Long Term Care Partners, LLC v. U.S.

• Decision Date: 05 February 2008
• Docket Number: No. 06-1930.,No. 07-1098.,06-1930.,07-1098.
• Citation: 516 F.3d 225
• Parties: LONG TERM CARE PARTNERS, LLC, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee, and Ralph Rouse, Defendant. Long Term Care Partners, LLC, Plaintiff-Appellant, v. United States of America, Defendant-Appellee, and Ralph Rouse, Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

516 F.3d 225

LONG TERM CARE PARTNERS, LLC, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee, and Ralph Rouse, Defendant.

Long Term Care Partners, LLC, Plaintiff-Appellant, v. United States of America, Defendant-Appellee, and Ralph Rouse, Defendant.

No. 06-1930.

No. 07-1098.

United States Court of Appeals, Fourth Circuit.

Argued: September 27, 2007.

Decided: February 5, 2008.

ARGUED:

Anthony F. Shelley, Miller & Chevalier, Chartered, Washington, D.C., for Appellant. Matthew Miles Collette, United States Department of Justice, Washington, D.C., for Appellee. ON

BRIEF:

Alan I. Horowitz, Miller & Chevalier, Chartered, Washington, D.C., for Appellant. Peter D. Keisler, Assistant Attorney General, Rod J. Rosenstein, United States Attorney, Marleigh D. Dover, United States Department of Justice, Washington, D.C., for Appellee.

Before WILLIAMS, Chief Judge, DUNCAN, Circuit Judge, and RAYMOND A. JACKSON, United States. District Judge for the Eastern District of Virginia, sitting by designation

Affirmed by published opinion. Judge DUNCAN wrote the opinion, in which Judge JACKSON joined. Chief Judge WILLIAMS wrote a separate opinion concurring in part and dissenting in part and concurring in the judgment.

OPINION

DUNCAN, Circuit Judge:

Long Term Care Partners, LLC ("LTC Partners") challenges the assumption of jurisdiction by the Equal Employment Opportunity Commission ("EEOC" or "Commission") over actions brought by federal employees against the Office of Personnel Management ("OPM") arising from OPM's participation in an allegedly discriminatory contract with LTC Partners. The district court dismissed LTC Partners' claim, holding that the limited exception to the finality requirement for review of administrative agency action outlined in Leedom v. Kyne, 358. U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958), did not apply. We agree and therefore affirm.

I.

Congress enacted the Long-Term Care Security Act ("LTCSA"), 5 U.S.C §§ 9001-9009, to provide long-term care insurance to eligible individuals, including federal employees, their qualified relatives, and annuitants. OPM effectuated the mandate of the LTCSA by establishing the Federal Long Term Care Insurance Program ("Program"), 5 C.F.R. pt. 875, contracting thereunder with "qualified carriers" for the provision of long-term care insurance, and regulating certain aspects of the insurers' operations. See §§ 9001-9003, 9008. Under the Program, OPM and a qualified carrier enter into a "master contract" that delineates the benefits, premiums and other terms and conditions of the insurance policies issued by the carrier. § 9003.

The Program does not provide universal coverage. § 9002(e)(3). Instead, each Individual must apply for coverage using a form prescribed by the carrier and approved by OPM. 5 C.F.R. § 875.401(a). The carrier has discretion, within the limits set forth in the master contract, to accept or reject applications. 5 U.S.C. § 9003(c); 5 C.F.R. § 875.407.¹ The carrier's eligibility determinations are subject to review "only to the extent and in the manner provided in the applicable master contract." 5 U.S.C. § 9003(c)(2). Notwithstanding this, a limited right to judicial review of the carrier's eligibility determinations exists, provided the applicant has exhausted the administrative remedies set forth in the master contract. 5 U.S.C. § 9007. Unlike the role of the carrier, OPM's role in the administration of the Program is limited. 5 C.F.R. §§ 875.106, .107. OPM does not make insurability decisions, and the regulations prohibit applicants from appealing carriers' insurability decisions to OPM. 5 C.F.R. § 875.407.

Pursuant to its authority under the LTCSA, OPM entered into a master contract with LTC Partners, a consortium created by John Hancock Life Insurance Company and Metropolitan Life Insurance Company.² The master contract sets forth LTC Partners' internal administrative appeals process as the only avenue for appeal of an insurability determination. An applicant denied coverage can submit the denial letter to his or her physician, who in turn can respond in writing to the specific bases for the denial. Upon receipt of a physician's letter, LTC Partners' underwriting staff reconsiders the original denial and issues a second decision. An applicant denied coverage at this stage can obtain an additional de novo review within LTC Partners.³ Following exhaustion of these administrative remedies, a still-aggrieved applicant may file suit against the carrier in federal district court.

