The document summarizes lower courts' interpretations of the fundamental alteration defense provided by the Supreme Court in Olmstead v. L.C. regarding compliance with the ADA's integration mandate. It discusses approaches taken by the Second, Third, and Ninth Circuit courts. The Third Circuit requires states to have a comprehensive, effectively working plan for deinstitutionalization, while the Ninth Circuit takes a more deferential, retrospective approach and will not interfere so long as a state has an "even hand" plan, even if it is not moving at a reasonable pace. Overall, the document suggests the fundamental alteration defense has been applied inconsistently across circuits and provides states an easy way to avoid compliance with Olmstead.

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Olmstead’s Fundamental Alteration Defense – A Circuit Review
Christopher Sleeper
I. Introduction
In Olmstead v. L.C., 527 U.S. 581 (1999), the Supreme Court held that under Title II of
the Americans with Disabilities Act (“ADA”) unjustified segregation of individuals with
disabilities in institutions constitutes discrimination. The Court’s opinion reinvigorated the
deinstitutionalization movement, spurring litigation brought by the Department of Justice,
the institutionalized and their advocates, and those on the verge of institutionalization.
Many consider Olmsteadto be the Brown v. Board of Education for the disabled; however,
unlike Brown, the Supreme Court provided states with an excuse to not comply with the
integration mandate – the fundamental alteration defense. Further, the Supreme Court did
not define fundamental alteration, but only gave vague guidance. This omission has left the
lower courts to grapple with the complex issue of what constitutes a fundamental
alteration. This paper summarizes lower courts’ interpretations of the fundamental
alteration defense, particularly the three appellate courts that have ruled upon the issue –
the second, third and ninth circuits – and suggests that Olmstead is so internally flawed that
uniform application is nearly impossible.
II. Fundamental Alteration According to Olmstead
In 1990, Congress enacted the ADA“to provide a clear and comprehensive national
mandate for the elimination of discrimination against individuals with disabilities.”1
Congress recognized that “historically, society has tended to isolate and segregate
individuals with disabilities, and, despite some improvements, such forms of discrimination
1Olmstead v. L.C., 527 U.S. 581, 589 (1999).

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against individuals with disabilities continue to be a serious and pervasive social problem”
and that such discrimination against individuals with disabilities persists in such critical
areas as . . . institutionalization . . . ”2Olmstead addressed Title II, the public services portion
of the ADA, which states in relevant part:
“Subject to the provisions of this subchapter, 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.”3
Congress authorized the Attorney General to issue regulations to implement and
enforce the ADA. Specifically, in regard to Title II, the Attorney General issued the
“integration regulation” which states, “A public entity shall administer services, programs,
and activities in the most integrated setting appropriate to the needs of qualified
individuals with disabilities.”4The integration regulation defines “most integrated setting”
as “a setting that enables individuals with disabilities to interact with non-disabled persons
to the fullest extent possible.”5
Olmstead affirmed the Attorney General’s integration regulation that promotes
community placement whenever possible. Writing for the plurality, Justice Ginsburg stated
that unnecessary institutionalization reflects two impermissible judgments.6 First,
institutionalization “perpetuates unwarranted assumptions that persons so isolated are
2Id. at 588.
3Id. at 589-90, citing 42 U.S.C. § 12132.
428 CFR § 35.130(d) (1998).
528 CFR pt. 35, App. A, p. 450 (1998).
6Olmstead v. L.C., 527 U.S. 581, 600 (1999).

