Doe v. Pennsylvania

582 F.Supp.3d 206

John DOE, Plaintiff

v.Commonwealth of PENNSYLVANIA, et al., Defendants

CIVIL ACTION NO. 1:19-CV-2193

United States District Court, M.D. Pennsylvania.

Signed January 26, 2022

Robert H. Graff, Graham F. Baird, Justin Frederick Robinette, The Law Offices of Eric A. Shore, P.C., Philadelphia, PA, for Plaintiff.

Lindsey A. Bedell, PA Office of Attorney General, Caleb Curtis Enerson, Pennsylvania Dept. of Labor and Industry, Harrisburg, PA, for Defendants Commonwealth of Pennsylvania, Department of Human Services.

Brian Casal, Pro Hac Vice, Heather Z. Steele, Fisher & Phillips, LLP, Philadelphia, PA, for Defendant Pennsylvania Employees Benefit Trust Fund.

Heather Z. Steele, Fisher & Phillips, Philadelphia, PA, for Defendants Sharon P. Minnich, Randy Albright, Korvin Auch, Jay Gasdaska, Tara Long, Teresa Miller, Jennifer Swails, Erika Swaney, Brenda Warburton, David Fillman, Michael Bodinsky, Richard Caponi, William Einhorn, Dave Henderson, Tom Herman, Dominic Sgro, Matt Yarnell, Wendell W. Young, IV.

Douglas Cameron, Catherine S. Ryan, Pro Hac Vice, Chalyn Galligan, Mariah H. McGrogan, Pro Hac Vice, Reed Smith LLP, Pittsburgh, PA, Meredith Shippee, Pro Hac Vice, Reed Smith LLP, Chicago, IL, for Defendants Highmark Health Insurance Company, Highmark Health, Highmark, Inc., Highmark Blue Cross Blue Shield, Highmark Blue Shield, Highmark.

Catherine S. Ryan, Pro Hac Vice, Chalyn Galligan, Mariah H. McGrogan, Pro Hac Vice, Reed Smith LLP, Pittsburgh, PA, for Defendant HM Health Insurance Company.

MEMORANDUM

Christopher C. Conner, United States District Judge

Plaintiff John Doe alleges 14 claims against several defendants, all arising out of denial of insurance coverage for his gender confirmation surgery. Doe alleges claims against his employer, the Commonwealth of Pennsylvania and its Department of Human Services; the Pennsylvania Employees Benefit Trust Fund and its board and trustees¹ (collectively "PEBTF defendants"); and several defendants representing his insurance company, Highmark Health Insurance.² Doe asserts employment discrimination claims under various federal and state statutes, healthcare discrimination under federal law, and claims for violation of both the United States Constitution and the Pennsylvania Constitution. The PEBTF defendants move to dismiss the claims against them pursuant to Federal Rules of Civil Procedure 12(b)(5) and 12(b)(6).

I. Factual Background & Procedural History

Plaintiff John Doe is a transgender employee of the Commonwealth of Pennsylvania's Department of Human Services in its Office of Mental Health and Substance Abuse Services. (See Doc. 60 ¶¶ 9, 56). Doe has worked for the Commonwealth since 2008. (See id. ¶ 9). Doe carries a diagnosis of gender dysphoria, a medical condition that may require treatments including gender confirmation surgery ("GCS"). (See id. ¶¶ 10-11, 57-61). Doe began receiving gender-affirming health treatment in May 2014. (See id. ¶ 81). His treatment included behavioral health counseling and hormone therapy, and his treatment provider determined that a bilateral mastectomy was clinically appropriate and medically necessary. (See id. ¶¶ 81-82).

According to the second amended complaint, the Commonwealth created the Pennsylvania Employees Benefit Trust Fund ("PEBTF") pursuant to a collective-bargaining agreement in 1988 to provide "employer-sponsored health plan, medical, and related benefits" to Commonwealth employees. (See id. ¶¶ 3, 32-33). PEBTF is governed by a board of trustees comprised of at least 14 members—these members are appointed by either a union or by the Commonwealth's governor. (See id. ¶ 34). The second amended complaint avers PEBTF acts on behalf of the Commonwealth of Pennsylvania to provide, administer, and set policy for health insurance that it provides to state employees. (See id. ¶¶ 35, 37-43). PEBTF also receives "funding from contributions made by state entities." (See id. ¶ 36). Highmark is a "third-party administrator" of the health plan Doe is enrolled in through his Commonwealth employment. (See id. ¶¶ 14, 88). In 2016 and years prior, PEBTF "excluded coverage under all options available under the PEBTF Medical Plan" for GCS. (See id. ¶¶ 67-74). GCS coverage was expressly excluded from the 2016 plan, as were "charges for any treatment relating to or in connection with" GCS. (See id. ¶¶ 68-69, 72). The 2017 plan retained this exclusion, but also carved out an exception: the exclusion would not apply if excluding coverage would violate the Patient Protection and Affordable Care Act. (See id. ¶¶ 70, 73).

