# BUNTING v. NEW JERSEY OFFICE OF THE STATE COMPTROLLER

> District Court, D. New Jersey · March 16, 2020

URL: https://www.frixlaw.com/law-library/cases/10267677

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** March 16, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10267677

## How later opinions describe it (automated extraction)

- finding prosecutorial immunity a defense to Section 1983 suits

## Opinion text

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
__________________________________
:
MICHELLE BUNTING, et al., :
:
Plaintiffs, :
: Civil No. 19-26 (RBK/JS)
v. :
: OPINION
NEW JERSEY OFFICE OF THE STATE :
COMPTROLLER, :
:
Defendant. :
__________________________________ :

KUGLER, United States District Judge:
This matter comes before the Court upon Plaintiffs Michelle Bunting, Charles Bunting,
and Beverlyn Grissom’s Motion File an Amended Complaint (Doc. No. 16). The Court
previously dismissed Plaintiffs’ initial Complaint. Although Plaintiffs’ proposed Amended
Complaint (Doc. No. 16-3 (“Am. Compl.”)) provides more detailed factual allegations in support
of their claims, the Court finds that their attempt to amend is nonetheless futile. As such,
Plaintiffs’ Motion to Amend is DENIED.
I. BACKGROUND
A. Factual Allegations
The proposed Amended Complaint contains the following allegations. Plaintiffs formerly
operated a pediatric medical daycare (“PMDC”) known as Mercer County Children’s Medical
Daycare, LLC (“Mercer”), which served young children with special healthcare needs in Trenton,
New Jersey. (Am. Compl. at ¶¶ 6, 29). Michelle Bunting and Grissom are African-American, (id.
at ¶ 142), and many of the children Mercer served were African-American, (id. at ¶ 51). Although
Mercer was initially licensed to care for up to 70 children, starting in 2003 the New Jersey
Department of Health and Senior Services (“DHSS”) began attempts to enforce a capacity limit of
27 children on Mercer. (Id. at ¶ 35). These attempts came to a head in March 2011, when DHSS
issued a correction plan to Mercer that: (1) included a curtailment order forbidding Mercer from
admitting new children to the facility and (2) required Mercer to engage a Consultant

Administrator. (Id. at ¶ 47).
On March 11, 2011, Deborah Gottlieb, the Director of Program Compliance and Health
Care Financing at DHSS, issued a Notice of License Revocation to Mercer due to its failure to
retain a Consultant Administrator, requiring Mercer to submit a closure plan to DHSS. (Id. at ¶
49). On the same day, Michael Kennedy, a New Jersey Deputy Attorney General told Mercer that
it needed to immediately discharge 53 of its patients. (Id. at ¶ 51). In response, Mercer retained
New Era, LLC (“New Era”) as a Consultant Administrator. (Id. at ¶ 52). New Era developed a
plan that included transferring Mercer’s patients to Millhouse, another PMDC in Trenton owned
by a Caucasian person. (Id. at ¶ 53). On March 15, 2011, Gottlieb issued a $1.6 million fine to

Mercer, mainly due to Mercer’s failure to comply with the 27-child cap. (Id. at ¶ 55). DHSS also
began referring patients seeking admission to Mercer to Millhouse. (Id. at ¶ 58).
On April 8, 2011, Gottlieb advised Mercer that it should retain Carlisle and Associates,
LLC (“Carlisle”) as its Consultant Administrator, rather than New Era. (Id. at ¶ 59). Although
Mercer was unaware at the time, New Jersey State Assemblyman Louis Greenwald was the Vice
President, Chief Counsel, and a principal of Carlisle. (Id. at ¶¶ 61–62). Pursuant to Gottlieb’s
advice, Mercer cancelled its contract with New Era and retained Carlisle, even though Carlisle
charged $10,000 more per month. (Id. at ¶ 60).
Over the next few months, Plaintiffs met and had calls with Gottlieb and Kennedy
regarding Mercer’s situation. (Id. at ¶¶ 58–110). In August 2011, Carlisle emailed Michelle
Bunting and Grissom demanding immediate payment of $76,250. (Id. at ¶ 86). Greenwald himself
made calls to Mercer and to Mercer’s counsel demanding payment. (Id. at ¶¶ 91, 93). On August
17, 2011, Mercer paid Carlisle $50,000. (Id. at ¶ 95). Gottlieb issued a series of fines to Mercer

