PRELIMINARY MEMO
ec 14, 1973 Conf
List 1, Sheet 1
/'Ap-. pe~.)from
No, 73-640 - ATX
'-...:..__ -'<;
. •If~) Dun~way, ~irpol ~;
'Y/ c_ N.D
{- ~- _. /Will1.ams d1.ssent1.ng)
GEDULDIG (Cal.)
Federal/civil
v.
Timely
AIELLO
The issue in this case is whether a state unemployme nt
disability program can provide benefits for all disabilities
and exclude pregnancy-related disabilities,
ct said no and declared the pregnancy
t
I.
The three-judge
e~clusion
unconstitutional,
r ,.
The state appeals.
~
The judgment of the three judge ct was
stayed by the confe rence on Oct 15, 1973 pending further order
W' 1
~~ and
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.
·
various memorandum concerning the case (then known as
Hanson v. Aiello, A-344) were circulated at that time.
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Fact.~
Section 2626 of the Cal. Unemployment Insurance Code
.--
~
provides:
"'Disability• or 'disabled' includes both mental or P.hysical
illness and mental pr physical injury. An individual shall
be deemed di~bled in any day in which, because of his
physical or mental condiOion, he is unable to perform his
regular or customary work, In no case shall the term 'disability•
or •disabled' include any in'ury or illness caused by or arising
in con ec
nanc up to the terminatLon of sue .
p egn nc
a period of 28 days thereafter.
In the summer of 1972 two separate class actions were
filed in the N.D.Cal challenging the pregnancy exclusion.
In the first suit the named plaintiffs, .Aiello, Johnson and
Armendariz, had all suffered pregnancy complications (ectopic
pregnancy and miscarriage) and all had been denied disability
insurance benefits on the basis of §2626.
In the second
suit, Jaramillo was the only named plaintiff.
Apparently
she had suffered no complications and sought benefits for
/
the period of disability prior and subsequent to the birth.
The two cases were consolidated in the D.Ct. and were heard
on cross motions for summary judgment.
Decision belmv
The majority of the D. Ct invalidated the
pregnancy exclusion in an opinion rendered May 31, 1973.
Applying
the middle-level Reed v. Reed test for equal protection,
which the D.Ct characterized as a more rigorous rational basis
test, the Ct found that the pregnancy exclusion was "not based
upon a classification having a rational and substantial relati..onship
to a legitimate state purpose."
Finding no real difference
1(
between pregnancy - related disabilities and all other disabilities
the Ct found that the only interest proffered by the state
was cost.
As in Shapiro v. Thompson, the D,Ct held that a
cost justification was insufficient wherP the classification
l·
I
works an invidious discrimination, here against women,
The D,Ct declare d §2626 void, enjoined its furth er operation
..
and ordered the potr to reconsider the applications of resps •
..
~;;;-.,··
...
Judge Williams dissented,noting that the pregnancy
----
exclusion was rationally related to the valid state objective
of providing a comprehensive program of benefits at a minimal
cost,
~~-----------------
The dissent argued that the legislature had considered
and rejected coverage of pregnancy-related disabilities because
it would have destroyed the fiscal integrity of this self-sustaining
employee insurance program and if the 1% contribution rate
was altered it would disturb the intent of the program.
Subsequent dev e loQments
On May 24, 1973, one week before the decision of the D.Ct in
the instant case, the Cal Ct of Appeal limited the application
~ , .-
of §2626•s pregnancy exclusion, Rentzer v. Cal UnemQloyment
Insurance ApQeal Bd, 32 C.A. 3d 604.
In that case the
claimant had suffered an ectopic pregnancy requiring surgery
and the Insurance Bd refused, pursuant to §2626, to pay
for the first 28 post-surgery days.
Reversing the Insurance
Bd, the Court of Appeal held that while the legislative purpose
in enacting the pregnancy exclusion was to afford relief from
illness and not to provide maternity benefits, pregnancycaused disabilities, such as ectopic pregnancy was not
-
a "pregnancy disability" for the purposes of the Act.
On ·June 18, 1973 the Insurance Bd issued new guideline s
(~ based on the Rentzer case which in effect limited the . preg~ ncy
r ~xclusion to normal,
uncomplicated births.
On Oct 1• 1973
the Cal. legislature passed amendments to §2626 which, in eff ect,
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codify the new guidelines and limit the pregnancy exclusion
~--------------------~-----------------------------------to only normal births. (see fn 7 of juris stateme~ ).
A petition for rehearing in the D.Ct based on Re~n~r
was denied on August 7, 1973.
The aspect of the case dealing
itb normal pregnancies is still very much alive since
tm new legislation still excludes normal pregnancies.
It seems clear that those plaintiffs who suffered complications
would now be covered, however, there is still the question
of their entitlement to retroactive benefits.
3.
Contentions Appellant
treats the issue as if only
the exclusion of normal pregnancies ' i:s involved and ignores
! '
----;(
any questions that might be involved as far as retroactive
payments to the named plaintiffs.
~xclusion
In support of the
appt argues l)pregnanay is different from other
physical disabilities and 2) the fiscal integrity of the
program is threatened by the inclusion of pregnancy.
Appt
argues tra t WOmen already WithdraH a disproportionately larger
f,,
share of the fund than they contribute and the inclusion
of pregnancy Hould aggravate this considerably.
1
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Appt
notes that numerous cases are pending in the CA' s involving
exclusion of pregnancy from QUblic and private employer
disability plans and the decision in this case will affect
all of these.
In their motion to affirm, appellee argues (note 3) that
the amended version of §2626 is not before· the Ct.
\vhi 1e
conceding that most of;their arguments apply equally to the
new statute, appellees areue that they have a "substantial
monetary interest in invalidating the statute as it now reads."
./
-5Appellees make great efforts to remind the Ct that the D.Ct
opinion dealt with the old statute which invalidated all
pregnancy-based complications and therefore appellan~s arguments
normal
that/pregnancy is different from other disabilites a~e - irrelevant,
In any event? the disability program was intended to compensate
disabilities that result in ecoaomic hardship
to
the worker
and to the extent that pregnancy is excluded, it is unrelated
to the general purposes of the Act,
---
Where the exclusion results
in a sex-based discrimination, Appellee argues tmt it is
not enough
[ -
fo~
the state to justify a classification on the
---·- ------
basis of economY.• Cf. Reed, Frontiero, Shapiro,
As for
the argument that women are already receiving more than
they pay in, appellees point obt that the Calif. program
is set up to have a progressive effect and absent an
actuarial system, this consideration is irrelevant.