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incapable or unworthy of participating in community life.”7 Second, institutionalization
“severely diminishes the everyday life activities of individuals.”8 Therefore, once a State
undertakes the responsibility of providing a service, such as a community-based program,
it must implement it in a non-discriminatory manner by allowing all “qualified individuals”
to be served in the “most integrated setting appropriate.”9
Even so, the state’s obligation to provide community-based services is not
“boundless.”10 The integration regulation is tempered by the reasonable-modifications
regulation, which states: “A public entity shall 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.”11Justice Ginsburg gave scant guidance to lower courts on how to determine
whether a modification constitutes a fundamental alteration. She stated that a State might
maintain the defense by showing that given “the allocation of available resources,
immediate relief for the plaintiffs would be inequitable, given the responsibility the State
has undertaken for the care and treatment of a large and diverse population of persons
with mental disabilities.”12 She stressed that due deference should be given to the state’s
fiscal decisions on how to “maintain a range of facilities and to administer services with an
even hand.”13 One way a state may mount a successful fundamental alteration defense is
7Id.
8Id. at 601.
9Id. at 584.
10Id.
11Id. citing28 CFR § 35.130(b)(7) (1998).
12Id.
13Id. at 605.

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by providing a “comprehensive, effectively working plan for placing qualified persons with
mental disabilities in less restrictive settings, and a waiting list that moved at a reasonable
pace not controlled by the State’s endeavors to keep its institutions fully populated.”14
As the following sections illustrate, the plurality opinion confused rather than aided
lower courts. On the one hand, the plurality held that unnecessary institutionalization is
discrimination. On the other, the plurality held that a state may continue to unnecessarily
institutionalize an individual if relief for the plaintiff would be “inequitable” in light of
state’s obligations for the care of others “with an even hand.” Essentially, the plurality left
the pace of deinstitutionalization, or in fact whether to deinstitutionalize, largely up to the
discretion of the state. Some lower courts latched onto the plurality’s “comprehensive,
effectively working plan” example as the exclusive means of raising a fundamental
alteration defense.
III. The Developing Contours of the Fundamental Alteration Defense
A. Leeway to Administer Services with an Even Hand – Ninth Circuit
The Ninth Circuit Court of Appeals is one of the three appellate circuit courts that
have interpreted the fundamental alteration defense. The Ninth Circuit approach may be
summarized as follows: the state does not need a comprehensive, effectively working plan,
and absent facial discrimination, the court should defer to the state’s distributive
determinations.15 Focusing on the language in Olmstead that States should be given
“leeway” to “maintain a range of facilities and to administer services with an even hand,”
the Ninth Circuit cautions that courts should be sympathetic to a state’s fundamental
14Id. at 605-06.
15Townsend v. Quasim, 328 F.3d 511 (C.A.9 (Wash.), 2003); Arc of Washington State Inc. v.
Braddock, 427 F.3d 615 (C.A.9 (Wash.), 2005); Sanchez v. Johnson, 416 F.3d 1051 (C.A.9
(Cal.), 2005).

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alteration defense.16 So long the state is “genuinely and effectively in the process of
deinstitutionalizing disabled persons ‘with an even hand,’” the court will not tinker with
the state’s mental health-care scheme.17
In 2003, the Ninth Circuit struck down Washington’s fundamental alteration
defense but hinted at the government friendly approach it would soon adopt.18The State of
Washington allowed community-based waivers for disabled persons falling below a certain
income level (the “categorically needy”), while forcing disabled persons with a higher
income level (the “medically needy”) to remain institutionalized.19 The Court held this
waiver system constituted facial discrimination; however, the Court noted that requiring
the state to adopt a completely new program or to apply for additional Medicaid waivers in
order provide community-based services would constitute a fundamental alteration.20
Two years later, the Ninth Circuit adopted a highly deferential retrospective
approach in determining whether a modification would constitute a fundamental
alteration.21In State v. Sanchez, plaintiffs contested that the State of California violated
Olmstead by paying lower wages to employees of community-based service providers than
to employees of institutions, thus resulting in some developmentally disabled persons
remaining institutionalized.22 Plaintiffs demanded that California increase the size of its
HCBS waiver program and more aggressively pursue Medicaid reimbursement.23 While the
Court recognized that the requested relief would constitute a $1.4 billion, or forty percent,
16Braddock, 427 F.3d at 618.
17Sanchez, 416 F.3d at 1068.
18Townsend v. Quasim, 328 F.3d 511(C.A.9 (Wash.),2003).
19Id. at 514.
20Id. at 520.
21State v. Sanchez, 416 F.3d 1051 (C.A.9 (Cal.) 2005).
22Id. at 1055.
23Id. at 1062.

