[00:00:00] Speaker 04: by the court. [00:00:01] Speaker 04: The next case on calendar for argument is Pritchard versus Blue Cross Blue Shield of Illinois. [00:00:14] Speaker 04: Council, can you hear us? [00:00:16] Speaker 00: Yes, I can, Your Honor. [00:00:18] Speaker 04: All right. [00:00:18] Speaker 04: Council for Appellate, please proceed. [00:00:20] Speaker 00: Thank you, Your Honors. [00:00:24] Speaker 00: Senator Rob Hockman for Blue Cross Blue Shield of Illinois. [00:00:27] Speaker 00: A third party administrator applies a self funded health plan according to its terms. [00:00:32] Speaker 00: That's the administrator's job. [00:00:34] Speaker 00: The terms of the plan are set by the employer. [00:00:36] Speaker 00: So if an employer excludes a certain treatment for a certain diagnosis for its plan, the employer [00:00:43] Speaker 00: The administrator will deny coverage for one reason. [00:00:46] Speaker 00: The plan says do not pay for it. [00:00:48] Speaker 02: Let's assume what you're saying here basically that even if the employer requires you to do something that is patently illegal, as long as you follow that plan, that's cool. [00:01:00] Speaker 02: Let's say the plan says you can't serve Asians or black people. [00:01:06] Speaker 02: Is that okay? [00:01:07] Speaker 00: Yeah, I think there's a couple of answers to that. [00:01:11] Speaker 00: First of all, with respect, you can always sue the plan designer. [00:01:16] Speaker 00: There is, and we'll get into this later on in the argument, where the intentional discrimination requirement of Title IX, which is really what's at issue here, ultimately can be worked with under circumstances where there are very, very clear situations and where I can tell you as Blue Cross Blue Shield of Illinois, for instance, [00:01:37] Speaker 00: We would never accept such a plan for obvious reasons. [00:01:40] Speaker 00: There's no basis whatsoever for any possible way to discriminate on the basis like that. [00:01:46] Speaker 00: And so it would be hard, and I can imagine situations where people would work with counsel and through the litigation process to figure out what role the TPA had in that kind of situation. [00:01:58] Speaker 00: But none of that is present here. [00:02:00] Speaker 00: That's not how this case came forward. [00:02:02] Speaker 02: Well, be sure I understand your point here. [00:02:07] Speaker 02: It's my understanding from the record that you accepted this assignment, if you will. [00:02:14] Speaker 02: The law, I think you would agree, is clear that you cannot discriminate against the conduct being sought here without violating the law. [00:02:25] Speaker 02: Is that correct? [00:02:26] Speaker 00: Well, we actually have an argument in the back of our brief that says to the contrary. [00:02:30] Speaker 02: You're talking about reference? [00:02:32] Speaker 00: Well, no, we're talking about whether this is even discrimination on the basis of sex, because there is. [00:02:39] Speaker 00: What we do in this case is decide this case is a matter of the diagnosis at issue, the gender dysphoria diagnosis. [00:02:48] Speaker 00: That issue, of course, is up at the Supreme Court, at least in some degree. [00:02:51] Speaker 02: I think, yeah. [00:02:54] Speaker 02: Gorsuch would probably have a problem with your argument there, but let's deal with that. [00:02:59] Speaker 00: Well, it's not clear. [00:03:00] Speaker 00: And just to be clear, I mean, I'll jump to that if Your Honor is interested in that, because on the important point on that is what we do doesn't match the rationale of Bostock at all. [00:03:11] Speaker 00: We don't do anything based on anybody's gender expression. [00:03:14] Speaker 00: We don't do anything based on, and we don't even know their gender. [00:03:18] Speaker 00: All we know is the diagnosis, the gender dysphoria, and the treatment being offered for it. [00:03:23] Speaker 00: And we put those together, regardless of the kind of situations at issue, in employment discriminations, where the discrimination is always on the basis of some kind of gender expression that you wouldn't allow to somebody else. [00:03:35] Speaker 00: That's just not the case here. [00:03:36] Speaker 00: That was the basis, by the way, of the LW decision in the Sixth Circuit. [00:03:39] Speaker 00: We'll see what the Supreme Court does in that. [00:03:42] Speaker 00: But we don't think you ultimately have to go there. [00:03:44] Speaker 00: because under the regulations at issue and under the statute at issue and under the intentional discrimination standard. [00:03:53] Speaker 00: And that's where I'd like to go, Judge, if you're okay with that. [00:03:56] Speaker 04: But if you had a question, I don't want to... Before we go there, before we go to counsel, do you think that we should defer our ruling on this case until we see how the Supreme Court sorts whether or not this is discrimination at all? [00:04:08] Speaker 00: We certainly don't have any objection to that, Your Honor, Judge