United States Court of Appeals
For the First Circuit
Nos. 08-2332, 08-2379
COLONIAL LIFE & ACCIDENT INSURANCE CO. and
UMASS MEMORIAL HEALTH CARE, INC.,
Plaintiffs-Appellees,
v.
MALCOLM S. MEDLEY, MARTIN S. EBEL, and
SUNILA THOMAS-GEORGE, in their official capacities as
Commissioners of the Massachusetts Commission Against
Discrimination, COMMONWEALTH OF MASSACHUSETTS, and
CAROLYN CALDERON,
Defendants-Appellants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. F. Dennis Saylor, IV, U.S. District Judge]
Before
Torruella, Tashima,* and Lipez,
Circuit Judges.
Kenneth W. Salinger, Assistant Attorney General, with whom
Martha Coakley, Attorney General of Massachusetts, was on brief for
appellants Malcolm S. Medley, Martin S. Ebel, Sunila Thomas-George,
and Commonwealth of Massachusetts.
Susan Fendell, Mental Health Legal Advisors Committee, for
appellant Carolyn Calderon.
Richard C. Van Nostrand, with whom Jessica H. Munyon and
Mirick, O’Connell, DeMallie & Lougee, LLP, were on brief for
appellees.
*
Of the Ninth Circuit, sitting by designation.
July 8, 2009
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TASHIMA, Senior Circuit Judge. We must decide whether the
district court erred in issuing a preliminary injunction against
proceedings pending before the Massachusetts Commission Against
Discrimination (“MCAD”) on the ground that federal law preempted
state law claims because the district court was required to abstain
from deciding the preemption issue under the doctrine of Younger v.
Harris, 401 U.S. 37, 45–47 (1971). We conclude that where, as
here, the preemption determination would require the district court
to resolve a novel question of law, preemption is not “facially
conclusive,” and, under such circumstances, the district court was
required to abstain from deciding the preemption issue. We
therefore reverse the preliminary injunction and remand to the
district court with directions to dismiss or stay the action so
that MCAD may decide the preemption question in the first
instance.1
I. Background
Appellant Carolyn Calderon was previously employed by Appellee
UMass Memorial Health Care, Inc. (“UMass”). As an employee, she
received printed materials from UMass describing various disability
benefits for which she was eligible. One such benefit was an
optional short-term disability (“STD”) insurance program available
to employees expected to work at least twenty hours per week.
1
We have jurisdiction of this appeal from the district
court’s grant of an interlocutory injunction under 28 U.S.C. §
1292(a)(1).
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Under the program, the employee paid the premium and could choose
between policies offered by two companies, one of which was
Appellee Colonial Life & Accident Insurance Company (“Colonial”).
Neither UMass’s description of benefits nor Colonial’s policy
contained any reference to the Employee Retirement Income Security
Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., although the
description included a section describing an employee’s right to
appeal a denial of benefits, which UMass and Colonial now
characterize as “the employee’s rights under ERISA.”
Calderon selected and purchased the STD coverage from
Colonial. Colonial’s STD policy contained a provision excluding
coverage for “psychiatric or psychological condition[s] including
but not limited to affective conditions, neuroses, anxiety, stress
and adjustment reactions.” When Calderon later submitted a claim
for STD benefits due to major depressive disorder, panic disorder,
and grief reaction, Colonial denied benefits pursuant to this
exclusion.
Calderon then filed a Charge of Discrimination with MCAD.
The charge alleged that, by providing STD benefits to persons with
physical, but not mental, disabilities, UMass and Colonial violated
state anti-discrimination law, specifically, Massachusetts General
Laws ch. 151B § 4 and 272 §§ 92A, 98, and 98A, as well as the
Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq.
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MCAD notified UMass and Colonial of the charge and requested that
each submit a written “position statement.”
In response, UMass and Colonial filed this action, seeking a
declaratory judgment that Calderon’s state law claims were
preempted by ERISA and injunctive relief barring further
investigation by MCAD.2 UMass and Colonial also moved for a
preliminary injunction.
MCAD and Calderon filed cross-motions to dismiss for lack of
jurisdiction under the Younger abstention doctrine. They argued
that preemption could not be “facially conclusive” here, for two
reasons. First, they argued that Calderon’s state law claims were
not subject to ERISA preemption because they also constituted
federal discrimination claims under the ADA. Because the First
Circuit has never addressed whether the ADA prohibits
discrimination between mental disabilities and physical
disabilities in the provision of STD benefits, Calderon and MCAD
argued that this constituted a question of first impression; thus,
that preemption could not be facially conclusive. Second, they
argued that a factual dispute existed as to whether the STD plan at
issue actually qualified as an employee benefits plan under ERISA,
2
UMass and Colonial acknowledged that ERISA would not
preempt Calderon’s claims under the ADA. They argued, however,
that if the state law claims were preempted, MCAD would lack
authority to adjudicate the remaining federal claims and those
claims, instead, would have to be investigated by the Equal
Employment Opportunity Commission.
