Amicus Curiae Brief — The ERISA Industry Committee, Petitioner v. City of Seattle, Washington

No. 21-1019

IN THE

Supreme Court of the United States

________________________________________

THE ERISA INDUSTRY COMMITTEE,

Petitioner,

v.

CITY OF SEATTLE,

Respondent.

__________________________________________________________________________

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

_________________________________________________________________________

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA, BUSINESS

ROUNDTABLE, AND THE NATIONAL

ASSOCIATION OF MANUFACTURERS AS AMICI

CURIAE IN SUPPORT OF PETITIONER

_______________________________________________________________________

PAUL LETTOW

JANET GALERIA

U.S. CHAMBER LITIGATION

CENTER

1615 H Street, N.W.

Washington, D.C. 20062

ERICA KLENICKI

NAM LEGAL CENTER

733 Tenth Street, N.W.

Suite 700

Washington, D.C. 20001

MEAGHAN VERGOW

Counsel of Record

DEANNA M. RICE

O’MELVENY & MYERS LLP

1625 Eye Street, N.W.

Washington, D.C. 20006

(202) 383-5300

mvergow@omm.com

LIZ DOUGHERTY

BUSINESS ROUNDTABLE

1000 Maine Avenue, S.W.

Washington, D.C. 20024

Attorneys for Amici Curiae

i

TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE .............................. 1

INTRODUCTION AND SUMMARY OF

ARGUMENT................................................... 3

ARGUMENT ............................................................. 7

I.

The Decision Below Departs From

Established ERISA Preemption

Principles Embodied In This Court’s

Precedent. .......................................................... 7

II.

The Splintered Regulatory Regime

Endorsed By The Ninth Circuit Creates

Administrative Burdens And

Undermines The Provision of Employee

Benefits. ........................................................... 13

CONCLUSION ........................................................ 18

ii

TABLE OF AUTHORITIES

Page(s)

CASES

Aetna Health Inc. v. Davila,

542 U.S. 200 (2004).............................................. 4

Boggs v. Boggs,

520 U.S. 833 (1997).............................................. 2

Curtiss–Wright Corp. v. Schoonejongen,

514 U.S. 73 (1995)................................................ 7

Dialysis Newco, Inc. v. Cmty. Health

Sys. Grp. Health Plan,

938 F.3d 246 (5th Cir. 2019).............................. 12

Egelhoff v. Egelhoff ex rel. Breiner,

532 U.S. 141 (2001)..................................... passim

Fort Halifax Packing Co. v. Coyne,

482 U.S. 1 (1987).........................................4, 9, 10

Gobeille v. Liberty Mut. Ins. Co.,

577 U.S. 312 (2016)..................................... passim

Ingersoll–Rand Co. v. McClendon,

498 U.S. 133 (1990).............................................. 8

Merit Constr. All. v. Quincy,

759 F.3d 122 (1st Cir. 2014) ....................... passim

Metro. Taxicab Bd. of Trade v. N.Y.C.,

633 F. Supp. 2d 83 (S.D.N.Y. 2009) .................... 5

N.Y. State Conf. of Blue Cross & Blue

Shield Plans v. Travelers Ins. Co.,

514 U.S. 645 (1995).............................................. 8

Pharm. Care Mgmt. Ass’n v. Wehbi,

18 F.4th 956 (8th Cir. 2021) .............................. 12

Puerto Rico v. Franklin Cal. Tax-Free

Tr.,

579 U.S. 115 (2016).......................................12, 13

iii

TABLE OF AUTHORITIES

(continued)

Page(s)

