479 F.3d 936 (8th Cir. 2007), 06-1706, In re Union Pacific Railroad Employment Practices Litigation

Docket Nº:06-1706.
Citation:479 F.3d 936
Party Name:In re UNION PACIFIC RAILROAD EMPLOYMENT PRACTICES LITIGATION Brandi Standridge, on behalf of herself and all others similarly situated; Kenya Phillips, on behalf of herself and all others similarly situated, Plaintiffs-Appellees, Jackie Fitzgerald, an Oregon resident, on behalf of herself and all others similarly situated; Samantha Brand, a Washing
Case Date:March 15, 2007
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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479 F.3d 936 (8th Cir. 2007)

In re UNION PACIFIC RAILROAD EMPLOYMENT PRACTICES LITIGATION

Brandi Standridge, on behalf of herself and all others similarly situated; Kenya Phillips, on behalf of herself and all others similarly situated, Plaintiffs-Appellees,

Jackie Fitzgerald, an Oregon resident, on behalf of herself and all others similarly situated; Samantha Brand, a Washington resident, on behalf of herself and all others similarly situated, Plaintiffs,

v.

Union Pacific Railroad Company, Defendant-Appellant,

The Board of Trustees of Union Pacific Employees Health Service, Defendant.

American College of Obstetricians and Gynecologists; U.S. Women's Chamber of Commerce, Amici on Behalf of Appellee,

Equal Employment Advisory Council; Chamber of Commerce of the United States, Amici on Behalf of Appellant,

Olympia J. Snowe; Harry Reid; Patty Murray; Barbara Milkulski; Maria Cantwell, Senators; Nita M. Lowey; Louise M. Slaughter; Diana Degette; Chris Shays; Betty McCollum; Henry A. Waxman; Sherrod Brown; Donna M. Christensen; Joseph Crowley; Sam Farr; Raul M. Grijalva; Jane Harman; Sheila Jackson Lee; Eddie Bernice Johnson; Dennis J. Kucinich; Carolyn Maloney; James P. McGovern; Jerrold Nadler; Jan Schakowsky; Allyson Y. Schwartz; Diane E. Watson; Anthony D. Weiner; Albert R. Wynn; Rush D. Holt; Jim Moran, Representatives, Amici on Behalf of Appellee.

No. 06-1706.

United States Court of Appeals, Eighth Circuit.

March 15, 2007

Submitted: Nov. 16, 2006.

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Michael L. Schleich, Fraser & Stryker, Omaha, NE, Claire Cordon, T. David Copley, Keller & Rohrback, Kelly S. Reese, Roberta N. Riley, Planned Parenthood, Seattle, WA, Sylvester James, Jr., Rick D. Holtsclaw, Defeo & Holtsclaw, Kansas City, MO, Terry L. Fromson, Women's Law Project, Philadelphia, PA, Barbara C. Frankland, Rex A. Sharp, Gunderson & Sharp, Prairie Village, KS, for Plaintiffs-Appellees.

Brian J. McGrath, Lamson & Dugan, Brenda J. Council, Whitner Law Firm, Omaha, NE, Donald J. Munro, Shea & Gardner, Jeffrey D. Fox, Thomas J. Mikula,

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Goodwin & Procter, Washington, DC, John S. Chindlund, Prince & Yeates, Salt Lake City, UT, for Defendant-Appellant.

Ann Elizabeth Reesman, Laura A. Giantris, McGuiness & Williams, Robin S. Conrad, Shane Brennan, National Chamber Litigation Center, Washington, DC, for Appellant.

Before BYE, BOWMAN and GRUENDER, Circuit Judges.

GRUENDER, Circuit Judge.

Brandi Standridge and Kenya Phillips, as class representatives, sued Union Pacific Railroad Company ("Union Pacific") for sexual discrimination under Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq., as amended by the Pregnancy Discrimination Act of 1978 ("PDA"), 42 U.S.C. § 2000e(k). The district court granted Standridge and Phillips's motion for partial summary judgment on July 15, 2005, and entered final judgment in their favor on February 10, 2006. Union Pacific appeals. For the reasons discussed below, we reverse.

I. BACKGROUND

Union Pacific, a freight company headquartered in Omaha, Nebraska, provides health care benefits to those of its employees who are covered by collective bargaining agreements ("agreement employees"). These agreement employees receive benefits through one of five plans. While the plans provide benefits for services such as routine physical exams, tetanus shots and drug and alcohol treatments, they exclude coverage of allergy serum, immunization agents, biological sera and drugs that treat infertility. They also exclude both male and female contraceptive methods, prescription and non-prescription, when used for the sole purpose of contraception. Union Pacific only covers contraception when medically necessary for a non-contraceptive purpose such as regulating menstrual cycles, treating skin problems or avoiding serious health risks associated with pregnancy.