There is an amicus brief filed by General Electric Co,
---
in support of the jurisdictional statemett arguing that
I (
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this case affects all private employers and a suit in which
-~--------------------~ ----------this question is raised against G.E.'s disability plan is
now pending in tre EDVa.
G.E. points out that there is a 1972
EEOC guideline issued under Title VII which prevents the
-----------
~
exclusion of pregnancy from employee disability programs. G.E.
argues
t~t
the , pregnancy exclusion is rational, not
sex~based
and that the guidelines should not be deferred to,
There is a similar, albeit more detailed, amicus brief
~~
filed by the Chamber of Commerce.
This brief make a rather
extended attack on the EEOC guidelines and then areues
tm t
the pregnancy exclusion does not violate the 14th Am.
The Chamber
/
.
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of Commerce argues tat this case is significantly different
from the
t-~aternity
leave cases now under submission,
The
leave cases involve the question of l-lhether it is , ~rational
for an employer to require all pregnant employees to terminate
at a certain time regardless of the individual emplyees
ability to work,
This case involms the question of whether
an employer may exclude a disability or illness from coverage
under a benefit program without being guilty of sex discrimination
simply becaase the excluded
condi~ion
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(C. of C, brief, p. 5)
4.
Discussion
occurs ohly to one sex.
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Two preliminary considerations are crucial
the disposition of this jurisdictional statement,
First ; o-f H
~
is the effect of the change in California law subsequent
to the D,Ct's decision,
The D.Ct•s opinion was obviously
premised on the o1d statute under which the state's case
was considerably weaker,
The D.Ct did deny a petn for rehearing
based on Rehtze£ although it is unclear whether this mmns
of the change,
the opini-on would have been the same regardless/or whether
the change was irrelevant in terms of the plaintiffs before
the ct
, who were subject to the old law,
As far as the
three plaintiffs who stiffered complications and were denied
benefits, it would seem that the old statute is still before
---
the Ct since the State has not conceded that it would provide
---......_.....-
retroactive benefits,
As for the pLaintiff who suffered a
~
normal pregnancy, her case is unchanged by tl::e amendment
in the statute and inasmuch as the D.Ct upheld her
cl~im,
it is clear that exclus ion for normal pregnancy is squarely
presented ancl fully just: iciable,
In sum, a remand for
lA/
-7reconsideration would probably be an empty gesture because 1)
the D.Ct already denied a petn for rehearing basGd on the
narrowed interpretation: and 2) the D.Ct explicitly
invalidated the
statute as it applies to normal pregnancies.
Inasmuch as the broad interpretation is no longer the law
in Calif, the case is somewhat less worthy
of plenary
consideration, however1 there is still a live controversey
as to the narrow reading and this in itself seems clearly
worthy of full ro nsideration.
The second consideration is the effect of the
Leave cases.
Maternity
As I understand it the Ct is not reaching the
sex diserimination question, however, the disposition of
that case might have a direct effect on this one.
Si~e
the Ct voted to invalidate the forced leave programs, a
remand for
reconsidera~on
after the leave cases come down
would seem to be unnecessary since the result in fu is case
would clearly be the same on remand.
The cases are just
diffe.:rrent enough· so that plenary consideration of this case
is probably warranted regardless of the maternity leave outcome.
The issue itself is a substantial one and as amicus point
out, the application 6f Title VII to employer programs such
as these will be directly affected.
The EEOC guidelines(p,S
of the G.E. amicus brief) are directly on point as far as
employer disability programs and somewhere along the line it
will be necessary to call for the views of
~he
S.G.
There is a response
12/3/73
Richter
t •
D.Ct op in Juris Statement
C .F.f(_.
- ,
CFR
March 2 9, 1974 Conference
List 3, Sheet 2
No. 73-640
Motion of Appellant to Strike
Amicus Curiae Brief of Equal
Employment Opportunity Commission
GEDULDIG
v.
AIELLO
FACTS:
E. E. 0. C. filed an amicus brief in support of appellee
on March 20, -1974.
as acting SG.
The filing of the brief was authorized by Mr. Friedman
Amicus brief at 24.
The brief was accepted and filed.
Rule 42 (4) provides that "[ c]onsent to the filing of a brief of an amicus curia e
need not be had when the brief is presented for the United States sponsored
by the Solicitor General. "
- 2 CONTENTIONS OF APPELLANT:
The California AG argues that
appellant's consent was not sought or given and that the EEOC brief is not
entitled to be filed under Rule 42(4), since it is not "presented for the
United States sponsored by the SG 11 and since the EEOC is not an agency
of the U.S. entitled to appear before this Court in its own behalf.
The AG
also contends that the brief was not presented within the time allowed for
filing the brief of the party supported, leaving appellant no opportunity to
respond.
DISCUSSION: EEOC sought to file an amicus brief in DeFunis.
The
SG opposed, contending that the Commission was not authorized to represent
the Government before this Court.
The Court denied EEOC's motion for
leave to file an amicus brief.
Whether the SG 1 s authorization of EEOC's brief in this instance
satisfies the requirements of Rule 42(4) and the statutory provisions
applicable to EEOC and other agencies respecting governmental representation before this Court appears to be a question of first impression.
Since
the procedure utilized here would seem to constitute a major policy change
at Justice, the Court may wish to hear from the SG.
Appellee's brief was filed March 13; accordingly, EEOC's brief
was 7 days late under Rule 42(2).
There is no response.
Ginty
C5
3/28/74
DK
December 14 , 1973 Conference
Court
USDC, N.D. Calif.
Voted on ........... . ... . .. , 19 . . .
Argued ................... , 19 .. .
Assigned .................. , 19 . . .
Submitted ................ , 19 . . .
Announced ................ , 19 .. .
No. 73-640
DWIGHT GEDULDI G, ETC. , Appe ll a n t
vs.
CAROLYN AIELLO, ET AL.
q
HOLD
FOR
CERT.
I
r
JURISDICTIONAL
MERITS
MOTION
AB-
NOT
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POST
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.......... / .................. .
