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Good v. Iowa Department of Human Services

Supreme Court of Iowa

March 8, 2019

EERIEANNA GOOD and CAROL BEAL, Appellees,
v.
IOWA DEPARTMENT OF HUMAN SERVICES, Appellant.

          Appeal from the Iowa District Court for Polk County, Arthur E. Gamble, Judge.

         The 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 gender-affirming surgery.

          Thomas J. Miller, Attorney General, Matthew K. Gillespie and Anagha Dixit, Assistant Attorneys General, for appellant.

          Rita 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 appellees.

          Bob 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.

          Paige 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 Equality.

          Sharon Malheiro and Katelynn T. McCollough of Davis Brown Law Firm, Des Moines, for amici curiae One Iowa, Individual Transgender Iowans, and Allies.

          Joshua 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.

          Katie 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.

          CHRISTENSEN, Justice.

         In 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 procedures.

         After 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 constitutional claim.

         I. Background Facts and Proceedings.

         EerieAnna 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 ...

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