Appeal from the United States District Court for the District of Oregon. Owen M. Panner, District Judge, Presiding. D.C. No. 1:07-cv-03019-CL.
The opinion of the court was delivered by: O'scannlain, Circuit Judge
Argued and Submitted October 8, 2009 -- Portland, Oregon
Before: Diarmuid F. O'Scannlain and N. Randy Smith, Circuit Judges, and Ronald M. Whyte,*fn1 District Judge.
In this action under the Individuals with Disabilities Education Act, we must decide the extent to which a district court must defer to a state hearing officer's decision to order a school district to reimburse a student's parents for the cost of a private education.
E.H.,*fn2 a student in the Ashland School District ("ASD"), first began suffering from emotional problems in 1998, while in the third grade. At the same time, E.H. began exhibiting difficulty with peer integration, was teased by other children, and developed migraine headaches. By 2000, E.H.'s fifth-grade year, the migraines became so severe that E.H.'s parents ("Parents") hospitalized their child. E.H.'s treating physician determined that the child was suffering from anxiety and depression, and that the migraines had a medical origin but were triggered by psychological factors.
At this time, ASD identified E.H. as eligible for special education services and developed an individualized education program ("IEP"), as required by the Individuals with Disabilities Education Act ("IDEA"). 20 U.S.C. § 1414(d). After ASD implemented this IEP, E.H. repeated the fifth grade, with improved results.
Throughout sixth grade and the first two trimesters of seventh grade, E.H. maintained strong academic performance, and even participated in a program at Southern Oregon Uni- versity for talented and gifted children. During the latter part of seventh grade, however, E.H. became depressed, began to talk about suicide, and suffered from frequent migraines that ultimately required hospitalization in the spring of 2003.
During eighth grade-the 2003 to 2004 school year-E.H. attended one class a day at Ashland Middle School, and spent the remainder of the school day at Willow Wind, an ASD-operated alternative education program. In September of that school year, ASD provided Parents with a twenty-three-page pamphlet that outlined their rights and responsibilities under the IDEA. Among other things, this pamphlet notified them that a court or hearing officer might refuse to reimburse them for private school costs if they failed to notify ASD of their objections to the IEP prior to private school enrollment. In late April 2004, near the end of E.H.'s eighth grade year, ASD held an IEP team meeting to consider strategies to smooth the transition to high school the following school year. Over the summer, E.H. was hospitalized on two occasions for suicide attempts. By this time, E.H.'s treating physicians and therapists were recommending residential treatment, rather than ordinary public school, to address E.H's persistent emotional and medical problems.
In September 2004, shortly after E.H.'s second discharge from the hospital, ASD reconvened its team to draft a new IEP. Parents indicated their desire to enroll E.H. in Willow Wind, as they had done the previous school year, but the program declined because it was unable to monitor the child closely enough to prevent another suicide attempt. Thus, ASD's personnel wrote a modified IEP for the next school year, to which Parents did not object. Although Parents enrolled E.H. full time at Ashland High School in the fall of 2004, they indicated to ASD that they were actively searching for a residential facility in which to place their child.
By late November 2004, E.H.'s emotional problems resur-faced. Parents and ASD agreed that homebound instruction was appropriate, and ASD provided a tutor. ASD did not draft a new IEP because it believed that the home placement was only temporary pending the child's transfer to a private residential facility. In December 2004, E.H. was once again hospitalized for suicidal tendencies and threatening to injure family members. E.H. briefly returned to Ashland High School for a total of twelve days between December 14, 2004, and January 24, 2005. On January 24, Parents transferred E.H. from Ashland High School to Youth Care, a private out-of-state residential treatment program. Prior to this transfer, Parents never indicated any dissatisfaction with the education ASD provided the child, and ASD never volunteered that, under some circumstances, it was obligated to pay for residential educational facilities.
Youth Care operates several private residential educational facilities that provide both medical and educational support to enrolled students. E.H. initially attended its principal residential treatment program, located near Salt Lake City, Utah. Youth Care's treatment plan listed E.H.'s significant mental health challenges as chronic depression, repeated suicide attempts, and a homicidal fixation on E.H.'s father and sister. Youth Care provided psychological care, intensive counseling, and educational support sessions. In July 2005, Parents and Youth Care agreed to transfer E.H. to Youth Care's Pine Ridge facility, which offered less intensive psychological treatment.
On September 8, 2005-after E.H. had been enrolled in Youth Care for approximately seven months-Parents mailed ASD a formal letter indicating that they were unhappy with the educational services it had provided and requesting reimbursement for the cost of the residential placement. After receiving this letter, ASD convened a meeting to draft a new proposed IEP. Parents rejected that IEP in late January 2006, and requested a due process hearing before a state hearing officer to determine whether ASD had provided E.H. with a free appropriate public education ("FAPE") and whether they were entitled to reimbursement for the costs of residential treatment.
The hearing officer concluded that the IEPs ASD offered in September 2004 and December 2005 did not provide E.H. with a FAPE, as required by the IDEA.*fn3 See 20 U.S.C. § 1400(d). The hearing officer further concluded that Youth Care did provide a FAPE and was therefore an appropriate placement. The hearing officer found that Parents had removed E.H. from Ashland High School without notifying ASD of their concerns with the education it was providing. Under Oregon Administrative Rule 581-015-0156(4) (2004)*fn4 -which required Parents to notify ASD of their concerns either at an IEP meeting or ten days prior to withdrawing E.H. -this failure permitted the hearing officer to deny or to reduce the amount of reimbursement.
For the period prior to September 18-ten days after Parents gave ASD notice of their objections to the IEP-the hearing officer ordered ASD to reimburse Parents for half of the cost of this residential program. He based this decision on three factors.
First, although Parents did not satisfy the notice requirement until September 8, 2005, ASD was aware they were exploring a possible residential placement by January 2004 at the very latest. In the hearing officer's opinion, this should have warned ASD that E.H. might need a residential placement, which should have prompted it to consider the possibility of such placement when drafting the IEPs. ASD felt that Parents were considering a residential placement because of E.H.'s medical, rather than educational, needs, and therefore it would not be obligated to pay for any residential treatment. The hearing officer determined that because E.H.'s educational and medical problems were intertwined, ASD was obligated to pay for residential treatment, and therefore discounted this explanation.
Second, the hearing officer determined that Parents' failure to complain about any of the IEPs cut in ASD's favor. The hearing officer felt that the impact of this failure was tempered, however, by ASD's failure to provide an appropriate IEP.
Third, the hearing officer felt that ASD's failure to notify Parents of its possible obligation to pay for residential care also weighed in favor of granting reimbursement. ASD was aware that Parents were considering a residential program long before Parents placed E.H. in such a program, but did not inform them of its potential responsibility to pay for that placement. ASD had, on earlier occasions, provided Parents with pamphlets describing their rights and obligations under the IDEA, but there was no evidence that Parents received a copy of this notice after September 2003. Thus, the hearing officer felt that Parents' failure to provide notice of their objections to the IEP was understandable, and concluded that the lack of notice did not heavily favor ASD.
The hearing officer also granted Parents full reimbursement for all residential care expenses for the period after September 18, 2005. Although Parents did not satisfy the notice requirement, he concluded that the foregoing considerations compelled requiring ASD to reimburse Parents. Moreover, because ASD had the statutorily required ten days notice with respect to this ...