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Title Ford v. Schering-Plough Corporation

Date 1998

Subject Other\Concurring

Contents

Page 1

23 of 52 DOCUMENTS

COLLEEN V. FORD, Appellant v. SCHERING-PLOUGH CORPORATION; SCHERING CORPORATION; METROPOLITAN LIFE INSURANCE COMPANY

No. 96-5674

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

145 F.3d 601; 1998 U.S. App. LEXIS 10315; 8 Am. Disabilities Cas. (BNA) 190; 22 Employee

Benefits Cas. (BNA) 1866

January 28, 1998, Argued

May 22, 1998, Filed

SUBSEQUENT HISTORY: **1 As Corrected May

27, 1998.

Counsel Corrected June 18, 1998. Certiorari Denied

January 11, 1999, Reported at: 1999 U.S. LEXIS 492. PRIOR HISTORY: On Appeal from the United States District Court for the District of New Jersey. (D.C. No.

96-cv--01991).

DISPOSITION: Affirmed the September 12, 1996, or- der of the district court dismissing Ford's complaint for failure to state a claim.

CASE SUMMARY:

PROCEDURAL POSTURE: Pursuant to Fed. R. Civ. P.

12(b)(6), the United States District Court for the District of New Jersey granted the motion to dismiss filed by defendant employer and defendant insurer in plaintiff claimant's action alleging that the two-year cap applicable to benefits for mental disabilities, but not for physical dis- abilities, violated the Americans with Disabilities Act of

1990, 42 U.S.C.S. § 12101 et seq. The claimant appealed. OVERVIEW: Plaintiff claimant sued defendants, em- ployer and insurer, and claimed that the disparity be- tween disability benefits for mental and physical disabili- ties violated the Americans with Disabilities Act (ADA),

42 U.S.C.S. § 12101 et seq. Pursuant to Fed. R. Civ. P.

12(b)(6), the district court granted the motion to dismiss filed defendants. Plaintiff appealed. On appeal, the court held that, under 42 U.S.C.S. § 12111(8) of the ADA, plain- tiff, who was unable to work even with a reasonable ac- commodation, was a qualified individual with a disability and was eligible to sue. Plaintiff, however, failed to state a claim that survived the motion to dismiss. Regarding her claim under Title I of the ADA, the ADA did not require

equal coverage for every type of disability. The term "sub- terfuge," as used in 42 U.S.C.S. § 12201(c) of the ADA, did not require the insurer to justify its policy coverage after plaintiff's mere prima facie allegation. Regarding plaintiff's claim under Title III of the ADA, employment terms and conditions were not covered in Title III of the ADA, and the challenged disability benefits did not qual- ify as a public accommodation for purposes of Title III of the ADA.

OUTCOME: The court affirmed the district court's order dismissing plaintiff claimant's discrimination suit against defendants, employer and insurer.

LexisNexis(R) Headnotes

Civil Procedure > Pleading & Practice > Defenses, Objections & Demurrers > Failure to State a Cause of Action

Civil Procedure > Appeals > Standards of Review > Standards Generally

HN1 When considering a Fed. R. Civ. P. 12(b)(6) mo- tion, the appellate court accepts as true all the allegations set forth in the complaint, and it must draw all reasonable inferences in the plaintiff's favor. Dismissal of a plain- tiff's claim under Fed. R. Civ. P. 12(b)(6) occurs only if the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.

Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN2 See the American with Disabilities Act, 42

U.S.C.S. §§ 12112(a)-(b).

Labor & Employment Law > Discrimination > Disability Discrimination > Qualified Individuals With a Disability Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN3 Title I of the Americans with Disabilities Act,

145 F.3d 601, *; 1998 U.S. App. LEXIS 10315, **1;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 2

42 U.S.C.S. § 12111(8), restricts the ability to sue under its provisions to a qualified individual with a disability, whose characteristics are defined as follows: The term

"qualified individual with a disability" means an indi- vidual with a disability who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires. For the purposes of that subchapter, considera- tion shall be given to the employer's judgment as to what functions of a job are essential, and if an employer has prepared a written description before advertising or inter- viewing applicants for the job, that description shall be considered evidence of the essential functions of the job. Labor & Employment Law > Discrimination > Disability Discrimination > Qualified Individuals With a Disability Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN4 An individual eligible to sue under Title I of the Americans with Disabilities Act, 42 U.S.C.S. § 12111(8), must be disabled but still able to perform his or her job duties with or without a reasonable accommodation by the employer.

Labor & Employment Law > Discrimination > Disability Discrimination > Coverage & Definitions Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN5 Title I of the Americans with Disabilities Act,

42 U.S.C.S. § 12112(a), prohibits discrimination by em- ployers regarding the terms, conditions, and privileges of employment, including fringe benefits such as disability benefits.

Governments > Legislation > Interpretation

HN6 The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.

Labor & Employment Law > Discrimination > Disability Discrimination > Coverage & Definitions Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN7 Title I of the Americans with Disabilities Act

(ADA), 42 U.S.C.S. § 12111(8) allows disabled former employees to sue their former employers regarding their disability benefits so as to effectuate the full panoply of rights guaranteed by the ADA.

Labor & Employment Law > Discrimination > Disability Discrimination > Coverage & Definitions Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN8 So long as every employee is offered the same plan regardless of that employee's contemporary or future dis-

ability status, then no discrimination has occurred even if the plan offers different coverage for various disabilities. The Americans with Disabilities Act, 42 U.S.C.S. § 12101 et seq., does not require equal coverage for every type of disability.

Labor & Employment Law > Discrimination > Disability

Discrimination > Other Laws

HN9 There is nothing in the Rehabilitation Act of 1973,

29 U.S.C.S. § 794, that requires that any benefit extended to one category of handicapped persons also be extended to all other categories of handicapped persons.

Labor & Employment Law > Discrimination > Disability

Discrimination > Other Laws

HN10 A state's medical assistance statute need not treat every disability equally.

Labor & Employment Law > Discrimination > Disability

Discrimination > Other Laws

HN11 Insurance distinctions that apply equally to all insured employees, that is, to individuals with disabilities and to those who are not disabled, do not discriminate on the basis of disability.

Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN12 See the Americans with Disabilities Act, 42

U.S.C.S. § 12201(c).

Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN13 The term "subterfuge," as used in the American with Disabilities Act, 42 U.S.C.S. § 12201(c), does not re- quire an insurance company to justify its policy coverage after a plaintiff's mere prima facie allegation.

Insurance Law > Regulation of Insurance > Limitations on Federal Regulation

HN14 Pursuant to the McCarran-Ferguson Act (Act),

15 U.S.C.S. § 1012(b), no Act of Congress shall be con- strued to invalidate, impair, or supersede any law enacted by any state for the purpose of regulating the business of insurance unless such Act specifically relates to the business of insurance.

Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN15 Title III of the American with Disabilities Act,

42 U.S.C.S. § 12182(a), reads in part that no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases, or leases to, or operates a place of public accommodation.

Constitutional Law > Civil Rights Enforcement >

145 F.3d 601, *; 1998 U.S. App. LEXIS 10315, **1;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 3

Americans With Disabilities Act > Accommodation Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN16 The plain meaning of Title III of the American with Disabilities Act, 42 U.S.C.S. § 12101 et seq., is that a public accommodation is a place, leading to the conclusion that it is all of the services which the public accommodation offers, not all services which the lessor of the public accommodation offers, which fall within the scope of Title III.

Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN17 See the American with Disabilities Act, 42

U.S.C.S. § 12181(7).

Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN18 Title II of the American with Disabilities Act, 42

U.S.C.S. § 2000a(a), proscribes racial and religious dis- crimination in the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation.

Constitutional Law > Civil Rights Enforcement > Americans With Disabilities Act > Coverage

HN19 The term "public accommodation" or the terms in Title III of the Americans with Disabilities Act, 42

U.S.C.S. § 12181(7), do not refer to non-physical access or are they ambiguous as to their meaning.

COUNSEL: Maureen S. Binetti, Esq. (Argued), Wilentz, Goldman & Spitzer, 90 Woodbridge Center Drive, P.O. Box 10, Woodbridge, NJ 07095, Counsel for Appellant Colleen V. Ford.

Robert J. Gregory, Esq. (Argued), Room 7032, Equal Employment Opportunity Commission, 1801 L Street, N.W., Washington, DC 20507, Counsel for Amicus- Appellant Equal Employment Opportunity Commission.

Corrie L. Fischel, Esq., McGuiness & Williams,

1015 15th Street, N.W., Suite 1200, Washington, DC

20005, Counsel for Amicus-Appellee Equal Employment

Advisory Council.

Patricia A. Dunn, Esq., Jones, Day, Reavis & Pogue,

1450 G Street, N.W., Suite 700, Washington, DC 20005-

2088, Counsel for Amicus-Appellee American Council

Life Insurance.

Ronald S. Cooper, Esq., Steptoe & Johnson, 1330

Connecticut Avenue, N.W., Washington, DC 20036, Counsel for Amicus-Appellee Association of Private Pension And Welfare Plans Blue Cross and Blue Shield

Association.

Thomas F. Campion, Esq. (Argued), **2 John D. Clemen, Shanley & Fisher, 131 Madison Avenue, Morristown, NJ 07962-1979, Counsel for Appellee Schering Plough Corporation.

Allen I. Fagin, Aaron J. Schindel, Ronald S. Rauchberg, Proskauer, Rose, Goetz & Mendelsohn, 1585 Broadway, New York, NY 10036.

Allan M. Marcus, Esq. (Argued), Metropolitan Life Insurance Company, Law Department, One Madison Avenue, New York, NY 10010-3690. Sondra M. Hirsch, Esq., Metropolitan Life Insurance Company, One Meadowlands Plaza, 1st Floor, East Rutherford, NJ

07073, Counsel for Appellee Metropolitan Life Insurance

Company.

JUDGES: BEFORE: MANSMANN, COWEN and ALITO, Circuit Judges. ALITO, Circuit Judge, concur- ring in the judgment.

OPINIONBY: COWEN

OPINION:

*603 OPINION OF THE COURT

COWEN, Circuit Judge.

This appeal presents the purely legal question of whether a disparity between disability benefits for men- tal and physical disabilities violates the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. § 12101 et seq. (1994). The plaintiff-appellant, Colleen Ford, sued her employer, Schering-Plough Corporation (Schering), and the carrier of Schering's group insurance policy, Metropolitan Life Insurance Company (MetLife), alleg- ing **3 that the two-year cap applicable to benefits for mental disabilities, but not for physical disabilities, violates the ADA. On September 12, 1996, the District Court for the District of New Jersey granted the defen- dants' motion to dismiss Ford's complaint under Federal Rule of Civil Procedure 12(b)(6). Ford appealed. We will affirm the order of the district court dismissing Ford's complaint even though we differ with the district court by finding Ford eligible to file suit under Title I of the ADA.

The facts concerning the plaintiff's employment and her disability are not in dispute. Ford was an employee of Schering from 1975 until May of 1992, when she be- came disabled by virtue of a mental disorder and was unable to continue her employment. While she served as

145 F.3d 601, *603; 1998 U.S. App. LEXIS 10315, **3;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 4

an employee, Ford enrolled in the employee welfare ben- efits plan offered by Schering through MetLife. The plan

provided

145 F.3d 601, *604; 1998 U.S. App. LEXIS 10315, **3;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 5

*604 that benefits for physical disabilities would con- tinue until the disabled employee reached age sixty-five so long as the physical disability persisted. Regarding mental disabilities, however, the plan mandated that ben- efits cease after two years if the disabled employee was not hospitalized. Ford found **4 herself in this latter cate- gory, suffering from a mental disorder yet not hospitalized and thus ineligible for a continuation of her benefits past the two-year limit. Her benefits expired on Nov. 23, 1994. Ford filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). The EEOC issued her a "right-to--sue" letter on January 31,

1996. Subsequently, Ford filed a three-count complaint against Schering and MetLife alleging discrimination in violation of the ADA. The defendants filed motions to dismiss the complaint pursuant to Rule 12(b)(6) and, in the alternative, for summary judgment. The district court granted the defendants' Rule 12(b)(6) motion, dismiss- ing the complaint for failure to state a claim. This appeal followed.

II.

We have jurisdiction under 28 U.S.C. § 1291 (1994), and our review over the district court's order is plenary.

HN1 When considering a Rule 12(b)(6) motion, we ac- cept as true all the allegations set forth in the complaint, and we must draw all reasonable inferences in the plain- tiff's favor. See Schrob v. Catterson, 948 F.2d 1402, 1405

(3d Cir. 1991). Dismissal of a plaintiff's claim under Rule

12(b)(6) occurs only if the plaintiff **5 "can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78

S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957).

III.

Because the facts of this case are not in dispute, our analysis focuses on the legal question of whether the dis- parity between mental and physical disability benefits vi- olates the ADA and, as a preliminary issue, whether Ford is even eligible to sue under the ADA. We will address Ford's claims under Titles I and III seriatim.

Ford's first claim alleges that the defendants' group insurance plan violates Title I of the ADA because of the disparity in benefits between mental and physical dis- abilities. Title I of the ADA proscribes discrimination in

the terms and conditions of employment and mandates in relevant part:

(a) General rule

No covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, ad- vancement, or discharge of employees, em- ployee compensation, job training, and other terms, conditions, and privileges of employ- ment.

(b) Construction

As used in subsection **6 (a) of this sec- tion, the term "discriminate" includes--

. . . .

(2) participating in a contractual or other ar- rangement or relationship that has the effect of subjecting a covered entity's qualified ap- plicant or employee with a disability to the discrimination prohibited by this subchap- ter (such relationship includes a relationship with . . . an organization providing fringe ben- efits to an employee of the covered entity )

. . . .

HN2 42 U.S.C. § 12112(a)-(b) (emphasis added). As the plaintiff correctly observes, the defendants' group insur- ance plan is a fringe benefit of employment at Schering. Ford claims that the defendants violated Title I of the ADA because the mental-physical disparity constitutes discrimination against her on the basis of her disability.

