Court Opinion

ID: 3017447
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:17:17.582197+00
Date Added: 2024-06-11T11:47:05.211122
License: Public Domain

___________

                                   No. 95-3768
                                   ___________

Mary Jo Krauel,                        *
                                       *
             Appellant,                *
                                       *
        v.                             *
                                       *   Appeal from the United States
Iowa Methodist Medical Center,         *   District Court for the
                                       *   Southern District of Iowa.
           Appellee.                   *
_______________________________        *
                                       *
Equal Employment Advisory              *
Council,                               *
                                       *
             Amicus Curiae.            *

                                   ___________

                     Submitted:    May 13, 1996

                          Filed:   September 11, 1996
                                   ___________

Before BOWMAN, Circuit Judge, HENLEY, Senior Circuit Judge, and WOLLMAN,
      Circuit Judge.

                                   ___________

BOWMAN, Circuit Judge.

        Mary Jo Krauel appeals the grant of summary judgment by the District
    1
Court in favor of defendant, Iowa Methodist Medical Center (IMMC), on her
claim    of disability discrimination brought under the Americans with
Disabilities Act (ADA), her claim of pregnancy discrimination brought under
the Pregnancy Discrimination Act (PDA), and her claim of sex discrimination
brought under Title VII of the Civil Rights Act.        We affirm.

         1
       The Honorable Ronald E. Longstaff, United States District
Judge for the Southern District of Iowa.
                                             I.

        Krauel has been employed as a respiratory therapist with IMMC since
1979.           Throughout her employment, Krauel has participated in IMMC's
HealthCare Preferred Plan (the Plan), an employee medical benefits plan
regulated by the Employee Retirement Income Security Act (ERISA).                The Plan
is self-funded in that benefits are paid from IMMC's general assets.                   As
such, the Plan is not subject to state laws that regulate insurance.                Since
1990, Plan Exclusion 31 has excluded medical coverage for treatment of male
or female infertility problems.

        Krauel was diagnosed with endometriosis2 in 1992.               Later that year,
Krauel had a laparoscopy, a laser surgery procedure designed to eliminate
endometriosis.        After attempting to become pregnant naturally for over one
year, Krauel visited a fertility clinic where she received artificial
insemination and gamete intrafallopian tube transfer (GIFT).3                     Krauel
underwent, and paid for, three GIFT treatments, one of which resulted in
her pregnancy.        In 1994, Krauel gave birth to a baby girl.         Pursuant to the
Plan's coverage scheme, IMMC paid for Krauel's laparoscopy, pregnancy, and
delivery         expenses,   but   IMMC   denied   coverage   for   Krauel's    fertility
treatments         under   the   Plan's   exclusion   for   treatment    of   infertility
problems.

            2
        Endometriosis is a condition in which the lining of the
uterus grows aberrantly in various locations outside the uterus
including the fallopian tubes and ovaries. If left untreated, this
condition may cause sterility. Richard Sloane, The Sloane-Dorland
Annotated Medical-Legal Dictionary 252 (1987).
        3
       GIFT is a procedure in which the ova are removed and mixed
with sperm in a petri dish. The ova and sperm are then placed in
the fallopian tube for natural fertilization. Taber's Cyclopedic
Medical Dictionary 774 (Clayton L. Thomas, M.D., ed., 17th ed.
1993).

                                             -2-
     Krauel brought suit in the District Court, alleging that IMMC's
denial of insurance coverage for her fertility treatments violated the ADA,
the PDA, and Title VII.     Krauel testified in her deposition that her
infertility limits her ability to reproduce naturally and to care for
others.4   She also testified, however, that she has not experienced any
difficulty caring for herself, performing manual tasks, walking, seeing,
hearing, speaking, breathing, learning, or working as a result of her
alleged disability.   She indicated that her infertility has not affected
her work performance, attendance, or opportunities for promotion.   Krauel
did not request special scheduling arrangements or any other accommodation
at work because of her infertility.

