K. v. Education, Department of, State of Hawaii et al
Filing
93
ORDER GRANTING IN PART THIRD-PARTY DEFENDANTS' MOTION TO DISMISS THIRD-PARTY COMPLAINT 77 . Signed by JUDGE ALAN C KAY on 11/07/2012. (eps)CERTIFICATE OF SERVICEParticipants registered to receive electronic not ifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI’I
)
F.K., by and through her mother, )
)
A.K.,
)
)
Plaintiffs,
)
)
vs.
)
Civ. No. 12-00136 ACK-RLP
)
DEPARTMENT OF EDUCATION, State
)
of Hawaii, KATHRYN MATAYOSHI, in
)
her official capacity as
)
Superintendent of the Hawaii
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Public Schools,
)
)
Defendants.
)
)
DEPARTMENT OF EDUCATION, State
)
ORDER GRANTING IN PART
of Hawaii, KATHRYN MATAYOSHI, in ) THIRD-PARTY DEFENDANTS’ MOTION
her official capacity as
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TO DISMISS THIRD-PARTY
)
Superintendent of the Hawaii
COMPLAINT
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Public Schools,
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Third-Party Plaintiffs )
)
and Counterclaim
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Defendants,
)
)
vs.
)
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LOVELAND ACADEMY, LLC, PATRICIA )
J. DUKES, individually and as
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Director of Loveland Academy,
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LLC, and DOE DEFENDANTS 1-10,
)
)
Third-Party
)
Defendants and
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Counterclaimants.
)
)
ORDER GRANTING IN PART THIRD-PARTY DEFENDANTS’ MOTION
TO DISMISS THIRD-PARTY COMPLAINT
For the following reasons, the Court GRANTS IN PART
Third-Party Defendants’ Motion To Dismiss the First Amended
Third-Party Complaint. Counts I, II, and IV of the Third-Party
Complaint are hereby DISMISSED without prejudice. The Court
DENIES the Motion as to Counts III and V.
PROCEDURAL HISTORY
On March 9, 2012, minor Plaintiff F.K., by and through
her mother, A.K., filed a Complaint against the state Department
of Education and the Superintendent of Hawai’i Public Schools in
her official capacity (together “DOE”). (Doc. No. 1.) On April 5,
2012, DOE filed an Answer to the Complaint and a Third-Party
Complaint against Loveland Academy, LLC and Patricia J. Dukes
individually and in her official capacity as Director of Loveland
Academy (together “the Loveland Parties”). (Doc. No. 12.) On May
27, 2012, the Loveland Parties filed an Answer to the Third Party
Complaint and a Counterclaim against DOE. (Doc. No. 23.) On June
6, 2012, DOE filed an Answer to the Loveland Parties’
Counterclaim. (Doc. No. 29.)
On September 17, 2012, with the Court’s permission, DOE
filed a First Amended Third-Party Complaint. (Doc. No. 68 (“DOE
Compl.”).) On October 1, 2012, the Loveland Parties filed the
instant Motion To Dismiss DOE’s Complaint. (Doc. No. 77
(“Motion”).) On October 15, 2012, DOE filed an Opposition to the
2
Motion. (Doc. No. 85 (“Opp’n”).) On October 22, 2012, the
Loveland Parties filed a Reply. (Doc. No. 90.) The Court held a
hearing on the Motion on November 5, 2012.
FACTUAL HISTORY1/
DOE alleges that Loveland Academy provides special
education and related services to IDEA-eligible students and is
paid by DOE for its services. (DOE Compl. ¶ 17.) Plaintiff F.K.
has attended Loveland Academy since 2008. (Id. ¶ 18.) DOE paid
for F.K.’s education for the 2008-2009 and 2009-2010 school
years. (Id. ¶ 19.) At some point, the Loveland Parties obstructed
DOE’s ability to review F.K.’s educational records, including by
(a) requesting that DOE obtain F.K.’s parent’s written consent to
review the records; (b) establishing a specific date and time
that DOE would be allowed to monitor F.K.’s education; and (c)
preventing DOE from speaking to F.K.’s teachers and therapists.
