Opinion
22-CV-5986 (GHW) (JW)
01-24-2024
LISA VASQUEZ, On Behalf of Herself and on Behalf of her Infant Daughter, J.V., Plaintiffs, v. THE REECE SCHOOL, Defendant.
TO THE HON. GREGORY H. WOODS, UNITED STATES DISTRICT JUDGE:
REPORT & RECOMMENDATION
JENNIFER E. WILLIS, UNITED STATES MAGISTRATE JUDGE
Plaintiff Lisa Vasquez (“Vasquez”) brings this case on behalf of herself and her infant daughter, J.V., contesting J.V.'s exclusion from The Reece School pursuant to 42 U.S.C. § 1983 and 29 U.S.C. § 794. Plaintiffs also allege state law claims of negligence, negligent supervision, negligent infliction of emotional distress (“NIED”), and breach of contract. Dkt. No. 23. Before the Court is Defendant's Motion to Dismiss claims in Plaintiffs' Amended Complaint. Dkt. Nos. 23, 28. For the reasons explained herein, I recommend that Defendant's Motion be GRANTED in part and DENIED in part.
While the Notice of Motion says it seeks to “dismiss Plaintiffs' Amended Complaint,” Defendant does not move to dismiss Plaintiffs' state law negligence and negligent supervision claims but only moves to dismiss the 42 U.S.C. § 1983, 29 U.S.C. § 794, negligent infliction of emotional distress, and breach of contract claims. Dkt. No. 30 at 21 (“Defendant respectfully requests this Court dismiss Plaintiffs' Amended Complaint with prejudice as to causes of action 1, 2, 3, 6, and 7.”).
This Court previously issued a Report recommending that Plaintiffs' initial Complaint be dismissed without prejudice. Dkt. No. 21. Prior to that R&R being adopted, the Plaintiffs filed an Amended Complaint. Dkt. No. 23.
I. BACKGROUND
1. Facts
The following facts are drawn from Plaintiffs' Amended Complaint, which the Court takes as true for the purpose of resolving the Motion to Dismiss. See Palin v. N.Y. Times Co., 940 F.3d 804, 810 (2d Cir. 2019).
The Court will also take into consideration the Enrollment Agreement at Dkt. No. 20-1 and the Code of Conduct at Dkt. No. 36-1. “A complaint is [also] deemed to include any written instrument attached to it as an exhibit, materials incorporated in it by reference, and documents that, although not incorporated by reference, are ‘integral' to the complaint.” L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011); see also Madhu v. Socure Inc., No. 1:22-CV-682 (GHW), 2023 WL 6214807, at *5 (S.D.N.Y. Sept. 22, 2023). The Enrollment Agreement and the Code of Conduct are integral to the Complaint because Plaintiffs assert breach of the Agreement as their seventh cause of action. Dkt. No. 23 ¶¶ 107-118; discussed infra.
On November 13, 2017, the New York City Department of Education (“DOE”) classified J.V. as a student with a disability due to a speech and language impairment. Dkt. No. 23 at ¶ 7. The DOE referred J.V.'s case to the Community Based Support Team for placement in a non-public school. Id. ¶ 7. J.V. was not enrolled until May 2019, when “Ms. Vasquez identified the Reece School as a viable option.” Prior to attending the Reece School in May 2019, Defendant and Ms. Vasquez entered into an enrollment contract that covered the 2018-2019 school year. Id. ¶ 17. JV was enrolled for the remainder of the 2019 school year, and then again for the 2019-20 school year. Dkt. No. 23 ¶¶ 7-9. Plaintiffs allege the Enrollment Contract allowed for renewal unless the contract was canceled, which Plaintiffs claim could only be “based on behavior in violation of Reece's Code of Conduct by the student or student's parents.” Id. ¶ 17.
Plaintiffs allege J.V. was subject to “daily verbal, physical, sexual, emotional, [and] psychological attacks” by other students. Id. ¶ 25. The Complaint alleges Defendant personnel failed to prevent these attacks from occurring and did not respond to Vasquez's requests for help. Id. ¶25.
Plaintiffs say “Reece considered J.V. and Ms. Vasquez as a burden. Reece considered J.V.'s disabilities something they did not want to deal with. [The Executive Director] in particular disdained Ms. Vasquez's emails requesting reports and updates on how Reece was implementing education programs and related services to address J.V.'s disabilities.” Id. ¶ 40.
Rather than “deal with Ms. Vasquez's requests for protection of her daughter from the frequent and persistent attacks,” instead, in May 2020, “Reece informed Ms. Vasquez that J.V. would not be allowed to return and remain enrolled at Reece.” Id. ¶ 41-42.
Plaintiffs contend that “[a]s a direct and proximate result of the Defendant's acts, Plaintiffs suffered the following injuries and damages: (a) severe emotional distress; (b) loss of educational opportunity; (c) medical expenses and (d) attorney's fees and costs.” Id. ¶ 44.