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increase in the California’s budget for developmentally disabled services,24 the Court
granted the State’s fundamental alteration on purely retrospective grounds. The Court
concluded that California’s commitment to deinstitutionalization was “genuine,
comprehensive and reasonable” and that its plan was “comprehensive, effective, and
moving at a reasonable pace” based upon retrospective evidence that California increased
its HCBS waiver slots from 45,000 in 2002 to 70,000 in 2005 and increased expenditures
for community services by 196% during the same period.25 Based on past evidence, the
Court concluded that California’s deinstitutionalization “plan” was “effectively working.”26
The Court inferred that California would continue its progress of deinstitutionalization.
Any alteration to this “effectively working” plan would disrupt the state’s “working plan”
and “restrict impermissibly that California is permitted in its operation.”27 The
retrospective approach in Sanchez gives the state an absolute fundamental alteration
defense if it already has an effective plan.
Similarly, the Ninth Circuit granted the State of Washington’s fundamental
alteration defense when developmentally disabled plaintiffs requested that Washington
expand its HCBS waiver program to allow every qualified individual to receive community-
based services.28In granting the State's fundamental alteration defense, the Court again
adopted a retrospective analysis. The Courtnoted that the State's institutional population
had declined by twenty percent from 1994 to 2001 and that its expenditures on community
24Id. at 1063.
25Id. at 1067.
26Id. at 1068.
27Id.
28Arc of Washington State v. Braddock, 427 F.3d 615 (C.A.9 (Wash.) 2005).

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services had doubled in the same period.29 In so holding, the Court bluntly stated, “[s]o
long as states are genuinely and effectively in the process of deinstitutionalizing disabled
persons ‘with an even hand,’ we will not interfere.”30 Again, the fundamental alteration
proved impenetrable. Once the State establishes an effectively working “plan” based upon
retrospective evidence, the Court does not seriously consider whether the plaintiff’s
particular relief would merely constitute a reasonable modification.
The Ninth Circuit is not the only court to transform the fundamental alteration
defense into a trump card by giving “leeway” to a state’s distributive decisions. Decisions
by District Courts of Maryland and New Hampshire are similar striking.31 In granting
Maryland’s fundamental alteration defense, the district court spent most of the opinion
lauding Maryland as the “acknowledged leader” in the field of development disabilities.32
Then the Court summarily held that plaintiff’s requested relief of accelerating the process
of finding and creating community placements for TBI/NRDD patients would be
“unmanageable expensive” and thus a fundamental alteration.33 The Maryland court did
not engage in any cost analysis but just focused on Maryland’s retrospective success in
deinstitutionalization. Likewise, the New Hampshire District Court granted the State’s
fundamental alteration defense because the Court should not “tinker” in an effectively
working plan.34 The Court emphasized that New Hampshire consistently expends all
allocated funds, has increased its budget for the acquired brain disorder (ABD) program
29Id. at 621.
30Id. at 620.
31Williams v. Wasserman, 164 F.Supp.2d 591 (D.Md., 2001); Bryson v. Stephen, 2006 WL
2805238 (D.N.H.,2006).
32Wasserman, 164 F.Supp.2d 635.
33Id.
34Bryson v. Stephen, 2006 WL 2805238 at *5.

