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November 14, 2012 VIA FACSIMILE (914) 390-4298 Honorable Edgardo Ramos U.S. District Court Judge U.S. District Court for the Southern District of New York Charles L. Brieant, Jr. Federal Building and Courthouse 300 Quarropas St. White Plains, NY 10601-4150 Re: Jane Roe, et al. v. Empire Blue Cross Blue Shield, et al. 12 cv 4788 (ER) Dear Judge Ramos: We write in further support of Plaintiffs request to file a motion for preliminary injunction to obtain spousal medical coverage under the Direct POS Plan for Saint Josephs Medical Center (the Plan). First, Plaintiffs submit that they can establish irreparable harm based on: (a) the ill-effects of Defendants improper withholding of health care coverage; and (b) Plaintiffs being subjected to ongoing and invidious discrimination. Further, Plaintiffs can establish likelihood of success on the merits based on: (a) the Defense of marriage Act (DOMA) being deemed unconstitutional (see Windsor v. United States, Docket No. 12-2335); and/or (b) that a plan term was changed for a purely discriminatory purpose in violation of ERISA 510; and/or (c) to the extent ERISA is being relied upon to permit discrimination against a protected class, it is unconstitutional as applied. Upon information and belief, Defendant St. Josephs did not change its policy excluding coverage for same-sex spouses until after New York passed the Marriage Equality Act and it did so specifically for the bigoted purpose of denying a protected class of individuals access to health care. Despite the mandate to liberally construe ERISAs terms and hold plan fiduciaries to the highest degree of duty known in the law, Defendants rely on a myopic interpretation of ERISA whereby they believe that so long as they have not violated a federal law, they can discriminate against a protected class without restraint and without breaching their fiduciary duty. Plaintiffs disagree. Concededly, the Court is presented with issues of first impression. However, the bigotry Plaintiffs are being subjected to is neither new nor different in form from other manifestations of illegal and abhorrent discrimination. Therefore, Plaintiffs submit respectfully that it is incumbent on this Court to hold Defendants accountable and not provide tacit endorsement of their conduct. At a minimum, the Court should permit Plaintiffs to fully brief these issues in support of a motion for a preliminary injunction.

Hon. Edgardo Ramos November 14, 2012 Page 2 1. Plaintiffs are likely to succeed on the merits Although Defendants are correct that so-called settlor functions (i.e., offering or terminating a plan and designing plan terms) generally are not considered fiduciary activities under ERISA, activities undertaken to implement those decisions generally are fiduciary in nature and must be carried out in accordance with ERISA. Advisory Opinion No. 2006-04A (E.R.I.S.A), Pens. Plan Guide (CCH) P 19,991N, 2006 WL 1401678 (April 27, 2006). Here, failing to consider the discriminatory purpose and effect of altering Plan terms (in direct contravention of New Yorks Domestic Relations Law defining marriage) for the sole purpose of excluding certain legal marriages but not others is entirely inconsistent with the principles of ERISA and Defendants fiduciary duty to act in the best interests of the Plan participants. In this manner, it is the carrying out of that discriminatory term that supports the breach. Defendants also are wrong that an ERISA 510 violation only arises when a retaliatory action is taken to deprive a participant of a benefit they would have had absent the action taken (e.g., firing an employee to deprive them of a pension benefit). Authority also supports that a 510 violation can occur when a Plan term is altered to deny enrolment for an invidious discriminatory purpose. In Aronson v. Servus Rubber, Div. of Chromalloy, 730 F.2d 12, 16 (1st Cir.), cert. denied, 469 U.S. 1017 (1984), the court left open the possibility that a discriminatory amendment to a plan could provide a basis for 510 liability where there was no readily apparent business justification, and it demonstrated invidious intent. Here, following the passage of the Marriage Equality Act, Plaintiff Roe would have been able to enroll her spouse under the Plan. However, in reaction to that law change, St. Josephs acted to specifically deny a class of legally married individuals that right based on sexual orientation (as opposed to a legitimate business reason). Plaintiffs submit that St. Josephs acted in an invidious and retaliatory manner against same-sex marriages and therefore violated 510. Although Plaintiffs recognize that the Fourteenth Amendment erects no shield against merely private conduct, however discriminatory or wrongful, (Shelley v. Kraemer, 334 U.S. 1, 13 (1948)), a party may not use a federal statute as a basis to carry out discrimination. Just as plan terms cannot be used as a shield for discriminatory acts, ERISA itself cannot be used as a sword to wield bigotry. As DOMA fell to intermediate scrutiny in Windsor, if ERISAs incorporation of the term marriage, as judicially applied to Plaintiffs, supports the same inequitable protection of the laws as DOMA; this provision too is unconstitutional. As the Supreme Court, reiterating the traditional canon of construction, stated A court faced with an ambiguous statute applies traditional avoidance by asking whether, given two plausible interpretations of that statute, one would be unconstitutional as applied to the plaintiff; and, if that interpretation is actually unconstitutional as applied to the plaintiff, the court picks the other (constitutional) reading. Clark v. Martinez, 543 U.S. 371, 395 (2005); See also Rust v.

