Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-16-01402/USCOURTS-ca7-16-01402-0/pdf.json

Nature of Suit Code: 445
Nature of Suit: Americans with Disabilities Act - Employment
Cause of Action: 

---

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 16-1402

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Plaintiff-Appellant,

v.

FLAMBEAU, INC.,

Defendant-Appellee.

____________________

Appeal from the United States District Court for the

Western District of Wisconsin.

No. 3:14-cv-00638-bbc — Barbara B. Crabb, Judge.

____________________

ARGUED SEPTEMBER 15, 2016 — DECIDED JANUARY 25, 2017

____________________

Before FLAUM, MANION, and HAMILTON, Circuit Judges.

HAMILTON, Circuit Judge. On the merits, this Americans 

with Disabilities Act case would turn on the interplay between the ADA’s prohibition on involuntary medical examinations and its insurance safe-harbor provision. See 42 U.S.C.

§§ 12112(d)(4) and 12201(c). Defendant Flambeau, Inc.

adopted an employee wellness program. It required its employees, as a condition of receiving employer-subsidized 

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health insurance, to fill out a medical questionnaire and to undergo biometric testing. One employee did not meet those requirements in time for the 2012 benefit year. As a result, he 

and his family were briefly without health insurance. He filed 

a complaint with the Equal Employment Opportunity Commission, and the EEOC then filed this suit against Flambeau. 

The EEOC contends that Flambeau’s requirement violated the 

ADA’s ban on involuntary medical examinations in 42 U.S.C.

§ 12112(d)(4). On cross-motions for summary judgment, the 

district court granted Flambeau’s motion and dismissed the 

case. The EEOC has appealed. 

On the merits, the parties have taken ambitious positions 

on appeal. Flambeau argues that wellness programs are 

largely exempt from the limits on medical examinations because the ADA does not “restrict ... [an] organization ... administering the terms of a bona fide benefit plan that are 

based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State 

law.” 42 U.S.C. § 12201(c)(2). The EEOC replies that this insurance safe harbor simply does not apply to wellness programs

so that the prohibition on involuntary medical examinations 

applies. Both sides also offer narrower grounds for deciding 

the case.

We conclude that the statutory debate should not be resolved in this appeal. The relief the EEOC seeks is either unavailable or moot. The employee resigned several years ago, 

before suit was filed. He did not incur damages as a result of 

Flambeau’s policy, and he is not entitled to punitive damages. 

In addition, Flambeau abandoned its wellness program requirements for reasons unrelated to this litigation. Because 

the undisputed facts show that the EEOC is not entitled to any 

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No. 16-1402 3

relief, we affirm the district court’s judgment dismissing the 

case but without reaching the merits of the parties’ statutory 

debate.

I. Factual and Procedural Background

In general, employer wellness programs use a set of benefits, incentives, and/or penalties to improve employee health 

and lower health insurance costs. For example, a wellness 

program might include discounted gym memberships, higher 

insurance premiums for smokers, and monetary rewards for 

weight loss. Flambeau offered such a wellness program to its 

employees.

That program included a health risk assessment in which 

employees answered questions about their medical histories. 

They also were measured for health indicators such as weight, 

cholesterol levels, and blood pressure. Each employee received his or her individual test results. Flambeau received 

aggregated and anonymous results. In 2012 and 2013, Flambeau pushed employees to participate in the wellness program by requiring participation as a condition of the employer’s contributions to an employee’s health insurance premiums. 

Dale Arnold, a Flambeau employee, was unable to complete the assessment and testing before the 2012 benefit year 

deadline. Flambeau terminated his insurance coverage but 

gave him the option of buying continuing coverage under 

COBRA. Mr. Arnold did not take that option, so his health insurance lapsed.

