Fletcher v. The State of Alaska

WO IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
JENNIFER FLETCHER, )
)
Plaintiff, )
)
vs. )
)
STATE OF ALASKA, )
) No. 1:18-cv-0007-HRH
Defendant. )
_______________________________________)
O R D E R
Cross-motions for Summary Judgment
Plaintiff moves for partial summary judgment.1 Defendant opposes this motion2 and
cross-moves for summary judgment.3 Defendant’s cross-motion is opposed.4 Oral argument
was requested and has been heard.
Facts
Plaintiff Jennifer Fletcher began working for defendant the State of Alaska in 2012
and was promoted to legislative librarian in 2014. Throughout her employment with
1Docket No. 28.
2Docket No. 39.
3Docket No. 35.
4Docket No. 43.
-1-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 1 of 12

defendant, plaintiff has been enrolled in defendant’s health care plan, AlaskaCare.
AlaskaCare is a self-funded health care plan which is administered by Aetna Life Insurance
Company. AlaskaCare “provides benefits for medical services and procedures that are
medically necessary and not otherwise excluded from the Plan.”5
Plaintiff is “transgender. While [she] was designated male at birth, [her] gender
identity is female.”6 Defendant admits that “[p]laintiff presents herself and wishes others to
identify her as a stereotypical ‘woman’”7 and there is no evidence that defendant ever took
issue with plaintiff’s female identity.
Plaintiff avers that she was diagnosed with gender dysphoria8 in 2014 and that “[w]ith
the assistance of that treating professional, [she] began the process of social, legal, and
5Answer to Interrogatory No. 6, State of Alaska’s First Supplemental Responses to
Plaintiff’s First Set of Interrogatories at 2, Exhibit B, Declaration of Tara L. Borelli [etc.],
Docket No. 32. The parties agree that a health care plan can exclude treatment that may be
medically necessary. The issue here is not whether the surgery which plaintiff was denied
coverage for was medically necessary but whether this denial of coverage violated plaintiff’s
Title VII rights because it was discrimination on the basis of sex.
6Declaration of Jennifer Fletcher [etc.] at 2, ¶ 6, Docket No. 29.
7Response to Request for Admission No. 7, State of Alaska’s Responses to Plaintiff’s
First Set of Requests for Admission at 3, Exhibit C, Borelli Declaration, Docket No. 32.
8Gender dysphoria is the medical condition “characterized by incongruence between
one’s experienced/expressed gender and assigned sex at birth, and clinically significant
distress or impairment of functioning that results.” Expert Declaration of Randi C. Ettner,
Ph.D. [etc.] at 6-7, ¶¶ 15-16, Docket No. 30.
-2-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 2 of 12

medical transition to live . . . as the woman that [she has] always been.”9 Plaintiff avers that
she “started hormone therapy in 2014” but that by 2016, she “knew . . . that surgery was
essential for [her] treatment and well-being.”10 There is no dispute that gender transition-
related surgery can be, and was in the case of plaintiff, medically necessary surgery.11
In November 2016, plaintiff contacted Aetna “regarding coverage and pre-
authorization for surgical treatment for gender dysphoria.”12 Plaintiff was told that
AlaskaCare excludes coverage for gender transition-related surgery and that the Plan would
continue to do so in 2017.13 Specifically, in 2017, AlaskaCare did not cover charges for
9Fletcher Declaration at 3, ¶ 10, Docket No. 29.
10Id. at 3, ¶ 12; 4, ¶ 15.
11Defendant has admitted “that surgical care could be medically necessary to treat
gender dysphoria in certain individuals.” Answer at 6, ¶ 26, Docket No. 14.
12Fletcher Declaration at 4, ¶ 16, Docket No. 29. Dr. Schechter, one of plaintiff’s
experts, avers that “while some transgender individuals do not require surgery, for many
others surgery is essential and medically necessary to alleviate their gender dysphoria.”
Expert Declaration of Loren S. Schechter, M.D. [etc.] at 9, ¶ 22, Docket No. 31 (citation
omitted).
13Exhibit A at 3, Fletcher Declaration, Docket No. 29. In 2016, defendant “engaged
Segal Consulting to review multiple issues with the State’s health plans including an analysis
of potential costs associated with expanding coverage for gender dysphoria. . . .” Response
to Request for Admission No. 23, State of Alaska’s Responses to Plaintiff’s First Set of
Requests for Admissions at 8, Exhibit C, Borelli Declaration, Docket No. 32. Segal
Consulting estimated that expanding coverage for gender dysphoria would result in “an
annual increase in total claims of $60,000.” Exhibit I at 001257, Borelli Declaration, Docket
No. 32. Defendant’s “Division of Retirement and Benefits discussed” the Segal “memoran-
dum with the Commissioner’s Office” but “[n]o further action was taken directly related to”
the Segal memorandum. Answer to Interrogatory No. 4, State of Alaska’ Responses to
(continued...)
-3-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 3 of 12

