“At Risk” or Not? Fifth Circuit Creates Circuit Split over ADA and Olmstead Interpretation

• March 01, 2024

• McKenna S. Cloud , Baker Donelson Bearman Caldwell & Berkowitz PC
• Cameron A. Cloud , Medical Student, University of Mississippi Medical Center

According to the Centers for Disease Control and Prevention, more than one in four adults in the United States have some form of disability[1]—disability impacts us all, whether directly or indirectly. A quarter century ago, three women successfully fought to advance disability rights in the United States. Two of these women were patients with serious mental illness (SMI) who challenged their institutionalization by the state of Georgia. The third woman was U.S. Supreme Court Justice Ruth Bader Ginsburg who authored the majority opinion in Olmstead v. L.C.[2]Justice Ginsburg became a champion for the disability community when she held in Olmstead that the unjustified confinement of individuals with mental disabilities in institutions qualifies as discrimination under the Americans with Disabilities Act (ADA).[3]

Fast forward 24 years. In September 2023, the Fifth Circuit created a circuit split in its interpretation of Olmstead and the ADA when it decided United States v. Mississippi.[4] In this opinion, the Fifth Circuit was the first federal appeals court to reject the “at risk” theory of Olmstead and ADA liability, which had previously been accepted by every circuit to address the theory. Under this theory, the “risk of institutionalization” is sufficient to sustain a claim of disability discrimination; an individual need not first be institutionalized to bring an ADA challenge.[5] The aims of the at risk theory are comparable to those of preventive services in health care—seeking to identify and address risk factors for at risk populations before problems arise or worsen. Under the Fifth Circuit ruling, however, individuals with disabilities would have to face segregation and unnecessary institutionalization prior to seeking redress from a court.

As a result of the circuit split on the at risk theory, state actors—particularly mental health agencies—are left questioning compliance requirements and liability exposure. Similarly, there is now uncertainty for plaintiffs and federal enforcers, such as the Department of Justice (DOJ), which has relied on the at risk theory to bring successful ADA and Olmstead claims and to enforce compliance with these mandates. Federal courts are also left with a lack of clarity, as precedent is now inconsistent as to whether at risk claims are cognizable. Additionally, this circuit split amplifies existing gaps in physicians’ knowledge of legal responsibilities when caring for patients with disabilities under the ADA.[6] Most importantly, however, the Fifth Circuit’s interpretation reduces protections under the ADA for individuals with disabilities—the very protections the disability community has devoted decades to ensuring.[7]

This article explores the background of the ADA and Olmstead, discusses the recent Fifth Circuit case, and highlights the legal and practical consequences of this new circuit split.

The ADA and Olmstead

The ADA and Olmstead constituted civil rights victories for the disability community, especially for individuals with mental disabilities.

The ADA

Congress enacted the ADA in 1990[8] to prohibit discrimination against individuals with mental or physical disabilities in various public and private settings.[9] In addition to ending discrimination, the ADA serves “to bring those individuals into the economic and social mainstream of American life.”[10] In the legislation, Congress acknowledged the historical issue of societal isolation and segregation of individuals with disabilities and that these forms of discrimination “continue to be a serious and pervasive social problem.”[11] The ADA recognizes that discrimination “persists in such critical areas as . . . institutionalizations” and “health services.”[12] Congress also noted, “individuals with disabilities continually encounter various forms of discrimination, including outright intentional exclusion . . . failure to make modifications to existing facilities and practices . . . segregation, and relegation to lesser services.”[13]

Title II of the ADA is the most crucial title for institutionalized individuals with mental disabilities, as the text bars discrimination by public entities.[14] Title II mandates, “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.”[15] Pursuant to its authority in the ADA, the U.S. Attorney General promulgated regulations to implement Title II.[16] These regulations require public entities to “administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.”[17] Additionally, public entities must “make reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program, or activity.”[18]

Olmstead

In the years to follow, the U.S. Supreme Court interpreted Title II of the ADA in the 1999 landmark opinion Olmstead v. L.C., penned by civil rights proponent Justice Ruth Bader Ginsburg.[19] The Court held in Olmstead that the unjustified institutionalization of persons with mental disabilities constitutes discrimination under the ADA.[20] In that case, the plaintiffs were two women with SMI who remained confined in a Georgia institution despite treating professionals’ determinations that community-based treatment was appropriate for them.[21] The plaintiffs sued Georgia state officials under Title II of the ADA for failure to place the women in community-based programs once treating professionals concluded such placement was proper.[22]

