T.S. v. HEART OF CARDON, LLC et al
ENTRY ON DEFENDANTS' MOTION FOR RECONSIDERATION OR TO CERTIFY FOR INTERLOCUTORY APPEAL. This matter is before the Court on a Motion to Reconsider the Court's Entry on the Motion for Judgment on the Pleadings Regarding Count III or in the Alternative Motion to Certify Standing Issue for Interlocutory Appeal, filed by Defendants Heart of CarDon, LLC and Heart of CarDon, LLC Employee Benefit Plan (collectively, "Defendants") (Filing No. 53 ). Defendants ask the Court to rec onsider its denial of their Motion for Judgment on the Pleadings regarding Count III of the Amended Complaint and to find in their favor. Alternatively, if the Court denies the Motion to Reconsider or clarifies its decision and expressly rules a gainst the Defendants' standing argument, Defendants request that the Court certify the standing issue for interlocutory appeal. The Court DENIES Defendants' Motion for Reconsideration but GRANTS its alternative Motion to Certify for Inte rlocutory Appeal (Filing No. 53 ). Defendants may proceed to seek interlocutory appeal pursuant to Federal Rule of Appellate Procedure 5 regarding whether T.S. has "standing" to bring his claim pursuant to Sections 1557 and 504 (see Filing No. 31 at 5-6). (See Entry for Additional Information). Signed by Judge Tanya Walton Pratt on 7/14/2021. (AKH)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
T.S. by and through his parents and guardians,
T.M.S. and M.S., individually and derivatively on
behalf of the Heart of CarDon, LLC Employee
HEART OF CARDON, LLC, and
HEART OF CARDON, LLC EMPLOYEE
Case No. 1:20-cv-01699-TWP-MG
ENTRY ON DEFENDANTS' MOTION FOR RECONSIDERATION
OR TO CERTIFY FOR INTERLOCUTORY APPEAL
This matter is before the Court on a Motion to Reconsider the Court's Entry on the Motion
for Judgment on the Pleadings Regarding Count III or in the Alternative Motion to Certify
Standing Issue for Interlocutory Appeal, filed by Defendants Heart of CarDon, LLC ("CarDon")
and Heart of CarDon, LLC Employee Benefit Plan (the "Plan") (collectively, "Defendants") (Filing
No. 53). Defendants ask the Court to reconsider its denial of their Motion for Judgment on the
Pleadings regarding Count III of the Amended Complaint and to find in their favor. Alternatively,
if the Court denies the Motion to Reconsider or clarifies its decision and expressly rules against
the Defendants’ standing argument, Defendants request that the Court certify the standing issue
for interlocutory appeal. For the following reasons, the Court denies Defendants' request to
reconsider, but grants their request to certify the standing issue for interlocutory appeal.
The facts of this case are set forth in detail in the March 16, 2021 Entry on Defendants'
Motions for Judgment on the Pleadings (Filing No. 50 at 2–3) and are repeated in this Order.
Four-year-old T.S.'s healthcare coverage is provided through his parent T.M.S.'s
employment with CarDon (Filing No. 31 at 3). In September 2018, T.S. was diagnosed with
autism spectrum disorders. The diagnosing physician recommended that T.S. receive applied
behavior analysis therapy to help him "achieve developmental advances and maintain his gross
and fine motor and speech and communication skills." Id. at 6–7. Following pre-authorization for
six months of services by the Plan's previous third-party administrator, T.S began receiving applied
behavior analysis therapy in December 2018. Id. at 7. The next month, January 2019, the Plan's
third-party administrator changed to Cypress Benefit Administrators LLC ("Cypress"). Id. at 8.
In March 2019, Cypress sent an Explanation of Benefits ("EOB") letter denying coverage
for T.S.'s applied behavior analysis therapy. Id. at 8. After initially explaining that the services
were denied because an "'insurance update [was] needed from [the] member,'" Cypress issued a
new EOB in June 2019 instructing that "'No benefits allowed for this service/diagnosis. See the
General Exclusions under your plan." Id. (quoting Filing No. 31-1 at 21, 32). In a subsection titled
"Behavioral Health" under the "Exclusions" section—which is separate from the "General
Exclusions" section referenced in the June EOB letter (see Filing No. 31-1 at 79–81)—the Plan
excludes "'Charges for services, supplies, or treatment for Autism, Asperger's and Pervasive
Developmental Disorders' and 'Charges for Applied Behavior Analysis (ABA Therapy).'" (Filing
No. 31 at 8 (quoting Filing No. 31-1 at 139).) The Plan, however, "covers various medical/surgical
services to treat autism spectrum disorder, including development delay and autism spectrum
disorder screening/diagnostic services, prescription drugs [including Risperdal and Abilify], and
pediatric visits." Id. at 9.
