Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 1 of 30 1 THE HONORABLE THOMAS S. ZILLY 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 THE ERISA INDUSTRY COMMITTEE, Plaintiff, 11 12 13 14 15 v. CITY OF SEATTLE, Defendant. Case No. 2:18-cv-01188 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT ORAL ARGUMENT REQUESTED 16 17 18 19 20 21 22 23 24 25 26 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 2 of 30 1 TABLE OF CONTENTS 2 Page 3 TABLE OF AUTHORITIES ......................................................................................................... ii 4 INTRODUCTION ..........................................................................................................................1 5 BACKGROUND ............................................................................................................................1 6 A. The Predecessor to SMC 14.28 and ERIC’s Challenge.................................................1 7 B. SMC 14.28’s Basic Provisions.......................................................................................2 8 C. SMC 14.28’s Exceptions and Waiver Requirements .....................................................4 9 D. SMC 14.28’s Record-Keeping and Enforcement Provisions ........................................5 10 STANDARD UNDER RULE 12(b)(6) ..........................................................................................6 11 ARGUMENT ..................................................................................................................................6 12 I. ERISA BROADLY PREEMPTS ANY STATE LAW HAVING A REFERENCE TO OR CONNECTION WITH AN ERISA PLAN ...................................6 II. THERE IS NO PRESUMPTION AGAINST PREEMPTION IN THIS CASE ..................................................................................................................................8 III. ERISA PREEMPTS SMC 14.28 BECAUSE, UNDER ANY OF ITS OPTIONS, SMC 14.28 REQUIRES THE CREATION OF ERISA PLANS ..............................................................................................................................12 IV. ERISA PREEMPTS SMC 14.28 BECAUSE EACH OF ITS OPTIONS MAKES AN IMPERMISSIBLE REFERENCE TO ERISA PLANS BY MEASURING COMPLIANCE THROUGH THE VALUE OR LEVEL OF BENEFITS PROVIDED ............................................................................................17 V. ERISA PREEMPTS SMC 14.28 BECAUSE IT OTHERWISE REFERENCES ERISA PLANS THROUGHOUT ITS PROVISIONS ...........................19 VI. ERISA PREEMPTS SMC 14.28 BECAUSE IT HAS A CONNECTION WITH ERISA PLANS ......................................................................................................21 13 14 15 16 17 18 19 20 21 22 CONCLUSION.............................................................................................................................24 23 24 25 26 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - i CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 3 of 30 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1981)..................................................................................................................7 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Aloha Airlines v. Ahue, 12 F.3d 1498 (9th Cir. 1993) .......................................................................................... passim Ariz. v. Inter Tribal Council of Ariz., Inc., 570 U.S. 1 (2013)......................................................................................................................9 Ashcroft v. Iqbal, 556 U.S. 662 (2009)..................................................................................................................6 Atay v. Cty. of Maui, 842 F.3d 688 (9th Cir. 2016) ..................................................................................................10 Bd. of Trs. of Glazing Health & Welfare Tr. v. Chambers, 903 F.3d 829 (9th Cir. 2018), vacated on unrelated grounds, 941 F.3d 1195 (9th Cir. 2019) ........................................................................................................................12 Bd. of Trs. of Glazing Health & Welfare Tr. v. Chambers, 923 F.3d 1162 (9th Cir. 2019) ................................................................................................12 Bogue v. Ampex Corp., 976 F.2d 1319 (9th Cir. 1992) ........................................................................................ passim Cal. Div. of Labor Stds. Enforcement v. Dillingham Constr., N.A., 519 U.S. 316 (1997)..................................................................................................................7 Chamber of Commerce v. Whiting, 563 U.S. 582 (2011)..................................................................................................................9 Cipollone v. Liggett Grp., 505 U.S. 504 (1992)..................................................................................................................9 CTS Corp. v. Waldburger, 573 U.S. 1 (2014)......................................................................................................................9 DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 852 F.3d 868 (9th Cir. 2017) ..................................................................................................13 Dialysis Newco, Inc. v. Cmty. Health Sys. Grp. Health Plan, 938 F.3d 246 (5th Cir. 2019) ..............................................................................................9, 10 District of Columbia v. Greater Wash. Bd. of Trade, 506 U.S. 125 (1992)..........................................................................................................18, 20 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - ii CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 4 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Egelhoff v. Egelhoff, 532 U.S. 141 (2001)..................................................................................................................8 Fields v. Twitter, Inc., 881 F.3d 739 (9th Cir. 2018) ....................................................................................................6 FMC Corp. v. Holliday, 498 U.S. 52 (1990)..............................................................................................................4, 20 Fort Halifax Co. v. Coyne, 482 U.S. 1 (1987)....................................................................................................................16 Fortenot v. NL Indus., Inc., 953 F.2d 960 (5th Cir. 1992) ..................................................................................................13 Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1 (1983)......................................................................................................................8 Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (2016) ...................................................................................................... passim Golden Gate Rest. Ass’n v. City & Cty. of San Francisco, 546 F.3d 639 (9th Cir. 2008) .......................................................................................... passim Harris v. Cty. of Orange, 682 F.3d 1126 (9th Cir. 2012) ..................................................................................................6 Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (1990)..........................................................................................................17, 20 Kwan v. SanMedica Int’l, 854 F.3d 1088 (9th Cir. 2017) ..................................................................................................6 Massachusetts v. Morash, 490 U.S. 107 (1989)..........................................................................................................16, 17 N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995)........................................................................................................ passim Puerto Rico v. Franklin Cal. Tax-Free Tr., 136 S. Ct. 1938 (2016) ..............................................................................................................9 Retail Indus. Leaders Ass’n v. Fielder, 475 F.3d 180 (4th Cir. 2007) ..................................................................................................21 Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983)....................................................................................................................8 Stoyas v. Toshiba Corp., 896 F.3d 933 (9th Cir. 2018) ....................................................................................................6 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - iii CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 5 