Opinion
04 Civ. 0004 (DLC)
May 19, 2004
Marilyn Arons, Teaneck, New Jersey, For the Plaintiff
William Jaffe New York, For the State Defendants
Peter I. Livingston, Rosen Livingston Madison Avenue, Suite New York, For Defendants Sinergia, Inc. and Donald Lash
RosaLee Charpentier, Clinton Avenue New York, For the Defendants Family Advocates, Inc. and RosaLee Charpentier
OPINION AND ORDER
Plaintiff pro se Marilyn Arons ("Arons") filed this action on January 5, 2004, against the State of New York, Office of Mental Retardation and Developmental Disabilities ("OMRDD") and the Commission on Quality of Care ("CQC") (collectively, "the State"), the Metropolitan Parent Center of Sinergia, Inc. and its Executive Director, Donald Lash (collectively, "Sinergia"), and Family Advocates, Inc. and its Executive Director, RosaLee Charpentier ("Charpentier") (collectively, "Family Advocates"). In her complaint, Arons alleges violations of 42 U.S.C. § 1983 ("Section 1983"), the Developmental Disabilities Assistance and Bill of Rights Act, 42 U.S.C. § 6042 ("Section 6042"), the Individuals with Disabilities Education Act, 20 U.S.C. § 1400et seq. ("IDEA"), and various state laws.
OMRDD is charged with developing an "effective, integrated, comprehensive system for the delivery of all services to persons with mental retardation and developmental disabilities" and with creating "financing procedures and mechanisms to support such a system of services to ensure that individuals with mental retardation and developmental disabilities in need of service receive appropriate services close to their families and community." Mental Hygiene Law § 13.01 (McKinney's 2004).
CQC is charged with assisting "the governor in developing policies, plans and programs for improving the administration of mental hygiene facilities, and for ensuring "that the quality of care provided to the mentally disabled in the state is of a uniformly high standard" by, inter alia, investigating complaints and monitoring conditions at mental hygiene facilities. Mental Hygiene Law § 45.07 (McKinney's 2004).
According to its website, Sinergia is a private non-profit corporation that "provide[s] case management/service coordination and multiple direct services — residential and support — to individuals with disabilities and families including individuals with developmental disabilities. In addition, the agency provides or arranges for housing for such individuals and families." http://www.sinergiany.org.
Family Advocates is a non-profit law firm providing free and/or low-cost legal advocacy and representation to parents of children with disabilities.
42 U.S.C. § 6042 was repealed on October 30, 2000. Arons presumably intends to sue under 42 U.S.C. § 15041-15045 ("The purpose of this part is to provide for allotments to support a protection and advocacy system . . . in each State to protect the legal and human rights of individuals with developmental disabilities").
The State, Sinergia and Family Advocates now separately move to dismiss the complaint. For the reasons stated below, the motions are granted.
Background
Unless otherwise indicated, the facts describing the background to this litigation are taken from the complaint and plaintiff's submissions in opposition to this motion. Arons, the mother of two handicapped children and a New Jersey resident, has been described in connection with other litigation she has filed as "a professional educator . . . [who] specializes in curriculum development for exceptional children," and as "a lay advocate [who] acts on behalf of parents of handicapped children at administrative hearings" conducted pursuant to the IDEA. Arons v. New Jersey State Board of Education, 842 F.2d 58, 60 (3d Cir. 1988). Under the IDEA'S fee-shifting provisions, parents who prevail in a IDEA suit can apply to the federal district court for an award of attorneys' fees for the "costs" of the litigation. 20 U.S.C. § 1415 (i)(1)(3) (b). There is precedent for the proposition that those costs may include fees for experts such as Arons. See, e.g., Murphy v. Arlington Central School Dist. Bd. of Educ., No. 99 Civ. 9294 (CHS), 2003 WL 21694398, at *8-9 (S.D.N.Y. July 22, 2003). Accordingly, although Arons is precluded from charging fees in connection with her representation of parents at hearings, she contends that she is entitled to bill for her services as a consultant and expert. See also In Re Arons, 756 A.2d 867, 868 (Del. 2000) (Delaware's prohibition on lay advocate representation at due process hearings not preempted by the IDEA).
