Opposition 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 a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF IN OPPOSITION

ANN DAVISON

City Attorney

ERICA R. FRANKLIN

Assistant City Attorney

CITY OF SEATTLE

701 Fifth Ave., Suite 2050

Seattle, WA 98104-7097

(206) 684-8200

ERIN M. RILEY

MATTHEW GEREND

KELLER ROHRBACK L.L.P.

1201 Third Ave., Suite 3200

Seattle, WA 98101

(206) 623-1900

PETER K. STRIS

Counsel of Record

RACHANA A. PATHAK

DOUGLAS D. GEYSER

JOHN STOKES

STRIS & MAHER LLP

777 S. Figueroa Street

Suite 3850

Los Angeles, CA 90017

(213) 995-6800

pstris@stris.com

JEFFREY LEWIS

KELLER ROHRBACK L.L.P.

180 Grand Ave., Suite 1830

Oakland, CA 94612

(510) 463-3900

Counsel for Respondent

i

QUESTION PRESENTED

The Employee Retirement Income Security Act of

1974 (“ERISA”) preempts a state or local law if it

“forc[es] [ERISA] plans to adopt any particular

scheme of substantive coverage” or “acts immediately

and exclusively upon ERISA plans or where the existence of ERISA plans is essential to the law’s operation.” Rutledge v. Pharm. Care Mgmt. Ass’n, 141 S. Ct.

474, 480–81 (2020); see 29 U.S.C. 1144(a).

Here the City of Seattle enacted an ordinance that

requires hotel businesses to pay certain employees additional compensation. The ordinance gives those employers the option to comply by making expenditures

through their ERISA health benefit plans instead of

paying the additional cash directly to the employees.

The Ninth Circuit held that ERISA did not

preempt that ordinance because an employer can satisfy the law through direct cash payments to employees, regardless of whether it has an ERISA plan and

without changing a word in its plan if it does have one.

That decision is consistent with thirty years of precedent rejecting preemption challenges to prevailingwage laws. No court of appeals has ever held that

ERISA preempts a law that functions like the Seattle

ordinance, i.e., that does not require an employer to

alter or create an ERISA plan.

The question presented is:

Whether the Ninth Circuit correctly concluded,

consistent with this Court’s precedent and the unanimous view of all courts of appeals, that ERISA does

not preempt a local law requiring employers to pay

employees additional compensation merely because it

gives employers the option of complying by making

contributions to ERISA plans.

ii

TABLE OF CONTENTS

QUESTION PRESENTED..........................................i

TABLE OF AUTHORITIES ......................................iv

INTRODUCTION ....................................................... 1

STATEMENT OF THE CASE ................................... 4

A. Statutory Background ................................... 4

B. Factual Background ...................................... 6

C. Procedural Background ................................. 7

REASONS TO DENY CERTIORARI ........................ 9

I.

THERE IS NO CIRCUIT CONFLICT ................ 9

A. The Ninth Circuit Applied Basic

Principles About Which All Circuits

Agree ............................................................ 10

B. Fielder Is Not In Conflict ............................ 13

C. Merit Construction Is Not In Conflict ......... 17

II. THE NINTH CIRCUIT CORRECTLY

APPLIED THIS COURT’S PRECEDENT ........ 19

A. The Ordinance Does Not Have An

Impermissible “Connection” With

ERISA Plans ................................................ 20

B. The Ordinance Does Not Impermissibly

“Reference” ERISA Plans ............................ 23

C. The Ordinance Does Not Require

Employers To Create ERISA Plans ............ 26

iii

TABLE OF CONTENTS—continued

D. The Ninth Circuit Correctly Applied

The Presumption Against Preemption,

Although Its Decision Would Have Been

The Same Regardless .................................. 29

III. PETITIONER OFFERS NO REASON TO

UPSET THE CIRCUITS’

LONGSTANDING, UNIFORM

INTERPRETATION OF ERISA ........................ 30

IV. THIS CASE IS A POOR VEHICLE TO

DECIDE THE QUESTION PRESENTED ....... 34

CONCLUSION ......................................................... 36

iv

TABLE OF AUTHORITIES

CASES:

Associated Builders & Contractors,

Saginaw Valley Area Chapter

v. Perry, 115 F.3d 386 (6th Cir. 1997) .................. 12

Burgio & Campofelice, Inc.

v. N.Y. State Dep’t of Labor,

107 F.3d 1000 (2d Cir. 1997) ................................ 12

Cal. Div. of Lab. Standards Enf’t

v. Dillingham Constr., N.A., Inc.,

519 U.S. 316 (1997) ....................................... passim

Cal. Hotels & Lodging Ass’n

v. City of Oakland,

393 F. Supp. 3d 817 (N.D. Cal. 2019) ................... 33

Concerned Home Care Providers, Inc.

v. Cuomo, 783 F.3d 77 (2d Cir. 2015) ................... 12

District of Columbia

v. Greater Washington Board of Trade,

506 U.S. 125 (1992) ........................................... 8, 23

Egelhoff v. Egelhoff ex rel. Breiner,

532 U.S. 141 (2001) ......................................... 21, 22

Fort Halifax Packing Co. v. Coyne,

482 U.S. 1 (1987) ........................................... passim

Gobeille v. Liberty Mut. Ins. Co.,

577 U.S. 312 (2016) ................................... 25, 26, 30

Golden Gate Rest. Ass’n

v. City & County of San Francisco,

546 F.3d 639 (9th Cir. 2008) ......................... passim

v

TABLE OF AUTHORITIES—continued

Golden Gate Rest. Ass’n

v. City & County of San Francisco,

558 F.3d 1000 (9th Cir. 2009) ............................... 16

Golden Gate Rest. Ass’n

v. City & County of San Francisco,

561 U.S. 1024 (2010) ............................................... 3

Ingersoll-Rand Co. v. McClendon,

498 U.S. 133 (1990) ......................................... 22, 23

Keystone Chapter, Associated Builders

& Contractors, Inc. v. Foley,

37 F.3d 945 (3d Cir. 1994) .................... 2, 11, 12, 34

Leavitt v. Jane L.,

518 U.S. 137 (1996) ............................................... 35

Mackey v. Lanier Collection

Agency & Service, Inc.,

486 U.S. 825 (1988) ......................................... 24, 25

Merit Construction All. v. City of Quincy,

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

Metropolitan Life Ins. Co. v. Massachusetts,

471 U.S. 724 (1985) ......................................... 23, 34

Minnesota Chapter of Associated

Builders & Contractors, Inc.

v. Minnesota Dep’t of Labor & Indus.,

47 F.3d 975 (8th Cir. 1995) ................................... 12

Minnesota Chapter of Associated

Builders & Contractors., Inc.

v. Minnesota Dep’t of Pub. Safety,

267 F.3d 807 (8th Cir. 2001) ........................... 18, 19

vi

TABLE OF AUTHORITIES—continued

Massachusetts v. Morash,

490 U.S. 107 (1989) ............................... 8, 26, 27, 28

N.Y. State Conf. of Blue Cross &

Blue Shield Plans v. Travelers Ins. Co.,

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

Puerto Rico

v. Franklin California Tax-Free Trust,

579 U.S. 115 (2016) ......................................... 29, 30

Retail Indus. Leaders Ass’n v. Fielder,

475 F.3d 180 (4th Cir. 2007) ......................... passim

Retail Indus. Leaders Ass’n v. Suffolk County,

497 F. Supp. 2d 403 (E.D.N.Y. 2007) ................... 15

Rutledge v. Pharm. Care Mgmt. Ass’n,

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

Self-Insurance Inst. of Am. v. Snyder,

827 F.3d 549 (6th Cir. 2016) ................................. 23

Shaw v. Delta Air Lines, Inc.,

463 U.S. 85 (1983) ............................................. 2, 12

Standard Oil Co. v. Agsalud,

633 F.2d 760 (9th Cir. 1980) ....................... 3, 10, 13

WSB Elec., Inc. v. Curry,

88 F.3d 788 (9th Cir. 1996) ................................... 12

STATUTES:

29 U.S.C. 1002(1)....................................................... 26

29 U.S.C. 1144 ...................................................... i, 4, 5

vii

TABLE OF AUTHORITIES—continued

Albuquerque, N.M. Mun. Code § 13-12-3(b)............. 32

Berkeley, Cal. Mun. Code 13.27 ............................... 32

Bernalillo Cnty., N.M. Cnty. Code § 2-220(d) .......... 32

Marin Cnty., Cal. Admin. & Pers.

