Dist. of Columbia v. Dep't of Labor

Decision Date05 April 2016
Docket Number14–5133.,Nos. 14–5132,s. 14–5132
Citation819 F.3d 444
Parties DISTRICT OF COLUMBIA and CCDC Office LLC, Appellees v. DEPARTMENT OF LABOR, et al., Appellants Metropolitan Regional Council of Carpenters, Unincorporated Labor Organization, et al., Appellees.
CourtU.S. Court of Appeals — District of Columbia Circuit

John S. Koppel, Attorney, U.S. Department of Justice, argued the cause for appellants.

With him on the briefs were Benjamin C. Mizer, Acting Assistant Attorney General, Vincent H. Cohen, Jr., Acting U.S. Attorney, and Michael Jay Singer, Attorney. Jeffrica J. Lee, Attorney, U.S. Department of Justice, entered an appearance.

Terry R. Yellig and Esmeralda Aguilar were on the brief for intervenors-defendants-appellants Metropolitan Regional Council of Carpenters, et al.

Carl J. Schifferle, Assistant Attorney General, Office of the Attorney General for the District of Columbia, argued the cause for appellee District of Columbia. With him on the brief were Karl A. Racine, Attorney General, Todd S. Kim, Solicitor General, and Loren L. AliKhan, Deputy Solicitor General.

Maurice Baskin argued the cause and filed the brief for appellee CCDC Office LLC.

Kevin J. McKeon was on the brief for amici curiae Associated Builders and Contractors, Inc. and National Association of Manufacturers in support of appellee CCDC Office LLC. Shelly L. Ewald entered an appearance.

Before: GARLAND,* Chief Judge, KAVANAUGH, Circuit Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge KAVANAUGH

.

KAVANAUGH

, Circuit Judge:

CityCenterDC is a large private development in the heart of Washington, D.C. It features upscale retail stores such as Hermès, Boss, and Louis Vuitton; high-end restaurants such as DBGB and Centrolina; the large private law firm of Covington & Burling; and luxury residences.

The question in this case is whether the Davis–Bacon Act applies to the construction of CityCenterDC. As relevant here, the Davis–Bacon Act applies when the District of Columbia enters into a "contract ... for construction" of "public works."1 The Act guarantees prevailing wages to construction workers on those projects. If the Act applies here, the construction workers who helped build CityCenterDC might be entitled to higher wages than they in fact received.

As the statutory definition reveals, two conditions must be present in order for the Davis–Bacon Act to apply here: (1) D.C. must have been a party to the contracts for construction of CityCenterDC, and (2) CityCenterDC must be a public work. To illustrate, suppose the District of Columbia contracted with a construction contractor to build a new public park. That would be a classic example of a construction project covered by the Davis–Bacon Act.

But this case differs from the classic Davis–Bacon scenario in two critical respects, each of which independently suffices to take the CityCenterDC construction project outside the reach of the Davis–Bacon Act.

First, the District of Columbia was not a party to the construction contracts for the building of CityCenterDC. D.C. owns the land on which CityCenterDC stands, but D.C. rented the land to private developers in a series of 99–year leases. The private developers then entered into construction contracts with general contractors to build CityCenterDC. The developers—not D.C.—contracted with the construction contractors who built CityCenterDC. That matters for purposes of the Davis–Bacon Act. Put simply, because D.C. was not a party to the construction contracts, the Davis–Bacon Act does not apply to CityCenterDC.

Second, and an independent reason why the Davis–Bacon Act does not apply here, CityCenterDC is not a "public work." To qualify as a public work, a project must possess at least one of the following two characteristics: (i) public funding for the project's construction or (ii) government ownership or operation of the completed facility, as with a public highway or public park. Here, CityCenterDC's construction was not publicly funded, and CityCenterDC is not a government-owned or government-operated facility. So CityCenterDC is not a public work.2

In short, D.C. was not a party to the contracts for construction of CityCenterDC, and CityCenterDC is not a public work. For either of those two alternative and independent reasons, the Davis–Bacon Act does not apply to the construction of CityCenterDC.

