Bright Beginnings Daycare III and IV v. Mississippi Department of Human Services

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2024-SA-01008-COA

BRIGHT BEGINNINGS DAYCARE III AND IV APPELLANT

v.

MISSISSIPPI DEPARTMENT OF HUMAN APPELLEE
SERVICES

DATE OF JUDGMENT: 08/21/2024
TRIAL JUDGE: HON. J. DEWAYNE THOMAS
COURT FROM WHICH APPEALED: HINDS COUNTY CHANCERY COURT,
FIRST JUDICIAL DISTRICT
ATTORNEYS FOR APPELLANT: EDWARD BLACKMON
BRADFORD JEROME BLACKMON
ATTORNEYS FOR APPELLEE: AZANDE WALLACE WILLIAMS
KRISTI DUNCAN KENNEDY
NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES
DISPOSITION: AFFIRMED - 03/17/2026
MOTION FOR REHEARING FILED:

BEFORE WILSON, P.J., WESTBROOKS AND LAWRENCE, JJ.

WILSON, P.J., FOR THE COURT:

¶1. A Mississippi Department of Human Services (MDHS) administrative hearing officer

issued a “disqualification decision” finding that Bright Beginnings Daycare III and IV,

daycare providers1 participating in the Mississippi Child Care Payment Program (CCPP),2

1
We refer to the daycares collectively as Bright Beginnings.
2
“The Mississippi Child Care Payment Program . . . is a federally-funded program
designed to provide assistance with child care tuition to low-income parents who meet
prescribed income and work requirements. . . . For those who meet the guidelines, the
program pays a part of the tuition cost, i.e., a subsidy payment, and the participant pays a
portion, i.e., the family co-pay. Both payments go directly to the child care provider.”
Williams v. Berry, 977 F. Supp. 2d 621, 626 (S.D. Miss. 2013).
had intentionally violated the program’s rules. Bright Beginnings attempted to appeal the

hearing officer’s decision to the Hinds County Chancery Court, but the chancery court

dismissed the appeal for lack of jurisdiction because Bright Beginnings failed to exhaust its

administrative remedies. On appeal, Bright Beginnings does not dispute that it failed to

exhaust its administrative remedies but argues that the exhaustion requirement should be

excused. We find no error and affirm the decision of the chancery court.

FACTS AND PROCEDURAL HISTORY

¶2. Towanda Ware owns Bright Beginnings Daycare Service LLC, which owns and

operates four daycares—Bright Beginnings I, II, and III in Greenwood and Bright

Beginnings IV in Carrollton. Ware submitted applications to MDHS’s Division of Early

Childhood Care and Development (DECCD) for each daycare to participate in the CCPP.

The DECCD approved the applications, and all four daycares became authorized providers.

¶3. In June 2022, a Leflore County grand jury indicted Ware for eight counts of welfare

fraud and three counts of making false representations to MDHS with the intent to defraud.

The indictments pertained solely to Bright Beginnings I and II and their participation in the

CCPP. The indictments alleged that Ware falsely claimed that children were in attendance

at Bright Beginnings I and II in order to fraudulently obtain CCPP payments and failed to

maintain sign-in and sign-out sheets for the children, as required by program rules.

¶4. Following the indictment, DECCD suspended CCPP payments to Bright Beginnings

I, II, III, and IV. On July 25, 2022, the MDHS Office of the Inspector General (OIG)

conducted simultaneous compliance visits at Bright Beginnings III and IV. At Bright

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Beginnings III, OIG agents knocked on the front door, identified themselves, and advised

Sherry Powell, who identified herself as the director of the daycare, that the agents were

conducting a compliance visit to review child sign-in and sign-out sheets. Powell refused

to allow the agents to enter and instructed them to wait outside until the “owners” arrived.

Powell stated that the “owners” were on their way. The agents waited thirty minutes and

again knocked on the front door. However, Powell again refused to allow the agents to enter

the daycare and refused to provide the requested records. At Bright Beginnings IV, agents

were allowed to enter and eventually talked to the daycare’s director, Denetris Harris.

