Federal Judiciary

Health care issue returns to Court

By Akin Gump Supreme Court Practice Group

Seeking to draw the Supreme Court back into the intensifying national debate over health care, a group representing restaurant operators in San Francisco on Wednesday asked for at least temporary relief from mandated spending for workers’ medical benefits.  In an application filed with Justice Anthony M. Kennedy, as Circuit Justice, the Golden Gate Restaurant Association sought delay of a Ninth Circuit Court ruling until after the Supreme Court acts on a coming appeal.  (The application can be found here.)

Justice Kennedy refused in February of last year to forbid the city and county to continue enforcing the local ordinance being challenged, then and now, by the Golden Gate group. (Kennedy acted then on application 07A654.  The new application is 08A824.) 

 Since Kennedy last acted, the ordinance has been upheld by the Ninth Circuit, in a ruling Sept. 30 rejecting a claim by the Association that the city-county law is preempted by federal worker benefit law (ERISA). On March 9, the en banc Ninth Circuit denied review, over the dissents of eight of the full Court’s judges.

In its new application, the restaurant employers sought to link their case to the initiatives President Obama is taking to deal with health care policy issues.  It argued that local mandates for health care spending, like the San Francisco ordinance, “present a significant obstacle to nationally uniform benefit plan administration.”

The group argued that, in the new Obama plan for economic recovery just passed by Congress, the nation’s leaders “heightened the national importance of employer-sponsored health care provided through ERISA plans.”  The new law provides subsidies for health care benefits, but that initiative, the application contended, could be frustrated by “purely local regulations aimed at concentrating employer payments in a particular jurisdiction, or encouraging the displacement of ERISA-governed benefits by public health programs.”

The issue at stake == whether local governments may mandate different levels of spending on employee health care — is growing in importance with the enactment by state and local governments of so-called “pay or play” or “fair play” statutes, requiring minimum spending on health benefits, according to the application.

While local mandates may increase access to health care in some states or cities, the application said, “they will likely lead some employers to spend only the minimum amount required and to reduce or elminate health care benefits outside those jurisdictions.”

Justice Kennedy is expected to seek a response from the local government and from labor unions involved in the case before he acts on the application.

Under the San Francisco ordinance, adopted July 25, 2006, employers with 100 employees must pay at the outset $1.73 per hour or about $300 a month in health spending for full-time employees; those with 20 to 99 workers must start at $1.17 per hour or about $203 a month.  There is to be a 5 percent increase each year.”

Full post as published by SCOTUSBLOG on March 18, 2009 (boomark / email).