729 F.3d 572
6th Cir.2013Background
- PLA in construction sets terms of employment on public projects; Michigan enacted 2011 Act and 2012 amendatory Act restricting government use of PLAs; district court enjoined both versions as NLRA-preempted; amended Act narrowed scope to government units not private parties and allowed PLA participation by private bidders; court held Act proprietary, not regulatory, and not preempted; Supreme Court precedents (Boston Harbor, Gould) used to distinguish market-participant vs regulator; majority concluded proprietary to promote efficient procurement; dissent argues Act is regulatory, broad across all governmental units and projects, and preempted; mootness of earlier injunctions affects appellate posture; case law across circuits supports proprietary vs regulatory distinction).
- Procedural posture includes two injunctions: initial injunction on 2011 Act (mooted by 2012 amendments) and injunction on 2012 amended Act; district court enjoined both versions; Governor appealed; appeals consolidated; ultimately court held amended Act is proprietary and not preempted; mootness of first appeal while upholding reversal of injunction on second case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether amended Act is regulatory or proprietary | Trades councils: Act regulatory; broad, cross-cutting | Michigan: Act proprietary; focused on efficient procurement | Proprietary; not preempted |
| NLRA preemption framework applicable | NLRA protects union activity incl. persuading govt to use PLAs | State acts as market participant, not regulator | NLRA preemption not applying to proprietary Act; but court analyzes under Boston Harbor framework for proprietary actions |
| Scope breadth of Act (across all gov units/projects) | Breadth shows regulatory intent | Breadth reflects proprietary interest in efficiency | Breadth supports proprietary characterization; not regulatory |
| Impact of prior injunctions and mootness | First injunction could affect ongoing PLA contracts | Amended Act superseded and moot; appeal limited to current act | First injunction moot; current injunction reversed/ vacated in part |
| Effect of NLRA Section 7 rights on right to persuade gov't | Right protected under NLRA to persuade government to enter PLA | Amended Act restricts such persuasion by gov't entities | Court treats right as NLRA-protected; preemption analysis follows |
Key Cases Cited
- Boston Harbor v. building & construction trades council of mass./r.i., 507 U.S. 218 (1993) (proprietary vs regulatory distinction; market-participant approach for tailored actions)
- Gould, Wis. Dept. of Indus., Labor, & Human Relations v. Gould, 475 U.S. 282 (1986) (state action’s regulatory vs proprietary nature; breadth and efficient procurement focus)
- Brown v. Chamber of Commerce, 554 U.S. 60 (2008) (NLRA preemption; regulatory vs market-participant analysis clarified)
- Chamber of Commerce v. Reich, 74 F.3d 1322 (D.C. Cir. 1996) (early precedent on broad policy vs ad hoc procurement decisions)
- Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686 (5th Cir. 1999) (articulates proprietary vs regulatory framework for state actions)
- Allbaugh, Building & Construction Trades Dept. v. Allbaugh, 295 F.3d 28 (D.C. Cir. 2002) (district court’s proprietary interpretation criticized; breadth matters)
- Lavin, North Ill. Chapter of Associated Builders & Contractors v. Lavin, 431 F.3d 1004 (7th Cir. 2005) (scope-based proprietary analysis; project-focused)
- Rancho Santiago Cmty. Coll. Dist. v. United States 623 F.3d 1011, 623 F.3d 1011 (9th Cir. 2010) (case-specific PLA treated as proprietary in scope)