                                                                                                                           Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-15-1995

Wagner v Fair Acres
Precedential or Non-Precedential:

Docket 94-1275




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                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT
                          ___________

                           No. 94-1275
                           ___________

          MARGARET C. WAGNER, BY HER NEXT FRIEND
          GEORGE M. WAGNER

                          vs.

          FAIR ACRES GERIATRIC CENTER

                                Margaret Wagner, by her next
                                friend, George M. Wagner,

                                     Appellant
                           ___________

          Appeal from the United States District Court
            for the Eastern District of Pennsylvania
                   (D.C. Civ. No. 93-cv-2708)
                           ___________

                             ARGUED
                       September 14, 1994
                Before: SLOVITER, Chief Judge,
             MANSMANN and ALARCON,* Circuit Judges.

                    (Filed March 15 , 1995)
                          ___________

Stephen A. Feldman, Esquire (ARGUED)
Ellen R. Wase, Esquire
Richard P. Haaz, Esquire
Feldman & Feldman
1500 Walnut Street
Suite 904
Philadelphia, PA 19102

  COUNSEL FOR APPELLANT

William F. Holsten, II, Esquire (ARGUED)
Holsten & White
One Olive Street
Media, PA 19063

  COUNSEL FOR APPELLEE
*         Honorable Arthur L. Alarcon of the United States Court
of Appeals for the Ninth Circuit, sitting by designation.




Alison E. Hirschel, Esquire
Community Legal Services, Inc.
Law Center North Central
3638 North Broad Street
Philadelphia, PA 19140

Catherine C. Carr, Esquire
Community Legal Services, Inc.
Law Center South
1226 South Broad Street
Philadelphia, PA 19146

     COUNSEL FOR AMICUS CURIAE
     ALZHEIMER'S AND RELATED DISORDERS ASSOCIATION
       OF GREATER PHILADELPHIA
                           ___________

                        OPINION OF THE COURT
                             __________


MANSMANN,   Circuit Judge.

            The general issue we address is whether Fair Acres

Geriatric Center, a county-operated intermediate care nursing

facility, violated Section 504 of the Rehabilitation Act of 1973,

29 U.S.C. Section 794, when it denied admission to Margaret C.

Wagner, a 65 year old woman afflicted with Alzheimer's disease.

Although Fair Acres admits Alzheimer's patients, it denied

admission to Mrs. Wagner because it determined that its facility

and staff could not accommodate the behavioral manifestations of

her disease.

            The jury was asked to decide whether, despite her

handicap of Alzheimer's disease, Mrs. Wagner was "otherwise

qualified" for admission to Fair Acres within the meaning of
section 504, including any reasonable accommodation Fair Acres

was required to make.   Following the jury verdict in favor of

Mrs. Wagner, the district court granted Fair Acres' motion for

judgment as a matter of law, and conditionally granted its motion

for a new trial.

          We find that there was legally sufficient evidence to

support the jury's verdict.   Thus, we will vacate the district

court's grant of judgment as a matter of law for Fair Acres.     We

are uncertain, however, that given the correct legal standards,

the district court would have exercised its discretion in finding

that the verdict was against the great weight of the evidence.

Thus we will also vacate the district court's conditional grant

of Fair Acres' motion for a new trial and remand for

reconsideration of this motion.



                                  I.

          In 1988, at age 58, Margaret Wagner was diagnosed as

suffering from Alzheimer's disease, a chronic degenerative

neurological disorder that impairs intellectual functioning.

Alzheimer's is associated with and has a devastating effect on

intellectual functions including memory, recognition,

comprehension and basic functional ability.    As the disease

progresses, basic skills are lost, such as the ability to feed,

dress, groom or bathe oneself.    Mrs. Wagner suffers from a

particularly difficult, but not unique, form of Alzheimer's

disease which is characterized by screaming, agitation and

aggressive behavior.
          Initially, Mrs. Wagner was cared for by her husband,

assisted by his two adult daughters and by visiting nurses

supplied through the County Office of Services to the Aging, who

provided care approximately 27 hours a week.   In the summer of

1992, however, Mrs. Wagner suffered a marked deterioration in

cognitive functioning and behavior associated with her dementia.

As a result, her family could no longer satisfactorily care for

her at home.

          On August 23, 1992, Mrs. Wagner was admitted to Dowden

Nursing Home, a private facility located in Newton Square in

Delaware County, Pennsylvania.1   On September 2, 1992, she was

transferred from Dowden to the Wills Geriatric Psychiatry Program

operated by Thomas Jefferson University Hospital, due to Mrs.

Wagner's severe episodes of agitated behavior and confusion.

          On September 16, 1992, Wills made an initial referral

for Mrs. Wagner to be admitted to Fair Acres Geriatric Center.

Fair Acres is a 900-bed skilled intermediate nursing facility

operated by the Delaware County Board of Institutional

Management, licensed by the Pennsylvania Department of Health and

certified under Titles 18 and 19 of the Social Security Act.

Fair Acres receives county, state and federal funding, including

Medicare and Medicaid funding.    At least 98% of its patients are

admitted under medical assistance.

1
 .        Terressa Fleming, Mrs. Wagner's daughter, testified
that financial reasons motivated the family to admit Mrs. Wagner
to Dowden and that although her mother had been accepted at Fair
Acres initially, the family was trying to obtain Medicaid
approval prior to admitting her there.
            Fair Acres' stated mission and goal is to provide care

primarily for the geriatric community.    Approximately 60% of its

patients suffer from Alzheimer's disease or some other form of

dementia.    Although it has a staff-to-patient ratio of one to

eight, it is not staffed or equipped to handle psychiatric

residents.    Accordingly, if an applicant for admission poses a

threat of injury to himself or others, the application is

rejected.    An applicant's psychiatric history is reviewed to

determine (1) if the applicant's primary diagnosis is medical,

warranting nursing home placement and (2) if the applicant can be

absorbed comfortably and appropriately into Fair Acres' geriatric

population.    See Fair Acres' admission's guidelines containing

its "Psychiatric Policy."    (A. 676).

            On September 16, 1992, upon receiving Mrs. Wagner's

application for admission, Fair Acres' Admissions Committee2 made

an initial determination that Mrs. Wagner was not then suitable

for admission, but placed her application on "hold" pending

further information regarding her condition.   The Committee met

again on October 8, 1992 and designated Mrs. Wagner's application

as "medically disapproved," acting on the recommendation of its

psychiatric consultant, Dr. Satyendra Diwan, that Mrs. Wagner was

not appropriate for admission due to the behavioral problems she

was exhibiting at Wills.

2
 .        The Admissions Committee at Fair Acres is comprised of
the Medical Director, the Director of Administration, the
Director of Nursing, the Director of Psycho-Services, the
specific caseworker, a community representative and a
representative of the County Office for Services to the Aging.
          Between Mrs. Wagner's second and third evaluations,

Linda Hadfield, Fair Acres' admissions RN, visited Wills to speak

with Mrs. Wagner's nurses and staff and to observe Mrs. Wagner

firsthand.    Mrs. Wagner was put on "hold" again after the third

admissions committee meeting on October 29, 1992.    Dr. Diwan's

notes in the "comments" area of Mrs. Wagner's October 29th

evaluation form indicated that Mrs. Wagner "needs more time" and

was "not appropriate for Fair Acres."   (A. 226-227).

          On December 30, 1992, due to contradictions in the

documentation from Wills that had been submitted to Fair Acres,

Ms. Hadfield made a second visit to Wills and on January 6, 1993,

Dr. Diwan evaluated Mrs. Wagner for a fourth time.      After

reviewing Wills' progress reports, Dr. Diwan noted that Mrs.

