Mother Goose Nursery Schools v. Sendak

Decision Date16 December 1980
Docket NumberCiv. No. H 78-449.
PartiesMOTHER GOOSE NURSERY SCHOOLS, INC., an Indiana Not-for-Profit Corporation, Plaintiff, v. Theodore L. SENDAK, Individually and as Attorney General of the State of Indiana, Defendant.
CourtU.S. District Court — Northern District of Indiana

John Kappos and Hawk P. C. Kautz, Kappos & Kautz, Merrillville, Ind., for plaintiff.

Donald P. Bogard, Chief Counsel, William G. Mundy, Alan L. Crapo, Asst. Attys. Gen., State of Ind., Indianapolis, Ind., Gilbert F. Blackmun, Friedrich, Bomberger, Tweedle & Blackmun, Highland, Ind., for defendant.


McNAGNY, District Judge.

This matter comes before the Court on defendant's motion for summary judgment and plaintiff's cross motion for summary judgment.

On or about June 30, 1978 a contract was submitted to the defendant, serving in his capacity as Attorney General of the State of Indiana, for consideration. This contract concerned an agreement between the plaintiff and the Indiana State Department of Public Welfare whereby the plaintiff would provide transportation and day care services to children of public assistance recipients and other low income persons in the State of Indiana for the period from July 1, 1978 to June 30, 1979. In return the Indiana Department of Public Welfare, in cooperation with the Federal Government, would reimburse the plaintiff for providing such services. All contracts entered into by state agencies such as the Indiana Department of Public Welfare must be approved by the attorney general pursuant to Ind. Code 4-13-2-14 which reads, "All contracts and leases shall be approved as to form and legality by the attorney-general. A copy of every such contract or lease extending for a term longer than one 1 year shall be filed with the director of public works and supply department of administration." Following the submission of the contract to the defendant pursuant to Ind. Code 4-13-2-14, the defendant rejected the contract.

This case comes before this Court on an action for declaratory judgment, injunctive relief and for damages against the Attorney General for arbitrarily refusing to approve the contract as to its form and legality all in violation of Title 42 U.S.C. § 1983. This Court took jurisdiction based upon Title 28 U.S.C. §§ 1331 and 1343.

Findings of Fact

The plaintiff, Mother Goose Nursery School, has been annually licensed as a day nursery from 1954 until October 23, 1975 when pursuant to the Indiana Not-for-Profit Corporation Act of 1971, they were issued a Certificate of Incorporation by the Secretary of State of Indiana. The plaintiff is now and has been since its incorporation in good standing under the laws of the State of Indiana. Since October 23, 1975, the plaintiff has annually been licensed as a day care nursery.

After its incorporation in 1975, the plaintiff entered into contracts with various agencies of the State of Indiana. During this period Anthony Cifaldi was a director of the plaintiff corporation and retained such position until he resigned on October 1, 1978, as a result of a letter he received from the Administrator of the Indiana Department of Public Welfare, Wayne Stanton. This letter requested that he remove himself as administrator and also that he remove himself from the Board of Directors of the plaintiff corporation.

These events came about as a result of the defendant's rejection of the contract submitted to him for approval as to form and legality, and as a result of a letter written by the defendant to the Governor of Indiana on September 26, 1978. This letter informed the Governor that the defendant disapproved the contract because Anthony Cifaldi had received a sentence in the United States District Court in 1972 for filing and subscribing to false income tax returns. The letter additionally noted that Cifaldi had been found guilty on November 10, 1977 for swearing to and verifying a false and fraudulent statement of his tax return in 1966. At the time of the contract's disapproval, Cifaldi was on probation.

Following the resignation of Anthony Cifaldi, the Board of Directors of plaintiff corporation advised the Administrator of the Department of Public Welfare and the defendant that Cifaldi's resignation had been accepted by the Board. Subsequent to this time the contract was never approved nor was the plaintiff informed of any reasons for non-approval after Cifaldi's requested resignation.

Conclusions of Law

In order to sustain a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, the parties must show that there is no genuine issue as to any material fact and that they are entitled to judgment as a matter of law.

In this case the facts are virtually undisputed by the parties. Therefore, the issues confronting this Court are whether the defendant can withstand this claim based on executive immunity, and additionally, if no such immunity is found to exist, did the defendant have the power or the authority to reject a contract submitted to him that was proper in form.1

"For purposes of establishing jurisdiction under 28 U.S.C. § 1343(3), it is irrelevant whether or not a public official is acting in accordance with state law, so long as said person, acting under color of state law, has arguably deprived another person of rights secured by the Federal Constitution." Citizens Energy Coalition of Indiana, Inc. v. Sendak, 459 F.Supp. 248, 256 (S.D.Ind.1978). Here there is no question that the defendant was acting under his authority as Attorney General and thus under color of state law.

