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Ralph Rouse, Jr v. John Berry

March 24, 2012


The opinion of the court was delivered by: Richard W. Roberts United States District Judge


Plaintiff Ralph Rouse, Jr. brings suit against the Director of the Office of Personnel Management ("OPM"), and Long Term Care Partners, LLC ("LTC Partners"), alleging that they engaged in disability discrimination in violation of § 501 of the Rehabilitation Act ("the Act"), 29 U.S.C. § 791, when Rouse was denied standard coverage under the Federal Long Term Care Insurance Program ("FLTCIP").*fn1 The parties have filed cross-motions for summary judgment. No material facts are in dispute and Rouse has failed to carry his burden to establish a triable issue regarding whether the defendants discriminated against him in a non-fringe-benefit aspect of his employment. The defendants therefore are entitled to judgment as a matter of law.


The second amended complaint and the summary judgment filings set forth the following facts as to which there is no genuine dispute. Plaintiff Rouse is an employee of the Department of Health and Human Services who applied for long term care insurance through the FLTCIP. (Second Am. Compl. ¶¶ 6, 13, 15.) Rouse has paraplegia and uses a push wheelchair to assist with mobility. (Id. ¶¶ 11-12.) He revealed this use in his FLTCIP application. (Id. ¶ 16.) The application form stated that an affirmative response to the question of whether he used a medical device, aid, or treatment, such as a wheelchair, would make him ineligible "for any of the insurance options under this program shown in Part F of [the] form" (id.), which included standard coverage. Rouse submitted his application and later received a letter from LTC Partners denying him standard coverage because of his wheelchair use. (Id. ¶¶ 15, 17; Fed. Def.'s Mot. Summ. J., Stmt. of Material Facts Not in Dispute ("Fed. Def.'s Stmt.") ¶ 49.) LTC Partners offered Rouse its alternative coverage option instead. (Fed. Def.'s Mot. Summ. J., Ex. C, Pl.'s Resp. to Req. for Adm'n 11; id., Ex. A ("Kichak Decl.") ¶¶ 20, 36-41.)

Rouse stated in his deposition that he has been treated fairly by the federal government with regard to the job opportunities for which he has applied and been hired over the course of his career. (LTC Partners' Mot. Summ. J. ("LTC Partners' Mot."), Ex. T ("Rouse Dep.") 24:16 to 25:1.) Rouse testified that, as far as he could recall, he has never been denied a promotion for which he applied (Rouse Dep. 76:5-13), and that he has received outstanding or exceptional work evaluations over the years of his employment (Rouse Dep. 77:12-21). He stated that he had never been denied healthcare, life insurance, or vacation hours because of his wheelchair use. (Rouse Dep. 77:22 to 78:19.) Rouse further acknowledged that he has never experienced discrimination in hiring, placement, promotions or other advancement opportunities in connection with or as a result of his being denied long term care insurance under the FLTCIP. (Rouse Dep. 82:3-9.) He nonetheless stated that his denial from standard coverage "caused [him] to really question why the federal government would have entered into something like [FLTCIP]," and that he "felt like it was a discriminatory offering." (Rouse Dep. 79:1-14.) Rouse stated that he feels that "people ought to be judged by their own --the content of their character and the quality of their work and their abilities, rather than being put in a box." (Id.)

The FLTCIP is a long-term care insurance program sponsored by the federal government and administered by LTC Partners that provides benefits for long-term care, including home and community based services and services provided in nursing homes and other institutions. OPM derives authority to establish and administer the FLTCIP from the Long-Term Care Security Act ("LTCSA"), 5 U.S.C. §§ 9001-9009. The Act does not require the FLTCIP to provide universal coverage. 5 U.S.C. § 9002(e)(3) ("Nothing in this chapter shall be considered to require that long-term care insurance coverage be guaranteed to an eligible individual."). Under the program, OPM enters into a "master contract" with a qualified insurance carrier that specifies the benefits, premiums and other terms and conditions of the policies issued by the carrier. 5 U.S.C. § 9003. A federal employee must apply for coverage, and the carrier has discretion to accept or reject the application in accordance with the terms of the master contract. 5 U.S.C. § 9003(c); 5 C.F.R. § 875.407.

