4:10-cv-01564 #180

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William C. McNeill, III, State Bar No. 64392
Elizabeth Kristen, State Bar No. 218227
LEGAL AID SOCIETY-
EMPLOYMENT LAW CENTER
180 Montgomery Street, Suite 600
San Francisco, CA 94104
Telephone: (415) 864-8848
Facsimile: (415) 593-0096
Email: [email protected]
[email protected]

Daniel S. Mason, State Bar No. 54065
Patrick Clayton, State Bar No. 240191
ZELLE HOFMAN VOELBEL & MASON LLP
44 Montgomery Street, Suite 3400
San Francisco, CA 94104
Telephone: (415) 693-0700
Facsimile: (415) 693-0770
Email: [email protected]

Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
OAKLAND DIVISION

MICHAEL DRAGOVICH, MICHAEL
GAITLEY, ELIZABETH LITTERAL,
PATRICIA FITZSIMMONS, CAROLYN
LIGHT, CHERYL LIGHT, DAVID BEERS,
CHARLES COLE, RAFAEL V.
DOMINGUEZ, and J OSE G. HERMOSILLO,
on behalf of themselves and all others similarly
situated,

Plaintiffs,

v.

UNITED STATES DEPARTMENT OF THE
TREASURY, TIMOTHY GEITHNER, in his
official capacity as Secretary of the Treasury,
United States Department of the Treasury,
INTERNAL REVENUE SERVICE,
DOUGLAS SHULMAN, in his official
capacity as Commissioner of the Internal
Revenue Service, BOARD OF
ADMINISTRATION OF CALIFORNIA
PUBLIC EMPLOYEES’ RETIREMENT
SYSTEM, and ANNE STAUSBOLL, in her
official capacity as Chief Executive Officer,
CalPERS,
Defendants.
Case No. CV 4:10-01564-CW


CLASS ACTION


JOINT CASE MANAGEMENT
STATEMENT


J udge: Hon. Claudia Wilken
Date: J uly 30, 2014
Time: 2:00 p.m.
Place: Courtroom 2
Filed: J uly 25, 2014
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J oint Case Management Conference Statement 1
Case No. CV 4:10-01564-CW

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TO THE HONORABLE CLAUDIA WILKEN:
Pursuant to Civil Local Rule 16-10(d), the parties in the above-entitled action jointly
submit this Case Management Statement in anticipation of the Case Management Conference
on J uly 30, 2014.
At the April 3, 2014 hearing in this matter, the Court raised several questions regarding
that portion of the judgment vacated by and remanded from the Ninth Circuit regarding the
claims of domestic partner class members. Plaintiffs also raised issues regarding the remedies
available to the married class members. Since that time, the parties have endeavored to address
those matters and provide an update herein.
I. Level of Scrutiny Regarding Sexual Orientation Classifications.
Plaintiffs’ Position:
As this Court noted, the Ninth Circuit held in SmithKline Beecham Corp. v. Abbott
Laboratories, 740 F.3d 471, 481 (9th Cir. 2014), that sexual orientation-based classifications
are subject to heightened scrutiny. Since that time, there was an unsuccessful sua sponte en
banc call. 2014 WL 2862588 (J une 24, 2014). Therefore, sexual orientation classifications,
such as those at issue in this case, are subject to heightened scrutiny. Plaintiffs submit that the
portion of the Court’s judgment that was vacated regarding domestic partners should be
reinstated. Since this Court found that the domestic partner sexual orientation based
classification failed rational basis review, this classification would necessarily fail heightened
scrutiny review.
1
As this Court noted on April 3, 2014, the discriminatory history of the sexual
orientation-based classification regarding the domestic partners’ exclusion is not “changed” or
“sanitized” by the application of Windsor or Perry. Transcript at 11, 14, 15. The question of
the ongoing, discriminatory impact to domestic partners was addressed in Plaintiffs’ briefing
(Docket No. 159) and during the April 3, 2014 hearing. Plaintiffs propose that the questions of
ongoing impact on domestic partners be addressed as discussed in the “Domestic Partners”

1
Note that the judgment as to the married plaintiffs was unaffected by the Ninth Circuit
remand and thus remains in effect. Ninth Circuit Docket No. 21.
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J oint Case Management Conference Statement 2
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section below. As explained in that section, contrary to the State Defendants’ position,
Plaintiffs are not talking about a case that they have yet to bring. Moreover, in order to
effectuate remedies, the State Defendants must remain in the case.
Federal Defendants’ Position:
While Federal Defendants agree that classifications based on sexual orientation should
be subjected to heightened scrutiny, the remaining portion of this case involving domestic
partners does not involve such a classification. Federal Defendants therefore submit that the
level of scrutiny for sexual orientation discrimination is irrelevant to the remaining portion of
this case. Federal Defendants further submit that this Court should not reinstate its prior
judgment, which was entered at a time when the statute functioned completely differently than
it does now.
As Federal Defendants have explained during the April 3 hearing and in their post-
remand briefs, see Transcript at 8-15; Dkt. No. 160-1 at 5-9 (filed March 10, 2014) and Dkt.
No. 161 at 2-6 (filed March 20, 2014), after the Supreme Court’s decisions in Windsor v.
United States and Hollingsworth v. Perry, § 7702B(f) no longer has any discriminatory impact
on California same-sex couples under this Court’s prior reasoning because same- and opposite-
sex domestic partners are now treated the same: both can become eligible to purchase
CalPERS’s long-term care (“LTC”) insurance (offered to state employees and their families) by
marrying. Because § 7702B(f) is facially neutral and operates neutrally toward California
couples, Plaintiffs cannot make out a constitutional equal protection claim on the basis of
sexual orientation discrimination. Indeed, this Court recognized at the April 3 hearing that
Plaintiffs would need to show “a discriminatory impact of [§ 7702B(f)],” and it is speculative
whether Plaintiffs can make this showing “given that 99.9 percent of the domestic partners can
get married if they want to.” Transcript at 6. Because the legal landscape has fundamentally
changed and given the lack of any discriminatory impact, it is inappropriate to reinstate this
Court’s prior judgment.

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J oint Case Management Conference Statement 3
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State Defendants Position:
California has changed its public employee long-term care statute to make domestic
partners eligible to apply for enrollment if federal tax law permits. Hence, if anything did
remain of the domestic partners dispute in this case, it would be between Plaintiffs and Federal
Defendants, and there would be no need to enjoin State Defendants, who could be dismissed.
However, Class Counsel appear to be talking about a different domestic partner case they have
yet to bring. That case, if there is one, should proceed on its own as a separate action.
II. Domestic Partner Class Members.
Plaintiffs’ Position:
As Plaintiffs explained in their March 6, 2014 briefing (Docket No. 159) and at the
April 3, 2014 hearing, domestic partner class members are still harmed by their exclusion from
the CalPERS Long Term Care Program (LTCP) because heterosexual partners have never been
required to engage in repeated relationship recognition and as a practical matter, there are
domestic partners who face barriers to marriage. At the April 3, 2014 hearing, this Court
suggested that discovery might be required to address this question. (Transcript at 7-8.) Since
the hearing, Plaintiffs’ counsel have met and conferred with counsel for the State Defendants on
a number of occasions via phone and email (phone calls between Plaintiffs’ counsel and
counsel for the State Defendants were held on May 23, 204 and J uly 21, 2014 with additional
emails exchanged as well). On May 23, 2014, Plaintiffs’ counsel provided counsel for the State
Defendants a copy of a CD from the State of California containing the list of all domestic
partners registered in the State. Counsel for the State Defendants agreed to and have now
compared that list to the list of CalPERS members eligible to participate in the LTCP.
Plaintiffs’ counsel has proposed that notice be distributed to these potential class members
regarding this case and the ongoing injury to domestic partners. Citing privacy concerns, the
State Defendants have declined to provide the list to Plaintiffs’ counsel and have similarly
declined to send notice to the potential class members or have a third-party class action
administrator provide such a notice. Therefore, Plaintiffs’ counsel request that this Court set a
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J oint Case Management Conference Statement 4
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briefing schedule regarding the method for providing notice to the potential domestic partner
class members now identified by the State Defendants.
2