Rehnquist, J ................. .
Powell, J .................... .
Blackmun, J ................. .
Marshall, J .................. .
White, J ..................... .
Stewart, J ................... .
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Brennan, J ................... .
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Douglas, J .................... .
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Burger, Ch. J ................ .
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No. 73-640
GEDULDIG v. AIELLO
Argued 3/25/74
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Rchnquist, J.
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April 4, 1974
No. 73-640 Geduldig v. Aiello
At the Conference on March 29, and before I participated
in the vote, I stated that it had come to my attention subsequent to the argument that one of the amicus briefs had
been filed by AT&T.
The brief stated that several suits were
pending against AT&T, arising under the Equal Employment Act
(EEOC).
I informed the Conference of my membership on the Board
of the AT&T subsidiary, the Chesapeake & Potomac Telephone
Company of Virginia and of the fact that over the years our
firm occasionally did some legal work for AT&T or C&P - but
that we had not been retained and that I personally did no
legal work.
All members of the Conference agreed that I should not
disqualify myself because of the filing of a brief amicus;
stating that this was not done and never had been in the
absence of some special circumstances.
Several Justices also reiterated views previously
expressed that Justices had to draw the line sometime after
coming on the Court with respect to clients or connections
prior to appointment, even with respect to cases in which a
former client may be a party.
But with respect to briefs
amicus if Justices disqualified on the basis of such briefs
it would open the door to contrived disqualification.
L.F.P., Jr.
ss
~be lr:frece
~r ~_Jpstice Douglas
2nd DRAFT
SUPREME COURT OF THE UNITED STATES
•r . Justice Brennan
:.; . J ustJce Wbi te
lr. Ju<· tJ
Kr . J ..., ce Marshal]
ustice Bla c1rm
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Ilr. J _._
us dee Powell .......-/
Mr. Justic e Rebnquist
"--· ~tewart, J ••
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Circulated:
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•..1
MAY 1 5 1974
-
Dwight Geduldig, Etc., On Appeal from the United.rcwated:
Appellant,
States District Court for the
- - - -- - Northern District of Califorv.
ma.
Carolyn Aiello et al.
[May - , 1974]
MR. JusTICE STEWART delivered the opinion of the
Court.
For almost 30 years California has administered a
disability insurance system that pays benefits to persons
in private employment who are temporarily unable to
work because of disability not covered by workmen's
compensation. The appellees brought this action to
challenge the constitutionality of a provision of the California program that, in defining "disability," excludes
from coverage certain disabilities resulting from pregnancy. Because the appellees sought to enjoin the enforcement of this state statute, a three-judge court was
convened pursuant to 28 U.S. C. ~§ 2281 and 2284. 1 On
This litigation brgan as two separate suits on behalf of California employees who had paid sufficient amounts into the Disability
Fund to be eligible generally for benefits under the program. Carolyn Aiello brought her suit against appellant in the federal District
Court. Augu ~ tina Armendariz , Elizabeth Johnson , and Jacqueline
Jaramillo jointly initiated their Huit as a petition for a writ of mandate in the California Supremr Court. Both suits were brought as
class actions and asserted the unconstitutionality of § 2626 of the
California Unemployment In ~ urance Code under the Equal Protection Clause of the Fourteenth Amendment. The appellant removed the state court suit to the federal District Court , where the
two actions were consolidated. See 28 U. S. C. § 1441 (b) .
1
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No. 73-640
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73-64Q-OPINION
GEDULDIG v. AIELLO
2
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the appellees' motion for summary judgment, the District
Court, by a divided vote, held that this provision of _!he
disa'6irity insurance rogram ~Olates the :Irqual P tection lause of the Fourteent
men ment, and therefore
enfoined its conti;7ied enforcement.- 359 F. Supp. 792.
The District Court denied a motion to stay its judgment
pending appeal. The appellant thereupon filed a similar
U. S. - .
motion in this Court, which we granted. We subsequently noted probable jurisdiction of the appeal.
-U.S. - .
I
California's disability insurance system is funded entirely from contributions deducted from the wa es f
artw1patwn in the program
partwipa...ting em12 oyees.
is mandato"i="y unless the employees are protected by a
voluntary private plan approved by the State. 2 Each
employee is required to contribute one percent of his
salary, up to an annual maximum of $85.R These contributions are placed in the Unemployment Compensation Disability Fund, which is established and administered as a special trust fund within the state treasury. 4
It is from this Disability Fund that benefits under the
program are paid.
An individual is eligible for disability benefits if, during a one-year base period prior to his disability, he has
contributed one percent of a minimum income of $300 to
the Disability Fund." In the event he suffers a compensable disability, the individual can receive a "weekly
benefit amount" of between $25 and $105, depending on
the amount he earned during the highest quarter of the
2
West's Ann. Un. Ins. Code §§ 3251-3254.
3
§§ 984, 985, 2901.
4
5
§ 3001
§ 2652.
73-640--0PINION
GEDULDIG v. AIELLO
3
base period. 0 Benefits are not paid until the eighth day
of disability, unless the employee is hospitalized, in which
case benefits commence on the first day of hospitalization. 7
In addition to the "weekly benefit amount," a hospitalized
employee is entitled to receive "additional benefits" of $12
per day of hospitalization. 8 "Weekly benefit amounts"
for any one disability are payable for 26 weeks so long
as the total amount paid does not exceed one-half of the
wages received during the base period. 9 "Additional
benefits" for any one disability are paid for a maximum
of 20 days. 10
In return for ilif& one-percent contribution to the Disability Fund, the individual employee is insured against
the risk of disability stemming from a substantial number
of "mental or physical illness[ es] and mental or physical
injur[ies] ." West's Ann. Cal. Un. Ins. Code § 2626. It
is not every disabling condition, however, that triggers
the obligation to pay benefits under the program. As already noted, for example, any disability of less than eight
days' duration is not compensable, except when the employee is hospitalized. Conversely, no benefits are payable for any single disability beyond 26 weeks. Further,
disability is not compensable if it results from the individual's court commitment as a dipsomaniac, drug addict,
or sexual psychopath. 11 Finally, § 2626 of the Unem6 § 2655.
This provision has bet>n amcndt>d, pffective July 1, 1974,
to provide for a max1mum wt>ekly benefit amount of $119.