However, Harris did not provide the requested records and told the agents they would have

to request the records from Ware’s attorney.

¶5. On March 8, 2023, MDHS issued a notice to Ware that a program disqualification

hearing would be held on April 20, 2023, to determine whether Bright Beginnings III and IV

failed to comply with CCPP rules “by refusing to allow MDHS access to records, specifically

student sign-in sheets, resulting in an overissuance of benefits totaling $741,489.31.” The

notice to Ware enclosed a two-page “NOTICE OF RIGHTS” that stated in part:

The hearing officer will make the final administrative decision on your case.
You will receive a written order explaining the basis for the decision. If you
do not agree with the final administrative decision, you may appeal the hearing
officer’s decision, within fourteen (14) calendar days of the date of the
Administrative Disqualification Hearing Decision. A desk review will be
conducted by the Director of Administrative Hearings. You may further
appeal and seek relief in a court having appropriate jurisdiction after the
Administrative Disqualification Hearing Review Decision.

¶6. Bright Beginnings’s attorney responded to the hearing notice and requested that the

administrative disqualification proceeding be stayed “until after [Ware’s] criminal trial” in

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circuit court pertaining to Bright Beginnings I and II. The disqualification hearing was

postponed, and the hearing officer, Royce Cole, held a telephonic hearing on Bright

Beginnings’s request for a stay. Bright Beginnings subsequently filed a written motion to

stay the administrative disqualification hearing until Ware’s criminal case was resolved,

arguing that there was a “factual overlap between the civil case and the criminal prosecution”

and that compelling Bright Beginnings to defend the civil case would violate Ware’s Fifth

Amendment privilege against self-incrimination. MDHS opposed Bright Beginnings’s

request, arguing that Bright Beginnings was not entitled to an “indefinite continuance” based

on the criminal charges against Ware. MDHS also emphasized that the administrative action

involved “two separate and distinct daycares” that were not involved in the criminal case.

The hearing officer denied Bright Beginnings’s request, finding that there was “not a

sufficient basis to grant an indefinite continuance” of the administrative action.

¶7. The disqualification hearing was held on December 18, 2023. MDHS OIG Agent

Joshua Bankston testified on behalf of MDHS, and audio recordings of MDHS’s compliance

visits and records of CCPP payments to Bright Beginnings III and IV were admitted into

evidence. Ware did not testify or offer any evidence. On January 29, 2024, the hearing

officer issued a disqualification decision, finding that MDHS proved by clear and convincing

evidence that Ware, as the owner of Bright Beginnings III and IV, intentionally violated

CCPP program rules “by refusing to allow MDHS access to childcare records, specifically

student sign-in sheets, resulting in an overissuance of benefits totaling $741,489.31.”

¶8. On February 6, 2024, Bright Beginnings filed a notice of appeal in the Hinds County

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Chancery Court. MDHS subsequently filed a motion to dismiss the appeal, arguing that the

chancery court lacked jurisdiction because Bright Beginnings failed to exhaust its

administrative remedies before seeking judicial review. Specifically, MDHS argued that

Bright Beginnings failed to appeal the hearing officer’s decision to the director of the

Administrative Hearings Division, as required by MDHS’s Administrative Hearings Rules.

See supra ¶5. In response, Bright Beginnings argued that it was not required to exhaust its

administrative remedies because its appeal involved a “question of law,” and exhaustion by

administrative appeal would be “futile.”

¶9. The chancery court granted MDHS’s motion to dismiss the appeal, finding that Bright

Beginnings failed to show that an administrative appeal would have been “futile” or that the

case was otherwise excepted from the general rule that administrative remedies must be

exhausted prior to seeking judicial review. Bright Beginnings filed a notice of appeal, and

its appeal was assigned to this Court.