In July 2002, Ralph D. Rouse, Jr., a federal employee, submitted an application for insurance to LTC Partners. The application form, designed by LTC Partners and approved by OPM, required applicants to indicate whether they used "medical devices, aids, or treatments," and listed wheelchairs as a specific example. J.A. 256. The form stated that an affirmative response to the "medical devices, aids, or treatments" question would render the applicant ineligible for coverage. Rouse, a paraplegic who used a wheelchair, responded to the question in the affirmative. Accordingly, LTC Partners denied Rouse coverage based on his use of a wheelchair, J.A. 263-64, and upheld the denial on reconsideration, J.A. 268.⁴ Instead of filing a complaint against the carrier in federal district court, as was his right under 5 U.S.C. § 9007, Rouse filed a formal EEOC administrative complaint against OPM as the agency administering the Program. In his complaint, Rouse alleged that OPM's contractual arrangement with LTC Partners, under which Rouse was denied long-term care insurance coverage, constituted unlawful discrimination by the agency.

In proceedings before an EEOC Administrative Law Judge ("ALJ"), OPM argued that Rouse's complaint should be dismissed because the EEOC did not have jurisdiction to review LTC Partners' insurability decision. The ALJ rejected this argument, finding that it "confuse[d] jurisdiction under the Americans with Disabilities Act (ADA) with eligibility determinations under the LTCSA" and holding that "the Commission has jurisdiction under the ADA to determine whether OPM has participated in a contract which makes disability-based distinctions in the eligibility requirements of its insurance plan." Rouse v. Director, Office of Personnel Management, Case No. 100-2005-00025X (E.E.O.C. October 27, 2005) (order denying OPM's motion to dismiss); J.A. 106-07. Under relevant sections of the ADA, OPM is prohibited from

participating in a contractual or other arrangement or relationship that has the effect of subjecting a covered entity's qualified applicant or employee with a disability to the discrimination prohibited by this subchapter (such relationship includes a relationship with an employment or referral agency, labor union, an organization providing fringe benefits to an employee of the covered entity, or an organization providing training and apprenticeship programs)[.]

42 U.S.C. § 12112(b)(2). The EEOC had jurisdiction to determine whether OPM discriminated against Rouse under this section of the ADA, the ALT determined, despite the limitations on review of LTC Partners' insurability decisions set forth in the LTCSA and the master contract.⁵

In two subsequent appeals, the EEOC has reinforced its view of the limited extent to which it may exercise jurisdiction in cases like Rouse. See Fornaro v. Blair, E.E.O.C. Doc. 01A53949, 2005 WL 3038227 (November 2, 2005), recons. denied sub nom. Fornaro v. Springer, E.E.O.C. Doc. 0520060303, 2007 WL 1661122 (May 24, 2007); James v. Springer, E.E.O.C. Doc. 0120054026, 2007 WL 1393631 (May 3, 2007); recons. denied, E.E.O.C. Doc. 0520070615, 2007 WL 2416692 (August 16, 2007). In each of these cases, the EEOC's Office of Federal Operations ("OFO") rejected OPM's argument that the aggrieved Program applicant's complaint was an impermissible collateral attack on an unfavorable insurance decision. In doing so, the OFO distinguished between challenges to individual coverage determinations and the propriety of the overarching contract as articulated by the statute: "Congress intended that contractual relationships of a covered employer be scrutinized for whether they discriminate against its employees who are individuals with disabilities within the meaning of the law." James, 2007 WL 1393631, at *3; see also Fornaro, 2005 WL 3038227, at *2. The OFO found "no indication in [the] language or in the legislative history [of the LTCSA] that Congress intended to authorize OPM to dispense with its non-discriminatory obligations under civil rights statutes." James, 2007 WL 1393631, at *4; see also Fornaro, 2005 WL 3038227, at *2. The OFO found that "OPM, in its contractual relationship with [LTC Partners] for the provision of this insurance, is the proper party responsible for ensuring that its contract adheres to non-discrimination statutes." James, 2007 WL 1393631, at *4, Finding EEOC jurisdiction appropriate in each case, the OFO remanded the claims for processing by the agency.⁶

On February 23, 2006, LTC Partners filed suit against the United States in federal district court. The complaint, as later amended, alleged that the EEOC had asserted jurisdiction over LTC Partners' insurability decisions in contravention of the LTCSA and its implementing regulations. LTC Partners sought (1) a declaration that the EEOC was without jurisdiction to review insurability decisions made under the Program, and (2) a permanent injunction preventing the EEOC from asserting such jurisdiction.⁷ The district court dismissed LTC Partners' challenge to the EEOC's assertion of jurisdiction, holding that the decision to entertain such matters was not "final agency action" under the Administrative Procedure Act ("APA") and did not fit the limited finality exception outlined in Leedom.⁸

II.

On appeal, the government first contends that LTC Partners lacks standing to challenge the EEOC's exercise of jurisdiction over its contractual...