Austell et al v. Sprenger et al

Filing 131

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that the defendants motion for summary judgment [Doc. #63] is granted. Signed by Honorable Carol E. Jackson on 7/19/11. (KXS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
T.Y.B.E. LEARNING CENTER, et al.,
Plaintiffs,
vs.
HON. JOSPEH BINDBEUTEL, et al.,
Defendants.

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Case No. 4:09-CV-1463 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on the motion of defendants Kathy Quick,
Kimberly Sprenger, and Shelley Truesdale for summary judgment. Plaintiffs Carmen
Austell and TYBE Learning Center have filed a cross-motion for summary judgment.1
The issues are fully briefed.
Plaintiff Austell is the owner and operator of plaintiff TYBE Learning Center
(TYBE), a child care center located in Florissant, Missouri. Child care facilities are
regulated by the Missouri Department of Health and Senior Services (DHSS) through
its Section for Child Care Regulation (SCCR). Defendant Quick is the Administrator of
SCCR, defendant Sprenger is the Legal Coordinator of SCCR, and defendant Truesdale
is a Child Care Facility Specialist.

In August 2009, defendants denied plaintiffs’

application to renew their child-care license. They also directed plaintiffs to cease
providing care to more than four unrelated children and informed third-party agencies
that TYBE was unlicensed. TYBE experienced an immediate decline in its enrollment.
Plaintiffs assert that they were entitled to administrative and judicial review of

1

Plaintiffs filed a motion for summary judgment with respect to all defendants.
On May 2, 2011, the Court granted the separate motion of defendants Joseph P.
Bindbeutel and Nimrod T. Chapel, Jr., for summary judgment and denied plaintiffs’
motion as it pertained to them.

the agency’s decision to deny renewal before defendants took these actions. In this
action filed on September 14, 2009, plaintiffs assert three claims for violation of their
procedural due process rights pursuant to 42 U.S.C. § 1983, a claim for tortious
interference with a business expectancy, and a claim for judicial review of a decision
by the Administrative Hearing Commission (AHC). On September 21, 2009, the Court
entered a temporary restraining order that barred defendants from claiming that TYBE
was operating without a license. On October 8, 2009, the parties agreed to the entry
of consent preliminary injunction that allowed plaintiffs to operate their facility pending
administrative review. That injunction was dissolved on May 13, 2011.
I.

Legal Standard

Rule 56(a) of the Federal Rules of Civil Procedure provides that summary
judgment shall be entered if the moving party shows “that there is no genuine dispute
as to any material fact and the movant is entitled to a judgment as a matter of law.”
In ruling on a motion for summary judgment the court is required to view the facts in
the light most favorable to the non-moving party and must give that party the benefit
of all reasonable inferences to be drawn from the underlying facts. AgriStor Leasing
v. Farrow, 826 F.2d 732, 734 (8th Cir. 1987). The moving party bears the burden of
showing both the absence of a genuine issue of material fact and its entitlement to
judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986);
Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
Once the moving party has met its burden, the non-moving party may not rest on the
allegations of his pleadings but must set forth specific facts, by affidavit or other
evidence, showing that a genuine issue of material fact exists. United of Omaha Life
Ins. Co. v. Honea, 458 F.3d 788, 791 (8th Cir. 2006) (quoting Fed. R. Civ. P. 56(e)).

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Rule 56 “mandates the entry of summary judgment, after adequate time for discovery
and upon motion, against a party who fails to make a showing sufficient to establish
the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Celotex Corporation v. Catrett, 477 U.S. 317, 322
(1986).
II.

Background

The Department of Health and Senior Services issued a child care license to
TYBE on August 18, 2003. TYBE Learning Center v. Department of Health & Senior
Servs., Nos. 09-1224DH & 09-1223SP, decision at 3 (Admin. Hearing Comm’n Sept.
10, 2009) (“AHC Dismissal”) [Doc. #64-3]. The license authorized TYBE to provide
care for up to 90 children between the ages of 24 months and 13 years old, 24 hours
a day, seven days a week. TYBE received renewals of the license in 2005 and 2007.
TYBE’s license was scheduled to expire on July 31, 2009. DHSS received TYBE’s
renewal application on June 18, 2009.2 On August 24, 2009, DHSS issued a Notice of
Denial of Renewal, drafted by defendant Sprenger and signed by defendant Quick.
[Doc. #64-1]. The notice listed eight reasons for the denial, including plaintiffs’ failure
to maintain adequate staffing levels and use of unapproved caregivers. The notice also
stated:
The denial of Tybe’s license is effective thirty-one (31) days from the date of
this letter unless the decision is appealed.
APPEAL PROCEDURE

