Filed Date: March 11, 2019
Case Ongoing
Clearinghouse coding complete
Plaintiffs in this case challenged the State Health Plan's refusal to cover medically necessary gender affirming care.
On March 11, 2019, seven private plaintiffs, on behalf of themselves or their dependents, (collectively, “Plaintiffs”), represented by Transgender Legal Defense and Education Fund, Lambda Legal Defense and Education Fund, and private counsel, sued the State Treasurer of North Carolina, the Executive Administrator of the North Carolina State Health Plan for Teachers and State Employees (the “Executive Administrator”), University of North Carolina at Chapel Hill (“UNC”), North Carolina State University (“NCS”), University of North Carolina at Greensboro (“UNCG”), and North Carolina State Health Plan for Teachers and State Employees (“NCSHP”), (collectively, “Defendants”), in the United States District Court for the Middle District of North Carolina. The Plaintiffs alleged that NCSHP’s policy of excluding coverage for treatment sought “in conjunction with proposed gender transformation” or “ in connection with sex changes or modification” (“Exclusion”), discriminated against Plaintiffs, who were either transgender or had transgender dependents.
The Plaintiffs alleged that the State Treasurer and the Executive Administrator, (collectively, “ANC”), violated the Equal Protection Clause on the basis of sex and transgender status. In the case of sex discrimination, it was by and through ANC’s actions and duties to design, negotiate, administer, and implement NCSHP’s exclusionary policy. In the case of transgender status discrimination, because NCSHP categorically excluded coverage for gender-affirming health care, ANC engaged in impermissible discrimination on the basis of gender identity.
The plaintiffs alleged that the three universities (collectively, the “University Defendants”) violated Title IX of the Education Amendments of 1972, which prohibits the discrimination on the basis of sex from any education program or activity that receives federal financial assistance. Plaintiffs alleged that by offering health plans with gender-affirming care exclusionary policies, the University Defendants had discriminated on the basis of sex against NCSHP enrollees, or their dependents, who required gender-affirming care. Three plaintiffs (“MK”, MB”, and “CB”) brought suit against UNC, two plaintiffs (JM” and “SS”) against NCS, and two plaintiffs (“JF” and “CTF”) against UNCG.
Lastly, the Plaintiffs alleged that NCSHP violated the Affordable Care Act (“ACA”) because as an entity that received federal financial assistance, they were prohibited from providing or administering health care insurance coverage that contained an exclusionary policy based on transgender status.
Against all these claims, the Plaintiffs sought declaratory judgments, a preliminary and permanent injunction, and compensatory and consequential damages. They also demanded that these issues were all heard by a jury. This case was assigned to District Judge Loretta C. Biggs and Magistrate Judge L. Patrick Auld.
On July 8, 2019, NCSHP and ANC (“State Defendants”) filed a joint motion to dismiss for failure to state a claim. NCSHP argued that the Plaintiffs are blocked from bringing a claim under the ACA because they were shielded by sovereign immunity. ANC argued that rational basis review applied because the Exclusion was based on medical diagnosis, not gender identity. The Defendants also moved to stay this action until the United States Supreme Court handed down their decision in Harris Funeral Homes, Inc. v. EEOC, a case about whether Title VII’s sex discrimination provisions covered discrimination against transgender individuals based on their status as transgender or sex stereotyping. The Defendants argued that the outcome of Harris Funeral Homes impacted the viability of the Title IX claim in this case.
Also on July 8, 2019, the University Defendants filed a motion to dismiss for failure to state a claim, citing the Plaintiffs lacked personal jurisdiction, subject matter jurisdiction, standing, and failed to state a claim upon which relief can be granted.
On February 21, 2020, the Plaintiffs filed an unopposed motion for entry of tolling stipulation against the University Defendants regarding Plaintiffs’ claims under Title VII of the Civil Rights Act of 1964 (“Title VII”) during the dependency of the case of Harris Funeral Homes. Judge Biggs granted the tolling stipulation on February 26.
On March 11, 2020, Judge Biggs denied both motions to dismiss. In the ACA claim against NCSHP, the court found that State Defendants waived sovereign immunity, and because Plaintiffs plausibly alleged a claim of sex discrimination under Title IX, Plaintiffs had also succeeded in stating a plausible claim of discrimination under the ACA. In the Equal Protection claim against ANC, the court found that the Exclusion was facially discriminatory against Plaintiffs and was subject to heightened scrutiny applied. The court also found that ANC did not provide any evidence that this discrimination served an important governmental objective or substantially related to this objective. In the claim against University Defendants, the court found the Plaintiffs had standing, Title IX protected parent plaintiffs and their children, the Plaintiffs had property alleged discrimination on the basis of sex, and that damages the Plaintiffs sought could remedy their claims.
