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GARDNER v. BARRY
DONALD NUGENT, District Judge
This matter is before the Court on Defendants' Motions for Summary Judgment. (ECF # 50, 51.) For the reasons set forth below, Defendants' Motions are GRANTED.
I. BACKGROUND
On November 6, 2009, Plaintiff filed a one-count Amended Complaint against Defendants Park View Federal Savings Bank ("PVF") and PVF Title Services, LLC ("PVF Title"). (ECF # 11.) In the Complaint, Plaintiff alleges that PVF, a mortgage lender, "routinely and habitually refers its borrowers to PVF Title for the purpose of obtaining settlement services incident to the closing of federally related mortgage loans. . . ." ( Id. at ¶ 40.) Plaintiff claims that PVF's referral to PVF Title violates Section 8 of the Real Estate Settlement Practices Act (RESPA), 12 U.S.C. § 2607(a) and 24 C.F.R. § 3500.14, because PVF and PVF Title have an affiliated business arrangement and fail to comply with all of the conditions set forth in 12 U.S.C. § 2607(c)(4) and HUD Regulation X at 24 C.F.R. § 3500.15. ( Id. at ¶ 41.) Plaintiff attempts to bring this action on behalf of himself and a putative class of individuals who: (a) applied for a federally related mortgage loan from PVF, which loan was approved, funded and settled in the ordinary course; (b) in connection with such loan was referred by PVF to PVF Title for purposes of obtaining settlement services; (c) was required by PVF to use PVF Title for settlement services related to the loan; and (d) paid settlement service charges to PVF Title in connection with the loan settlement occurring within the applicable statute of limitations. ( Id. at ¶ 19.)
On October 27, 2009, Plaintiff filed a Motion for Partial Summary Judgment, requesting that this Court grant judgment in his favor "on the issue of `required use' and defendants' failure to comply with the affiliated business arrangement exemption to liability under [S]ection 8(a) of the Real Estate Settlement Practices Act, 12 U.S.C. § 2607(a)." (ECF # 10 at 1.) The Court denied that motion, holding that Mr. Wyman had not satisfied his burden to show that he was entitled to a judgment in his favor on these issues.
Following the close of discovery, Defendants PVF, and PVF Title filed their own motions for summary judgment claiming that they are entitled to a judgment in their favor because they satisfied the requirements for the "safe harbor" exemption allowing payments to affiliated business arrangements under RESPA. (ECF #50, 51). Plaintiff filed Briefs in Opposition to the Summary Judgment Motions (ECF #52, 53), and Defendant PVF filed a reply. (ECF #54). The Motions have been briefed fully and are now ripe for consideration.
II. STANDARD OF REVIEW
Summary judgment is appropriate when the court is satisfied "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The burden of showing the absence of any such "genuine issue" rests with the moving party:
[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any,' which it believes demonstrates the absence of a genuine issue of material fact.Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (citing FED. R. CIV. P. 56(c)). A fact is "material" only if its resolution will affect the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Determination of whether a factual issue is "genuine" requires consideration of the applicable evidentiary standards. The court will view the summary judgment motion in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Summary judgment should be granted if a party who bears the burden of proof at trial does not establish an essential element of their case. Tolton v. American Biodyne, Inc., 48 F.3d 937, 941 (6th Cir. 1995) (citing Celotex, 477 U.S. at 322). Accordingly, "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir. 1995) (citing Anderson, 477 U.S. at 252). Moreover, if the evidence presented is "merely colorable" and not "significantly probative," the court may decide the legal issue and grant summary judgment. Anderson, 477 U.S. at 249-50 (citations omitted). In most civil cases involving summary judgment, the court must decide "whether reasonable jurors could find by a preponderance of the evidence that the [non-moving party] is entitled to a verdict." Id. at 252. However, if the non-moving party faces a heightened burden of proof, such as clear and convincing evidence, it must show that it can produce evidence which, if believed, will meet the higher standard. Street v. J.C. Bradford Co., 886 F.2d 1472, 1479 (6th Cir. 1989).
Once the moving party has satisfied its burden of proof, the burden then shifts to the nonmover. The nonmoving party may not simply rely on its pleadings, but must "produce evidence that results in a conflict of material fact to be solved by a jury." Cox v. Kentucky Dep't of Transp., 53 F.3d 146, 149 (6th Cir. 1995). FED. R. CIV. P. 56(e) states:
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.
The Federal Rules identify the penalty for the lack of such a response by the nonmoving party as an automatic grant of summary judgment, where otherwise appropriate. Id.
Though parties must produce evidence in support of and in opposition to a motion for summary judgment, not all types of evidence are permissible. The Sixth Circuit has concurred with the Ninth Circuit that "`it is well settled that only admissible evidence may be considered by the trial court in ruling on a motion for summary judgment.'" Wiley v. United States, 20 F.3d 222, 225-26 (6th Cir. 1994) (quoting Beyene v. Coleman Sec. Servs., Inc., 854 F.2d 1179, 1181 (9th Cir. 1988)). FED. R. CIV. P. 56(e) also has certain, more specific requirements:
[Rule 56(e)] requires that affidavits used for summary judgment purposes be made on the basis of personal knowledge, set forth admissible evidence, and show that the affiant is competent to testify. Rule 56(e) further requires the party to attach sworn or certified copies to all documents referred to in the affidavit. Furthermore, hearsay evidence cannot be considered on a motion for summary judgment.Wiley, 20 F.3d at 225-26 (citations omitted). However, evidence not meeting this standard may be considered by the district court unless the opposing party affirmatively raises the issue of the defect.
