Belcher v. Ohio Department of Human Services

• Citation: 48 F.Supp.2d 729
• Decision Date: 09 June 1999
• Docket Number: No. 97CV00530.,97CV00530.
• Parties: Margaret BELCHER, et al., Plaintiffs, v. OHIO DEPARTMENT OF HUMAN SERVICES, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

48 F.Supp.2d 729

Margaret BELCHER, et al., Plaintiffs, v. OHIO DEPARTMENT OF HUMAN SERVICES, et al., Defendants.

No. 97CV00530.

United States District Court, S.D. Ohio, Eastern Division.

June 9, 1999.

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Christopher King, Columbus, OH, for plaintiffs.

Bonnie Linda Maxton, Jeffrey Lynn Glasgow, Anne E. Thomson, Franklin County Prosecutor's Office, Columbus, OH, for defendant.

ORDER

MARBLEY, District Judge.

This matter is before the Court on Defendant Franklin County Department of Human Services' ("Defendant") Motion for Summary Judgment.¹ Plaintiff, Margaret Belcher, individually and on behalf of Kiddies Kastle, Inc., brings this action alleging violations of her civil rights under 42 U.S.C. §§ 1981 and 1983, and the Age Discrimination in Federally Assisted Programs Act, 42 U.S.C. § 6101, et seq. Plaintiff also alleges claims for state law discrimination pursuant to Ohio Revised Code § 4112 et seq., common law breach of contract, defamation, and infliction of emotional distress. For the following reasons, Defendant's Motion is GRANTED in part and DENIED in part.

II. FACTS

Kiddies Kastle, Inc., a day care provider for low income children in Columbus, was formed in 1969 by Margaret Belcher, the owner and operator of the center. Defendant Franklin County Department of Human Services is a recipient of Federal Block Grant funding, and contracts with licensed day care centers to provide subsidized child care. The subsidy contracts that the Defendant issues are referred to as Title XX contracts. Pursuant to OHIO REV.CODE § 5104.34(a)(1), Defendant is required to establish eligibility requirements for awarding Title XX contracts. Day care centers awarded Title XX contracts are reimbursed a percentage of their expenses allocated for child day care services. To receive a Title XX contract, applicants must meet both state and federal licensing requirements.

Beginning in the late 1970's, Plaintiff began applying for Title XX contracts with Defendant. For unexplained reasons during the 1970's, 1980's, and early 1990's, Plaintiff's applications for Title XX contracts were denied. At oral argument, Defendant's counsel was unaware of the reason that Plaintiff was denied Title XX contracts. Plaintiff contends that the nearly two decades of Title XX contract denial was based on unlawful racial animus.

In 1993, however, Plaintiff was awarded the first of three Title XX contracts by Defendant, the last of which having an effective date of July 1, 1995, through June 30, 1997. After receiving her first Title XX contract in 1993, Plaintiff was excluded from a roster of available facilities that Defendant sent to a large potential client base. Plaintiff maintains that Defendant intentionally excluded her from the roster and that this exclusion caused substantial harm to her facility. In addition, Plaintiff contends that in 1996 a potential client who desired to enroll at Plaintiff's facility was discouraged from doing so by Defendant, and that the potential client was sent to Middlebrook Day Care Center, a Caucasian facility located across the street from Plaintiff's center. Plaintiff also maintains that Defendant intentionally published and circulated false rumors of child abuse, general incompetence, and other negative conditions at Plaintiff's center. The record is unclear as to where and to whom these rumors were circulated.

