International Brotherhood of Electrical Workers v. Board of Harbor Commissioners

• Decision Date: 29 March 1977
• Docket Number: AFL-CIO
• Citation: 137 Cal.Rptr. 372,68 Cal.App.3d 556
• Court: California Court of Appeals Court of Appeals
• Parties: , 23 Wage & Hour Cas. (BNA) 568, 82 Lab.Cas. P 55,083 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS,, an unincorporated association, Plaintiff and Appellant, v. BOARD OF HARBOR COMMISSIONERS OF the CITY OF LONG BEACH et al., Defendants and Respondents. Civ. 48952.

Page 372

137 Cal.Rptr. 372

68 Cal.App.3d 556, 23 Wage & Hour Cas. (BNA) 568,

82 Lab.Cas. P 55,083

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, an unincorporated association, Plaintiff and Appellant, v. BOARD OF HARBOR COMMISSIONERS OF the CITY OF LONG BEACH et al., Defendants and Respondents.

Civ. 48952.

Court of Appeal, Second District, Division 4, California.

March 29, 1977.

Hearing Denied May 26, 1977.

Silver & McWilliams and Edwin Silver, Wilmington, for plaintiff and appellant

Leonard Putman, City Atty., Long Beach, Robert G. Austin and George R. August, Deputy City Attys., for defendants and respondents, Board of Harbor Comm'rs and City of Long Beach.

Grisham, Vandenberg, Nott, Conway & Cannon, and Jack E. Grisham, Long Beach, for defendants and respondents, Long Beach Oil Development Co., Signal Oil and Gas Co., Standard Oil Co. of California, Humble Oil & Refining Co., and C.M. Oil Co.

Roland E. Bigonger, Yorba Linda, for defendant and respondent Yorba Linda Electric.

KINGSLEY, Presiding Justice.

Plaintiff appeals from an order of dismissal ('Judgment,' Code Civ.Proc. § 581d) of its first amended complaint ('complaint') after an order sustaining, without leave to amend, a demurrer to that complaint. We affirm the order (judgment).

Defendant City of Long Beach holds in trust the tidelands herein involved. In 1963, acting through defendant Board of Harbor Commissioners, it entered into a contract with defendant Long Beach Oil Development Company (Development) for the production of oil from those tidelands. ¹ The contract required Development to conduct all operations under the contract at its own expense. Development was obligated to sell all oil and gas produced by its operations and to pay to the City, as compensation for its rights under the contract, the value of all oil and gas so sold, after deducting its costs of operation and 9% Of the net profits. ²

Thereafter, in 1974, Development entered into a contract with defendant Yorba Linda Electric (Yorba Linda) for the construction of what are described as 'Electrical Distribution Facilities' for use in connection with Development's operations under the 1963 contract. The complaint alleges that Yorba Linda's bid contemplated that it would pay its employees less than the prevailing wage for such work and that Yorba Linda has paid such lesser wages to its employees.

Plaintiff, suing as a labor union on behalf of its members, sought the following relief:

1. A declaration of rights to the effect that construction, alteration, demolition and repair work called for and anticipated by the December 1963 Drilling and Operating Contract, and calls for bids and contracts arising thereunder, including the work specified in the October 10, 1974 invitation or call for bids, and work of similar nature is 2. For special damages according to the plaintiff's proof;

'public work' and subject to the requirements of the Labor Code of the State of California, Section 1720 through Section 1775;

3. For general damages in the amount $100,000.00;

4. For a preliminary and/or permanent injunction, restraining the defendants, their representatives, employees, agents and all persons acting by, through or in concert with the defendants from contracting, doing, attempting or causing to be done, either directly or indirectly, any 'public work' as defined in California Labor Code Section 1720 and/or work otherwise specifying payment of prevailing wages, where in fact wages paid to the workmen will be at less than the prevailing rate of wages in the locality;

5. For an Order of this Court directing that the defendants show cause, if any they have, at a time and place to be fixed by the Court, why a permanent injunction should not issue as hereinabove prayed for;

6. For costs of suit incurred herein; and

7. For such other and further relief as to the Court seems proper.

It is the seeming theory of plaintiff's complaint that the 1963 contract constituted a contract for 'public work' within the meaning and effect of sections 1720--1775 of the Labor Code, that the employees of Yorba Linda are employees within the meaning of those sections, and that the various defendants have been guilty of a violation of the statutory duty under the cited sections of the Labor Code to pay prevailing wages.