Judge Biggs also denied the stay on the matter because the potential harm to Plaintiffs resulting from even a mild delay would be significant, while the harm to the Defendants was the inconvenience of having to start discovery. The court reasoned that since this case was in its infancy, and it would be months before Harris Funeral Homes was decided, the harm to the Plaintiffs outweighed that of the Defendants, and would not justify staying the matter.
On April 8, 2020, NCSHP filed an interlocutory appeal to the Fourth Circuit Court of Appeals challenging the denial of its motion to dismiss.
On August 2, 2020, the Plaintiffs’ moved to amend their complaint, and on March 5, 2021, Judge Auld granted the request. A new plaintiff (“DC”), an employee of North Carolina’s Department of Public Safety (“DPS”), joined the existing plaintiffs, (including DC, now collectively, “Plaintiffs”), in asserting an Equal Protection Claim against ANC, and an ACA claim against NCSHP. Furthermore, the Plaintiffs lodged new Title VII claims, MK against UNC, JM and SS against NCS, and DC against DPS and NCSHP.
On August 23, 2021, the Plaintiffs, excluding DC, filed a joint motion with the University Defendants to dismiss both of Plaintiffs’ claims against the University Defendants with prejudice as the parties reached a negotiated settlement, which was approved by the court on August 24. The Clearinghouse does not know the details of the settlement at this time.
On September 1, 2021, the Fourth Circuit affirmed the denial of NCSHP’s motion to dismiss. The Fourth Circuit agreed that NCSHP waived its sovereign immunity by accepting federal financial assistance.
On November 2, 2021, NCSHP filed a petition for a writ of certiorari with the United States Supreme Court, but it was denied on January 18, 2022.
On November 30, 2021, DPS filed a motion for summary judgment, arguing that there were no genuine issues of material fact, DC lacked standing, and DPS did not violate either of DC’s Title VII rights or any other constitutional rights. On this same day, ANC and NCSHP filed a motion for partial summary judgment on the ACA claim and Title VII claim, claiming there were no genuine issues of material fact.
On December 20, 2021, the Plaintiffs moved for summary judgement on their Equal Protection claim, and partial summary judgement for their ACA claims and DC’s Title VII claims, and sought declaratory and permanent injunctive relief. The Plaintiffs wanted to reserve the issues on damages for their statutory claims for trial.
On June 10, 2022, Judge Biggs found that the Exclusion discriminated on the basis of sex and transgender status in violation of the Equal Protection Clause and discriminated on the basis of sex in violation of Title VII. Therefore, the Plaintiffs were entitled to summary judgment regarding their Equal Protection Claim. DC failed to create a genuine issue of material fact as to whether NCSHP is DC’s employer, so NCSHP was granted summary judgment on DC’s Title VII claim. The court did find that DC had standing to sue DPS and was denied coverage based on her sex, thus DPS’ motion for summary judgement was denied. Judge Biggs also permanently enjoined NCSHP from enforcing the Exclusion and ordered NCSHP to reinstate coverage for gender-affirming care. In this order, the court did not decide on the claims alleged under the ACA, because the agency interpretation at issue (the term “health program or activity”, which under the 2020 rule excluded entities “principally engaged in providing or administering…health insurance coverage”) may change or be enjoined before this case went to trial.
On July 1, 2022, ANC filed an interlocutory appeal to the Fourth Circuit and on July 11, NCSHP filed their own interlocutory appeal. On July 27, ANC and NCSHP filed a motion to stay the injunction pending their appeal. On August 11, the Fourth Circuit granted the motion to voluntarily dismiss the appeal.
On October 19, 2022, Judge Biggs denied the motion for stay of injunction because the Defendants’ did not meet their burden of showing they were entitled to a stay. The court found that the Plaintiffs would continue to be harmed by not receiving their medically necessary care to treat their gender dysphoria, and it was in the public’s best interest to ensure they all people covered by NCSHP received their gender-affirming care, while the harm to the Defendants would be minimal.
On August 4, 2022, the United States Department of Health and Human Services (“DHHS”) published their interpretation of “health program or activity” as
On December 5, 2022, Judge Biggs granted the Plaintiff’s motion for summary judgment regarding the ACA issue. The court declined to apply the 2020 Rule interpretation and used the language of the ACA which plainly includes health insurance providers and plans, and, furthermore, DHHS decided that they will interpret “health program or activity” as applying “to all the operations of a recipient entity principally engaged in the provision or administration of health insurance coverage or other health-related coverage.”