Before addressing the merits of Ford's Title I claim, we must first ascertain whether Ford is eligible to file suit under Title I. While the district court held that Ford lacked

"standing , " Dist. Ct. Op. at 7, the question of standing is not at issue in this case. Indeed, Ford has been "injured in fact" by the denial of her benefits, which is "an injury to herself that is likely to be

145 F.3d 601, *605; 1998 U.S. App. LEXIS 10315, **6;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 6

*605 redressed **7 by a favorable decision." Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 38, 96

S. Ct. 1917, 1924, 48 L. Ed. 2d 450 (1976). Furthermore, Ford's interest is arguably within the zone of interests reg- ulated by the ADA. See id. at 39 n.19, 96 S. Ct. at 1925 n.19. Instead of ascertaining Ford's standing, we must as- sess Ford's eligibility under the ADA's requirements to file suit.

HN3 Title I of the ADA restricts the ability to sue under its provisions to a "qualified individual with a dis- ability , " whose characteristics are defined as follows:

The term "qualified individual with a dis- ability" means an individual with a disability who, with or without reasonable accommo- dation, can perform the essential functions of the employment position that such individual holds or desires. For the purposes of this sub- chapter, consideration shall be given to the employer's judgment as to what functions of a job are essential, and if an employer has prepared a written description before adver- tising or interviewing applicants for the job, this description shall be considered evidence of the essential functions of the job.

42 U.S.C. § 12111(8). Thus, HN4 an individual eligible

**8 to sue under Title I of the ADA must be disabled but still able to perform his or her job duties with or with- out a reasonable accommodation by the employer. Ford, however, admits that she is currently unable to work even with a reasonable accommodation. Indeed, her disabled status is the reason for her desire to receive the disability benefits at issue here.

The defendants-appellees argue that Ford is clearly ineligible to sue under Title I of the ADA because she is currently disabled, and they point to our recent statement that "a person unable to work is not intended to be, and is not, covered by the ADA." McNemar v. Disney Store, Inc., 91 F.3d 610, 618 (3d Cir. 1996), cert. denied, U.S.

, 136 L. Ed. 2d 845, 117 S. Ct. 958 (1997). McNemar focused on whether an individual is judicially estopped from claiming to be a "qualified individual with a dis- ability" when he represented to governmental agencies

that he was completely disabled. In McNemar, an HIV- positive man represented to government agencies that he was completely disabled for the purpose of receiving dis- ability benefits. At the same time, he asserted that he was a "qualified individual with a disability , " meaning

**9 that he could work with or without a reasonable accommodation, in his suit against his former employer under the ADA for wrongful discharge. As a result, we concluded that the district court was within its discretion in finding that McNemar's representations to government agencies estopped him from claiming that he was a "qual- ified individual with a disability" under Title I. See 91

F.3d at 617-18.

At first glance, McNemar seems to cover the instant case since Ford has asserted she is completely disabled for purposes of disability benefits yet is now asserting she is a "qualified individual with a disability" for purposes of her ADA suit. However, despite its apparent relevance, McNemar is distinguishable. In McNemar, the plaintiff's situation vis-a--vis the ADA did not give rise to the possi- bility that, for reasons intrinsic to the ADA, there was an ambiguity in the definition of "qualified individual with a disability . " The essence of McNemar's suit was that he could still work despite his disability (meaning that he was wrongfully discharged), yet he simultaneously received benefits for being unable to work due to his dis- ability. McNemar's situation did not **10 unearth an internal contradiction in the ADA; instead, the contra- diction in McNemar's position arose between McNemar's various representations, namely his claim of wrongful discharge and his assertion to government agencies that he was completely disabled.

In the instant case, Ford is also attempting to qualify under Title I's eligibility requirement, but the factual pred- icate of her claim (that she is disabled and deserving of disability benefits) matches the representation she made to qualify for the benefits she already received. Unlike the McNemar plaintiff, Ford illuminates an internal con- tradiction in the ADA itself, namely the disjunction be- tween the ADA's definition of "qualified individual with a disability" and the rights that the ADA confers. HN5 Title I of the ADA prohibits discrimination by employ- ers regarding the "terms, conditions, and privileges" of employment,

145 F.3d 601, *606; 1998 U.S. App. LEXIS 10315, **10;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 7

*606 42 U.S.C. § 12112(a), including "fringe benefits" such as disability benefits. Id. § 12112(b)(2). Yet, as Ford and the EEOC as amicus argue, restricting eligibility to sue under Title I to individuals who can currently work with or without a reasonable accommodation prevents disabled former **11 employees from suing regarding discrimination in disability benefits. Once an individual becomes disabled and thus eligible for disability bene- fits, that individual loses the ability to sue under a strict reading of Title I's definition of "qualified individual with a disability" because that individual can no longer work with or without a reasonable accommodation. In order for the rights guaranteed by Title I to be fully effectuated, the definition of "qualified individual with a disability" would have to permit suits under Title I by more than just individuals who are currently able to work with or without reasonable accommodations.

This disjunction between the explicit rights created by Title I of the ADA and the ostensible eligibility standards for filing suit under Title I causes us to view the con- tents of those requirements as ambiguous rather than as having an unassailable plain meaning. " HN6 The plain- ness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Robinson v. Shell Oil Co., 519 U.S.

337, , 117 S. Ct. 843, 846, 136 L. Ed. 2d 808 (1997)

(citing **12 Estate of Cowart v. Nicklos Drilling Co.,

505 U.S. 469, 477, 112 S. Ct. 2589, 2594-95, 120 L. Ed.

2d 379 (1992), and McCarthy v. Bronson, 500 U.S. 136,

139, 111 S. Ct. 1737, 1740, 114 L. Ed. 2d 194 (1991)). The locus of the ambiguity is whether the ADA contains a temporal qualifier of the term "qualified individual with a disability . " If the putative plaintiff must, at the time of the suit, be employable with or without a reasonable ac- commodation, then a disabled former employee loses his ability to sue to challenge discriminatory disability ben- efits. Alternatively, the term "qualified individual with a disability" may include former employees who were once employed with or without reasonable accommodations yet who, at the time of suit, are completely disabled.

The Supreme Court's recent decision in Robinson, which concerned the scope of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1994), contributes to this ambiguity by lending support for interpreting Title I of the ADA to permit suits by disabled individuals against their former employers concerning their disability bene- fits. Cases interpreting Title VII are relevant to our analy- sis **13 of the ADA because the ADA is essentially a sibling statute of Title VII. Indeed, the ADA's accompa- nying House report states that the purpose of the ADA is

"to provide civil rights protections for persons with dis- abilities that are parallel to those available to minorities and women." H.R. Rep. No. 101-485, pt. 3, at 48 (1990), reprinted in 1990 U.S.C.C.A.N. 267, 471. Furthermore, the ADA incorporates by reference several terms defined in Title VII. See 42 U.S.C. § 12111(7) (incorporating Title VII's definitions of "person", "labor organization", etc.). In Robinson, the Supreme Court analyzed whether former employees are allowed to bring suits against their previous employers under Title VII for post-termination retaliation such as negative job references. The Court found that the term "employees" as used in § 704(a) of Title VII was ambiguous regarding its temporal reach, i.e., whether it covered only current employees or encom- passed former employees as well. See 519 U.S. at , 117

S. Ct. 843 at 846-48. Resolving this ambiguity, the Court held that the term encompassed former employees in or- der to provide former employees with a legal recourse against post-termination **14 retaliation. See id. at ,

117 S. Ct. at 848-49; see also Charlton v. Paramus Bd. of Educ., 25 F.3d 194, 200 (3d Cir. 1994) (former employee may file a retaliation claim against a former employer under Title VII).