[a]ny treatment, drug, service or supply related to changing sex
or sexual characteristics, including
• Surgical procedures to alter the appearance or
function of the body.
• Hormones or hormone therapy.
• Prosthetic devices.
• Medical or psychological counseling.[14]
In 2018, AlaskaCare no longer excluded hormones, hormone therapy and counseling related
to changing sex or sexual characteristics, but continued to exclude “[s]urgical procedures to
alter the appearance or function of the body” and “[p]rosthetic devices.”15 The 2019 version
of AlaskaCare contained the same exclusions as the 2018 version of the Plan.16
In June 2017, plaintiff “obtained gender-confirming surgery, specifically vaginoplasty
and mammoplasty” in Thailand.17 Defendant admits that “[n]either ‘vaginoplasty’ nor
‘mammoplasty/breast reconstruction’ are specifically excluded” under AlaskaCare but that
13(...continued)
Plaintiff’s First Set of Interrogatories at 5-6, Exhibit A, Borelli Declaration, Docket No. 32.
14Exhibit F at 8, Declaration of Tara L. Borelli [etc.], Docket No. 32.
15Exhibit G at 8, Borelli Declaration, Docket No. 32. The fact that defendant covers
some treatment for gender dysphoria is largely irrelevant because “[a]n employer that offers
one fringe benefit on a discriminatory basis cannot escape liability because he also offers
other benefits on a nondiscriminatory basis.” Ariz. Governing Committee for Tax Deferred
Annuity and Deferred Compensation Plans v. Norris, 463 U.S. 1073, 1082 n.10 (1983).
16Exhibit H at 8, Borelli Declaration, Docket No. 32.
17Fletcher Declaration at 6, ¶¶ 19-20, Docket No. 29.
-4-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 4 of 12

gender transition-related surgery, “which may encompass one or both of these procedures[,]”
is.18
Plaintiff avers that if she “had been given access to such treatment through
AlaskaCare, I would have obtained those surgical services in the United States.”19 She
further avers that defendant’s “denial of coverage forced [her] to pay thousands of dollars
out-of-pocket, diverting funds that I would otherwise have used to continue paying off my
student loans and other debt.”20
On May 20, 2017, plaintiff filed a Title VII charge with the EEOC for sex
discrimination. On March 13, 2018, the EEOC found that defendant’s “categorical exclusion
of gender reassignment treatment and services from its health plan results in adverse
treatment of [its] employees based on sex (including gender identity), in violation of Title
VII.”21 On May 17, 2018, plaintiff was advised that “conciliation in this matter was
unsuccessful by the EEOC” and that she had ninety days in which “to commence a civil
action[.]”22
18Answer to Interrogatory No. 6, State of Alaska’s First Supplemental Responses to
Plaintiff’s First Set of Interrogatories, Exhibit B, Borelli Declaration, Docket No. 32.
19Fletcher Declaration at 6, ¶ 19, Docket No. 32.
20Id.
21Determination at 1, Exhibit C, Fletcher Declaration, Docket No. 29.
22Notice of Right to Sue Within 90 Days at 1, Exhibit D, Fletcher Declaration, Docket
No. 29.
-5-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 5 of 12

Plaintiff commenced this action on June 5, 2018. In her complaint, plaintiff asserts
a Title VII claim. Plaintiff alleges that defendant has discriminated against her because of
her “sex” which she alleges includes “discrimination on the basis of gender nonconformity,
gender identity, transgender status, and gender transition.”23 Plaintiff seeks a declaration that
defendant violated her rights under Title VII when it denied her coverage for gender
transition-related surgery and “that AlaskaCare’s blanket exclusion of [gender] transition-
related surgical treatment on its face discriminates against transgender employees because
of sex in violation of Title VII[.]”24 Plaintiff also seeks compensatory and consequential
damages.25
Plaintiff now moves for partial summary judgment in her favor and requests that the
court “find that the blanket exclusion” for gender-transition related surgery “violates the
prohibition on sex discrimination in Title VII. . . .”26 Defendant cross-moves for summary
judgment, arguing that there has been no violation of Title VII and that plaintiff’s complaint
should be dismissed.
Discussion
Summary judgment is appropriate when there are no genuine issues of material fact
23Complaint [etc.] at 14-15, ¶¶ 76-78, Docket No. 1.
24Id. at 15.
25Id.
26Plaintiff’s Motion for Partial Summary Judgment at 2, Docket No. 28.
-6-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 6 of 12