Mr. Arnold then filed complaints with the Department of 

Labor and the Equal Employment Opportunity Commission 

alleging violations of the Family Medical Leave Act and the 

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Americans with Disabilities Act. After discussions with the 

Department of Labor, Flambeau agreed to reinstate Mr. Arnold’s health insurance retroactively so long as he completed 

the testing and paid his own share of the premiums. Mr. Arnold did so, and Flambeau restored his insurance. 

Before the 2014 benefit year began, Flambeau’s management ended the mandatory testing program, finding that it

was not cost-effective. Mr. Arnold resigned his job at Flambeau in March 2014. Six months later, in September 2014, the 

EEOC filed this suit against Flambeau alleging that its mandatory assessment and testing violated the ADA prohibition 

on involuntary medical examinations in 42 U.S.C. 

§ 12112(d)(4).

Flambeau moved for summary judgment. It argued that 

its wellness plan was covered by the ADA’s insurance safe 

harbor, a provision of the Act that limits the interpretation of 

(among other provisions) the ban on involuntary medical examinations. See 42 U.S.C. § 12201(c). The safe harbor says that 

ADA provisions, including Subchapter I, which contains the 

ban on involuntary medical examinations, “shall not be construed to prohibit or restrict ... [an] organization ... from ... 

administering the terms of a bona fide benefit plan ... .” 42 

U.S.C. § 12201(c)(2) & (c)(3). The safe harbor also provides 

that it “shall not be used as a subterfuge to evade the purposes” of the ADA provisions on employment and public accommodations and services. § 12201(c). Flambeau argued in 

the alternative that the health testing and assessments were 

voluntary because they were not conditions of employment. 

The EEOC filed a cross-motion for partial summary judgment

as to liability, arguing that the insurance safe harbor did not 

apply to save the Flambeau program.

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No. 16-1402 5

The district court granted Flambeau’s motion and denied 

the EEOC’s. EEOC v. Flambeau, Inc., 131 F. Supp. 3d 849, 857

(W.D. Wis. 2015). It decided that the safe harbor could cover 

at least some wellness programs and that this was one such 

program. Id. at 855–56.

The parties’ briefing on appeal addressed the statutory issue whether the insurance safe harbor should be interpreted 

to apply to wellness programs generally and to Flambeau’s in 

particular. After oral argument, we ordered supplemental 

briefing on whether the case is moot. Having received and 

considered that briefing, we conclude that the EEOC’s claim 

for injunctive relief is moot and that undisputed facts foreclose its claims for compensatory and punitive damages on 

behalf of Mr. Arnold. 

II. Analysis

Article III of the Constitution limits federal courts’ jurisdiction, our power to speak the law, to “cases” and “controversies.” Campbell-Ewald Co. v. Gomez, 577 U.S. —,—, 136 S. Ct. 

663, 669 (2016). A “live controversy” must exist at “all stages 

of review.” Brown v. Bartholomew Consolidated School Corp., 442 

F.3d 588, 596 (7th Cir. 2006). Federal courts therefore lack jurisdiction over moot cases, cases in which “one of the parties 

lacks a personal stake” in the suit’s outcome. Banks v. National 

Collegiate Athletic Ass’n, 977 F.2d 1081, 1085 (7th Cir. 1992). The 

EEOC offers two theories for holding that this case is not 

moot. First, it argues that Mr. Arnold has a personal stake in 

the suit’s outcome because he is entitled to compensatory and 

punitive damages. Second, the EEOC argues that it can seek 

injunctive relief because the “voluntary cessation” exception 

to mootness applies in this case. 

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We disagree with the EEOC’s “voluntary cessation” analysis, finding that the exception does not apply and that its 

claim for injunctive relief is moot. There is a live controversy 

between the parties over Mr. Arnold’s entitlement to compensatory and punitive damages. The undisputed facts, including information provided to us in response to our question 

about available relief, show however that Mr. Arnold cannot 

recover either compensatory or punitive damages. There 

would be no point in a remand for further exploration of those 

issues or other aspects of the case. 

