No. _____
`
`In the
`Supreme Court of the United States
`__________________
`
`NORTH CAROLINA STATE HEALTH PLAN FOR
`TEACHERS AND STATE EMPLOYEES,
`Petitioner,
`
`v.
`
`MAXWELL KADEL; JASON FLECK; CONNOR
`THONEN-FLECK, BY HIS NEXT FRIENDS AND PARENTS;
`JULIA MCKEOWN; MICHAEL D. BUNTING, JR.; C.B., BY
`HIS NEXT FRIENDS AND PARENTS; SAM SILVAINE,
`Respondents.
`
`__________________
`On Petition for Writ of Certiorari
`to the United States Court of Appeals
`for the Fourth Circuit
`__________________
`PETITION FOR WRIT OF CERTIORARI
`__________________
`
`MARK A. JONES
`BELL, DAVIS & PITT, PA
`P.O. Box 21029
`Winston-Salem, NC
`27120-1029
`(336) 714-4122
`mjones@belldavispitt.com
`
`JOHN GUYTON KNEPPER
` Counsel of Record
`LAW OFFICE OF JOHN G.
`KNEPPER, LLC
`1720 Carey Avenue, Suite 590
`Cheyenne, WY 82001
`(307) 632-2842
`John@KnepperLLC.com
`
`Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
`
`
`
`In the
`Supreme Court of the United States
`__________________
`
`NORTH CAROLINA STATE HEALTH PLAN FOR
`TEACHERS AND STATE EMPLOYEES,
`Petitioner,
`
`v.
`
`MAXWELL KADEL; JASON FLECK; CONNOR
`THONEN-FLECK, BY HIS NEXT FRIENDS AND PARENTS;
`JULIA MCKEOWN; MICHAEL D. BUNTING, JR.; C.B., BY
`HIS NEXT FRIENDS AND PARENTS; SAM SILVAINE,
`Respondents.
`
`__________________
`On Petition for Writ of Certiorari
`to the United States Court of Appeals
`for the Fourth Circuit
`__________________
`PETITION FOR WRIT OF CERTIORARI
`__________________
`
`MARK A. JONES
`BELL, DAVIS & PITT, PA
`P.O. Box 21029
`Winston-Salem, NC
`27120-1029
`(336) 714-4122
`mjones@belldavispitt.com
`
`JOHN GUYTON KNEPPER
` Counsel of Record
`LAW OFFICE OF JOHN G.
`KNEPPER, LLC
`1720 Carey Avenue, Suite 590
`Cheyenne, WY 82001
`(307) 632-2842
`John@KnepperLLC.com
`
`Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
`
`
`
`i
`
`
`
`QUESTION PRESENTED
`Section 1003 of the Rehabilitation Act Amendments
`of 1986 provides that a State “shall not be immune
`under the Eleventh Amendment . . . from suit in
`Federal court” for violations of Title VI, Title IX,
`Section 504 of the Rehabilitation Act, the Age
`Discrimination Act of 1975, or—in what this Court
`has referred to as the section’s residual clause—“the
`provisions of any other Federal statute prohibiting
`discrimination by recipients of Federal financial
`assistance.” 42 U.S.C. § 2000d-7(a).
`
`The question presented is:
`
`Whether the residual clause of Section 1003 provides
`an
`“unequivocal
`textual waiver” of sovereign
`immunity, permitting suits against States under
`subsequently enacted statutory provisions that refer
`to neither States nor sovereign immunity?
`
`
`
`
`
`ii
`
`
`
`PARTIES TO THE PROCEEDING
`Petitioner, the North Carolina State Health Plan for
`Teachers and State Employees (“State Health Plan”
`or “Plan”), is an agency of the State of North
`Carolina. N.C. Gen. Stat. § 35.48.2(a). The State
`Health Plan is a Defendant in the district court
`below and was the appellant in the Fourth Circuit.
`The Plan seeks interlocutory review of the lower
`courts’ decisions that the State has waived its
`sovereign immunity.
`Respondents Maxwell Kadel, Jason Fleck, Connor
`Thonen-Fleck, Julia McKeown, Michael D. Bunting,
`Jr., C.B., by his next friends and parents, and Sam
`Silvaine are Plaintiffs below. They are current and
`former state employees, and their dependents, who
`allege that the State Health Plan impermissibly
`discriminates
`in
`the diagnoses and medical
`procedures it covers. The Plaintiffs seek injunctive,
`declaratory and monetary relief against the Plan.
