228 F. Supp. 3d 764
N.D. Tex.2017Background
- Plaintiff Charlize Marie Baker, a transgender woman and L-3 employee, sought breast augmentation as medically necessary treatment for Gender Dysphoria and short-term disability (STD) benefits for recovery.
- L-3’s ERISA-qualified Health Plan (administered by Aetna) allegedly covers mastectomy for persons listed as female at birth but excludes breast implants for those listed male at birth; Aetna denied the Health Plan claim on that basis and denied STD benefits as not covering surgery for an "illness."
- Baker sued Aetna and L-3 asserting: (1) §1557 of the ACA discrimination based on gender identity; (2) wrongful denial of ERISA benefits (and an alternative ERISA discrimination theory); and (3) Title VII sex/gender discrimination.
- Defendants moved under Rule 12(b)(6) to dismiss the §1557 and Title VII claims; Aetna also moved to dismiss the ERISA count to the extent it sought discrimination relief.
- The district court assumed factual allegations as true for pleading-stage review and applied Twombly/Iqbal plausibility standards.
- The court dismissed the §1557 gender-identity claim with prejudice as unsupported by controlling precedent, dismissed Baker’s attempt to extend ERISA to cover gender-identity discrimination, dismissed Title VII claims against Aetna (no plausible employer relationship), and allowed Baker’s Title VII claim to proceed against L-3 and her non-discrimination ERISA claim to proceed against Aetna.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1557 of the ACA provides a cause of action for discrimination based on gender identity | §1557 (and Executive Order 13672/Title VII analogies) prohibits denial of care based on gender identity | §1557 does not create a private cause of action for gender-identity discrimination under controlling law | Dismissed with prejudice — no recognized §1557 cause of action for gender identity discrimination |
| Whether ERISA should be read to prohibit gender-identity discrimination (alternative "good faith extension") | ERISA plans commonly overlap with entities subject to §1557; courts should extend ERISA to bar gender-identity discrimination | Creating such a right is legislative, not judicial; Baker’s §1557 theory fails so ERISA cannot be premised on it | Dismissed — court declined to judicially extend ERISA to cover gender-identity discrimination |
| Whether Aetna is liable under Title VII | Aetna acted as L-3’s agent and thus can be treated as employer for Title VII purposes | Aetna was not Baker’s employer; agent theory insufficient because alleged agency related only to benefit administration, not employment practices | Dismissed with prejudice as to Aetna — plaintiff failed to plausibly allege an employer-employee relationship |
| Whether L-3’s denial of benefits constitutes an adverse employment action under Title VII | Denial of medically necessary procedure and associated benefits is an adverse employment action affecting terms/conditions of employment | L-3 contends plaintiff did not allege an adverse employment action (and later argued lack of facial discrimination) | Denied — court found Baker plausibly alleged denial of benefits as an adverse employment action; Title VII claim against L-3 survives |
Key Cases Cited
- Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (gender stereotyping recognized under Title VII)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (Rule 12(b)(6) plausibility standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual content permitting reasonable inference of liability)
- Broussard v. L.H. Bossier, Inc., 789 F.2d 1158 (5th Cir. 1986) (Title VII requires an employment relationship with defendant)
- Deal v. State Farm County Mut. Ins. Co. of Texas, 5 F.3d 117 (5th Cir. 1993) (agency theory for employer status requires authority over employment practices)
- Trevino v. Celanese Corp., 701 F.2d 397 (5th Cir. 1983) (single-employer test for employer status)
- Thompson v. City of Waco, Tex., 764 F.3d 500 (5th Cir. 2014) (examples of adverse employment actions)
- AT & T Co. v. EEOC, 270 F.3d 973 (D.C. Cir. 2001) (EEOC Compliance Manual is persuasive but not binding law)
- Texas v. United States, 201 F. Supp. 3d 810 (N.D. Tex. 2016) (discussing scope of Title IX/Title VII analogues to §1557)