121 F.3d 1006 (6th Cir. 1997), 95-5269, Parker v. Metropolitan Life Ins. Co.

Docket Nº:95-5269.
Citation:121 F.3d 1006
Party Name:Ouida Sue PARKER, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, Schering-Plough Corporation, and Schering-Plough Health Care Products, Inc., Defendants-Appellees.
Case Date:August 01, 1997
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

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121 F.3d 1006 (6th Cir. 1997)

Ouida Sue PARKER, Plaintiff-Appellant,


METROPOLITAN LIFE INSURANCE COMPANY, Schering-Plough Corporation, and Schering-Plough Health Care Products, Inc., Defendants-Appellees.

No. 95-5269.

United States Court of Appeals, Sixth Circuit

August 1, 1997

Argued April 23, 1997

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Kaye G. Burson (argued and briefed), Rutledge & Rutledge, Memphis, TN, for Appellant.

Roger K. Rutledge (briefed), Rutledge & Rutledge, Memphis, Tennessee, for Appellant.

Ronald S. Rauchberg (argued and briefed), Proskauer, Rose, Goetz & Mendelsohn, New York City, and Frederick J. Lewis (argued and briefed), McKnight, Hudson, Lewis & Henderson, Memphis, TN, Allan M. Marcus (briefed), Metropolitan Life Insurance Company, New York City, and Nicole Marie Walthour (briefed), McKnight, Hudson, Lewis & Henderson, Memphis, TN, for Appellee.

Gregory B. Stites (briefed), National Association of Insurance Commissioners, Kansas City, MO, Ronald S. Cooper (briefed), Steptoe & Johnson, Washington, DC, Patrick W. Shea (briefed), Paul, Hastings, Janofsky & Walker, Stamford, CT, Jaime R. Ebenstein (briefed), J.R. Ebenstein Consultants, Valparaiso, IN, Glenn Felton (briefed), Chattanooga, TN, Susan G. Riseman (briefed), Worcester, MA, Ann E. Reesman (briefed), McGuiness & Williams, Washington, DC, Patricia

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  1. Dunn (briefed), Jones, Day, Reavis & Pogue, Washington, DC, and David M. Selcer (briefed), Baker & Hostetler, Columbus, OH, for Amici Curiae.


KENNEDY, J., delivered the opinion of the court, in which NELSON, RYAN, BOGGS, NORRIS, SUHRHEINRICH, SILER, and BATCHELDER, JJ., joined. MARTIN, C.J. (pp. 1019-20) and MERRITT, J. (pp. 1020-21), delivered separate dissenting opinions, in which MOORE, J., joined, with Chief Judge MARTIN and Judges DAUGHTREY and COLE also joining in Judge MERRITT'S dissent.


KENNEDY, Circuit Judge.

Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12182-12189 ("ADA"), prohibits discrimination 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. In the instant case, we are asked to determine whether Title III of the ADA prohibits an employer from providing to its employees a long-term disability plan issued by an insurance company which contains longer benefits for employees who become disabled due to a physical illness than for those who become disabled due to a mental illness. For the reasons set forth below, we conclude that such a distinction is not prohibited.


Plaintiff, Ouida Sue Parker, was employed by Schering-Plough Health Care Products, Inc. ("Schering-Plough") from April 20, 1981 through October 29, 1990. During her employment, Parker participated in a long-term disability plan offered by Schering-Plough to its employees; the plan was issued by Metropolitan Life Insurance Co. ("MetLife"). Under the plan, an individual who is deemed to be totally disabled due to a mental or nervous disorder may receive benefits for up to twenty-four months, unless at the termination of the twenty-four month period, the individual was hospitalized or receiving inpatient care for the disorder. For physical disorders, however, the plan provides for benefits until the individual reaches sixty-five years of age.

On October 29, 1990, Parker became disabled due to severe depression. On April 29, 1991, Parker began to receive benefit payments under the plan. Because Parker suffered from a mental disorder, Schering-Plough terminated her payments twenty-four months later, on April 28, 1993, pursuant to the terms of the plan. Following Schering-Plough's denial of two administrative appeals filed by Parker, plaintiff filed this action alleging violations of the Americans with Disabilities Act, 42 U.S.C. §§ 12101-12213, and the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 ("ERISA"). The District Court granted the defendants' motion for summary judgment. The District Court first found that Parker did not have standing to sue under Title I of the ADA, 42 U.S.C. §§ 12111-12117, because only a "qualified individual with a disability" may obtain relief under Title I and Parker was not a "qualified individual with a disability" when her benefits were terminated because her disorder prevented her from performing the essential functions of her employment position. The District Court also dismissed Parker's claim against the defendants under Title III of the ADA, 42 U.S.C. §§ 12165-12189. MetLife was not a proper defendant under Title III, the court concluded, because Title III only covers discrimination in the physical access to goods and services, not discrimination in the terms of insurance policies. The Title III claim against Schering-Plough, Parker's employer, was dismissed because Title I, not Title III, governs discrimination in employment practices. Because Parker was not a qualified individual under Title I, a suit against her employer could not be maintained under the ADA. Lastly, the District Court granted summary judgment in favor of the defendants on Parker's

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ERISA claim because the classification of her disorder as "nervous/mental" was not arbitrary or capricious.

