Aaron Private Clinic Management LLC v. Commissioner of the Georgia Department of Community Health

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-15144
________________________
D.C. Docket No. 1:17-cv-01034-WSD
AARON PRIVATE CLINIC MANAGEMENT LLC,
Plaintiff-Appellant,
versus
FRANK W. BERRY, in his official capacity as Commissioner of the Georgia
Department of Community Health, and
NATHAN DEAL, in his official capacity as Governor of Georgia,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_______________________
(January 4, 2019)
Before TJOFLAT, WILLIAM PRYOR, and GILMAN, * Circuit Judges.
WILLIAM PRYOR, Circuit Judge:
* Honorable Ronald L. Gilman, United States Circuit Judge for the Sixth Circuit, sitting by
designation.
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This appeal requires us to decide whether a limited liability company that
made preliminary plans to operate a methadone clinic has standing to challenge
state laws that restrict the licensure of narcotic-treatment facilities. Aaron Private
Clinic Management sued certain Georgia officials after two Georgia laws
temporarily suspended the issuance of new licenses for narcotic-treatment facilities
and imposed additional licensing requirements for future facilities. The district
court dismissed the action for lack of standing. Because the challenge to the
moratorium is in part moot and because we agree with the district court that Aaron
lacks standing to assert its other claims, we affirm.
I. BACKGROUND
Aaron Private Clinic Management is a for-profit company that asserts that it
“intends to meet the standards to establish an [opioid-treatment program] in
Georgia.” Frank Berry is the commissioner for the Georgia Department of
Community Health and, in that capacity, oversees the agency that issues licenses
for narcotic-treatment facilities in Georgia. Nathan Deal is the governor of
Georgia, and he has the ultimate authority to direct and control the operations of
the Georgia Department of Community Health.
In May 2017, Aaron filed a complaint alleging that two Georgia statutes
violate section 504 of the Rehabilitation Act, 29 U.S.C. § 794, and Title II of the
Americans with Disabilities Act, 42 U.S.C. § 12132. First, Aaron challenges a
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2016 statute, which it calls the “Licensing Moratorium,” that enacted “[a]
temporary moratorium on the acceptance of new applications for licensure of
narcotic treatment programs,” O.C.G.A. § 26-5-21(e). The Licensing Moratorium
prohibited new applications from being accepted between June 1, 2016, and June
30, 2017. Id. § 26-5-21(f). Second, Aaron challenges a 2017 statute, which it calls
the “License Cap,” that supersedes the Licensing Moratorium and provides that
Georgia’s Department of Community Health must establish minimum standards of
quality for narcotic-treatment programs and provides for annual or biannual open-
enrollment periods for program applications, see id. § 26-5-40 et seq. The License
Cap also extended the prohibition on accepting new licensure applications from
June 30, 2017, to December 1, 2017. Id. § 26-5-46(d).
Aaron contends that the Licensing Moratorium and License Cap block it
from establishing an opioid-treatment program and impose “arbitrary restrictions
and burdens” on methadone clinics. Aaron asserts that it sues on its own behalf and
“on behalf of its prospective patients who are opiate-addicted, who are qualified
disabled under the [Americans with Disabilities Act], and who are prospective
patients of [Aaron].” Counts one through four of the complaint assert that the
Licensing Moratorium and the License Cap are facially invalid under the
Rehabilitation Act and the Americans with Disabilities Act. Counts five and six
assert an equal-protection challenge to the statutes, contending that “the State of
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Georgia’s actions and disparate treatment . . . cause disproportionate impact to
[Aaron] and the disabled persons [Aaron] intends to serve.” Aaron requests an
award of compensatory damages and litigation expenses, a permanent injunction
enjoining the defendants from continuing to violate the Americans with
Disabilities Act and the Rehabilitation Act by “denying or delaying [Aaron’s]
ability to locate an [opioid-treatment program]” in Georgia, and a declaration that
the challenged statutes are void and unenforceable.
