Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-04-03743/USCOURTS-ca8-04-03743-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 04-3743

___________

Judy Neal, *

*

Plaintiff - Appellant, *

*

v. * Appeal from the United States

* District Court for the 

Faith A. Fields, individually and in her * Eastern District of Arkansas.

official capacity as Executive Director *

of the Arkansas State Board of *

Nursing, et al., *

*

Defendants - Appellees. *

___________

Submitted: May 13, 2005

Filed: December 1, 2005

___________

Before LOKEN, Chief Judge, HANSEN and MELLOY, Circuit Judges.

___________

LOKEN, Chief Judge.

Judy Neal is a registered nurse licensed by the State of Arkansas. In January

2003, Neal’s former employer filed a complaint against her with the Arkansas State

Board of Nursing (the “Board”), the state licensing agency. See Ark. Code Ann. § 17-

87-203. Consistent with its practice, the Board disclosed to an inquiring prospective

employer that Neal’s license was “red flagged” because she was under investigation,

without disclosing the nature of the allegations being investigated. Neal commenced

this action under 42 U.S.C. § 1983 against the members of the Board and its executive

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The Honorable George Howard, Jr., United States District Judge for the

Eastern District of Arkansas.

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officials, claiming that the disclosure of an ongoing investigation to potential

employers, coupled with the Board’s failure to hold a prompt name-clearing hearing,

violated her procedural and substantive due process rights. The district court1

dismissed the complaint for failure to state a claim. Neal appeals. Concluding that

she has suffered no deprivation of a constitutionally protected property or liberty

interest as a matter of law, we affirm.

We review the grant of a motion to dismiss de novo, taking the facts alleged in

the complaint as true. Carter v. Arkansas, 392 F.3d 965, 968 (8th Cir. 2004). The

complaint alleged that Neal learned of the investigation in January 2003 when the

prospective employer declined to hire her. In February 2003, she informally advised

the Board that the former employer’s allegations were false. Neal alleges that the

Board knows its practice of advising prospective employers of the existence of an

investigation “hindered her in pursuing her chosen occupation of nursing,” yet the

Board has neither held a hearing nor taken disciplinary action against Neal because

of its “custom and practice of extending investigations for over a year.” The

complaint acknowledges that Neal continues to be a licensed registered nurse. She

seeks compensatory damages against three Board officials and an injunction ordering

defendants not to disclose that she is under investigation until she has been given a

hearing and been found to have violated the Board’s rules and regulations.

The district court concluded that Neal’s complaint failed to state a claim

because the Board disclosed only the existence of an investigation, not any potentially

stigmatizing allegations, and because Neal still holds her nursing license so she has

not been deprived of a property right. On appeal, Neal argues that the Board’s actions

violated both her substantive and procedural due process rights. The substantive due

process claim is without merit because the defendants’ conduct does not come close

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to meeting the Supreme Court’s rigorous “shocks the conscience” substantive due

process standard. See, e.g., Terrell v. Larson, 396 F.3d 975, 980-81 (8th Cir. 2005)

(en banc). The procedural due process claim requires closer analysis.

The Fourteenth Amendment guarantees that “[n]o State shall . . . deprive any

person of life, liberty, or property, without due process of law.” The procedural

component of the Due Process Clause protects property interests created not by the

Constitution but by “rules or understandings that stem from an independent source

such as state law.” Town of Castle Rock v. Gonzales, 125 S.Ct. 2796, 2803 (2005)

(quotation omitted). In this case, defendants concede that an Arkansas nursing license

confers a property interest that is entitled to procedural due process protection. See,

e.g., Barry v. Barchi, 443 U.S. 55 (1979). 

However, Neal’s complaint fails to allege a deprivation of her constitutionally

protected property interest. Her license has not been suspended, as was the horse

trainer’s license in Barry v. Barchi. Thus, her right to practice nursing in Arkansas

remains intact. She alleges that the Board’s disclosure of a pending investigation casts

an injurious cloud on her fitness as a nurse, making her less employable. But

Arkansas law does not grant nurses a property right to practice nursing free of the

licensing agency’s regulation. The licensing statute expressly provides for suspension

and revocation, see Ark. Code Ann. § 17-87-309, actions that are invariably preceded

by a Board investigation. Under state law, the Arkansas Administrative Procedure

Act (“APA”) will apply if the Board takes action to suspend or revoke Neal’s licence.

See Ark. Code Ann. § 17-87-309(c). In that event, the APA provides a statutory right

to notice, “an opportunity to show compliance with all lawful requirements for the

retention of the license,” Ark. Code Ann. § 25-15-211(c), and the right to judicial

review of an adverse agency action, § 25-15-212(a). The APA further provides that

Neal may sue to compel a hearing if the Board “unlawfully, unreasonably, or

capriciously” refuses to act or is guilty of unreasonable delay. Ark. Code Ann. § 25-

15-214. Neal has not petitioned the state courts to remedy the alleged delay, nor has

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she challenged in state court the Board’s assertion that the Arkansas Freedom of

Information Act mandates its disclosure policy. 

Given the nature of the regulatory process and the public policy reflected in the

Arkansas Freedom of Information Act, Ark. Code Ann. tit. 25, ch. 19, licensees can

reasonably expect that the fact of an on-going investigation will become public

knowledge or even be affirmatively disclosed. Neal cites no authority for the

proposition that adverse inferences third parties draw from the fact of on-going

regulatory actions constitute the deprivation of a licensee’s property interest that gives

rise to a federal constitutional right to an immediate due process hearing. The

proposition would frustrate and delay the good faith actions of state and federal

regulators in countless regulatory situations. We reject it as a matter of law.

Alternatively, Neal argues that she has been deprived of the liberty interest

procedural due process protects because the Board’s actions inflict “a stigma or other

disability” that forecloses other employment opportunities. Board of Regents v. Roth,

408 U.S. 564, 573 (1972). Injury to reputation alone is not a liberty interest protected

under the Fourteenth Amendment. Siegert v. Gilley, 500 U.S. 226, 233-34 (1991).

Accordingly, we have limited this claim to cases in which a public employer

terminated an employee and published reasons for the discharge that seriously

damaged the employee’s standing in the community or foreclosed other employment

opportunities. See Putnam v. Keller, 332 F.3d 541, 546 (8th Cir. 2003); Speer v. City

of Wynne, 276 F.3d 980, 984 (8th Cir. 2002); accord Stidham v. Peace Officer

Standards & Training, 265 F.3d 1144, 1153-54 (10th Cir. 2001). We further limit this

claim to government accusations “so damaging as to make it difficult or impossible

for the employee to escape the stigma of those charges.” Allen v. City of Pocahontas,

340 F.3d 551, 556 (8th Cir. 2003) (quotation omitted), cert. denied, 540 U.S. 1182

(2004); see Mercer v. City of Cedar Rapids, 308 F.3d 840, 845 (8th Cir. 2002)

(allegations of “dishonesty, immorality, criminality, racism, and the like”) (quotation

omitted). Here, Neal is not a terminated public employee, nor has she suffered the

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arguably analogous injury of license revocation. The Board has disclosed only the

fact of an investigation, not the allegations being investigated (whether sufficiently

stigmatizing or not). Thus, the complaint fails to state a procedural due process liberty

interest claim as a matter of law. 

The judgment of the district court is affirmed.

______________________________

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