Sparkman Learning Center; Jessie Carter, Plaintiffs - Appellants
Arkansas Department of Human Services; John Selig, Individually and in his official capacity as Director, AR DHS; Tonya Russell, Individually and in her official capacity as Director of Division of Child Care and Early Childhood Education AR DHS other Director, Division of Child Care and Early Childhood Education of AR DHS, Defendants - Appellees
Submitted September 11, 2014.
For Sparkman Learning Center, Jessie Carter, Plaintiffs - Appellants: Danny Williams, WILLIAMS LAW FIRM, North Little Rock, AR.
For Arkansas Department of Human Services, John Selig, Individually and in his official capacity as Director, AR DHS, Tonya Russell, Individually and in her official capacity as Director of Division of Child Care and Early Childhood Education AR DHS other Director, Division of Child Care and Early Childhood Education of AR DHS, Defendants - Appellees: Kathryn N. Bridges, John Mark White, ARKANSAS DEPARTMENT OF HUMAN SERVICES, Little Rock, AR.
Before RILEY, Chief Judge, SMITH and KELLY, Circuit Judges.
SMITH, Circuit Judge.
Sparkman Learning Center and its executive director, Jessie Carter, (referred to collectively as " Sparkman" ) appeal the district court's denial of their preliminary injunction, denial of their post-judgment motions to alter or amend a judgment, and granting of the Arkansas Department of Human Services's (DHS) motion to dismiss Sparkman's claims that DHS violated their due process and equal protection rights under the Fourteenth Amendment of the United States Constitution. The district court barred Sparkman's claims based on principles of claim preclusion within Arkansas law because the claims could have been brought during the state administrative proceeding and judicial review. We affirm.
DHS is a state agency whose Division of Child Care and Early Childhood Education (" Division" ) regulates child care facility licensing; the Division also administers the USDA Child Care Food Program (" Program" ), which is funded by the federal government. Appellee John Selig is the director of DHS, and appellee Tonya Russell is the director of the Division (referred to collectively as " DHS" ). Sparkman Learning Center is a day care facility that provided disability services funded by DHS and took part in the Program that DHS facilitated. A federal regulation for the Program prohibits enrolled providers from placing disqualified individuals in a position of authority. See 7 C.F.R. § 226.6(c)(3)(ii)(B). Additionally, DHS Policy 1088 states that violations of the Program's regulations can result in the exclusion of the provider from receiving further funding from DHS.
In 2005, DHS notified Sparkman of their intent to exclude Sparkman from further DHS funding and activities due to Sparkman's alleged placement of a disqualified individual, Patricia Whitaker, in a position
of authority. Sparkman appealed this decision and was given a hearing before a DHS administrative law judge (ALJ) pursuant to the Arkansas Administrative Procedures Act. See Ark. Code Ann. § § 25-15-201-25-15-219. Sparkman believed that racial animus motivated DHS to place Whitaker on the disqualification list. Nonetheless, Sparkman did not raise any constitutional equal protection claim at this first administrative hearing. Because the ALJ presiding over the case was relatively new, a more experienced ALJ observed portions of the hearing. In a curious turn of events, before the hearing process was complete, the ALJ presiding over Sparkman's hearing resigned, stating " as an African American male I cannot continue to work in a[n] office where racism and harassment continue to exist on a daily basis." After the initial ALJ resigned, the other ALJ present, who was Caucasian, decided the case. The second ALJ's decision upheld DHS's termination of funding for Sparkman. Sparkman appealed this decision to the Pulaski County Circuit Court and subsequently to the Arkansas Court of Appeals. Sparkman alleged that the irregularity of having two ALJs involved in the administrative hearing violated their due process rights. Sparkman also alleged for the first time that racial animus on the part of the Caucasian ALJ affected the outcome of the case.
In December 2006, with state proceedings underway, Sparkman also filed a complaint in the Western District of Arkansas alleging violations of their due process and equal protection rights under the Fourteenth Amendment of the United States Constitution. The district court declined to hear the case while the state court appeals were pending pursuant to the Younger  abstention doctrine.
Meanwhile, the Arkansas state courts, upon DHS's motion, remanded the administrative hearing appeal back to the hearing level to conduct a second hearing. For the second hearing, DHS appointed a private attorney to serve as the administrative hearing officer; Sparkman agreed to the selection. In the second administrative hearing, Sparkman again made no claims regarding equal protection violations resulting from DHS's racial animus, nor did Sparkman bring any claims regarding their due process complaint arising from the first administrative hearing. Following the second hearing, the hearing officer decided in DHS's favor, upholding DHS's decision to terminate funding for Sparkman. As before, Sparkman appealed to the Pulaski County Circuit Court, this time alleging that there were ex parte communications between DHS and the hearing officer which violated Sparkman's due process rights under the Fourteenth Amendment. The state circuit court upheld the decision of the hearing officer, finding that the use of a private attorney as a substitute ALJ in the second administrative hearing did not deprive Sparkman of due process. Sparkman appealed to the Arkansas Court of Appeals. The state appellate court affirmed. It held that the second hearing procedure did not violate Sparkman's due process rights. See Sparkman Learning Ctr., Inc. v. Ark. Dep't of Human Servs., 2012 Ark.App. 194, 2012 WL 723330, at *3-4 (Ark. Ct. App. 2012). Sparkman did not appeal to the Arkansas Supreme Court.
With the state court proceedings ended, at Sparkman's request, the Western District of Arkansas reopened the federal case originally filed in 2006 but stayed in 2007. Initially, Sparkman filed a motion for a preliminary injunction. ...