Pedreira, et al v. Sunrise Children's Services, et al

Filing 437

MEMORANDUM OPINION by Judge Charles R. Simpson, III on 7/5/12; Plaintiffs have modified the proposed amended complaint to allege that the hiring practicesand employment policy of KBHC are evidence of an Establishment Clause violation. Plaintiffs incl ude several other allegations with regard to their Establishment Clause claim about religious activity at KBHC. Plaintiffs do not rely solely on KBHCs employment policy to support their Establishment Clause claim. Therefore, we do not find that this objection by KBHC is a sufficientjustification to deny Plaintiffs motion for leave to file the proposed Second Amendment Complaint. An order consistent with this opinion will be entered this date.cc:counsel (DAK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE

ALICIA M. PEDREIRA et al.

PLAINTIFFS

v.

CIVIL ACTION NO. 3:00-cv-210-S

KENTUCKY BAPTIST HOMES FOR
CHILDREN, INC., et al.

DEFENDANTS

MEMORANDUM OPINION

This matter is before the court on motion of the plaintiffs, Alicia M. Pedreira, et al.,
(“Plaintiffs”), for leave to file the Second Amended Complaint (DN 418). The defendant, Sunrise
Children’s Services, Inc. f/k/a Kentucky Baptist Homes for Children, Inc. (“KBHC”), has responded
and raised several objections (DN 424). Reviewing the pleadings, we find that the motion for leave
to file the proposed Second Amended Complaint should be granted.
The allegations and background in this case are well-known to those involved and were set
out in detail in the most recent Sixth Circuit opinion in this case. Pedreira v. Kentucky Baptist
Homes For Children, Inc., 579 F.3d 722 (6th Cir. 2009). Therefore, a detailed recitation will not
be necessary here, and we will provide only a general outline of the history most relevant to this
opinion.
On March 31, 2008, this court entered an order granting a motion of the defendants, KBHC,
Janie Miller and J. Michael Brown (together, the “Commonwealth Defendants”), to dismiss the
Establishment Clause claim alleged by Plaintiffs for lack of taxpayer standing. See (DN 308). We

further denied Plaintiffs’ motion for leave to amend as futile, because we held that even with the
amendments, the claim failed as the taxpayer plaintiffs did not have standing. Id.
On August 31, 2009, the Sixth Circuit reversed the dismissal of Plaintiffs’ Establishment
Clause claim, holding that Plaintiffs have standing as state taxpayers. Pedreira, 579 F.3d at 733.
The Sixth Circuit also held that “to the extent that the second amended complaint and supporting
documents clarified the plaintiffs’ standing arguments,” it was error to deny “the plaintiffs’ motion
for leave to amend with respect to the amendments regarding standing only.” Id. On remand, the
parties agreed that Plaintiffs would file a new Second Amended Complaint to conform to the Sixth
Circuit’s decision and Plaintiffs shared with all the defendants the proposed Second Amended
Complaint. See (DN 418). The Commonwealth Defendants consented to the filling of the Second
Amended Complaint. However, KBHC refused to consent and filed a response to Plaintiffs’ motion
for leave to file the Second Amended Complaint. Id.
KBHC raises four objections to the latest version of the complaint tendered by Plaintiffs,
which include: (1) the proposed pleading identifies KBHC by the name “Kentucky Baptist Homes
for Children, Inc.,” rather than by the entity’s new legal name, “Sunrise Children’s Services, Inc.;”
(2) the proposed pleading is “demonstrably incorrect because it asserts, contrary to the record
developed in discovery, that KBHC uses public funds to ‘pay’ for employee salaries and religious
activities;” (3) the use of the term “discriminatory” in the proposed pleading because it confuses the
issues left in the case; and (4) the framing of the Plaintiffs’ Establishment Clause claim, arguing it
is not in conformity with the law of the case. See (DN 424). We will address each of these
objections in turn.

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Pursuant to Rule 15 of the Federal Rules of Civil Procedure, plaintiffs may amend their
pleadings with leave of the court after an initial amendment, and such leave “shall be freely given
when justice so requires.” Fed.R.Civ.P. 15(a)(2). “While this is a liberal standard, the district court
need not grant leave to amend if there is evidence of delay, prejudice, or futility.” Dean v. City of
Bay City, Mich., 239 Fed. Appx. 107, 111 (6th Cir. 2007).
First, We find that KBHC’s objection to the use of the acronym “KBHC” does not warrant
denial of the motion for leave to file the proposed pleading. The defendant argues that currently,
no entity named “Kentucky Baptist Homes for Children, Inc.” exists because in February of 2007,
the entity’s name was officially changed to “Sunrise Children’s Services, Inc.” Thus, the defendant
argues that the use of “KBHC” would cause “ambiguity or confusion.” (DN 424). However, this
case has been ongoing since 2000 and throughout all the relevant time periods for this case, the
entity was named “Kentucky Baptist Homes for Children, Inc.” Therefore, we find that Plaintiffs’
motion for leave to file the Second Amended Complaint should not be denied on this basis.
Second, KBHC argues that the “proposed Second Amended Complaint is demonstrably
incorrect because it asserts, contrary to the record developed in discovery, that KBHC uses public
funds to ‘pay’ for employee salaries and religious activities.” Id. Citing to Fed.R.Civ.P. Rule
11(b)(3), KBHC further states that “[w]hile it is common for a defendant to contest the truth of the
allegations within the complaint, here Plaintiffs have had the benefit of voluminous discovery, and
must be expected to frame their pleadings consistent with the record.” Id. Plaintiffs counter that
the allegations complained of by KBHC were drafted with input from the Commonwealth
Defendants’ counsel and argues that in fact they have ample evidence from discovery to support the
allegations. (DN 427). Reviewing the record, we conclude that because evidence exists which