2. Procedural History
In July 2022, Plaintiffs filed their Complaint asserting the following causes of action: (1) deprivation of J.V.'s rights pursuant to 42 U.S.C. § 1983; (2) discrimination against J.V. pursuant to 29 U.S.C. § 794; (3) deprivation of Vasquez's rights pursuant to 42 U.S.C. § 1983; (4) negligence; (5) negligent supervision; (6) NIED; and (7) breach of contract. Dkt. No. 1. That same month, “all dispositive motions” were referred to this Court. Dkt. No. 5.
In October 2022, Defendant filed a Motion on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c). In February 2023, this Court issued a Report and Recommendation concluding that Defendant's Motion on the Pleadings should be granted. Dkt. No. 21.
Before the R&R was adopted, the Plaintiff objected and then filed an Amended Complaint. Dkt. No. 22-23. Defendants then filed a Rule 12(b)(6) Motion to Dismiss all claims aside from the state law negligence and negligent supervision claims. Dkt. No. 28. The Court heard oral argument on September 13, 2023. Dkt. No. 37.
See supra note 1; Dkt. No. 30 at 21 (“Defendant respectfully requests this Court dismiss Plaintiffs' Amended Complaint with prejudice as to causes of action 1, 2, 3, 6, and 7.”).
II. LEGAL STANDARD
A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion to dismiss under Rule 12(b)(6), the Court “accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor.” See Madhu v. Socure Inc., No. 1:22-CV-682 (GHW), 2023 WL 6214807, at *5 (S.D.N.Y. Sept. 22, 2023) citing Palin v. N.Y. Times Co., 940 F.3d 804, 810 (2d Cir. 2019) quoting Elias v. Rolling Stone LLC, 872 F.3d 97, 104 (2d Cir. 2017).
Although Rule 8 “does not require ‘detailed factual allegations,' ... it demands more than an unadorned, ‘the-defendant-unlawfully-harmed-me' accusation.” Id. citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A pleading that merely offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Id. quoting Twombly, supra at 555. To survive a motion to dismiss, a complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. citing Iqbal, supra at 678. A claim is “facially plausible when a plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. citing Twombly, supra. Determining whether a complaint states a plausible claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 6 citing Iqbal, supra.
“In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint.” Id. citing DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010).
A court “may also consider documents that are ‘integral to' the complaint.” Id. For a document to be considered “integral,” the Complaint “must rely heavily upon its terms and effects.” See Madhu, supra, citing DiFolco. As “no dispute exists regarding the authenticity or accuracy of” the Enrollment Contract or the Code of Conduct, both documents are in the record (Dkt. Nos. 20-1 and 36-1), and the Amended Complaint relies “heavily” upon the contract and code in asserting the breach of contract claim, the Court finds that those two documents are “integral” to the Amended Complaint. Accordingly, they will be considered in deciding this Motion. See generally Madhu citing DiFolco supra, and Faulkner v. Beer, 463 F.3d 130, 134 (2d Cir. 2006)(“even if a document is ‘integral' to the complaint, it must be clear on the record that no dispute exists regarding the authenticity or accuracy of the document.”).
III. DISCUSSION
A. Section 1983 Claims
Plaintiff brings claims under § 1983 alleging the deprivation of services she claims she is entitled to under “federal and state law, including under the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq. and N.Y. Education Law Article 89.” Dkt. No. 23 at ¶ 51. “To state a claim under § 1983, a plaintiff must allege two elements: (1) the violation of a right secured by the Constitution and laws of the United States, and (2) the alleged deprivation was committed by a person acting under color of state law.” DiPizio v. Empire State Dev. Corp., 745 Fed. App'x 385, 388 (2d Cir. 2018) (internal citation and quotations omitted).
Crucial to this case, both sides agree that the Defendant is a “private school.” Dkt. Nos. 23 at ¶10 (“Reece was and is an approved New York State Private School.”); 28 at 8 (“The Reece School is a private Section 853 School, meaning that it is a school for special needs children ranging from severe behavior issues to developmental delays.”).
On the one hand, as the Supreme Court has explained, “[i]f the Fourteenth Amendment” and the protections embodied in § 1983 are “not to be displaced,” their “ambit cannot be a simple line between States and people operating outside formally governmental organizations.” See Brentwood Acad. v. Tennessee Secondary Sch. Athletic Ass'n, 531 U.S. 288, 295 (2001). But on the other hand, the “cases try to plot a line between state action subject to Fourteenth Amendment [and § 1983] scrutiny and private conduct (however exceptionable) that is not.” Id. The task of the Court is to ensure that § 1983's standards are only “invoked when it can be said that the State is responsible for the specific conduct of which the plaintiff complains.” Id. citing Blum v. Yaretsky, 457 U.S. 991 at 1004 (1982)(emphasis in original); see also Grogan v. Blooming Grove Volunteer Ambulance Corps, 768 F.3d 259, 264 (2d Cir. 2014)(requiring a showing that the “allegedly unconstitutional conduct is fairly attributable to the State.”); Fabrikant v. French, 691 F.3d 193, 207 (2d Cir. 2012).
