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Tri-Cities Holdings LLC v. Tennessee Health Services and Development Agency

United States District Court, E.D. Tennessee, Greeneville

August 25, 2017

TRI-CITIES HOLDINGS LLC, JANE DOE NOS. 1-2, and JOHN DOE NOS. 1-6, Plaintiffs,
v.
TENNESSEE HEALTH SERVICES AND DEVELOPMENT AGENCY; CITY OF JOHNSON CITY, TENNESSEE; JOHNSON CITY BOARD OF COMMISSIONERS; JOHNSON CITY BOARD OF ZONING APPEALS; MELANIE M. HILL, in her official capacity as Executive Director of the Tennessee Health Services & Development Agency; and KEITH GAITHER, ELISHA HODGE, LISA JORDAN, D. LYNN JOHNSON, JAMES L. WRIGHT, CHARLOTTE C. BURNS, CLAUDIA H. BYRD, ROBERT S. DOOLITTLE, MARK D. FLORA, M.D., BARRETT G. HAIK, MD, FACS, and THOM MILLS, in their official capacities as members of the Board of the Tennessee Health Services & Development Agency, Defendants.

          MEMORANDUM OPINION AND ORDER

          J. RONNIE GREER UNITED STATES DISTRICT JUDGE.

         Pending before the Court are three motions: (1) Plaintiffs' motion for partial summary judgment, [Doc. 212]; responses, [Docs. 228, 231]; amended motion for summary judgment (withdrawing requests for relief)[1], [Doc. 233]; replies, [Docs. 236, 237]; (2) Defendant Johnson City's[2] motion for summary judgment, [Doc. 215]; response, [Doc. 222]; reply, [Doc. 239]; and (3) the motion of the State Defendants[3] for summary judgment on Counts 8, 10, and 12[4] of plaintiffs' second amended complaint, [Doc. 218]; response, [Doc. 223]; reply, [Doc. 240]. For the reasons which follow, plaintiffs' motion for summary judgment will be DENIED, Johnson City's motion for summary judgment will be GRANTED, the State Defendants' motion for summary judgment will be GRANTED, and plaintiffs' complaint will be DISMISSED.

         I. Background

         The suit before the Court, No. 2:13-CV-305, is the second of three lawsuits filed by Tri-Cities Holding, LLC (“TCH”) and various Jane and John Does (the “individual defendants”) (referred to collectively as “plaintiffs”) related to TCH's efforts to open an opioid treatment program (OTP) in Johnson City, Tennessee. In its first complaint, in case No. 2:13-CV-108, filed April 19, 2013 (TCH I), TCH, a Georgia limited liability company which proposed to establish an out-patient methadone maintenance treatment service, or OTP, in Johnson City, Tennessee, and eight prospective patients of TCH, Jane Does 1-2 and John Does 1-6, sued Johnson City seeking declaratory and injunctive relief under § 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 793 (the “Rehabilitation Act”) and the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. (“ADA”). More specifically, the plaintiffs alleged that Johnson City's zoning ordinance relating to methadone clinics was facially invalid and that Johnson City's actions in denying TCH occupancy and operation permits to operate TCH's proposed OTP were in violation of the Rehabilitation Act and the ADA. Plaintiffs sought a preliminary injunction, but the Court subsequently ordered plaintiffs to show cause why the request for injunction was “not premature inasmuch as the plaintiff, Tri-Cities Holdings, LLC, has no Certificate of Need from the Tennessee Health Services and Development Agency or license from the Tennessee Department of Health.” [Doc. 10, No. 2:13-CV-108]. On June 12, 2013, the Court held that plaintiffs' claims were not ripe for disposition and dismissed the case without prejudice.

