Arthur O. Phaneuf, A.O. Phaneuf & Son Funeral Home and Cremation Inc., and Crematorium Society of New Hampshire, Inc.

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1 MERRIMACK, SS SUPERIOR COURT Arthur O. Phaneuf, A.O. Phaneuf & Son Funeral Home and Cremation Inc., and Crematorium Society of New Hampshire, Inc. v. N.H. Board of Registration of Funeral Directors and Embalmers, Susan A. Simonds, Thomas G. Janosz, and Bryan S. Gould, individually and as members of the N.H. Board of Registration of Funeral Directors and Embalmers NO CV-658 ORDER Petitioners, Arthur O. Phaneuf ( Phaneuf ), Phaneuf & Sons Funeral Home, Inc. ( Funeral Home ), and Cremation Society of New Hampshire, Inc. ( the Society ), have brought an action pursuant to 42 U.S.C and RSA 491:22 for damages and injunctive relief against Susan A. Simonds, Thomas G. Janosz, and Bryan A. Gould, individually and as members of the New Hampshire Board of Registration of Funeral Directors and Embalmers ( the Board ) and against the Board itself. Petitioners request an order stating (1) that the Board and its members are enjoined from entering or enforcing an order that includes sanctions against Petitioners based on a complaint of Robert L. Holmes; (2) that the Board is preliminarily enjoined from communicating in any way that would adversely impact the reputations or business goodwill of Petitioners; and (3) that the three individual Defendants are preliminarily enjoined from communicating in

2 any way that would adversely impact the reputations or business goodwill of the Petitioners to anyone outside the membership of the Board. For the reasons stated in this Order, the Motion for a Preliminary Injunction is DENIED. I The procedural posture of this case is somewhat unusual. By way of complaint dated October 2011, the Board sought disciplinary action against Petitioner Phaneuf based on allegations of misconduct made by the Society's client, Robert L. Holmes, who engaged the Society s services following his late wife's passing in The Petitioners filed suit in the United States District Court to stop the Board's disciplinary action. 1 The Board obtained dismissal of that matter based on the federal abstention doctrine, and the disciplinary action proceeded. The Board issued a disciplinary finding against Phaneuf by an order dated July 19, This case was filed on September 21, A temporary hearing on the request for a preliminary injunction was held on October 10, 2012, and the parties advised the Court that a motion to reconsider the Board's July 19, 2012 decision had been filed and was under advisement. Following the hearing, the parties filed additional memoranda, and briefing was completed on October 30, On October 31, 2012, the Respondent advised the Court that the motion to reconsider had been denied by the Board. On November 5, 2012, counsel for Petitioners filed a notice that Petitioners intended to appeal the Board's underlying disciplinary findings against Phaneuf to the New Hampshire Supreme Court, but that Petitioners would request Supreme Court to stay the appeal process until Petitioners complaint is resolved in this Court. Petitioners continue to request that the proceedings before the 1 Phaneuf et al. v. N.H. Bd. Registration of Funeral Dirs. and Emblamers, Civ. No. 21-cv-160 2

3 Board be enjoined. II An injunction is an extraordinary remedy. N.H. Dep t of Envtl. Servs. v. Mottolo, 155 N.H. 57, 63 (2007). In order to obtain an injunction, the Petitioners must establish: (1) likelihood of success on the merits; (2) immediate danger of irreparable harm; and (3) that they have no adequate remedy at law. Id. Further, even if these requisites are satisfied, an injunction must be in the best interest of the public. See UniFirst Corp. v. Nashua, 130 N.H. 11, 14 (1987). An injunction is an equitable remedy which is discretionary. Mottolo, 155 N.H. at 63. Respondents argue that the Petitioners cannot show a likelihood of success on the merits because the individual Respondents are immune from a claim for money damages, and the defense of sovereign immunity is available to the Board. Petitioners argue that whether or not a defense of immunity for money damages can be raised, a claim of injunctive relief can be made, and Petitioners argue that they have shown a likelihood of success on the merits. The Court need not decide this difficult issue, however, because the Petitioners cannot satisfy the second and third prongs of the requirements for a preliminary injunction; irreparable harm and lack of an adequate remedy at law. Petitioners allege that they have suffered irreparable harm to their reputation and business goodwill as a result of the Respondents conduct. However, whatever harm to Petitioners has occurred has already occurred, because the proceedings against them have already concluded. Further, the Board's finding, and its attendant publicity, oc- SM (D.N.H Aug. 14, 2012). 3