`They also seek injunctive and declaratory relief
`pursuant to Ex Parte Young against two Defendants
`not before this Court: Dale Folwell, Treasurer of the
`State of North Carolina, and Dee Jones, the
`Executive Administrator of the State Health Plan.
`While the State Health Plan’s interlocutory appeal
`was pending, the magistrate judge allowed Plaintiffs
`to amend their Complaint and add an additional
`Plaintiff: Dana Caraway. In addition to joining the
`above claims against the State Health Plan and its
`officials, Caraway also asserts a claim under Title
`VII against the State Health Plan and against her
`
`
`
`iii
`
`
`employer, the North Carolina Department of Public
`Safety. The case is scheduled for trial in July 2022.
`
`
`
`
`
`iv
`
`
`
`STATEMENT OF RELATED PROCEEDINGS
`This Petition is an interlocutory appeal from the
`following decisions by the courts below:
`• Maxwell Kadel, et al. v. North Carolina State
`Health Plan for Teachers and State Employees,
`et al., No. 20-1409 (4th Cir. Sept. 1, 2021)
`(opinion affirming district court);
`
`• Maxwell Kadel, et al. v. Dale Folwell, et al., No.
`1:19-cv-272 (M.D.N.C. Mar. 10, 2020) (order
`denying motion to dismiss).
`There are no other proceedings in state or federal
`trial or appellate courts, or in this Court, directly
`related to this case within the meaning of Rule
`14.1(b)(iii).
`
`
`
`v
`
`
`
`TABLE OF CONTENTS
`QUESTION PRESENTED ......................................... i
`PARTIES TO THE PROCEEDING ........................... ii
`STATEMENT OF RELATED PROCEEDINGS ...... iv
`TABLE OF AUTHORITIES .................................... vii
`PETITION FOR A WRIT OF CERTIORARI ............ 1
`OPINIONS BELOW ................................................... 1
`JURISDICTION ......................................................... 1
`CONSTITUTIONAL AND STATUTORY
`PROVISIONS INVOLVED ........................................ 1
`STATEMENT OF THE CASE ................................... 4
`A. Statutory Background ................................... 6
`B. Factual and Procedural Background............. 9
`REASONS FOR GRANTING THE WRIT............... 15
`I. The Circuits are Split Regarding the Proper
`Interpretation of the Waiver of Sovereign
`Immunity Demanded from States by the
`Residual Clause ................................................. 15
`A. The lower courts are divided about the
`meaning of
`the
`residual
`clause’s
`reference to the “provisions of any
`other Federal
`statute
`prohibiting
`discrimination by recipients of Federal
`financial assistance” .................................... 15
`
`
`
`vi
`
`
`
`B. The disagreement between the circuits
`reflects an underlying tension within
`this Court’s jurisprudence on waivers of
`sovereign immunity..................................... 24
`II. The Decision Below is Wrong ............................ 26
`III. This Petition presents an Ideal Vehicle to
`Resolve the Conflict between the Circuits,
`which
`is Exceptionally Important and
`Squarely Presented............................................ 32
`IV. Conclusion .......................................................... 34
`APPENDIX
`
`Appendix A
`Opinion in the United States Court of Appeals
`for the Fourth Circuit
`(September 1, 2021) ........................................... App. 1
`
`Appendix B
`Memorandum Opinion and Order in the United
`States District Court for the Middle District of
`North Carolina
`(March 11, 2020) .............................................. App. 95
`
`
`Appendix C
`Statutory Provisions Involved ........................... App. 126
`
`42 U.S.C. § 18116 ..................................... App. 126
`
`42 U.S.C. § 2000d-7 ................................. App. 127
`
`
`
`
`
`vii
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy,
`548 U.S. 291 (2006) .............................................. 26
`
`
`Atascadero State Hosp. v. Scanlon,
` 473 U.S. 234 (1985) ......................... 6, 19, 25, 29, 30
`
`Buck v. Washington Metro. Area Transit Auth.,
` 427 F. Supp. 3d 60 (D.D.C. 2019 .......................... 33
`
`Cronen v. Texas Dep’t of Hum. Servs.,
` 977 F.2d 934 (5th Cir. 1992) ........... 7, 18, 19, 22, 23
`
`Dellmuth v. Muth,
` 491 U.S. 223 (1989) ....................................... passim
`
`Doe 2 v. Shanahan,
` 917 F.3d 694 (D.C. Cir. 2019) ............................... 10
`
`Edelman v. Jordan,
` 415 U.S. 651 (1974) ................................................ 5
`
`Federal Aviation Admin. v. Cooper,
