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UNITED STATES
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COCA COLA BOTTLING COMPANY OF SANTA FE, INC., |
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Case No. CIV 03-1440 WJ/RHS |
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Plaintiff, |
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v. |
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THE CITY OF |
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Defendant. |
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MEMORANDUM
IN SUPPORT OF MOTION TO DISMISS
OR, IN
THE ALTERNATIVE, TO STAY
Plaintiff
Coca Cola Bottling Co. of Santa Fe (“Coca Cola”) seeks to relitigate in this
Court the legality of the Santa Fe Living Wage Ordinance (“the Ordinance”), despite
the fact that its legality was fully litigated and recently upheld in the First
Judicial District of New Mexico in New Mexicans for Free Enterprise et al.
v. City of Santa Fe, No. D-0101-CV-2003-468 (“the state court
proceeding”). New Mexicans for Free
Enterprise (“NMFE”)[1] and the
Santa Fe Chamber of Commerce (“the Chamber”) brought the state court proceeding
over a year ago on behalf of their members, including Coca Cola.[2] In the state court proceeding, NMFE and the
Chamber attacked the ordinance on grounds similar to those that Coca Cola now
asserts in this Court. The state court
proceeding occupied more than a year of intensive litigation, including a full
bench trial. It resulted in a final
judgment upholding the Ordinance against all attacks and the Chamber and NMFE
recently announced their intent to appeal.
Accordingly, the validity of the Ordinance is under thorough review
within the
The background of
this duplicative federal suit is no secret.
In late February, 2003, two weeks before the state court proceeding
began, NMFE’s lawyer announced that NMFE intended to file suit in both state
and federal courts.[3] On
Coca Cola and the state court plaintiffs opened this second front under the cover of federal constitutional claims that NMFE and the Chamber calculatedly refrained from pleading in their state court proceeding. If Coca Cola’s federal claims were substantial and if it were genuinely independent of the state plaintiffs, the maneuver might pass a blush test. But Coca Cola’s federal claims are not colorable. Furthermore, not only has Coca Cola’s state claim been decided in a state district court, it will soon be decided authoritatively by New Mexico’s appellate courts, whose interpretation of state law will be binding on federal courts.
Coca Cola’s federal constitutional claims (Counts 2-5), such as they are, arise under the Fourteenth Amendment to the United States Constitution and consist of allegations that the Ordinance violates equal protection, substantive due process, vagueness, and the Privileges or Immunities Clause. Notably, the state constitutional equivalents of all but the privileges or immunities clause were litigated and rejected in the state court action.
Coca
Cola’s pendent state claim (Count 6) charges that enactment of the Ordinance exceeded
Santa Fe’s home rule powers under Article X, § 6 of the New Mexico Constitution
because the Ordinance amounts to a local law “governing civil relationships.” Compl. ¶¶ 98-99. This question of first impression under
By this motion, Defendant
the City of
As to Coca Cola’s sole state law claim: First, if this Court agrees that Coca Cola’s federal claims are subject to dismissal, then the Court should dismiss the state law claim pursuant to 28 U.S.C. § 1367(c) as there would no longer be a proper basis for supplemental jurisdiction. Second, even if the Court were to conclude that Coca Cola’s federal law claims do not warrant dismissal, it should nevertheless dismiss Coca Cola’s pendent state law claim because it presents a “complex” issue of state law that, under 28 U.S.C. § 1367(c), is not an appropriate subject for supplemental jurisdiction. Third, even if this Court were to conclude that Coca Cola’s federal claims are not subject to dismissal, and that 28 U.S.C. § 1367(c) does not require dismissal of the pendent state claim, then this Court should stay consideration of the state claim — and of this lawsuit — pursuant to the abstention principle outlined in Thibodaux v. Louisiana Power and Light Co., 360 U.S 25 (1959), pending resolution of this “decisive issue[ ] of state law” by the New Mexico appellate courts. See infra Points II-III.
