P. N. v. Clementon Bd of Ed

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit

4-5-2006

P. N. v. Clementon Bd of Ed
Precedential or Non-Precedential: Precedential

Docket No. 04-4705

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 PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 04-4705

P. N., an infant, individually and by
his parent and legal guardian; M. W.,
Appellants
v.

CLEMENTON BOARD OF EDUCATION

On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 02-cv-01351)
District Judge: Honorable Freda L. Wolfson

Argued December 12, 2005

Before: SLOVITER, SMITH, and STAPLETON,
Circuit Judges.

(Filed: April 5, 2006)

Jamie Epstein (Argued)
Cherry Hill, N.J. 08002

Attorney for Appellant

James F. Schwerin (Argued)
Parker, McCay & Criscuolo
Lawrenceville, N.J. 08648

Attorney for Appellee
 OPINION OF THE COURT

SLOVITER, Circuit Judge.

Section 615(i)(3)(B) of the Individuals with Disability
Education Act (“IDEA”) provides: “In any action or proceeding
brought under this section, the court, in its discretion, may award
reasonable attorneys’ fees as part of the costs to the parents of a
child with a disability who is the prevailing party.” 20 U.S.C. §
1415(i)(3)(B). Plaintiffs-Appellants P.N. and his guardian M.W.
(collectively “plaintiffs”) appeal from the District Court’s Order
denying their motion for prevailing party attorneys’ fees and
granting summary judgment to defendant Clementon Board of
Education.

I.

P.N. was born in 1988 and suffers from Attention Deficit
Hyperactivity Disorder. During the 2000-01 school year, the
Clementon Board of Education (“CBE”) expelled P.N. after he
sent a note threatening to blow up his school. P.N. was home-
schooled for the rest of the year, but was permitted to return to
school for the 2001-02 year. P.N. did not repeat that threat but
CBE again suspended him during the 2001-02 school year for
disruptive behavior. The parties dispute the specific conduct
that resulted in this suspension.

Plaintiffs filed a petition for a due process hearing on
October 25, 2001.1 The petition sought the following relief: that

1
It is unclear whether CBE ever filed a cross-petition for a
due process hearing. CBE claims to have filed such a petition,
Appellee’s Br. at 2, but at oral argument, counsel for plaintiffs
stated that the school did not file a cross-petition for a due process
hearing and counsel for CBE did not contest this statement. The
only petition for due process present in the record is P.N.’s. The
November 1 consent decree refers only to the “petition for

2
P.N. be returned to school, that P.N. be reimbursed for the cost
of all psychological services received by P.N. since being
required to receive such services by CBE,2 that a § 504 plan
under the Rehabilitation Act of 1973 be prepared by CBE,3 and
that P.N. be evaluated by an independent child study team.

The parties settled the underlying dispute before a due
process hearing took place, and the Administrative Law Judge
(ALJ) entered two consent orders. The first one, dated
November 1, 2001, ordered:

1. On 11/5/01, C.S.D.4 shall return P.N. to his current
placement that was in place prior to his removal on
10/16/01.

emergent relief filed on 10/25/01 with the Office of Special
Education of the New Jersey Department of Education by Jamie
Epstein, Esquire for petitioner, with Frank Cavallo, Esquire, for
respondent, having consented to the following relief.” App. at 25.

2
CBE required that P.N. see a psychologist after his first
expulsion from school.
3
Section 504 of the Rehabilitation Act of 1973 is codified
at 29 U.S.C. § 794(a) and provides:

No otherwise qualified individual with a disability in the
United States, as defined in section 705(20) of this title,
shall, solely by reason of her or his disability, be excluded
from the participation in, be denied the benefits of, or be
subjected to discrimination under any program or activity
receiving Federal financial assistance or under any program
or activity conducted by any Executive agency or by the
United States Postal Service.

4
“C.S.D.” refers to Clementon School District.

3
 2. On 11/5/01, C.S.D. shall provide P.N. with appropriate
accommodation in regards [to] any behaviors which may
interfere with P.N.’s ability to receive an education. Dr.
Paul Booker may provide assistance in the development
of said accommodation.5 If such assistance is provided,
on the return date, this forum shall determine if C.S.D.
should reimburse petitioners for Dr. Booker’s fees.

