Granda v. CALPERS ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 SARA GRANDA, an individual; JOSE No. 2:21-cv-01256-MCE-KJN GRANDA, an individual, 12 Plaintiffs, 13 MEMORANDUM AND ORDER v. 14 CALIFORNIA PUBLIC EMPLOYEES’ 15 RETIREMENT SYSTEM; and DOES 1- 10, inclusive, 16 Defendants. 17 18 19 Through the present lawsuit, Plaintiffs Sara Granda and Jose Granda allege they 20 have been discriminated and/or retaliated against for seeking the medical 21 reimbursement needed to procure skilled nursing services through a policy of health 22 insurance issued by Defendant California Public Employees’ Retirement System 23 (“Defendant” or “CalPERS”). Plaintiffs assert a single cause of action for Violation of 24 Title II of the Americans with Disabilities Act , 42 U.S.C. §§ 12131, et seq. (“Title II of the 25 ADA”). 26 /// 27 /// 28 /// 1 CalPERS now moves for judgment on the pleadings, pursuant to Federal Rule of 2 Civil Procedure 12(c),1 on grounds that Plaintiffs have not stated a viable claim for 3 violation of Title II. As set forth below, that Motion is DENIED.2 4 5 BACKGROUND 6 7 Plaintif Sara Granda (“Sara”) was rendered a paraplegic as a result of a motor 8 vehicle accident that occurred in 1997 when she was 17. Because she is ventilator 9 dependent, Sara needs 24-hour a day skilled nursing assistance as opposed to non- 10 licensed caregiving/attendant care in order to reside at home. Compl., ECF No. 1, ¶ 18. 11 Given her permanent disability, Sara is perpetually at high risk of life-threatening medical 12 complications if the appropriate skilled nursing care is not provided. 13 Plaintiff Jose Granda (“Jose”) has been employed at California State University, 14 Sacramento for more than 37 years. As such, he is enrolled in the CalPERS system and 15 receives health care coverage through CalPERS for himself and his family. Because 16 Sara became disabled prior to the age of 26, she qualifies under Jose’s insurance as a 17 disabled dependent. In addition, Sara is also an employee of the State of California 18 herself, having worked as an attorney for the Department of Health Care Services for the 19 past 11 years. Id. at ¶ 11. 20 Sara alleges that, given the acuity of her condition, she needs access to 21 consistent care in order to avoid hospitalization. She claims that under the terms of an 22 agreement reached with CalPERS in approximately 1998, the agency facilitated the 23 provision of appropriate health care at home by converting dollars available under its 24 policy for skilled nursing care to be administered at Sara’s own residence. Id. at ¶ 22. 25 After 2014, however, the incidence of Sara’s hospitalizations escalated dramatically with 26 1 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless otherwise noted. 27 2 Having determined that oral argument would not be of material assistance, the Court submitted 28 this matter on the briefs in accordance with the provisions of E.D. Local Rule 230(g). 1 six separate admissions between 2014 and 2021. Sara alleges those hospitalizations 2 could have been avoided had appropriate and consistent health care been provided to 3 her at home. Id. at ¶ 19. 4 According to the Complaint, the problem rests with the fact that the CalPERS 5 reimbursement rate for her care is 40-50% less than the market rate for comparable 6 skilled nursing services in the greater Sacramento area. This discrepancy has been 7 compounded by the high demand for nurses generally as a result of the COVID-19 crisis. 8 The low rates Sara is able to provide have resulted, she claims, in constant turnover and 9 retraining that have adversely affected her care and increased her rate of hospitalization, 10 all imperiling her ability to live at home in the least restrictive environment. Sara asserts 11 that CalPERS’ refusal to increase the reimbursement rates for the skilled nursing care 12 she needs constitutes discrimination on the basis of her disability. 13 In 2020, these shortcomings prompted Plaintiffs to seek modification of the 1998 14 agreement so as to protect Sara’s access to appropriate services. Jose has advocated 15 on his daughter’s behalf and claims that CalPERS has retaliated against him by 16 attempting to interfere with his efforts in that regard by prohibiting his direct 17 communication with CalPERS’ Board of Administration. Id. at ¶¶ 29-30. 