Traditionally, higher officials are entitled to immunity from liability under the Eleventh Amendment to the United States Constitution. Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959). However, in recent years the Supreme Court has narrowed the scope of immunity privilege, holding that although officials charged with tortious acts under state law may still be allowed an absolute immunity if the acts complained of are outside their authority, those charged with unconstitutional acts are entitled only to a qualified immunity. "It has been settled that the Eleventh Amendment provides no shield for a state official confronted by a claim that he had deprived another of a federal right under color of state law." Scheuer v. Rhodes, 416 U.S. 232, 237, 94 S.Ct. 1683, 1687, 40 L.Ed.2d 90 (1974) (emphasis added).

Although it is now clear that absolute immunity is no longer a bar to suit when a constitutional violation has occurred, a qualified immunity for officials remains. The usual standard in assessing the immunity of officers is their good faith and probable cause in acting as they did. See Pierson v. Ray, 386 U.S. 547, 557, 87 S.Ct. 1213, 1219, 18 L.Ed.2d 288 (1967). The extent of such immunity depends on varying circumstances. In Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), the Supreme Court enumerated these circumstances in a suit brought against the governor of Ohio. "In the case of higher officers of the executive branch, however, the inquiry is far more complex since the range of decisions and choices— whether the formulation of policy, of legislation, of budgets, or of day-to-day decisions —is virtually infinite." Id. at 246, 94 S.Ct. at 169. As a result, the Court grants higher officials a wider latitude of discretion in their decisions. "In short, since the options which a chief executive and his principal subordinates must consider are far broader and far more subtle than those made by officials with less responsibility, the range of discretion must be comparably broad." Id. at 247, 94 S.Ct. at 1692.

The defendant in this case is a principal subordinate as discussed in the above-quoted language. Therefore, it is readily apparent to this Court that he should be granted a liberal qualified immunity. The degree of liberality afforded a higher official is further discussed in Scheuer.

These considerations suggest that, in varying scope, a qualified immunity is available to officers of the executive branch of government, the variation being dependent upon the scope of discretion and responsibilities of the office and all the circumstances as they reasonably appeared at the time of the action on which liability is sought to be based. It is the existence of reasonable grounds for the belief formed at the time and in light of all the circumstances, coupled with good-faith belief, that affords a basis for qualified immunity of executive officers for acts performed in the course of official conduct. Mr. Justice Holmes spoke of this, stating:
`No doubt there are cases where the expert on the spot may be called upon to justify his conduct later in court, notwithstanding the fact that he had sole command at the time and acted to the best of his knowledge. That is the position of the captain of a ship. But even in that case a great weight is given to his determination and the matter is to be judged on the facts as they appeared then and not merely in the light of the event.' Moyer v. Peabody, 212 U.S. 78, 85 29 S.Ct. 235, 236, 53 L.Ed. 410 (1909). (Citations omitted.)

Id. at 247-248, 94 S.Ct. at 1692. Thus, it appears that if the defendant in this case had a good faith belief that he was acting properly, which this Court believes the defendant possessed, then he should be granted immunity. However, in Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978), the Supreme Court further defined what the reasonable grounds and a good faith belief entails.

We consider here, as we did in Scheuer, the need to protect officials who are required to exercise their discretion and the related public interest in encouraging the vigorous exercise of official authority. Yet Scheuer and other cases have recognized that it is not unfair to hold liable the official who knows or should know he is acting outside the law. (Emphasis added.)

Id. at 506, 98 S.Ct. at 2911....

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5 cases
  • Mother Goose Nursery Schools, Inc. v. Sendak
    • United States
    • U.S. District Court — Northern District of Indiana
    • June 29, 1984 this case in favor of the plaintiff and against the defendant in an order dated December 16, 1980. Mother Goose Nursery Schools, Inc. v. Sendak, 502 F.Supp. 1319 (N.D.Ind. 1980). At the conclusion of the order, Judge McNagny noted that the court had heard no evidence on damages and there......
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    ...Welfare. The district court granted the plaintiff's motion for summary judgment on December 16, 1980. Mother Goose Nursery Schools, Inc. v. Sendak, 502 F.Supp. 1319 (N.D.Ind.1980). The Court found Sendak personally liable for violating Mother Goose's constitutional rights but deferred a dec......
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