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 United States v. Arizona, 641 F.3d 339 (9th Cir. 2011), rev’d on other grounds, 567 U.S. 387 (2012) ........................11 Velarde v. Pace Membership Warehouse, Inc., 105 F.3d 1313 (9th Cir. 1997) ................................................................................................17 WSB Elec., Inc. v. Curry, 88 F.3d 788 (9th Cir. 1996) ......................................................................................................7 Statutes 26 U.S.C. § 213...............................................................................................................................4 Employee Retirement Income Security Act of 1974 ......................................................................1 29 U.S.C. § 1002.....................................................................................................................12 29 U.S.C. § 1144............................................................................................................. passim Seattle Municipal Code 14.25.....................................................................................................1, 2 Seattle Municipal Code 14.28, http://seattle.legistar.com/LegislationDetail.aspx?ID=3993855&GUID=A3A CB5DC-6D4C-4EF1-A6F9AFD275F25343&Options=ID Text &Search=125930 (last visited Mar. 19, 2020) ............................................................................................................................... passim S.F. Admin. Code § 14.2 ..............................................................................................................11 Other Authorities 120 Cong. Rec. 29,197 (1974) ........................................................................................................8 Fed. R. Civ. P. 12 ............................................................................................................................6 19 20 21 22 23 24 25 26 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - iv CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 6 of 30 INTRODUCTION 1 2 The motion to dismiss that Defendant City of Seattle (“City”) has filed can be summed 3 up this way: Golden Gate, Golden Gate, Golden Gate. That is, pretending that its recently 4 enacted health-benefits ordinance – Seattle Municipal Code (“SMC”) 14.28 – is nothing but a 5 reprise of the local law upheld in Golden Gate Restaurant Ass’n v. City & County of San 6 Francisco, 546 F.3d 639 (9th Cir. 2008), the City cites or quotes the Ninth Circuit’s decision 7 more than twenty times in seeking to dismiss the preemption challenge under the Employee 8 Retirement Income Security Act of 1974 (“ERISA”) brought by Plaintiff The ERISA Industry 9 Committee (“ERIC”). But SMC 14.28 is very different than the local law in Golden Gate. 10 Unlike the ordinance in Golden Gate, SMC 14.28 requires the formation of ERISA plans, no 11 matter how employers seek to fulfil their new obligations. Unlike the ordinance in Golden 12 Gate, SMC 14.28 is rife with references to and dependence on ERISA plans throughout its 13 provisions. Unlike the ordinance in Golden Gate, SMC 14.28, at bottom, seeks to – and does – 14 compel employers to adjust their existing insured or self-funded ERISA plans to conform to its 15 requirements. As a result, unlike the ordinance in Golden Gate, SMC 14.28 is preempted by 16 ERISA. 17 Because ERISA preempts SMC 14.28, and given that the City’s motion to dismiss the 18 First Amended Complaint (“FAC”) is predicated solely on the notion that there is no preemption 19 here, the Court should deny the motion on its merits. In due course, ERIC will seek summary 20 judgment in its favor on the merits. 21 BACKGROUND 22 A. The Predecessor to SMC 14.28 and ERIC’s Challenge 23 In 2016, the City’s voters through the initiative process enacted the predecessor to SMC 24 14.28, which was Part 3 of former SMC 14.25 (“Part 3”). FAC ¶ 17. Part 3 required certain 25 large hotel employers to pay additional wages to covered employees for health insurance 26 expenses; however, the employer could avoid the obligation to pay additional wages if it PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 1 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 7 of 30 1 provided health coverage through an employer-sponsor health benefit plan at a level equal to or 2 above a gold-level plan on the Washington Health Benefit Exchange. Id. ¶ 19. In response, 3 ERIC – a national trade association of large multistate companies who are concerned with 4 maintaining a nationally uniform regime of legal requirements for employee benefits – sued the 5 City in this Court, contending that ERISA preempts Part 3. Id. ¶ 21. While the case was 6 pending, one or more ERIC member companies affected by Part 3 altered their employer- 7 sponsored plans to offer coverage consistent with Part 3, since the direct-payment requirement 8 was financially more onerous in comparison and given that there was no assurance under Part 3 9 that an employee who received additional wages (rather than coverage under the employer’s 10 plan) necessarily would use the monies reasonably on healthcare. Id. ¶ 20. 11 Ultimately, the Court stayed ERIC’s case, to account for state-court proceedings in 12 which an appeals court had declared former SMC 14.25 illegal in its entirety, as violating the 13 Washington Constitution’s initiative requirements. Id. ¶ 21. The state litigation, however, was 14 mooted when the City, in September 2019, repealed former SMC 14.25 and enacted, among 15 other successors, SMC 14.28 as a replacement for Part 3. Id. ¶ 22. This Court then lifted the 16 stay, and ERIC filed the FAC to challenge SMC 14.28. Id. 17 B. SMC 14.28’s Basic Provisions 18 At the outset, SMC 14.28 states its purpose to be “requiring certain employers to make 19 required healthcare expenditures to or on behalf of certain employees for the purpose of 20 improving access to medical care.” SMC 14.28 (preamble). 1 The ordinance’s “intent . . . is to 21 improve low-wage hotel employees’ access, through additional compensation, to high-quality, 22 affordable health coverage for the employees and their spouses or domestic partners, children, 23 and other dependents.” Id. § 14.28.025 (emphasis added). 24 25 26 Under SMC 14.28, eligible employees are full or part-time or temporary workers, must work an average of 80 hours or more per month, and must not be a manager, supervisor, or 1 SMC 14.28 is available at http://seattle.legistar.com/LegislationDetail.aspx?ID=3993855&GUID=A3ACB5DC6D4C-4EF1-A6F9-AFD275F25343&Options=ID Text &Search=125930 (last visited Mar. 19, 2020). PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 2 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 8 of 30 1 confidential employee. Id. §§ 14.28.030, 14.28.020. Covered employers are owners or 2 operators of a hotel with 100 or more guest rooms in the City, as well as ancillary hotel 3 businesses with 50 or more employees worldwide (the latter not having been subject to Part 3). 4 Id. §§ 14.28.040, 14.28.020. “Ancillary hotel business” is “any business that (1) routinely 5 contracts with the hotel for services in conjunction with the hotel’s purpose; (2) leases or sublets 6 space at the site of the hotel for services in conjunction with the hotel’s purpose; or (3) provides 7 food and beverages, to hotel guests and to the public, with an entrance within hotel premises.” 8 Id. § 14.28.020. 9 SMC 14.28 requires covered employers to make, each month, “[r]equired healthcare 10 expenditures for covered employees” of $420 if an employee has no spouse, domestic partner, 11 or dependents; $714 for an employee with dependents only; $840 for an employee and 12 spouse/domestic partner; and $1260 for an employee with spouse, domestic partner, and 13 dependents. Id. § 14.28.060.A.1-A.4. These are “2019 rates” and are “subject to annual 14 adjustments based on the medical inflation rate.” Id. § 14.28.060.A. 15 Covered employers “have discretion as to the form of the monthly required healthcare 16 expenditures they choose to make for their covered employees.” Id. § 14.28.060.B. They “may 17 satisfy their monthly obligations through any one or more of the following [three] forms (id.),” 18 either individually or in combination: 19 1. 