Rawlinson. [00:04:11] Speaker 00: I certainly don't have any problem with that. [00:04:13] Speaker 00: I do think that our primary arguments having to do with Title IX, the intentional discrimination statute, and the fact that we are an ERISA fiduciary basically spending our customers' money on their behalf and following ERISA law according to the way ERISA law expects us to follow it, that all of that can be reached without regard. [00:04:35] Speaker 00: to that, to that discrimination, without regard to that issue being decided by Scrametti. [00:04:41] Speaker 00: If you're going to go there, obviously I think it makes sense to wait there, but that's up to you, of course, Your Honor, in all due respect. [00:04:48] Speaker 00: But let me, let me jump to the real key issue here. [00:04:52] Speaker 00: You know, we think our reading of the statute flows naturally from both the statute and the long-standing decisions implementing it. [00:05:00] Speaker 00: As relevant here, Section 1557 expressly piggybacks on Title IX, [00:05:05] Speaker 00: for claims asserting sex discrimination. [00:05:07] Speaker 00: And that's the last sentence of section 1557 itself. [00:05:12] Speaker 00: The enforcement mechanisms provided for and available under such Title IX in this case apply, shall apply for purposes of this violation. [00:05:21] Speaker 00: So what that means, and this court has said this, just as Title IX requires intentional discrimination, so does section 1557 for claims asserting sex discrimination. [00:05:31] Speaker 00: So what is intentional discrimination? [00:05:33] Speaker 00: The conduct must be intentional in the sense that it must be more than merely that we were negligent, that somehow we should have known that there was discrimination. [00:05:42] Speaker 00: And that stems from the fact that Title IX is spending clause legislation, which means that what we must do, which means that it must be clear to us that the defendant is prohibited from doing what he's allowed to do. [00:05:56] Speaker 02: Did you raise the spending clause issue below? [00:06:01] Speaker 00: Well, we raised the spending clause issue as unpacking the argument having to do with where this case began. [00:06:08] Speaker 00: You might remember, Judge Smith, the case began and the regulations have sort of shifted back and forth in a variety of ways. [00:06:16] Speaker 00: And what we're trying to do now, especially in light of Loper-Brite, [00:06:19] Speaker 00: is make clear that you understand that the regulations at issue in the Obama administration, which we think are right on this issue, the 2016 regulations are absolutely right on this issue, and what the basis of that is. [00:06:33] Speaker 00: So you don't have to waive the argument to have raised this issue. [00:06:38] Speaker 00: We're now unpacking it in the way that the law requires. [00:06:42] Speaker 00: And in that regard, remember that Davis and Gebser, the Title IX cases at issue here, [00:06:46] Speaker 00: They say the standard has to ensure that the person with substantial control over the act of discriminating, the one with the ability to remedy the allegedly prohibited act, that's the one who has to act with the relevant intent. [00:06:59] Speaker 00: So let's look at this case. [00:07:01] Speaker 00: According to them, according to plaintiffs here, our position is one of facial neutrality. [00:07:07] Speaker 00: They argued in their own complaint at paragraph four, 1870 of the appendix. [00:07:14] Speaker 00: We do what the plan sponsor said to do in the plan. [00:07:17] Speaker 00: That's what they've claimed. [00:07:19] Speaker 00: And how can following our legal obligations under ERISA be both an intentional act of discrimination over which we have control to prevent? [00:07:28] Speaker 00: It's neither of those. [00:07:29] Speaker 00: We cannot control plan design. [00:07:31] Speaker 00: we can't change the plan design. [00:07:33] Speaker 00: So under the law for intentional discrimination. [00:07:36] Speaker 02: Council, you can decide whether to accept the plan, right? [00:07:40] Speaker 02: If our UNO, if it's illegal, and we take our example before, say it was a racial discrimination, and you knew it was in there, and you say, but we're not doing this plan. [00:07:51] Speaker 02: That's illegal. [00:07:51] Speaker 02: We're not going to do that. [00:07:52] Speaker 02: Why is that not true in this case? [00:07:55] Speaker 00: Because there's so many reasons why, in this case, it would be entirely not inconsistent with sex discrimination to allow this. [00:08:03] Speaker 00: There's RFRA, for one, which under this case, under the CHI plan, that's clearly established. [00:08:10] Speaker 00: The whole point of this- Wait, wait, wait. [00:08:12] Speaker 02: You're saying RFRA does apply in this private- Let me explain what I mean by that. [00:08:18] Speaker 04: Can I ask a question, counsel, before? [00:08:21] Speaker 04: Of course. [00:08:24] Speaker 04: the employer, it would not be illegal