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MCGUIRE v. SWITZER

March 27, 1990

KEVIN G. MCGUIRE, PLAINTIFF,
v.
RICHARD M. SWITZER, DEPUTY COMMISSIONER FOR VOCATIONAL REHABILITATION OF THE NEW YORK STATE EDUCATION DEPARTMENT, IN HIS OFFICIAL AND INDIVIDUAL CAPACITIES; BASIL Y. SCOTT, FORMER DEPUTY COMMISSIONER FOR VOCATIONAL REHABILITATION OF THE NEW YORK STATE EDUCATION DEPARTMENT, IN HIS OFFICIAL AND INDIVIDUAL CAPACITIES; AND THE OFFICE OF VOCATIONAL REHABILITATION OF THE NEW YORK STATE EDUCATION DEPARTMENT, DEFENDANTS.



The opinion of the court was delivered by: Lowe, District Judge.

  OPINION AND ORDER

Defendants have moved, pursuant to Fed.R.Civ.P. 12(b)(1) and (6), to dismiss the complaint on the grounds that A) this Court does not have subject matter jurisdiction over defendants due to their Eleventh Amendment immunity to such claims, and B) the complaint fails to state a claim upon which relief can be granted. Defendants also argue that plaintiffs claims are barred by the statute of limitations and the doctrine of res judicata.

The motion was referred to Magistrate Leonard A. Bernikow for a recommendation as to the proper disposition of defendants' motion. In his thorough Report and Recommendation ("R & R"), the Magistrate recommended dismissal of four of the five claims on the ground that the Eleventh Amendment bars the type of relief plaintiff could properly seek against the state. The Magistrate further held that monetary damages were available based upon the state's alleged violation of § 504. For the reasons discussed below, this Court agrees with the Magistrate's R & R insofar as it holds that plaintiff's claims for retrospective monetary relief that are actually claims against the state are barred by the Eleventh Amendment and that plaintiff's claim based upon § 504 may partially stand. We disagree, however, with the Magistrate's findings that plaintiff's claims against defendants Scott and Switzer, in their individual capacities, are actually claims against the state*fn1 and that plaintiff's claims for prospective relief are moot. Yet, plaintiff's non-moot claims for injunctive and declaratory relief are barred by the doctrine of res judicata. Lastly, plaintiff has stated a § 1983 claim against the individual defendants in their personal capacities with respect to his allegations that the cap regulations violate the individualization requirement of Title I and the Equal Protection Clause of the Fourteenth Amendment.

BACKGROUND

Plaintiff McGuire is totally disabled, having suffered from paraplegia since the age of seven. He relies on a wheelchair for mobility. Continuously since 1978, plaintiff has been a client of defendant Office of Vocational Rehabilitation ("OVR").

OVR operates rehabilitation programs established under the federal Vocational Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq. ("the Act"). The purpose of the Act is the development and implementation of programs of vocational rehabilitation for disabled individuals so that they can obtain gainful employment. Substantial amounts of federal funds are made available to states for provision of rehabilitation services upon submission of appropriate plans pursuant to 29 U.S.C. § 721. New York State has filed such a plan designating OVR as the agency responsible for vocational rehabilitation.

The Act requires states receiving funding under the Act to develop an "individualized written rehabilitation program" ("IWRP") for each person they are rehabilitating. 29 U.S.C. § 721(a)(9), 722. The IWRP is to be tailored to each client's individual needs and potential with emphasis placed upon the determination and achievement of a vocational goal for each individual.

Plaintiff maintains that from the outset of his client relationship with OVR, his IWRP has had employment as a practicing attorney as its goal. Complaint ¶¶ 17-18. In furtherance of this end, OVR funded plaintiff's undergraduate tuition and maintenance expenses at Boston University. Complaint ¶ 26. After graduating from Boston University in June 1983, plaintiff enrolled at Georgetown University Law School. He has since graduated from the law school. In 1982, OVR promulgated new regulations that limited its expenditures on behalf of each of its clients to $1,500 a year for tuition and $1,300 for maintenance. See 8 N.Y.C.R.R. ¶¶ 247.13(1)(l)(iv) (tuition); 247.13(e)(1)(i) (maintenance). OVR's assistance to plaintiff for these purposes had been restricted in accordance with these "caps" throughout his law school education at Georgetown. As a result, plaintiff has had to borrow more than $25,000 to cover the difference between the funding he receives and his actual costs. Complaint ¶ 40.

