Dragovich et al v. United States Department of the Treasury et al

Filing 112

ORDER by Judge Claudia Wilken DENYING FEDERAL DEFENDANTS' 97 MOTION TO DISMISS CERTAIN CLAIMS. (ndr, COURT STAFF) (Filed on 1/26/2012)

1

IN THE UNITED STATES DISTRICT COURT

2

FOR THE NORTHERN DISTRICT OF CALIFORNIA

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4
5
6
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8

MICHAEL DRAGOVICH; MICHAEL
GAITLEY; ELIZABETH LITTERAL;
PATRICIA FITZSIMMONS; CAROLYN
LIGHT; CHERYL LIGHT; DAVID BEERS;
CHARLES COLE; RAFAEL V.
DOMINGUEZ; and JOSE G.
HERMOSILLO, on behalf of
themselves and all others
similarly situated,

9

United States District Court
For the Northern District of California

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11
12
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No. C 10-01564 CW
ORDER DENYING
FEDERAL
DEFENDANTS' MOTION
TO DISMISS CERTAIN
CLAIMS (Docket
No. 97)

Plaintiffs,
v.
UNITED STATES DEPARTMENT OF THE
TREASURY, et al.,
Defendants.
________________________________/

14
15

Plaintiffs challenge the constitutionality of section three

16

of the Defense of Marriage Act (DOMA), 1 U.S.C. § 7, and

17

§ 7702B(f) of the Internal Revenue Code, 26 U.S.C. § 7702B(f),

18

which limit their participation in a Long-Term Care (LTC)

19

insurance program maintained by the California Public Employees'

20

Retirement System (CalPERS).

Plaintiffs contend that these

21
federal provisions violate the Constitution's guarantees of equal
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23
24
25

protection and substantive due process because they exclude
legally married same-sex couples and registered domestic partners.
Federal Defendants earlier moved unsuccessfully to dismiss

26

Plaintiffs' equal protection and substantive due process challenge

27

to section three of the DOMA, which establishes a federal

28

1

definition of marriage that excludes legally married same-sex

2

spouses.

3

under California law, so the Court did not find it necessary to

4

resolve whether a cognizable constitutional claim had been stated

5

with respect to § 7702B(f)'s exclusion of registered domestic

6

At that time, Plaintiff couples were all legally married

partners as family members eligible to enroll in federally

7
qualified, state-maintained long-term care plans.

Nor did the

8
9

United States District Court
For the Northern District of California

10
11

Court specifically address the constitutionality of section three
of the DOMA with respect to registered domestic partners.
Subsequently, however, Plaintiffs filed a Second Amended

12

Complaint adding as Plaintiffs Rafael V. Dominguez and Jose G.

13

Hermosillo, who are not legally married, but are registered as

14

domestic partners in California.

In response, Federal Defendants

15
moved to dismiss, pursuant to Federal Rule of Civil Procedure
16
12(b)(6), the claims that § 7702B(f)'s exclusion of California
17
18

registered domestic partners violates equal protection and

19

substantive due process.

20

their brief should be construed as support for the

21

constitutionality of section three of the DOMA.

22

Defendants do not appear to move to dismiss the domestic partners'

23

challenge to that law.

Federal Defendants state that nothing in

Thus, Federal

Having considered all of the parties'

24
submissions and oral argument, the Court denies Federal
25
26

Defendants' motion to dismiss.

27
28
2

BACKGROUND

1

Plaintiffs are California public employees and their same-sex

2
3

spouses and registered domestic partners, who are in long-term

4

committed relationships recognized and protected under California

5

law.

6

As explained in this Court's previous order, CalPERS

provides retirement and health benefits, including long-term care

7
insurance, to many of the state’s public employees and retirees
8
9

United States District Court
For the Northern District of California

10

and their families.
Long-term care insurance provides coverage when a person

11

needs assistance with basic activities of living due to injury,

12

old age, or severe impairments related to chronic illnesses, such

13

as Alzheimer’s disease.

14

was enacted on August 21, 1996, as part of the Health Insurance

Internal Revenue Code § 7702B(f), which

15
Portability and Accountability Act (HIPAA), provides favorable
16
federal tax treatment to participants in qualified state17
18

maintained long-term care insurance plans for state employees,

19

such as the CalPERS LTC insurance program.

20

Section 7702B(f)(2) disqualifies a state-maintained plan from this

21

favorable tax treatment if it provides coverage to individuals

22

other than those specified under its subparagraph (C).

23

26 U.S.C. § 7702B(f).

26 U.S.C.

§ 7702B(f)(2)(C).

24
The list of eligible individuals in subparagraph (C) of
25
26
27

§ 7702B(f)(2) includes state employees and former employees, their
spouses, and individuals bearing a relationship to the employees

28
3

1

or spouses which is described in any of subparagraphs (A) through

2

(G) of section 152(d)(2).

26 U.S.C. § 7702B(f)(2)(C).

3

Section 152(d)(2), the part of the tax code from which

4

subparagraph (C)(iii) draws its list of eligible relatives,

5

defines the relatives for whom a taxpayer may claim a dependent

6

exemption.

See 26 U.S.C. §§ 151-52.

Section 152(d)(2) sets forth

7
subparagraphs (A) through (H) to identify the following
8
9

individuals as "qualifying relatives" for the exemption:

United States District Court
For the Northern District of California

10

(A)

A child or a descendant of a child.

11

(B)

A brother, sister, stepbrother, or stepsister.