         The plaintiffs did not appeal the Court's judgment in TCH I, and it has now become final. Instead, they filed the instant action on July 8, 2013, in the United States District Court for the Middle District of Tennessee (TCH II). [Doc. 1]. On November 13, 2013, the case was transferred from the Middle District to this Court. [Doc. 95]. Plaintiffs have once again sued Johnson City, and have added the State Defendants, [5] again claiming violation of the Rehabilitation Act and the ADA. On April 10, 2014, this Court granted in part and denied in part HSDA's motion to dismiss and dismissed plaintiffs' claims under the Rehabilitation Act and their state law claims.[6] [Doc. 163]. Also on April 10, 2014, the Court granted the motion of Johnson City to stay the case and denied plaintiffs' motion for summary judgment and for a preliminary injunction without prejudice to their renewal after the lifting of the stay, [Doc. 164]. Plaintiffs appealed the Court's orders to the Sixth Circuit Court of Appeals, [Doc. 166]. The Sixth Circuit affirmed the denial of the preliminary injunction and dismissed the appeal of the denial of summary judgment and dismissal of the state law claims for lack of jurisdiction, [Doc. 172]. Plaintiffs were ordered to file periodic status reports with the Court on the status of the administrative appeal of the denial of their Certificate of Need (“CON”) application by HSDA. [Docs. 175, 181, 184-190, 198, 199]. On August 22, 2016, TCH moved to lift the stay, [Doc. 193], and the Court granted the motion on October 21, 2016, [Doc. 205]. The motions currently pending before the Court were then filed.

         The third lawsuit, No. 2:14-CV-233, was filed by TCH on May 19, 2014, and alleges violations of the Rehabilitation Act and the ADA by the state administrative law judge assigned to the appeal of HSDA's denial of TCH's CON, the Tennessee Department of State and its Secretary, and the Tennessee Department of Mental Health & Substance Abuse Services and its Commissioner. The Johnson City defendants are not parties to that suit. The third lawsuit was dismissed by the Court on May 31, 2017.[7] The appeal of the dismissal is pending in the Sixth Circuit.[8]

         II. Standard of Review

         Summary judgment is proper where the pleadings, the discovery and disclosure materials on file, and any affidavits show 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).

         The 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 a jury 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. 1994).

         The 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.

         III. Analysis

         Plaintiffs have moved for summary judgment on Counts 1 through 6 of the second amended complaint, all of which make claims against the Johnson City defendants. The Johnson City defendants have responded and moved for summary judgment on the same basis upon which they have responded to the plaintiffs' motion. Plaintiffs then respond to the motion of the Johnson City defendants on the same basis raised in their motion. The same is true for the State Defendants. Plaintiffs move for summary judgment as to Counts 8, 10 and 12 of the second amended complaint, all of which allege illegal discrimination by the State Defendants, i.e., HSDA's illegal discrimination against plaintiffs in violation of the ADA (Counts 8 and 10), and HSDA's failure to provide plaintiffs with a reasonable accommodation in violation of the ADA (Count 12). Plaintiffs have submitted the declaration of Steve Kester, [Doc. 46], Dr. David Lentz, [Doc. 49], Dr. Robert J. Newman, [Doc. 47], Jane Does 1-2, [Docs. 48-50], and John Does 1-6, [Docs. 42-56]. The State defendants likewise have responded to plaintiffs' motion and filed a cross-motion for summary judgment. The Court will, for the sake of clarity, consider the issues as they relate to the Johnson City defendants first and then will consider the claims which relate to the State Defendants.

         A. Claims Against Johnson City

         Johnson City responds to plaintiffs' motion for partial summary judgment by invoking the doctrines of ripeness, issue preclusion, standing and/or mootness as a bar to plaintiffs' claims, and, in turn, seeks summary judgment on the same grounds. Plaintiffs address the issue of ripeness in one paragraph of their 25-page opening memorandum in support of their motion, [Doc. 213], one paragraph in their 30-page reply brief, [Doc. 236], and in four pages of their 30-page response to Johnson City's motion for summary judgment, [Doc. 222]. Johnson City argues that all of plaintiffs' claims against Johnson City are barred by ripeness/issue preclusion and, because this issue is completely dispositive of plaintiffs' claims, the Court will address it first.

         In the prior action, TCH I, the Court dismissed the complaint without prejudice because the “'issues [were] not ripe for disposition'” since TCH “had not obtained, and might never obtain, the [required] CON and license from the State of Tennessee.” [See Doc. 163 at 2, No. 2:13-CV-108]. This Court previously stayed this case and denied plaintiffs' motion for a preliminary injunction, stating in its April 10, 2014 memorandum that:

