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Biden Administration Proposes New Anti-Discrimination Regulations Restoring Protection for LGBTQ Individuals Under the Affordable Care Act

Posted on: July 27th, 2022 by Art Leonard No Comments

The Biden Administration’s Department of Health and Human Services (HHS) proposed new regulations on July 25 to replace the Trump Administration’s regulations issued in 2020 under the anti-discrimination provision of the Affordable Care Act (ACA), Section 1557.  The proposed regulations will not become effective until after a public comment period and subsequent possible revisions in light of the comments received, as required under the Administrative Procedure Act (APA).  The proposed regulations build upon regulations adopted by the Obama Administration in 2016, but they propose new coverage that is even more extensive than those regulations provided.  The Trump Administration regulations sharply cut back on the Obama regulations, including removing protection against discrimination because of gender identity and exempting insurance companies from the anti-discrimination requirements.

The ACA was adopted on a very close party-line vote in 2010, shortly before Republicans gained control of Congress as a result of the mid-term elections during President Obama’s first term.  Because of the complexities of the lengthy and detailed statute, it took several years until the Obama Administration finished finalizing regulations in 2016. One of the most controversial elements of the 2016 regulations was the interpretation of the anti-discrimination provision to ban gender identity discrimination by entities subject to Section 1557, although the regulation was ambiguous about whether this meant that health insurers were required to cover gender-affirming surgery in order to meet the coverage requirements posed by the ACA.  Litigation against the regulation quickly resulted in a preliminary injunction and it never actually went into effect.

The Trump Administration was determined to remove gender identity from the list of prohibited grounds of discrimination, but it took until the spring of 2020 for HHS to published a new proposed regulation to displace the 2016 regulation.  This proposed regulation was published shortly before the Supreme Court ruled in June 2016 in Bostock v. Clayton County that the ban on employment discrimination because of sex under Title VII of the Civil Rights Act of 1964 extended to claims of discrimination because of sexual orientation or gender identity.  The explanatory material accompanying the Trump Administration’s proposed regulation asserted that the inclusion of gender identity in the 2016 regulation was not supported by Section 1557, but noted that a ruling in Bostock was pending.  However, after the Bostock decision was announced, the Trump Administration insisted that its reasoning applied only to Title VII, not to Section 1557.

Section 1557 does not directly list forbidden grounds of discrimination under the ACA.  Instead, it provides that “an individual shall not, on the grounds prohibited under title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975, or section 794 of title 29, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title.”

Title VI of the Civil Rights Act refers to discrimination because of race, Title IX of the Education Amendments refers to discrimination on account of sex, the Age Discrimination Act’s purpose is obvious from its title, and Section 794 of title 29 prohibits discrimination because of disability.  Thus, Section 1557 prohibits discrimination on the basis of race, sex, age, or disability to the extent such discrimination is prohibited under those statutes.

The Trump Administration contended that because the prohibition of sex discrimination under Section 1557 was derived from Title IX of the Education Amendments rather than from Title VII of the Civil Rights Act, the Bostock decision did not apply to it, which was consistent with the Trump Administration’s position that Bostock did not apply to any federal sex discrimination laws except Title VII, and then only in a limited way.  The Department of Education under Trump also maintained that Title IX does not ban educational institutions receiving federal funds from discriminating based on sexual orientation or gender identity, and took that position in litigation under Title IX.  Most, but not all, federal courts that have considered these questions have rejected the Trump Administration’s position.  Thus, although the Education Department under Secretary Betsy Devos stopped processing sexual orientation or gender identity claims by students against educational institutions, individual plaintiffs were filing suit and achieving court victories addressing such discrimination during the Trump Administration, although some conservative judges (especially those appointed by Trump) were rejecting such claims.

When the ACA was enacted in 2010, some federal courts had already begun to recognize gender identity discrimination claims under Title VII, but it was only afterwards that some courts began to recognize gender identity discrimination claims under Title IX as well.  The Obama Administration took an affirmative position on that issue a few years after the ACA was enacted by sending a letter of interest to the U.S. District Court in Virginia that was considering a lawsuit by Gavin Grimm, a transgender boy whose high school refused to let him use the boys’ restroom facilities, so it was not surprising that HHS’s proposed regulations in 2016 took the position that Section 1557 prohibited gender identity discrimination by health care providers and insurers who were subject to Section 1557.  (Gavin Grimm eventually won his case in the U.S. Court of Appeals for the 4th Circuit, whose ruling the Supreme Court refused to review.)

