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Waugh v. Nevada State Bd. of Cosmetology

United States District Court, D. Nevada

August 6, 2014


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For Lissette Waugh, Wendy Robin, Plaintiffs: Matthew T Dushoff, LEAD ATTORNEY, Kolesar & Leatham, Chtd., Las Vegas, NV; Timothy Keller, LEAD ATTORNEY, Institute for Justice - AZ Chapter, Tempe, AZ.

For Nevada State Board of Cosmetology, Defendant: Sarah Bradley, State of Nevada Office of the Attorney General, Carson City, NV.

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Plaintiffs Lissette Waugh and Wendy Robin seek to operate makeup artistry schools in Nevada without being licensed as cosmetology or aesthetics instructors, and without their facilities being licensed as cosmetology schools. The Nevada State Board of Cosmetology (the " Board" ) contends that makeup artistry is a branch of cosmetology, and therefore may be taught only by licensed instructors at licensed schools of cosmetology. The Plaintiffs are not licensed cosmetology or aesthetics instructors and their schools are not licensed schools of cosmetology. The undisputed facts are as follows.

A. Lissette Waugh & L Makeup Institute

Waugh, a licensed aesthetician in Nevada, owns the L Makeup Institute (" LMI" ) in Las Vegas, Nevada. In June 2010, Waugh opened LMI to exclusively teach makeup artistry.

In October 2010, in response to an anonymous complaint, the Board contacted Waugh and asked to meet with her at LMI to learn more about her business. Annie Curtis, the Board's Chief Inspector, and Jeffrey Green, a Board inspector (collectively, the " Inspectors" ), visited Waugh at LMI. The Inspectors told Waugh that the Board's position was that she was teaching aesthetics without an instructor's license and that LMI was an illegal unlicensed cosmetology school. They also told Waugh that she must stop holding her business out as a makeup artistry school. The Inspectors " made it clear" that the Board believed that LMI fell under the Board's jurisdiction and that in order to advertise LMI as a makeup artistry school, Waugh would have to apply for a cosmetology school license and comply with all regulations governing cosmetology

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schools.[1] Waugh argued that makeup artistry is distinct from cosmetology; in response, the Inspectors suggested she present her case directly to the Board. The Inspectors told Waugh to stop charging fees for instruction, and also that she could " essentially continue operating in the same manner," at least until she met with the Board, if she " changed the words on her website," presumably to stop representing that she was teaching makeup artistry for a fee.[2]

In February 2011, Waugh presented her case to the Board. The Board informed her that the cosmetology licensing scheme applied to her and to her school, and that the only way she could get an exemption from the occupational licensing laws was through the state Legislature. Waugh continues operating LMI as a makeup artistry school, risking punishment under the cosmetology statute including a fine up to $2,000.

B. Wendy Robin & Studio W

Robin's struggles with the Board parallel Waugh's. Robin has been a licensed cosmetologist in Nevada since 2010. In December 2010, she opened Studio W in Henderson, Nevada to exclusively teach makeup artistry.

In February 2011, Inspector Green informed Robin that the Board had received an anonymous tip that she was illegally teaching makeup artistry. Shortly thereafter, Robin met with the Inspectors (Green and Curtis) at the Board's office in Las Vegas. The Inspectors told Robin that she would have to either disable the Studio W website or completely change the website's language. The Board objected to the website's use of the words " classes" and " course" in the full context in which they were used.

Robin has since closed Studio W and now teaches makeup artistry on a freelance basis. However, she does not have an instructor's license and faces a fine of up to $2,000 every time she teaches.

C. Facts Common to Both Plaintiffs

The parties agree on these common facts related to cosmetology and makeup artistry broadly, what the Board has demanded for compliance with the cosmetology statutes and regulations, and the Board's present conduct with respect to Plaintiffs' activities. Cosmetology includes a broad range of specialty occupations focusing on hair care, skincare, and nail care. Makeup artistry, on the other hand, is more limited; among other differences with cosmetology, makeup artistry does not include hair cutting, hair coloring, hair styling, or hair removal.

