Tri-Cities Holdings LLC v. Tennessee Health Services and Development Agency
MEMORANDUM OPINION AND ORDER: For the reasons set forth herein, the motions for summary judgment filed by Johnson City and the State Defendants, [Docs. 215, 218] will be GRANTED and plaintiffs' motion for summary judgment, [Doc. 212], will be DENIED and plaintiffs' second amended complaint will be DISMISSED WITH PREJUDICE. A separate judgment will enter. See Memorandum Opinion and Order for details. Signed by District Judge J Ronnie Greer on 8/25/2017. (JCK)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
TRI-CITIES HOLDINGS LLC, JANE DOE
NOS. 1-2, and JOHN DOE NOS. 1-6,
TENNESSEE HEALTH SERVICES AND
DEVELOPMENT AGENCY; CITY OF JOHNSON
CITY, TENNESSEE; JOHNSON CITY BOARD OF
COMMISSIONERS; JOHNSON CITY BOARD OF
ZONING APPEALS; MELANIE M. HILL, in her
official capacity as Executive Director of the Tennessee
Health Services & Development Agency; and KEITH
GAITHER, ELISHA HODGE, LISA JORDAN,
D. LYNN JOHNSON, JAMES L. WRIGHT,
CHARLOTTE C. BURNS, CLAUDIA H. BYRD,
ROBERT S. DOOLITTLE, MARK D. FLORA, M.D.,
BARRETT G. HAIK, MD, FACS, and THOM MILLS,
in their official capacities as members of the Board of the
Tennessee Health Services & Development Agency,
) No. 2:13-CV-305
MEMORANDUM OPINION AND ORDER
Pending before the Court are three motions: (1) Plaintiffs’ motion for partial summary
judgment, [Doc. 212]; responses, [Docs. 228, 231]; amended motion for summary judgment
(withdrawing requests for relief)1, [Doc. 233]; replies, [Docs. 236, 237]; (2) Defendant Johnson
City’s2 motion for summary judgment, [Doc. 215]; response, [Doc. 222]; reply, [Doc. 239]; and
(3) the motion of the State Defendants3 for summary judgment on Counts 8, 10, and 124 of
Plaintiffs had moved alternatively that the Court grant summary judgment on a number of “discrete issues” set
forth in paragraphs 10-35 of their motion, [Doc. 212], but have now withdrawn their request for partial summary
judgment on those issues.
The City of Johnson City, Johnson City Board of Commissioners, and the Johnson City Board of Zoning Appeals
will be referred to collectively as Johnson City.
The Tennessee Health Services and Development Agency, (hereinafter referred to as “HSDA”) Melanie M. Hill,
in her official capacity as Executive Director of the Tennessee Health Services & Development Agency; and Keith
plaintiffs’ second amended complaint, [Doc. 218]; response, [Doc. 223]; reply, [Doc. 240]. For
the reasons which follow, plaintiffs’ motion for summary judgment will be DENIED, Johnson
City’s motion for summary judgment will be GRANTED, the State Defendants’ motion for
summary judgment will be GRANTED, and plaintiffs’ complaint will be DISMISSED.
The suit before the Court, No. 2:13-CV-305, is the second of three lawsuits filed by Tri-
Cities Holding, LLC (“TCH”) and various Jane and John Does (the “individual defendants”)
(referred to collectively as “plaintiffs”) related to TCH’s efforts to open an opioid treatment
program (OTP) in Johnson City, Tennessee. In its first complaint, in case No. 2:13-CV-108, filed
April 19, 2013 (TCH I), TCH, a Georgia limited liability company which proposed to establish an
out-patient methadone maintenance treatment service, or OTP, in Johnson City, Tennessee, and
eight prospective patients of TCH, Jane Does 1-2 and John Does 1-6, sued Johnson City seeking
declaratory and injunctive relief under § 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 793
(the “Rehabilitation Act”) and the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq.
(“ADA”). More specifically, the plaintiffs alleged that Johnson City’s zoning ordinance relating
to methadone clinics was facially invalid and that Johnson City’s actions in denying TCH
occupancy and operation permits to operate TCH’s proposed OTP were in violation of the
Rehabilitation Act and the ADA.
Plaintiffs sought a preliminary injunction, but the Court
subsequently ordered plaintiffs to show cause why the request for injunction was “not premature
inasmuch as the plaintiff, Tri-Cities Holdings, LLC, has no Certificate of Need from the
Gaither, Elisha Hodge, Lisa Jordan, D. Lynn Johnson, James I. Wright, Charlotte C. Burns, Claudia H. Byrd, Robert
S. Doolittle, Mark D. Flora, J.D., Barrett G. Haik, M.D., FACS, and Thom Mills, in their official capacities as
members of the Board of the Tennessee Health Services & Development Agency will be referred to collectively as
the “State Defendants.”
Counts 7, 9 and 11 of the second amended complaint make claims against the State Defendants under the
Rehabilitation Act. These claims were previously dismissed by the Court. [See Doc. 163 (dismissing claims against
the State defendants under the Rehabilitation Act)]. Counts 8, 10 and 12 make claims against the State Defendants
under the ADA.
Tennessee Health Services and Development Agency or license from the Tennessee Department
of Health.” [Doc. 10, No. 2:13-CV-108]. On June 12, 2013, the Court held that plaintiffs’ claims
were not ripe for disposition and dismissed the case without prejudice.
The plaintiffs did not appeal the Court’s judgment in TCH I, and it has now become final.
Instead, they filed the instant action on July 8, 2013, in the United States District Court for the
Middle District of Tennessee (TCH II).
On November 13, 2013, the case was
transferred from the Middle District to this Court. [Doc. 95]. Plaintiffs have once again sued
Johnson City, and have added the State Defendants,5 again claiming violation of the
Rehabilitation Act and the ADA. On April 10, 2014, this Court granted in part and denied in part
HSDA’s motion to dismiss and dismissed plaintiffs’ claims under the Rehabilitation Act and their
state law claims.6 [Doc. 163]. Also on April 10, 2014, the Court granted the motion of Johnson
City to stay the case and denied plaintiffs’ motion for summary judgment and for a preliminary
injunction without prejudice to their renewal after the lifting of the stay, [Doc. 164]. Plaintiffs
appealed the Court’s orders to the Sixth Circuit Court of Appeals, [Doc. 166]. The Sixth Circuit
affirmed the denial of the preliminary injunction and dismissed the appeal of the denial of
summary judgment and dismissal of the state law claims for lack of jurisdiction, [Doc. 172].
Plaintiffs were ordered to file periodic status reports with the Court on the status of the
administrative appeal of the denial of their Certificate of Need (“CON”) application by HSDA.
[Docs. 175, 181, 184-190, 198, 199]. On August 22, 2016, TCH moved to lift the stay, [Doc.
193], and the Court granted the motion on October 21, 2016, [Doc. 205]. The motions currently
pending before the Court were then filed.
HSDA’s executive director and members were added as party defendants in an amended complaint filed on
November 26, 2013, [Doc. 113]. A second amended complaint was filed on December 11, 2013, [Doc. 136], and that
complaint supersedes the first two and is the operative complaint in this case.
The Court declined to exercise supplemental jurisdiction over plaintiffs’ state law claims and dismissed those
claims without prejudice.
The third lawsuit, No. 2:14-CV-233, was filed by TCH on May 19, 2014, and alleges
violations of the Rehabilitation Act and the ADA by the state administrative law judge assigned to
the appeal of HSDA’s denial of TCH’s CON, the Tennessee Department of State and its
Secretary, and the Tennessee Department of Mental Health & Substance Abuse Services and its
Commissioner. The Johnson City defendants are not parties to that suit. The third lawsuit was
dismissed by the Court on May 31, 2017.7 The appeal of the dismissal is pending in the Sixth
II. Standard of Review
Summary judgment is proper where the pleadings, the discovery and disclosure materials
on file, and any affidavits show there is no genuine issue of material fact and that the movant is
entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). In ruling on a motion for
summary judgment, the Court must view the facts contained in the record and all inferences that
can be drawn from those facts in the light most favorable to the non-moving party. Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Nat’l Satellite Sports, Inc. v.
Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence, judge the
credibility of witnesses, or determine the truth of any matter in dispute. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of demonstrating that no genuine issue of
material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To refute such a
showing, the non-moving party must present some significant, probative evidence indicating the
necessity of a trial for resolving a material factual dispute. Id. at 322.
A mere scintilla of
evidence is not enough. Anderson, 477 U.S. at 252; McClain v. Ontario, Ltd., 244 F.3d 797, 800
See No. 2:14-CV-233, [Docs. 86, 88].
United States Court of Appeals for the Sixth Circuit, No. 17-5628.
(6th Cir. 2000). This Court’s role is limited to determining whether the case contains sufficient
evidence from which a jury could reasonably find for the non-moving party. Anderson, 477 U.S.
at 248-49; Nat’l Satellite Sports, 253 F.3d at 907. If the non-moving party fails to make a
sufficient showing on an essential element of its case with respect to which it has the burden of
proof, the moving party is entitled to summary judgment.
Celotex, 477 U.S. at 323. If this
Court concludes that a fair-minded jury could not return a verdict in favor of the non-moving
party based on the evidence presented, it may enter a summary judgment. Anderson, 477 U.S. at
251-52; Lansing Dairy, Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir. 1994).
The party opposing a Rule 56 motion may not simply rest on the mere allegations or
denials contained in the party’s pleadings. Anderson, 477 U.S. at 256. Instead, an opposing
party must affirmatively present competent evidence sufficient to establish a genuine issue of
material fact necessitating the trial of that issue. Id. Merely alleging that a factual dispute exists
cannot defeat a properly supported motion for summary judgment. Id. A genuine issue for trial
is not established by evidence that is merely colorable, or by factual disputes that are irrelevant
or unnecessary. Id. at 248-52.