Code § 2.50.050 ..................................................... 32

Oakland, Cal. Mun. Code Ch. 2.28 ........................... 32

Oakland, Cal. Mun. Code Ch. 5.93 ........................... 33

Richmond, Cal. Mun. Code Ch. 7.108.040(A)(5) ...... 32

S.F., Cal. Admin. Code § 12Q.................................... 33

San Leandro, Cal. Mun. Code § 1-6-625 ................... 32

SMC 14.28.020............................................................. 6

SMC 14.28.025............................................................. 6

SMC 14.28.030.A ................................................... 7, 28

SMC 14.28.030.B ......................................................... 7

SMC 14.28.060.A ............................................. 6, 25, 28

SMC 14.28.060.B ............................................... passim

SMC 14.28.060.C ............................................. 6, 18, 24

SMC 14.28.060.D ............................................. 7, 24, 29

SMC 14.28.060.F ......................................................... 6

SMC 14.28.110.A ......................................................... 7

SMC 14.28.250........................................................... 35

viii

TABLE OF AUTHORITIES—continued

SMC 14.28.260.B ....................................................... 24

Sonoma, Cal. Mun. Code § 2-377 .............................. 32

RULES:

S. Ct. R. 10 ........................................................... 26, 31

OTHER AUTHORITIES:

Br. for the United States, Golden Gate Rest.

Ass’n v. San Francisco, No. 08-1515

(U.S. May 28, 2010)....................................... passim

Glenn Daigon, Cities are Blazing the Trail

Toward Healthcare For All, Salon

(Feb. 10, 2019), https://bit.ly/37ydlfZ ............. 31, 32

Improving Access to Medical Care for Hotel

Employees Ordinance; Question and

Answers, Seattle Off. of Lab. Standards,

https://bit.ly/3vDrXT5 ........................................... 28

Sarah Varney, Beyond Beltway’s ‘Medicare-forAll’ Talk, Democrats in States Push New

Health Laws, Kaiser Health News

(Feb. 14, 2019), https://bit.ly/3rKm31r................. 32

1

INTRODUCTION

ERISA did not federalize employee compensation.

This Court has recognized for decades that while

ERISA’s preemptive reach is broad, it is concerned

only with the administration of “employee benefit

plans.” Fort Halifax Packing Co. v. Coyne, 482 U.S. 1,

7 (1987).

Accordingly, states and localities are free to impose

minimum levels of compensation. Such laws may even

“increase costs or alter incentives for ERISA plans” so

long as they do not dictate an alteration of a benefit

plan or make compliance depend exclusively on a

plan’s existence. Rutledge v. Pharm. Care Mgmt.

Ass’n, 141 S. Ct. 474, 480 (2020). These well-settled

precepts resolve this case.

What Petitioner derisively calls Seattle’s “play-orpay” law is nothing more than a mandate to pay a certain wage that gives an employer the option of complying by making expenditures to an ERISA plan.

Had Seattle simply required the direct payment of

wages, there would be no serious preemption argument. Petitioner asserts the outcome should be different, however, because Seattle allowed employers, at

their complete discretion, to meet their payment obligations through their health benefit plans.

The Ninth Circuit correctly rejected that argument. An employer can comply with Seattle’s ordinance without changing or even looking at its ERISA

plan—if it even has one. A simple cash payment to its

employees suffices. It thus does not “forc[e] plans to

adopt any particular scheme of substantive coverage.”

Rutledge, 141 S. Ct. at 480.

2

That holding is consistent with this Court’s precedent and the unanimous view of the courts of appeals,

which have for decades recognized that ERISA does

not preempt compensation statutes that merely allow,

but do not require, employers to satisfy their obligations through ERISA plans.

Every circuit agrees that if a statute unavoidably

requires modifying an ERISA plan, that law is

preempted. Every circuit also agrees that if a statute

permits compliance through direct cash payments to

employees, then the law is not preempted. Unsurprisingly, courts have reached different judgments in different cases—preemption or no preemption—because

the statutes under review had material differences.

Put simply, there is no circuit conflict.

As the Third Circuit explained nearly thirty years

ago in addressing a prevailing wage statute: “Where a

legal requirement may be easily satisfied through

means unconnected to ERISA plans, and only relates

to ERISA plans at the election of an employer, it ‘affect[s] employee benefit plans in too tenuous, remote,

or peripheral a manner to’” be preempted. Keystone

Chapter, Associated Builders & Contractors, Inc. v.

Foley, 37 F.3d 945, 960 (3d Cir. 1994) (alteration in

original) (quoting Shaw v. Delta Air Lines, Inc.,

463 U.S. 85, 100 n.21 (1983)). The Second, Third,

Sixth, Eighth, and Ninth Circuits have all upheld

analogous statutes. And no court of appeals has ever

found such a statute preempted.

Petitioner is wrong that the First and Fourth Circuits have disagreed. Both circuits addressed inapposite statutes that left employers no reasonable choice

but to change their ERISA plans. The First Circuit

held that a city apprenticeship ordinance was

3

preempted because, in order to comply, an employer

“either would have to modify” its “ERISA-governed”

program or “establish and coordinate a separate

plan.” Merit Construction All. v. City of Quincy,

759 F.3d 122, 130 (1st Cir. 2014). The court was explicit that Ninth Circuit precedent was “not to the contrary.” Ibid. Likewise, the Fourth Circuit held that a

Maryland law was preempted because it “effectively

require[d] employers . . . to restructure their employee

health insurance plans.” Retail Indus. Leaders Ass’n

v. Fielder, 475 F.3d 180, 183 (4th Cir. 2007).

In short, the statutes considered by the First and

Fourth Circuits were preempted because, unlike the

Seattle ordinance, they did not provide any meaningful, non-ERISA alternative for compliance.1

Petitioner’s effort to portray a conflict merely rehashes the arguments made by an industry group the

last time the Court denied certiorari on this issue. See

Golden Gate Rest. Ass’n v. City & County of San Francisco, 561 U.S. 1024 (2010). Just as the industry group

argued a decade ago, Petitioner asserts that Fielder

held the Maryland law preempted because it “would

interfere with uniform nationwide plan administration.” Pet. 14. But Petitioner omits the factual basis

for that conclusion.

As the United States’ invitation brief told this

Court, “the Maryland law in Fielder effectively forced

the single affected employer to alter its ERISA plan.”

U.S. Br. at 20, Golden Gate, No. 08-1515 (May 28,

2010) (“U.S. Golden Gate Br.”). This was not true of

1

Indeed, every circuit (including the Ninth Circuit) agrees that

statutes that compel ERISA benefits are preempted. See, e.g.,

Standard Oil Co. v. Agsalud, 633 F.2d 760, 763 (9th Cir. 1980).

4

the statute considered in Golden Gate. Ibid. The

Fourth and Ninth Circuit opinions therefore did “not

present a direct conflict that warrants this Court’s review.” Id. at 17; contra Pet. 2–3 (falsely asserting that

“the United States acknowledg[ed] the circuit conflict”). There was no conflict then and there is no conflict now.

Nor has anything changed to warrant the Court’s

review of what remains a uniform, national interpretation of 29 U.S.C. 1144. Petitioner and its amici attempt to construct a narrative about a surge of new

ordinances in the years since Golden Gate, but they

have not identified a single statute—proposed or enacted—that imposes any requirements on ERISA

plans or forces employers to adopt ERISA plans. At

most, amici have cited various wage laws that all

courts agree are not preempted by ERISA.