20 21 First option: “Additional compensation paid directly to the covered employee” (id.); 2. Second option: “Payments to a third party, such as to an insurance carrier or 22 trust, or into . . . tax favored health programs, (including health savings accounts, 23 medical savings accounts, health flexible spending arrangements, and health 24 reimbursement arrangements) to provide healthcare services, for the purpose of 25 providing healthcare services to the employee or the spouse, domestic partner, or 26 dependents of the covered employee (if applicable)” (id.); and PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 3 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 9 of 30 1 3. Third option: “Average per-capita monthly expenditures for healthcare services 2 made to or on behalf of covered employees or [the spouse or dependents] by the 3 employer’s self-insured and/or self-funded insurance program(s).” Id. 2 4 For purposes of the second and third options, “[h]ealthcare services” are medical care 5 and services under Internal Revenue Code (26 U.S.C.) § 213, which allows a deduction for such 6 care and services not covered by insurance. SMC 14.28.020. Also for purposes of these 7 options, “if an employer imposes a waiting period before new hires can be enrolled in its 8 employer-sponsored plan (or the plan or insurer carrier mandates such a period), the employer 9 will not be required to satisfy the health expenditures described in 14.28.060.A until the sooner 10 of sixty days from the date of hire or the expiration of the waiting period.” Id. § 14.28.060.C. 11 C. SMC 14.28’s Exceptions and Waiver Requirements 12 SMC 14.28 contains several exceptions and a waiver regime to ensure no abuse of the 13 exceptions. One exception provides that an employer will be “deemed to have satisfied” its 14 monthly obligations under any of the three options, if “an employee voluntarily declines an 15 employer’s offer” of compliance through the second and third options – i.e., an offer of 16 coverage under the employer’s insured or self-funded health plan. Id. § 14.28.060.D. For the 17 offer to be valid, the employer “must not require the employee to pay more than a dollar amount 18 equivalent to 20 percent of the monthly required health amount described in subsection 19 14.28.060.A.1,” assumedly through the employee’s portion of an insurance premium or cost- 20 sharing. Id. § § 14.28.060.D.1. A declination occurs when the employer “obtain[s] a signed 21 waiver from the employee, free from coercion.” Id. § 14.28.060.D.2. 22 23 24 25 26 In turn, SMC 14.28 regulates the terms and conditions for an employer to obtain the employee’s waiver to substantiate the declination permitted under § 14.28.060.D. The waiver 2 As relevant here, there are two types of ERISA health benefit plans that employers traditionally sponsor: insured and self-funded. See FMC Corp. v. Holliday, 498 U.S. 52, 60-64 (1990). Insured plans are those sponsored by an employer who purchases insurance, with the insurer then administering the plan and carrying the risk. With selffunded plans, the employer self-insures and thus carries the risk, and it typically hires a third party to administer the plan. SMC 14.28’s second option concerns insured ERISA plans, while its third option concerns self-funded ERISA plans. PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 4 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 10 of 30 1 process begins with the employer, in that “[t]he employer must offer [a] waiver in the 2 employee’s primary language and on a form issued by the Director [of the Office of Labor 3 Standards].” Id. § 14.28.060.D.2. “Prior to offering the waiver, the employer must provide the 4 employee with a written disclosure of the rights being waived, the form and content of which 5 shall be prescribed by the Director.” Id. And again, the employer must perform these functions 6 without “coercing or unduly inducing an employee to waive coverage.” Id. § 14.28.050. 7 Ultimately, if the employer makes the offer of coverage, if the employer complies with the 8 waiver requirements, and if the employee who receives the waiver form “refuses to sign such 9 waiver” and “continues to decline, in whole or in part,” the employer “will be deemed to have 10 satisfied its required healthcare expenditure rate for that employee.” Id § 14.28.060.D. In that 11 situation, the employer must keep records of “the employee’s receipt of the waiver and written 12 disclosures . . . and the employee’s subsequent refusal to sign the waiver.” Id. 13 Another exception is for an employee “who receives health coverage from another 14 source, including but not limited to employer-sponsored health insurance through an employer 15 other than the covered employer.” Id. § 14.28.030.B.2. Such an employee may waive coverage 16 from § 14.28 by signing a waiver that he or she “has access to high-quality and affordable health 17 coverage from another source.” Id. § 14.28.030.B.2.a. 18 A final exception is for “any employees covered by a bona fide collective bargaining 19 agreement.” Id. § 14.28.235.A. This exception applies only if SMC 14.28’s requirements “are 20 expressly waived in the collective bargaining agreement.” Id. 21 D. SMC 14.28’s Record-Keeping and Enforcement Provisions 22 Employers must retain records documenting compliance with SMC 14.28. See id. § 23 14.28.110. In particular, as noted, where an employer satisfies its obligations by making an 24 offer of coverage through the second or third options that is declined, the employer must keep 25 records of its disclosures to the employee regarding the offer of coverage, the provision of a 26 waiver form to the employee, and the employee’s refusal to sign the waiver. Id. § 14.28.060.D. PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 5 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 11 of 30 1 With respect to enforcement, the City may investigate violations of SMC 14.28 and has 2 subpoena authority. Id. §§ 14.28.130, 14.28.150.E. In the event of a violation, the City may 3 levy civil fines and penalties payable to the City, as well as require “unpaid compensation, 4 liquidated damages, civil penalties, [and] penalties payable to aggrieved parties.” Id. 5 § 14.28.160.C.1. Section 14.28.230 provides a private right of action to “[a]ny person or class 6 of persons that suffers an injury as a result of a violation” of SMC 14.28. 7 The effective date for SMC 14.28 is the later of July 1, 2020, or the earliest annual open 8 enrollment period for health coverage after July 1, 2020, except that ancillary hotel businesses 9 with 50 to 250 employees shall have until similar dates in 2025 to comply. Id. § 14.28.260. STANDARD UNDER RULE 12(b)(6) 10 11 Rule 12(b)(6), which the City has invoked to dismiss the FAC, authorizes dismissal 12 where a plaintiff’s complaint “fail[s] to state a claim upon which relief can be granted.” Fed. R. 13 Civ. P. 12(b)(6). In determining whether a complaint meets that threshold, the Court “‘accept[s] 14 all factual allegations in the complaint as true and constru[es] them in the light most favorable to 15 the nonmoving party.’” Stoyas v. Toshiba Corp., 896 F.3d 933, 938 (9th Cir. 2018) (quoting 16 Fields v. Twitter, Inc., 881 F.3d 739, 743 (9th Cir. 2018)). Ultimately, “[t]he Court inquires 17 whether the complaint at issue contains ‘sufficient factual matter, accepted as true, to state a 18 claim of relief that is plausible on its face.’” Harris v. Cty. of Orange, 682 F.3d 1126, 1131 (9th 19 Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Dismissal is warranted only 20 “based on either a lack of a cognizable legal theory or the absence of sufficient facts alleged 21 under a cognizable legal theory.” Kwan v. SanMedica Int’l, 854 F.3d 1088, 1093 (9th Cir. 22 2017) (internal quotation marks and citation omitted). ARGUMENT 23 24 25 26 I. ERISA BROADLY PREEMPTS ANY STATE LAW HAVING A REFERENCE TO OR CONNECTION WITH AN ERISA PLAN The FAC alleges that ERISA preempts SMC 14.28, and the City seeks dismissal exclusively on the ground that, under ERISA’s preemption tests, there is here no plausible basis PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 6 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 12 of 30 1 for preemption. Accordingly, to decide the pending dismissal motion (and, ultimately, the case 2 as a whole), the place to start is with ERISA’s general preemption standards. 3 ERISA contains an express preemption provision. It provides: ERISA “shall supersede 4 any and all State laws insofar as they may now or hereafter relate to any employee benefit 5 plan.” 29 U.S.C. § 1144(a) (emphasis added). Following from the “relate to” term Congress 6 chose, the Supreme Court has repeatedly characterized § 1144(a)’s text as “clearly expansive,” 7 having “an expansive sweep,” “conspicuous for its breadth,” “deliberately expansive,” and 8 “broadly worded.” Cal. Div. of Labor Stds. Enforcement v. Dillingham Constr., N.A., 519 U.S. 9 316, 324 (1997) (internal quotation marks and citations omitted) (cataloging statements in prior 10 precedents). In its most recent ERISA preemption decision, the Court confirmed (again) that 11 ERISA’s preemption section has a “broad scope,” adding that, through the provision, Congress 12 intended the regulation of employee benefit plans to be “‘exclusively a federal concern.’” 