Plaintiffs have moved for summary judgment on Counts 1 through 6 of the second
amended complaint, all of which make claims against the Johnson City defendants. The Johnson
City defendants have responded and moved for summary judgment on the same basis upon
which they have responded to the plaintiffs’ motion. Plaintiffs then respond to the motion of the
Johnson City defendants on the same basis raised in their motion. The same is true for the State
Defendants. Plaintiffs move for summary judgment as to Counts 8, 10 and 12 of the second
amended complaint, all of which allege illegal discrimination by the State Defendants, i.e.,
HSDA’s illegal discrimination against plaintiffs in violation of the ADA (Counts 8 and 10), and
HSDA’s failure to provide plaintiffs with a reasonable accommodation in violation of the ADA
(Count 12). Plaintiffs have submitted the declaration of Steve Kester, [Doc. 46], Dr. David
Lentz, [Doc. 49], Dr. Robert J. Newman, [Doc. 47], Jane Does 1-2, [Docs. 48-50], and John
Does 1-6, [Docs. 42-56]. The State defendants likewise have responded to plaintiffs’ motion and
filed a cross-motion for summary judgment. The Court will, for the sake of clarity, consider the
issues as they relate to the Johnson City defendants first and then will consider the claims which
relate to the State Defendants.
Claims Against Johnson City
Johnson City responds to plaintiffs’ motion for partial summary judgment by invoking
the doctrines of ripeness, issue preclusion, standing and/or mootness as a bar to plaintiffs’
claims, and, in turn, seeks summary judgment on the same grounds. Plaintiffs address the issue
of ripeness in one paragraph of their 25-page opening memorandum in support of their motion,
[Doc. 213], one paragraph in their 30-page reply brief, [Doc. 236], and in four pages of their 30page response to Johnson City’s motion for summary judgment, [Doc. 222]. Johnson City argues
that all of plaintiffs’ claims against Johnson City are barred by ripeness/issue preclusion and,
because this issue is completely dispositive of plaintiffs’ claims, the Court will address it first.
In the prior action, TCH I, the Court dismissed the complaint without prejudice because
the “ʻissues [were] not ripe for disposition’” since TCH “had not obtained, and might never
obtain, the [required] CON and license from the State of Tennessee.” [See Doc. 163 at 2, No.
This Court previously stayed this case and denied plaintiffs’ motion for a
preliminary injunction, stating in its April 10, 2014 memorandum that:
This is the second suit on the same claims filed by plaintiffs
against the City of Johnson City, Johnson City Board of
Commissioners, and the Johnson City Board of Zoning Appeals
(the “Johnson City defendants”). The instant suit also adds as a
party defendant the Tennessee Health Services and Development
Agency (“HSDA”), and the Executive Director and members of the
Board of HSDA. The first suit was filed in this Court on April 19,
2013 (No. 2:13-CV-108). After a hearing on plaintiffs’ motion for
a preliminary injunction, the Court dismissed the complaint because
the “issues [were] not ripe for disposition,” [Doc. 45, No. 2:13-CV108], for reason that Tri-Cities Holdings, LLC (“TCH”), had not
obtained, and might never obtain, the required Certificate of Need
(“CON”) or license from the State of Tennessee.
Plaintiffs’ complaint was dismissed without prejudice and
the Court provided that plaintiffs would be permitted to reopen the
case by motion upon a showing of ripeness rather than requiring the
filing of a new complaint. [Id. at 10, fn. 7]. Judgment was entered
by the Clerk on June 12, 2013, [Doc. 46, No. 2:13-CV-108], and
the judgment became final thirty (30) days after the date of filing of
the judgment since no notice of appeal was filed. See Fed. R. App.
P. 4. No motion has ever been filed to reopen the case upon a
showing of ripeness. Instead, plaintiffs filed the instant action in the
Middle District of Tennessee on July 8, 2013. The Johnson City
defendants filed a motion for change of venue and the Court
ultimately transferred the case to this district. The case was opened
here on November 14, 2013.
The Johnson City defendants moved to dismiss on the bases
of issue preclusion and lack of ripeness, [Doc. 87]. Because the
issue of ripeness has been previously litigated adversely to
plaintiffs and because they did not appeal the prior judgment, the
Johnson City defendants argue that the doctrine of issue preclusion
bars the plaintiffs from relitigating that issue in this Court (or from
seeking a different answer from a different federal court). Plaintiffs
respond that the Court’s prior judgment was without prejudice, does
not operate as an adjudication on the merits, and thus does not have
any res judicata effect. Plaintiffs argue that a plaintiff always has
the right to refile a complaint dismissed without prejudice.
The Johnson City defendants subsequently moved for a stay
of these proceedings “until there is a resolution of whether TriCities Holdings is entitled to a Certificate of Need and a license,”
[Doc. 98], asserting that a stay is more appropriate than another
dismissal without prejudice at this point to avoid the possibility that
plaintiffs will simply refile their complaint in some other federal
judicial district. Plaintiffs respond, arguing that the case is ripe for
adjudication and that the administrative appeal of the denial of their
CON application is irrelevant to their ADA claims. In essence,
plaintiffs argue that the Court’s prior determination that plaintiffs’
claims against the Johnson City defendants are not ripe for
determination until TCH has obtained the required CON and
license from the State of Tennessee is erroneous. Although the
Magistrate Judge previously ordered a stay of discovery, the
pending motion to stay the case was deferred by the Magistrate
Judge to this Court.
Res judicata, i.e., the preclusive effect given a judgment,
consists of two conceptually different doctrines--claim preclusion
and issue preclusion. Stryker v. National Union Fire Insurance Co.,
681 F.3d 819, 824 (6th Cir. 2012) (citing Taylor v. Sturgell, 553
U.S. 880, 892 (2008)). “Under the doctrine of claim preclusion, a
final judgment forecloses ‘successive litigation of the very same
claim, whether or not relitigation of the claim raises the very same
issue as the earlier suit.’” Id. (quoting New Hampshire v. Maine,
532 U.S. 742, 748 (2001)). “Issue preclusion, in contrast, bars
‘successive litigation of an issue of fact or law actually litigated and
resolved in a valid court determination essential to the prior
judgment,’ even if the issue recurs in the context of a different
claim.” Id. (quoting New Hampshire, 532 U.S. at 748-49).
In order for issue preclusion to apply to the prior ruling, the
party seeking estoppel must show:
(1) the precise issue raised in the present case must
have been raised and actually litigated in the prior
proceeding; (2) determination of the issue must have
been necessary to the outcome of the prior
proceeding; (3) the prior proceeding must have
resulted in a final judgment on the merits; and (4)
the party against whom estoppel is sought must have
had a full and fair opportunity to litigate the issue in
the prior proceeding.
Stryker, 601 F.3d at 825 (quoting Pfeil v. St. Bank & Trust Co., 671
F.3d 585, 601 (6th Cir. 2012) (internal quotation marks and citations
Plaintiffs argue only that the Court’s prior judgment was
without prejudice and therefore does not have any preclusive effect.
Plaintiffs’ argument, however, completely misses the point.
Plaintiffs are not barred from refiling their complaint, nor are they
precluded from ultimately pursuing any of their claims against the
Johnson City defendants. The Johnson City defendants argue only
that the issue of ripeness has been conclusively decided in the prior
litigation between plaintiffs and the Johnson City defendants and,
that issue having been conclusively decided, plaintiffs may not
proceed with their claims until they have shown that the claims are
ripe for adjudication. Upon examination of the relevant factors, the
Court agrees with the Johnson City defendants.
First, the precise issue now raised, i.e., ripeness, was
actually raised and actually litigated in the prior proceeding.
Plaintiffs’ argument that the issue was erroneously decided by the
Court in the prior proceeding is beside the point. Plaintiffs did not
seek reconsideration of the Court’s ruling nor did they appeal. The
Court entered judgment and the judgment became final and binding
on the plaintiffs. It has now been conclusively established that the
case is not ripe for determination and the Court lacks subject matter
jurisdiction until plaintiffs obtain the necessary CON and license.
The issue cannot be relitigated by plaintiffs in this or any other
action in federal court. To the extent plaintiffs believed the Court’s
ruling on the issue was incorrect, they should have appealed the
judgment. They did not. They instead chose to attempt to relitigate
the issue in the Middle District of Tennessee. Likewise, plaintiffs’
argument that they have discovered precedents which they did not
previously call to the Court’s attention are similarly unavailing.
Second, the determination of the ripeness issue was clearly
necessary to the outcome of the prior proceeding. Indeed, it was the
sole basis for the Court’s prior determination. Judgment was
entered on that very issue. The second requirement for issue
preclusion is met.
Third, the prior proceeding resulted in a judgment on the
merits, notwithstanding that none of the plaintiffs’ claims were
decided on the merits. Plaintiffs appear to argue that this
prerequisite has not been met because the Court’s dismissal of the
complaint was without prejudice. That is not the proper inquiry in
deciding whether issue preclusion applies to this proceeding. The
inquiry is whether the issue for which preclusion is sought was
decided and a judgment on the merits entered on that issue. See,
e.g., Sandy Lake Band of Mississippi Chippewa v. United States,
714 F.3d 1098 (8th Cir. 2013) (dismissal without prejudice for lack
of subject matter jurisdiction meets requirement because
“[a]lthough dismissal for lack of subject matter jurisdiction does
not adjudicate the merits of the claims asserted, it does adjudicate
the court’s jurisdiction.”) (citing Kulinski v. Medtronic BioMedicus, Inc., 112 F.3d 368, 373 (8th Cir. 1997) (holding that the
complaint’s dismissal without prejudice for lack of subject matter
jurisdiction would preclude plaintiff from bringing another claim on
the same jurisdictional basis)). In other words, plaintiffs may
reassert the claims in their first lawsuit against the Johnson City
defendants, but only after they establish that the claims are ripe for
adjudication, i.e., only after they obtain the required CON and
Finally, plaintiffs had a full and fair opportunity to litigate
the ripeness issue in the prior proceeding. On April 25, 2013, the
Court ordered plaintiffs to show cause why the proceeding was not
“premature inasmuch as the plaintiff, Tri-Cities Holding, LLC, has
no Certificate of Need from the Tennessee Health Services and
Development Agency or license from the Tennessee Department of
Health.” [Doc. 10, No. 2:13-CV-108]. Plaintiffs responded to the
order on May 1, 2013, in a 17 page brief which specifically
addressed whether “Plaintiffs’ claims are ripe for adjudication.”
