Weinreb v. Xerox Business Services, LLC Health and Welfare Plan

Background

Rebecca Weinreb and David H. Weinreb asserted several discrimination claims in their Second Amended Complaint, including claims under the Employee Retirement Income Security Act, Title VII, the Pregnancy Discrimination Act, the Equal Pay Act, and Section 1557 of the Affordable Care Act. Judge Deborah A. Batts had dismissed the Second Amended Complaint with prejudice on August 29, 2018, and judgment was entered the next day.

The present motion concerned only the Section 1557 sex-discrimination claim against Caremark PS Health LLC. The opinion states that David Weinreb participated in the Xerox Business Services, LLC Health and Welfare Plan and that Rebecca Weinreb was a beneficiary. Rebecca Weinreb had a disease called global diffuse adenomysis that caused severe and constant pain. The Weinrebs alleged that Caremark rescinded authorization for two fentanyl treatments, Fentora and Subsys, and ultimately denied coverage for fentanyl drugs because they were approved for cancer patients but not for Plan beneficiaries with non-cancer illnesses. They alleged that this policy interpretation discriminated against women because Rebecca’s disease affects women and resulted in inferior coverage for women compared with men.

Jurisdiction over the motion

The Weinrebs filed a notice of appeal on September 21, 2018, and filed their motion under Federal Rule of Civil Procedure 59(e) six days later. The court explained that a timely motion to alter or amend a judgment delays the effectiveness of a notice of appeal until the district court resolves the motion. Because the motion was filed 28 days after judgment, the court found it timely and concluded that it had jurisdiction to decide it. The court also stated that, if there were any doubt about jurisdiction, it would treat the motion as a request for an indicative ruling under Rule 62.1.

Reconsideration standard

The court described reconsideration under Rule 59(e) as an extraordinary remedy. It said that the Weinrebs had to show a need to prevent manifest injustice, correct a legal or factual error, consider new evidence, or account for an intervening change in controlling law. The court concluded that they had not made that showing.

Section 1557 claim

The Weinrebs principally argued that Judge Batts had applied the wrong legal standard by overlooking that Section 1557 permits private claims based on disparate impact—claims alleging that a facially neutral policy has a substantially unequal effect on a protected group. The court rejected that argument. It held that Section 1557 incorporates Title IX’s standards for sex-discrimination claims in health programs and that Title IX does not permit sex-discrimination claims based solely on disparate impact. The court therefore held that a Section 1557 sex-discrimination claim must allege intentional discrimination.

The court rejected the Weinrebs’ reliance on a Department of Health and Human Services regulation, explaining that the statute’s text was plain and unambiguous. It also found that the cited decision in Rumble did not establish that Section 1557 permits disparate-impact sex-discrimination claims and that the decision was not persuasive. The court said that Davis v. Shah was not relevant because that case involved disability-discrimination claims under the Americans with Disabilities Act and the Rehabilitation Act, not sex discrimination under Section 1557.

The court added that, even if a disparate-impact theory were available, the Second Amended Complaint did not allege enough facts to support it. The Weinrebs did not allege a disparate effect on women generally, provide statistical evidence, or allege that fentanyl was prescribed more often to men or that women seeking off-label fentanyl treatment were less likely to receive it. The court also found no sufficient allegation that Caremark intentionally discriminated based on sex or that sex discrimination was a substantial motivating factor in rescinding authorization for Fentora and Subsys.

Amended complaint and disposition

The court denied the motion to alter the judgment and reaffirmed the dismissal of the Section 1557 claim with prejudice. It also denied the motion for leave to file a new complaint. Because the judgment had not been set aside, the court said the Weinrebs could not file an amended complaint. The court further stated that amendment would be futile because the Weinrebs had amended their pleadings several times and had repeatedly failed to state a claim. Judge Koeltl directed the clerk to close the motion and transmit notice to the Court of Appeals that the motion had been denied.