Voters in California have rejected a contentious ballot initiative that would have imposed new regulatory requirements on kidney dialysis clinics in the state—a victory for major dialysis clinic operators who spent nearly $100 million campaigning against the measure.

With more than 60% of precincts in the state reporting and more than 10 million votes counted, Californians have decided by a 64% to 36% margin to strike down the Dialysis Clinic Requirements Initiative, also known as Proposition 23. The Associated Press projected defeat for the ballot measure on Tuesday evening.

The initiative would have required dialysis clinics in California to always have a licensed physician on-site during operating hours; report data on dialysis-related infections to regulators; obtain consent from the state before closing down; and prohibit clinics from discriminating against patients based on their source of payment or health care coverage.

But Prop 23 was always more a product of a conflict between organized labor and two of the state’s largest kidney dialysis clinic operators. The initiative was predominantly backed by SEIU-UHW West, a union of nearly 100,000 health care workers in California, while it was vehemently opposed by the state’s two major clinic operators, DaVita and Fresenius Medical Care. 

DaVita and Fresenius provided nearly $100 million of the $105 million raised in opposition to the ballot measure; by contrast, the “Yes on 23” committee supporting the initiative raised only around $9 million, virtually all of it contributed by SEIU-UHW West. The roughly $115 million poured into Prop 23 made it the third-most expensive ballot measure in the state this year, and the fourth-most expensive in the entire country.

While the initiative promised added oversight of dialysis clinics and garnered the support of the state’s Democratic Party, opponents—including the Republican Party of California—claimed it would raise health care costs and make it harder for tens of thousands of Californians to get the dialysis treatments they need.

And the conflict between SEIU-UHW West and both DaVita and Fresenius loomed large over Prop 23, especially since the labor union has sought to organize employees at both companies’ clinics in recent years. Two years ago, SEIU-UHW West backed a separate ballot measure, Proposition 8, that similarly targeted dialysis clinics in California; DaVita and Fresenius also spent heavily in opposition to that initiative, which was eventually defeated in the 2018 election.

In turn, SEIU-UHW West has been criticized for deploying the state’s ballot measure system to advance its own union organizing goals. In an editorial endorsing a “No” vote on Prop 23, the Los Angeles Times urged the union to “stop hijacking the initiative process for its organizing campaigns.”