In this court, defendants seek to sustain the trial court's orders on the following grounds:

(1) That the 1963 contract did not involve a 'public work';

(2) That Development is not being paid out of 'public funds';

(3) That plaintiff has no standing to sue;

(4) That the remedies for violation of the cited Labor Code sections is exclusively that provided in those sections. In addition, the City and the Board claim immunity by virtue of the Governmental Tort Act.

I

Insofar as the complaint seeks monetary damages against the City and the Board, the demurrer was properly sustained. The complaint does not allege any compliance with the claims provisions of the Governmental Tort Act.

II

The pertinent provisions of the Labor Code are as follows:

Labor Code, section 1720: 'As used in this chapter 'public works' means:

'(a) Construction, alteration, demolition or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by any public utility company pursuant to order of the Public Utilities Commission or other public authority.

'(b) Work done for irrigation, utility, reclamation and improvement districts, and other districts of this type. 'Public work' shall not include the operation of the irrigation or drainage system of any irrigation or reclamation district, except as used in * * * Section 1778 relating to retaining wages.

'(c) Street, sewer or other improvement work done under the direction and supervision or by the authority of any officer or public body of the state, or of any political subdivision or district thereof, whether such political subdivision or district operates under a freeholder's charter or not.

'(d) The laying of carpet done under a building lease-maintenance contract and paid for out of public funds.

'(e) The laying of carpet in a public building done under contract and paid for in whole or in part out of public funds.'

Labor Code, section 1771: 'Not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed, and not less than the general prevailing rate of per diem wages for holiday Labor Code, section 1775: 'The contractor shall, as a penalty to the State or political subdivision on whose behalf the contract is made or awarded, forfeit twenty-five ($25) for each calendar day, or portion thereof, for each workman paid less than the stipulated prevailing rates for such work or craft in which such workman is employed for any public work done under the contract by him or by any subcontractor under him. The difference between such stipulated prevailing wage rates and the amount paid to each workman for each calendar day or portion thereof for which each workman was paid less than the stipulated prevailing wage rate shall be paid to each workman by the contractor, and the body awarding the contract shall cause to be inserted in the contract a stipulation that the provisions of this section will be complied with.

and overtime work fixed as provided in this chapter, shall be paid to all workmen employed on public works exclusive of maintenance work.'

'To the extent that there is insufficient money due a contractor to cover all penalties forfeited and amounts due in accordance with this section, or in accordance with Section 1813 of this chapter, and in all cases where the contract does not provide for a money payment by the awarding body to the contractor, the awarding body shall notify, provided that in the case of a workman claiming the difference between the prevailing wage rate and the amount paid him the awarding body has first been given the notice mentioned in Section 1190.1 of the Code of Civil Procedure, the Division of Labor Law Enforcement of such violation and the Division of Labor Law Enforcement, if necessary with the assistance of the awarding body, may maintain an action in any court of competent jurisdiction to recover the penalties and the amounts due provided for herein. Such action shall be commenced not later than 90 days after the filing of a valid notice of completion in the office of the county recorder in each county in which the public work or some part thereof was performed, or not later than 90 days after acceptance of such public work, whichever last occurs. No issue other than that of the liability of the contractor for the penalties allegedly forfeited and amounts due shall be determined in such action, and the burden shall be upon the contractor to establish that the penalties and amounts demanded in such action are not due.'

(a) The parties have cited to us cases which, they contend, provide us with a definition of the term 'public work' applicable to the case at bench. None of the cases cited are helpful in our task, since they involve quite different operations. ³ We conclude that the 1963 contract before us is not one for a 'public work' within the meaning of section 1720 of the Labor Code. Although unique in its provisions, it is, in essence, an oil and gas lease, calling for payment of royalties to the City. Development is obligated to drill for, produce and sell oil and gas from the tidelands involved. It operates at its own risk, since the City is not obligated to reimburse Development for any losses incurred in the operations. The City's only interest is in receiving its percentage of the oil and gas produced and sold. The fact that royalties are to be computed in a manner different from the ordinary oil and gas lease does not make the contract anything other than a lease. While the contract requires Development to construct drilling and collateral equipment,...