BRIEF FOR 14 FORMER STATE MENTAL HEALTH AGENCYADMINISTRATORS, AMICI CURIAE, IN SUPPORT OF THEAPPELLANTS

Susan Stefan

Ira Burnim

Jennifer Mathis

Judge David L. Bazelon Center for

Mental Health Law

1101 15^th Street NW Suite 1212

Washington, D.C. 20005-5002

202-467-5730

TABLE OF AUTHORITIES

INTEREST OF AMICI CURIAE

SUMMARY OF ARGUMENT

ARGUMENT

I.

THE COURT ERRED IN ITS INTERPRETATION OF THEFUNDAMENTAL ALTERATION DEFENSE
4

    A.

Moderate and Temporary Costs Associated with Desegregation

        1.

Transferring Institutional Resources to the Community,

             Integration.

        2.

Utilizing Resources from Multiple State and Federal

            Community Integration.

        3.

Developing Administrative Mechanisms and Structures

To Facilitate the Transfer of Resources and People withDisabilities Is Necessary to Promote Integration andCommunity Placement.
11

    B.

The District Court Erred in Holding That an Accommodation

        Fundamental Alteration.

        1.

The District Court, Court of Appeals and Supreme

            of Funds Justified Institutional Segregation.

        2.

The Supreme Court and This Circuit Have Underscored

            Narrowly to Accomplish the Purpose of the ADA.

C.
Recent District Court Formulations of Fundamental Alteration

D.
The Proper Formulation of a Fundamental Alteration Defense

II.

THE DISTRICT COURT ERRED BY ENTERING JUDGMENT

AGAINST PLAINTIFFS ON THEIR ADMINISTRATIVE METHODSCLAIM.
24

CONCLUSION

APPENDIX

31

CERTIFICATIONS 38

Cases

Alexander v. Choate, 469 U.S. 287 (1985)

Easley by Easley v. Snider, 36 F.3d 297 (3rd Cir. 1994)

Frederick L. v. Department of Public Welfare, 157 F.Supp.2d 509

(E.D. Pa 2001)

Frederick L. v. Department of Public Welfare, 217 F. Supp. 2d. 581

(E.D. Pa. 2002)

Henrietta D. v. Guiliani, 119 F.Supp.2d 181 (E.D.N.Y. 2000)

Indep. Living Res. Ctr. v. City of Wichita, 2000 U.S.Dist.LEXIS 6324

(D.Kansas March 15, 2002)

Kathleen S. v. Dept. of Public Welfare, 10 F.Supp.2d 460

(E.D.Pa. 1998)

L.C. by Zimring v. Olmstead, 138 F.3d 893 (11th Cir. 1998)

Martin v. P.G.A. Tour, 532 U.S. 661 (2001)

Martin v. Taft, 222 F.Supp.2d 940 (D.Ohio 2002)

Messier v. Southbury Training School, 1999 U.S. Dist. LEXIS 1479

(D.Conn. 1999)

Milliken v. Bradley (II), 433 U.S. 267 (1977)

Olmstead v. L.C., 527 U.S. 581 (1999)

Salve Regina College v. Russell, 499 U.S. 225 (1991)

Williams v. Wasserman, 164 F.Supp.2d 591 (D.Md. 2001)

Statutes

Americans with Disabilities Act, 42 U.S.C. §§ 12131-12134

Section 504 Rehabilitation Act, 29 U.S.C. § 794

42 U.S.C. § 1396d(a)(13)

H.R. 101-485, Part I, 101st Congress, 2nd Session,

(May 14, 1990)

H.R. 101-485, Part III, 101st Congress, 2nd Session,

(May 15, 1990)

Regulations and Rules

28 C.F.R. 35.130(b)(3)(i)

29 C.F.R. pt. 1630, App. 1630.2(p)(2001)

Fed. R. Civ. P. 52(a)

Articles

Elias, Navon, The Massachusetts Experience with Managed

Mental Health Care and Medicaid, 14 Health Affairs 46 (1995)

Oliver, Montgomery, A Network Approach to Outpatient Service

Delivery Systems: Resources Flow and System Influence, 30 Health

Services Research (1996)

Talbot, The Fate of the Public Psychiatric System, 36 Hospital

and Community Psychiatry (1985)

    Amici were state commissioners, directors, or administrators in elevenStates.    (See footnote 2)  They have been involved with every aspect of their State's service systems,from making budgetary decisions to overseeing the phasing down of institutions andthe development of new community care alternatives. Amici strongly supportcommunity services in integrated settings as the best method of treating the majority of people with disabilities.

    Amici argue that the District Court fundamentally misunderstood thefinancing and operation of community mental health services when it ruled thatunless community placements from facilities resulted in immediate cost neutrality orsavings they would fundamentally alter the state mental health program. This errorwas aggravated by the Court's limitation of “available” financial resources to theState's mental health budget, and by its dismissal, without analysis, of the plaintiffs' “administrative methods” claim. As former administrators, amici conclude that theaccommodation requested by plaintiffs is reasonable, workable, and is whatadministrators in their position do on a regular basis.

     Neither Congress nor the Supreme Court envisioned that public entities couldsuccessfully assert a fundamental alteration defense against an Olmstead claimsimply by showing that ceasing discriminatory segregation would not be entirely orimmediately cost-free. Nor do State programs make plans for desegregation of theirinstitutions on the premise that immediate cost savings will result. In fact, Stateswhich have made substantial progress in implementing this mandate havedemonstrated that integration and the provision of integrated services may costmoney, but often these costs are minimized or completely offset by the transfer ofinstitutional resources and the ability to utilize other funding sources. Thereallocation and combination of resources and the implementation of administrativemechanisms to facilitate integration, do not fundamentally alter mental healthprograms. (Infra, pp. 4-20.)

    The Court also erroneously limited its analysis to the resources available tothe defendant in its mental health budget. (Infra, pp. 20-21.) In deciding thecontours of the fundamental alteration defense, this Court should take intoconsideration the realities of institutional desegregation. States have beenundertaking the transfer of large institutional populations to the community for morethan twenty-five years, and there are certain standard methodologies used to accomplish this goal. The decision of the Court below ignores these realities andcreates legal rules at odds with them.(Infra, pp. 21-24.)

