir. 1996). In Carlisle Area School District v. Scott P., 62
F.3d 520 (3d Cir. 1995), we declined to state a precise
standard for the award of compensatory education, but
noted that most of our cases awarding compensatory
education involve egregious circumstances or the flagrant
failure to comply with IDEA. Id. at 536-37. One year later,
in M.C. v. Central Regional School District, we "flesh[ed] out
the standard left sparse by Carlisle" and held that the right
to compensatory education accrues when the school knows
or should know that its IEP is not providing an appropriate
education. See M.C., 81 F.3d at 396. We specifically
rejected a bad faith or egregious circumstances standard,
stating that "a child's entitlement to special education
should not . . . be abridged because the [school] district's
behavior did not rise to the level of slothfulness or bad
faith." Id. at 397.

Applied narrowly, M.C.'s "inappropriate IEP" requirement
might prohibit the award of compensatory education for
years in which a disabled student received an inappropriate
education via means other than an IEP.9 But we do not
_________________________________________________________________

9. In M.C., we stated that "the right to compensatory education should
accrue from the point that the school district knows or should know of

                               14
think the M.C. court intended such an application because
it held the denial of an appropriate education--and not
merely the denial of an appropriate IEP--creates the right
to compensatory education. See M.C., 81 F.3d at 391-92 ("A
school district that knows or should know that a child has
an inappropriate [IEP] or is not receiving more than a de
minimis benefit must, of course, correct the situation. We
hold that . . . a disabled child is entitled to compensatory
education for a period equal to the deprivation."); id. at 395
(citation omitted) ("Under IDEA, a disabled student is
entitled to free, appropriate education until he or she
reaches age twenty-one. A court award of compensatory
education requires a school district to . . . make up for any
earlier deprivation."). IDEA's central goal is that disabled
students receive an appropriate education, not merely an
appropriate IEP. Therefore, a disabled student's right to
compensatory education accrues when the school knows or
should know that the student is receiving an inappropriate
education.

The District Court rejected M.E.'s request for
compensatory education and reimbursement for tutoring
because it believed those remedies were available only when
an IEP was inappropriate. As noted, it concluded that
M.E.'s 1996-97 IEP was appropriate. M.E. maintains that
he never received a free appropriate public education from
Ridgewood and that he presented substantial evidence that
Ridgewood knew or should have known he was disabled
shortly after he enrolled at the Orchard School in 1988. He
contends that the District Court erred as a matter of law
when it dismissed his claim for compensatory education
from 1988 to 1997 after a finding that M.E. had received a
free appropriate education during the 1996-97 school year.
He also contends his parents are entitled to reimbursement
for $6,400 in tutoring expenses incurred from 1989 to
1992.
_________________________________________________________________

the IEP's failure," M.C., 81 F.3d at 396, and that an "award of
compensatory education require[s] a finding that an IEP was
inappropriate." Id. at n.6. The M.C. court did not have to consider
whether compensatory education was awardable for years in which a
disabled student had no IEP because the plaintiff did not ask for
compensatory education for such years.

                               15
Ridgewood responds that M.E. cannot recover
compensatory education because he received a free
appropriate public education. It also contends there is no
evidence of culpable conduct or egregious circumstances,
asserting it provided M.E. with extensive assistance.
Further, Ridgewood argues M.E.'s parents' failure to object
to his programs and placements from 1988 to 1996 created
"presumptively a free and appropriate education" during
those years and bars claims for compensatory education.
Finally, Ridgewood asserts that all compensatory education
claims involving events that occurred more than two years
ago are barred by a two-year statute of limitations adopted
by this court in Jeremy H. v. Mount Lebanon School District,
95 F.3d 272 (3d Cir. 1996).

Whether Ridgewood's 1996-97 IEP provided M.E. with an
appropriate education will be decided by the District Court
on remand. As we stated in M.C., an award of
compensatory education does not require a finding of bad
faith or egregious circumstances. See M.C., 81 F.3d at 397.
Furthermore, failure to object to M.E.'s placement does not
deprive him of the right to an appropriate education. In
M.C., we held that "a child's entitlement to special
education should not depend upon the vigilance of the
parents." See M.C., 81 F.3d at 396. Finally, Ridgewood's
statute of limitations argument lacks merit and its reliance
on Jeremy H. is misplaced. In Jeremy H. we expressly
declined to choose a statute of limitations for IDEA actions,
see Jeremy H., 95 F.3d at 280 n.15 ("We . . . need not, and
do not, decide between a two-year and a six-year limitations
period."), but decided the limitations period begins to run
"once the state administrative process has run its course."
Id. at 280. Also, Jeremy H. considered the appropriate
statute of limitations for IDEA claims brought in
Pennsylvania, not New Jersey. See Wilson v. Garcia, 471
U.S. 261, 266-67 (1985) (stating that if a federal statute
does not specify a statute of limitations, courts apply the
relevant statute of limitations of the forum state); Beauty
Time, Inc. v. Vu Skin Sys. Inc., 118 F.3d 140, 144 (3d Cir.
1997) (same); Tokarcik v. Forest Hills Sch. Dist., 665 F.2d
443, 448 (3d Cir. 1981) (same).