Petitioner does not actually seek to protect the status quo against an emergent threat of local health

care ordinances. Instead, Petitioner seeks to radically

upset the settled understanding of wage laws in this

country that for nearly 30 years has garnered unanimous agreement from all courts of appeals.

Indeed, not a single judge dissented from the

Ninth Circuit’s refusal to rehear this case en banc.

Further review is simply unwarranted.

STATEMENT OF THE CASE

A. Statutory Background

ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. 1144(a). That text refers “to state laws relating to ‘employee benefit

plans,’” not simply “employee benefits.” Fort Halifax,

5

482 U.S. at 7. Although its language is “expansive,”

this Court has advised against applying the text with

“uncritical literalism.” N.Y. State Conf. of Blue Cross

& Blue Shield Plans v. Travelers Ins. Co., 514 U.S.

645, 656 (1995). Courts “must go beyond the unhelpful

text and the frustrating difficulty of defining its key

term.” Ibid.; see also Cal. Div. of Lab. Standards Enf’t

v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 335–

336 (1997) (Scalia, J., concurring) (“applying the ‘relate to’ provision according to its terms was a project

doomed to failure, since, as many a curbstone philosopher has observed, everything is related to everything else”).

The Court’s “efforts at applying the provision have

yielded a two-part inquiry: A law ‘relate[s] to’ a covered employee benefit plan for purposes of § [1144](a)

‘if it [1] has a connection with or [2] reference to such

a plan.’” Dillingham, 519 U.S. at 324 (majority op.)

(first alteration in original) (citing cases).

A state law “references” ERISA plans only if it

“acts immediately and exclusively upon ERISA plans”

or “where the existence of ERISA plans is essential to

the law’s operation.” Dillingham, 519 U.S. at 325.

A law has a “connection with” ERISA plans only if it

“require[s] providers to structure benefit plans in particular ways” or “force[s] an ERISA plan to adopt a

certain scheme of substantive coverage.” Rutledge,

141 S. Ct. at 480 (citation omitted).

Recently, this Court reiterated that ERISA does

not preempt state laws “that merely increase costs or

alter incentives for ERISA plans without forcing plans

to adopt any particular scheme of substantive coverage.” Rutledge, 141 S. Ct. at 480. And a law is not

preempted where it may take full effect regardless of

6

whether any ERISA plan exists. Id. at 481 (citing Dillingham, 519 U.S. at 328).

B. Factual Background

In September 2019, Seattle enacted a measure

called the “Improving Access to Medical Care for Hotel

Employees Ordinance,” codified at Seattle Municipal

Code (SMC) 14.28. Pet. App. 21–57. The purpose of

the ordinance is to “improve low-wage hotel employees’ access, through additional compensation, to highquality, affordable health coverage.” SMC 14.28.025

(emphasis added).

The ordinance requires hotel employers to make

monthly expenditures at fixed, per-employee rates.

SMC 14.28.060. These per-employee expenditure

rates are based on whether the employee has dependents and a spouse or domestic partner. SMC

14.28.020, 14.28.060.A, F.

Although the ordinance calls these payments

“healthcare expenditures,” it allows hotel employers

to satisfy the law by making wage-like cash payments,

i.e., “[a]dditional compensation paid directly to the

covered employee.” SMC 14.28.060.B.1. The ordinance

also gives employers the choice to credit amounts they

spend on health insurance or self-insured health

plans towards their expenditure obligation. SMC

14.28.060.B.2–3. Employers have complete discretion

to choose one or more of these forms of expenditure.

SMC 14.28.060.B. For example, if an employer’s insurance premiums satisfy 80% of the expenditure requirement, the employer may pay the balance in direct wage-like payments. SMC 14.28.060.B, C. Choosing one option versus another does not affect the total

expenditure the ordinance requires.

7

All non-managerial employees are entitled to payments if they work an average of 80 hours per month

and do not receive health coverage from another

source (e.g., a spouse’s health plan). SMC 14.28.030.A,

B. Employees may waive their right to increased compensation under the ordinance by signing an approved

waiver form. SMC 14.28.060.D.

As with minimum wage and tax laws, employers

are required to “retain records that document compliance with” the ordinance, including “[p]roof of each required healthcare expenditure made each month” and

copies of waivers from employees. SMC 14.28.110.A.

Where an employer chooses to comply by making cash

payments to employees, the employer need not provide any information to the City regarding ERISA

plans or benefits. See SMC 14.28.060.B.1,

14.28.110.A.

C. Procedural Background

1. Petitioner is an association whose membership

includes “employers owning or operating large hotels

or ancillary hotel businesses” in Seattle. Compl. ¶¶ 9–

10, C.A. E.R. 26. Petitioner seeks an order declaring

the ordinance preempted by ERISA with respect to its

members and enjoining the City from enforcing the ordinance against them. Pet. App. 8.

2. The district court granted Seattle’s motion to

dismiss, concluding that the ordinance neither references nor has a connection with ERISA plans and thus

is not preempted. Pet. App. 5–20. The court disposed

of each of the three bases for preemption alleged by

Petitioner. Id. at 8.

a. The court rejected Petitioner’s argument that

the ordinance has a “connection with” ERISA plans

8

because it “compels” employers “to alter their current”

ERISA plans. Pet. App. 16. The court disagreed that

the direct-payment route is “financially more onerous

and therefore not a realistic and legitimate alternative.” Ibid. (citation omitted). Its conclusion rested on

this Court’s explanation that ERISA does not preempt

a state law exerting an “indirect economic influence”

that does not “bind plan administrators to any particular choice.” Id. at 16–17 & n.8 (citing Travelers,

514 U.S. at 650, 659).

b. The court next rejected Petitioner’s argument

that the ordinance makes “reference to” ERISA plans

because when an employer chooses to rely on health

plan contributions, it would have to compare those

contributions to the statutory expenditure obligation.

Pet. App. 18–19. The court explained that Petitioner

incorrectly relied on District of Columbia v. Greater

Washington Board of Trade, 506 U.S. 125 (1992),

which held that a workers’ compensation ordinance

impermissibly referenced ERISA plans where the employer obligation was derived from the “level” of benefits provided under “existing ERISA coverage.” Pet.

App. 18–19. “In contrast,” Seattle’s ordinance does not

“measure the required level of payments based on an

ERISA plan” but instead enumerates specific “dollar

amounts.” Id. at 19.

c. The court also disagreed that an employer’s payment of direct compensation to employees would itself

constitute an ERISA plan. Pet. App. 12–15. The court

explained “[t]here is little to differentiate the payments under this option from regular wages, and they

can be coordinated with employees’ regular pay periods.” Id. at 13–14. That reasoning found support in

Massachusetts v. Morash, 490 U.S. 107 (1989), which

9

held that an ERISA plan is not created where monies

are paid to employees directly from an employer’s general assets in amounts that are “fixed, due at known

times, and do not depend on contingencies outside the

employee’s control.” Id. at 115–116.

3. The court of appeals affirmed in a unanimous,

unpublished decision. Pet. App. 1–3. The panel explained that, “[a]s in Golden Gate, [the Seattle ordinance] 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,” in whole or in part,

through either ERISA or non-ERISA means. Id. at

App. 2–3 (quoting Golden Gate Rest. Ass’n v. City &

County of San Francisco, 546 F.3d 639, 655–656 (9th

Cir. 2008)).

4. The court of appeals denied the petition for rehearing en banc, with no judge requesting a vote. Pet.

App. 4.

REASONS TO DENY CERTIORARI

I.

THERE IS NO CIRCUIT CONFLICT

Petitioner contends that the Ninth Circuit has

split with the First and Fourth Circuits over whether

ERISA preempts what Petitioner calls “play-or-pay

laws”—laws that require minimum employee compensation that can be satisfied either through cash payments or benefits. But every court of appeals has used

the same rule: “ERISA does not pre-empt state rate

regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt

any particular scheme of substantive coverage.”

Rutledge, 141 S. Ct. at 480.

10

The courts reached different outcomes only because the laws they examined operated differently.