` 566 U.S. 284 (2012) .............................................. 28
`
`Fields v. Dep’t of Pub. Safety,
` 911 F.Supp.2d 373 (M.D. La. 2012) ..................... 19
`
`Franciscan All., Inc. v. Burwell,
` 227 F.Supp.3d 660 (N.D. Tex. 2016) .................... 10
`
`
`
`viii
`
`
`Garcia v. Dep’t of Health & Soc. Servs.,
` No. 19-CV-159-SWS, 2020 WL 5629784
`
`(D. Wyo. Aug. 25, 2020) ........................................ 20
`
`Gruver v. Louisiana Bd. of Supervisors for
` Louisiana State Univ. Agric. & Mech. Coll.,
` 959 F.3d 178 (5th Cir. 2020) .................................. 7
`
`Lane v. Pena,
` 518 U.S. 187 (1996) ................................................ 7
`
`Levy v. Kansas Dep't of Soc. & Rehab. Servs.,
` 789 F.3d 1164 (10th Cir. 2015) ..................... passim
`
`Litman v. George Mason Univ.,
` 186 F.3d 544 (4th Cir. 1999) .................................. 7
`
`Madison v. Virginia,
` 474 F.3d 118 (4th Cir. 2006) ................................ 16
`
`McCardell v. U.S. Dep’t of Hous. & Urb. Dev.,
` 794 F.3d 510 (5th Cir. 2015) ................................ 19
`
`Melton v. Oklahoma ex rel. Univ. of Oklahoma,
` No. CIV-20-608-G, ___ F.3d ____, 2021 WL
`1220934 (W.D. Okla. Mar. 31, 2021) ................... 20
`
`
`Pennhurst State Sch. & Hosp. v. Halderman,
` 451 U.S. 1 (1981) ............................................ 18, 26
`
`Puerto Rico Aqueduct & Sewer Auth. v. Metcalf
` & Eddy, Inc., 506 U.S. 139 (1993).................. 32, 33
`
`
`
`ix
`
`
`
`
`Sossamon v. Texas,
` 563 U.S. 277 (2011) ....................................... passim
`
`Sullivan v. Texas A&M Univ. Sys.,
` 986 F.3d 593 (5th Cir. 2021) .......................... 18, 19
`
`United States v. White Mountain Apache Tribe,
` 537 U.S. 465 (2003) ........................................ 22, 25
`
`Walker v. Azar,
` 480 F.Supp.3d 417 (E.D.N.Y. 2020) ..................... 11
`
`Constitution
`
`U.S. Const. amend. xi ................................................ 1
`
`Statutes and Regulations
`
`28 U.S.C. § 1254(1) ..................................................... 1
`
`42 U.S.C. § 1395w-132 ............................................. 17
`
`42 U.S.C. § 18116 (§ 1557 of the Patient
`Protection and Affordable Care Act) ............. passim
`
`
`N.C. Gen. Stat. § 135-48 ............................................ 9
`
`N.C. Gen. Stat. § 135-48.2 ..................................... ii, 9
`
`National Transit Systems Security Act, 6
`U.S.C. § 1142 ........................................................ 33
`
`
`
`x
`
`
`Nondiscrimination in Health Programs and
`Activities, 81 Fed. Reg. 31376 (May 18, 2016) .... 10
`
`
`in Health and Health
`Nondiscrimination
`Education Programs or Activities, Delegation
`of Authority, 85 Fed. Reg. 37160 (June 19,
`2020) ...................................................................... 10
`
`
`Rehabilitation Act Amendments of 1986,
`§ 1003, 100 Stat. 1807, 1845 (October 21,
`1986) located, but not codified by Act of
`Congress at 42 U.S.C. § 2000d-7 ................... passim
`
`
`Rehabilitation Act of 1973 § 504, 29 U.S.C. § 794
`
` ....................................................................... 8, 9, 12
`
`Religious Land Use and Institutionalized
`Persons Act (RLUIPA), 42 U.S.C. § 2000cc-1 ........ 8
`
`
`Other Authorities
`
`“Overview of the Retiree Drug Subsidy Option,”
`U.S. Department of Health and Human
`Services, Centers
`for Medicare
`and
`Medicaid Services,
`at
`available
`https://go.cms.gov/39s9xJt (Nov. 2, 2005) ............ 17
`
`
`George D. Brown, State Sovereignty Under the
`Burger Court––How the Eleventh Amendment
`Survived the Death of the Tenth: Some
`Broader Implications of Atascadero State
`Hospital v. Scanlon, 74 GEO. L.J. 363 (1985) ...... 29
`
`
`
`xi
`
`
`
`DIAGNOSTIC AND STATISTICAL MANUAL OF
`MENTAL DISORDERS 451 (5th ed. 2013) ................ 10
`
`
`Nat’l Ass’n of State Budget Offices, 2020 STATE
`EXPENDITURE REPORT 14 (2020) located at
`https://bit.ly/2ZA4LJt ............................................. 5
`
`
`President Barack Obama, Remarks on Signing
`the Patient Protection and Affordable Care
`Act, 2010 DAILY COMP. PRES. DOC. 197
`(March 23, 2010) ..................................................... 8
`
`
`
`
`
`
`
`1
`
`PETITION FOR A WRIT OF CERTIORARI
`Petitioner, the North Carolina State Health Plan for
`Teachers and State Employees, respectfully petitions
`for a writ of certiorari to review the judgment of the
`United States Court of Appeals for the Fourth
`Circuit.
