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December 19, 1994

JAMES B. KING, Director, U.S. Office of Personnel Management Agency, Defendant.


The opinion of the court was delivered by: CHARLES R. RICHEY

On December 15, 1994, the Court held a hearing on the Defendant's Motion to Dismiss, filed November 4, 1994. The Court is also in receipt of the Plaintiff's Opposition thereto, and the Defendant's Reply. *fn1" Upon careful consideration of the pleadings filed by both parties, the oral argument of counsel, the applicable law, and the entire record in this case, the Court finds that the Defendant's Motion shall be granted.

 The Plaintiff alleges that she was discriminated against on the basis of her mental disability, in violation of Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 ("Section 504"), *fn2" because the health insurance she was offered as a participant in one of the Federal Employees Health Benefit ("FEHB") programs, administered by the United States Office of Personnel Management ("OPM"), provided less coverage for the treatment of mental illnesses than for the treatment of physical illnesses.

 In his Motion to Dismiss, the Defendant argues that, under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Plaintiff fails to state a claim upon which relief can be granted because "a federal agency is allowed to make distinctions in the levels of benefits it offers for physical and mental illnesses in its health plans . . . ." Motion to Dismiss, at 1. The Plaintiff states, in opposition, that the allegations in her Complaint are "clearly sufficient" to state a claim under Section 504. Opposition, at 2. In particular, she contends that the undisputed disparity between the insurance coverage for mental illness versus physical illness under the Plaintiff's FEHB plan creates an inference of discrimination warranting discovery into the criteria used by OPM to formulate the plan at issue. For the reasons discussed herein, however, the Court must agree with the Defendant.


 In 1959, Congress enacted the Federal Employees Health Benefits Act ("FEHBA") to provide medical coverage for United States Government employees, retirees, and eligible members of their families. 5 U.S.C. § 8901 et. seq. Pursuant to the authority granted by the FEHBA, the OPM contracts with various carriers who offer FEHB plans to beneficiaries. The Plaintiff claims that the Foreign Service Benefit Plan ("FSBP"), a plan offered under the FEHB and of which the Plaintiff was a member during 1990 and 1991, discriminates against the Plaintiff and all other mentally disabled participants by "allot[ing] benefits for mental illness that are unequal to benefits for any other illness." Complaint, P 9. The Plaintiff further alleges that she has a mental disability which required hospitalization from November 1989 through December 1991, and that she was prematurely released because the plan would not pay for additional hospitalization.


 Section 504 of the Rehabilitation Act prohibits a federal agency or a federally funded program from denying benefits to handicapped individuals solely on the basis of their disability. *fn3" To establish a prima facie case under § 504, a person must be handicapped under the Act, otherwise qualified to receive or participate in the federally supported benefit or program, and excluded from the benefit solely by reason of her or his handicap. Pesterfield v. Tennessee Valley Authority, 941 F.2d 437, 441 (6th Cir. 1991). At oral argument, counsel for the Defendant conceded for purposes of this motion that the Plaintiff is handicapped and that she is otherwise qualified to participate in the FEHB plan. The Defendant asserts, however, that because all benefits under the plan at issue are available to both mentally and physically handicapped persons, the Plaintiff cannot show that she was excluded from a benefit solely by reason of her handicap. Moreover, the Defendant argues that OPM has broad discretionary authority under the FEHBA to make distinctions in the levels of benefits it offers for various illnesses. 5 U.S.C. §§ 8901-8913.

 The Court must agree. The Supreme Court has provided considerable guidance on this issue -- in the face of virtually no authority supporting the Plaintiff's position. In Traynor v. Turnage, 485 U.S. 535, 99 L. Ed. 2d 618, 108 S. Ct. 1372 (1988), the Court held that the Veterans' Administration could deny extensions of educational assistance benefits to those veterans whose disabilities were attributable to their own "willful misconduct." The Court found that, consistent with the Rehabilitation Act, such individuals were not denied benefits solely by reason of their handicap. Id. at 549. Although the facts of Traynor are distinguishable from those of the instant case, as in Traynor, "this litigation does not involve a program or activity that is alleged to treat handicapped persons less favorably than nonhandicapped persons." Id. at 548. The Supreme Court explained that "there is nothing in the Rehabilitation Act that requires that any benefit extended to one category of handicapped persons also be extended to all other categories of handicapped persons." Id. at 549. Such result, however, is precisely what the Plaintiff seeks here.

 Even prior to Traynor, in Alexander v. Choate, 469 U.S. 287, 83 L. Ed. 2d 661, 105 S. Ct. 712 (1985), the Supreme Court found that Tennessee did not violate Section 504 by reducing the number of inpatient hospital days covered by Medicaid, notwithstanding the alleged need for greater inpatient care for handicapped individuals. The Court reasoned that the Rehabilitation Act "does not . . . guarantee the handicapped equal results from the provision of state Medicaid, even assuming some measure of equality of health could be constructed." Id. at 304.

 Moreover, the Court attempted at oral argument to direct the parties' focus to a fundamental point, raised by Alexander and, in the Court's view, particularly salient here: any interpretation of § 504 must consider, in addition to the statutory objectives, "the desire to keep § 504 within manageable bounds." Id. at 298. Accordingly, the Supreme Court "reject[ed] the boundless notion that all disparate-impact showings constitute prima facie cases under § 504 . . . ." Id. Despite the Court's ardent desire to delve further into the potential injustice perceived by the Plaintiff, the Court cannot ignore Traynor and Alexander and find that the mere disparity in benefits received by different classes of handicapped persons under the FEHB plan at issue creates a cognizable claim under Section 504. To do so would be to accept the "boundless notion" already rejected by the high Court, and to invite challenges to virtually every exercise of OPM's discretion with respect to the allocation of benefits amongst an encyclopedia of illnesses. Upon careful review of the briefs and the relevant law, and after pointed inquiry at oral argument, the Court simply cannot find a feature of the Plaintiff's claim which would warrant an alternative conclusion. *fn4" As the Court is sympathetic to the Plaintiff in view of the obstacles confronting those with mental illnesses in our modern society, however, it is with reluctance that the Court reaches its inevitable conclusion.

 Accordingly, upon careful consideration of the entire record in this case and the applicable law, it is, by the Court, this 19 day of December, 1994,

 ORDERED that the Defendant's Motion to Dismiss, or in the alternative, Motion for Summary Judgment [19-1], dated October 12, 1994, shall be, and hereby is, declared MOOT; and it is

 FURTHER ORDERED that the Defendant's Motion to Dismiss [23-1] dated November 4, 1994, shall be, ...

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