text:
    UNITED STATES of America, Plaintiff-Appellee, v. JP MORGAN CHASE BANK ACCOUNT NUMBER ENDING 8215 IN the NAME OF LADISLAO V. SAMANIEGO, VL: $446,377.36; JP Morgan Chase Bank Account Number Ending 7058 in the Name of Manuel Castro, VL: $361, 070.25, Defendants, Ladislao V. Samaniego; Manuel Castro, Claimants-Appellants.
    No. 14-16070
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted May 4, 2016, Pasadena, California
    Filed September 1, 2016

      Taylor Clarke Young (argued) and Robert A. Mandel, Mandel Young PLC, Phoenix, Arizona, for Claimants-Appellants.
    Monica N. Edelstein (argued), Assistant United States Attorney; Mark S. Kokano-vich, Deputy Appellate Chief; John S. Leonardo, United States Attorney; United States Attorney’s Office, Phoenix, Arizona; for Plaintiff-Appellee.
    Before: RAYMOND C. FISHER, MILAN D. SMITH, JR., and JACQUELINE H. NGUYEN, Circuit Judges.
   OPINION

M. SMITH, Circuit Judge:

Ladislao Samaniego and Manuel Castro (collectively, Claimants) challenge the government’s seizure of two J.P. Morgan Chase bank accounts in a civil asset-forfeiture action. One account, totaling $446,377.36, was held in the name of Sa-maniego; the other, totaling $361,070.25, in the name of Castro. In a verified complaint seeking forfeiture, the government contends that Claimants unlawfully used the accounts to launder money connected with illicit drug proceeds.

Claimants answered and filed verified claims in response to the complaint, alleging that they held ownership and possesso-ry interests in the seized funds sufficient to confer standing. The parties filed cross-motions for summary judgment. The district court entered judgment in favor of the government, holding that Claimants failed to produce adequate evidence of their Article III and prudential standing to contest the forfeiture. We reverse.

STANDARD OF REVIEW AND JURISDICTION

We have jurisdiction pursuant to 28 U.S.C. § 1291. We review summary judgment determinations de novo. Wright v. Incline Vill. Gen. Improvement Dist., 665 F.3d 1128, 1133 (9th Cir. 2011). Summary judgment is appropriate when, viewing the evidence in the light most favorable to the nonmoving party, “there is no genuine dispute as to any material fact.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett; 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine dispute of material fact exists if “there is sufficient evidence favoring the nonmov-ing party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Because this appeal concerns a civil forfeiture matter, summary judgment procedures are construed “in light of the statutory law of forfeitures, and particularly the procedural requirements set forth therein.” United States v. Currency, U.S. $42,500.00, 283 F.3d 977, 979 (9th Cir. 2002). Forfeiture proceedings are governed by statute and by the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure. See 18 U.S.C. § 988(a)(4)(A). The relevant rules provide that the government may move to strike a claim or answer for lack of standing. Fed. R. Civ. P. G(8)(c)(i)(B). Such a motion “may be presented as ... a motion to determine after a hearing or by summary judgment whether the claimant can carry the burden of establishing standing by a preponderance of the evidence.” Id. G(8)(c)(ii)(B).

FACTS AND PRIOR PROCEEDINGS

Ladislao Samaniego is the general manager and minority shareholder of a Mexican currency-exchange business called Centro Cambiario Sonorense, formerly Casa de Servicios de California (CSC). Sa-maniego and his longtime acquaintance Manuel Castro, both residents of Mexico, opened the two bank accounts that are the subject of this action as a result of CSC’s business relationship with a company called Frutería Welton.

Frutería Welton is a Mexican grocery company with stores along the U.S.-Mexican border. In the course of its daily operations, Frutería Welton acquires large amounts of Mexican and U.S. currency. Frutería Welton, along with a related company Distribuidora Welton (collectively, Welton), is owned in part by Jorge Salas Alvarez. Welton enlisted the services of CSC to count, record, and deposit the currency that it acquired.

Samaniego considers Salas Alvarez his compadre, a term used to denote a close friend who holds the near-familial status of a godfather. Through an agreement with Salas Alvarez that has lasted seventeen years, CSC (and by extension, Samaniego) was permitted to use the currency it collected for its own purposes, as long as Welton did not require immediate use of the funds. CSC and Samaniego were also entitled to retain any profits arising from their temporary use of the funds. This longstanding arrangement was oral in nature. In this way, Samaniego alleges, he and CSC accrued a debt of roughly one million dollars to Welton, which required eventual repayment.

After Mexico enacted tighter restrictions on the maximum amounts of U.S. currency that could be deposited in Mexican banks, Samaniego endeavored to help Salas Alvarez transport Welton’s excess U.S. currency across the border for deposit in U.S. banks. Samaniego claims he did it as a personal favor for Salas Alvarez, and without compensation, in order to “avoid having [his] compadre’s daughter being robbed along the way.” To better perform this function, Samaniego enlisted the help of his longtime acquaintance Manuel Castro. Castro was not formally engaged by Welton or CSC, but, from time to time, Samaniego would pay Castro one hundred dollars for his help in making deposits into the two seized accounts.

On May 31, 2011, Samaniego and Castro visited a Chase branch in Arizona to open a personal bank account held in Castro’s name. On June 7, 2011, Samaniego also opened a personal Chase bank account under his own name in which both he and Castro deposited excess funds from Wel-ton. Samaniego announced that the purpose of the bank accounts was to “accumulate all the money that [he] owe[d] to Jorge Salas in order to pay him.” Castro echoed that the money in the accounts belonged to Welton, and was being set aside to repay a debt to Welton. Collectively, these two bank accounts are the subject of the current forfeiture action.

On August 22, 2011, the government seized the two bank accounts opened by Claimants, based on the belief that the accounts were used in money laundering connected to the illegal drug trade. The government then filed a verified complaint for forfeiture of the two accounts. Claimants responded by filing an answer and verified claims. Following a round of discovery and briefing, the government moved for summary judgment. The district court granted the government’s motion, holding that Claimants had not demonstrated a property interest in the seized funds sufficient to confer standing. Claimants filed a motion for reconsideration, which the district court denied. This timely appeal followed.

ANALYSIS

I. Claimants’ Article III Standing

To satisfy constitutional standing requirements under Article III, a claimant contesting the government’s civil forfeiture action must show “sufficient interest in the property to create a case or controversy.” United States v. Real Prop. Located at 475 Martin Lane, 545 F.3d 1134, 1140 (9th Cir. 2008) (quotation marks omitted); see Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). This showing need only constitute “a colorable interest” in the seized funds, generally through the demonstration of an ownership or possessory interest in the property. United States v. $133,420.00 in U.S. Currency, 672 F.3d 629, 637 (9th Cir. 2012) (quotation marks omitted). “[A]n owner or possessor of property that has been seized necessarily suffers an injury that can be redressed at least in part by the return of the seized property.” Id. at 638 (quoting United States v. $515,060.42, 152 F.3d 491, 497 (6th Cir. 1998)).

The precise “manner and degree of evidence required” to demonstrate standing will vary according to the stage of litigation. Id. (quoting Lujan, 504 U.S. at 561, 112 S.Ct. 2130). A claimant at the summary judgment phase must offer supporting evidence. Id. This evidence may take the form of affidavits alleging specific facts, coupled with the claimant’s possession of the property when it was seized. Id. at 639. Although a claimant need not prove standing by a preponderance of the evidence to survive summary judgment, a court must determine that “a fair-minded jury could return a verdict for [the claimant] on the evidence presented.” Liberty Lobby, 477 U.S. at 252, 106 S.Ct. 2505. That is, the evidence set forth must be sufficient for a reasonable factfinder to conclude that the claimant has standing to challenge the forfeiture. See Fed. R. Civ. P. G(8)(c)(ii)(B).

A. Ownership Interest

A claimant’s “unequivocal” assertion of ownership in the seized property, along with physical possession of the property at the time of seizure, can overcome the summary judgment hurdle. $133,420 in U.S. Currency, 672 F.3d at 639. However, Claimants’ ownership claims have been repeatedly controverted through their own deposition testimony and other record evidence. The district court did not err when it found Claimants’ assertions of ownership to be no more than back-pedaling, “late-in-the-day declarations” insufficient to create a genuine dispute as to the ownership of the funds.