[Doc. 14, No. 2:13-CV-108, at 3]. The Court heard oral argument
on May 10, 2013, after giving notice of a hearing on the issue of
whether the motion for preliminary injunction was premature. [See
Notice, No. 2:13-CV-108, May 6, 2013]. Indeed, plaintiffs make
absolutely no suggestion that they did not have a full and fair
opportunity to litigate the ripeness issue in the prior proceeding.
This Court has previously determined, in the prior litigation
between these parties, that plaintiffs’ claims against the Johnson
City defendants are not ripe for adjudication because they do not
have, and may never have, a CON or a license to operate their
proposed methadone clinic, even if the Court were to declare the
Johnson City Zoning Ordinance invalid. The Court’s prior
judgment on the issue of ripeness has become final. Plaintiff, TCH,
still does not have the required CON and license. Because the
prerequisites for issue preclusion on this issue are met, plaintiffs are
bound by the Court’s prior ruling on the issue. Defendants’ motion
to stay will, therefore, be GRANTED, [Doc. 98]. The Johnson City
defendants motion to dismiss, [Doc. 87], and plaintiffs’ motion to
lift stay on discovery and for decision on plaintiffs’ motions for a
preliminary injunction and for partial summary judgment, [Docs.
153, 154], will be DENIED. Plaintiffs’ motion for a preliminary
injunction, [Doc. 82], and plaintiffs’ motion for summary judgment,
[Doc. 127], are DENIED WITHOUT PREJUDICE and may be
renewed, if appropriate, once the stay in this case is lifted.
[Doc. 164 at 2-7].
As noted above, plaintiffs largely ignore the ripeness/issue preclusion problem they face.
They apparently believe the Court’s prior ruling was wrong and once again argue that challenges
to facially invalid laws or ordinances are “ripe by their very nature,” quoting Ecogen, LLC v.
Town of Italy, 438 F. Supp. 2d 149, 155 (W.D.N.Y. 2006) and citing MacDonald v. Safir, 206
F.3d 183, 189 (2d Cir. 2000). As Johnson City notes, however, that argument was rejected and
these cases distinguished by the Sixth Circuit in its order on plaintiffs’ interlocutory appeal of this
Court’s denial of a preliminary injunction.9 The Sixth Circuit sated:
(1) Likelihood of success on the merits. The district court did not
address the merits of Plaintiffs' discrimination claims, concluding
they were not ripe. Plaintiffs have not shown any error in that
Ripeness is a threshold determination. The district court
considered three factors in finding that Plaintiffs' claims were not
ripe: (1) the likelihood that the harm alleged will ever come to
pass; (2) the hardship resulting if judicial relief is denied at that
point; and (3) whether the factual record was sufficiently
developed to produce a fair adjudication of the merits. The court
found that none of these factors was satisfied.
Plaintiffs argue that facial challenges to invalid laws are
“always ripe by their very nature.” (Appellants' Brief at 28) They
cite Ecogen, LLC v. Town of Italy, 438 F.Supp.2d 149, 155
(W.D.N.Y.2006), and MacDonald v. Safir, 206 F.3d 183, 189 (2d
Cir.2000). These cases are factually distinguishable. In Ecogen, the
plaintiff alleged that a township's moratorium on construction of
wind turbines violated its substantive due process and equal
protection rights. Prior to the moratorium, plaintiff purchased
property and acquired easements for its planned wind facilities.
When the project was publicly announced, the town passed a sixmonth moratorium on wind turbines, stating it needed time to
consider and adopt a master zoning plan. The town repeatedly
renewed the moratorium but failed to adopt a master plan. Plaintiff
did not require any state or local permits to proceed with its
project, and the district court found the plaintiff's facial challenge
In addition, not only are the cases cited by plaintiffs factually distinguishable, those jurisdictions do not have a
requirement for a CON or comparable state approval. In other words, in the cases cited, the only thing standing in the
way of approval was the challenged ordinance. No other permit or approval was required.
to the moratorium ordinance was ripe. Tri–Cities is not in a
comparable position: it concedes it cannot open a methadone clinic
without a CON and a license from the state.
MacDonald v. Safir, 206 F.3d 183 (2d Cir.2000), involved
a First Amendment challenge to New York City's parade permit
regulations. The Second Circuit held that a facial challenge is
proper “... whenever a licensing law gives a government official or
agency substantial power to discriminate based on the content or
viewpoint of speech ...”. Id. at 189, citing City of Lakewood v.
Plain Dealer Publishing Co., 486 U.S. 750, 108 S.Ct. 2138, 100
L.Ed.2d 771 (1988). Plaintiffs' supplemental authorities are
similarly distinguishable, as they involve facial challenges to
zoning ordinances that infringe First Amendment rights of speech
and free expression. Plaintiffs are not raising First Amendment
claims. And they cite no authority suggesting that the ripeness
doctrine should be similarly relaxed or excused when an ordinance
or statute is challenged under the ADA or the Rehabilitation Act.
Plaintiffs also contend that their claims are ripe because
they face a “Catch 22” dilemma that requires immediate judicial
relief. They argue that they must show their compliance with local
laws in order to obtain a CON from HSDA. They also cite the
Johnson City zoning ordinance's requirement that Tri–Cities obtain
a CON in order to obtain a special exception approval under that
ordinance. This potential “Catch 22” was mentioned several times
during the Board of Zoning Appeals' hearing on Tri–Cities's
application. Mr. Neilson, Johnson City's Traffic Engineer,
summarized Tri-Cities's application at the start of the hearing, and
reviewed the requirements of Section 613.3.3 of the City's zoning
code governing methadone treatment clinics. Neilson stated that
one of the code's requirements is that the clinic be fully licensed
and certified by the state, and a CON obtained from HSDA, prior
to BZA approval. Mr. Neilson stated that if the Board chose to
grant the two waivers sought by Tri–Cities (permission to open at
5 a.m., and a location that was not an arterial street), the approval
“should be conditioned upon granting-that the State grants them
the certificate of need. Since they can't get their certificate of need
prior to BZA approval, it's kind of a catch–22, so you'll probably
see an amendment to that code in the future.” Mr. Neilson also
opined that the Board lacked legal authority to grant a variance or
exception to the conditions of the zoning ordinance regarding
hours of operation and arterial street location.
Mr. Herrin, counsel for Johnson City, also spoke at the
hearing. He opined that the Board did not have legal authority to
overrule the criteria adopted by the City Commission in the zoning
code. The City's position was that two of those criteria (arterial
street and hours of operation) were not satisfied. Mr. Herrin agreed
with Neilson that the Board should not consider the fact that Tri–
Cities did not have an approved CON, as that would amount to a
“Catch–22.” He urged the Board not to consider that issue in
reaching its decision regarding the other two criteria. At the close
of the hearing, a Board member made a formal motion to deny
Tri–Cities's request, stating that the “... hours of operation and the
location having access from an arterial street are not met. The way
that the board has acted on special exceptions ... in the past when a
special exception request comes before us, if it meets all the
conditions we have no choice but to approve that special
exception. This does not meet all those conditions and based on
that fact, I move that we deny the request.” The record before us
does not reasonably support an argument that the Board denied
Tri–Cities's zoning application because it lacked a CON.
Plaintiffs also contend that they faced this “Catch–22”
dilemma before HSDA, and suggest that HSDA denied a CON
because Tri–Cities lacked a zoning permit, and because of Johnson
City officials' opposition to their proposal. Plaintiffs cite the
opening remarks of Mr. Christoffersen, HSDA's general counsel, at
the HSDA hearing. Christoffersen reported that the federal district
court had essentially postponed a decision on Plaintiffs' lawsuit
challenging the Johnson City ordinance, and he urged the members
to set aside any consideration of local zoning. He specifically
recommended that the panel focus its discussions on the three main
criteria for issuing a CON: the demonstrated need for the facility;
the proposal's economic feasibility; and its contribution to the
orderly development of healthcare in Tennessee. Christofferson
told the panel: “I would recommend and urge that the decision not
be based on zoning itself today, because it hasn't been definitely
determined to be a roadblock, and, therefore, that the [other]
criteria be looked at rather than that.” At oral argument, Plaintiffs'
counsel dismissed these statements as “tongue in cheek”
subterfuge that should be interpreted as urging the panel to deny a
CON because of local opposition. We cannot agree with counsel's
characterization. Given the entirety of the hearing testimony and
the questions posed by the panel members, there is no reason to
suspect that the panel did not follow Mr. Christofferson's advice.
Plaintiffs' counsel also cited a statement by a “lobbyist” for
Johnson City, who appeared at the HSDA hearing and spoke in
opposition to Tri–Cities's application. This “lobbyist” (Mr. Taylor)
summarized the City's position that Tri–Cities had not established
a need for its proposed clinic. He cited the physician-to-patient
ratio for area physicians approved to dispense buprenorphine (an
alternative to methadone for treating opiate addiction), a ratio that
is apparently more favorable than in other more populous areas of
the state. He also critiqued Tri–Cities's economic model for its
clinic operations. Johnson City's mayor, who is a practicing oral
surgeon, also spoke. He described other addiction treatment
services currently available in Johnson City, and questioned Tri–
Cities's contention that it had shown a need for the clinic. Other
questions were raised at the hearing by other speakers and HSDA
members about operations at Tri–Cities's other methadone clinics,
the adequacy of proposed staffing levels, and the extent of
education that would be required for clinic staff. Also, prior to the
hearing, HSDA's staff had reviewed Tri–Cities's application and
concluded they could not support it “... because the majority of the
Criteria and Standards for the type of facility being proposed in the
application have not been met ...”. Plaintiffs concede that HSDA
has issued CON's for 12 other methadone clinics in Tennessee, so
this staff recommendation cannot simply be attributed to local
opposition or lack of zoning approval, much less bias against
opiate-addicted individuals. It is clear that HSDA was aware of
local opposition to Tri–Cities's proposal. But we cannot agree that
HSDA denied a CON because of that opposition, or because Tri–
Cities lacked a zoning variance. As the district court accurately
stated, Tenn Code Ann. § 68–11–1624 specifically states that local
support or opposition to a methadone maintenance clinic's CON
application is informational and advisory only, and is not a
prerequisite to obtaining a CON.
