Newell-Davis v. Phillips

Case: 22-30166 Document: 00516576879 Page: 1 Date Filed: 12/13/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
December 13, 2022
No. 22-30166
Lyle W. Cayce
Clerk
Ursula Newell-Davis; Sivad Home and Community
Services, L.L.C.,
Plaintiffs—Appellants,
versus
Courtney N. Phillips, in her official capacity as
Secretary of the Louisiana Department of Health;
Julie Foster Hagan, in her official capacity as
Assistant Secretary of the Louisiana Department of
Health's Office for Citizens with Developmental
Disabilities; Facility Need Review Program Manager of
the Louisiana Department of Health; Ruth Johnson, in
her official capacity as Undersecretary of the
Louisiana Department of Health; Tasheka Dukes, in
her official capacity as Health Standards Section
Director of the Louisiana Department of Health,
Defendants—Appellees.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:21-CV-49
Before King, Stewart, and Haynes, Circuit Judges.
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Carl E. Stewart, Circuit Judge:
Ursula Newell-Davis (“Newell-Davis”) and Sivad Home and
Community, LLC (collectively “Sivad-Home”) appeal the district court’s
grant of a motion to dismiss and motion for summary judgment for the State
after Newell-Davis alleged numerous state and federal constitutional
violations in connection with the State’s Facility Need Review program
(“FNR” or “FNR program”). Because the FNR program survives rational
basis review and the Supreme Court has foreclosed Sivad-Home’s Privileges
or Immunities Clause claim, we AFFIRM.
I. Facts & Procedural History
A. Respite Care Licensing & Pre-Litigation Events
Louisiana law forbids individuals from offering respite care services 1
without first obtaining a license from the Louisiana Department of Health
(“LDH”). See La. Rev. Stat. § 40:2120.6. Before LDH conducts its
official review of a potential respite care business, it requires each prospective
business to apply to its FNR program. The FNR program permits LDH to
first “determine if there is a need for an additional [respite care] provider in
the geographic location for which the application is submitted.” La.
Admin. Code tit. 48 § 12523(C)(1). Businesses move past FNR if they can
establish “the probability of serious, adverse consequences to recipients’
ability to access health care if the provider is not allowed to be licensed.” Id.
at 12423(C)(2). A committee of four members reviews FNR applications
every two weeks and works closely with local governments to stay apprised
of pending needs in each respective locality.
1
See La. Admin. Code tit. 48 § 5003 (defining “respite care” as “an intermittent
service designed to provide temporary relief to unpaid, informal caregivers of the elderly and/or
persons with disabilities”).
2
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Newell-Davis is an entrepreneur and licensed social worker in New
Orleans. As the mother of a special needs child, she has an intimate
understanding of the demand for respite care services. At the request of
members of her community, she created Sivad Home and Community
Services, LLC with the intention of using her education and expertise to offer
additional respite care services in New Orleans. She sought to license her
business in accordance with state law and submitted an FNR application to
LDH. Without evaluating her qualifications, LDH denied Sivad-Home’s
application solely because it did not believe another respite care business was
necessary in New Orleans. Dissatisfied with her denial, she sued Courtney
Phillips—in her official capacity as Secretary of LDH—and various other
state entities (collectively the “State”) in federal district court.
B. District Court Proceedings
At the district court, Sivad-Home brought facial and as-applied
constitutional challenges to the FNR program under both federal and state
due process and equal protection clauses. She also brought a challenge under
the Fourteenth Amendment’s Privilege or Immunities Clause. Specifically,
she contended that FNR: (1) treated her “differently than others similarly
situated without serving any legitimate government interest”; (2) drew
“arbitrary and irrational distinction[s] between respite care providers who
may legally provide care and those who may not”; and (3) interfered with
citizens’ “right to earn a living in a chosen profession free from unreasonable
government interference.”
