Saks v. Franklin Covey Co.
| Citation | 316 F.3d 337 |
| Decision Date | 15 January 2003 |
| Docket Number | Docket No. 00-9598. |
| Parties | Rochelle SAKS, Plaintiff-Appellant, v. FRANKLIN COVEY CO. and Franklin Covey Client Sales, Inc., Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Darnley D. Stewart, Bernstein Litowitz Berger & Grossmann, LLP, (Daniel L. Berger, Leah Guggenheimer, on the brief), New York, NY, for Plaintiff-Appellant.
Steven C. Bednar Manning Curtis Bradshaw & Bednar LLC, Salt Lake City, UT, for Defendants-Appellees.
Jonathan S. Franklin, Hogan & Hartson LLP, Washington, DC (Catherine E. Stetson, on the brief), for Amicus Curiae American Society for Reproductive Medicine, in Support of Plaintiff-Appellant.
Before: WALKER, Chief Judge, F.I. PARKER and SOTOMAYOR, Circuit Judges.
This case raises the question of whether unlawful discrimination occurs when a woman is denied coverage for infertility treatments that can only be performed on women. After plaintiff-appellant Rochelle Saks was denied coverage for certain infertility procedures under her employee health benefits plan, she sued her employer, Franklin Covey Client Sales, Inc., and its parent company, Franklin Covey Co. (collectively, "Franklin Covey"), claiming that the denial of coverage constituted a breach of her contractual rights and violated her civil rights under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., the Pregnancy Discrimination Act ("PDA"), 42 U.S.C. § 2000e(k), the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101, et seq., and the New York Human Rights Law, N.Y. Exec. Law § 290, et seq. The United States District Court for the Southern District of New York (Colleen McMahon, District Judge) granted Franklin Covey's motion for summary judgment on the grounds that (1) the lack of coverage for the contested infertility procedures — specifically, artificial insemination, in vitro fertilization, and in utero insemination — does not violate any of the federal statutes and (2) Saks's state law claims were pre-empted by ERISA. See Saks v. Franklin Covey Co., 117 F.Supp.2d 318, 327-28, 329, 330 (S.D.N.Y.2000).
With respect to Saks's Title VII and PDA claims, although we differ with the district court's analysis in several important respects, we affirm the grant of summary judgment in favor of Franklin Covey. As to the preemption of Saks's state law claims by ERISA, we remand to the district court for further proceedings.
Franklin Covey employed Saks as a store manager from March 1995 until she resigned in October 1999. During her tenure of employment, Saks was a member of Franklin Covey's self-insured health benefits plan ("the Plan"), which provided coverage to full-time employees and their dependents. Claims under the Plan were handled through The TPA, Inc. ("TPA"), a third-party processing agent hired by Franklin Covey.
Under the Plan, an employee is entitled to benefits for "medically necessary" procedures, which are defined as "[a]ny service... required for the diagnosis or treatment of an active illness or injury that is rendered by or under the direct supervision of the attending physician." Franklin Covey Medical/Dental Plan 78 (1998) ("Franklin Covey Plan"). The Plan defines an active illness as "[a]ny bodily sickness, disease, mental/nervous disorder or pregnancy." Id. at 77.
Under the Plan, Franklin Covey employees may claim benefits for a variety of infertility products and procedures, such as ovulation kits, oral fertility drugs, penile prosthetic implants (when certified by a physician to be medically necessary), and nearly all surgical infertility treatments. See id. at 46, 49, 52. Examples of covered surgical infertility treatments include procedures to remedy conditions such as variococeles (varicose veins in the testicles causing low sperm count), blockages of the vas deferens, endometriosis, and tubal occlusions. The Plan expressly excludes coverage for "[s]urgical impregnation procedures, including artificial insemination, in-vitro fertilization or embryo and fetal implants" (collectively, "surgical impregnation procedures"), even if medically necessary. Id. at 49, 52. However, once pregnancy is achieved, whether by covered or uncovered means, all pregnancy-related costs are covered. See Saks, 117 F.Supp.2d at 329.
During her employment with Franklin Covey, Saks attempted unsuccessfully to have a child with her husband. Under the care of several reproductive endocrinologists, Saks followed various courses of action, including (1) the use of ovulation kits, (2) the administration of the drug Clomid in order to induce and regulate ovulation, (3) intrauterine inseminations ("IUIs"), (4) in vitro fertilization ("IVFs"), (5) the use of progesterone and estrogen, (6) the administration of several injectable fertility drugs, such as Humagon, and (7) blood tests and ultrasounds in order to monitor the potentially harmful side effects of the drugs prescribed to her. See id. at 321-23. Saks achieved pregnancy in September 1997 and again in August 1999, but unfortunately each pregnancy ended in a miscarriage. See id. at 322-23. In April 1999, Saks also had a chemical pregnancy (one marked by a hormonal change but not confirmed by an ultrasound) that was not sustained. See id. at 323.
