David Didier Johnson

Two district courts[1] have recently stayed cases alleging that sex discrimination under ACA Section 1557 includes discrimination on the basis of gender identity and denial of coverage for gender transition, pending the Supreme Court’s decision in G.G. v. Gloucester County School Board.[2]  The Supreme Court accepted certiorari in Gloucester in October 2016 to determine the validity of recent Department of Education Title IX guidance regarding gender identity.  Briefing is currently under way.  The district courts stayed the Section 1557 cases, reasoning that the Supreme Court’s decision would likely determine the validity of the Department of Health & Human Services’ Section 1557 regulations on gender identity as well.

ACA Section 1557 and Title IX rules on sex discrimination

Section 1557 (42 U.S.C. § 18116) prohibits entities that receive federal funds for health activities or programs from discriminating on the grounds prohibited by Title IX.  Title IX generally prohibits discrimination on the basis of sex by recipients of federal education assistance.[3]  Title IX, however, permits federal fund recipients to set up “separate living facilities for the different sexes.”[4]  DOE and HHS regulations for Title IX, originally issued by the Department of Health, Education and Welfare, define sex in binary terms – “one sex” versus “the other sex”  —  and permit recipients to set up comparable but separate housing and “toilet, locker room, and shower facilities on the basis of sex.”[5]

The federal agency shift on sex discrimination:  from biological sex to gender identity

In the years prior to the enactment of the ACA, courts reached opposite conclusions as to whether Title IX and comparable sex discrimination laws, such as Title VII, prohibit discrimination based on gender identity.[6]  With the enactment of the ACA and Section 1557, suits began to be brought against health plans and providers which claimed that refusal to treat or cover services for transgender persons based on their gender identity constituted sex discrimination.  In one early Section 1557 decision from 2015, Rumble v. Fairview Health Services, a district court held that Section 1557 does provide a cause of action for discrimination based on gender identity.[7]

In recent years, federal agencies increasingly began to interpret sex discrimination laws as encompassing gender identity.  In April 2014, the Department of Education’s Office for Civil Rights (DOE-OCR) issued Q&A guidance stating that “Title IX’s sex discrimination prohibition extends to claims of discrimination based on gender identity. . .”[8]  In January 2015, an Acting Deputy Assistant Secretary at DOE-OCR wrote a transsexual rights advocate stating that DOE regulations permit sex-segregated restrooms, locker rooms, shower facilities, housing athletic teams and single sex classes. . . .” But “[w]hen a school elects to separate or treat students differently on the basis of sex . . a school generally must treat transgender students consistent with their gender identity.”[9]  In May 2016, DOE-OCR issued a Dear Colleague letter that defined gender identity as “an individual’s internal sense of gender” and stated that schools must treat a student “consistent with the student’s gender identity.”  They also must use pronouns consistent with a student’s gender identity, and allow students access to restrooms, locker rooms, athletics and single-sex classes consistent with their gender identity – regardless of the objections or discomfort of other students.[10]

In May 2012, The Director of HHS Office for Civil Right (HHS-OCR) sent a letter to an advocacy group stating that “Section 1557’s sex discrimination prohibition extends to claims of discrimination based on gender identity. . . .”[11]  In September 2015 and May 2016, HHS-OCR issued proposed and final rules for Section 1557 which provided that discrimination on the basis sex encompasses gender identity.  The Final Rule defined gender identity as “an individual’s internal sense of gender which may be male, female, neither, or a combination of male and female, and which may be different from an individual’s sex assigned at birth.”[12]  It added that sex discrimination includes stereotyping, which includes “expectations of how individuals represent or communicate their gender” and “can include the expectation that individuals will consistently identify with only one gender . . .”[13]  It stated that individuals must be treated [socially] consistent with their gender identity.[14]  The health coverage added that plans may not limit coverage to a transgender person based on the fact that a person’s gender identity differs from their birth sex, and may not have categorical coverage exclusions for gender transition.[15]

Gloucester County:  The Supreme Court takes up the issue

The DOE and HHS pronouncements led to a flurry of lawsuits.  Suits which reached opposite conclusions.  In April 2016, in G.G. ex rel. Grimm v. Gloucester County School Board[16], the Fourth Circuit held that Title IX bars discrimination on the basis of gender identity and held that an injunction should be issued permitting a transgender student to use the restroom consistent with his gender identity.  The court reasoned that while Title IX bars discrimination on the basis of sex, there is ambiguity as to what “sex” means.  Physical determinants such as chromosomes and genitalia do not always work.  Given this ambiguity, DOE-OCR’s January 7, 2015 letter guidance that discrimination on the basis of sex when applied to transgender persons means discrimination on the basis of gender identity was reasonable and entitled to deference.

