Carcaño v. Cooper

Decision Date30 September 2018
Docket Number1:16cv236
Citation350 F.Supp.3d 388
Parties Joaquín CARCAÑO, Payton Grey McGarry; Hunter Schafer; Madeline Goss; Angela Gilmore ; Quinton Harper; and American Civil Liberties Union of North Carolina, Plaintiffs, v. Roy COOPER, in His Official Capacity as Governor of North Carolina; University of North Carolina; Margaret Spellings, in Her Official Capacity as President of the University of North Carolina ; Joshua Stein, in His Official Capacity as Attorney General of North Carolina; Machelle Sanders, in Her Official Capacity as Secretary of the North Carolina Department of Administration ; Mandy K. Cohen, in Her Official Capacity as Secretary of the North Carolina Department of Health and Human Services ; and James H. Trogdon III, in His Official Capacity as Secretary of the North Carolina Department of Transportation Defendants, and Phil Berger, in His Official Capacity as President Pro Tempore of the North Carolina Senate; and Tim Moore, in His Official Capacity as Speaker of the North Carolina House of Representatives, Intervenor-Defendants.
CourtU.S. District Court — Middle District of North Carolina

Chase B. Strangio, James D. Esseks, Leslie J. Cooper, American Civil Liberties Union Foundation, New York, NY, Elizabeth O. Gill, American Civil Liberties Union Foundation, San Francisco, CA, Irena Como, Christopher A. Brook, American Civil Liberties Union Of North Carolina, Raleigh, NC, Jon W. Davidson, Peter C. Renn, Lambda Legal Defense and Education Fund, Inc., Los Angeles, CA, Kyle Anthony Palazzolo, Lambda Legal Defense and Education Fund, Inc., Chicago, IL, Luke C. Platzer, Scott B. Wilkens, Jenner & Block, LLC Washington, DC, Tara L. Borelli, Lambda Legal Defense and Education Fund, Inc., Atlanta, GA, Jenifer R. Wolfe, Brown & Bunch, PLLC, Chapel Hill, NC, for Plaintiffs.

Thomas J. Ziko, Carolyn C. Pratt, Thomas C. Shanahan, University of North Carolina General Administration, Chapel Hill, NC, Eric S. Dreiband, Glen D. Nager, Kristen A. Lejnieks, Vivek Suri, Jones Day, Washington, DC, Amar Majmundar, Olga E. Vysotskaya De Brito, North Carolina Department of Justice, Raleigh, NC, for Defendants.

Stuart K. Duncan, Gene C. Schaerr, Stephen S. Schwartz, Schaerr Duncan LLP, Washington, DC, David Christopher Osborn, Osborn Conflict Resolution, Robert D. Potter, Jr., Attorney at Law, Charlotte, NC, Curt C. Hartman, The Law Firm of Curt C. Hartman, Cincinnati, OH, Leah D. McDowell, Jackson, MS, for Intervenor-Defendants.

MEMORANDUM OPINION AND ORDER

Thomas D. Schroeder, United States District Judge

This case originated as a challenge to North Carolina's Public Facilities Privacy & Security Act, 2016 N.C. Sess. Laws 3, commonly known as House Bill 2 ("HB2"), which required, among other things, that public agencies ensure that multiple occupancy restrooms, showers, and other similar facilities be "designated for and only used by" persons based on the "biological sex" listed on their birth certificate. That law was repealed during the pendency of this action, and Plaintiffs eventually filed a Fourth Amended Complaint (Doc. 210), claiming that the repealing law, 2017 N.C. Sess. Laws 4, commonly known as House Bill 142 ("HB142"), violates their Fourteenth Amendment rights, as well as Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681 et seq. ("Title IX") and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII") (id. ¶¶ 1, 35). In short, Plaintiffs, who include persons who identify as transgender, allege two principal forms of injury. First, they contend that they are injured by legal uncertainty as to which restrooms, showers, and changing facilities they are permitted to use. Second, they contend that they are injured both by HB142's preemption of attempts by any local government to "enact or amend an ordinance regulating private employment practices or regulating public accommodations," HB142 § 31 ("Section 3"); and also by HB142's prohibition of attempts by any state agency or political subdivision to "regulat[e] ... access to multiple occupancy restrooms, showers, or changing facilities, except in accordance with an act of the General Assembly," HB142 § 2 ("Section 2").

Before the court are motions to dismiss by Senator Phil Berger and Speaker Tim Moore ("Intervenor-Defendants"), proceeding in their official capacities as heads of the General Assembly's two chambers (Doc. 221), and by the University of North Carolina ("UNC") and its President, Margaret Spellings (together, the "UNC Defendants") (Doc. 222).2 The court held a hearing on the motions on June 25, 2018.