The laws considered by the First and Fourth Circuits

were simply “play” laws; they provided no real cash

option. So whereas those circuits held that the statutes required employers to create or alter ERISA

plans, the Ninth Circuit interpreted Seattle’s ordinance as not having that effect and thus held that it

was not preempted. Had Seattle’s law come before the

First or Fourth Circuits, the result would have been

the same. As the United States told this Court the last

time someone asserted a circuit divide on this issue,

there is no conflict. U.S. Golden Gate Br. 20.

A. The Ninth Circuit Applied Basic Principles About Which All Circuits Agree

1. Every court of appeals agrees that a state or municipal law is preempted if it unavoidably requires

employers to create or modify ERISA plans. For example, the First Circuit held preempted a municipal ordinance that “mandates an employee benefit structure

and specifies how that structure must be administered.” Merit Construction, 759 F.3d at 129. Likewise,

the Fourth Circuit held preempted a law that “effectively mandates that employers structure their employee healthcare plans to provide a certain level of

benefits.” Fielder, 475 F.3d at 193–194.

The Ninth Circuit agrees. As Golden Gate observed, the Ninth Circuit has held that a “Hawaii statute was preempted because it required employers to

have health plans, and it dictated the specific benefits

employers were to provide through those plans.”

546 F.3d at 655 (citing Agsalud, 633 F.2d at 766).

11

2. Key to this case, however, is a related principle

about which all circuits also agree: a state or local law

does not mandate ERISA benefits, and thus is not

preempted, if it allows employers to comply through a

realistic, non-ERISA option. This principle represents

a straightforward application of this Court’s

longstanding precept that ERISA does not preempt

laws that merely exert some tenuous influence on

ERISA plans without forcing them to adopt any

scheme or coverage. See, e.g., Rutledge, 141 S. Ct. at

480–481.

The courts of appeals elucidated this rule in a series of decisions upholding state laws requiring that

workers receive the prevailing minimum wage. For

example, the Third Circuit addressed a prevailing

wage statute that included a benefits component,

which required that “[c]ontracts for public works must

either provide benefits contributions at the level determined in the prevailing wage or the monetary

equivalent thereof.” Keystone, 37 F.3d at 960 (emphasis added). The Third Circuit held that the law was

“not preempted[] because an employer may comply

without making any adjustment in its ERISA plans.”

Id. at 961. Specifically, “[u]nless the employer chooses

otherwise, the benefits component imposes a cash

wage requirement, and . . . ERISA does not preempt a

state’s power to set a minimum cash wage.” Ibid.

Nearly thirty years ago, the Third Circuit articulated the following clear standard: “Where a legal requirement may be easily satisfied through means unconnected to ERISA plans, and only relates to ERISA

plans at the election of an employer, it ‘affect[s] employee benefit plans in too tenuous, remote, or periph-

12

eral a manner to warrant a finding that the law relates to the plan.’” Keystone, 37 F.3d at 960 (second

alteration in original) (quoting Shaw, 463 U.S. at 100

n.21).

In the decades since, multiple other circuits have

adopted this reasoning. For example, the Second Circuit held that New York’s prevailing wage law was not

preempted because it applied a “total liability” approach, under which an employer could satisfy its obligations “exclusively through ERISA plans, exclusively through non-ERISA plans, through additional

cash wages, or through some combination of the

three.” Burgio & Campofelice, Inc. v. N.Y. State Dep’t

of Labor, 107 F.3d 1000, 1009 (2d Cir. 1997); accord

Concerned Home Care Providers, Inc. v. Cuomo,

783 F.3d 77, 87–89 (2d Cir. 2015); Associated Builders

& Contractors, Saginaw Valley Area Chapter v. Perry,

115 F.3d 386, 392–394 (6th Cir. 1997); Minnesota

Chapter of Associated Builders & Contractors, Inc. v.

Minnesota Dep’t of Labor & Indus., 47 F.3d 975, 978–

980 (8th Cir. 1995); WSB Elec., Inc. v. Curry, 88 F.3d

788, 793–794 (9th Cir. 1996).

3. The Ninth Circuit applied this universally accepted principle here, holding that the Seattle ordinance is not preempted because employers can fully

satisfy their expenditure obligations through a nonERISA option. Pet. App. 2–3.

The panel relied on the Ninth Circuit’s Golden

Gate decision, which addressed a San Francisco ordinance that imposed a “health care expenditure rate”

and gave employers both an ERISA and non-ERISA

option for compliance. 546 F.3d at 644–645. Under the

San Francisco ordinance, employers could make payments through an ERISA plan or make payments to

13

the city on behalf of employees, which would entitle

such employees to municipal health services and reimbursement accounts. Ibid.

As with the prevailing wage statutes, the Golden

Gate ordinance offered both ERISA and non-ERISA

options for compliance. That meant “the [o]rdinance

does not require employers to establish their own

ERISA plans or to make any changes to any existing

ERISA plans.” 546 F.3d at 646. The city payment option meant the San Francisco ordinance stood in

“stark contrast” to the Hawaii statute the Ninth Circuit found preempted in Agsalud, which, as discussed

above, “required employers to have health plans” and

“dictated the specific benefits employers were to provide.” Id. at 655. Because the San Francisco ordinance

“does not require any employer to adopt an ERISA

plan” or “to provide specific benefits through an existing ERISA plan,” it “preserves ERISA’s ‘uniform regulatory regime.’” Id. at 655–656 (citation omitted).

That same reasoning foreclosed Petitioner’s challenge

here.

B. Fielder Is Not In Conflict

There is no conflict between the decision below and

the Fourth Circuit’s decision in Fielder because the

relevant laws materially differ. As the United States

explained the last time a petitioner made this argument, “the Maryland law in Fielder effectively forced

the single affected employer to alter its ERISA plan.”

U.S. Golden Gate Br. 20. The Seattle ordinance, by

contrast, does not require any ERISA plan changes.

1. The Fourth Circuit held preempted a Maryland

law that required employers with over 10,000 employ-

14

ees “to spend at least 8% of their total payrolls on employees’ health insurance costs or pay the amount

their spending falls short to the State of Maryland.”

Fielder, 475 F.3d at 183. There was no option, as there

is here, for an employer to make cash payments directly to its employees. Although the Maryland law

ostensibly provided employers the option to pay the

state, after examining the statute and legislative record, the Fourth Circuit concluded that option was

nothing more than a “penalty” imposed to force employers to change their health plans. Id. at 193–194.

No “reasonable employer” would select that option because it would not benefit either the employer or its

employees. Id. at 193. As the Fourth Circuit explained,

Healthcare benefits are a part of the total package of employee compensation an employer

gives in consideration for an employee’s services. An employer would gain from increasing

the compensation it offers employees through

improved retention and performance of present

employees and the ability to attract more and

better new employees. In contrast, an employer

would gain nothing in consideration of paying a

greater sum of money to the State.

Ibid.

Because “the only rational choice employers” had

was “to structure their ERISA healthcare benefit

plans so as to meet the minimum threshold,” the act

“effectively mandate[d] that employers structure their

employee healthcare plans to provide a certain level

of benefits.” Fielder, 475 F.3d at 193. The act thus had

15

an impermissible “connection with” ERISA plans. Id.

at 194.2

2. By contrast, Seattle’s ordinance provides employers a realistic, non-ERISA alternative: paying

their employees additional cash wages. Unlike a penalty paid to the state, these cash payments to employees indisputably benefit employees. And as the Fourth

Circuit explained, paying additional compensation to

employees likewise benefits employers. Fielder,

475 F.3d at 193. This favorable outcome for employees

and employers under Seattle’s ordinance is the same

regardless of whether employers make payments

through an ERISA plan or through additional cash

wages. Ibid. A “rational” employer thus could readily

choose the cash option. Ibid.

3. Perhaps recognizing that the Seattle ordinance

does not resemble the Fielder statute, Petitioner fabricates an “independent” holding in Fielder: that “even

if there were a ‘meaningful avenue’ by which employers could comply without creating or altering ERISA

plans,” the Maryland law would still be preempted for

“interfer[ing] with ‘uniform nationwide’ plan administration.” Pet. 17–18 (quoting 475 F.3d at 196–197).