12

(C)

The father or mother, or an ancestor of either.

13

(D)

A stepfather or stepmother.

14

(E)

A son or daughter of a brother or sister of the
taxpayer.

(F)

A brother or sister of the father or mother of
the taxpayer.

(G)

A son-in-law, daughter-in-law, father-in-law,
mother-in-law, brother-in-law, or sister-in-law.

(H)

An individual . . . who, for the taxable year of
the taxpayer, has the same principal place of
abode as the taxpayer and is a member of the
taxpayer's household.

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16
17
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21
22
23

26 U.S.C. § 152(d)(2).
When it chose to incorporate subparagraphs (A) through (G),

24
Congress specifically chose not to carry over subparagraph (H) to
25
subparagraph (C)(iii) of § 7702B(f)(2).

Had Congress not chosen

26
27

to exclude subparagraph (H) in subparagraph (C)(iii) of

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4

1

§ 7702B(f)(2), registered domestic partners would have been

2

eligible to enroll in the CalPERS LTC program.

3

Instead, CalPERS has refused to make its LTC insurance

4

program available to the registered domestic partners, as well as

5

the same-sex spouses, of the public employee Plaintiffs.

6

Plaintiffs' complaint asserts that Congress violated the

7
Constitution by excluding registered domestic partners as
8
9

United States District Court
For the Northern District of California

10
11

relatives eligible for enrollment in qualified state-maintained
long-term care insurance plans.
In 1996, when Internal Revenue Code § 7702B(f) and the DOMA

12

were passed, registered domestic partnership laws had not been

13

widely adopted.

14

domestic partnerships prior to and during 1996.

Nonetheless, Congress had discussed registered
In April 1992,

15
the District of Columbia had passed the Health Care Benefits
16
Expansion Act, establishing a domestic partnership registry in
17
18

that jurisdiction.

Congress reacted to the District of Columbia's

19

new law by barring any local or federal funding to implement,

20

enforce or administer the registry.

21

Appropriations Act, 1993, Pub. L. No. 102-382, 106 Stat. 1422

22

(1992).1

District of Columbia

Representative Clyde Holloway argued, "If there ever was

23
an attack on the family in this country, it is this Domestic
24
25
26
27
28

1

The Health Care Benefits Expansion Act of 1992, D.C. Law 9114, which established the District of Columbia's domestic
partnership registry, was assigned Act No. 9-188 after its passage
by the Council and approval by the Mayor. See D.C. Code § 36-1401
(legislative history of law 9-114).
5

1

Partnership Act . . . To me, this bill totally destroys the

2

families of this country."

3

96521, at *H2950.

4

homosexual can stand here on this floor and openly tell me that

5

homosexuality is good for the future of America."

6

138 Cong. Rec. H2950-04, 1992 WL

He stated, "I do not think anyone that is

138 Cong. Rec.

H6120-02, 1992 WL 156371, at *H6129.

7
In arguing against the appropriations ban before the Senate,
8
9

Senator Brock Adams entered into the Congressional record

United States District Court
For the Northern District of California

10

information detailing domestic partnership recognition in numerous

11

jurisdictions, apart from the District of Columbia.2

12

Rec. S10876-01, 1992 WL 180795, at *S10904.

13
14

138 Cong.

On July 30, 1992, the appropriations bill was amended to
include the funding ban, and on October 5, 1992, the District of

15
Columbia Appropriations Act, 1993, became law.

Pub L. No. 102-

16
17
18

382.
The ban on funds for the District of Columbia's domestic

19

partnership registry was renewed in subsequent years.

In 1993, as

20

part of a successful drive to renew the ban, Representative Ernst

21

Istook argued, "Now, obviously this was passed by the District of

22

Columbia to enable people, more than anything else, who are in a

23
24
25
26
27
28

2

The record includes mention of Travis County in Texas, Dane
County in Wisconsin, the California counties of Alameda, San Mateo
and Santa Cruz, the cities of Berkeley, Los Angeles, Oakland,
Santa Cruz, San Francisco, West Hollywood, New York, Ithaca,
Cambridge, West Palm Beach, Ann Arbor, East Lansing, Madison,
Minneapolis, Seattle, and Tahoma Park, as well as others in which
domestic partner organizing efforts were underway.
6

1

homosexual relationship to register an equivalent of a gay

2

marriage.

3

proposal is abhorrent, in my view."

4

WL 236117, at *H4355, *H4358.

5

Appropriations Act, 1994, included the ban.

6

That is one of the reasons that this particular
139 Cong. Rec. H4353-01, 1993

The District of Columbia
Pub. L. No. 103-127,

107 Stat. 1336 (1993).

7
In 1994, Representative Robert Dornan proclaimed, "From my
8
9

historical knowledge, this business of domestic partner benefits

United States District Court
For the Northern District of California

10

started in Seattle where they were trying to give privileged

11

treatment to lesbian and homosexual partners . . . Let us get rid

12

of this domestic partnership nonsense."

13

1994 WL 363727, at *H5601.

14

District of Columbia Appropriations Act, 1995, Pub. L. No. 103-

140 Cong. Rec. H5589-02,

Again, the funding ban was approved.

15
334, 108 Stat. 2576 (1994).
16
In 1995, opponents of registered domestic partnerships again
17
18

sought to include the ban in the District of Columbia

19

Appropriations Act, 1996.

20

that domestic partnership registration laws "undermine the

21

traditional moral values that are the bedrock of this Nation."

