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Legal Updates for Special Education Law

Legal Update for Special Education Law – Case Law Update

Legal Update for Special Education Law – July 2025

July 1, 2025

by Teresa O. Sirianni and William J. McPartland

U.S. Supreme Court Clarifies Standard for Disability Discrimination Claims in Education Under Section 504 and ADA

A.J.T., by and through her parents, A.T., et al. v. Osseo Area Schools, Independent School District No. 279, et al., 605 U.S. --- , --- S. Ct. ---, 2025 WL 1657415 (June 12, 2025)

In a ruling clarifying the rights of students with disabilities, the Supreme Court of the United States unanimously held that schoolchildren bringing claims under the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act are not required to show “bad faith or gross misjudgment” to recover damages related to educational services. 

This case alleged that a school district refused to provide supplemental instruction during the early evening to a special education student with a rare form of epilepsy that prevented her from attending school until midday. The District Court concluded that the child was entitled to the instruction and compensatory education. In addressing the parents’ suit for money damages under Section 504 and the ADA, the Eighth Circuit Court of Appeals dismissed that claim because the parents had not established that the school district’s refusal amounted to bad faith or gross misjudgment. 

The petitioner, A.J.T., a teenager with a rare form of epilepsy that severely limits her physical and cognitive functioning, suffers from seizures that are so frequent in the mornings that she cannot attend school before noon but is alert and able to learn between noon and 6 p.m. For the first few years of her schooling, A.J.T.’s school district accommodated her condition by providing her with afternoon and evening instruction and allowed her to avoid morning activities. In 2015, A.J.T.’s family moved, and her new school district, Osseo Area Public Schools, denied her parents’ request to provide evening instruction in A.J.T.’s IEP. This denial resulted in A.J.T. only receiving 4.25 hours of instruction per day as compared to the standard 6.5 hours of schooling received by nondisabled students in the district. A.J.T.’s parents filed an IDEA complaint with the Minnesota Department of Education, claiming a denial of FAPE. The administrative law judge ruled that the school district had violated the IDEA and ordered the school district to provide compensatory education and evening instruction. Federal courts affirmed the ruling, upholding the award of compensatory education under the IDEA.

A.J.T. and her parents then sued the school district in the Federal District Court under the ADA and the Rehabilitation Act, requesting a permanent injunction, reimbursement of certain costs and compensatory damages. The District Court granted summary judgment to the school district. The Eighth Circuit affirmed the judgment, holding that a school district’s failure to provide a reasonable accommodation was not enough to state a prima facie case of discrimination as established by prior case law. In addition, the Eighth Circuit upheld a requirement that a plaintiff prove that school officials’ conduct rose to the level of bad faith or gross misjudgment in order to recover damages under either the ADA or the Rehabilitation Act. Certain other courts of appeal have also applied the same heightened standard as the Eighth Circuit, but not all.

In reaching its decision resolving the split, the Supreme Court recognized that, outside of the educational services context, courts only require a “deliberate indifference” standard to obtain compensatory damages under the ADA and the Rehabilitation Act for intentional discrimination. However, the Court noted that the statutory remedial or substantive protections of Title II of the ADA or Section 504 of the Rehabilitation Act suggest that claims based on educational services should be subject to a more demanding standard. The Court further referenced the specific statutory language of the IDEA, which provides that nothing in the IDEA “shall be construed to restrict or limit the rights, procedures, and remedies available under” the ADA, the Rehabilitation Act, or other federal laws protecting disabling children’s rights, noting that a heightened standard of “bad faith or gross misjudgment” is irreconcilable with the unambiguous directive of this section of the IDEA. By imposing a heightened standard, the appeals court limited the ability of disabled schoolchildren to assert their independent rights under the ADA and the Rehabilitation Act, thereby making it more difficult to obtain remedies provided by Congress when it enacted this newer provision of the IDEA. Going forward, claims based on educational services brought pursuant to the ADA and the Rehabilitation Act should be subject to the same standards applied in other disability discrimination contexts. 

 

Legal Update for Special Education Law – July 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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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. 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