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Dragovich v. United States Department of Treasury

United States District Court, N.D. California

December 4, 2014

MICHAEL DRAGOVICH, et al., on behalf of themselves and all others similarly situated, Plaintiffs,
v.
UNITED STATES DEPARTMENT OF THE TREASURY, et al., Defendants.

ORDER DENYING PLAINTIFFS' MOTIONS (1) FOR CLASS NOTICE; (2) FOR ADDITIONAL REMEDIES; (3) FOR LEAVE TO SUPPLEMENT THE COMPLAINT; (4) FOR SUMMARY ADJUDICATION; AND (5) TO COMPEL DISCOVERY, AND GRANTING FEDERAL AND STATE DEFENDANTS' CROSS-MOTIONS FOR SUMMARY JUDGMENT (DKT NO. 185)

CLAUDIA WILKEN, District Judge.

Currently before the Court are Plaintiffs' motions (1) for class notice; (2) for additional remedies; (3) for leave to supplement the complaint; (4) for summary adjudication; and (5) to compel limited discovery from State Defendants. State Defendants and Federal Defendants oppose the motions. In addition, State Defendants cross-move for partial summary judgment as to the two 42 U.S.C. § 1983 claims against them and Federal Defendants cross-move for summary judgment regarding Plaintiffs' substantive due process and equal protection claims brought on behalf of the domestic-partner class members. Having considered the parties' papers and oral argument on the matter, the Court DENIES Plaintiffs' motions and GRANTS Defendants' cross-motions. Docket No. 185.

BACKGROUND

The Court's prior orders outline the relevant factual and statutory background at length. This order provides only a brief summary of the background relevant to the resolution of the instant motions.

I. Long-term Care Insurance and the Challenged Provisions

Plaintiffs are California public employees and their same-sex spouses and registered domestic partners, who are in long-term committed relationships recognized and protected under California law. As explained in this Court's previous orders, CalPERS provides retirement and health benefits, including long-term care insurance, to many of the state's public employees and retirees and their families. Long-term care insurance provides coverage when a person needs assistance with basic activities of living due to injury, old age, or severe impairments related to chronic illnesses, such as Alzheimer's disease.

In 1996, Congress passed the Defense of Marriage Act (DOMA), which, among other things, defined the terms "spouse" and "marriage" for federal law purposes in a manner limiting them to heterosexual couples. As amended by § 3 of the DOMA, the United States Code provides,

In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word "marriage" means only a legal union between one man and one woman as husband and wife, and the word "spouse" refers only to a person of the opposite sex who is a husband or a wife.

1 U.S.C. § 7.

Title 26 U.S.C. § 7702B(f) was also enacted in 1996, as part of the Health Insurance Portability and Accountability Act (HIPAA), providing favorable federal tax treatment to participants in qualified state-maintained long-term care insurance plans for state employees. 26 U.S.C. § 7702B(f). Currently, the CalPERS long-term care insurance program is a qualified state-maintained plan pursuant to § 7702B(f).

Section 7702B(f)(2) disqualifies a state-maintained plan from favorable tax treatment if it provides coverage to individuals other than those specified under its subparagraph (C). The list of eligible individuals in § 7702B(f)(2)(C) includes state employees and former employees, their spouses, and individuals bearing a relationship to the employees or spouses which is described in subparagraphs (A) through (G) of 26 U.S.C. § 152(d)(2). Id.

Section 152(d)(2), the part of the tax code from which subparagraph (C) draws its list of eligible relatives, defines the relatives for whom a taxpayer may claim a dependent exemption. See 26 U.S.C. §§ 151-52. Section 152(d)(2), subparagraphs (A) through (H), identifies the following individuals as "qualifying relatives" for the dependent exemption:

(A) A child or a descendant of a child.
(B) A brother, sister, stepbrother, or stepsister.
(C) The father or mother, or an ancestor of either.
(D) A stepfather or stepmother.
(E) A son or daughter of a brother or sister of the taxpayer.
(F) A brother or sister of the father or mother of the taxpayer.
(G) A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
(H) An individual... who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a ...

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