Rouse v. Springer

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
RALPH ROUSE, JR., )
)
Plaintiff, )
)
v. ) Civil Action No. 06-2088 (RWR)
)
JOHN BERRY, et al., )
)
Defendants. )
______________________________)
MEMORANDUM OPINION AND ORDER
Plaintiff Ralph Rouse, Jr. brings claims against the
Director1 of the Office of Personnel Management (“OPM”), and Long
Term Care Partners, LLC (“LTC Partners”), alleging that they
violated § 501 and § 504 of the Rehabilitation Act, codified
respectively at 29 U.S.C. § 791 and 29 U.S.C. § 794, when Rouse
was denied the opportunity to participate in the Federal Long
Term Care Insurance Program (“LTCIP”). The Director and LTC
Partners have moved to dismiss the complaint under Federal Rule
of Civil Procedure 12(b)(6), asserting that 1) Rouse has failed
to plead a claim upon which relief can be granted under § 501
because he has not alleged sufficient facts to show that the
benefits plan is a subterfuge for discrimination, and that 2)
Rouse, as a government employee, cannot bring a claim under
§ 504. OPM and LTC Partners’ motions to dismiss will be granted
1
John Berry is substituted for Linda Springer under Fed.
R. Civ. P. 25(d).
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in part and denied in part because Rouse has pled sufficient
facts to allege a claim plausibly entitling him to relief under
§ 501, but he cannot bring a claim under § 504 since he is a
federal employee.
BACKGROUND
Rouse, an employee of the Department of Health and Human
Services, applied for long term care insurance through the LTCIP.
(Second Am. Compl. ¶¶ 6, 13, 15.) LTCIP is sponsored by OPM and
administered by LTC Partners. (Id. ¶ 14.) Rouse has paraplegia
and uses a push wheelchair to assist with walking. (Id. ¶¶ 11-
12.) He revealed this use in his LTCIP 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.) Rouse submitted his application and later received
a letter from LTC Partners denying his coverage because of his
wheelchair use. (Id. ¶¶ 15, 17.) Rouse brings his action under
both § 501 and § 504 of the Rehabilitation Act, claiming that the
defendants unlawfully discriminated against him because of his
disability when they rejected his LTCIP application.
The OPM Director and LTC Partners have moved to dismiss the
complaint under Fed. R. Civ. P. 12(b)(6), arguing that Rouse has
failed to allege sufficient facts that demonstrate that the
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administration of the plan was a subterfuge to evade the purposes
of the Rehabilitation Act under § 501, and that federal employees
are prohibited from bringing claims under § 504. (OPM’s Mem. in
Supp. of Renewed Mot. to Dis. (“OPM’s Mem.”) at 7, 16; LTC
Partners’ Mem. in Supp. of Renewed Mot. to Dis. (“LTC Mem.”) at
8, 14.) Rouse argues that he has pled all the facts necessary to
state a claim under § 501 and that, as a “participant in a
program or activity conducted by an Executive agency[,]” he also
has a cognizable claim under § 504 even though he is a federal
employee. (Pl.’s Mem. in Opp’n to Def. John Berry’s Renewed Mot.
to Dis. (“Pl.’s OPM Opp’n”) at 7, 11-12 (internal quotation marks
omitted); Pl.’s Mem. in Opp’n to Def. LTC Partners’ Renewed Mot.
to Dis. at 7-8.)
DISCUSSION
Section 501 provides a cause of action for federal employees
alleging disability discrimination under the Rehabilitation Act,
Taylor v. Small, 350 F.3d 1286, 1291 (D.C. Cir. 2003), while
§ 504 “prohibits a federal agency or a federally funded program
from denying benefits to handicapped individuals solely on the
basis of their disability.” Modderno v. King, 871 F. Supp. 40,
42 (D.D.C. 1994). The standards under Title I of the Americans
with Disabilities Act of 1990 (“ADA”) apply when determining
whether § 501 and § 504 of the Rehabilitation Act have been
violated in a complaint alleging employment discrimination. See
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29 U.S.C. § 791(g) (applying ADA standards to complaints alleging
“nonaffirmative action employment discrimination”); 29 U.S.C.
