551 F.Supp.3d 648
E.D. La.2021Background
- Plaintiffs Ursula Newell‑Davis and Sivad Home and Community Services, LLC operate/seek to operate respite care in Louisiana and must obtain a Facility Need Review (FNR) before applying for a state license.
- Newell‑Davis’s 2019 FNR application was denied on February 19, 2020 for "failure to demonstrate need"; Plaintiffs allege the FNR effectively bars them from lawfully providing respite services.
- Plaintiffs contend FNR arbitrarily limits new providers, protects incumbents (economic protectionism), raises costs, reduces quality and access, and therefore violates the Fourteenth Amendment (due process, equal protection, privileges or immunities) and analogous Louisiana constitutional provisions.
- Defendants (LDH Secretary and Undersecretary) moved to dismiss under Rule 12(b)(6), arguing FNR serves legitimate state interests (consumer protection, Medicaid integrity, regulatory efficiency) and that some federal claims duplicate others.
- The court denied dismissal of Plaintiffs’ federal equal protection and substantive due process claims and Plaintiffs’ Louisiana due process and equal protection claims, but granted dismissal with prejudice of the Fourteenth Amendment Privileges or Immunities claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal Equal Protection | FNR irrationally discriminates, favoring incumbents and not tied to legitimate ends | FNR advances consumer protection, Medicaid integrity, and regulatory efficiency; not a suspect classification | Denied dismissal — pleadings plausibly allege irrational economic protectionism and disparate treatment |
| Federal Substantive Due Process | FNR deprives right to earn a living; not rationally related to legitimate state interest | Claim duplicates equal protection; state procedures suffice for any procedural due process challenge | Denied dismissal — right to pursue occupation alleged; theory differs from equal protection and survives pleading stage |
| Fourteenth Privileges or Immunities | Clause protects the right to earn a living; FNR abridges that right | Clause historically limited; not applicable to intrastate occupational regulation | Granted dismissal with prejudice — clause protects only "uniquely federal" rights after Slaughter‑House line of cases |
| Louisiana Equal Protection | FNR does not further an appropriate state interest; limits access and protects incumbents | FNR furthers consumer protection; law is facially neutral and not adopted for discriminatory purpose | Denied dismissal — under state three‑tier test plaintiffs plausibly allege law fails to suitably further an appropriate state interest |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432 (1985) (equal protection framework for similarly situated classifications)
- Meyer v. Nebraska, 262 U.S. 390 (1923) (substantive due process protects right to pursue common occupations)
- Slaughter‑House Cases, 83 U.S. 36 (1873) (narrow reading of the Fourteenth Amendment Privileges or Immunities Clause)
- Deubert v. Gulf Fed. Sav. Bank, 820 F.2d 754 (5th Cir. 1987) (P&I protects only uniquely federal rights; no private cause under P&I for ordinary occupational regulation)
- Lindquist v. City of Pasadena, 525 F.3d 383 (5th Cir. 2008) (dismiss substantive due process when it fully overlaps equal protection)