The harm to the domestic partner class members in this certified class does not describe
a new class or a “hypothetical” class as the Federal Defendants suggest. Nor does it require a
new case to be filed. As explained in the remedies section below, Plaintiffs’ current complaint
adequately prayed for the remedies sought here. Moreover, notice to the members of this
certified class is an appropriate solution as contemplated by FRCP 23(c)(2)(A).
Federal Defendants’ Position:
The Second Amended Complaint alleges an equal protection violation on the basis of
sexual orientation discrimination because the same-sex domestic partner class members were
unable to marry in order to enroll the non-state employee domestic partners in CalPERS’s
LTCP. The domestic partner class members sought the injunctive relief of being treated the
same as similarly situated opposite-sex couples. They are now treated the same as similarly
situated opposite-sex couples because they can enroll in CalPERS’s LTCP by marrying.
Accordingly, Federal Defendants submit that the portion of the case involving domestic
partners should be dismissed.
To the extent class counsel now asserts that some domestic partners still may not be
eligible to enroll in CalPERS’s LTCP for reasons entirely different than those alleged in the
Second Amended Complaint, class counsel should file a new case if and when class counsel
finds the very unique set of plaintiffs that counsel speculates may exist. Class counsel
hypothesizes that (1) certain same-sex, domestic partner couples who previously would have
married but for the prohibition by California state law would now either choose not to marry or
are unable to marry due to barriers such as mental incapacity, inability to pay the $70 to $100
marriage licensing fees,
3
or other unspecified reasons; (2) such couples previously would have