Wagner was still agitated, confused and irritable as late as

December 29, 1992, but recommended a further evaluation in six to

eight weeks.   Finally, on February 17, 1993, a fifth evaluation

took place.    Although Wills' hospital records indicated that Mrs.

Wagner's behavioral problems had improved slightly, the records

showed that she continued to experience episodes of

combativeness, agitation and assaultiveness on a daily basis.

Under "comments," Dr. Diwan noted that Mrs. Wagner was a

"borderline case and will not fit into our milieu."      (A. 232).

Accordingly, Mrs. Wagner was again denied admission to Fair

Acres.

          On April 12, 1993, approximately two months after her

last evaluation by Fair Acres, Mrs. Wagner was admitted to Easton

Nursing Center.   Easton Nursing Center is located approximately
85 miles from the home of Mrs. Wagner's husband and children.

Because this represents a commute by car of one and one-half

hours each way, the number of visits between Mrs. Wagner and her

husband and children was severely curtailed.    While Mrs. Wagner

was at Wills, she was visited by her husband on a daily basis

unless he was ill.    Due to the fact that her husband has vision

only in one eye, he was unable to make the trip to Easton

independently.    Consequently, while Mrs. Wagner was at Easton,

her family was only able to visit her twice a week.

            On May 21, 1993, Margaret Wagner, by her next friend

George Wagner, filed a two count complaint in United States

District Court for the Eastern District of Pennsylvania.    Count

One alleged that Fair Acres had discriminated against Mrs. Wagner

on the basis of her handicap, the behavioral aspects of her

dementia, in violation of section 504 of the Rehabilitation Act

of 1973, 29 U.S.C. § 794, by refusing to admit her to its nursing

facility.    Mrs. Wagner sought a declaration that the acts of Fair

Acres had violated her rights under section 504 of the

Rehabilitation Act and sought injunctive relief enjoining Fair

Acres from unlawfully excluding her from its facility and

directing Fair Acres to admit Mrs. Wagner to its first available

bed.   She also sought damages and an award of attorney's fees and

costs.   In Count Two, Mrs. Wagner sought relief pursuant to Title

II of the Americans with Disabilities Act of 1990, 42 U.S.C. §§

12101, 12131.3

3
 .        This claim is not before us on appeal. At trial,
counsel agreed with the court that the standards and proofs under
          At trial, Mrs. Wagner introduced the testimony of three

expert witnesses to support her claim that she was qualified for

admission to Fair Acres in spite of the behavioral manifestations

of her Alzheimer's disease.   Dr. Gary L. Gottlieb, a geriatric

psychiatrist and the director of the geriatric psychiatry program

at the University of Pennsylvania School of Medicine, testified,

based on his review of Mrs. Wagner's medical records, that as

early as September, 1992, Mrs. Wagner was appropriate for the

type of care provided by a nursing facility such as Fair Acres.

Dr. Edward Kim, Mrs. Wagner's treating physician at Wills,

testified that Mrs. Wagner could have been accommodated by a

nursing home around the third week of October.   Finally, Mrs.

Wagner introduced the testimony of Dr. Bijan Etemad, a

psychiatrist at Easton Nursing Center (where Mrs. Wagner resided

at the time of trial), that in his judgment, Mrs. Wagner was

appropriate for nursing home care.

          Fair Acres argued that Mrs. Wagner's "sustained

combative and assaultive behavior distinguished her from Fair

Acres' patients and prevented her from being qualified for

admission" (Appellee's brief at 15), because its guidelines

prohibited it from admitting psychiatric patients.   Challenging

(..continued)
the Rehabilitation Act and under the ADA were similar and that
the case would be submitted to the jury under the Rehabilitation
Act only. Because the court did not submit the ADA claim to the
jury and based its opinion granting judgment as a matter of law
for Fair Acres solely on the Rehabilitation Act, we have no
record before us from which we can review Mrs. Wagner's ADA
claim. Accordingly, we do not address the standards or proofs
for establishing a claim under the ADA.
Mrs. Wagner's expert witnesses' lack of consideration for her

need for one-on-one supervision, Fair Acres contended that it is

not equipped, due to its staff to patient ratio, to provide one-

on-one supervision for prolonged periods of time.    It further

asserted that Dr. Kim's testimony was at odds with and often

contradicted his own progress notes, which indicated that Mrs.

Wagner was still exhibiting symptoms of agitation and

combativeness at the time when he claimed she became suitable for

transfer to a nursing facility.

          On September 22, 1993, at the close of all the

evidence, Fair Acres moved for judgment as a matter of law

pursuant to Fed. R. Civ. P. 50.   The court reserved its judgment

on this motion and submitted the case to the jury on one issue --

whether Margaret Wagner was "otherwise qualified" for admission

into Fair Acres within the meaning of section 504.   After

deliberating, the jury returned a verdict in favor of Mrs.

Wagner.

          On October 5, 1993, Fair Acres renewed its motion for

judgment as a matter of law, or in the alternative for a new

trial pursuant to Fed. R. Civ. P. 50(b), asserting that Mrs.

Wagner was not "otherwise qualified" within the meaning of

section 504 because she did not meet all of Fair Acres

requirements for admission.4   Fair Acres also contended, for the

4
 .        In support of its motion for a new trial, Fair Acres
asserted that: (1) the court erred in failing to give proper
judicial deference to the judgment of Fair Acres administrators;
(2) the court erred in failing to give a proper jury instruction
regarding the deference to which Fair Acres administrators were
entitled; (3) the court erred in admitting the testimony of Dr.
first time, that Mrs. Wagner had not been discriminated against

"solely by reason of handicap."5   On October 7, 1993, Mrs. Wagner

filed a motion for a new trial limited to damages only.

            On February 15, 1994, the district court entered its

order granting Fair Acres' motion for judgment as a matter of law

and conditionally granting its motion for a new trial.      The

district court found that Mrs. Wagner was not an "otherwise

qualified" handicapped individual who had been denied a benefit

solely by reason of her handicap, because according to the court,

she "sought admission to Fair Acres because of her handicap and

not in spite of it."   Wagner v. Fair Acres Geriatric Center, 859

F. Supp. 776, 782 (E.D. Pa. 1994).    According to the court, the

decision not to admit Mrs. Wagner was a medical treatment

decision made by Fair Acres' medical and health care

(..continued)
Etemad regarding Mrs. Wagner's condition after March 3, 1993; (4)
the court erred in refusing to instruct the jury that when
evaluating the alleged discrimination on the part of Fair Acres,
the jury was not to consider any evidence that related to Mrs.
Wagner's condition after March 3, 1993; and (5) the verdict is
against the weight of the evidence.
5
 .          This issue was not submitted to the jury. During its
charge to   the jury, after instructing the jury that in order to
establish   a violation of the Rehabilitation Act, a plaintiff must
meet four   requirements, the district court stated:

            In this case, I think only one of those
            requirements is at issue here, and that is
            the issue of whether or not she was otherwise
            qualified for participation in this program
            so that's the only issue I think you need to
            address in this case.

(A. 384). Counsel agreed that this was the only aspect of Mrs.
Wagner's prima facie case at issue. (A. 319).
professionals, and medical treatment decisions are generally

immune from scrutiny under section 504.   Observing that Fair

Acres admits patients suffering from Alzheimer's disease, the

court also held that section 504, by its very terms, does not

cover discrimination among similarly handicapped persons.

Finally, the court concluded that Mrs. Wagner was not "otherwise

qualified" for admission to Fair Acres based on the evidence

introduced at trial, because "it was not the function of Fair

Acres to provide psychiatric services for persons with disruptive

psychotic disorders."   Wagner v. Fair Acres, 859 F. Supp. at 783.

Accordingly, the court concluded that Mrs. Wagner failed to

establish a case for relief under section 504.

