GLOUCESTER TOWNSHIP BOARD OF EDUCATION v. E.N.

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

THE GLOUCESTER TONSHIP :

BOARD OF EDUCATION, : Hon. Joseph H. Rodriguez

:

Plaintiff, :

:

v. : Civil No. 22-06568

:

E.N. and M.N. on behalf of A.N., :

:

Defendants. : OPINION

:

:

I. Introduction

Plaintiff Gloucester Township Board of Education (the “District”) initiated this

action against Defendants E.N. and M.N. on behalf of minor A.N. under the Individuals

with Disabilities Education Act (the “IDEA”), 20 U.S.C. § 1400, et seq. By this action, the

District seeks reversal of the Decision by the Honorable Elaine B. Frick, A.L.J. granting

Defendants’ motion for partial summary decision and ordering the District to reimburse

Defendants for the Independent Educational Evaluation (“IEE”) performed by a reading

specialist. The District also seeks attorney’s fees in accordance with 20 U.S.C.

1415(h)(i)(3)(B)(i)(II)-(III). In their Answer and Counterclaims, Defendants seek to

appeal a separate decision issued by the ALJ, which denied their demands for relief

upon concluding that Free Appropriate Public Education (“FAPE”) was provided in the

Least Restrictive Environment (“LRE”) to A.N. and that there was no compensatory

education to be awarded, nor reimbursements for private tutoring, therapy, or other

requested out-of-pocket expenses for such services. Dkt. 1-1, PageID:114.

Presently before the Court is the motion by the District to dismiss Defendants’

Counterclaims as being in violation of the IDEA’s ninety-day statute of limitations

period for seeking review of a final agency decision or, in the alternative, for failure to

state a claim. Defendants have opposed the District’s motion.

For the reasons set forth herein, the District’s motion to dismiss Defendants’

counterclaims will be granted.

II. Statutory Framework

The IDEA is a “comprehensive scheme of federal legislation designed to meet the

special educational needs of children with disabilities.” M.A. ex rel E.S. v. State-

Operated Sch. Dist., 344 F.3d 335, 338 (3d Cir. 2003). The IDEA operates through the

exercise of “cooperative federalism” and offers federal funds to states to educate

children with disabilities. See, e.g., Endrew F. ex rel. Joseph F. v. Douglas Cnty. Sch.

Dist. RE-1, 137 S. Ct. 988, 993, 197 L.Ed.2d 335 (2017). “In exchange for the funds, a

State pledges to comply with a number of statutory conditions.” See T.R. v. Sch. Dist. of

Philadelphia, 4 F.4th 179, 182–83 (3d Cir. 2021). State recipients apportion federal

funds to local educational agencies, like the District here, who are in turn responsible for

providing special education and related services under the IDEA. See 20 U.S.C. §§

1401(19), 1412–1414.

A. Free Appropriate Public Education (“FAPE”)

As a condition for the receipt of federal funding, local educational agencies must

provide a “free appropriate public education” or “FAPE” to qualifying students. T.R., 4

F.4th at 183 (3d Cir. 2021); see also Endrew F. ex rel. Joseph F., 580 U.S. at 390 (citing

20 U.S.C. § 1412(a)(1)). “The IDEA contemplates that school districts will achieve these

goals by designing and administering a program of individualized instruction for each

special education student set forth in an Individualized Education Plan.” D.S. v.

Bayonne Bd. of Educ., 602 F.3d 553, 557 (3d Cir. 2010) (citing 20 U.S.C. §§ 1412(a)(4),

1414(d)). An Individual Education Plan “consists of a specific statement of a student’s

present abilities, goals for improvement of the student's abilities, services designed to

meet those goals, and a timetable for reaching the goals by way of the services.” Holmes

v. Millcreek Twp. Sch. Dist., 205 F.3d 583, 589 (3d Cir. 2000) (citing 20 U.S.C. §

1401(a)(20)).