Retail Indus. Leaders Ass’n v. Fielder,

475 F.3d 180 (4th Cir. 2007)...............5, 10, 12, 13

Retail Indus. Leaders Ass’n v. Suffolk

Cnty.,

497 F. Supp. 2d 403 (E.D.N.Y. 2007) .................. 5

Rutledge v. Pharm. Care Mgmt. Ass’n,

141 S. Ct. 474 (2020)............................................ 7

Shaw v. Delta Air Lines, Inc.,

463 U.S. 85 (1983)................................................ 8

U.S. Chamber of Com. v. Whiting,

563 U.S. 582 (2011)............................................ 13

STATUTES

29 U.S.C. § 1144(a).................................................... 7

29 U.S.C. § 1144(c)(1) ................................................ 8

29 U.S.C. § 1144(c)(2) ................................................ 8

Albuquerque, N.M. Mun. Code

§ 13-12-3(b)......................................................... 15

Berkeley, Cal. Mun. Code Ch. 13.27 ...................... 13

Berkeley, Cal. Mun. Code Ch. 13.27.045 ............... 14

Berkeley, Cal. Mun. Code

Ch. 13.27.045(A) ................................................ 14

Berkeley, Cal. Mun. Code

Ch. 13.27.050(A) ................................................ 14

Berkeley, Cal. Mun. Code

Ch. 13.27.050(D) ................................................ 14

Bernalillo Cnty., N.M. Cnty. Code

§ 2-220(d) ............................................................ 15

Marin Cnty., Cal. Admin. & Pers. Code

§ 2.50.050 ......................................................13, 14

iv

TABLE OF AUTHORITIES

(continued)

Page(s)

Oakland, Cal. Mun. Code Ch. 2.28 ......................... 13

Oakland, Cal. Mun. Code Ch. 2.28.020 .................. 14

Oakland, Cal. Mun. Code Ch. 2.28.030(C) ............. 14

Oakland, Cal. Mun. Code Ch. 5.93 ......................... 13

Richmond, Cal. Mun. Code

Ch. 7.108.030(d) ................................................. 14

Richmond, Cal. Mun. Code

Ch. 7.108.040(a)(4)............................................. 14

Richmond, Cal. Mun. Code

Ch. 7.108.040(A)(5) ............................................ 14

S.F., Cal. Admin. Code § 12Q ................................. 13

S.F., Cal. Admin. Code § 14 .................................... 13

S.F., Cal. Mun. Code § 14.3(f) ................................. 14

San Leandro, Cal. Mun. Code § 1-6-625................. 14

SMC 14.28.025 ........................................................ 17

SMC 14.28.030 ........................................................ 11

SMC 14.28.030.A ....................................................... 4

SMC 14.28.030.B ....................................................... 4

SMC 14.28.060 ........................................................ 11

SMC 14.28.060.B ....................................................... 9

SMC 14.28.110 ........................................................ 11

Sonoma, Cal. Mun. Code § 2-377 ............................ 14

OTHER AUTHORITIES

City of S.F. Office of Labor Standards

Enforcement, Health Care Security

Ordinance (updated May 4, 2021),

https://sfgov.org/olse//health-caresecurity-ordinance-hcso ..................................... 14

v

TABLE OF AUTHORITIES

(continued)

Page(s)

Federal Reserve Bank of St. Louis,

Compensation of Employees (Dec.

2021), Federal Reserve Economic

Data, https://fred.stlouisfed.org/

graph/?g=DCNH .................................................. 3

Kaiser Family Found., Employer Health

Benefits: 2021 Annual Survey (Nov.

2021), https://files.kff.org/attachment/

Report-Employer-Health-Benefits2021-Annual-Survey.pdf...............................16, 17

Kaiser Family Foundation, Health

Insurance Coverage of the Total

Population (2020),

https://www.kff.org/other/stateindicator/health-insurance-coverageof-the-total-population-cps/ ................................. 3

Katherine Baicker & Amitabh Chandra,

The Labor Market Effects of Rising

Health Insurance Premiums, Nat’l

Bureau Econ. Rsch., NBER Working

Paper No. 11160 (Feb. 2005), https://

www.nber.org/papers/w11160 ........................... 17

U.S. Bureau of Labor Statistics,

Employer Costs for Employee

Compensation (Sept. 2021),

https://www.bls.gov/

news.release/pdf/ecec.pdf ..................................... 3

U.S. Bureau of Labor Statistics,

Employment Benefits in the United

States (Sept. 2021),

https://www.bls.gov/news.

release/pdf/ebs2.pdf ............................................. 3

U.S. Census Bureau, City and Town

Population Totals: 2010-2019,

Incorporated Places: 2010-2019

vi

TABLE OF AUTHORITIES

(continued)

Page(s)

(Cal.), https://www.census.gov/

data/tables/time-series/demo/popest/

2010s-total-cities-and-towns.html .................... 16

U.S. Census Bureau, City and Town

Population Totals: 2010-2019,

Incorporated Places: 2010-2019

(Wash.), https://

www.census.gov/data/tables/timeseries/demo/popest/2010s-totalcities-and-towns.html ........................................ 16

1

INTEREST OF AMICI CURIAE 1

The Chamber of Commerce of the United States

of America (“Chamber”) is the world’s largest

business federation. It represents approximately

300,000 direct members and indirectly represents

the interests of more than 3 million companies and

professional organizations of every size, in every

industry sector, and from every region of the

country. An important function of the Chamber is to

represent the interests of its members in matters

before Congress, the Executive Branch, and the

courts. To that end, the Chamber regularly files

amicus briefs in cases that raise issues of concern to

the nation’s business community.

