Diaz v. Brewer

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOSEPH R. DIAZ; JUDITH MCDANIEL; 

KEITH B. HUMPHREY; BEVERLY

SECKINGER; STEPHEN RUSSELL;

DEANNA PFLEGER; CARRIE SPERLING;

LESLIE KEMP; COREY SEEMILLER,

Plaintiffs-Appellees,

v.

JANICE K. BREWER, in her official No. 10-16797

capacity as Governor of the State

of Arizona; DAVID RABER, in his  D.C. No.

2:09-cv-02402-JWS

official capacity as Interim

Director of the Arizona OPINION

Department of Administration and

Personnel Board; KATHY

PECKARDT, in her official capacity

as Director of Human Resources

for the Arizona Department of

Administration and Personnel

Board,

Defendants-Appellants.



Appeal from the United States District Court

for the District of Arizona

John W. Sedwick, District Judge, Presiding

Argued and Submitted

February 14, 2011—San Francisco, California

Filed September 6, 2011

16897

16898 DIAZ v. BREWER

Before: Mary M. Schroeder and Sidney R. Thomas,

Circuit Judges, and Mark W. Bennett, District Judge.*

Opinion by Judge Schroeder

*The Honorable Mark W. Bennett, District Judge for the United States

District Court for the Northern District of Iowa, sitting by designation.

16900 DIAZ v. BREWER

COUNSEL

Tara L. Borelli, Los Angeles, California, for plaintiffs-

appellees Joseph R. Diaz, et al.

Charles A. Grube, Deputy State Attorney General, Phoenix,

Arizona, for defendants-appellants Janice K. Brewer, et al.

OPINION

SCHROEDER, Circuit Judge:

The State of Arizona appeals the district court’s order

granting a preliminary injunction to prevent a state law from

taking effect that would have terminated eligibility for health-

care benefits of state employees’ same-sex partners. In a pub-

lished opinion, the district court found that the plaintiffs

demonstrated a likelihood of success on the merits, because

they showed that the law adversely affected a classification of

employees on the basis of sexual orientation, and did not fur-

ther any of the state’s claimed justifiable interests. Collins v.

Brewer, 727 F. Supp. 2d 797 (D. Ariz. 2010).1 The court also

found that the plaintiffs had established a likelihood of irrepa-

rable harm in the event coverage for partners ceased. The dis-

trict court’s findings and conclusions are supported by the

record and we affirm.

BACKGROUND

In April of 2008, the State of Arizona administratively

adopted amendments to Section 101 of Chapter 5 of Title 2

of the Arizona Administrative Code to offer access to health-

care benefits for qualified opposite-sex and same-sex domes-

tic partners of state employees. Prior to 2008, when state

1

On June 6, 2011, the panel granted Plaintiff Tracy Collins’s unopposed

motion to dismiss without prejudice.

DIAZ v. BREWER 16901

employees chose to participate in the State’s health insurance

program, they only had the option to include their spouses and

children within the defined parameters of the term “depen-

dent.” In 2008, the amendments expanded the definition of

“dependent” to include qualified “domestic partners,” who

could be of either sex. See 14 Ariz. Admin. Reg. 1420-34

(Apr. 25, 2008).

In November of 2008, however, the Arizona voters

approved Proposition 102, also known as the Marriage Pro-

tection Amendment, which amended the Arizona Constitution

to define marriage as between one man and one woman:

“Only a union of one man and one woman shall be valid or

recognized as a marriage in this state.” Ariz. Const. art. 30,

§ 1. On September 4, 2009, the governor of Arizona signed

House Bill 2013, which included a statutory provision, Ariz.

Rev. Stat. § 38-651(O) (“Section O”) that redefined “depen-

dants” as “spouses,” and thus would eliminate coverage for

domestic partners:

O. FOR THE PURPOSES OF THIS SECTION,

BEGINNING OCTOBER 1, 2009, “DEPENDENT”

MEANS A SPOUSE UNDER THE LAWS OF

THIS STATE, A CHILD WHO IS UNDER NINE-

TEEN YEARS OF AGE OR A CHILD WHO IS

UNDER TWENTY-THREE YEARS OF AGE AND

WHO IS A FULL-TIME STUDENT.

After a number of adjustments not at issue here, the new defi-

nition of “dependent” was slated to take effect on January 1,

2011.

A group of gay and lesbian state employees (“Plaintiffs”)

filed a complaint on November 17, 2009 amended on January

7, 2010, seeking injunctive and declaratory relief to redress

Section O’s claimed violation of their equal protection and

substantive due process rights under the Fourteenth Amend-

ment to the U.S. Constitution. According to the factual allega-

16902 DIAZ v. BREWER

tions of the complaint, which are not disputed, all of the

plaintiffs are highly skilled state employees whose job duties

are equivalent to the duties of their heterosexual colleagues.

