4:10-cv-01564 #186

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Edward Gregory (CSBN 128375)
Jennifer Morrow (CSBN 185964)
STEPTOE & JOHNSON LLP
633 West Fifth Street, Suite 700
Los Angeles, California 90071
Telephone: (213) 439-9400
Facsimile: (213) 439-9599
egregory@steptoe.com
jmorrow@steptoe.com

Attorneys for Defendants Board of Administration of
California Public Employees Retirement System (CalPERS)
and Anne Stausboll (collectively State Defendants)

JOYCE R. BRANDA
Acting Assistant Attorney General
KATHLEEN R. HARTNETT
Deputy Assistant Attorney General
ARTHUR R. GOLDBERG (DC Bar No. 180661)
Assistant Branch Director
JEAN LIN (NY Bar No. 4074530)
Senior Trial Counsel
United States Department of Justice
Civil Division
Federal Programs Branch
20 Massachusetts Ave., N.W.
Washington, DC 20530
(202) 514-3716
(202) 616-8470 (Fax)
jean.lin@usdoj.gov

Attorneys for Federal Defendants

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA (OAKLAND DIVISION)

MICHAEL DRAGOVICH, et al., on behalf of
themselves and all others similarly situated,

Plaintiffs,
v.
UNITED STATES DEPARTMENT OF THE
TREASURY, et al.,
Defendants.
Case No. CV 4:10-01564-CW

STATE AND FEDERAL
DEFENDANTS JOINT BRIEF:
(A) IN OPPOSITION TO
PLAINTIFFSMOTIONS [DOCKET
NO. 185]; AND
(B) IN SUPPORT OF CROSS-
MOTIONS FOR SUMMARY
JUDGMENT

Case4:10-cv-01564-CW Document186 Filed09/25/14 Page1 of 40

Page i

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

TABLE OF CONTENTS

PAGE

SUMMARY OF THIS JOINT BRIEF AND STATEMENT OF ISSUES......................................1

BACKGROUND .............................................................................................................................3

ARGUMENT ...................................................................................................................................6

I. STATE DEFENDANTS OPPOSITION ............................................................................6

A. There Is No Basis For Notice Relief ..............................................................................6

B. There Is No Basis For Discounted Premiums ................................................................8

C. There Are No Grounds For A Supplemental Complaint .............................................12

D. There Are No Grounds To Reopen Or Compel Discovery ..........................................13

II. DOMESTIC PARTNERS SUMMARY ADJUDICATION MOTION
SHOULD BE DENIED AS TO STATE DEFENDANTS ................................................14

III. STATE DEFENDANTS SUMMARY JUDGMENT MOTION .....................................15

IV. THIS COURT SHOULD ENTER JUDGMENT FOR FEDERAL
DEFENDANTS .................................................................................................................16

A. The Domestic Partners Equal Protection Challenge to
7702B(f) Fails ...........................................................................................................16

1. Section 7702B(f) Does Not Classify on the Basis of
Sexual Orientation ...........................................................................................16

2. Section 7702B(f) Now Operates Neutrally Under This
Courts Reasoning ............................................................................................18

3. Plaintiffs Claims of Discriminatory Effect Are Speculative
And Meritless ...................................................................................................19

4. Section 7702B(f) Satisfies Rational Basis Review ..........................................22

5. The Distinction Between Marriage and Domestic Partnership
Is Rational ........................................................................................................26

B. Plaintiffs Substantive Due Process Claim Has No Merit ...........................................28

CONCLUSION ..............................................................................................................................30


Page ii

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

TABLE OF AUTHORITIES

CASES PAGE(S)

Armour v. City of Indianapolis,
132 S. Ct. 2073 (2012) .................................................................................................22, 26

Ashcroft v. Iqbal,
556 U.S. 662 (2009) ...........................................................................................................17

Baker v. City of Concord,
916 F.2d 744 (1st Cir. 1990) ..............................................................................................25

Banas v Dempsey,
742 F.2d 277 (6th Cir 1984) ..............................................................................................11

Baskin v. Bogan,
Nos. 14-2386, 14-2387, 14-2388, 14-2526, -- 3d -- 2014 WL 4359059
(7th Cir. Sept. 4, 2014).......................................................................................................20

Califano v. Jobst,
434 U.S. 47 (1977) .............................................................................................................29

Dandridge v. Williams,
397 U.S. 471 (1970) ...........................................................................................................25

DeShaney v. Winnebago Cnty Dep't of Soc. Servs.,
489 U.S. 189 (1989) ...........................................................................................................29

Deerbrook Pavilion, LLC v. Shalala,
235 F.3d 1100 (8th Cir. 2000) ...........................................................................................15

Diaz v. Brewer,
656 F.3d 1008 (9th Cir. 2011) ...........................................................................................19

Douglas v. Talk America, Inc.,
266 F.R.D. 464 (C.D. Cal 2010) ....................................................................................8, 14

Dowell v Board of Educ. of the Oklahoma City Public Schools,
8 F.3d 1501 (10th Cir. 1993) .............................................................................................13

Dragovich v. U.S. Dept of the Treasury,
764 F. Supp. 2d 1178 (N.D. Cal. 2011) .............................................................................24

Dragovich v. U.S. Dept of the Treasury,
848 F. Supp. 2d 1091 (N.D. Cal. 2012) .......................................................................25, 29

Dragovich v. U.S. Dept. of Treasury,
872 F. Supp. 2d 944 (N.D. Cal. 2012) ....................................................................... passim

Edelman v. Jordan,
415 U.S. 651 (1974) ...........................................................................................................11


Page iii

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Eid v. Alaska Airlines,
621 F.3d 858 (9th Cir. 2010) .............................................................................................12

FCC v. Beach Commc'ns, Inc.,
508 U.S. 307 (1993) ...........................................................................................................25

Feske v. MHC Thousand Trails Ltd. Partnership,
2013 WL 1120816 (N.D. Cal.) ......................................................................................8, 14

Garamendi v. Altus Finance S.A.,
282 F.R.D. 270 (C.D. Cal. 2012) .......................................................................................13

Green v. Mansour,
474 U.S. 64 (1985) .........................................................................................................6, 11

Heller v. Columbia Edgewater Country Club,
195 F.Supp.2d 1212 (D. Or. 2002) ....................................................................................13

Heller v. Doe,
509 U.S. 312 (1993) .....................................................................................................25, 26

Hernandez v. New York,
500 U.S. 352 (1991) ...........................................................................................................17

Hollingsworth v. Perry,
133 S. Ct. 2652 (2013) ............................................................................................... passim

Int'l Union v. Karr,
994 F.2d 1426 (9th Cir.1993) ..............................................................................................9

Knutson v. Blue Cross & Blue Shield of Minn.,
254 F.R.D. 553 (D. Minn. 2008)........................................................................................14

Lierboe v. State Farm Mut. Auto. Ins. Co.,
350 F.3d 1018 (9th Cir. 2003) .............................................................................................9

Macy v. Holder (E.E.O.C.),
2012 WL 1435995 .............................................................................................................13

In re Marriage Cases,
183 P.3d 384 (Cal. 2008) .............................................................................................23, 28

Merrifield v. Lockyer,
547 F.3d 978 (9th Cir. 2008) .............................................................................................25

Milliken v. Bradley,
433 U.S. 267 (1977) ...........................................................................................................11

Native Village of Noatak v. Blatchford,
38 F.3d, 1505 (9th Cir. 1994) ............................................................................................15

Nichols v. Azteca Restaurant Ents., Inc.,
256 F.3d 864 (9th Cir. 2001) .............................................................................................13

Page iv

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Omohundro v. United States,
300 F.3d 1065 (9th Cir. 2002) ...........................................................................................26

Perry v. Brown,
671 F.3d 1052 (9th Cir. 2012), rev'd on other grounds by
Perry, 133 S. Ct. 2652 (2013) ...........................................................................................28

Pers. Adm'r of Mass. v. Feeney,
442 U.S. 256 (1979) ...........................................................................................................17

Price Waterhouse v. Hopkins,
490 U.S. 228 (1989) ...........................................................................................................13

Raich v. Gonzales,
500 F.3d 850 (9th Cir. 2007) .............................................................................................29

Reed v. Bowen,
849 F.2d 1307 (10th Cir. 1988) ...........................................................................................8

Regan v. Taxation with Representation of Wash.,
461 U.S. 540 (1983) ...........................................................................................................30

Ries v. Arizona Beverages USA LLC,
287 F.R.D. 523 (N.D. Cal. 2012) .......................................................................................10

Russell v. Hug,
275 F.3d 812 (9th Cir. 2002) .............................................................................................24

Seven Up Pete Venture v. Schweitzer,
523 F.3d 948 (9th Cir. 2008) ...............................................................................................6

Skidmore v. Swift & Co.,
323 U.S. 134 (1944) ...........................................................................................................26

SmithKline Beecham Corp. v. Abbott Labs.,
740 F.3d 471 (9th Cir. 2014) .............................................................................................22

Terveer v. Billington (D.D.C.),
2014 WL 1280301 .............................................................................................................13

Texaco, Inc. v. Ponsoldt,
939 F.2d 794 (9th Cir. 1991) .............................................................................................12

Tualatin Valley Builders Supply, Inc. v. United States,
522 F.3d 937 (9th Cir. 2008) .............................................................................................26

USDA v. Moreno,
413 U.S. 528 (1973) ...........................................................................................................19

U.S. v. Simmonds,
235 F.3d 826 (3d Cir. 2000)...............................................................................................10


Page v

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States v. Haggar Apparel Co.,
526 U.S. 380 (1999) ...........................................................................................................23

United States v. Mead Corp.,
533 U.S. 228 (2001) ...........................................................................................................26

United States v. Windsor,
133 S. Ct. 2675 (2013) ............................................................................................... passim

Vance v. Bradley,
440 U.S. 93 (1979) .............................................................................................................25

Village of Arlington Heights v. Metro. Hous. Dev. Corp.,
429 U.S. 252 (1977) .....................................................................................................17, 18

Village of Willowbrook v. Olech,
528 U.S. 562 (2000) ...........................................................................................................17

Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541 (2011) .......................................................................................................10

Washington v. Davis,
426 U.S. 229 (1976) ...........................................................................................................17

Washington v. Glucksberg,
521 U.S. 702 (1997) ...........................................................................................................29

Wayte v. United States,
470 U.S. 598 (1985) ...........................................................................................................17

Ex parte Young,
209 U.S. 123 (1908) ...........................................................................................6, 10, 11, 15

Zablocki v. Redhail,
434 U.S. 374 (1978) ...........................................................................................................21

