Winzeler Excavating Co. v. Brock

• Decision Date: 08 June 1988
• Docket Number: No. C 86-7742.,C 86-7742.
• Citation: 694 F. Supp. 362
• Parties: WINZELER EXCAVATING CO., Plaintiff, v. William E. BROCK, Secretary of Labor, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

694 F. Supp. 362

WINZELER EXCAVATING CO., Plaintiff, v. William E. BROCK, Secretary of Labor, et al., Defendants.

No. C 86-7742.

United States District Court, N.D. Ohio W.D.

June 8, 1988.

Gregory L. Hammond, Millisor, Belkin & Nobil, Akron, Ohio, for Winzeler Excavating Co.

Verne K. Armstrong, Toledo, Ohio, Jeffrey R. Ingraham, Asst. Pros. Atty., Celina, Ohio, Dennis Muchnicki, Asst. Atty. Gen., Columbus, Ohio, Robert E. Dunlap, Thompson, Dunlap, Heydinger, O'Connor and MacDonald, Bellefontaine, Ohio, Wendy Bader, Office of the Sol., U.S. Dept. of Labor, Washington, D.C., for defendants.

OPINION and ORDER

WALINSKI, Senior District Judge.

This cause is before the Court on plaintiff's motion for preliminary injunction, federal defendants' motion for summary judgment and a motion to dismiss on Eleventh Amendment grounds filed by defendant Ohio Environmental Protection Agency ("Ohio EPA"). This is an action for declaratory and injunctive relief. Plaintiff alleges due process violations because defendants withheld government contract funds prior to affording plaintiff a hearing on alleged prevailing wage rate infractions. Jurisdiction is based on 28 U.S.C. § 1331.

FACTS

Plaintiff Winzeler Excavating Company ("Winzeler") installs sanitary and storm sewer lines. In November, 1983, Winzeler entered into certain construction contracts with the Indian Lake Sanitary Sewer District, Logan County, Ohio. The work was federally funded in part through a grant under the Federal Water Pollution Control Act, 33 U.S.C. § 1372 (1982), which provides for compliance with statutory labor standards. Accordingly, the wage rates paid to plaintiff's workers on the Indian Lake project were governed by the Davis-Bacon Act, 40 U.S.C. § 276a (1982), and related acts.

In late 1985, defendants United States Department of Labor and the Secretary of Labor ("federal defendants"), through the Columbus, Ohio office of the Employment Standards Administration Wage and Hour Division, conducted a compliance review investigation of plaintiff's employment practices on the Indian Lake project. By letter dated December 11, 1985, said defendant notified plaintiff that several statutory violations had occurred. Specifically, plaintiff had allegedly underpaid truckers hauling stone materials from several gravel pits onto the construction sites, and had underpaid power equipment operators and laborers employed at private gravel pits located outside the boundaries of the sewer lines. Plaintiff declined to make restitution and pay back wages, claiming that the workers in question were physically off the site and thus excluded by regulation from coverage under the prevailing wage acts.

By letter dated December 18, 1985, federal defendants requested that Ohio EPA withhold payments accrued to plaintiff on the Indian Lake project, which was almost complete at that time. Contract funds due plaintiff of approximately $112,000.00 were withheld in January, 1986. Plaintiff objected to defendants' actions and requested a hearing on whether prevailing wages were due for such workers.

Federal defendants thereafter attempted to conduct a new investigation of plaintiff's employment practices on a second sewer construction project in Mercer County, Ohio. No hearing had as yet been scheduled regarding the dispute on the Indian Lake project. Thus, in October, 1986, plaintiff filed the instant action.

Initially, plaintiff sought an injunction precluding federal defendants from investigating and withholding funds on plaintiff's similar projects pending a determination of the gravel pit issue on the Indian Lake Project. In addition, plaintiff demanded payment of the approximately $112,000.00 in contract funds being withheld. Plaintiff also requested a declaratory judgment that withholding funds due on a federal construction project prior to a hearing amounted to a taking of plaintiffs property without due process of law. Plaintiff alleged that its ability to continue operations, obtain future contracts and secure bonding were adversely affected. Finally, plaintiff asked for an award of as of yet unascertained damages, attorney fees and costs of the action.

