Beary Landscaping, Inc. v. Costigan

• Decision Date: 31 January 2012
• Docket Number: No. 11–1920.,11–1920.
• Citation: 667 F.3d 947,192 L.R.R.M. (BNA) 2801,18 Wage & Hour Cas.2d (BNA) 1244
• Parties: BEARY LANDSCAPING, INC., et al., Plaintiffs–Appellants, v. Joe COSTIGAN, in his official capacity as Director of the Illinois Department of Labor, Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

18 Wage & Hour Cas.2d (BNA) 1244

192 L.R.R.M. (BNA) 2801

667 F.3d 947

BEARY LANDSCAPING, INC., et al., Plaintiffs–Appellants,

v.Joe COSTIGAN, in his official capacity as Director of the Illinois Department of Labor, Defendant–Appellee.

No. 11–1920.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 29, 2011.Decided Jan. 31, 2012.

Donald J. McNeil (argued), Attorney, Chicago, IL, for Plaintiffs–Appellants.

Carl J. Elitz (argued), Attorney, Office of the Attorney General, Civil Appeals Division, Chicago, IL, for Defendant–Appellee.

Before POSNER and KANNE, Circuit Judges, and PRATT, District Judge. ^*POSNER, Circuit Judge.

Illinois law provides that “workers ... employed by or on behalf of any public body engaged in the construction or demolition of public works” (defined as “all fixed works constructed or demolished by any public body, or paid for wholly or in part out of public funds,” 820 ILCS 130/2) shall be paid “not less than the general prevailing rate of hourly wages for work of a similar character on [nonfederal] public works in the locality in which the work is performed.” 820 ILCS 130/3. The “public body awarding [the] contract” is required to determine what the prevailing wage is, 820 ILCS 130/4(a), but the Department of Labor is required to conduct annual investigations to determine the prevailing wage for each type of construction and demolition work in each locality (generally defined as a county, 820 ILCS 130/2) in which such work is being performed, and in practice the public bodies simply adopt that determination.

The Department's determination may, though only within 30 days after it is published, be challenged administratively by “any person affected” by it. 820 ILCS 130/9. If the Department rejects the challenge, the challenger can appeal to the Illinois courts. Id.; 735 ILCS 5/3–102; see Hayen v. County of Ogle, 101 Ill.2d 413, 78 Ill.Dec. 946, 463 N.E.2d 124, 126 (1984); Beary Landscaping, Inc. v. Ludwig, 479 F.Supp.2d 857, 862 (N.D.Ill.2007); People ex rel. Dep't of Labor v. Skoog Landscape & Design, 337 Ill.App.3d 232, 271 Ill.Dec. 798, 785 N.E.2d 992, 995 (2003). If an employer pays less than the prevailing wage to employees working on a nonfederal public work, the Department can sue for the underpayment on behalf of the employees and also levy a separate penalty that it retains. 820 ILCS 130/11; Brandt Construction Co. v. Ludwig, 376 Ill.App.3d 94, 315 Ill.Dec. 890, 878 N.E.2d 116, 121 (2007).

A number of landscape contractors in eight Illinois counties who do nonfederal public-works projects involving construction tasks, such as planting trees, installing ornaments, sodding and seeding, stabilizing stream banks, and applying fertilizer and other chemicals to the soil, brought this suit against the Department. They argue that it has violated the due process clause by delegating the ascertainment of the prevailing wage for publicly financed landscape construction work to private entities, namely a labor union and the contractors with which it has a collective bargaining agreement. The district judge granted summary judgment in favor of the Department.

Landscape laborers (as distinct from operators of equipment, including trucks, used in landscape construction projects, whom we can disregard) employed by these contractors are called “plantsmen.” This is an unconventional usage—“plantsman” as ordinarily understood means either an enthusiastic and knowledgeable gardener or someone who raises or sells plants commercially. But no matter. Traditionally in Illinois plantsmen in the sense of landscape laborers have been represented by the Laborers Union, which represents many other types of construction laborer as well. To determine the prevailing wage for laborers, the Department in its annual investigations simply asks the Laborers Union to certify the current wage of laborers employed in public works (by locality within Illinois) under the Union's collective bargaining agreement with construction contractors. A contractor who pays a lower wage to a worker on a public work than the wage specified in that agreement receives a demand letter from the Department and if he doesn't comply the Department can, as we know, sue him; it may also bar him from bidding on future public contracts if he is a repeat offender. 820 ILCS 130/11a.