ANALYSIS

¶10. An appeal from a dismissal “for failure to exhaust administrative remedies presents

a jurisdictional question.” Town of Bolton v. Chevron Oil Co., 919 So. 2d 1101, 1104 (¶9)

(Miss. Ct. App. 2005). “This Court reviews jurisdictional issues de novo.” Id.

¶11. Here, when this administrative proceeding began, MDHS’s rule regarding appeals

from administrative disqualification decisions provided as follows:

The only level of an administrative disqualification hearing appeal occurs to
the hearing officer of the Division of Administrative Hearings. If the claimant
seeks to dispute the Administrative Disqualification Hearing Decision, the
claimant must submit a written request to the Administrative Hearings

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Division of MDHS within fourteen (14) calendar days of the date of the
Administrative Disqualification Hearing Decision.

After an appeal is requested, an administrative hearing officer will forward
both the record and the adverse Administrative Disqualification Hearing
Decision to the hearing officer of Administrative Hearings Division or the
designee within fourteen (14) calendar days of receipt of appeal request from
the claimant. The hearing officer or designee at that time will review the
record in its entirety and decide whether the adverse decision should be
adopted, modified or reversed. The decision will be memorialized, and the
claimant will be notified of the Administrative Disqualification Hearing
Appeal Decision within thirty (30) calendar days from the date the hearing
officer or designee received the appeal. The Administrative Disqualification
Hearing Appeal Decision from the hearing officer or designee shall be final
and binding.

The claimant may appeal and seek relief in a court having appropriate
jurisdiction after the Administrative Disqualification Hearing Appeal Decision
is rendered.

18 Miss. Admin. Code Pt. 23, ch. 2, R. 15 (amended Apr. 6, 2022) (emphasis added).3

¶12. Thus, Bright Beginnings clearly failed to exhaust an available administrative remedy

(an administrative appeal). Indeed, Bright Beginnings does not dispute this point. Rather,

it argues (1) that “MDHS’s notice to [Bright Beginnings] regarding the right to appeal was

deficient” and (2) that exhaustion was not required because an administrative appeal would

have been “futile” and because “[t]he appeal presented a question of law that did not require

agency expertise.”

¶13. In general, “[a] complainant must exhaust available administrative remedies before

resorting to the courts for resolution of his dispute.” Town of Bolton, 919 So. 2d at 1104-05

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The rules applicable to administrative disqualification hearings and appeals were
amended after this administrative proceeding began. However, Bright Beginnings does not
dispute that the rules in effect at the outset of the proceeding, including the rule quoted
above, remained applicable to this case.

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(¶10) (quoting State v. Beebe, 687 So. 2d 702, 704 (Miss. 1996)). But “[t]he exhaustion

doctrine is not without its exceptions.” Pub. Emps. Ret. Sys. of Miss. v. Hawkins, 781 So. 2d

899, 906 (¶31) (Miss. 2001). “[W]hen no adequate administrative remedy is available,

exhaustion is not required.” Town of Bolton, 919 So. 2d at 1105 (¶10) (citing Campbell

Sixty-Six Express Inc. v. J. & G. Express Inc., 244 Miss. 427, 440, 141 So. 2d 720, 726

(1962)). Our Supreme Court has “examined three variables in determining whether to

require exhaustion: ‘extent of injury from pursuit of administrative remedies, degree of

apparent clarity or doubt about administrative jurisdiction, and involvement of specialized

administrative understanding in the question of jurisdiction.’” Id. (quoting Campbell Sixty-

Six Express, 244 Miss. at 441, 141 So. 2d at 726). “The [Supreme Court] has set out several

factors that weigh against an exhaustion requirement: ‘the pursuit of the administrative

remedy would result in irreparable harm; the agency clearly lacks jurisdiction; the agency’s

position is clearly illegal; the dispositive question is one of law; exhaustion would be futile;

and comparatively, the action can be disposed of with less expense and more efficiently in

the judicial arena.’” Id. (quoting Hawkins, 781 So. 2d at 906 (¶31)).