In response to Sivad-Home’s suit, LDH filed a Rule 12(b)(6) motion
to dismiss. LDH argued that that FNR is essentially an economic regulation
and, thus, subject to rational basis scrutiny, which FNR easily passed. The
district court granted LDH’s motion on the Privileges or Immunities clause
issue, holding that the clause only protects “uniquely federal rights,” and
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that “the right to earn a living in a lawful occupation of one’s choice” was
not “a uniquely federal right.” The district court, however, allowed Sivad-
Home’s equal protection, substantive due process, and state law claims to
survive.
After discovery, both parties filed cross-motions for summary
judgment. First, the district court analyzed Sivad-Home’s substantive due
process and equal protection claims, concluding that both were “governed
by the rational basis standard.” The district court reasoned “that FNR [was]
rationally related to the legitimate interest of enhancing consumer welfare”
because it allowed LDH “to prioritize [] post-licensure compliance surveys
that ensure client health, safety and welfare, over the resource intensive and
costly initial licensing surveys.” Therefore, it held that Sivad-Home did not
meet her “heavy burden to negative every conceivable basis which might
support FNR.”
Second, the district court addressed Sivad-Home’s state law claims,
noting that “Louisiana’s due process guarantee does not vary from the Due
Process Clause of the Fourteenth Amendment to the United States
Constitution.” Accordingly, it held that her “state law due process claim
failed for the same reason” as her federal claim. It also ruled against her state
equal protection clause claim, holding that she failed to show “that FNR does
not suitably further an appropriate state interest.” Ultimately, it granted
LDH’s motion for summary judgment on all three remaining issues. Sivad-
Home timely appealed.
On appeal, Sivad-Home asks this court to reconsider her: (1) due
process and equal protection claims under the Fourteenth Amendment of the
United States Constitution; (2) due process and equal protection claims
under Louisiana law; and (3) privileges or immunities claim under the
Fourteenth Amendment of the United States Constitution.
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II. Standard of Review
A. Due Process and Equal Protection Claims
Because these claims are before us “on cross motions for summary
judgment, we review the district court’s rulings de novo and construe all
evidence and inferences in favor of the non-moving parties.” Evanston Ins.
Co. v. Mid-Continent Cas. Co., 909 F.3d 143, 146 (5th Cir. 2018). We also
“examine each party’s motion independently.” Balfour Beatty Constr., LLC
v. Liberty Mut. Fire Ins. Co., 968 F.3d 504, 509 (5th Cir. 2020) (internal
quotations omitted). Summary judgment is only appropriate where “the
movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” United States v. Nature’s
Way Marine, LLC, 904 F.3d 416, 419 (5th Cir. 2018) (quoting Fed. R. Civ.
P. 56(a)). We may affirm the district court’s grant of summary judgment
“for any reason raised to the district court and supported by the record, and
we are not bound by the grounds articulated by the district court.” Hills v.
Entergy Operations, Inc., 866 F.3d 610, 614 (5th Cir. 2017).
B. Privileges or Immunities Clause Claim
We likewise review “a district court’s decision on a Rule 12(b)(6)
motion de novo, accepting all well-pleaded facts as true and viewing those
facts in the light most favorable to the plaintiff.” Ferguson v. Bank of New York
Mellon Corp., 802 F.3d 777, 780 (5th Cir. 2015). We confine our analysis to
“the facts stated in the complaint and the documents either attached to or
incorporated in the complaint.” Lovelace v. Software Spectrum, Inc., 78 F.3d
1015, 1017 (5th Cir. 1996). “To avoid dismissal, a plaintiff must plead
sufficient ‘facts to state a claim to relief that is plausible on its face.’”
Ferguson, 802 F.3d at 780 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)).
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III. Discussion
A. Federal & State Equal Protection Clause Claims
1. Federal Equal Protection Claim
The Equal Protection Clause of the Fourteenth Amendment provides
that “no State shall deny . . . to any person within its jurisdiction the equal
protection of the laws.” U.S. Const. amend. XIV. It “essentially requires
that all persons similarly situated be treated alike.” Mahone v. Addicks Util.
Dist. of Harris Cnty., 836 F.2d 921, 932 (5th Cir. 1988). To succeed on an
equal protection claim, a plaintiff must first demonstrate that “two or more
classifications of similarly situated persons were treated differently” under
the disputed statute. Duarte v. City of Lewisville, 858 F.3d 348, 353 (5th Cir.
