NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 18a0097n.06
Nos. 17-5628/6046
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
TRI-CITIES HOLDINGS LLC et al., )
FILED
Feb 28, 2018
)
Plaintiffs-Appellants, DEBORAH S. HUNT, Clerk
)
v. )
)
TENNESSEE ADMINISTRATIVE PROCEDURES ) ON APPEAL FROM THE
DIVISION et al. (17-5628); TENNESSEE ) UNITED STATES DISTRICT
HEALTH SERVICES AND DEVELOPMENT ) COURT FOR THE EASTERN
AGENCY et al. (17-6046), ) DISTRICT OF TENNESSEE
)
Defendants-Appellees. )
) OPINION
Before: MOORE, THAPAR, and LARSEN, Circuit Judges.
KAREN NELSON MOORE, Circuit Judge. This consolidated appeal caps a trilogy of
federal lawsuits brought by the would-be owner and operator of a methadone1 clinic in Johnson
City, Tennessee, on behalf of itself and several prospective clients, under the Americans with
1
“Methadone is the oldest FDA-approved medication for treating opioid dependence.”
Barbara Andraka-Christou, What Is “Treatment” for Opioid Addiction in Problem-Solving
Courts?, 13 STAN. J. C.R. & C.L. 189, 221 (2017). The synthetic drug—a substitute for more
baneful opioids—“works by activating opioid receptors in the brain” so as to “prevent[]
cravings,” ward off withdrawal symptoms, and “prevent[] a sense of euphoria or a ‘high’ if a
person abuses heroin or painkillers while undergoing methadone treatment.” Id. At the same
time, “[m]ethadone can be dangerous if diverted and improperly used,” id., and a 2012 report
found that methadone was “involved in one third of [opioid-pain-reliever]-related overdose
deaths,” despite comprising less than two percent of opioid-pain-reliever prescriptions, CENTERS
FOR DISEASE CONTROL & PREVENTION, Vital Signs: Risk for Overdose from Methadone Used for
Pain Relief—United States, 1999–2010, 61 MORBIDITY & MORTALITY WEEKLY REP. 493, 493–
94 (2012) [hereinafter “Risk for Overdose”]. Both methadone users and clinics set up to serve
them have standing to bring suits like this one. See MX Grp., Inc. v. City of Covington, 293 F.3d
326, 335–36 (6th Cir. 2002).
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq., and the Rehabilitation Act of 1973 (“RA”),
29 U.S.C. § 794. The primary Plaintiff-Appellant is Tri-Cities Holdings (“TCH”), a Georgia
corporation, and the other Plaintiffs-Appellants have been anonymized as John and Jane Does.2
The Defendants-Appellees are Tennessee state and local government actors who, in one way or
another, stood in the way of TCH’s efforts to open the proposed clinic. For the reasons that
follow, we AFFIRM the district court’s grant of summary judgment to all defendants.
I. BACKGROUND
A. State and Local Laws Governing the Establishment of Methadone Clinics
Perhaps unsurprisingly, Tennessee regulates the establishment of medical-services
providers. An entity seeking to set up “any type of health care institution” must first obtain a
“certificate of need” (“CON”) from the state’s Health Services and Development Agency
(“HSDA”) through a vote of its eleven-member board (all of whom are defendants-appellees
here). See Tenn. Code Ann. §§ 68-11-1604, -1607(a). Before it goes to the HSDA, however, a
CON application is reviewed by one of three state departments, who both check the application’s
claims and evaluate the application under three statutorily inscribed criteria: need, economic
feasibility, and contribution “to the orderly development of adequate and effective health care
facilities or services.” See § 68-11-1609(b); TCH III R. 15-1 (Review of CON Application at
2
For simplicity, we refer to Plaintiffs-Appellants collectively as “TCH,” distinguishing
only where relevant.
2
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
2) (Page ID #131).3 In the case of a methadone clinic, the evaluator is the state’s Department of
Mental Health and Substance Abuse Services (“DMHSAS”) (another defendant-appellee here).
All CON applicants are required to give some general notice of their intentions: they
must file a “letter of intent” and then publish that letter “in a newspaper of general circulation in
the proposed service area of the project.” Id. § 68-11-1607(c)(1). But there is an additional
notice requirement that applied specifically to would-be methadone clinics at the time of TCH’s
CON application and that now applies to any “nonresidential substitution-based treatment center
for opiate addiction.” Id. § 68-11-1607(c)(9)(A); 2015 Tenn. Pub. Acts, ch. 505.4 This extra
provision requires that any such applicant also mail notice to a handful of local elected officials,
including the relevant municipality’s mayor. Tenn. Code Ann. § 68-11-1607(c)(9)(A).
A CON applicant may request that the HSDA hold a public hearing prior to its vote.
Tenn. Code Ann. § 68-11-1608(b). “[A] local governing body” may, upon request, “participate
in” that hearing “and express support or opposition,” although such “testimony . . . shall be
informational and advisory” only. Id. § 68-11-1624.5 If a CON application is denied, the
applicant may appeal to a state administrative law judge (“ALJ”). Id. § 68-11-1610.
3
Because this consolidated case includes two district court records, we use “TCH II” or
TCH III” before each record citation unless context makes clear which one is being referenced.
4
The methadone-specific version of this provision was codified at Tenn. Code Ann. § 68-
11-1607(c)(3). There is no suggestion that the Tennessee legislature’s slight broadening of the
provision, which may reflect the ascendancy of newer forms of treatment, affects this case.
5
At the time of TCH’s CON application, Tenn. Code Ann. § 68-11-1624 applied only to
“a hearing conducted by the agency for a nonresidential substitution-based treatment center for
opiate addiction,” but it now applies to any CON application hearing. 2015 Tenn. Pub. Acts, ch.
505.
3
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
Johnson City also regulates the establishment of methadone clinics within city limits,
which may be located only in areas zoned “MS-1.” TCH II R. 41-5 (Johnson City Zoning
Requirements at 96–97) (Page ID #864–65). The ordinance in operation when TCH sought a
CON also required that such clinics, among other requirements, (1) have first obtained a CON;
(2) “not be located within two hundred (200) feet of a school, day-care facility, or park”;
(3) operate only between 7:00 AM and 8:00 PM; and (4) “be located on” and provide “primary
access . . . from an arterial street.” TCH II R. 44-1 (Old Ordinance) (Page ID #1821–22).6
B. Tri-Cities I, TCH’s CON Application, and Tri-Cities II
TCH’s first federal lawsuit, Tri-Cities Holdings LLC et al. v. Johnson City et al. (“Tri-
Cities I”), No. 2:13-cv-108, challenged Johnson City’s zoning ordinances and argued that
various city defendants (all of whom are also defendants-appellees here7) had violated the ADA
and RA by refusing to issue necessary permits to TCH. TCH II R. 19-3 (Tri-Cities I Compl.)
(Page ID #468–70). The district court dismissed that suit on June 12, 2013, on ripeness grounds.
TCH II R. 19-1 (Tri-Cities I Dist. Ct. Op. & Order at 8–10) (Page ID #465). The district court
reasoned that, in light of the absence of a CON, it was “virtually impossible . . . to determine any
likelihood that the harm alleged by plaintiffs will ever come to pass,” and moreover there was
“minimal hardship on the parties” to delay adjudication until TCH obtained a CON. Id. at 8–9
6
In 2015, Johnson City revised its ordinance, apparently eliminating the regulations on
hours of operation and distance from other types of properties while retaining its requirement
that a CON be obtained and presented. TCH II R. 214-7 (New Ordinance) (Page ID #6039–41).
7
For simplicity, we refer to these defendants-appellees collectively as “Johnson City.”
