SaberLee DeMare, Appellant, vs. State of Minnesota, Department of Human Services, Respondent, Lake County Welfare Board, Respondent.

SaberLee DeMare, Appellant, vs. State of Minnesota, Department of Human Services, Respondent, Lake County Welfare Board, Respondent. A06-803, Court of Appeals Unpublished, September 5, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-803

 

SaberLee DeMare,

Appellant,

 

vs.

 

State of Minnesota,

Department of Human Services,

Respondent,

 

Lake County Welfare Board,

Respondent.

 

Filed September 5, 2006

Affirmed in part and remanded in part

Kalitowski, Judge

 

Lake County District Court

File No. 38-CV-05-658

 

Philip A. Duran, 310 East 38th Street, Suite 204, Minneapolis, MN 55409; and

 

Constance A. Hope, 13570 Grove Drive, Suite 238, Maple Grove, MN 55311 (for appellant)

 

Mike Hatch, Attorney General, Robin Christopher Vue-Benson, Assistant Attorney General, 445 Minnesota Street, Suite 900, St. Paul, MN 55101-2127 (for respondent Minnesota Department of Human Services)

 

Russ Conrow, Lake County Attorney, Laura Auron, Assistant Lake County Attorney, Lake County Courthouse, 601 Third Avenue, Two Harbors, MN 55616 (for respondent Lake County Welfare Board)

 

            Considered and decided by Shumaker, Presiding Judge; Kalitowski, Judge; and Worke, Judge.

U N P U B L I S H E D   O P I N I O N

KALITOWSKI, Judge

            Appellant SaberLee DeMare challenges an agency decision and district court order interpreting Minn. Stat. § 256B.0625, subd. 3a (Supp. 2005), which precludes medical-assistance coverage of sex-reassignment surgery.  Appellant argues that (1) respondent Minnesota Department of Human Services erred by interpreting the statute to bar coverage for appellant, who filed a request for surgery but whose request had not yet been reviewed by the statute's effective date; and (2) the district court erred by failing to address his equal protection claim under Minnesota law.  We affirm respondent's decision and remand to the district court for consideration of appellant's equal protection claim. 

D E C I S I O N

Before it was amended in 2005, Minnesota's medical-assistance statute provided that "[g]ender reassignment surgery and other gender reassignment medical procedures including drug therapy for gender reassignment are not covered unless the individual began receiving gender reassignment services prior to July 1, 1998."  Minn. Stat. § 256B.0625, subd. 3a (2004).  To obtain coverage of sex-reassignment surgery (SRS), an applicant's medical care provider submitted a request for prior authorization to respondent.  Respondent's agent, Care Delivery Management, Inc. (CDMI) examined the request to determine if it met certain standards and protocols.  If CDMI determined that the requirements had been fulfilled, CDMI issued an authorization for the applicant to receive SRS.   

On July 13, 2005, the Minnesota legislature passed an amendment to the statute stating that "[s]ex reassignment surgery is not covered."  Id. (Supp. 2005).  The amendment was effective August 1, 2005.  2005 Minn. Laws 1st Spec. Sess. ch. 4, § 30, at 2039. 

Appellant submitted his request for prior authorization on July 26, 2005.  On August 1, 2005, respondent rejected appellant's request because, as of that date, SRS was not covered.  Appellant challenged respondent's denial of his request.  The Commissioner of Human Services adopted a human services referee's recommendation to affirm the agency's decision to deny appellant's request for payment.  Appellant filed an appeal in district court and his case was consolidated with four other cases.  The district court affirmed respondent's decision regarding appellant.  

I.

Agency decisions are presumed correct, and this court defers to an agency's expertise and its special knowledge in the field of its technical training, education, and experience.  Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn. 1977).  When reviewing an agency's determination of a question of law, a court is "not bound by the decision of the agency and need not defer to agency expertise."  St. Otto's Home v. Minn. Dep't of Human Servs., 437 N.W.2d 35, 39-40 (Minn. 1989).  "We review questions of statutory construction de novo."  Houston v. Int'l Data Transfer Corp., 645 N.W.2d 144, 149 (Minn. 2002).  And when a district court has reviewed an agency determination, appellate courts are not bound by the district court's decision.  Signal Delivery Serv., Inc. v. Brynwood Transfer Co., 288 N.W.2d 707, 710 (Minn. 1980). 