2017). We then determine what level of scrutiny applies, which depends on
whether a protected class or fundamental right is implicated. Id. Where the
alleged violation is not predicated on a protected class or fundamental right,
we apply rational basis review. See Glass v. Paxton, 900 F.3d 233, 244 (5th
Cir. 2018). “Under that standard, a legislative classification must be
upheld . . . if there is any reasonably conceivable state of facts that could
provide a rational basis for the classification.” Id. at 244−45; see also FCC v.
Beach Commc’ns, Inc., 508 U.S. 307, 314−15 (1993) (noting that the Supreme
Court does not require “a legislature to articulate its reasons for enacting a
statute [because] it is entirely irrelevant for constitutional purposes whether
the conceived reasons for the challenged distinction actually motivated the
legislature”). Plaintiffs bear the heavy burden of negating “every conceivable
basis which might support” the legislative classification. Lehnhausen v. Lake
Shore Auto Parts Co., 410 U.S. 356, 364 (1973).
“Rational-basis review is guided by the principle that we don’t have a
license to judge the wisdom, fairness, or logic of legislative choices.” Hines
v. Quillivan, 982 F.3d 266, 273 (5th Cir. 2020). So, when “economic
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legislation is at issue, the Equal Protection Clause allows the States wide
latitude, and the Constitution presumes that even improvident decisions will
eventually be rectified by the democratic processes.” Id. (citing City of
Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 440 (1985)). While we
acknowledge that “rational-basis review gives broad discretion to
legislatures,” we have “made clear that ‘rational’ still must be actually
rational, not a matter of fiction.” Hines v. Quillivan, 982 F.3d 266, 273 (5th
Cir. 2020) (citing St. Joseph Abbey v. Castille, 712 F.3d 215, 223 (5th Cir.
2013)).
Turning to the merits, we now ask: (1) whether Sivad-Home alleges
that the FNR program treats similarly situated businesses differently, and (2)
what level of scrutiny controls our analysis. Regarding the first prong, the
State concedes that Sivad-Home receives different treatment compared to
similarly situated respite care services under the FNR program. With the first
prong satisfied, we move on to identifying the correct level of scrutiny with
which to analyze her constitutional allegations. Because her claims do not
implicate a protected class or violation of a fundamental right, we proceed
under rational basis review. 2 So, while we endeavor to “hypothesize a
legitimate purpose to support” the FNR program, Mahone, 836 F.2d at 934,
Sivad-Home must “negative every conceivable basis which might support”
the program. Lehnhausen, 410 U.S. at 364.
Here, the FNR program survives rational basis review because it
advances the State’s legitimate interest in enhancing consumer welfare.
LDH offers many legitimate reasons for its FNR regime. Of those reasons,
Sivad-Home has the most difficulty defeating the contention that LDH uses
2
Sivad-Home seemingly contends that LDH violated her fundamental right to
work and earn a living in a profession of her choice. As we later explain, infra Part III.2.C,
she cannot sustain this argument in light of Supreme Court precedent.
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the FNR program to advance its legitimate interest of enhancing consumer
welfare, and not purely for economic protectionism. 3 Sivad-Home aptly
points out that the Supreme Court has distinguished between the permissible
enhancing of consumer welfare and impermissible “pure economic
protectionism.” Hines, 982 F.3d at 274 (citing St. Joseph Abbey, 712 F.3d at
222−23). She contends that her expert witness, Dr. Matthew Mitchell,
demonstrated that the State almost certainly enacted the FNR program with
an eye towards economic protectionism. Specifically, she highlights that Dr.
Mitchell noted that it is at least “possible” that FNR was “passed as a
pretext for economic protectionism.” However, through her experts or
otherwise, Sivad-Home fails to rebut that this court permits the State to be
“motivated in part by economic protectionism” and still survive rational
basis review. See Greater Hous. Small Taxicab Co. Owners Ass’n v. City of
Houston, 660 F.3d 235, 240 (5th Cir. 2011) (holding that even if the city of
Houston was “motivated in part by economic protectionism, there is no real
dispute that promoting full-service taxi operations is a legitimate government
purpose under the rational basis test”).