¶14. Bright Beginnings first argues that the exhaustion requirement should be excused or

waived because MDHS provided insufficient notice of Bright Beginnings’s right to an

administrative appeal. Specifically, Bright Beginnings argues that the notice was “deficient”

because “[i]t was not attached to the Hearing Officer’s order but rather mailed some nine

months earlier in a letter,” i.e., the “NOTICE OF RIGHTS” enclosed with the first hearing

notice that Bright Beginnings received in March 2023. See supra ¶5. This argument is

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without merit. Bright Beginnings cites no authority holding that notice of a right to appeal

is deficient or ineffective because it was provided in advance of the administrative hearing

and decision. Bright Beginnings was clearly advised of its right to an administrative appeal

in a “NOTICE OF RIGHTS” provided at the outset of this administrative action.

¶15. Moreover, “those who deal with the Government are expected to know the law.”

Heckler v. Cmty. Health Servs. of Crawford Cnty. Inc., 467 U.S. 51, 63 (1984); see also

HL&C Marion LLC v. DIMA Homes Inc., 364 So. 3d 616, 620 (¶18) (Miss. 2022) (A party

“is charged with knowledge of its rights under the law.”); Tullos v. Town of Magee, 181

Miss. 288, 295, 179 So. 557, 558 (1938) (“[A]ll persons dealing with [a governmental entity]

are charged with knowledge of the laws by which it is governed . . . .”). Therefore, “[w]here

federal funds are implicated, the person seeking those funds is obligated to familiarize

himself with the legal requirements for receipt of such funds.” Cohen v. Allstate Ins., 924

F.3d 776, 780 (5th Cir. 2019). Here, Bright Beginnings voluntarily applied to receive federal

funds as a CCPP provider. Having done so, it is charged with knowledge of its obligations

and rights under the program, including the procedures for disqualification.

¶16. We now examine the “variables” or “factors” the Mississippi Supreme Court has

identified as relevant to the question whether exhaustion of administrative remedies should

be required in a particular case. Town of Bolton, 919 So. 2d at 1105 (¶10). Importantly,

Bright Beginnings identifies no “irreparable harm” or “injury” that would have resulted from

an administrative appeal. Id. Under the rule applicable in this case, an administrative appeal

would have been resolved within two months. See supra ¶11.

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¶17. Next, although Bright Beginnings asserts that “[t]his case implicates” some “clarity

or doubt about administrative jurisdiction,” it fails to explain how. MDHS clearly had

jurisdiction to initiate an administrative proceeding to disqualify Bright Beginnings from

participation in the CCPP, as well as jurisdiction to continue or stay that proceeding. See 18

Miss. Admin. Code Pt. 23, ch. 2, R. 7 (amended Apr. 6, 2022) (authorizing “continuance(s)

of an administrative disqualification hearing”). There is no “doubt” about the agency’s

“jurisdiction” in this case.

¶18. Nor can we say that “the agency’s position is clearly illegal.” Town of Bolton, 919

So. 2d at 1105 (¶10) (emphasis added). In the administrative proceeding, the agency argued

that an indefinite stay was not warranted because Ware would not be compelled to testify in

the administrative hearing and because her criminal prosecution involved different daycares

that are not at issue in this case. The agency maintained there was no violation of Ware’s

Fifth Amendment privilege against self-incrimination because she was not compelled to be

a witness against herself or to offer any evidence at all. Similarly, the United States Court

of Appeals for the Fifth Circuit held that a police officer’s administrative disciplinary hearing

could proceed even though the officer faced pending criminal charges involving the same

alleged misconduct. Luman v. Tanzler, 411 F.2d 164, 165-67 (5th Cir. 1969). The court held

that the officer could not be compelled to testify or be fired for refusing to testify, and “[t]his

[was] a full vindication of [his] Fifth Amendment privilege against self-incrimination.” Id.

