from the Iowa District Court for Polk County, Arthur E.
Iowa Department of Human Services appeals a district court
decision striking down Iowa Administrative Code rule
441-78.1(4), which prohibits Medicaid coverage for
J. Miller, Attorney General, Matthew K. Gillespie and Anagha
Dixit, Assistant Attorneys General, for appellant.
Bettis Austen of ACLU of Iowa Foundation, Des Moines, John
Knight of ACLU Foundation LGBT & HIV Project, Chicago,
Illinois, and F. Thomas Hecht, Tina B. Solis, and Seth A.
Horvath of Nixon Peabody LLP, Chicago, Illinois, for
Rush of Rush & Nicholson, PLC, Cedar Rapids, and Steve
Sanders of Maurer School of Law, Indiana University,
Bloomington, Indiana, for amici curiae Iowa Scholars of Law,
History, Bioethics, Gender, and Sexuality.
Fiedler of Fiedler Law Firm, P.L.C., Johnston, Robert R.
Stauffer and Lindsey A. Lusk of Jenner & Block LLP,
Chicago, Illinois, and Devi M. Rao of Jenner & Block LLP,
Washington, D.C., for amici curiae The American Medical
Association, The Iowa Medical Society, The American College
of Physicians, Mental Health America, National Association of
Social Workers, and GLMA: Health Professionals Advancing LGBT
Malheiro and Katelynn T. McCollough of Davis Brown Law Firm,
Des Moines, for amici curiae One Iowa, Individual Transgender
Iowans, and Allies.
Matz and John C. Quinn of Kaplan Hecker & Fink, New York,
New York, and Joseph C. Glazebrook, Des Moines, for amici
curiae Lambda Legal Defense and Education Fund, Inc.,
National Center for Transgender Equality, Transgender
American Veterans Association, Transcend Legal, Transgender
Legal Defense and Education Fund, Transgender Allies Group,
Transgender Resource Center of New Mexico, and The Southern
Arizona Gender Alliance.
Roxanne Barton Conlin of Roxanne Conlin & Associates,
P.C., Des Moines, and Matt M. Fogelberg, and Paul E. Bateman
Jr. of Sidley Austin LLP, Chicago, Illinois, for amici curiae
National Health Law Program, National Women's Health
Network, and Chicago Lawyers' Committee for Civil Rights.
Ervin Carlson of Timmer & Judkins, P.L.L.C., West Des
Moines, and Lindsay Nako and Daniel J. Nesbit of Impact Fund,
Berkeley, California, for amici curiae Impact Fund, et al.
2007, the Iowa legislature amended Iowa Code chapter 216-the
Iowa Civil Rights Act (ICRA)-to add "gender
identity" to the list of protected characteristics.
See 2007 Iowa Acts ch. 191, §§ 5, 6
(codified at Iowa Code § 216.7(1)(a) (2009)).
We must now determine whether the language of Iowa
Administrative Code rule 441-78.1(4) pertaining to the
prohibition of Iowa Medicaid coverage of surgical procedures
related to "gender identity disorders" violates the
ICRA or the Iowa Constitution. The appellees are transgender
women and Iowa Medicaid recipients who sought Medicaid
coverage for gender-affirming surgical procedures to treat
their gender dysphoria. The appellees' managed care
organizations (MCOs) denied coverage for their surgeries
pursuant to rule 441-78.1(4). An administrative law judge
(ALJ) and the director of the Iowa Department of Human
Services (DHS) affirmed the MCOs' decisions based on rule
441-78.1's exclusion of coverage for gender-affirming
exhausting intra-agency appeals, the appellees sought
judicial review. The district court consolidated their cases
and concluded the challenged portions of rule 441-78.1(4)
violate the ICRA and the equal protection clause of the Iowa
Constitution. The district court also determined the
DHS's denial of Medicaid coverage for gender-affirming
surgeries was reversible because it would result in a
disproportionate negative impact on private rights and the
decision was unreasonable, arbitrary, and capricious. We
retained the DHS's appeal. On our review, we affirm the
judgment of the district court because the rule violates the
ICRA's prohibition against gender-identity
discrimination. Because of this, we adhere to the doctrine of
constitutional avoidance and do not address the
Background Facts and Proceedings.
Good and Carol Beal are transgender women who have gender
dysphoria. Gender dysphoria is a diagnostic category in the
Diagnostic and Statistical Manual of Mental
Disorders-V (DSM-V), codified as diagnostic code section
302.85, which "refers to the distress that may accompany
the incongruence between one's experienced or expressed
gender and one's assigned gender." Am. Psychiatric
Ass'n, Diagnostic and Statistical Manual of Mental
Disorders 451 (5th ed. 2013). The DSM-V provides the
following diagnostic criteria for gender dysphoria in adults:
A. A marked incongruence between one's experienced/
expressed gender and assigned gender, of at least 6 months
duration, as manifested by at least two of the following:
1. A marked incongruence between one's
experienced/expressed gender and primary and/or secondary sex
characteristics . . . .
2. A strong desire to be rid of one's primary and/or
secondary sex characteristics because of a marked
incongruence with one's experienced/expressed gender . .
3. A strong desire for the primary and/or secondary sex
characteristics of the other gender.
4. A strong desire to be of the other gender (or some
alternative gender different from one's assigned gender).
5. A strong desire to be treated as the other gender (or some
alternative gender different from ...