As with the term "employees" in Title VII, the ADA contains an ambiguity concerning the definition of "qual- ified individual with a disability" because there is no tem- poral qualifier for that definition. Congress could have restricted the eligibility for plaintiffs under the ADA to current employees or could have explicitly broadened the eligibility

145 F.3d 601, *607; 1998 U.S. App. LEXIS 10315, **14;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 8

*607 to include former employees. Since Congress did neither but still created rights regarding disability bene- fits, we are left with an ambiguity in the text of the statute regarding eligibility to sue under Title I.

We resolve this ambiguity by interpreting HN7 Title I of the ADA to allow disabled former employees to sue their former employers regarding their disability benefits so as to effectuate the full panoply of rights guaranteed by the ADA. This is in keeping with the ADA's rationale, namely "to provide a clear and comprehensive national mandate for the elimination of discrimination against in- dividuals with **15 disabilities . . . and to provide clear, strong, consistent, enforceable standards address- ing such discrimination . . . ." 42 U.S.C. § 12101(b)(1)-

(2) (emphasis added). Our decision is also in keeping with the Supreme Court's Robinson decision, which found that the temporal reach of Title VII encompasses former em- ployees, and our pre-Robinson decision to that effect in Charlton, 25 F.3d at 200.

By adopting this interpretation, we part ways with the Seventh and Eleventh Circuits, both of which tendered decisions prior to Robinson. n1 In EEOC v. CNA Ins. Companies, 96 F.3d 1039 (7th Cir. 1996), the Seventh Circuit rejected the suit of an individual in a position similar to Ford's. Litigating on behalf of the former em- ployee, the EEOC argued that the individual was eligi- ble to sue under Title I by arguing that an analogy may be drawn to decisions allowing former employees to sue employers for retaliation under Title VII. The Seventh Circuit rejected this argument by noting that no discrim- ination against the plaintiff occurred during her employ- ment, while, in the Title VII retaliation situation, actual harm occurred by virtue of the retaliation. As the **16 Seventh Circuit wrote, "Nothing happened that discrim- inated against her during the time she was working at CNA. The only thing that occurred was CNA's 1985 de- cision to reduce the long-term benefits available to all of its employees for mental health problems." Id. at 1045. However, the Seventh Circuit's brief analysis conflates two issues, the first being whether the individual could sue regarding fringe benefits while completely disabled, and the second being whether the individual's suit had merit and was based upon actual discrimination. The Seventh Circuit essentially declined to find the individual eligi- ble to sue because her suit lacked merit. Therefore, we do not find the Seventh Circuit's reasoning persuasive re-

garding whether Ford is eligible to sue in the instant case as opposed to whether her suit has merit. n2

n1 The Sixth Circuit in Parker v. Metropolitan Life Ins. Co., 99 F.3d 181 (6th Cir. 1996), analyzed whether a plaintiff was eligible to sue under Title I. However, that decision was vacated by the grant- ing of the plaintiff's petition for rehearing en banc. See 6th Cir. R. 14(a). The en banc decision did not address the Title I issue because it was not raised by the plaintiff's petition for rehearing en banc. See Parker v. Metropolitan Life Ins. Co., 121 F.3d 1006,

1009 n.2 (6th Cir. 1997) (en banc), cert. denied,

U.S. , 118 S. Ct. 871, 139 L. Ed. 2d 768 (1998).

**17

n2 The EEOC also argued in CNA that the dis- abled person was in the "employment position" of

"disability benefit recipient." Id. at 1043 (internal quotation marks omitted). According to the Seventh Circuit, the EEOC claimed that, "because CNA im- poses no job-related duties on any of the beneficia- ries of its long-term disability plan, the plaintiff by definition can perform the essential functions of her position: there are none . . . ." Id. at 1043-

44. The Seventh Circuit rejected that argument be- cause, in its words, "an 'employment position' is a job , " id. at 1044, meaning that receiving disability benefits did not qualify as an employment position. However, Ford does not offer this argument in the instant litigation.

We also disagree with the Eleventh Circuit's ruling in Gonzales v. Garner Food Services, Inc., 89 F.3d 1523

(11th Cir. 1996). In Gonzales, as in the instant case, a dis- abled former employee sued his former employer under the ADA regarding alleged discrimination in disability benefits. The Eleventh Circuit recognized the possible analogy between the **18 Title VII retaliation context and the ADA situation, but it refused to adopt this analogy and to grant the plaintiff permission to sue. Instead, the Eleventh Circuit argued that, "absent clearly expressed legislative intent to the contrary, the plain language of the statute should be conclusive." Id. at 1528. The Eleventh Circuit concentrated on what it believed to be the plain meaning of the ADA,

145 F.3d 601, *608; 1998 U.S. App. LEXIS 10315, **18;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 9

*608 that only currently employable individuals could sue. However, it failed to address the possibility that the disparity between the rights created by the ADA and the apparent legal remedy fashioned by the ADA creates an ambiguity in the eligibility requirements for obtaining a remedy.

In sum, we respectfully disagree with the district court and sister courts of appeals. We find that Title I of the ADA does permit disabled individuals to sue their former em- ployers regarding their disability benefits. We reach this conclusion because the ADA's proscription of discrimina- tion in fringe benefits generates the need for disabled indi- viduals to have legal recourse against such discrimination and exposes the temporal ambiguity in the ADA's defi- nition of "qualified individual with a disability . " **19 We resolve this ambiguity in favor of a broad tempo- ral interpretation of "qualified individual with a disabil- ity , " that disabled former employees, no longer able to work with or without reasonable accommodations, can sue their former employers concerning alleged discrimi- nation in their package of disability benefits. Our impetus for this conclusion also comes from the Supreme Court's Robinson decision allowing former employees to sue un- der Title VII of the Civil Rights Act of 1964.

ii.

Having established Ford's eligibility to sue under Title I, we must now ascertain whether she states a claim that survives the defendants' Rule 12(b)(6) motion. Ford es- sentially claims that the disparity between benefits for mental and physical disabilities violates Title I of the ADA. However, Ford's argument does not support a find- ing of discrimination under Title I.

While the defendants' insurance plan differentiated between types of disabilities, this is a far cry from a specific disabled employee facing differential treatment due to her disability. Every Schering employee had the opportunity to join the same plan with the same sched- ule of coverage, meaning that every Schering employee

**20 received equal treatment. HN8 So long as every employee is offered the same plan regardless of that em- ployee's contemporary or future disability status, then no

discrimination has occurred even if the plan offers differ- ent coverage for various disabilities. The ADA does not require equal coverage for every type of disability; such a requirement, if it existed, would destabilize the insurance industry in a manner definitely not intended by Congress when passing the ADA.

