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United States District Court, Northern District of Illinois, E.D

October 24, 1984


The opinion of the court was delivered by: Shadur, District Judge.


The Grove School ("School") and its Executive Director Robert Matson ("Matson")*fn1 charge Guardianship and Advocacy Commission of the State of Illinois ("Commission") and its employees Elizabeth McKee ("McKee"), Mary C. Gibb ("Gibb"), Evelyn Engler ("Engler"), Ruth Durkin ("Durkin") and Hector E. Palacious ("Palacious")*fn2 violated Grove's First and Fourteenth Amendment rights*fn3 during a GAC investigation of alleged violations by Grove of state laws for treatment and education of handicapped children. Those are advanced under 42 U.S.C. § 1983 ("Section 1983"). Grove also asserts pendent common-law libel and trade libel claims against GAC.

GAC invokes Fed.R.Civ.P. 12(b)(6) to challenge Grove's Complaint on a multiplicity of grounds. It attacks the sufficiency of the First and Fourteenth Amendment allegations generally and also asserts the following specific flaws:

    1. Commission is not a "person" for Section 1983

    2. Under the Eleventh Amendment no action for
  monetary damages may be brought against Commission or
  its employees sued in their official capacities.

    3. Federal courts lack authority to compel state
  officials to conform their conduct to state law. That
  bars the pendent claims.

    4. Commission is a quasi-judicial board, so its
  officers enjoy absolute judicial immunity.

    5. Allegations against Engler, Gibb and Palacious
  are insufficient to establish their direct involvement
  in a deprivation of Grove's rights.

    6. Gibb and Engler may not be held liable for
  damages on respondeat superior grounds.

Grove of course seeks to repel all of GAC's onslaughts.*fn4

Because GAC's motions to dismiss various defendants may be treated more readily in the context of at least one valid substantive claim, this opinion will first deal with Grove's First Amendment assertions, then turn to the objections by specific defendants, then return to the other claims in the Complaint. For the reasons stated in this opinion, GAC's motions to dismiss (1) Commission as a defendant and (2) the Fourteenth Amendment due process claims against all individual defendants are granted. Its motions to dismiss (1) the individual defendants generally, (2) First Amendment claims and (3) the pendent claims are denied.


School is a residential, medical and educational facility for the multiply handicapped and developmentally disabled. It was founded by Virginia Matson in 1958 and is now run by her son Robert.

Commission is an executive agency of the State of Illinois created to protect the rights of the mentally ill and developmentally disabled. Among its three divisions is the Human Rights Authority ("Authority"), which operates through regional boards that investigate complaints alleging violations of such persons' rights. Those regional boards are empowered to conduct hearings, subpoena witnesses and documents, release findings to the public, recommend that other agencies take punitive or remedial action, and propose legislation for the protection of the handicapped. Ill. Rev.Stat. ch. 91 1/2, ¶ 714-728.

Engler is Authority's Director. McKee is Chairperson, Gibb is Vice-Chairperson and Durkin is a Board member of Authority Region 2 North (the region in which the School is located). Palacious is an attorney employed by Commission.

Matson and his mother Virginia have run School according to a philosophy that conflicts with the prevailing philosophy of Commission and other Illinois agencies as to the proper way to handle the education of the multiply handicapped and developmentally disabled. Both Matsons and School have advocated their own philosophy and criticized Commission practices.

To punish Matson and School for such criticisms and nonconformist philosophy, GAC instituted a harassment campaign under the guise of an investigation of charges GAC knew were false.*fn6 GAC made numerous visits to School's campus to question students and employees, and it also made burdensome document requests, all of which disrupted School's operation.

On July 6, 1983 GAC held a public "hearing" at which it released a number of false charges against School and Matson, including charges of understaffing, improper distribution of medication and permitting sexual abuse of residents. "Hearing" is really a euphemism for what actually took place, for GAC had refused Grove's several requests for advance notice of the nature of the charges, nor did GAC give Grove any opportunity to object or respond at the "hearing" or to attach a response to the written report GAC distributed to the press. Since that time GAC has continued its investigation and has recommended that other Illinois agencies and the Illinois legislature take action against Grove, including cutting off School's funding, removing Matson as Executive Director and revoking School's and Matson's licenses.