The Equal Employment Opportunity Commission (EEOC) began recognizing gender identity discrimination claims under Title VII in 2012, ruling on a discrimination claim by Mia Macy, a transgender woman, who was denied a job by the Bureau of Alcohol, Tobacco, Firearms and Explosives, a unit of the U.S. Department of Justice.  In 2015, the EEOC first recognized a sexual orientation discrimination claim against the Department of Transportation in a case brought by David Baldwin, a gay air traffic controller.  By the time the Supreme Court ruled in Bostock in 2020, several federal circuit courts had overruled old precedents to hold that sexual orientation and gender identity claims could be brought under Title VII, although the circuit courts were not unanimous on the issue.

The Trump Administration went ahead and published its proposed 2020 regulation, withdrawing coverage of gender identity claims, despite the Supreme Court’s ruling in Bostock.  Although technically Bostock was decided only under Title VII, Justice Neil Gorsuch’s opinion for the Supreme Court employed reasoning that was obviously applicable to all sex discrimination laws.  He proclaimed that it was impossible to discriminate “because of” a person’s sexual orientation or gender identity without taking account of their biological sex, because the very definitions of those concepts necessarily referred to the biological sex of the individual.  He exclaimed that it would be impossible to describe the concepts of “sexual orientation” or “gender identity” without mentioning sex, so discrimination on those grounds necessarily involved taking account of an individual’s sex.  Because Title VII prohibited discriminating “because of” a person’s sex, taking account of a person’s sex in deciding to discharge them (which was the issue in the cases from three circuit courts that the Supreme Court was deciding in Bostock) potentially violated the statute.  Title VII does allow an employer to discriminate based on sex when sex is a “bona fide occupational qualification” for the job in question, but the Supreme Court has ruled that this is a narrow exception to the general rule, and it would not have applied to any of the cases then pending before the Supreme Court in Bostock.

On January 20, 2021, President Biden issued an Executive Order directing federal agencies that enforce sex discrimination laws to follow the reasoning of the Bostock decision, and to issue new guidelines or regulations as necessary to prevent discrimination against LGBTQ people.  A few months later, the Education Department and the Health and Human Services Department had given notice that they would follow the Bostock ruling in enforcing Title IX and Section 1557, and the EEOC has never waivered from its prior rulings under Title VII in the Macy and Baldwin cases.  However, litigation challenging these positions has been filed in federal courts, and preliminary injunctions issued to block enforcement actions by the agencies while the cases are pending. The 2016 regulation adopted by the Obama Administration under Section 1557 was not enforced by the Trump Administration, which had informed the courts that it would not be enforced while they worked on proposing a new regulation to replace it.

Removing gender identity protection was not the only change effected by the Trump Administration’s 2020 regulation.  It also adopted a narrow interpretation of Section 1557, under which it asserted that insurance companies were not covered by the anti-discrimination requirement because they did not deliver health care directly.  It asserted that various exceptions contained in Title IX, for example for religious educational institutions, should be interpreted to carry over as exceptions under Section 1557. It asserted that Section 1557 applied only to entities covered by the ACA, giving a narrow reading to the somewhat ambiguous part of Section 1557 dealing with its scope of application to all health care programs that receive federal money.  The 2020 regulation also repealed various procedural requirements that the 2016 regulation imposed on employers and insurance companies to designate individuals charged with enforcing the anti-discrimination requirements, undertaking training of staff, giving formal notice to individuals about their rights, and setting up formal procedures for dealing with discrimination complaints.

Under the regulations proposed by the Biden Administration, the existing regulations will be amended to explicitly list sexual orientation and gender identity wherever discrimination because of sex is addressed, the Trump Administration’s narrow definition of covered entities and Title IX exception is replaced by a broad reading including insurance companies and going beyond programs established under the ACA, the procedural requirements imposed by the Obama Administration’s 2016 regulation are reinstated, and for the first time HHS is taking the position that Section 1557 applies to Medicare Part B, the health insurance program covering Americans age 65 and older.  It already applies to Medicaid, as well as the health insurance programs adopted by state and local governments for their employees. The regulation does acknowledge, however, that its application is subject to the requirements of the Religious Freedom Restoration Act, which provides an affirmative defense against enforcement by the government that burdens the free exercise of religion, so it is questionable whether the requirement that insurance plans cover gender-affirming treatment will ultimately extend to health care institutions operated by those religious bodies which reject such treatments.