     The District Court granted summary judgment in favor of IMMC,
concluding that: (1) Krauel is not an individual with a disability under
the ADA because procreation and caring for others are not major life
activities; (2) the Plan's infertility treatment exclusion is not a
disability-based distinction; (3) the Plan is not a subterfuge to evade the
purposes of the ADA within the meaning of § 501(c)(3) of the ADA, codified
at 42 U.S.C.

      4
      When asked to explain through a series of questions in her
deposition what she meant by caring for others, Krauel responded,

     "Caring for others has do to with caring for--not being able
to care for your own children."

     "You are unable to have your own children and you're unable to
fill that need that I think almost everybody has to raise
children."

     "Because in the back of your mind, you always want to have
your own child to care for. It doesn't affect the way I do my
job."

     "It affects the way I feel."

     Having children       of   your   own   "gives   you   a   sense   of
fulfillment."

Deposition of Mary Jo Krauel at 73-75.

                                   -3-
§ 12201(c)(3) (1994); (4) the Plan did not violate the PDA because
treatment for infertility is not treatment for pregnancy, childbirth, or
a related medical condition; (5) Krauel failed to establish intentional
discrimination under Title VII; and (6) Krauel failed to establish a prima
facie    case   of   disparate   impact    under   Title   VII    resulting   from   the
infertility treatment exclusion.          Krauel now appeals, seeking reversal as
to all her claims.

                                           II.

        We review de novo the decision to grant a summary judgment motion.
Kiemele v. Soo Line R.R., No. 95-3700, slip op. at 2 (8th Cir. Aug. 20,
1996).    We will affirm the judgment if the record shows there is no genuine
issue of material fact and that the prevailing party is entitled to
judgment as a matter of law.        Id. at 3; see also Fed. R. Civ. P. 56(c).

                                          III.

        Krauel argues that the District Court improperly granted summary
judgment in favor of IMMC on her ADA claim because: (1) she is an
individual with a disability; (2) the Plan's infertility exclusion is a
disability-based distinction; and (3) the Plan is a subterfuge to evade the
purposes of the ADA.       After carefully reviewing the record, we conclude
that the District Court properly granted summary judgment in favor of IMMC
on the ADA claims.

                                           A.

        Krauel first argues that the District Court improperly determined
that she is not an individual with a disability who is protected by the
ADA.    Krauel asserts that she has a physical impairment, infertility, that
prevents her from becoming pregnant naturally.                   She argues that her
infertility substantially limits          two major life activities, reproduction
and caring for others.

                                           -4-
       The threshold requirement for coverage under the ADA is that the
plaintiff be a "qualified individual with a disability."              42 U.S.C. §
12112(a) (1994).      The ADA defines disability as "a physical or mental
impairment that substantially limits one or more . . . major life
activities."     42   U.S.C.   §   12102(2)(A)   (1994).   Krauel's    condition,
infertility, prevents her from becoming pregnant naturally.           Regulations
issued by the EEOC define "physical or mental impairment" as including a
disorder of the reproductive system.      29 C.F.R. § 1630.2(h)(1).     IMMC does
not dispute that Krauel's infertility is a covered physical impairment,
instead arguing that, as the District Court concluded, the impairment does
not substantially affect a major life activity within the meaning of the
ADA.

       Because the ADA does not define the term major life activity, we are
guided by the definition provided in 29 C.F.R. § 1630.2, the Equal
Employment Opportunity Commission (EEOC) regulations issued to implement
Title I of the ADA.    See 42 U.S.C. § 12116 (1994) (requiring EEOC to issue
regulations implementing ADA).       As defined in 29 C.F.R. § 1630.2(i), the
term major life activity means "functions such as caring for oneself,
performing manual tasks, walking, seeing, hearing, speaking, breathing,
learning, and working."5       While we recognize that this list is non-
exclusive, we note that reproduction and caring for others are not among
the examples of listed activities.      Although Krauel is unable to conceive
without medical intervention, she has the ability to care for herself,
perform manual tasks, walk, see, hear, speak, breathe, learn, and work.
It is undisputed that her infertility in no way prevented her from
performing her full job duties as a respiratory therapist.        We conclude,
then, that to treat reproduction and caring for others as major life
activities under the ADA would be

        5
       This list is drawn from the regulations issued under the
Rehabilitation Act of 1973, the predecessor to the ADA. See 45
C.F.R. § 84.3(j)(2)(ii) (defining major life activities).

