Gregory Electric Co. v. United States Dept. of Labor

• Decision Date: 29 May 1967
• Docket Number: Civ. A. No. 66-569.
• Citation: 268 F. Supp. 987
• Parties: GREGORY ELECTRIC CO., Inc., Carolina Electric Co., Inc., Cashion Electricians, Inc., and Seastrunk Electric Company, Plaintiffs, v. UNITED STATES DEPARTMENT OF LABOR, an Agency of the United States Government, Defendant.
• Court: U.S. District Court — District of South Carolina

268 F. Supp. 987

GREGORY ELECTRIC CO., Inc., Carolina Electric Co., Inc., Cashion Electricians, Inc., and Seastrunk Electric Company, Plaintiffs, v. UNITED STATES DEPARTMENT OF LABOR, an Agency of the United States Government, Defendant.

Civ. A. No. 66-569.

United States District Court D. South Carolina, Columbia Division.

May 29, 1967.

COPYRIGHT MATERIAL OMITTED

L. G. Funderburk, Columbia, S. C., for plaintiff.

Wistar D. Stuckey, Asst. U. S. Atty., Columbia, S. C., David J. Anderson, U. S. Dept. of Justice, Washington, D. C., for defendant.

ORDER

SIMONS, District Judge.

This is an action in which plaintiffs are seeking to require defendant, United States Department of Labor, to approve and register their proposed apprenticeship program for the electrical trade in Columbia, South Carolina. The Department's Bureau of Apprenticeship and Training declined to do so when plaintiffs' program was presented to it for consideration. This action is based upon the National Apprenticeship Act and the Davis-Bacon Act. Defendant has moved to dismiss the action upon grounds that the complaint does not state a claim upon which relief can be granted under Rule 12(b) (6) of the Federal Rules of Civil Procedure in that plaintiffs lack standing to maintain the action, that the suit is in reality against the United States, that no consent has been given to maintain it, and that this court lacks jurisdiction.

The National Apprenticeship Act of 1937, 29 U.S.C.A. § 50, provides in pertinent part as follows:

"§ 50. Promotion of labor standards of apprenticeship

"The Secretary of Labor is authorized and directed to formulate and promote the furtherance of labor standards necessary to safeguard the welfare of apprentices, to extend the application of such standards by encouraging the inclusion thereof in contracts of apprenticeship, to bring together employers and labor for the formulation of programs of apprenticeship, to cooperate with State agencies engaged in the formulation and promotion of standards of apprenticeship, and to cooperate with the Office of Education under the Department of Health, Education, and Welfare in accordance with section 17 of Title 20."

The Secretary has delegated his responsibility under the Act to the Administrator of the Department's Bureau of Apprenticeship and Training. The Bureau follows this procedure: When a labor, management, or joint group in a particular trade and area desires to establish an apprenticeship program for that trade, they may request the Bureau Representative in their area to assist them in the establishment of a program conforming to the Bureau's guidelines. The announced policy of the Bureau has been to encourage as a standard, the establishment of one apprenticeship program in a trade in each area, such program to be jointly sponsored by labor and management. If a group of nonunion employers, such as plaintiffs, refuse, after consultation with and encouragement by the Bureau representative, to join an existing joint program, the Bureau in a directive to its agents, Circular No. 63-81, dated April 29, 1963 has authorized them to assist such nonunion groups in the establishment of their own program. This circular in part reads as follows:

"Purpose—To clarify policy and outline procedures with respect to the promotion of apprenticeship programs among nonunion employers in a trade and area where a local jointly sponsored trade apprenticeship program is registered and operating.

"Background—Bureau responsibility under Public Law 308 is to provide impartial service and assistance to all industry in the establishment of apprenticeship programs, whether or not labor-management agreements are involved; and assure that such programs contain standards that will safeguard the welfare of apprentices.

"Basic Policy—A registered area-wide trade apprenticeship program, sponsored jointly by labor and management, shall be regarded as the basic standards for that trade within the geographical area covered by the program. (If there are no registered area-wide joint apprenticeship standards for the trade in the local area, then the recommended national standards for the industry or trade, where they exist, shall be used as a guide in establishing local programs.)

"A. When a non-union employer or a group of non-union employers request assistance from the Bureau in establishing an apprenticeship program in a trade and area for which a jointly sponsored apprenticeship program is already registered, the Bureau staff shall:

"1. Exert every proper effort to persuade the employer or employers to accept and participate in the existing area trade program.