There is “no single test to identify state actions and state actors.” See Cooper v. U.S. Postal Serv., 577 F.3d 479, 491 (2d Cir. 2009). But three main tests have emerged. The first test, the “compulsion test” asks whether “the entity acts pursuant to the coercive power of the state or is controlled by the state.” See Sybalski v. Indep. Grp. Home Living Program, Inc., 546 F.3d 255, 257 (2d Cir. 2008). The second test, the “joint action” or “close nexus” test, investigates whether “the state provides significant encouragement to the entity, the entity is a willful participant in joint activity with the state, or the entity's functions are entwined with state policies.” Id. The third test is the “public function” test. Id. That test analyzes whether “the entity has been delegated a public function by the state.” Id; see also Jackson v. Ramirez, No. 1:15-CV-617 (GHW), 2016 WL 796854, at *9 (S.D.N.Y. Feb. 22, 2016), aff'd, 691 Fed.Appx. 45 (2d Cir. 2017)(explaining the three state action tests and citing Sybalski supra).
Each test will be addressed in turn. As explained below, the Court recommends that Plaintiffs' § 1983 claims be dismissed because Plaintiffs have failed to allege that Defendant is a state actor under any of the three tests.
1. Compulsion Test
Under the “compulsion test,” Plaintiffs must allege that state regulation “‘evidence[s] governmental coercion or encouragement' over the particular activity that allegedly caused the constitutional injury.” Dawkins v. Biondi Educ. Ctr., No. 13-CV-2366 (KMK), 164 F.Supp.3d 518, 526 (S.D.N.Y. 2016) (internal citation omitted). “A private entity...is not ‘a state actor where its conduct is not compelled by the state but is merely permitted by state law.'” Id. (internal citation omitted). The State can be “held responsible for a private decision only when it has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State.” See Hernandez v. City of New York, No. 1:18-CV-6418 (GHW), 2022 WL 316938, at *5 (S.D.N.Y. Feb. 2, 2022).
Like the initial Complaint, the Amended Complaint also states that “[a]s a New York state approved non-public school that receives city, state and federal public funding for students with disabilities that qualify for such funding, Reece is required to admit students regardless of their disability and is prohibited from discriminating against students based on their disability.” Dkt. No. 23 ¶ 15. The Amended Complaint also alleges that Defendant “acted under the color of state and federal law.” Id. ¶ 49. The previous R&R found that these allegations alone were “insufficient to meet the compulsion test.” Dkt. No. 21.
However, Plaintiff added new allegations in the Amended Complaint regarding the Community Based Support Team (“CBST”) and the process for placement at the Reece School. Dkt. No. 23 at ¶ 11-15. According to the Plaintiff, “when the DOE determines that there is no appropriate public-school program for a child, the [Individualized Education Program (“IEP”)] team.can refer the child to the CBST.” Id. at ¶10. Then, “CBST matches students with state-approved non-public schools.” Id. at ¶11.
See generally https://www.nysed.gov/special-education/individualized-education-program-iep.
In the Amended Complaint, Plaintiffs emphasize that “all kids that attend Reece must have an IEP. Reece received funding from the DOE for implementing the IEP for these students, and has an obligation to follow each student's IEP. More specifically, Reece will only get funded by CBST if the mandates in each student's IEP are followed.” Id. at ¶12.
However, while the Amended Complaint now alleges that “Reece is heavily influenced and controlled by the rules and regulations that the State and DOE adopts for schools providing the education and programs for special needs individuals,” like the initial Complaint, it still fails to provide a specific allegation that Defendant is regulated by the state in the school's handling of bullying, bullying complaints, or the school's process for disenrolling students.
As Courts have held, “even extensive regulation by the government does not transform the actions of the regulated entity into those of the government.” See Dawkins v. Biondi Educ. Ctr., No. 13-CV-2366 (KMK), 2017 WL 325262, at *5-6 (S.D.N.Y. Jan. 20, 2017); S.F. Arts & Athletics, Inc. v. U.S. Olympic Comm., 483 U.S. 522, 544 (1987); see Cain v. Christine Valmy Int'l Sch. of Esthetics, Skin Care, & Makeup, No. 16-cv-170 (GHW), 216 F.Supp.3d 328, 333 (S.D.N.Y. 2016) citing Grogan v. Blooming Grove Volunteer Ambulance Corps, 768 F.3d 259, 268 (2d Cir. 2014); see also Bromfield v. Bronx Lebanon Special Care Ctr., Inc., No. 16-CV-10047(ALC)(SLC), 2022 WL 19406559, at *8 (S.D.N.Y. Dec. 8, 2022); Hamlin ex rel. Hamlin v. City of Peekskill Bd. of Educ., 377 F.Supp.2d 379, 388-90 (S.D.N.Y. 2005).
Instead, “the state's regulation must actually evidence governmental coercion or encouragement over the particular activity that allegedly caused the constitutional injury.” Dawkins, supra at 526 (emphasis added); see also Powe v. Miles, 407 F.2d 73, 81 (2d Cir. 1968) (“the state must be involved not simply with some activity of the institution alleged to have inflicted injury upon a plaintiff but with the activity that caused the injury.”)(emphasis added); Joseph v. Metro. Museum of Art, No. 1:15-CV-9358 (GHW), 2016 WL 3351103, at *4 (S.D.N.Y. June 15, 2016), aff'd, 684 Fed.Appx. 16 (2d Cir. 2017)(“The Court's inquiry begins by identifying the specific conduct of which the plaintiff complains, rather than the general characteristics of the entity, and under each test the fundamental question is whether the private entity's challenged actions are fairly attributable to the state.”); D.W.M. by Moore v. St. Mary School, No. 18-CV-3099 (DRH) (GRB), 2019 WL 4038410, at *9-10 (E.D.N.Y. Aug. 27, 2019) (finding that despite plaintiffs attending defendant school, plaintiffs did not allege that defendants “were regulated by the State with regards to the specific actions at issue.”).