                                       -5-
inconsistent with the illustrative list of activities in the regulations,
and   a   considerable stretch of federal law.           See Zatarain v. WDSU-
Television, Inc., 881 F. Supp. 240, 243 (E.D. La. 1995) (holding that
reproduction is not a major life activity under the ADA), aff'd, 79 F.3d
1143 (5th Cir. 1996) (table).

      Krauel relies on Pacourek v. Inland Steel Co., 858 F. Supp. 1393
(N.D. Ill. 1994), to support the proposition that reproduction is a major
life activity.    We are unpersuaded.          The court in Pacourek found that
reproduction was a major life activity because the reproductive system was
included among the systems that can have an ADA impairment.            Id. at 1404;
see 29 C.F.R. § 1630.1(h)(1).     As the court in Zatarain observed, this
argument is flawed because "physical or mental impairment" and "major life
activities" are "separate and distinct" components of the ADA's definition
of disability.   Zatarain, 881 F. Supp. at 243.        We hold that the District
Court properly concluded that reproduction and caring for others are not
cognizable major life activities under the ADA.           As the District Court
held, Krauel does not have any impairment that substantially limits her in
any major life activity that is within the purview of the ADA, and thus she
is not an individual with a disability under the ADA.

                                        B.

      Krauel next argues that even if reproduction and caring for others
are not major life activities, summary judgment in favor of IMMC is
inappropriate    because   the   Plan     is     discriminatory   on    its   face.
Specifically, she argues that the Plan's exclusion for treatment of
infertility is a disability-based distinction.         We disagree.

      "A term or provision is `disability-based' if it singles out a
particular disability (e.g., deafness, AIDS, schizophrenia), a discrete
group of disabilities (e.g., cancers, muscular

                                        -6-
dystrophies, kidney diseases), or disability in general (e.g., non-coverage
of all conditions that substantially limit a major life activity)."    EEOC:
Interim Enforcement Guidance on Application of ADA to Health Insurance,
(June 8, 1993), reprinted in Fair. Empl. Prac. Man. 405:7115, 7118 (BNA).
Insurance distinctions that apply equally to all insured employees, that
is, to individuals with disabilities and to those who are not disabled, do
not discriminate on the basis of disability.   Id. at 405:7117.

     For example, a feature of some employer provided health
     insurance plans is a distinction between the benefits provided
     for the treatment of physical conditions on the one hand, and
     the benefits provided for the treatment of "mental/nervous"
     conditions on the other. Typically, a lower level of benefits
     is provided for the treatment of mental/nervous conditions than
     is provided for the treatment of physical conditions.
     Similarly, some health insurance plans provide fewer benefits
     for "eye care" than for other physical conditions. Such broad
     distinctions which apply to the treatment of a multitude of
     dissimilar conditions and which constrain individuals both with
     and without disabilities, are not distinctions based on
     disability. Consequently, although such distinctions may have
     a greater impact on certain individuals with disabilities, they
     do not intentionally discriminate on the basis of disability
     and do not violate the ADA.

Id. at 405:7118 (footnote omitted).

     In this case, the Plan's infertility exclusion does not single out
a particular group of disabilities, allowing coverage for some individuals
with infertility problems, while denying coverage to other individuals with
infertility problems.   Rather, the Plan's infertility exclusion applies
equally to all individuals, in that no one participating in the Plan
receives coverage for treatment of infertility problems.   For example, the
Plan exclusion bars coverage for infertility caused by age, a condition
which is not recognized as a disability under the ADA, and for infertility
caused by ovarian cancer, which is defined as a disability under

                                   -7-
the ADA.   Therefore, the District Court properly held that the Plan is not
a disability-based distinction in violation of the ADA.

                                     C.

