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Lecture for Investiture as Robert F. Wagner Professor of Labor and Employment Law

Posted on: April 27th, 2017 by Art Leonard No Comments

Arthur S. Leonard, Lecture for Investiture as Robert F. Wagner Professor of Labor and Employment Law, New York Law School, April 26, 2017

A Battle Over Statutory Interpretation: Title VII and Claims of Sexual Orientation and Gender Identity Discrimination

I feel particularly honored to have my name associated with that of United States Senator Robert F. Wagner, Sr., NYLS Class of 1900, a hero of the New Deal whose legislative leadership gave us such important achievements as the National Labor Relations Act – commonly known among labor law practitioners as the Wagner Act – and the Social Security Act — laws that have shaped our nation for generations.   Senator Wagner was an immigrant who made an indelible mark on the United States. I hope that in some small way I have made a contribution that makes this named chair fitting.

I decided to select a topic for this talk that would bring together the two major areas of my teaching and scholarship: labor and employment law, and sexuality law. These intersect in the question whether Title VII of the Civil Rights Act of 1964, which bans employment discrimination against an individual because of his or her sex, will be open to claims by job applicants and workers that they have suffered discrimination because of their sexual orientation or gender identity. We are at a decisive point in the judicial battle over that question, having achieved just weeks ago the breakthrough of our first affirmative appellate ruling on the sexual orientation question, following several years of encouraging developments on the gender identity question.

To understand the significance of this, we have to go back more than half a century, to the period after World War II when the modern American gay rights movement began stirring with the protests of recent military veterans against unequal benefits treatment, with the formation of pioneering organizations like the Mattachine Society in Los Angeles and New York and The Daughters of Bilitis in San Francisco, and with the vital behind-the-scenes work undertaken by gay scholars as the great law reform effort of the Model Penal Code was being launched by the American Law Institute. That postwar period of the late 1940s and 1950s played out alongside the rise of the Civil Rights Movement, for which the passage of the Civil Rights Act of 1964 was a signal achievement.

The early gay rights advocacy groups had their lists of goals, and some kind of protection against discrimination was prominent among them, but that task seemed monumental, at a time when there was no federal statute prohibiting employment discrimination of any kind. Until Illinois adopted the Model Penal Code in 1960, which effectively repealed criminal sanctions for private consensual gay sex, it was a crime in every state; a serious felony with long prison sentences in many. President Dwight Eisenhower issued an executive order shortly after taking office banning the employment of “homosexuals” and “sexual perverts” in the federal civil service. A major immigration law passed during the 1950s for the first time barred homosexuals from immigrating to the U.S. and qualifying for citizenship by labeling us as being “afflicted by psychopathic personality,” making us excludable on medical grounds. The military barred gay people from serving on similar grounds, and many lines of work that required state licensing and determinations of moral fitness systematically excluded LGBT people. To be an ‘openly gay’ lawyer or doctor was virtually unthinkable in the 1950s and on into the 1960s.

When Congress was considering the landmark civil rights bill, first introduced during the Kennedy Administration and shepherded into law by Lyndon Johnson, the idea that lesbians, gay men, bisexuals and transgender people might seek or obtain assistance rather than condemnation from Congress seemed a pipe dream. None of the legislators involved with the bill proposed protecting members of these groups from discrimination. Title VII, the provision of the bill dealing with employment discrimination, was limited in its original form to discrimination because of race or color, religion, or national origin. A floor amendment, introduced by Howard Smith of Virginia, a conservative Southern Democrat who was opposed to the bill, proposed to add “sex” to the prohibited grounds for discrimination. The amendment carried, the bill passed, and it went to the Senate where it was held up by one of the longest filibusters in history – at a time when filibusters involved unbroken floor debate by the opponents of a pending measure, with no vote on the merits until the Chamber was thoroughly exhausted and no opponent could be found to continue speaking. The leadership of the Senate, trying to avoid having the bill bottled up in committees headed by conservative senior Southern senators, had sent the bill direct to the floor with a tight limit on amendments. Thus committee reports that would have provided a source of legislative history on the meaning of “sex” in the bill are missing. The only floor amendment relating to the addition of “sex” to Title VII was to clarify that pay practices that were authorized under the Equal Pay Act, which had been passed the year before, would not be held to violate Title VII. The statute contained no definition of “sex,” and in the early years after its passage, the general view, held by the courts and the Equal Employment Opportunity Commission, was that the ban on sex discrimination simply prohibited employers from treating women worse than men – with little agreement about what that meant. In fact, in an early interpretive foray, the Supreme Court decided that Title VII did not prohibit discrimination against women because they became pregnant. The resulting public outcry inspired Congress to amend the statute to make clear that discrimination against a woman because of pregnancy or childbirth was considered to be discrimination because of sex.

Early attempts by gay or transgender people to pursue discrimination claims under Title VII all failed. The EEOC and the courts agreed that protecting people from discrimination because of their sexual orientation or transgender status was not intended by Congress. They embraced a literalistic “plain language” interpretation of Title VII, including a narrow biological understanding of sex.

But something began to happen as the courts considered a wider variety of sex discrimination claims. It became clear that a simplistic concept of sex would not be adequate to achieve the goal of equality of opportunity in the workplace. Legal theorists had been advancing the concept of a “hostile environment” as a form of discrimination, first focusing on the open hostility that many white workers showed to black, Latino and Asian workers in newly-integrated workplaces. During the 1970s the courts began to expand that concept to women who experienced hostility in formerly all-male workplaces as well. Lower federal courts were divided about whether such “atmospherics” of the workplace could be considered terms or conditions of employment when they didn’t directly involve refusals to hire or differences in pay or work assignments. Finally the Supreme Court broke that deadlock in 1986, holding in Meritor Savings Bank v. Vinson that a woman who experienced workplace hostility so severe that it could be said to affect her terms and conditions of employment would have a sex discrimination claim under Title VII, and subsequent cases clarified that the plaintiff did not have to show a tangible injury, although a finding that working conditions were so intolerable that a reasonable person would quit would clearly meet the test of a hostile environment. Some courts began to extend this reasoning to complaints by men, in situations where male co-workers subjected them to verbal and even physical harassment.

The Court also began to grapple with the problem of sex stereotypes, and how easily employers and co-workers could fall into stereotyped thinking to the disadvantage of minorities and women. Stereotypes about young mothers’ ability to balance work and home obligations, stereotypes about the ability of women to do physically challenging working, stereotypes about female longevity and the costs of retirement plans – all of these issues came before the Court and ultimately led it to expand the concept of sex discrimination more broadly than legislators of the mid-1960s might have imagined.

The key stereotyping case for building a theory of protection for sexual minorities was decided in 1989 – Price Waterhouse v. Hopkins. Ann Hopkins’ bid for partnership was denied because some partners of the firm considered her inadequately feminine. They embraced a stereotype about how a woman partner was supposed to look and behave. Hopkins, with her loud and abrasive manner and appearance, failed to conform to that stereotype. Communicating the firm’s decision to pass over her partnership application, the head of her office told her she could improve her chances for the next round by dressing more femininely, walking more femininely, toning down her speech, wearing make-up and jewelry, having her hair styled. Her substantial contributions to the firm and her leadership in generating new business counted for little, when decision-makers decided she was inadequately feminine to meet their expectations. In an opinion by Justice William J. Brennan, Jr., the Court accepted Hopkins’ argument that allowing such considerations to affect the partnership decision could be evidence of a prohibited discriminatory motivation under Title VII. The Court’s opinion embraced the idea that discrimination because of “gender,” not just discrimination because of biological sex, came within the scope of Title VII’s prohibition. The statutory policy included wiping away gender stereotypes that created barriers to equal opportunity for women in the workplace.