A. Mr. Arnold’s Personal Stake

The EEOC offers three grounds for awarding monetary 

damages to Mr. Arnold at an eventual trial: he is entitled to 

recover $82.02 in out-of-pocket medical expenses that Flambeau should have paid; he is entitled to emotional distress 

damages; and he is entitled to punitive damages. Mr. Arnold 

could not recover any of these damages. 

1. Out-of-Pocket Expenses

Mr. Arnold claims a right to reimbursement for $82.02 of 

medical expenses incurred while he did not have insurance 

coverage. But Mr. Arnold also frankly admits never paying 

that money: those bills were either written off or paid by third 

parties. He has no right to be repaid. 

2. Emotional Distress Damages

When the only evidence of emotional distress comes from 

the injured party’s testimony, “he must reasonably and sufficiently explain the circumstances of his injury and not resort 

to mere conclusory statements.” Biggs v. Village of Dupo, 892 

F.2d 1298, 1304 (7th Cir. 1990). In this case, the only evidence 

of Mr. Arnold’s emotional distress is his deposition testimony. 

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No. 16-1402 7

When asked to explain his emotional pain, Mr. Arnold repeated the events of his case: “when they took my insurance 

away, and my kids didn’t know what’s going on, and I

couldn’t go to the doctor and stuff like that.” We “appreciate 

that it can be hard to articulate emotional upset.” Biggs, 892 

F.2d at 1304. Mr. Arnold need not show that he took medication, underwent therapy, or sought any medical attention. 

Still, his testimony does not even reach the level of conclusory 

statements of emotional distress and is insufficient to show he 

could be entitled to such damages. Cf. Catalan v. GMAC Mortgage Corp., 629 F.3d 676, 696 (7th Cir. 2011) (reversing summary judgment where plaintiffs “described their emotional 

turmoil in reasonable detail”). 

3. Punitive Damages

Punitive damages are available for violations of the Americans with Disabilities Act if the defendant discriminated 

“with malice or with reckless indifference to the federally protected rights of an aggrieved individual.” 42 U.S.C. 

§ 1981a(b)(1). The EEOC argues that it can show that Flambeau acted with reckless indifference to Mr. Arnold’s federally 

protected rights against involuntary physical examinations. 

“The terms ‘malice’ and ‘reckless’” focus on the employer’s “state of mind.” Kolstad v. American Dental Ass’n, 527 

U.S. 526, 535 (1999). But even “intentional discrimination does 

not give rise to punitive damages” where the “underlying theory of discrimination” is “novel or otherwise poorly recognized.” Id. at 536–37. That description fits this case. The 

EEOC’s theory of discrimination assumes that the ADA’s insurance safe harbor does not cover at least some wellness 

plans. Whether that is true, and for what kinds of wellness 

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plans it might be true, were open questions at relevant times 

in 2012 and 2013. They remain open even today.

The statute’s plain text does not resolve either question. 

The parties and their amici have shown as much in their excellent briefs on this appeal. When Flambeau acted to terminate Mr. Arnold’s health insurance, the EEOC had not yet proposed the relevant regulations. See Regulations Under the 

Americans with Disabilities Act, 81 Fed. Reg. 31126-01, 31128 

(May 17, 2016) (EEOC published relevant notice of proposed 

rulemaking in 2015 for rule that became 29 C.F.R. 

§ 1630.14(d)). The only case law was adverse to the EEOC’s 

position. See Seff v. Broward County, 691 F.3d 1221, 1224 (11th 

Cir. 2012) (affirming district court’s finding that safe harbor 

covered county’s wellness plan). Even today, and even counting this lawsuit, cases raising those questions can be counted 

on one hand. See EEOC v. Honeywell International, Inc., No. 14-

4517 ADM/TNL, 2014 WL 5795481, at *5 (D. Minn. Nov. 6, 

2014) (denying EEOC’s motion for preliminary injunction, 

and noting “great uncertainty” surrounding wellness plans); 

EEOC v. Orion Energy Systems, Inc., — F. Supp. 3d. —, No. 14-

CV-1019, 2016 WL 5107019, at *6–7 (E.D. Wis. Sept. 19, 2016) 

(finding that safe harbor does not apply to wellness programs). 

