The Americans with Disabilities Act (ADA): Pending Supreme Court Decisions 2002-2003

The Americans with Disabilities Act (ADA): Pending Supreme Court Decisions 2002-2003

Order Code RS21374
December 31, 2002
CRS Report for Congress
Received through the CRS Web
The Americans with Disabilities Act (ADA):
Pending Supreme Court Decisions 2002-2003
Nancy Lee Jones
Legislative Attorney
American Law Division
Summary
The Supreme Court has granted certiorari in two cases for the 2002-2003 term. In
Medical Board of California v. Hason the Court will address the issue of whether the
Eleventh Amendment bars suit under title II of the ADA against the California Medical
Board for the denial of a medical license due to the applicant’s mental illness. This case
is the latest in a series of federalism cases and will be closely watched. The Court has
also granted certiorari in Clackamas Gastroenterology Associates P.C. v. Wells to
determine whether or not to apply the economic reality test to determine if the clinic’s
physician-shareholders are counted as “employees” for the purpose of determining
whether the clinic is a covered entity under the ADA. This case also has implications
for other federal civil rights statutes, such as title VII of the Civil Rights Act of 1964,
which have similar language. This report will be update as appropriate. For a more
detailed discussion of all of the Supreme Court cases decided under the ADA see CRS
Report RL31401, The Americans with Disabilities Act: Supreme Court Decisions, by
Nancy Lee Jones. For a more detailed discussion of the ADA see CRS Report 98-921,
The Americans with Disabilities Act (ADA): Statutory Language and Recent Issues, by
Nancy Lee Jones.
Introduction and Background
The Americans with Disabilities Act (ADA), 42 U.S.C. §§12101 et seq., provides
broad nondiscrimination protection for individuals with disabilities in employment, public
services, public accommodations and services operated by private entities, transportation,
and telecommunications. Enacted in 1990, the ADA is a civil rights statute that has as its
purpose “to provide a clear and comprehensive national mandate for the elimination of
discrimination against individuals with disabilities.”1 It has been the subject of numerous
lower court decisions, and the Supreme Court has decided fifteen ADA cases.
1 42 U.S.C. §12102(b)(1).
Congressional Research Service ˜ The Library of Congress

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Medical Board of California v. Hason
Medical Board of California v. Hason2 involves a doctor who was denied a medical
license by the medical board of California because he had been treated for depression and
drug dependency. He sued under title II of the ADA which prohibits discrimination
against individuals with disabilities by states or localities. The state argued that the
Eleventh Amendment barred suits against the state medical board under the ADA but the
ninth circuit court of appeals rejected this argument, finding that the state was subject to
suit under the ADA. The Supreme Court granted certiorari to address the Eleventh
Amendment issue.
Hason follows on the heals of Garrett v. University of Alabama3 where the Supreme
Court, in a 5-4 decision, held that the Eleventh Amendment bars suits to recover monetary
damages by state employees under title I of the Americans with Disabilities Act.4
Although this ruling was narrowly focused concerning the ADA, it had broad implications
regarding federal-state power5 and emphasized the difficulty of drafting federal legislation
under section 5 of the Fourteenth Amendment that will withstand Eleventh Amendment
scrutiny. The majority opinion in Garrett stated that “Congress is the final authority as
to desirable public policy, but in order to authorize private individuals to recover money
damages against the States, there must be a pattern of discrimination by the States which
violates the Fourteenth Amendment, and the remedy imposed by Congress must be
congruent and proportional to the targeted violation. Those requirements are not met
here....”6 A strong dissent by Justice Breyer, joined by Justices Stevens, Souter and
Ginsburg, argued that the Garrett majority ignored powerful evidence of discriminatory
treatment.
One important distinction between Garrett and Hason is that Garrett involved a
challenge to title I of the ADA which prohibits employment discrimination while Hason
concerns title II, which prohibits discrimination against individuals with disabilities by
states and localities. Garrett is limited to state employees while the potential reach of
Hason is much broader and could include participants in activities covered by title II such
as education, public transportation, and voting. More significantly, Hason may establish
the parameters of the Court’s holdings with regard to the state’s Eleventh Amendment
immunity from suit. The Supreme Court has emphasized in prior decisions that there
must be a pattern of discrimination by the states that is documented by Congress in order
for a statute to withstand Eleventh Amendment scrutiny. In Garrett the record in the
2 279 F.3d 1167 (9th Cir. 2002), cert. granted 71 U.S.L.W. 3347 (Nov. 19, 2002).
3 531 U.S. 356 (2001). For a more detailed discussion of Garrett see Nancy Lee Jones,
“University of Alabama v. Garrett: Federalism Limits on the Americans with Disabilities Act,”
CRS Rept. RS20828.
4 The Supreme Court, starting in 1992 with New York v. United States, 505 U.S. 144 (1992),
began what some commentators have referred to as a “rebirth of federalism.” For a more detailed
discussion of these cases which led up to Garrett see Nancy Lee Jones, “University of Alabama
v. Garrett: Federalism Limits on the Americans with Disabilities Act,” CRS Rept. RS20828.
5 For a detailed discussion of federalism see Kenneth Thomas, “Federalism and the Constitution:
Limits on Congressional Power,” CRS Rept. RL30315.
6 531 U.S. 356, 374 (2001).

