U.S. Supreme Court Ruling on IDEA Requires More Than “Some” Educational Benefit

Parents of students with disabilities may be rethinking their child’s educational plan after a recent U.S. Supreme Court ruling on IDEA. In Endrew F., et al. v. Douglas County School District (No. 15-827), the Court ruled that students are entitled to an IEP that is “reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances.”

At issue in Endrew was the level of educational benefit that public schools must provide to students under the federal Individuals with Disabilities Education Act (IDEA).  The Act guarantees children with disabilities a “free appropriate public education.”  The Act does not, however, say what is an appropriate level of progress.

Case History

The case revolved around Colorado parents who took their son, Endrew, out of public school because they felt he was not making adequate progress under the individualized education plan (IEP).  The parents enrolled Endrew in private school, where he made better progress. They then sued the school district to pay the cost of his private school.

The school district refused to pay.  They contended that as long as Endrew was making some progress in the public school, his IEP was sufficient.  Endrew’s parents appealed that decision.  They argued that the district should provide a substantial and meaningful educational benefit to a child with a disability.  Jeffrey Fisher, attorney for Endrew, said that IDEA requires schools to provide an “equal educational opportunity” for children with disabilities, or an “equally challenging curriculum on the academic side” to meet their functional and developmental goals.

Legal Battle

The parents lost at every level of appeal, with the U.S. Court of Appeals for the Tenth Circuit ruling that instruction and services furnished to children with disabilities need only confer “some educational benefit.”

The Supreme Court agreed to hear the parents’ appeal. Finally, on March 22, it unanimously overturned the lower court and ruled in the parents’ favor.

Supreme Court Ruling on IDEA

“When all is said and done,” Chief Justice John Roberts wrote, “a student offered an educational program providing ‘merely more than de minimis’ progress from year to year can hardly be said to have been offered an education at all.”

IDEA demands more of schools, Roberts said. “It requires an educational program reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances.”

Advocates hoped this case would define the educational benefit required by IDEA, but the Court declined to go that far.  While ruling that minimal educational progress is insufficient, the Court stopped short of clearly defining what “appropriate” really means.  “We will not attempt to elaborate on what ‘appropriate’ progress will look like from case to case,” Roberts wrote.

The Supreme Court ruling on IDEA is now law in all state and federal courts. States may try to delay following this new requirement, but they risk litigation if they do so.

To read the Court’s ruling, click here.

For an analysis of the ruling by the website JDSupra, click here.

Revised and published with permission from the American Society of Special Needs Planners.

Supreme Court Ruling on IDEA

Louisiana Case: SNT Beneficiary Bound by Trustee’s Arbitration Agreement

La!  How exciting to see a Louisiana case make the Special Needs Planning news.  No new ground is broken here, however, as this case was over whether the beneficiary must abide by the arbitration agreement signed by his trustee when a bank account was opened up for the trust. 

The full background is not available in the court’s decision, but it would appear that the trustee mismanaged the funds and the beneficiary is attempting to hold the bank responsible in court.  That is probably the beneficiary’s best hope of actually getting any of the bungled trust’s money back.  Nonetheless, even though the trustee failed in his duties to protect the beneficiary’s interest in the trust, he was legally authorized to enter into agreements like the one in dispute here, where he agreed on behalf of the trust to use private arbitration to settle any disputes with the bank over the trust, rather than suing them in court.  The take-away for observers of special needs planning is this: be careful who you choose for your trustee!

So here’s the story:

A Louisiana appeals court rules that a beneficiary of a special needs trust who is suing the trust’s bank and financial advisor for breach of contract is bound by arbitration clauses signed by the trustee when he opened the trust accounts.  Green v. Regions Bank (La. Ct. App., No. 2013 CA 0771, March 19, 2014)(unpublished).

Erica Green was seriously injured in a car crash in 1998, when she was still a minor.  Ms. Green’s $443,240.38 personal injury settlement was deposited into a special needs trust that named her father, Eric Green, as trustee.  In 2006, Mr. Green opened a bank account in his name at AmSouth (later Regions) Bank and deposited an unknown amount of trust funds into the account.  Mr. Green also deposited $300,000 of trust funds into an investment account in the name of the trust with Morgan Keegan, a financial advisor.  Mr. Green signed customer relationship agreements with both entities containing binding arbitration provisions at the time that he set up the original accounts. When Mr. Green passed away in 2008, the trust funds had been almost completely exhausted.  (The opinion does not say what the funds were used for.)  In 2009, the new trustee of the trust filed suit against Regions Bank and Morgan Keegan, claiming that they were liable for breach of contract, negligence, breach of a duty of reasonable care and negligent misrepresentation.  The trial court dismissed the case, claiming that the new trustee was bound by the arbitration agreements signed by Mr. Green.  In 2012, Ms. Green, now an adult and acting as a beneficiary of the trust, filed a similar lawsuit against both entities.  Regions Bank and Morgan Keegan both filed motions to dismiss based on the arbitration clauses, but Ms. Green argued that the clauses did not apply to her because she was a trust beneficiary and not the trustee.  The trial court granted the motions to dismiss and Ms. Green appealed. The Louisiana Court of Appeal, First Circuit, upholds the trial court’s decision.  The court finds that “[t]o the extent Ms. Green’s claims are based on breach of the agreements Mr. Green had with Regions Bank and Morgan Keegan, she cannot hold these parties to certain terms of the agreements but not to others.  If a non-signatory seeks to enforce the terms of a written agreement containing an arbitration provision, he must accept all of the terms of the agreement, including the arbitration provision. . . The non-signatory cannot have it both ways; he cannot rely on the agreement when it works to his advantage and then repudiate the agreement when it works to his disadvantage.”   To read the full text of this decision, go to: http://www.la-fcca.org/opiniongrid/opinionpdf/2013%20CA%200771%20Decision%20Appeal.pdf


