FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MATT JOHNSON; MICHAEL SPIERING;
JAMES BIRMINGHAM,
Plaintiffs,
and
KEVIN CHAVEZ; JOSEPH NIGBOR;
TRAVIS BARRETT; WES BERTALAN;
ASSOCIATED BUILDERS AND
CONTRACTORS OF SAN DIEGO, INC.
ELECTRICAL UNILATERAL
APPRENTICESHIP COMMITTEE;
SOUTHERN CALIFORNIA
CHAPTER OF THE ASSOCIATED
BUILDERS AND CONTRACTORS, INC. No. 08-56963
ELECTRICAL UNILATERAL D.C. No.
APPRENTICESHIP COMMITTEE,
Plaintiffs-Appellants,
8:04-cv-00280-JVS-
MLG
v. OPINION
RANCHO SANTIAGO COMMUNITY
COLLEGE DISTRICT; THE LOS
ANGELES AND ORANGE COUNTIES
BUILDING AND CONSTRUCTION
TRADES COUNCIL,
Defendants-Appellees,
and
INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS UNION LOCAL
441, ELECTRICAL APPRENTICESHIP
PROGRAM,
Defendant.
16967
16968 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Argued and Submitted
May 4, 2010—Pasadena, California
Filed October 8, 2010
Before: Betty B. Fletcher and Richard A. Paez,
Circuit Judges, and Donald E. Walter, District Judge.*
Opinion by Judge Paez
*The Honorable Donald E. Walter, Senior United States District Judge
for the Western District of Louisiana, sitting by designation.
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16973
COUNSEL
Carole M. Ross and Richard M. Freeman (argued), Sheppard,
Mullin Richter & Hampton LLP, San Diego, California, for
plaintiffs-appellants Kevin Chavez; Joseph Nigbor; Travis
Barrett; Wes Bertalan; Associated Builders and Contractors of
San Diego, Inc., Electrical Unilateral Apprenticeship Com-
mittee; and Southern California Chapter of the Associated
Builders and Contractors, Inc., Electrical Unilateral Appren-
ticeship Committee.
Ray Van der Nat (argued), Los Angeles, California, for
defendant-appellee Los Angeles and Orange Counties Build-
ing and Construction Trades Council and Glenn S. Goldby
and Gregory A. Wille (argued), Declues, Burkett & Thomp-
son LLP, Huntington Beach, California, for defendant-
appellee Rancho Santiago Community College District.
OPINION
PAEZ, Circuit Judge:
In 2003, Rancho Santiago Community College District
(“the District”) entered into a project labor agreement with the
Los Angeles and Orange Counties Building and Construction
Trades Council (“the Council”) and its affiliated construction
unions that governed labor relations for many District con-
struction projects over a three-to-five-year period. The agree-
ment required, among other things, that contractors use union
“hiring halls” to obtain workers, that all workers on covered
16974 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
projects become union members within seven days of their
employment, and that all contractors and subcontractors
working on covered projects agree to the project labor agree-
ment and to the master labor agreement negotiated by the
union for each craft. Seven individual non-union apprentices
and two non-union apprenticeship committees filed suit chal-
lenging the agreement as preempted by the National Labor
Relations Act (“NLRA”) and the Employee Retirement
Income Security Act (“ERISA”) and as violative of their
rights to substantive and procedural due process and to equal
protection. The district court granted the defendants summary
judgment on all claims.
Reviewing de novo, we hold that entering into the agree-
ment constitutes market participation not subject to preemp-
tion by the NLRA or ERISA, and that the agreement did not
violate the plaintiffs’ rights to substantive or procedural due
process or to equal protection. As a preliminary matter, we
also reject the District’s mootness and Eleventh Amendment
sovereign immunity defenses. Specifically, we conclude that
this appeal falls within the “capable of repetition, yet evading
review” exception to mootness, and that the District waived
any sovereign immunity defense by failing to pursue it while
extensively litigating this suit on the merits. Accordingly, we
affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 2002, voters in the Rancho Santiago Community College
District approved Ballot Measure E, which authorized the
District to issue $337 million in general obligation bonds to
fund improvements to the District’s facilities. After voters
approved the Measure, unions that had supported the Measure
E campaign encouraged the District to enter into a project
labor agreement,1 which would govern labor conditions for
1
A project labor agreement is a pre-hire agreement between a construc-
tion project owner and a union or unions that a contractor must agree to
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16975
the subsequent construction. The District agreed and entered
into a “Project Stabilization Agreement” (“PSA” or “the
Agreement”) with the Council and affiliated craft unions.
Before entering into the Agreement, the District did not con-
duct any formal studies to determine its costs and benefits, but
the District’s Board of Directors heard testimony from many
people in the community. According to the District’s former
construction manager, Robert Brown, the Board heard esti-
mates that the PSA could increase costs by zero to thirty per-
cent.
The PSA that the District ultimately executed covered all
of the District’s construction projects funded with Measure E
funds that cost over $200,000. The Agreement applied to all
covered projects initiated in a three-year period and would
remain in effect for two additional years if neither party termi-
nated it. According to the District, the PSA applied to twenty-
seven projects, but the plaintiffs contend that these twenty-
seven projects actually represent twenty-seven categories cov-
ering many more discrete projects.
Among other things, the PSA made the signatory unions
the exclusive bargaining agents for all employees; established
dispute-resolution mechanisms; required use of union “hiring
halls” to obtain workers; required all workers on covered
projects to start paying union dues within seven days of their
employment; and prohibited strikes, picketing, and other dis-
ruptions. The Agreement further required all contractors and
subcontractors working on a covered project to agree to the
PSA and to the craft unions’ master labor agreements, which
required contractors to use the unions’ apprenticeship pro-
before accepting work on the project and that establishes the terms and
conditions of employment for the project. 51 Corpus Juris Secundum,
Labor Relations § 311. Such agreements are common in the construction
industry, where the short-term nature of employment impedes post-hire
collective bargaining, and where contractors need predictable costs and a
steady supply of skilled labor. Id.
16976 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
grams and to contribute to union vacation, pension, and health
plans. Finally, the PSA established a Work Opportunities Pro-
gram that required the unions to establish an apprenticeship
program for District residents, to encourage the referral and
utilization of District residents as workers on covered proj-
ects, and to maximize opportunities for minority- and women-
owned businesses.