If a party fails to object before the district court to the affidavits or evidentiary materials submitted by the other party in support of its position on summary judgment, any objections to the district court's consideration of such materials are deemed to have been waived, and [the Sixth Circuit] will review such objections only to avoid a gross miscarriage of justice.Id. at 226 (citations omitted).
As a general matter, the district judge considering a motion for summary judgment is to examine "[o]nly disputes over facts that might affect the outcome of the suit under governing law." Anderson, 477 U.S. at 248. The court will not consider non-material facts, nor will it weigh material evidence to determine the truth of the matter. Id. at 249. The judge's sole function is to determine whether there is a genuine factual issue for trial; this does not exist unless "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Id.
In sum, proper summary judgment analysis entails "the threshold inquiry of determining whether there is the need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250. It is with this standard in mind that the instant Motion must be decided.
III. DISCUSSION
At issue in this case is an alleged violation of Section 8(a) of RESPA, which prohibits the award of kickbacks or fees for the referral of a settlement service involving a federally related mortgage loan. RESPA, § 8(a); 12 U.S.C. § 2607(a). More specifically, Section 8(a) provides that:
no person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.See id. There is a limited exception to this rule, however, that applies to "affiliated business arrangements," in which an entity that is in a position to refer business either owns part of or is affiliated with a settlement service provider. RESPA, § 8(c)(4); 12 U.S.C. § 2607(c)(4).
RESPA defines affiliated business arrangements as:
an arrangement in which (A) a person who is in a position to refer business incident to or a part of a real estate settlement service involving a federally related mortgage loan, or an associate of such person, has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1 percent in a provider of settlement services; and (B) either of such persons directly or indirectly refers such business to that provider or affirmatively influences the selection of that provider.12 U.S.C. § 2602(7).
RESPA further provides that the referral of an affiliated business is not prohibited if (1) a disclosure is made of the existence of the affiliated business relationship to the person referred and such person is provided with a written estimate of the charge or range of charges generally made by the provider to which the person is referred; (2) such person is not required to use any particular provider of settlement services; and (3) the only thing of value that is received form the arrangement is a return on the ownership interest or franchise relationship. See 12 U.S.C. § 2607(c)(4). Finally, the provider of settlement services must be a "bona fide provider" of such services. See HUD Statement of Policy 1996-2, Regarding Sham Controlled Business Arrangements, 61 Fed. Reg. 29258 (June 7, 1996).
The parties do not dispute that PVF and PVF Title are "affiliates," that the affiliated business arrangement was disclosed to Mr. Wyman. They also do not dispute that he was provided with a written estimate of the charge or range of charges generally made by PVF Title, or that the only thing of value received from the arrangement was a return on the ownership interest or franchise relationship. Further, Plaintiff does not argue that PVF Title was not a "bona fide provider" of title services. Thus, the only question in dispute is whether Mr. Wyman was required to use this particular provider of settlement services.
Plaintiff argues that PVF required him to use PVF Title for settlement services, in violation of 12 U.S.C. § 2607(c)(4)(B). Defendants claim that Mr. Wyman was not required to use PVF Title, and that hundreds of other customers in the same situation, in fact, opted for other settlement providers. "Required use" is defined, in pertinent part, as "a situation in which a person must use a particular provider of settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service." 24 C.F.R. § 3500.2.
Defendants have presented evidence that the ABA disclosure statement provided to Mr. Wyman explicitly stated:
You are NOT required to use the listed provider as a condition for settlement of your loan on the subject property. There are frequently other settlement services providers available with similar services. You are free to shop around to determine that you are receiving the best services and the best rates for these services.
* * *
While we encourage you to use this company, you are not required to do so as a condition for the purchase, sale or refinance of your home.
* * *
* Park View Federal Savings Bank may not condition an extension of credit on either:
º Your purchase of an insurance product from Park View Federal Savings Bank or any of its affiliates;
or
º Your agreement not to obtain, or a prohibition on you from obtaining, an insurance product from an entity not affiliated with Park View Federal Savings Bank
* The insurance may be purchased from an insurer or agent of your choice, subject only to Park View Federal Savings Bank's right to reject a given insurer or agent base on reasonable standards, uniformly applied, and your choice of an insurer or agent will not affect Park View Federal Savings Bank's credit decision or credit terms in any way.
( See, ECF #50-2) (emphasis in the original). This language was printed in regular-sized font, and relevant portions were bolded for emphasis, as set forth above. Mr. Wyman signed the ABA disclosure form containing this language on January 15, 2009. He does not dispute that he received and signed this disclosure statement. There is no evidence that he did not understand his rights as set forth in the disclosure, or that he was confused, or misled in anyway as to his right to select his own title insurance provider.
