San Francisco must face legal challenge to airline health insurance obligations

Australian citizens return to Australia as efforts to slow the spread of COVID-19 continue in San Francisco

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(Reuters) – A U.S. appeals court on Tuesday ordered airlines serving San Francisco airports to provide employee health insurance amid the COVID-19 pandemic. It has reinstated trade group challenges to the mandated law.

The San Francisco-based Ninth Circuit Court of Appeals ruled two-to-one that the city acted as a government regulator, not simply managing private property, when it adopted the 2020 law. It said the ordinance could be overridden under federal law because of the Airlines for America, which represents most of the nation’s largest airlines, also claims.

For a law to supersede federal law, a state or city must act as a government regulator and not a private market participant in adopting that law.

The court overturned a federal judge’s ruling that found the city of San Francisco was acting as a private “market participant” when it adopted the law, and dismissed the industry group’s 2021 lawsuit.

Representatives for Airlines for America and an attorney for the city did not respond to a request for comment.

In adopting the law in 2020, the city of San Francisco said it needed to protect workers without health insurance and citizens using San Francisco International Airport.

Airlines for America argues in its lawsuit that the city’s ordinance is preempted by federal law regulating employee benefits and another law regulating airlines.

The Ninth Circuit Court said Tuesday that the city of San Francisco is playing a regulatory role in implementing the law, as it imposes fines of $1,000 per violation.

The court remanded the case to a federal judge in San Francisco to consider the airline’s merits on the Americans’ claims.

In a dissenting opinion, Circuit Court Judge Mary Schroeder said the city’s law only imposes new contract terms on airlines that use the airport, not general government regulation.

Reported by Daniel Wisner in Albany, NY, edited by Alexia Garamfalvi and Grant McCool

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Dan Wiessner (@danwiessner) reports on labor, employment and immigration law, including litigation and policymaking. Contact him at

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