United States District Court, E.D. Tennessee, Greeneville
TRI-CITIES HOLDINGS LLC, JANE DOE NOS. 1-2, and JOHN DOE NOS. 1-6, Plaintiffs,
TENNESSEE ADMINISTRATIVE PROCEDURES DIVISION, D. KIM SUMMERS, in her official capacity as Administrative Law Judge, Tennessee Administrative Procedures Division, TENNESSEE DEPARTMENT OF STATE, TRE HARGETT, in his official capacity as Tennessee Secretary of State, TENNESSEE DEPARTMENT OF MENTAL HEALTH AND SUBSTANCE ABUSE SERVICES, and E. DOUGLAS VARNEY, COMMISSIONER, in his official capacity as Commissioner of the Tennessee Department of Mental Health and Substance Abuse Services, Defendants.
MEMORANDUM OPINION AND ORDER
RONNIE GREER, UNITED STATES DISTRICT JUDGE
matter is before the Court on the motion of plaintiffs,
Tri-Cities Holdings, LLC (“TCH”) and Jane Doe
Nos. 1-2, and John Doe Nos. 1-6 (“individual
plaintiffs”) (referred to collectively as
“plaintiffs”) for summary judgment, [Doc. 67].
The defendants have responded, [Doc. 80], and no reply has
been filed. Also pending is the motion of Tennessee
Administrative Procedures Division (“TAPD”), D.
Kim Summers (“ALJ Summers”), Tennessee Department
of State (“TDOS”), Tre Hargett, Tennessee
Secretary of State (“Hargett”), Tennessee
Department of Mental Health and Substance Abuse Services
(“TDMHSAS”), and E. Douglas Varney, Commissioner
of TDMHSAS (“Varney”) (referred to collectively
as “defendants”) for summary judgment, [Doc. 70].
Plaintiffs have responded, [Doc. 73], and defendants have
replied, [Doc. 81]. These cross-motions for summary judgment
are now ripe for disposition. For the reasons which follow,
plaintiffs' motion will be DENIED, defendants' motion
will be GRANTED, and the case DISMISSED WITH PREJUDICE.
Standard of Review
judgment is proper where the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
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).
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 (6th Cir. 2000). This Court's role is
limited to determining whether the case contains sufficient
evidence from which the finder of fact 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.
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.
the third of three lawsuits filed by plaintiffs arising out
of TCH's attempt to locate a methadone clinic in Johnson
City, Tennessee, and obtain from the Tennessee Health
Services and Development Agency (“THSDA”) a
statutorily required Certificate of Need (“CON”).
In their 63-page complaint, plaintiffs seek declaratory and
injunctive relief and monetary damages for defendants'
alleged violations of the Americans With Disabilities Act, 42
U.S.C. § 12101, et seq. (“ADA”) and
§ 504 of the Rehabilitation Act of 1973, 29 U.S.C.
a Georgia limited liability company which proposed to
establish an opioid treatment program (“OTP”)
(methadone clinic) in Johnson City, Tennessee. The individual
plaintiffs are opiate-addicted residents of the Johnson City
area and prospective clients of TCH's Johnson City OTP.
Tennessee state law requires a CON from the THSDA before an
entity can establish certain health care services, including
an OTP, in Tennessee, see generally Tenn. Code Ann.
§ 68-11-1601, et seq. (The Tennessee Health
Services and Planning Act of 2002), consistent with the
public policy of the 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.” Tenn. Code Ann. §
68-11-1603. Tennessee law also requires the entity operating
an OTP to obtain a license from the TDMHSAS. Tenn. Code Ann.
§ 33-2-403. As part of the CON process, TDMHSAS is
required to conduct an independent review of information
submitted to THSDA in the application to “ensure that
such information is accurate, complete, comprehensive,
timely, and relevant to the decision to be made by the
THSDA.” Tenn. Code Ann. § 68-11-1614(a) and (b).
filed an application for a CON to establish a non-residential
substitution-based treatment center for opiate addiction and
the initiation of opiate-addiction treatment at 4 Wesley
Court, Johnson City, Tennessee on March 8, 2013. [Doc. 15-2
at 1]. As required by Tennessee Code Annotated §
68-11-1607(c)(3), TCH gave notice of its application to
“state, county and local government officials,
including State Senator Rusty Crowe, State Representative
James (Micah) Van Huss, Washington County Mayor Dan Eldridge,
and City of Johnson City, City Mayor, Jeff Banys.”
