The opinion
United States District Court
District of Massachusetts
)
CSX TRANSPORTATION, INC., CSX )
INTERMODAL TERMINALS, INC., )
NATIONAL RAILROAD PASSENGER )
CORPORATION and SPRINGFIELD )
TERMINAL RAILWAY COMPANY, )
) Civil Action No.
Plaintiffs, ) 15-12865-NMG
)
v. )
)
MAURA HEALEY, )
)
Defendant, )
)
and )
)
BROTHERHOOD OF LOCOMOTIVE )
ENGINEERS AND TRAINMEN, ET AL. )
)
Intervenors. )
)
MEMORANDUM & ORDER
GORTON, J.
This case arises from allegations that the Massachusetts
Earned Sick Time Law (“ESTL”) at M.G.L. c. 149 § 148C, approved
by Massachusetts voters in 2014, is preempted by three federal
statutes.
Pending before the Court are three renewed cross-motions
filed by the plaintiffs, the defendant and the intervenors for
summary judgment on Count 1 which asserts that the ESTL is
expressly preempted by the Railroad Unemployment Insurance Act
(“RUIA”), 45 U.S.C. § 351, et seq. For the reasons that follow,
the motion for partial summary judgment by plaintiffs will be
allowed and the motions for partial summary judgment by
defendant and the intervening unions will be denied.
I. Background and Procedural History
Plaintiffs CSX Transportation, Inc., CSX Intermodal
Terminals, Inc., National Railroad Passenger Corporation d/b/a
Amtrak and Springfield Terminal Railway Company (collectively,
“CSX” or “plaintiffs”) are operators of rail transportation
systems and intermodal terminals located in Massachusetts. The
parties agree that all plaintiffs are “employers” within the
meaning of the RUIA and all individuals employed by them in
Massachusetts are “employees” and thus eligible for federal
statutory “sickness benefits” under the RUIA.
Defendant Maura Healey (“Healey” or “defendant”) is the
Attorney General of the Commonwealth of Massachusetts and is
named in her official capacity. As Attorney General, she is
charged with the rulemaking for, and enforcement of, the
purportedly preempted portions of the ESTL.
The intervening parties are the Transportation and
Mechanical Divisions of the International Association of Sheet
Metal, Air, Rail and Transportation Workers, the Brotherhood of
Locomotive Engineers and Trainmen, the International Brotherhood
of Electrical Workers, the National Conference of Firemen &
Oilers District of Local 32BJ, SEIU, the Brotherhood of Railroad
Signalmen and the Brotherhood of Maintenance of Way Employes
Division/IBT (collectively, “the union intervenors”). They are
the collective bargaining representatives for the employees who
would be affected by the relief sought by plaintiffs.
The parties agree that in November, 2014, Massachusetts
voters approved the Massachusetts Earned Sick Time Law at M.G.L.
c. 149, § 148C which requires certain employers to provide
“earned paid sick time” to qualifying employees in
Massachusetts. That law became effective on July 1, 2015.
Plaintiffs have not implemented or complied with the ESTL
because they believe that it is preempted by federal law.
Defendant has declined their request to “provide a permanent
commitment not to enforce” the ESTL against them.
Plaintiffs initiated this action by filing a complaint
against Healey and the Massachusetts Office of the Attorney
General in June, 2015 and an amended complaint naming Healey as
the sole defendant in November, 2015. Plaintiffs seek
declaratory judgments that the ESTL is preempted by the RUIA
(Count 1), the Railway Labor Act (“RLA”) at 45 U.S.C. § 151, et
seq. (Count 2) and the Employee Retirement Income Security Act
(“ERISA”) at 29 U.S.C. § 1140, et seq. (Count 3). Plaintiffs
also seek to enjoin Healey from enforcing or applying the ESTL
against them.
In February, 2016, this Court convened a scheduling
conference during which the parties agreed to bifurcate the
action and litigate the RUIA claim in Phase 1 and the RLA and
ERISA claims in Phase 2.