FEDERAL STATUTES

5 U.S.C. 553(b)(A)......................................................................................................................26

26 U.S.C. 213 ................................................................................................................................4

26 U.S.C. 7702B ................................................................................................................. passim

26 U.S.C. 7702B(f) ............................................................................................................. passim

42 U.S.C. 1983 ..............................................................................................................................2

42 U.S.C. 1988 ............................................................................................................................15

Health Insurance Portability and Accountability Act (HIPAA),
Pub. L. No. 104-191, 110 Stat. 1936 (1996) ..................................................................4, 18


Page vi

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

STATE STATUES

750 Ill. Comp. Stat. Ann. 75/20 ..................................................................................................27

Cal. Fam. Code 297 ....................................................................................................................28

Cal. Fam. Code 297(b)(4) ...........................................................................................................14

Cal. Fam. Code 297.5(g) .............................................................................................................15

Cal. Fam. Code 300 ....................................................................................................................28

Cal. Fam. Code 426 ....................................................................................................................20

Cal. Gov't Code 21661 ........................................................................................................ passim

Del. Code Ann. tit. 13, 212 .........................................................................................................27

Del. Code Ann. tit. 13, 214 .........................................................................................................27

Haw. Rev. Stat. Ann. 572B-9 .....................................................................................................27

Nev. Rev. Stat. Ann. 122A.200 ..................................................................................................27

N.J. Stat. Ann. 37:1-31................................................................................................................27

N.J. Stat. Ann. 37:1-32................................................................................................................27

Or. Rev. Stat. 106.340 .................................................................................................................27

R.I. Gen. Laws 15-3.1-6. .............................................................................................................27

R.I. Gen. Laws 15-3.1-7. .............................................................................................................27

LEGISLATIVE MATERIALS

H.R. Rep. No. 104-496(I), at 115 (1996) .......................................................................................23

H.R. Rep. No. 104-736 at 302-03 (Conf. Rep.) (1996), reprinted in
1996 U.S.C.C.A.N. 1990, 2116 .........................................................................................23

REVENUE RULINGS

Revenue Ruling 58-66, 1958-1 C.B. 60, 1958 WL 10653 (1958) .................................................27

Revenue Ruling 2013-17, 2013-38 I.R.B. 201, 2013 WL 4607583 (Aug. 30, 2013)..............26, 27

FEDERAL RULES OF CIVIL PROCEDURE

Fed. R. Civ. P. 15(a) ......................................................................................................................12

Page vii

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Fed. R. Civ. P. 15(d) ......................................................................................................................12

Fed. R. Civ. P. 23(b)(2)....................................................................................................................9

Fed. R. Civ. P. 23(c)(2)(A) ..............................................................................................................8

Fed. R. Civ. P. 26(b)(1)....................................................................................................................8

MISCELLANEOUS

William W. Schwarzer, et al., Cal. Practice Guide: Federal Civil Proc.
Before Trial 8:1730 (The Rutter Group 2014) ................................................................12


Page viii

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
PLEASE TAKE NOTICE that, pursuant to Fed. R. Civ. P. 56, State and Federal
Defendants will move this Court on Thursday, November 20, 2014, at 2:00 pm, or as soon
thereafter as counsel may be heard, in Courtroom 2, 4th Floor, 1301 Clay Street, Oakland,
California, for an order granting:
(1) Federal Defendants cross-motion for summary judgment regarding Plaintiffs First
Claim for Relief asserting a substantive due process violation with respect to registered domestic
partners; and Second Claim for Relief asserting an equal protection violation insofar as the claim
relates to registered domestic partners; and
(2) State Defendants cross-motion for partial summary judgment as to both 42 U.S.C.
1983 claims against them, on the grounds that changes in the law moot prospective relief.
The following are the points and authorities in support of their cross-motions as well as in
opposition to Plaintiffs motion for summary judgment.

State and Federal Defendants Notice of Summary Judgment Motions

State and Federal Defendants Joint Brief: (A) in Opposition to Plaintiffs Motions [Dkt. No. 185]
and (B) in Support of Cross-Motions for Summary Judgment, Case No. CV 4:10-01564-CW
Page 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
SUMMARY OF THIS JOINT BRIEF AND STATEMENT OF ISSUES
State and Federal Defendants respectfully submit this joint brief, as ordered by this Court,
in opposition to Plaintiffs dispositive and non-dispositive motions (Dkt. No. 185) and in support
of their respective motions for summary judgment.
State Defendants oppose four of Plaintiffs five motions: (1) for class notice; (2) for
additional remedies; (3) for leave to supplement the complaint; and (5) to compel limited
discovery from State Defendants. State Defendants do not oppose Plaintiffs motion (4), for
summary adjudication as to domestic partners, except to the extent Plaintiffs assert a state
violation. But State Defendants explain why, if motion (4) is granted as to Federal Defendants,
the ruling should apply to only those domestic partner class members who registered before
California resumed same-sex marriage in June 2013. State Defendants also move for partial
summary judgment, since changes in the law moot all prospective relief claims against them.
Federal Defendants oppose the domestic partner plaintiffs motion for summary
adjudication and cross move for summary judgment on those plaintiffs equal protection and
substantive due process challenges to 7702B(f) of the Internal Revenue Code, 26 U.S.C.
7702B(f).
1
That section provides that enrollees in a state-maintained long-term care (LTC)
plan can receive certain tax benefits if the plans enrollment is limited to state employees, their
spouses and other specified relatives not including domestic partners. The domestic partner
plaintiffs allege that the provision discriminated against them on the basis of sexual orientation.
This Court previously agreed, finding that the omission of domestic partners from the list of
eligible family members in 7702B(f) was a proxy for homosexuality and violated equal
protection because same-sex couples were barred from civil marriage by California law and
relegated to domestic partnership. 872 F. Supp. 2d 944, 960-61 (N.D. Cal. 2012).
While the appeal was pending, the Supreme Court decided Hollingsworth v. Perry, 133
S. Ct. 2652 (2013), and United States v. Windsor, 133 S. Ct. 2675 (2013). In light of those

1
Federal Defendants note that the four non-dispositive motions State Defendants oppose are not
directed at Federal Defendants, but agree that those motions should be denied.


Page 2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
decisions and Californias subsequent resumption of same-sex marriage, the Court of Appeals
vacated that portion of this Courts judgment concerning the domestic partners and remanded it
for further proceedings. (See Dkt. No. 147, p. 2.) Federal Defendants urged that the change in
the legal landscape has extinguished Plaintiffs equal protection claim because even under this
Courts prior rationale, 7702B(f) now operates neutrally toward California same- and opposite-
sex couples; the domestic partner class members can now obtain the relief they seek in the
Complaintenrollment eligibility in the LTC plan maintained by the California Public
Employees Retirement System (CalPERS)simply by marrying. (See Dkt. No. 160-1, 161.)
Plaintiffs acknowledged that many class members may choose to marry, but hypothesized
that some may no longer be able to meet Californias prerequisites for marriage due to changed
circumstances. (See Dkt. No. 159, p. 5.) At a hearing held on April 3, 2014, this Court observed
that the hypothetical class is wildly different from the class that we had before, Hearing Tr. at
4, and suggested that class counsel start by amending the complaint . . . then proceed to move
for class certification, have a class rep[resentative] that represent[s] that class, and carry on. Id.
at 15. Despite having had months to locate plaintiffs with standing to assert the alleged
continuing injury, class counsel did not move to amend the Complaint by the time the case was
proceeding to a case management conference. (See Dkt. No. 180.) This Court cancelled the
conference and ordered Plaintiffs to address, among other things, leave to file an amended
complaint, and to attach any proposed amended complaint. (Dkt. No. 181, p. 1.)
Plaintiffs now move for leave to amend the Complaint and for summary adjudication,
among other things. The proposed supplemental complaint seeks to add a sex discrimination
claim against parties not currently in this case, but is otherwise silent on the hypothetical class
that Class Counsel speculates may exist, even when Class Counsels brief continues to rely on
the alleged continuing injury suffered by the hypothetical class. Class Counsels assertions of
alleged marriage barriers, therefore, are not properly before this Court.
Plaintiffs argue that even for class members who are able to marry, the need to marry is
itself a continuing discriminatory effect of 7702B(f). This is so, according to Plaintiffs,

Page 3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
because they previously already obtained a formal legal relationship under California law by
paying a $33 fee and completing a one-page form to register as domestic partners. Federal
Defendants submit that this argument has no merit. There is no causal relationship between
7702B(f)s federal tax consequences and Plaintiffs decision to register as domestic partners.
To the extent Plaintiffs find that they were unfairly subjected to the legal hurdle of domestic
partnership registration given their preference for marriage, this is not the case to redress it, nor
can Plaintiffs contort it to make out a federal constitutional claim as to 7702B(f). And, rather
than constituting a continuing legal injury of past discrimination, the ability to marry now
actually redresses the discrimination and is a prerequisite to receiving any federal marital
benefits, just like opposite-sex couples must marry to obtain such benefits. This Court
previously found that California same-sex couples were relegated to domestic partnerships
because they were unable to marry. Now that marriage is available to them, class members, like
opposite-sex couples, have a straightforward path to enrollment eligibility, and cannot be heard
to complain that the need to marry is somehow a continuing injury attributable to 7702B(f).
Plaintiffs are left to argue that 7702B(f)s differential treatment between married
couples and domestic partners violates equal protection. This distinction is not a classification
based on sexual orientation because both categories contain same- and opposite couples, and thus
is subject to the highly deferential rational basis review. Federal Defendants submit that the
marriage classification easily satisfies rational basis review because in the area of federal
taxation, drawing the line at marriage is a rational basis for ensuring national uniformity,
efficiency and fairness in the administration of the federal tax code.
BACKGROUND
This case is brought by five California same-sex couples. Four of the couples are
married, and one couple is registered as domestic partners but is not married. 2d Am. Compl.
18-33. Each couple includes a spouse or partner who is a state employee eligible to enroll in
CalPERSs LTC plan. Id. At the time of this suit, each couple also included a spouse or partner
who wanted to enroll in CalPERSs LTC plan but could not do so, either because same-sex

