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.
COMPLAINT FOR DECLARATORY JUDGMENT AND INJUNCTIVE RELIEF
NOW COME the Plaintiffs, New Mexicans for Free Enterprise, Mark Kiffin, Maurice Zeck, Peppers Food & Beverage Co., Inc., Pranzo, Zuma Corporation, Robbie Day, Joseph Hoback, and Pinon Grill at the Hilton of Santa Fe (hereinafter, “NMFE”), by and through their counsel of record, Beall & Biehler, and for their Complaint for Declaratory Judgment and Injunctive Relief, state as follows:
1. The Plaintiffs, Mark Kiffin, Mark C. Miller, Maurice Zeck, Robbie Day, and Joseph Hoback have standing to bring this action in that they are individuals operating businesses licensed by the City of Santa Fe and are bound to adhere to the ordinances enacted by the City Council of the City of Santa Fe, and employ more than twenty-five (25) employees.
2. The Plaintiffs, Pranzo,
Ross Enterprises, Inc., Zuma Corporation, and Peppers Food & Beverage Co.,
Inc. have standing to bring this action in that they are businesses licensed by
the City of
3. The Plaintiffs, New Mexicans for Free Enterprise and the Santa Fe Chamber of Commerce have standing to bring this action in that they are comprised of members who would otherwise have standing to bring this action in their own right and the interests they seek to protect are germane to their own organizational purpose.
4. Defendant, City of
5. Jurisdiction and venue are proper before this Court.
6. On
7. The
ordinance applies to all businesses who employ
twenty-five (25) or more employees who obtain a business license from the City
of
8. The
9. The stated purpose of the ordinance is to have the City of Santa Fe set an example for the public and private sectors by paying its employees a minimum wage adequate to meet the basic needs of living in Santa Fe, and to raise the income of low-income employees of employers who contract with the City, receive grants or subsidies from the City or receive other benefits from the City’s actions.
10. Without
citing or relying upon any credible empirical evidence, the City of
a. The public welfare, health, safety and prosperity of Santa Fe requires wages and benefits sufficient to ensure a decent and healthy life for workers and their families;
b. Many
c. Many
d. Minimum wage laws promote
the general welfare, health, safety and prosperity of
e. The average earnings per
job in
f. Housing costs in
g. Livable wages also benefit employers and the economy as a whole by improving employee performance, reducing employee turnover, lowering absenteeism, and thereby improving productivity and the quality of the services provided by employees;
h. When businesses do not pay a living wage, the city bears the cost in the form of increased demand for taxpayer-funded social services including homeless shelters, soup kitchens and healthcare for the uninsured;
i. It is in the public
interest to require certain employers benefiting from city actions and funding,
and from the opportunity to do business in the city, to pay employees a minimum
wage, a “living wage,” adequate to meet the basic needs of living in
j. According to the 2000 Census, approximately 12.3% of our community lives below the poverty level; and
k. According to the New Mexico Department of Labor, 23.5% of Santa Feans who are employed in the non-governmental sector earn hourly wages of $10.50 per hour or less.
11. While
the City Council claims to have determined that the average earnings per job in
12. The Minimum Wage Ordinance provides for various means of enforcement including revocation of a business license and criminal penalties.
13. The
ordinance will become effective on
14. An
actual and real controversy exists between the Plaintiffs and the City of
15. The
Plaintiffs seek a determination from this Court declaring the City of
16. The Plaintiffs further pray this Honorable Court grant a preliminary and permanent injunction to prevent the enactment of the Minimum Wage Ordinance.
17. The Plaintiffs will suffer irreparable harm if the ordinance is allowed to take effect and will suffer injury, which far outweighs any damage the issuance of an injunction might cause to the Defendants.
18. Further, the Plaintiffs have no adequate remedy at law and the issuance of an injunction is not adverse to the public’s interest.
19. Plaintiffs re-allege and reassert each and every allegation set forth in paragraphs 1 through 18, as if fully set forth herein.