4
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
(Page ID #463–64). The district court accordingly entered a judgment of dismissal without
prejudice. TCH II R. 19-2 (Tri-Cities I J.) (Page ID #467). TCH did not appeal.
TCH filed a second federal lawsuit, Tri-Cities Holdings LLC et al. v. Tenn. Health Servs.
& Dev. Agency et al. (“Tri-Cities II”), No. 3:13-cv-669,8 which is one of the two cases in this
consolidated appeal (No. 17-6046), after the HSDA denied TCH’s CON application by a vote of
3–6–1 after a lengthy public hearing on June 26, 2013, TCH III R. 31-3 (Tr. of CON Application
Hr’g at 3, 197) (Page ID #1021, 1215). In addition to HSDA board members and staff, the
attendees included a range of community members, including local political leaders, as well as a
minister, several doctors, at least one educator, and a nurse. See id. at 5 (Page ID #1023). The
hearing began with HSDA General Counsel Jim Christoffersen advising participants not to base
their decisions on any Johnson City zoning issues in light of the unresolved litigation and then
reading aloud a letter from TCH’s attorney, James Dunlap, asking that, were the application to be
denied, “the applicant be provided all reasonable accommodations or modifications to any and
all applicable rules and requirements necessary to enable its application to be approved, as
required by the ADA and the RA.”9 Id. at 9 (Page ID #1027).
8
This suit, filed in the Middle District of Tennessee, was ultimately transferred to the
Eastern District of Tennessee as Tri-Cities Holdings LLC v. Tenn. Health Servs. & Dev. Agency,
No. 2:13-cv-305.
9
This was one of many functionally identical requests that Dunlap made to the various
state and local entities involved in this case for “reasonable accommodations or modifications”
to state and local policies in order to allow TCH to open its clinic. See, e.g., TCH III R. 31-3 (Tr.
of CON Application Hr’g at 197) (Page ID #1215); TCH III R. 15-5 (Dunlap Letter to HSDA at
1–3) (Page ID #484–86); TCH III R. 15-6 (Dunlap Letter to ALJ Summers at 1) (Page ID #504).
5
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
Some of the hearing’s discussion focused on DMHSAS’s eighteen-page report, which the
department had submitted about two weeks prior. TCH III R. 15-1 (Review of CON Application
at 1) (Page ID #130). DHMSAS had concluded that it could not “support approval of the
application because” two of the three statutory criteria—need, economic feasibility, and
contribution to the orderly development of healthcare—“ha[d] not been met.” Id. at 4 (Page ID
#133). While observing that economic feasibility, “ha[d] possibly been established,” id. at 6
(Page ID #135), the report stated that need for this particular type of facility “ha[d] not been
clearly established,” id. at 5 (Page ID #134), and that “[t]he project [would] not contribute to the
orderly development of healthcare,” id. at 6 (Page ID #135).
Those who spoke in favor of TCH’s application at the hearing, meanwhile, tended to
emphasize the hardship of requiring people seeking methadone treatments to travel dozens of
miles away. See TCH III R. 31-3 (Tr. of CON Application Hr’g at 26–27, 34–35, 39) (Page ID
#1044–45, 1052–53, 1057). Others who were skeptical or opposed questioned the efficacy and
safety of methadone when compared against other substitution-based treatments—chiefly a
newer synthetic drug called buprenorphine10—that were already readily available, see id. at 43–
10
Emergent since its approval by the FDA in 2002, buprenorphine (often known by the
brand name Suboxone) likewise “prevents . . . withdrawals,” “cravings,” and “a ‘high’ from any
additional opioid used.” Andraka-Christou, supra, at 224. “The opioid ingredient in
buprenorphine,” however, “is significantly less potent than in methadone, so buprenorphine is
significantly less likely to be abused and rarely causes an overdose.” Id. Accordingly,
buprenorphine has been characterized by at least some researchers and doctors as a “much safer
option,” with “significant harm reduction qualities” and very limited risk of overdose. See Alan
Gordon & Alexandra A. Gordon, Does It Fit?—A Look at Addiction, Buprenorphine, and the
Legislation Trying to Make It Work, 12 J. HEALTH & BIOMEDICAL L. 1, 10–11 & nn. 50, 54
(2016) (describing comparative safety of buprenorphine and citing sources).
6
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
49, 51, 54–56, 59–60, 73–75, 141, 147–48, 168–69, 180–81) (Page ID #1061–67, 1069, 1072–
74, 1077–78, 1091–93, 1159, 1165–66, 1186–87, 1198–99), and the quality of the facility that
TCH’s 50% owner and chief executive, Steven Kester, could be expected to establish, see id. at
50–52, 60–70, 79–80, 105–08, 119–23, 130–31, 137–39, 151–53, 166–67, 169–71 (Page ID
#1068–70, 1078–88, 1097–98, 1123–26, 1137–41, 1148–49, 1155–57, 1169–71, 1184–85, 1187–
89). Two parents, for example, discussed their son’s death from a methadone overdose in North
Carolina. Id. at 75 (Page ID #1093). “[A] board-certified internal medicine physician,” medical-
school professor, and associate chief of staff at local VA hospital, id. at 60–62 (Page ID #1078–
80), meanwhile, castigated Kester’s track record and summed up his objections bluntly:
“Mr. Kester is asking the State to provide a certificate for him to open a pill mill that will hurt far
more people than it helps,” id. at 70 (Page ID #1088).
More spoke against the proposal than spoke for it. Those speaking against the proposal
included a person named Jerry Taylor, speaking “on behalf of Johnson City,” id. at 42 (Page ID
#1060), as well as Johnson City’s mayor, who was also a practicing oral surgeon, id. at 53, 56
(Page ID #1070, 1073). None of the speakers said anything derogatory about people struggling
with addiction problems or denied the need for effective treatment of opioid addiction.
On July 8, 2013, approximately two weeks after the HSDA board voted to deny TCH’s
application, TCH filed Tri-Cities II. In addition to raising again its zoning claims against
Johnson City from Tri-Cities I, TCH this time also sued the HSDA, challenging both the statute
governing the CON process and the HSDA’s denial of TCH’s CON application, which TCH
7
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
alleged constituted both intentional discrimination and a failure to make a reasonable
modification.11 TCH II R. 1 (Compl.) (Page ID #3–4, 59–71).
C. TCH’s Administrative Appeal and Tri-Cities III
Later that July, TCH appealed the HSDA’s denial of its CON application through the
state’s administrative process. See TCH III R. 15-12 (Order Revoking Permission at 1) (Page ID
#548). TCH argued that its pending federal lawsuit, however, had the potential to render the
state administrative process unnecessary, and so Dunlap asked ALJ Kim Summers (another
defendant-appellee here), for a stay, which ALJ Summers granted. Id. at 2 (Page ID #549). ALJ
Summers scheduled conference calls for the parties to check in, and Dunlap requested another
stay in September, which ALJ Summers again granted. Id.
On January 8, with another conference call looming, ALJ Summers emailed the parties
and asked if there were “any new developments to report.” TCH III R. 69-6 (Email Chain) (Page
ID #2154). Dunlap responded: “No new developments. Motion for Summary Judgement [sic]
and Motions to Dismiss are pending. I would suggest another 60 day stay in our matter.” Id.
The problem, as others saw it, was that there was something to report: just a few weeks
before, the magistrate judge to whom Tri-Cities II had been assigned had issued a scathing order,
chastising TCH for “a transparent attempt to explain away rather obvious judge-shopping” and
an argument that trod “perilously close to being offensive,” TCH III R. 31-5, Ex. F (Magistrate’s
Order at 2–4) (Page ID #1293–95), while suggesting that the district court would very likely
11
TCH also raised state-law claims, TCH II R. 1 (Compl.) (Page ID #67–70), which are
not at issue on appeal.