This analysis is supported by Supreme Court and Third Circuit precedent concerning the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1994), to which we may look for guidance in interpreting the ADA. See Gaul v. Lucent Technologies, Inc., 134 F.3d 576, 580 (3d Cir. 1998). In Alexander v. Choate, 469 U.S. 287, 105 S. Ct. 712, 83

L. Ed. 2d 661 (1985), plaintiffs sued in response to the Tennessee Medicaid program's reduction in the number of inpatient hospital days for which it would pay. The plaintiffs claimed that the reduction would have a dispro- portionate effect on handicapped individuals since they would require longer inpatient care than non-handicapped individuals. However, the Supreme Court held that the limit **21 on inpatient hospital care was "neutral on its face " and did not "distinguish between those whose coverage will be reduced and those whose coverage will not on the basis of any test, judgment, or trait that the handicapped as a class are less capable of meeting or less likely of having." Id. at 302, 105 S. Ct. at 720-21. According to the Supreme Court, handicapped citizens did not suffer from discrimination because both handi- capped and non-handicapped individuals were "subject to the same durational limitation." Id. at 302, 105 S. Ct. at 721.

Building on Alexander, the Supreme Court in Traynor v. Turnage, 485 U.S. 535, 108 S. Ct. 1372, 99 L. Ed. 2d 618

(1988), dismissed a challenge to a federal statute preclud- ing the Veterans Administration from granting extensions to a ten-year delimiting period for veterans to claim their benefits if the veterans' disabilities arose from their own willful misconduct, defined by regulations as including alcoholism. The Supreme Court rejected the argument that the statute discriminated against one type of disabil- ity, namely alcoholism. " HN9 There is nothing in the Rehabilitation

145 F.3d 601, *609; 1998 U.S. App. LEXIS 10315, **21;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 10

*609 Act that requires that any benefit extended to one

**22 category of handicapped persons also be extended to all other categories of handicapped persons." Id. at 549,

108 S. Ct. at 1382.

We have likewise held, in the context of the Rehabilitation Act, that HN10 a state's medical assis- tance statute need not treat every disability equally. In Doe v. Colautti, 592 F.2d 704 (3d Cir. 1979), we dis- missed a challenge to a Pennsylvania statute that pro- vided unlimited hospitalization for physical illness in a private hospital but restricted hospitalization for mental illness in private mental hospitals. We rejected the ar- gument that the differential level of benefits violated the Rehabilitation Act by noting that, "in the treatment of their physical illnesses, the mentally ill receive the same bene- fits as everyone else. A mental patient with heart disease, for instance, is as entitled to benefits for treatment of the heart disease as would be a person not mentally ill." Id. at

708. Our holding in Doe is supported by the D.C. Circuit's decision in Modderno v. King, 317 U.S. App. D.C. 255, 82

F.3d 1059 (D.C. Cir. 1996), cert. denied, U.S. , 136

L. Ed. 2d 717, 117 S. Ct. 772 (1997), in which the D.C. Circuit rejected a challenge brought by **23 a former spouse of a foreign service officer against the Foreign Service Benefit Plan under the Rehabilitation Act based upon the plan's lower level of benefits for mental illness as compared to physical illness.

Aside from Supreme Court and Third Circuit prece- dent in the Rehabilitation Act context, claims under the ADA similar to Ford's have been rejected by three courts of appeals in published opinions. While we disagree with the Seventh Circuit's reasoning in CNA regarding the plaintiff's eligibility to sue, we agree with its discussion regarding the merits of the plaintiff's claim. In rejecting the plaintiff's challenge to the disparity between bene- fits for mental and physical illnesses, the Seventh Circuit stated:

One of those terms, conditions, or privileges of employment may be a pension plan, but there is no claim here that CNA discrimi- nated on the basis of disability in offering its pension plan to anyone. It did not charge higher prices to disabled people, on the the- ory that they might require more in benefits. Nor did it vary the terms of its plan depend- ing on whether or not the employee was dis-

abled. All employees--the perfectly healthy, the physically disabled, **24 and the men- tally disabled--had a plan that promised them long-term benefits from the onset of disabil- ity until age 65 if their problem was physical, and long-term benefits for two years if the problem was mental or nervous. . . .

The plaintiff raises a different kind of dis- crimination claim, more grist for the ERISA mill or the national health care debate than for the ADA. She claims that the plan discrim- inates against employees who in the future will become disabled due to mental condi- tions rather than physical conditions; their present dollars (unbeknownst to them) are buying only 24 months of benefits, instead of benefits lasting much longer. However this is dressed up, it is really a claim that benefit plans themselves may not treat men- tal health conditions less favorably than they treat physical health conditions. Without far stronger language in the ADA supporting this result, we are loath to read into it a rule that has been the subject of vigorous, sometimes contentious, national debate for the last sev- eral years. Few, if any, mental health advo- cates have thought that the result they would like to see has been there all along in the ADA.

CNA, 96 F.3d **25 at 1044 (citations omitted). Likewise, in Krauel v. Iowa Methodist Med. Ctr., 95 F.3d

674 (8th Cir. 1996), the Eighth Circuit rejected a challenge under the ADA to an insurance plan that denied cover- age for infertility. Analogizing the infertility exclusion to differential benefits for mental and physical illnesses, the Eighth Circuit stated, " HN11 Insurance distinctions that apply equally to all insured employees, that is, to individ- uals with disabilities and to those who are not disabled, do not discriminate on the basis of disability." Id. at 678. Finally, the Sixth Circuit in Parker rejected a claim sim- ilar to Ford's made against the same defendants as in the instant case. As the Sixth Circuit held, "Because all the employees at Schering-Plough, whether disabled or not, received the same access to the long-term disability plan, neither the defendants nor the

145 F.3d 601, *610; 1998 U.S. App. LEXIS 10315, **25;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 11

*610 plan discriminated between the disabled and the able bodied." 121 F.3d at 1015-16; cf . Brennen v. Comptroller of the State of N.Y., 100 F.3d 942, 1996 WL

19057 (2d Cir. 1996) (unpublished table decision) (bene- fits extended to one category of disabled persons need not be extended to all other categories). **26

The cases finding no violation of the ADA by a dispar- ity in benefits between mental and physical disabilities are supported by the ADA's legislative history. As the Senate Labor and Human Resources Committee report states:

In addition, employers may not deny health insurance coverage completely to an individ- ual based on the person's diagnosis or disabil- ity. For example, while it is permissible for an employer to offer insurance policies that limit coverage for certain procedures or treat- ments, e.g., only a specified amount per year for mental health coverage, a person who has a mental health condition may not be denied coverage for other conditions such as for a broken leg or for heart surgery because of the existence of the mental health condition. A limitation may be placed on reimbursements for a procedure or the types of drugs or proce- dures covered , e.g., a limit on the number of x-rays or non-coverage of experimental drugs or procedures; but, that limitation must apply to persons with or without disabilities. All people with disabilities must have equal access to the health insurance coverage that is provided by the employer to all employees.

S. Rep. No. **27 101-116, at 29 (1989).

In addition, legislative history subsequent to the ADA's passage evinces that Congress did not believe that the ADA mandated parity between mental and phys- ical disability benefits. In 1996, the Senate defeated an amendment to the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110

Stat. 1936 (1996) (codified primarily in Titles 18, 26 and

42 of the U.S. Code), which would have mandated parity in insurance coverage for mental and physical illnesses. Such an amendment would have been unnecessary alto- gether if the ADA already required such parity. See 142

Cong. Rec. S9477-02 (daily ed. Aug. 2, 1996) (state- ment of Sen. Heflin); see also CNA, 96 F.3d at 1044.

