Opinion ID: 799310
Heading Depth: 2
Heading Rank: 2

Heading: Alleged Favoritism

Text: BIECA next argues that the PLAs cannot fall within the market participant exception, since the City's purpose in agreeing to them was not to achieve cost reductions, but to further the interests of the BCTC and its affiliates, which were politically aligned with City officials' interests. At a minimum, BIECA argues, the dispute over the City's motive is an issue of material fact that rendered dismissal inappropriate. This argument misapprehends both the means for determining governmental purpose and the bounds of the market exception itself. First, when a court assesses whether a governmental policy has a regulatory purpose, it looks primarily to the objective purpose clear on the face of the enactment, not to allegations about individual officials' motivations in adopting the policy. We will not search for an impermissible motive where a permissible purpose is apparent, because [f]ederal preemption doctrine evaluates what legislation does, not why legislators voted for it or what political coalition led to its enactment. N. Ill. Chapter of Associated Builders & Contractors, Inc. v. Lavin, 431 F.3d 1004, 1007 (7th Cir.2005). This principle is true across many fields of substantive law. See, e.g., Mueller v. Allen, 463 U.S. 388, 394-95, 103 S.Ct. 3062, 77 L.Ed.2d 721 (1983) (noting that for Establishment Clause analysis, the Court is reluctan[t] to attribute unconstitutional motives to the States, particularly when a plausible secular purpose for the state's program may be discerned from the face of the statute). Our reluctance is motivated in no small part by separation of powers concerns: Judicial inquiries into legislative or executive motivation represent a substantial intrusion into the workings of other branches of government. Placing a decisionmaker on the stand is therefore usually to be avoided. Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 268, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977) (internal quotation marks and citations omitted). Other circuits have expressed reluctance to examine official motives in the PLA context. See Colfax Corp. v. Ill. State Toll Highway Auth., 79 F.3d 631, 635 (7th Cir.1996) (declining to go behind the contract to determine whether the ... real, but secret motive was to regulate labor); Johnson v. Rancho Santiago Cmty. Coll. Dist., 623 F.3d 1011, 1026-27 (9th Cir.2010). Moreover, it is difficult to discern officials' motives given the complex workings of government. See Bush v. Vera, 517 U.S. 952, 1012-14 & n. 9, 116 S.Ct. 1941, 135 L.Ed.2d 248 (1996) (Stevens, J., dissenting) (discussing difficulty of determining legislature's predominant motive for passing a law, and collecting cases). We decline BIECA's suggestion that its bare allegation of cronyism should permit an elaborate inquiry into individual governmental officials' motivations. See Iqbal, 556 U.S. at 678-79, 129 S.Ct. 1937 (Rule 8... does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.). Second, even if we were more willing to scrutinize the City's motives for entering into the challenged PLAs, BIECA's assertion that the City's interest is noneconomic rests unpersuasively on the claim that the PLAs do not achieve the lowest possible costs for the City, because doing business with BIECA and UECA would in some instances achieve even greater savings than the PLAs' terms provide. Appellants misunderstand the purpose that satisfies the market participant exception. It cannot be correct that to qualify for the exception, the City must show that its contracts are maximally efficient. Acting like a proprietor does not mean acting exclusively with the narrow goal of minimizing costs regardless of consequences. Private proprietors are entitled to, and sometimes do, prefer working with familiar faces or contracting with larger entities that can consistently and simply provide all their requirements. These practices may reflect long-run economic rationality. But even if they do not, accepting BIECA's restrictive theory of economic rationality would expose every public PLA to challenge based on speculative ex post evaluations of whether the PLAs in fact proved economically prudent. Cf. Rancho Santiago, 623 F.3d at 1025 (noting that a state interest in efficient procurement satisfying market participant exception does not necessarily mean `cheap' procurement, but rather `procurement that serves the state's purposes'), quoting Engine Mfrs. Ass'n v. S. Coast Air Quality Mgmt. Dist., 498 F.3d 1031, 1046 (9th Cir. 2007). Similarly, BIECA's allegation that the City relied on poor or even biased expert data to justify the PLAs, if true, might raise concerns about the efficacy of the City's contracting process. But, as BIECA concedes, [a]n inept proprietor is still a proprietor. Appellant Br. at 46. The allegation, even if true, does not demonstrate that the City was regulating. We find persuasive the Ninth Circuit's reasoning in Rancho Santiago, a similar case in which nonunion contractors challenged a pre-hire construction labor agreement: The plaintiffs further contend that the [PLA] does not advance an interest in efficient procurement because it presents several downside risks while offering no benefits in terms of costs, labor availability, or timeliness for the construction. Whether the [PLA's] benefits outweighed its costs, however, bears only on whether the District made a good business decision, not on whether it was pursuing regulatory, as opposed to proprietary, goals. We must keep in mind that congressional intent is the touchstone of our preemption analysis, Engine Mfrs., 498 F.3d at 1040, and we have no reason to think that Congress intended to allow beneficial state contracts while preempting similar contracts in which the state got a bad deal. 623 F.3d at 1025. It bears repeating that BIECA's theory of the case is preemption: that the PLAs are not contracts but regulations and therefore are preempted by the NLRA. It is hard to see why, even if political favoritism was a motivating factor in the City's decision to contract with particular contractors or unions, the PLAs would be thereby transformed from contracts into regulations. See Rancho Santiago, 623 F.3d at 1026 (Plaintiffs contend that the [PLA]'s primary purpose was to reward the unions that supported the Measure E campaign.... [W]e are quite certain that Congress did not intend for the NLRA's or ERISA's preemptive scope to turn on state officials' subjective reasons for adopting a regulation or agreement.). [4]