Truesdell v. Friedlander

• Decision Date: 09 September 2022
• Docket Number: CIVIL 3:19-cv-00066-GFVT
• Parties: PHILLIP TRUESDELL, et al., Plaintiffs, v. ERIC FRIEDLANDER, et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

PHILLIP TRUESDELL, et al., Plaintiffs, v. ERIC FRIEDLANDER, et al., Defendants.

CIVIL No. 3:19-cv-00066-GFVT

United States District Court, E.D. Kentucky, Central Division

September 9, 2022

MEMORANDUM OPINION & ORDER

Gregory F. Van Tatenhove, United States District Judge.

This matter is before the Court on the parties' cross-motions for summary judgment. [R. 98; R. 105; R. 107.] For the reasons set forth herein, Plaintiff Legacy Medical Transport LLC's motion for summary judgment [R. 105] will be DENIED, Defendant Eric Friedlander's motion for summary judgment as to subject matter jurisdiction [R. 98] will be DENIED, and Secretary Friedlander's motion for summary judgment as to the dormant Commerce Clause [R. 107] will be GRANTED.^[1]

I

Plaintiff Phillip Truesdell is the owner of Plaintiff Legacy Medical Transport, LLC, which is a “ground ambulance business” located in Ohio approximately one mile from the Kentucky border. [R. 63 at 2.] The Court's May 2 2022, Memorandum Opinion and Order provided the factual background of this case, and the Court will therefore only provide the facts and procedural history necessary to address the present motions.

On September 24, 2019, Legacy filed the Complaint in this matter and argued that Kentucky's Certificate of Need (CON) regulations, specifically the protest procedure and need requirement, violated the dormant Commerce Clause, Due Process Clause, Equal Protection Clause, and the Privileges or Immunities Clause of the Fourteenth Amendment. [R. 1 at 11-14.]

As the Court has addressed in previous orders, the need requirement and protest procedure are two components of the Certificate of Need application process for a business to operate ground ambulance services in Kentucky. Legacy is not contesting any other aspects of the certification process in this litigation.

Under the need requirement, a “proposal shall meet an identified need in a defined geographic area and be accessible to all residents of the area.” KRS 216B.040(2)(a). The protest procedure allows “Affected Persons” to request a hearing on a CON application and to present evidence for the hearing officer at the public hearing to consider. KRS 216B.085; 900 KAR 6:090, Sec. 3. “Affected persons” include:

the applicant; any person residing within the geographic area served or to be served by the applicant; any person who regularly uses health facilities within that geographic area; health facilities located in the health service area in which the project is proposed to be located which provide services similar to the services of the facility under review; health facilities which, prior to receipt by the agency of the proposal being reviewed, have formally indicated an intention to provide similar services in the future; and the cabinet and third-party payors who reimburse health facilities for services in the health service area in which the project is proposed to be located.

KRS 216B.015.

Legacy is not challenging the denial of its Certificate of Need or seeking money damages. [R. 63 at 3, 13.] Instead, Legacy is seeking prospective declaratory and injunctive relief. Id. at 13, 19-20. On October 29, 2019, Secretary Friedlander filed his first Motion to Dismiss. [R. 16.] In response, Legacy amended its Complaint on November 19, which mooted Secretary Friedlander's Motion to Dismiss. [R. 17; see also R. 57 at 18.] Secretary Friedlander filed his second Motion to Dismiss on January 17, 2020. [R. 33.] On February 5, the Court granted Patient Transport Services, Inc.'s Motion to Intervene, and Patient Transport Services filed a Motion to Dismiss the same day.^[2] [R. 34; R. 36.]

On August 5, 2020, the Court denied Secretary Friedlander's Motions to Dismiss as to the dormant Commerce Clause claim and granted the motion as to Legacy's Due Process, Equal Protection, and Privileges and Immunities claims. [R. 57 at 18.] On September 30, Legacy filed a Motion to Amend the First Amended Complaint, which the Court granted on August 24, 2021. [R. 62; R. 75.] On September 7, 2021, Secretary Friedlander filed two motions to dismiss all the claims in this case. [R. 78; R. 79.] On May 3, 2022, the Court granted Secretary Friedlander's motions to dismiss as to the Due Process, Equal Protection, and Privileges or Immunities claims and denied the motion as to the dormant Commerce Clause claim. [R. 94 at 15.] On May 20, following the close of discovery, Secretary Friedlander filed a motion for summary judgment arguing that Legacy lacked standing. [R. 98.]

