10th Circuit agrees Denver not immune from ADA lawsuit

The federal appeals court based in Colorado agreed a woman could sue her former employer, the City and County of Denver, for disability discrimination without running into the immunity typically granted to states and their agencies.

Lower court judges have repeatedly held that local departments of human services in Colorado are arms of the state government, which, under the 11th Amendment, is generally immune from federal lawsuits. However, the U.S. Court of Appeals for the 10th Circuit noted Kristen Guadiana had "artfully" managed to lodge her allegations against Denver itself, even though the alleged discrimination happened while she worked at the city's human services department.

"She put in there, ‘I was employed by the city. These were city employees.’ She was very careful not to basically out herself as an employee of (Denver Human Services)," observed Judge Joel M. Carson III during oral arguments in Guadiana's case.

According to Guadiana's lawsuit, Denver hired her in May 2016 as an eligibility technician within Denver Human Services, where she helped people determine their eligibility for Medicaid assistance. Guadiana has cerebral palsy, a motor and muscular disability, and could only type with one hand. 

In November 2015, Guadiana's supervisor told Guadiana her numbers were "a little low" and she would continue on probationary employment. Pursuant to the Americans with Disabilities Act, the city indicated it would try to accommodate her disability by purchasing voice-activated software and a one-handed keyboard, and also perform an ergonomic assessment.

Allegedly, the only accommodation the city actually provided for Guadiana was a "short" keyboard, which she was only able to use for fewer than nine days before Denver terminated her employment in April 2016. She then filed a lawsuit alleging Denver fired her without first evaluating whether her performance improved with the accommodation, and had failed to engage with her in good faith, among other discriminatory actions.

In August of last year, U.S. Magistrate Judge Scott T. Varholak denied the city's motion to dismiss the lawsuit. He acknowledged federal judges had consistently tossed complaints against county departments of human services after finding they specifically were arms of the state and, therefore, covered by 11th Amendment immunity.

However, he was "unaware of any decision in which the City and County of Denver — as distinguished from DDHS (Denver Human Services) — was dismissed where, as here, the plaintiff alleged that she was an employee of the City, rather than or in addition to DDHS," Varholak wrote.

In appealing Varholak's findings, the city argued it was still entitled to immunity because it was itself acting as an agent of the state by providing human services programs. Guadiana, by extension, was impermissibly suing a state entity.

"All of her work was done in the agency. The ADA accommodation was approved by the agency. The decision to hire her and terminate her was done by the agency," Sherri L. Catalan, with the Denver City Attorney's Office, told the three-judge panel of the 10th Circuit that heard the appeal. "Eighty percent of the department of human services is funded by the state."

Ariel DeFazio, the attorney for Guadiana, countered that the real question was who controlled the terms and conditions of Guadiana's employment. In DeFazio's view, it was the city. 

"There’s just no legal precedent that allows the city to adopt the immunity given to one of its agencies," she said.

DeFazio also told the appellate panel that dismissing Guadiana's lawsuit would extend 11th Amendment immunity to block the civil rights lawsuits of human services workers in all 64 counties of Colorado, even if the departments themselves were not being sued.

The 10th Circuit, while declining to answer the question litigated for years in the trial courts of whether county departments of human services deserve immunity, concluded Guadiana's lawsuit could proceed because she was not actually suing Denver Human Services.

"Guadiana intentionally sued Denver, independent of DDHS, and plausibly alleged that she was employed by Denver as distinguished from DDHS," wrote Judge Allison H. Eid in the panel's Aug. 9 order. "Had Guadiana brought suit against DDHS, the issue of whether Denver 'act(ed) as an agent of the state administering the state’s human services programs' may have been a relevant inquiry. But she did not."

DeFazio told Colorado Politics she did not know if the 10th Circuit ever would rule directly on 11th Amendment immunity for local departments of human services, but she has had to "tread very carefully" on the issue.

"There are so many traps for the unwary public employee," she said. "At least the 10th Circuit’s order in Guadiana makes the terrain just a bit less precarious for employees with disabilities."

In addition to DeFazio, Guadiana was previously represented by U.S. District Court Judge Charlotte N. Sweeney, a former workers' rights attorney who took office as a federal judge last month.

The case is Guadiana v. City and County of Denver.