Lewis v. Aetna Life Ins. Co.

• Decision Date: 24 October 1997
• Docket Number: Civil Action No. 97-1230-A.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Harold LEWIS, Plaintiff, v. AETNA LIFE INSURANCE COMPANY, and Kmart Corporation, Defendants.

Page 1158

982 F.Supp. 1158

Harold LEWIS, Plaintiff, v. AETNA LIFE INSURANCE COMPANY, and Kmart Corporation, Defendants.

Civil Action No. 97-1230-A.

United States District Court, E.D. Virginia, Alexandria Division.

October 24, 1997.

Victor M. Glasberg, Jeanne Goldberg, Alexandria, VA, for plaintiff.

Phyllis E. Andes, John C. Fox, Craig A. Selness, Fenwick & West, LLP, Washington, DC, for Kmart.

Ronald S. Cooper, Tracy Zorpette, Brian A. Davis, Steptoe & Johnson, LLP, Washington, DC, for Aetna.

MEMORANDUM OPINION

BRINKEMA, District Judge.

Before the Court are the defendants' Motions to Dismiss, and plaintiff's Motion for Preliminary Injunction, in a case of first impression in the Fourth Circuit.

I. Factual Background

Plaintiff, Harold Lewis, is a 43 year-old Virginia resident who has suffered from severe depression since 1979.¹ After the onset of his condition, plaintiff sought and received treatment, and was able to function normally. In 1984, plaintiff obtained employment with defendant Kmart Corporation, through which he was offered and enrolled in a disability insurance plan provided by defendant Aetna. Lewis claims, and defendants do not dispute, that he paid all necessary premiums and fulfilled all other plan obligations.

In 1995, Lewis' conditioned worsened, and by March of that year he took leave from his position as Store Manager. Lewis was unable to return to work and began receiving disability benefits under the Aetna plan on September 19, 1995. Under the plan, disability payments are made to qualified recipients until they reach age sixty-five; however, the plan provides that:

After the first twenty-four months of the period of total disability, such period shall be deemed to terminate as of any date on which the total disability is caused by any condition other than a medically determinable physical impairment.... The term "medically determinable physical impairment" shall mean a physical impairment which results from anatomical or physiological abnormalities which are exclusively organic and non-psychiatric in nature and which are demonstrated by medically acceptable clinical and laboratory techniques.

Complaint at ¶ 12 (emphasis added). Aetna informed plaintiff that his condition had been classified as not "exclusively organic and non-psychiatric in nature" and that plaintiff's benefits under the plan would therefore terminate as of September 19, 1997. Plaintiff subsequently brought the present action, claiming that defendants had discriminated against him on the basis of his disability in violation of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. ("ADA"). Specifically, Lewis alleges that Kmart violated his right to terms and conditions of employment free from discrimination based on his disability, and that Aetna violated his right to public accommodation free from discrimination based on his disability under 42 U.S.C. §§ 12112 and 12102, respectively.² Plaintiff seeks to enjoin defendants from terminating his disability benefits under the plan, in addition to declaratory and other relief.³

In the motions presently before the Court, defendants seek to dismiss plaintiff's claims under Fed.R.Civ.P. 12(b)(6), and plaintiff seeks a preliminary injunction barring defendants from terminating his disability benefits pending an adjudication of his claims.

II. Discussion

A motion to dismiss pursuant to Fed. R.Civ.P. 12(b)(6) is properly granted "where, assuming the facts in the complaint are true, it is clear as a matter of law that no relief could be granted under any set of facts that could be proved consistent with the allegations." Miller v. Pulaski Sheriff's Dept., 30 F.3d 130 (4th Cir.1994). Here, assuming as true that plaintiff's insurance policy discriminates between mental and physical disabilities and the alleged facts concerning the nature of plaintiff's disability, defendants set forth three arguments for dismissal. First, plaintiff cannot bring a claim against Kmart pursuant to ADA Title I because he is not a "qualified individual with a disability." Second, plaintiff cannot bring a claim against Aetna pursuant to ADA Title III because his employee benefits plan is not a good or service purchased in a place of public accommodation within the meaning of Title III. Finally, employee benefit plan distinctions between physical and mental disabilities do not violate either Title I or Title III of the ADA.