In assessing the statute of limitations governing a

                               16
compensatory education claim brought in New Jersey, we
must determine the most analogous cause of action under
New Jersey law. An analogous cause of action is a "claim[ ]
against [a] public entity" alleging "injury or damage to
person," N.J. Stat. Ann. S 59:8-8, under the New Jersey
Tort Claims Act, in which the statute of limitations is two
years.10 We have previously held that IDEA claims closely
resemble actions to recover damages for injuries caused by
another. See Tokarcik, 665 F.2d at 454. Another analogous
cause of action might be a basic personal injury claim,
which also carries a two-year statute of limitations. See
N.J. Stat. Ann. S 2A:14-2.

Because M.E. brought his claim for compensatory
education within either statute of limitations, we need not
decide whether his claim is more analogous to a Tort
Claims Act claim or a basic personal injury claim. Under
either cause of action, the statute begins to run once
plaintiff 's cause of action accrues. See N.J. Stat. Ann.
S 59:8-8; N.J. Stat. Ann. S 2A:14-2. As noted, Jeremy H.
held that a federal IDEA claim accrues at the conclusion of
the state administrative process. See Jeremy H., 95 F.3d at
280. The limitations period for M.E.'s claim began to run on
November 27, 1996, when the ALJ issued her ruling, and
M.E. filed his complaint on July 3, 1997.

Therefore we conclude the District Court erred when it
dismissed M.E.'s claim for compensatory education for the
years 1988-1996 on a finding that his 1996-1997 IEP was
appropriate. The appropriateness of M.E.'s 1996-1997
education is irrelevant to the appropriateness of his
education from 1988 to 1996.11 In addition, our decision to
vacate the judgment that M.E.'s 1996-1997 IEP was
appropriate compels us to vacate the grant of summary
_________________________________________________________________

10. Such a claim must be brought against a "public entity", which
includes "any county, municipality, district, public authority, public
agency and any other . . . public body in the State." N.J. Stat. Ann.
S 59:1-3. Ridgewood meets this definition.

11. Because the dismissal of M.E.'s claim for 1989-1992 tutoring
expenses was also based on the conclusion that the 1996-97 IEP was
appropriate, we will vacate the dismissal of tutoring expenses claim and
remand it to the District Court.

                               17
judgment on M.E.'s claim for compensatory education for
the 1996-1997 school year. On remand, the District Court
should determine whether M.E. received an appropriate
education in each school year and, if it concludes he did
not, determine when Ridgewood knew or should have
known of that fact.

3. Costs and Fees at the Administrative Hearing

A plaintiff may obtain fees and costs when he "prevails,"
or obtains merits-based relief that " `materially alters the
legal relationship between the parties by modifying the
defendant's behavior in a way that directly benefits the
plaintiff.' " D.R. v. East Brunswick Bd. of Educ., 109 F.3d
896, 902 (3d Cir. 1997) (quoting Farrar v. Hobby, 506 U.S.
103, 112 (1992)). The District Court denied M.E.'s request
for costs and fees because its reversal of the ALJ's decision
meant that M.E. was no longer a prevailing party. Our
decision to vacate the District Court's reversal requires that
we vacate and remand the denial of fees and costs.

4. Third-Party Claims Under 42 U.S.C. S 1983

42 U.S.C. S 1983 does not confer substantive rights but
"merely redresses the deprivation of . . . rights. . . created
by the Constitution or federal statute." W.B. v. Matula, 67
F.3d 484, 493 (3d Cir. 1995). In other words, a S 1983 suit
must allege the violation of a federal right provided
elsewhere. The District Court granted Ridgewood summary
judgment on all of M.E.'s third-party claims because it
concluded the third-party complaint asserted individual
capacity claims against which the third-party defendants
enjoyed qualified immunity. It also held that many of the
claims were subject to dismissal on other grounds.