Each of the nine plaintiffs and his or her domestic partner

have enjoyed a long-term, committed, and financially interde-

pendent relationship, and would marry if Arizona law permit-

ted same-sex couples to marry. Each plaintiff enrolled his or

her domestic partner and the domestic partner’s qualifying

children (if any) for family coverage during the 2008 or 2009

open enrollment period. Each plaintiff, domestic partner, and

partner’s child met the eligibility requirements for coverage at

the time of enrollment and continue to meet those require-

ments. Each named plaintiff would lose health insurance cov-

erage for his or her domestic partner, and his or her partner’s

children if Section O were to go into effect.

The complaint also reflects that such a loss would cause all

of the plaintiffs serious financial and emotional harm. For

example, one of the plaintiffs, Beverly Seckinger, a Professor

and Interim Director of the School of Media Arts at the Uni-

versity of Arizona, has been in an exclusive and financially

interdependent relationship with Susan Taunton for over 22

years. The two registered as domestic partners with the City

of Tucson in October 2005. Susan enrolled in the state’s fam-

ily coverage in 2008, and remains enrolled. Susan is the pri-

mary caregiver for her 89-year-old mother, who has dementia

and needs much more caregiving help than her assisted living

facility can provide. The care of her mother precludes Susan

from obtaining full-time employment.

Private insurers have consistently refused to insure Susan

because of her chronic asthma. Beverly’s declaration stated

that “[e]ven if [she] were to persuade a private insurer to pro-

vide Susan with health coverage, [she] would not be able to

secure a health plan with equivalent coverage.” Moreover,

due to Beverly’s financial support, it is possible that Susan no

longer qualifies for medical coverage through the state’s Med-

icaid program.

DIAZ v. BREWER 16903

Another plaintiff, Joseph R. Diaz, an Associate Librarian at

the University of Arizona, has been in a committed relation-

ship for the last 17 years with Ruben E. Jiménez. Ruben

enrolled in the state’s family coverage in 2008 and 2009, and

he relied on this coverage in making a decision to leave his

low-wage job with health benefits for a more promising posi-

tion without health benefits. Ruben has high cholesterol and

Type 2 diabetes, and requires daily medication and testing

strips which would cost approximately $300 a month out of

pocket. A private insurance agent informed Joseph and Ruben

that “she could not locate any individual insurance plans in

Arizona that would cover a person [like Ruben] with diabetes

and high cholesterol.” Ruben earns $100 too much per month

to qualify for indigent health care.

Defendants include the governor of Arizona, the interim

Director of the Arizona Department of Administration

(“ADOA”), and two other ADOA officials. They moved to

dismiss the complaint on the ground that the complaint failed

to state equal protection and substantive due process claims,

and argued that the statute furthered valid legislative interests.

It further argued that the governor was immune from suit.

Plaintiffs opposed the motion and sought a preliminary

injunction barring enforcement of the law. They submitted

affidavits and other material to support their position that the

law did not further any legitimate financial or administrative

interest of the state. The supporting materials included the

analysis of an expert that the entire state expenditure for

domestic partner benefits represented a tiny fraction of the

total employee healthcare benefits.

In a careful order, the court considered each of the possible

state interests the law might be said to further and ruled that

the law and the record negated each of them. Although plain-

tiffs argued heightened scrutiny was required, the district

court applied rational basis review, but noting that such

review is more searching when a classification adversely

16904 DIAZ v. BREWER

affects unpopular groups. Collins, 727 F. Supp. 2d at 804 (cit-

ing Lawrence v. Texas, 539 U.S. 558, 580 (2003) (O’Connor,

J., concurring)). We do not need to decide whether heightened

scrutiny might be required.

While the district court noted that Section O was not dis-

criminatory on its face, because it affected both same-sex and

different-sex couples, the court held that Section O had a dis-

criminatory effect. This is because, under Arizona law,

different-sex couples could retain their health coverage by

marrying, but same-sex couples could not. Id. at 802-03.

Therefore, the district court granted plaintiffs’ request for a

preliminary injunction on equal protection grounds.

The court applied the appropriate standards for the grant of

preliminary injunctive relief. See Fed. R. Civ. P. 65; see also

Winter v. NRDC, 555 U.S. 7, 24-25 (2008); Stormans, Inc. v.

Selecky, 586 F.3d 1109, 1126-27 (9th Cir. 2009). It concluded

that the plaintiffs had established a likelihood of success on

the merits and that they were likely to suffer irreparable harm

if the injunction did not issue. Collins, 727 F. Supp. 2d at

811-14. In assessing the likelihood of success, the court

examined each of the interests the state contended the statute

furthered and found the statute was not rationally related to

them. In addition, the district court tried to conceive of any

additional interests to sustain Section O and concluded it

could not.

