(CN) – The 2nd Circuit rejected a New York City laboratory’s claim that state regulators singled it out for frequent inspections in part because its principals are “observant Jews.”
After Analytical Diagnostic Labs (ADL) had been in business for about 20 years, New York’s Department of Health in 2000 began conducting “more frequent surveys” of the private clinical testing lab. Regulators visited the lab “as often as every six months,” and “deliberately scheduled at least two of these investigations to fall on Jewish holidays, when [they] knew ADL’s principals, observant Jews, would be out of the office,” according to the ruling.
Regulators said the inspections were necessary because of the “number of deficiencies found at the laboratory and ADL’s failure to implement a plan of correction.”
For most of the last decade, the lab had frequent run-ins with regulators and as a result had trouble retaining both licensed lab directors and the state permits required to perform certain kinds of testing.
The lab sued the state, alleging disparate treatment, but lost at the district court level. Dismissing the action in 2008, a federal judge held that “ADL could not show the alleged differential treatment resulted from non-discretionary state action.”
The federal appeals court in Manhattan upheld the dismissal, but for different reasons.
Judge Rosemary Pooler did not agree that the lab’s “class-of-one” claims are barred by the Supreme Court’s 2008 decision in Engquist v. Oregon Department of Agriculture. But Pooler also reversed the finding that ADL had presented enough evidence to establish an equal protection violation.
On this basis, the three-judge panel upheld summary judgment for the state.
“We find nothing in the record that raises a question of fact as to the alleged disparate treatment,” Pooler wrote. “Moreover, although ADL now argues on appeal that DOH’s decisions were motivated by the religion or ethnicity of ADL’s owners, it presented no evidence that the owners of the other … labs were of a different religion or ethnicity.”