COMMONWEALTH OF KENTUCKY COURT OF APPEALS NO. 2015-CA-000996 KENTUCKY RESTAURANTASSOCIATION, INC., ET AL PLAINTIFFS v. APPELLEES’ RESPONSE TO THE APPELLANT’S MOTION FOR EMERGENCY RELIEF PURSUANT TO CR 65.08(7) LOUISVILLE/JEFFERSON COUNTY APPELLEES METRO GOVERNMENT se ee se Her Louisville/Jefferson County Metro Government (“Appellee”), by counsel, files its Response to the Appellant's motion for emergency relief pursuant to CR 65.08(7) to stay the Jefferson Circuit Court's Order granting the Appellee’s Motion for Judgment on the Pleadings. Appellee intends to file a separate response to the Appellants’ underlying Motion for Intermediate Relief as authorized by CR 65.08(5). Appellee respectfully states as follows regarding Appellant's motion for emergency relief under CR 65.08(7) FACTUAL AND PROCEDURAL HISTORY On December 18, 2014 a majority of Louisville Metro Council members voted in favor of an ordinance to increase the minimum wage. (See 0-470-14, hereinafter “the Minimum Wage Ordinance”). Louisville Metro Mayor Greg Fischer signed the Minimum Wage Ordinance into law on January 2, 2015 with an immediate effective date. The Minimum Wage Ordinance establishes an annual increase in the minimum wage with the first scheduled increase to occur on July 1, 2015 in the amount of fifty cents. The next two increases in minimum wage are scheduled to take place on July 1, 2016 and July 1, 2017 in the amounts of fifty cents and seventy-five cents, respectively, The Minimum. 1‘Wage Ordinance then establishes an annual increase in minimum wage no more than 3% per year as measured by the consumer price index. Appellants detail and attach the pleadings relating to the motions for declaratory judgment. In brief, both parties filed motions for judgment on the pleadings. On June 29, 2015, Jefferson Circuit Court Judge McDonald-Burkman issued the attached Order ville Metro’s motion, and ruled that Louisville Metro's Minimum Wage granting Lot Ordinance is “lawful and enforceable”. At the same time, Judge McDonald-Burkman denied Appellants’ motion for judgment on the pleadings and injunctive relief. Rather than seeking emergency relief with Jefferson Circuit Court, as envisioned under the rules, Appellants move for emergency relief from the Court of Appeals. Appellants claim it is “impractical under the circumstances” to seek injunctive relief from Jefferson Circuit Court. An adverse ruling from Circuit Court is not a sufficient reason of “impracticality” under the rules. The impending “effective date” for the increase in minimum wage is also an insignificant reason to bypass the trial court, Appellants have been aware of the July 1, 2015 deadline since the Minimum Wage Ordinance was passed by Louisville Metro Council on December 18, 2015. Thus, they have had over six months to move the trial court for injunctive relief, The Jefferson Circuit Court has the record and is in the best position to weigh the equitable considerations mandated by Rule 65 and determine the merits of interlocutory relief. However, Appellants now seek emergency relief with the Court of Appeals.ARGUMENT Appellants’ motion for emergency relief conveniently neglects to provide the Court with the controlling law on their demand for a stay, much less any analysis to support their argument. The Appellants specifically request this Court “enjoin enforcement” of the applicable Minimum Wage Ordinance. (Appellants Motion, p. 1.) A motion for emergency relief under CR 65.08 is at its core a request for injunctive relief from an appellate court. The grant of injunctive relief is govemed by CR 65.04(1) which sets forth the following requirements for a movant to establish: A temporary injunction may be granted during the pendency of an action on motion if it is clearly shown by verified complaint, affidavit, or other evidence that the ‘movant's rights are being or will be violated by an adverse party and the movant will suffer immediate and irreparable injury, loss, or damage pending a final judgment in the action, or the acts of the adverse party will tend to render such final judgment ineffectual. A stay while a civil order is appealed is not a manner of right and a party requesting a stay bears the burden of demonstrating circumstances justifying the requested action. Nken v, Holder, 557 U.S. 418, 433 (2009). The onus is always on a party secking to stay to demonstrate their entitlement to such relief. Hilton v. Braunskill, 481 U.S. 770, 776 (1987); Grutter v. Bollinger, 247 F.3d 631 (6th Cir. 2001). The Kentucky Court of Appeals in the well-known case of Maupin v, Stansbury, 575 8.W.2d 695 (Ky. Ct. App. 1978), created the following three-prong test that a party requesting temporary injunctive relief must establish for equitable relief to be granted: First, the trial court should determine whether plaintiff has complied with CR 65.04 by showing irreparable injury. This is a mandatory prerequisite to the issuance of any injunction. Secondly, the trial court should weigh the various equities involved. Although not an exclusive list,the court should consider such things as possible detriment to the public interest, harm to the defendant, and whether the injunction will merely preserve the status quo. Finally, the complaint should be evaluated to see whether a substantial question has been presented. If the party requesting relief has shown a probability of irreparable injury, presented a substantial question as to the merits, and the equities are in favor of issuance, the temporary injunction should be awarded. 1d, at 699 (emphasis added). ‘The Maupin test has been adopted and applied in subsequent Supreme Court cases evaluating the issuance of temporary injunctions.' The purpose of the Maupin test is for the court to issue injunctions “only where absolutely necessary to preserve a party’s rights pending the trial of the merits.” Id. at 698, Failure to meet one of the three requisites of the Maupin test was fatal to 2 movant’s request for temporary Sturgeon Mining Co. v. Whymore Coal Co., 892 S.W.2d 591, 592 (Ky. 1992). A review of the Maupin test shows that Appellants fail to satisfy any of the three required prongs. The first prong of the Maupin test is to consider whether a “substantial question” exists. Appellants must show “there is a substantial possibility [they] will ultimately prevail” on this substantial question. Norsworthy v. Ky. Bd. of Medical Licensure, 330 S.W.3d 58, 62 (Ky. 2009) (emphasis in original). Appellants do not acknowledge, much less demonstrate, that there is not only a possibility but a substantial possibility they will prevail on the merits of this appeal. Instead, the trial court's Opinion establishes that Appellee will prevail. Judge MeDonald-Burkman ruled that the Minimum Wage Ordinance is “lawful and enforceable”. The Circuit Court Opinion concluded: “[KRS 337.275(1)] establishes a floor for wages (Order, p. 2); employers may voluntarily pay more, but not less than the ' Commonwealth v. Wilkenson, 828 $.W.2d 610 (Ky. 1992); Cyprus Mountain Coal Corp. v. Brewer, 828 S.W.2d 642 (Ky. 1992); Commonwealth, Revenue Cabinet v. Picklesimer, 879 8,W.2d 482 (Ky. 1994); ‘Sturgeon Mining Co. v. Whymore Coal Co., 892 $.W.2d 591 (Ky. 1992), 4stated wage” (Order, p. 2); “the Ordinance is not in conflict with KRS 337.275” (Order, p. 3); “Federal Fair Labor Standards Act . . . anticipates state and/or local governments adopting higher minimum wage[]” (Order, p. 2); KRS 337.275 does not contain express preemptive language “reserving the wage and labor laws exclusively to the General Assembly{]” (Order, p. 2); “Plaintiffs” argument that it will be too burdensome to comply with the Ordinance when the rest of the state is at a different wage rate is without merit (Order, p. 3).” (See attached Order.) The trial court's ruling establishes the substantial possibility that Appellee will prevail in the underlying action. As a result, Appellants fail to establish the first prong of the Maupin test. The second prong of the Maupin test requires the court to “weigh the various equities involved.” Maupin, 575 S.W.2d at 699. The equities to be weighed include: ‘possible detriment to the public interest, harm to the defendant, and whether the injunction will merely preserve the status quo.” Id. The “public interest” in this case is the enforcement of a lawful ordinance enacted by the legislative body of Louisville Metro Government to increase the minimum wage in Jefferson County. A lengthy appeal will deny minimum wage employees an increase Metro Council deemed necessary to “to help lift working families out of poverty, decrease income inequality, and boost [Jefferson County] economy{.J” (See Minimum Wage Ordinance, j 1.) Obviously, not only would current minimum wage eamers be adversely affected for the near future, persons entering the workforce for the first time would also suffer. While a stay of the minimum wage may preserve the status quo, it is outweighed by the detriment that would result to the minimum wage employees in Jefferson County who have anticipated an increase in wagerate since the passage of this Ordinance in December of last year. The equities of this case are clearly on the side of the Appellee. The last prong of the Maupin test is whether Appellant will be irreparably harmed if they increase the pay rate while awaiting adjudication of the challenge to the Minimum Wage Ordinance. Appellants claim if the Minimum Wage Ordinance is later overturned by an appellate court the overpayments amount to an irreparable harm. As