B. Independent Educational Evaluations (“IEEs”)

The IDEA requires school districts to evaluate students with disabilities in the

interest of providing special education and related services. C.P. o/b/o F.P. v. Clifton Bd.

of Educ., No. CV198469KMJAD, 2020 WL 4530031, at *5 (D.N.J. Aug. 6, 2020); 20

U.S.C. §§ 1401(19)(A), 1414(a)(1)(A); 34 C.F.R. § 300.301; see also N.J. ADMIN CODE

§§ 6A:14-2.5 (discussing evaluation procedures and noting that district boards of

education conduct evaluations), 6A:14-3.1(a)–(b) (stating that “child study team”

members are responsible for the evaluation of students and must be employees of a

district board of education).

If a parent disagrees with any evaluation or reevaluation administered by the

school board, the IDEA grants her the “right to an independent educational evaluation,”

or “IEE.” See 34 C.F.R. § 300.502(b)(1); see also N.J. A DMIN. CODE § 6A:14-2.5(c).

Importantly, an IEE is to be delivered “at public expense,” meaning the school board

either “pays for the full cost of the evaluation or ensures that the evaluation is otherwise

provided at no cost to the parent.” 34 C.F.R. §§ 300.502(a)(3)(ii), (b)(1).

C. Dispute Resolution Procedures

The IDEA establishes mechanisms for aggrieved parties to submit complaints

“with respect to any matter relating to the identification, evaluation, or educational

placement of the child, or the provision of a free appropriate public education to such

child.” 20 U.S.C. § 1415(b)(6)(A). Initially, a party may bring a complaint to challenge a

school board’s decision through “an administrative ‘impartial due process hearing.’”

Ridley Sch. Dist. v. M.R., 680 F.3d 260, 269 (3d Cir. 2012) (quoting 20 U.S.C. § 1415(f)).

If a student’s request for a publicly funded IEE is denied by a school board, the board

must request a due process hearing within twenty days. See M.S. v. Hillsborough Twp.

Pub. Sch. Dist., 793 F. App’x 91, 94 (3d Cir. 2019) (citing N.J. ADMIN. CODE. §§ 6A:14-

2.5(c)(1)(ii) and 6A:14-2.7(b)).

Any party dissatisfied with the outcome of a due process hearing may seek

judicial review of an ALJ’s decision “by filing an action in a competent state or federal

court.” Y.B., 4 F.4th at 198 (3d Cir. 2021) (citing 20 U.S.C. § 1415(i)(2)(A)). However,

bringing such an action requires the party to do so within “90 days from the date of the

decision of the hearing officer.” 20 U.S.C. § 1415(i)(2)(A). The hearing officer’s decision

becomes final and binding if neither party seeks judicial review within the ninety-day

limitations period. 20 U.S.C. § 1415(i)(1)(A).

III. Background

This case arises from a dispute over payment for special education evaluation

services. Petitioners are the parents of a child, A.N., who is a classified disabled student,

and a resident within the Gloucester Township School District. On April 27, 2020, the

parents notified the District of their request for an IEE of A.N., to be completed by Ellen

Topiel, Reading Specialist and by Technology for Education & Communication

Consulting in Assistive Technology paid for by the BOE. The Reading Specialist charged

$3,200, but the District declined to pay more than $600 for such an evaluation. On May

18, 2020, Defendants initiated a due process request.

On July 22, 2020, following multiple settlement conferences and attempts to

resolve this matter, the counsel for Plaintiff sent counsel for Defendants an offer of

judgement letter, memorializing the settlement discussions as the District’s current

settlement offer. The District claims that, through that offer of judgement, it offered

Defendants a settlement with terms that represented everything sought in Defendants

last settlement demand, and a complete agreement as to the educational claims and

financial claims raised by Defendants. This response to Defendants settlement offer was

made three days after receiving it.

On July 31, 2020, Defendants initiated a due process request with the New Jersey

Office of Administrative Law. The parents argued they were entitled to an order for

partial summary decision regarding their pending due process, directing the District to

provide an IEE for the student, at the public expense, because the District never filed a

petition objecting to the requested evaluation. The District opposed the request for

partial summary decision, asserting it was not required to file a petition because it

agreed to provide an IEE and were seeking to clarify what type of evaluation Parents

sought, and that it would be paid for in accordance with the cost criteria fee cap

schedule developed by the District.