Although Ann Hopkins was not a lesbian and nothing was said about homosexuality in her case, the implications of the ruling became obvious over time as federal courts dealt with a variety of stereotyping claims. A person who suffered discrimination because she did not appear or act the way people expected a woman to appear or act was protected, and that sounded to lots of people like a description of discrimination against transgender people and some – but perhaps not all – lesbians, gay men and bisexuals. The argument seemed particularly strong when an employer discriminated against a person who was hired appearing and acting as a man and then began to transition to living life as a woman.

At the same time, legal academics had begun to publish theoretical arguments supporting the idea that discrimination against gay people was a form of sex discrimination. Among the earliest were Professor Sylvia Law of New York University, whose 1988 article in the Wisconsin Law Review, titled “Homosexuality and the Social Meaning of Gender,” suggested that anti-gay discrimination was about “preserving traditional concepts of masculinity and femininity. Law’s pioneering work was quickly followed by the first of many articles by Andrew Koppelman, first in a student note he published in the Yale Law Journal in 1988 titled “The Miscegenation Analogy: Sodomy Law as Sex Discrimination,” later in his 1994 article in the New York University Law Review titled “Why Discrimination Against Lesbians and Gay Men is Sex Discrimination.” Both Koppelman, now a professor at Northwestern University, and Law proposed theoretical arguments for treating anti-gay discrimination as sex discrimination.

Seizing upon the Price Waterhouse precedent, transgender people and gay people began to succeed in court during the 1990s by arguing that their failure to conform to gender stereotypes was the reason they were denied hiring or continued employment, desirable assignments or promotions. A strange dynamic began to grow in the courts, as judges repeated, over and over again, that Title VII did not prohibit discrimination because of sexual orientation or gender identity, as such, but that it did prohibit discrimination against a person because of his or her failure to conform to gender stereotypes and expectations, regardless of the plaintiff’s sexual orientation. Many of the courts insisted, however, that there was one gender stereotype that could not be the basis of a Title VII claim – that men should be attracted only to women, and women should be attracted only to men. To allow a plaintiff to assert such a claim would dissolve the line that courts were trying to preserve between sex stereotyping claims and sexual orientation or gender identity discrimination claims. Decades of past precedents stood in the way of acknowledging the unworkability of that line.

Ten years after the Price Waterhouse decision, the Supreme Court decided another sex discrimination case, Oncale v. Sundowner Offshore Services, with an opinion by Justice Antonin Scalia that helped to fuel the broadening interpretation of Title VII. The 5th Circuit Court of Appeals had ruled that a man who is subjected to workplace harassment of a sexual nature by other men could not bring a hostile environment sex discrimination claim under Title VII. The court of appeals reasoned that Congress intended in 1964 to prohibit discrimination against women because they were women or men because they were men, and that such a limited intent could not encompass claims of same-sex harassment, which would be beyond the expectations of the legislators who passed that law. In reversing this ruling, Justice Scalia, who was generally skeptical about the use of legislative history to interpret statutes, wrote for the Court that the interpretation of Title VII was not restricted to the intentions of the 1964 Congress. While conceding that same-sex harassment was not one of the “evils” that Congress intended to attack by passing Title VII, he wrote:

“Statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed. Title VII prohibits discrimination because of sex in employment. This must extend to sex-based discrimination of any kind that meets the statutory requirements.”

Thus, as our collective, societal understanding of sex, gender, sexuality, identity and orientation broadens, our concept of sex discrimination as prohibited by Title VII also broadens. With the combined force of Price Waterhouse and Oncale, some federal courts began to push the boundaries even further during the first decade of the 21st century.

By the time the Equal Employment Opportunity Commission ruled in 2012 in Macy v. Holder, a federal sector sex discrimination case, that a transgender plaintiff could pursue a Title VII claim against a division of the Justice Department, its opinion could cite a multitude of federal court decisions in support of that conclusion, including two Title VII decisions by the 6th Circuit Court of Appeals involving public safety workers who were transitioning, and a 2011 ruling by the 11th Circuit Court of Appeals that a Georgia state agency’s discrimination against an employee because she was transitioning violated the Equal Protection Clause as sex discrimination. There were also federal appellate rulings to similar effect under the Equal Credit Opportunity Act and the Violence against Women Act, as well as numerous trial court rulings under Title VII. So the EEOC was following the trend, not necessarily leading the parade, when it found that discrimination against a person because of their gender identity was a form of sex discrimination.

After the Supreme Court’s landmark ruling in Lawrence v. Texas in 2003, striking down a state sodomy law under the 14th Amendment, and further rulings in 2013 and 2015 in the Windsor and Obergefell cases, leading to a national right to marry for same-sex couples, the persistence by many courts in asserting that Title VII did not prohibit sexual orientation discrimination appeared increasingly archaic. Just weeks after the Obergefell decision, the EEOC issued another landmark ruling in July 2015, David Baldwin v. Anthony Foxx, reversing half a century of EEOC precedent and holding that sexual orientation discrimination claims were “necessarily” sex discrimination claims covered by Title VII. The Commission ruled that a gay air traffic controller could bring a Title VII claim against the Department of Transportation, challenging its refusal to hire him for a full-time position at the Miami air traffic control center because of his sexual orientation.

Building on the Price Waterhouse, Oncale and Macy decisions, the EEOC embraced several alternative theories to support this ruling. One was the now well-established proposition that an employer may not rely on “sex-based considerations” or “take gender into account” when making employment decisions, unless sex was a bona fide occupational qualification – a narrow statutory exception that is rarely relevant to a sexual orientation or gender identity case.

“Discrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms,” wrote the EEOC. “Sexual orientation as a concept cannot be defined or understood without reference to sex. Sexual orientation is inseparable from and inescapably linked to sex and, therefore, allegations of sexual orientation discrimination involve sex-based considerations.” By the summer of 2015, the agency was able to cite several federal trial court decisions applying these concepts in particular cases.

Another theory was based on the associational discrimination theory. Courts had increasingly accepted the argument that discrimination against a person because he or she was in an interracial relationship was discrimination because of race. The analogy was irresistible: Discriminating against somebody because they are in a same-sex relationship must be sex discrimination, because it involved taking the employee’s sex into account. Denying a job because a man is partnered with a man rather than with a woman means that his sex, as well as his partner’s sex, was taken into account by the employer in making the decision.

Finally, the Commission embraced the stereotyping theory that some courts had refused to fully embrace: that sexual orientation discrimination is sex discrimination because it necessarily involves discrimination based on gender stereotypes, not just those involving appearance, mannerisms, grooming, or speech, but also stereotypes about appropriate sexual attractions. Quoting a Massachusetts federal trial court ruling, the agency wrote, “Sexual orientation discrimination and harassment are often, if not always, motivated by a desire to enforce heterosexually defined gender norms. . . The harasser may discriminate against an openly gay co-worker, or a co-worker that he perceives to be gay, whether effeminate or not, because he thinks, ‘real’ men should date women, and not other men.” Professor Law’s theoretical proposition of 1988 was now surfacing in court and agency rulings a quarter century later.

