Framlau Corporation v. Dembling

CourtUnited States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
Citation360 F. Supp. 806
Docket NumberCiv. A. No. 72-1156.
PartiesFRAMLAU CORPORATION v. Paul G. DEMBLING, Comptroller General of the United States et al.
Decision Date14 June 1973

Fell, Spaulding, Goff & Rubin by Robert S. Dubin and Stephen R. Bolden, Philadelphia, Pa., for plaintiff.

U. S. Atty. Robert E. J. Curran by Asst. U. S. Atty. Henry J. Horstmann, Philadelphia, Pa., for defendants.



This matter is now before the Court on defendants' motion to dismiss plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b).

Plaintiff is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, and at all times material hereto was engaged in the performance of work as general contractor for the Department of the Navy. Plaintiff has named as defendants (hereinafter referred to as "The Government"), Paul G. Dembling, Comptroller General of the United States, John H. Chafee, Secretary of the Navy, and John Shultz, Secretary of Labor, who, at all times material hereto, were engaged in duties vested in them under statutes of the United States.

Essentially, plaintiff is alleging the constitutional infirmity of the procedure employed during a hearing before the Wage Appeals Board held pursuant to 29 C.F.R. § 7.1(e), and 40 U.S.C. § 276a et seq. Plaintiff seeks to have this Court enjoin the Comptroller General from disbursing funds to thirteen of its employees, to declare the procedure of the Wage Appeals Board violative of due process, and to order the Comptroller General to pay plaintiff certain funds withheld from the plaintiff by the Government for direct payment to plaintiff's employees.

I Subject Matter Jurisdiction

The government first moves to dismiss on the ground that plaintiff has failed to cite a valid jurisdictional basis for the complaint. In its complaint, plaintiff avers subject matter jurisdiction based on 5 U.S.C. § 702, governing appeals from administrative decisions, and 28 U.S.C. § 2202, providing further relief based on a declaratory judgment. Since the Administrative Procedure Act, 5 U.S.C. § 701 et seq. is remedial and not jurisdictional it cannot serve as an independent basis for jurisdiction here. Zimmerman v. United States Government, 422 F.2d 326, 330 (3rd Cir. 1970); Local 542, International Union of Operating Engineers v. N.L.R.B., 328 F.2d 850, 854 (3rd Cir. 1964), cert. denied, 379 U.S. 826, 85 S.Ct. 52, 13 L.Ed.2d 35 (1964); Pan American World Airways, Inc. v. C.A.B., 129 U.S.App.D.C. 159, 392 F.2d 483, 494 (1968); Twin Cities Chippewa Tribal C. v. Minnesota Chippewa Tribe, 370 F.2d 529, 532 (8th Cir. 1967); Ove Gustavsson Contracting Company v. Floete, 278 F.2d 912, 914 (2nd Cir. 1960), cert. denied, 364 U.S. 894, 81 S.Ct. 225, 5 L.Ed.2d 188 (1960). Similarly, the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202, is not a jurisdictional statute and does not confer subject matter jurisdiction where none otherwise exists. This enactment merely creates a specific type of relief available in actions where the federal district court already has jurisdiction. Jarrett v. Resor, 426 F.2d 213, 216 (9th Cir. 1970); Ragoni v. United States, 424 F.2d 261, 264 (3rd Cir. 1970); Langston v. United States Attorney General, 293 F.2d 316, 317 (3rd Cir. 1961); Venson v. State Board of Parole and Probation, 384 F.2d 238, 239 (9th Cir. 1967); Mattingly v. Elias, 325 F. Supp. 1374, 1375 (E.D.Pa.1971); Conover v. Montemuro, 304 F.Supp. 259, 261 (E.D.Pa.1969); Jones v. Board of Parole, Commonwealth of Pa., 281 F.Supp. 62, 63 (E.D.Pa.1968); North Allegheny J. Sch. Sys. v. Secretary of Health, etc., 196 F.Supp. 144, 147 (W.D.Pa.1961); Ambassade Realty Corporation v. Winkler, 83 F.Supp. 227, 228 (D.Mass.1949).

