Nunn et al v. Arkansas Department of Human Services et al
MEMORANDUM OPINION. Signed by Honorable Susan O. Hickey on September 27, 2012. (cnn)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION
CASE NO. 1:10-cv-1063
JOHN SELIG, in his official capacity as Director
of the Arkansas Department of Human Services; and
DR. JAMES GREEN, in his Official Capacity as
Director of the Division of Developmental Disabilities
of the Arkansas Department of Human Services
Before the Court is the Report and Recommendation filed September 11, 2012 by the
Honorable Barry A. Bryant, United States Magistrate Judge for the Western District of Arkansas.
(ECF No. 38). Judge Bryant recommends that Defendants John Selig and Dr. James Green’s Motion
for Summary Judgment (ECF No. 26) be granted in part and denied in part. Specifically, Judge
Bryant recommends that Plaintiff's remaining equal protection claims be dismissed and that
Plaintiff's due process claims proceed to trial. All parties have filed objections to the Report and
Recommendation. (ECF Nos. 39-40).1 After reviewing the record de novo, the Court adopts Judge
Bryant's Report and Recommendation in part.
I. Plaintiff’s objections to summary judgment on its equal protection claims
Plaintiff KidQuest, Inc. is a child care agency licensed by the Arkansas Department of
Human Services (“DHS”) to provide early childcare intervention services. Plaintiff alleges that DHS
leadership violated the Equal Protection clause by treating similarly situated Caucasian service
Plaintiff’s Individuals with Disabilities Education Act claims and claims for accounting,
damages, punitive damages, and retroactive damages were previously dismissed by the Court. (ECF No.
16). Plaintiff’s equal protection claims, due process claims, and claims for prospective injunctive relief
against Defendant John Selig and Defendant James Green are all that remain.
providers more favorably than Plaintiff, a service provider with primarily African-American
leadership. Judge Bryant recommends granting summary judgment on Plaintiff's equal protection
claims because Plaintiff failed to identify similarly situated white providers who were treated
differently. See Anderson v. Cass County, Mo. 367 F.3d 741, 748 (8th Cir. 2004). Judge Bryant
found that the Developmental Day Treatment Clinic Services (“DDTCS”) Programs or “center
based” providers that Plaintiff sought to compare itself with were too dissimilar in terms of services
provided, types of disabilities treated, eligibility requirements, and corporate structure.
Plaintiff objects to Judge Bryant’s recommendation by repeating many of the same factual
allegations and arguments contained in its brief in opposition to Defendants' Motion for Summary
Judgment. Plaintiff argues that “[t]he similarities between early intervention providers and DDTCS
or ‘center based’ providers are more significant than their differences, which are incidental.”
Plaintiff repeats the following as evidence of substantial similarity: “they provide developmental
services to children from birth to three years old, receive Medicare funding administered by DHS,
and must abide by regulations promulgated…by DHS.”
After reviewing Plaintiff’s objections, the Court agrees with Judge Bryant that these DDTCS
providers are not similarly situated to Plaintiff. To prevail on an equal protection claim, a Plaintiff
has the burden of proving that disparately treated white providers were “similarly situated in all
relevant respects.” Harvey v. Anheuser-Busch, Inc., 38 F.3d 968, 972 (8th Cir. 1994). While there
may be some similarities between Plaintiff and these DDTCS providers, their substantial
dissimilarities in services offered, corporate structure, and specific regulatory requirements preclude
a finding of substantial similarity. For these reasons, the Court overrules Plaintiff’s objections and
adopts Judge Bryant’s Report and Recommendation as to Plaintiff’s equal protection claims.
II. Defendants’ objections to the denial of summary judgment on Plaintiff’s procedural
due process claims
Judge Bryant recommends denying Defendant’s Motion for Summary Judgement as to
Plaintiff’s procedural due process claims because issues of material fact remain. Defendants object
that Judge Bryant did not discuss the threshold issue of whether Plaintiff’s Complaint actually
includes a procedural due process claim. Defendants argue that Plaintiff’s procedural due process
arguments were impermissibly raised for the first time in Plaintiff’s response to Defendant’s Motion
for Summary Judgment. For this reason, Defendants contend that the merits of the procedural due
process claim should not be considered by the Court.