Page 4
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
spouses were not recognized as spouses under federal law under Section 3 of the Defense of
Marriage Act (DOMA), or because domestic partners were not included in the list of eligible
relatives under 7702B(f) of the Internal Revenue Code. This Court later certified a class that
included [p]resent and future CalPERS members who are in legally recognized same-sex
marriages and registered domestic partnerships together with their spouses and partners, who as
couples and families are denied access to the CalPERS Long-Term Care Program on the same
basis as similarly situated present and future CalPERS members who are in opposite-sex
marriages, and their spouses. (Dkt. No. 92, p. 2.)
Section 7702B was enacted by Congress in 1996 as part of the Health Insurance
Portability and Accountability Act (HIPAA), Pub. L. No. 104-191, 110 Stat. 1936 (1996), to
provide favorable tax treatment to LTC insurance plans that meet certain specified requirements.
An enrollee in a qualified 7702B LTC plan may receive a tax benefit in the following two
ways: first, she may deduct the premiums as an itemized deduction if her total annual medical
expenses, inclusive of the LTC insurance premiums, exceed 10% of her gross adjustable income,
26 U.S.C. 213(a), (d)(1), (d)(10); and second, if and when she receives payments from the LTC
plan, she can exclude the payments from gross income. Id. 104(a)(3), 7702B(a)(2), (d).
Subsection (f) of 7702B makes clear that enrollees in a state-maintained LTC plan can
receive these same favorable tax treatments as do enrollees in a qualified private 7702B plan, if
the state LTC plans coverage is limited to state employees, their spouses, and certain individuals
who are related to the taxpayer as described in another part of the tax codenamely,
subparagraphs (A) through (G) of 152(d)(2), which define the term qualifying relatives for
purposes of determining who may be the taxpayers dependent. See 7702B(f)(2)(C).
Subparagraph (H) of 152(d)(2), which is another category of qualifying relatives that
conceivably includes domestic partners, cousins, as well as a host of other individuals, is not
included for purposes of determining eligibility for 7702B(f).
CalPERSs LTC program is maintained as a 7702B(f) plan and has approximately
160,000 participants. (Dkt. No. 94 [2d. Am. Compl. 60]; Dkt. No. 26 [CalPERS Answer

Page 5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
10, 47].) The program is independent from Californias Public Employees Retirement Fund
and from the retirement and health benefits programs administered by CalPERS. Cal. Gov. Code
21661(i), (j). It is a not a covered employee benefit and is entirely funded by member
premiums. Proposed Premium Increase Fact Sheet, CalPERS 000003. Unlike health insurance
where an employee may pay a single premium for an entire family, each enrollee in CalPERSs
LTC program is underwritten separately. (Dkt. No. 26 [CalPERS Answer 50].) She must also
use after-tax dollars to pay the premiums. (Id. 47.) Previously California law allowed only
spouses, parents, adult siblings, and spouses parents to enroll, but effective January 1, 2014,
adult children and domestic partners are also eligible to enroll, subject to federal law, including
7702B(f). Cal. Gov. Code 21661(d) (2014).
On May 24, 2012, this Court entered judgment in favor of Plaintiffs, holding that Section
3 of DOMA violated the equal protection rights of the married couples and that 7702B(f)
violated the equal protection rights of the domestic partners. 872 F. Supp. 2d at 946-47. The
Court permanently enjoined State Defendants from denying class members enrollment in
CalPERSs LTC plan on the basis of Section 3 of DOMAs exclusion of same-sex spouses and
7702B(f)s exclusion of domestic partners. Id. at 964. The Court also enjoined Federal
Defendants from disqualifying the CalPERS long-term care plan from favorable tax status
under 7702B(f) based on State Defendants compliance with the terms of th[e] injunction.
Id. The Court later stayed enforcement of the judgment pending appeal. (Dkt. No. 139.)
Following the Supreme Courts decisions in Windsor and Perry and upon Federal
Defendants withdrawal of their appeal with respect to the married plaintiffs, the Court of
Appeals vacated and remanded that portion of this Courts judgment concerning the domestic
partners, with instruction to conduct further proceedings in light of subsequent legal
developments . . . as well as the resumption of marriage licenses for same-sex couples in
California. (Dkt. No. 147, p. 2.) The parties briefed the import of the subsequent legal
developments (Dkt. Nos. 159, 160-1, 161, 163), and this Court held a hearing on April 3, 2014.
Thereafter, after the parties reported significant disagreements as to how to proceed, (see Dkt.

Page 6
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
No. 180), this Court cancelled the then-scheduled case management conference and directed
Plaintiffs to file a brief addressing discovery, leave to file an amended complaint with any
proposed amended complaint attached, summary judgment on all remaining claims, and on any
remedy requested, and any other open issues. (Dkt. No. 181, p. 1.) The Court also directed
Federal and State defendants to file a joint brief, opposing Plaintiffs motions and cross moving
to dismiss or for summary judgment. Id.
Plaintiffs have moved: (1) for class notice; (2) for additional remedies; (3) for leave to
supplement the complaint; (4) for summary adjudication in favor of domestic partner class members,
and (5) to compel limited discovery from State Defendants. State and Federal Defendants oppose those
motions and cross move for summary judgment as set out below.
ARGUMENT
I. STATE DEFENDANTS OPPOSITION
A. There Is No Basis For Notice Relief.
State Defendants have asserted the Eleventh Amendment as a defense. (Dkt. No. 26
[Affirm. Defenses, 1-3].) Thus, they are subject to federal court jurisdiction only under the
prospective compliance exception first set out in Ex parte Young, 209 U.S. 123 (1908). For that
exception to apply, the requested relief must be truly prospective and redress an ongoing
violation of federal law. Seven Up Pete Venture v. Schweitzer, 523 F.3d 948, 956 (9th Cir. 2008).
As a result, a federal court cannot command the kind of notice Plaintiffs propose in a stand-alone
order. That kind of notice-relief can only be required as part of an order granting prospective
relief from a state defendants ongoing violation of federal law. Green v. Mansour, 474 U.S. 64,
67-74 (1985).
2
Absent an ongoing violation, no order can issue. Id. (where federal law changes
during a case, and state defendant is engaged in no ongoing violation, there is no jurisdiction to
order prospective relief or notice).

2
Notice relief is what Plaintiffs ask for here: notice explaining how the case has come out and
what further steps may be taken. See Green, 474 U.S. at 75, n.1 (dissent).


Page 7
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
There is no ongoing violation here. The Court found a violation and issued a prospective
relief order two years ago. Dragovich v. U.S. Dept. of Treasury, 872 F. Supp. 2d 944 (N.D. Cal.
2012). Plaintiffs did not ask for notice. Last year, while the order was on appeal, the law
changed. The Supreme Court struck down the DOMA and freed federal authorities to recognize
same-sex marriage in U.S. v Windsor,133 S. Ct. 2675 (2013), and dismissed an attempt to
resuscitate Californias Proposition 8 bar to same-sex marriage in Hollingsworth v. Perry, 133 S.
Ct. 2652 (2013).
Now that Federal Defendants and California both recognize same-sex marriage, there is
no possibility of an ongoing violation as to married class members. Opposite-sex spouses have
had access to CalPERS Long-Term Care Program (LTCP) all along. Now same-sex spouses do
as well. (Declaration of Tyrone Espinoza (Espinoza Decl.) 7.)
Nor can State Defendants be charged with an ongoing violation as to domestic partners.
If Federal Defendants are correct, the right to marry affords same-sex domestic partners all the
access they need to the LTCP. But even if the Court were to agree with Plaintiffs, overturn
federal tax law, and afford domestic partners LTCP access, there would be no reason to order
State Defendants to comply. California amended its LTCP statute last year to grant domestic
partners access [e]xcept as prohibited by the Internal Revenue Code. Cal. Govt Code 21661
(e); Plaintiffs Opening Brief (Pls. Opening Br.), p. 14. There are no grounds for a notice order
to CalPERS and the Court should deny Plaintiffs motion.
Even apart from the Eleventh Amendment, the Court should decline to order notice.
Class Counsel hope notice may lead class members to contact them. (See Pls. Opening Br., pp.
6-7.) They would like to recruit new representatives to pursue a case on behalf of domestic
partners they speculate would apply for LTCP coverage, but who either do not want to marry
(engage in what Counsel call repeated relationship recognition) or face barriers to marriage.
(See Dkt No. 180 [July 25, 2014 Jt. Case Mgmt. Stmt., pp. 3-4, 9].) As Federal Defendants have

Page 8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
noted, those hypothetical claims . . . constitute an entirely new case with no plaintiffs.
3
(Id. at
pp. 4-5.)
Class Counsel have no right to use the power of the courts, through the Rules of Civil
Procedure, to find a client who could be intervened as a plaintiff in a suit which has no party
plaintiff. See Reed v. Bowen, 849 F.2d 1307, 1313-14 (10th Cir. 1988) (this is true for class
action cases analyzed under [both Rule] 23 and [Rule] 26).
4
The Court should deny this motion
for Rule 23(c)(2)(A) notice.
The third reason to reject Plaintiffs notice motion is that CalPERS cannot identify
potential class members. Plaintiffs suggest through Class Counsels unsworn declaration that
CalPERS compared a domestic partner registry against an LTCP participant roster and came up
with a list of potential class members. It did not. CalPERS has created no such list because it has
no way to segregate same-sex from opposite-sex domestic partnerships. (See Declaration of
Jennifer Morrow (Morrow Decl.) 4-8; Espinoza Decl. 5-6.) The Court should refuse
Plaintiffs proposal to send notice to potential class members CalPERS cannot identify.
5

B. There Is No Basis For Discounted Premiums.
Plaintiffs move for an order that class members be allowed to purchase CalPERS LTCP
insurance for the premiums they would have paid in the year they originally sought to enroll their
same-sex partner. (Pls. Opening Br., p. 10.) The Court should deny that motion for four
reasons.

3
In their declaration, the domestic partner representatives neither objected to marrying nor
described any barrier to marrying. In 2008, they opted to wait and see what would happen with
Proposition 8. By 2012, they were pained and disappointed it passed and wanted the right to
marry. (See Dkt. No. 111-16, 15-20.)

4
See also Douglas v. Talk America, Inc., 266 F.R.D. 464, 467 (C.D. Cal. 2010) (citing Reed and
rejecting discovery aimed at finding a new class representative); Feske v. MHC Thousand Trails
Ltd. Partnership, 2013 WL 1120816, *4-*5 (N.D. Cal.) (plaintiffs not entitled to discovery
from [d]efendants to find replacement class representatives and must find any additional class
members on their own).

5
There is no need to order CalPERS to announce that same-sex spouses may apply for LTCP
coverage. It plans to say so in its LTCP communications. (See Espinoza Decl. 10.)


