Safari Childcare Inc. v. Penny

SAFARI CHILDCARE INC. and JAMES OURTH, Plaintiffs, v. SHIRLEY PENNY, DENICE MURRAY, CAROL MORRIS,RICHARD ALEXANDER, JOEL LAMZ, STANY D'SOUZA,EDIE WASHINGTON GURLEY, JOSE ALEX MEDINA,FRANK NEUMAN, HELEN CROSS, BETH GIRARDIER,MARY LIVORSI, LESLIE PARELLO-HORTON, JODI GOLEMBIEWSKI,JODINE WILLIAMS, EVA CAMACHO, ROBERT MUSIAL,DONNA RIEDL, GWENDOWLYN AMBER,COURTNEY MARSHALL, and STACEY SMITH, Defendants.

17 C 8547

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

August 2, 2019

Judge Gary Feinerman

MEMORANDUM OPINION AND ORDER

Safari Childcare Inc., which operates daycare centers in the Chicago area, and James Ourth, Safari's owner, bring this suit under 42 U.S.C. § 1983 against twenty-one Illinois Department of Children and Family Services ("DCFS") employees. Doc. 52. The court dismissed without prejudice the original complaint on group pleading grounds. Docs. 43-44 (reported at 2018 WL 4144637 (N.D. Ill. Aug. 30, 2018)). In so doing, the court observed that if Plaintiffs elected to file an amended complaint, they should "identify ... which defendant is alleged to have done what." 2018 WL 4144637, at *3. Plaintiffs took the court's direction to heart, filing an amended complaint that has far greater detail—and far greater length—than the original complaint. Defendants now move under Civil Rules 12(b)(1) and 12(b)(6) to dismiss the amended complaint. Doc. 59. The motion is denied.

Background

In resolving a Rule 12(b)(1) motion asserting a facial challenge to subject matter jurisdiction, as in resolving a Rule 12(b)(6) motion, the court assumes the truth of the operative complaint's well-pleaded factual allegations, but not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016) (Rule 12(b)(6)); Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015) (Rule 12(b)(1)). The court must also consider "documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice," along with additional facts set forth in Plaintiffs' brief opposing dismissal, so long as those additional facts "are consistent with the pleadings." Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1020 (7th Cir. 2013) (internal quotation marks omitted). The facts are set forth as favorably to Plaintiffs as those materials permit. See Domanus v. Locke Lord, LLP, 847 F.3d 469, 478-79 (7th Cir. 2017). In setting forth the facts at this stage, the court does not vouch for their "objective truth." Goldberg v. United States, 881 F.3d 529, 531 (7th Cir. 2018).

As the Illinois agency charged with regulating child care facilities, DCFS was responsible for inspecting and licensing Safari's daycare centers. Doc. 52 at ¶¶ 10-11; see 225 ILCS 10/1 et seq.; 89 Ill. Admin. Code § 407.40 et seq. Between 1991 and 2009, Plaintiffs did not experience any significant problems with DCFS. Doc. 52 at ¶¶ 8, 14, 17.

After Ourth complained and Safari staff called the police in 201 regarding certain DCFS employees' conduct while inspecting Safari facilities, various DCFS employees delayed action on Safari's applications to open three daycare centers and to expand operations at a fourth. Id. at ¶¶ 18-24, 31-34. As the delays continued, Safari enlisted Illinois elected officials to speak with DCFS about those applications. Id. at ¶¶ 34-36, 39. Safari's counsel told DCFS in January 2012that it would commence a public campaign regarding its complaints about DCFS. Id. at ¶¶ 48-49. Between 2011 and 2013, Safari representatives met multiple times with DCFS staff to discuss continuing issues with DCFS's inspection and licensing of its daycare centers. Id. at ¶¶ 40, 43, 50-53, 55, 59-60, 109-110.

As a result of Safari's continued engagement with Illinois elected officials and repeated calls to the police about the conduct of DCFS employees during inspections of Safari facilities, various DCFS employees secretly agreed to increase their inspection and enforcement efforts against Safari. Id. at ¶¶ 53-54, 68-71, 102. Denice Murray, a defendant here and DCFS's Deputy Director of Licensing from early 2012 to September 2016, orchestrated the retaliatory scheme after a heated meeting on April 20, 2012 between DCFS representatives, Safari representatives, and Illinois elected officials. Id. at ¶¶ 50, 53-54, 102, 184-185. The scheme consisted of Defendants delaying the licensing process for Safari facilities; more frequently conducting unannounced inspections; requesting parental contact information for random surveys; failing to provide clear violation reports or realistic corrective plans; reversing DCFS's position on the qualifications of Safari's teachers; demanding strict compliance with DCFS licensing standards, rather than the reasonable compliance required by DCFS rules; and falsely testifying in administrative hearings. Id. at ¶¶ 64, 71-74, 76, 80, 87-92, 102-103, 169, 368, 558, 623, 646.