This is the second suit on the same claims filed by plaintiffs against the City of Johnson City, Johnson City Board of Commissioners, and the Johnson City Board of Zoning Appeals (the “Johnson City defendants”). The instant suit also adds as a party defendant the Tennessee Health Services and Development Agency (“HSDA”), and the Executive Director and members of the Board of HSDA. The first suit was filed in this Court on April 19, 2013 (No. 2:13-CV-108). After a hearing on plaintiffs' motion for a preliminary injunction, the Court dismissed the complaint because the “issues [were] not ripe for disposition, ” [Doc. 45, No. 2:13-CV-108], for reason that Tri-Cities Holdings, LLC (“TCH”), had not obtained, and might never obtain, the required Certificate of Need (“CON”) or license from the State of Tennessee.
Plaintiffs' complaint was dismissed without prejudice and the Court provided that plaintiffs would be permitted to reopen the case by motion upon a showing of ripeness rather than requiring the filing of a new complaint. [Id. at 10, fn. 7]. Judgment was entered by the Clerk on June 12, 2013, [Doc. 46, No. 2:13-CV-108], and the judgment became final thirty (30) days after the date of filing of the judgment since no notice of appeal was filed. See Fed. R. App. P. 4. No motion has ever been filed to reopen the case upon a showing of ripeness. Instead, plaintiffs filed the instant action in the Middle District of Tennessee on July 8, 2013. The Johnson City defendants filed a motion for change of venue and the Court ultimately transferred the case to this district. The case was opened here on November 14, 2013.
The Johnson City defendants moved to dismiss on the bases of issue preclusion and lack of ripeness, [Doc. 87]. Because the issue of ripeness has been previously litigated adversely to plaintiffs and because they did not appeal the prior judgment, the Johnson City defendants argue that the doctrine of issue preclusion bars the plaintiffs from relitigating that issue in this Court (or from seeking a different answer from a different federal court). Plaintiffs respond that the Court's prior judgment was without prejudice, does not operate as an adjudication on the merits, and thus does not have any res judicata effect. Plaintiffs argue that a plaintiff always has the right to refile a complaint dismissed without prejudice.
The Johnson City defendants subsequently moved for a stay of these proceedings “until there is a resolution of whether Tri-Cities Holdings is entitled to a Certificate of Need and a license, ” [Doc. 98], asserting that a stay is more appropriate than another dismissal without prejudice at this point to avoid the possibility that plaintiffs will simply refile their complaint in some other federal judicial district. Plaintiffs respond, arguing that the case is ripe for adjudication and that the administrative appeal of the denial of their CON application is irrelevant to their ADA claims. In essence, plaintiffs argue that the Court's prior determination that plaintiffs' claims against the Johnson City defendants are not ripe for determination until TCH has obtained the required CON and license from the State of Tennessee is erroneous. Although the Magistrate Judge previously ordered a stay of discovery, the pending motion to stay the case was deferred by the Magistrate Judge to this Court.
Res judicata, i.e., the preclusive effect given a judgment, consists of two conceptually different doctrines--claim preclusion and issue preclusion. Stryker v. National Union Fire Insurance Co., 681 F.3d 819, 824 (6th Cir. 2012) (citing Taylor v. Sturgell, 553 U.S. 880, 892 (2008)). “Under the doctrine of claim preclusion, a final judgment forecloses ‘successive litigation of the very same claim, whether or not relitigation of the claim raises the very same issue as the earlier suit.'” Id. (quoting New Hampshire v. Maine, 532 U.S. 742, 748 (2001)). “Issue preclusion, in contrast, bars ‘successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment, ' even if the issue recurs in the context of a different claim.” Id. (quoting New Hampshire, 532 U.S. at 748-49).
In order for issue preclusion to apply to the prior ruling, the party seeking estoppel must show:
(1) the precise issue raised in the present case must have been raised and actually litigated in the prior proceeding; (2) determination of the issue must have been necessary to the outcome of the prior proceeding; (3) the prior proceeding 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.
Stryker, 601 F.3d at 825 (quoting Pfeil v. St. Bank & Trust Co., 671 F.3d 585, 601 (6th Cir. 2012) (internal quotation marks and citations omitted).
Plaintiffs argue only that the Court's prior judgment was without prejudice and therefore does not have any preclusive effect. Plaintiffs' argument, however, completely misses the point. Plaintiffs are not barred from refiling their complaint, nor are they precluded from ultimately pursuing any of their claims against the Johnson City defendants. The Johnson City defendants argue only that the issue of ripeness has been conclusively decided in the prior litigation between plaintiffs and the Johnson City defendants and, that issue having been conclusively decided, plaintiffs may not proceed with their claims until they have shown that the claims are ripe for adjudication. Upon examination of the relevant factors, the Court agrees with the Johnson City defendants.