It bears emphasis, moreover, that in the 80 years since its enactment, the Davis–Bacon Act has never been applied to a construction project such as CityCenterDC that is privately funded, privately owned, and privately operated. The novelty of the U.S. Department of Labor's interpretation strongly buttresses our conclusion that the Act does not apply here. See, e.g., FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000)

; Loving v. IRS, 742 F.3d 1013, 1021 (D.C.Cir.2014).

In a thorough and persuasive opinion, the District Court held that the Davis–Bacon Act does not apply to CityCenterDC. We affirm the judgment of the District Court.

I

To evaluate whether the Davis–Bacon Act applies to the construction of CityCenterDC, we begin by examining the history of the Act, the details of CityCenterDC, and the procedural background of this case.

A

In 1931, Congress passed and President Hoover signed the Davis–Bacon Act. By that point in the Great Depression, economic activity, including construction, had already declined significantly. To offset the dropoff in private construction and to help put construction workers back to work, the Federal Government launched a variety of construction projects to build and repair public works. But the government construction projects led to a collateral problem. Some government agencies awarded construction contracts to contractors who hired cheap itinerant labor and made low-wage bids. The market impact, Congress believed, was to depress wages for local construction workers below what the local workers otherwise would receive.

To prevent government contracts from depressing wages for local construction workers, the Davis–Bacon Act guaranteed prevailing local wages to construction workers on federal and D.C. construction projects for public buildings. Offering a succinct summary of the Act's purpose, one Member of Congress remarked: "The purpose of this bill is to require the contractors, including subcontractors, to pay not less than the prevailing rate of wages for work of a similar nature in the city, town, village, or other civil division of the State in which the public buildings are located, or in the District of Columbia." 74 Cong. Rec. 6515 (1931) (statement of Rep. Kopp) (internal quotation marks omitted).

As initially enacted, the Davis–Bacon Act covered only federal and D.C. contracts for construction of "public buildings." Pub.L. No. 71–798, 46 Stat. 1494 (1931). In 1935, Congress passed and President Franklin Roosevelt signed a new law that amended the Act to cover federal and D.C. contracts for construction of "public works," as well as public buildings. Act of Aug. 30, 1935, Pub.L. No. 74–403, 49 Stat. 1011.

B

In July 2001, a District of Columbia task force recommended a "mixed-use" urban neighborhood on the site of the D.C. convention center. In September 2002, acting on that recommendation, D.C. issued a Request for Proposals for a Development Partner. D.C. ultimately chose various developers, whom we will refer to collectively as "the Developers."

D.C. and the Developers entered into 99–year ground lease agreements for the right to use the property. Under those lease agreements, the Developers agreed to pay D.C. at least $2 million each year.

D.C. and the Developers also entered into development agreements. The development agreements obligated the Developers to, among other things, build CityCenterDC. As required by those development agreements, the Developers would enter into contracts with general contractors for construction of CityCenterDC. D.C. maintained the right to approve the Developers' general contractors for various components of the project, and to approve the construction contracts entered into between the Developers and the contractors.

Under the lease agreements and the development agreements, D.C. would not be a party to any construction contracts for the building of CityCenterDC. Rather, according to the lease agreements and the development agreements, the required follow-on construction contracts would be executed between the Developers and general contractors.

Construction of CityCenterDC began in 2011. Today, CityCenterDC is already home to several upscale shops and restaurants, and to a major private law firm. When it is finished, CityCenterDC will house approximately 60 retail stores and nearly 700 residential units. A 370–room hotel catering to luxury travelers is scheduled to open in the next three years.

To summarize the basic contractual relationships underlying CityCenterDC: (1) D.C. and the Developers entered into various lease agreements and development agreements; and (2) those lease agreements and development agreements, in turn, directed the Developers (not D.C.) to execute construction contracts with general contractors.

D.C. provided no public funding for construction of CityCenterDC. D.C. does not occupy any space at CityCenterDC. D.C. does not own or operate any of the businesses located there. And D.C. does not offer any government services there.

C

In April 2008, a labor union—the Mid–Atlantic Regional Council of Carpenters—asked D.C. to determine whether the Davis–Bacon Act applied to the construction of CityCenterDC. In response to that request, Deputy D.C. Mayor Neil Albert concluded that the Act did not apply because "the District will not be party to any construction contracts, the project to be built will not be owned by the District and no District funds will be used to pay construction costs."

The following year, the Carpenters requested a ruling on the issue from the U.S. Department of...

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