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Allied Construction Industries v. City of Cincinnati

United States Court of Appeals, Sixth Circuit

January 4, 2018

Allied Construction Industries, Plaintiff-Appellee,
v.
City of Cincinnati, Defendant-Appellant Laborers International Union of North America, Local 265, Intervenor-Appellant

          Argued October 11, 2017

         Appeal from the United States District Court for the Southern District of Ohio at Cincinnati. No. 1:14-cv-00450 Michael R. Barrett, District Judge.

         ARGUED:

          Terrance A. Nestor, CITY OF CINCINNATI, Cincinnati, Ohio, for Appellant in 16-4248.

          David M. Cook, COOK & LOGOTHETIS, LLC, Cincinnati, Ohio, for Appellant in 16-4249.

          Kevin R. McDermott, BARNES & THORNBURG LLP, Columbus, Ohio, for Appellee.

         ON BRIEF:

          Terrance A. Nestor, Scott Crowley, CITY OF CINCINNATI, Cincinnati, Ohio, for Appellant in 16-4248.

          David M. Cook, COOK & LOGOTHETIS, LLC, Cincinnati, Ohio, Sharon Seidenstein, Jolene Kramer, WEINBERG, ROGER & ROSENFELD, PC, Alameda, California, James Ray, LAW OFFICES OF JAMES RAY, Alexandria, Virginia, for Appellant in 16-4249.

          Kevin R. McDermott, BARNES & THORNBURG LLP, Columbus, Ohio, for Appellee.

          Before BOGGS, BATCHELDER, and KETHLEDGE, Circuit Judges.

          OPINION

          BOGGS, CIRCUIT JUDGE.

         The City of Cincinnati ("City") and Laborers International Union of North America, Local 265 ("the Union") appeal the district court's grant of summary judgment to Allied Construction Industries ("Allied Construction"), and the denial of the City's and the Union's motions for summary judgment. The district court held that three City ordinance provisions ("the Ordinance") concerning bidder specifications for certain City projects were preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"). We hold that the City was acting as a market participant in enacting the Ordinance, and therefore these provisions are not preempted by ERISA. Accordingly, we reverse.

         I

         A. Factual Background

         On June 26, 2012, Cincinnati enacted Ordinance No. 282-2012, which codified Chapter 320 of the Municipal Code to provide guidelines for selecting the "lowest and best bidder" on certain projects of the "Department of Sewers." Cincinnati, OH., Ordinance No. 282-2012 (June 26, 2012). The Ordinance's preamble noted that it was enacted, in part, to "ensure efficient use of taxpayer dollars, minimize waste, and promote worker safety and fair treatment of workers." Id. On May 1, 2013, the City enacted Ordinance No. 114-2013, amending the Ordinance to include bids for "Greater Cincinnati Water Works and the stormwater management utility division." Cincinnati, OH., Ordinance No. 114-2013 (May 1, 2013). The City stated that it sought to employ skilled contractors that were committed to the City's "safety, quality, time, and budgetary concerns." Id. Allied Construction alleges that three provisions in the Ordinance are preempted by ERISA.

         First, § 320-3 lists fifteen factors to be considered in selecting the lowest and best bidder, two of which are at issue here. Section 320-3(j) requires the bidder to certify whether:

it provides, or contributes to, a health care plan for those employees working on the project and shall provide a copy of the health plan upon request. The contributions toward a health care plan must be part of the employee's regular compensation, and not merely part of the employee's compensation during ...

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