2

DHSS regulations require a renewal application to be submitted “at least sixty
(60) days prior to expiration of the license. 19 C.S.R. 30-62.052(1). There are
suggestions in the record that plaintiffs timely mailed their application, but that it was
not received. AHC Transcript [Doc. #82] at 103-04, 227. Neither party has argued
that the late receipt by DHSS has any legal significance to the issues at hand.
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You may appeal the decision to deny the renewal of your license by
requesting a hearing before the Administrative Hearing Commission
(Commission). To receive a hearing, the SCCR must receive a written
request within thirty (30) days of the date of this letter. Please direct
the request to the attention of Kimberly Sprenger . . .
If you appeal, DHSS/SCCR has ninety (90) days to file a complaint with the
Commission. After receiving the complaint, the Commission sets a date for the
hearing and notifies you and DHSS/SCCR of the date. Tybe’s child care license
is expired. Tybe is not licensed to provide child care at this time.
***
If you do not appeal, this denial of renewal will be effective 31 days from the
date of this letter. However, you are not currently licensed to provide child
care. Please note that Section 210.211.1 RSMo (2000), does not allow a facility
to provide care for more than four (4) unrelated children without a license
issued by DHSS/SCCR. Any care provided for more than four (4) unrelated
children is in conflict with this section and subject to penalties set forth in
Section 210.245, RSMo (2000). Please be reminded that Section 210.903 RSMo
authorizes denials, revocations and suspensions of child care licenses to be
reported to anyone who makes an inquiry to the Family Care Safety Registry for
employment purposes. The placement of your name in this registry may affect
your ability to obtain employment.
Id. at 12-13 (bold and italics in original; underlining added).
DHSS sent notice of the nonrenewal to the Department of Social Services which
terminated its contract to reimburse TYBE for child care services to eligible children.
The notice was also sent to the Missouri Child Care Resource and Referral Network, a
registry of child care facilities. Defendant Quick testified at deposition that DHSS has
since modified its procedures to withhold notice to third parties until after the
expiration of the time for seeking administrative review or the conclusion of that review
if sought. [Doc. #72 at 28].
TYBE filed a complaint with the AHC, which Commissioner Joseph Bindbeutel
dismissed for lack of jurisdiction. TYBE also filed a written request for hearing with
DHSS, which filed a complaint with the AHC.

On January 28, 2011, the AHC

determined that TYBE was not entitled to a renewal of its child-care facility license.
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Department of Health & Senior Servs. v. TYBE Learning Center, No. 09-1569DH (“AHC
Denial”) [Doc. #64-4]. Plaintiffs’ petitions for judicial review of the Commission’s
decision are pending in the Circuit Court of St. Louis County. TYBE Learning Center v.
Missouri Dep’t of Health & Senior Services, No. 11SL-CC00943; TYBE Learning Center
v. Missouri Dep’t of Health & Senior Services, No. 11SL-AC07332.
III.

Discussion
A.

Preliminary Matters

The material facts are not in dispute.

The legal issue before the Court is

whether the defendants violated plaintiffs’ protected property interest in their child care
facility license when they notified third parties of the nonrenewal before the completion
of the administrative review process.

Plaintiffs also challenge as improper the

defendants’ directive that plaintiffs cease providing services to more than four
unrelated children or face referral for possible prosecution. Plaintiffs did not comply
with the directive and their noncompliance did not result in a referral for prosecution.
The directive did not cause plaintiffs to suffer any deprivation and, therefore, plaintiffs
cannot rely on it as a basis for a procedural due process claim.
Plaintiffs argue in their motion for summary judgment that they have a
protected liberty interest in a “due process name clearing hearing.” They also assert
an equal protection claim arising from defendant Quick’s refusal to enter into a
settlement agreement with them similar to those offered to two other child care
centers. These claims were not asserted in plaintiffs’ amended complaint and the
Court will not consider them here. Plaintiffs include assertions regarding the race of the
parties in their statement of uncontroverted material facts. The amended complaint
does not include allegations that defendants’ actions were motivated by race, and any

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attempt to assert such a claim now is improper. Also, the Court will not consider any
claim related to the AHC decision upholding the denial of plaintiffs’ application to renew
their license, as that decision is presently under review by the Circuit Court of St. Louis
County.
Defendants assert that plaintiffs’ due process claims in Counts I and III fail
because plaintiffs neglected to assert that their rights arise under the Fourteenth
Amendment. They argue that plaintiffs are relying solely on § 1983, which does not
provide an independent cause of action. While Counts I and III are improperly drafted
in this regard, the error does not create any ambiguity with respect to plaintiffs’ claims,
and the time to have challenge the sufficiency of pleadings passed long ago.
Defendants’ suggestion that plaintiffs’ § 1983 claims are no more than torts in
constitutional disguise is similarly unworthy of consideration.
B.