PROCEDURAL HISTORY
On February 27,
2003, the Santa Fe City Council voted to enact Santa Fe City Ordinance 2003-8 —
the Santa Fe Living Wage Ordinance. The
Ordinance amended an earlier law enacted in 2002, Santa Fe City Ordinance 2002-13,
which had established an $8.50 per hour minimum wage applicable to employees of
businesses receiving certain contracts or subsidies from the City, as well as
to employees of the City itself. The new
Ordinance, which had an effective date of
The Ordinance was
the product of a fifteen month public process of debate and fact-gathering by
the citizens of
As the Ordinance
moved forward in the City Council, Certain members of the business community,
including the Chamber and NMFE — a business group established for the sole
purpose of fighting the Ordinance — began planning a coordinated legal strategy
to challenge it in both state and federal court.[5] On the day that the Ordinance was enacted,
their attorney announced to the media that “he plan[ned] to file a motion for
preliminary injunction in state District Court early next week after reviewing
the new law, ‘to keep the ordinance from going into effect,’ followed by
another suit in federal court.” John T.
Huddy, “Living Wage” Headed to Court,
Two weeks later,
on
The state court
lawsuit was thoroughly litigated in the trial court over the subsequent fifteen
months. The trial court heard the City’s
motions for summary judgment and plaintiffs’ motion for a preliminary
injunction in December 2003, after which the court dismissed many of
plaintiffs’ claims, ordered a trial on the remaining issues, and enjoined
enforcement of the Ordinance pending trial.
After months of pre-trial motions, discovery, and depositions, the trial
was held from
On
In December 2003,
the Chamber and NMFE moved forward with the second prong of their legal
strategy, by orchestrating the filing of this federal court lawsuit by Chamber
member, Coca Cola. At that time, the
The federal court complaint is virtually identical to that in the state court action. The state constitutional analogs of three of Plaintiff’s four federal claims― equal protection, vagueness, and substantive due process ― were litigated in the state case. The only new federal claim is Count 5 ― Plaintiff’s vague (and frivolous) Privileges or Immunities Clause claim. Indeed, in many instances the language used in the federal complaint is virtually identical to the language used in the state complaint.
As the City will
demonstrate below, Coca Cola’s federal claims are not even colorable, but
apparently are intended to serve as a federal jurisdictional mechanism by which
to relitigate the very same state law claim ― whether Santa Fe has
authority under New Mexico’s constitutional home rule provision to enact a
minimum wage law ― that had been the focus of the state lawsuit. This state claim, which raises a question of
first impression under
As it turned out,
seeking a federal court injunction in December 2003 proved unnecessary as the
state court issued a preliminary injunction barring enforcement of the
Ordinance pending trial. With the state
court injunction in place, Coca Cola, NMFE, and the Chamber took no further
action on the federal lawsuit, and refrained from serving the summons and
complaint until some four months later, on
Now
that the state court has decided the case and lifted the injunction, Plaintiff
Coca Cola evidently seeks to activate this lawsuit and seek a preliminary
injunction from this court barring enforcement of the Ordinance. See John T. Huddy, Coke Co. to Take
“Wage” to Court,
LEGAL STANDARD
A
motion to dismiss under Fed. R. Civ. P. 12(b)(6) should be granted where
it appears beyond doubt that the plaintiff can prove no set of facts in support
of his or her claim which would entitle him or her to relief. Sutton v.
ARGUMENT
I. PLAINTIFF’S FEDERAL CLAIMS ARE WITHOUT LEGAL BASIS AND WARRANT DISMISSAL
The four substantive federal claims[6] pleaded in Plaintiff’s Complaint ― that the Ordinance and its classifications violate equal protection, vagueness, substantive due process, and the Privileges or Immunities Clause, all under the Fourteenth Amendment of the U.S. Constitution ― are without legal basis and warrant dismissal. Plaintiffs’ objections to the Ordinance, were they well-founded, would equally invalidate numerous state and federal labor and employment laws, including the New Mexico Minimum Wage Act (“MWA”), N.M. Stat. Ann. § 50-4-22 et seq., and the federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., since they incorporate many of the same features that Plaintiff challenges in the Ordinance. But federal law on all of these points has been clear for more than fifty years. Rejecting legal challenges to the legislative reforms of the New Deal, the U.S. Supreme Court long ago upheld economic regulatory legislation such as minimum wage laws, and rejected the notion that they should be subject to exacting review under the Fourteenth Amendment.
A.
The
Ordinance Does Not Deny Plaintiff Equal Protection of the Law
Plaintiff’s
first substantive claim is that the Living Wage Ordinance violates the Equal
Protection Clause of the Fourteenth Amendment “by creating arbitrary and
capricious classes for those individuals desiring to conduct business in the
City of
As a
threshold matter, it is critical to note that classifications contained in
economic regulatory legislation such as the Ordinance are subject only to
“rational basis” review ― the most deferential form of equal protection scrutiny. As the Supreme Court has instructed,
In areas of social and economic policy, a statutory classification
that neither proceeds along suspect lines nor infringes fundamental
constitutional rights must be upheld against equal protection challenge if
there is any reasonably conceivable state of facts that could provide a
rational basis for the classification.