22

141 Cong. Rec. H11627-02, 1995 WL 639923, at *H11657.

23

Representative Cliff Stearns asserted

Although the District of Columbia Appropriations Act was

24
never passed during the budget impasse of 1995, in 1996, during
25
26

the same legislative session in which § 7702B(f) and the DOMA were

27

passed, Congress passed continuing appropriations, which included

28

the ban on funding of the registry.
7

Continuing Appropriations,

1

1996, Pub. L. No. 104-90, 110 Stat. 3 (1996).

2

No. 104-92, 110 Stat. 16 (1996).

3

two appropriations bills that also contained the ban on funding

4

for the registry.

5

Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321

6

See also, Pub. L.

Later that year, Congress passed

Omnibus Consolidated Rescissions and

(1996); District of Columbia Appropriations Act, 1997, Pub. L. No.

7
104-194, 110 Stat. 2356 (1996) (captioned "Prohibition on Domestic
8
9

United States District Court
For the Northern District of California

10

Partners Act").
The record of Congress' consideration of the DOMA, which also

11

occurred in 1996, likewise evidences animosity and moral

12

condemnation of same-sex relationships.3

13

Personnel Mgmt., 699 F. Supp. 2d 374, 378-79 (D. Mass 2010).

14

Gill v. Office of

Indeed, the issue of registered domestic partnerships arose within

15
the context of Congress' consideration of the DOMA.

The day

16
17

Senator Nickles introduced the bill to enact the DOMA, he

18

explained that the law was needed to circumvent the recognition of

19

registered domestic partners under federal law.

20
21
22
23
24
25

He stated,

Another example of why we need a Federal definition of
the terms "marriage" and "spouse" stems from
experience during debate on the Family and Medical
Leave Act of 1993. Shortly before passage of this act,
I attached an amendment that defined "spouse" as "a
husband or wife, as the case may be." When the
Secretary of Labor published his proposed regulations,
a considerable number of comments were received urging
that the definition of "spouse" be "broadened to
include domestic partners in committed relationships,

26
3

27
28

The record of animus is detailed in this Court's January
18, 2011 order denying Federal Defendants' motion to dismiss
Plaintiffs' constitutional challenge to section three of the DOMA.
8

1
2

including same-sex relationships." When the Secretary
issued the final rules he stated that the definition
of "spouse" and the legislative history precluded such
a broadening of the definition.

3
142 Cong. Rec. 4851-02, 1996 WL 233584, at *S4869-70.
4
5

A proposed amendment to the bill that became the DOMA would

6

have required the General Accounting Office4 to "undertake a study

7

of the differences in the benefits, rights and privileges

8

available to persons in a marriage and the benefits, rights and

9

privileges available to persons in a domestic partnership

United States District Court
For the Northern District of California

10

resulting from the non-recognition of domestic partnerships as

11
legal unions by State and Federal laws."

142 Cong. Rec. 7480-05,

12
13

1996 WL 392787, at *H7503.

14

in opposition to the amendment, "This motion represents a

15

transparent attempt to give some statutory recognition to domestic

16

partnerships."

17

The amendment to require the study of domestic partnerships was

18

defeated.

Representative Charles Canady stated,

142 Cong. Rec. 7480-05, 1996 WL 392787, at *H7504.

142 Cong. Rec. 7480-05, 1996 WL 392787, at *H7505.

19
Congress continued until 2001 to approve annually the ban on
20
21

the use of local and federal funds to implement the District of

22

Columbia's domestic partnership registry.

District of Columbia

23

Appropriations Act, 1998, Pub. L. No. 105-100, 111 Stat. 2160

24

(1997); Omnibus Consolidated and Emergency Supplemental

25

Appropriations Act, 1999, Pub. L. No. 105-277, 112 Stat. 2681

26

(1998); Consolidated Appropriations Act, 2000, Pub. L. No. 106-113

27
4

28

Now, the Government Accountability Office.
9

1

(1999), District of Columbia Appropriations Act, 2001, Pub. L.

2

No. 106-522, 114 Stat. 2464 (2000).

3

Riggs stated, "[W]e as Federal lawmakers have a duty to oppose

4

policies and laws that confer partner benefits or marital status

5

on same-sex couples."

6

*H7343.

In 1998, Representative Frank

144 Cong. Rec. 7335-03, 1998 WL 454432, at

Representative Riggs took the position that the registry,

7
if permitted to take effect, would "legitimize same-sex activity."
8
9

United States District Court
For the Northern District of California

10

Id.
Also in 1998, Congress considered the Domestic Partnership

11

Benefits and Obligations Act of 1998, introduced by Senator Paul

12

Wellstone.

13

partners of federal employees.

14

109601.

This Act would have provided benefits to the domestic
144 Cong. Rec. S1959-02, 1998 WL

In his statement in support of the bill, Senator

15
Wellstone catalogued the number of cities, municipalities,
16
counties, businesses, non-profit organizations and unions that
17
18

offered domestic partnership benefits.

19

1998 WL 55803, at S733.

20

disappointment that Congress had yet to offer domestic partnership

21

benefits when such benefits "have already been offered in some

22

cities and by some businesses since 1982 . . ."

23

144 Cong. Rec. 731-02,

Senator Wellstone further expressed his

Id.

The bill was

not passed.

24
In 2001, Congress authorized a more limited appropriations
25
26

ban, permitting the use of non-federal funds to institute and

27

administer the District of Columbia domestic partnership registry.