In response to the District’s approval of the PSA, seven
individual apprentices not affiliated with a union (“the indi-
vidual apprentices” or “the named apprentices”) and two non-
union apprenticeship committees (collectively, “the plain-
tiffs”) filed suit in March 2004 against the District, the Coun-
cil, and the International Brotherhood of Electrical Workers
Union 441’s Electrical Apprenticeship Program (“Local 441”)
(collectively, “the defendants”) in the federal district court for
the Central District of California. The suit challenged the PSA
on the grounds that it violated various state laws, that it was
preempted by ERISA and the NLRA, and that it violated the
named apprentices’ rights to substantive and procedural due
process and to equal protection as guaranteed by the U.S.
Constitution. The original complaint sought declaratory and
injunctive relief and attorney’s fees and costs.
On the defendants’ motion, the district court dismissed the
state law claims against all defendants and dismissed all but
the NLRA preemption claim against Local 441. The parties
later agreed to dismiss Local 441 completely.
The defendants later moved for summary judgment on the
merits or, in the alternative, partial summary judgment against
five of the named apprentices whose claims were allegedly
moot because they had graduated from their apprenticeship
programs. In response, the plaintiffs amended their complaint
to include a request for nominal damages to prevent the grad-
uated apprentices’ claims from becoming moot. Three of the
named apprentices, however, agreed to dismiss all of their
claims from the action.
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16977
The district court held that the prayer for nominal damages
prevented the graduated apprentices’ due process and equal
protection claims from becoming moot, but granted the defen-
dants’ motion for summary judgment on those claims. After
additional briefing, the district court also granted the defen-
dants summary judgment on the ERISA and NLRA preemp-
tion claims, concluding that the PSA was exempt from
preemption because it constituted state market participation,
not regulation. The plaintiffs appealed.
II. JURISDICTION AND STANDARD OF REVIEW
The district court had jurisdiction pursuant to 28 U.S.C.
§ 1331, and we have jurisdiction under 28 U.S.C. § 1291. We
review de novo the district court’s grant of summary judg-
ment. Mortimer v. Baca, 594 F.3d 714, 721 (9th Cir. 2010).
Summary judgment is warranted when “the pleadings, the dis-
covery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(c)(2). In deciding whether to affirm the
grant of summary judgment, we must determine whether,
“viewing the evidence in the light most favorable to the non-
moving party, . . . there are any genuine issues of material fact
and whether the district court correctly applied the relevant
substantive law.” Mortimer, 594 F.3d at 721 (internal quota-
tions and citation omitted).
III. DISCUSSION
Before reaching the merits of the plaintiffs’ claims, we
must first address the defendants’ contentions that this appeal
is moot and that the District is entitled to sovereign immunity.
A. Mootness
The District contends that this appeal is moot because the
PSA has expired and the District is not likely to enter into a
16978 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
new PSA, and because all the named apprentices have gradu-
ated. In general, a case is moot if there is no longer any “pres-
ent controversy as to which effective relief can be granted.”
Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d
895, 900 (9th Cir. 2007) (internal quotations and citation
omitted). A case is not moot, however, if the challenged
action is “capable of repetition, yet evading review.” Bio-
diversity Legal Found. v. Badgley, 309 F.3d 1166, 1173 (9th
Cir. 2002). We conclude that the plaintiffs’ challenge to the
PSA falls within this exception to mootness.
As an initial matter, we note that the plaintiffs’ prayer for
nominal damages for their substantive due process, procedural
due process, and equal protection claims prevents those
claims from becoming moot.2 See Bernhardt v. County of Los
Angeles, 279 F.3d 862, 872 (9th Cir. 2002) (“A live claim for
nominal damages will prevent dismissal for mootness.”). We
therefore need only consider whether the expiration of the
PSA or the graduation of the named apprentices renders moot
the ERISA and NLRA preemption claims for injunctive and
declaratory relief.
2
The District contends that our decision in Seven Words LLC v. Network
Solutions, 260 F.3d 1089 (9th Cir. 2001), prevents the prayer for nominal
damages from saving the constitutional claims from mootness because the
plaintiffs did not amend their complaint to request those damages until
after the District moved to dismiss based on mootness. The District reads
Seven Words too expansively. In Seven Words, we dismissed the plain-
tiff’s appeal as moot where the plaintiff “never sought damages . . . (until
a few days before argument in [the appeals] court),” “never [made] an
effort to amend the complaint to include a damages claim,” and had “ef-
fectively disavowed damages for tactical reasons.” Id. at 1095, 1097.
Here, by contrast, the plaintiffs amended their complaint to include a
request for damages and never made any tactical decision not to request
damages. Their failure to seek nominal damages in their original com-
plaint therefore does not preclude the nominal damages request from pre-
serving a live controversy over their constitutional claims.
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16979
1. Expiration of the PSA
[1] Despite the expiration of the PSA, we conclude that
this appeal is not moot because the challenged conduct is “ca-
pable of repetition yet evading review.” The “capable of repe-
tition, yet evading review” exception to mootness applies
“only where ‘(1) the duration of the challenged action is too
short to allow full litigation before it ceases, and (2) there is
a reasonable expectation that the plaintiffs will be subjected
to it again.’ ” Biodiversity Legal Found., 309 F.3d at 1173
(quoting Greenpeace Action v. Franklin, 14 F.3d 1324, 1329
(9th Cir. 1993)). The challenged PSA satisfies both of these
criteria.
[2] First, the duration of the challenged PSA was “too
short” to permit full litigation. The duration of a challenged
action is “too short” where it is “almost certain to run its
course before either this court or the Supreme Court can give
the case full consideration.” Id. The PSA had a term of three
years, but remained in force for two additional years because
neither party exercised its right to terminate it after the first
three years. For purposes of determining whether the PSA’s
duration was so short as to evade review, we consider only the
Agreement’s mandatory three-year term. We have applied
“the evading-review doctrine where the ‘duration of the con-
troversy is solely within the control of the defendant.’ ”
Anderson v. Evans, 371 F.3d 475, 479 (9th Cir. 2004) (quot-
ing Biodiversity Legal Found., 309 F.3d at 1174). Similarly,
here, because the PSA’s extension for an additional two years
was solely within the District’s control, we will apply the
evading-review doctrine if the duration not within its sole
control—three years—would be too short to allow for full
judicial review.
[3] We have acknowledged that three years is generally too
short to allow a case “seeking a declaratory judgment regard-
ing the legality of [an agreement’s] provisions [to] proceed
beyond district court review.” Int’l Ass’n of Machinists &
16980 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
Aerospace Workers, Local Lodge 964 v. B.F. Goodrich Aero-
space Aerostructures Grp., 387 F.3d 1046, 1050 (9th Cir.
