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«CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 1 of 63 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Jakob Tiarnan Rumble, Case No. ...»

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Similarly, a plaintiff bringing a Section 1557 age discrimination claim would have to exhaust administrative remedies and would be barred from recovering damages, but plaintiffs bringing Section 1557 race, disability, or sex discrimination claims would not additional health programs; [rather,] it creates a new civil right and remedy while leaving in place Title VI and other existing civil rights laws.” See Sidney D. Watson, Section 1557 of the Affordable Care Act: Civil Rights, Health Reform, Race and Equity, 55 How.

L. J. 855, 870 (2012); Sarah G. Steege, Finding a Cure in the Courts: A Private Right of Action for Disparate Impact in Health Care, 16 Mich. J. Race & L. 439, 456–59 (2011).

The Court agrees with this observation. In fact, Section 1557 expressly states that “[n]othing in this title... shall be construed to invalidate or limit the rights, remedies, procedures, or legal standards available to individuals aggrieved under [any of the four existing civil rights statutes].” See 42 U.S.C. § 18116 (b). Thus, Congress likely intended to create a new right and remedy in a new context without altering existing laws.

CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 23 of 63 have to exhaust administrative remedies and would not be barred from recovering damages. Compare 42 U.S.C. § 2000d-1(1), 20 U.S.C. § 1682 (2006), and 29 U.S.C. § 794 (2006), with 42 U.S.C. § 6104(f); see Gebser v. Lago Vista Indep. Sch. Dist., 524 U.S. 274, 285–90 (1998) (requiring actual knowledge of discrimination for monetary damages in a Title IX case); Franklin v. Gwinnett Cnty. Pub. Sch., 503 U.S. 60, 71–72 (1992) (holding that compensatory damages are available in a Title IX action alleging intentional discrimination); Guardians Ass’n v. Civil Serv. Comm’n of City of New York, 463 U.S. 582, 595–96 (1983) (holding that compensatory relief in a Title VI action is only available upon a showing of intentional discrimination).

Plaintiff recognizes the absurd inconsistency that could result if the Court interpreted Section 1557 as Defendants do. (See Pl.’s Mem. at 22–27 [Doc. No. 25].) Rumble also aptly notes that if different standards were applied based on the protected class status of the Section 1557 plaintiff, then courts would have no guidance about what standard to apply for a Section 1557 plaintiff bringing an intersectional discrimination claim. 7 (See id. at 23.) However, the Court does not intend to imply that Congress meant to create a new Intersectional discrimination claims are based on the intersectionality of at least

two of a plaintiff’s protected class statuses. Professor Cheryl I. Harris explains that:

The particular experience of black women in the dominant cultural ideology of American society can be conceptualized as intersectional.

Intersectionality captures the way in which the particular location of black women in dominant American social relations is unique and in some senses unassimilable into the discursive paradigms of gender and race domination.

See Cheryl I. Harris, Whiteness As Property, 106 Harv. L. Rev. 1709, 1791 (1993) (internal quotation and citation omitted).

CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 24 of 63 anti-discrimination framework that is completely “unbound by the jurisprudence of the four referenced statutes.” (Cf. Def. Fairview’s Reply at 4 [Doc. No. 28].) Nonetheless, given the inconsistency that would result if the Court interpreted Section 1557 as Defendants do, the Court holds that Congress likely referenced the four civil rights statutes mainly in order to identify the “ground[s]” on which discrimination is prohibited – i.e., race, sex, age, and disability. Congress also likely intended that the same standard and burden of proof to apply to a Section 1557 plaintiff, regardless of the plaintiff’s protected class status. To hold otherwise would lead to “patently absurd consequences,” United States v. Brown, 333 U.S. 18, 27 (1948), that “Congress could not possibly have intended,” F.B.I. v. Abramson, 456 U.S. 615, 640 (1982) (O’Connor, J., dissenting). But, as the Court discusses in more detail below, at this stage of the proceedings, it need not determine the precise standard to apply to Plaintiff’s Section 1557 claim.