Finally, Plaintiff contends that the Ohio Department of Health and Human Services (ODHS) and Defendant did not apprise her of her right to bring civil rights claims in relation to the Title XX contracts, as required by 45 C.F.R. §§ 80.4(b)(2) and 80.6(d). In connection with this failure of notice, Plaintiff filed a complaint with the United States Department of Health and Human Services, Office for Civil Rights (USHHS). USHHS initiated an investigation and found that ODHS was in violation of the regulations. Plaintiff and ODHS entered into a resolution agreement which detailed the violations and outlined the remedies thereto. Although Defendant was named in Plaintiff's complaint to USHHS, Defendant was not actually a party to the investigation or the resolution agreement. It is clear, however, that Defendant is obligated to give notice under 45 C.F.R. §§ 80.4(b)(2) and 80.6(d).²

On April 29, 1997, Defendant gave notice of its intention to terminate Plaintiff's Title XX contract. The reason Defendant gave for terminating the contract was that enforcement proceedings were initiated against Plaintiff's facility by ODHS for alleged noncompliance with Revised Code § 5101.³ Defendant contends that it is its policy to terminate all contracts with day care centers, whether minority or majority owned, once Defendant learns that enforcement proceedings have been initiated against that center.⁴ Plaintiff retained her license throughout and after the enforcement proceedings. Plaintiff has been unsuccessful, however, in having her Title XX contract reinstated since its termination in 1997.

III.

Under FED.R.CIV.P. 56(c), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." FED.R.CIV.P. 56(c). The movant has the burden of establishing that there are no genuine issues of material fact, which may be accomplished by demonstrating that the nonmoving party lacks evidence to support an essential element of its case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., L.P.A., 12 F.3d 1382, 1388-89 (6th Cir.1993). The non-moving party must then present "significant probative evidence" to show that "there is [more than] some metaphysical doubt as to the material facts." Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 339-40 (6th Cir.1993). "[S]ummary judgment will not lie if the dispute is about a material fact that is `genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (summary judgment appropriate when the evidence could not lead a trier of fact to find for the non-moving party).

In evaluating a motion for summary judgment the evidence must be viewed in the light most favorable to the non-moving party. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient; there must be evidence on which the jury could reasonably find for the non-moving party. See Anderson, 477 U.S. at 251, 106 S.Ct. 2505; see also Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir.1995).

IV.

1. Plaintiffs' § 1981 Claim

42 U.S.C. § 1981 provides that "[a]ll persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens[.]" The same evidentiary framework applicable to Title VII cases, the McDonnell Douglas framework, also governs § 1981 claims. See Patterson v. McLean Credit Union, 491 U.S. 164, 186, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989); Mitchell v. Toledo Hosp., 964 F.2d 577, 582 (6th Cir.1992).

Under the McDonnell Douglas burden-shifting principle, a plaintiff bears the burden of establishing by a preponderance of the evidence a prima facie case and creating a presumption of discrimination by demonstrating: (1) membership in the protected class; (2) that she suffered from an adverse action; (3) that she was qualified for the position; and (4) that she was treated differently from similarly situated members of the unprotected class. See Mitchell, 964 F.2d at 582-83 (citing McDonnell Douglas, 411 U.S. 792, 802, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)). Once the plaintiff establishes a prima facie case, a defendant may offer any legitimate, non-discriminatory reason for the action, which the plaintiff may rebut by evidence of pretext; however, the burden of proof always remains with the plaintiff. See id. (citing St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993)).

Although Plaintiff's lawyer has not attempted to show a prima facie case of race discrimination under § 1981, a liberal reading of the undisputed facts discussed in the pleadings, in a light most favorable to Plaintiff's case, establishes Plaintiff's initial burden of proof. See Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) (the initial burden is not an onerous burden).

First, it is clear that Plaintiff, an African American woman, is a member of a protected class. Second, Plaintiff suffered an adverse action by not receiving the desired Title XX contracts prior to 1993, and also by having her contract terminated in 1997. Third, although disputed at various times, Plaintiff, a Meharry Medical College School of Nursing graduate and licensed day care provider, was qualified to receive the Title XX contracts. Fourth, there is evidence in the record that Plaintiff was treated differently from similarly situated members of the unprotected class. For example, it is undisputed that unprotected child care facilities operated by non-minorities were granted Title XX contracts during the 1970's, 1980's, and early 1990's, while Plaintiff was not.

If a plaintiff establishes a prima facie case, the burden shifts to the defendant to offer a legitimate, non-discriminatory reason for the alleged adverse action. See Mitchell, 964 F.2d at 582-83. Here Defendant has not offered a legitimate reason for refusing to enter into contracts with Plaintiff prior to 1993....