MANSFIELD TOWNSHIP, N.J. -- As he began first grade in 1991, a boy known in legal papers as E. J. was performing schoolwork at or above grade level. His reading ability placed him in the 99th percentile. But the boy's teacher said he was restless and disruptive, repeatedly touched classmates and sometimes fought with them, blurted out noises and soiled his pants.
A few weeks later, E. J.'s mother asked school district officials to evaluate him to determine if he was disabled and eligible for special-education classes and services. Initially, officials refused, even though the mother had told them that the psychologist she sent the boy to had found he had attention deficit-hyperactivity disorder.
A long, nasty court fight ensued. And this one-school district in the hills of western New Jersey first received a scolding from an administrative law judge and later got an ominous ruling from a federal appeals court that the school district, and even individual officials and teachers, could be liable for compensatory and punitive damages.
The ruling, handed down by the 3rd Circuit Court of Appeals in Philadelphia, has alarmed school board officials across the country. It has prompted two national education organizations to ask Congress to amend the laws involved in E. J.'s case so that a school district would no longer be exposed to financial damages for education decisions made in good faith.
The scolding came in September 1994 from an administrative law judge in New Jersey, Richard McGill. He accused district officials of being unwilling to acknowledge that E .J. suffered from neurological disorders despite ample and reliable evidence. McGill said district officials engaged in "seemingly endless attacks" on the boy's mother and left her facing "an enormously burdensome struggle" to secure her son's legal rights.
Then last October, the federal appeals court found that between September 1991 and April 1993, the district violated the child's rights under two federal laws guaranteeing special school programs for disabled children -- the Individuals With Disabilities Education Act and the Rehabilitation Act of 1973.
In a rare move that is troubling school officials far beyond Mansfield Township, the court said E. J.'s mother could receive compensatory and punitive damages.
Sharon Moore, the school district's lawyer, said punitive damages could come out of the school officials' own pockets if it could be shown that they engaged in intentional wrongdoing.
The appeals court returned the case to a federal district judge in Trenton, N.J., for a trial on the merits of the case, and any possible damages that might be awarded. The trial has not yet been scheduled.
The appeals court finding on damages is novel, experts on special education said. Most lawsuits involving discrimination against the disabled end with school systems' being ordered to pay for private schooling, therapy or other special programs, they said.
That was done in this case. In September 1994, Mr. McGill ordered the district to send E .J. to a private academy and pay his tuition of $23,000 a year. In addition, the district pays nearly $13,000 more annually for his transportation, private psychological counseling and physical therapy, said Joseph L. Padden, the district's business administrator.
The threat of a financial-damage award is a "real heavy hammer," said Gwendolyn Gregory, deputy general counsel for the National School Boards Association.
"It's a very, very disturbing case for school districts across the country," Ms. Gregory said. "It could have really dire consequences. You're just giving parents money out of taxpayers' pockets."
Ms. Gregory argued that Congress never intended financial damages for violations of the Individuals With Disabilities Education Act. "It's blackmail to an extent," she said. "You'll just give parents whatever they want to avoid a lawsuit."
Ms. Gregory said the school boards association and the American Association of School Administrators want Congress to amend the laws to prohibit compensatory and punitive damage awards.
Although E. J., now 10, is in a private academy, his mother, who asked that she be identified only by her initials, W. B., as in the court papers, said she plans to pursue her federal suit.
"They should be accountable for their actions," she said of school officials. "They did very wrong. They let him wallow for two years socially, emotionally and academically. Why should I have to go to court to get help with his bathrooming problem? Kids were spitting at him because teachers wouldn't wipe his nose. If he had braces on his legs, they'd help him in gym and FTC classes. He has braces in his mind."