    States wishing to end unnecessary segregation must affirmatively adopt anadministrative framework that enables them to do so. This framework includescomprehensive, multi-year planning, accessing an array of available resourcesincluding federal and multi-agency state funding, and occasionally using limitedfunds to shift institutional services to the community. (Infra, pp. 26-28.) The Courtshould not have denied plaintiffs' administrative methods claim without anydiscussion or legal analysis. In amici's experience, administrative methods arecrucial to a State's success in accomplishing institutional desegregation. Yet theCourt below made no effort to apply the law to plaintiffs' specific allegations.(Infra, pp. 24-29.)

THE COURT ERRED IN ITS INTERPRETATION OF THEFUNDAMENTAL ALTERATION DEFENSE.

    A.

Moderate and Temporary Costs Associated with Desegregation do notFundamentally Alter a Mental Health System.

    Establishing services to facilitate integration necessarily costs money, which,with the right administrative mechanisms, can usually be recouped in a relativelyshort time. This money is not inevitably taken from services to other clients. The mere fact that there are some immediate costs associated with communityintegration is not sufficient, as the District Court held, to constitute a fundamentalalteration of the mental health system. Mental health systems regularly anticipateshort-term moderate costs associated with integration and have developedmechanisms to minimize them. The District Court's conclusions of law would serveas a disincentive for States to pursue these proven and successful integrationstrategies.

1.
Transferring Institutional Resources to the Community OverTime Is an Accepted Strategy for Promoting Integration.

    One of the most successful strategies for promoting integration ofinstitutionalized persons is to transfer the resources along with individuals from theinstitution to the community. Commonly known as reallocation, States have longused this method to finance new community programs in a cost-effective manner. Because integrated community support services generally cost less, or at most thesame, as treatment in a segregated institution, transferring funds from institutions tothe community generally results in savings to the State. Community placement is atleast cost-neutral, as is the case in Pennsylvania with respect to the most needyplaintiffs at Norristown State Hospital. In either situation, compliance with theADA neither fundamentally alters the State's mental health program nor requiresadditional resources, at least when viewed over time.     The only real cost to community placement is a temporary cost attendant tothe transfer process, when staff and environmental expenses are still incurred at theinstitution while individuals are in the midst of the transition. It is this transition costwhich was the entire focus of the Court below, and which it found to be a“fundamental alteration.”

    In amici's experience, it is common, even expected, that some transitionalcosts occur when implementing an Olmstead plan. This is hardly a “fundamentalalteration” of the State's program since it is minor, temporary and anticipated.Ultimately, institutional costs can be transferred through reallocation to thecommunity. What varies, depending on circumstances, is the time it takes to achieveeither budget neutrality or overall savings. These savings may be achieved in thesame fiscal year; in some circumstances it may take longer than a year.

    There are a number of well-established methods for accomplishing thetransition of persons with disabilities from institutions to the community, usinginterim funding strategies. For example, the Massachusetts Olmstead plan calls forthe closing of a state hospital and placement of more than 100 persons intocommunity programs in the current fiscal year. In order to assist in theimplementation of this goal, the Department of Mental Health conceived, proposed,and successfully lobbied for a so-called “bridge loan” account for $3.6 million. The account is for one year only and the funds will not annualize. Funds will be used toclose a state mental hospital and to move many of its residents to communityprograms. In the next year, the cost of the programs will be covered by the savingscreated by closing of the facility and the less expensive community treatment. Thisand similar approaches used by many of the agencies which amici directed,recognizes that although there are some overlapping costs in one year as the facilityis phased down, sufficient savings will accrue over the course of several years tomake a one-time expenditure financially manageable and clinically appropriate.   (See footnote 3)  The District Court ignored this basic reality in insisting that savings had to beimmediate.        

        2.

Utilizing Resources from Multiple State and Federal Sources Isthe Accepted Strategy for Funding Community Integration.

    A second, well-established strategy for funding community programs is toutilize resources not available to pay for institutional services, including variousfederal programs. The most significant of these programs is Medicaid, whichincludes a broad range of State Plan, waiver, optional, and pilot programs designedspecifically to facilitate the integration of persons with disabilities. Using and combining these funds with other state resources has provided broad flexibility andsubstantial opportunities for States to transfer institutionalized persons to thecommunity, without compromising existing programs or depriving other personswith disabilities of basic supports.

    From their experience, amici know that few if any States rely on their mentalhealth budgets alone to accomplish successful long-term integration of personsneeding mental health services into the community. Rather, States can and do makeuse of an array of Medicaid funding options such as rehabilitation and casemanagement, federal housing programs such as Section 8, and programsadministered by the Department of Labor such as the Ticket to Work program tosuccessfully integrate its clients into the community. Amici know that the use ofvarious funding sources is the most effective method to accomplish the ADA'sintegration mandate.

    The Supreme Court in Olmstead appreciated this, rejecting Georgia'sargument that the Medicaid program evinced a Congressional preference forinstitutional treatment, 527 U.S. at 601, and pointedly noting that Georgia had usedonly 700 of its 2109 community-based waiver slots. Id. While the waivers referredto in Olmstead are not available for persons ages 22-65 in the mental health system,they are available for youth and the elderly. Many other mental health services can be paid for through Medicaid options which States are free to adopt.     

    Although Pennsylvania has adopted a mandatory managed care behavioralhealth program, Frederick L., 217 F.Supp.2d 581, 589, other States have usedMedicaid funding in addition to the benefits of managed care to move people tomore integrated settings. See, Eileen Elias, Marc Navon, The MassachusettsExperience with Managed Mental Health Care and Medicaid, 14 Health Affairs 46,48 (1995)(savings from the managed care program reinvested to expand community-based continuing care services).