3. P.N. is to receive an Independent Child Study Team
Evaluation in accordance with the procedures outlined in
N.J.A.C. 1:6A-14.3. at C.S.D’s expense. The Social
Work evaluation shall be performed by C.S.D. The
psychiatric evaluation shall be performed by Dr.
Raymond H. Schweibert, M.D. If counsel cannot agree
on who will do the learning and school psychology
evaluations by 11/7/01, each shall submit three names for
each evaluation to this forum with the right to object to
one of the three proposed evaluators for each evaluation. .
..

4. C.S.D. shall provide petitioners transportation to and
from all evaluations.

5. This matter shall reconvene on 12/5/01 before the
undersigned A.L.J.

6. This decision is final pursuant to 20 U.S.C.A. §
1415(i)(1)(A) and 34 C.F.R. § 300.510 (1999). If either
party feels that this decision is not being fully
implemented, this concern should be communicated in
writing to the Director, Office of Special Education
Programs.

App. at 25-26 (emphasis in original).

The second Consent Order, dated February 13, 2002,

5
Dr. Booker is a private mental health professional seen by
P.N.

4
stated that the parties “agreed to a resolution of all remaining
issues” and ordered:

1. Respondent [C.S.D.] will pay the parents in the
amount of $425.00 in satisfaction of petitioners’ claims
for reimbursement for the costs of psychological
treatment and psychiatric services to date, said payment to
be made no later than March 25, 2002.

2. Respondents will pay the reasonable costs of
attendance at the IEP [Individualized Education Program]
meeting of psychologist Paul Booker, . . . said meeting to
be scheduled on a date as soon as possible, convenient to
all participants, including Dr. Booker, said payment to be
made no later than 30 days after said meeting.

3. The remaining claims raised in the petition of appeal
and subsequent amendments, including petitioners’
allegations that the respondent violated their rights to
timely receipt of student records, are dismissed.

4. The issue of counsel fees is reserved for decision by a
court of competent jurisdiction or for amicable resolution
between the parties.

5. This decision is final pursuant to 20 U.S.C.A. §
1415(i)(1)(A) and 34 C.F.R. § 300.10(1999).

App. at 27-28.

On March 26, 2002, plaintiffs filed a complaint in the
United States District Court for the District of New Jersey
setting forth the background and the history of the consent orders
and seeking prevailing party attorneys’ fees and costs pursuant to
the IDEA. CBE responded, inter alia, that plaintiffs are not
prevailing parties under the provisions of the IDEA. In July
2002, P.N. and his parents filed a motion to enforce that part of
the ALJ Order of February 13, 2002, requiring CBE to pay P.N.
$425.00, as well as for statutory interest, attorneys’ fees, and
costs incurred in enforcing the Order. On October 31, 2002, the

5
District Court issued an opinion denying plaintiffs’ motion for
$425.00 and costs. The case was then reassigned to another
District Judge on March 13, 2003 and marked closed by the
clerk of the court. On June 15, 2004 the District Court granted
plaintiffs’ motion to reopen. Shortly thereafter, plaintiffs filed
their motion for prevailing party attorneys’ fees. CBE filed a
cross-motion for summary judgment.

The District Court granted CBE’s motion for summary
judgment and denied plaintiffs’ motion for attorneys’ fees,
holding that although the consent orders entered in favor of
plaintiffs did not “preclude Plaintiff from being a prevailing
party,” App. at 10, plaintiffs’ success was de minimis and they
were therefore not entitled to attorneys’ fees. The District Court
stated that obtaining an IEP, an order for reimbursement of
psychological services in the amount of $425.00, reinstatement
in school, and an evaluation by an independent child study team
did not constitute a “substantial victory.” App. at 13. In
addition, the District Court stated that “Plaintiffs did not prevail
beyond the basic requirements of the IDEA and N.J.A.C. 1:6A-
14.4, and cannot be considered a prevailing party because of
their failure to achieve any relief on the merits of their claim that
materially altered their legal relationship with CBE. Thus, an
award of attorney[s’] fees is inappropriate.” App. at 13-14.

Plaintiffs appeal from the District Court’s order granting
summary judgment to CBE. Plaintiffs contend that the consent
orders entered by the ALJ rendered them the prevailing party and
that their success was significant. In response, CBE contends
that pursuant to the Supreme Court’s decision in Buckhannon
Bd. v. West Virginia D.H.H.R., 532 U.S. 598 (2001), attorneys’
fees cannot be granted for settlements entered into in the course
of administrative proceedings. CBE further contends that even
if attorneys’ fees can be recovered for consent orders entered
into pursuant to administrative proceedings, the District Court
correctly found that plaintiffs had only de minimis success in
this case.

II.

