Subject: Suit to Decide if Disabilities Act Bars Refusal to Pay for AIDS Care Date: Published: 3/5/93 (126 lines) Source: Wall Street Journal. Copyright Dow Jones & Co. Inc. Law -- Legal Beat: Suit to Decide if Disabilities Act Bars Refusal to Pay for AIDS Care ---- By Junda Woo Staff Reporter of The Wall Street Journal In a courthouse showdown that could ultimately affect many businesses with self-insured medical plans, an employee-benefit fund is arguing that it didn't violate federal antidiscrimination law when it refused to pay for AIDS treatments. The dispute involves an area of law left open last year by the U. S. Supreme Court. The high court said the federal benefits law allows self-insured companies to yank the health insurance of employees with AIDS. But the court didn't address whether the Americans with Disabilities Act of 1990, which covers AIDS, allows such a move. "What we have here is a collision course between the ADA and health benefits," said Roger M. Levin, a New York attorney for the fund, which provides health benefits to some New York construction and asbestos workers. "The lawsuit seeks answers to important legal questions." If the U. S. Supreme Court eventually rules on the case, it could affect all self-insured medical plans, which in 1991 were used by 65% of U. S. companies, according to a survey of 2,409 employers by consulting firm A. Foster Higgins, a New York subsidiary of insurance broker Johnson & Higgins. The suit won't involve businesses that buy private insurance. Their insurers are covered by state regulations, which vary in prohibiting or allowing insurance companies to cut off coverage for AIDS care. In the suit, filed this week against two fund beneficiaries with AIDS-related ailments, as well as the Equal Employment Opportunity Commission, the fund contests a ruling by the federal administrative agency that it is violating the Americans with Disabilities Act. The EEOC decision in January was the first to find that the disability act does not allow AIDS benefits to be withdrawn. The benefits cutoff grew out of economic desperation, not discrimination, so it fell under an exception to the antidiscrimination act, argues the fund, the Mason Tenders District Council Welfare Fund. The fund says it lost $19.7 million in 1990 because of huge health-care bills and a dearth of construction work. As a result, the fund says, it cut off reimbursements not only for AIDS treatments but also for routine physicals, dental and eye care and organ transplants. The fund also contends, in the suit filed in federal court in Manhattan, that benefit trusts, such as the fund, aren't even covered by the antidiscrimination act. The EEOC ruling had been praised by advocates for people with AIDS. "I don't see any reason to single out AIDS," said Thomas Kendricks, a staff attorney at the Gay Men's Health Crisis, New York, who is representing the two workers. "Why not heart disease? Why not cancer? Are they cheaper illnesses to treat?" The language of the antidiscrimination act and the federal benefits law, the Employee Retirement Income Security Act, doesn't shed much light on what courts should do. "There's certainly a lot of unclarity in the structure, and the legislative history is also kind of murky," said Mark Scherzer, a New York attorney who specializes in AIDS and employee-benefits issues. "Although there are reasonable arguments under the antidiscrimination act, I'm not confident at all that we'll succeed." One potential problem for the workers' attorneys is that AIDS-care benefits were cut off before the disability act became law. The attorneys for the workers are arguing that discrimination is continuing, because the workers' benefits are still being denied. A growing number of self-insured companies have cut off benefits for AIDS treatments in the past few months, according to advocates for people with AIDS. No statistics are available, however. Terrence P. Donaghey Jr., a former asbestos handler who is a plaintiff in the suit, said his longtime physician has refused to see him since he lost his benefits last year. "It's bad enough that I have a terminal disease -- that's my fate -- but to be told I can't get the medical care that I need is horrifying," he said. "I want people to know it's hard, it's very hard." (Mason Tenders District Council Welfare Fund and Paul V. Ragone vs. Terrence P. Donaghey et al., U. S. District Court, Southern District of New York, 93 Civ. 1154) --- Taping Ethics An attorney didn't violate any laws or ethics rules when he told a client where to buy equipment for secretly taping conversations, a New York federal magistrate judge ruled. The client taped 43 conversations with staffers and top executives at his workplace, AC&R Advertising Inc., a unit of Saatchi & Saatchi Co. In 1991, the man, a director of creative services at AC&R, filed an age-discrimination lawsuit against the agency. In New York, it is legal for one person to tape-record another secretly. The ad agency, however, argued that the tapes shouldn't be admitted into evidence because the legal profession's disciplinary rules prohibit lawyers from engaging in "dishonesty, fraud, deceit or misrepresentation." The magistrate judge ruled, however, that although the attorney "came perilously close to crossing the line of circumventing the disciplinary rules," he did not actually cross over because he didn't directly discuss the tapings with the client or tell the client to make the tapes. Few secret-taping cases have gone before courts and attorney-discipline boards, but usually lawyer involvement in such taping has been declared unethical, said Monroe H. Freedman, an ethics professor at Hofstra University School of Law. He thinks the ruling implies "that the bar association disciplinary opinions are wrong, and that's why I applaud it," he said. "Taping leads to more truth." Attorneys involved in the suit said the parties had signed an agreement not to comment publicly on the case. (Louis Miano vs. AC&R Advertising Inc., U. S. District Court, Southern District of New York, Manhattan, 91 Civ. 1280 (LBS)) --- Law Notes.... L. A. MOVE: Cynthia M. Cohen, a litigator, will become a partner in the Los Angeles office of Morgan, Lewis & Bockius, a 650-lawyer firm. Ms. Cohen, who has a national bankruptcy practice, handles complex commercial disputes. She is leaving the Los Angeles office of the New York law firm Hughes Hubbard & Reed, where she was also a partner. [This article is made available here by Dow Jones Co. for the personal and non-commercial use of callers to this bbs, in the hope that it will be of some help to those who are suffering from the disease and others who are seeking to help them.]