First, the precise issue now raised, i.e., ripeness, was actually raised and actually litigated in the prior proceeding. Plaintiffs' argument that the issue was erroneously decided by the Court in the prior proceeding is beside the point. Plaintiffs did not seek reconsideration of the Court's ruling nor did they appeal. The Court entered judgment and the judgment became final and binding on the plaintiffs. It has now been conclusively established that the case is not ripe for determination and the Court lacks subject matter jurisdiction until plaintiffs obtain the necessary CON and license. The issue cannot be relitigated by plaintiffs in this or any other action in federal court. To the extent plaintiffs believed the Court's ruling on the issue was incorrect, they should have appealed the judgment. They did not. They instead chose to attempt to relitigate the issue in the Middle District of Tennessee. Likewise, plaintiffs' argument that they have discovered precedents which they did not previously call to the Court's attention are similarly unavailing.
Second, the determination of the ripeness issue was clearly necessary to the outcome of the prior proceeding. Indeed, it was the sole basis for the Court's prior determination. Judgment was entered on that very issue. The second requirement for issue preclusion is met.
Third, the prior proceeding resulted in a judgment on the merits, notwithstanding that none of the plaintiffs' claims were decided on the merits. Plaintiffs appear to argue that this prerequisite has not been met because the Court's dismissal of the complaint was without prejudice. That is not the proper inquiry in deciding whether issue preclusion applies to this proceeding. The inquiry is whether the issue for which preclusion is sought was decided and a judgment on the merits entered on that issue. See, e.g., Sandy Lake Band of Mississippi Chippewa v. United States, 714 F.3d 1098 (8th Cir. 2013) (dismissal without prejudice for lack of subject matter jurisdiction meets requirement because “[a]lthough dismissal for lack of subject matter jurisdiction does not adjudicate the merits of the claims asserted, it does adjudicate the court's jurisdiction.”) (citing Kulinski v. Medtronic Bio-Medicus, Inc., 112 F.3d 368, 373 (8th Cir. 1997) (holding that the complaint's dismissal without prejudice for lack of subject matter jurisdiction would preclude plaintiff from bringing another claim on the same jurisdictional basis)). In other words, plaintiffs may reassert the claims in their first lawsuit against the Johnson City defendants, but only after they establish that the claims are ripe for adjudication, i.e., only after they obtain the required CON and license.
Finally, plaintiffs had a full and fair opportunity to litigate the ripeness issue in the prior proceeding. On April 25, 2013, the Court ordered plaintiffs to show cause why the proceeding was not “premature inasmuch as the plaintiff, Tri-Cities Holding, LLC, has no Certificate of Need from the Tennessee Health Services and Development Agency or license from the Tennessee Department of Health.” [Doc. 10, No. 2:13-CV-108]. Plaintiffs responded to the order on May 1, 2013, in a 17 page brief which specifically addressed whether “Plaintiffs' claims are ripe for adjudication.” [Doc. 14, No. 2:13-CV-108, at 3]. The Court heard oral argument on May 10, 2013, after giving notice of a hearing on the issue of whether the motion for preliminary injunction was premature. [See Notice, No. 2:13-CV-108, May 6, 2013]. Indeed, plaintiffs make absolutely no suggestion that they did not have a full and fair opportunity to litigate the ripeness issue in the prior proceeding.
This Court has previously determined, in the prior litigation between these parties, that plaintiffs' claims against the Johnson City defendants are not ripe for adjudication because they do not have, and may never have, a CON or a license to operate their proposed methadone clinic, even if the Court were to declare the Johnson City Zoning Ordinance invalid. The Court's prior judgment on the issue of ripeness has become final. Plaintiff, TCH, still does not have the required CON and license. Because the prerequisites for issue preclusion on this issue are met, plaintiffs are bound by the Court's prior ruling on the issue. Defendants' motion to stay will, therefore, be GRANTED, [Doc. 98]. The Johnson City defendants motion to dismiss, [Doc. 87], and plaintiffs' motion to lift stay on discovery and for decision on plaintiffs' motions for a preliminary injunction and for partial summary judgment, [Docs. 153, 154], will be DENIED. Plaintiffs' motion for a preliminary injunction, [Doc. 82], and plaintiffs' motion for summary judgment, [Doc. 127], are DENIED WITHOUT PREJUDICE and may be renewed, if appropriate, once the stay in this case is lifted.

