CITY OF LOS ANGELES, a municipal corporation (acting by and through its Department of Airports), Third-Party-Plaintiff-Appellant, v. AECOM SERVICES, INC.; Tutor Perini Corporation, Third-Party-Defendants-Appellees, and BCI Coca-Cola Bottling Company of Los Angeles; Jaroth, Inc., Third-Party-Defendants
No. 15-56606
United States Court of Appeals, Ninth Circuit.
April 24, 2017
854 F.3d 1149
Before: MILAN D. SMITH, JR. and N.R. SMITH, Circuit Judges, and GARY FEINERMAN, District Judge.
Argued and Submitted April 5, 2017, Pasadena, California
PETITION GRANTED IN PART; DENIED IN PART.
Robert Nida (argued), Edward Wei, and Nomi L. Castle, Castle & Associates APLC, Beverly Hills, California, for Third-Party-Defendant-Appellee Tutor Perini Corporation.
Noel Eugene Macaulay (argued) and Steven H. Schwartz, Schwartz & Janzen LLP, Los Angeles, California, for Third-Party-Defendant-Appellee AECOM Services, Inc.
Christine Van Aken, Chief of Appellate Litigation; Dennis J. Herrera, City Attorney; City Attorney‘s Office, San Francisco, California; for Amici Curiae League of California Cities and California Association of Joint Powers Authorities.
Before: MILAN D. SMITH, JR. and N.R. SMITH, Circuit Judges, and GARY FEINERMAN, District Judge.*
Illinois, sitting by designation.
M. SMITH, Circuit Judge:
This appeal presents a single legal question that has not yet been addressed by our court: Do Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 (§ 504) preempt a city‘s state-law claims for breach of contract and de facto contribution against contractors who breach their contractual duty to perform services in compliance with federal disability regulations? For the reasons set forth in this opinion, we hold that neither Title II nor § 504 preempts such claims.
FACTUAL AND PROCEDURAL BACKGROUND
Two disabled individuals filed suit against Appellant City of Los Angeles (the City), alleging that the City‘s FlyAway bus facility and service—a bus system that provides transportation between Los Angeles International Airport and various locations—failed to meet the accessibility standards set forth in Title II of the ADA,
The City subsequently filed a third-party complaint against Appellees AECOM Services, Inc. (AECOM) and Tutor Perini Corporation (Tutor).1 The City‘s third-party complaint alleged that pursuant to the contract entered into by the City and the company hired to design and construct the Van Nuys FlyAway facility (which was AECOM‘s predecessor-in-interest), AECOM was obligated “to defend, indemnify, and hold harmless the City against all suits, claims, losses, demands, and expenses to the extent that any such claim results from the negligent and/or intentional wrongful acts or omissions of [AECOM], its subcontractors, officers, agents, servants, [or] employees.” (emphasis added). The complaint also tracked the language of the contract, pursuant to which AECOM‘s predecessor-in-interest agreed
to defend, indemnify and hold City ... harmless from and against all suits and causes of action, claims, losses, demands and expenses ... to the extent that any claim for personal injury and/or for property damage results from the negligent and/or the intentional wrongful acts or omissions of Consultant, its subcontractors of any tier, and its or their officers, agents, servants, or employees, successors or assigns.
(emphasis added).
The City further alleged that Tutor, the successor-in-interest to another company retained by the City to construct the Van Nuys FlyAway facility, was contractually obligated “to defend, indemnify, and hold harmless the City against all costs, liability, damage or expense ... sustained as a proximate result of the acts or omissions of [Tutor] or relating to acts or events pertaining to, or arising out of, the contract.” The contract between the City and Tutor‘s predecessor-in-interest also required that the contractor, in performing its contractual obligations, “comply with all applicable present and/or future local, State and Federal Laws, statutes, ordinances, rules,
[e]xcept for the City‘s sole negligence or willful misconduct, Contractor expressly agrees to ... defend, indemnify, keep and hold City ... harmless from any and all costs, liability, damage or expense ... sustained as a proximate result of the acts or omissions of Contractor, its agents, servants, subcontractors, employees or invitees; or [] relating to acts or events pertaining to, or arising from or out of, this Contract.
Based on the foregoing contractual provisions between the City and Appellees’ respective predecessors-in-interest, the City‘s third-party complaint against Appellees sought damages for breach of contract, express contractual indemnity, and declaratory relief establishing Appellees’ obligations to defend and indemnify the City.
Tutor moved to dismiss the City‘s claims pursuant to
JURISDICTION AND STANDARD OF REVIEW
The district court entered a final judgment as to all parties in this appeal on October 8, 2015. We have jurisdiction over final judgments of the district court pursuant to
ANALYSIS
I. The Americans with Disabilities Act and the Rehabilitation Act of 1973
Title II of the ADA states that “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.”
