## Facts

- Carparts Distribution Center, Inc. participated in a self-funded medical reimbursement plan offered through an association and administered by a related trust.
- Ronald Senter, Carparts’s sole shareholder, president, and employee, had been enrolled in the plan since 1977, when it provided $1,000,000 in lifetime medical benefits per eligible member.
- In 1986, Senter was diagnosed as HIV-positive; in 1991, he was diagnosed with AIDS; he died in 1993.
- In 1990, the plan announced an amendment effective January 1, 1991 that capped benefits for AIDS-related illnesses at $25,000 while maintaining a $1,000,000 lifetime maximum for other conditions.
- Plaintiffs alleged the plan trustees adopted the AIDS-specific cap with knowledge of Senter’s HIV/AIDS status and in response to his anticipated or actual claims.
- Plaintiffs sued alleging disability discrimination under Titles I and III of the Americans with Disabilities Act (ADA) and related federal and state provisions.
- The district court dismissed under Rule 12(b)(6), concluding defendants were neither an ADA Title I “employer” nor a Title III “public accommodation,” in part because defendants did not operate a physical facility open to the public.

## Issues

1. Whether the complaint plausibly alleged that the association and plan administrators could fall within ADA Title I as an “employer” or other covered entity in a benefits-provision relationship.
2. Whether ADA Title III “public accommodation” coverage is limited to entities operating a physical place open to the public, excluding a benefits plan or insurance-like service offered without a walk-in facility.
3. Whether dismissal at the Rule 12(b)(6) stage was improper given the need for factual development on defendants’ role, control, and the nature of the services provided.

## Decision

- The First Circuit vacated the Rule 12(b)(6) dismissal and remanded.
- The court held dismissal of the Title I claim was premature because the pleadings did not foreclose defendants’ potential coverage in an employment-benefits arrangement, and factual development was required.
- The court held the district court erred in treating Title III as limited to entities operating a physical place; a “public accommodation” is not categorically confined to physical structures.
- The court directed further proceedings on the ADA claims and related federal and state claims.

## Legal Principles

- On a Rule 12(b)(6) motion, courts must accept well-pleaded allegations as true and draw reasonable inferences in the plaintiff’s favor; close coverage questions should not be resolved against the plaintiff without an adequate factual record.
- ADA Title I coverage may extend beyond the direct employer where an entity significantly controls, administers, or determines the terms of employment-related benefits; whether it qualifies can depend on facts regarding the interrelationship and control.
- ADA Title III is not limited to discrimination occurring at a physical site; it can reach denial or unequal provision of goods or services by a covered entity even when the service is provided without a walk-in facility.
- An insurance or benefit plan’s discriminatory limitations on coverage can constitute discrimination in access to services within Title III’s scope, subject to statutory coverage requirements.

## Conclusion

The First Circuit held that the plaintiffs’ ADA claims could not be dismissed on the pleadings: factual development was needed to assess Title I coverage in the benefits relationship, and Title III was not restricted to entities with physical premises, so the absence of a walk-in facility did not defeat the claim as a matter of law.


Carparts Distribution Ctr., Inc. v. Auto. Wholesalers Ass’n of New Eng., Inc., 37 F.3d 12 (1st Cir. 1994)