"When interpreting a statute, [this court] first look[s] to see whether the statute's language, on its face, is clear or ambiguous.  A statute is only ambiguous when the language therein is subject to more than one reasonable interpretation."  Am. Family Ins. Group v. Schroedl, 616 N.W.2d 273, 277 (Minn. 2000) (quotation and citation omitted).  The object of statutory interpretation is to ascertain and effectuate legislative intent.  Minn. Stat. § 645.16 (2004).

Here the amended statute simply states:  "Sex reassignment surgery is not covered."  Minn. Stat. § 256B.0625, subd. 3a (Supp. 2005).  And the session law accompanying the amendment provides an effective date of August 1, 2005.  2005 Minn. Laws 1st Spec. Sess. ch. 4, § 30, at 2039. 

The plain language of the statute provides that SRS is not covered by medical assistance after August 1, 2005.  And respondent can approve a prior authorization request only "if the health service is otherwise a covered service under the [medical assistance] or [general assistance medical care] programs."  Minn. R. 9505.5030 (2005).  Because the language of the statute is unambiguous as applied to appellant, we will engage in no further statutory interpretation and must apply its plain meaning.  State by Beaulieu v. RSJ, Inc., 552 N.W.2d 695, 701 (Minn. 1996).  As of August 1, 2005, respondent could not grant appellant's request for prior authorization because SRS was not a "covered service" under medical assistance.  Minn. Stat. § 256B.0625, subd. 3a.   

Appellant argues that he is entitled to coverage under the amended statute because he requested prior authorization before August 1, 2005.  But the amendment of the statute from one that covered SRS when an individual received gender reassignment services prior to July 1, 1998, to one that excluded SRS without exception indicates that SRS coverage is precluded regardless of an applicant's previous actions.  Furthermore, the statute does not include a grandfather clause.  And this court "cannot supply that which the legislature purposely omits or inadvertently overlooks." Wallace v. Comm'r of Taxation, 289 Minn. 220, 230, 184 N.W.2d 588, 594 (1971). 

Appellant points out that CDMI staff in charge of reviewing prior authorization requests was out of the office during the last days in July.  Appellant argues that the legislature would not have intended for medical-assistance coverage to turn on whether CDMI had sufficient staff on hand to process requests.  Although the staff's absence was unfortunate, appellant cites no legal authority indicating that CDMI was obligated to process his application by the August 1, 2005 deadline. 

Appellant also argues that respondent erred by applying the statutory amendment to Minn. Stat. § 256B.0625, subd. 3a, retroactively.  "No law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature."  Minn. Stat. § 645.21 (2004).  Before a statute will be afforded retroactive application, clear evidence must show that the legislature intended retroactive application "such as mention of the word ‘retroactive.'"  Duluth Firemen's Relief Ass'n v. City of Duluth, 361 N.W.2d 381, 385 (Minn. 1985).  Neither party claims that the legislature intended retroactive application of this statutory amendment. 

A retroactive law is one that takes away or impairs vested rights acquired under previously existing laws, creates a new obligation, imposes a new duty, or attaches a new disability to a transaction in the past.  Cooper v. Watson, 290 Minn. 362, 369, 187 N.W.2d 689, 693 (1971).  The Minnesota Supreme Court has stated that "a right becomes vested when it has arisen upon a contract, or transaction in the nature of a contract, . . . and liabilities under that right have been so far determined that nothing remains to be done by the party asserting it."  Ridgewood Dev. Co. v. State, 294 N.W.2d 288, 294 (Minn. 1980) (quotation omitted).  And this court has stated that "there is no mature or vested right in an existing law or action until a final judgment has been entered."  McClelland v. McClelland, 393 N.W.2d 224, 227 (Minn. App. 1986), review denied (Minn. Nov. 17, 1986). 