2004). Indeed, the course of this litigation demonstrates that
three years is too short for us or the Supreme Court to give
the case full consideration; it has already been pending for
nearly six and a half years. Even without counting the three
years in which the district court stayed the case pending Ninth
Circuit and Supreme Court decisions, this litigation has taken
over three years to reach us, and the Supreme Court has not
yet had a chance to consider it. This case therefore satisfies
the “evading review” portion of the “capable of repetition, yet
evading review” doctrine.
[4] Second, this case also satisfies the “capable of repeti-
tion” requirement. The defendants have not met their burden
to show that there is no reasonable expectation that the plain-
tiffs will be subjected to a PSA again. See Ackley v. W. Con-
ference of Teamsters, 958 F.2d 1463, 1469 (9th Cir. 1992) (“It
is the defendant, not the plaintiff, who must demonstrate that
the alleged wrong will not recur.”). In support of its claim that
it will never enter into a PSA again, the District offers only
a declaration by its Vice Chancellor attesting that seventy-five
percent of Measure E funds have been expended, that the
remaining funds have been committed to projects that cannot
be completed because of insufficient funds, that the District
does not anticipate entering into a new PSA due to “present
economic conditions,” and that the passage of Measure E was
“unprecedented” and, in his opinion, a “once in a lifetime
event.”3 This declaration does not adequately demonstrate that
3
The defendants moved to supplement the record on appeal to include
a declaration attesting to these facts, which were not before the district
court. Although the court denied the motion in a clerk’s order, we recon-
sider that decision sua sponte and grant the motion. Because the new facts
that the defendants seek to establish bear on whether the controversy
before us is moot, we exercise our discretion to supplement the record on
appeal so that we may determine whether we have jurisdiction over the
ERISA and NLRA claims for declaratory and injunctive relief. See Lowry
v. Barnhart, 329 F.3d 1019, 1024 (9th Cir. 2003) (explaining that we may
supplement the record on appeal where “developments [might] render a
controversy moot and thus divest us of jurisdiction”).
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16981
the District will not enter into a PSA again. Indeed, twenty-
five percent of Measure E funds remain, and it would be
unreasonable to assume that the District will never use those
funds just because they currently lack sufficient funding to
complete the projects to which those funds have been com-
mitted. Moreover, the Vice Chancellor’s assertion that the
District does not anticipate entering into a new PSA
“[b]ecause of present economic conditions” implies that it
may resume construction, and accordingly enter into a new
PSA, once the economic situation improves.
[5] Because the District has not shown that it will not enter
into another PSA in the future, and because the duration of the
PSA is too short to allow for full judicial review, the expira-
tion of the PSA does not render the plaintiffs’ claims for
declaratory and injunctive relief moot.
2. Graduation of the Named Apprentices
We next consider whether the fact that the individual
apprentices have graduated from their apprenticeship pro-
grams renders the ERISA and NLRA preemption claims moot
as to them. At the outset, however, we note that whether the
apprentices remain in this suit will not affect our analysis of
the preemption issues or any relief we grant or deny. The
plaintiff apprenticeship committees’ claims of ERISA and
NLRA preemption are identical to the individual apprentices’
claims, and the apprentices’ identities and particular circum-
stances are irrelevant to our analysis.
[6] A case is moot when the “parties lack a legally cogni-
zable interest in the outcome.” U.S. Parole Comm’n v.
Geraghty, 445 U.S. 388, 396 (1980) (quoting Powell v.
McCormack, 395 U.S. 486, 496 (1969)). The apprentices
retain a cognizable interest in the outcome of their NLRA pre-
emption claim because that claim does not depend on their
status as apprentices. The plaintiffs contend that sections 7
and 8 of the NLRA preempt the PSA under San Diego Build-
16982 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
ing Trades Council v. Garmon, 359 U.S. 236 (1959). Sections
7 and 8 protect all employees, not just apprentices. See 29
U.S.C. §§ 157, 158 (NLRA §§ 7, 8). Because the named
apprentices continue to work in the construction industry,
they continue to enjoy the NLRA’s protections and continue
to have a cognizable interest in whether the NLRA preempts
the PSA. Their NLRA preemption claim therefore is not moot
as to them.
[7] The individual apprentices’ ERISA preemption claim,
by contrast, does depend on their status as apprentices. They
therefore lack a cognizable interest in the outcome of that
claim, and the claim is accordingly moot as to them, unless
their claim falls within the “capable of repetition, yet evading
review” exception to mootness. To establish that their claim
falls within that exception, however, the plaintiffs must dem-
onstrate that there is a “reasonable expectation” that they will
be subject to a PSA again in their capacity as apprentices. See
Murphy v. Hunt, 455 U.S. 478, 482 (1982) (quoting Weinstein
v. Bradford, 423 U.S. 147, 149 (1975)). While the defendants
have the burden to show they will not engage in the chal-
lenged conduct again, the plaintiffs have the burden to show
that they will be subject to the complained-of conduct in the
future. See Sample v. Johnson, 771 F.2d 1335, 1342 (9th Cir.
1985). The plaintiffs have not met that burden. They do not
allege that they intend to go through another apprenticeship
program for another craft, but only that they “may” do so.
Because this alleged possibility does not demonstrate a “rea-
sonable expectation” that they will be subject to a PSA as
apprentices again, we conclude that the named apprentices’
ERISA preemption claim does not fall within the “capable of
repetition, yet evading review” exception to mootness, and we
accordingly dismiss that claim as to them.
B. Sovereign Immunity
The District contends that the Eleventh Amendment entitles
it to sovereign immunity from the plaintiffs’ claims seeking
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16983
nominal damages. We conclude that the District has waived
its sovereign immunity and therefore reject its Eleventh
Amendment defense.4
[8] A state waives its Eleventh Amendment immunity if it
“unequivocally evidence[s its] intention to subject itself to the
jurisdiction of the federal court.” Hill v. Blind Indus. & Servs.
of Md., 179 F.3d 754, 758 (9th Cir. 1999). A state may waive
its sovereign immunity through “conduct that is incompatible
with an intent to preserve that immunity.” Id. We have found
that state defendants engaged in conduct “incompatible with”
an intent to preserve sovereign immunity when they raised a
sovereign immunity defense only belatedly, after extensive
proceedings on the merits. For example, in Hill, we deter-
mined that the state waived sovereign immunity when the
state did not raise the defense until the opening day of trial,
after it had filed two motions to dismiss and an answer that
did not assert the defense, consented to have a magistrate
judge try the case, conducted discovery, moved to compel dis-
covery and for sanctions, participated in a pre-trial confer-
ence, and filed trial materials. Id. at 756. Similarly, in In re
Bliemeister, 296 F.3d 858 (9th Cir. 2002), we found that the
state waived immunity when it filed a limited response, an
answer, and a motion for summary judgment; attended an oral
hearing and argued the merits; and heard the court announce
its preliminary leanings, all without raising the sovereign
immunity defense. Id. at 862.
