April 28: Special Education & Investigating Big Banks

Case: Forest Grove School Dist. v. T.A.

Date: Tuesday, April 27, 2009

Issue: If under the Individuals with Disabilities Education Act (IDEA), must a child be enrolled in a public school's special education program before his parents can be reimbursed by the school district for the cost of private education?

Background: The parents of T.A. had a tough time keeping their son focused on his schoolwork. In 2001, a counselor discussed with support staff from the Forest Grove (Ore.) School District the possibility that the boy who is not named in this case had a learning disability. In the end they concluded T.A. was not learning disabled but probably had Attention Deficit Hyperactivity Disorder and therefore not eligible for special education under IDEA. But several years later while in high school, T.A. started smoking marijuana and ran away from home. Police officers soon returned T.A. to his parents who removed him from school and enrolled him in a three-week treatment program. They also enrolled him in a private high school where we would later graduate on time.

T.A.'s parents filed a lawsuit against the school district asking for a full evaluation of their son. Eventually, an administrative hearing officer concluded that T.A. qualified for IDEA sanctioned special education. The officer further held that the school district was responsible for reimbursing the $5,200/month cost of T.A.'s private education. The school district appealed. While it found initial success with a trial court judge, a split panel of the Ninth Circuit Court of Appeals upheld the order forcing the school district to pay for T.A.'s private education.

A provision of IDEA states that when a school district fails to provide a student who "previously received special education and related services" needed by that student then the school district must pay for the costs associated with private education. The confounding issue in this case is that T.A. was never enrolled in a special education program. The school district argues this fact should prevent them from having to reimburse T.A.'s educational costs when his parents unilaterally decided to remove him from public school. Lawyers for T.A. argue the school district's failure to provide a "free and appropriate education" as mandated by IDEA is the controlling language of the law—not the enrollment requirement.

This is the second time in as many years the Court has heard a case on this issue. In its last term, the Court split 4-4 when Justice Anthony Kennedy recused himself from the case. All nine justices are set to hear this case and since the facts are substantially similar to the prior case, in all likelihood Justice Kennedy will be in the familiar position of casting the deciding vote.

Case: Cuomo v. Clearing House

Date: Tuesday, April 27, 2009

Issue: Can the New York Attorney General pursue an investigation into the lending practices of major national banks (Wells Fargo, Citibank, etc.) even though the federal agency responsible for overseeing those banks says such an investigation would infringe on its exclusive oversight?

Background: In 2005, New York's attorney general sent letters of inquiry to various banks in response to newly released federal statistics suggesting those banks might have discriminated against minority borrowers who took out home mortgages. The statistics indicated that minority borrowers were more likely to have higher interest rates on home loans than white borrowers. The letters asked for the banks to provide the attorney general proprietary information that could have been used against them in any subsequent lawsuit.

The banks and their trade association filed their own legal challenge to stop the investigation. They were eventually joined by the federal Office of Comptroller of the Currency (OCC) which regulates large national banks. Together, they argued the attorney general cannot investigate a matter that falls within the exclusive purview of the OCC. A federal district court judge agreed and granted the banks relief from the investigation. It ruled the OCC can preempt any state investigation or prosecution of national banks even if those banks violate state laws. A divided panel of the Second Circuit of Appeals affirmed that judgment saying the OCC is entitled to due deference in its interpretation of federal law.

In his brief to the Supreme Court, New York Attorney General Andrew Cuomo says the OCC's position is incorrect. He says the operative section of the National Bank Act "cannot reasonably be construed to [prohibit] state enforcement of state consumer protection and antidiscrimination laws that are validly applied to national banks."