8
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
deem Tri-Cities II subject to the same ripeness problems that had felled Tri-Cities I, id. at 5–6
(Page ID #1296–97). The HSDA’s general counsel, Christoffersen, soon emailed ALJ Summers
to dispute Dunlap’s account, TCH III R. 69-6 (Email Chain) (Page ID #2154), and subsequently
filed a motion to set a hearing in the administrative appeal, attaching the magistrate judge’s
order, see TCH III R. 31-5 (Motion to Set Hr’g) (Page ID #1226–28, 1292–97).
A few days later, Dunlap filed an objection to the HSDA’s motion. TCH III R. 15-10
(Objection to Motion to Set Hr’g at 1, 21) (Page ID #521, 541). In its opening section, he wrote:
In filing its Motion to Set Hearing, HSDA is attempting to make this
tribunal the “fixer” by illegally providing HSDA cover in what amounts to its
blatant violations of the [ADA]. HSDA is facing a virtually certain loss in federal
court . . . for its blatant violations of the ADA . . . . HSDA also faces a pending
investigation, and a seemingly imminent enforcement action against it, by the
United States Department of Justice. Petitioner suggests that HSDA would love
nothing more than to have this tribunal “enter the fight,” create a diversion, and
take the heat off HSDA and somehow “fix” HSDA’s unfixable position. . . .
In addition, if this tribunal does “take HSDA’s bait” and takes any action
to decide this appeal before a federal court or DOJ has spoken on this case,
including scheduling a hearing, Petitioner respectfully indicates that it will have
no choice but to join Your Honor, in an official capacity, and this tribunal, as
defendants in the pending federal court action.
Finally, Petitioner respectfully submits that, under the ADA, Your Honor
and this tribunal are required to offer Petitioner a reasonable modification to allow
the CON to be issued. Petition [sic] respectfully submits that Your Honor’s and
this tribunal’s continuing failure to do this creates a cause of action that Petitioner
may bring against Your Honor, and the tribunal itself, and may well move DOJ to
include Your Honor and this tribunal as respondents in an ADA enforcement
action.
Id. at 3–4 (Page ID #523–24).
On March 14, 2014, ALJ Summers revoked Dunlap’s permission to appear pro hac vice.
TCH III R. 15-12 (Order Revoking Permission at 1, 4) (Page ID #548, 551). In her order, ALJ
9
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
Summers detailed Dunlap’s conduct and concluded that his “coercion and misrepresentations are
a flagrant attempt to improperly influence a judge in violation of Rules 3.3 [candor],
3.5 [improper influence], and 8.4 [misconduct] of the Tennessee Rules of Professional Conduct,
as well as Tenn. Code Ann. § 39-14-112 [extortion].” Id. at 10 (Page ID #557).
That revocation prompted TCH’s third federal lawsuit, Tri-Cities Holdings LLC v. Tenn.
Admin. Procedures Div. et al. (“Tri-Cities III”), No. 2:14-cv-233, which is the other case in this
consolidated appeal (No. 17-5628). In Tri-Cities III, TCH named as defendants ALJ Summers,
DMHSAS, and a range of related state actors and entities (all of whom are defendants-appellees
here). TCH alleged that all involved had violated the ADA and RA by failing to make
reasonable modifications, and it alleged further that ALJ Summers and related state entities had
violated those statutes by retaliating against Dunlap in revoking his pro hac vice admission.12
TCH III R. 1 (Compl.) (Page ID #1, 4, 40–57). The district court stayed that case on October 28
while TCH pressed various appeals. TCH III R. 50 (Dist. Ct. Order) (Page ID #1399–1400).
D. TCH’s Appeals and Summary Judgment in the District Court
None of TCH’s appeals was fruitful. The Tennessee Chancery Court affirmed ALJ
Summers’s revocation of Dunlap’s admission. TCH III R. 51 (Chancery Ct. Op. at 1, 27) (Page
ID #1401, 1427). The Tennessee Court of Appeals affirmed the Chancery Court’s ruling, Tri-
Cities Holdings LLC v. Tenn. Health Servs. & Dev. Agency, No. M2015-00058-COA-R3-CV,
12
TCH also raised federal and state due-process claims that it later dismissed. TCH III R.
87 (Notice of Dismissal at 1–2) (Page ID #2462–63). Those claims are thus not at issue here.
10
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
2016 WL 721067 (Tenn. Ct. App. Feb. 22, 2016), and the Tennessee Supreme Court denied
TCH permission to appeal that affirmance, TCH III R. 58 (Order at 1) (Page ID #1592).
Our court, meanwhile, ruled that we lacked jurisdiction to review the denial of TCH’s
motion for partial summary judgment in Tri-Cities II. Tri-Cities Holdings LLC v. Tenn. Health
Servs. & Dev. Agency, 598 F. App’x 404, 408 (6th Cir. 2015). We also affirmed denial of
TCH’s motion for a preliminary injunction in that case, noting that the district court had deemed
TCH’s claims unripe and concluding that TCH had “not shown any error in that conclusion.” Id.
Ultimately, on August 15, 2016, TCH moved to dismiss its administrative appeal
“because it was unable to obtain an extension of its lease option” for its proposed methadone-
clinic site and could not find any “other financially viable locations for a clinic.” TCH III R. 72-
2 (Pet.’s Mot. to Dismiss Appeal at 1) (Page ID #2282). Around the same time, the HSDA
granted a CON for “a joint venture owned equally by Mountain States Health Alliance and East
Tennessee State University Research Foundation” to establish a methadone clinic in the Johnson
City area. TCH II R. 214-9 (Tr. of MSHA CON Application Hr’g at 8, 82) (Page ID #6057,
6131). The parties agree that this new clinic opened in September 2017. TCH II Appellants’ Br.
at 5 n.4; TCH II Johnson City Appellees’ Br. at 49.
In October 2016, TCH appeared before the district court in Tri-Cities II, at which point
the district court addressed a motion by TCH to file a third amended complaint and a motion
from a third Jane Doe plaintiff to intervene. R. 251 (Hr’g Tr. at 3, 12) (Page ID #6965, 6974).
The district court ultimately denied both motions, and it also lifted stays that been granted in
both Tri-Cities II and Tri-Cities III. R. 205 (Dist. Ct. Order) (Page ID #5447); TCH III R. 62
11
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
(Dist. Ct. Order) (Page ID #1607). The parties then moved for summary judgment in both cases,
and the district court granted summary judgment for all defendants in each. TCH III R. 86 (Dist.
Ct. Op. & Order) (Page ID #2433–34); TCH II R. 246 (Dist Ct. Op. & Order at 1–3) (Page ID
#6878–80). These now-consolidated appeals followed.
II. DISCUSSION
On appeal, TCH argues that the following claims of intentional discrimination13 under the
ADA and RA ought to have survived summary judgment: (1) that Johnson City imposed a
facially invalid ordinance and sought to exclude methadone clinics, including TCH’s proposed
clinic, prior to the CON hearing; (2) that Johnson City discriminated against TCH by attempting
to prevent it from securing a CON; (3) that the HSDA discriminated against TCH in denying it a
CON; (4) that the Tennessee statute requiring methadone clinics to provide special notice to local
officeholders is facially discriminatory; (5) that all defendants failed to provide TCH with a
reasonable modification of existing policies; and (6) that ALJ Summers and the related
Tennessee defendants retaliated against TCH for engaging in protected activity by revoking
Dunlap’s pro hac vice admission. TCH also argues (7) that the district court erred in denying its
motion to file a third amended complaint and Jane Doe #3’s motion to intervene. For the reasons
that follow, we AFFIRM the district court on all grounds.
13
TCH also adverts in its briefing to “disparate impact of discrimination.” TCH II
Appellants’ Br. at 18. But it did not make this argument below, and we therefore “decline[] to
consider on appeal arguments that were not presented to the district court.” Fawkes v.