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and that the existence of such a dispute required abstention under
Younger, or, at a minimum, a factual determination by the district
court.
The district court rejected both arguments and declined to
abstain. It reasoned that, although the Younger criteria for
abstention were met, it was “facially conclusive” that ERISA
preempted the MCAD investigation with regard to Calderon’s state
anti-discrimination claims. In order to reach this conclusion, the
district court first conducted its own analysis of whether
Calderon’s discrimination claims could succeed under the ADA, and
thus survive preemption. It concluded that the ADA would not apply
to Calderon’s claims and, thus, they were preempted by ERISA.
The district court further concluded that no factual
determination regarding the plan’s ERISA status was necessary,
reasoning that “factual inquiry [into the ERISA status of
plaintiff’s plan] is collateral to the issue presented here, and
need not be conducted in federal court.” The district court
explained:
At this stage of the proceedings, in deciding a motion
for preliminary injunction, the Court finds only that the
portion of the MCAD investigation applying state anti-
discrimination law to a plan covered by ERISA is
preempted. If further factual investigation before the
MCAD, or future discovery in this action, reveals that
the plan at issue here is in fact not covered by ERISA,
the preliminary injunction will be modified accordingly.
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Accordingly, the district court denied MCAD and Calderon’s motions
to dismiss and enjoined MCAD’s investigation of Calderon’s charge
pendente lite. This timely appeal followed.
II. “Facially Conclusive” Preemption Under Younger
Ordinarily, we “review the grant of a preliminary injunction
for abuse of discretion.” Boston Duck Tours, LP v. Super Duck
Tours, LLC, 531 F.3d 1, 11 (1st Cir. 2008). However, we review de
novo whether Younger mandates a district court’s abstention. Rio
Grande Cmty. Health Ctr., Inc. v. Rullan, 397 F.3d 56, 68 (1st Cir.
2005) (citing Younger, 401 U.S. at 45–47). If Younger requires
abstention, “there is no discretion to grant injunctive relief.”
Colo. River Water Conservation Dist. v. United States, 424 U.S.
800, 817 n.22 (1976).
A.
As a matter of comity, federal courts are required to abstain
from enjoining ongoing state court proceedings absent extraordinary
circumstances. Younger, 401 U.S. at 43–47 (addressing state
criminal prosecutions); New Orleans Pub. Serv., Inc. v. City of New
Orleans (“NOPSI”), 491 U.S. 350, 366–68 (1989) (extending Younger
to civil proceedings). “Ordinarily, the Younger question [of
abstention] must be decided before decision on the merits of the
underlying claim.” Local Union No. 12004, USW v. Massachusetts,
377 F.3d 64, 76 n.11 (1st Cir. 2004) (citing Hicks v. Miranda, 422
U.S. 332, 346 (1975)).
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Under Younger, a federal court must abstain “if (1) there is
an ongoing state judicial proceeding involving the federal
plaintiff that (2) implicates important state interests and (3)
provides an adequate opportunity for the federal plaintiff to
assert his federal claims.” Id. at 77 (citing Middlesex County
Ethics Comm. v. Garden State Bar Ass’n, 457 U.S. 423 (1982)).
The district court found that the three criteria for
abstention under Younger were met here, and we agree. The parties
do not dispute two of the criteria, namely, that a state judicial
proceeding was pending before MCAD, and that those proceedings
provided an adequate opportunity to raise the federal questions at
issue. Under the remaining criterion, Colonial and UMass argue
that the state proceedings do not implicate important state
interests. We disagree — prohibiting unlawful employment
discrimination is a “sufficiently important state interest” to
warrant abstention. See Ohio Civil Rights Comm’n v. Dayton
Christian Sch., Inc., 477 U.S. 619, 629 (1986).
Because the three criteria of Younger are satisfied,
abstention would be required unless an exception applies. See
Local Union No. 12004, 377 F.3d at 77. The district court
concluded it did not need to abstain because preemption was
“facially conclusive,” and we now turn to consideration of whether
that exception was in fact applicable here.
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B.
The Court has acknowledged that, “even assuming the state
proceedings . . . are the sort to which Younger applies,”
abstention may not be appropriate “if the federal plaintiff will
‘suffer irreparable injury’ absent equitable relief.” NOPSI, 491
U.S. at 366 (quoting Younger, 401 U.S. at 43–44). NOPSI further
suggested that “[i]rreparable injury may possibly be established .
. . by a showing that the challenged state statute is ‘flagrantly
and patently violative of express constitutional prohibitions.’”