The Business Roundtable is an association of

chief executive officers of leading U.S. companies

with over sixteen million employees and $7 trillion

in annual revenues. The association was founded on

the belief that businesses should play an active and

effective role in the formation of public policy.

The National Association of Manufacturers

(“NAM”) is the largest manufacturing association in

1 Pursuant to Rule 37.6, counsel for amici curiae states that no

counsel for a party authored this brief in whole or in part, and

no counsel or party made a monetary contribution intended to

fund the preparation or submission of this brief. No person or

entity other than amici curiae, their members, or their counsel

has made a monetary contribution to the preparation or submission of this brief. As required by Rule 37.2, counsel of record for all parties received notice of amici curiae’s intent to file

this brief at least ten days before the due date. The parties

have provided their written consent to the filing of this brief.

2

the United States, representing small and large

manufacturers in every industrial sector and in all

50 states. Manufacturing employs more than 12.5

million men and women, contributes $2.57 trillion to

the U.S. economy annually, has the largest economic

impact of any major sector, and accounts for nearly

two-thirds of all private-sector research and

development in the nation. The NAM is the voice of

the manufacturing community and the leading

advocate for a policy agenda that helps

manufacturers compete in the global economy and

create jobs across the United States. The NAM

regularly submits amicus briefs in cases presenting

issues of importance to the manufacturing

community.

Amici frequently participate in cases that bear on

the sustainability of the health and retirement

benefit plans that private employers provide for

millions of Americans and their families. This is

such a case.

The decision below sanctions a

patchwork system of local regulation in square

conflict with ERISA’s expansive preemption

provision and its purpose: to promote the

establishment of employer-sponsored benefit plans

through an assurance of cohesive administration.

Given “the centrality of pension and welfare plans in

the national economy, and their importance to the

financial security of the Nation’s work force,” Boggs

v. Boggs, 520 U.S. 833, 839 (1997), amici and their

members have a strong interest in ensuring that

lower courts apply ERISA’s express preemption

provision consistent with its text and the precedents

of this Court.

3

INTRODUCTION AND

SUMMARY OF ARGUMENT

Over half of all Americans receive healthcare

coverage through an employer, 2 and a similar

proportion of private-sector workers participate in

an employer-sponsored retirement plan. 3 Employers

contribute trillions of dollars to ERISA-governed

benefit plans every year. 4 Their ability to do so

depends in substantial part on a legal framework

that “minimizes administrative and financial

burdens,” Gobeille v. Liberty Mut. Ins. Co., 577 U.S.

312, 321 (2016) (cleaned up), freeing up resources for

the actual provision of benefits.

The Seattle law at issue here requires covered

employers (in the hotel business, generally speaking)

to make minimum monthly healthcare expenditures

on behalf of employees who work in Seattle “for an

2 Kaiser Family Foundation, Health Insurance Coverage of the

Total Population (2020), https://www.kff.org/other/stateindicator/health-insurance-coverage-of-the-total-populationcps/.

3 U.S. Bureau of Labor Statistics, Employment Benefits in the

United States, at 9 (Sept. 2021), https://www.bls.gov/news.

release/pdf/ebs2.pdf.

4 Benefits contributions constitute 30.9 percent of the total

compensation paid by private employers in the United States.

U.S. Bureau of Labor Statistics, Employer Costs for Employee

Compensation, at 4 (Sept. 2021), https://www.bls.gov/

news.release/pdf/ecec.pdf. As of December 2021, U.S. private

employers were paying $9.2 trillion in wages and salary disbursements annually. Federal Reserve Bank of St. Louis,

Compensation of Employees (Dec. 2021), Federal Reserve Economic Data, https://fred.stlouisfed.org/graph/?g=DCNH.

4

average of 80 hours or more per month” and are not

managers, supervisors, or “confidential employee[s].”

SMC

14.28.030.A,

14.28.030.B.

Municipal

ordinances like this seek to channel employeebenefit resources to particular localities, but a

system of local patronage comes at a cost: it diverts

benefits away from workers in other communities

and reduces the total pool of funds available for

benefits by forcing plans to dedicate money and

resources to tracking and complying with a collage of

complex and potentially inconsistent local laws,

rather than providing benefits. As this Court has

recognized, excessive administrative burdens can

cause “employers with existing plans to reduce

benefits” and “those without such plans to refrain

from adopting them.” Fort Halifax Packing Co. v.

