INumber range CHAPTERN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

ANGELA HIGGINS, )

)

Plaintiff, )

and )

)

THE UNITED STATES OF )

AMERICA, )

)

Plaintiff-Intervenor, )

)

vs. ) Civil No. 99-114-DRH

)

WARRIOR INSURANCE GROUP, )

a/k/a d/b/a GALLANT INSURANCE )

COMPANY, a/k/a d/b/a VALOR )

INSURANCE COMPANY, )

)

Defendant. )

**[PLAINTIFF-INTERVENOR UNITED STATES OF AMERICA'S TRIAL
BRIEF]{.underline}**

Comes now the United States of America, by and through its attorneys, W.
Charles Grace, United States Attorney for the Southern District of
Illinois, Mark R. Niemeyer, Assistant United States Attorney, and
Heather A. Wydra, Trial Attorney for the U.S. Department of Justice, and
for its trial brief, states the following:

**[INTRODUCTION]{.underline}**

This action will be proceeding to trial based upon plaintiff-intervenor
United States of America's amended complaint. The amended complaint is
filed pursuant to Title III of the Americans With Disabilities Act of
1990 ("ADA"), 42 U.S.C. §§ 12101 [et]{.underline} [seq]{.underline}. The
United States has alleged that defendant sold Angela Higgins an
automobile insurance policy and, then, based on its belief that Ms.
Higgins has a mental disability, completely rescinded the insurance
policy and refused to insure her, in violation of the ADA.

In October of 1998, Angela Higgins applied for and initially received
automobile insurance with defendant. In November of 1998, Ms. Higgins'
automobile was stolen, and she made a claim with defendant. During the
course of the claims investigation, defendant received information from
Ms. Higgins and certain records suggesting that Ms. Higgins has a mental
disability.[^1] Based upon that information, the defendant regarded Ms.
Higgins as substantially limited in one or more major life activities;
i.e. defendant regarded her as disabled under the ADA.[^2] Defendant,
then, completely rescinded Ms. Higgins' policy (and did not pay her
claim).

In rescinding Ms. Higgins' policy, the defendant acted contrary to its
stated policies. Defendant states that, if an applicant for insurance
(with a disability) provides a report from a physician attesting to the
applicant's ability to drive safely, defendant would not refuse to
insure said individual or charge that individual higher rates. Ms.
Higgins can drive safely and provided defendant with a physician's
report so indicating. Even so, defendant rescinded Ms. Higgins' policy
on the basis that she had failed to disclosure her mental impairment and
had, therefore, made a material misrepresentation. The United States
will show that Ms. Higgins made no misrepresentation, and if she did, it
was not material; as such, the true reason for defendant's rescission
was discrimination based upon Ms. Higgins' disability.

The United States will also show that, after the lawsuit was underway,
defendant, again, acted upon its perception of Ms. Higgins' disability
and attempted to take advantage of it and settle this case for a small
amount, behind her attorney's back; defendant attempted to stop any
further participation in this matter by Ms. Higgins.

In its amended complaint, the United States has alleged that Ms. Higgins
has a mental disability, has a record of a mental disability, and/or
defendant regarded her as having a mental disability, as defined by the
ADA. At trial, the United States will proceed only on the theory that
the defendant regarded Ms. Higgins as having a mental disability, as
defined by the ADA. The United States elects not to proceed and prove
that Ms. Higgins has an actual mental disability or a record of such.
While Ms. Higgins does have a mental impairment, the United States
believes that proceeding upon and proving such other theories, in
addition to the "regarded as" theory, would over-complicate this case;
the important issues in this case are defendant's knowledge, perceptions
and actions. The United States having made such an election, any
evidence which the defendant seeks to admit regarding the lack of or
absence of an actual disability on the part of Ms. Higgins is irrelevant
and immaterial; the United States objects to the admission of same. The
only evidence now relevant to Ms. Higgins' disability is evidence as to
whether defendant regarded Ms. Higgins as having a disability.

The United States submits this trial brief to discuss the following
legal and factual issues: the "regarded as" theory under the ADA; the
fact that the United States will not be proceeding on an actual
disability theory and, therefore, evidence as to Ms. Higgins' lack of
actual disability is irrelevant and inadmissible; the definition of
"substantially limited in a major life activity;" the question as to
whether a public accommodation is involved; the United States' theories
of discrimination; the merits of defendant's "material
misrepresentation" explanation; and the awarding of relief, including
damages.

**I. [Title III Overview]{.underline}**

Congress enacted the ADA "to provide a clear and comprehensive national
mandate for the elimination of discrimination against individuals with
disabilities." [See]{.underline} 42 U.S.C. § 12101(b)(1). The ADA
contains three titles, which prohibit discrimination in employment
(Title I, §§ 12111-12117), public services (Title II, §§ 12131-12182
12165), and public accommodations (Title III, §§ 12181-12189). This
action arises under Title III, which prohibits discrimination by public
accommodations. Specifically, Title III provides:

> No individual shall be discriminated against on the basis of
> disability in the full and equal enjoyment of the goods, services,
> facilities, privileges, advantages, or accommodations of any place of
> public accommodation by any person who owns, leases (or leases to), or
> operates a place of public accommodation.

42 U.S.C. § 12182(a). The United States intervened in this Title III
action to further the ADA's purpose "to ensure that the Federal
Government plays a central role in enforcing the standards established
in this Act on behalf of individuals with disabilities." 42 U.S.C. §
12101(b)(3).

