Krei v. State

• Decision Date: 16 March 2020
• Docket Number: 4:19-CV-3068
• Citation: 446 F.Supp.3d 499
• Parties: Kadence KREI, legally known as; Kalem Krei, Plaintiff, v. State of NEBRASKA, Jason Jackson, in his official capacity as Director of the Nebraska Department of Administrative Services; and Dannette R. Smith, in her official capacity as CEO of the Nebraska Department of Health and Human Services; Defendants.
• Court: U.S. District Court — District of Nebraska

446 F.Supp.3d 499

Kadence KREI, legally known as; Kalem Krei, Plaintiff,

v.State of NEBRASKA, Jason Jackson, in his official capacity as Director of the Nebraska Department of Administrative Services; and Dannette R. Smith, in her official capacity as CEO of the Nebraska Department of Health and Human Services; Defendants.

4:19-CV-3068

United States District Court, D. Nebraska.

Signed March 16, 2020

Susan M. Napolitano, Berry Law Firm, Lincoln, NE, for Plaintiff.

Stephanie A. Caldwell, Attorney General's Office, Lincoln, NE, for Defendants.

MEMORANDUM AND ORDER

Brian C. Buescher, United States District Judge

I. INTRODUCTION

This matter is before the Court on Defendants' Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and (6). Filing 11. Plaintiff, Kadence Krei, identifies as a transgender woman. Filing 2 at 1. Krei worked as a Developmental Technician II in the Developmental Disabilities Department for the State of Nebraska from May of 2018 to February of 2019. Filing 2 at 1. The State of Nebraska provides health insurance coverage to state employees through the Well Nebraska Health Plan ("the Nebraska Plan"). Filing 2 at 1.

According to the Amended Complaint, the Nebraska Plan includes coverage for hormone replacement, breast construction, and vaginoplasty

but specifically excludes coverage for "sex transformation operations and related services." Filing 2 at 3. Due to this exclusion, Krei filed suit and brought two causes of action against Defendants: Violation of Title VII of the Civil Rights Act of 1964 (Count I) and Violation of the Equal Protection Clause of the Fourteenth Amendment (Count II). Filing 2 at 12-14.

Defendants responded by filing the current Motion to Dismiss. Filing 11. First, Defendants argue Count II is barred by the doctrine of sovereign immunity. Filing 11 at 5. Second, Defendants assert Counts I and II are moot or that Krei lacks standing. Third, Defendants argue both Counts I and II fail to state claims for which relief can be granted. Filing 11 at 5. For the reasons discussed below, Counts I and II are dismissed.

II. BACKGROUND

Krei has a diagnosis of gender dysphoria

and identifies as a transgender woman. Filing 2 at 1, 2. According to the Amended Complaint, transgender women are individuals who were assigned male at birth but identify with a female gender identity. Filing 2 at 8. Gender Dysphoria is described in the DSM-5 as "[a] marked incongruence between one's experienced/expressed gender and assigned gender, of at least 6 months duration, as manifested by [at least two of the six listed conditions]." American Psychiatric Association, Diagnostic and Statistical Manual of Mental Disorders 452, § 302.85 (5th ed. 2013).

The legal issue in this case is whether the Nebraska Plan is required to provide Plaintiff coverage for gender-transformation surgery pursuant to Title VII of the Civil Rights Act of 1964 (Count I) and Violation of the Equal Protection Clause of the Fourteenth Amendment (Count II). As an employee of the State of Nebraska, the Nebraska Plan provided Krei's healthcare coverage from May 2018 to February 2019. Filing 2 at 1, 11. In general, the Nebraska Plan states that "[m]embers shall be entitled to Medically Necessary services and supplies, if provided by or under the direction of a Physician." Filing 2 at 11. The Nebraska Plan defines "Medically Necessary" as "[h]ealth care services or supplies needed to prevent, diagnose or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine." Filing 2 at 11. Plaintiff alleges the requested procedure is "medically necessary" under the definition of the Nebraska Plan. Filing 2 at 11. However, the Nebraska Plan categorically excludes all "[s]ervices or drugs related to gender transformations" regardless of medical necessity. Filing 2 at 11.

In 2018, Krei sought preauthorization from United Health Care, the Nebraska Plan's administrator, before scheduling a vaginoplasty

as part of her requested treatment for gender dysphoria. Filing 2 at 12. Krei's primary care physician, surgeon, and psychologist provided Krei with referrals for this procedure. Filing 2 at 12. The doctors and health care professionals involved concluded the treatment was medically necessary. Filing 2 at 12. United Health Care denied preauthorization in a letter, stating that " ‘while it may be medically necessary’ [the employee health plan] ‘specifically excludes coverage for Services (sic) or drugs related to gender transformations.’ " Filing 2 at 12 (alterations in original). Krei timely filed and then lost a first-level appeal with United Health Care because of the categorical exclusion in Defendant's health plan for "[s]ervices ... or drugs related to gender transformations." Filing 2 at 12. Krei resigned from her position with the State of Nebraska in February 2019. Filing 2 at 12.