The Fourth Circuit made no such holding.

Contrary to Petitioner’s assertion, it was impossible to fully comply with the law through non-ERISA

spending without also altering or creating an ERISA

plan. The court explained that even if an employer

2

Accord Retail Indus. Leaders Ass’n v. Suffolk County, 497 F.

Supp. 2d 403, 416–418 (E.D.N.Y. 2007) (addressing law that was

“substantially similar” to the Fielder statute and concluding that

“the alternative options for compliance” were “unrealistic”).

16

could incur some spending through non-ERISA alternatives, the only realistic way to spend enough to “satisfy” the law’s demands would require “alter[ing] its

package of ERISA health insurance plans.” Fielder,

475 F.3d at 197. “In short, the [Maryland law] leaves

employers no reasonable choices except to change how

they structure their employee benefit plans.” Ibid.

Thus, when the Fourth Circuit concluded the Maryland law would “deny Wal-Mart the uniform administration of its healthcare plan[]” (Fielder, 475 F.3d at

197; see Pet. 18), that was because it found that the

statute required alterations to ERISA plans one way

or another. As the court unambiguously stated at the

outset of its opinion, “[b]ecause Maryland’s [law] effectively requires employers . . . to restructure their employee health insurance plans, it conflicts with

ERISA’s goal of permitting uniform nationwide administration of these plans.” Fielder, 475 F.3d at 183

(emphasis added).3

4. In sum, all of the Fourth Circuit’s analysis

flowed from its conclusion that the only realistic option for the employer to comply with the Maryland law

was to restructure its ERISA plan. See U.S. Golden

3

The dissent from the denial of rehearing en banc in Golden

Gate (see Pet. 18) misread Fielder in the same manner as Petitioner. As Judge Fletcher’s concurrence explained, “the dissent

quotes the first and last sentences from a passage from Fielder

but omits the intervening three sentences.” Golden Gate Rest.

Ass’n v. City & County of San Francisco, 558 F.3d 1000, 1002–

1003 (9th Cir. 2009) (Fletcher, J., concurring). “The omitted sentences make clear the difference between the Maryland law and

the San Francisco Ordinance,” namely that “Wal-Mart’s use of

the non-ERISA spending option would necessarily produce a

change in its ERISA plans.” Id. at 1003.

17

Gate Br. 19–20. Accordingly, as the United States previously recognized, Fielder and Golden Gate “do not

present a direct conflict that warrants this Court’s review.” Id. at 17.

C. Merit Construction Is Not In Conflict

For similar reasons, there is no conflict with the

First Circuit’s decision in Merit Construction. Like the

law in Fielder, this law demanded that an employer

necessarily “modify” an existing ERISA plan or create

“a separate plan.” 759 F.3d at 130. The court thus easily and expressly distinguished the Ninth Circuit’s

rule as “not to the contrary.” Ibid.

1. The municipal law in Merit Construction “categorically require[d] all contractors on Quincy public

works projects to operate a Massachusetts-approved

apprentice training program” that must comply with

“a raft of stringent conditions.” 759 F.3d at 129. The

First Circuit acknowledged that municipal laws may

“influence” ERISA plans, but cautioned that such

laws may not cross the line into “coercion.” Ibid. The

Quincy law flunked that test. “It mandates an employee benefit structure and specifies how that structure must be administered.” Ibid.

Seattle’s ordinance, by contrast, does not mandate

anything about ERISA plans. An employer may comply without having any plan at all. SMC

14.28.060.B.1. If an employer chooses to comply by

contributing to an ERISA plan, the ordinance imposes

no requirements on such plans: they need not provide

any particular type or level of benefits. SMC

14.28.060.B.2–3. Even if an employer’s plan contributions are insufficient to satisfy its expenditure obligations, the ordinance still requires no changes to

18

ERISA plans: the employer may simply pay the balance in additional wage-like compensation. SMC

14.28.060.B, C.

2. The First Circuit expressly distinguished

Golden Gate as “not to the contrary.” Merit Construction, 759 F.3d at 130. The Ninth Circuit “recognized

that state laws that ‘required employers to have [benefit] plans, and . . . dictated the specific benefits employers were to provide through those plans’ would be

preempted.” Ibid. (alteration in original) (quoting

Golden Gate, 546 F.3d at 655). As the First Circuit’s

opinion thus makes clear, the Ninth Circuit also

would have preempted the Quincy ordinance.

3. Petitioner again tries to invent an alternative

holding: that the Quincy law would be preempted

even if a contractor could comply “without altering or

creating ERISA plans.” Pet. 20 (citing 759 F.3d at

130). Like the Fourth Circuit, however, the First Circuit never considered such a proposition because the

non-ERISA alternative was illusory: “To comply with

the [o]rdinance, an employer with an ERISA-governed

apprentice training program either would have to

modify that program to provide apprentices on

Quincy-based projects with special benefits or would

have to establish and coordinate a separate plan into

which such apprentices would be funneled.” 759 F.3d

at 130 (citing Fort Halifax, 482 U.S. at 13).

In other words, an employer would have to modify

an existing ERISA plan or create one anew. That is

clear from the First Circuit’s reliance on an Eighth

Circuit decision finding preempted a law that “directly influence[d] how the ERISA plans are administered.” Minnesota Chapter of Associated Builders &

Contractors., Inc. v. Minnesota Dep’t of Pub. Safety,

19

267 F.3d 807, 817 (8th Cir. 2001); see also id. at 814

(explaining that the law did “more than merely encourage or provide economic incentives” but rather

“dictate[d] the choices facing ERISA plans”) (citation

omitted); Merit Construction, 759 F.3d at 130. There

simply was no other form of compliance with the

Quincy law that did not involve a benefit plan, such

as the option to make wage-like payments to employees.

*

*

*

In sum, no circuit has held that ERISA preempts a

state or local law where an employer has a non-ERISA

means of compliance consisting of direct, wage-like

payments to employees. The Second, Third, Sixth,

Eighth, and Ninth Circuits have all upheld such laws.

And the First and Fourth Circuits have never considered them. There is no circuit conflict.

II. THE

NINTH

CIRCUIT

CORRECTLY

APPLIED THIS COURT’S PRECEDENT

Petitioner’s fallback argument is that the Ninth

Circuit’s decision conflicts with this Court’s decisions

on three separate preemption grounds. Pet. 15, 21–31.

Given the circuits’ agreement on the underlying legal

rule, these arguments essentially ask this Court to interpret the Seattle ordinance differently than the

Ninth Circuit. In other words, Petitioner seeks error

correction on narrow, case-specific grounds that do not

warrant this Court’s attention. Regardless, Petitioner’s merits arguments are wrong.

20

A. The Ordinance Does Not Have An Impermissible “Connection” With ERISA Plans

1. A law has an impermissible connection with an

ERISA plan if it “require[s] providers to structure benefit plans in particular ways” or “if ‘acute, albeit indirect, economic effects of the state law force an ERISA

plan to adopt a certain scheme of substantive coverage.’” Rutledge, 141 S. Ct. at 480 (citation omitted).

But this Court has repeatedly emphasized that a law

can “increase costs or alter incentives for ERISA

plans” or “cause[] some disuniformity in plan administration” without creating an impermissible “connection.” Ibid.

For instance, Dillingham considered a state prevailing wage law that allowed contractors to pay less

to workers in approved apprenticeship programs. 519

U.S. at 319. This law did not have an impermissible

“connection” with ERISA plans because “[n]o apprenticeship program [wa]s required” and contractors

were free to hire apprentices from approved programs

or unapproved programs. Id. at 332. The fact that contractors could pay lower wages only if they hired from

California-approved programs “merely” supplied an

“economic incentive” for ERISA programs to comply

with California’s standards. Ibid. In other words,

“[t]he prevailing wage statute alters the incentives,

but does not dictate the choices, facing ERISA plans.”

