Coop. Home Care, Inc. v. City of St. Louis, SC 95401

• Decision Date: 28 February 2017
• Docket Number: No. SC 95401,SC 95401
• Citation: 514 S.W.3d 571
• Parties: COOPERATIVE HOME CARE, INC., et al., Respondents/Cross–Appellants, v. CITY OF ST. LOUIS, Missouri, et al., Appellants/Cross–Respondents.
• Court: Missouri Supreme Court

514 S.W.3d 571

COOPERATIVE HOME CARE, INC., et al., Respondents/Cross–Appellants,

v.CITY OF ST. LOUIS, Missouri, et al., Appellants/Cross–Respondents.

No. SC 95401

Supreme Court of Missouri, en banc .

Opinion issued February 28, 2017

Rehearing Denied April 25, 2017

John J. Rehmann II, James G. Martin, Robert F. Epperson Jr., Dowd Bennett LLP, Michael A. Garvin, Mark Lawson, Erin McGowan, City Counselor's Office, St. Louis, for Appellants/Cross–Respondents.

Jane E. Dueker, Thomas W. Hayde, Arthur D. Gregg, Spencer Fane LLP, James N. Foster Jr., Brian C. Hey, McMahon Berger, St. Louis, for Respondents/Cross–Appellants.

Arthur J. Clemens Jr., St. Louis, pro se.

Christopher N. Grant, Schuchat, Cook & Werner, St. Louis, for Municipal and Labor Law Scholars, the National Employment Law Project and Missouri Jobs with Justice.

Laura Denvir Stith, Judge

The parties cross-appeal a judgment invalidating St. Louis City's Ordinance 70078, which establishes a citywide local minimum wage. The trial court rejected Plaintiffs' arguments that the minimum wage ordinance governed a matter beyond purely local concerns and held that it was not preempted by section 67.1571, RSMo 2000, because the bill adopting that provision was unconstitutionally enacted. But, the trial court nonetheless invalidated Ordinance 70078 because it requires a higher minimum wage than the state requires in section 290.502, RSMo Supp. 2013. The trial court believed that section 71.010, RSMo 2000, which includes a general prohibition on local laws that conflict with state laws, would bar such supplemental local minimum wage ordinances.

This Court affirms the trial court's holding that section 67.1571 does not preempt Ordinance 70078 because section 67.1571 was enacted in a manner that violates article III, section 23 of the Missouri Constitution in that it contained more than one subject. This Court reaffirms that the City was not barred from raising the violation of article III, section 23 as a defense even though the statute of limitations set out in section 516.500, RSMo 2000, has expired because that limitations period does not apply to raising as a defense the constitutional validity of the manner in which a bill was enacted.

This Court also holds that Missouri's minimum wage law, section 290.502, considered alone or in conjunction with section 71.010, does not occupy the field of minimum wage laws, nor does it prohibit the adoption of local minimum wage ordinances such as Ordinance 70078. Section 290.502 prohibits employers from paying employees a wage lower than the state minimum, and nothing in the statute prevents local governments from adopting locally higher minimum wages. To the contrary, the legislature has enacted legislation, including HB 722, which refers to and allows for the continued effectiveness of local minimum wage ordinances, thereby recognizing and implicitly approving the adoption of local minimum wage ordinances that supplement the state minimum wage law.¹ Whatever effect on future ordinances HB 722 may have going forward, it does not purport to preempt ordinances otherwise effective on August 28, 2015. Ordinance 70078 was in effect on August 28, 2015, because it had not been preempted by the general minimum wage law or by section 67.1571. Local laws such as Ordinance 70078 are within a municipality's police powers, and the City did not improperly stray beyond its charter authority in enacting a minimum wage ordinance. The portion of the judgment invalidating Ordinance 70078 is reversed.

I. STATEMENT OF FACTS AND PROCEDURAL HISTORY

On August 28, 2015, St. Louis enacted Ordinance 70078 of its revised city code. It was signed and became effective that day. The ordinance provides a series of four graduated increases to the minimum wage for employees working within the physical boundaries of St. Louis, beginning on October 15, 2015 at $8.25 per hour and ending on January 1, 2018 at $11 per hour.² Beginning January 1, 2021, the minimum wage rate under section 2(B)(2) of the ordinance shall be increased annually on a percentage basis to reflect the rate of inflation. The ordinance further states, "If the state or federal minimum wage rate is at any time greater than the minimum wage rate established by this ordinance, then the greater shall become the minimum wage rate for purposes of this ordinance."

On September 14, 2015, Plaintiffs filed a seven-count petition against the City, the Board of Public Services, and various named city officers in their official capacities. The petition sought a declaratory judgment that Ordinance 70078 is invalid and injunctive relief to prevent Defendants from enforcing the ordinance. The petition alleged, inter alia, that local minimum wage ordinances are preempted by section 290.502(considered alone or in conjunction with section 71.010 ), by section 67.1571, and that Ordinance 70078 exceeds the charter authority granted to the City.