In its complaint, Aaron alleges few facts about its plan to establish a
methadone clinic. Aaron first alleges that it is a Georgia limited liability company
with a principal place of business at 4403 Northside Parkway NW, Suite 1413,
Atlanta, Georgia 30327. This address is the same as that of the law office of
Aaron’s counsel, James A. Dunlap. Aaron also alleges that it will use the “latest
medical technologies, including methadone maintenance treatment, to address the
physical symptoms of [opioid] addiction in combination with . . .
psychotherapeutic interventions.” Aaron further alleges that its prospective opiate-
addicted clients are disabled under the Rehabilitation Act and the Americans with
Disabilities Act, and that Aaron’s programs will operate as “supervised
rehabilitation programs” for persons with disabilities as described under federal
law. And Aaron alleges in each count of the complaint that the challenged statutes
have caused it to expend additional time and financial resources, to lose the
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opportunity to conduct its business, and to incur “additional costs and expenses,
attorney’s fees, interest, and cost of capital” from “interference and delays with
planning, raising investment funds, hiring, and other normal processes related to
opening a business.” These allegations are all the complaint contains about
Aaron’s plan to establish a methadone clinic.
Although Aaron offers few specifics about its proposed clinic, its complaint
includes more detailed allegations about the need for methadone clinics in Georgia.
Aaron alleges that the annual number of opioid overdose deaths in Georgia is
skyrocketing, rising from roughly 200 in 2006 to nearly 1,000 in 2015. Aaron
further asserts that many of Georgia’s methadone clinics are currently overcapacity
and cannot accept new patients. Aaron also contends that the lack of capacity
causes a variety of harms to opioid-addicted persons, who face price gouging,
longer travel and wait times, and a lack of competition for treatment options. And
Aaron cites evidence suggesting that methadone treatment has proven to be
effective in reducing the number of drug overdoses in a community.
After Aaron filed its complaint, the defendants moved to dismiss on several
grounds, including for lack of standing. The district court granted the motion to
dismiss. The court first determined that the complaint fails to establish that Aaron
directly suffered an injury in fact that is “actual or imminent, not ‘conjectural’ or
‘hypothetical.’” The court explained that the complaint alleges at most that Aaron
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was in the early stages of the planning process, not that it would have been
prepared to offer treatment to its prospective clients but for the challenged statutes.
The court also stated that, although Aaron labels the requirements imposed by the
License Cap as “arbitrary and discriminatory,” it fails to identify any “specific
rules with which it cannot comply, and does not allege why they are discriminatory
or how they prevent [it] from establishing its clinic in the future.” And the court
observed that Aaron has not alleged that it had applied for a license and been
denied, that it would be prevented from participating in the open enrollment for
new licensure applications, or that it would be unsuccessful in such applications if
they were submitted. The district court also rejected Aaron’s contention that it had
third-party standing to assert the injuries suffered by its prospective clients. The
district court ruled that Aaron’s third-party-standing argument failed because
Aaron did not establish that it has suffered an injury in fact, that it has a close
relationship to a third party that is being discriminated against, and that there is
some hindrance to the third party’s ability to protect his or her own interests. See
Young Apartments v. Town of Jupiter, 529 F.3d 1027, 1042 (11th Cir. 2008).
Finally, the district court ruled that, even if Aaron had sufficiently alleged direct or
third-party standing, it lacks statutory standing to assert these claims under either
the Rehabilitation Act or the Americans with Disabilities Act.
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II. STANDARD OF REVIEW
We review the dismissal of a complaint de novo. Culverhouse v. Paulson &
Co., 813 F.3d 991, 993 (11th Cir. 2016).
III. DISCUSSION
We divide our discussion in three parts. First, we explain that Aaron’s
request for declaratory and injunctive relief regarding the temporary moratorium
on the acceptance of new licensure applications is moot. Second, we explain that
Aaron has failed to establish that it has direct standing. Third, we explain that
Aaron has failed to establish that it has third-party standing to assert the injuries of
its prospective clients.
