Dewitt v. Proctor Hospital
2008 U.S. App. LEXIS 4157, 20 Am. Disabilities Cas. (BNA) 385, 517 F. 3d 944 (2008)
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Rule of Law:
Terminating a qualified employee to avoid high medical costs associated with their disabled relative constitutes a prohibited form of "association discrimination" under the Americans with Disabilities Act (ADA). Circumstantial evidence, such as an employer's inquiries about the high costs and the timing of the termination, can be sufficient to allow such a claim to proceed to a jury.
Facts:
- Phillis Dewitt was employed as a nurse by Proctor Hospital and was covered, along with her husband Anthony, by Proctor's partially self-insured health plan.
- Proctor was self-insured for medical claims up to $250,000 per year and received quarterly "stop-loss" reports identifying employees with claims exceeding $25,000.
- Dewitt's husband, Anthony, suffered from prostate cancer, resulting in significant medical claims paid by Proctor, including $177,826 in 2004.
- In September 2004, Dewitt's supervisor, Mary Jane Davis, confronted her about Anthony's high medical claims, asked what treatment he was receiving, and suggested considering less expensive hospice care.
- Davis questioned Dewitt again about Anthony's treatment in February 2005.
- In May 2005, Davis informed clinical managers that Proctor faced financial troubles and needed to be "creative" in cutting costs.
- Proctor Hospital fired Phillis Dewitt on August 3, 2005, and designated her as ineligible for rehire.
Procedural Posture:
- Phillis Dewitt filed suit against Proctor Hospital in the United States District Court, alleging association discrimination under the ADA, as well as age and gender discrimination.
- Dewitt moved for leave to amend her complaint to add a claim of ERISA retaliation.
- The district court granted summary judgment in favor of Proctor Hospital on all claims.
- The district court also denied Dewitt's motion for leave to amend her complaint.
- Dewitt, as appellant, appealed the grant of summary judgment on her ADA claim and the denial of her motion to amend to the United States Court of Appeals for the Seventh Circuit, with Proctor Hospital as appellee.
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Issue:
Does an employer violate the Americans with Disabilities Act's (ADA) prohibition on association discrimination by terminating an employee to avoid paying for the high medical expenses of the employee's disabled spouse?
Opinions:
Majority - Evans, Circuit Judge.
Yes. An employer violates the ADA's prohibition on association discrimination by terminating an employee to avoid the high medical costs of their disabled associate. The court reasoned that Dewitt presented sufficient circumstantial evidence for a jury to infer that Proctor fired her because of her husband's expensive cancer treatment. This evidence included Proctor's financial troubles, its awareness of the high costs through stop-loss reports, supervisor Davis's repeated inquiries about the husband's condition and suggestion of cheaper care, and the timing of the firing shortly after a call for "creative" cost-cutting. The court distinguished this case from its precedent in Larimer because the financial burden here was ongoing and indefinite. Therefore, a reasonable juror could conclude that Proctor's motivation was to rid itself of the "financial albatross" of Anthony's medical care, which falls within the "expense" category of association discrimination.
Concurring - Posner, Circuit Judge,
Yes. Judge Posner agreed with the outcome but wrote separately to raise a critical, unargued point. He argued that there is a crucial distinction between firing someone because of their associate's disability and firing them purely because of the expense, regardless of its cause. He posited that if an employer's motive was purely financial (i.e., it would have fired any employee with high medical costs, whether due to a disability or not), it would not be disability discrimination. However, since Proctor's attorneys failed to make this cost-versus-disability argument, it was waived for the purposes of summary judgment, and the reversal was proper. He also noted that the direct and indirect methods of proving discrimination are not mutually exclusive and that a plaintiff can combine evidence from both.
Analysis:
This decision clarifies that the "expense" theory of ADA association discrimination is a viable cause of action that can survive summary judgment based on strong circumstantial evidence. It signals to employers that actions like monitoring high-cost employees, questioning them about their relatives' medical conditions, and then terminating them amidst financial pressures can create a powerful inference of illegal discrimination. Judge Posner's concurrence introduces a sophisticated but crucial potential defense: that an employer's action based purely on cost, divorced from the underlying disability, might not violate the ADA. This leaves an important question open for future litigation.