Id. (quoting Younger, 401 U.S. at 53–54). This suggestion, in
turn, formed the basis for the Court’s observation that a “facially
conclusive” claim of preemption may likewise be “sufficient to
render abstention inappropriate.” Id. at 367.
Because the Court concluded that the proceedings there at
issue would not meet such a standard, it stopped short of
determining whether such an exception actually existed. Id. That
observation, however, has provided a sufficient basis for several
circuits, including the First Circuit, subsequently to recognize
an exception to abstention where preemption is “facially
conclusive.” See Chaulk Servs., Inc. v. Mass. Comm’n Against
Discrimination, 70 F.3d 1361, 1370 (1st Cir. 1995); Local Union No.
12004, 377 F.3d at 78.
As is often the case with abstract legal standards, courts
have largely defined the term “facially conclusive” by rejecting
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that which it is not. For example, the NOPSI Court explained that
merely showing “a substantial claim of federal pre-emption” is not
enough. 491 U.S. at 366–67 (emphasis supplied). Likewise, it
noted that “[w]hat requires further factual inquiry can hardly be
deemed “flagrantly” unlawful for purposes of a threshold abstention
determination. Id. Finally, two of our sister circuits have held
that questions of first impression preclude application of the
“facially conclusive” exception. See GTE Mobilnet of Ohio v.
Johnson, 111 F.3d 469, 478 (6th Cir. 1997); Woodfeathers, Inc. v.
Wash. County, Or., 180 F.3d 1017, 1022 (9th Cir. 1999).
Calderon and MCAD argue that these principles preclude
application of the “facially conclusive” exception here. We turn
first to Calderon’s argument that ERISA preemption was not facially
conclusive because a question of first impression existed regarding
her claims under the ADA.
1.
As the district court correctly noted, ERISA preempts “any and
all State laws insofar as they may now or hereafter relate to any
employee benefit plan described in section 1003(a) of this title
and not exempt under section 1003(b) of this title.” 29 U.S.C. §
1144(a); Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 91 (1983).
ERISA, however, does not preempt other federal laws, such as the
ADA. See 29 U.S.C. § 1144(d) (“[N]othing in this subchapter shall
be construed to alter, amend, modify, invalidate, impair, or
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supersede any law of the United States.”); Shaw, 463 U.S. at
102–03; Tompkins v. United Healthcare of New Eng., Inc., 203 F.3d
90, 96–97 (1st Cir. 2000). Further, because the ADA “contemplates
that state laws will contribute to the overall federal enforcement
regime,” we have held that “state statutory claims target[ing]
conduct unlawful under the ADA . . . would be exempt from ERISA
preemption” as well. Id.
Calderon argued before the district court that her state law
claims allege acts that are prohibited by the ADA, thus barring
preemption. She further argued that, because the ADA’s
applicability to her claims presents a question of first impression
in this circuit, preemption was not facially conclusive and that
abstention was required. Colonial and UMass responded by arguing
that, where preemption turns on the scope of another federal law,
district courts have the authority to weigh novel arguments about
that scope in order to determine the scope of preemption.
We have not had occasion to decide whether the ADA prohibits
as discriminatory an employer’s decision to provide short-term
disability benefits to individuals with physical disabilities, but
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not to those with mental disabilities.3 Therefore, this
constitutes a question of first impression in our circuit.
That, however, is not the question before us today. Rather,
we must decide whether the district court properly delved into the
question of the ADA’s applicability to Calderon’s claims under the
strictures of the abstention doctrine as set forth in Younger and
its progeny. The district court acknowledged the lack of
controlling precedent on the question of whether the ADA applies to
claims such as Calderon’s, but concluded that, under Partners
Healthcare Sys., Inc. v. Sullivan, 497 F. Supp. 2d 29, 40 (D. Mass.
2007), it was permitted to answer that question before determining
whether preemption was facially conclusive. It further concluded
that, in fact, it was required to do so under Shaw. Thus, the
district court “considered the rationale behind both positions” and
determined that “the conclusion and reasoning of the court in
3
The district courts in this circuit are divided on the
issue. Compare Witham v. Brigham & Women’s Hosp., Inc., 2001 WL
586717, at *3 (D.N.H. 2001) (holding that the ADA does not require
equal benefits); Wilson v. Globe Specialty Prods., Inc., 117 F.
Supp. 2d 92, 96 (D. Mass. 2000) (same); Conners v. Me. Med. Ctr.,
42 F. Supp. 2d 34, 55 (D. Me. 1999) (same); with Fletcher v. Tufts
Univ., 367 F. Supp. 2d 99, 111 (D. Mass 2005) (holding that the ADA
prohibits discrimination between benefits for mental and physical
disabilities); Iwata v. Intel Corp., 349 F. Supp. 2d 135, 149 (D.