To succeed in its Title III claim, the United States must show three
things. First, the United States must show that Ms. Higgins has a
"disability" as defined by the ADA. The statute defines "disability" as
(1) "a physical or mental impairment that substantially limits one or
more of the major life activities of such individual"; 2) "a record of
such an impairment"; or (3) "being regarded as having such an
impairment." 42 U.S.C. § 12102(2). The United States will show at trial
that Ms. Higgins satisfies the third prong of that definition.

Second, the United States must show that defendant is a "public
accommodation" as defined in Title III. Because defendant is an
insurance company offering its goods and services ([i.e.]{.underline},
insurance coverage) to the public, it is a "public accommodation."
[See]{.underline} 42 U.S.C. § 12181(7)(F); [Doe v. Mutual of Omaha Ins.
Co.]{.underline}, 179 F.3d 557, 559 (7^th^ Cir. 1999), [cert.
denied]{.underline}, 2000 WL 12573 (Jan 10, 2000).

Finally, the United States must show that defendant discriminated
against Ms. Higgins on the basis of disability in the full and equal
enjoyment of defendant's insurance coverage. [See]{.underline} 42 U.S.C.
§ 12182(a). At trial, the United States will show that in rescinding Ms.
Higgins' policy because of her disability, defendant discriminated
against Ms. Higgins in the following ways:[^3]

1.  Defendant denied Ms. Higgins "the opportunity . . . to participate
    in or benefit from" its goods and services. [See]{.underline} 42
    U.S.C. § 12182(b)(1)(A)(i); 28 C.F.R. § 36.202(a).

2.  Defendant afforded Ms. Higgins "the opportunity to participate in or
    benefit from" goods and services that were "not equal to that
    afforded to other individuals." [See]{.underline} 42 U.S.C. §
    12182(b)(1)(A)(ii); 28 C.F.R. § 36.202(b).

3.  Defendant "impos\[ed\] or appli\[ed\] eligibility criteria that
    screen out or tend to screen out an individual with a disability or
    any class of individuals with disabilities from fully and equally
    enjoying" its goods and services. [See]{.underline} 42 U.S.C. §
    12182(b)(2)(A)(i); 28 C.F.R. § 36.301(a).

4.  Defendant "utilize\[d\] standards or criteria or methods of
    administration (i) that have

> the effect of discriminating on the basis of disability; or (ii) that
> perpetuate the discrimination of others who are subject to common
> administrative control." [See]{.underline} 42 U.S.C. § 12182(b)(1)(D);
> 28 C.F.R. § 36.204.

**II. [Ms. Higgins Is an "Individual with a Disability" as Defined by
the ADA.]{.underline}**

As mentioned, the United States must, first, show that Ms. Higgins has a
disability as defined by the ADA. The United States need only prove that
Ms. Higgins satisfies one of the three prongs of the ADA's disability
definition. The United States will show that Ms. Higgins is covered by
the third prong of the disability definition: defendant regarded her as
having a mental impairment that substantially limits one or more major
life activities. The United States has chosen not to show that Ms.
Higgins has an actual disability or a record of disability and will
focus on defendant's knowledge and perceptions, as well as its actions
based upon said knowledge and perceptions, without having to delve into
Ms. Higgins' mental history. The United States having made such an
election, any evidence that defendant seeks to admit regarding the lack
of or absence of an actual disability on the part of Ms. Higgins is
irrelevant and immaterial; the United States objects to the admission of
same. The only evidence now relevant to Ms. Higgins' disability is
evidence as to whether Ms. Higgins was regarded as having a disability
by defendant.

> **A. [Definition of Disability Under the ADA.]{.underline}**

To be covered under the ADA, a plaintiff must show that she has (or, in
this case, was regarded as having) (1) "a physical or mental impairment"
that (2) "substantially limits" (3) one or more "major life activities."
[See]{.underline} 42 U.S.C. § 12102(2). The terms Congress used in this
definition are broad. The ADA does not expressly define the phrases
"physical or mental impairment," "substantially limits," and "major life
activities." [Bartlett v. New York State Board of Law
Examiners]{.underline}, 156 F.3d 321, 327 (2^nd^ Cir. 1998), [overturned
on other grounds]{.underline}, 119 S. Ct. 2388 (1999). We have guidance
as to the meaning of these terms, however, from the regulations
promulgated by the Department of Justice and the EEOC, as well as from
courts interpreting the ADA.[^4]

> **1. [Mental Impairment]{.underline}**

Generally speaking, "impair" means "to decrease in strength, value,
amount or quality." [Webster\'s Third New International Dictionary of
the English Language]{.underline} (1994). Regulations promulgated by the
Department of Justice define "mental impairment" as "any mental or
psychological disorder such as mental retardation, organic brain
syndrome, emotional and mental illness, and specific learning
disabilities." [Bartlett]{.underline}, 156 F.3d at 328; 28 C.F.R. §
36.104. Defendant regarded Ms. Higgins as having both mental retardation
and a learning disability. Therefore, this Court should find that she
was regarded as suffering from a mental impairment.