Here, there is no allegation of any specific government regulation that would compel the “particular activity” at issue: the Reece School's refusal to re-enroll J.V. See Dawkins, supra. Thus, even taking as true the allegations that the school follows state-mandated IEPs and is regulated in its provision of educational programs, there is nothing in the Amended Complaint to suggest that the refusal to enroll J.V. was a decision that is “fairly attributable to the State.” See generally Cain v. Christine Valmy Int'l Sch. of Esthetics, Skin Care, & Makeup, No. 16-CV-170 (GHW), 216 F.Supp.3d 328, 334 (S.D.N.Y. 2016).
Therefore, the Defendant is not a state actor under the compulsion test.
2. Joint Action/Close Nexus Test
The second test, the “joint action” or “close nexus” test, investigates whether “the entity is a willful participant in joint activity with the state, or the entity's functions are entwined with state policies.” See Sybalski, supra. Plaintiffs claim the joint action test is their strongest test. Dkt. No. 38 at 13.
At the oral argument, Plaintiffs' counsel described the issue before the Court: “we're alleging.. ..you can have...three types of cases. One case, a student has an IEP, is given a public school placement, goes to that public school, And the public school implements the program. Number two, the child gets an IEP.the parent chooses to send their child to a private school, and then they seek tuition funding. Those are the two extremes. Extreme number one...public school. Extreme number two...private school. What we have here is in the middle category.the Department of Education create[s] this community-based team and they find specific schools and they ask the schools, can you take this child?” Dkt. No. 38 at 12-13. Plaintiffs' counsel asserted that “all the students, over 300 applications a year...are all referred by the CBST team. They're all getting funding through this program...” Id.
The Amended Complaint is less than clear as to whether “all the students are referred by the CBST” and whether the Reece School receives all its funding from the state as Plaintiffs' counsel stated at oral argument. While the Complaint alleges that “all the students” have an IEP, that students with an IEP are generally referred to the CBST, and that Reece receives “over 300 applications” each year from the CBST, there is no specific allegation that every single student at Reece is only there because they were referred by the CBST nor a specific allegation that the Reece school is entirely funded by the State. Nevertheless, for the sake of argument, the Court will assume that all the students at the school are referred by the CBST and that all of Reece's funding comes via tuition reimbursement from the State.
Plaintiffs contend that this is a case of first impression. Dkt. No. 38 at 17 (“so I haven't been able to find any cases on this point.”). When asked whether the Defendant had found any cases speaking to this issue, Defendant's counsel directed the Court to D.W.M. by Moore v. St. Mary School. See No. 18-CV-3099 (DRH) (GRB), 2019 WL 4038410, at *9-10 (E.D.N.Y. Aug. 27, 2019). That case, while indeed finding the private school to not be a state actor, involved a Catholic school, not a school where the children were referred by the State. Moreover, the school in that case, St. Mary's, was not entirely funded by the state. Id.
The Court is unaware of any case squarely addressing the question of whether a private school is a state actor if every single student is placed at the school by a state agency and every single dollar financing the school is paid by the state.
To begin, like with extensive regulation, Courts have held that “it is well-settled that the receipt of extensive governmental funding is insufficient to subject a private entity to liability under § 1983.” Dawkins v. Biondi Educ. Ctr., No. 13-CV-2366 (KMK), 2017 WL 325262, at *6-7 (S.D.N.Y. Jan. 20, 2017)(finding school to not be a state actor despite Plaintiff alleging that public funds accounted for 91% of Defendant's budget); see also Rendell-Baker v. Kohn, 457 U.S. 830 at 832-33, 843 (1982) (rejecting “state action” argument for employment terminations effected by a private school that received 90-99% of its funding from the state); Blum v. Yaretsky, 457 U.S. 991, 1011 (1982) (finding nursing home to not be a state actor despite fact state paid the medical expenses of more than 90% of the patients); Liburd v. Bronx Lebanon Hosp. Ctr., No. 07-CV-11316 (HB), 2008 WL 3861352, at *8 (S.D.N.Y. Aug. 19, 2008) (a “predominance of public funding is not conclusive evidence of state action.”); Grogan v. Blooming Grove Volunteer Ambulance Corps, 768 F.3d 259, 268 (2d Cir. 2014) (finding Defendant to not be a state actor even though it “derive[d] the vast majority of its funding from public sources.”); see also Moglia v. Sullivan County Head Start, Inc., No. 97-CV-4891 (BDP), 988 F.Supp. 366 (S.D.N.Y. 1997), affd, 159 159 F.3d 1347 (2d Cir. 1998); Hamlin ex rel. Hamlin v. City of Peekskill Bd. of Educ., 377 F.Supp.2d 379, 386 (S.D.N.Y. 2005)(“Nor does the fact that Defendants received funding from the State mean it is a state actor.”). While none of these cases involved a school that received 100% of its funding from the government, the cases all stand for the point that the extent of public funding alone does not transform a private school into a state actor.