A. Title I Standing: Plaintiff's Ability to Sue as a "Qualified Individual with a Disability"

Under the ADA, an employer may not discriminate against a "qualified individual with a disability" on the basis of that disability in the "terms, conditions, and privileges of employment." 42 U.S.C. § 12112(a). The "terms, conditions, and privileges of employment" include "[f]ringe benefits available by virtue of employment, whether or not administered by the [employer]." 29 C.F.R. § 1630.4(f) Plaintiff contends that, under a plain meaning interpretation of the above language, disability benefits provided to employees qualify as both a "privilege of employment" and a "fringe benefit available by virtue of employment" within the meaning of 42 U.S.C. § 12112(a). Consequently, plaintiff argues, disability benefits provided by an employer are subject to the protections of ADA Title I. In support, plaintiff cites Schroeder v. Connecticut General Life Ins. Co., No. 93-M-2433, 1994 WL 909636, at *1 (D.Colo. Apr.22, 1994). In Schroeder, plaintiff alleged that a disability benefits plan made available to him through his employer violated the ADA because it provided inferior coverage for mental as opposed to physical disability. Id. at *3. The court, examining the language of § 12112, reasoned that the benefit plan at issue was a term and condition of plaintiff's employment, and that plaintiff's employer was therefore prohibited from offering discriminatory plans to its employees. Id. In particular, the court noted that section 12112(b)(2) expressly prohibits an employer from "participating in a contractual or other arrangement ... [with] an organization providing fringe benefits to an employee" that has the effect of subjecting that employee to discrimination on the basis of disability. On the basis of this provision, the court concluded that plaintiff's employer was subject to the prohibitions of Title I even though the plan was actually issued by a third party insurer. Id. This interpretation appears to be consistent with the views of the EEOC, which has advocated the application of ADA Title I protection to employer-provided disability benefits. See EEOC v. CNA Ins. Co., 96 F.3d 1039, 1043 (7th Cir.1996) (EEOC seeks to enjoin former employer from terminating long term disability benefits for a person disabled by mental illness while not imposing similar limits on those with physical disabilities); Leonard F. v. Isreal Discount Bank of New York, No. 95 Civ. 6964(CLB), 1996 WL 634860, at *3 (S.D.N.Y. Sept.24, 1996) (EEOC advocates application of Title I protection for bank employee suing bank regarding disability plan which provided inferior benefits for mental as opposed to physical disability) subsequent proceedings, 967 F.Supp. 802 (S.D.N.Y.1997).

The Aetna disability plan at issue here was offered to Kmart employees as a benefit made available by virtue of their employment with Kmart. Consequently, under the plain meaning interpretation of 42 U.S.C. § 12112(a) and 29 C.F.R. § 1630.4(f) adopted in Schroeder, the Aetna plan qualifies as both a "privilege of employment" and as a "fringe benefit available by virtue of employment" within the meaning of 42 U.S.C. § 12112(a). Accordingly, the ADA prohibits Kmart from offering a "qualified individual with a disability" disability benefits that discriminate on the basis of that disability. This is true whether Kmart provides the disability benefits itself, or offers benefits issued by a third party insurer such as Aetna. See 42 U.S.C. § 12112(b)(2).

The question remains, however, as to whether Lewis is a "qualified individual with a disability." The Fourth Circuit has held that, in order to obtain relief under the protections of ADA Title I, an employee must demonstrate that he is a "qualified individual with a disability" within the meaning of the statute. See 42 U.S.C. § 12112(a); Martinson v. Kinney Shoe Corp., 104 F.3d 683 (4th Cir.1997); Carrozza v. Howard County, No. 94-1593, 1995 WL 8033, at *1 (4th Cir. Jan.10, 1995). The ADA defines a "qualified individual with a disability" as "an individual with a disability who, with or without reasonable accommodation, can perform the essential functions of the employment position that [the] individual holds or desires." 42 U.S.C. § 12111(8). Thus, in Martinson, plaintiff, a shoe store clerk who was unable to perform essential security functions because of episodic bouts of epilepsy, could not maintain suit as a "qualified individual with a disability" pursuant to ADA Title I. Martinson, 104 F.3d at 683-87. Similarly, in Carrozza, plaintiff, a typist unable to use word processing software and to perform other essential office functions because she suffered from bipolar disorder, was not a "qualified individual with a disability" for purposes of ADA Title I. Carrozza, 1995 WL 8033 at **1-2. In light of these cases, defendant Kmart contends that, because plaintiff is totally unable to perform work functions, plaintiff cannot be a "qualified individual with a disability." Consequently, defendant argues, plaintiff lacks standing to sue for violation of ADA Title I.

In support of this construction of Title I, defendant cites Parker v. Metropolitan Life Ins. Co., 875 F.Supp. 1321 (W.D.Tenn.1995), aff'd in part and rev'd in part, 99 F.3d 181 (6th Cir.1996), reh'g en banc granted, judgment vacated, 107 F.3d 359 (6th Cir.1997), reh'g en banc, 121 F.3d 1006 (6th Cir.1997), and CNA, 96 F.3d at 1039. In both cases, plaintiff-employees obtained long term disability insurance plans issued...