2
This Court’s class certification order remains in effect. Docket No. 92.
3
Of course, if a plaintiff is unable to pay the $70 to $100 licensing fee, then it would
call into doubt such plaintiff’s ability to pay the significantly more costly LTC insurance
premiums, which are at least several hundred (if not several thousand) dollars annually.
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J oint Case Management Conference Statement 5
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purchased CalPERS’s LTC insurance and still intend to purchase such insurance; and (3) such
domestic partners are entitled to lower premiums as if they had previously purchased
CalPERS’s LTC insurance and had been paying premiums in the intervening years. These
hypothetical claims and request for new relief constitute an entirely new case with no plaintiffs.
As this Court noted during the April 3 hearing, this hypothetical class is “wildly different from
the class that we had before.” Transcript at 4. It appears that class counsel has been
unsuccessful to date in attempting to find such plaintiffs to assert these claims on behalf of an
entirely new class.
Indeed, the only two existing domestic partner plaintiffs, Hermosillo and Dominguez,
would not be able to assert such new claims and request such new relief because their
declaration stated that they decided against purchasing CalPERS’s LTC insurance the last time
CalPERS had open enrollment in 2008, without knowing that domestic partners of state
employees were ineligible. See Dkt. No. 111-16, ¶ 10 (filed J an. 20, 2012). Their declaration
also stated that they were concerned about the “possible impact of Proposition 8” and the
uncertainty about the status for those who did get married, and therefore they “decided to wait
until everything was more settled.” Id. ¶ 15. Thus, they would not be appropriate class
representatives for those domestic partners who do not want to marry or cannot get married. At
a minimum, plaintiffs Hermosillo and Dominguez would need to amend the complaint showing
that they have standing to assert the above new claims.
State Defendants’ Position:
Again, California has changed its public employee long-term care statute to make
domestic partners eligible to apply for enrollment if federal tax law permits. So, if the domestic
partner class in this case had something left to pursue, it would be against Federal Defendants.
But, as the Court pointed out at the April 3, 2014 hearing, Class Counsel would likely
have to start over and bring a new complaint on behalf of a new, more limited domestic partner
class. Apparently, Class Counsel have found no suitable representative for that new class
action and would like to use this case as a vehicle to find one under the guise of giving notice to
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J oint Case Management Conference Statement 6
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the existing class. But this is a Rule 23(b)(2) case and no notice is necessary.
State Defendants did agree to try to compare a list of California registered domestic
partners supplied by Class Counsel with a list of those enrolled in the CalPERS LTCP. But that
effort has not been successful in isolating potential class members because there is no practical
way to limit the results to same-sex partners without intruding on privacy rights. Before
considering a notice procedure that would include non-class members, opposite sex domestic
partners and invite both kinds of domestic partners to disclose their sexual orientation, the
Court should examine whether Class Counsel’s proposed notice procedure would serve some
legitimate purpose in this case, or is instead aimed at helping them locate a client who might
represent a different class in a different case they would like to bring.
III. Remedies.
Plaintiffs’ Position:
As Plaintiffs further explained in their March 6, 2014, briefing and at the April 3, 2014
hearing, the injury to the class members has not yet been remedied. (Transcript at 25-28.) The
Prayer for relief in Plaintiffs’ Complaint was broad enough to include the specific relief
regarding rate adjustments as described below. Plaintiffs are not seeking new relief. Rather,
Plaintiffs continue to seek make-whole relief for both the married and the domestic partner
class members, including, but not limited to, rate-adjustments so that when they now join the
CalPERS LTCP, their rates are what they would have been had they not been excluded as a
result of unconstitutional discrimination. The Court did not make a ruling on whether this
request was a new request for damages or whether it was, as Plaintiffs’ contend, contained
within the prayer for relief in their Second Amended Complaint. Plaintiffs request that the
Court set a briefing schedule regarding this issue.
It is well-settled that, under the Fourteenth Amendment, a court may require remedial
measures that the Constitution does not of its own force initially require. See e.g., North
Carolina State Bd. of Educ. v. Swann, 402 U.S. 43, 46 (1971) (“[A]ll reasonable methods
[must] be available to formulate an effective remedy.”); Swann v. Charlotte-Mecklenburg Bd.
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J oint Case Management Conference Statement 7
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of Educ., 402 U.S. 1, 15-16, (1971) (“Once a right and a violation have been shown, the scope
of a district court's equitable powers to remedy past wrongs is broad, for breadth and flexibility
are inherent in equitable remedies…. The task is to correct, by a balancing of the individual
and collective interests, the condition that offends the Constitution.”). “To prevent further
constitutional deprivations, a court may order forms of relief not normally required by the