JPMorgan Chase Bank, N.A., 645 F. App’x 453, 454 (6th Cir. 2016) (citation omitted).
12
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
A. Standard of Review
“We review de novo a district court’s grant of summary judgment.” Williams v. AT&T
Mobility Servs. LLC, 847 F.3d 384, 391 (6th Cir. 2017). Summary judgment is to be granted “if
the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). “A genuine dispute of material
fact exists ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.’” Williams, 847 F.3d at 391 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)). “In reviewing the district court’s decision to grant summary judgment, we must view
all evidence in the light most favorable to the nonmoving party.” Kleiber v. Honda of Am. Mfg.,
Inc., 485 F.3d 862, 868 (6th Cir. 2007) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986)).
B. The ADA and the RA
“Title II of the ADA mandates that, ‘no qualified individual with a disability shall, by
reason of such disability, be excluded from participation in or be denied the benefits of the
services, programs, or activities of a public entity, or be subjected to discrimination by any such
entity.’” Johnson v. City of Saline, 151 F.3d 564, 569 (6th Cir. 1998) (quoting 42 U.S.C.
§ 12132). “Section 504 of the Rehabilitation Act provides that ‘[n]o otherwise qualified
individual with a disability . . . shall, solely by reason of her or his disability, be excluded from
the participation in, be denied the benefits of, or be subjected to discrimination under any
program or activity receiving Federal financial assistance.’” McPherson v. Michigan High Sch.
Athletic Ass’n, 119 F.3d 453, 459 (6th Cir. 1997) (en banc) (quoting 29 U.S.C. § 794(a)). “[T]he
13
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
two statutes are quite similar in purpose and scope,” such that “[t]he analysis of claims under the
[ADA] roughly parallels those brought under the [RA].” Id. at 459–60 (citation omitted).
Where, as here, the “differences in the two statutes are not implicated . . . in the issues presented
in [a] case”—or, indeed, raised by the parties at all—“we need not address them.” See id. at 460.
Under the ADA, the term “public entity” is a broad one: it encompasses “any State or
local government,” as well as “any department, agency, special purpose district, or other
instrumentality of a State or States or local government.” 42 U.S.C. § 12131(1)(A)–(B).
Discrimination by a public entity against a qualified individual “must relate to services,
programs, or activities,” a definition that we have understood to “encompass[] virtually
everything that a public entity does,” Johnson, 151 F.3d at 569, while noting that it is
nevertheless “subject . . . to the bounds of reasonableness,” id. at 571. Under regulations
promulgated by the Attorney General pursuant to Congress’s instructions, see Olmstead v. L.C.
ex rel. Zimring, 527 U.S. 581, 591 (1999); see also 42 U.S.C. § 12134(a), public entities must
also “make reasonable modifications in policies, practices, or procedures when the modifications
are necessary to avoid discrimination on the basis of disability, unless the public entity can
demonstrate that making the modifications would fundamentally alter the nature of the service,
program, or activity,” 28 C.F.R. § 35.130(b)(7)(i).
Claims of intentional discrimination under the ADA follow “the familiar burden-shifting
analysis established by [McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)].” Anderson
v. City of Blue Ash, 798 F.3d 338, 356 (6th Cir. 2015) (punctuation omitted) (quoting Turner v.
City of Englewood, 195 F. App’x 346, 353 (6th Cir. 2006)). As we have explained:
14
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
To establish a prima facie case of intentional discrimination under Title II
of the ADA, a plaintiff must show that: (1) she has a disability; (2) she is
otherwise qualified; and (3) she was being excluded from participation in, denied
the benefits of, or subjected to discrimination under the program because of her
disability. In other words, the plaintiff must show that the defendant took action
because of the plaintiff’s disability, i.e., the plaintiff must present evidence that
animus against the protected group was a significant factor in the position taken
by the municipal decision-makers themselves or by those to whom the decision-
makers were knowingly responsive. Further, the plaintiff must show that the
discrimination was intentionally directed toward him or her in particular.
Id. at 357 (footnote, citations, and quotation marks omitted). “Once a plaintiff establishes a
prima facie case of discrimination, the defendant ‘must then offer a legitimate, nondiscriminatory
reason for its’ challenged action.” Id. (quoting Sjostrand v. Ohio State Univ., 750 F.3d 596, 599
(6th Cir. 2014)). If the defendant produces such an explanation, the plaintiff “must then present
evidence allowing a jury to find that the [defendant’s] explanation is a pretext for unlawful
discrimination.” Id. (quoting Sjostrand, 750 F.3d at 599).
C. Issue 1: Issue Preclusion and the Tri-Cities I Claims
The first cluster of claims on which TCH appeals matches its claims from Tri-Cities I:
essentially, that Johnson City’s zoning regulations in effect at the time of its CON application
were facially discriminatory and reflected a broader effort by Johnson City to exclude TCH (and
other, similar facilities) from its city limits. See TCH II Appellants’ Br. at 2–3, 6–7, 20–22.
Johnson City argues (as the district court held) that the legal question of whether these claims are
ripe for adjudication is subject to issue preclusion based on Tri-Cities I. See TCH II Johnson
City Appellees’ Br. at 11–12; TCH II R. 246 (Dist. Ct. Op. & Order at 1-15) (Page ID #6878–
92). Inexplicably, TCH barely mentions the district court’s issue-preclusion ruling and offers
15
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
essentially no legal argument as to why issue preclusion does not apply. See TCH II Appellants’
Br. at 22–23 (providing eight conclusory lines of text and citing one opinion as authority).
As we have repeatedly made clear, “addressing an issue on appeal ‘requires developed argument;
a party is required to do more than advert to an issue in a perfunctory manner.’” Puckett v.
Lexington-Fayette Urban Cty. Gov’t, 833 F.3d 590, 611 (6th Cir. 2016) (quoting Bolden v. City
of Euclid, 595 F. App’x 464, 468 (6th Cir. 2014)); see also, e.g., Gerboc v. ContextLogic, Inc.,
867 F.3d 675, 681–82 (6th Cir. 2017). TCH’s argument is indeed so perfunctory and
undeveloped as to be forfeited.
Regardless, however, Johnson City has the better of the dispute. As we have explained:
Issue preclusion, often referred to as collateral estoppel, “precludes relitigation of
issues of fact or law actually litigated and decided in a prior action between the
same parties and necessary to the judgment, even if decided as part of a different
claim or cause of action.” Four requirements must be met before issue preclusion
applies: “(1) the precise issue must have been raised and actually litigated in the
prior proceedings; (2) the determination of the issue must have been necessary to
the outcome of the prior proceedings; (3) the prior proceedings 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.”
Georgia-Pac. Consumer Prod. LP v. Four-U-Packaging, Inc., 701 F.3d 1093, 1098 (6th Cir.
2012) (citations omitted). Here, the question of whether TCH’s claims against Johnson City’s
zoning regulations and allegedly exclusionary posture toward methadone clinics were ripe was
clearly litigated during Tri-Cities I, and the resolution of that question was necessary to (indeed,
determined) the outcome of that case. See TCH II R. 19-1 (Tri-Cities I Dist. Ct. Op. & Order)
(Page ID #456–65). Those proceedings resulted in a final judgment dismissing the action on the
16
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
merits, TCH II R. 19-2 (Tri-Cities I J.) (Page ID #467), which TCH could have appealed but did
not. See Robert N. Clemens Tr. v. Morgan Stanley DW, Inc., 485 F.3d 840, 845–46 (6th Cir.
2007) (explaining that dismissal of an action constitutes a final and appealable order, in contrast
to dismissal only of a complaint, which would present only an opportunity to amend and refile).
