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Flack v. Wisconsin Department of Health Services

United States District Court, W.D. Wisconsin

April 23, 2019

CODY FLACK, et al., Individually and on behalf of all others similarly situated, Plaintiffs,



         In July 2018, the court issued a preliminary injunction enjoining defendants from enforcing Wis. Admin. Code § DHS 107.03(23)-(24) (the “Challenged Exclusion”) against plaintiffs Cody Flack or Sara Ann Makenzie. (Dkt. #70 at 39.) Since then, plaintiffs have filed an amended complaint to name additional, individual plaintiffs Marie Kelly and Courtney Sherwin, as well as assert a class action. (Dkt. #85 at ¶¶ 17-18, 141-49.) Now before the court are plaintiffs' (1) motion to amend the preliminary injunction (dkt. #107) and (2) their unopposed motion to certify a class under Federal Rule of Civil Procedure 23 (dkt. #89; see dkt. #115). For the reasons that follow, both motions will be granted.


         A. Additional Plaintiffs

         1. Marie Kelly

         Marie Kelly is a 38-year-old transgender woman with gender dysphoria, who lives in Milwaukee, Wisconsin. Since approximately 2014, Kelly has relied on Wisconsin Medicaid to cover her healthcare needs. Although identifying as female for most of her life, she was assigned the sex of male at birth.[2] Kelly has lived as a woman since 2010. Since 2011, Kelly has taken feminizing hormone treatments to address her gender dysphoria.

         While the hormone therapy has reduced her symptoms, Kelly's gender dysphoria and anxiety are exacerbated by facial hair and male-appearing chest and genitalia. Because Kelly cannot afford gender-confirming procedures on her own, she is seeking Medicaid coverage for female genital reconstruction, chest reconstruction, and electrolysis for facial hair removal. Several times over the years, including in August 2018, Kelly has inquired about Wisconsin Medicaid's coverage for gender-confirming procedures, but has been told by her managed care organizations that there is no such coverage available.[3]

         Kelly's primary care provider, Linda Wesp, is a Family Nurse Practitioner / Advanced Practice Nurse Prescriber. She opines that “Kelly meets the criteria set forth in the WPATH SOC for receiving gender-confirming surgeries as medically necessary treatment for persistent gender dysphoria, including genital reconstruction and female chest reconstruction.” (Wesp Decl. (dkt. #94) ¶ 12.) Nurse Practitioner Wesp represents that she is also “willing to provide [Kelly] with letters of support stating [her] professional opinion that she meets the criteria for and is eligible to obtain those surgeries.” (Id. ¶ 13.) Wesp opines that “these surgeries are medically necessary and would treat Ms. Kelly's gender dysphoria, enhance her quality of life, and improve her mental health.”[4] (Id. ¶ 14.)

         While neither disputing that Kelly is seeking these treatments to advance her transition, nor that her treatment providers consider gender-confirming surgery medically necessary for her, defendants contend that “[t]here is inadequate evidence to conclude that surgical treatments or electrolysis are of proven medical value or usefulness for treating Kelly's gender dysphoria.” (Defs.' Resp. to Pls.' Suppl. PFOF (dkt. #117) ¶¶ 11-12.) Likewise, they contend that there is no evidentiary support for the assertion that Kelly's treatment provider determined that facial hair removal through electrolysis is medically necessary. (Id. ¶ 12.)

         2. Courtney Sherwin

         Courtney Sherwin is a 35-year-old transgender woman with gender dysphoria. At birth, she was assigned the male sex, but has recognized herself as female since she was approximately ten years old. Sherwin lives in Janesville, Wisconsin, and has been dependent on Wisconsin Medicaid for her healthcare needs for the past two years.

