Opinion ID: 3033697
Heading Depth: 3
Heading Rank: 3

Heading: Dalton and Partial Preemption

Text: “In a pre-emption case such as this, state law is displaced only to the extent that it actually conflicts with federal law. . . . The rule is that a federal court should not extend its invalidation of a statute further than necessary to dispose of the case before it.” Dalton v. Little Rock Family Planning Servs., 516 U.S. 474, 476 (1996) (internal citations and quotation marks omitted). Thus, in order to resolve this case, we have an obligation to determine which parts of the statute are preempted and which are not. The majority attempts to avoid this obligation by concluding that regardless of how the statute is enforced, “the balance of power as between labor unions and employers would still be improperly disturbed.” Maj. Op. at 12198. But how? The majority fails to establish that the restriction on use of state fund is itself preempted. Once one strips from the majority opinion all of its warnings about the effects of the enforcement provisions, there is nothing left to trigger preemption. Instead, the majority is content to point to vague “risks” — the risk that employers will “be accused of misspending state funds” or “of violating state law.”6 Aside from the few enforcement provisions the majority and I agree upon, these generalized risks are not sufficiently concrete effects to warrant striking down a sovereign act of the state of California — as the Supreme Court has made clear in Dalton and before. See Boston Harbor, 507 U.S. at 224 (cautioning us to be “reluctant to infer preemption”); Maryland v. Louisiana, 451 6 The majority also stresses that employers would suffer the indignity of “need[ing] to maintain [financial] records,” something that should not be entirely unfamiliar to private entities that receive money from state coffers. CHAMBER OF COMMERCE v. LOCKYER 12231 U.S. 725, 746 (1981) (stating that we must begin any preemption analysis with the “basic assumption that Congress did not intend to displace state law.”). Because I believe only certain enforcement provisions sufficiently risk intrusion into areas preempted under Machinists, I would hold that only partial preemption is warranted. On the record before us, however, we are not in a position to determine with certainty which parts of AB 1889 must be found preempted. As made clear by the majority, both in the district court and before us, the parties limited their preemption arguments to discussion of the statute as a whole. It would not be appropriate for us on this record to try to divide the statute’s enforcement provisions into preempted and nonpreempted portions. For example, certain enforcement provisions, such as the requirement that employers segregate state and nonstate funds, may be designed to do no more than permit the state to erect a “wall” between state and non-state funds and to enforce a purely compensatory remedy when state funds are misused. To conclude that such provisions are preempted could call into question a state’s power to require routine record-keeping requirements that apply in many different contexts to nonprofit corporations and other recipients of state grants. Even on this record, however, it seems likely that at least some of the enforcement provisions — particularly those that relate to record-keeping — should survive preemption. Therefore, we should leave it to the district court to resolve such questions in the first instance on an appropriate record. We should remand to the district court so the parties can present arguments (and evidence, if necessary) about the separate statutory provisions in light of the preemption principles I have explained today. See, e.g., Arizona Libertarian Party, Inc. v. Bayless, 351 F.3d 1277, 1283 (9th Cir. 2003) (“Although severability is a question of state law that we review de novo, we nonetheless consider it prudent to remand to the district court where we believe the district court is bet12232 CHAMBER OF COMMERCE v. LOCKYER ter able to decide the question in the first instance.”) (internal quotation marks and citations omitted). For the reasons set forth above, I respectfully dissent.