4 curred in July of this year. Petitioners do not dispute the fact that a sanction has already been issued but argue that destruction of a business is considered irreparable harm, which can appropriately be remedied by injunctive relief. Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197, 1205 (2d. Cir. 1971). While this principle of law is correct in does not aid them. Petitioners tacitly admit that their business has not been destroyed and argue only that some unquantifiable harm to the business has occurred and/or might occur in the future: The harm that resulted from the Respondents' leak was immediate and remains ongoing. Within days of publication, Mr. Phaneuf received a call from a prospective customer who advised that he was planning on using the Petitioners services but decided to take his business elsewhere after reading the article. Also in response to this bad press, a former Cremation Society client contacted the Board to bring up a problem that had been resolved in Petitioners have no way of knowing how many clients have moved their prepaid accounts to Petitioners competitors because of this article. Mem. Law Support Pet rs Response Resp ts Obj. Mot. TRO 4 5 ( Pet rs Mem. ) (emphasis added). Petitioners have presented no evidence that their business has been or will be destroyed, and this allegation is simply not sufficient to establish a claim of irreparable harm. III Similarly, Petitioners have an adequate remedy at law. On November 5, 2012, Petitioners filed a notice that the Board had denied the motion to reconsider the disciplinary order against Phaneuf. Petitioners advised the Court that "Arthur Phaneuf intends to file a Notice of Appeal and to ask the New Hampshire Supreme Court to stay the appeal process until Petitioners Complaint is resolved in this Court." Notice of Bd. 4

5 Decision and Order 4. The New Hampshire Supreme Court has stated, "[w]henever a statute provides a procedure for appeal or review of an administrative agency's decision, that procedure is exclusive and must be followed. Frost v. Comm r, 163 N.H. 365, 373 (2012); Nashua v. Pub. Util. Comm n, 101 N.H. 503, (1959). Typically, before an administrative agency decision may be reviewed, administrative remedies must be exhausted. Konefal v. Hollis/Brookline Coop. Sch. Dist., 143 N.H. 256, 258 (1998). However, the exhaustion of administrative remedies doctrine is flexible, and... exhaustion is not required under certain circumstances. Id.; Pheasant Lane Realty Trust v. City of Nashua, 143 N.H. 140, (1998). The New Hampshire Supreme Court has stated that an administrative appeal may not be required where the action raises a question that is peculiarly suited to judicial rather than administrative treatment and no other adequate remedy is available. McNamara v. Hersh, 157 N.H. 72, 74 (2008) (citation and quotation omitted). Petitioner argues that an administrative appeal should not be required here because the issues raised involve the constitutionality or validity of the administrative action. The Court disagrees. The exhaustion doctrine is premised upon the reasonable policies of encouraging the exercise of administrative expertise, preserving agency autonomy and promoting judicial efficiency. Id. at 74 76; Bradley v. Manchester, 141 N.H. 329, 332 (1996). In Frost v. Commissioner, (supra) the New Hampshire Supreme Court held that it was proper for a trial court to enjoin administrative disciplinary proceedings where the question presented by the petition was the pure legal question of whether the Department had jurisdiction over the transactions at issue. 163 N.H. at 372. The Court noted 5

6 that in such circumstances "there is no need for the court to await the outcome of the Department s administrative proceedings centered on those transactions." Id. Similarly, in Thompson v. New Hampshire Board of Registration, 143 N.H. 107, 110 (1998) the New Hampshire Supreme Court upheld a Superior Court decision to enjoin disciplinary proceedings which had not yet occurred because they were being conducted in violation of the petitioner's due process rights. The Court noted "the superior court may... intervene prior to entry of final judgment in exceptional circumstances where, as here, a party raises a due process violation that fundamentally impedes the fairness of an underlying proceeding resulting in immediate and irreparable harm to that party. Id. Here, the proceedings against the Petitioner have already concluded. More importantly, apart from the fact that the proceedings have already concluded, the remedy available to him by statute is peculiarly suited to the relief he requests. Petitioner argues: The issues in this case focus on the meaning of RSA 325:1 and RSA 325:14, the applicability of RSA 325:32, II (c) and RSA 325:32, II (g)[,] and whether or not Frl applies retroactively. Because these issues are primarily legal rather than factual determinations, they are particularly suited for judicial review. Issues such as those presented in this case did not require specialized administrative understanding. Pet rs Mem. 8 (emphasis added). Judicial review is available to Petitioners through the appeal process of RSA 325:34, VII, which authorizes an appeal to the New Hampshire Supreme Court. That Court, pursuant to RSA 541:6 will be able to consider the legal issues Petitioner argues are the heart of his claim. Not only do Petitioners have an adequate remedy at law, the exercise of that remedy, by an appeal to the New Hampshire Supreme Court, will likely result in judicial economy and reduction of expense. 6

7 Award of injunctive relief in these circumstances could not be in the public interest. It follows, then, that the Petitioners Motion for a Preliminary Injunction must be DENIED. SO ORDERED. 11/19/12 s/richard B. McNamara DATE Richard B. McNamara, Presiding Justice 7