On August 6, 2016, however, the U.S. Supreme Court stayed the Fourth Circuit’s decision and the subsequent injunction that had been issued by the district court in Gloucester.[17] On October 8, the Supreme Court also accepted certiorari over the case.[18]  The issues the Court will decide include the deference that should be given to DOE’s guidance, and whether the DOE’s interpretations of Title IX and its own regulations should be given effect.  The Supreme Court’s decision is thus likely to settle the issue of whether Title IX prohibits discrimination on the basis of gender identity.

District court issues nationwide injunctions on enforcement of the gender identity rules

In August and December 2016, a District Court for the Northern District of Texas issued nationwide preliminary injunctions enjoining enforcement of DOE’s (and other agencies’) guidance documents, and HHS’s Section 1557 regulations regarding gender identity and gender transition services.  In its August decision in Texas v. United States[19], the court enjoined DOE from enforcing its guidelines.  The court reasoned that DOE had improperly bypassed the notice and comment process required by the Administrative Procedures Act; that the term sex in Title IX was not ambiguous, but when enacted meant “the biological and anatomical differences between male and female students as determined at their birth”; and that the DOE’s new interpretation of the term to include gender identity was not entitled to Auer deference.

In its December decision in Franciscan Alliance v. Burwell[20], the same judge enjoined HHS from enforcing its Section 1557 regulations prohibiting discrimination on the basis of gender identity or termination of pregnancy.  The court reasoned that sex under Title IX and Section 1557 refers to biological and anatomical differences between males and females and that Congress did not delegate to HHS the job of reinterpreting this term.  HHS’ new definition of discrimination on the basis of sex was thus not entitled to Chevron deference.

The agencies’ responses to these injunctions has been varied.  The DOE (and other agencies) filed an appeal of the Texas v United States order to the Fifth Circuit.  They also filed a filed a petition for a stay of the injunction pending resolution of the appeal.  On February 10, however, the DOJ withdrew the petition for stay.  HHS has not filed an appeal of the Franciscan Alliance v. Burwell order.  Rather, HHS-OCR has published a statement on its website indicating that it intends to comply with the injunction.[21]

Waiting for the Supremes:  some courts stay Section 1557 gender identity cases

The Supreme Court’s acceptance of certiorari in Gloucester and the two nationwide stays have also have differing impacts on ongoing litigation.  In a December 2016 decision, the Sixth Circuit refused to stay a pre-existing injunction ordering a school to treat a transgender student as a female and permit her to use the girls’ restroom.[22]  The court reasoned that the fact that the Supreme Court issued a stay in Gloucester was not sufficient to establish a likelihood of success on the merits.

In two other recent decisions, district courts have stayed Section 1557 cases based on gender identity discrimination claims.  In December 2016, in Robinson v. Dignity Health[23], the District Court for the Northern District of California granted a stay of complaint alleging that a hospital system discriminated against an employee by excluding coverage for sex transformation surgery from its health plan.  The court stated that “the key question posed by this litigation is before our highest court.”  In January 2017, in Rumble v. Fairview Health Services[24], the District Court for the Northern District of Minnesota granted a stay of the federal claims brought by a transgender man who alleged that he had been mistreated by a provider based on his transgender status.  The court reasoned that the nationwide injunction issued in Franciscan Alliance meant that the rules in question “were vacated.”[25]  The court added:  “even absent the Franciscan Alliance injunction, the Supreme Court’s review of Gloucester County-involving essentially the same underlying issue of whether Title IX’s prohibition against sex-based discrimination includes gender identity discrimination . . . warrants a stay of these proceedings. . . .”

