Late last week, plaintiffs in the U.S. District Court for the Northern District of California felt the ripple effects of the U.S. Supreme Court’s landmark decisions regarding same-sex marriage in United States v. Windsor and Hollingsworth v. Perry.

In Dragovich v. U.S. Dep’t of the Treasury, et al., No. C-10-01564 (N.D. Cal. Dec. 4, 2014), the Judge Claudia Wilken dismissed the class claims brought by plaintiffs seeking long-term care benefits for their same-sex domestic partners since any barriers precluding them from obtaining coverage also applied to heterosexual couples.

The ruling is important for all employers involved in workplace class action litigation.

Background To The Ruling

As of the date the Dragovich litigation started, same-sex spouses and registered domestic partners were ineligible to receive long-term care benefits under the California Public Employees’ Retirement System pursuant to the Health Insurance Portability and Accountability Act, 26 U.S.C. § 7702B(f) (“HIPAA”). The HIPAA, in turn, excluded such individuals from coverage under state-run benefits plans since it restricted benefits for spouses to heterosexual married couples pursuant to the Defense of Marriage Act, 1 U.S.C. § 7 (“DOMA”), and, omitted unmarried couples from eligibility for benefits. The plaintiffs, who are public employees of the State of California, thus sought long-term care benefits for their same-sex spouses and registered domestic partners. The Court certified the class in June 2011, and then granted summary judgment in the plaintiffs’ favor in May 2012. The defendants appealed the Court’s order granting summary judgment thereafter.

The Northern District of California’s recent rulings in Dragovich were prompted by developments that arose after the plaintiffs prevailed on summary judgment. In July 2013, the U.S. Supreme Court ruled that the DOMA’s restriction of the institution of marriage to heterosexual unions was unconstitutional in United States v. Windsor, 570 U.S. ___ (2013). On the same day as the Windsor decision, the Supreme Court also issued its ruling in Hollingsworth v. Perry, 570 U.S. ___ (2013), in which it declined to disturb the California Supreme Court’s ruling that the state’s ban on same-sex marriage was unconstitutional. Following the companion Windsor and Perry rulings, the Ninth Circuit vacated the Northern District of California’s grant of summary judgment in favor of the domestic partner plaintiffs and remanded the case for further consideration. The Ninth Circuit also dismissed the appeal as it applied to the plaintiffs involved in same-sex marriages, since the DOMA no longer operated to exclude same-sex spouses from eligibility for benefits.

The Court’s Ruling

On remand, the Judge Wilken granted the Federal and State defendants’ cross-motions for summary judgment as to the claims brought by plaintiffs involved in same-sex domestic partnerships. While the HIPAA still excluded domestic partners from eligibility for coverage under state-run plans, the Court held that the plaintiffs’ equal protection and substantive due process claims failed because the law impacted same-sex and heterosexual couples involved in a registered domestic partnership equally. Because same-sex couples in California could choose to marry following Perry, and, since the DOMA no longer restricted eligibility for benefits to heterosexual unions after Windsor, the barriers to benefits faced by all class members mirrored those faced by individuals involved in heterosexual domestic partnerships. The plaintiffs argued that couples involved in same-sex domestic partnerships faced barriers to marriage not faced by heterosexual couples, but the Court concluded that this argument was speculative and too individualized for resolution in a class action. The Court then denied the plaintiffs’ motion for class notice, since there was no on-going constitutional violation following Perry and Windsor.

In tandem with its summary judgment order, the Court denied the plaintiffs’ motion for additional remedies, which sought an order permitting class members to purchase benefits for the premiums they would have paid at the time they originally sought to enroll their same-sex partners. The Court held that providing the requested discounts would require complicated individualized inquiries which were not suitable for a class action, and, in any event that prospective relief was not available in the absence of an ongoing constitutional violation. The Court also denied the plaintiffs’ request for leave to file a supplemental complaint adding claims for alleged Title VII violations since such claims would necessarily be premised on multiple, complicated individualized inquiries.

Implications For Employers

Windsor and Perry were expected to unleash a cascade of rulings defining the rights of same-sex couples, as predicted in our prior blog postings hereDragovich is the latest indicator of the impact of these cases. The Court’s ruling that heterosexual and same-sex registered domestic partnerships in California are on equal footing is likely to impact employers down the line. Dragovich also provides employers seeking summary judgment of class claims with some nice language holding that speculative, individualized claims cannot be resolved in a class action.