Here, appellant did not have a fixed or established right to medical assistance for SRS when he filed his request for prior authorization.  The amendment did not relate back and give appellant's act of submitting his request a different legal effect than it had on July 26, 2005.  See Baron v. Lens Crafters, Inc., 514 N.W.2d 305, 307 (Minn. App. 1994) (stating that retroactive laws "relate[] back to a previous transaction and give[] it some legal effect different from what it had under the law when it occurred").  If appellant had the right to anything when he submitted his application, it was a review of his request.  And the record indicates that CDMI reviewed it to the extent necessary to make the determination that appellant's requested surgery was no longer covered. 

Appellant also argues that when respondent affirmed its denial of appellant's request for medical assistance payment for SRS, respondent misapplied the general savings-clause statute, Minn. Stat. § 645.35 (2004).  The savings clause states that:

The repeal of any law shall not affect any right accrued, any duty imposed, any penalty incurred, or any proceeding commenced, under or by virtue of the law repealed.  Any civil suit, action, or proceeding pending to enforce any right under the authority of the law repealed shall and may be proceeded with and concluded under the laws in existence when the suit, action, or proceeding was instituted, notwithstanding the repeal of such laws; or the same may be proceeded with and concluded under the provisions of the new law, if any, enacted.

 

Minn. Stat. § 645.35. 

Appellant contends that the process of requesting a prior authorization constituted a "proceeding" under the savings-clause statute and that appellant commenced that proceeding by submitting his request.  But appellant had no "right under the authority of the law repealed" to enforce at the time he submitted his application.  Minn. Stat. § 645.35.  And appellant cites no authority to support his argument that his unilateral act of submitting a request constituted or commenced a proceeding.  We conclude that respondent's interpretation of Minn. Stat. § 256B.0625, subd. 3a, did not violate the savings-clause statute. 

Because Minn. Stat. § 256B.0625, subd. 3a, unambiguously applies to preclude appellant from obtaining medical-assistance coverage for SRS after August 1, 2005, and because respondent's interpretation neither applied the statute retroactively nor violated the savings-clause statute, we conclude that the district court did not err by affirming the decision to deny appellant's request for medical-assistance coverage for SRS. 

II.

Appellant argues that the district court erred by failing to address his claim that the amendment to Minn. Stat. § 256B.0625, subd. 3a, violated his right to equal protection under the Minnesota Constitution.  Appellant asks this court to remand the constitutional challenge to the district court.  Respondent contends that remand is unnecessary and urges this court to address the equal protection argument. 

To determine whether a statute violates equal protection, we first examine "whether the challenged classification must satisfy strict scrutiny or merely the rational basis standard."  Erlandson v. Kiffmeyer, 659 N.W.2d 724, 733 (Minn. 2003).  We apply strict scrutiny to legislatively created classifications in two situations:  (1) when they impermissibly limit a fundamental right; or (2) when they involve a suspect classification.  Krueth v. Indep. Sch. Dist. No. 38, 496 N.W.2d 829, 835 (Minn. App. 1993) (citing City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 440, 105 S. Ct. 3249, 3254 (1985)), review denied (Minn. Apr. 20, 1993).  Generally, a suspect class is one whose members have been subjected to discrimination; exhibit obvious, immutable, or distinguishing characteristics that define them as a discrete group; and are a minority or politically powerless.  See, e.g., Mass. Bd. of Ret. v. Murgia, 427 U.S. 307, 313-314, 96 S. Ct. 2562, 2566-2567 (1976).

            The record indicates that appellant (1) argued to the district court that the amendment to Minn. Stat. § 256B.0625, subd. 3a, violates his right to equal protection under the Minnesota Constitution under the rational basis standard of review; and (2) reserved a motion to present evidence on the argument that appellant, as a transsexual, is a member of a suspect class.  The district court rejected appellant's constitutional challenge without hearing evidence on his suspect-class claim or applying equal protection analysis.    

The district court's failure to address appellant's equal protection claim and appellant's failure to brief the claim on appeal leave this court without a record sufficient to determine "whether the challenged classification must satisfy strict scrutiny or merely the rational basis standard."  Erlandson, 659 N.W.2d at 733.  Expressing no opinion on its merits, we remand the equal protection issue for the district court to address in such proceedings as the court deems appropriate. 

            Affirmed in part and remanded in part.