[Doc. 15-2 at 15; see also letter of March 5, 2013,
Doc. 15-2 at 122].
the CON application was pending, TCH filed, on April 1, 2013,
the first of the three federal lawsuits related to its
efforts to establish its proposed methadone clinic in Johnson
City. See Tri-Cities Holdings, LLC, Jane Doe Nos. 1-2,
and John Doe Nos. 1-6 v. The City of Johnson City, Tennessee,
Johnson City Board of Commissioners, and the Johnson City
Board of Zoning Appeals, No. 2:13-CV-108 (Tri-Cities
I”). The plaintiffs sought, among other things, a
declaration that Johnson City's zoning ordinance relating
to methadone clinics was facially invalid and in violation of
the ADA and Rehabilitation Act. [See Doc. 1, No.
2:13-CV-108]. Plaintiffs sought a preliminary injunction
restraining Johnson City “from withholding the
necessary permits and permission from the [sic] TCH for a
methadone clinic to be located at 4 Wesley Court, Johnson
City, Tennessee.” [See Doc. 2, No.
2:13-CV-108]. On May 24, 2013, the Court held an all-day
evidentiary hearing on the motion for a preliminary
injunction. [See Docs. 36, 40, 41, 42, No.
2:13-CV-108]. The Court dismissed plaintiffs' complaint
without prejudice on June 12, 2013, holding that the matter
was not ripe for disposition because TCH did not have, and
might never have, a CON from the State of Tennessee.
[See Doc. 45, No. 2:13-CV-108]. Plaintiffs did not
appeal the Court's judgment.
TCH's application for a CON was proceeding. On June 8,
2013, Mr. Dunlap, TCH's attorney, sent a letter, a copy
of which does not appear to be in the record, requesting what
Mr. Dunlap characterizes as an “accommodation”
under the ADA. On June 11, 2013, TDMHSAS issued its review
and analysis as required by Tennessee Code Annotated §
68-11-1608, [Doc. 15-1]. TDMHSAS concluded that it could not
“support approval of the application because the
majority of the criteria and standards for the type of
facility being proposed in the application have not been
met.” [Id. at 4]. More specifically, TDMHSAS
concluded, among other things, that need for the facility
“has not been clearly established, ” and that the
“project does not contribute to the overall and orderly
development of healthcare” in the region. [Id.
at 5, 6]. THSDA considered the TCH CON application at its
monthly meeting on June 26, 2013. [Doc. 31-3].
outset of the June 26 hearing, it was noted that the
application was opposed by Senator Rusty Crowe, Congressman
Phil Roe, the City of Johnson City, various healthcare
providers, medical doctors, and private citizens.
[Id. at 4-5]. An initial statement was made by Jim
Christoffersen, THSDA's general counsel, who outlined the
general legal and policy bases upon which the agency's
decision was to be made, i.e., the statutory criteria of
need, economic feasibility, and contribution to the orderly
development of healthcare, and Tennessee's state health
plan and its “Guidelines for Growth.”
[Id. at 6]. He also noted this Court's holding
in Tri-Cities I and urged that “the decision
not be based on zoning” because the zoning issue had
not “been definitely determined.” [Id.
at 8]. Mr. Christoffersen also made the agency aware of a
June 18 letter from Mr. Dunlap in which he requested that
“the applicant be provided with all reasonable
accommodations or modifications to any and all applicable
requirements necessary to enable its application to be
approved, as required by the ADA and RA, ” and noted
the letter's threat to sue THSDA. [Id. at 8-9].
opponents and supporters of the application were present for
the hearing and were allowed to speak. The opponents included
an attorney representing the City of Johnson City, Johnson
City's mayor, himself an oral surgeon who treats addicts,
and Steven Lloyd, a board-certified internal medicine
physician, Associate Dean of Medicine at the Quillen College
of Medicine at East Tennessee State University, Associate
Chief of Staff at the Mountain Home VA Medical Center, and a
practicing hospitalist. [Id. at 10-94]. After
extensive questioning and statements by THSDA members, a
motion was made to approve the CON application. The motion
failed by a 3-6-1 vote. [Id. at 196-97].
conclusion of the hearing on June 28, Mr. Dunlap addressed
the chairman as follows: “On behalf of my individual
clients, who, as I would submit to the panel, are disabled,
under the Americans With Disabilities Act, I would ask, is
there anything that the panel can identify with the
application that would enable the CON to go forward and allow
my individual clients to be able to receive reasonable access
to treatment for their disabilities?” [Id. at
197]. Mr. Dunlap was directed to “talk to staff.”