Abstention Doctrines

Defendants contend that the Court should abstain from adjudicating plaintiffs’
claims pursuant to the Rooker-Feldman doctrine, the Pullman doctrine, and the
Younger doctrine.
1.

Rooker-Feldman Abstention

The Rooker-Feldman doctrine stands for the general principle that, with the
exception of habeas corpus petitions, lower federal courts lack subject matter
jurisdiction to review state court judicial decisions.

Prince v. Arkansas Bd. of

Examiners in Psychology, 380 F.3d 337, 340 (8th Cir. 2004) (citing D.C. Court of
Appeals v. Feldman, 460 U.S. 462, 482-83 (1983) and Rooker v. Fidelity Trust Co., 263
U.S. 413, 415-16 (1923)). However, the Rooker-Feldman doctrine is concerned only
with state court determinations and presents no jurisdictional obstacle to judicial

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review of executive actions, including decisions made by state administrative agencies.
Gilbert v. Illinois State Bd. of Educ., 591 F.3d 896, 900 (7th Cir. 2010) (citing Verizon
Maryland, Inc. v. Public Service Comm’n of Maryland, 535 U.S. 635, 644 n.3 (2002)).
Many litigants who lose in state administrative proceedings seek relief in federal district
court under civil rights legislation such as 42 U.S.C. § 1983, and they generally do not
have to exhaust administrative remedies before pursuing such claims. Lemonds v. St.
Louis County, 222 F.3d 488, 492 (8th Cir. 2000) (citing Van Harken v. Chicago, 103
F.3d 1346, 1349 (7th Cir. 1997) and Porter v. Nussle, 534 U.S. 516, 523 (2002))
(internal quotations omitted). Plaintiffs’ claims against defendants do not involve state
court judicial decisions and thus the Rooker-Feldman doctrine does not apply in this
instance.
2.

Pullman Abstention

Defendants also assert that the Court should abstain pursuant to Railroad
Comm’n v. Pullman Co., 312 U.S. 496 (1941).

The Pullman abstention doctrine

requires consideration of (1) the effect abstention would have on the rights to be
protected by considering the nature of both the right and necessary remedy; (2)
available state remedies; (3) whether the challenged state law is unclear; (4) whether
the challenged state law is fairly susceptible to an interpretation that would avoid any
federal constitutional question; and (5) whether abstention will avoid unnecessary
federal interference in state operations. Beavers v. Arkansas State Bd. of Dental
Examiners, 151 F.3d 838, 840-41 (8th Cir. 1998).
Where resolution of the federal constitutional question is dependent upon, or
may be materially altered by, the determination of an uncertain issue of state
law, abstention may be proper in order to avoid unnecessary friction in federalstate relations, interference with important state functions, tentative decisions
on questions of state law, and premature constitutional adjudication. . . . The

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doctrine . . . contemplates that deference to state court adjudication only be
made where the issue of state law is uncertain.
Lake Carriers’ Ass’n v. MacMullan, 406 U.S. 498, 511 (1972) (quoting Harman v.
Forssenius, 380 U.S. 528, 534 (1965)) (alterations in original).
Defendants fail to identify any question of state law that is unclear or susceptible
to an interpretation that would avoid a constitutional question. A review of the second
amended complaint similarly does not disclose an allegation of an unconstitutional or
unclear statute. Rather, plaintiffs assert that defendants did not comply with the
requirements of the law and thereby denied plaintiffs of their due process rights. The
Court concludes that Pullman abstention is not appropriate in this case.
3.

Younger Abstention

The Younger abstention doctrine,3 as it has evolved, provides that federal courts
should abstain from exercising jurisdiction when (1) there is an ongoing state
proceeding, (2) which implicates important state interests, and (3) there is an
adequate opportunity to raise any relevant federal questions in the state proceeding.
Middlesex County Ethics Comm. v. Garden State Bar Ass’n, 457 U.S. 423, 432 (1982).
Even if these three requirements are met, a federal court should not abstain if there
is a showing of “bad faith, harassment, or some other extraordinary circumstance that
would make abstention inappropriate.” Plouffe v. Ligon, 606 F.3d 890, 893 (8th Cir.
2010) (quoting Middlesex County Ethics Comm. v. Garden State Bar Ass’n, 457 U.S.
423, 435 (1982)). There are ongoing state proceedings; however, they are directed
to the AHC’s final decision regarding the denial of TYBE’s renewal application and thus
will not reach the constitutional question plaintiffs assert in this case.

