Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-15-01441/USCOURTS-ca8-15-01441-0/pdf.json

Parties Involved:
Mark Dayton
Appellee
Patrick Fleming
Appellant
Paula Fleming
Appellant
Kristina Greene
Appellant
Lucinda Jesson
Appellee
Cindy Lindbloom
Appellant
SEIU Healthcare of Minnesota
Appellee
Joan Spiczka
Appellant
Josh Tilsen
Appellee
Maria Zimmerman
Appellant

Document Text:

United States Court of Appeals

For the Eighth Circuit

___________________________

No. 15-1441

___________________________

Kristina Greene, Joan Spiczka; Paula Fleming; Patrick Fleming; Cindy

Lindbloom; Maria Zimmerman

lllllllllllllllllllll Plaintiffs - Appellants

v.

Minnesota Governor Mark Dayton, in his official capacity as the Governor of the

State of Minnesota; Josh Tilsen, in his official capacity as Commissioner of the

Bureau of Mediation Services; Lucinda Jesson, in her official capacity as

Commissioner of the Minnesota Department of Human Services; SEIU Healthcare

of Minnesota

lllllllllllllllllllll Defendants - Appellees

____________

Appeal from United States District Court 

for the District of Minnesota - Minneapolis

____________

 Submitted: October 21, 2015

 Filed: December 3, 2015

____________

Before LOKEN, MURPHY, and COLLOTON, Circuit Judges.

____________

MURPHY, Circuit Judge.

The Minnesota legislature enacted the Individual Providers of Direct Support

Services Representation Act on May 20, 2013 to allow homecare providers for

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Medicaid program participants to unionize. Six homecare providers brought this

action against Governor Mark Dayton, Bureau of Mediation Services ("BMS")

Commissioner Josh Tilsen, Minnesota Department ofHumanServicesCommissioner

Lucinda Jesson, and SEIU Healthcare of Minnesota ("SEIU"), alleging that the law

is unconstitutional. The providers argue that the statute violates the Supremacy

Clause, tortiously interferences with their preexisting contracts, and violates the

ContractClause ofthe United States and Minnesota Constitutions. The district court

1

dismissed the case, and the providers now appeal. We affirm.

I. 

The Individual Providers of Direct Support Services Representation Act ("the

Act") allows homecare providers for Medicaid program participants to seek union

representation under the Public Employment Labor Relations Act ("PELRA"). See

generally Minn. Stat. §§ 179A.54, 179A.06. Solely for collective bargaining

purposes, homecare providers are considered executive branch state employees. Id.

§ 179A.54, subd. 2. Although individual providers may form a union under PELRA,

they are not required to become members of the union or pay union dues. See id.

§ 179A.06, subd. 2; id. § 179A.13, subds. 1, 2(1), 3(1). 

Medicaid programparticipants hire and fire their own individual providers, but

the state has always paid these providers. See id. § 256B.0711, subds. 1(b), 1(d). 

Before passing theAct the commissioner of human services established compensation

rates, payment practices, and benefit terms for individual providers. Id. subd. 4(c). 

The process required under the new Act is different. It compels the state to meet and

negotiate with the providers' elected union to determine the terms and conditions of

The Honorable Michael J. Davis, then Chief Judge, United States District 1

Court for the District of Minnesota.

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the providers' employment. Id. § 179A.54, subd. 3. On August 26, 2014 the SEIU

was elected and certified as the providers' exclusive representative. 

Six homecare providers, Kristina Greene, Joan Spiczka,PaulaFleming, Patrick

Fleming, Cindy Lindbloom, and Maria Zimmerman (collectively "the providers"),

filed this lawsuit against Governor Mark Dayton, BMS Commissioner Josh Tilsen,

Minnesota Department of Human Services Commissioner Lucinda Jesson, and the

SEIU. Spiczka provides homecare for Medicaid program participants who have

disabilities. The other five appellants provide homecare for their own children who

are also Minnesota Medicaid program participants. The providers claim that the Act:

(1) violates the Supremacy Clause because the National Labor Relations Act

("NLRA") preempts state regulation of domestic workers; (2) tortiously interferes

with their right to contract individually with programparticipants; and (3) violatesthe

Contract Clause of the United States and Minnesota Constitutions. The district court

dismissed all of these claims. 

II. 

We review de novo the grant of a motion to dismiss, "taking all well pleaded

factual allegations in the complaint as true and making all reasonable inferences in

favor of the plaintiff." Cormack v. Settle-Beshears, 474 F.3d 528, 531 (8th Cir.

2007). "To survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to state a claim to relief that is plausible on its face." 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).

The providers first argue that the district court erred in dismissing their

Supremacy Clause claim. They state that Congress intended to preempt states from

the regulation of domestic service workers by exempting domestic service workers

from the NLRA. According to the Machinists preemption doctrine, "congressional

intent to shield a zone of activity from regulation is usually found only implicit[ly]

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in the structure of the Act, drawing on the notion that [w]hat Congress left

unregulated is as important as the regulations that it imposed." Chamber of

Commerce of U.S. v. Brown, 554 U.S. 60, 68 (2008) (alterationsin original) (internal

quotations and citation omitted). Although Congress exempted domestic service

workers from the NLRA, Congress did not demonstrate an intent to shield these

workers from all regulation. Rather, Congress merely concluded that domestic

service worker disputes were not significant enough to regulate federally because

they did not impact national "labor peace." See Harris v. Quinn, 134 S. Ct. 2618,

2640 (2014). 