         Before identifying as transgender, Sherwin suffered from anxiety, depression, stress and suicidal ideation caused by the dissonance between her female identity and others' perception of her as a man. In late 2017, she publicly identified as transgender and began her gender transition in early 2018, which is also when she began living as a woman full-time. Specifically, Sherwin abandoned her traditionally male birth name, adopted the name Courtney, and started wearing women's clothing. In March 2018, Sherwin also began feminizing hormone treatments under the direction of her primary care physician. Sherwin contends that Wisconsin Medicaid covers her testosterone blockers, but not her estrogen, progesterone, and finasteride treatments. (Sherwin Decl. (dkt. #95) ¶ 13.)[5]

         While Sherwin's hormone therapy has reduced her gender dysphoria, she is still distressed by her male-appearing chest and genitals, her masculine voice, and her facial hair. Additionally, she contends that the testosterone blockers have had some adverse side effects: dizziness, difficulty focusing, fatigue, dry mouth, nausea, respiratory problems, blackouts, and worsened irritable bowel syndrome. (Id. ¶ 14.) Sherwin further contends that her medical providers consider gender-confirming surgeries and voice therapy to be medically necessary, both to treat her gender dysphoria and to prevent the adverse side effects of testosterone blockers, but plaintiffs only offer hearsay to support these assertions. (Pls.' Suppl. PFOF (dkt. #110) ¶¶ 25-27; Defs.' Resp. to Pls.' Suppl. PFOF (dkt. #117) ¶¶ 25-27.) Likewise, defendants contend that there is no evidence establishing the medical necessity of these treatments for treating Sherwin's gender dysphoria. (Defs.' Resp. to Pls.' Suppl. PFOF (dkt. #117) ¶ 29.)

         Regardless, Sherwin expects that Wisconsin Medicaid will not cover her proposed chest and genital reconstructive surgeries, because of the Challenged Exclusion, and she cannot afford these treatments on her own. While defendants do not dispute that the Challenged Exclusion is enforced, they contend that it was not responsible for denials of voice therapy and a prescription promoting hair growth. (Defs.' Resp. to Pls.' Suppl. PFOF (dkt. #117) ¶¶ 17, 27.) Defendants contend that the voice therapy request was denied because her treatment provider did not provide sufficient documentation for DHS to determine if the service was medically necessary.

         B. Impact of Removing the Challenged Exclusion

         Of course, the Challenged Exclusion has the potential to impact other transgender Wisconsin Medicaid beneficiaries suffering from gender dysphoria who may be recommended for gender-confirming surgical treatments. For example, Wisconsin Medicaid declined to cover a medically recommended orchiectomy for Lexie Vordermann, a 19-year-old transgender woman with gender dysphoria. (See Vordermann Decl. (dkt. #99) ¶¶ 3-5; Jan. 25, 2018 Denial (dkt. #99-1) 2 (“We have reviewed a request from Dan R Gralnek, MD for coverage of removal of testes. Unfortunately, we cannot approve this request.”); Sept. 27, 2018 Denial (dkt. #99-2) 2 (“We have reviewed a request from Dan R Gralnek, MD for coverage of gender reassignment surgery. Unfortunately, we cannot approve this request.”).)[6] Similarly, plaintiffs have submitted affidavits from medical providers who complain of an inability to provide treatment that they believe is both appropriate and medically necessary because of the Challenged Exclusion. (Wesp Decl. (dkt. #94) ¶ 16 (“As a medical provider, I find it incredibly frustrating to know the exact procedure that would help treat my patients, but be unable to obtain that treatment for them because of Wisconsin Medicaid's exclusion.”); Oriel Decl. (dkt. #109) ¶ 14 (“As a physician, I have been trained to provide the best possible care to my patients. The Wisconsin Medicaid exclusion is a flagrant barrier to my ability to do so. The exclusion intrudes on the doctor-patient relationship and limits my ability to provide my patients with treatments I know would alleviate their gender dysphoria and suffering.”).) As this and other courts have previously found, the prohibited procedures are also contrary to what has become accepted, best practice among major medical and psychological professions for those suffering from severe gender dysphoria. (Prelim. Injunction Op. (dkt. #70) 21 n.17;) Good v. Iowa Dept. of Human Servs., No. 18-1158, 2019 WL 1086614, at *2 (Iowa Mar. 8, 2019) (noting testimony establishing “the accepted standards of medical care to alleviate gender dysphoria . . . involve the following options: socially transitioning to live consistently with one's gender identity, counseling, hormone therapy, and gender-affirming surgery to conform one's sex characteristics to one's gender identity.”); Hicklin v. Precynthe, No. 4:16-cv-01357-NCC, 2018 WL 806764, at *3 (E.D. Mo. Feb. 9, 2018) (noting testimony establishing that the WPATH Standards of Care are “the internationally recognized guidelines for the treatment of persons with gender dysphoria”).