These facts strongly support a conclusion that Plaintiffs
cannot show a substantial likelihood of success on the merits of
their assertion that their claims are ripe. If Tri–Cities's state
administrative appeal is ultimately unsuccessful, it cannot open its
clinic. And until that appeals process is complete, the district court
cannot reasonably determine if Tri–Cities was denied a CON due
to some Catch 22 dilemma, or whether the denial was based on
issues having nothing to do with Johnson City's zoning ordinance
or disability discrimination. We are confident that the district court
can address the ramifications of any “Catch–22” dilemma that
might appear in the record when Plaintiffs can demonstrate that
their claims are ripe.
Tri-Cities Holdings, LLC v. Tennessee Health Services & Development Agency, 598 F. App’x
404, 408-11 (6th Cir. 2015).
Plaintiffs appear to be deliberately blind to this Court’s prior rulings in both their first
lawsuit, No. 2:13-CV-108 (TCH I), and the instant lawsuit, as well as the Sixth Circuit’s clear
holding in the interlocutory appeal in this very case.10 The only “new” argument put forth by
plaintiffs is that the continued “operation” of the zoning ordinance after June 11, 201311, the date
of the dismissal of TCH I, somehow avoids the effect of the Court’s prior rulings. They cite no
authority for this claim and, in fact, there is none. The simple fact is that the Court has held that
plaintiffs are barred by issue preclusion from now contesting the Court’s prior holding. Their
opportunity to do so was through an appeal of the TCH I judgment. Their failure to do so means
the Court’s holding, whether correct or erroneous, is now binding on them and is the law of this
case. TCH has not obtained a CON or license from the State of Tennessee and has now
voluntarily dismissed its administrative appeal of the denial of its application by the state agency.
TCH therefore does not have a ripe claim because it has not obtained, and cannot obtain, the
required CON and license.
Plaintiffs also appear to argue that Johnson City’s opposition to their application for a
CON at the state agency hearing creates a new cause of action after the June 12, 2013 dismissal
of TCH I.
More specifically, they argue that Johnson City “officially and
intentionally violated the ADA’s Olmstead
integration mandate,” [id. at 8], by “having the
mayor appear in his official capacity” before the HSDA hearing on TCH’s application for a CON
and hiring “a state-registered lobbyist to oppose TCH’s CON application and encourage HSDA
itself to violate the ADA Olmstead mandate by refusing TCH’s reasonable modification request
Johnson City argues that plaintiffs’ counsel, Mr. Dunlap, has not been candid with the Court “by arguing authority
that counsel knows has been explicitly rejected by the Sixth Circuit Court of Appeals in this very case.” [Doc. 228 at
3]. As a result, Johnson City suggests that “this Court could sanction plaintiffs’ counsel up to and including
revocation of his pro hac vice privileges.” The Court agrees that Mr. Dunlap has not been entirely candid with the
Court in this matter and this is not the first time. The Court, however, declines to impose any sanctions at this time.
TCH I was actually dismissed on June 12, 2013.
Olmstead v. L.C. ex rel Zimring, 527 U.S. 581 (1999).
and denying TCH’s CON application.” [Id.]. Without citation to any case authority, plaintiffs
claim that Johnson City “officially and intentionally lobbying against clinics serving the disabled
violates the Olmstead integration mandate.” [Id. at 9].
Johnson City responds that there are at least three reasons why this claim fails. First,
such a cause of action is not asserted in the second amended complaint; second, the Olmstead
mandate has no application to these facts; and third, plaintiffs are not entitled to summary
judgment on the claim “because Johnson City has a right under the Free Speech Clause to speak
on an issue of public concern . . .” [Doc. 228 at 6, citing Potters Medical Center v. City Hospital
Ass’n, 800 F.2d 568, 578 (6th Cir. 1986) (City hospital’s participation in the Certificate of Need
process and comments to state agency were protected speech under the Noerr-Pennington
Doctrine)]. Plaintiffs have filed a 25-page reply brief dedicated almost completely to argument
related to events that post-date the dismissal of TCH I. [Doc. 236]. In somewhat inflammatory
language, plaintiffs’ reply brief charges that “Johnson City treated this Court’s dismissal without
prejudice in TCH I on ripeness grounds as a ‘get-out-of-jail-free card’ to discriminate, violate the
ADA going forward, and allow it to deny TCH any and all necessary permits into the indefinite
future.” [Doc. 236 at 1]. Arguing that the damage from the zoning ordinance is “actual and
continuing,” plaintiffs assert that “even if this Court deems the ripeness decision to bar the
plaintiffs from forever challenging the facial validity of the zoning ordinance, it serves as
evidence for plaintiffs’ discrimination claims that arose after the date of filing of TCH I and as
alleged in plaintiffs’ complaint.” [Id. at 3, 9] (emphasis added). The plaintiffs characterize
Johnson City’s position as “perpetual immunity from the ADA.” [Id. at 10]. Plaintiffs point to
numerous paragraphs of their original complaint, [Doc. 136], which is not the operative
complaint in the case, as sufficient to state a “plausible claim for relief” for violation of Title II
of the ADA for acts occurring post-TCH I. [Id. at 11, 12].
The Court agrees with the Johnson City defendants. First, plaintiffs did not plead those
purported causes of action in their second amended complaint, despite their claims otherwise,
and have filed no amended complaint to allege such causes of action. Second, for reasons
discussed more fully below, the Olmstead case has no application to the facts alleged here.
Finally, Johnson City’s participation in the CON process is protected speech under clear Sixth
Claims Against State Defendants
The plaintiffs’ remaining claims against the State Defendants (Counts 8, 10, and 12) are
premised on theories of intentional13 violation of Title II of the ADA. First, plaintiffs claim that
Tennessee Code Annotated § 68-11-1607(c)(3) (2015) is “overtly discriminatory and therefore
facially invalid because it requires an OTP CON applicant to notify local officials in the
geographic area of the OTP’s CON application” (Count 8).
Second, plaintiffs claim that
HSDA’s denial of TCH’s CON constituted an intentional violation of the ADA (Count 10).
Plaintiffs now claim that they have made claims of “non-intentional ‘discriminatory effect’ or ‘discriminatory
impact’ claims in addition to claims of intentional violations of the ADA”, [Doc. 223 at 12], citing various paragraphs
of their operative complaint. A plaintiff, of course, may establish a violation of the ADA by showing either that
defendant was motivated by an intent to discriminate (intentional discrimination) or that the defendant’s otherwise
neutral action has an unnecessarily discriminatory effect (disparate impact). See generally, Raytheon Co. v.
Hernandez, 540 U.S. 44 (2003); Larkin v. Michigan, 89 F.3d 285, 289 (6th Cir. 1996). A review of the plaintiffs’
complaint, however, confirms that plaintiffs are making claims of intentional discrimination. See Count 8, ¶ 313
(“Because of HSDA’s intentional discriminatory reactions and behavior . . .”); Count 12, ¶ 330 (“Because of HSDA’s
intentional discriminatory reactions and behavior . . .)” Furthermore, Count 8 alleges that Tennessee Code Annotated
Section 61-11-1607(c)(3) is facially invalid. “[F]acially discriminatory actions are just a type of intentional
discrimination or disparate treatment, and should be treated as such.” Larkin, 89 F.3d at 289 (citing Bangerter v.
Orem City Corp., 46 F.3d 1491, 1500-01 (10th Cir. 1995)). Reasonable accommodation claims are likewise analyzed
under the framework for intentional discrimination. See Anderson v. City of Blue Ash, 798 F.3d 338 (6th Cir. 2015)
(analyzing reasonable-accommodation claim under McDonnell Douglas framework). To the extent plaintiffs seek to
allege disparate impact claims, those claims are, in any event, analyzed under the McDonnell Douglas framework and
fail for the same reasons as the claims for intentional discrimination, and establishing a prima facie case requires
plaintiffs to identify specific discriminatory practices. The only HSDA practices even arguably challenged are based
on facial validity of § 68-11-1607(c)(3) and failure to accommodate by granting the CON, both intentional acts.
Third, plaintiffs allege a violation of the ADA because “HSDA failed to make a reasonable
accommodation to allow TCH to obtain a CON and establish an OTP in Johnson City” (Count
12). Plaintiffs claim the notice provision of § 68-11-1607(c)(3), one not applicable to any other
medical service or healthcare facility, is intended by the State Defendants “to galvanize
widespread, well-organized opposition to confront any attempt to locate an OTP” and “gin up
[Doc. 213 at 2].
Plaintiffs claim they were denied a reasonable
accommodation by HSDA, which refused to modify rules “presently stopping the CON from
being issued.” [Id. at 3]. The State Defendants assert these claims are baseless.
Law Applicable to Claims of Intentional Discrimination
Claims of intentional discrimination brought pursuant to the ADA are analyzed under the
burden-shifting analysis established by McDonnell Douglas Corp. v. Green, 411 U.S. 792
(1973). Plaintiffs must first establish a prima facie case of discrimination. Id. at 802. They
must show that (1) they have a disability; (2) they are otherwise qualified; and (3) they have been
excluded from participation in, denied the benefits of, or subjected to discrimination under the
program because of their disability. Anderson v. City of Blue Ash, 798 F.3d 338, 357 (6th Cir.
2015) (citing Tucker v. Tennessee, 539 F.3d 526, 532 (6th Cir. 2008)). “In other words, the
plaintiff must show that the defendant took action because of the plaintiff’s disability; i.e., the
‘[p]laintiff must present evidence that animus against the protected group was a significant factor
in the position taken by the . . . decision-makers themselves or by those to whom the decisionmakers were knowingly responsive.’”
Furthermore, the plaintiff must show that “the
discrimination was intentionally directed toward him or her in particular.” Tucker, 539 F.3d at
532 (emphasis in original).
Discriminatory intent may be inferred from the totality of circumstances and a number of
sources, including the historical background of the decision, the specific sequence of events
leading up to the challenged decision, departures from the normal procedural sequence, and the
legislative history and contemporary statements by members of the decisionmaking body.
Village of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 261 (1977). The courts
pay particular attention to legislative or administrative history, “especially where there are
contemporary statements by members of the decisionmaking body, minutes of meetings, or
reports.” Id. at 268.