18 As indicated above, Plaintiffs’ Complaint, filed on July 16, 2021, contains a single 19 cause of action for violation of Title II of the ADA. Defendant moves for judgment on the 20 pleadings on grounds that the circumstances of Plaintiffs’ claim are not cognizable under 21 Title II since they do not involve discrimination in the provision of public services, but 22 instead are employment-related and therefore redressable, if at all, only under Title I. 23 24 STANDARD 25 26 Under Rule 12(c), “a party may move for judgment on the pleadings” after the 27 pleadings are closed “but early enough not to delay trial.” A motion for judgment on the 28 pleadings pursuant to Rule 12(c) challenges the legal sufficiency of the opposing party’s 1 pleadings. See, e.g., Westlands Water Dist. v. Bureau of Reclamation, 805 F. Supp. 2 1503, 1506 (E.D. Cal. 1992). Any party may move for judgment on the pleadings under 3 Rule 12(c) after the pleadings are closed but within such time as to not delay trial. 4 The standard for evaluating a motion for judgment on the pleadings is essentially 5 the same as the standard applied to a Rule 12(b)(6) motion. Dworkin v. Hustler 6 Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). A motion for judgment on the 7 pleadings should only be granted if “the moving party clearly establishes on the face of 8 the pleadings that no material issue of fact remains to be resolved and that it is entitled 9 to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 10 896 F.2d 1542, 1550 (9th Cir. 1989) (internal citation omitted). Judgment on the 11 pleadings is also proper when there is either a “lack of cognizable legal theory” or the 12 “absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. 13 Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). In reviewing a Rule 12(c) 14 motion, “all factual allegations in the complaint [must be accepted] as true and 15 construe[d] . . . in the light most favorable to the non-moving party.” Fleming v. Pickard, 16 581 F.3d 922, 925 (9th Cir. 2009). Judgment on the pleadings under Rule 12(c) is 17 warranted “only if it is clear that no relief could be granted under any set of facts that 18 could be proved consistent with the allegations.” Deveraturda v. Globe Aviation Sec. 19 Servs., 454 F.3d 1043, 1046 (9th Cir. 2006) (internal citations and quotation marks 20 omitted). 21 Courts have discretion to grant leave to amend in conjunction with motions made 22 pursuant to Rule 12(c). Lonberg v. City of Riverside, 300 F. Supp. 2d 942, 945 (C.D. 23 Cal. 2004) (citation omitted). Generally, leave to amend a complaint is denied only if it is 24 clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. 25 Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). 26 /// 27 /// 28 /// 1 ANALYSIS 2 3 Title II of the ADA prohibits discrimination in the provision of public services and 4 specifies, inter alia, that no qualified individual with a disability shall, “by reason of such 5 disability,” be excluded from participation in, or be denied the benefits of, a public entity’s 6 services, programs or activities. 42 U.S.C. § 12132. As part of Title II’s protections, the 7 Attorney General was instructed to issue regulations implementing the proscriptions 8 against discrimination contained within Title II. Id. at § 12134(a). One of those 9 regulations, the so-called “integration” mandate, requires a “public entity [to] 10 administer . . . programs . . . in the most integrated setting appropriate to the needs of 11 qualified individuals with disabilities.” 28 C.F.R.§ 35.130(d). Another regulation calls for 12 public entities to “make reasonable modifications” to avoid “discrimination on the basis of 13 disability.” Id. at § 35.130(b)(7). 14 In Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999), the Supreme Court 15 recognized that these provisions require that disabled individuals be placed into a 16 community setting, provided the individuals would benefit and such placement can be 17 reasonably accommodated. As the court reasoned, the “[i]nstitutional placement of 18 persons who can handle and benefit from community settings perpetuates unwarranted 19 assumptions that persons so isolated are incapable or unworthy of participating in 20 community life” and thereby qualifies as discrimination. Id. at 583. Instead, recognizing 21 Title II’s integration mandate, Olmstead noted that services to the disabled “should be 22 provided in the setting that is least restrictive of the person’s personal liberty.” Id. at 599. 