Modderno v. King, 94-5400

• Decision Date: 01 July 1996
• Docket Number: No. 94-5400,94-5400
• Parties: , 64 USLW 2724, 5 A.D. Cases 749, 15 A.D.D. 22, 8 NDLR P 36 Marsha Francine MODDERNO, Appellant, v. James B. KING, Director, U.S. Office of Personnel Management Agency, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1059

82 F.3d 1059

317 U.S.App.D.C. 255, 64 USLW 2724, 5

A.D. Cases 749,

15 A.D.D. 22, 8 NDLR P 36

Marsha Francine MODDERNO, Appellant, v. James B. KING, Director, U.S. Office of Personnel Management Agency, Appellee.

No. 94-5400.

United States Court of Appeals District of Columbia Circuit.

Argued Jan. 12, 1996.

Decided April 23, 1996.

Rehearing and Suggestion for Rehearing In Banc Denied July 1, 1996.

Appeal from the United States District Court for the District of Columbia, No. 93cv01679.

Marsha F. Modderno, pro se, was on the briefs for appellant.

Sharon L. Volckhausen, student counsel, argued the cause on the side of appellant and filed the briefs for amicus curiae appointed by the court. With her on the briefs were Steven H. Goldblatt, Washington, DC, amicus curiae, Michelle J. Anderson, attorney, and Deanne L. Chun, student counsel.

Cynthia A. Schnedar, Assistant United States Attorney, argued the cause for appellee. With her on the briefs were Eric H. Holder, Jr., United States Attorney, R. Craig Lawrence, and Michael J. Ryan, Assistant United States Attorneys.

Douglas S. McDowell and Ann E. Reesman, Washington, DC, were on the brief for amicus curiae Equal Employment Advisory Council.

Before: WILLIAMS, GINSBURG and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILLIAMS.

Concurring opinion filed by Circuit Judge GINSBURG.

STEPHEN F. WILLIAMS, Circuit Judge:

Marsha Francine Modderno suffers from a mental illness that required her hospitalization from 1988 to 1991. During this period she was covered by the Foreign Service Benefit Plan by virtue of her status as the former spouse of a Foreign Service officer. In 1990 the Plan imposed a number of limitations on benefits for mental health care, limits not paralleled by similar restrictions on benefits for physical illness. Of these restrictions, the parties focus on a $75,000 lifetime maximum for mental health benefits; no one argues that the other limits (such as different thresholds for catastrophic coverage) pose any distinctive issues. Modderno claims that the limitations on mental health benefits violate § 504 of the Rehabilitation Act, 29 U.S.C. § 794, which prohibits discrimination on the basis of disability in any program conducted by an executive agency of the United States. Because the Office of Personnel Management ("OPM") accepted the Plan in the exercise of its duty to contract for federal employees' health insurance plans, see 5 U.S.C. § 8902, the Plan is subject to § 504.

The district court dismissed Modderno's complaint on the ground that it failed to state a claim upon which relief could be granted. Modderno v. King, 871 F.Supp. 40 (D.D.C.1994). Modderno appeals the dismissal, arguing first that the version of § 504 in effect at the time OPM contracted for the new limits prohibits it from imposing a limit on mental health benefits in the absence of a matching limit regarding physical illness. Alternatively, Modderno argues that a 1992 amendment of § 504, importing standards from the Americans with Disabilities Act of 1990 ("ADA") to § 504, prohibits what OPM has done.

In addition to these arguments, Modderno argues more generally that differential treatment of mental and physical illness is wrong-headed both as a matter of basic justice and from the perspective of a long-term prudential calculus. She says, for example, that "what may be perceived as providing equal benefits to all (such as providing the same mental benefits to everyone in a health care plan, for instance) is not actually providing equal benefits to all when the effect is to prevent one class from achieving equal access to fundamental rights." And she urges that "[t]he growing body of social research shows that the costs of treating the mental[ly] ill are far less than the ultimate costs of not treating them, for workers and employers alike." Whatever the merit of these broader arguments, we must leave them for resolution in other spheres, such as the political branches of government, markets, or the activities of eleemosynary institutions. Confining ourselves to Modderno's legal claims under § 504 of the Rehabilitation Act, we conclude that the district court correctly dismissed the complaint.

I. Section 504 of the Rehabilitation Act

Section 504 of the Rehabilitation Act provides:

No otherwise qualified individual with a disability in the United States ... shall, solely by reason of her or his disability, be excluded from ... participation in, be denied the benefits of, or be subjected to discrimination under any ... program or activity conducted by any Executive agency....