Standridge and Phillips are two of the approximately 1,500 female agreement employees of child-bearing age employed by Union Pacific during the time period relevant to this litigation. Standridge and Phillips used prescription contraception for contraceptive purposes, and the plans did not cover the costs of their contraception. They, along with two other female employees, brought individual suits against Union Pacific alleging that Union Pacific discriminated against its female employees by not providing coverage of prescription contraception in violation of Title VII, as amended by the PDA. The Judicial Panel on Multidistrict Litigation consolidated the four similar actions against Union Pacific and transferred the consolidated action to the District of Nebraska. The district court granted class certification, named Standridge and Phillips as class representatives, and certified the class as "[a]ll females employed by Union Pacific Railroad Company after February 9, 2001, enrolled in one of the Agreement Plans who used prescription contraception, at least in part for the purpose of preventing pregnancy, without insurance reimbursement from said Plan."

The district court granted Standridge and Phillips's motion for partial summary judgment, finding that Union Pacific's failure to cover prescription contraception constitutes a violation of Title VII, as amended by the PDA. In holding that the coverage was discriminatory against women, the district court cited the language of the PDA, the purpose of its enactment, the Equal Employment Opportunity Commission's ("EEOC") interpretation of the PDA's application to prescription contraception

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and reasoning from other district court decisions. The district court rejected Standridge and Phillips's argument that unplanned pregnancies have a negative social impact. It also rejected Union Pacific's arguments that a requirement to cover prescription contraception would have a large financial impact; that the denial of all contraception results in equal treatment of men and women; that contraception deals with fertility and is not a medical condition "related to" pregnancy; that Union Pacific's covered benefits are treatment-related, not preventive; and that there is no medical necessity for contraception with respect to fertility because pregnancy is a normal human condition. The district court held that Union Pacific violated Title VII, as amended by the PDA, because "it treats medical care women need to prevent pregnancy less favorably than it treats medical care needed to prevent other medical conditions that are no greater threat to employees' health than is pregnancy." In re Union Pac. R.R. Employment Practices Litig., 378 F.Supp.2d 1139, 1149 (D.Neb.2005). After a stipulation by the parties regarding attorneys' fees, the district court entered final judgment in favor of Standridge and Phillips, staying enforcement pending Union Pacific's appeal.

II. DISCUSSION

Union Pacific argues that the PDA does not require contraception to be included in its health care coverage and that its health care coverage does not discriminate against women in violation of Title VII. We review de novo the district court's grant of summary judgment, viewing all of the evidence "in the light most favorable to the nonmoving party." Gilooly v. Mo. Dep't of Health & Senior Servs., 421 F.3d 734, 738 (8th Cir.2005) (internal quotation omitted). We apply the same standard as the district court, and we also review de novo the district court's interpretation of statutes. Fitzgerald v. Camdenton R-III Sch. Dist., 439 F.3d 773, 775 (8th Cir.2006).

A. PDA Analysis

As an initial matter, the district court incorrectly characterized Union Pacific's policy as the denial of prescription contraception coverage for women. Union Pacific excludes all types of contraception, whether prescription, non-prescription or surgical and whether for men or women, unless an employee has a non-contraception medical necessity for the contraception. While prescription contraception is currently only available for women, non-prescription contraception is available for men and women. Therefore, the issue is whether Union Pacific's policy of denying coverage for all contraception violates Title VII, as amended by the PDA.

Union Pacific argues that the district court erred in holding that the PDA requires coverage of contraception. It contends that the PDA only relates to discrimination against a woman for medical conditions that occur (or may occur) after she becomes pregnant, while the use of contraception only relates to human fertility before pregnancy. Standridge and Phillips argue that contraception is covered by the PDA because it is "related to" the condition of pregnancy.

Title VII provides that "[i]t shall be an unlawful employment practice for an employer ... to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's ... sex." 42 U.S.C. § 2000e-2(a)(1). Congress created the PDA to amend this provision in response to the Supreme Court's holding that the exclusion of pregnancy benefits did not violate Title VII. See Gen. Elec. Co. v. Gilbert, 429 U.S. 125, 145-46, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976).

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The PDA provides:

The terms "because of sex" or "on the basis of sex" include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work.... This subsection shall not require an employer to pay for health insurance benefits for abortion, except where the life of the mother would be...

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