990 N.W.2d 661
Iowa
2023
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Background

  • Petitioners Aiden Vasquez and Mika Covington, two adult transgender Medicaid beneficiaries, sought preauthorization for gender-affirming “bottom” surgeries; their managed care organization denied coverage citing Iowa Admin. Code r. 441—78.1(4) and a 2019 amendment to the Iowa Civil Rights Act (Iowa Code § 216.7(3)).
  • After administrative appeals (ALJ and DHS director affirming denials), they filed consolidated judicial-review actions under the Iowa Administrative Procedure Act (IAPA, ch. 17A) in Polk County district court.
  • The district court concluded transgender people are a quasi-suspect class, applied heightened scrutiny, and held both the Regulation and the ICRA amendment violated the Iowa Constitution’s equal-protection guarantee; the court denied petitioners’ request for attorney fees.
  • DHS did not appeal the district-court ruling invalidating the Regulation but appealed the ruling on the ICRA amendment; subsequently DHS agreed to pay for the two plaintiffs’ surgeries, rendering the direct appeal moot as to those litigants.
  • The Iowa Supreme Court dismissed DHS’s direct appeal as moot and affirmed the district court’s denial of attorney fees on cross-appeal, holding the fee-shifting provisions of the ICRA do not apply to chapter 17A judicial-review actions and that statutory provisions (Iowa Code § 625.29(1)(b) and (d)) bar fees here.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Mootness of DHS’s direct appeal of the ICRA amendment Vasquez/Covington: court should decide constitutionality because Regulation and ICRA amendment are intertwined DHS: appeal is moot because DHS agreed to pay plaintiffs’ surgeries and did not appeal the Regulation ruling Dismissed direct appeal as moot; court declined to reach constitutional merits because DHS’s concession ended the live controversy
Whether the court should decide constitutionality of Iowa Code § 216.7(3) given intertwined Regulation Plaintiffs: statute facially violates equal protection by exempting denials of coverage for transgender people DHS: statute clarifies ICRA does not require providing sex-reassignment surgery; legislature may narrow protections Court declined to rule on constitutionality (mootness + poor vehicle; reserved for future cases)
Availability of ICRA fee-shifting in this proceeding Plaintiffs: ICRA allows attorney fees and should apply DHS: proceeding is a chapter 17A judicial-review action, not an action under the ICRA Held ICRA fee-shifting does not apply because plaintiffs did not bring an ICRA action and did not exhaust ICRA procedures
Availability of attorney fees under Iowa Code § 625.29(1) in chapter 17A review Plaintiffs: seek fees under general chapter 17A fee statute DHS: statutory exceptions bar fees here (state acted in adjudicative role; action concerned entitlement to monetary benefits) Affirmed denial of fees: fees barred by § 625.29(1)(b) (state primarily adjudicative) and (d) (proceeding determining entitlement to monetary benefit)

Key Cases Cited

  • Pinneke v. Preisser, 623 F.2d 546 (8th Cir. 1980) (earlier Eighth Circuit invalidating informal Medicaid exclusion for sex-reassignment surgery)
  • Smith v. Rasmussen, 249 F.3d 755 (8th Cir. 2001) (upholding codified Regulation where agency followed rulemaking and record)
  • Good v. Iowa Dep’t of Human Servs., 924 N.W.2d 853 (Iowa 2019) (Iowa Supreme Court held the Regulation violated the ICRA’s statutory ban on gender-identity discrimination; avoided constitutional questions)
  • Riley Drive Ent. I, Inc. v. Reynolds, 970 N.W.2d 289 (Iowa 2022) (mootness principles and when exceptions should not be applied)
  • Homan v. Branstad, 864 N.W.2d 321 (Iowa 2015) (mootness and advisory-opinion analysis)
  • Endress v. Iowa Dep’t of Hum. Servs., 944 N.W.2d 71 (Iowa 2020) (agency acting in an adjudicative role precludes fee awards under § 625.29(1))
  • Colwell v. Iowa Dep’t of Hum. Servs., 923 N.W.2d 225 (Iowa 2019) (same principle regarding adjudicative role and fee limits)
  • Gibson v. Collier, 920 F.3d 212 (5th Cir. 2019) (noting lack of medical consensus on efficacy/necessity of sex-reassignment surgery)
  • Kosilek v. Spencer, 774 F.3d 63 (1st Cir. 2014) (en banc) (discussing medical controversy over sex-reassignment surgery)
  • Grimm v. Gloucester Cnty. Sch. Bd., 972 F.3d 586 (4th Cir. 2020) (example of a court applying intermediate scrutiny in transgender-rights contexts)
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