Plaintiff makes the following substantive allegations against Defendants in its Complaint
(ECF No. 1): (1) Plaintiff has been treated differently from other predominately white providers
(Complaint, ¶ 16); (2) Defendants have favored Caucasian service providers for no legitimate reason
(Complaint, ¶ 17); (3) Defendants encouraged Caucasians to establish competitive provider agencies
and then favored those Caucasian providers (Complaint, ¶ 18); (4) Defendants removed an AfricanAmerican program administrator for pre-textual, race-related reasons (Complaint, ¶ 19); (5)
Defendants have denied Plaintiff the right to “nondiscriminantly enjoy the right to deliver... services”
(Complaint, ¶ 20); (6) Defendants have withheld payments to Plaintiff in order to destroy Plaintiff’s
business and to shift provider services from African-American providers to Caucasian providers
(Complaint, ¶ 21); and (7) Plaintiff was harmed by Defendants’ “purposeful, intentional, and
wrongful and racially motivated conduct.” (Complaint, ¶ 22).
Plaintiff’s Complaint makes one explicit reference to due process: “All plaintiffs invoke the
equal protection and due process clauses of the 14th Amendment to the Constitution as having been
violated by defendants as a predicate basis for the relief they seek herein.” (Complaint, ¶ 27). No
delineation between substantive due process and procedural due process is made in the Complaint.2
In its response to Defendant’s Motion for Summary Judgment, Plaintiff set forth the
following facts in support of a procedural due process claim: (1) KidQuest did not receive any notice
prior to 2007 that it was out of compliance with DHS regulations; (2) DHS established new rules
while bypassing the lawful rulemaking process, thereby adversely affecting Plaintiff; and (3) DHS
did not notify Plaintiff when complaints were made against them and did not notify Plaintiff when
investigations were conducted as a result of those complaints. (ECF No. 33). Defendants argue that
Plaintiff’s procedural due process arguments were raised for the first time at the summary judgment
stage and that these factual allegations do not support any claim contained in Plaintiff’s Complaint.
The Court agrees.
Federal Rule of Civil Procedure 8(a) provides that a complaint must set forth “a short and
plain statement of the claim showing that the pleader is entitled to relief.” “The essential function
of notice pleading ‘is to give the opposing party fair notice of the nature and basis or grounds for a
claim, and a general indication of the type of litigation involved.’” N. States Power Co. v. Fed.
Transit Admin., 358 F.3d 1050, 1056-57 (8th Cir. 2004) (quoting Oglala Sioux Tribe of Indians v.
Procedural due process and substantive due process, while similar in name, are quite different in
application. Procedural due process protects the right to be noticed and heard prior to the deprivation of
a property interest by the state. Mathews v. Eldridge, 424 U.S. 319, 333 (1976). Substantive due process
protects various fundamental liberty interests and guarantees “more than fair process.” County of
Sacramento v. Lewis, 523 U.S. 833, 840 (1998). Substantive due process disallows “certain government
actions regardless of the fairness of the procedures used to implement them.” Id. Each due process
theory requires different elements of proof and different levels of wrongdoing. Myers v. Scott Cnty., 868
F.2d 1017, 1019 (8th Cir.1989) (“[T]he theory of substantive due process is properly reserved for truly
egregious and extraordinary cases.”); Swipies v. Kofka, 419 F.3d 709, 715 (8th Cir. 2005) (To make a
procedural due process claim, a plaintiff must only show that he has a protected property interest and that
he was deprived of this interest without the opportunity to be heard on the matter.).
Andrus, 603 F.2d 707, 714 (8th Cir. 1979)). Although “notice pleading” is a liberal pleading
standard, claims consisting of bare legal conclusions do not satisfy Rule 8(a) requirements. Ashcroft
v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950 (2009) (“While legal conclusions can provide the
framework of a complaint, they must be supported by factual allegations.”). Furthermore, this liberal
pleading standard “does not require that, at the judgment stage, defendants must infer all possible
claims that could arise out of facts set forth in the complaint.” Gilmour v. Gates, McDonald & Co.,
382 F.3d 1312, 1315 (11th Cir. 2004). If a plaintiff has failed to properly set forth a particular claim
in their complaint, they are “not entitle[d]...to manufacture claims, which were not pled, late into the
litigation for the purpose of avoiding summary judgment.” N. States Power Co., 350 F.3d at 1057.