In August 2019, T.S.'s mother, pursuant to the terms of the Plan, appealed the denial of
services to Cypress. Id. A March 31, 2020 letter confirmed that the claims were correctly denied
because "the diagnosis [Autism Spectrum Disorder] is not covered." Id.; Filing No. 31-2 at 4–5.
For that entire period—from February 2019 to March 2020—T.S. did not receive applied behavior
analysis therapy (Filing No. 31 at 9). T.S.'s parents then filed the instant action on behalf of T.S.,
and Defendants moved for judgment on the pleadings on all three counts in two filings (Filing No.
22; Filing No. 36).
In the March 16, 2021 Entry, the Court granted Defendants' Motion for Judgment on the
Pleadings on T.S.'s ERISA and Parity Act claims, (Filing No. 22), and Counts I and II of the
Amended Complaint were dismissed with prejudice. (see Filing No. 50 at 19). However, the Court
denied judgment on the pleadings with respect to Count III, (Filing No. 36), T.S.'s Affordable Care
Act ("ACA") and Rehabilitation Act claim. Specifically, the Court determined the Defendants
unlawfully discriminated against T.S. and others under the Affordable Care Act by excluding
benefits for health care related to autism spectrum disorder, Asperger's, and pervasive
developmental disorders, and for Applied Behavior Analysis Therapy specifically." See id. at 12–
13, 16–19 (quotations omitted). In short, the Court held that "[b]ecause 'all of' CarDon's operations
are covered by Section 504 . . . , T.S.'s claim under Section  of the Affordable Care Act can,
at this stage in the litigation, proceed" because "all of" CarDon's operations are covered by Section
504 of the Rehabilitation Act ("Section 504")1 (see Filing No. 50 at 18–19). Defendants seek
reconsideration of the ruling or in the alternative, request that the Court certify the standing issue
for interlocutory appeal.
Section 18116(a) of Title 42 (i.e., "Section 1557" of the ACA) provides that "an individual shall not, on the ground
prohibited under . . . section 794 of Title 29 [i.e., "Section 504" of the Rehabilitation Act], be excluded from
participation in, denied the benefits of, or be subjected to discrimination under, any health program or activity, any
part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance." Section
1557 goes on to instruct that "the enforcement mechanisms provided for and available under" Section 504 "shall apply
for purposes of violations of this subsection." 42 U.S.C. § 18116(a). Section 504, in turn, provides that no "individual
with a disability" shall "be excluded from the participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal financial assistance." 29 U.S.C. § 794(a).
In its Motion for Judgment on the Pleadings on Count III, CarDon argued that T.S. is an
improper plaintiff and lacks standing to bring a Section 1557 claim against it because T.S. is not a
beneficiary or intended beneficiary of the federal funds CarDon receives as a health care provider.
Defendants contend that "the Court accurately summarized CarDon’s argument on this point in its
Entry concerning Counts I and II, " but then "analyzed a different" contention than the one they
presented with respect to Count III, namely that "T.S. is an improper plaintiff and lacks standing
to bring a Section 1557 claim against CarDon." (Filing No. 54 at 1–2.) The Court will first address
the Defendants' request for reconsideration before turning to their request for an interlocutory
Because no final judgment has been entered in this case, Defendants have properly
classified this as a motion to reconsider under Federal Rule of Civil Procedure 54(b). See Fed. R.
Civ. P. 54(b) ("[A]ny order or other decision, however designated, that adjudicates fewer than all
the claims or the rights and liabilities of fewer than all the parties does not end the action as to any
of the claims or parties and may be revised at any time before the entry of a judgment adjudicating
all the claims and all the parties' rights and liabilities."). The Court applies a similar standard as
applied to motions to alter or amend a judgment under Rule 59(e). Motions to reconsider filed
pursuant to Rule 54(b) or Rule 59(e) are for the purpose of correcting manifest errors of law or
fact or to present newly discovered evidence not available at the time of briefing, and a motion to
reconsider an order under Rule 54(b) is judged by largely the same standard as a motion to alter
or amend a judgment under Rule 59(e). Katz-Crank v. Haskett, No. 1:13-cv-159-TWP-DML, 2014
WL 3507298, at *2 (S.D. Ind. July 14, 2014); Woods v. Resnick, 725 F. Supp. 2d 809, 827–28
(W.D. Wis. 2010).