3

See Younger v. Harris, 401 U.S. 37 (1971).
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C.

Due Process Claims Based on § 621.045 and § 621.120

In Count II, plaintiffs assert that defendant Quick violated their due process
rights by failing to offer an “initial settlement offer” and a 60-day “negotiation period”
under § 621.045.4, Mo. Rev. Stat.4 In Count III, plaintiffs assert that defendant Quick
violated their rights to independently seek a declaration of qualification to obtain
renewal of their child care license. In Count V, plaintiffs seek judicial review of the AHC
dismissal of their § 621.120 complaint.

The Court previously granted summary

judgment in favor of defendant Bindbeutel on Count V.
The procedures governing administrative review of a decision by DHSS to deny
a child care facility license are found in § 210.245, which states:
If the department of health and senior services proposes to deny, suspend,
place on probation or revoke a license, the department of health and senior
services shall serve upon the . . . licensee written notice of the proposed action
to be taken. The notice shall contain . . . a statement that the . . . licensee shall
have thirty days to request in writing a hearing before the administrative
hearing commission and that such request shall be made to the department of
health and senior services. If no written request for a hearing is received by the
department of health and senior services within thirty days . . ., the proposed

4

The statute provides in relevant part:

[I]n order to encourage settlement of disputes between any agency
described in subsection 1 or 2 of this section and its licensees, any such
agency shall:
(1) Provide the licensee with a written description of the specific conduct
for which discipline is sought and a citation to the law and rules allegedly
violated, together with copies of any documents which are the basis
thereof and the agency’s initial settlement offer, or file a contested case
against the licensee;
(2) If no contested case has been filed against the licensee, allow the
licensee at least sixty days, from the date of mailing, to consider the
agency’s initial settlement offer and to contact the agency to discuss the
terms of such settlement offer.
§ 621.045.4.
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discipline shall take effect on the thirty-first day . . . If the . . . licensee makes
a written request for a hearing, the department of health and senior services
shall file a complaint with the administrative hearing commission within ninety
days of receipt of the request for a hearing.
Plaintiffs submitted a written request for hearing as required by this section.
They also filed a complaint directly with the AHC, relying on § 621.120. DHSS filed a
motion to dismiss plaintiffs’ complaint for lack of jurisdiction, arguing that § 621.120
is a general statute governing procedures before the AHC, while § 210.245 specifically
governs procedures for the licensing of child care facilities. Commissioner Bindbeutel
agreed with DHSS and dismissed plaintiffs’ complaint. Plaintiffs eventually received a
hearing on the complaint that DHSS filed pursuant to § 210.245.
Plaintiffs claim that the dismissal of their § 621.120 complaint violated their due
process rights. The Court disagrees. The AHC received plaintiffs’ complaint, set the
matter for a hearing, accepted legal briefs on the jurisdictional issues, and issued a
decision. Furthermore, the AHC ultimately addressed the merits of plaintiffs’ claims in
the § 210.245 proceedings. As a result of the consent injunction entered by this
Court, plaintiffs were able to operate through the duration of those proceedings. The
standard of review applied by the AHC does not vary depending on which of the two
statutes governs. Plaintiffs thus received all the process they were due from the AHC,
regardless of which statute applied. Defendants were entitled to argue a plausible (and
ultimately prevailing) jurisdictional point without violating the Constitution.
Plaintiffs also assert that defendants were obligated to provide an initial
settlement offer and negotiation period as contemplated by § 621.045.4. Plaintiffs
have not established that § 621.045 applies to child care facilities. Moreover, there is
no indication that application of this statute would have prevented the harm plaintiffs
allege they suffered, i.e., the notification to third parties that plaintiffs’ license had
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expired. Plaintiffs are not entitled to relief based on § 621.045 and § 621.120 and
summary judgment will be granted to defendants on Counts II, III, and V.
D.