(Id. ¶ ¶ 25, 36, 43, 50.) DOE therefore stopped paying for F.K.’s
tuition, as required by Hawai’i Revised Statutes § 302A-443 (“Act
129”). (Id. ¶ ¶ 26, 38.) F.K. then filed the instant action,
naming DOE as defendant and alleging, inter alia, that Act 129 is
unconstitutional under the Supremacy Clause. (Id. ¶ ¶ 5.) On June
22, 2012, the Court granted F.K.’s motion for a preliminary
1/
The facts as recited in this Order are for the purpose of
disposing of the instant motion and are not to be construed as
findings of fact that the parties may rely on in future
proceedings in this case.
3
injunction, finding that F.K. was likely to prevail on her claim,
and ordering DOE to pay stay put payments for F.K.’s tuition
throughout the pendency of F.K.’s litigation. (Doc. No. 33.)
DOE alleges that it is the Loveland Parties’ fault that
DOE has been sued by F.K. (DOE Compl. ¶ ¶ 47, 58.) DOE’s
Complaint brings five purported claims against the Loveland
Parties: (1) violation of Act 129 and the federal Individuals
with Disabilities Education Act (“IDEA”); (2) violation of the
Family Educational Rights and Privacy Act (“FERPA”); (3)
negligence; (4) civil conspiracy; and (5) attorneys’ fees and
costs.
STANDARD
Federal Rule of Civil Procedure 12(b)(6) (“Rule
12(b)(6)”) permits dismissal of a complaint that fails “to state
a claim upon which relief can be granted.” Under Rule 12(b)(6),
review is generally limited to the contents of the complaint.
Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.
2001); Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir.
1996). Courts may also “consider certain materials — documents
attached to the complaint, documents incorporated by reference in
the complaint, or matters of judicial notice — without converting
the motion to dismiss into a motion for summary judgment.” United
States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Documents
whose contents are alleged in a complaint and whose authenticity
4
is not questioned by any party may also be considered in ruling
on a Rule 12(b)(6) motion to dismiss. No. 84 Emp’r-Teamster Joint
Council Pension Trust Fund v. Am. W. Holding Corp., 320 F.3d 920,
925 n.2 (9th Cir. 2003).
On a Rule 12(b)(6) motion to dismiss, all allegations
of material fact are taken as true and construed in the light
most favorable to the nonmoving party. Fed’n of African Am.
Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir.
1996). However, conclusory allegations of law, unwarranted
deductions of fact, and unreasonable inferences are insufficient
to defeat a motion to dismiss. See Sprewell, 266 F.3d at 988.
Moreover, the court need not accept as true allegations that
contradict matters properly subject to judicial notice or
allegations contradicting the exhibits attached to the complaint.
Id.
In summary, to survive a Rule 12(b)(6) motion to
dismiss, “[f]actual allegations must be enough to raise a right
to relief above the speculative level . . . on the assumption
that all the allegations in the complaint are true (even if
doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007) (internal citations and quotations omitted). “While a
complaint attacked by a Rule 12(b)(6) motion to dismiss does not
need detailed factual allegations . . . a plaintiff’s obligation
to provide the ‘grounds’ of his ‘entitlement to relief’ requires
5
more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.” Id. (internal
citations and quotations omitted). Dismissal is appropriate under
Rule 12(b)(6) if the facts alleged do not state a claim that is
“plausible on its face.” Id. at 570. “Determining whether a
complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.” Ashcroft v. Iqbal,
556 U.S. 662, 679 (2009) (citation omitted). “[W]here the
well-pleaded facts do not permit the court to infer more than the
mere possibility of misconduct, the complaint has alleged—but it
has not ‘show[n]’—‘that the pleader is entitled to relief.’” Id.
(quoting Fed. R. Civ. P. 8(a)(2)).