The likelihood of the plaintiffs suffering irreparable harm

was well documented by the plaintiffs’ affidavits. The health

problems of domestic partners facing loss of healthcare bene-

fits included a life-threatening torn carotid artery, chronic

asthma, and inability to obtain private insurance because of

diabetes and high cholesterol. The court also considered the

public interest and found it, as well as the balance of the equi-

ties, weighed in favor of granting injunctive relief. See Stor-

mans, 586 F.3d at 1138-40.

DIAZ v. BREWER 16905

The district court, however, denied plaintiffs’ claim that the

law violated substantive due process rights, Collins, 727 F.

Supp. 2d at 809, and that claim is not before us. The court

also held that the governor was not immune from a suit seek-

ing injunctive relief. Id. at 809-11; see Ex parte Young, 209

U.S. 123 (1908); Agua Caliente Band of Cahuilla Indians v.

Hardin, 223 F.3d 1041, 1045 (9th Cir. 2000). Finally, the

court considered the arguments of the parties concerning a

bond and ruled that plaintiffs’ were not required to post one.

This appeal by the defendants followed. We have jurisdic-

tion pursuant to 28 U.S.C. § 1292(a)(1), as an appeal of an

interlocutory order for a preliminary injunction.

DISCUSSION

[1] Defendants’ principal argument on appeal is that the

district court, in granting the preliminary injunction, improp-

erly accepted all of the plaintiffs’ allegations as true. This

argument is premised on a fundamentally distorted misread-

ing of the district court’s opinion. The court’s opinion was

dealing with two separate and discrete motions. The first was

the defendants’ motion to dismiss the complaint. The law is

well settled that in deciding such motions the court is to

accept the plaintiffs’ allegations as true. See Ashcroft v. Iqbal,

___U.S. ___, 129 S.Ct. 1937, 1949 (2009); Hebbe v. Pliler,

627 F.3d 338, 341-42 (9th Cir. 2010). The district court prop-

erly did so here and its order makes it apparent that it under-

stood the proper application of the rule. Collins, 727 F. Supp.

2d at 802.

[2] After denying the defendants’ motion to dismiss, the

court then considered the plaintiffs’ motion for a preliminary

injunction. The court applied the appropriate standards, look-

ing first at the likelihood of success on the merits. It reviewed

each of the justifications for the law in light of the evidence

in the record. Id. at 804-05. The most important was that the

16906 DIAZ v. BREWER

change furthered the state’s economic interests by reducing

costs.

Of particular significance to the district court was the fact

that while the plaintiffs produced expert analysis on the

impact of the law on the state’s expenditures and found it

minimal, id. at 811-12, the court was not provided any evi-

dence of the actual amount of benefits the state paid for same-

sex partners:

In opposition to the motion for a preliminary injunc-

tion, the State attaches a spreadsheet indicating that

a total of 698 domestic partners participated in the

State’s health plan in the 2008-2009 plan year, and

893 domestic partners participated in the 2009-2010

plan year. . . . However, no information is provided

as to the number of same-sex domestic partners par-

ticipating in the State health plan, nor the total

claims of same-sex domestic partners.

Id. at 812 (footnote omitted).

The district court therefore rejected what the state said was

the principle justification for the statute: cost savings. Id. The

defendants, on appeal, do not seriously challenge this finding.

[3] The defendants, on appeal, also contend that the district

court’s order impermissibly recognized a constitutional right

to healthcare. Again, this contention rests on a misunderstand-

ing of the court’s decision. The court held that the withhold-

ing of benefits for same-sex couples was a denial of equal

protection. The state is correct in asserting that state employ-

ees and their families are not constitutionally entitled to health

benefits. But when a state chooses to provide such benefits,

it may not do so in an arbitrary or discriminatory manner that

adversely affects particular groups that may be unpopular.

The most instructive Supreme Court case involving arbitrary

restriction of benefits for a particular group perceived as

DIAZ v. BREWER 16907

unpopular is U.S. Department of Agriculture v. Moreno, 413

U.S. 528 (1973). In that case, Plaintiffs challenged the consti-

tutionality of an amendment to the Food Stamp Act of 1964,

which redefined the term “household” to limit the program’s

eligible recipients to groups of related individuals. Id. at

529-30. While noting the “little legislative history” available

on the amendment, the Court concluded that the legislation

was aimed at groups that were unpopular. The “amendment

was intended to prevent so-called ‘hippies’ and ‘hippie com-

munes’ from participating in the food stamp program.” Id. at

534.

In defending the amendment under rational basis review,

the government contended that Congress might rationally

have thought that the amendment would prevent fraud given

the relative instability of households with unrelated individu-

als. Id. at 535. The Court rejected both justifications. The

Court held that the “practical operation” of the amendment

would allow the hippies, with means, who were allegedly

abusing the program, to rearrange their housing status to

retain eligibility, while excluding those who were financially

unable to do so, i.e., “only those persons who are so desper-

ately in need of aid that they cannot even afford to alter their

living arrangements so as to retain their eligibility.” Id. at 538.