Motions to reconsider "serve a limited function: to correct manifest errors of law or fact or
to present newly discovered evidence." State Farm Fire & Cas. Co. v. Nokes, 263 F.R.D. 518,
526 (N.D. Ind. 2009). The motion is to be used "where the Court has patently misunderstood a
party, or has made a decision outside the adversarial issues presented to the Court by the parties,
or has made an error not of reasoning but of apprehension." Bank of Waunakee v. Rochester Cheese
Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (citation omitted). A motion to reconsider under
Rule 54(b) also may be appropriate where there has been "a controlling or significant change in
the law or facts since the submission of the issue to the Court." Id. (citation omitted).
The purpose of a motion for reconsideration is to ask the Court to reconsider matters
"properly encompassed in a decision on the merits." Osterneck v. Ernst & Whinney, 489 U.S. 169,
174 (1989). The motion "will be successful only where the movant clearly establishes: (1) that the
court committed a manifest error of law or fact, or (2) that newly discovered evidence precluded
entry of judgment." Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 954 (7th Cir. 2013) (citation
and quotation marks omitted). A manifest error "is not demonstrated by the disappointment of the
losing party. It is the wholesale disregard, misapplication, or failure to recognize controlling
precedent." Oto v. Metropolitan Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000) (citation and
quotation marks omitted).
"Reconsideration is not an appropriate forum for rehashing previously rejected arguments
or arguing matters that could have been heard during the pendency of the previous motion." Ahmed
v. Ashcroft, 388 F.3d 247, 249 (7th Cir. 2004) (citation and quotation marks omitted). Relief
pursuant to a motion to reconsider is an "extraordinary remed[y] reserved for the exceptional case."
Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir. 2008).
In the brief supporting their Motion for Reconsideration, Defendants explain that "whether
CarDon is a proper defendant based on the federal funding it receives is not the legal question
[they] intended to raise." (Filing No. 54 at 4.) Defendants contend that in error or misapprehension,
"the Court focused its analysis on whether CarDon is a proper defendant rather than on whether
T.S. is a proper plaintiff." Id. In response, T.S. argues that the "Court could hardly have
misunderstood arguments it summarized correctly in its Entry, using the very language Defendants
now use to 'clarify' their position." (Filing No. 59 at 10.) Moreover, "Defendants' motion does no
more than repeat the argument that Section 1557 claims are limited to intended beneficiaries of
federal funds because Section 1557 incorporates the 'enforcement mechanisms' of Section 504 and
Section 504 is based on Title VI." Id. at 11. T.S. asserts that “Section 504 does not require a
plaintiff to be an ‘intended beneficiary’ of the federal funds” and that CarDon does “not point to a
single case decided after , which holds that a plaintiff must be an intended beneficiary of
the federal assistance to allege disability discrimination under Section 504.” (Filing No. 59 at 6-7,
In reply, Defendants maintain that there remains "a genuine legal dispute that the Court
has not addressed." (Filing No. 60 at 2.) "Respectfully," Defendants continue, "the Court did not
address CarDon's standing argument," and Simpson v. Reynolds Metals Co., 629 F.2d 1226, 1235
(7th Cir. 1980)—a case discussed at length below—"is hardly irrelevant post-1988 and has
consistently been utilized to consider the issue of proper standing." Id. at 3. Defendants argue,
"the aspect of the law that changed after Simpson does not relate to the standing question." Id. at
4. This is where Defendants are critically mistaken. To explain how, the Court—to clarify its
earlier Entry for Defendants (see Filing No. 50)—must canvass the progression of the law
concerning the scope of Section 504 and, as necessary, Title VI of the Civil Rights Act of 1964
When passed by Congress in 1973, Section 504 provided that no "handicapped individual
… shall, solely by reason of his handicap, be excluded from the participation in, be denied the
benefits of, or be subjected to discrimination under any program or activity receiving Federal
financial assistance." Rehabilitation Act of 1973, Pub. L. No. 93-112, § 504, 87 Stat. 355, 394
(emphasis added). Seven years later, the Seventh Circuit confronted the scope of this statute's
undefined "program or activity" phrase when it held that a discharged employee—who,
importantly, had not been excluded from participation in or denied benefits under any program or
activity that specifically received federal financial assistance—lacked "standing" to bring a claim
under Section 504. Simpson, 629 F.2d 1226. In foreclosing standing, the Court reasoned that
Section 504 (as it stood in 1980) did not
generally forbid discrimination against the handicapped by recipients of federal
assistance. Instead, its terms apparently require that the discrimination must have
some direct or indirect effect on the handicapped persons in the program or activity
receiving federal financial assistance. To be actionable, the discrimination must
come in the operation of the program or manifest itself in a handicapped individual's
exclusion from the program or a diminution of the benefits he would otherwise
receive from the program.
Id. at 1232 (emphases added). In other words, as has become the canonical phrasing in this Circuit,
"private recovery under [Section] 504 is restricted to intended beneficiaries of a federal program."
