Associated Builders and Contractors v. Carlson

• Decision Date: 02 February 1999
• Docket Number: C4-98-1428,C1-98-1385,Nos. C8-98-1383,s. C8-98-1383
• Citation: 590 N.W.2d 130
• Parties: 133 Ed. Law Rep. 243, 5 Wage & Hour Cas.2d (BNA) 244 ASSOCIATED BUILDERS AND CONTRACTORS, et al., Respondents, v. The Honorable Arne H. CARLSON, et al., Appellants (C8-98-1383), Defendants (C1-98-1385, C4-98-1428), Granite City Electric, Inc., Appellant (C1-98-1385), Intervenor (C4-98-1428), Minnesota Mechanical Contractors Association, et al., intervenors, Appellants (C1-98-1385), International Brotherhood of Electrical Workers, Local 292, intervenor, Appellant (C4-98-1428).
• Court: Minnesota Court of Appeals

Page 130

590 N.W.2d 130

133 Ed. Law Rep. 243, 5 Wage & Hour Cas.2d (BNA) 244

ASSOCIATED BUILDERS AND CONTRACTORS, et al., Respondents, v. The Honorable Arne H. CARLSON, et al., Appellants (C8-98-1383), Defendants (C1-98-1385, C4-98-1428) Granite City Electric, Inc., Appellant (C1-98-1385) Intervenor (C4-98-1428) Minnesota Mechanical Contractors Association, et al intervenors, Appellants (C1-98-1385), International Brotherhood of Electrical Workers, Local 292, intervenor, Appellant (C4-98-1428).

Nos. C8-98-1383, C1-98-1385, C4-98-1428.

Court of Appeals of Minnesota.

Feb. 2, 1999.

Review Granted April 20, 1999.

Syllabus by the Court

1. A school district has standing to challenge a statute's applicability and constitutionality in a declaratory judgment action brought against state entities authorized to enforce the statute against the school district.

2. When a statute's language is reasonably susceptible to more than one meaning, the statute is ambiguous and requires consideration of legislative history to ascertain legislative intent.

3. The inclusion within the 1997 omnibus tax bill of a provision requiring educational construction projects to follow the prevailing wage act violates the single subject and title requirements of Minn. Const. art. IV, § 17.

Douglas P. Seaton, Robin N. Kelleher, Burk, Seaton & Castle P.A., Edina, MN (for respondents)

Michael A. Hatch, Attorney General, Kenneth E. Raschke, Jr., Assistant Attorney

General, St. Paul, MN (for appellants Carlson, et al.)

Marshall H. Tanick, Teresa J. Ayling, Mansfield & Tanick, P.A., Minneapolis, MN (for appellants Minnesota Mechanical Contractors)

Lee Lastovich, Paul J. Zech, Felhaber, Larson, Fenlon & Vogt, Minneapolis, MN (for appellant Granite City Electric)

Richard A. Miller, Brendan D. Cummins, Miller O'Brien, Bloom, Minneapolis, MN (for appellant IBEW)

Vincent J. Fahnlander, Moss & Barnett, P.A., Minneapolis, MN (for amicus Employers' Association)

David D. Hammargren, Hammargren & Meyer, P.A., Edina, MN (for amicus Minnesota State Senators)

Joseph E. Flynn, Knutson, Flynn, Deans & Olsen, P.A., St. Paul, MN (for amicus Minnesota School Boards Association)

Considered and decided by AMUNDSON, Presiding Judge, KLAPHAKE, Judge, and MULALLY, Judge. ^*

O P I N I O N

KLAPHAKE, Judge

Respondents Associated Builders and Contractors (ABC), Independent School District No. 882 (ISD 882), and Wright Electric, Inc., an electrical contractor who submitted the low bid for ISD 882's new high school project (Wright Electric), brought this declaratory judgment action against appellants, the governor of Minnesota and two state commissioners (state appellants). ¹ Respondents sought a declaration interpreting Minn.Stat. § 121.15, subd. 1a (Supp.1997) as not requiring that their construction project follow the prevailing wage act; respondents alternatively challenged the enactment of Minn.Stat. § 121.15, subd. 1a, asserting that it was invalidly enacted because its inclusion within the 1997 omnibus tax bill violated the single subject and title requirements of Minn. Const. art. IV, § 17.

In response to cross-motions for summary judgment, the district court determined that because the statute is ambiguous, it must be read to fulfill the legislature's intent that the prevailing wage act be applied to all educational projects costing over $100,000. The district court further determined that, in enacting the statute as part of the 1997 omnibus tax bill, the legislature violated both the single subject and title requirements of the state constitution.

These appeals followed entry of judgment. This court has accepted amici curie briefs from three groups, who all align themselves with respondents in support of the district court's decision. We affirm the district court's determination that the statute applies the prevailing wage act to all educational construction projects over $100,000. We also affirm its determination that the single subject and title requirements of the Minnesota Constitution were violated.

