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Royal Crown Day Care LLC, Boris Rey, Irina Gafina and Irina Pritsker v. the Department of Health and Mental Hygiene of the City of New York

July 20, 2012


The opinion of the court was delivered by: Margo K. Brodie, United States District Judge:


Plaintiffs Royal Crown Day Care LLC ("Royal Crown"), Boris Rey, Irina Gafina and Irina Pritsker bring the above-captioned action pursuant to 42 U.S.C. § 1983 against Defendants Department of Health and Mental Hygiene (the "Department of Health"), Frank Cresciullo, James Morriss and Aurora Villareal. Plaintiffs allege that Defendants suspended their day care permit in retaliation for a letter that Royal Crown sent to a state senator claiming, among other things, that Royal Crown was being harassed and that the Department of Health is corrupt. Defendants moved for summary judgment on all of Plaintiffs' claims, and Plaintiffs cross-moved for summary judgment on their procedural due process claim only. The Court heard argument on the parties' motions on July 13, 2012. At the argument, the Court ruled on the majority of the parties' motions but reserved decision as to Defendants' motion for summary judgment on (1) Plaintiffs' substantive due process claim and (2) claims by individual plaintiffs Boris Rey, Irina Gafina and Irina Pritsker (the "Individual Plaintiffs").*fn1 For the reasons set forth below, Defendants' motion is denied as to Plaintiffs' substantive due process claim but granted as to the Individual Plaintiffs.


On August 20, 2009, Royal Crown received a permit from the Department of Health for a child care service. (Def. 56.1 ¶ 2.) According to Defendants, the Department of Health received complaints about Royal Crown on September 30, 2009, October 9, 2009, December 3, 2009, December 11, 2009, February 22, 2010 and April 29, 2010. (Def. 56.1 ¶¶ 13--18.) The Department of Health investigated each of the complaints, but, for the most part, the complaints were determined to be unfounded or were remedied by the time the inspector left Royal Crown. Id. On April 13, 2010, Royal Crown's permit was amended to allow it to accommodate a total of 172 children. Id. at ¶ 7.

On April 30, 2010, the Department of Health received another complaint, and it sent four staff members to conduct an inspection. Id. at ¶ 19. According to Defendants, the inspectors identified a number of violations, including insufficient staffing and staff without criminal and child abuse registry clearances. Id. Plaintiffs claim that during the April 30 inspection, the inspectors arrived unannounced, disrupted the children's activities, yelled at the teachers and "otherwise conduct[ed] themselves in a rude, oppressive and unprofessional manner." (Compl. ¶ 37.) As a result of this inspection, Royal Crown sent a letter of complaint to New York State Senator Martin Golden. Id. at ¶ 38. In the letter, Royal Crown states, among other things, that the owner of a rival day care has been calling the Department of Health with complaints; that during the recent inspection the Department of Health inspectors barged into the day care and insulted children and parents; and that the Department of Health is corrupt and trying to shut Royal Crown down. (Def. Summ. J. Ex. 16.) Senator Golden's office forwarded the letter to the Department of Health, asking them to respond to the allegations. Id.

In response to the letter, Defendant Cresciullo directed Defendant Morriss to assemble a team to conduct a thorough assessment of Royal Crown. (Def. 56.1 ¶ 24.) Defendant Morriss personally selected four inspectors for the investigation. Id. at ¶ 25. The four inspectors conducted a two-day inspection of Royal Crown on June 11 and June 14, 2010. Id. at ¶ 27. The inspectors then drafted a report listing a number of violations, including, among other things, employees without criminal and child abuse clearances, staff listed in the database that did not work at the day care center and classrooms that were overcapacity and understaffed. Id. at ¶¶ 29--32. Defendants claim that because inspectors identified 14 staff members without the proper clearances, Royal Crown could not remain open and the suspension of their permit was automatic. Id. at ¶ 34.

On June 15, 2010, Royal Crown's day care permit was suspended and it was ordered to cease operations. Id. at ¶ 35. The suspension order included the following provision: "To object to this Order or to request an opportunity to show cause why you should not remain closed, you must contact James Morriss, Director of Field Operations and Regulatory Enforcement at (212) 676-2464 within three days of receipt of this Order. If you have any questions please contact Mr. Morriss." Id. at ¶ 37. On June 18, 2010, the Department of Health served Royal Crown's counsel with a Petition and Notice of Hearing before the New York City Office of Administrative Trials and Hearings ("OATH") to permanently revoke its permit. Id. at ¶ 43.

After discovery was conducted, the OATH proceeding commenced on August 17 and was held August 17--19 and September 17. Id. at ¶ 48. The hearing was temporarily suspended so the parties could negotiate a settlement, but they could not reach an agreement and the hearings continued October 27--29 and November 12. Id. at ¶¶ 49--50. On November 12, 2010, Department of Health attorneys moved to terminate the OATH proceeding because Royal Crown had given up its lease and therefore the permit was automatically void. Id. at ¶ 52. Royal Crown's attorney objected, but the Administrative Law Judge ("ALJ") granted the Department of Health's motion to withdraw its charges with prejudice. Id. at ¶ 53. Royal Crown did not appeal this decision or proceed with its pending Article 78 proceeding.

Royal Crown alleges that on several occasions Defendant Aurora Villareal, a Brooklyn Borough manager, told Royal Crown that if it wanted to stay in business it had to pay money. (Compl. ¶ 70.) Defendants do not dispute that three Department of Health staff members, who had some contact with Royal Crown, were arrested in connection with a bribery scandal that involved a group of approximately 30 Brooklyn and Staten Island day care centers. (Def. 56.1 ¶ 54.) Defendant Villareal was arrested on August 10, 2010 and indicted for conspiracy to commit mail and "honest services" fraud. Id. at ¶ 55. Emile Nekhala and Dionne Rivers-Ettu, both of whom conducted inspections of Royal Crown, were also indicted. Id. at ¶ 56.


a.Standard of Review

Summary judgment is proper only when, construing the evidence in the light most favorable to the non-movant, "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Doninger v. Niehoff, 642 F.3d 334, 344 (2d Cir. 2011). The role of the court is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Educ., 444 F.3d 158, 162 (2d Cir. 2006) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). A genuine issue of fact exists when there is sufficient "evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252.

b.Substantive Due Process

In order to prevail on a substantive due process claim, Plaintiffs must show (1) that they had a valid property interest in the day care permit, and (2) that Defendants infringed that property interest in an arbitrary or irrational manner. Cine SK8, Inc. v. Town of Henrietta, 507 F.3d 778, 784 (2d Cir. 2007) (citing Harlen Assoc. v. Inc. Vill. of Mineola, 273 F.3d 494, 503 (2d Cir. 2001)). Substantive due process "does not forbid governmental actions that might fairly be deemed arbitrary or capricious and for that reason correctable in a state court lawsuit. . . . [Its] standards are violated only by conduct that is so outrageously arbitrary as to constitute a gross abuse of governmental authority." Harlen Assoc., 273 F.3d at 503; see also Natale v. Town of Ridgefield, 170 F.3d 258, 263 (2d Cir. 1999) ("For state action to be taken in violation of the requirements of substantive due process, the denial must have occurred under circumstances warranting the labels 'arbitrary' and 'outrageous.'"). A defendant's decision to deprive a plaintiff of his or her property interest because of an illegal or unconstitutional motive is irrational and gives ...

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