28

District of Columbia Appropriations Act, 2002, Pub. L. No. 107-96,
10

1

115 Stat. 923 (2001).

2

Columbia finally implemented its domestic partnership registry.

3

See 49 D.C. Reg. 5419 (June 14, 2002).5

4
5

Accordingly, in 2002, the District of

Internal Revenue Code § 7702B(f)(2)(C)(iii) was amended in
2004 in the Working Families Tax Relief Act, Public Law No. 108-

6
311, 118 Stat. 1166 (2004).

Congress did not take that

7
8
9

United States District Court
For the Northern District of California

10

opportunity to change the provision to include registered domestic
partners.

had enacted domestic partnership legislation.

11

LEGAL STANDARD

12
13
14

By then, California, New Jersey, Washington and Maine

Dismissal under Rule 12(b)(6) for failure to state a claim is
appropriate only when the complaint does not give the defendant
fair notice of a legally cognizable claim and the grounds on which

15
it rests.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

16
17

A complaint must contain a "short and plain statement of the claim

18

showing that the pleader is entitled to relief."

Fed. R. Civ. P.

19

8(a).

20

state a claim, the court will take all material allegations as

21

true and construe them in the light most favorable to the

22

plaintiff.

In considering whether the complaint is sufficient to

NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.

23
1986).

However, this principle is inapplicable to legal

24
25
26
27
28

5

In 2010, Congress lifted the ban on federal funding for the
District of Columbia's domestic partnership registry. See
Consolidated Appropriations Act, 2010, Public Law 111-117
(Division C--Financial Services and General Government
Appropriations Act, 2010); H.R. Rep. 111-202, at 7.
11

1

conclusions; "threadbare recitals of the elements of a cause of

2

action, supported by mere conclusory statements," are not taken as

3

true.

4

(2009) (citing Twombly, 550 U.S. at 555).

Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949-50

5
6

DISCUSSION
I. Equal Protection

7
The doctrine of equal protection exists to ensure the
8
9

Constitution's promise of equal treatment under the law.

Romer v.

United States District Court
For the Northern District of California

10

Evans, 517 U.S. 620, 631 (1996).

Certain classifications by

11

statute or other government activity, such as classifications

12

based on race, have been found to be suspect.

13

448 U.S. 297, 322 (1980) (noting race as "the principal example"

14

of a "suspect" classification).

Harris v. McRae,

Where a challenged law burdens a

15
suspect class, courts apply strict scrutiny to determine the
16
constitutional validity of the provision.

See Massachusetts Bd.

17
18

of Retirement v. Murgia, 427 U.S. 307, 312 (1976).

19

"presumptively invalid and can be upheld only upon an

20

extraordinary justification."

21

Feeney, 442 U.S. 256, 272 (1979).

22

level of scrutiny to certain other classifications, such as those

23

Such laws are

Personnel Administrator of Mass. v.
Courts apply an intermediate

based upon sex, which "have traditionally been the touchstone for

24
pervasive and often subtle discrimination."

Id. at 273.

A law

25
26

that does not burden a protected class is subject to a lower

27

standard of review and need only "bear[] a rational relationship

28

to some legitimate end."

Romer, 517 U.S. at 631.
12

1

Plaintiffs claim that § 7702B(f) violates registered domestic

2

partners' constitutional right to equal protection on the basis of

3

sexual orientation and gender.

4
5
6

Plaintiffs assert, but point to no controlling authority for
the proposition, that classifications on the basis of sexual
orientation are suspect, akin to racial classifications,

7
triggering judicial scrutiny of the highest order.

Federal

8
9

Defendants agree that the Court should hold that sexual

United States District Court
For the Northern District of California

10

orientation is a suspect classification.

Letter from Attorney

11

General, Docket No. 64-2.

12

lesbians have been held not to constitute a suspect or quasi-

13

suspect class.

14

1997) (citing High Tech Gays v. Defense Indus. Sec. Clearance

However, in the Ninth Circuit, gays and

Philips v. Perry, 106 F.3d 1420, 1425 (9th Cir.

15
Office, 895 F.2d 563, 574 (9th Cir. 1990)).

In Witt v. Dept. of

16
the Airforce, 527 F.3d 806, 821 (9th Cir. 2008), a Ninth Circuit
17
18

panel held that Lawrence v. Texas, 539 U.S. 558 (2003), did not

19

disturb the application of rational basis review to an equal

20

protection challenge to a federal policy permitting the discharge

21

of service-members on account of homosexual activity.

22

527 F.3d at 824-25 (J. Canby's opinion concurring and dissenting

23

Cf., Witt,

in part, arguing that because “Lawrence unequivocally overruled

24
Bowers[v. Hardwick, 478 U.S. 186 (1986)], it ‘undercut the theory
25
26

[and] reasoning underlying’ High Tech Gays and Philips ‘in such a

27

way that the cases are clearly irreconcilable,’ under Miller v.

28

Gammie, 335 F.3d 889, 900 (9th Cir. 2003)”) (alteration in
13

1

original).

2

law, decide to change its ruling on the degree of protection to be

3

provided to gays and lesbians as a class, but unless and until it

4

does, this Court must follow its current holdings.

5
6

The Ninth Circuit may, in light of developments in the

Although the Supreme Court has not established that sexual
orientation is a suspect or quasi-suspect class for purposes of

7
the equal protection doctrine, it did hold in Romer that gays and
8
9

lesbians, as a class, are at least protected from burdensome

United States District Court
For the Northern District of California

10

legislation that is the product of sheer anti-gay animus and

11

devoid of any legitimate government purpose.

