SAKS v. FRANKLIN COVEY CO.

The opinion of the court was delivered by: McMAHON, District Judge.

Infertility blights the lives of thousands of American families. Fortunately, modern medicine has devised ways that enable some of those who suffer from infertility to conceive biological children and carry them to term. Like so many of the extraordinary advances in medicine, these treatments are quite expensive. It is a testament to the basic nature of the reproductive drive that people who are desperate to have children will go to great lengths to conceive — often enduring extreme physical discomfort and incurring expenses that bring them close to bankruptcy. The physical discomforts are, of course, unavoidable. Whether the financial discomfort can be avoided by one family, at least, is the central issue in this case.

From March 1995 through October 1999, plaintiff Rochelle Saks was employed by defendant Franklin Covey, a seller of products and services related to time management, organization and business communication training. During that period, plaintiff and her husband were endeavoring to have a child. Saks and her husband had numerous treatments, prescribed by two different doctors, to enable her to conceive and carry a child, including a regimen of clomiphine ("Clomid") and progesterone and intrauterine insemination ("IUI"), which were unsuccessful. She also completed two cycles of in vitro fertilization ("IVF"), in April 1999 and August 1999. She became pregnant three times between September 1997 and August 1999. All three pregnancies ended in miscarriages.

Saks made claims for insurance reimbursement for her treatments. For purposes of this motion, defendants concede that plaintiff suffered from the condition known as infertility and that all of the treatments prescribed to help her become pregnant, including in vitro fertilization and intra-uterine implantation, were "medically necessary" as that term is defined in Franklin Coveys' self-insured health benefits plan.*fn1 Ms. Saks' surgical fertilization procedures, which were rendered by American medical professionals, qualify as "a service required for the treatment of an active illness" (that illness being the inability to conceive a child in the usual way).

Nonetheless, Franklin Covey has declined to cover the cost of those procedures. Its insurance Plan specifically excludes coverage for "surgical impregnation procedures," including artificial insemination and in vitro fertilization. Saks contends in this lawsuit that this exclusion violates three separate Federal statutes: The Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq.; Title VII of the Civil Rights Act of 1964, as amended ("Title VII"), 42 U.S.C. § 2000e et seq.; and the Pregnancy Discrimination Act ("PDA"), 42 U.S.C. § 2000e(k). She also contends that the exclusion violates the New York Executive Law § 296 ("the New York Human Rights Law"), and that Franklin Covey has breached its contractual relationship under the Plan by declining coverage, not only for the surgical procedures, but for other medical services relating to her failed pregnancies. After discovery, both parties have moved for summary judgment — defendants for dismissal of the complaint, plaintiff for partial summary judgment on the issue of liability.

For the reasons stated below, I am dismissing plaintiff's claim that Franklin Covey's refusal to cover surgical procedures that create pregnancy violates the law.

Standards for Summary Judgment

The usual standards for an award of summary judgment apply: a party is entitled to judgment if there is no dispute of material fact and that party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). I view the facts most favorably to plaintiff for purposes of considering defendants' motion, which I elect to consider first since, if granted, it would dispose of the entire case.

Statement of Facts

The following facts are undisputed for purposes of this motion.*fn2 Plaintiff was employed by defendant Franklin Covey Co. as a store manager at the company's retail store from March 1995 until she resigned in October 1999. As part of its benefits package, Franklin Covey offers a self-insured health benefits plan ("the Plan") that provides coverage to all full-time employees and their dependents. The company has a contractual arrangement with The TPA, Inc. ("The TPA"), an administrator for self-insured health benefit plans, to act as the third-party processing agent for claims made under the Company's Plan.

The Plan provides coverage for all "medically necessary" treatments, which are defined under the Plan as "any service or supply required for the diagnosis or treatment of an active illness or injury that is rendered by or under the supervision of the attending physician, generally accepted by medical professionals in the United States and non-experimental."

An "illness" is defined as "any bodily sickness, disease, mental/nervous disorder or pregnancy." Jane Clark, a Claim Support Manager for the TPA, testified that infertility is a "disease" or "illness" within the meaning of the Plan. Ms. Clark also testified that fertility drugs and assisted reproductive techniques such as intrauterine insemination ("IUI") and in vitro fertilization ("IVF") are not considered experimental treatments for the disease of infertility. However, the Plan excludes coverage for "surgical impregnation procedures," including IVF and IUI. "[C]omplications arising from any non-covered surgery" are also excluded from coverage.