Sinergia Dispute
In January 2000, Elizabeth Batchelder ("Batchelder"), the parent of a disabled child, contracted with Arons on a contingency basis to assist in an IDEA lawsuit against the City of New York. Pursuant to a contract drafted by Arons, Batchelder agreed "to seek the fees of Mrs. Arons through an application to the federal courts" in the event Batchelder prevailed at the administrative hearing. Batchelder prevailed, but did not institute an action in federal court. Arons requested that Batchelder consult with an attorney regarding the procedure for instituting an action for her fees. In an email dated February 13, 2002, Batchelder informed Arons that she had been advised by an attorney that she did not "have the right to recover [Arons's] fees in Federal Court" because Arons had not worked under the supervision of counsel. The attorney had informed Batchelder that "the procedure to recover non-attorney fees is through the school district" via the administrative hearing. Batchelder told Arons that she had reasonably relied on Arons's "knowledge of the system" and that Arons had never informed Batchelder to seek her fees at the hearing. Batchelder disputed Arons's accusation that she had "refused to recover" Arons's fees.
On March 4, 2002, Arons filed a complaint in the Civil Court of the City of New York against Batchelder, alleging breach of contract. Arons sought monetary damages and an order compelling Batchelder to institute the federal action so that Arons could be paid for her services. Batchelder filed an answer to Arons's complaint pro se, and thereafter retained Sinergia to defend the case. Sinergia filed a cross-motion to dismiss, which was denied. Thereafter, on October 21, 2003, Arons and Batchelder entered into a court-ordered stipulation whereby Arons agreed to accept $1,000 in exchange for her services on behalf of Batchelder.
Family Advocates Dispute
Arons's claims against Family Advocates also stem from the law firm's alleged interference with a contractual relationship between Arons and a former client. Thomas and Barbara Mackey (the "Mackeys"), parents of a disabled son, entered into an oral agreement with Arons to assist them with their IDEA lawsuit against the Arlington Central School District ("Arlington"). The Mackeys agreed to pursue Arons's fees in federal court if their suit was successful. After the Mackeys lost at the initial administrative level, Arons and the Mackeys severed their relationship. In October 2000, the Mackeys retained Family Advocates to prepare and submit a petition challenging the unfavorable administrative decision. The appeal was successful and the Mackeys were granted their requested relief.
Arlington filed a complaint in the Southern District of New York seeking review of the final administrative decision, which request was denied. Arlington has filed a notice of appeal to the Second Circuit.
Family Advocates asked the Mackeys to submit itemized bills for the various individuals who had testified at the hearings on their behalf. In a letter dated July 19, 2002, the Mackeys asked Arons to forward them an itemized bill for her services, and informed her that Charpentier, the Executive Director at Family Advocates, "will be submitting all bills from the people who have assisted us . . . when we are finished at the Federal level, provided we prevail." On October 18, Arons submitted her bill to the Mackeys in the amount of $20,050. Having not heard from the Mackeys by early December, Arons served them with notice of her intent to sue for breach of contract.
On February 11, 2003, Arons received a letter from Charpentier stating that she would not represent Arons "in any aspect of an action for fees in this matter. . . . You are free to retain your own counsel." On February 28, Arons filed a state court action against Charpentier and the Mackeys for breach of contract and for an injunction compelling them to seek Arons's consultation fees in federal court. According to Arons, Charpentier was named in that action "because of her interference with the oral contract," among other reasons. In the fall of 2003, the Mackeys filed for bankruptcy. Arons's bill is listed as a debt and a loan in the Mackey bankruptcy action. Family Advocates do not represent the Mackeys in that proceeding.
