Bench Memos

Law & the Courts

Loopy Eleventh Circuit Ruling Against State Minimum-Wage Law

Two days ago, an Eleventh Circuit panel ruled (in Lewis v. Governor of Alabama) that plaintiffs challenging Alabama’s Minimum Wage Act “have stated a plausible claim” that the law “had the purpose and effect of depriving Birmingham’s black citizens equal economic opportunities on the basis of race, in violation of the Equal Protection Clause.” The panel’s reasoning strikes me as farfetched, with radical implications for future judicial intrusion on the legislative processes.

Here’s a quick summary of the case’s background: In August 2015, the Birmingham city council adopted its own minimum-wage ordinance, with the minimum wage rising to $8.50/hour in July 2016 and to $10.10/hour in 2017. In February 2016, the Alabama legislature began moving quickly on a bill that would displace the ability of Alabama cities to set their own minimum wages. In response, the Birmingham city council accelerated the effective date of its $10.10 minimum wage to February 24, 2016. On February 25, the Alabama legislature enacted, and the governor signed, the Minimum Wage Act, thus voiding Birmingham’s wage increase after one day of operation.

Plaintiffs—workers in Birmingham whose hourly wages increased under from the city ordinance—sued state officials, alleging (among other things) that the state law purposefully discriminated against Birmingham’s black citizens, in violation of the Equal Protection Clause, by denying them economic opportunities on account of their race. The district court granted defendants’ motion to dismiss.

On appeal, the Eleventh Circuit panel reversed. (See pp. 18-25.) The panel explained that in order to prevail on an Equal Protection challenge to a facially neutral law, plaintiffs must prove both discriminatory impact and discriminatory purpose. In the particular context of defeating defendants’ motion to dismiss, the plaintiffs in this case had to have alleged facts that would plausibly support a showing of discriminatory impact and discriminatory purpose.

On discriminatory impact, the panel stated (based, I gather, on the allegations in the complaint) that the state law denied 37% of Birmingham’s black wage earners a higher wage, compared to only 27% of white wage earners. That disparity, it said, sufficed to demonstrate a discriminatory impact.

On discriminatory purpose, the panel determined that a “sensitive inquiry into the direct and circumstantial evidence leads us to conclude” that plaintiffs have “alleged facts plausibly supporting a conclusion that the Minimum Wage Act was enacted with a discriminatory purpose.” Here are its key paragraphs (citations omitted; brackets in opinion):

The plaintiffs’ amended complaint presents detailed factual allegations which go to the heart of multiple Arlington Heights [v. Metropolitan Housing Corp. (1977)] considerations, including the disproportionate effect of the Minimum Wage Act on Birmingham’s poorest black residents; the rushed, reactionary, and racially polarized nature of the legislative process; and Alabama’s historical use of state power to deny local black majorities authority over economic decision-making. The Minimum Wage Act responded directly to the legislative efforts of the majority-black Birmingham City Council, which represents more black citizens (and more black citizens living in poverty) than any other city in Alabama. The Act swiftly nullified efforts of those Birmingham City Council members to benefit their majority-black constituents even though the Alabama legislature had previously “failed to take any action to establish a statewide minimum wage law and had [ ] been indifferent to efforts to establish such a law.” The Act was introduced by a white representative from Alabama’s least diverse area, with the help of fifty-two other white sponsors, and was objected to by all black members of the House and Senate. And it was accelerated through the legislative process in sixteen days with little or no opportunity for public comment or debate. These facts plausibly imply discriminatory motivations were at play.

Furthermore, the plaintiffs put forth extensive evidence suggesting that the Minimum Wage Act reflects Alabama’s longstanding history “of official actions taken for invidious purposes.” Rooted into the foundations of the state’s 1901 Constitution, Alabama’s “deep and troubled history of racial discrimination” has consistently impeded the efforts of its black citizens to achieve social and economic equality. Although the defendants question the relevance of this history, we have repeatedly reaffirmed its importance when determining whether neutral laws may nonetheless bear discriminatory purposes. Here, the plaintiffs allege that the circumstances of the Minimum Wage Act reflect a motivation consistent with Alabama’s many historical “barriers [erected] to keep black persons from full and equal participation in the social, economic, and political life of the state.”

