                United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 13-3080
                        ___________________________

                    Sparkman Learning Center; Jessie Carter

                     lllllllllllllllllllll Plaintiffs - Appellants

                                          v.

  Arkansas Department of Human Services; John Selig, Individually and in his
  official capacity as Director, AR DHS; Tonya Russell, Individually and in her
   official capacity as Director of Division of Child Care and Early Childhood
 Education AR DHS other Director, Division of Child Care and Early Childhood
                               Education of AR DHS

                     lllllllllllllllllllll Defendants - Appellees
                                      ____________

                    Appeal from United States District Court
                for the Western District of Arkansas - El Dorado
                                ____________

                         Submitted: September 11, 2014
                           Filed: December 30, 2014
                                ____________

Before RILEY, Chief Judge, SMITH and KELLY, Circuit Judges.
                              ____________

SMITH, Circuit Judge.
       Sparkman Learning Center and its executive director, Jessie Carter, (referred
to collectively as "Sparkman") appeal the district court's1 denial of their preliminary
injunction, denial of their post-judgment motions to alter or amend a judgment, and
granting of the Arkansas Department of Human Services's (DHS) motion to dismiss
Sparkman's claims that DHS violated their due process and equal protection rights
under the Fourteenth Amendment of the United States Constitution. The district court
barred Sparkman's claims based on principles of claim preclusion within Arkansas
law because the claims could have been brought during the state administrative
proceeding and judicial review. We affirm.

                                     I. Background
       DHS is a state agency whose Division of Child Care and Early Childhood
Education ("Division") regulates child care facility licensing; the Division also
administers the USDA Child Care Food Program ("Program"), which is funded by the
federal government. Appellee John Selig is the director of DHS, and appellee Tonya
Russell is the director of the Division (referred to collectively as "DHS"). Sparkman
Learning Center is a day care facility that provided disability services funded by DHS
and took part in the Program that DHS facilitated. A federal regulation for the
Program prohibits enrolled providers from placing disqualified individuals in a
position of authority. See 7 C.F.R. § 226.6(c)(3)(ii)(B). Additionally, DHS Policy
1088 states that violations of the Program's regulations can result in the exclusion of
the provider from receiving further funding from DHS.

      In 2005, DHS notified Sparkman of their intent to exclude Sparkman from
further DHS funding and activities due to Sparkman's alleged placement of a
disqualified individual, Patricia Whitaker, in a position of authority. Sparkman
appealed this decision and was given a hearing before a DHS administrative law


      1
       The Honorable Susan O. Hickey, United States District Judge for the Western
District of Arkansas.

                                         -2-
judge (ALJ) pursuant to the Arkansas Administrative Procedures Act. See Ark. Code
Ann. §§ 25-15-201–25-15-219. Sparkman believed that racial animus motivated DHS
to place Whitaker on the disqualification list. Nonetheless, Sparkman did not raise
any constitutional equal protection claim at this first administrative hearing. Because
the ALJ presiding over the case was relatively new, a more experienced ALJ observed
portions of the hearing. In a curious turn of events, before the hearing process was
complete, the ALJ presiding over Sparkman's hearing resigned, stating "as an African
American male I cannot continue to work in a[n] office where racism and harassment
continue to exist on a daily basis." After the initial ALJ resigned, the other ALJ
present, who was Caucasian, decided the case. The second ALJ's decision upheld
DHS's termination of funding for Sparkman. Sparkman appealed this decision to the
Pulaski County Circuit Court and subsequently to the Arkansas Court of Appeals.
Sparkman alleged that the irregularity of having two ALJs involved in the
administrative hearing violated their due process rights. Sparkman also alleged for
the first time that racial animus on the part of the Caucasian ALJ affected the outcome
of the case.

      In December 2006, with state proceedings underway, Sparkman also filed a
complaint in the Western District of Arkansas alleging violations of their due process
and equal protection rights under the Fourteenth Amendment of the United States
Constitution. The district court declined to hear the case while the state court appeals
were pending pursuant to the Younger2 abstention doctrine.

