STATE
OF
FIRST
JUDICIAL DISTRICT COURT
NEW
MEXICANS FOR FREE ENTERPRISE,
THE
MARK
KIFFIN, MARK C. MILLER, MAURICE ZECK,
PEPPERS FOOD & BEVERAGE CO., INC.,
PRANZO,
ZUMA CORPORATION,
ROBBIE
DAY, JOSEPH HOBACK, and
PINON
GRILL AT THE HILTON OF
Plaintiffs,
v. No.
D-101-CV-2003-00468
THE
CITY OF
Defendant.
CITY OF
MOTION FOR SUMMARY JUDGMENT
THE CITY OF
Bruce Thompson WHARTON & GARRISON LLP
City Attorney
(505) 955-6511
(212) 373-3000
THE
Paul Sonn
161 Avenue of the
(212) 998-6328
This lawsuit, which challenges the validity of
The Living Wage Ordinance (“Ordinance”), Santa Fe City
Ordinance 2003-8, enacted pursuant to
Ultimately, as stated in the Ordinance’s Legislative
Findings, the City Council determined that there is a large disparity between
the wages earned by workers in
“Housing costs in
Confronted with these significant problems, the City
Council concluded that “the public welfare, health, safety and prosperity of
Accordingly, and acting pursuant to broad powers granted
to it by the New Mexico Constitution, see
N.M. Const. Art. X, § 6(D), (E), and
In the present lawsuit, Plaintiffs attempt to accomplish
in the courts what they failed to accomplish through the democratic
process. Plaintiffs have thrown the
proverbial “kitchen-sink” at
Defendants submit that this case presents no disputed
issues of material fact. As a matter of
law, the City Council had the authority to enact the Living Wage Ordinance, and
the Living Wage Ordinance does not conflict with or violate any constitutional
provision or state statute. Defendants
respectfully request that this Court grant summary judgment in favor of
Defendant City of Santa Fe (“
The full text of the Living Wage Ordinance is annexed hereto as an Appendix. Its principal features are as follows:
The Living Wage Ordinance contains detailed Legislative
Findings, quoted above, that describe the problems faced by workers in
The Ordinance applies to the following employers: (1) the
City of Santa Fe; (2) for-profit businesses that contract with Santa Fe to
perform services for the City if they employ more than 25 workers and the
contract in question is worth $30,000 or more; (3) businesses that receive
economic development assistance from Santa Fe in excess of $25,000; and (4)
businesses required to have a business license or registration from Santa Fe that
have 25 or more workers.
For purposes of calculating whether a business required
to have a business license or registration has 25 or more workers, the
Ordinance defines “worker” as “all individuals employed by or providing work to
the business for compensation, whether on a part-time, full-time, or temporary
basis, during a given month,” and includes “contingent or contracted workers,
and persons made available to work through the services of a temporary
services, staffing or employment agency or similar entity.”
The Ordinance provides that, by July 2005 – before the
second increase takes effect –
1. The
current Living Wage Ordinance is the product of an evolutionary process which
began in 2001. The City Council first
enacted a Living Wage Ordinance that applied only to the City of
2. An
early version of the Living Wage Ordinance was considered initially in the fall
of 2001.[1] (See Clerk Affidavit, Exhibit A, Minutes
of the City of
3. The
proposed ordinance would have established a $10.50 per hour minimum wage and
applied to businesses with ten or more employees receiving city service
contracts valued at $25,000 or more; businesses receiving city economic
development subsidies or grants of $50,000 or more; the City of Santa Fe itself
(as an employer); and private businesses within the city limits that earned
more than $3 million in annual gross receipts.
(See Clerk Affidavit, Exhibit B,
Minutes of the
4. The City Council’s Finance Committee debated the proposed ordinance on four different occasions between November 2001 and February 2002. During those four meetings, the Committee heard extensive comments from the public, considered materials on the proposed ordinance’s fiscal impact and legality, and proposed several amendments. (See Clerk Affidavit, Exhibit A at 5-16; Exhibit C, Minutes of the City of Santa Fe Finance Committee Meeting, January 7, 2002, at 47-52; Exhibit D, Minutes of the City of Santa Fe Finance Committee Meeting, February 4, 2002, at 55-73; Exhibit E, Minutes of the City of Santa Fe Finance Committee Meeting, February 18, 2002, at 82-84.)
5. The Finance Committee sent an amended version of the bill to the full City Council for consideration. The amended bill did not extend the wage increase to private businesses other than those contracting with, or receiving grants from, the City. It phased-in the living wage over a number of years beginning at $8.50 per hour in 2003, then $9.50 per hour in 2004, and rising to $10.50 per hour in 2005. (See Clerk Affidavit, Exhibit F, Action Sheet for Santa Fe City Council Meeting of February 27, 2002, at 93-94.)
