Educational agencies across the country that are still reeling from the news they were named as defendants in a putative class action arising out of the COVID-19 school closures may be surprised to learn about the latest charge against them: Racketeering.
More than 500 students with disabilities are claiming in J.T. v. de Blasio that state and local agencies committed several types of fraud by accepting federal special education funding without providing the services for which those funds were allocated. According to the students’ Civil RICO Case Statement, the agencies’ conduct from March 20 onward violates the Racketeer Influenced and Corrupt Organizations Act.
Plaintiffs find civil RICO claims attractive because the statute allows them to recover three times their actual damages. In this case, the students are seeking money damages under Section 504. However, individuals seeking relief in a civil RICO claim can’t simply allege a conspiracy; they must demonstrate that the named defendants conducted an enterprise through a pattern of racketeering activity.
The students in J.T. v. de Blasio assert that the enterprise consists of state educational agencies and local educational agencies throughout the country. As described in the Civil RICO Case Statement, the actions allegedly forming the pattern of racketeering activity include mail fraud, wire fraud, the fraudulent transfer of money, the fraudulent receipt of money, and financial institution fraud.
U.S. District Court Judge Colleen McMahon, the judge assigned to the case, recently wrote that she had “serious doubts” about the students’ ability to sue districts throughout the country. She directed attorneys with the Brain Injury Rights Group, the law firm representing the students, to submit three 10-page briefs explaining why the students’ IDEA, Section 504, ADA, and constitutional claims should not be dismissed.
The students’ attorneys submitted the Civil RICO Case Statement along with the required briefs to support their RICO claims. The U.S. District Court, Southern District of New York, has not addressed these latest filings, which the attorneys submitted on Sept. 11.
In a late development on Friday, Judge McMahon issued an order to show cause given reports of unethical behavior by the plaintiff’s counsel.
This is a developing story. Check back for updates.
This article was originally published in Special Ed Connection®, an LRP publication.