      Meanwhile, the Arkansas state courts, upon DHS's motion, remanded the
administrative hearing appeal back to the hearing level to conduct a second hearing.
For the second hearing, DHS appointed a private attorney to serve as the
administrative hearing officer; Sparkman agreed to the selection. In the second
administrative hearing, Sparkman again made no claims regarding equal protection


      2
          Younger v. Harris, 401 U.S. 37 (1971).

                                          -3-
violations resulting from DHS's racial animus, nor did Sparkman bring any claims
regarding their due process complaint arising from the first administrative hearing.
Following the second hearing, the hearing officer decided in DHS's favor, upholding
DHS's decision to terminate funding for Sparkman. As before, Sparkman appealed
to the Pulaski County Circuit Court, this time alleging that there were ex parte
communications between DHS and the hearing officer which violated Sparkman's due
process rights under the Fourteenth Amendment. The state circuit court upheld the
decision of the hearing officer, finding that the use of a private attorney as a substitute
ALJ in the second administrative hearing did not deprive Sparkman of due process.
Sparkman appealed to the Arkansas Court of Appeals. The state appellate court
affirmed. It held that the second hearing procedure did not violate Sparkman's due
process rights. See Sparkman Learning Ctr., Inc. v. Ark. Dep't of Human Servs., No.
CA 11–792, 2012 WL 723330, at *3–4 (Ark. Ct. App. March 7, 2012). Sparkman did
not appeal to the Arkansas Supreme Court.

       With the state court proceedings ended, at Sparkman's request, the Western
District of Arkansas reopened the federal case originally filed in 2006 but stayed in
2007. Initially, Sparkman filed a motion for a preliminary injunction. The district
court denied relief after concluding that Sparkman lacked a reasonable probability of
prevailing on the merits. In doing so the court noted: that (1) "the state courts of
appeal properly exercised jurisdiction over Sparkman's due process claim"; (2) both
the federal and state suits "allege that Sparkman was deprived of due process"; (3)
both suits involve the same two parties; (4) "Sparkman appears to have fully
contested the claims that they chose to pursue in the administrative proceeding,
including their due process claims"; and (5) the state courts "fully addressed
[Sparkman's] arguments on appeal and found no reason for reversal on due process
grounds." The district court's analysis concluded that Arkansas claim preclusion law
barred Sparkman's due process claim. The court made the same conclusion for
Sparkman's equal protection claim because Sparkman failed to bring the claim in the
state court proceeding, noting that "[u]nder Arkansas law, claim preclusion applies

                                           -4-
not only to claims that were actually litigated, but also to claims that could have been
litigated." (Citing Beebe v. Fountain Lake Sch. Dist., 231 S.W.3d 628, 635 (Ark
2006)). A few months later, the district court granted DHS's motion to dismiss,
concluding that claim preclusion barred Sparkman from bringing their constitutional
claims. Sparkman moved to alter or amend the dismissal order,3 but the district court
denied the motion. The court determined that Sparkman made no showing of a
manifest error of law or fact and no showing that a manifest injustice to Sparkman
would occur. Sparkman appeals raising three issues: (1) the district court's denial of
their preliminary injunction, (2) the district court's grant of DHS's motion to dismiss,
and (3) the district court's denial of their Rule 52 and Rule 59 motions.