The proposed regulations run to more than 300 very detailed pages in the pdf file released by HHS, which helps to explain why it took 18 months for the Department to come up with this comprehensive proposal.  It will definitely attract litigation, most likely from the same states and associations that attacked the 2016 regulations.  If such litigation eventually rises to the level of the Supreme Court, it will test the willingness of the Court to treat Bostock as a broadly binding precedent.  That case was decided by a 6-3 vote, with Chief Justice John Roberts joining Justice Gorsuch’s opinion, which was also supported by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.  If Roberts and Gorsuch do not back away from the logical extension of Bostock’s reasoning, there would still be at least a 5-4 majority assuming that Justice Ketanji Brown Jackson, the Court’s newest member, and Justices Sotomayor and Kagan would also vote to reaffirm and apply Bostock to Title IX and thus by extension to Section 1557.

Pennsylvania District Judge Refuses to Dismiss Transgender Student’s Title IX and Equal Protection Claims

Posted on: November 24th, 2017 by Art Leonard No Comments

U.S. District Judge Robert D. Mariani denied a school district’s motion to dismiss Title IX and Equal Protection claims by a transgender elementary school student in A.H. v. Minersville Area School District, 2017 U.S. Dist. LEXIS 193622, 2017 WL 5632662 (M.D. Pa., Nov. 22, 2017).  The court rejected the school district’s argument that in light of the Trump Administration’s “withdrawal” of a Guidance issued by the Obama Administration on protection for transgender students under Title IX, the complaint failed to state a valid claim.

A.H., the eight-year-old plaintiff (whose suit was brought by “her next best friend and mother, Tracey Handling”), classified male at birth, “was diagnosed with gender dysphoria while in kindergarten,” wrote Judge Mariani, explaining, “Under the care of a pediatric psychologist, Plaintiff and her family have been exploring ways for Plaintiff to express her gender identity at home, in school, and in the community. . . Since beginning kindergarten in 2014, Plaintiff has continuously presented herself both in and out of school as a female.  Plaintiff uses a female name, dresses in clothing traditionally associated with females, is addressed using female pronouns, and is known to her classmates as a female student.”  Even though A.H.’s mother, supportive of her daughter’s needs, asked that she be allowed to use the girls’ bathroom in school, the School Superintendent, Carl McBreen, said they would not allow it in order to protect the privacy of other students.

This was not a problem during kindergarten, since the kindergarten classroom has a single-use bathroom used by all the students, and the only adverse problem during A.H.’s kindergarten year came during a field trip, when teachers required A.H. to wait until all the boys had used a male-designated bathroom and then allowed A.H. to use that bathroom. “The incident upset Plaintiff and resulted in some of her classmates asking her why she, as a girl, was using the boys’ bathroom.”  A.H.’s mother questioned the principal about this.  His response was that it was “school policy that a child must use the bathroom that corresponds with the sex listed on the child’s birth certificate,” and talked about “protecting” the other students from A.H.  However, despite repeated requests, the school never showed A.H.’s mother an actual written policy.  Her request to allow A.H. to use girls’ bathrooms during A.H.’s first grade year was turned down, with Superintendent McBreen stating that “Minersville isn’t ready for this.”  While giving a school tour to Mrs. Handling, the principal referred to A.H. using male pronouns, even after she corrected him.

After the Obama Administration Guidance was distributed to all public school districts, Superintendent Breen informed Mrs. Handling that her daughter could use the girls’ restrooms at school, but the school “has not created any policy on bathroom access for transgender students.” A.H. filed suit seeking a court order to comply with Title IX and Equal Protection requirements.

In its motion to dismiss the Title IX claim, the school first argued that the Trump Administration’s withdrawal of the Obama Administration Guidance left “no legal basis to support a Title IX claim against the school district for transgender discrimination.” After concisely relating the sequence of events surrounding the Obama Administration Guidance and the Trump Administration withdrawal, Judge Mariani, quoting from Evancho v. Pine-Richland School District, 237 F. Supp. 3d 267 (W.D. Pa. 2017), noted that “The 2017 [Trump Administration] Guidance ‘did not propound any “new” or different interpretation of Title IX or [DOE’s restroom regulation], nor did the 2017 Guidance affirmatively contradict the 2015 and 2016 Guidance documents.”  Indeed, the Evancho court had observed, the 2017 Guidance “appears to have generated an interpretive vacuum pending further consideration by those federal agencies of the legal issues involved in such matters.”