Page 9
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
First, no Plaintiff is in a position to ask for the discount. Married class members have a
res judicata problem. See, e.g., Intl Union v. Karr, 994 F.2d 1426,1429-32 (9th Cir.1993) (after
final judgment on the merits in earlier action between same parties on same causes of action, res
judicata bars not only all claims that were actually litigated, but also all claims that could have
been asserted in the prior action [internal quotation and citation omitted]).
Married class members never asked for a discount the first time round, just access to the
LTCP. The Court granted them access in a 2012 order that went up on appeal after being entered
as a judgment. (Dkt. Nos. 124, 125, 132.) That appeal died with the Supreme Courts June 2013
Windsor decision. Married class members obtained judgment on the merits two years ago. Res
judicata bars them from waiting until now to claim what they could have claimed then.
Domestic partner class members have a standing problem. Named plaintiffs must have
standing to gain the relief they seek on behalf of a class. See, e.g., Lierboe v. State Farm Mut.
Auto. Ins. Co., 350 F.3d 1018, 1022-23 (9th Cir. 2003) (named plaintiffs must suffer injury
themselves, not simply allege injury to other unidentified members of class they purport to
represent). Here, no named Plaintiff can point to premiums they would have paid in the year
they originally sought to enroll their same-sex [domestic] partner. None sought to enroll a
domestic partner in the LTCP. (Dkt. No. 111-16 [Decl. 10].)
The Court should find no one can pursue premium discounts for either married or
domestic partner Plaintiffs and deny this motion.
Second, premium discounts would require individualized determinations for each class
member and cannot be awarded in a Rule 23(b)(2) case like this. The key to the (b)(2) class is
the indivisible nature of the injunctive or declaratory remedy warrantedthe notion that the
conduct is such that it can be enjoined or declared unlawful only as to all of the class members or
as to none of them . . . . In other words, Rule 23(b)(2) applies only when a single injunction or
declaratory judgment would provide relief to each member of the class. It does not authorize
class certification when each individual class member would be entitled to a different injunction
or declaratory judgment against the defendant. Similarly, it does not authorize class certification

Page 10
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
when each class member would be entitled to an individualized award of monetary damages.
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2557 (2011); see also Ries v. Arizona
Beverages USA LLC, 287 F.R.D. 523, 541-42 (N.D. Cal. 2012) (no individualized assessments
for (b)(2) monetary relief, whether understood as legal damages or an equitable remedy).
Awarding class members the reduced premiums they would have paid in the year they
originally sought to enroll their same-sex partner would require a determination as to whether
each individual class member sought to enroll their partner in the LTCP, when they did so,
whether each partner would have qualified, what coverage options each would have chosen at
the time, whether each could and would have continued to pay premiums to maintain coverage
since then, and whether and how each would have modified coverage options to reduce
premiums. (See Espinoza Decl. 11-13.)
The Court should hold premium discounts are unavailable under Rule 23(b)(2).
Third, the Eleventh Amendment bars the proposed discount for two reasons. One,
Plaintiffs call the discount restitution for constitutional violations suffered (Pls. Opening Br.,
p. 9). But what they actually ask for-that they be given discounts so they would pay only lower,
earlier LTCP premium rates they say they lost out on because of those violations (id. at p. 10)-is
a form of damages. U.S. v. Simmonds, 235 F.3d 826, 833-34 (3d Cir. 2000)(value of insurance
premium discounts lost due to defendants arson is not restitution for lost property, but amounts
instead to consequential damages).
Two, even if the premium discounts could be seen as something other than damages,
there would be no grounds to order State Defendants to give them because there is no ongoing
violation to justify prospective relief here. Ex parte Young creates an exception to the Eleventh
Amendment only as far as necessary to ensure a state defendant will comply with the
requirements of federal law in the future. See 209 U.S. at 156 (federal court may enjoin state
officials who threaten and are about to commence proceedings ... to enforce ... an
unconstitutional act....). Plaintiffs point out the Ex parte Young exception can support even a
federal court order that has an ancillary effect on the state treasury, so long as that aspect of the

Page 11
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
order is needed to ensure prospective relief.
6

But Plaintiffs Eleventh Amendment problem is more basic than whether their proposed
premium discount would be required for effective prospective relief. (It would not.) No order can
issue in the first place, absent a state defendants ongoing violation of federal law. See Banas v
Dempsey, 742 F.2d 277 (6th Cir 1984) (aff'd sub nom, Green v. Mansour (1985) 474 U.S. 64)
(fundamental requirement of the Young doctrine, ongoing conduct by a state official allegedly
in violation of federal law is no longer present once federal law changes and state defendant
complies; no federal court injunction can issue).
Again, no ongoing violation is possible here. Federal law has changed to afford same-sex
spouses access to the LTCP. And State Defendants now provide access, as they have wanted to
do all along. (See Espinoza Decl. 7.) Even if this Court were to overturn federal tax law and
extend access to same-sex domestic partners, Californias LTCP law now eliminates the
possibility of non-compliance. See Cal. Govt Code 21661(e).
The Court should deny premium discounts under the Eleventh Amendment.
Fourth, a premium discount would not place Plaintiffs in the position they would have
occupied absent the discriminatory conduct. (Pls. Opening Br., p. 10.) It would give them an
advantage over other LTCP participants. Those class members who actually would have earlier
applied to, qualified for, and enrolled in the LTCP would have faced premium hikes since, just
like other participants. (See Espinoza Decl. 11-13.) And that assumes they would have
continued to maintain coverage and stay in the program. (See id.) If so, they would have paid
premiums all along, from enrollment until now. (Id.) Plaintiffs not only suggest they be excused
the premiums everyone else had to pay in the past. They also ask to be awarded lower premiums

6
See Edelman v. Jordan, 415 U.S. 651, 663-64 (1974) (Eleventh Amendment bars retrospective
monetary relief, but not payment of state funds . . . as a necessary consequence of compliance in
the future); Milliken v. Bradley, 433 U.S. 267, 289 (1977) (same). Plaintiffs cite these and other
cases that make the same point. But the point does not apply here. As explained in the text, there
is no ongoing violation to support prospective relief against State Defendants.


Page 12
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
than anyone else has to pay now. The Court should find that would be inequitable and refuse to
order it.
7

C. There Are No Grounds For A Supplemental Complaint.
Rule 15(d) provides a mechanism for parties to file additional causes of action based on
facts that didnt exist when the original complaint was filed. Eid v. Alaska Airlines, 621 F.3d
858, 874 (9th Cir. 2010). Rule 15(d) does not authorize supplemental complaints based on
conduct before the original complaint was filed. Id. at 874-75. Nor does it authorize them based
on changes in the law. See William W. Schwarzer, et al., Cal. Practice Guide: Federal Civil
Proc. Before Trial 8:1730 (The Rutter Group 2014).
Plaintiffs proposed supplemental complaint does not qualify under Rule 15(d). Plaintiffs
concede their new Title VII claim
8
would be based on the very same facts they have all along
challenged as unconstitutional. (Pls. Opening Br., p. 13.) They point instead to a change in the
law: recent case law developments they say have made it possible to now bring a Title VII
claim for sexual orientation discrimination. (Id.) This does not justify a Rule 15(d) filing. The
Court should deny Plaintiffs Rule 15(d) motion and reject the filing of the proposed
supplemental complaint.
9

7
It is possible some class member might allege he or she (a) applied for LTCP coverage as a
same-sex spouse, (b) was turned away before Windsor and Perry were decided, and (c) would
have qualified for LTCP benefits between then and now. That individual might assert benefits
would have become payable so as to end any premium obligation. But there is no reason to
speculate about such a claim here. No one has come forward to make one. And, even if a claim
like that were made, it could not proceed as a class action.

8
The new Title VII claim would be against the State itself and the California Regents, not State
Defendants. But Plaintiffs say that, to effectuate remedies,[ ] State Defendants must remain in
the case. (See Dkt No. 180 [July 25, 2014 Jt. Case Mgmt. Stmt., p. 2].) State Defendants object
to being kept in the case by an improper Rule 15(d) filing.

9
Plaintiffs have not made a Rule 15(a) motion for leave to amend, for good reason. Coming up
with a different legal theory so late in the case would be grounds for denial. See, e.g., Texaco,
Inc. v. Ponsoldt, 939 F.2d 794, 798-99 (9th Cir. 1991). Also, Plaintiffs pray for Title VII
compensatory relief. (Kristen Decl. Ex. D [Proposed Suppl. Complaint, Prayer for Relief 7].)
Given Plaintiffs are a Rule 23(b)(2) class, that would be futileanother ground for denial. See
Texaco, Inc., 939 F.2d at 798. Nor has there been the kind of true change in the law that would
support a Rule 15(a) filing. Plaintiffs cite 2014 rulings that Title VIIs prohibition against sex
discrimination reaches conduct sometimes related to sexual orientation: Discrimination for

Page 13
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
D. There Are No Grounds To Reopen Or Compel Discovery.
This case has been decided, gone up on appeal, and returned to this Court, at least in part.
Thus, the federal discovery rules do not automatically apply, since they are pre-trial devices. See
Garamendi v. Altus Finance S.A., 282 F.R.D. 270, 271 (C.D. Cal. 2012) (up to district court to
decide which, if any, of those devices should be available at that stage); see also Dowell v Board
of Educ. of the Oklahoma City Public Schools, 8 F.3d 1501, 1508 (10th Cir. 1993) (where
remand order does not specify, district court should exercise discretion as to whether discovery
will reopen).
Plaintiffs have served interrogatories and document requests on State Defendants before
the Court has decidedor even been asked to decideif discovery ought to reopen. They claim
to have moved to compel responses before seeing State Defendants objections. (Pls. Opening
Br., p. 25.) The Court should hold Plaintiffs discovery improper and deny their motion.
Plaintiffs discovery would be improper even if discovery had reopened. It serves the
same aim as their notice proposal: finding candidates who might serve as a named plaintiffs in a
case they would like to bring on behalf of domestic partners they hypothesize either do not
wantor would find it difficultto marry.
10
Locating representatives for a class that has none is

failure to conform to gender stereotypes. (Kristen Decl. Ex. D [Proposed Suppl. Complaint
90-92].) The Supreme Court announced that rule 25 years ago. And lower courts have applied it
long since. See Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (woman denied firm
partnership for not matching sex stereotypes has Title VII claim); Nichols v. Azteca Restaurant
Ents., Inc., 256 F.3d 864, 874-75 (9th Cir. 2001) (discrimination for being effeminate supports
Title VII Price Waterhouse sex-stereotyping suit); Heller v. Columbia Edgewater Country Club,
195 F.Supp.2d 1212, 1224-25 (D. Or. 2002) (same, female harassed and fired for being attracted
to and dating other women). Plaintiffs 2014 citations are nothing new. See Terveer v. Billington
(D.D.C.) 2014 WL 1280301, *9 (Title VII analysis based entirely on Price Waterhouse; later
cases cited on procedural points); Macy v. Holder (E.E.O.C.) 2012 WL 1435995, *7 (since
Price Waterhouse, courts also have widely recognized the availability of the sex stereotyping
theory as a valid method of establishing discrimination on the basis of sex in scenarios
involving transgender individuals).

