Mar 11, 2009

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Ninth Circuit Denies Review Of ERISA Preemption Case

In Golden Gate Restaurant Ass’n. v. City and County of San Francisco, 546 F.3d 639 (9th Circ. 2008), the Ninth Circuit held that the city’s ordinance requiring employers to provide employees with a certain level of benefits or pay a tax to the city that would go toward funding health care for low- to moderate-income individuals was not preempted by ERISA. The court further held that this decision was not in conflict with the Fourth Circuit’s decision in Retail Industry Leaders Ass’n v. Fielder, 475 F.3d 180 (4th Circ. 2007) and such decision was not contrary to the Congressional intent underlying ERISA that there not be a patchwork of regulation requiring plan administrators to understand and comply with 50 different state laws.

A former professor of mine once commented that the Ninth Circuit gets overturned twice in a good week.  And, it is very possible the Supreme Court will disagree with the distinction the Ninth Circuit draws between the Maryland pay-or-play statute, which only impacted Wal-mart in the state, and the San Francisco ordinance at issue, and reverse the Ninth’s decision.

However, both arguments in this case carry water, and my opinion seems to change based on whose argument I am reading. Either way, if the Supreme Court takes the case, regardless of the holding, it will play a prominent role in the future of state mandated health care statutes.