7 §§ 2627 (b) and 2802.
8 § 2801.
1) § 2653
10 § 2801.
Section 2608 provide~ a formula for determining whether
a disabling condition that i~ intcrmitten1 is one disability or more
than one disability for purposes of applying the limitations in §§ 2653
and 2801 on the maximum amount of benefits payable.
11
§ 2678. Sections 2675-2677 contain various other factors that
will disqualify an PmployPP from rpceivmg benefits but that relate
to mattPrs other than the nature of the disabling condition.
_
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73-640-0PINION
GEDULDIG v. AIELLO
ployment Insurance Code excludes from coverage certain
disabilities that are attributable to pregnancy. It is this
provision~ that is at issue in the present case.
Appellant is the Director of the California Department
of Human Resources Development. 12 He is responsible
for the administration of the State's disability insurance
program. Appellees are four women who have paid sufficient amounts into the Disability Fund to be eligible for
benefits under the program. Each of the appellees became pregnant and suffered employment disability as a
result of her pregnancy. With respect to three of the appellees, Carolyn Aiello, Augustina Armendariz, and Elizabeth Johnson, the disabilities were attributable to abnormal complications encountered during their pregnancies."' The fourth, Jacqueline Jaramillo, experienced a
normal pregnancy, which was the sole cause of her
disability.
At all times relevant to this case, § 2626 of the Unemployment Insurance Code provided:
" 'Disability' or 'disabled' includes both mental
or physical illness and mental or physical injury.
An individual shall be deemed disabled in any day in
which, because of mental or physical condition, he is
unable to perform his regular or customary work.
In no case shall the term 'disability' or 'disabled' include any injury or illness caused by or arising in
connection with pregnancy up to the termination of
such pregnancy and for a period of 28 days thereafter." (Emphasis added.)
Effective Jul~· 1, 1974, thr Department of Human Re~ources
Development will be rrnamed the Department of Employment Development. Sre Unemploymrnt Ins. Code§ 301 et seq.
13
Ai<:>llo and Johnson suffrrPd ectopic and tubal pregnancies,
respectivdy, which r<:>quir<:>d ~urg<:>ry to terminate the pregnancies,
Arm<:>ndmiz snffered a Illl~carriage.
12
'73--640--0PiNION
OEDULDIG v AIELLO
Appellant construed and applied the final sentence of this
statute to preclude the payment of benefits for any
disability resulting from pregnancy. As a result, the
appellees were ruled ineligible for disability benefits by
reason of this provision, and they sued to enjoin its enforcement. The District Court, finding "that the exclusion
of pregnancy-related disabilities is not based upon a clas•
sification having a. rational and substantial relationship
to a legitimate state purpose ,'! held that the exclusion was
unconstitutional under the Equal Protection Clause. 359
F. Supp., at 801.
Shortly before the District Court's decision in this
case, the California Court of Appeal, in a suit brought
by a woman who suffered an ectopic pregnancy, held that
§ 2626 does not bar the payment of benefits on account
of disability that results from medical complications
arising during pregnancy. Rentzer v. California Unemployment Insurance Appeals Board, 3!2 Cal. App. 3d 604
(2d App. Dist., 1973) ." The state court construed the
statute to preclude only the payment of benefits for disability accompanying normal pregnancy. 15 The appel·
1 '·
J n an earlier deci:;ion , thr Court of Appral had su,tained § 2626
agnin~t an Equal Protrction challenge by a female employee who
hnd !:iuffrrcd di!:iability a" a rr:;ult of normal pregnancy and delivery.
('lark v. ('a/ifomia Ernp. :Stat . Cornrn., 166 Cal. App. 2d 326 (1966).
15 Section 2626 was later amended, and a new § 2626.2 wru; added,
in order clParly to reflect this interpretation. The two sections now
provide a" follows ;
''§ 2626 'Di:;ability' or 'di:<abled ' includes both mental or physical
tllne~s , mental or physical injury, nne!, to the extent specified in
Sect ion 2626.2, pregnancy . An individual llhall be deemed disabled
in any day in whirh, bccau:;e of hi!:i phy,ical or mental condition,
hr is unable to perform hi:; r<'gula r or cu',to1ru1ry work.
"§ 262().2 Benefit:; relating to prrguaney ~hall be paid under this
l)ttrt only in accordaJlce with the following:
" (a) Disabilit ' benefits ,ball be paid upon a doctor's certifica.tion
73-640-0Pt:N'ION
6
OEDULDIO v. AIELLO
lant acquiesced in this constructio11 and issued administrative guidelines that exclude only the payment of
"matemity benefits-i. e., hospitalization and disability
benefits for normal delivery and recuperation.
Although Rentzer was decided some 10 days before the
District Court's decision in this case, there was apparM
ently no opportunity to call the court's attention to it.
'T he appellant, therefore, asked the court to reconsider
its decision in light of the construction that the California
Court of Appeal had given to ~ 2626 in the Rentzer case.
By a divided vote, the court denied the motion for reconsideration. Although a more definitive ruling would
surely have been preferable, we interpret the District
Court's denial of the appellant's motion as a determination that its decision was not affected by the limiting
construction given to § 2626 in Rentzer.
Because of the Rentzer decision and the revised
administrative guidelines that resulted from it, the
appellees Aiello, Armendariz, and Johnson, whose disabilities were attributable to causes other than normal
pregnancy and delivery, became entitled to benefits under
the disability insurance program, and their claims have
since been paid. With respect to appellee Jaramillo,
however, whose disability stemmed solely from normal
pregnancy and childbirth, § 2626 continues to bar the
that the claimant i~ di~ablrd brcau~c of an abnormal and involuntary
complication of pregnancy, including but not limited to: puerperal
infection, rclamp~ia , cae::;anan l:iertion delivery, ectopic pregnancy,
and toxemia.
"(b) Disability benefitti ~hall be paid upon a doctor's certification
that a C'ondition po~~ibly ari~ing out of pregnancy would disable
the claimant without regard to thr prrgnancy, including but not
limited to : anemia, diabetes, embolism, heart disease, hypertension,
phlebiti~, phlrbothrombosis, pyrlonephriti~. thrombophlebitis, vagi.
nitis, varicoHe veins, and venous thrombm;is ."