          The district court, in ruling on Fair Acres' motion for

a new trial, agreed with Fair Acres that its failure to instruct

the jury that some measure of deference should be given to the

judgment of the administrators of Fair Acres, constituted

prejudicial error.   The district court also found that the

verdict was against the great weight of the evidence and that a

final determination that Fair Acres violated section 504 of the

Rehabilitation Act would result in a miscarriage of justice.6

The district court denied Mrs. Wagner's motion for a new trial on

the issue of damages.




6
 .        With respect to Fair Acres' third and fourth grounds
for a new trial, the district court held that the admission of
Dr. Etemad's testimony, over Fair Acres' objection, did not
amount to prejudicial error. See n.4 supra.
          On February 18, 1994, Mrs. Wagner filed her notice of

appeal from the district court's order entering judgment as a

matter of law and conditionally granting Fair Acres' motion for a

new trial.   Mrs. Wagner did not appeal from the district court's

denial of her motion for a new trial on damages.

          The district court had jurisdiction pursuant to 28

U.S.C. § 1331.   We have jurisdiction pursuant to 28 U.S.C. §

1291.7

7
 .        On or about November 7, 1993, Mrs. Wagner was approved
for admission to Fair Acres. As counsel for Mrs. Wagner
concedes, the fact that Mrs. Wagner currently resides at Fair
Acres moots her claim for injunctive relief. Nonetheless, this
does not moot her claim for declaratory relief and an award of
attorney's fees and costs because we find that her claim for
declaratory relief falls within the exception to the mootness
doctrine characterized by the Supreme Court as "capable of
repetition yet evading review."

          "[T]he `capable of repetition, yet evading review'
doctrine is limited to the situation where two elements combine:
(1) the challenged action is in its duration too short to be
fully litigated prior to its cessation or expiration, and (2)
there was a reasonable expectation that the complaining party
would be subjected to the same action again." Weinstein v.
Bradford, 423 U.S. 147, 149 (1975) (per curiam) (citing Sosna v.
Iowa, 419 U.S. 393 (1975)).

          Applying these principles in Doe v. Colautti, 592 F.2d
704 (3d Cir. 1979), we held that Doe's Rehabilitation Act
challenge to the Pennsylvania Medical Assistance Statute (which
limited payments for care in private mental hospitals to 60 days
in any benefit period) was not rendered moot by Doe's discharge
from hospitalization. We found that the challenged action which
ended with Doe's discharge from hospitalization was "in its
duration too short to be fully litigated prior to its cessation
or expiration" and Doe's psychiatric history created "a
reasonable expectation that the complaining party [will] be
subjected to the same action again." 592 F.2d at 707, (citing
Super Tire Engineering Co. v. McCorkle, 416 U.S. 115 (1974)).

          Here too, due to the nature of Alzheimer's disease and
the fact that Alzheimer's patients suffer fluctuations in their
                                II.

          Section 504 of the Rehabilitation Act of 1973, 29

U.S.C. § 4, prohibits a federally funded state program from

discriminating against a handicapped individual solely by reason

of his or her handicap.   Section 504 of the Rehabilitation Act

reads in pertinent part:
          No otherwise qualified handicapped individual
          in the United States, as defined in section
          706(7) of this title shall, solely by reason
          of his handicap, be excluded from
          participation in, be denied the benefits of
          or be subjected to discrimination under any
          program or activity receiving Federal
          financial assistance . . . .


29 U.S.C. § 794.   A "handicapped individual" for purposes of the

Act is defined as "any person who (i) has a physical or mental

impairment which substantially limits one or more of such

person's major life activities, (ii) has a record of such

impairment, or (iii) is regarded as having such an impairment."

29 U.S.C. § 706(7)(B).    In order to establish a violation of the

Rehabilitation Act, a plaintiff must prove (1) that he is a
(..continued)
behavior, there is a reasonable expectation that Mrs. Wagner will
be subject to the same action again. As the medical director of
Fair Acres testified, approximately 20-25 times a year Fair Acres
has to transfer a patient to an acute psychiatric care facility
for treatment. Once stabilized, the patient is returned to Fair
Acres. The concern in Mrs. Wagner's case is that if she is
discharged to an acute psychiatric care facility, such as Wills,
Fair Acres would be free once again to refuse to admit her.
Thus, we find that Mrs. Wagner's claim for a declaration that
Fair Acres' requirements, policies and practices are
discriminatory and a declaration that Fair Acres has a statutory
obligation to make reasonable accommodations so that Mrs. Wagner
can benefit from the services it provides is not moot.
"handicapped individual" under the Act, (2) that he is "otherwise

qualified" for the position sought, (3) that he was excluded from

the position sought "solely by reason of his handicap," and (4)

that the program or activity in question receives federal

financial assistance.   Strathie v. Department of Transp., 716

F.2d 227 (3d Cir. 1983); Nathanson v. Medical College of

Pennsylvania, 926 F.2d 1368, 1380 (3d Cir. 1991).    It is

undisputed that Mrs. Wagner is a handicapped individual within

the meaning of the Act and that Fair Acres is a recipient of

federal assistance.   Indeed, the only issue submitted to the jury

was whether Mrs. Wagner was "otherwise qualified" for admission

to Fair Acres.

          In Southeastern Community College v. Davis, 442 U.S.

397 (1979), the Supreme Court held that an "otherwise qualified"

handicapped individual is one who can meet all of a program's

requirements in spite of his handicap.   Id. at 406.

Significantly, the Court indicated that an individual may be

otherwise qualified in some instances even though he cannot meet

all of a program's requirements.   In Strathie, we observed that

"this is the case when the refusal to modify an existing program

would be unreasonable and thereby discriminatory."     716 F.2d at

230.

          Further interpreting the Supreme Court's decision in

Davis, we held in Strathie that two factors pertain to the
reasonableness of a refusal to accommodate a handicapped

individual.   First, requiring accommodation is unreasonable if it

would necessitate modification of the essential nature of the
program.   Second, requiring accommodation is unreasonable if it

would place undue burdens, such as extensive costs, on the

recipient of federal funds.    Davis, 442 U.S. at 412; Strathie,

716 F.2d at 230.   See also Easley by Easley v. Snider, 36 F.3d

297 (3d Cir.), reh'g denied, (Oct. 18, 1994).

           In Easley, we held, "It follows, of course, that if

there is no factual basis in the record demonstrating that

accommodating the individual would require a fundamental

modification or an undue burden, then the handicapped person is

otherwise qualified."   Id.   Thus, in looking at whether an

individual is otherwise qualified, we must analyze whether the

person would be otherwise qualified if reasonable accommodations

are made for his/her handicap.



                                 A.

           The district court reviewed these same cases and

concluded that Mrs. Wagner was not an otherwise qualified

handicapped individual because Mrs. Wagner "sought admission to

Fair Acres because of her handicap and not in spite of her

handicap, and thus she is not an `otherwise qualified'

handicapped individual who has been denied a benefit solely by

reason of handicap." The district court concluded:
          . . . [I]n the absence of the Alzheimer's
          disease, Mrs. Wagner would not need the
          nursing home care she sought at Fair Acres.
          Clearly she sought a benefit because of her
          handicap and not in spite of it.

           Unlike the plaintiff in Nathanson [Nathanson
           v. Medical College of Pennsylvania, 926 F.2d
           1368 (3d Cir. 1991)] who sought admission to
          medical school in spite of her back problem,
          not because of it, and the plaintiff in
          Strathie who sought a school bus driver's
          license in spite of his deafness, not because
          of it, Mrs. Wagner sought admission to an
          institution capable of caring for Alzheimer's
          sufferers because she also suffers from
          Alzheimer's.


859 F. Supp. at 782-83.

          We believe that in focusing on why Mrs. Wagner sought

access to Fair Acres, the district court's analysis is misplaced.