For the reasons set forth below, the court finds that Plaintiffs lack standing as to their substantive due process (Count 1), Title IX (Count 6), and Title VII (Count 7) claims based on alleged legal uncertainty caused by HB142, but do have standing to pursue their equal protection (Count 2) claims relating to the preemption provisions of Sections 2 and 3, except as to President Spellings. Further, the court declines to dismiss Plaintiffs' contingent claims involving HB2 (Counts 3, 4, and 5) at this time and reserves ruling on Plaintiffs' nominal damages (Counts 6 and 7) claims for alleged Title VII and IX violations during the time HB2 was in effect. As to Count 2, the court finds that Plaintiffs fail to state a claim based on Section 2, but succeed in stating a claim based on Section 3.

As a result, the UNC Defendants' motion to dismiss will be granted except as to Plaintiffs' contingent claims involving HB2 in Counts 3, 4, and 5, and as to Plaintiffs' claims for nominal damages in Counts 6 and 7 for the alleged Title VII and IX violations that occurred while HB2 was in effect. Intervenor-Defendants' motion to dismiss will be granted except as to Plaintiffs' equal protection claims based on Section 3 in Count 2, and as to Plaintiffs' contingent claims involving HB2 in Counts 3, 4, and 5.

I. BACKGROUND

The facts are found in the 403 numbered paragraphs of Plaintiffs' 103-page Fourth Amended Complaint, which is construed in the light most favorable to Plaintiffs, as well as those matters of which the court can take judicial notice. Considered together, they demonstrate the following:

A. HB2

On February 22, 2016, the Charlotte City Council amended, by a vote of seven to four, its existing non-discrimination ordinances, making it unlawful to discriminate on the basis of "marital status, familial status, sexual orientation, gender identity, [and] gender expression."3 (Doc. 127 at 12–13 (alteration in original); see also Doc. 210 ¶ 200.) The amendment also repealed prior rules that exempted "[r]estrooms, shower rooms, bathhouses, and similar facilities which are in their nature distinctly private" from the city's prohibitions against sex discrimination. (Doc. 127 at 12 (alteration in original).)

The Charlotte ordinance prompted a quick reaction from then-Governor Patrick McCrory and the General Assembly. Governor McCrory had informed the Charlotte City Council members before passage of the ordinance that the State would likely take immediate action upon the ordinance's passage, since it would " ‘chang[e] basic long-established values and norms’ surrounding ‘public restrooms’ " and present "possible danger from deviant actions by individuals taking improper advantage of a bad policy." (Doc. 210 ¶ 205.) On February 23, 2016, Speaker Moore announced that he and fellow Republicans would seek "a legislative intervention to correct [the Charlotte City Council's] radical course." (Id. ¶ 206.) On March 23, 2016, the General Assembly convened for a special session, during which members of the House Judiciary IV Committee — the committee that first considered HB2 — were allegedly given only minutes to read HB2 before voting on whether to send the bill back to the House for a full debate. (Id. ¶¶ 211–215.) After three hours of debate, the House passed HB2. (Id. ¶ 216.) The bill proceeded to pass unanimously in the Senate, following a walk-out by all Democratic Senators. (Id. ¶ 217.) Governor McCrory signed the bill into law later that day, and it became effective immediately. (Id. ¶ 220.)

HB2 affected North Carolina law in several ways. First, it modified the State's non-discrimination laws. Previously, the State had prohibited discrimination on the basis of race, religion, color, national origin, age, sex, and handicap. See HB2 § 3.1. Part III of HB2 modified this language to prohibit discrimination on the basis of "biological sex," defined as "[t]he physical condition of being male or female, which is stated on a person's birth certificate," rather than simply "sex." HB2 §§ 1.2–1.3, 3.1 (modifying N.C. Gen. Stat. § 143-422.2 ). It also extended these non-discrimination provisions, which had previously applied only to the State, to private employers and places of public accommodation. See id. §§ 3.1-3.3. Part III also precluded state common-law causes of action for violations of those non-discrimination provisions. See id. § 3.2.

Second, Parts II and III of HB2 preempted all local ordinances that conflicted with the new non-discrimination standards, including the Charlotte ordinance that prompted HB2's passage. Id. §§ 2.1–3.3. Third, Part I of HB2 explicitly set new rules for the use of restrooms and changing facilities operated by state agencies. Specifically, Part I provided that all public agencies, including local boards of public education, must "require" that "every multiple occupancy bathroom or changing facility ... be designated for and only used by persons based on their biological sex," defined as the "physical condition of being male or female, which is stated on a person's birth certificate." Id. §§ 1.2-1.3.

Before HB2 was passed, Plaintiffs maintained, transgender individuals used the bathrooms they believed aligned with their gender identity without apparent fear of prosecution under state law. (See Doc. 103 at 20–21, (noting that "the status quo was working for transgender people in that they could make these judgments ...

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