Proposed Elkton methadone clinic lawsuit settled
Official: Insurer pays out $400K
— During an exchange with opponents of a proposed chicken farm last month, Cecil County Council President Robert Hodge disclosed a previously unpublicized fact: the county’s insurer settled a long-fought federal lawsuit with a proposed methadone clinic earlier this year, paying out upwards of $400,000.
The lawsuit, filed in Decem-
ber 2012 by an investment group that looked to open a methadone clinic at the former Rose’s Diner off Route 40 in Elkton, alleged that the county engaged in a pattern of legislation that sought to discriminate against those with an addiction, as the Americans with Disability Act covers substance abuse disorders as a medical disability.
In announcing the lawsuit in 2012, Steven G. Polin, the Washington, D.C. lawyer, who represented CC Recovery Inc., told the Whig, “The county’s actions against CCR and its clients is very unsettling. This is a classic example of a county government allowing the illegal prejudices of its constituency to dictate its decision-making process.”
The case is drawing renewed attention at the county level, as opponents to a different zoning issue are calling for the same remedy reached in the Rose’s Diner case. Meanwhile, the Route 40 site is moving through a new process for development after being annexed by the town of Elkton.
Intentional discrimination? At the time the lawsuit was
filed, the issue was a topic of hot debate amongst the citizens and elected officials of Cecil County.
CC Recovery, along with Acorn Investments, a partnering investment company, leased the property at 722 E. Pulaski Highway in the spring of 2011. Throughout that summer, the partners spent about $40,000 outfitting the building for a recovery treatment center, according to court records.
When their plans became public, however, an increasing number of neighbors vocally spoke out against the project, drawing in the support of then-Cecil County Commissioner Diana Broomell. While the county had no zoning codes on the books concerning drug treatment centers at the time, Broomell organized an effort to pass restrictive measures before the clinic received state approval.
An initial effort in May 2011 sought to restrict drug treatment clinics to heavy industrial zones with the likes of asphalt plants, hazardous waste recycling facilities and prisons, despite other medical-type facilities currently being located in zones of business intense, light industrial and business general – the latter being the zone of Rose’s Diner. After the Planning Commission recommended against the amendment, the bill was withdrawn.
In November 2011, Broomell forwarded a new amendment that sought to re- quire Maryland Department of Health and Mental Hygiene licensure before the county would issue a certificate of occupancy to any medical clinic, defined as an office with more than two physicians. The issue is that DHMH requires a certificate of occupancy before it will issue such a license, creating a Catch-22 for the applicant. The amendment also increased setback minimums, among other changes.
Ignoring Planning Commission questions about the definition of a “clinic,” Broomell moved the amendment to a vote by the Board of County Commissioners on Jan. 3, 2012. Then-commissioners Robert Hodge and Tari Moore — who today serve as county council president and county executive respectively — raised grave concerns about Broomell’s insistence to not hold a public hearing and ignore the Planning Commission’s concerns with the amendment. Regardless, Broomell along with thencommissioners Jim Mullin and Michael Dunn — a common voting bloc of the period — approved the legislation in a 3-2 vote.
Afterward, CC Recovery was notified that it no longer qualified for a certificate of occupancy. The developer applied for a setback variance in the spring of 2012 while also appealing the county’s ruling. In June 2012, the Cecil County Board of Appeals, following testimony from more than 20 concerned residents, denied both CC Recovery’s setback variance and reasonable accommodation waiver. Six months later, CC Recovery filed suit in U.S. District Court in Baltimore.
The developer noted in its lawsuit that just months prior to its waiver denial, the appeals board approved such a waiver for West Cecil Health Center, a mental health treatment center.
“The county is treating CCR and its patients in a discriminatory fashion, and is imposing far more stringent land use requirements than it imposes upon comparable medical sues for patients who are not suffering from chemical dependency,” Pollin wrote in their lawsuit.
Renewed attention More attention is now being drawn to the lawsuit due to its similarities to another ongoing zoning fight over proposed chicken farm projects in the Zion area.
Council President Hodge mentioned the Rose’s Diner case’s January settlement during an Aug. 2 Citizens Corner meeting with chicken farm opponents.