> **2. [Substantially Limits]{.underline}**

The Department of Justice's regulations do not define the phrase
"substantially limits." [Bartlett]{.underline}, 156 F.3d at 328. The
Preamble to those regulations, however, explains that a substantial
limitation occurs "when the individual\'s important life activities are
restricted as to the conditions, manner, or duration under which they
can be performed in comparison to most people." 28 C.F.R. Pt. 36, App.
B, 600-601 (1997). Similarly, under Title I, "substantially limits" is
defined as "significantly restricts as to the condition, manner, or
duration under which an individual can perform a particular major life
activity as compared to the condition, manner, or duration under which
the average person in the general population can perform the same major
life activity." 29 C.F.R. § 1630.2(j)(1)(ii). Substantial limitations
need not rise to the level of utter inabilities. [See]{.underline}
[Bragdon v. Abbott]{.underline}, 118 S. Ct. 2196, 2206 (1998); [Taylor
v. Phoenixville Sch. District]{.underline}, 184 F.3d 296, 307 (3^rd^
Cir. 1999). EEOC guidelines under Title I state that whether an
impairment substantially limits a major life activity is determined in
light of: 1) the nature and severity of the impairment, 2) its duration
or expected duration, and 3) its permanent or expected permanent or long
term impact. [See]{.underline} [Dutcher v. Ingalls
Shipbuilding]{.underline}, 53 F.3d 723, 726 (5^th^ Cir. 1995).

The Seventh Circuit has observed that in some cases the terms
"substantially limited" and "major life activity" (discussed in the next
section) are interrelated and should not be treated as two separate
criteria. [See]{.underline} [United States v. Happy Time Day Care
Center]{.underline}, 6 F. Supp. 2d 1073, 1080 (W.D. Wis. 1998). This is
particularly the case when the major life activity implicated
encompasses a broad range of lesser activities. For example, as will be
discussed below, caring for one's self is a major life activity that
includes a wide range of lesser activities. Therefore, a determination
as to whether an individual is substantially limited in caring for one's
self requires a determination based upon the cumulative effect of
overall impairment. [See]{.underline} [id.]{.underline} at 1081;
[see]{.underline} [also]{.underline} [Vande Zande v. Wisconsin
Department of Administration]{.underline}, 44 F. 3d 538, 544 (7^th^ Cir.
1995).

> **3. [Major Life Activities]{.underline}**

The Department of Justice's regulations do not expressly define "major
life activities," but they do provide a list of illustrative, but not
exhaustive, examples of major life activities: "major life activities
means functions such as caring for one\'s self, performing manual tasks,
walking, seeing, hearing, speaking, breathing, learning, and working."
28 C.F.R. § 36.104. The range of activities Congress sought to include
in this definition is extremely broad: as one court of appeals reasoned,
the "plain meaning of the word \'major\' denotes comparative importance"
or "significance," and the term "life" is "notable for its breadth."
[Abbott v. Bragdon]{.underline}, 107 F.3d 934, 939-40 (1st Cir. 1997),
[cert. granted]{.underline}, 118 S. Ct. 554 (1997); [see
also]{.underline} [Doe v. Kohn, Nast & Graf]{.underline}, 862 F. Supp.
1310,1320 (E.D. Pa. 1994) (holding that "the term \'major life
activities\' \*\*\* encompasses a lot \[and includes\] the various major
activities embraced within the full scope of one\'s life").

In addition to the examples listed in the regulations, there are several
other activities that courts have held to be "major life activities
under the ADA." These include thinking, [see]{.underline} [Taylor v.
Phoenixville School District]{.underline}, 184 F.3d 296, 307 (3^rd^ Cir.
1999); [DeMar v. Car-Freshener Corp.]{.underline}, 49 F.Supp. 2d 84, 89
(N.D.N.Y. 1999), and reading, [see]{.underline} [Bartlett]{.underline},
156 F.3d at 328-29.

Some major life activities, such as "caring for one's self" and working,
encompass numerous, overlapping daily activities. For example, as the
Second Circuit Court of Appeals has explained, "\[c\]aring for one's
self" encompasses normal activities of daily living including feeding
one's self, driving, grooming, and cleaning the home. [See]{.underline}
[Ryan v. Grae & Rybacki, P.C.]{.underline}, 135 F.3d 867, 871 (2^nd^
Cir. 1998); [see also]{.underline} [Bilodeau v. Mega
Industries]{.underline}, 50 F. Supp. 2d 27, 36 (D. Me. 1999) (one who
has difficulty sleeping, eating, concentrating, and who is severely
emotional can be considered substantially limited in the major life
activity of caring for one's self). Many courts look to numerous daily
activities to determine whether an individual is "substantially limited
in a major life activity"; driving is often included as one of those
daily activities. [See]{.underline}, [e.g.]{.underline}, [Dutcher v.
Ingalls Shipbuilding]{.underline}, 53 F.3d 723, 726 (5^th^ Cir. 1995)
(plaintiff not substantially limited in performance of normal daily
activities because she could "feed herself, drive a car, attend to her
grooming, carry groceries, wash dishes, vacuum, and pick up trash");
[Hoppes v. Pennsylvania Fish and Boat Commission]{.underline}, 32 F.
Supp. 2d 770 (M.D. Pa. 1998) (plaintiff was able to perform the major
life activities of driving, working, caring for himself and his family,
communicating and performing other tasks of daily living); [Carlson v.
Inacom Corp.]{.underline}, 885 F. Supp. 1314 (D. Neb.1995) (plaintiff
found to be disabled due to her inability to care for her infant son,
drive a car, or concentrate on work when suffering from migraine
headaches); [see also]{.underline} [Perez v. Philadelphia Hous.
Auth.]{.underline}, 677 F. Supp. 357 (E.D. Pa. 1987) (plaintiff found to
be disabled under the Rehabilitation Act where she was substantially
limited in her ability, [inter alia]{.underline}, to drive).
Additionally, one court has held that being unable to drive in general,
or having a record of such, constitutes a substantial limitation in the
major life activity of working, when the job in question required
driving. [See]{.underline} [Stensrud v. Szabo Contracting
Co.]{.underline}, 1999 WL 592110, \*5 (N.D.Ill. August 2, 1999).