     Krauel also argues that the District Court erred in holding that the
Plan is not being used as a subterfuge to evade the purposes of the ADA
within the meaning of § 501(c)(3), the insurance safe harbor provision.
In reaching this conclusion, Krauel contends that the District Court
incorrectly defined the term subterfuge.    This argument lacks merit.

     Section 501(c)(3) states that the requirements of the ADA shall not
be construed to prohibit or restrict

           (3) a person or organization covered by this chapter from
     establishing, sponsoring, observing or administering the terms
     of a bona fide benefit plan that is not subject to State laws
     that regulate insurance.

           Paragraphs (1), (2), and (3) shall not be used as a
     subterfuge to evade the purposes of subchapter[s] I and III of
     this chapter.

42 U.S.C. § 12201(c)(3).   To qualify for protection under § 501(c)(3), the
Plan's infertility exclusion must (1) be part of a bona fide ERISA medical
benefit plan that is not subject to state law, and (2) not be a subterfuge.
It is undisputed that IMMC's health plan, which has been communicated to
covered employees, is a bona fide plan because it exists and pays benefits.
See Public Employees Retirement System v. Betts, 492 U.S. 158, 166 (1989).
It also is undisputed that the Plan is not subject to any state law that
regulates insurance because it is self-insured and regulated by ERISA.   The
only issue, then, is whether the Plan is being used as a subterfuge to
evade the purposes of the ADA.

                                    -8-
     The Supreme Court in Betts held that a benefit plan cannot be a
subterfuge   unless   the   employer   intended   by    virtue   of   the   plan   to
                                                  6
discriminate in a non-fringe-benefit-related           aspect of the employment
relation.    In so doing, the Court struck down an EEOC interpretive
regulation that labeled any benefit plan a subterfuge if the plan lacked
a cost justification for an age-based differential status.             Id. at 175.
While the Court in Betts was interpreting subterfuge in the context of the
Age Discrimination in Employment Act (ADEA), the same definition of
subterfuge is applicable to the use of the term in § 501(c) of the ADA.
See Modderno v. King, 82 F.3d 1059, 1065 (D.C. Cir. 1996) (holding Betts
definition of subterfuge applies to use of term in § 501 (c) of ADA,
reasoning "when Congress chose the term `subterfuge' for the insurance safe
harbor of the ADA, it was on full alert as to what the Court understood the
word to mean and possessed (obviously) a full grasp of the linguistic
devices available to avoid that meaning.").            In Modderno, the court of
appeals also held that the EEOC's interim guidance on the application of
the ADA to health insurance, upon which Krauel relies, was "at odds" with
the plain language of the statute and thus not entitled to deference, even
assuming that any deference ordinarily would have been due.           Id.   We agree
with the conclusions reached in Modderno and adopt them as our own.

     Similarly, we are unpersuaded by the legislative history Krauel
offers us, in the form of statements by a few individual members of
Congress, on the definition of subterfuge.        Congress enacted § 501(c)(3)
on July 26, 1990, after the Supreme Court's decision in Betts.              See Pub.
L. No. 101-336, 104 Stat. 327.    Had Congress intended to reject the Betts
interpretation of subterfuge when it enacted the ADA, it could have done
so expressly by

       6
        The EEOC guidelines define fringe benefits as "medical,
hospital, accident, life insurance and retirement benefits; profit-
sharing and bonus plans; leave; and other terms, conditions, and
privileges of employment." 29 C.F.R. § 1604.9.

                                       -9-
incorporating language for that purpose into the bill that Congress voted
on and the President signed.          We thus decline to employ the proffered
legislative history as a basis for rejecting the Betts definition of
subterfuge as controlling the meaning of the term in § 501(c).

       Applying the Betts definition of subterfuge to the facts in this
case, it is undisputed that the fertility treatment exclusion did not
adversely affect Krauel's employment in any non-fringe benefit plan
context.          Krauel   concedes   that   she    has   suffered     no    employment
discrimination outside the Plan.         Therefore, the District Court properly
concluded that the Plan is not a subterfuge to evade the purposes of the
ADA.

                                         IV.

