Last month the Oregon Tax Court ruled on the constitutionality of an administrative rule allowing same-sex but not different-sex partners to exempt from state tax the imputed value of their domestic partner health insurance benefits.
The challenge was filed by Yvonne Haldeman, a taxpayer with an unmarried different-sex partner who, in 2007, tried to subtract $5313 from her gross income because that was the imputed value, for federal tax purposes, of the health insurance provided by her employer for her partner. (The details of her specific situation are in the opinion of a tax court magistrate who heard the case in 2008).
Haldeman argued that the rule violated the Oregon Constitution's privileges and immunities clause which "forbids inequality of privileges or immunities not available upon the same terms...to any class of citizens." She argued that the class of citizens of which she was a member was unmarried different-sex partners. The background for this issue is the 1998 Tanner case, in which the Oregon appeals court found it unconstitutional to grant health insurance benefits to the spouse of a married public employee but not to a same-sex partner who could not marry the employee. The Oregon Attorney General subsequently concluded that it would violate the state constitution to permit a spouse, but not a same-sex domestic partner, to subtract the value of the health insurance benefit from gross income for tax purposes. The administrative rule at issue defines "domestic partner" as someone under no legal disability to marry the other person but for the fact that each is the same sex and who would marry that person if Oregon law permitted it.
Haldeman argued that the class for purposes of constitutional analysis was unmarried different-sex partners vs unmarried same-sex partners. The Tax Court rejected this, specifically because the rule applied only to those same-sex partners who would marry if they could. Therefore, the Tax Court found the class to be married vs unmarried persons. Tanner found sexual orientation to be a suspect class. It also determined that immutability was not an absolute requirement for suspect class status; rather a class is suspect if its characteristics are "historically regarded as defining distinct, socially recognized groups that have been the subject of adverse social or political stereotyping or prejudice." The Tax Court then determined that marital status was not a suspect class and that neither single status nor marital status has resulted in routine targeting for adverse treatment over the years. The opinion states that Haldeman did not argue that her class had historically suffered prejudice or stereotyping. Rather she argued that the very rule she challenged put her through "adverse social and political prejudice," and the Tax Court disregarded this, stating that she "does not elaborate on this assertion, does not contribute any evidence of her assertion, and does not cite to any case law supporting an argument of mistreatment of unmarried persons."
As a result of the above, Haldeman was not in a suspect class. Applying the rational basis ("any conceivable state of facts") test, the Tax Court found that the rational basis was avoiding the litigation that would likely have followed after Tanner had the state continued to include the value of the benefit in the gross income of an employee with a same-sex domestic partner. The Tax Court did not adopt the reasoning of the magistrate in his 2008 ruling that "it was rational for the legislature to assume that the financial benefit inuring from the exemption provided an incentive for people to marry." Yet the reasoning it did use seems not credible to me. How can the purpose of a rule be avoiding litigation, as opposed to some substantive benefit provided by the rule? As it turned out, the rule did not avoid litigation; after all, Haldeman sued.
I applaud the Tax Court's implicit (unfortunately) rejection of promoting marriage as the legitimate interest furthered by the distinction in the rule. But I question the part of its reasoning that disregards precisely the prejudice and stereotyping that unmarried couples have historically suffered. Once immutability is not a prerequisite for determining a suspect class, there is a strong evidence of the longstanding prejudice against unmarried couples.
Of course this issue feeds into the argument I have been making over many years. The arguments for access to marriage for same-sex couples glorify marriage. They diverge from the arguments made in the past that marriage should not determine who gets benefits. In 2000, Lambda Legal filed a friend of the court brief in 7th Circuit Court of Appeals in support of Milagros Irizarry, a heterosexual city employee denied access to domestic partner health benefits available to same-sex couples. Irizarry lost, but Lambda Legal entered the case even though gay and lesbian employees were receiving the benefits. Lambda Legal took a position against making marriage compulsory for straight couples. I doubt the organization would have assisted Yvonne Haldeman in her case in the Oregon Tax Court.
In fact, Lambda Legal is not representing the different-sex domestic partners who lost their benefits in Arizona. You could read all of Lambda's publicity about the case, Collins v. Brewer, without ever realizing that different-sex domestic partners were receiving benefits and that those benefits were also terminated. In fact, this Lambda press release describes Arizona's action as "eliminating health benefits for gay state employees" when all state employees lost their domestic partner benefits. The University of Arizona recently notified its employees that a court injunction issued in July does not prevent the termination of benefits to different-sex partners.
The fight for domestic partner benefits started in the 1980's as a fight against mandating marriage before an employee could protect the health of his or her family. All the early domestic partner benefits (think The Village Voice and Ben & Jerry's) were open to unmarried couples of any gender. A decade ago, Lambda Legal endorsed that position. Apparently it no longer does.
I'm reminded all the time by leaders in the marriage equality movement that they are fighting for the choice to marry. And I consistently reply that there is no "choice" when marriage is the only way to obtain economic protections for a family unit. Both Haldeman and Collins v. Brewer prove my point.
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