Gays Win Another Round in Arizona DP Case

US 9th Circuit finds state must continue employee benefits while lawsuit proceeds

A three-judge panel of the US 9th Circuit Court of Appeals has strongly signaled the likelihood that the Arizona statute repealing health benefits for domestic partners of state employees will ultimately be held unconstitutional.

The September 6 ruling nixed the state’s challenge to District Judge John W. Sedwick’s preliminary injunction requiring that the benefits continue while litigation proceeds.

Tara L. Borelli, a staff attorney in Lambda Legal’s Western regional office, represents a group of Arizona state employees and their same-sex partners in arguing that the law, rescinding benefits administratively extended to domestic partners in 2008, violates the Equal Protection Clause of the US Constitution’s 14th Amendment by legislating against the interest of a particular group of citizens without any legitimate justification.

In April 2008, Arizona’s executive branch, then led by Democratic Governor Janet Napolitano, amended its Administrative Code to expand eligibility for public employee benefits to include domestic partners of employees within the definition of “dependents,” under a plan authorizing coverage for spouses and dependents of employees.

When Napolitano resigned her office to become US secretary of Homeland Security, she was succeeded by Republican Jan Brewer, who, in September 2009, signed a law –– that went into effect on January 1, 2011 –– limiting the definition of “dependent” to legal spouses and dependent children of an employee. As a result, several hundred state employees who had signed up their partners and their partners’ children for health coverage stood to lose those benefits –– though how many such employees were in same-sex rather than different-sex relationships is not known.

Lambda argued that because different-sex partners could obtain the benefits by marrying, the new definition of dependent was targeted at same-sex partners, and that there was no rational justification for singling them out in this way. (In November 2008, Arizona voters strengthened the state’s refusal to give same-sex couples the right to marry by adopting a constitutional amendment limiting marriage to unions of one man and one woman.)

Lambda sought a preliminary injunction to require the state to maintain benefits for those who had signed up until the federal district court decides the case. In seeking a preliminary injunction, plaintiffs must show both that denial of such relief would subject them to irreparable injury and that there is a strong likelihood that they would win the constitutional argument.

District Judge Sedwick refused to grant the state’s motion to dismiss and ruled the plaintiffs could keep their benefits for now.

Even though the US Justice Department and several federal trial judges have recently adopted the view that discrimination based on sexual orientation must be subjected to heightened scrutiny –– under which Arizona would have to demonstrate important policy interests that justified its law –– Sedwick decided to evaluate it under the rational basis test. The plaintiffs were required to show that the state could provide no rational explanation for the statute.

Even applying that more lenient standard, however, he found that the law failed the test. Sedwick accepted the plaintiffs’ contention that the cost of providing the benefits was minimal compared to the state’s overall spending on employee health benefits, and found that the other arguments Arizona made to support the law also failed to make any rational case for it.

The court of appeals panel agreed, in an opinion by Circuit Judge Mary M. Schroeder. Since some of the plaintiffs had medical issues that made continued health coverage crucial, they easily met the test of showing irreparable injury should their benefits be rescinded.

Regarding the plaintiffs’ likelihood of success on the merits, the state encountered a problem in its failure to provide evidence that excluding same-sex couples from coverage would make a significant difference in terms of cost.

“The court was not provided any evidence of the actual amount of benefits the state paid for same-sex partners,” Schroeder wrote, which adversely affected its credibility in arguing the statute was justified as a cost-saving measure.

The court rejected the state’s argument that the district court had improperly recognized a “constitutional right to healthcare.” Arizona need not provide insurance for its employees, but having decided to offer such benefits, “it may not do so in an arbitrary or discriminatory manner that aversely affects particular groups that may be unpopular,” Schroeder wrote.

She pointed to a 1973 equal protection case in which the US Supreme Court invalidated a federal statutory provision that adopted a definition of “household” for the food stamp program that would have denied food stamps to households where unrelated adults lived together. The legislative history showed that this stemmed from Congressional moral disapproval of unmarried cohabitation –– especially that scourge of the era: hippie communes.

If Congress aimed to help feed the hungry, the high court found, it could not exclude certain kinds of people based on their unpopularity with the electorate.

In the Arizona situation, the case was “more compelling,” Schroeder pointed out. The plaintiffs in the 1973 case “were prevented by financial circumstances from adjusting their status to gain eligibility, while same-sex couples in Arizona are prevented by operation of law” –– the ban on same-sex marriage.

The state also failed in its attempt to show that the statute aimed to promote marriage by eliminating benefits for domestic partners –– since denying partnership benefits to same-sex couples cannot promote marriage, an institution from which they are barred.

In one final swipe at the state, the appeals court panel also ruled there was no problem with Sedwick’s ruling that the plaintiffs would not have to post a bond to cover potential liability to the state if their lawsuit failed on the merits. When preliminary injunctions are issued, federal courts can require plaintiffs to put up a bond so the defendant can be reimbursed for its expenses in complying should it ultimately prevail. Sedgwick, however, used his discretion in not requiring a bond, given his view that the plaintiffs were likely to prevail at the end of the day.