[9] Like the defendants in Hill and Bliemeister, the District
engaged in extensive proceedings in the district court without
seeking dismissal on sovereign immunity grounds. Although
it baldly asserted in its Answer that it was “immune from lia-
bility pursuant to the provisions of the Eleventh Amendment
4
Absent a waiver, the District would be entitled to sovereign immunity
because California community college districts constitute arms of the state
entitled to sovereign immunity under the Eleventh Amendment. See Cer-
rato v. S.F. Cmty. Coll. Dist., 26 F.3d 968, 972 (9th Cir. 1994).
16984 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
of the United States Constitution,” the District litigated the
suit on the merits, participated in discovery, and filed a
motion to dismiss and a summary judgment motion without
pressing a sovereign immunity defense. Although the District
asserted its sovereign immunity in its opposition to the plain-
tiffs’ application to file an amended complaint to include a
prayer for nominal damages, it did not assert a sovereign
immunity defense in the summary judgment briefing filed
after the plaintiffs amended their complaint.5 In circumstances
like these, we deem the defendant to have made a tactical
decision to delay asserting the sovereign immunity defense.
See Bliemeister, 296 F.3d at 862. Such tactical delay “under-
mines the integrity of the judicial system[,] . . . wastes judicial
resources, burdens jurors and witnesses, and imposes substan-
tial costs upon the litigants.” Hill, 179 F.3d at 756. Having
chosen “to defend on the merits in federal court,” the District
will “be held to that choice.” See id. at 758. We accordingly
hold that the District has waived its sovereign immunity
defense.
C. Merits
Having concluded that this appeal is not moot, and that the
District has waived its sovereign immunity, we proceed to
consider the merits of the plaintiffs’ claims.
5
The District contends that it was “not required” to raise its Eleventh
Amendment defense until the plaintiffs sought retrospective damages
relief, and that the proceedings on the merits before the plaintiffs sought
that relief therefore were not inconsistent with an intent to preserve its
sovereign immunity. This argument appears to stem from an erroneous
belief that the District could not have asserted immunity from the plain-
tiffs’ claims for prospective relief. Although state officers sued in their
official capacities are immune only from suits for retrospective relief, Por-
ter v. Jones, 319 F.3d 483, 491 (9th Cir. 2003) (explaining the doctrine of
Ex parte Young, 209 U.S. 123 (1908)), state entities are immune from suit
“regardless of the nature of the relief sought,” Pennhurst State Sch. &
Hosp. v. Halderman, 465 U.S. 89, 100 (1984). As a state entity, the Dis-
trict thus could and should have asserted sovereign immunity before the
plaintiffs amended their complaint to request nominal damages.
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16985
1. ERISA and NLRA Preemption Claims
[10] Whether federal law preempts a particular state action
is fundamentally a question of congressional intent. See
Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 498
F.3d 1031, 1039-40 (9th Cir. 2007). Federal law will preempt
state laws that “interfere with, or are contrary to, federal law”
only if “that was the clear and manifest purpose of Congress.”
Id. at 1039-40 (internal quotations and citation omitted). The
so-called “market participant doctrine” offers us a presump-
tion about Congress’s purposes. In general, Congress intends
to preempt only state regulation, and not actions a state takes
as a market participant. See Bldg. & Constr. Trades Council
v. Associated Builders and Contractors of Mass./R.I., Inc.
(“Boston Harbor”), 507 U.S. 218, 227 (1993); Engine Mfrs.,
498 F.3d at 1042. This doctrine applies to claims of NLRA
and ERISA preemption. See Boston Harbor, 507 U.S. at 227
(NLRA); Associated Gen. Contractors of Am. v. Metro. Water
Dist. of S. Cal. (“MWD”), 159 F.3d 1178, 1182 (9th Cir.
1998) (ERISA). In assessing the plaintiffs’ preemption
claims, we therefore must first determine whether the District
acted as a regulator or as a market participant when it entered
into the PSA. Because we conclude that the District acted as
a market participant, the plaintiffs’ ERISA and NLRA pre-
emption claims fail at the threshold.6
[11] In general, state action falls within the market partici-
pant exception to preemption when the state entity directly
participates in the market by purchasing goods or services.
See Engine Mfrs., 498 F.3d at 1040 (describing the “single
inquiry” in market participant cases as “whether the chal-
lenged program constituted direct state participation in the
market”). But the line between non-preempted market partici-
pation and preempted regulation is not always so clear, and a
state’s direct participation in the market will not always
6
We therefore need not decide whether the NLRA or ERISA would pre-
empt the PSA if it were regulation.
16986 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
escape preemption. If a state’s direct participation in the mar-
ket is “tantamount to regulation,” the market participant doc-
trine will not exempt the state’s action from preemption. Wis.
Dep’t of Indus., Labor & Human Relations v. Gould, 475 U.S.
282, 289 (1986). Thus, in Gould, the Supreme Court held that
the NLRA preempted a state law forbidding state procurement
agents from using state funds to do business with companies
that had repeatedly violated the NLRA, even though the law
constrained only the state’s own participation in the market.
Id. at 283-84, 287. The Court explained that the state law “on
its face . . . serves plainly as a means of enforcing the
NLRA,” and that “[n]o other purpose could credibly be
ascribed.” Id. at 287. Because the law imposed a “supplemen-
tal sanction” on NLRA violations, it contravened Congress’s
intent to bar states from “providing their own regulatory or
judicial remedies for conduct prohibited or arguably prohib-
ited by the Act.” Id. at 286-89 (describing the preemption rule
of Garmon, 359 U.S. 236).
