Morrill v. Lorillard Tobacco CV-00-214-B 12/7/00

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Michelle Morrill

v. Civil No. 00-214-B Opinion NO. 2000DNH258 Lorillard Tobacco Company and Loews Corporation

MEMORANDUM AND ORDER

Michelle Morrill brings this action pursuant to the

Americans with Disabilities Act (“ADA”),

et

seq., against Lorillard Tobacco Company, her former employer, and

Loews Corporation, the administrator of the Loews Corporation

Comprehensive Health Care Plan (the “Plan”). Morrill argues that

the Plan, by providing less coverage for outpatient psychotherapy

than it does for other forms of outpatient treatment, violates

Title I of the ADA because it discriminates against the mentally

disabled. I have before me motions by Lorillard (Doc. N o . 6 ) and

Loews (Doc. N o . 13) to dismiss all claims against them pursuant to Federal Rule of Civil Procedure 12(b)(6).

I. BACKGROUND1

Morrill worked for Lorillard for eleven years. She was

responsible for marketing Lorillard’s products in New Hampshire.

Morrill suffers from post-traumatic stress disorder,

dissociative disorder, and major depression. Although the

complaint is unclear as to when Morrill first began to suffer

from these mental disorders, she has received outpatient

psychotherapy, in addition to psychopharmological medication, to

treat them since 1995.

Lorillard provided Morrill with health insurance through a

health benefit plan administered by Lowes. The Plan limits

coverage of outpatient psychotherapy visits for mental or nervous

disorders. Prior to 1998, the Plan paid a maximum of $1,000 per

calendar year for outpatient psychotherapy and a maximum of $40

1 The background facts set forth in this memorandum and order are taken from Morrill’s complaint, (Doc. N o . 1 ) .

-2- per visit. On January 1 , 1998, the Plan eliminated the annual

and per visit dollar limits and replaced them with a limit of

twenty visits per year. The Plan requires participants to pay a

co-payment of 50% for each outpatient psychotherapy visit. All

other types of outpatient visits require only a 15% co-payment,

except for chiropractic visits which require a 20% co-payment.

Under the Plan, a participant may apply all unreimbursed charges

for every covered service, except outpatient psychotherapy,

towards meeting the Plan deductible. In addition, unreimbursed

expenses for outpatient psychotherapy do not count towards the

annual out-of-pocket limit, which is the maximum annual amount an

individual could be required to pay under the Plan.

Morrill visited her psychotherapist more than twenty times

in both 1998 and 1999.2 In accordance with the terms of the

Plan: (1) the defendants refused to pay for any visit in excess

2 Morrill also alleges that she visited her psychotherapist more than 20 times in 1997. She has not stated, however, whether she exceeded the $1,000 maximum for psychotherapy visits that was in effect in 1997.

-3- of the twenty-visit maximum; (2) the defendants only paid 50% of

the bill for the twenty visits covered by the Plan; and (3)

Morrill was unable to apply her co-payments for these visits to

her deductible or her out-of-pocket limit.

Morrill filed a charge of discrimination with the Equal

Employment Opportunity Commission and received a “right to sue”

letter on January 3 1 , 2000. This action followed.

II. STANDARD OF REVIEW

A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6)

requires the court to accept the complaint’s well-pleaded facts

as true and to draw all reasonable inferences in favor of the

plaintiff. See Aybar v . Crispin-Reyes,

0 , 13 (1st Cir.

1997); Washington Legal Found. v . Massachusetts Bar Found.,

(1st Cir. 1993). I may dismiss the complaint only

i f , when viewed in this manner, it appears beyond doubt that the

plaintiff can prove no set of facts that would entitle her to

relief. See Gooley v . Mobil Oil Corp.,

(1st

-4- Cir. 1988) (internal citation omitted).

The threshold for stating a claim under the federal rules

“may be low, but it is real.”

While I must construe all

well-pleaded facts in the plaintiff’s favor, I need not accept a

plaintiff’s “unsupported conclusions or interpretations of law.”

Washington Legal Found.,

.

I apply this standard in reviewing the defendants’ motions

to dismiss.