§ 794(d). 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.”2 42 U.S.C. § 12112(a).
I. SECTION 501
Federal Rule of Civil Procedure 8(a)(2) requires that a
complaint contain only “a short and plain statement of the claim
showing that the pleader is entitled to relief[.]” Fed. R. Civ.
P. 8(a)(2). There is ordinarily no need for a plaintiff to plead
detailed factual allegations, as the rule simply “‘contemplate[s]
[a] statement of circumstances, occurrences, and events in
support of the claim presented[.]’” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 n.3 (2007) (quoting 5 C. Wright & A. Miller,
Federal Practice and Procedure § 1202, at 94 (3d ed. 2004)). A
plaintiff is not required to plead in his complaint all elements
of a prima facie case, or “plead law or match facts to every
element of a legal theory.” Miller v. Insulations Contractors,
2
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).
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Inc., 608 F. Supp. 2d 97, 106 (D.D.C. 2009) (quoting Krieger v.
Fadely, 211 F.3d 134, 136 (D.C. Cir. 2000) and citing
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002)) (internal
quotation marks and citation omitted). “[O]nce a claim has been
stated adequately, it may be supported by showing any set of
facts consistent with the allegations in the complaint.”
Twombly, 550 U.S. at 563. Accord, Aktieselskabet AF 21. Nov.
2001 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008). But
see Tooley v. Napolitano, 586 F.3d 1006, 1007 (D.C. Cir. 2009)
(declining to reject or address the government’s argument that
Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), invalidated
Aktieselskabet). A complaint should contain enough factual heft
to show an entitlement to relief. Twombly, 550 U.S. at 557.
That is, a complaint needs to plead “only enough facts to [nudge]
a claim to relief . . . across the line from conceivable to
plausible[.]” Id. at 570. “Determining whether a complaint
states a plausible claim for relief will . . . be a context-
specific task that requires the reviewing court to draw on its
judicial experience and common sense.” Iqbal, 129 S. Ct. at
1950.
In the context of a fairly straightforward employment
discrimination complaint, plaintiffs traditionally have not been
subject to a heightened pleading standard. Swierkiewicz, 534
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U.S. at 512.3 The D.C. Circuit has long recognized the ease with
which a plaintiff claiming employment discrimination can survive
a Rule 12(b)(6) motion to dismiss for failure to state a claim
upon which relief may be granted. “‘Because racial
discrimination in employment is a claim upon which relief can be
granted, . . . “I was turned down for a job because of my race”
is all a complaint has to state to survive a motion to dismiss
under [Rule] 12(b)(6).’” Potts v. Howard Univ. Hosp., 258 Fed.
Appx. 346, 347 (D.C. Cir. 2007) (quoting Sparrow v. United Air
Lines, Inc., 216 F.3d 1111, 1115 (D.C. Cir. 2000)). Rouse raises
a straightforward federal employee discrimination claim,4 and the
question is whether his § 501 claim pleads enough facts to set
forth a plausible claim.
3
Indeed, Twombly explicitly disavowed any retreat from
Swierkiewicz, see Twombly, 550 U.S. at 569-70, and Iqbal did not
even discuss Swierkiewicz, much less disavow it.
4
The factual context of Rouse’s complaint presents no
complexities such as a Sherman Act conspiracy class action
complaint alleging certain anti-competitive parallel conduct but
no factual context suggesting agreement as distinct from
identical independent action, Twombly, 550 U.S. at 548-49, or a
damages claim under Bivens v. Six Unknown Fed. Narcotics Agents,
403 U.S. 388 (1971), that high officials entitled to assert a
qualified immunity defense directed plaintiff’s detention
purposefully on account of his race and religion in violation of
clearly established law under the Free Exercise Clause of the
First Amendment and the Due Process Clause of the Fifth
Amendment. Iqbal, 129 S. Ct. at 1943-45, 1948.