6
 This court has jurisdiction pursuant to 28 U.S.C. § 1291.
We review a grant of summary judgment de novo, applying the
same standard as did the district court. Antonelli v. New Jersey,
419 F.3d 267, 272 (3d Cir. 2005). In reviewing the grant of
summary judgment, we must view the underlying facts and all
reasonable inferences therefrom in the light most favorable to
the party opposing the motion. In re Flat Glass Antitrust Litig.,
385 F.3d 350, 357 (3d Cir. 2004). Summary judgment is
appropriate where there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter of law.
See Fed. R. Civ. P. 56.

This court reviews the District Court’s denial of
attorneys’ fees for abuse of discretion. Pierce v. Underwood,
487 U.S. 552, 559 (1988); Morgan v. Perry, 142 F.3d 670,
682-83 (3d Cir.1988). An abuse of discretion occurs when a
district court’s decision “rests upon a clearly erroneous finding
of fact, an errant conclusion of law or an improper application of
law to fact.” Hanover Potato Products, Inc. v. Shalala, 989 F.2d
123, 127 (3d Cir. 1993) (quotation marks and citations omitted).
However, if the District Court denied the fees based on its
conclusions on questions of law, our review is plenary.
Washington v. Heckler, 756 F.2d 959, 962 (3d Cir.1986).

III.

A. The Buckhannon Standard

Under the “American Rule,” parties are typically
responsible for their own attorneys’ fees. See Alyeska Pipeline
Service Co. v. Wilderness Society, 421 U.S. 240 (1975). As
noted above, however, the IDEA, 20 U.S.C. § 1440, et seq.,
contains a specific provision authorizing an order for such fees
as “part of the costs to the parents of a child with a disability
who is the prevailing party.” J.O. ex rel. C.O. v. Orange Tp. Bd.
of Educ., 287 F.3d 267, 271 (3d Cir. 2002) (citing 20 U.S.C. §
1415(i)(3)(B)).

In Buckhannon Bd. v. West Virginia D.H.H.R, the
Supreme Court clarified its interpretation of the term “prevailing

7
party.” 532 U.S. at 605. The Court held that in order to be a
“prevailing party,” a party must be “successful” in the sense that
it has been awarded some relief by a court. Id. at 603. The
Court noted that this concept of “success,” however, is not
inconsistent with a defendant’s voluntary compliance. The Court
acknowledged that a party benefitting from a settlement
agreement, for example, could be a “prevailing party,” provided
the “change in the legal relationship of the parties” was in some
way “judicially sanctioned.” Id. at 605; see also John T. ex rel.
Paul T. v. Delaware County Intermediate Unit, 318 F.3d 545,
556 (3d Cir. 2003).

This court has held that Buckhannon applies to the fee-
shifting provision of the IDEA. See John T., 318 F.3d at 556
(holding that “Buckhannon applies to attorney[s’] fee claims
brought under the IDEA fee-shifting provision”). In interpreting
Buckhannon, we have stated that “a stipulated settlement could
confer prevailing party status under certain circumstances,” John
T., 318 F.3d at 558 (emphasis in original); namely, where it
alters the legal relationship of the parties and is judicially
sanctioned. A stipulated settlement is judicially sanctioned
where it: 1) contains mandatory language; 2) is entitled “Order,”
3) bears the signature of the District Court judge, not the parties’
counsel; and 4) provides for judicial enforcement. Id. (citing
Truesdell v. Phila. Hous. Auth., 290 F.3d 159 (3d Cir. 2002));
see also Preservation Coalition v. Federal Transit Admin., 356
F.3d 444, 452 (2d Cir. 2004) (holding that Buckhannon does not
limit fee awards to enforceable judgments on the merits and
consent decrees); Christina A. v. Bloomberg, 315 F.3d 990, 993
(8th Cir. 2003) (holding that a court-approved settlement was not
enforceable by the court absent a new action for breach of
contract and therefore plaintiffs were not prevailing parties).

The District Court found that the consent decrees at issue
here met the requirements set forth in John T. and Truesdell.
The District Court noted that the Consent Order entered on
February 12 “(1) contain[ed] mandatory language stating that
[CBE] ‘will’ do certain things, (2) was entitled ‘Consent Order,’
(3) bore the signature of the ALJ, and (4) is enforceable under §
1983 and in state court.” App. at 10.