"2. If there is refusal to participate in such area program, or the local joint apprenticeship committee will not permit such participation, the Bureau staff after making every proper effort to persuade the local joint apprenticeship program will then assist the employer or group of employers to establish an apprenticeship program. The standards should equal or exceed those already registered for the trade and area, as well as the basic national standards of the industry concerned as filed with the Bureau of Apprenticeship and Training."

Such circular does not appear in the Code of Federal Regulations, nor has it been published in the Federal Register.

Columbia, South Carolina has an existing registered Apprenticeship Program in the Electrical Trade sponsored by a Joint Labor Management Council which satisfies the standard of one joint program in that area. Plaintiffs were invited to join the existing joint program but determined not to do so. Plaintiffs then brought this action to compel the Bureau to approve and register their proposed program. The disadvantage plaintiffs are under and part of the injury they allege by not participating in a registered apprentice program can be determined by that portion of the Davis-Bacon Act, 40 U.S.C.A. § 276a-2 giving the Secretary of Labor authority to determine minimum wages to be paid various classes of laborers and mechanics in government construction contracts. In his regulations, 29 C.F.R. § 5.5(a) (4), the Secretary has determined that a government contractor may only employ apprentices as such (which class has minimum wage rates that are less than the journeyman classification) "only when they are registered, individually, under a bona fide apprenticeship program * * * registered with the Bureau of Apprenticeship and Training, United States Department of Labor * * *." Logically the effect of this provision is to make lower costs possible for a contractor on government projects by allowing him to pay some of his employees at apprentice rates rather than at journeyman rates which consequent opportunity to the contractor to make lower bids and obtain more government contracts.

The issues presented here by the motion to dismiss are of "standing" and this has been referred to by the Supreme Court as a "complicated specialty of federal jurisdiction". United States ex rel. Chapman v. Federal Power Commission, 345 U.S. 153, 156, 73 S.Ct. 609, 97 L.Ed. 918 (1953). See also Davis, Administrative Law Text §§ 22.01-to-.18 (1958).

Section 10 of the Administrative Procedure Act formalizes the federal law of "standing". It provides, in part:

"§ 1009. Judicial review of agency action

"Except so far as (1) statutes preclude agency review or (2) agency action is by law committed to agency discretion.

"Rights of review

"(a) Any person suffering legal wrong because of any agency action, or adversely affected or aggrieved by such action within the meaning of any relevant statute, shall be entitled to judicial review thereof." 5 U.S.C.A. § 1009 (1946).

Therefore, plaintiffs in order to have standing to maintain this action must show first that the determination complained of was not an "agency action * * * by law committed to agency discretion", or, secondly, that they have suffered a "legal wrong" or have been "adversely affected or aggrieved * * * within the meaning of any relevant statute".

The Administrative Procedure Act clearly precludes judicial review in situations where "agency action is by law committed to agency discretion". 5 U.S.C.A. § 1009(2). Plaintiffs in their brief imply that the Administrative Procedure Act requires an express statement that the agency action involved is committed to the agency's discretion. The court cannot agree with such a construction of the Act. Where the overall statutory scheme indicates discretion on the part of an administrator, it is committed to the discretion of the officer or agency within the meaning of the Statute. Panama Canal Company v. Grace Line, Inc., 356 U.S. 309, 78 S.Ct. 752, 2 L.Ed.2d 788 (1958).

The National Apprenticeship Act, 29 U.S.C.A. § 50 is written in very broad terms. It contains a wide grant of authority to the Secretary of Labor to develop and promote standards of training for apprentices, and to give such standards the widest possible application. This delegation of such authority recognizes a particular expertise of the Secretary of Labor in such matters. The Secretary has created an agency within the Department of Labor, the Bureau of Apprenticeship and Training, which further specializes in these matters. Should this Court substitute its judgment for that of the Bureau in determining how it should best carry out its statutory functions? The Supreme Court in Panama Canal Company v. Grace Line, Inc., supra, has indicated that such substitution of judgment, in matters of discretion such as the one involved in the instant case, is improper.

"Section 10 of the Administrative Procedure Act, 60 Stat. 243, 5 U.S.C. § 1009, 5 U.S.C.A. § 1009, excludes from the categories of cases subject to judicial review `agency action' that is `by law committed to agency discretion.' We think the initiation of a proceeding for readjustment of the tolls of the Panama Canal is a matter that Congress has left to the discretion of the Panama Canal Co. Petitioner

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