At various times, Claimants have asserted conflicting interests in the seized funds. For example, Claimants stated in their verified claims that the funds “belong[ed] to them.” During his deposition, however, Samaniego declared that “the money that was seized doesn’t belong to us. It belongs to Frutería and Distribuido-ra Welton, and we need to pay it back.” Castro’s deposition testimony confirmed that the funds “belonged” to Welton. When asked why they did not open the accounts in Welton’s name, Samaniego responded that “it was our full intention to change the names on both accounts ... [b]eeause the money belonged to them.”

The record reveals other instances when Claimants disavowed legal ownership. In their answers to the forfeiture complaint, Claimants expressly “admitted] that Sa-maniego and Castro transported U.S. dollars belonging to Frutería Welton or Dis-tribuidora Welton into the United States.” Moreover, in the Currency or Monetary Instrument Reports that Samaniego filed with U.S. officials at the border, he represented that he was transporting the currency on behalf of Welton or, at times, CSC.

In a subsequent declaration, Samaniego reasserted his ownership interest in the funds. He claimed that “[bjeeause ... the Seized Funds were sourced from Welton and would ... eventually be. repaid to Welton, [he] at times referred to them as Welton funds.... [S]uch a characterization does not mean — and has never meant — that [he and] CSC lacked an ownership and possessory interest in the funds.” To complicate matters, Samaniego, in his declarations, adopted the shorthand of “CSC” to refer collectively to both himself and CSC.

A claimant must “make clear whether he is asserting a possessory interest, an ownership interest, or something else.” Id. at 640 (quotation marks omitted) (holding that a claimant’s bare allegation of “ownership and/or a possessory interest” was lacking specificity and insufficient to survive summary judgment); cf. Kennedy v. Allied Mut. Ins. Co., 952 F.2d 262, 266-67 (9th Cir. 1991) (discounting a “sham” affidavit when the district court found that it “flatly contradicts earlier testimony in an attempt to ‘create’ an issue of fact and avoid summary judgment”). In light of Claimants’ self-contradictory claims and jumble of shifting legal theories — alternatively alleging ownership on the part of Welton or CSC or Claimants— the district court did not err by holding that Claimants failed to provide indicia of their own ownership of the funds sufficient to defeat summary judgment.

B. Possessory Interest

However, Claimants may still demonstrate a possessory interest in the funds that is short of ownership. A posses-sory interest involves “[t]he fact of having or holding property in one’s power; the exercise of dominion over property.” Possession, Black’s Law Dictionary (10th ed. 2014). Unlike an ownership interest, a pos-sessory interest arises even if the claimant is merely “holding the item for a friend” who has temporarily transferred control of the item to the claimant for safekeeping. United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1058 (9th Cir. 1994), superseded by statute on other grounds as stated in United States v. $80,180.00 in U.S. Currency, 303 F.3d 1182, 1184 (9th Cir. 2002). If the item were seized, the claimant would suffer injury to that pos-sessory interest. Id.

In forfeiture proceedings, we have acknowledged that the risk of false claims “requir[es] courts to demand more than conclusory or hearsay allegations of some ‘interest’ in the forfeited property.” United States v. $100,348.00 in U.S. Currency, 354 F.3d 1110, 1118-19 (9th Cir. 2004) (quotation marks and alteration omitted). Neither naked possession nor bare title, standing alone, will do. Rather, a claimant must offer some additional explanation concerning his “lawful possesso-ry interest in the money seized.” $133,420.00 in U.S. Currency, 672 F.3d at 639 (quoting United States v. $321,470.00, 874 F.2d 298, 303 (5th Cir. 1989)). Therefore, at the summary judgment phase, claimants alleging a possessory interest must set forth supporting evidence along with some explanation of how they came into possession of the seized property. Id.

Viewing the evidence in the light most favorable to Claimants, we hold that Claimants’ explanation of their respective possessory interests in the seized funds, coupled with supporting evidence in the form of declarations, deposition testimony, bank records, and other evidence, raises a material dispute of fact for trial.

1. Samaniego’s Possessory Interest

The district court failed to draw all reasonable inferences in favor of Sa-maniego when it concluded that only CSC, and not Samaniego, held a property interest in the funds. In this case, it is fair to infer from the evidence that CSC and Sa-maniego retained a joint interest in the funds. Under this reading, Samaniego has presented sufficient evidence of a posses-sory interest in the bank account bearing his name to defeat summary judgment.

Here, the relevant evidence primarily took the form of declarations from Saman-iego and Salas Alvarez, a part owner and manager of Welton. Samaniego declared that the seized funds were the proceeds of Welton business activities. Samaniego explained that, for nearly two decades, he and CSC had collected Welton proceeds and arranged for their deposit and safekeeping. Salas Alvarez corroborated this explanation of how the seized funds came into Samaniego’s possession. Salas Alvarez averred that “[w]hen the armored car companies deliver these proceeds to CSC [and Samaniego], [they] take[] title to, possession, and complete control of the proceeds.”

Under these circumstances, a reasonable jury could find that Samaniego has presented adequate evidence, and explanation, of his possessory interest in the funds to confer Article III standing. Moreover, Sa-maniego presented further evidence of a “concrete and particularized” injury, see Lujan, 504 U.S. at 560, 112 S.Ct. 2130, by repeatedly declaring that he was liable for the balance on the accounts. As Salas Alvarez acknowledged, CSC and Samaniego remained “obligated to repay to Welton the amount of these proceeds at a later date.”

2. Castro’s Possessory Interest

Similarly, we conclude that Castro has set forth sufficient evidence of a possesso-ry interest in the bank account bearing his name to survive summary judgment. Like Samaniego, Castro was the sole individual with signatory authority over the account in his own name. Although he agreed to manage the funds at Samaniego’s direction, only Castro was able to access the funds in the account. In addition, Castro was able to identify the source and nature of the funds, explaining they were the proceeds of Welton businesses. Castro presented evidence that the funds came into his possession through an arrangement with Samaniego, whereby Castro assumed safekeeping and control of the funds on Samaniego’s behalf. Castro has therefore offered adequate evidence and explanation to distinguish his possessory interest from that of a simple “unknowing custodian,” $191,910.00 in U.S. Currency, 16 F.3d at 1058 (quotation marks omitted). Accordingly, we conclude he has standing to challenge the forfeiture of the bank account in his name.

II. Prudential Standing

In addition to Article III standing, a claimant must satisfy the requirements of prudential standing. See United States v. Lazarenko, 476 F.3d 642, 649-50 (9th Cir. 2006). Prudential standing consists of “the general prohibition on a litigant’s raising another person’s legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in representative branches, and the requirement that a plaintiffs complaint fall within the zone of interests protected by the law invoked.” Id. (quotation marks omitted). The prudential-standing addendum to the Article III standing inquiry has fallen into disfavor in recent years. See Lexmark Int’l, Inc. v. Static Control Components, Inc., - U.S. -, 134 S.Ct. 1377, 1386, 188 L.Ed.2d 392 (2014). To the extent it continues to apply, we conclude that the essential requirements are satisfied here.

First, Claimants do not exclusively “rais[e] another person’s legal rights.” Lazarenko, at 476 F.3d at 649. They are not only the titleholders of the accounts in question, but have articulated colorable possessory interests in the seized accounts in their own right. For similar reasons, neither do Claimants raise “generalized grievances more appropriately addressed in representative branches.” Id. at 650. Rather, the locus of their injury is the seizure of the accounts. Therefore, the seizure constitutes an injury that is redressa-ble through the return of the property.

Finally, Claimants’ challenges “fall[ ] within the class of plaintiffs whom Congress has authorized to” assert a claim in a civil forfeiture action. Lexmark, 134 S.Ct. at 1387. It is precisely those claimants whose property interests are impaired by government seizure that Congress meant to protect through the civil asset-forfeiture laws. See 18 U.S.C. § 983(a)(2)(A),(C). As a result, Claimants have provided sufficient evidence of a possessory Merest to confer prudential standing.

CONCLUSION

We hold that Samaniego and Castro have standing to proceed past summary judgment and challenge the government’s forfeiture action. However, we do not address the merits of their claims or preclude the district court from re-examining Article III standing at a later date, in light of additional evidence. Accordingly, we REVERSE the judgment of the district court, and REMAND for further proceedings.

      . The government captioned its motion as a “motion to strike” Claimants’ answer and verified claims for lack of standing. However, it presented the motion as the equivalent of a motion for summary judgment. See Fed. R. Civ. P. G(8)(c)(ii)(B). On appeal, we review the district court's decision as a grant of "summary judgment” and refer to it as such in our opinion.