Pursuant to the Bankruptcy Code, 11 U.S.C. § 101 et seq., Arons's state court action against the Mackeys has been stayed pending the resolution of the bankruptcy.
Arons alleges that the State, Sinergia, and Family Advocates have "engaged in harassment and systemic action to conspire against plaintiff, a nonlawyer [sic], because she is permitted to charge parents for her services relating to representation in special education due process hearings." According to Arons, Sinergia and Family Advocates misused federal funds doled out by the State in order to conduct frivolous and malicious litigation against Arons in order to deprive her of her legal right to collect "consultation fees" pursuant to the IDEA. Arons also charges the State with violating the IDEA'S "Protection and Advocacy mandate" for the developmentally disabled by, inter alia, failing to provide free or low cost legal services to parents of disabled children, failing to develop "state-of-the-art, cutting edge policies" in special education, and for being complicit in Family Advocates and Sinergia's use of public funds to file "malicious and libelous action[s] and frivolous litigation" against Arons.
Arons seeks (1) sanctions against Sinergia and Family Advocates for the "inappropriate use of federal funds and unethical behavior"; (2) an order compelling Sinergia and Family Advocates to pay Arons the balance of the bill allegedly owed by Batchelder and the Mackeys, respectively; (3) a series of orders against the State, with the intent of "restructuring New York's protection and advocacy system," and compelling the "recognition of and payment for those with special knowledge in special education who assist or present parents in special education hearings"; and (4) unspecified punitive damages.
Discussion
A. The State Defendants
On January 20, 2004, Arons served a copy of the complaint on the Albany office of the State Attorney General. Arons did not separately serve the OMRDD and CQC. The State contends that Arons's failure to serve the State properly deprives this Court of personal jurisdiction over it in this action.
Arons's affidavit of service shows that she effected personal service on the "Justice Building, Albany, New York; 15 West 65 Street, 6th Floor, NYC; 831 W. Saugherties Rd., Saugherties, N.Y." While the Attorney General's Office maintains an office in the Justice Building, the OMRDD and CQC do not; the OMRDD and the CQC do not have offices at the other locations listed on Arons's affidavit of service. The New York Lawyer's Diary and the New York State website list the OMRDD's main office at 44 Holland Avenue in Albany, and its regional office at 75 Morton Street in Manhattan. The CQC is located at 401 State Street in Schenectady, and maintains no regional offices.
Pursuant to Rule 4(j)(2), Fed.R.Civ.P., service upon a State or other governmental organization "shall be effected by delivering a copy of the summons and of the complaint to its chief executive officer or by serving the summons and complaint in the manner prescribed by the law of that state." New York law provides generally that personal service on the State "shall be made by delivering the summons to an assistant attorney-general at an office of the attorney-general or to the attorney-general within the state." CPLR § 307(1) (McKinney 2004). This general rule is qualified by CPLR § 307(2), which, among other things, governs civil actions in which a state agency has been sued. See CPLR § 307(2) (McKinney 2004) ("Section 307(2)"). Under New York law, personal service on a state agency shall be made by:
(1) delivering the summons to . . . the chief executive officer of such agency or to a person designated by such chief executive officer to receive service, or (2) by mailing the summons by certified mail, return receipt requested, to . . . the chief executive officer of such agency, and by personal service upon the state in the manner provided by [CPLR § 307(1)]., For purposes of this subdivision the term state agency shall be deemed to refer to any agency, board, bureau, commission, division, tribunal or other entity which constitutes the state for purposes of service under subdivision one of this section.Id. Thus, service on the Attorney General is insufficient to confer personal jurisdiction over the State in a case against one of its agencies or subdivisions. See Shuster v. Nassau County, No. 96 Civ. 3635 (JGK), 1999 WL 9847, at *3 (S.D.N.Y. Jan. 11, 1999) (delivering the summons and complaint to a regional office of the State Attorney General does not by itself constitute effective service on a state agency); Yoon Kim v. New York State Health Dept., 691 N.Y.S.2d 499, 500 (1st Dep't 1999) (default judgment properly denied as against defendants because plaintiff failed to effect service properly in accordance with CPLR § 307).