On April 12, 2023, the Fourth Circuit granted a rehearing of the case en banc regarding the Equal Protection claim decided on by Judge Biggs on June 10, 2022.
On August 1, 2023, DPS and DC filed a joint motion to dismiss DC’s remaining claim – the Title VII claim – having reached a negotiated settlement, which was granted by the court on August 9. The Clearinghouse does not know the details of the settlement at this time.
On April 29, 2024, in an en banc decision, the Fourth Circuit affirmed that healthcare plans that cover medically necessary treatment for certain diagnosis but bars the same coverage for gender-affirming care violated the Equal Protection clause and other provisions of federal law.
On July 21, 2024, ANC and NCSHP filed a petition for a writ of certiorari with the United States Supreme Court.
This case is ongoing as of March 16, 2025.
Summary Authors
Danica Fong (3/15/2025)
For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/14666925/parties/kadel-v-folwell/
Biggs, Loretta Copeland (North Carolina)
BORELLI, TARA L. (North Carolina)
BROWN, DAVID (North Carolina)
BROWN, MEREDITH T. (North Carolina)
BRITO, OLGA E. (North Carolina)
BORELLI, TARA L. (North Carolina)
BROWN, MEREDITH T. (North Carolina)
CARABALLO, ALEJANDRA L. (North Carolina)
CHARLES, CARL S. (North Carolina)
CUKOR, EZRA U. (North Carolina)
DUNCAN, SYDNEY (North Carolina)
EVANS, LAUREN H. (North Carolina)
GONZALEZ-PAGAN, OMAR F. (North Carolina)
HASKEL, WARREN (North Carolina)
LEWIS, NOAH E. (North Carolina)
MAROLF, EVAN R. (North Carolina)
RAVI, DEEPIKA H. (North Carolina)
RICHARDSON, AMY E. (North Carolina)
SAFER, ADAM M. (North Carolina)
SNYDER, LAUREN E. (North Carolina)
TISHYEVICH, DMITRIY G. (North Carolina)
BRITO, OLGA E. (North Carolina)
GARNER, JAMES BENJAMIN (North Carolina)
HAYES, SAM M. (North Carolina)
JONES, MARK A. (North Carolina)
JORDAN, CATHERINE F. (North Carolina)
KNEPPER, JOHN G. (North Carolina)
MCINNES, ALAN D. (North Carolina)
PADGET, ZACHARY A. (North Carolina)
POTTER, KIMBERLY D. (North Carolina)
SULLIVAN, NORA F. (North Carolina)
TRACHTMAN, JAMES B. (North Carolina)
See docket on RECAP: https://www.courtlistener.com/docket/14666925/kadel-v-folwell/
Last updated April 18, 2025, 8:36 a.m.
State / Territory: North Carolina
Case Type(s):
Healthcare Access and Reproductive Issues
Special Collection(s):
Transgender Healthcare Access Cases
Key Dates
Filing Date: March 11, 2019
Case Ongoing: Yes
Plaintiffs
Plaintiff Description:
Eight private plaintiffs, on behalf of themselves or their dependents.
Plaintiff Type(s):
Attorney Organizations:
Public Interest Lawyer: Yes
Filed Pro Se: No
Class Action Sought: No
Class Action Outcome: Not sought
Defendants
State Treasurer of North Carolina, State
University of North Carolina at Chapel Hill, State
North Carolina State University, State
University of North Carolina at Greensboro, State
North Carolina State Health Plan for Teachers and State Employees, Private Entity/Person
North Carolina State Health Plan for Teachers and State Employees, Private Entity/Person
Defendant Type(s):
Case Details
Causes of Action:
Title VII (including PDA), 42 U.S.C. § 2000e
Title IX of the Education Amendments of 1972, 20 U.S.C. §§ 1681 et seq.
Ex parte Young (federal or state officials)
Affordable Care Act Section 1557, 42 U.S.C. § 18116
Constitutional Clause(s):
Available Documents:
Injunctive (or Injunctive-like) Relief
Outcome
Prevailing Party: Plaintiff
Nature of Relief:
Injunction / Injunctive-like Settlement
Preliminary injunction / Temp. restraining order
Source of Relief:
Form of Settlement:
Court Approved Settlement or Consent Decree
Content of Injunction:
Issues
Discrimination Area:
Discrimination Basis:
Affected Sex/Gender(s):
LGBTQ+:
Medical/Mental Health Care: