7th Circuit Court of Appeals
Civil Plenary — Insurance/Substantial Compliance Deadline Exception
Donald Fessenden v. Reliance Standard Life Insurance Company and Oracle USA, Inc., Group Long Term Disability Plan
The 7th Circuit Court of Appeals has vacated judgment for a plan administrator after concluding insurers will not receive deferential authority if they fail to meet regulatory deadlines under the Employee Retirement Income Security Act of 1974.
While Donald Fessenden was working as a software engineer manager, he began experiencing fatigue and severe, chronic migraines that caused him to stop working. He initially applied for short-term disability benefits through his former employer’s benefits plan issued by Reliance Standard Life Insurance Company.
Although the short-term benefits were granted, by the time they ran out after a few months, Fessenden’s employer fired him. Six years later, Fessenden submitted a claim to Reliance for long-term disability benefits dating back to his last day of work in 2008. The submission included medical records for 2006 through 2014, as well as statements from multiple doctors, all supporting his diagnosis of chronic fatigue syndrome. But Reliance denied Fessenden’s claim and stated it would notify him of its final decision in 45 days if he sought review of the decision.
When he did, Reliance didn’t keep its word. Instead, it filed a similar final decision more than a week after the mandated, and extended, timeframe had expired, again denying Fessenden’s request. Before the final decision was issued, but after the deadline had passed, however, Fessenden sued Reliance and Oracle USA, Inc. under ERISA, maintaining that he qualified for disability benefits under the plan.
As the plan administrator, Reliance sought an exception for its procedural violation of missing the deadline. It should receive deference, Reliance argued, because it “substantially complied” with the deadline because it was only a little late.
The Northern District Court granted summary judgment to Reliance, rejecting Fessenden’s claims that the timing regulation precluded application of the substantial compliance exception; that Reliance had not substantially complied with the deadline in any event; and that even if it had substantially complied, Reliance’s decision to deny him benefits was arbitrary and capricious.
But the 7th Circuit Court of Appeals vacated the lower court’s determination in a June 25 opinion, holding that the “substantial compliance” exception does not apply to ERISA’s regulatory deadlines.
“We reject Reliance’s argument because we hold that the ‘substantial compliance’ exception does not apply to blown deadlines. An administrator may be able to ‘substantially comply’ with other procedural requirements, but a deadline is a bright line. Because Reliance violated a hard-and-fast obligation, its late decision to deny Fessenden benefits is not entitled to deference,” Circuit Judge Amy Coney Barrett wrote for the panel.
The 7th Circuit noted that giving plan administrators a post-exhaustion grace period creates problems for claimants, either by creating an unfair advantage for administrators or by placing claimant in uncertain waters.
“We acknowledge that some of our sister circuits have been willing to apply the substantial compliance exception to blown deadlines,” the panel wrote. “These circuits have seen no difference between forgiving tardiness and forgiving violations of other procedural requirements. We disagree.”
The 7th Circuit concluded that excusing late decisions was both foreclosed by ERISA’s 2002 regulations, which added a provision to specifically address “failure to establish and follow reasonable claims procedures,” and was incompatible with the doctrine. It also created “significant tension” with the appellate court’s own precedent in Edwards v. Briggs & Stratton Retirement Plan, where it rejected a claimant’s argument that the substantial compliance exception should excuse her untimeliness in missing a deadline.
There, it noted that while it had never applied the doctrine to excuse the mistakes of claimant, as opposed to administrators, its reasonings applied equally to deadlines that bind plan administrators.
“What’s good for the goose is good for the gander,” the panel concluded, vacating the district court’s determination and remanding for proceedings.
“We are thrilled to see this groundbreaking decision from the 7th Circuit effectively killing the ‘substantial compliance’ excuse to blown regulatory deadlines utilized so often by insurance companies,” said Indianapolis attorney Bridget O’Ryan, representing Fessenden. “This decision makes clear that an insurer will be stripped of deferential authority if they fail to meet the ERISA regulatory deadlines.”
The case is Donald Fessenden v. Reliance Standard Life Insurance Company and Oracle USA, Inc., Group Long Term Disability Plan, 18-1346.