for its failure to pay Carlisle, as required by the correction plan. (Id. at ¶¶ 96, 98, 108).
On November 10, 2011, Mary O’Dowd, the Commissioner of the New Jersey Department
of Health, indicated in a court filing that DHSS’s restrictions on Mercer were to enforce the 27-
child cap, and that the economic harm Mercer was suffering was not a basis for stopping
enforcement. (Id. at ¶¶ 114–15)
On July 10, 2012, Kennedy lifted the admissions curtailment imposed by the March 2011
correction plan. (Id. at ¶ 124). Nevertheless, Mercer ceased operations on July 25, 2012. (Id. at ¶
128). DHSS eventually withdrew all of the fines it had issued to Mercer. (Id. at ¶¶ 135–37).
B. Procedural Background

Plaintiffs have most of the past decade challenging DHSS’s enforcement of the 27-child
cap and seeking damages for their losses in various fora—indeed, this is the second time this matter
has landed in federal court. See Mercer Cty. Childrens Medical Daycare, LLC v. O’Dowd, No. 13-
1436, 2014 WL 546346 (D.N.J. Feb. 10, 2014). This iteration began when Plaintiffs filed a
Complaint in New Jersey Superior Court in November 2018, which Defendants timely removed
in January 2019. (Doc. No. 1). Defendants filed a Motion to Dismiss (Doc. No. 5) on January 23,
2019, which the Court granted on September 20, 2019 (Doc. Nos. 12, 13).
Plaintiffs initial Complaint brought twenty-two counts—ten under federal causes of action,
twelve under state law causes of action. Of these, the Court dismissed nine of the federal counts
with prejudice, one federal count without prejudice, and then declined to exercise supplemental
jurisdiction over the state law counts. (Doc. No. 13). The one federal count dismissed without
prejudice attempted to state a claim under 42 U.S.C. § 1983 for violation of Plaintiffs’ Fourteenth
Amendment Equal Protection rights on the basis of their race; the Court dismissed it because the
Complaint did not contain any allegations giving rise to a plausible inference of intentional racial

discrimination. Bunting v. New Jersey Office of the State Comptroller, No. 19-26, 2019 WL
4565232, at *7–8 (D.N.J. Sept. 20, 2019).
Plaintiffs’ proposed Amended Complaint substantially narrows the scope of this litigation,
as it now only names DHSS, Gottlieb, Kennedy, O’Dowd, and Greenwald as defendants, and only
contains six counts, as opposed to twenty-two. In Count I, Plaintiffs bring an Equal Protection
claim under Section 1983, alleging that Defendants intentionally discriminated against Plaintiffs
on the basis of race. In Counts II, III, and IV, Plaintiffs bring claims under the New Jersey Civil
Rights Act (“NJCRA”), N.J.S.A. 10:6–1 et seq. Count V brings a claim for malicious use of
process, while Count VI brings a claim for abuse of process.

II. LEGAL STANDARD
Federal Rule of Civil Procedure 15(a)(2) provides that “[t]he court should freely give leave
[to amend] when justice so requires.” However, a motion to amend the complaint may be denied
where there is undue delay, bad faith, dilatory motive, unfair prejudice, or futility of amendment.
See Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002) (citing Foman v. Davis,
371 U.S. 178, 182 (1962); In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir.
1997)). “‘Futility’ means that the complaint, as amended, would fail to state a claim upon which
relief could be granted.” Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000) (citation omitted). “In
assessing ‘futility,’ the District Court applies the same standard of legal sufficiency as applies
under Rule 12(b)(6).” Id. (citations omitted).
To survive a motion to dismiss, a complaint must contain enough factual matter, accepted
as true, to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). To make this determination, a court

