UPDATE: US High Court Asks Admin's Views On City Health-Care Law

The U.S. Supreme Court on Monday asked the Obama administration for its views on a San Francisco law that requires medium and large-sized companies to pay for minimum employee health-care benefits.

Under the law, businesses operating in the city must either offer their employees health-insurance coverage or pay into a city fund that provides health care to uninsured San Francisco residents.

A local restaurant association, with the support of other business groups, filed a lawsuit challenging the city ordinance, saying it was burdensome on businesses and interfered with a federal law that governs employee-benefit plans.

The Supreme Court on Monday asked U.S. Solicitor General Elena Kagan, the federal government's lawyer at the high court, for the administration's views on whether the justices should consider the case.

The San Francisco-based 9th U.S. Circuit Court of Appeals upheld the city law last year.

San Francisco officials said they were facing a health-care crisis and were well within their rights to enact a law to address that crisis. The city said nothing in federal law immunized businesses from being required to spend money on health care.

The U.S. Chamber of Commerce and an association of retailers are among those urging the high court to strike down the San Francisco law.

The case is Golden Gate Restaurant Assn. v. City and County of San Francisco, 08-1515.

The high court also asked the Obama administration Monday for its views on three other business cases.

One case involves Costco Wholesale Corp.'s (COST) appeal of a ruling that said the discounter could be held liable for copyright infringement for re-selling luxury Swiss watches it obtained through second-hand sources.

At issue is a lawsuit filed by Omega SA, a unit of Swatch Group AG (UHR.VX ), alleging that Costco violated U.S. copyright law in 2004 by selling Omega Seamaster watches it obtained from third parties who had imported them into the U.S.

Amazon.com Inc. (AMZN), eBay Inc. (EBAY), Target Corp. (TGT) and a trade association of retailers are supporting Costco in the case. They said the lower court ruling was a concern to companies that re-sell foreign-made goods and could lead to higher prices for consumers. The case is Costco Wholesale Corp. v. Omega SA, 08-1423.

Another case centers on whether federal motor vehicle safety standards preempt a product liability lawsuit against Mazda Motor Corp. (7261.TO ) for installing lap-only seat belts in certain rear-seating positions. The lawsuit stems from a fatal collision involving a 1993 Mazda MPV minivan. A California court ruled for Mazda, deciding that federal law preempted the lawsuit. The case is Williamson v. Mazda Motor of America, 08-1314.

Finally, the high court asked the administration to weigh in on a dispute involving an Oklahoma county government's decision to tax natural gas that passes temporarily through a local pipeline storage facility. The case is Missouri Gas Energy v. Schmidt, 08-1458.

The justices will reconsider the cases after the administration submits legal briefs expressing the government's views.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; [e-mail]