New York Decision Lays Out, in Plain Terms, What It Takes to Be a Successful SNT Trustee

One of the big decisions families face when establishing a special needs trust is who will act as trustee.  The trustee not only decides how money in the trust can be used, he or she is also responsible for the administration of the trust –  planning investments, preparing tax returns, and complying with Medicaid regulations among other complex tasks.  A professional or corporate trustee is often the best prepared to deal with these responsibilities, but will they also know what expenditures are in the trustee’s best interests?

In this case, a New York Surrogate’s Court decision reviewing guardian and trustee accounts for a young man with disabilities is remarkable not for its legal implications, but for the detailed analysis of how an engaged trustee and caregiver can have a huge impact on the life of the trust beneficiary. In the Matter of the Accounting by JP Morgan Chase Bank, N.A. v. Marie H. (N.Y. Surr.Ct.,No. 2005-1307, Dec. 31, 2012). 

The beneficiary in this case is Mark C.H., a young man with autism.  Mark was placed in a center for people with autism shortly before his mother passed away, leaving a significant trust fund for his benefit. In a guardianship action undertaken after the mothers death, the proposed guardian (the lawyer who drafted, and served as co-trustee of, Mark’s special needs trust) testified that for two years none of the trust’s income or principal had been spent on Mark’s care and that no one had met with the staff at the center regarding Mark’s care. After facilitating several meetings between the trustees and the center’s staff, and making sure that appropriate caregivers were hired, the court approved the guardianship.

Several years later, Mark’s guardian and the trustees of his trust filed accountings with the New York Surrogate’s Court. Although there are still ongoing accounting problems, the court has found that the hiring of a care manager and greater trustee involvement in Mark’s life “has improved the beneficiary’s quality of life and his functional capacity to enjoy what is now a near ‘normal’ existence in the community.”

In a must-read opinion for anyone serving as the trustee of a special needs trust, the court outlines, in great detail, the steps that have been taken to make Mark’s life better, including the purchase of special equipment to help him communicate, coordination with Mark’s brother so that the two could meet for the first time since Mark moved out of his mother’s home, and facilitation of Mark’s move into a community setting.

The court explains that “once the Trustees were required to make themselves knowledgeable about Mark’s condition and his needs, and the availability of services that would enable them to provide for those needs, they began, and continue to use funds from his trust for the purposes his deceased mother anticipated and so deeply desired. The history brings into sharp focus the obligations of trustees, both individual and institutional, to the beneficiaries of trusts they administer when they know, or should know, that those beneficiaries have disabilities, and have medical, educational or quality of life needs that can and should be met from trust income.”

For the full text of this decision, click here.


Georgia Court Grants TRO Allowing Man to Continue to Receive Services After Aging Out of Medicaid

A federal district court grants a 22-year-old man’s motion for a temporary restraining order requiring the Georgia Department of Community Health to provide him with ongoing in-home nursing care after he aged out of a pediatric Medicaid program. Royal v. Reese (N.D.Ga., No. 1:14-cv-0025-WSD, Jan. 7, 2014).

Zachary Royal, a 22-year-old Medicaid beneficiary with spinal muscle atrophy, received 84 hours a week of in-home skilled nursing services from the Georgia Pediatric Program (GAPP) until his 22nd birthday on January 6, 2014. Once Mr. Royal’s GAPP benefits ended due to his age, he became eligible for services under the Medicaid Independent Care Waiver Program (ICWP). Claiming that he would not receive an appropriate level of skilled nursing care from ICWP, Mr. Royal maintained that he should be eligible for the state’s Comprehensive Supports Waiver Program (COMP) instead. Prior to Mr. Royal’s 22nd birthday, the Georgia Department of Community Health had determined that he was ineligible for COMP. (The opinion does not state why.)

Three days before his birthday, Mr. Royal filed a motion for a temporary restraining order asking the court to enjoin the Department from cutting back his nursing services once he turned 22 because the reduction in services made it likely that he would be hospitalized, in violation of the Americans with Disabilities Act and the Rehabilitation Act. At the hearing on Mr. Royal’s motion, both parties agreed that he would be eligible for at least 50 skilled nursing visits through ICWP, and Mr. Royal also admitted that he had not worked with the state to obtain those services prior to his birthday.

The U.S. District Court for the Northern District of Georgia grants Mr. Royal’s motion for a temporary restraining order but forces the state to provide only three visits a day from nursing assistants and two visits a day from a nurse until the matter is resolved. The court finds that “[i]n light of the serious nature of Plaintiff’s medical condition . . . Plaintiff may well suffer irreparable injury if some in-home, skilled nursing care was not provided now that Plaintiff has aged out of GAPP. Further, Defendants have acknowledged that Plaintiff is entitled to at least fifty (50) visits by a skilled nurse, and therefore granting Plaintiff limited relief in this regard does not present substantial harm to Defendants. The Court finds, in any case, that the threatened injury to Plaintiff if relief is not granted outweighs the harm the relief inflicts on Defendants.”

To read the full text of this decision, click here.