Health Law Daily Sovereign immunity partially shields hospital but transgender’s ACA sex discrimination claim continues
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Friday, July 30, 2021

Sovereign immunity partially shields hospital but transgender’s ACA sex discrimination claim continues

By Wendy Biddle, J.D.

Transgender man clearly stated claim for sex discrimination under the ACA.

The district court in Maryland struck down a transgender man’s First Amendment and Equal Protection challenges against the University of Maryland St. Joseph Medical Center for cancelling his hysterectomy, finding the hospital was an arm of the state and therefore has sovereign immunity. The court did allow the claim under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) to go forward, finding the plaintiff sufficiently stated a claim for sex discrimination (Hammons v. University of Maryland Medical System Corp., July 28, 2021, Chasanow, D.).

Jesse Hammons claimed he was denied a hysterectomy, a commonly performed medical procedure, at the University of Maryland St. Joseph Medical Center because he is transgender. The taxpayer-owned hospital claimed that providing the plaintiff with medical care would be a violation of their religious beliefs. Although the plaintiff’s surgeon initially agreed to do the procedure, within days of the scheduled surgery date, the hospital’s Chief Medical Officer ordered the surgery cancelled because it violated the Catholic Directives.

When the University of Maryland Medical System purchased St. Joseph Hospital in 2012, it entered into a written agreement with the Catholic Church that the hospital would continue to operate under the Catholic Directives. St. Joseph Medical Center, LLC is a wholly owned subsidiary of University of Maryland St. Joseph Health System LLC, which itself is a wholly owned subsidiary of University of Maryland Medical System Corp. According to the plaintiff, the State of Maryland exercises authority and control over the University of Maryland Medical System (UMMS).

The plaintiff brought a three-count complaint alleging that, because UMMS is an arm of the state, the defendants impermissibly have endorsed and entangled themselves with the Catholic religion and discriminated on the basis of sex. He alleged that they violated: the Establishment Clause of the First Amendment, the Equal Protection Clause of the Fourteenth Amendment, and § 1557 of the ACA, as discrimination on the basis of sex.

Standing. The hospital contended that the plaintiff did not have standing to bring the suit because the injury caused by the cancellation was not traceable to nor redressable by them. They argued that it was the surgeon, not the hospital, that caused the injury because the surgeon arranged the surgery in the first place, knowing it was impermissible under the Catholic Directives.

The court was unpersuaded. It found that the facts did not establish that the surgeon had actual knowledge the surgery would be prohibited by the hospital under the Catholic Directives. it is reasonable to infer that the surgeon knew that he was required to comply with the Catholic Directives. But that did not amount to knowledge that the plaintiff’s scheduled hysterectomy was contrary to the Directives.

The court also noted that the hospital’s argument misapplied the traceability requirement. Traceability requires only that plaintiff’s injury be "‘fairly traceable’" to the defendants’ conduct. The plaintiff was to undergo a procedure at St. Joseph that, according to the plaintiff, was medically necessary. It is undisputed that the cancellation of that surgery constituted an injury in fact, the court noted. The hospital’s Chief Medical Officer ordered the surgery canceled. So the court held that the cancellation of the surgery was caused, at least in part, by the hospitals’ reliance on the Directives and application of the Directives in this case. The court held that the plaintiff had standing.

Arm of government. Defendants argued that the suit targeted private conduct rather than state action or action taken under color of state law. The plaintiff alleged that the UMMS not only owns the hospital LLCs as subsidiaries but is also actively involved with their management and governance and because of this, the cancellation of his surgery constituted a state action.

The court used the factors in Lebron v. Nat’l R.R. Passenger Corp., 513 U.S. 374 (1995) to determine if the government created and controlled UMMS. The court found the first two Lebron elements were easily met: the UMMS was created by special law and in furtherance of a governmental objective of providing medical care to citizens of the state. The court also found the third element to be satisfied, all directors of the UMMS were appointed by the governor and approved by the state senate.

So, under Lebron, the court found that UMMS is a governmental entity, that is, an arm or instrumentality of government satisfying the state action requirement of the Fourteenth Amendment and the color of law requirement of 42 U.S.C. § 1983.

Sovereign immunity. After finding that the state action requirement was satisfied, the court turned to determine if the hospital had sovereign immunity. The plaintiff argued that the UMMS is not an arm of the state for purposes of sovereign immunity or if it is, the Maryland legislature waived its immunity. Here, the court evaluated the factors laid out in Ram Ditta v. Md. Nat. Cap. Park & Planning Comm’n, 822 F.2d 456, (4th Cir. 1987); (1) whether the state treasury will be responsible for paying any judgment that might be awarded; (2) whether the entity exercises a significant degree of autonomy from the state; (3) whether it is involved with local versus statewide concerns; and (4) how the entity is treated as a matter of state law.

The court noted that the first element is the most important, and in this case, the hospital asserted that the state would not pay for any judgment against UMMS, strongly suggesting that UMMS is not an arm of the state. In discussing the second and fourth elements, the court concluded that UMMS may function like an independent medical system in some aspects, but it is tethered to the state government and subject to state oversight, leaning toward the conclusion that it is an arm of the state. Also the court concluded that the third element also weighs heavily on concluding it’s an arm of the state because the purpose is clearly to provide care to all citizens. The court ultimately held that UMMS is an arm of the state for purposes of sovereign immunity.

The court also found that no exception to immunity applied, finding that the state had not expressly waived its immunity from suit in federal court. The court therefore held that the defendants are shielded by sovereign immunity on the §1983 claims.

ACA claim. Section 1557 of the ACA prohibits discrimination on the basis of sex and denial of benefits on the basis of sex. In Bostock, the Supreme Court held that discrimination on the basis of homosexuality or transgender status necessarily constitutes discrimination on the basis of sex, which is prohibited under Title VII, and the Title VII establishes a but-for causation standard. The court denied the hospitals motion to dismiss, finding that the plaintiff clearly alleged that his hysterectomy was cancelled and that therefore he was denied necessary medical treatment, purely because of his transgender status, and thus because of his sex.

The case is No. 1:20-cv-020888-DKC.

Attorneys: Abigail E. Marion (Patterson Belknap Webb and Tyler LLP) for Jesse Hammons. Denise Elizabeth Giraudo (Sheppard Mullin Richter & Hampton LLP) for University of Maryland Medical System Corp. and University of Maryland St. Joseph Medical Center, LLC.

Companies: University of Maryland Medical System Corp.; University of Maryland St. Joseph Medical Center, LLC

MainStory: TopStory HealthReformNews MarylandNews

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