      . See United States v. Salcido, No. CR09-01878, 2010 WL 2044468, at *3 n.4 (D. Ariz. Mar. 12, 2010) ("In Mexican culture the pa-drino of a child and the child's father refer to one another as compadre, a sign of respect for each other as benefactors and protectors of the child.” (citing Appleton’s New Cuyas English-Spanish and Spanish-English Dictionary (1972))).

      . Claimants substantiated the existence and nature of this business relationship through sworn declarations from Samaniego and Salas Alvarez.

      . As noted earlier, supra note 1, the government styled its motion for summary judgment as a "motion to strike” Claimants' answer and verified claims for lack of standing. See Fed. R. Civ. P. (G)(8)(C)(ii)(B).

      . Because we reverse the judgment, we do not dwell on Claimants' challenge to the denial of their motion for reconsideration.

      . Verification, in this context, means that Claimants have submitted sworn pleadings in support of their claims, and specified the property claimed and the nature of their interest in the property. See Fed. R. Civ. P. G(5)(a)(i). This procedural requirement serves to protect against the proliferation of false claims in asset-forfeiture proceedings. See Stefan D. Cassella, Asset Forfeiture Law in the United States § 7-13(c), at 313 (2d ed. 2013).

      . By "lawful possessory interest,” we do not mean that a claimant must prove that his possession is lawful, which is an inquiry better left for the merits stage of an asset-forfeiture action. See United States v. Hooper, 229 F.3d 818, 820 n.4 (9th Cir. 2000); United States v. Funds in the Amount of $239,400, 795 F.3d 639, 647 (7th Cir. 2015). Instead, a claimant must articulate an interest in the property that is recognized by law. This comports with the principle that, for standing inquiries, the guiding question is whether the claimant would be injured through the seizure of the property, even assuming arguendo that the property was wrongfully seized. See Funds in the Amount of $239,400, 795 F.3d at 645; United States v. Cambio Exacto, S.A., 166 F.3d 522, 527 (2d Cir. 1999); United States v. One-Sixth Share of James J. Bulger in All Present & Future Proceeds of Mass Millions Lottery Ticket No. M246233, 326 F.3d 36, 41 (1st Cir. 2003) ("Courts should not ... conflate the constitutional standing inquiry with the merits determination that comes later.”).


source: Caselaw Access Project

author: SCHROEDER, Circuit Judge:

license: Public Domain

text:
    L.J., a minor, by and through his Guardian ad Litem; Nashira Hudson, an individual, Plaintiffs-Appellants, v. PITTSBURG UNIFIED SCHOOL DISTRICT; Linda K. Rondeau, in her official capacity as Superintendent of the Pittsburg Unified School District, Defendants-Appellees.
    No. 14-16139
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted June 16, 2016, San Francisco, California
    Filed September 1, 2016

      Jean Adams (argued), Adams Esq. APC, Oakland, California, for Plaintiffs-Appellants.
    Kimberly Smith (argued) and Stephanie S. Baril, Tomsky, Fagen Friedman & Fulf-rost, LLP, Los Angeles, California; and Jan E. Tomsky, Fagen Friedman & Fulf-rost, LLP, Oakland, California, for Defendants-Appellees.
    Before: MARY M. SCHROEDER, A. WALLACE TASHIMA, and JOHN B. OWENS, Circuit Judges.
   OPINION

SCHROEDER, Circuit Judge:

INTRODUCTION

This is an Individuals with Disabilities Education Act (“IDEA”) case of an emotionally troubled young child with suicidal tendencies beginning in the second grade, and with attention deficit hyperactivity disorder (“ADHD”) augmenting his disruptive behaviors. Congress created the IDEA to bring disabled students into the public education system by requiring states to adopt procedures to develop individualized plans for such students. Students with disabilities are entitled to special education services to ensure that they receive a “free and appropriate public education” (“FAPE”).

The .Pittsburg Unified School District (“School District”) determined that L.J. was not entitled to special education services because he was not disabled, and its determination was upheld on administrative review. L.J.’s mother filed this action in federal district court to require the School District to provide L.J. with an Individualized Education Plan (“IEP”) to provide specialized services to assist with what she contends are serious disabilities.

The district court reviewed the record and found that L.J. was disabled under three categories defined by the IDEA. It nevertheless concluded that an IEP for specialized services was not necessary because of L.J.’s satisfactory performance in general education classes. The court discounted L.J.’s suicide attempts as not bearing on the need for educational services because they took place outside- of school.

The school records show, however, that beginning in the second grade and continuing into the third and fourth grades, when the parent invoked administrative remedies, the School District had already been providing L.J. with special services, including counseling, one-on-one assistance, and instructional accommodations. These services resulted in L.J.’s materially improved performance. The School District consistently refused, however, to provide him with an IEP that would ensure such services in the future as required by the IDEA. The record also reflects that the School District violated procedural protections of the IDEA by failing to provide the parents with education records bearing on L.J.’s disabilities and services that had been provided. We therefore reverse and remand for consideration of appropriate remedies.

BACKGROUND

This case presents a bright child’s disturbingly troubled history in the primary grades of two through five. L.J. was suspended from school multiple times for disruptive behavior that included kicking and hitting his teachers, throwing rocks, calling teachers and students names, and endangering and physically injuring classmates. L.J. has attempted to kill himself on at least three occasions and has manifested suicidal ideations prompting the School District’s mental health providers to conduct at least one emergency suicide evaluation. L.J. has been diagnosed with three serious disorders, including Bipolar Disorder, Oppositional Defiant Disorder (“ODD”), and ADHD. He has been prescribed a cocktail of serious medications for these conditions.

For years, L.J.’s mother has repeatedly requested, to no avail, that the School District find L.J. eligible for special education. The School District has provided many services to L.J., but has never classified L.J. as eligible for special education under the IDEA. Without such eligibility, L.J. is not guaranteed the services his mother believes that he needs, such as one-on-one educational therapy, counseling services, and behavior intervention services. Instead, the School District has transferred him between at least three different schools.

The history of L.J.’s difficulties began in second grade. During this year, L.J. demonstrated inappropriate behaviors at school, including anger, lack of self-control, and not following rules. After being verbally disciplined by his teacher for bullying other students, L.J. told her that he wanted to die and that life was too hard. School staff called L.J.’s mother, and mental health staff prepared an emergency suicide evaluation. The School District referred L.J. to Lincoln Child Center (“Lincoln”), the School District’s counseling center, where mental health providers assessed him. L.J. was diagnosed with ADHD, ODD, and Bipolar Disorder.

L.J. began his third grade year at the same school, but exhibited negative behaviors which the teacher had difficulty controlling. The School District held a student study team (“SST”) meeting on September 7, 2011. The purpose of an SST is to develop interventions for students having trouble in school, either academically or behaviorally. In many schools, an SST is the first step in addressing a student’s needs before initiating the IEP process.

After LJ.’s SST meeting, the School District’s behavior specialist created a behavioral support plan (“BSP”) to address his problematic behavior. Over the course of the school year, the behavior specialist revised the BSP multiple times, but L.J. continued to act inappropriately. As a result of the failed BSP, the School District proposed moving L.J. to a segregated trailer at a different school, but with no special education services, with six other African-American boys with extreme behavior problems.

L.J.’s mother disputed the move, retained counsel, and entered mediation. The parties settled by agreeing to place L.J., temporarily, in a different school, in a general education class, conditioned on his having a one-to-one behavioral aide. The School District also agreed to evaluate L.J. for special education.

At the new school, a paraeducator was assigned to work with L.J. one-on-one, and continued to work with him through his third grade year. A paraeducator is a specially trained staff member, assigned to work with special education students. Whiie L.J. progressed academically and behaviorally, he continued to have issues. In April 2012, L.J. wrapped a seatbelt around his neck, and saying he wanted to die, began rolling around uncontrollably trying to rub his face on the ground. L.J. was taken to the emergency room.

Also, pursuant to the settlement agreement, Dr. Sherry Burke, a school psychologist, conducted psychoeducational and functional analysis assessments of L.J. to assist the IEP team in determining if he qualified for special education under the categories of other health impairment, or specific learning disability. See 34 C.F.R. §§ 300.8(c)(9), (10). Dr. Burke reviewed available school records, conducted various interviews of L.J.’s teachers, counselors, and family members, and administered a series of tests. She concluded that L.J. did not meet the eligibility criteria for special education.

On May 29, 2012, L.J. again attempted to kill himself by sticking his finger in a light socket and putting items down his throat. He said that everyone hated him and he did not want to live. He was then confined to a psychiatric hospital, causing him to miss six school days.