6. The Committee also sent the City Council an accompanying resolution establishing a “Living Wage Roundtable,” which was to “advise and assist the city in adopting a citywide living wage ordinance.” (See id. at 107.)
7. On
8. Before
doing so, the Council heard comments for and against the Ordinance from 34 citizens
of
a. the City Personnel Director, who testified on the fiscal impact of the Ordinance (see id. at 123-24);
b. a professor of Labor and Industrial Relations (see id. at 141);
c. business owners and operators (see id. at 131-34, 140);
d. representatives of business associations; (see id. at 128, 130, 132, 133);
e. representatives of unions (see id. at 135, 137-39, 143); and
f. local workers (see id. at 139, 142).
9. The
“Living Wage Roundtable” Resolution, Resolution No. 2002-15, also passed
unanimously that same day. (See id. at 169.) The Resolution charged the Roundtable with
responsibility to “explore and develop a proposed amendment to the city code
that would require a citywide living wage.”
(See Clerk Affidavit, Ex. F at
107.) The Resolution specified that the
Living Wage Roundtable would have nine members, including a chairperson, as well
as four members that would seek “input from the business community” and four
members that “would seek input from the labor community. (See
Clerk Affidavit, Ex. H, Minutes of the Living Wage Roundtable,
10. The Living Wage Roundtable met ten times throughout the summer and fall of 2002. (See Clerk Affidavit, Ex. H; Ex. I, Minutes of the Living Wage Roundtable, June 18, 2002; Ex. J, Minutes of the Living Wage Roundtable, July 2, 2002; Ex. K, Minutes of the Living Wage Roundtable, July 16, 2002; Ex. L, Minutes of the Living Wage Roundtable, August 6, 2002; Ex. M, Minutes of the Living Wage Roundtable, August 20, 2002; Ex. N, Minutes of the Living Wage Roundtable, September 3, 2002; Ex. O, Minutes of the Living Wage Roundtable, October 1, 2002; Ex. P, Minutes of the Living Wage Roundtable, November 12, 2002; Ex. Q, Minutes of the Living Wage Roundtable, December 6, 2002.)
11. During
those meetings, the Roundtable heard testimony and considered and debated
numerous materials concerning working conditions in
12. The materials received and reviewed by the Roundtable included:
a. data on poverty, wages, public benefits, and business characteristics in Santa Fe and New Mexico (see Ex. J at 222-23; 250-60; 297-313; Ex. L at 384-90; Ex. M at 415-21; Ex. N at 430-31; Ex. O at 458-59, 497);
b. economic research on the impact of minimum wage and living wage legislation in cities and states across the United States over the past decade (see Ex. J at 229, 266-96); and
c. information on the economic conditions facing low-income families in Santa Fe and the widening gap between the cost of living in the region and the wages for workers in Santa Fe’s service economy (see Ex. J at 314-24; Ex. M at 412; Ex. N at 428-30, 447; Ex. O at 458, 463, 471-75; 496; 498-99).
13. In the end, the Roundtable submitted to the City Council a majority and a minority report. (See Clerk Affidavit, Ex. R at 555-568.)
14. The majority
report, endorsed by five of the Roundtable’s nine members, recommended
extending the living wage ordinance to cover private employers in
15. The minority report, prepared by the Roundtable’s four other members, recommended more study of the potential fiscal impact of such a measure. (See id. at 565-67.) While not endorsing extending the ordinance to the private-sector, the minority Report recommended a variety of considerations that any private sector living wage ordinance should take into account, including excluding certain workers and businesses from the scope of any potential ordinance, treating employees who earn tips differently from those who do not, and recognizing the value of benefits that employees might receive when calculating the wage of an employee, including health benefits and child care subsidies. (See id. at 556-68.)
16. After the Roundtable’s reports were submitted to the City Council, proposed amendments to the Living Wage Ordinance were filed with the City Council. On January 21, 2003, the Finance Committee considered and heard testimony on the proposed amendments. (See Clerk Affidavit, Ex. S, Minutes of the City of Santa Fe Finance Committee Meeting, January 21, 2003, at 572-75.)
