LEVEL 1 - 2 OF 2 STORIES Copyright 1991 New York Law Publishing Company New York Law Journal August 23, 1991, Friday SECTION: COURT DECISIONS; Pg. 21 LENGTH: 5061 words HEADLINE: Suit for Health Coverage Withstands Motion to Dismiss; Gay Teachers Association v. Board of Education of the City School District of the City of New York, Supreme Court, IA Part 9, Justice K. Moskowitz. BODY: SUMMARY New York County PLAINTIFFS BROUGHT an action contesting respondents' denial of spousal health insurance coverage for the domestic partners of gay and lesbian employees, on the ground that it violates state anti-discrimination statutes, the New York and United States Constitutions and respondents' own policies. Respondents moved for dismissal for failure to state a cause of action. The court denied respondents' motion, except as to a Civil Rights Law claim and a claim for punitive damages. IA PART 9 Justice Moskowitz GAY TEACHERS ASSOCIATION v. BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF THE CITY OF N.Y. -- Plaintiffs challenge the policy of the Board of Education of the City of New York of providing health insurance benefits to its employees, their spouses and children and of denying these benefits to the domestic partners of gay and lesbian employees. Defendants Board of Education, Health and Welfare Services Unit,Chancellor Green, City of New York, Mayor Koch, Office of Municipal Labor Relations, Gwynne individually and officially and Linn and their successors individually and officially (collectively the "municipal defendants") move, pursuant to CPLR 3211(a)(7) to dismiss the complaint as against them for failure to state a cause of action. The caption is deemed amended to reflect successor public officials. Defendants State of New York and Governor Cuomo (collectively the"State defendants") also cross-move to dismiss. For the reasons set forth below, the municipal defendants' motion to dismiss is denied except as to the fourth cause of action and claim for punitive damages which are dismissed; the State defendants' crossmotion to dismiss as to them is granted. The caption is deemed amended to delete defendants State of New York and Mario Cuomo, as Governor. The Complaint The plaintiffs in this action are gay and lesbian teachers and school workers ("gay teachers") employed by the Board of Education of the City School District of the City of New York (the "Board of Education"), together with their domestic partners and the Gay Teachers' Association, a not-for-profit organization which represents the interests of gay and lesbian teachers, supervisors, and school workers in New York City. Plaintiffs allege that the denial of health benefits to the domestic partners of gay and lesbian Board of Education employees is discriminatory on the basis of marital status and sexual orientation. They allege that this discrimination violates the Administrative Code of the City of New York @@8-107(a) and 8-108.1, dealing with employment discrimination; Executive Order 28 issued by Governor Cuomo, 9 NYCRR @4.28; Article 15 of the State Human Rights Law, Executive Law @296; State Civil Rights Law @40-C; the Equal Protection Clause to the Constitution of the State of New York,(Article I, @11); and the Due Process Clause of the Constitution of the State of New York (Article I, @6), plaintiffs acknowledge that under current Kern York law, a gay or lesbian marriage is not legally recognized. The complaint sets forth certain factual allegations that the court deems true for the purpose of this motion and cross motion: (1) The Board of Education and duly constituted labor organizations representing teachers, supervisors, and administrative employees of the Board of Education entered into collective bargaining agreements which govern the terms and conditions of employment for teachers,supervisors and school workers. (Complaint, paragraphs 18, 21). (2)The Board of Education agreed to provide a choice of health and hospital insurance coverage from among designated plans. (Complaint,paragraphs 19, 22). (3) The benefit plans available to Board of Education employees, cover the employees, their spouses and dependent children. (Complaint, paragraphs 26-27). (4) The Health and Welfare Services Unit of the Board of Education denied the named plaintiffs,who are Board of Educations employees, insurance coverage and benefits for their domestic partners. (5) The denials were on the ground that"only legally married spouses are eligible for coverage" and "spouses must be legally married in order to be eligible for coverage age."