With respect to Plaintiffs' argument that 100% of the students at Reece are placed there by the state, the Court looks to analogous cases for guidance. In Rendell-Baker v. Kohn, the Supreme Court analyzed whether a private school that “specialized in dealing with students who have experienced difficulty completing public high school” was a state actor. Rendell-Baker v. Kohn 457 U.S. 830, 831 (1982). In that case, the local public school district, “did not maintain a school to serve.. .adolescents with drug, alcohol, or emotional problems.” Id. at 836. Similar to the allegations here, in Rendell-Baker, “nearly all of the students at the school ha[d] been referred to it by the Brookline or Boston School Committees, or by the Drug Rehabilitation Division of the Massachusetts Department of Mental Health.” Id. at 832. Nevertheless, despite extensive funding and the fact “nearly all” of the students were placed at the school by the government, the Supreme Court concluded that the school was not a state actor as “the school's...relationship with the State is not different from that of many contractors performing services for the government.” Id. at 843.
The Court in Rendell-Baker also explained that “the school is...analogous to the public defender found not to be a state actor in Polk County v. Dodson, 454 U.S. 312 (1981).” Id. at 841. Despite the fact that the clients were referred to the public defender by the government and the county had “control over the size of and funding for the public defender's office,” the Court held that a “public defender does not act under color of state law when performing a lawyer's traditional functions.” See Polk supra at 325.
Other analogous cases involve private bus companies. In Hamlin, the Court concluded that a private bus company that contracted with the City of Peekskill to transport students was not acting under color of state law. Hamlin ex rel. Hamlin v. City of Peekskill Bd. of Educ., 377 F.Supp.2d 379, 384 (S.D.N.Y. 2005)(“While the contract between Mile Square and Peekskill requires Mile Square to abide by federal, state and local law pertaining to the employment of bus monitors, that does not convert the private bus company into a state actor.”) citing Black by Black v. Indiana Area School Dist., 985 F.2d 707, 709-11 (3d Cir.1993). Another example from within the Second Circuit is O'Brien v. Carrier Coach, Inc., 2006 WL 692409 (W.D.N.Y. Mar. 13, 2006). There, even though a private bus company provided “bus services for local schools [and] special education programs,” the Court held it was “not enough to establish a sufficiently close nexus or joint action with the state.” Id. at *5.
Reasoning from these examples, extensive state funding and extensive state placement alone do not paint a private actor with the color of state law. If a private school remains private despite receiving over 90% of its funding from the public, there is no strong reason to distinguish that example from a school that allegedly receives 100% of its funding from the state. See generally Dawkins, supra (91%); Rendell-Baker, supra (90-99%); Blum, supra (more than 90%). Similarly, there is no strong reason to treat the Reece School differently than the private bus companies in Hamlin and O'Brien or the school in Rendell-Baker, which was deemed private despite the fact the state referred “nearly all of the students at the school.” Rendell-Baker, supra at 832.
The North Star of state actor analysis is asking whether it is fair to attribute private actions to the state. Here, even though the Reece School allegedly receives all of its funding and all of its students from the state, the Plaintiffs have not raised any plausible inference that the state and the school acted jointly when the school disenrolled J.V.
Moreover, here, there is no allegation of any conspiracy between the school and the state. See Hamlin, supra (“A private bus company may be considered a state actor if it acted in joint participation with the State to deprive someone of a constitutional right”) citing Hill v. New York City Bd. of Educ., 808 F.Supp. 141, 152 (E.D.N.Y.1992) (“showing a conspiracy to deprive plaintiff of due process between Amboy personnel and Board officials would establish this aspect of the state-action test.”). This case also does not present the “problem of a State encouraging the formation and functioning of ‘private' schools in order to evade constitutional requirements with respect to public ones.” See Hamlin, supra, citing South Carolina State Board of Education v. Brown, 393 U.S. 222 (1968); Louisiana Education Comm'n v. Poindexter, 393 U.S. 17 (1968); Griffin v. County School Board of Prince Edward County, 377 U.S. 218 (1964).
Therefore, even under the facts alleged, it would not be fair to attribute J.V.'s disenrollment to the state.
For this reason, our case can be distinguished from Milonas v. Williams, 691 F.2d 931 (10th Cir. 1982). In Milonas, the Tenth Circuit concluded that the state “ha[d] so insinuated itself with the [private school] as to be considered a joint participant in the offending actions.” Id. at 939-40. However, there, “the members of the class were placed at the school involuntarily by juvenile courts and other state agencies” and further, “state officials...were aware of, and approved of, certain of the practices” which were the subject of that litigation. In Milonas, it was fair to attribute the actions of the school to the state because the very actions at issue were approved by state officials. The same cannot be said of the Reece School's decision to disenroll J.V.
Put another way, the state had nothing to do with the disenrollment decision. Therefore, the school is not a state actor under the joint action test.