To comply with the Board's interpretation of Nevada's cosmetology licensing scheme, Waugh and Robin would have to obtain either a cosmetologist instructor license or an aesthetician instructor license. In addition, Waugh and Robin would have to convert their makeup artistry schools into schools of cosmetology. Cosmetology schools train students to work as hair stylists, skincare specialists (aestheticians), and manicurists by teaching them how to treat the hair, skin, and nails. Cosmetology schools provide some instruction in makeup application. But the mandatory curriculum for cosmetology and for aesthetics does not include instruction for applying makeup with an airbrush, for special effects makeup, or for applying makeup for high-definition film or television. The state examinations to become a licensed cosmetologist and licensed aesthetician test only the most basic makeup application

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techniques. The state examination to become a licensed instructor does not test makeup artistry or makeup artistry instruction. Finally, compliance would force Plaintiffs' schools to meet various structural and equipment requirements, at significant costs.

The Board has closed its investigations of both schools because it believes LMI and Studio W came into compliance by not operating as schools--i.e., not accepting fees to teach makeup artistry. The Board has not taken any disciplinary action against Waugh or Robin. In June 2012, Plaintiffs filed suit against the Board under 42 U.S.C. § 1983, claiming violations of the Due Process Clause of the Fourteenth Amendment, the Equal Protection Clause of the Fourteenth Amendment, the Privileges or Immunities Clause of the Fourteenth Amendment, and the Free Speech Clause of the First Amendment.[3] Both sides have moved for summary judgment.[4]


A. Legal Standard -- Summary Judgment, Fed.R.Civ.P. 56

The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that " there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." [5] Material facts are those that may affect the outcome of the case.[6] A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party.[7]" Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor." [8] A principal purpose of summary judgment is " to isolate and dispose of factually unsupported claims." [9]

In determining summary judgment, courts apply a burden-shifting analysis. " When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." [10] In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial.[11] If the moving party fails to meet its initial burden, summary judgment must be denied

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and the court need not consider the nonmoving party's evidence.[12]

If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish either that a genuine issue of material fact exists or that the moving party is not entitled to judgment as a matter of law.[13] To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that " the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." [14] In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data.[15] Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts supported by competent evidence that shows a genuine issue for trial.[16]

At summary judgment, a court's function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial.[17] The evidence of the nonmovant is " to be believed, and all justifiable inferences are to be drawn in his favor." [18] But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted.[19]

Finally, " [a] trial court can only consider admissible evidence in ruling on a motion for summary judgment." [20] As " authentication is a condition precedent to admissibility, . . . unauthenticated documents cannot be considered in a motion for summary judgment." [21]

Because there are no genuine disputes of material fact in this case, a conclusion to which both sides agree, I can order judgment as a matter of law.

B. Legal Standard -- 42 U.S.C. § 1983

42 U.S.C. § 1983 provides:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. ...

Section 1983 provides a mechanism for the private enforcement of substantive rights conferred by the U.S. Constitution and federal statutes.[22] Section 1983 " 'is not

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itself a source of substantive rights,' but merely provides 'a method for vindicating federal rights elsewhere conferred.'" [23]" To state a claim under § 1983, a plaintiff must [1] allege the violation of a right secured by the Constitution and laws of the United States, and must [2] show that the alleged deprivation was committed by a person acting under color of state law." [24]

Neither side raised the issue of Eleventh Amendment immunity in the moving papers. I will address it, nonetheless. For claims brought under § 1983, the Eleventh Amendment affords immunity to the State of Nevada and to agencies of the State, such as the Nevada State Board of Cosmetology.[25] However, " Eleventh Amendment immunity is treated as an affirmative defense and can be expressly waived or forfeited if the State fails to assert it." [26]" A state waives its Eleventh Amendment immunity if it unequivocally evidences its intention to subject itself to the jurisdiction of the federal court." [27] In Johnson, the Ninth Circuit held that the defendant Community College District, an agency of the State of California, waived its Eleventh Amendment immunity by " engaging in extensive proceedings in the district court without seeking dismissal on sovereign immunity grounds." [28] The defendant " litigated the suit on the merits, participated in discovery, and filed a motion to dismiss and a summary judgment motion without pressing a sovereign immunity defense," even though it " baldly asserted in its Answer" that it was immune under the Eleventh Amendment.[29]

Similarly, the Board asserted in its Answer that it is immune from suit under the Eleventh Amendment,[30] yet the Board did not move for dismissal on this basis, participated in discovery, moved for summary judgment without raising Eleventh Amendment immunity as a defense, and orally argued the motion without raising this defense. In this circumstance, the Board unequivocally waived its Eleventh Amendment immunity as to this lawsuit.[31] Accordingly, I may order judgment against the Board, including enjoining the Board and its agents and employees, from enforcing the cosmetology statutes and regulations.[32]