8
 CBE contends that to constitute a decree under
Buckhannon, a court must retain jurisdiction to enforce the
settlement and have the power to issue a citation for contempt
for non-compliance. It argues that because the ALJ here did not
and could not6 retain jurisdiction to enforce its consent orders in
accordance with Kokkonen v. Guardian Life Ins. Co. of
America, 511 U.S. 375 (1994), these orders lacked the judicial
imprimatur required by Buckhannon to confer prevailing party
status.

The Supreme Court had previously considered whether a
court maintains jurisdiction to enforce a settlement agreement
when it does no more than “so order” a stipulation and order of
dismissal that dismisses the complaint after settlement without
reference to the settlement agreement. Id. The Court held that
there was no jurisdiction, but noted that

[t]he situation would be quite different if the parties’ obligation
to comply with the terms of the settlement agreement had been
made part of the order of dismissal. . . . In that event, a breach
of the agreement would be a violation of the order and . . .
jurisdiction to enforce the agreement would therefore exist.

Id. at 38. Kokkonen suggests settlement of an administrative
proceeding is the equivalent of an administrative decree on the
merits where, as here, the parties’ obligation to comply with the
terms of the settlement agreement has been made part of the
order of dismissal. See A.R. ex rel. R.V. v. New York City
Dept. of Educ., 407 F.3d 65 (2d Cir. 2005).

6
See, e.g. Bellesfield v. Bd. of Educ. of Randolph, 96
N.J.A.R. (EDU) 35 (N.J. Adm. 1995) (“Administrative Agencies
only have those powers specifically granted either expressly or by
implication. An Administrative Officer is a creation of Legislation
who must act only within the bounds of the authority delegated to
him. . . . [and] does not have the power and is not the appropriate
forum . . . for enforcement.”)(citations and quotation marks
omitted).

9
 The Court of Appeals for the Second Circuit has
convincingly addressed and rejected an argument similar to the
one that CBE makes here. In A.R., the parents of disabled
children instituted four separate New York State administrative
proceedings challenging, under the IDEA, the special
educational programs that the New York City Department of
Education had provided for disabled children. In two of the four
proceedings, impartial hearing officers entered decisions for the
plaintiffs on the merits. In the two others, impartial hearing
officers issued “Statements of Agreement and Order” that
recorded the terms of settlement agreements between the parties.
The plaintiffs then sought attorneys’ fees. The Court of Appeals
held that IDEA administrative decisions may, in certain
circumstances, confer prevailing party status. It noted that
although an administrative decision on the merits in an IDEA
case does not have judicial imprimatur, it has administrative
imprimatur:

Its terms are enforceable, if not by the IHO itself,7 then by
a court, including through an action under 42 U.S.C. §
1983. . . . [W]e conclude that the combination of
administrative imprimatur, the change in the legal
relationship of the parties arising from it, and subsequent
judicial enforceability, render such a winning party a
‘prevailing party’ under Buckhannon’s principles.

A.R., 407 F.3d at 76 (emphasis in original).

The Second Circuit specifically rejected the argument
made by the Board of Education there, similar to that made by
CBE here, that plaintiffs “cannot be ‘prevailing parties’ because
the IHOs conducting their hearings lacked jurisdiction to enforce
the terms of the settlement agreements . . . . Under our analysis,
the fact that the IHOs, as is common in administrative
procedures, have no enforcement mechanism . . . is irrelevant, at
least so long as judicial enforcement is available.” We are

7
IHOs are Impartial Hearing Officers who are appointed by
the local board of education.

10
persuaded by the analysis in A.R.

CBE argues that because N.J. Admin. Code § 1:1-19.1
(2006) mandates review of settlements by an ALJ, the ALJ’s
signature here does not provide the required judicial imprimatur;
it simply attests to the fact that the Orders were not contrary to
law. CBE cites to Christina A. v. Bloomberg, 315 F.3d 990 (8th
Cir.2003), in support of this proposition. In Christina A., the
plaintiffs, inmates at a training school who had challenged the
education being provided, obtained a hearing and approval of a
settlement pursuant to Fed. R. Civ. P. 23(e), which requires that
“[t]he court must approve any settlement . . . of a certified class.”
The Eighth Circuit held that they were not prevailing parties for
purposes of fees because this type of agreement is not
enforceable by a court absent a separate breach of contract
action, and therefore, does not bear the necessary judicial
imprimatur.

As is clear from A.R., a settlement of administrative
proceedings that is judicially enforceable meets the Buckhannon
requirements. Because the consent orders entered here were
enforceable through an action under 28 U.S.C. § 1983 and
under state law, these consent orders, unlike those in Christina
A., satisfy Buckhannon.