12

(holding that Colorado's anti-gay ballot measure "defies even

13

[the] conventional inquiry" applied under the rational basis

14

test).

517 U.S. at 632-35

In striking down the ballot measure, the Supreme Court

15
reiterated, "If the constitutional conception of equal protection
16
of the laws means anything, it must at the very least mean that a
17
18

bare desire to harm a politically unpopular group cannot

19

constitute a legitimate governmental interest."

20

(quoting Department of Agriculture v. Moreno, 413 U.S. 528, 534

21

(1973)) (internal quotation marks and alterations omitted).

22

also, Lawrence, 539 U.S. at 577 ("the fact that the governing

23

Id. at 634-35

See

majority in a State has viewed a particular practice as immoral is

24
not a sufficient reason for upholding a law prohibiting the
25
26
27

practice . . .") (quoting Bowers, 478 U.S. at 216 (Stevens, J.,
dissenting)).

Thus, the Supreme Court has held that anti-gay

28
14

1

animus is not a legitimate governmental interest that may serve to

2

justify legislative enactments burdening gays and lesbians.

3

The Court considers next whether the classification in

4

§ 7702B(f) is justified, so as to withstand Plaintiffs’ equal

5

protection challenge.

6

As noted earlier, the rational basis

standard applies where a challenged enactment does not burden a

7
protected class.

Romer, 517 U.S. at 631.

8
9

Under the rational basis test, a law that imposes a

United States District Court
For the Northern District of California

10

classification must be rationally related to the furtherance of a

11

legitimate state interest.

12

strong presumption of validity to legislative enactments.

13

v. Doe, 509 U.S. 312, 319 (1993).

14

for constitutional purposes whether the conceived reason for the

Id.

This standard of review accords a
Heller

"[I]t is entirely irrelevant

15
challenged distinction actually motivated the legislature."

FCC

16
v. Beach Comm., 508 U.S. 307, 313 (1993).

On the other hand, the

17
18

rational basis test is not "toothless."

19

U.S. 181, 185 (1976).

20

case calling for the most deferential of standards, [courts]

21

insist on knowing the relation between the classification adopted

22

and the object to be attained."

23

Mathews v. De Castro, 429

"[E]ven in the ordinary equal protection

Gill, 699 F. Supp. 2d at 387

(quoting Romer, 517 U.S. at 633).

24
Plaintiffs contend that there is no fairly conceivable
25
26

rational relationship between a legitimate government interest and

27

the exclusion of registered domestic partners from subparagraph

28

(C)(iii) of

§ 7702B(f).

Instead, they posit that the enactment
15

1

was based upon animus.

2

held that anti-gay animus is not a legitimate governmental

3

interest that may serve to justify legislative enactments

4

burdening gays and lesbians.

5

Romer, 517 U.S. at 634-35.

6

As noted earlier, the Supreme Court has

See Lawrence, 539 U.S. at 577;

Federal Defendants take the position that § 7702B(f)'s non-

7
inclusion of registered domestic partners is not based on sexual
8
9

orientation.

First, Federal Defendants contend that excluding

United States District Court
For the Northern District of California

10

registered domestic partnerships is not a proxy for sexual-

11

orientation-based discrimination because many states permit

12

heterosexual couples to register as domestic partners.

13

argument is not persuasive.

14

registered domestic partnership is currently the only available

This

In this state and many others,

15
legal status that provides a complement of established rights and
16
obligations for same-sex couples seeking legal recognition of
17
18

their relationships.

19

couples, in which one or both persons are age sixty-two or older,

20

to choose registered domestic partnership over marriage does not

21

diminish the plain reality that same-sex couples are relegated to

22

registered domestic partnerships because legal marriage is

23

prohibited for them.

That California permits different-sex

The availability of registered domestic

24
partnership to different-sex couples does not negate the burdens
25
26

faced by same-sex registered domestic partners.

The laws limiting

27

same-sex couples to registered domestic partnerships, while

28

precluding them from marriage, turn on sexual orientation.
16

1

Federal Defendants also argue that the varying scope of

2

privileges afforded by different state registered domestic

3

partnership laws means that the legal relationship is not a proxy

4

for classification based on sexual orientation.

5

also unavailing.

6

This argument is

The number or type of privileges is irrelevant

when registered domestic partnerships provide the only

7
relationship rights available to same-sex couples.
8
9

Federal Defendants also assert that Plaintiffs cannot show

United States District Court
For the Northern District of California

10

animus because the legislative history of § 7702B(f) is devoid of

11

any statement suggesting a purpose to discriminate against same-

12

sex domestic partners.

13

history for § 7702B(f) illuminating the reasons why Congress chose

14

the eligible relatives contained in subparagraph (C)(iii).

Neither party points to legislative

15
Federal Defendants posit that an impermissible purpose for the
16
exclusion of registered domestic partners is not reasonably
17
18
19

inferred because no state recognized such relationships in 1996.
However, the history delineated above demonstrates that when

20

§ 7702B(f) was adopted in 1996, Congress was aware that a number

21

of localities and entities across the country had recognized and

22

protected same-sex couples by offering registered domestic

23

partnerships.

Indeed, in 1996, the District of Columbia would

24
have had a domestic partnership registry, but for Congress'
25
26

decision to ban all appropriations to implement, enforce or

27

administer the registry.

