260 F. Supp. 3d 913
E.D. Tenn.2017Background
- TCH (Tri-Cities Holdings, LLC) sought a Certificate of Need (CON) to open an opioid treatment program (OTP) in Johnson City, TN; state law requires a CON and a license from TDMHSAS.
- THSDA denied the CON after a public hearing; TCH appealed administratively and also filed multiple federal suits alleging ADA and Rehabilitation Act violations.
- TCH’s counsel, Mr. Dunlap, repeatedly demanded an ADA “reasonable modification” that would effectively order the CON granted without following CON criteria or administrative process.
- ALJ Summers revoked Dunlap’s pro hac vice admission in the administrative appeal, finding misrepresentations, coercion, and professional misconduct; state courts affirmed that revocation.
- Plaintiffs sued TAPD, TDOS, ALJ Summers, TDMHSAS, and officials in federal court asserting failure-to-accommodate, retaliation (ADA/Rehab Act), and due process claims; parties filed cross-motions for summary judgment.
- The district court denied plaintiffs’ summary judgment, granted defendants’ summary judgment on Counts 1–7 (reasonable modification and retaliation), and gave plaintiffs limited time to show cause on Count 8 (due process) before disposing of it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were plaintiffs entitled to a "reasonable modification" under ADA/Rehab Act forcing grant of CON (waiver of CON criteria)? | TCH: ADA/RA required state to modify rules so CON would be granted (blanket exception) to allow OTP operation. | State: Requested modification is a blanket exemption from CON scheme, would fundamentally alter statute and program purpose; objectively unreasonable. | Denied — requested waiver would fundamentally alter Tennessee CON program; modification not reasonable. |
| Whether revocation of Dunlap’s pro hac vice admission was unlawful retaliation under ADA/Rehab Act | TCH: Revocation was retaliation for asserting ADA rights and seeking accommodation; therefore unlawful. | State: Revocation resulted from attorney misconduct (misrepresentations, coercion) as found by ALJ and affirmed by state courts; issue preclusion bars relitigation. | Denied — issue precluded by final state-court rulings; even absent preclusion, record shows nondiscriminatory reason (misconduct). |
| Whether issue preclusion bars relitigation of why pro hac vice was revoked | TCH: Challenges aspects but did not rebut state-court findings; argues some findings (e.g., extortion) were not affirmed. | State: All essential findings supporting revocation were litigated and decided; collateral estoppel applies. | Held that issue preclusion applies as plaintiffs had full, fair opportunity and state courts rendered final judgment on misconduct grounds. |
| Whether Count 8 (due process) survives summary judgment on present record | TCH: Alleges deprivation of property/right to CON and harm to individual plaintiffs (access to treatment). | State: Plaintiffs fail to identify specific procedural or substantive due process violations and did not respond substantively in opposition. | Court gave plaintiffs 14 days to show cause why Count 8 should not be dismissed; implied likely dismissal if no adequate showing. |
Key Cases Cited
- PGA Tour, Inc. v. Martin, 532 U.S. 661 (individualized inquiry for reasonable accommodation)
- Kleiber v. Honda of Am. Mfg., Inc., 485 F.3d 862 (burden to propose objectively reasonable accommodation)
- Jones v. City of Monroe, 341 F.3d 474 (waiver of rules must not fundamentally alter program)
- Thaddeus-X v. Blatter, 175 F.3d 378 (retaliation framework; defendant can prevail by showing same action would have been taken absent protected activity)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (framework for circumstantial evidence retaliation cases)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard; role of judge vs. jury)
- Georgia-Pacific Consumer Prods. LP v. Four-U-Packaging, Inc., 701 F.3d 1093 (Sixth Circuit statement of issue-preclusion elements)