II. Federal Preemption of State Law
The Supremacy Clause of the United States Constitution provides that the “Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
We have recognized three ways in which a federal law may preempt state legislation:
First, Congress may preempt state law by so stating in express terms. Second, preemption may be inferred when federal regulation in a particular field is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it. In such cases of field preemption, the mere volume and complexity of federal regulations demonstrate an implicit congressional intent to displace all state law. Third, preemption may be implied when state law actually conflicts with federal law. Such a conflict arises when compliance with both federal and state regulations is a physical impossibility, or when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. Bank of Am. v. City & Cty. of S.F., 309 F.3d 551, 558 (9th Cir. 2002), as amended on denial of reh‘g and reh‘g en banc (Dec. 20, 2002) (internal quotation marks and citations omitted).
The Supreme Court has stated, in the context of banking regulations, that the general presumption against preemption “is not triggered when the State regulates in an area where there has been a history of significant federal presence.” United States v. Locke, 529 U.S. 89, 108 (2000). Taken in isolation, this language might suggest that any time the federal government has historically regulated in a given area, the typical presumption against preemption does not apply. However, the Court, in Wyeth v. Levine, 555 U.S. 555 (2009), somewhat cabined its language from Locke by further explaining the role of historic federal regulation in conducting a preemption analysis:
III. Neither Title II nor Section 504 Preempts State-Law Claims for Contribution
Neither Title II nor § 504 contains a statement of express preemption, and no party in this appeal contends otherwise. The district court‘s opinion suggests, however, that field preemption applies to preclude Appellant‘s claims. We disagree. Field preemption occurs “where the scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress left no room for supplementary state regulation,” or “where the field is one in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.” Hillsborough Cty. v. Automated Med. Labs., Inc., 471 U.S. 707, 713 (1985) (internal quotation marks omitted). Title II specifically states that “[n]othing in this chapter shall be construed to invalidate or limit the remedies, rights, and procedures of ... any State or political subdivision of any State or jurisdiction that provides greater or equal protection for the rights of individuals with disabilities than are afforded by this chapter.”
Nevertheless, we may affirm on any basis finding support in the record, and Appellees contend—as they did before the district court—that conflict preemption precludes the City‘s claims. Appellees’ argument rests largely upon the Fourth Circuit Court of Appeals’ decision in Equal Rights Center v. Niles Bolton Associates, 602 F.3d 597 (4th Cir. 2010). That case concerned a housing developer that filed crossclaims for implied and express contractual indemnification against the architect of its properties, seeking damages stemming from those properties’ failure to comply with, inter alia, the ADA‘s disability accessibility requirements. See id. at 599. The Fourth Circuit held that the ADA preempted the developer‘s claim for indemnification, and further concluded that granting the developer leave to amend to include a claim for contribution would be futile, because any contribution claim would be a de facto indemnification claim, and thus similarly preempted. Id. at 602.
As an initial matter, the factual circumstances of Equal Rights Center materially differ from those in this appeal. Most importantly, the Equal Rights Center court emphasized that the developer “sought to allocate the full risk of loss to [the architect] for the apartment buildings at issue,” and determined that “[a]llowing an owner to completely insulate itself [in that manner] from liability for an ADA or FHA violation through contract [would] diminish[] its incentive to ensure compliance with discrimination laws.” Id. (emphases added). Here, by contrast, the relevant contractual provisions assign liability to Appellees only to the extent that their own actions give rise to liability. Thus, the Equal Rights Center court‘s concern with permitting a responsible party to completely insulate itself from Title II liability is not in play here. On the contrary, under the present circumstances, the greater concern is the potential for contractors to shield themselves from any liability they caused under both state contract law and federal disability regulations if Title II and § 504 are found to preempt Appellant‘s claims.2
Furthermore, while the developer in Equal Rights Center sought leave to amend to add a claim for contribution, the Fourth Circuit affirmed the district court‘s denial on the ground that the developer “really [sought] to have [the architect] pay all damages,” and that any such claim would therefore be a “de facto claim for indemnification.” 602 F.3d at 602, 604. Because the so-called contribution claim really constituted a claim for indemnification, the court declined to reach the question of whether a genuine state-law claim for contribution would be preempted. See id. at 604 n.2.3
Appellees also cite Independent Living Center v. City of Los Angeles, 973 F.Supp.2d 1139 (C.D. Cal. 2013) in support of their preemption argument. That district court case concerned a suit for Title
The district court in this case declined to address two aspects of Independent Living Center that cabin its persuasive effect on the present appeal. First, as the Independent Living Center court emphasized, the first-party plaintiffs in that matter alleged that the City had “failed ... to maintain policies, practices, or procedures to ensure that accessible housing units [were] made available and [were] meaningfully accessible to people with disabilities,” and that they additionally “failed to monitor compliance with the Rehabilitation Act accessibility requirements.” Id. at 1144-45 (internal quotation marks omitted, emphases added). The court expressly found that “the main focus of [the] lawsuit [was] the legality of the overall housing program,” and that “Plaintiffs did not file this case because a particular building violated provisions under the various statutes.” Id. at 1148 (internal alterations omitted). Rather, the plaintiffs sought redress for a programmatic failure on the part of the City to maintain adequate policies and oversight under the relevant federal statutes. See id. at 1148-49.