Those increased enforcement efforts resulted in nine of Safari's eleven daycare centers closing between 2015 and 2017:

• After DCFS in 2013 issued two notices of intent to revoke Safari's license for its McHenry daycare center, Safari closed the facility on May 29, 2015, prior to the conclusion of administrative proceedings. Id. at ¶¶ 108, 115, 132-133; Doc. 66-4. Despite this voluntary closure, a news report quoted DCFS employee Veronica Reza as stating, "Basically [the McHenry] license was revoked." Doc. 52 at ¶ 134(quoting Katie Dahlstrom, McHenry Child Care Center Loses License, Closes After State Probe, Nw. Herald (May 29, 2015), https://perma.cc/T2Y6-8K8N).

• DCFS ordered Safari's Algonquin Road daycare center closed in late 2014, despite the facility's 95% compliance rating. Id. at ¶¶ 100, 125, 128-129. Although the state court vacated the closure order, thereby allowing the center to reopen in January 2015, a DCFS representative had already encouraged parents to use other daycare centers. Id. at ¶¶ 128-131. After further administrative proceedings, a state administrative law judge ("ALJ") revoked Safari's Mt. Algonquin license, Doc. 66-8 at 26, and the center closed on July 27, 2017. Doc. 52 at ¶ 160.

• Although Safari eventually received a license to open a daycare center in Highland Park, DCFS never renewed the license, so Safari closed the facility on June 30, 2015. Id. at ¶¶ 18, 23, 136, 550.

• DCFS issued a notice to revoke the license for Safari's Cary daycare center in May 2015 after reversing its position on whether Safari's teachers were qualified. Id. at ¶¶ 127, 137. Safari closed the facility on December 29, 2015. Id. at ¶ 137.

• DCFS's director upheld an ALJ's decision to revoke the license for Safari's East Dundee daycare center in May 2016 on the ground that it was not in strict compliance with DCFS standards. Id. at ¶¶ 138, 140; Doc. 66-5 at 1. Safari closed the facility on June 3, 2016. Doc. 52 at ¶ 140. Safari sought review in the state trial court, but voluntarily dismissed that action without prejudice in June 2017, Doc. 66-6 at ¶ 1, after the state appellate court affirmed the trial court's denial of its emergency motion to stay enforcement of the DCFS revocation order, Safari Childcare, Inc. v. DCFS, 2016 WL 7434440 (Ill. App. Dec. 23, 2016).

• After not receiving a response for some seven months on its timely application to renew the license for its Palatine daycare center, Safari closed the facility on October 31, 2016. Doc. 52 at ¶¶ 143-145.

• In January 2017, after Safari provided DCFS with the contact information for parents with children at its Belvidere daycare center, DCFS representatives told the parents that DCFS was shutting down all Safari facilities, and also demanded impromptu interviews with the Belvidere facility's staff. Id. at ¶¶ 148-150. As a result, Safari closed the facility in January 2017. Id. at ¶ 151.

• Having devoted considerable resources to challenging DCFS's enforcement actions and doubting that it could renew it Bensenville daycare center's license once the same DCFS representative involved the Algonquin Road facility's shutdown was assigned to handle the Bensenville facility, Safari decided to close the Bensenville facility in April 2017. Id. at ¶¶ 153-155. Despite the voluntary closure, the DCFS licensing officer considered Safari to have surrendered its Bensenville license "with cause." Id. at ¶ 155.

• After DCFS issued a notice of non-renewal of Safari's license for its Streamwood daycare center, an ALJ decided in 2017 that Safari failed to strictly comply with DCFS standards. Id. at ¶¶ 126, 156-157, 159; Doc. 66-7 at 27-28. Accordingly, Safari closed the facility on June 9, 2017. Doc. 52 at ¶ 159.

During the pertinent timeframe, non-Safari daycare centers with lower compliance ratings or other significant issues remained open and did not experience similar scrutiny. Id. at ¶¶ 101, 113, 122, 139, 162, 165, 205; id. at p. 115, ¶ 3. Several DCFS representatives told Plaintiffs that daycare license revocations are quite rare, which accords with Safari's experience before it began complaining in 2010 about DCFS's conduct. Id. at ¶¶ 158, 167.

Discussion

The amended complaint brings a class-of-one equal protection claim, a First Amendment retaliation claim, and a civil conspiracy claim, all under § 1983. Id. at pp. 115-118. Defendants move to dismiss Plaintiffs' claims under Rule 12(b)(1) on sovereign immunity grounds and under Rule 12(b)(6) on lack of notice, group pleading, claim preclusion (res judicata), failure to exhaust, statute of limitations, qualified immunity, and other grounds. Doc. 66 at 13-27. Although Defendants cast their sovereign immunity argument in jurisdictional terms, id. at 15-16, the Seventh Circuit "has clearly held that the question of sovereign immunity is not a jurisdictional one," so sovereign immunity is considered with Defendants' other Rule 12(b)(6) arguments and not under Rule 12(b)(1). Meyers v. Oneida Tribe of Indians of Wis., 836 F.3d 818, 820, 822 (...