After LTCSA was enacted, OPM began the process of establishing a long-term care insurance program and developing underwriting standards for the program. (Kichak Decl. ¶¶ 14-16.) Nancy Kichak, Associate Director for Employee Services and Chief Human Capital Officer at OPM in 2000, when Congress enacted the LTCSA, said that OPM "relied on the industry experience in setting the guidelines OPM would use to manage the risk pool of the FLTCIP," and that OPM used this information to determine how to solicit bids from providers. (Kichak Decl. ¶ 15.) OPM contracted with defendant LTC Partners, a joint venture between qualified carriers John Hancock Life Insurance Company and Metropolitan Life Insurance Company, in order to administer the FLTCIP. (Fed. Def.'s Stmt. ¶ 14.) LTC Partners ultimately determined the conditions for the risk class of individuals eligible for standard insurance coverage based on input from OPM and discussions with experts including underwriters and actuaries employed at John Hancock and MetLife. (LTC Partners' Mot., Stmt. of Material Facts Not in Dispute ("LTC Partners' Stmt.") ¶ 22.) Underwriting is the process of reviewing health and medical information provided during the insurance application process in order to determine whether an application presents a level of risk acceptable to the insurer. (Id. ¶ 8.) The FLTCIP incorporates three general risk classification categories: applicants eligible for standard coverage; applicants eligible for the alternate insurance coverage, and applicants not eligible for any insurance coverage. (Id. ¶ 22.) Wheelchair users were determined to be part of the risk class of individuals automatically ineligible for standard coverage. (Id.)


Summary judgment may be granted when the pleadings, the discovery and disclosure materials on file, and any affidavits show "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."

Fed. R. Civ. P. 56(a); see also Moore v. Hartman, 571 F.3d 62, 66 (D.C. Cir. 2009). Here, where both parties move for summary judgment, the defendants are entitled to judgment in their favor if the plaintiff fails "to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

Section 501 of the Rehabilitation Act provides a cause of action for federal employees alleging disability discrimination. Taylor v. Small, 350 F.3d 1286, 1291 (D.C. Cir. 2003). The standards set forth in Title I of the Americans with Disabilities Act of 1990 ("ADA") apply when determining whether § 501 has been violated in a complaint alleging employment discrimination. See 29 U.S.C. § 791(g) (applying ADA standards to complaints alleging "nonaffirmative action employment discrimination"). Under Title I of the ADA, "[n]o covered entity shall discriminate against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment." 42 U.S.C. § 12112(a). Discrimination includes "participating in a contractual or other arrangement or relationship that has the effect of subjecting a covered entity's qualified applicant or employee with a disability to the discrimination prohibited by this subchapter[.]" 42 U.S.C. § 12112(b)(2).

Although Title I of the ADA generally prohibits employment discrimination against disabled individuals, Congress created an exception to enable organizations to sponsor or provide bona fide benefit plans not subject to state insurance laws even if they offer different terms to disabled individuals, provided, however, that the benefits plan is not "used as a subterfuge to evade the purposes" of the ADA in preventing employment discrimination based on disability. 42 U.S.C. § 12201(c)(3). A plan is bona fide if it "exists and pays benefits." Pub. Employees Ret. Sys. of Ohio v. Betts, 492 U.S. 158, 166 (1989) (internal quotations omitted), superseded by statute, Older Workers Benefit Protection Act of 1990, Pub. L. No. 101-433, 104 Stat. 978. There is no dispute that FLTCIP is a bona fide benefit plan not subject to state laws that regulate insurance. (Pl.'s Opp'n at 5 n.4.) The parties dispute whether the FLTCIP is a subterfuge to evade the purposes of the ADA and therefore whether the safe harbor provision shields the defendants from liability.


The D.C. Circuit has resolved the interpretation of "subterfuge" that courts should employ to determine whether a plaintiff can maintain a discrimination claim against a bona fide benefit plan under the Rehabilitation Act. In Modderno v. King, the Circuit accorded subterfuge its "'ordinary meaning as "a scheme, plan, stratagem, or artifice of evasion."'" 82 F.3d 1059, 1064 (D.C. Cir. 1996) (quoting Betts, 492 U.S. at 167 (quoting McMann, 434 U.S. at 203)). The court adopted this definition from the Supreme Court's decision in Betts, 492 U.S. at 167, which interpreted a substantially similar exception found in the Age Discrimination in Employment Act of 1967 ("ADEA"), 81 Stat. 602, as amended, 29 U.S.C. ยง 621 et seq. The D.C. Circuit considered both the statutory language and legislative history of the ADA to determine whether a different definition than that employed under the ADEA was warranted, but ultimately decided that Congress had intended the definition of "subterfuge" employed in Betts to apply. The Modderno court reasoned that "Betts had been decided . . . before Congress adopted the 'subterfuge' language of ยง 501(c) of the ADA. Thus when Congress chose the term 'subterfuge' for the insurance safe-harbor of the ADA, it was on full alert as to what the Court understood the word to mean and possessed (obviously) a full grasp of the ...

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