Where there are “plausible reasons” for [the legislative] action, our
inquiry is at an end.
F.C.C. v. Beach Communications, Inc., 508
Described
as “a paradigm of judicial restraint,” Beach, 508
The Constitution presumes that, absent some reason to infer
antipathy, even improvident decisions will eventually be rectified by the
democratic process and that judicial intervention is generally unwarranted no
matter how unwisely we may think a political branch has acted.
As
a result, the court need only conclude that there could be a “reasonably
conceivable state of facts that could provide a rational basis for the
classification . . . . [A] legislative
choice is not subject to courtroom fact-finding and may be based on rational
speculation unsupported by evidence or empirical data.” Cordoba v. Massanari, 256 F.3d 1044,
1049 (10th Cir. 2001) (quoting Beach, 508
Especially in
fashioning legislative classifications, lawmakers enjoy extraordinarily wide
latitude. As the Supreme Court explained
nearly half a century ago,
Evils
in the same field may be of different dimensions and proportions, requiring
different remedies. Or so the
legislature may think. Or the reform may
take one step at a time, addressing itself to the phase of the problem which
seems most acute to the legislative mind.
The legislature may select one phase of one field and apply a remedy
there, neglecting the others.
Williamson v. Lee Optical,
348
Such scope-of-coverage provisions
are unavoidable components of most economic or social legislation. . . . This necessity renders the precise
coordinates of the resulting legislative judgment virtually unreviewable,
since the legislature must be allowed leeway to approach a perceived problem
incrementally.
Beach, 508
Plaintiff alleges
that at least nine of the Ordinance’s classifications, which define which
businesses are and are not covered by the living wage, are unconstitutionally
arbitrary. But a moment’s consideration
makes clear that for each of them a “reasonably conceivable state of
facts that could provide a rational basis for the classification” is evident.
For example, Plaintiff
alleges that there is no conceivable rational basis for the Ordinance’s
provision (§ 28-1.5(A)(4)) limiting coverage to businesses required “to have
a business license or business registration from the city of
Plaintiff goes on to complain that, by limiting coverage to employers with business licenses, the Ordinance effectively exempts various other employers, including “state and federal employers.” Compl. ¶ 57. Again, administrative ease readily justifies the Ordinance’s approach to coverage. Additionally, the Council might have questioned whether it had the legal authority to regulate the wages paid by state and federal agencies. Or, it could also have concluded that poverty wages posed less of a problem among state and federal employers, since most government jobs pay substantially more than minimum wage.
Similarly,
rational bases for the Ordinance’s limiting of coverage to hours worked within
the City of
Surprisingly, Plaintiff
also challenges as unconstitutionally irrational the Ordinance’s limiting of
its coverage to firms that have 25 or more employees. Compl.
¶¶ 59, 60. However, such firm-size
coverage thresholds are found in myriad labor and employment laws at the
federal, state, and local levels. See,
e.g., Age Discrimination in Employment Act, 29 U.S.C. § 630(b) (2000) (20
or more employees); Civil Rights Act of 1964, Title VII, 42
U.S.C. § 2000e(b) (2002) (15 or more employees); N.M. Hum. Rights
Act, N.M. Stat. Ann. §
In 1937, the Supreme Court laid to rest the notion that use of such coverage thresholds violated equal protection:
It is argued here, and it was ruled by the court below, that there can be no reason for a distinction . . . between those who have only seven employees and those who have eight. Yet, this is the type of distinction which the law is often called upon to make. It is only a difference in numbers which marks the moment when day ends and night begins, when the disabilities of infancy terminate and the status of legal competency is assumed. It separates large incomes which are taxed from the smaller ones which are exempt, as it marks here the difference between the proprietors of larger businesses who are taxed and the proprietors of smaller businesses who are not.
Carmichael v. Southern Coal
& Coke Co., 301
Defining the class of persons subject to a regulatory requirement ― much like classifying governmental beneficiaries ― inevitably requires that some persons who have an almost equally strong claim to favored treatment be placed on different sides of the line, and the fact [that] the line might have been drawn differently at some points is a matter for legislative, rather than judicial, consideration.