The question in this case is whether Plaintiff’s Complaint contains a properly pled procedural
due process claim. Procedural due process “insures every individual subject to a deprivation ‘the
opportunity to be heard at a meaningful time and in a meaningful manner.’” Swipies v. Kofka, 419
F.3d 709, 715 (8th Cir. 2005) (quoting Mathews v. Eldridge, 424 U.S. 319, 333 (1976)). In its
Complaint, Plaintiff does not mention any lack of notice or opportunity to be heard regarding the
complaints made against them or the rules enforced against them. Plaintiff’s Complaint exclusively
references disparate treatment of African-American service providers as compared to Caucasian
service providers. Even when discussing the allegations of disparate treatment, Plaintiff does not
allude to a lack of complaint notifications, a lack of investigation notifications, or a general lack of
procedural due process in the termination of any funding. While Plaintiff does make one general
reference to “due process” toward the end of its Complaint, specific references or facts relating to
lack of notice or deprivation of process first appeared in Plaintiff’s response to Defendants’ Motion
for Summary Judgment. Simply including the words “due process” in a complaint, with no factual
allegations to support a procedural due process claim, does not satisfy Rule 8(a) pleading
requirements and does not give an opposing party meaningful notice of the basis for a procedural due
process claim. That Plaintiff has now come forward during the summary judgment phase of
litigation with allegations to support a procedural due process claim does not cure the deficiency in
Plaintiff’s insufficient pleading of procedural due process violations is further illustrated by
the fact that this Court, upon reviewing Plaintiff’s Complaint in deciding Defendant’s Motion to
Dismiss, did not single out any of Plaintiff’s claims as implicating deficient notice or the lack of
opportunity to be heard. (ECF No. 15-16). Furthermore, Defendants’ brief in support of their
summary judgment motion spends considerable time addressing Plaintiff’s “due process” claim as
implicating substantive due process, again indicating the lack of procedural due process allegations
in Plaintiff’s Complaint.3 Plaintiff cannot be allowed to capitalize on vaguely worded pleadings by
inserting claims and allegations during the summary judgment phase that have not been properly
pleaded in the Complaint.
Because Plaintiff’s Complaint only generally referenced a claim for “due process” and
contained no allegations of deficient notice or lack of opportunity to be heard on a matter, the Court
finds that Plaintiff’s Complaint does not contain a claim for violation of procedural due process. For
Inferring a claim for substantive due process was a fair reading of Plaintiff’s Complaint by
Defendants. The Complaint alleges that the actions and decisions made by Defendants were arbitrary,
wrongful, intentional, and motivated by race and that Defendants have deprived Plaintiff of its right to
deliver services as provided by law. While Plaintiff’s Complaint only generally referred to “due process”
violations, these allegations are consistent with what must be shown in order to establish a substantive
due process claim. Novotny, 664 F.3d at 1178 (“To prevail on a substantive due process claim...[a
plaintiff] must show a constitutionally protected property interest and that...officials used their power in
such an arbitrary and oppressive way that it shocks the conscience.”) (internal quotations omitted).
this reason, the Court will not address the merits of the procedural due process arguments raised in
Plaintiff’s response to Defendants’ Motion for Summary Judgment. Accordingly, the Court declines
to adopt Judge Bryant’s recommendation regarding Plaintiff’s alleged due process claims.
Defendants’ Motion for Summary Judgment as to any existing substantive due process claims made
by Plaintiff will be granted.4
For the reasons stated herein and above, as well as those contained in Judge Bryant’s
Report and Recommendation (ECF No. 38), Defendants’ Motion for Summary Judgment (ECF
No. 26) should be and hereby is GRANTED. Plaintiff’s Complaint is hereby DISMISSED
WITH PREJUDICE. A judgment of even date, consistent with this opinion, shall issue.
IT IS SO ORDERED, this 27th day of September, 2012.
/s/ Susan O. Hickey
Hon. Susan O. Hickey
United States District Judge
Defendants moved for summary judgment on what they viewed as a substantive due process
claim made by Plaintiff. However, the Court need not consider whether Plaintiff’s Complaint sets forth a
substantive due process claim that should survive summary judgment. Plaintiff effectively abandoned
any substantive due process claim when it argued in its brief in opposition to summary judgment that it
was pursuing a procedural due process claim rather than a substantive due process claim. In sum,
Plaintiff did not attempt to respond to Defendant’s argument that Plaintiff’s substantive due process
claim fails as a matter of law. (ECF No. 33, pp. 6).
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