“Thus,” wrote Judge Mariani, “the fact that the Department of Justice and the Department of Education withdrew their interpretation of Title IX does not necessarily mean that a school, consistent with Title IX, may prohibit transgender students from accessing the bathrooms that are consistent with their gender identity. Instead, it simply means that the 2016 Guidance cannot form the basis of a Title IX claim.”  Lacking a binding precedent on this issue from the U.S. Supreme Court or the 3rd Circuit Court of Appeals (which has jurisdiction over federal courts in Pennsylvania), Judge Mariani looked to the 7th Circuit’s decision in Whitaker v. Kenosha Unified School District, 858 F.3d 1034 (7th Cir. 2017), as well as the earlier decision from the Western District of Pennsylvania court in Evancho.  He observed that Title IX courts have looked to precedents under Title VII of the Civil Rights Act for guidance in determining the scope of protection under law banning discrimination because of sex, and that both the 7th Circuit and the Evancho court, following such precedents, had concluded, in the words of the 7th Circuit, that “a policy that requires an individual to use a bathroom that does not conform with his or her gender identity punishes that individual for his or her gender non-conformance, which in turn violates Title IX.”  The 7th Circuit specifically rejected the argument that providing access to a gender-neutral single user restroom is “sufficient to relieve the School District from liability, as it is the policy itself which violates the Act.”  Similarly, the Evancho court, while noting that the law on this issue was currently “clouded with uncertainty,” determined that the transgender student plaintiffs in that case had “made a more than sufficient ‘showing’ in their Complaint of a right to relief under” Title IX.

Mariani pointed out that the Minersville school district had not attempted in its motion to distinguish these precedents or “present any arguments as to why this Court should not follow their holdings. The Court, further, sees no reason why the analysis and holdings of either Evancho or Whitaker are unsound when applied to the facts of this case.”  Mariani concluded, “Contrary to Defendant’s argument, a specific practice need not be identified as unlawful by the government before a plaintiff may bring a claim under Title IX . . .  Further, while the Court recognizes that the Amended Complaint seems to indicate that Plaintiff now has access to the girl’s bathroom at school and thus may not have alleged any continuing violation of Title IX, that does not undercut the fact that Plaintiff has adequately pleaded that a violation of Title IX occurred as some point in time.”  The judge also rejected the school’s argument that it did not, as a matter of law, have any “discriminatory intent” when it acted.  First, he pointed out, discriminatory intent was not a prerequisite to getting injunctive relief, just damages.  And, in any case, statements attributed to school officials could provide a basis for finding discriminatory intent.

Turning to the Equal Protection claim under the 14th Amendment, Judge Mariani found agreement of the parties that heightened scrutiny would apply to judicial review of the school’s alleged policy and its actions.  As to that standard, which requires the defendant to show that the challenged policy serve an important government objective, Judge Mariani found an absence of proof by the school district.  “Here,” he wrote, “Defendant does not advance any important objective that its bathroom policy served.  Instead, Defendant reiterates its argument that, in the absence of guidance from the government, Defendant made all reasonable efforts to accommodate Plaintiff,” but this argument fails.  “Plaintiff has adequately alleged the existence of a school policy that treated her differently on the basis of her transgender status or nonconformity to gender stereotypes.  As such, she has sufficiently stated a claim for relief under the Equal Protection Clause.”  As constitutional discrimination claims require a showing of discriminatory intent, the judge pointed to statements by school officials that adequately serve at this stage of the case as evidence of discriminatory intent.  Judge Mariani noted the similar rulings in Whitaker and Evancho, while also noting a contrary ruling from several years ago by a different district judge in the Western District of Pennsylvania, Johnston v. University of Pittsburgh, 97 F. Supp. 3d 657 (W.D. Pa. 2015), which for some reason the school district never even cited in support of its motion – perhaps because that opinion is somewhat of an embarrassment.

Judge Mariani was appointed to the court by President Barack Obama in 2011.