Antipathy towards same-sex relationships

28

infused successful efforts to block implementation of the
17

1

registered domestic partnership law in the District from 1992 to

2

2001, which included the year that § 7702B(f) was enacted.

3

statements reflecting moral condemnation of gays and lesbians in

4

the course of these deliberations support an inference that the

5

exclusion of domestic partners from the list of family members

6

The

eligible to enroll in federally qualified, state-maintained long-

7
term care plans was motivated by animus.
8
9

Facts beyond the legislative record pertaining directly to

United States District Court
For the Northern District of California

10

§ 7702B(f) are relevant.

This includes the legislative history of

11

provisions that Congress considered contemporaneously with the

12

passage of § 7702B(f).

13

specifically reaching registered domestic partners, concurrently

14

with its denial of funding for the District of Columbia's domestic

Congress' decision to omit a provision

15
partnership registry and its enactment of a federal definition of
16
marriage limited to heterosexual married couples, along with its
17
18

record of animosity towards gays and lesbians, may serve as

19

evidence of animus.

20

(stating, in the context of a race-based, disparate impact claim,

21

that the "historical background of the decision" and the "specific

22

sequence of events leading up to the challenged decision" may shed

23

See Arlington Heights, 429 U.S. at 267

light on the decisionmaker's purposes).

24
Even after the District of Columbia implemented its domestic
25
26

partnership registry and other states adopted their own, Congress,

27

through the Working Families Tax Relief Act of 2004, enacted an

28

amended version of § 7702B(f) without adding registered domestic
18

1

partners or otherwise allowing states to enroll family members who

2

were not expressly identified in subparagraph (C)(iii).

3

Defendants attempt to diminish the legislation as a "technical

4

amendment," but the Act established substantive law that, among

5

other things, provided relief from the "marriage penalty" in

6

Federal

certain tax brackets and repealed scheduled reductions in the

7
child tax credit.

Pub. L. No. 108-311.

8
9

Next, Federal Defendants assert that § 7702B(f) does not

United States District Court
For the Northern District of California

10

impermissibly discriminate against same-sex registered domestic

11

partners because other relatives, such as cousins, and individuals

12

who share a close, dependent, family-like relationship are omitted

13

for reasons unrelated to sexual orientation.

14

relevant comparison is between § 7702B(f)’s treatment of

However, the

15
registered domestic partners and its treatment of spouses.
16
Congress' record indicates that it saw registered domestic
17
18

partnership as a marriage-like status.

19

relatives and other household members from the list of family

20

members eligible for enrollment does not preclude a finding that

21

§ 7702B(f) imposes a discriminatory classification.

22
23

The omission of distant

Federal Defendants contend that there is a rational basis for
§ 7702B(f)'s exclusion of domestic partners because the limitation

24
allows for the evolution of state domestic partnership laws.

This

25
26

argument is not persuasive.

Section 7702B(f) provides favorable

27

federal tax treatment for long-term care plans maintained and

28

administered by states.

The provision does not have any bearing
19

1

on how state domestic partnership laws evolve, one way or another.

2

By allowing federally qualified, state-maintained long-term care

3

plans to enroll only certain categories of family members,

4

§ 7702B(f) simply withholds favorable tax treatment to domestic

5

partners that a state otherwise recognizes.

6

Federal Defendants contend that it was rational to decline to

7
carry over subparagraph (H) of § 152(d)(2) to subparagraph
8
9

(C)(iii) of § 7702B(f)(2), because (A) through (G) would reach an

United States District Court
For the Northern District of California

10

adequate number of family members.

Federal Defendants assert that

11

the list of relatives identified in section 152(d)(2)(A)-(G)

12

reasonably served the policy goal of encouraging individuals to

13

participate in a state long-term care insurance plan, and

14

ineligible family members, including registered domestic partners,

15
could secure long-term care insurance from other sources.

The

16
fact that these private plans would enjoy the same tax benefits
17
18

under § 7702B(f) as state-maintained plans does not explain the

19

decision to exclude a particular group of family members from

20

state-maintained plans.

21
22
23

Federal Defendants assert that the eligibility limitation
could be justified as a rational effort to assure that the
eligibility of individuals seeking enrollment in a state-

24
maintained plan could be easily verified.

According to Federal

25
26

Defendants, the catch-all provision of subparagraph (H), which

27

includes an individual living with the taxpayer as a member of the

28

household during a given tax year, describes a relationship that
20

1

may change from year to year.

2

be credited because the eligibility of spouses, step-relatives and

3

relatives-in-law, which depends on the existence of a marital

4

relationship, may likewise change from one year to the next.

5

Marital relationships lack any minimum time commitment.

6

This justification, however, cannot

Thus, the

exclusion of subparagraph (H) does not rationally relate to

7
efforts to ease administration of state-maintained long-term care
8
9

plans.

See Moreno, 413 U.S. at 537-38 (holding that a provision

United States District Court
For the Northern District of California

10

that limited eligibility for food stamps to households with

11

"related" rather than "non-related" individuals was not rationally

12

connected to efforts to curb abuse of the program).

13

Circuit recently declined to credit the argument that a state law

14

eliminating health care benefits for domestic partners served the

The Ninth

15
interest of easing administrative burdens where the challenged law
16
amounted to "the selective application of legislation to a small
17
18

group."

19

(affirming, in the context of a motion for preliminary injunction,

20

the district court's finding that the plaintiff same-sex domestic

21

partners were likely to succeed on their equal protection claim

22

under the rational basis test).