B. Prevailing Party Status

We turn to the basis on which the District Court denied
plaintiffs’ motion for attorneys’ fees: its conclusion that
plaintiffs “cannot be considered [ ] prevailing part[ies] because
of their failure to achieve any relief on the merits of their claim
that materially altered their legal relationship with CBE.” App.
at 13. The Supreme Court has rendered a number of decisions
on this issue. In Farrar v. Hobby, the Court held that “a plaintiff
‘prevails’ when actual relief on the merits of his claim materially
alters the legal relationship between the parties by modifying the
defendant’s behavior in a way that directly benefits the
plaintiff.” 506 U.S. 103, 111-12 (1992) “[P]laintiffs may be
considered ‘prevailing parties’ for attorney[s’] fees purposes if
they succeed on any significant issue in litigation which achieves

11
some of the benefit the parties sought in bringing suit.” Hensley
v. Eckerhart, 461 U.S. 424, 433 (1983) (emphasis added)
(quotation marks and citation omitted). Thereafter, the Court
stated that, to succeed, “at a minimum, . . . the plaintiff must be
able to point to a resolution of the dispute which changes the
legal relationship between itself and the defendant.” Texas State
Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792
(1989).

We summarized our review of the applicable legal
principles in Ridgewood Bd. of Educ. v. N.E. ex rel. M.E.,
where we held that a resolution “materially alters the legal
relationship between the parties” when it “modif[ies] the
defendant’s behavior in a way that directly benefits the
plaintiff.” 172 F.3d 238, 251 (3d Cir. 1999) (citations and
quotation marks omitted).

The Supreme Court noted that certain victories may be
“technical or de minimis” but characterized its approach as
adopting a “generous formulation” of “prevailing party” status.
See Texas State Teachers, 489 U.S. at 792; J.O., 287 F.3d at 271.
In a later case, the Court clarified the distinction that exists
between the issue of plaintiff’s eligibility for an attorney’s fee
award and the amount of the attorney’s fee that should be
awarded.

In Farrar, the Court first explained the meaning of
“technical” victory by providing the following example:

In [Texas State Teachers], the District Court declared
unconstitutionally vague a regulation requiring that
“nonschool hour meetings be conducted only with prior
approval from the local school principal.” . . . [T]his
finding alone would not sustain prevailing party status if
there were “‘no evidence that the plaintiffs were ever
refused permission to use school premises during
non-school hours.’” . . . Despite winning a declaratory
judgment, the plaintiffs could not alter the defendant
school board’s behavior toward them for their benefit.

12
Farrar, 506 U.S. at 113. The Court then stated:

Now that we are confronted with the question
whether a nominal damages award is the sort of
“technical,” “insignificant” victory that cannot
confer prevailing party status, we hold that the
prevailing party inquiry does not turn on the
magnitude of the relief obtained. We recognized
as much in Garland when we noted that “the
degree of the plaintiff’s success” does not affect
“eligibility for a fee award.”

Although the “technical” nature of a
nominal damages or any other judgment does not
affect the prevailing party inquiry, it does bear on
the propriety of fees awarded under § 1988.

Farrar, 506 U.S. at 113-14 (emphasis in original; citations
omitted).

The District Court’s finding that plaintiffs’ success was
not “substantial” is largely irrelevant to a determination of
whether or not they were prevailing parties. “‘[T]he degree of
the plaintiff’s overall success goes to the reasonableness of the
award under Hensley, not to the availability of a fee award vel
non.’” Truesdell, 290 F.3d at 166 (3d Cir. 2002) (quoting Texas
State Teachers, 489 U.S. at 782). The relevant inquiry is
whether plaintiffs’ success was significant. Regardless of how
substantial their success, if plaintiffs succeeded on a significant
issue they are entitled to prevailing party status.

Plaintiffs here received all that they sought. Specifically,
they sought that P.N. be returned to school immediately, that
CBE reimburse them for the cost of all psychological services
received by P.N., that CBE hold a meeting to develop a section
504 accommodation plan for P.N., that CBE pay for P.N.’s
psychologist to participate in said meeting, and that the child
study team evaluation requested by the school be performed by
an independent child study team.

13
 Plaintiffs obtained orders from the ALJ requiring that
each of these demands be met. The Orders benefitted P.N. and
forced CBE to change its behavior, thus altering their legal
relationship. As such, the Orders meet the standards enunciated
by the Supreme Court.