Once a plaintiff establishes a prima facie case of discrimination, the defendant “must then
offer a legitimate, nondiscriminatory reason” for its challenged action. Sjostrand v. Ohio State
University, 750 F.3d 596, 599 (6th Cir. 2014). In other words, the defendant must produce
evidence that it would have made the same decision even if it had not been motivated by an
unlawful purpose. Smith & Lee Assoc. v. City of Taylor, 102 F.3d 781, 791 (6th Cir. 1996). This
burden is merely one of production, not persuasion. Sjostrand, 750 F.3d at 599. Proof that the
decision was motivated in part by a discriminatory purpose will not necessarily require
invalidation of the challenged legislative action. Smith & Lee, 102 F.3d at 791. Rather, if the
defendant meets its burden of showing that it would have made the same decision even if not
motivated by an unlawful purpose, then the plaintiff must introduce evidence showing that the
proffered reason is pretextural. See Hedrick v. W. Reserve Care Sys., 355 F.3d 444, 453 (6th Cir.
2004). This evidence must be sufficient to allow a jury to find that the defendant’s explanation is
a pretext for unlawful discrimination; the plaintiff retains the ultimate burden of persuasion at all
times. See Id.14
This statement of the law applicable to intentional discrimination claims is taken largely from the memorandum of
the State Defendants filed in this case. State Defendants correctly state the applicable standard and plaintiffs do not
Tennessee Code Annotated § 68-11-1607(c)(3)
The “Tennessee Health Services and Planning Act of 2002,” codified at Tennessee Code
Annotated § 68-11-1601, et seq., requires “any person,”15 before establishing or modifying “a
health care institution, facility, or covered health service, at a designated location” to obtain a
CON, i.e., “a permit granted by the” HSDA. Tenn. Code Ann. § 68-11-1602(2). “Health care
institution” includes a “nonresidential substitution-based treatment center for opiate addiction,”
including stand-alone clinics offering methadone, products containing buprenorphine such as
Subutex and Suboxone, or products containing any other formulation designed to treat opiate
addiction by preventing symptoms of withdrawal.” Tenn. Code Ann. § 68-11-1602(7)(a), (13).
The Health Services and Planning Act declares it “to be the public policy of [the State of
Tennessee] that the establishment and modification of health care institutions, facilities and
services shall be accomplished in a manner that is orderly, economical and consistent with the
effective development of necessary and adequate means of providing for the health care of the
people of Tennessee.” Tenn. Code Ann. § 68-11-1603. The Act created the HSDA to have
“jurisdiction and powers relating to the certification of need” and is composed of eleven (11)
members, including various designated state officials, and members appointed by the speaker of
the House of Representatives, the speaker of the Senate, and the governor. Tenn. Code Ann. §
68-11-1604. The HSDA has the duty to “[r]eceive and consider applications for certificates of
need . . . and to grant or deny certificates of need on the basis of the merits of such applications
within the context of local, regional and state health needs and plans.” Tenn. Code Ann. § 6811-1605.
“Person” includes various kinds of business organizations, including LLCs. Tenn. Code Ann. § 68-11-1602(15).
Applications for a CON must be “published in a newspaper of general circulation in the
proposed service area of the project.” Tenn. Code Ann. § 68-11-1607(c)(1). For applications for
a CON for a nonresidential substitution-based treatment center for opiate addiction, the applicant
is required to also send notice of the application by certified mail, return receipt requested, to the
county mayor of the county where the proposed facility will be located, the house and senate
members representing that county in the Tennessee General Assembly, and the mayor of the
municipality where the facility is located, if located within the corporate boundaries of a
municipality, “informing such officials that an application for a nonresidential methadone
treatment facility has been filed with the agency.” Tenn. Code Ann. 68-11-1607(c)(3).
The Court will address each of the remaining counts of the second amended complaint in
the context of the case law applicable to claims of intentional discrimination brought under the
ADA below. The Court will address each of Counts 8, 10 and 12 in turn.
Count 8-Facial Invalidity of Tennessee Code Annotated § 6811-1607(c)(3)16 under Title II of the ADA.
Plaintiffs’ second amended complaint alleges that the “Tennessee Legislature has enacted
the overtly discriminatory—and therefore facially invalid—Tennessee Code Annotated § 68-111607(c)(3) which requires an OTP Certificate of Need applicant to go through cumbersome
Tennessee Code Annotated § 68-11-1607(c)(3) has been renumbered as § 68-11-1607(c)(9)(A). For ease of
reference, however, the Court will continue to refer to the section as (c)(3). Tennessee Code Annotated § 68-111607(c)(3) has also been amended by making it applicable to all non-residential substitution-based treatment centers,
not just methadone treatment facilities. At the same time, § 68-11-1624 was amended and its provisions made
applicable to all certificate of need applications, not just those for “non-residential substitution-based centers for
opiate addiction.” Acts 2015, ch. 505. Plaintiffs argue, as noted above, that “the Tennessee legislature tacitly
acknowledged the statute’s illegality by amending it May 20, 2015.” Plaintiffs’ argument consists totally of this one
line. No further argument is offered and plaintiffs’ make no effort to develop it. The argument is therefore waived.
“[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are
deemed waived.” United States v. Elder, 90 F.3d 1110, 1118 (6th Cir. 1996). “It is not sufficient for a party to
mention a possible argument in the most skeletal way, leaving the court to put flesh on its bones.” McPherson v.
Kelsey, 125 F.3d 989, 995-96 (6th Cir. 1997).
requirements to provide notice to local politicians of a OTP’s CON application, requirements not
imposed on any similar medical facility.” [Doc. 136 at ¶ 187]. The statute, plaintiffs allege,
“encourages widespread, well-organized opposition to confront any attempt to locate an OTP”,
[id. at ¶ 188], and no other medical service is “required to notify opposition in this way.” [Id. at
¶ 189]. These are the only allegations of plaintiffs 72-page complaint to support Count 8.
Plaintiffs simply repeat these same allegations almost verbatim in their brief in support of their
motion for summary judgment, except that they state that the notice requirement is “presumably
intended to encourage widespread, well-organized opposition to locating an OTP anywhere in
the state.” [Doc. 213 at 27] (emphasis added). In sum, plaintiffs contend § 68-11-1607(c)(3) is
facially invalid under the ADA because it imposes a requirement on OTP CON applicants that
are not applicable to other health care facilities.
The state defendants respond that the notice statute is not overtly discriminatory on its
face because the Legislature has also provided that the purpose of the notice is to allow those
officials to express “support or opposition17 to the granting of a Certificate of Need to the
applicant,” the same opportunity that is afforded with respect to any CON application, that “the
testimony of such officials shall be informational and advisory” only, and that the support of
local officials “shall not be a requirement for the granting of a “CON.” Tenn. Code Ann. § 6811-1624.
Plaintiffs respond that the reliance of the State Defendants on the legislature’s “support or
opposition” language “is logically flawed and has already been rejected by federal courts
nationwide.” [Doc. 223 at 5]. Plaintiffs make three specific arguments with respect to the
Plaintiffs refer to this as a “for and against” argument, stating that “[f]ederal courts reject . . . this argument out of
hand.” Plaintiffs cite cases from two district courts (Maryland and the Eastern District of New York) in support. The
cases, however, are easily distinguished in that they dealt with requirements for much broader neighborhood
notification. In any event, those cases from districts outside the Sixth Circuit have no precedential sway on this
arguments of the state defendants: (1) “the Tennessee legislature tacitly acknowledged the
statute’s illegality by amending it May 20, 2015,” (2) federal courts reject the State Defendants’
“for and against” argument out of hand, and (3) the State defendants’ “support or opposition”
argument violates the ADA’s Olmstead mandate. [Id. at 5-6].
These statutes do not impose any burden on an OTP CON applicant which would, in any
way, disadvantage TCH in receiving a CON i.e., “exclude[e] from participation in, den[y] the
benefits of, or subject [ ] to discrimination” under the CON program.
requirement18 of certified mail notice to local officials does not change the fact that all CON
applicants, not just those who propose to operate an OTP, must show need, economic feasibility,
and contribution to the orderly development of health care19 before a CON may be granted,
consistent with Tennessee’s “Guidelines For Growth.”
(2000 Ed., Tennessee’s Health
Guidelines For Growth, prepared by the Health Planning Commission).
Plaintiffs allege that the legislative purpose in passing the statute was “presumably” to
gin up local opposition to OTP CON applications and prevent these facilities from locating
“anywhere” in the state. [Doc. 213 at 27] In the face of the undisputed facts offered by the state
The statute, § 1607(c)(3), requires only that the notice inform the designated state and local officials “that an
application for a non-residential facility has been filed with the agency.” The notice need not notify these officials of
any right to appear at a hearing (none exists), nor does the statute require that these officials be formally notified of
the date for any such hearing. In reality, this provision of the law requires nothing more of the OTP CON applicant
than that required of all applicants, see Tenn. Code Ann. § 68-11-1607(c)(1) (requiring applicant’s letter of intent to
be published in a newspaper of general circulation containing a statement that any health care institution or other
person wishing to oppose the application must file a written objection with the agency), and the burden placed on the
applicant by § (c)(3) is no more than a requirement to mail the letter of intent prepared by all applicants to the named
officials, hardly a cumbersome or burdensome requirement. [See Doc. 45-1 at 123-127]. Nevertheless, the Court
acknowledges that § (c)(3) is problematic in that it requires notice requirements on CON applicants to operate
methadone clinics, even though negligible, which are not imposed on other CON applicants. The Tennessee
legislature would be well advised to repeal the statute or make it applicable to all CON applicants.
See Tenn. Code Ann. § 18-11-1609(b) (“No Certificate of Need shall be granted unless the action proposed in the
application is necessary to provide needed health care in the area to be served, can be economically accomplished and
maintained, and will contribute to the orderly development of adequate and effective health care facilities or services.
In making such determinations, the agency shall use as guidelines the goals, objectives, criteria and standards in the
state health plan.)”
defendants that “[a]t least 12 other methadone clinics have obtained CONs and applicable
licenses and operate in other parts of Tennessee,” [Doc. 219 at 12 (citing Doc. 82)], that at least
some of the applications for an OTP CON have been supported by local and state elected
officials, and that the legislature’s express purpose in passing the statute was to allow
informational and advisory support or opposition, plaintiffs cannot simply stand on their
conclusory allegations but must rather come forward with significant probative evidence which
establishes a genuine dispute of material fact. Anderson, 477 U.S. at 252; McClain, 244 F.3d at
Plaintiffs’ have not met this requirement.20 There is simply no evidence that any
community opposition arose as a result of the notice requirement or that it played any part, much
less a significant one, in the denial of the CON. Plaintiffs do not dispute the historical facts
presented by the state defendants nor do they point to anything in the legislative history of §
(c)(3) to suggest that the legislation had any purpose other than its stated purpose. In addition,
nothing in the statute requires OTP CON applicants to comply with any additional regulations or
criteria other than those any other CON applicant is ultimately required to meet. The state
defendants are therefore entitled to summary judgment on to Count 8.