conducts a three-part analysis. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010).
First, the court must “tak[e] note of the elements a plaintiff must plead to state a claim.” Id.
(quoting Iqbal, 556 U.S. at 675). Second, the court identifies allegations that, “because they are no
more than conclusions, are not entitled to the assumption of truth.” Id. at 131 (quoting Iqbal, 556
U.S. at 680). Finally, a court “assume[s] the[] veracity” of well-pleaded factual allegations and
determines “whether they plausibly give rise to an entitlement for relief.” Id. (quoting Iqbal, 556
U.S. at 680). This plausibility determination is a “context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. A complaint
cannot survive when a court can only infer that a claim is merely possible rather than plausible. Id.

III. DISCUSSION
Plaintiffs’ Section 1983 claim asserts that Defendants selectively enforced the 27-child cap
against them due to their race, in violation of the Equal Protection Clause of the Fourteenth
Amendment. While Plaintiffs’ initial Complaint failed to support this claim with any allegations
of differential treatment, Plaintiffs now allege that even though DHSS enforced the 27-child cap
against Mercer, it did not do so against the similarly situated Millhouse facility, which is owned
by a Caucasian. (Am. Compl. at ¶¶ 146–48). Defendants contend that they are either immune from
suit under Section 1983 or are otherwise improper defendants. (Doc. No. 19 at 11–12). The Court
agrees with Defendants.
A. DHSS—Sovereign Immunity
The Eleventh Amendment “has been interpreted to render states—and, by extension, state
agencies and departments and officials when the state is the real party in interest—generally
immune from suit by private parties in federal court.” Pa. Fed’n of Sportsmen’s Clubs, Inc. v.
Hess, 297 F.3d 310, 323 (3d Cir. 2002) (internal quotation omitted). Accordingly, New Jersey state

agencies “established in the Executive Branch of State Government” qualify for Eleventh
Amendment sovereign immunity, “regardless of the relief sought,” unless an exception to the
immunity rule applies. See Rhett v. Evans, 576 F. App’x 85, 88 (3d Cir. 2014) (internal quotation
omitted). Those exceptions apply when (1) Congress abrogates the immunity, (2) a state waives
immunity, or (3) when a plaintiff sues individual state officers for prospective relief to end an
ongoing violation of federal law. See MCI Telecomm. Corp. v. Bell Atl. Pennsylvania, 271 F.3d
491, 503 (3d Cir. 2001).
Defendant DHSS is immune from suit under the Eleventh Amendment because it is a New
Jersey state agency established by the executive branch. See e.g., Ong v. Superior Court of Hudson

Cty., No. 16-6777, 2018 WL 324722, at *4 (D.N.J. Jan. 8, 2018) (finding that state agency is
“under the umbrella of the State’s sovereign immunity”); Rouse v. New Jersey Dep’t of Health and
Human Serv., No. 15-1511, 2015 WL 5996324, at *2 (D.N.J. Oct. 13, 2015) (holding that the New
Jersey Department of Human Services and Department of Health are “arms of the state entitled to
Eleventh Amendment immunity”).1
B. Gottlieb, O’Dowd, Kennedy—Absolute Immunity

1 The proposed Amended Complaint purports to seek injunctive relief in the form of reinstatement of Mercer’s 70-
slot license. (Am. Compl. at ¶ 161). In its prior Opinion, the Court dismissed Plaintiffs’ claims for “prospective”
injunctive relief for lack of standing. Bunting, 2019 WL 4565232, at *7 n.7. As the Court explained at that time, in
order to have standing, plaintiffs must show a “real and immediate threat of repeated injury.” See Reardon v. New
Jersey, No. 17-cv-5868, 2018 WL 4964548, at *3 (D.N.J. Oct. 15, 2018) (internal quotation marks omitted) (quoting
O’Shea v. Littleton, 414 U.S. 488, 495 (1974)). As was the case with the initial Complaint, the proposed Amended
Complaint contains no plausible allegations sufficient to meet this burden.
Plaintiffs also sue Gottlieb, O’Dowd, and Kennedy in their individual capacities for
damages. As the Supreme Court has noted, state agency officials who perform “certain functions
analogous to those of a prosecutor” are entitled to absolute immunity from liability under 42 U.S.C.
§ 1983. Butz v. Economou, 438 U.S. 478, 515 (1978); Imbler v. Pachtman, 424 U.S. 409, 427–28
(1976) (finding prosecutorial immunity a defense to Section 1983 suits). “The decision to initiate