    For example, South Carolina, Rhode Island, New Hampshire, andMassachusetts have used Medicaid's so-called “Rehabilitation Option,” 42 U.S.C. §1396d(a)(13), a non-mandatory benefit which is not incorporated into its behavioralhealth managed care program, to fund qualifying rehabilitation services providedindividuals who live in community programs. The Medicaid reimbursement reducesthe overall direct cost to the state of providing the residential program and vastlyincreases the number of individuals who can be served in the community. Likewise,many States, including Vermont, South Carolina, New Hampshire, andMassachusetts, utilize other non-managed care Medicaid reimbursements toaugment their managed care program and the State appropriation for services topeople discharged to the community. There are a number of other federal vocational, educational, and social service programs which provide funds to assist the State inintegrating inappropriately institutionalized people into the community.

    The ADA forbids the State from claiming that community placement is not areasonable accommodation if the State could afford to place people in thecommunity, but simply chooses not to seek or spend funds that are readily availableand would be effective in providing the accommodation.   (See footnote 4)  This is the kind of“thoughtlessness and indifference” which the Court has made clear constitutesdiscrimination against people with disabilities. Alexander v. Choate, 469 U.S. 287,295 (1985).

    In this case, the lower Court erred as a matter of law in considering onlyfunding available in the state mental health budget, rather than including other DPW and federal funds targeted to people with mental disabilities, including housing,social service, vocational rehabilitation, income support, and educational support.These funding streams, the ones actually used by mental health agencies to createand sustain treatment in the community, should be the ones included in assessmentsof available resources to assist in funding the costs of the requested reasonableaccommodations.

        3.

Developing Administrative Mechanisms and Structures toFacilitate the Transfer of Resources and People with DisabilitiesIs Necessary to Promote Integration and Community Placement.

    Many of the duplicate costs which concerned the District Court can beminimized through simple administrative mechanisms. Amici have implementedthese mechanisms successfully without altering programs. Those parts of a hospitalpreviously used to house patients can be used for office space, for storage, and forprogramming. Valuable land can be sold for housing and industrial development,often providing more jobs to the community than were available at the hospital.Most important, costs, staff and the treatment services, can be transferred, like theresidents, to the community.

    The District Court's failure to consider whether Pennsylvania had establishedany administrative mechanisms to facilitate the integration of the residents ofNorristown, as well as its artificial and unjustified focus on immediate cost savings and state mental health funding, provided the factual foundation for its legal error inendorsing the State's fundamental alteration defense.

    B.

The District Court Erred in Holding That an Accommodation ThatDoes Not Result in Immediate Cost Savings is a FundamentalAlteration.

    The Court's holding that any accommodation that does not result inimmediate cost savings is a fundamental alteration flies in the face of the SupremeCourt's interpretation of fundamental alteration in Olmstead and amici's experienceof how institutional desegregation is accomplished. First, the argument that anyimmediate costs associated with institutional desegregation create a fundamentalalteration would unacceptably circumvent Olmstead's holding that lack of fundingdoes not excuse or legalize unnecessary segregation. Second, both Congress and theSupreme Court have always contemplated that reasonable accommodations andintegration will come at some cost, as long as that cost does not constitute an undueburden. Finally, the requirement of immediate savings _ rather than savings realizedover several years _ simply does not mirror common practices in this area, norreflect the analysis of any court that has considered community integration under theADA.            1.

The District Court, Court of Appeals and Supreme Court inOlmstead Rejected the Argument that Lack of Funds JustifiedInstitutional Segregation.

    To appreciate the legal error and practical problems with the fundamentalalteration standard created by the Court below, it is important to review the factsand arguments in Olmstead. Georgia conceded that plaintiffs L.C. and E.W. wereappropriate for placement in the community, as did DPW with regard to theplaintiffs in this case. Like DPW, Georgia asserted that it simply did not have thefunds to make the placements. Georgia repeatedly argued that failure to placeunnecessarily segregated individuals in the community because of lack of funds wasnot discrimination or a violation of the ADA.

    Each Court to consider this argument rejected it. The District Court, theEleventh Circuit Court of Appeals, and the Supreme Court each held that Statescould not use lack of funds as a reason to hold people unnecessarily in institutionalsettings. The Olmstead District Court “rejected the State's argument that inadequatefunding, not discrimination against L.C. and E.W. `by reason of their disabilities,'accounted for their retention at [the hospital],” finding that “unnecessaryinstitutional segregation of the disabled constitutes discrimination per se whichcannot be justified by a lack of funding,” Olmstead, 527 U.S. at 594 (quotingDistrict Court decision). The Eleventh Circuit agreed that lack of funds did not excuse Georgia from discrimination charges, “reject[ing] the State's suggestion thatL.C. and E.W.'s claims must fail because the denial of community-basedplacements was based on lack of funds.” L.C. by Zimring v. Olmstead, 138 F.3d893, 902 (11^th Cir. 1998). The Supreme Court affirmed the Eleventh Circuit and theDistrict Court holdings, firmly rejecting the State's persistent cost-based argument.Olmstead, 527 U.S. at 597. Rather, the Supreme Court held that the failure tointegrate willing individuals who did not need to be in an institution wasdiscriminatory under the ADA. Id. at 600-601.

    Although the plurality in Olmstead broadened the fundamental alterationdefense prescribed by the Eleventh Circuit, it did not equate any additional expenditure with fundamental alteration. The Court's position with regard toinstitutions and costs was clear. It wanted to maintain institutional alternatives forthose that needed them. 527 U.S. at 601-602, 604-605. Integration costs thatthreatened the existence of institutions as an alternative would fundamentally alterthe mental health system, because institutional alternatives are an essential feature ofsuch systems. Id. at 604-605.

    However, the Court was equally concerned that a State not delay communityplacement of unnecessarily segregated people simply because of the rising percapita cost of maintaining the State's institutions. Thus, the Court did not allow the defendants to avoid liability simply by pointing to the existence of a waiting list, oreven to a waiting list moving at a reasonable pace, but required that the list bemoving at a reasonable pace “not controlled by the State's endeavors to keep itsinstitutions fully populated.”Id. at 605-606.