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and has significantly increased available waivers from 15 in 1993 to 132 in 2006.35
Without weighing the plaintiff’s requested relief in particular, the Court stated, “Although
more can always be done, the reality is the states must make difficult decisions when
allocating necessarily limited resources.”36
In each of these cases that use the retrospective approach, the court did not truly
consider whether the pace of deinstitutionalization was reasonable given current demand
and other factors and whether the particular relief would be a fundamental alteration. The
Third Circuit Appellate approach does not fair much better; its interpretation of the
fundamental alteration defense makes a “comprehensive, effectively working plan” a “get
out of jail free card” for states not otherwise complying with the ADA’s integration
mandate.37
B. Comprehensive, Effectively Working Plan– Third Circuit
The Third Circuit Court of Appeals has erroneously seized upon the Olmstead
plurality’s “comprehensive, effectively working plan” example and turned it into the
exclusive means by which a state may succeed in its fundamental alteration defense. In
dicta, the Olmstead plurality stated, “If, for example, the State were to demonstrate that it
had a comprehensive, effectively working plan for placing qualified persons with mental
disabilities in less restrictive settings, and a waiting list that moved at a reasonable pace
not controlled by the State's endeavors to keep its institutions fully populated, the
reasonable-modifications standard would be met.”38 The Third Circuit disregards two key
35Id. at *9.
36Id. at *5.
37 David Ferleger, The Constitutional Right to Community Services, 26 Ga. St. U. L. Rev. 763,
776 (2010).
38Olmstead, 527 U.S. at 605-06.

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words: “for example.” There is another problem, however, with this example. The plurality
invites a mere “plan” which itself would satisfy the integration mandate.39 The plurality
allows a “plan”, devoid of actual compliance, to satisfy a state’s obligation.40
The Third Circuit developed its interpretation throughout several Frederick L cases
and Pa. Prot. & Advocacy.41 In the Frederick L. cases, patients at Norristown State Hospital,
a state-run psychiatric hospital in Pennsylvania, sued the Department of Public Welfare of
Pennsylvania for inadequate opportunities to be placed in community-care settings.42 The
state responded that it had demonstrated a genuine commitment to deinstitutionalization
and was effectively complying with Olmstead. Pennsylvania pointed to its past progress
with deinstitutionalization, specifically that it had closed thirteen state-operated
psychiatric facilities between 1976 and 1998 and reduced the institutional population from
40,000 in 1950 to fewer than 3,000.43 In Frederick L. I, the Court held that, although past-
progress is relevant in evaluating a fundamental alteration defense, a comprehensive
working plan is a necessary component of a fundamental-alteration defense.44Accordingly,
the State must communicate a plan “in some manner” that allows the Court to hold the
State accountable for its commitment to deinstitutionalization and includes a wait list that
moves at a “reasonable pace.”45 The Court remanded the case and ordered Pennsylvania to
draft an Olmstead plan.
39 Ferleger, supra note 37, 775.
40Id.
41Frederick L. v. Dept. of Pub. Welfare of Pa., 364 F.3d 487 (C.A.3 (Pa.),2004); Frederick L. v.
Dept. of Pub. Welfare of Pa., 422 F.3d 151 (C.A.3 (Pa.),2005); Pa. Prot. and Advocacy, Inc. v.
Pennsylvania Dept. of Public Welfare,402 F.3d 374 (C.A.3 (Pa.), 2005).
42Frederick L I, 364 F.3d at 489.
43Id. at 490.
44Id. at 500-01.
45Id.

