Dipendra Tiwari v. Eric Friedlander
26 F.4th 355
| 6th Cir. | 2022Background
- Dipendra Tiwari and Kishor Sapkota (Grace Home Care) sought a Kentucky certificate of need (CON) to operate a home-health agency in Jefferson County focused on Nepali-speaking patients.
- Kentucky’s CON regime requires State approval and uses a State Health Plan; new home-health entrants must show need for 250 patients while incumbents need 125 for expansion.
- Baptist Health intervened in the administrative CON proceeding; Grace Home Care did not contest the administrative denial in state court and instead sued in federal court.
- Plaintiffs alleged violations of the Fourteenth Amendment (substantive due process/right to earn a living; equal protection; privileges or immunities).
- The district court denied defendants’ Rule 12(b)(6) motions (permitting discovery), but after discovery granted summary judgment to the State; the Sixth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kentucky’s CON law (as applied to home health) violates substantive due process/right to earn a living (rational-basis) | CONs serve primarily to protect incumbents, increase costs, and reduce quality; empirical evidence shows CONs fail their stated aims | CONs plausibly further legitimate interests in cost efficiency, quality, and health-system planning; rational-basis review is highly deferential | Affirmed — CON law survives rational-basis review; legislature could plausibly believe CONs further legitimate health interests |
| Whether CON scheme’s different patient-thresholds (250 for entrants; 125 for incumbents) are irrationally protectionist | Disparate thresholds favor incumbents and can indefinitely block entry | Different thresholds plausibly reflect incumbents’ lower marginal overhead and economies of scale; rational basis supports the classification | Affirmed — disparity has a plausible legislative justification |
| Whether exemptions for physicians’ offices and continuing care retirement communities (CCRCs) violate equal protection | Exemptions are arbitrary and protectionist | Exemptions rest on plausible distinctions (physician supply/regulation; CCRCs serve residents and are not Medicaid-funded) | Affirmed — classifications are rationally related to legitimate aims |
| Whether summary judgment was improper because the record raises triable factual disputes about rationality | Plaintiffs’ evidence creates triable issues showing CONs undermine stated goals | Rational-basis review asks only whether a plausible legislative rationale exists; courts need not resolve factual policy disputes at trial | Affirmed — summary judgment appropriate because no evidence rebutted the existence of any plausible rational basis |
Key Cases Cited
- F.C.C. v. Beach Commc’ns, Inc., 508 U.S. 307 (1993) (articulates deferential rational-basis review for economic regulation)
- Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483 (1955) (upholding economic licensing under rational-basis review)
- Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456 (1981) (legislature need only have a debatable basis for regulatory measures)
- Vance v. Bradley, 440 U.S. 93 (1979) (rational speculation can suffice to uphold classifications)
- Craigmiles v. Giles, 312 F.3d 220 (6th Cir. 2002) (invalidated protectionist licensing that served no plausible public purpose)
- Colon Health Ctrs. of Am., LLC v. Hazel, 813 F.3d 145 (4th Cir. 2016) (upholding CON laws as a valid means of furthering state health objectives)
- Birchansky v. Clabaugh, 955 F.3d 751 (8th Cir. 2020) (upholding home-health CON requirements)
- Planned Parenthood of Greater Iowa, Inc. v. Atchison, 126 F.3d 1042 (8th Cir. 1997) (recognizing CON laws as constitutionally permissible means)
- Chi. Bd. of Realtors, Inc. v. City of Chicago, 819 F.2d 732 (7th Cir. 1987) (discussing limits of rational-basis review and when trials are unnecessary for such claims)