ASSOCIATION OF CAR WASH OWNERS INC., ZOOM CAR SPA, LLC, and FIVE STAR HAND WASH LLC v. CITY OF NEW YORK and LORELEI SALAS, in her official capacity as Commissioner of the New York City Department of Consumer Affairs
Docket No. 17-1849-cv (L)
Docket No. 17-3476-cv (XAP)
United States Court of Appeals For the Second Circuit
December 12, 2018
August Term, 2017
Argued: September 26, 2018
Plaintiffs-Appellees-Cross-Appellants.
v.
Defendants-Appellants-Cross-Appellees.
Appeal from the United States District Court for the Southern District of New York No. 15-cv-8157, Hellerstein, Judge.
Before: HALL and LYNCH, Circuit Judges, and KUNTZ, District Judge.*
On appeal from a judgment of the United States District Court for the Southern District of New York (Alvin K. Hellerstein, J.) holding the National Labor Relations Act,
VACATED AND REMANDED.
JOHN S. SUMMERS (Rebecca S. Melley, Andrew M. Erdlen, on the brief), Hangley Aronchick Segal Pudlin & Schiller, Philadelphia, PA, and
INGRID R. GUSTAFSON (Richard Dearing, on the brief), on behalf of Zachary W. Carter, Corporation Counsel of the City of New York, New York, NY, for Defendants-Appellants-Cross-Appellees City of New York and Lorelei Salas, in her official capacity as Commissioner of the New York City Department of Consumer Affairs.
William F. Kuntz, II, District Judge:
This appeal calls on us to consider whether the National Labor Relations Act (“NLRA“),
The district court (Alvin K. Hellerstein, J.) agreed with the Plaintiffs and granted their motion for summary judgment regarding federal preemption, holding the NLRA preempts section 20-542(b)(1) of the law. Although the district court initially struck down the entire law, following motions for reconsideration, the district court severed only the subdivision at issue—section 20-542(b)(1)—from the remainder of the law. Because we find the district court erred in granting summary judgment for the Plaintiffs on their federal preemption claim before discovery, we vacate the district court‘s order and remand for further proceedings.
BACKGROUND
In light of concerns regarding the lack of regulatory oversight of the car wash industry and its history of underpayment of wages, unsafe practices, and environmental issues, among other problems, the New York City Council voted to adopt the Car Wash Law on June 10, 2015. A1024. On June 29, 2015, Mayor Bill de Blasio signed it into law. A1121-22. The law makes it unlawful for a car wash to operate in New York City without a license.
The surety bond provision, in turn, requires that applicants for a license “furnish to the commissioner [of Consumer Affairs] a surety bond in the sum of one hundred fifty thousand dollars, payable to the city of New York and approved as to form by the commissioner.”
On October 16, 2015, the Plaintiffs filed their initial complaint. A6. On October 19, 2015, the Plaintiffs filed their first motion for partial summary judgment arguing that the Car Wash Law is preempted and invalid. A6, A24-25. In a stipulation so-ordered by the district court on November 3, 2015, the parties agreed that the time for the Plaintiffs to file an amended complaint and/or an amended/superseding motion be extended until four weeks after the Department of Consumer Affairs (“DCA“) published final rules implementing the Car Wash Law. A27-28. The parties also agreed the Defendants would not implement the law and associated rules until resolution of the Plaintiffs’ motion. A28. After the DCA published the contemplated final rules, the district court so-ordered a stipulation on October 23, 2016 setting a schedule for the filing of an amended complaint and/or amended/superseding motion and opposition thereto, A31-32, which was subsequently revised several times.
On October 26, 2016, the Plaintiffs filed an amended complaint alleging federal and state law preemption, denial of equal protection, violation of due process, a claim pursuant to
Both sides appeal. A1828-29, A1831-32. The Defendants appeal the district court‘s order granting the Plaintiffs’ motion for partial summary judgment on federal preemption and denying the Defendants’ corresponding motion for judgment on the pleadings. The Plaintiffs argue the district court correctly decided the federal preemption question but appeal the district court‘s judgment severing only section 20-542(b)(1) from the remainder of the law. In response, the Defendants argue that to the extent this Court agrees with the district court‘s federal preemption holding, the district court properly severed only section 20-542(b)(1).