The next day, May 30, 2012, while L.J. was hospitalized, the IEP team held a meeting to review L.J.’s assessment results and to make a special education eligibility determination. An IEP team is composed of School District teachers, the parent and other experts familiar with the child. See 20 U.S.C. § 1414(d)(1)(B). Dr. Burke presented her findings to the IEP team, including her recommendation that L.J. did not meet eligibility requirements. The IEP team agreed with the psychologist that L.J. had no qualifying disabilities.

The next month, on June 25, 2012, L.J.’s mother formally requested all of L.J.’s school records from the School District, including any records from Lincoln, where L.J. had received counseling and had been assessed. The School District claimed there were no Lincoln records that had not already been disclosed. L.J.’s mother submitted another request for L.J.’s records on June 28. The School District again .failed to disclose any further records.

L.J. was admitted for psychiatric hospitalization on July 17 and again on July 26, when he was detained as a danger to himself or others for banging his head and making threats. Doctors placed L.J. on the psychotropic medications, Adderall, Se-roquel, and Wellbutrin, to help stabilize his mood and sustain focus, and later Vistaril to treat his anxiety.

On July 27, 2012, L.J.’s mother filed a request for a due process hearing with the California Office of Administrative Hearings (“OAH”). She claimed that the School District denied L.J. a FAPE by failing to make him eligible for special education and related services, and that the School District had failed to conduct assessments in areas of suspected disability, specifically other health impairment and emotional disturbance. L.J.’s mother also contended that the School District had failed to make requested records available.

The parties again participated in mediation on August 23, 2012. The parties agreed to place L.J. at yet another elementary school, pending the School District’s review of LJ.’s psychiatric hospitalization records and Dr. Burke’s updating her report. The School District generated a new Assessment Plan for IEP eligibility purposes. L.J.’s mother authorized the release of L.J.’s psychiatric records on the condition that a school nurse would conduct a health assessment and that L.J.’s original third grade teacher would be included in the eligibility process.

For fourth grade, beginning in the fall of 2012, L.J. was in a classroom with a teacher experienced in special education. L.J. was also provided with special accommodations, including freedom to leave the classroom at will. On September 25, 2012, L.J. was suspended for two days for throwing rocks and threatening to kill the school’s principal. The teacher’s one-on-one assistance and special accommodations continued throughout the school year, and, as a result, L.J.’s academic performance was satisfactory.

After Dr. Burke updated her assessments, a second IEP team meeting was held on October 9, 2012, to reconsider L.J.’s eligibility for special education services under the category of emotional disturbance. See 34 C.F.R. § 300.8(c)(4). The requested third grade teacher was not present at the meeting and L.J. had not been assessed by a nurse, in violation of both conditions insisted upon by L.J.’s mother in the agreement. The team again concluded that L.J. was not eligible for special education, the same conclusion reached at the first meeting the preceding May, despite repeated intervening hospitalizations, heavy medications, renewed suicide attempts, and individualized accommodations in school.

On October 15, 2012, L.J. filed an amended complaint with the California OAH. L.J.’s mother again submitted formal requests for L.J.’s school records in October and November 2012, and in March 2013. The mental health records kept by the School District, including Lincoln, were never disclosed.

During that fourth grade year, L.J. was sent to the office multiple times for physically injuring classmates, disrupting class, and refusing to follow directives. School staff contacted L.J.’s mother to pick him up from school early on numerous occasions. The School District conducted another mental health assessment. He was again diagnosed with ADHD. In this assessment, the clinician concluded his ADHD symptoms caused clinically significant impairment in L.J.’s social and academic functioning, that L.J. relied extensively on medications, and further, that he evidenced functional impairments in the areas of family relations, school performance, and peer relations.

The following year, in the fall of 2013, the School District nevertheless placed L.J. in a regular fifth grade classroom without accommodations or services. In November, L.J. was rushed to the emergency room by ambulance after attempting to hang himself with a lanyard. That year, L.J. physically injured children and at least one teacher. L.J. was suspended for “kicking and hitting” his science teacher, calling another teacher “stupid,” and brandishing a fake knife in the classroom. L.J. was also suspended again because he endangered a classmate by putting expandable pellets in the classmate’s water bottle without his knowledge.

That spring, L.J.’s due process request made its way before an Administrative Law Judge (“ALJ”). The ALJ conducted a three-day hearing in April, and on May 23, 2013, the ALJ issued her decision, denying all of L.J.’s requests for relief. The ALJ found that L.J. had no disabilities that would qualify him for special education services, and even if he had qualifying disabilities, he had not demonstrated a need for special services because his academic performance was satisfactory when he was able to attend school.

PROCEDURAL BACKGROUND

L.J. timely appealed the ALJ’s ruling to the district court. L.J. contended that he was eligible for special education services and asked the district court to order the School District to provide an IEP. The parties filed cross-motions for summary judgment. The district court disagreed with the ALJ’s decision that L.J. had no disabling conditions. The district court ruled that L.J. met the qualifying criteria as a student with three disabilities: specific learning disability, other health impáirment (due to his ADHD), and serious emotional disturbance (due to his ODD and bipolar disorder).

The district court, nevertheless, granted the School District’s motion for summary judgment, ruling that L.J. did not need special education services because of his satisfactory performance in general education. The district court adopted the ALJ’s findings that L.J. was performing well behaviorally, socially, and academically between May and October 2012 with the help of services the court characterized as general education accommodations, not individualized special education services.

This appeal followed.

STANDARD OF REVIEW

The district court’s findings of fact are reviewed for clear error, even when the district court based those findings on an administrative record, and conclusions of law are reviewed de novo. J.G. v. Douglas Cty. Sch. Dist., 552 F.3d 786, 793 (9th Cir. 2008). This court gives “due weight” to ALJ special education decisions. J.W. v. Fresno Unified Sch. Dist., 626 F.3d 431, 440M1 (9th Cir. 2010). This standard is far less deferential than judicial review of other agency actions, but requires this court to refrain from substituting its own notions of educational policy for those of the school authority it reviews. Amanda J. v. Clark Cty. Sch. Dist., 267 F.3d 877, 887-88 (9th Cir. 2001).

I. Statutory Background and Legal Framework

Under the IDEA, 20 U.S.C. §§ MOO-1491, all states that receive federal education funding must establish policies and procedures to ensure that a “free appropriate public education is available to all children with disabilities.” Id. at § 1412(a)(1)(A). The IDEA defines a FAPE as “special education” that is provided at public expense. Id. at § 1401(9). A child receives a FAPE, for purposes of the IDEA, if the program addresses the child’s unique needs, provides adequate support services so that the child can take advantage of educational opportunities, and is in accord with the IEP. Id. A state must comply both procedurally and substantively with the IDEA. Id. at § 1400 et seq.

In determining whether a student has received a FAPE in compliance with the IDEA, the court conducts both a procedural and substantive inquiry. The court considers whether the school complied with the procedures set forth in the IDEA. Bd. of Educ. v. Rowley, 458 U.S. 176, 206-07, 102 S.Ct. 3034, 73 L.Ed.2d 690 (1982). The court also evaluates whether the IEP in this case, or lack thereof, was reasonably calculated to enable the child to receive educational benefits. Id. Where a court identifies a procedural violation that denied a student a FAPE, the court need not address the second substantive prong of the inquiry. Doug C. v. Haw. Dep’t of Educ., 720 F.3d 1038, 1043 (9th Cir. 2013).

Not all procedural violations constitute a denial of a FAPE. R.B. v. Napa Valley Unified Sch. Dist., 496 F.3d 932, 938 (9th Cir. 2007). A child is denied a FAPE when procedural inadequacies result in the loss of an educational opportunity, or seriously infringe on the parents’ opportunity to participate in the IEP formulation process. Doug C., 720 F.3d at 1043. A procedural error is harmless if the student is substantively ineligible for IDEA benefits. R.B., 496 F.3d at 942.

II. Eligibility for IDEA Benefits

The initial issue in this case is whether L.J. was substantively eligible for IDEA benefits, since the ALJ held he was not. A child is substantively eligible for special education and related services if he is a “child with a disability,” which is statutorily defined, in relevant part, as a child with a serious emotional disturbance, other health impairment, or specific learning disability and who, by reason thereof, needs special education and related services. 20 U.S.C. § 1401(3)(A). California Education Code similarly provides that a “student with exceptional needs” who is eligible under § 1401(3)(A) must have an impairment that “requires instruction and services which cannot be provided with modification of the regular school program.” Cal. Educ. Code §§ 56026(a), (b).

