Bankers Life & Cas. Co. v. Peterson, No. 93-363

Docket NºNo. 93-363
Citation263 Mont. 156, 866 P.2d 241
Case DateDecember 28, 1993
CourtUnited States State Supreme Court of Montana

Page 241

866 P.2d 241
263 Mont. 156, 62 USLW 2483
BANKERS LIFE & CASUALTY CO., Petitioner and Appellant,
v.
Lea PETERSON, Lorili Barnett, Kristi Wolf, Diane Chaidez and
Montana Human Rights Commission, Respondents and
Respondents.
No. 93-363.
Supreme Court of Montana.
Submitted Nov. 30, 1993.
Decided Dec. 28, 1993.

[263 Mont. 157] Tom K. Hopgood, Luxan & Murfitt, Helena, for petitioner and appellant.

Peter M. Meloy, Meloy Law Firm, David Rusoff, Montana Human Rights Com'n, Helena, for respondents and respondents.

GRAY, Justice.

In a case of first impression, the issue before this Court is whether an individual major medical expense insurance policy that excludes coverage for normal pregnancy and childbirth violates § 49-2-309, MCA. Unique to Montana, § 49-2-309, MCA, prohibits discrimination based solely on sex in the issuance, operation, coverage, rates or premiums of any type of insurance policy. The First Judicial District Court, Lewis and Clark County, affirmed a determination by the Montana Human Rights Commission (the Commission) that the policy issued by Bankers Life and Casualty Co. (Bankers Life)

Page 242

unlawfully discriminated against female policyholders. We affirm the District Court.

Bankers Life is an insurance company authorized to do business in Montana. Lorili Barnett, Lea Peterson, Kristi Wolf and Diane Chaidez (collectively the Charging Parties), in separate transactions, purchased a "Major Medical Expense Policy" from Bankers Life. The policies contained the following provisions at issue in this case:

BENEFIT PROVISIONS--We'll pay covered expenses incurred by a family member due to injury, sickness or mental illness.

EXCEPTIONS--This policy does not cover expenses for:

. . . . .

[263 Mont. 158] (13) Normal pregnancy and childbirth. Complications of pregnancy expenses are covered as a sickness.

In conjunction with this policy, Bankers Life offered an optional Maternity Benefits Rider which would provide coverage for normal pregnancy and childbirth expenses. The Charging Parties did not purchase the Maternity Benefits Rider.

The Charging Parties subsequently gave birth and submitted their normal maternity expenses to Bankers Life; Bankers Life denied coverage for those expenses. Pursuant to § 49-2-309, MCA, each of the Charging Parties filed a complaint with the Commission, alleging unlawful sex discrimination in an insurance policy. The four cases were consolidated and a hearing was held on January 24, 1992. The Commission issued its Findings of Fact, Conclusions of Law and Order on April 17, 1992, determining that Bankers Life had unlawfully discriminated against the Charging Parties by excluding coverage and denying benefits for normal maternity expenses.

Bankers Life petitioned the District Court for judicial review of the Commission's decision on May 8, 1992. The State of Montana, on behalf of the Commission, was granted leave to intervene in the action. After oral argument, the District Court issued its decision and order on May 19, 1993, determining that, because pregnancy occurs only to women, any classification which relies on pregnancy as the determinative criterion is a distinction based on sex. Because Bankers Life's policy excluded benefits for pregnancy and childbirth, the court concluded that the policy unlawfully discriminated against female policyholders in violation of § 49-2-309, MCA.

The parties agree that only issues of law are before this Court. Therefore, our standard of review is whether the District Court's interpretation of the law is correct. Mooney v. Brennan (1993), 257 Mont. 197, 199, 848 P.2d 1020, 1022. Thus, we focus on the District Court's interpretation of § 49-2-309, MCA, in light of the agreed facts. The legal issues before us are whether § 49-2-309, MCA, prohibits discrimination on the basis of pregnancy in a major medical expense insurance policy and, if so, whether the Bankers Life policies at issue violate the statute.

1) Does § 49-2-309, MCA, prohibit discrimination on the basis of pregnancy in a major medical expense insurance policy?

The District Court concluded that discrimination on the basis of pregnancy constitutes discrimination on the basis of sex, relying on Massachusetts Elec. Co. v. Massachusetts Comm'n Against Discrimination (1978), 375 Mass. 160, 375 N.E.2d 1192, 1198. As a result, the [263 Mont. 159] court concluded that § 49-2-309, MCA, prohibits discrimination on the basis of pregnancy. On appeal, Bankers Life contends that this conclusion is erroneous as a matter of law.

This Court has not interpreted § 49-2-309, MCA, since its passage in 1983. The statute, which is sometimes referred to as Montana's "unisex" insurance statute, provides in pertinent part:

Discrimination in insurance and retirement plans. (1) It is an unlawful discriminatory practice for any financial institution or person to discriminate solely on the basis of sex or marital status in the issuance or operation of any type of insurance policy, plan, or coverage or in any pension or retirement plan, program, or coverage, including discrimination in regard to rates or premiums and payments or benefits.

Page 243

Section 49-2-309, MCA, has no federal or sister-state counterpart. Thus, federal cases and cases from other states interpreting anti-discrimination statutes in different scenarios are not binding on this Court. Indeed, even the Montana cases discussed below involved different sections of the Montana Human Rights Act.

