Carparts v. Automotive

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 93-1954
CARPARTS DISTRIBUTION CENTER, INC., ET AL.,
Plaintiffs-Appellants,
v.
AUTOMOTIVE WHOLESALER'S ASSOCIATION
OF NEW ENGLAND, INC., ET AL.,
Defendants-Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Martin F. Loughlin, U.S. District Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Boudin, Circuit Judge.
James P. Reidy, with whom James Q. Shirley and Sheehan
Phinney Bass & Green Professional Association were on brief for
appellants.
Samuel A. Marcosson, Attorney, with whom James R. Neely,
Jr., Deputy General Counsel, Gwendolyn Young Reams, Associate
General Counsel and Vincent J. Blackwood, Assistant General
Counsel were on brief for the Equal Employment Opportunity
Commission, amicus curiae.
William Garza, Cary LaCheen, Herbert Semmel, Thomas
Kendricks on brief for American Civil Liberties Union, Gay and
Lesbian Advocates and Defenders and Gay Men's Health Crisis,
amici curiae.
James H. Schulte, with whom Burns, Bryant, Hinchey, Cox &
Schulte, P.A. was on brief for appellees.
October 12, 1994
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TORRUELLA, Circuit Judge. Plaintiffs-appellants
Carparts Distribution Center, Inc., Daniel W. Dirsh, and Shirley
M. Senter, appeal from the district court's order dismissing
their complaint for illegal discrimination based on disability
under state and federal laws. The court granted judgment under
Fed. R. Civ. P. 12(b)(6) in favor of defendants.
I.
STANDARD OF REVIEW
Our review of dismissal under Fed. R. Civ. P. 12(b)(6)
is plenary. Roth v. United States, 952 F.2d 611, 613 (1st Cir.
1991). We accept as true all of the allegations in the complaint
and draw all reasonable inferences in favor of the plaintiffs.
Id.II.
BACKGROUND
In May 1986, Plaintiff Ronald J. Senter ("Senter") was
diagnosed as infected with Human Immunodeficiency Virus ("HIV
positive"). In March 1991, he was diagnosed as suffering from
Acquired Immune Deficiency Syndrome ("AIDS"). He died on
January 17, 1993.
Senter was the sole shareholder, president, chief
executive director, and an employee of Carparts Distribution
Center, Inc. ("Carparts"), an automotive parts wholesale
distributor incorporated in New Hampshire.
Since 1977, Carparts has been a participant in a self-
funded medical reimbursement plan known as Automotive Wholesalers
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Association of New England Health Benefit Plan ("the Plan")
offered by the defendants in this case, Automotive Wholesalers
Association of New England, Inc. ("AWANE") and its administering
trust, Automotive Wholesalers Association of New England, Inc.
Insurance Plan ("AWANE Plan"). Senter was enrolled in the Plan
since 1977. In October 1990, AWANE Plan informed members of
AWANE, including Carparts, of its intention to amend the Plan in
order to limit benefits for AIDS-related illnesses to $25,000,
effective January 1, 1991. Otherwise, lifetime benefits under
the Plan were, and are, afforded in the amount of $1 million per
eligible plan member.
On a number of occasions during and after 1989, Senter
had several serious illnesses, many of which were HIV or AIDS
related. Senter directly submitted claims for payment of his
medical treatment and medications to AWANE and the AWANE Plan
until spring or summer of 1991, when Carparts submitted the
claims on Senter's behalf because he became too sick or matters
were too complicated for him to do so.
Senter and Carparts ("plaintiffs" or "appellants")
alleged,1 that the Trustees of the Plan were aware of Senter's
condition at the time the amendments to the plan were adopted.
Plaintiffs claim that the cap on AIDS-related illnesses was
instituted by defendants with knowledge that Senter was diagnosed
1 Following Senter's death, Shirley M. Senter and Daniel W.
Dirsh were appointed co-executors for his estate. On April 1,
1993, the district court allowed the substitution of the co-
executors for Senter as plaintiffs in this action.