       Krauel next argues that the District Court improperly granted summary
judgment in favor of IMMC on her PDA claim.            Krauel argues that the Plan
violates the PDA because infertility is a medical condition related to
pregnancy or childbirth.       She contends that a medical condition that causes
infertility is related to pregnancy because there is a causal connection
between such a condition and pregnancy.          Therefore, the issue before us is
whether     the    District   Court   properly     determined   that    treatment    of
infertility is not treatment of a medical condition related to pregnancy
or childbirth.

       With the enactment of the PDA in 1978, Congress explicitly amended
Title VII of the Civil Rights Act of 1964 to provide that discrimination
"on the basis of sex" includes discrimination "because of or on the basis
of pregnancy, childbirth, or related medical conditions."                   42 U.S.C. §
2000e(k) (1994).       Under general rules of statutory construction, "when a
general term follows a specific one, the general term should be understood
as a reference to subjects akin to the one with specific enumeration."
Norfolk &

                                        -10-
W. Ry. v. American Train Dispatchers' Ass'n, 499 U.S. 117, 129 (1991).
"Related medical conditions," a general phrase, thus should be understood
as   referring to conditions related to "pregnancy" and "childbirth,"
specific terms, unless the context of the PDA dictates otherwise.                             The
plain    language      of    the    PDA    does   not    suggest    that   "related     medical
conditions" should be extended to apply outside the context of "pregnancy"
and "childbirth."       Pregnancy and childbirth, which occur after conception,
are strikingly different from infertility, which prevents conception.
Moreover, the legislative history and the EEOC guidelines do not make any
reference to infertility treatments.               See Senate Comm. on Labor and Human
Resources, 96th Cong., 2d Sess., Legislative History of the Pregnancy
Discrimination Act of 1978 (Comm. Print 1980); 29 C.F.R. § 1604.10.
Therefore,     we     hold   that    the    District      Court    properly      concluded   that
infertility is outside of the PDA's protection because it is not pregnancy,
childbirth, or a related medical condition.

        The   cases    that    Krauel      cites    in    support    of    her    argument    are
unavailing.     In International Union, UAW v. Johnson Controls, Inc., 499
U.S. 187 (1991), the Supreme Court held that discrimination on the basis
of potential pregnancy was discrimination on the basis of sex under Title
VII and the PDA.       The Court ruled that a company policy that excluded women
from jobs involving lead exposure was "not neutral because it does not
apply to the reproductive capacity of the company's male employees in the
same way as it applies to that of the females."                      Id. at 199.      Potential
pregnancy, unlike infertility, is a medical condition that is sex-related
because only women can become pregnant.                  In this case, because the policy
of denying insurance benefits for treatment of fertility problems applies
to both female and male workers and thus is gender-neutral, Johnson
Controls is inapposite.

        In Pacourek, the court held that a medical condition that prevents
a woman from becoming pregnant "naturally" is a medical

                                              -11-
condition for the purposes of the PDA.       858 F. Supp. at 1403.      The
conclusions of the court in Pacourek are unpersuasive for two reasons.
First, in reaching this conclusion, the court relied heavily on the
legislative history of the PDA.   This legislative history, however, does
not provide any direct evidence that Congress intended infertility to be
covered by the PDA.     Second, the defendant in Pacourek, unlike the
defendant in this case, did not contend (and therefore the court did not
decide)   that its policy was a gender-neutral one applicable to all
infertile workers.    We thus find in Pacourek no reason to disturb our
holding that the IMMC Plan does not violate the PDA.

                                    V.

     Finally, Krauel argues that the District Court erred in granting
summary judgment to IMMC on her Title VII sex-discrimination claims because
she (1) presented evidence of intentional sex discrimination; and (2)
established a prima facie case of disparate impact.   Having reviewed these
arguments, we conclude that the District Court properly granted summary
judgment in favor of IMMC on Krauel's Title VII claims.

                                    A.

     Krauel argues that IMMC's exclusion of infertility coverage was sex
and pregnancy motivated.    In support of this argument, Krauel offered
statements allegedly made by IMMC vice-president James Skogsbergh.   Krauel
asserts that Skogsbergh told her that the Plan excluded coverage for
infertility treatment coverage because too many women of child-bearing age
were employed by IMMC and infertility treatments result in too many
multiple births, thereby creating a financial burden on the Plan.