Mass. 2004) (same); Boots v. Nw. Mut. Life Ins. Co., 77 F. Supp. 2d
211, 220 (D.N.H. 1999) (same).
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Wilson [were] substantially more compelling” and made “considerable
practical sense.”4
We consider first whether Shaw, indeed, requires a district
court to undertake such an analysis and conclude that it does not,
for the simple reason that Shaw was a straightforward preemption
case and did not address abstention under Younger. See Shaw, 463
U.S. 92–93. It is true that Shaw indicates that a district court
faced with a preemption question must determine whether the alleged
acts are prohibited by federal law. See id. at 95–96. Shaw,
however, does not address the interplay between “facially
conclusive” preemption and the Younger abstention doctrine, let
alone hold that a district court’s preemption inquiry must trump
Younger’s requirements.
Indeed, the Supreme Court has already rejected such an
approach to the abstention inquiry. In NOPSI, the Court expressly
rejected NOPSI’s argument that “a district court presented with a
pre-emption-based request for equitable relief should take a quick
look at the merits; and if upon that look the claim appears
substantial, the court should endeavor to resolve it.” See NOPSI,
491 U.S. at 364–65; see also Local Union No. 12004, 377 F.3d at 76
n.11 (“Ordinarily, the Younger question must be decided before
4
Curiously, the district court conducted this analysis,
and resolved it in favor of Colonial and UMass, despite that fact
neither Colonial nor UMass briefed the merits of the ADA claims
raised by Calderon.
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decision on the merits of the underlying claim.”). Thus, while we
recognize that Colonial and UMass may have stated “a substantial
claim of federal pre-emption,” such a claim is not enough to
justify a federal court’s intervention in an ongoing state
proceeding. NOPSI, 491 U.S. at 366–67.
In sum, the district court’s need to conduct a “detailed
analysis,” including resolving interjurisdictional differences,
demonstrates that ERISA preemption of Calderon’s state law claims
was not, in fact, “facially conclusive.” See GTE Mobilnet, 111
F.3d at 478. Therefore, we conclude that the principles set forth
in Younger required the district court to abstain in deference to
the state proceeding already underway.
The same principles of comity and federalism that proscribe
the district court’s jurisdiction likewise prohibit our
consideration of the merits of Calderon’s ADA claims in the first
instance. See id. at 476–78. “In fact, to decide this preemption
issue would require us to enter into a detailed analysis of state
[and federal] law, a task in which we will not engage.” Id. at
478. MCAD has jurisdiction to conduct this analysis in the first
instance, and must be permitted to do so.
2.
Because the existence of a question of first impression
regarding the ADA’s applicability to Calderon’s claims precludes
preemption from being facially conclusive, and requires the
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district court to abstain under Younger, we need not address
whether the existence of a factual dispute as to the ERISA status
of Colonial’s STD plan required the district court either to make
a factual determination or abstain under Younger. We note,
however, that the record shows Calderon presented evidence
sufficient to raise a factual dispute as to whether the STD plan
she purchased from Colonial was governed by ERISA, or would instead
find refuge in the “safe harbor” regulation under which the
Secretary of Labor chose to exempt from ERISA certain group
insurance programs where the employer is only minimally involved in
providing the coverage. See 29 C.F.R. § 2510.3-1(j). We observe
here only that, given the existence of this factual dispute, we see
several problems with the district court’s determination that
preemption was “facially conclusive.”
First, contrary to the district court’s assertion that it did
not need to resolve this question, ERISA only preempts state laws
to the extent that they “relate to any employee benefit plan”
governed by ERISA. 29 U.S.C. § 1144(a). Thus, “[e]xpress ERISA
preemption analysis . . . involves two central questions: (1)
whether the plan at issue is an ‘employee benefit plan’ [within
ERISA] and (2) whether the cause of action ‘relates to’ this
employee benefit plan.” Hampers v. W.R. Grace & Co., Inc., 202
F.3d 44, 49 (1st Cir. 2000) (internal quotation marks omitted).
Because Younger prohibits a district court from addressing the
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merits of the parties’ claims unless preemption is facially
conclusive, and ERISA preemption requires that the plan at issue be
covered by ERISA, the plan’s ERISA status would have to be
“facially conclusive.” See Local Union No. 12004, 377 F.3d at 78.
At this juncture, we have substantial doubts as to whether such was
the case in this instance.
III. Conclusion
Because we conclude that preemption cannot be facially
conclusive if it requires the district court’s detailed analysis of
a question of first impression, we reverse the district court’s
entry of a preliminary injunction, and direct that it either
dismiss the action or stay further proceedings until MCAD has
entered a final ruling on the charges pending before it.
Appellants shall recover their costs on appeal from Appellees.
REVERSED and REMANDED with directions.
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