Civil Plenary — Sexual Assault Investigation/Title IX
John Doe v. Purdue University, et al.17-3565
Finding dismissal was premature, the 7th Circuit Court of Appeals has reinstated a lawsuit against Purdue University brought by a male student accused of sexual assault.
The male student, using the pseudonym John Doe, claimed Purdue violated his rights under the 14th Amendment and Title IX after the school conducted a “constitutionally flawed” investigation into the allegations brought by his former girlfriend. He also claimed the university discriminated against him on the basis of sex.
At the U.S. District Court for the Northern District of Indiana, Doe’s lawsuit was dismissed. The magistrate judge ruled Doe’s due process rights were not violated because he was not deprived of his liberty or property. In addition, the district court dismissed Doe’s Title IX claims on the grounds that he did not show Purdue discriminated because he is a male.
However, the 7th Circuit reversed, finding the male student adequately alleged violations of both the 14th Amendment and Title IX. It remanded the case, John Doe v. Purdue University, et al., 17-3565, to the Northern Indiana District Court for further proceedings.
The court found Doe had adequately alleged that Purdue deprived him of a liberty interest. Citing Paul v. Davis and Hinkle v. White, the appellate panel held that Doe’s status changed after Purdue determined that he was guilty of a sexual offense. He was subsequently suspended for one year, which impacted him beyond the classroom.
“And it was this official determination of guilt, not the proceeding charges or any accompanying rumors, that allegedly deprived John of occupational liberty,” Judge Amy Coney Barrett wrote for the court. “It caused his expulsion from the Navy ROTC program (with the accompanying loss of scholarship) and foreclosed the possibility of his reenrollment in it.”
Noting the process to determine Doe’s guilt included the university crediting the victim’s account of the alleged assault without hearing from her directly, the appellate court ruled Doe should be able to make his Title IX arguments.
“Taken together, John’s allegations raise a plausible inference that he was denied an educational benefit on the basis of his sex,” Barrett wrote. “To be sure, John may face problems of proof, and the factfinder might not buy the inferences that he’s selling. But his claim should have made it past the pleading stage.”
The Purdue case is one of many in which university students have sued after determinations against them arising for allegations of sexual misconduct. Other Indiana universities facing similar litigation include Ball State, Butler, DePauw, Indiana and Notre Dame.
Indiana Supreme Court
Civil Plenary — Welfare Modernization/Damages, Interest
International Business Machines Corporation v. State of Indiana, acting on behalf of the Indiana Family & Social Services Administration
In its second opinion issued in the years-long dispute between Indiana and IBM Corp. over the failed contract to create a new Hoosier welfare system, the Indiana Supreme Court has allowed IBM to collect post-judgment interest on its $49.5 million damages award. However, that interest will date back only to a 2017 judgment on remand, not the original judgment entered in the company’s favor in 2012, and only serves as an offset to the greater sum IBM owes the state.
Justice Steven David wrote for the court in the June 26 opinion in International Business Machines Corporation v. State of Indiana, acting on behalf of the Indiana Family & Social Services Administration, 19S-PL-19. The justices, excluding Justice Mark Massa, heard their second round of arguments in the case in February.
At issue in the litigation is a contract between IBM and the state requiring IBM to develop a new welfare system that utilized a centralized call center to handle customer requests. The new system, colloquially known as “modernization,” was meant to be a shift away from the prior welfare system that emphasized face-to-face contact with customers.
But the state terminated the IBM contract in 2009 after modernization began experiencing problems. Instead, the state created its own welfare system, known as “hybrid,” that combined the call center with the former face-to-face model.
Both parties filed breach complaints, and the Marion Superior Court initially determined modernization’s failure was not a breach of IBM’s contract. Instead, the state was ordered in 2012 to pay IBM $49.5 million for the costs of equipment and assignment fees.
But the appellate courts, including the Indiana Supreme Court, determined IBM had breached the contract and, in 2016, remanded the case for a damages assessment.
Judge Heather Welch determined in 2017 that IBM owed the state $128 million, offset by the $49.5 million previously awarded to the company, for a net damages award of $78 million for the state. Welch also declined to award post-judgment interest on IBM’s $49.5 million in damages, but the COA reversed that decision after hearing oral arguments last August.