`
`OPINIONS BELOW
`The court of appeals’ opinion is available at 12 F.4th
`422 (4th Cir. 2021). Pet. App.1–94. The district
`court’s opinion is available at 446 F.Supp.3d 1
`(M.D.N.C. 2020). Pet. App. 95–125.
`JURISDICTION
`The court of appeals’ judgment was entered on
`September 1, 2021. Pet. App. 1. This Court has
`jurisdiction under 28 U.S.C. § 1254(1).
`CONSTITUTIONAL AND STATUTORY
`PROVISIONS INVOLVED
`The Eleventh Amendment provides:
`The Judicial power of the United States shall not be
`construed to extend to any suit in law or equity,
`commenced or prosecuted against one of the United
`States by Citizens of another State, or by Citizens or
`Subjects of any Foreign State.
`Section 1003 of the Rehabilitation Act Amendments
`of 1986, 42 U.S.C. § 2000d-7, provides:
`(a) General provision
`
`
`
`2
`
`
`
`(1) A State shall not be immune under
`the Eleventh Amendment
`of
`the
`Constitution of the United States from
`suit in Federal court for a violation of
`section 504 of the Rehabilitation Act of
`1973 [29 U.S.C. § 794], title IX of the
`Education Amendments of 1972 [20 U.S.C.
`§ 1681 et seq.], the Age Discrimination Act
`of 1975 [42 U.S.C. § 6101 et seq.], title VI
`of the Civil Rights Act of 1964 [42 U.S.C. §
`2000d et seq.], or the provisions of any
`other
`Federal
`statute
`prohibiting
`discrimination by recipients of Federal
`financial assistance.
` (2) In a suit against a State for a
`violation of a statute referred to
`in
`paragraph
`(1),
`remedies
`(including
`remedies both at law and in equity) are
`available for such a violation to the same
`extent as such remedies are available for
`such a violation in the suit against any
`public or private entity other than a State.
`(b) Effective date. The provisions of subsection (a)
`shall take effect with respect to violations that occur
`in whole or in part after October 21, 1986.
`
`Section 1557(a) of the Patient Protection and
`Affordable Care Act (42 U.S.C. § 18116(a)) provides:
`(a) Except as otherwise provided for in
`this title (or an amendment made by this
`title), an individual shall not, on the
`
`
`
`
`
`3
`
`ground prohibited under title VI of the
`Civil Rights Act of 1964 (42 U.S.C. §
`2000d et seq.), title IX of the Education
`Amendments of 1972 (20 U.S.C. § 1681 et
`seq.), the Age Discrimination Act of 1975
`(42 U.S.C. § 6101 et seq.), or section 794 of
`title 29, be excluded from participation in,
`be denied the benefits of, or be subjected
`to discrimination under, any health
`program or activity, any part of which is
`receiving Federal
`financial assistance,
`including credits, subsidies, or contracts of
`insurance, or under any program or
`activity that
`is administered by an
`Executive Agency
`or
`any
`entity
`established
`under
`this
`title
`(or
`amendments).
`The
`enforcement–
`mechanisms provided for and available
`under such title VI, title IX, section 794,
`or such Age Discrimination Act shall
`apply for purposes of violations of this
`subsection.
`
`
`
`
`
`
`
`4
`
`STATEMENT OF THE CASE
`This case presents a circuit split involving the
`
`interpretation of the residual clause of Section 1003
`of the Rehabilitation Act Amendments of 1986.
`Section 1003 provides that a “State shall not be
`immune” from suit for violations of four listed civil
`rights statutes or “the provisions of any other
`Federal statute prohibiting discrimination by
`recipients of Federal financial assistance.” 42 U.S.C.
`§ 2000d-7(a).