at 167. Therefore, the court held that the disciplinary hearing board could proceed with the

officer’s administrative hearing without compelling the officer’s testimony. Id.; see also

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United States v. Little Al, 712 F.2d 133, 135-36 (5th Cir. 1983) (holding that a trial court did

not err by refusing to stay a civil forfeiture action even though the party claiming ownership

of the subject property faced parallel criminal charges and “the pendency of the criminal

action forced him to choose between preserving his privilege against self-incrimination and

losing the civil suit” (quotation marks omitted)). Here, MDHS could have exercised its

discretion to stay the administrative disqualification hearing. However, given that Ware was

not compelled to testify in the administrative hearing, we cannot say that “the agency’s

position is clearly illegal.” Town of Bolton, 919 So. 2d at 1105 (¶10).

¶19. Bright Beginnings argues that an exhaustion requirement is not appropriate in this

case because its appeal presents a “question of law” that does not require any specialized

“agency expertise.” Hawkins, 781 So. 2d at 907 (¶¶33-34). “The fact that the dispositive

question is one of law[] does not alone warrant excusing exhaustion of administrative

remedies, but it is a factor to be considered.” Id. at (¶33). While Bright Beginnings’s

constitutional argument raises a question of law, the agency’s specialized knowledge of the

CCPP and of administrative disqualification procedures and hearings would have been

relevant to that question. In any event, even assuming that this factor weighs in favor of

Bright Beginnings, this factor “does not alone warrant excusing exhaustion of administrative

remedies.” Id.

¶20. Bright Beginnings also argues that its failure to exhaust should be excused because

exhaustion would have been “futile.” Bright Beginnings asserts that it has proved futility

because it has “admitted the very charge at the heart of the disqualification hearing—that [it]

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failed to produce attendance documentation and failed to have the documentation[] at the

daycare facility.” Beyond this assertion, Bright Beginnings simply claims that MDHS was

inherently “biased” because it played a role in bringing the criminal action against Ware.

These arguments are without merit. If Bright Beginnings had pursued an administrative

appeal, the appellate hearing officer would have “review[ed] the record in its entirety” and

possessed full authority to adopt, modify, or reverse the initial administrative decision. See

supra ¶11. For all we know, the appellate hearing officer could have vacated the

disqualification decision and granted the stay that Bright Beginnings requested. See CLC of

Biloxi LLC v. Miss. Div. of Medicaid, 189 So. 3d 726, 733 (¶27) (Miss. Ct. App. 2016)

(finding that the appellant’s argument that exhaustion was “futile” because the agency’s

decision “would not change” was mere “speculation”). Nothing in the record supports Bright

Beginnings’s claim that exhausting its administrative remedies would have been “futile.”

¶21. Finally, the record does not show that this “action can be disposed of with less

expense and more efficiently in the judicial arena.” Hawkins, 781 So. 2d at 906 (¶31). In

Hawkins, the Court held that this factor weighed against requiring exhaustion because “[t]he

record disclose[d] that the history of [the agency’s] administration [of the] dispute ha[d] been

to hold it under consideration rather than resolving it.” Id. at 907 (¶33). Here, however,

MDHS expeditiously resolved Bright Beginnings’s motion for a stay and the merits of the

case.

¶22. In summary, although Bright Beginnings’s appeal raises an issue of law, no other

relevant factor weighs against enforcing the general rule that “a party is required to exhaust

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available administrative remedies before seeking judicial review.” Hawkins, 781 So. 2d at

905 (¶29). Therefore, we cannot say that the chancery court erred by dismissing Bright

Beginnings’s appeal for failure to exhaust administrative remedies.

¶23. AFFIRMED.

BARNES, C.J., CARLTON, P.J., WESTBROOKS, LAWRENCE, McCARTY,
EMFINGER, WEDDLE AND LASSITTER ST. PÉ, JJ., CONCUR. McDONALD, J.,
CONCURS IN RESULT ONLY WITHOUT SEPARATE WRITTEN OPINION.

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