The law as to the major life activity of working has been developed to a
greater extent than any other major life activity. An individual is
substantially limited in working if he or she is \"significantly
restricted in the ability to perform \[i\] either a class of jobs or
\[ii\] a broad range of jobs in various classes as compared to the
average person having comparable training, skills and abilities." 29
C.F.R. 1630.2(j)(3)(i) (1995). Thus, there are two alternative means for
a plaintiff to prove that the defendant regarded her as substantially
limited in working. First, the plaintiff can show that she was perceived
as significantly restricted in the ability to perform \"a class of
jobs.\" [Id.]{.underline} Alternatively, the plaintiff can demonstrate
she was perceived as having a significant restriction in the ability to
perform \"a broad range of jobs in various classes.\" [Id.]{.underline}
Either showing is sufficient to establish a substantial limitation.
Because defendant regarded Ms. Higgins as unable to work, in general,
she will be able to satisfy either means.

In sum, the Court should determine that learning, working, reading,
thinking, caring for one's self, and the ability to perform daily
activities (including driving), are all major life activities, and the
Court should instruct the jury as such.

**B. [Defendant Regarded Ms. Higgins as an Individual with a
Disability.]{.underline}**

The third prong of the ADA's definition of disability ("being regarded
as having such an impairment") may be satisfied when a person has a
mental impairment "that does not substantially limit major life
activities but that is treated by a private entity as constituting such
a limitation." 28 C.F.R. § 36.104 subpart (4)(i). Additionally, this
third prong of the disability definition is satisfied where a person has
an impairment that substantially limits major life activities only \"as
a result of the attitudes of others toward such impairment.\" 28 C.F.R.
§ 36.104 subpart (4)(ii). Under these tests, it is immaterial whether an
impairment in fact limits a person\'s major life activities.
[See]{.underline} [Holihan v. Lucky Stores, Inc.]{.underline}, 87 F.3d
362, 366 (9th Cir. 1996) (affirming dismissal of claim based on failure
to satisfy first prong of disability definition but reversing dismissal
of "regarded as" claim because evidence would support finding that
employer believed plaintiff to have a disabling impairment).

In the case at bar, the United States will show that defendant received
information that Ms. Higgins was not working and was receiving SSI
benefits. It will further show that, based on this information,
defendant believed that Ms. Higgins was substantially limited in the
major life activity of working. In addition, the United States will show
that defendant received information that Ms. Higgins had a learning
disability and mild mental retardation and, in fact, generated its own
records stating that Ms. Higgins had a learning disability and/or mental
retardation. The United States will further show that, based on this
information, defendant believed Ms. Higgins to be substantially limited
in the major life activities of learning, [see]{.underline} 28 C.F.R.
Part 36, Appendix B at p. 584 (1994) ("A person who is mentally retarded
is substantially limited in the major life activity of learning."), as
well as thinking, working, driving, reading, and caring for herself.

Finally, the United States will show that defendant rescinded Ms.
Higgins' automobile insurance policy and refused to pay her claim
because they regarded her as having a disability, in violation of Title
III of the ADA. The defendant also tried to persuade Ms. Higgins to
settle this case for a small amount, without her attorney, based on its
perception of her disability.

The ADA provision protecting individuals who are \"regarded as\"
disabled was taken from an identical provision in the Rehabilitation
Act. [See]{.underline} [Chandler v. City of Dallas]{.underline}, 2 F.3d
1385, 1391 & n.18 (5th Cir. 1993). While this case does not involve a
decision regarding employment, Congress' reasoning regarding employment
decisions is applicable. As Congress explained, the \"rationale for
\[the \"regarded as\" test\] was clearly articulated\" by the Supreme
Court in [School Board of Nassau County v. Arline]{.underline}, 480 U.S.
273 (1987), where the Court addressed the similar provision of the
Rehabilitation Act . S. Rep. No. 101- 116, at 23. The Court stated that
under the \"regarded as\" test, \"an impairment might not diminish a
person\'s physical or mental capabilities, but could nevertheless
substantially limit that person\'s ability to work as a result of the
negative reactions of others to the impairment.\" [Arline]{.underline},
480 U.S. at 283. The Court therefore concluded that \"\[a\]llowing
discrimination based on the . . . effects of a\[n\] . . . impairment
would be inconsistent with the basic purpose of \[the Rehabilitation
Act\], which is to ensure that handicapped individuals are not denied
jobs or other benefits because of the prejudiced attitudes or the
ignorance of others.\" [Id.]{.underline} The Supreme Court explained
Congress\'s purpose in adding the \"regarded as\" protection: \"Congress
acknowledged that society\'s accumulated myths and fears about
disability and disease are as handicapping as are the physical
limitations that flow from actual impairment.\" [Id.]{.underline} at
284.

