Arthur O. Phaneuf, A.O. Phaneuf & Son Funeral Home & Crematorium, Inc. v. New Hampshire Bd. of Registration of Funeral Dirs. & Embalmers

• Decision Date: 03 April 2017
• Docket Number: No. 2012-CV-658,2012-CV-658
• Parties: Arthur O. Phaneuf, A.O. Phaneuf & Son Funeral Home and Crematorium, Inc., and Crematorium Society of New Hampshire, Inc. v. New Hampshire Board of Registration of Funeral Directors and Embalmers, Susan A. Simonds, Thomas G. Janosz and Bryan S. Gould, individually and as members of the New Hampshire Board of Registration of Funeral Directors and Embalmers
• Court: New Hampshire Superior Court

Arthur O. Phaneuf, A.O. Phaneuf & Son Funeral Home and Crematorium,Inc., and Crematorium Society of New Hampshire, Inc. v. New Hampshire Board of Registration of Funeral Directors and Embalmers,Susan A. Simonds, Thomas G. Janosz and Bryan S. Gould, individuallyand as members of the New Hampshire Board of Registration of Funeral Directors and Embalmers

No. 2012-CV-658

State of New Hampshire MERRIMACK, SS SUPERIOR COURT

April 3, 2017

ORDER

Plaintiffs, Arthur O. Phaneuf, a licensed funeral director, and A. O. Phaneuf & Son Funeral Homes and Crematorium Society of New Hampshire, Inc., two corporations controlled by Phaneuf which provide funeral services in New Hampshire (collectively "Phaneuf"), brought this action against the New Hampshire Board of Registration of Funeral Directors and Embalmers (Board") and its individual members Susan A. Simonds ("Simonds"), Thomas A. Janosz ("Janosz") and Bryan S. Gould ("Gould"), (collectively "Board Members"). Plaintiffs have brought an action for declaratory judgment, damages and attorney's fees pursuant to 42 U.S.C. § 1983 and RSA 491:14 and :21. Defendants have moved to dismiss. For the reasons stated in this Order, Defendants' Motion to Dismiss is GRANTED.

I

The procedural posture of this case is unusual. It was brought in 2012, when the Plaintiffs sought a Temporary Restraining Order and Preliminary Injunction based upon the institution of a disciplinary action against him by the Board. In November 2012, this Court denied the request for injunctive relief, noting that the proceedings that the Plaintiff sought to enjoin had already concluded. The Court noted that although the disciplinary proceedings against him had concluded, Plaintiffs had advised the Court that he intended to appeal the results of the termination, making many of the same claims he made in this case, to the New Hampshire Supreme Court. Plaintiffs did appeal to the New Hampshire Supreme Court, and in February 2013 this Court ordered that all proceedings be stayed until resolution of the Supreme Court appeal of the disciplinary action taken by the Board against Plaintiff. In August 2015, the parties advised this Court that the proceedings in the New Hampshire Supreme Court had concluded and the case had been remanded.¹ The Court lifted the stay imposed in the case and ordered that the case proceed in the usual course. However, the case did not proceed. In February 2016, the parties filed an assented Motion to Stay, citing ongoing settlement negotiations. The Court stated that:

While the Court encourages resolution of this matter by agreement, it is not possible to simply stay this case indefinitely. The Court recommends that the parties enter into a tolling agreement, to stop the statute of limitations from running and simply dismiss the case without prejudice. The Motion to Stay is denied without prejudice.

(Order, Feb. 8, 2016.)

After what appears to be more fitful and eventually nonproductive negotiations, the Plaintiffs finally filed an Amended Complaint on June 1, 2016. Defendants moved to dismiss; the Court did not act on the Motion because the parties informed the Court they were still negotiating. Another status conference was held on August 30, 2016, and theCourt ordered that by October 1, 2016 the parties shall advise the Court if they have been able to reach a resolution and if not, Plaintiffs shall file the further amendment he had proposed at the status conference.

On September 26, 2016 Plaintiffs filed yet another Amended Complaint, adding three individuals who had never been named in the initial action, Morgan J. Edgerly, Randy S. Gordon, Esq. and Carl A. Michaud, Esq. and adding the three individuals who had been sued in 2012, but who had been dropped from the Complaint in June 2016, Simonds, Janosz and Gould. Plaintiffs also added a new count for violation of State and federal antitrust law. By Order of January 9, 2017, the Court granted the Motion to allow Phaneuf to sue the Board members who had been originally named in 2012, but denied the Motion with respect to Edgerly, Gordon and Michaud. The Court also denied the Motion to Amend to add a claim of violation of State and federal antitrust law. Defendants now move to dismiss the entire Amended Complaint. For the reasons stated in this Order, the Motion is GRANTED.