The EEOC also rejected the view that adopting this expanded definition of sex discrimination required new congressional action, pointing out that the courts had been expanding the definition of sex discrimination under Title VII continually since the 1970s, with minimal intervention or assistance from Congress.

Since 2015 the issue of sexual orientation discrimination under Title VII has risen to the level of the circuit courts of appeals. In most of the circuits, there are precedents dating back decades holding that sexual orientation claims may not be litigated under Title VII. These precedents are softened in some circuits that have accept discrimination claims from gay men or lesbians who plausibly asserted that their visible departure from gender stereotypes provoked discrimination against them. But many of these appeals courts have strained to draw a line between the former and the latter, and have rejected stereotyping claims where they perceived them as attempts to “bootstrap” a sexual orientation claim into Title VII territory.

Ironically, one judge who emphatically rejected such a case several years ago with the bootstrapping objection, Richard Posner of the 7th Circuit, is the author of a concurring opinion in this new round of circuit court rulings in which he argues that it is legitimate for federal courts to “update” statutes without waiting for Congress in order to bring them into line with current social trends. This was part of the 7th Circuit’s en banc ruling in Kimberly Hively v. Ivy Tech Community College, the April 4, 2017, decision that is the first by a federal appeals court to embrace all aspects of the EEOC’s Baldwin decision and hold that a lesbian could pursue a sexual orientation claim under Title VII. Posner’s argument echoes one made decades ago by Guido Calabresi, then a professor at Yale, now a judge on the 2nd Circuit, in a series of lectures published as a book titled “A Common Law for the Age of Statutes,” in which he argued that legislative inertia would justify courts in updating old statutes to meet contemporary needs. Although Posner did not cite Calabresi’s book, his argument is much the same. He quoted both Justice Scalia’s statement from Oncale and an earlier iteration of similar sentiments in an opinion by Justice Oliver Wendell Holmes from 1920, in which Holmes wrote: “The case before us must be considered in the light of our whole experience and not merely in that of what was said a hundred years ago.”

The federal circuit courts follow the rule that when a three-judge panel of the circuit interprets a statute, it creates a binding circuit precedent which can be reversed only by the full bench of the court in an en banc ruling, or by the Supreme Court, or by Congress changing the statute. The Hively ruling reversed a three-judge panel decision that had rejected the plaintiff’s Title VII claim based on prior circuit precedents. The vote was 8-3. Incidentally, 5 of the judges in the 8-member majority were appointees of Republican presidents. The employer in that case quickly announced that it would not seek Supreme Court review, but this ruling creates a split among the circuit courts, so it is only a matter of time before the Supreme Court receives a petition asking for a definitive interpretation of Title VII on this question.

The 7th Circuit opinion by Chief Judge Diane Wood accepted all of the EEOC’s theories from the Baldwin decision. Judge Wood concluded that “it would require considerable calisthenics to remove the ‘sex’ from ‘sexual orientation.’” “We hold that a person who alleges that she experienced employment discrimination on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes.”

Dissenting Judge Diane Sykes criticized the majority for deploying “a judge-empowering, common-law decision method that leaves a great deal of room for judicial discretion.” Here the battle is joined. For the majority, it is appropriate to trace the development of case law over decades, treating the concept of sex discrimination as evolving. For Judge Posner, concurring, it is legitimate for the court to set aside the pretense of ordinary interpretation and to “update” an old statute to reflect contemporary understandings. And for Judge Sykes, these are both illegitimate because it violates the division of authority between the legislature and the courts to adopt an “interpretation” that would be outside the understanding of the legislators who enacted the statute.

Now the scenario is playing out in other circuits. In recent weeks, the Atlanta-based 11th Circuit and the New York-based 2nd Circuit have issued panel rulings refusing to allow sexual orientation discrimination claims under Title VII. The panels did not consider the issue afresh and decided to reaffirm the old rulings on the merits, but rather asserted that they were powerless to do so because of the existing circuit precedents. In both of the cases decided in March, Evans v. Georgia Regional Hospital and Christiansen v. Omnicom Group, the panels sent the cases back to the trial court to see whether they could be litigated as sex stereotyping cases instead of sexual orientation cases. But one judge dissented in the 11th Circuit, arguing that an old pre-Price Waterhouse precedent should not longer be treated as binding. The 2nd Circuit panel rejected the trial judge’s conclusion that because the gay plaintiff’s complaint included evidence that his treatment was tainted by homophobia he could not assert a sex stereotyping claim, and two members of the panel wrote a concurring opinion virtually accepting the EEOC’s view of the matter and suggesting that the circuit should reconsider the issue en banc.. In both cases, the panels took the position that sex stereotyping claims could be evaluated without reference to the sexual orientation of the plaintiff. And, in both of these cases, lawyers for the plaintiffs are asking the circuits to convene en banc benches to reconsider the issue, as a preliminary to seeking possible review in the Supreme Court. A different 2nd Circuit panel has also issued a ruling where sex stereotyping of the sort that is actionable in the 2nd Circuit is not part of the case, and counsel in that case is also filing a petition for en banc review.

One or more of these petitions is likely to be granted. While we may see more en banc rulings in favor of allowing sexual orientation discrimination claims, at some point a new circuit split may develop, leading inevitably to the Supreme Court. Or the issue could get to the Supreme Court by an employer seeking further review, since older rulings in other circuits still present the kind of circuit splits that the Supreme Court tries to resolve.

That leads to the highly speculative game of handicapping potential Supreme Court rulings. Neil Gorsuch’s confirmation restores the ideological balance that existed before Justice Scalia’s death. The Court as then constituted decided the historic same-sex marriage cases, Windsor and Obergefell, with Justice Kennedy, a Republican appointee, writing for the Court in both cases, as well as in earlier gay rights victories, Romer v. Evans and Lawrence v. Texas. These opinions suggest a degree of empathy for gay litigants that might lead Kennedy to embrace an expansive interpretation of Title VII. He is part of a generation of appellate judges appointed by Ronald Reagan during the 1980s who made up half of the majority in the recent 7th Circuit ruling: Richard Posner, Frank Easterbrook, Joel Flaum, and Kenneth Ripple. Another member of that majority, Ilana Rovner, was appointed by Reagan’s successor, George H.W. Bush. This line-up underlies optimism that Kennedy might join with the Clinton and Obama appointees on the Supreme Court to produce a five-judge majority to embrace the EEOC’s interpretation. Such optimism may also draw on Kennedy’s decisive rejection of the argument that legal rules are frozen at the time of their adoption and not susceptible to new interpretations in response to evolving social understandings. This was the underlying theme of his opinions in the four major gay rights decisions.

Since the 1970s supporters of gay rights have introduced bills in Congress to amend the federal civil rights laws to provide explicit protection for LGBT people. None of those attempts has succeeded to date. If the judicial battle reaches a happy conclusion, those efforts might be rendered unnecessary, although there is always a danger in statutory law of Congress overruling through amendment, but that seems unlikely unless the Republicans attain a filibuster-proof majority in the Senate.

On that optimistic note, I conclude with thanks for your attention, and I am happy to answer questions now.

