Judge Motz, a Reagan appointee, has struck down Maryland's infamous "Wal-Mart Law," which singled out Wal-Mart and required it to spend at least 8% of its payroll on health benefits.  Wal-Mart Ruling Confirms Importance of Conservative Judges, but Battle Continues

Still think that appointment of conservative judges doesn't make a difference? Or that elections don't matter? 

U.S. District Judge J. Frederick Motz and Maryland Governor Robert Ehrlich, Jr. prove otherwise. 

Judge Motz, a Reagan appointee, has struck down Maryland's infamous "Wal-Mart Law," which singled out Wal-Mart and required it to spend at least 8% of its payroll on health benefits. 

Pro-business Republican Governor Ehrlich had sensibly vetoed the law, deceptively named the Fair Share Health Care Fund Act, because of its chilling effect on Maryland employers and consumer choice.  The overwhelmingly Democratic legislature, however, overrode his veto in January.  Immediately afterward, the AFL-CIO and anti-Wal-Mart groups WakeUpWalMart.com and Wal-Mart Watch saw this as their opportunity to launch similar laws across the country. 

The Retail Industry Leaders Association (RILA), however, sued in federal court on the basis that the law violates ERISA, the 1974 federal law that harmonizes interstate employee benefits and permits employers to maintain uniform health care plans and administration across states. 

Without ERISA, employers would face a spaghetti-bowl of conflicting state benefits laws, thereby raising administrative costs and reducing resources left to spend on actual employee health benefits. 

Judge Motz agreed, ruling that Maryland's statute defies the federal ERISA system, and granted summary judgment.  According to Judge Motz, the Maryland scheme "violates ERISA's fundamental purpose of permitting multistate employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration." 

Judge Motz's ruling thus stymies powerful labor unions and liberal health care activists who saw the Maryland law as a model to push across the country.  Such activists alleged that a series of Supreme Court opinions provided latitude to target Wal-Mart, but Judge Motz read the case law differently. 

Accordingly, this decision again demonstrates the critical importance of confirming conservative judges like Judge Motz, who interpret the law rather than contort it in pursuit of an activist agenda. 

Individual states remain free to regulate health coverage within reasonable limits, but they can't simply impose socialized medicine schemes upon demonized employers like Wal-Mart.  As stated by RILA President Sandy Kennedy, "the decision sends a clear signal that employer health plans are governed by federal law, not a patchwork of state and local laws.  It also sends a clear message that similar bills under consideration in other states and municipalities violate federal law as well." 

This battle, however, is far from over.  Liberal anti-business advocates continue to target Wal-Mart and other employers in their nationwide attempt to impose socialized medicine at the expense of employees and lower-income consumers.  In the words of Nu Wexler, spokesperson for Wal-Mart Watch, "today's decision is not the final word." 

The Maryland Attorney General's office reports that it will likely appeal the ruling under pressure by the labor unions and activists.  Democratic Maryland Senate President Thomas V. Mike Miller, Jr. went so far as to label this matter "good versus evil," saying that "we're not going to let a big Arkansas corporation, protected by their contributions to the Republican Party, avoid their basic responsibility to the citizens of Maryland." 

There you have it – where reasonable people see an employer and provider of competitively-priced products, liberal politicians and activists merely see some "big Arkansas corporation" that they can demonize in pursuit of partisan political points.  Yet they never seem to learn the cause-and-effect when employers flee their jurisdictions for more hospitable areas. 

In Illinois, Chicago's City Council this week voted 35-14 to force large retailers like Wal-Mart and Home Depot to raise their minimum wage to $10 per hour, and provide an additional $3 per hour in health care benefits by 2010.  Even Mayor Richard Daley argued that the ordinance will chase employers from his city toward more employer-friendly suburbs.  In Mayor Daley's words, "this creates an incentive to locate these stores outside Chicago, so we are losing out on jobs and sales-tax revenue." 

As noted by Ms. Kennedy of RILA, Chicago's ordinance "is a clear disincentive for more than a dozen retailers impacted by this ordinance to locate or expand their operations in the city of Chicago."  Similarly, 37th Ward Alderman Emma Mitts, who recognizes the catastrophic effect of chasing low-cost retailers like Wal-Mart away from cost-conscious constituents, opposed the bill, wondering, "why would we go through all of that when we can be bringing in jobs?" 

A good question indeed.  Unfortunately, poor citizens who would benefit most from employment opportunities and low prices offered by Wal-Mart and similar retailers once again must pay the price. 

Indeed, Chicago remarkably has no Wal-Mart within its borders despite being the nation's third-largest city, and one scheduled to open in the impoverished 37th Ward is now in jeopardy. 

Similar battles rage across the country.  Proposed laws that mimic the Maryland legislation have been introduced in three dozen states, and RILA has sued to overturn another such law enacted in Suffolk County, New York. 

Congress can improve this crisis by finally passing legislation that provides smaller employers with ERISA-like protections, allowing them to collectively join Association Health Plans.  Another Congressional proposal would permit citizens of one state to purchase health coverage from another state, thereby lowering insurance costs and increasing coverage for currently uninsured individuals. 

More fundamentally, these events illustrate once again the critical importance of confirming conservative judges like Judge Motz and electing conservative leaders who support consumer and business freedom. 

July 28, 2006
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