The;;e amendment:; took effect on January I , 1974.
73-64G-6PiNION
GEDULDIG v. AIELLO
payment of any benefits. It is evident that only
Jaramillo continues to have a live controversy with the
appellant as to the validity of § 2626. The claims of the
other appellees have beeu mooted by the change that
Rentzer worked in the construction and application of
that provision. Thus, the issue before the Court on this
appeal is whether the California disability insurance program invidiously discriminates against Jaramillo and
others similarly situated by not paying insurance benefits
for disability that accompanies normal pregnancy and
childbirth.
II
It is clear that California intended to establish this {
benefit system as an insurance program that was to
function essentially in licctlrdance with insurance con ..
cepts.J(' Since the program was instituted in 1946, it has
been totally self-supporting, never drawing on general
state revenues to finance disability or hospital benefits.
The Disability Fund is wholly supported by the one
percent of wages annually contributed by participating
employees. At oral argument, counsel for the appellant
informed us that in recent years between 907o and
1037o of the revenue to the Disability Fund has
16
In his message to the state legislature proposing the creation
of thi:s program , Governor Eul:'l Warren stated:
"It i:> not. possible for employ~es to obtain from private insurance
companies protection again:;t loss of wages or salary during sicknet>S
as adeq11ately or cheaply a:s the protection could be obtained by
diverting their 1% contribution for the support of a Disability
Benefits Program."
California Senate Journal , .January 28, 1946, p. 229. The California
Supreme Court ha~ concluded "that the legislative purpose in pro,
viding unemplo~·ment disability benefits . . . was to provide an
insurance program to pay brnefits to individuals who are unemployed
because of illness or injury .... " Garcia v. IndWJtrial Accident Comm.,
41 Cal. 2d 689 , 692 (1954) (internal quotations omitted) .
73-640-0PtNION
GEDULDIG v. AIELLO
8
been paid out in disability and hospital benefits.
This history strongly suggests that the one-percent coi1tribution rate, in addition to being easily computable,
bears a close and substantial relationship to the level o£
benefits payable and to the disability risks insured under
the program.
Over the years California has demonstrated a strong
commitment not to increase the contribution rate above
the one-percent level. The State has sought to provide
the broadest possible disability protection that would be
affordable by all employees, including those with very
low incomes. Because any larger percentage or any fiat
dollar-amount rate of contribution would impose an
increasingly regressive levy bearing most heavily upon
those with the lowest incomes, the State has resisted any
attempt to change the required contribution from the
one-percent level. The program is thus structured, in
terms of the level of benefits and the risks insured, to
maintain the solvency of the Disability Fund at a onepercent aru1ual level of contribution.l7
In ordering the State to pay benefits for disability
accompanying normal pregnancy and delivery, the District Court acknowledged the State's contention "that
coverage of these disabilities is so extraordinarily expensive that it would be impossible to maintain a program
supported by employee contributions if these disabilities
are included." 359 F. Supp., at 798. There is considerable disagreement between the parties with respect to
how great the increased costs would actually be, but they
Section 2604 vc::;t::; the Governor and the appellant with author~
ity to modify the payment of benefit::; and to increase the waiting
time for eligibility if such l:ltepl:l arE' nE'ces;;ary to forestall insolvency
of the Disability Fund. But neither the Governor nor the appellant is authorized to Increase the contribution ra.te under any
circumstances.
17
73-640-0P!NION
GEDULDIG v. AIELLO
9
would clearly be substantial,lR For purposes of analysis
the District Court accepted the State's estimate, which
was in excess of $100 million annually, and stated that
"it is clear that including these disabilities would not
destroy the program. The increased costs could be
accommodated quite easily by making reasonable changes
in the contribution rate, the maximum benefits allowable,
and the other variables affecting the solvency of the
program." Ibid.
Each of these "variables"-the benefit level deemed
appropriate to compensate employee disability, the risks
selected to be insured under the program, and the contribution rate chosen to maintain the solvency of the
program and at the same time to permit low-income
employees to participate with minimal personal sacrifice-represents a policy determination by the State.
The essential issue in this case is whether the Equal
Protection Clause requires such policies to be sacrificed
or compromised in order to finance the payment of benefits to those whose disability is attributable to normal
pregnancy and delivery.
We cannot agree that the exclusion of this disability
from coverage amounts to invidious discrimination under
the Equal Protection Clause. California does not discriminate with respect to the persons or groups who are
eligible for disability insurance protection under the program. The classification challenged in this case relates
to the asserted under-inclusiveness of the set of risks that
the State has selected to insure. Although California
18 Appellant's e;timate of the incrca~ed co;;t of including normal
pregnancy within the in:smed risk:; hm; varied betwePn $120.2 million
and $131 million annually , or betwPen a 33% and 36% increase in
the present amount of benefit;; paid undPr the program. On tho
other hand, appellee contrncb that the increased cost would be $48.9
million annually, or a 12% increase over pre:;ent expenditure;;.
\
73-640-0PINION
10
I
GEDULDIG v. AIELLO
has created a program to insure most risks of employment
disability, it has not chosen to in.sure all ~uch risks, and
this decision is reflected in the level of annual contribution exacted from participating employees. . This Court
has held that, consistently with the Equal Protection
Clause, a State "may take one step at a time, addressing
itself to the phase of the problem which seems most acute
to the legislative mind. · The legislature may select one
phase of one field and apply a remedy there, neglecting
the others .... " Williams v. Lee Optical Co., 348 U.S. 483,
489; Jefferson v. Hackney, 406 U.S. 535 (1972). Particularly with respect to social welfare programs, so long as
the line drawn by the State is rationally supportable, the
courts will not interpose their judgment as to the appropriate stopping point. "[T] he Equal Protection Clause
does not require that a State must choose between attacking every aspect of a problem or not attacking the problern at all." Dandridge v. Williams, 397 U. S. 471, 486487 (1970).
The District Court suggested that moderate alterations
in what it regarded as "variables" of the disability insurance program could be made to accommodate the substantial expense required to include normal pregnancy within
the program's protection. The same can be said, however, with respect to the other expensive class of disabilities that are excluded from coverage-short-term disabilities. If the Equal Protection Clause were thought to
compel disability payments for normal pregnancy, it is
hard to perceive why it would not also compel payments
for short-term disabilities suffered by participating
employees. 1 u
It is evident that a totally comprehensive program
would be substantially more costly than the present pro10
The same could be said of disabilitie; continuing beyond 26
wceke.