                                        II. Discussion
                  A. Denial of the Motion for a Preliminary Injunction
                          and Granting of the Motion to Dismiss
       "We review the denial of preliminary injunctive relief for an abuse of
discretion." Child Evangelism Fellowship of Minn. v. Minneapolis Special Sch. Dist.
No. 1, 690 F.3d 996, 1000 (8th Cir. 2012) (citation omitted). A district court abuses
its discretion if it "base[s] its decision on an erroneous legal premise. We review the
district court's legal conclusions de novo." Id. (citing FTC v. Freeman Hosp., 69 F.3d
260, 267 (8th Cir. 1995); Grand River Enters. Six Nations, Ltd. v. Beebe, 467 F.3d
698, 701 (8th Cir. 2006)). Additionally, "[w]e review a district court's grant of a
motion to dismiss for failure to state a claim de novo, taking all facts alleged in the



      3
       Sparkman originally filed "Plaintiffs' Motion for Additional Findings of Fact
and Conclusions of Law" and "Plaintiffs' Motion for a New Trial" pursuant to Rules
52 and 59 of the Federal Rules of Civil Procedure, respectively. The district court
correctly reframed these motions as a motion to alter or amend a judgment under Rule
59(e) and appropriately ruled on the motions pursuant to that understanding. On
appeal, Sparkman does not contest the district court's treatment of their filings as
motions to alter or amend a judgment.

                                          -5-
complaint as true." Gilmore v. Cnty. of Douglas, State of Neb., 406 F.3d 935, 937 (8th
Cir. 2005) (citation omitted).

        District courts must consider the following factors when considering
preliminary injunctions: "(1) the threat of irreparable harm to the movant; (2) the state
of the balance between this harm and the injury that granting the injunction will
inflict on other parties litigant; (3) the probability that movant will succeed on the
merits; and (4) the public interest." Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d
109, 113 (8th Cir. 1981) (en banc). Sparkman argues on appeal that the district court
erred in concluding that Sparkman failed to show a probability that they would
succeed on the merits.

       Because the district court denied Sparkman's motion for a preliminary
injunction and granted DHS's motion to dismiss using the same legal reasoning and
case law, we address the issues together. We review both issues de novo.

                                    1. Due Process
       Federal courts are required to respect the decisions of state courts. According
to 28 U.S.C. § 1738, "[t]he records and judicial proceedings of any court of any . . .
State . . . shall have the same full faith and credit in every court within the United
States and its Territories and Possessions as they have by law or usage in the courts
of such State." Id. Therefore, federal courts are limited to the extent we cannot give
review to claims that have already been fully adjudicated in state court. If a state court
would not hear the case because it was precluded by a previous holding in that state's
courts, the federal courts must "give the same preclusive effect to state court
judgments that those judgments would be given in the courts of the State from which
the judgments emerged." Kremer v. Chem. Constr. Corp., 456 U.S. 461, 466 (1982)
(footnote omitted). Federal courts do not provide a forum to relitigate claims
previously decided adversely in state courts.



                                           -6-
      Our decision in Knutson v. City of Fargo controls. 600 F.3d 992 (8th Cir.
2012). In Knutson, we held that litigants could not bring claims before a federal court
that were already fully decided by state courts in what would amount to appellate
review of the state court ruling. See id. at 995–96 (citing Kremer, 456 U.S. at 466;
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005)).

      Under 28 U.S.C. § 1738, we apply a state's law to decide whether claims
previously decided in that state's courts, which are then brought in federal court, are
precluded by the prior state court judgment. Arkansas law bars relitigation under
claim preclusion when:

      (1) the first suit resulted in a final judgment on the merits; (2) the first
      suit was based on proper jurisdiction; (3) the first suit was fully
      contested in good faith; (4) both suits involve the same claim or cause
      of action; and (5) both suits involve the same parties or their privies.

Baptist Health v. Murphy, 373 S.W.3d 269, 278 (Ark. 2010) (citing Fountain Lake
Sch. Dist., 231 S.W.3d at 635).