`
`The States within the Fourth Circuit now face
`
`deep uncertainty because that circuit has concluded
`that this residual catch-all clause waives state
`sovereign
`immunity
`even when
`the
`anti-
`discrimination provision itself does not refer to
`states or suits against states at all. Moreover, the
`panel has added further ambiguity to the provision,
`holding that the waiver either applies to all
`provisions prohibiting discrimination in federally
`funded programs (the concurrence’s conclusion) or to
`all provisions of any sort that appear in a statute
`that also contains a provision forbidding such
`discrimination (the panel author’s conclusion).
`
`The Fifth and Tenth Circuit have rejected
`
`these broad interpretations of the residual clause as
`inconsistent with this Court’s command to “find
`waiver only where stated by the most express
`language or by such overwhelming implications from
`the text as will leave no room for any other
`reasonable construction.” Levy v. Kansas Dep’t of
`
`
`
`5
`
`
`Soc. & Rehab. Servs., 789 F.3d 1164, 1170 (10th Cir.
`2015) (quoting Edelman v. Jordan, 415 U.S. 651, 673
`(1974)) (internal punctuation omitted). Both circuits
`have concluded that the residual clause reaches, at
`most, instances where the entire Federal statute—
`not just a single provision tucked within an omnibus
`statute—is
`concerned
`exclusively
`with
`discrimination by recipients of Federal financial
`assistance. This alternative interpretation, and the
`two interpretations offered by the majority below,
`mean
`that
`the
`residual
`clause does not
`“unequivocally express” a demand for a waiver of
`sovereign immunity. The suit against the State
`Health Plan should have been dismissed.
`
`The States received approximately $732
`
`billion in federal funds during their 2020 fiscal
`years, for such services as education, roads, and
`Medicaid. Nat’l Ass’n of State Budget Offices, 2020
`STATE EXPENDITURE REPORT 14
`(2020)
`located
`at https://bit.ly/2ZA4LJt.
`Anti-discrimination–
`provisions in statutes are common, and as with the
`provision pressed by the Plaintiffs below, these
`provisions rarely, if ever, refer to States. While a
`plaintiff must still identify a cause of action, the
`Eleventh Amendment’s protection has been shuffled
`aside for the states of the Fourth Circuit.
`
`As the dissent noted below, the Fourth Circuit
`
`has created a “consequential circuit split” that
`should have been “squarely foreclosed” by this
`Court’s decisions. Pet. App. 93 (Agee, J., dissenting).
`
`
`
`6
`
`
`“The Supreme Court should proceed expeditiously to
`correct the constitutional error here.” Pet. App. 94.
`
`A.
`
`Statutory Background
`
`1. States can waive sovereign immunity as a
`condition of receiving federal funds, but Congress
`must “manifest[ ] a clear intent to condition” federal
`funding on a waiver in the text of the relevant
`statute. Atascadero State Hosp. v. Scanlon, 473 U.S.
`234, 247 (1985). A year after Atascadero held that
`the Rehabilitation Act of 1973 did not abrogate or
`waive state sovereign immunity, Congress responded
`with a provision some lower courts call the “Civil
`Rights Remedies Equalization Act” or “CRREA”:
`
`A State shall not be immune under the
`Eleventh Amendment . . . from suit in
`Federal court for a violation of section
`504 of the Rehabilitation Act of 1973,
`title IX of the Education Amendments
`of 1972, the Age Discrimination Act of
`1975, title VI of the Civil Rights Act of
`1964, or the provisions of any other
`Federal
`statute
`prohibiting
`discrimination by recipients of Federal
`financial assistance.
`
`1986,
`of
`Amendments
`Act
`Rehabilitation
`§ 1003(a)(1), 100 Stat. 1807, 1845 (October 21, 1986)
`
`
`
`7
`
`
`(located, but not codified by Act of Congress, at 42
`U.S.C. § 2000d-7) (emphasis added).1
`
`2. CRREA’s text naturally reads as though Congress
`intended to abrogate sovereign immunity (a State
`“shall not be immune”) rather than entice a waiver
`with the offer of federal funds. Nevertheless, in
`dicta, this Court referred to CRREA as providing
`“the sort of unequivocal waiver” required to waive
`sovereign immunity. Lane v. Pena, 518 U.S. 187, 198
`(1996). After Lane, lower courts have found “an
`unambiguous waiver of
`the state’s Eleventh
`Amendment
`immunity”
`to enforce
`the
`four
`specifically listed statutes. E.g., Litman v. George
`Mason Univ., 186 F.3d 544, 554 (4th Cir. 1999) (Title
`IX). See generally Gruver v. Louisiana Bd. of
`Supervisors for Louisiana State Univ. Agric. & Mech.