and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The
initial burden is on the moving party to show that there is an absence of genuine issues of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party meets
its initial burden, then the non-moving party must set forth specific facts showing that there
is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
In deciding a motion for summary judgment, the court views the evidence of the non-movant
in the light most favorable to that party, and all justifiable inferences are also to be drawn in
its favor. Id. at 255. “‘[T]he court’s ultimate inquiry is to determine whether the ‘specific
facts’ set forth by the nonmoving party, coupled with undisputed background or contextual
facts, are such that a rational or reasonable jury might return a verdict in its favor based on
that evidence.’” Arandell Corp. v. Centerpoint Energy Services, Inc., 900 F.3d 623, 628–29
(9th Cir. 2018) (quoting T.W. Elec. Service, Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d
626, 631 (9th Cir. 1987)). “In reviewing cross-motions for summary judgment, ‘each motion
must be considered on its own merits.’” Acosta v. City Nat’l Corp., 922 F.3d 880, 885 (9th
Cir. 2019) (quoting Fair Housing Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d
1132, 1136 (9th Cir. 2001)).
Title VII makes it unlawful for an employer “to discriminate against any individual
with respect to h[er] compensation, terms, conditions, or privileges of employment, because
of such individual’s race, color, religion, sex, or national origin[.]” 42 U.S.C. §
2000e-2(a)(1). “Health insurance and other fringe benefits are ‘compensation, terms,
-7-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 7 of 12

conditions, or privileges of employment.’” Newport News Shipbuilding and Dry Dock Co.
v. E.E.O.C., 462 U.S. 669, 682 (1983) (quoting 42 U.S.C. § 2000e-2(a)(1)).
Plaintiff has asserted a disparate treatment claim under Title VII.27 “‘Disparate
treatment’ is the most easily understood type of discrimination.” Mangold v. California
Public Utilities Com’n, 67 F.3d 1470, 1474 (9th Cir. 1995). “The employer simply treats
some people less favorably than others because of their race, color, religion,” or sex. Id.
“A plaintiff asserting disparate treatment may prove that claim in two ways.” You v.
Longs Drugs Stores Calif., LLC, 937 F. Supp. 2d 1237, 1247 (D. Hawai’i 2013). The
plaintiff may proceed under “the familiar McDonnell Douglas burden shifting framework for
Title VII . . . claims.” Surrell v. Calif. Water Service Co., 518 F.3d 1097, 1105 (9th Cir.
2008). “A plaintiff may alternatively proceed by simply producing ‘direct or circumstantial
evidence demonstrating that a discriminatory reason more likely than not motivated the
employer.’” Id. (quoting Metoyer v. Chassman, 504 F.3d 919, 931 (9th Cir. 2007)). Plaintiff
has indicated that she is relying on the second alternative.28
“A discriminatory motive may be established by the employer’s informal
decisionmaking or ‘a formal, facially discriminatory policy,’ but ‘liability depends on
whether the protected trait . . . actually motivated the employer’s decision.’” Wood v. City
of San Diego, 678 F.3d 1075, 1081 (9th Cir. 2012) (quoting Hazen Paper Co. v. Biggins, 507
27Plaintiff has confirmed that she has not raised a disparate impact claim. Plaintiff’s
Reply [etc.] at 26, Docket No. 43.
28Plaintiff’s Motion for Partial Summary Judgment at 28, n.9, Docket No. 28.
-8-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 8 of 12

U.S. 604, 610 (1993)). “‘It is insufficient for a plaintiff alleging discrimination under the
disparate treatment theory to show the employer was merely aware of the adverse
consequences the policy would have on a protected group.’” Id. (quoting Am. Fed’n of
State, Cnty., & Mun. Emps. v. Wash., 770 F.2d 1401, 1405 (9th Cir. 1985)). But, “a
discriminatory motive may in some situations be inferred from reliance on ‘a formal, facially
discriminatory policy.’” Id. (quoting Hazen, 507 U.S. at 609–10).
Defendant argues that the denial of coverage for plaintiff’s gender-transition related
surgery was not motivated by plaintiff’s sex. Defendant argues that no inference of a
discriminatory motive can be drawn here because the policy in question, the blanket
exclusion under AlaskaCare for gender transition-related surgery, is not a facially
discriminatory policy, but rather a facially neutral policy. Defendant argues that the
exclusion for gender transition-related surgery applies equally to both men and women.
Defendant argues that “[t]he critical issue, Title VII’s text indicates, is whether members of
one sex are exposed to disadvantageous terms or conditions of employment to which
members of the other sex are not exposed.” Oncale v. Sundowner Offshore Services, Inc.,
523 U.S. 75, 80 (1998) (citation omitted). Here, defendant argues that there can be no
dispute that AlaskaCare excludes gender transition-related surgery for all employees,
regardless of their sex. In short, defendant argues that the exclusion is neutral on its face
and thus plaintiff does not have a viable disparate treatment Title VII claim.
-9-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 9 of 12