II

When ruling on a Motion to Dismiss, the Court must determine whether the allegations stated in the Complaint "are reasonably susceptible of a construction that would permit recovery." Plourde Sand & Gravel v. JGI Eastern, Inc., 154 N.H. 791, 793 (2007) (quoting Berry v. Watchtower Bible & Tract Soc'y of N.Y., Inc., 152 N.H. 407, 410 (2005)). In doing so, the Court must "assume all facts pled in the plaintiff's writ are true, and . . . construe all reasonable inferences drawn from those facts in the plaintiff's favor." Id. (quoting Berry, 152 N.H. at 410). However, the Court need not "assume thetruth of statements . . . that are merely conclusions of law" not supported by predicate facts. Gen. Insulation Co. v. Eckman Constr., 159 N.H. 601, 611-12 (2010). The Court tests these facts against the applicable law and will deny the motion to dismiss "[i]f the facts as alleged would constitute a basis for legal relief." Starr v. Governor, 148 N.H. 72, 73 (2002).

Plaintiffs complain that the former board members, who adjudicated a dispute against him involving a client named Robert Holmes (the "Holmes Complaint") were biased and therefore he did not receive a fair and impartial adjudication of the matter in violation of his due process rights:

31. Board members Thomas Janosz, Bryan Gould, Susan Simonds Morgan Edgerly and Carl Michaud, all of whom are funeral directors and direct competitors of the plaintiff's, have each demonstrated bias against Mr. Phaneuf through various actions and words, sometimes pursuant to the Board, and sometimes independent of board activities.

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41. The Holmes Complaint was heard May 16, 2012 before biased Board members Bryan Gould, Morgan Edgerly, and then Board chair Susan Simonds. The Board's prosecutor was Attorney Randy Gordon, the only Board Member not a funeral director and a competitor of Mr. Phaneuf, who recommended prosecution based on his admittedly inadequate investigation, prepared the charges against Mr. Phaneuf on behalf of the biased Funeral Board, and presented the evidence to biased Board members sitting in judgment.

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87. The Defendants violated 42 U.S.C.§ 1983 by not demonstrating impartiality and by demonstrating hostility and prejudgment in a manner that deprived of the Plaintiffs equal protection under the law and deprived them of a fair hearing on the Holmes Complaint against Arthur Phaneuf.

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93. The Defendants denied the Plaintiffs' due process by impaneling biased, partial and prejudiced Board members to rule on the October 2011 Complaint.

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104. The participation of biased Board Members Bryan Gould, Morgan Edgley and Susan Simonds in judging Mr. Phaneuf for disciplinary action prosecuted by biased Board member Randy Gordon in the Holmes matter was a violation of the Plaintiff's due process rights under the State and Federal Constitutions.

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113. The biased Board Members participated in all aspects of the disciplinary proceeding against Plaintiffs.

(Compl. ¶¶ 31, 41, 87, 93, 113.)

III

Plaintiffs seek damages from the Board that ruled against them in the Holmes matter pursuant to 42 U.S.C. § 1983. State courts have jurisdiction over claims brought pursuant to 42 U.S.C. § 1983, and the availability of immunity to such claims is governed by federal law. Martinez v. California, 444 U.S. 277, 284 n. 8 (1980). Under federal law, neither a State agency nor a state official acting in his official capacity may be sued for damages in a §1983 case. Wang v. N.H. Bd. of Regis. in Med., 55 F.3d 698, 700-01 (1st Cir. 1995). Therefore, Phaneuf's action against the Board members must be construed to be an action brought against them in their individual capacities.

A

Almost 150 years ago, the United States Supreme Court stated that absolute judicial immunity has been the settled doctrine in Anglo-Saxon courts for many years and "has never been questioned." Bradley v. Fisher, 80 U.S. 335, 347 (1872). The Court recognized that in every adjudication there is one losing party who "would accept anything but the soundness of the decision in explanation of the action of the judge." Bradley Fisher, 80 U.S. at 348. A little more than 100 years later, in Butz v. Economou, 438 U.S. 478 (1977), the Court held that "adjudication within a federal administrative agency shares enough of the characteristics of the judicial process that those who participate in such adjudication should also be immune from suits for damages." Id. at 512-13.

Lower federal courts have applied the rule of Butz v. Economou to State agencies which regulate professions in actions brought pursuant to 42 U.S.C § 1983. Absoluteimmunity bars claims for damages based against Board members acting in quasi judicial capacities. Bettencourt v. Mass. Bd. of Regis. in Med., 904 F.2d 772, 782-85 (1st Cir. 1989). The immunity applies "no matter how erroneous the act may have been, how injurious its consequences, how informal the proceeding, or how malicious the motive." Cok v. Constentino, 876 F.2d 1, 2 (1^st Cir. 1989).

The United States Court of Appeals for the First Circuit has articulated a functional test to determine whether or not absolute immunity is appropriate. Destek Group, Inc. v. State of N.H., 318 F.3d 32, 41 (1st Cir. 2003). To determine whether quasi-judicial immunity should attach, a court must apply a three-part test:

First, do [the commissioners], like... judge[s], perform a traditional "adjudicatory" function, in that they decide facts, apply law and otherwise resolve disputes on the merits (free from direct political influence)? Second, do [the commissioners], like... judge[s], decide cases sufficiently controversial that, in the absence of absolute immunity they would be subject

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