29 U.S.C. § 794. The government conceded for purposes of the district court's ruling on its motion to dismiss that Modderno is "otherwise qualified" to participate in the Plan (apparently as the former spouse of a covered employee) and that she is a person with a disability. See Modderno, 871 F.Supp. at 42. Thus the only question under § 504 is whether the Plan's differential treatment of mental and physical illness excludes Modderno from participation in, denies her the benefits of, or subjects her to discrimination within the meaning of the statute.

Modderno's broadest argument is that the Plan violates § 504 because it provides "unequal benefits" to persons with mental illness. Although Modderno does not offer a yardstick by which to measure inequality, we may fairly assume that the restrictions cause inequality, in some sense of the word, as between those disabled by mental illness and persons disabled only by physical impairments or not disabled at all. The question, however, is whether the probable inequality is the sort of harm the Rehabilitation Act was intended to redress. The Supreme Court has held unanimously that it is not. Alexander v. Choate, 469 U.S. 287, 105 S.Ct. 712, 83 L.Ed.2d 661 (1985). The Court in Alexander concluded that Tennessee's generalized limitations on Medicaid payments, which fell disproportionately on disabled individuals because of their greater medical needs, were not subject to challenge under § 504 merely because of that disproportion:

Section 504 seeks to assure evenhanded treatment and the opportunity for handicapped individuals to participate in and benefit from programs receiving federal assistance. The Act does not, however, guarantee the handicapped equal results from the provision of state Medicaid, even assuming some measure of equality of health could be constructed.

Id. at 304, 105 S.Ct. at 721-22 (citation omitted).

Amicus curiae for Modderno would distinguish Alexander on the principle that the limits disputed here constitute a "facial discrimination" between different types of disability (mental and other), whereas Alexander addressed an across-the-board limit on the number of inpatient hospital days for which Tennessee's Medicaid program would grant reimbursement. Because of the supposed facial discrimination, amicus argues that the disputed limits are invalid unless "supported by actuarial data."

The first difficulty with this view is that the limits contained in the Plan do not in any way track the Rehabilitation Act's definition of disability--the only ground on which the Act forbids discrimination. The Act defines an "individual with a disability" as "any person who (i) has a physical or mental impairment which substantially limits one or more of such person's major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment." 29 U.S.C. § 706(8)(B). Thus, the phrase "by reason of her or his disability" in § 504's anti-discrimination command presumably means by reason of one of the things described in (i), (ii) or (iii) of 29 U.S.C. § 706(8)(B). While the definition mentions physical and mental impairments, it appears to do so only by way of assuring that the remedies provided by the Act are comprehensive, rather than to assure any kind of equality as between sufferers of mental, as opposed to physical, disability. The statute thus focuses on disability, yet the Plan in no way uses that criterion, as would, for example, a plan that distinguished between disabling and non-disabling mental illness. Rather the Plan distinguishes between mental and physical illness--a distinction that seems no more pertinent to the concerns of the Act than would a special provision on lower back pain, so long as the provision did not distinguish between lower back pain that "substantially limit[ed] one or more of [a] person's major life activities" and lower back pain that did not have such an impact. We are of course not saying that distinctions not framed in terms of "disability" per se are ipso facto valid under the Act; Alexander's refusal to rule out disparate impact claims under the Act makes such a position impossible. See 469 U.S. at 292-99, 105 S.Ct. at 715-19. ¹ But we are saying that a plan's mere reference to a particular impairment or class of impairments, with no use of the statutory concept of disability (or some close surrogate), is not enough to catapult it into the "facially discriminatory" category.

Even if the coverage limits in the Plan were thought to constitute "facial discrimination" on the basis of disability, however, that would neither invalidate the Plan nor condition its validity on any kind of actuarial justification such as amicus proposes. Under Alexander, a covered insurance provider is clearly permitted to limit the lifetime benefits for all illness, mental and physical, to some fixed amount such as the $75,000 that OPM has adopted here for mental illness; such a limit is in principle the same as the limit on reimbursements for hospital stays in Alexander. ² A provider is thus also permitted to impose similar limits on both the lifetime benefits for mental illness and, separately, for physical illness. But according to the amicus's argument, the fact that OPM has not imposed a lifetime benefit limit for physical illness somehow...