On November 24, 2020, the Hon. Elaine B. Frick, A.L.J. issued a decision,

granting Parents motion for partial summary decision and ordering the District to

reimburse Defendant for the IEE performed by Ellen Topiel.1

1 The District filed a Complaint on January 20, 2021, in the United States District Court

for the District of New Jersey-Camden Vicinage, seeking review and reversal of the

The remaining issues in Defendants’ Due Process Petition relating to provision of

FAPE in the LRE environment were reviewed through a hearing before the Office of

Administrative Law. A Final Decision on those issues was issued on August 12, 2022 in

favor of the District concluding that FAPE was provided in the LRE to A.N. and that

there was no compensatory education to be awarded, nor reimbursements for private

tutoring, therapy, or other requested out-of-pocket expenses for such services. See

Compl. ¶ 8, August 12, 2022 Final Agency Decision and Order of the Hon. Elaine B.

Frick, A.L.J., Dkt. 1-1, PageID:114.

The District filed the instant action seeking reversal of the Final Decision of

November 24, 2020 on the asserted basis that the administrative law court failed to

properly consider the controlling authority of the New Jersey District Court as well as

Federal Circuit Courts in relying on the PRISE manual published by the New Jersey

Department of Education in reaching its conclusion.

The District also seeks attorney’s fees on the basis that Defendants continued to

litigate the Due Process Matter after the litigation clearly became frivolous,

unreasonable, or without foundation. Specifically, the District claims that it provided an

offer of judgement letter representing the terms of the last settlement proposal by

Defendants, resolving the educational programs and financial issues set forth in the Due

Process Petition, yet Defendants unreasonably, and without explanation rejected that

offer, multiple times.

Order for Partial Summary Judgment. An opinion and order were issued on April 13,

2022 dismissing the District’s Complaint without prejudice for lack of subject matter

jurisdiction, finding that the Individuals with Disabilities Education Act administrative

process had not yet reached completion with the entry of a final decision in the OAL. See

Gloucester Twp. Bd. of Educ. v. E.N. on Behalf of A.N., No. CV 21-939 (RBK/SAK),

2022 WL 1104848, at *1 (D.N.J. Apr. 13, 2022).

In sum, the District seeks relief in the form of a reversal of the Final Decision

dated November 24, 2020; Entry of Judgment finding that the District was not required

to initiate due process within 20 days in order to deny reimbursement of the IEE cost

based on the District’s Cost Criteria, and; an award of attorney’s fees to the District by

Defendants.

Defendants allege two counterclaims in their Answer. Dkt. 4. First, Defendants

allege they are aggrieved because “Plaintiffs failed to disclose the prior proceeding in

this matter in Case 1:21-cv-00939-RBK-SAK (Document 15, Filed 04/13/22) where this

Court ‘DISMISSED without prejudice Plaintiffs interlocutory appeal of the 11/24/20

Order for lack of subject matter jurisdiction.’” Second, Defendants assert “The

Defendants are aggrieved by and appeal all relief requested by Defendants and denied

by the 8/12/22 final administrative order. § 1415(i)(2)(B)” and petition the Court to

reverse, vacate, and remand the August 12, 2022 order.

Presently before the Court is the motion by the District to dismiss Defendants’

counterclaims as being in violation of the 90-day statute of limitations period or, in the

alternative, for failure to state a claim. Defendants claim the District brought the present

action on the ninetieth day after the entry of the final administrative decision of August

20, 2022 in an attempt to bar Defendants from bringing a counterclaim. According to

Defendants, the District’s argument that the counterclaims should be barred as out-of-

time represents a departure from authority permitting counterclaims filed outside the

90-day period when asserted in a responsive pleading. The District argue in response

that the authority referenced by Defendants permitting counterclaims to be filed outside

the 90-day period applies only to compulsory countercliams, not permissive

counterclaims, and that Defendants’ counterclaims are undisputedly permissive.