20. The City of Santa Fe by its City Council claims in its ordinance that it has the power to enact the ordinance at issue due to the powers conferred upon it by Article X, §§ 6(D) and 6(E) of the New Mexico Constitution.
21. Article X, § 6(D) of the New Mexico Constitution states:
D. A municipality which adopts a charter may exercise all legislative powers and perform all functions not expressly denied by general law or charter. This grant of powers shall not include the power to enact private or civil laws governing civil relationships except as incident to the exercise of an independent municipal power, nor shall it include the power to provide for a penalty greater than the penalty provided for a petty misdemeanor. No tax imposed by the governing body of a charter municipality, except a tax authorized by general law, shall become effective until approved by a majority vote in the charter municipality.
22. The
City of
23. Specifically, the New Mexico Constitution does not grant municipalities the power to enact legislation governing civil relationships, such as the employer-employee relationship.
24. In
fact, the New Mexico Constitution specifically prohibits municipalities, such
as the City of
25. According
to the Santa Fe City Code, a business operating in
26. Municipalities,
such as the City of
3-38-1. Licensing; business activities.
The governing body may declare, by ordinance, that the licensing or regulation of a business not otherwise exempt by law is conducive to the promotion of the health and general welfare of the municipality and may impose a license fee on and require a separate license for each place of business conducted by the same person, firm, corporation or association. The license fee shall bear a reasonable relation to the regulation of business.
27. The
Minimum Wage Ordinance is nothing more than a licensing requirement as it
mandates that any person seeking to operate a business in
28. This
requirement bears no reasonable relation to the regulation of business in the
City of
WHEREFORE, the Plaintiffs pray this Honorable Court enter a judicial declaration declaring the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the municipal powers conferred upon the City of Santa Fe by the New Mexico Constitution; issue a preliminary and permanent injunction, assess costs and attorneys’ fees and grant such other relief that this Court may deem just and proper.
29. The Plaintiffs reallege and reassert each and every allegation set forth in paragraphs 1 through 28, as if fully set forth herein.
30. Article II, Section 18 of the New Mexico Constitution provides:
Sec. 18. [Due process; equal protection; sex discrimination.]
No person shall be deprived of life, liberty or
property without due process of law; nor shall any person be denied equal
protection of the laws. Equality of
rights under law shall not be denied on account of the sex of any person. The effective date of this amendment shall be
31. The City of
32. The
Plaintiffs are citizens of the State of
33. The constitutional right to equal protection of the laws guarantees that state actors must treat similarly situated persons in a similar manner.
34. The
Minimum Wage Ordinance enacted by the City of
35. The
City of
36. First,
the Minimum Wage Ordinance applies to any business that applies for and
receives a business license from the City of
37. However,
there are other businesses that operate in the City of
38. This classification based upon the possession of a business license bears no rational relationship to the stated purpose of the Minimum Wage Ordinance. Therefore, the Minimum Wage Ordinance denies the Plaintiffs the equal protection of the laws.
39. Next, any business receiving a business license from the City of Santa Fe, and employing at least twenty-five (25) employees is subject to the mandates of the Minimum Wage Ordinance.
40. There is no rational relationship between the number of workers employed by an employer and the stated purpose of the Minimum Wage Ordinance. Consequently, the Plaintiffs’ guarantee of the equal protection of the laws has been violated by the enactment of the Minimum Wage Ordinance.
41. Any business that does not enter into a collective bargaining agreement is required to pay the wages dictated by the Minimum Wage Ordinance.
42. The
City of
43. The
City of
44. Classifying
businesses based upon whether they enter into collective bargaining agreements
with their employees bears no rational relationship to the stated purpose of
the Minimum Wage Ordinance. Accordingly,
45. The Minimum Wage Ordinance requires
employers with twenty-five or more employees to pay the minimum wage only for
hours worked within the city of
46. The requirement that the minimum wage only
applies for hours worked within the city of
47. Also, any business receiving assistance relating to economic development in the form of grants, subsidies, loan guarantees or industrial revenue bonds in excess of $25,000 is required to pay the minimum wage.
