Healthcare Ass'n of N.Y. State, Inc. v. Pataki
| Decision Date | 17 May 2005 |
| Docket Number | No. 1:03-CV-0413.,1:03-CV-0413. |
| Citation | 388 F.Supp.2d 6 |
| Parties | HEALTHCARE ASSOCIATION OF NEW YORK STATE, INC.; New York Association of Homes and Services for the Aging, Inc.; New York State Health Facilities Association, Inc.; NYSARC, Inc.; United Cerebral Palsy Associations of New York State, Inc., Plaintiffs, v. George E. PATAKI, Governor of the State of New York; Eliot Spitzer, Attorney General of the State of New York; Linda Angello, Commissioner of Labor of the State of New York, Defendants. |
| Court | U.S. District Court — Northern District of New York |
O'Connell and Aronowitz (Jeffrey J. Sherrin, of counsel), Albany, NY, for Plaintiffs.
Eliot Spitzer (Seth Kupferberg, Assistant Attorney General, of counsel), New York City, for Defendants.
Eliot Spitzer (Stephen M. Kerwin, Assistant Attorney General, of counsel), Albany, NY, for Defendants.
Jones Day (Willis J. Goldsmith, Yoora Pak, of counsel), Washington, DC, for Amici Curiae Chamber of Commerce of the United States of America, et al.
Whiteman Osterman & Hanna (Joel L. Hodes, of counsel), Albany, NY, for Amicus Curiae New York State Association of Health Care Providers, Inc.
Brennan Center for Justice (Paul K. Sonn, of counsel), New York City, for Amici Curiae Brennan Center for Justice; AARP; Center for Disability Rights; etc. Brennan Center for Justice at NYU School of Law.
Plaintiffs are a group of five health care organizations, whose members or affiliates provide a broad range of health care services, such as operating "220 acute care hospitals," "nearly 300 residential health care facilities," and providing services to individuals "with mental retardation and other developmental disabilities[.]" Amended Complaint ("Co.") at 4, ¶¶ 6 and 8; and at 5 ¶ 9. Plaintiffs are suing the Governor, the Attorney General and the Commissioner of Labor for the State of New York, seeking to overturn section 211-a of New York's Labor Law ().
In a nutshell, that statute prohibits the use of "state funds," including Medicaid (which provides a substantial portion of the funding for plaintiffs), from "encourag[ing] or discourag[ing] union organization[.]" N.Y. LAB. LAW § 211-a (McKinney Supp.2004). Supporters of the law, such as the AFL-CIO, depict it as a "`union neutrality law[,]'" 66 BNA Daily Labor Report A-5, 2003, whereas plaintiffs describe it as an "`Employer Gag Law.'" Co. at 11, ¶ 28.
Given the chasm between labor and management with respect to the impact of § 211-a on labor relations in the workplace, it is not surprising that several groups moved to appear as amicus curiae in this action. The court assumes familiarity with its May 27, 2004, decision granting amicus status to the Business Council; the Coalition and the Brennan Center.
In this declaratory judgment action, plaintiffs allege that the National Labor Relations Act ("NLRA") and the Labor Management Reporting and Disclosure Act ("LMRDA") preempt section 211-a. Plaintiffs are also mounting several constitutional challenges to section 211-a, claiming that it violates their rights under the First and Fourteenth Amendments.
In its original form, section 211-a of the New York State Labor Law read as follows:
Notwithstanding any other provision of law, no monies appropriated by the state for any purpose shall be used or made available to employers to train managers, supervisors or other administrative personnel regarding methods to discourage union organization.
N.Y. LAB. LAW § 211-a (McKinney 2002) (emphasis added). Effective December 29, 2002, the scope of that statute was greatly expanded. Under the amended version of section 211-a, organizations that receive state funding, including Medicaid, are barred from using such monies to either encourage or discourage union organizing. Prohibited activities include the hiring of attorneys or consultants or the training of managers or hiring employees "to encourage or discourage union organization, or to encourage or discourage an employee from participating in a union organizing drive[.]" Id. § 211-a(2) (McKinney Supp.2004). In addition, § 211-a contains detailed reporting requirements "sufficient to show that state funds were not used to pay for ... activities [prohibited thereunder.]" Id. § 211-a(3). The statute goes on to grant the State Attorney General enforcement powers in the form of seeking the "return of unlawfully expended funds[ ]" and the imposition of civil penalties. See id. at § 211-a(4). Finally, in its amended form § 211-a directs the State Labor Commissioner to, inter alia, promulgate regulations pertaining to the financial recordkeeping requirements thereunder. See id. at § 211-a(5).