IV. Legal Standard

A motion to dismiss a counterclaim is evaluated under the same standard as a

motion to dismiss a claim. See Polysciences, Inc. v. Masrud, No. 22-1767, 2023 WL

3377084, at *1 (3d Cir. May 11, 2023). Federal Rule of Civil Procedure 12(b)(6) permits

dismissal for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P.

12(b)(6). A complaint should be dismissed pursuant to Rule 12(b)(6) if the alleged facts,

taken as true, fail to state a claim. Id. In general, only the allegations in the complaint,

matters of public record, orders, and exhibits attached to the complaint, are taken into

consideration when deciding a motion to dismiss under Rule 12(b)(6). See Chester Cnty

Intermediate Unit v. Pa. Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). It is not

necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434,

446 (3d Cir. 1977). The question before the Court is not whether the plaintiff will

ultimately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (3d. Cir. 2007). Instead,

the Court simply asks whether the plaintiff has articulated “enough facts to state a claim

to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007).

“A claim has facial plausibility2 when the plaintiff pleads factual content that

allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550

U.S. at 556). “Where there are well-pleaded factual allegations, a court should assume

2 This plausibility standard requires more than a mere possibility that unlawful conduct

has occurred. “When a complaint pleads facts that are ‘merely consistent with’ a

defendant’s liability, it ‘stops short of the line between possibility and plausibility of

‘entitlement to relief.’” Id.

their veracity and then determine whether they plausibly give rise to an entitlement to

relief.” Iqbal, 556 U.S. at 679.

The Court need not accept “unsupported conclusions and unwarranted

inferences,” (Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (citation omitted),

however, and “[l]egal conclusions made in the guise of factual allegations . . . are given

no presumption of truthfulness.” Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 607,

609 (D.N.J. 2006) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter

v. Barella, 489 F.3d 170, 177 (3d Cir. 2007) (“[A] court need not credit either ‘bald

assertions’ or ‘legal conclusions’ in a complaint when deciding a motion to dismiss.”

(quoting Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005))). Accord Iqbal, 556 U.S.

at 678–80 (finding that pleadings that are no more than conclusions are not entitled to

the assumption of truth).

Further, although “detailed factual allegations” are not necessary, “a plaintiff’s

obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels

and conclusions, and a formulaic recitation of a cause of action’s elements will not do.”

Twombly, 550 U.S. at 555 (internal citations omitted); see also Iqbal, 556 U.S. at 678

(“Threadbare recitals of the elements of a cause of action, supported by mere conclusory

statements, do not suffice.”).

Thus, a motion to dismiss should be granted unless the plaintiff’s factual

allegations are “enough to raise a right to relief above the speculative level on the

assumption that all of the complaint’s allegations are true (even if doubtful in fact).”

Twombly, 550 U.S. at 556 (internal citations omitted). “[W]here the well-pleaded facts

do not permit the court to infer more than the mere possibility of misconduct, the

complaint has alleged-but it has not ‘shown’—‘that the pleader is entitled to relief.’”

Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).

V. Discussion

The question presented by the District’s motion is whether Defendants’

counterclaims are timely under the IDEA’s ninety-day limitations period. In resolving

this question, the Court is guided by the recent decision in Mantua Twp. Bd. of Educ. v.

E.K. on behalf of W.W., No. 122CV07496KMWMJS, 2023 WL 6389104, at *1 (D.N.J.

Sept. 30, 2023), which features facts remarkably similar to the instant action. In

Mantua, as here, the school district’s claim sought review of discrete issue of whether

the school district was required to initiate due process in order to deny reimbursement

of the IEE cost based on cost criteria. Also in Mantua, the parent/defendant filed

counterclaims outside of the IDEA’s 90-day statute of limitations. The school district in

Mantua then brought a motion to dismiss the counterclaims arguing they were

permissive counterclaims brought outside of the statute of limitations. The Honorable

Judge Williams found that the parent/defendant’s counterclaims were permissive rather

than compulsory and thus time barred by the IDEA’s ninety-day limitations period.

