Equal Emp't Opportunity Comm'n v. Flambeau, Inc.

846 F.3d 941

33 A.D. Cases 394

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff–Appellant,

v.FLAMBEAU, INC., Defendant–Appellee.

No. 16-1402

United States Court of Appeals, Seventh Circuit.

Argued September 15, 2016

Decided January 25, 2017

Anne Noel Occhialino, Attorney, Equal Employment Opportunity Commission, Washington, DC, for Plaintiff–Appellant.

Stephen A. DiTullio, Attorney, Dewitt Ross & Stevens S.C., Madison, WI, for Defendant–Appellee.

Dara Smith, Attorney, AARP Foundation Litigation, Washington, DC, for Amicus Curiae American Association of Retired Persons.

Michael S. Burkhardt, Attorney, Morgan, Lewis & Bockius LLP, Philadelphia, PA, for Amicus Curiae HR Policy Association.

Robert P. Charrow, Attorney, Laura M. Klaus, Attorney, Greenberg Traurig, LLP, Washington, DC, for Amicus Curiae Business Roundtable.

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 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 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 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.

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, 193 L.Ed.2d 571 (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.

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. 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...