Furthermore, Congress then passed the Mental Health

Parity Act of 1996, Pub. L. No. 104-204, Title VII, 110

Stat. 2944 (1996) (codified at 29 U.S.C. § 1185a and

42 U.S.C. § 300gg-5), which mandates, inter alia, that a health insurance plan containing no annual or lifetime limit for medical benefits cannot have such limits on men- tal health benefits. Such congressional action reveals both that the ADA does not contain parity requirements and that no parity requirements for **28 mental and phys- ical disability benefits have been enacted subsequent to the ADA.

iii.

Ford attempts to buttress her challenge to the disparity between benefits for mental and physical disabilities by pointing to section 501(c) of the ADA, which contains the

"safe harbor" provision covering the insurance industry. This section, codified at HN12 42 U.S.C. § 12201(c), reads as follows:

Subchapters I through III of this chapter and title IV of this Act shall not be construed to prohibit or restrict --

(1) an insurer, hospital or medical service company, health maintenance organization, or any agent, or entity that administers ben- efit plans, or similar organizations from un- derwriting risks, classifying risks, or admin- istering such risks that are based on or not inconsistent with State law; or

(2) a person or organization covered by this chapter from establishing, sponsoring, ob- serving or administering the terms of a bona fide benefit plan that are based on underwrit- ing risks, classifying risks, or administering such risks that are based on or not inconsis- tent with State law; or

(3) a person or organization covered by this chapter from establishing, **29 sponsor- ing, observing or administering the terms of a bona fide benefit plan that is not subject to State laws that regulate insurance.

145 F.3d 601, *611; 1998 U.S. App. LEXIS 10315, **29;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

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*611 Paragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the purposes of subchapter sic I and III of this chapter.

42 U.S.C. § 12201(c). Ford essentially claims that, once she presents a prima facie case alleging discrimination in disability benefits, Schering and MetLife must present actuarial data demonstrating that their plan is not a "sub- terfuge . " Hence, according to Ford, the district court erred in granting the defendants' Rule 12(b)(6) motion since the defendants had not offered data justifying the actuarial basis for the disparity in benefits.

Ford's argument must fail, however, since it runs con- trary to Supreme Court precedent, ignores our statutory duty regarding insurance regulation and distorts the role of this court. First, Ford's argument that Schering and MetLife must justify their insurance plan contradicts the Supreme Court's interpretation of a provision similar to section 501(c) in the context of the Age Discrimination in Employment Act (ADEA), Pub. L. No. 90-202, 81

Stat. 602 (1967) **30 (codified at 29 U.S.C. § 621 et seq. (1994)). Prior to Congress's elimination of the term

"subterfuge" from the ADEA in 1990, see Older Workers

Benefit Protection Act of 1990, Pub. L. No. 101-433,

104 Stat. 978, the ADEA granted an exemption from the ADEA's prohibition of age discrimination to an employee benefit plan that was not "a subterfuge . " 29 U.S.C. §

623(f) (1988). In Public Employees Retirement Sys. of

Ohio v. Betts, 492 U.S. 158, 109 S. Ct. 2854, 106 L. Ed.

2d 134 (1989), the Supreme Court rejected a challenge to an insurance plan that rendered covered employees in- eligible for disability retirement once they reached age sixty. Relying on its decision in United Air Lines, Inc. v. McMann, 434 U.S. 192, 98 S. Ct. 444, 54 L. Ed. 2d

402 (1977), the Supreme Court concluded that the term

"subterfuge" must be given its ordinary meaning of " 'a scheme, plan, stratagem, or artifice of evasion.' " Betts,

492 U.S. at 167, 109 S. Ct. at 2861 (quoting McMann, 434

U.S. at 203, 98 S. Ct. at 450). In addition, the Supreme Court found that requiring an insurance company to jus- tify its coverage scheme had no basis in the statutory

language. See 492 U.S. at 170-71, **31 109 S. Ct. at

2863; see also McMann, 434 U.S. at 203, 98 S. Ct. at 450. The Supreme Court's definition and analysis of the ADEA's use of the term "subterfuge" are applicable to the ADA's use of the term "subterfuge . " Congress en- acted section 501(c) of the ADA in 1990, see Pub. L. No.

101-336, 104 Stat. 369 (1990), while the Supreme Court decided Betts in 1989. Congress therefore is presumed to have adopted the Supreme Court's interpretation of "sub- terfuge" in the ADEA context when Congress enacted the ADA. "Where, as here, Congress adopts a new law incor- porating sections of a prior law, Congress normally can be presumed to have had knowledge of the interpretation given to the incorporated law, at least insofar as it affects the new statute." Lorillard v. Pons, 434 U.S. 575, 581, 98

S. Ct. 866, 870, 55 L. Ed. 2d 40 (1978); see Standard Oil Co. of N.J. v. United States, 221 U.S. 1, 59, 31 S. Ct. 502, 515, 55 L. Ed. 619 (1911) ("Where words are employed in a statute which had at the time a well-known meaning at common law or in the law of this country, they are presumed to have been used in that sense unless the context compels to the contrary."). "Had Congress **32 intended to reject the Betts interpretation of subterfuge when it enacted the ADA, it could have done so expressly by incorporating language for that purpose into the bill that Congress voted on and the President signed." Krauel,

95 F.3d 674 at 679; accord Modderno, 82 F.3d at 1064. Accordingly, as the Supreme Court held in the ADEA context, HN13 the term "subterfuge" does not require an insurance company to justify its policy coverage after a plaintiff's mere prima facie allegation.

The second reason that Ford's argument must fail is that it ignores our statutory duty under the McCarran- Ferguson Act regarding insurance cases. HN14 Pursuant to that Act, "No Act of Congress shall be construed to in- validate, impair, or supersede any law enacted by any State for the purpose of regulating the business of in- surance . . . unless such Act specifically relates to the business of insurance . . . ." 15 U.S.C. § 1012(b) (1994). The ADA does not "specifically relate to the business of insurance , " id., and

145 F.3d 601, *612; 1998 U.S. App. LEXIS 10315, **32;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 13

*612 does not mention the term "insurance" in its intro- ductory section entitled "Findings and purpose . " See 42

U.S.C. § 12101. Accordingly, we will not construe section

**33 501(c) to require a seismic shift in the insurance business, namely requiring insurers to justify their cover- age plans in court after a mere allegation by a plaintiff. This second reason is integrally related to the third reason Ford's argument regarding section 501(c) fails, namely that requiring insurers to justify their coverage plans el- evates this court to the position of super-actuary. This court is clearly not equipped to become the watchdog of the insurance business, and it is unclear exactly what actuarial analysis the defendants would have to produce to disprove the charge of "subterfuge . " See Modderno,

82 F.3d at 1062-63 (noting confusion as to exactly what actuarial data would be sufficient).

Ford's second claim against Schering and MetLife is that the disparity in benefits for mental and physical dis- abilities violates Title III of the ADA. HN15 Title III reads in relevant part as follows: "No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facili- ties, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates **34 a place of pub- lic accommodation." 42 U.S.C. § 12182(a). Relying on the principle that courts should avoid interpreting statutes in a manner rendering some words redundant, see United States v. Alaska, 521 U.S. 1, , 117 S. Ct. 1888, 1918, 138

L. Ed. 2d 231 (1997), Ford and the U.S. Dept. of Justice as amicus essentially argue that the phrase "services, . .

. privileges, and advantages" covers discrimination in realms different than physical access to facilities or else these words would be superfluous. Ford can also cite to the ADA itself for the proposition that an "insurance office "

is a public accommodation under Title III. 42 U.S.C. §

12181(7)(F) (listing examples of public accommodations including "insurance office ").