administrative proceedings against an individual . . . is very much like the prosecutor’s decision to
initiate or move forward with a criminal prosecution,” involving “broad discretion.” Butz, 438
U.S. at 515. Agency attorneys are likewise afforded absolute immunity, as there is “no substantial
difference” in function between the agency attorney engaging in an adjudication and the prosecutor
bringing evidence before a court. Id.
Plaintiffs’ Section 1983 claim is based on DHSS’s supposedly selective enforcement of the
27-child cap against Mercer. As such, Defendants Gottlieb and O’Dowd are being sued for their
for their role in DHSS’s decision to bring sanctions against Mercer and to initiate administrative
proceedings, while Defendant Kennedy is being sued for his role in representing DHSS in the

course of these administrative proceedings. Therefore, Gottlieb, O’Dowd, and Kennedy are all
entitled to absolute immunity for their actions underlying Plaintiffs’ Section 1983 claim. See
Mercer Cty. Childrens Medical Daycare, LLC, 2014 WL 546346, at *4–5 (concluding in an earlier
round of this litigation that Kennedy and Gottlieb were entitled to absolute immunity).
C. Greenwald—Under Color of Law
To establish a Section 1983 violation, the plaintiff must first show that the challenged
conduct was committed by a person acting under color of state law. Groman v. Twp. of Manalapan,
47 F.3d 628, 633 (3d Cir. 1995); Piecknick v. Pennsylvania, 36 F.3d 1250, 1255–56 (3d Cir. 1994).
The standard for satisfying the “under color of law” requirement in Section 1983 cases is
effectively the same as for demonstrating state action under the Fourteenth Amendment. Benn v.
Universal Health Sys., Inc., 371 F.3d 165, 169 n.1 (3d Cir. 2004) (citing Rendell-Baker v. Kohn,
457 U.S. 830, 838 (1982)).
Although Greenwald is a State Assemblyman, the Amended Complaint does not indicate
that he took any actions to harm Plaintiffs in his official capacity. Rather, the Amended Complaint

only concerns actions he took as a principal of Carlisle, namely calling Plaintiffs to demand
payment for Carlisle’s services. Plaintiffs have not met their burden of showing that these actions
were carried out under the color of state law, and therefore they cannot serve as the basis for a
Section 1983 claim. See Mercer Cty. Childrens Medical Daycare, 2014 WL 546346, at *4 (finding
in an earlier round of this litigation that Greenwald was not acting under color of state law).
D. State Law Claims
In addition to the Section 1983 claim, the proposed Amended Complaint also brings state
law claims for constitutional violations through the NJCRA, for malicious use of process, and for
abuse of process. But because Plaintiffs’ Section 1983 claim is not viable, the Court would decline

to exercise supplemental jurisdiction over these state law claims. See 28 U.S.C. § 1367(c)(3);
Hedges v. Musco, 204 F.3d 109, 123 (3d Cir. 2000) (instructing that after dismissing original
jurisdiction claims, district courts “must decline to decide the pendent state claims unless
considerations of judicial economy, convenience, and fairness to the parties provide an affirmative
justification for doing so”). And where the Court would decline to exercise supplemental
jurisdiction, it is appropriate to deny a motion to amend. Crump v. Passaic Cty., 147 F. Supp. 3d
249, 254 (D.N.J. Dec. 2, 2015) (citing Saunders v. Bright, 281 F. App’x 83, 85 (3d Cir. 2008)).
IV. CONCLUSION
For the forgoing reasons, Plaintiffs’ Motion to File an Amended Complaint is DENIED.
And Order follows.

Dated: 3/16/2020 /s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10267677. Public record. Not legal advice.