On July 15, the parties filed cross-motions for summary judgment on the dormant Commerce Clause claim, which is the only remaining claim. [R. 105; R. 107.] Secretary Friedlander argues that Kentucky's CON program does not impose a burden on the national ground ambulance market and that the putative local benefits of Kentucky's CON program “are well documented and not merely speculative.” [R. 105-1.] Legacy argues that (1) the burdens imposed on interstate commerce “outweigh any putative local benefits;” and (2) Kentucky's Certificate requirement is per se unconstitutional to the extent it applies to wholly interstate transport. [R. 107.]

The parties requested oral argument on their dormant Commerce Clause summary judgment motions. [R. 105 at 2; 107 at 1.] However, the Court finds that the parties' briefing is sufficient to address the summary judgment motions and that oral argument is unnecessary. See, e.g., Scott v. Metro. Health Corp., 234 Fed.Appx. 341, 339 (6th Cir. 2007) (finding “dispositive motions are routinely decided on papers filed by the parties, without oral arguments, just as this court often hears and determines appeals without oral argument”) (citing Commodities Export Co. v. United States Customs Serv., 888 F.2d 431, 439 (6th Cir. 1989)); Schentur v. United States, 1993 WL 330640, at *5 (6th Cir. 1993) (finding “this court has stated that district courts may dispense with oral argument on motions for ‘any number of sound judicial reasons'”) (quoting Yamaha Corp. of America v. Stonecipher's Baldwin Pianos & Organs, 975 F.2d 300, 301, n. 1 (6th Cir.1992); Carter v. Porter, 2012 WL 298479, at *3 (E.D. Ky. Feb. 1, 2012) (noting that while Local Rule 7.1 permits parties to request oral argument, the decision to grant that request is within the court's discretion).

II

Summary judgment is appropriate when the pleadings, discovery materials, and other documents in the record show “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); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). “A genuine dispute exists on a material fact, and thus summary judgment is improper, if the evidence shows ‘that a reasonable jury could return a verdict for the nonmoving party.'” Olinger v Corp. of the Pres. of the Church, 521 F.Supp.2d 577, 582 (E.D. Ky. 2007) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).

The moving party bears the initial burden of demonstrating the basis for its motion and identifying those parts of the record that establish the absence of a genuine issue of material fact. Chao v. Hall Holding Co., Inc., 285 F.3d 415, 424 (6th Cir. 2002). The movant may satisfy its burden by showing “that there is an absence of evidence to support the non-moving party's case.” Celotex Corp., 477 U.S. at 325. Once the movant has satisfied this burden, the nonmoving party must go beyond the pleadings and come forward with specific facts demonstrating there is a genuine issue in dispute. Hall Holding, 285 F.3d at 424 (citing Celotex Corp., 477 U.S. at 324).

The Court then must determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1310 (6th Cir. 1989) (quoting Anderson, 477 U.S. at 251-52). In making this determination, the Court must review the facts and draw all reasonable inferences in favor of the non-moving party. Logan v. Denny's, Inc., 259 F.3d 558, 566 (6th Cir. 2001).

A

Secretary Friedlander's first motion for summary judgment challenges Legacy's Article III standing, which is a challenge to subject matter jurisdiction. See Accord v Anderson Cnty., Tenn., 2021 WL 6135691, at *2 (M.D. Tenn. Dec. 28, 2021) (citing Tenn. Gen. Assembly v. U.S. Dep't of State, 931 F.3d 499, 507 (6th Cir. 2019)). “Standing is a threshold question in every federal case.” Coal Operators & Assocs., Inc. v. Babbitt, 291 F.3d 912, 915 (6th Cir. 2002) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). Article III's “irreducible constitutional minimum” of standing has three elements. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The plaintiff must: (1) have suffered “an ‘injury-in-fact' - an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual an imminent, not conjectural and hypothetical;” (2) show that the injury is “fairly traceable to the challenged action of the defendant;” and (3) show that it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” White v. United States, 601 F.3d 545, 551 (6th Cir. 2010) (quoting Lujan, 504 U.S. at 560-61). “The party invoking federal jurisdiction bears the burden of establishing these three elements.” Lujan, 504 U.S. at 561.

Secretary Friedlander argues that Legacy lacks standing because Legacy cannot satisfy the redressability prong. [R. 98 at 11.] Secretary Friedlander specifically argues that Legacy “would not be able to operate in Kentucky because they would not meet the remaining CON criteria or Kentucky's ambulance licensure regulations that they are...