43 F.4th 737
7th Cir.2022Background
- Heart of CarDon, LLC (CarDon) is a skilled‑nursing/assisted‑living provider that receives Medicare and Medicaid funds and sponsors a self‑funded employee health plan (the Plan).
- T.S., a minor dependent enrolled in the Plan, has Autism Spectrum Disorder; a physician recommended Applied Behavioral Analysis (ABA) therapy.
- The Plan initially authorized ABA but a new administrator denied further coverage based on a categorical exclusion for autism and ABA, and T.S. lost access to therapy for over a year.
- T.S. sued, alleging intentional disability discrimination under §1557 of the ACA; CarDon moved for judgment on the pleadings arguing T.S. is outside §1557’s zone of interests because he is not an intended beneficiary of CarDon’s federal funds.
- The district court denied CarDon’s motion and certified the order for interlocutory appeal under §1292(b); the Seventh Circuit affirmed, holding T.S falls within §1557’s zone of interests and may proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether T.S. is within §1557’s zone of interests | T.S. was directly subjected to disability discrimination by a healthcare entity and thus is protected by §1557 | Only intended beneficiaries of the federal funds (CarDon’s patients) may sue under §1557 | T.S. is within §1557’s zone; the statute’s text and purpose protect individuals like him |
| Scope of “health program or activity” | Includes all operations of an entity principally engaged in providing healthcare (so the Plan falls within coverage) | §1557 should be limited to the part of operations that actually receives federal funds (patient care) | The statutory phrase covers all operations of an entity principally engaged in healthcare; plain text resolves the issue |
| Whether Simpson (intended‑beneficiary limitation) binds §1557 suits | Simpson is no longer good law after Congress enacted the Civil Rights Restoration Act (CRRA) | Simpson’s intended‑beneficiary rule limits who may sue under the Rehabilitation Act and thus under §1557’s enforcement mechanisms | CRRA effectively abrogated Simpson’s reasoning; Simpson does not control the zone‑of‑interests analysis here |
| Role of HHS regulations/agency deference in defining coverage | Agency rules are unnecessary because the statute’s meaning is clear | HHS interpretations support a narrower or different scope and merit deference | Court declined to rely on agency deference because the statute is clear; HHS rules are consistent with the court’s reading but not required |
Key Cases Cited
- Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (zone‑of‑interests test governs whether a plaintiff may sue under a statute)
- Simpson v. Reynolds Metals Co., 629 F.2d 1226 (7th Cir. 1980) (pre‑CRRA holding that limited Rehabilitation Act suits to intended beneficiaries)
- Consol. Rail Corp. v. Darrone, 465 U.S. 624 (interpreting "program or activity" narrowly under funding statutes)
- Grove City College v. Bell, 465 U.S. 555 (narrow, program‑specific reading of funding‑condition statutes)
- Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 (discussing remedial scope and noting Congress’s power to broaden enforcement)
- Cummings v. Premier Rehab Keller, P.L.L.C., 142 S. Ct. 1562 (confirming §1557 outlaws discrimination by healthcare entities receiving federal funds)