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HIV positive, suffering from AIDS, and subject to AIDS-related
medical expenses and that the lifetime cap on AIDS related
expenses was instituted in response to Senter's illness and
related claims that he had filed during the previous several
months. According to plaintiffs, after Senter reached the
lifetime cap on AIDS related illnesses, defendants breached their
contractual obligation to provide, at a minimum, medical coverage
to Senter for non-AIDS related treatments, by failing, neglecting
or refusing to make payments for non-AIDS related matters in a
complete or consistent manner.
Plaintiffs brought this action alleging that the
lifetime cap on health benefits for individuals with AIDS,
instituted by defendants, represented illegal discrimination on
the basis of a disability. Such a discriminatory provision
allegedly rendered Carparts responsible for payments to
healthcare providers on Senter's behalf and effectively put
Carparts out of compliance with anti-discrimination laws,
subjecting Carparts to potential liability under N.H. Rev. Stat.
Ann. 354-A ("Section 354-A"), a state anti-discrimination law,
and the Americans with Disabilities Act ("the ADA"), 42 U.S.C.
12101, et seq.
The district court dismissed all of plaintiffs' claims
on July 19, 1993. This appeal followed.
III.
DISCUSSION
A. Notice of Proposed Dismissal
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Plaintiffs first contend that the district court erred
in dismissing their complaint without affording them notice of
the court's intended dismissal. We agree.
Plaintiffs commenced this action in the state courts of
New Hampshire ten days before the ADA became effective. They
asserted claims under state law only. The defendants removed the
case to federal court claiming that the issues raised were
governed and preempted by the Employee Retirement Income Security
Act of 1974, as amended, 29 U.S.C. 1001, et seq. ("ERISA").
At a pretrial conference on April 15, 1993, the
defendants indicated their intention to move to dismiss the
pendent claims, and the plaintiffs moved to amend their complaint
to assert claims under the ADA. The plaintiffs' motion was
granted and they amended their complaint to include, among
others, claims alleging violations of Title I and Title III of
the ADA. 42 U.S.C 12112(a), 12182(a). The defendants filed
an objection to the amendment and the district court treated the
defendants' objection as a motion to dismiss under Fed. R. Civ.
P. 12(b)(6). The court dismissed plaintiffs claims, holding that
neither Title I nor Title III of the ADA applied to this case
because neither defendant, AWANE or AWANE Plan, was an "employer"
with respect to plaintiffs as required by Title I, and that
neither defendant was a "public accommodation" as required by
Title III.
Where no motion to dismiss has been filed, "a district
court may, in appropriate circumstances, note the inadequacy of
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the complaint and, on its own initiative, dismiss the complaint.
Yet a court may not do so without at least giving plaintiffs
notice of the proposed action and affording them an opportunity
to address the issue." Literature, Inc. v. Quinn, 482 F.2d 372,
374 (1st Cir. 1973) (internal citations omitted); see also
Pavilonis v. King, 626 F.2d 1075, 1078 & n.6 (1st Cir.), cert.
denied, 449 U.S. 829 (1980).
Although AWANE filed an objection to plaintiffs' motion
to amend the complaint, and plaintiffs filed a response to
AWANE's objection, neither filing addressed the substantive
issues regarding Title I and Title III of the ADA on which the
district court based its dismissal order. The court also failed
to give plaintiffs any notice of its proposed dismissal, or any
opportunity to respond to the perceived shortcomings in their
complaint regarding their claims under Title I and Title III
prior to the court's order dismissing the case pursuant to Fed.
R. Civ. P. 12 (b)(6). The court's failure to give such notice
alone justifies reversal of this case. See Literature, 482 F.2d
at 374. We also find, however, that the court's dismissal was
erroneous as a matter of law. See id. The district court erred
by interpreting Title I and Title III of the ADA to have
excessively limited applications. Questions regarding the proper
interpretation of the ADA are sure to arise on remand.
Therefore, we feel that timely guidance is appropriate.