[Doc. 164 at 2-7].

         As noted above, plaintiffs largely ignore the ripeness/issue preclusion problem they face. They apparently believe the Court's prior ruling was wrong and once again argue that challenges to facially invalid laws or ordinances are “ripe by their very nature, ” quoting Ecogen, LLC v. Town of Italy, 438 F.Supp.2d 149, 155 (W.D.N.Y. 2006) and citing MacDonald v. Safir, 206 F.3d 183, 189 (2d Cir. 2000). As Johnson City notes, however, that argument was rejected and these cases distinguished by the Sixth Circuit in its order on plaintiffs' interlocutory appeal of this Court's denial of a preliminary injunction.[9] The Sixth Circuit sated:

(1) Likelihood of success on the merits. The district court did not address the merits of Plaintiffs' discrimination claims, concluding they were not ripe. Plaintiffs have not shown any error in that conclusion.
Ripeness is a threshold determination. The district court considered three factors in finding that Plaintiffs' claims were not ripe: (1) the likelihood that the harm alleged will ever come to pass; (2) the hardship resulting if judicial relief is denied at that point; and (3) whether the factual record was sufficiently developed to produce a fair adjudication of the merits. The court found that none of these factors was satisfied.
Plaintiffs argue that facial challenges to invalid laws are “always ripe by their very nature.” (Appellants' Brief at 28) They cite Ecogen, LLC v. Town of Italy, 438 F.Supp.2d 149, 155 (W.D.N.Y.2006), and MacDonald v. Safir, 206 F.3d 183, 189 (2d Cir.2000). These cases are factually distinguishable. In Ecogen, the plaintiff alleged that a township's moratorium on construction of wind turbines violated its substantive due process and equal protection rights. Prior to the moratorium, plaintiff purchased property and acquired easements for its planned wind facilities. When the project was publicly announced, the town passed a six-month moratorium on wind turbines, stating it needed time to consider and adopt a master zoning plan. The town repeatedly renewed the moratorium but failed to adopt a master plan. Plaintiff did not require any state or local permits to proceed with its project, and the district court found the plaintiff's facial challenge to the moratorium ordinance was ripe. Tri-Cities is not in a comparable position: it concedes it cannot open a methadone clinic without a CON and a license from the state.
MacDonald v. Safir, 206 F.3d 183 (2d Cir.2000), involved a First Amendment challenge to New York City's parade permit regulations. The Second Circuit held that a facial challenge is proper “... whenever a licensing law gives a government official or agency substantial power to discriminate based on the content or viewpoint of speech ...”. Id. at 189, citing City of Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 108 S.Ct. 2138, 100 L.Ed.2d 771 (1988). Plaintiffs' supplemental authorities are similarly distinguishable, as they involve facial challenges to zoning ordinances that infringe First Amendment rights of speech and free expression. Plaintiffs are not raising First Amendment claims. And they cite no authority suggesting that the ripeness doctrine should be similarly relaxed or excused when an ordinance or statute is challenged under the ADA or the Rehabilitation Act.
Plaintiffs also contend that their claims are ripe because they face a “Catch 22” dilemma that requires immediate judicial relief. They argue that they must show their compliance with local laws in order to obtain a CON from HSDA. They also cite the Johnson City zoning ordinance's requirement that Tri-Cities obtain a CON in order to obtain a special exception approval under that ordinance. This potential “Catch 22” was mentioned several times during the Board of Zoning Appeals' hearing on Tri-Cities's application. Mr. Neilson, Johnson City's Traffic Engineer, summarized Tri-Cities's application at the start of the hearing, and reviewed the requirements of Section 613.3.3 of the City's zoning code governing methadone treatment clinics. Neilson stated that one of the code's requirements is that the clinic be fully licensed and certified by the state, and a CON obtained from HSDA, prior to BZA approval. Mr. Neilson stated that if the Board chose to grant the two waivers sought by Tri-Cities (permission to open at 5 a.m., and a location that was not an arterial street), the approval “should be conditioned upon granting-that the State grants them the certificate of need. Since they can't get their certificate of need prior to BZA approval, it's kind of a catch-22, so you'll probably see an amendment to that code in the future.” Mr. Neilson also opined that the Board lacked legal authority to grant a variance or exception to the conditions of the zoning ordinance regarding hours of operation and arterial street location.