FACTS

In the fall of 1997, ISD 882 sought prevailing and non-prevailing wage bids from electricians for its new high school in Monticello. ISD 882 awarded the contract to Wright Electric, the low non-prevailing wage bidder.

Respondents thereafter brought this action challenging the applicability and constitutionality of Minn.Stat. § 121.15, subd. 1a (Supp.1997), which provides:

Project. The construction, remodeling, or improvement of a building or site of an educational facility at an estimated cost exceeding $100,000 is a project under section 177.42, subdivision 2.

Section 177.42, subdivision 2, is part of the prevailing wage act and provides:

"Project" means erection, construction, remodeling, or repairing of a public building or other public work financed in whole or in part by state funds.

Minn.Stat. § 177.42, subd. 2 (1996).

Legislative history indicates that the amendment of section 121.15 to add subdivision 1a was proposed in direct response to NewMech Cos. v. Independent Sch. Dist. No. 206, 540 N.W.2d 801 (Minn.1995). In that case, the supreme court held that certain types of state aid payments to a school district to finance a construction project did not constitute state funding so as to bring the project within the purview of the prevailing wage act. The court reasoned that where these types of state aid payments are intended as property tax relief, the requirements of the prevailing wage act need not be met unless state funds are available at the time of construction to directly pay for the construction. Id. at 804.

During the 1997 legislative session, House File 1512, a bill to add section 121.15, subdivision 1a, was introduced in the labor-management relations committee; there was no companion bill in the Senate. The bill was described by its author as a way to circumvent the supreme court's decision in NewMech. House File 1512 was referred to the tax committee, where it was incorporated into the omnibus tax bill. When the omnibus tax bill arrived on the House floor, it was touted as having achieved "both property tax relief and long-term reform * * * without raising any other taxes[.]" Article 16 of the bill, captioned "miscellaneous," included the provision at issue here; it was summarized as including "a number of miscellaneous and minor changes in tax laws." After returning from conference committee, the omnibus tax bill passed both houses, by a 127-6 vote in the House and a 66-0 vote in the Senate.

The 890-word title of the act begins "An ACT relating to the financing and operation of state and local government." 1997 Minn. Laws ch. 231. Aptly described by respondents as "a daunting piece of legislation" and by one amici as "behemoth," the act covers 185 pages in the session laws and includes 16 articles. The provision at issue here was enacted as 1997 Minn. Laws ch. 231, art. 16, § 4.

ISSUES

I. Do respondents lack standing or legal capacity to challenge the validity of this statute?

II . Did the district court err in interpreting Minn.Stat. § 121.15, subd. 1a, as applying the prevailing wage act to this non-state funded educational project?

III . Did the district court err in concluding that Minn.Stat. § 121.15, subd. 1a, is unconstitutional because it violates the single subject and title rule?

ANALYSIS

I.

The state appellants argue here, as they did before the district court, that respondents lack the requisite standing and legal capacity to maintain this action. The district court did not explicitly address this jurisdictional issue, but the issue can be raised at any time. See Annandale Advocate v. City of Annandale, 435 N.W.2d 24, 27 (Minn.1989).

Standing requires that a plaintiff have sufficient stake in a justiciable controversy to seek judicial relief. Sierra Club v. Morton, 405 U.S. 727, 731-32, 92 S.Ct. 1361, 1364-65, 31 L.Ed.2d 636 (1972). Economic injury "or the potential for economic injury" is sufficient to confer standing. Byrd v. Independent Sch. Dist. No. 194, 495 N.W.2d 226, 231 (Minn.App.1993), review denied (Minn. Apr. 20, 1993). Respondents have satisfied this injury-in-fact requirement: their complaint alleges that ISD 882 "stands to be harmed in an amount equaling more than $2,000,000.00 through the asserted operation of this statute" and that Wright Electric and ABC "stand to be harmed significantly * * * due to deprivation of business opportunities occasioned by reduced price competition in labor costs if so-called 'prevailing wages' are imposed on school construction projects." Similarly, an affidavit submitted by ISD 882's superintendent states that if ISD 882 "is required to accept the prevailing wage bid rather than the actual low bid of Wright Electric, the cost to ISD 882 and to the tax payers of the District will be $92,813.00."

The state appellants further argue that the interests of Wright Electric and ABC are entirely derivative to those of ISD 882 and that ISD 882 lacks statutory authority to sue the state and its officers. However, school districts are granted specific and implied powers to manage their business and protect their interests, including the power to prosecute and defend actions "[i]n all proper cases." Minn.Stat. §§ 123.35, subd. 1; 123.40, subd. 2; 127.02 (1996). These statutes impliedly give school districts authority to challenge legislation that directly affects the interests of the school, the costs of school buildings, and the business of the district. Id.; see also Minn.Stat. § 555.02 (1996) (declaratory judgments act gives person whose rights or legal relations are affected by statute the right to obtain declaration of rights). Thus, we conclude that respondents have the legal capacity to bring this declaratory judgment action against the state appellants, who are charged with the authority to enforce section 121.15, subdivision 1a.

II.

The district court rejected respondents' first alternative argument, which respondents have raised in a...