Even if a child has such a disability, he or she does not qualify for special education services if support provided through the regular school program is sufficient. 20 U.S.C. §1401(3)(A); Cal. Educ. Code § 56026. “[Slpecial classes, separate schooling, or other removal of children with disabilities from the regular educational environment occurs only when the nature or severity of the disability of a child is such that education in regular classes with the use of supplementary aids and services cannot be achieved satisfactorily.” 20 U.S.C. § 1412(a)(5)(A).

The parties on appeal no longer dispute that L.J. should have been categorized as a child with a disability under three categories set forth in the statute. First, L.J. has a “specific learning disability” because he has exhibited a severe discrepancy between his intellectual ability and his achievement. 34 C.F.R. § 300.8(c)(10). Second, L.J. has an “other health impairment” because his ADHD and mood disorders interfere with his ability to progress academically and socially. 34 C.F.R. § 300.8(c)(9). Lastly, L.J.’s mood disorders constitute a “serious emotional disturbance.” 34 C.F.R. § 300.8(c)(4).

The critical issue in this appeal therefore is whether L.J. demonstrated a need for special education services. This case differs from most IDEA cases in that L.J. never received an IEP because the School District continually maintained he had no qualifying disabilities. The ALJ agreed that he had no qualifying disabilities. The district court held that the ALJ was incorrect in this regard and that L.J. had qualifying disabilities. The district court went on to conclude, however, that L.J. was performing satisfactorily without the need for special education services. We must therefore determine whether general education was appropriate or whether L.J. exhibited a need for special education services.

The appropriateness of a student’s eligibility should be assessed in terms of its appropriateness at the time of the child’s evaluation and not from the perspective of a later time with the benefit of hindsight. Adams v. Oregon, 195 F.3d 1141, 1149 (9th Cir. 1999). When making this assessment of whether an eligibility determination is “appropriate” under the IDEA, this court looks to the time of the child’s evaluation by the School District. We employ what is termed the “snapshot” rule that instructs the court to judge the appropriateness of the determination on the basis of the information reasonably available to the parties at the time of the IEP meeting. Id. “An IEP must take into account what was and was not, objectively reasonable when the snapshot was taken.” Id. (citation omitted). We judge the eligibility decision on the basis of whether it took the relevant information into account, not on whether or not it worked. Id.

In this case, it is undisputed that the snapshot period was the period surrounding the two IEP meetings: on May 30, 2012, in the third grade, and October 9, 2012, in the fourth grade. That was the critical period on which the School District based its eligibility decisions, and the district court correctly focused on L.J.’s eligibility for special education by looking to his behavior, academic progress, and social needs at that time. The district court was correct when it found that L.J. should have been categorized as a child with a disability within the meaning of the IDEA. L.J. had multiple disabilities, which manifested serious behavioral problems.

The district court nonetheless concluded that L.J. was not eligible for special education because he was academically performing satisfactorily without receiving special education services and on the basis of the general education curriculum. This was clear error because L.J. was receiving special services, including mental health counseling and assistance from'a one-on-one paraeducator. These are not services offered to general education students.

This distinction is important. General education is what is provided to non-disabled children in the classroom. Students in the general education setting do not receive specialized services. Special education, on the other hand, is “specially designed instruction” to meet the unique needs of a child with a disability. 34 C.F.R. § 300.39(a)(1). “Specially designed instruction” is defined under the IDEA regulations:

Specially designed instruction means adapting, as appropriate to the needs of an eligible child under this part, the content, methodology, or delivery of instruction—
(i) To address the unique needs of the child that result from the child’s disability; and
(ii) To ensure access of the child to the general curriculum, so that the child can meet the educational standards within the jurisdiction of the public agency that apply to all children.

34 C.F.R. § 300.39(b)(3) (emphasis added).

The district court decided that L.J! did not need an IEP because, despite his multiple disabilities, L.J. was performing satisfactorily in general education. The problem with the district court’s analysis is that many of the services the district court viewed as general education services were in fact special education services tailored to L.J.’s situation. The district court thus classified many of the services L.J. received as general education, when they were not. Discussion of a few examples will make the point.

First, general education instruction does not provide for one-on-one direction. L.J. received special assistance in the third grade from a one-on-one paraeducator, pursuant to the parties agreement that year. The School District claims that the paraeducator “faded back considerably” by May 30, the date of the initial IEP meeting, but this is not accurate. The paraedu-cator continued to assist L.J. throughout the third grade.

Second, general education instruction does not provide for specially designed mental health services. The School District’s position is that L.J. received only general education mental health services from Lincoln that the School District makes available to all students. The School District distinguishes such services from services received by special education students, which are specially designed mental health services.

The flaw in the School District’s argument is that the mental health services that L.J. received from second grade through fourth grade were specially-designed for him. Such services included services that the School District described as follows: Assessments, Plan Development, Group and Individual Rehabilitation, Group and Individual Therapy, Family Therapy, and Collateral Family Group and Intensive Home-Based Services. The School District acknowledges that only students requiring special education receive an educationally-related mental health assessment. L.J. received two such mental health assessments. L.J. was referred to Lincoln by the School District’s Director of Special Education and Psychological Services, and the School District acknowledged this means of referral is for special education students only.

Third, general education instruction does not typically include extensive clinical interventions by a School District behavior specialist. While it is not unusual for a behavior specialist to offer support to a general education teacher, here the School District’s behavior specialist did much more. Throughout the third grade year, he designed specific BSPs in an attempt to meet L.J.’s needs. The plans included adapting the method and delivery of L.J.’s instruction, and strategies to promote a structured environment and reinforce positive behavior. The behavior specialist also designed a nine-hour training session for L.J.’s paraeducator. After training L.J.’s aide, the behavior specialist closely supervised him to ensure the interventions followed the new BSP.

Fourth, general education instruction does not provide accommodations, such as persistent teacher oversight, additional time to complete classwork or tests, shortened assignments, discretion to leave the classroom at will, or the option to complete classwork or tests in other rooms or with one-on-one support. Nor does it always provide a teacher with special education experience like L.J.’s fourth grade teacher.

The district court clearly erred by mis-characterizing all of these individualized accommodations and services as general education available to all students, rather than as special education provided to students with disabilities. The court went on to conclude, erroneously, that L.J. did not require specialized assistance in the future on the ground that he was no longer exhibiting behaviors that interfered with his school performance. Granted, his condition had improved during the snapshot period, for by the time of the IEP meetings, L.J.’s impairments had been eased with the accommodations and services provided by the School District. With the assistance of medication and specially designed instruction, L.J. had periods of temporary behavioral and academic gain. L.J.’s teachers, service providers, and mother all reported that L.J. had made good progress in academics and improved his social skills with his classmates during the snapshot period.

Dr. Burke opined that his average or above-average academic testing scores showed academic achievement had not been impacted by any of his issues. Standardized tests ranked L.J.’s academic performance in an overall average range. Although there was progress, it was no doubt in a setting where multiple services were being provided and the progress must at least, in substantial part, be attributed to those services. Moreover, L.J. has shown himself to be an intelligent child, so his academic performance could have been even more improved with the appropriate specially designed instruction.

Yet, L.J. continued to have troubling behavioral and academic issues during the snapshot period. The district court did not adequately take these into account when it decided there was no need for future specialized services. The information available to the IEP team during the snapshot period was dramatic.

L.J. threatened and attempted to kill himself on numerous occasions. On May 29, 2012, the day before his initial IEP meeting, L.J. attempted to kill himself by sticking his finger in a light socket and putting items down his throat. On May 30, 2012, the day of his first eligibility determination, L.J. could not have been doing well socially, behaviorally, or academically at school because he was in extended care at a psychiatric hospital. He was confined to the hospital for over a week and missed at least six school days. L.J. was again admitted for psychiatric hospitalization on July 17 and July 26, 2012. L.J. was detained as a danger to himself or others because he was banging his head against walls and making threats of harm.

The district court concluded that L.J.’s psychiatric hospitalizations and suicide attempts were not relevant to his eligibility for specialized instruction because they occurred outside the school environment. Yet, the issue is whether his disabilities interfered with his education and necessitated special services. It is hard to imagine how an emotional disturbance so severe that it resulted in repeated suicide attempts would not interfere with school performance. That he attempted suicide outside the school environment is immaterial. His emotional disturbance adversely affected his attendance and his teachers all reported that L.J.’s classroom absences, due to psychiatric hospitalizations, hurt his academic performance. To distinguish between where a student attempted suicide — between home and school — misses the point. The point being that whether having a suicidal ideation and attempting suicide interfered with L.J.’s education.