As previously indicated, the IDEA affords any aggrieved party the right to seek

judicial review “by filing an action in a competent state or federal court.” Y.B., 4 F.4th at

198 (3d Cir. 2021) (citing 20 U.S.C. § 1415(i)(2)(A)). The time to file such an action,

however, is not unlimited. The IDEA limits a party’s right to “bring an action” to within

“90 days from the date of the decision of the hearing officer.” 20 U.S.C. § 1415(i)(2)(A).

However, there is an exception to the IDEA’s ninety-day time bar where a litigant seeks

review of a final administrative decision by way of a compulsory counterclaim. See

Jonathan H. v. The Souderton Area Sch. Dist., 562 F.3d 527, 530 (3d Cir. 2009)

(holding that a “compulsory counterclaim [ ] timely pleaded under Rule 13(a) of the

Federal Rules of Civil Procedure” may be asserted beyond the ninety-day limitations

period).

It is not contested that Defendants filed their counterclaims outside the ninety-

day limitations period. The timeliness of Defendants’ counterclaims therefore hinges on

whether they are “compulsory” or “permissive” under Rule 13(a). See id.; see also

Charlotte-Mecklenburg Cnty. Bd. of Educ. v. Brady, 66 F.4th 205, 214 (4th Cir. 2023)

(adopting Jonathan H.) (“[A]s long as the counterclaim was compulsory, and timely

pleaded in accordance with Federal Rule of Civil Procedure 13, the IDEA’s limitations on

plaintiffs’ ‘right to a civil action’ does not bar the filing of defendants’ counterclaim.”); N.

Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 206–07 (5th Cir.

2015) (reaffirming adoption of Jonathan H.) (stating that “asserting a compulsory

counterclaim is not ‘bringing an action’” under the IDEA).

A. Fed. R. Civ. P. 13

Federal Rule of Civil Procedure 13(a)(1) defines a “compulsory” counterclaim as

one which “arises out of the transaction or occurrence that is the subject matter of the

opposing party’s claim.” Fed. R. Civ. P. 13(a)(1)(A). In contrast, a “permissive”

counterclaim is simply “any claim that is not compulsory.” Fed. R. Civ. P. 13(b).

To determine whether a counterclaim is compulsory, federal courts must assess

“whether the counterclaim bears a logical relationship to an opposing party’s claim.”

Transamerica Occidental Life Ins. Co. v. Aviation Off. of Am., Inc., 292 F.3d 384, 389–

90 (3d Cir. 2002) (internal quotation marks omitted). Generally speaking, a “logical

relationship” exists between a plaintiff’s claims and a defendant’s counterclaims where

“separate trials on each . . . would ‘involve a substantial duplication of effort and time by

the parties and the courts.’” Id. (quoting Xerox Corp. v. SCM Corp., 576 F.2d 1057, 1059

(3d Cir. 1978)). “Such a duplication is likely to occur when claims involve the same

factual issues, the same factual and legal issues, or are offshoots of the same basic

controversy between the parties.” Id. (citing Great Lakes Corp. v. Herbert Cooper Co.,

286 F.2d 631, 634 (3d Cir. 1961)).

B. Defendants’ Counterclaims

The Court is not persuaded that District’s claims and Defendants’ counterclaims

“involve the same factual issues, the same factual and legal issues, or are offshoots of the

same basic controversy between the parties.” Transamerica, 292 F.3d at 390. As

discussed, the August 12, 2022 Final Decision addressed Defendants’ claim that the

District had failed to provide A.N. with a FAPE. When determining whether a student

was provided FAPE, an administrative hearing officer must assess whether a child’s IEP

was “calculated to enable a child to make progress appropriate in light of the child’s

circumstances.” Endrew F. ex rel. Joseph F. v. Douglas Cnty. Sch. Dist. RE-1, 580 U.S.