Mr. Herrin, counsel for Johnson City, also spoke at the hearing. He opined that the Board did not have legal authority to overrule the criteria adopted by the City Commission in the zoning code. The City's position was that two of those criteria (arterial street and hours of operation) were not satisfied. Mr. Herrin agreed with Neilson that the Board should not consider the fact that Tri- Cities did not have an approved CON, as that would amount to a “Catch-22.” He urged the Board not to consider that issue in reaching its decision regarding the other two criteria. At the close of the hearing, a Board member made a formal motion to deny Tri-Cities's request, stating that the “... hours of operation and the location having access from an arterial street are not met. The way that the board has acted on special exceptions ... in the past when a special exception request comes before us, if it meets all the conditions we have no choice but to approve that special exception. This does not meet all those conditions and based on that fact, I move that we deny the request.” The record before us does not reasonably support an argument that the Board denied Tri-Cities's zoning application because it lacked a CON.
Plaintiffs also contend that they faced this “Catch-22” dilemma before HSDA, and suggest that HSDA denied a CON because Tri-Cities lacked a zoning permit, and because of Johnson City officials' opposition to their proposal. Plaintiffs cite the opening remarks of Mr. Christoffersen, HSDA's general counsel, at the HSDA hearing. Christoffersen reported that the federal district court had essentially postponed a decision on Plaintiffs' lawsuit challenging the Johnson City ordinance, and he urged the members to set aside any consideration of local zoning. He specifically recommended that the panel focus its discussions on the three main criteria for issuing a CON: the demonstrated need for the facility; the proposal's economic feasibility; and its contribution to the orderly development of healthcare in Tennessee. Christofferson told the panel: “I would recommend and urge that the decision not be based on zoning itself today, because it hasn't been definitely determined to be a roadblock, and, therefore, that the [other] criteria be looked at rather than that.” At oral argument, Plaintiffs' counsel dismissed these statements as “tongue in cheek” subterfuge that should be interpreted as urging the panel to deny a CON because of local opposition. We cannot agree with counsel's characterization. Given the entirety of the hearing testimony and the questions posed by the panel members, there is no reason to suspect that the panel did not follow Mr. Christofferson's advice.
Plaintiffs' counsel also cited a statement by a “lobbyist” for Johnson City, who appeared at the HSDA hearing and spoke in opposition to Tri-Cities's application. This “lobbyist” (Mr. Taylor) summarized the City's position that Tri-Cities had not established a need for its proposed clinic. He cited the physician-to-patient ratio for area physicians approved to dispense buprenorphine (an alternative to methadone for treating opiate addiction), a ratio that is apparently more favorable than in other more populous areas of the state. He also critiqued Tri-Cities's economic model for its clinic operations. Johnson City's mayor, who is a practicing oral surgeon, also spoke. He described other addiction treatment services currently available in Johnson City, and questioned Tri- Cities's contention that it had shown a need for the clinic. Other questions were raised at the hearing by other speakers and HSDA members about operations at Tri-Cities's other methadone clinics, the adequacy of proposed staffing levels, and the extent of education that would be required for clinic staff. Also, prior to the hearing, HSDA's staff had reviewed Tri-Cities's application and concluded they could not support it “... because the majority of the Criteria and Standards for the type of facility being proposed in the application have not been met ...”. Plaintiffs concede that HSDA has issued CON's for 12 other methadone clinics in Tennessee, so this staff recommendation cannot simply be attributed to local opposition or lack of zoning approval, much less bias against opiate-addicted individuals. It is clear that HSDA was aware of local opposition to Tri-Cities's proposal. But we cannot agree that HSDA denied a CON because of that opposition, or because Tri- Cities lacked a zoning variance. As the district court accurately stated, Tenn Code Ann. § 68-11-1624 specifically states that local support or opposition to a methadone maintenance clinic's CON application is informational and advisory only, and is not a prerequisite to obtaining a CON.
These facts strongly support a conclusion that Plaintiffs cannot show a substantial likelihood of success on the merits of their assertion that their claims are ripe. If Tri-Cities's state administrative appeal is ultimately unsuccessful, it cannot open its clinic. And until that appeals process is complete, the district court cannot reasonably determine if Tri-Cities was denied a CON due to some Catch 22 dilemma, or whether the denial was based on issues having nothing to do with Johnson City's zoning ordinance or disability discrimination. We are confident that the district court can address the ramifications of any “Catch-22” dilemma that might appear in the record when Plaintiffs can demonstrate that their claims are ripe.

Tri-Cities Holdings, LLC v. Tennessee Health Services & Development Agency, 598 F. App'x 404, 408-11 (6t ...


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