United States District Court, S.D. New York
As Amended April 23, 2015.
[Copyrighted Material Omitted]
For Plaintiff: Mark Craig Rushfield, Esq., Shaw, Perelson, May & Lambert, LLP, Poughkeepsie, NY.
For Defendants: Jennifer Ellen Blain, Esq., United States Attorney's Office, Southern District of New York, New York, NY.
AMENDED OPINION AND ORDER
KENNETH M. KARAS, UNITED STATES DISTRICT JUDGE.
Plaintiff Pearl River Union Free School District (" Plaintiff" ) brings this Action against Defendants Arne Duncan, as Secretary of the United States Department of Education, and the United States Department of Education's Office for Civil Rights (" OCR" ) (collectively, " Defendants" ), alleging that OCR's issuance of a Letter of Findings setting forth its determinations in regard to an alleged incident of racial harassment was arbitrary and capricious, in violation of the Administrative Procedure Act, 5 U.S.C. § § 701 et seq. (" the APA" ), and deprived Plaintiff of both procedural and substantive due process, in violation of the Fifth Amendment to the United States Constitution. Defendants move to dismiss Plaintiff's APA and Fifth Amendment claims on the ground that Plaintiff lacks standing to assert them. Defendants also move to dismiss Plaintiff's APA claims on the ground that the APA bars their review by this Court, as OCR's issuance of the Letter of Findings was not final agency action. For the following reasons, Defendants' Motion To Dismiss is granted.
A. Factual Background
The following facts are taken from the allegations contained in Plaintiff's Amended Complaint, which allegations the Court accepts as true for the purpose of deciding Defendants' Motion to Dismiss. On February
23, 2011, OCR received a complaint against Plaintiff, in which the complainant " alleged . . . that [Plaintiff] discriminated against her son . .., a student at Ardsley High School and a member of the Ardsley [High School] basketball team, on the basis of his race." (Am. Compl. ¶ ¶ 6-7 (Dkt. No. 20).) Specifically, the complainant alleged that Plaintiff " failed to appropriately respond to an incident of racial harassment which allegedly occurred" approximately one week earlier, on February 18, 2011, " at a basketball game played at Pearl River High School between the Pearl River High School team and the Ardsley High School team," at which " a spectator alleged[ly] yelled a racial slur as the [complainant's son] came onto the basketball court to play in the game." ( Id. ¶ 7.)
In response, Plaintiff conducted what it describes in its Amended Complaint as " a prompt and comprehensive investigation into the allegations made by the [c]omplainant," " which included [Plaintiff] interviewing 31 witnesses and viewing a video recording of the basketball game." ( Id. ¶ 8.) These 31 interviewees included students, staff, and coaches from within the school district, as well as staff from Ardsley High School, the referees from the game, and other members of the community. ( Id. ) However, according to Plaintiff, its " investigation revealed no credible evidence suggesting that an incident of racial harassment had occurred," as " [n]one of the witnesses heard the alleged racial slur uttered, and the slur could not be detected on the video recording of the basketball game." ( Id. ¶ 9.)
On March 10, 2011, OCR notified Plaintiff by letter that " it was opening an investigation regarding [the complainant's] allegation" " in accordance with its duties to enforce Title VI of the Civil Rights Act of 1964 . . . and its implementing regulation[s] . .., which prohibit discrimination on the basis of race, color or national origin in programs and activities receiving financial assistance from the U.S. Department of Education." ( Id. ¶ 10.) Plaintiff reproduced portions of that letter in its Amended Complaint:
Please note that opening the allegation for investigation in no way implies that OCR has made a determination with regard to its merits. During the investigation, OCR is a neutral fact-finder, collecting and analyzing relevant evidence from the complainant, the recipient, and other sources, as appropriate. OCR will ensure that its investigation is legally sufficient and is dispositive of the allegations, in accordance with the provisions of Article III of OCR's Case Processing Manual.
. . . .
Also, when appropriate, a complaint may be resolved before the conclusion of investigation after the recipient expresses an interest to OCR to resolve the complaint. In such cases, OCR obtains a resolution agreement signed by the recipient. This agreement must be aligned with the complaint allegations or the information obtained during the investigation, and it must be consistent with applicable regulations.
( Id. (emphasis removed).)