Id. at 1235 (emphasis added). This outcome flowed from the necessary judicial defining (hence,
"apparently") of "program or activity" as used in Section 504, with the Simpson court ultimately
determining "that Congress did not intend to extend protection under Title VI [and thus the almostcarbon-copied Section 504] to any person other than an intended beneficiary of federal financial
assistance." Id. Notably, the Simpson court—in its narrow definition of the phrase—rejected the
argument that "federal assistance to one part of an employer's business thereby brings the entire
business under the coverage of [Section] 504." Id. at 1236. Thus, determining whether an
individual was an "improper plaintiff" because he was not an "intended beneficiary" of federal
funds necessarily required examining whether an entity was a "proper defendant" based on its
receipt of those federal funds. In 1986, the Seventh Circuit recommitted to this rationale,
reaffirming "that in order to bring a private action under Title VI the plaintiff must be the intended
beneficiary of, an applicant for, or a participant in a federally funded program." Doe on Behalf of
Doe v. St. Joseph's Hosp. of Fort Wayne, 788 F.2d 411, 418–19 (7th Cir. 1986), overruled on other
grounds by Alexander v. Rush N. Shore Med. Ctr., 101 F.3d 487 (7th Cir. 1996) (cleaned up)
Meanwhile, in 1984, the United States Supreme Court held that the receipt of federal grants
by some of a college's students did not trigger institution-wide coverage under Title IX, which
contained a similar "program or activity" provision to Section 504 and Title VI. Grove City Coll.
v. Bell, 465 U.S. 555 (1984). The Supreme Court—tracking the reasoning of the Seventh Circuit
in Simpson—held that widespread coverage was not prompted because the federal grants
represented financial assistance to only the college's financial aid program, so that was the sole
"program or activity" that could be regulated under Title IX's nondiscrimination provision. Id. at
574–75. In other words, the Supreme Court rejected the conclusion that an institution "itself is a
'program or activity' that may be regulated in its entirety" under Title IX. Id. at 570–71. That
same day, the Supreme Court applied this understanding to Section 504's coverage of a "program
of activity receiving Federal financial assistance": "Clearly, this language limits the ban on
discrimination to the specific program that receives federal funds." Consol. Rail Corp. v. Darrone,
465 U.S. 624, 635–36 (1984) (emphasis added).
But in 1988, Congress—over President Ronald Reagan's veto—passed the Civil Rights
Restoration Act of 1987 (the "CRRA") to vindicate the scope of protection following these
holdings. Specifically, the CRRA provided that:
The Congress finds that(1) certain aspects of recent decisions and opinions of the Supreme Court have
unduly narrowed or cast doubt upon the broad application of title IX of the
Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973, the
Age Discrimination Act of 1975, and title VI of the Civil Rights Act of 1964; and
(2) legislative action is necessary to restore the prior consistent and long-standing
executive branch interpretation and broad, institution-wide application of those
laws as previously administered.
Civil Rights Restoration Act of 1987, Pub. L. No. 100-259 § 2, 102 Stat. 28, 28 (1988). Relevant
here, the CRRA clarified that a "program or activity" under both Section 504 and Title VI
encompassed "all of the operations of . . . an entire corporation, partnership, or other private
organization . . . which is principally engaged in the business of providing . . . health care . . . any
part of which is extended Federal financial assistance." Id. § 4, 102 Stat. at 29–30 (codified at 29
U.S.C. § 794(b)(3)(A)(ii)) (Section 504); Id. § 6, 102 Stat. at 31 (codified at 42 U.S.C. § 2000d4a(3)(A)(ii)) (Title VI) (emphases added).2 As the Supreme Court later acknowledged, in "seeking
to correct what it considered to be an unacceptable decision on our part in Grove City," "Congress
The Court's earlier Entry stated that "[t]hough Title VI and Section 504 may have placed parallel requirements on a
plaintiff at one point, the two diverged—at least as far as this Entry is concerned—following the latter's 1988
amendment." (Filing No. 50 at 17.) That Entry did not deeply examine the CRRA's effect on Title VI. It is evident,
however, that this act identically amended the pertinent language of both statutes. Accordingly, any discussion of the
applicability of Simpson (or Doe on Behalf of Doe) to Section 504 claims is equally relevant to Title VI claims.
broadened the coverage of these antidiscrimination provisions" through the CRRA. Franklin v.