In reviewing the grant of summary judgment, we apply
the same standards as does a District Court. We will affirm
the grant of summary judgment only if there is no genuine
issue of material fact and the movant is entitled to
judgment as a matter of law. See Newport Assocs. Dev. Co.
v. Travelers Indemnity Co., 162 F.3d 789 (3d Cir. 1998).
Once the moving party points to evidence demonstrating no
issue of material fact exists, the non-moving party has the

                               18
duty to set forth specific facts showing that a genuine issue
of material fact exists and that a reasonable factfinder
could rule in its favor. See Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574 (1986); Groman v.
Township of Manalapan, 47 F.3d 628, 633 (3d Cir. 1995).
Speculation and conclusory allegations do not satisfy this
duty. Groman, 47 F.3d at 637.

a. Nature of Third-Party Complaint

In order to prevail on a S 1983 suit brought against
defendants in their official capacity, the plaintiff must
establish that the deprivation of his rights was the result of
an official policy or custom. See Board of Cty. Comm'rs v.
Brown, 520 U.S. 397, 400 (1997); Monell v. New York City
Dept. of Soc. Servs., 436 U.S. 658, 691 (1978).

The District Court held that M.E. provided no evidence
that third-party defendants acted pursuant to a municipal
policy. M.E. contends his third-party complaint was"clearly
brought against third-party defendants in both their
individual and official capacities" and that the third-party
defendants acted pursuant to "some policy or custom" of
Ridgewood. We disagree. M.E. has provided no evidence
that Ridgewood's policy is to ignore the responsibilities
imposed by IDEA. Rather the evidence presented was that
Ridgewood failed to fulfill its responsibilities. Therefore we
will affirm the order of the District Court granting summary
judgment on this issue.

b. IDEA Claims

Initially we note that the Court of Appeals for the Fourth
Circuit recently held that a plaintiff may not sue under 42
U.S.C. S 1983 for IDEA violations because"IDEA provides a
comprehensive remedial scheme for violations of its own
requirements." Sellers v. School Board, 141 F.3d 524, 529
(4th Cir. 1998). But we must follow our decision in W.B. v.
Matula, 67 F.3d 484 (3d Cir. 1995), which held that IDEA
claims may be actionable under S 1983. The District Court
entered summary judgment on M.E.'s S 1983 claims
alleging IDEA violations because it held Ridgewood had
"fully complied" with IDEA. M.E. contends the District

                               19
Court erred when it entered summary judgment on his
IDEA claims alleging violations from 1988 to September
1996 on a finding that his 1996-97 IEP was appropriate. He
claims that from 1988 to 1996 Ridgewood failed in its
obligation to timely evaluate him, to inform his parents of
their rights and to provide him with special education.

Because the District Court discussed only the 1996-97
school year, it would appear that the grant of summary
judgment on M.E.'s IDEA claims was based solely on a
finding that the 1996-97 IEP was appropriate. Because a
satisfactory 1996-97 IEP has no bearing on whether
Ridgewood complied with IDEA before the 1996 school year,
we will vacate the grant of summary judgment on M.E.'s
IDEA claims.

c. Section 504 Claims

The Rehabilitation Act of 1973, 29 U.S.C. S 701 et seq.
(Supp. 1998), prohibits discrimination on the basis of
disability in federally funded programs. In order to
establish a violation of S 504 of the Rehabilitation Act, a
plaintiff must prove that (1) he is "disabled" as defined by
the Act; (2) he is "otherwise qualified" to participate in
school activities; (3) the school or the board of education
receives federal financial assistance; and (4) he was
excluded from participation in, denied the benefits of, or
subject to discrimination at, the school. W.B. v. Matula, 67
F.3d 484, 492 (3d Cir. 1995) (quoting Nathanson v. Medical
Coll. of Pennsylvania, 926 F.2d 1368, 1380 (3d Cir. 1991)).
In addition, the plaintiff must demonstrate that defendants
know or should be reasonably expected to know of his
disability. See id. But a plaintiff need not prove that
defendants' discrimination was intentional. See id. We have
held that there are few differences, if any, between IDEA's
affirmative duty and S 504's negative prohibition and have
noted that the regulations implementing S 504 require that
school districts "provide a free appropriate education to
each qualified handicapped person in [its] jurisdiction." Id.
at 492-93.

The District Court granted Ridgewood summary
judgment on M.E.'s S 504 claim[s] because it found "no

                               20
evidence . . . that M.E. `was excluded from participation in,
denied the benefits of, or subject to discrimination' " at
Ridgewood schools. M.E. argues that Ridgewood violated
S 504 when it failed to identify him as learning disabled,
when it failed to inform his parents of Ridgewood's IDEA
responsibilities and when it failed to provide him a free
appropriate public education.