The Court held that unjustified institutionalization qualifies as discrimination based on disability under Title II.[23] Justice Ginsburg articulated the following “integration mandate”:

under Title II of the ADA, States are required to provide community-based treatment for persons with mental disabilities when the State’s treatment professionals determine that such placement is appropriate, the affected persons do not oppose such treatment, and the placement can be reasonably accommodated, taking into account the resources available to the State and the needs of others with mental disabilities.

The Court, however, acknowledged limits to this requirement to provide community-based treatment. For instance, the Court provided a “fundamental alteration defense,” recognizing states’ need to maintain a range of facilities to treat people with diverse mental disabilities.[24] Under the fundamental alteration defense, a court must consider, in light of the state’s mental health budget, the cost of providing community-based care to the plaintiffs, the range of services the state provides others with mental disabilities, and the state’s duty to equitably distribute those services.[25]

Following Olmstead, states began to revise their mental health systems to adhere to the integration mandate by developing “Olmstead plans,” reducing overreliance on institutional settings, and increasing the availability of and access to community-based care.[26] States were not the only parties to react to the Supreme Court’s instruction; the federal government also responded to Olmstead through presidential initiatives and DOJ litigation to encourage deinstitutionalization and increased community-based services.[27] For over two decades, the DOJ has continued to bring ADA and Olmstead suits challenging states’ health programs.[28] Mississippi’s mental health system was one such recent target.

Circuit Split: United States v. Mississippi

As mentioned, the Fifth Circuit recently created a circuit split in United States v. Mississippi when it rejected a theory of liability under the ADA and Olmstead that had frequently been utilized by plaintiffs and the federal government.

U.S. District Court for the Southern District of Mississippi

This case originated from a 2011 DOJ investigation into Mississippi’s mental health system, in which the DOJ found Mississippi in violation of the ADA and Olmstead’s integration mandate by unnecessarily institutionalizing individuals with SMI.[29] After several years of failed negotiation attempts between Mississippi and the federal government, the United States filed suit under Title II of the ADA in 2016.[30] The United States relied on the at risk theory of liability, alleging that, when individuals with SMI are discharged from hospitals, “Mississippi’s ongoing lack of community-based services means they are at serious risk of re-institutionalization.”[31]

In 2019, the U.S. District Court for the Southern District of Mississippi issued an opinion holding in favor of the United States.[32] Before analyzing Mississippi’s mental health system, the court cited several federal cases supporting the proposition that “Title II protects not only those persons currently institutionalized, but also those at serious risk of institutionalization.”[33] Furthermore, following Olmstead, the DOJ adopted a guidance document asserting that the “serious risk of institutionalization” is sufficient to establish a claim under the ADA.[34] Based on this persuasive authority from other courts and the DOJ, the court recognized the at risk theory as cognizable: “the risk of institutionalization can support a valid claim under the integration mandate.”[35]

Next, in assessing whether Mississippi was in violation of Title II’s integration mandate, the federal district court detailed Mississippi’s mental health system.[36] The court explained that, while the state’s community-based mental health system appears strong on paper, in practice, it is merely a recurring cycle of hospitalizations—“the hallmark of a failed system.”[37] In addition to finding insufficient community-based resources, the court also concluded the state over-relies on institutionalization.[38] The court noted that Mississippi has and utilizes more hospital beds than other states and allocates more money to institutional settings and less to community-based services than other states do.[39] Finally, the court emphasized Mississippi’s poor transition planning when discharging patients from hospitals and the lack of a qualified workforce for mental health care employers in the state.[40] For instance, there is neither a follow-up for, nor a consistent connection to, local services upon discharge, and some patients have no access to post-discharge medication; consequently, many individuals with SMI are re-hospitalized, some several times.[41]

