Goldman v. Standard Ins. Co.

• Decision Date: 29 August 2003
• Docket Number: No. 00-16691.,00-16691.
• Citation: 341 F.3d 1023
• Parties: Patrice L. GOLDMAN, individually and on behalf of others similarly situated, Plaintiff-Appellant, v. STANDARD INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

341 F.3d 1023

Patrice L. GOLDMAN, individually and on behalf of others similarly situated, Plaintiff-Appellant, v. STANDARD INSURANCE COMPANY, Defendant-Appellee.

No. 00-16691.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted September 12, 2001 — San Francisco, California.

Submission Withdrawn November 21, 2001.

Resubmitted March 17, 2003.

Filed August 29, 2003.

COPYRIGHT MATERIAL OMITTED

Claudia Center and William C. McNeill, III, The Employment Law Center, a Project of The Legal Aid Society of San Francisco, San Francisco, CA, for the plaintiff-appellant.

Shawn Hanson and Katherine S. Ritchey, Pillsbury Winthrop LLP, San Francisco, CA, for the defendant-appellee.

Appeal from the United States District Court for the Northern District of California; Vaughn R. Walker, District Judge, Presiding. D.C. No. CV-98-01013-VRW.

Before WILLIAM A. FLETCHER, RAYMOND C. FISHER and RICHARD C. TALLMAN,^* Circuit Judges.

OPINION

FISHER, Circuit Judge:

In 1996, appellant Patrice Goldman, an attorney, applied for a disability income insurance policy with appellee Standard Insurance Company ("Standard") through a program approved by the State Bar of California and available only to its members. Standard declined to issue Goldman a policy, because she had been diagnosed as having an "Adjustment Disorder with mixed anxiety and depressed mood, DSM IV (Diagnostic and Statistical Manual of Mental Disorders) 309.28," and was participating in weekly therapy sessions with a licensed clinical social worker.¹ Standard's underwriting policy is to deny coverage for applicants with adjustment disorder until at least one year after the cessation of treatment.

Goldman initially filed suit in federal district court seeking damages and declaratory and injunctive relief for violation of the Americans With Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq.; California's Unruh Civil Rights Act, California Civil Code section 51 ("Unruh Act"); and California Business and Professions Code section 17200 et seq., but shortly thereafter she dismissed her federal complaint and filed the same claims in California state court. Standard, however, removed the case to federal court on March 13, 1998. The district court exercised its jurisdiction under 28 U.S.C. § 1331 based on the ADA claim, and its supplemental jurisdiction over the state law claims.

In December 1999, the district court granted summary judgment against Goldman. The court found that Goldman could not qualify as a disabled person under the ADA, because Standard did not regard her as presently substantially limited by her adjustment disorder but only as a person who may be substantially limited in the future. In so holding, the court relied upon the United States Supreme Court's interpretation of the ADA in Sutton v. United Air Lines, 527 U.S. 471, 482, 119 S.Ct. 2139, 144 L.Ed.2d 450 (1999), requiring a plaintiff to show she is "presently — not potentially or hypothetically — substantially limited." Id. The district court concluded that the Unruh Act incorporated the ADA definition of disability and thus Goldman also was not covered by the Unruh Act. Finally, the court rejected Goldman's claim under section 17200. Goldman appeals the entry of summary judgment on her claims under the Unruh Act and section 17200, but does not pursue her ADA claim.² We conclude that unlike the ADA as interpreted by Sutton, the definition of disability under the Unruh Act does not require a plaintiff to show that she is regarded as having a present limitation of a major life activity.³ As the California Legislature recently clarified, this was the state of California law in 1997, when Standard refused to issue Goldman a policy, and it remains the law today. We thus reverse the summary judgment on Goldman's claim under the Unruh Act and under section 17200.

Discussion

I. Standard of Review

We "review de novo a grant of summary judgment and must determine whether, viewing the evidence in the light most favorable to the nonmoving party, there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Roach v. Mail Handlers Benefit Plan, 298 F.3d 847, 849 (9th Cir.2002) (internal quotations and citation omitted). A district court's interpretation of state law is reviewed de novo. Paulson v. City of San Diego, 294 F.3d 1124, 1128 (9th Cir.2002) (en banc). We must determine what meaning the state's highest court would give the statute in question. Id.

II.

Goldman's Unruh Civil Rights Act claim

The Unruh Act provides:

All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, or medical condition are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.