the Supreme Court of Kentucky has observed, “mere injuries, however substantial in terms of money, time and energy necessarily expended in the absence of a stay are not enough.” Norsworthy, 330 $.W.3d at 58, 62 (Ky. 2009) (quoting Sampson v. Murray, 415 U.S. 61, 90 (1974)). Additionally, the Sixth Circuit has agreed with the D.C. Circuit in that economic loss, in and of itself, does not constitute irreparable harm. State of Ohio ex rel. Celebrezze v. Nuclear Regulatory Comm'n, 812 F.2d 288, 290 (6th Cir. 1987) (citing Wisconsin Ges Co. v. FER.C, 758 F.2d 669, 674 (D.C.Cir.1985)). Furthermore, a District of Columbia court has stated, “economic loss does not, in and of itself, constitute irreparable harm, unless the loss threatens the very existence of the movants” business.” Todd D. Zirkle v. District of Columbia, 830 A.2d 1250, 1257 (Ct. App. 2003). The swom affidavits fail to provide the Court of Appeals with any facts relating to what affect, if any, the minimum wage increase of fifty cents will have on their businesses. Overpayment alone is an insufficient claim to constitute imeparable harm under the law. In addition, while Appellants argue “affected employees can easily be made whole” at a later date, is possible that Appellants could recover overpayment of wages from employees. Further, Appellants conveniently neglect to address Appellee'sloss of occupational taxes in the interim while this appeal proceeds through the appellate courts. In sum, Appellants base their entire argument on two self-serving affidavits and an unverified complaint’ that are simply conclusory in regards to the “irreparable harm” requirement that they claim will result if they are “compelled to involuntary raise the ‘wages of certain employees” to comply with the increased minimum wage in Jefferson County. (Appellants’ Motion, p. 5.) The Appellants demand that this Court enjoin enforcement of the Minimum Wage Ordinance declared valid by the Jefferson Cireuit Court. However, they failed to acknowledge, much less demonstrate, that they satisfy the requisite legal standard to for this extraordinary interlocutory relief. CONCLUSION The Appellant's motion falls well short of demonstrating that the facts and circumstances of this case warrant the extraordinary step of emergency relief to prevent “irreparable injury” as required by CR 65.08(7). Appellants’ motion should be denied. Respectfully submitted, 7 . Shucd J What MIKE O*CONNELL E. PATRICK MULVIHILL DAVID A. SEXTON SARAH J. MARTIN Jefferson County Attomeys 531 Court Place, Suite 900 Louisville, KY 40202 (502) 574-8429 Counsel for Defendant * CR 65.04 allows injunctive relief only “if it is clearly shown by verified complaint, affidavit, or other evidence” that the movant will suffer “immediate and irreparable injury”. 1CERTIFICATE OF SERVICE This is to certify that a true copy of the foregoing Appellees’ Response to the Appellant's Motion for Emergency Relief Pursuant to CR 65.08(7) was mailed by United States First-Class mail, postage prepaid, on this 30" day of June to the following: Brent R. Baughman, Aleksandr “Sasha” Litvinow, Bingham Greenebaum Doll LLP, 3500 National City Tower, 101 South Fifth Street, Louisville, Kentucky, 40202 and the Honorable Judith McDonald-Burkman, Judge, Jefferson Circuit Court, Jefferson County Judicial Center, 700 West Jefferson Street, Louisville, Kentucky 40202. Assistant Jefferson County AttorneyJEFFERSON CIRCUIT COURT DIVISION NINE JUDGE JUDITH E. McDONALD-BURKMAN, CASE NO. 15-CI-754 KENTUCKY RESTAURANT PLAINTIFFS, ASSOCIATION, INC,, et al. v ORDER LOUISVILLE/JEFFERSON COUNTY METRO DEFENDANT GOVERNMENT This matter comes before the Court on Motion for Judgment on the Pleadings filed by Plaintiffs Kentucky Restaurant Association, Inc. ("KRA"), Kentucky Retail Federation, Inc. ("KRF"), and Packaging Unlimited, LLC (‘Packaging Unlimited”) collectively, “Plaintiffs"). Defendant Louisville/Jefferson County Metro Government (Metro Government”) has responded and filed a cross-motion for Judgment on the Pleadings. A hearing was held June 10, 2015 and the matters are now submitted. On January 2, 2015, Mayor Greg Fischer approved Ordinance O-470-14 ("the Ordinance”), which is to become effective July 1, 2015. The relevant approved language of the Ordinance reads Every Employer within the jurisdictional boundaries of Louisville Metro shall pay to each of its Employees wages at a rate of not less than $7.75 per hour beginning on July 1, 2015, $8.25 per hour beginning on July 1, 2016, and $9.00 per hour beginning on July 1, 2017. Plaintiffs allege the Ordinance conflicts with Kentucky's minimum wage of $7.25 per hour set by KRS 337.275(1), and is therefore null and void.KRS 337.275(1) adopts the federal minimum wage statute as part of