Appeal from the United States District Court for the Northern District of Indiana, Lafayette Division. No. 81 C 29 -- Allen Sharp, Judge.
Wood, Posner, and Flaum, Circuit Judges.
In Doe v. Koger, 710 F.2d 1209 (7th Cir. 1983), this court reaffirmed the proposition that prevailing plaintiffs are not entitled to attorneys' fees under section 615 of the Education of the Handicapped Act of 1975, 20 U.S.C. § 1415 (1982) (EHA), because EHA, which makes no provision for attorneys' fees, provides the exclusive remedy for claims concerning school placement decisions affecting handicapped children. This appeal raises a related issue: whether prevailing defendants are entitled to attorneys' fees in an action cognizable only under EHA. The district court held that the appellants were not so entitled, and we affirm, although for reasons different from those of the district court.
The appellees, plaintiffs below, filed their complaint on June 11, 1981. In the complaint they alleged that the appellants, various Indiana state and local agencies and officials responsible for education and mental health, had denied their daughter a free, appropriate, public education. Jurisdiction was alleged pursuant to 28 U.S.C. §§ 1331 and 1343 and section 615 of EHA. The appellees sought damages and also sought attorneys' fees pursuant to 42 U.S.C. § 1988.
The appellants subsequently answered, and the parties submitted discovery requests and responses. The appellants then moved for summary judgment. The district court granted the motion, holding (1) that EHA did not provide a private cause of action for damages; (2) that the appellees had failed to comply with EHA's statutory requirements by removing their daughter from her current educational placement before completing the administrative remedies available under EHA; (3) that the appellees had not exhausted available administrative procedures; and (4) that the appellees' claim was barred by res judicata.
The appellants next filed a motion for award of attorneys' fees pursuant to 42 U.S.C. § 1988.*fn1 The appellants argued that the appellees' claim for damages became meritless after this court's decision in Anderson v. Thompson, 658 F.2d 1205 (7th Cir. 1981), and that the appellants were therefore entitled to attorneys' fees for efforts expended after the Anderson decision in prosecuting their motion for summary judgment.
The district court denied the appellants' motion for fees, holding that Anderson barred a fee award to any prevailing party, either plaintiff or defendant.*fn2 Notwithstanding this disposition, the district court suggested that the appellees had litigated in bad faith: (1) by pursuing their claim after this court's decision in Anderson and the Fourth Circuit's decision in Stemple v. Board of Education, 623 F.2d 893 (4th Cir. 1980), cert. denied, 450 U.S. 911, 67 L. Ed. 2d 334, 101 S. Ct. 1348 (1981); (2) by failing to exhaust state administrative remedies; (3) by failing to plead or show bad faith by the appellants or danger to their daughter's health;*fn3 and (4) by filing this action after an almost identical action had been dismissed with prejudice in state court. The appellants filed a timely notice of appeal.
In addition to the procedural history described above, the factual setting from which this action arose must also be briefly summarized to establish a context for the issues raised by this appeal. The appellees Donald G. Benner and Mary Lou Benner (the Benners), are the parents of plaintiff Amy Benner. Amy is a child with multiple handicaps. The appellees allege and the appellants concede that, prior to May 1978, Amy was a student in the special education program at Goodland Elementary School in South Newton, Indiana. The district court found that a case conference was held on August 7, 1978, to review Amy's continued placement at Goodland. The conference had been requested by the Benners who, the district court found, desired to place Amy in a residential program. As a result of this conference, an independent evaluation of Amy was performed. The evaluation concluded that "it would be in Amy's best interest" if Amy were placed in a residential program. The district court noted that this evaluation did not conclude that Amy was in need of a residential placement, but rather it concluded only that Amy could benefit from such a placement.
The district court then found that, after only beginning the administrative procedures to determine an appropriate educational placement for Amy, her parents removed Amy from her educational placement at Goodland and enrolled her in a residential placement, where she remained while subsequent administrative proceedings were conducted.
Finally, we present some additional facts contained in the record, with respect to which the district court made no findings. In doing so, we read the facts in the light most favorable to the appellees.*fn4 Amy's parents continued to pursue administrative remedies both before and after they removed her from her educational placement at Goodland. The appellees allege and the appellants South Newton School Corporation and Kedrick E. Fisher concede that an evaluation was conducted by the appellant Division of Special Education which suggested that Amy's educational placement at Goodland was inadequate. The parties remained unable to agree upon a placement for Amy, and the Benners continued to press their appeal.
On or about January 17, 1980, the Benners filed a petition in the Circuit Court of Newton County to review the decision of the appellant Commission on General Education of the Indiana State Board of Education; the Commission had upheld a recommendation of the appellant Division of Special Education, Indiana State Board of Education, that Amy be placed at Northern Indiana State Hospital (NISH). After a change in venue the parties agreed to a settlement whereby the Division of Special Education would reconsider an application for residential placement. Pursuant to this settlement the state court action was dismissed with prejudice. Special Education ...