    The Court was aware that States might delay placement based on fiscal ratherthan clinical considerations. Its explicit rejection of this rationale as a permissiblefactor in the pace of placement evidences its understanding that making placementsresults in some costs. Although it wished to protect States when those costs rose tothe level of a fundamental alteration _ threatening the State's ability to maintaininstitutions as a treatment option _ it simultaneously wanted to guarantee thevindication of rights under the ADA . Nothing in the Olmstead decision suggeststhat any transitional costs associated with community integration, no matter howsmall, could constitute a fundamental alteration of the mental health system.   (See footnote 5) 

    The Court's other concern was not specifically cost-related. If a State wasdoing a good job systemically at placing all of its unnecessarily segregated clients inthe community, and not keeping people in institutions for years for financial reasons,the Court did not want individuals to jump the placement line simply by filing a lawsuit. 527 U.S. at 606. The Olmstead plurality considered that the EleventhCircuit's formulation of fundamental alteration would, as a practical matter, meanthat States _ even those which already had a comprehensive plan for communityplacement and briskly moving waiting lists -- could never win an integration case. Id. at 603 (unlikely that a State relying on the Eleventh Circuit's formulation offundamental alteration “could ever prevail”). The Court sought to insulate Statesalready effectively carrying out the desegregation mandate on a statewide scale fromcourt interference on behalf of a small group of people.

    By contrast, the ruling of the District Court here means, as a practical matter,that States which are the farthest from compliance with the integration mandate cannever lose an Olmstead case. The more limited the planning for desegregation that aState has undertaken, the more it will cost to implement any desegregation plan. Themore that a State relies on institutionalization, especially unnecessaryinstitutionalization, the more it will require a fundamental alteration of its spendingscheme and budget plans to accommodate plaintiffs. On the other hand, the morethat a State has committed to community planning and placement, the less it willcost to comply with the ADA's integration mandate, and the less of an alteration ofthe State's budget and planning process will be required. The lower Court's rule is aperverse interpretation of Olmstead that runs exactly counter to the Supreme Court's intention to insulate the States already doing the job of desegregation, whileleaving vulnerable to liability States that had no plans, waiting lists, or effectiveprocesses for promoting desegregation.

        2.

Congress and The Supreme Court Have Underscored thatDefenses in ADA Cases Must be Construed Narrowly toAccomplish the Purpose of the ADA.

    Congress intended that the fundamental alteration defense be construedextremely narrowly, protecting programs from accommodations only if themodifications would jeopardize either their identity or their existence. This is theway that fundamental alteration had been interpreted under Section 504 of theRehabilitation Act, 29 U.S.C. § 794 including cases that Congress specifically citedto in the legislative history of the ADA.

    This understanding comports with cases decided in this circuit and othersconcerning the meaning of the fundamental alteration defense. When this Courtrejected a proposed modification of the home attendant program in Easley by Easleyv. Snider, 36 F.3d 297 (3^rd Cir. 1994), it was based, in part, on maintaining the corepurpose of the program, regardless of cost, and partly on the fact that the proposedexpansion of the program was so great it would result in “possibly jeopardizing thewhole program.” 36 F.3d at 305. See also Messier v. Southbury Training School,1999 U.S.Dist.LEXIS 1479 (D.Conn.1999) at *36-37 (“where plaintiffs' requested relief would be so unreasonable given the demands of the state mental health budgetand resources that it would alter the essential nature of its services, defendants mayavoid making an accommodation”).

    The Supreme Court explicitly differentiates between permissiblemodifications that constitute “alterations” of defendants' programs, which arepermissible and even required by the ADA, and those changes which rise to thelevel of a “fundamental alteration.” In Martin v. P.G.A. Tour, 532 U.S. 661 (2001), the majority rejected a reading of the statute, that would have permitted the PGA todetermine which rules were essential to the game of golf. “Justice Scalia's readingof the statute renders the word `fundamental' largely superfluous, because it treatsthe alteration of any rule governing an event at a public accommodation like afundamental alteration,” 532 U.S. at 689, n. 51.

    Similarly, the District Court below concluded that any expenditure of money would be a fundamental alteration. This is not a tenable interpretation of Congress'intent. Congress understood that compliance with the ADA would cost money. TheCongressional Budget Office reported that enactment “would result in substantialcosts for state and local governments,” H.R. 101-485, Part I, 101^st Congress, 2^ndSession (May 14, 1990) at p. 47. The issue of cost dominated floor debates andsurfaces frequently in committee reports and testimony. No one, including opponents of the legislation, ever envisioned that a covered entity could beexempted from compliance by asserting that compliance would not “result inimmediate cost savings” as the District Court held here.

    The expenditures envisioned by Congress were substantial because of thesweeping reach of the ADA. The purpose of Title II was understood to be theaccomplishment of enormous social change, and Congress explicitly acknowledgedthat it would cost a substantial amount of money:

The purpose of Title II is to continue to break down barriers to the integratedparticipation of people with disabilities in all aspects of community life . . .While the integration of people with disabilities will sometimes involvesubstantial short-term burdens, both financial and administrative, the long-range effects of integration will benefit society as a whole.

H.R. 101-485, Part III, 101^st Congress, 2^nd Sess. (May 15, 1990) at 49 (emphasisadded)(footnotes excluded). Congress expected there would be costs specificallyassociated with community integration, and noted that imposition of these costs wasnot new to the ADA, but had also been a feature of Section 504 of theRehabilitation Act over the past decade. In a footnote to the passage quoted above,the Committee reiterated that “[c]ases which have enforced the rights of personswith disabilities to accessible public services have recognized that Section 504 mayplace substantial burdens on state and local agencies in order to accomplish thegoals of non-discrimination and integration.” Id. n. 50.         This hardly comports with the District Court's conclusion that any cost, nomatter how small, is a fundamental alteration . The Court's standard renders theword “fundamental” largely superfluous. In fact, under the District Court'sframework, any expenditure not part of defendants' existing budget arrangements isa fundamental alteration. This leaves unnecessarily segregated people exactly wherethey were before Olmstead _ entirely dependent on the whim and institutionalmodels of the state mental health agency for their liberty.

    C.

Recent District Court Formulations of Fundamental Alteration in theContext of Olmstead Claims.