In fourth grade, in September, L.J. was suspended for two days after throwing rocks at and threatening to kill the school principal. The district court did not think his suspension was of great import, noting that it was only for two days. But this was not L.J.’s only incident. Shortly before the October 9, 2012, IEP meeting, L.J. was unable to ride the school bus because he refused to follow the bus driver’s directions.

L.J. also continually had needs associated with his medication and treatment for his mood disorders and ADHD. By fourth grade, L.J. relied on psychotropic medications in order to attend school. His fourth grade teacher reported that L.J.’s functioning declined in the absence of medication or when it had no mitigating effects. School counselors repeatedly expressed their concern regarding L.J.’s medication management. The district court neglected to discuss L.J.’s ongoing needs associated with his medication.

L.J. clearly exhibited behavioral and academic difficulty during the snapshot period. He threatened and attempted to kill himself on three occasions in 2012. In the fall, he frequently acted out at school, and continued to have needs associated with his medication regimen. The district court should not have discounted these facts. They demonstrate that L.J. required special education services.

Because L.J. is eligible for special education, the School District must formulate an IEP. We reverse the district court’s decision and remand for it to order that the School District provide that remedy.

III. Procedural Violations of the IDEA

Procedural safeguards are built into the IDEA to ensure that a child’s education' is fair and appropriate and the parents have an opportunity to participate in the IEP formulation process. Doug C., 720 F.3d at 1043. The record in this cáse reflects some serious violations of these safeguards by the School District.

The School District failed to disclose assessments, treatment plans, and progress notes from L.J.’s time at Lincoln. The district court erred in concluding that this failure did not interfere with L.J.’s mother’s opportunity to participate in the IEP formulation process.

Under the IDEA, parents have the right to informed consent. 20 U.S.C. § 1414(a)(1)(D). Consent means that the parent has been fully informed of all information relevant to the activity for which consent is sought. 34 C.F.R. § 300.9(a). To guarantee parents the ability to make informed decisions about their child’s education, the IDEA gives them the right to examine all pertinent education records relating to their child. 20 U.S.C. § 1415(b)(1). The Lincoln records constitute such education records and should have been disclosed to L.J.’s mother.

Parents also have the right to invite to attend IEP meetings individuals with knowledge or special expertise regarding their child. 34 C.F.R. § 300.321(a)(6). LJ.’s mother had the right to have L.J.’s mental health providers at both the May and October IEP meetings. Id. Without knowledge of the Lincoln records, however, L.J.’s mother waived the attendance of his mental health clinicians at the IEP meetings. At the very least, L.J.’s parent should have received complete copies of the Lincoln records so that she could provide informed consent regarding the exclusion of his mental health providers from the IEP team. Had L.J.’s mother been aware of the content of the Lincoln records, she may well not have waived the mental health providers’ attendance.

The School District also failed to conduct a health assessment for the purpose of determining how L.J.’s health, and particularly his medications, affected his performance. The district court held that this error did not infringe on L.J.’s mother’s ability to participate in the IEP process because L.J.’s medications were not administered at school. We fail to see that the need for a health assessment should depend on where medications are administered, and we are cited to nothing in support of the proposition.

Under the IDEA, the School District must conduct a “full and initial evaluation,” one which ensures the child is assessed in “all areas of suspected disability.” 20 U.S.C. §§ 1414(a)(1)(A), (b)(3)(B). This requirement allows the child’s IEP team to have a complete picture of the child’s functional, developmental, and academic needs. When a student has been diagnosed as having a chronic illness, as L.J. was, the student may be referred to the School District for a health assessment. 5 Cal. Code Reg. § 3021.1. A health assessment focuses on diagnoses, health history, and those specific health needs while in school which are necessary to assist a child with a disability. The regulations then require that the IEP team review, among other things, the “possible medical side effects and complications of treatment that could affect school functioning.” Id. The district court erred when it dismissed the School District’s failure to conduct a health assessment, depriving L.J. of an educational benefit. See Doug C., 720 F.3d at 1043 (a FAPE is denied where procedural inadequacies result in loss of educational benefits).

Here, there is reason to believe that alternative services would have at least been more seriously considered during the IEP process if the School District had assessed L.J.’s health, including the effects of his medication on his health. The record evidence showed that L.J. continually had needs associated with his medication and treatment, which adversely impacted his academic, behavioral, and social performance. Because his health and the impacts of his medication were never assessed, no matter what assistance L.J. received, the School District would remain unable to appropriately address those needs.

In sum, the School District clearly violated important procedural safeguards set forth in the IDEA. The School District failed to disclose assessments, treatment plans, and progress notes kept by Lincoln, which deprived L.J.’s mother of her right to informed consent. The School District also failed to conduct a health assessment, which rendered the School District and IEP team unable to evaluate and address L.J.’s medication and treatment related needs.

When this matter returns to the School District for the preparation of an IEP, the School District must comply with the IDEA’S procedural safeguards. Additional procedural violations can only result in the further protraction of proceedings and costly financial and emotional burdens for all those involved.

CONCLUSION

L.J. is a child with disabilities within the meaning of the IDEA and needs special education. The judgment of the district court is reversed and the matter remanded to the district court with instruction to order the School District to provide an appropriate remedy.

Costs are awarded to Plaintiffs-Appellants.

REVERSED and REMANDED.


author: Opinion by Judge CLIFTON

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Pablo ALVAREZ, Defendant-Appellant.
    Nos. 14-50506, 15-50047
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted March 10, 2016 Pasadena, California
    Filed September 1, 2016

      Jodi D. Thorp (argued), San Diego, California, for Defendant-Appellant.
    Daniel E. Zipp (argued), Assistant United States Attorney; Peter Ko, Chief, Appellate Section, Criminal Division; Laura E. Duffy, United States Attorney; United States Attorney’s Office, San Diego, California; for Plaintiff-Appellee.
    Before: RICHARD R. CLIFTON, CONSUELO M. CALLAHAN, and SANDRA S. IKUTA, Circuit Judges.
   OPINION

Opinion by Judge CLIFTON

Defendant Pablo Alvarez and a co-defendant were arrested by Border Patrol officers while transporting aliens who were in the United States illegally. Alvarez wás driving his own Chevrolet, and his co-defendant was driving a Ford that Alvarez had rented. Border Patrol officers had set up spike strips along the road on which Alvarez and his co-defendant were traveling, and when Alvarez hit the spikes and came to an abrupt halt, Alvarez’s co-defendant was unable to stop the Ford before it crashed into the Chevrolet. The crash caused significant damage to the rental car.

Alvarez, pleaded guilty to transportation of aliens in the United States illegally in exchange for the government’s promise to recommend a custodial term on the low end of the sentencing guideline range and a special assessment fee of $100.00. The plea agreement did not provide for restitution, but the presentenee report recommended that Alvarez be required to pay for the cost of repairing the rental car. At his sentencing hearing, Alvarez acknowledged responsibility for the damage to the rental car and accepted his responsibility to pay restitution for the damage. Later, however, Alvarez changed his position, and at a subsequent hearing he argued that restitution was improper. The district court disagreed and ordered that Alvarez pay restitution for the damage to the rental car in the amount of $2,900.

On appeal, Alvarez argues that the Supreme Court’s decision in Paroline v. United States, - U.S. -, 134 S.Ct. 1710, 188 L.Ed.2d 714 (2014), established that restitution is a form of punishment. He contends, therefore, that restitution cannot be imposed as a condition of supervised release under the relevant statutes. For the same reason, he argues that restitution cannot be imposed based on facts not found by a jury under Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000). Alvarez also urges us to find that the rental company, San Diego Rent-A-Car, was not a victim of his offense, that the government breached the plea agreement, and that the district court erred in declining to order specific performance as a remedy for its failure to adequately inform him of the potential consequences of a guilty plea. We conclude that restitution is not clearly a form of punishment and can be imposed as a condition of supervised release. We also conclude that the government did not violate the plea agreement and that the district court did not abuse its discretion. We affirm.

I. Background

On the morning of May 22, 2014, Border Patrol agents observed a blue Ford Taurus and a red Chevrolet Astro pull up near a group of seven suspected illegal aliens hid-, ing on a hillside near a park in San Diego, California. According to a Border Patrol agent on the scene, three of the aliens entered the Chevrolet, which was driven and owned by defendant Pablo Alvarez, and four entered the Ford, which was driven by Alvarez’s co-defendant. Alvarez had rented the Ford from San Diego Rent-A-Car earlier that day. The cars drove away at a high rate of speed, with Alvarez in the lead.

