The opinion of the court was delivered by: LINDBERG
Plaintiff Community High School District 218 filed a five count complaint against the Illinois State Board of Education ("ISBE") and the Illinois Department of Human Services
("DHS") (collectively "Agency Defendants"); Joseph A. Spagnolo, in his official capacity as Illinois State Superintendent of Education, and Howard A. Peters III, in his official capacity as Secretary of DHS
(collectively "Director Defendants"); and Mr. and Mrs. B., the parents of J.B. ("Parent Defendants"). The complaint is brought under the Individuals with Disabilities Education Act ("IDEA"), P.L. 105-17 (eff. June 4, 1997), section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1997), and the School Code of Illinois, 105 ILCS 5/14-8.02(j) (1997). For the reasons set forth below, the court hereby grants summary judgment sua sponte in favor of Agency and Director Defendants on counts II through IV of the complaint.
I. Factual and Procedural Background
This action concerns the proper educational placement for J.B., a student with a history of severe psychiatric and behavioral disabilities. In December of 1992, J.B.'s parents applied for an Individual Care Grant ("ICG") from defendant DHS to place their son in a twenty-four hour residential care facility. 20 ILCS 1705/7.1 (1997), 59 IL ADC § 135.40 (1997). Their application was denied by an ICG eligibility determination panel and later by a director's level appeal board in accordance with the procedures set forth in 59 IL ADC § 135.50(h). After the appeal was denied, J.B.'s parents unilaterally placed their son in a twenty-four hour residential care facility in Pennsylvania known as Kid's Peace.
As J.B.'s parents awaited the final resolution of their ICG request, elementary School District 130 convened a multidisciplinary conference and determined that J.B. was not eligible for special education services under the IDEA, P.L. 105-17 § 614, or Article 14 of the Illinois School Code, 105 ILCS 5/14 et seq. (1997). J.B.'s parents challenged this decision in a Level I due process hearing under section 614(f)(1) of the IDEA. Both J.B.'s parents and School District 130 sought to join the DHS as a party to the hearing, but the motions for joinder were denied by the Level I hearing officer. On April 30, 1993, the Level I hearing officer ordered School District 130 to fund the entire cost of J.B.'s placement at Kid's Peace. School District 130 complied with this order through the end of the 1993-1994 school year, at which time J.B. became the programmatic and financial responsibility of plaintiff Community High School District 218.
The School District then filed the instant five count complaint. In count I, plaintiff challenges the administrative determination that J.B. needs residential placement in order to receive a free appropriate public education as guaranteed by the IDEA. In counts II through V, the School District argues that defendants ISBE and DHS failed to adopt an interagency agreement that meets the substantive requirements of the IDEA. While Parent Defendants moved to dismiss the entire complaint for lack of jurisdiction and failure to state a claim pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6), they were not implicated in counts II through V of the complaint and therefore lacked standing to seek dismissal of those counts under Rule 12(b)(6). The Agency and Director Defendants filed neither a motion to dismiss nor a motion for summary judgment. The court thereafter determined that plaintiff lacked standing to proceed with counts II through V of the complaint and dismissed them for lack of subject matter jurisdiction under Rule 12(b)(1).
The School District moved the court to vacate this order on the grounds that, by considering matters beyond the scope of the pleadings, the court effectively converted the motion to dismiss into a motion for summary judgment and should have allowed plaintiff to present additional evidence to establish jurisdiction. Fed.R.Civ.P. 12(c). While there is little question that the court may consider matters beyond the scope of the pleadings when it resolves questions pertaining to jurisdiction, see English v. Cowell, 10 F.3d 434, 437 (7th Cir. 1993), citing Crawford v. United States, 796 F.2d 924, 928 (7th Cir. 1986) ("The omission ... of a provision for converting a Rule 12(b)(1) motion into a summary judgment motion ... was not an oversight"), the court nevertheless elected to reexamine whether plaintiff's apparent failure to state a claim in counts II through V was sufficient to deprive the court of jurisdiction.
The federal courts lack subject matter jurisdiction over claims whose "unsoundness so clearly results from the previous decisions of [the Supreme Court] as to foreclose the subject and leave no room for the inference that the questions sought to be raised can be the subject of controversy." Hagans v. Lavine, 415 U.S. 528, 538, 39 L. Ed. 2d 577, 94 S. Ct. 1372 (1974). The Seventh Circuit has stated that this "substantiality doctrine" requires the court to examine the scope of its jurisdiction based on an assessment of the complaint that is confusingly similar to the analysis for failure to state a claim under Rule 12(b)(6). Ricketts v. Midwest National Bank, 874 F.2d 1177, 1180 (7th Cir. 1989). The failure to state a claim will not deprive the court of subject matter jurisdiction if the "complaint raises an arguable question of law which the court may ultimately resolve against the plaintiff." Id. at 1182 n.5, citing Neitzke v. Williams, 490 U.S. 319, 328, 109 S. Ct. 1827, 1833, 104 L. Ed. 2d 338 (1989). Thus:
If a federal statute upon which a claim is premised is interpreted to be inapplicable, it could be argued that the plaintiff has failed to present a federal question and thus subject matter jurisdiction is absent. However, the courts have uniformly held that in such instances the preferable practice is to assume that jurisdiction exists and proceed to determine the merits of the claim pursuant to Rule 12(b)(6) or Rule 56.
Health Cost Controls v. Skinner, 44 F.3d 535, 537 (7th Cir. 1995), quoting 2A James W. Moore et al., Moore's Federal Practice P 12.07[2.-1] (2d ed. 1994) (marks omitted). Unless the complaint bears a defect which is "clearly incurable," the court must "grant the plaintiff leave to amend, allow the parties to argue the jurisdictional issue, or provide the plaintiff with the opportunity to discover the facts necessary to establish jurisdiction." Shockley v. Jones, 823 F.2d 1068, 1073 (7th Cir. 1987).
In an abundance of caution, the court decided to give plaintiff further opportunity to address the jurisdictional issues raised in its order of dismissal. It therefore solicited briefs from the School District and Agency Defendants on the issue of whether the IDEA confers a private right of action on local school districts to challenge the adequacy of a state interagency agreement under section 612(a)(12)(A). The court then vacated its order of dismissal on May 27, 1997 and invited the School District to submit additional briefs and evidentiary materials to show why summary judgment should not be granted sua sponte in favor of Agency and Director Defendants on counts II through V of the complaint. Upon filing the requested materials, plaintiff withdrew count V of the complaint. The court then held an evidentiary hearing on counts II through IV of the complaint and granted plaintiff leave to file additional briefs in response to specific questions concerning the effect of the IDEA amendments that were enacted on June 4, 1997. The court now believes that plaintiff has had ample notice and opportunity to address the jurisdictional issues in this case and, for the reasons set forth below, will now grant summary judgment sua sponte in favor of Agency and Director Defendants on counts II through IV of the complaint.
Summary judgment is appropriate if the evidence establishes that there is no genuine issue of material fact and the non-moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In reaching this determination, the court must view the evidence and draw all permissible inferences in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Summary judgment may not be entered sua sponte unless the party who is adversely affected by that ruling is given adequate notice and a fair opportunity to be heard. English, 10 F.3d at 437; see also Goldstein v. Fidelity and Guaranty Ins. Underwriters, Inc., 86 F.3d 749, 750 (7th Cir. 1996). The Seventh Circuit has advised that granting summary judgment sua sponte warrants special caution and ...