Plaintiff also
challenges as arbitrary the Ordinance’s coverage of businesses that receive
grants, subsidies, loans or industrial revenue bonds from the City of $25,000
or more, or that perform contracts for the City valued at $30,000 or more. Compl.
¶¶ 67-70. Such coverage provisions
are found in virtually every living wage law and reflect a judgment that, where
a business receives a large taxpayer-funded benefit, it is appropriate to ask
them to pay a living wage in return. As
with firm-size thresholds, legislatures enjoy broad discretion in setting the
level of such thresholds, which are not subject to further review by the
courts.
Plaintiff next
challenges Ordinance § 28-1.7, which exempts from coverage businesses that
“recogniz[e] an exclusive representative for employees and execut[e] a bona
fide collective bargaining agreement by and between an employer and its
employees.” Compl. ¶¶ 61-64.
Like numerical coverage thresholds, such exemptions from regulatory
requirements for workers covered by collective bargaining agreements are
commonplace in federal, state and local labor and employment laws. See, e.g., FLSA, 29 U.S.C. § 203(m)
(2000) (providing that employers need not include the cost of board, lodging
and other facilities as an element of wages “to the extent it is excluded
therefrom under the terms of a bona fide collective-bargaining agreement
applicable to the particular employee”); MWA, N.M. Stat. Ann § 50-4-2(C)
(Michie 1978) (providing that certain employees may be paid once a month, but
not “those employees whose salaries are subject to provisions of collective
bargaining agreements”); Brief for Employers Group et
al. as Amici Curiae, Livadas v. Bradshaw, 512 U.S. 107, at
Addendum B (1994) (available at 1992 U.S. Briefs 1920 (Lexis))
(cataloging 32 state code provisions from 19 states containing collective
bargaining opt-out provisions).
Courts have routinely dismissed equal protection challenges
to such exemptions, explaining that rational bases for them are readily
apparent. For example, a “[l]egislature
could rationally have believed that workers covered by collective bargaining
agreements . . . have greater power to ensure [adequate] working
conditions than workers with individual employment agreements.” Viceroy
Gold v. Aubrey, 75 F.3d 482, 491 (9th Cir. 1996) (upholding
As the Supreme Court has observed
in a case determining whether a state labor policy was preempted by federal
law, “a number of state and federal laws . . . draw distinctions
between union and nonunion represented employees,” Livadas v. Bradshaw,
512 U.S. 107, 131 (1994) (citing 29 U.S.C. § 203(o); D.C. Code Ann. § 36-103 (1993)), in which the content of
collective bargaining agreements can affect whether and how a statute
applies. The Court referred to these as
“familiar and narrowly drawn opt-out provisions.”
RUI One Corp., 2004 WL 1336657, at *16 (upholding against due process challenge provision of Berkeley’s living wage ordinance allowing businesses with “bona fide collective bargaining agreements to opt out of the ordinance”).[7]
The Ordinance’s
other exemptions challenged by Plaintiff are similarly routine and supported by
obvious rational bases. Plaintiff
challenges the exemption from the Ordinance’s coverage of city contractors of
any non-profit organizations that contract with
Finally, Plaintiff challenges the Ordinance’s exclusion of (a) interns working for academic credit in connection with a course of study at an accredited school, (b) workers who are in an apprenticeship program in a 501(c)(3) (non-profit) organization, and (c) persons working in connection with a court-ordered community service program. Ordinance § 28-1.5(A)(4); Compl. ¶¶ 72-73. All of these exclusions involve special categories of workers that derive non-monetary benefits from their employment: the student intern receives academic credit, the apprentice receives experience from the non-profit; and the community-service worker receives leniency from the court. The City Council could rationally have concluded that, in light of these additional benefits, and in order to create an incentive for employers to continue participating in such programs, it made sense to exempt such workers from the living wage.
Again, all of the
challenged classifications are of the sort commonly found in labor and
employment regulations across the country.
Plaintiff’s complaint tacitly and improperly asks this Court to “judge
the wisdom, fairness, or logic of [these] legislative choices,” Beach,
305
B.
The
Ordinance Does Not Violate Substantive Due Process
In the Complaint’s second substantive count, Count 3, Plaintiff
alleges that the Ordinance violates the substantive due process component of
the Fourteenth Amendment because it is not the “most rational means” by
which to satisfy the Ordinance’s stated objectives. Compl. ¶ 80 (emphasis added). Plaintiff goes on to assert that the
Ordinance will result in “higher unemployment, higher prices, decreases in
benefits offered to employees, an increase in the demand for highly skilled and
highly educated workers, and a migration of businesses from the City of Santa
Fe.”