Gwinnett Cty. Pub. Sch., 503 U.S. 60, 73 (1992).3
The CRRA, then, statutorily dismantled the foundation undergirding the Simpson court's
holding that a Section 504 (or Title VI) plaintiff must be an "intended beneficiary" of the federal
financial assistance received: "that the discrimination must have some direct or indirect effect on
the handicapped persons in the program or activity receiving federal financial assistance." 629
F.2d at 1232 (emphasis added). In other words, because the narrow interpretation of "program or
activity" drove the Seventh Circuit's "intended beneficiary" holding, Simpson's rationale no longer
rings consonant with the post-CRRA Section 504 (or, again, Title VI), which made clear that the
scope encompassed "all of the operations of" certain covered entities, "any part of which is
extended Federal financial assistance." 29 U.S.C. § 794(b)(3)(A)(ii); 42 U.S.C. § 2000d4a(3)(A)(ii)).
To be sure, district courts in this Circuit continue to cite Simpson's "intended beneficiary,"
or "nexus," holding as binding precedent, in both Section 504 and Title VI contexts. A sister court,
for example, instructed that, "[i]n the case of Section 504, determining whether standing has been
met falls to a determination of whether or not the Plaintiff in question is one of the intended
[beneficiaries] of the federal financial assistance in question." Blazquez v. Bd. of Educ. of City of
Chicago, No. 05-CV-4389, 2006 WL 3320538, at *4 (N.D. Ill. Nov. 14, 2006) (quotation of
Simpson omitted); see also Doe v. City of Chicago, 883 F. Supp. 1126, 1134–35 (N.D. Ill. 1994)
Though Justice White indicated that Congress "broadened" the scope of the provisions, during the floor debate to
override the "first veto of a civil rights act since President Andrew Johnson vetoed the Civil Rights Act of 1866,"
Senator Robert Packwood of Oregon stated that "all we have done is change the law back to what we thought it was.
We have not expanded it beyond what we thought it was. We have not attempted to add any new obligations beyond
what we thought existed. There was never a more status quo bill." 134 Cong. Rec. S2730-02, 1988 WL 1085029.
Senator Robert Stafford of Vermont, an original sponsor of Section 504, noted that "the intent of these measures has
been lost by the court ruled 'program-specific' rather than 'institution-wide' definition originally intended by
(explaining that "to state a claim under Section 504, plaintiff must allege . . . that plaintiff is an
intended beneficiary of the federal assistance") (citing Simpson). And district courts in this Circuit
have even more recently (and consistently) noted that "[t]o bring a private action under Title VI,
the plaintiff must be the intended beneficiary of, an applicant for, or a participant in a federally
funded program." Rosas v. Bd. of Educ. of the City of Chicago, No. 19-CV-2778, 2021 WL
1962397, at *11 (N.D. Ill. May 17, 2021) (quotation of Simpson omitted); Cieslik v. Bd. of
Education of City of Chicago, No. 1:19-CV-05553, 2021 WL 1172575, at *2 (N.D. Ill. Mar. 29,
2021) ("[A] private cause of action can be brought [under Title VI] only by the 'intended
beneficiary' of the financial assistance.") (citing Simpson); Veljkovic v. Bd. of Educ. of City of
Chicago, No. 20 C 1551, 2020 WL 7626735, at *4 (N.D. Ill. Dec. 22, 2020) ("[T]o bring a private
action under Title VI the plaintiff must be the intended beneficiary of, an applicant for, or a
participant in a federally funded program.") (quotations of Doe on Behalf of Doe and Simpson
omitted); Shebley v. United Cont'l Holdings, Inc., No. 17-CV-01906, 2020 WL 2836796, at *6
(N.D. Ill. May 31, 2020) ("Under the well-established law of this Circuit, the Shebleys lack
standing to sue under Title VI unless they are intended beneficiaries of federal financial assistance
provided to a program or activity.") (citing Doe on Behalf of Doe and Simpson).
As this continued reliance on the forty-one-year-old Simpson demonstrates, the Seventh
Circuit has not expressly revisited the doctrine since deciding the case in 1980 (and reaffirming it
in the Title VI context in Doe on Behalf of Doe in 1986)—years before passage of the CRRA. Cf.
Schroeder v. City of Chicago, 927 F.2d 957, 962 (7th Cir. 1991) (briefly noting, without
mentioning Simpson or Doe on Behalf of Doe, that "'program or activity' was expanded from a
specific program or specific activity to 'all the operations' of [an entity] that conducted the program
or activity"). While Defendants correctly note that "'district courts in this Circuit have consistently
applied . . . Simpson' for four decades," (Filing No. 60 at 3 (citing Shebley, 2020 WL 2836796, at
*6)),the Seventh Circuit has also held
[W]e give considerable weight to prior decisions of this court unless and until they
have been overruled or undermined by the decisions of a higher court, or other
supervening developments, such as a statutory overruling. However, we are
cognizant of the fact that we are not absolutely bound by them, and must give fair
consideration to any substantial argument that a litigant makes for overruling a
United States v. Reyes-Hernandez, 624 F.3d 405, 412 (7th Cir. 2010) (quoting Haas v.
