Chamber of Commerce of U.S. v. Lockyer

• Decision Date: 16 September 2002
• Docket Number: No. SA CV 02-0377 GLT.,SA CV 02-0377 GLT.
• Citation: 225 F.Supp.2d 1199
• Court: U.S. District Court — Central District of California
• Parties: THE CHAMBER OF COMMERCE OF THE U.S., et al. Plaintiffs, v. Bill LOCKYER, et al., Defendants.

225 F.Supp.2d 1199

THE CHAMBER OF COMMERCE OF THE U.S., et al. Plaintiffs, v. Bill LOCKYER, et al., Defendants.

No. SA CV 02-0377 GLT.

United States District Court, C.D. California, Southern Division.

September 16, 2002.

COPYRIGHT MATERIAL OMITTED

Stephen P. Pepe, Brent J. North, Renee M. Spigarelli, O'Melveny & Myers, Newport Beach, Bradley W. Kampas, Michael J. Lotito, Scott W. Oborne, Jackson Lewis, Mark E Reagan, Mark A. Johnson, Hooper Lundy Bookman, San Francisco, Stephen A. Bokat, Washington, DC, for the Chamber of Commerce of the United States, California Chamber of Commerce, Employers Group, California Healthcare Association, California Manufacturers and Technology Association, California Association of Health Facilities, California Association of Homes & Services for the Aging, Bettec Corporation, Marksherm Corporation, Zilaco Inc, Zilaco, Del Rio Healthcare Inc., Beverly Health & Rehabilitation Services, Inc. dba Beverly Manor Costa Mesa, Internext Group, plaintiffs.

Suzanne M. Ambrose, CAAG Office of Attorney General of California, Sacramento, for Bill Lockyer, in his capacity as Attorney General of the State of California, Department of Health Services, Frank G. Vanacore, as the Chief of the Audit Review and Analysis Section of the California Department of Health Services, Diana M. Bonta, Diana M. Bonta, R.N., Dr., P.H., as the Director of the California Department of Health Services, Does, 1 through 10, defendants.

ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT IN PART

TAYLOR, District Judge.

Plaintiffs' Motion for Summary Judgment is GRANTED in part.

I. BACKGROUND

Plaintiffs filed claims for declaratory and injunctive relief regarding Defendants' enforcement of the California Assembly Bill 1889 adding California Government Code § 16645 and following. AB 1889 prohibits the use of state funds or property to assist, promote, or deter union organizing; allows remedies for such violations; and requires state fund recipients to maintain sufficient records to show state funds were not improperly used under AB 1889. The Attorney General may request a copy of such records.

Plaintiffs bring a Motion for Summary Judgment arguing AB 1889 is unconstitutional under the federal and California Constitutions and preempted by the National Labor Relations Act (NLRA), Labor Management Reporting and Disclosure Act (LMRDA), and the Medicare Act. Defendants and Intervenors¹ contend Plaintiffs' claims are barred by the 11th Amendment, the abstention doctrine, and Article III standing requirements.²

II. DISCUSSION

Summary judgment is proper if "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. Proc. 56(c). A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2509, 91 L.Ed.2d 202 (1986). A factual dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

A. Preliminary Issues

Defendants and Intervenors argue the Court should not consider the merits of the case because Plaintiffs lack standing and Plaintiffs' claims are barred by the Eleventh Amendment and the abstention doctrine.

1. 11th Amendment

Defendants argue the Eleventh Amendment prevents the Court from considering Plaintiffs' claim based on violations of the California Constitution. The Eleventh Amendment has been interpreted as a grant of sovereign immunity to the states against suit in federal court. See Seminole Tribe of Florida v. Florida, 517 U.S. 44, 54, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). State officials may be subject to suits for declaratory and injunctive relief where enforcement of state law would violated the U.S. Constitution or federal statutes, Ex Parte Young, 209 U.S. 123, 166, 28 S.Ct. 441, 52 L.Ed. 714 (1908); Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 281, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997), but the Eleventh Amendment bars suits in federal court against state officials based on claimed violations of state law. Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 121, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984); Central Reserve Life of North America Ins. Co. v. Struve, 852 F.2d 1158, 1161 (9th Cir.1988). The Court will not take into account arguments based on violation of state law in considering the parties' motions for summary judgment.

2. Standing

Three components compose the constitutional minimum of Article III standing:

"First, the plaintiff must have suffered an `injury in fact'—an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of .... Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision."