3. Public Function Test
Third, Plaintiffs have not sufficiently alleged that Defendant is a state actor under the public function test. A private entity may be a state actor under the public function test if it exercises “powers traditionally exclusively reserved to the State.” Sybalski, supra at 259 (internal citation omitted). Plaintiffs have not alleged that Defendant exercises such powers. As the Supreme Court previously held, “[t]hat a private entity performs a function which serves the public does not make its act state action.” Rendell-Baker v. Kohn, 457 U.S. 830, 842 (1982).
Plaintiffs' argument that “[t]he function of providing special education program and services are traditionally exclusive state functions,” (Dkt. No. 33 at 15) is belied by more recent caselaw in the Second Circuit stating that “courts have consistently held that ‘education is not considered to be exclusively the prerogative of the State.'” See Dawkins, supra at 529 citing Hamlin supra at 386; see also Cain v. Mercy Coll., No. 20-CV-2262 (LLS), 2020 WL 4194637, at *8 (S.D.N.Y. July 20, 2020)(“education is not considered to be exclusively the prerogative of the State.”).
In addition, Plaintiffs' reliance on Scaggs v. New York Dep't of Educ. is misplaced. The Scaggs Court found the defendant school to be a state actor under the public function test because unlike the instant action, the case involved a charter school that was defined as a public school under New York Education Law. Scaggs v. New York Dep't of Educ., No. 06-CV-0799 (JFB) (VVP), 2007 WL 1456221, at *19 n.17 (E.D.N.Y. May 16, 2007). The same is true for the Fourth Circuit charter school case Plaintiff cited in its memorandum of law and discussed during oral argument. See Peltier v. Charter Day Sch., Inc., 37 F.4th 104, 120 (4th Cir. 2022)(citing North Carolina statutes and holding “under the plain language of these statutes, as a matter of state law, charter schools in North Carolina are public institutions.”); Dkt. No. 33 at 13; Dkt. No. 38 at 17.
Therefore, the Reece School is not a state actor under the public function test either. As the Reece School is not a state actor under any of the tests, the Court recommends that the §1983 claims be dismissed.
B. Section 794 Claim
The Rehabilitation Act states that “[n]o otherwise qualified individual with a disability . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance...” 29 U.S.C. § 794. Defendant does not dispute that J.V. is disabled under the Rehabilitation Act. Dkt. No. 30 at 16. However, Plaintiffs allege only in a conclusory fashion that “Defendant excluded J.V. from participation in, and denied J.V. the benefits of, services, programs, and activities . . . because of J.V.'s disabilities.” Dkt. No. 23 ¶ 62. This is insufficient to state a claim under Federal Rule of Civil Procedure 12(b)(6). Plaintiffs do not allege any facts that give rise to an inference that J.V. was dismissed from Reece because of her disability. See Lee v. Saul, No. 19-CV-6553 (PGG) (SN), 2020 WL 7029264, at *7 (S.D.N.Y. Aug. 31, 2020) (dismissing Rehabilitation Act claim because the complaint made “only conclusory allegations and d[id] not provide any indication of how [d]efendant's alleged adverse employment action was connected to [plaintiffs disability”); Schwartz v. New York State Ins. Fund, No. 17-CV-8973 (LGS), 2018 WL 3442962, at *5 (S.D.N.Y. Jul. 17, 2018) (dismissing section 794 claim because the complaint's allegations were “conclusory”). Indeed, Plaintiffs allege that “all kids that attend Reece must have an IEP...” Id. at ¶12. Plaintiff has alleged nothing unique about J.V.'s disability relative to the other students or any special facts regarding the circumstances of her disenrollment that plausibly raise an inference that she was disenrolled due to the disability or her mother's attempts to remedy discrimination based upon that disability. Therefore, the Court recommends that Plaintiffs' section 794 claim be dismissed.
At oral argument, Plaintiffs' counsel stated, “What we have said, and the general idea is that the student's disabilities [were] different than everyone else's. For some reason, she was being prone to being attacked and bullied, and that made her different.” Dkt. No. 38 at 19. But these allegations were not in the Amended Complaint. Furthermore, without more facts, this statement on its own would not suffice to raise an inference of discrimination.
C. Negligent Infliction of Emotional Distress Claim
Defendant argues that “Plaintiffs' claim for negligent infliction of emotional distress must be dismissed because it is duplicative to both the claim of negligence and breach of contract.” Dkt. No. 30 at 17. Plaintiffs argue that “in the Amended Complaint, Plaintiffs added significant substantive factual allegations of distinct physical injures and separate emotional injuries, which arose from distinct acts.” Dkt. No. 33 at 18 citing Dkt. No. 23 ¶¶ 25-34.
“A NIED claim cannot be asserted if it is ‘essentially duplicative of tort or contract causes of action.'” Doe v. Uber Tech., Inc., 551 F.Supp.3d 341, 364 (S.D.N.Y. 2021) (internal citations omitted) (dismissing NIED claim because the allegations supporting the claim tracked those supporting plaintiff's negligence claim). “The rationale for this rule is grounded in the underlying purpose of the common law tort of negligent infliction of emotional distress which has its roots in the acknowledgment by the courts of the need to provide relief in those circumstances where traditional theories of recovery do not.” Id. (internal citations omitted). See also Watkins v. Harlem Center for Nursing and Rehabilitation, LLC, No. 20-CV-2919 (KPF), 2021 WL 4443968, at *14 (S.D.N.Y. Sept. 28, 2021) (dismissing NIED claim because it rested on the same facts and sought the same damages as plaintiffs' negligence claim).