As a result of GAC's actions and the adverse publicity, Grove has suffered disruption in providing its services, frustration in accomplishing its educational goals and a loss of reputation, enrollment and revenues. Both compensatory and punitive damages are sought from all defendants.

First Amendment Claims

School's and Matson's factual allegations (though not their conclusory allegations of law) advance two possible bases for asserting violation of their First Amendment rights. One surely states a valid claim: the charge that GAC's actions have been motivated by a desire to punish Grove for criticizing GAC and for advocating Grove's own philosophy of treatment of the multiply handicapped and developmentally disabled.

One major purpose of the First Amendment was to protect free discussion of governmental affairs. Landmark Communications, Inc. v. Virginia, 435 U.S. 829, 838, 98 S.Ct. 1535, 1541, 56 L.Ed.2d 1 (1978). It is axiomatic that government may not attempt to inhibit criticism of public policies or officials by punishing those who express critical views, at least unless the expression actually hinders the functioning of the state. Hostrop v. Board of Junior College District No. 515, 471 F.2d 488, 492 (7th Cir. 1972) and authorities there cited. On Grove's allegations, GAC's actions are an impermissible attempt to inhibit Grove from exercising the constitutional right to criticize GAC and to advocate Grove's own philosophy of treatment. GAC has not suggested any — let alone a compelling — governmental reason for suppressing Grove's views.

GAC argues its conduct was non-actionable because GAC itself had no power to cut off funding, close down School or remove Matson as Executive Director. Whether those factors may be relevant to Grove's First Amendment charge as expressed in the Complaint is discussed below, but they miss the point of the theory now under consideration. To establish a violation of their First Amendment rights of expression, School and Matson need show only impermissible action tending to inhibit their speech. Bart v. Telford, 677 F.2d 622, 625 (7th Cir. 1982). Indeed they need not show the desire to punish or inhibit their speech was the sole motivation for GAC's action.

Even if it be assumed there was a legitimate basis for launching the investigation, Grove's Complaint may thus fairly be read to allege GAC's investigation was arbitrary, unusually burdensome and unnecessarily harassing because of GAC's disagreement with Grove's views. That states a viable First Amendment claim.

But the stated thrust of Grove's express invocation of the First Amendment lies in a different direction: the charge that GAC has interfered with Grove's constitutionally guaranteed freedom to establish and administer an educational treatment program consistent with its own philosophy and with parents' constitutional right to choose the educational philosophy that will guide their childrens' education. At least the first part of that contention also survives dismissal.

In support of its theory Grove cites Sweezy v. New Hampshire, 354 U.S. 234, 77 S.Ct. 1203, 1 L.Ed.2d 1311 (1957), Regents of the University of California v. Bakke, 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978) and Pierce v. Society of Sisters, 268 U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070 (1925). All three of those cases, together with other cases not called on by Grove but plainly relevant, keep it in court.

Sweezy involved the right of a university professor to resist government interrogation about his past associations and the content of a lecture he had delivered. It concerned governmental interference with an individual's expression of ideas in a university setting. As for the Bakke excerpt Grove cites (438 U.S. at 311-15, 98 S.Ct. at 2559-61), it considered the importance to a university of assuring itself a diverse student body and emphasized the university's freedom to design its curriculum, choose its teachers and exchange ideas. Pierce emphasized the right of parents to expose their children to ideas and educational philosophies other than those of the state. Though that right is not Grove's own, under the circumstances alleged here it implies a protectible corollary right on Grove's part to express such ideas and philosophies.*fn7

Read in the most favorable light, Grove's Complaint asserts the very
conduct of School's affairs in accordance with Grove's philosophy is a
form of expression protected by the First Amendment. Tinker v. Des Moines
School District, 393 U.S. 503, 505-06, 89 S.Ct. 733, 735-36, 21 L.Ed.2d
731 (1969) teaches such protection extends to "symbolic act[s]" akin to
"pure speech" It is of course true that (Clark v. Community for Creative
Non-Violence, ___ U.S. ___,  ___ & n. 5, 104 S.Ct. 3065, 3069 & n. 5, 82
L.Ed.2d 221 (1984)):

    1. "[I]t is the obligation of the person desiring to
  engage in assertedly expressive conduct to demonstrate
  that the First Amendment even applies. To hold
  otherwise would be to create a rule that all conduct
  is presumptively expressive."