C. Article III Justiciability

The Board argues that Plaintiffs' claims are not justiciable under Article III of the U.S. Constitution, which " requires that [federal courts] decide only 'cases' or

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'controversies.'" [33] To determine if a case or controversy is of the " justiciable sort referred to in Article III," [34] courts rely on the related doctrines of standing, ripeness, and mootness.[35]" The party invoking federal jurisdiction has the burden of establishing" the justiciability of a matter.[36]

1. Standing

To have standing, a plaintiff must show " (1) a concrete injury; (2) fairly traceable to the challenged action of the defendant; (3) that is likely to be redressed by a favorable decision." [37]

a. Injury-in-Fact

The injury must be actual or imminent, not conjectural or hypothetical.[38] When challenging a statutory scheme, a plaintiff " must demonstrate a realistic danger of sustaining a direct injury as a result of a statute's operation or enforcement." '[39] However, " a plaintiff does not have to await the consummation of threatened injury to obtain preventive relief." [40]

When the plaintiff has alleged an intention to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by a statute, and there exists a credible threat of prosecution thereunder, he should not be required to await and undergo a . . . prosecution as the sole means of seeking relief." . . . But persons having no fears of state prosecution except those that are imaginary or speculative, are not to be accepted as appropriate plaintiffs.[41]

Here, Plaintiffs do not just allege an intent to engage in prohibited conduct. They are presently doing so. Waugh continues to operate LMI without a license, and Robin occasionally teaches makeup artistry freelance. The Board agrees that they face penalties up to a $2,000 fine for each instance of unlicensed instruction. That the Board is not presently investigating Plaintiffs and has no present intention to do so are of no moment. An anonymous complaint triggering an investigation could arrive at any time. The threat of a complaint is not just hypothetical, as the Board received complaints about both Plaintiffs within months of the opening of their respective makeup artistry schools. In an analogous case, the Ninth Circuit determined that a purportedly regulated party--the operator of a pest removal company--had standing " because he cannot engage in his trade unless he first satisfies the current licensing requirement or receives an exemption." [42] Similarly, Waugh and Robin have standing.

b. Causation

Plaintiffs' predicament stems directly from the Board's investigation of their schools, the Board's interpretation of state cosmetology laws and regulations, and the Investigators' conclusions that the schools were operating illegally. The alleged

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injury is certainly traceable to the Board's actions.

c. Redressability

" A plaintiff meets the redressability requirement if it is likely, although not certain, that his injury can be redressed by a favorable decision." [43] More precisely, " [i]f a plaintiff is 'an object of the [challenged action] . . . there is ordinarily little question that the action or inaction has caused him injury, and that a judgment preventing or requiring the action will redress it.'" [44] Here, the Board " ha[s] the power to discipline [Plaintiffs] and, if [the Board is] enjoined from enforcing the challenged provisions, [Plaintiffs] will have obtained redress in the form of freedom to engage in certain activities without fear of punishment." [45] Those precise activities are teaching makeup artistry without a cosmetology or aesthetics instructor's license and operating a makeup artistry school that is not licensed as a cosmetology school. Plaintiffs' claims are likely, if not certain, to be redressed by a favorable decision.

Therefore, Plaintiffs have standing to bring their claims.

2. Ripeness

" The ripeness doctrine is drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction." [46]" The ripeness doctrine 'is peculiarly a question of timing.'" [47] It is " designed to separate matters that are premature for review because the injury is speculative and may never occur from those cases that are appropriate for federal court action." [48] " 'Through avoidance of premature adjudication,' the ripeness doctrine prevents courts from becoming entangled in 'abstract disagreements.'" [49]

" Ripeness has both constitutional and prudential components. . . . The constitutional component of ripeness overlaps with the 'injury in fact' analysis for Article III standing." [50] Plaintiffs here have sufficiently demonstrated an injury-in-fact, as explained above. The constitutional component of ripeness is thus satisfied.