 

Supreme Court Will Not Decide Transgender Title IX Case This Term

Posted on: March 7th, 2017 by Art Leonard No Comments

The Supreme Court will not decide this term whether Title IX of the Education Amendments of 1972 and an Education Department regulation, 34 C.F.R. Section 106.33, require schools that receive federal money to allow transgender students to use restrooms consistent with their gender identity. Gloucester County School Board v. G.G., No. 16-273 (Summary Disposition, March 6, 2017).  Title IX states that schools may not discriminate because of sex if they get federal money, and the regulation allows schools to provide separate restroom and locker room facilities for boys and girls so long as they are “equal.”

Responding to a February 22 letter from the Trump Administration, advising the Court that the Education and Justice Departments had “withdrawn” two federal agency letters issued during the Obama Administration interpreting the statute and regulation to require allowing transgender students to use facilities consistent with their gender identity, the Court announced on March 6 that it was “vacating” the decision by the 4th Circuit Court of Appeals in the case of transgender high school student Gavin Grimm, which it had previously agreed to review, and sending the case back to the 4th Circuit for “further consideration in light of the guidance document issued by the Department of Education and Department of Justice.”  The case had been scheduled for argument on March 28.

This result was not unexpected, although both parties in the case, Grimm and the Gloucester County, Virginia, School District, had asked the Court to keep the case on the docket and decide whether Title IX and the bathroom regulation required the district to let Grimm use boys’ restrooms at the high school. Represented by the ACLU LGBT Rights Project, Grimm urged the Court to hold the previously scheduled hearing.  The school district urged the Court to delay the hearing, in order to give the Trump Administration an opportunity to weigh in formally, but then to hear and decide the case.  Had the Court granted the school district’s request, the case might have been argued before the end of the Court’s current term or delayed to next fall.

The case dates back to 2015, when Grimm and his mother had met with school administrators during the summer prior to his sophomore year to tell them about his gender transition and they had agreed to let him use the boys’ restrooms, which he did for several weeks with no problems. Complaints by parents led the school board to adopt a resolution requiring students to use restrooms consistent with the sex indicated on their birth certificates – so-called “biological sex” – regardless of their gender identity.  The school also provided an alternative, unacceptable to Grimm, of using a single-user restroom that he found inconvenient and stigmatizing.

Grimm sued the school district, alleging a violation of his rights under Title IX and the 14th Amendment. The Education Department sent a letter at the request of the ACLU informing the district court that the Department interpreted Title IX and the bathroom regulation as “generally” requiring schools to let transgender students use facilities consistent with their gender identity.  Following the lead of several federal courts and the Equal Employment Opportunity Commission interpreting other federal statutes that forbid sex discrimination, the Obama Administration took the position that laws against sex discrimination protect people from discrimination because of their gender identity.

The district judge, Robert Doumar, rejected the Obama Administration’s interpretation and granted the school district’s motion to dismiss the Title IX claim on September 17, 2015 (132 F. Supp. 3d 736), while reserving judgment on Grimm’s alternative claim that the policy violated his right to equal protection of the law guaranteed by the 14th Amendment.  Doumar opined that when adopting Title IX in 1972, Congress had not intended to forbid gender identity discrimination, notwithstanding the Obama Administration’s more recent interpretation of the statute.

The ACLU appealed Doumar’s ruling to the Richmond-based 4th Circuit, where a three-judge panel voted 2-1 on April 19, 2016 (822 F.3d 709), to reverse Judge Doumar’s decision.  The panel, applying a Supreme Court precedent called the Auer Doctrine, held that the district court should have deferred to the Obama Administration’s interpretation of the bathroom regulation because the regulation was ambiguous as to how transgender students should be accommodated and the court considered the Obama Administration’s interpretation to be “reasonable.”  A dissenting judge agreed with Judge Doumar that Title IX did not forbid the school district’s policy. The panel voted 2-1 to deny the school district’s motion for rehearing by the full 4th Circuit bench on May 31 (824 F.3d 450).

Shortly after the 4th Circuit issued its decision, the Education and Justice Departments sent a “Dear Colleague” letter to school administrators nationwide, advising them that the government would interpret Title IX to protect transgender students and providing detailed guidance on compliance with that requirement.  The letter informed recipients that failure to comply might subject them to Education Department investigations and possible loss of eligibility for federal funding.  This letter stirred up a storm of protest led by state officials in Texas, who filed a lawsuit joined by ten other states challenging the Obama Administration’s interpretation as inappropriate.  Subsequently another lawsuit was filed in Nebraska by state officials joined by several other states making the same argument.

Judge Doumar reacted quickly to the 4th Circuit’s reversal of his ruling, issuing a preliminary injunction on June 23 requiring the school district to allow Grimm to use boys’ restrooms while the case proceeded on the merits (2016 WL 3581852).  The 4th Circuit panel voted on July 12 to deny the school district’s motion to stay the preliminary injunction, but on August 3 the Supreme Court granted an emergency motion by the school district to stay the injunction while the district petitioned the Supreme Court to review the 4th Circuit’s decision (136 S. Ct. 2442).

It takes five votes on the Supreme Court to grant a stay of a lower court ruling pending appeal. Usually the Court issues no written opinion explaining why it is granting a stay.  In this case, however, Justice Stephen Breyer issued a one-paragraph statement explaining that he had voted for the stay as a “courtesy,” citing an earlier case in which the conservative justices (then numbering five) had refused to extend such a “courtesy” and grant a stay of execution to a death row inmate in a case presenting a serious 8th Amendment challenge to his death sentence.  Justices Ruth Bader Ginsberg, Sonia Sotomayor and Elena Kagan indicated that they would have denied the motion, so all four of the conservative justices had voted for the stay.  Since it takes five votes to grant a stay but only four votes to grant a petition for certiorari (a request to the Court to review a lower court decision), it was clear to all the justices that the school district’s subsequent petition for review would be granted, and it was, in part, on October 28 (137 S. Ct. 369).

Meanwhile, however, U.S. District Judge Reed O’Connor in Wichita Falls, Texas, had granted a “nationwide” preliminary injunction later in August in the Texas case challenging the Obama Administration guidance, blocking federal agencies from undertaking any new investigations or initiating any new cases involving gender identity discrimination claims under Title IX. Texas v. United States, 2016 WL 4426495 (N.D. Tex. Aug. 21, 2016).  The Obama Administration filed an appeal with the Houston-based 5th Circuit Court of Appeals, asking that court to cut down the scope of O’Connor’s injunction to cover just the states that had joined that lawsuit, pending litigation on the merits in that case.

The Gloucester school district’s petition for certiorari asked the Supreme Court to consider three questions: whether its doctrine of deferral to agency interpretations of regulations should be abandoned; whether, assuming the doctrine was retained, it should be applied in the case of an “unpublished” letter submitted by the agency in response to a particular lawsuit, and finally whether the Obama Administration’s interpretation of Title IX and the regulation were correct.  The Court agreed only to address the second and third questions.

Donald Trump was elected a week later. During the election campaign, he stated that he would be revoking Obama Administration executive orders and administrative actions, so the election quickly led to speculation that the Gloucester County case would be affected by the new administration’s actions, since the Guidance had been subjected to strong criticism by Republicans.  This seemed certain after Trump announced that he would nominate Senator Jeff Sessions of Alabama to be Attorney General, as Sessions has a long history of opposition to LGBT rights.  The announcement that Trump would nominate Betsy DeVos to be Secretary of Education fueled the speculation further, since her family was notorious for giving substantial financial support to anti-LGBT organizations.  It seemed unlikely that the Obama Administration’s Title IX Guidance would survive very long in a Trump Administration.