The parties raised multiple issues on appeal when they returned to the Supreme Court in February, but the justices chose to address only the question of post-judgment interest. In determining the interest should date back only to 2017, David rejected the Court of Appeals’ reliance on Beam v. Wausau Ins. Co., 765 N.E.2d 524 (Ind. 2002), to award post-judgment interest because the $49.5 million damages award had been the “one constant” of the case lasting roughly a decade.
Beam relied on Indiana Code section 24-2.6-1-101, but David said the controlling statute here is I.C. 34-13-1-6 “because we are dealing with a sum of money due from the State.” The inquiry under the latter statute, he said, is “whether there was a final decree or judgment.”
“Case law is clear that a final judgment disposes of ‘all issues as to all parties,’” David wrote. “… Not all the issues as to all parties were resolved at the time of remand and further, what was due and owed to IBM was necessarily contingent upon what damages were due the State for the breach.”
“… Here, there is no money that rightfully belonged to IBM as the amount awarded to it may have been and ultimately was, only an offset to what IBM owes the State,” he continued. “Accordingly, looking at the statute, our case law and the facts of this case, post-judgment interest going back to the original judgment is inappropriate.”
The court summarily affirmed the COA in all other respects and affirmed the trial court in all respects, which would include the $78 million damages award to the state.
Barnes & Thornburg attorneys John Maley and Peter Rusthoven, counsel for the state in the IBM litigation, released a statement saying they are pleased with the court’s ruling.
“Hoosiers will finally benefit from IBM’s multi-million-dollar payment of this judgment,” the statement said, referring to the $78 million owed to the state.
But Justice Geoffrey Slaughter dissented from the summary affirmance of the Court of Appeals, because one of the COA’s central premises in its ruling was that the modernization system was “essentially the same” as the hybrid system.
“It is telling that the State initially asked IBM to implement Hybrid via change order,” Slaughter wrote in his partial dissent. “By entering into the change-order process, the State all but admits that Hybrid is outside the scope of contracted services. Parties do not negotiate proposed changes to an agreement that already requires those things.”
Thus, Slaughter said the COA wrongly determined the costs the state incurred through hybrid were “procurement costs.” He would classify those costs as consequential damages subject to a $3 million cap.
“It will come as little surprise if prospective vendors respond to today’s ruling in one of two ways,” Slaughter continued. “Either they will not do business with the State at all, thus reducing the supply of those willing to contract with the State. Or they will include a risk premium in their contracts to cover the unknown costs of fulfilling obligations beyond what they agreed to.”
Slaughter concurred with the court’s ruling on post-judgment interest.
Massa did not participate in the case because he previously worked for former Gov. Mitch Daniels, who led the state to contract with IBM for the new welfare system.
Miscellaneous — Seizure of Cash/Probable Cause
Michael Hodges v. State of Indiana
The Indiana Supreme Court has upheld the seizure of $60,000 in cash believed to be drug money, finding the officer who intercepted the parcel holding the cash had probable cause to think the package was related to drug trafficking. The unanimous ruling also upholds the turnover of the cash to the federal government, though it doesn’t address whether the money will be forfeited.
The case of Michael Hodges v. State of Indiana, 19S-MI-117, began in 2017, when Detective Brian Thorla and his K-9 partner, Hogan, were investigating parcels at an Indianapolis FedEx shipping facility. One package caught Thorla’s attention because it was being shipped to California, was addressed to “Christopher Smith,” was in a new FedEx box, had been paid for with cash and was shipped priority overnight with no signature required upon delivery. In Thorla’s experience, these factors, including shipping to a drug “source” state and the use of a generic name, indicated involvement with drug trafficking.
Hogan twice alerted to a narcotics odor coming from the package, shipped by Michael Hodges, so Thorla obtained a warrant to search the parcel for “controlled substances…, records of drug trafficking and proceeds of drug trafficking,… involving the proactive attempts of concealing currency as listed in the affidavit … .” The warrant required Thorla “to seize such property, or any part thereof, found on such search.”