[12] In light of Gould, to determine whether a state entity’s
direct participation in the market falls within the market par-
ticipant exception to preemption, we must determine whether
the state action is simply proprietary or “tantamount to regula-
tion.” As a guide to making this determination, we have
adopted the two-prong test that the Fifth Circuit established in
Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180
F.3d 686, 693 (5th Cir. 1999). See Engine Mfrs., 498 F.3d at
1041; Olympic Pipe Line Co. v. City of Seattle, 437 F.3d 872,
881 (9th Cir. 2006). The Cardinal Towing test offers two
questions to help determine whether state action constitutes
market participation not subject to preemption:
First, does the challenged action essentially reflect
the entity’s own interest in its efficient procurement
of needed goods and services, as measured by com-
parison with the typical behavior of private parties in
similar circumstances? Second, does the narrow
scope of the challenged action defeat an inference
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16987
that its primary goal was to encourage a general pol-
icy rather than address a specific proprietary prob-
lem?
Id. As the Fifth Circuit explained, these questions “seek to
isolate a class of government interactions with the market that
are so narrowly focused, and so in keeping with the ordinary
behavior of private parties, that a regulatory impulse can be
safely ruled out.” Id.
[13] In applying this test, we have not yet conclusively set-
tled whether a state action must satisfy both prongs, or only
one, to qualify as market participation exempt from preemp-
tion. We held in Lockyer that “a state need not satisfy both
questions,” but we subsequently vacated that opinion after the
Supreme Court reversed it on other grounds. See Chamber of
Commerce v. Lockyer, 463 F.3d 1076, 1084 (9th Cir. 2006)
(en banc), rev’d on other grounds sub nom. Chamber of Com-
merce v. Brown, 128 S. Ct. 2408 (2008) and vacated by 543
F.3d 1117 (2008). Although we are not bound by our vacated
decision in Lockyer, we find its reasoning persuasive and
accordingly hold that a state action need only satisfy one of
the two Cardinal Towing prongs to qualify as market partici-
pation not subject to preemption. As we pointed out in Lock-
yer, the first Cardinal Towing question “looks to the nature
of the expenditure” and “protects comprehensive state poli-
cies with wide application from preemption, so long as the
type of state action is essentially proprietary.” Id. at 1084
(emphasis added). The second question looks to the “scope of
the expenditure” and “protects narrow spending decisions that
do not necessarily reflect a state’s interest in the efficient pro-
curement of goods or services, but that also lack the effect of
broader social regulation.” Id. (emphasis added). The Cardi-
nal Towing test thus offers two alternative ways to show that
a state action constitutes non-regulatory market participation:
(1) a state can affirmatively show that its action is proprietary
by showing that the challenged conduct reflects its interest in
efficiently procuring goods or services, or (2) it can prove a
16988 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
negative—that the action is not regulatory—by pointing to the
narrow scope of the challenged action. We see no reason to
require a state to show both that its action is proprietary and
that the action is not regulatory.
In any event, we conclude that the PSA challenged here
satisfies both prongs of the Cardinal Towing test and accord-
ingly is not subject to preemption by the NLRA and ERISA.
a. Efficient procurement of goods and services, as measured
by comparison to private market behavior
The plaintiffs contend that the PSA does not meet the first
Cardinal Towing prong both because it does not reflect the
District’s interest in “efficient procurement” of goods and ser-
vices and because it is not comparable to private market
behavior. In particular, they first contend that a state entity
can have no interest in “efficient procurement” when it spends
federal funds and that the Agreement as a whole simply pays
off political supporters without actually providing the District
with any benefits in terms of “efficient procurement.” Second,
they contend that no private party would have entered into an
agreement providing so few benefits and that no private party
in the District’s position could have lawfully entered into such
an agreement.
These contentions rely on too narrow an understanding of
what counts as an interest in “efficient procurement” and of
how similar a challenged state action must be to private mar-
ket behavior to qualify as non-preempted market participation
under Cardinal Towing’s first prong. Even if the plaintiffs’
contentions were true, they would not render the District’s
direct participation in the market essentially regulatory. Under
a proper understanding of Cardinal Towing’s first prong, we
conclude that the PSA reflects the District’s interest in the
efficient procurement of goods and services, as measured by
comparison to typical private market behavior.
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16989
i. Efficient procurement
[14] At the outset, we reject the plaintiffs’ suggestion that
the PSA cannot reflect the District’s interest in “efficient pro-
curement” to the extent it applies to a construction project
funded in part by federal monies. In support of this conten-
tion, the plaintiffs point to the Second Circuit’s decision in
Healthcare Association of New York State, Inc. v. Pataki, 471
F.3d 87 (2d Cir. 2006), which held that a state regulation bar-
ring the use of state-appropriated funds to encourage or dis-
courage union organizing was preempted to the extent it
applied to federal funds that merely passed through the state.
Id. at 90-91, 109. Contrary to the plaintiffs’ reading, however,
Pataki does not suggest that a state can never have a propri-
etary interest in the efficient procurement of goods and ser-
vices when it uses federal money. Rather, Pataki holds that,
although a state has a proprietary interest in “sav[ing] money”
and “getting what [it] paid for” with its own funds, it does not
have a similar interest in saving another government entity’s
money. Id. at 109. Here, the District does not claim a propri-
etary interest in “getting what [it] paid for,” but rather in com-
pleting construction projects without labor disruptions. We
have no doubt that this is a legitimate interest in “efficient
procurement” whether the state agency expends its own funds
or funds that the federal government has given it.
The plaintiffs further contend that the PSA does not
advance an interest in efficient procurement because it pre-
sents several downside risks while offering no benefits in
terms of costs, labor availability, or timeliness for the con-
struction. Whether the PSA’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 anal-
ysis, Engine Mfrs., 498 F.3d at 1040, and we have no reason
to think that Congress intended to allow beneficial state con-
16990 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
tracts while preempting similar contracts in which the state
got a bad deal.
Moreover, we have made clear that “efficient procurement”
under Cardinal Towing’s first prong does not necessarily
mean “cheap” procurement, but rather “procurement that
serves the state’s purposes.” Engine Mfrs., 498 F.3d at 1046.
Thus, in Engine Manufacturers, we upheld as lawful market
participation a state rule requiring state and local government
entities to ensure that any new street sweepers, garbage
trucks, and other vehicles that they procured met specified
emissions standards. Id. at 1035, 1048. Even though the state
entity pursued environmental, as opposed to economic, goals
through its participation in the market, the market participant
doctrine still applied.
Gould, however, necessarily places limits on what can
qualify as an interest in “efficient procurement” under Cardi-
nal Towing’s first prong. Although “efficient procurement”
means “procurement that serves the state’s purposes,” id.,
pursuit of some purposes will make a state’s participation in
the market “tantamount to regulation.” Gould, 475 U.S. at
289. In Gould, the state enacted a statute forbidding govern-
ment procurement agencies from doing any business with
labor law violators. Id. at 283-84. Despite the state’s assertion
that it was acting as a market participant, the Supreme Court
concluded that the law “unambiguously” acted as a “supple-
mental sanction” for violations of the NLRA, and was pre-
empted. Id. at 288. Gould establishes that, where the state
seeks to affect private parties’ conduct unrelated to the perfor-
mance of contractual obligations to the state, the state’s direct
participation in the market does not reflect its interest in “effi-
cient procurement” of goods and services. See id. at 189
(explaining that “[i]t is the conduct being regulated . . . that
is the proper focus of concern” (internal quotations and cita-
tion omitted)); see also Boston Harbor, 507 U.S. 228-29
(describing the statute in Gould as “address[ing] employer
conduct unrelated to the employer’s performance of contrac-
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16991
tual obligations to the state”); see also Bldg. and Constr.
Trades Dep’t, AFL-CIO v. Allbaugh, 295 F.3d 28, 36 (D.C.
Cir. 2002) (“A condition that the Government imposes in
awarding a contract or in funding a project is regulatory only
when, as the Supreme Court explained in Boston Harbor, it
‘addresse[s] employer conduct unrelated to the employer’s
performance of contractual obligations to the [Govern-
ment].’ ” (alterations in original) (quoting Boston Harbor, 507
U.S. at 228-29)).
[15] Unlike the regulation in Gould, nothing on the face of
the PSA indicates that it serves purely regulatory purposes
unrelated to the performance of contractual obligations to the
state. The PSA does not reward or sanction private parties for
their conduct in the private market, but rather addresses only
how construction contractors and subcontractors will perform
work on the District’s projects. Plaintiffs contend that the
PSA’s primary purpose was to reward the unions that sup-
ported the Measure E campaign. Yet, the District intended for
the PSA to serve legitimate proprietary goals, including con-
taining costs, optimizing productivity, and boosting the econ-
omy. Private parties undertaking large construction projects
commonly enter into pre-hire project labor agreements like
the PSA challenged here. Whether or not plaintiffs are correct
that the District had ulterior motives in adopting the PSA, we
are quite certain that Congress did not intend for the NLRA’s
or ERISA’s preemptive scope to turn on state officials’ sub-
jective reasons for adopting a regulation or agreement. Cf. N.
Ill. Chapter of Associated Builders and Contractors, Inc. v.
Lavin, 431 F.3d 1004, 1007 (7th Cir. 2005) (“Federal preemp-
tion doctrine evaluates what legislation does, not why legisla-
tors voted for it or what political coalition led to its
enactment.” (emphasis in original)).
ii. Comparison to private market behavior
The plaintiffs next contend that the PSA cannot satisfy
Cardinal Towing’s first prong because it is not sufficiently
16992 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
comparable to private market behavior. In particular, they
contend that no private party would have entered into a proj-
ect labor agreement providing so few benefits and that no pri-
vate party in the District’s position could have lawfully
entered into such an agreement. However, even if true, those
considerations would not preclude the PSA from being suffi-
ciently analogous to private market behavior to satisfy Cardi-
nal Towing’s first prong.
First, the plaintiffs’ contention that no private party would
have entered into a deal with so few benefits again reflects its
misunderstanding that Congress intended to allow state mar-
ket participation to escape preemption only where the state
gets a good deal. As explained above, whether the PSA was
a good deal for the District does not bear on whether the
Agreement is regulatory or proprietary. Indeed, we cannot
credibly ascribe to Congress an intent to use preemption to
impose economic rationality on state contracting decisions.
Second, the plaintiffs also miss the mark in contending that
a private purchaser in the District’s position could not have
lawfully entered into the PSA because the NLRA bars such
pre-hire agreements unless the contracting party is an “em-
ployer engaged primarily in the building and construction
industry,” which a school district is not.7 See 29 U.S.C.
§ 158(f). This provision of the NLRA does not mean that the
District’s entry into the PSA is not market participation; it
simply means that the District can participate in the market in
a way in which private parties cannot. The NLRA itself
creates this disparity by explicitly excluding states and their
political subdivisions from the NLRA’s prohibitions. See id.
§ 152(2) (“the term ‘employer’ . . . shall not include . . . any
State or political subdivision thereof”); § 158(a) (providing
7
The parties dispute whether a private owner-developer could lawfully
enter into an agreement like the PSA here. Because we conclude that the
legality of analogous private party conduct is not relevant to the question
before us, we need not resolve this dispute.
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16993
that “[i]t shall be an unfair labor practice for an employer” to
engage in certain enumerated actions (emphasis added)).
Were we to hold, as the plaintiffs urge, that a state’s direct
participation in the market becomes “regulation” subject to
preemption whenever a private party could not lawfully par-
ticipate in the market in the same way, we would effectively
subject state employers to the NLRA’s proscriptions. This
would conflict with the clear congressional intent to exempt
state employers from the NLRA’s reach.
Contrary to the plaintiffs’ suggestion, the Supreme Court’s
statement in Boston Harbor that Congress does not preempt
state proprietary action “where analogous private conduct
would be permitted” does not suggest otherwise. See Boston
Harbor, 507 U.S. at 231-32. In Boston Harbor, the Court
upheld as lawful market participation a state agency’s require-
ment that all contractors working on the cleanup of Boston
Harbor agree to a project labor agreement that the agency’s
construction management company had negotiated with a
labor union. Id. at 221-22, 232. The agreement in Boston Har-
bor, unlike the PSA here, fell squarely within NLRA provi-
sions exempting construction industry employers from the
prohibition of pre-hire agreements because the state agency’s
project management company, rather than the agency itself,
entered into the agreement with the union. Id. at 221-22. But
the Court in no way suggested that the fact that the project
manager, rather than the agency, entered into the agreement
was dispositive. To the contrary, the basis for the Court’s
holding was Congress’s clear intent to “accommodate condi-
tions specific to [the construction] industry,” including the
short-term nature of employment that impeded post-hire col-
lective bargaining and the contractor’s need for predictable
costs and a steady labor supply. Id. at 231. In light of the
“general goals behind the passage of [these provisions],” the
Court concluded that Congress did not intend to preempt state
entities from adopting such agreements for state construction
projects, while allowing such agreements in the construction
industry generally. Id. at 231-32.