Count 10—HSDA’s Discrimination Against Disabled Persons
It is very difficult to identify and piece together the specific factual allegations which
support Count 10 of the plaintiffs’ second amended complaint, but so far as the Court can tell,
they are these: (1) the state’s criteria for a CON set forth in Tennessee Code Annotated § 68-111609(b) (need, economic feasibility, and orderly development) and the HSDA interpreting rules
are “vague and subjective,” [Doc. 223 at 19]; (2) the Guidelines for Growth provided for in the
state health plan developed pursuant to § 68-11-1625 are also “vague and subjective,” [Id. at 1920
Plaintiffs make this assertion in one of their pleadings: “This statute has blocked OTP clinics numerous times and
contributed to Tennessee’s 10,000 drug overdose deaths in the last decade.” [Doc. 213 at 27]. The cite no facts in the
record to support such an over-the-top allegation.
20]; (3) at the hearing on the CON application before HSDA, “TCH provided sufficient, indeed
overwhelming, evidence of satisfying the vague and subjective requirements” for a CON; [Id. at
20]; (4) three of the nine members of HSDA voted “yes” on TCH’s CON application, [Id.]; (5)
TCH provided statistical evidence of “an estimated 1,000 drug overdose[s] in the previous
decade, and some 500 area residents were driving . . . daily from the Johnson City area over
dangerous mountain roads, as often as daily, for treatment at the nearest OTP’s [sic] in North
Carolina,” [Id.]; (6) “[a]bout 145 die of drug overdoses in the Johnson City area annually,” [Id.];
(7) TCH has “ample assets to build and fit out the clinic,” [Id. at 21]; (8) TCH projected that an
OTP in Johnson City would quickly grow to 1000 patients, providing sufficient income to
operate, [Id.]; (9) no standard of care MMT existed within 50 miles of Johnson City, [Id.]; (10)
HSDA bowed to public pressure from Johnson City’s “official and frenetic opposition to the
clinic” in denying the CON, [Id.], (11) TCH’s CON application fell within the range of
‘reasonable difference of opinion’ as to whether it met CON criteria” as evidenced by the three
“yes” votes, [Id.]; and (12) there is “no evidence that the HSDA panel members were
unreasonable in their findings” (apparently referring only to the three members who voted
“yes.”) 21 [Id. at 20-21].22
As set forth above, claims of intentional discrimination under the ADA are analyzed
under the burden-shifting analysis established by McDonnell Douglas Corp. v. Green.
Analyzing the claims under that standard, however, has been made a significantly more difficult
task for the Court by failure of the parties to address the step-by-step analysis. In fact, plaintiffs
completely ignore the analysis in their briefing, never mentioning McDonnell Douglas at all. As
Plaintiffs make the puzzling claim that the state defendants “bear the burden of proof in showing that the ‘yes’
votes were unreasonable.”
Plaintiffs make these factual allegations without any citation to the record in the case.
best the Court can glean from the pleadings, however, the following reflects the respective
positions of the parties on each of the steps of the analysis.
It does not appear that there is any dispute between the parties over the first and second
parts of the prima facie case, that is, that plaintiffs have a disability and are otherwise qualified.
There does appear, however, to be a clear dispute about the third, i.e., whether plaintiffs have
been excluded from participation in, denied the benefits of, or subjected to discrimination under
the program because of their disability. Anderson, 798 F.3d at 357 (citing Tucker, 539 F.3d at
532) . As the Sixth Circuit succinctly stated in Anderson:
In other words, the plaintiff must show that the defendant took
action because of the plaintiff’s disability, i.e., the “[p]laintiff must
present evidence that animus against the protected group was a
significant factor in the position taken by the [ ] decision-makers
themselves or by those to whom the decision-makers were
knowingly responsive.” Turner, 195 Fed. Appx. at 353; see also
Tucker, 539 F.3d at 553 (holding that to make out a prima facie
case of intentional discrimination under Title II of the ADA, a
plaintiff must establish [ ] that he or she was intentionally . . .
subjected to discrimination . . . because of his or her disability.”)
(emphasis original, internal quotation marks and brackets omitted);
Dillery v. City of Sandusky, 398 F.3d 562, 568 (6th Cir. 2005)
rejecting a plaintiff’s ADA claim for intentional discrimination
because the plaintiff could not show that the defendants’ actions
were “because of her disability”).
Id. 798 F.3d at 357. Stated slightly differently, the ADA requires plaintiff to present sufficiently
“significant” evidence of animus toward the disabled that is a but-for cause of the discriminatory
behavior. Gohl v. Livonia Public School District, 836 F.3d 672, 682 (6th Cir. 2016). This is all
simply another way of saying that plaintiffs “must establish a but-for relationship between the
protested act and the individual’s disability”. To survive summary judgment, plaintiffs must
See M.X. Group, Inc. v. City of Covington, 293 F.3d 326, 336 (6th Cir. 2002).
“identify specific facts which support a connection between the disability” and the denial of the
CON. See Sheffler v. Lee, 2016 WL 878499 (W.D. Ky. March 7, 2016).
Plaintiffs apparently claim they were denied a CON by HSDA because of intentional
discrimination on account of plaintiffs’ disability, i.e., drug addiction. Plaintiffs have no direct
proof of discrimination except that they point to some statements made by a couple of members
of HSDA about local opposition in the Johnson City community. [Doc.223 at 18]. (Mr. Mills:
I’m seeing a lot of opposition from, you know, the City of Johnson City—from, you know, other
entities in the area—but I’m not seeing a lot of support at all, except for the applicant and the
partner” [Doc. 45-10 at 191]; Mr. Southwick: I see it really as a staunch opposition in this
particular area to this kind of treatment and also, obviously, opposition to the provider
themselves;” Mr. Southwick: “[T]here is no political support, no community support, no support
in the immediate area.” [Id. at 87-88]). None of these statements, however, are proof that
HSDA’s decision to deny TCH’s CON application was because of bias against drug addicts or
that local opposition somehow tainted HSDA’s decision. The statements are nothing more than
a simple acknowledgement by two members of HSDA, one of whom voted “no” and the other of
whom voted “yes,” that there exists community opposition to the application. They are not
evidence of disability discrimination, or even if circumstantially so, do not prove that disability
was a but-for cause of the rejection of the CON application. Plaintiffs’ claim thus fails at the
third step of the analysis for a prima facie case. Even if they could, however, establish the third
factor that would not change the outcome for the reasons stated below.
Once plaintiffs make out a prima facie case, as set out above, the defendant “must then
offer a legitimate, nondiscriminatory, reason” for its challenged action, i.e., denial of the CON
application. The burden is satisfied if the defendant “simply ‘explains what he has done’ or
‘produc[es] evidence of legitimate nondiscriminatory reasons.’” Texas Dept. of Community
Affairs v. Burdine, 450 U.S. 248, 256 (1981) (quoting Bd. Of Trustees of Keene State College v.
Sweeney, 439 U.S. 24, 25 n. 2 (1978)). The burden on the defendant is simply one of production,
not persuasion. The burden of persuasion never shifts and “remains at all times with the
plaintiff.” Id. at 253. In other words, the defendant “need not persuade the court that it was
actually motivated by the proffered reasons.” Id. at 254. The plaintiffs’ burden “merges with the
ultimate burden of persuading the court . . . of intentional discrimination.” Id. at 255.
Although not analyzed specifically by the parties in the context of the McDonnell
Douglas framework, the state defendants clearly claim that the CON application was denied
because HSDA did not find that it met the criteria established in Tennessee state law, that is,
need, economic feasibility, and orderly development of health care. Once a legitimate reason for
the challenged action has been shown, as here, plaintiffs must then show that the proffered
reason is simply a pretext for discrimination. Plaintiffs can provide sufficient evidence of a
pretext for unlawful discrimination by “showing that the proffered reason (1) has no basis in fact,
(2) did not actually motivate the defendant’s challenged conduct, or (3) was insufficient to
warrant the challenged conduct.” Wexler v. White’s Fine Furniture, Inc., 317 F.3d 564, 576 (6th
Cir. 2003) (quoting Dews v. A. B. Dick Co., 231 F.3d 1016, 1021 (6th Cir. 2000)). The test is not
a rigid one but is rather a commonsense inquiry. Blizzard v. Marion Tech. Coll., 699 F.3d 275,
285 (6th Cir. 2012).
Basis in Fact
Plaintiffs argue that they “provided sufficient, indeed overwhelming evidence, of
satisfying the” requirements for a CON; provided statistical evidence of a significant number of
overdose deaths in the Johnson City area; provided evidence that hundreds of residents were
driving daily from Johnson City to North Carolina for standard of care methadone treatment;
provided evidence that TCH was financially sound with sufficient assets to build and operate the
clinic; showed that there was no MMT within 50 miles of Johnson City; and established that
“TCH’s CON application fell within the range of ‘reasonable difference of opinion’ as to
whether it met the CON criteria.” In short, plaintiffs claim they should have been granted a
CON.24 The state defendants clearly dispute that plaintiffs have provided sufficient, much less
overwhelming, evidence of need, economic feasibility, and orderly development. That, however,
is an inquiry better suited for an administrative appeal of the CON denial, which TCH has
foregone, and the Court’s inquiry here is not whether the above facts are disputed, but whether
state defendants proffered reason for the denial of the CON has any basis in fact.
The record includes very substantial evidence to support the denial of the CON and there
is no genuine issue of fact in this record over whether the denial had a basis in fact. First of all,
plaintiffs’ admission that their CON application fell within the range of “reasonable difference of
opinion” as to whether they met the CON criteria means that the opposite also falls within the
range of reasonable difference of opinion. Second, TDMHSAS conducted its statutorily required
review and analysis of TCH’s CON application25 and concluded that “[n]eed has not been clearly
This is the subject of Count 17 of plaintiffs’ complaint which seeks review of the HSDA’s decision pursuant to
the state Administrative Procedures Act. Count 13 was previously dismissed by the Court. [See Doc. 163 at 14-15].