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The Court reviewed Pennsylvania’s plan in Frederick L. II and found it lacking.
Specifically, the Court criticized the plan’s goal of deinstitutionalizing “up to” 250 people
per year.46 In Frederick L. II, neither past progress or “general assurances and good-faith
intentions” was sufficient to raise a fundamental alteration defense.47 In order to give the
parties assistance, the Third Circuit Court of Appeals delineated more concrete guidelines:
“[W]e believe that a viable integration plan at a bare minimum should specify the time-
frame or target date for patient discharge, the approximate number of patients to be
discharged each time period, the eligibility for discharge, and a general description of the
collaboration required between the local authorities and the housing, transportation, care,
and education agencies to effectuate integration into the community.”48
In Pa. Prot. & Advocacy, the Court actually granted plaintiffs summary judgment on
the State’s fundamental alteration defense.49Pa. Prot. & Advocacy brought suit against the
Department of Welfare of Pennsylvania on behalf of residents of the South Mountain
Restoration Center, a state-run nursing-type facility.50 The staff at South Mountain
believed that 80% of its residents could live in a community setting.51 The District Court
had granted the State’s fundamental alteration defense on fiscal grounds.52 The Appellate
Court held that budgetary concerns were irrelevant until the State had demonstrated a
commitment to action.53 Pennsylvania’s plan showed that it had no intention of
deinstitutionalizing this particular facility. The Court demanded that the State make an
46Frederick L. II, 422 F.3d at 158.
47Id.
48Id. at 160.
49Pa. Prot. & Advocacy, 402 F.3d at 385.
50Id. at 377.
51Id. at 383.
52Id. at 380.
53Id. at 383.

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effort to bring South Mountain into compliance with Olmstead. While the Third Circuit has
not yet found a satisfactory Olmstead plan, it stated that “When an agency has implemented
a sufficient compliance plan . . ., we must be wary of judicial mandates that could thwart or
undermine the agency's authority to carry out that plan as it sees fit.”54
The Third Circuit’s fixation on “comprehensive, effectively working plan” is as
flawed as the Ninth Circuit’s retrospective approach. Once a state creates this magic plan,
the Court will not look at whether the state really is genuinely committed to
deinstitutionalization but defer to the state on how to carry out its plan as it sees fit. As a
result of the Third Circuit’s focus on a plan, 26 states, including Ohio, have developed
Olmstead plans and 18 states have developed alternative responses, which are basically
documents evidencing compliance.55 Ohio drafted its Olmstead plan in 2001 and updated it
in 2006.56 One gets the impression that States drafted these plans purely as a legal shield
rather than as a means of embracing Olmstead. The Second Circuit combined elements
fromthe Ninth Circuit’s retrospective approach and the Third Circuit’s prospective
approach and arrived at a more sensible method for examining the fundamental alteration
defense.
C. Specific, Fact-Based Inquiry - Second Circuit’s Synthesis
In 2009, the Second Circuit attempted to clear up the mess created by the Ninth and
Third Circuit’s interpretations of the fundamental alteration defense.57 Disability
54Id. at 381-82.
55 “Olmstead Case References and Notes”, Center for Personal Assistance Services, available
at http://www.pascenter.org/olmstead/olmsteadcases.php (last accessed Apr. 20, 2013).
56See Ohio Access, http://www.ohioaccess.ohio.gov (last accessed Apr. 20, 2013).
57Disability Advocates, Inc. v. Paterson, 598 F.Supp.2d 289 (E.D.N.Y.,2009) remanded
Disability Advocates, Inc. v. Paterson, 653 F.Supp.2d 184 (E.D.N.Y., 2009), judgment vacated

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Advocates represented 21 “private” adult homes in New York City.58 They challenged New
York’s reliance on private, but licensed, adult homes rather than more integrated
supported housing.59 New York asserted fundamental alteration as an affirmative defense
because the (1) the requested relief would increase the State’s costs; (2) earmarking funds
for the requested purpose would unfairly impact others with mentally illness; (3) the
remedy would “alter many of the State's programs, activities, and policies;” and (4) the
State has an Olmstead plan.60 The Second Circuit agreed with the Ninth Circuit that states
must be given leeway to administer with an even hand, but disagreed that the Court should
be so sympathetic to the government as to make the integration mandate meaningless.61
The Court summarized the Third Circuit approach that requires a “comprehensive,
effectively working plan” as simply standing for the proposition that a state must genuinely
seek to comply with the integration mandate before it can assert fundamental alteration as
a defense; however, an Olmstead plan is not a necessary prerequisite to a fundamental
alteration defense.62 In sum, both the Ninth and Third Circuit approaches are relevant in
determining whether the state has demonstrated a commitment to
deinstitutionalizationbut do not resolve whether a modification is a fundamental
alteration.
Under the Second Circuit approach, once the Court has determined that the state has
made a commitment to comply with Olmstead, it must undertake a complex, fact-specific
on standing by Disability Advocates, Inc. v. New York Coalition for Quality Assisted Living,
Inc., 675 F.3d 149 (C.A.2 (N.Y.),2012).
58 598 F.Supp.2d at 292.
59Id.
60Id. at 333.
61Id. at 337.
62Id. at 339.