Abrahamson, 910 F.2d 384, 393 (7th Cir. 1990)).
As described above, Congress, through passing the CRRA over a veto, clarified the wide
scope of "a program or activity" under Section 504 and Title VI.
In cases where statutory precedents have been overruled, the primary reason for the
Court's shift in position has been the intervening development of the law, through
either the growth of judicial doctrine or further action taken by Congress. Where
such changes have removed or weakened the conceptual underpinnings from the
prior decision, . . . the Court has not hesitated to overrule an earlier decision.
Patterson v. McLean Credit Union, 491 U.S. 164, 173 (1989) (citing Rodriguez de Quijas v.
Shearson/American Express, Inc., 490 U.S. 477, 480–481 (1989)) (emphasis added); see generally
Frank Sullivan, Jr., "What I've Learned About Judging", 48 Val. U. L. Rev. 195, 200–203 (2013)
(explaining how "Judging Is Often a Dance with the Legislature").
While Defendants' Motions (and some district court decisions) understand Simpson's
holding to address whether plaintiffs have "standing" to assert Section 504 claims, the United
States Supreme Court has moved away from using "standing" terminology to describe the reach
of statutory causes of action. See Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S.
118, 127 (2014) ("'[P]rudential standing' is a misnomer as applied to the zone-of-interests analysis,
which asks whether this particular class of persons ha[s] a right to sue under this substantive
statute.") (citation omitted); Friends of Trumbull v. Chi. Bd. of Educ., 123 F. Supp. 3d 990, 995
(N.D. Ill. 2015) ("Settled law has long distinguished between Article III standing and the statutory
zone of interests.") (citing Lexmark, 572 U.S. at 125–28).
The holding of Simpson concerned the zone of interests that Section 504 protects, not
standing in the Article III sense of the term. Semantics aside, the Supreme Court has
consistently held that for a plaintiff's interests to be arguably within the "zone of
interests" to be protected by a statute, there does not have to be an indication of
congressional purpose to benefit the would-be plaintiff. The proper inquiry is
simply whether the interest sought to be protected by the complainant is arguably
within the zone of interests to be protected by the statute. Hence in applying the
"zone of interests" test, we do not ask whether, in enacting the statutory provision
at issue, Congress specifically intended to benefit the plaintiff.
Nat'l Credit Union Admin. v. First Nat. Bank & Tr. Co., 522 U.S. 479, 492 (1998) (quotations and
citations omitted) (emphasis added).4 In Simpson, the Seventh Circuit—again, before Congress
passed the CRRA—very narrowly dictated that Section 504's zone of interests included only the
intended beneficiaries of federally funded programs or activities. While the Seventh Circuit has
not examined the significant legislative clarification on this conclusion, the interest sought to be
protected by T.S. is arguably within the broad zone of interests to be protected by the statute: the
CRRA clarified that protections under Section 504 are not constrained to the specific program or
activity receiving federal financial assistance. In short, because Simpson is premised on a statute
that has since been materially amended, continued reliance on its pertinent holding is misplaced.
CarDon's receipt of federal financial assistance as a healthcare provider triggers institution-wide
coverage under Section 504, rendering T.S. a "proper plaintiff" to bring a claim. See T.W. v. New
York State Bd. of L. Examiners, 996 F.3d 87, 97 (2d Cir. 2021) ("Congress intended the
Though National Credit concerned application of the zone of interests doctrine in the context of judicial review
under the Administrative Procedure Act, the Supreme Court has "made clear, however, that it applies to all statutorily
created causes of action; that it is a requirement of general application; and that Congress is presumed to legislate
against the background of the zone-of-interests limitation, which applies unless it is expressly negated." Lexmark, 572
U.S. at 129 (cleaned up).
Rehabilitation Act to have broad reach, amending the statute to 'make clear that discrimination is
prohibited throughout entire . . . institutions if any part receives Federal financial assistance.'")
(quoting S. Rep. No. 100-64, at 4 (1988), reprinted in 1988 U.S.C.C.A.N. 3, 64 (emphasis added));
McMullen v. Wakulla Cty. Bd. of Cty. Commissioners, 650 F. App'x 703, 707 (11th Cir. 2016)
(citing Doyle v. Univ. of Alabama in Birmingham, 680 F.2d 1323, 1326 (11th Cir. 1982)
(interpreting "program or activity" to mean only the specific parts of a governmental unit that
directly receive federal financial assistance)) ("Doyle's narrow interpretation of 'program or
activity' is no longer good law."); Haybarger v. Lawrence Cty. Adult Prob. & Parole, 551 F.3d
193, 200 (3d Cir. 2008) ("Since the passage of the Civil Rights Restoration Act, this Court has
interpreted 'program or activity' broadly."). The Court, accordingly, denies Defendants' Motion
because they have failed to show that the Court committed a manifest error of law. See Cincinnati
Life Ins. Co., 722 F.3d at 954.