A. Aaron’s Request for Declaratory and Injunctive Relief Regarding the
Temporary Moratorium is Moot.
Although the district court did not consider and the parties have not briefed
the issue of mootness, “[i]t is incumbent upon this court to consider issues of
mootness sua sponte and, absent an applicable exception to the mootness doctrine,
to dismiss any appeal that no longer presents a viable case or controversy.” Hunt v.
Aimco Props., 814 F.3d 1213, 1220 (11th Cir. 2016) (quoting Pac. Ins. Co. v. Gen.
Dev. Corp., 28 F.3d 1093, 1096 (11th Cir. 1994)). “A case is moot when it no
longer presents a live controversy with respect to which the court can give
meaningful relief.” Id. (quoting Ethredge v. Hail, 996 F.2d 1173, 1175 (11th Cir.
1993)). Absent exceptional circumstances, a challenge to the enforcement of a
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statute becomes moot when that law is no longer effective. See Burke v. Barnes,
479 U.S. 361, 363 (1987) (explaining that challenges to an expired statute, like
those made to a repealed statute, are moot). And although the district court did not
rely on mootness in dismissing the complaint, “[w]e may affirm on any ground
supported by the record, regardless of whether that ground was relied upon or even
considered below.” Waldman v. Conway, 871 F.3d 1283, 1289 (11th Cir. 2017).
As Aaron acknowledged at oral argument, its request for declaratory and
injunctive relief about the Licensing Moratorium was rendered moot by the
expiration of the moratorium in June 2017, and its similar request about the
License Cap’s extension of the moratorium was rendered moot when that provision
expired in December 2017. Because no exception to the mootness doctrine applies
to these requests for declaratory and injunctive relief, they are moot, and we affirm
the dismissal of them.
B. Aaron Has Failed to Establish that It Has Article III Standing.
The district court ruled, and we agree, that Aaron lacks direct standing
because it failed to plead facts establishing that it had directly suffered an actual or
imminent injury in fact. Article III of the Constitution limits the subject-matter
jurisdiction of federal courts to “Cases” and “Controversies.” U.S. Const. Art. III,
§ 2. Standing “is the threshold question in every federal case, determining the
power of the court to entertain the suit.” Warth v. Seldin, 422 U.S. 490, 498 (1975).
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“In the absence of standing, a court is not free to opine in an advisory capacity
about the merits of a plaintiff’s claims, and the court is powerless to continue.”
CAMP Legal Def. Fund, Inc. v. City of Atlanta, 451 F.3d 1257, 1269 (11th Cir.
2006) (citations and internal quotation marks omitted).
To establish its Article III standing, Aaron must satisfy three requirements.
First, it “must have suffered an injury in fact—an invasion of a legally protected
interest which is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560
(1992) (citations and internal quotation marks omitted). Second, “there must be a
causal connection between the injury and the conduct complained of—the injury
has to be fairly traceable to the challenged action of the defendant.” Id. (alterations
adopted) (internal quotation marks omitted). Third, “it must be likely, as opposed
to merely speculative, that the injury will be redressed by a favorable decision.” Id.
at 561 (internal quotation marks omitted).
Each element of standing is “an indispensable part of the plaintiff’s case”
and “must be supported in the same way as any other matter on which the plaintiff
bears the burden of proof, i.e., with the manner and degree of evidence required at
the successive stages of the litigation.” Id. “While the proof required to establish
standing increases as the suit proceeds, the standing inquiry remains focused on
whether the party invoking jurisdiction had the requisite stake in the outcome when
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the suit was filed.” Davis v. Fed. Election Comm’n, 554 U.S. 724, 734 (2008)
(citation omitted).
