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Morning Hill Foods LLC v. Hoshijo

United States District Court, D. Hawaii

May 2, 2017

MORNING HILL FOODS, LLC, Plaintiff,
v.
WILLIAM D. HOSHIJO, AS EXECUTIVE DIRECTOR FOR THE HAWAI‘I RIGHTS COMMISSION; ROBIN WURTZEL; and ROBIN RUDOLPH, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS AND STAYING CASE

          Derrick K. Watson District Judge.

         INTRODUCTION

         Plaintiff Morning Hill Foods, LLC brings claims for declaratory and injunctive relief against William D. Hoshijo in his official capacity as Executive Director for the Hawaii Civil Rights Commission (“HCRC”), alleging the violation of federal constitutional rights as a result of an HCRC investigation and enforcement action involving an age discrimination complaint by a job applicant. Morning Hill seeks to enjoin an ongoing state administrative proceeding pending before the HCRC and seeks a declaration that a Hawaii state administrative rule and HCRC practices violate the United States Constitution. Morning Hill also brings state tort claims for monetary damages against an HCRC staff attorney, Robin Wurtzel, and former HCRC investigator, Robin Rudolph.

         The HCRC and Wurtzel move to dismiss, or, in the alternative, ask the Court to abstain in light of the pending state administrative proceeding. Because the principles set forth in Younger v. Harris, 401 U.S. 37 (1971), and its progeny counsel in favor of abstention, the Court defers any further action in this matter during the pendency of the ongoing state proceedings. Accordingly, for the reasons detailed below, Defendants' Motion is GRANTED IN PART to the extent it seeks abstention. The Motion is DENIED IN PART to the extent it requests dismissal. The case is STAYED pending the conclusion of the underlying state proceedings.

         BACKGROUND

         I. HCRC Administrative Proceeding

         Plaintiff Morning Hill Foods, LLC operates Mana Bu's, a Japanese take-out store located at 1618 South King Street in Honolulu. First Amended Complaint (“FAC”) ¶ 10, Dkt. No. 9. Morning Hill's sole member is Manabu Asaoka, a citizen of Japan. FAC ¶ 1. Morning Hill filed the present action for injunctive and declaratory relief, as well as claims for monetary damages, alleging that it was denied due process during the HCRC's investigatory and enforcement processes initiated on January 27, 2014. The administrative proceeding, styled William D. Hoshijo, Executive Director, on Behalf of Serena M.Y. Kyi-Yim, Complainant vs. Morning Hill Foods, LLC, dba Mana Bu's, Respondent, Docket No. 16-002-E-A (“Administrative Proceeding”), is currently pending before Hearings Examiner Leslie A. Hayashi at the HCRC.

         A. HCRC Charge, Investigation, And Notice Of Finding

         In late 2013, Morning Hill advertised on the internet seeking part-time employees that it described as “active full time undergraduate (B.A.)” students. Pl.'s Mem. In Opp'n, Ex. 2 (3/17/17 Order) at 2, Dkt. No. 20-3; see also FAC ¶ 15.[1]In October 2013, an “unidentified woman of unidentified age came into [Mana Bu's] during peak hours and demanded to speak to the owner/manager about applying for a job.” FAC ¶ 11. Asaoka was working in Mana Bu's kitchen at the time and came to the front of the store to speak with the woman for thirty seconds about her interest in working there. The woman did not identify herself and left the shop without providing a resume, or contacting Asaoka thereafter. FAC ¶¶ 13-14.

         On January 27, 2014, the potential job-applicant, Serena Kyi-Yim, [2] signed an HCRC Charge of Discrimination alleging age discrimination against Morning Hill based on the internet job advertisement “posted on Craig's List soliciting ‘active undergraduate (B.A.) students.'” FAC ¶ 15. On January 29, 2014, the HCRC issued a Notice of Filing of Discrimination Complaint against Morning Hill on behalf of Kyi-Yim. FAC ¶ 17. According to Morning Hill, the investigation into the Charge filed by Kyi-Yim was assigned to Defendant Rudolph, a former HCRC investigator.[3] FAC ¶ 16.

         Over two years later, on February 18, 2016, the HCRC sent a letter to Morning Hill's counsel indicating that it had “found ‘reasonable cause' that discrimination had occurred.” FAC ¶ 22. Attached to the letter was the HCRC's “Notice of Finding of Reasonable Cause to Believe that Unlawful Discriminatory Practices Have Been Committed” (“Notice of Finding”) signed by Hoshijo. FAC ¶ 23. On March 14, 2016, Morning Hill's counsel, Asaoka, and HCRC staff attorney Wurtzel met at the HCRC to discuss a possible settlement. During the meeting, Morning Hill raised objections to the Notice of Finding. FAC ¶ 24. Thereafter, the HCRC sent Morning Hill an “Amended Notice of Finding of Reasonable Cause to Believe that Unlawful Discriminatory Practices Have Been Committed” (“Amended Notice of Finding”) dated March 18, 2016, which Morning Hill alleges deleted important factual findings and a theory of liability.[4] FAC ¶¶ 25-27.