Id. at 334; see also Merit Construction, 759 F.3d at 128

(“laws that merely exert an ‘indirect economic influence’ on a plan do ‘not bind plan administrators to any

particular choice’”) (citation omitted); Fielder,

475 F.3d at 193 (same).

2. Like the Dillingham statute, the Seattle ordinance does not dictate any decision to alter (or create)

21

an ERISA plan. An employer need not have any

ERISA plan whatsoever and remains free to structure

its ERISA plan in any way it chooses. At most, the Seattle ordinance, like the Dillingham statute, merely

supplies an economic incentive. But there is even less

of an incentive here because unlike the Dillingham

statute, the Seattle ordinance requires employers to

expend the same amount of money under any of the

available alternatives.

3. Petitioner contends that this case is controlled

by Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141

(2001), but it mischaracterizes that decision. According to Petitioner, “compliance” with the Egelhoff statute “did not require altering ERISA plans.” Pet. 24.

Not so. “[T]he law in Egelhoff was preempted because

it offered no method of compliance that did not require

a change in the way an ERISA plan was operated or

written.” U.S. Golden Gate Br. 20. The statute dictated rules for determining ERISA plan beneficiaries

upon divorce by requiring benefits be paid “to the beneficiaries chosen by state law, rather than to those

identified in the plan documents.” Egelhoff, 532 U.S.

at 147. The statute thus bound “ERISA plan administrators to a particular choice of rules for determining

beneficiary status.” Ibid.

Although the statute allowed plans to opt out, they

could do so only by amending their plan documents:

“Plan administrators must either follow Washington’s

beneficiary designation scheme or alter the terms of

their plan so as to indicate that they will not follow it.”

532 U.S. at 150. In other words, “the only way the fiduciary can administer the plan according to its terms

is to change the very terms he is supposed to follow.”

Id. at 151 n.4.

22

The Seattle ordinance is obviously distinguishable.

It does not impose any requirements on ERISA plans

and an employer can both comply with the ordinance

and adhere to its plan terms without changing a word

of its plan.

Petitioner complains that employers must evaluate

their expenditure obligations and retain records of

their payments, Pet. 24–25, but that does not create

an impermissible connection. This is no different from

the obligations imposed by any minimum wage law.

While the employer may choose to count ERISA plan

expenditures towards its expenditure obligation, even

if it does, it need not make any changes whatsoever to

its plan. Thus, the fact remains that in stark contrast

to the Egelhoff statute, an employer need not change

its ERISA plan, and plan administrators need not

“master” the Seattle ordinance or any other analogous, hypothetical, future ordinance. Contra Pet. 24–

25. Plan administration remains uniform.

4. Petitioner argues that in distinguishing

Egelhoff, Golden Gate erred by relying on the difference between obligations imposed on employers and

obligations imposed on plans. Pet. 25–26. But as already explained, Egelhoff is also distinguishable because that ordinance required employers to amend

their plans. As applied here, the pertinent distinction

is not just that the Seattle expenditure obligation falls

on employers, but also that the ordinance does not

concern plan administration whatsoever; it concerns

an employer’s obligations to pay wages and retain related employment records.

This Court has never held that all burdens imposed on employers are preempted. Petitioner cites

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990),

23

but Ingersoll-Rand clearly recognized that ERISA’s

preemption provision “was intended to ensure that

plans and plan sponsors would be subject to a uniform

body of benefits law,” id. at 142 (emphasis added) and

that “only state laws that relate to benefit plans are

pre-empted,” id. at 139.

Ultimately, Petitioner’s position would prove too

much: if ERISA’s preemption test were satisfied by

the imposition of any burden on employers, regardless

of any connection to ERISA plans, ERISA would

preempt all wage, hour, and other employment laws,

which have long been recognized as within the proper

purview of state and local regulation. See, e.g., Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724,

756 (1985); Self-Insurance Inst. of Am. v. Snyder,

827 F.3d 549, 556–558 (6th Cir. 2016).

B. The Ordinance Does Not Impermissibly

“Reference” ERISA Plans

1. “A law refers to ERISA if it ‘acts immediately

and exclusively upon ERISA plans or where the existence of ERISA plans is essential to the law’s operation.’” Rutledge, 141 S. Ct. at 481 (citation omitted).

Petitioner ignores that test. An employer can comply

with every aspect of the Seattle ordinance “whether or

not” it has an ERISA plan. Ibid.

2. Greater Washington is distinguishable. Contra

Pet. 26–28. Under the D.C. law considered there, employers were required to provide benefits through a

workers’ compensation plan “‘equivalent to the existing health insurance coverage’” they provided under

their ERISA plans. Id. at 127–128 (citation omitted).

The existence of an ERISA plan was essential to the

24

operation of the law because the level of ERISA benefits provided the touchstone of an employer’s compliance with the statute. Any change to an ERISA plan’s

benefit level also changed the amount of workers’ compensation benefits the employer had to provide. See

U.S. Golden Gate Br. 21.

In sharp contrast, the expenditure obligation under the Seattle ordinance does not depend on what an

ERISA plan provides. Instead, it is a fixed dollar

amount that can be met purely through a cash payment. Cf. U.S. Golden Gate Br. 21. Unlike under the

D.C. law, an increase or decrease in ERISA benefits

does not alter the employer’s total expenditure obligation under Seattle’s ordinance. Contra Pet. 27.

3. Petitioner also lists a few ancillary provisions in

the ordinance that mention health plans (Pet. 28), but

those provisions apply only if the employer chooses to

make its payments through a plan. See SMC

14.28.260.B, 14.28.060.C, D.1. Because an employer

may comply with the ordinance without using any

ERISA plan, ERISA plans are not essential to the operation of the ordinance and the ordinance does not

act exclusively on ERISA plans. See Rutledge,

141 S. Ct. at 481 (explaining that a law does not impermissibly “reference” ERISA plans where it may

take full effect regardless of whether any ERISA plan

exists) (citing, e.g., Dillingham, 519 U.S. at 328).

Contrary to Petitioner’s suggestion (Pet. 28),

Mackey v. Lanier Collection Agency & Service, Inc.,

486 U.S. 825 (1988), does not stand for the proposition

that any literal reference to an ERISA plan renders a

statute preempted. Rather, as this Court subsequently clarified, Mackey held that a law “references”

an ERISA plan if it “acts immediately and exclusively

25

upon ERISA plans.” Dillingham, 519 U.S. at 325 (emphasis added). The law in Mackey “solely applie[d]” to

ERISA plans by expressly exempting them from a

state garnishment statute. 486 U.S. at 829. Because

the statute “single[d] out ERISA employee welfare

benefit plans for different treatment,” it acted immediately and exclusively upon ERISA plans and was

preempted. Id. at 830.

In contrast, the Seattle ordinance treats all employers equally, whether they have ERISA plans or

not; all employers must pay the statutorily defined

compensation.

4. Finally, what minimal incentives (if any) the ordinance creates for ERISA plans (see Pet. 28–29) do

not constitute an impermissible “reference.” For one

thing, this argument conflates the “reference” and

“connection” prongs. See, e.g., Gobeille v. Liberty Mut.

Ins. Co., 577 U.S. 312, 320 (2016) (“A state law also

might have an impermissible connection with ERISA

plans if ‘acute, albeit indirect, economic effects’ of the

state law ‘force an ERISA plan to adopt a certain

scheme of substantive coverage[.]”) (citation omitted).

And in any event, “ERISA does not pre-empt” laws

that “alter incentives for ERISA plans without forcing

plans to adopt any particular scheme of substantive

coverage.” Rutledge, 141 S. Ct. at 480; see supra

pp. 20-21.

Because the expenditure obligation is identical

whether paid through cash payments or benefit plans

(or any combination thereof), SMC 14.28.060.A & B,

the ordinance does not privilege one form of payment

over any other. And contrary to Petitioner’s suggestion (Pet. 28), direct cash payments could be paid

26

through payroll along with other wages and would not

require employers to “establish a separate scheme.”