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inquiry regarding the requested relief.63 The inquiry should examine the aspects of the
Olmstead plan, if it exists, that relate to the particular plaintiffs, the fiscal impact of the
requested relief, potential impact on others with mental disabilities and other factors.64
Here, New York’s past progress (downsizing and closure of state-operated psychiatric
centers and reinvestment in community-based services) was relevant as evidence of
commitment to Olmstead.65 Likewise, the existence of an Olmstead plan was also relevant
as evidence of commitment.66 However, New York’s Olmstead plan was not particularized
to the plaintiffs, i.e. it did not plan for the integrating residents of adult homes into the most
integrated setting.67 Even though New York apparently did not demonstrate a commitment
to deinstitutionalizing adult homes and therefore could not assert a fundamental alteration
defense, the Second Circuit remanded the case for to develop a more fact extensive record,
particularly the fiscal impact and impact on others with mental disabilities.
The Court envisioned a lengthy, complex trial, perhaps months long, with detailed
fiscal analysis.68 The District Court issued a 129-page decision holding that expanding the
State’s community-based housing program to include adult home residents would not
constitute a fundamental alteration.69 The Court found that New York did not have a plan
to deinstitutionalize adult homes and that the number of adult home residents actually
given supported housing slots was negligible.70 Adult home residents were not a target
group for supported housing and other groups had a higher priority for community
63Id. at 334.
64Id.
65Id. at 340.
66Id. at 341.
67Id. at 345.
68Id. at 337.
69653 F.Supp.2d 184.
70Id. at 274.

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placement, resulting in de facto permanent institutionalization.71 The District Court
undertook a detailed fiscal analysis, weighing the expert testimony. The Court concluded
that the additional cost, when including Medicaid reimbursement, would constitute a
reasonable modification to the State’s program.72 Fatal to the State’s fundamental
alteration defense was its failure to do its own fiscal analysis instead merely stating that
costs would be substantially higher.73
On appeal, the judgment was vacated because Disability Advocates lacked standing.
The Second Circuit approach is the most accurate interpretation of fundamental alteration
defense. While flaws in the plurality’s reasoning in Olmstead produce uncertainty on how
far a state must go to integrate the disabled, the Ninth Circuit and Third Circuit clearly
erred in their interpretation. The Ninth Circuit unreasonably assumed that past progress
toward integration meant that the state had an “effectively working” system, and because it
was effectively working, the court must grant the state leeway to implement that system.
This assumption is not logical. The state might not be following the plan. The state might
not be implementing the plan in regard to certain groups of disabled. For budgetary
reasons, the waiting list for integrated placement might not be moving at a “reasonable
pace.” The Third Circuit erred by requiring a plan, assuming that if a state has a plan the
system must be “effectively working.” Reading the plurality’s example, the Third Circuit
focused on the word “plan” rather than on the words “effectively working.” The Second
Circuit, however, avoids the plurality’s troublesome “comprehensive, effectively working
plan” example, and focuses on the Olmstead plurality’s instructions to the District Court:
71Id. at 303.
72Id. at 305-08.
73Id. at 298.