Those excluded were like the same-sex partners in this case

who, because they cannot marry, are unable to alter their liv-

ing arrangements to retain eligibility. The Court concluded

that the “hippie” amendment’s classification was “wholly

without any rational basis.” Id. We must reach the same con-

clusion.

[4] Here, as in Moreno, the legislature amended a benefits

program in order to limit eligibility. Since in this case eligibil-

ity was limited to married couples, different-sex couples

wishing to retain their current family health benefits could

alter their status — marry — to do so. The Arizona Constitu-

tion, however, prohibits same-sex couples from doing so.

Thus, this case may present a more compelling scenario, since

16908 DIAZ v. BREWER

the plaintiffs in Moreno were prevented by financial circum-

stances from adjusting their status to gain eligibility, while

same-sex couples in Arizona are prevented by operation of

law.

[5] Defendants nevertheless contend on appeal that this

law is rationally related to the state’s interests in cost savings

and reducing administrative burdens. As the district court

observed, however, the savings depend upon distinguishing

between homosexual and heterosexual employees, similarly

situated, and such a distinction cannot survive rational basis

review. The Supreme Court in Eisenstadt v. Baird, 405 U.S.

438 (1972), was well aware of this principle when it quoted

the eloquent words of Justice Robert H. Jackson, decrying the

selective application of legislation to a small group:

The framers of the Constitution knew, and we should

not forget today, that there is no more effective prac-

tical guaranty against arbitrary and unreasonable

government than to require that the principles of law

which officials would impose upon a minority must

be imposed generally. Conversely, nothing opens the

door to arbitrary action so effectively as to allow

those officials to pick and choose only a few to

whom they will apply legislation and thus to escape

the political retribution that might be visited upon

them if larger numbers were affected. Courts can

take no better measure to assure that laws will be just

than to require that laws be equal in operation.

Eisenstadt, 405 U.S. at 454 (quoting Ry. Express Agency v.

New York, 336 U.S. 106, 112-113 (1949) (Jackson, J., concur-

ring)).

[6] The state has also argued that the statute promotes mar-

riage by eliminating benefits for domestic partners, but the

plaintiffs negated that as a justification. The district court

properly concluded that the denial of benefits to same-sex

DIAZ v. BREWER 16909

domestic partners cannot promote marriage, since such part-

ners are ineligible to marry. Collins, 727 F. Supp. 2d at 807.

On appeal, the state has not seriously advanced this justifica-

tion.

[7] In sum, the district court correctly recognized that bar-

ring the state of Arizona from discriminating against same-sex

couples in its distribution of employee health benefits does

not constitute the recognition of a new constitutional right to

such benefits. Rather, it is consistent with long standing equal

protection jurisprudence holding that “some objectives, such

as ‘a bare . . . desire to harm a politically unpopular group,’

are not legitimate state interests.” Lawrence, 539 U.S. at 580

(O’Connor, J., concurring) (quoting Moreno, 413 U.S. at 534)

(alteration in the original); see also City of Cleburne v. Cle-

burne Living Center, Inc., 473 U.S. 432, 447 (1985). More-

over, the district court properly rejected the state’s claimed

legislative justification because the record established that the

statute was not rationally related to furthering such interests.

Collins, 727 F. Supp. 2d at 807. Contrary to the state’s asser-

tions, the court did not place the burden on the state to prove

a legitimate interest. After concluding that neither the law nor

the record could sustain any of the interests the state sug-

gested, the district court considered whether it could conceive

of any additional interests Section O might further and con-

cluded it could not. On appeal, the state does not suggest any

interests it or the district court may have overlooked. The

court ruled the plaintiffs had established a likelihood of suc-

cess in showing the statute furthered no legitimate interest.

[8] Finally, the state contends that the district court com-

mitted clear error by not considering whether plaintiffs should

post a bond as required under Federal Rules of Civil Proce-

dure Rule 65(c). Rule 65(c) provides that a district court may

grant a preliminary injunction, “only if the movant gives

security in an amount that the court considers proper to pay

the costs and damages sustained by any party found to have

been wrongfully enjoined or restrained.” The district court

16910 DIAZ v. BREWER

retains discretion “as to the amount of security required, if

any.” Johnson v. Couturier, 572 F.3d 1067, 1086 (9th Cir.

2009) (internal quotation marks and citations omitted)

(emphasis in the original). Here, the parties disputed whether

a bond was required. The district court considered the argu-

ments and properly invoked its discretion not to have plain-

tiffs post a bond in this matter. There was no error.

AFFIRMED.