13 Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936, 943, 944 (2016) (quoting Alessi v. Raybestos- 14 Manhattan, Inc., 451 U.S. 504, 523 (1981)). Still, while emphasizing § 1144(a)’s breadth, the 15 Supreme Court has also cautioned against applying the provision too “literal[ly],” for “‘[i]f 16 “relate to” were taken to extend to the furthest stretch of its indeterminacy, then for all practical 17 purposes pre-emption would never run its course.’” Id. at 943 (quoting N.Y. State Conf. of Blue 18 Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655 (1995) (“Travelers”)). 19 In devising guardrails for § 1144(a), the “case law to date has described two categories 20 of state laws that ERISA pre-empts”: (1) state laws that make a “reference to” ERISA plans; 21 and (2) state laws that have a “connection with” ERISA plans. Id. In turn, a state law makes a 22 “reference to” ERISA plans when it ‘“acts immediately and exclusively upon ERISA plans’” or 23 “‘the existence of ERISA plans is essential to the law’s operation.’” Id. (quoting Dillingham, 24 519 U.S. at 325). The Ninth Circuit has put the relevant standard this way: a state or local law 25 references ERISA plans where it “mentions or alludes to ERISA plans, and has some effect on 26 the referenced plans.” WSB Elec., Inc. v. Curry, 88 F.3d 788, 793 (9th Cir. 1996). PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 7 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 13 of 30 1 A state law has a “connection with” ERISA plans when it “‘governs . . . a central matter 2 of plan administration’ or ‘interferes with nationally uniform plan administration.’” Gobeille, 3 136 S. Ct. at 943 (quoting Egelhoff v. Egelhoff, 532 U.S. 141, 148 (2001)). Included among 4 state laws proscribed in those categories are state measures “that mandate[] employee benefit 5 structures or their administration.” Travelers, 514 U.S. at 658. “A state law also might have an 6 impermissible connection with ERISA plans if ‘acute, albeit indirect, economic effects’ of the 7 state law ‘force an ERISA plan to adopt a certain scheme of substantive coverage or effectively 8 restrict its choice of insurers.’” Gobeille, 136 S. Ct. at 943 (quoting Travelers, 514 U.S. at 668). 9 10 II. THERE IS NO PRESUMPTION AGAINST PREEMPTION IN THIS CASE Though the City agrees that the ERISA-preemption touchstones for deciding its motion 11 to dismiss are whether SMC 14.28 makes a “reference to” or has a “connection with” ERISA 12 plans, it seeks to freight the inquiry with a threshold presumption against preemption. Indeed, 13 the City spends four pages in its motion trying to establish that there is “a strong presumption 14 against preemption by federal law.” Def.’s Mot. to Dismiss the FAC at 9 (ECF No. 37) (“Def.’s 15 Mot.”); see generally id. at 9-12. The City is incorrect: there, in fact, is no presumption against 16 preemption in this case. 17 Historically, the Supreme Court had not applied any presumption against preemption 18 under § 1144(a), instead characterizing ERISA’s preemption provision as the statute’s 19 “‘crowning achievement’” and revolutionary for its time. Shaw v. Delta Air Lines, Inc., 463 20 U.S. 85, 99 (1983) (quoting 120 Cong. Rec. 29,197 (1974) (statement of Rep. Dent)); see 21 Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1, 24 n.26 (1983) (describing § 22 1144(a) as a “virtually unique pre-emption provision”). Nonetheless, by the time of Travelers 23 in 1995, the Court did instruct for ERISA’s preemption section a “starting presumption that 24 Congress does not intend to supplant state law . . . in fields of traditional state regulation.” 514 25 U.S. at 654-55. Such a presumption against preemption under § 1144(a) coincided with the 26 Supreme Court’s general trend at the time of extending to situations involving a statute with an PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 8 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 14 of 30 1 express preemption provision the “presumption against the pre-emption of state police power 2 regulations” typically applied in ordinary conflict-preemption circumstances (i.e., circumstances 3 where a statute is devoid of a preemption provision but the Constitution’s Supremacy Clause 4 might require the ousting of state law). Cipollone v. Liggett Grp., 505 U.S. 504, 518 (1992) 5 (federal food and drug statute). 6 But the Supreme Court’s thinking changed in the twenty years following Travelers, so 7 that by the mid-2010s a majority of Justices had registered dissatisfaction with a presumption 8 against preemption when Congress had included a preemption command in the statute’s express 9 terms. E.g., CTS Corp. v. Waldburger, 573 U.S. 1, 19-20 (2014) (Scalia, J., concurring, and 10 joined by Roberts, C.J., and Thomas and Alito, J.J.); Ariz. v. Inter Tribal Council of Ariz., Inc., 11 570 U.S. 1, 21 (2013) (Kennedy, J., concurring). Then, in Gobeille, the Court refused to 12 recognize at all the existence of a presumption against preemption, prompting a dissent from 13 Justice Ginsburg. Compare 136 S. Ct. at 946 (“Any presumption against pre-emption, whatever 14 its force in other instances, cannot validate a state law that enters a fundamental area of ERISA 15 regulation and thereby counters the federal purpose in the way this state law does.”) (emphasis 16 added) with id. at 954 (Ginsburg, J., dissenting) (relying heavily on a “[t]he presumption against 17 preemption”). Finally, in Puerto Rico v. Franklin California Tax-Free Trust, the Court formally 18 ruled that, where a “statute ‘contains an express pre-emption clause,’ we do not invoke any 19 presumption against pre-emption.” 136 S. Ct. 1938, 1946 (2016) (quoting Chamber of 20 Commerce v. Whiting, 563 U.S. 582, 594 (2011)). Though Franklin was not an ERISA case, the 21 Court in Franklin cited Gobeille in support of the proposition that there is no presumption 22 against preemption if a statute contains an express preemption provision. See id. 23 After Franklin, courts have begun to reject a presumption against preemption when 24 applying ERISA’s express preemption provision, determining Travelers to have been overruled 25 on the point. See Dialysis Newco, Inc. v. Cmty. Health Sys. Grp. Health Plan, 938 F.3d 246, 26 259 (5th Cir. 2019) (“Given that Franklin specifically references Gobeille – an ERISA case – PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 9 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 15 of 30 1 when holding that there is no presumption of preemption when the statute contains an express 2 preemption clause, we conclude that holding is applicable here.”). Though the Ninth Circuit has 3 not yet squarely addressed Franklin’s application in the ERISA context, it has followed 4 Franklin to reject a presumption against preemption for another statute that “speaks expressly to 5 the question of preemption.” Atay v. Cty. of Maui, 842 F.3d 688, 699 (9th Cir. 2016) (applying 6 express preemption provision in the Plant Protection Act, 7 U.S.C. § 7756(b)); see Dialysis 7 Newco, 938 F.3d at 258 (finding Atay to support proposition that, after Franklin, there is no 8 presumption against preemption under ERISA’s preemption provision). 9 In light of Franklin and its progeny, the Court should reject a presumption against 10 preemption when applying ERISA’s express preemption clause. In fact, the Court can, and 11 should, review with a skeptical eye earlier precedents rejecting preemption under § 1144(a), if 12 the decision was based heavily on a presumption against preemption. See, e.g., Dialysis Newco, 13 938 F.3d at 259 (“because Rapides [i.e., an earlier Fifth Circuit ERISA-preemption decision] 14 was built upon a presumption against preemption that the Supreme Court appears to have 15 walked back from, we decline to extend Rapides’s reasoning to the facts of this case”). 16 The City asserts that Franklin’s holding is limited to situations where “the preemption 17 provision’s language is plain,” and apparently the City believes § 1144(a)’s text is less than 18 plain. Def.’s Mot. at 9 n.7 (emphasis removed). Dialysis Newco, however, rejected that same 19 argument. See 938 F.3d at 258. Moreover, just because § 1144(a)’s text may be “frustrating” to 20 apply does not make it un-plain. Travelers, 514 U.S. at 656. To the contrary, by using the 21 “relate to” language it did, Congress obviously – or plainly – intended ERISA’s preemption 22 provision to be “broad[ly]” interpreted, as Gobeille most recently reiterates. 136 S. Ct. at 943. 