OCR also provided Plaintiff with " a copy of the OCR Complaint Processing Procedures," from which much of the language from OCR's March 10 letter appears to have been drawn:
A complaint may also be resolved before the conclusion of the investigation, if the recipient expresses an interest in resolving the complaint. If OCR determines that the resolution of the complaint before the conclusion of the investigation is appropriate, OCR will attempt to negotiate an agreement with the recipient. OCR will notify the complainant of the recipient's request of the complaint and
will keep the complainant informed throughout all stages of the resolution process. The provisions of the resolution agreement that is reached must be aligned with the complaint allegations and the information obtained during the investigation, and must be consistent with applicable regulations. A resolution agreement reached before the conclusion of the investigation will be monitored by OCR.
( Id. ¶ 11 (emphasis removed).)
The Complaint Processing Procedures also state the following:
If OCR determines that a recipient failed to comply with one of the civil rights laws that OCR enforces, OCR will contact the recipient and will attempt to secure the recipient's willingness to negotiate a voluntary resolution agreement. If the recipient agrees to resolve the complaint, the recipient will negotiate and sign a written resolution agreement that describes the specific remedial action that recipient will undertake to address the area(s) of noncompliance identified by OCR. The terms of the resolution agreement, if fully performed, will remedy the identified violation(s) in compliance with applicable civil rights laws. OCR will monitor the recipient's implementation of the terms of the resolution agreement to verify that the remedial actions agreed to by the recipient have been implemented consistent with the terms of the agreement and that the area(s) of noncompliance identified were resolve [sic] consistent with applicable civil rights laws.
If the recipient refuses to negotiate a voluntary resolution agreement or does not immediately indicate its willingness to negotiate, OCR will inform the recipient that it has 30 days to indicate its willingness to engage in negotiations to voluntarily resolve identified areas of noncompliance, or OCR will issue a Letter of Findings to the parties providing the factual and legal bases for a finding noncompliance [sic].
( Id. ¶ 13 (emphasis removed).)
After receiving the March 10, 2011 letter, Plaintiff contacted OCR Compliance Team Investigator Geraldo Perez (" Mr. Perez" ), in order " to express [Plaintiff's] interest in resolving the complaint through execution of a resolution agreement in accordance with Sections 302 and 304 of the OCR Case Processing Manual" (" the CPM" ). ( Id. ¶ 14 (emphasis removed).) Plaintiff noted that its " interest in resolving the complaint through execution of a resolution agreement" was " notwithstanding its strong belief that its comprehensive investigation yielded no credible evidence suggesting that the alleged incident occurred." ( Id. ¶ 15.)
Section 302, the first section of the CPM that Plaintiff cited, reads in part as follows:
A complaint may be resolved at any time when, before the conclusion of an investigation, the recipient expresses an interest in resolving the complaint. OCR should inform the recipient that this process is voluntary. OCR's determination that it is appropriate to resolve the complaint during the course of an investigation must be approved by the Office Director or designee. If approved, OCR will immediately notify the complainant of the recipient's interest in resolving the complaint and will keep the complainant informed throughout all stages of this resolution process. The provisions of the resolution agreement will be aligned with the complaint allegations or the information obtained during the investigation, and will be consistent with applicable regulations. A copy of the resolution agreement will be included with the resolution letter. Resolution
letters and agreements must be approved by the Chief Attorney or designee and the Office Director or designee, in consultation with the Enforcement Director.
( Id. ¶ 17.)
Section 304, the second such section, includes the following language:
The complaint will be considered resolved and the recipient deemed compliant if the recipient enters into an agreement that, fully performed, will remedy the complaint (pursuant to Section 302) or identified violations (pursuant to Section 303). A copy of the agreement will be included with the resolution letter (if obtained during the investigation, pursuant to Section 302) or letter of finding(s) (if obtained after a compliance determination is made at the end of the investigation, pursuant to Section 303). Resolution agreement planning will be documented in the case file either separately or by reference to the resolution agreement.
( Id. ¶ 18 (emphasis removed).)