Under 28 U.S.C. § 1292(b), four criteria guide a district court's decision to certify an order
for interlocutory appeal:
 there must be a question of law,  it must be controlling,  it must be
contestable, and  its resolution must promise to speed up the litigation. There is
also a nonstatutory requirement: the petition must be filed in the district court within
a reasonable time after the order sought to be appealed. Unless all these criteria are
satisfied, the district court may not and should not certify its order.
Ahrenholz v. Bd. of Trs., 219 F.3d 674, 675–76 (7th Cir. 2000) (emphasis in original) (citation
Defendants, in the alternative, argue that "[i]f the Court denies [their] Motion to Reconsider
or considers and addresses [their] standing argument but denies the Motion for Judgment on the
Pleadings on Count III, the Court should certify the standing issue for interlocutory appeal."
(Filing No. 54 at 5.) Defendants first maintain that this case involves a "pure" question of law,
noting that the Seventh Circuit has explicitly noted that any inquiry about "standing is a question
of law." Id. (citing United States v. All Funds on Deposit with R.J. O'Brien & Assocs., 783 F.3d
607, 615 (7th Cir. 2015)). Here, the single question is "does a beneficiary under a group health
plan (who is not a patient of the employer or the plan) have standing under Section 1557 to sue a
defendant who receives federal funding only in the form of Medicare and Medicaid payments on
behalf of patients receiving health care?" Id. (citation omitted). Second, Defendants contend that
the question of law is controlling because "if T.S. does not have standing, then the Section 1557
claim would be dismissed, affecting the course of the remaining litigation by terminating it
altogether." Id. at 6.
Third, the controlling question of law is contestable because "federal courts across the
country have been determining the import of [the statutory language at issue], and the parties in
this lawsuit contest the extent to which limitations to the underlying enforcement mechanism
statutes apply to claims brought under Section 1557." Id. In fact, "this issue does not appear to
have been ruled upon by another court, leading to the present, substantial differences of opinion."
Id. Fourth, this controlling and contestable question of law would "speed up the litigation because
the outcome of the standing issue could end the litigation entirely." Id. at 7. Finally, the motion
was timely when it was filed "less than three weeks" after the Court resolved the Motion for
Judgment on the Pleadings. Id. (citation omitted).
In response, T.S. takes issue with the contestability prong, arguing that "Defendants have
not demonstrated that 'exceptional circumstances' warrant immediate appeal." (Filing No. 59 at
13–14 (citing Knauf Insulation, LLC v. Johns Manville Corp., No. 1:15‐cv‐111‐TWP‐MJD, 2020
WL 4261814, at *6 (S.D. Ind. July 24, 2020)).) Specifically, T.S. maintains that the issue is not
contestable when "Defendants do not point to a single case decided after the Supreme Court's
ruling in Consolidated Rail and the 1988 amendment to Section 504, which holds that a plaintiff
must be an intended beneficiary of the federal assistance to allege disability discrimination under
Section 504." Id. at 14. T.S. argues that "Defendants fail to identify even one court that has
adopted a view conflicting with the Court's Entry." Id. at 14–15. Instead, the "Entry is based on
a sound application of black‐letter statutory construction principles, making it unlikely that the
Seventh Circuit would reverse the Court's ruling." Id. at 15 (citing LAJIM, LLC v. Gen. Elec. Co.,
No. 13 CV 50348, 2016 WL 626801, at *2 (N.D. Ill. Feb. 17, 2016)).
T.S. also argues that an interlocutory appeal would not speed up the litigation because
"[t]he Seventh Circuit would have to decide [multiple questions of law] in Defendants' favor for
this litigation to end." Id. at 17. In fact, interlocutory appeal could actually "serve only to drive
up the parties' expenses and substantially delay resolution of the litigation" since "the likelihood
that an immediate appeal would end the litigation is low." Id. at 18. In sum, "Defendants will
have ample opportunity to seek the Seventh Circuit's opinion in the normal course of proceedings
once final judgment is entered." Id. But if the Court grants this Motion, T.S. concludes that the
Court should "certify the entire Entry so Plaintiff can appeal the Court's decision dismissing his
Parity Act claims." Id.