If service on a state agency is made by certified mail, the front of the envelope must bear the legend "URGENT LEGAL MAIL" in capital letters. The statute unambiguously makes the inscription on the envelope a jurisdictional requirement: service "shall not be effective" in its absence. Service by the certified mail method is not complete until two steps are satisfied: the mailed process must be received at a principal office of the agency (the place at which the chief executive officer's office is generally located), and the service on the State in accordance with CPLR § 307(1) must be completed. McKinney's Practice Rules 2001.
In Arons's opposition to the State's motion, she does not dispute that OMRDD and CQC are State agencies subject to Section 307(2). Arons also does not dispute that she failed to comply with the service provisions in Section 307(2). For example, she does not contend that she made personal delivery to the chief executive officers of the OMRDD and CQC, or that she sent them a copy of the summons and complaint by certified mail. Arons claims instead that she properly effected service because the OMRDD and CQC are "state agencies" that "constitute the State of New York." Arons was required to sue OMRDD and CQC in the manner described in Section 307(2). Because Arons failed to obtain personal jurisdiction over these agencies, her claims against the State are dismissed. It is therefore unnecessary to analyze Arons's claims against the State for violating Section 1983, Section 6042, and the IDEA.
B. Claims Against Sinergia and Family Advocates
I. Violation of the IDEA
Construing Arons's complaint liberally, she appears to allege claims against Sinergia and Family Advocates for violating the IDEA. Arons claims that Sinergia and Family Advocates tortiously interfered with her right to compensation under the IDEA, and thus deprived her of a federal right.
The defendants move to dismiss the IDEA claims against them pursuant to Rule 12(b)(6), Fed.R.Civ.P. When considering a motion to dismiss, a court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Securities Investor Protection Corp. v. BDO Seidman, LLP, 222 F.3d 63, 68 (2d Cir. 2000); Jaghory v. New York State Department of Education, 131 F.3d 326, 329 (2d Cir. 1997). "Dismissal is inappropriate unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief." Raila v. United States, 355 F.3d 118, 119 (2d Cir. 2004); Securities Investor Protection Corp., LLP, 222 F.3d at 68. Where, as here, a plaintiff is proceedingpro se, the court has an obligation to "construe [the] pleadings broadly, and interpret them to raise the strongest arguments they suggest." Cruz v. Gomez, 202 F.3d 593, 597 (2d Cir. 2000) (citation omitted); see also Cucco. v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000).
Arons's claims are governed by the pleading standard set forth in Rule 8(a), Fed.R.Civ.P. Under Rule 8(a) a complaint adequately states a claim when it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002) (citing Rule 8(a)(2), Fed.R.Civ.P). Thus, under Rule 8(a)'s liberal pleading standard, a complaint is sufficient if it gives "fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id. (citation omitted).See also Phelps v. Kapnolas, 308 F.3d 180, 186 (2d Cir. 2002).
"The IDEA was enacted to assist states in providing special education and related services to children with disabilities." Taylor v. Vermont Dept. of Educ., 313 F.3d 768, 776 (2d Cir. 2002) (citing 20 U.S.C. § 1411 (a)(1)). Under the IDEA, a participating "state educational agency, state agency, or local educational agency" is entitled to receive federal funding if it has in effect policies and procedures designed to "ensure that children with disabilities and their parents are guaranteed procedural safeguards with respect to the provision of free appropriate public education." 20 U.S.C. § 1415(a). Those procedures include "an opportunity to present complaints with respect to any matter relating to the identification, evaluation, or educational placement of the child, or the provision of a free appropriate public education to such child." Id. at § 1415(b)(6). When such a complaint is made, the parents "shall have an opportunity for an impartial due process hearing." Id. at § 1415(f)(1). At any such hearing, the parents must be accorded certain rights, including "the right to be accompanied and advised by counsel and by individuals with special knowledge or training with respect to the problems of children with disabilities." Id. at § 1415(h)(1). The parents of a disabled child "who is a prevailing party" may be awarded attorneys' fees "as part of the costs to the parents."Id. § 1415(i)(1)(3)(b).
