A. Statutory Framework
The issue in this case is best understood in light of the provisions and structure of the Americans with Disabilities Act of 1990 (the ADA), 42 U.S.C. § 12101 et seq., as a whole. Congress began the ADA with express findings and then set forth prohibitions against discrimination in employment (Title I), public services (Title II), and public accommodations (Title III). The statute as a whole is intended "to provide a clear and comprehensive national mandate for the elimination of discrimination [page 3] against individuals with disabilities" (§ 12101(b)) and to work significant changes across a wide range of private and public practices. See generally H.R. Rep. 485, Part II, 101st Cong., 2d Sess. 28-34 (1990); H.R. Rep. 485, Part III, 101st Cong., 2d Sess. 23-26 (1990) (26: "The ADA is a comprehensive piece of civil rights legislation which promises a new future: a future of inclusion and integration, and the end of exclusion and segregation."); S. Rep. 116, 101st Cong., 1st Sess. (1989).
Findings. Several of Congress’s findings speak directly to isolation of individuals with disabilities from the ordinary community settings that people generally take for granted. Congress’s very first finding after noting the number of Americans with disabilities was that "historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem." § 12101(a)(2). Other findings repeat and expand on this recognition that unnecessary isolation and segregation are a "form of discrimination." Congress included "segregation, and relegation to lesser services, programs, activities, benefits, jobs, or other opportunities" in a list of "various forms of discrimination." § 12101(a)(5). Congress declared that "the Nation’s proper goals regarding individuals with disabilities are to assure equality of opportunity, full participation, independent living, and economic self-sufficiency for such individuals." § 12101(a)(8). Congress added that "unfair and unnecessary discrimination and prejudice denies . . . the opportunity to compete on an equal basis and to pursue those opportunities for which our free society is justifiably famous." § 12101(a)(9).
Employment. Title I of the ADA addresses employment. §§ 12111-12117. It defines "qualified individual [page 4] with a disability" based on the ability to perform "the essential functions" of the job. § 12111(8). The definition adds that "consideration shall be given to the employer’s judgment as to what functions of a job are essential." § 12111(8).
The basic rule of Title I is a ban on "discrimination" in employment. § 12112(a). The statute then itemizes what discrimination "includes." § 12112(b). Practices that "segregat[e] . . . in a way that adversely affects the opportunities or status of . . . [an] employee because of the disability" are included. § 12112(b)(1). Also included are refusals to make "reasonable accommodations" that would impose no "undue hardship" (§ 12112(b)(5)(A)), a standard that is defined to mean "significant difficulty or expense, when considered in light of" a number of factors, focused on but not limited to cost considerations (§ 12111(10)). In a similar vein, the Act adds a defense for certain employment standards if they are "job-related and consistent with business necessity," subject to a "reasonable accommodation" limitation. § 12113(a). The Equal Employment Opportunity Commission is authorized and directed to "issue regulations . . . to carry out" Title I. § 12116.
Public Services. Title II of the ADA applies to "public services" furnished by governmental entities. §§ 12131-12165. In addition to a host of provisions governing transportation services (§§ 12141-12165), Title II sets forth four generally applicable provisions (§§12131-12134). These provisions apply to any "public entity," which includes a "State or local government" as a whole, as well as particular departments or agencies. § 12131(1).
The core term, "qualified individual with a disability," is based on "meet[ing] the essential eligibility requirements [page 5] for the receipt of services or the participation in programs or activities provided by a public entity." § 12131(2). The basic anti-discrimination rule, then, is that, "[s]ubject to the provisions of [Title II], 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." § 12132. After applying the remedy provisions of 29 U.S.C. § 794a–the Rehabilitation Act–to this prohibition (§ 12133), Title II directs the Attorney General to "promulgate regulations . . . that implement" the prohibition (§ 12134(a)), specifying that (except for three designated areas) the regulations shall not only be consistent with the ADA as a whole but also with the so-called "coordination regulations" promulgated by the Department of Health, Education, and Welfare on January 13, 1978, under Section 504 of the Rehabilitation Act, 29 U.S.C. § 794. § 12134(b). 2
Acting pursuant to that directive, the Attorney General has promulgated regulations stating: "A public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d); see Pet. Br. App. 13a-14a. The regulations further provide that a public entity must make "reasonable modifications" to its practices to avoid discrimination "unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program, or activity." 28 C.F.R. § 35.130(b)(7); Pet. Br. App. 13a. The Attorney General explained, upon promulgating these regulations, that they were "intended to prohibit [page 6] exclusion and segregation of individuals with disabilities," that "[i]ntegration is fundamental to the purposes of the Americans with Disabilities Act" because "[p]rovision of segregated accommodations and services relegates persons with disabilities to second-class status," and that, "in most instances, separate programs for individuals with disabilities will not be permitted." Pet. Br. App. 17a-18a (emphases added by petitioners omitted).