    Recently, two District Courts have specifically examined the concept offundamental alteration in an attempt to further elaborate the Supreme Court'sinstructions in Olmstead. The first case was Williams v. Wasserman, 164F.Supp.2d 591 (D.Md. 2001) in which Maryland prevailed. The Court there notedthat Maryland, unlike Pennsylvania, had “a waiting list, a waiting list equity fund,and prioritized categories of crisis resolution for providing services.” Id. at 633.Because trial experts had agreed that a window of 3-5 years was necessary beforesignificant cost savings could be reaped from downsizing institutions, the Courtadopted a 3-5 year time frame in its analysis, id. at 638, rather than requiringimmediate cost neutrality. Significantly, rather than considering communityplacements an “add-on” or “extra” to the state budget, Maryland had planned community integration over a multi-year period, and the Court found that “whenbudget problems have caused reductions in state hospital facilities, Maryland hastried to `hold harmless' its community programs, which are seen as a `higherpriority' than the institutional programs.” Id. at 634. In Pennsylvania, budgetdifficulties result in elimination of plans for new community beds.

    In contrast to the holding of the Court below, another Court has concludedthat the fundamental alteration defense would require the Court to look at “theresources available to the State.” Martin v. Taft, 222 F.Supp.2d 940, 986 (D. Ohio2002 ). The case, which involves people with developmental disabilities, containedextensive discussion of the Medicaid program, waiver options, and federal fundingas a resource for funding community placements. See, e.g., id. at 953-57, 966-69,974-75.

    In all the cases that have been litigated about the requirements the ADAplaces on public entities, including Williams and Taft, not a single defendant hasargued, and not a single Court has held, that if compliance with the ADA does notresult in immediate cost savings for the defendant, there is a fundamental alterationof the defendants' program. The lower Court's adoption of this novel test is legallyerroneous and practically unattainable in most instances. It is inconsistent withCongress's intent, the Supreme Court's command, and the realities of integrating institutionalized persons with disabilities.

    D.

The Proper Formulation of a Fundamental Alteration Defense in ThisCase.

    The fundamental alteration defense must be consistent with Supreme Courtprecedent. Thus, relief cannot be requested which would result in depriving Stateclients of needed institutional alternatives, nor which would interfere with existingcomprehensive and effective plans to place all persons statewide needingcommunity placement. Neither of these concerns is at issue here at all.

    A proper application of the fundamental alteration defense will protect Stateswhich have done most to establish an effective plan for statewide communityintegration. The more seriously a State has committed its resources, structured itsadministrative methods, undertaken long-term planning to assure that its clientsreceive treatment in the most integrated setting commensurate with their needs, andthe more effectively it is accomplishing this goal statewide, the less it should have toworry that Olmstead liability will force ad hoc exceptions and inequitablereallocation of placement resources. Amici propose four factors which must beevaluated in determining whether an integration remedy would constitute afundamental alteration of an agency's program:

1) whether the State has a Statewide comprehensive community placementplan for identifying persons who are unnecessarily institutionalized andcreating the community resources necessary to provide them with integrated services, and a waiting list moving at a reasonable pace not dictated by Stateendeavors to keep institutional beds fully populated;

2) whether the State is effectively utilizing all resources available to it toaccomplish integration;

3) costs of the placements over the time period involved in planning andimplementing community placements for the plaintiffs; and

4) the degree to which defendants have developed and utilized administrativemethods supporting the treatment of clients in the most integrated setting.

    As the Supreme Court noted, defendants with a statewide comprehensive planand a waiting list moving at a reasonable pace not controlled by a desire to keep itshospital beds filled (i.e., fiscal considerations) should generally be able to succeed inasserting the fundamental alteration defense. The Court below found that defendantsdid not meet this standard.

    The emphasis on a comprehensive plan indicates that the Supreme Courtintended to shield States that had focused on and planned for the need to placepeople into the community on a statewide basis, prior to and apart from the litigationbefore the Court. A comprehensive plan is more than an annual inquiry into whetherthere are extra funds left over in the budget to fund creation of community beds. It islong-term and central to the State's mental health policy, not an “add-on” or “extrafunding” item subject to elimination at the first chill of budget difficulties.Pennsylvania's system of funding community placements, that depends from year to year on available extra money, is unpredictable and precludes long-term planning. Itis the antithesis of a comprehensive statewide plan, and it underscores thesignificance of plaintiffs' administrative methods claims, which the Court belowsummarily _ and erroneously _ denied.

II .

THE DISTRICT COURT ERRED BY ENTERING JUDGMENTAGAINST PLAINTIFFS ON THEIR ADMINISTRATIVE METHODSCLAIMS.

    Two of the five claims asserted by plaintiffs in their complaint asserted thatdefendants had used criteria or methods of administration that had the effect ofsubjecting them to discrimination on the basis of disability in violation of the ADA,28 C.F.R. 35.130(b)(3)(i).

    Public entities act and fail to act largely as a result of their administrativestructure. The Title II administrative methods claim has been used to successfullyremedy administrative methodologies and structures that resulted in disabilitydiscrimination, from the methods used by a city to enforce its handicapped parkingordinance, Indep. Living Res. Ctr v. City of Wichita, 2002 U.S.Dist.LEXIS 6324(D.Kansas March 15, 2002), to the methods used to administer a city's socialwelfare programs. Henrietta D. v. Giuliani, 119 F.Supp.2d 181 (E.D.N.Y. 2000).

    In this case, plaintiffs identified a number of specific administrative practiceswhich they asserted directly result in unnecessary segregation, from the failure to use appropriate methods to assess whether residents at Norristown State Hospital couldlive in the community to defendants' failure to ask the Legislature for the necessaryfunds to accomplish adequate community integration. In addition, plaintiffschallenged an administrative practice which, from amici's perspective, is theparadigm of an administrative practice that clearly and predictably leads tounnecessary segregation: the choice to finance creation of new community resourcessolely through a program (CHIPP/SIPP), which is funded by “extra” funding leftover after the regular agency budget has been funded.