(Complaint, paragraphs 32, 36, 42). Independently, each of the school employee plaintiffs, who are unmarried, applied for the addition of their domestic partners of longstanding, who are also plaintiffs, to the benefits plan. Each employee has been employed for a lengthy period of time and has been involved in a domestic partnership equally long. For instance,plaintiff Berman has been a high school employee for 24 years, and she and plaintiff Kurtz have been domestic partners for 14 years. The complaint alleges that each couple shares the "common necessities of life" and are in a relationship virtually indistinguishable from a legally recognized marriage except that State law precludes each from obtaining a marriage license. Defendant Donna Gwynne, Director or the Employee Benefits Program of the Office of Municipal Labor Relations of the City of New York, denied plaintiff Smith's application and defendant Health and Welfare Services Unit of the Board of Education denied plaintiff Smith's, Berman's and Madson's applications for the same reasons. After these denials, the teachers and their domestic partners commenced this lawsuit in conjunction with the Gay Teachers Association as a representative organization for gay teachers and school workers. In their prayer for relief, plaintiffs seek a preliminary and permanent injunction directing the municipal defendants to provide health insurance benefits to the domestic partners of unmarried school district employees "on the same basis as marital spouses of eligible employees." Plaintiffs also seek compensatory damages, in an amount to be determined by the court, and $ 1,000,000 in punitive damages. Summary of Arguments Plaintiffs allege that the narrow coverage offered by the benefit plan discriminates on the basis of marital status and sexual orientation. By allowing only for benefit extension to legally married spouses and dependents of teachers, the Board of Education has effectively provided increased compensation to married teachers performing the same and comparably valued work. Additionally,domestic partners of unmarried teachers are denied an economic benefit afforded to the spouses of married teachers. The current plan has an overwhelmingly disparate impact on gay and lesbian teachers and their domestic partners who are barred by law from marrying, and, thereby,becoming eligible for coverage under the benefits plan. The conduct of the Board of Education violates specific anti-discrimination statutes, the New York Constitution and the Board of Education's own policy to avoid discrimination based on sexual orientation. Under their Due Process claim, plaintiffs assert that defendants have acted arbitrarily and capriciously in depriving plaintiffs of a valuable property right, in denying their domestic partners from participating in benefits conferred on spouses. Plaintiffs further allege that defendants' conduct has denied them their liberty in being free of discrimination based on their sexual orientation and/or marital status. Plaintiffs assert that the marital status and sexual orientation discrimination manifested in the Board of Education's health insurance plan denies them equal protection under the law as provided in the Equal Protection Clause of the State Constitution. The plaintiffs submit four statutory claims, asserting that the conduct of the defendants discriminates against them on the basis of sexual orientation in direct violation of the Administrative Code of the City of New York @8-108.1 and Executive Order No. 28, prohibiting discrimination in compensation and terms and conditions of employment.Plaintiffs further allege that the defendants' discrimination on the basis of marital status violates Executive Law @296 (Human Rights Law)and Civil Rights Law @40-C. The municipal defendants assert that the Board of Education is not required, as a matter of law, to provide any health insurance coverage, and that the coverage is a term of the collective bargaining agreement with the teachers' and workers' representative union. Once the Board of Education provides a benefits plan to employees, the extended benefits must comply with the limited coverage allowed under the Insurance Law @4235 which specifies that only spouses, dependent children and others chiefly dependent upon the employee for support and maintenance are eligible. The municipal defendants assert that, although the Board of Education's health insurance plan does make a classification on the basis of marital status, it is not violative of either the Equal Protection or Due Process clauses because there is a rational relationship between the classification and the legitimate purpose of the Board of Education. They also assert that the health insurance plan is neutral concerning sexual orientation, and that there is no discernable intent on the part of the defendants to injure gay teachers through the administration of the plan. The municipal defendants maintain that gay teachers are prohibited from marriage,and, thus, ineligible for extended coverage of domestic partners as the result of state legislative acts. The defendants maintain that it would be impossible to extend coverage to domestic partners on the same basis as spouses because marital status is legislatively conferred. Municipal Defendants' Motion to Dismiss The municipal defendants move to dismiss the complaint in its entirety asserting that all six causes of action are defective. In brief, the municipal defendants assert that Administrative Code@8-108.1 does not create a private cause of action which can be asserted in a judicial action; the claim under Section 296 of the Human