Tuesday, September 2, 2003
Ninth Circuit Revives Lawyer’s Disability Bias Claim Against Insurer
By a MetNews Staff Writer
A lawyer’s suit claiming an insurer wrongly refused her coverage under a program approved by the State Bar because she was undergoing treatment for a psychological disorder was reinstated Friday by the Ninth U.S. Circuit Court of Appeals.
U.S. District Court Judge Vaughn R. Walker of the Northern District of California misinterpreted California law in dismissing Patrice Goldman’s Unruh Civil Rights Act claim, the court said.
Goldman sued Standard Insurance Company after the company rejected her application for disability insurance. At the time she was participating in weekly therapy sessions with a licensed clinical social worker and had been diagnosed as having an adjustment disorder with mixed anxiety and depressed mood.
Adjustment disorders are short-term conditions that occur when a person is unable to cope with a particular source of stress. The insurer cited its policy of denying coverage for applicants with adjustment disorders until at least one year of treatment ends.
Goldman’s suit included claims under both the Unruh Act and the Americans With Disabilities Act. She filed it first in federal court, but then dismissed that action and refiled in state court.
The insurer removed the suit back to federal court.
Writing for the three-judge appellate panel, Judge Raymond C. Fisher said Walker properly dismissed Goldman’s ADA claims, since the company established it did not regard her as presently disabled, but only as likely to become disabled in the future. That precluded recovery under the U.S. Supreme Court’s holding in Sutton v. United Air Lines (1999) 527 U.S. 471, which required ADA plaintiffs to show that they are “presently—not potentially or hypothetically—substantially limited.”
But Fisher said Walker erred in ruling that the same standard applied to a disability discrimination claim under state law.
He noted that when Goldman was denied coverage in 1997, the Unruh Act did not define disability. In 2000, an amendment incorporated the definition from the state’s Fair Housing and Employment Act.
That definition includes, among other things, “[b]eing regarded or treated by the employer or other entity covered by this part as having, or having had, a mental or psychological disorder or condition that has no present disabling effect, but that may become a mental disability.”
The amendment clarified, rather than changed, existing law, Fisher said.
He noted that in Colmenares v. Braemar Country Club, Inc., 29 Cal.4th 1019, the California Supreme Court held this year that provisions of the amending legislation—the Poppink Act—were clarifications of existing law.
“For similar reasons, and guided by Colmenares, we likewise do not need to resolve the retroactive application of the Poppink Act generally, because we are persuaded that California’s disability antidiscrimination law has never required that a plaintiff be regarded as presently limited by her disability,” Fisher wrote. “The 2000 amendments, although making other changes to the existing definition of disability under California law, merely clarified that the definition does not include such a limitation nor has it ever done so.”
The appellate jurist said Walker should not have read into the Unruh Act the same restrictive interpretation given to the ADA by the high court in Sutton.
“To do so,” he said, “would fly in the face of the California Legislature’s clearly expressed intent that the Unruh Act’s antidiscrimination provisions be read broadly, and that it looked to the ADA as a model for putting a floor on coverage for the disabled, not a cap on liability.”
The case is Goldman v. Standard Insurance Company, 00-16691.
Copyright 2003, Metropolitan News Company