This case arose from claims by mentally disabled persons in the custody of the State of Georgia that they were being discriminated against under the ADA because they were denied access to the least restrictive treatment options, in this case community placement and treatment. The case is based solely on claims under Title II of the ADA that governs access to governmental services. There are no claims of constitutional deprivations of liberty. The court also found that the claims had not been mooted by the moving of the individual plaintiffs to community placement after the instigation of the legislation.

The state denied any discriminatory intent and asserted that its decisions on community placement were made on the basis of what was best for the individual client, the resources available, and the overall impact of community placement on the state's resources for providing services for persons with mental disabilities. (There was no claim that these plaintiffs posed any threat to the community.) The United States Supreme Court first reviewed the applicable statutory language and the federal regulations implementing the statute. The key provision, termed the "reasonable modifications regulation," 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." 28 CFR s 35.130(b)(7) (1998).

Plaintiffs argued, and the court of appeals agreed, that since the state was already providing some community placement, increasing the amount of community placement available would not "fundamentally alter the nature of the service." The state countered that it had limited resources available and diverting resources to community placement would fundamentally alter the overall program. The United States Supreme Court upheld the appeals court's finding that keeping a patient in an overly isolated treatment environment was discrimination under the ADA, but questioned its rejection of the state's cost and resource allocation defense. As characterized by the Supreme Court, the appeals court's standard would always compare the incremental cost of community placement of an individual plaintiff against the entire state mental health budget. The Supreme Court rejected this approach, holding that the state should be allowed to present a defense based on the overall balance of services provided by its mental health system, and by a showing that there was a reasonable system to move patients to community placement and that the waits for such placement were reasonable. The state need not assure that every patient was put in community placement as soon as certified eligible by expert mental health professionals. This case is notable for the well-reasoned concurrence by Kennedy, joined by Breyer, that stresses the dark side of deinstitutionalization and cautions against interpreting the ADA in a way that will compel states, through fear of litigation, to further limit the availability of traditional closed mental institutions, condemning those in need of such care to live on the streets without it.