Attorneys for the state will ask a federal appeals court Monday to let it stop providing insurance benefits for the partners of gay workers.
Assistant Attorney General Charles Grube contends that U.S. District Judge John Sedwick was wrong in issuing an injunction last year barring the state from altering its benefits package.
That ruling requires Arizona to keep funding the coverage until there is a final ruling, something that could take years.
State lawmakers voted to end the benefits as a method of saving money.
Grube said that, in deciding whether to issue an injunction, Sedwick was required to consider not only the claims of harm to the people losing the benefits but also the harm to the state of being required to maintain them. But Grube said Sedwick was "explicitly dismissive" of evidence presented by the state about the cost burden on taxpayers of continuing to provide coverage.
Conversely, Grube said Sedwick gave too much credibility to what he said are little more than unproven allegations by those challenging the law.
Arizona provides benefits to the dependents of its state and university employees. But prior to 2008, that did not include the domestic partners of its single workers.
That year, at the behest of then-Gov. Janet Napolitano, the Department of Administration administratively altered the rules to redefine who is a dependent.
Napolitano, a Democrat, quit in early 2009 to become Homeland Security chief in the Obama administration, elevating Republican Jan Brewer to governor. And that paved the way for the Republican-controlled Legislature to approve a provision in the state budget limiting who is entitled to dependent coverage - and specifically excluding the partners of unmarried employees, whether gay or straight.
Lambda Legal filed suit on behalf of gay workers, saying they have no option of getting benefits because the Arizona Constitution forbids them from marrying.
In his ruling last year, Sedwick said the change is discriminatory because it makes benefits available "on terms that are a legal impossibility for gay and lesbian couples."
"As a result, (the law) denies lesbian and gay state employees in qualifying domestic partnership a valuable form of compensation on the basis of sexual orientation."
How many workers are affected is unclear.
The Department of Administration said about 800 employees obtained domestic partner benefits. But it is not clear how many of these are heterosexual couples who were also granted benefits in 2008 but lost them last October because were not part of Lambda Legal's lawsuit and Sedwick's ruling.
The state figured it paid out about $4 million in claims for domestic partner benefits in the first year of the change, and $5.5 million last fiscal year. But there were no figures about how much of that was related solely to gay and lesbian employees.
In his arguments, Grube said that Sedwick did more than ignore the state's evidence of costs. He said the judge improperly relied on "unsupported allegations" by those contending the law is discriminatory.
And Grube said there was no real evidence that the loss of state-provided health coverage would cause irreparable harm to the affected workers, though admittedly at a higher cost.
But attorney Tara Borelli, representing the affected workers, said in her legal arguments that's not true.
She said several employees have life partners with chronic conditions which require immediate and ongoing care, with some unable to get private coverage because of prior-existing medical conditions.
"Even for those who could secure alternative, albeit inferior and more expensive health coverage, this financial burden involves its own stresses," she wrote.