    The Court below did not undertake analysis of any of the plaintiffs'administrative methods claims or state conclusions of law regarding these claims.Rather, it simply granted judgment to defendants in a one sentence footnote, “forreasons discussed in connection with the integration mandate claims.” Frederick L.,217 F.Supp. at 591, n. 11.

    This is insufficient as a matter of law. The Federal Rules of Civil Procedurerequire a trial court to “find the facts specially and state separately its conclusions oflaw thereon,” Fed.R.Civ.P. 52(a). The Supreme Court has said that appellate courtsshould, through their application of de novo review, “encourage a district Court toexplicate with care the basis for its conclusions of law.” Salve Regina College v.Russell, 499 U.S. 225, 233 (1991).     The lower Court's failure is especially troubling in light of the direct nexusbetween an agency's administrative methods and the likelihood that it will continueto unnecessarily segregate its clients. In addition, DPW's methods of administrationrelating to community placement had already been held to violate the ADA inKathleen S. v. Department of Public Welfare, 10 F.Supp.2d 460, 473 (E.D.Pa.1998),and there is no evidence that these practices have changed. The court in Kathleen S. held that DPW had violated the ADA with respect to two of the three plaintiffsubclasses by utilizing “methods of administration which have resulted indiscrimination against class members through its failure to initiate plans sufficientlyin advance to ensure the necessary placements in the community within a reasonabletime.” Id. Although plaintiffs made an identical claim below, the Court failed toconsider the claim at all.

    The understanding that successful transition of an agency's clients frominstitution-based to community-based treatment must rely on a “range of financialand administrative mechanisms” is at least twenty years old. See, John A. Talbott,The Fate of the Public Psychiatric System, 36 Hospital and Community Psychiatry46 (1985). Administrative methods are crucial to the accomplishment of the ADA'smandate that treatment must be provided in the most integrated setting appropriate tothe needs of the client. While institutional services are provided in one place, and paid for in large part by the State through one budget line, community servicesinvolve multiple services provided by multiple agencies working through a number offederal-state government programs. See, Amalya L. Oliver and KathleenMontgomery, A Network Approach to Outpatient Service Delivery Systems:Resources Flow and System Influence, 30 Health Services Research 771 (1996). These systems do not coordinate automatically. Without sound administrativemechanisms and efficient methods of funding, people will either remainunnecessarily institutionalized, or, like one of the plaintiffs in Olmstead, be subject todischarge to homeless shelters or the streets.

    Unnecessary segregation is often not a choice but a failure to make choices, aninertia that retains old administrative methods built upon an institutional model whichvirtually guarantees that persons will remain needlessly institutionalized. SeeAlexander v. Choate, 469 U.S. 287, 295 (1985)(benign neglect a source ofdiscrimination). The Court's finding that Pennsylvania has not responded to theSupreme Court's directive in Olmstead by creating a comprehensive plan forcommunity integration suggests inertia, as does Pennsylvania's apparent failure tomake any changes to its institutionally-based methods of administration that havealready been held to violate the ADA.

    The Court erred in ruling for defendants on these claims, particularly in light of its reliance on the fundamental alteration defense. The failure to utilize availableadministrative mechanisms to maximize integration has the result of perpetuatingsegregation when, without fundamentally altering their programs, agencies couldreduce segregation. A State should not prevail on a fundamental alteration defense ifit could increase integration through commonly utilized administrative mechanismsor readily available resources and funding. This is precisely the meaning of theADA's requirement that public entities reasonably modify their policies and practicesto avoid discrimination on the basis of disability.

    As alleged in the complaint and supported by evidence at trial, DPW has notestablished methods of administering its mental health system that foster integration.While it has some mechanisms to assist in placing unnecessarily segregatedindividuals in the community, it has chosen not to use them. For example, within themental health budget, DPW may transfer funding from institutions to the community,with the permission of the governor. Frederick L., 217 F.Supp.2d at 587, n.10. Yet ithas made no attempt to do so at Norristown State Hospital, where one third of theresidents are stipulated to be unnecessarily segregated.

    In fact, DPW's efforts to facilitate desegregation are almost whollyaccomplished through funding that is explicitly “extra” or an “add-on” to theprincipal budget _ the CHIPP and SIPP programs. See Frederick L., 217 F.Supp. at 588 (“DPW has not allocated funds to the counties for their expansion proposalsexcept through CHIPP/SIPP”) and Frederick L. v. Department of Public Welfare,157 F.Supp.2d 509, 513 (E.D.Pa. 2001)(“the Commonwealth has intermittentlyprovided funding to the counties through the Community Hospital Integrated ProjectProgram”)(emphasis added). Having new community services depend exclusively onnew funding rather than embedding it within DPW's base budget will predictablysubject clients of its mental health system to unnecessary segregation -- as it has atNorristown State Hospital _ and prolong unnecessary segregation in violation of theADA.

    Amici made the systematic planning and funding of community placement acentral, integrated feature of their budgets and administrative operations, rather thanrelying on the vagaries of whatever extra funding might be available each year tocreate an unpredictable number of community placements. Even in very difficultfiscal times, like those being faced now by nearly every state, creative administratorsworking with limited budgets can fulfill their Olmstead responsibilities within smallerbudgets and without withdrawing integrated services from one group of persons withdisabilities in order to serve another.

                        Respectfully submitted,

                        Amici Curiae,

                        By their attorneys,

                        Susan Stefan

                        Robert D. Fleischner

                        Steven J. Schwartz

                        Center for Public Representation

                        22 Green Street

                        Northampton, MA 01060

                        413-587-6265

                        Ira Burnim

                        Jennifer Mathis

                        Judge David L. Bazelon Center for

                        Mental Health Law

                        1101 15^th Street NW

                        Washington, D.C. 20005-5002

                        202-467-5730

Patrick Babcock

    For more than five years, Patrick Babcock served as the Director for theMichigan Department of Mental Health before becoming the Director of theDepartment of Social Services. As the state official responsible for the delivery ofmental health services, Babcock oversaw community mental health services thatincluded 55 community mental health boards serving all 83 Michigan counties. Healso was responsible for community residential services for former residents of statefacilities for persons with mental illness and developmental disabilities. Babcock isthe Director of Public Policy for the W.K. Kellogg Foundation, where his dutiesinclude serving as Project Director of a health reform project in three Michigancounties and a national initiative to monitor the impact of devolution of federalpolicies to state governments.