On September 29, 2011, Plaintiff " forwarded to all three OCR team members [who] had been involved in the matter as of that date," including Mr. Perez, Compliance Team Attorney Raghavan Pranita (" Ms. Pranita" ), and Compliance Team Leader Erin Gimbel (" Ms. Gimbel" ), " a proposed copy of the proposed resolution agreement." ( Id. ¶ 19.) In the same email, Plaintiff also " challenged a statement made by Ms. [sic] Perez to the effect that [Plaintiff's] Superintendent of Schools Dr. Auriemma [(" Dr. Auriemma" )] had allegedly stated that three adults had communicated to him that they had heard a racial slur at the . . . basketball game." ( Id. ) Plaintiff informed OCR that Dr. Auriemma " had advised that he had never made any such statement and that such communications to him had, in fact, not occurred." ( Id. ) Later that same day, Ms. Gimbel advised
Plaintiff " that OCR's notes from its interview of Dr. Auriemma would be reviewed." ( Id. ¶ 20.) In response, in a second email to OCR, Plaintiff " noted that [Plaintiff's] Board of Education felt strongly that [Plaintiff] had done nothing wrong and was not prepared to agree to take action that would send a message that [Plaintiff] acknowledged having done anything wrong and made clear that [Plaintiff] would like to 'cooperatively resolve this matter.'" ( Id. ¶ 21.)
Plaintiff and OCR eventually entered into a Resolution Agreement on November 15, 2011, " whereby [OCR] and [Plaintiff] agreed to 'resolve the compliance concerns' regarding the complaint." ( Id. ¶ 22.) Pursuant to the Resolution Agreement, Plaintiff " assure[d] [OCR] that it [would] take the actions detailed below" :
By November 30, 2011, [Plaintiff] will conduct further investigation to determine the source of the alleged racial slur made during the basketball game on February 18, 2011; including but not limited to, attempting to interview the complainant, the [complainant's son], and other witnesses identified by the complainant and the [complainant's son], and interviewing at least five additional student witnesses who were located in or near [Plaintiff's] student section during the game. If the investigation reveals the identity of the alleged harasser(s), [Plaintiff] will take prompt and effective steps reasonably calculated to end the harassment, and prevent the harassment from recurring. [Plaintiff]
will notify the complainant of the outcome.
. . . . By December 15, 2011, [Plaintiff] will provide OCR with a copy of the investigative report, including a description of any action taken if the investigation reveals the identity of the alleged harasser(s). Additionally, [Plaintiff] will provide OCR with documentation demonstrating that [Plaintiff] notified the complainant of the outcome of the investigation.
. . . .
By December 14, 2011, [Plaintiff] will review and revise, as necessary, its harassment policy and related grievance procedures to address complaints of harassment based on race, color and national origin. These procedures will provide for the prompt and equitable resolution of complaints of harassment based on race, color and national origin. The procedures will include at a minimum [a number of requirements described in the Resolution Agreement.]
. . . .
Once revised, [Plaintiff] will utilize its on-going training programs that raise awareness of the issue of harassment for staff and students, to ensure that staff and students are aware of these revised policies and procedures and the prohibition against racial harassment.
. . . .
By December 14, 2011, [Plaintiff] will provide its revised harassment policy and any related grievance procedures to OCR for review and concurrence.
Within fifteen (15) days of [Plaintiff's] receipt of OCR's concurrence with respect to the revised policy and any grievance procedures, [Plaintiff] will provide OCR with documentation to substantiate that it has formally adopted the revised policy and procedures; updated its printed publications and on-line publications with the revised policy and procedures (inserts may be used pending reprinting of these publications in the 2012-13 school year); electronically disseminated the revised policy and grievance procedures to those high school students, parents, and . . . staff that [Plaintiff] has e-mails for, and mailed copies of the revised Code of Conduct pages to high school parents. This documentation will include at a minimum (i) printouts or a link to all on-line publications containing the revised policy and grievance procedures; (ii) evidence of the electronic dissemination of the revised policy and grievance procedures to high school students, parents and . . . staff, as described [in the Resolution Agreement]; and (iii) if not yet finalized, copies of inserts for printed publications.
By January 1, 2012, [Plaintiff] will provide to OCR copies of the printed versions of all publications disseminated to high school students, parents, and . . . staff containing the revised policy and grievance procedures.
(Resolution Agreement (Nov. 15, 2011) (" Resolution Agreement" ) 1-3.)