The other shoe dropped on February 22, just days before the deadline for submission of amicus curiae (“friend of the court”) briefs on behalf of Gavin Grimm.   The Solicitor General’s office had not filed a brief in support of the school district at the earlier deadline, and there had been hope that the government would file a brief on behalf of Grimm or just stay out of the case.  According to numerous press reports, Secretary DeVos, who reportedly does not share her family’s anti-gay sentiments, had not wanted to withdraw the Guidance, but Attorney General Sessions insisted that the Obama Administration letters should be withdrawn, and Trump sided with Sessions in a White House showdown over the issue.

The February 22 “Dear Colleagues” letter was curiously contradictory, however. While announcing that the prior letters were “withdrawn” and their interpretation would not be followed by the government, the letter did not take a position directly on whether Title IX applied to gender identity discrimination claims.  Instead, it said that further study was needed on the Title IX issue, while asserting that the question of bathroom access should be left to states and local school boards and that schools were still obligated by Title IX not to discriminate against any students, regardless of their sexual orientation or gender identity.  The letter was seemingly an attempt to compromise between DeVos’s position against bullying and discrimination and Sessions’ opposition to a broad reading of Title IX to encompass gender identity discrimination claims.  White House Press Secretary Sean Spicer said that the question of Title IX’s interpretation was still being considered by the administration.

In any event, the Obama Administration interpretation to which the 4th Circuit panel had deferred was clearly no longer operative, effectively rendering moot the first question on which the Supreme Court had granted review.  Although the parties urged the Court to continue with the case and address the second question, it was not surprising that the Court decided not to do so.

The usual role of the Supreme Court is to decide whether to affirm or reverse a ruling on the merits of a case by the lower court. In this case, however, the 4th Circuit had not issued a ruling on the merits as such, since the basis for its ruling was deference to an administrative interpretation.  The 4th Circuit held that the Obama Administration’s interpretation was “reasonable,” but not that it was the only correct interpretation of the regulation or the statute.  The only ruling on the merits in the case so far is Judge Doumar’s original 2015 ruling that Grimm’s complaint failed to state a valid claim under Title IX.  Thus, it was not particularly surprising that the Supreme Court would reject the parties’ request to hear and decide the issue of interpretation of Title IX, and instead to send it back to the 4th Circuit to reconsider in light of the February 22 letter.  The Court usually grants review because there are conflicting rulings in the courts of appeals that need to be resolved. Here there are no such conflicting rulings under Title IX and the bathroom regulation, since the only other decisions on this question are by federal trial courts.

After issuing its February 22 letter, the Justice Department abandoned its appeal of the scope of Judge O’Connor’s preliminary injunction in the Texas case and asked the 5th Circuit to cancel a scheduled argument, which it did.  Furthermore, withdrawal of the Obama Administration Guidance rendered the Texas v. U.S. case moot, since the relief sought by the plaintiffs was a declaration that the Guidance was invalid, so Judge O’Connor will dissolve his injunction and the case will be withdrawn, as will be the Nebraska case.

In the meantime, there are several other relevant cases pending. The Cincinnati-based 6th Circuit and the Philadelphia-based 3rd Circuit will be considering appeals from district court rulings on transgender student rights from Ohio and Pennsylvania, there are cases pending before trial courts elsewhere, and there are multiple lawsuits pending challenging North Carolina’s H.B. 2, which among other things mandates that transgender people in that state use public restrooms consistent with their birth certificates.  One case challenging H.B. 2 was filed by the Obama Justice Department and may be abandoned by the Trump Administration.  But the 4th Circuit is shortly to hear arguments on an appeal filed by three transgender plaintiffs who are students or staff members at the University of North Carolina, who won a preliminary injunction when the trial judge in their case, filed by the ACLU and Lambda Legal, deferred to the Obama Administration Guidance as required by the 4th Circuit’s ruling in Grimm’s case, but declined to rule on the plaintiffs’ claim that H.B. 2 also violated their constitutional rights.  Carcano v. McCrory, 2016 WL 4508192 (M.D.N.C. Aug. 26, 2016). The appeal is focused on their constitutional claim and their argument that the preliminary injunction, which was narrowly focused on the three of them, should have been broadly applied to all transgender people affected by H.B. 2.  The case pending in the 3rd Circuit also focuses on the constitutional claim, as a trial judge in Pittsburgh ruled that a western Pennsylvania school district violated the 14th Amendment by adopting a resolution forbidding three transgender high school students from using restrooms consistent with their gender identity. Evancho v. Pine-Richland School District, 2017 U.S. Dist. LEXIS 26767, 2017 WL 770619 (W.D. Pa. Feb. 27, 2017).

Meanwhile, Gavin Grimm is scheduled to graduate at the end of this spring semester, which may moot his case since he was seeking injunctive relief to allow him to use the boys’ restrooms, unless the court is convinced that a live controversy still exists because the school district’s policy continues in effect and will still prevent Grimm from using the boys’ restrooms if he come to the school to attend alumni events.

It seems likely that whatever happens next in the Gavin Grimm case, the issue of transgender people and their access to gender-identity-consistent public facilities will continue to be litigated in many federal courts in the months ahead, and may be back to the Supreme Court soon, perhaps as early as its 2017-18 Term. By then, the Court is likely to be back to a five-member conservative majority, assuming the Senate either confirms Trump’s nomination of Judge Neil Gorsuch or, if that stalls, another conservative nominee.  It is even possible that Trump may have a second vacancy to fill before this issue gets back to the Court, in which case the plaintiffs may face very long odds against success.

 

 

Federal Court Lets Transgender Employee Sue Employer for Transition Benefits Denial Under Title VII

Posted on: January 17th, 2017 by Art Leonard No Comments

Does a transgender employee who seeks coverage under her employer’s benefits plans for breast augmentation surgery have a legal remedy if her claims are denied? U.S. District Judge Sidney A. Fitzwater ruled on January 13 that a transgender woman employed by L-3 Communications Integrated Systems (L-3) may pursue a sex discrimination claim under Title VII of the Civil Rights Act of 1964, having alleged that she was denied such benefits because of her gender, but not under the anti-discrimination provision of the Affordable Care Act (ACA). Baker v. Aetna Life Insurance Company, 2017 U.S. Dist. LEXIS 5665, 2017 WL 131658 (N.D. Tex.).

Judge Fitzwater rejected discrimination claims against the insurance company that provides the coverage and administers the plans on behalf of the employer, finding that the ACA and President Obama’s Executive Order governing gender identity discrimination by federal contractors do not apply to this situation, and that the insurance company cannot be sued under Title VII because it is not the plaintiff’s employer. Judge Fitzwater declined to grant motions for summary judgment by either the employee or by the insurer of her claim that denial of health and short-term disability benefits violates her rights under the terms of the employee benefits plan, setting that claim down for further proceedings.

According to her Complaint filed in the U.S. District Court for the Northern District of Texas in Dallas, Charlize Marie Baker is an employee of L-3 and a participant in the company’s Health Plan and its Short-Term-Disability (STD) Plan, both of which are administered by Aetna Life Insurance Company. She began the process of transitioning in 2011, obtained a legal name change, and had her gender designation changed from male to female on all government-issued documents.  She scheduled breast implant surgery in 2015 after her doctor determined that it was medically necessary to treat her gender dysphoria.