Rights Law is defective because the challenged policy does not constitute marital status discrimination prohibited by the statute;the claim under Civil Rights Law @40 is defective because the challenged policy does not constitute marital status discrimination and because the relief demanded is not authorized under the statute.The municipal defendants move to dismiss the claim for punitive damages because the conduct alleged is insufficient to warrant such relief. New York courts traditionally have guarded against premature dismissal of a complaint. If [we] find that plaintiff is entitled to a recovery upon any reasonable view of the stated facts [our] judicial inquiry is complete and [we] must declare the plaintiff's complaint legally sufficient,219 Broadway Corp. v. Alexander's Inc., 46 NY 2d 506, 509. It is unnecessary for the court here to determine the validity of the plaintiffs' claims. Rather, the court must determine whether plaintiffs have asserted facts upon which they may recover, Id. The Braschi Decision Any discussion of the constitutional and statutory construction issues has to begin with a look at the impact of the Court of Appeals of the State of New York decision in Braschi v. Stahl Assocs. Co., 74NY2d 201. In that case, the Court changed the way we should look at discrimination in this area and recognized that we, as judges, can no longer afford to view society with blinders. But see, Allison D. v.Virginia M., -- NY2d -- New York Law Journal, May 7, 1991, p. 21, col.3). The Braschi Court enunciated a broad definition of "family", that is set forth in the rent-control laws, to include nontraditional relationships and permitted Braschi to prove that he had lived in such a household. Contrary to all of these arguments, we conclude that the term family, as used in 9 NYCRR 2204.6(d), should not be rigidly restricted to those people who have formalized their relationship by obtaining,for instance, a marriage certificate or an adoption order. The intended protection against sudden eviction should not rest on fictitious legal distinctions or genetic history, but instead should find its foundation in the reality of family life. In the context of eviction, a more realistic, and certainly equally valid, view of a family includes two adult lifetime partners whose relationship is long term and characterized by an emotional and financial commitment and interdependence. This view comports both with our society's traditional concept of "family" and with the expectations of individuals who live in such nuclear units (see also, 829 Seventh Ave.Co. v. Reider, 67 NY2d 930, 931-932 [interpreting 9 NYCRR 2204.6(d)'s additional "living with" requirement to mean living with the named tenant "in a family unit, which in turn connotes an arrangement,whatever its duration, bearing some indicia of permanence or continuity" (emphasis supplied)]). In fact, Webster's Dictionary defines "family" first as "a group of people united by certain convictions or common affiliation" (Webster's Ninth New Collegiate Dictionary 448 [1984]; see, Ballantine's Law Directory 456 [3d ed 1969] ["family" defined as "(p)rimarily, the collective body of persons who live in one house and under one head or management"];Black's Law Dictionary 543 ([Special Deluxe 5th ed 1979]). Hence, it is reasonable to conclude that, in using the term "family," the Legislature intended to extend protection to those who reside in households having all of the normal familiar characteristics.(Braschi v. Stahl Assocs. Co., supra, at 211). Just as the court needed to expand the definition of "family" to accomplish the purpose of the rent control laws -- to protect family units from eviction after the death of the statutory tenant, this court similarly has to look at the public agency's purpose in extending health insurance benefits to an employee's "husband," "wife"and "unmarried children" of certain ages and dependencies. And if, in deciding these motions, this court adhered to the traditional view of "legally married," I would be rejecting "the reality of family life" in this day and age. As Judge Kaye noted in her dissenting opinion in Allison D. v. Virginia M., supra, recently the courts have had to turn to "modern-day realities in giving definition to statutory concepts" such as death (People v. Eulo, 63NY2d 341, 354) and family (Braschi v. Stahl Assocs. Co., supra). With the need to go beyond the labels "spouse," "husband" and"wife", the dismissal motion must fail. Equal Protection and Due Process The municipal defendants argue that the extension of the State's Equal Protection Clause is intended to be congruent with the Fourteenth Amendment of the United States Constitution. Consequently,they contend that the determination by the United States Supreme Court that neither marital status nor sexual orientation are suspect classes for purposes of equal protection means that New York courts should confine the level of scrutiny applied under the State Constitution to a test for rationality or reasonableness of the classification.