Marilyn Berner, M.S.W., J.D.

    Marilyn E. Berner, JD, LICSW, is both an attorney and a social worker,presently working as a consultant in Florida. She has practiced in the public andprivate sectors as an attorney and as a mental health professional. She directed theHomeless Evaluation Program at the Massachusetts Mental Health Center and wasemployed as an Area Director of Adult Services for the Department of MentalHealth. She held an appointment as a Lecturer in Psychiatry at Harvard MedicalSchool.

    Most recently, she was Chief of Staff for the Massachusetts Department ofMental Health, where she advised the Commissioner on policy matters involving themental health authority of the Commonwealth, managed a number of specialprojects, maintained liaison with other state agencies, managed the functions ofseveral operational arms of the Department, and directed the implementation ofpolicy.

Joseph J. Bevilacqua, Ph.D.

    Joseph Bevilacqua has twenty-one years experience as State Commissioner ofMental Health Services in Rhode Island, Virginia, and South Carolina. He alsoserved as Assistant Commissioner for Community Services for four years in Virginia. Prior to state services, Bevilacqua served in the United States Army as a social workofficer working in psychiatric hospitals and Mental Health Clinics both in the statesand overseas. Throughout Bevilacqua's career he has been actively affiliated with anumber of academic institutions, including appointments at the University ofVirginia, Brown University, Medical College of Virginia, University of SouthCarolina, and Medical University of South Carolina. He used his state role toencourage collaboration between the universities and departments of mental health. This collaboration included research projects, student placements in state programsand faculty consultation in major state initiatives such as community developmentand hospital downsizing. He has also written a number of publications in the field ofmental health.

    A priority of Bevilacqua's commissionerships has been active and strongsupport of consumers of mental health services. Bevilacqua served two terms asPresident of the National Association of State Mental Health Program Directors andcurrently serves on the Board of Directors of the Human Services Research Institute,Boston; the Center for Health Resources, Lincoln, Rhode Island; The Green Door, apsycho-social rehabilitation program in Washington, DC; and the National Alliancefor the Mentally Ill-Rhode Island.

Rodney Copeland, Ph.D.

    Rodney Copeland has been an administrator of rehabilitation, social service,mental health and health programs for the State of Vermont since 1978. From 1995to 2000, he was Commissioner of the Department of Developmental and MentalHealth Services where he was responsible for the administration of the State'sprograms for adults with serious mental illness; children and adolescents with asevere emotional disturbance; and programs for persons with mental retardation. Inthat capacity he used a variety of funding strategies, including maximizing Medicaidbenefits, bridge funding, and private foundation support to transition people from theState's mental hospital to the community, by reducing the institutional budget, so thatwhen the process was complete, there were no increased costs to the State. Dr.Copeland has taught at a number of universities including the University of California, Santa Barbara, Washburn University, the University of San Diego,Adelphi-Vermont, School of Social Work, Johnson State College, University ofVermont, University of Kansas and Southwestern Missouri State College. He is nowthe Director of the HIV/AIDS Program for the Vermont Department of Health.

King Davis

    King Davis served as Commissioner of the Virginia Department of MentalHealth, Mental Retardation and Substance Abuse Services from 1990 through 1994. During that period, a priority of the department was the placement of individualswith disabilities in the community. A number of initiatives were developed toincrease the success of community placements. The Commonwealth of Virginia'scommitment to community placements extends as far back as 1968 with thedevelopment of the Community Services Act. Additionally, in response to efforts bythe U.S. Justice Department to ensure compliance with the Civil Rights ofInstitutionalized Persons Act, the Governor, Attorneys General, and the legislaturesupported the Department of Mental Health's efforts to decrease its reliance oninstitutions in favor of community-based strategies of care. This strategy includedspecific placement in local communities of a fixed number of institutionalizedresidents with mental retardation at the Northern Virginia Training Center. Thiscommunity-based strategy became the accepted policy direction of theCommonwealth of Virginia. Davis is the William & Camille Hanks Cosby Professorat Howard University. King currently occupies the Robert Lee Sutherland Chair inMental Health and Social Policy at the University of Texas at Austin.

Mary Jane England, M.D.

    As the first commissioner of the Massachusetts Department of Social Service(“DSS”) from 1979 to 1983, Mary Jane England helped establish and administer anew state agency for children and their families. Before her appointment at DSS, sheserved as the Associate Commissioner of the Massachusetts Department of MentalHealth and Mental Retardation.

    In 1995, Dr. England served as president of the American PsychiatricAssociation, and she is a past president of the American Medical Women'sAssociation. She serves as the Vice President of the National Academy of PublicAdministration, the American College of Psychiatry, the American College of MentalHealth Administration, and the Group for the Advancement of Psychiatry.    Dr. England also served on the Board of Overseers for the U.S. Department ofCommerce, Malcolm Baldrige National Quality Award. She currently serves on theU.S. Department of Health and Human Services Substance Abuse and Mental HealthServices Administration National Advisory Council; the National Institute of MentalHealth Advisory Council; and the President's Quality Forum Planning Committee.

    Dr. England was also associate dean and director of the Lucius N. LittauerMaster in Public Administration Program at the John F. Kennedy School ofGovernment, Harvard University. She is the chair of the Board of Visitors of BostonUniversity School of Public Health and a member of the Board of Visitors of BostonUniversity School of Medicine. Dr. England was president of the WashingtonBusiness Group on Health, a nonprofit national health policy and researchorganization whose membership includes many of the nation's major employers. Sheis now President of Regis College in Massachusetts.

Paul G. Gorman, Ed. D.