10
Again, there is no representative to pursue that hypothetical domestic partners case. (See Dkt.
No. 111-16 [Decl. 15-20 (raising no objection or barrier to marrying)].) Class Counsel
propose notice be given in hopes of locating one. (Dkt No. 180 [July 25, 2014 Jt. Case Mgmt.
Stmt., pp. 3-4, 9].) They suggest notice be sent to a list of potential class members they wrongly
suppose State Defendants came up with by comparing a domestic partner registry against an

Page 14
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
not a proper subject for discovery. See Douglas v. Talk America, supra, 266 F.R.D. at 467 (not
proper to use the discovery process to go fishing through defendant's list of customers to find
a new class representative); Feske v. MHC Thousand Trails Ltd. Partnership, 2013 WL
1120816, *4 (N.D. Cal.) (seeking to add or replace class members is not grounds for discovery
of class member identities); Knutson v. Blue Cross & Blue Shield of Minn., 254 F.R.D. 553, 557
(D. Minn. 2008) (discovery aimed at inviting others to join class litigation runs afoul of Rule
26(b)(1), limiting discovery to matters relevant to any party's claim or defense).
The Court should deny Plaintiffs motion to compel.
II. DOMESTIC PARTNERS SUMMARY ADJUDICATION MOTION SHOULD BE
DENIED AS TO STATE DEFENDANTS
Domestic partner class members charge State Defendants with depriving them of federal
rights. (Pls. Opening Br., p. 25.) This cannot survive their concession that there is no state law
bar to this Court granting domestic partner access to the CalPERS LTCP. (Id. at p. 14.) The
Court should deny summary adjudication as to State Defendants.
Should the Court grant summary adjudication and strike down the federal tax law that
bars domestic partner access, it should consider that both same and opposite sex couples can
register as California domestic partners. See Cal. Family Code 297(b)(4). CalPERS suggests
that relief be limited to same-sex partners who registered before they had the option to marry.
That would address what Plaintiffs call the present effects of the legal history of
discrimination against them. (Id. at p. 14.) But it would also avoid an inequitable situation in
which only same- but not opposite-sex domestic partners would have LTCP access going
forward. The Court could accomplish this using its class action management authority and
redefining the domestic partner class (Dkt. No. 92) as those "who registered before June 28,
2013. (Dkt. No. 164-3, pp. 2-3.)

LTCP participant roster. (Pls. Opening Br., p. 2.) Their discovery asks State Defendants to
identify those potential class members. (Kristen Decl. Ex. B.)


Page 15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
III. STATE DEFENDANTS SUMMARY JUDGMENT MOTION
These facts are undisputed:
(1) In 2013, the Supreme Court overturned the law that prevented federal authorities
from recognizing same-sex spouses, Windsor, 133 S. Ct. 2675, and dismissed an
appeal that sought to preserve Californias Proposition 8 bar to same-sex
marriage, Perry, 133 S. Ct. 2652;
(2) Same-sex spouses now have the same access to the LTCP as opposite-sex spouses
(see Espinoza Decl. 7); and
(3) California law now affords domestic partner class members LTCP access,
[e]xcept as prohibited by the Internal Revenue Code (see Cal. Govt Code
21661(e)).
State Defendants are entitled to summary judgment as to both Plaintiffs claims against
them. Both seek Ex parte Young prospective relief from alleged federal violations. (Dkt. No. 94
[2d Am. Compl. 93-97, 98-102; Prayer for Relief 3, 4].) Hence, both are properly dismissed
as moot because the law has changed and can no longer give rise to the violations Plaintiffs
attribute to State Defendants. See Native Village of Noatak v. Blatchford, 38 F.3d, 1505, 1509-11
(9th Cir. 1994) (claims for prospective relief dismissed as moot where challenged state statute
repealed). After Windsor and Perry, same-sex spouses have full access to the LTCP. And the
amended LTCP statute poses no bar to same-sex domestic partners.
11
These changes moot
prospective relief.
12
The Court should grant summary judgment as to all Plaintiffs claims against
State Defendants, save only attorneys fees claims.
13

11
California Family Code 297.5 subdivision (g) incorporates the changed LTCP statute. So
there is no basis to declare that it unconstitutionally blocks domestic partner access. (Dkt. No. 94
[2d Am. Compl. Prayer for Relief 2].)

12
That this is a class action case and might possibly continue against Federal Defendants does
not prevent summary judgment. The changes in the law apply to all married and domestic partner
plaintiffs, mooting the need for prospective relief across the class. And claims may be moot as to
state, but not federal, defendants. See Deerbrook Pavilion, LLC v. Shalala, 235 F.3d 1100, 1103-
04 (8th Cir. 2000).

13
State Defendants opposed nothing Plaintiffs prevailed on and should not have to pay attorneys
fees under 42 U.S.C. 1988. However, the Court has yet to rule on the point.

Page 16
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
IV. THIS COURT SHOULD ENTER JUDGMENT FOR FEDERAL DEFENDANTS
A. The Domestic Partners Equal Protection Challenge to 7702B(f) Fails.
Plaintiffs argue that this Court should reaffirm its prior holding that the exclusion of
domestic partners from the array of relations permitted under 7702B(f) is an unconstitutional
classification based on sexual orientation. (Pls. Opening Br., pp. 19-21.) Federal Defendants
respectfully submit that this Courts prior ruling was incorrect. But even if this Court disagrees,
the legal landscape has so fundamentally changed that even under this Courts prior rationale,
7702B(f) no longer discriminates on the basis of sexual orientation and easily satisfies the
highly deferential rational basis standard of review.
1. Section 7702B(f) Does Not Classify on the Basis of Sexual Orientation.
This Court should reconsider its prior finding that 7702B(f) classified on the basis of
sexual orientation because Congress excluded a catch-call provision, 152(d)(2)(H), that could
have covered same-sex domestic partners. Federal Defendants previously have extensively
briefed the issue. (See Dkt. No. 116, pp. 14-21; Dkt. No. 121, pp. 2-6.) To summarize,
7702B(f) is both facially neutral and as applied, and its omission of those individuals described
in 152(d)(2)(H) is also neutral, excluding both same- and opposite-sex domestic partners alike,
as well as a host of other individuals. Indeed, 152(d)(2)(H) does not mention domestic partners
and provides only the following general description: An individual . . . who, for the taxable year
of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the
taxpayers household. Throughout the tax code, this subsection is excluded in a variety of
contexts, with no apparent design to target a taxpayers same-sex domestic partner. Moreover,
the term domestic partner is not inherently limited to a partner of the same sex. Of the handful
of states (plus the District of Columbia) that recognize domestic partnership, only two (but not
California) limit it to same-sex couples. (See Dkt. No. 116, p. 16.) For all these reasons,
702B(f) does not discriminate on the basis of sexual orientation.
This Court previously reached a contrary conclusion for two reasons: first, because
members of Congress had exhibited animus against gays and lesbians when legislating other

Page 17
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
laws, including Section 3 of DOMA, and when refusing to pass laws that would have benefitted
domestic partners, 7702B(f) likely was motivated by animus, see 872 F. Supp. 2d at 962; and
second, 7702B(f) had a disparate impact on same-sex couples in California because they were
barred from civil marriage by California law and relegated to domestic partnership. Id. at
961. This Court reasoned that [l]aws limiting same-sex couples to registered domestic
partnerships, while precluding them from marriage, turn on sexual orientation. Id.
Federal Defendants submit that it is inappropriate to impute animus behind other wholly
unrelated laws to HIPAA when nothing ties Congresss deliberations of those other laws to the
enactment of 7702B(f). Moreover, 7702B(f) is not a marriage law and the fact that state
marriage law posed an impediment to federal marital benefits on the basis of sexual orientation
cannot transform the federal benefits law into one based on sexual orientation as well.
To be sure, where a statute is facially neutral, one can make out an equal protection claim
based on purposeful discrimination and disparate impact. But the Supreme Court has required
exacting and affirmative proof of a defendants discriminatory intent or purpose in taking the
challenged action. See Washington v. Davis, 426 U.S. 229, 242 (1976); see also Ashcroft v.
Iqbal, 556 U.S. 662, 676-77 (2009); Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000);
Hernandez v. New York, 500 U.S. 352, 359-60 (1991); Village of Arlington Heights v. Metro.
Hous. Dev. Corp., 429 U.S. 252, 264-65 (1977). Purposeful discrimination requires more than
intent as volition or intent as awareness of consequences. Pers. Admr of Mass. v. Feeney, 442
U.S. 256, 279 (1979). It involves a decisionmaker select[ing] or reaffirm[ing] a particular
course of action at least in part because of, not merely in spite of, its adverse effects upon an
identifiable group. Id.; accord Hernandez, 500 U.S. at 359-60; Wayte v. United States, 470
U.S. 598, 610 (1985).
This stringent standard is not met here. The legislative history of HIPAA contains no
evidence that Congress even considered the issue of domestic partners, let alone excluded the
catch-all category of 152(d)(2)(H) from the list of eligible relatives in 7702B(f)(2) because of
a discriminatory intent to exclude same-sex domestic partners from the federal tax benefits

Page 18
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
available under 7702B(f). Nor can a discriminatory intent be inferred from Congresss silence
on this issue, when the catch-all provision encompasses all individuals living with the taxpayer
during the relevant taxable year, when no State recognized domestic partnerships at that time,
and when 7702B itself equally offers the same tax benefits to all individuals purchasing a
qualified LTC plan, not just state-maintained LTC plans. Congresss silence in HIPPA is
particularly significant given that Congress was not shy about making its intent known when
enacting DOMA during the same legislative session. If Congress had intended to target same-
sex domestic partners in HIPAA, one would expect that Congress would similarly exclude
152(d)(2)(H) in other parts of HIPAA affecting tax benefits. But Congress did not. See, e.g.,
Pub. Law 104-191, 110 Stat. 2037, 2041 (qualified medical expense for a medical savings
account includes amounts paid for the account holder, his or her spouse, and any dependent as
defined in section 152). In the absence of proof of purposeful discrimination against same-sex
couples, 7702B cannot be said to discriminate on the basis of sexual orientation.
2. Section 7702B(f) Now Operates Neutrally Under This Courts Reasoning.
Even if this Court continues to believe that 7702B(f) was motivated by animus toward
same-sex domestic partners, it should still enter judgment for Federal Defendants. Californias
resumption of same-sex marriage has eliminated the fundamental premise of this Courts prior
ruling that 7702B(f) relied on domestic partnership as a proxy for homosexuality and thus,
disparately impacted California same-sex couples. 872 F. Supp. 2d at 960. Same-sex couples,
like opposite-sex couples, may now marry freely in California, and after Windsor, those
marriages are now recognized under federal law. As a result, same-sex couples can now obtain
enrollment eligibility under 7702B(f), which is the relief they seek in the Complaint.
In the absence of any disparate impact on California same-sex couples, there is no longer
any argument that the omission of domestic partners in 7702B(f) constitutes sexual orientation
discrimination. Indeed, Village of Arlington Heights v. Metropolitan Housing Development
Corporation, 429 U.S. 252 (1977), the seminal case this Court cited for the proposition that