In
arguing that the Ordinance must employ the most rational means available
for achieving its aims, Plaintiff fundamentally misunderstands substantive due
process. Explaining the exceedingly
narrow contours of such review, the Supreme Court has repeatedly
emphasized that legislative bodies “have the broad scope to experiment with
economic problems, and this Court does not sit to subject [state and local
governments] to an intolerable supervision hostile to the basic principles of
our government and wholly beyond the protection which the . . . [Due Process
Clause] was intended to secure.”
As
the Tenth Circuit has explained, so long as a statute does not “trammel[]
fundamental personal rights, we are to presume that . . .
legislatures have acted within their constitutional power and are to require
only that the law bears a reasonable relation to the state’s legitimate purpose
. . . .” Oklahoma
Educ. Ass’n v. Alcoholic Beverage Laws Enforcement Com’n, 889 F.2d 929, 935
(10th Cir. 1989) (internal quotation marks omitted). For economic legislation like the Ordinance,
rational basis review in the substantive due process context mirrors that of
equal protection: “It is enough that
there is an evil at hand for correction, and that it might be thought
that the particular legislative measure was a rational way to correct it.” Murphy v. Matheson, 742 F.2d 564, 576
(10th Cir. 1984) (quoting Williamson, 348
The notion that minimum wage legislation violates due process was categorically rejected by the Supreme Court in 1937 in West Coast Hotel Co. v. Parrish, 300 U.S. 578, 398-400 (1937). In West Coast Hotel, the Court stressed:
In dealing with the relation of employer and employed, the Legislature has necessarily a wide field of discretion in order that there may be suitable protection of health and safety, and that peace and good order may be promoted through regulations designed to insure wholesome conditions of work and freedom from oppression.
Here,
the higher minimum wage provided for under the Ordinance is clearly a
permissible means by which the City Council and the Santa Fe community may
choose to help local workers “meet the basic needs of living in Santa Fe,”
Ordinance, § 28-1.4, improve their lives, and reduce the effects of the
erosion of the federal minimum wage on the City itself.
As the Tenth Circuit has instructed, “[T]he
Due Process Clause does not empower the judiciary ‘to sit as a
‘superlegislature to weigh the wisdom of legislation.’” Murphy, 742 F.2d
at 574 (quoting
Because the Ordinance is rationally related to a legitimate governmental purpose, Plaintiff’s due process claim must be dismissed.
C.
The
Ordinance Is Not Unconstitutionally Vague
The Complaint’s next substantive claim, Count 4, charges that certain provisions of the Ordinance are “so vague and ambiguous that it is unconstitutional.” Compl. ¶ 86. First, Plaintiff charges that Ordinance§ 28-1.5(B), which allows “the value of health benefits and childcare [to] be considered as an element of wages” and credited towards satisfaction of the $8.50 minimum wage, leaves a business owner “to guess as to how to convert the value of health benefits and childcare into an hourly rate for purposes of including them as an element of wages.” Compl. ¶ 88. Second, Plaintiff challenges as unconstitutionally vague another provision of Ordinance § 28-1.5(B) ― which provides that tips and commissions shall be counted as wages and credited towards payment of the minimum wage for “workers who customarily receive more than $100 per month in tips or commissions,” (emphasis added) ― because “it fails to provide a definition, or any guidance, for the term ‘customarily.’” Compl. ¶ 91.
As an initial matter, Coca Cola has not alleged — and it seems unlikely that it will be able to show — that it is actually affected by these provisions, and that therefore it has standing to challenge them. Plaintiff would be affected by them only if it currently provides health or childcare benefits to any of its workers who earn less than the Ordinance’s current $8.50 minimum wage ― or if it currently employs tipped workers who earn less than $8.50 an hour. Since few employers provide health or child care benefits to low-wage workers, and since the Coca Cola Bottling Co. is unlikely to employ tipped workers, it probably is not affected by these provisions ― and therefore lacks standing to challenge them. If the Court does not grant this motion, the City will seek dismissal of the vagueness claim on standing grounds once discovery has confirmed whether Plaintiff employs workers that are affected by these provisions.