     In an intentional discrimination claim, "liability depends on whether
the protected trait [under the PDA, pregnancy, childbirth,

                                   -12-
or related medical condition] . . . actually motivated the employer's
decision."   Hazen Paper Co. v. Biggins, 507 U.S. 604, 610 (1993).        In the
circumstances of this case, we hold as a matter of law that the alleged
statements do not rise to the level of sex discrimination.               If the
statements demonstrate anything at all, they may indicate that cost was a
factor in IMMC's decision to exclude coverage for infertility treatment.
That is irrelevant, however, unless the fertility treatment exclusion is
a sex-based classification.      Cf. Newport News Shipbuilding & Dry Dock Co.
v. E.E.O.C., 462 U.S. 669, 685 n.26 (1983) (noting that, because exclusion
of pregnancy coverage is "gender-based discrimination on its face," a cost
comparison justification is not a defense); Arizona Governing Comm. v.
Norris, 463 U.S. 1073, 1084 n.14 (1983)      (Marshall, J., concurring) (noting
that the "greater costs of providing retirement benefits for female
employees does not justify the use of a sex-based retirement plan").          We
already have concluded, earlier in this opinion, that IMMC's fertility
treatment exclusion is not a sex-based classification because it applies
equally to all individuals, male or female.            Thus Krauel's argument
concerning IMMC's consideration of cost is irrelevant, and the District
Court did not err in granting summary judgment in favor of IMMC on Krauel's
intentional discrimination claim.

                                       B.

     Krauel    contends   that     IMMC's    infertility   treatment   exclusion
disparately impacts female employees in two ways.          First, Krauel argues
that infertility treatments have a greater impact on women because, even
if the male is the cause of the infertility, women are required, more often
than not, to undergo the treatment. Second, Krauel argues that infertility
has a greater impact on women because they bear the larger portion of the
costs for infertility treatments.      We find these arguments unpersuasive.

                                      -13-
      Title VII prohibits employment practices that may be "fair in form"
or   facially       neutral   but    that    are    "discriminatory   in   operation."
Connecticut v. Teal, 457 U.S. 440, 446 (1982) (quoting Griggs v. Duke Power
Co., 401 U.S. 424, 431 (1971)).               To establish a prima facie case of
disparate impact, Krauel must show that IMMC uses "`employment practices
that are facially neutral in their treatment of different groups but that
in   fact    fall     more    harshly   on    one   group   than   another,'   without
justification."       Houghton v. SIPCO, Inc., 38 F.3d 953, 958 (8th Cir. 1994)
(quoting International Bhd. of Teamsters v. United States, 431 U.S. 324,
336 n.15 (1977)).      The plaintiff must offer "statistical evidence of a kind
and degree sufficient to show that the practice in question has caused the
exclusion" of benefits because the beneficiaries would be women.               Watson
v. Fort Worth Bank & Trust, 487 U.S. 977, 994 (1988).

      Krauel's first argument fails because she has offered no meaningful
statistical evidence showing that female employees were more adversely
affected by the Plan's fertility exclusion than male Plan participants.
Krauel's second argument is equally unpersuasive because she has offered
no statistical evidence showing that female participants in IMMC's medical
plan and their dependent spouses incurred a disproportionate amount of the
cost of infertility treatments as compared with male Plan participants and
their dependent spouses.            The fringe benefits received by an employee
include those received from the coverage of a dependent spouse.                Newport
News, 462 U.S. at 682 (providing that the discrimination analysis for
employee insurance benefits should include coverage of the dependents of
the employees).        In this case, the District Court correctly determined
there is no evidence of a disproportionately adverse impact on female
employees.    Therefore, the District Court properly held that Krauel failed
to establish a prima facie case of disparate impact.

                                             -14-
                                  VI.

     For the foregoing reasons, the judgment of the District Court is
affirmed.

     A true copy.

            Attest:

                 CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                  -15-