Government Contracts
Sep. 13, 2001
9th U.S. Circuit Upholds S.F. Partners Rule
SAN FRANCISCO - A groundbreaking local ordinance, requiring businesses to offer domestic partner benefits to unmarried workers, is not preempted by the federal Airline Deregulation Act or the Railway Labor Act, a federal appeals court ruled Tuesday.
By 2-1 vote, the 9th U.S. Circuit Court of Appeals rejected arguments by United Air Lines, Federal Express Corp. and the Air Transport Association of America that two federal laws preempt the San Francisco ordinance because the local requirements allegedly affect prices, routes and service in violation of federal law.
The court held the effect on price, route or service is too tenuous or peripheral and thus the city ordinance is not preempted under the two federal statutes, Air Transport Assoc. v. San Francisco, 99-16391.
In June, the court upheld the city's 1997 ordinance in a separate case against claims that the ordinance violated the constitution's Commerce Clause and Equal Protection rights. That challenge failed in S.D. Myers Inc. v. San Francisco, 2001 DJDAR 6045.
Although the court rejected the claims based on the Airline Deregulation Act and Railway Labor Act, it did send the case back to the trial judge for the limited purpose of deciding whether the ordinance is preempted by California's Family Code Section 299.6, which was not in force when the district judge ruled.
That law created a statewide domestic partner registry. However, that law specifically exempts San Francisco from the state preemption section of the law, according to earlier statements by Jennifer Pizer, senior attorney for Lambda Legal Defense and Education Fund Inc.
The statewide domestic partner registry act was signed into law Oct. 2, 1999. The Myers case was also remanded for review of the potential preemption by state domestic registry law.
The nation's first law requiring businesses to offer domestic partner benefits applies to gay or lesbian couples as well as heterosexual partners. If airlines provide travel benefits and employee discounts to family members, they must also be allowed for registered domestic partners, according to the ordinance.
The court held that San Francisco could use its monopoly control over access to property at San Francisco International Airport to compel airlines to provide benefits on an equal basis to employees' families and domestic partners.
The appeals court stated that the requirement that airlines not discriminate in providing benefits "has no forbidden connection with prices or services. The ordinance simply requires that the airlines not discriminate in their provision of benefits. It does not bind the airlines to provide free or discounted tickets to anyone," wrote Judge Raymond Fisher.
"The airlines are free to set whatever terms, conditions and prices they want on the travel benefits and discounts they do decide to provide, as long as they do not discriminate," Fisher wrote. He was joined by Judge Johnnie B. Rawlinson.
In dissent, Judge J. Clifford Wallace wrote, "I would hold the district court fell into error by brushing aside the airlines' arguments on the basis that they would not in fact abandon their airport business."
He added, "This test misses the mark. Because of the city's monopoly power, the airlines must choose either to capitulate to the city's demands or not to compete for airport business."
Although Wallace would have supported the airline claim that the city law was preempted by federal acts, he was the author of the June ruling that upheld the ordinance against the constitutional Commerce Clause and Equal Protection challenges.
Pamela Mac Lean
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390
Send a letter to the editor:
Email: letters@dailyjournal.com