On October 9, 1986, after hearing the parties' evidence and reviewing the exhibits presented, this Court took plaintiff's motion for injunction under advisement but ordered other investigations by defendants of plaintiff's sites stayed pending further rulings of the court.¹

Thereafter, on November 5, 1986, plaintiff filed a motion for expedited hearing with the Employment Standards Administration Wage and Hour Division. In March, 1987, with further investigations of plaintiff stayed by this Court, federal defendants joined in the request to expedite an administrative hearing.

An Administrative Law Judge ("ALJ") eventually heard the matter in June, 1987. He issued his decision in February, 1988.² In a carefully documented and seemingly well-reasoned opinion, the ALJ concluded that Winzeler should have paid the prevailing wage rate to the underpaid truck drivers and other operators and laborers. His determination turned on interpreting the phrase "site of the work" in plaintiff's contract. The ALJ ruled that the contract language included workers involved with the gravel pits. Thus, the accrued contract funds being withheld from plaintiff by Ohio EPA were ordered released for payment to the individual employees.

DISCUSSION

In light of the ALJ's ruling, this Court finds plaintiff's first two claims (that defendants be enjoined from further investigations pending a determination on the Indian Lake wage violations and that the contract funds be paid out to plaintiff) to be moot. Furthermore, for the reasons which follow, this Court finds it appropriate to enter summary judgment for defendants on plaintiff's declaratory and damages claims.

Rule 56, Fed.R.Civ.P., directs the disposition of a motion for summary judgment. In relevant part Rule 56(c) states:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

The Court's function in ruling on a motion for summary judgment is to determine if any genuine issue exists for trial, not to resolve any factual issues, and to deny summary judgment if material facts are in dispute. United States v. Articles of Device, 527 F.2d 1008, 1011 (6th Cir.1976); Tee-Pak, Inc. v. St. Regis Paper Co., 491 F.2d 1193, 1195 (6th Cir.1974). Further, "in ruling on a motion for summary judgment, the evidence must be viewed in a light most favorable to the party opposing the motion." Bouldis v. U.S. Suzuki Motor Corp., 711 F.2d 1319, 1324 (6th Cir. 1983). To summarize, summary judgment is only appropriate when no genuine issue of material fact remains to be decided, and when the undisputed facts, viewed in a light most favorable to the non-moving party, entitle the movant to judgment as a matter of law. Smith v. Pan Am World Airways, 706 F.2d 771, 773 (6th Cir.1983).

A principle purpose of summary judgment "is to isolate and dispose of factually unsupported claims or defenses." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Rule 56(e) places responsibility on the party against whom summary judgment is sought to demonstrate that summary judgment is improper, either by showing the existence of a material question of fact or that the underlying substantive law does not permit such a decision. In relevant part the provision states:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

Rule 56(e), Fed.R.Civ.P. Rule 56(e) requires the non-moving party to go beyond the pleadings, and by affidavits, depositions, answers to interrogatories, or admissions on file, designate specific facts showing a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. at 324, 106 S.Ct. at 2553.

In the case sub judice, no material question of fact remains for trial and the Court finds defendants entitled to judgment as a matter of law. A review of the Davis-Bacon Act, 40 U.S.C. § 276a(a) (1982), reveals that withholding of funds from contractors for wage rate violations serves the goal of protecting laborers on government contracts. In relevant part:

There may be withheld from the contractor so much of the accrued payments as may be considered necessary by the contracting officer to pay to laborers and mechanics employed by the contractor or any subcontractor on the work the difference between the rates of wages required by the contract ... and the rates of wages received by such laborers and mechanics....

20 U.S.C. § 276a(a) (1982).

The regulations promulgated to administer the labor standard provisions of the Davis-Bacon and related acts require that a withholding clause be inserted in federally assisted construction contracts. 29 C.F. R. § 5.5(a)(2) (1987).³ Thus, the parties' contract documents and specifications for the Indian Lake project included the following clause:

(a) The Contracting Officer may withhold or cause to be withheld from the Prime Contractor so much of the accrued payments or advances as may be considered necessary (1) to pay laborers and mechanics, including apprentices, trainees, watchmen, and guards, employed by the Contractor or any subsontractor on the work the full amount of wages required by the contract, and (2) to satisfy any liability of any contractor for liquidated damages under paragraph (b) of the clause entitled "Contract Work Hours and Safety

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