In passing the ADA, Congress reaffirmed [Arline]{.underline}\'s holding
that \"discrimination on the basis of mythology\" was \"precisely the
type of injury \[the \"regarded as\" provision\] sought to prevent.\"
[Id.]{.underline} at 285; [see]{.underline}, [e.g.]{.underline}, H.R.
Rep. No. 485, Pt. 2, 101st Cong., 2d Sess. 53 (1990); H.R. Rep. No. 485,
Pt. 3, 101st Cong., 2d Sess. 30 (1990). Moreover, the Preamble to the
Title III regulations counsels that "\[a\] person would be covered under
\[the regarded as\] test if a restaurant refused to serve that person
because of a fear of \'negative reactions\' of others to that person."
28 C.F.R. Pt. 36, App. B, at 612 (1997).

The ADA \"is premised on the obligation of \[entities\] to consider
people with disabilities as individuals and to avoid prejudging what an
\[individual\] can or cannot do on the basis of that individual\'s
appearance or any other easily identifiable characteristic, or on a
preconceived and often erroneous judgment about an individual\'s
capabilities based on \`labeling\' of that person as having a particular
kind of disability.\" H.R. Rep. No. 485, Pt. 2, [supra]{.underline}, at
58. An entity who refuses goods or services to an individual because of
an untested assumption about the limitations imposed by the
individual\'s physical or mental impairment is violating the central
command to treat individuals based on their individual abilities. Such a
refusal is sufficient to demonstrate that the entity \"regarded\" the
applicant as disabled and to subject the employment decision to coverage
under the ADA.

In order to satisfy the "regarded as" prong of the ADA's disability
definition, the defendant must believe that the plaintiff has a
substantially limiting impairment. [See]{.underline} [Sutton v. United
Airlines, Inc.]{.underline}, 119 S. Ct. 2139, 2149-50 (1999). The
plaintiff must show that the defendant knew of or believed she had an
impairment and believed that she was substantially limited because of
it. [Id.]{.underline}; [Skorup v. Modern Door Corp.]{.underline}, 153
F.3d 512, 515 (7^th^ Cir. 1998); [see]{.underline} [Johnson v. American
Chamber of Commerce Publishers, Inc.]{.underline}, 108 F.3d 818, 819
(7^th^ Cir. 1997); [Winslow v. IDS Life Insurance Co.]{.underline}, 29
F. Supp. 2d 557, 560 (D. Minn. 1998). A proper jury instruction
pertaining to the "regarded as" prong is: "disability" means, with
respect to an individual, that an individual is regarded as having a
physical or mental impairment that substantially limits one or more of
the major life activities of such individual. [Riemer v. Illinois
Department of Transportation]{.underline}, 148 F.3d 800, 804 (7th Cir.
1998).

Under the regarded as prong, a plaintiff need not show she is actually
disabled. The ADA forbids discrimination against a person who has a
record of, or is regarded as having, an impairment, but who may, at
present, have no actual incapacity at all. [See]{.underline}
[Johnson]{.underline}, 108 F.3d at 819; [Winslow]{.underline}, 29 F.
Supp. 2d at 560. The plaintiff need not establish any actual impairment
to found a claim on 42 U.S.C. § 12102(2)(B) or (C). [See]{.underline}
[id.]{.underline}

The question of whether defendant has regarded a plaintiff as disabled
under the ADA is for the jury, and the jury is allowed to draw
inferences from the defendant's knowledge and actions; the plaintiff
need not show that the defendant affirmatively stated that it regarded
her as disabled if the plaintiff can present evidence that defendant
acted as if it did. [See]{.underline} [Olson v. General Electric
Astrospace]{.underline}, 101 F.3d 947, 954 (3^rd^ Cir. 1996) (a jury
could conclude that defendant perceived plaintiff to be disabled where
defendant knew of plaintiff's health problem and made a decision adverse
to plaintiff); [Katz v. City Metal Co., Inc.]{.underline}, 87 F.3d 26,
32-33 (1^st^ Cir. 1996) (a jury could conclude that defendant perceived
plaintiff to be disabled where plaintiff informed defendant of his
impairment and the defendant made a decision adverse to plaintiff);
[Holihan v. Lucky Stores, Inc.]{.underline}, 87 F.3d 362, 366 (9^th^
Cir. 1996) (defendant's receipt of doctor's reports describing
plaintiff's diagnoses supported a reasonable inference drawn by a jury
that the defendant regarded the plaintiff as suffering from a disabling
mental condition that substantially limited his major life activity);
[Olbrot v. Denny's, Inc.]{.underline}, 1998 WL 525174, \*2 (N.D.Ill.
August 19, 1998) (plaintiff's testimony regarding statements she made to
defendant about her disability and plaintiff's testimony regarding
defendant's responses indicating she was not doing a good job
sufficiently support the allegation that defendant regarded plaintiff as
disabled under the ADA); [U. S. Equal Employment Opportunity Commission
v. Williams Electronics Games, Inc.]{.underline}, 1997 W.L. 201584, \*1
(N.D. Ill. 1997) (Defendant's use of a physical exam report in its
decision adverse to plaintiff supports the inference that defendant
regarded plaintiff as having a significant impairment of a major life
activity); [see]{.underline} [also]{.underline} [Miners v. Cargill
Communications, Inc.]{.underline}, 113 F.3d 820, 823 (8^th^ Cir. 1997).

