Opinion ID: 176919
Heading Depth: 1
Heading Rank: 2

Heading: Narrow scope

Text: We further conclude that the PSA challenged here is sufficiently narrow in scope that it qualifies as non-preempted market participation under Cardinal Towing's second prong. Despite covering many individual construction projects, the PSA limited its reach to construction projects costing over $200,000 that were paid for with the $337 million of Measure E funds and that were initiated during the three-year term of the agreement. This is undoubtedly narrower than the agreement approved in Boston Harbor, which covered $6.1 billion of spending over ten years. Id. at 221, 113 S.Ct. 1190. Although the agreement approved in Boston Harbor covered the one particular job of cleaning up Boston Harbor, that one job almost certainly could have been characterized as many component projects. Boston Harbor, 507 U.S. at 232, 113 S.Ct. 1190. Likewise, here, the PSA could be characterized as covering the single project of improving campus facilities. Moreover, the PSA's substantive scope is very similar to the Boston Harbor agreement's. See id. at 232, 113 S.Ct. 1190. Like the District's PSA, the Boston Harbor agreement recognized one exclusive bargaining agent, specified dispute-resolution mechanisms, required all employees to become union members within seven days of their employment, required use of the union's hiring halls to supply the labor force, prohibited strikes for the term of the agreement, bound all contractors and subcontractors to the agreement, and prescribed the benefits that workers would receive for the duration of the project. Id. at 221-22, 113 S.Ct. 1190; see also Brief for Petitioners at 7, Boston Harbor, 507 U.S. 218 (1993) (No. 91-261), 1992 WL 511837. The District's Agreement does, however, contain one set of provisions that the Boston Harbor agreement did not appear to have: provisions requiring the parties to maximize work opportunities for the District's residents and for minority- and women-owned businesses. Specifically, the Agreement required signatory unions to establish apprenticeship programs for District residents, to encourage District residents to enter those programs, and to encourage the utilization of District residents on the projects covered by the PSA. These provisions do not render the PSA too broad to qualify as market participation under Cardinal Towing's narrow scope test; they are simply part of the consideration that the unions provided in exchange for the benefits they received under the Agreement. This conclusion accords with the Supreme Court's decision in White v. Massachusetts Council of Construction Employers, Inc., 460 U.S. 204, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983), that a city acted as a market participant not subject to the dormant Commerce Clause when it adopted an executive order requiring that certain percentages of workers on city-funded public construction projects be city residents, minorities, and women. Id. at 206, 214, 103 S.Ct. 1042. We therefore conclude that the District's PSA is sufficiently narrow to qualify as market participation exempt from preemption under Cardinal Towing's second prong. Because entering into the PSA qualifies as market participationunder both prongs of the Cardinal Towing test it is not subject to preemption by ERISA or the NLRA. We accordingly affirm the grant of summary judgment for the defendants on the preemption claims. 2. Substantive and Procedural Due Process Claims The plaintiffs contend that the PSA violated their rights to substantive and procedural due process by depriving them of liberty and property interests protected by the Fourteenth Amendment. To succeed on a substantive or procedural due process claim, the plaintiffs must first establish that they were deprived of an interest protected by the Due Process Clause. See Shanks v. Dressel, 540 F.3d 1082, 1087 (9th Cir.2008) (substantive due process); Kildare v. Saenz, 325 F.3d 1078, 1085 (9th Cir.2003) (procedural due process). We conclude that the plaintiffs cannot make this threshold showing and accordingly affirm the grant of summary judgment to the defendants on the due process claims. a. Claimed Liberty Interest The plaintiffs first contend that the PSA deprived them of their protected liberty interest in pursuing careers as electricians by categorically disqualif[ying] them and render[ing] them ineligible for virtually any Rancho Santiago construction work for three years. The Due Process Clause does indeed protect the plaintiffs' liberty interest in pursuing their careers as electricians. See Bd. of Regents v. Roth, 408 U.S. 564, 573, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972) (holding that the Due Process Clause protects the right to engage in the common occupations of life). The PSA, however, did not deprive the plaintiffs of that interest. The Supreme Court made clear in Board of Regents v. Roth that merely declining to rehire someone does not infringe on his liberty interest in pursuing a career because the person remains free as before to seek another job. Id. at 575, 92 S.Ct. 2701. Rather, the government violates this liberty interest only when it foreclose[s the person's] freedom to take advantage of other employment opportunities, for instance by barring him or her from all other public employment. Id. at 573-74, 92 S.Ct. 2701. By extension, then, declining to hire someone in the first instance does not infringe any protected liberty interest so long as the decision does not bar the person from all public employment or otherwise foreclose him from seeking other job opportunities. The plaintiffs contend that the PSA violated their liberty by effectively barring them from working on a significant portion of the District's construction projects for three years. This contention fails for two reasons. First, the plaintiffs were not excluded from all public employment on the District's projects; they still had the opportunity to work on non-Measure E-funded projects and on Measure E projects costing less than $200,000. Second, and more importantly, the plaintiffs were not actually excluded from working on the projects covered by the PSA: the non-union apprentices remained free to join a union apprenticeship program qualified to provide workers for those projects. The PSA therefore did not violate the plaintiffs' liberty interest in pursuing their careers as electricians. b. Claimed Property Interests The plaintiffs also contend that the PSA deprived them of three protected property