23

Diaz v. Brewer, 656 F.3d 1008, 1014 (9th Cir. 2011)

Federal Defendants' argument that the list of eligible family

24
members was adequate to further the policy goals of § 7702B(f)
25
26

suggests that the enactment was a rational decision to limit the

27

subsidy provided by the law.

It is conceivable that an

28

incremental amount of tax revenue might be gained by not including
21

1

registered domestic partners in subparagraph (C)(iii) of

2

§ 7702B(f)(2).

3

Doe, 457 U.S. 202, 227 (1982), and Rinaldi v. Yeager, 384 U.S.

4

305, 308-09 (1966), a law cannot satisfy the rational basis

5

standard of review based on a mere cost-saving rationale.

6

However, in light of the reasoning in Plyler v.

In Plyler, the Supreme Court considered the constitutionality

7
of a state statute that withheld state funds for the education of
8
9

undocumented children and authorized local school districts to

United States District Court
For the Northern District of California

10

deny enrollment in their public schools to children not “legally

11

admitted” to the country.

12

persons did not constitute a suspect class and the right to

13

education did not comprise a fundamental liberty interest.

14

223.

The Court held that undocumented

Id. at

Accordingly, the Court declined to apply the strict scrutiny

15
standard of review to the statute, and instead considered whether
16
the statute rationally furthered some substantial state interest.
17
18

Id. at 224.

19

furthered the “preservation of the state’s limited resources for

20

the education of its lawful residents,” the Court responded that

21

“a concern for the preservation of resources standing alone can

22

hardly justify the classification used in allocating those

23

To the state's assertion that the challenged law

resources . . . [The state] must do more than justify its

24
classification with a concise expression of an intention to
25
26

discriminate."

Id. at 227 (internal citation omitted).

The

27

exclusion of the particular group, even if the group does not

28

constitute a protected class, must be justified.
22

Id. at 229

1

(“[T]he State must support its selection of this group as the

2

appropriate target for exclusion.”) (emphasis in original).

3

Because the Court did not discern a conceivable, sufficient

4

justification for excluding undocumented children, it invalidated

5

the law.

6

Similarly, in Rinaldi, 384 U.S. at 308-09, the Court stated

7
that equal protection "imposes a requirement of some rationality
8
9

in the nature of the class singled out."

There the Court struck

United States District Court
For the Northern District of California

10

down, on equal protection grounds, a state statute that required

11

indigent prisoners to reimburse the cost of a transcript in the

12

event of an unsuccessful appeal, but did not impose the same

13

obligation on indigents who received a suspended sentence, were

14

placed on probation or were fined.

The Court assumed that

15
replenishing a county treasury by seeking reimbursement from those
16
who had directly benefited from its expenditures could serve as a
17
18

legitimate basis for enacting the law.

19

applying the rational basis test, the Court noted that the law

20

"fasten[ed] a financial burden only upon those unsuccessful

21

appellants who are confined in state institutions," while those

22

appellants who had been given a lesser sanction had received the

23

Id. at 309.

However, in

same benefit from the county--a transcript used in an unsuccessful

24
appeal.

Id.

The factor distinguishing the groups was the nature

25
26

of the penalty attached to the offense committed.

The Court found

27

the distinction arbitrary because it did not bear "some relevance

28

to the purpose for which the classification [was] made."
23

Id.

1

Under the reasoning in Plyler and Rinaldi, Federal Defendants

2

must show that justifying the exclusion of registered domestic

3

partners for the purpose of meeting federal fiscal objectives did

4

not single out same-sex couples for arbitrary or impermissible

5

reasons.

6

Here, as noted above, the distinction between spouses

and registered domestic partners turns on sexual orientation, a

7
factor that bears no relevance to the purpose for which § 7702B(f)
8
9

was enacted, that is, to incentivize the purchase of long-term

United States District Court
For the Northern District of California

10

care insurance to improve the financial security of families

11

throughout the country.

12

indicated that the cost-saving rationale may not succeed where the

13

amount of savings rendered by excluding same-sex domestic partners

14

is minimal.

Moreover, the Ninth Circuit in Diaz

656 F.3d at 1012-14 (noting evidence that the state

15
spent a minimal amount on domestic partners' benefits).

It bears

16
repeating that Plaintiffs have provided legislative history
17
18

indicating that the distinction was actually motivated by anti-gay

19

animus.

20

In sum, Federal Defendants have failed to show a plausible,

21

legitimate rationale for excluding registered domestic partners

22

from § 7702B(f)(2)(C)(iii)'s list of eligible family members, and

23

the Court can think of none.

Plaintiffs have pointed to a record

24
of animus that could explain the exclusion.

None of the cases

25
26

upon which Federal Defendants rely establishes that the rational

27

basis test is satisfied where a challenged provision serves no

28

legitimate government interest and the enactment is tainted by
24

1

animus against a politically unpopular group.

2

Plaintiffs' allegations on behalf of registered domestic partners

3

are sufficient to state an equal protection claim under the

4

rational basis test.

5
6

Therefore,

On the other hand, the sex discrimination basis of
Plaintiffs' equal protection claim fails because the allegations

7
do not evidence purposeful invidious discrimination on the basis
8
9

of sex.

Feeney, 442 U.S. at 274.

The Congressional record cited

United States District Court
For the Northern District of California

10

by Plaintiffs demonstrates animus directed towards same-sex

11

couples, not men or women.

12

their allegations, if proven, would establish an equal protection

13

violation based on sex discrimination.

