Parent Loses Bid to Hold County Mental Health Agency Accountable After Governor's Veto

A parent filed a due process complaint against Orange County Health Care Agency (OCHCA) seeking reimbursement for her son's residential treatment center costs, arguing that OCHCA failed to timely complete a mental health assessment and then refused to find an appropriate residential placement. The ALJ found that OCHCA completed its assessment on time and that, because the Governor's 2010 line-item veto lawfully suspended the county mental health mandate after October 8, 2010, OAH had no jurisdiction over OCHCA's conduct after that date. All of the parent's claims were denied.

What Happened

Student is a 17-year-old with emotional disturbance (ED), diagnosed with post-traumatic stress disorder, dysthymic disorder, and generalized anxiety disorder. Due to serious mental health crises and dangerous behaviors, Parent unilaterally placed Student in a residential treatment center (RTC) in Utah in May 2010, paying for it out of pocket. The school district completed an initial IEP in August 2010, found Student eligible for special education services, and referred him to the Orange County Health Care Agency (OCHCA) for an AB 3632 mental health assessment — the California system that assigned responsibility for special education mental health services to county agencies.

OCHCA completed its assessment in October 2010 and recommended an educational residential placement. However, at the November 2010 IEP meeting, OCHCA told the team it was unsure whether it would even search for a placement, citing Governor Schwarzenegger's October 8, 2010 line-item veto that eliminated state funding for county mental health services. OCHCA never followed up. Parent later received a form letter saying the county considered itself relieved of all AB 3632 obligations. Parent had already settled her claims against the school district for educational costs. This hearing addressed her remaining claims against OCHCA for the residential (non-educational) portion of the RTC costs — roughly $55,000 in room and board plus travel expenses.

What the ALJ Found

On the assessment timing claim, the ALJ found that OCHCA actually completed its AB 3632 assessment on time. Parent consented to the assessment plan on September 2, 2010. OCHCA issued its report on October 14, 2010 — in time to hold an IEP meeting by the October 22, 2010 deadline. The delay in holding the IEP meeting until November 1, 2010 was the school district's responsibility, not OCHCA's. Because the district had already settled with Parent, OCHCA could not be blamed for the scheduling delay.

On the placement and services claims, the ALJ ruled that OAH had no jurisdiction over OCHCA's conduct after October 8, 2010. A California Court of Appeal decision (California School Boards Ass'n v. Brown) had confirmed that the Governor's line-item veto lawfully suspended the county mental health mandate for the 2010-2011 fiscal year. Once that mandate was suspended, OCHCA was no longer legally required to provide mental health services — and was no longer a "public agency" subject to due process jurisdiction under the IDEA for those services. The ALJ concluded that responsibility for Student's mental health services reverted back to the school district after October 8, 2010. Since Parent had already settled with the district, there was no remaining party responsible for the post-veto conduct.

What Was Ordered

All of Student's claims for relief were denied.
OCHCA was found to have prevailed on every issue.
No reimbursement was awarded for residential RTC costs, transportation, or any other expenses.

Why This Matters for Parents

Settling with one party can leave you without a remedy against another. Parent settled with the school district for educational costs and dismissed them from the case — but that meant when the claims against OCHCA failed, there was no remaining party who could be ordered to pay the residential costs. Before settling with any one agency, think carefully about whether you can still recover from others if things go wrong.
County mental health agencies and school districts share responsibility for AB 3632 services — but budget vetoes can shift that responsibility overnight. California's AB 3632 system assigned mental health services to county agencies, but a Governor's veto can legally suspend that mandate. When that happens, responsibility shifts back to the school district. If your child needs mental health-related services, make sure the IEP clearly names who is responsible — and that the district is accountable, not just the county.
Timing matters in assessment disputes. The ALJ carefully tracked each deadline: when consent was signed, when the 50-day clock started, when the assessment was due, and who caused any delays. If you believe an assessment was late, document every date — when you signed consent, when you received the report, and when the IEP was scheduled. The burden is on the parent to prove the agency caused the delay.
A county agency that refuses to participate in a hearing may still win on jurisdictional grounds. OCHCA did not appear at the hearing but filed a written brief arguing the ALJ had no authority over it. The ALJ agreed — at least for conduct after the veto. If a public agency claims it is not subject to due process jurisdiction, that argument must be taken seriously, and parents should seek legal advice before assuming all agencies can be held accountable in one hearing.

What Happened

What the ALJ Found

What Was Ordered

All of Student's claims for relief were denied.
OCHCA was found to have prevailed on every issue.
No reimbursement was awarded for residential RTC costs, transportation, or any other expenses.

Why This Matters for Parents

Settling with one party can leave you without a remedy against another. Parent settled with the school district for educational costs and dismissed them from the case — but that meant when the claims against OCHCA failed, there was no remaining party who could be ordered to pay the residential costs. Before settling with any one agency, think carefully about whether you can still recover from others if things go wrong.
County mental health agencies and school districts share responsibility for AB 3632 services — but budget vetoes can shift that responsibility overnight. California's AB 3632 system assigned mental health services to county agencies, but a Governor's veto can legally suspend that mandate. When that happens, responsibility shifts back to the school district. If your child needs mental health-related services, make sure the IEP clearly names who is responsible — and that the district is accountable, not just the county.
Timing matters in assessment disputes. The ALJ carefully tracked each deadline: when consent was signed, when the 50-day clock started, when the assessment was due, and who caused any delays. If you believe an assessment was late, document every date — when you signed consent, when you received the report, and when the IEP was scheduled. The burden is on the parent to prove the agency caused the delay.
A county agency that refuses to participate in a hearing may still win on jurisdictional grounds. OCHCA did not appear at the hearing but filed a written brief arguing the ALJ had no authority over it. The ALJ agreed — at least for conduct after the veto. If a public agency claims it is not subject to due process jurisdiction, that argument must be taken seriously, and parents should seek legal advice before assuming all agencies can be held accountable in one hearing.