B. Title I of the ADA
Plaintiffs contend that the district court erred in
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finding that defendants were not "covered entities" under Title I
of the ADA.
Title I of the ADA, entitled "Employment" provides:
No covered entity shall discriminate
against a qualified individual with a
disability[2] because of the disability
of such individual 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).
"Covered entity" is defined as "an employer, employment
agency, labor organization, or joint labor-management committee."
42 U.S.C. 12111(2).
As the district court noted, this provision "makes it
unlawful for a covered entity to discriminate on the basis of
disability against a qualified individual with a disability in
regard to, among other things, fringe benefits, available by
virtue of employment, whether or not administered by the covered
entity," see 29 C.F.R. 1630.4(f), and "[h]ealth insurance such
as that provided by the defendants is considered a fringe
benefit." Carparts Distribution Ctr. v. Automotive Wholesaler's
Ass'n, 826 F. Supp. 583, 585 (D.N.H. 1993). The district court
found, however, that because neither defendant was an employer of
Senter, neither entity qualified as a "covered entity" as defined
2 For purposes of this appeal, we assume that Senter is a
"qualified individual with a disability." We make no
determination as to whether defendants' cap on benefits in the
present case constitutes "discrimination" based on a disability.
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by the ADA and therefore neither was subject to liability under
Title I of the ADA. We believe that the district court erred by
interpreting Title I of the ADA to permit suits only against
employers who discriminate with respect to the terms and
conditions of employment of their own employees.
In making our determination we look for guidance to the
Civil Rights Act of 1964, as amended, 42 U.S.C. 2000-e, et seq.
("Title VII") and cases interpreting that statute. There is no
significant difference between the definition of the term
"employer" in the two statutes. Compare 42 U.S.C. 2000e(b)
(Title VII) with 42 U.S.C. 12111(5)(A) (ADA).3 The
Interpretive Guidance on Title I of the ADA, published by the
3 Title VII provides:
The term "employer" means a person
engaged in an industry affecting commerce
who has fifteen or more employees for
each working day in each of twenty or
more calendar weeks in the current or
preceding calendar year, and any agent
of such a person . . . except that during
the first year after March 24, 1972,
persons having fewer than twenty-five
employees (and their agents) shall not be
considered employers.
42 U.S.C. 2000(e)(b).
The term "employer" is defined in the ADA as:
A person engaged in an industry affecting
commerce who has 25 or more employees for
each working day in each of 20 or more
calendar weeks in the current or
preceding calendar year, and any agent of
such person.
42 U.S.C. 12111(5)(A).
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Equal Employment Opportunity Commission ("EEOC"), establishes
that the term "employer" is "to be given the same meaning under
the ADA that [it is] given under Title VII."4 56 Fed. Reg.
35,740 (1991) (to be codified at 29 C.F.R. 1630, App.)
(Interpretive Guidance on 1630.2(a)-(f)). See Meritor Savings
Bank, FSB v. Vinson, 477 U.S. 57, 65 (1986) (EEOC's interpretive
guidelines "while not controlling upon the courts by reason of
their authority, do constitute a body of experience and informed
judgment to which courts and litigants may properly resort for
guidance") (internal quotations and citation omitted).
Additionally, Title I of the ADA provides that the "powers,
remedies and procedures" of Title VII shall apply to claims of
discrimination under Title I of the ADA. 42 U.S.C. 12117(a).
The issue before us is not whether defendants were
employers of Senter within the common sense of the word, but
whether they can be considered "employers" for purposes of Title
I of the ADA and therefore subject to liability for
discriminatorily denying employment benefits to Senter. If under
any legal theory defendants could be considered "employers" for
purposes of Title I, then plaintiffs should be given an
opportunity to amend their complaint to allege the facts
establishing the application of that theory to the present case.
Plaintiffs have argued, and we agree, that defendants could be
considered Senter's "employers," and therefore may be subject to
4 The EEOC is the agency entrusted by Congress to administer and
enforce the employment provisions of the ADA. 42 U.S.C.