Plaintiff initially brought a pro se Article 78 proceeding, C.P.L.R. §§ 7801 et seq., in New York State Supreme Court, Albany County, seeking review of an OVR administrative determination that had upheld the application of the "cap" regulations to him. The court dismissed the action on the grounds that the petition was not served on the Commissioner of Education or on the Attorney General as required by C.P.L.R. §§ 312 and 7804(c) and that the action was not brought within the four month period of limitations applicable to Article 78 proceedings under C.P.L.R. § 217.

Subsequently, plaintiff commenced the present action based on his belief that the caps undermine the individualization of service to rehabilitation clients that he alleges is required by federal law. Complaint ¶ 9. He seeks relief through five causes of action. First, plaintiff contends pursuant to § 1983 that the cap regulations deny him the equal protection of the laws as guaranteed by the Fourteenth Amendment by undermining the individualization required under federal law and by treating him differently from other, similarly situated persons. Plaintiff also alleges that OVR denied him his Constitutionally protected rights to due process by adopting cap regulations affecting his IWRP without giving him adequate opportunity to be heard.

Plaintiff also relies on § 1983 in his second cause of action which maintains that OVR's application of the cap regulations to him violates his statutory rights under Title I. His third cause of action is based solely on Title I under the implied right of action doctrine. Plaintiff's fourth case of action, brought under 28 U.S.C. § 1337, asserts that the application of the challenged regulations violates an act of Congress regulating commerce. Lastly, in the fifth cause of action, plaintiff alleges that OVR discriminates against him due to his disability, in violation of § 504 of the Act, 29 U.S.C. § 794.

Defendants have moved, pursuant to Fed.R.Civ.P. 12(b)(1) and (6), to dismiss the complaint on four grounds. First, defendants allege that this Court does not have subject matter jurisdiction over defendants due to their Eleventh Amendment immunity to such claims. Second, defendants argue the complaint fails to state a claim upon which relief can be granted. Third, defendants contend that plaintiffs claims are barred by the statute of limitations. Finally, defendants maintain that the claims made have already been considered and rejected and therefore the doctrine of res judicata requires that they be dismissed.

In his R & R, the Magistrate recommended dismissal of all the counts except plaintiffs fifth cause of action based upon § 504 of the Act. The Magistrate found that none of the claims are barred by the three-year statute of limitations that applies and that plaintiff's fifth cause of action for monetary relief is not barred by the earlier Article 78 proceeding. Next, the Magistrate determined that the Eleventh Amendment bars four of the five claims since the only aspects of those claims that were not moot sought retroactive monetary relief from the state and the state neither implicitly nor expressly waived its immunity with regard to those claims.

The Magistrate did find, however, that the state's sovereign immunity to suit was eliminated by Congress's amendment of § 504 of the Act, the statute underlying plaintiff's fifth claim. Finding that the alleged violation of § 504 at issue occurred in part after the amendment, the Magistrate held that monetary damages were available based upon the state's differing treatment of the visually-impaired but not based upon OVR's differing treatment of its clients.

Plaintiff raises three objections to the Magistrate's R & R. First, he argues that there is no Eleventh Amendment bar to his first four claims because a) federal reimbursement removes the state's Eleventh Amendment immunity; b) the state implicitly waived its immunity privilege by accepting the federal guidelines for handicapped assistance; and c) the state officials are being sued in their individual capacities. Second, plaintiff claims that even if his injunctive claims are moot with regard to law school, he has a continuing relationship with OVR for which injunctive relief is appropriate and, in any event, this Court should use its discretionary powers to rule on any moot claims since the issue of discrimination in a case such as this is capable of repetition and will always evade review. Third, plaintiff argues that his § 504 action states a claim with respect to his allegation that OVR discriminated against him vis-a-vis other OVR clients.