Baker filed claims for coverage of the surgery under the Health Plan and coverage of her recovery period under the STD Plan.  She alleges that the Health Plan denied her claim to cover the surgery, because “the plan does not cover breast implants for individuals with a male birth gender designation who are transitioning to the female gender, although the plan covers individuals with a female birth designation who are transitioning to the male gender and seeking a mastectomy.”  Presumably the mastectomy would be routinely covered because the Health Plan is accustomed to covering mastectomies for female employees when their doctors state that the procedure is medically necessary.   Baker was denied STD benefits because the Plan administrator decided that surgery to treat Gender Dysphoria does not qualify as “treatment of an illness.”

In his January 13 ruling, Judge Fitzwater focused on motions by L-3 and Aetna to dismiss discrimination claims brought under Section 1557 of the ACA, the Employee Retirement Income Security Act (ERISA), and Title VII of the Civil Rights Act of 1964. Section 1557 of the ACA incorporates by reference Title IX of the Education Amendments Act of 1972, which prohibits discrimination “because of sex.”  ERISA has its own non-discrimination provision, but does not specifically ban discrimination “because of sex.”  The ERISA provision broadly prohibits discriminating against an employee to prevent them from getting benefits to which they are entitled under an employee benefit plan.  ERISA provides a vehicle for employees to sue plan administrators for the wrongful denial of benefits to which they are entitled under employee benefit plans.

None of the statutes under which Baker filed her claims explicitly prohibits discrimination because of gender identity. In resisting the motions to dismiss, she relied heavily on a regulation published by the Department of Health and Human Services last spring, providing that Section 1557 of the ACA bans discrimination because of gender identity by insurers and health care providers, tracking interpretations of Title IX by the Department of Education and the Justice Department, which in turn relied on interpretations of Title VII by some federal courts and the Equal Employment Opportunity Commission (EEOC).

Baker also relied on President Obama’s Executive Order 13672, which bans gender identity discrimination by federal contractors. Noting that L-3 is a federal contractor, Baker’s attorneys, Michael J. Hindman and Kasey Cathryn Krummel of Hindman/Bynum PC, urged the court to make “a good faith extension of existing law that the discrimination by Defendants based on her Gender Identity is also discrimination in violation of ERISA in this context and that ERISA must be read to include the prohibition of discrimination based on gender identity.”

“Baker is unable to point to any controlling precedent that recognizes a cause of action under Section 1557 [of the ACA] for discrimination based on gender identity,” wrote the judge. For one thing, he pointed out, the HHS regulation on point was to become effective on January 1, 2017, long after Baker was denied benefits, and thus was not applicable at the time of Aetna’s decision to deny the claims, and furthermore, one of Judge Fitzwater’s colleagues on the Northern District of Texas bench, Judge Reed O’Connor, has issued two rulings rejecting the argument that Title IX, which is the source of the ACA non-discrimination policy regarding sex, should be “construed broadly to protect any person, including transgendered persons, from discrimination.”

On August 21, 2016, Judge O’Connor issued a preliminary injunction against the enforcement of Title IX by the federal government in gender identity cases, and he issued a similar preliminary injunction on December 31, 2016, against the enforcement of the HHS regulation in gender identity cases under the ACA. The government appealed the August 21 ruling to the 5th Circuit Court of Appeals in Houston, and announced it would similarly appeal the December 31 ruling.  Whether those appeals will be pursued or dropped after the change of administration on January 20 is a decision for the new attorney general and secretaries of education and health.  In both of those cases, O’Connor concluded that the plaintiffs were likely to prevail on their claim that Title IX (and by extension the ACA) does not ban gender identity discrimination.

Many federal courts are grappling with the question whether federal laws and regulations banning discrimination “because of sex” should apply to gender identity or sexual orientation discrimination, but there is no consensus yet among the appellate courts. The Supreme Court has a case pending on the gender identity issue under Title IX, but it has yet to be scheduled for argument.  The closest the appeals courts have come are decisions finding that “sex stereotyping” violates Title VII and perhaps by extension other sex discrimination laws, based on a 1989 ruling by the Supreme Court in Price Waterhouse v. Hopkins.  Some courts have used the “sex stereotyping” theory to protect transgender employees in Title VII cases.  However, Judge Fitzwater was correct in observing that as of now there is no “controlling precedent” supporting Baker’s claim that gender identity discrimination, as such, violates Section 1557 of the ACA.  For this judge, a “controlling precedent” would be one coming from the 5th Circuit, which has appellate jurisdiction over federal trial courts in Texas, or the Supreme Court, and expressly addressing the issue.

Baker sought to argue that “the ‘effect’ of E.O. 13672 seems to be little more than to clarify the issue left somewhat ambiguous in Section 1557 that discrimination against transgender persons under this law is prohibited.” She argued that when the ACA was enacted in 2010, some courts had already relied on Price Waterhouse v. Hopkins to find gender identity discrimination covered by Title VII.

Fitzwater found “two fallacies” in this argument. “First,” he wrote, “the Fifth Circuit has not extended Hopkins’ Title VII reasoning to apply to any statute referenced in Section 1557,” and cited Judge O’Connor’s August 21 ruling in support of this point.  “Second, Baker is relying on an Executive Order to clarify what she characterizes as a ‘somewhat ambiguous’ legislative act.”  This was not enough to satisfy Fitzwater, who granted the motions to dismiss the ACA discrimination claim.

Aetna also moved to dismiss Baker’s ERISA claim, contending that ERISA does not ban gender identity discrimination in the administration of employee benefit plans. Fitzwater agreed with Aetna, finding that “as Baker acknowledges, this claim is not currently recognized.  It is for the Congress, not this court, to decide whether to create in ERISA a protection that the statute does not already provide.”  And because the court had already rejected her argument under Section 1557, it would not rely on that ACA provision as a basis for finding a right under ERISA.

Turning finally to the motions to dismiss the Title VII claim, Judge Fitzwater rejected Baker’s argument that Aetna should be liable to suit for sex discrimination under Title VII as an “agent” of L-3 in administering the benefits plans. Fitzwater pointed to 5th Circuit precedents holding that Title VII does not apply in the absence of an employer-employee relationship.  Baker argued that in the EEOC Compliance Manual there is a suggestion that an insurance company administering an employer’s benefit plans is acting as the employer’s agent, “but the EEOC Compliance Manual does not have the force of law,” wrote Fitzwater.  “And this circuit recognizes an agency theory of employer liability only if the alleged agent had authority ‘with respect to employment practices,’” which Baker did not allege.

However, at long last Fitzwater reached the only claim that he refused to dismiss in this opinion: Baker’s allegation that the denial of coverage for her surgery and recovery period under the benefits plans provided by her employer constituted sex discrimination by the employer in violation of Title VII. L-3 argued that Baker had failed to allege that she suffered an adverse employment action based on her gender, but, wrote Fitzwater, “The Court disagrees.”

“Baker plausibly alleges that she was denied employment benefits based on her sex,” he wrote. “She asserts that L-3 ‘engaged in intentional gender discrimination in the terms and conditions of employment by denying her a medically necessary procedure based solely on her gender,’” that the company’s “conduct constitutes a deliberate and intentional violation of Title VII,” and that this conduct “has cause [her] to suffer the loss of pay, benefits, and prestige.”  This was enough, concluded Fitzwater, to allow her Title VII claim against her employer to continue.  Interestingly, his opinion does not explore explicitly whether Title VII applies to gender identity discrimination claims as such, and makes no mention of the EEOC’s 2012 decision to that effect, choosing to treat this as purely a sex discrimination, presumably on the basis that Baker would have been covered for the procedure had she been identified female at birth, so clearly in that sense the denial was because of her sex.