Coyne, 482 U.S. 1, 11 (1987). Those costs are

“ultimately borne by the beneficiaries.” Egelhoff v.

Egelhoff ex rel. Breiner, 532 U.S. 141, 150 (2001).

Congress anticipated exactly this problem and

solved it with an express preemption provision that

ensures employers do not need “to master the

relevant laws of 50 States”—much less thousands of

municipalities—in

providing

employees

with

healthcare and retirement benefits. Id. at 149–50.

Indeed, the “central design of ERISA” is “to provide a

single

uniform

national

scheme

for

the

administration of ERISA plans without interference

from laws of the several States.” Gobeille, 577 U.S.

at 326–27; see Aetna Health Inc. v. Davila, 542 U.S.

200, 208 (2004) (Congress intended that regulation

of employee benefit plans “would be exclusively a

federal concern” (cleaned up)).

5

A local law mandating the payment of particular

benefits and a complex administrative apparatus to

support it is clearly preempted by ERISA, and two

courts of appeals have found it so: The First and

Fourth Circuits have held that similar laws are

preempted

under

well-established

ERISA

preemption principles. See Merit Constr. All. v.

Quincy, 759 F.3d 122, 130–31 (1st Cir. 2014); Retail

Indus. Leaders Ass’n v. Fielder, 475 F.3d 180, 190

(4th Cir. 2007). 5 The Ninth Circuit rule stands in

conflict with those decisions, and it is incorrect.

The Seattle ordinance plainly “relates to” ERISA

plans, because employers must either modify their

existing ERISA plans or create a new ERISA plan to

ensure compliance. And even if every existing

ERISA plan happened to perfectly comply with the

ordinance’s requirements, the ordinance still would

implicate established preemption principles, by

requiring that employers test the sufficiency of their

plans against the idiosyncratic mandates of the

locality. The national uniformity Congress sought to

create through ERISA “is impossible … if plans are

subject to different legal obligations in different

States”; provisions like the ordinance impermissibly

“interfere[]

with

nationally

uniform

plan

administration.” Egelhoff, 532 U.S. at 148.

5 Although the Second Circuit has not reached the issue, dis-

trict courts within the Second Circuit have followed the Fourth

Circuit’s decision in Fielder. See Retail Indus. Leaders Ass’n v.

Suffolk Cnty., 497 F. Supp. 2d 403, 417 (E.D.N.Y. 2007); see

also Metro. Taxicab Bd. of Trade v. N.Y.C., 633 F. Supp. 2d 83,

95 (S.D.N.Y. 2009).

6

The Ninth Circuit’s contrary conclusion is

irreconcilable with this Court’s ERISA preemption

precedents. And the faulty decision is based on

application of a presumption against preemption

that this Court has explained does not apply to

statutes, like ERISA, that include an express

preemption provision.

If allowed to stand, the Ninth Circuit’s ruling

would invite significant negative consequences for

plan sponsors and administrators and, ultimately,

employees and other plan beneficiaries. Already,

numerous municipalities within the Ninth Circuit

are experimenting with ways to channel employee

benefit resources to their own residents, enacting

laws with varied minimum benefit rates, timelines,

definitions,

and

recordkeeping

requirements.

Localities outside the Ninth Circuit have begun to

adopt similar rules, with still more expressing

interest in doing so. The existence of a circuit

conflict creates uncertainty about how the courts of

appeals that have not yet squarely decided the issue

will rule, placing employers and plan administrators

in the difficult position of having to guess at their

compliance obligations.

Even within the Ninth Circuit alone, the

proliferation of local laws mandating benefit

structures is unworkable. Numerous ordinances

with varied requirements are already in place, and

there is nothing to stop additional municipalities

from adopting them. It is beneficiaries who suffer as

the burdens of compliance increase and resources

are diverted from benefits to skyrocketing

administrative costs.

7

The Court should grant the petition to correct the

Ninth Circuit’s distortion of ERISA preemption

principles and ensure that ERISA’s preemption

provision continues to serve its core purpose of

“minimizing the administrative and financial burden

of complying with conflicting directives and ensuring

that plans do not have to tailor substantive benefits

to the particularities of multiple jurisdictions.”

Rutledge v. Pharm. Care Mgmt. Ass’n, 141 S. Ct.

474, 480 (2020) (cleaned up).

ARGUMENT

I.