I
73-64(}....-0l>l:NION
GEDULDIG v. AIELLO
11
gram and would inevitably require state subsidy, a higher
rate of employee contribution. a lower scale of benefits
for those suffering insured disabilities, or some combination of these measures. There is nothing in the Constitution. however, that requires the State to subordinate or
compromise its legitimate interests solely to create a
more comprehensive social insurance program than it
already has.
The State has a legitimate interest in maintaining the
self-supporting nature of its insurance program. Similarly, it has an interest in distributing the available re·
sources in such a way as to keep benefit payments at an
adequate level for disabilities that are covered, rather
than to cover all disabilities inadequately. Finally, California has a legitimate concern in maintaining the contribution rate at a level that will not unduly burden participating employees, particularly low-income employees who
may be most in need of the disability insurance.
These policies provide an objective and wholly noninvidious basis for the State's decision not to create a
more comprehensive insurance program than it has.
There is no evidence in the record that the selection of
the risks insured by the program worked to discriminate
against any definable group or class in terms of the aggregate risk protection derived by that group or class from
the program. There is no risk from which men are protected and women are not. Likewise, there is no risk
from which women are protected and men are not. 20
Indeed, the appellant Hubmitted to the District Court data that
indicatrd that both the annual rbim rate and the annual claim cost
nrc gren.ter for women than for men. As the District Court
acknowledged, "womrn contribute 28 per cent of ti1e total disability
immrance fund and receive back about as per cent of the fund in
benefits." 359 F. Supp., at 800. SeYeral amici curiae have repreresentecl to the Court that they have had a similar experience under
private di~ability insurance programs .
2o
. "'•
73-640-0PINION
12
GEDULDIG v. AIELLO
The appellee simply contends that, although she has
received insurance protection equivalent to that provided
all other participating employees, she has suffered discrimination because she encountered a risk that was outside the program's protection. For the rea..,QQns we have
stated, we hold that this contention is not a valid one
under the Equal Protection Clause of the Fourteenth
Amendment.
The judgment of the District Court is
Reversed.
May 16, 1974
No. 73-640 Geduldig v. Aiello
Dear Potter:
Plesse join me.
Sincerely,
Mr. Justice Stewart
lfp/ss
cc:
The Conference
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CHAMBERS OF
JUSTICE WM . J . BRENNAN, JR.
May 16, 1974
MEMORANDUM TO THE CONFERENCE
RE: No. 73-640
Geduldig, Etc. v. Aiello, et al.
I shall circulate a dissent in the above in
due course.
W.J.B.Jr.
.hprftiU CIJnrt of~·~ .....
.... Jriqhm. •. elf. 2111~~
C HAM!!!£.RS OF
JUSTICE BYRON R WHITE
May 17, 1974
Re:
No. 73-640 - Geduldig v. Aiello
Dear Potter:
I shall wait on the dissent in this case.
Sincerely,
Mr. Justice Stewart
Copies to Conference
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CHAMBERS OF
JUSTICE HARRY A. BLACKMUN
May 20, 1974
Re:
No. 73-640
-
Geduldig v. Aiello
Dear Potter:
Please join me.
Sincerely,
Mr. Justice Stewart
cc:
The Conference
I
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CHAMB E R S OF
.JUSTICE WILLIAM H. REHNQUIST
I
May 20, 1974
Re:
No. 73-640 - Geduldig v. Aiello
Dear Potter:
Please join me in your opinion for the Court in this
case.
Sincerely,
Mr. Justice Stewart
Copies to the Conference
'
.
No. 73-640 - Geduldig, Etc. v. Aiello, et
Mr. Justice Brennan, dissenting.
al.~ / - '
Recirculated: - - - - - - -
Relying upon Dandridge v. Williams, 397 U.S. 471 (1970), and
Jefferson v. Hackney, 406 U.S. 535 (1972), the Court today rejects
respondents' equal protection claim and upholds the exclusion of
pregnanc y related disabilities from coverage under California's disability insurance program on the ground that the legislative classification rationally prom.otes the State's legitimate cost- saving interests
in "maintaining the self-supporting nature of its insurance pro g ram[, ]
. • • distributing the available re sources in such a way as to keep
benefit payments at an adequate level for disabilities cover ed [,] . .
[and] maintaining the contribution rate at a level that will not unduly
burden the participating employees . . . . " Ante, p. 11. Because I
believe that Reed v. Reed, 404 U.S. 71 (1971), and Frontiero v.
Richardson, 411 U.S. 677 (1973), mandate a stricter standard of
scrutiny which the State's classification fails to satisfy, I respectfully
dissent.
California's disability insurance program was enacted to supplement the State's w1.employment insurance and workmen's compensation
programs by providing benefits to wage earners to cushion the economic
effects of income loss and medical expenses resulting from sickness
or lnJury. The Legislature's intent in enacting the program was
expressed clearly in § 2601 of the Unemployment Insurance Code:
"The purpose of this part is to compensate in part for
the wage loss sustained by individuals unem.p loyed because
of sickness or injury and to reduce to a minimum the
suffering caused by unemployment resulting therefrom.
This part shall be construed liberally in aid of its declared
purpose to mitigate the evils and burdens which fall on the
unemployed and disabled worker and his family."
..
- 2 -
To achieve the Act's broad humanitarian goals, the Legislature
fashioned a pooled-risk disability fund covering all employees at the same
rate of contribution,];_/ regardless of individual risk.!:_/ The only requirement that must be satisfied before an employee becomes eligible to
receive disability benefits is that the employee must have contributed one
percent of a minimum inconte of $300 during a one year base-period.
Unemp. Ins. Code § 265 2. The 11 bas ic benefits, 11 varying from $25 to
$105 per week, depending upon the employee's base-period earnings,
begin on the eighth day of the disability or on the first day of hospitalization. Unemp. Ins. Code § § 2655, 2627(b), 2802. Benefits are payable
for a maximum of twenty-six weeks, but may not exceed one-half of the
employee's total base-period earnings. Unemp. Ins. Code §2653.
