Rejected Settlement Did Not Justify Post-Settlement Fees, Hourly Rate Reduction Justified, and Prior Consultant Determination Prevented Paralegal Fee Award.
Under the Individuals with Disabilities in Education Act (“IDEA”), attorney’s fees are awardable to prevailing plaintiffs, generally the parents of a child with a disability, in the discretion of the district court. But there are important caveats: they are not awardable (1) where the parents reject a settlement offer which is not more favorable to the relief finally obtained, or (2) parents had no substantial justification for the settlement rejection. Also, hourly rates must be commensurate with the rates charged by attorneys doing similar IDEA work. These principles were fully in play with respect to the Ninth Circuit’s review of a fee decision in Beauchamp v. Anaheim Union High School Dist., No. 14-56212 (9th Cir. Mar. 16, 2016) (published).
In this case, a district judge awarded $7,780 in IDEA fees to parent, substantially less than the $66,420 requested, reduced parent’s attorney’s rates from $450 to $400 and rejected a request for paralegal fees. The parent’s appeal did not change the result.
The first problem was that the relief ultimately obtained in a non-expedited hearing was not materially different than the relief made in the rejected settlement offer (after parent had relief obtained in an earlier expedited hearing phase affirmed in a previous appeal). Parent argued that she needed a merits ruling at the non-expedited phase in order to preserve the “win” on the expedited phase. However, the Ninth Circuit determined that the two phases were not legally dependent on each other, with the expedited phase focusing on a basis-of-knowledge issue and the non-expedited phase concentrating on a divergent “child-find” issue. Given that parent’s child was actually receiving special education services from the school district, there was a true “disconnect” between the two-phased determinations, with parent’s rejecting the settlement offer for an ill-conceived strategic reason. The federal appeals court also found no substantial justification for rejecting what it viewed as an unambiguous offer, but also counseling IDEA plaintiffs that they are free to ask for clarification of an offer or make a counteroffer in order to avoid a finding that a rejection was made without substantial justification. In the end, that justified not awarding a lot of post-settlement offer fees to parents.
With respect to the amount of fees awarded, there was no problem with reducing hourly rates from $450 to $400 per hour. That was correct because the petitioning attorney failed to differentiate lower rate administrative work from other district court/appellate work, with prior fee awards supporting the lower hourly rate.
Finally, the prior expedited determination that a paralegal was instead a consultant ended any dispute over not awarding parents’ time for the work of a “paralegal” who was not really found to be a paralegal. (Interestingly, consultants cannot be compensated under an IDEA “costs” rubric.) Lower court result affirmed in entirety.