Carepartners, LLC v. Lashway

• Decision Date: 25 September 2008
• Docket Number: No. 07-35125.,07-35125.
• Citation: 545 F.3d 867
• Parties: CAREPARTNERS LLC, limited liability corporation under the Laws of the State of Washington doing business as Alderwood Assisted Living; Carepartners Management, limited liability corporation under the Laws of the State of Washington doing business as Alderwood Assisted Living; Joseph Kilkelly and Laura Kilkelly, owners of CarePartners, LLC, individually and on behalf of their marital community, Plaintiffs-Appellees, v. Pat LASHWAY, Director of Residential Care of Services for the Washington State Department of Social and Health Services (DSHS) in her individual capacity; Nancy Tyson, Boarding Home Enforcement Officer, for Residential Care Services and Aging Adult Services for DSHS, in her individual capacity; Joyce Stockwell, an employee of DSHS in her individual capacity; Robert McClintock, Regional Administrator for DSHS in his individual capacity also known as Bob McClintock; Julie Lord, Licensing Field Manager for Residential Care Services for DSHS in her individual capacity; Kathryn Webb, Lead Field Inspector for Residential Care Services for DSHS in her individual capacity; Mary Corso, formerly the Fire Marshal for the State of Washington in her individual capacity; Roger Woodside, Assistant State Fire Marshal for the State of Washington in his individual capacity; Ed Borgatti, Chief Deputy State Fire Marshal for the State of Washington in his individual capacity; Michael Sturgeon, Deputy Fire Marshal for the State of Washington in his individual capacity, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

545 F.3d 867

CAREPARTNERS LLC, limited liability corporation under the Laws of the State of Washington doing business as Alderwood Assisted Living; Carepartners Management, limited liability corporation under the Laws of the State of Washington doing business as Alderwood Assisted Living; Joseph Kilkelly and Laura Kilkelly, owners of CarePartners, LLC, individually and on behalf of their marital community, Plaintiffs-Appellees, v. Pat LASHWAY, Director of Residential Care of Services for the Washington State Department of Social and Health Services (DSHS) in her individual capacity; Nancy Tyson, Boarding Home Enforcement Officer, for Residential Care Services and Aging Adult Services for DSHS, in her individual capacity; Joyce Stockwell, an employee of DSHS in her individual capacity; Robert McClintock, Regional Administrator for DSHS in his individual capacity also known as Bob

McClintock; Julie Lord, Licensing Field Manager for Residential Care Services for DSHS in her individual capacity; Kathryn Webb, Lead Field Inspector for Residential Care Services for DSHS in her individual capacity; Mary Corso, formerly the Fire Marshal for the State of Washington in her individual capacity; Roger Woodside, Assistant State Fire Marshal for the State of Washington in his individual capacity; Ed Borgatti, Chief Deputy State Fire Marshal for the State of Washington in his individual capacity; Michael Sturgeon, Deputy Fire Marshal for the State of Washington in his individual capacity, Defendants-Appellants.

No. 07-35125.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 5, 2008.

Filed September 25, 2008.

Robert M. McKenna, Attorney General for the State of Washington, Olympia, WA, D. Thomas Wendel (Argued), Assistant Attorney General for the State of Washington, on behalf of defendants-appellants Pat Lashway, et al.

Paul A. Lindenmuth, Esq., Law Offices of Ben F. Barcus & Associates, P.L.L.C., Tacoma, WA, on behalf of plaintiffs-appellees CarePartners, LLC, et al.

Appeal from the United States District Court for the Western District of Washington; Robert S. Lasnik, District Judge, Presiding. D.C. No. CV-05-01104-RSL.

Before: FERDINAND F. FERNANDEZ and CONSUELO M. CALLAHAN, Circuit Judges, and IRMA E. GONZALEZ, District Judge.^*

CALLAHAN, Circuit Judge:

CarePartners, LLC, CarePartners Management, and Joseph and Laura Kilkelly, as individual owners of the CarePartners entities (collectively, "CarePartners"), sued several employees and representatives of the Washington State Department of Social and Health Services ("DSHS") and the Washington State Fire Marshal's office ("fire marshal") in their individual capacities (collectively, the "State employees") claiming that the State employees engaged in retaliatory enforcement of state boarding home laws and regulations against CarePartners, which operated boarding homes in Washington State. CarePartners alleged that the State employees retaliated against its facilities, including revocation of one facility's license, in response to Joseph Kilkelly's ("Kilkelly") constitutionally protected speech and petition activities; namely, his critical public speech about DSHS and its interpretations of certain regulations, his lobbying activities in connection with seeking a license from DSHS, and his filing of an administrative appeal as to one of DSHS's regulatory decisions. In this interlocutory appeal, the State employees appeal the district court's denial of their motion for summary judgment on their defense of qualified immunity. Viewing the facts in a light most favorable to CarePartners, and based on circuit precedent, we hold that the State employees are not entitled to qualified immunity. Accordingly, we affirm the district court's denial of summary judgment.

