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Legal Updates for Special Education Law

Legal Update for Special Education Law – Updates from the U.S. Department of Education

Legal Update for Special Education Law – December 2025

December 1, 2025

by Christopher J. Conrad

The Dismantling of the U.S. Department of Education Continues

The Trump Administration is continuing its efforts to shutter the U.S. Department of Education (DOE) by delegating the responsibility of administering several billions of dollars allocated for certain programs to other federal agencies. On Tuesday, November 18, 2025, the DOE issued a press release announcing six new interagency agreements (IAAs) with the Departments of Labor (DOL), Interior (DOI) and Health and Human Services (HHS) to “ensure efficient delivery of funded programs, activities, and move closer to fulfilling the President’s promise to return education to the states.” The stated purpose of these new IAAs is to “streamline federal education activities on the legally required programs, reduce administrative burdens, and refocus programs and activities to better serve students and grantees.” 

Of particular note for K-12 schools, the DOE and DOL are establishing the Elementary and Secondary Education Partnership. With this new Partnership, the DOL states it “will take on a greater role in administering federal K-12 programs, ensuring these programs are better aligned with workforce and college programs to set students up for success at every part of their education journey.” Further, the DOL states it “will manage competitions, provide technical assistance, and integrate [DOE’s] programs with the suite of employment and training programs DOL already administers.” And according to a related Fact Sheet issued jointly by the DOE and the DOL, the agencies “will utilize available statutory authorities to empower parents and states, promote innovation, and deliver process improvements in pursuit of better outcomes for students in elementary and secondary education.”

The Partnership effectively will result in the DOL overseeing one of the largest streams of federal funding for K-12 schools, including Title I funding dedicated to schools serving low-income communities. The joint Fact Sheet makes clear that the following programs, among others, are now included in the Partnership:

Title I, Part A: Improving Basic Programs Operated by Local Educational Agencies
Title I, Part B: Improving Academic Achievement of the Disadvantaged—State Assessment Grants
Title I, Part C: Education of Migratory Children
Title I, Part D: Prevention and Intervention Programs for Children and Youth Who Are Neglected, Delinquent or At-Risk 

The agencies have given assurance that states will continue to receive all formula funds, including Title I funding that supports low-income students; however, the states will now receive these funds from the DOL, not the DOE. And the agencies stated, “[t]here is no anticipated adverse impact on eligible agencies, entities, and institutions, as… “[a]ll programs will continue to be administered in accordance with the applicable statutory requirements.”

For now, the DOE will retain responsibility for administering IDEA-funding for students with disabilities. As well, the DOE’s Office for Civil Rights remains more or less intact—although staffing within the Office has been greatly reduced by layoffs and voluntary departures—and the DOE will continue to investigate complaints of disability discrimination. Still, DOE Secretary Linda McMahon has expressed publicly, including during her confirmation hearing, her belief that HHS eventually could take over the role of enforcing disability rights. 

Legal Update for Special Education Law – December 2025 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

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Ohio Supreme Court Holds That a Binding Appraisal Award May Not Be Set Aside Absent Specific Evidence of Manifest Mistake or Fraud

On July 23, 2026, the Ohio Supreme Court issued a rare opinion on the binding effect of an appraisal award in a property insurance policy.  The Court in One Church held: A binding appraisal award will not be set aside unless an error is so palpably wrong that it undermines the intent of the agreement, such as corruption or gross mistake, not a mere error of judgment—To plead a claim of mistake with particularity as required by Civ.R. 9(B), facts alleged in a complaint must constitute the elements of mistake—Allegation that additional, hidden damage was discovered after appraisal award failed to state a claim of mistake that could justify setting aside binding appraisal.  The case arose out of a claim brought by One Church against its insurer, Brotherhood Mutual Insurance Company for roof damage from a storm. Pursuant to the terms of the insurance policy, the parties agreed to submit the matter to appraisal. The two appraisers inspected the building, and both appraisers agreed that the damages were $313,271.98. The insurer paid the agreed appraised amount.  Thereafter, the insured submitted a claim for an additional $206,663.09 in damages. The insured argued that these additional damages were not discovered until after the repairs began, and that they should be permitted to submit an additional claim, even though there had already been a binding appraisal of damages. The insurer refused to pay the additional damages, and the insured sued for breach of contract and bad faith.  In the trial court, the insurer moved to dismiss for failure to state a claim, arguing that the binding appraisal award barred any further claims. The insured took the position that additional hidden damages could not be discovered until after the repairs began, and therefore there was a mutual mistake. The trial court dismissed the case on the insurer’s motion, because there was no “evidence of fraud, misfeasance, or mistake”. The Court of Appeals agreed that appraisal awards are generally binding, but noted that an appraisal award can be set aside for fraud or manifest mistake. The Court of Appeals reversed and remanded the case to the trial court, finding that the insured had pled mistake with sufficient particularity. The insurer appealed to the Ohio Supreme Court. On appeal, the Ohio Supreme Court reversed the Court of Appeals, and reinstated the trial court decision dismissing the case for failure to state a claim upon which relief can be granted. The Supreme Court found that since the insured had already demanded appraisal, and the appraisal award was binding, “something more than error of judgement, such as corruption in the arbitrator, or gross mistake” must be pled with particularity, and proven for the insured to override the appraisal award. Since the complaint did not allege fraud or manifest mistake with sufficient particularity, something more than a mere error of judgment, the complaint was insufficient to state a claim.  The complaint in this case did not challenge the appraisal award. It pled that additional damages were discovered that were not apparent when the appraisal was done. It did not specify “who discovered the damages, how they were discovered, where they were found, why they were previously hidden, or why they rise to the level of a manifest mistake that the “appraiser would have corrected...had it been called to his attention”. Id at ¶22 citing Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970). Cases deciding the effect of appraisal awards are unusual. The Ohio Supreme Court’s decision in One Church relies primarily on 19th century case law for its conclusion. This emphasizes the fact that there is minimal case law deciding the effect of binding appraisal clauses in property insurance policies, and makes this case all the more significant. A lengthy dissent was written by Justice Fisher, who would have affirmed the Court of Appeals decision reversing and remanding the case for a decision on the merits. Of course, the decision works both ways, and an insurer dissatisfied with a binding appraisal award will likewise be without further recourse absent evidence of corruption, fraud, misfeasance, or manifest mistake, which must be pled with particularity. To constitute manifest mistake, “the mistake must be of such character that the arbitrator or appraiser would have corrected it had it been called to his attention.”  Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970).  The majority opinion does not specifically identify what would have been sufficient to plead mistake with particularity, or if the insured could have amended the complaint to overcome the deficiencies. The dissent argues that this was not really a case alleging mistake, but rather a question of contract interpretation. The insured did not challenge the appraisal, but argued that the hidden damage was not part of the appraisal, and the appraisal only covered the known damages.  However, this argument did not carry the day with the majority.  *Thomas F. Glassman, a shareholder in Marshall Dennehey’s Cincinnati office, filed a brief in the Ohio Supreme Court on behalf of the Ohio Association of Civil Trial Attorneys, in support of the insurer’s position.

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