    2. Even expressive conduct "may be forbidden or
  regulated if the conduct itself may constitutionally
  be regulated, if the regulation is narrowly drawn to
  further a substantial governmental interest, and if
  the interest is unrelated to the suppression of free

But at this early stage of the litigation, this Court has not been afforded enough information to determine whether Grove's conduct is protected speech or to evaluate the government's interest in regulation. Grove's uncontroverted allegations supply the requisite prima facie case. From this second perspective too, then, Grove's First Amendment claims survive dismissal.*fn8

All the preceding discussion proceeds from the premise Grove has adequately pleaded its First Amendment claims. Because GAC challenges the Complaint on those terms, a brief treatment of the technical pleading considerations is in order.

True enough, the Complaint's specific reference to the First Amendment was scanty.*fn9 It is also true that brief reference did not articulate the theory GAC violated School's and Matson's First Amendment rights by punishing them for expressing their views. But what controls is that the factual allegations necessary to support that unstated theory, as well as the theory Complaint ¶ 29 did specify, are present in the Complaint.

Under the teaching of Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957), as recently reaffirmed in Hishon v. King & Spalding, ___ U.S. ___, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984), a motion to dismiss may be granted only if it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." That means this Court "is under a duty to examine the complaint to determine if the allegations provide for relief under any possible theory." Craft v. Board of Trustees, 516 F. Supp. 1317, 1323 (N.D.Ill. 1981); 5 Wright & Miller, Federal Practice and Procedure: Civil § 1357, at 601-02 (1969). Because this Court has found Grove's allegations state a cause of action, both in terms specifically identified in the Complaint and in terms implicated by its factual allegations, the Complaint cannot be dismissed.

Proper Defendants

1. Commission

Commission argues it is not a "person's for Section 1983 purposes. That may be rephrased in traditional jurisprudential terms. Because Quern v. Jordan, 440 U.S. 332, 341, 99 S.Ct. 1139, 1145, 59 L.Ed.2d 358 (1979) and Pennhurst State School & Hospital v. Halderman, ___ U.S. ___" 104 S.Ot. 900, 907, 79 L.Ed.2d 67 (1984) have laid to rest the notion that Section 1983 abrogates the Eleventh Amendment,*fn10 the appropriate inquiry is whether Commission, a state agency, is protected under standard sovereign immunity analysis.

Monell v. Department of Social Services, 436 U.S. 658, 690, 98 S.Ct. 2018, 2035, 56 L.Ed.2d 611 (1978) held municipalities are not immune from Section 1983 suits — a holding it explicitly limited to "local government units which are not considered part of the State for Eleventh Amendment purposes" (id. at 690 n. 54, 98 S.Ct. at 2085 n. 54). Later in the same Term the Supreme Court refused to extend the Monell exception to state agencies and held the Alabama Board of Corrections enjoys sovereign immunity under Section 1983. Alabama v. Pugh, 438 U.S. 781, 782, 98 S.Ct. 3057, 57 L.Ed.2d 1114 (1978) (per curiam). Pennhurst, 104 S.Ct. at 908 reaffirmed the immunity of state agencies. Accord, Toledo, Peoria & Western Railroad Co. v. Illinois, 744 F.2d 1296 at 1298 (7th Cir. 1984). Commission is therefore immune from suit on both the Section 1983 and pendent claims.*fn11

2. Engler, Gibb and Palacious

Engler, Gibb and Palacious move for dismissal on the premise the Complaint's allegations do not establish their direct involvement in any alleged deprivation of School's or Matson's rights. Duncan v. Duckworth, 644 F.2d 653, 655 (7th Cir. 1981) is cited for the proposition that a defendant may not be held liable under Section 1983 unless his "direct and personal responsibility" for the alleged deprivation is proved.