For example, one court has found an insurance company's refusal to grant
long-term disability insurance to an individual based on that
individual's mental impairment to be conclusive evidence that the
insurance company implicitly considered that plaintiff to be
substantially limited in the major life activity of working.
[See]{.underline} [Winslow]{.underline}, 29 F. Supp. 2d at 560. In the
[Winslow]{.underline} case, the court found that, because the only
logical criteria upon which insurance was denied was the insurance
company's perceptions regarding the applicant's future inability to
work, those facts, and nothing more, supported the allegation that
defendant regarded the plaintiff as substantially limited in a major
life activity. [Id.]{.underline} The court went on to state that ADA
protection extends to cover perception of a possible future disability.
[Id.]{.underline} at 561.

**III.** **[Title III Applies to Insurance Companies Offering Insurance
Polices to the Public.]{.underline}**

Title III provides, in relevant part, that "\[n\]o individual shall be
discriminated against on the basis of disability in the full and equal
enjoyment of the goods \[or\] services . . . of any place of public
accommodation." The statute defines a "public accommodation" to include
an "insurance office" whose operations affect commerce. 42 U.S.C. §
12181(7)(F). Because defendant is selling insurance policies to members
of the public, it is a "public accommodation" covered by Title III.
Further, insurance coverage is one of the "goods" or "services" offered
by defendant. Therefore, under the plain language of 42 U.S.C. §
12182(a), defendant cannot discriminate on the basis of disability in
its provision of insurance coverage.[^5]

The Seventh Circuit's decision in [Doe v. Mutual of Omaha Insurance
Company]{.underline}, 179 F.3d 557 (7^th^ Cir. 1999), [cert.
denied]{.underline}, 2000 WL 12573 (Jan 10, 2000), is controlling. In
[Doe]{.underline}, the Seventh Circuit held that Title III applies to
insurance companies offering insurance policies to the public. [See
id]{.underline}. at 559. The Court stated:

> The core meaning of this provision, plainly enough, is that the owner
> or operator of a store, hotel, restaurant, dentist's office, travel
> agency, theater, Web site, or other facility . . . that is open to the
> public cannot exclude disabled persons from entering the facility and,
> once in, from using the facility in the same way that the nondisabled
> do. The owner or operator of, say, a camera store can neither bar the
> door to the disabled nor let them in but refuse to sell its cameras to
> them on the same terms as to other customers. \*\*\* [\[A\]nd an
> insurance company cannot \*\*\* refuse to sell an insurance policy to
> a person with \[a disability\]]{.underline}.

179 F.3d at 559 (emphasis added) (citations omitted).

Defendant has argued, however, that Title III does not apply where, as
here, the insurance company allows the plaintiff to purchase an
insurance policy. ([See]{.underline} Defendant's Motion to Dismiss
Plaintiff-Intervener United States of America's Complaint ("Def.'s
Motion to Dismiss") at 4.) Defendant reasons that such a person is
provided the access required by the ADA. ([See id]{.underline}.) That
argument, however, rests on an overly simplistic view of the goods or
services offered by an insurance company. The most important good or
service provided by insurance companies is not the ability to purchase
an insurance policy [per se]{.underline}, but rather, the benefits
available under that policy. If an insurance company makes its policies
available to everyone but later rescinds certain policies based on the
policy holders' disability, then the access initially provided by the
insurance company is illusory. In truth, the company is depriving
disabled individuals of the "full and equal enjoyment" of its goods and
services as if the company had refused to sell the policy in the first
place.

Defendant has also argued that, pursuant to the Seventh Circuit's
decision in [Doe]{.underline}, Title III does not extend to the content
of insurance policies. ([See, e.g.]{.underline}, Def.'s Motion to
Dismiss at 4.) In [Doe]{.underline}, the Seventh Circuit considered
whether an insurance company could cap medical benefits for AIDS or
AIDS-related conditions at a lower limit than the cap for other
conditions. [See]{.underline} 179 F.3d at 558. The Court held that Title
III does not require an insurance company "to alter its product to make
it equally valuable to the disabled and to the nondisabled."
[Id]{.underline}. at 563. Unlike the plaintiffs in [Doe]{.underline},
however, Ms. Higgins does not seek to have defendant alter the content
of its insurance policy. Rather, this case involves defendant's outright
refusal to provide Ms. Higgins access to its goods and services because
of her perceived disability. Under [Doe]{.underline}, Title III squarely
applies in this context. [See]{.underline} 179 F.3d at 559 (holding that
an insurance company cannot refuse to sell an insurance policy to an
individual with a disability); [see also]{.underline} [Pallozzi v.
Allstate Life Ins. Co.]{.underline}, No. 98-7552, 1999 WL 1079973, at
\*3 (7^th^ Cir. Dec. 1, 1999) (holding that Title III prohibits an
insurance company from refusing to offer its policies to disabled
individuals); [Wai v. Allstate Ins. Co.]{.underline}, No. CIV. A.
97-01551 (HHK), 1999 WL 966284, at \*9 (D.D.C. Sept. 30, 1999) (holding
that plaintiff stated a claim under Title III where "plaintiffs allege
not that their insurance coverage would have been capped at a certain
limit, but rather that defendants refused to sell them an insurance
policy at all").

In sum, this Court should conclude as a matter of law that defendant is
covered by Title III.