And TCH had “a full and fair opportunity to litigate the issue,” Georgia-Pac. Consumer Prod.,
701 F.3d at 1098, in Tri-Cities I. Issue preclusion applies.
D. Issue 2: Johnson City’s Effect on the CON Process
TCH also argues that the district court erred in granting summary judgment on TCH’s
claims that Johnson City violated the ADA and RA by seeking to prevent TCH from obtaining a
CON, both at the CON hearing itself and by withholding zoning approval. See, e.g., TCH II
Appellants’ Br. at 2, 9, 11–12, 17–18. Though logically distinct from those governed by the
district court’s prior ripeness determination in Tri-Cities I, and thus not subject to issue
preclusion, TCH has arguably forfeited these arguments by failing to raise them in its
complaints. But even assuming for the sake of argument that TCH properly presented its
arguments to the district court through its pleadings at the summary-judgment stage, see Vencor,
Inc. v. Standard Life & Acc. Ins. Co., 317 F.3d 629, 641 n.11 (6th Cir. 2003); TCH II, R. 213
(Pls.’ Mem. in Support of Motion for Summary J. at 8–11) (Page ID #5518–21), summary
judgment was proper on the merits. That is because, to succeed in its intentional discrimination
claims, TCH must first (among other requirements) “present evidence that animus against the
protected group was a significant factor in the position taken by the municipal decision-makers
17
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
themselves or by those to whom the decision-makers were knowingly responsive.” Anderson,
798 F.3d at 357 (quoting Turner, 195 F. App’x at 353). It has not met this bar.
For one, Johnson City had a right under state law to participate in the CON hearing. See
Tenn. Code Ann. § 68-11-1624 (making clear that “a local governing body” may “participate in”
a CON hearing “and express support or opposition to the granting of a certificate of need to the
applicant”). The ADA, of course, trumps state law, see U.S. CONST. art. VI, cl. 2, and whether
such a rule itself violates the ADA is a separate question implicated below. But TCH’s
suggestion that Johnson City manifested animus by showing up to offer its opinion is clearly
vitiated by the fact that Johnson City was invited by statute to do exactly that.
TCH also maintains that Johnson City’s expression of these views violated the
“integration mandate” of Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999). TCH II
Appellants’ Br. at 11. But this authority does little to support TCH’s case. After all, Olmstead
does not require that a locality support every single application for necessary permits by a
corporation seeking to serve disabled persons. Rather, it simply holds that “placement of persons
with mental disabilities in community settings rather than in institutions” is required under the
ADA “when the State’s treatment professionals have determined that community placement is
appropriate, the transfer from institutional care to a less restrictive setting is not opposed by the
affected individual, and the placement can be reasonably accommodated, taking into account the
resources available to the State and the needs of others with mental disabilities.” Olmstead,
527 U.S. at 587. TCH has not put forward nearly enough evidence to create a genuine issue of
material fact as to whether Johnson City has run afoul of that more nuanced rule.
18
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
Meanwhile, TCH’s argument that “state entities enjoy no Free Speech Clause Rights,”
see TCH II Appellants’ Br. at 18, is at best highly misleading, as even the portion of a Supreme
Court opinion that TCH cites makes clear. See Columbia Broad. Sys., Inc. v. Democratic Nat’l
Comm., 412 U.S. 94, 139 & n.7 (1973) (Stewart, J., concurring); see also Walker v. Sons of
Confederate Veterans, Inc., 135 S. Ct. 2239, 2246 (2015) (“[A]s a general matter, when the
government speaks it is entitled to promote a program, to espouse a policy, or to take a
position.”); Pleasant Grove City v. Summum, 555 U.S. 460, 467 (2009) (“A government entity
has the right to ‘speak for itself.’” (citation omitted)). Johnson City does not have a right to
discriminate, to be sure, but it did have a right to express its nondiscriminatory views.
Nor does Johnson City’s zoning ordinance appear to have been intended to affect (nor
does it appear to have affected) TCH’s CON application itself. As noted above, Christoffersen
urged HSDA board members not to take zoning into account in determining their votes, TCH III
R. 31-3 (Tr. of CON Application Hr’g at 8) (Page ID #1026), and there is no evidence in the
record to the contrary. Similarly, TCH’s claim that “TDMHSAS issued a negative report that
TCH had only ‘possibly established economic feasibility,’ in part because Johnson City had
refused TCH zoning approval based on its discriminatory zoning ordinance,” TCH II Appellants’
Br. at 9 (quoting TCH II R. 214-4 (Review of CON Application at 5–7) (Page ID #6012–14)), is
at best highly confused. First of all, “economic feasibility” was TCH’s best score in the
DMHSAS report: DMHSAS rated that factor “possibly . . . established,” whereas it found both
need and “contribut[ion] to the orderly development of healthcare” lacking. See TCH II R. 214-4
(Review of CON Application at 5–7) (Page ID #6012–14). So it is odd for TCH to suggest that
19
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
any harm to its economic-feasibility rating made a difference, when two other factors that it
neglects to mention revealed bigger red flags. But even more importantly, the reason that
DMHSAS found TCH’s economic feasibility only possibly established was not because of
zoning, but rather because TCH’s application was missing “requested documentation.” Id. at 5
(Page ID #6012). And while the DMHSAS report does mention the zoning issue under “orderly
development of healthcare,” all that it observes there is that TCH has not yet “provide[d] a
current letter from the City of Johnson City that the proposed site meets zoning requirements”
and that “the Applicant has requested zoning variances.” Id. at 7 (Page ID #6014). While doing
so, the report also notes a bevy of other problems, including TCH’s lack of “existing agreements
and affiliations,” its lack of “letters of support” from “local universities and professional
societies,” the lack of information about whether it can meet its proposed “staffing
requirements,” and the lack of clarity from its responses as to “whether [TCH] is fully aware of
and understands the complexity of all federal, Tennessee, and local laws, regulations, rules, and
ordinances” involved in its undertaking. Id. at 6–7 (Page ID #6013–14). In short, the report
does not help TCH’s case.
Perhaps most importantly, the record of the CON hearing itself does not disclose the
“wide-spread community animus,” TCH III Appellants’ Br. at 12, against opioid-addicted
persons that TCH claims. Such cases certainly do exist: in MX Group, Inc. v. City of Covington,
293 F.3d 326 (6th Cir. 2002), for example, we affirmed a judgment for a methadone clinic after
it had its zoning permit revoked following substantial and suspicious public opposition—
including an assistant police chief testifying, without supporting evidence, about supposed crime
20
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
risks associated with methadone clinics, id. at 329–30—and where, after that, the city passed a
zoning amendment that “completely foreclosed” the clinic’s “opportunity to locate in the city,”
id. at 331. But that is not this case. Instead, as is already clear, the record here is devoid of
animus against people struggling with addiction, and instead principally reflects two kinds of
permissible skepticism unrelated to disability: first, skepticism that methadone is better than
buprenorphine (which was already plentifully available), and second, skepticism about Kester
and the type of operation that he was likely to lead.14 We express no view on whether either vein
of skepticism was ultimately correct; what matters is that there is no evidence that either was
motivated by (or, for that matter, used to conceal) animus against the protected group.15
TCH seeks to avoid this conclusion by picking out two quotes from the hearing that,
divorced from context, understandably give pause. The first quote is an HSDA board member’s
having characterized Johnson City’s response as “staunch opposition in this particular area to
this kind of treatment.” See TCH III R. 31-3 (Tr. of CON Application Hr’g at 186) (Page ID
#1204). But closer inspection belies the significance that TCH ascribes to this quote. For one,
the quote clearly refers to an apparent preference for a different kind of treatment—
buprenorphine—which, as already discussed, is hardly a smoking gun for animus. And
14
Kester himself seems to have recognized this trend in the testimony. See TCH III R.