[Id. at 198]. Then, on June 28, 2013, Mr. Dunlap
mailed a letter to Melanie M. Hill, Executive Director of
THSDA, which he referred to as a follow[ ] up on my letter of
June 17, 2013” and stated that he “understood the
chairman, at the end of the hearing, to direct him to contact
HSDA staff to pursue my request for a reasonable modification
or accommodation.” [Doc. 15-5 at 1]. Mr. Dunlap stated
that “[T]HSDA has not made a reasonable modification of
its rules and regulations required under the ADA and RA to
allow the CON to be granted, ” and requested that THSDA
modify “one or all of the criteria related to need,
economic feasibility, and orderly development . . . and allow
the CON application to be approved.” The letter
requested that this be done by July 5, 2013. [Id. at
8, 2013, plaintiffs filed their second lawsuit, this time in
the Middle District of Tennessee, against THSDA and the same
Johnson City defendants as in Tri-Cities I, again
alleging violations of the ADA and Rehabilitation Act.
(See Tri-Cities Holdings, LLC, et al. v. THSDA, et
al., No. 3:13-CV-669 (M.D. Tenn.), filed as Doc. 1 in
No. 2:13-CV-305 in this Court) (Tri-Cities II). The
case was transferred to this district from the Middle
District of Tennessee on November 13, 2013, and has proceeded
in this Court as case No. 2:13-CV-305. The complaint has been
amended twice in this Court, first to add Melanie M. Hill in
her official capacity as Executive Director of THSDA, as a
party defendant, [see Doc. 113 in No. 2:13-CV-305],
and second to add the individual members of THSDA in their
official capacities as party defendants. [See Doc.
136 in 2:13-CV-305]. Tri-Cities II remains pending
in this Court. TDMHSAS and its commissioner are not sued in
19, 2013, TCH filed an administrative appeal of THSDA's
CON decision with the Secretary of State's Administrative
Procedures Division (“APD”) pursuant to Tennessee
Code Annotated § 68-11-610 and the Tennessee Uniform
Administrative Procedures Act and the appeal was assigned to
ALJ Summers. On July 25, 2013, Mr. Dunlap mailed a letter to
“Department of State Administrative Procedures
Division” in which he “ask[ed] your office
directly to provide my clients with a reasonable modification
of any and all applicable state and local rules and
regulations as required under the Americans With Disabilities
Act . . . to allow TCH to operate its Opiate Treatment
Program at 4 Wesley Court, or elsewhere, in Johnson City,
Tennessee.” [Doc. 15-6]. In the letter, Mr. Dunlap
claims that THSDA and Johnson City have both violated the ADA
and Rehabilitation Act and stated that he would “be
asking the federal court to stay the above-captioned
administrative appeal I have filed while the federal case is
pending.” He states that ‘[t]he administrative
appeal claims are included in counts 13 and 14 in the federal
complaint.” [Id. at 3-4].
to the letter, “[T]HSDA's clearly illegal
requirement to notify local politicians when we applied for
the clinic provides the lever to engage the federal court to
provide equitable relief enforcing issuance of the
CON.” [Id. at 6]. On July 29, 2013, Mr. Dunlap
sent a letter to ALJ Summers in which he moved to stay the
”administrative appeal process pending resolution of
the federal court action.” (referring to No.
3:13-CV-669 in the United States District Court for the
Middle District of Tennessee) [Doc. 15-7]. The letter
concludes that “I am again respectfully asking you,
[T]HSDA, and Johnson City to provide a reasonable
modification under the ADA and the Rehabilitation Act to
allow TCH to locate its OTP clinic in Johnson City.”
The letter was copied to both the general counsel for THSDA
and the city attorney for Johnson City. [Id.].