48. There is no rational relationship between the receipt of assistance relating to economic development in excess of $25,000 and the stated purpose of the Minimum Wage Ordinance. As a result, the Minimum Wage Ordinance denies the Plaintiffs the equal protection of the laws.
49. Further, businesses that contract with the
city of
50. This arbitrary classification bears no rational relationship to the stated purpose of the Minimum Wage Ordinance, and is thus violative of the Equal Protection clause.
51. The Minimum Wage Ordinance also exempts
non-profit businesses that contract with the city of
52. Employers employing interns working and receiving academic credit in connection with a course of study at specified types of educational facilities, those working for a business in connection with a court-ordered community service program, and those engaged in an apprenticeship program in a 501C(3) organization, are not counted as workers under the Minimum Wage Ordinance.
53. The arbitrary classification of such workers is not rationally related to the stated purpose of the Minimum Wage Ordinance and thus violates the Plaintiffs’ equal protection rights.
54. Finally, non-profit organizations receiving their primary source of funds from Medicaid waivers are exempt from the constraints of the Minimum Wage Ordinance.
55. This exemption is arbitrary and bears no rational relationship to the stated purpose of the Minimum Wage Ordinance. Consequently, it violates the Plaintiffs’ equal protection rights, guaranteed by the New Mexico Constitution.
WHEREFORE, the Plaintiffs pray this Honorable Court enter a judicial declaration declaring the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the municipal powers conferred upon the City of Santa Fe by the New Mexico Constitution; issue a preliminary and permanent injunction, assess costs and attorneys’ fees and grant such other relief that this Court may deem just and proper.
COUNT III
VIOLATION OF ARTICLE II, § 18
OF THE
SUBSTANTIVE DUE PROCESS
56. The Plaintiffs reallege and reassert each
and every allegation set forth in paragraphs 1 through 55, as if fully set
forth herein.
57. Article II, Section 18 of the New Mexico Constitution provides:
Sec. 18. [Due process; equal protection; sex discrimination.]
No person shall be deprived of life, liberty or
property without due process of law; nor shall any person be denied equal
protection of the laws. Equality of
rights under law shall not be denied on account of the sex of any person. The effective date of this amendment shall be
58. The City of
59. The Plaintiffs are citizens of the State of
60. The operation of a business is a property
right to which the New Mexico Constitution affords due process protection, and
substantive due process protection serves to protect individuals from arbitrary
and discriminatory laws such as the Santa Fe Minimum Wage Ordinance.
61. The
62. The Minimum Wage Ordinance also has the purpose and effect of unreasonably forcing persons who are required to have business licenses to enter into union agreements. This is an unreasonable, arbitrary and capricious violation of Plaintiffs’ rights.
WHEREFORE, the Plaintiffs pray this Honorable Court enter a judicial declaration declaring the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the municipal powers conferred upon the City of Santa Fe by the New Mexico Constitution; issue a preliminary and permanent injunction, assess costs and attorneys’ fees and grant such other relief that this Court may deem just and proper.
COUNT IV
VIOLATION OF ARTICLE II, § 18 OF THE
DUE PROCESS (VAGUENESS)
63. The Plaintiffs reallege and reassert each and every allegation set forth in paragraphs 1 through 62, as if fully set forth herein.
64. Article II, Section 18 of the New Mexico Constitution provides:
Sec. 18. [Due process; equal protection; sex discrimination.]
No person shall be deprived of life, liberty or
property without due process of law; nor shall any person be denied equal protection
of the laws. Equality of rights under
law shall not be denied on account of the sex of any person. The effective date of this amendment shall be
65. The City of
66. The Plaintiffs are citizens of the State of
67. The
68. The Minimum Wage Ordinance requires employers to pay employees a wage of $8.50 per hour beginning January 1, 2004, increases to $9.50 per hour on January 1, 2006, and then to $10.50 per hour on January 1, 2008. For purposes of computing wages, the ordinance provides:
…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…
Section 28-1.5(B) SFCC 1987 (Ord. #2003-8, § 4).