“Dismissal without leave to amend is improper unless it
is clear that the complaint could not be saved by any amendment.”
Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009)
(internal quotation marks omitted). “But courts have discretion
to deny leave to amend a complaint for futility, and futility
includes the inevitability of a claim’s defeat on summary
judgment.” Johnson v. Am. Airlines, Inc., 834 F.2d 721, 724 (9th
Cir. 1987) (citations and internal quotation marks omitted).
6
DISCUSSION
Count I: Violation of HRS 302A-443(f) and IDEA
DOE’s “Count I” alleges that the Loveland Parties have
violated two statutes, Act 129 and 20 U.S.C. § 1412(a)(10)(B).
DOE seeks declaratory relief from the Court in the form of a
finding that the Loveland Parties violated the IDEA and Act 129.
(Opp’n at 3-4.) This Count does not appear to state a claim upon
which relief may be granted.
First, 20 U.S.C. § 1412(a)(10)(B) states:
(i) In general
Children with disabilities in private schools
and facilities are provided special education
and related services, in accordance with an
individualized education program, at no cost
to their parents, if such children are placed
in, or referred to, such schools or
facilities by the State or appropriate local
educational agency as the means of carrying
out the requirements of this subchapter or
any other applicable law requiring the
provision of special education and related
services to all children with disabilities
within such State.
(ii) Standards
In all cases described in clause (i), the
State educational agency shall determine
whether such schools and facilities meet
standards that apply to State educational
agencies and local educational agencies and
that children so served have all the rights
the children would have if served by such
agencies.
Neither DOE’s Complaint nor its Opposition demonstrates how the
Loveland Parties can have violated 20 USC § 1412(a)(10)(B). The
7
statute on its face does not place any requirements on private
schools; it places requirements upon “the State educational
agency” – that is, DOE. See 20 U.S.C. § 1401(32) (“The term
‘State educational agency’ means the State board of education or
other agency or officer primarily responsible for the State
supervision of public elementary schools and secondary schools
. . . .”) The Court has found no cases in which a private school
was found to have violated this subsection. The Court cannot
logically be asked to declare that the Loveland Parties violated
a law which they are not required to follow.
Next, Act 129 states in relevant part:
Any private school or placement that receives
funding from the department for the placement
of a student with a disability . . . shall
allow the department access to . . . monitor
any student placed at the private school or
placement. Monitoring under this subsection
shall include but not be limited to:
(1) The monitoring of all private schools and
placements to ensure compliance with all
applicable federal, state, and county laws,
rules, regulations, and ordinances pertaining
to health and safety;
(2) The monitoring of all students with
disabilities placed in a private school or
placement to ensure that:
(A) Each student is receiving academic
education, instruction, and programming as
required by the student's individualized
education program; and
(B) The curriculum and instruction are
rigorous, based on content standards, and
aligned with the Common Core State Standards;
8
(3) The direct observation of a student with
a disability placed in a private school or
placement, with or without notice to the
private school or placement;
(4) The review of all records, notes, or
documentation related to students with
disabilities placed in a private school or
placement; and
(5) The right of the department to talk to
the student's teachers at the private school
or placement at reasonable times.
Unlike 20 U.S.C. § 1412(a)(10)(B), Act 129 on its face applies to
the Loveland Parties. The Court finds, however, that whether the
Loveland Parties violated Act 129 is not a proper subject for
declaratory relief under either federal or state law.
Federal Declaratory Relief
Declaratory relief under federal law is governed by the
Declaratory Judgment Act, 28 U.S.C. § 2201. See Fed. R. Civ.
Proc. 57. Under federal law, declaratory relief is a remedy, not
a claim. E.g., Buck v. Am. Airlines, Inc., 476 F.3d 29, 33 n.3
(1st Cir. 2007); In re Joint E. & S. Dist. Asbestos Litig., 14
F.3d 726, 731 (2d Cir. 1993). Federal actions for declaratory
judgment “are governed by the same pleading standards that are
applied in other federal civil actions. . . . The Declaratory
Judgment Act neither extends the jurisdiction of the federal
courts nor enlarges substantive rights.” 5 Charles Alan Wright et
al., Federal Practice and Procedure § 1238 (3d ed. & supp. Sept.