Plaintiffs moved for summary judgment on the RUIA claim in
March, 2016. The Court allowed the union intervenors to
participate in the action and move for summary judgment on the
RUIA claim in May, 2016. Defendant submitted a motion for
summary judgment on the same claim shortly thereafter. The
parties stipulated that there are no material facts in dispute.
The Court convened a hearing on those motions in July, 2016.
Later that month, this Court entered an order allowing
plaintiffs’ motion for summary judgment and denying the motions
for summary judgment of defendant and the union intervenors.
Defendant and the union intervenors appealed to the First
Circuit Court of Appeals (“the First Circuit”) in September,
2016. After briefing and argument, the First Circuit affirmed,
in part, vacated in part, and remanded the case for further
consideration. The parties filed renewed cross-motions for
summary judgment earlier this year and the Court convened a
hearing on those renewed cross-motions in July, 2018.
II. Motions for summary judgment
A. Legal standard
The role of summary judgment is “to pierce the pleadings
and to assess the proof in order to see whether there is a
genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d
816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc.,
895 F.2d 46, 50 (1st Cir. 1990)). The burden is on the moving
party to show, through the pleadings, discovery and affidavits,
“that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a).
A fact is material if it “might affect the outcome of the
suit under the governing law”. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). A genuine issue of material fact
exists where the evidence with respect to the material fact in
dispute “is such that a reasonable jury could return a verdict
for the nonmoving party.” Id.
If the moving party satisfies its burden, the burden shifts
to the non-moving party to set forth specific facts showing that
there is a genuine, triable issue. Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986). The Court must view the entire record in
the light most favorable to the non-moving party and make all
reasonable inferences in that party's favor. O'Connor v.
Steeves, 994 F.2d 905, 907 (1st Cir. 1993). Summary judgment is
appropriate if, after viewing the record in the non-moving
party's favor, the Court determines that no genuine issue of
material fact exists and that the moving party is entitled to
judgment as a matter of law.
B. Application
1. Express preemption
The Supremacy Clause of the United States Constitution
provides that
the laws of the United States . . . shall be the supreme
law of the land . . . any Thing in the Constitution or
laws of any State to the contrary notwithstanding.
U.S. CONST. art. VI, cl. 2. State laws which conflict with
federal law are preempted and “without effect”. Altria Grp.,
Inc. v. Good, 555 U.S. 70, 76 (2008).
Congressional purpose is the “ultimate touchstone” in every
preemption case. Id. A court considering the preemptive effect
of an express preemption clause in a federal statute must assess
the substance and scope of Congress’s displacement of state law,
id., in order to identify the matters that it did and did not
intend to preempt, Lorillard Tobacco Co. v. Reilly, 533 U.S.
525, 541 (2001). The inquiry commences with the statutory
language “which necessarily contains the best evidence of
Congress’ pre-emptive intent”. CSX Transp., Inc. v. Easterwood,
507 U.S. 658, 664 (1993). The court may also consider the
purpose, history and surrounding statutory scheme of the express
preemption clause. Mass. Delivery Ass’n v. Coakley, 769 F.3d 11,
17 (1st Cir. 2014).
If the preemption inquiry implicates the historic police
powers of the state or a field traditionally occupied by the
states, the court must apply the presumption against preemption
which can be overcome by a finding of clear and unambiguous
congressional intent to preempt state law. Altria, 555 U.S. at
77.
1. Railroad Unemployment Insurance Act
Congress enacted the first version of the Railroad
Unemployment Insurance Act in 1938 to establish a system of
unemployment insurance for covered employees. R.R. Ret. Bd. v.
Duquesne Warehouse Co., 326 U.S. 446, 448 (1946). It amended
the statute in 1946 to provide qualified employees with
“unemployment benefits” and “sickness benefits” which would both
be administered by the Railroad Retirement Board (“RRB”), § 352,
and funded by contributions from employers, § 358.
The amended statute defines “benefits” as monetary payments
to an employee with respect to his or her unemployment or
sickness and sets the daily benefits rate at 60% of his or her
daily rate of compensation at the last position held.