A.H. and her mother are represented by David L. Deratzian of Hahalis & Kounoupis PC in Bethlehem, Pennsylvania.

Supreme Court Blocks Utah Marriages Pending 10th Circuit Decision

Posted on: January 6th, 2014 by Art Leonard 2 Comments

This morning, the U.S. Supreme Court issued the following order:

MONDAY, JANUARY 6, 2014
ORDER IN PENDING CASE
13A687 HERBERT, GOV. OF UT, ET AL. V. KITCHEN, DEREK, ET AL.
The application for stay presented to Justice Sotomayor and
by her referred to the Court is granted. The permanent
injunction issued by the United States District Court for the
District of Utah, case No. 2:13-cv-217, on December 20, 2013, is
stayed pending final disposition of the appeal by the United
States Court of Appeals for the Tenth Circuit.

This says everything but leaves many questions. First, Justice Sotomayor referred the application for the stay to the full Court, as most observers expected her to do, and that decision on her part really needs no explanation. Second, the Court granted the application, to the extent of holding that the federal district court’s injunction is stayed until “final disposition of the appeal by the United States Court of Appeals for the Tenth Circuit.” The Court, as is normal practice, did not give any explanation as to how this application met the criteria it has used in the past to determine whether a trial court ruling in a constitutional case should be stayed by the Supreme Court when both the trial court and the court of appeals have denied the same application. When the Supreme Court is not unanimous on one of these stay applications, there is occasionally a dissenting opinion by one or more of the Justices, which can shed some light on the discussion, if any, between the justices, but there is no indication of that.

So one can at best speculate as to why this action was taken. In my previous discussion after the opposing memo was filed by the plaintiffs, I suggested that if the Court decides this based on the legal criteria it had used in the past, the stay would be denied, but if they decided it based on realpolitik, the stay would be granted. Is anybody surprised which governed here? My thinking on this is also affected by the discussion I heard yesterday at the AALS Section on Sexual Orientation and Gender Identity issues program at the AALS annual meeting in New York. At least one prominent legal scholar read the Windsor case as not really signaling a readiness by the Court to embrace marriage equality as a 14th Amendment requirement on the states. Even though Justice Kennedy’s opinion in Windsor (the DOMA case) spoke a lot about the federal government’s obligation to respect the dignity of same-sex married couples by not discriminating against them in determining federal rights and obligations, this scholar emphasized that the court spoke of that dignity as something that had been conferred by the state when it opened up marriage to same-sex couples, and that the opinion had several references to the traditional role of the state in defining marriage. If that view, drawn from a close reading of Kennedy’s decision by a legal scholar who is, at least politically, disposed to support marriage equality, accurately describes the limits of Kennedy’s support for marriage equality, then perhaps the Court concluded that the state of Utah had shown that its chances of prevailing on the merits of the appeal are decent enough to support staying the injunction pending a final appellate ruling in the case.

The important and immediate question this brief Order does not address is: What is the status of the approximately 1,300 same-sex marriages that were licensed and performed in Utah between December 20 and January 3? Are they presumed to be valid and entitled to be treated as valid by the federal and state and local governments during this interim period of the appeal? This is an immensely practical question, because we are about to launch into tax filing season for the 2013 tax year, and those couples who married by the end of business on Dec. 31 need to know which tax status they use, single or married, in filing their federal and state income tax returns and, possibly, estate tax returns, if somebody who married in 2013 has already passed away before the end of that year. Those who married out of state already know that they must file their federal returns for 2013 as “married,” since the IRS is using the place of celebration rule to determine tax filing status, but they don’t necessary know how to file their Utah state returns. Those who married in Utah over recent weeks need to be advised as to both issues. Similarly, there are likely to be questions arising over the next few months until the 10th Circuit rules as to whether those already married will be treated as married by the federal and state governments for a range of issues, including Social Security survivor benefits, for example, Family and Medical Leave Act benefits, and so forth. As for state law, the administration of Gov. Herbert had advised state agencies that marriages contracted over the past few weeks should be fully recognized for such things as spousal benefits for state employees. Whether that remains true for marriages performed prior to the issuance of the stay needs to be clarified quickly.

The Obama Administration needs to quickly address the issue of federal recognition for the existing marriages, and the Utah government should also issue clarifying statements as soon as possible.