It is irrelevant why a plaintiff sought access to a program,

service or institution; our concern, for purposes of section 504,

is why a plaintiff is denied access to a program, service or

institution.    Obviously, everyone that applies for admission to a

nursing home does so because of his or her disabilities.   Indeed,

no one would be able to meet a nursing home's admissions

requirements in the absence of some handicapping condition

necessitating nursing home care.8   Further, if the district

8
 .        Federal law defines a nursing home as an institution
which:

          (1)    is primarily engaged in providing
                 to residents

          (A)    Skilled nursing care and related
                 services for residents who require
                 medical or nursing care,
          (B)    Rehabilitation services for the
                 rehabilitation of injured,
                 disabled, or sick persons, or
          (C)    On a regular basis, health and
                 related care and services to
                 individuals who because of their
                 mental or physical condition
                 require care or services (above the
                 level of room and board) which can
                 be made available to them only
court's analysis is taken to its logical extreme, no program,

service or institution designed specifically to meet the needs of

the handicapped would ever have to comply with section 504

because every applicant would seek access to the program or

facility because of a handicap, not in spite of it.   This result

would contradict both the statutory and regulatory framework of

section 504.

          The legislative history of section 504 indicates that

Congress clearly contemplated that section 504 would apply to

nursing homes that receive federal funding.   The Senate Committee

Report that introduced the Rehabilitation Act stated, "[T]he bill

further proclaims a policy of nondiscrimination against otherwise

qualified individuals with respect to participation in or access

to any program which is in receipt of federal financial

assistance."    S. Rep. No. 1135, 92 Cong., 2d Sess. 49.   See also

118 Cong. Rec. 32294.   The Report identified examples of the

types of programs that section 504 was designed to cover:

housing, transportation, education and health services.     Since

the primary purpose of the Rehabilitation Act as enacted in 1973

was to extend and expand the 53-year old federal-state vocational

rehabilitation program, Congress initially defined the phrase

"handicapped individual" in terms of employment and


(..continued)
                through institutional facilities .
                . . .

42 U.S.C. § 1396r(a). Thus, individuals without disabilities or
illnesses would not be eligible for admission to a nursing home.
employability.9   However, because it was clearly the intent of

Congress in adopting section 504, which Congress labeled

"nondiscrimination in federal grants", the term "handicapped

individual" was no longer to be narrowly limited to employment.

As the Senate Report accompanying the 1974 amendments to the

Rehabilitation Act elaborated:
                 Technical and Clarifying Changes

          Definition of handicapped individual

               Section 7(6) of the Rehabilitation Act
          of 1973 defines "handicapped individual."
          That definition has proven to be troublesome
          in its application to provisions of the Act
          such as sections 503 and 504 because of its
          orientation toward employment and its
          relation to vocational rehabilitation
          services. It was clearly the intent of the
          Committee and of Congress in adopting section
          503 (affirmative action) and section 504
          (nondiscrimination) that the term
          "handicapped individual" in those sections
          was not to be narrowly limited to employment
          (in the case of section 504), nor to the
          individual's potential benefit from
          vocational rehabilitation services under
          Titles I and III (in the case of both
          sections 503 and 504) of the Act.

                              *   *   *


9
 .        Thus, the Act's original definition of the term
"handicapped individual" included only those whose disability
limited their employability, and those who could be expected to
benefit from vocational rehabilitation. After reviewing the
Department of Health, Education and Welfare's attempts to devise
regulations implementing the Act, Congress concluded that the
definition of "handicapped individual", while appropriate for the
vocational rehabilitation provisions in Titles I and III of the
Act, was too narrow to cover the range of discriminatory
practices in housing, education and health care programs. School
Bd. of Nassau County, Fla. v. Arline, 480 U.S. 273, 278 n.2,
citing S. Rep. No. 93-1297 at 16, 37-38 and 50.
               The Committee substitute adds a new
          definition of "handicapped individual" for
          the purposes of titles IV and V of the Act in
          order to embody this underlying intent.

               Section 504 was enacted to prevent
          discrimination against all handicapped
          individuals, regardless of their need for, or
          ability to benefit from, vocational
          rehabilitation services, in relation to
          Federal assistance in employment, housing,
          transportation, education, health services,
          or any other Federally-aided programs.
          Examples of handicapped individuals who may
          suffer discrimination in the receipt of
          Federally-assisted services but who may have
          been unintentionally excluded from the
          protection of section 504 by the references
          to enhanced employability in section 7(6) are
          as follows: physically or mentally
          handicapped children who may be denied
          admission to Federally-supported school
          systems on the basis of their handicap;
          handicapped persons who may be denied
          admission to Federally-assisted nursing homes
          on the basis of their handicap; those persons
          whose handicap is so severe that employment
          is not feasible but who may be denied the
          benefits of a wide range of Federal programs;
          and those persons whose vocational
          rehabilitation is complete, but who may
          nevertheless be discriminated against in
          certain Federally-assisted activities.


S. Rep. No. 1297, 93d Cong., 2d Sess., reprinted in [1974] U.S.
Code Cong. & Ad. News 6376, 6388-89.   (Emphasis added.)

          We interpret this legislative history as indicating

that Congress contemplated that section 504 would apply to

nursing home admissions decisions.   Thus, we conclude that Mrs.

Wagner was not prevented from seeking the protection of section

504 even though she was motivated to make application to Fair
Acres because of her disability.10   The district court erred, as

a matter of law, in holding to the contrary.



                                B.

          In addition to finding that Mrs. Wagner was not

"otherwise qualified" on the ground that she sought admission to

Fair Acres because of her handicap and not in spite of it, the

district court also found that she was not otherwise qualified

because Fair Acres' decision was a "medical treatment" decision.

Citing Bowen v. American Hosp. Ass'n, 476 U.S. 610 (1986) and

United States v. University Hosp., State University of New York

at Stony Brook, 729 F.2d 144 (2d Cir. 1984), the district court

concluded that "medical treatment decisions are generally immune

from scrutiny under section 504."    We disagree with the district

court's characterization of this case.

          In Bowen and University Hospital, the applicability of

section 504 to the withholding of heroic medical treatment to

profoundly handicapped infants was at issue.   In University

Hospital, the United States sought an order directing University

10
 .        Indeed, the entire regulatory framework of section 504
contemplates the application of section 504 to Mrs. Wagner's
case. Section 504's regulations prohibit discrimination against
the handicapped in "health, welfare and social services programs
that require or benefit from federal financial assistance," 40
C.F.R. § 84.51. Thus, to exclude health care facilities from the
coverage of section 504 would be contrary to the Department of
Health and Human Services' regulations interpreting section 504.
These regulations, to which we must defer, specifically provide
that recipients of federal funding providing "health, welfare and
other social services" are subject to section 504. See CFR §§
84.51 and 84.52.
Hospital to provide the Department of Health & Human Services

with access to the medical records of a handicapped infant whose

parents had refused to consent to corrective surgical procedures

but, rather, had opted for conservative treatment of their

infant's disabilities.   The Court of Appeals for the Second

Circuit held that the "otherwise qualified" criteria of Section

504 cannot be meaningfully applied to such medical treatment

decisions.  The court observed,
          . . . [w]here medical treatment is at issue,
          it is typically the handicap itself that
          gives rise to, or at least contributes to the
          need for services. . . . As a result, the
          phrase cannot be applied in the comparatively
          fluid context of medical treatment decisions
          without distorting its plain meaning. In
          common parlance, one would not ordinarily
          think of a newborn infant suffering from
          multiple birth defects as "otherwise
          qualified" to have corrective surgery
          performed. . . . If Congress intended section
          504 to apply in this manner, it chose strange
          language indeed. . . . The legislative
          history, moreover, indicates that Congress
          never contemplated section 504 would apply to
          treatment decision of this nature.