In 2005 the Illinois Landscape Contractors Bargaining Association signed a collective bargaining agreement with the Teamsters Union and the International Union of Operating Engineers that specified a wage for plantsmen that was substantially below the wage in the Laborers Union collective bargaining contract. The Illinois Landscape Contractors Association—a different organization from the Illinois Landscape Contractors Bargaining Association but with an overlapping membership—asked the Department to recognize plantsmen as a subclassification of laborers, having their own prevailing wage, which the association argued was the wage specified in the Teamsters/Operating Engineers collective bargaining agreement. (We shall refer to that collective bargaining agreement as the “Landscapers Contract” and the one signed by the Laborers Union as the “Laborers Contract.”) The Department refused and its refusal was upheld in Illinois Landscape Contractors Ass'n v. Department of Labor, 372 Ill.App.3d 912, 310 Ill.Dec. 431, 866 N.E.2d 592 (2007). As a result of that decision, the Department, without investigating the prevailing wage for landscape laborers employed on public works in the localities in which the plaintiffs operate, continues basing the prevailing wage for plantsmen on the wage in the Laborers Contract.

The plaintiffs refuse to pay that wage, and have been sued by the Department in state court. Those suits have been stayed, however, pursuant to 735 ILCS 5/2–619(a)(3), which authorizes such a stay if there is another action pending between the same parties that involves the same claim. The other action is this suit, in which the plaintiffs argue that by rubber-stamping the wage rate in the Laborers Contract the Department has delegated a governmental function to private entities—the union, and the employers who have signed a collective bargaining contract with the union. (The stay makes the otherwise attractive option of the federal courts' abstaining in favor of the state court's enforcement action unavailable.) The plaintiffs contend that the money that the Department is seeking from them in its state court suits is their property (which it is), and that a state that delegates the taking of private property to a private entity violates the nondelegation doctrine of constitutional law (which is sometimes true).

The doctrine as usually understood and applied, however, just forbids Congress to delegate federal legislative powers, which are vested in Congress by Article I, section 1 of the Constitution, to agencies without giving them guidance on how the delegated powers should be exercised. Whitman v. American Trucking Associations, Inc., 531 U.S. 457, 472–76, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001); Mistretta v. United States, 488 U.S. 361, 371–73, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989); National Broadcasting Co. v. United States, 319 U.S. 190, 215–16, 225–26, 63 S.Ct. 997, 87 L.Ed. 1344 (1943) (Frankfurter, J.); Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin v. United States, 367 F.3d 650, 658–59 (7th Cir.2004). (Why guidance should make the delegation okay is unclear, especially since the guidance is often vague or open-ended.) But nothing in the Constitution prescribes the allocation of powers within state governments, Whalen v. United States, 445 U.S. 684, 689 n. 4, 100 S.Ct. 1432, 63 L.Ed.2d 715 (1980); Mayor of City of Philadelphia v. Educational Equality League, 415 U.S. 605, 615 and n. 13, 94 S.Ct. 1323, 39 L.Ed.2d 630 (1974); Chicago Observer, Inc. v. City of Chicago, 929 F.2d 325, 328 (7th Cir.1991); Straley v. Utah Board of Pardons, 582 F.3d 1208, 1215 (10th Cir.2009); Consolidated Edison Co. of New York, Inc. v. Pataki, 292 F.3d 338, 346 n. 4 (2d Cir.2002)—not even the clause guaranteeing to each state a republican form of government, Art. IV, § 4. For to be a “republic,” a state or nation need not parcel out powers among different branches in any particular fashion, such as that in the federal Constitution.

But an offshoot of the constitutional nondelegation doctrine that is applicable to the states forbids them to authorize private persons to deprive other private persons of life, liberty, or property without due process of law. The standard example is a law that empowers landowners to determine, by whim, how a neighbor may use his own property. Washington ex rel. Seattle Title Trust Co. v. Roberge, 278 U.S. 116, 121–22, 49 S.Ct. 50, 73 L.Ed. 210 (1928); Eubank v. City of Richmond, 226 U.S. 137, 143–44, 33 S.Ct. 76, 57 L.Ed. 156 (1912); cf. Philly's v. Byrne, 732 F.2d 87, 92 (7th Cir.1984); Young v. City of Simi Valley, 216 F.3d 807, 817–18 (9th Cir.2000).

But the present case is remote from that example. It doesn't involve a comparable threat to property rights, given settled law that, contrary to older understandings, authorizes a good deal of “delegated” encroachment on property rights. See Philly's v. Byrne, supra. A state can prescribe a minimum wage, which is bound to be based on private wage determinations, and it can require employers that have contracts with the state to pay their employees a prevailing wage, Atkin v. Kansas, 191 U.S. 207, 222–23, 24 S.Ct. 124, 48 L.Ed. 148 (1903); Frank Bros., Inc. v. Wisconsin Dep't of Transportation, 409 F.3d 880, 889–90 and n. 9 (7th Cir.2005), which is a minimum wage determined by reference to what private employers are paying. Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), upheld against a variety of constitutional challenges a state...