31-3 (Tr. of CON Application Hr’g at 174) (Page ID #174) (stating that he had refrained from
defending himself against charges of “being a terrible, rotten person and a terrible, rotten
operator”).
15
The former strain of skepticism, we note, is at least empirically justifiable. See
Andraka-Christou, supra, at 221, 224; Gordon & Gordon, supra, at 10–11 & nn. 50, 54; Risk for
Overdose, supra, at 493–94. And the latter is at least consistent with the fact that there now is,
as TCH acknowledges, a methadone clinic in the Johnson City area. See TCH II R. 214-9 (Tr. of
MSHA CON Application Hr’g at 82) (Page ID #6131); TCH II Appellants’ Br. at 5 n.4.
21
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
moreover, TCH’s quotation omits the end of the sentence, which, reproduced in full, reads:
“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.” Id. at 186 (Page ID #1204). As likewise
discussed, the record amply supports the accuracy of this second clause.
The other snippet that TCH carves out is even more misleading. “At the CON hearing,”
TCH states in its brief, “a Johnson City Press news story was read aloud quoting a Johnson City
Commissioner, saying ‘We want the applicant to get the message methadone clinics are not
welcome in Johnson City.’” TCH II Appellants’ Br. at 10; TCH III Appellants’ Br. at 12. If this
were in fact telling evidence, there might well be a genuine dispute of material fact. But, for one,
the full quote makes clear that the news story in question was more than a decade old and
unrelated to the CON application at issue. See TCH III R. 31-3 (Tr. of CON Application Hr’g at
84–85) (Page ID #1102–03). Second, the attendee who chose to read this outdated and largely
irrelevant quote into the record was not a city participant or disinterested onlooker, but rather
Kester himself. Id. A plaintiff (or, in this case, its agent and partial owner) cannot avert
summary judgment by “manufactur[ing] a genuine issue of material fact” in this way. See
Brenneman v. MedCentral Health Sys., 366 F.3d 412, 420 (6th Cir. 2004). This claim fails.
E. Issue 3: The HSDA’s Denial of a CON
In light of the foregoing, the question of whether the HSDA violated the ADA in denying
TCH’s CON application can be dealt with more briefly. The public benefit that TCH sought
here was a CON. In making available a public benefit, like a CON, state actors are not required
to ensure that each applicant accrues purely “equal results from the provision of the benefit.”
22
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
See Jones v. City of Monroe, 341 F.3d 474, 479 (6th Cir. 2003); see also Alexander v. Choate,
469 U.S. 287, 302–03 (1985). Rather, as noted above, it is TCH’s burden to “present evidence
that animus against the protected group was a significant factor in the” board’s decision to
withhold a CON. See Anderson, 798 F.3d at 357 (quoting Turner, 195 F. App’x at 353).
As the preceding discussion helps make clear, TCH has failed to present such evidence.
None of the participants in the CON meeting, let alone any of the HSDA board members,
expressed animus against disabled persons or the entities that serve them. Rather, as already
discussed, the participants primarily expressed skepticism about methadone as a treatment as
compared against other types of already-available treatments (chiefly buprenorphine), and
skepticism about Kester and his business model. Nor does the DMHSAS report on which the
board relied reveal any discriminatory animus, but rather a sober, lengthy analysis of the
relevant, statutorily prescribed factors. See Tenn. Code Ann. §§ 68-11-1608(a), -1609(b), -1614;
TCH III R. 15-1 (Review of CON Application) (Page ID #130–47).
TCH’s allegations of discriminatory intent on HSDA’s part are also difficult to square
with Kester’s own declaration that other, similar clinics had received CONs and were “operating
in other parts of Tennessee,” TCH II R. 46 (Kester Decl. at 3 ¶ 16) (Page ID #3010), as well as
with the HSDA’s having granted a CON for a methadone clinic in the Johnson City area
specifically, TCH II R. 214-9 (Tr. of MSHA CON Application Hr’g at 8, 82) (Page ID #6057,
6131). All of which makes sense, given that the HSDA is a statewide board, quite possibly
created to avoid the not-in-my-backyard-type dangers that more local review could conceivably
invite.
23
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
Even if TCH could make out a prima facie case, it would fail at step three of the
McDonnell Douglas framework for the reasons just discussed. The reasons provided by the
DMHSAS and the HSDA members plainly qualify as “legitimate” and “nondiscriminatory,” and
TCH has wholly failed to “present evidence allowing a jury to find that the [defendants’]
explanation is a pretext for unlawful discrimination.” See Anderson, 798 F.3d at 357 (quoting
Sjostrand, 750 F.3d at 599). Summary judgment was correct here too.
F. Issue 4: The Tennessee Notice Rule
TCH also appeals the district court’s grant of summary judgment against its claims that
Tenn. Code Ann. § 68-11-1607(c)(9)(A)—the “Notice Rule” formerly codified at § 68-11-
1607(c)(3)—violates the ADA and RA. See TCH II Appellants’ Br. at 14–15. TCH argues that
this requirement burdens “applicants serving the disabled” (here, people addicted to opioids) and
“operates to galvanize local opposition to treatment for the disabled.” Id. at 6. The HSDA
argues instead that, as the district court held, the statute does “not impose any burden . . . [that]
would, in any way, disadvantage TCH in receiving a CON,” TCH II HSDA Appellees’ Br. at 17
(quoting R. 246 (Dist. Ct. Op. & Order at 23) (Page ID #6900)), and that nothing in the “current”
or “historical record” shows that the notice requirement generates the kind of vociferous
opposition that TCH asserts, TCH II HSDA Appellees’ Br. at 18–19.
Though it is a close case, we think that summary judgment was proper. To establish a
prima facie case, TCH must present evidence that disabled persons were “excluded from
participation in, denied the benefits of, or subjected to discrimination” by the statute. See
Anderson, 798 F.3d at 357. The scope of these protections is broad, but it is also “subject . . . to
24
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
the bounds of reasonableness.” Johnson, 151 F.3d at 571. We have accordingly ruled in the past
that a plaintiff lacked grounds for a claim under the ADA where any harm asserted was truly de
minimis. See Robinson v. Corr. Corp. of Am., 14 F. App’x 382, 383 (6th Cir. 2001).
This is a low bar, but it is one that TCH has failed to meet given the evidence that it has
offered here. The notice requirement does not add cognizably to the burdens that all CON
applicants face, given that nothing but bare notice is required, see Tenn. Code Ann. §68-11-
1607(9)(A), and all applicants must file “letter[s] of intent” and then publish these letters “in a
newspaper of general circulation in the proposed service area of the project” anyway, id. § 68-
11-1607(c)(1). Any additional burden, in other words, appears to be so vanishingly small that
we cannot say that there was, in fact, any kind of exclusion, deprivation, or discrimination.
In so deciding, we pause to note how limited our ruling here is. After all, classifications
that appear to treat people with disabilities differently raise serious concerns under the ADA and
RA. See 42 U.S.C. § 12132; Sch. Bd. of Nassau Cty. v. Arline, 480 U.S. 273, 287 (1987) (noting
the RA’s “goal of protecting handicapped individuals from deprivations based on prejudice,
stereotypes, or unfounded fear”). Were the differences here more extreme, summary judgment
could well be inappropriate. Cf. New Directions Treatment Servs. v. City of Reading, 490 F.3d
293, 304–05 (3d Cir. 2007) (ruling that zoning law seriously restricting placement of methadone
clinics violates ADA); MX Grp., 293 F.3d at 345 (agreeing that a “blanket prohibition of all
methadone clinics from [an] entire city is discriminatory on its face”); Potomac Grp. Home
Corp. v. Montgomery Cty., 823 F. Supp. 1285, 1296 (D. Md. 1993) (deeming facially invalid,
under the Fair Housing Amendments Act, a notice requirement directing any “prospective
25
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
provider of group home services to the elderly” both to “notify neighbors and civic
organizations” about future disabled residents and to “invite [those] neighbors to comment”).