23 The Supreme Court has called § 1144(a)’s text “terse but comprehensive,” not ambiguous or 24 some other adjective opposite of plain. Id. The key to applying that curt text is – again, as 25 Gobeille instructs – to implement the “workable” standards fashioned under the “reference to” 26 and “connection with” rubrics, not to rely on a judge-made presumption against preemption. Id. PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 10 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 16 of 30 1 In any event, even if the pre-Franklin presumption scheme still governed, no 2 presumption would apply in this case. The presumption operated when a state enacted “general 3 health care regulation, which historically has been a matter of local concern.” Travelers, 514 4 U.S. at 661. For instance, in Golden Gate, the fundamental element of the San Francisco 5 ordinance there at issue was the creation of “the Health Access Plan (HAP),” which is “a City- 6 administered health care program” that “provides enrollees with ‘medical services with an 7 emphasis on wellness, preventive care and innovative service delivery.’” Golden Gate, 546 8 F.3d at 642, 645 (quoting S.F. Admin. Code § 14.2(f)) (emphasis added). The ordinance then 9 sets forth a series of employer financing mechanisms for the HAP, from which the employer is 10 “exempt . . . if it [already] makes health care expenditures” at a certain average rate on behalf of 11 its workers (between $1 and $2 per hour worked by its workforce). Id. at 645. In that situation, 12 the Ninth Circuit (pre-Franklin) held that there is a presumption against ERISA preemption 13 because “[t]he field in which the [San Francisco] Ordinance operates is the provision of health 14 care services to persons with low and moderate incomes,” and “[s]tate and local governments 15 have traditionally provided health care services to such persons.” Id. at 648 (emphasis added). 16 In contrast, SMC 14.28 involves no provision of health care services. Rather, as even 17 the City acknowledges, SMC 14.28, “at its core, seeks to ‘improve low-wage hotel employees’ 18 access, through additional compensation, to . . . health coverage . . . .’” Def.’s Mot. at 21 19 (quoting SMC 14.28.025) (emphasis added; ellipses in original). Unlike the actual provision of 20 health care services to low-income segments of society, health benefits coverage for employees 21 is not an area of traditional state concern. Since 1974, it has been an area of exclusively federal 22 interest, through ERISA. Because “the states have not traditionally occupied the field” of 23 private-sector employee health benefits coverage, the Court should “apply no presumption 24 against preemption.” United States v. Arizona, 641 F.3d 339, 348 (9th Cir. 2011), rev’d on 25 other grounds, 567 U.S. 387 (2012); see also Aloha Airlines v. Ahue, 12 F.3d 1498, 1505 (9th 26 Cir. 1993) (holding that Hawaii law requiring direct reimbursement by employers of costs of PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 11 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 17 of 30 1 medical exams “does not represent a regulation of traditional state authority”) (emphasis 2 removed). 3 3 III. 4 5 6 7 8 9 10 11 12 ERISA preempts SMC 14.28 for a series of reasons, each of which is sufficient alone to necessitate invalidation of the ordinance. An initial reason is that, under any of its options, SMC 14.28 requires the creation or maintenance of an ERISA plan. If a state or local law, through its operation, “creates an ERISA plan,” it “almost certainly makes an impermissible ‘reference to’ an ERISA plan.” Golden Gate, 546 F.3d at 648. The City does not appear to dispute that SMC 14.28 requires the establishment of ERISA plans for compliance under at least the second and third options. Nor could it. ERISA defines a welfare plan as any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer . . . to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, . . . medical, surgical, or hospital care or benefits, or benefits in the event of sickness . . . . 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ERISA PREEMPTS SMC 14.28 BECAUSE, UNDER ANY OF ITS OPTIONS, SMC 14.28 REQUIRES THE CREATION OF ERISA PLANS 29 U.S.C. § 1002(1) (emphasis added). SMC 14.28’s second option authorizes compliance with the ordinance’s required expenditure amounts through employer purchases of insurance for its employees, arrangements that fit the welfare-plan definition (especially the italicized language above) to a tee; likewise, the third option authorizes expenditures through “the employer’s selfinsured and/or self-funded insurance programs,” which requires the existence of ERISA plans (namely, self-funded ones) even to be operational. SMC 14.28.060.B.3. The dispute is over whether the first option – involving direct payments to workers – constitutes an ERISA plan. It does. By its terms, the first option for compliance constitutes an 3 To support a presumption against preemption, and later to define the “reference to” standard, the City relies on Bd. of Trs. of Glazing Health & Welfare Tr. v. Chambers, 903 F.3d 829, 846 (9th Cir. 2018), adding the innocuous-sounding modifier of “vacated on unrelated grounds[,] 941 F.3d 1195 (9th Cir. 2019) (en banc).” Def.’s Mot. at 8; see id. at 22. The City’s citation and use of the case violated an express order from the Ninth Circuit. In granting en banc review, the Ninth Circuit instructed that “[t]he three-judge panel disposition in this case shall not be cited as precedent by or to any court of the Ninth Circuit.” Bd. of Trs. of Glazing Health & Welfare Tr. v. Chambers, 923 F.3d 1162, 1163 (9th Cir. 2019). PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 12 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 18 of 30 1 employer-based regimen of repeated payments to employees to defray the employees’ medical 2 costs, which – on its face – satisfies ERISA’s welfare plan definition of a program established 3 or maintained by the employer for the purpose of providing benefits in the event of sickness or 4 medical need. Here, the monthly payments directed by the City so that the employee can access 5 health coverage are the benefit, as the Ninth Circuit has established that money payments 6 themselves to employees are an ERISA benefit when made for purposes of covering healthcare 7 costs. See, e.g., DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 852 F.3d 868, 874 8 (9th Cir. 2017) (holding that “[t]he term ‘benefit’ in [ERISA] . . . refers to the specific 9 advantages provided to covered employees, as a consequence of their employment, for 10 particular purposes connected to alleviating various life contingencies”) (emphasis added). 11 In prior decisions, the Ninth Circuit has found similar employer-to-employee direct- 12 payment schemes to constitute ERISA plans. In Aloha Airlines, Inc. v. Ahue, 12 F.3d 1498, 13 1502-05 (9th Cir. 1993), the Ninth Circuit held that a Hawaii requirement of annual or semi- 14 annual payments by airline employers to employees to defray the cost of FAA-mandated pilot 15 exams constituted an ERISA plan. In Bogue v. Ampex Corp., 976 F.2d 1319, 1323 (9th Cir. 16 1992), the Ninth Circuit found that even just a one-time payment of money in the event of 17 employment termination constituted an ERISA plan. These decisions had three key ingredients. 18 First, in order to pay the benefits, the employers needed “to establish an administrative 19 scheme,” and the “establishment of such a scheme clearly implicates an ERISA plan.” Aloha 20 Airlines, 12 F.3d at 1505. The employers needed to create an administrative scheme because 21 “‘the circumstances of each employee’s’” situation had “‘[to be] analyzed in light of [certain] 22 criteria.’” Bogue, 976 F.2d at 1323 (quoting Fortenot v. NL Indus., Inc., 953 F.2d 960, 962-63 23 (5th Cir. 1992) (brackets in original)). In Aloha Airlines, the direct payment turned on “a pilot’s 24 current rank,” since only captains and first officers needed the FAA pilot exams for which the 25 state required employer payments. Aloha Airlines, 12 F.3d at 1505. In Bogue, eligibility for the 26 job-termination payment turned on whether, upon termination, the employee was “offer[ed] PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 13 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 19 of 30 1 ‘substantially equivalent’ employment.” Bogue, 976 F.2d at 1321. In both instances, the need 2 for “ongoing, particularized . . . analysis” by the employer to determine each employee’s 3 eligibility meant “there was no way to administer the program without an administrative 4 scheme.” Id. at 1323. 