Mx Group, Inc. v. City of Covington

• Decision Date: 08 August 2000
• Docket Number: No. CIV. A. 98-7.,CIV. A. 98-7.
• Citation: 106 F.Supp.2d 914
• Parties: MX GROUP, INC., et al., Plaintiff, v. CITY OF COVINGTON, et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

106 F.Supp.2d 914

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

No. CIV. A. 98-7.

United States District Court, E.D. Kentucky, at Covington.

August 8, 2000.

William C. Oldfield, David E. Davidson, Cobb & Oldfield, Covington, KY, for Plaintiff.

Stephen T. McMurtry, McMurtry & Wolff, Covington, KY, for Defendant.

OPINION AND ORDER

BERTELSMAN, District Judge.

This matter arises out of the efforts of the plaintiff, MX Group, Inc., to open a methadone treatment clinic in the City of Covington, Kentucky.

The action arises under the Americans with Disabilities Act (ADA) and Rehabilitation Act¹ and the plaintiffs' contentions that the denial of a permit for the clinic also violates their constitutional rights to substantive due process and equal protection.²

Inasmuch as the court has concluded that the defendants have violated the ADA with regard to the clinic it is unnecessary to address the other issues. The case was tried without a jury and submitted on the transcript and briefs. Pursuant to FED. R. CIV.P. 52, the court renders the following as its Findings of Fact and Conclusions of Law herein.

FINDINGS OF FACT

The facts are largely undisputed. The plaintiff, MX Group, Inc., has been attempting to establish a methadone treatment clinic in Covington since February 1997. The goal of a methadone treatment program is to have the patient drug free in two and one-half years. Relapses by the patient are not uncommon.

Methadone treatment is regulated by both the federal and state authorities. The Food & Drug Administration, as well as the state narcotics authorities, have established requirements for methadone treatment facilities. Methadone is a useful program to treat drug abuse.

In the summer of 1997, MX began the process of finding a place to open its clinic. Federal and state regulations are specific about the space required. In order to find a suitable location, MX contacted a local commercial realtor, Chuck Eilerman.

The activities of MX Group did not escape the attention of the City of Covington. Ralph Hopper, the City's former zoning administrator, testified that he was aware of MX Group from newspaper articles he had read. Hopper testified that he knew the business of MX — methadone treatment of those addicted to the use of opiates — would be controversial, and he advised his superiors that the controversy was coming. Hopper also testified that he spoke about MX with the City's Economic Development Director, Ella Frye, and the City Manager, Greg Jarvis, before the zoning permit was sought and issued. He testified that this was not a normal procedure for him in his job as zoning administrator.

In August 1997, MX found a location that was suitable for its operation at the building known as Covington Station³ at 200 West Pike Street in Covington. This location was accessible, affordable and available. MX entered into a lease agreement with the owner of part of the building. The building is an office condominium, and Bernie Beck was an owner of a majority of the space.

After the location was chosen and the lease was signed, Melissa Fabian, an employee of MX, went to the City's zoning office and spoke with Ralph Hopper about the needed permit to open the clinic. The zoning permit application was completed by Mr. Hopper based upon information provided by Ms. Fabian. Mr. Hopper determined that the clinic fit within the zone in which the clinic intended to locate, the Covington Business District, which allowed medical offices. Mr. Hopper issued the zoning permit to MX on the day it was sought. About this time, William Dorsey, an Assistant Chief of Police, began an investigation into the secondary effects of methadone clinics.

Shortly after the zoning permit was issued, residents near 200 West Pike Street appeared at a City Commission meeting to express their displeasure. Assistant City Manager Tom Steidel was asked by the City Commission to conduct a public hearing in regard to the MX clinic. The purpose of this public hearing was unclear. There was no attendance taken at the hearing, and it is unclear whether any of the City Commissioners attended the meeting. The meeting, at the very least, was boisterous and had some angry and loud participants.

After the Steidel hearing, an owner of another portion of the Covington Station, Marc Tischbein, filed an appeal from the decision to issue the zoning permit. This appeal led to a hearing before the Covington Board of Adjustment in December 1997. In the time between the Steidel hearing and the Board of Adjustment hearing, there was much activity. Dorsey continued his investigation and spoke on many occasions with Hopper and Steidel, and Hopper met and consulted with members of the Covington Business Council who were working on ordinance changes to stop the opening of the methadone clinic.