2012).
9
The purpose of the Declaratory Judgment Act is “to give
litigants an early opportunity to resolve federal issues to avoid
‘the threat of impending litigation.’” Biodiversity Legal Found.
v. Badgley, 309 F.3d 1166, 1172 (9th Cir. 2002) (quoting Seattle
Audubon Soc’y v. Moseley, 80 F.3d 1401, 1405 (9th Cir. 1996)).
Moreover, federal declaratory relief is appropriate only when the
judgment will “serve a useful purpose in clarifying and settling
the legal relations in issue” and “terminate and afford relief
from the uncertainty, insecurity and controversy giving rise to
the proceeding.” Eureka Fed. Sav. & Loan Ass'n v. Am. Cas. Co.,
873 F.2d 229, 231 (9th Cir. 1989) (citation omitted).
Where a party seeks declaratory relief as to a claim or
defense - or part of a claim or defense - the party has already
raised, declaratory relief should be denied because it will not
avoid impending litigation, and would neither clarify nor
terminate the litigation. See, e.g., Trilogy Props. LLC v. SB
Hotel Assocs. LLC, Civ. No. 09-21406, 2010 WL 7411912, at *5
(S.D. Fla. Dec. 23, 2010) (dismissing declaratory judgment claim
where claimant merely sought a determination on a factual dispute
alleged in another claim); Del. State Univ. Student Hous. Found.
v. Ambling Mgmt. Co., 556 F. Supp. 2d 367, 373-74 (D. Del. 2008)
(dismissing declaratory judgment claim where one party had sued
the other for breach of contract and defendant countersued for a
declaratory judgment that it had not breached the contract). In
10
Ambling, the court noted that refusing to grant the declaratory
relief sought by the defendant “will not deprive the [defendant]
of the ultimate remedy sought by its request for declaratory
judgment” because the issue would be answered with the resolution
of the other claim at issue in the case. Ambling, 556 F. Supp. 2d
at 375.
Here, DOE seeks declaratory judgment that the Loveland
Parties breached Act 129
2/
– which is one of the factual
allegations upon which DOE’s negligence claim is based. (See DOE
Compl. at ¶ 43.) The requested declaratory relief would therefore
be tautological and would merely confuse the issues in this
litigation. See, e.g., Home Ins. Co. v. Perlberger, 900 F. Supp.
768, 773 (E.D. Pa. 1995) (dismissing claim for declaratory
2/
The allegations laid out under DOE’s “Count I” and “Count
II” and statements in DOE’s opposition brief reflect that DOE
seeks declaratory judgment as to the Loveland Parties’ past
conduct in preventing DOE from monitoring F.K. and refusing to
release F.K.’s records to DOE without parental consent. (See DOE
Compl. ¶¶ 24-25, 34-37; Opp’n at 3-4, 5.) Remarks made by DOE’s
counsel at oral argument, however, suggested that DOE seeks
declaratory judgment as to the Loveland Parties’ general duty to
comply with Act 129 in all cases. A third-party complaint is
limited to claims that are derivatively based on the original
plaintiff’s claim. United States v. One 1977 Mercedes Benz, 708
F.2d 444, 452 (9th Cir. 1983); Am. Zurich Ins. Co. v. Cooper Tire
& Rubber Co., 512 F.3d 800, 805 (6th Cir. 2008) (“[A] defendant’s
claim against a third-party defendant cannot simply be an
independent or related claim, but must be based upon the original
plaintiff’s claim against the defendant.”) F.K.’s original claim
concerns DOE’s refusal to make stay-put payments to Loveland for
F.K.’s tuition. Claims that go beyond the scope of F.K’s stay-put
status to encompass DOE’s general relationship with the Loveland
Parties are not proper subjects for impleader and will not be
considered.
