U.S. Supreme Court Rejects “Bad Faith” Standard in Disability Discrimination Cases

On June 12, 2025, the U.S. Supreme Court unanimously eliminated the heightened protection public schools had against liability for compensatory damages in cases involving Section 504 of the Rehabilitation Act (Section 504) or Title II of the Americans with Disabilities Act (ADA). AJT v Osseo Area Schools, Docket No. 24-249 (2025). It will now be easier for a person to prevail against a public school in a disability discrimination lawsuit if the allegation involves provision of educational services, including the provision of a free appropriate public education (FAPE).

In 1982, the Eighth Circuit created the heightened protection for public schools when it held that a person seeking compensatory damages for disability discrimination relating to the provision of educational services had to prove not only that school officials violated the law, but also that those officials acted with “bad faith or gross misjudgment.” See Monahan v Nebraska, 687 F2d 1164 (CA 8, 1982). The Sixth Circuit, whose decisions are binding in Michigan, adopted the same standard.

The “bad faith” standard made it more difficult for a person to prevail in disability claims against public schools than in lawsuits against other public entities. For example, a person alleging that school officials excluded their child from participating in field trips because of a disability had to be able to prove not only that the exclusion happened because of disability, but also that school officials acted in bad faith. In contrast, a person alleging that a public library had improperly excluded them from an event because of their service animal only had to prove the improper exclusion, not that there was personal animus against the individual with a disability. For many years, this higher standard made it more difficult for a plaintiff to obtain monetary damages from public schools when the case centered on the provision of a FAPE.

The student at issue in AJT v Osseo Area Schools has a form of epilepsy that significantly limits her physical and cognitive functioning. As a result of her disability, the student cannot attend school in the morning, when her seizures are much more frequent. The Minnesota school district she attended shortened her school day and did not provide educational services beyond the end of the school day. The student prevailed in an IDEA due process case against the district and was awarded significant compensatory education.

Her family then filed an ADA Title II and Section 504 lawsuit claiming disability discrimination and seeking compensatory money damages. A federal district court dismissed the claim because the student could not meet the high bar of proving “bad faith or gross misjudgment” on the part of school officials. A panel of Eighth Circuit judges upheld the dismissal but questioned the rationale for the higher standard that had been created over 40 years earlier. When appealed to the Supreme Court, the justices unanimously rejected the heightened protection for public schools.

The Supreme Court held that there was no legal basis for subjecting disability discrimination lawsuits concerning the provision of educational services to a different standard of proof than other disability discrimination claims. The Court recognized that when the Eighth Circuit and other courts adopted the bad faith or gross misjudgment standard, they were trying to “harmonize” the IDEA’s guarantee of a FAPE with Section 504’s anti-discrimination mandate. However, Congress had since amended the statute to clarify that the IDEA (and its predecessor) was not intended to limit a person’s ability to seek relief under Section 504, and later the ADA. See 20 USC § 1415(l).

The key takeaway from the Court’s decision is that if a parent or student sues a public school for disability discrimination related to the provision of a FAPE or meaningful access to the educational program, school officials cannot rely on a “bad faith or gross misjudgment” standard to shield the school from liability. If school attorneys recommend settlement rather than defending a case, the change brought by AJT v Osseo may be the reason why.