The ‘Carter Case’ Crisis: NYC’s Billion-Dollar Special Education Legal Battle
New York City is grappling with a systemic surge in special-education lawsuits that have created a costly “industrial complex” of private providers and legal specialists. These “due process” claims, known as Carter cases following a 1993 Supreme Court decision, allow parents to sue the Department of Education (DoE) to cover the costs of specialized private tuition, transportation, and evaluations when public schools fail to provide a free, appropriate public education (FAPE).
The scale of the phenomenon is stark. New York State’s rate of claims per student is ten times the national average. In 2021, 98 percent of these cases in the state originated in New York City. The financial toll has escalated rapidly: according to the city’s Independent Budget Office, spending on these cases rose from $234 million in 2015 to $1.1 billion in 2025. For 2027, the city has budgeted approximately $1.5 billion for these services and legal costs, representing about 4 percent of the entire education budget.
A System of Built-In Inequity
While the legal recourse is available to all, the benefits are not distributed evenly. Last school year, 71 percent of children who won private-school tuition payments were white, despite white students making up only 12.5 percent of all students with disabilities in the city’s public schools. Geographic disparities are equally pronounced; in 2021, the Upper West Side recorded approximately 14.8 Carter cases per 1,000 students, while Queens averaged fewer than one case per 1,000 students.
Christina Foti, the city’s deputy chancellor in the Division of Inclusive and Accessible Learning, points to an “economic infrastructure” of high-end private schools, tutors, and lawyers that has contributed to inflated costs. Some of these specialized schools charge tuition ranging from $75,000 to as high as $176,912 per year, offering facilities and curricula that rival the city’s most elite private institutions.
The ‘Wait to Fail’ Reality
Advocates argue that these lawsuits are a symptom of egregious system failures. Randi Levine, policy director at Advocates for Children of New York, describes a “wait to fail” tendency where the DoE may discourage teachers from using the term “dyslexia” or tell parents to “give it more time” rather than providing immediate evaluations.
The public system is currently strained by significant resource shortages. Last year, the teachers union reported 1,400 unfilled positions for paraprofessionals. Programs for students with autism—such as The Nest, Horizon, and AIMS—are oversubscribed, and DoE testimony from March 2026 indicated that more than a third of preschoolers with IEPs were not receiving all legally mandated services.
The Legal Gauntlet
To win a Carter case, families must pass a three-part test:
- Failure of FAPE: Did the district fail to offer a free, appropriate public education?
- Appropriateness: Is the chosen private school an appropriate setting for the child?
- Equitable Considerations: Did the family act reasonably and cooperate during the process?
Navigating this process is often a high-stakes financial gamble. Parents may be required to pay tuition and legal retainers—often in the four- or five-figure range—upfront while waiting months or years for reimbursement. Some families have reported risks associated with solo practitioners who disappear after receiving payment, while others have been advised by lawyers to avoid amending Individualized Education Plans (IEPs) to ensure the public school’s failure remains evident for the court.
Life-Changing Outcomes
Despite the controversy, the results for students can be transformational. For children with severe disabilities, such as those at the iHOPE school, the legal process provides access to critical tools. One student, Kevin, who has a rare genetic disorder, was able to use eye-gaze technology to communicate for the first time after the DoE had initially informed his mother he was not a candidate for such a device.
Similarly, parents of children with dyslexia and ADHD report that moving to specialized schools has ended “school refusal” and severe anxiety, allowing students to thrive academically and emotionally.
The Path Forward
The city’s approach to these cases has shifted across administrations. While Michael Bloomberg fought claims and Bill de Blasio encouraged settlements, Mayor Eric Adams has vowed to improve public options, including the opening of two small specialized public schools dedicated to dyslexia.
Looking ahead, the city may see further efforts to curb the reliance on litigation. Zohran Mamdani has proposed a plan to save $149 million by expanding public special-education programs and improving management to reduce the number of due-process cases. However, as Christina Foti noted, the challenge remains that an inclusive public-school system cannot be built through litigation alone.
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