Plaintiff argues that the disclosure is irrelevant because PVF included title insurance in the required use section of its Good Faith Estimate. The Good Faith Estimate prefaces the required use section with the statement: "THIS SECTION IS TO BE COMPLETED ONLY IF A PARTICULAR PROVIDER OF SERVICES IS REQUIRED. Listed below are providers of services which we require you to use." (Pl. Decl. Ex. 1). The Good Faith Estimate did not name PVF Title, rather, it states that "[a] provider will be chosen from [PVF's] `title company list.'" (#ECF 52-1).
Mr. Wyman and his wife did not attend their scheduled deposition, and have submitted no evidence indicating that they were not fully aware that they had the option of choosing a settlement company if they so desired. Even Mr. Wyman's declaration, attached as an exhibit to the Plaintiffs Brief in Opposition, does not state that he thought he was required to use PVF Title for the settlement services connected to his loan. The affidavit of Anne Johnson, Senior Vice President of Branch Administration Support Services of PVF, attests that PVF did not require Mr. Wyman, or any other customer, to use PVF as a condition of obtaining a loan from Park View Federal. (ECF #50-1). She further attests that in the year Mr. Wyman refinanced his home (2009), borrowers opted to use different title service providers 16% of the time (490 out of 3143 closings), and that each of these customers received the same documents as Mr. Wyman did. (ECF #50-1). Ms. Johnson attests that any approved title company that Mr. Wyman would have requested, would have been approved, and that because he did not make any such request prior to closing, PVF utilized a HUD-1 form identifying PVF Title as the title insurance company for his closing, as they had indicated they would do in the ABA disclosure. (ECF # 50-1; 50-2).
Plaintiff misconstrues PVF's arguments, contending that PVF's stance is that "once the [ABA Disclosure] is provided, a borrower can never prove required use." This is not PVF's position in this action. PVF simply asks the Court to take into account the ABA disclosure and treat it as evidence that customers were not required to use PVF Title. It in no way expects the Court to ignore any contrary evidence. The problem for Plaintiff is that he has submitted no contrary evidence. Thus, this case is distinguishable from the cases cited by Plaintiff in support of his position, where the courts denied summary judgment because the Plaintiffs in those cases had provided evidence that the lenders at issue did not act in accordance with the representations made in their ABA Disclosures.
Mr. Wyman's entire case relies solely on a statement in the Good Faith Estimate that "[a] provider will be chosen from [PVF's] `title company list.'" Even taken in the light most favorable to the Plaintiff, this does not constitute evidence that any particular provider (including PVF Title) was a required provider of title insurance for this transaction. At best, this statement could be read as a requirement that title insurance be provided by some company on PVF's company list. This, however, is not "a situation in which a person must use a particular provider of settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service," (emphasis added), and, therefore, does not meet the definition of "required use" as set forth in 24 C.F.R. § 3500.2.
IV. CONCLUSION
For the reasons set forth above, Defendants' Motions for Summary Judgment are GRANTED.
IT IS SO ORDERED.
DATED: November 23, 2010
1. Standing
Defendants challenge plaintiffs standing to assert Counts I and II of the complaint. Standing requires a true a case or controversy. U.S. CONST. art. III, § 2. Specifically, plaintiffs must establish: (1) an injury in fact that is concrete and particularized and actual or imminent, not conjectural or hypothetical, (2) a causal connection between the injury and the defendants' wrongful conduct, and (3) meaningful redress through a favorable decision. Berg v. Obama, 586 F.3d 234, 239 (3d Cir. 2009) (citing Taliaferro v. Darby Tp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006)); see also United States v. Hayes, 515 U.S. 737, 742-43 (1995); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
Defendants argue plaintiffs sustained no actual or imminent injury on March 7, 2008. Erin voluntarily removed herself from the apartment after Barry and Worley threatened Jeffrey with imprisonment. Erin expressed her knowledge that Barry and Worley lacked authority to impose a probation condition. Defendants possessed no method of exerting control over Erin as she was neither employed by, nor on probation in Lebanon County. Defendants assert that plaintiffs' relationship was not disturbed in any manner and, therefore, no constitutional violations occurred.
Taking the complaint in the light most favorable to the plaintiffs, the court finds that the requirements of standing have been satisfied. Accepting the allegations as true, as the court must in this procedural posture, plaintiffs were ordered to disassociate by Barry, the head of adult probation. Barry declared that she had carte blanche with respect to restrictions on Jeffrey's probation. Criminal charges were filed against Erin after which Barry telephoned Erin's supervisors at Fort Meade. Jeffrey was summoned for an alleged probation violation and Worley warned that the probation department would conjure up some form of charges against Erin and Jeffrey. Leahy subjected Jeffrey to questioning about Jeffrey's relationship with Erin, including questions focused on the intimate details of their relationship, all in the presence of Barry. That Erin and Jeffrey continued to see each other does not equate to the absence of constitutional injury.
2. Freedom to Associate Under the First Amendment
In Count I, Plaintiffs allege that the Constitution secures for them a First Amendment right to associate with each other, fall in love and have intimate relations with each other. Defendants allege no such right exists in the First Amendment, therefore the count should be dismissed without leave to amend.