Thus, at this point Baker continues to have a claim under ERISA against Aetna, based on her allegation that Aetna’s refusal to cover her procedure and recovery period violated the terms of the benefits plans, and a sex discrimination claim under Title VII against her employer, based on her allegation that the employer’s benefit plan discriminated against her because of her sex.

Federal Court Rejects Transgender Citizen’s Complaints of Unconstitutional Treatment by NYPD Officers

Posted on: October 1st, 2016 by Art Leonard No Comments

In a decision notably lacking in empathy for transgender people and the slights and humiliations they suffer on a regular basis, U.S. District Judge Gregory H. Woods granted New York City’s motion to dismiss a complaint by Marlow White, self-identified as a man of transgender experience, that his 14th Amendment rights were violated by NYPD officers and the City when the police failed to respond to the continued verbal harassment of White by Napoleon Monroe, a man who frequented the neighborhood where White lived and made various threats against him as well as subjecting him to verbal harassment.  White v. City of New York, 2016 WL 4750180 (S.D.N.Y., Sept. 12, 2016).

According to the court’s summary of the factual allegations, the police officers who were summoned by White when he was continually accosted by Monroe were blatantly transphobic, treating him as somebody unworthy of respect and suggesting that until somebody was seriously injured, they would not lift a finger to help.

Among other things, Judge Woods’ opinion concludes that in the absence of a 2nd Circuit ruling holding that gender identity is a suspect classification (or, as the judge phrases it, that discrimination against transgender people is a form of sex discrimination and thus subject to heightened scrutiny review, as the 11th but not the 2nd Circuit has held), the refusal of police officers to take White’s complaints or do anything to stop Monroe’s harassment of him is subject only to rational basis review.  Under that standard, Woods found that the discretionary decision by police officers not to arrest somebody who had yet to commit a violent crime against the complainant was not so arbitrary as to lose them the shield of qualified immunity.

Furthermore, the judge found that under Due Process jurisprudence the police officers had no obligation to prevent one citizen from subjecting another to verbal harassment and threats, so long as the police were not enabling or encouraging actual harm to the complainant.

The judge found that White’s allegations of past incidents involving the police and their dealings with transgender people were not sufficient to document some sort of official NYPD policy of disparate treatment of transgender people that would be necessary to impose municipal liability, or of a failure to properly train the police about how to interact with transgender people. One suspects that transgender rights organizations could supply a panoply of evidence about police disrespect for the human rights and dignity of transgender people, but unfortunately the evidence presented in response to this dismissal motion seems to have been minimal.

“White’s conclusory allegations regarding the City’s alleged failure to train its police officers fail to state a claim,” wrote the judge.  “He states that ‘adequate training regarding issues peculiar to persons of trans experience will make it substantially less likely that the rights of persons of trans experience will be violated.  But the facts in the Amended Complaint do not plead a pattern of similar constitutional violations, such that the City was on notice that different, or additional, training was needed.”  Quoting a Supreme Court ruling, Connick v. Thompson, 563 U.S. 51, 62 (2011), “Without notice that a course of training is deficient in a particular respect, decisionmakers can hardly be said to have deliberately chosen a training program that will cause violations of constitutional rights.”  Judge Woods found that White “has failed to establish a history of NYPD officers mishandling situations involving persons of trans experience such that the City was deliberately indifferent by failing to provide the unspecified training that he desires.  Accordingly, because White has failed to allege either a widespread practice or a failure-to-train claim, his Monell claim is dismissed without prejudice.”

White is represented by Donald Robert Dunn, Jr., of the Bronx.  The dismissal without prejudice suggests that he could come back with a new complaint on the municipal liability issue if he can put together a more complete factual record of the NYPD’s failure to provide non-discriminatory law enforcement protection to trans citizens.

But we suspect that if top management officials in the NYPD, the Corporation Counsel’s office and the De Blasio Administration took the time to read Judge Woods’ summary of White’s factual allegations, they might quickly conclude that it would be prudent to provide appropriate training at the precinct level to NYPD officers on how to deal sensitively with such issues, as a matter of good public policy if not constitutional obligation.  After all, the articulated goal of the city administration is to improve the quality of life of NYC residents by cultivating a collaborative relationship between the citizenry and the law enforcement community.  And, it is possible that the 2nd Circuit will eventually decide that gender identity discrimination is a form of “sex discrimination,” as the 11th Circuit, the EEOC and other federal agencies have concluded, and the activities of the NYPD in this regard will be subjected to heightened scrutiny in appropriate cases.

Federal Court Issues Nationwide Injunction to Stop Federal Enforcement of Title IX in Gender Identity Cases

Posted on: August 22nd, 2016 by Art Leonard No Comments

A federal district judge in Wichita Falls, Texas, has issued a “nationwide preliminary injunction” against the Obama Administration’s enforcement of Title IX of the Education Amendments Act to require schools to allow transgender students to use restroom facilities consistent with their gender identity. Judge Reed O’Connor’s August 22 ruling, State of Texas v. United States of America, Civ. Action No. 7:16-cv-00054-O (N.D. Texas), is directed specifically at a “Dear Colleague” letter dated May 13, 2016, which the Department of Justice (DOJ) and Department of Education (DOE) jointly sent to all the nation’s schools subject to Title IX, advising them of how the government was now interpreting federal statutes forbidding discrimination “because of sex.”  The letter advised recipients that failure to allow transgender students’ access to facilities consistent with their gender identity would violate Title IX, endangering their eligibility for funding from the DOE.

The May 13 letter was sent out shortly after the U.S. Court of Appeals for the 4th Circuit, based in Richmond, had ruled in April that this interpretation by the Administration, previously stated in filings in a Virginia lawsuit, should be deferred to by the federal courts.  G.G. v. Gloucester County School Board, 822 F.3d 709.    That lawsuit is about the right of Gavin Grimm, a transgender boy, to use boys’ restroom facilities at his Gloucester County, Virginia, high school.  The ACLU had filed the case on Grimm’s behalf after the school district adopted a rule forbidding students from using single-sex-designated facilities inconsistent with their “biological sex” as identified on their birth certificates, a rule similar to that adopted by North Carolina in its notorious H.B.2, which is itself now the subject of several lawsuits in the federal district courts in that state.  After the 4th Circuit ruled, the federal district judge hearing that case, Robert Doumar, issued a preliminary injunction requiring that Grimm be allowed access to the boys’ restrooms while the case is pending, and both Judge Doumar and the 4th Circuit Court of Appeals refused to stay that injunction.  However, the U.S. Supreme Court voted 5-3 to grant the school district’s request for a stay on August 3.  Judge O’Connor prominently mentioned the Supreme Court’s action in his opinion as helping to justify issuing his preliminary injunction, commenting that the case presents a question that the Supreme Court may be resolving this term.