To satisfy its burden at the pleading stage, a plaintiff must “clearly allege
facts demonstrating each element,” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547
(2016) (alteration adopted) (citation and internal quotation marks omitted), and we
evaluate standing on a motion to dismiss based on the facts alleged in the
complaint, Houston v. Marod Supermarkets, Inc., 733 F.3d 1323, 1335 (11th Cir.
2013). To adequately allege injury in fact, it is not enough that a complaint “‘sets
forth facts from which we could imagine an injury sufficient to satisfy Article III’s
standing requirements,’ since ‘we should not speculate concerning the existence
of standing, nor should we imagine or piece together an injury sufficient to give
plaintiff standing when it has demonstrated none.’” Bochese v. Town of Ponce
Inlet, 405 F.3d 964, 976 (11th Cir. 2005) (quoting Miccosukee Tribe of Indians v.
Fla. State Athletic Comm’n, 226 F.3d 1226, 1229–30 (11th Cir. 2000)). “If the
plaintiff fails to meet its burden, this court lacks the power to create jurisdiction by
embellishing a deficient allegation of injury.” Id.Aaron contends that it suffered three injuries sufficient to establish its
standing under Article III. First, Aaron asserts that the Licensing Moratorium and
License Cap precluded or hindered it from developing an opioid-treatment
program in Georgia and caused it to suffer lost profits. Second, Aaron alleges that
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the challenged statutes caused it to incur “additional costs and expenses, attorney’s
fees, interest, and cost of capital” from “interference and delays with planning,
raising investment funds, hiring, and other normal processes related to opening a
business.” Third, Aaron alleges that the challenged statutes discriminate against
and stigmatize it. We address each proffered injury in turn and determine that
Aaron has failed to establish its Article III standing.
1. Aaron’s Alleged Injury Based on Lost Profits Is Insufficient to Establish
Standing.
We begin with Aaron’s assertion that the challenged statutes thwarted its
plan to open a methadone clinic and caused it to suffer lost profits. The district
court concluded that this alleged injury was speculative. We agree with the district
court.
Although the complaint alleges that Aaron aspired to open a methadone
clinic someday, it offers no facts suggesting that the “someday” was imminent or
that Aaron had any concrete plan in place for bringing its clinic into operation. The
most that the complaint alleges Aaron has done is form a limited liability company
that will serve as a management company for future methadone clinics, and it
vaguely alleges “interference and delays with planning, raising investment funds,
hiring, and other normal processes related to opening a business.” But these
allegations are a far cry from alleging that, absent the challenged statutes, Aaron
immediately intended to bring, and actually could bring, its clinic into operation.
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And Aaron has failed to allege that it has taken any concrete steps—such as
selecting a clinic location, securing a lease option, consulting with relevant
government officials, applying for the necessary permits or certifications, or
associating with potential clients—that suggest such an immediate intention or
plan. Because Aaron has alleged only that it intends to found a clinic at some
unspecified time in the future, its “‘some day’ intention[]—without any description
of concrete plans, or indeed even any specification of when the some day will be—
do[es] not support a finding of . . . ‘actual or imminent’ injury.” Lujan, 504 U.S. at
564.
Ample precedent makes clear that Aaron must allege more than a bare
intention to someday found a clinic. In Village of Arlington Heights v.
Metropolitan Housing Development Corp., 429 U.S. 252 (1977), and Jackson v.
Okaloosa County, 21 F.3d 1531 (11th Cir. 1994), the Supreme Court and this
Court held that plaintiffs alleging injuries related to proposed housing projects had
to establish, among other things, a “substantial probability” that the projects would
come into existence absent the challenged action. See Arlington Heights, 429 U.S.