11
judgment where the declaration would be irrelevant if jury
reached one verdict and would require further court proceedings
if the jury reached another). Here, as in Ambling, Perlberger,
and Trilogy Properties, the declaratory judgment that DOE seeks
would be either irrelevant or confusing, because it merely
duplicates the question of whether the Loveland Parties violated
state law, which is already at issue in DOE’s negligence claim.
Dismissing DOE’s claim for declaratory relief therefore “will not
deprive [DOE] of the ultimate remedy sought by its request for
declaratory judgment.” Ambling, 556 F. Supp. 2d at 375.
State Declaratory Relief
Under Hawai’i state law, declaratory relief is governed
by Hawai’i Revised Statutes § 632-1, which states:
Relief by declaratory judgment may be granted
in civil cases where an actual controversy
exists between contending parties, or where
the court is satisfied that antagonistic
claims are present between the parties
involved which indicate imminent and
inevitable litigation, or where in any such
case the court is satisfied that a party
asserts a legal relation, status, right, or
privilege in which the party has a concrete
interest and that there is a challenge or
denial of the asserted relation, status,
right, or privilege by an adversary party who
also has or asserts a concrete interest
therein, and the court is satisfied also that
a declaratory judgment will serve to
terminate the uncertainty or controversy
giving rise to the proceeding.
12
The Hawai’i Supreme Court has explained that under state law,
much like under federal law, declaratory relief is properly
granted only where “the facts alleged, under all the
circumstances, show that there is a substantial controversy,
between parties having adverse legal interests, or sufficient
immediacy and reality to warrant a declaratory judgment” and “the
court is satisfied also that a declaratory judgment will serve to
terminate the uncertainty or controversy giving rise to the
proceeding.” Kaho‘ohanohano v. State, 162 P.3d 696, 726 (Haw.
2007) (citations and quotations omitted).
As discussed above, in this case, the declaratory
relief sought by DOE will not “serve to terminate the uncertainty
or controversy giving rise to the proceeding.” The declaration
would merely decide one element of DOE’s negligence claim.
The Court finds instructive the Intermediate Court of
Appeals’ unpublished disposition in County of Maui v. Lundborg,
220 P.3d 1052, at *4 (Haw. Ct. App. 2009) (unpublished). In that
case, Lundborg twice applied for a state firearm permit; County
of Maui denied first application and refused to consider his
second. Id. at *1. County of Maui then filed a state court
complaint seeking a declaration that Lundborg’s first application
had been properly denied; the trial court granted declaratory
relief at the summary judgment stage. Id. The state appellate
court reversed, holding that the trial court should not have
13
granted declaratory relief because the declaration “failed to
‘terminate the uncertainty or controversy giving rise to the
proceeding.’” Id. at *4 (quoting Kaho’ohanohano, 162 P.3d at
726). “By granting relief on the narrow, uncontested issue of the
1999 denial, the circuit court failed to settle the possibility
of uncertainty and future litigation with respect to Lundborg's
due process and equal protection claims arising from the County
of Maui's refusal to consider his current eligibility.” Id.
Here, as in Lundborg, the declaration that DOE seeks
would not settle the uncertainty and litigation with respect to
DOE and the Loveland Parties’ mutual claims. It would merely
decide one of DOE’s factual allegations – one which is already at
issue in its negligence claim.
In conclusion, DOE’s “Count I” does not state a claim
that is appropriate for declaratory relief under either federal
or state law. The Court therefore DISMISSES this claim.
Count II – Violation of FERPA and Hawai’i Administrative Rules
DOE’s Count II alleges that the Loveland Parties
violated a provision of FERPA, 20 U.S.C. § 1232g, and Hawai’i
Administrative Rules § 8-34-14(a)(1). This Count again does not
appear to state a claim upon which relief can be granted.