12116-17.
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liability under Title I, under any one of at least three
theories.
First, defendants would be "employers" if they
functioned as Senter's "employer" with respect to his employee
health care coverage, that is, if they exercised control over an
important aspect of his employment. See Spirt v. Teachers Ins. &
Annuity Ass'n, 691 F.2d 1054, 1063 (2d Cir. 1982), vacated and
rem'd on other grounds, 463 U.S. 1223 (1983), reinstated and
modified on other grounds, 735 F.2d 23 (2d Cir. 1984), cert.
denied, 469 U.S. 881 (1984) (interpreting the term "employer"
under Title VII) ("term 'employer,' . . . is sufficiently broad
to encompass any party who significantly affects access of any
individual to employment opportunities, regardless of whether
that party may technically be described as an 'employer' of an
aggrieved individual as that term has generally been defined at
common law.") (internal quotation and citations omitted); Barone
v. Hackett, 602 F. Supp. 481, 483 (D.R.I. 1984) (court found
director of State agency that administered disability benefits
for State employees liable under Title VII even though agency did
not employ the plaintiffs, stating "Title VII liability is not
limited to the entity which issues pay checks to the employee");
Baranek v. Kelly, 630 F. Supp. 1107, 1113 (D. Mass. 1986) (state
home care agency that had "the 'means and authority' to control
discriminatory employment practices" of regional employers was an
"employer" under Title VII because it "exercise[d] significant
control over an employment situation").
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If AWANE and AWANE Plan exist solely for the purpose of
enabling entities such as Carparts to delegate their
responsibility to provide health insurance for their employees,
they are so intertwined with those entities that they must be
deemed an "employer" for purposes of Title I of the ADA. See
Spirt, 691 F.2d at 1063 (finding that an annuity association and
an equities fund "which exist solely for the purpose of enabling
universities to delegate their responsibility to provide
retirement benefits for their employees, are so closely
intertwined with those universities . . . that they must be
deemed an 'employer' for purposes of Title VII"). Relevant to
this inquiry is whether defendants had the authority to determine
the level of benefits that would be provided to Carparts'
employees and whether alternative health plans were available to
employees through their employment with Carparts. If defendants
had the authority to determine the level of benefits, they would
be acting as an employer who exercises control over this aspect
of the employment relationship.5 Also relevant to this
determination is whether Carparts shares in the administrative
responsibilities that result from its employees' participation in
AWANE and AWANE Plan. See id. Such sharing of responsibilities
would tend to suggest that Carparts and defendants are so
5 In contrast, insurance companies which merely sell a product
to an employer but do not exercise control over the level of
benefits provided to employees could not be deemed "employers"
under this rationale. Where alternative health plans are
available, it could not be said that defendants controlled this
aspect of the employment relationship and therefore, they would
not be deemed "employers" under this rationale.
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intertwined as to be acting together as an "employer" with
respect to health care benefits. Only if the litigation is
allowed to proceed can plaintiffs develop a record to answer
these questions. For purposes of Fed. R. Civ. P. 12(b)(6), the
possibility of a claim is enough to defeat dismissal.
Second, even if the defendants did not have authority
to determine the level of benefits, and even if Carparts retained
the right to control the manner in which the Plan administered
these benefits, defendants would still be rendered "employers" of
Senter if defendants are "agents" of a "covered entity,"6 who
act on behalf of the entity in the matter of providing and
administering employee health benefits.7 Just as "delegation of
responsibility for employee benefits cannot insulate a
discriminatory [retirement benefits] plan from attack under Title
VII," Spirt, 691 F.2d at 1063, neither can it insulate a
discriminatory health benefits plan under Title I of the ADA.
See id. (recognizing that "exempting plans not actually
administered by an employer would seriously impair the
effectiveness of Title VII").
Third, under 102(a) of the ADA, an employer may not
discriminate against a "qualified individual with a disability
. . . in regard to" specified enumerated aspects of employment.