16994 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
Indeed, the identity of the parties who signed the project
labor agreement in Boston Harbor only formally distinguishes
that agreement from the PSA here. The agreements’ practical
effects are the same. Here, as in Boston Harbor, a pre-hire
agreement binds all contractors and subcontractors working
on covered projects. Moreover, the agency in Boston Harbor
“approved and adopted” the labor agreement, which the proj-
ect manager had entered into “on [the agency’s] behalf,” and,
like the District, required all bidders to submit to the agree-
ment as a condition of accepting work on the project. Id. at
222. Boston Harbor makes clear that congressional intent
controls our preemption analysis, see id. at 224, 231, and we
find no indication in the NLRA that Congress intended to
allow state entities to adopt project labor agreements only if
they use a construction-industry middleman exempt from the
NLRA’s proscriptions.
[16] In sum, we hold that the District’s PSA reflects its
interest in the efficient procurement of goods and services, as
measured by comparison to typical private market behavior.
It therefore qualifies as market participation exempt from pre-
emption under Cardinal Towing’s first prong.
b. Narrow scope
We further conclude that the PSA challenged here is suffi-
ciently narrow in scope that it qualifies as non-preempted
market participation under Cardinal Towing’s second prong.
Despite covering many individual construction projects, the
PSA limited its reach to construction projects costing over
$200,000 that were paid for with the $337 million of Measure
E funds and that were initiated during the three-year term of
the agreement. This is undoubtedly narrower than the agree-
ment approved in Boston Harbor, which covered $6.1 billion
of spending over ten years. Id. at 221. Although the agree-
ment approved in Boston Harbor covered the “one particular
job” of cleaning up Boston Harbor, that one job almost cer-
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16995
tainly could have been characterized as many component
projects. Boston Harbor, 507 U.S. at 232. Likewise, here, the
PSA could be characterized as covering the single project of
improving campus facilities.
Moreover, the PSA’s substantive scope is very similar to
the Boston Harbor agreement’s. See id. at 232. Like the Dis-
trict’s PSA, the Boston Harbor agreement recognized one
exclusive bargaining agent, specified dispute-resolution
mechanisms, required all employees to become union mem-
bers within seven days of their employment, required use of
the union’s hiring halls to supply the labor force, prohibited
strikes for the term of the agreement, bound all contractors
and subcontractors to the agreement, and prescribed the bene-
fits that workers would receive for the duration of the project.
Id. at 221-22; see also Brief for Petitioners at 7, Boston Har-
bor, 507 U.S. 218 (1993) (No. 91-261), 1992 WL 511837.
[17] The District’s Agreement does, however, contain one
set of provisions that the Boston Harbor agreement did not
appear to have: provisions requiring the parties to maximize
work opportunities for the District’s residents and for
minority- and women-owned businesses. Specifically, the
Agreement required signatory unions to establish apprentice-
ship programs for District residents, to encourage District res-
idents to enter those programs, and to encourage the
utilization of District residents on the projects covered by the
PSA. These provisions do not render the PSA too broad to
qualify as market participation under Cardinal Towing’s “nar-
row scope” test; they are simply part of the consideration that
the unions provided in exchange for the benefits they received
under the Agreement. This conclusion accords with the
Supreme Court’s decision in White v. Massachusetts Council
of Construction Employers, Inc., 460 U.S. 204 (1983), that a
city acted as a market participant not subject to the dormant
Commerce Clause when it adopted an executive order requir-
ing that certain percentages of workers on city-funded public
16996 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
construction projects be city residents, minorities, and
women. Id. at 206, 214.
[18] We therefore conclude that the District’s PSA is suffi-
ciently narrow to qualify as market participation exempt from
preemption under Cardinal Towing’s second prong. Because
entering into the PSA qualifies as market participation—
under both prongs of the Cardinal Towing test—it is not sub-
ject to preemption by ERISA or the NLRA. We accordingly
affirm the grant of summary judgment for the defendants on
the preemption claims.
2. Substantive and Procedural Due Process Claims
The plaintiffs contend that the PSA violated their rights to
substantive and procedural due process by depriving them of
liberty and property interests protected by the Fourteenth
Amendment. To succeed on a substantive or procedural due
process claim, the plaintiffs must first establish that they were
deprived of an interest protected by the Due Process Clause.
See Shanks v. Dressely, 540 F.3d 1082, 1087 (9th Cir. 2008)
(substantive due process); Kildare v. Saenz, 325 F.3d 1078,
1085 (9th Cir. 2003) (procedural due process). We conclude
that the plaintiffs cannot make this threshold showing and
accordingly affirm the grant of summary judgment to the
defendants on the due process claims.
a. Claimed Liberty Interest
[19] The plaintiffs first contend that the PSA deprived
them of their protected liberty interest in pursuing careers as
electricians by “categorically disqualif[ying] them and render-
[ing] them ineligible for virtually any Rancho Santiago con-
struction work for three years.” The Due Process Clause does
indeed protect the plaintiffs’ liberty interest in pursuing their
careers as electricians. See Bd. of Regents v. Roth, 408 U.S.
564, 573 (1972) (holding that the Due Process Clause protects
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16997
the right to “engage in the common occupations of life”). The
PSA, however, did not deprive the plaintiffs of that interest.
[20] The Supreme Court made clear in Board of Regents
v. Roth that merely declining to rehire someone does not
infringe on his liberty interest in pursuing a career because the
person “remains free as before to seek another” job. Id. at
575. Rather, the government violates this liberty interest only
when it “foreclose[s the person’s] freedom to take advantage
of other employment opportunities,” for instance by barring
him or her from “all other public employment.” Id. at 573-74.
By extension, then, declining to hire someone in the first
instance does not infringe any protected liberty interest so
long as the decision does not bar the person from all public
employment or otherwise foreclose him from seeking other
job opportunities.
[21] The plaintiffs contend that the PSA violated their lib-
erty by effectively barring them from working on a significant
portion of the District’s construction projects for three years.
This contention fails for two reasons. First, the plaintiffs were
not excluded from all public employment on the District’s
projects; they still had the opportunity to work on non-
Measure E-funded projects and on Measure E projects costing
less than $200,000. Second, and more importantly, the plain-
tiffs were not actually excluded from working on the projects
covered by the PSA: the non-union apprentices remained free
to join a union apprenticeship program qualified to provide
workers for those projects. The PSA therefore did not violate
the plaintiffs’ liberty interest in pursuing their careers as elec-
tricians.
b. Claimed Property Interests
The plaintiffs also contend that the PSA deprived them of
three protected property interests: (1) their interest in remain-
ing eligible to work on the District’s construction projects, (2)
their interest in a state-funded education, and (3) their interest
16998 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
in the credits, job hours, and training they had earned through
their non-union apprenticeship programs. We conclude that
the PSA did not deprive the plaintiffs of any such protected
property interests.