`Coll., 959 F.3d 178, 181 n.2 (5th Cir. 2020)
`(collecting cases).
`
`Until recently, however, lower courts have
`
`rejected attempts to find additional waivers of
`sovereign immunity through the residual clause’s
`reference to any “other Federal statute prohibiting
`discrimination.” See, e.g., Cronen v. Texas Dep’t of
`Hum. Servs., 977 F.2d 934, 937 (5th Cir. 1992)
`(holding no waiver of sovereign immunity for claim
`of violation
`of
`the Supplemental Nutrition
`Assistance Program because that Act does not “deal
`
`1 The Court has considered this provision before, but it has
`never used this title or acronym. Because the acronym CRREA
`is used throughout the opinion below, the Petitioner has
`adopted this term for clarity.
`
`
`
`8
`
`
`solely with discrimination by recipients of federal
`financial assistance”).
`
`This Court last reviewed the residual clause
`
`ten years ago, in Sossamon v. Texas, 563 U.S. 277,
`292 (2011). Sossamon reserved judgment on whether
`the residual clause constitutes an “unequivocal
`textual waiver” of sovereign immunity at all, holding
`only that to even be considered a “statute prohibiting
`discrimination” under the residual clause, the
`statute must, at a minimum, use the term
`“discrimination.” Id. Because § 3 of the Religious
`Land Use and
`Institutionalized Persons Act
`(RLUIPA), 42 U.S.C.
`§ 2000cc-1, prohibits
`“substantial burden on the religious exercise” of
`institutionalized persons, not “discrimination,” the
`residual clause does not “clearly extend[ ]” to it. Id.
`
`3. In 2010, Congress enacted the Patient Protection
`and Affordable Care Act, a historic remaking of the
`health care industry. See, e.g., President Barack
`Obama, Remarks on Signing the Patient Protection
`and Affordable Care Act, 2010 DAILY COMP. PRES.
`DOC. 197 (March 23, 2010) (“Today, after almost a
`century of trying
`. . . health insurance reform
`becomes law in the United States of America.”).
`Within the ACA, Congress included a provision that
`applies the non-discrimination grounds in title VI,
`title IX, the Age Discrimination Act of 1975, and
`§ 504 of the Rehabilitation Act to “any health
`program or activity, any part of which is receiving
`Federal financial assistance.” 42 U.S.C. § 18116(a).
`This provision, § 1557, provides that individuals
`
`
`
`9
`
`
`“shall not . . . be excluded from participation in, be
`denied
`the benefits of, or be
`subjected
`to
`discrimination” on
`these grounds under any
`federally
`funded program administered by an
`Executive Agency or created by the ACA. Id.
`(emphasis added). Section 1557 adopts
`the
`“enforcement mechanisms provided for and available
`under such title VI, title IX, § [504], or such Age
`Discrimination Act” for alleged violations. Id.
`
`B. Factual and Procedural Background
`
`1. Petitioner, the North Carolina State Health Plan
`for Teachers and State Employees (the “State Health
`Plan” or “Plan”) is an agency of the State of North
`Carolina. N.C. Gen. Stat. § 135-48.2. The State
`Health Plan
`is
`self-funded, using employee
`premiums and appropriations
`from the North
`Carolina General Assembly to pay over $3.2 billion
`annually for health care. See generally N.C. Gen.
`Stat. § 135-48.
`
`The Plaintiffs are transgender individuals and
`
`the parents of transgender individuals who enrolled
`in the Plan. They allege that because the Plan does
`not cover gender transition treatments, the Plan
`discriminates against them in violation of § 1557 of
`the ACA. For example, the Plaintiffs argue, in part,
`that because the Plan covers mastectomies and
`breast reconstruction for the treatment of breast
`cancer, the Plan must also cover mastectomies or
`breast augmentations when a mental health
`
`
`
`10
`
`
`professional concludes these procedures are needed
`to treat gender dysphoria.2
`
`In 2016, the U.S. Department of Health and
`Human Services issued a final rule interpreting
`§ 1557 that required health plans to cover gender
`reassignment surgery and hormone
`treatment
`beginning in 2017. Nondiscrimination in Health
`Programs and Activities, 81 Fed. Reg. 31376, 81472–
`73 (May 18, 2016). The State Health Plan complied
`and authorized this coverage for the 2017 Plan year.