The Decision Below Departs From

Established ERISA Preemption Principles

Embodied In This Court’s Precedent.

ERISA does not require employers to provide any

specific employee benefits, but leaves them free, “for

any reason at any time, to adopt, modify, or

terminate welfare plans.” Curtiss–Wright Corp. v.

Schoonejongen, 514 U.S. 73, 78 (1995). Because the

provision of benefits is left to individual employers’

discretion, Congress recognized in enacting ERISA

that a homogenous and predictable regulatory

system would be necessary to encourage employers

to establish and maintain robust plans.

To achieve that system, Congress included in

ERISA an express preemption provision, which

states that 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). 6 The

6 ERISA defines the term “State” to include subdivisions and

agencies of a State and defines “State law” to include “rules,

8

language of this preemption provision is “clearly

expansive.” N.Y. State Conf. of Blue Cross & Blue

Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655

(1995). It “was intended to ensure that plans and

plan sponsors would be subject to a uniform body of

benefits law,” with the goal of “minimiz[ing] the

administrative and financial burden of complying

with conflicting directives” and thereby avoiding

“inefficiencies” that “could work to the detriment of

plan beneficiaries.”

Ingersoll–Rand Co. v.

McClendon, 498 U.S. 133, 142 (1990).

As this Court has long instructed, a law “relates

to” an ERISA plan within the meaning of § 1144(a)

“‘if it has a connection with or reference to such a

plan.’” Egelhoff, 532 U.S. at 147 (quoting Shaw v.

Delta Air Lines, Inc., 463 U.S. 85, 97 (1983)). This

formulation provides two independently sufficient

paths to preemption: the “connection with” and

“reference to” tests.

A municipal ordinance

requiring the ongoing payment of specified

benefits—through a company’s ERISA plan or in

cash—“relates to” an ERISA plan under both paths,

and the Ninth Circuit’s contrary holding below is

incorrect.

1. Where a state or local law “acts immediately

and exclusively upon ERISA plans or where the

existence of ERISA plans is essential to the law’s

operation, that ‘reference’ will result in preemption.” Gobeille, 577 U.S. at 319–20 (cleaned up).

The Seattle ordinance makes exactly such an

regulations, or other State action having the effect of law.” 29

U.S.C. § 1144(c)(1) and (2).

9

impermissible “reference to” ERISA plans, because it

requires employers either to modify existing ERISA

plans or to create a new ERISA plan to meet its

requirements.

Specifically, Seattle offers covered employers

three options for complying with the ordinance: they

can (1) pay the “additional compensation” required

by the ordinance to a third party, such as an

insurance carrier, “for the purpose of providing

healthcare services to the employee,” (2) make

sufficient

“[a]verage

per-capita

monthly

expenditures for healthcare services” through their

existing benefits plans, or (3) pay the additional

compensation directly to a qualifying employee.

SMC 14.28.060.B. The first two options require an

employer to modify its existing ERISA plan, and the

third option requires an employer to create a new

ERISA plan.

An employer opting for Seattle’s third approach—

paying

additional compensation directly

to

qualifying employees—could implement it only by

adopting a detailed and continuing administrative

regime, which is the hallmark of an ERISA “plan.”

The benefits required by the ordinance are periodic

in nature (rather than one-off) and calculating them

requires application of the ordinance’s complex rules.

See Pet. 30–31 (detailing the complexity of the

ordinance’s criteria for eligibility, calculation of

benefit amounts, and recordkeeping); cf. Fort

Halifax, 482 U.S. at 11–12 (upholding statute

requiring a non-discretionary, one-time severance

payment to employees in the event of a plant closing,

10

which “require[d] no administrative scheme

whatsoever to meet the employer’s obligation”).

The First and Fourth Circuits correctly

recognized that the same practical implications of an

“or pay” option make it preempted by ERISA. See

Merit Constr. All., 759 F.3d at 130 (ordinance would

require employer to either “modify [its existing

ERISA benefits] program to provide apprentices on

Quincy-based projects with special benefits” or

“establish and coordinate a separate plan into which

such apprentices would be funneled”); Fielder, 475

F.3d at 190 (“[A] grant of a benefit that occurs

periodically and requires the employer to maintain

some ongoing administrative support generally

constitutes a ‘plan.’”). As this Court has recognized,

“whether a State requires an existing plan to pay

certain benefits, or whether it requires the

establishment of a separate plan where none existed

before, the problem is the same.” Fort Halifax, 482

U.S. at 13.

