Nonprofit Sues Local Government for Interfering with Contract with Feds

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July 22, 2016; New Orleans Advocate

NPQ has lately been writing about the sometimes-tangled relationships between nonprofits and local governments when the governments have provided resources like space at reduced rent. Among other things, the boundary issues that arise can have profound effects.

The New Orleans Advocate reports that a federal judge is set to rule on letting a nonprofit healthcare provider, suing over its eviction from two government-owned buildings in Jefferson Parish, remain until the case is resolved. Jefferson Parish is located just south of New Orleans.

During a five-hour hearing, the Jefferson Community Health Care Centers (JHCCC) argued that the Jefferson Parish Council voted in May to oust the group from its buildings “only because the group’s leaders repeatedly refused to be influenced by [one of the parish councilmembers].”

The buildings are in that councilmember’s district. The JCHCC provides low-cost or free healthcare to indigent patients.

JCHCC’s attorneys urged the judge to issue a preliminary injunction blocking the clinics’ eviction until the case can be tried on the merits; the judge has jurisdiction, they say, because federal dollars are involved. Continued access to the facilities would allow the nonprofit to satisfy the conditions of its grants from the U.S. government.

In response, an attorney for Jefferson Parish said the contracts allowing JCHCC to operate out of the buildings rent-free were terminated based on agreements it had signed when it became a tenant—and that those agreements allowed the contracts to be canceled on short notice. JCHCC has other facilities from which it could offer health services to the public, but the group says it is having trouble securing a parish permit to occupy one of them, and the other contains its administrative offices.

The judge said that she wasn’t sure she had jurisdiction to intervene in a local government matter, but that the parish government’s decision to oust JCHCC “made no sense to her.” The Advocate reports that the parish is seeking another group to run the two facilities but has not yet secured a contractor, meaning that there will be a reduction in services to the public until they find one.

JCHCC’s CEO testified that her group’s problems began after she refused to hire an attorney recommended by the local councilmember, in addition to other disputes involving his political allies and an ongoing feud between the two.—Larry Kaplan