5 Second, ERISA plans were implicated because the “payments . . . may depend on 6 contingencies outside the . . . employee’s control.” Aloha Airlines, 12 F.3d at 1503; see Bogue, 7 976 F.2d at 1322. Where the employer – rather than just the employee – has some 8 “discretionary” authority to qualify individuals for the program (Bogue, 976 F.2d at 1323), then 9 “ERISA’s concerns with the abuse and mismanagement of funds accumulated to finance 10 employee benefits” more readily come into play and necessitate that the program be deemed an 11 ERISA plan. Aloha Airlines, 12 F.3d at 1503. In Aloha Airlines, the “pilot’s status” was under 12 the employer’s control and could “change . . . depending upon an airline’s needs,” and, again, it 13 was pilot status as a captain or first officer that triggered the need for an FAA exam and thus the 14 “employer payments required by the statute.” Id. In Bogue, the employer not only determined 15 who would receive “substantially equivalent” employment, but also “remained obligated to 16 decide whether a complaining employee’s job was ‘substantially equivalent’ to his pre- 17 acquisition job.” Bogue, 976 F.2d at 1323. 18 Third, the programs in Aloha Airlines and Bogue did not involve merely predictable, 19 rote payments. In Aloha Airlines, in particular, the Ninth Circuit emphasized that “an airline 20 cannot often predict how many pilots of a particular status it will need during a coming year,” 21 and therefore “an airline employer cannot necessarily determine the amount of monies to budget 22 for such payments well in advance of the expected payment date.” Aloha Airlines, 12 F.3d at 23 1503. As a result, the “periodic payments” were less “analogous to salary payments,” which are 24 “fixed” and “regular[],” and instead “would require an airline to establish a plan to administer 25 and manage them.” Id. 26 The direct employee payments pursuant to the first option of SMC 14.28 have the PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 14 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 20 of 30 1 “hallmark[s]” of an ERISA plan, as in Aloha Airlines and Bogue. Bogue, 976 F.2d at 1322. 2 The large-hotel and ancillary-business employers subject to SMC 14.28 would need to establish 3 an administrative scheme even with the first option, because each employee’s individual 4 circumstances would need to be analyzed for eligibility. For one thing, the employer would 5 need to determine, every month, which employees (including part-time employees) averaged 80 6 hours per month and were not exempt (supervisory) personnel, not much differently than the 7 employer in Aloha Airlines needed to determine for payment eligibility a pilot’s status. See 8 Aloha Airlines, 12 F.3d at 1505 (“the statute effects the primary administrative functions of 9 Aloha’s plans because it compels Aloha to ascertain whether a pilot is eligible for a particular 10 benefit (by determining that pilot’s rank and status periodically) and to assess the amount of the 11 benefit”). Moreover, in the case of SMC 14.28, the waiver process makes further individualized 12 assessment necessary. No covered employee would be entitled to a direct payment if he or she 13 had access to high quality healthcare elsewhere (through, for instance, coverage offered to a 14 family member or another employer for whom the worker works), and he or she signed a waiver 15 (after proper pre-waiver disclosure from the employer). Likewise, no one would be entitled to a 16 direct payment if the employer had offered health benefits under the second or third options 17 (with no more than the 20% employee contribution), and the employee declined. Keeping track 18 of all of these moving parts for each potentially eligible employee “requires [the employer] to 19 establish an administrative scheme” to pay the “recurring” benefits. Id. 20 Next, the receipt of a direct payment is not solely within the “employee’s control.” Id. 21 at 1503. The employer controls the number of hours offered to, and thus worked by, each 22 employee and, as a consequence, the employees’ eligibility; and the employer is the entity 23 “obligated to decide” who qualifies each month and to make payments to individuals. Bogue, 24 976 F.2d at 1323. Importantly, the employer also influences whether anyone can even claim a 25 direct payment. Again, if the employer offers an individual health benefits coverage through an 26 insured or self-funded plan, with the obligation that the employee pay 20% of the cost (as is PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 15 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 21 of 30 1 allowed under SMC 14.28.060), and the employee declines the offer, then the employer need 2 not provide the coverage or make a direct payment. It is conceivable that an unscrupulous 3 employer might strategize to make such offers to those it knows cannot afford the 20% cost, 4 obtain the declinations, and thereby limit the individuals subject to SMC 14.28. 5 Finally, with direct payments under the first option, an employer cannot readily 6 determine “the amount of monies to budget” for direct payments. Aloha Airlines, 12 F.3d at 7 1503. A large hotel employer or ancillary business, in one month, might need innumerable part- 8 time (i.e., 80-hours-per-month) employees; and other months, none. The current COVID-19 9 crisis illustrates the point, with large hotel employers regrettably needing to furlough even 10 permanent employees. The point is that an employer will likely spend “varying amounts for 11 different numbers of [employees]” each month on payments, depending on its workforce needs. 12 The City relegates Aloha Airlines to a footnote and Bogue to a parenthetical (see Def.’s 13 Mot. at 16 & n.12), instead trying to align SMC 14.28’s first option with the employer practices 14 the Supreme Court held not to constitute ERISA plans in Massachusetts v. Morash, 490 U.S. 15 107 (1989), and Fort Halifax Co. v. Coyne, 482 U.S. 1 (1987). However, the Ninth Circuit 16 distinguished those cases in Aloha Airlines and Bogues on grounds equally applicable here. See 17 Aloha Airlines, 12 F.3d at 1503 (holding that, notwithstanding the state-required payments “can 18 be paid from Aloha’s general assets” as in Morash, “the Morash Court’s reasoning supports the 19 conclusion that employer payments for FAA-mandated examinations implicate ERISA’s 20 principal concerns,” because employers cannot “budget” for the costs like typical payroll 21 matters and need “to establish a plan to administer and manage [the payments]”); id. at 1505 22 (“[u]nlike the state law in Fort Halifax, which required an employer to make a one-time, lump- 23 sum severance payment, [the Hawaii law] requires Aloha to establish an administrative scheme 24 to pay recurring medical benefits”); accord Bogue, 976 F.2d at 1323. 25 26 And of course, the City cites Golden Gate, where the Ninth Circuit rejected the argument that employers’ contributions to San Francisco to subsidize its provision of healthcare PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 16 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 22 of 30 1 to low-income individuals constituted an ERISA plan. But the local ordinance there, in its San 2 Francisco “City-payment option,” had none of the characteristics of an ERISA plan that make 3 SMC 14.28’s first option an ERISA plan. Golden Gate, 546 F.3d at 651. There was no 4 payment directly to any employee based on eligibility criteria that the employer applied; 5 instead, the employer paid an aggregate amount to the City based on a rate set by the City times 6 the overall “number of hours their employees work” (with credits then for benefits expenditures 7 already made). Id. Whose hours to count each period might change, but no individual went in 8 and out of eligibility for a direct payment and was subject to any possible denial of benefits by 9 their employer. Furthermore, the San Francisco law had no elaborate waiver system, with 10 specific employer disclosure requirements, like SMC 14.28, which meant only limited 11 “subjective judgments” for employers under San Francisco’s process. Id. In sum, unlike the 12 “‘ongoing, particularized, administrative, discretionary analysis’” under SMC 14.28’s first 13 option that makes it “‘an ongoing administrative scheme,’” an employer’s obligations under the 14 local law in Golden Gate “involve[d] mechanical record-keeping,” “‘d[id] not depend on 15 contingencies outside the employee’s control,’” and “d[id] not run the risk of mismanagement 16 of funds or other abuse.” Golden Gate, 546 F.3d at 651 (quoting Velarde v. Pace Membership 17 Warehouse, Inc., 105 F.3d 1313, 1317 (9th Cir. 1997), and Morash, 490 U.S. at 115). 