That legal uncertainty at the relevant time distinguishes 

this case from cases approving punitive damages for well-understood violations of the ADA and other antidiscrimination 

laws. See Williamson v. Handy Button Machine Co., 817 F.2d 

1290, 1296 (7th Cir. 1987) (“The complete rule ... may be that 

intentional, illegal conduct may support an award of punitive 

damages when the application of the law to the facts at hand 

was so clear at the time of the act that reasonably competent 

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people would have agreed on its application.”); compare

EEOC v. Autozone, Inc., 707 F.3d 824, 835–36 (7th Cir. 2013) (approving punitive damages award in ADA case where defendant’s disability coordinator “was dismissive” of plaintiff’s repeated accommodation requests); Hertzberg v. SRAM Corp., 

261 F.3d 651, 662–63 (7th Cir. 2001) (affirming punitive damages where supervisors knew harasser’s jokes and touching 

were “inappropriate” and “incorrect”); Bruso v. United Airlines, Inc., 239 F.3d 848, 859–60 (7th Cir. 2001) (reversing judgment as a matter of law denying punitive damages because 

supervisors who demoted plaintiff after he reported harassment were familiar with Title VII and their employer’s antidiscrimination policy), with EEOC v. Boh Brothers Construction 

Co., 731 F.3d 444, 468 (5th Cir. 2013) (en banc) (defendant entitled to judgment as a matter of law overturning punitive 

damages because court “had not directly addressed whether 

a plaintiff could rely on evidence of gender-stereotyping in a 

same-sex discrimination case”). 

The unsettled legal landscape also makes it unsurprising

that when Flambeau consulted its attorneys about the benefit 

plan’s compliance with state and federal law, they did not 

raise this problem. Flambeau’s director of human resources, 

Mark Rieland, also consulted an attorney in January 2012 after Mr. Arnold filed a grievance with his union about his loss 

of insurance coverage. Rieland sent Flambeau’s attorney an 

article outlining the EEOC’s position on wellness programs: if 

employees were required to participate, the program was not

voluntary. The attorney advised Rieland to “continue to deny 

the grievance.” Rieland’s repeated consultations with an attorney regarding Mr. Arnold’s federally protected rights are 

inconsistent with reckless indifference to those rights, absent 

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some reason to doubt he provided the attorney with all relevant information. See Farias v. Instructional Systems, Inc., 259 

F.3d 91, 102 (2d Cir. 2001) (“[A]ction taken pursuant to advice 

that the action is consistent with the law is insufficient to support an award of punitive damages under the standard articulated in Kolstad.”). 

The EEOC emphasizes a later part of Rieland’s 2012 consultation with the attorney. After the attorney advised Rieland 

to continue denying the grievance, Rieland mentioned that 

the grievance indicated Mr. Arnold had contacted “Employee 

Benefits, [U.S.] Department of Labor.” His attorney explained 

that the grievance probably referred to the Employee Benefits 

Security Administration, which was “not likely” to tell Mr. 

Arnold that Flambeau was wrong. Mr. Arnold would, he 

added, “have gotten a different reaction if he had contacted 

the EEOC.”

The EEOC sees in that exchange a reckless indifference to

its position, which was best expressed at that time in its enforcement guidance, which said: “A wellness program is ‘voluntary’ as long as an employer neither requires participation 

nor penalizes employees who do not participate.” Enforcement 

Guidance: Disability-Related Inquiries and Medical Examinations 

of Employees Under the Americans with Disabilities Act (ADA),

Equal Employment Opportunity Comm’n, (July 27, 2000), 

https://www.eeoc.gov/policy/docs/guidance-inquiries.html

(last visited Jan. 19, 2017).