       As to the first element, the Arkansas Court of Appeals issued a final judgment
which decided the sole due process issue before the state court. See Sparkman, 2012
WL 723330, at *1–4. Both parties agree that when Sparkman chose not to appeal to
the Arkansas Supreme Court, the final decision of the Court of Appeals became the
final state court resolution of the case. The second element is not in dispute. Neither
party contests, nor do we find, that the courts of Arkansas exercised their jurisdiction
improperly. The Pulaski County Circuit Court had jurisdiction to hear the appeal from
the second administrative hearing pursuant to § 25-15-212(b)(1)(B) of the Arkansas
Code. From there, it is well settled that the Arkansas Court of Appeals has
jurisdiction to review final judgments from the Pulaski County Circuit Court. See
Ark. Sup. Ct. R. 1–2. We also find the third element is easily satisfied as well because


                                          -7-
the state court action was contested by the parties in good faith and the state courts
well considered the matter. See Nat'l Bank of Commerce v. Dow Chem. Co., 1 S.W.3d
443, 448 (Ark. 1999) (considering the thoroughness of review by the courts as an
indication that the case was contested in good faith).

      Under the fourth element, "we must be able to determine the specific claims
that were presented in both the federal court action and the state court action."
Carmical v. City of Beebe, 871 S.W.2d 386, 388 (Ark. 1994) (citing Ward v. Davis,
765 S.W.2d 5 (Ark. 1989)). In the state action, Sparkman appealed from the second
administrative hearing alleging that their due process rights under the Fourteenth
Amendment of the United States Constitution were violated because there were ex
parte communications between the hearing officer and DHS. In the federal action,
Sparkman alleges this same due process complaint from the second hearing. Thus, the
fourth element is satisfied.

        As to the last element, "[p]rivity exists when two parties are so identified with
one another that they represent the same legal right." Crockett v. C.A.G. Invs., Inc.,
381 S.W.3d 793, 799 (Ark. 2011). The Arkansas Supreme Court has "never required
strict privity in the application of res judicata . . . ." Id. (citing Wells v. Heath, 602
S.W.2d 665 (Ark. 1980)); see also Collum v. Hervey, 3 S.W.2d 993 (Ark. 1928)
(finding privity between a husband and wife); Francis v. Francis, 31 S.W.3d 841
(Ark. 2000) (finding privity between a brother and sister); Hardie v. Estate of Davis,
848 S.W.2d 417 (Ark. 1993) (finding privity between a testator and his remote heirs);
Phelps v. Justiss Oil Co., 726 S.W.2d 662 (Ark. 1987) (finding privity between a
landlord and tenant); S. Farm Bureau Cas. Ins. Co. v. Jackson, 555 S.W.2d 4 (Ark.
1977) (finding privity between an insurer and its insured); Curry v. Hanna, 307
S.W.2d 77 (Ark. 1957) (finding privity between a bankrupt debtor and his trustee).

       Here, Sparkman Learning Center and DHS return as parties from the state court
to the federal court case; that said, Sparkman added Jesse Carter as a plaintiff, and

                                           -8-
added John Selig and Tonya Russell as defendants. Applying Arkansas law, we
conclude that Jesse Carter is in privity with Sparkman Learning Center as its
executive director, and John Selig and Tonya Russell are likewise in privity with
DHS and the Division, respectively. Therefore, the fifth element of claim preclusion
is satisfied even with the addition of new parties.

       Sparkman alleged the same due process violations in federal court that had
already been adjudicated by the Arkansas courts. Consequently, we find no error in
the district court's conclusion that Sparkman's due process claim is precluded.

                                 2. Equal Protection
       We again consider claim preclusion when addressing Sparkman's Fourteenth
Amendment equal protection claim. Arkansas claim preclusion not only applies to
claims that were litigated before a different court, but also to claims that could have
been litigated. Fountain Lake Sch. Dist., 231 S.W.3d at 635. Thus, the question we
face is whether Sparkman had the opportunity to bring their equal protection claim
in the state administrative and judicial proceedings.

       Sparkman argues that they did not have a "full and fair opportunity" to litigate
their equal protection claim in the second administrative hearing because the remand
back to the administrative level was narrow and only contemplated a rehearing of the
issues in the first administrative hearing. Further, Sparkman argues that discovery in
an administrative hearing lacks the rigor permitted under state and federal court rules.
This is true. Sparkman, however, does not dispute that they had opportunity to raise
the claim in the first instance in the administrative process and state appeal.4




      4
       If Sparkman had raised their equal protection claim at the first administrative
hearing, these issues would have been preserved for consideration at the second
administrative hearing and the subsequent state court appeal.