Conference calls between ALJ Summers and the attorneys for
the parties in the administrative appeal were held on July 31
and September 5, 2013. During the September 5 conference
call, Mr. Dunlap again asked that the proceedings be stayed
pending a decision in the federal court which he claimed
“would resolve the CON appeal” and “would
be very shortly forthcoming.” After the September 5
conference call, the request for stay of the administrative
proceeding was granted, over the objection of THSDA's
counsel. [Doc. 71]. There was another conference call on
November 5, 2013, and neither party had anything new to
Tri-Cities II had been docketed as case No.
2:13-CV-305 upon its transfer to this Court from the Middle
District of Tennessee. Within days of the transfer, the
Johnson City defendants moved for a stay, [Docs. 98, 100, No.
2:13-CV-305], and THSDA filed a motion to dismiss, [Doc. 109,
No. 2:13-CV-305]. On December 10, 2013, the parties appeared
before Chief United States Magistrate Judge Dennis H. Inman
for a hearing on the motions to stay, [Doc. 133, No.
2:13-CV-305]. Defendants sought the stay on the basis that
Tri-Cities II had been filed by plaintiffs in the
Middle District of Tennessee in defiance of this Court's
prior ruling in Tri-Cities I that the matters were
not ripe for disposition because the plaintiffs had not
received a CON and license from the State of Tennessee. [Doc.
137 at 4-5, No. 2:13-CV-305]. Mr. Dunlap, representing
plaintiffs, candidly indicated to the magistrate judge that
plaintiffs disagreed with the earlier ripeness decision and
suggested to the magistrate judge that the case should
proceed because the CON application was on administrative
appeal and had then been stayed for approximately 60-days
“waiting for a direction from the Federal Court in this
case.” [Id. at 11-13]. The magistrate judge
expressed some consternation that the administrative appeal
had been stayed at the request of Mr. Dunlap and ultimately
entered an order finding plaintiffs' explanation for
filing their suit in the Middle District of Tennessee to be
“rather obvious judge-shopping” and “if not
a sanctionable contempt, certainly manifested a contemptuous
attitude toward this Court's earlier
decision.”[Doc. 135, No. 2:13-CV-305 at 4]. The
magistrate judge further found that “plaintiffs'
counsel has been more than a bit loose with his
interpretation of what occurred while this case was pending
before the Middle District of Tennessee, ” and his
arguments tread [ ] “perilously close to being
offensive.” [Id.]. The magistrate judge held
that the ruling of the Court in Tri-Cities I was
binding on plaintiffs and that “it is the law of this
case that the plaintiffs must procure, or at least attempt to
procure, certain administrative approvals.”
[Id. at 5]. The magistrate judge noted that it was
“reasonable to conclude that the district judge will
not change his opinion that plaintiffs must attempt to
procure a Certificate of Need, and a license from the
Tennessee Health Services Agency, before this Court can
entertain their suit.” The magistrate judge further
Plaintiffs' application for a certificate of need has
been denied, and an appeal of that denial is now pending
before a state administrative law judge. During argument, the
court was quite surprised to learn that an administrative law
judge has delayed considering the appeal of that denial based
upon plaintiffs' counsel's representation to her that
he intended to ask this court to stay, i.e., enjoin, any
action by her. That would seem to be contrary to
plaintiffs' professed need for a quick resolution to this
[Id. at 6]. Plaintiffs' motion to stay was
therefore denied. [Id.]. Plaintiffs did not appeal
the magistrate judge's order pursuant to Federal Rule of
Civil Procedure 72(a) and 28 U.S.C. § 636(b)(1)(A).
conference call had been scheduled with the administrative
law judge for January 10, 2014. On January 8, 2014, an e-mail
inquiry was sent by the ALJ to counsel for the parties
concerning any further developments in the federal
litigation. Mr. Dunlap responded that there were no new
developments, despite the above described developments before
the Magistrate Judge just a month earlier, and that the
motion for summary judgment and the motion to dismiss were
still pending. On March 7, 2014, Mr. Christoffersen filed a
motion on behalf of THSDA asking that a hearing be scheduled
on the administrative appeal and attached to the motion was a
copy of the December 10, 2013 order issued by Judge Inman.
[See Doc. 31-5]. On March 10, 2014, Mr. Dunlap
responded to THSDA's motion, once again objecting to any
hearing on the administrative appeal prior to the resolution
of the federal court litigation. Mr. Dunlap once again
requested “a reasonable modification to allow the CON
to be issued.” He further stated that “this
tribunal's continuing failure to do this creates a cause
of action that Petitioner may bring against [ALJ Summers],
” and indicated that if a hearing was scheduled on the
administrative appeal, “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.” [Doc. 15-10 at 4] (underlining in original).