`Maxwell Kadel, et al. v. Dale Folwell, et al., No. 1:19-
`CV-272 (M.D.N.C. Mar. 10, 2020) (Complaint, ECF
`No. 75 at ¶¶ 56–58). A federal court subsequently
`enjoined this regulatory requirement, Franciscan
`All., Inc. v. Burwell, 227 F.Supp.3d 660 (N.D. Tex.
`2016), and the Plan allowed the coverage expansion
`to lapse at the end of 2017. (Complaint at ¶¶ 61–62).
`HHS subsequently revised
`its regulation and
`removed this mandate, Nondiscrimination in Health
`and Health Education Programs or Activities,
`Delegation of Authority, 85 Fed. Reg. 37160, 37161-
`62 (June 19, 2020), but this rule has also been
`
`
`2 Gender dysphoria is “a mental health condition from which
`only a subset of transgender people suffer.” Doe 2 v. Shanahan,
`917 F.3d 694, 708 (D.C. Cir. 2019) (Williams, J., concurring).
`Transgender “identity per se”
`is not a mental
`illness.
`DIAGNOSTIC AND STATISTICAL MANUAL OF MENTAL DISORDERS
`451 (5th ed. 2013). Gender dysphoria requires more than
`discomfort from living as a member of one’s biological sex; the
`patient’s “cognitive discontent” must be so disabling that it
`causes “clinically significant distress or impairment in social,
`occupational, or other important areas of functioning.” Id. at
`451, 453.
`
`
`
`11
`
`
`enjoined, Walker v. Azar, 480 F.Supp.3d 417
`(E.D.N.Y. 2020).
`
`The Plaintiffs sued the State Health Plan in
`
`the U.S. District Court for the Middle District of
`North Carolina on March 11, 2019, alleging that the
`refusal to pay for treatment of gender dysphoria is
`discrimination “on the basis of sex” in a “health
`program or activity.” (Complaint at ¶¶ 149–50).
`Plaintiffs allege that § 1557 of the ACA guarantees
`the “right . . . to receive health insurance through
`[the Plan] free from discrimination on the basis of
`sex, sex characteristics, gender, nonconformity with
`sex stereotypes, transgender status, or gender
`transition.” (Complaint at ¶ 153). The Plaintiffs seek
`compensatory damages, consequential damages, and
`injunctive relief against Petitioner. (Complaint at ¶¶
`156–57).
`
`The State Health Plan asserted sovereign
`
`immunity and moved to dismiss the § 1557 claim.
`Pet. App. 96–97, 99–100. The district court
`acknowledged that neither § 1557 nor any other
`provision in the ACA refers to suits against states or
`to sovereign immunity. Pet. App. 115. The court
`denied the motion, however, concluding that § 1557
`is “sufficiently similar” to the statutes specifically
`listed in CRREA that a state official “would clearly
`understand that the acceptance of federal funds
`would subject it to suit” pursuant to the residual
`clause. Pet. App. 116. According to the district court,
`Section 1557 of the ACA prohibits the same “kinds of
`discrimination”
`and
`incorporates
`the
`same
`“enforcement mechanisms” as the statutes listed in
`CRREA. Pet. App. 116–17. “In short, it is hard to see
`
`
`
`12
`
`
`how Section 1557 could be any more like the statutes
`expressly listed.” Pet. App. 117. Section 1557 “when
`read in conjunction with the CRREA, effectuates a
`valid waiver of sovereign immunity,” the district
`court concluded. Pet. App. 119.
`
`2. The State Health Plan sought interlocutory
`review by the Fourth Circuit, which affirmed the
`denial of immunity in a divided opinion. Pet. App. 1–
`94. The majority rejected the Plan’s argument that
`CRREA could not waive sovereign immunity to
`enforce § 1557 of the ACA because the ACA and
`CRREA were enacted separately and neither statute
`references the other. The residual clause “reflects a
`specific objective to render states liable for money
`damages when
`they
`engage
`in
`unlawful
`discrimination.” Pet. App. 29. “[B]road general
`language
`is not necessarily ambiguous when
`congressional objectives require broad terms,” and
`the origins of CRREA indicate that broad terms were
`needed. Pet. App. 24. CRREA provides “clear notice”
`to state officials that sovereign immunity is waived
`for “the provisions of ‘any’ federal statute that
`prohibits discrimination by recipients of federal
`funds.” Pet. App. 24. (emphasis in original). The
`panel concluded that the residual clause waives
`sovereign immunity in all cases when a “law [is]
`federal” and a provision within that law “prohibits
`discrimination by recipients of federal financial
`assistance.” Pet. App. 26.3
`
`
`3 The author of the panel opinion, Chief Judge Gregory, also
`concluded that § 1557’s reference to the “enforcement
`mechanisms” of Title IX and § 504 of the Rehabilitation Act
`incorporated the waiver of sovereign immunity that exists to
`
`
`
`13
`
`
`judge offered a different
`The concurring
`
`analysis with a more
`limited effect. Congress
`intended to include “at least some claims” under
`CRREA in addition to the listed statutes. Pet. App.