2. Even aside from the fact that compliance with

the “or pay” option requires establishment of an

ERISA plan, the Seattle ordinance is also preempted

because it has an impermissible “connection with”

ERISA plans.

Requirements for recordkeeping, reporting, and

disclosure are “fundamental components of ERISA’s

regulation of plan administration,” Gobeille, 577 U.S.

at 323, into which no locality may intrude. But the

ordinance grafts a detailed compliance regime on top

of ERISA’s nationally uniform requirements.

Specifically, covered employers must determine

11

which of their employees are covered by the

ordinance; calculate the amount of qualifying health

expenditures made for each employee under their

existing ERISA plans; compare those expenditures

to the minimums set by the ordinance (which turn

on whether the employee has a qualifying spouse,

domestic partner, or other dependents); and make

additional payments to employees who did not

receive the qualifying minimum expenditures

(unless those employees opt out of the program in

qualifying circumstances). SMC 14.28.030, SMC

14.28.060. Employers must then keep three years of

records detailing “each required healthcare

expenditure made each month to or on behalf of each

current and former employee,” copies of executed

waiver forms from otherwise eligible employees, and

any “other records that are [determined by the

Director of the Office of Labor Standards to be]

material and necessary to effectuate [the

ordinance].” SMC 14.28.110.

As the Court explained in Egelhoff, a state or

local requirement “interferes with nationally

uniform plan administration” when it requires plans

to look beyond the plan document and the

procedures used to administer the plan elsewhere to

determine what benefits are owed in a particular

jurisdiction, and to whom.

532 U.S. at 148.

Moreover, beyond the individual impact of any such

law, the existence of a scheme permitting states and

localities to create and enforce their own benefit

rules would require employers to “maintain a

familiarity with the laws of all 50 States,” including

“changes in the interpretations of those statutes by

12

state courts.”

Id. at 151.

That result is

irreconcilable with Congress’s “goal of minimizing

the administrative and financial burdens on plan

administrators” by enabling employers to establish a

“set of standard procedures to guide processing of

claims and disbursement of benefits.” Id. at 148–51;

see Merit Constr. All., 759 F.3d at 131 (local mandate

preempted if it “has the effect of destroying the

benefit of uniform administration that is among

ERISA’s principal goals”); Fielder, 475 F.3d at 197

(finding impermissible “connection with” ERISA

plans where state scheme required employers to

“keep an eye on conflicting state and local minimum

spending requirements and adjust [their] healthcare

spending accordingly”).

3. The Ninth Circuit avoided the otherwise

obvious conclusion that ERISA preempts the Seattle

ordinance in part by invoking a presumption against

preemption. See Pet. App. 2. This Court, however,

has made clear that no such presumption applies

where, as here, the federal statute involved includes

an express preemption provision. See Puerto Rico v.

Franklin Cal. Tax-Free Tr., 579 U.S. 115, 125 (2016)

(citing Gobeille in support of this proposition); see

also, e.g., Pharm. Care Mgmt. Ass’n v. Wehbi, 18

F.4th 956, 967 (8th Cir. 2021) (applying Franklin in

case involving ERISA’s express preemption

provision); Dialysis Newco, Inc. v. Cmty. Health Sys.

Grp. Health Plan, 938 F.3d 246, 258–59 (5th Cir.

2019) (same). Whatever the value of a presumption

against preemption where Congress is silent about a

federal statute’s preemptive reach, where Congress

has directly spoken to the issue, “the plain wording

13

of the clause ... necessarily contains the best

evidence of Congress’ pre-emptive intent.” Franklin,

579 U.S. at 125 (quoting U.S. Chamber of Com. v.

Whiting, 563 U.S. 582, 594 (2011)).

Once the presumption is set aside, there is no

doubt that local laws that mandate provision of

specific benefits to employees within an individual

jurisdiction are incompatible with the federal system

of employee benefit regulation Congress established

in ERISA, as both the First and Fourth Circuits

have correctly held. Merit Constr. All., 759 F.3d at

130; Fielder, 475 F.3d at 187.

II.

The

Splintered

Regulatory

Regime

Endorsed By The Ninth Circuit Creates

Administrative Burdens And Undermines

The Provision of Employee Benefits.

The consequences of the Ninth Circuit’s

misguided preemption ruling will extend far beyond

Seattle. Many other municipalities within the Ninth

Circuit have explored ways to direct employee

benefit resources to their own residents.