The fact that an insurance office is a public accommo- dation, however, does not mean that the insurance poli- cies offered at that location are covered by Title III. In the instant case, Schering and MetLife offered disability ben- efits to Ford in the context of her employment at Schering, meaning that the disability benefits constituted part of the terms and conditions of Ford's employment. Terms and conditions of employment are covered under Title I, not

**35 Title III. "Title III is not intended to govern any terms or conditions of employment by providers of pub- lic accommodations or potential places of employment; employment practices are governed by title I of this leg- islation." S. Rep. No. 101-116, at 58 (1989); see H.R. Rep. No. 101-485, pt. 2, at 99 (1990), reprinted in 1990

U.S.C.C.A.N. 303, 382. Therefore, Ford cannot state a claim against her employer, Schering, pursuant to Title III. See Parker, 121 F.3d 1006 at 1015.

Regarding MetLife, the disability benefits that Ford challenges do not qualify as a public accommodation and thus do not fall within the rubric of Title III. HN16 The plain meaning of Title III is that a public accommodation is a place, leading to the conclusion that " 'it is all of the services which the public accommodation offers, not all services which the lessor of the public accommoda- tion offers , which fall within the scope of Title III.' " Id. at 1011 (quoting Stoutenborough v. National Football League, Inc., 59 F.3d 580, 583 (6th Cir. 1995) (a tele- vision broadcast is not covered by Title III)). This is in keeping with the host of examples of public accommoda- tions provided by the ADA, all of **36 which refer to places. See 42 U.S.C. § 12181(7). n3 Since Ford received her disability

145 F.3d 601, *613; 1998 U.S. App. LEXIS 10315, **36;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 14

*613 benefits via her employment at Schering, she had no nexus to MetLife's "insurance office" and thus was not discriminated against in connection with a public accom- modation. Furthermore, the "goods, services, facilities, privileges, advantages, or accommodations" concerning which a disabled person cannot suffer discrimination are not free-standing concepts but rather all refer to the statu- tory term "public accommodation" and thus to what these places of public accommodation provide. Ford cannot point to these terms as providing protection from dis- crimination unrelated to places.

tion;

(H) a museum, library, gallery, or other place of public display or collection;

(I) a park, zoo, amusement park, or other place of recreation;

(J) a nursery, elementary, secondary, undergraduate, or postgraduate private school, or other place of education;

n3 Section 12181(7) reads as follows: The following private entities are con- sidered public accommodations for purposes of this subchapter, if the op- erations of such entities affect com- merce--

(A) an inn, hotel, motel, or other place of lodging, except for an establishment located within a building that contains not more than five rooms for rent or hire and that is actually occupied by the proprietor of such establishment as

**37

(K) a day care center, senior citizen center, homeless shelter, food bank, adoption agency, or other social ser- vice center establishment; and

(L) a gymnasium, health spa, bowling alley, golf course, or other place of ex- ercise or recreation.

HN17

42 U.S.C. § 12181(7).

the residence of such proprietor;

(B) a restaurant, bar, or other estab- lishment serving food or drink;

(D) an auditorium, convention center, lecture hall, or other place of public gathering;

(E) a bakery, grocery store, clothing store, hardware store, shopping center, or other sales or rental establishment;

(F) a laundromat, dry-cleaner, bank, barber shop, beauty shop, travel ser- vice, shoe repair service, funeral par- lor, gas station, office of an accoun- tant or lawyer, pharmacy, insurance office, professional office of a health care provider, hospital, or other ser- vice establishment;

(G) a terminal, depot, or other station used for specified public transporta-

Restricting "public accommodation" to places is in keeping with jurisprudence concerning Title II of the Civil Rights Act of 1964, 42 U.S.C. § 2000a (1994). HN18 Title II proscribes racial and religious discrimination in

"the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation

. . . ." 42 U.S.C. § 2000a(a). This proscription has been limited to places rather than including membership in an organization, see Welsh v. Boy Scouts of Am., 993 F.2d

1267, 1269-75 (7th Cir. 1993), and rather than encom- passing an organization's operations unconnected to any physical facility. See Clegg v. Cult Awareness Network,

18 F.3d 752, 755-56 (9th Cir. 1994).

Confining "public accommodation" to places is also in keeping with the Dept. of Justice's regulations to this effect:

The purpose of the ADA's public accom- modations requirements is to ensure acces- sibility to the goods offered by a public ac- commodation, not to alter the nature or mix of goods that the public accommodation has typically provided. In other words, a book- store, for example, must make its facilities and sales operations accessible to individu- als with disabilities, **38 but is not re- quired to stock Brailled or large print books.

145 F.3d 601, *613; 1998 U.S. App. LEXIS 10315, **38;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 15

Similarly, a video store must make its facil- ities and rental operations accessible, but is not required to stock closed-captioned video tapes.

28 C.F.R. pt. 36, app. B, at 640 (1997). Just as a book- store must be accessible to the disabled but need not treat the disabled equally in terms of books the store stocks, likewise an insurance office must be physically accessible to the disabled but need not provide insurance that treats the disabled equally with the non-disabled. While the Dept. of Justice has issued other documents stating that Title III does cover the substance of insur- ance contracts, see Dept. of Justice, Title III Technical Assistance Manual: Covering Public Accommodations and Commercial Facilities § III-3.11000, at 19 (Nov.

1993) ("Insurance offices are places of public accom- modation and, as such, may not discriminate on the basis of disability in the sale of insurance contracts or in the terms or conditions of the insurance contracts they of- fer."), such an interpretation is "manifestly contrary" to the plain meaning of Title III and, accordingly, is not bind- ing on this court. Chevron U.S.A., **39 Inc. v. Natural Resources Defense Council, 467 U.S. 837, 844, 104 S. Ct.

2778, 2782, 81 L. Ed. 2d 694 (1984); see Parker, 121 F.3d at 1012 n.5. Furthermore, since we find the plain meaning of "public accommodation" and 42 U.S.C. § 12182(a) to be clear, we have no need to analyze the ADA's legislative history.

We also note that, by aligning ourselves with the Sixth

Circuit's Parker decision regarding

145 F.3d 601, *614; 1998 U.S. App. LEXIS 10315, **39;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 16

*614 the definition of "public accommodation , " we part company with the First Circuit in this re- gard. In Carparts Distribution Ctr., Inc. v. Automotive Wholesaler's Ass'n of New England, Inc., 37 F.3d 12 (1st Cir. 1994), the First Circuit held that Title III is not lim- ited to physical structures. The First Circuit pointed to the inclusion of "travel service" in the list of public accom- modations and noted:

Many travel services conduct business by telephone or correspondence without requir- ing their customers to enter an office in or- der to obtain their services. Likewise, one can easily imagine the existence of other ser- vice establishments conducting business by mail and phone without providing facilities for their customers to enter in order to utilize their services. **40 It would be irrational to conclude that persons who enter an of- fice to purchase services are protected by the ADA, but persons who purchase the same services over the telephone or by mail are not. Congress could not have intended such an absurd result.