The Resolution Agreement further provided that Plaintiff " understands that OCR will not close the monitoring of this agreement until OCR determines that the recipient has fulfilled the terms of this agreement and is in compliance with the regulation . . . at issue in this case" ; that Plaintiff " understands that by signing this agreement, it agrees to provide data and other information in a timely manner in accordance with the reporting requirements of this agreement" ; and that " during the monitoring of this agreement, if necessary, OCR may visit [Plaintiff], interview staff and students, and request such additional reports or data as are necessary for OCR to determine whether [Plaintiff] has fulfilled the terms of this agreement and is in compliance with the regulation . . . at issue in this case." ( Id. at 3.) Importantly, the Resolution Agreement also stated that its execution " does not constitute an admission that [Plaintiff] has committed any violation of Title VI or its implementing regulations. Nor does execution of this Resolution Agreement constitute any admission of other wrongdoing by [Plaintiff]." ( Id. ) The events giving rise to the instant Action took place two days after the Resolution Agreement was executed. On November 17, 2011, OCR " notif[ied] [Plaintiff] of the determination made by [OCR] regarding the . . . complaint filed against [Plaintiff]" in a Letter of Findings, which stated the following:
In its investigation, OCR reviewed documentation the complainant and [Plaintiff] provided. OCR also interviewed the complainant, the [complainant's son], staff from Pearl River, coaching staff from Ardsley School District (Ardsley), and other witnesses to the alleged incident. In addition, OCR reviewed a video recording of the basketball game, held on February 18, 2011.
. . . .
. . . OCR determined that there was sufficient evidence to conclude that the incident occurred as alleged. OCR further determined that [Plaintiff] had actual notice of the incident and promptly investigated the incident; however, OCR determined that [Plaintiff's] investigation was incomplete and insufficient. Specifically, [Plaintiff] did not attempt to interview more than three students to determine the source of the slur, even though [Plaintiff] was advised that the slur originated from the section of the bleachers where [Plaintiff's] students were seated. Further, [Plaintiff] did not interview the complainant, the [complainant's son], or any of the witnesses who advised [Plaintiff] that they heard the racial slur, and could have provided more information to assist [Plaintiff] in identifying the source of the slur.
[Plaintiff] executed the . . . Resolution Agreement to resolve this complaint. OCR will monitor [Plaintiff's] implementation of the Resolution Agreement. Please be advised that if [Plaintiff] fails to comply with its terms, OCR will resume its investigation of this complaint.
This letter sets forth OCR's determination in an individual OCR case. This letter is not a formal statement of OCR policy and should not be relied upon,
cited, or construed as such. OCR's formal policy statements are approved by a duly authorized OCR official and made available to the public. The complainant may have the right to file a private suit in federal court whether or not OCR finds a violation.
. . . .
Under the Freedom of Information Act, 5 U.S.C. § 552, it may be necessary to release this letter and related correspondence and records upon request. In the event that OCR receives such a request, it will seek to protect to the extent provided by law, personally identifiable information that if released could constitute an unwarranted invasion of personal privacy.
(Decl. of Ellen Blain in Supp. of Mot. To Dismiss, Ex. A (" Letter of Findings" ), at 1-4.)
Three days after OCR issued the Letter of Findings, Plaintiff " notified [OCR] of its demand that the Letter of Findings be 'recalled, rescinded and otherwise repudiated and that the matter be closed through the issuance of the Resolution Letter.'" (Am. Compl. ¶ 36.) Although OCR did not take this requested action, it " determined that [Plaintiff] complied with every requirement of the . . . Resolution Agreement, concluded its monitoring of the agreement, and closed the case against [Plaintiff]" by letter dated March 6, 2012. ( Id. ¶ 39.)
According to Plaintiff, to date, OCR has " refused to rescind its determination and finding in the Letter of Findings that there was sufficient evidence to conclude that the incident occurred on February 18, 2011 as alleged by the [c]omplainant and that [Plaintiff's] investigation of the [c]omplainant's allegations was incomplete and insufficient." ( Id. ¶ 40.) Plaintiff alleges that " [t]he contents and substance of the Letter of Findings is defamatory and has caused [Plaintiff] profound embarrassment," and " has degraded [Plaintiff's] reputation for being efficient, fair-minded and race-neutral in the performance of its obligations as a school district with a substantially Caucasian student and staff population towards its minority students and their parents, including in its investigation of claims of racial harassment as against African-American students." ( Id. ¶ 43.) Plaintiff further alleges that the Letter of Findings " was provided to the [c]omplainant by [Defendants]," and that " the substance of the contents of the Letter of Findings . . . were published in local newspapers and have consequently become a matter of public knowledge in the community served by [Plaintiff] as well as the public in general." ( Id. ¶ 42.)