Dorsey's investigation led to his testifying before the Board of Adjustment. He testified at that time that the conduct of clients of methadone clinics lead to a host of ill effects, including increased murders, robberies and other heinous actions in the neighborhood of the clinic. Increased drug usage and sales in the neighborhood of the clinic were also reported. He also testified that methadone clinics were nothing more than legal drug dispensing sites with little or no beneficial effect. Dorsey gave these opinions without any statistics or specifics about these supposed ill effects.

The Board of Adjustments overruled the Zoning Administrator and revoked the zoning permit.

MX appealed to the Kenton Circuit Court. This appeal was dismissed for lack of a necessary party under the prevailing zoning appeal statute.⁴ The Judgment of the Kenton Circuit Court stated that its dismissal was with prejudice. Upon subsequent motion by MX requesting the court to change the dismissal to one without prejudice, the court declined to change its characterization of its dismissal. No further appeals were taken, and the decision of the Kenton Circuit Court with regard to the site at 200 West Pike Street is now conceded by the plaintiff to be res judicata.

When the Covington Station location had been finally denied to the plaintiff, it began to look for another location. MX communicated with Hopper about other locations in the City where the clinic could go. Hopper told MX that the clinic would be permitted somewhere in the City.

MX's continued search for a location led to a site at 1 West 43^rd Street in Covington. This was a former medical building located in a shopping center zone. That zone permitted medical clinics.

The building was described for the court, and pictures of the building were introduced. The building was in a commercial area, near a shopping center, 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 available. When Hopper indicated the zone was appropriate for the clinic, MX agreed to rent the location.

Hopper knew that this new location would also be controversial, so he wrote a memo to City Manager Jarvis on March 17, 1998. This memo stated that it was Hopper's opinion that the clinic would be permitted in the shopping center zone. This memo led to a response from Joe Condit, the City Attorney for Covington. In short, Condit's letter stated that the methadone clinic was not a permitted use anywhere in the City. Hopper told MX that the clinic would not be permitted to open anywhere in the City of Covington.

The Covington Business Council had been working prior to the Board of Adjustment hearing to modify City ordinances to prohibit methadone clinics. This organization produced a report entitled "Preventing the Proliferation of Addiction Treatment Facilities in Covington." Pat Lance testified that he was the sole author of this document, though it was reviewed by legal counsel for the Covington Business Council.

Lance consulted with Hopper about this report and the ways in which to change the zoning ordinance to exclude the methadone clinic and any other new drug treatment programs. Lance testified that he did not conduct any type of hearing and that he knew about the nature of methadone treatment and clinic operation only from what Dorsey told him. Lance relied on the information provided by Dorsey and on the "very vocal concerns of neighborhood and business in drafting the ordinance." He testified that different information about methadone and methadone clinics would have made a difference in his opinion about the work he was doing. He made no claim to being objective in his approach to this issue.

The proposal from the Lance report ended up being the framework for an amendment to the zoning ordinance made by the City in June 1998. The amendment was to change the definition of "addiction treatment facility." The difference in the two definitions is set out in the testimony and exhibits. Ralph Hopper testified that the change had no effect other than to control addiction treatment facilities in the City and that the number of addiction treatment facilities permitted in the City would be limited to two.

In other words, after MX's efforts to open its methadone clinic at the Covington Station had been thwarted, its effort to open the clinic at a second site was also cut short by the adoption of an amendment to the Covington zoning ordinance prohibiting the opening of such a clinic in any zone in the City. That amendment reads in pertinent part as follows:

TITLE XV: LAND USAGE

CHAPTER 158. ZONING CODE

158.006 DEFINITIONS

For the purposes of this chapter the following definitions shall apply unless the context clearly indicates or requires a different meaning.

"ADDICTION TREATMENT FACILITY." Any building, structure or space whose principal or primary function is the reception, housing, and/or care of chemically dependent adults and/or their minor children, and which...