Ursula Newell-Davis & Sivad Home and Community Services, LLC v. Courtney N. Phillips, et al.

New Orleans social worker challenges Louisiana law that stopped her from helping special needs children and their families

Cases > Economic Liberty > Ursula Newell-Davis & Sivad Home and Community Services, LLC v. Courtney N. Phillips, et al.
Federal lawsuit filed to challenge Louisiana’s anticompetitive Facility Need Review law

Ursula Newell-Davis cares deeply for those most in need in her New Orleans community. After two decades of working with special needs children, she decided to launch a company that would provide much-needed respite services to this vulnerable population. Inspired by her experience as a special needs parent herself, Ursula wants to give these children hope that they can live productive, meaningful, and independent lives. But the state’s Facility Need Review process stopped her. Because many students lack access to their schools’ resources as a result of pandemic-induced school closures, Ursula’s business is needed now more than ever. The government has no business denying her the opportunity to help, so Ursula is fighting back. 

After earning her bachelor’s and master’s degrees in social work, Ursula Newell-Davis has devoted her entire career to helping her New Orleans community. As a hospice social worker, she provided end-of-life support to patients and their families. Then she spent several years managing a behavioral health center that provides outpatient mental health services. 

In 2018, Ursula started a consulting business to advise mental health agencies, schools, churches, and others who work with special needs populations. Through her work, she often encounters children who have poorer backgrounds or who are from homes where parents and caregivers often work odd hours or night shifts, which means that many of these children find themselves at home alone. Between the lack of supervision and their disabilities, some children struggle to complete such basic tasks as doing homework, preparing meals, or even bathing. Ursula is particularly concerned that unsupervised teenagers with behavioral problems may fall in with the wrong crowd and turn to criminal activity. 

Believing that she could make a difference in her community, she decided to open a business to provide respite services to families with special needs children—that is, services teaching children basic life skills to help them thrive and stay off the streets while their parents are away. 

Louisiana requires providers to first apply for Facility Need Review approval, which means that the applicant must prove that the proposed services are “necessary. Despite evidence showing an increase in crimes by juveniles, pleas by city officials for more early intervention efforts for juveniles, and studies showing that respite care can improve outcomes for both children and their familiesincluding lower incidence of negative behavior in the communitystate health officials denied Ursula’s FNR application and prohibited her from starting her business. In fact, she received the same denial form letter as 86 other applicants who had also hoped to launch such services in 2019 and 2020. 

Studies show that laws like FNR regulations do not protect health or safety; rather, they artificially reduce supply of critically necessary services, drive up costs, and worsen outcomes—all to protect existing businesses from competition. 

The Constitution protects the right to earn a living free of irrational and arbitrary government restrictions. The state cannot simply deny some people economic opportunity in order to insulate incumbent businesses from new competitors like Ursula. 

In this federal lawsuit, Ursula is standing up to government and advocating for children in her community who need her help. PLF, with assistance from the Pelican Institute, represents her free of charge. A win would vindicate her constitutional right to earn a living and create opportunities for others to join her in helping families in need. 

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What’s at stake?

  • Louisiana’s FNR law—a variant of the Competitor’s Veto law found in 36 states—prevents well-meaning entrepreneurs like Ursula from providing much-needed medical and social services to vulnerable populations.
  • The government shouldn’t be in the business of picking winners and losers. Protecting industry insiders stops entrepreneurs from pursuing their vocation and reduces access for underserved customers.

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January 12, 2021

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