§ 351(l)(1)(benefits); § 352(a)(2)(daily benefit rate). A
qualified employee is entitled to “sickness benefits” which are
benefits . . . for each day of sickness after the 4th
consecutive day of sickness in a period of continuing
sickness[.]
§ 352(a)(1)(B)(i).
A “period of continuing sickness” is a period of
1) consecutive days of sickness or 2) successive days of
sickness “due to a single cause without interruption of more
than 90 consecutive days which are not days of sickness.”
§ 352(a)(1)(B)(iii).
A “day of sickness” is a day on which the employee cannot
work due to a physical, mental, psychological, nervous or
pregnancy-related injury, sickness or condition and does not
accrue or receive “remuneration”. § 351(k). The term
“remuneration” 1) means “pay for services for hire”, 2) includes
earned income other than services for hire if the employee
accrued it with respect to a particular day or days and
3) excludes money payments received pursuant to non-governmental
plans for unemployment, maternity or sickness insurance.
§ 351(j). An employee does not experience a “day of sickness”
if he or she receives or will receive unemployment, maternity or
sickness benefits under any other unemployment, maternity or
sickness compensation law. § 354(a-1)(ii).
Section 363(b) of the RUIA contains an express preemption
provision. The first two sentences of § 363(b), titled “Effect
on State unemployment compensation laws”, state that:
Congress makes exclusive provision for . . . the payment
of sickness benefits for sickness periods after [1947],
based upon employment (as defined in this chapter). No
employee shall have or assert any right to . . . sickness
benefits under a sickness law of any State with respect
to sickness periods occurring after [1947], based upon
employment (as defined in this chapter).
§ 363(b). The statute defines “employment” to mean
“service performed as an employee”. § 351(g).
The third sentence in § 363(b) specifies that:
Congress finds and declares that by virtue of the
enactment of this chapter, the application of . . . State
sickness laws after [1947], to such employment, except
pursuant to [§ 362(g)], would constitute an undue burden
upon, and an undue interference with the effective
regulation of, interstate commerce.
§ 363(b). Section 362(g) sets forth a system of “mutual
reimbursement [of] . . . [b]enefits also subject to a State law”
under which the RRB and states can reimburse each other for any
unemployment or sickness benefits paid to qualifying employees
under the RUIA or state unemployment or sickness compensation
laws for “services for hire other than employment”. § 362(g).
2. Massachusetts Earned Sick Time Law
The Massachusetts Earned Sick Time Law entitles qualified
employees who work in the Commonwealth to accrue “earned sick
time” at the rate of one hour for every 30 hours worked and to
use that time 1) to care for themselves or their family members,
2) to attend their or their family members’ routine medical
appointments or 3) to address the psychological, physical or
legal effects of domestic violence. M.G.L. c. 149,
§§ 148C(b),(c),(d)(1). Qualified employees can earn and use up
to 40 hours of either “earned paid sick time” or “earned unpaid
sick time” every calendar year. §§ 148C(d)(4),(6). Covered
employers must compensate qualified employees for “earned paid
sick time” at their regular hourly rates of compensation. §
148C(a).
3. First Circuit decision
The First Circuit affirmed, in part, this Court’s decision,
holding that the RUIA preempts subsection (c)(2) of the ESTL as
applied to interstate rail carriers that employ workers in
Massachusetts. The case was remanded for this Court to
determine, in the first instance, whether any or all other
sections of the ESTL might be applied to such employers. The
First Circuit raised three potential questions that this Court
may need to consider in order to resolve that issue on remand:
(1) are any of the remaining sections of the ESTL themselves
preempted by the RUIA, (2) are any remaining sections that are
not so preempted nevertheless preempted by either the RLA or
ERISA as alleged in the complaint and (3) should any sections of
the ESTL be preserved by severing the preempted sections as
applied to interstate rail carriers?