Constitution but nevertheless necessary given the circumstances if the court's efforts are to be
successful.” Smith v. Sullivan, 611 F.2d 1039, 1044 (5th Cir. 1980).
Furthermore, “relief that serves directly to bring an end to a present violation of federal
law is not barred by the Eleventh Amendment even though accompanied by a substantial
ancillary effect on the state treasury.” Papasan v. Allain, 478 U.S. 265, 278 (1986); see also
Milliken v. Bradley, 433 U.S. 267, 288–90 (1977) (injunction requiring state officials to
eliminate prospectively, through sharing in future education costs, all vestiges of de jure
segregated school system not barred by Eleventh Amendment despite State’s argument that
paying a share of costs was akin to money damages).
This court has not only the power but the duty to enter a decree to eliminate the
constitutional violation(s) found, past and present. See Green v. County School Bd. of New
Kent County, Va., 391 U.S. 430, 438 n.4 (1968) (“We bear in mind that the court has not merely
the power but the duty to render a decree which will so far as possible eliminate the
discriminatory effects of the past as well as bar like discrimination in the future.”) (citation and
internal quotation omitted)); Louisiana v. United States, 380 U.S. 145, 154 (1965) (same); see
also Griffin v. County School Board of Prince Edward County, 377 U.S. 218, 232-34 (1964)
(“An order [requiring that schools not be closed] is within the court's power if required to
assure these petitioners that their constitutional rights will no longer be denied them. The time
for mere ‘deliberate speed’ has run out, and that phrase can no longer justify denying these …
school children their constitutional rights to an education equal to that afforded by the public
schools in the other parts of [the State].”).
Courts have inherent power to modify injunctive relief to achieve the goals of equity;
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J oint Case Management Conference Statement 8
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said power has been codified in Rule 60(b)(5) of the Federal Rues of Civil Procedure. See
Transgo, Inc. v. Ajac Transmission Parts Corp., 911 F.2d 363, 365 (9th Cir. 1990); see also
Timothy J ost, From Swift to Stotts and Beyond: Modification of Injunctions in the Federal
Courts, 64 Tex.L.Rev. 1101, 1105-06 (1986) (“[C]ourts increasingly modify injunctions at the
request of the parties, and view the injunction as a pliant and instrumental tool for protecting
rights and doing equity.”). Therefore, this court still has the power to address the issues raised
by plaintiffs in this matter in this court.
Federal Defendants’ Position:
This Court has already entered a judgment granting the specific injunctive relief sought
by the married plaintiffs, and any new request for relief is now barred. As this Court noted
during the April 3 hearing, it gave the married plaintiffs the remedy they requested, and those
plaintiffs neither complained about the adequacy of that remedy nor appealed that portion of
this Court’s judgment. Transcript at 3-4, 25-26.
The portion of this Court’s judgment vacated by and remanded from the Ninth Circuit
concerns only the claims of domestic partner plaintiffs. Id. at 3-4. As Federal Defendants have
explained in their post-remand reply brief, in requesting rate-adjustments, Plaintiffs are
attempting to change the nature of the Rule 23(b)(2) class action that they brought and
maintained, which has as its central characteristic the indivisible nature of the injunctive or
declaratory remedy requested. See Dkt. No. 161 at 7-10. As fully explained in Federal
Defendants’ post-remand reply brief, Plaintiffs’ new request for rate-adjustments is
fundamentally incompatible with the Rule 23(b)(2) class certified by this Court. See id. at 9-10.
As noted before, domestic partner plaintiffs Hermosillo and Dominguez in any event would not
be the appropriate class representatives. They stated in their declaration that they had decided
against purchasing CalPERS’s LTC insurance in the last open enrollment in 2008; hence, new
plaintiffs would need to be found, and the proposed request for rate-adjustments by such
hypothetical plaintiffs would require certification of an entirely different class, potentially
pursuant to Rule 23(b)(3), as it will require individualized determinations as to when each
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J oint Case Management Conference Statement 9
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potential class member might have purchased CalPERS’s LTC insurance and how the answer to
that question might affect their premiums today.
Moreover, Federal Defendants object to Plaintiffs’ inclusion of legal arguments on the
propriety of Plaintiffs’ request for rate-adjustments. Plaintiffs have requested an opportunity to
brief the issue. Before this Court rules on that request, it is improper for Plaintiffs to pre-
emptively include extensive legal arguments on that issue in this Case Management Statement.
State Defendants’ Position:
There is no basis for the make-whole relief Plaintiffs describe. Married class members
got the injunction they asked for and did not challenge the judgment to ask for more or different
relief. And any new claims a narrower or different putative domestic partner class might have
would need to be brought as a separate action. Also, as the Court recognized at the April 3
conference, what Plaintiffs describe amounts to damages. (See Transcript at 27.) No class has
been certified for damages, which would in any event be barred by the Eleventh Amendment.
IV. Amended Complaint.
Plaintiffs’ Position:
Also discussed at the April 3, 2014 hearing was whether Plaintiffs would be filing an