         The parties dispute to what extent -- if any -- removing the Challenged Exclusion would impact Wisconsin Medicaid's budget. Defense expert David Williams estimates that of the 1.2 million beneficiaries of Wisconsin Medicaid, approximately 63 -- or 0.005% -- would seek Medicaid coverage for a gender-confirming surgery in a given year, which he estimates would cost approximately $300, 000 per year -- or 0.008% of the $3.9 billion Wisconsin spends on Medicaid annually. Defendants contend that if 97% of the estimated 5, 000 transgender Wisconsin Medicaid beneficiaries sought gender-confirming surgery, the state would be responsible for paying approximately $1.2 million per year. (Williams Suppl. Decl. (dkt. #122) ¶¶ 25-28.) However, this assumption seems wholly unfounded. (See Prelim. Injunction Op. (dkt. #70) 31 (“[N]ot all transgender people have gender dysphoria; not all people suffering from gender dysphoria are interested in surgery; and only a subset of those people will meet the WPATH Standards of Care making the surgery medically necessary.”); Cal. Dept. of Ins. Econ. Impact Assessment: Gender Nondiscrimination in Health Ins. (dkt. #96-2) 9 (explaining that “treatment options for GID vary greatly and not all transgender people with the diagnosis will undergo surgical intervention, ” “gender-confirming healthcare is an individualized treatment that differs according to the needs and pre-existing conditions of individual transgender people, ” and that many factors “impact utilization and cost, ” including “[o]ther health factors [that] can contraindicate treatment”).

         Plaintiffs' expert Jaclyn White Hughto, PhD, MPH, opined that removing the Challenged Exclusion “would result in minimal short-term costs to the State of Wisconsin and would lead to significant longer-term cost savings for the State.” (Hughto Suppl. Decl. (dkt. #96) ¶ 5.) As to the short term, predictions of minimal costs for including coverage for gender-confirming surgery appear reasonable. (Cal. Dept. of Ins. Econ. Impact Assessment: Gender Nondiscrimination in Health Ins. (dkt. #96-2) 3 (“While insurers may use someone's health status to determine their premium, analysis of the potential increase in claim costs from the proposed regulation shows that any such costs are immaterial and insignificant.”); id. (“[T]he aggregate cost to the state population as a whole will be very insignificant.”); id. at 9 (“Based on evidence of low utilization and prevalence rates . . ., the Department has determined that the impact on costs or increases in premiums due to the adoption of the proposed regulation would be immaterial.”).)[7] As for the longer term, Dr. Hughto opines that these savings would result from the “significant benefits for transgender individuals on Wisconsin Medicaid [for whom treatment is medically necessary], including reductions in gender dysphoria, depression, anxiety, suicidality, substance abuse, HIV transmission and acquisition, and physical and sexual assault, as well as improvements in socioeconomic status, ” which would “offset the cost of providing gender-confirming surgeries.” (Hughto Suppl. Decl. (dkt. #96) ¶ 7; see also Id. ¶¶ 10-20.) Defendants dispute this, arguing that Hughto's opinion is based on evidence lacking an adequate foundation and that her opinion provides “no reliable basis to calculate any cost savings, ” except as to the estimated cost savings of approximately $2, 600 relating to decreased suicidal ideation, plans and attempts. (Defs.' Resp. to Pls.' Suppl. PFOF (dkt. #117) ¶ 2; Williams Suppl. Decl. (dkt. #122.) ¶¶ 6-8.)