When Thorla opened Hodge’s package, he found a vacuum-sealed plastic container filled with $60,990 in cash. The container was surrounded by “padded packs,” some of which are often used to conceal odors.
Hogan then alerted on the cash, so police seized the money and obtained a court order to transfer it to the federal government. The transfer was stayed pending appeal, at which point the Court of Appeals determined the seizure of the cash was unlawful.
But after hearing oral arguments in April, the Supreme Court upheld the seizure. Chief Justice Loretta Rush, writing for the unanimous court, said that under the totality of the circumstances, Thorla had probable cause to seize the cash.
The telltale signs that the parcel was possibly involved in drug trafficking gave Thorla probable cause to seek the search warrant, Rush said. And what he found inside the box — multiple layers of sealed packaging, a vacuum-sealed plastic container, the large amount of rubber-banded cash — gave him probable cause to seize the money.
“Might each of these circumstances be the result of innocent behavior? Yes,” the chief wrote. “It may well be that the cash is not proceeds of drug trafficking. It may be as Hodges asserts – that he mailed the $60,990.00 to a World Series ticket holder in a lawful exchange for expensive tickets.
“But the existence of a post hoc innocent explanation does not preclude probable cause from forming,” she continued. “Here, the combination of circumstances gave Detective Thorla reason to believe that the cash was proceeds of drug trafficking. That is enough to meet the probable-cause standard, making the seizure lawful and the turnover proper.”
In a footnote, the court disapproved of the 2017 decision in Bowman v. State, 81 N.E.3d 1127 (Ind. Ct. App.), modified on denial of reh’g (Ind. Ct. App. 2017) — which Hodges relied on and the COA cited — to the extent that it conflicts with the June 27 decision.
Rush ended by noting that just because the cash is seized and turned over to the feds does not mean it will be forfeited – the government also has the option of returning it.
“If it seeks forfeiture, the court overseeing that proceeding may assess any innocent explanations for the circumstances and determine who is entitled to the property,” she wrote. “We decide only that the turnover from state to federal authorities is proper.”
Civil Plenary — Civil Forfeiture/Common School Fund
Jeana M. Horner, et al. v. Terry R. Curry, et al.
The practice of diverting civil forfeiture proceeds away from the Common School Fund to reimburse law enforcement costs is constitutional under Article 8, Section 2 of the Indiana Constitution, the Indiana Supreme Court has ruled, answering the longstanding question of whether the constitution requires all forfeiture proceeds to go to the Common School Fund.
Only two justices, Mark Massa and Christopher Goff, concurred fully with the court’s 54-page opinion, handed down in Jeana M. Horner, et al. v. Terry R. Curry, et al., 18S-PL-333. Chief Justice Loretta Rush and Justice Geoffrey Slaughter each wrote separately, while Justice Steven David partially joined Rush’s separate opinion. Rush was the only member of the court to dissent from a portion of the 38-page majority opinion.
The court heard arguments in the case in October, hearing from the Virginia-based Institute for Justice, which argued the text of Article 8, Section 2 made diversion of forfeiture proceeds unconstitutional. That constitutional provision holds that “(t)he Common School fund shall consist of … (t)he fund to be derived from … all forfeitures which may accrue … .”
But now-retired Marion Superior Judge Thomas Carroll found in March 2018 that the phrase “all forfeitures which may accrue,” as it was understood at ratification in 1851, did not include civil forfeiture. The justices then granted transfer pursuant to Indiana Appellate Rule 56(A), bypassing the Indiana Court of Appeals.
The case arose under the 2013 seizure of Jeana and Jack Horner’s two vehicles. The Marion County Prosecutor’s Office filed a forfeiture action against the vehicles, though they were eventually returned after the underlying criminal charges were dropped.
At the time of the seizure and forfeiture action, Indiana Code Section 34-24-1-3(a) (2011) allowed the prosecutor to request to offset forfeiture revenue to reimburse law enforcement costs related to the forfeiture action. If that offset was granted, the remaining revenues would be deposited into the Common School Fund.
