Appeals from the United States District Court for the Western District of Wisconsin. Nos. 08 CV 00187 & 08 CV 00189-Barbara B. Crabb, Judge.
The opinion of the court was delivered by: Manion, Circuit Judge.
Before CUDAHY, MANION, and WILLIAMS, Circuit Judges.
The Appellee C.D. is now a fifth-grade student in the Marshall Joint School District. In kindergarten he was diagnosed with a rare genetic disease, and since then the school district has provided him with additional resources in his academic classes and special education in gym. When he was in second grade the school district reevaluated his eligibility for special education, and a team of educational professionals determined that he no longer met the criteria. His parents disagreed and sought administrative review; the administrative law judge ("ALJ") conducted a lengthy hearing, concluded that the school district had erred, and found that C.D. was still eligible for special education. The school district appealed to the district court, which affirmed, and now it appeals to this court. Because the ALJ applied the wrong legal standard in the eligibility analysis and there is not substantial evidence to support her findings, we reverse.
In 2004, C.D. was diagnosed with Ehlers-Danlos Syndrome ("EDS"), hypermobile type, which is a genetic disease that causes joint hypermobility, commonly called double-jointedness. In C.D.'s case the symptoms are serious: he has poor upper body strength and poor postural and trunk stability, and he suffers from chronic*fn1 and intermittent pain. In 2006, he was also diagnosed with attention deficit hyperactivity disorder, inattentive type.
After the EDS diagnosis, C.D. was evaluated and deemed eligible for special education services under the Individuals with Disability Education Act, 20 U.S.C. §§ 1400, et seq. ("IDEA" or "Act"). As part of the process, the school district assembled a team of educational professionals to develop an Individualized Education Program ("IEP") for him. Under the IEP, he received adaptive physical education six times a month, physical therapy, occupational therapy, assistive technology, supplemental aids and services, and program modifications in his academic classes. Specifically, his first IEP included providing C.D. with frequent bathroom breaks; positioning aids; extra time to complete academics; motor and self-help tasks; and fine motor adaptations (tape recorder, dictation and limited writing assignments). In the classroom, he used a floor rocker to conserve energy, a special chair at work tables, and a slant board. And when he moved around the school, he could ride in a wagon if walking made him too fatigued. C.D., 592 F. Supp. 2d at 1063.
In January 2006, when C.D. was in first grade, a second IEP was created that contained new goals and strictures for his participation in gym class. Among other measures, the IEP called for a periodic consultation between C.D.'s adaptive gym teacher, Stefanie Pingel, and his regular gym teacher before each class and at least fifteen minutes of consultation each month between Pingel and his physical therapist and occupational therapist. C.D., 592 F. Supp. 2d at 1063. A year later, as prescribed by the Act, the team began a periodic reevaluation of C.D.'s eligibility for special education. At the time, C.D. was engaging in regular gym class with certain limits placed on his participation to avoid injury; he also met six times a month with Pingel for adaptive physical education, which is simply another name for special education in gym-we use the terms interchangeably here. The adaptive physical education consisted of providing alternative activities for C.D., so instead of regular pushups, C.D. would do wall pushups; instead of regular jumping jacks, he would do "snow angels" or do the jumping jacks on a mat. All of this reduced the impact on his joints. In addition, the rules for some of the games the students played were tweaked to allow him to safely participate.*fn2 These modifications were in place when C.D. was in second grade; now he has finished fifth grade, and the school is operating under the same IEP, and providing the same exact services, as mandated by law, until this suit is resolved. 20 U.S.C. § 1415(j).
Under the Act, schools must follow a two-step process to determine whether a student is a "child with a disability" and thereby eligible for special education services. 20 U.S.C. § 1401(3)(A). First, the student must have one of the ailments listed in the statute. Although EDS is not listed, there is a catch-all category titled "other health impairment." Id. § 1401(3)(A)(i). For a health condition to qualify as an "other health impairment," it must manifest itself in one of a variety of ways, and it must "[a]dversely affect the child's educational performance." 34 C.F.R. § 300.8(c)(9)(ii). Second, if the child's condition does adversely affect his educational performance, then the team must determine whether as a result he "needs special education." 20 U.S.C. § 1401(3)(A)(ii).
During the reevaluation, the team found that C.D. was performing at grade level in his classes. He had met many of his specific IEP goals for gym, and he no longer had many of the original problems that prompted his need for special education in gym. After considering all the evidence, the team concluded that the EDS did not adversely affect his educational performance.
Although this finding alone disqualified C.D. as a "child with a disability," the team also addressed the second step in the analysis: whether "by reason thereof, [he] needs special education and related services." Id. It found that C.D. did not need special education because his needs could be met in a regular education setting with some slight modifications for his medical and safety needs. These modifications included providing rest breaks and monitoring his progress through the day using an activity log. Concerning his safety needs, the team recommended that a health plan be drafted by his physicians and the school nurse, setting out precise restrictions on his participation in gym class. This health plan would limit his repetitions in certain activities and provide alternative means for completing others.
C.D.'s parents disagreed with the team's conclusions. They maintained that because he cannot safely perform all of the activities in gym class, he is entitled to special education. They sought and obtained administrative review of the team's decision. Following eight days of hearings, the ALJ found that when the team evaluated his eligibility it committed several errors. Ultimately, the ALJ credited the opinion of one of C.D.'s physicians, Dr. Pamela Trapane, that the EDS causes him pain and fatigue and when he experiences that "it can affect his educational performance." Id. at 10. Based on that, the ALJ found that C.D.'s "ability to fully and safely perform and participate in certain physical activities at school, including regular PE class and recess, is adversely affected by his EDS." Id.
The ALJ also rejected the team's alternative finding that C.D. did not need special education. She dismissed the testimony of Stefanie Pingel, C.D.'s adaptive gym teacher, as unreliable. Id. at 12. And she specifically credited the opinion of Dr. Trapane over the team, finding that he "cannot safely engage in unrestricted participation in various activities of the regular PE program and that he requires special education, particularly specially designed PE and related services to meet his unique needs." Id. at 11.
The school district sought review by the district court. The district court did not receive any new evidence but instead relied on the record developed before the ALJ. It upheld the ALJ's findings. Specifically, on the issue of whether C.D. needed special education, the district court noted that "[a]lthough the school district makes convincing arguments and another fact finder might have reached a different conclusion, I cannot ...