The First Amendment nowhere explicitly protects the freedom to associate, but the Supreme Court has established the right to associate to be a fundamental right protected by the Constitution. NAACP v. Alabama, 357 U.S. 449, 460-61 (1958). The Supreme Court has recognized the right in "two distinct senses."Roberts v. U.S. Jaycees, 468 U.S. 609, 617 (1984).
In one line of decisions, the court has concluded that choices to enter into and maintain certain intimate human relationships must be secured against undue intrusion by the State because of the role of such relationships in safeguarding the individual freedom that is central to our constitutional scheme. In this respect, freedom of association receives protection as a fundamental element of personal liberty. In another set of decisions, the Court has recognized a right to associate for the purpose of engaging in those activities protected by the First Amendment — speech, assembly, petition for the redress of grievances, and the exercise of religion. The Constitution guarantees freedom of association of this kind as an indispensable means of preserving other individual liberties.Id. at 617-18. Courts have utilized the above passage to conclude that the First Amendment protects both expressive association and intimate association. See Behm v. Luzerne County Children Youth Policy Makers, 172 F. Supp. 2d 575, 585 (M.D. Pa. 2001); Schultz v. Wilson, Civ. A. No. 1:04-CV-1823, 2007 WL 4276696 at *7 (M.D. Pa. Dec. 4, 2007); Pi Lambda Phi Fraternity, Inc. v. Univ. of Pittsburgh, 229 F.3d 435, 438 (3d Cir. 2000) (citing Roberts, 468 U.S. at 617-18).
The Supreme Court's decisions in Roberts and its progeny do not clearly indicate whether the right to intimate association is rooted in the First Amendment, the Fourteenth Amendment, or both. The Court's discussion of the right to intimate association inRoberts is supported mainly by citations to cases rooted in the Fourteenth Amendment. See Roberts, 468 U.S. at 619-20 (citing cases such as: Zablocki v. Redhail, 434 U.S. 374 (1978); Moore v. East Cleveland, 431 U.S. 494 (1977); Wisconsin v. Yoder, 406 U.S. 205 (1972); Griswold v. Connecticut, 381 U.S. 479 (1965); Pierce v. Soceity of Sisters, 268 U.S. 510 (1925); Stanley v. Illinois, 405 U.S. 645 (1972); Stanley v. Georgia, 394 U.S. 557 (1969);Loving v. Virginia, 388 U.S. 1 (1967)). Admittedly, the description of the right to intimate association as a "fundamental element of personal liberty" sounds in Fourteenth Amendment substantive due process terms. Nonetheless, Supreme Court cases following Roberts suggest that the right to intimate association has roots in the First Amendment as well. See Bd. of Dir. of Rotary Internat'l v. Rotary Club of Durante, 481 U.S. 537, 545 (1987) (discussing protected intimate relationships and stating that "we have not held that constitutional protection is restricted to relationships among family members. We have emphasized that the First Amendment protects those relationships, including family relationships, that presuppose deep attachments and commitments to the necessarily few other individuals with whom one shares not only a special community of thoughts, experiences, and beliefs but also distinctively personal aspects of one's life.") (internal quotations and citations omitted);City of Dallas v. Stanglin, 490 U.S. 19, 25 (1989) (holding that "the activity of these dance-hall patrons — coming together to engage in recreational dancing — is not protected by the First Amendment. Thus this activity qualifies neither as a form of `intimate association' nor as a form of `expressive association' as those terms were described in Roberts."); Boy Scouts of America v. Dale, 530 U.S. 640, 698 n. 26 (2000) (scope of right to intimate association "unclear" but Boy Scouts of America does not qualify as an intimate association).
Defendants argue that the First Amendment does not protect the freedom of intimate association, (Doc. 7 at 20), and cite toSchlarp v. Dern, 610 F. Supp. 2d 450, 461-62 n. 7 (W.D. Pa. 2009), for the propositions that only expressive association is rooted in the First Amendment, and that intimate association is a freedom protected by the Fourteenth Amendment. The court inSchlarp stated that the right to intimate association is properly characterized as a substantive due process right and that other courts frequently mischaracterize the right as a First Amendment right, "[p]erhaps . . . due, in some instances, to the right of intimate association . . . overlapping with a distinct right grounded in the First Amendment." Id. at 462 n. 7 (citations omitted); see also Montgomery v. Stefaniak, 410 F.3d 933, 937 (7th Cir. 2005) (intimate association protected by Fourteenth Amendment personal liberty, not First Amendment); Sanitation and Recycling Indus., Inc. v. City of New York, 107 F.3d 985, 996 (2d Cir. 1997) (same); Nero v. Hosp. Auth. of Wilkes Cnty., 86 F. Supp. 2d 1214, 1229 (S.D. Ga. 1998) (same).