Cal. Civ.Code § 51(b) (West 2003) (emphasis added). "The Unruh Civil Rights Act works to ensure that all persons receive the full accommodations of any business within California, regardless of the person's disabilities." Chabner v. United of Omaha Life Ins. Co., 225 F.3d 1042, 1050 (9th Cir.2000) (holding that the Unruh Act prohibits an insurance company from imposing unreasonable pricing differentials based on an applicant's disability).

Goldman alleges that Standard refused to issue her insurance coverage solely on the basis of her diagnosis of adjustment disorder. The Unruh Act applies to insurance companies, see Cal. Ins.Code § 1861.03(a) (West 2003), and an insurance company's refusal to provide coverage on the basis of disability may constitute a denial of "full and equal ... services" if the discrimination is not reasonable. See Chabner, 225 F.3d at 1050 ("disparities in treatment and pricing that are reasonable do not violate the Unruh Act") (citing Koire v. Metro Car Wash, 40 Cal.3d 24, 219 Cal.Rptr. 133, 707 P.2d 195 (1985)). Thus, if Goldman's adjustment disorder constitutes a disability within the meaning of the Unruh Act, then the Act may provide relief against Standard's refusal to issue a policy.

A. Goldman is disabled for the purposes of the Unruh Act.

To survive summary judgment, Goldman must first demonstrate a triable issue of fact as to whether she has a "disability" within the meaning of the Unruh Act. Thus we must determine what constitutes a disability for purposes of that Act. In 1997, when Standard refused to issue a policy to Goldman, the Act did not define the term "disability."⁴ In 2000, however, the California Legislature enacted the Poppink Act, which amended the Unruh Act to define the term as any mental or physical disability covered by the Fair Employment and Housing Act ("FEHA"), California Government Code section 12920 et seq. Cal. Civ.Code § 51(e)(1)(West 2003); see 2000 Cal. Stat. Ch. 1049 (Assembly Bill 2222, Sec. 2). FEHA includes within the definition of "mental disability" two subsections that are relevant here:

(1) Having any mental or psychological disorder or condition, such as mental retardation, organic brain syndrome, emotional or mental illness, or specific learning disabilities, that limits a major life activity.

. . .

(5) Being regarded or treated by the employer or other entity covered by this part as having, or having had, a mental or psychological disorder or condition that has no present disabling effect, but that may become a mental disability as described in paragraph (1) or (2).

Cal. Gov't Code § 12926(i)(1), (5) (West 2003) (emphasis added).

Through the help of therapy, Goldman functions effectively in her daily life and occupation as an attorney. She is not presently limited in any major life activity and — given sub-section (5) of California Government Code § 12926(i), which directly addresses a future disability — does not appear to be covered by subsection (1). Standard, however, believes that Goldman may someday be entirely prohibited from working given her diagnosis of adjustment disorder. This belief was the basis of Standard's refusal to issue Goldman a disability insurance policy. Thus, assuming the definition of disability in the 2000 amendment is applicable to Goldman, either because the amendments were intended to apply retroactively or because they merely clarified existing law, Goldman would be regarded as disabled under subsection (5) of the definition. Id. § 12926(i)(5).⁵

Standard contends that the 2000 amendments were not intended to apply retrospectively and that the amendments constituted a change rather than a clarification of existing law under the Unruh Act. According to Standard, the 1997 version of the Unruh Act incorporated the ADA definition of "disability," and thus the Supreme Court's interpretation of the ADA as requiring a person to be presently limited in a major life function must apply to the Unruh Act as well. See Sutton, 527 U.S. at 482, 119 S.Ct. 2139. Because it considered Goldman to be potentially but not presently limited by her condition, Standard argues that in 1997, Goldman did not come within the disability antidiscrimination protections of the Unruh Act.

The parties have argued extensively as to the retroactive application of the 2000 amendments. In the absence of an express retroactivity provision, California legislation is presumed to operate prospectively "unless it is very clear from extrinsic sources that the Legislature or the voters must have intended a retroactive application." In re Eastport Assocs., 935 F.2d 1071, 1079 (9th Cir.1991) (quoting Evangelatos v. Superior Court, 44 Cal.3d 1188, 1209, 246 Cal.Rptr. 629, 753 P.2d 585 (1988)). While Goldman's appeal was pending before us, the California Supreme Court took for review a case that raised the issue of whether the 2000 amendments were intended to apply retroactively. Colmenares v. Braemar Country Club, Inc., 29 Cal.4th 1019, 1024 n. 2, 130 Cal.Rptr.2d 662, 63 P.3d 220 (2003).⁶ Accordingly, we withdrew...