Defendants object to the Magistrate's recommendation that plaintiff has stated an adequate claim with respect to his contention that he deserves to receive the amount of reimbursement for tuition and maintenance expenses that is given to eligible blind persons. Defendants maintain that Congress intended to treat the visually-impaired differently than other disabled individuals. In addition, defendants object to the Magistrate's R & R on the ground that the § 504 action should not proceed because the amendment that eliminated the state's Eleventh Amendment immunity did not cover the alleged violation at issue. In other words, defendants argue that if any violation occurred it did not occur "in part" after the passage of the amendment. Finally defendants claim that a one-year statute of limitation should apply and not the three-year limit recommended by the Magistrate.

DISCUSSION

At the outset, it should be noted that on objection to a Magistrate's ruling, a District Court is to conduct "a de novo determination of the facts and legal conclusions to be drawn therefrom." Campbell v. U.S. District Court, 501 F.2d 196, 206 (9th Cir.), cert. denied, 419 U.S. 879, 95 S.Ct. 143, 42 L.Ed.2d 119 (1974); see generally, 12 Wright, Miller and Elliott, Federal Practice and Procedure, § 3076.8 (1986 supp.).

Statute of Limitations

The Magistrate's ruling that plaintiff's § 1983 claims are not barred by the statute of limitations is correct. As the Magistrate determined, the appropriate statute of limitations is three years, that being the statute of limitations for the New York general personal injury statute, New York Civil Practice Law and Rules ("C.P.L.R.") § 214(5). Okure v. Owens, 816 F.2d 45, 49 (2d Cir. 1987). Defendants object to this conclusion on the grounds that Okure v. Owens, which held that the State's 3-year residual statute of limitations for personal injury claims not embraced by specific statutes of limitations was applicable to § 1983 actions, was decided erroneously and had been appealed to the Supreme Court. Since that time, the Supreme Court in an opinion written by Justice Marshall has affirmed the decision in Okure v. Owens holding that in all instances where state law provides multiple statutes of limitations for personal injury actions — as is the case in New York, see C.P.L.R. § 214(5) (three years) and C.P.L.R. § 215(3) (one year for intentional torts) — the State's general or residual personal injury statute of limitations should apply to § 1983 claims. Owens v. Okure, 488 U.S. 235, 109 S.Ct. 573, 102 L.Ed.2d 594 (1989). As a result, there can now be no dispute that New York state law provides a three year statute of limitations for § 1983 actions.*fn2

Defendants also argue, however, that the cause of action arose prior to January 28, 1983 because plaintiff was advised of the caps in January 1983*fn3 and therefore the action is time-barred even under the three year statute of limitations since the action was not filed until January 28, 1986. Yet, plaintiff did not find out until June 15, 1983 that the January notice he received was not, in OVR's view, erroneous. As a result, this Court concurs with the Magistrate's conclusion that "plaintiff's cause of action more definitely arose on June 15, 1983" when he received clear notice of the agency action that gave rise to his claims.*fn4 R & R at 5, n. 1. Plaintiff's § 1983 claims are therefore not time-barred.

Eleventh Amendment Immunity

The Magistrate found that plaintiffs first four claims were barred by the Eleventh Amendment. Looking only at plaintiff's claims for retroactive monetary relief — since the Magistrate found that plaintiff's demand for prospective relief was mooted by his graduation from law school — the Magistrate concluded that the state had neither implicitly nor expressly waived its immunity with regard to those four claims. The Magistrate did find however that defendants' sovereign immunity to suit with regard to plaintiff's fifth claim was eliminated when Congress amended § 504 of the Act. Both plaintiff and defendants raise numerous objections to these findings. Supra, pp. 103-104. This Court disagrees with the Magistrate's holding in two respects. First, we find that plaintiff's claims against defendants Switzer and Scott in their individual capacities do not constitute a suit against the state itself and therefore are not barred by the Eleventh Amendment. Second, we hold that plaintiff's claims for prospective relief are not made moot by his graduation from law school.

Under the Eleventh Amendment, a private person may not sue a state in a federal court without its consent, whether or not the plaintiff is a citizen of that state. Edelman v. Jordan, 415 U.S. 651, 662-63, 94 S.Ct. 1347, 1355-56, 39 L.Ed.2d 662 (1974) (citations omitted); Minotti v. Lensink, 798 F.2d 607 (2d Cir. 1986). Where state officials are sued in their official capacities for retroactive money damages by private parties in a federal court, suit is still barred by the Eleventh Amendment because the liability is one which must be paid from public funds in the state treasury. Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 1355. This ...


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