As noted at the outset, the parties have widely divergent views of section 211-a. The plaintiff health care associations which allegedly are "either currently facing union organizing campaigns or reasonably expect to be subjected to [same] in the near future[,]" refer to it as the "`Employer Gag Law.'" Co. at 10, ¶ 23; and at 11, ¶ 28. In their view section 211-a is nothing more than an "ill-conceived statute," which the State has enacted "[i]n its fervor to defeat employer opposition to union organization[.]" Pl. Memo. at 1.
Conversely the State refers to section 211-a as a "labor neutrality bill [,]" which, according to Governor Pataki, "will protect taxpayers by ensuring that State tax dollars are used for their intended purpose, instead of being diverted to promote or discourage union organizing activities[.]" Co., exh. B thereto at 1. Despite being touted as labor "neutral," unions clearly view section 211-a as sending a pro-union message. In the Governor's press release announcing the amendment of section 211-a, the President of New York State's AFL-CIO proclaimed that that statute "`ensures that taxpayer dollars will not be used to interfere with a worker's constitutional right to join a union.'" Id. Another supporter of section 211-a claims that that statute will "`provide much needed protection for workers seeking to organize unions.'" Id.
There is one minor procedural issue which needs to be clarified. In its Notice of Motion, arguing that plaintiffs have failed to state a claim upon which relief may be granted, the State is moving for dismissal pursuant to Fed.R.Civ.P. 12(b)(6). Alternatively, in their opposition memorandum, in accordance with Fed.R.Civ.P. 12(c), the State is seeking to have its Rule 12(b)(6) motion converted to a motion for summary judgment. As alluded to during oral argument, the court views the preemption issues which these motions present as "predominately legal," and hence it sees no need to convert the State's motion to one for summary judgment. See Pac. Gas & Elec. v. State Energy Resources Conserv., 461 U.S. 190, 201, 103 S.Ct. 1713, 1720, 75 L.Ed.2d 752 (1983). Consistent with the foregoing, in deciding plaintiffs' cross-motion for summary judgment the court will take into account only those documents which would be otherwise permissible in connection with a Rule 12(b)(6) motion.
Clearly the court's decision to treat the State's motion as a Rule 12(b)(6) motion rather than a Rule 56 motion, limits the scope of the record herein. Included in the State's supporting papers is the affidavit of an attorney representing UNITE, a labor union which "organizes and represents employees employed by agencies which receive funding from" New York State. Affidavit of Brent Garren (Dec. 17 2003), at 1-2, ¶¶ 1 and 2. Currently UNITE is involved in litigation before the National Labor Relations Board ("NLRB"). In that matter the employer, Independent Residences, Inc. ("IRI"), alleges "that the [union] election should be overturned because New York State Labor Law Sec. 211-A interfered with its ability to campaign against UNITE." Id. at 2, ¶ 5. Attached to the Garren affidavit are a number of documents pertaining to that NLRB matter.
During oral argument the court directed the State to provide a copy of the exceptions filed to the Administrative Law Judge's decision in IRI. See Transcript (Sept. 13, 2004) ("Tr.") at 46. It also directed the State to provide the court with a copy of the transcript of the argument. Id. at 76. The State complied, but in its post-argument submissions it included 20 additional documents which the court did not request. Among those documents are newspaper articles, excerpts from several books and articles as well as the State Comptroller's 2003-04 Budget Analysis. Plaintiffs and one of the amici, the Chamber of Commerce of the United States ("the Chamber"), objected to these additional documents being made a part of the record on these motions. Thereafter, the court informed the parties that insofar as those objections were concerned, it would "advise the[m] ... as to its determination in due course." Dkt. # 61.
Having had the opportunity to carefully consider the State's post-hearing submissions and the objections to same as to whether such should be made a part of the record herein, the court sustains the objections to same.
The court will address NLRA preemption first. If the court finds that the NLRA preempts section 211-a, then there is no need to address the issue of LMRDA preemption, see Tr. at 62, and there would be no need to address the constitutionality of that statute. See Piazza's Seafood World, LLC v. Odom, No. Civ.A. 04-690, 2004 WL 1375306, at *4 (E.D.La. June 17, 2004) (); see also Greater N.Y. Metropolitan Food Council v. Giuliani, 195 F.3d 100, 110 (2d Cir.1999).
Preemption has its origins in the Supremacy Clause of the United States Constitution, which provides in pertinent part that "the Laws of the United States which...
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