for the employer to, if the employer made the same decision that you made on this claim, it would not be legal. [00:08:37] Speaker 00: That's the point. [00:08:38] Speaker 00: That is 100% the point. [00:08:40] Speaker 00: Davis and Gebser have said under Title IX, the agent is not responsible for discrimination of the principal at issue in Title IX cases. [00:08:52] Speaker 00: Different in Title VII, Your Honor, and Judge Smith, for what it's worth, in Title VII cases the whole case would come out differently for that reason alone. [00:09:00] Speaker 00: And please, it's very, very important to remember what we're arguing for here under this provision of the statute. [00:09:06] Speaker 00: We are arguing only that the right way to do this, the right way to read ERISA, the right way to read 1557, and including to some degree RFRA as well, because it's relevant as a super statute, is to say, bring the plaintiff, bring the employer who made the design decision into the case. [00:09:26] Speaker 00: That's the way you get to- [00:09:29] Speaker 03: I'm still not clear on what your answer to the question that Judge Smith has put several times is. [00:09:42] Speaker 03: Assuming [00:09:45] Speaker 03: that someone comes to you with a proposed plan that is clearly discriminatory, such as we will not make any reimbursement to black people. [00:10:05] Speaker 03: Are you claiming that your acceptance of that plan as a Blue Cross plan does not [00:10:15] Speaker 00: uh... make you liable for discrimination i think i think such a person would be in a position where again depending on how the discrimination unfolded and how it came about i think that person would be in line in line in a certain way but what you have here judge rake i think i don't do i i understand you say this is different but i'd just wanna make sure so are you saying that the answer to my question is yes in that [00:10:45] Speaker 03: circumstance Blue Cross would be legally locked. [00:10:48] Speaker 00: If I can think of absolutely no reason why. [00:10:53] Speaker 00: a person might agree to allow this to exist under any circumstances. [00:10:59] Speaker 00: And we are far, far from that. [00:11:01] Speaker 00: But under any circumstances, it's very hard for me to imagine you wouldn't meet the deliberate and different standard under certain circumstances. [00:11:07] Speaker 00: I can't say for sure, but I can say I certainly wouldn't advise my client to go into that situation. [00:11:15] Speaker 03: I'm still thinking that what I asked was a yes or no question. [00:11:21] Speaker 03: And I think your answer is yes. [00:11:26] Speaker 00: My answer is yes. [00:11:28] Speaker 00: If I know nothing else, if I know nothing else, that person is going to satisfy under the deliberate and different standard. [00:11:37] Speaker 00: What's different here, what's very different here is the full range of circumstances available for why it's entirely lawful. [00:11:44] Speaker 00: And what you're doing is you're flipping. [00:11:46] Speaker 00: Remember, the intentional discrimination standard is not negligence. [00:11:49] Speaker 00: which means if the agent is the one who's engaged in discrimination, it's not on us because we should have known. [00:11:57] Speaker 00: It's not on us that we should have gone forward at that point and inquired into, well, do you have good reasons or bad reasons? [00:12:05] Speaker 00: Is it because you have religious reasons like CHI? [00:12:07] Speaker 00: Or is it because you have cost-related reasons? [00:12:09] Speaker 00: Or is it because you have doubt about the ultimate efficacy? [00:12:13] Speaker 00: There are all sorts of arguments that are made. [00:12:15] Speaker 00: that are perfectly legitimate under sex discrimination standards that would exclude this. [00:12:23] Speaker 00: And it's not our job as the third party administrator to be the one to have to do that. [00:12:28] Speaker 00: And that's what's critically the point. [00:12:30] Speaker 00: In the case Judge Rakoff and Judge Smith that you both put to me, it's very hard to imagine any other basis. [00:12:36] Speaker 00: for not doing that other than what you're imagining. [00:12:39] Speaker 00: I can't think of one. [00:12:40] Speaker 02: Counsel, you're obviously a very good lawyer. [00:12:41] Speaker 02: I would suggest if you ever get tired of it, you ought to go into dancing because you're really good at that. [00:12:48] Speaker 00: I'm trying. [00:12:49] Speaker 00: I'm trying very hard. [00:12:50] Speaker 00: I'm trying very hard to be clear about the roles here. [00:12:53] Speaker 00: And I see that I do go a little bit further than I should with my hands and the like. [00:12:58] Speaker 00: But thank you, Your Honor. [00:13:00] Speaker 00: Let me say before I leave the remainder of my time for rebuttal, I do want to say something very quick about the [00:13:06] Speaker 00: about the funding issue. [00:13:08] Speaker 00: The fact that Section 1557 doesn't apply to us as a matter of funding, that's