14

II. Substantive Due Process

Plaintiffs have not demonstrated how

15
Arguing that family autonomy and decisionmaking are protected
16
liberty interests, Plaintiffs claim that § 7702B(f) violates their
17
18

substantive due process rights by penalizing their exercise of

19

such rights without a permissible basis.

20

substantive due process, when the government infringes a

21

"fundamental liberty interest," the strict scrutiny test applies,

22

and the law will not survive constitutional muster "unless the

23

Under the doctrine of

infringement is narrowly tailored to serve a compelling state

24
interest."

William v. Glucksberg, 521 U.S. 702, 721 (1997).

25
26

Assuming that family autonomy and decisionmaking do amount to a

27

constitutionally protected, fundamental right, § 7702B(f) creates

28

no more than an incidental economic burden on those interests.
25

1

Accordingly, the law does not trigger strict judicial scrutiny.

2

See Lyng v. Auto Workers, 485 U.S. 360, 370 (1988) ("Because the

3

statute challenged here has no substantial impact on any

4

fundamental interest . . . we confine our consideration to whether

5

the statutory classification 'is rationally related to a

6

legitimate governmental interest.'").

7
In Lyng, the challenged provision prevented a family that was
8
9

already on food stamps from receiving an increased allotment if a

United States District Court
For the Northern District of California

10

family member stopped working due to a strike.

The provision also

11

barred families from becoming eligible for food stamps if their

12

eligibility arose because a household member stopped working as

13

part of a labor strike.

14

interfere with familial living arrangements because it was

The Court found that the law did not

15
"exceedingly unlikely" that the restriction would prevent a family
16
from "dining together" or compel a striking member to leave the
17
18

household in order to increase the household allotment of food

19

stamps.

20

"directly and substantially" interfere with family living

21

arrangements.

22
23

Id. at 365.

The Court reasoned that the law did not

Id. at 365-66.

In Regan v. Taxation with Representation of Washington, 461
U.S. 540, 549 (1983), the plaintiff challenged a tax provision

24
that contributions to lobbying efforts were not tax deductible,
25
26

while charitable contributions were.

The Court held that the

27

legislature is not required to subsidize the exercise of a

28

fundamental right.

The Court cited cases upholding the denial of
26

1

subsidies for candidates in certain public elections, and the

2

denial of subsidies to pay for abortions.

3

Court declined to subject the provision to strict scrutiny review.

4
5
6

Id.

Accordingly, the

Plaintiffs rely on Cleveland Board of Education v. La Fleur,
414 U.S. 632, 639 (1974), which invalidated, on substantive due
process grounds, an employer's policy which set arbitrary cutoff

7
dates for when pregnant teachers were required to take leave and
8
9

could return to work.

The Court found that the mandatory leave

United States District Court
For the Northern District of California

10

policy penalized pregnant teachers for their decisions related to

11

family creation, namely the decision to bear a child.

12

However, La Fleur is less analogous to the present claim than

13

Regan and Lyng because the law challenged in La Fleur was a more

14

significant intrusion, in that the pregnant teachers could not

Id. at 648.

15
work during the mandatory leave period.
16
Likewise, Speiser v. Randall, 357 U.S. 513 (1958), is
17
18

inapposite.

19

who sought to take advantage of a property tax exemption to sign a

20

declaration stating that they did not advocate the forcible

21

overthrow of the Government of the United States.

22

Court stated, "To deny an exemption to claimants who engage in

23

There the Court struck down a law requiring persons

The Speiser

speech is in effect to penalize them for the same speech."

Id. at

24
518.

The Court reasoned that the challenged law necessarily had

25
26
27

"the effect of coercing the claimants to refrain from the
proscribed speech."

Id. at 519.

Here, however, Plaintiffs cannot

28
27

1

plausibly allege that § 7702B(f) has coerced same-sex couples to

2

forgo engaging in same-sex relationships.

3

Lyng and Regan preclude the application of strict scrutiny in

4

deciding the domestic partner Plaintiffs' substantive due process

5

claim.

6

However, where strict scrutiny does not apply, courts

weigh a substantive due process challenge under the rational basis

7
standard.

See Glucksberg, 521 U.S. at 728 (applying the rational

8
9

basis test to a law banning assisted-suicide because it was held

United States District Court
For the Northern District of California

10

not to infringe on a fundamental liberty interest protected by the

11

Due Process Clause).

12

Court's equal protection analysis, Plaintiffs have alleged

13

sufficiently that the exclusion of registered domestic partners

14

from subparagraph (C)(iii) of § 7702B(f)(2) fails constitutional

For the reasons explained earlier in the

15
standards, even under the rational basis test.

Accordingly,

16
Federal Defendants' motion to dismiss Plaintiffs' substantive due
17
18

process claim on behalf of registered domestic partners is denied.

19

//

20

//

21

//

22

//

23

//

24
//
25
26
27

//
//

28
28

CONCLUSION

1
2

Plaintiffs have stated a viable constitutional challenge to

3

§ 7702B(f) under the doctrines of equal protection and substantive

4

due process.

5

first and second claim in Plaintiffs' Second Amended Complaint to

6

Thus, Federal Defendants' motion to dismiss the

the extent they are brought by registered domestic partners is

7
DENIED.
8
9

IT IS SO ORDERED.

United States District Court
For the Northern District of California

10
11
12

Dated: 1/26/2012

CLAUDIA WILKEN
United States District Judge

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