That statute was amended in 2018 to create a specific formula for disbursing forfeiture proceeds. The percentage-based formula begins with attorney fees and flows through law enforcement before depositing the remaining proceedings into the Common School Fund.
The Horners, suing on behalf of Indiana taxpayers and citizens, challenged both versions of the statute as unconstitutional. The court determined that Article 8, Section 2 does apply to civil forfeitures, contrary to how Carroll ruled in March 2018. In reaching this holding, Massa reviewed caselaw and statutes dating back to 1789 and determined “that our constitutional framers understood that ‘a conviction on the underlying criminal activity is not a prerequisite for forfeiture.’”
Massa then said there is a long precedent in Indiana of allowing the Legislature to determine how and when money accrues to the Common School Fund. He cited to State v. Elliott, 171 Ind. App. 389, 392, 357 N.E.2d 276, 278 (1976), and language in the 1816 Indiana Constitution to support “the framers’ understanding that, even without express language permitting offset, the legislature can direct when and how forfeiture proceeds ‘accrue’ or ‘inure’ to the state.”
Similarly, the history of the educational fund undercuts the taxpayers’ argument against diversion, Massa said, as do the structure and purpose of the constitution. He cited to Auditor & Treasurer of Grant County v. Board of Commissioners of Grant County, 7 Ind. 315 (1855), which allowed seminaries to use sale proceeds to pay off debts before depositing the remaining proceeds into the Common School Fund. Similarly, State ex. Rel. Attorney General v. Meyer, 63 Ind. 33 (1878), upheld the practice of allowing pre-accrual debt offset for heirless estates, allowing those estates to hold the property for five years, then selling the property and vesting proceeds into the Common School Fund.
“For the reasons set forth above, our Constitution’s structure and purpose refute Taxpayers’ claim that, ‘if the framers had intended that the forfeitures clause authorize cost-reimbursement, they would have said so,’” Massa wrote in conclusion.
“We acknowledge the critical role public schools play in nurturing our children to become productive and law-abiding citizens,” he wrote. “… But should the legislature decide to repeal the Civil Forfeiture Statute entirely, leaving neither the Common School Fund nor law enforcement with an important source of revenue, would that present Taxpayers with a constitutional claim? Would that violate article 8, section 2’s mandate that the Fund ‘shall consist of … all forfeitures which may accrue’? We think the answer to these rhetorical questions is a resounding ‘no.’”
“… Because our constitution’s text, structure, and history clearly show that article 8, section 2 was ‘not self-acting in [its] operation,’ … we hold that the General Assembly may decide how and when forfeiture proceeds accrue to the Common School Fund.”
In a separate opinion, Chief Justice Rush wrote she would hold that the current forfeiture statute is unconstitutional, and that her reading of Article 8 Section 2 does allow for offset costs. But “under the current civil-forfeiture statute, any contributions to the Fund are not guaranteed and are capped at ten percent of the collected forfeiture. Without any showing that the allocations are offset costs of obtaining each forfeiture and that those costs serve to grow the Fund, the permissibility of offset costs does not save the statute from constitutional infirmity.”
Slaughter also wrote separately, concurring in the judgment for the defendants and against the plaintiffs. But he reached that result for different reasons than those laid out in Massa’s opinion.
“I would hold that Plaintiffs lack standing under the only standard consistent with our Constitution’s mandate of separate governmental powers,” Slaughter wrote. “In my view, Article 3, Section 1 requires, among other things, that a plaintiff suffer individualized injury in fact and not a generalized harm indistinct from the public at large.”
“… Although I have serious concerns with the way Indiana carries out civil forfeitures … I would not reach the merits of Plaintiffs’ constitutional claim,” he continued. “Instead, I would dismiss their complaint for lack of standing and await another case — brought by the State or by a private party with a concrete, particularized injury — to address the important constitutional questions that this and other civil-forfeiture cases implicate.”
Indiana Court of Appeals
Juvenile Termination of Parental Rights — Insufficient Evidence
In the Matter of the Termination of the Parent-Child Relationship of: A.B. (Minor Child), and C.B. (Mother) v. Indiana Department of Child Services
A mother’s efforts to get her life back on track and reunite with her daughter were recognized by the Indiana Court of Appeals, which reversed an order terminating the mother’s parent-child relationship for insufficient evidence.
