CAMPAIGN FOR A LIVING WAGE v. New Orleans

• Decision Date: 04 September 2002
• Docket Number: No. 2002-CA-0991.,2002-CA-0991.
• Citation: 825 So.2d 1098
• Parties: NEW ORLEANS CAMPAIGN FOR A LIVING WAGE, Jean Matthews and Philomenia Johnson v. CITY OF NEW ORLEANS, Marc Morial, Mayor, The Council of the City of New Orleans and the State of Louisiana. The Small Business Coalition to Save Jobs, The Louisiana Restaurant Association and the Business Council of New Orleans and the River Region, v. The City of New Orleans.
• Court: Louisiana Supreme Court

825 So.2d 1098

NEW ORLEANS CAMPAIGN FOR A LIVING WAGE, Jean Matthews and Philomenia Johnson v. CITY OF NEW ORLEANS, Marc Morial, Mayor, The Council of the City of New Orleans and the State of Louisiana.

The Small Business Coalition to Save Jobs, The Louisiana Restaurant Association and the Business Council of New Orleans and the River Region, v. The City of New Orleans.

No. 2002-CA-0991.

Supreme Court of Louisiana.

September 4, 2002.

Stefanie J. Allweiss, Edward F. Harold, New Orleans, Horace A. Thompson, III, for Applicant.

Richard P. Ieyoub, Attorney General, Angie R. LaPlace, Baton Rouge, William P. Quigley, New Orleans, Elaine R. Jones, Louis L. Robein, Jr., Metairie, Robert Stroup, Mavis S. Early, Evelyn F. Pugh, Charles M. Delbaum, Mark A. Moreau, Rowena T. Jones, New Orleans, for Respondent.

H. Mark Adams, New Orleans, Clyde H. Jacob, III, Joshua A. Ulman, Robin S. Conrad, Stephen A. Bokat, Tilden R. Reid, III, for Amicus Curiae United States Chamber of Commerce.

H. Mark Adams, New Orleans, Clyde H. Jacob, III, Tilden R. Reid, II, for Amicus Curiae New Orleans Regional Chamber of Commerce, The Chamber of Greater Baton Rouge, Natchitoches Area Chamber of Commerce, Thibodaux Chamber of Commerce.

Gerald J. Huffman, Jr., David M. Whitaker, New Orleans, for Amicus Curiae Sydran Food Services, II.

Margaret Diamond, Eliska M. Plunkett, New Orleans, Ernst F. Preis, Jr., for Amicus Curiae Greater New Orleans Hotel Motel Association.

Audrey N. Browne, Horace A. Thompson, III, Harry A. Rosenberg, Christopher K. Ralston, New Orleans, for Amicus Curiae Louisiana Association of Business.

David H. Williams, New Orleans, for Amicus Curiae Interdenominational Ministerial Alliance.

KIMBALL, Justice.

These consolidated cases are before the court on direct appeal from a judgment of the district court declaring unconstitutional La. R.S. 23:642, which prohibits a local governmental subdivision from establishing a minimum wage which a private employer would be required to pay employees. At the same time, the district court upheld the validity of Ordinance No. 20376, an amendment to the home rule charter of the City of New Orleans that establishes a minimum wage for individuals employed and performing work in the City of New Orleans. For the reasons that follow, we find La. R.S. 23:642 is a legitimate exercise of the police power and therefore constitutional. We also find that Ordinance No. 20376 abridges the police power of the state and is unconstitutional. Consequently, we reverse the judgment of the district court.

Facts and Procedural History

Effective August 15, 1997, Act 317 of 1997 prohibits local governmental subdivisions from establishing a minimum wage rate which a private employer would be required to pay employees. In passing this Act, which became La. R.S. 23:642, the legislature found that in order for Louisiana businesses to remain competitive and to attract and retain the highest caliber of employees, and thereby to remain sound, a business must work in an environment of uniform minimum wage rates. The legislature further found that local variation in mandated minimum wages would lead to economic instability and decline and to a decrease in the standard of living for Louisiana's citizens. In September 2001, the New Orleans City Council passed Ordinance No. 20376, an ordinance placing on the ballot for vote by the electorate of New Orleans a proposal to add a new Chapter 5 to Article IX of the home rule charter of the City of New Orleans (the "City"). The proposed Charter Amendment (the "minimum wage law") establishes a minimum wage to be paid to employees performing work in the City of New Orleans of $6.15 per hour, or $1.00 above the prevailing federal minimum wage, whichever is greater. The ordinance does not apply to employees who are currently exempted from coverage under certain enumerated provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. 201 et seq., to city or state civil service employees whose wages are regulated by a civil service commission, or to persons employed on any public works contracts governed by the Louisiana Public Bid Law. Employers who fail to comply with the minimum wage law commit a misdemeanor "punishable by a fine of up to $200 for each day and each employee that wages are paid in violation thereof."