Although plaintiff has failed to cite a valid jurisdictional statute as a basis for its complaint, Rule 8(a)(1) of the Federal Rules of Civil Procedure only requires that a pleading setting forth a claim for relief contain a short and plain statement of the grounds upon which the Court's jurisdiction depends. If there is a statement in the complaint sufficient to give the court jurisdiction, the particular statute conferring jurisdiction need not be specifically pleaded. Williams v. United States, 405 F.2d 951, 954 (9th Cir. 1969); Chasis v. Progress Manufacturing Company, 382 F.2d 773, 776 (3rd Cir. 1967); Sikora v. Brenner, 126 U.S.App.D.C. 357, 379 F.2d 134, 136 (1967); Paynes v. Lee, 377 F.2d 61, 63 (5th Cir. 1967); Ivey v. Frost, 346 F.2d 115 (8th Cir. 1965); Eidschun v. Pierce, 335 F.Supp. 603, 615 (S.D.Iowa 1971); Uhler v. Commonwealth of Pennsylvania, 321 F.Supp. 490, 491 (E.D.Pa.1970). Plaintiff has cited facts sufficient to satisfy Rule 8(a)(1) of the Federal Rules of Civil Procedure in that, plaintiff's allegations come within the provision of 28 U.S.C. § 1346(a)(2) which provides that "the district courts shall have original jurisdiction, concurrent with the Court of Claims, of . . . any . . . civil action or claim against the United States, not exceeding $10,000 in amount founded either upon the Constitution, or any Act of Congress. . . ." In the case at bar, plaintiff has alleged that it was denied its right, to due process, as guaranteed by the Fifth Amendment to the United States Constitution; the amount in controversy does not exceed $10,000.

The Government next argues that since plaintiff's claim concerns an interpretation by the Secretary of Labor of his own prevailing wage determination, i. e., what activities constitute the work of a plumber, electrician, etc., and what phases of the construction activities constitute the work of a laborer, it is not subject to judicial review. We agree that a decision of the Secretary of Labor regarding the scope of a classification is part of the wage determination process and exclusively within his jurisdiction and that the correctness of his determination of wage rates is not subject to judicial review. United States v. Binghamton Construction Co., 347 U.S. 171, 74 S.Ct. 438, 98 L.Ed. 594 (1954); Burnett Construction Company v. United States, 413 F.2d 563, 188 Ct.Cl. 958 (1969); Nello L. Teer Co. v. United States, 348 F.2d 533, 172 Ct.Cl. 255 (1965), cert. denied, 383 U.S. 934, 86 S. Ct. 1065, 15 L.Ed.2d 852 (1966). However, plaintiff does not seek a review of the substantive content of the Government's decision but rather a review of the alleged absence of due process in reaching the decision. The Court has satisfied itself that it has jurisdiction, based on plaintiff's allegation of denial of due process, to review the process of determination as distinguished from the correctness of the Secretary of Labor's determination regarding prevailing wage rates or proper classifications.


Failure to State A Claim upon Which Relief can be granted

Plaintiff's complaint and the exhibit1 attached thereto reveal the following sequence of events:

On June 29, 1967, a construction contract was awarded by the Department of Navy to plaintiff for the construction of a modern training center at Avoca, Pennsylvania. Included in the contract specifications were the contract clauses required by 29 C.F.R. § 5.5 and Department of Labor Decision AG-9, 726. Among other things, 29 C.F.R. § 5.5 provides as follows:

"The contractor will submit weekly a copy of all payrolls to the agency . . . The copy shall be accompanied by a statement signed by the employer or his agent indicating that the payrolls are correct and complete, that the wage rates contained therein are not less than those determined by the Secretary of Labor and that the classifications set forth for each laborer or mechanic conform with the work he performed. . . ."

Pursuant to a labor standard compliance investigation made of plaintiff, the Department of Navy discovered that thirteen employees of plaintiff had been underpaid in violation of the Davis-Bacon Act, 40 U.S.C. § 276a et seq., the Contract Work Hours and Safety Standards Act, 40 U.S.C. § 327 et seq., and of contract requirements relating thereto. Upon plaintiff's refusal to pay $2,949.94 in restitution and liquidated damages found due, the Department of Navy transferred the complete record to the Department of Labor pursuant to 29 C. F.R. Part 5, recommending debarment of plaintiff and withholding from amounts otherwise due plaintiff, sufficient funds to cover the sum of restitution and damages.

In a letter setting forth in detail the violations charged, and a summary of the investigative findings, the Deputy Administrator, Wage and Hour and Public Contracts Division, United States Department of Labor, offered plaintiff an opportunity to present evidence in rebuttal at an informal proceeding before the Regional Director in Philadelphia. Subsequently, pursuant to 29 C.F.R. § 5.6(c), this informal hearing was held in Philadelphia on November 25, 1969. The Regional Director as Hearing Officer, considered the oral testimony of Joseph W. Montgomery, President of plaintiff, Framlau Corporation, Richard Montgomery, Secretary of Framlau Corporation, and representatives of the Department of Navy, as well as documentary evidence contained within the investigation file. The decision of the Regional Director upheld the findings of the Navy Department that, inter alia, plaintiff had violated the contract labor standards provisions of the contract required by the Davis-Bacon Act and the Contract Work Standards Act.

On December 10, 1969, the Regional Director communicated his decision in the matter to the contractor pointing out that plaintiff had the right to file objections with the Solicitor of Labor pursuant to 29 C.F.R. § 5.6. On December 23, 1969, plaintiff filed an appeal before the Solicitor. However, in order to assure that the record reflected that plaintiff had had notice and an opportunity to fully rebut the charges made in the Deputy Administrator's October 17th letter, the matter was remanded on May 7, 1970, to...

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