yet another reason why it's appropriate to bring the plaintiff in. [00:13:16] Speaker 00: We've dealt with this in the brief, and I don't want to eat up too much of our time, but basically, unless you think [00:13:22] Speaker 00: Providing health care is the same thing as providing health insurance under the Civil Rights Restoration Act, and there's really no basis to believe that. [00:13:29] Speaker 00: It's not like insurance is some kind of random, strange thing that anybody would be concerned about without Congress knowing about it. [00:13:37] Speaker 00: You can't reach that here, and that's really the fundamental point. [00:13:42] Speaker 00: On that, a totally separate reason, by the way, Judge Rawlinson, to answer this question separate and apart from having to wait for scrimmety to be decided. [00:13:50] Speaker 00: Unless there are further questions at this time, I'd like to reserve the remainder of my time for rebuttal. [00:13:54] Speaker 00: Very quickly, what we propose is a straightforward and sensible way to give effect to all the relevant statutory concerns, deter and remedy intentional discrimination, that's what 1557 is for, maintain the TPA obligation to apply a plan according to its terms, that's what ERISA is for, and respect religious freedom and plan designers like RFRA, who can then come forward when they're sued and explain themselves. [00:14:18] Speaker 00: Thank you, Your Honors. [00:14:20] Speaker 01: Thank you. [00:14:22] Speaker 01: Council? [00:14:24] Speaker 01: Good morning, Your Honors and may it please the court. [00:14:26] Speaker 01: Omar Gonzalez-Pagan for the plaintiffs and the class. [00:14:29] Speaker 01: Your honor, this is a Section 5057 case. [00:14:32] Speaker 01: And I think the court's questions are exactly right. [00:14:35] Speaker 01: ERISA here recognizes that it must be applied and plans should be administered consistent with federal law. [00:14:45] Speaker 01: And under Section 5057 of the Affordable Care Act, the administration of a plan that contains a categorical exclusion for gender-affirming health care is a form of sex discrimination. [00:14:58] Speaker 04: Council, why didn't you sue the employer who provided the plan? [00:15:04] Speaker 04: That's the plan of the employer, not the plan of the third party administrator. [00:15:12] Speaker 04: So why didn't you sue the employer who is responsible for the provisions in the plan? [00:15:19] Speaker 01: So Your Honor, two answers to that question. [00:15:21] Speaker 01: First, it is true that the employer could be also liable under Title VII liability. [00:15:27] Speaker 01: But note that the CSI plan at issue here, for example, for CP, pertains to a beneficiary. [00:15:35] Speaker 01: And Title VII only prohibits discrimination on behalf of that individual sex, that employee sex. [00:15:41] Speaker 01: And that would be the parents. [00:15:42] Speaker 01: So Title VII, there is a case law that wouldn't have extended. [00:15:45] Speaker 04: But what about under Title IX? [00:15:48] Speaker 01: Well, Title IX, if the employer is subject to Title IX, not every employer is. [00:15:54] Speaker 04: And here we have a systemic problem where Blue Cross- For this particular case, would the employer, CHI, would they be liable under Title IX? [00:16:05] Speaker 01: Under Section 57, we would argue that they could be liable, although they may have- Why didn't you sue them? [00:16:10] Speaker 04: Why didn't you sue them then? [00:16:12] Speaker 04: If they could be liable, why wouldn't you sue them? [00:16:16] Speaker 01: Your Honor, which gets to my second point, that here we are dealing with a systemic problem where Blue Cross is actually administering nearly 400 plants from all kinds of entities that contains these exclusions. [00:16:29] Speaker 01: And us addressing that in a systemic way is why we [00:16:32] Speaker 01: We filed a case against Blue Cross as a recipient of federal financial funds subject to Section 5057. [00:16:40] Speaker 01: I will also note that Blue Cross never inquires of any of its employer customers the reasons why it is adopting a categorical exclusion. [00:16:51] Speaker 01: In fact, there is no admissible evidence. [00:16:53] Speaker 04: So what is there that would require them to canvas [00:16:59] Speaker 04: the employers to determine whether or not they're discriminated. [00:17:05] Speaker 04: Is that part of the obligation under ERISA? [00:17:08] Speaker 01: It is not, Your Honor, but it is to say that Blue Cross Blue Shield is imagining hypothetical rationales by employers as to why this is the RFRA argument, as to why they may adopt an exclusion. [00:17:20] Speaker 01: There is no admissible evidence that any of the employers has a religious belief that is being burdened. [00:17:25] Speaker 01: CHI here in particular voluntarily removed this exclusion in 2023. [00:17:31] Speaker 01: Your Honor, that is at page 71. [00:17:35] Speaker 01: of the excerpt of record from a declaration from Talisa Drake, which is Docket 