23 In the present matter, Plaintiffs allege that Defendant’s refusal to provide 24 reimbursement adequate to cover the skilled nursing care Sara needs runs afoul of the 25 integration mandate recognized by Olmstead. This is because, according to Plaintiffs, 26 the rates for such care authorized by CalPERS are inadequate to ensure that Sara 27 receives the consistent care necessary to live at home and work as an attorney at the 28 California Department of Health Services. Because Sara has successfully been able to 1 both live at home and work over the past 11 years provided such care is afforded to her, 2 Plaintiffs assert that the integration mandate and Olmstead’s holding make Defendant’s 3 refusal to accommodate the care she requires qualify as discrimination. 4 Plaintiffs argue that Sara’s ventilator-dependent status, and the fact that without 5 skilled nursing care at home she has to be hospitalized in an acute-care facility, meaning 6 that she indeed is subject to an undue risk of institutionalization (through hospitalization) 7 if her at-home services are compromised. As indicated above, Plaintiffs rely entirely on 8 Title II in bringing the present lawsuit to protect Sara’s rights in that regard. Plaintiffs 9 claim that even if Defendant’s insurance coverage provides the same skilled nursing 10 reimbursement to the disabled and non-disabled alike, under Olmstead a facially neutral 11 provision can still qualify as discrimination under Title II if it fosters unnecessary isolation 12 and therefore violates the integration mandate applicable to disabled individuals. Id. 13 at 597. 14 CalPERS inexplicably attempts to distinguish Olmstead’s applicability to the case 15 at bar by arguing that it “has never been applied in the context of employment 16 discrimination.” Def.’s Reply, ECF No. 15, 2:17-18. Plaintiffs’ complaint, however, 17 makes it perfectly clear that this case is about disability discrimination, so trying to 18 circumvent Olmstead’s reach on that basis has no merit . Additionally, contrary to 19 Defendant’s suggestion otherwise, Plaintiffs’ complaint has the averments necessary to 20 state a claim for disability discrimination. Not only does Sara claim that she needs 21 consistent skilled nursing care to avoid a restrictive placement within the confines of an 22 acute care hospital, she also argues that she has in fact been hospitalized over the last 23 seven years because of problems occasioned by her difficulty in securing dependable 24 care given CalPERS’ limited reimbursement levels. In addition, as a paraplegic needing 25 the assistance of a ventilator to breathe, there can be no question that Sara is disabled. 26 Even if Sara has stated a viable claim for disability discrimination under Olmstead, 27 however, CalPERS still argues that she cannot come within the confines of Title II and 28 accordingly argues for dismissal on that basis as well. Defendant correctly points out 1 that Title II was enacted to remedy discrimination against the disabled in the provision of 2 public services. See, e.g., Tennessee v. Lane, 541 U.S. 509, 524-25 (2004). CalPERS 3 claims that Title II is inapplicable because Title I of the ADA, addresses discrimination “in 4 regard to job application procedures, the hiring, advancement, or discharge of 5 employees, employee compensation, job training, and other terms, conditions, and 6 privileges of employment” and accordingly applies to the present dispute. 42 U.S.C. 7 § 12112(a). According to CalPERS, the gravamen of Plaintiffs’ Complaint implicates 8 Title I and not Title II because the insurance CalPERS provides to Sara is attributable to 9 Plaintiff Jose Granda’s state employment. The Court disagrees. 10 As support for its position, CalPERS relies largely on the Ninth Circuit’s decision 11 in Zimmerman v. Oregon Dep’t of Justice, 170 F.3d 1169 (9th Cir. 1999), where the 12 court addressed the interplay between the types of disability discrimination subject to 13 Title I and Title II. The court found that Congress did not intend Title II to apply to 14 employment because such employment was not commonly considered a “service, 15 program, or activity of a public entity” so as to come within Title II. The court went on to 16 reason that Title II is intended to address an “output” of a public agency that an 17 individual would expect to receive as opposed to an “input” like the staffing/employment 18 necessary to facilitate provision of the public services by the agency. 