**IV. [Defendant's Material Misrepresentation Argument
Fails.]{.underline}**

In its letter rescinding Ms. Higgins' insurance policy, defendant stated
that the reason for rescission was Ms. Higgins' misrepresentation as to
Question No. 7 on the application. Question No. 7 on the application
asked: "Has any driver been treated for diabetes, heart disease, or any
nervous condition in the past 3 years, or does any driver have a medical
disability? If yes, submit a complete Physician's Report." Ms. Higgins'
application was answered "No."[^6]

The United States will show that Ms. Higgins' policy was rescinded
because she was regarded as an individual with a disability.
Nevertheless, defendant may attempt to make a material misrepresentation
argument. Defendant's argument will fail for the following reasons: 1)
Ms. Higgins made no misrepresentation; Question No. 7 was vague, and it
was reasonable for Ms. Higgins to conclude that she did not need to
disclose a condition such as mental retardation or learning disability,
especially when an employee was filling out the application after Ms.
Higgins said she had a learning disability; and, 2) Even if Ms. Higgins
made a misrepresentation, it was not material.

Under Illinois Law, a misrepresentation in an application for insurance
is not by itself grounds for denial of coverage. [Methodist Medical
Center of Illinois v. American Medical Security, Inc.]{.underline}, 38
F.3d 316, 319 (7^th^ Cir. 1994); [Rivera v. Benefit Trust Life Insurance
Co.]{.underline}, 921 F.2d 692, 695 (7^th^ Cir. 1991); [Ratliff v.
Safeway Insurance Co.]{.underline}, 628 N.E. 2d, 937, 942 (Ill. App.
1993); [Roberts v. National Liberty Group of Companies]{.underline}, 512
N.E. 2d, 792, 794 (Ill. App. 1987). An insurance company may deny
coverage because of a misrepresentation in an application if the
misrepresentation "shall have been made with actual intent to deceive or
materially affects either the acceptance of the risk or the hazard
assumed by the company." [Methodist Medical Center]{.underline}, 38 F.3d
at 319 ([quoting]{.underline} 215 ILCS 5/154).

Before a court may determine if a misrepresentation was made with actual
intent to deceive or was material, the court must find that a
misrepresentation was made. [Id.]{.underline} at 319;
[Rivera]{.underline}, 921 F.2d at 695. A misrepresentation in an
application for insurance is "a statement of something as a fact which
is untrue and affects the risk undertaken by the insurer". [Methodist
Medical Center]{.underline}, 38 F.3d at 319; [Ratcliffe v. International
Surplus Lines Insurance Co.]{.underline}, 550 N.E. 2d 1052, 1057 (Ill.
App. 1990); [Roberts]{.underline}, 512 N.E. 2d at 794. In the case of
application questions which are not clearly stated and are, therefore,
ambiguous, an applicant should not be held to have made a
misrepresentation. [See]{.underline} [Ratliff]{.underline}, 628 N.E. 2d
at 943. Therefore, under the circumstances, Ms. Higgins did not even
make a misrepresentation. Further, Question No. 7 on the insurance
application was vague as to mental disability; it asked about nervous
condition and medical disability with no indication of what types of
conditions were covered.[^7]

If somehow it is determined that Ms. Higgins did make a
misrepresentation, it was not a material one. A misrepresentation is
material if reasonably careful and intelligent persons would regard the
facts as stated to substantially increase the chances of the event
insured against, so as to cause a rejection of the application.
[Methodist Medical Center]{.underline}, 38 F.3d at 320;
[Ratliff]{.underline}, 628 N.E. 2d at 942; [Roberts]{.underline}, 512
N.E. 2d at 794; [Knysak v. Shelter Life Insurance Co.]{.underline}, 652
N.E. 2d 832, 835 (Ill. App. 1995). The relevant question is: was
plaintiff's condition such that it was of such a nature as to warrant
plaintiff to have responded "yes" to a question on the application form,
and, if so, was plaintiff's failure to do so a material
misrepresentation sufficient to void the insurance contract? To
determine materiality, the fact finder should look to underwriting
guidelines and practices. [See]{.underline} [Methodist Medical
Center]{.underline}, 38 F.3d at 320-21. Finally, it should be considered
that the application signed by the plaintiff in this case contains
language drafted by the defendant and that the plaintiff declares the
information true to the best of her knowledge and belief.
[See]{.underline} [Knysak]{.underline}, 652 N.E. 2d at 838.

Defendant states that, if an applicant for insurance (with a disability)
provides a report from a physician attesting to the applicant's ability
to drive safely, defendant would not refuse to insure said individual or
charge that individual higher rates. Ms. Higgins can drive safely and
provided defendant with a physician's report so indicating. As a result,
disclosing her retardation would not have affected defendant's
assessment of Ms. Higgins' risk, and, therefore, the "misrepresentation"
was not material.

Therefore, Ms. Higgins made no misrepresentation and, certainly, no
material misrepresentation. The United States argues that the defendant
should not be allowed to utilize such a pretextual argument to disguise
its discrimination; the United States objects to the use of such an
argument.

**V.** **[Relief]{.underline}**

In an action in which the United States is a plaintiff, Section 308 of
the ADA authorizes the court: (A) to grant equitable relief; (B) to
award monetary damages as requested by the Attorney General; and (C) to
assess a civil penalty. [See]{.underline} 42 U.S.C. §
12188(b)(2)(A)-(C). Liability and monetary damages are determined by the
jury, [see]{.underline} [United States v. Balistrieri]{.underline}, 981
F.2d 916, 928 (7^th^ Cir. 1992),[^8] and injunctive relief and the civil
penalty are determined by the court, [see]{.underline} [Tull v. United
States]{.underline}, 481 U.S. 412, 425 (1987) (civil penalty); [Dairy
Queen v. Wood]{.underline}, 369 U.S. 469, 479 (1962) (injunctive
relief).