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Despite its general intention to prohibit employment
discrimination against disabled individuals as expressed in Title
I of the ADA, Congress created an exception so that organizations
can sponsor or provide bona fide benefit plans not subject to
state insurance laws even if they offer different terms to
disabled individuals. 42 U.S.C. § 12201(c)(3) (stating that
Title I shall not be construed to prohibit or restrict “a person
or organization covered by this chapter from establishing,
sponsoring, observing, or administering the terms of a bona fide
benefit plan that is not subject to State laws that regulate
insurance”).5 This exception, commonly referred to as a safe
harbor provision, allows a bona fide benefits plan to exist even
if it would otherwise violate the ADA. However, the exception
does not allow an organization to administer a benefits plan that
is “used as a subterfuge to evade the purposes” of the ADA in
preventing employment discrimination based on disability. 42
U.S.C. § 12201(c).
The D.C. Circuit has looked to Pub. Employees Ret. Sys. of
Ohio v. Betts, 492 U.S. 158, 165 (1989), superceded by statute,
Older Workers Benefit Protection Act of 1990, Pub. L. No. 101-
433, 104 Stat. 978, as recognized in EEOC v. Aramark Corp., Inc.,
5
The parties agree that of the three exceptions in 42
U.S.C. § 12201(c), exception (c)(3) applies to LTCIP, which is
not subject to state laws. (OPM’s Mem. at 7; Pl.’s OPM Opp’n at
8.)
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208 F.3d 266, 271 (D.C. Cir. 2000), which involved a similar
exception found in the Age Discrimination in Employment Act of
1967, 81 Stat. 602, as amended, 29 U.S.C. § 621 et seq, for
guidance when determining whether a plan is a subterfuge for
discrimination. Modderno v. King, 82 F.3d 1059, 1064 (D.C. Cir.
1996) (applying Betts in the Rehabilitation Act context).
Subterfuge is defined as “‘a scheme, plan, strategem, or artiface
of evasion,’ which . . . connotes a specific ‘intent . . . to
evade a statutory requirement.’” Betts, 492 U.S. 158, 171 (1989)
(quoting United Air Lines, Inc. v. McMann, 434 U.S. 192, 203
(1977)). A statutory requirement is evaded where there is
“actual intent to discriminate in those aspects of the employment
relationship protected” by the ADA. Betts, 492 U.S. at 181;
Aramark Corp., Inc, 208 F.3d at 271 (stating that “[u]nder the
ADA, then, “subterfuge to evade” still requires intent”). Betts
concluded that “the provisions of a bona fide benefit plan [were
exempt] so long as the plan [was] not a method of discriminating
in other, non-fringe-benefit aspects of the employment
relationship[.]”6 Betts, 492 U.S. at 177. Examples of age-based
discrimination in a non-fringe benefit aspect might include an
6
Fringe benefits have been defined to include “‘medical,
hospital, accident, life insurance and retirement benefits;
profit-sharing and bonus plans; leave; and other terms,
conditions, and privileges of employment.’” Krauel v. Iowa
Methodist Med. Ctr., 95 F.3d 674, 679 n.6 (8th Cir. 1996)
(quoting 29 C.F.R. § 1604.9).
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employer reducing salaries for all employees “while substantially
increasing benefits for younger workers[,]” or “an employer
adopt[ing] a plan provision formulated to retaliate against” an
employee who filed a discrimination complaint. Id. at 180.
While Rouse must establish as part of his prima facie case
that the safe harbor is merely a subterfuge, see Betts, 492 U.S.
at 181, he need not plead every element of his prima facie claim
to survive a motion to dismiss. Swierkiewicz, 534 U.S. at 511(“This Court has never indicated that the requirements for
establishing a prima facie case . . . also apply to the pleading
standard that plaintiffs must satisfy in order to survive a
motion to dismiss.”). Therefore, a motion for summary judgment,
and not a motion to dismiss, is the proper vehicle by which the
defendants may raise their challenges to the sufficiency of
Rouse’s showing of subterfuge.