U.S. v. Hays, 515 U.S. 737, 742-43, 115 S.Ct. 2431, 132 L.Ed.2d 635 (1995) (quoting Lujan, 504 U.S. at 560-561, 112 S.Ct. 2130). The party seeking the exercise of jurisdiction in his favor has the burden of demonstrating his standing. Hays, 515 U.S. at 743, 115 S.Ct. 2431. An organization that has not suffered any injury itself may sue in a representative capacity for injuries to its members if at least one member has standing to present the claim asserted by the association, the interests sought to be protected are germane to the association's purpose, and neither the claim asserted nor the relief requested requires the members' individual participation in the suit. Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977).

Plaintiffs apparently would not have standing to challenge §§ 16645.1, 16645.3, and 16645.4, governing reimbursement, activities, and expenditures of state contractors. Plaintiffs claims standing to challenge these sections "based on the danger they are applicable" and may be interpreted to cover one or more of Plaintiffs, but do not present facts to support this contention. The injury posed by this potential interpretation is "conjectural or hypothetical," and is not sufficient to satisfy the injury-in-fact component of standing. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

Plaintiffs also apparently would lack standing to challenge Gov.Code § 16645.6, a provision of AB 1889 prohibiting public employers receiving state funds from using those funds to "assist, promote, or deter union organizing," because the only public employers in the case, members of Plaintiff California Healthcare Association (CHA) are political subdivisions of the state. As political subdivisions of the state, members of Plaintiff CHA do not have standing to sue the state in federal court. City of South Lake Tahoe v. California Tahoe Regional Planning Agency, 625 F.2d 231, 233 (9th Cir.1980); Palomar Pomerado Health System v. Belshe, 180 F.3d 1104, 1108 (9th Cir.1999).³

However, Plaintiffs do have standing to challenge the remaining provisions of AB 1889. When any plaintiff has standing, the standing requirement is satisfied for all other plaintiffs who are proper parties on the same complaint because "the presence of one party with standing assures that [the] controversy before [the court] is justiciable." Department of Commerce v. United States House of Representatives, 525 U.S. 316, 328, 119 S.Ct. 765, 142 L.Ed.2d 797 (1999); Village of Arlington Heights v. Metropolitan Housing Develop. Corp., 429 U.S. 252, 264, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977). At least one Plaintiff, the United States Chamber of Commerce ("U.S.Chamber"), has standing to challenge the remaining provisions of AB 1889, which govern recipients of state funds grants, employers conducting business on state property, and private employers receiving state funds in excess of $10,000. Various U.S. Chamber members receive grants of state funds, conduct business on state property, receive state funds in excess of $10,000, currently use state funds in union-related activities, and do not keep records of the use of state funds. See Antonek Decl. ¶¶ 3-6; Hunte Decl. ¶¶ 2-4; Kampas Decl. Exh. B, C. The parties do not dispute Defendant Attorney General Lockyer intends to enforce AB 1889, and has done so through accounting demands and litigation. Plaintiffs have demonstrated an injury in fact redressable by this Court, and have standing to proceed.

3. Abstention

Defendants and Intervenors contend this Court should abstain from hearing the claims of Plaintiff California Association of Healthcare Facilities (CAHF) pursuant to Younger v. Harris. 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971)(explaining a federal court should not enjoin or interfere with pending state proceedings). Younger provides a federal court should abstain from review and dismiss an action if the federal action would "directly interfere with ongoing state judicial proceedings" involving identical constitutional issues, and the state court can address the federal parties' claims. See id. If the Younger standard is met, the Court does not have discretion to retain jurisdiction. See Green v. City of Tucson, 255 F.3d 1086, 1092-93 (9th Cir.2001).

Defendants and Intervenors argue the Court should dismiss CAHF because Summit Care California, Inc. and Brier Oak Convalescent Inc., defendants and cross-complainants in Lockyer v. Summit Care California, Inc., et al., a pending state court action concerning AB 1889, are members of CAHF.⁴ As stated in this Court's July 2, 2002 Order, if membership in a Plaintiff association is established, such relief would directly interfere with the Lockyer action because any relief this Court would award in favor of Plaintiffs would operate to enjoin the pending state proceedings involving Fountain View. See Cornwell v. Cal. Bd. of Barbering and Cosmetology, 962 F.Supp....