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supports Plaintiffs’ claims, KBHC’s denial of the allegations is not an adequate basis on which to
deny Plaintiffs’ motion for leave to file the proposed Second Amended Complaint.
Third, KBHC also objects to the use of the term “discriminatory” by Plaintiffs throughout
the proposed Second Amended Complaint. KBHC notes that Plaintiffs allege that KBHC maintains
a “religiously-motivated employment policy and discriminatory stance concerning homosexuality.”
(DN 424) (citing the Proposed Second Amended Complaint, ¶¶ 37-40, 42-44). KBHC argues that
because this court and the Sixth Circuit have both held that Plaintiffs’ employment discrimination
claims are meritless, Plaintiffs’ description of KBHC’s employment policy as “discriminatory” in
the most recent proposed amended complaint confuses the issues. Id. Plaintiffs argue that
“discriminatory” has a lay meaning outside of its legal significance and that in a bench trial of their
Establishment Clause claim, the court will not be confused by its use. We agree with Plaintiffs. The
Sixth Circuit stated in its opinion in this case that “the fact that Pedreira has not presented an
employment discrimination claim based on her termination does not mean that KBHC’s hiring
practices are not relevant for the First Amendment inquiry.” Pedreira, 579 F.3d at 733-34.
Therefore, Plaintiffs are entitled to present evidence of KBHC’s hiring practices to support their
Establishment Clause claim. Although we found that these hiring practices did not support an
employment discrimination claim under Federal or State law, we do not find that Plaintiffs’ use of
the term “discriminatory” to describe KBHC’s hiring practices as support for their Establishment
Clause claim should warrant denial of Plaintiffs’ motion. We are confident the court will not
confuse the issues in a bench trial, especially considering the lengthy history of this case.
Last, KBHC objects to the most recent framing of Plaintiffs’ Establishment Clause claim in
the proposed Second Amended Complaint.

KBHC states that it “purports to resurrect an

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Establishment Clause claim on grounds that this Court and the Sixth Circuit have already
unanimously rejected,” arguing that the proposed Second Amended Complaint pursues a substantive
Establishment Clause claim based on KBHC’s employment policy. (DN 424). Plaintiffs argue that
the proposed Second Amended Complaint was “specifically modified” to state that KBHC’s
employment policy “constitutes evidence of an Establishment Clause violation, as opposed to a
violation itself, in accordance with the Sixth Circuit’s ruling on this issue.” (DN 427) (internal
citations omitted).
Reviewing the amended proposed pleading and the Sixth Circuit’s decision, we find that
Plaintiffs’ proposed Establishment Clause claim is framed in accordance with the Sixth Circuit’s
opinion. The Sixth Circuit held:
The termination of Pedreira based on her sexual orientation is not a violation
of the Establishment Clause, because, as noted above, she has not established
discrimination based on religion.
However, the fact that Pedreira has not presented an employment
discrimination claim based on her termination does not mean that KBHC’s hiring
practices are not relevant for the First Amendment inquiry. In fact, courts routinely
look to employment policies to shed light on the sectarian nature of an institution for
purposes of the Establishment Clause. See e.g., Roemer v. Bd. of Public Works of
Md., 426 U.S. 736, 757, 96 S.Ct. 2337, 49 L.Ed.2d 179 (1976); Comm. for Pub.
Educ. & Religious Liberty v. Nyquist, 413 U.S. 756, 767-68, 93 S.Ct. 2955, 37
L.Ed.2d 948 (1973); Hunt v. McNair, 413 U.S. 734, 743-44, 93 S.Ct. 2868, 37
L.Ed.2d 923 (1973); Johnson [v. Econ. Dev. Corp. of the Cnty. of Oakland, 241 F.3d
501, 504-05 (6th Cir. 2001)]; see also Columbia Union Coll. v. Clarke, 159 F.3d 151,
163 (4th Cir.. 1998) (adopting a four-factor test based on Supreme Court precedent
for the determination of whether a school is pervasively sectarian for First
Amendment purposes that includes “how much do the religious preferences shape
the ... hiring and student admission processes” as a factor). KBHC concedes that its
policy of firing and not hiring gays and lesbians is religiously inspired. Although a
religiously inspired employee conduct rule is not sufficient to constitute a
discrimination on the basis of religion, it is relevant to an inquiry under the
Establishment Clause. We thus reverse the district court’s dismissal of this portion
of the plaintiffs’ First Amendment claim to the extent that it prohibits plaintiffs from
presenting evidence of KBHC’s hiring practices.

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Pedreira, 579 F.3d at 733-34.
Plaintiffs have modified the proposed amended complaint to allege that the hiring practices
and employment policy of KBHC are “evidence of” an Establishment Clause violation. Plaintiffs
include several other allegations with regard to their Establishment Clause claim about religious
activity at KBHC. Plaintiffs do not rely solely on KBHC’s employment policy to support their
Establishment Clause claim. Therefore, we do not find that this objection by KBHC is a sufficient
justification to deny Plaintiffs’ motion for leave to file the proposed Second Amendment Complaint.
An order consistent with this opinion will be entered this date.

July 5, 2012

D02

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