the wage and hour laws chapter: Except as may otherwise be provided by this chapter, every employer shall pay to each of his employees wages at a rate of not less than five dollars and eighty-five cents ($5.85) an hour beginning on June 26, 2007, not less than six dollars and fifty-five cents ($6.55) an hour beginning July 1, 2008, and not less than seven dollars and twenty-five cents ($7.25) an hour beginning July 1, 2009. If the federal minimum hourly wage as prescribed by 29 US. sec. 206(a)(1) is increased in excess of the minimum hourly wage in effect under this subsection, the minimum hourly wage under this subsection shall be increased to the same amount, effective on the same date as the federal minimum hourly wage rate. If the state minimum hourly wage is increased to the federal minimum hourly wage, it shall include only the federal minimum hourly rate prescribed in 29 US.C. sec. 206(a)(2) and shall not include other wage rates or conditions, exclusions, or exceptions to the federal minimum hourly wage rate. In addition, the increase to the federal minimum hourly wage rate does not extend or modify the scope or coverage of the minimum wage rate required under this chapter. This statute establishes a floor for wages; employers may voluntarily pay more, but not less than the stated minimum wage. The Federal Fair Labor Standards Act, which sets forth the federal minimum wage, anticipates state and/or local governments adopting higher minimum wages. 29 USC. § 218(a). KRS 337.275 does not contain express language authorizing a local government to increase the minimum wage within that jurisdiction. Neither is there express language reserving the wage and labor laws exclusively to the General Assembly. “When the legislature seeks to expressly preempt entire fields of local regulation and ordinance, it does so by clear and unmistakable language." Lexington Fayette County Food & Beverage Association v. Lexington-Fayette Urban County Government, 131 SW.3d 745, 752 (Ky.2004). Such preemptive language is absent in KRS 337.275,Louisville Metro is a consolidated local government per KRS 67C.101, with “all the powers and privileges that cities of the first class and their counties are, or may hereafter be, authorized to exercise under the Constitution and the general laws of the Commonwealth of Kentucky, including but not limited to those powers granted to cities of the first class and their counties under their respective home rule powers.” KRS 67C.101(2)(a). The General Assembly granted cities of the first class such as Louisville broad authority to govern itself, finding conditions in such cities to be “sufficiently different from those found in other cities to necessitate this grant of authority and complete home rule,” which is to be construed broadly. KRS 83.410 (emphasis added). Those “sufficiently different” conditions include economic factors such as cost of living and economic development and viability. The Ordinance is not in conflict with KRS 337.275. It does not seek to set a minimum wage tower than that stated in KRS 337.275, nor does it seek to change any other provision of the wage and labor laws adopted by the General Assembly. Plaintiffs’ argument that it will be too burdensome to comply with the Ordinance when the rest of the state is at a different wage rate is without merit. It is no different than an employer's duty to withhold occupational taxes for its employees, rates which vary from county to county in Kentucky. An employee may work in different counties as part of his or her employment, and the employer must calculate the wages earned in each county to determine the appropriate occupational tax withholding. Additionally, what is legal in one county may be illegal in another, such as indoor smoking andalcohol and fireworks sales. A business owner must comply with the laws and ‘ordinances in the various locales in which it chooses to operate, even if variances exist. Therefore, after a careful review of the record, applicable law and the Court being otherwise sufficiently advised, IT IS HEREBY ORDERED AND ADJUDGED THAT Motion for Judgment on the Pleadings and Injunctive Relief fled by Plaintiffs Kentucky Restaurant Association, Inc, Kentucky Retail Federation, Inc, and Packaging Unlimited, ULC is DENIED. IT IS FURTHER ORDERED AND ADJUDGED THAT Defendant Louisville/Jefferson County Metro Government's Motion for Judgment on the Pleadings iS GRANTED. Louisville Metro Government's Minimum Wage Ordinance is hereby deemed lawful and enforceable. This is a final and appealable order there being no just cause for delay. Distribution to: Hon, Mike O'Connell, Jefferson County Attorney Hon, Sarah J. Martin, Asst. Jefferson County Attorney Hon. Brent R. Baughman Hon. Aleksandr Litvinow