CSX TRANSPORTATION, INC.; CSX Intеrmodal Terminals, Inc.; National Railroad Passenger Corporation, d/b/a Amtrak; Springfield Terminal Railway Company v. Maura HEALEY, in her official capacity as Attorney General of the Commonwealth of Massachusetts
No. 16-2171, No. 16-2172
United States Court of Appeals, First Circuit.
June 23, 2017
859 F.3d 276
CSX Transportation, Inc.; CSX Intermodal Terminals, Inc.; National Railroad Passenger Corporation, d/b/a Amtrak; Springfield Terminal Railway Company, Plaintiffs, Appellees,
v.
Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers; Mechanical Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers; Brotherhood of Locomotive Engineers and Trainmen; Brotherhood of Maintenance of Way Employes Division/IBT; Brotherhood of Railroad Signalmen; International Brotherhood of Electrical Workers; National Conference of Firemen & Oilers District of Local 32BJ, SEIU, Defendants, Appellants,
Maura Healey, in her official capacity as Attorney General of the Commonweаlth of Massachusetts, Defendant.
Douglas S. Martland, Assistant Attorney General, with whom Maura Healey, Attorney General of Massachusetts, and Pierce O. Cray, Assistant Attorney General, were on brief, for the Commonwealth appellant.
Michael S. Wolly, with whom Zwerdling, Paul, Kahn & Wolly, P.C., Richard S. Edelman, Mooney, Green, Saindon, Murphy and Welch PC, Washington, DC, Erika A. Diehl-Gibbons, Kevin C. Brodar, Cleveland, OH, and SMART-TD were on brief, for the union appellants.
Donald J. Munro, with whom Anthony J. Dick and Jones Day, Washington, DC, were on brief, for the appellees.
M. Patricia Smith, Solicitor of Labor, United States Department of Labor, G. William Scott, Associate Solicitor, Eliza-
Before LYNCH, LIPEZ, and KAYATTA, Circuit Judges.
KAYATTA, Circuit Judge.
In 2014, Massachusetts voters enacted by plebiscite the Massachusetts Earned Sick Time Law (“MESTL“). 2014 Mass. Legis. Serv. ch. 505 (West). The law requires most employers with eleven or more employees to provide “[e]arned paid sick time” for a variety of reasons, including absence from work due to illness.
For the following reasons, we agree with the district court that the RUIA certainly
I.
A.
As originally enacted in 1938, the RUIA mandated that interstate rail carriers fund an insurance system that provides partial wage replacement, known as “unemployment benefits,” to covered employees who are not working but who are able and available to work. See Act of June 25, 1938, ch. 680, §§ 1(k), 2(a), 52 Stat. 1094, 1096 (codified as amended at
Adding sickness benefits to the statute required Congress to address a series of questions. Who was covered? Which conditions qualified as a sickness? When did the employee become eligible for sickness benefits? What was the amount and duration of the benefits? How and to what extent must the employer fund the benefits? The text of the RUIA answers each of these questions. As generally applicable to most employees, it requires the payment of “sickness benefits” for “each day of sick-
These decisions by Congress established only the minimum level of benefits that must be paid. Employers remained free to provide benefits to sick workers sooner, to continue benefits longer, or to pay benefits at higher rates. The employees, in turn, remained free to bargain for better benefits.
B.
Having mandated a nationwide, minimum level of sickness benefits for this quintessentially interstate business, Congress also exercised its power under the Supremacy Clause to preempt certain
By enactment of this chapter the Congress makes exclusive provision for the payment of unemployment benefits for unemployment occurring after June 30, 1939 and for the payment of sickness benefits for sickness periods after June 30, 1947, based upon employment (as defined in this chapter). No employee shall have or assert any right to unemployment benefits under an unemployment compensation law of any State with respect to unemployment occurring after June 30, 1939, or to sickness benefits under a sickness law of any State with respect to sickness periods occurring after June 30, 1947, based upon employment (as defined in this chapter). The Congress finds and declares that by virtue of the enactment of this chapter, the application of State unemployment compensation laws after June 30, 1939, or of State sickness laws after June 30, 1947, to such employment, except pursuant to section 362(g) of this title, would constitute an undue burden upon, and an undue interference with the effective regulation of, interstate commerce.
The parties agree that the foregoing language, as applied today to interstate rail carriers, plainly preempts any mandate to provide “sickness benefits under a sickness law of any State based upon employment.”
Facing “a substantial threat of imminent prosecution,” the carriers filed the present action against the Attorney General seeking a declaratory judgment that the MESTL is preempted by the RUIA as well as by the Railway Labor Act (“RLA“),
II.