This argument fails. Here, defendant has adopted and relied upon a formal, facially
discriminatory policy. Title VII “makes it unlawful ‘to discriminate against any individual
with respect to his compensation, terms, conditions, or privileges of employment, because
of such individual’s race, color, religion, sex, or national origin.’” City of Los Angeles,
Dep’t of Water and Power v. Manhart, 435 U.S. 702, 708 (1978) (quoting 42 U.S.C. §
2000e-2(a)(1)) (emphasis added). “The statute’s focus on the individual is unambiguous.
It precludes treatment of individuals as simply components of a racial, religious, sexual, or
national class.” Id. The court’s focus thus must be on how plaintiff was treated under the
provisions of AlaskaCare. As to that issue, the material facts are not in dispute. Plaintiff was
treated differently because of her natal sex. Under the provisions of AlaskaCare, “a natal
female born without a vagina qualifies for coverage of a vaginoplasty, but not the plaintiff[]
here because [her] natal sex is male.” Boyden v. Conlin, 341 F. Supp. 3d 979, 995 (W.D.
Wis. 2018). If plaintiff’s natal sex were female and it was medically necessary for her to
have a vaginoplasty to correct a congenital defect, coverage would have been available under
AlaskaCare. But, because plaintiff’s natal sex is male and she was seeking to transition to
a female, coverage was not available. Plainly, defendant treated plaintiff differently in terms
of health coverage because of her sex, irrespective of whether “sex” includes gender identity.
AlaskaCare covers vaginoplasty and mammoplasty surgery if it reaffirms an individual’s
natal sex, but denies coverage for the same surgery if it diverges from an individual’s natal
-10-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 10 of 12

sex. That is discrimination because of sex and makes defendant’s formal policy, as
expressed in the provisions of AlaskaCare, facially discriminatory.
Contrary to defendant’s contention, such a conclusion does not result in preferential
treatment for transgender individuals. Rather, it results in all AlaskaCare participants being
treated equally regardless of their sex. Also contrary to defendant’s contention, the court is
not comparing how transgender women are treated under AlaskaCare to how non-transgender
women are treated. Rather, the court is comparing how natal females are treated under
AlaskaCare to how natal males are treated. Such a comparison shows that natal males are
treated differently than natal females when it comes to providing coverage for certain
medically necessary surgeries. As the Seventh Circuit has explained, “the tried-and-true
comparative method” for determining sex discrimination is “to isolate the significance of the
plaintiff’s sex to the employer’s decision: has she described a situation in which, holding all
other things constant and changing only her sex, she would have been treated the same way?”
Hively v. Ivy Tech Community College of Indiana, 853 F.3d 339, 345 (7th Cir. 2017). Here,
plaintiff would not have been treated the same way if her natal sex were female, rather than
male.
In sum, defendant’s policy of excluding coverage for medically necessary surgery
such as vaginoplasty and mammoplasty for employees, such a plaintiff, whose natal sex is
male while providing coverage for such medically necessary surgery for employees whose
-11-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 11 of 12

natal sex is female is discriminatory on its face and is direct evidence of sex discrimination.29
Such “[d]isparate treatment is permissible under Title VII only if justified as a bona fide
occupational qualification (‘BFOQ’). A BFOQ is a qualification that is reasonably necessary
to the normal operation or essence of an employer’s business.” Frank v. United Airlines,
Inc., 216 F.3d 845, 853 (9th Cir. 2000). Defendant has not argued, nor could it, that there
is any BFOQ for the disparate treatment at issue here. As such, plaintiff is entitled to
summary judgment that defendant violated her rights under Title VII.
Conclusion
Based on the foregoing, plaintiff’s motion for partial summary judgment is granted
and defendant’s motion for summary judgment is denied.
DATED at Anchorage, Alaska, this 6th day of March, 2020.
/s/ H. Russel Holland
United States District Judge
29Because the court so concludes, it need not consider plaintiff’s argument that the
denial of coverage for her gender transition-related surgery constituted impermissible sex
stereotyping as discussed in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) and Schwenk
v. Hartford, 204 F.3d 1187 (9th Cir. 2000). The court also need not consider plaintiff’s
argument that “the exclusion discriminates based on the fact of [her] transition, which is
inescapably because of sex.” Plaintiff’s Reply [etc.] at 4, Docket No. 43.
-12-
Case 1:18-cv-00007-HRH Document 60 Filed 03/06/20 Page 12 of 12