At best, economic protectionism is an incidental result of the FNR
program. The record supports the State’s assertions that FNR permits
enhancement of consumer welfare by “allowing [LDH] to prioritize post-
licensure compliance surveys that ensure client health, safety and welfare,
over the resource intensive and costly initial licensing surveys.” For
example, by limiting the number of providers in the respite care business, the
State can focus its resources on a manageable number of providers, which aid
3
See Cooper v. Tex. Alcoholic Beverage Com’n, 820 F.3d 730, 741 (5th Cir. 2016)
(defining economic protectionism as “regulatory measures designed to benefit in-state
economic interests by burdening out-of-state competitors”).
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it in ensuring that consumers receive the best possible care in their
communities.
We acknowledge the uphill battle that plagues newcomers, like Sivad-
Home, to the Louisiana respite care industry, but that is not enough to hold
the FNR regime unconstitutional under rational basis review. Because Sivad-
Home fails to negate “every conceivable basis which might support” the
FNR program, we hold in favor of the State. Lehnhausen, 410 U.S. at 364.
2. State Equal Protection Claim
The Louisiana Supreme Court has interpreted Article I, Section 3 of
the Louisiana Constitution as follows:
Article I, Section 3 commands [Louisiana courts] to
decline enforcement of a legislative classification of
individuals in three different situations: (1) When the
law classifies individuals by race or religious beliefs, it
shall be repudiated completely; (2) When the statute
classifies persons on the basis of birth, age, sex,
culture, physical condition, or political ideas or
affiliations, its enforcement shall be refused unless the
state or other advocate of the classification shows that
the classification has a reasonable basis; (3) When the
law classifies individuals on any other basis, it shall be
rejected whenever a member of a disadvantaged class
shows that it does not suitably further any appropriate
state interest.
Sibley v. Bd. of Sup’rs of La. State Univ., 477 So.2d 1094, 1107 (La. 1985); LA
Const. art. 1, § 3. In comparison to the Fourteenth Amendment’s Equal
Protection Clause, the Louisiana Supreme Court has recognized that the
state’s version moved Louisiana “from a position of having no equal
protection clause to that of having three provisions going beyond the
decisional law construing the Fourteenth Amendment.” Id. at 1108.
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Sivad-Home contends that the district court erred in applying the
deferential “suitably further” standard in this case. She argues that
heightened scrutiny should control our analysis because FNR impermissibly
burdens disabled persons. She relies on Clark v. Manuel to support her
argument. 463 So.2d 1276 (La. 1985). In that case, the Louisiana Supreme
Court held that a statute requiring individuals to seek licensing to open
community homes for the mentally-disabled violated the Louisiana
Constitution’s equal protection clause. The court relied on Fifth Circuit
precedent to reason that a middle-tier level of scrutiny applied to statutes
“which affect[ed] the mentally [disabled].” Id. at 1284 (citing Cleburne
Living Ctr. v. City of Cleburne, 726 F.2d 191 (5th Cir. 1984)). It ultimately held
that the challenged ordinance was unconstitutional because it made it more
difficult for a quasi-protected class to enjoy “an important right.” Id. at 1285.
Sivad-Home asserts that Clark is analogous to her situation. Specifically, she
contends that FNR harms the disabled community by arbitrarily limiting
additional respite care businesses when there is a need. She also argues that
the district court erred in concluding that she lacked standing to represent
the disabled persons in her community, and that that decision contributed to
the district court incorrectly determining the tier of scrutiny that applied. 4
The standard under Louisiana law looks not to a law’s impact, but to
what the “law classifies.” See Sibley, 477 So.2d at 1107 (internal quotation
omitted). Applied here, the FNR program is only aimed at controlling the
number of respite service care providers in Louisiana. FNR does not
explicitly mention any directives to the disabled communities to control
which providers they might select. Instead, it is singularly focused on
ensuring the State’s control over the number of respite care providers at any
4
In light of the ultimate holding and rationale in reaching our final disposition, we
pretermit the issue of standing and continue to the merits of Sivad-Home’s case.