In view of Section 308, the United States asks the Court for declaratory
and injunctive relief as set forth in its amended complaint.
([See]{.underline} Plaintiff-Intervenor United States of America's
Amended Complaint, Prayer for Relief.)

The United States also seeks monetary damages to compensate Ms. Higgins
for her injuries resulting from defendant's violation of Title III.
[See]{.underline} [Balistrieri]{.underline}, 981 F.2d at 928 (defining
"monetary damages" to connote "payment in money for a plaintiff's losses
caused by a defendant's breach of duty, . . . something different from
equitable restitution"). Ms. Higgins is entitled to judgment for all
compensatory damages awarded to her by the jury. [See]{.underline}
[Curtis v. Loether]{.underline}, 415 U.S. 189, 197 (1974).

Finally, the United States asks the Court to assess the maximum civil
penalty of \$50,000 for each of defendant's violations of Title III of
the ADA. [See]{.underline} 42 U.S.C. 12188(b)(2)(C)(i).[^9]

> Respectfully submitted,
>
> W. CHARLES GRACE
>
> United States Attorney
>
> MARK R. NIEMEYER
>
> Assistant U. S. Attorney
>
> Nine Executive Dr., Suite 300
>
> Fairview Heights, IL 62208
>
> \(618\) 628-3700
>
> BILL LANN LEE
>
> Acting Assistant Attorney General
>
> Civil Rights
>
> JOHN L. WODATCH
>
> Chief, Disability Rights Section
>
> L. IRENE BOWEN
>
> Deputy Chief, Disability Rights Section
>
> HEATHER A. WYDRA
>
> Trial Attorney
>
> Disability Rights Section
>
> Civil Rights Division
>
> U.S. Department of Justice
>
> P.O. Box 66738
>
> Washington, D.C. 20035-6738
>
> \(202\) 307-1061

[^1]: The defendant received information that Ms. Higgins had a learning
    disability and mild mental retardation. Defendant received
    additional information that Ms. Higgins was not working, and was
    receiving SSI benefits.

[^2]: Defendant regarded Ms. Higgins as unable to drive, learn, work,
    read, think and/or care for herself, based upon her mental
    disability.

[^3]: The United States will show that the defendant's attempt at a
    surreptitious, unreasonable settlement constitutes discrimination
    based upon the same methods.

[^4]: Congress authorized the Department of Justice to issue regulations
    addressing discrimination in both public and private service
    organizations under Titles II and III of the ADA. [See]{.underline}
    [Bartlett]{.underline}, 156 F.3d at 327. The EEOC, on the other
    hand, was authorized to issue regulations defining workplace
    discrimination under Title I of the ADA. [See id.]{.underline} "The
    Department \[of Justice's\] regulations interpreting the Americans
    with Disabilities Act are entitled to Chevron deference."
    [Doe]{.underline}, 179 F.3d at 563 (citation omitted).

[^5]: That Ms. Higgins bought her particular policy at Cress Insurance
    Agency, instead of at one of defendant's sales offices, does not
    change the fact that defendant is a "public accommodation" under
    Title III. Defendant concedes that Ms. Higgins purchased its
    insurance policy; there is no requirement that Ms. Higgins
    physically enter defendant's sales offices for Title III to apply.
    [See]{.underline} [Doe]{.underline}, 179 F.3d at 559 (noting that
    Title III applies "whether in physical space or electronic space");
    [see also]{.underline} [Pallozzi v. Allstate Life Ins.
    Co.]{.underline}, No. 98-7552, 1999 WL 1079973, at \*4 (7^th^ Cir.
    Dec. 1, 1999) ("We believe that an entity covered by Title III is
    not only obligated by statute to provide disabled persons with
    physical access, but is also prohibited from refusing to sell them
    its merchandise by reason of their disability."); [Carparts
    Distribution Center, Inc. v. Automotive Wholesaler's Ass'n of New
    England, Inc.]{.underline}, 37 F.3d 12, 19 (1^st^ Cir. 1994)
    (rejecting argument that Title III should be limited to access to
    physical structures). In addition, defendant contracted with Cress
    to sell its insurance policies. Title III prohibits discrimination
    on the basis of disability "directly, or through contractual,
    licensing, or other arrangements." 42 U.S.C. §
    12182(b)(1)(A)(i)-(iii).

[^6]: Ms. Higgins informed the insurance agency employee that she had
    difficulty reading due to a learning disability, so the insurance
    application was filled out by the employee who read Ms. Higgins the
    questions. The employee led Ms. Higgins to believe that Question No.
    7 was only asking about medical conditions such as heart disease and
    that a learning disability would not qualify. Ms. Higgins signed the
    application.

[^7]: Defendant has since clarified Question No. 7 to read, "Does any
    driver have a medical, physical or mental disability?"

[^8]: In [Balistrieri]{.underline}, the Seventh Circuit interpreted the
    enforcement provision of the Fair Housing Act, 42 U.S.C. § 3614.
    That provision parallels the enforcement provision of the ADA.
    [Compare]{.underline} 42 U.S.C. § 3614(d)(1)(A)-(C)
    [with]{.underline} 42 U.S.C. 12188(b)(2)(A)-(C).

[^9]: In addition to the foregoing relief, the ADA also entitles Ms.
    Higgins to attorney's fees and costs. [See]{.underline} 42 U.S.C. §
    12188(a)(1); 28 C.F.R. § 36.505.