Page 19
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
circumstantial evidence can be relevant in determining discriminatory intent, requires [t]he
impact of the official action as the starting point of the constitutional analysis. Id. at 266-67.
The change in 7702B(f)s operative effect now also distinguishes this case from Diaz v.
Brewer, 656 F.3d 1008 (9th Cir. 2011), upon which this Court also relied, see 872 F. Supp. 2d at
961. Diaz involved an Arizona law that would have terminated eligibility for health care benefits
of state employees domestic partners. Although the law affected both same- and opposite-sex
domestic partners of state employees, the Ninth Circuit affirmed the district courts issuance of a
preliminary injunction, finding that the law discriminated on the basis of sexual orientation
because whereas same-sex couples would not be able to marry in order to regain those benefits,
different-sex couples wishing to retain their current family health benefits could alter their
statusmarryto do so. Diaz, 656 F.3d at 1014; see also Dragovich, 872 F. Supp. 2d at 957.
Diaz highlights the fact that there is no longer any sexual orientation discrimination because both
opposite- and same-sex domestic partners can alter their status and obtain enrollment
eligibility under 7702B(f) in the wake of Perry and Windsor. See also USDA v. Moreno, 413
U.S. 528, 534, 538 (1973) (amendment to the food stamp program intended to prevent
participation by hippies and hippie communes held unconstitutional because the practical
operation of the facially neutral amendment excluded not those persons who are likely to
abuse the program, but, rather, only those persons who are so desperately in need of aid that
they cannot even afford to alter their living arrangements so as to retain their eligibility).
In sum, Plaintiffs claim of discrimination on the basis of sexual orientation fails even
under this Courts prior rationale.
3. Plaintiffs Claims of Discriminatory Effect Are Speculative And Meritless.
Plaintiffs insist, however, that 7702B(f) continues to have a discriminatory impact on
same-sex couples because some may face barriers to marriage today, and even for those who are
able to marry, the very need to marry is itself an injury resulting from past discrimination. (Pls.
Opening Br., pp. 17-18.) Neither claim is valid. To begin with, class counsel have located no
appropriate plaintiffs with standing to assert that they can no longer satisfy Californias

Page 20
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
prerequisites for marriage, have moved out of California and cannot go to a marriage-equality
state to marry, or are otherwise unable to marry due to age or disability. The proposed
supplemental complaint is silent on these supposed marriage barriers, even though this Court has
given class counsel ample opportunity to include these allegations of continuing injury. See Apr.
3, 2014 Hearing Tr. at 16, 21 (Court: You hypothesize some things that could be true or Im
not certain that they are, but I certainly cant make opinions assuming that they are . . . I think
what Id have to do is give you leave to amend your complaint and kind of start over, give you
leave to move for class certification.); (Dkt. No. 181 [Order Vacating Case Mgmt. Conf., p. 1].)
It is no surprise that class counsel have located no such plaintiffs. A CalPERS member
who is unable to pay the trivial cost of the marriage license, Baskin v. Bogan, Nos. 14-2386,
14-2387, 14-2388, 14-2526, -- F. 3d -- 2014 WL 4359059, *6 (7th Cir. Sept. 4, 2014), which is
$70 in San Diego County where the two domestic partner plaintiffs reside, likely also would not
be ready and willing to pay several hundred dollars of premiums annually to participate in
CalPERSs LTC plan.
14
And, if in-person application or personal appearance before a marriage
official is unduly burdensome, one can seek a waiver of the in-person application, Cal. Fam.
Code 426, and also have a friend or a relative be deputized to perform the marriage ceremony.
In San Diego County, for example, a friend or relative can mail in a notarized application, be
appointed a Deputy Marriage Commissioner for A Day, and conduct the ceremony anywhere
in the State.
15
In any event, even if there are class members who can no longer marry due to
their individual changed circumstances, that inability cannot properly be characterized as a
continuing injury based on past discrimination because their changed circumstances would not
have stemmed from 7702B(f) in the first place; 7702B(f) did not make them less likely to
comply with Californias marriage requirementswhich requirements, in any event, are not the
subject of this lawsuit.

14
CalPERSs website, http://www.calpers.ca.gov/eip-docs/about/committee-
meetings/agendas/pension/201302/item-7-attach-3.pdf (premiums for LTC4policies issued
from 2013 to presentranged from $663 to over $5,000).

15
San Diego County Clerk website, https://arcc.sdcounty.ca.gov/Pages/marriage-civil.aspx.


Page 21
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Plaintiffs also argue that the very need to marrywhich is imposed on both same- and
opposite-sex couplesis itself a discriminatory effect of past discrimination. The argument
makes no sense. Presumably the domestic partner class members want to marry, and the only
two class representatives certainly suggest their intention to do so.
16
As noted before, this Court
previously found that the domestic partner class members suffered sexual orientation
discrimination because they were unable to marry. The ability to marry now, thus, redresses the
sexual orientation discrimination because it allows class members to obtain the benefits they
previously were precluded from receiving due to their sexual orientation. Marrying is simply the
necessary step for couples seeking to obtain enrollment eligibility under 7702B(f), just as class
members now must also apply for enrollment in CalPERSs LTC plan and satisfy the
underwriting criteria. The need to marry, therefore, can hardly be described as a legal injury, not
to mention the fact that Californias marriage licensing requirements are too minimal to possibly
rise to the level of a constitutional problem. Cf. Zablocki v. Redhail, 434 U.S. 374, 386 (1978)
([R]easonable regulations that do not significantly interfere with decisions to enter into the
marital relationship may legitimately be imposed.).
Plaintiffs complain that they previously already registered as domestic partners under
California lawwhich costs $33 today and requires the completion of a one-page form)
17
when they would have preferred to be married. But that has no significance in the constitutional
analysis here because their prior decision to register as domestic partners (and avail themselves
of the rights and benefits offered them under California law) was not a function of 7702B(f);

16
See Joint Decl. of Rafael V. Dominguez & Jose G. Hermosillo (Dkt. No. 111-16), 4-5
(explaining that they became domestic partners because at the time, becoming registered
domestic partners was the only legal recognition available to [them] and because they wanted
to have the same basic civil rights and legal protections under state law as a married couple); id.
at 15 (explaining that they did not marry in the brief period in 2008 during which same-sex
couples in California were permitted to marry because it seemed very rushed and it wasnt
even certain what would happen to the couples who did get married if Proposition 8 passed); id.
(stating that they decided to wait until everything was more settled to marry); id., 16 (stating
that after the passage of Proposition 8, they were not permitted to marry and were back to
having registered domestic partnership as the only legal status available to [them]).

17
See Declaration of Domestic Partnership, http://www.sos.ca.gov/dpregistry/forms/sf-dp1.pdf.


Page 22
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
rather, the alternative option of domestic partnership flowed directly from the lack of marriage
equality under California law. The exercise of that option, therefore, cannot somehow be
contorted to make 7702B(f)s marriage requirement a continuing discriminatory effect of
7702B(f) itself. Again, to obtain federal marital benefits, same-sex couples, like opposite-sex
couples, must be married under state law. To the extent Plaintiffs believe that they were unfairly
subjected to comply with the legal hurdle of domestic partnership registration, this is not the case
to redress it, because 7702B(f) did not cause them to exercise the option offered them by state
law to obtain similar rights and benefits as those of spouses. Of course, now that marriage
equality has returned to California, California could choose to either convert existing same-sex
domestic partnerships to marriages, as some states have done, or to discount the marriage license
fee. But the States decision not to do so in no way renders 7702B(f) unconstitutional.
4. Section 7702B(f) Satisfies Rational Basis Review.
Because 7702B(f) now operates neutrally toward same- and opposite-sex couples in
California even under this Courts prior rationale, the omission of domestic partners can no
longer be deemed a classification based on sexual orientation, and thus, rational basis review
applies. Cf. SmithKline Beecham Corp. v. Abbott Labs., 740 F.3d 471, 483 (9th Cir. 2014).
As Federal Defendants argued in their post-remand brief on the import of Perry and
Windsor, 7702B(f) easily satisfies rational basis review. (See Dkt. No. 160-1, pp. 5-13.)
Under that review, which is highly deferential, see id. at 5-6 (discussing the rational basis review
standard and the great latitude Congress enjoys in creating classifications and distinctions in tax
statutes), any of the justifications Federal Defendants previously identified for the omission of
domestic partners (along with other family-like, dependent relationships) in 7702B(f) is a
plausible policy reason for upholding 7702B(f). Armour v. City of Indianapolis, 132 S. Ct.
2073, 2080 (2012). (See also Dkt. No. 116, pp. 22-27.)
To summarize, Congresss failure in 1996 to include domestic partners as eligible
relatives is not arbitrary because 7702B(f) is uniquely about state-maintained LTC plans, and
at the time of the enactment of 7702B(f) in 1996, no State recognized domestic partnerships. It