But whether or not
Plaintiff actually has standing to raise the vagueness claim, the count clearly
warrants dismissal as it fails to state a claim. “[T]he vagueness doctrine bars enforcement
of ‘a statute which either forbids or requires the doing of an act in terms so
vague that men of common intelligence must necessarily guess at its meaning and
differ as to its application.’” U.S.
v. Lanier, 520
The Supreme Court has further explained that in the case of economic regulation, such as the Ordinance, vagueness review is even more deferential:
The degree of vagueness that the Constitution tolerates ― as well as the relative importance of fair notice and fair enforcement ― depends in part on the nature of the enactment. Thus, economic regulation is subject to a less strict vagueness test because its subject matter is often more narrow, and because businesses, which face economic demands to plan behavior carefully, can be expected to consult relevant legislation in advance of action. Indeed, the regulated enterprise may have the ability to clarify the meaning of the regulation by its own inquiry, or by resort to an administrative process.
The challenged
provisions are not only understandable by persons “of common intelligence,” but are
virtually identical to provisions contained in both federal and
There is nothing ambiguous about Ordinance § 28-1.5(B)’s instruction that “In computing the wage paid for purposes of determining compliance with the minimum wage, the value of health benefits and childcare shall be considered as an element of wages.” The provision means what it says: In assessing whether it may continue paying any of its employees a cash wage of less than the Ordinance’s $8.50 minimum wage, Plaintiff should calculate the per hour amount of any expenditure it makes to provide health or child care benefits to the employee and then determine whether that amount, combined with the hourly cash wage, totals at least $8.50.[9]
Similar provisions authorizing that certain benefits provided by employers may be counted as wages for purposes of complying with wage regulations can be found throughout federal and state law. See, e.g., Davis-Bacon Act, 40 U.S.C.A. § 3141 et seq. (formerly 40 U.S.C. § 276(a)) (requiring certain federal contractors to pay their employees the “prevailing wage” and providing that in addition to the basic hourly amount of pay, the term “wages” may include payments for “medical or hospital care,” “pensions,” “insurance,” and “other bona fide fringe benefits”); N.M. Public Works Minimum Wage Act, N.M. Stat. Ann. § 13-4-12(A)(2)(b) (Michie 1978) (requiring the same for certain state contractors); MWA, N.M. Stat. Ann. § 50-4-22(A) (providing exception to minimum wage such that “an employer furnishing food, utilities, supplies or housing to an employee who is engaged in agriculture may deduct the reasonable value of such furnished items from any wages due to the employee” (emphasis added)); N.M. Workers Compensation Act, N.M. Stat. Ann. § 52-1-20 (Michie 1978) (providing that the term “‘average weekly wage’ shall include the reasonable value of board, rent, housing or lodging received from the employer, which shall be fixed and determined from the facts in each particular case”) (emphasis added); Rate of contribution or cost for fringe benefits, 29 C.F.R. § 5.25 (2003) (explaining that the “rate of contribution or cost is ordinarily an hourly rate, and will be reflected in the wage determination as such”).
Like the Ordinance, these state and federal statutes provide no detailed explanation about procedures for converting into wages the value of benefits provided. Yet their constitutionality has not been questioned and employers and enforcement officials have had little difficulty understanding and applying them.
Similarly, there is nothing vague about Ordinance § 28-1.5(B), which provides that “For workers who customarily receive more than $100 per month in tips or commissions, any tips or commissions received and retained by a worker shall be counted as wages and credited towards satisfaction of the minimum wage.” The Complaint charges that because the Ordinance “does not provide a definition, or any guidance, for the term ‘customarily,’” it forces employers to engage in an “exercise in guesswork and speculation” to determine how to comply. Compl. ¶ 91.[10]
But employers of tipped workers have for decades understood and complied with virtual identical provisions contained in the New Mexico Minimum Wage Act and the federal Fair Labor Standards Act. See FLSA, 29 U.S.C. § 203(t) (2002) (providing that a “[t]ipped employee means any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips”) (emphasis added); MWA, N.M. Stat. Ann. § 50-4-22(B) (Michie 1978) (stating that all employees who “customarily and regularly receive more than thirty dollars ($30.00) a month in tips shall be paid a minimum hourly wage of two dollars twelve and one-half cents ($2.125). The employer may consider tips as wages, but such a wage credit shall not exceed fifty percent of the minimum wage.”) (emphasis added). Accordingly, Plaintiff’s claim that the Ordinance’s health, child care, and tip credit provisions are unconstitutionally vague is without any legal or factual basis and should be dismissed.
