Bodrick v. Mayfair Const. Corp.

• Decision Date: 26 February 1976
• Citation: 346 N.E.2d 820,382 N.Y.S.2d 982,38 N.Y.2d 926
• Parties: , 346 N.E.2d 820, 22 Wage & Hour Cas. (BNA) 1205, 79 Lab.Cas. P 33,427 Freddie BODRICK et al., Respondents, v. MAYFAIR CONSTRUCTION CORP., Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 982

382 N.Y.S.2d 982

38 N.Y.2d 926, 346 N.E.2d 820, 22

Wage & Hour Cas. (BNA) 1205,

79 Lab.Cas. P 33,427

Freddie BODRICK et al., Respondents, v. MAYFAIR CONSTRUCTION CORP., Appellant.

Court of Appeals of New York.

Feb. 26, 1976.

Francis Bergan, Albany, Samuel Kirschenbaum and Thomas C. Lambert, New York City, for appellant.

Milton Horowitz and Samuel Panzer, New York City, for respondents.

MEMORANDUM:

The order of the Appellate Division should be affirmed and the certified question answered in the negative.

The regulations of subtitle A of title 29 of the Code of Federal Regulations, as adopted by the United States Secretary of Labor and existing during the period in question, evidenced a design and charting of course for the conduct of investigations and hearings in prevailing wage disputes only as the secretary, in his discretion, deemed appropriate or desirable (see, e.g., 29 CFR 5.10). There being no exclusive administrative remedy prescribed therein, the aggrieved employees were empowered to enforce, by private litigation, the benefits afforded them under the National Housing Act, as set forth in section 1701 Et seq. of title 12 of the United States Code (cf. Filardo v. Foley Bros., 297 N.Y. 217, 78 N.E.2d 480, revd. on other grounds 336 U.S. 281, 69 S.Ct. 575, 93 L.Ed. 680), even though the regulations, made pursuant to statute, did not explicitly authorize a civil remedy (cf. Case Co. v. Borak, 377 U.S. 426, 432, 84 S.Ct. 1555, 12 L.Ed.2d 423; Texas & Pacific Ry. v. Rigsby, 241 U.S. 33, 39, 36 S.Ct. 482, 60 L.Ed. 874; Jordan Bldg. Corp. v. Doyle, O'Connor & Co., 7 Cir., 401 F.2d 47, 49--50; Fischman v. Raytheon Mfg. Co., 2 Cir., 188 F.2d 783, 787).

JASEN, Judge (dissenting).

I dissent and vote to reverse the order of the Appellate Division and dismiss the first cause of action on the ground that the courts of this State lack the necessary subject matter jurisdiction and may not, therefore, entertain the action.

Plaintiffs are nonunion laborers and mechanics who were employed by defendant Mayfair Construction Corp. at various times between August 29, 1962 and May 6, 1964. They had been hired to work on certain construction projects in Manhattan which were financed under the National Housing Act by a building loan insured by the Federal Housing Administration (hereinafter 'FHA'). Their complaint in this action alleged two causes of action; only the first of those causes is before us on this appeal. This cause of action is bottomed on the Federal statutory provision which requires that laborers and mechanics employed on construction projects involving Federal loan insurance be paid not less than the wages prevailing in the locality for the corresponding classes of laborers and mechanics, as determined by the Secretary of Labor. (U.S.Code, tit. 12, § 1715c, subd. (a).) Plaintiffs allege that they were paid less than the applicable prevailing wage, and seek to recover the difference.

The relevant factual background of this controversy is set out in neither the Appellate Division opinion nor the memorandum of this court in which a majority of my colleagues concur. In early 1964, the FHA reviewed Mayfair's payroll and determined that none of the plaintiffs had been paid the appropriate prevailing wage. Plaintiffs concede that this review was made after some of them had made complaints to FHA representatives. As a result of this investigation, the commissioner ordered that appropriate restitution be made to the employees. These payments were made by Mayfair's checks dated May 5, 1964, which, in accordance with FHA procedure, were sent to the FHA, which in turn mailed the checks to the individual employees, together with a letter of transmittal. These form letters read as follows:

'Enclosed is a check in the amount of --- drawn payable to you by your employer at the above named project. The sum represents a reimbursement to you of wages inasmuch as payroll records prepared by your employer indicated that you were paid at an hourly rate less than the rate established for this project by the Secretary of Labor.

'This Administration has been in charge of the examination of payroll records for this project and has determined that the check in the amount stated is proper compensation for your work.'

All of these checks were promptly cashed. Thereafter, for reasons not explained in the record, nine of the plaintiffs received additional checks, dated August 24, 1964, accompanied by the same FHA form letter of transmittal. However, on the reverse side of each of these checks, the following indorsement was printed: 'The undersigned acknowledges and agrees that the acceptance of this check constitutes payment in full and a complete and general release of all claims against Mayfair Construction Corp.' These checks likewise were accepted and cashed promptly.

Under regulations promulgated by the Secretary of Labor, '(t)he Agency Head may, in appropriate cases where violations of * * * the applicable statutes listed in § 5.1 resulting in underpayment of wages to employees are found to be nonwillful, order that restitution be made to such employees.' (29 CFR 5.10(a), 29 Fed.Reg. 103 (1964).) Those regulations list the National Housing Act as one of the statutes to which this regulation applies. (29 CFR 5.1(a), 29 Fed.Reg. 99 (1964).) Thus, the FHA Commissioner was clearly empowered to act as he did here. Indeed, plaintiffs do not contend otherwise.

Not fully satisfied with this determination by the FHA, the plaintiffs commenced this action on May 11, 1964, less than one week after the first set of checks were sent out. After answering the complaint and asserting certain affirmative defenses, Mayfair moved for an order dismissing the complaint upon the grounds, Inter alia, that the court did not have subject matter jurisdiction and that the complaint failed to state a cause of action. (CPLR 3211, subd. (a), pars. 2, 7.) Supreme Court granted this motion only as to the first cause of action. Its rationale was that the National Housing Act did not give aggrieved employees the right to maintain a private action. The Appellate Division reversed, on the law, and denied defendant's motion to dismiss the first cause of action. It reasoned that the right of aggrieved employees to maintain a private suit was implied, relying on Filardo v. Foley Bros., 297 N.Y. 217, 78 N.E.2d 480, revd. on other grounds 336 U.S. 281, 69 S.Ct. 575, 93 L.Ed. 680. That same court granted Mayfair's motion for leave to appeal, certifying for our review the following question: 'Is the First Cause of Action pleaded in the Complaint dismissable as a matter of law?'

The courts of this State have long recognized the rule that our State courts have no power to revise or review official acts performed by Federal officials acting under authority of acts of Congress and regulations promulgated under such laws. For example, Matter of Armand Schmoll, Inc. v. Federal Reserve Bank of N.Y., 286 N.Y. 503, 37 N.E.2d 225, was a case in which an importer claimed that the Federal Reserve Bank had failed to determine the 'buying rate for cable transfers' in a manner directed by Federal statute, and commenced an article 78 proceeding to compel the Federal Reserve Bank to make its determination in the manner provided by law. In affirming a dismissal of the petition on the ground that there was no subject matter jurisdiction, Chief Judge Lehman, writing for the court, acknowledged that many cases could be cited to 'sustain the power of a state court acting within the field of its allotted jurisdiction, to enforce rights created by federal statute and to remedy wrongs committed by federal officers under color of authority granted by federal statutes' but observed that '(n)o case has been cited which holds that a state court may go outside that field and control the manner in which a federal agency performs or attempts to...