DISCUSSION
“We review de novo the award of summary judgment, ‘constru[ing] the evidence in the light most favorable to the [nonmoving party]’ and ‘drawing all reasonable inferences and resolving all ambiguities in [its] favor.‘” Jaffer v. Hirji, 887 F.3d 111, 114 (2d Cir. 2018) (quoting Darnell v. Pineiro, 849 F.3d 17, 22 (2d Cir. 2017)). “Summary judgment is appropriate only where ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.‘” Id. (quoting
I. NLRA Preemption
“The NLRA does not contain an express preemption provision. Instead, ‘[t]he doctrine of labor law pre-emption concerns the extent to which Congress has placed implicit limits on the permissible scope of state regulation of activity touching upon labor-management relations.‘” Concerned Home Care Providers, Inc. v. Cuomo, 783 F.3d 77, 84 (2d Cir. 2015) (quoting N.Y. Tel. Co. v. N.Y. State Dep‘t of Labor, 440 U.S. 519, 527 (1979)). Two different doctrines of NLRA preemption have emerged. The first category—known as Garmon preemption after the Supreme Court‘s decision in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959)—“hold[s] that the NLRA preempts state regulation that either prohibits conduct subject to the regulatory jurisdiction of the [National Labor Relations Board] under section 8 of the NLRA or facilitates conduct prohibited by section 7 of the NLRA.” Rondout Elec., Inc. v. N.Y. State Dep‘t of Labor, 335 F.3d 162, 167 n.1 (2d Cir. 2003) (citing Garmon, 359 U.S. at 244-47); see Healthcare Ass‘n of N.Y. State, Inc. v. Pataki, 471 F.3d 87, 95 (2d Cir. 2006) (“[T]he Garmon rule can be stated quite elegantly: ‘States may not regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits.‘” (quoting Wis. Dep‘t of Indus., Labor & Human Relations v. Gould Inc., 475 U.S. 282, 286 (1986))).
It is the second category of NLRA preemption, known as Machinists preemption, with which we are concerned in this appeal. Stated broadly, Machinists preemption “forbids states and localities from intruding upon ‘the [labor-management] bargaining process.‘” Concerned Home Care Providers, 783 F.3d at 84 (quoting Lodge 76 Int‘l Ass‘n of Machinists & Aerospace Workers, AFL-CIO v. Wis. Emp‘t Relations Comm‘n, 427 U.S. 132, 149 (1976)). Machinists preemption “rel[ies] on the understanding that in providing in the NLRA a framework for self-organization and collective bargaining, Congress determined both how much the conduct of unions and employers should be regulated, and how much it should be left unregulated.” Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 751 (1985). Under this theory of NLRA preemption, the crucial inquiry is “whether Congress intended that the conduct involved be unregulated because [such conduct was] left to be controlled by the free play of economic forces.” Machinists, 427 U.S. at 140 (quotation marks, citation, and footnote omitted); Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 614 (1986) (“[Machinists preemption] precludes state and municipal regulation concerning conduct that Congress intended to be unregulated.” (quotation marks, citation, and footnote omitted)).
As this Court has explained, “[s]ections 7 and 8 of the NLRA guarantee employees the right to organize and engage in other forms of protected concerted action, and identify forms of unfair labor practices. The remaining aspects of the bargaining process are left ‘to be controlled by the free play of economic forces.‘” Concerned Home Care Providers, 783 F.3d at 84 (citing
In Metropolitan Life, the Supreme Court held “[m]inimum state labor standards affect union and nonunion employees equally, and neither encourage nor discourage the collective-bargaining processes that are the subject of the NLRA. Nor do they have any but the most indirect effect on the right of self-organization established in the Act.” Id. at 755. In this respect, the Court explained “we believe that Congress developed the framework for self-organization
The Plaintiffs contend that the law does not qualify as a minimum labor standard. First, they argue the law is not a labor standard because it addresses other topics, such as environmental regulations, outside the scope of labor. Second, they argue that the law‘s surety provision inherently favors unionization. Neither argument justifies summary judgment for the Plaintiffs.
First, insofar as the licensing scheme established by the ordinance and enforced by the bond requirement is expressly intended to improve compliance with state and federal minimum wage laws, it is most emphatically a law concerned with implementing minimum wage and hour regulations of the sort approved by the Supreme Court in Metropolitan Life. The law‘s concern with minimum labor conditions is not vitiated by the fact that the licensing scheme also addresses other industry problems; a concern for the environment as well as for minimum wage laws does not invalidate the law‘s relationship to minimum labor conditions.
Second, the Plaintiffs are correct that even a law that addresses such legitimate, non-preempted local concerns may not do so by creating significant pressure on employers to encourage unionization of their employees. At this stage of the proceedings, however, for reasons explained below, we cannot conclude as a matter of law that the ordinance has such an effect.