Public Accommodations. Title III of the ADA governs public accommodations offered by private entities. §§ 12181-12189. After defining key terms such as "public accommodations" (§ 12181), Title III states a general rule that no one "shall be discriminated against on the basis of disability in the full and equal enjoyment of goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation . . . ." § 12182(a). The next subsection, entitled "construction," then lays out a series of standards giving specific meaning to the bar on discrimination. § 12182(b).
The "construction" subsection first designates a number of actions or inactions that "shall be discriminatory," including "denial of the opportunity . . . to participate in or benefit from" a defendant’s goods, services, etc.; affording such an opportunity to an individual with a disability "that is not equal to that afforded to other individuals"; and providing a good, service, etc. "that is different or separate from that provided to other individuals, unless such action is necessary" to ensure a comparably effective benefit. § 12182(b)(1)(A). Reinforcing and extending the foregoing presumption against separateness, the same subsection specifies that goods, services, etc. "shall be afforded to an individual with a disability in the most integrated setting appropriate to the needs of the individual" (§ 12182(b)(1)(B)) and that, even if a separate [page 7] program is justified, the opportunity to participate in the program that is "not separate or different" may not be denied (§ 12182(b)(1)(C)). The subsection then adds several "specific prohibitions," the broadest of which mirrors Title I’s reasonable-accommodation provision by stating that "discrimination includes" several kinds of inaction:
failure "to make reasonable modifications" when "necessary to afford" goods, services, etc. to individuals with disabilities, unless the defendant "can demonstrate that making such modifications would fundamentally alter the nature of such goods, services," etc.;
failure "to take such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services, unless the [defendant] can demonstrate that taking such steps would fundamentally alter the nature of the good, service, [etc.] being offered or would result in an undue burden";
failure "to remove [certain] barriers . . . in existing facilities . . . [or] vehicles . . . where such removal is readily achievable" and, otherwise, "to make such goods, services, [etc.] available through alternative methods if such methods is such methods are readily achievable."
B. This Litigation
L.C. has mild to moderate mental retardation and schizophrenia; E.W. has mild retardation and borderline personality [page 8] disorder. See Pet. App. 32a-33a; Pet. Br. 8. At different times, both women were admitted to the Georgia Regional Hospital-Atlanta. Pet. Br. 8. In 1995, L.C. brought suit alleging an entitlement under the ADA to be provided her State-provided "habilitation" and treatment services in a community rather than institutional setting, and E.W. intervened. Pet. App. 32a-33a.
While the case was still in the district court, L.C. was given a community placement; and while the case was in the court of appeals, so too was E.W. See Pet. Br. 9, 11. Except for the period surrounding needed surgery for kidney problems in E.W.’s case (Pet. Br. 11), it was accepted by the State below, and the State’s professional treatment teams determined, that existing community programs constituted, at a minimum, appropriate placements for both L.C. and E.W. See Pet. Br. 9-11; Pet. App. 36a ("[t]here is . . . no dispute that plaintiffs can be placed in the community"; "defendants have already placed L.C. in a community-based program"; "the qualified experts are unanimous in their opinion that E.W. can be placed in the community, and defendants concede that E.W. qualifies for community-based services" (footnote discussing surgery omitted)); id. at 38a-39a ("there is no dispute that defendants already have existing programs providing community services to persons such as plaintiffs"). On that basis, the district court granted summary judgment to L.C. and E.W., holding that they were entitled under the ADA and the Attorney General’s implementing regulations to placement in appropriate community settings. Id. at 39a.
The court of appeals, in the main, affirmed. Pet. App. 1a-30a. It held: "where, as here, the evidence is clear that all the experts agree that, at a given time, the patient could be treated in a more integrated setting, the ADA [page 9] mandates that it do so at that time unless placing that individual would constitute a fundamental alteration in the state’s provision of services." Id. at 24a; see id. at 25a ("the State’s own professionals agreed that E.W. could be placed in a less segregated setting"). The court immediately added: "Nothing in the ADA, however, forbids a state from moving a patient back to an institutionalized treatment setting, as the patient’s condition necessitates." Id. at 24a.
The court of appeals also explained that the demonstrated authority of the State to transfer both its own funds and Medicaid funds between institutional and community settings presumptively made a community setting a "reasonable" accommodation. Id. at 26a. Nevertheless, while mere invocation of funding limits cannot justify the continued unnecessary institutionalization, the State has available a defense of "fundamental alteration." Id. at 25a-26a. The court remanded the case for the district court to consider the defense, instructing: "Unless the State can prove that requiring it to make these additional expenditures would be so unreasonable given the demands of the State’s mental health budget that it would fundamentally alter the service it provides, the ADA requires the State to make these additional expenditures." Id. at 29a. 4