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CHAMBER OF COMMERCE OF U.S. v. LOCKYER

Nos. 03-55166, 03-55169.

463 F.3d 1076 (2006)

CHAMBER OF COMMERCE OF the UNITED STATES; California Chamber of Commerce; Employers Group; California Healthcare Association; California Manufacturers and Technology Assn.; California Association of Health Facilities; California Association of Home & Services for the Aging; Bettec Corporation; Marksherm Corporation; Zilaco Inc., Zilaco; del Rio Healthcare, Inc.; Beverly Health & Rehabilitation Services, Inc. dba Beverly Manor Costa Mesa; Internext Group, Plaintiffs-Appellees, California Labor Federation, AFL-CIO; American Federation of Labor and Congress of Industrial Organizations, Intervenors-Appellants, v. Bill LOCKYER, Attorney General, in his capacity as Attorney General of the State of California; Department of Health Services; Frank G. Vanacore, as the Chief of the Audit Review and Analysis Section of the California Department of Health Services; Diana M. Bonta, R.N., Dr., Ph.D, as the Director of the California Department of Health Services, Defendants. Chamber of Commerce of the United States; California Chamber Of Commerce; Employers Group; California Healthcare Association; California Manufacturers and Technology Assn.; California Association of Health Facilities; California Association of Home & Services for the Aging; Bettec Corporation; Marksherm Corporation; Zilaco Inc., Zilaco; del Rio Healthcare, Inc.; Beverly Health & Rehabilitation Services, Inc. dba Beverly Manor Costa Mesa; Internext Group, Plaintiffs-Appellees, and California Labor Federation, AFL-CIO; American Federation of Labor and Congress of Industrial Organizations, Intervenors-Appellants, v. Bill Lockyer, Attorney General, in his capacity as Attorney General of the State of California; Department of Health Services; Frank G. Vanacore, as the Chief of the Audit Review and Analysis Section of the California Department of Health Services; Diana M. Bonta, R.N., Dr., Ph.D, as the Director of the California Department of Health Services, Defendants-Appellants.

United States Court of Appeals, Ninth Circuit.

Filed September 21, 2006.

Attorney(s) appearing for the Case

Bill Lockyer, Tom Greene, Richard T. Waldow, Angela Sierra (argued), Sacramento, CA, for the defendants-appellants.

Stephen P. Berzon, Scott A. Kronland (argued), Stacey M. Leyton, Altshuler, Berzon, Nussbaum, Rubin & Demain, San Francisco, CA, for the intervenors-appellants.

Bradley W. Kampas (argued), D. Gregory Valenza, Scott Oborne, Jackson Lewis LLP, San Francisco, CA, for the plaintiffs-appellees.

John H. Ferguson, Division of Enforcement Litigation, Washington, DC, for amicus curiae National Labor Relations Board.

Daniel V. Yager, McGuiness Norris & Williams, LLP, Washington, DC, for amici curiae Associated Builders and Contractors, Inc. and LPA, Inc.

Fran M. Layton, Shute, Mihaly & Weinberger LLP, San Francisco, CA, for amicus curiae South Coast Air Quality Management District.

Before MARY M. SCHROEDER, Chief Judge, STEPHEN REINHARDT, ROBERT R. BEEZER, ALEX KOZINSKI, ANDREW J. KLEINFELD, HAWKINS, SIDNEY R. THOMAS, BARRY G. SILVERMAN, M. MARGARET McKEOWN, KIM McLANE WARDLAW, RAYMOND C. FISHER, RICHARD A. PAEZ, JOHNNIE B. RAWLINSON, RICHARD R. CLIFTON and CONSUELO M. CALLAHAN, Circuit Judges.

Opinion by Judge FISHER; Dissent by Judge BEEZER.

FISHER, Circuit Judge.

The question before us is whether a state's exercise of its sovereign power to control the use of its funds conflicts with national labor policy as expressed in the National Labor Relations Act ("NLRA"), 29 U.S.C. §§ 151-169. Specifically, two provisions in a California statute forbid employers who receive state grant or program funds in excess of $10,000 from using those funds...

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