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What remains of San Francisco’s domestic partners benefits law looks as if it will fly with the 9th U.S. Circuit Court of Appeals. The three-judge panel hearing challenges to the historic ordinance on Tuesday seemed inclined to let a lower court ruling stand, despite arguments that federal law pre-empts requirements that companies doing business with the city of San Francisco provide benefits to domestic partners of employees, including gays and lesbians. The panel appeared skeptical that the ordinance changed airlines’ policies enough to violate either of two federal laws establishing national rules for industry business practices. “You would be stretching out to invalidate a local law, which I think is inconsistent with the principles of federalism,” said San Francisco’s chief assistant city attorney, Dennis Aftergut, during the nearly two-hour hearing. In 1997, San Francisco passed an ordinance requiring companies that do business with the city to provide the same benefits to domestic partners as married couples. Almost immediately, the law became the subject of court battles with airlines, which lease space from the city for operations at San Francisco International Airport. U.S. District Judge Claudia Wilken struck down ERISA-related portions of the ordinance — namely, health and pension benefits. What remains are family leave, bereavement leave, and travel perks, with fringe benefits forming a basis of the airlines’ appeal. An attorney for the airlines argued that regulating travel benefits for domestic partners, including free or reduced-price tickets, amounts to a regulation of ticket prices and violates the federal Airline Deregulation Act. The law is intended to allow airlines to compete nationally without local interference. “It has the effect of limiting . . . the airlines’ choices about what they’re going to do in the marketplace,” said Brendan Dolan of San Francisco-based Brobeck, Phleger & Harrison. Judge Raymond Fisher asked if city regulations at an airport always triggered federal law. Can a city “wearing its landlord hat,” Fisher asked, do anything that would have a financial impact on an airline? Dolan said there were certain “on the ground” exceptions, such as environmental regulations, but said the partnership benefits are not included. The airlines also argue that the ordinance may have the effect of regulating routes, also prohibited for local governments, if some airlines pull out of the San Francisco market to avoid the cost of benefits. Aftergut had a quick answer for the court. “Although they speculate that for some carriers this might have a significant effect, they offer no evidence . . . that carriers are even considering a change of routes,” Aftergut said. If the airlines succeed in challenging Wilken’s ruling, it appears it may be through the Railway Labor Act, a federal law that governs labor relations among industries crucial to the national economy. “When you read the regulations . . . there’s certainly an appropriate challenge that could be made that this interferes with the Railway Labor Act,” said Senior Judge J. Clifford Wallace, who reasoned that the ordinance could force airlines and unions to reopen collective bargaining agreements to include domestic partners. Again, Aftergut had an answer. “They are asking this court to cross a bridge long before they come to it, and they will never come to it,” Aftergut said. Later, he went so far as to “guarantee” that the city wouldn’t force open labor agreements, and that led him into turbulence. This time, Wallace had the quick reply. “I appreciate that guarantee, counsel, but when I write an opinion that says, ‘counsel guaranteed,’ I’m afraid I might lose my job,” he said. Judge Johnnie Rawlinson joined Wallace and Fisher on the panel. The case, Air Transport Association of America v. City and County of San Francisco, 99-16391, was heard in conjunction with another case. S.D. Myers Inc. v. City and County of San Francisco, 99-16397, was brought by an Ohio company that lost a city contract because it didn’t provide benefits, even though it employs no San Franciscans. Kevin Theriot of the American Center for Law and Justice argued that the case overreached the borders of San Francisco and violated the Commerce Clause. “What if Salt Lake City, for instance, decides that they’re not going to do business with any companies that do provide domestic benefits?” Theriot asked. Founded by evangelist Pat Robertson, the American Center for Law and Justice has successfully argued against a similar ordinance in Massachusetts state court.

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