         On October 21, 2016, the HCRC sent Morning Hill's counsel a letter signed by Wurtzel, stating that the HCRC was willing to settle the matter for a specified sum, and referring Morning Hill to Hawaii Administrative Rule (“HAR”) § 12-46-133. That administrative rule generally prohibits listing an age preference when advertising for a job opening, including using such phrases as “college student, ” “recent college graduate, ” or “others of a similar nature[.]” FAC ¶ 28 (quoting HAR § 12-46-133). Several days later, on October 26, 2016, the HCRC sent another letter indicating that the offer to settle for that same amount would remain open until November 9, 2016. FAC ¶ 29. Morning Hill's counsel responded via email to Wurtzel on October 28, 2016, notifying the HCRC that Morning Hill declined the settlement offer and elected to proceed to hearing. FAC ¶ 30. According to Morning Hill, on December 1, 2016, Hoshijo “sent Plaintiff's attorney a letter, refusing Plaintiff's request to reassign the case to another enforcement attorney.” However, nowhere in the pleadings is the timing or the basis for Morning Hill's request for reassignment further explained. FAC ¶ 32.

         B. Pending Administrative Proceeding

         On December 6, 2016, the HCRC formally docketed the Administrative Proceeding. FAC ¶ 11. Morning Hill filed its Scheduling Conference Statement on December 14, 2016, listing the following defenses:

(1) Expiration of statute of limitations or laches;
(2) H.A.R. § 12-46-133 violates the following constitutional guarantees in the Constitution of the United States and the Constitution of the State[] of Hawaii: (a) freedom of speech; (b) freedom of association; (c) due process; and (d) equal protection and application of the laws.
(3) Incompatibility with federal law/federal preemption.

         FAC ¶ 35. On December 23, 2016, Morning Hill filed a Motion to Dismiss Complaint on the basis that the HCRC's February 18, 2016 Reasonable Cause Letter and Notice of Finding were untimely. The HCRC filed its reply to the Motion to Dismiss Complaint on December 27, 2016.[5] FAC ¶ 38.

         On December 28, 2016, the Hearings Examiner held a Scheduling Conference and hearing on Morning Hill's Motion to Dismiss. Morning Hill alleges that, at “the Scheduling Conference, the Hearings Examiner explicitly stated that she did not have jurisdiction over any Constitutional issue relevant to the Administrative Proceeding.” FAC ¶ 36. On December 29, 2016, the Hearings Examiner issued her Order Denying Respondent's Motion to Dismiss, rejecting Morning Hill's argument that “the Amended Finding of Reasonable Cause filed on March 18, 2016 was filed beyond the 180 day deadline [mandated by Hawaii Revised Statutes (“HRS”) § 368-13(b)] . . . because HAR Section 12-46-6.1 specifically provides that ‘amendments shall relate back to the original filing date of the document.'” Pl.'s Mem. In Opp'n, Ex. 1 (12/29/16 Order) at 2, Dkt. No. 20-2.

         On March 17, 2017, the Hearings Examiner granted the HCRC's Motion for Summary Judgment, concluding that Morning Hill engaged in age discrimination when posting job listings specifically seeking undergraduate students. Pl.'s Mem. In Opp'n, Ex. 2 at 6. The Hearings Examiner determined that the October 2013 internet posting and the January 2014 sign in Mana Bu's storefront window violated HRS § 378-2(a)(1)(C) and HAR §§ 12-46-131 and 133, finding, in part, based on Morning Hill's “admitted . . . desire to hire college students, ” that “[b]oth the language of the advertisements and [Morning Hill's] intent are tantamount to age discrimination[.]” Id. at 3. The Hearings Examiner also rejected Morning Hill's claim that Kyi-Yim was not the person to whom Asaoka spoke in October 2013, holding that, under HAR § 12-46-5(b), the Executive Director may bring an action “without an actual complainant . . . regardless of whether Ms. Kyi-Yim is found to be the person who approached [Asaoka] in response to the advertisements.” Id. at 4. Morning Hill also raised a bona fide occupational qualification (“BFOQ”) argument to justify the need to hire undergraduate students, which the Hearings Examiner found to lack merit. See id. at 4-6 (citing HRS § 378-3 and HAR § 12-46-132).

         The Hearings Examiner's March 17, 2017 Order notes that a hearing is set for May 17 through 19, 2017 to determine damages or other appropriate relief-the only remaining issues in the Administrative Proceeding. Id. at 6.

         II. The Instant Federal Lawsuit

         Morning Hill filed its Complaint and First Amended Complaint in this federal civil action on January 31, 2017, while the Administrative Proceeding was midstream-e.g., after the Hearings Examiner denied the Motion to Dismiss on December 29, 2016, but before she granted the Motion for Summary Judgment on March 17, 2017.

         A. Morning ...


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