Page 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
was not until 1999 that California became one of the first states to recognize domestic
partnerships. See In re Marriage Cases, 183 P.3d 384, 413, 415 (Cal. 2008). Even today, only a
handful of States recognize domestic partnerships. (See Dkt. No. 161, pp. 24-26.) Congress was
by no means required to account for future changes in the legal landscape, or even to account for
state law variations when legislating a provision of the Internal Revenue Code. Cf. United States
v. Haggar Apparel Co., 526 U.S. 380, 392 (1999) (Congress need not, and likely cannot,
anticipate all circumstances in which a general policy must be given specific effect).
In addition, Congress could have determined that the list of eligible relatives who may
purchase state-maintained LTC insurance coverage under 7702B(f) sufficiently serves the
government interest in encouraging long-term care planning by state employees and their
families. Because 7702B(f) expansively includes a long list of relatives of the state employee
who are eligible to enroll in the LTC plan, that provision certainly serves the government interest
in encouraging LTC planning by virtually all of the state employees family members.
Congress could have further reasoned that those categories of relations not included in
7702B(f) similarly are sufficiently encouraged to undertake long-term care planning by the tax
benefits from purchasing a qualified, private 7702B policy. Both 7702B and the legislative
history suggest that Congress intended to encourage all individuals, not just state employees and
their families, to take financial responsibility for their long-term care needs, and therefore non-
inclusion in 7702B(f) does not preclude (or even disincentivize) coverage. See H.R. Rep. No.
104-496(I), at 115 (1996). Section 7702B provides such tax benefits to all individuals buying a
qualified plan, and 7702B(f) merely clarifies that a state-maintained LTC plan could equally
qualify for the tax treatment set forth in 7702B, see H.R. Rep. No. 104-736 at 302-03 (Conf.
Rep.) (1996), reprinted in 1996 U.S.C.C.A.N. 1990, 2116. Viewed as a whole, the statutory
scheme ensures that all individuals can take advantage of the tax benefits in 7702B
regardless of whether their relationships are covered by 7702B(f). Given that the domestic
partners of state employees (along with other categories of individuals not included in
7702B(f)) could receive the same beneficial tax treatment by purchasing a qualified, private

Page 24
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7702B plan, Congress rationally could have concluded that there was no need to specifically
include domestic partners (and these other individuals) as eligible relatives for 7702B(f).
Moreover, Congress also could have assumed that because the provision of insurance
generally is highly regulated by States, there would not be any significant disparity between
qualified state 7702B(f) plans and private 7702B plans, in terms of cost or otherwise, that
would make private 7702B plans an infeasible option. Indeed, not only do both state and
private LTC plans need to meet the stringent requirements set forth in 7702B, but California
state law also requires a long list of consumer protections specifically with respect to LTC plans,
including inflation protection and restrictions on premium increases. (See Dkt. No. 161, p. 29.)
18

Plaintiffs argue that they do not want enrollment in just any qualified LTC plan; rather,
they want CalPERSs LTC plan. (See Pls. Opening Br., p. 15 n.10.) In denying Federal
Defendants first motion to dismiss, this Court previously also credited Plaintiffs assertion that
CalPERSs LTC plan is more desirable than a private 7702B LTC plan. 764 F. Supp. 2d 1178,
1186 (N.D. Cal. 2011). Of course, Plaintiffs are now able to obtain enrollment eligibility in
CalPERSs LTC plan by marrying. But even if they choose not to marry, their preference for
CalPERSs LTC plan is irrelevant to the constitutional analysis here. Rational basis review does
not examine the rationality of a plaintiffs desire to be placed on the other side of the line.
Russell v. Hug, 275 F.3d 812, 820 (9th Cir. 2002) (rejecting as irrelevant plaintiffs individual
circumstances because to consider them in evaluating legislative judgment under rational basis
review would ratchet up our standard of review from rational basis toward strict scrutiny).
Rather, it examines whether there are plausible or arguable rationales supporting Congresss
classification, FCC v. Beach Commcns, Inc., 508 U.S. 307, 320 (1993) (citations and quotation
marks omitted), and if so, courts are compelled under rational-basis review to accept a
legislatures generalizations, even when there is an imperfect fit between means and ends.

18
Notably, in the case of CalPERSs LTC plan, the State does not fund any portion of the plan;
rather, the plan is entirely funded by member premiums. The State also does not pay any portion
of the enrollees premium, and unlike health insurance, each enrollee in CalPERSs LTC plan is
underwritten separately, with the premium calculated based on each enrollees individual
circumstances. (See Dkt. No. 161, p. 6; see also Dkt. No. 122, p. 6 n.1.)


Page 25
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Heller v. Doe, 509 U.S. 312, 319-21 (1993); accord Merrifield v. Lockyer, 547 F.3d 978, 989
(9th Cir. 2008).
Finally, Congress also could have rationally determined that 152(d)(2)(H) was an
inconvenient proxy for determining eligibility for long-term care insurance because that
provision is based on an individual living with the taxpayer during a given taxable year. This
Court previously rejected this explanation, reasoning that even the eligibility of spouses, step-
relatives and relatives-in-law may change from one year to the next as marital relationships lack
any minimum time commitment. 848 F. Supp. 2d 1091, 1102 (N.D. Cal. 2012). While that may
be true, Congress was not irrational to assume that marital relations do not generally change from
year to year, whereas 152(d)(2)(H), by definition, is about individuals living with the taxpayer
during only the taxable year.
The fact that 7702B(f) does not include domestic partners (in addition to other
relationships) reflects no more than the type of line-drawing inherent in making legislative
choices. As the Supreme Court has recognized, [t]he problems of government are practical
ones and may justify, if they do not require, rough accommodations illogical, it may be, and
unscientific. Heller, 509 U.S. at 321 (citations and quotations omitted). As with all tax
legislation, Congress necessarily had to define the metes and bounds of eligibility for the tax
treatment, and the classification may be ragged around the edges. Baker v. City of Concord,
916 F.2d 744, 753 (1st Cir. 1990). A classification does not fail rational basis review simply
because it is not made with mathematical nicety or because in practice it results in some
inequality. Dandridge v. Williams, 397 U.S. 471, 485 (1970) (citation and internal quotation
marks omitted). In other words, legislative classifications may be both underinclusive and
overinclusive and perfection is by no means required. Vance v. Bradley, 440 U.S. 93, 108
(1979) (citation and internal quotation marks omitted). Even if this Court is of the view that
domestic partners have an equally strong claim for coverage under 7702B(f) as spouses do, that
is not sufficient to establish a constitutional violation, as rational basis review does not permit

Page 26
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
this Court to second-guess the wisdom, fairness, or logic of legislative line drawings such as that
in 7702B(f). See Heller, 509 U.S. at 319-20.
5. The Distinction Between Marriage and Domestic Partnership Is Rational.
In light of the new reality that the fundamental change in the legal landscape has
extinguished their equal protection challenge on the basis of sexual orientation, Plaintiffs now
claim that 7702B(f)s distinction between married couples and domestic partners violates equal
protection. They also challenge the IRSs interpretation in Revenue Ruling 2013-17, 2013-38
I.R.B. 201, 2013 WL 4607583 (Aug. 30, 2013), issued in the wake of Windsor, that [f]or
Federal tax purposes, the term marriage does not include domestic partnerships, civil unions, or
other similar formal relationships recognized under state law that are not denominated as a
marriage under that states law, regardless of whether such relationships are of the opposite sex
or the same sex.
19
Plaintiffs argue that this interpretation is unconstitutional, a formulaic
exaltation of form over substance, because: (1) California law does not require them to marry in
order to access CalPERSs LTC plan or to gain all the benefits of marriage under state law; and
(2) four States (but not California) have enacted laws that converted same-sex civil unions and
domestic partnerships into marriages. (Pls. Opening Br., pp. 22-24.)
Plaintiffs arguments are unpersuasive. The fact that California law generally accords
domestic partners the same rights and benefits as married couples does not call into question the
rationality of the distinction between marriage and domestic partnership under federal law.
Under rational basis review, Congress need not conform the federal tax code to the
idiosyncrasies of state laws, including Californias domestic partnership law. See Armour, 132
S. Ct. at 2083 ([T]he Constitution does not require the [government] to draw the perfect line nor

19
Plaintiffs also argue that Revenue Ruling 2013-17 fails to satisfy the notice-and-comment
requirements of the Administrative Procedure Act (APA). (Pls. Opening Br., pp. 23-24.) The
APAs rulemaking procedures, however, are inapplicable to interpretative rules such as
Revenue Ruling 2013-17, see 5 U.S.C. 553(b)(A). Moreover, contrary to Plaintiffs argument,
the IRSs interpretation is entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134
(1944), as applied in United States v. Mead Corp., 533 U.S. 228 (2001). Omohundro v. United
States, 300 F.3d 1065, 1068 (9th Cir. 2002) (applying Skidmore deference to a Revenue Ruling);
see also Tualatin Valley Builders Supply, Inc. v. United States, 522 F.3d 937, 941-42 (9th Cir.
2008) (Revenue Procedure entitled to significant deference).


Page 27
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
even to draw a line superior to some other line it might have drawn.). Whereas there are only a
few states that treat domestic partnerships or civil unions substantially the same as marriages,
20

Congress has long based qualification for federal benefits on marital status without providing
like benefits for other types of household relationships. Indeed, there are more than 1,000
federal statutory provisions in which marital status is a factor in determining benefits, rights,
privileges and responsibilities.
21
Drawing the line at marriage is a rational basis for ensuring
national uniformity, efficiency, and fairness in the administration of the federal tax code. See
Rev. Rul. 2013-17 (uniform nationwide rules are essential for efficient and fair tax
administration.).
The interpretation in Revenue Ruling 2013-17 that the term marriage will depend on
state law denomination of marriage is also reasonable, and is the most natural and consistent
reading of 7702B(f) and other provisions of the Internal Revenue Code that turn on the marital
status of the affected taxpayer. The IRS has, for decades, recognized the marital status of
individuals as determined under state law in the administration of the federal income tax laws.
Rev. Rul. 58-66, 1958-1 C.B. 60, 1958 WL 10653 (1958). (See also Dkt. No. 116, p. 20.)
(countering Plaintiffs argument that a 2011 information letter from an IRS Senior Technician
Reviewer regarding Revenue Ruling 58-66 on common law marriages constituted an IRS
interpretation that couples forming civil unions in Illinois are entitled to joint filing status). In
fact, in striking down Section 3 of DOMA, the Supreme Court emphasized that [t]he
significance of state responsibilities for the definition and regulation of marriage dates to the
Nations beginning, and the Federal Government, through our history, has deferred to state-
law policy decisions with respect to domestic relations. Windsor, 133 S. Ct. at 2691.

20
They include Delaware (Del. Code Ann. tit. 13, 212, 214), Hawaii (Haw. Rev. Stat. Ann.
572B-9), Illinois (750 Ill. Comp. Stat. Ann. 75/20), Nevada (Nev. Rev. Stat. Ann.
122A.200), New Jersey (N.J. Stat. Ann. 37:1-31, 37:1-32), Oregon (Or. Rev. Stat.
106.340), and Rhode Island (R.I. Gen. Laws 15-3.1-6, 15-3.1-7).

21
See Defense of Marriage Act: Update to Prior Report, General Accounting Office, GAO-04-
353R Defense of Marriage Act, available at http://www.gao.gov/assets/100/92441.pdf.


