Doe v. East Lyme Board of Education, 962 F.3d 649, 120 LRP 18693 (2d Cir. June 18, 2020) is the latest installment of a long-running litigation. The current decision was the appeal of a remand to the district court. The district court was to determine remedies for a violation of the maintenance of placement duty in a dispute in which the defendant had prevailed on the merits of the proposed IEP. The underlying facts were that a student with autism and other conditions was not provided services under the stay-put IEP after an impasse developed between the defendant and the parent, and the parent filed a due process complaint. The court of appeals affirmed the bulk of the compensatory education order the district court entered on remand, which called for the defendant to reimburse the parent for full out-of-pocket expenses of $36,555.94 plus interest, and to place $203,478 in an escrow account for compensatory education crafted to meet the student’s current educational needs for six years or until the student graduates college, whichever is first. The court affirmed the time limit on use of the escrow account funds, as well as the provision for return of any unused funds to the school district.

The court, however, reversed a grant of decision-making power to the escrow agent to determine payouts, reasoning that the escrow agent could potentially reduce reimbursable services unilaterally. The court declared: “The escrow agent’s power to unilaterally reduce Doe’s access to the award amounts violates the IDEA’s requirement that adjustments to an award ‘must be justified to a hearing officer’” (quoting Reid v. District of Columbia, 401 F.3d 516, 527 (D.C. Cir. 2005)). Id. at 660.

The court also reversed the portion of the order that provided for the parent to pay half of the administrative fee on the escrow account, which the court held was a violation of the free education duty. The court affirmed the district court’s method of calculating the interest award. The court also adhered to its previous decision that the defendant offered the student an adequate IEP. A claim for tuition reimbursement, claims for the value of services provided by the parent but not in the stay-put IEP, and a challenge to the deeming of the date of filing for due process as the relevant start time for calculating the award of services were all barred by the doctrine of the law of case. Other claims were also rejected.

The key take-away for impartial hearing officers is that in crafting compensatory education relief, the hearing officer should not delegate to anyone the authority to potentially alter the award amount or its equivalent. The case is of a piece with M.S. v. Utah School for the Deaf & Blind, 822 F.3d 1128, 67 IDELR 195 (10th Cir. May 10, 2016), in which the court of appeals vacated a decision by the district court that had remanded to the defendant’s IEP team the issue of the choice of a residential placement at which compensatory services would be delivered. The court directed the district court to resolve issue itself, reasoning that delegation to the IEP team effectively puts the employees of the school in the position of a hearing officer and could trap the student in an endless litigation cycle.