amended Complaint. Plaintiffs will seek leave to file an amended Complaint to add new named
class representatives for the domestic partner class following the resolution of the class notice
issue described above. Moreover, Plaintiffs will seek leave to amend their Complaint to add
Title VII sexual orientation discrimination and sex-stereotyping cause of action against the
State Defendants in light of recent case law developments. See Terveer v. Billington, No 12-
1290, 2014 WL 1280301 (March 31, 2014); see also Lewis v. City of Chicago, Illinois, 560
U.S. 205, 215-16 (2010); Manhart v. Los Angeles Dep’t of Water & Power, 435 U.S. 702, 705,
712 n. 23 (1978). Plaintiffs do not concede that they do not have any class members with
standing to bring this Complaint. Plaintiffs submit that Federal Defendants “free-floating”
motion to dismiss argument should not be considered. If Federal Defendants seek to file a
motion to dismiss, Plaintiffs would request a briefing schedule on that matter as well, after the
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J oint Case Management Conference Statement 10
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class notice issue addressed in section II above has been resolved.
Federal Defendants’ Position:
Federal Defendants submit that this Court should dismiss the existing case as pled in the
Second Amended Complaint, for reasons already explained in Federal Defendants’ post-remand
briefs. There is no Article III jurisdiction to maintain a free-floating case when class counsel
has not found any plaintiffs with standing to allege the new claims that counsel hopes to assert,
despite having had months to do so. Class counsel’s speculation that such plaintiffs exist is
insufficient to establish the requisite case-or-controversy.
State Defendants’ Position:
Again, Class Counsel are talking about a different case they would like to bring, on
behalf of a different class. The Court should refuse them discovery guised as class notice in this
case but in fact aimed at helping them mount a yet-to-be-filed case.
V. Reasonable Attorneys’ Fees and Costs.
Plaintiffs’ Position:
The Court stayed the Plaintiffs’ motion for reasonable attorneys’ fees and costs. The
Plaintiffs submit that the motion should now be considered, at least as to the claims of the
married plaintiffs and request that the Court set a briefing schedule regarding this motion. For
the reasons stated in the “Remedies” section above, the Plaintiffs disagree that they are seeking
additional relief not requested in the Second Amended Complaint that would preclude
resolution of the motion for reasonable attorneys’ fees and costs.
Plaintiffs see no basis for Federal Defendants’ “double recovery” argument as Plaintiffs’
motion for reasonable attorneys’ fees and costs will focus on the hours reasonably expended on
the married plaintiffs’ case. To the extent that the issues of the married plaintiffs were
intertwined as a matter of fact or law with those of the domestic partner plaintiffs, recovery
should be permitted for Plaintiffs’ counsel’s reasonably expended hours as the prevailing party
on those claims in this motion.
Federal Defendants’ Position:
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J oint Case Management Conference Statement 11
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Plaintiffs’ counsel indicates that the married plaintiffs will seek additional relief
regarding rate-adjustments, which they did not request in the Second Amended Complaint.
Thus, this Court should, at the very least, wait until it resolves whether Plaintiffs’ new request
is proper. Moreover, given that many of the married plaintiffs’ and domestic partner plaintiffs’
claims were intertwined, and that, at a minimum, the domestic partner plaintiffs cannot
currently be considered “prevailing parties” because that portion of this Court’s judgment
concerning them has been vacated by the Court of Appeals, Federal Defendants submit that in
the interest of judicial economy and to guard against potential double recovery, this Court
should not consider Plaintiffs’ fee request until it resolves all merits issues in this case.
State Defendants’ Position:
Again, married class members got all the relief they asked for and did not challenge the
judgment to ask for more; and any new claims a narrower or different putative domestic partner
class might have would need to be brought as a separate action. This Rule 23(b)(2) case is
effectively over, and the Court should set a briefing schedule for the attorneys’ fees motion.
Respectfully Submitted:
LEGAL AID SOCIETY –
EMPLOYMENT LAW CENTER


Dated: J uly 25, 2014 By: /s/Elizabeth Kristen
Elizabeth Kristen, Counsel for Plaintiffs


BOARD OF ADMINISTRATION OF
CALIFORNIA PUBLIC EMPLOYEES’
RETIREMENT SYSTEM, and ANNE
STAUSBOLL

Dated: J uly 25, 2014 By: /s/ Edward Gregory
Edward Gregory, Counsel for Defendants CalPERS
and Stausboll


U.S. DEPARTMENT OF J USTICE
CIVIL DIVISION
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J oint Case Management Conference Statement 12
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Dated: J uly 25, 2014 By: /s/ J ean Lin
J ean Lin, Counsel for Federal Defendants

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J oint Case Management Conference Statement 13
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GENERAL ORDER 45 ATTESTATION
In accordance with General Order 45, concurrence in the filing of this document has been
obtained from each of the signatories, and I shall maintain records to support this concurrence for
subsequent production for the court if so ordered or for inspection upon request by a party.

Dated: J uly 25, 2014 /s/ Elizabeth Kristen
Elizabeth Kristen

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