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given moment. Therefore, by its terms, the law only applies to Louisiana’s
respite care providers. While Sivad-Home may be correct in her assertion
that FNR indirectly burdens the disabled community, she offers no evidence
that the program does so directly. Accordingly, we must apply the “suitably
further” standard to her Louisiana equal protection argument—the result of
which is the same as our previous Equal Protection Clause analysis. See supra,
Part III.A.1.
Sivad-Home also mischaracterizes what constitutes a quasi-protected
class in her reliance on Clark. That case premised its decision that disabled
persons were entitled to heightened scrutiny on a Fifth Circuit case that was
later overruled by the Supreme Court. See City of Cleburne. v. Cleburne Living
Ctr., 473 U.S. 432 (1985) (“Cleburne II”). In Cleburne II, the Supreme Court
expressly rejected this court’s determination that statutes burdening disabled
persons demand heightened scrutiny. Id. at 442 (holding that “we conclude
for several reasons that [this court] erred in holding [the] mental[ly]
[disabled] as a quasi-suspect classification calling for a more exacting
standard of judicial review than is normally accorded economic and social
legislation”). Because disabled persons are not a quasi-suspect class, and we
need not reach the issue of the elderly because the record does not suggest
that Sivad-Home is attempting to form a respite organization for that group,
her state equal protection claims fail. See Cleburne II, 473 U.S. 432.
B. Federal & State Due Process Clause Claims
The Due Process Clause of the Fourteenth Amendment provides that
“no State shall . . . deprive any person of life, liberty, or property, without
due process of the law.” U.S. Const. amend. XIV. Article I, § 2 of the
Louisiana Constitution similarly provides that “[n]o person shall be deprived
of life, liberty, or property, except by due process of law.” LA Const.
art. 1, § 2. Due process claims that do not involve a fundamental right are
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subject to rational basis review. See Reyes v. N. Tex. Tollway Auth., (NTTA),
861 F.3d 558, 561 (5th Cir. 2017) (holding that rational basis review is “the
default for substantive due process claims that do not implicate a
fundamental right”); see also supra, Part III.A.1 (discussing the rational basis
review standard). “Unlike Louisiana’s provision on equal protection which
is distinct from that provided in the Fourteenth Amendment, [the] due
process guarantee in La. Const. Art. I, § 2 does not vary from the Due
Process Clause of the Fourteenth Amendment.” Progressive Sec. Ins. Co. v.
Foster, 711 So.2d 675, 688 (La. 1998).
1. Federal Due Process Claim
Sivad-Home contends that FNR violated her “right to earn a living in
a chosen profession free from unreasonable government interference.” We
take no stance on whether such a right is cognizable under the Due Process
Clause and instead note that, if it is, both parties concede that rational basis
review controls our analysis. We have already determined that the FNR
program withstands rational basis review. See supra, Part III.A.1. Therefore,
we hold in favor of the State on this issue.
2. State Due Process Claim
For the first time on appeal, Sivad-Home argues that Louisiana law
demands a stricter due process analysis because Louisiana has previously
recognized that the right to earn a living in a profession of one’s choice is
fundamental. However, we have repeatedly held that parties “forfeit[] an
argument by failing to raise it in the first instance in the district court—thus
raising it for the first time on appeal.” Thomas v. Ameritas Life Ins. Corp., 34
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F.4th 395, 402 (5th Cir. 2022). 5 Accordingly, we decline to reach this
argument.
C. Privileges or Immunities Clause Claim
As Sivad-Home concedes, the Privileges or Immunities Clause
protects a finite list of “uniquely federal rights,” none of which she claims
have been violated in this case. Deubert, 820 F.2d at 760. Accordingly, we
decline to address her argument on this issue.
IV. Conclusion
For the foregoing reasons we AFFIRM the judgment of the district
court.
5
See Thomas, 34 F.4th at 492 (explaining that “to preserve an argument for appeal,
the argument (or issue) not only must have been presented in the district court, [but] a
litigant must also press and not merely intimate the argument during proceedings before
the district court.”) (internal quotations and citation omitted).
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