Defendants reply that "this Court has the discretion and authority to find the novel question
of law presented here sufficient to meet the contestability standard." (Filing No. 60 at 6.) Even so,
a divergence of authorities "indicates a rapidly developing need for clear and definitive direction
from the courts on this contestable issue." Id. And resolution of the single question presented
here—"does T.S. have standing under Section 1557 to bring his claim"—"would be sufficiently
controlling on appeal because it would end the case altogether." Id. at 6–7. Moreover, Defendants
argue that "T.S. has not identified a harm or unreasonable cost to the parties for pursuing a
streamlined legal argument." Id. at 7. Finally, the Court should deny T.S.'s "passing argument"
for certifying the entire Entry because he "has failed to identify any facts or legal arguments
satisfying the four statutory criteria found in 28 U.S.C. § 1292(b) or satisfying the additional
requirement of timeliness." Id. at 7–8 (citing In re Bridgestone/Firestone, Inc. Tires Prod. Liab.
Litig., 212 F. Supp. 2d 903, 905 (S.D. Ind. 2002) ("[I]n Seventh Circuit practice, specific issues,
rather than an order as a whole, are formally certified for appeal.")). In any event, "Local Rule 71(a) provides that '[a] motion must not be contained within a brief, response, or reply to a
previously filed motion, unless ordered by the court.'" Id. at 8.
The Court determines that certification of the issue regarding "standing" (but not the entire
Entry) is appropriate for interlocutory appeal. The Court agrees with Defendants on the
uncontested prongs—this is a controlling question of law that was brought within a reasonable
time after the underlying Entry was docketed. As for contestability, courts should "examine the
strength of the arguments in opposition to the challenged ruling. This analysis includes examining
whether other courts have adopted conflicting positions regarding the issue of law proposed for
certification." Emley v. Wal-Mart Stores, Inc., No. 1:17-cv-2350-SEB-TAB, 2020 WL 108374, at
*5 (S.D. Ind. Jan. 8, 2020) (quoting Bridgestone/Firestone, 212 F. Supp. 2d at 909, 910) (emphasis
added). As explained at length above, sister courts continue to favorably cite Simpson when
discussing Section 504 and Title VI claims. See Blazquez, 2006 WL 3320538, at *4 (Section 504);
Doe v. City of Chicago, 883 F. Supp. at 1134–35 (Section 504); Rosas, 2021 WL 1962397, at *11
(Title VI); Cieslik, 2021 WL 1172575, at *2 (Title VI); Veljkovic, 2020 WL 7626735, at *4 (Title
VI); Shebley, 2020 WL 2836796, at *6 (Title VI). This question of law is particularly well-suited
for interlocutory resolution—in terms of "contestability"—because it concerns a decades-old
precedent interpreting a long-amended statute that continues to be cited to foreclose claims at early
stages of litigation.
Regarding "the promise to speed up litigation," quick appellate resolution of this issue
could conclude this matter in its entirety: the sole issue remaining in this litigation could be
precluded from proceeding on "standing" grounds. If, on the other hand, the Court is mistaken in
its interpretation of the interceding impact of the CRRA on Simpson's pertinent holding, this
litigation could progress for quite some time before an appellate decision could correct that error.
In the Court's view, cases like this are what Congress envisioned when it passed § 1292(b).
This federal issue is important, purely legal, and potentially dispositive (to not only this, but to
many cases); reasonable minds could—and do—disagree on the continued viability of a longstanding precedent; a decision reversing the Entry will obviate the need for a trial; and a decision
affirming the Entry could allow the current trial date to remain intact. Because the four statutory
criteria, as well as the non-statutory timeliness factor, support certifying the Entry for interlocutory
appeal, the Court grants Defendants' Motion to that end. But insofar as T.S. seeks certification of
the entire Entry, because he has neither (1) filed a separate motion as demanded by Local Rule 71(a) ("Motions Must Be Filed Separately") nor (2) meaningfully discussed any of the factors the
Court should consider in resolving his request, see Ahrenholz, 219 F.3d at 675–76, the Court
declines T.S.'s request to certify the entire Entry.
For the preceding reasons, the Court DENIES Defendants' Motion for Reconsideration but
GRANTS its alternative Motion to Certify for Interlocutory Appeal (Filing No. 53). Defendants
may proceed to seek interlocutory appeal pursuant to Federal Rule of Appellate Procedure 5
regarding whether T.S. has "standing" to bring his claim pursuant to Sections 1557 and 504 (see
Filing No. 31 at 5–6).
Blythe H. Chandler
TERRELL MARSHALL LAW GROUP PLLC
Andrew M. McNeil
BOSE MCKINNEY & EVANS, LLP
SIRIANNI YOUTZ SPOONEMORE
BOSE MCKINNEY & EVANS, LLP
Winthrop James Hamilton
BOSE MCKINNEY & EVANS, LLP
Syed Ali Saeed
SAEED & LITTLE LLP
Toby J. Marshall
TERRELL MARSHALL LAW GROUP PLLC
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