Arons cannot state an IDEA claim against Sinergia and Family Advocates. The IDEA imposes duties and obligations only on participating states and their subdivisions. It does not create a cause of action against private citizens or non-profit corporations engaged in representing the disabled. Moreover, Arons lacks standing to sue under the IDEA, as the statute appears to provide only the parents of a disabled child with a private cause of action. See Taylor, 313 F.3d at 776 (whether a plaintiff may avail herself of the IDEA'S procedural protections depends upon whether she is considered a "parent" within the meaning of the statute). Arons does not allege that she meets the definition of "parent" for purposes of the IDEA. Accordingly, Arons cannot sustain a claim against Sinergia and Family Advocates for violating the IDEA.
II. Section 1983
Arons asserts that Sinergia and Family Advocates violated her rights under Section 1983 by conspiring with the State to harass her and to deprive her of her right to compensation for assisting parents in IDEA due process hearings. According to Arons, the State permitted Sinergia and Family Advocates to use federal funds distributed to the organizations pursuant to the IDEA to deprive Arons of her rights under the statute. The defendants have moved to dismiss the Section 1983 claims pursuant to Rule 12(c), Fed.R.Civ.P., and Sinergia moved in the alternative for an award of summary judgment. The defendants and the plaintiff submitted evidence in connection the motion. A court can convert a motion to dismiss into a motion for summary judgment under such circumstances,see Rule 12(c), Fed.R.Civ.P., at least where the non-movant "should reasonably have recognized the possibility that the motion might be converted into one for summary judgment [and was not] taken by surprise and deprived of reasonable opportunity to meet facts outside the pleadings." Gurary v. Winehouse, 190 F.3d 37, 43 (2d Cir. 1999) (citation omitted); see also Groden v. Random House, Inc., 61 F.3d 1045, 1052-53 (2d Cir. 1995). Given Sinergia's explicit request for summary judgment and all parties' reliance on evidentiary submissions, it is appropriate to consider the motion as one for summary judgment.
Section 1983 provides, in pertinent part, that "[e]very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress." 42 U.S.C. § 1983.
In her opposition to this motion, Arons responded with her own affidavit. In addition, Arons submitted extensive exhibits, including Family Advocates' financial filings with the State Attorney General and printouts of materials from the organizations' websites.
Summary judgment may not be granted unless the submissions of the parties taken together "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), Fed.R.Civ.P. The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination the Court must view all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must "set forth specific facts showing that there is a genuine issue for trial," and cannot rest on the "mere allegations or denials" of his pleadings. Rule 56(e), Fed.R.Civ.P.; accord Burt Rigid Box. Inc. v. Travelers Property Cas. Corp., 302 F.3d 83, 91 (2d Cir. 2002).
In order to prevail on a Section 1983 claim, a plaintiff must show that she was injured by "either a state actor or a private party acting under color of state law," Ciambriello v. County of Nassau, 292 F.3d 307, 323 (2d Cir. 2002), and that such conduct deprived the plaintiff of a right, privilege, or immunity secured by the Constitution or laws of the United States, Dwares v. City of New York, 985 F.2d 94, 98 (2d Cir. 1993). Where the defendant is a private entity, the "under color of state law" requirement is satisfied only if the allegedly unconstitutional conduct can be "fairly attributable" to the state. Tancredi v. Metropolitan Life Ins. Co., 316 F.3d 308, 312-13 (2d Cir. 2003) (citing American Manufacturers Mutual Insurance Co. v. Sullivan, 526 U.S. 40, 50 (1999)). Such conduct can be fairly attributed to the state "only if there is such a close nexus between the State and the challenged action that seemingly private behavior may be fairly treated as that of the State itself." Id. (citingBrentwood Academy v. Tennessee Secondary School Athletic Ass'n, 531 U.S. 288, 295 (2001)). A close nexus may be found
[W]here the State exercises "coercive power" over, is "entwined in [the] management or control" of, or provides "significant encouragement, either overt or covert" to, a private actor, or where the private actor "operates as a willful participant in joint activity with the State or its agents," is "controlled by an agency of the State," has been delegated a "public function" by the state, or is "entwined with governmental policies."Tancredi, 316 F.3d at 313 (quoting Brentwood, 531 U.S. at 296).