Underlying this and related lawsuits is the Obama Administration’s determination that federal laws banning sex discrimination should be broadly interpreted to ban discrimination because of gender identity or sexual orientation. The Administration adopted this position officially in a series of rulings by the Equal Employment Opportunity Commission (EEOC), the agency charged with enforcing Title VII of the Civil Rights Act of 1964, which prohibits sex discrimination in the workplace.  This interpretation was in line with prior decisions by several federal circuit courts, ruling in cases that had been brought by individual transgender plaintiffs to challenge discrimination under the Violence against Women Act (VAWA), the Fair Credit Act (FCA), and Title VII.  These are all “remedial statutes” that traditionally should receive a liberal interpretation in order to achieve the policy goal of eliminating discrimination because of sex in areas subject to federal legislation.  Although the EEOC and other federal agencies had rejected this broad interpretation repeatedly from the 1960s onward, transgender people began to make progress in the courts after the Supreme Court ruled in 1989 that sex-stereotyping by employers – disadvantaging employees because of their failure to comply with the employer’s stereotyped view of how men and women should act, groom and dress – could be considered evidence of sex discrimination, in the case of Price Waterhouse v. Hopkins.  While some of these courts continue to reject the view that gender identity discrimination, as such, is automatically illegal under these statutes, they have applied the sex-stereotype theory to uphold lawsuits by individual transgender plaintiffs, especially those who are discharged in response to their announcement that they will be transitioning or when they begin their transition process by dressing in their desired gender.

The Education Department built on this growing body of court rulings, as well as on the EEOC’s rulings, when it became involved in cases where transgender students were litigating over restroom and locker room access. DOE first expressed this view formally in a letter it sent in connection with a lawsuit against an Illinois school district, participated in negotiating a settlement in that case under which the school district opened up restroom access, and then began to take a more active approach as more lawsuits emerged.  By earlier this year DOE and DOJ were ready to push the issue nationwide after the 4th Circuit’s ruling marked the first federal appellate acceptance of the argument that this was a reasonable interpretation of the existing regulation that allows school districts to provide separate facilities for boys and girls, so long as the facilities are comparable.  DOE/DOJ argue that because the regulation does not specifically state how to resolve access issues for transgender students, it is ambiguous on the point and thus susceptible to a reasonable interpretation that is consistent with the EEOC’s position on workplace discrimination and the rulings that have emerged from the federal courts under other sex discrimination statutes.  Under a Supreme Court precedent, agency interpretations of ambiguous regulations should receive deference from the courts if those interpretations are reasonable.

The May 13 letter provoked consternation among officials in many states, most prominently Texas, where Attorney General Ken Paxton took the lead in forming a coalition of about a dozen states to file this joint lawsuit challenging the DOE/DOJ position. Paxton aimed to bring the case in the federal court in Wichita Falls before Judge O’Connor, an appointee of George W. Bush who had previously issued a nationwide injunction against the Obama Administration’s policy of deferring deportation of undocumented residents without criminal records and had also ruled to block an Obama Administration interpretation of the Family and Medical Leave Act favoring family leave for gay employees to care for same-sex partners.  Paxton found a small school district in north Texas, Harrold Independent School District, which did not have any transgender students but nonetheless adopted a restrictive restroom access policy, to be a co-plaintiff in the case in order justify filing it in the Wichita Falls court.  Shortly after Paxton filed this case, Nebraska Attorney General Doug Peterson put together another coalition of nine states to file a similar lawsuit in the federal district court in Nebraska early in July.

These cases rely heavily on an argument that was first proposed by Alliance Defending Freedom (ADF), the anti-gay “Christian” public interest law firm, in a lawsuit it brought in May on behalf of some parents and students challenging the settlement of the Illinois case, and a “copycat” lawsuit filed by ADF in North Carolina. The plaintiffs argue that the DOE/DOJ position is not merely an “interpretation” of existing statutory and regulatory requirements under Title IX, but rather is a new “legislative rule,” imposing legal obligations and liabilities on school districts.  As such, they argue, it cannot simply be adopted in a “guidance” or “letter” but must go through the formal process for adopting new regulations under the Administrative Procedure Act. This would require the publication of the proposed rule in the Federal Register, after which interested parties could submit written comments, perhaps one or more public hearings being held around the country to receive more feedback from interested parties, and then publication of a final rule, which would be subject to judicial review in a case filed in a U.S. Court of Appeals.  (This is referred to as the “notice and comment” process.) Neither DOE nor any other agency that has adopted this new interpretation of “sex discrimination” has gone through this administrative rulemaking process.  Additionally, of course, the plaintiffs contend that this new rule is not a legitimate interpretation of Title IX, because Congress did not contemplate this application of the law when it was enacted in the 1970s.

In his August 22 ruling, O’Connor concluded that the plaintiffs met their burden to show that they would likely succeed on the merits of their claim, a necessary finding to support a preliminary injunction. As part of this ruling, he rejected the 4th Circuit’s conclusion that the existing statute and regulations are ambiguous and thus subject to administrative interpretation.  He found it clear based on legislative history that Congress was not contemplating outlawing gender identity discrimination when it passed sex discrimination laws, and that the existing regulation allowing schools to provide separate facilities for boys and girls was intended to protect student privacy against being exposed in circumstances of undress to students of the opposite sex.  In the absence of ambiguity, he found, existing precedents do not require the courts to defer to the agency’s interpretation.  He found that the other prerequisites for injunctive relief had been met, because he concluded that if the enforcement was not enjoined, school districts would be put to the burden of either changing their facilities access policies or potentially losing federal money.  He rejected the government’s argument that the lack of any imminent enforcement activity in the plaintiff states made this purely hypothetical.  After all, the federal government has affirmatively sued North Carolina to enjoin enforcement of the facilities access restrictions in H.B.2.

Much of O’Connor’s decision focuses on the question whether the plaintiffs had standing to challenge the DOE/DOJ guidance in a district court proceeding and whether the court had jurisdiction over the challenge. He found support for his ruling on these points in a recent decision by the 5th Circuit Court of Appeals (which has appellate jurisdiction over cases from Texas) in a lawsuit that Texas brought against the EEOC, challenging a “guidance” about employer consideration of applicant arrest records in deciding whether to hire people.  Texas v. EEOC, 2016 WL 3524242.  Noting disparate enforcement of criminal laws against people of color, the EEOC took the position that reliance on arrest records has a disparate impact on people of color and thus potentially violates Title VII.  A 5th Circuit panel divided 2-1 in determining that the state had standing to maintain the lawsuit and that the district court had jurisdiction to rule on the case.   This suggests the likelihood that the Administration may have difficulty persuading the 5th Circuit to overrule O’Connor’s preliminary injunction on procedural grounds if it seeks to appeal the August 22 ruling.

The Administration argued in this case that any preliminary injunction by O’Connor should be narrowed geographically to the states in the 5th Circuit, even though co-plaintiffs included states in several other circuits, but O’Connor rejected this argument, agreeing with the plaintiffs that the injunction should be nationwide.  He emphasized the regulation allowing schools to have sex-segregated restroom facilities.  “As the separate facilities provision in Section 106.33 is permissive,” he wrote, “states that authorize schools to define sex to include gender identity for purposes of providing separate restrooms, locker rooms, showers, and other intimate facilities will not be impacted” by the injunction.  “Those states who do not want to be covered by this injunction can easily avoid doing so by state law that recognized the permissive nature” of the regulation.  “It therefore only applies to those states whose laws direct separation.  However, an injunction should not unnecessarily interfere with litigation currently pending before other federal courts on this subject regardless of state law.  As such, the parties should file a pleading describing those cases so the Court can appropriately narrow the scope if appropriate.”  This reference is directed mainly to the plethora of lawsuits pending in North Carolina, in which the federal government is contending that H.B.2 violates Title IX and Title VII.