729 F.2d at 156.

          Similarly, the issue in Bowen was whether the Secretary

of Health and Human Services had authority under the

Rehabilitation Act to regulate medical treatment decisions

concerning handicapped newborn infants.   The Supreme Court,

however, did not reach the issue of whether a medical treatment

decision made on the basis of handicap is immune from scrutiny

under section 504, because the Court held there was no evidence

that the hospitals had denied treatment on the basis of handicap.
Rather, treatment was denied because of the absence of parental

consent.    Accordingly, the Supreme Court concluded, "A hospital's

withholding of treatment from a handicapped infant when no

parental consent has been given cannot violate Section 504, for

without the parent's consent the infant is neither `otherwise

qualified' for treatment nor has he been denied care solely by

reason of his handicap."    476 U.S. at 610.

            Unlike these medical treatment cases involving

handicapped infants which necessitate complex assessments of the

medical needs, benefits and risks of providing invasive medical

care, the issue we confront here concerns the "essential nature"

of the service that Fair Acres provides and involves an

assessment of whether providing the skilled nursing care, which

no one disputes Mrs. Wagner required, would alter the essential

nature of Fair Acres' program or impose an undue burden in light

of its program.   See, e.g., Easley by Easley v. Snider, 36 F.3d

at 305.    A decision of this type, regarding whether an

institution can provide certain services without a modification

of the essential nature of its program or imposition of an undue

burden, involves administrative decision-making and not medical

judgment.    For example, here Fair Acres must determine whether it

is able to provide the requisite staff (i.e., nurses and nurses
aids to care for, i.e., feed, bathe, and occupy Mrs. Wagner) as

well as the appropriate physical accommodations without incurring

extensive cost.    These are decisions that administrators

routinely make.
                               III.

          Applying these legal principles, we now review the

record to determine whether Mrs. Wagner presented legally

sufficient evidence that she was "otherwise qualified" for

admission to Fair Acres.   Exercising plenary review over the

district court's order granting Fair Acres' motion for judgment

as a matter of law, we examine the record to determine whether

the evidence presented was sufficient to permit the jury to find

that Mrs. Wagner was "otherwise qualified."   When reviewing the

jury's finding that Mrs. Wagner was "otherwise qualified" for

admission to Fair Acres, we give to her, as the verdict winner,

the benefit of all logical inferences that could be drawn from

the evidence presented, resolve all conflicts in the evidence in

her favor and, in general, view the record in the light most

favorable to her.   See Williamson v. Consolidated Rail Corp., 926

F.2d at 1348 (3d Cir. 1991).



                                A.

          In support of her assertion that there was a legally

sufficient basis for the jury's determination that she was an

"otherwise qualified individual," Mrs. Wagner points to the

testimony of her three expert witness.   Dr. Gottlieb reviewed

Mrs. Wagner's medical records of her psychiatric hospitalization

at Wills from September 2, 1992 until April 12, 1993.     Based upon

his review of these records, it was his opinion that Mrs.

Wagner's behavior was consistent with a large proportion of

people suffering from Alzheimer's disease.    (A. 43).   Dr.
Gottlieb testified that the largest proportion of people in

nursing home settings have Alzheimer's disease and that Mrs.

Wagner was appropriate or qualified for the services and type of

intermediate care provided by Fair Acres Nursing home.        Based on

a reasonable degree of medical certainty, he believed it

appropriate to transfer Mrs. Wagner back to a nursing home

setting sometime between the end of September and the end of

October of 1992.      (A. 94).

           Dr. Gottlieb also testified regarding the type of

accommodations that Fair Acres would have to make in order to

care for Mrs. Wagner.      (A. 56).   He testified that Mrs. Wagner's

combative assaultive behavior occurred relatively infrequently,

rarely more than once a day, and often it was predictable as to

when this behavior would occur.       (A. 79).   Thus, he concluded

that she would need one-to-one supervision infrequently.       (A.

57).

           Dr. Kim, Mrs. Wagner's treating psychiatrist at Wills

testified that she did not require one-to-one supervision for

extended periods of time and could be redirected easily.        It was

his opinion that about the third week of October, 1992, Mrs.

Wagner could have been managed and accommodated by a nursing

home.11   (A. 124).    Indeed, on October 23, 1992, Dr. Kim had

11
 .        Although Mrs. Wagner's records were evaluated for
purposes of admission to Fair Acres on five different occasions,
counsel for Mrs. Wagner conceded that, "There was no real factual
dispute between the parties in regard to the first two evaluation
dates. The testimony of both Dr. Gottlieb and Dr. Kim supports
Fair Acres' decision on those two dates." Appellants' brief at
p. 17.
written a letter to the administrator of Fair Acres stating that

should Mrs. Wagner experience a deterioration in her mental

status requiring rehospitalization, he would be willing to

readmit her to Wills for further treatment and stabilization.

(A. 126).

            Dr. Etemad, the staff psychiatrist at Easton Nursing

facility, testified that Easton Nursing Home is a regular nursing

home that has patients at different levels of functioning.

Although Dr. Etemad did not review the Wills records, he reviewed

a final summary by a psychiatrist who was sent to Easton Nursing

Home when Mrs. Wagner was transferred.   (A. 173).   Dr. Etemad

evaluated Mrs. Wagner on April 14, two days after her admission

to Easton and again around May 18, 1992.   He testified that he

saw her one time after that, and then there were no more requests

by the staff for him to see her.   During the five months

preceding trial that Mrs. Wagner spent at Easton, Dr. Etemad

informed the court that it was not necessary for her to be

referred to an inpatient psychiatric hospital and that Easton was

able to accommodate her and meet her needs.   (A. 167).   In his

judgment, she is most appropriately classified as a nursing home

patient.

            Fair Acres' defense consisted of Mrs. Wagner's medical

records and progress notes from her hospitalization at Wills, and

the testimony of various members of Fair Acres' admissions

committee who evaluated Mrs. Wagner's application for admission.

R.N. Mimi Huver-Delaney, the Admissions Director at Fair Acres

since 1982, testified that up to February 19, 1993, Fair Acres
would not have been staffed to handle the kind of treatment that

Mrs. Wagner required.    (A. 236).   Admissions case worker Amy

Thomas testified that Mrs. Wagner was not admitted to Fair Acres

because they could not meet her needs.

           Dr. Satyendra K. Diwan testified that, as a consultant

to Fair Acres since 1981, he did not examine Mrs. Wagner

personally but instead reviewed Mrs. Wagner's records with

respect to her admission at Fair Acres.       He is not board

certified in either psychiatry or geriatric psychology.         (A.

258).   Dr. Diwan testified that he does not rely on any written

criteria in order to evaluate whether someone is appropriate for

admission.    His own personal criterion is that the patient be

symptom-free of agitation for a 3-4 week period.       (A. 278-280).12

             Dr. Diwan testified that Mrs. Wagner was inappropriate

for care at Fair Acres the five times he reviewed her, mainly

because of her dangerousness towards herself and others.         (A.

259).   He was not aware that, prior to her last review, she was

not ambulating as her physical condition had weakened, nor was he

aware of the fact that she was spending approximately 80% of her

day confined in a geri-chair.     (A. 275).
12
 .        The reasonableness of this requirement for admission
was called into question by Mrs. Wagner's experts. Dr. Kim
testified that, by and large, a three week period without any
symptoms of agitation is uncommon in many Alzheimer's patients
and that it would be fairly common that a patient would exhibit
some form of agitation on a daily basis. (A. 125). Dr. Etemad
testified that it was not reasonable medical practice to look for
symptom free behavior, i.e., no agitation for a 3-week period, as
a precondition of admission to a nursing home. In his practice,
he has never seen a patient who was totally asymptomatic before
transfer to a nursing home. (A. 178).
           Linda Hadfield, admissions coordinator at Fair Acres,

testified that she visits almost every patient before admission

to Fair Acres.   (A. 298).   She visited Mrs. Wagner on October 23,

immediately prior to the third review.   (A. 300).    She discussed

the techniques employed by Wills to calm Mrs. Wagner:      they would

put her in a quiet room, massage her feet, play soft music for

her -- techniques Fair Acres would not provide.      (A. 301).   On

October 29th, the third meeting, Fair Acres put Mrs. Wagner on

"for hold" status.   (A. 302).   Hadfield visited Wills again on

December 30, between the third and fourth evaluation of Mrs.

