Supreme Court Decision Muddies Disability Actions in Schools

On March 21, the US Supreme Court handed down a unanimous decision in Perez v. Sturgis Public Schools that significantly changed the landscape for claims brought pursuant to the Individuals with Disabilities Education Act and the Americans with Disabilities Act. While many questions are still unanswered, school districts need to anticipate some outcomes in these cases.

Until this ruling, parents and students were required to “exhaust administrative remedies” prior to filing suit and seeking damages if the “relief is also available under [the IDEA].” Thus, unless complainants exhausted all administrative remedies otherwise available under IDEA, they could not move forward with a civil action. This included monetary damages not available under IDEA.

In Perez, the Supreme Court reconsidered this requirement and reversed the 6th Circuit decision, holding that the exhaustion doesn’t apply to compensatory damages or prevent a complainant from proceeding directly to court to seek those damages without exhausting administrative remedies. This remains true even when the claims all relate to a denial of a Free Appropriate Public Education as defined by IDEA, which will cause a substantial change to how these cases have proceeded through the legal system.

Here, where the plaintiff sought monetary damages, including lost income, to compensate for alleged past violations of IDEA, Justice Neil Gorsuch explained that the exhaustion requirement applies only to suits that “see[k] relief … also available under” the IDEA. Because the relief being sought was specifically compensatory damages, not otherwise available under IDEA, the IDEA does not permit recovery of compensatory damages, and therefore, Perez was not seeking relief “available under” the IDEA. As such, the court held that Perez was not required to exhaust administrative remedies to seek those damages.

The confusion arises since the Supreme Court didn’t address whether the ADA allows the sorts of remedies sought under Perez ensuring confusion until the Courts address that particular issue head on. There is a wealth of authority that indicates Section 504 only allows relief traditionally available for breach of contract damages.

While we await the ramifications of Perez as courts move forward with applying the holding, K-12 school districts should consider some proactive measures in light of the ruling. Lawyers for school districts should advise these changes in assessing potential exposure for their clients.

Develop an Exposure Risk Analysis

While a risk analysis of any or potential claims is always a critical step when moving forward with all litigation, school districts should also analyze the specific risk for exposure for each claim and the relief sought, and determine how those may differ under the new ruling.

It will be important to assess the potential to prevail on each claim, and which claims could lead to remedies that are educational in nature, and which open a school district up to risk of compensatory damages. In this analysis, a consideration is the significant increase in litigation costs, which now could include a straight shot to federal court instead of going through the administration process. This analysis should be completed early to help advise school districts if settlement is the most advantageous route, prior to incurring extensive legal costs.

Outline Steps to Predict Resolution

Because these claims could be so much more costly, school districts should decide whether a lawsuit should be resolved quickly. If a claim can be resolved reasonably, school districts can mitigate the risk of a significant payout where risk for one exists. By identifying potential claims as early as possible (even before a lawsuit is filed), a school district can lessen the potential risk for claims. This may include using formal or informal dispute resolution processes.

Considerations Before Litigation

The longstanding cost benefit analysis has changed now that plaintiffs can immediately pursue compensatory damages in court without exhausting administrative remedies. Certainly, the biggest change in this analysis is the pure cost involved. Federal litigation is far more expensive than a due process hearing.

While due process hearings do not have a discovery process and are intended to be heard and decided within 45 days, proceedings in federal court are complex and take significantly more time—many months or even years.

Some considerations remain the same when school districts examine both the monetary and non-monetary effects of litigation, including taking staff way from students and the inevitable impact on all those involved. In situations where the student remains in the school district, it is often worth considering whether there is a way to move forward collaboratively and resolve the claim as the parties will still have to work together regardless of the outcome.

Assess the District’s Insurance Policy

In light of changes to the exhaustion requirement, lawyers for school districts need to provide guidance that there is a risk for an increase in litigation. It will be important for those districts that are covered by insurance to revisit the policies to ensure that they are prepared for potential litigation.

The case is Perez v. Sturgis Pub. Sch., 143 S. Ct. 859, 215 L. Ed. 2d 95 (2023), Court Opinion.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Beth Morris is counsel at Parker Poe. She represents school districts in Georgia and focuses her practice on issues involving children with disabilities.

Reagan Sauls is counsel at Parker Poe. She has represented school districts in Georgia since 2006, handling a wide variety of matters such as personnel matters and hearings.