Mr. Dunlap's 21-page filing in the administrative action
made no mention of the developments in the federal
litigation. On March 12, 2014, Mr. Dunlap sent another letter
to ALJ Summers “to outline further [his] position
regarding the previous requests” and to request
“a conference . . . to specifically to address the
reasonable request modification request-before a
full-blown hearing is scheduled.” [Doc. 15-11]
(emphasis in original).
March 14, 2014, ALJ Summers entered an order in the
administrative appeal sua sponte revoking Mr.
Dunlap's permission to appear pro hac vice in
the administrative matter. In her order, ALJ Summers
referenced Mr. Dunlap's lack of disclosure of matters
related to the federal court action, noted his
“threats” to join the administrative law judge
and the THSDA in the federal court action should the stay of
the administrative proceedings be lifted and the CON appeal
set for hearing, noted his demands that THSDA “grant
the requested modifications of [T]HSDA rules and the disputed
CON even though the [T]HSDA's obligation to provide this
relief is yet to be determined, either by this tribunal or in
the federal courts, ” and found that Mr. Dunlap's
actions in the administrative case violated various Tennessee
Rules of Professional Conduct, had expressed his contempt for
the administrative proceedings in the tribunal, and had
“unnecessarily impeded a resolution of the CON
appeal.” [Doc. 15-12]. On March 24, 2014, Mr. Dunlap
sought reconsideration of the order revoking permission to
appear pro hac vice and moved for ALJ Summers's
recusal. On April 2, 2014, ALJ Summers denied both motions.
1, 2014, TCH appealed the order revoking permission to appear
pro hac vice to the Chancery Court for Davidson
County, Tennessee. On December 10, 2014, the Chancery Court
upheld ALJ Summers's revocation of counsel's
admission pro hac vice, concluding, among other
Without evidence and compelling legal authority, Mr. Dunlap
stated that ALJ Summers retaliated against him for advising
her (a) that she was subject to the ADA and (b) that she bore
certain responsibilities under the ADA. . . His conduct, his
lack of candor with ALJ Summers, and his misrepresentation of
his duplicative federal court filings went beyond
“forceful prose . . .”
. . . .
. . . His [Mr. Dunlap's] description of his own conduct
as a zealous assertion of his client's ADA rights is
grossly inaccurate and is more aptly described as duplicitous
. . . .
Mr. Dunlap's statements to ALJ Summers were untrue. Judge
Greer had ruled that his client had to exhaust its
administrative remedies. Mr. Dunlap did not like that ruling
. . . . Mr. Dunlap provided no information about the status
of the federal litigation. Rather, Mr. Dunlap chose not to
reveal the federal court ruling and to intentionally assert a
legal position directly contrary to that federal court
. . . .
ALJ Summer's conclusion that Mr. Dunlap misrepresented
the status of the federal litigation and used the
misrepresentation to attempt to coerce a decision from her in
his client's favor without an administrative hearing is
supported by the record . . .
. . . .
Mr. Dunlap argued that he had the right to fairly comment on
the legality of the administrative proceedings in reference
to the ADA. His right to comment is not in dispute; rather,
the dispute centers on his failure to be forthcoming and
candid with ALJ Summers about the federal court proceedings .
. . . Similarly, his posturing that his client has the right
to make HSDA aware of imminent federal enforcement action
serves only as a distraction, not an effective explanation
for his misrepresentations or attempt to coerce . . .
. . . .
. . . Mr. Dunlap characterizes his conduct as an appropriate
attempt to discuss the ADA. However, his written statements
were not attempts to make ALJ Summers aware of the federal
law and its implications. Instead, he declared that
“if” ALJ Summers took action, he would have no
choice but to sue her in federal court. This language is not
a discussion of federal law, but a direct challenge to ALJ
Summers' authority . . .
. . . .
Despite being advised by the federal judge and the federal
magistrate that he needed to exhaust his administrative
remedies, Mr. Dunlap repeatedly demanded that a CON issue
without a hearing and asserted that ALJ Summers' failure
to issue one forthwith constituted a violation of federal
law. His actions ...