Mother C.B. was arrested in 2017 after police found her unconscious with spice cigarettes near where she was lying on the couch. At the time police arrived at her home, C.B.’s 3-year-old son was walking down the street unsupervised. C.B. was ultimately charged with Level 6 felony neglect of a dependent and Class A misdemeanor possession of a synthetic drug.
As a result, A.B. and her younger brother were adjudicated as children in need of services. Since that time, A.B. has been placed in four foster care families and with two relative caregivers who were willing to adopt her. Meanwhile, her mother was ordered to participate in a substance abuse and parenting assessment, parenting time, random drug screen tests, a mental health evaluation, individual counseling and family therapy.
Although she initially participated in case management services and showcased positive parenting visits, C.B. begin to miss her appointments due to depression. C.B. completed a mental health and substance abuse assessment that led her to an intensive outpatient program for her use of meth, opiates and alcohol. However, she was discharged from the IOP for noncompliance and was later suspended from all parenting visits after testing positive for meth.
But C.B. consistently participated in drug screens in the months leading to her termination hearing, all of which were clean, and she was still participating at the time of the termination hearing. During the hearing, C.B. was just five days shy of five months of sobriety. She also testified to actively looking for new housing, being in her second month of employment, taking medication for her depression and working to obtain health insurance.
Considering her progress, the Indiana Court of Appeals found insufficient evidence to prove that continuing C.B.’s parent-child relationship with A.B. would pose a threat to the child’s well-being, or that the termination was in A.B.’s best interest. It further found insufficient evidence to prove that the conditions resulting in the placement of A.B. outside C.B.’s custody would not be remedied.
“Although the State argues that Mother likely will be unable to maintain her sobriety long-term without treatment, Mother has maintained her sobriety even after DCS stopped funding services in June 2018,” Judge John Baker wrote for the court. He further noted C.B. missed services because she was incarcerated, which is an “insufficient basis for terminating parental rights,” and that she had been living in the same place for a longer period.
The appellate court further found that DCS failed to offer C.B. a chance to rectify her bond with A.B. when it refused to allow additional visitation.
“Moreover, DCS did not explain why the passage of time between visits would make another visit traumatic for Child. Considering that Child was placed in six different homes throughout these proceedings, we find DCS’s reasoning puzzling,” Baker continued. “Indeed, it is hard to understand how seeing a parent with whom she has a bond could be more traumatic than bouncing from placement to placement.
“…We acknowledge that Mother must continue to build a stable, sober life, participate in services, and preserve her bond with Child,” the appellate court concluded. “Yet, based on the record, we simply cannot say that clear and convincing evidence exists that, at this point, the termination of this relationship is in Child’s best interests.”
The trial court’s judgement was therefore reversed and remanded in In the Matter of the Termination of the Parent-Child Relationship of: A.B. (Minor Child), and C.B. (Mother) v. Indiana Department of Child Services, 18A-JT-3110.
Miscellaneous — Transgender Name Change/Sealed Records
In the Matter of the Name Change of M.E.B., M.E.B.; In the Matter of the Name Change of K.H., K.H.
Two transgender individuals seeking to keep private their name and gender marker change actions will be able to seal their case records after the Indiana Court of Appeals reversed trial court rulings requiring the transgender women to publish notice of the changes.
Judge John Baker wrote both opinions in favor of sealing the records in two cases, In the Matter of the Name Change of M.E.B., M.E.B., 19A-MI-118, and In the Matter of the Name Change of K.H., 18A-MH-3077. Both individuals were male at birth but now identify as female.
Both M.B. and K.H. filed their name and gender marker change petitions in 2018 and subsequently moved to prohibit public access under Indiana Administrative Rule 9. M.B. cited to “high rates of violence, discrimination, and invasion of privacy against transgender people in Indiana and nationwide” and said she had personally experience discrimination because of her gender identity.