Plaintiffs' NIED claim seeks the same damages as Plaintiffs' negligence, negligent supervision, and breach of contract claims - “(a) severe emotional distress; (b) loss of educational opportunity; (c) medical expenses and (d) attorney's fees and costs.” Dkt. No. 23 ¶ 87 (negligence claim), ¶96 (negligent supervision), ¶106 (NIED claim), ¶119 (breach of contract claim). In addition, all the claims rely on the same facts regarding Defendant's awareness of the “daily verbal, physical, sexual, emotional, psychological attacks” on J.V., Defendant's alleged inaction to prevent such attacks, and J.V.'s discharge from the school. Compare Id. ¶¶ 76-87, 88-96, and 107-119, with ¶¶ 97-106. Therefore, the claims are duplicative. Thus, the Court recommends that Plaintiffs' NIED claim be dismissed.
D. Breach of Contract Claim
“To state a claim for breach of contract under New York law, ‘a plaintiff must plead and prove: (1) the existence of a contract; (2) a breach of that contract; and (3) damages resulting from the breach.'” Mariah Re Ltd. v. American Family Mut. Ins. Co., 52 F.Supp.3d 601, 611 (S.D.N.Y. 2014) (internal citation omitted). “Plaintiff must provide specific allegations as to an agreement between the parties, the terms of that agreement, and what provisions of the agreement were breached as a result of the acts at issue.” Hekmat v. U.S. Transp. Sec. Admin., 247 F.Supp.3d 427, 433 (S.D.N.Y. 2017) (internal citation and quotation omitted).
The Amended Complaint includes new allegations on the breach of contract claim. Dkt. No. 23 at ¶¶108-117. The Amended Complaint claims the “Enrollment Contract allowed for renewal enrollment except that the contract could be canceled, or renewal enrollment denied, based on behavior in violation of Reece's Code of Conduct by the student or student's parents.” Id. at 109. Furthermore, Plaintiffs now allege “[n]either Lisa Vasquez nor J.V. engaged in any behavior that violated Reece's Code of Conduct and neither did anything that would constitute a breach of the Enrollment Contract.” Id. at 112.
As discussed above, there is “no dispute... regarding the authenticity or accuracy of' the Enrollment Contract or the Code of Conduct. See generally Madhu citing DiFolco supra, and Faulkner v. Beer, 463 F.3d 130, 134 (2d Cir. 2006). Both documents are in the record. See Dkt. Nos. 20-1 and 36-1. Moreover, the Amended Complaint relies “heavily” upon the contract and code in asserting the breach of contract claim. Therefore, the Court finds that those two documents are “integral” to the Complaint, and accordingly, they will be considered in deciding this Motion.
The relevant portion of Section 4 of the Enrollment Contract states:
4. Conditions of Enrollment and Miscellaneous Provisions
a. The School in its sole discretion may dismiss a student enrolled in accordance with this Agreement whose progress or conduct is not satisfactory to the School or whose placement at the School is inconsistent with the best interests of other students in the School. A dismissal by the School under these circumstances will not be considered a breach of the tuition contract by the School.
...
h. The School reserves the right to cancel or not renew this Agreement for behavior in violation of the School's Code of Conduct by Student or Student's parent(s).
Defendant argues that the contract claim “lacks specificity...the Plaintiffs fail to point to a specific school policy, rule, regulation or contract provision that was not adhered to in this case. The Plaintiffs merely outline the general premise of the school's code of conduct.” Dkt. No. 30 at 20.
But in the Amended Complaint, Plaintiffs more clearly identify the provision of the contract that allegedly was violated, and the manner of the breach. Dkt. No. 23 at ¶¶108-117. In the Amended Complaint, Plaintiffs allege that J.V. had a contractual right to be reenrolled in the absence of any violation of the school's code of conduct. Id. at ¶109.
It is true that the contract grants the Defendant “sole discretion” to dismiss a student “whose progress or conduct is not satisfactory to the School or whose placement at the School is inconsistent with the best interests of other students.” Dkt. No. 20-1, Sec. 4.a. But under New York contract law, “discretion.is not absolute.” Aurelius Cap. Master, Ltd. v. Republic of Argentina, No. 19 CIV. 351 (LAP), 2020 WL 70348, at *7 (S.D.N.Y. Jan. 7, 2020) citing Dalton v. Educational Testing Serv., 663 N.E.2d 289, 291 (N.Y. 1995). Rather, where a “contract contemplates the exercise of discretion, this pledge includes a promise not to act arbitrarily or irrationally in exercising that discretion.” InspiRx, Inc. v. Lupin Atlantis Holdings SA, No. 20-CV-3214 (JPC), 554 F.Supp.3d 542, 566 (S.D.N.Y. 2021) citing Fishoff v. Coty Inc., 634 F.3d 647, 653 (2d Cir. 2011); see also WCA Holdings III, LLC v. Panasonic Avionics Corp., No. 1:20-CV-07472 (GHW), 2023 WL 8434776, at *15 (S.D.N.Y. Dec. 5, 2023)(upholding the “Equipment Upgrades” claims based on the implied covenant of good faith and fair dealing). This is the case even when a contract grants a party “sole discretion” rather than “reasonable discretion.” See also S. Telecom Inc. v. Three Sixty Brands Grp., LLC, No. 20-CV-2151 (LJL), 520 F.Supp.3d 497, 506-07 (S.D.N.Y. 2021)(explaining “the difference between ‘sole discretion' and ‘reasonable discretion' as permitting a decision that “need not be reasonable or correct or even consistent with past standards” but that “an action authorized to be taken for a particular reason” must “actually be taken for that reason.”). Thus, even Section 4.a. alone cabins Defendant's exercise of discretion.