(Muni. Def. Memo, pp. 19-21). However, the defendants rely upon cases which highlight the federal courts' indecision over whether sexual orientation is a suspect class: Watkins v. United States Army, 837F.2d 1428. See also, Rowland v. Mad River Local School District, 470U.S. 1009: High Tech Gays v. Defense Industrial Security Clearance Office, 668 F. Supp. 1360. While New York courts have not directly held that gays and lesbians are a suspect or quasi-suspect class, recent decisions indicate that this status would not be inappropriate. See, Under 21 et al v. City of New York, 108 AD2d 250, a2 57. Plaintiffs assert that special statutory prohibitions against discrimination based on sexual orientation in the Administrative Code @ 8-108.1 and Executive Order No. 28 indicate that, at a minimum, gay persons are a protected class. Determination of a suspect classification cannot be done as a matter of law. Rather, it must be based on consideration and analysis of the particular facts and circumstances. Plaintiffs are entitled to discovery as to the Board of Education's rationale in excluding coverage for domestic partners, especially in light Braschi, supra. The municipal defendants mistakenly rely on Personnel Administrator of Massachusetts et al. v. Feeney, 442 U.S. 256 (1979) for the proposition that to violate the Equal Protection Clause, a classification must intentionally burden a disadvantaged group. The United States Supreme Court held that awareness or foreseeability of disparate impact upon a disadvantaged group (i.e., women) was insufficient to sustain a violation of equal protection. Plaintiff must show that the purpose of the statute was to burden women, but the Court found that the purpose of the statute was to distinguish between veterans and non-veterans. Id., at 278-279. Because some women were included in the classification of veterans, the purpose could not be construed as intentionally injurious to women. Id., at 279. While the intent of the Board of Education's health insurance plan is to distinguish between married and unmarried teachers and school workers,the marital classification could never include gay persons who are prohibited by law from marriage. Unlike the decision in Personnel Administrator, supra, a trier of fact could infer that the Board of Education intentionally acted to the detriment of gay teachers by providing health insurance policies that provide for extended benefits coverage only to legally married persons. The issue of intent in agreeing to these policies and in the subsequent denial of coverage,thus presents a factual controversy. The municipal defendants maintain that only a rational basis test applies to marital status and sexual orientation discrimination claims. They consistently maintain that the evaluation of a rational basis for legislation and conduct is a legal issue and does not require a factual record for validation. (Muni. Def. Reply, p. 16)Defendants, in fact, maintain that such a determination is at the discretion of the court. In Mahone v. Addicks Utility Dist. of Harris County, 836 F.2d 921, 937, the court found that [a rationality analysis] cannot be conducted in a vacuum . . . the purpose itself must still be found to be legitimate, a determination which may require a reference to the circumstances which surround the state's action . . . Moreover, rationality analysis requires more than just a determination that a legitimate state purpose exists; it also requires that the classification chosen by the state actors be rationally related to that legitimate state purpose. Although the legitimate state purpose. Although the legitimate state purpose can be hypothesized, the rational relationship must be real (cite omitted).Consequently, the determination of a fit between classification and the legitimate purpose -- the search for rationality -- may also require a factual backdrop. In the Mahone case, the court decided that discovery was necessary and so denied the motion for dismissal of the complaint. It is just such a "factual backdrop" that the plaintiffs contend can only be developed during discovery. Many of the reasons stated by the municipal defendants are contradicted by New York case law, government policy and legislation. Indeed, some of the reasons are contradicted by the defendants themselves. (Muni. Def. Memo, p. 23-27; Muni. Def.Reply Memo, p. 77-79). The municipal defendants also argue that administrative convenienceis a legitimate basis for excluding this group from coverage because it is impossible to set standards to determine what constitutes a qualifying domestic partnership. In light of Braschi v. Stahl Assocs.Co., supra, and the Mayor's Executive Order No. 123, this contention has little merit. These defendants also claim they have a legitimate interest in limiting the expense of the health insurance plan because extending benefits to the domestic partners of gay teachers would require extension of benefits to heterosexual domestic partners also,resulting in substantial expense. The defendants cite Shattenkirk v.Finnerty, 97 AD2d 51, 59, in which the court found that restricting salary increases of state