In K.H.’s case, the judge temporarily sealed the records and set the matter for a hearing, before which K.H. was required to publish notice of her desire to change her “own name from a name commonly used by males to a name more commonly used by females,” though she did not have to list her name. She was also required to publish the cause number and the date and time of her hearing and to notify the Attorney General.
K.H. objected to those requirements, but the trial court did not rescind its order. She then argued that “(p)ublishing a notice tells people that I am trans and inviting them to the hearing would give power to the community to dictate my life.”
The Hamilton Circuit Court ultimately denied K.H.’s Rule 9 motion because she did not publish the prerequisite notice or notify the Attorney General. The Orange Circuit Court likewise denied M.B.’s motion, writing that “it is readily apparent that [M.B.’s] evidence falls considerably short of proving by clear and convincing evidence that publication of the notice of the petition in this case would create ‘a significant risk of substantial harm.’” Further, the Orange County court said M.B.’s transgender status was “readily apparent” based on her appearance.
The appellate court relied on In re A.L., 81 N.E.3d 283 (Ind. Ct. App. 2017) to order reversal in both cases. In that case, the COA found no statutory requirement to publish notice of an intended gender marker change. While there is a statutory requirement to publish notice of an intended name change, A.L. held that the requirement is subject to exceptions laid out in Administrative Rule 9.
Relevant among those exceptions is the one in Rule 9(G)(4)(a)(ii), which allows for records to be sealed in cases in which “[a]ccess or dissemination of the Court record will create a significant risk of substantial harm to the requestor.” That exception, and all of Rule 9, is designed to prevent harm, Baker said, so M.B. was not required to provide evidence that she or other transgender Hoosiers were the target of violence.
Further, Baker said M.B. did provide data regarding violence and homicide against transgender people nationwide and in Indiana, as well as specific instances in which members of her community discriminated against her because of her transgender status.
“We find that this evidence readily supports M.B.’s argument that, if she had to publish notice of her name change petition and maintain a publicly open case file, she would be at a significant risk of substantial harm,” Baker wrote. “The trial court erred in ruling otherwise.”
The appellate court also noted in M.B.’s case that it was “wholly improper” for the trial court to deny confidentiality because the judge believed M.B. obviously looked like a transgender individual.
As to K.H., the appellate court said Administrative Rule 9 contemplates public notice in only one way: Rule 9(G)(4)(c)(ii), which requires that if a confidentiality notice is not initially denied, the court must provide advance notice of a subsequent hearing “within the confines of the court accessible to the general public,” pursuant to Indiana Code section 5-14-2-5.
“Neither the statute nor Administrative Rule 9 provides for alternative forms of public notice — including notice by publication,” Baker wrote. “Therefore, the trial court exceeded its authority and erred by ordering K.H. to take this action.”
The court likewise exceeded its authority in ordering that notice be given to the Attorney General, noting the General Assembly “has never seen fit to name the Attorney General as a party in interest to name change cases or to Administrative Rule 9 cases.”
“As to whether K.H. met her burden under Administrative Rule 9 that public access to her case records would create a significant risk of substantial harm to her, we find that she has,” Baker wrote. “The portions of her affidavit quoted above show that if her status as a transgender person becomes publicly known, she would be at significant risk of violence and discrimination.”
Both cases were remanded for further proceedings and with instructions that the records be sealed.
In footnotes in both cases, the appellate court chastised the trial court judges for their treatment of M.B. and K.H. In M.B.’s case, the COA called out the Orange Circuit Court for referring to M.B. as “he/she” in its order.
“The order is also permeated with derision for M.B.,” Baker wrote. “We would hope that the trial courts of this state would show far greater respect (as well as objectivity and impartiality) to all litigants appearing before them.”
And in K.H.’s case, the panel said the trial court’s “astonishing” pre-hearing notice requirements — including the requirement that she notify the public of her intent to change from a typical male name to a typical female name — were attempts to end-run around the Legislature.
“There is no statute or rule requiring that an individual seeking a gender marker change publish notice of that intent,” the court said. “Had the trial court truly only wanted her to notify the public that she intended to change her name, there would have been no need to require the gender specific language in the notice. It is apparent that the trial court intended to force K.H. to signal implicitly to the world that she seeks to change her gender.”•