Section 290.502 contains Missouri's minimum wage law, which provides in relevant part that "every employer shall pay to each employee wages at the rate of $6.50 per hour, or wages at the same rate or rates set under the provisions of federal law." The minimum wage rate is subject to yearly adjustments by the Missouri Department of Labor and Industrial Relations, based upon any change in the cost of living. Under Missouri's minimum wage law, the state minimum wage rate is currently $7.65 per hour.

Section 67.1571 was adopted in 1998 through the enactment of HB 1636. Known as the Community Improvement District Act, HB 1636, as initially proposed, addressed solely the establishment, proper governance, and operation of community improvement districts. It did not address minimum wages or the minimum wage law in any way. Minimum wages were, instead, the subject of another bill, HB 1346, which proposed to "prohibit political subdivisions of this state from establishing or requiring a minimum wage that exceeds the state minimum wage." When HB 1346 failed to pass out of committee, comparable minimum wage language was added as a late amendment to HB 1636. H.B. 1636, 1998 Gen. Assemb., Reg. Sess. (Mo. 1998) ("No municipality ... shall establish, mandate or otherwise require a minimum wage that exceeds the state minimum wage."). Once HB 1636 became law, the minimum wage provision added to the bill was codified as section 67.1571.

On October 14, 2015, the trial court entered an order finding that section 67.1671 is invalid because it violates the single subject rule set out in article III, section 23 of the Missouri Constitution. It also found that Ordinance 70078 was expressly limited to local concerns and did not extend to matters of statewide or nationwide concern. The trial court nonetheless invalidated the ordinance as beyond the City's authority because it found that it was preempted by sections 290.502 and 71.010 because the trial court believed that section 71.010 prohibited the adoption of local ordinances supplementing any state law on a subject, including minimum wage ordinances.

Aware of uncertainties caused by litigation concerning section 67.1571, the General Assembly adopted another minimum wage bill, HB 722, on May 6, 2015. HB 722, now codified at section 285.055, RSMo Supp. 2015, provided:

No political subdivision shall establish, mandate, or otherwise require an employer to provide an employee: (1) [a] minimum wage or living wage rate; or (2) [e]mployment benefits; that exceed the requirements of federal or state laws, rules or regulations. The provisions of this subsection shall not preempt any state or local minimum wage ordinance requirements in effect on August 28, 2015.

Governor Nixon vetoed HB 722 on July 10, 2015, but on September 16, 2015, the General Assembly overrode his veto. HB 722 went into effect no later than October 16, 2015, which is 30 days after the veto was overridden.³ On October 26, 2015, Defendants filed a motion to amend or modify judgment because they believed their power to enact the ordinance was specifically acknowledged by certain "grandfathering" language contained in newly enacted HB 722, but the trial court overruled this motion on November 12, 2015. This appeal followed.

II. STANDARD OF REVIEW

This Court has exclusive appellate jurisdiction to review the constitutional validity of a statute. Mo. Const. art. V, sec. 3 . Determining the validity of a statute is a question of law that an appellate court reviews de novo . Peters v. Johns, 489 S.W.3d 262, 266 (Mo. banc 2016). "A statute is presumed valid and will not be held unconstitutional unless it clearly contravenes a constitutional provision." Rentschler v. Nixon, 311 S.W.3d 783, 786 (Mo. banc 2010). The party challenging the validity of the statute carries the burden of proving the act "clearly and undoubtedly" violates the constitution. Id.

Likewise, ordinances are presumed to be valid and lawful. McCollum v. Dir. of Revenue, 906 S.W.2d 368, 369 (Mo. banc 1995). The party challenging the validity of the ordinance carries the burden of proving the municipality exceeded its constitutional or statutory authority. Parking Sys., Inc. v. Kansas City Downtown Redev. Corp., 518 S.W.2d 11, 16 (Mo. 1974). "The words contained in the statute or ordinance should be given their plain and ordinary meaning and should be interpreted to avoid absurd results." McCollum, 906 S.W.2d at 369.

III. ST. LOUIS CITY'S LOCAL MINIMUM WAGE ORDINANCE IS NOT PREEMPTED AND IS NOT BEYOND THE CITY'S CHARTER AUTHORITY

A. General Concepts Governing Preemption

A constitutional charter city, such as St. Louis City, derives its charter powers from article VI, section 19(a) of the Missouri Constitution, which states in part:

Any city which adopts or has adopted a charter for its own government, shall have all powers which the general assembly of the state of Missouri has authority to confer upon any city, provided such powers are consistent with the constitution of this state and are not limited or denied either by the charter so adopted or

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