6 The district court found that Carparts is a "covered entity."
7 Like Title VII, Title I of the ADA applies to "any agent" of a
"covered employer." 42 U.S.C. 12111(5)(A) (ADA); Los Angeles
Dept. of Water & Power v. Manhart, 435 U.S. 702, 718 n.33, (1978)
(Title VII).
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42 U.S.C. 12112(a). A number of cases, although not in this
circuit, have interpreted analogous provisions of Title VII to
apply to actions taken by a defendant against a plaintiff who is
not technically an employee of that employer. For example, in
Sibley Memorial Hospital v. Wilson, 488 F.2d 1338, 1341 (D.C.
Cir. 1973), the court applied Title VII to a hospital which
refused to assign a private male nurse to female patients even
though the nurse was technically not an employee of the hospital
but was an employee of a particular patient. We do not want to
be understood as holding at this time that there is automatic
coverage wherever one who is an employer of a requisite number of
persons takes some action that affects the employee of another
entity; a great deal may depend on circumstances. At the same
time, we think it premature to rule out the possibility that when
additional facts are developed, a claim under Title I analogous
to that in Sibley might be made out. See also Christopher v.
Stouder Memorial Hospital, 936 F.2d 870, 875 (6th Cir. 1991),
cert. denied, 112 S. Ct. 658 (U.S. 1991) (interpreting Title VII,
court stated that "a plaintiff is protected if the defendant is
one who significantly affects access of any individual to
employment opportunities") (internal quotations and citations
omitted); Doe on behalf of Doe v. St. Joseph's Hosp., 788 F.2d
411, 422 (7th Cir. 1986) (argument that plaintiff is not an
employee of defendant employer is not dispositive under Title VII
because "[t]here are no indications that [language proscribing
discrimination by an employer against] 'any individual' should be
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read to mean only an employee of an employer").
Plaintiffs alleged that defendants were "covered
entities" for purposes of the ADA. Because the district court
prematurely dismissed plaintiffs' complaint without affording
them an opportunity to address the issues upon which the district
court relied for its dismissal, the record is not sufficiently
complete for us to determine whether defendants were Senter's
employer for purposes of Title I. On remand, plaintiffs should
be given an opportunity to address this issue so that the
district court can make a determination as to defendants' Title I
status.8
C. Title III of the ADA
Title III of the ADA provides:
(a). General Rule. No individual shall
General Rule
be discriminated against on the basis of
disability in the full and equal
enjoyment of the goods, services,
facilities, privileges, advantages, or
accommodations of any place of public
accommodation by any person who owns,
leases (or leases to), or operates a
place of public accommodation.
42 U.S.C. 12182(a).
Prohibited discrimination under Title III includes the
denial, on the basis of disability, of the opportunity to
benefit from the goods, services, privileges, advantages or
8 We recognize defendants' claim that a number of the factual
allegations advanced in the briefs supporting the appeal are not
alleged in the complaint. Our view, however, is that in the
present procedural circumstances the opportunity should have been
given to flesh out the complaint with more detailed allegations.
If on remand the plaintiffs are unwilling or unable to do so,
that will be a quite different matter.
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accommodations of an entity. 42 U.S.C. 12182(b); 28 C.F.R.
36.202.
The district court interpreted the term "public
accommodation" as "being limited to actual physical structures
with definite physical boundaries which a person physically
enters for the purpose of utilizing the facilities or obtaining
services therein." Because the court found that neither of the
defendants possessed those characteristics, it dismissed Senter's
Title III claim. Plaintiffs contend that the district court
erred in finding that Title III of the ADA did not apply to
defendants because they were not places of "public accommodation"
within the meaning of the Act.
Whether establishments of "public accommodation" are
limited to actual physical structures is a question of first
impression in this Circuit. For the following reasons we find
that they are not so limited and remand to the district court to
allow plaintiffs the opportunity to adduce further evidence
supporting their view that the defendants are places of "public
accommodation" within the meaning of Title III of the ADA.