There appears to be a circuit split on the issue, however, the majority of circuits, including the Third Circuit, finds a right to intimate association protected under the First Amendment, as well as an intimate association or privacy right protected under the Fourteenth Amendment substantive due process clause. See Starling v. Bd. of Cnty. Com'rs, 502 F.3d 1257, 1261 n. 3 (11th Cir. 2010); Iota Xi Chapter of Sigma Chi Fraternity v. Patterson, 566 F.3d 138, 146 (4th Cir. 2009) (noting First Amendment protects both intimate and expressive association); Wingate v. Gage Cnty. Sch. Dist., No. 34, 528 F.3d 1074, 1081-82 (8th Cir. 2008); Dible v. City of Chandler, 515 F.3d 918, 929-30 (9th Cir. 2008) (discussing right to privacy and intimate association under First Amendment); Chi Iota Colony of Alpha Epsilon Pi Fraternity v. City Univ. of N.Y., 502 F.3d 136 (2d Cir. 2007); Beecham v. Henderson County, Tennessee, 422 F.3d 372 (6th Cir. 2005); see generally Nancy Catherine Marcus, The Freedom of Intimate Association in the Twenty First Century, 16 GEO. MASON U. CIV. RTS. L.J. 269, 287 n. 95 (2006) (noting the split).
Cases in this district make clear that the First Amendment does indeed protect the freedom of intimate association. See e.g., Mills v. City of Harrisburg, 589 F. Supp. 2d 544, 554 n. 9 (M.D. Pa. 2008) (rejecting First Amendment right of intimate association claim by plaintiff charged with patronizing a prostitute); Schultz v. Wilson, Civ. A. No. 1:04-CV-1823, 2007 WL 4276696 at *9 (M.D. Pa. Dec. 4, 2007) ( First Amendment association claim fails under either expressive or intimate association theory).
The freedom to intimate associations is the right to maintain such private relationships free of state intrusion. See Pi Lambada, 229 F.3d at 441. Protected intimate associations include familial relationships involving deep attachments and commitments and the sharing of personal aspects of one's life. See Roberts, 468 U.S. at 619-20 (relationships protected by right to intimate association are "those that attend the creation and sustenance of a family-marriage, . . . the raising and education of children, . . . and cohabitation with one's relatives"); see also Pi Lambda, 229 F.3d at 441-42; Schultz, 2007 WL 4276696 at *8. However, the Supreme Court has never held that constitutionally protected intimate associations are restricted to relationships among family members. Bd. of Dir. of Rotary Int'l, 481 U.S. at 545.
Intimate associations are characterized by attributes such as "relative smallness, a high degree of selectivity in decisions to begin and maintain the affiliation, and seclusion from others in critical aspects of the relationship. Roberts, 468 U.S. at 620. Thus, the relevant factors in determining whether an intimate association exists include "size, purpose, policies, selectivity, congeniality, and other characteristics that in a particular case may be pertinent." Id.; Pi Lambda, 229 F.3d at 442. Indeed, dating may qualify as an associational activity protected by the First Amendment, see Kicklighter v. Evans Cnty. Sch. Dist., 968 F. Supp. 712, (S.D. Ga. 1997) (citing Wilson v. Taylor, 733 F.2d 1539, 1544 (11th Cir. 1984)), though the degree of constitutional protection afforded to an association depends on the characteristics of the relationship. Roberts, 468 U.S. at 620 ("Determining the limits of state authority over an individual's freedom to enter into a particular association therefore unavoidably entails a careful assessment of where that relationship's objective characteristics locate it on a spectrum from the most intimate to the most attenuated of personal attachments.").
At this juncture, the court finds that the complaint alleges sufficient facts to state a claim for violation of plaintiffs' First Amendment rights to intimate association. See Freebery v. Coons, 589 F. Supp. 2d 409, 421 (D. Del. 2008) (citing Lyng v. Int'l Union, et al., 485 U.S. 360, 365 (1988). Although policies restricting intimate associations do not necessarily violate the Constitution, see Flaskamp v. Dearborn Pub. Sch., 385 F.3d 935 (6th Cir. 2004) (a school board policy prohibiting sexual relationships between teachers and former students who had graduated within the past year or two did not violate plaintiff's right to intimate association), the instant complaint alleges that no such policy or restriction existed. Accordingly, defendants' motion to dismiss this claim will be denied.
3. Fourteenth Amendment Right to Intimate Relations
The due process clause of the Fourteenth Amendment has been construed to protect an individual's privacy interest including the right to marry, procreate, rear children, and become involved in consensual sexual relationships. Lawrence v. Texas, 539 U.S. 558, 573-74 (2003). Plaintiffs allege in Count II that Lebanon County and the defendants individually violated their substantive due process right to privacy in their intimate relations.
Plaintiffs allege they had an intimate and private relationship and that defendants interfered with that private relationship by ordering that plaintiffs not see each other, threatening imprisonment, and filing criminal charges to thwart their relationship. The court's rationale for denying defendants' motion to dismiss the First Amendment intimate association rights, is equally applicable to the Fourteenth Amendment claims. Thus, the court finds that the complaint sufficiently states a claim for violations of the Fourteenth Amendment right to privacy.
