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Nevada Partners, Inc. v. Workforce Connections

United States District Court, D. Nevada

August 21, 2019

NEVADA PARTNERS, INC., Plaintiffs,
v.
WORKFORCE CONNECTIONS, et al., Defendants.

          ORDER

         Presently before the court is defendants Jaime Cruz and Workforce Connections' (collectively “defendants”) motion to dismiss. (ECF No. 28). Plaintiff Nevada Partners, Inc. (“Nevada Partners”) filed a response (ECF No. 32), to which defendants replied (ECF No. 34).

         I. Facts

         This action arises from a dispute regarding Workforce Connections' award of federal grants in the amount of $10, 000, 000 to ResCare Workforce Services (“ResCare”), which is an organization that matches job applicants with employers. (ECF No. 1). The complaint contains the following allegations:

         Workforce Connections is Southern Nevada's local workforce development board. Id. Among its various duties, Workforce Connections distributes federal grants for the improvement of employment services pursuant to the Workforce Innovation and Opportunity Act (“WIOA”), 29 U.S.C. § 3102 et seq. Id. Local boards award WIOA grants on a competitive basis, in which the applicants with the best performance are more likely to receive funds. 29 U.S.C. § 1322(d)(10)(B)(i); NRS 232.935(4)(d)(1); Id.

         From 2015 to 2018, Workforce Connections distributed over $9, 000, 000 to Nevada Partners. (ECF No. 1). Nevada Partners used those funds to assist thousands of residents with job readiness services and provide federal tax return assistance. Id. Workforce Connections also awarded ResCare millions of dollars in grants during this time period. Id. On July 1, 2015, Workforce Connections also designated ResCare to operate the One-Stop Center in its building. Id. One-Stop Center operators coordinate workforce services that organizations like Nevada Partners provide. Id. On March 21, 2017, ResCare ceased to serve as the One-Stop Center operator but remained in Workforce Connections' building. Id.

         In 2018, Workforce Connections began a new request for proposals process to fund WIOA programs from July 2019 to June 2022. Id. The new application process had two substantial changes: (1) past performance evaluations were no longer a part of the initial technical review stage and (2) grant applicants had to comply with a “cash match” requirement to receive WIOA funds. Id.

         The “cash match” provision required applicants to match two percent of their requested grant amount in cash resources. Id. The new “cash match” requirement did not displace the “in-kind match” requirement that Workforce Connections required in prior request for proposals processes. Id. The “in-kind match” provision required applicants to match three percent of their requested grant amount but did not require applicants to commit those matching funds to the relevant grant project. Id.

         In early 2019, Workforce Connections required Nevada Partners to undergo an on-site monitoring review during the days before, and immediately up to, the deadline to submit grant applications. Id. The monitoring process involved a review of all fiscal and administrative documents. Id. Nevada Partners also kept its staff and directors available on site to answer all questions, collect documents, and participate in meetings. Id. Workforce Connections did not conduct other on-site monitoring reviews for any other grant applicants in the days before the submission deadline. Id.

         On March 13, 2019, Workforce Connections convened a programs committee meeting in which it planned to award $10, 000, 000 to ResCare and no WIOA funding to Nevada Partners, consistent with the ad hoc selection panel's recommendation. Id. Various individuals at the meeting raised concerns regarding Workforce Connections' plan. Id. The primary points of contention were that the request for proposals process did not include interviews with grant applicants and that ResCare allegedly performed worse than other applicants that the ad hoc selection panel did not recommend for funding. Id. In response to those concerns, Workforce Connections continued the meeting. Id.

         On April 2, 2019, the programs committee reconvened. Id. Two weeks in advance of that meeting, Nevada Partners submitted a written request to Cruz asking for notice. Id. Workforce Connections failed to provide a copy of notice to Nevada Partners and did not post public notice by March 29, 2019. Id. The committee ultimately approved the ad hoc selection panel's recommendation. Id. On May 9, 2019, Workforce Connections' board of directors held an open meeting where it followed the ad hoc selection panel's recommendation and awarded $10, 000, 000 to ResCare. Id.

         On May 3, 2019, Nevada Partners initiated this action, asserting eight causes of action: (1) violation of procedural due process; (2) violation of substantive due process; (3) violation of equal protection; (4) violation of Nevada's open meeting law, NRS 241.020; (5) violation of WIOA's competitive process requirement, 29 U.S.C. § 3122 et seq.; (6) violation of WIOA's performance accountability measures requirement, 29 U.S.C. § 3141 et seq.; (7) violation of WIOA's conflict of interest provision, 29 U.S.C. § 3122(h) et seq.; and (8) injunctive relief. (ECF No. 1).

         Now, defendants move to dismiss all causes of action pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 28).

         II. Legal Standard

         A court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).

         “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (citation omitted).

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id.

         Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678.

         Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged - but it has not shown - that the pleader is entitled to relief.” Id. at 679. When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

         The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court held,

First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is ...

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