`34. The concurrence then offered two different
`interpretations of the residual clause. Congress
`could have either intended a waiver for “provisions
`that target discrimination by recipients of federal
`financial assistance” or intended a waiver for “a
`claim brought under any provision of a statute that,
`somewhere,
`contains a provision prohibiting”
`discrimination. Pet. App. 34. Recognizing that
`sovereign
`immunity waivers must be strictly
`construed in favor of the sovereign, Sossamon, 563
`U.S. at 285, the concurrence adopted a narrower
`interpretation than the panel opinion: the residual
`clause applies
`to all provisions prohibiting
`discrimination by recipients of federal funds rather
`than—as the panel opinion concluded—the entirety
`of a statute that contains such a provision. Pet. App.
`38–43. Even under the narrow
`interpretation,
`however, the concurrence concluded that the State
`waived its immunity. Pet. App. 49–50.
`
`The panel acknowledged that this decision
`splits from the interpretation of the residual clause
`by the Fifth and Tenth Circuit. Pet. App. 25 n.4. The
`court below also acknowledged that the panel
`opinion and the concurrence disagreed about which
`interpretation of the residual clause is correct. Pet.
`App. 27 n.5. Because a majority held that the State
`had waived its immunity to the Plaintiffs’ suit,
`
`
`enforce those statutes. Pet. App. 18. No other judge joined this
`portion of the panel opinion.
`
`
`
`14
`
`
`“regardless” of the specific reasoning, the lower
`court’s decision was affirmed. Id.
`3. The dissent rejected the majority and concurring
`opinions as a departure
`from
`this Court’s
`“meticulously
`curated”
`sovereign
`immunity
`jurisprudence, which directs courts “to follow the
`same well-trodden analytical path: ‘A State’s consent
`to suit must be ‘unequivocally expressed’ in the text
`of the relevant statute.’” Pet. App. 50. The residual
`clause does not unequivocally express its demand for
`a waiver as there is “at least one other plausible
`interpretation”: the interpretation adopted by the
`Fifth and Tenth Circuits. Pet. App. 62. These circuits
`require “that the relevant legislative enactment as a
`whole—not just one of its individual provisions—be
`solely aimed at prohibiting discrimination by
`recipients of federal financial assistance.” Pet. App.
`71. As an “omnibus health care reform package,” the
`ACA fails this test. Pet. App. 70. When other
`plausible interpretations exist, this Court has been
`“crystal clear” that there is no waiver of sovereign
`immunity. Pet. App. 72.
`
`Beyond this error, the dissent pointed to this
`
`Court’s longstanding requirement that a demand for
`waiver be found in the “text of the relevant statute.”
`The “broad catchall language” of CRREA’s residual
`clause cannot provide such a waiver for another
`unidentified statute. Pet. App. 78. There can be no
`knowing waiver of immunity in the “text of the
`relevant statute” when the waiver itself is “hidden in
`another statute and only applied to section 1557
`through implication.” Pet. App. 79 (quoting Levy v.
`
`
`
`15
`
`
`Kansas Dep’t of Soc. & Rehab. Servs., 789 F.3d 1164,
`1170 (10th Cir. 2015)).
`
`The dissent concluded that “[t]he Supreme
`
`Court should correct the majority’s errors without
`delay to ensure the preservation of the integrity of
`the Eleventh Amendment and the dignity of state
`sovereign immunity.” Pet. App. 53.
`
`REASONS FOR GRANTING THE WRIT
`
`I. The Circuits are Split Regarding the
`Proper Interpretation of the Waiver of
`Sovereign Immunity Demanded from States
`by the Residual Clause.
`
`A. The lower courts are divided about the
`meaning of
`the
`residual clause’s
`reference to the “provisions of any
`other Federal
`statute prohibiting
`discrimination by recipients of Federal
`financial assistance”
`1. This Court has considered the meaning of the
`residual clause twice, but only to find that the clause
`did not waive sovereign immunity for another
`unlisted statute. In Sossamon, the Court held that “a
`State might reasonably conclude that the clause
`covers
`only
`provisions
`using
`the
`term
`‘discrimination.’” 563 U.S. at 292. Therefore, a
`pro
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