While the terms of the settlement with CC Recovery are subject to a confidentiality agreement and officials declined to disclose them, Hodge told attendees at that Citizens Corner meeting that the county’s insurer, Local Government Insurance Trust (LGIT), a nonprofit governmental insurance cooperative, paid the clinic’s developer upwards of $400,000.
County Administrator Al Wein and County Attorney Jason Allison recently said the county only had to pay its $5,000 deductible for the legal defense by Karpinski, Colaresi & Karp, of Baltimore. Participating LGIT governments pay their premiums and de- ductibles to the cooperative, which in turns funds the defense, settlements and losses of all members.
When asked if this settlement could raise future insurance rate quotes, Allison said rates would be determined by an actuary, who would review prior rates, claims and payout history of the county.
“I can’t tell you how this might or might not impact those rates,” he said.
Allison added that the decision to settle the case is not an admission of fault by the county, but a decision reached by LGIT alone. Because of that fact though, Hodge conceded that some may incorrectly believe the county lost the lawsuit on its merits.
“I personally think that (LGIT) made a business decision on the case, because I think they determined it was going to cost them a lot more to defend it,” Hodge said. “This is a problem with insurance companies, because I think in some cases they settle rather than holding firm on principle. (LGIT) has always insisted that we were in the right and it was legally defensible, but in this particular case they felt it was better to settle.”
While he asserts that the county’s actions were legal in the Rose’s Diner case, Hodge also believes that it was not fair to burden the applicant retroactively.
“I think it’s unfair and unreasonable to retroactively change any of those provisions, in order to prevent the farmer from building the proposed chicken houses,” he said. “And that’s exactly what the commissioners did in the Rose’s Diner case … it was very obvious and intentional.”
Future fallout While the Route 40 site at the heart of the Rose’s Diner case sat unchanged through the course of the lawsuit, new efforts aim to see it developed into a commercial plaza.
On Sept. 7, the Elkton Board of Commissioners unanimously approved an annexation request for the 10,600-square-foot parcel, which current owner, Acorn Investment Company II LLC, hopes to sell to the Segall Group, a commercial real estate firm that focuses on developing shopping centers. The idea is to turn the land into a shopping center, which could include a fast-casual restaurant, a coffee shop and business with a focus on medical use.
Unlike the prior proposal for a methadone clinic, however, the idea for commercial development was largely met without criticism by the public. One neighboring homeowner expressed concern over the town’s lack of zoning restrictions for medical clinics, such as the controversial ones passed at the county level.
“I think my client made it very clear that they don’t have any dealings with methadone clinics. That would actually be inconsistent with the arrangements with the other tenants and the center that they want to construct,” Dwight Thomey, legal counsel for the petitioners, told the town and audience at the Sept. 7 meeting. “They’ve been very firm about the fact that it would be it would be a real detriment to them to even consider having that kind of use on the site because it would make it very difficult, if not impossible to rent out the rest of the commercial space in the center.”
While the Rose’s Diner property may be getting a second look, the legislation that prevented its previous proposal isn’t. When asked if the lawsuit’s settlement may result in changes to the county zoning code to remove the restrictive Catch-22 scenario it created, both Hodge and Moore said that it was not a priority at the moment. They expect to brief the incoming county council and county executive on the issue, but ultimately leave the decision in their hands.
“When there’s a settlement, none of the ordinances get proven to be valid or invalid,” Hodge said. “I don’t think anybody wants to encourage methadone treatment facilities in Cecil County, but it’s also not reasonable to prohibit them.”
Moore called the lawsuit a “valuable lesson” for the county, one that should remind officials to “not change the rules mid-game.”
“Ordinances are living, breathing documents and they should be updated on a regular basis,” she said, noting that the latest outcry over the Horst chicken farm has sparked such a review on contained animal feeding operation regulations in the county. “The situation that we ran into four or five years is not one we want to repeat.”
Hodge noted that a few other medical clinics, including West Cecil Health Center, have had to contend with the restrictive law, essentially forcing them to receive a waiver from the Catch-22 provision.
“It’s one more layer of rules and regulations, hoops and hurdles that they have to jump through to get something done,” he said, noting the county would love to host as many primary care physicians as possible.
Rose’s Diner still stands today on Route 40, years after the site became a point of contention between the county and a developer and ended in a settled lawsuit.