Id. at 19 (citing 42 U.S.C. § 12181(7)(F)). However, as the Sixth Circuit pointed out in Parker, 121 F.3d at 1014, the First Circuit failed to read the examples of public ac- commodations that piqued the First Circuit's interest in the context of the other examples of public accommoda- tions. The litany of terms, including "auditorium," "bak- ery," "laundromat," "museum," "park," "nursery," "food bank," and "gymnasium " refer to places with resources utilized by physical access. 42 U.S.C. § 12181(7)(D)-

(F), (H)-(L). Pursuant to the doctrine of noscitur a sociis, the terms that the First Circuit finds ambiguous should be interpreted by reference to the accompanying words of the statute "to avoid the giving of unintended breadth to the Acts of Congress." Jarecki v. G.D. Searle & Co.,

367 U.S. 303, 307, 81 S. Ct. 1579, 1582, 6 L. Ed. 2d

859 (1961). Accordingly, we do not find HN19 the term

"public accommodation" or **41 the terms in 42 U.S.C.

§ 12181(7) to refer to non-physical access or even to be

ambiguous as to their meaning.

In sum, Ford fails to state a claim under Title III of the ADA since the provision of disability benefits by MetLife to Schering's employees does not qualify as a public ac- commodation.

IV.

For the above reasons, we will affirm the September

12, 1996, order of the district court dismissing Ford's complaint for failure to state a claim. Unlike the district court, we find that Ford is eligible to sue under Title I. However, Ford fails to state a claim under Titles I or III and errs in asserting that the "safe harbor" provision of Title V requires insurance companies to justify their coverage plans after a plaintiff's prima facie allegation.

CONCURBY: ALITO

CONCUR: ALITO, Circuit Judge, concurring in the judgment:

I agree with the majority that Ford fails to state a claim under the Americans with Disabilities Act (ADA). However, I reach this conclusion based solely on the in- surance "safe harbor" provision located in section 501(c) of the ADA. See 42 U.S.C. § 12201(c).

Section 501(c) provides that Titles I and III of the ADA "shall not be construed to prohibit **42 or re- strict" the terms of a bona fide insurance plan. 42 U.S.C. §

12201(c). This exemption applies so long as it is not "used as a subterfuge to evade the purposes of" the ADA. Id. As the majority recognizes, the term "subterfuge" must be construed in accordance with the Supreme Court's de- cision in Public Employees Retirement Sys. of Ohio v. Betts, 492 U.S. 158, 106 L. Ed. 2d 134, 109 S. Ct. 2854

(1989). See Maj. Op. at 18-19. Betts concerned a "safe harbor" provision that exempted fringe benefit plans from coverage by the Age Discrimination in Employment Act

(ADEA). See 29 U.S.C. § 623(f)(2) (1988). n1 Like sec- tion 501(c), the ADEA exemption provided that it would not protect a plan that was "a subterfuge to evade the pur- poses of" the Act. Id. In interpreting this language, the Court concluded that an employee benefit plan adopted prior to the enactment

145 F.3d 601, *615; 1998 U.S. App. LEXIS 10315, **42;

8 Am. Disabilities Cas. (BNA) 190; 22 Employee Benefits Cas. (BNA) 1866

Page 17

*615 of the ADEA could not be considered a subterfuge to evade the purposes of the ADEA. Betts, 492 U.S. 158 at 166-69, 106 L. Ed. 2d 134, 109 S. Ct. 2854 (reaffirming the holding of United Air Lines, Inc. v. McMann, 434 U.S.

192, 203, 54 L. Ed. 2d 402, 98 S. Ct. 444 (1977)). Under the same reasoning, the insurance plan challenged by Ford cannot **43 be considered a subterfuge to evade the purposes of the ADA since the plan was adopted prior to the enactment of the ADA. n2 See Modderno v. King,

317 U.S. App. D.C. 255, 82 F.3d 1059, 1063-1065 (D.C. Cir. 1996) (holding that an insurance plan enacted prior to the importation of ADA standards into the Rehabilitation Act could not be considered a subterfuge to evade those standards). Accordingly, the defendants' plan is insulated from attack by section 501(c).

n1 Following Betts, section 623(f)(2) was amended by the Older Workers Benefit Protection Act of 1990, Pub. L. No. 101-433, § 103(1), 104

Stat. 978.

n2 The disputed portions of the plan have been in effect since at least 1985. App. at 69, 87. The ADA was enacted in 1990. See 42 U.S.C. § 12101. Three justices in McMann rejected the major- ity's conclusion that a plan adopted prior to the enactment of the ADEA could not be a subterfuge to avoid the purposes of that Act. See 434 U.S. at 204-05 (White, J., concurring); id. at 219 n.13

(Marshall, J., joined by Brennan, J., dissenting). According to these justices, a pre-Act plan could become a subterfuge if it was maintained after the passage of the ADEA in order to evade the pur- poses of that Act. One could argue that this posi- tion is stronger under the ADA's "safe harbor" pro- vision due to difference in the statutory language. Compare 29 U.S.C. § 623(f) ("is not a subterfuge to evade the purposes of" the ADEA) (emphasis added) with 42 U.S.C. § 1201(c) ("shall not be used as a subterfuge to evade the purposes of" the ADA)

(emphasis added). However, I do not believe that this change is sufficient to avoid the mandate of McMann and Betts.

**44

I further note that Ford's complaint as currently framed fails to allege that the defendants ever developed a "spe-

cific intent" to evade the purposes of the ADA. See Betts,

492 U.S. at 171. In Betts, the Court wrote:

When an employee seeks to challenge a ben- efit plan provision as a subterfuge to evade the purposes of the Act, the employee bears the burden of proving that the discriminatory plan provision actually was intended to serve the purpose of discriminating in some non- fringe-benefit aspect of the employment re- lation.

Betts, 492 U.S. at 181. Under this reading of "sub- terfuge," Ford could not successfully challenge the de- fendants' insurance plan unless she could show that it was intended to serve the purpose of discriminating in some non-insurance--benefit aspect of her relationship with the defendants. Ford's complaint contains no such allegation of intent.

Given the effect of section 501(c) on Ford's claims, I do not think that it is necessary for the court to con- clude that distinguishing between people with different disabilities for insurance purposes is not discrimination based on disability. See Maj. Op. at 12-13. In fact, it would seem **45 that making such distinctions does constitute discrimination in the most basic sense of the word. See Webster's Third New International Dictionary at 648 (defining discrimination as "the making or perceiv- ing of a distinction or difference"). However, we need not wrestle with the question of what might or might not con- stitute unlawful insurance discrimination under the ADA had Congress not addressed the issue; Congress did ad- dress the issue and provided an explicit answer in section

501(c).

In light of the ease with which Ford's claims can be resolved under section 501(c), I would not reach the more difficult issues of: 1) whether a former employee who can no longer work can meet Title I's "qualified indi- vidual with a disability" requirement; and 2) whether Title III's public accommodation provision guarantees anything more than physical access. These issues have divided the circuits, and I would reserve judgment un- til we are confronted with a case in which the unique considerations of insurance plans are not at stake.


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