4 IV. 18 19 20 Another reason ERISA preempts SMC 14.28 is that compliance under any of its options 21 22 23 24 25 26 ERISA PREEMPTS SMC 14.28 BECAUSE EACH OF ITS OPTIONS MAKES AN IMPERMISSIBLE REFERENCE TO ERISA PLANS BY MEASURING COMPLIANCE THROUGH THE VALUE OR LEVEL OF BENEFITS PROVIDED 4 The waiver provisions are a critical aspect of SMC 14.28, for they steer employers to comply through coverage in insured or self-funded ERISA plans, which is almost certainly the City’s preference (given the advantages of ERISA coverage over direct payments for securing health insurance, see infra p. 22). Under the waiver process, an employer avoids direct payments to an employee when the employee has ERISA coverage through another source (i.e., another employer) or if the employee declines coverage under the employer’s insured or self-funded plan (even if the plan has a 20% employee cost share). Thus, the employer has an incentive to verify ERISA coverage elsewhere, or to offer its own ERISA coverage in the first instance (because, in the event it is declined, the employer has no obligation at all). Of note, the Supreme Court has “virtually taken it for granted that state laws which are specifically designed to affect employee benefit plans are pre-empted under § [1144](a).” Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 140 (1990) (internal quotation marks and citation omitted). PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 17 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 23 of 30 1 is measured by the value or level of benefits provided. In Golden Gate, while finding that San 2 Francisco’s law avoided preemption because it simply used a mathematical formula of a rate 3 times the employer’s total employee hours worked (with credits then applied) to determine an 4 employer’s liability for the City’s provision of health care services to low-income individuals, 5 the Ninth Circuit said a local law would fare differently if its “obligations were measured by the 6 level of benefits provided by the ERISA plan to the employee.” Golden Gate, 546 F.3d at 658. 7 In that instance, the law would make an impermissible “reference to” ERISA plans under 8 District of Columbia v. Greater Washington Board of Trade, 506 U.S. 125 (1992). 9 Distinguishing Greater Washington, the Ninth Circuit said: 10 11 12 13 14 The employer calculates its required payments based on the hours worked by its employees, rather than on the value or nature of the benefits available to ERISA plan participants. Thus, unlike the ordinance in Greater Washington, the Ordinance in this case is not determined, in the words of [§ 1144(a)], by ‘reference to’ an ERISA plan.” 546 F.3d at 658 (emphasis added). Under SMC 14.28’s first option, the direct monthly payments to the employee to cover 15 expected medical costs are themselves the ERISA benefits (as were the direct payments in 16 Aloha Airlines and Bogue), and compliance turns on whether that benefits meet the value 17 requirements set out in § 14.28.060.A (for instance, $420 per month for employee self-only 18 benefits). In fact, because the payment (for future use towards health care) is the benefit, the 19 City overtly sets even the level of benefits by establishing the dollar amount to be paid to the 20 employee. See Aloha Airlines, 12 F.3d at 1502 (rejecting argument that “only those ‘medical 21 benefits’ that provide . . . immediate aid to a participant employee are within ERISA’s 22 purview”). Under the second option (i.e., the insured plan option), an employer satisfies its 23 obligations only if it purchases for each covered employee an insurance plan with sufficient 24 benefits and value as to be priced (the premium associated with that employee) at a level equal 25 to or above SMC 14.28’s specifications. Under the third option, an employer satisfies its 26 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 18 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 24 of 30 1 obligations only if, per capita on average, the value of benefits its pays under its self-funded 2 plan is equal to or above SMC 14.28’s specifications. 3 4 5 6 7 8 9 V. ERISA PREEMPTS SMC 14.28 BECAUSE IT OTHERWISE REFERENCES ERISA PLANS THROUGHOUT ITS PROVISIONS Still another reason that ERISA preempts SMC 14.28 is that the ordinance makes “reference to” ERISA plans in other ways, acting immediately and exclusively upon ERISA plans and with the existence of ERISA plans being essential to the law’s operation. See supra p. 7. The references are numerous and pervade all three options for compliance: • “insurance carrier or trust,” which is a reference to an ERISA plan. SMC 10 11 12 14.28.060.B.2. • 15 insurance program(s),” which is a reference to an ERISA plan. Id. § 14.28.060.B.3. • “employer-sponsored plan,” which is a reference to an ERISA plan. Id. § 17 19 14.28.060.C. • sponsored insured or self-funded plan where the employee’s cost sharing is no 21 greater than “20 percent of the monthly required healthcare amount,” which is a 22 24 reference to an ERISA plan and its specific terms. Id. § 14.28.060.D.1. • SMC 14.28’s scope excludes individuals who have “health coverage” from “employer-sponsored coverage through an employer other than the covered 25 26 An employer will be deemed to have satisfied SMC 14.28, under any of the three options, if the employee refuses an employer’s offer of coverage under an employer- 20 23 On the face of SMC 14.28, when monthly payments must be made to new hires under the second and third options is measured by the waiting period in the 16 18 On its face, the third option makes compliance turn on whether the employer makes average per capita payments through “the employer’s self-insured and/or self-funded 13 14 On its face, the second option makes compliance turn on the employer paying an employer,” which is a reference to an ERISA plan. Id. § 14.28.030.B.2. • SMC 14.28’s “Effective date” provision fixes the ordinance’s start date, in part, PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 19 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 25 of 30 1 based on “the earliest annual open enrollment period for health coverage, if offered, 2 after July 1, 2020,” which is a reference to an ERISA plan and its enrollment terms. 3 Id. § 14.28.260. 4 Though, in these references, SMC 14.28 does not in every instance use the exact term 5 “ERISA plan,” the Supreme Court has recognized that references to employer-based coverage, 6 employer-sponsored insurance, or an employer’s program is the equivalent of an actual, exact 7 reference to an ERISA plan. See Greater Wash., 506 U.S. at 130 (holding that a state law’s 8 mention of “‘health insurance coverage’” and the “‘benefit level’” in that coverage were each 9 references to ERISA plans) (quoting state law); FMC Corp. v. Holliday, 498 U.S. 52, 59 (1990) 10 (holding that a state law’s mention of “‘any program, group contract or other arrangement for 11 payment of benefits’” constituted a reference to ERISA plans) (quoting state law); Ingersoll- 12 Rand, 498 U.S. at 140 (mention of “employee’s pension fund” in state cause of action is a 13 reference to ERISA plans). And these various references in SMC 14.28 are not mere allusions 14 to ERISA plans, but describe the actual modes of compliance, the contours of those compliance 15 modes, and exceptions to compliance. 16 The City minimizes these references by contending that SMC 14.28 could operate in 17 some form (albeit a shell form, other than actually enacted) even if no employer ever adopted an 18 ERISA plan, supposedly proving that ERISA plans are not integral and essential to the 19 ordinance’s operation. See Def.’s Mot. at 22-24. That is simply untrue, given that, as shown, 20 each option involves the creation of an ERISA plan. Even assuming that the first option were 21 not itself an ERISA plan, ERISA plans nonetheless are key to SMC 14.28’s full operation. 22 Under the terms of the first option (as with the other options), no employer need make a 23 payment if the covered employee has ERISA coverage elsewhere; nor must the employer 24 comply with the first option if it offers ERISA coverage under the second or third options and 25 the employee declines. Accordingly, ERISA plans are integral to determine even threshold 26 application of the first option. See Greater Wash., 506 U.S. at 130 (holding that state law PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 20 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 26 of 30 1 governing non-ERISA plans referenced ERISA plans when it made the non-ERISA plans’ terms 2 hinge on the terms of analogous ERISA coverage). 