We believe M.E. has presented evidence demonstrating
that a genuine issue of fact exists. In W.B. v. Matula, we
held that a school's failure to notify parents of its IDEA
duties could violate S 504, see Matula, 67 F.3d at 501 n.13,
and also held that S 504 imposes a "childfind" duty, or the
duty to identify a disabled child "within a reasonable time
after school officials are on notice of behavior that is likely
to indicate a disability." Id. at 500-01. In addition, the
failure to provide a free appropriate public education
violates IDEA and therefore could violate S 504. See id. at
492-93 (stating that IDEA and S 504 impose nearly
identical duties and noting that S 504's implementing
regulations require that schools provide a "free appropriate
public education"). Therefore we will vacate the District
Court's grant of summary judgment on M.E.'s S 504 claims
and remand for proceedings consistent with this opinion.12

d. Section 1985 Conspiracy Claim

42 U.S.C. S 1985(3) prohibits conspiracies predicated on
"racial, or perhaps otherwise class-based, invidiously
discriminatory animus." Griffin v. Breckenridge, 403 U.S.
88, 102 (1971). In order to state a claim under 42 U.S.C.
S 1985(3), the plaintiff must allege "(1) a conspiracy; (2)
motivated by a racial or class based discriminatory animus
_________________________________________________________________

12. M.E.'s S 504 claims assert both procedural and substantive
violations. In a footnote, the District Court stated "[t]he ALJ determined
that [Ridgewood] had complied with IDEA's procedural requirements.
This Court finds that the ALJ's conclusion is supported by a
preponderance of the evidence in the record." We do not read the ALJ's
opinion as finding that Ridgewood complied with IDEA's procedural
requirements. The ALJ merely concluded that any procedural violations
did not involve bad faith. We do not think this conclusion supports a
finding that Ridgewood complied with IDEA's procedural requirements.

                               21
designed to deprive, directly or indirectly, any person or
class of persons . . . [of] the equal protection of the laws; (3)
an act in furtherance of the conspiracy; and (4) an injury to
person or property or the deprivation of any right or
privilege of a citizen of the United States." Lake v. Arnold,
112 F.3d 682, 685 (3d Cir. 1997). In Lake, we held that the
mentally retarded are a class protected by S 1985(3), but we
expressly declined to make this determination with respect
to handicapped persons. See id. at 685-86 & n.5.

The District Court granted summary judgment on M.E.'s
S 1985 claim because it found no evidence that suggested
the alleged violation of M.E.'s rights was motivated by racial
or "otherwise class-based" animus. We agree. Even were we
to decide that S 1985 protects the disabled in general, there
is no evidence that Ridgewood's alleged actions were
motivated by discriminatory animus towards the disabled.

e. Section 1983 Conspiracy Claim

Count Seven of M.E.'s complaint also alleges a S 1983-
only conspiracy. In order to prevail on a conspiracy claim
under S 1983, a plaintiff must prove that persons acting
under color of state law conspired to deprive him of a
federally protected right. See Dennis v. Sparks, 449 U.S. 24,
29 (1980); Lake v. Arnold, 112 F.3d 682, 689 (3d Cir.
1997). Unlike S 1985(3), a S 1983 conspiracy claim does not
require that the conspiracy be motivated by invidious
discrimination.

We will affirm the grant of summary judgment on this
claim. M.E. has not demonstrated that a genuine issue of
material fact exists. At most he has supplied ambiguous
allegations and vague inferences that cannot defeat
summary judgment. See Groman, 47 F.3d at 633.

f. Qualified Immunity

A municipal official sued in his individual capacity enjoys
qualified immunity if his conduct "does not violate clearly
established statutory or constitutional rights of which a
reasonable person would have known." W.B. v. Matula, 67
F.3d 484, 499 (3d Cir. 1995) (quoting Harlow v. Fitzgerald,

                               22
457 U.S. 800 (1982)). To defeat qualified immunity in an
IDEA action, the plaintiff must show that " `the particular
actions taken by defendants were impermissible under law
established at that time.' " Matula, 67 F.3d at 500 (quoting
P.C. v. McLaughlin, 913 F.2d 1033, 1040 (2d Cir. 1990)). We
review the grant of qualified immunity de novo. See Torres
v. McLaughlin, 163 F.3d 169, 170 (3d Cir. 1998).

The District Court held that the third-party defendants
could assert qualified immunity because there was not
"even a scintilla of evidence from which a reasonable fact-
finder could infer that the third-party defendants violated
M.E.'s clearly established federal rights". Because we
addressed qualified immunity in IDEA claims in W.B. v.
Matula, 67 F.3d 484 (3d Cir. 1995), we will vacate and
remand so that the District Court may reconsider its
decision in light of Matula.

g. State Law Claims

The District Court dismissed M.E.'s state law claims
alleging violations of the New Jersey Law Against
Discrimination and the New Jersey Constitution's
guarantee of a thorough and efficient education because it
determined third-party defendants enjoyed qualified
immunity. Because we have vacated the decision that third-
party defendants enjoy qualified immunity, we will vacate
the dismissal of M.E.'s state law claims.

IV.

For these reasons, the judgment is affirmed in part and
vacated and remanded in part.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

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