We recognize that that was the EEOC’s position and that

the EEOC’s guidelines are an important “body of experience 

and informed judgment” entitled to some deference. They are 

not, however, controlling law. Hendricks-Robinson v. Excel 

Corp., 154 F.3d 685, 693 n.7 (7th Cir. 1998), quoting Smith v. 

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No. 16-1402 11

Midland Brake, Inc., 138 F.3d 1304, 1308 n.2 (10th Cir. 1998). An 

employer’s or its attorney’s disagreement with EEOC guidance does not by itself support a punitive damages award, at 

least where the guidance addresses an area of law as unsettled 

as this one.

B. Injunctive Relief and Voluntary Cessation

Even if Mr. Arnold has no monetary stake in the controversy’s outcome, the EEOC argues that it can seek injunctive 

relief. But that claim for relief is moot: Flambeau halted its 

mandatory wellness program, so there is nothing to enjoin.

The EEOC argues that the controversy survived the employer’s voluntary cessation of the challenged practice. “[A]s 

a general rule, ‘voluntary cessation of allegedly illegal conduct does not ... make the case moot.’” Los Angeles County v. 

Davis, 440 U.S. 625, 631 (1979), quoting United States v. W.T. 

Grant Co., 345 U.S. 629, 632 (1953). That general rule does not 

apply when both: (1) there is no reasonable expectation that 

the alleged violation will reoccur; and (2) interim events “irrevocably eradicated” the alleged violation’s effects. Id. We explained above how the effects of Flambeau’s policy have been 

eradicated or never existed. There is also no reasonable expectation now that Flambeau will reinstitute its mandatory wellness program. See EEOC v. North Gibson School Corp., 266 F.3d 

607, 621 (7th Cir. 2001) (affirming mootness determination 

where “EEOC has not identified a currently discriminatory 

plan nor ... has a reasonable expectation that a discriminatory 

plan will be adopted”), abrogated in part on other grounds by 

EEOC v. Waffle House, 534 U.S. 279 (2002).

The voluntary cessation exception to mootness is important. “Otherwise, a defendant could engage in unlawful 

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conduct, stop when sued to have the case declared moot, then 

pick up where he left off, repeating this cycle until he achieves 

all his unlawful ends.” Already, LLC v. Nike, Inc., 568 U.S. —, 

—, 133 S. Ct. 721, 727 (2013); E.I. Dupont de Nemours & Co. v. 

Invista B.V., 473 F.3d 44, 47 (2d Cir. 2006) (voluntary cessation 

doctrine “aims to eliminate the incentive for a defendant to 

strategically alter its conduct in order to prevent or undo a 

ruling adverse to its interest”). This record does “allow us to 

determine fairly” the reasons for Flambeau’s change in policy.

Cf. Ciarpaglini v. Norwood, 817 F.3d 541, 546 (7th Cir. 2016) (remanding for limited fact-finding on mootness where record 

did not allow appellate court to determine whether defendant’s change in conduct was a “broader policy change”).

Manipulation is not a concern here. Flambeau made its 

wellness program non-mandatory well before this lawsuit began, and it did so for reasons unrelated to the lawsuit. That is 

important evidence that the conduct is unlikely to reoccur. See

Aref v. Lynch, 833 F.3d 242, 251 n.6 (D.C. Cir. 2016) (“A defendant who ceased the challenged conduct for reasons unrelated 

to the litigation may have an easier time showing the challenged conduct is unlikely to reoccur.”).

The evidence of Flambeau’s reasoning also supports that 

determination. It stopped requiring the biometric testing and 

the assessment because their costs outweighed their benefits. 

That was true in part because Flambeau found that its employees were not using the test results to change their behavior. We should not expect human nature to change too rapidly. 

Cf. Ciarpaglini, 817 F.3d at 546 (change in government policy 

appeared to render case moot, despite theoretical possibility

that it “might someday” change back); Adams v. Bowater Inc., 

313 F.3d 611, 615 (1st Cir. 2002) (case not moot because new 

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No. 16-1402 13

case law might “easily” make resuming challenged conduct 

“in defendants’ interest”).