386, 399 (2017). The statute contemplates that “this fact-intensive exercise will be

informed not only by the expertise of school officials, but also by the input of the child's

parents or guardians.” Id. Importantly, this requires administrative hearing officers to

receive, review, and weigh “testimony and documentary evidence concerning the child’s

needs and a school board’s plans for meeting them.” M.R. v. Ridley Sch. Dist., 744 F.3d

112, 120 (3d Cir. 2014).

In determining that the District provided A.N. with FAPE, the ALJ reviewed and

relied on extensive evidentiary exhibits, which included education records and

evaluation history. See Compl. ¶ 8, August 12, 2022 Final Agency Decision and Order of

the Hon. Elaine B. Frick, A.L.J., Dkt. 1-1. Additionally, the ALJ weighed the factual

record of the due process hearing that culminated in the August 12, 2022 Final Decision

including witness testimony and expert findings. Id. These facts and the law

undergirding the August 12, 2022 Final Decision are extraneous, however, to the narrow

question resolved by the Final Decision on Defendants’ reimbursement for the IEE.3

In the November 24, 2022 Final Decision addressing the provision of FAPE to

A.N., the ALJ does not discuss the November 24, 2020 Final Decision regarding

reimbursement for the IEE other than in the procedural history. As is apparent from the

decision, the facts and law applicable to the IEE issue have no relevant overlap with the

legal analysis and conclusions made with respect to A.N.’s FAPE. While the Final

Decision on FAPE “focused on the substance of an appropriate education” for A.N., the

IEE Final Decision concerned a “payment dispute” that had no relevant connection

“with [the District’s] placement decisions, the services it offered [A.N.], [or] its response

to [A.N.’s] disability.” M.R., 744 F.3d at 121 (finding that a counterclaim for expense

reimbursement was permissive because there was “no meaningful overlap between the

facts and law underlying” a denial-of-FAPE claim) (internal quotation marks omitted).

Defendants’ FAPE-based counterclaims would expand the scope of this Court’s review to

encompass issues that do not intersect with the discreet question of financial

responsibility for the IEE of which the District seeks review. Transamerica, 292 F.3d at

390.

3 The District Court’s earlier decision declining to hear the District’s interlocutory appeal

is not determinative of the permissive nature of Defendants’ counterclaims. There, the

Court concluded that the ALJ’s determination respecting the IEE issue represented an

interim decision subject to the jurisdictional requirements attendant to the filing of

interlocutory appeals. Gloucester Twp. Bd. of Educ., No. CV 21-939, 2022 WL 1104848,

at *2. Upon completion of the administrative process for review of both the IEE and

FAPE issues, the Court can now conclude that there is no overlap in fact or law sufficient

to require that Defendants be permitted to maintain their counterclaims.

Moreover, Defendants’ do not articulate how their counterclaims involve the

same factual or legal issues raised by the District’s Complaint challenging the IEE Final

Decision.4 Although both decisions pertain to the rights of A.N. under the IDEA, “the

similarity ends there.” M.R., 744 F.3d at 120; see also Council Rock Sch. Dist. v. Bolick,

462 F. App’x 212, 214 (3d Cir. 2012) (observing that a claim for IEE reimbursement is

“entirely independent” from a challenge to an IDEA eligibility determination for

purposes of claim preclusion); Transamerica, 292 F.3d at 391 (recognizing the “close

connection between Rule 13(a) and the doctrine of claim preclusion”).

For the foregoing reasons, the Court finds that Defendant’s counterclaims are

permissive, rather than compulsory, and are thus time-barred by the IDEA’s ninety-day

limitations period. See Jonathan H., 562 F.3d at 530; Brady, 66 F.4th 205 at 214.

VI. Conclusion

For the reasons set forth herein, the Court will grant the motion by Plaintiff

Gloucester Township Board of Education and Defendants’ counterclaims will be

dismissed. An appropriate order shall follow.

February 7, 2024

s/ Joseph H. Rodriguez

Hon. Joseph H. Rodriguez, U.S.D.J.

4 The term “compulsory” does not appear once in Defendants’ brief.