After identifying the systemic deficiencies in Mississippi’s mental health system, the court held that, due to the more than 100 Mississippians with SMI who would prefer to receive community-based treatment, the state was in violation of the ADA and Olmstead’s integration mandate by unlawfully discriminating against people with SMI.[42] The court appointed a special master to help the parties reach a settlement.[43] In 2021, the court issued a remedial injunctive order, appointed a monitor, and issued a final judgment.[44] Mississippi appealed.[45]

Fifth Circuit

In September 2023, the Fifth Circuit issued an opinion reversing the district court’s judgment.[46] The Fifth Circuit held, as relevant to this article, that the federal government did not prove a cause of action for discrimination in violation of the ADA.[47] According to the court, “[n]othing in the text of Title II, its implementing regulations, or Olmstead suggests that a risk of institutionalization, without actual institutionalization, constitutes actionable discrimination.”[48]

The Fifth Circuit acknowledged evidence in the record supporting the at risk theory of liability.[49] After interviewing a sample of 156 Mississippians with SMI who had been admitted to state hospitals between 2015-2017, mental health experts determined that “each interviewee would have avoided, or spent less time in, a state hospital if he or she had been provided reasonable community-based services.”[50] Additionally, the experts found that 85% of interviewees not residing in a hospital during their interviews in 2018 were at “serious risk” of re-institutionalization.[51] The experts also discovered that, while 149 of the 150 interviewees preferred community-based treatment, such care was inadequately utilized for these individuals.[52] Finally, the experts identified a pattern of “cycling admissions,”—“about half of the 5,070 state hospital admissions from 3,951 patients were repeat.”[53]

Despite the hundreds of Mississippians with SMI who are placed at serious risk of institutionalization by Mississippi’s system, the Fifth Circuit concluded this evidence was not sufficient to sustain a cause of action under Title II’s integration mandate. The court determined that Olmstead is incompatible with “[a] claim of system-wide risk of institutionalizing of some unspecified group of patients” and that the government’s evidence of “‘generalizations’ drawn from a patient survey” did not establish “that individuals suffered ‘unjustified isolation’ en masse.”[54] According to the court, at risk claims of ADA discrimination are not supplied by the statute, the regulation, or Olmstead.[55] The court reasoned that Olmstead “turns on actual ‘unjustifiable institutionalization,’ not on hypothetical future events.”[56] Additionally, the court referenced Justice Kennedy’s concurrence in Olmstead, in which he raised federalism concerns associated with the federal government’s overseeing state-run programs.[57]

As the Fifth Circuit acknowledged, other courts of appeals that have addressed and accepted the at risk theory of liability include the Tenth Circuit,[58] Second Circuit,[59] Fourth Circuit,[60] Sixth Circuit,[61] Seventh Circuit,[62] and Ninth Circuit.[63] As such, six other circuits have concluded that Olmstead’s holding “is not limited to individuals already subject to unjustified isolation, but also ‘extend[s] to persons at serious risk of institutionalization or segregation.’”[64] The Sixth and Tenth Circuits reasoned, “a contrary interpretation is unreasonable because the integration mandate’s ‘protections would be meaningless if plaintiffs were required to segregate themselves by entering an institution before they could challenge an allegedly discriminatory law or policy that threatens to force them into segregated isolation.’”[65]

The Fifth Circuit, though, distinguished the Mississippi case from these other at risk cases: “[n]ot one of these cases was brought by the federal government with the intent of completely reworking state benefit programs,” and those cases did not assess the adequacy of mental health services.[66] The Fifth Circuit noted that, even if the at risk theory applied in those cases of physical disability discrimination, the at risk claims in the Mississippi case were not cognizable because, in the court’s view, the needs of individuals with physical disabilities are distinguishable from the needs of those with mental disabilities.[67] According to the court, “what a physically disabled person needs to maintain life and health is not subject to the unpredictable and varied symptoms and needs of a patient who manifests serious mental illness.”[68]

Whether the at risk theory of liability constitutes a cause of action under the ADA boils down to each circuit’s preferred modality[69] for statutory and regulatory interpretation. The six circuits that have accepted the at risk theory broadly interpreted the statute, regulation, and Olmstead to permit such claims, as “nothing in the Olmstead decision supports a conclusion that institutionalization is a prerequisite to enforcement of the ADA’s integration requirements.”[70] In contrast, the Fifth Circuit used a narrower textualist approach and concluded that the statutory and regulatory language do not expressly provide for at risk claims: “In stating that no individual shall be ‘excluded,’ ‘denied,’ or ‘subjected to discrimination,’ the statute refers to the actual, not hypothetical administration of public programs.”[71] As discussed below, this divergence in interpretations creates uncertainty for state mental health agencies, federal enforcers, plaintiffs, courts, and disability communities.