The reasons for Flambeau’s change were not speculation 

or opinion and were not based on the lawsuit. The policy was

not changed quickly or lightly. Flambeau required the testing 

for two years. It knew, based on that experience, the program’s 

costs and benefits. A decision supported by less evidence or 

less thought might more reasonably be expected to recur. Cf. 

Rich v. Secretary, Florida Dep’t of Corrections, 716 F.3d 525, 532 

(11th Cir. 2013) (voluntary resumption of kosher prison meal 

program did not moot case when defendant could “simply 

end” program as it had in the past).

Norman-Bloodsaw v. Lawrence Berkeley Laboratory, 135 F.3d 

1260 (9th Cir. 1998), involved such a decision. The defendants 

in that case argued that the plaintiffs’ request for an injunction 

against its mandatory employee medical screenings was moot 

because they had ceased those screenings after deciding they 

were not cost-effective. Id. at 1274. But they did not explain 

why their views had changed, so the court determined that

the case was not moot. Id.

The EEOC argues that Flambeau’s economic reasons cannot support a finding of mootness. It cites Norman-Bloodsaw

and United States v. Concentrated Phosphate Export Ass’n, 393 

U.S. 199 (1968), to argue that no decision based on cost-effectiveness can support a mootness determination. Like NormanBloodsaw, Concentrated Phosphate is distinguishable. In Concentrated Phosphate, the Supreme Court said that defendants’ 

“own statement that it would be uneconomical for them” to 

continue their conduct, “standing alone, cannot suffice” to 

show mootness. 393 U.S. at 203. Flambeau’s statement does 

not stand alone. Flambeau’s conduct supports its claim: it 

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ended the mandatory testing program before the EEOC even 

filed suit. Moreover, in Concentrated Phosphate there was evidence that defendants’ economic claims were false. Id. at 202–

03 (explaining how the regulatory change that allegedly rendered plaintiffs’ claims moot did not apply to all defendants 

or all relevant conduct). No such evidence exists here. 

The core requirement of the case-or-controversy standard

is that the parties “have a personal stake in the outcome of the 

lawsuit throughout its duration.” Wisconsin Right to Life Political Action Committee v. Barland, 664 F.3d 139, 149 (7th Cir. 

2011). They do not in this case. But we add this: at least in close 

cases, mootness can be in part a prudential doctrine. Id. 

(“Mootness doctrine is ... premised on constitutional requirements and prudential considerations.”); Adams, 313 F.3d at 

614 (Supreme Court did not mean “woodenly to exclude ... 

equitable or other considerations” from mootness analysis 

when likelihood of conduct’s recurrence is “very hard to estimate”).

Prudence weighs against reaching to decide the merits of 

this case. The questions of statutory interpretation are difficult, at least in the absence of interpretive regulations. Those 

questions affect the 75% of firms offering health benefits that 

also offer wellness programs. Kristin Madison, Employer Wellness Incentives, the ACA, and the ADA: Reconciling Policy Objectives, 51 Willamette L. Rev. 407, 412–13 (2015) (citing the results of a Kaiser Family Foundation survey of employers). 

This case also presents the statutory questions in an outdated 

legal landscape. The relevant EEOC regulations were issued 

after this case’s events. See 29 C.F.R. § 1630.14 (effective July 

18, 2016) (providing that medical examinations would be 

deemed involuntary under ADA if employee’s participation 

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has effect of greater than 30% of total cost of “self-only” health 

coverage, and that insurance safe harbor does not apply to 

wellness programs). Most important, neither party to this case 

has any longer a serious stake in its outcome. The genuine 

statutory issues should be decided by a court in a case where 

the answers will matter to the parties.

The judgment of the district court dismissing the action is 

AFFIRMED for the reasons stated in this opinion. 

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