         I. Motion to Certify a Class

         At the outset, plaintiffs seek to certify a class under Federal Rules of Civil Procedure 23(a) and 23(b)(2) to pursue declaratory and injunctive relief. (Mot. to Certify (dkt. #89) 1.) Specifically, they propose and seek to represent the following class: “All transgender individuals who are or will be enrolled in Wisconsin Medicaid, have or will have a diagnosis of gender dysphoria, and who are seeking or will seek surgical or medical treatments or services to treat gender dysphoria.” (Id.)

         To certify a class, plaintiffs must satisfy a two-step process. See Fed. R. Civ. P. 23(a)-(b); Lacy v. Cook Cty., Ill., 897 F.3d 847, 864 (7th Cir. 2018). First, the proposed class must satisfy the four threshold requirements under Rule 23(a): numerosity, commonality, typicality and adequacy. Fed.R.Civ.P. 23(a). If the Rule 23(a) prerequisites are satisfied, then “the plaintiffs must demonstrate that one of the conditions of Rule 23(b) is met.” Lacy, 897 F.3d at 864. In this case, plaintiffs must establish that the challenged conduct “appl[ies] generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” Fed.R.Civ.P. 23(b)(2). Because plaintiffs meet these requirements, this motion will be granted. Lacy, 897 F.3d at 863 (“A class may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites for class certification have been met.” (quoting Bell v. PNC Bank, Nat'l Ass'n, 800 F.3d 360, 373 (7th Cir. 2015)).

         A. Threshold Requirements

         1. Numerosity

         First, the plaintiffs must establish that their proposed “class is so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). A class's size need not be determined with absolute certainty; rather, the requirement is satisfied “so long as it's reasonable to believe [that the class is] large enough to make joinder impracticable and thus justify a class action suit.” Chapman v. Wagener Equities Inc., 747 F.3d 489, 492 (7th Cir. 2014) (citing Kohen v. Pac. Inv. Mgmt. Co., 571 F.3d 672, 677-78 (7th Cir. 2009)).

         As the court noted previously, “[a]pproximately 5, 000 of [the Wisconsin Medicaid] enrollees are transgender, and some subset of this population suffers from gender dysphoria.” (Prelim. Injunction Op. (dkt. #70) 5-6.) Of the subset that suffers from gender dysphoria, gender-confirming surgeries may also be deemed medically necessary for some. (See Hughto Decl. (dkt. #26) ¶ 49 (estimating that “at least 5, 000 Wisconsin Medicaid recipients are transgender adults who may be affected by the surgical exclusion at some point in their lives”); Hughto Suppl. Decl. (dkt. #96) ¶ 22 (explaining how she arrived at estimate of 5, 000).) While this suggests the number of present, and even future, members of the class are far fewer than 5, 000, the court will accept that the proposed class may be too numerous to join in a single lawsuit, especially since some members of the class are not capable of being identified until sometime in the future. Likewise, as plaintiffs point out, even if joinder were possible it would be ill-advised and difficult to achieve because of the sensitive nature of the claims, the plaintiffs' limited financial means, and their varied locations across the state. (Mot. to Certify Br. (dkt. #90) 17-18.) Accordingly, the proposed class which seeks to cover all Wisconsin Medicaid-enrolled transgender individuals with gender dysphoria who “seek[] or will seek” treatment for gender dysphoria is numerous enough to make “joinder of all members . . . impracticable.” Fed.R.Civ.P. 23(a)(1).

         2. Commonality

         Next, the plaintiffs must show that “there are questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). To establish commonality, plaintiffs “must assert a common injury that is ‘capable of classwide resolution -- which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Lacy, 897 F.3d at 865 (quoting Wal-Mart Stores, Inc. v. Dukes,564 U.S. 338, 350 (2011)). Put another way, “the key to commonality is ‘not the raising of common ‘questions' . . . but, rather, ...

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