Since Congress expressly exempted both agricultural and domestic service

workers from the NLRA, cases analyzing the legality of state agricultural worker

regulations are instructive here. See 29 U.S.C. § 152(3). The Ninth and Seventh

Circuits have determined that "federal policy is indifferent" to the regulation of

agricultural workers, and therefore "states remain free to legislate as they see fit." 

United Farm Workers of Am., AFL-CIO v. Ariz. Agric. Emp't Relations Bd., 669

F.2d 1249, 1257 (9th Cir. 1982) (internal quotation marks omitted); see Villegas v.

Princeton Farms, Inc., 893 F.2d 919, 921 (7th Cir. 1990). Although the providers

argue that the agricultural and domestic service exemptions are distinguishable

because Congress debated at length only the agricultural labor exemption, this

distinction is immaterial. The two groups of employees are treated identically in the

text of the statute, and we do not draw an inference from silence in a statute's

legislative history. See Harrison v. PPG Indus., Inc., 446 U.S. 578, 592 (1980). The

district court thus properly dismissed the providers' Supremacy Clause claimbecause

the NLRA does not preempt Minnesota's regulation of domestic service workers.

The providers unsuccessfully try to dovetail a state preemption argument into

their federal preemption claim. They argue that the Act is preempted by an older

Minnesota statute which excludes domestic service workers from its definition of

"employees" permitted to bargain collectively. See Minn. Stat. § 179.01, subd. 4. As

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for the state defendants, this argument fails as a matter of law because the Eleventh

Amendment bars our court from ordering state officials to conform their conduct to

state law. See Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 106 (1984). 

The providers' state preemption argument against the SEIU also fails because even

if the state laws conflict "irreconcilabl[y]," the law passed most recently by the

legislature controls and thus the Act trumps the older statute's definition of

"employees." See Minn. Stat. § 645.26, subd. 4. 

The providers contend that the district court also erred in dismissing their

tortious interference claim because the defendants forced them to join the union and

prevented them from bargaining directly with Medicaid program participants. The

Act however does not require individual providers to join the union. See id.

§ 179A.06, subd. 2; id. § 179A.13, subds. 1, 2(1), 3(1). To the extent that the

providers argue they can no longer bargain directly with program participants, their

tortious interference claimfails against the SEIU. That is because even assuming that

they allege a sufficiently concrete and particularized injury to have standing, they do

not plausibly allege that the union ever acted without justification, a requisite element

of tortious interference. See Furlev Sales & Assoc., Inc. v. N. Am. Auto. Warehouse,

Inc., 325 N.W.2d 20, 25 (Minn. 2002). "Generally, a defendant's actions are justified

if it pursues its legal rights via legal means." Noble Sys. Corp. v. Alorica Central,

LLC, 543 F.3d 978, 983 (8th Cir. 2008). The SEIU's actions in this case were

justified as a matter of law because under the Act it had the right to seek certification

asthe exclusive bargaining representative and to negotiate the providers' employment

terms. The district court also properly dismissed the providers' tortious interference

claim against the state defendants because federal courts are unable to order state

officials to conform their conduct to state law. See Pennhurst, 465 U.S. at 106. The

district court thus properly dismissed the entire tortious interference claim. 

Finally, the providers contend that the district court erred in dismissing their

federal and state constitutional Contract Clause claims. Both constitutions prohibit

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a state from passing a law which impairs the obligation of contracts. U.S. Const.

art. 1, § 10, cl.1; M.N. Const. art. I, § 11. Under both constitutions a law

unconstitutionally impairs a contract only if it substantially impairs a contractual

relationship, and either does not serve a significant and legitimate public purpose, or

is not reasonably appropriate to accomplish that purpose. Jacobsen v. AnheuserBusch, Inc., 392 N.W.2d 868, 872 (Minn. 1986); Energy Reserves Grp., Inc. v.

Kansas Power & Light Co., 459 U.S. 400, 411–13 (1983). The defendants contend

that the providers' constitutional claims fail because the appellants lack standing and

they do not allege which preexisting contracts terms are impaired by the Act. 

The providers do not sufficiently allege substantial impairment of a contractual

relationship. They claim that the Act impairs their contractual relationships with the

Medicaid programparticipants whomthey serve because it deprivesthem of the right

to "deal directly" with their "employers," and it negates their previously negotiated

terms and conditions of employment. Even before the Act was passed, however, the

commissioner of human services set compensation rates, payment practices, and

benefit terms for providers. See Minn. Stat. § 256B.0711, subd. 4(c). Although the

commissioner could permit "variations based on traditional and relevant factors

otherwise permitted by law," the providers did not have authority to negotiate

compensation or benefits terms with program participants. See id. subd. 4(c)(1). The

district court thus properly dismissed the providers' Contract Clause claims. 

For these reasons the judgment of the district court is affirmed.

______________________________

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