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ADA regarding employment discrimination was found to be insufficient to abrogate
Eleventh Amendment immunity. However, Chief Justice Rehnquist writing for the
majority in Garrett contrasted the ADA’s legislative history on employment
discrimination with that on state conduct that violates title II, noting that the evidence
regarding employment was sparse compared with the evidence of state conduct. The
decision in Hason may well be critical not only for the interpretation of the ADA but also
for the development of constitutional doctrine on federalism.
Clackamas Gastroenterology Associates P.C. v. Wells
Title I of the ADA, like title VII of the Civil Rights Act of 1964, covers employers
engaged in an industry affecting commerce who have fifteen or more employees.7 In
Clackamas the Court is presented with the issue of whether a federal court should apply
the economic realities test to determine if the medical clinic’s physician-shareholders are
counted as “employees” for the purpose of determining if they are covered by the ADA.8
Clackamas Gastroenterology Associates was sued by a former employee who alleged
that her employment had been terminated because of her disability in violation of the
ADA. Clackamas had four physician-shareholders who all participated in the
management and operations of the medical practice and were the shareholders and
directors of the clinic. The ninth circuit held that the physician-shareholders were to be
counted as employees and rejected the application of the “economic realities” test that
had been used by the seventh circuit. The economic realities test, the ninth circuit opined,
could be applied “under appropriate circumstances” to prevent a firm “from labeling the
bulk of its employees as partners simply to insulate itself from liability for
discrimination.”9 However, the ninth circuit found that “because the decision to
incorporate is presumably a voluntary one, there is no reason to permit a professional
corporation to secure the ‘best of both possible worlds’ by allowing it both to assert its
corporate status in order to reap the tax and civil liability advantages and to argue that it
is like a partnership in order to avoid liability for unlawful employment discrimination.”10
On the other hand, the dissent to the ninth circuit decision argued that “it is apparent
that a physician’s professional corporation in Oregon retains important legal aspects of
a partnership.... the four physician-shareholders...participate in the management and
operation of the entity’s medical practice, attend monthly management meetings, and
share profits from the professional corporation through an annual bonus system.”11 The
dissent described the purpose of the limitation of coverage to entities with fifteen or more
employees as a way to divide larger businesses from smaller ones and to “spare very
7 42 U.S.C. §12111(5).
8 71 U.S.L.W. 3062 (July 16, 2002), cert. granted, 71 U.S.L.W. 3233 (Oct. 8, 2002). Oral
argument will be on Tuesday, February 25, 2003.
9 271 F.3d 903, 905 (9th Cir. 2001).
10 Id.
11 Id. at 908.

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small firms from the potentially crushing expense of mastering the intricacies of the
antidiscrimination laws.”12
There are reported to be approximately 430,000 employers with between fifteen and
nineteen employees as of 1999.13 Clackamas could be a significant decision not only for
ADA cases but also for cases brought under title VII of the Civil Rights Act of 1964 and
the Age Discrimination in Employment Act, since their similar language would most
likely be construed in the same manner.
12 Id. quoting Papa v. Katy Industry Inc., 166 F.3d 937, 940 (7th Cir. 1999).
13 “Supreme Court Ruling in Wells Case will have Broad Impact, Lawyer Says,” 24 Disability
Compliance Bulletin (Oct. 18, 2002).