First, the plaintiffs have not even made the threshold show-
ing that the Due Process Clause protects their interest in
remaining eligible to work on the District’s construction proj-
ects. Protected property interests “are not created by the Con-
stitution[, but r]ather . . . they are created and their dimensions
are defined by existing rules or understandings that stem from
an independent source such as state law.” Roth, 408 U.S. at
577. State law creates a property interest protected by the Due
Process Clause where it creates a “legitimate claim of entitle-
ment” to a particular benefit. Id. A legitimate claim of entitle-
ment “is determined largely by the language of the statute and
the extent to which the entitlement is couched in mandatory
terms.” Wedges/Ledges of Cal., Inc. v. Phoenix, 24 F.3d 56,
62 (9th Cir. 1994) (quoting Ass’n of Orange Co. Deputy Sher-
iffs v. Gates, 716 F.2d 733, 734 (9th Cir. 1983)). Although the
plaintiffs contend, without explanation, that the “net effect” of
a variety of California laws confers on them an entitlement to
remain eligible for work on the District’s projects, they point
to no law that even comes close to mandating that non-union
apprentices remain eligible for all construction projects. We
therefore conclude that the plaintiffs have no protected prop-
erty interest in remaining eligible to work on the District’s
projects.
Second, even if California law confers a protected property
interest in a state-funded education, the plaintiffs do not
explain how the PSA deprived them of that interest. Indeed,
the plaintiffs clearly could not show that they suffered a depri-
vation of their purported right to an education, as they have
all graduated. We accordingly reject this claim.
Third, even if California law creates protected property
interests in the credits, job hours, and training that the named
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 16999
apprentices earned through their non-union apprenticeship
programs, the PSA did not deprive them of those interests.
The PSA did not kick the plaintiffs out of their apprenticeship
programs or strip them of their credits and training hours. At
most, the PSA required the plaintiffs to put some of their
credits and training hours in jeopardy if they chose to transfer
to another apprenticeship program so that they could work on
PSA-covered projects. This loss would have resulted from the
apprentices’ choice to transfer programs, not from the PSA
itself.
[22] In sum, the PSA did not deprive the plaintiffs of any
liberty or property interest protected by the Due Process
Clause. We accordingly affirm the grant of summary judg-
ment to the defendants on the plaintiffs’ due process claims.
3. Equal Protection Claim
Finally, the plaintiffs contend that the PSA violated their
rights to equal protection because it treated them differently
than union-affiliated apprentices. The parties agree, as they
must, that rational basis scrutiny applies to this claim.8 See
City of New Orleans v. Dukes, 427 U.S. 297, 303 (1976)
(explaining that rational basis scrutiny applies to equal protec-
tion claims “[u]nless a classification trammels fundamental
personal rights or is drawn upon inherently suspect distinc-
tions such as race, religion, or alienage”). State action will
survive rational basis scrutiny if it is “rationally related to a
legitimate state interest.” City of Cleburne v. Cleburne Living
Ctr., 473 U.S. 432, 440 (1985). Under rational basis review,
the state actor “has no obligation to produce evidence to sus-
8
The District contends that the PSA does not constitute state action sub-
ject to the Equal Protection Clause because it constitutes market participa-
tion, not regulation. The market participation doctrine, however, applies
only to the Commerce Clause and preemption. See Engine Mfrs., 498 F.3d
at 1040. The District offers no authority suggesting that states need not
abide by the Equal Protection Clause when they are acting as market par-
ticipants.
17000 JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE
tain the rationality of a statutory classification; rather, the bur-
den is on the one attacking the legislative arrangement to
negative every conceivable basis which might support it.”
Kahawaiolaa v. Norton, 386 F.3d 1271, 1280 (9th Cir. 2004)
(internal quotations, alteration, and citation omitted).
The plaintiffs have not met this burden. The plaintiffs con-
tend that the PSA fails the rational basis test because it was
not rationally related to the District’s claimed legitimate inter-
est in avoiding labor disruptions. In support of this contention,
they point to evidence that the District did not analyze the
PSA’s “true cost impact.” This contention misses the mark.
First, the Equal Protection Clause “allows the States wide lati-
tude” with economic decisions, and “presumes that even
improvident decisions will eventually be rectified by the dem-
ocratic processes.” City of Cleburne, 473 U.S. at 440 (internal
citations omitted). Thus, even if the District’s purported fail-
ure to fully analyze the PSA’s costs resulted in an improvi-
dent decision, the Equal Protection Clause will not invalidate
it. Second, to survive rational basis scrutiny, a state action
need not actually further a legitimate interest; it is enough that
the governing body “could have rationally decided that” the
action would further that interest. See Minnesota v. Clover
Leaf Creamery Co., 449 U.S. 456, 466 (1981) (emphasis in
original). Here, even if the PSA did cost the District more
than it was worth, the District could have rationally believed
that the PSA would promote its legitimate interest in avoiding
labor disruptions. Indeed, the PSA plainly contains provisions
that serve that goal by prohibiting work stoppages, strikes,
and other disruptions.
[23] Because we conclude that the PSA was rationally
related to the District’s legitimate interest in preventing labor
disruptions, we affirm the grant of summary judgment to the
defendants on the plaintiffs’ Equal Protection Claim.
IV. CONCLUSION
In sum, we conclude that this appeal is not moot and that
the District has waived any claim to sovereign immunity.
JOHNSON v. RANCHO SANTIAGO COMMUNITY COLLEGE 17001
Because we conclude that the PSA falls within the market
participant exception to preemption, we affirm the grant of
summary judgment to the defendants on the ERISA and
NLRA preemption claims. We also affirm the grant of sum-
mary judgment to the defendants on the plaintiffs’ substantive
and procedural due process claims because the plaintiffs have
not shown that the District deprived them of any constitution-
ally protected liberty or property interest. Finally, we con-
clude that the PSA was rationally related to the District’s
legitimate interest in avoiding labor disruptions and accord-
ingly affirm the grant of summary judgment to the defendants
on the Equal Protection claim.
DISMISSED in part; AFFIRMED in part.