Concluding thoughts

The Supreme Court’s pending decision in Gloucester is likely to settle whether discrimination on the basis of sex in Title IX (and likely Title VII) and their implementing agency regulations and guidance includes discrimination on the basis of gender identity.  The nationwide injunctions issued by the Texas district court are likely to have the effect of further slowing down litigation on this matter as well – at least until the Supreme Court issues its ruling.  And some courts may be receptive to motions to stay cases regarding gender identity until Gloucester and the nationwide injunctions are resolved.

 


[1] Robinson v. Dignity Health, No. 4:16-cv-03035-YGR, Order Granting Stay; Vacating Case Management Conference; Setting Compliance Hearing (N.D.C. Cal., Dec. 6, 2016); Rumble v Fairview Health Services, No. 0:14-cv-02037-SRN-FLN, Order, (D. Minn., Jan. 30, 2017).  The court in Rumble also based its stay on the injunction issued against enforcement of HHS’ Section 1557 gender identity rules in Franciscan Alliance v. Burwell. 

[2] Gloucester County School Bd. v. G.G. ex rel. Grimm, 137 S.Ct. 369 (Oct. 28, 2016).

[3] 20 U.S.C. § 1681.

[4] Id. at § 1686.

[5] 34 C.F.R. § 106.32-106.33; 45 C.F.R. §§ 86.32-86.33.

[6] See, e.g,. Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000); Etsitty v. Utah Transit Auth., 502 F.3d 1215, 1222 (10th Cir. 2007).

[7] Rumble v. Fairview Health Srvs., No. 14-cv-2037 (SRN/FLN), 2015 WL 1197415 (D. Minn. March 16, 2015).

[8] U.S. Dept. of Education, Office for Civil Rights, Questions and Answers on Title IX and Sexual Violence, April 29, 2014.

[9] Letter from James A. Ferg-Cadima, Acting Deputy Assistant Secretary for Policy, Office for Civil Rights, U.S. Department of Education, January 7, 2015.

[10] U.S. Department of Justice, Civil Rights Division, and U.S. Department of Education, Office for Civil Rights, Dear Colleague Letter on Transgender Students, May 13, 2016.

[11] Letter from Leon Rodriguez, Director, U.S. Department of Health and Human Services, Office for Civil Rights, to Maya Rupert, Federal Policy Director, National Center for Lesbian Rights, July 12, 2012.

[12] 45 C.F.R. § 92.4.

[13] Id.

[14] Id. at § 92.206.

[15] Id. at § 92.207(b)(3)-(5).

[16] G.G. ex rel. Grimm v. Gloucester County School Board, —F.3d—, 2016 WL 1567467 (4th Cir. 2016).

[17] Gloucester County School Board  v. G.G. ex rel Grimm, No.  16A52, 136 S.Ct. 2442 (Mem), 195 L.Ed.2d 888, 85 USLW 3055 (Aug. 6, 2016);

[18] 137 S.Ct. 369 (Mem), 196 L.Ed.2d 283, 85 USLW 320, 285 USLW 3208 (Oct. 8. 2016).

[19] Texas v. United States, No. 7:16-cv-00054-0, Preliminary Injunction Order (N.D.Tex.. Aug, 21, 2016).

[20] Franciscan Alliance v. Burwell, No. 7:16-cv-00108-O, Order, (N. D. Tex., Dec. 31, 2016).

[21] See https://www.hhs.gov/civil-rights/for-individuals/section-1557/

[22] See Dodds v. United States Department of Education, 845 F.3d 217 (6th Cir. 2016).

[23] Robinson v. Dignity Health, No. 4:16-cv-03035-YGR, Order Granting Stay; Vacating Case Management Conference; Setting Compliance Hearing (N.D.C. Cal., Dec. 6, 2016).

[24] Rumble v Fairview Health Services, No. 0:14-cv-02037-SRN-FLN, Order, (D. Minn., Jan. 30, 2017).

[25] Citing Nat’l Mining Ass’n v. U.s. Army Corps. Of Eng’rs., 145 F.3d 1399, 1409 (D.C. Cir. 1998).