On appeal from the District Court's order, a panel of this Court affirmed the District Court's judgment as to Parker's ERISA claim 1 and Title I claim under the ADA. 2 The panel, however, reversed the District Court's judgment as to plaintiff's claim under Title III of the ADA. Disagreeing with the District Court, the panel concluded that Title III "prohibits discrimination in the contents of the goods and services offered at places of public accommodation, rather than just discrimination in terms of physical access to places of public accommodation." Parker v. Metropolitan Life Ins. Co., 99 F.3d 181, 187 (6th Cir. 1996). Accordingly, the panel found that Title III covers insurance products because "insurance products are 'goods' or 'services' provided by a 'person' who owns a 'public accommodation.' " Id. at 188.

Because the panel concluded that the contents of insurance products are governed by Title III, it then turned to whether Title IV of the ADA, 42 U.S.C. § 12201(c), commonly referred to as the "safe harbor provision," precluded application of Title III to insurance products. The panel concluded that the safe harbor provision was ambiguous on its face as to whether it intended to exempt insurance products from ADA coverage. It, therefore, looked to legislative history for guidance. The panel concluded that the legislative history indicated that "insurance practices are protected by the 'safe harbor' provision, but only to the extent that they are consistent with 'sound actuarial principles,' 'actual reasonably anticipated experience,' and 'bona fide risk classification.' " Parker, 99 F.3d at 191. Responding to the defendants' argument that an insurance plan violates the ADA only if it is a "subterfuge" under § 12201(c), the panel declined to adopt the Supreme Court's definition of subterfuge pronounced in Ohio Public Employees Retirement System v. Betts, 492 U.S. 158, 109 S.Ct. 2854, 106 L.Ed.2d 134 (1989). In Betts, the Court defined the term subterfuge in the Age Discrimination in Employment Act ("ADEA") as an intent to discriminate. See Betts, 492 U.S. at 181, 109 S.Ct. at 2868-69. Declining to follow the ADEA definition of subterfuge, the panel held that an insurance plan is a subterfuge under the ADA if it is "based on speculation, and not on sound actuarial principles, actual or reasonably anticipated experience, or bona fide risk classification." Parker, 99 F.3d at 191-92.

Finally, in response to Schering-Plough's contention that Title I, not Title III, governs employment practices, the panel held that "based on our affirmance of Plaintiff's Title I claim, it is not clear whether Schering remains a proper defendant to the remaining claim [Title III] of this suit." Parker, 99 F.3d at 194. The panel did not resolve this question of law; rather, it instructed the lower court that the issue was ripe for its determination on remand. Id.

Following the panel's decision, the defendants sought rehearing en banc on the panel's disposition of Parker's Title III claim. We granted their petition and vacated our prior judgment. See Parker v. Metropolitan Life Ins. Co., 107 F.3d 359 (6th Cir. 1997). Accordingly, the case is again before us for our determination. Upon review, we conclude that the judgment of the District Court will be AFFIRMED.


Our standard of review of a grant of summary judgment is de novo; we use the same test as used by the district court. See Brooks v. American Broadcasting Cos., 932 F.2d 495, 500 (6th Cir. 1991). Summary judgment is proper if the evidence " 'show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to [a] judgment as a matter of law.' " See Fed.R.Civ.P. 56(c); Canderm Pharmacal, Ltd. v. Elder Pharmaceuticals, Inc., 862 F.2d 597, 601 (6th Cir. 1988) (quoting Fed.R.Civ.P. 56(c)).

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A. Title III: Places of Public Accommodation

To determine whether a benefit plan provided by an employer falls within the prohibitions of Title III, we must begin by examining the statutory text. See United States v. Gonzales, 520 U.S. 1, ----, 117 S.Ct. 1032, 1034, 137 L.Ed.2d 132 (1997); Kurinsky v. United States, 33 F.3d 594, 596 (6th Cir. 1994) (citing United States v. Johnson, 855 F.2d 299 (6th Cir. 1988)), cert. denied, 514 U.S. 1082, 115 S.Ct. 1793, 131 L.Ed.2d 721 (1995). The ADA generally prohibits discrimination against the disabled by employers, public entities, and by operators of public accommodations. See 42 U.S.C. §§ 12101-12213. Title III...

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