Mx Group, Inc. v. City of Covington

• Decision Date: 12 June 2002
• Docket Number: No. 00-6305.,00-6305.
• Parties: MX GROUP, INC., Plaintiff-Appellee, v. CITY OF COVINGTON, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

293 F.3d 326

MX GROUP, INC., Plaintiff-Appellee, v. CITY OF COVINGTON, et al., Defendants-Appellants.

No. 00-6305.

United States Court of Appeals, Sixth Circuit.

Argued: March 19, 2002.

Decided and Filed: June 12, 2002.

William C. Oldfield (briefed), David E. Davidson (argued and briefed), Cobb & Oldfield, Covington, KY, for Plaintiff-Appellee.

Stephen T. McMurtry (argued and briefed), Otto Daniel Wolff & Associates, Covington, KY, for Defendants-Appellants.

Before: BATCHELDER and CLAY, Circuit Judges; CARR, District Judge.^*

OPINION

CLAY, Circuit Judge.

Defendants, the City of Covington, Kentucky, the Covington Board of Adjustment, Marc Tischbein, and the Covington Station Council of Co-Owners, Inc., appeal the judgment of the district court, after a bench trial, in favor of Plaintiff pursuant to claims brought under Title II of the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12131, et seq., and the Rehabilitation Act of 1973 ("Rehabilitation Act"), 29 U.S.C. § 701 et seq. Plaintiff, MX Group, Inc., alleged that Defendants discriminated against it because of Plaintiff's association with its potential clients, who are drug addicted persons, by refusing to issue a zoning permit to Plaintiff so that it could open a methadone clinic in the City of Covington. Plaintiff claims that Defendants further discriminated against it by amending the city's zoning ordinance to completely prohibit the clinic from opening anywhere in the city. The district court found that Plaintiff's clients or potential clients were persons with a disability and that Defendants discriminated against Plaintiff because of Plaintiff's association with its clients/potential clients. For the reasons that follow, we AFFIRM.

BACKGROUND

Procedural History

On January 16, 1998, Plaintiff filed a two-count complaint in the district court, alleging violations of the ADA and the Rehabilitation Act. On July 21, 1998, Plaintiff amended its complaint, adding as a third cause of action denial of substantive due process. According to the district court's opinion, Plaintiff also asserted a constitutional equal protection claim. Defendants filed an answer on August 20, 1998. Defendants moved for summary judgment on August 2, 1999. The district court held a hearing on the motion and denied it on December 17, 1999. The district court also set a date of January 8, 2000 for a bench trial. At the close of all the evidence, the district court asked the parties to file memoranda in support of their positions. Plaintiff filed its memorandum on March 6, 2000, and Defendants filed their memorandum/brief on April 5, 2000. On August 8, 2000, the district court entered an opinion and order in favor of Plaintiff's ADA and Rehabilitation Act claims. See MX Group, Inc. v. City of Covington, 106 F.Supp.2d 914 (E.D.Ky. 2000). The district court also entered an order and injunction, which provided that Defendants' ordinance, essentially banning Plaintiff's proposed methadone clinic from operating anywhere in the City of Covington, violated the ADA. The order also enjoined Defendants from withholding the necessary permits and permission from Plaintiff for a methadone clinic. Defendants moved to alter and amend the order; after oral arguments were heard on that motion, the district court denied Defendants' motion on September 8, 2000. Defendants thereafter filed this timely notice of appeal.

Facts

The parties agree that the facts are essentially undisputed. Plaintiff, MX Group, is in the business of providing drug treatment through the use of methadone.¹ In 1997, Plaintiff began the process of locating a site to open a methadone clinic in Covington, Kentucky. The proposed purpose of the clinic was to provide methadone treatment, counseling, medical examinations and other services for recovering opium addicts.

Melissa Fabian and Edith McNeill, both of whom were then affiliated with Plaintiff, contacted Chuck Eilerman, a realtor, who provided them with a list of properties in Covington that met the needs of the facility. Fabian testified that in searching for a location, affordability was important as was location. She testified that she was not looking in residential areas, but only business or commercial areas. Further, it was important that the location be accessible to clients. After looking at several potential sites, Plaintiff found a suitable location at 200 West Pike Street. The building was divided into office condominiums and used to serve as a train station. Plaintiff entered into a lease agreement with one of the owners of office space in the building, and contacted Covington's Zoning Administrator Ralph Hopper to apply for a zoning permit for that location.