The TDMHSAS analysis set out in detail the criteria for a CON for a non-residential methadone facility from the
Guidelines for Growth:
. . . these and other specific criteria are listed in the Guidelines for Growth: 1) A
non-residential methadone facility should provide adequate medical, counseling,
vocational, educational, mental health assessment, and social services to patients
enrolled in the program with the goal of the individual becoming free of opioid
dependency; 2) need should be based on information prepared by the Applicant
which acknowledges the importance of considering the demand for services
along with need as well as addressing and analyzing service problems; 3) the
need assessment should also cover the proposed service area and include the
utilization of existing service providers, scope of services provided, patient
origin, and patient mix; 4) the Applicant should show that the geographic service
area is reasonable and based on an optimal balance between population density
established,” “[e]conomic [f]easibility has possibly been established,” and “[t]he project does not
contribute to the orderly development of health care.” [Doc. 214-4 at 6-7].
TDMHSAS, TCH took national projections and improperly applied them to the Johnson City
area, resulting “in a misrepresentation of need.” [Id. at 9]. TDMHSAS concluded that “[m]any
of the conclusions and inferences drawn by the Applicant from cited references are not
scientifically based and national studies and statistics are mis-applied to the Upper Northeast,
Tennessee area.” [Id]. The TDMHSAS analysis committed several pages of detailed analysis to
support its conclusion. As for economic feasibility, TDMHSAS found that “[t]he overall cost of
the proposed project appears to be reasonable” and that the project could “be completed in a
timely manner.” [Id. at 7]. The analysis noted, however, that it was of concern that, while
documentation had been provided that the managing member had sufficient personal brokerage
account balances to implement the project, staff of TDMHSAS could not find requested
documentation from “a banking institution, Certified Public Accountant, etc. that demonstrates
financial resources and/or reserves to implement the proposed project.” [Id. at 13]. Finally,
when assessing the project’s contribution to the orderly development of health care, TDMHSAS
noted that TCH had been organized solely for the purpose of operating the Johnson City facility
and “has no prior experience in the operation of this type of facility or program other than the
leadership and experience of it Manager who has ‘successfully opened nine (9) such facilities in
four (4) states in five (5) years.’” [Id. at 17].
and service proximity and show that the project is sensitive and responsible to the
special needs of the service area in terms of accessibility to consumers,
particularly women, racial and ethnic minorities, and low-income groups; and 5)
the Applicant should show the project’s relationship to policy as formulated in
local and national plans, including need methodologies.
[Doc. 214-4 at 5]. Plaintiffs refer to these criteria as “vague and subjective.” The Court disagrees.
The report noted that there were no agreements or affiliations with any emergency
hospitals in the area, nor with the East Tennessee State University James H. Quillen College of
Medicine in Johnson City which, according to its Dean of Medicine, did not have any
participation in the development of the proposal and did not support the clinic’s opening. [Id.]
No medical director had been identified26 and the staffing chart did not contain enough
information to determine if staffing requirements would be met or if staff would have the
appropriate certification. [Id. at 18]. The report also noted that TCH had requested zoning
variances to accommodate the project but that the proposal did not appear to meet the zoning
Finally, the record of the CON hearing itself contains ample evidence to defeat any
attempt by plaintiff to show that the denial of the CON had no basis in fact. A number of people,
both in support and in opposition, appeared at the hearing. Among them was Stephen Loyd, a
board-certified internal medicine physician, associate professor of medicine at the Quillen
College of Medicine, associate chief of staff for education at the Mountain Home VA Medical
Center, and a practicing hospitalist. Loyd is a national speaker on proper prescribing practices, a
member of the subcommittee appointed by the State Health Related Boards charged with writing
guidelines for pain clinics in Tennessee, and a speaker for the task force of the health related
boards on providing education about the opiate narcotic epidemic in Tennessee, [Doc. 45-10 at
During the HSDA hearing on the CON application, one of the members stated that she would have preferred for
the medical director of such a proposed facility to appear before HSDA in support of the application. [Doc. 45-10 at
At the beginning of the HSDA hearing on the CON application, HSDA’s general counsel noted that the zoning
issue was the subject of a federal court action and urged members “that the decision not be based on zoning . . .
because it hasn’t been definitively determined . . .” [Doc. 45-10 at 9]. Plaintiffs point to nothing in the record to
suggest that TCH’s lack of zoning approval played any part in the denial of the CON, thus completely undercutting
their argument of a “Catch-22” with regard to zoning and CON approval.
While acknowledging the medical benefits of methadone treatment, Loyd stated
opposition to the CON application on the basis of the application itself, which proposed a clinic
with a part-time physician to see 1046 patients. [Id.]. Loyd cited the testimony of the manager,
Mr. Kester, before this Court in TCH’s initial lawsuit against Johnson City, No. 2:13-CV-108,
that the clinic would utilize a contract physician nine to twelve hours per week, an average of 41
seconds with each patient, or if seen monthly, an average of two and one-half minutes per
patient. [Id. at 66-67].28 Loyd criticized TCH’s business model as not meeting CON standards
which require “adequate medical services with a goal of the individual becoming free of opiate
dependency.” [Id. at 66-67].29 Loyd recounted what some of his own patients had said about
their prior experience with another of the MMTs operated by Mr. Kester, TCH’s managing
partner: no, or very limited, contact with a doctor; denial of medication to patients unable to
pay;30 dosing impaired people and then allowing them to drive (largely because of lack of proper
evaluations); limited time with counselors; and no drug screens or drug screens positive for
benzodiazepines31 without counselling about the risk of overdose. [Id. at 68-69]. Deficiency
reports from Kester’s other clinics indicated that counselors were not properly trained and charts
had no individual treatment plan. [Id. at 70]. Loyd characterized the CON application as one for
a “pill mill.” [Id. at 71]. ]
Kester confirmed that TCH’s business model contemplated 12 hours a week of physician or physician assistant
time, four hours a day for three days a week. [Doc. 45-10 at 107].
Loyd also noted a concern that the proposed clinic refused to participate in TennCare, Tennessee’s Medicaid
program, even though 20-25 percent of the patient population at the proposed clinic would receive buprenorphine, a
service covered by TennCare. [Doc. 45-10 at 51-52]. Kester confirmed that TCH’s proposed clinic would not accept
TennCare but said the same was true at the other 12 facilities in Tennessee and patients would be provided a receipt
so they could seek reimbursement from TennCare. [Id. at 89].
In “Tennessee’s Health Guidelines for Growth” a non-residential methadone treatment facility “should provide
adequate medical, counseling, vocational, educational, mental health assessment and social services to patients
enrolled in the opioid treatment program with the goal of the individual becoming free of opioid dependency.” [Doc.
41-9 at 34].
According to Loyd, “if you look at drug-overdose deaths in the State of Tennessee, the number-one things found
in the toxicology reports are methadone and benzodiazepines.” [Doc. 45-10 at 69].
Dr. Bomar Herrin, a Johnson City board certified addiction care specialist, with 35 years
in practice, also appeared in opposition to the CON. He echoed many of the same things stated
by Loyd, but specifically addressed the standard of care for addiction treatment. [Id. at 72-73].
Dr. Herrin took issue with TCH’s claim that methadone maintenance treatment was the standard
of care for addicts. He noted that the Tennessee Medical Foundation had for 30 years stressed
“abstinence-based recovery” and opined that methadone, a Schedule II drug, is “not the best
drug” for treatment and “[t]here is a better chance of overdose with methadone.” [Id. at 73].
According to Herrin, he had just recently returned from a meeting of the American Board of
Addiction Medicine and “didn’t hear anybody say that methadone was superior to
buprenorphine,” a Schedule C drug “less likely to create an overdose than methadone.” [Id. at
73-74]. Johnson City has one buprenorphine-certified doctor for every 1,200 people, a much
lower ratio than is found in Tennessee’s capitol, Nashville, where the ratio is one certified
physician for every 18,000 people. [Id. at 47].
Although these facts are contradicted by documents and testimony offered by TCH in
support of its application, that is of little import here. These facts are far more than sufficient to
refute any suggestion or argument by TCH that the CON denial “had no basis in fact” and there
is no genuine issue of material fact on this factor.
Did Not Actually Motivate the Denial of the CON
With regard to the second factor, the question is whether a genuine issue of material fact
exists as to whether the denial of the CON was actually motivated by the record before HSDA,
or if it was because of disability discrimination. Since plaintiffs did not specifically address this
factor, it is difficult to discern their argument that a genuine issue of material fact exists.
Plaintiffs do complain about HSDA’s “facially invalid” statutory procedures, but they offer no
evidence to show that the notice requirements of Tennessee Code Annotated § 68-11-1607(c)(3)
had any connection to the denial of the TCH CON application, as noted by this Court in its prior
order and the Sixth Circuit in its opinion. [Doc. 172 at 12]. The only effort made by the
plaintiffs that can be construed as an effort to do so is the argument by plaintiffs that “HSDA
panel members admitted that local opposition weighed significantly on their thinking,” citing the
comments referenced earlier in this memorandum by members Southwick and Mills. These
comments, however, do not create a genuine issue of material fact.
Plaintiffs also argue that the CON criteria “is [ ] vague, subjective, and subject to
discriminatory abuse,” and that TCH’s application “clearly fell within the ‘subjective range’ of
satisfying HSDA’s vague and subjective CON criteria.” [Doc. 223 at 22-23]. Even if the
reasons were subjective, however, that does not raise an inference of disability discrimination.