195. [00:17:41] Speaker 01: And there's no evidence of any other religious employer customer. [00:17:45] Speaker 02: And so- Let me ask you this, counsel. [00:17:48] Speaker 02: You're obviously representing, you hope, a class. [00:17:51] Speaker 02: And that's where the money is, going against a class. [00:17:54] Speaker 02: You're dealing with a defendant here that's big, covers a lot of people, whereas if you shoot the individual employer, you kind of screw up the class a little bit, don't you? [00:18:04] Speaker 02: Is that why you didn't sue the employer? [00:18:06] Speaker 01: That's one of the reasons. [00:18:08] Speaker 01: We're trying to address a systemic problem. [00:18:10] Speaker 01: I would note that there's no monetary incentive. [00:18:13] Speaker 01: There's no monetary damages that are remedy that is being asked for on behalf of the class. [00:18:18] Speaker 02: Well, at this point, but under rule 23, if you had tried to join the employer in this case, wouldn't that kind of mess up your class? [00:18:29] Speaker 01: Your honor, I don't believe that it necessarily would have messed up the class because the commonality is met. [00:18:37] Speaker 01: And I will note that there's no appeal as to the class certification at issue here. [00:18:41] Speaker 01: But commonality will be met because the course of conduct by Blue Cross remains the same. [00:18:46] Speaker 01: It looks at this very simple question as, is this related to transgender health care or gender dysphoria? [00:18:53] Speaker 01: And if so, [00:18:54] Speaker 01: under the exclusions that it administers, 378 of which it actually drafted and provided to the employer. [00:19:01] Speaker 01: It would then deny coverage on its own letterhead. [00:19:06] Speaker 02: Let me ask you this. [00:19:09] Speaker 02: The 2020 rule that you referred to has now been superseded by a 2024 rule. [00:19:14] Speaker 02: What difference, if any, does that have on the outcome of this case from your perspective? [00:19:21] Speaker 01: From our perspective, Your Honor, we should just look at the statute. [00:19:24] Speaker 01: And the statute here is completely clear. [00:19:28] Speaker 01: We don't need to go into the back and forth tennis match that occurs between administrations. [00:19:33] Speaker 01: I think Loper-Brite and the Supreme Court has made clear that courts have an independent duty to look at the words of the statute in determining the scope of a statute. [00:19:42] Speaker 01: And here, Section 1557 is very clear. [00:19:46] Speaker 01: Any health program, any part of which receives federal financial assistance, [00:19:51] Speaker 01: is a covered entity. [00:19:52] Speaker 01: And Blue Cross here, not only is it part of, is that a health program as understood under the ACA and common sense, frankly. [00:20:02] Speaker 01: Well, Council, could we explore that a little bit? [00:20:06] Speaker 04: Are you saying that the provision of insurance is a health program? [00:20:11] Speaker 01: I'm saying that health insurance is an integral part to the provision of insurance, Your Honor. [00:20:16] Speaker 04: Well, that's a different question. [00:20:18] Speaker 04: It has to be a health program under the statute. [00:20:21] Speaker 04: So cite me a case that says that in the Ninth Circuit that says that provision of health insurance is a health program. [00:20:32] Speaker 01: Sure, Your Honor. [00:20:35] Speaker 01: Specifically, Smith, decided by this court, spoke of how plan benefits are designed and administered. [00:20:42] Speaker 01: It's something that is encompassed by Section 57's affirmative obligation not to discriminate in the provision of health care. [00:20:51] Speaker 01: And in fact, in Smith, this court already recognized that insurance is covered under Section 5057. [00:20:59] Speaker 04: Not only that, but how- But wasn't that based on the regulations, though? [00:21:05] Speaker 01: No, Your Honor. [00:21:06] Speaker 01: It looked at the statute as well, and I would also note that the Fourth Circuit's decision in Cato is particularly instructive here, as well as the district court decisions of the cases that went up in Cato, both with regards to the health plan at issue in West Virginia, [00:21:22] Speaker 01: which was a health plan that only received federal financial assistance as to Medicare and it still was deemed to be a covered entity and the same with the health plan in North Carolina. [00:21:37] Speaker 04: Yeah. [00:21:37] Speaker 04: Counsel, the problem with most of those cases is they grapple with the regulations as opposed to the statute. [00:21:47] Speaker 01: I don't believe that's entirely true, Your Honor. [00:21:49] Speaker 04: Which ones are solely based on the interpretation of the statute and the phrase health program? [00:22:00] Speaker 01: For example, Your Honor, in T.S. [00:22:02] Speaker 01: Heart of Cardon versus Heart of Cardon, the court noted that we don't need to look to the regulations in determining whether all the operations... What