Divided Court affirms disqualification of provider from food care program, rejecting due process argument that agency failed to follow its own rules and improperly considered post-hearing documentation

 In re Butterfly Kisses Child Care Center, Inc. , 2025 VT 46 [8/14/2025]

CARROLL, J.   Childcare provider Butterfly Kisses Child Care Center, Inc. and its owner Cindy Boyce1 appeal a decision of the Agency of Education (AOE) to terminate and disqualify provider from participating in the Federal Child and Adult Care Food Program (CACFP) based on provider’s failure to correct noncompliance with program requirements.  Provider argues that the recurring serious deficiencies found by AOE were de minimis and did not require termination.  Provider also argues that the AOE hearing officer committed reversible error by allowing the parties to submit post-hearing documentation.  We hold that hearing officer applied the appropriate standard in terminating and disqualifying provider from the program.  As to the post-hearing submissions, we conclude that provider did not properly preserve this argument for appeal and, in any event, has failed to demonstrate reversible error.  We therefore affirm.

“Generally, administrative agencies must follow their own regulations until they rescind or amend them.”  In re Champlain Parkway SW Discharge Permit, 2021 VT 34, ¶ 12 (collecting cases).  The U.S. Supreme Court adopted an exception in American Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 538-39 (1970), which allows an agency to waive a procedural rule “adopted for the orderly transaction of business” if the waiver does not result in “substantial prejudice.”  This Court adopted American Farm Lines as a “sound principle of state administrative law.”  Champlain Parkway, 2021 VT 34, ¶ 16.

 

“To invoke the exception, the agency action must first and foremost be consistent with governing statutes. Second, the rule at issue must be a procedural rule adopted for the orderly transaction of business to aid the agency in exercising its discretion, not one intended to confer important procedural benefits upon individuals. Third, the agency action must not substantially prejudice a complaining party. Fourth, the agency action cannot constitute a failure to exercise independent discretion mandated by regulation. Finally, the agency must apply the rule consistently, not arbitrarily, unreasonably, or discriminatorily.” Champlain Parkway, 2021 VT 34, ¶ 17. (citations omitted)

 

The hearing officer’s action to allow post-hearing submissions by both parties meets this test. The limit on post-hearing memoranda is a “procedural rule” aiding the agency in exercising its discretion and is not intended to confer “important procedural benefits upon individuals.” It allows the review process to conclude in an efficient manner.

 

 The dissent claims that the rule against post-hearing submissions is meant to ensure that centers have a meaningful opportunity to respond to AOE materials.  But the allowance of post-hearing submissions had no impact on provider’s ability to respond. The hearing officer here allowed post-hearing submissions by both parties and provider filed its own post-hearing memoranda and also responded to AOE’s filing.

 

The  hearing officer allowed post-hearing submissions for a valid procedural reason and with fairness to both sides.  Allowing post-hearing submissions in this instance was not arbitrary or discriminatory and did not prejudice provider.  The hearing officer’s decision thus fell within the American Farm Lines exception.  

 

Affirmed.

 

 COHEN, J., joined by Chief Justice Reiber, dissenting.   The Vermont Agency of Education (AOE) terminated and disqualified petitioners Butterfly Kisses Child Care Center, Inc., and its owner, Cindy Boyce, from participation in the federal Child and Adult Care Food Program (CACFP) based on a hearing officer’s finding that, although there was no evidence of intentional dishonesty or fraud, petitioners nonetheless failed to fully and permanently correct certain “serious deficiencies” by stringently satisfying each of the procedural commitments in their corrective-action plan.  Ironically, however, AOE failed to adhere to its own administrative-review procedures in reaching this decision because the hearing officer summarily waived a rule barring post-hearing submissions.

 

 The majority concludes that petitioners did not preserve their challenge to this ruling, but nonetheless proceeds to analyze the issue, reasoning—in what I view as dicta—that the agency had discretion to waive this rule under the exception first articulated by the U.S. Supreme Court and adopted by this Court in In re Champlain Parkway SW Discharge Permit, 2021 VT 34.

 

I would instead conclude that petitioners’ argument is preserved, and that the Champlain Parkway exception does not apply because AOE’s bar on post-hearing submissions confers an important procedural benefit on those facing termination and disqualification from CACFP participation: it secures the fundamental requirement of due process, which is the right to be heard at a meaningful time and in a meaningful manner.  I conclude that the hearing officer lacked discretion to waive the rule and would reverse and remand for a fresh hearing. I therefore respectfully dissent.