Count I: Procedural Due Process and Qualified Immunity

In Count I, plaintiffs claim that defendants violated their rights to procedural due
process by depriving them of their license before judicial and administrative review
proceedings were complete. The facts relevant to this claim are as follows:
Plaintiffs’ two-year license was scheduled to expire on July 31, 2009. They
timely filed an application for renewal. On June 18, 2009, defendant Truesdale
completed an announced renewal inspection. AHC Transcript at 103 [Doc. #82]. She
found a number of regulatory violations, including incomplete files for children and
staff. Id. at 104; see also 19 C.S.R. 30-62.222 (specifying requirements for contents
of files). The files were still incomplete when defendant Truesdale returned on July 24,
2009, and again on July 31, 2009. AHC Transcript at 112-14; see also AHC Denial at
22 (listing five records violations present on July 31, 2009). Defendant Truesdale
testified that the outstanding violations prevented her from issuing a renewal of the
license, id. at 167, and that this was the standard agency practice. Id. at 172 (“100
percent” of facilities out of compliance on last day of licenses are not renewed or are
deemed expired). On August 24, 2009, defendants issued the denial notice quoted
above.5
Procedural due process claims require a two-step analysis. First, a plaintiff must
prove that as a result of state action the plaintiff was deprived of some life, liberty, or

5

In her testimony before the AHC, defendant Truesdale testified that she sent
plaintiffs a “five-day letter” on August 6, 2009. [Doc. #82 at 91]. According to her
testimony, the letter stated that TYBE’s license expired on July 31, 2009, and that
plaintiffs were operating in violation of the law. Id. at 93. The letter itself is not in
evidence.
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property interest. Second, the plaintiff must prove that the state’s deprivation of that
interest was done without due process. Krentz v. Robertson Fire Prot. Dist., 228 F.3d
897, 902 (8th Cir. 2000).
Plaintiffs assert that they have a property interest in their license to operate a
child-care facility. They further assert that the defendants deprived them of that
interest when they informed third parties that their license was expired. Plaintiffs do
not dispute that their license expired on July 31, 2009. The defendants state, without
contradiction, that licenses may not be renewed while license holders are in violation
of regulatory requirements. Examined closely, plaintiffs’ due process claim amounts
to an assertion that they were entitled to operate under an expired license while they
sought administrative review of the decision to deny their renewal application.
Anything less, they suggest, renders the right of review meaningless because even a
temporary closure would cause irreparable losses.
Child care facility licenses expire after two years by operation of law.

§

210.210.1(1) (“No license shall be granted for a term exceeding two years); 19 C.S.R.
30-62.052(4) (license shall be granted for “up to two years”). Plaintiffs have not cited
a statute or regulation that allows DHSS to permit a child care facility to continue
operations under an expired license during administrative review. The Court concludes
that plaintiffs have not established that they had a protected interest in operating
under the terms of an expired license while awaiting administrative review. Thus,
plaintiffs cannot establish that defendants violated that right and denied them due
process.
Even if the plaintiffs could establish that they had the right to continue to
operate under the expired license, defendants are entitled to qualified immunity.

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Qualified immunity protects “government officials performing discretionary functions.”
Rush v. Perryman, 579 F.3d 908, 913 (8th Cir. 2009) (internal quotations and citations
omitted). “Government officials are generally shielded from liability for civil damages
insofar as their conduct does not violate clearly established statutory or constitutional
rights of which a reasonable person would have known.” Id. (internal quotations and
citations omitted). “A right is clearly established, for qualified immunity purposes, if
the contours of the right [are] sufficiently clear that a reasonable official would
understand that what he is doing violates that right.’” Id. (alteration in original).
Plaintiffs cannot establish that the right they claim was clearly established such
that the named defendants should have known that their conduct was unlawful in the
situation they faced. Bonner v. Outlaw, 552 F.3d 673, 676 (8th Cir. 2009) (setting out
two-step analysis of qualified immunity).

Defendants are entitled to summary

judgment on plaintiffs’ due process claim.
E.

Count IV: Tortious Interference

Defendants Quick and Sprenger sent notice of plaintiffs’ unlicensed status to
DSS and the Missouri Child Care Resource and Referral Network.6

Plaintiffs have

presented evidence that they experienced a decline in enrollment as a result.
The elements of a claim of intentional interference with a business expectancy
are: (1) a contract or a valid business relationship or expectancy; (2) the defendant’s
knowledge of the contract or relationship; (3) intentional interference by the defendant
inducing or causing a breach of the contract or relationship; (4) the absence of

6

As discussed above, there is no evidence that defendant Truesdale participated
in the decision to notify third parties of the nonrenewal and thus she is entitled to
summary judgment on the tortious interference claim.
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justification; and (5) damages, resulting from the defendant’s conduct. Londoff v.
Walnut Street Securities, Inc., 209 S.W.3d 3, 7 (Mo. Ct. App. 2006).
Here, plaintiffs cannot establish absence of justification, as their license expired
on July 31, 2009, and they were indeed unlicensed at the time notification was given
to third parties. The defendants are entitled to summary judgment on Count IV.
*****
For the reasons set forth above,
IT IS HEREBY ORDERED that the defendants’ motion for summary judgment
[Doc. #63] is granted.

___________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 19th day of July, 2011.

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