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“In evaluating a State's fundamental-alteration defense, the District Court must
consider, in view of the resources available to the State, not only the cost of
providing community-based care to the litigants, but also the range of services the
State provides others with mental disabilities, and the State's obligation to mete out
those services equitably.”74
The Second Circuit correctly viewed the “comprehensive, effectively working plan”
as just an example and its existence as evidence of commitment to ending unjustifiable
segregation of the disabled. Rather than determine whether the system is “effectively
working”, the Second Circuit requires a complex, fact-specific inquiry looking at cost and
impact on others with disabilities. While this interpretation of the fundamental alteration
defense may not be perfectly in-line with Olmstead,it at least does not make an assumption
that gives the state an absolute fundamental alteration defense in all circumstances.
IV. Conclusion
Olmstead is not the Brown v. Board of Education of the ADA because it does not
unequivocally seek to end segregation of the mentally ill. On the one hand, Olmsteadheld
that unnecessary segregation of the disabled is wrong (perpetuates the view of disabled as
“incapable or unworthy”) and harmful (diminishes their quality of life) thus seemingly
suggesting that states must move toward gradual deinstitutionalization. On the other hand,
Olmsteadexplicitly states that its holding does not impose a “standard of care” or require
that states provide a certain level of benefits to individuals with disabilities.75 All Olmstead
requires is that the states administer the services they do provide with an even hand, i.e. in
a nondiscriminatory manner. Further, Olmstead suggests that ADA beneficiaries
74Olmstead, 527 U.S. 597.
75Id. at FN14.

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necessarily have to compete for limited state mental health resources.76 The Court does
not suggest that the state has an obligation to create a bigger pie of resources to achieve a
certain level of integration.77Olmsteaddoes not attempt to reconcile the conclusion that
unnecessary institutionalization is discrimination but 100% compliance with the
integration mandate would be too costly. The Court would not want to require a state to
devote fifty-percent of its budget to the mentally ill just to end institutionalization and
sacrifice other important interests. However, the Court does want to end
institutionalization motivated by discriminatory purpose, institutional entrenchment or
minor budgetary savings. Ideally, the Court would like the state to weigh evils, without
discriminatory bias, and administer its services with an even hand. The Court, however,
failed to encapsulate this concept in its reasoning or suggest a solution. Instead, the Court
required states to comply with the integration mandate subject to a reasonable
modification test and avoided the harsh reality that states cannot completely eliminate
unnecessary institutionalization. Because the Court did not set clear guidelines for how far
a state must go toward deinstutionalization, the Court caused chaos in lower courts’
interpretations of the fundamental alteration defense.
Some courts required states to request additional waivers and provide new
services,78 while others held that these modifications constituted fundamental alterations.
Some courts have found that cost alone is insufficient to mount a fundamental alteration
76 Fundamental alteration defense must take into consideration “allocation of available
resources” and responsibility the state has undertaken for the care and treatment of a large
and diverse population of persons with mental disabilities. Id. at 610; see also Shijie Feng,
Madness and Mayhem: Reforming the Mental Health Care System in Arizona, 54 Ariz. L. Rev.
541, 555 (2012).
77Id.
78Grooms v. Maram, 563 F.Supp.2d 840, 858 (N.D.Ill.,2008).

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defense, regardless of the cost, while others hold that cost is a critical component. Some
courts have determined that any modification to a scheme is unreasonable if the state has
demonstrated a commitment to deinstitutionalization. Even the Second Circuit’s approach
could not determine at what point a modification becomes a fundamental alteration. Is it
$30, $3,000 or forty-percent of the budget? There is no way of knowing, especially with
Olmstead’s unclear guidance.
Given the Department of Justice’s stepped up enforcement of the integration
mandate with resolution through settlement, we are unlikely to get more clear guidance
anytime soon on what constitutes fundamental alteration. The Attorney General should
work with states to end unnecessary institutionalization. Absent facial discrimination, the
court is not in a position to determine to what extent a state must deinstitutionalize before
modifications become fundamental alterations. In reality, Olmstead has been given far
more weight than its worth. It has spurred a lot of litigation, but has not illuminated how
much resources society must contribute toward ending isolation of the mentally disabled.