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 VI. ERISA PREEMPTS SMC 14.28 BECAUSE IT HAS A CONNECTION WITH ERISA PLANS A final basis for ERISA preempting SMC 14.28 is that it has a “connection with” ERISA plans. In a nutshell, SMC 14.28 effectively compels large hotel employers and ancillary businesses to alter their current or self-funded coverage both to make eligible for coverage those employees covered by SMC 14.28 and to provide benefits consistent with the value-level requirements of the second and third options. As noted earlier, a state law will 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 or effectively restrict its choice of insurers.’” Gobeille, 136 S. Ct. at 943 (quoting Travelers, 514 U.S. at 668). Golden Gate added that this standard is satisfied where, if a state law purports to offer various routes for compliance, the law does not offer “employers a realistic alternative to creating or altering ERISA plans.” Golden Gate, 546 F.3d at 660; e.g., Retail Indus. Leaders Ass’n v. Fielder, 475 F.3d 180, 197 (4th Cir. 2007) (holding that Maryland health-plan law that “leaves employers no reasonable choices except to change how they structure their employee benefit plans” is preempted because it “directly regulates employers’ provision of healthcare benefits” and has a “‘connection with’ covered employers’ ERISA plans”). SMC 14.28 requires the creation of ERISA plans under any of its options, as already noted; so, the Court need not proceed to the question of whether it actually pushes employers to do so, instead of choosing a non-ERISA option (as there is no such non-ERISA option). Yet, if the Court determines that the first option does not involve the creation of an ERISA plan, then SMC 14.28 still has an impermissible connection with ERISA plans because the law does not meaningfully allow employers to choose the first option over the second and third options. The first option is financially more onerous and otherwise problematic, so as not to make it a reasonable choice over the other options, because (as alleged in the FAC ¶ 55): PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 21 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 27 of 30 1 • If they are required to spend additional corporate funds, rational employers will do 2 so in a manner whereby they can ensure that the money will be used for health 3 benefits for their workers (as is the case under the second and third options). 4 • Direct payments are costlier to employers because – in order to provide the same 5 benefits as if they choose the second or third options – they may have to pay the 6 employer share of federal employment taxes on the direct payments, whereas 7 expenditures on health coverage under the second and third options are not subject to 8 federal employment taxes. 9 • Offering health coverage to the employee is more financially advantageous to the 10 employee, and thus more appealing to the employer, because the employee too may 11 have to pay his or her share of federal employment taxes, as well as income taxes, on 12 the direct payments but not the health coverage. 13 • Offering health coverage to the employee through insured or self-funded employer- 14 sponsored plans is more advantageous to the employee who actually wants health 15 coverage, and thus more appealing and administratively feasible to the employer, 16 because greater coverage for the same amount typically can be obtained through a 17 program covering a large group than individually. 18 • The City’s earlier passage of Part 3 resulted in employers covered by that law 19 altering their ERISA plans to bring them into compliance with Part 3, and it is 20 unrealistic to expect employers who have already done the difficult work of 21 adjusting their employee-benefit arrangements to cover the additional individuals to 22 undo the new administrative regime in favor of direct payments. Instead, the City’s 23 legislative maneuvering has created “sunk costs” for covered employers, resulting in 24 the only reasonable option being for them now to further adjust the employer- 25 sponsored coverage. And if employers nevertheless did undo their prior work to 26 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 22 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 28 of 30 1 enhance their ERISA plan benefits and eligibility, this change itself would be an 2 amendment to ERISA plans resulting from SMC 14.28. 3 The City addresses none of these points, except in a footnote where it contends that there 4 are insufficient facts alleged in the FAC to support the allegations. Def.’s Mot. at 19 n.14. The 5 footnote is disingenuous, and it belies the detail in the FAC. The City never offers any 6 alternative set of facts or views regarding rational corporate behavior that would differ from the 7 FAC’s allegations. Indeed, the City never even disputes (because it cannot) that employers 8 responded to Part 3 by altering their ERISA plans, which is proof in itself that reasonable 9 corporate actors would not choose a direct-payment option, for they have not in the past, as all 10 11 appear to agree. Last, SMC 14.28 has a separate “connection with” ERISA plans triggering preemption, 12 because of its disclosure and record-keeping requirements (applicable to any of its options). 13 “[R]eporting, disclosure, and recordkeeping are central to, and an essential part of, the uniform 14 system of plan administration contemplated by ERISA.” Gobeille, 136 S. Ct. at 945. 15 “Differing, or even parallel, regulations from multiple jurisdictions could create wasteful 16 administrative costs and threaten to subject plans to wide-ranging liability” through state 17 enforcement provisions, making “[p]re-emption . . . necessary.” Id. 18 Here, SMC 14.28 has unique disclosure and record-keeping requirements associated 19 with the waivers. Particularly, an employer who offers coverage under its insured or self- 20 funded ERISA plan (at a 20% or less cost-share for the employee) has no obligation to comply 21 with SMC 14.28 – including the direct-payment requirement – if the employee declines the 22 coverage. However, SMC 14.28 has strict disclosure requirements about the ERISA plan 23 coverage that the employer must meet (including in various languages and using City-generated 24 forms), and also requires records be kept regarding the offer and the circumstances of the 25 declination. These records are well beyond the typical tax and wage data that employers must 26 keep for general legal compliance and concern nothing other than the terms and availability of PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 23 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 29 of 30 1 the employer’s insured and self-funded ERISA plans. Unlike in Golden Gate – which had no 2 waiver framework at all – these burdens exists only if “a covered employer has an ERISA 3 plan.” Golden Gate, 546 F.3d at 657. “Pre-emption [of SMC 14.28] is necessary to prevent the 4 States from imposing novel, inconsistent, and burdensome [disclosure and] reporting 5 requirements on plans.” Gobeille, 136 S. Ct. at 945. 5 CONCLUSION 6 7 The Court should deny in its entirety the City’s motion to dismiss the FAC. 8 DATED this 23rd day of March 2020. 9 KILPATRICK TOWNSEND & STOCKTON LLP 10 14 By /s/ Gwendolyn C. Payton Gwendolyn C. Payton, WSBA No. 26752 gpayton@kilpatricktownsend.com 1420 Fifth Avenue, Suite 3700 Seattle, WA 98101 Telephone: (206) 626-7714 Facsimile: (206) 260-8946 15 MILLER & CHEVALIER CHARTERED 11 12 13 Anthony F. Shelley, pro hac vice Theresa S. Gee, pro hac vice ashelley@milchev.com tgee@milchev.com 900 Sixteenth St. NW Washington, DC 20006 Telephone: (202) 626-5800 Facsimile: (202) 626-5801 16 17 18 19 20 Counsel for Plaintiff The ERISA Industry Committee 21 22 23 24 25 26 5 ERIC plans to move for summary judgment in due course. Given that the Supreme Court currently has before it an important ERISA preemption case, and SMC 14.28’s effective date might not necessitate resolution of ERIC’s FAC before the Supreme Court decides its preemption case, ERIC might reasonably await the Supreme Court’s decision before filing its own affirmative motion. See Rutledge v. Pharm Care Mgmt. Ass’n, No. 18-540 (U.S.) (oral argument scheduled for Apr. 27, 2020). PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT - 24 CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946 Case 2:18-cv-01188-TSZ Document 38 Filed 03/23/20 Page 30 of 30 CERTIFICATE OF SERVICE 1 2 I certify that on March 23, 2020, I caused a copy of the foregoing document, 3 PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST 4 AMENDED COMPLAINT, to be filed with the Clerk of the Court via the CM/ECF system. In 5 accordance with their ECF registration agreement and the Court’s rules, the Clerk of the Court 6 will send e-mail notification of such filing to the following attorneys of record: 7 8 9 10 11 12 13 14 15 16 17 18 Jeffrey Lewis KELLER ROHRBACK LLP 300 LAKESIDE DRIVE, STE 1000 OAKLAND, CA 94612 Email: jlewis@kellerrohrback.com Erin Maura Riley Rachel E. Morowitz KELLER ROHRBACK 1201 3RD AVE, STE 3200 SEATTLE, WA 98101-3052 Email: eriley@kellerrohrback.com Email: rmorowitz@kellerrohrback.com Jeremiah Miller SEATTLE CITY ATTORNEY 700 FIFTH AVENUE #2050 SEATTLE, WA 98104-7097 Email: jeremiah.miller@seattle.gov 19 /s/ Gwendolyn C. Payton Gwendolyn C. Payton 20 21 22 23 24 25 26 CERTIFICATE OF SERVICE CASE NO. - 2:18-CV-01188-TSZ KILPATRICK TOWNSEND & STOCKTON LLP 1420 FIFTH AVENUE, SUITE 3700 SEATTLE, WA 98101 (206) 626-7713 FAX: (206) 260-8946