However, Rouse’s allegations must still give rise to an
entitlement to relief in order to survive the motion to dismiss,
meaning that he must have pled a factually plausible § 501 claim
under the Rehabilitation Act. “Under Title VII, the ADEA, and
the Rehabilitation Act, the two essential elements of a[n
employment] discrimination claim are that (i) the plaintiff
suffered an adverse employment action (ii) because of the
plaintiff’s race, color, religion, sex, national origin, age, or
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disability.” Baloch v. Kempthorne, 550 F.3d 1191, 1196 (D.C.
Cir. 2008).
Rouse pled that he “received a letter from [LTC Partners],
stating that he was denied coverage because he answered that he
used a wheelchair[.]” (Second Am. Compl. ¶ 17.) This factual
assertion plausibly alleges the adverse employment action prong
of Rouse’s discrimination claim. See Greer v. Paulson, 505 F.3d
1306, 1317 (D.C. Cir. 2007) (noting that a diminution in benefits
qualifies as an adverse employment action). It also satisfies
the second material element of an employment discrimination claim
–– that the defendant took action because of a prohibited
consideration. Unlike what the plaintiff pled in Iqbal, Rouse
has not merely parroted the legal elements of the claim in his
complaint. He has made a factual allegation that provides
independent corroboration of his belief that LTC Partners denied
his coverage on the basis of his disability, and that allegation
is entitled to a presumption of truth. Cf. Twombly, 550 U.S. at
555 (noting that “on a motion to dismiss, courts ‘are not bound
to accept as true a legal conclusion couched as a factual
allegation’” (quoting Papasan v. Allain, 478 U.S. 265, 286
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(1986))).7 Thus, Rouse has stated a claim of employment
discrimination under § 501 of the Rehabilitation Act.
II. SECTION 504
Section 504 of the Rehabilitation Act prohibits
“discrimination . . . under any program or activity conducted by
any Executive Agency[.]” 29 U.S.C. § 794(a). The D.C. Circuit
does not recognize a cause of action under § 504 for federal
employees claiming employment discrimination. Taylor, 350 F.3d
at 1291 (“[B]ecause the Congress addressed discrimination against
Government employees . . . in § 501, it is highly unlikely the
Congress meant to address the subject again in § 504.”). Rouse
attempts to distinguish Taylor on the grounds that although he is
a federal employee, he is also a potential participant in the
long-term insurance benefit program, which is administered by
OPM, an executive agency. (Pl.’s OPM Opp’n at 6-7.) This
distinction, however, is unavailing, as Rouse’s entitlement to
participate in the program stems entirely from his status as a
federal employee. Participation in the program is a benefit for
OPM employees, and any disparate treatment in its administration,
then, is employment discrimination. Section 504 does not provide
Rouse an “alternative route for relief under the Rehabilitation
7
In any event, Rouse has pled sufficient facts in support
of his claim of discrimination to satisfy any fair reading of
pleading requirements articulated in Sparrow, Swierkiewicz,
Twombly, or Iqbal.
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Act” for an employment discrimination claim. Taylor, 350 F.3d at
1291 (quoting Rivera v. Heyman, 157 F.3d 101, 104 (2d Cir.
1998)). Count II will therefore be dismissed.8
CONCLUSION AND ORDER
Because Rouse has pled facts demonstrating that he suffered
an adverse employment event because of his disability, he has
established a claim under § 501 even without establishing that
the administration of the benefits plan is a subterfuge for
discrimination. However, he cannot bring a claim under § 504
because but for his status as a federal employee, he would not be
eligible to participate in the benefits program. Accordingly, it
is hereby
ORDERED that the OPM Director’s and LTC Partners’ motions
[32, 33] to dismiss be, and hereby are, DENIED as to Counts I and
III, and GRANTED as to Count II. It is further
ORDERED that the parties confer and file by February 12,
2010 a joint status report and proposed order reflecting three
mutually agreeable dates on which to hold a scheduling
conference.
8
The defendants also argue that since Counts I and II must
be dismissed, the request for a declaratory judgment in Count III
based upon the violations alleged in Counts I and II must be
dismissed. Since Count I survives, Count III will not be
dismissed.
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SIGNED this 29th day of January, 2010.
________/S/_________________
RICHARD W. ROBERTS
United States District Judge