Finally, compensat~on is paid for virtually all disabling conditions without
regard to cost, voluntarines s, uniqueness, predictability, or 11 normalcy 11
of the disability.l/ Thus, for example, workers are compensated for
costly disabilities such as heart attacks, voluntary disabilities such as
cosmetic surgery or sterilization, sex and race unique disabilities such
as prostatectomies or sickle-cell anemia, pre-existing conditions inevitably
resulting in disability such as degenerative arthritis or cataracts, and
11
normal 11 disabilities suc.h as removal of irritating wisdom teeth or other
o rthodo nia.
Despite the Act's broad goals and scope of coverage, compensation
is denied for disabilities suffered in connection with a 11 normal 11 pregnancy
-- disabilities suffered only by women. Unemp. Ins. Code § § 2626, 2626. 2.
Disabilities caused by pregnancy, however, like other physically disabling
conditions covered by the Act, require medical care, often include hospitalization, anesthesia and surgical procedures, and may involve genuine risk
to life. 4 I Moreover, the economic effects caused by pregnancy related
disabilities are functionally indistinguishable from the effects caus ed by
any other disability: wages are lost due to a physical inability to work,
and medical expenses are incurred for the delivery of the child and for
post-partum care._±/ In my view, by singling out for less favorable treatment a gender-linked disability peculiar to women, the State has created
a double standard for disability compensation: a limitation is imposed
upon the disabilities for which women workers may recover, while men
receive full compensation for all disabilities suffered, including those
that affect only or primarily their sex, such as prostatectomies,
circumcission, hemophilia and gout. In effect, one set of rules is
applied to females and another to males. Such dissimilar treatment of
men and women, on the basis of physical charact e ristics inextricably
linked to one sex, inevitably constitutes sex discrimination.
- 3 -
The same conclusion has been reached by the Equal Employment
Opportunity Commission, the federal agency charged with enforcement
of Title VII of the Civil Rights Act of 1964, as amended by the Equal
Employment Opportunity Act of 1972, 42 U.S. C. (Supp. I I) § § 2000e
et seq., which prohibits employment discrimination on the basis of sex.
In guidelines is sued pursuant to Title VI I and designed to prohibit the
disparate treatment of pregnancy disabilities in the employment context,!:._/
the EEOC has declared that:
"Disabilities caused or contributed to by pregnancy,
miscarriage, abortion, childbirth, and recovery therefrom are, for all job-related purposes, temporary
disabilities and should be treated as such under any health
or temporary disability insurance or sick leave plan available in connection with employm.ent. Written and unwritten
employment policies and practices involving matters such
as the commencement and duration of sick leave, the availability of extensions, the accrual of seniority and other
benefits and privileges, reinstatement, and payment under
any health or temporary disability insurance or sick leave
plan, formal or informal, shall be applied to disability due
to pregnancy or childbirth on the same terms and conditions
as they are applied to other temporary disabilities. 29
C. F. R. 1604. lO(b) (1973).]_/
In the past, when a legislative classification has turned on gender,
the Court has .justifiably applied a standard of judicial scrutiny more
strict than that generally accorded economic or social welfare programs.
Compare Reed v. Reed, supra, and Frontiero v. Richardson, supra, with
Dandridge v. William.s, supra, and Jefferson v. Hackney, ~a. Yet,
by its decision today, the Court appears willing to abandon that higher
standard of review without the slightest attempt at explaining what differentiates the gender- based classification employed in this case from those
found unconstitutional in Reed and Frontiero. The Court's decision
threatens to return men and women to a time when "traditional" equal
protection analysis sustained legislative classifications that treated
differently members of a particular sex solely because of their sex.
See, ~, Muller v. Oregon, 208 U.S. 412 (1908); Goesaert v. Cleary,
335 U.S. 464 (1948); Hoyt v. Florida, 368 U.S. 57 (1961).
- 4 -
I cannot join the Court• s apparent retreat. I continue to adhere
to my view that 11 clas sifications based upon sex, like classifications
based upon race, alienage, or national origin, are inherently suspect,
and must therefore be subjected to strict judicial scrutiny. 11 Fronti e ro
v. Richardson, supra, 411 U.S., at 688. When, as in this case, the
St ,t e employs a legislative classification that distinguishes between
beneficiaries solely by reference to gender -link ed disability risks, 11 [t ]he
Court is not . . . free to sustain the statute on the ground that it rationally
promotes legitimate governmental interests; rather, such suspect classifications can be sustained only when the State bears the burden of demonstrating that the challenged legislation serves overriding or compellin g
interests that cannot be achieved either by a more carefully tailored
legislative classification or by the use of feasible less drastic 1neans. 11
Kahn v. Shevin, _ _ U.S. _ _ , _ _ (1974) (Brennan, J. dissenting).
The State has clearly failed to meet that burden in the present
case. The essence of the State's justification for excluding disabilities
caused by a normal pregnancy from its disability compensation scheme
is that covering such disabilities would be too costly. To be sure, as
presently funded, inclusion of normal pregnancies 11 would be substantially
more costly than the present program. 11 §_/ Ante. p. 10 The present
level of benefits for insured disabilities could not be maintained without
increasing the employee contribution rate, raising or lifting the yearly
contribution ceiling, or securing State subsidies. But whatever role
such monetary considerations may play in traditional equal protection
analysis, the State's inter e st in preserving the fiscal integrity of its
disability insurance program simply cannot render the State• s use of a
suspect classification constitutional. For while 11 a State has a valid
interest in preserving the fiscal integrity of its programs[,] . . . a
State may not accomplish such a purpose by invidious distinctions between
classes of its citizens. . . . The saving of welfare costs cannot justify
an otherwise invidious classification. 11 Shapiro v. Thomeson, 394 U.S.
618, 633 (1969). Thus, when a statutory classification is subject to strict
judicial scrutiny, the State 11 must do more than show that denying [benefits
to the excluded class] saves money. 11 Memorial Hospital v. Maricopa
County, ___ U.S. _ _ , _ _ (1974). See also Graham v. Richardson,
403 u.s. 365, 374-375 (1971). J_/
Moreover, California's legitimate interest in fiscal integrity could
easily have been achieved through a vari e ty of less drastic, sexually
neutral means. As the District Court observed:
- 5 -
"Even using [the State's] estimate of the cost of expanding
the program to include pregnancy-related disabilities, however,
it is clear that including these disabilities would not destroy
the program. The increased costs could be acconliYlodated
quite easily by making reasonable changes in the contribution
rate, the maximum benefits allowable, and the other variables
affecting the solvency of the program. For example, the entire
cost increase estimated by defendant could be met by requiring
workers to contribute an additional amount of approximately
. 364 percent of their salary and increasing the rra ximum.
annual contribution to about $119. 11
I would therefore affirm the judgment of the District Court.