III. STANDARDS OF REVIEW

A. Lack of Subject-Matter Jurisdiction— Fed. R. Civ. P. 12(b)(1)

"[S]overeign immunity ... is a jurisdictional threshold matter" that is properly addressed under Rule 12(b)(1). See Lors v. Dean , 746 F.3d 857, 861 (8th Cir. 2014) (quoting Harmon Indus., Inc. v. Browner , 191 F.3d 894, 903 (8th Cir. 1999) ); Brown v. United States , 151 F.3d 800, 803–04 (8th Cir. 1998). The plaintiff has the burden of proving jurisdiction exists; "[h]owever, the ‘heavy’ burden of proving mootness falls on the party asserting the case has become moot." Kennedy Bldg. Assocs. v. Viacom, Inc. , 375 F.3d 731, 745 (8th Cir. 2004) (citing Cty. of Los Angeles v. Davis , 440 U.S. 625, 631, 99 S. Ct. 1379, 59 L.Ed.2d 642 (1979) ).

"In order to properly dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the complaint must be successfully challenged on its face or on the factual truthfulness of its averments." Titus v. Sullivan , 4 F.3d 590, 593 (8th Cir. 1993) (citing Osborn v. United States , 918 F.2d 724, 729 n.6 (8th Cir. 1990) ). "In a facial challenge to jurisdiction, the court presumes all of the factual allegations concerning jurisdiction to be true and will grant the motion only if the plaintiff fails to allege an element necessary for subject matter jurisdiction." Young Am. Corp. v. Affiliated Comput. Servs. , 424 F.3d 840, 843-44 (8th Cir. 2005) (citing Titus , 4 F.3d at 593 ).

B. Failure to State a Claim— Fed. R. Civ. P. 12(b)(6)

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In order to satisfy this requirement, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Corrado v. Life Inv'rs Ins. Co. of Am. , 804 F.3d 915, 917 (8th Cir. 2015) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) ). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Barton v. Taber , 820 F.3d 958, 964 (8th Cir. 2016) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) ).

In analyzing a motion to dismiss, the Court must "accept as true all factual allegations in the complaint and draw all reasonable inferences in favor of the nonmoving party, but [is] not bound to accept as true ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements’ or legal conclusions couched as factual allegations." McDonough v. Anoka Cty. , 799 F.3d 931, 945 (8th Cir. 2015) (citations omitted) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). "When considering a Rule 12(b)(6) motion, the court generally must ignore materials outside the pleadings, but it may consider some materials that are part of the public record or do not contradict the complaint, as well as materials that are necessarily embraced by the pleadings." Ashford v. Douglas Cty. , 880 F.3d 990, 992 (8th Cir. 2018) (quoting Smithrud v. City of St. Paul , 746 F.3d 391, 395 (8th Cir. 2014) ).

IV. ANALYSIS

Krei alleges that the Nebraska Plan's prohibition on insurance coverage for "sex transformation operations and related services" 1) violates Title VII of the Civil Rights Act of 1964 and 2) violates the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. Krei seeks "[i]njunctive relief with respect to all Defendants;" "[d]eclaratory relief, including but not limited to a declaration that Defendants violated Title VII and the Equal Protection Clause;" and "[c]ompensatory, consequential, and punitive damages with respect to Defendants in an amount to be determined at trial for violation of Title VII and the Equal Protection Clause." Filing 2 at 15. Plaintiff further requests "reasonable costs and attorneys' fees pursuant to Title VII and 42 U.S.C. §§[ ] 1988, 1983, and 1981." Filing 2 at 15.

The Court will address Krei's Title VII and Equal Protection Clause claims in turn.

A. Title VII Claim

Title VII of the Civil Rights Act of 1964 provides that employers may not "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). Krei alleges she was discriminated against on the basis of sex when the State of Nebraska categorically excluded coverage for all services related to gender transformation from its insurance coverage. Filing 2 at 13. Defendants respond that Krei's Title VII claim is barred by sovereign immunity, that Krei lacks standing and/or her claim is moot, and that her cause of action fails to state a claim under Title VII. Filing 12. The Court concludes that Krei's Title VII claim cannot be dismissed on the basis of being barred by sovereign immunity or lack of standing. However, the claim is dismissed because binding Eighth Circuit precedent holds that allegations of discrimination for transgender identification or status do not fall under...