That factual circumstance stands in stark contrast to the situation presented by this appeal. Cities implement policies and procedures as part of their standard operation. Were courts to permit a city to contract away its liability to implement policies and procedures that comply with federal disability regulations, they would indeed be permitting delegation of an entity‘s duties under the ADA. Here, however, the City does not seek indemnification or contribution for damages arising out of its own failure to implement policies or exercise oversight. Rather, it seeks redress for
Second, although it found that conflict preemption precluded the City‘s claims for both contribution and indemnification, the Independent Living Center court relies almost entirely on Equal Rights Center—a case that expressly declined to address whether conflict preemption would apply to claims for contribution, as opposed to those for indemnification. See Indep. Living Ctr., 973 F.Supp.2d at 1160-61. Independent Living Center expresses a clear concern regarding attempts to shift a responsible party‘s liability under federal disability statutes to another party, and accordingly explains how permitting express contractual indemnification claims poses an obstacle to the regulatory purpose of the ADA. It does not, however, explain how permitting claims for contribution commensurate with a third-party‘s own wrongdoing would pose a similar obstacle.
As discussed supra, analysis under the Supremacy Clause begins with a presumption against preemption, “unless [pre-emption] was the clear and manifest purpose of Congress.” Medtronic, 518 U.S. at 485. The Independent Living Center court held that “the presumption against preemption is inapplicable [to the ADA], because the states have not traditionally occupied the field of antidiscrimination law.” 973 F.Supp.2d at 1157. We disagree with this characterization of
In Federation of African American Contractors v. City of Oakland, 96 F.3d 1204, 1214 (9th Cir. 1996), we observed that “[p]rivate causes of action against state actors who impair federal civil rights have not been traditionally relegated to state law.” However, the mere co-existence of state and federal causes of action does not support a rejection of the presumption. See Wyeth, 555 U.S. at 565 n.3. Similarly, the fact that “Congress enacted Title II against a backdrop of pervasive unequal treatment in the administration of state services and programs,” and that its “enactment of the ADA represents its judgment that there should be a comprehensive national mandate for the elimination of discrimination against individuals with disabilities,” 973 F.Supp.2d at 1158, does not render the presumption against preemption inapplicable. As the Supreme Court has explained, the presumption is rooted in federalism concerns. See, e.g., Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977); see also Wyeth, 555 U.S. at 565 n.3; id. at 583-87 (Thomas, J., concurring in the judgment). The relevant question is whether a given area is one in which states have historically had the power to regulate, not whether states have previously regulated in the precise manner or to the degree that the federal government has itself chosen to regulate. See Wyeth, 555 U.S. at 565, 565 n.3. Indeed, if state and federal regulatory choices perfectly aligned, there would be no cause for federal legislation at all. Conversely, if the presumption against preemption failed to apply anytime federal regulations add something to state legislation, the presumption would be a nullity.
States have historically regulated in the area of civil rights generally, and in the field of discrimination against disabled individuals specifically. See, e.g., Bd. of Trustees of Univ. of Ala. v. Garrett, 531 U.S. 356, 368 n.5 (2001) (“It is worth noting that by the time that Congress enacted the ADA in 1990, every State in the Union had enacted such measures [against disability discrimination].“); see also Bob-Lo Excursion Co. v. Michigan, 333 U.S. 28, 33 (1948) (noting that “many states” had at that time enacted civil rights statutes); Rodriguez v. Barrita, Inc., 10 F.Supp.3d 1062, 1073 (N.D. Cal. 2014) (“Long before Congress passed the ADA, California enacted several statutes to prohibit disability discrimination at the state level.“). We therefore apply the presumption against preemption, and, accordingly, will find preemption only if Congress indicated a “clear and manifest purpose” to that effect. Nation v. City of Glendale, 804 F.3d 1292, 1298 (9th Cir. 2015).
Obstacle preemption applies when a given “state law[] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Crosby v. Nat‘l Foreign Trade Council, 530 U.S. 363, 373 (2000) (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). “What is a sufficient obstacle is a matter of judgment, to be informed by examining the federal statute as a whole and identifying its purpose and intended effects.” Id. Accordingly, whether claims for express contractual indemnification or contribution conflict with Title II and § 504 requires consideration of those statutes’ animating purposes and intended consequences.