circuit is that? [00:22:10] Speaker 01: Seven circuit, Your Honor. [00:22:13] Speaker 01: Okay. [00:22:13] Speaker 01: It noted that in determining that all the operations of a covered entity are covered, we don't need to look, for example, to just to the regulations. [00:22:20] Speaker 01: We can decide that just on the basis of the statute. [00:22:23] Speaker 04: And that case said that the provision of insurance is a health program? [00:22:29] Speaker 01: No, Your Honor. [00:22:29] Speaker 01: That case is more specifically related to whether all the operations of a covered entity were covered. [00:22:36] Speaker 04: That's the difficulty I'm having trying to find some authority that says the provision of health insurance is a health program. [00:22:50] Speaker 01: I would point to Smith as being fairly clear in that regard, but not only that, the tax structure and purpose of the Affordable Care Act is entirely clear here. [00:23:04] Speaker 01: At the heart of the Affordable Care Act was Congress's desire [00:23:07] Speaker 01: to ensure equitable health care by eliminating discrimination, not just within the entire health care system, but particularly within insurance. [00:23:15] Speaker 01: And if one looks at the other provisions of the Affordable Care Act, which we would argue must be read in context and in whole with Section 1557, for example, Section 1553 of the Affordable Care Act 42 USC 18113 defines a health care entity to include a physician, a health [00:23:36] Speaker 01: a health maintenance organization, a health insurance plan, any other kind of health care facility, organization, or plan, grouping all of these entities together. [00:23:46] Speaker 01: Similarly, basic health program at section 1331 of the ACA is defined to include the provision of health plans. [00:23:58] Speaker 01: And the Public Health Service Act, as amended by the ACA, defines medical care. [00:24:04] Speaker 01: to include, quote, amounts paid for insurance for medical care. [00:24:10] Speaker 01: So, Your Honor, the context of the entirety of the ACA and the statutory language is clear here. [00:24:16] Speaker 01: Not only that, but the Section 1557 speaks to any health program or activity. [00:24:24] Speaker 01: It doesn't speak to any health provider or any health [00:24:28] Speaker 01: or any physician or any doctor, but rather it needs to be related to health care. [00:24:35] Speaker 01: I believe that a decision by the Third Circuit is particularly instructive here with regards to Title IX on education, when it noted that an education program or activity is not limited solely to educational institutions, but rather [00:24:52] Speaker 01: any entity that has, as part of its mission or work, an educational component. [00:24:59] Speaker 01: And that's DOVE v. Mercy, Your Honor, is cited within our brief, Mercy Catholic Medical Center. [00:25:07] Speaker 01: And so similarly here, a health program or activity is one which is simply health-related. [00:25:12] Speaker 01: And that is something that health insurance and the administration of health plans clearly is. [00:25:20] Speaker 04: So I'll ask you what I asked the opposing counsel. [00:25:22] Speaker 04: Do you think it would be beneficial for us to wait for the Supreme Court to perhaps clarify whether or not discrimination exists in this context? [00:25:34] Speaker 01: I don't believe so, Your Honor. [00:25:36] Speaker 01: Obviously, that is up to the court's discretion, and we defer to the court. [00:25:40] Speaker 01: But I don't believe it appropriate or necessary in this case as to sex discrimination for a few reasons. [00:25:46] Speaker 01: First, this is a statutory case. [00:25:49] Speaker 01: And Justice Gorsuch made clear that in Students for Fair Admissions [00:25:58] Speaker 01: that the statutes are meant to prohibit more clearly conduct that may be justified or can be justified under the vehicle protection clause. [00:26:08] Speaker 01: Not only that, but [00:26:11] Speaker 01: Title VII is clearly the precedent that we look to with regards to interpretation of Title IX and Section 1557. [00:26:18] Speaker 01: This court has said as much in Dovey Snyder and in Grabowski. [00:26:23] Speaker 01: And it is also true that as a statutory provision, right, it is meant to provide broader protections, broader coverage. [00:26:31] Speaker 01: The Constitutional 14th Amendment [00:26:34] Speaker 01: protections are just the floor, and statutes are meant to encompass more. [00:26:38] Speaker 01: And here, the ACA has a broad scope and purpose. [00:26:42] Speaker 01: Lastly, defenses or arguments that may limit the scope of the 14th Amendment are not applicable in the statutory context. [00:26:52] Speaker 01: For example, Geduldig. [00:26:54] Speaker 01: Geduldig is not applicable in the statutory context, as rejected by Congress when it [00:27:02] Speaker 01: It rejected both the holding and the reasoning of Gilbert as to Title VII. [00:27:08] Speaker 01: And this court in Smith actually noted, for