In its amended order granting the Plaintiffs’ motion for partial summary judgment regarding federal preemption and denying the Defendants’ corresponding motion for judgment on the pleadings, the district court concluded that “[s]ection 20-542(b)(1) explicitly encourages unionization . . . by imposing a penalty that requires a fivefold increase in the amount of a surety bond required for car washing companies that are not parties to a collective bargaining agreement or, alternatively, an independent monitoring scheme and large security deposits.” SPA7 (citations omitted). The district court stated that “[p]ressuring businesses to unionize is impermissible under the NLRA, as it inserts the City directly into labor-management bargaining.” Id. (citation omitted). We agree with the Defendants that the district court‘s conclusion regarding purported financial pressure, reached before the completion of discovery, is premature.
“Since summary judgment is a ‘drastic device,’ it should not be granted when there are major factual contentions in dispute. This is particularly so when, as here, one party has yet to exercise its opportunities for pretrial discovery.” Nat‘l Life Ins. Co. v. Solomon, 529 F.2d 59, 61 (2d Cir. 1975) (citations omitted). “[S]ummary judgment should only be granted if after discovery, the nonmoving party has failed to make a sufficient showing on an essential element of [its] case with respect to which [it] has the burden of proof.” Hellstrom v. U.S. Dep‘t of Veterans Affairs, 201 F.3d 94, 97 (2d Cir. 2000) (quotation marks, citation, and internal editing omitted). “Only in the rarest of cases may summary judgment be granted against a [party] who has not been afforded the opportunity to conduct discovery.” Id. (citations omitted). This is because “[t]he nonmoving party must have ‘had the opportunity to discover information that is essential to his opposition’ to the motion for summary judgment.” Trebor Sportswear Co. v. The Ltd. Stores, Inc., 865 F.2d 506, 511 (2d Cir. 1989) (quoting Anderson, 477 U.S. at 250 n.5); see, e.g., Sutera v. Schering Corp., 73 F.3d 13, 18 (2d Cir. 1995) (vacating district court‘s order granting summary judgment where “[s]ummary judgment was entered before any discovery had taken place” which precluded the plaintiff, the nonmoving party, from having “a full and fair opportunity” to respond to the defendant‘s claims).
Indeed,
Here, the Defendants filed a
Whether the Car Wash Law‘s surety bond provision has the effect of imposing financial pressure on car wash owners to support unionization is relevant in determining whether the law impermissibly interferes with the collective bargaining process to the extent of being preempted by the NLRA. Because there are genuine disputes of material fact with respect to the Plaintiffs’ claims of financial pressure—disputes which discovery could reasonably be expected to address—we conclude the district court erred in granting the Plaintiffs’ pre-discovery motion for partial summary judgment on federal preemption.
II. Severability
In its June 20, 2017 order addressing the parties’ motions as to NLRA preemption, the district court declared the Car Wash Law invalid, striking down the entire law. SPA12. The Defendants then filed a motion for reconsideration seeking to sever section 20-542(b)(1)—the subdivision reducing the surety bond requirement for car washes that are party to a collective bargaining agreement with certain protections—from the remainder of the Car Wash Law. A1779-80. In an order dated August 31, 2017, the district court granted the Defendants’ request and severed section 20-542(b)(1), allowing the remainder of the Car Wash Law to be enforced. SPA32-34,
“[T]he oldest and most consistent thread in the federal law of justiciability is that the federal courts will not give advisory opinions.” Flast v. Cohen, 392 U.S. 83, 96 (1968) (quotation marks and citation omitted). This means that federal courts “may not give ‘an opinion advising what the law would be upon a hypothetical state of facts.‘” In Matter of Motors Liquidation Co., 829 F.3d 135, 168 (2d Cir. 2016) (quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937)); United States v. Yalincak, 853 F.3d 629, 639 n.11 (2d Cir. 2017) (citing Abele v. Markle, 452 F.2d 1121, 1124 (2d Cir. 1971)). Here, severability arises only if any portion of the Car Wash Law is deemed invalid—if no part of the Car Wash Law is preempted, then severability need not be considered. Because we vacate the district court‘s order with respect to NLRA preemption and remand the case for further proceedings, we decline to express any opinion as to the merits of the district court‘s severability holding at this point in the litigation.
CONCLUSION
For the foregoing reasons, the portion of the district court‘s order appealed from granting the Plaintiffs’ motion for summary judgment with respect to NLRA preemption and denying the Defendants’ corresponding motion for judgment on the pleadings is VACATED. We also VACATE the district court‘s order severing section 20-542(b)(1). We REMAND the case to the district court for further proceedings not inconsistent with this opinion.
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