Congress expressly set forth the purpose of Title II as “to provide a clear and comprehensive national mandate for the elimination of discrimination against indi-
Nothing in Title II or § 504 addresses claims for state-law indemnification or contribution filed by a public entity against a contractor. In Equal Rights Center, the Fourth Circuit drew on its reasoning in Baker, Watts & Co. v. Miles & Stockbridge, 876 F.2d 1101 (4th Cir. 1989), to nevertheless find contractual indemnification precluded. It explained that
In holding the indemnification claim [in Baker, Watts & Co.] preempted, we analyzed whether the claim represented an obstacle to the regulatory goals of the federal law. We explained that “Congress ha[d] not provided a right to indemnification in the federal securities laws under any circumstances.” Furthermore, we emphasized the total nature of a claim for indemnity, concluding that “it would run counter to the basic policy of the federal securities laws to allow a securities wrongdoer ... to shift its entire responsibility for federal violations on the basis of a collateral state action for indemnification.” As we explained, “[t]he goal of the 1933 and 1934 Acts is preventive as well as remedial, and ‘denying indemnification encourages the reasonable care required by the federal securities provisions.‘”
Equal Rights Ctr., 602 F.3d at 601 (internal citations omitted). To the extent that this analysis relies on congressional omission of a federal cause of action for indemnification, it turns the presumption against preemption on its head. The basic premise of the presumption is that absent an affirmative indication to the contrary, a federal regulation will not preempt state law. The failure to provide a federal analogue to a state-law cause of action does not meet this standard.
Any concern that a public entity will be able to contract out of Title II or § 504 compliance makes sense in the context of indemnification for an entity‘s failure to maintain appropriate policies and practices—in other words, for its failure to take action solely within its control, as was arguably the case in Equal Rights Center. Permitting a shift of liability to a party lacking the power to remedy the violation would frustrate the federal statutes’ regulatory purpose. As we have stated in the Title III context of landlords and lessees,
a covered entity may not use a contractual provision to reduce any of its obligations under [the ADA].... [A] public accommodation‘s obligations are not extended or changed in any manner by virtue of its lease with the other entity. H.R. Rep. No. 101-485(II), at 104, reprinted in 1990 U.S.C.C.A.N. 303, 387. The legislative history [of the ADA] confirms that a landlord has an independent obligation to comply with the ADA that may not be eliminated by contract.
Botosan v. Paul McNally Realty, 216 F.3d 827, 833 (9th Cir. 2000). This principle applies equally to Title II‘s requirements for public services. Crucially, however, the third-party claims asserted by the City against Appellees do not seek to shift liability in such a manner.
Unlike the crossclaims at issue in Equal Rights Center, the City‘s third-party claim seeks only to collect for violations arising out of Appellees’ own negligence or wrong-
In sum, neither Title II of the ADA nor § 504 of the Rehabilitation Act preempt the City‘s state-law claims for de facto contribution, however styled, against Appellees.
CONCLUSION
For the reasons set forth in this opinion, we REVERSE the district court‘s order dismissing the City‘s third-party claims, and REMAND for further proceedings consistent with this opinion.
Notes
Zimmerman v. Or. Dep‘t of Justice, 170 F.3d 1169, 1174 (9th Cir. 1999) (emphases added). In line with this analysis, the Zimmerman court found that the defendant Parks Department was not liable under Title II for employment discrimination, because employment is not a “service, program, or activity” of a public entity within the meaning of Title II, which relates to public services. Id.; see also Barden v. City of Sacramento, 292 F.3d 1073, 1076 (9th Cir. 2002) (framing analysis of the scope of Title II as asking whether a given activity constitutes “a normal function of a governmental entity“).Consider, for example, how a Parks Department would answer the question, “What are the services, programs, and activities of the Parks Department?” It might answer, “We operate a swimming pool; we lead nature walks; we maintain playgrounds.” It would not answer, “We buy lawnmowers and hire people to operate them.” The latter is a means to deliver the services, programs, and activities of the hypothetical Parks Department, but it is not itself a service, program, or activity of the Parks Department.
Though Zimmerman was not a preemption case, its analysis is instructive insofar as it considered Congress’ intention for the scope of actions falling under Title II. Preemption analysis focuses, first and foremost, on congressional intent. See Hughes v. Talen Energy Mktg., LLC, 136 S.Ct. 1288, 1297 (2016). If one frames the scope of Title II as encompassing a public entity‘s outputs, this supports the notion that Congress did not intend to preempt claims for liability arising from tasks that a City does not—and in many cases simply cannot—do itself, but must instead contract with others to provide the service.