example, that hearing loss could be a proxy for disability discrimination under Section 1557. [00:27:20] Speaker 01: And similarly here, to the extent that counsel is saying that this is about diagnosis, gender dysphoria is a clear proxy, actually a more close proxy for discrimination based on transgender status. [00:27:31] Speaker 01: Only transgender people suffer from gender dysphoria. [00:27:37] Speaker 01: So for all those reasons, Your Honor, I just don't think that LW will be the last word as to whether there is sex discrimination here. [00:27:46] Speaker 01: In fact, it would likely be inapplicable. [00:27:49] Speaker 02: Council, can I ask you one other question? [00:27:51] Speaker 02: Your colleague on the other side made a passing reference, although we didn't really discuss it very much, to RFRA. [00:28:00] Speaker 02: Is it your position that RFRA does not apply here because it's just between private parties the government's not involved? [00:28:07] Speaker 01: Certainly it is our position, Your Honor. [00:28:09] Speaker 01: It is, and we agree with the district court in that regard. [00:28:12] Speaker 01: Not just that, it is the majority view of the circuit courts here. [00:28:17] Speaker 01: Certainly this court has observed as much, if not held, in Sutton, and it has been the view of both the [00:28:25] Speaker 01: the sixth, seventh, and fourth circuits, most recently the fourth in Billard. [00:28:31] Speaker 01: And so I think that is instructive here. [00:28:35] Speaker 01: And as to the spending clause question, Your Honor, which I think you had posed as to notice, and there was an allusion to that, there is clear notice here. [00:28:45] Speaker 01: The terms of the statutes are clear. [00:28:47] Speaker 01: Blue Cross actually knows that [00:28:50] Speaker 01: administering and providing these categorical exclusions violates the statute, at least as to insured plans. [00:28:56] Speaker 01: It is actually on page 1471 of the excerpts of record when its witness discuss how Section 5057 was one of the reasons why they removed these exclusions from their insured plans. [00:29:11] Speaker 01: And not only that, but [00:29:14] Speaker 01: The notice is clearly met here, and there's no spending clause issue. [00:29:25] Speaker 01: I will also add that I believe Judge Rakoff, Your Honor, had decided Cruz v. Sucker almost eight years ago, which provided notice as to the question of whether sex discrimination, whether transgender status discrimination in the form of categorical exclusion in a plan is a form of sex discrimination. [00:29:44] Speaker 01: at almost eight years ago in SDNY. [00:29:50] Speaker 01: So, Your Honors, keeping all of that in mind, when Blue Cross Blue Shield denied coverage to plaintiffs and the members of the class for their gender-related health care, which it did on its own letterhead, and noting that it did not discriminate [00:30:03] Speaker 01: on the basis of sex or gender identity in that very denial. [00:30:06] Speaker 01: It violated its independent legal obligation not to discriminate as a recipient of federal funds under the Affordable Care Act. [00:30:16] Speaker 01: It did so for its own actions in terms of administration and enforcement of the exclusions. [00:30:23] Speaker 01: Section 1557 is a statute that governs here. [00:30:27] Speaker 01: And the textual language of that context and purpose of that statute is clear. [00:30:33] Speaker 01: The Court should not countenance Blue Cross's efforts to just watch out for its bottom line by deferring to the discriminatory preferences of its customers. [00:30:44] Speaker 01: Rather, it must reaffirm the obligation that Blue Cross has a legal obligation not to discriminate as a condition of its receipt of federal financial funds. [00:30:57] Speaker 01: should watch out for the health and well-being of the very people that the Affordable Care Act seeks to protect. [00:31:03] Speaker 01: Thank you, Your Honors. [00:31:04] Speaker 04: Thank you, Council. [00:31:05] Speaker 04: Roberto? [00:31:09] Speaker 00: Thank you, Your Honors. [00:31:09] Speaker 00: I'll be very quick, Your Honors. [00:31:11] Speaker 00: Let me start with the spending clause issue. [00:31:14] Speaker 00: First, [00:31:15] Speaker 00: Uh, no case, Your Honor. [00:31:17] Speaker 00: Judge Rawlinson says that an insurance is a provider of health care. [00:31:21] Speaker 00: We all know what provider of health care. [00:31:23] Speaker 00: I think Mr Gonzalez Pagan early on went through a series of federal statutes, including, I mean, just picking one, for instance, 42 USC section 18113 as an example. [00:31:33] Speaker 00: And if you go through and you look at all those statutes, Congress knows exactly how to refer to insurance when it means to refer to insurance. [00:31:40] Speaker 00: It's not in the Civil Rights Restoration Act. [00:31:42] Speaker 00: That's the whole point. [00:31:44] Speaker 00: It can't be the case. [00:31:45] Speaker 00: Housing is another one of the industries at