341 F. Supp. 3d 979
W.D. Wis.2018Background
- Plaintiffs are two transgender women and Wisconsin state employees who were denied insurance coverage for gender-confirming surgery (GCS) and certain hormone-related care because the Government Insurance Board's (GIB) Uniform Benefits include an exclusion for “procedures, services, and supplies related to surgery and sex hormones associated with gender reassignment.”
- ETF (Employee Trust Fund) administers state employee plans and recommended removal of the exclusion after concluding ETF was a "covered entity" under the ACA; GIB voted to remove the exclusion in July 2016 but then reconsidered and reinstated it in December 2016/January 2017 subject to four contingencies.
- Plaintiffs sued under Title VII, Section 1557 of the ACA (anti-discrimination provision), and the Equal Protection Clause (42 U.S.C. § 1983), seeking damages and injunctive relief; cross-motions for summary judgment were filed.
- Medical experts disagree on efficacy and medical necessity of GCS and hormone therapy; major medical associations recognize transition-related care as medically necessary for some with gender dysphoria; defendants’ expert criticized the evidence but his deposition expanded beyond his written report.
- Actuarial evidence showed removal of the exclusion would have a negligible cost impact (estimates ranged roughly $140,000–$300,000 annually; <0.2% of total premiums).
- The court denied motions to strike plaintiffs’ experts’ supplemental reports, found Title VII and ACA liability for sex discrimination, applied heightened scrutiny under the Equal Protection Clause but granted qualified immunity to individual defendants for damages; a jury trial will resolve damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the exclusion constitutes sex discrimination under Title VII and ACA §1557 | Exclusion discriminates by denying coverage based on natal sex and enforces sex‑stereotypes against transgender persons | Exclusion targets procedures (not sex) and is analogous to cosmetic exclusions applied regardless of sex | Court: Exclusion is sex discrimination (treats transgender people differently based on natal sex / sex stereotyping) — plaintiff wins on Title VII and §1557 |
| Whether ETF and GIB are proper defendants under Title VII/ACA | ETF and GIB control plan benefits and so are proper defendants/agents of the State employer | GIB lacks 15 employees; ETF merely administers plans and is not the employer | Court: ETF and GIB are proper defendants (ETF acts as agent/employer for benefit decisions) |
| Whether the State is immune from ACA suit under Eleventh Amendment | Plaintiffs: acceptance of federal funds waived immunity under 42 U.S.C. §2000d‑7 for federal anti‑discrimination statutes including §1557 | Defendants: Spending Clause waiver does not reach transgender claims; Eleventh Amendment bars suit | Court: Waiver applies; Eleventh Amendment immunity rejected for §1557 claims |
| Equal protection: level of review and justification for reinstating exclusion | Plaintiffs: classification is sex‑based (or requires heightened scrutiny) and defendants lack genuine important reasons | Defendants: only rational‑basis review applies; justifications are cost savings and concerns about efficacy/safety | Court: heightened scrutiny applies; defendants failed to show genuine, non‑post hoc justifications (cost negligible; efficacy concerns unsupported); Equal Protection claim succeeds in substance but individual defendants entitled to qualified immunity for damages |
Key Cases Cited
- Flack v. Wisconsin Department of Health Services, 328 F. Supp. 3d 931 (W.D. Wis. 2018) (analyzed Medicaid exclusion for transition‑related care and sex‑discrimination theory)
- Whitaker v. Kenosha Unified Sch. Dist. No. 1 Bd. of Educ., 858 F.3d 1034 (7th Cir. 2017) (treatment of transgender students as sex stereotyping; applied heightened scrutiny aspects)
- Hively v. Ivy Tech Community College of Ind., 853 F.3d 339 (7th Cir. 2017) (recognition that Title VII prohibits sexual‑orientation discrimination)
- United States v. Virginia, 518 U.S. 515 (1996) (established "exceedingly persuasive" standard for sex‑based classifications)
- Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (sex‑stereotyping recognized as sex discrimination)
- Ariz. Governing Comm. v. Norris, 463 U.S. 1073 (1983) (employee benefits are part of terms and conditions of employment under Title VII)
- Geduldig v. Aiello, 417 U.S. 484 (1974) (rational‑basis review in sex‑classification context; court relied on whether classification is sex‑based)
- Alexander v. Sandoval, 532 U.S. 275 (2001) (principles for implied private right of action under federal statutes)
- Pearson v. Callahan, 555 U.S. 223 (2009) (qualified immunity framework)