from the Iowa District Court for Polk County, Arthur E.
petitioners, who successfully challenged a department rule as
violating provisions of law, appeal the district court's
denial of their request for attorney fees and costs.
A. Horvath, F. Thomas Hecht, and Tina B. Solis of Nixon
Peabody LLP, Chicago, Illinois, Rita Bettis Austen of ACLU of
Iowa Foundation Inc., Des Moines, and John Knight of ACLU
Foundation LGBT & HIV Project, Chicago, Illinois, for
J. Miller, Attorney General, and Matthew K. Gillespie,
Assistant Attorney General, for appellee.
by Vaitheswaran, P.J., and Potterfield and Mullins, JJ.
Gamble, S.J., takes no part.
Good and Carol Beal successfully challenged a regulation
adopted by the Iowa Department of Human Services (DHS) that
prohibited Iowa Medicaid coverage of surgical procedures
related to "sex reassignment" and "gender
identity disorders." See Iowa Admin. Code r.
441-78.1(4). In a recent ruling, our supreme court determined
the rule's exclusion of coverage for gender-affirming
procedures violates the Iowa Civil Rights Act (ICRA), which
includes "gender identity" as a protected
characteristic. See Good v. Iowa Dep't of Human
Servs., 924 N.W.2d 853');">924 N.W.2d 853, 862-63 (Iowa 2019).
case, Good and Beal appeal the district court ruling denying
their application for attorney fees and costs incurred in
their challenge of the regulation. They brought their request
for fees under the ICRA, see Iowa Code §
216.16(6) (2018), and the Iowa Equal Access to Justice Act,
see id. § 625.29. The district court determined
neither statute permitted an award of fees and denied the
request. Good and Beal maintain the district court erred in
its interpretation of the statutes; they ask us to reverse
the denial of their request and remand to the district court
for the determination of the amount of reasonable attorney
Background Facts and Proceedings.
early 2017, Good sought Medicaid preapproval of expenses for
an orchiectomy. The managed care organization (MCO) denied
the request based on Iowa Administrative Code rule
441-78.1(4). Good initiated an internal appeal, which
the MCO denied. Good then appealed the MCO's decision to
DHS, arguing the denial of her request violated the
ICRA's prohibition against gender-identity and sex
discrimination and violated the Iowa
Constitution.Following a hearing, an administrative law
judge (ALJ) issued a proposed decision affirming the
MCO's denial. The ruling enumerated the evidence and
arguments presented before noting, "Whatever the merits
of [Good's] claims, an administrative proceeding such as
this can only preserve and not decide claims whose resolution
is entrusted only to those wielding judicial authority. This
includes deciding whether the MCO acted appropriately in
denying [Good's] prior authorization request."
(Footnote omitted.) Good appealed the proposed decision to
the Director of DHS, who affirmed the ALJ's proposed
decision and adopted it as the agency's final decision.
Good filed a petition for judicial review in the district
separate proceedings, Beal requested Medicaid preapproval of
expenses for vaginoplasty, penectomy, bilateral orchiectomy,
clitoroplasty, urethroplasty, labiaplasty, and perineoplasty
to treat her gender dysphoria. The MCO denied her request,
stating that gender reassignment surgery is not a covered
benefit under Medicaid. Beal sought internal review, and the
MCO denied her appeal, relying on rule 441-78.1. Beal
challenged the MCO's decision to DHS. After a hearing, an
ALJ issued a proposed decision affirming the MCO's
decision. Like in Good's case, the ALJ noted the agency
lacked authority to decide the merits of Beal's claims
that the administrative rule in question violated the Iowa
Constitution. However, the proposed decision considered
Beal's claim that the rule violated the ICRA. The ALJ
considered "whether sex reassignment surgery prohibited
by an Iowa Administrative Code Medicaid rule properly falls
within the parameters of a public accommodation," before
concluding the MCO's decision had to be affirmed due to
current case law. Beal appealed the proposed decision to the
Director of DHS, who adopted the proposed decision as the
final agency action. Beal filed a petition for judicial review.
upon the joint request of all parties, the district court
consolidated the two cases.
June 2018 ruling, the district court determined the
challenged regulation violated the ICRA's prohibition
against discrimination based on gender identity. As
previously noted, this ruling was ultimately affirmed by our
supreme court. See Good, 924 N.W.2d at 856.
thereafter, Good and Beal filed an application for attorney
fees and costs in the amount of $467, 285.67. They based
their request on two separate statutory theories of recovery.
DHS resisted, arguing section 216.16 did not apply because
the petitioners did not bring their case under ICRA
procedures and section 625.29 did not apply because two
exceptions to the fee-shifting provision prevented the
petitioners from recovering fees and costs. Additionally, DHS
maintained the fees requested were unreasonable.
district court agreed with DHS that the statutes relied upon
did not allow the petitioners to recover fees and costs. Good
and Beal appeal.
Standard of Review.
review the district court's interpretation of statutes
for correction of errors at law. Colwell v. Iowa
Dep't of Human Servs., 923 N.W.2d 225, 232 (Iowa