Circuit Split Consequences

This circuit split disrupts over two decades of ADA jurisprudence, leaving confusion in its wake. Prior to the Fifth Circuit’s decision in United States v. Mississippi, federal courts had consistently permitted plaintiffs and the DOJ to litigate ADA cases built upon at risk theories.[72] The following seemed clear: a claim that a state program placed individuals at serious risk of institutionalization could constitute a cognizable claim for discrimination in violation of Title II’s integration mandate. Now, however, the tide has turned. Without the Supreme Court’s weighing in to provide clarity, it is uncertain whether the at risk theory will suffice. The consequences of the Fifth Circuit’s ruling impact all stakeholders.

First, federal government enforcers—particularly the DOJ and U.S. Attorney’s Office—are now seemingly limited in the scope of lawsuits they can bring to ensure ADA and Olmstead compliance. These federal government actors have previously relied on the at risk theory to challenge states noncompliant with these federal mandates. New enforcement strategies may be required. For instance, after the United States v. Mississippi case, it seems clear that the United States can no longer sustain at risk claims in the Fifth Circuit, at least not for system-wide challenges for mental disability discrimination. This new precedent will require district courts within the Fifth Circuit to dismiss such at risk claims early in the lawsuit, likely under Federal Rule of Civil Procedure 12(b)(6). In other circuits, particularly those that have not yet addressed the at risk theory, the United States can either continue to bring at risk claims and chance rejection, or it can wait until individuals with disabilities are unnecessarily institutionalized to challenge a state system or program. The same goes for plaintiffs’ attorneys representing individuals with disabilities, as it is now unclear when a violation of the integration mandate has occurred.

Second, while the Fifth Circuit’s limiting of ADA liability constitutes a setback for the disability community, federal government enforcers, and plaintiffs’ attorneys, the limitation benefits state actors—such as state mental health agencies and Attorney General offices—as well as defense attorneys representing those state actors. The circuit split may reduce the quantity of Title II litigation if the United States and plaintiffs’ attorneys forego at risk claims moving forward. Alternatively, the Fifth Circuit opinion provides defense ammunition for states faced with at risk claims under Title II. Defense attorneys, in fact, have already cited the Fifth Circuit opinion to challenge at risk claims.[73]

Unfortunately, because the circuit split creates confusion as to what constitutes disability discrimination and a violation of the integration mandate, states’ compliance efforts are negatively impacted. Unanswered questions linger. Is a state in violation of Title II and Olmstead by operating deficient programs (such as insufficient community-based care) that place individuals with disabilities at serious risk of unnecessary institutionalization? Or does a violation only occur after an individual has suffered segregation and unnecessary institutionalization? The Fifth Circuit opinion asserts that, because mental disabilities are factually distinguishable from physical disabilities, the two categories require a different analysis under the ADA and Olmstead, with mental disabilities necessitating an individualized assessment.[74] Does a system-wide challenge premised on the at risk theory constitute actionable discrimination for physical disabilities but not mental disabilities? Indeed, at least one federal court has already interpreted the Fifth Circuit’s opinion to provide different analyses for mental versus physical disabilities, permitting system-wide proof of a violation only for physical disability discrimination.[75] How are states to comply with these federal mandates in the face of these inconsistencies and lack of direction?

Third, absent congressional intervention, administrative clarification, or Supreme Court guidance, lower federal courts must answer these open questions. Yet, federal courts are now left with inconsistent precedent when faced with at risk claims. Federal district courts have already begun to identify the conflicting case law following the United States v. Mississippi case.[76] The Fifth Circuit opinion is only binding within its circuit, so lower courts within the Fifth Circuit have clear direction to reject at risk claims, at least to the extent such claims support system-wide challenges to mental disability discrimination. Lower courts in other circuits, however, especially in circuits that have yet to address the at risk theory, now lack clear guidance. Some courts may cite the Fifth Circuit opinion as persuasive authority and similarly reject the at risk theory. Unless the Supreme Court shepherds the judiciary on this issue, ADA jurisprudence will likely continue to muddle.