I. Factual Background

A. Regulatory background

The State of Washington licenses and regulates boarding homes (i.e., assisted living facilities for the elderly). Wash. Rev. Code §§ 18.20.020(1), 18.20.030. The State has instituted comprehensive regulations covering various aspects of boarding home construction and operation. See Wash. Admin. Code §§ 388-78A-2010-2050. These rules are generally enforced by DSHS and its Resident Care Services department ("RCS"), but fire protection standards are enforced by the Washington State Patrol through the director of fire protection (i.e., the fire marshal's office). Wash. Rev.Code §§ 18.20.110, 18.20.130.

In 1995, the state building code council adopted a licensed care facility code ("LC Code") that requires automatic fire sprinklers if the facility has more than sixteen residents or has more than two residents who are non-ambulatory. Wash. Admin. Code § 51-40-0313.8.2.1 (1998). In response to a 1998 fire at a boarding home, which killed eight residents, the Washington Legislature enacted a program to subsidize the cost of retrofitting older facilities with fire sprinklers. As of 1999, licensed boarding homes could not accept and retain semi- or non-ambulatory residents unless "the boarding home [was] approved by the Washington state director of fire protection to care for semi-ambulatory or nonambulatory residents." Wash. Admin. Code § 388-78A-240(3)(a) (2002). In December 2001, Pat Lashway, as DSHS Director of RCS, sent letters to all boarding home operators indicating what conditions their facilities would have to meet to serve semi-and non-ambulatory residents.¹

B. Kilkelly's acts and enforcement by the State employees

CarePartners operated three boarding homes in the State of Washington: Meridian Hills ("Meridian"), Alderwood Assisted Living ("Alderwood") and Wenatchee Assisted Living ("Wenatchee"). Alderwood and Wenatchee did not have sprinkler systems in place at the time of enforcement. This lawsuit is based on a series of acts through which Kilkelly exercised his rights of speech and petition, which CarePartners alleges led to the State employees' retaliatory enforcement with respect to the Alderwood and Wenatchee facilities.

1. Kilkelly's administrative appeal of the fine against Meridian

In 2002, the Meridian facility received an annual survey by RCS. Dissatisfied with that survey and an associated fine of $300, Kilkelly and CarePartners filed an administrative appeal in early 2003 to challenge the conclusions and results of the survey. CarePartners was critical of DSHS's assessment of the Meridian facility. Administrative hearings took place in January and February of 2003, and the State of Washington Department of Social and Health Services Board of Appeals eventually affirmed most of the administrative decision in DSHS's favor.

2. Kilkelly's lobbying activity

In early February 2003, CarePartners entered into a letter agreement to lease a boarding home in Lakewood, Washington, from owners who had allowed their license to lapse. The lease was contingent on CarePartners's acquisition of a license from DSHS. Kilkelly engaged in an administrative letter campaign with DSHS, and specifically defendants Lashway and Nancy Tyson, over whether to treat CarePartners's application for a license as one related to an existing facility or as an initial facility application, in other words "grandfathering" the facility in under the old code. Concurrently, Kilkelly began lobbying state politicians for assistance in trying to acquire a license on favorable terms so that CarePartners could meet its stated goal of serving low to medium income residents. He contacted several state senators and met with a state representative's aide to discuss his licensing issue and to criticize DSHS. For example, an e-mail to state senators was entitled "Example of DSHS inflexibility in applying the existing rules — choosing control over whats [sic] best for public policy[.]"²

3. The State employees' enforcement action against Wenatchee and Alderwood

On February 2, 2003, a deputy fire marshal inspected Wenatchee and cited it for having too many semi- and non-ambulatory residents in a facility without fire sprinklers. Kilkelly contested those violations by letter. In February 2003, RCS conducted an inspection of Alderwood and found deficiencies related to the number of semi- and non-ambulatory residents present in the facility.

A June 2, 2003 e-mail indicates that DSHS was "planning to take action against Wenatchee" (and possibly Alderwood), and that DSHS wanted to get all concerned "`on board' and `all our ducks alined' [sic]." However, internal e-mails sent between June 3, 2003 and June 5, 2003 indicate that the agencies had not yet reached agreement as to how the CarePartners facilities were to be treated under the relevant statutes and regulations with respect to fire sprinkler system requirements and ambulatory issues. One e-mail referred to the issue as "a curve ball." Another read, in part: "OK guys — I found an `Ah Shit' in the pile."

Unannounced follow-up inspections at Alderwood and Wenatchee were conducted on June 23 and 24, 2003, noting several violations. On June 27, 2003, DSHS imposed immediate conditions on Wenatchee's and Alderwood's boarding home licenses. DSHS's order required both facilities to: (1) discharge all but two semi-ambulatory residents within 30 days; (2) hire staff within 24 hours who would be dedicated to conducting "fire watches 24 hours, 7 days per week"; (3) contact the fire marshal within 24 hours to discuss evacuation plans; and (4) train staff and residents on evacuation plans within seven days. On July 3, 2003, Alderwood appealed the decision to the Office of Administrative Hearings.

In or around early July 2003, CarePartners's attorney, Robin Dale, contacted the Attorney General's office and spoke with Assistant Attorney General Cobb, who represented DSHS and Lashway. In Dale's affidavit, she noted that Cobb "gave [her] the distinct impression that Mr. Kilkelly was not one of the Department's favorite people," and that "Mr. Kilkelly was `known' to the department," a comment Dale remarked was delivered with "negative...