The Ninth Circuit Court of Appeals has decided not to rehear its decision in Golden Gate Restaurant Ass’n v. City and County of San Francisco, 546 F.3d 639 (9th Cir. 2008) en banc (i.e., by all members of the court). In September of 2008, a threejudge panel ruled that the Employee Retirement Income Security Act of 1974 (ERISA) did not preempt the portion of the San Francisco Health Care Security Ordinance requiring employers to make a certain level of health care expenditure on behalf of employees in San Francisco. After the September decision was rendered, the Golden Gate Restaurant Association (GGRA) filed a petition for hearing en banc.
The majority of a divided court denied the request for an en banc rehearing. Among the judges voting against rehearing were the panel members that decided the case.
The dissent noted that the Ninth Circuit’s decision (1) is in clear opposition to the Fourth Circuit Court of Appeals decision in Retail Indus. Leaders Ass’n v. Fielder, 475 F.3d 180 (4th Cir. 2007); (2) “renders meaningless” the Supreme Court cases establishing ERISA preemption guidelines; and most notably, (3) “flouts the mandate of national uniformity in the area of employer-provided healthcare that underlies the enactment of ERISA.” In the dissent’s view, if the Ninth Circuit’s decision is not overturned, it will create a roadmap for the enactment of numerous conflicting health care laws affecting national employers, undermining the congressional goal of national uniformity in the area of employer-provided healthcare.
The response to the dissent argued that, unlike the Maryland law at issue in Fielder, the Ordinance offers an employer a meaningful choice of paying health care expenditures either to the City of San Francisco or to the employer’s own health care plan. Second, the respondent noted that the court’s decision is not in conflict with Supreme Court precedent because the Ordinance does not require any changes to or impermissibly refer to an ERISA plan. Lastly, the respondent noted that the purpose of ERISA is not to require national uniformity in the provision of health care, but rather to “ensure that the administrative practices of a benefit plan will be governed by only a single set of regulations.” The respondent concluded that nothing in the Ordinance requires the employer to establish an ERISA plan or to alter an existing ERISA plan, nor does it interfere with the uniformity of ERISA regulations.
GGRA has indicated on their website that they intend to move forward to the Supreme Court. The Supreme Court may choose to hear the case due to the significant impact this could have on employer-sponsored ERISA health plans.