We begin our analysis by looking at the language of the
statute. Sierra Club v. Larson, 2 F.3d 462, 467 (1993). The
definition of "public accommodation" states that "[t]he following
private entities are considered public accommodations for
purposes of this subchapter, if the operations of such entities
affect commerce-" and then provides an illustrative list which
includes a "travel service," a "shoe repair service," an "office
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of an accountant, or lawyer," an "insurance office," a
"professional office of a healthcare provider," and "other
service establishment[s]". 42 U.S.C. 12181(7)(f).9 The plain
meaning of the terms do not require "public accommodations" to
have physical structures for persons to enter. Even if the
meaning of "public accommodation" is not plain, it is, at worst,
ambiguous. This ambiguity, considered together with agency
regulations and public policy concerns, persuades us that the
phrase is not limited to actual physical structures.
By including "travel service" among the list of
services considered "public accommodations," Congress clearly
contemplated that "service establishments" include providers of
services which do not require a person to physically enter an
actual physical structure. Many travel services conduct business
by telephone or correspondence without requiring their customers
to enter an office in order to obtain their services. Likewise,
one can easily imagine the existence of other service
establishments conducting business by mail and phone without
providing facilities for their customers to enter in order to
utilize their services. It would be irrational to conclude that
persons who enter an office to purchase services are protected by
the ADA, but persons who purchase the same services over the
telephone or by mail are not. Congress could not have intended
such an absurd result.
9 The defendants are private entities that operate a self-
insured plan. They have not disputed that their operation
affects commerce.
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Our interpretation is also consistent with the
legislative history of the ADA. The purpose of the ADA is to
"invoke the sweep of Congressional authority . . . in order to
address the major areas of discrimination faced day-to-day by
people with disabilities," 42 U.S.C 12101(b). The ADA was
enacted to "provide a clear and comprehensive national mandate
for the elimination of discrimination against individuals with
disabilities." 42 U.S.C. 12101(b)(1). The purpose of Title
III of the ADA, is "to bring individuals with disabilities into
the economic and social mainstream of American life . . . in a
clear, balanced, and reasonable manner." H.R. Rep. No. 485,
101st Cong., 2d Sess., pt. 2, at 99 (1990), reprinted in 1990
U.S.C.C.A.N. 303, 381. In drafting Title III, Congress intended
that people with disabilities have equal access to the array of
goods and services offered by private establishments and made
available to those who do not have disabilities. S. Rep. No.
116, 101st Cong., 1st Sess. at 58 (1989).
Beyond our threshold determination, we must tread with
care. Some of the critical language of Title III is both general
and ambiguous--for example, a key provision concerns the denial
based on a disability "of the opportunity of the individual or
class to participate in or benefit from the goods, services,
facilities, privileges, advantages, or accommodations of an
entity." 42 U.S.C. 12182(b)(1)(A)(1). As a matter of bare
language, one could spend some time arguing about whether this is
intended merely to provide access to whatever product or service
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the subject entity may offer, or is intended in addition to shape
and control which products and services may be offered. Indeed,
there may be areas in which a sharp distinction between these two
concepts is illusory.
One who simply reads the Committee Report describing
the operations of Title III could easily come away with the
impression that it is primarily concerned with access in the
sense of either physical access to a place of public
accommodation or something analogous, such as access provided
through telephone lines, messengers or some other medium. At the
same time, there is nothing in that history that explicitly
precludes an extension of the statute to the substance of what is
being offered. Suppose, for example, a company that makes and
distributes tools provides easy access to its retail outlets for
persons with every kind of disability, but declines to make even
minor adjustments in the design of the tools to make them usable
by persons with only quite limited disabilities.