Saks sought reimbursement from the TPA for all of the costs associated with her infertility treatments. For the purposes of the summary judgment motion, Franklin Covey did not dispute that infertility is an illness as defined by the Plan or that surgical impregnation procedures were "medically necessary" to treat Saks's infertility problems. See id. at 320 & n. 1. The TPA refused to reimburse Saks for a great many of the costs, including all of the IUIs, IVFs, injectable fertility drugs, and tests necessary to monitor the potential side effects of the drugs.1 See id. at 322-23. Compensation for the IUIs and IVFs was denied based on the Plan's express exclusion of coverage for surgical impregnation techniques. Although the costs of non-insulin injectable drugs are generally covered under the Plan, the TPA rejected Saks's claims for the injectable fertility drugs and the drug-related monitoring because they were used in conjunction with the surgical impregnation procedures. See Franklin Covey Plan 49; Clarke Dep. 140-43, 161, 166-67. After filing a charge against Franklin Covey with the EEOC, Saks initiated the instant action.
In the district court, Saks alleged that Franklin Covey breached its contractual obligations and that the Plan's exclusion of coverage for surgical impregnation procedures violates the ADA, Title VII, the PDA, and the New York Human Rights Law. Of specific relevance to this appeal, Saks argued that the Plan violates the PDA, which prohibits discrimination on the basis of pregnancy and "related medical conditions," because the Plan's benefits for infertility treatments are inferior to its coverage for non-pregnancy-related illnesses. Saks also argued that the Plan discriminates on the basis of sex, in violation of Title VII, because it provides incomplete coverage for surgical treatments that address female infertility but provides complete coverage for surgical procedures that remedy male infertility. In moving for summary judgment, Franklin Covey argued that the Plan does not discriminate against infertility or women, and that, in any event, the PDA does not prohibit discrimination based on infertility. In addition, Franklin Covey moved to dismiss Saks's state law claims on the basis that they are preempted by ERISA.
In granting summary judgment for Franklin Covey, the district court determined that the Plan's exclusions affect male and female employees equally and thus did not violate Title VII. See Saks, 117 F.Supp.2d at 328. Addressing the PDA claim, the district court first concluded that the PDA prohibits discrimination on the basis of infertility because infertility is a "pregnancy-related" condition. See id. at 328-29. The district court nevertheless found that the Plan does not violate the PDA because it provides equal coverage for male and female employees who suffer from infertility. The district court dismissed Saks's state law claims as preempted by ERISA and rejected Saks's argument that defendants had waived the preemption defense by failing to raise it in their answer. See id. at 329-30. Finally, the district court dismissed Saks's claims based on disability discrimination. See id. at 326-28. Saks has appealed from all of these rulings except the last one.
We review the district court's grant of summary judgment de novo. See Lombard v. Booz-Allen & Hamilton, Inc., 280 F.3d 209, 214 (2d Cir.2002). Summary judgment is appropriate only where "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
Title VII prohibits employment practices that "discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a)(1). This prohibition extends to discrimination in providing health insurance and other fringe benefits. See Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669, 682, 103 S.Ct. 2622, 77 L.Ed.2d 89 (1983).
The Pregnancy Discrimination Act amends Title VII's definition of discrimination "because of sex" to include discrimination "because of or on the basis of pregnancy, childbirth, or related medical conditions." 42 U.S.C. § 2000e(k). The PDA further mandates that "women affected by pregnancy, childbirth, or related...
To continue reading
Request your trial
-
In re Worldcom, Inc. Securities Litigation
...cause of action. 15 U.S.C. § 78t(a). In construing a statute, the starting point must be "the words of the text." Saks v. Franklin Covey Co., 316 F.3d 337, 345 (2d Cir.2003). The statutory language identifies two components to a control person claim: (1) a primary violation by a controlled ......
-
Nicosia v. Amazon.com, Inc.
...undue delay of the proceedings." Estate of Hamilton v. City of New York , 627 F.3d 50, 58 (2d Cir. 2010) (quoting Saks v. Franklin Covey Co. , 316 F.3d 337, 350 (2d Cir. 2003) ), superseded on other grounds, Mihalik v. Credit Agricole Cheuvreux North America, Inc. , 715 F.3d 102 (2d Cir. 20......
-
Long Term Capital Holdings v. U.S.
...case of an individual taxpayer....").95 See e.g., United States v. Gayle, 342 F.3d 89, 92-93 (2d Cir.2003)(quoting Saks v. Franklin Covey Co., 316 F.3d 337, 345 (2d Cir.2003))(statute's "plain meaning can best be understood by looking to the statutory scheme as a whole and placing the parti......
-
Murphy ex rel. Estate of Payne v. U.S.
...itself, the specific context in which that language is used, and the broader context of the statute as a whole."); Saks v. Franklin Covey Co., 316 F.3d 337, 345 (2d Cir.2003) ("The text's plain meaning can best be understood by looking to the statutory scheme as a whole and placing the part......