Case: Rouch World, LLC v. Michigan Department of Civil Rights

This case is about Michigan's state civil rights law, the Elliott-Larsen Civil Rights Act, and whether its prohibition of sex-based discrimination includes discrimination on the basis of sexual orientation. In mid 2020, the Michigan Department of Civil Rights opened two investigations into two Michigan businesses. One individual alleged that they were denied service at a business on the basis of their gender identity. And a same-sex couple alleged that they were denied service on the basis of their sexual orientation. One of the MDCR’s policy statements interpreted the ELCRA, which effectively prohibits discrimination “because of…sex,” as prohibiting discrimination on the basis of gender identity and sexual orientation. The two businesses sued the MDCR and its Interim Director on August 19, 2020, challenging the MDCR’s interpretation of ELCRA. The case was assigned to Michigan Court of Claims Judge Cristopher M. Murray.

The defendants moved for summary disposition on September 16, 2020. In an opinion published on December 7, 2020, Judge Murray granted in part and denied in part the defendants’ motion for summary disposition. An earlier Michigan Court of Appeals decision confirmed that the ELCRA’s reference to “sex” did not include discrimination on the basis of sexual orientation. The court considered itself bound to that precedent, and thus denied the defendants’ motion for summary judgment as applied to one of the plaintiff’s arguments. That plaintiff argued only that the ELCRA did not cover discrimination because of a person’s sexual orientation.

No prior decision addressed the question whether gender identity fell within the prohibition against discriminating on the basis of sex. The second plaintiff, Rouch World, argued that just as the Act did not cover discrimination because of sexual orientation, the ELCRA did not cover discrimination on the basis of gender identity. This plaintiff relied heavily on a separate case, dealing with a different statute, which concluded that references to “gender” were synonymous with “sex.” But the Michigan Supreme Court vacated that decision and remanded it for reconsideration in light of the United States Supreme Court’s decision in Bostock v. Clayton County. The Court of Claims therefore approached the ELCRA in light of the Bostock majority’s reasoning and concluded that “if [the] defendants determine that a person treated someone who ‘identifies’ with a gender different than the gender that he or she was born as, then that is dissimilar treatment on the basis of sex.” Nothing in the ELCRA therefore precluded action to redress that violation through existing MDCR procedures.

The defendants then filed an interlocutory application for leave to appeal in the Court of Appeals, challenging the court’s decision to grant summary disposition on the sexual orientation question. Shortly thereafter, the defendants filed a bypass application in the Michigan Supreme Court. The Court granted that application, so the appeal proceeded immediately to the Michigan Supreme Court. Plaintiffs did not cross-appeal the Court of Claims’ determination that the ELCRA protects individuals from discrimination on the basis of their gender identity. The Court therefore considered only the question whether the ELCRA protected an individual from discrimination on the basis of their sexual orientation.

In an opinion published on July 28, 2022, the Court found that the ELCRA’s reference to “sex” extended protection against discrimination on the basis of sexual orientation. The ELCRA prohibited the denial of “the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation or public service because of…sex.” The Court’s earlier decisions confirmed that the phrase “because of” created a but-for causation standard. So just as in Bostock, the Court concluded that “discrimination on the basis of sexual orientation necessarily involves discrimination because of sex in violation of the ELCRA.” It rejected arguments that the reference to “sex” must include some increment of purpose beyond the but-for test, as well as arguments that the Court should have preferred an interpretation of the ELCRA that accounted for the promulgating legislature’s intent.

For that reason, the Court reversed the Court of Claims’s decision and remanded the case for proceedings consistent with its clarified interpretation of the ELCRA. Litigation is ongoing in the Court of Claims, where the case was reassigned to Judge Elizabeth Gleicher.