Foundation for Fair Contracting v. G & M Eastern, Civil No. 01-0034(JBS).

• Decision Date: 29 April 2003
• Docket Number: Civil No. 01-0034(JBS).
• Citation: 259 F.Supp.2d 329
• Parties: FOUNDATION FOR FAIR CONTRACTING, LTD., Plaintiff, v. G & M EASTERN CONTRACTING & DOUBLE E, LLC, Defendants.
• Court: U.S. District Court — District of New Jersey

259 F.Supp.2d 329

FOUNDATION FOR FAIR CONTRACTING, LTD., Plaintiff, v. G & M EASTERN CONTRACTING & DOUBLE E, LLC, Defendants.

Civil No. 01-0034(JBS).

United States District Court, D. New Jersey.

April 29, 2003.

Steven A. Berkowitz, Esquire, Berkowitz & Associates, P.C., Marlton, NJ, for Foundation for Fair Contracting, Ltd.

Thomas Joseph Hirsch, Ocean, NJ, for G & M Eastern Contracting, Inc.

OPINION

SIMANDLE, District Judge.

This matter comes before the Court upon defendant G & M Eastern Contracting's motion for summary judgment, and plaintiff Foundation for Fair Contracting's cross-motion for partial summary judgment. Plaintiff Foundation for Fair Contracting ("FFC") is a nonprofit organization in New Jersey that monitors public works projects for compliance with state and federal wage laws, and defendant G & M Eastern Contracting ("G & M") does public contracting work in New Jersey, primarily for housing authorities, such as the Camden Housing Authority. Defendant G & M had entered into a contract with the Camden Housing Authority for contracting work on the "Roosevelt Manor Project."

FFC brings the present case as a "Relator" under the False Claims Act, 31 U.S.C. § 3730(b)(1), asserting that defendants G & M and Double E violated the Davis-Bacon Act, 40 U.S.C. § 276a, et seq., by submitting false wage certifications to the Camden Housing Authority on a project funded by the U.S. Department of Housing and Urban Development ("HUD") wherein defendants misclassified workers, paying them less than what is required, in violation of the Davis-Bacon Act, and misstating the numbers of hours worked and employees utilized. The principal issue presented is whether these claims are jurisdictionally barred because they were already "subject of a civil suit or an administrative civil money penalty proceeding" in which the government was a party, pursuant to 31 U.S.C. § 3730(e)(3), infra. For the reasons discussed herein, defendant G & M's motion for summary judgment will be viewed as a motion to dismiss for lack of subject matter jurisdiction which will be granted, and plaintiff FFC's cross-motion for summary judgment will be denied, and the Amended Complaint will be dismissed for lack of subject matter jurisdiction.

I. BACKGROUND

The Camden Housing Authority put out an Invitation to Bid on a project known as "Pitched Roof, Mechanical Room Construction and Heating System Replacement for Branch Village NJ10-1, Roosevelt Manor NJ10-3" (hereinafter "Roosevelt Manor Project" or "Project"). (Sariotis Aff. ¶ 10.) G & M submitted a bid for the project on December 1, 1999, and was awarded the contract on December 21, 1999. (Id. ¶ 11.) G & M received its Notice to Proceed on January 3, 2000, and thereafter commenced work on the Project, and continues to work on the Project at the present time. (Id. ¶ 12.)

G & M was provided an initial wage determination with the contract prior to bid, (Sariotis Aff. 1114 & Ex. B), but an addendum to the bid forms was issued prior to the bid indicating there was going to be a modification to the wage determination, (Id. Ex. C), which G & M never received. (Id. 1115.) Subsequently, the Camden Housing Authority supplied not a modification but a new wage determination which would have required G & M to pay substantially more wages for certain trades. (Id. Ex. D.)

In July 2000, the Carpenter's Local Union 393 in Gloucester, New Jersey, requested FFC to investigate payment practices at the Project, at which point Thomas St. John, Director of plaintiff FFC, began an investigation. (St. John Aff. ¶¶ 4-5.) Thomas St. John had received a phone call from Ron Kraus of the carpenters local union. (St. John Depo. 10/11/02, at 43.) Kraus stated that he had been at the project site speaking to G & M and Double E workers, who indicated to him that they were not properly classified and not being paid the prevailing wages as required by the Davis-Bacon Act. (Id.; St. John Aff. ¶ 6.) Kraus later brought those workers to St. John's office in August 2000, at which point St. John took their statements as part of the investigation. (St. John Depo. 10/11/02, at 43-48; Pierce Aff., St. John Aff. Ex. A; Paulk Aff, St. John Aff. Ex. B; Nock Aff., St. John Aff. Ex. C.) St. John, as part of his investigation, also requested and received partial certified payroll records from Camden Housing Authority in July 2000, (St. John Aff. ¶ 7), and received copies of the workers' paycheck stubs and paychecks. (St. John Aff. ¶ 12 & Ex. D.)