issue. [00:31:49] Speaker 00: Can it be the case that providing housing insurance is providing housing? [00:31:54] Speaker 00: Nobody thinks that, and nobody would read that as a matter of the plain language. [00:31:57] Speaker 00: So that's one way to resolve this case. [00:32:00] Speaker 00: The other way to resolve this case is to go back to Title IX again. [00:32:03] Speaker 00: It's intentional discrimination statute. [00:32:05] Speaker 00: And I think I heard Mr. Gonzalez Pagan say out loud what I think we know to be true, which is he brought this action. [00:32:13] Speaker 00: against the third party administrator precisely because he doesn't want to have to go through and figure out whether the principle that we're acting upon has in fact violated section 1557. [00:32:29] Speaker 00: That might be because there might be perfectly good cost issues or other issues. [00:32:36] Speaker 00: It might also be Judge Smith because there are RFRA issues. [00:32:39] Speaker 00: Our point on that is not that we are here to assert [00:32:42] Speaker 00: We're not asking that. [00:32:44] Speaker 00: The point is, the reason why the Obama administration in 2016 read the regulation the way they did and said you have to sue the discriminator, the planned sponsor under these circumstances, is because that holistically puts it all together. [00:33:01] Speaker 00: It makes it all work. [00:33:02] Speaker 00: That's why RFRA is relevant here. [00:33:04] Speaker 00: It's relevant here because we need something that ensures that the right party is in front of the court who can provide all of the reasons rather than use what is effectively an agency rule where we're being held liable for something the agent, under many circumstances, might literally be allowed to do. [00:33:26] Speaker 02: Counsel, can I ask you this, particularly in light of what I'm right? [00:33:30] Speaker 02: Do you agree that all we really ought to be looking at here is 1557, not the 2020 or 2024 rule in terms of our understanding of what law governs here? [00:33:43] Speaker 00: I think I think you need to look at 1557 I think you need to look at Title IX, because it's obviously incorporated in through 1557 that Schmidt, and I do think to the extent it's relevant at all, and you know it's still you know obviously entitled to skid more deference and all of that. [00:33:58] Speaker 00: The fact that from 2016 all the way until 2024 the way we understood it matters quite a bit. [00:34:06] Speaker 00: In this context, consistency is a big part of what matters for Loper-Brite and whether you defer to regulations. [00:34:14] Speaker 00: And that consistency counts for something, especially here. [00:34:17] Speaker 00: Again, remember Title IX is spending legislation. [00:34:20] Speaker 00: So unless what we did is clear that what we did would violate the statute, we can't be held liable for it. [00:34:29] Speaker 00: And I want to say something else about, I think Mr. Gonzalez-Pagan also referred to the fact that we never inquire [00:34:34] Speaker 00: about people, and that's in the record, but that's at best, and that's not even a very good argument for, but at best negligence. [00:34:42] Speaker 00: And negligence isn't the statute, isn't the intent requirement here. [00:34:47] Speaker 00: And it's not because we couldn't inquire, but somebody like CHI comes to us and says there's a religious basis for it. [00:34:54] Speaker 00: Are we supposed to investigate the religious sincerity of our customers? [00:35:00] Speaker 00: That's ridiculous. [00:35:01] Speaker 00: That's not what the statute was designed to do. [00:35:04] Speaker 00: And there's one solution to all of this, and it's very simple. [00:35:07] Speaker 00: bring the employer into the case. [00:35:10] Speaker 00: You can deal with problems having to do with systemic problems that way just as well, because you're going to get an authoritative ruling one way or the other. [00:35:18] Speaker 00: You're going to get a ruling that's going to get, but you might not get a ruling depending on whether the circumstance is warranted. [00:35:24] Speaker 00: And that's really the point here. [00:35:26] Speaker 00: And that's why we think both as a matter of the statute, 1557 Title IX, the regs in addition support that. [00:35:34] Speaker 00: and common sense, all support a rule that says bring the employer into the case. [00:35:41] Speaker 04: Opposing counsel relied on our decision to support his argument. [00:35:47] Speaker 04: Do you read that case as saying that a third party administrator can be liable under? [00:35:55] Speaker 04: No. [00:35:55] Speaker 04: I didn't either. [00:35:57] Speaker 00: I agree with you on that. [00:36:01] Speaker 00: Unless there are further questions, we respectfully request that you reverse and remand. [00:36:06] Speaker 04: Thank you, counsel. [00:36:07] Speaker 04: Thank you to both counsel for your helpful arguments in this case. [00:36:11] Speaker 04: This case just argued and submitted for decision by the court.