                                          -9-
       According to Arkansas law, Sparkman was required to raise their equal
protection claim at the administrative level in order to preserve it on appeal to the
state courts. Section 25-15-208 of the Arkansas Code states that "[o]pportunity shall
be afforded all parties to respond and present evidence and argument on all issues
involved." Under Arkansas law, litigants are barred from raising constitutional issues
before state courts that were not first raised at the administrative level. Hamilton v.
Jeffrey Stone Co., 641 S.W.2d 723, 725 (Ark. Ct. App. 1982); see also Ark. Health
Servs. Agency v. Desiderata, Inc., 958 S.W.2d 7, 8 (Ark. 1998) (finding that because
a party "did not raise its Equal Protection Clause argument until its appeal to the
circuit court . . . under the Hamilton rule, it is barred from arguing that issue now.");
Ark. Bd. of Exam'rs in Counseling v. Carlson, 976 S.W.2d 934, 941 (1998) (finding
that a party's "failure to raise the due-process arguments before the Board [at the
administrative hearing level] precludes its consideration by this court on appeal.").
Based on the Hamilton rule, constitutional claims can be and must be raised at the
administrative level to preserve such claims for appeal before the state courts.
Sparkman's failure to do so is fatal for their equal protection claim and precludes both
state and federal courts from reviewing this claim.

       Sparkman also contends that the hearing officer at the second administrative
hearing was led to believe that an agreement existed between the parties to defer the
equal protection claim for the federal courts to decide. If such a "claim-splitting"
agreement between the parties did exist, it is unenforceable.5 It is well established that
claim-splitting is discouraged. All claims must be brought together, and cannot be
parsed out to be heard by different courts. Elgin v. Dep't of Treasury, 132 S. Ct. 2126,
2147 (2012) ("Plaintiffs generally must bring all claims arising out of a common set
of facts in a single lawsuit, and federal district courts have discretion to enforce that


      5
       We deny DHS's motion to supplement the record to address this point. As we
explain, whether a claim-splitting agreement existed between the parties would not
have any effect on our decision.

                                          -10-
requirement as necessary to avoid duplicative litigation." (quotation and citations
omitted)).

       Sparkman's failure to bring their equal protection claim at the administrative
level is fatal to their attempt to litigate the claim before the federal courts. Applying
Arkansas law, Sparkman's claim for violation of equal protection is precluded
because it could have been brought before the state courts if initially raised in the
administrative process.

       B. Denial of the Post-Judgment Motions to Alter or Amend a Judgment
       Rule 59(e) of the Federal Rules of Civil Procedure provides a means for
"correcting manifest errors of law or fact or to present newly discovered evidence"
after a district court has handed down a judgment. United States v. Metro. St. Louis
Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006) (quotation and citations omitted). "'A
district court has broad discretion in determining whether to grant a motion to alter
or amend judgment, and this court will not reverse absent a clear abuse of discretion.'"
Christensen v. Qwest Pension Plan, 462 F.3d 913, 920 (8th Cir. 2006) (quoting
Global Network Techs., Inc. v. Reg'l Airport Auth., 122 F.3d 661, 665 (8th Cir.
1997)). According to Sparkman, they brought their post-judgment motions before the
district court to correct an important factual error and legal conclusion; namely, the
district court's belief that Sparkman waived their right to present evidence related to
the first administrative hearing when they agreed to participate in a second
administrative hearing.

       The district court, in its order denying relief, concluded that Sparkman had not
actually identified any manifest errors of law or fact or provided new evidence. On
appeal, Sparkman has not shown the required errors and we conclude that the district
court's denial of post-judgment relief was not an abuse of discretion.




                                          -11-
                            III. Conclusion
For the reasons stated herein, we affirm.
                ______________________________




                            -12-