17. Among
other things, the amendments would extend the Living Wage Ordinance to private
businesses with ten or more employees and non-profit businesses with 25 or more
employees. Employees that customarily
receive more than $100 per week in tips would have their tips credited towards
payment of the wage. The amendments set
the minimum wage initially at $8.50 per hour, but the rate’s increase to $9.50
per hour was delayed until July 1, 2005, and the increase to $10.50 until July
1, 2007. (See id. at 572-74; see also Clerk
Affidavit, Ex. T, Public Works Committee Meeting Minutes,
18. Subsequently, after discussing the proposed amendments briefly at a Public Works Committee meeting and a full City Council Hearing, the City Council scheduled public hearings on the amendments for February 3 and February 17, 2003, before the Finance Committee. (See Ex. T at 578-79; Ex. U, Santa Fe City Council Minutes, January 29, 2003, at 600-601.)
19. At those hearings, the Finance Committee heard extensive public testimony, both in support of and against the amended Ordinance. The Committee heard comments from 34 people on February 3 and from 42 people on February 17. (See Clerk Affidavit, Ex. V, Minutes of the City of Santa Fe Finance Committee Meeting, February 3, 2003; Ex. W, Minutes of the City of Santa Fe Finance Committee Meeting, February 17, 2003.) Among those who testified were:
a. workers struggling to support themselves and their families (see Ex. W at 638);
b. business owners who opposed the Ordinance and were concerned that they could not afford to raise wages (see Ex. V at 605-07, 611-13; Ex. W at 623-24, 628);
c. business owners who supported the living wage extension as a positive step for Santa Fe and “the right thing to do” (see Ex. W at 625, 630);
d. religious and community leaders worried about the widening economic inequality that Santa Fe has seen in recent years (see id. at 624, 629, 633, 636); and
e. labor advocates explaining that ensuring all Santa Feans earn a decent wage helps the whole community (see id. at 630).
20. Notably, at the February 17 hearing, the Finance Committee heard testimony from Dr. Samuel Bowles, the Director of the Economics Program at the Santa Fe Institute who has taught economics at Harvard University and the University of Massachusetts, and has served as an economic advisor to Senator Robert F. Kennedy, the Rev. Jesse Jackson, the Rev. Martin Luther King, Jr., President Nelson Mandela, the World Bank and the International Labor Organization. (See id. at 621-23.) Dr. Bowles read and presented written testimony to the Committee (Dr. Samuel, Bowles, “Testimony on the Economic Impact of an Increase in the Minimum Wage), in which he concluded that “scholarly estimates of the effect of increases in minimum wages on the total costs of putting a product on the market suggest that the impact is small.” (See id. at 643.)
21. The full City Council considered and debated the amended Living Wage Ordinance again on February 26, 2003. (See Clerk Affidavit, Ex. X, Santa Fe City Council Minutes, February 26, 2003, at 674-730.)
22. Due to the significant public interest in the Ordinance – a petition supporting the Ordinance signed by 1,532 Santa Fe residents and other organizations had been published in the New Mexican – the Council held the meeting in the Sweeney Convention Center. (See Ex. X at 736-49.)
23. At that hearing, the City Council considered a fiscal impact report prepared by the City Economic Development Planner. (See Ex. X at 674-75, 731-33.)
24. The Council also heard testimony and considered materials submitted by Dr. Robert Pollin, a Professor of Economics who serves as the Co-Director of the Political Economy Research Institute at the University of Massachusetts-Amherst, and who has studied the impact of living wage ordinances enacted around the country. (See id. at 675-76; Ex. Y at 771-84.) Dr. Pollin noted that “someone who works full-time for 52 weeks at the $5.15 national minimum would earn $10,712 . . . [which is] 12.2 percent below the 2001 national poverty threshold for a family of two
(1 adult, 1 child).” (See
Ex. Y at 772) He concluded that “raising
prices and productivity by a relatively small amount are likely to be the
predominant means through which most affected firms will absorb their increased
costs. In such cases, the gains of
living wage ordinances to low-wage workers and their families will be larger
than the costs of the ordinance that would be borne by either businesses or the
consumers facing small price increases.”
(See Ex. Y at 780.)
25. The City Council also heard testimony
from many
26. The City Council heard testimony in opposition to the Ordinance from a director of policy analysis from the Employment Policies Institute, who urged more study of the effects of the Ordinance, and considered a report prepared by Dr. David A. MacPherson, a professor of economics at Florida State University, which projected, among other things, that a $10.50 minimum wage in Santa Fe would result in 154 workers being laid off by Santa Fe businesses. (See id. at 691-93; Ex. Y at 755-70.)
27. The City Council also considered testimony from business owners opposed to the Ordinance who stated that they would have difficulties complying with it and that it would limit the ability of businesses to provide benefits to their employees, such as health care. (See Ex. X at 695-99, 701.)