4. Scope of RUIA preemption
Plaintiffs assert that the text of the preemption clause is
clear that the RUIA preempts all aspects of the ESTL including
subsections (c)(1), (c)(3) and (c)(4). They contend that the
ESTL defines the entire paid-leave benefit as “sick time”,
pointing first to the title of the statute’s subsection which is
“Earned sick time”. Plaintiffs also stress that the statute
allows a covered employee to earn and use a total of 40 hours
per year and that the block of 40 hours is not apportioned among
the designated purposes in the statute but rather is a block of
paid leave which is a “sickness benefit”. Finally, plaintiffs
contend that the RUIA was intended to create a uniform federal
scheme and that allowing new variations of sick leave that a
state may devise to escape the preemptive scope of the RUIA
would undermine that purpose.
Defendant and the union intervenors respond that
subsections (c)(1), (c)(3) and (c)(4), which require paid time
off for purposes other than an employee’s own illness, do not
conflict with the stated purposes the RUIA and are not preempted
by that statute. They suggest that the other provisions of the
ESTL, including addressing the effects of domestic violence and
family care, are so far outside the RUIA’s scope that preempting
them would broaden the RUIA beyond what Congress intended.
Plaintiffs further submit that the legislative history and
purpose of the statute confirm that Congress intended to preempt
state laws such as the ESTL. They offer statements made by
union representatives and an RRB Chairman during congressional
hearings, as well as excerpts from the Senate Report on the 1946
amendments, to show the RUIA was intended to address the need
for “uniform federal regulation of the national railroad system,
especially with respect to employment benefits” because labor
agreements in the transportation industry frequently cut across
state lines. Plaintiffs claim that Congress and the railroads
entered into an “implicit labor-management agreement”, as
reflected in the RUIA preemption clause, that the railroads
would provide federal unemployment and sickness benefits but
need not provide state-mandated benefits.
After careful consideration of the arguments presented, the
Court concludes that the statutory text of the RUIA reflects a
congressional intent to preempt the entirety of the ESTL’s
“earned sick time” scheme.
The first two sentences of the RUIA preemption provision in
§ 363(b) indicate that Congress, in enacting the RUIA, made
“exclusive provision” for the payment of “sickness benefits for
sickness periods” and prohibited employees from asserting rights
to “sickness benefits under a sickness law of any State with
respect to sickness periods”. § 363(b). Given that preemption
provision, the Court must determine whether the “earned sick
time” is a “sickness benefit” in cases where the sick time is
earned for situations other than personal sickness (i.e., for
family sickness, medical appointments or domestic violence).
Section 363(b) of the RUIA is clear: Congress intended RUIA to
serve as the “exclusive” source of all sickness benefits for
railroad employees and to preclude the employees from claiming
rights to sickness benefits under any state sickness law.
The RUIA refers generally to “sickness benefits” and
“sickness law”, evincing the intent of Congress to apply the
express preemption provision to all state sickness benefits and
sickness laws, not just state sickness benefits which replicate
the RUIA benefit scheme. The language of the preemption
provision disclaims any intent to restrict the scope of
preemption to state benefit schemes that mirrored the RUIA. See
CSX Transp. v. Healey, 861 F.3d 276, 284 (1st Cir. 2017)
(rejecting appellant’s argument that RUIA preemption applies
only to state benefits that are similar or comparable to the
kind provided by the RUIA and making clear that “there is no
anchor in the text of the preemption clause for limiting in this
manner the type of state-mandated sickness benefits subject to
preemption”).
The plain reading of the ESTL confirms that the “earned
sick time” provided for in subsection § 148C(c) comes within the
RUIA’s preemptive scope. In its definition section, the ESTL
delineates the meaning of “earned sick time” as
the time off from work that is provided by an employer to
an employee, whether paid or unpaid, as computed under
subsection (d) that can be used for the purposes described
in subsection (c).
§ 148C. The statute provides for the provision of “up to 40
hours of earned paid sick time” in a calendar year, and does not
distinguish or apportion the hours between the kinds of sickness
benefits described in § 148C(c). The state legislature’s
determination that domestic violence and care for family members
may fall within the scope of “earned sick time” is not
inconsistent with the RUIA’s preemption of any and all state
sickness laws. In short, the breadth of the state law does not
save it from RUIA preemption. Such a reading would allow a
state to legislate creatively around the RUIA and thereby thwart
the objective of Congress to create a uniform federal scheme of
sickness benefits for railroad workers.