Some comments:

1. As phrases like “have stated a plausible claim” and “alleged facts plausibly supporting” indicate, the panel, as a formal matter, merely reversed the district court’s order granting defendants’ motion to dismiss.* I would be open to a carefully crafted argument that the district court shouldn’t have granted the defendants’ motion. But the panel’s analysis seems to dictate that it would draw the same conclusions on a motion by the defendants for summary judgment.**

2. On the question of discriminatory impact: On what basis are we supposed to accept that a mere ten percentage difference in the percentage of affected black workers versus white workers suffices to establish discriminatory impact? If ten percent is enough, how about five percent? Or two percent? How draw the line? The panel has nothing to say on this essential matter.

And why is the immediate impact the sole measure? Basic economics would likewise suggest that a higher minimum wage would have a disproportionate impact on job loss and on loss of entry-level job opportunities for black workers in Birmingham. (That’s the obvious flip side of black workers accounting for a disproportionate share of minimum-wage earners.) How are judges capable of measuring the trade-offs?

3. On the question of discriminatory purpose:

The panel first cites the 10% disparity in impact as evidence of discriminatory purpose. But surely this inference is feeble at best. How sensible is it to imagine that state legislators lowered the wage of 27% of white wage earners in order to lower the wage of 37% of black wage earners?

The panel then asserts the “rushed, reactionary, and racially polarized nature of the legislative process.”

As to “rushed”: Are we really going to have judges deciding how long the legislative process ought to take? Why is 16 days too fast for something as simple as a uniform state law on the minimum wage? If it had taken 30 days, or 45, are we really supposed to imagine that the panel would have viewed things differently?

As to “reactionary”: I take this to be the panel’s summary of its objection that the Minimum Wage Act “responded directly” to the actions of the Birmingham city council. Why can’t a state legislature respond directly to what is going on in the state? If legislators support a uniform minimum wage in the state, why should it be a surprise that they are spurred to action by a threat to that uniformity?

As to “racially polarized”: The panel finds of special interest the race of the legislators and of the members of the Birmingham city council. But it never stops to consider whether they divide along the same lines on political ideology or economic policy.

In short, I don’t see how these facts “plausibly imply discriminatory motivations were at play.”

I also don’t see how Alabama’s “longstanding history ‘of official actions taken for invidious purposes’” should be deemed to taint the legislature’s action here. Set aside that it’s highly contestable whether the net effect of a higher minimum wage is to help or hinder blacks. (You’re not helped by a higher minimum wage if you lose your job, or are deprived of job opportunities, as a result.) On what basis can the motivations of a different set of legislators 100 years ago, or 50 years ago, or 10 years ago, be imputed to those who voted for the Minimum Wage Act?

* A note for non-litigators: The district court granted defendants’ motion to dismiss the complaint for failure to state a claim on which relief can be granted—a so-called 12(b)(6) motion. A 12(b)(6) motion differs from a summary-judgment motion. When a defendant files a 12(b)(6) motion, it is arguing that the complaint on its face fails to set forth a proper claim. In deciding the 12(b)(6) motion, the judge will assume, for purposes of the motion, that the facts alleged in the complaint are true. By contrast, on a summary-judgment motion, the judge will decide whether there are any factual issues that are genuinely in dispute; if there are, the judge will deny the summary-judgment motion. The bottom line is that it’s usually much easier for a plaintiff to defeat a defendant’s 12(b)(6) motion than it is to defeat a defendant’s summary-judgment motion.

** [Update:] A Twitter commenter faults me for not noting that the panel left open the possibility that defendants might still prevail by proving that the same law would have been enacted for a legitimate reason (in other words, that the supposed discriminatory purpose was inconsequential). But beyond the fact that that avenue would seem extremely narrow, my limited point in the text here is that the panel’s analysis seems to dictate that it would deny a motion by defendants for summary judgment. (Surely no one imagines that defendants could win at the summary-judgment stage on the avenue that the panel leaves open.)

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