at 264; Jackson, 21 F.3d at 1537–38. The plaintiffs in both decisions—unlike
Aaron—met this burden by pointing to specific and concrete facts that suggested
such a substantial probability. See Arlington Heights, 429 U.S. at 255–58
(observing that the developer of a proposed housing project was already in the
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business of building similar housing projects, had entered into a 99-year lease and
an accompanying agreement to purchase the land for the proposed project, had
hired an architect and produced detailed plans for the project, and had submitted a
variety of detailed plans and reports as a part of a petition for rezoning); Jackson,
21 F.3d at 1537–38 (observing that the bidding process for the proposed housing
project was nearly completed, the project’s sources of funding were established,
and a bidder had submitted a bid to construct the facility at a specific proposed
site). And, in other factual contexts, the Supreme Court has repeatedly explained
that a plaintiff asserting that it would have engaged in an activity absent the
challenged statute must establish that it was “able and ready” to do so. See, e.g.,
Gratz v. Bollinger, 539 U.S. 244, 262 (2003) (explaining that the plaintiff had
standing to challenge affirmative-action policies at the defendant university
because he established that he was “able and ready” to apply once the university
stopped using race in admissions); Ne. Fla. Chapter, Associated Gen. Contractors
of Am. v. City of Jacksonville, 508 U.S. 656, 666 (1993) (holding that the plaintiffs
had standing to challenge an ordinance giving preferential treatment to minority-
owned businesses because they “demonstrate[d] that [they were] able and ready to
bid on contracts” (emphasis added)); Clements v. Fashing, 457 U.S. 957, 962
(1982) (holding that plaintiff officeholders had standing because they credibly
alleged that they would have announced their candidacy for other offices but for
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the “automatic resignation” provision they were challenging). It is not enough for
Aaron to allege that there exists a need for methadone clinics in Georgia in the
absence of facts that would suggest its readiness to supply that need.
A plaintiff alleging that it would have opened a business absent the
challenged action must point to at least some facts suggesting a likelihood that its
business would have come about absent the challenged action. Aaron has alleged
no supporting facts suggesting this likelihood. So its first assertion of injury fails.
2. Aaron’s Alleged Injury Based on Additional Costs and Expenses Related to the
Challenged Statutes Is Insufficient to Establish Standing.
Aaron’s second asserted injury—that it incurred “additional costs and
expenses, attorney’s fees, interest, and cost of capital” from “interference and
delays with planning, raising investment funds, hiring, and other normal processes
related to opening a business”—also fails to suffice. The threadbare allegations of
additional costs, expenses, and attorney’s fees are so vague that they do not
establish any of the elements of Article III standing. We cannot divine what these
allegedly incurred costs are referring to, and so we cannot assess whether they give
Aaron a sufficient stake in this appeal, whether they are fairly traceable to the
challenged statutes, or whether they will be redressed by a favorable decision. See
Warth, 422 U.S. at 508 (holding that a plaintiff must plead “specific, concrete facts
demonstrating that the challenged [action] harm[s] him, and that he personally
would benefit in a tangible way from the court's intervention” (emphasis altered)).
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As to the allegation of “interest[] and cost of capital,” it appears that Aaron is
suggesting that it has some capital available for its clinic and that the challenged
statutes have prevented it from putting these funds to productive use. But because
Aaron has failed to allege a likelihood that its proposed clinic would imminently
have come into existence absent the challenged statutes, it cannot assert that the
challenged statutes, instead of Aaron’s lack of concrete plans to establish its clinic,
caused this injury.
3. Aaron’s Alleged Injury Based on Stigmatization and Discrimination Is
Insufficient to Establish Standing.
We also conclude that Aaron fails to establish its direct standing based on its
allegation that the challenged statutes discriminate against and stigmatize it. A
plaintiff alleging a stigmatic injury based on discrimination must point to “some
concrete interest with respect to which [he] [is] personally subject to
discriminatory treatment,” and “[t]hat interest must independently satisfy the
causation requirement of standing doctrine.” Allen v. Wright, 468 U.S. 737, 757
n.22 (1984), abrogated on other grounds by Lexmark Int’l, Inc. v. Static Control
Components, 572 U.S. 118 (2014). Here, even if the challenged statutes
discriminate against opioid-addicted persons who are disabled, Aaron has not
established that it is among the class of persons whose concrete interests are
affected by discriminatory treatment. Aaron is a non-disabled entity, and its claims
of direct injury are speculative. Because Aaron has not been subjected to
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discriminatory treatment, we agree with the district court that Aaron’s vague
assertions of stigma and discrimination cannot establish its direct standing.