Petitioner also believes the ordinance’s alternative

waiting period provisions—which accommodate existing plan features—might create a modest incentive

for employers to amend their plans to delay their contributions. Pet 28–29. But it is doubtful Petitioner has

standing to challenge such provisions, which benefit

employers. And in any event, these modest incentives

do not rise to the level of “acute” economic effects that

“force” ERISA plans to adopt any particular structure,

as would be required to satisfy the “connection with”

test. Gobeille, 577 U.S. at 320.

C. The Ordinance Does Not Require Employers To Create ERISA Plans

Finally, Petitioner insists the courts below erred in

rejecting the argument that the Seattle ordinance’s

direct cash payment option would itself constitute an

ERISA plan. Pet. 29–31.

Even under Petitioner’s (mistaken) view, there is

plainly no “conflict[] with relevant decisions of this

Court.” S. Ct. R. 10(c); see Pet. 15. The only relevant

decisions the Petition cites—Fort Halifax and Morash—held that the laws at issue did not create

ERISA “plans.” And to the extent Petitioner complains about the lower courts’ understanding of the intricacies of the Seattle ordinance, that case-specific interpretation does not satisfy Rule 10.

Regardless, Petitioner’s argument is meritless. An

ERISA “plan” exists only if an employer is providing

health “benefits” to its employees. 29 U.S.C. 1002(1)

(emphasis added). The cash payment is no different

27

than regular wages. While Seattle may hope that employees use the wages for healthcare, nothing in the

ordinance requires or even pressures employees to do

so. There are no strings attached. E.g., Pet. App. 14

n.5.

And Fort Halifax and Morash make clear that to

constitute a plan, the payments must require the employer to establish a discretionary administrative

scheme to process and pay benefits. In Fort Halifax,

the Court relied on the fact that the state law imposed

“no need for an ongoing administrative program for

processing claims and paying benefits.” 482 U.S. at 12

(emphasis added). The Court explained that benefit

“plans” require claims adjudications and other “administrative activity potentially subject to employer

abuse.” Id. at 16. The state statute did not implicate

such concerns because the “statute itself” made clear

the terms of the employer’s payment obligation. Ibid.

The same is true of the Seattle ordinance’s direct pay

option.

Morash likewise held that a Massachusetts vacation pay law was not preempted because it “present[ed] none of the risks that ERISA is intended to

address.” 490 U.S. at 115. ERISA’s protections were

designed to “insure against the possibility that the

employee’s expectation of the benefit would be defeated through poor management by the plan administrator.” Ibid. Although a vacation pay program may

constitute an ERISA plan if the benefits are “payable

only upon the occurrence of a contingency outside of

the control of the employee,” the vacation pay required

by the Massachusetts law, like the cash payments under the Seattle ordinance, is paid directly from employers’ general assets in amounts that are “fixed, due

28

at known times, and do not depend on contingencies

outside the employee’s control.” Id. at 115–116. Accordingly, “[i]f there is a danger of defeated expectations, it is no different from the danger of defeated expectations of wages for services performed—a danger

Congress chose not to regulate in ERISA.” Id. at 115.

Although Petitioner attempts to distinguish Fort

Halifax and Morash on the grounds that they addressed “one-time” payments (Pet. 29), that ignores

the bulk of the Court’s reasoning. The cash-payment

option under the Seattle ordinance does not require

the kind of ongoing, discretionary administrative

scheme that Fort Halifax and Morash described. Contra Pet. 30. Employers have no discretion over the

amounts or eligibility for payments: all non-managerial employees working 80 or more hours per month

are eligible, SMC 14.28.030.A, and the statute specifies the amount of the expenditure obligation, which

depends only on whether employees have a spouse, domestic partner, or dependents. SMC 14.28.060.A.4

Moreover, the reporting and recordkeeping requirements are materially identical to the mechanical

obligations employers fulfill under minimum-wage

and tax laws. In the words of the district court: “[T]he

4

The process for determining family composition is straightforward. Contra Pet. 30. Employers may avoid any discrimination

concerns by “provid[ing] enough information about the reason for

their inquiry and only ask[ing] for information after the employee has been hired.” Improving Access to Medical Care for Hotel Employees Ordinance; Question and Answers (“Seattle Q&A”)

7–8, Seattle Off. of Lab. Standards, https://bit.ly/3vDrXT5 (last

visited Apr. 23, 2022). And “[i]f an employer is unable to obtain

the information,” it “may assume that the employee qualifies for

the rate for an employee with no spouse/domestic partner or dependents, until otherwise notified by the employee.” Ibid.

29

employer actually has no responsibility other than to

retain records that it would maintain in the normal

course of business. Those minimal record keeping and

administrative requirements do not give employers

discretion to deny or limit benefits under the Ordinance.” Pet. App. 14–15.5

D. The Ninth Circuit Correctly Applied The

Presumption Against Preemption, Although Its Decision Would Have Been The

Same Regardless

Petitioner argues that Puerto Rico v. Franklin California Tax-Free Trust, 579 U.S. 115 (2016), a bankruptcy case, eliminated the presumption against

preemption for every federal statute containing an express preemption provision. Pet. 32.

This argument is beside the point here. Although

the Ninth Circuit disagreed with Petitioner’s argument about the presumption, it also held that “[e]ven

so,” the Seattle ordinance is not preempted. Pet. App.

2. The presumption thus did not affect the outcome.

Cf. Fielder, 475 F.3d at 191 (applying presumption);

Merit Construction, 759 F.3d at 128 (same).

In any event, Petitioner is wrong. Franklin stands

only for the proposition that where an express

preemption clause’s meaning is clear, the presump5

Petitioner conflates issues by discussing the minimal recordkeeping requirements related to “employees who decline coverage,” Pet. 30–31, as employees may decline coverage only where

an employer makes payments through an ERISA plan. SMC

14.28.060.D; Seattle Q&A 8 (provision “necessarily” applies only

where employer make “payments toward an employer-sponsored

health insurance plan”). This has no bearing on whether the cash

payment option constitutes an ERISA plan.

30

tion against preemption cannot override that unambiguous text. 579 U.S. at 125–127. Gobeille reached a

similar holding addressing ERISA. 577 U.S. at 325.

The Court presumed that Congress does not supplant

state law, especially in areas of “traditional state

power,” but held that the presumption was overcome

because the state law in Gobeille came within the

heart of ERISA’s preemption clause. Id. at 325–326.

Petitioner’s reading of Franklin would mean that

a bankruptcy case silently overruled decades of

ERISA precedents applying the presumption, see, e.g.,

Travelers, 514 U.S. 655–662—and that it did so by citing a case, Gobeille, that itself acknowledged that the

presumption should be considered in ERISA cases.

That is not a reasonable interpretation of Franklin

and Gobeille.

III. PETITIONER OFFERS NO REASON TO

UPSET THE CIRCUITS’ LONGSTANDING,

UNIFORM INTERPRETATION OF ERISA

Petitioner claims the Court’s review is “urgently

needed,” Pet. 33, but it fails to show any pressing

problem of legal or practical significance. The prevailing wage cases that first addressed alternative, nonERISA cash payments were decided nearly 30 years

ago. The main circuit decisions invoked by Petitioners—Golden Gate and Fielder—were decided over 10

years ago. Petitioner admits there was a “lull” in new

legislation after Fielder and Golden Gate. Pet. 3. Petitioner claims this issue has “returned,” ibid., but fails

to show it has arisen with any frequency whatsoever.

The Ninth Circuit followed clear principles about

which no circuit disagrees. That decades-long status

quo has not undermined ERISA. Petitioner and its

31

amici’s strenuous objection to increasing employee

compensation does not satisfy Rule 10.

A. Petitioner and its numerous amici have not

cited a single recent example of a local government

considering—much less adopting—an ordinance that

regulates or mandates ERISA benefits.