Asserting a claim against a government employee in his official capacity is simply another way of asserting a claim against the governmental body itself. Mitros v. Borough of Glenolden, 170 F. Supp. 2d 504, 506 (E.D. Pa. 2001) (citing Brandon v. Holt, 469 U.S. 464, 471-72 (1985)) ("Where a suit is brought against a public offic[ial] in his official capacity, the suit is treated as if [it] were brought against the governmental entity of which he is an offic[ial]."). Therefore, the court will consider official capacity and municipal liability together.
In the instant matter plaintiffs generally aver that "Lebanon County carried on an unlawful policy of imposing illegal special probation conditions against Adult Probation Department clients without Court orders and without hearings," (Doc. 1 ¶ 33) in violation of plaintiffs First and Fourteenth Amendment rights to associate, and that the policy was carried out intentionally by defendants Barry and Worley. (Id. ¶ 34).
A municipality, such as Lebanon County, may be liable under 42 U.S.C. § 1983 for the violation of an individual's federal statutory or constitutional rights when it implements an official policy or custom that results in a constitutional deprivation.See Monell v. Dept. of Soc. Servs., 436 U.S. 658, 694 (1978) ("It is when execution of a government's policy or custom, whether made by its lawmakers or by those whose edicts or acts may fairly be said to represent official policy, inflicts the injury that the government as an entity is responsible under § 1983."). A municipality cannot, however, be held liable solely for the acts of its employees on a respondeat superior theory. Id. at 691.
Liability under § 1983 must stem from policy making authority. Only an individual with final decisionmaking authority can make official policy on behalf of the municipality. See Pembauer v. City of Cincinnati, 475 U.S. 469, 483-84 (1986). "[I]n order to ascertain who is a policy maker a court must determine which official has final, unreviewable discretion to make a decision or take action." Kneipp v. Tedder, 95 F.3d 1199, 1213 (3d Cir. 1996). Whether a person has final decisionmaking authority is a question of state law. McGreevy v. Stroup, 413 F.3d 359, 368 (3d Cir. 2005); Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701 (1989); City of St. Louis v. Praprotnik, 485 U.S. 112 (1988).
A single decision by an individual with policy making authority can be enough to impose liability on a municipality. See Pembaur, 475 U.S. at 480 (stating that "it is plain that municipal liability may be imposed for a single decision by municipal policymakers under appropriate circumstances"); McGreevy, 413 F.3d at 367-68. However, not every decision by an officer subjects a municipality to liability. "Municipal liability under § 1983 attaches where- and only where — a deliberate choice to follow a course of action is made from among various alternatives by the official or officials responsible for establishing final policy with respect to the subject matter in question." Pembaur, 475 U.S. at 483. If an employee's action is subject to discretionary review, the employee is not a final policymaker under § 1983. Brennan v. Norton, 350 F.3d 399, 428 (3d Cir. 2003).
In the instant matter, plaintiffs allege no facts indicative of a policy or custom of imposing probation conditions without court orders. Plaintiffs allege only the March 7, 2008 confrontation in which Barry directed Jeffrey to refrain from contact with Erin. The complaint is devoid of allegations that any defendant attempted to enforce the alleged condition or that conditions were similarly imposed upon other probationers without the imprimatur of the court. Furthermore, plaintiffs do not allege that defendants Barry, Worley or Leahy are final policy makers for Lebanon County, nor do plaintiffs denote any final policymaker as the source. The complaint does not delineate a sufficient factual basis for this Monell claim, however, the court will grant leave to amend.
In plaintiffs' brief in opposition to the motion to dismiss, plaintiffs claim that "it is clearly reasonable to infer that the individual Defendants could only act in such a rouge course of conduct if it was authorized by the official policies and practices of the County." (Doc. 10 at 15). The court disagrees. Plaintiffs' complaint must contain factual allegations, not merely conclusory assertions, indicating a policy or custom, and must identify a final policymaker responsible for the alleged policy or custom. The complaint provides no more than a formulaic recitation of the elements of a cause of action for municipal liability, which the court must disregard. Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949 (2009).
5. Individual Defendant Liability
In order to hold defendants liable in their individual capacities, plaintiffs must show that each defendant individually participated in or approved of the alleged constitutional violation. See C.N. v. Ridgewood Bd. of Educ., 430 F.3d 159, 173 (3d Cir. 2005) (discussing the § 1983 liability of a school board and individual defendants in context of alleged privacy and speech violations). The Supreme Court has established a two-part inquiry for individual capacity liability: the court determines whether there has been a violation of a constitutional right, and the court determines whether that right is clearly established. Pearson v. Callahan, 129 S. Ct. 808, 818 (2009) (stating that courts have discretion to determine the appropriate order in which to address the two prongs of the test); see also Saucier v. Katz, 533 U.S. 194, 201 (2001).
In the instant matter, defendants argue that they are entitled to qualified immunity. An official is entitled to qualified immunity when "[his or her] conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Sharrar v. Felsing, 128 F.3d 810, 826 (3d Cir. 1997) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982)). When a reasonable official would have known his conduct was unlawful, qualified immunity is generally not available. Leveto v. Lapina, 258 F.3d 156, 162 (3d Cir. 2001). At the motion to dismiss stage, a claim may be dismissed on the grounds of qualified immunity when immunity is established on the face of the complaint. See Leveto, 258 F.3d at 161.