The statute's treatment of insurance is a good example
of these ambiguities. On the one hand, the ADA carves out a safe
harbor of sorts for anyone who is "an insurer, hospital, or
medical service company, health maintenance organization, or any
agent, or entity that administers benefit plans, or similar
organizations . . . ." 42 U.S.C. 12201(c)(1). See also id. at
(c)(2), (3). One might initially suppose that this is because
Title III would otherwise cover the substance of the insurance
plans. However, there is some indication in the legislative
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history that the industry received this exemption not because its
policies would otherwise be substantively regulated under Title
III, but because "there is some uncertainty over the possible
interpretations of the language contained in titles I, II and III
as it applies to insurance . . . ." See S. Rep. No. 116, 101
Cong., 1st Sess. at 84 (1989).
We think that at this stage it is unwise to go beyond
the possibility that the plaintiff may be able to develop some
kind of claim under Title III even though this may be a less
promising vehicle in the present case than Title I. Not only the
facts but, as we have already noted, even the factual allegations
are quite sparse. In addition, because of our resolution of the
Title I claims, this case must be remanded and is subject to
further proceedings regardless of whether Title III remains in
the case. While it is tempting to seek to provide further
guidance, the nature of the record and the way the issues are
addressed in the appellate briefs make it imprudent to do so.
Neither Title III nor its implementing regulations make
any mention of physical boundaries or physical entry. Many goods
and services are sold over the telephone or by mail with
customers never physically entering the premises of a commercial
entity to purchase the goods or services. To exclude this broad
category of businesses from the reach of Title III and limit the
application of Title III to physical structures which persons
must enter to obtain goods and services would run afoul of the
purposes of the ADA and would severely frustrate Congress's
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intent that individuals with disabilities fully enjoy the goods,
services, privileges and advantages, available indiscriminately
to other members of the general public.
IV.
MISCELLANEOUS
Plaintiffs also alleged a violation of N.H. Rev. Stat.
Ann. 354(A), referred to as the "Law Against Discrimination,"
and of the Civil Rights Act of 1965, 42 U.S.C. 1985(3).10
Plaintiffs claimed in the district court that Section 354-A
serves as an enforcement vehicle for the ADA and for that reason
should not be preempted by ERISA, 29 U.S.C. 1144. Because the
district court found that the ADA did not apply to defendants, it
reasoned that no disruption in the enforcement of the ADA would
result by holding that Section 354-A is preempted. The court
then found Section 354-A preempted by ERISA with respect to
10 Plaintiffs claimed that Senter, being afflicted with AIDS,
was a member of a discrete and insular minority deserving of
protected class status under 42 U.S.C. 1985(3). Plaintiffs'
Section 1985 claim alleged that defendants conspired to
discriminate against Senter through the institution of a lifetime
cap on AIDS-related medical benefits.
The district court noted that under section 1985(3) "[t]here
must be some racial, or perhaps otherwise class-based,
invidiously discriminatory animus behind the conspirators'
action" and that appellants "must identify a source of
congressional power to reach the private conspiracy alleged. . .
." Carparts Distribution Ctr., 826 F. Supp. at 587 (internal
quotations and citations omitted).
Because the district court ruled that defendants were not
protected by either the employment provisions or the public
accommodation provisions of the ADA, it further found that
appellants failed to identify a source of congressional power to
reach the private conspiracy they alleged and therefore,
dismissed their complaint.
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plaintiffs' cause of action.
The district court's decision to dismiss these claims
was based primarily on its finding that neither the employment
provisions nor the public accommodation provisions of the ADA
applied to defendants. Because we find that the district court
erred in dismissing plaintiffs' ADA claims, we vacate its order
dismissing plaintiffs Section 354-A claim and 42 U.S.C. 1985
and remand these claims to the district court for reconsideration
in light of this opinion.
V.
CONCLUSION
Because the district court dismissed plaintiffs'
complaint without providing notice of its intended dismissal and
erred in interpreting the term "employer" under Title I of the
ADA and in concluding that defendants were not "public
accommodations" under Title III, we hold that the district court
erred in dismissing plaintiffs' complaint.
We vacate the district court's order dismissing
plaintiffs' ADA claims and further order that plaintiffs' claims
under Section 354-A and 42 U.S.C. 1985 claim be reviewed and
reinstated. We remand for proceedings consistent with this
opinion.
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