III. DISCUSSION

Morrill argues that, by failing to provide the same coverage

for outpatient psychotherapy that it provides for other forms of

outpatient treatment, the Plan discriminates against the mentally

disabled in violation of Title I of the ADA. Lorillard and Loews

argue that it is not discriminatory under the ADA for a health

insurance plan to offer different types of coverage for mental

and physical conditions.3 This is not an entirely new issue for

3 Lorillard and Loews raise a number of additional arguments in support of their respective motions to dismiss. I need not address these arguments since I conclude that Morrill fails to state a claim as a matter of law.

-5- the court.

On September 1 9 , 2000, I issued a Memorandum and Order in

the case of Pelletier v . Fleet Financial Group,

(D.N.H. Sept. 1 9 , 2000), in which I held that a long-term

disability insurance plan that is open to both disabled and non-

disabled employees on the same terms does not violate Title I of

the ADA simply because it fails to provide equivalent coverage

for mental and physical disabilities.

at 7 . My holding in

Pelletier is in accord with the rulings of seven circuit courts

of appeal. See id. at 7 (collecting cases).

In Pelletier, I adopted the Second Circuit’s analysis of the

issue in EEOC v . Staten Island Savings Bank,

(2d

Cir. 2000). As I noted in Pelletier, the court determined in

Staten Island Savings Bank that an employer’s long-term

disability plan did not violate Title I of the ADA even though it

provided different benefits for mental and physical disabilities

because:

-6- (1) the statutory language at issue in Title I does not clearly prevent an employer from adopting a disability plan that provides reduced benefits for disabilities arising from mental illness, see id. at 149-50; (2) the ADA’s legislative history strongly suggests that Congress did not intend to restrict an employer’s ability to impose special limitations on disability insurance coverage for disabilities that result from mental illness, see id. at 150; (3) the existence of the ADA’s safe harbor provision,

, does not support the view that disability plans cannot contain special limitations on coverage for mental illness, see

; (4) while the Supreme Court’s recent decision in Olmstead v . L.C.,

, 119 S . C t . 2176, 2186 n . 10 (1999), suggests that the ADA generally prohibits individualized discrimination based on a particular disability or category of disabilities as well as discrimination between the disabled and the non-disabled, the reasoning underlying Olmstead’s holding does not invalidate the type of disability insurance policy that is at issue in this case, see id. at 151; (5) the EEOC’s informal Interim Guidance on Application of the ADA to Health Insurance (June 8 , 1993), reprinted in Fair Employment Practices Manual 405:7115 (BNA 2000), is not entitled to interpretative deference in a case such as the one at issue here because it does not cover disability insurance plans and it is in conflict with the EEOC’s published “Interpretive Guidance on Title I of the Americans With Disabilities Act,” 29 C.F.R. part 1630, App. 1630.5, see id. at 151-52; and (6) Congress enacted the ADA with an awareness of the “historic and nearly universal practice inherent in the insurance industry of providing different benefits for different disabilities” and, accordingly, it is reasonable to

-7- presume that Congress would have spoken more clearly had it intended to prohibit such a well-established practice, see id. at 149.

Pelletier,

.

Morrill has failed to persuasively argue that a different

analysis is required for ADA challenges to health insurance

plans. See Saks v . Franklin Covey Co.,

, 326-

27 (S.D.N.Y. 2000) (applying Staten Island Savings Bank to health

insurance plan). Accordingly, I apply Pelletier here and

determine that neither Loews nor Lorillard can be held liable for

violating the ADA solely because they sponsored, established, or

administered a health insurance plan that provides less favorable

coverage for out-patient psychotherapy than it does for other

forms of out-patient treatment.

IV. CONCLUSION

Because Morrill fails to state an ADA claim against the

defendants, I grant both Lorillard’s motion to dismiss, (Doc. N o .

-8- 6 ) , and Loews’ motion to dismiss, (Doc. No. 1 3 ) .

SO ORDERED.

Paul Barbadoro Chief Judge

December 7 , 2000

cc: Sheila Zakre, Esq. Jeffrey S . Brody, Esq. Elise M . Bloom, Esq.

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