69. The Minimum Wage Ordinance requires persons of reasonable intelligence to guess at its meaning. Specifically, a business owner is left 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.
70. Furthermore, the Minimum Wage Ordinance prescribes criminal penalties for failure to comply with its mandates. As a result, business owners are further deprived of their due process rights because they are exposed to criminal sanctions without a fair warning as to the requirements of the activity prescribed by the ordinance.
71. The Minimum Wage Ordinance also addresses employees who receive tips. The ordinance specifically states:
…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…
Section 28-1.5(B) SFCC 1987 (Ord. #2003-8, § 4).
72. Again, the ordinance is unconstitutionally vague in that it fails to provide a definition, or any guidance, for the term ‘customarily.’ Thus, an employer is left to determine what frequency of receiving $100 per month in tips constitutes a custom. Because the ordinance requires an exercise in guesswork and speculation, it is unconstitutionally vague.
WHEREFORE, the Plaintiffs pray this Honorable Court enter a judicial declaration declaring the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the municipal powers conferred upon the City of Santa Fe by the New Mexico Constitution; issue a preliminary and permanent injunction, assess costs and attorneys’ fees and grant such other relief that this Court may deem just and proper.
COUNT V
VIOLATION OF ARTICLE II, § 20
OF THE
EMINENT DOMAIN
73. The Plaintiffs reallege and reassert each
and every allegation set forth in paragraphs 1 through 72, as if fully set
forth herein.
74. Article II, Section 20 of the Constitution
of the State of
Sec. 20. [Eminent domain.]
Private property shall not be taken or damaged for public
use without just compensation.
58. The
75. By forcing employers to pay the arbitrary
and exorbitant rate set forth in the Minimum Wage Ordinance, the Santa Fe City
Council has taken the private property of
76. The purpose of the Minimum Wage Ordinance
is not a valid exercise of the City of
77. Further, the Minimum Wage Ordinance
unreasonably deprives
WHEREFORE,
the Plaintiffs pray this Honorable Court enter a judicial declaration declaring
the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the
municipal powers conferred upon the City of Santa Fe by the New Mexico
Constitution; issue a preliminary and permanent injunction, assess costs and
attorneys’ fees and grant such other relief that this Court may deem just and
proper.
COUNT VI
VIOLATION OF THE
78. The Plaintiffs reallege and reassert each and every allegation set forth in paragraphs 1 through 77, as if fully set forth herein.
79. Prior
to the enactment of the City of
80. The New Mexico Minimum Wage Act is codified at §§ 50-4-19 through 50-4-30 NMSA 1978. The state public policy regarding minimum wage is found at § 50-4-19 NMSA 1978 and states as follows:
50-4-19 Declaration of state public policy.
It is declared to be the policy of this act (1) to establish minimum wage and overtime compensation standards for all workers at levels consistent with their health, efficiency and general well-being, and (2) to safeguard existing minimum wage and overtime compensation standards which are adequate to maintain the health, efficiency and general well-being of workers against the unfair competition of wage and hours standards which do not provide adequate standards of living.
81. The
stated purpose of the City of
82. The City of
83. The state legislature of
84. The
50-4-29. Relation to other laws.
Any standards relating to minimum wage, maximum hour or other working conditions in effect at the date of the passage of this act by or under any other law of this state, which are more favorable to employees than those applicable to such employees under this act, shall not be deemed to be amended, rescinded or otherwise affected by this act but shall continue in full force and effect.
85. This provision of the New Mexico Minimum Wage Act specifically precludes the enactment of the Santa Fe Minimum Wage Ordinance because it was not in effect at the time that the New Mexico Minimum Wage Act was passed. The Act specifically speaks to standards, or legislation, that were in effect prior to the passage of the Act. However, it does not permit legislation that is more favorable to employees if the legislation is enacted after the passage of the New Mexico Minimum Wage Act.