28. In total, the Council heard testimony from over 150 people that night. (See id. at 674-711.)
29. In
the early morning hours of
30. Before doing so, however, the City Council approved several final amendments, including:
a. increasing the small business exception to all private businesses with less than 25 workers (see id. at 725);
b. allowing employers to credit the value of any health or child care benefits that they may provide towards payment of the living wage (see id.);
c. delaying the effective date of the Ordinance to January 2004, and delaying the phase-in dates of the scheduled step increases of $9.50 and $10.50 until 2006 and 2008, respectively, (see id. at 727-29); and
d. requiring the City to conduct a City review of the ordinance’s success by 2005, before the second wage increase takes effect (see id. at 724, 728).
31. After the Ordinance was enacted, opponents of the Ordinance tried to persuade the State Legislature to enact a bill that would preempt the Ordinance. That bill failed to make it out of the Legislature. (See Ex. Z, New Mexico Legislature’s record of HB588, “Prohibit Minimum Wage Exceeding Federal Wage,” at 785.)
Plaintiffs’ Complaint contains nine counts. In Count I, Plaintiffs allege that the Ordinance violates Article X, § 6 of the New Mexico Constitution, which prohibits home rule municipalities from enacting “private or civil laws governing civil relationships except as incident to the exercise of an independent municipal power.” In Counts II and III, Plaintiffs allege that the Ordinance violates the Equal Protection Clause and the Substantive Due Process Clause of the New Mexico Constitution, respectively. In Count IV, Plaintiffs allege that the Ordinance is unconstitutionally vague. In Count V, Plaintiffs allege that the Ordinance is an unconstitutional “taking” of private property without just compensation. In Counts VI, VII, and VIII, Plaintiffs allege that the Ordinance is preempted by the New Mexico Minimum Wage Act (“MWA”), the New Mexico Human Rights Act, and the New Mexico Antitrust Act, respectively. Finally, in Count IX, Plaintiffs allege that the Ordinance violates the Santa Fe City Code.
“Summary judgment is proper if there are no
genuine issues of material fact and the movant is entitled to judgment as a
matter of law.” Roth v. Thompson, 113
N.M. 331, 334, 825 P.2d 1241 (1992); see
also Rule 1-056(C) NMRA 1998. The
movant need only make a prima facie showing that he is entitled to summary
judgment. See Goodman v. Brock, 83
N.M. 789, 792, 498 P.2d 676 (1972). Upon the movant making a prima facie showing,
the burden shifts to the party opposing the motion to demonstrate the existence
of specific evidentiary facts which would require trial on the merits. See Dow
v. Chilili Coop. Ass'n, 105 N.M. 52,
54, 728 P.2d 462 (1986). If the facts are not in dispute, and only
their legal effects remain to be determined, summary judgment is proper. See Gardner-Zemke Co. v. State, 109 N.M. 729, 732, 790 P.2d 1010
(1990).
Plaintiffs’ arguments are all without merit as a matter
of law. The Living Wage Ordinance is
presumed to be constitutional. See Los Ranchos de Albuquerque, 119 N.M.
150, 157, 889 P.2d 185 (1995) (“We always begin with the presumption that the
decision of the municipality was valid.”); City
of
Plaintiffs cannot possibly meet their burden. The Living Wage Ordinance was enacted after a
public, democratic process by a legislative body extremely concerned about the
welfare of its citizens and the fiscal health of the City. In so legislating, the City Council acted
pursuant to broad powers granted to it by the New Mexico Constitution and
The Living Wage Ordinance does not violate any part of
the New Mexico Constitution or statutory law.
First, even assuming arguendo
that the Living Wage Ordinance regulates “civil relationships” within the
meaning of the New Mexico Constitution, it falls well within the exception for
ordinances that are incident to an independent municipal power – in this case
the power expressly conferred on municipalities to enact ordinances to preserve
the health, safety, and general welfare.
Second, Plaintiffs’ challenge to the Ordinance under the Equal Protection
and Due Process provisions is frivolous.
The Ordinance is social and economic legislation which easily meets the
“rational basis” standard of review applicable to such legislation under those
provisions of the New Mexico Constitution – like other minimum wage laws
unsuccessfully challenged under similar federal and state constitutions since
at least the 1930’s. Third, Plaintiffs’
arguments that the Ordinance is preempted by the State’s minimum wage law,
human rights law, and antitrust law are also without merit. Under the Home Rule Amendment of the New
Mexico Constitution, municipalities have all legislative powers not “expressly
denied.” None of these laws – or any other
law – expressly denies