19 While CalPERS argues that Zimmerman is on all fours with the present matter, 20 the Court disagrees. The plaintiff in Zimmerman claimed he was terminated by the 21 defendant, a public entity, because of a disabling eye condition that left him visually 22 impaired. Id. at 1171. Here, on the other hand, neither Sara nor Jose were employees 23 of CalPERS. Nor is there an employment practice like job termination involved. As 24 Plaintiffs point out, every case cited by CalPERS for the proposition that Zimmerman is 25 controlling involved a plaintiff who was either a current or former employee of the 26 defendant involved, and whose claims arose from actions taken or not taken within the 27 employment context by that employer. See, e.g., Ahmed v. Regents of Univ. of 28 California, No. 17cv00709-MMA (NLS), 2018 WL 747796 at *12 (S.D. Cal. Feb. 7, 2018) 1 (plaintiff, an employee of the University of California, was denied leave to assert a Title II 2 claim on grounds that any such amendment would be futile under Zimmerman); Kitchen 3 v. Lodi Unified Sch. Dist., No. 2:14-cv-01436 WBS-EFB, 2014 WL 5817320 at * 3-4 (E.D. 4 Cal. Nov. 5, 2014) (“plaintiff’s claims arise from her employment with defendant”); 5 Allford v. Barton, No. 1:14-cv-00024-AWI JLT, 2015 WL 2455138 at *7 (E.D. Cal. 6 May 22, 2015) (because the plaintiff’s claims arose from a prior employment relationship 7 with the defendant, he could not assert a claim under Title II). 8 The analysis provided by Zimmerman that is instructive in the present matter is 9 the distinction it draws between the “output” and “input” of a public agency in deciding 10 whether Title II applies to a particular disability discrimination claim. In finding that Title II 11 did not apply to employment by a public entity, the court interpreted Title II’s proscription 12 against denial of benefits afforded by “the services, programs or activities of a public 13 entity” as extending to such benefits and services as an “output” of the public entity 14 (what the public entity does) rather than to an “input” like employment by the public entity 15 allowing it to fulfill its particular mission. Zimmerman, 170 F.3d at 1174. 16 Here, on the other hand, not only is CalPERS not Plaintiffs’ employer, its very 17 purpose is to provide benefits, including insurance coverage, to public employees. 18 Therefore, unlike Zimmerman, the provision of such benefits is in fact the “output” of 19 CalPERS making Plaintiffs’ claims cognizable under Title II. In Hason v. Medical Bd. of 20 California, 279 F.3d 1167 (9th Cir. 2002), a case decided after Zimmerman, the Ninth 21 Circuit reiterated this distinction. There, the plaintiff sued the Medical Board on grounds 22 that its refusal to provide him with a license to practice medicine violated, inter alia, 23 Title II. In reversing the district court’s dismissal of plaintiff’s Title II claim for failure to 24 state a claim, the Ninth Circuit found that “[a]lthough medical licensing does occur within 25 the employment context, medical licensing is not equivalent to employment” since the 26 “Medical Board does not make employment decisions.” Id. at 1172. In applying the 27 input/output distinction utilized by Zimmerman, the court found that “[m]edical licensing is 28 /// 1 | without a doubt something that the Medical Board ‘does’, and that accordingly it is 2 | indeed an “output” of the Board subject to Title Il. Id. at 1173 3 Here, like Hason, the provision of insurance coverage is unquestionably 4 | something that CalPERS “does.” As such, it is an “output” of CalPERS as a public 5 | agency and therefore Plaintiffs herein can state a claim under Title || against CalPERS 6 | for discrimination due to disability. This is particularly true given Hason’s recognition 7 | that remedial legislation like the ADA should be construed “broadly in order to effectively 8 | implement the ADA’s fundamental purpose of “providing a clear and comprehensive 9 | national mandate for the elimination of discrimination against individuals with 10 | disabilities.” Id. (internal citation omitted). 11 Finally, with respect to Jose’s claim that he was retaliated against for advocating 12 || on his daughter's behalf and can accordingly state a claim under Title II for retaliation on 13 | that basis, Defendant’s assertion that he cannot state a viable cause of action is equally 14 | unavailing. Title Il extends to individuals who allege, like Jose, that they were retaliated 15 | against for attempting to protect the rights of a disabled person like Sara. See Barker v. 16 | Riverside Cty. Off. Of Educ., 584 F.3d 821, 827 (9th Cir. 2009). 17 18 CONCLUSION 19 20 For all the above reasons, Defendant CalPERS’ Motion for Judgment on the 21 | Pleadings (ECF No. 11) is DENIED. 22 IT IS SO ORDERED. 23 | Dated: August 9, 2022 Matw LEK ee NK 8 SENIOR UNITED STATES DISTRICT JUDGE 26 27 3 This cuts against CalPERS’ argument that Title Il should be foreclosed simply because “but for” Jose’s employment with the state, Sara would not be qualified to receive insurance coverage under 28 | CalPERS as his disabled dependent.