In a first in the health care reform context, and in opposition to the Fourth Circuit’s holding in the Wal-Mart Bill case of RILA v. Felder, the Ninth Circuit has ruled in Golden Gate Rest. Ass’n v. San Francisco, No. 07-17372 (9th Cir. 9/30/08), that the San Francisco health care law is not preempted by ERISA.

From the BNA Daily Labor Report this morning:

The Employee Retirement Income Security Act does not preempt a San Francisco ordinance that requires medium and large employers in the city to make minimum health care expenditures on behalf of covered employees, either by paying into their own employee benefits plans or into a fund maintained and administered by the city, the Ninth Circuit holds . . . .

Writing for the court, Judge Fletcher says ERISA preemption is limited in areas that historically are matters of local concern, that employers subject to the city ordinance law lacked the sort of discretion that would render the program an ERISA plan, and that the ordinance does not “relate to” a benefit plan covered by ERISA.

The case has been watched closely by employer representatives and employee groups, which predicted the decision could have wide-ranging implications for the future of health care funding. San Francisco Mayor Gavin Newsom in a statement calls the ruling ”a huge victory for this city and the 46 million Americans who don’t have health insurance.” Business groups, however, call the decision “devastating” for small business owners.