An

employer in just the Bay Area, with all of its

employees concentrated within a twenty-five-mile

radius, has to contend with no fewer than seven

separate ordinances defining minimum amounts of

employer health expenditures. See, e.g., Berkeley,

Cal. Mun. Code Ch. 13.27; Oakland, Cal. Mun. Code

Ch. 2.28 (applying city-wide); id. Ch. 5.93 (imposing

additional benefits requirements on Oakland hotel

operators); S.F., Cal. Admin. Code § 14 (applying

city-wide); id. § 12Q (imposing additional benefits

requirements for airport workers); Marin Cnty., Cal.

14

Admin. & Pers. Code § 2.50.050; San Leandro, Cal.

Mun. Code § 1-6-625; Sonoma, Cal. Mun. Code § 2377; Richmond, Cal. Mun. Code Ch. 7.108.040(A)(5).

Unsurprisingly,

each

of

these

overlapping

ordinances has different (and sometimes conflicting)

minimum benefit rates, 7 timelines, 8 definitions, 9 and

recordkeeping requirements. 10 A Bay Area employer

7 Compare, e.g., Oakland, Cal. Mun. Code Ch. 2.28.030(C) (re-

quiring healthcare benefit expenditures of at least $1.25 per

hour), with Berkeley, Cal. Mun. Code Ch. 13.27.050(A), (D)

(providing for annual adjustments to medical benefit reimbursement rate), and City of S.F. Office of Labor Standards

Enforcement, Health Care Security Ordinance (updated May 4,

2021),

https://sfgov.org/olse//health-care-security-ordinancehcso (listing mandatory health expenditure rates from $2.12 to

$3.18 per hour for 2021).

8 Compare, e.g., Berkeley, Cal. Mun. Code Ch. 13.27.045(A)

(new inflation-adjusted rates to take effect each July 1), with

Richmond, Cal. Mun. Code Ch. 7.108.040(a)(4) (new rates to

take effect each January 1).

Compare, e.g., Richmond, Cal. Mun. Code Ch. 7.108.030(d)

(defining “Employer” to encompass any employer that “employs

or exercises control over the wages, hours or working conditions

of any employee”), with Oakland, Cal. Mun. Code Ch. 2.28.020

(defining “Employer” to include only a person “who is a city financial assistance recipient, contractor, or subcontractor”).

9

10 Compare, e.g., Berkeley, Cal. Mun. Code Ch. 13.27.045 (re-

quiring employers to retain payroll records, including “the

manner in which the Employer made their required healthcare

expenditures for each Employee,” for four years) with S.F., Cal.

Mun. Code § 14.3(f) (requiring covered employers to “maintain

accurate records of Health Care Expenditures, Required Health

Care Expenditures, and proof of such expenditures made each

quarter each year,” but not setting a particular period for which

such records must be retained).

15

with an ERISA plan must test the sufficiency of that

plan against the compliance regimes established by

each of these jurisdictions.

The Ninth Circuit’s outlier position on

preemption has undoubtedly contributed to the

proliferation of such rules within that circuit. But as

the contrary decisions from the First and Fourth

Circuits demonstrate, municipalities beyond the

Ninth Circuit’s reach have also enacted similar

measures. See also, e.g., Albuquerque, N.M. Mun.

Code § 13-12-3(b); Bernalillo Cnty., N.M. Cnty. Code

§ 2-220(d). And additional cities around the country,

including Chicago, Austin, and St. Paul, have

expressed a desire to emulate Seattle’s regulation of

health benefits at the local level. See Br. of Amici

Curiae S.F. et al. at 28, ERISA Indus. Comm. v. City

of Seattle, No. 20-35472 (9th Cir. Nov. 4, 2020). 11

However clear this Court’s precedent may seem,

the circuit split created by the Ninth Circuit’s

erroneous interpretation creates uncertainty about

the state of the law in circuits that have not yet

squarely addressed local efforts to regulate employee

benefit plans through “play or pay” laws. And many

national employers are left to grapple not only with

the proliferation of localized benefits regulations, but

also with an inconsistent body of circuit precedent

regarding whether such laws escape preemption.

11 Moreover, as Merit Construction Alliance illustrates, locali-

ties have not limited their efforts to the provision of health

benefits. See Merit Constr. All., 759 F.3d at 131 (holding that

ERISA preempts regulation of apprentice training programs,

which are included in ERISA’s definition of employee welfare

benefit plans).

16

Forcing employers to contend with a disparate

array of local ordinances mandating specific health

benefit amounts and structures would be untenable

even if such laws were confined to the Ninth Circuit.