 

  How cited

Procedural due process, under both the Vermont and United States Constitutions, does not require notice of the listers’ tax grievance decision to be mailed to counsel in addition to taxpayer.

 Salisbury AD 1, LLCv. Town of Salisbury, 2025 VT 43 [8/8/2025]

 REIBER, C.J.   This case arises out of a tax grievance before the Town of Salisbury listers.  The Town of Salisbury appeals the trial court’s denial of its motion for summary judgment and the granting of taxpayer’s motion for summary judgment including mandamus relief pursuant to Vermont Rule of Civil Procedure 75.  In so ordering, the trial court determined that the Town failed to satisfy due process by not mailing notice of the listers’ grievance decision to both taxpayer and taxpayer’s counsel.  In the circumstances of this case, procedural due process does not require notice to be mailed to counsel in addition to taxpayer.  We reverse.

Under the due-process test set forth in Mullane, Flowers, and Hogaboom, “[t]he reasonableness and hence the constitutional validity of [the] chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected.”  Mullane, 339 U.S. at 315.

The Town argues that taxpayer’s due-process right was not violated because taxpayer received actual notice of the listers’ determination by means of certified mail with return receipt. 

 

Taxpayer argues that it was entitled to summary judgment based on application of our holding in Perry v. Department of Employment & Training, 147 Vt. 621, 624,  (1987) that in the unemployment-benefits context that, notice of a referee’s decision must be sent both to the claimant and to the claimant’s attorney of record . The Town replies that Perry’s due-process directive is limited to the context of unemployment-benefits claims. Taxpayer counters that Perry was decided “under broad, generally applicable constitutional principles,” and, therefore, applies equally to a property-tax-grievance adjudication.

 

In Perry wee based our reasoning on the Colorado Supreme Court’s holding in Mountain States Telephone & Telegraph Co. v. Department of Labor & Employment, 520 P.2d 586 (Colo. 1974)  that when a litigant employs an attorney to represent their interests before an adjudicatory body “ ‘all notices required to be given in relation to the matters in controversy, including notice of the decision and entry thereof, should be given to the attorney of record’ ” to prevent “ ‘fundamental unfairness.’ ”  Perry, 147 Vt. at 624, 523 But Perry’s  analysis and holding are expressly limited to unemployment-benefits claims.  We agree with the Town that Perry is limited to its facts and does not announce a general principle of due-process requirements. Perry does not control in this instance because it is limited to its specific facts and the context of unemployment-benefit claims. 

 

In the context of a tax grievance before the Town of Salisbury listers, taxpayer’s actual receipt of notice of the listers’ decision satisfied procedural due process.  Due process, under both the Vermont and United States Constitutions, does not require notice to counsel. 

 

Reversed with instruction to enter summary judgment for the Town of Salisbury.

Public employment. Post-termination judicial remedy, alone, is not sufficient due process.

Hallsmith v. City of Montpelier, 2015 VT 83 (19-Jun-2015)

ROBINSON, J. This appeal calls upon us to determine whether a post-termination judicial remedy, in the form of a breach-of-contract action or a Vermont Rule of Civil Procedure 75 petition, is sufficient to satisfy the due-process rights of an employee whose employment is protected by a “for cause” requirement and who is terminated by a municipal employer following pre-termination proceedings that do not by themselves satisfy due process. Appellee petitioned for Rule 75 relief, arguing that the City of Montpelier failed to provide her sufficient due-process protections in terminating her employment. The trial court agreed and ordered the City to provide a new post-termination grievance hearing that fully satisfies her due-process rights. the City urges us to hold that recourse to the courts alone provides sufficient post-termination due-process protections in a case like this. We affirm.

We conclude that the availability of post-termination judicial remedies, as opposed to an administrative remedy, does not satisfy due process in a case in which a full administrative hearing does not occur pre-termination. We reach this conclusion for several reasons. First, post-termination judicial review would effectively shift the burden of proof from the City to the terminated employee. Second, post-termination judicial review often provides less timely relief than administrative proceedings. Post-termination judicial review would also risk transforming “our [trial] courts [into] hearing officers for municipalities.” In the context of a tenured municipal employee protected by a “justifiable cause” provision, We hold post-termination administrative proceedings are required to satisfy due process where pre-termination proceedings do not include a full hearing but instead meet only the minimum pre-termination requirements of Loudermill. In the absence of post-termination administrative proceedings, neither a Rule 75 appeal nor a breach-of-contract action filed in the trial court provide sufficient post-termination process to satisfy the Due Process Clause.