Based on the foregoing allegations, Plaintiff asserts two different grounds for relief. First, Plaintiff claims that the determinations in OCR's Letter of Findings were " arbitrary, capricious, an abuse of discretion, without the observance of the procedures required by law and otherwise not in accordance with law and should be set aside by this Court" under the APA. ( Id. ¶ 49.) Second, Plaintiff claims that such determinations " deprived [it] of both
procedural and substantive due process in violation of the [Fifth] Amendment to the United States Constitution." ( Id. ¶ 51.) Plaintiff asks that the Court " compel [OCR] to withdraw and rescind their determination that 'the incident occurred as alleged' and that [Plaintiff's] 'investigation was incomplete and insufficient,'" and that the Court " grant [Plaintiff] such other and further relief as the Court may deem just and proper, including an award of [Plaintiff's] reasonable attorney fees and costs pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412." ( Id. ¶ ¶ 51(1)-(2).)
B. Procedural Background
Plaintiff filed its original Complaint on April 13, 2012. ( See Dkt. No. 1.) On January 4, 2013, Defendants filed a Motion To Dismiss, in which they argued that, because the Letter of Findings was not " final agency action," the APA precluded its review. ( See Dkt. Nos. 9-11.) Plaintiff filed its Opposition to Defendants' Motion on January 23, 2013, ( see Dkt. Nos. 12-13), to which Defendants replied on March 15, 2013, ( see Dkt. No. 15).
However, before the Court decided Defendants' Motion, it issued an Order, in keeping with its " independent obligation to consider the presence or absence of subject matter jurisdiction sua sponte," directing the Parties to " file supplemental briefs with the Court addressing the issue of Plaintiff's standing." (Order (Apr. 30, 2013) (Dkt. No. 16).) Following the Parties' submission of responsive memoranda, the Court issued a second Order:
In its supplemental brief on standing, Plaintiff focused on establishing that the reputational injury [that it allegedly suffered] qualifies as an injury in fact for purposes of establishing [Plaintiff's] standing to challenge the Defendants' action through the instant case, and Plaintiff asserted no other basis for standing. However, Plaintiff's Complaint does not include any allegations with respect to reputation. A plaintiff may not rely on an unpled injury to establish standing. Accordingly, because the Complaint includes no allegations of reputational injury, or any other injury in fact, the Court finds that Plaintiff has failed to meet its burden of establishing standing.
However, the Court notes that in certain circumstances, reputational injury may be sufficient to establish standing.
Therefore, the Complaint is dismissed without prejudice, and Plaintiff is granted leave to file an amended complaint alleging an injury . . . . Because the Court has dismissed the Complaint on standing grounds, Defendants' motion to dismiss on the basis of APA finality is moot and denied without prejudice.
(Order (June 5, 2013) (alterations, citations, and internal quotation marks omitted) (Dkt. No. 19.).) Pursuant to this Order, Plaintiff filed an Amended Complaint on June 20, 2013. ( See Dkt. No. 20.) Defendants filed a second Motion To Dismiss on September 23, 2013, ( see Dkt. Nos. 30-32), to which Plaintiff responded the following day, ( see Dkt. No. 33). Defendants then replied on October 30, 2013, ( see Dkt. No. 36), at which point Defendants' Motion was fully submitted. The Court held oral argument on August 7, 2014.
A. Standard of Review
Defendants move to dismiss Plaintiff's Amended Complaint on two separate grounds. First, they argue that Plaintiff lacks standing. ( See Defs.' Mem. in Supp. of Mot. To Dismiss (" Defs.' Mem." ) 12-17.) Second, they make substantially the same argument that they made in their Motion To Dismiss Plaintiff's original Complaint--that the APA precludes the Court's review
of the Letter of Findings, because the Letter of Findings did not constitute final agency action. ( See id. at 17-25.) Defendants ground this second argument in Section 704 of the APA, which provides that " final agency action for which there is no other adequate remedy in a court [is] subject to judicial review," but that " [a] preliminary, procedural, or intermediate agency action or ruling" is subject to challenge only " on the review of the final agency action." 5 U.S.C. § 704; see also Nat'l Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 659, 127 S.Ct. 2518, 168 L.Ed.2d 467 (2007) (" The federal courts ordinarily are empowered to review only an agency's final action . . . ." ); Shakhnes v. Berlin, 689 F.3d 244, 260 (2d Cir. ...