Cates v. Mosher Enters., Inc.

• Decision Date: 31 May 2017
• Docket Number: NO. A-1-CA-34867.,A-1-CA-34867.
• Citation: 403 P.3d 687
• Parties: William Shawn CATES and Bobby Cheresposy, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. MOSHER ENTERPRISES, INC., Defendant-Appellee/Third-Party Plaintiff, v. Flintco West, Inc., Third-Party Defendant.
• Court: Court of Appeals of New Mexico

403 P.3d 687

William Shawn CATES and Bobby Cheresposy, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants,

v.MOSHER ENTERPRISES, INC., Defendant-Appellee/Third-Party Plaintiff,

v.Flintco West, Inc., Third-Party Defendant.

NO. A-1-CA-34867.

Court of Appeals of New Mexico.

Filing Date: May 31, 2017

Youtz & Valdez, P.C., Shane C. Youtz, Stephen Curtice, James A. Montalbano, Albuquerque, NM, for Appellants.

Bingham, Hurst & Apodaca, P.C., Wayne E. Bingham, Albuquerque, NM for Appellee.

OPINION

JONATHAN B. SUTIN, Judge

{1}PlaintiffsWilliam Shawn Cates and Bobby Cheresposy, on behalf of themselves and all others similarly situated, appeal, contending that the district court erred in determining that it did not have jurisdiction to entertain their private action under the Public Works Minimum Wage Act (the Act), NMSA 1978, §§ 13-4-10 to -17 (1937, as amended through 2011).Plaintiffs sought to recover from DefendantMosher Enterprises, Inc. wages for 2009 work that they allege were incorrectly based on the 2008 prevailing wage determined by the Department of Workforce Solutions(the Department).The district court determined that the Act did not confer a private right of action and dismissed Plaintiffs' action for lack of jurisdiction, without prejudice, so that Plaintiffs could pursue their administrative remedies.We hold that the Legislature intended to create a private right of action under the Act.

BACKGROUND

{2}Plaintiffs sued, alleging that they and others similarly situated were not compensated the appropriate wage rate for all hours worked on a renovation project for the University of New Mexico.A class was certified, and each party filed a motion for summary judgment as to liability.During the hearing on the parties' motions for summary judgment, the district court raised sua sponte the question of whether the Act provided for a private right of action.Plaintiffs argued that "the intent of the [L]egislature was to make [a] provision for a private right of action."Plaintiffs referenced a ruling from a different district court judge determining that there was a private right of action under the Act and represented that "[i]t is one of those legal issues ... that parties to these cases don't litigate anymore."Plaintiffs explained that it was "generally accepted that there is a private right of action."

{3} Following the hearing, the district court issued a letter to counsel expressing concern about whether the Act permits a private action for damages without first exhausting administrative remedies.And the court invited supplemental briefing on the question.After supplemental briefing, the court determined that, unlike the New Mexico Minimum Wage Act, the Act does not confer a private right of action.The court reasoned that the "[Act]contemplates an administrative procedure and directs the Director to make the initial determination of [the Act] violations and the subsequent reference for appropriate legal action.The [Act] provides an appeal process of the Director's decision, first to the Labor and Industrial Commission and then to the District Court."(Citations omitted.)The court dismissed the case without prejudice to allow Plaintiffs the opportunity to pursue their administrative remedies before bringing the case before the district court.This appeal followed.

DISCUSSION

{4} At the heart of the controversy are statutory provisions that, with apologies for the length of the quoted material, we fully set out here.Section 13-4-14 reads:

A.The director shall certify to the contracting agency the names of persons or firms the director has found to have disregarded their obligations to employees under the ... Act and the amount of arrears.The contracting agency shall pay or cause to be paid to the affected laborers and mechanics, from any accrued payments withheld under the terms of the contract or designated for the project, any wages or fringe benefits found due to the workers pursuant to the ... Act.The director shall, after notice to the affected persons, distribute a list to all departments of the state giving the names of persons or firms the director has found to have willfully violated the ... Act.No contract or project shall be awarded to the persons or firms appearing on this list or to any firm, corporation, partnership or association in which the persons or firms have an interest until three years have elapsed from the date of publication of the list containing the names of the persons or firms.A person to be included on the list to be distributed may appeal the finding of the director as provided in the ... Act.