But on the current motion the test is one of pleading, not proof. And on that score the Complaint alleges specific participation by each of Engler, Gibb and Palacious in GAC's investigation of School:

    1. Gibb notified Grove of the July 6 public hearing
  (Complaint 1117).

    2. Engler approved the public release of GAC's
  charges against School (Complaint 1118).

    3. Palacious demanded records from School and
  reported School to Illinois authorities for
  prosecution (Complaint 1116).

Complaint ¶ 17 also ascribes pre-July 6 harassing tactics of various kinds to "defendants," without particularizing just who did what.*fn12 All those allegations are enough to implicate the named defendants directly in the alleged harassment and thus keep them in the case.*fn13

Due Process Claims

Under Parratt v. Taylor 451 U.S. 527, 536-37, 101 S.Ct. 1908, 1913, 68 L.Ed.2d 420 (1981) the plaintiff in a Section 1983 due process claim must show that defendants:

1. acting under color of state law

2. deprived plaintiff

    3. of a right, privilege or immunity secured by the
  Constitution or laws of the United States

4. without due process of law.

Mere defamation, for example, is insufficient to establish a due process violation. Paul v. Davis, 424 U.S. 693, 710, 96 S.Ct. 1155, 1164, 47 L.Ed.2d 405 (1976). Grove Mem. 8 originally acknowledged the Parratt formula, but its Supp.Mem. 2 retreated to the incorrect assertion that the only essential elements of such due process claims are that (1) the plaintiff be injured (2) by governmental action. Grove's claims fall as far short of the mark as its statement of the law.

I. Threats to Licenses and Funds

Unencumbered by logic or precedent, Grove takes the remarkable position that the deprivation of a legally protected interest is not a necessary element of a due process action. It asks that GAC be held liable for merely threatening School's and Matson's licenses, neither of which has been revoked. On that premise GAC would be guilty of depriving Matson of his "right" to engage in the profession of his choice even though he is still entitled to engage in that profession. In like manner. Grove would hold GAC liable for depriving it of state funding that Grove nevertheless continues to receive, merely because GAC's defamatory statements threatened that funding or because GAC told other state agencies to "cease doing business" with Grove. Needless to say, no action lies for such mere threats.

2. Prospective Business Advantage

Grove also contends GAC's actions have somehow deprived it of its "prospective business advantage." School fails to explain just what that interest is and the nature of the deprivation. And it offers no case support for the proposition that "prospective business advantage" is a protectible property interest.

3. Loss of Funding*fn14

School says GAC's defamatory statements have deprived it of two sources of funding: grant money from the Lake County Environmental Planning Board and fixed per diem reimbursements from the State of Illinois based on the number of students enrolled. It claims (1) the Planning Board has refused to release its grant until GAC has cleared School of wrongdoing and (2) the per diem reimbursement levels have dropped in proportion to School's drop in enrollment (a product of GAC's unfavorable publicity).

Even so School has not stated a claim under the Due Process Clause. It fails as to at least two of the ingredients identified in Parratt.*fn15

First, no protectible property interest arises unless School has a "legitimate claim of entitlement" to the funds beyond an "abstract need or desire" or a "unilateral expectation." Board of Regents v, Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). Absent any indication of a right to the Board's grant, it must be assumed (as would normally be the case) such grant is discretionary. Any loss of per diem funds is even more tenuous. Their reduction is attributable entirely to a loss of students. Thus School has no right to a greater reimbursement unless it also has a well-founded right to a larger student population. Again it has alleged no such right.

Second, even if School did have a right to the lost funds, it has not shown GAC's legal responsibility for the deprivation. GAC's public and private charges may have been the catalyst for the withholding of the grant or the drop in enrollment, but as long as GAC did not exercise some control over the decision-making process of the Planning Board or the school districts that stopped referring students to School, GAC is not the legal cause of the deprivation.

In Margoles v. Tormey, 643 F.2d 1292 (7th Cir. 1981) a physician charged members of the Wisconsin Board of Medical Examiners violated due process when they supplied derogatory information about him to Illinois medical examiners, who then denied him a license. Our Court of Appeals held the Wisconsin officials could not be said to have deprived the physician of his license, absent a showing they played an active role in the Illinois decision beyond supplying information. Id. at 1296-99 & 1297 n. 8. Thus so long as the decisionmaker is in a position to evaluate such derogatory information independently and to reject it if it lacks credibility, the information supplier cannot be held legally responsible for the resulting decision.

