Geduldig v. Aiello 8212 640

• Decision Date: 17 June 1974
• Docket Number: No. 73,73
• Parties: Dwight GEDULDIG, etc., Appellant, v. Carolyn AIELLO et al. —640
• Court: U.S. Supreme Court

417 U.S. 484

94 S.Ct. 2485

41 L.Ed.2d 256

Dwight GEDULDIG, etc., Appellant,

v Carolyn AIELLO et al.

No. 73—640.

Argued March 26, 1974.

Decided June 17, 1974.

Syllabus

California has a disability insurance system for private employees temporarily disabled from working by an injury or illness not covered by workmen's compensation, under which an employee contributes to an Unemployment Compensation Disability Fund one percent of his salary up to an annual maximum of $85. A disability lasting less than eight days is not compensable, except when the employee is hospitalized. Benefits are not payable for a single disability exceeding 26 weeks. A disability resulting from an individual's court commitment as a dipsomaniac, drug addict, or sexual psychopath is not compensable, nor are certain disabilities attributable to pregnancy. Appellees, four women otherwise qualified under the program who have suffered employment disability because of pregnancies, only one of which was normal, challenged the pregnancy exclusion. A three-judge District Court upheld their contention that the exclusion violated the Equal Protection Clause. The court denied a motion to reconsider based on a state appellate court ruling, in which appellant who administers the program has acquiesced, confining the exclusion to only normal pregnancies. The California program, in terms of the level of benefits and risks insured, is structured to maintain the solvency of the Disability Fund at a one-percent annual level of contribution. The District Court acknowledged that coverage of disabilities resulting from normal pregnancies would entail substantial additional expense. But it concluded that this increased cost could be accommodated through adjustments in the rate of employee contribution, the maximum benefits payable, 'and the other variables affecting the solvency of the program.' Held:

1. The appellate ruling and administrative guidelines excluding only normal pregnancies have mooted the case as to the three appellees who had abnormal pregnancies and whose claims have now been paid. Pp. 491—492 2. California's decision not to insure under its program the risk of disability resulting from normal pregnancy does not constitute an invidious discrimination violative of the Equal Protection Clause. The program does not discriminate with respect to the persons or groups eligible for its protection, and there is no evidence that it discriminates against any definable group or class in terms of the aggregate risk protection derived from the program. The sole contention is the asserted under-inclusiveness of the program's coverage as a result of the exclusion of disabilities resulting from normal pregnancy. The State is not required by the Equal Protection Clause to sacrifice the self-supporting nature of the program, reduce the benefits payable for covered disabilities, or increase the maximum employee contribution rate just to provide protection against another risk of disability, such as normal pregnancy. '(T)he Equal Protection Clause does not require that a State must choose between attacking every aspect of a problem or not attacking the problem at all.' Dandridge v. Williams, 397 U.S. 471, 486—487, 90 S.Ct. 1153, 1162, 25 L.Ed.2d 491. Pp. 492—497.

D.C., 359 F.Supp. 792, reversed.

Joanne Condas, San Francisco, Cal., for appellant.

Wendy W. Williams, Berkeley, Cal., for appellees.

Mr. Justice STEWART delivered the opinion of the Court.

For almost 30 years California has administered a disability insurance system that pays benefits to persons in private employment who are temporarily unable to work because of disability not covered by workmen's compensation. The appellees brought this action to challenge the constitutionality of a provision of the California program that, in defining 'disability,' excludes from coverage certain disabilities resulting from pregnancy. Because the appellees sought to enjoin the enforcement of this state statute, a three-judge court was convened pursuant to 28 U.S.C. §§ 2281 and 2284.¹ On the appellees' motion for summary judgment, the District Court, by a divided vote, held that this provision of the disability insurance program violates the Equal Protection Clause of the Fourteenth Amendment, and therefore enjoined its continued enforcement. 359 F.Supp. 792. The District Court denied a motion to stay its judgment pending appeal. The appellant thereupon filed a similar motion in this Court, which we granted. Hansen v. Aiello, 414 U.S. 897, 94 S.Ct. 208, 38 L.Ed.2d 142. We subsequently noted probable jurisdiction of the appeal. 414 U.S. 1110, 94 S.Ct. 838, 38 L.Ed.2d 736.