Finally, of all interested parties, the Fifth Circuit opinion impacts the disability community the most prevalently. This circuit split is a major loss for individuals with disabilities and disability rights advocates. As previously noted, the circuit split limits the scope for ADA and Olmstead liability, requiring individuals with disabilities—especially mental disabilities—to suffer discrimination before seeking redress from federal courts. The Sixth and Tenth Circuits highlighted this precise consequence: “the integration mandate’s ‘protections would be meaningless if plaintiffs were required to segregate themselves by entering an institution before they could challenge an allegedly discriminatory law or policy that threatens to force them into segregated isolation.’”[77] Alas, perhaps the integration mandate’s protections have now been rendered meaningless.

Conclusion

Before September 2023, it seemed undisputed that the “risk of institutionalization” was sufficient to sustain a claim of disability discrimination under the ADA; an individual need not first be placed in an institution to bring an integration mandate challenge.[78] For decades, the United States and plaintiffs brought successful ADA and Olmstead claims based on this at risk theory of liability, and courts consistently accepted this theory as a cognizable cause of action. The Fifth Circuit’s recent United States v. Mississippi opinion, however, may be sounding the at risk theory’s death knell.

In that case, the Fifth Circuit was the first court to conclude that the integration mandate of Title II and Olmstead only applies to “actual institutionalization” rather than the “risk of institutionalization.”[79] The court reasoned that the ADA does not define discrimination in terms of prospective risk to qualified disabled individuals.[80] Hence, despite the evidence that Mississippi’s mental health system placed every person with SMI at serious risk of unjustified institutionalization, the court held there was no actionable discrimination under these federal mandates.

This circuit split over the viability of the at risk theory presents new uncertainties for litigants, courts, state agencies, federal government enforcers, and the disability community. The Fifth Circuit’s opinion limits the scope of ADA and Olmstead challenges that the United States and plaintiffs can bring and sustain. The opinion also generates compliance issues for states. There is now confusion as to when a violation of the integration mandate has occurred—only when an individual suffers unnecessary institutionalization, or when a state program is deficient such that it places people with disabilities at a serious risk of institutionalization? In granting greater deference to state agencies, the Fifth Circuit opinion may incentivize states to loosen the belt and suspenders on their compliance efforts, i.e., to shift focus from expanding community-based services to continued overreliance on institutional care. As acknowledged in Olmstead, states must find the appropriate balance between community-based and institutional care, as both are vital to providing necessary treatment for individuals with disabilities.[81] That balance, however, is even more blurred in the wake of this circuit split.

This circuit split impacts all who seek to comply with and are protected by the ADA. Ultimately, people with disabilities, including SMI, will suffer the consequences of this limited protection and states’ failures to implement preventive measures. Perhaps the Supreme Court will eventually reenter this conversation to provide consistency and clarity—a conversation that begin in 1999. This entire dialogue was sparked by three women who made history in the Supreme Court case of Olmstead: two women with SMI who paved the way for others in the disability community to fight for protections, and the Justice Ginsburg who championed for such protections.

About the Authors

McKenna Stone Cloud is a Health Law Associate at Baker, Donelson, Bearman, Caldwell & Berkowitz PC. She focuses her practice on health care transactions—including mergers, acquisitions, and hospital/physician joint ventures—health care compliance counseling, and behavioral health and substance use disorders. Prior to joining Baker Donelson, Mrs. Cloud served as a judicial law clerk to the Honorable Leslie H. Southwick of the U.S. Court of Appeals for the Fifth Circuit. During law school, she was a legal extern to U.S. District Court Judge Kristi H. Johnson for the Southern District of Mississippi.

Cameron A. Cloud is a second-year medical student at the University of Mississippi Medical Center in Jackson, Mississippi, where he researches patient-provider communication and school-based telemedicine. During his undergraduate career at the University of Southern Mississippi, he researched patient-perceived stigmatization and communication in mental healthcare. This past year, he served as a Delegate for the Mississippi State Medical Association.

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