employees to conserve limited state financial resources satisfied the rational basis test under the Equal Protection claim. In Brooklyn Union Gas Co. v. New York State Human Rights Appeal Board, 41 NY2d 84, the respondent employer raised the economic impact rationale as a justification for precluding pregnancy from coverage its disability plan. The Court held the eradication of sexual discrimination, as well as impermissible discrimination in other categories, will normally be expensive at least in the short run. We would violate our judicial responsibility, however, were we to accept the proposition . . . that while implementation of the [Human Rights Law] may proceed apace where cost can be said to be acceptable, some erosion of the blanket prohibition must be tolerated where compliance may be expected to work serious economic distress. Id., at 90. At the very least, the Court's discussion requires that this court carefully scrutinize the exact factual nature of the economic justification, perhaps requiring a projection of alleged increased costs. The municipal defendants contend that protection of privacy rights of teachers and school workers is a legitimate basis for exclusion because inclusion of domestic partners in the health insurance plan would require the Board of Education to investigate the nature and conduct of teachers' relationships, as well as their sexual orientation, violating their right to privacy, as well as statutory prohibitions against invasion of privacy. However, this rationale has no factual basis. Because acknowledgement of domestic partnerships would be purely voluntary,there need be no "invasion of privacy." Moreover, if verification were required, a registration procedure such as that set forth in Executive order No. 123 would require no more invasion into a domestic partner's privacy than exists under the current verification procedure for married teachers and workers. Lastly, the municipal defendants claim that married individuals are financially liable for the medical expense of their spouses under the Domestic Relations Law whereas domestic partners are not. However,financial liability appears to be an irrational justification for differentiating between employees in terms of compensation. The standard for review of plaintiffs' claim that they have been denied due process is that the defendants' action must be reasonably related to a legitimate government purpose. See, McMinn v. Town of Oyster Bay, 66 NY2d 544. Plaintiffs must show that defendants' action is arbitrary and capricious and unreasonable beyond a reasonable doubt, that the exclusion from coverage is not reasonably related to the purpose of providing overall health insurance coverage to all teachers and school employees. Because there is no presumption of constitutionality that attaches to the Board of Education's conduct, as in the case of legislative acts (Town of Huntington v. Park Shore Country Day, 7 NY2d 61), the motion to dismiss this claim is premature. Statutory Claims Human Rights Law Plaintiffs have sufficiently alleged a valid private cause of action under the New York City Human Rights Law (Administrative Code@@8-107(1)(a), 8-108). The procedural framework of the Administrative Code @8-107(a) et seq. specifically pertains only to election of remedies and does not preclude plaintiffs from utilizing the judicial forum if they do not file an administrative complaint.(Administrative Code @8-112). Defendants maintain that the Administrative Code's procedure tracks the State Human Rights Law, but, unlike the State provision, (HRL@297.9) does not create a private cause of action. This contention is unfounded because the language in both the State and City provisions does not explicitly confer or prohibit a private cause of action except that Administrative Code @8-112 recognizes that a person may institute an action "without resorting to [this] procedure [but] may not subsequently resort to [this] procedure." Koster v. Chase Manhattan Bank, 6009 F. Sup. 1191, cited by defendants, is inapposite because plaintiff there had already filed a sex discrimination claim with the New York City Commission on Human Rights and then withdrawn it,without waiting for the Commission to act. Defendants reliance upon Bachrach v. 1001 Tenants Corporation, 15NY 2d 718 and Matter of Bronx Eye and Ear Infirmary v. New York City Commission on Human Rights, 55 M2d 22 is also misplaced because Bachrach interprets a different Administrative Code provision, since repealed, prohibiting discrimination in housing accommodations, and the latter decision does not even discuss a private right of action. Executive Order No. 28 In Executive Order No. 28, Governor Cuomo states I am this day reiterating the law set down by the Constitution of the United States and the Constitution of the State of New York as the policy of this Administration. Statement of Policy 1. No State agency or department shall discriminate on the basis of sexual orientation against any individual in the provision of any services or benefits by such State agency or department. 2. All State agencies and departments shall prohibit discrimination based on sexual orientation in any matter pertaining to employment by the State including, but not limited to, hiring, job appointment,promotion, tenure, recruitment and compensation. 9 NYCRR @4.28 All parties acknowledge that this is the first time that a private right of action is alleged under this Executive Order, that the Governor signed on April 21, 1987. Defendants presume that the absence of any decisional law in this State precludes this court from entertaining the cause of action. However, courts in other jurisdictions have held that, where an executive order is based upon a statutory or constitutional provision, an enforceable private cause of action exists. Shapp v. Butera, 348 A2d 910, 913 (Pa. Cmwlth.1 975),Pagano v. Pennsylvania State Horse Racing Commission, 413 A2d 44, 45(Pa.Cmwlth., 1980), aff'd 452 A2d 1015 (Pa. 1982); Stein v. James 651SW 624, 628 (Mo. App. 1983). Because Executive Order No. 28 declares that it merely reiterates the State's policy as "set down by the Constitution . . .", the plaintiffs have a right to predicate a cause of action on the Order's prohibitions. Human Rights Law @296 Defendants contend that certain decisional law supports their position that the Board of Education's policy extending coverage to only married employees is not discriminatory, citing Collazo v. State Division of Human Rights, 61 NY2d 957, Hudson View Properties v.Weiss, 59 NY2d 733, Manhattan Pizza Hut Inc. v. New York State Human Rights Appeal Board, 51 NY2d 506 and Matter of Police Association of the City of Mt. Vernon v. N.Y. State Public Employment Relations Board, 126 AD2d 824. These cases are inapposite, not germane to the issue and do not require dismissal of the complaint at this stage of the proceeding. Further, the precedental value of Hudson View Properties v. Weiss, supra is severely circumscribed by the Court's decision in Braschi v. Stahl Assocs. Co., Inc., supra. The defendants additionally rely on Insurance Law @4235 for the proposition that, as a matter of law, the Board of Education is prohibited from extending coverage to the plaintiffs' domestic partners. Insurance Law @4235 is not restrictive, as defendants claim, but rather permits extension coverage to ". . spouse, child .. ." and others chiefly dependent. This provision is also directed at the issuer and not the employer charged with obtaining coverage. Although defendants submit an opinion letter from the State Department of Insurance, that interpretation is not dispositive of the issues on a motion to dismiss under CPLR 3211(a)(7). Civil Rights Law Claim Plaintiffs claim intentional marital status discrimination under Civil Rights Law @40-C. Defendants correctly point out that the Civil Rights Law has very limited remedies that are contained in Civil Rights Law @40-D and that the plaintiffs have not set these forth in their prayer for relief. Plaintiffs do not address defendants' contentions in their papers. Thus, this cause of action, as asserted now, is dismissed. Claim for Punitive Damages Against Municipal Defendants Plaintiffs cannot claim punitive damages against the municipal defendants because they are immune from punitive damages for acts done in their official capacity. In addition, the complaint does not contain any allegation of malicious, wanton or outrageous conduct by the municipal defendants who are sued in their individual capacities(Sharapata v. Town of Islip, 56 NY2d 332). Thus, that part of the Prayer for Relief seeking punitive damages is stricken. The State Defendants; Cross Motion The cross motion by the State Defendants to dismiss the complaint as to them us granted. Neither the State of New York nor the Governor are necessary or proper parties to this action in order for this court to grant complete relief. Payments by the State for insurance premiums for teachers and supervisors are insufficient to retain the State as a party. The Governor has no authority with respect to the health insurance coverage. He is not charged with any ultra vires act. The Board of Education is primarily responsible for the administration of the City of New York's public school system and, particularly, responsible for group insurance benefits to teachers and their employees. (Ed Law @2590-b, See, Jiggetts v. Grinker, 148 AD2d 1,rev'd on other grounds, 75 NY2d 411, Joanne S. v. Carey, 115 AD2d 4). In addition, the State is immune from suit for monetary relief except in the Court of Claims (Court of Claims Act, @@8, 9), and public funds are not available against the State defendants for payment ofexemplary damages. (Sharnata v. Town if Islip, supra). The foregoing is the decision and order of the court. Copies mailed to counsel before filing. LEVEL 1 - 1 OF 1 CASE Gay Teachers Association v. Board of Education of the City of New York No. M-6078 Supreme Court of New York, Appellate Division, First Department 1992 N.Y. App. Div. LEXIS 1113 January 28, 1992 JUDGES: [*1]Sullivan, J.P., Kupferman, Ross, Kassal, JJ. OPINION: Motion to vacate stay granted unless appeal perfected for April 1992 Term.