I

California's disability insurance system is funded entirely from contributions deducted from the wages of participating employees. Participation in the program is mandatory unless the employees are protected by a voluntary private plan approved by the State.² Each employee is required to contribute one percent of his salary, up to an annual maximum of $85.³ These contributions are placed in the Unemployment Compensation Disability Fund, which is established and administered as a special trust fund within the state treasury.⁴ It is from this Disability Fund that benefits under the program are paid.

An individual is eligible for disability benefits if, during a one-year base period prior to his disability, he has contributed one percent of a minimum income of $300 to the Disability Fund.⁵ In the event he suffers a compensable disability, the individual can receive a 'weekly benefit amount' of between $25 and $105, depending on the amount he earned during the highest quarter of the base period.⁶ Benefits are not paid until the eighth day of disability, unless the employee is hospitalized, in which case benefits commence on the first day of hospitalization.⁷ In addition to the 'weekly benefit amount,' a hospitalized employee is entitled to receive 'additional benefits' of $12 per day of hospitalization.⁸ 'Weekly benefit amounts' for any one disability are payable for 26 weeks so long as the total amount paid does not exceed one-half of the wages received during the base period.⁹ 'Additional benefits' for any one disability are paid for a maximum of 20 days. ¹⁰

In return for his one-percent contribution to the Disability Fund, the individual employee is insured against the risk of disability stemming from a substantial number of 'mental or physical illness(es) and mental or physical injur(ies).' Cal.Unemp.Ins.Code § 2626. It is not every disabling condition, however, that triggers the obligation to pay benefits under the program. As already noted, for example, any disability of less than eight days' duration is not compensable, except when the employee is hospitalized. Conversely, no benefits are payable for any single disability beyond 26 weeks. Further, disability is not compensable if it results from the individual's court commitment as a dipsomaniac, drug addict, or sexual psychopath.¹¹ Finally, § 2626 of the Unem- ployment Insurance Code excludes from coverage certain disabilities that are attributable to pregnancy. It is this provision that is at issue in the present case.

Appellant is the Director of the California Department of Human Resources Development.¹² He is responsible for the administration of the State's disability insurance program. Appellees are four women who have paid sufficient amounts into the Disability Fund to be eligible for benefits under the program. Each of the appellees became pregnant and suffered employment disability as a result of her pregnancy. With respect to three of the appellees, Carolyn Aiello, Augustina Armendariz, and Elizabeth Johnson, the disabilities were attributable to abnormal complications encountered during their pregnancies.¹³ The fourth, Jacqueline Jaramillo, experienced a normal pregnancy, which was the sole cause of her disability.

At all times relevant to this case, § 2626 of the Unemployment Insurance Code provided:

"Disability' or 'disabled' includes both mental or physical illness and mental or physical injury. An individual shall be deemed disabled in any day in which, because of his physical or mental condition, he is unable to perform his regular or customary work. In no case shall the term 'disability' or 'disabled' include any injury or illness caused by or arising in connection with pregnancy up to the termination of such pregnancy and for a period of 28 days thereafter.' (Emphasis added.)

Appellant construed and applied the final sentence of this statute to preclude the payment of benefits for any disability resulting from pregnancy. As a result, the appellees were ruled ineligible for disability benefits by reason of this provision, and they sued to enjoin its enforcement. The District Court, finding 'that the exclusion of pregnancy-related disabilities is not based upon a classification having a rational and substantial relationship to a legitimate state purpose,' held that the exclusion was unconstitutional under the Equal Protection Clause. 359 F.Supp., at 801.

Shortly before the District Court's decision in this case, the California Court of Appeal, in a suit brought by a woman who suffered an ectopic pregnancy, held that § 2626 does not bar the payment of benefits on account of disability that results from medical complications arising during pregnancy. Rentzer v. California Unemployment Insurance Appeals Board, 32 Cal.App.3d 604, 108 Cal.Rptr. 336 (1973).¹⁴ The state court construed the statute to preclude only the payment of benefits for disability accompanying normal pregnancy.¹⁵ The appel- lant acquiesced in this construction and issued administrative guidelines that exclude only the payment of 'maternity benefits' i.e., hospitalization and disability benefits for normal delivery and recuperation.

Although Rentzer was decided some 10 days before the District Court's decision in this case, there was apparently no opportunity to call the court's attention to...