Labor & Employment Law Daily Class cert granted for transgender professor challenging health plan’s denial of transition-related surgical care
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Thursday, June 18, 2020

Class cert granted for transgender professor challenging health plan’s denial of transition-related surgical care

By Tulay Turan, J.D.

On the same day the Supreme Court issued its landmark decision finding that Title VII protects transgender employees from discrimination, the court certified a class of transgender individuals.

A transgender professor can proceed as a class action on his Title VII and Equal Protection sex discrimination claims based on the State of Arizona’s self-insured health insurance plan’s refusal to cover transition-related surgical care, a federal district court in Arizona held. Concluding that he satisfied the four requirements of Rule 23(a), the court adopted the magistrate’s Report and Recommendation (R&R) in full, and granted the professor’s motion for class certification (Toomey v. State of Arizona, June 15, 2020, Marquez, R.).

Hysterectomy coverage denied. The plaintiff is a transgendered man employed as an associate professor at the University of Arizona. “[H]e has a male gender identity, but the sex assigned to him at birth was female.” He had been living as a male since 2003 and his treating physicians recommended he receive a hysterectomy as a medically necessary treatment for his gender dysphoria. He receives health insurance from a self-funded health plan provided by the State of Arizona. The plan generally provides coverage for medically necessary care but there are exclusions, including “gender reassignment surgery.”

Discrimination claims. After the plan denied him medical preauthorization for the hysterectomy, he filed a lawsuit contending the plan’s exclusion was sex discrimination under Title VII and a violation of his rights under the Equal Protection Clause of the Fourteenth Amendment.

In June 2019, a magistrate recommended that the plaintiff be allowed to proceed with his Equal Protection claim but that his Title VII claim be dismissed, reasoning that the latter claim failed as a matter of law because discrimination based on a person’s transsexual status is not discrimination based on sex. The district court, in a December 2019 ruling, disagreed, finding that the employee alleged a sufficient factual and legal basis to survive dismissal. It granted the plaintiff’s objection to the R&R, rejected the report in part, and denied the defendants’ motion to dismiss in its entirety. (The court also pointed out that the legal question was teed up at the U.S. Supreme Court, although it denied the state of Arizona’s bid to stay the proceedings pending the final High Court outcome.).

Class action. On March 6, 2020, the employee filed the pending motion seeking class certification. For the Title VII claim, he proposed the following class: “Current and future employees of the Arizona Board of Regents who are or will be enrolled in the self-funded Plan controlled by the Arizona Department of Administration, and who have or will have medical claims for transition related surgical care.”

For the Equal Protection claim, he proposed a class of “Current and future individuals (including Arizona State employees and their dependents), who are or will be enrolled in the self-funded Plan controlled by the Arizona Department of Administration, and who have or will have medical claims for transition-related surgical care.”

The state defendants filed a response challenging his showing on the numerosity requirement.

Numerosity. Addressing the first requirement of Rule 23(a), the magistrate found the numerosity prerequisite was satisfied. The professor relied on demographic studies, including one from the Williams Institute showing “approximately 0.62% of Arizonans identify as transgender.” Based on additional surveys, he estimated that approximately 82 percent of individuals either have had or want to have surgery and concluded that “approximately 181 such transgender individuals work for the Board of Regents and approximately 700 such transgender individuals receive health care through the State’s self-funded Plan.”

The magistrate found the professor’s efforts at approximating the size of the class were generally reasonable. The percentage of transgender individuals reported by the Williams Institute study was sufficiently reliable based on the description of its methodology. The magistrate did find, however, that the professor overestimated the size of the class by neglecting to account for the probability that a transgender individual will seek surgery while covered by the state’s health plan. The magistrate noted that some of the 82 percent had surgery before becoming state employees and some will have surgery after leaving employment. Thus, those individuals do not fall within the class. Recognizing that it was a difficult calculation to make, the magistrate wrote, “Even if Toomey is overestimating the size of his class by a factor of four, his class is still too numerous for joinder to be practicable.” Thus, the numerosity requirement was met.

Other Rule 23(a) requirements. The defendants did not contest the remaining Rule 23(a) requirements. As to commonality, the legal issues are the same for all class members. Regarding typicality, the magistrate found the claims as to the facial illegality of the state’s health plan exclusion are “coextensive with those of the absent class members.” Lastly, the adequacy prerequisite was met because there was no conflict of interest and the professor’s counsel has a demonstrated history of representing the interests of transgender individuals and prosecuting civil rights class actions.

Certification. The magistrate concluded the motion for class certification should be granted. The four requirements for class certification were met. In addition, the state’s health plan exclusion for gender reassignment surgery applied generally to the class and injunctive relief would be appropriate if that exclusion is shown to be in violation of Title VII or the Equal Protection Clause.

No objections to the R&R were filed and after reviewing it, the briefs, and the record, the district court ordered the R&R to be accepted and adopted in full. It also granted the motion to certify the class.

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