See Schoonmaker v. Spartan Graphics Leasing, LLC, 595 F.3d 261, 269 (6th Cir. 2010) (citing
Geiger v. Tower Automotive, 579 F.3d 614, 625 (6th Cir. 2009); Browning v. Dept. of the Army,
436 F.3d 692, 697 (6th Cir. 2006); Wrenn v. Gould, 808 F.2d 493, 502 (6th Cir. 1987)). Nor can
the plaintiffs reasonably rely on an argument that somehow the CON criteria are flawed. Even if
HSDA made an unwise decision or the criteria are faulty, that would likewise not support an
inference of discrimination. See Id. (citing Coleman v. Quaker Oats, 232 F.3d 1271, 1285 (9th
Cir. 2000)). Accordingly, since there is no evidence in the record that HSDA members had any
discriminatory animus toward plaintiffs or others with drug addiction32 or that anything other
than the actual record before HSDA was the cause of the denial, there is no genuine dispute as to
Indeed, the record shows the opposite. HSDA had approved an earlier application for a MMT in Johnson City,
[Doc. 45-10 at 13], and had, as the Sixth Circuit stated, “issued CON’s [sic] for 12 other methadone clinics in
Tennessee, so this staff recommendation cannot simply be attributed to local opposition or lack of zoning approval,
much less bias against opiate-addicted individuals.” [Doc. 172 at 11].
a material fact as to whether HSDA’s reasons for the denial were not the actual motivation for
the denial of the CON application.
iii. Insufficient To Warrant Denial
Finally, as to the third factor, the Court concludes, largely for the reasons set forth in
subsection b.i. above, that no reasonable trier of fact could conclude that plaintiffs have
established that the facts and testimony before the HSDA panel were insufficient to justify its
denial of TCH’s CON application.
In sum, the Court finds that plaintiffs have not created a genuine issue of material fact
that defendants’ reason for denial of the CON is mere pretext. Accordingly, defendants are
entitled to summary judgment on Count 10 of plaintiffs’ complaint and the Court will enter
judgment in favor of defendant and against plaintiffs on Count 10 of the second amended
d. Count 12-Failure of HSDA to Make a Reasonable Accommodation
In Count 12, plaintiffs state their cause of action as follows: “HSDA violated Title II of
the Americans with Disabilities Act by failing to provide TCH a reasonable accommodation to
allow it to locate its proposed OTP clinic in Johnson City, Tennessee.” [Doc. 136 at ¶ 337].
According to the factual allegations of the complaint, plaintiffs made requests for
accommodation (1) on or about June 17, 2003, when TCH requested by letter that HSDA
provide TCH with a reasonable modification “to allow the granting of TCH’s CON application;”
[id. at ¶ 192]; (2) at the CON hearing, TCH requested that HSDA provide a reasonable
modification “to allow the granting of TCH’s CON application,” [id. at ¶ 193]; and (3) on or
about June 28, 2013, TCH requested by letter that HSDA provide a reasonable modification “to
allow the granting of TCH’s CON application.” [Id. at ¶ 194]. Plaintiffs allege that “HSDA
could easily, without undue burden, modify one or all of the criteria related to need, economic
feasibility, and orderly development (and for that matter any and all other rules, if any, presently
stopping the CON from being issued) and allow the CON application to be approved.” [Id. at ¶
Plaintiffs do not specify which of the criteria for a CON they refer to or how it could have
been modified, nor do they specify what rules could be modified.
They simply seek
modification of any “criteria” or “rules” which are “stopping the CON from being issued.” [Id.].
Plaintiffs’ 25 page brief in support of their motion for summary judgment contains only one
paragraph of conclusory argument on this issue. [Doc. 213 at 28]. In their brief of opposition to
the motion of the state defendants, plaintiffs identify what they call “a very reasonable
modification . . . [f]or the State Defendants . . . to adopt the findings of the three HSDA Panel
members” who voted “yes.” [Doc. 223 at 9]. No matter how characterized, the essence of
plaintiffs’ rejected modification was “to allow the granting of TCH’s CON application.” [Id. at
15]. Plaintiffs made the same vague and conclusory allegations in TCH III and the Court has
thoroughly considered, and rejected, them in its memorandum opinion in that case, which is now
on appeal to the Sixth Circuit. For the same reasons their reasonable accommodation claims
filed against the other state defendants failed in TCH III, they fail here as well.
The ADA makes it unlawful for an employer to “discriminate against a qualified
individual on the basis of a disability.” 42 U.S.C. § 12112(a). The statute defines “discriminate”
to include “not making reasonable accommodation . . .” Id. at § 12112(b)(5)(A).
Three inquiries are made with respect to a requested accommodation:
(1) Whether the
modification requested was reasonable, (2) whether it was necessary for the disabled individual,
and (3) whether it would fundamentally alter the nature of the program or activity. PGA Tour,
Inc. v. Martin, 532 U.S. 661, 682-83 (2001). An ADA plaintiff “bears the initial burden of
proposing an accommodation and showing that that accommodation is objectively reasonable.”
Kleiber v. Honda of Am. Mfg., Inc., 485 F.3d 862, 870 (6th Cir. 2007) (quoting Hedrick v. W.
Reserve Care Sys. and Forum Health, 335 F.3d 445, 457 (6th Cir. 2004)).
“[A]n accommodation is reasonable unless it requires ‘a fundamental alteration in the
nature of a program’ or imposes ‘undue financial and administrative burdens.’” Smith & Lee
Assoc. v. City of Taylor, 102 F.3d 781, 795 (6th Cir) (quoting Southeastern Cmty. College v.
Davis, 442 U.S. 397, 410, 412 (1979)). The Supreme Court has indicated that, “in most cases,”
determining whether an accommodation is “reasonable” will require the district court “to
conduct an individualized inquiry and make appropriate findings of fact.” School Board of
Nassau County v. Arline, 480 U.S. 273, 287 (1987). “In cases involving waiver of applicable
rules and regulations, the overall focus should be on ‘whether waiver of the rule in the particular
case would be so at odds with the purposes behind the rule that it would be a fundamental and
unreasonable change.’” Jones v. City of Monroe, 341 F.3d 474, 480 (6th Cir. 2003) (quoting
Dadian v. Village of Wilmette, 269 F.3d 831, 838-39 (7th Cir. 2001)). The burden of proving that
an accommodation is not reasonable lies with the public entity. Id.
The purpose of the CON requirement in Tennessee is set out at Tennessee Code
Annotated § 68-11-1603 where it is declared “to be the public policy of this state that the
establishment and modification of health care institutions, facilities and services shall be
accomplished in a manner that is orderly, economical and consistent with the effective
development of necessary and adequate means of providing for the health care of the people of
Tennessee.” The Court agrees with the state defendants that the “modification” requested by the
plaintiffs is objectively unreasonable and would result in a fundamental alteration of the
Tennessee CON program. Plaintiffs’ demand for a “blanket exception” from the requirements of
the Tennessee program “would be so at odds with the purpose behind the rule that it would be a
fundamental and unreasonable change.” Jones, 341 F.3d at 480. In fact, plaintiffs have offered
no legal authority or case law support for their very broad theory of this case, which seems to go
something like this: “I am disabled or seek to provide a covered health service to the disabled;
therefore, I should be automatically exempt from all statutory and regulatory criteria, i.e., need,
economic feasibility, and orderly development, for the issuance of a CON.” Such an approach
would not only undermine the purposes of the Tennessee Health Services and Planning Act, it
would destroy it altogether. Under plaintiffs’ theory, any hospital, nursing home, surgical center,
and like facility that provides health services to any disabled person would become automatically
approved for a CON and, in effect, be totally exempt from the requirements of the Health Services
and Planning Act. The ADA does not require such a result.
Olmstead v. L.C. ex rel Zimring
In one paragraph of their response to the motion of the state defendants for summary
judgment, plaintiffs make the following claim: “HSDA’s contention of no discriminatory intent is
betrayed by Johnson City’s spectacular Olmstead violation by officially opposing TCH’s CON
application, even bringing in a paid lobbyist and accompanied mass public opposition.” [Doc.
223 at 16]. The claim is followed by one paragraph:
Federal courts find that an ADA Title II violator may
attempt to “conceal discriminatory intent by claiming that they
relied upon objective, neutral criteria” when deciding to leave the
requirement intact. But the animus described above reveals that any
purported justifications are mere pretext. Johnson City spectacularly
violated the Olmstead [sic] integration mandate when the Mayor
opposed, in his official capacity, and a paid lobbyist “lead [sic] the
opposition” against TCH’s CON application. The official
opposition was accompanied by a mass opposition and dozens of
letters of opposition from virtually every state and federal official
from Johnson City.
The state defendants reply to this “new” argument, raised “for the first time,” in plaintiffs’
response by correctly noting that neither Olmstead nor “integration mandate” are mentioned in
any of plaintiffs’ complaints filed in the case. The state defendants also correctly argue that, even
if plaintiffs can now assert such a claim, it fails as a matter of law.
In Olmstead, the Supreme Court recognized that “unjustified placement or retention of
persons in institutions, severely limiting their exposure to the outside community, constitutes a
form of discrimination based on disability prohibited by Title II.”
Olmstead, 257 U.S. at 596.
Following the Olmstead decision, the “DOJ announced its view that the disability discrimination
claim recognized in Olmstead is not limited to individuals already subject to unjustified isolation,
but also ‘extend[s] to persons at serious risk of institutionalization or segregation.’” U. S. Dep’t
of Justice, Statement of the Dep’t of Justice on Enforcement of the Integration Mandate of Title II
of the Americans With Disabilities Act and Olmstead v. L.C., Q.6 (updated June 22, 2011),
available at www.ada.gov/Olmstead/q&a_Olmstead.htm) (last visited 8/24/17). See also Davis v.
Shah, 821 F.3d 231, 262 (2d Cir. 2016).
In order to state a claim under Olmstead’s integration mandate, a plaintiff must establish a
sufficient risk of institutionalization by showing that “a public entity’s failure to provide
community services . . . will likely cause a decline in health, safety, or welfare that would lead to
the individual’s eventual placement in an institution.” Davis, 821 F.3d at 262-63 (emphasis in
original). Plaintiffs have simply failed to plead sufficient facts here which would make out a
claim under Olmstead or the integration mandate.
For the reasons set forth herein, the motions for summary judgment filed by Johnson City
and the State Defendants, [Docs. 215, 218] will be GRANTED and plaintiffs’ motion for
summary judgment, [Doc. 212], will be DENIED and plaintiffs’ second amended complaint will
be DISMISSED WITH PREJUDICE.
A separate judgment will enter.
s/J. RONNIE GREER
UNITED STATES DISTRICT JUDGE
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