Arons argues that Sinergia and Family Advocates receive public funds, and that the receipt of those funds creates a close nexus between their conduct and the State such that the organizations' actions can be fairly attributable to the State. The receipt of public funds by a private entity, no matter how extensive, is insufficient in and of itself to establish state action. The acts of "private contractors do not become acts of the government by reason of their significant or even total engagement in performing public contracts." Rendell-Baker, 457 U.S. 830, 841 (1992) (private school receiving 90% of its operating budget from public funds not state actor); see also Slum v. Yaretsky, 457 U.S. 991, 1011 (1982) (no state action even though state paid the medical expenses of more than 90% of the patients and subsidized the operating and capital costs of the nursing homes).
Family Advocates disputes that it receives any public funds. In its Answer, the organization states that it "is not a recipient of either federal or state funding and never has been." Sinergia admits that it receives some federal funding, but avers that "no federal monies were utilized to defend" Batchelder against Arons's lawsuit.
Arons does not present any other evidence or make any other argument that would support a Section 1983 action. For example, she does not argue that the State exercises "coercive power" over Sinergia or Family Advocates, that it is "entwined" in the management of the organizations, or that it "controlled" the organizations.Tancredi, 316 F.3d at 313 (citation omitted). Accordingly, Arons's Section 1983 claim against Sinergia and Family Advocates must fail.
C. Supplemental State Law Claims
Arons asserts common law claims against Sinergia and Family Advocates for, inter alia, tortious interference with contract, libel, entrapment, and conspiracy. Arons has not filed this action pursuant to this Court's diversity jurisdiction; rather, Arons relied on her now dismissed federal law claims as the basis of jurisdiction in the federal court. Where no federal claims remain in an action and the requirements for diversity jurisdiction are lacking, a district court is not required to retain jurisdiction over remaining state law claims. 28 U.S.C. § 1367(c)(3); see also Valencia ex rel. Franco. v. Lee, 316 F.3d 299, 304-06 (2d Cir. 2003). Since this litigation is in its initial stages, this Court declines to exercise supplemental jurisdiction over it and the state law claims are dismissed without prejudice to refiling them in state court.
Arons's claim does not appear to meet the jurisdictional amount required for diversity actions in federal court. The most Arons could be claiming, exclusive of interest and costs, is $45,050. The itemized bill she presented in connection with her suit against the Mackeys totaled $20,050. Although Arons did not present a sum certain for her assistance to Batchelder, Arons initiated her state suit against Batchelder in the Civil Court for the City of New York, which has a jurisdictional limit of $25,000. In her prayer for relief, Arons seeks reimbursement from Family Advocates and Sinergia for the outstanding balance of her bills to the Mackeys and Batchelder, respectively. Arons does not seek money damages against the State. Therefore, the upper limit on Arons's claim against the defendants in this case falls far short of the $75,000 jurisdictional requirement for a diversity suit in federal court. See 28 U.S.C. § 1332.
Conclusion
For the reasons stated above, the defendants' motions to dismiss the federal law claims are granted with prejudice. The defendants' motions to dismiss the state law claims are granted without prejudice to the plaintiff refiling them in state court.
SO ORDERED.