Defendants argue that the right to intimate association, whether in the First or Fourteenth Amendment, is not clearly established in this context. Specifically, defendants argue that the right to intimate association is not absolute and the placement of restrictions on the liberty of individuals convicted of violating criminal laws is constitutional. (Doc. 7 at 21). Defendants also assert that there was no constitutional violation — only an isolated comment during the March 7, 2008 encounter which plaintiffs recognized to be "empty and meaningless" (Doc. 7 at 6), underscored by the fact that plaintiffs continued their relationship unabated. (Id. at 24).
Defendants correctly observe that probationers liberties may be constitutionally restricted. See Griffin v. Wisconsin, 483 U.S. 868, 874 (1987); Id. (probationers have "conditional liberty properly dependent on observance of special [probation] restrictions") (quoting Morrissey v. Brewer, 408 U.S. 471, 480 (1972)). Indeed, the Supreme Court has held that, supervision "is a `special need' of the State permitting a degree of impingement upon privacy that would not be constitutional if applied to the public at large." Id. at 875. It is also undisputed that Jeffrey was on probation and subject to certain restrictions at the time of the alleged constitutional violations. Nonetheless, the complaint states sufficient facts to state a prima facie case, and immunity is not established on the face of the complaint. Such a determination must await the development of a factual record.
B. Fourth Amendment Malicious Prosecution Claim
In Count III, Erin alleges that defendants Barry and Leahy initiated her criminal charges without probable cause in violation of her Fourth Amendment rights.
To prevail on Fourth Amendment malicious prosecution claim in a § 1983 action, Erin must show: (1) defendants initiated a criminal proceeding; (2) the criminal proceeding terminated in Erin's favor; (3) the proceeding was initiated without probable cause; (4) defendants acted maliciously or for a purpose other than bringing Erin to justice; and (5) Erin suffered a deprivation of liberty consistent with the concept of seizure as a consequence of the legal proceeding. McKenna v. City of Philadelphia, 582 F.3d 447, 461 (3d Cir. 2009) (citing Estate of Smith v. Marasco, 318 F.3d 497, 521 (3d Cir. 2003).
An essential element of a malicious prosecution claim is that the criminal proceeding terminated in favor of the accused — in other words, indicating the innocence of the accused. Kossler v. Crisanti, 564 F.3d 181, 187 (3d Cir. 2009) (en bane) (citingDonahue v. Gavin, 280 F.3d 371, 383 (3d Cir. 2002). A favorable termination is typically signified by: (1) a discharge by a magistrate at a preliminary hearing; (2) the refusal of a grand jury to indict; (3) the formal abandonment of the proceedings by the prosecutor; (4) the quashing of an indictment or information; (5) an acquittal; or (6) a final order in favor of the accused by a trial or appellate court. Kossler, 564 F.3d at 187 (citingDonahue, 280 F.3d at 383). A favorable termination requirement is necessary to "avoid[] parallel litigation over the issues of probable cause and guilt." Heck v. Humphrey, 512 U.S. 477, 484 (1994) (quoting 8 S. Speiser, C. Krause, A. Gans, American Law of Torts § 28:5, p. 24 (1991)) (internal quotations omitted). "[T]o permit a convicted criminal defendant to proceed with a malicious prosecution claim would permit a collateral attack on the conviction through the vehicle of a civil lawsuit." Id.
In the instant matter, Lebanon County prosecuted Erin on two counts. She was convicted on one count of tampering with public records, and acquitted on one count of obstructing the administration of law. When there is a split verdict, the court must review the charges brought by the prosecution and determine whether they arose from the same underlying conduct.Kossler, 564 F.3d 181. In Kossler v. Crisanti, the Third Circuit sitting en banc held that a plaintiff could not maintain a malicious prosecution claim when he had been convicted of disorderly conduct but acquitted of aggravated assault and public intoxication. Id. The Third Circuit reasoned that because all three charges arose out of the same underlying conduct, the conviction on one charge was founded on the same factual situation as the other charges, therefore the judgment did not reflect the plaintiff's innocence. Id. at 189. As the court stated: "acquittal on the aggravated assault and public intoxication charges cannot be divorced from [plaintiff's] simultaneous conviction for disorderly conduct when all three charges arose from the same course of conduct," thus the criminal proceeding did not conclude in plaintiff's favor. Id.
In the instant matter, the complaint is clearly deficient with respect to the malicious prosecution claim. Erin does not allege, in even conclusory terms, that her criminal prosecution resulted in a favorable outcome, nor does she allege a seizure under the Fourth Amendment. The claim will be dismissed, but the court will grant plaintiff leave to amend the complaint. Any such amendments must address the Kossler v. Crisanti split verdict scenario as well as the remaining elements of a malicious prosecution claim.See Iqbal, 129 S. Ct. at 1950.
C. Right to Petition for Redress of Grievances
The First Amendment protects the right of persons "to petition the Government for a redress of grievances." U.S. CONST. AMEND. I. In Count IV, plaintiff Erin alleges that defendant Barry violated her First Amendment right to petition for a redress of grievances when Barry contacted Erin's supervisor at Fort Meade. Erin alleges that her decision to contest the criminal charges brought against her constituted a constitutionally protected petitioning activity.