Bankers Life relies on General Electric Co. v. Gilbert (1976), 429 U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343, and its limited progeny, to support the assertion that pregnancy-related distinctions do not constitute sex discrimination. Gilbert held that an employee disability benefit plan which excluded benefits for pregnancy did not unlawfully discriminate on the basis of sex in violation of Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e-2(a)(1) (Title VII). Gilbert, 429 U.S. at 135, 97 S.Ct. at 407, 50 L.Ed.2d at 353. Although the language in Gilbert appears to support Bankers Life's position, Gilbert is not controlling authority for numerous reasons.

First, the United States Supreme Court's interpretation of the federal statute prohibiting sex discrimination in employment is not binding on this Court's interpretation of Montana's unisex insurance statute. See North v. Bunday (1987), 226 Mont. 247, 254, 735 P.2d 270, 275. Moreover, Congress effectively overruled Gilbert by passing the Pregnancy Discrimination Act, which amended Title VII to specifically include pregnancy as a basis of unlawful discrimination in matters of employment. 42 U.S.C. § 2000e(k). Following the passage of the Pregnancy Discrimination Act, the United States Supreme Court stated that Congress had overruled Gilbert and unequivocally held that discrimination based on a woman's pregnancy is, on its face, discrimination because of her sex. Newport News Shipbuilding & Dry [263 Mont. 160] Dock Co. v. EEOC (1983), 462 U.S. 669, 684, 103 S.Ct. 2622, 2632, 77 L.Ed.2d 89, 103.

Most importantly, like the majority of state courts, this Court refused to follow Gilbert. See Mountain States Telephone v. Comm'r of Labor (1980), 187 Mont. 22, 608 P.2d 1047. As we stated in Mountain States:

[m]ountain Bell's position fails to take into account the rather checkered history of Gilbert, including the recent significant addition to Title VII demonstrating a contrary congressional intent, and the cases decided after Gilbert, demonstrating a consistent refusal on the part of the majority of the courts to follow Gilbert.

Mountain States, 608 P.2d at...

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7 practice notes
  • Donaldson v. State, No. DA 11–0451.
    • United States
    • Montana United States State Supreme Court of Montana
    • December 17, 2012
    ...beyond the face of a classification in order to ascertain the true distinction being drawn. In Bankers Life & Cas. Co. v. Peterson, 263 Mont. 156, 866 P.2d 241 (1993), for example, this Court did not treat “normal pregnancy and childbirth” as a classification between pregnant persons an......
  • Donaldson v. State, DA 11-0451
    • United States
    • Montana United States State Supreme Court of Montana
    • December 17, 2012
    ...beyond the face of a classification in order to ascertain the true distinction being drawn. In Bankers Life & Cas. Co. v. Peterson, 263 Mont. 156, 866 P.2d 241 (1993), for example, this Court did not treat "normal pregnancy and childbirth" as a classification between pregnant ......
  • Lavalley v. E.B. & A.C. Whiting Co., No. 94-657
    • United States
    • Vermont United States State Supreme Court of Vermont
    • January 17, 1997
    ...1199 (1978); Minnesota Mining & Mfg. Co. v. State, 289 N.W.2d 396, 398-99 (Minn.1979); Bankers Life & Casualty Co. v. Peterson, 263 Mont. 156, 866 P.2d 241, 244 (1993); Castellano v. Linden Bd. of Educ., 158 N.J.Super. 350, 386 A.2d 396, 402 (Ct.App.Div.1978), rev'd in part on other......
  • Rakestraw v. California Physicians' Service, No. B115766.
    • United States
    • California Court of Appeals
    • May 31, 2000
    ...as compensation to employees, and relied on anti-discrimination-in-employment statutes. Bankers Life & Cos. Co. v. Peterson (1993) 263 Mont. 156, 866 P.2d 241 held that an individual medical insurance policy that excluded coverage for normal pregnancy and childbirth violated Montana sta......
  • Request a trial to view additional results
7 cases
  • Donaldson v. State, No. DA 11–0451.
    • United States
    • Montana United States State Supreme Court of Montana
    • December 17, 2012
    ...look beyond the face of a classification in order to ascertain the true distinction being drawn. In Bankers Life & Cas. Co. v. Peterson, 263 Mont. 156, 866 P.2d 241 (1993), for example, this Court did not treat “normal pregnancy and childbirth” as a classification between pregnant persons a......
  • Donaldson v. State, DA 11-0451
    • United States
    • Montana United States State Supreme Court of Montana
    • December 17, 2012
    ...look beyond the face of a classification in order to ascertain the true distinction being drawn. In Bankers Life & Cas. Co. v. Peterson, 263 Mont. 156, 866 P.2d 241 (1993), for example, this Court did not treat "normal pregnancy and childbirth" as a classification between pregnant persons a......
  • Lavalley v. E.B. & A.C. Whiting Co., No. 94-657
    • United States
    • Vermont United States State Supreme Court of Vermont
    • January 17, 1997
    ...1192, 1199 (1978); Minnesota Mining & Mfg. Co. v. State, 289 N.W.2d 396, 398-99 (Minn.1979); Bankers Life & Casualty Co. v. Peterson, 263 Mont. 156, 866 P.2d 241, 244 (1993); Castellano v. Linden Bd. of Educ., 158 N.J.Super. 350, 386 A.2d 396, 402 (Ct.App.Div.1978), rev'd in part on other g......
  • Rakestraw v. California Physicians' Service, No. B115766.
    • United States
    • California Court of Appeals
    • May 31, 2000
    ...as compensation to employees, and relied on anti-discrimination-in-employment statutes. Bankers Life & Cos. Co. v. Peterson (1993) 263 Mont. 156, 866 P.2d 241 held that an individual medical insurance policy that excluded coverage for normal pregnancy and childbirth violated Montana statute......
  • Request a trial to view additional results

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