Ogletree Deakins Files Amicus Brief on Behalf of Three Leading National Associations in Golden Gate Restaurant Association v. San Francisco

WASHINGTON, D.C. – July 8, 2009 – Today, Ogletree Deakins filed a “friend of the court” brief urging the U.S. Supreme Court to review a Ninth Circuit Court of Appeals decision that upheld the employer health care spending mandate in San Francisco’s Health Care Security Ordinance.  The brief was filed on behalf of three leading national associations:

• the Society for Human Resource Management;
• the National Federation of Independent Business Small Business Legal Center;
• the National Association of Manufacturers. 

The case is Golden Gate Restaurant Association v. City and County of San Francisco, No. 08-1515. 

The San Francisco Ordinance, which was adopted in 2007, requires most employers that do business in San Francisco to spend a minimum amount each calendar quarter on their San Francisco employees’ health care beginning in January, 2008.   In late December, 2007, a federal district court ruled that the Ordinance was not enforceable because it overstepped the City’s authority under a federal law that regulates employer-provided health care coverage, the Employee Retirement Income Security Act of 1974 (ERISA).  A three-judge panel of the Ninth Circuit Court of Appeals later reversed the District Court, holding that the San Francisco ordinance did not conflict with federal law.  Decisions from the Ninth Circuit are regarded as particularly significant because the Ninth Circuit has appellate jurisdiction over all the federal district courts in nine states— Alaska, Arizona, California, Hawai’i, Idaho, Montana, Nevada, Oregon, and Washington—a list that includes some of the country’s fastest-growing regions.  The Golden Gate Restaurant Association asked that the case be reheard by all 29 active judges on the Ninth Circuit, and when that request was turned down, the restaurant association petitioned the Supreme Court to take the case. 

While the Ordinance is in effect, an employer can be required to spend as much as $3,623.64 per year on health care for each “covered employee.”  The Ordinance treats an employee as a “covered employee” during a calendar quarter if the employee works 10 or more hours in San Francisco during a week in the calendar quarter.  The Ordinance also requires employers that do business in San Francisco to comply with specific notice requirements and to keep records showing that they are in compliance with the Ordinance’s spending requirements.

Employers generally contend that when Congress adopted ERISA in 1974, it prohibited state and local governments from using “pay or play” legislation to require employers to subsidize health care coverage for employees.  Federal courts around the country usually agree with this position.  In the last major show down over state-mandated health coverage, the U.S. Court of Appeals for the Fourth Circuit in Baltimore struck down Maryland’s “Fair Share Health Care Fund Act,” ruling that it could not be enforced because it is preempted by ERISA, which takes precedence over state law because it is a federal law.  The Ninth Circuit’s decision in Golden Gate Restaurant Association v. City and County of San Francisco, comes to exactly the opposite conclusion.   When two or more federal Courts of Appeals disagree so sharply over an issue of law, the Supreme Court often steps in to resolve the controversy.

With such high stakes, the National Federation of Independent Business Legal Foundation, the Society for Human Resource Management, and the National Association of Manufacturers asked Tom Christina, a shareholder and employee benefits lawyer at the law firm of Ogletree Deakins, to file an amicus brief on their behalf supporting the Golden Gate Restaurant Association’s petition asking the Supreme Court to hear the case.  The amicus brief notes that ERISA generally preempts state laws that relate to employer-sponsored benefit plans in the private sector, such as health plans for employees and their families.  By preempting state and local laws that mandate benefits coverage, ERISA leaves employers generally free to design their benefit plan offerings within their budgets in response to their perception of their employees’ preferences.

Christina, who is one of the small number of benefits lawyers nationwide who maintains a plan design and regulatory compliance practice, but also regularly litigates employee benefits issues in trial and appellate courts throughout the country, said “A conflict between two federal Courts of Appeals over state and local employer mandates causes major practical problems for employers nationwide.  Left unresolved, the conflict also has the potential to spill over into Congress’s consideration of health care reform measures.”  

“This is a very important case, and we are honored that SHRM, the NFIB Small Business Legal Center, and the National Association of Manufacturers chose Ogletree Deakins to represent them in this case,” said Gray Geddie, Ogletree Deakins’ Managing Shareholder.  “Tom Christina is the right lawyer to present their views in a landmark ERISA case.  When the stakes in employee benefits litigation are high, clients appreciate having an advocate like Tom who knows ERISA from the ground up.”

The National Federation of Independent Business Small Business Legal Center is a nonprofit, public interest law firm and is the legal arm of the National Federation of Independent Business (“NFIB”), which is the nation’s leading small business association, representing about 350,000 small businesses throughout the United States.  The Society for Human Resource Management is the world’s largest association devoted to human resource management.  Representing more than 250,000 individual members, the Society’s mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available.  The National Association of Manufacturers is the oldest and largest broad-based industrial trade association and serves 11,500 companies in every industrial sector in every state. 

To view a copy of the amicus brief filed by Ogletree Deakins in Golden Gate Restaurant Association v. City and County of San Francisco, click here.

About Ogletree Deakins

Ogletree Deakins is the nation’s third largest labor and employment law firm, representing management in all types of employment-related legal matters. The firm has 450 lawyers located in 35 offices across the country from Miami to Los Angeles. In addition to handling labor and employment law matters, the firm has thriving practices focused on business immigration, employee benefits, and workplace safety and health law.  Ogletree Deakins represents a diverse range of clients, including more than half of the Fortune 50 corporations in the U.S.

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