In July 2016, Doe sought authorization for coverage for a mastectomy and related procedures, but "a representative of Highmark" informed Doe that the procedure was excluded. (See id. ¶¶ 89-90). Doe's doctor provided Highmark a letter explaining the medical necessity of these procedures, but nothing changed. (See id. ¶¶ 91-92). In November 2016, a Highmark representative from the "dedicated PEBTF unit" advised Doe that his request was never reviewed "because the Commonwealth and/or PEBTF [did] not offer these benefits." (See id. ¶¶ 93-94). Notably, however, the executive director of PEBTF stated in a November 2016 letter that PEBTF's 2017 plans would cover GCS. (See id. ¶ 96).

On January 3, 2017, another Highmark representative informed Doe that GCS would be covered in his 2017 PEBTF plan. (See id. ¶ 98). Doe again communicated with Highmark and his provider's office to secure necessary documentation for GCS coverage. (See id. ¶¶ 99-100). But a few weeks later, on February 8, 2017, a Highmark representative communicated to Doe that "PEBTF sent coding to reinstate the exclusion" for GCS as the result of litigation pending in the state of Texas. (See id. ¶¶ 101-103). Doe received a letter dated February 22, 2017, from PEBTF's executive director confirming that "PEBTF postponed any changes to its plan benefits pending the outcome of [the Texas] litigation." (See id. ¶ 104).

After the denial, Doe experienced "severe emotional distress in the form of body dysmorphia and immense psychological trauma." (See id. ¶ 105). Doe felt compelled to take sick leave, his social life suffered, and he avoided otherwise-pleasurable activities such as visiting the beach and going to the gym. (See id. ¶¶ 105-117). Doe alleges that the "unequal terms and conditions" of his employment continued until January 1, 2018, when the GCS coverage exclusion was removed. (See id. ¶¶ 67, 118). Doe received GCS in March 2018 with costs (less the deductible) covered by his PEBTF plan. (See id. ¶ 110).

Doe filed the instant lawsuit in December 2019. Following this court's memorandum opinion and order in March 2021, Doe filed a second amended complaint, asserting various statutory and constitutional claims. He seeks compensatory and punitive damages, fees, costs, and interest, as well as equitable and injunctive relief. The PEBTF defendants filed a motion to dismiss, and the motion is fully briefed and ripe for disposition.

II. Legal Standard

A. Rule 12(b)(5)

Rule 4 of the Federal Rules of Civil Procedure "sets forth the procedure by which a court obtains personal jurisdiction over the defendant." Ayres v. Jacobs & Crumplar, P.A., 99 F.3d 565, 569 (3d Cir. 1996). The rule prescribes the process for properly issuing and serving a summons. See FED. R. CIV. P. 4. A party may challenge the method of service or the lack of service of process under Rule 12(b)(5). See FED. R. CIV. P. 12(b)(5) ; 5B CHARLES ALAN WRIGHT ET AL. , FEDERAL PRACTICE & PROCEDURE § 1353 (3d ed. 2018). In a challenge to sufficiency of service, the burden of proof lies on the party asserting the validity of service. See Grand Entm't Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 488 (3d Cir. 1993) (citation omitted). The movant must be specific in its objections and identify the exact manner in which the plaintiff has failed to satisfy the summons or service provision utilized. See 2 JAMES W. MOORE ET AL. , MOORE'S FEDERAL PRACTICE § 12.33[1] (3d ed. 2013).

B. Rule 12(b)(6)

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for the dismissal of complaints that fail to state a claim upon which relief may be granted. FED. R. CIV. P. 12(b)(6). When ruling on a motion to dismiss under Rule 12(b)(6), the court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002) ).

Federal notice and pleading rules require the complaint to provide "the defendant fair notice of what the ... claim is and the grounds upon which it rests." Phillips, 515 F.3d at 232 (alteration in original) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). To test the sufficiency of the complaint, the court conducts a three-step inquiry. See Santiago v. Warminster Township, 629 F.3d 121, 130-31 (3d Cir. 2010). In the first step, "the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.’ " Id. at 130 (alteration in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ). Next, the factual and legal elements of a claim must be separated; well-pleaded facts are accepted as true, while mere legal conclusions may be disregarded. Id. at 131-32 ; see Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Once the court isolates the well-pleaded factual allegations, it must determine whether they are sufficient to show a "plausible claim for relief." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ); Twombly, 550 U.S. at 556, 127 S.Ct. 1955. A claim is facially plausible when the plaintiff pleads facts "that allow[ ] the court to draw the reasonable...