After he was first contacted by Plaintiff regarding the permit but before Plaintiff actually sought a zoning permit for the clinic, Hopper contacted his superiors about the methadone clinic. Although this was not normal procedure, Hopper thought the clinic would be "potentially controversial." Hopper completed the application for the zoning permit and issued the permit on the day Plaintiff applied for it, August 19, 1997.

After the zoning permit was issued, town residents expressed their displeasure regarding the proposed clinic at a City Commission meeting. As a result, on September 8, 1997, the city held a hearing chaired by Assistant City Manager Tom Steidel regarding Plaintiff's application for a zoning permit. Steidel testified at trial that the hearing was informational in nature, and was intended to provide information for and against the establishment of the clinic. Steidel testified that the meeting was intended to provide Plaintiff and concerned Covington citizens an opportunity to air their concerns regarding the clinic. The meeting lasted two to three hours, and was not transcribed or recorded. Steidel also testified that there was a wide range of reaction and emotion at the meeting, ranging from "proper decorum" to anger regarding the proposed clinic.

Another owner of an office in the building where the clinic was to be located appealed Hopper's decision to issue the permit. On December 17, 1997, the Covington Board of Adjustment held a hearing on the matter. Numerous persons testified at the hearing for and against Hopper's decision. Covington Assistant Police Chief William Dorsey testified that from a police officer's perspective, he saw no need for a methadone clinic in Covington. Dorsey testified that based on his research, he found that for-profit methadone clinics spawn criminal activity. He contacted other clinics in other towns and was told about trouble outside of clinics, such as drug use and/or trafficking and drug trade, violence, shootings and death. He testified that there is a large number of burglaries at methadone clinics as a result of people breaking in to steal drugs. He also testified that the town should be concerned about the safety of the neighborhood children inasmuch as there is a school near the proposed site. Further, he added that "addicts" generally find a way to wean themselves from the drugs and then sell the take-home dosages they are provided. Dorsey did not provide any statistics or other specifics regarding these alleged ill effects. Apparently under the impression that Plaintiff operated a clinic in Greentree, Pennsylvania, as part of Dorsey's research, he contacted the Greentree police department, which told him there had been increased police runs to the clinic. However, the security officer in the building where Plaintiff is located in Greentree told him that he had experienced no problems. (J.A. at 234.) Dorsey admitted that he told the Board of Adjustment about the police statements but not about the statements of the security officer. Other residents also testified for, but mostly against, allowing the facility to open.

Sergeant John Burke, commander of the Pharmaceutical Diversion Squad of the Cincinnati Police Division testified that he had experienced problems regarding criminal activity, such as drug dealers preying on those using drugs outside of methadone clinics in his town. He testified that he had no direct experience with for-profit clinics, but he had received reports from a nearby clinic in Indiana with which he was familiar. He testified that that clinic also had experienced problems relating to drug activity.

One person who spoke in support of the facility had herself been a heroin addict for ten years, and testified that she would travel to Covington to pick up her drugs. She testified that in April 1996, she entered a clinic located in Indiana, and was stabilized and able to obtain a job in a school. She testified that she was able to resume her life after a 60-day "detox," and was able to completely "detox" after a year and a half. As a result of her methadone treatment, she testified that she was drug free. Plaintiff also put on videotape evidence of Wayne Crabtree, a program director of a methadone clinic in Louisville. Crabtree testified that his clinic had experienced no acts of violence committed against anyone in the community, although he stated that there once had been a problem between two clients. Essentially, he stated that his clinic operated without incident.

The Board of Adjustment voted to overrule Hopper's decision and revoked the zoning permit. Plaintiff appealed the Board of Adjustment's decision to the state circuit court. However, the appeal was dismissed for failure to name a necessary party.

During the spring of 1998, Plaintiff contacted Hopper again about obtaining another location in the city, at 1 West 43rd Street. The site had been a doctor's office, and it was located in a shopping center zone. The site was in front of the City's trash compacting station, bordering an industrial zone, and separated from housing by a four-lane highway. The building was in a location with good public transportation, was affordable and was available. Hopper again thought this use would be a permitted use...