We start with the text of the MESTL and ask whether it provides “sickness benefits under a sickness law of any State” as that phrase is used in
(c) Earned sick time shall be provided by an employer for an employee to:
(1) care for the employee‘s child, spouse, parent, or parent of a spouse, who is suffering from a physical or mental illness, injury, or medical condition that requires home care, profes-
sional medical diagnosis or care, or preventative medical care; or (2) care for the employee‘s own physical or mental illness, injury, or medical condition that requires home care, professional medical diagnosis or care, or preventative medical care; or
(3) attend the employеe‘s routine medical appointment or a routine medical appointment for the employee‘s child, spouse, parent, or parent of spouse; or
(4) address the psychological, physical or legal effects of domestic violence....
We observe at the outset that the four quoted subsections of
A.
Crafting subsection (c)(2) of the MESTL required answering the questions addressed by Congress in creating the RUIA‘s sickness benefits. Who was covered? Which conditions qualified as a sickness? When did the employee become eligible for sickness benefits? What was the amount and durаtion of the benefits? And so on. On many such questions, the MESTL reflects different answers than does the RUIA. Rather than requiring employers to fund an insurance program that in turn pays workers, the MESTL requires the employer to pay the worker directly. The MESTL also mandates payment starting on the very first hour of absence due to sickness at one hundred percent of regular pay. See
At first blush, and even more so after a careful read, it seems quite plain that subsection (c)(2) of the MESTL provides “sickness benefits under a sickness law of [a] State,” and is therefore expressly preempted. Certainly a “physical or mental illness, injury, or medical condition” is a sickness, and certainly “paid sick time” is a benefit. Nevertheless, the appellants and the United States as amicus curiae advance several arguments in support of their reading of the preemption clause as a narrow provision with a meaning that does not encompass the type of benefits mandated by subsection (c)(2). We consider those arguments, moving from simple to complex.
B.
1.
The appellants first try an ordinary meaning argument. See In re Hill, 562 F.3d 29, 32 (1st Cir. 2009) (“We assume that the words Congress chose, if not spe-
2.
The Attorney General next undertakes an elaborate attempt to find in the text of the RUIA a narrow technical reading of “sickness benefits” that excludes the type of benefit that the MESTL mandates in subsection (c)(2). The resulting, principal textual argument has eight steps: The word “benefits” as used in the RUIA is a defined term that “means the money payments payable to an employee as provided in this chapter, with respect to his unemployment or sickness,”
We react to this reasoning with considerable skepticism concerning the first step: that “benefits” as used in the preemption clause means only “benefits” as artificially defined in
The full text of the preemption clause reinforces our skepticism. In explaining its exercise of preemptive force, the clause states that “application ... of State sickness laws ... to such employment ... would constitute an undue burden upon, and an undue interference with the effective regulation of, interstate commerce.”
Tellingly, if the Attorney General were correct that the RUIA preempts only state sickness laws that mandate “benefits” preсisely as that term is defined in
This interpretation does not comport with the statute‘s stated purpose of protecting interstate rail regulation from the burdens of state sickness law. As the United States explains in its brief, the legislative history of
Nor are we persuaded by the Attorney General‘s second and related textual argument based on the term “sickness periods.” Recall that the RUIA, pursuant to its preemption clause, “makes exclusive provision ... for the payment of sickness benefits for sickness periods after June 30, 1947.”
The Attorney General‘s final stab at using the statutory language to limit the scope of preemption relates to a reimbursement provision in the Act. The provision empowers the Railroad Retirement Board to reimburse a state that provides sickness benefits to workers if the state takes railroad employment into account in determining whether workers are eligible for state sickness benefits or in setting the amount of such benefits.
This point does not carry the force assigned to it by the Attorney General.
3.
The appellants next claim that various Railroad Retirement Board publications demonstrate that the particular sickness benefits provided under the RUIA do not include employer-provided sick pay or sick
4.
Implicitly acknowledging the problems with their effort to derive a textually restricted definition of “sickness benefits,” the appellants and their amicus at times
They moor, instead, to the context and purpose of the preemption clause. This is a fair point, at least conceptually. In construing a statutory provision that expressly preempts state law, we do examine its purpose and context. See Medtronic, Inc. v. Lohr, 518 U.S. 470, 485-86 (1996). Such an examination in this case, though, simply reinforces our conclusion that, even if we limit the preemptive reach of
The MESTL addresses the exact same problem that the RUIA‘s provision of sickness benefits addresses: absent legislation or agreement, an employer is not required to bear the cost of providing any form of income to an employee whо is not working due to illness. The MESTL also settles upon a similar type of solution: make the employer provide a source of income, subject to various conditions and limitations. In this respect, the appellants and their amicus overlook the fact that the status quo ante, i.e., the state of affairs before enactment of either law at issue, is that whether the employee receives pay during an absence due to sickness hinges on the employment agreement. If that agreement
There are, of course, real differences between the respective benefits. As we have explained, the formula used to calculate the onset, duration, and amount of benefits, as well as the manner in which the employer funds the benefits, differ. The Attorney General concedes that such differences do not defeat preemption as long as the state sickness law mandates an “RUIA-like short-term disability insurance” as opposed to some “other form[] of benefits.” But it is unclear how, where, or why the Attorney General draws the line between those schemes. The Attorney General seems to argue that the dispositive faсtor for preemption purposes is the method of payment: indirect employer payments through an insurance fund are preempted, but direct employer payments through a payroll system are not. We are not persuaded that Congress cared only about the mechanism by which burdens were placed on the employer to benefit the employee, and not about the burdens themselves. After all, the statute expressly refers to Congress‘s concern about the burdens. See
For these reasons, among others, we also reject efforts by the United States to use the “historical context in which the amendments were enacted” to limit the scope of the preemption clause. According to the United States, when Congress added sickness benefits to the RUIA in 1946, the only existing state sickness laws required “a similar form of insurance for employees unable to work for an extended period on account of illness or injury.” Because no state had passed “an earned-sick-time law” at that time, the United States says, it therefore follows that Congress had in mind only the existing state sickness laws when it amended the preemption clause to bar “any right ... to sickness benefits under a sickness law of any State.”
