ERIC Urges Ninth Circuit Court of Appeals to Revisit Golden Gate Case Decision & Protect ERISA from Further Overreach

Washington, DC – The ERISA Industry Committee (ERIC) urged the United States Court of Appeals for the Ninth Circuit to convene en banc to rehear ERIC’s appeal in its case against the City of Seattle. ERIC’s petition details why the Ninth Circuit should overturn Golden Gate Restaurant Association v. San Francisco, 546 F.3d 639 (9th Cir. 2008), which ERIC believes was wrongly decided. The Ninth Circuit earlier relied on Golden Gate to dismiss ERIC’s challenge to a Seattle health coverage mandate, Municipal Code (SMC) 14.28.

ERIC has argued that the Seattle ordinance is preempted by the Employee Retirement Income Security Act (ERISA). SMC 14.28 requires large hotel owners and ancillary hotel businesses to provide what are essentially City-mandated levels of health benefits through federally regulated employer health plans. The requirement that hotel employers make direct payments to employees or provide coverage under their group health plans has an impermissible reference to and connection with an ERISA plan. It is therefore preempted by federal ERISA law.

“Federal law is clear in that states and localities cannot place mandates on ERISA plans offered by employers. ERISA was adopted to support employers that offer benefits to their workforce spread across the country, recognizing that these employers cannot be expected to comply with varying and disparate state and local mandates. The U.S. Supreme Court has recognized this, and we urge the Ninth Circuit to as well,” said Annette Guarisco Fildes, President and CEO, ERIC.

Golden Gate has been relied on twice by federal courts in ERIC’s Seattle health mandate case. In March 2020, the U.S. District Court for the Western District of Washington dismissed ERIC’s amended complaint against the City. In March of this year, a three-judge panel of the Ninth Circuit denied ERIC’s appeal. Both times, the courts concluded that, under Golden Gate, which involved an ERISA preemption challenge to a San Francisco regulation similar to the Seattle one, the Seattle ordinance is not preempted.

Today’s petition argues the Golden Gate decision conflicts with multiple decisions, including one from the Fourth Circuit (Retail Indus. Leaders Ass’n v. Fielder, 475 F.3d 180 (4th Cir. 2007)), the First Circuit (Merit Constr. Alliance v. City of Quincy, 759 F.3d 122 (1st Cir. 2014)), and the Fifth Circuit (Dialysis Newco, Inc. v. Cmty. Health Sys. Grp. Health Plan, 938 F.3d 246, 258 (5th Cir. 2019)). In 2016, the U.S. Supreme Court clarified, when a “statute contains an express preemption clause,” as ERISA does, courts must “not invoke any presumption against preemption” (Puerto Rico v. Franklin Cal. Tax-Free Trust, 136 S. Ct. 1938 (2016)).

The Supreme Court has also repeatedly said that under ERISA, employers can design plans as they see best for their workforce without influence from local governments. Additionally, the Court ruled a state or local law requiring an employer to provide a specific benefit or to design a benefit in a specific way is “clearly” preempted by ERISA (Shaw v. Delta Air Lines, 463 U.S. 85, 97 (1983)).

“There is clear precedent from the highest court in the nation that Golden Gate does not meet the standards of today’s law. The Ninth Circuit must not only review Golden Gate but right the wrongs of ERIC’s case and move to protect ERISA from further overreach,” said Guarisco Fildes.

Click here to read ERIC’s petition for a rehearing.

Click here for more information about ERIC’s Seattle lawsuit.

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All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918, kbroadway@eric.org

About The ERISA Industry Committee
ERIC is a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces. With member companies that are leaders in every sector of the economy, ERIC advocates on the federal, state, and local levels for policies that promote flexibility and uniformity in the administration of their employee benefit plans.