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Friday, September 9, 2016

Day Care Entitled to Hearing After License Revoked

Rebirth Christian Academy Daycare, Inc., a day care facility in Indiana, was notified by the state of Indiana that it was in violation of state day care registration laws. When the agency terminated Rebirth’s registration without any hearing, Rebirth filed suit against the agency and two agency officials in their individual and official capacities, alleging that Rebirth’s constitutional rights were violated when its registration was terminated without a hearing. The district court dismissed the individual-capacity claims against the two state workers, although the court allowed the case against the agency to proceed. On appeal to the Seventh Circuit Court of Appeals, the appellate court reinstated the individual claims against the state workers, finding that Rebirth was deprived of its due process rights in Rebirth Christian Academy Daycare, Inc. v. Brizzi and Gargano.

There are many federal cases that relate to the rights of a person or company to have a hearing either before or after a license or registration is taken away from them.  In some limited cases, courts have held that a post-deprivation hearing is adequate.  In other cases, such as for example, a water shut-off by a governmental body when the dispute involves more than the non-payment of a bill, the courts have required an opportunity of a hearing before the governmental body takes the action.  What is somewhat unusual and rather scary about this case is that the two officials working for the state perfectly followed existing state law.  Indiana state law dealing with daycare centers for non-religious entities, requires a license which cannot be terminated without a hearing.  An easier path is established for daycare centers run by religious organizations that are not required to get a license but only a registration.  However, the legislature failed to deal with the rights of a religious organization when the state feels that it has violated some of the limited requirements that go along with the easier to acquire registration.

In this case, even though the two individuals in question specifically followed state law and gave the childcare center two notice letters before terminating their registration, both the trial court and the appellate court found that even though these officials did not act contrary to clearly-established law, they could not issue a revocation without some type of administrative hearing and it was their obligation to put such a hearing in place. 

Rebirth, however, was not satisfied with this result and it appealed the district court’s dismissal of the individual-capacity damage claims against the two state workers.  The workers claim that they were entitled to qualified immunity because they were following the statute.  They agreed that they had actually violated Rebirth’s constitutional rights, but they argued that the constitutional issue at question was not clearly established at the time of the violation.

The appellate court then discusses dozens of cases which make a distinction between the deprivation of rights which can be accomplished with only the ability for a post-deprivation hearing.  The appellate court decided that “(T)his is a case in which due process clearly requires some pre-deprivation opportunity to be heard and the appellees provided no opportunity for a hearing, though nothing prevented them from doing so.” The court concluded that the two officials “were personally involved in depriving Rebirth of an opportunity for a pre-deprivation hearing…” 

The cautionary tale of this case is that in rare situations, even public officials who follow a statute to the letter may find themselves the subject of a lawsuit.  These officials and their lawyers needed to pay close attention to the letter from the facility they were about to close demanding a hearing.  Such demands cannot be ignored out of hand.  Since the case does not deal at all with the alleged deficiencies of the daycare center, it may well be that an independent Administrative Hearing Officer would have decided that the termination of registration was entirely justified.  Sometimes, it is necessary to recall that our constitutional protection of “due process” really relates more to the process granted than to an unambiguous and compelling final result.

Post Authored by Stewart Diamond, Ancel Glink


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