86. Because the Santa Fe Minimum Wage Ordinance was enacted after the passage of the New Mexico Minimum Wage Act, it is specifically prohibited as a matter of law and is invalid.
87. The Minimum Wage Ordinance further conflicts with the New Mexico Minimum Wage Act in that it applies to all employees regardless of their part-time, full-time, or temporary status, or the exempt classifications established by the New Mexico Minimum Wage Act.
88. The
(1) domestic service employees employed in or about a private home;
(2) those employed in a bona fide executive, administrative or professional capacity and foremen, superintendents and supervisors;
(3) individuals
employed by the
(4) certain individuals engaged in the activities of an educational, charitable, religious or nonprofit organization where the employer-employee relationship does not exist;
(5) salesmen or employees compensated upon piecework, flat rate schedules or commission basis;
(6) students enrolled in primary or secondary schools working after school hours or on vacation;
(7) registered apprentices and learners otherwise provided by law;
(8) individuals under the age of eighteen who are not students in a primary, secondary, vocational or training school;
(9) persons under the age of eighteen who are not graduates of a secondary school;
(10) ambulance service employees;
(11) G.I. bill trainees while under training;
(12) seasonal employees;
(13) agricultural employees; and
(14) employees of charitable, religious or nonprofit organizations who reside on the premises of group homes operated by those organizations for mentally retarded or emotionally or developmentally disabled persons.
89. The
90. The Minimum Wage Ordinance imposes wage requirements upon tipped employees, but only permits employers to count an employee’s tips towards the employee’s hourly wage where the employee customarily receives $100 per month in tips.
91. This requirement directly conflicts with § 50-4-22(B) NMSA 1978, which provides that:
…All employees covered by Subsection A of this section 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)…
92. Due to the conflict, the New Mexico Minimum
Wage Act preempts the Santa Fe Minimum Wage Ordinance.
WHEREFORE,
the Plaintiffs pray this Honorable Court enter a judicial declaration declaring
the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the
municipal powers conferred upon the City of Santa Fe by the New Mexico
Constitution; issue a preliminary and permanent injunction, assess costs and
attorneys’ fees and grant such other relief that this Court may deem just and
proper.
COUNT VII
VIOLATION OF THE
93. The Plaintiffs reallege and reassert each and every allegation set forth in paragraphs 1 through 92, as if fully set forth herein.
94. The State of
95. The New Mexico Human Rights Act is codified
at §§
28-1-7. Unlawful discriminatory practice.
It is an unlawful discriminatory practice for:
A. an employer, unless based on a bona fide occupational qualification, to refuse to hire, to discharge, to promote or demote or to discriminate in matters of compensation, terms, conditions or privileges of employment against any person otherwise qualified because of race, age, religion, color, national origin, ancestry, sex, physical or mental handicap or serious medical condition…
96. The language of the Minimum Wage Ordinance requires employers to use the value of health benefits and childcare as an element of wages. The Minimum Wage Ordinance requires employers to pay employees, otherwise entitled to receive the same wage, different wages based upon their medical condition in violation of the New Mexico Human Rights Act.
97. An employer must calculate the value of health benefits and incorporate that value as an element of wages. Thus, by providing more costly health benefits to an employee with a serious medical condition, versus providing less costly health benefits to a healthy employee, an employer would be required to pay an employee with a serious medical condition a lower wage than their healthy counterpart.
WHEREFORE, the Plaintiffs pray this Honorable Court enter a judicial declaration declaring the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the municipal powers conferred upon the City of Santa Fe by the New Mexico Constitution; issue a preliminary and permanent injunction, assess costs and attorneys’ fees and grant such other relief that this Court may deem just and proper.
COUNT VIII
VIOLATION OF
THE
98. The Plaintiffs reallege and reassert each and every allegation
set forth in paragraphs 1 through 97, as if fully set forth herein.