Page 28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Here, the State of California itself distinguishes between domestic partnerships and
marriages. See Cal. Fam. Code 297 (domestic partnership); id. 300 (marriage); see also In re
Marriage Cases, 183 P.3d 384, 416 n.24 (Cal. 2008). The fact that four other states have
enacted laws converting domestic partnerships or civil unions into marriages actually highlights
Californias preference to continue the distinction. And, the designation of marriage is not
immaterial or insignificant as a matter of state (or federal) law. As the Supreme Court
emphasized in Windsor, [t]he definition of marriage is the foundation of the States broader
authority to regulate the subject of domestic relations. Windsor, 133 S. Ct. at 2691. When a
State exercises its historic and essential authority to allow a couple to marry, the Supreme
Court noted, it confers upon them a dignity and status of immense import, and enhances the
recognition, dignity, and protection of them in their own community. Id. at 2692. See also
Perry v. Brown, 671 F.3d 1052, 1078 (9th Cir. 2012) (distinguishing marriage from domestic
partnership, noting that [w]e need consider only the many ways in which we encounter the word
marriage in our daily lives and understand it, consciously or not, to convey a sense of
significance), revd on other grounds by Perry, 133 S. Ct. 2652. Were it otherwise, the
movement for marriage equality in California would have been a meaningless exercise of
crediting form over substance. Accordingly, this Court should reject Plaintiffs contention that
domestic partnership must, as a constitutional matter, be treated synonymously with
marriage in the tax code. (See Pls. Opening Br., p. 23.)
B. Plaintiffs Substantive Due Process Claim Has No Merit.
Plaintiffs also argue that 7702B(f) violates substantive due process because it allegedly
penalizes the exercise of their right to family autonomy and decision-making, on the basis of
sexual orientation, and prevents same-sex partners from participating in a critical government-
sponsored tool for decisions regarding life and family planning. (Pls. Opening Br., pp. 24-25.)
As already discussed above, same-sex domestic partners are not so precluded today because, like
opposite-sex domestic partners, they can access CalPERSs LTC plan by marrying.

Page 29
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
To the extent Plaintiffs are complaining that 7702B(f) violates the substantive due
process rights of all domestic partners, their claim also fails. As Federal Defendants previously
have demonstrated (see Dkt. No. 116, pp. 9-14; Dkt. No. 121, pp. 9-11), 7702B(f) imposes no
more than an incidental economic burden on Plaintiffs familial relationship because of the
potential financial impact that the lack of LTC insurance might have on their family unit. This
Court previously also agreed. See 848 F. Supp. 2d at 1104 (Assuming that family autonomy
and decisionmaking do amount to a constitutionally protected, fundamental right, 7702B(f)
creates no more than an incidental economic burden on those interests.).
Plaintiffs acknowledge that access to a tax-qualified, state-maintained LTC plan is not a
fundamental right, but insist that their theory is that the challenged statutory scheme imposes
unwarranted burdens on the basis of family choices protected by the due process clause. (Pls.
Opening Br., p. 24 n.21.) Plaintiffs misunderstand substantive due process law. In substantive
due process cases, the Supreme Court has required a careful description of the asserted
fundamental liberty interest, Washington v. Glucksberg, 521 U.S. 702, 721 (1997) (citation and
internal quotation marks omitted), or as the Ninth Circuit has said, a narrow definition of the
interest at stake, Raich v. Gonzales, 500 F.3d 850, 862-63 (9th Cir. 2007). Plaintiffs cannot
dispute that the specific right they seek to vindicate is the right to access CalPERSs LTC plan.
The fact that the denial of that right may impose an economic burden on Plaintiffs family unit is
not the same thing as the infringement of a fundamental right itself. Cf. Califano v. Jobst, 434
U.S. 47, 54 (1977) (loss of federal social security benefits upon marriage does not interfere with
the individuals freedom to make a decision as important as marriage).
Properly framed, Plaintiffs are essentially arguing that Congress is compelled by
substantive due process to give them favorable tax treatment so as to avoid the potential financial
impact that the lack of LTC insurance would have on their family unit. But the Supreme Courts
cases have recognized that the Due Process Clauses generally confer no affirmative right to
governmental aid. DeShaney v. Winnebago Cnty Dept of Soc. Servs., 489 U.S. 189, 196
(1989). And that is plainly the case when Congress defines the metes and bounds of eligibility

Page 30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
for favorable treatment under the tax code. See Regan v. Taxation with Representation of Wash.,
461 U.S. 540, 549 (1983) (noting that tax exemptions and deductions are generally a matter
of grace that Congress can, of course, disallow . . . as it chooses) (citation and internal
quotation marks omitted).
Plaintiffs also assert that Congress impermissibly chose to allow an array of family
members to participate in state-maintained LTC plans, while selectively burdening legally
recognized domestic partners by excluding them from such participation. (Pls. Opening Br.,
p. 24.) For their substantive due process claim to state any independent ground for relief as
compared with their equal protection claim, however, Plaintiffs substantive due process claim
necessarily must rest on the notion that they have an affirmative, constitutionally-protected
entitlement to receive the tax benefit at issue here, without regard to the eligibility of other
classes of persons to receive those benefits: An argument that rests on comparing Plaintiffs
eligibility for the tax benefit with that of other classes of persons sounds in equal protection, not
substantive due process. In sum, Plaintiffs substantive due process claim fails.
CONCLUSION
For the foregoing reasons, this Court should (1) deny Plaintiffs motions for class notice, for
additional remedies, for leave to supplement the complaint, to compel limited discovery and for
summary adjudication; and (2) grant judgment in favor of State and Federal Defendants.

Date: September 25, 2014 Respectfully Submitted,


By: Edward Gregory
Edward Gregory
Jennifer Morrow
Attorneys for State Defendants


Page 31
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
JOYCE R. BRANDA
Acting Assistant Attorney General

KATHLEEN R. HARTNETT
Deputy Assistant Attorney General

ARTHUR R. GOLDBERG
Assistant Branch Director

__/s/ Jean Lin___________
JEAN LIN
Senior Trial Counsel
U.S. Department of Justice, Civil Div.

Attorneys for Federal Defendants
Case4:10-cv-01564-CW Document186-1 Filed09/25/14 Page1 of 4

1
DECLARATION OF JENNIFER MORROW SUPPORTING STATE AND FEDERAL DEFENDANTS JOINT
BRIEF: (A) IN OPPOSITION TO PLAINTIFFS MOTIONS [DOCKET 185]; AND (B) IN SUPPORT OF CROSS
MOTIONS FOR SUMMARY JUDGMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Edward Gregory (CSBN 128375)
Jennifer Morrow (CSBN 185964)
633 West Fifth Street, Suite 700
Los Angeles, California 90071
Telephone: (213) 439-9400
Facsimile: (213) 439-9599
egregory@steptoe.com
jmorrow@steptoe.com

Attorneys for Defendants Board of Administration of
California Public Employees Retirement System and
Anne Stausboll (State Defendants)


MICHAEL DRAGOVICH, MICHAEL
GAITLEY, ELIZABETH LITTERAL,
PATRICIA FITZSIMMONS, CAROLYN
LIGHT, and CHERYL LIGHT, DAVID
BEERS, CHARLES COLE, RAFAEL V.
DOMINGUEZ, and JOSE G.
HERMOSILLO, on behalf of themselves
and all others similarly situated,

Plaintiffs,

vs.

UNITED STATES DEPARTMENT OF
THE TREASURY, TIMOTHY
GEITHNER, in his official capacity as
Secretary of the Treasury, United States
Department of the Treasury, INTERNAL
REVENUE SERVICE, DOUGLAS
SHULMAN, in his official capacity as
Commissioner of the Internal Revenue
Service, BOARD OF
ADMINISTRATION OF CALIFORNIA
PUBLIC EMPLOYEES RETIREMENT
SYSTEM, and ANNE STAUSBOLL, in
her official capacity as Chief Executive
Officer, CalPERS,

Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
CASE NO. 4:10-CV-01564-CW

Assigned to the Hon. Claudia Wilken

DECLARATION OF JENNIFER
MORROW SUPPORTING STATE
AND FEDERAL DEFENDANTS
JOINT BRIEF: (A) IN OPPOSITION
TO PLAINTIFFS MOTIONS
[DOCKET 185]; AND (B) IN
SUPPORT OF CROSS MOTIONS
FOR SUMMARY JUDGMENT

Hearing Date: November 20, 2014
Hearing Time: 2:00 p.m.
Courtroom: 2

2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

1. I am an attorney, admitted to practice in California, and one of the Steptoe &
Johnson attorneys responsible for representing the State DefendantsBoard of
Administration of California Public Employees Retirement System (CalPERS)
and Anne Stausbollin this action.

2. On May 27, 2014, our office received a diskette from Plaintiffs counsel, the
Legal Aid Society-Employment Law Center, who said it contained a list of
California registered domestic partners (a domestic partner registry) obtained
from the Secretary of States Office.

3. CalPERS provided a list of individuals enrolled in its Long-Term Care Program
(LTCP).

4. I instructed a Steptoe paralegal to try to compare that LTCP participant list
against the domestic partner registry.

5. The Steptoe paralegal compared the two lists, and found that a number of
individual LTCP participants appeared to be domestic partners listed on the
registry

6. But neither the paralegal nor I was able to determine whether any of those
LTCP domestic partners was part of a same-sex as opposed to opposite-sex
partnership, or vice versa.

7. The domestic partnership registry contained no information that would permit
that determination. Nor was CalPERS able to provide that information.


3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

8. Because we were unable to segregate LTCP domestic partners in same-sex
partnerships from those in opposite-sex partnerships, no one at Steptoe was able
to come up with a list of potential class members in this action.

I declare under penalty of perjury under the laws of the State of California and the
United States of America that the foregoing is true and correct.

Executed September 24, 2014 at Los Angeles County, California.

Jennifer Morrow

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28


MICHAEL DRAGOVICH, et al., on behalf of
themselves and all others similarly situated,

Plaintiffs,
v.
UNITED STATES DEPARTMENT OF THE
TREASURY, et al.,
Defendants.


[PROPOSED] ORDER

Upon consideration of Plaintiffs motions for class notice, for additional remedies, for leave to
supplement the complaint, to compel limited discovery and for summary adjudication; and State and
Federal Defendants opposition and cross-motions for summary judgment, it is hereby
ORDERED that Plaintiffs motions for class notice, for additional remedies, for leave to
supplement the complaint, to compel limited discovery and for summary adjudication are DENIED, it is
further
ORDERED the State and Federal Defendants cross-motions for summary judgment are
GRANTED.
IT IS SO ORDERED.

Date: _________________________ ________________________________________
U.S. District Court J udge Claudia Wilken


4:10-cv-01564 #186

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

4:10-cv-01564 #186

Загружено:

Авторское право:

Доступные форматы

1

Вам также может понравиться