B.If the accrued payments withheld under the terms of the contract, as mentioned in Subsection A of this section, are insufficient to reimburse all the laborers and mechanics with respect to whom there has been a failure to pay the wages or fringe benefits required pursuant to the ... Act, the laborers and mechanics shall have the right of action or intervention or both against the contractor or person acting as a contractor and the contractor's or person's sureties, conferred by law upon the persons furnishing labor and materials, and, in such proceeding, it shall be no defense that the laborers and mechanics accepted or agreed to less than the required rate of wages or voluntarily made refunds.The director shall refer such matters to the district attorney in the appropriate county, and it is the duty and responsibility of the district attorney to bring civil suit for wages and fringe benefits due and liquidated damages provided for in Subsection C of this section.

C.In the event of any violation of the ... Act or implementing rules, the contractor, subcontractor, employer or a person acting as a contractor responsible for the violation shall be liable to any affected employee for the employee's unpaid wages or fringe benefits.In addition, the contractor, subcontractor, employer or person acting as a contractor shall be liable to any affected employee for liquidated damages beginning with the first day of covered employment in the sum of one hundred dollars ($100) for each calendar day on which a contractor, subcontractor, employer or person acting as a contractor has willfully required or permitted an individual laborer or mechanic to work in violation of the provisions of the ... Act.

D.In an action brought pursuant to Subsection C of this section, the court may award, in addition to all other remedies, attorney fees and costs to an employee adversely affected by a violation of the ... Act by a contractor, subcontractor, employer or person acting as a contractor.

(Citation omitted.)We note Plaintiffs' care to highlight Subsections (A) and (B) of Section 13-4-14 are comparable to sections of the federal Davis-Bacon Act (Davis-Bacon), 40 U.S.C. § 3144(2013), which read as follows:

(a) Payment of wages.—

(1) In general.—The Secretary of Labor shall pay directly to laborers and mechanics from any accrued payments withheld under the terms of a contract any wages found to be due laborers and mechanics under this subchapter.

(2) Right of action.—If the accrued payments withheld under the terms of the contract are insufficient to reimburse all the laborers and mechanics who have not been paid the wages required under this subchapter, the laborers and mechanics have the same right to bring a civil action and intervene against the contractor and the contractor's sureties as is conferred by law on persons furnishing labor or materials.In those proceedings it is not a defense that the laborers and mechanics accepted or agreed to accept less than the required rate of wages or voluntarily made refunds.

(b) List of contractors violating contracts.—(1) In general.—The Comptroller General shall distribute to all departments of the Federal Government a list of the names of persons whom the Comptroller General has found to have disregarded their obligations to employees and subcontractors.

(2) Restriction on awarding contracts.—No contract shall be awarded to persons appearing on the list or to any firm, corporation, partnership, or association in which the persons have an interest until three years have elapsed from the date of publication of the list.

Our Supreme Court has similarly noted the parallels between Subsections (A) and (B) of the Act and the Davis-Bacon legislation.SeeMem'l Med. Ctr., Inc. v. Tatsch Constr., Inc. , 2000-NMSC-030, ¶ 26, 129 N.M. 677, 12 P.3d 431.Subsections (C) and (D) of the Act, however, have no Davis-Bacon counterpart.Federal cases split on whether a private right of action exists under Davis-Bacon, with the majority holding against a private right of action.CompareOperating Eng'rs Health & Welfare Tr. Fund v. JWJ Contracting Co. , 135 F.3d 671, 676(9th Cir.1998)(recognizing that Davis-Bacon "does not create a private cause of action for employees"), with McDaniel v. Univ. of Chicago , 548 F.2d 689, 695(7th Cir.1977)("In sum, we hold that implying a private right of action in the Davis-Bacon Act is necessary to effectuate the intention of Congress in passing the statute.").

{5} On appeal, Plaintiffs argue that: (1)the Act, unlike Davis-Bacon, "clearly contemplates" a private right of action, as evidenced by the fact that the Act includes language making violators liable to employees and allowing employees to recover attorney fees; (2) employees are not required to exhaust administrative remedies prior to pursuing a private right of action; and (3)the district court erred in concluding that it lacked jurisdiction to hear this case.Because we hold that there is a private right of action that is separate and distinct from any administrative remedies in the Act, we need not and do not address Plaintiffs' second and third arguments regarding exhaustion of administrative remedies and jurisdiction, which would only be relevant if Plaintiffs' access to the district court were somehow contingent on an administrative process.

{6}...