D.
The
Ordinance Does Not Violate the
Privileges or Immunities Clause of the Fourteenth Amendment
In the Complaint’s
final and perhaps most novel federal claim, Count 5, Plaintiff alleges
that the Ordinance violates the Privilege or Immunities Clause of the
Fourteenth Amendment. But long ago in
the Slaughter-House Cases, 83
As the Privilege or Immunities Clause has never been found to limit minimum wage regulation in any way, this claim ― like Plaintiff’s other federal claims ― is frivolous and must be dismissed.
II. THE COURT SHOULD DECLINE TO EXERCISE SUPPLEMENTAL JURISDICTION OVER THE PLAINTIFF’S PENDENT STATE CLAIM
As demonstrated above, Plaintiff’s federal claims are without any colorable basis. Plaintiff seems to have pled them to justify federal jurisdiction over a lawsuit to which the only real claim ― the state law question of whether the Ordinance falls within the City’s home rule powers under the New Mexico Constitution ― could be appended. Because the federal claims warrant dismissal and ― even if they didn’t ― because the pendent state law claim poses a “complex issue of State law,” exercise of supplemental jurisdiction is inappropriate. The state law claim ― and with it, the entire lawsuit ― should be dismissed pursuant to 28 U.S.C. § 1367(c).
Under the
supplemental jurisdiction statute, a federal court possessing original
jurisdiction over a federal claim may exercise jurisdiction over state claims that
form part of the same “case or controversy” as the underlying federal
matter. 28 U.S.C. § 1367(a). However, under the statute, the court may
decline to exercise such supplemental jurisdiction over a pendent state claim
where:
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or
claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it
has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling
reasons for declining jurisdiction.
28 U.S.C. § 1367(c).
In deciding
whether to retain jurisdiction over a supplemental state claim, a judge must
exercise discretion “in those cases in which, given the nature and extent of
pretrial proceedings, judicial economy, convenience, and fairness would be
served by retaining jurisdiction.” Anglemeyer
v. Hamilton County Hosp., 58 F.3d 533, 541 (10th Cir. 1995) (quoting Thatcher
Enter. V. Cache County Corp., 902 F.3d 1472, 1478 (10th Cir. 1990)). As the Supreme Court has explained, “[pendent
jurisdiction’s] justification lies in considerations of judicial economy,
convenience, and fairness to litigants; if these are not present a federal
court should hesitate to exercise jurisdiction over state law claims . . . .” United Mine Workers v. Gibbs, 383
Here, the state claim should be dismissed under both 28 U.S.C. § 1367(c)(3) — because the Court will likely dismiss all of the Plaintiff’s federal claims — and 28 U.S.C. § 1367(c)(1) — because it raises a complex issue of state law. See O’Connor v. Nevada, 27 F.3d 357, 362-63 (9th Cir. 1994) (“[D]istrict courts may decline to exercise supplemental jurisdiction over a claim if any one of the four circumstances listed in the statute exist.”) (emphasis added) (internal quotation marks omitted).
With regard to the
former, the Tenth Circuit teaches that “the most common response to a
pretrial disposition of federal claims has been to dismiss the state law claim
or claims without prejudice — that is the seminal teaching of United Mine Workers v. Gibbs, [383 U.S. 715, 726
(1966)].”
Roe v. Cheyenne Mountain
Conference Resort, Inc., 124 F.3d 1221,
1237 (10th Cir. 1997). See also United
Mine Workers, 383
Moreover, even if
the federal claims are not dismissed, the state claim should be dismissed under
28 U.S.C. § 1367(c)(1) because it raises a complex issue of state law that
is presently proceeding through the
Indeed, if this
Court were to retain jurisdiction over the state claim, it would, in any event,
be obliged to follow the
III.
In the event that
this Court does not dismiss Plaintiff’s federal and state claims ― and,
as explained above, dismissal is clearly warranted ― the Court should,
under the abstention principle outlined in Thibodaux v. Louisiana Power
& Light Co., 360 U.S. 25 (1959), stay further proceedings pending
resolution of the state law question in the ongoing litigation in the New
Mexico courts.
As it has worked
to fashion a set of abstention principles to guide the federal courts, the Supreme
Court has long recognized “the wisdom of staying actions in the federal courts
pending determination by a state court of decisive issues of state law.”
This teaching
reflects respect for the principles of “our federalism,”