Courts weigh two considerations to evaluate the prudential component of ripeness: " the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration." [51] " A claim is fit for decision if the issues raised are primarily legal, do not require further factual development, and the challenged action is final." [52]" To meet the hardship requirement, a litigant must

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show that withholding review would result in direct and immediate hardship and would entail more than possible financial loss." [53] More broadly, courts " consider whether the regulation requires an immediate and significant change in plaintiffs' conduct of their affairs with serious penalties attached to noncompliance." [54]

In this case, the issues are entirely legal, and there is no need for further factual development. Indeed, the parties intend the cross-motions for summary judgment to resolve the claims as a matter of law. Withholding review would maintain a precarious status quo for Plaintiffs. They would continue operating under a pall of likely future enforcement actions. The Board is aware of the existence and nature of their ongoing operations. Although there is no " final" Board action being challenged, the Board has apparently communicated to Plaintiffs that it does not intend to modify its interpretation of the cosmetology statutes and regulations. The Board's position is thus sufficiently " final" for ripeness purposes. Without review, Waugh's school faces the constant threat of shutdown and Robin faces an uncertain professional existence as an " illegal" freelance instructor. Plaintiffs are in a bind: either expend considerable time and resources to meet the current licensing regime or face serious financial penalties. Plaintiffs' claims are ripe.[55]

3. Mootness

" Article III of the United States Constitution limits federal court jurisdiction to 'actual, ongoing cases or controversies.'" [56] Federal courts lack jurisdiction " to decide moot questions or abstract propositions," because " moot questions require no answer." [57] As such, " [a] case or controversy must exist at all stages of review, not just at the time the action is filed. . . . A case may become moot after it is filed, when the issues presented are no longer 'live' or the parties lack a legally cognizable interest in the outcome." [58]

Plaintiffs' claims are undoubtedly " live." The conflict between Plaintiffs and the Board is ongoing. The Board's current inaction against Plaintiffs does not preclude review. If it did, then the Board could simply halt an investigation whenever sued over its imposition of the cosmetology licensing scheme.[59] Plaintiffs can reasonably expect to be investigated again and face financial penalties.[60] Finally, Plaintiffs certainly maintain a strong interest in the outcome of the case, as their professional and financial futures seemingly depend in large part on it.

In summary, Plaintiffs satisfy the justiciability requirements of Article III.

D. Burford Abstention

Relying on the abstention doctrine which the Supreme Court established in

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Burford v. Sun Oil,[61] the Board argues that I should abstain from deciding this case because Plaintiffs seek equitable relief and because " the State of Nevada has a strong interest in the application and enforcement of its domestic policy and the protection of the health, safety, and welfare of its citizens." [62] Under the Burford doctrine,

Where timely and adequate state-court review is available, a federal court sitting in equity must decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar; or (2) where the exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.[63]

Yet, " [w]hile Burford is concerned with protecting complex state administrative processes from undue federal interference, it does not require abstention whenever there exists such a process, or even in all cases where there is a potential for conflict with state regulatory law or policy." [64]

" [T]he power to dismiss under the Burford doctrine . . . derives from the discretion historically enjoyed by courts of equity." [65] And " the exercise of this discretion must reflect principles of federalism and comity." [66] Courts must consider " the federal interest in retaining jurisdiction over the dispute and the competing concern for the 'independence of state action'" in determining whether " the State's interests are paramount and that a dispute would be best adjudicated in a state forum." [67] Importantly, " [t]his balance only rarely favors abstention, and the power to dismiss recognized in Burford represents an extraordinary and narrow exception to the duty of the District Court to adjudicate a controversy properly before it." [68]

Here, there exists some possibility of conflict with state regulatory policy, but that conflict would arise solely as a result of the regulatory scheme violating the federal constitution. Plaintiffs' claims do not implicate any difficult questions of state law. The State of Nevada has a regulatory process to regulate cosmetology, but this case seems very unlikely to unduly interfere with that process. Plaintiffs do not mount a facial challenge to the entire regulatory scheme. Rather, this is a relatively narrow, as-applied challenge. Finally, while the State of Nevada has an interest in regulating the field of cosmetology for the public welfare, this case also seems unlikely to disrupt the State's efforts to establish a coherent policy for doing so. In light of the Supreme Court's instruction that Burford abstention is to be rarely invoked, I decline to invoke it.[69]

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E. First Amendment -- Free Speech

I analyze the free speech issues first because their resolution determines the applicable standard of review--either rational basis or intermediate scrutiny.

1. Speech or Conduct?

The threshold issue is whether the Board purports to regulate conduct or speech, which in turn depends on whether teaching makeup artistry is expressive conduct (a form of speech, also called symbolic speech).[70]" [W]ords can in some circumstances violate laws directed not against speech but against conduct. . . ." [71]" The Supreme Court has made clear that First Amendment ...

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