Wagner's application for admission.    She observed that Wills was

still using the quiet room and inapsine to calm Mrs. Wagner.          (A.

304).   She testified that the nurse's notes did not always

reflect what the psychiatric doctor wrote.    (A. 304).



                                 B.

           Based upon its review of this evidence, the district

court held that there was no legally sufficient basis for the

jury's determination that Margaret Wagner was an "otherwise

qualified" individual for purposes of section 504,13 because the

13
 .        The third requirement for proving a case under section
504 is that the discrimination be "solely by reason of handicap."
29 U.S.C. § 794. Although the parties agreed that this
requirement was not an issue in this case, the district court
appears to have conflated the issue of Mrs. Wagner's
qualifications for admission with the issue of whether she was
denied access to Fair Acres "solely by reason of handicap," a
separate inquiry in the 504 analysis, not at issue in this case.
The district court, citing Johnson by Johnson v. Thompson, 971
F.2d 1487 (10th Cir. 1992), observed:
court found that she did not meet Fair Acres' requirements for

admission.   The district court opined, "It was not the function

of Fair Acres to provide psychiatric services for persons with

disruptive psychotic disorders."     Further, the court opined, "Nor

is it a case of Fair Acres making a reasonable accommodation."

859 F. Supp. at 783.   The district court's conclusions, in these

regards, are erroneous.   Because the district court arrived at

these conclusions based upon the application of incorrect legal

precepts, our review is plenary .    Griffiths v. CIGNA Corp., 988

F.2d 457, 462 (3d Cir.), cert. denied, 114 S. Ct. 186 (1993).



                               IV.

          The inquiry into whether an applicant is otherwise

qualified necessarily involves a determination of whether the

(..continued)
          Section 504, by its very terms, does not
          cover discrimination among similarly
          handicapped persons. The word solely
          provides the key: the discrimination must
          result from the handicap alone. If others
          with the same handicap do not suffer the
          discrimination, then the discrimination does
          not result `solely by reason of [the]
          handicap.'

589 F. Supp. at 782 (citations omitted).

          Here there was no dispute that Fair Acres accepted
patients with Alzheimer's disease, but that Mrs. Wagner's
aggressive behavior distinguished her and set her apart from the
other residents of Fair Acres. Mrs. Wagner's complaint alleged
that Fair Acres refused to accept her as a patient "solely by
reason of her handicap (specifically, the resultant aggressive
behavior when agitated)." Complaint ¶ 24, JA 13. Fair Acres
never disputed that Mrs. Wagner was rejected due to the
behavioral aspects of her disease.
applicant could have gained access to the program if the

recipient of funds had made reasonable accommodations.    Alexander

v. Choate, 469 U.S. 287, 301 (1985).   In the unanimous decision

in Alexander, the Supreme Court stated:
          Davis . . . struck a balance between the
          statutory rights of the handicapped to be
          integrated into society and the legitimate
          interests of federal grantees in preserving
          the integrity of their programs: while a
          grantee need not be required to make
          "fundamental" or "substantial" modifications
          to accommodate the handicapped, it may be
          required to make "reasonable" ones.

          The balance struck in Davis requires that an
          otherwise qualified individual must be
          provided with meaningful access to the
          benefit that the grantee offers. The benefit
          itself, of course, cannot be defined in a way
          that effectively denies otherwise qualified
          individuals the meaningful access to which
          they are entitled; to assure meaningful
          access, reasonable accommodations in the
          grantee's program or benefit may have to be
          made.


Alexander, 469 U.S. at 300 (citation and footnotes omitted).

          As the Court of Appeals for the Fifth Circuit observed

in Brennan v. Stewart, 834 F.2d 1248 (5th Cir. 1988), "After

Alexander, it is clear that the phrase `otherwise qualified' has

a paradoxical quality; on the one hand, it refers to a person who

has the abilities or characteristics sought by the grantee; but

on the other, it cannot refer only to those already capable of

meeting all the requirements -- or else no reasonable requirement

could ever violate section 504, no matter how easy it would be to

accommodate handicapped individuals who cannot fulfill it."    834

F.2d 1248 (5th Cir. 1988).   We agree with the Court of Appeals
for the Fifth Circuit:   "The question after Alexander is the

rather mushy one of whether some `reasonable accommodation' is

available to satisfy the legitimate interests of both the grantee

and the handicapped person."   834 F.2d at 1262.

          In light of Alexander and our decision in Strathie, we

are required to review the record to determine additionally if

there was a factual basis in the record demonstrating that Fair

Acres' refusal to accommodate Mrs. Wagner was unreasonable.     See

Strathie, 716 F.2d at 230 (a section 504 claim could be defeated

"if there is a factual basis in the record reasonably

demonstrating that accommodating the individual would require

either a modification of the essential nature of the program or

impose an undue burden on the recipient of federal funds").     See

also School Bd. of Nassau County, Fla. v. Arline, 480 U.S. 273

(1987) (determinations regarding whether plaintiffs are

"otherwise qualified" will generally require an individualized

inquiry and appropriate findings of fact).

          Here there was ample evidence that Mrs. Wagner's

aggressive behaviors associated with her Alzheimer's disease

clearly rendered her, as amicus curiae characterizes her, "a

challenging and demanding patient."   We find that this fact alone

cannot justify her exclusion from a nursing home that receives

federal funds.   Otherwise nursing homes would be free to "pick

and choose" among patients, accepting and admitting only the
easiest patients to care for, leaving the more challenging and

demanding patients with no place to turn for care.14

          Indeed, the evidence introduced at trial confirmed that

Mrs. Wagner was a difficult patient, one for whom the ravages of

Alzheimer's disease were manifested in a myriad of extremely

unpleasant ways -- by mood swings, periods of combativeness, and

outbursts of shouting.   However, as Mrs. Wagner's expert witness,

Dr. Gottlieb, pointed out, "the fact that she had agitated

behavior does not contradict that she could be managed in a

nursing home."   (A. 83-84).

          Our review of the record reveals that Fair Acres

presented little or no evidence about the type of accommodations

it would have needed to make in order to provide care for Mrs.


14
 .        Dr. Gottlieb testified at trial that currently
approximately four million Americans have been diagnosed with
Alzheimer's disease and it is estimated that this disease affects
11 percent of all Americans who are over the age of 65.
Moreover, the number of Americans afflicted with Alzheimer's
disease is expected to increase with the size of the burgeoning
elderly population. (A. 36). Consequently, many people who
suffer from Alzheimer's will be forced to seek nursing home
placement. Because Mrs. Wagner's plight is typical of a growing
number of others, the issue of whether Fair Acres was required,
in keeping with section 504, to make reasonable accommodations to
care for Mrs. Wagner should have been, but was not, addressed.

          The Alzheimer's Disease and Related Disorders
Association of Greater Philadelphia points out in its amicus
brief that "Contrary to the commonly held belief that nursing
homes are `genteel rest homes for elderly people, the prevalence
of psychiatric behavioral disorders in nursing homes has been
estimated to range from 68 to 94 percent,'" citing Grossberg,
Psychiatric Problems in the Nursing Home, 38 J. of the American
Geriatrics Sec. 907 (1990). A recent study of a community
nursing home suggests that 16 percent of the residents had at
least one behavioral problem. Id.
Wagner.   While Fair Acres made general allegations that it could

not adequately care for Mrs. Wagner or meet her needs due to her

aggressive behavior, it failed to offer any factual basis

demonstrating that the admission of Mrs. Wagner to Fair Acres

would have changed the essential nature of the facility as a

nursing home or imposed an undue burden on the facility,

economically or otherwise.