One of the Border Patrol agents followed the cars out of the park, while others went ahead to set up a spike strip to interdict the vehicles further down the road. As Alvarez approached the location where the spike strip had been set up, one of the Border Patrol agents activated the emergency lights on his vehicle and signaled to Alvarez to pull over. Alvarez attempted to comply but could not stop the Chevrolet before hitting the spike strip. The car’s tires deflated, and the car came to an abrupt stop. The driver of the Ford, who had been driving closely behind Alvarez, was unable to brake in time and collided with the Chevrolet. The collision caused significant damage to the Ford.

Border Patrol agents placed both drivers and all seven illegal aliens under arrest. Alvarez waived his rights and provided a statement to a Border Patrol agent on the scene.

A month later, the United States charged Alvarez with knowingly transporting illegal aliens, in violation of 8 U.S.C. § 1324(a)(1). Alvarez pleaded guilty in exchange for a promise from prosecutors that they would recommend sentencing for Alvarez at the low end of the advisory guideline. As will be detailed below, the plea agreement referred to restitution but did not provide that restitution would be recommended.

Alvarez appeared before a magistrate judge for a change of plea. During the colloquy, the court informed Alvarez that he was facing a maximum term of three years of supervised release and a maximum fine of $250,000. Alvarez responded that he understood that those were the maximum penalties he faced by pleading guilty to violating 8 U.S.C. § 1324(a)(1). The court did not inform Alvarez that he could face restitution for the damage to the Ford.

The presentence report submitted by the probation office recommended restitution to San Diego Rent-A-Car in the amount of $9,114.03. In response, Alvarez filed a sentencing memorandum agreeing that restitution was appropriate in this case but questioning the amount. The government subsequently filed a sentencing summary chart that recommended a custody term range but was silent regarding restitution.

Alvarez appeared before the district court for sentencing on October 31, 2014. At the hearing, the government did not recommend restitution. However, Alvarez’s attorney conceded that the damage to the Ford would not have occurred but for Alvarez’s transportation of undocumented aliens. Defense counsel further conceded that “restitution is appropriate in this case.” Alvarez also personally addressed the court and stated, “I know I do have to pay restitution for the vehicle that was damaged. I know that for a fact, and I have no problem doing that.” The district court proceeded to calculate the sentencing guideline range and imposed a sentence of thirteen months of custody. The court then continued the hearing on restitution and ordered the government to provide additional information regarding the damage to the Ford.

Before the restitution hearing took place, the court appointed Alvarez new counsel. Alvarez’s new counsel argued for the first time that the government had breached the plea agreement by recommending restitution and that restitution was not available as a condition of supervised release. The district court rejected that argument, and imposed restitution in the amount of $2,900. This appeal followed.

II. Discussion

A Restitution can be imposed as a condition of supervised release

Alvarez first argues that restitution cannot be imposed as a condition of supervised release following the Supreme Court’s decision in Paroline, - U.S. -, 134 S.Ct. 1710, 188 L.Ed.2d 714. We review the legality of a restitution order de novo and the factual findings supporting the order for clear error. United States v. Brock-Davis, 504 F.3d 991, 996 (9th Cir. 2007).

In United States v. Batson, 608 F.3d 630 (9th Cir. 2010), we held that restitution can be imposed as a condition of supervised release under the authority of 18 U.S.C. § 3583 (the Supervised Release Statute) and 18 U.S.C. § 3563(b) (the Probation Statute). Id. at 635. The Supervised Release Statute grants federal courts the authority to order a condition of supervised release so long as the condition is “reasonably related” to the considerations in 18 U.S.C. §§ 3553(a)(1) and 3553(a)(2)(B)-(D), both of which set forth factors that courts can take into account in imposing a sentence. 18 U.S.C. § 3583. The factors set forth in § 3553(a)(1) are “the nature and circumstances of the offense and the history and characteristics of the defendant,” and the factors set forth in § 3553(a)(2)(B)-(D) are “the need for the sentence imposed ... (B) to afford adequate deterrence to criminal conduct; (C) to protect the public from further crimes of the defendant; and (D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner.” The Supervised Release Statute excludes from consideration those factors set forth in § 3553(a)(2)(A), which provide that courts may impose a sentence “to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense.” None of these three factors can form the basis for a condition of supervised release.

The Supervised Release Statute does not specifically mention restitution, but it does permit courts, within limits including those described above, to impose “any condition set forth as a discretionary condition of probation” in the Probation Statute as a condition of supervised release. 18 U.S.C. § 3583(d). One condition the Probation Statute sets forth as a discretionary condition of probation is restitution. 18 U.S.C § 3563(b)(2). Thus, as we held in Batson, “the Supervised Release Statute, together with the Probation Statute, unambiguously authorizes federal courts to order restitution as a condition of supervised release for any criminal offense ... for which supervised release is properly imposed.” Batson, 608 F.3d at 635.

Alvarez argues that the Supreme Court’s decision in Paroline undermines our conclusion in Batson by establishing that restitution is a form of punishment, meaning, according to Alvarez, that it is therefore excluded as a permissible condition of supervised release under § 3583. In Paroline, the Court noted that a restitution order requiring a possessor of child pornography to pay for damages caused by the actions of thousands of other independent possessors and distributors of child pornography could potentially raise issues under the Excessive Fines Clause of the Eighth Amendment. 134 S.Ct. at 1726. In so noting the Court observed that “[t]he primary goal of restitution is remedial or compensatory, but it also serves punitive purposes.” Id. (internal citations omitted).

Later, however, Paroline clearly stated that restitution is fundamentally “remedial and compensatory” and repeatedly referenced restitution’s remedial nature when emphasizing the need to compensate victims for harms suffered as a result of a crime. See, e.g., id. at 1726 (“Just as it undermines the purposes of tort law to turn away plaintiffs harmed by several wrongdoers, it would undermine the remedial and penological purposes of § 2259 to turn away victims in cases like this.”). That there might sometimes be a secondary punitive motive in imposing restitution does not make restitution into a form of punishment proscribed by the Supervised Release Statute.

Indeed, the observation that restitution may have some punitive purposes is nothing new in our circuit. In United States v. Green, 722 F.3d 1146 (9th Cir. 2013), we noted that we have described restitution as a “hybrid, with ‘both compensatory and penal purposes,’ ” but concluded that even so, restitution is not “clearly” punishment. Id. at 1150 (quoting United States v. Rich, 603 F.3d 722, 729 (9th Cir. 2010)). Thus, Paroline is not “clearly irreconcilable” with our prior circuit authority authorizing restitution as a condition of supervised release, and Batson remains good law. See Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (holding that a panel may disregard circuit precedent only when “the reasoning or theory of our prior circuit authority is clearly irreconcilable with the reasoning or theory of intervening higher authority.”).

Because Paroline did not establish that restitution is a punishment, Alvarez also cannot succeed on his argument that the district court violated Apprendi by imposing restitution based on facts not found by a jury. As we stated in Green, the Ninth Circuit “has categorically held that Ap-prendi and its progeny ... don’t apply to restitution.” 722 F.3d at 1149. For the reasons stated above, Paroline is not “clearly irreconcilable” with that authority, and Green is still viable precedent. See Miller, 335 F.3d at 892; United States v. Eyraud, 809 F.3d 462, 471 (9th Cir. 2015) (“We held in Green that Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), does not apply to restitution orders, and Paroline does not invalidate that holding.”).

B. San Diego Rent-A-Car was a victim of Alvarez’s offense

Next, Alvarez argues that restitution is improper because San Diego Rent-A-Car was not a victim of his offense. Under the applicable statutes, restitution can be imposed “only for the loss caused by the specific conduct that is the basis for the offense of conviction.” Hughey v. United States, 495 U.S. 411, 413, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990). The Ninth Circuit has rejected a “but for” standard of causation in restitution, and held that instead, “restitution is proper only for losses directly resulting from the defendant’s offense.” United States v. Meksian, 170 F.3d 1260, 1262 (9th Cir. 1999) (quoting United States v. Tyler, 767 F.2d 1350, 1351 (9th Cir. 1985)). “It is clear from our cases that the phrase ‘directly resulting’ means that the conduct underlying the offense of conviction must have caused a loss for which a court may order restitution, but the loss cannot be too far removed from that conduct.” United States v. Gamma Tech Indus., Inc., 265 F.3d 917, 928 (9th Cir. 2001).