Moreover, section 4.h. further limits Defendant's discretion. 4.h could have stated, “h. The School reserves the right to cancel or not renew this Agreement.” But it doesn't. The language specifically says, “The School reserves the right to cancel or not renew this Agreement for behavior in violation of the School's Code of Conduct by Student or Student's parent(s).” Dkt. No. 20-1 (emphasis added).
Under New York law, “it is well settled that a contract must be read as a whole to give effect and meaning to every term.... Indeed, a contract should be interpreted in a way that reconciles all of its provisions, if possible.” N.Y. State Thruway Auth. v. KTA-Tator Eng'g Servs., P.C., 78 A.D.3d 1566, 913 N.Y.S.2d 438, 440 (4th Dep't 2010). The expressio unius est exclusio alterius canon of construction is also helpful here. New York Univ. v. Factory Mut. Ins. Co., 374 F.Supp.3d 315, 323 (S.D.N.Y. 2019)(“New York law recognizes the expressio unius canon of contract construction.”). In other words, “the expression of one thing is the exclusion of the other.” Sony Corp. v. Fujifilm Holdings Corp., No. 16-CV-5988 (PGG), 2017 WL 4342126, at *7 (S.D.N.Y. Sept. 28, 2017).
Here, the contract provided authorization for the school to disenroll J.V. “for behavior in violation of the School's Code of Conduct by Student or Student's parent(s).” Dkt. No. 20-1. The implication of such language is that the authorization to disenroll a student is available if, but only if, there is “a violation of the School's Code of Conduct by Student or Student's parent.”
Finally, Sections 4.a and 4.h apparently conflict. On the one hand, Section 4.a provides the School the discretion to dismiss a student if that student's “progress or conduct is not satisfactory to the School or whose placement at the School is inconsistent with the best interests of other students.” See Dkt. No. 20-1. On the other hand, Section 4.h reserves to the School “the right to cancel or not renew this Agreement” but only “for behavior in violation of the School's Code of Conduct by Student or Student's parent(s).” Id. “Courts have held an ambiguity in a contract “exists where a contract term could suggest more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement...” Kelso Enterprises Ltd. v. M/V DIADEMA, No. 08-CV-226 (SAS), 2009 WL 1788110, at *3 (S.D.N.Y. June 23, 2009). As there are multiple ways to reasonably reconcile these provisions, this contract provision is ambiguous.
While a “complete and unambiguous written contract should be enforced according to its terms,” if a contract “is ambiguous as applied to a particular set of facts, a court has insufficient data to dismiss a complaint for failure to state a claim.” Clarendon Nat. Ins. Co. v. Health Plan Administrators, No. 08-CV-6279 (GBD), 2009 WL 3053736, at *2 (S.D.N.Y. Sept. 24, 2009); see also Int'l Techs. Mktg., Inc. v. Verint Sys., Ltd., No. 15-CV-2457 (GHW) 157 F.Supp.3d 352, 368-69 (S.D.N.Y. 2016), afPd, 850 Fed.Appx. 38 (2d Cir. 2021)(“[w]hether particular conduct violates or is consistent with the duty of good faith and fair dealing necessarily depends upon the facts of the particular case, and is ordinarily a question of fact to be determined by the jury...”) citing Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 98 (2d Cir.2007) quoting 23 Williston on Contracts § 63:22 (4th ed. 2006).
Therefore, the breach of contract claims should survive the Motion to Dismiss.
RECOMMENDATION
For the foregoing reasons, I respectfully recommend that the Motion to Dismiss be GRANTED in part and DENIED in part. The Court recommends that the 2 U.S.C. § 1983, 29 U.S.C. § 794, and Negligent Infliction of Emotional Distress claims, (Claims 1, 2, 3, and 6) be dismissed. With respect to the other claims, the Motion should be DENIED.
FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from receipt of this Report to file written objections. See also Fed.R.Civ.P. 6(a). Such objections (and responses thereto) shall be filed with the Clerk of the Court, with courtesy copies delivered to the Chambers of the Honorable Gregory H. Woods, United States District Judge, 500 Pearl Street, Room 2260, New York, New York 10007 and to the Chambers of the undersigned, 40 Foley Square, Room 425, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Woods. FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. Thomas v. Arn, 474 U.S. 140, 155 (1985); United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983) (per curiam).
SO ORDERED.