The District Court’s conclusion that the plaintiffs’ failure
to “prevail beyond the basic requirements of the IDEA,” App. at
13, and achieve substantial relief precluded them from prevailing
party status is perplexing. The purpose of the fee provision in
IDEA is to enable parents or guardians of disabled children for
whom the statute was enacted to effectuate the rights provided
by the statute. To suggest, as CBE does, that plaintiffs must
establish a new right or expand the requirements of the IDEA in
order to obtain attorneys’ fees is to ignore the Supreme Court’s
“generous formulation” of the term “prevailing party.” Texas
State Teachers, 489 U.S. at 792. As required by the Supreme
Court’s interpretation of “prevailing party,” discussed supra, the
Orders altered the legal relationship between the parties by
compelling the school to reinstate P.N. and by forcing CBE to
act in accordance with the IDEA.

CBE contends that the relief obtained in this case is
identical to the relief obtained in J.O., 287 F.3d at 267, where
the plaintiff was denied attorneys’ fees. The cases are
distinguishable. In J.O., this court held that a party cannot be a
prevailing party if it receives interim relief that is not merit-
based. The plaintiff in J.O. filed suit for attorneys’ fees after an
ALJ granted her request that her child, C.O., be reinstated in the
public high school. The ALJ’s order to reinstate C.O. in school
“[was] effective only until an appropriate placement could be
found for C.O. or until a ‘further Order of an [ALJ], or until the
issuance of a final decision in this matter.’” J.O., 287 F.3d at
274. This court characterized the reinstatement as a “stay-put”
order to maintain the status quo that would have no effect on
C.O.’s further educational placement, rather than a determination
of the merits of the case. Thus, the order did not render the
plaintiffs the prevailing party.

CBE argues that, like C.O., P.N. was returned to his

14
previous placement in high school. This argument is unavailing,
however, because, unlike the order in J.O., there is no indication
that the Orders at issue here are temporary stay-put orders. The
Orders do not state that P.N.’s reinstatement is pending a further
hearing or proceeding, or that the reinstatement will end on any
particular date. Rather, the Orders unconditionally require his
reinstatement in school. Moreover, plaintiffs were successful on
other fronts. As noted above, they received, inter alia,
reimbursement for psychological services and an evaluation by
an independent child study team rather than the CBE’s child
study team, as CBE wanted.

CBE also contends that insofar as P.N. obtained an IEP,
this was only a de minimis victory. CBE cites to John T., 318
F.3d at 545, for the proposition that obtaining an IEP does not
give a plaintiff prevailing party status. Once again, the cases are
not comparable. In John T., we held that plaintiffs who had
obtained an acceptable IEP were not entitled to prevailing party
status only because the IEP was achieved through private
negotiation. We stated, “Although John T. undoubtedly realized
an objective of his litigation upon obtaining an acceptable IEP
which placed him in public schools, this result was not
‘judicially sanctioned’ as required by Buckhannon. John T. and
[the defendant] developed the IEP through negotiations out of
court.” Id. at 560. We did not hold, as CBE contends, that
securing an IEP is insufficient to obtain prevailing party status.
Our analysis focused only on the fact that the IEP was achieved
through “negotiations out of court.” 318 F.3d at 560.8

8
The District Court’s conclusion that the ALJ’s order
requiring reimbursement of P.N. for $425 in psychologist’s fees
was a de minimis recovery that could not make P.N. a “prevailing
party” is particularly troubling for two reasons. First, as we have
pointed out, there is no de minimis exception to the rule that a
plaintiff “prevails” whenever “relief on the merits of his claim
materially alters the legal relationship between the parties by
modifying the defendant’s behavior in a way that benefits the
plaintiff.” Farrar, 506 U.S. at 111-12. See p. __, infra. In Farrar,
for example, the Supreme Court found a plaintiff who received $1

15
 Because plaintiffs are prevailing parties who have
achieved success on significant issues, we will reverse the
District Court’s Order granting summary judgment to CBO, and
remand this case to that court with instructions to award
reasonable attorneys’ fees to plaintiffs.

in nominal damages to be a prevailing party. Second, even when
considered for the purpose of determining the amount of attorneys’
fees to be awarded, an award of $425 in the context of the IDEA
can hardly be regarded as de minimis. As Amici point out, IDEA
claims often involve low income families raising handicapped or
otherwise troubled children receiving some kind of public
assistance. See Br. Amici Curiae of Nonprofit Educational
Organizations at 19. Indeed, we believe the IDEA’s fee shifting
provision is specifically designed to protect those families for
whom $425 is not a de minimis amount of money.

16