           Larry Rendin, the medical director at Fair Acres for

the past fifteen years, testified that of the 900 patients at his

facility, some 64 to 70% are afflicted with Alzheimer's or

dementia-related disease, that is, organic brain syndrome of one

type or another.15   Mr. Rendin agreed that some of the

characteristics of the Alzheimer's patients at Fair Acres
15
 .        The fact that Fair Acres admits some patients suffering
from certain forms of Alzheimer's has no impact on Mrs. Wagner's
504 claim. While section 504 does not apply to programs choosing
among similarly handicapped people, an action under section 504
exists if a program is found to discriminate between distinct
classes of handicapped persons. For instance, a program barring
all severely retarded persons from a program available to mildly
retarded persons may be discriminatory. See, e.g., Clark v.
Cohen, 613 F. Supp. at 693 (holding that the claim of a denial of
access to a program based on the relative aspects of a handicap
[e.g., mildly retarded as opposed to severely retarded] qualifies
under section 504); Jackson by Jackson v. Fort Stanton Hospital
and Training School, 757 F. Supp. 1243 (D.N.M.), rev'd in part on
other grounds, 964 F.2d 980 (10th Cir. 1992) (holding the failure
of programs for the developmentally disabled to accommodate the
severely handicapped in existing community programs while serving
less severely handicapped persons is unreasonable and
discriminatory because the severity of plaintiff's handicaps is
itself a handicap which, under section 504, cannot be the sole
reason for denying access to community programs); Plummer by
Plummer v. Branstad, 731 F.2d 574, 578 (8th Cir. 1984) (the
severity of the plaintiffs' handicaps is itself a handicap which
under section 504 of the 1973 Rehabilitation Act cannot be the
sole reason for denying them Title XX funding).
included screaming, yelling, confusion, agitation, combativeness

and aggression on occasion and that "Fair Acres takes care of

them and the staff is equipped to deal with that."    (A. 95).    He

agreed that some patients require one-to-one care for certain

periods of time, and many times Fair Acres has two or three staff

members providing care to one patient.    His facility is equipped

to provide that level of care.    (A. 97).   Rendin also testified

that between 20-25 times a year it is necessary to transfer a

patient from Fair Acres to an in-patient psychiatric facility.

(A. 98).   Most are returned to Fair Acres after a few weeks and

Fair Acres is then able to accommodate their needs.    (A. 99).

Thus the record reveals Fair Acres is clearly capable of

providing and, in fact, has provided the kinds of services that

Mrs. Wagner required, although she may have needed them on a more

frequent basis.

           Linda Hadfield, Fair Acres' admissions coordinator,

discussed the techniques employed by Wills to calm Mrs. Wagner

during her disturbances.    These techniques included putting Mrs.

Wagner in a "quiet room,"16 massaging her feet, talking to her

and playing soft music.    Although Ms. Hadfield testified that

Fair Acres did not provide these services, there was no evidence

that these were calming techniques that Fair Acres could not

provide, or that to do so would change the essential nature of

Fair Acres as a nursing home into an acute psychiatric facility

or impose an undue burden on Fair Acres.
16
 .        A "quiet room" is an ordinary patient room that simply
has one bed. (A. 154).
          Ms. Hadfield opined that Mrs. Wagner was also not

suitable for admission to Fair Acres because she had been

receiving injections of Inapsine at Wills, a drug that Fair Acres

had not previously administered.   Dr. Kim testified that he

prescribed Inapsine for Mrs. Wagner while she was at Wills

because Inapsine is a neuroleptic, or tranquilizing agent, which

is very short acting and is available in vials and ampoules.     It

is administered by intramuscular injection.   Notwithstanding the

fact that Inapsine had not been administered at Fair Acres

before, Dr. Gottlieb testified that Inapsine could be

administered in a nursing home setting and that roughly 25

percent of the people in nursing homes receive supertrophic,

sedating drugs on a daily basis.   Dr. Gottlieb's testimony was

further supported by Larry Rendin when he testified that many of

the patients at Fair Acres are administered Haldol.   (A. 107).

Thus, based on this evidence, a jury could reasonably conclude

that the accommodations Fair Acres would need to make to care for

Mrs. Wagner were not unreasonable.

          Fair Acres also contended that accommodating Mrs.

Wagner would have created a health and safety risk to the staff

and patients at Fair Acres.   (A. 389).   Dr. Diwan testified that

"each time I concluded that she is not appropriate because mainly

of her dangerousness towards others and herself."   (A. 260).    Our

review reveals that Dr. Diwan's testimony was contradicted by the

testimony of Mrs. Wagner's treating physician at Wills, Dr. Kim.

Dr. Kim testified that he did not view Mrs. Wagner as creating a

health or safety risk.   With respect to the references in her
chart that she was combative and assaultive, Dr. Kim testified

that, "[W]e describe being combative or assaultive as any

behavior that is resistive or aggressive. . . .      But this is all

[done by] someone who is essentially bedridden and can barely

[sic] walk and is more or less slapping out like a child."        (A.

129).   Dr. Kim also testified on cross-examination that at the

time of Mrs. Wagner's final evaluation in early February, she was

spending 60-80% of her waking hours in a geri-chair, and that she

needed 80% support by staff to remain upright.      (A. 155).    Thus,

there was sufficient evidence presented from which a reasonable

jury could conclude that Mrs. Wagner, at least by February, posed

little threat to anyone's health or safety due to her extremely

weakened physical condition.

          Finally, by the later dates on which Mrs. Wagner was

denied admission to Fair Acres, the jury could infer from the

evidence that Mrs. Wagner would not have needed a quiet room or

much of anything in the way of reasonable accommodation.        For

example, Dr. Kim testified that, "We noted that progressively she

became more and more physically handicapped.      She needed

increasing assistance to walk, she needed to be spoon-fed, by the

end of her stay, she became incontinent, needed to be in a

diaper, and spent most of her days sitting in a chair staring off

into space, occasionally making semi-coherent expressions,

sometimes crying.   But for the most part staring blankly off into

space for a majority of that time."   (A. 128).

          Based on our review of the evidence, we find that a

jury could have determined that at some point during the period
from September 1992 to February 1993, Mrs. Wagner was "otherwise

qualified" for admission to Fair Acres in accordance with section

504 because Fair Acres could have cared for her if it made

reasonable accommodations.   Thus, we must reverse the district

court's order granting summary judgment as a matter of law.



                                V.

          Concurrent with its motion for judgment as a matter of

law, Fair Acres moved in the alternative for a new trial.     The

district court conditionally granted Fair Acres' motion for a new

trial on the grounds that:   (1) it was prejudicial error to fail

to instruct the jury that administrators of Fair Acres were

entitled to "some measure of deference," and (2) the verdict was

against the great weight of the evidence.

          The authority to grant a new trial resides in the

exercise of sound discretion by the trial court, and will only be

disturbed if the court abused that discretion.   Allied Chemical

Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980); American Bearing

Co. v. Litton Industries, Inc., 729 F.2d 943, 948 (3d Cir.),

cert. denied, 469 U.S. 854 (1984).   We are cognizant that a new

trial may be granted even when judgment as a matter of law is

inappropriate.   Roebuck v. Drexel University, 852 F.2d 715, 735

(3d Cir. 1988); American Bearing Co., 729 F.2d at 948 n.11.    See

also Rousseau v. Teledyne Movible Offshore, Inc., 812 F.2d 971,

972 (5th Cir.) (affirming grant of new trial even though there

was "legally sufficient evidence to support the verdict, thus

foreclosing a j.n.o.v."), cert. denied, 484 U.S. 827 (1987).
With these principles in mind, we review the district court's

conditional grant of Fair Acres' alternative motion for a new

trial.