99. Any contract, agreement, combination or conspiracy in restraint
of trade or commerce, any part of which trade or commerce is within this state,
is unlawful according to the laws of New Mexico. The New Mexico Antitrust Act, codified at §§
57-1-1 through 57-1-19 NMSA 1978 specifically prohibits the restraint of trade
at § 57-1-1 NMSA 1978:
57-1-1. Contracts,
agreements, combinations or conspiracies in restraint of trade.
Every contract, agreement, combination or conspiracy in
restraint of trade or commerce, any part of which trade or commerce is within
this state, is unlawful.
100. The
101. The City of
102. The Minimum Wage Ordinance restrains the Plaintiffs’ trade and the
City of
103. Not only are the Plaintiffs entitled to injunctive relief from the
oppressive constraints of the Minimum Wage Ordinance, but they are also
entitled to recover their costs and attorneys’ fees incurred in bringing this
action according to § 57-1-17 NMSA 1978:
57-1-17. Limitation on
recovery of damages.
A. Notwithstanding the provisions of 57-1-3
NMSA 1978:
(1) no damages or
interest on damages may be recovered under the Antitrust Act from any local
government or official or employee thereof acting in an official capacity;
provided, however, that in an action for a permanent injunction brought against
a local government or official or employee thereof acting in an official
capacity, costs and reasonable attorneys’ fees may be granted to the prevailing
party…
WHEREFORE, the Plaintiffs pray this Honorable Court enter a judicial declaration declaring the Santa Fe Minimum Wage Ordinance to be an unconstitutional exercise of the municipal powers conferred upon the City of Santa Fe by the New Mexico Constitution; issue a preliminary and permanent injunction, assess costs and attorneys’ fees and grant such other relief that this Court may deem just and proper.
COUNT IX
VIOLATION OF THE
104. The Plaintiffs reallege and reassert each and
every allegation set forth in paragraphs 1 through 103, as if fully set forth
herein.
105. The
2-2.10 Fiscal Impact Reports; Ordinances and
Resolutions.
A. For the purpose of regulating immediate
and apparent long-range fiscal implications of proposed ordinances and
resolutions, the City of Santa Fe Rules and Instructions for Fiscal Impact
Reports is adopted by reference and incorporated as fully as if set out herein.
B. Fiscal impact reports shall be completed for all proposed
ordinances and resolutions to be considered for adoption by the governing body.
C. A copy of the City of
D. Completed fiscal impact reports shall be
filed in the office of the city clerk.
106. The
107. In this case, the City Council did not complete a fiscal impact
study prior to enacting the Minimum Wage Ordinance. Had the City Council completed an adequate
fiscal impact study, it would have discovered that the Minimum Wage Ordinance
will have a negative impact on the financial health of both the City of
108. An adequate financial impact study would have revealed that
unemployment in the City of
WHEREFORE, the Plaintiffs pray
this Honorable Court enter a judicial declaration declaring the Santa Fe
Minimum Wage Ordinance to be an unconstitutional exercise of the municipal
powers conferred upon the City of Santa Fe by the New Mexico Constitution;
issue a preliminary and permanent injunction, assess costs and attorneys’ fees
and grant such other relief that this Court may deem just and proper.
REQUEST FOR RELIEF
The
Plaintiffs pray this Honorable Court grant the following relief:
1. A preliminary injunction to prevent the
Minimum Wage Ordinance from becoming effective on
2. A permanent injunction to prevent the
Minimum Wage Ordinance from becoming effective;
3. A judicial declaration that the Minimum
Wage Ordinance is unconstitutional and impermissible for the reasons cited in
the Plaintiffs’ Complaint; and
4. Award costs and attorneys’ fees to the
Plaintiffs in accordance with § 57-1-17 NMSA 1978, for the City of
5. Award such further relief that this Court
deems just and proper.
Respectfully submitted,
BEALL & BIEHLER
By:
GREGORY L. BIEHLER
ZACHARY S. RIGDON
Attorneys for Plaintiffs
(505) 828-3600
(505) 828-3900 Fax