    Paul G. Gorman, is the Director of the West Institute at the New Hampshire-Dartmouth Psychiatric Research Center. The West Institute is dedicated todeveloping and evaluating implementation strategies for evidenced-based practicesfor people with severe mental illness. His career spans thirty years of involvement inmanagement of mental health systems in both the public and private sector. Dr.Gorman was the Director of Mental Health, Substance Abuse and DevelopmentalServices for the state of New Hampshire, and served as the Superintendent of NewHampshire Hospital (NHH), the single public psychiatric hospital in New Hampshire. He was the chief operating officer of West Central Behavioral Health, the communitymental health center associated with the Dartmouth-Hitchcock Medical Center. Healso was the Director of Out-Patient Services for the Human Resource Institute, aprivate psychiatric hospital in Boston, Massachusetts. Dr. Gorman has served on anumber of boards, including the board of the National Association of State MentalHealth Program Directors' Research Institute.

Kenneth Heinlein, Ph.D.

    Ken Heinlein is a former Director of the Wyoming Department of Health andits predecessor the Department of Health and Social Services, both of whichincluded mental health services. He is presently the Associate Director of theWyoming Institute for Disabilities (WIND), one of a national network of universitycenters on disabilities. He is also the Director of Research and Program Evaluation WIND at which he conducts research in post-institutional placements, includingresearch into the cost and quality of community-based supports and services forpersons with developmental disabilities and community consensus for implementingmental health services. He has more than 20 years experience in the fields of mentalhealth and developmental disabilities, including direct services to adults withdevelopmental disabilities in community-based vocational and residential settings,developmental disabilities programs serving infants, toddlers, and preschool agedchildren with developmental delays and behavior challenged, and adults withdisabilities.

Pamela S. Hyde, J.D.

    Pamela Hyde was appointed by Governor Richard F. Celeste as the Directorof the Ohio Department of Mental Health, and later the Ohio Department of HumanServices, the state's Medicaid and child welfare agency. She served as the Directorof the Seattle Department of Housing and Human Services, and then was recruited asPresident and Chief Executive Officer of ComCare, a Phoenix-based behavioralhealth managed care company. She currently consults with state and localgovernments, foundations, federal agencies, and non-profit organizations nationwideon a variety of human services and organizational issues. Hyde is trained as anattorney and also spent several years as an advocate and executive director of astatewide protection and advocacy agency.

Dennis R. Jones, M.S.W., M.B.A.

    Dennis Jones was Commissioner of Mental Health in Indiana from 1981 until1988. He was then Commissioner for the Texas Department of Mental Health andMental Retardation for six years. Both of these positions included institutional andcommunity responsibility for mental retardation as well as mental health.

Danna Mauch, Ph.D.

    Danna Mauch served as Director of Mental Health for the State of RhodeIsland, as Assistant Commissioner of Mental Health for Massachusetts, andExecutive Director of an ambulatory and long-term care provider. In theCommonwealth of Massachusetts, she directed the Divisions of Forensic Medicine,Mental Health and Substance Abuse. Until recently, she served as the Special Master for the United States District Court for the District of Columbia, evaluatingthe implementation of reforms to the publicly-financed mental health system in thenation's capital. In her government roles, Dr. Mauch effected major systemschanges in the provision of psychiatric care. As a result, Rhode Island's MentalHealth System was rated number one in the nation by the Public Citizen HealthResearch Group.

    Dr. Mauch served as member of the National Advisory Board of the U.S.Center for Mental Health Services and co-chaired a health care reform task force onbehavioral health for the Labor and Human Resources Committee of the U.S. Senate. She was also Principal Investigator on a number of federal and foundation-fundedresearch and demonstration projects in the mental health and long-term care fields. She has published several key articles and book chapters on the management of careand public-private partnerships in services delivery and systems management for thebehavioral health care industry. Dr. Mauch recently served as the Chief ExecutiveOfficer of Magellan Public Solutions, Inc., a health care organization with thecapacity to deliver specialty care management solutions to the public sector.

Neil Meisler, MSW

    Neil Meisler is Director of Residential and Developmental PsychotherapeuticServices in Chestertown, Maryland and is an Assistant Professor of Psychiatry at theMedical University of South Carolina. In his long career as an administrator of statemental health services he has served as Director of the Division of Mental Health inthe Rhode Island Department of Mental Health, Mental Retardation and Hospitals,as Executive Deputy Commissioner of the South Carolina Department of MentalHealth, and Director of the Division of Alcohol, Drug Abuse, and Mental Health ofthe Delaware Department of Health and Human Services.

John A. Morris

    John Morris served an interim appointment as Director of Mental Health forSouth Carolina from 1995 to 1997; he also served as Deputy State Director. Before1990, he held numerous clinical and administrative positions in the Department ofMental Health, having begun his career as a ward attendant at the South CarolinaState Hospital in 1969. Morris became a program director for the MissouriDepartment of Mental Health in the mid-1970's.

    He is Professor of Clinical Neuropsychiatry and Behavioral Sciences at the University of South Carolina School of Medicine and the founding Director of theSC Center for Innovation in Public Mental Health, a partnership between the Schoolof Medicine and the SC Department of Mental Health. In addition, Morris isVisiting Professor of Mental Health Policy at the George Warren Brown School ofSocial Work at Washington University in St. Louis, where he was named aDistinguished Alumnus in 1996. He is currently principal investigator on a federalgrant to replicate a supported employment model for persons with serious mentalillnesses, and has been PI on two grants to replicate rural assertive case managementmodels. Morris is immediate past president of the American College of MentalHealth Administration, and serves on the Board of Directors for the TechnicalAssistance Collaborative, Inc., as well as for the National Advisory Council to theGeorgetown Technical Assistance Center for Children's Mental Health and theKentucky Center for Mental Health Studies. He is serving a three-year term on theStanding Review Committee on Knowledge Application for the Center for MentalHealth Services, and has just been invited to serve a one year term on the PublicPolicy Committee of the National Mental Health Association.

Thomas D. Romeo

    Thomas Romeo was Director of Rhode Island's statewide agency for mentalhealth for 12 years. With the support of four Governors, the Rhode Island StateLegislature, and many citizens, he established a system of services based uponindividual needs and with the ultimate goal being return to one's home community. In Rhode Island, institutional settings continue to be considered a “last resort.”