The defendant and union-intervenors’ reliance on National
Railroad Passenger Corp. v. Su, 289 F. Supp. 3d 1130 (E.D. Cal.
2017) is unpersuasive. This Court disagrees with the conclusion
of that court that the RUIA preemption provision “does not
clearly define the type of sickness provisions RUIA preempts”
which led that court to rely on the legislative history to
conclude that RUIA preemption did not apply to sickness benefits
used for care of family members or seeking protection from
domestic violence. Id. at 1137-38. Where the provisions of the
statute are clear, legislative history cannot undermine the
meaning of unambiguous statutory text. In re Larson, 513 F.3d
325, 329 (1st Cir. 2008). The Court in the Su decision limited
RUIA’s preemption provision to what it described as a more
“logical reading” of preempting “the general type of sickness
laws Congress contemplated when adopting RUIA’s preemption
provision”. Su, 289 F. Supp. 3d at 1136.
Reference to the purpose of the statute confirms the
breadth of the express preemption provision. The RUIA was
enacted to ensure “a uniform federal scheme” in the railroad
industry and to protect interstate rail regulation from the
burdens of state sickness law. See H.R. Rep. No. 75-2668 at 1
(1938); Healey, 861 F.3d at 282. The First Circuit expressly
rejected a reading of the statute that would limit RUIA
preemption to state benefits that are similar or comparable to
the kind provided by the RUIA. Healey, 861 F.3d at 284
(“[Appellants] argue . . . that RUIA preemption applies only to
state benefits that are similar or comparable to, or of the type
provided by the RUIA. Of course, in making this version of
their argument, the appellants and their amicus are adrift.”
(internal alternations and quotation marks omitted)).
A broad construction of the preemption provision of the
RUIA is necessary to give effect to the congressional intent to
create uniformity. Morales v. Trans World Airlines, Inc., 504
U.S. 374, 378 (1992). To construe the RUIA preemption provision
narrowly would render it unworkable because states would be free
to substitute directly their own policies creating “precisely
the effect the preemption clause seeks to avoid: a patchwork of
state . . . laws, rules and regulations”. Tobin v. Federal Exp.
Corp., 775 F.3d 448, 455 (1st Cir. 2014) (citing Rowe v. New
Hampshire Motor Transport Ass’n, 552 U.S. 364, 372 (2008)
(internal quotation marks omitted)). Just as the court held in
Su, defendant and the union intervenors rely on a Senate Report
to contend that the RUIA does not apply outside the context of
benefits for employees’ personal sickness. Su, 289 F. Supp. 3d
at 1137 (citing S. Rep. No. 79-1710 at 26 (1946) (clarifying
that the goal of RUIA preemption was to protect employers from
“duplicate liability”)). Defendant and the union intervenors
assert that Congress did not intend to preempt all state
sickness benefits but only those that are similar to the RUIA
benefits. The clear text of the preemption clause is to the
contrary, however, because Congress chose to refer broadly to
“sickness benefits”, not limiting the scope to personal sickness
benefits.
The clear text of the preemption provision and the
congressional purpose support a determination that the RUIA
preempts the entire state earned sick time scheme which governs
“earned sick time” and is not limited to time that can be used
exclusively for an employee’s personal sickness. Because the
Court finds that the RUIA preempts the remaining sections of the
ESTL, it declines to reach the dormant commerce clause and
severability issues raised as “potential questions” by the First
Circuit. Accordingly, plaintiffs’ motion for summary judgment
on its RUIA claim will be allowed and the cross-motions for
summary judgment of defendant and the union intervenors will be
denied.
ORDER
For the foregoing reasons, plaintiffs’ renewed motion for
summary judgment on Count 1 (Docket No. 90) is ALLOWED,
defendant’s renewed cross-motion for summary judgment on Count 1
(Docket No. 93) is DENIED and the union intervenors’ renewed
cross-motion for summary judgment on Count 1 (Docket No. 95) is
DENIED.
So ordered.
/s/ Nathaniel M. Gorton_____
Nathaniel M. Gorton
United States District Judge
Dated August 10, 2018