Hon. Edgardo Ramos November 14, 2012 Page 3 Sullivan, 500 U.S. 173, 190191(1991); Hooper v. California, 155 U.S. 648, 657 (1895) (The elementary rule is that every reasonable construction must be resorted to, in order to save a statute from unconstitutionality); Mossman v. Higginson, 4 Dall. 12, 14 (1800) (reasoning that the statute under review can, and must receive a construction, consistent with the constitution). Here, Plaintiffs reading of the definition of marriage within ERISA satisfies this canon and should be applied. If the Court finds this application is not viable, this provision of ERISA, like DOMA, will be ripe for a constitutional equal protection challenge. 2. Irreparable Harm Absent Relief The Second Circuit has recognized in Mitchell v. Cuomo, 748 F.2d 804, 806 (2d Cir. 1984), a presumption that a Constitutional deprivation alone satisfies the irreparable harm requirement. Employing the Second Circuits intermediate scrutiny designation to the equal protection claims on the basis of sexual orientation in Windsor, the continued denial of benefits on the basis of sexual orientation is a discriminatory deprivation for which a money judgment cannot compensate. Alliance Bond Fund, Inc. v. Grupo Mexicano de Desarrollo, S.A., 143 F.3d 688, 697 (2d Cir.1998), revd on other grounds, 527 U.S. 308, 119 S.Ct. 1961, 144 L.Ed.2d 319 (1999). Further, the standard for class-wide preliminary injunctive relief in an ERISA action does not require a demonstrated present ailment for which an individual cannot obtain care. Plaintiffs in LaForest v. Former Clean Air Holding Co., Inc., 376 F.3d 48, 55 (2d Cir. 2004) successfully demonstrated irreparable harm where the reductions in medical coverage will cause: (1) substantial risk to plaintiffs health; (2) severe financial hardship; (3) the inability to purchase lifes necessities; and (4) anxiety associated with uncertainty. See also, Laforest v. Honeywell Intl, Inc., 03-CV-6248T, 2003 WL 23180220 (W.D.N.Y. Sept. 19, 2003) affd and remanded sub nom. LaForest v. Former Clean Air Holding Co., Inc., 376 F.3d 48 (2d Cir. 2004)(To protect plaintiffs health and mental well-being). Plaintiffs in Merkner v. AK Steel Corp., 1:09CV-423, 2010 WL 373998, *5 (S.D. Ohio Jan. 29, 2010) successfully demonstrated irreparable harm where the impending and substantial increases in out-of-pocket expenses for medical insurance coverage, coupled with the elimination of the Medicaid Part B premium reimbursement, will result in decreases in medical care, the rationing of other necessities of life, and an increased uncertainty and anxiety rising to the level of irreparable injury. The Second Circuit has further stated without caveat or elaboration, that the threatened termination of benefits such as medical coverage for workers and their families obviously raised the spectre of irreparable injury. Communications Workers of Am., Dist. One, AFL-CIO v. NYNEX Corp., 898 F.2d 887, 891 (2d Cir. 1990) (internal citations omitted). Applied here, the spectre of irreparable injury in denying same-sex spouses medical coverage is apparent. Id. Plaintiff Roe and Doe are prepared to file affidavits evidencing the severe financial hardship that is caused by having to purchase insurance on the open market, the

Hon. Edgardo Ramos November 14, 2012 Page 4 decrease in care options available to Plaintiff Doe in the interim, the present effect that paying for Plaintiff Does care out-of-pocket has on their familys ability to purchase necessities, the cost-prohibitive treatment that Doe has already foregone, and the anxiety of uncertainty directly related to financial and medical decisions due to Defendants denial of enrolment. Plaintiffs married for both love and the expectation of social, legal, and financial benefits arising from their legal status. The inability to support one another and fully realize the benefit of their legal union is the source of understandable fear and anxiety. Due to the complexity and nuanced application of precedent in a burgeoning area of ERISA law with civil rights implications, Plaintiffs request that they be given the opportunity to fully brief these issues in the context of a motion for preliminary injunction. Should Your Honor wish to have the parties reconvene to further discuss these issues, Plaintiffs will make themselves available at the Courts convenience. Thank you for your consideration of this matter.

Respectfully submitted, Respec pec ctfully NEWMAN LLP N NEWMAN FERRARA LL M

Jeffrey M. Norton ff ff Jeffrey cc: All Counsel of Record (via fax)