First, Hawai’i Administrative Rules § 8-34-14 states:
(a) The department shall not make accessible
nor release any education records or
personally identifiable information without
14
the written consent of the eligible student
or parent. Exceptions to this shall be:
(1) Department officials who have a
legitimate educational interest in the
records.
On its face, Hawai’i Administrative Rules § 8-34-14 applies to
DOE, not to a private school such as Loveland Academy. The Court
has found no legal authority to support the proposition that the
rule can be applied to the Loveland Parties. Again, the Court
cannot logically be asked to issue a declaration that the
Loveland Parties violated a rule that they are not required to
follow.
Next, 20 U.S.C. § 1232g states in relevant part:
(1) No funds shall be made available under
any applicable program to any educational
agency or institution which has a policy or
practice of permitting the release of
education records (or personally identifiable
information contained therein . . . .) of
students without the written consent of their
parents to any individual, agency, or
organization, other than to the following-(A) other school officials, including
teachers within the educational institution
or local educational agency, who have been
determined by such agency or institution to
have legitimate educational interests,
including the educational interests of the
child for whom consent would otherwise be
required . . . .
FERPA explicitly gives enforcement power to the federal Secretary
of Education. 20 U.S.C. § 1232g(f); 20 U.S.C. § 1234c; see United
States v. Miami Univ., 91 F. Supp. 2d 1132, 1137-38 (S.D. Ohio
15
2000). DOE has no power to bring a claim under FERPA. See
Girardier v. Webster Coll., 563 F.2d 1267, 1276-77 (8th Cir.
1977) (“Enforcement is solely in the hands of the Secretary of
Health, Education and Welfare . . . .”)
Moreover, even accepting as true the facts alleged in
DOE’s Complaint, it is not at all clear that the Loveland Parties
violated FERPA. FERPA states that a school shall not be paid if
it habitually releases its students’ records to third parties
without parental consent, unless the third party is a school
official. 20 U.S.C. § 1232g(1)(A). In other words, FERPA says
that a school is allowed to release its students’ records to
school officials without parental consent; it does not say that a
school must release its students’ records to school officials
without parental consent.3/ Cf. Norwood v. Slammons, 788 F. Supp.
1020, 1025 (W.D. Ark. 1991) (“Plaintiff does not, and could not
in good faith, contend that FERPA requires the disclosure she
3/
The Court notes, however, that since FERPA allows schools
to release records to school officials without parental consent,
it would seem most schools would likely exercise their authority
to do so; particularly in cases like Loveland Academy, where the
vast majority of the school’s funding comes from tuition fees
paid by the state educational agency. Moreover, Hawai’i’s Act 129
requires any private school that receives funding from DOE to
allow the department to monitor any student placed at the school,
including by allowing “review of all records . . . related to
students with disabilities” placed at the school. HRS § 302A-443.
16
seeks. The most that plaintiff can and does say is that FERPA
does not prohibit the requested release of the records.”)4/
In any case, DOE’s “Count II”, like its first claim, is
not a subject appropriate for declaratory relief under federal or
state law. This Count again seeks a declaration from the Court
that the Loveland Defendants violated a legal standard. (Opp’n at
5.) As discussed in detail above, such a declaration would be
duplicative of DOE’s negligence claim, would confuse the issues
in this litigation, and would not terminate the controversy
giving rise to these proceedings. The Court therefore DISMISSES
this claim.
Count III – Negligence
To state a claim for negligence under Hawai’i law, a
plaintiff must plead “(1) duty; (2) breach of duty; (3)
causation; and (4) damages.” Kaho’ohanohano v. Dep’t of Human
Servs., 178 P.3d 538, 563 (Haw. 2008). DOE has properly alleged
all four elements of a negligence claim.
4/
Counsel for the Loveland Parties at oral argument raised
the question of whether FERPA applies to Loveland Academy at all,
since Loveland Academy does not receive any funding directly from
the federal government; Loveland Academy receives funds from DOE,
which receives federal funds. This issue has arisen before,
during oral argument on Plaintiff F.K.’s motion for a preliminary
injunction. At that time, the Court found that the parties had
not adequately addressed the issue and ordered them to brief it
for the Court’s consideration if it arose again. (See Order
Granting Preliminary Injunction (Doc. No. 33) at 42 n.24.) Since
neither party briefed this issue in their motion papers, however,
the Court will not consider it at this time.
17
First, DOE has alleged that the Loveland Parties failed
to conform with a relevant statutory standard, namely Act 129.
(DOE Compl. ¶¶ 21, 24, 25, 43, 44.) These allegations plead the
first two elements of a negligence claim – a duty, and a breach
of that duty. E.g., State v. Tabigne, 966 P.2d 608, 616 (Haw.
1998) (“nonconformity with relevant statutory standards may be
admissible as evidence of negligence in civil cases”); Ono v.
Applegate, 612 P.2d 533, 539 (Haw. 1980) (“a standard of conduct
may be determined by reference to a statute”).5/
Next, DOE repeatedly pleads causation – that the
Loveland Parties’ conduct caused DOE to terminate payments to
Loveland Academy, which then caused DOE to become embroiled in
this litigation with F.K. (DOE Compl. ¶¶ 26, 38, 45-47.)
Finally, DOE’s claimed damages are the costs of its
litigation against F.K., which, as DOE correctly argues, are
recoverable if DOE proves that the Loveland Parties’ wrongful
5/
At the hearing on the Motion, counsel for the Loveland
Parties repeatedly argued that DOE has refused to accept this
Court’s ruling that Act 129 is unconstitutional. In granting
Plaintiff F.K.’s motion for a preliminary injunction, the Court
made a limited ruling that F.K. would likely succeed in showing
that subsection (i) of Act 129 is preempted by the Stay Put
provision of the IDEA. (See Order Granting Preliminary Injunction
at 37.) The Court’s grant of a preliminary injunction was not a
final ruling on the merits. See Univ. of Tex. v. Camenisch, 451
U.S. 390, 395 (1981) (“The purpose of a preliminary injunction is
merely to preserve the relative positions of the parties until a
trial on the merits can be held. . . . [T]he findings of fact and
conclusions of law made by a court granting a preliminary
injunction are not binding at trial on the merits.”) DOE’s
negligence claim is therefore viable at this stage.
18
acts involved it in the litigation. “It is generally held that
where the wrongful act of the defendant has involved the
plaintiff in litigation with others . . . such expenses,
including attorneys' fees, should be treated as the legal
consequences of the original wrongful act, and may be recovered
as damages.” Lee v. Aiu, 936 P.2d 655, 668-69 (1997) (quoting
Uyemura v. Wick, 551 P.2d 171, 176 (1976)) (further citations
omitted).6/
In order to recover attorneys’ fees as its damages, the
party pursuing the attorneys' fees must establish four elements:
(1) that the plaintiff became involved in a legal dispute because
of the defendant's tortious conduct; (2) that the litigation was
with a third party, not with the defendant from whom the fees are
sought to be recovered; (3) that the attorneys' fees were
incurred in that third-party litigation; and (4) that the fees
and expenses were the natural and necessary consequences of the
defendant's act. Lee, 936 P.2d at 668-69 (citations omitted). As
detailed above, DOE’s negligence claim pleads facts that, if
proved, would support such recovery.7/
6/
The Loveland Parties’ argument in their Reply that the Lee
language does not apply to DOE because DOE is not the “plaintiff”
in this litigation (Reply at 10-11) is misleading. It is
perfectly clear that as applied to DOE’s Third-Party Complaint,
DOE is the “plaintiff” and the Loveland Parties are the
“defendants.”
7/
Such an award does not, however, encompass the costs
necessary to establish the right to the award. Lee, 936 P.2d at
19
Count IV - Civil Conspiracy
Hawai'i does not recognize an independent cause of
action for “civil conspiracy”. Rather, a civil conspiracy action
is derivative of other wrongs. See, e.g., Chung v. McCabe
Hamilton & Renny Co., 128 P.3d 833, 843 (Haw. 2006); Weinberg v.
Mauch, 890 P.2d 277, 286 (Haw. 1995). The Hawai‘i Supreme Court
has defined civil conspiracy as the “combination of two or more
persons or entities by concerted action to accomplish a criminal
or unlawful purpose, or to accomplish some purpose not in itself
criminal or unlawful by criminal or unlawful means.” Robert's
Haw. Sch. Bus, Inc. v. Laupahoehoe Transp. Co., 982 P.2d 853, 881
n. 28 (Haw. 1999) (emphasis added), superseded by statute on
other grounds as stated in Haw. Med. Ass'n v. Haw. Med. Serv.
Ass'n, Inc., 148 P.3d 1179 (2006).
Here, DOE’s claim for civil conspiracy is derivative of
its claim for negligence. It is possible to show a conspiracy to
commit a negligent act; it takes the form of a conspiracy to do
something the conspirators “should have known” was unlawful. See,
e.g., United States v. Hansen-Sturm, 44 F.3d 793, 795 (9th Cir.
1995) (criminal defendants properly convicted of conspiracy to
perform a negligent act where “the conspirators agree to conduct
669–70. In other words, if DOE prevails in its third-party claim
against the Loveland Parties, it may recover attorneys’ fees and
costs that it spent on defending against F.K.’s claims, but it
may not recover attorneys’ fees and costs that it spent on
prosecuting its third-party claim.
20
which they should have known was in violation of” the law). Here,
DOE alleges, or at least implies, that the Loveland Parties
agreed to acts which they should have known were in violation of
Hawai’i state law. (DOE Compl. ¶ 49.)
DOE has not, however, pleaded a single fact to show the
formation of any agreement or conspiracy. “[A] plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to
relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will
not do.” Twombly, 550 U.S. at 555 (internal citations and
quotations omitted) DOE states only that the Loveland Parties
“conspired”. (DOE Compl. ¶ 49.) The Court is not bound to accept
DOE’s conclusory statement as true if DOE pleads no facts to
support them. See Twombly, 550 U.S. at 555. The Court therefore
DISMISSES this claim.
Count V: Attorneys’ Fees
Attorneys’ fees as sought here are “an element of
damages,” not a claim. See Lee, 936 P.2d at 669. As discussed
above, DOE has properly pleaded a claim for which attorneys’ fees
may be recovered, namely, its negligence claim.
Dr. Patricia J. Dukes
Finally, the Loveland Parties argue for the first time
in their Reply that all claims against Dr. Dukes should be
dismissed because DOE has not alleged sufficient facts involving
21
her. (Reply at 12.) The Court will not consider this argument
since DOE has had no opportunity to brief it. See L.R. 7.4 (“Any
argument raised for the first time in the reply shall be
disregarded.”); see, e.g., Menashe v. Bank of N.Y., 850 F. Supp.
2d 1120 (D. Haw. 2012) (declining to consider arguments raised
for the first time in a reply in support of a motion to dismiss).
CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART the
Third-Party Defendants’ Motion To Dismiss the Third-Party
Complaint. The Court DISMISSES without prejudice DOE’s claims for
(1) violation of Act 129 and the IDEA; (2) violation of FERPA and
Hawai’i Administrative Rules; and (3) civil conspiracy. The Court
DENIES the Motion To Dismiss as to DOE’s claim for negligence and
its request for attorneys’ fees and costs.
IT IS SO ORDERED.
DATED:
Honolulu, Hawaii, November 7, 2012.
________________________________
Alan C. Kay
Sr. United States District Judge
F.K. v. Department of Education, Civ. No. 12-00136 ACK-LRP, Order Granting in
Part Third-Party Defendants’ Motion To Dismiss Third-Party Complaint.
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