Alvarez argues here that San Diego Rent-A-Car’s loss was not caused by the specific conduct that was the basis for the offense to which he pleaded guilty, but rather by the Border Patrol’s decision to use a spike strip to stop his flight. Alvarez misunderstands the inquiry under our case law. In United States v. Reed, 80 F.3d 1419 (9th Cir. 1996), we confirmed that the Hughey standard applied to limit restitution to conduct that is “an element of the offense of conviction.” Id. at 1420. In accordance with that principle, we overturned a lower court decision granting restitution to the owners of vehicles damaged in a crash that occurred in the process of apprehending the defendant, who ultimately pleaded guilty to being a felon in possession of a firearm. Id. Reed concluded that “fleeing the police is not part of the conduct underlying [Reed’s] offense of conviction and thus cannot serve as the basis for a restitution order.” Id. at 1421. In contrast, Alvarez pleaded guilty to a violation of 8 U.S.C. § 1324(a)(l)(A)(ii), which makes it a crime to “transport! ], or move[] or attempt! ] to transport or move [an] alien within the United States by means of transportation or otherwise” with knowledge or in reckless disregard of the fact that the alien is in the United States illegally. As transportation is an element of the crime to which Alvarez pleaded guilty, restitution does not fall afoul of the limitations established by Hughey and Reed.

Nor does the causal chain between Alvarez’s offense and the damage to the car “extend so far, in terms of the facts or the time span, as to become unreasonable.” Gamma Tech, 265 F.3d at 928. While the Border Patrol’s use of a spike strip was an intervening cause of the damage to the Ford, a “[defendant's conduct need not be the sole cause of the loss” to the victim for restitution to be appropriate. Id. at 928. Rather, the law requires that “any subsequent action that contributes to the loss, such as an intervening cause, must be directly related to the defendant’s conduct.” Id. “[W]e have approved restitution awards that included losses at least one step removed from the offense conduct itself.” Id.

Here, the damage to the Ford was no more than one step removed from Alvarez’s crime. As noted above, Alvarez’s crime involved transporting aliens, which made it reasonably foreseeable that the instrument of transportation (i.e., the ear) would be damaged in its commission. Therefore, the causal nexus between the crime of transporting aliens and the resulting damage to the car in which the aliens were being transported “is not too attenuated,” and restitution is appropriate. Id.

C. The government did not breach the plea agreement

Alvarez also argues that the government breached his plea agreement by requesting restitution even though the agreement did not mention it. We review a claim that the government has breached the terms of a plea agreement de novo. United States v. Whitney, 673 F.3d 965, 970 (9th Cir. 2012).

The sequence of events leading up to the district court’s ultimate restitution order is important here. The plea agreement stated that the crime to which Alvarez was pleading guilty carried a maximum of 10 years in prison, a maximum $250,000 fine, a mandatory special assessment of $100 per count, and a term of supervised release of no more than three years. It did not specifically warn that Alvarez may be required to pay restitution, but it did mention restitution twice. First, in a subsection on supervised release, the agreement provided that Alvarez would not attempt to reduce any term of supervised release until he has “fully paid and satisfied any special assessments, fine, criminal forfeiture judgment and restitution judgment.” Second, the agreement included a provision in which Alvarez promised to waive, “to the full extent of the law, any right to appeal or to collaterally attack the conviction and sentence, including any restitution order.”

Restitution first came up in Alvarez’s sentencing in the presentence report, which recommended that Alvarez pay $9,114.03 in restitution for the damage done to the car. The government did not ask for restitution until Alvarez raised it himself at the sentencing hearing. At that hearing, Alvarez’s attorney told the court that “restitution is appropriate in this case” because “there was an actual loss to someone,” and contested only the amount of restitution that the presentence report had recommended. Alvarez himself then told the court that he knew that he would have to pay restitution for the damaged Ford and that he did not have any problem doing so. The district court agreed that restitution would be appropriate and asked the government for its position on the appropriate amount. As noted above, the court ultimately ordered restitution in the amount of $2,900.

“Plea agreements are subject to contract-law standards of interpretation.” United States v. Kamer, 781 F.2d 1380, 1387 (9th Cir. 1986). Thus, “[i]n determining whether a plea agreement has been broken, courts look to what was reasonably understood by [the defendant] when he entered his plea of guilty.” Id. (quoting United States v. Travis, 735 F.2d 1129, 1132 (9th Cir. 1984)). The reasonable expectations of the defendant can be ascertained through “the objective proof on the record.” Id.

In Kamer, we held that the defendant had shown a reasonable expectation that restitution would not be imposed when the district judge indicated multiple times that there would be no restitution and when “subsequent to signing the plea agreement [the defendant] told the judge it was his understanding that no restitution would be imposed.” Id. at 1388-89. Moreover, the restitution amount in Kamer was “in the millions,” and was therefore “material enough to demand express inclusion in the plea agreement.” Id. at 1389 (quoting United States v. Garcia, 698 F.2d 31, 36 n.4 (1st Cir. 1983)).

Here, in contrast, Alvarez told the judge at the initial sentencing hearing, “I know I do have to pay restitution for the vehicle that was damaged. I know that for a fact, and I have no problem doing that.” In addition, the total restitution ordered was under $3,000. Under these circumstances, it is clear that Alvarez reasonably understood that he could be required to pay restitution. The government did not breach the agreement by pursuing restitution subsequent to Alvaréz’s clear statement that he expected to have to pay it.

D. The district court’s failure to advise Alvarez that he may be subject to restitution was harmless

Finally, Alvarez argues that the district court erred in imposing restitution even though it failed to warn him at his change of plea hearing that the imposition of restitution was a possible consequence of his guilty plea. We review the adequacy of a Rule 11 plea colloquy de novo. United States v. Minore, 292 F.3d 1109, 1115 (9th Cir. 2002).

Where restitution is a possible penalty for a crime, Rule 11 of the Federal Rules of Criminal Procedure requires that a defendant be advised of the court’s authority to impose restitution before the court can accept a guilty plea. Fed. R. Crim. P. ll(b)(l)(K). Here, the government concedes that the court’s failure to advise Alvarez of its power to impose restitution at the change of plea hearing constituted error. However, any variance from Rule 11 “is harmless error if it does not affect substantial rights.” Fed. R. Crim. P. 11(h). Under our case law, “a district court’s failure to advise the defendant of the possibility of restitution [does] not constitute reversible error where the defendant was advised he was subject to a fíne in an amount in excess of the restitution imposed.” United States v. Crawford, 169 F.3d 590, 592 (9th Cir. 1999). The judge in this case informed Alvarez that he could face a fíne of up to $250,000, which is far more than the $2,900 in restitution he was ultimately required to pay. Thus, the Rule 11 error was harmless.

Moreover, the court acknowledged the mistake at the sentencing hearing and offered Alvarez the opportunity to withdraw his plea. Alvarez argued that this remedy was insufficient and instead requested specific performance in the form of a sentence that did not provide for any restitution. The district court concluded that specific performance was “unavailable” after noting that there was a “disconnect” between the harm of a possible involuntary plea and a remedy that would “limit the options that are otherwise available for supervised release.” Alvarez now argues that the district court erred in failing to recognize its discretion not to impose restitution.

Because the district court’s failure to advise Alvarez of the possibility that he might face restitution was harmless, the court was under no obligation to offer him any remedy for the error. See Crawford, 169 F.3d at 592-93. It nevertheless offered him the opportunity to withdraw his plea agreement, which is the standard remedy for a Rule 11 violation. See McCarthy v. United States, 394 U.S. 459, 472, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969) (“[A] defendant whose plea has been accepted in violation of Rule 11 should be afforded the opportunity to plead anew.”). A district court also has “the opportunity, at its discretion, to render harmless its earlier oversight by deleting the restitution portion of [a] sentence” imposed in violation of Rule 11(b)(1)(E). United States v. Rogers, 984 F.2d 314, 318-19 (9th Cir. 1993) (emphasis added). However, the district court is not required to offer that option, and the decision of the district court here not to eliminate restitution was well within its discretion.

We affirm the district court’s order of restitution in the amount of $2,900.

AFFIRMED.

      . The Hughey opinion interpreted the restitution provisions of the Victim and Witness Protection Act of 1982, which is not at issue in this case. 495 U.S. at 413, 110 S.Ct. 1979. However, in Batson, we held that Hughey applies equally to awards of restitution imposed as a condition of supervised release. 608 F.3d at 636-37.

      . The government has not sought to enforce an appeal waiver or argued that we should dismiss this appeal on that basis.