                               A.

          At the close of all the evidence, Fair Acres submitted

the following instruction for inclusion in the court's points for

charge:
          Administrators from Fair Acres Geriatric
          Center are entitled to some measure of
          judicial deference in this matter, by reason
          of their experience with and knowledge of the
          administrative procedures in question.


Defendants' proposed points of charge No. 6.   Counsel for Mrs.

Wagner objected to this point for charge because counsel did not

believe the charge to be a correct statement of the law.   The

district court sustained Mrs. Wagner's objection and decided not

to include this point in its charge to the jury.   (A. 328).17    In

ruling on the motion for a new trial, the district court found

its refusal to give this charged constituted prejudicial error.

We disagree.

          We addressed the issue of the deference to be given the

judgment of program administrators in cases arising under section

17
 .        Mrs. Wagner points out that Fair Acres failed to
preserve this as an issue, because Fair Acres did not object to
the court's refusal to include the proposed instructions, either
at the discussion of the points for charge on the record or after
the charges to the jury. (See N.T. 9/2/93 at p. 15, and J.A.
389.) However, where an error in the instruction to the jury is
fundamental or may cause a miscarriage of justice, the court's
error in instructing the jury may be the basis for granting a new
trial, even if no proposed objection was raised. Morley v.
Branca, 456 F.2d 1252 (3d Cir. 1992).
504 in our decision in Strathie v. Dept. of Transp., 716 F.2d 227

(3d Cir. 1983).   There we rejected the notion that broad judicial

deference was required, and instead we observed,
          Notably absent from the Supreme Court's
          opinion in Davis, however, is any discussion
          of the scope of judicial review with regard
          to the reasonableness of a refusal to
          accommodate a handicapped individual.
          Program administrators surely are entitled to
          some measure of judicial deference in this
          matter, by reason of their experience in
          question. On the other hand, broad judicial
          deference resembling that associated with the
          "rational basis" test would substantially
          undermine Congress' intent in enacting
          section 504 that stereotypes or
          generalizations not deny handicapped
          individuals access to federally-funded
          programs.


716 F.2d at 231 (citations omitted)(emphasis added).   We then

held that "the following standard effectively reconciles these

competing considerations:   a handicapped individual who cannot

meet all of a program's requirements is not otherwise qualified

if there is a factual basis in the record reasonably

demonstrating that accommodating that individual would require

either a modification of the essential nature of the program, or

impose an undue burden on the recipient of federal funds."     716

F.2d at 231.   We observed that the Court of Appeals for the

Second Circuit has also applied this "factual basis" standard,

although it did not designate it as such.   See New York State
Ass'n for Retarded Children, Inc. v. Carey, 612 F.2d 644, 650 (2d

Cir. 1979) (section 504 prevented a city board of education from

excluding from its regular classrooms mentally retarded children
who were thought to be carriers of hepatitis, when the board was

unable to demonstrate that the health hazard posed by the

children was anything more than a remote possibility).18

          In the present case, there was no factual basis

demonstrating that accommodating Mrs. Wagner would require Fair

Acres to modify the essential nature of its program, or impose an

undue burden upon it.     In the absence of such a factual basis,

Fair Acres' request that the jury be instructed that Fair Acres

administrators be accorded "some" deference cannot be justified.

Accordingly, the district court's failure to give an instruction

that Fair Acres administrators were entitled to some measure of

deference by reason of their experience with and knowledge of the

procedures in question, was not legal error.     Clearly it would

not then rise to the level of fundamental error.

          Here the district court's instructions to the jury in

this regard struck the appropriate balance between deference to

program administrators and the anti-discrimination mandate of

section 504.     The district court informed the jury that while

Fair Acres was required to make reasonable accommodations, it was

not required to make fundamental or substantial modifications to

its program.19    Additionally, the district court instructed the

18
 .        See also School Bd. of Nassau County v. Arline, 480
U.S. 273 (1987), where the Supreme Court held that courts should
give deference to the medical judgments of independent public
health officials on the issue of the contagiousness of infectious
diseases but left open the question of whether courts should also
defer to the reasonable medical judgments of private physicians
upon which an employer has reasonably relied. Id. at 288, n.18.

19
 .        The district court charged:
jury that it must consider the views and evaluation process of

Fair Acres.     The court instructed the jury that it "must take
(..continued)

               Now, the law also requires, however,
          that a nursing home facility such as Fair
          Acres make reasonable accommodations to the
          known physical and mental limitations of an
          otherwise-qualified handicapped person. But
          they are not required to make fundamental or
          substantial modifications to their program.
          In other words, they are not required to
          become something other than what they purport
          to be; that is, a skilled long-term nursing
          home with certain admission criteria which
          they believe they are entitled to use and
          determine who should be admitted and who
          should not be admitted.

               The accommodation that the law requires
          them to make must be reasonable; it can't be
          unreasonable. This is just an analogy, it
          may not be applicable in this case, but they
          cannot make a nursing home -- turn it into a
          burn center or a psychiatric institution or
          something like that, because that would
          require substantial or fundamental
          modification of the program which they have
          in existence.

                But on the other hand, if their program
          would accommodate Mrs. Wagner with only
          inconsequential or nonsubstantial changes,
          then under the law they are required to do
          that.

               So that if you find that a fundamental
          or substantial modification is necessary in
          order to accommodate the plaintiff, the
          Rehabilitation Act does not apply.

               On the other hand, if they can
          accommodate her with reasonable changes in
          their program, then of course the Act does
          apply.

(A. 386-87).
into account the evaluation made by the institution itself in the

absence of a showing that its standards and its application of

those standards serves no purpose other than to deny access to

handicapped persons."    (A. 385).



                                 B.

          Finally, the district court conditionally granted Fair

Acres' motion for a new trial on the grounds that the verdict was

against the great weight of the evidence.    The district court

found "the evidence, as demonstrated by the Wills records,

incontrovertibly and overwhelmingly showed that at the time Fair

Acres made the decision that Mrs. Wagner was not appropriate for

placement in its nursing home she was suffering from the same

psychotic symptoms that caused her transfer from the Dowden

Nursing Home to Wills Psychiatric Hospital."    Under these

circumstances, "a final determination that Fair Acres violated

section 504 of the Rehabilitation Act would result in a

miscarriage of justice."    859 F. Supp. at 785.

          The authority to grant a new trial, as previously

stated, is confined to the trial court.     Thus, our review is

extremely deferential.    We have held that "[s]uch deference is

peculiarly appropriate in reviewing a ruling that a verdict is

against the weight of the evidence because the district court was

able to observe the witnesses and follow the trial in a way that

we cannot replicate by reviewing a cold record."    Roebuck, supra,

852 F.2d at 735.
           We have reviewed the record for evidence that is

legally sufficient to support the jury's verdict.   We find that

Mrs. Wagner presented sufficient evidence to preclude the

district court's granting judgment against her as a matter of

law.   Given, however, the district court's application of

incorrect legal standards regarding the applicability of section

504 to the facts in this case, we are uncertain as to whether the

court would have granted a new trial under the appropriate legal

standards.   Consequently, we will vacate the court's order

granting a new trial and remand to the district court for

reconsideration of this motion.



                               VI.

           For the foregoing reasons we will vacate the district

court's order granting judgment as a matter of law and vacate the

district court's order conditionally granting a new trial.    We

will remand for further proceedings consistent with our decision.

Costs are taxed against appellee.




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