4. Aaron’s Remaining Arguments Regarding Standing Do Not Persuade Us.
Aaron responds that it has standing because other federal courts have held
that plaintiffs whose attempts to establish methadone clinics were thwarted by
local regulations had standing to challenge those regulations, but those other
decisions involved plaintiffs who had taken far more concrete steps than Aaron has
allegedly taken. See, e.g., A Helping Hand, LLC v. Baltimore Cty., 515 F.3d 356,
358–62 (4th Cir. 2008) (observing that the plaintiff “unquestionably” met the
Article III standing requirements where it (1) was in the business of operating
methadone clinics, (2) located a particular clinic location and signed a lease, (3)
consulted with local officials about founding its clinic, (4) applied for the required
federal and state certifications and permits, (5) submitted detailed plans about the
requested clinic site to county officials, and (6) associated with specific
prospective patients who joined as plaintiffs to the lawsuit); see also New
Directions Treatment Servs. v. City of Reading, 490 F.3d 293 (3d Cir. 2007);
Addiction Specialists, Inc. v. Twp. of Hampton, 411 F.3d 399 (3d Cir. 2005); MX
Grp., Inc. v. City of Covington, 293 F.3d 326 (6th Cir. 2002). None of these
decisions persuades us that Aaron has standing.
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Aaron asserts that the lack of specific factual allegations about its plan to
establish a clinic should be excused because, by failing to take actions to establish
its clinic, Aaron was mitigating its damages in preparation for this suit. Yet Aaron
has cited no authority suggesting that the Article III requirements for a prospective
business should be set aside whenever a duty to mitigate might be implicated.
Aaron must point to “specific, concrete facts demonstrating that the challenged
[statutes] harm” it, Warth, 422 U.S. at 508, regardless of any duty it had to mitigate
damages.
Aaron argues that the moratorium “preemptively blocked” the formation of
relationships with potential clients. But in the absence of any non-speculative
reasons to believe Aaron would have imminently opened a methadone clinic but
for the challenged statutes, this argument merely piles speculation on speculation.
Aaron points out that the enforcement provision of Title II of the American
with Disabilities Act states that an action may be brought by “any person alleging
discrimination on the basis of disability.” 42 U.S.C. § 12133. Even if this provision
gave Aaron a cause of action—which we do not decide—“it is settled that
Congress cannot erase Article III’s standing requirements by statutorily granting
the right to sue to a plaintiff who would not otherwise have standing.” Spokeo, 136
S. Ct. at 1547–48 (alteration adopted) (citation and internal quotation marks
omitted).
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C. Aaron Has Failed to Establish that It Has Third-Party Standing.
We also agree with the district court that Aaron lacks third-party standing to
assert the injuries suffered by its prospective clients. A plaintiff must satisfy three
criteria to bring claims on behalf of third parties: (1) the plaintiff must have
suffered an “injury-in-fact” that gives it a “sufficiently concrete interest” in the
dispute; (2) the plaintiff must have a close relationship to the third party; and (3)
there must be a hindrance to the third party’s ability to protect its own interests.
Young Apartments, 529 F.3d at 1042 (citation omitted). Because we have held that
Aaron lacks an injury in fact, its third-party-standing argument fails. And we need
not reach the question whether Aaron also lacks statutory standing to assert third-
party claims under the Rehabilitation Act and the Americans with Disabilities Act.
IV. CONCLUSION
We AFFIRM the dismissal of Aaron’s complaint for lack of jurisdiction.
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