Plaintiff has unsuccessfully attempted to conceive since May 1994. In July 1995, she consulted with Dr. Ralph Berardi, an OB/GYN, who suspected that plaintiff suffered from polycystic ovarian syndrome. Plaintiff underwent a test that ruled out that possibility, and Dr. Berardi recommended that plaintiff and her husband, Joel Saks, continue to attempt a pregnancy through sexual relations. In February 1996, Plaintiff began seeing another OB/GYN, Dr. Deborah Cerar, who recommended that plaintiff undergo several diagnostic tests to determine the cause of her infertility. None of these tests revealed the source of plaintiff's infertility. Upon Dr. Cerar's recommendation, plaintiff began using ovulation kits to determine when she was ovulating so that intercourse with her husband could be timed to maximize the likelihood of conception. This approach, however, proved unsuccessful.

In November 1996, Plaintiff consulted with Dr. John Stangel, a specialist in the area of reproductive endocrinology. Dr. Stangel prescribed for plaintiff the drug Clomid in order to induce and regulate ovulation, and recommended that this treatment be accompanied by intrauterine inseminations ("IUI") and regular intercourse to increase the chances for a successful conception. Because patients who take Clomid must be monitored for potential side effects, plaintiff underwent ultrasounds and blood tests while on that medication. Plaintiff also continued to use ovulation kits in conjunction with her other treatments. She completed two IUI's with Dr. Stangel, neither of which resulted in pregnancy.

By May or June 1997, plaintiff had become dissatisfied with Dr. Stangel's insemination procedures, and decided to switch to a new reproductive endocrinologist, Dr. Gad Lavy. In or about May or June 1997, plaintiff called defendants' third-party administrator ("TPA") to determine the benefits to which plaintiff was entitled under the Plan for her initial visit with Dr. Lavy. The TPA informed plaintiff that, except for the $15 co-payment required for all doctor visits, the initial consultation would be covered under the Plan.

Plaintiff consulted with Dr. Lavy in or about July or August 1997. Lavy diagnosed plaintiff as having a hormonal imbalance and, consequently, ovulation disorder. Dr. Lavy recommended (1) treatment with Clomid, estrogen and progesterone to regulate plaintiff's ovulation, and (2) continued IUI and regular intercourse to increase the likelihood of successful conception. Plaintiff underwent the first cycle of IUI in August 1997. The administration of Clomid to plaintiff of Clomid had to be monitored with blood work and ultrasound tests, as did her course of estrogen and progesterone treatment.

Plaintiff submitted claims to the TPA for all the expenses incurred in connection with Dr. Lavy's treatment. However, the TPA authorized reimbursement only for venipuncture that Lavy had performed on plaintiff, as well for the cost of the drugs estradiol and progesterone administered on August 29, 1997. Payment for the remainder of Lavy's treatment was denied.

On September 8, 1997, plaintiff learned that she was pregnant. During the following two weeks, her pregnancy was closely monitored with ultrasound and blood tests, which defendants refused to cover. Her first ultrasound revealed a heartbeat, as well as a possible second gestational sac. Her second ultrasound, however, on or about September 27, revealed no heartbeat in the first gestational sac, and a follow-up blood test showed a decrease in HCG, the pregnancy hormone. A subsequent test on October 6 confirmed that plaintiff had miscarried, and she underwent a dilation and curettage ("D & C") the next day to remove the miscarried fetus. Further tests on the fetus to determine the cause of the miscarriage were inconclusive.

The TPA refused to reimburse plaintiff for the cost of the D & C, hysterosalpingogram, and the pathology tests performed after plaintiff's miscarriage. Plaintiff successfully appealed that denial, however, and in October 1998, the TPA provided coverage for her pregnancy-related expenses.

Plaintiff continued her treatments with Dr. Lavy through December 1998, or thereabouts, during which time she underwent ten more IUIs. From November 1997 until April 1998, she continued the course of Clomid, progesterone and estrogen accompanied by IUIs. Beginning in May 1998, Dr. Lavy prescribed Humagon, an injectable drug (plaintiff does not recall whether the Humagon was administered in place of, or in conjunction with, the Clomid). Plaintiff continued the course of progesterone, estrogen and IUIs and the monitoring with ultrasounds and blood work that her treatment entailed. Dr. Lavy also advised plaintiff to undergo another hysterosalpingogram, the results of which came back negative. Dr. Lavy then told plaintiff that the next appropriate treatment step was in vitro fertilization ("IVF"). Plaintiff claims that she was unable to pursue that course of action because of defendants' refusal to cover the cost of her treatment with Dr. Lavy. The TPA refused coverage for all of the IUIs and related drug and monitoring expenses that plaintiff incurred while in Dr. Lavy's care. Consequently, plaintiff and her husband were forced to pay for this treatment personally.

In December 1998, Dr. Lavy informed plaintiff that he would not continue to provide her with further treatment until she paid in full the outstanding balance of Lavy's fee, which totaled approximately $6,000. Plaintiff was ...