Moreover, our ruling is especially narrow because TCH has failed to present any
evidence that the notice provision at issue did or generally does operate to generate opprobrium.
While it is conceivable that such a provision could operate to generate discriminatory opposition,
the record here is devoid of any such evidence. And uncontroverted evidence in the record
actually indicates that TCH’s assertions are “not supported by the historical record,” which
instead “reveals instances in which public officials neither supported nor opposed such
applications,” and “at least two . . . applications [that] were supported by elected public officials
to whom the applicants were required to provide notice.” R. 90 (Hill Decl. at 3 ¶ 7) (Page ID
#3407). On the record that TCH developed here, with all justifiable inferences made in TCH’s
favor, we affirm the district court’s grant of summary judgment.
G. Issue 5: Failure to Make a Reasonable Modification
TCH also appeals the district court’s rejection of TCH’s argument that it was denied
reasonable modifications of existing policies that would have enabled its CON application to be
granted. See TCH II Appellants’ Br. at 25–27; TCH III Appellants’ Br. at 16. It levels this
argument in essentially every possible direction: at Johnson City for not modifying its zoning
regulations; at the HSDA for not modifying its application of the CON criteria; at DMHSAS for
not modifying its interpretation of the CON criteria; and even at ALJ Summers (and related state
defendants) for not modifying her adjudication of TCH’s claims. TCH also argues that these
26
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
various defendants impermissibly failed to provide an explanation of why such a modification
was not required. See TCH II Appellants’ Br. at 27; TCH III Appellants’ Br. at 17–22.
The Johnson City branch of this multidirectional claim can be dealt with quickly, in that
it is not analytically distinct from the issues already deemed unripe (and then not appealed) in
Tri-Cities I. See TCH II R. 19-1 (Tri-Cities I Dist. Ct. Op. & Order) (Page ID #456–65).
Because that prior determination has issue preclusive effect, this branch of TCH’s claim fails.
TCH’s claims against DMHSAS and ALJ Summers can also be dealt with fairly quickly.
As noted above, discrimination by a public entity against a qualified individual “must relate to
services, programs, or activities.” Johnson, 151 F.3d at 569. While we have understood that
“phrase” to “encompass[] virtually everything that a public entity does,” id., it does not cover
everything that is in any way related to a given government function, because the requirement
itself is “subject . . . to the bounds of reasonableness.” See id. at 571. Thus, the scope of a
benefit cannot be so “amorphous” as to sweep in protection against all possible outcomes, see
Choate, 469 U.S. at 303, or liability for all possible government actors, cf. Bowers v. Nat’l
Collegiate Athletic Ass’n, 9 F. Supp. 2d 460, 485 (D.N.J. 1998) (noting that “it would be odd to
saddle someone with liability for a certain discriminatory condition . . . when it is not that person
who manages, controls, or regulates . . . that particular condition” and questioning “what relief
could [even] be obtained from someone who has no power to effect a remedy for the violation”).
Here, DMHSAS and ALJ Summers are not responsible for granting or denying CON
applications. Rather, they are responsible, respectively, for preparing a report for the HSDA that
checks a CON application’s claims and evaluates that application in light of statutorily
27
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
determined factors, see Tenn. Code Ann. §§ 68-11-1608(a), -1609(b), -1614; TCH III R. 15-1
(Review of CON Application) (Page ID #130–47), and for adjudicating contested CON
application decisions, see Tenn. Code Ann. § 68-11-1610. While these defendants were
certainly required to discharge those responsibilities in a nondiscriminatory fashion, they were
not in charge of the CON application program itself. As a matter of law, therefore, they were not
responsible for providing a reasonable modification to that program.16
That leaves the HSDA itself, which is responsible for granting or denying CON
applications. As noted above, public entities must “make reasonable modifications in policies,
practices, or procedures when the modifications are necessary to avoid discrimination on the
basis of disability, unless the public entity can demonstrate that making the modifications would
fundamentally alter the nature of the service, program, or activity.” 28 C.F.R. § 35.130(b)(7)(i);
see also, e.g., Jones, 341 F.3d at 480. “The public entity bears the burden of proving that the
accommodation would fundamentally alter the program.”17 Jones, 341 F.3d at 480.
“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
16
ALJ Summers is also, as the state defendants note, TCH III Appellees’ Br. at 20 n.12,
absolved of any damages for another reason: judicial immunity. See Mireles v. Waco, 502 U.S.
9, 11–12 (1991); Dixon v. Clem, 492 F.3d 665, 674 (6th Cir. 2007).
17
TCH’s argument that the state defendants have run afoul of this rule by failing to offer
“specific facts showing any costs of a modification or their rules,” TCH II Appellants’ Br. at 28,
misunderstands what we have required of defendants. It is true, to be sure, that a district court
errs if, at a pre-discovery stage, it “merely accept[s] [a] defendant’s affirmative defense without
requiring facts and evidence to support it.” Hindel v. Husted, 875 F.3d 344, 347–48 (6th Cir.
2017). But here at summary judgment we have a more-than-ample record to which to refer,
particularly given that the question of whether the HSDA should be required to adjust the CON
criteria is more abstract than a “typically fact-based” case. See id. at 347.
28
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
behind the rule that it would be a fundamental and unreasonable change.’” Id. (quoting Dadian
v. Village of Wilmette, 269 F.3d 831, 838–39 (7th Cir. 2001)). Accordingly, in a case in which a
city had provided free “all-day and one-hour parking in specific locations” to encourage
“downtown shopping and other downtown business activities,” id. at 477–78, we ruled that a
resident with a disability was not denied a reasonable modification when the city declined to
allow her to park all day at one of the one-hour spots near her office, id. 480. That was because,
we explained, “[b]y its very nature, the benefit of one-hour free public parking cannot be altered
to permit disabled individuals to park all day without jeopardizing the availability of spaces to
other disabled and nondisabled individuals,” which would in turn vitiate “the rule itself.” Id.
This logic applies with stronger force here. As directed by the Tennessee legislature, the
HSDA is responsible for applying neutral criteria to determine whether a given applicant is
qualified to operate its proposed facility. See Tenn. Code Ann. § 68-11-1609. By their very
nature, neither these criteria nor their application can be altered to provide a waiver to TCH
without jeopardizing Tennessee’s interest in ensuring that healthcare institutions meet the non-
discriminatory qualifications that its legislators and regulators have set. To require the HSDA or
the state itself to give up its interest in ensuring that those qualifications are met by each aspiring
provider would surely impose a fundamental alteration. See Jones, 341 F.3d at 480.
Moreover, waiver is especially likely to impose a fundamental alteration when the
question of whether to grant such a waiver would require complex, “case-by-case assessments.”
See McPherson, 119 F.3d at 462; see also Sandison v. Michigan High Sch. Athletic Ass’n,
64 F.3d 1026, 1035 (6th Cir. 1995). Thus, where nineteen-year-old students with learning
29
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
disabilities sought waiver of the state high school athletic association’s age requirement,
Sandison, 64 F.3d at 1028, we reasoned that waiver of the age requirement would
“fundamentally alter[]” that rule by vitiating its ability to ensure fair competition, id. at 1035.
Referencing the possibility that there would be no fundamental alteration because the plaintiffs
were not “were not ‘star’ players,” id. at 1029, we reasoned that it would be “an undue burden”
to ask an athletic association to assess whether a particular candidate’s “average athletic skills
. . . would . . . fundamentally alter the program,” given the number of complex variables
involved. Id. at 1035. “It is unreasonable,” we explained, “to call upon coaches and physicians
to make these near-impossible determinations.” Id.; see also McPherson, 119 F.3d at 462.