There is nothing to prevent every municipality in the

Ninth Circuit from adopting its own local ordinance

imposing its own idiosyncratic benefits standard and

accompanying administrative regime. There are 482

incorporated cities and towns in California alone, 12

another 281 cities and towns in Washington, 13 and,

of course, many more in other states and territories

within the Ninth Circuit.

Complying with the

individual benefits laws of each of those

jurisdictions, should they choose to enact them,

would be impossible.

The burdens of a fragmented regulatory regime

fall most heavily on the large cross-jurisdictional

employers that provide healthcare coverage to most

American workers with employer-sponsored plans. 14

12 U.S. Census Bureau, City and Town Population Totals: 2010-

2019, Incorporated Places: 2010-2019 (Cal.), https://

www.census.gov/data/tables/time-series/demo/popest/2010stotal-cities-and-towns.html.

13 U.S. Census Bureau, City and Town Population Totals: 20102019, Incorporated Places: 2010-2019 (Wash.), https://

www.census.gov/data/tables/time-series/demo/popest/2010stotal-cities-and-towns.html.

14 In the United States, large firms—defined as those with 200

or more employees—provide healthcare coverage to 71 percent

of the workers who receive employer-sponsored coverage. Kaiser Family Found., Employer Health Benefits: 2021 Annual

Survey, at 25 (Nov. 2021), https://files.kff.org/attachment/

Report-Employer-Health-Benefits-2021-Annual-Survey.pdf.

17

Increased administrative complexity inevitably leads

to increased administrative costs, which in turn

harm beneficiaries. Since employers and employees

tend to share the burden of healthcare costs,

beneficiaries bear higher administrative costs

directly.

See Katherine Baicker & Amitabh

Chandra, The Labor Market Effects of Rising Health

Insurance Premiums, Nat’l Bureau Econ. Rsch.,

NBER Working Paper No. 11160, at 17 (Feb. 2005),

https://www.nber.org/papers/w11160.

Higher

healthcare costs also come with harmful secondorder effects. For example, the National Bureau of

Economic Research has estimated that a 10 percent

increase in premium expenditures reduces the

aggregate probability that a worker will be employed

by 1.6 percent, causes a 2.3 percent decrease in

wages, and lowers the probability that a given

employee will be offered employer-sponsored

coverage by 3.8 percent. Id. at Abstract, 16, 19.

Municipalities like Seattle undoubtedly adopt

laws like the ordinance because they believe those

provisions will benefit local residents. See SMC

14.28.025 (reflecting stated intent to “improve lowwage hotel employees’ access, through additional

compensation, to high-quality, affordable health

coverage for the employees and their spouses or

domestic partners, children, and other dependents”);

see also Br. of Amici Curiae S.F. et al. at 1, ERISA

Indus. Comm. v. City of Seattle, No. 20-35472 (9th

Cir. Nov. 4, 2020) (“Amici are cities and counties

Nearly all of these large firms (99 percent) offer healthcare coverage to their employees. Id. at 44.

18

committed to ensuring that all of their residents

have access to affordable and comprehensive

healthcare.”). But a system of local beneficence,

when aggregated across thousands of overlapping

jurisdictions, imposes a regulatory structure where

the burdens of compliance will reduce the resources

available for employee benefits in all locations. See

Egelhoff, 532 U.S. at 150.

This problem has a solution, and Congress

already enacted it. The Court should use this

opportunity to resolve the circuit conflict and ensure

that local efforts to regulate employee benefits are

not permitted to dismantle the “single uniform

national scheme for the administration of ERISA

plans” that Congress envisioned. Gobeille, 577 U.S.

at 326.

CONCLUSION

For the foregoing reasons and those stated in the

petition, the petition for a writ of certiorari should be

granted.

19

Respectfully submitted,

PAUL LETTOW

JANET GALERIA

U.S. CHAMBER LITIGATION

CENTER

1615 H Street, N.W.

Washington, D.C. 20062

ERICA KLENICKI

NAM LEGAL CENTER

733 Tenth Street, N.W.

Suite 700

Washington, D.C. 20001

MEAGHAN VERGOW

Counsel of Record

DEANNA M. RICE

O’MELVENY & MYERS LLP

1625 Eye Street, N.W.

Washington, D.C. 20006

(202) 383-5300

mvergow@omm.com

LIZ DOUGHERTY

BUSINESS ROUNDTABLE

1000 Maine Avenue, S.W.

Washington, D.C. 20024

Attorneys for Amici Curiae

February 18, 2022