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Defendant Emergency Physicians claims that Rumble “never alleges facts to show he sought medical care from [Emergency Physicians] pursuant to a [f]ederally funded or administered ‘health program or activity.’” (See Def. Emergency Physicians’ Mem. at 8 [Doc. No. 13].) Defendant misstates the relevant legal standard for determining which entities are covered by Section 1557. According to the ACA, entities that are subject to the anti-discrimination provisions in Section 1557 include “any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance,” or “any program or activity that is administered by an Executive Agency or any entity established under this title (or amendments).” See 42 CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 25 of 63 U.S.C. § 18116 (emphasis added). Thus, as long as part of an organization or entity receives federal funding or subsidies of some sort, the entire organization is subject to the anti-discrimination requirements of Section 1557. A potential plaintiff need not seek medical care specifically from the part of the organization that receives federal funding.

(Cf. Def. Emergency Physicians’ Mem. at 8 [Doc. No. 13]); see Civil Rights Restoration Act, Pub. L. No. 100–259, § 382, 102 Stat. 28, 28–29 (1988) (overturning the United States Supreme Court’s decision in Grove City Coll. v. Bell, 465 U.S. 555, 556 (1984), to clarify that the civil rights laws reached an institution, as a whole, even if only part of the institution received federal funding). Rather, the organization is only required to have a health program or activity that receives federal financial assistance.

Here, Plaintiff alleges that Emergency Physicians is a “Minnesota-based healthcare organization [that] receiv[es] federal and state financial assistance such as credits, subsidies, or contracts of insurance.” (Compl. 10 [Doc. No. 1].) In his brief, Plaintiff argues that because Emergency Physicians allegedly receives Medicare and Medicaid funds, it is “a covered entity” for purposes of Title VI and the Rehabilitation Act, which are referenced by Section 1557. (Pl.’s Mem. at 18 [Doc. No. 25].) “The parties have not cited, and the Court has not found, any cases from the Eighth Circuit dealing with the issue of whether Medicare/Medicaid payments to a hospital are sufficient to create Title VI liability.” Bissada v. Arkansas Children’s Hosp., No.

4:08CV00362 (JLH), 2009 WL 1010869, at *11 (E.D. Ark. Apr. 14, 2009) aff’d, 639 F.3d 825 (8th Cir. 2011); see also Bowen v. Am. Hosp. Ass’n, 476 U.S. 610, 624 n.9 (1986) (declining “to review the [Second Circuit] Court of Appeals’ assumption that the CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 26 of 63 provision of health care to infants in hospitals receiving Medicare or Medicaid payments is a part of a ‘program or activity receiving Federal financial assistance.’”).

Nonetheless, courts outside the Eighth Circuit have resoundingly held that Medicare and Medicaid payments constitute federal financial assistance for, at least, the purposes of section 504 and Title VI. 8 See, e.g., United States v. Baylor Univ. Med. Ctr., 736 F.2d 1039, 1042 (5th Cir. 1984) (holding that “Medicare and Medicaid are federal financial assistance for the purpose of Section 504 [of the Rehabilitation Act], and that the district court did not err in defining inpatient and emergency room services as the ‘program or activity’ that would be the appropriate target of HHS’s investigation as the result of the alleged violation of Section 504.”); NAACP v. Medical Center, Inc., 599 F.2d 1247, 1248 n.4 (3d Cir. 1979), aff’d in relevant part, 453 F. Supp. 280, later proceeding, 453 F. Supp. 330 (D. Del. 1978), (affirming district court’s determination that hospital’s receipt of Medicare, Medicaid, and unspecified “other” assistance triggered Section 504 and Title VI); United States v. University Hosp. of State Univ. of Moreover, courts must generally “accord great weight to the longstanding interpretation placed on a statute by an agency charged with its administration.” NLRB v. Bell Aerospace Co. Div. of Textron Inc., 416 U.S. 267, 275 (1974). “The Department of Health, Education and Welfare (the predecessor to the Department of Health and Human Services) expressly included Medicare and Medicaid as programs covered by Title VI, see 38 Fed. Reg. 17982 (1973); 40 Fed. Reg. 18173 (1975), and HHS’s regulations continue to list these programs among those covered by Title VI.” United States v. Baylor Univ. Med. Ctr., 736 F.2d 1039, 1047 (5th Cir. 1984) (citing 45 C.F.R.