Again, the logic of those precedents applies with stronger force here. The HSDA is not
only responsible for deciding whether TCH qualifies for a CON, but also for deciding whether a
host of applicants across the State of Tennessee qualify for CONs. Even if TCH, as it has
steadfastly maintained, is worthy of a CON in some abstract sense that could be honored by
adjusting the CON criteria, TCH offers no answer to how the HSDA ought to determine which
CON applicants deserve to have the CON criteria adjusted in their favor and which do not. “It is
unreasonable to call upon [the HSDA] to make these near-impossible determinations.”
Sandison, 64 F.3d at 1035. We affirm summary judgment on this set of issues as well.
30
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
H. Issue 6: Retaliation for Engaging in Protected Activity
TCH presses one more charge under the ADA and RA on appeal: that ALJ Summers
retaliated in violation of these statutes18 by revoking Dunlap’s pro hac vice admission. TCH III
Appellants’ Br. at 26–29. The state defendants argue that the district court was correct to grant
summary judgment to them for two independently sufficient reasons: first, because the issue of
what caused the revocation is subject to preclusion based on TCH’s prior litigation in state court,
and second, because TCH cannot establish sufficient proof that TCH’s engaging in protected
activity motivated ALJ Summers’s adverse action. TCH III Appellees’ Br. at 24–29.
We need not decide whether issue preclusion resolves this claim in its entirety; even if it
does not, TCH has failed to provide sufficient proof of retaliatory motive. “Retaliation claims
are also analyzed under the McDonnell Douglas framework where, as here, there is no direct
evidence of retaliation.” Williams v. AT&T Mobility Servs. LLC, 847 F.3d 384, 396 (6th Cir.
2017). As we have explained in an analogous context:
The initial burden falls on Plaintiffs to present a prima facie case of retaliation.
That requires them to establish that: (1) they engaged in activity protected under
Section 504 and the ADA; (2) [the defendants] knew of this protected activity; (3)
[the defendants] then took adverse action against Plaintiffs; and (4) there was a
causal connection between the protected activity and the adverse action. “The
burden of establishing a prima facie case in a retaliation action is not onerous, but
one easily met.”
A.C. ex rel. J.C. v. Shelby Cty. Bd. of Educ., 711 F.3d 687, 697 (6th Cir. 2013) (quoting Nguyen
v. City of Cleveland, 229 F.3d 559, 563 (6th Cir. 2000)) (citations omitted). “If the plaintiff does
18
As with TCH’s preceding claims, in the absence of any argument against so doing and
in keeping with precedent, we analyze TCH’s retaliation claims under the ADA and RA in
tandem. See A.C. ex rel. J.C. v. Shelby Cty. Bd. of Educ., 711 F.3d 687, 696–97 (6th Cir. 2013).
31
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
so, then the burden shifts to the employer to articulate a legitimate, nondiscriminatory reason for
the adverse . . . action. The plaintiff must then show that the reason given . . . was actually a
pretext designed to mask retaliation.” Williams, 847 F.3d at 396 (citation omitted). “To
establish pretext, a plaintiff must demonstrate ‘both that the [defendant’s] proffered reason was
not the real reason for its action, and that the [defendant’s] real reason was unlawful.’” Id.
(quoting EEOC v. Ford Motor Co., 782 F.3d 753, 767 (6th Cir. 2015) (en banc)).
Regardless of whether TCH could make out a prima facie case, TCH cannot satisfy step
three of this analysis. At step two, the state defendants can clearly put forward a legitimate,
nondiscriminatory reason for Dunlap’s expulsion: Dunlap’s unprofessional behavior. That, after
all, was ALJ Summers’s stated reason for revoking Dunlap’s pro hac vice admission—that his
“coercion and misrepresentations” violated three Tennessee Rules of Professional Conduct as
well as, in her view, the Tennessee extortion statute. See TCH III R. 15-12 (Order Revoking
Permission to Appear Pro Hac Vice at 10) (Page ID #557). And the Tennessee Court of Appeals
ratified her conclusion regarding the three Tennessee Rules (while expressing no opinion on the
extortion statute), deeming ALJ Summers’s decision “reasonable” and “consistent with a proper
application of the controlling legal principles.” Tri-Cities Holdings, LLC v. Tenn. Health Servs.
& Dev. Agency, No. M2015-00058-COA-R3-CV, 2016 WL 721067, at *10 (Tenn. Ct. App. Feb.
22, 2016) (citation omitted), appeal denied (June 23, 2016). There is no cause to doubt this
conclusion in light of the record, and, in any event, the Tennessee Court of Appeals’s ruling that
ALJ Summers’s conclusions were reasonable does have issue-preclusive effect. See Georgia-
Pac. Consumer Prod., 701 F.3d at 1098. So TCH must show that this legitimate,
32
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
nondiscriminatory reason “was not the real reason for [ALJ Summers’s] action, and that [her]
real reason was” Dunlap’s pressing ADA and RA claims. See Ford Motor Co., 782 F.3d at 767.
Though plaintiffs can rely on “temporal proximity” to meet their “causal burden” at the
prima facie stage, see, e.g., A.C. ex rel. J.C., 711 F.3d at 699, “temporal proximity cannot be the
sole basis for finding pretext,” Ford Motor Co., 782 F.3d at 767 (quoting Donald v. Sybra, Inc.,
667 F.3d 757, 763 (6th Cir. 2012)). In other words, TCH must point to at least some other
evidence that Dunlap’s violations of the Tennessee Rules of Professional Conduct were “not the
real reason that” ALJ Summers revoked his pro hac vice admission, “and that unlawful
retaliation” for Dunlap’s pressing ADA claims “in fact was.” See id.
TCH has failed to do so. TCH rests its case essentially on one piece of ALJ Summers’s
justification: that Dunlap’s behavior amounted to extortion in violation of Tenn. Code Ann.
§ 39-14-112. See TCH III Appellants’ Br. at 26. This statement by ALJ Summers indeed
appears to have been overreaction, as the Tennessee appellate court’s decision seems to suggest
by negative inference. But the question here is not whether one of ALJ Summers’s justifications
was an overreaction, but rather whether ALJ Summers’s explanation as a whole was mere
pretext to conceal a retaliatory motive. See, e.g., Bryson v. Regis Corp., 498 F.3d 561, 572 (6th
Cir. 2007). Because TCH has failed to provide any other evidence that ALJ Summers’s
revocation of Dunlap’s admission had anything to do with retaliatory animus, summary
judgment was proper.
33
No. 17-5628/6046 Tri-Cities Holdings LLC et al. v. Tenn. Admin. Procedures Div. et al.
I. Issue 7: TCH’s Motion to File a Third Amended Complaint and Jane Doe #3’s Motion
to Intervene
That leaves one final set of procedural questions: was the district court wrong to deny
TCH’s motion to file a third amended complaint and Jane Doe #3’s motion to intervene? In one
conclusory paragraph, TCH says yes, citing only Federal Rule of Civil Procedure 15(a)(2).
“This perfunctory attempt at argument waives this claim.” Gerboc, 867 F.3d at 681–82.
III. CONCLUSION
The opioid-addiction crisis in the United States is serious, as are the mandates of the
ADA and RA. Fortunately, despite TCH’s claims to the contrary, the record in this case does not
indicate a lack of seriousness on the various defendants’ part with regard to either, particularly in
light of Johnson City’s revisions to its zoning code and the recent opening of a methadone clinic
in the area. Instead, the record reveals permissible skepticism with regard to TCH’s proposed
methods and with regard to TCH’s leadership. We AFFIRM the district court’s grant of
summary judgment to all defendants.
34