On Saturday, February 2, 2002, New Orleans voters approved the proposed Charter Amendment. The following day, Sunday, February 3, 2002, the New Orleans Campaign for a Living Wage,¹ joined by two individuals, Jean Matthews and Philomenia Johnson (collectively the "Proponents"), instituted a declaratory judgment proceeding against the City, its mayor and City Council, and the State of Louisiana, seeking a declaration of the validity of the City's new minimum wage law. In addition, petitioners sought a declaration that La. R.S. 23:642, the state law that prohibits local governmental subdivisions from establishing a minimum wage, is unconstitutional as applied to the City of New Orleans, a pre 1974 home rule charter city.

This suit was subsequently consolidated with a suit filed the following day by the Small Business Coalition to Save Jobs,² the Louisiana Restaurant Association, and the Business Council of New Orleans and the River Region (collectively the "Opponents"), against the City of New Orleans, seeking a declaratory judgment that the City's minimum wage law is invalid in light of La. Const. art. VI, § 9 and La. R.S. 23:642. The suit additionally sought injunctive relief prohibiting the City from enforcing the new law.

Following trial on the merits, the district court rendered judgment declaring La. R.S. 23:642 unconstitutional, upholding the validity of the City's minimum wage law, and denying the request for injunctive relief. In written reasons, the district court found that the City's minimum wage law does not violate Article VI § 9(A) of the Louisiana Constitution, which prohibits municipalities from enacting ordinances governing private or civil relationships, because it "is not consistent with or in conflict with any Louisiana statutory provisions pertaining to substantive rights, enforcement schemes, or remedies affecting civil or private relationships, particularly tort, contract and workers' compensation laws that govern employment relationships." As to La. Const. art. VI, § 9(B), which provides that the police power of the state shall never be abridged, and La. R.S. 23:642, which prohibits local governmental subdivisions from enacting minimum wage laws, the district court ruled that the Opponents of the minimum wage law failed to prove La. R.S. 23:642 was enacted pursuant to the police powers of the state because it was not necessary to protect the vital interest of the state as a whole. According to the district court, La. R.S. 23:642 is "too severe an interference with the City of New Orleans' constitutionally enumerated powers to be justified by the state's interest in remedying perceived and speculative economic concerns," and does not constitute a reasonable exercise of the state's police power under La. Const. Art. VI, § 9(B) "so as to qualify as an exception to the prohibition against state interference with home rule discretion." For these reasons, the district court declared La. R.S. 23:642 unconstitutional.

Finally, the court considered whether the City's home rule charter, by its own terms, prohibits the enactment of a minimum wage law. Drawing upon the provisions of Section 2-101 of the charter, which gives the City "the right, power, privilege, and authority to adopt and enforce local police, sanitary and similar regulations and to do and perform all of the acts pertaining to its local affairs, property and government, which are necessary or proper in the legitimate exercise of its corporate powers and municipal functions," the district court concluded that the minimum wage ordinance is a valid exercise of the City's police power.

Following the rendition of the district court's judgment, the Small Business Coalition to Save Jobs, the Louisiana Restaurant Association, and the Business Council requested a suspensive appeal directly to this court pursuant to La. Const. art. V, § 5(D).³ The district court granted these parties a devolutive appeal on March 28, 2002. On April 12, 2002, this court stayed execution of the district court's judgment pending further orders of this court. New Orleans Campaign for a Living Wage v. City of New Orleans, 02-0995 (La.4/12/02), 814 So.2d 1273.

Law and Discussion

As explained above, the instant case is before this court on direct appeal because La. R.S. 23:642 was declared unconstitutional by the district court. We must therefore begin with an analysis of this statute. Although the district court declared La. R.S. 23:642 wholly unconstitutional on its face, the Proponents argue only that the statute is unconstitutional as applied to the City, a pre 1974 home rule government. Specifically, the Proponents contend that the Opponents have not borne their burden of proving adequate constitutional grounds for the State to deny the City the power to adopt this particular minimum wage ordinance. In response, the Opponents argue that the statute's regulation of minimum wages is a valid exercise of the state's police power as it was enacted for the purpose of protecting the general economic welfare of the state as a whole and, therefore, an inconsistent ordinance cannot stand.

Local governmental autonomy or home rule exists only to the extent that the state constitution endows a local governmental entity with two interactive powers: the power to initiate local legislation and the power of immunity from control by the state legislature. City of New Orleans v. Board of Comm'rs of Orleans Levee Dist., 93-0690, p. 4 (La.7/5/94), 640 So.2d 237, 242. The City is governed by a home rule charter that was enacted prior to the 1974 constitution. This preexisting home rule charter was continued, and...