The Erisa Industry Committee v. City of Seattle

• Court: Court of Appeals for the Ninth Circuit
• Decided: March 17, 2021
• Docket: 20-35472
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION MAR 17 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

THE ERISA INDUSTRY COMMITTEE, No. 20-35472

Plaintiff-Appellant, D.C. No. 2:18-cv-01188-TSZ

v. MEMORANDUM* CITY OF SEATTLE,

Defendant-Appellee.

Appeal from the United States District Court for the Western District of Washington Thomas S. Zilly, District Judge, Presiding

Argued and Submitted March 1, 2021 Seattle, Washington

Before: TASHIMA, RAWLINSON, and BYBEE, Circuit Judges.

The ERISA Industry Committee (ERIC) appeals the district court’s Rule

12(b)(6) dismissal of its action against the City of Seattle (the City). In its

complaint, ERIC asserted that the Employee Retirement Income Security Act of

1974 (ERISA) preempted Seattle Municipal Code (SMC) § 14.28, a health benefits

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ordinance requiring hotel employers and ancillary hotel businesses to provide

money directly to designated employees, or to include those employees in the

employers’ health benefit plan.

Contrary to ERIC’s argument, “state and local laws enjoy a presumption

against [ERISA] preemption when they clearly operate in a field that has been

traditionally occupied by the States.” Golden Gate Rest. Ass’n v. City & Cnty. of

San Francisco, 546 F.3d 639, 647 (9th Cir. 2008) (citation and internal quotation

marks omitted); see also Depot, Inc. v. Caring for Montanans, Inc., 915 F.3d 643,

666 (9th Cir. 2019). Even so, unlike the statute in Gobeille v. Liberty Mutual Ins.

Co., which required disclosure of health care information and payments, SMC §

14.28 does not “enter[] a fundamental area of ERISA regulation,” such as reporting

and disclosure of health care claims and payments. 136 S. Ct. 936, 940, 946

(2016); see also N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers

Ins. Co., 514 U.S. 645, 661 (1995) (“[N]othing in the language of [ERISA] or the

context of its passage indicates that Congress chose to displace general health care

regulation, which historically has been a matter of local concern.”) (citations

omitted).

ERISA preempts “any and all State laws insofar as they may now or

hereafter relate to any employee benefit plan.” 29 U.S.C. § 1144(a). We agree

2 with the district court that SMC § 14.28 does not relate to any employee benefit

plan in a manner that triggers ERISA preemption. The outcome of this case is

controlled by our decision in Golden Gate. See 546 F.3d at 661 (concluding that a

San Francisco ordinance requiring business to make certain minimum health care

expenditures on behalf of covered employees was not preempted by ERISA). As

in Golden Gate, SMC §14.28 does not “relate to” employers’ ERISA plans because

an employer “may fully discharge its expenditure obligations by making the

required level of employee health care expenditures, whether those expenditures

are made in whole or in part to an ERISA plan, or in whole or in part to [a third

party].” Id. at 655-56.

ERIC argues that Golden Gate is distinguishable because the San Francisco

ordinance did not include a direct payment option from the employer to the

employee. However, we expressly noted in Golden Gate that there was no ERISA

preemption “even if the payments are made by the employer directly to the

employees who are the beneficiaries of the putative plan.” Id. at 649 (internal

quotation marks omitted). Golden Gate relied for this proposition on Fort Halifax

Packing Co., Inc. v. Coyne, 482 U.S. 1, 3, 16 (1987), which explicitly addressed

direct payment from the employer to the employee. See Golden Gate, 546 F.3d at

649.

3 Because ERIC failed to distinguish SMC § 14.28 on any meaningful point

from the ordinance upheld in Golden Gate, dismissal in favor of the City was

consistent with our precedent. See 546 F.3d at 661.

AFFIRMED.