Grove has not met the burden of pleading established by Margoles. It has not alleged GAC played any role in the internal decisionmaking processes of the Planning Board or the referring schools, as distinct from supplying them with information that they were free to disregard. Grove does urge GAC controlled the Planning Board's decision, but not in the Margoles sense. Instead the "control" cited by Grove is the Planning Board's refusal to release grant money without a favorable report from GAC. In conventional tort law analysis, the Planning Board has opted to make GAC a "but for" factor in the deprivation,*fn16 but that does not render GAC a "legal" or "proximate" cause. Because the Planning Board is free to disregard GAC reports about School, GAC is not legally responsible for the loss. And the same tort law analogy applies a fortiori to the independent determinations by the referring schools.

Pendent Libel Claims

Earlier this year Pennhurst, 104 S.Ct. at 921 held the Eleventh Amendment stripped federal courts of jurisdiction over a pendent claim by Pennsylvania citizens to require Pennsylvania mental health officials to conform their conduct to state law. GAC argues from Pennhurst that sovereign immunity protects not only Commission but also the individual defendants from Grove's state law libel claims.*fn17

Pennhurst, 104 S.Ct. at 917-19 taught pendent jurisdiction does not override sovereign immunity. Each pendent claim in a Section 1983 case must be separately examined from an Eleventh Amendment standpoint to determine whether the federal court has jurisdiction. Id. at 919. That line of analysis will be pursued here. By its terms the Eleventh Amendment prohibits only suits against a state. To block end runs around that prohibition, suits that name individual state officials are also barred when the state is the real party in interest. Pennhurst, 104 S.Ct. at 908; Toledo, Peoria & Western, at 1299. Consequently complaints against such individuals (like Grove's Complaint in this case) are subject to a two-step analysis:

1. May the suit be deemed a suit against the state?

    2. If so, does the suit nevertheless fall within the
  exception to the Eleventh Amendment carved out by Ex
  parte Young, 209 U.S. 123, 160, 28 S.Ct. 441, 454, 52
  L.Ed. 714 (1908)?

Pennhurst's rewrite of the Eleventh Amendment unequivocally foreclosed the Young exception in this case when it decided "Young and Edelman are inapplicable in a suit against state officials on the basis of state law" (104 S.Ct. at 911).*fn18 Thus the only issue here is whether Grove's libel claims may be deemed suits against the state.

For that purpose the effect of the relief sought determines whether a suit is against the sovereign. Id. at 908, 913. Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963) (citations omitted) summarized the standards:

  The general rule is that a suit is against the
  sovereign if "the judgment sought would expend itself
  on the public treasury or domain, or interfere with
  the public administration," . . . or if the effect of
  the judgment would be "to restrain the government from
  acting, or to compel it to act."

In literal terms Grove's Complaint asks damages (both compensatory and punitive) from the individual defendants. But because neither party has addressed the possibility of state indemnification of Commission's employees, this Court cannot now determine the extent (if any) to which the claims nominally asserted against individuals are in fact levelled against the state. If the employees are entitled to be indemnified against compensatory damage awards, a judgment for those damages "would expend itself on the public treasury," so the claim would be barred by the Eleventh Amendment.

It would however be surprising to find the individuals entitled to indemnification from the state for any award of punitive damages. If they are not, a claim for such damages would plainly be asserted strictly against the individuals and would not be affected by the Eleventh Amendment.

In sum it is really impossible, on the parties' incomplete submissions to date, to decide whether this Court has jurisdiction over the pendent claims under Pennhurst. GAC's motion in that respect is denied without prejudice.*fn19


All Grove's claims against Commission, and all its due process claims against the individual defendants, are dismissed. GAC'S motion to dismiss is denied in all other respects, and the individual defend ants are ordered to answer the surviving claims on or before November 5, 1984. This Court's October 31 status report date is vacated and replaced by a status report date of November 28 at 9:15 a.m.

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