1. Petitioner’s primary effort to demonstrate the issue’s importance rests on pure speculation. Petitioner

cites an amicus brief filed by a few other cities that

expressed a vague “desire” to pursue local health-related measures. Pet. 3; see id. at 35–36. But Petitioner

misconstrues that brief. Petitioner points to an ambiguous sentence indicating that certain cities “have

studied the San Francisco model,” id. at 35 (citation

omitted), but the article cited in the amicus brief discusses a program called Healthy San Francisco, which

is a city-operated program that provides direct health

care services.6 While the article briefly discussed San

Francisco’s Health Care Security Ordinance

(“HCSO”), which is the employer-spending ordinance

addressed in Golden Gate, the article does not indicate

that other cities have considered pursuing the employer spending requirements of the HCSO. Likewise,

Petitioner quotes the amicus brief as saying New York

and Los Angeles “are also pursuing local healthcare

reforms,” though Petitioner adds the word “similar” to

the sentence. Id. at 35–36 (citation omitted). But here

6

Glenn Daigon, Cities are Blazing the Trail Toward Healthcare

For All, Salon (Feb. 10, 2019), https://bit.ly/37ydlfZ (last visited

Apr. 23, 2022).

32

again, the cited articles indicate these cities are considering direct health services like Healthy San Francisco rather than an employer payment obligation.7

Petitioner provides no indication that any of the

cities it identifies have considered or adopted any law

imposing obligations on employers. Indeed, Petitioner

provides no specifics whatsoever about any such laws.

Ultimately, it remains to be seen what any future laws

will look like or how courts will address them. Should

some jurisdiction go further than Seattle and “dictate[] the specific benefits employers [a]re to provide,”

Merit Construction, 759 F.3d at 130 (quoting Golden

Gate, 546 F.3d at 655), the Court can take that case.

Petitioner’s protestations about the changed state of

affairs since Golden Gate are unfounded.

2. Amicus the Chamber of Commerce’s effort to fill

the Petition’s gap only undermines the pitch for certiorari. The Chamber cites various minimum or living

wage ordinances,8 but these merely contain optional

benefit alternatives (i.e., a lower minimum wage

where employers choose to offer benefits), which are

analogous to the prevailing wage provisions that

have, for decades, been upheld by every circuit. See

supra Part I.A. Those laws plainly do not interfere

7

Sarah Varney, Beyond Beltway’s ‘Medicare-for-All’ Talk, Democrats in States Push New Health Laws, Kaiser Health News

(Feb. 14, 2019), https://bit.ly/3rKm31r (last visited Apr. 23,

2022); Daigon, supra note 6.

8

Chamber Br. 13–14 (citing Berkeley, Cal. Mun. Code 13.27;

Oakland, Cal. Mun. Code Ch. 2.28; Marin Cnty., Cal. Admin. &

Pers. Code § 2.50.050; San Leandro, Cal. Mun. Code § 1-6-625;

Sonoma, Cal. Mun. Code § 2-377; Richmond, Cal. Mun. Code Ch.

7.108.040(A)(5)); id at 15 (citing Albuquerque, N.M. Mun. Code

§ 13-12-3(b); Bernalillo Cnty., N.M. Cnty. Code § 2-220(d)).

33

with uniform benefits administration, and there is no

reason to upset the status quo by wiping them off the

books.

For instance, the Chamber and other amici (American Benefits Council Br. 20–21; Chamber Br. 13) cite

an Oakland ordinance that requires employers to pay

employees a $20 minimum wage, which is reduced to

$15 if the employer provides health insurance. Oakland, Cal. Mun. Code Ch. 5.93. Although another industry group initially challenged this ordinance on

ERISA preemption grounds, the district court dismissed the claims based on the basic principles addressed above, and the industry group never appealed. See Cal. Hotels & Lodging Ass’n v. City of Oakland, 393 F. Supp. 3d 817, 829 (N.D. Cal. 2019). Finally, although the Chamber cites the San Francisco

HSCO addressed in Golden Gate (and an analogous

San Francisco ordinance applicable to airport workers, (S.F., Cal. Admin. Code § 12Q)), this hardly

demonstrates any trend in the years since Golden

Gate.

B. Petitioner’s “uniformity” concerns are again

based on nothing more than unfounded speculation.

Contrary to Petitioner’s baseless assertions, the decision below does not open the floodgates for myriad

laws “requir[ing] plans and plan sponsors to adopt”

specific plan terms, such as “vesting rules” or “leave

entitlements,” thus requiring employers to “tailor[]”

their plans “to the idiosyncratic policy preference of

every jurisdiction in which they operate.” Pet. 34–36.

Seattle’s ordinance does not require plan sponsors to

make any such changes to their plans, and nothing in

the Ninth Circuit’s decision would permit such an ordinance. Indeed, the Ninth Circuit has made clear

34

that ERISA does preempt laws that require changing

ERISA plans. Supra p. 10.

Petitioner and its amici also complain about employers having to comply with different local wage

laws. Pet. 36. But employers have long been required

to monitor and comply with state and local wage and

other employment laws, and ERISA’s preemption provision was never intended to change this. As this

Court has made clear, “States possess broad authority

under their police powers to regulate the employment

relationship,” including through “minimum and other

wage laws.” Metropolitan Life, 471 U.S. at 756 (citation omitted); see Keystone, 37 F.3d at 960 (“ERISA’s

preemption clause aims ‘to ensure benefit plans will

be governed by only a single set of regulations,’ not to

bestow on employers a uniform regulatory and economic environment for all their activities across the

country.”) (citation omitted). Petitioner and its amici

do not identify a single decision that has approved a

law that crossed that line and directly regulated

ERISA plans.

IV. THIS CASE IS A POOR VEHICLE TO

DECIDE THE QUESTION PRESENTED

Petitioner’s question presented turns on the provisions of the Seattle ordinance that allow compliance

through ERISA plan expenditures. But this case is a

poor vehicle to address that issue. That is because the

Seattle ordinance contains a strong severability provision:

If any clause, sentence, paragraph, subdivision,

section, subsection, or portion of this Chapter

14.28, or the application thereof to any employer, employee, or circumstance, is held to be

35

invalid, it shall not affect the validity of the remainder of this Chapter 14.28 or the validity of

its application to other persons or circumstances.

SMC 14.28.250. The Court is bound by that provision.

See, e.g., Leavitt v. Jane L., 518 U.S. 137, 139 (1996)

(per curiam) (“Severability is of course a matter of

state law.”).

Accordingly, even if Petitioner could find some

“reference” or “connection” to ERISA plans in the provisions allowing employers to make payments

through ERISA plans, the severability provision

means that employers would still have to satisfy the

law by paying additional wages. And as discussed

above, that cash-payment option is not even plausibly

the subject of a conflict among the courts of appeals or

with this Court’s decisions.

Critically, employers who oppose the ERISA payment options would be in exactly the same position

they are in now: they already can choose not to change

their ERISA plans (if they have them). They do not

need a court order prohibiting them from doing what

they need not do in the first place. And no matter what

the outcome, such employers would still be required

to pay the additional wages.9

9

This vehicle concern will not always arise. For one thing, political constraints may prevent state and local governments from

adding a similar severability provision—they will not want to enact a law that risks losing the flexibility of compliance through

health plan expenditures. For another, if Petitioner is correct

about the cash-payment option, then a court will soon hold a similar law preempted, teeing up this issue for review.

36

CONCLUSION

The Court should deny the Petition.

Respectfully submitted.

ANN DAVISON

City Attorney

ERICA R. FRANKLIN

Assistant City Attorney

CITY OF SEATTLE

701 Fifth Ave., Suite 2050

Seattle, WA 98104-7097

(206) 684-8200

ERIN M. RILEY

MATTHEW GEREND

KELLER ROHRBACK L.L.P.

1201 Third Ave., Suite 3200

Seattle, WA 98101

(206) 623-1900

PETER K. STRIS

Counsel of Record

RACHANA A. PATHAK

DOUGLAS D. GEYSER

JOHN STOKES

STRIS & MAHER LLP

777 S. Figueroa Street

Suite 3850

Los Angeles, CA 90017

(213) 995-6800

pstris@stris.com

JEFFREY LEWIS

KELLER ROHRBACK L.L.P.

180 Grand Ave., Suite 1830

Oakland, CA 94612

(510) 463-3900

Counsel for Respondent

APRIL 25, 2022

4867-6139-2925, v. 7