The Attorney General points out that the heading of the RUIA‘s preemption provision, “Effect on State unemployment compensation laws,” was not amended when the provision itself was amended. As we explained earlier, Congress amended the RUIA in 1946 to add sickness benefits to the unemployment benefits it had mandated in 1938. The Attorney General argues that, becausе Congress made no revisions to the heading, it meant for the heading to limit the preempted “sickness benefits” to only those sickness benefits mandated by “unemployment compensation laws.” But the text of the clause makes plain that Congress knew how to limit preemption to unemployment compensation laws, as it expressly did in the context of the original benefits. See
We also reject the Attorney General‘s claim that the MESTL does not tread “within the domain of ‘sickness benefits’ preempted by [the RUIA].” Application of the MESTL to the plaintiff interstate rail carriers would directly alter the balance struck by the RUIA in setting a minimum level of costs that must be borne by such carriers to offset partially the hardships to employees caused by an inability to work due to sickness.
5.
As evidenced by the foregoing discussion, we find it unnecessary to resolve the parties’ debate conсerning the nature of any interpretative presumptions that might guide our analysis, in particular the presumption against preemption. See Medtronic, 518 U.S. at 485 (“[B]ecause the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly pre-empt state-law causes of action.“). Compare Wyeth v. Levine, 555 U.S. 555, 565 n.3 (2009) (rejecting argument that presumption against preemption does not apply in areas of lasting federal regulation), with Brown v. United Airlines, Inc., 720 F.3d 60, 68 (1st Cir. 2013) (rejecting application of presumption against preemption in air-transportation context due to “both longstanding and pervasive” federal regulation in that field). The textual, contextual, and purpose-related cues all point suffiсiently strongly in the direction of finding that
C.
Anticipating the possibility that we might agree with the district court that the RUIA preempts subsection (c)(2) of the MESTL as applied to interstate rail carriers, the Attorney General and the union intervenors have asked us in the alternative to determine whether any or all other sections of the MESTL might still be applied to such employers. Resolving this issue of severability raises three potential questions: (1) Are any of the remaining sections of the MESTL themselves preempted by the RUIA? (2) Are any remaining sections that are nоt so preempted nevertheless preempted by either the RLA or ERISA as alleged in the complaint? (3) Should any sections of the MESTL be preserved by severing the preempted sections as applied to interstate rail carriers?
The district court did not consider these questions, perhaps because the Attorney General did not raise severability in her summary judgment briefing. But the union intervenors raised a severability argument in their memorandum below, and they press severability as an alternative argument on appeal (as does the Attorney General). It is, in short, a contention that was raised below and preserved on appeal, cer-
We often hesitate to address in the first instance issues on which we lack the benefit of a district court‘s consideration. See, e.g., United Parcel Serv., Inc. v. Flores-Galarza, 318 F.3d 323, 337-38 (1st Cir. 2003) (remanding, after affirming preemption determination, for district court to resolve “three selected issues” where submissions and arguments below adverted to, but did not focus on, such issues). Issues can sharpen—or disappear—when contested and resolved first in the district court. In this case, we lack any answers to the three critical questions. The need to consider each question, in turn, depends in part on the answers to the other questions. For example, were it clear that the MESTL is not severable, then our decision today would dispose of the whole case. Conversely, were it clear that one of the other federal laws preempted all of the MESTL, there would be no need to decide severability. There is some chance, too, that an assessment of all three questions might counsel in favor of certifying the severability question to the Massachusetts Supreme Judicial Court. We therefore decline to reach these questions in the context of the present appeals.
III.
We hold that the RUIA preempts subsection (c)(2) of the MESTL as applied to interstate rail carriers that employ workers in Massachusetts. We remand for the district court to determine whether any or all other sections of the MESTL might be applied to such employers. Each party shall bear its own costs.
Affirmed in part, vacated in part, and remanded.