Hence, the threshold question with regard to this claim is whether Erin's action of defending against criminal charges qualifies as petitioning within the meaning of the First Amendment. See Foraker v. Chaffinch, 501 F.3d 231, 235 (3d Cir. 2007). The court finds it does not.
The Petitions Clause of the First Amendment, unlike the free speech clause, refers to specific conduct in which an individual addresses the government and asks the government "to fix what, allegedly, government has broken or has failed in its duty to repair." San Filippo v. Bongiovanni, 30 F.3d 424, 442 (3d Cir. 1994). Such conduct literally involves petitioning the government, either through formal mechanisms, such as lawsuits, grievances and workers compensation claims, or informal mechanisms, such as letters to the government. Foraker, 501 F.3d at 236-37; see also id. at 235-35 (discussing the history of the Petitions Clause).
Defending against criminal charges does not qualify as petitioning the government for a redress of grievances. It involves none of the hallmarks of petitioning such as filing complaints, grievances or letters. The only possible activity that could be considered "petitioning" is the correspondence transmitted in early June of 2008, by counsel for plaintiffs, to defendant Barry, advising Barry that "she had been behaving illegally." (Doc. 1 ¶¶ 20-21). Assuming arguendo that this letter qualifies as First Amendment petitioning activity, the alleged phone call occurred in April of 2008, and the correspondence was not mailed until June. Consequently, Barry's phone call to Erin's employer could not have been in retaliation for Erin's petitioning activities. Similarly, the phone call cannot, as a matter of law, have been made in retaliation for this complaint, which was filed March 8, 2010. Plaintiff has not stated a claim for violation of her First Amendment right to petition for redress of grievances. Amendment on this count would be futile and, therefore, leave to amend will not be permitted.
D. Punitive Damages
Plaintiffs request punitive damages in all counts against all defendants, save for Lebanon County. Defendants argue that plaintiffs have failed to plead facts to satisfy the high burden for punitive damages. (Doc. 7 at 29). Plaintiffs assert that it is premature to address the adequacy of a punitive damages request at the motion to dismiss stage.
The court first notes that plaintiffs are simply incorrect about the timing of consideration of punitive damages claims. Courts can and do address punitive damages claims at the motion to dismiss stage. See Smith v. Central Dauphin Sch. Dist., 419 F. Supp. 2d 639, 649 (M.D. Pa. 2005); Toplisek v. Canon McMillan Sch. Dist., Civ. A. No. 10-767, 2010 WL 4103645 at *5-6 (W.D. Pa. Oct. 18, 2010); Boring v. Google, Inc., 362 Fed. Appx. 273, 283 (3d Cir. 2010) (rejecting plaintiff's claim that punitive damages must always be determined by a jury after discovery, and finding that under the Iqbal pleading standard there was no foundation in the complaint for a demand for punitive damages). Punitive damages are available against individual defendants in § 1983 actions only when "the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others."Central Dauphin Sch. Dist., 419 F. Supp. 2d at 649 (quoting Smith v. Wade, 461 U.S. 30, 56 (1983)).
In the instant matter plaintiffs allege that the prosecution of Erin was "pursued to achieve the vindictive personal goals of Leahy and Barry," (Doc. 1 ¶ 48), and that defendant Barry contacted Erin's supervisors in "an act of blatant retaliation" and lied "in a hateful vindictive retaliatory effort" to injure plaintiff Erin. (Id. ¶¶ 51-52). Although threadbare, these allegations are minimally sufficient to identify evil motive or intent or reckless or callous indifference. The court will permit the development of a factual record on the matters relevant to a punitive damages claim.
IV. Conclusion
For the foregoing reasons, the court will grant in part, and deny in part the motion to dismiss. The motion to dismiss Counts I and II is granted with respect to Lebanon County. The motion is otherwise denied with respect to Counts I and II. Counts III and IV will be dismissed. The court will grant leave to amend the First and Fourteenth Amendment intimate association claims in Counts I and II with respect to Lebanon County, and the Fourth Amendment malicious prosecution claim in Count III.
An appropriate order follows.
Dated: November 23, 2010
ORDERAND NOW, this 23rd day of November, 2010, upon consideration of defendants' motion (Doc. 6) to dismiss, and for the reasons set forth in the accompanying memorandum, it is hereby ORDERED that:
1. The motion (Doc. 7) to dismiss is GRANTED in part as follows:
a. Counts I and II are dismissed as to Lebanon County only with leave to amend;
b. Count III is dismissed with leave to amend;
c. Count IV is dismissed without leave to amend.
2. The motion is DENIED in all other respects.
3. Plaintiffs are GRANTED leave to file, within twenty (20) days of this order, an amended complaint with respect to the First and Fourteenth Amendment intimate association claims in Counts I and II against Lebanon County, and the Fourth Amendment malicious prosecution claim in Count III. If no such amended pleading is filed, the instant matter will proceed on the remaining claims.
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