9th Circuit Lets Stand San Francisco Health Care Ruling

March 10, 2009 (PLANSPONSOR.com) - The 9th U.S. Circuit Court of Appeals voted to deny a request by business groups for all of the judges to rehear their arguments that San Francisco's health care ordinance is pre-empted by the Employee Retirement Income Security Act (ERISA).

Leading the court, Judge William Fletcher noted in its opinion that while the San Francisco Health Care Security Ordinance requires city employers to spend a minimum amount on employee health care plans or pay a tax to San Francisco’s “Health Access Program,” which provides free care to low- and moderate-income residents, it does not require employers to establish a new ERISA health care plan or modify an existing one.

However, while the majority of the 9 th Circuit panel voted against rehearing the case, eight judges dissented, causing speculation that the case will now be approved for review by the U.S. Supreme Court. The Recorder reports that Judge Milan Smith Jr. and seven colleagues sharply critiqued the majority’s decision, saying it contradicts a previous 4th Circuit ruling in a similar case (see Judge: ERISA Trumps MD ‘Wal-Mart’ Health Care Law ) and goes against ERISA.

“In my view, if our decision in this case remains good law, similar laws will become commonplace, and the congressional goal of national uniformity in the area of employer-provided health care will be thoroughly undermined, with significant adverse consequences to employers and employees alike,” Smith wrote in his dissent, according to The Recorder.

Richard Rybicki, an attorney with the Napa-based Employment Law Advocates who helped represent the Golden Gate Restaurant Association, which originally challenged the mandate, said the plaintiffs will petition the Supreme Court. He said he sees the case as “the court’s opportunity to both rectify an anomaly in the system — and an opportunity for the court to clarify the reach of [federal health care law] pre-emption,” according to the news report.

The 9 th Circuit ruled in September 2008 that the ordinance was not pre-empted by ERISA. The Golden Gate Restaurant Association (see SF Restaurant Group Asks for 9th Circuit Rehearing ) as well as a number of industry groups (see Industry Groups Also Ask for 9th Circuit Rehearing of San Francisco Health Care Law ) then petitioned the appellate court for a rehearing en banc.

The latest 9 th Circuit opinion is here .