On or about July 26, 2000, Christina Tinsley, a Program/Budget Analyst of the Camden City Housing Authority, (Tinsley

Aff. ¶ 1), raised the issue of G & M's noncompliance with Department of Labor wage rates in a letter to George Sariotis, Vice President of G & M. (Tinsley Letter, 7/26/00, Sariotis Aff. Ex. A; Sariotis Aff. ¶ 17.) After speaking to each other in a telephone conversation on August 9, 2000, Sariotis responded by letter dated August 14, 2000, in which he addressed the reasons why G & M believed the new wage determination was in error. (Sariotis Letter, 8/14/00, Sariotis Aff. Ex. E.) In the letter, Sariotis suggested that the Camden Housing Authority withhold payments from G & M and place them in an escrow account until the matter was resolved. (Id.; Sariotis Aff. If 17.)

Thomas St. John sent to Tinsley the copies of the affidavits dated August 31, 2000, of Guy Pierce, an employee of G & M, and Walter Nock and Leonard Paulk, employees of Double E, all of whom were interviewed by Thomas St. John, regarding their wages, as discussed above. (Tinsley Aff. ¶ 4.) St. John spoke with HUD Special Agent Mark Higgins of the Office of the Inspector General regarding the Davis-Bacon Act violations, and turned over documentation supporting the worker's claims. (St. John Aff. ¶ 12.) St. John also sent a letter dated September 20, 2000, to Ruth Ritzema of the Office of the Inspector General, notifying her of the Davis-Bacon violations allegedly being committed by G & M and Double E, and stating that he had already turned over documents to Higgins regarding this. (St. John Aff. 1115.) Tinsley was copied on this letter. (Tinsley Aff. ¶3.) Based on the information in St. John's letter as well as he workers' affidavits, Tinsley contacted the DOL via telephone on October 30, 2000, and agreed to meet with DOL regarding the alleged violations of G & M. (Id. II 5 & Ex. A.)

It appears that G & M believed the wage determinations issue to arise out of an error in the addendum to the wage determinations that G & M had allegedly never received. G & M's attorney sent a letter dated October 23, 2000, seeking the two wage determinations issued by the DOL for the Camden Housing Authority for certain trades, one bearing General Decision No. NJ990001 and the other Decision No. NJ990005, as well as the collective bargaining agreements on which those wage determinations were based. (Sariotis Aff. 1119 & Ex. F.) After further communications between G & M and DOL, a letter from Terry Sullivan of Wage Determinations of DOL was sent to Wayne Horbert, Director of Office of Labor Relations of HUD, on or around July 11, 2001, indicating that 2 wage rates for Carpenters, Drywall Hangers (# CARP0623B) and Plumbers/Pipefitters (# PLUM0322A) were erroneous, and should have been lower. (Sariotis Aff. Ex. H.)

Meanwhile, DOL conducted an investigation regarding the wages and proper classifications of G & M's workers after receiving word from Tinsley in October 2000 about the possible Davis-Bacon Act violations.¹ See DOL Investigation, Attachmt. to PL's Br. The DOL investigation concluded that rates within the wage determination in the contract were incorrect and should have been lower:

                [I]t was determined that 990001 was the wage determination contained in the contract, but
                that two rates contained therein, the carpenter's rate and the plumber's rate, were not
                residential rates. As a result, the Wage & Hour National Office issues a Letter of
                Inadvertence (LOI) changing those rates to the same rates that were contained in NJ
                990005. The rates were therefore changed as follows
                Classification Original rate in 990001 Rate per LOI
                Carpenter, drywall Hangers   $27.14 base; 42% + $.15 fringe       $18.57 + 28%
                Plumber/pipefitter           $26.46 base; $15.10 fringe           $14.8; $5.80
                

(DOL Investigation Report, Attachmt. to PL's Br, at GM007447.) In addition, the DOL concluded that certain workers were misclassified at Double E, Mozak Plumbing and G & M, and that employees' work logs at Double E did not match those of payroll certifications submitted. (Id.) The DOL investigation reported that Double E would pay $28,330.27 for back wages; Mozak Plumbing would pay $32,993.09 for back wages; and G & M would pay $17,195.74 for back wages. (Id.)

In a letter to Christina Tinsley of the Camden Housing Authority dated February 11, 2002, Corlis Sellers of the Department of Labor reported that the DOL had concluded an investigation of G & M and Double E under the Davis Bacon and Related Acts (DBRA), and the Contract Work Hours and Safety Standards Act. (Sellers Letter, 2/11/02, Def.'s Br. Ex. A.) The letter indicated that the investigation disclosed monetary violations resulting from misclassification, and that DBRA back wages found to be due had been paid in the amount of $17,195.74 by G & M, and $28,330.27 by Double E.² (Id.)

In the DOL investigation, G & M was represented by its attorney, Thomas Hirsch, Esq. Hirsch's letter to John Kelly of DOL dated January 30, 2002, states that "G & M contests the classification of its employees as determined by the Department of Labor," but was nevertheless enclosing four bank checks to settle the matter with the DOL as to Double E, Ray Mozak Plumbing, and G & M.³,⁴ (Hirsch Letter, 1/30/02, Sariotis Aff. Ex. N.) In a letter dated February 19, 2002, to Hirsch, John Kelly of the DOL wrote that the recent investigation, which covered the period March 1, 2000 to March 1, 2002, disclosed that...