interests: (1) their interest in remaining eligible to work on the District's construction projects, (2) their interest in a state-funded education, and (3) their interest in the credits, job hours, and training they had earned through their non-union apprenticeship programs. We conclude that the PSA did not deprive the plaintiffs of any such protected property interests. First, the plaintiffs have not even made the threshold showing that the Due Process Clause protects their interest in remaining eligible to work on the District's construction projects. Protected property interests are not created by the Constitution[, but r]ather ... they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law. Roth, 408 U.S. at 577, 92 S.Ct. 2701. State law creates a property interest protected by the Due Process Clause where it creates a legitimate claim of entitlement to a particular benefit. Id. A legitimate claim of entitlement is determined largely by the language of the statute and the extent to which the entitlement is couched in mandatory terms. Wedges/Ledges of Cal., Inc. v. Phoenix, 24 F.3d 56, 62 (9th Cir.1994) (quoting Ass'n of Orange Co. Deputy Sheriffs v. Gates, 716 F.2d 733, 734 (9th Cir.1983)). Although the plaintiffs contend, without explanation, that the net effect of a variety of California laws confers on them an entitlement to remain eligible for work on the District's projects, they point to no law that even comes close to mandating that non-union apprentices remain eligible for all construction projects. We therefore conclude that the plaintiffs have no protected property interest in remaining eligible to work on the District's projects. Second, even if California law confers a protected property interest in a state-funded education, the plaintiffs do not explain how the PSA deprived them of that interest. Indeed, the plaintiffs clearly could not show that they suffered a deprivation of their purported right to an education, as they have all graduated. We accordingly reject this claim. Third, even if California law creates protected property interests in the credits, job hours, and training that the named apprentices earned through their non-union apprenticeship programs, the PSA did not deprive them of those interests. The PSA did not kick the plaintiffs out of their apprenticeship programs or strip them of their credits and training hours. At most, the PSA required the plaintiffs to put some of their credits and training hours in jeopardy if they chose to transfer to another apprenticeship program so that they could work on PSA-covered projects. This loss would have resulted from the apprentices' choice to transfer programs, not from the PSA itself. In sum, the PSA did not deprive the plaintiffs of any liberty or property interest protected by the Due Process Clause. We accordingly affirm the grant of summary judgment to the defendants on the plaintiffs' due process claims. 3. Equal Protection Claim Finally, the plaintiffs contend that the PSA violated their rights to equal protection because it treated them differently than union-affiliated apprentices. The parties agree, as they must, that rational basis scrutiny applies to this claim. [8] See City of New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 49 L.Ed.2d 511 (1976) (explaining that rational basis scrutiny applies to equal protection claims [u]nless a classification trammels fundamental personal rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage). State action will survive rational basis scrutiny if it is rationally related to a legitimate state interest. City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 440, 105 S.Ct. 3249, 87 L.Ed.2d 313 (1985). Under rational basis review, the state actor has no obligation to produce evidence to sustain the rationality of a statutory classification; rather, the burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it. Kahawaiolaa v. Norton, 386 F.3d 1271, 1280 (9th Cir.2004) (internal quotations, alteration, and citation omitted). The plaintiffs have not met this burden. The plaintiffs contend that the PSA fails the rational basis test because it was not rationally related to the District's claimed legitimate interest in avoiding labor disruptions. In support of this contention, they point to evidence that the District did not analyze the PSA's true cost impact. This contention misses the mark. First, the Equal Protection Clause allows the States wide latitude with economic decisions, and presumes that even improvident decisions will eventually be rectified by the democratic processes. City of Cleburne, 473 U.S. at 440, 105 S.Ct. 3249 (internal citations omitted). Thus, even if the District's purported failure to fully analyze the PSA's costs resulted in an improvident decision, the Equal Protection Clause will not invalidate it. Second, to survive rational basis scrutiny, a state action need not actually further a legitimate interest; it is enough that the governing body  could have rationally decided that the action would further that interest. See Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 466, 101 S.Ct. 715, 66 L.Ed.2d 659 (1981) (emphasis in original). Here, even if the PSA did cost the District more than it was worth, the District could have rationally believed that the PSA would promote its legitimate interest in avoiding labor disruptions. Indeed, the PSA plainly contains provisions that serve that goal by prohibiting work stoppages, strikes, and other disruptions. Because we conclude that the PSA was rationally related to the District's legitimate interest in preventing labor disruptions, we affirm the grant of summary judgment to the defendants on the plaintiffs' Equal Protection Claim.
In sum, we conclude that this appeal is not moot and that the District has waived any claim to sovereign immunity. Because we conclude that the PSA falls within the market participant exception to preemption, we affirm the grant of summary judgment to the defendants on the ERISA and NLRA preemption claims. We also affirm the grant of summary judgment to the defendants on the plaintiffs' substantive and procedural due process claims because the plaintiffs have not shown that the District deprived them of any constitutionally protected liberty or property interest. Finally, we conclude that the PSA was rationally related to the District's legitimate interest in avoiding labor disruptions and accordingly affirm the grant of summary judgment to the defendants on the Equal Protection claim. DISMISSED in part; AFFIRMED in part.