~
..
FOOTNOTES
J/
An employee must contribute one percent of his annual wages,
not exceeding a total contribution of $85 per year ($95 for calendar year
1974 and thereafter). Unemp. Ins. Code§§ 2901, 984, 985. The ceiling
on wages subject to the one percent contribution rate, of course, introduces a regressive element in the contribution scheme. Perhaps in recognition of this fact, the disability benefits schedule is designed to grant
propostionately greater benefits to more poorly paid workers. Unemp. Ins.
Code § 2655.
2/
California deliberately decided not to classify employees on the
basis of actuarial data. Thus, the contribution rate for a particular group
of employees is not tied to that group's predicted rate of disability claims.
3 59 F. Supp. 792, 800.
While the Act t~chnically excludes from coverage individuals
under court commibnent for dipsomania, drug addiction, or sexual
psychopathy, Unemp. Ins. Code §2678, the Court was informed by the
Deputy Attorney General of California at oral argument that court comrp.itment for such disabilities is "a fairly archaic practice" and that "it would
be unrealistic to say that they constitute valid exclusions. 11 Transcript
of Oral Argument, at 13.
4/
On March 2, 1974, the American College of Obstetricians and
Gynecologists adopted the following Policy Statement on Pregnancyrelated Disabilities:
"Pregnancy is a physiological process. All pregnant
patients, however, have a variable degree of disability on
an individual basis, as indicated below, during which time
they are unable to perform their usual activities. (1) In
an uncomplicated pregnancy, disability occurs near the
termination of pregnancy, during labor, delivery and the
peurperiUln. The process of labor and peurperium is
disabling in itself. The usual duration of such disability
is approximately six to eight weeks. (2) Complications
of a pregnancy may occur which give rise to other disability.
.
'
,;:.
.
.
'
FN- 2
Examples of such complications include toxemia, infection,
hemorrhage, ectopic pregnancy and abortion. (3) A woman
with preexisting disease which in itself is not disabling, may
becom e disabled with the addition of pregnancy. Certain
patients with heart disease, diabetes, hypertensive cardiovascular disease, renal disease, and other systemic conditions
may become disabled during their pregnancy because of the
adverse effect pregnancy has upon these conditions.
"The onset, term.ination and cause of the disability, related
to pregnancy, can only be determined b y a physician."
See Brief for Appellees, at 59-60.
5/
Nearly two-thirds of all women who work do so of necessity:
either they are unmarried or their husba1ids earn less than $7000 per
year. See United States Department of Labor, Women's Bureau, Why
Women Work (Rev. ed. 1972); United States Department of Labor,
Employment Standards Administration, The Myth and Reality (1973).
Moreover, this Court recognized in Kahn v. Shevin, _ _ U.S. _ _ ,
(1974), that "data compiled by the Women's Bureau of the United
States Departrnent of Labor shows that in 1972 women working full
time had a median income which was only 57. 9% of the male median
a figure actually six points lower than had been achieved in 195 5. "
!:_I
"The Commission carefully scrutinized both the employer
practices and their crucial impact on women for a substantial period
of time and then is sued its Guidelines after it became increasingly
apparent that systematic and pervasive discrimination against women
was frequently found in employers 1 denial of employment opportunity
and benefits to women on the basis of the childbearing role, performed
solely by women." Brief of the United States Equal Employment Opportunity Commission as am.icus curiae, at 10.
']_I
See also the proposed "Sex Discrimination Guidelines 11 is sued
by the Department of Labor pursuant to Executive Order 11246, virtually
adopting the EEOC 1 s pregnancy related disabilities guideline. 38 Fed.
Reg. 35336, 35338 (Dec. 27, 1973) (proposed §60-20(h)(2), 41 C. F. R. ).
FN- 3
8/
"It is important to remember, especially in the cost context,
that if an employee is being paid his regular pay while disabled, he
cannot collect disability pay. Therefore, it follows that any alleged
financial burden on the State will be greatly diminished when employers
adhere to Title VI I and treat pregnancy-related disabilities the same as
other disabilities by allowing women to use accumulated sick leave and
possibly annual leave as well. 11 Brief of the United States Equal Employment Commission as amicus curiae, at 21 n. 12.
Similarly, under the EEOC 1 s Guidelines on Discrimination
Because of Sex, "It shall not be a defense under Title VII to a charge
of sex discrimination in benefits that the cost of such benefits is greater
with respect to one sex than the other.'' 29 C.F.R. §1604. 9(e).
~upremt ~ottrt of
tl!r'J.lnitcb .§tates
'Jlluslyi:ng-tott. p.
~· 2.0~J12
CHAMBERS OF
JUSTICE WILLIAM 0. DOUGLAS
June 11, 1974
Dear Bill:
In 73-64o, Geduldig v. Aiello
please join me in your dissent.
\.J;VJ
WILLIAM O. DOUGLAS
Mr. Justice Brennan
cc:
The Conference
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CHAMBERS OF"
June 11, 197 4
JUSTICE THURGOOD MARS HALL
Re: No. 73-640 -- Geduldig, Etc. v. Aiello
Dear Bill:
Please join me in your dissent.
Sincerely,
,. /
- / . /' I
T. M.
Mr. Justice Brennan
cc: The Conference
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CHAMe!:RS 01'"
THE CHIEF' .JUSTICE
June 12, 1974
Re:
I
73-640 - Geduldig v. Aiello
Dear Potter:
Please join me.
Mr. Justice Stewart
Copies to the Conference
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CHA~ BE R S
OF
JUSTIC E B Y RON R. WHITE
June 13, 1974
Re:
No. 73-640 - Geduldig v. Aiello
Dear Potter:
Please join me in your opinion in this
case.
Sincerely,
Mr. Justice Stewart
Copies to Conference
/
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