Part 80, Appendix A at Part 1, # 121 and Part 2, # 30). Additionally, “[t]he Department’s regulations implementing Section 504 expressly state that service providers whose only source of federal financial assistance is Medicaid ‘should be regarded as recipients under the statute and the regulation and should be held individually responsible for administering services in a non-discriminatory fashion.’” Baylor, 736 F.2d at 1047 (citing 45 C.F.R. Part 84, App. A, Subpart A(1)).

CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 27 of 63 N.Y. at Stony Brook, 575 F. Supp. 607, 612–13 (E.D.N.Y. 1983), aff’d on other grounds, 729 F.2d 144, 151 (2d Cir. 1984) (holding that legislative history reveals Medicare and Medicaid are “federal financial assistance” for purposes of § 504); United States v.

Cabrini Medical Center, 639 F.2d 908, 910 (2d Cir. 1981) (holding that, under the Rehabilitation Act, Medicare and Medicaid payments constitute “federal financial assistance” if the payments are used for employment purposes); Bob Jones University v.

Johnson, 396 F. Supp. 597, 603 n.21 (D.S.C. 1974), aff’d without opinion, 529 F.2d 514 (4th Cir. 1975) (holding that Medicare and Medicaid constitute federal financial assistance for Title VI purposes). Because Section 1557 relies on and incorporates section 504 and Title VI, the Court finds that Medicare and Medicaid payments received by Emergency Physicians constitute federal financial assistance for the purpose of Section 1557 as well.

In order for the Medicare and Medicaid funds to qualify as “federal financial assistance” relevant for section 504 and Title VI, a civil rights plaintiff is regularly required to demonstrate that the Medicare and Medicaid funds were used for a particular purpose. Specifically, “[a] number of cases have held... that a Title VI plaintiff must show that the received funds were used for employment.” Bissada, 2009 WL 1010869, at *11; see Valentine v. Smith, 654 F.2d 503, 512 (8th Cir. 1981) (dismissing the plaintiff’s Title VI claim because she failed to show that the university defendant used its federal assistance for the purpose of providing faculty employment); see also Mass v. Martin Marietta Corp., 805 F. Supp. 1530, 1542 (D. Colo. 1992) (explaining that a Title VI plaintiff must also demonstrate that the federal government received no goods or services CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 28 of 63 in return for the Medicare or Medicaid payments). Similarly, a section 504 plaintiff must also demonstrate that “a primary objective for the federal funds” must be “to provide for the employment” of staff. See Simon v. St. Louis Cnty., Mo., 656 F.2d 316, 319 (8th Cir.

1981) (holding that because the record demonstrated that “a primary objective for the federal funds going to the St. Louis County Police Department is to provide for the employment of commissioned police officers,” the “district court properly concluded that Simon had standing to bring a suit under section 504.”).

However, a civil rights plaintiff is not required to substantively prove how the funds were used until summary judgment or trial. See Muller v. Hotsy Corp., 917 F.

Supp. 1389, 1418 (N.D. Iowa 1996) (granting summary judgment for the defendant on the plaintiff’s section 504 claim because the plaintiff failed to show that the government’s intention was to subsidize the defendant, as opposed to compensate the defendant for its goods and services); Bissada, 2009 WL 1010869, at *12 (granting summary judgment for the defendant on the plaintiff’s Title VI claim because the plaintiff failed to show that the federal assistance received by the defendant was used directly to provide employment for its physicians); Simon, 656 F.2d at 319 (affirming the district court’s ruling that the section 504 plaintiff met his burden of proof during trial that the federal funds were used for employment purposes). Rather, Rumble must only allege facts that “raise a reasonable expectation that discovery will reveal evidence” that substantiates his claim that Emergency Physicians received federal funds, which were used for employment purposes. See Twombly, 550 U.S. at 556.

In sum, Plaintiff is not required to demonstrate that he sought medical care from CASE 0:14-cv-02037-SRN-FLN Document 31 Filed 03/16/15 Page 29 of 63 Emergency Physicians through one of Defendant’s federally funded or administered health programs or activities. Because Plaintiff alleges that Emergency Physicians receives federal funds and is subject to Section 1557, the Court plausibly assumes that the federal funds were used for employment purposes. As explained above, Rumble could only substantiate his claim further with the benefit of discovery. Accordingly, the Court finds that Defendant Emergency Physicians is subject to the anti-discrimination provisions in Section 1557. 9

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