Kam Shing Chan v. City of New York, 90 Civ. 5653 (RJW).

• Decision Date: 08 September 1992
• Docket Number: No. 90 Civ. 5653 (RJW).,90 Civ. 5653 (RJW).
• Citation: 803 F. Supp. 710
• Parties: KAM SHING CHAN, Kam Tai Chan, Jing Yi Chen, Shan Non Chiu, Bak Lok Chu, Kok Kun Chu, Israel Gonzalez, Sui Bin Huang, Jian Ning Jiang, Kam Fai Kwok, Moon Shuen Kwong, Wei Xiang Lee, Yang I Lee, Young Shi Lee, Bing Zhao Li, Hao Hui Li, Kei Man Li, Wai Tai Li, Chi Kwong Liu, Jack Ye Louie, Sheng Hua Lu, Ting Guang Mai, Cheuk Ming Ng, Kin Chung Ng, Kin Hin Ng, Shun Guo Shen, Ten Jen Shen, Hau Wing Sin, Vein Dinh Sintruong, Wing Shing Tse, Wai Man Wan, Kong Htyan Wu, Xu Ming Wu, Guo Xuan, Yue Nam Zhu, Plaintiffs, v. CITY OF NEW YORK, Department of Housing Preservation and Development of the City of New York, and Chinese-American Planning Counsel, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

803 F. Supp. 710

KAM SHING CHAN, Kam Tai Chan, Jing Yi Chen, Shan Non Chiu, Bak Lok Chu, Kok Kun Chu, Israel Gonzalez, Sui Bin Huang, Jian Ning Jiang, Kam Fai Kwok, Moon Shuen Kwong, Wei Xiang Lee, Yang I Lee, Young Shi Lee, Bing Zhao Li, Hao Hui Li, Kei Man Li, Wai Tai Li, Chi Kwong Liu, Jack Ye Louie, Sheng Hua Lu, Ting Guang Mai, Cheuk Ming Ng, Kin Chung Ng, Kin Hin Ng, Shun Guo Shen, Ten Jen Shen, Hau Wing Sin, Vein Dinh Sintruong, Wing Shing Tse, Wai Man Wan, Kong Htyan Wu, Xu Ming Wu, Guo Xuan, Yue Nam Zhu, Plaintiffs, v. CITY OF NEW YORK, Department of Housing Preservation and Development of the City of New York, and Chinese-American Planning Counsel, Inc., Defendants.

No. 90 Civ. 5653 (RJW).

United States District Court, S.D. New York.

June 5, 1992.

Opinion on Motion to Modify, September 8, 1992.

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Ellen Dichner, James Reif, Gladstein, Reif & Meginniss, Michael Shen, Shneyer & Shen, Asian American Legal Defense and Education Fund, New York City, for plaintiffs.

O. Peter Sherwood, Corp. Counsel of City of New York, New York City (Beth Peritz, Goodwin Benjamin, John P. Woods, of counsel), for defendants City of New York and Dept. of Housing Preservation and Development of City of New York.

Jay S. Berke, Nicholas J. Pappas, Skadden, Arps, Slate, Meagher & Flom, New York City, for defendant Chinese-American Planning Counsel, Inc.

OPINION

ROBERT J. WARD, District Judge.

Chinese-American Planning Counsel, Inc. ("CPC") has moved to dismiss plaintiffs' First Amended Verified Complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P., for failure to state a claim upon which relief can be granted. The City of New York ("the City") and the Department of Housing Preservation and Development of the City of New York ("HPD") (collectively "the municipal defendants") have moved to dismiss the First Amended Complaint pursuant to Rule 12(b)(1), Fed.R.Civ.P., for lack of jurisdiction over the subject matter and/or Rule 12(b)(6), Fed.R.Civ.P., for failure to state a claim upon which relief can be granted.¹

By order dated July 26, 1991, the motions were referred to the Honorable James C. Francis IV, United States Magistrate Judge, to hear and report pursuant to 28 U.S.C. § 636(b)(1)(B). On January 6, 1992, Magistrate Judge Francis filed a Report and Recommendation ("the Report"), in which he recommended that the motions to dismiss be granted in their entirety. Plaintiffs timely filed objections to the Report. For the reasons that follow, the Court denies defendants' motions in part, grants them in part, and modifies the magistrate judge's findings and recommendations in accordance with this opinion.²

BACKGROUND

Kam Shing Chan and the other plaintiffs seek to recover back wages, which they claim are due them under 42 U.S.C. § 5310 and applicable contracts, from CPC and the municipal defendants.³ Plaintiffs also seek liquidated damages and attorneys' fees.

According to plaintiffs, from 1986 to 1989, CPC entered into a series of three annual contracts with HPD (the "CPC/HPD Contracts") for the "performance of construction, repair and rehabilitation work on real estate owned by the City of New York". Complaint at ¶ 44. Plaintiffs are laborers that CPC employed to perform the work required under the terms of these contracts.

The CPC/HPD Contracts were funded in whole or in part under Title I of the Housing and Community Development Act of 1974 ("HCDA"), 42 U.S.C. § 5301 et seq., which provides that "the primary objective of this title is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income." Id. § 5301(c).

42 U.S.C. § 5310, which is part of Title I of the HCDA, provides, in relevant part, that:

All laborers and mechanics employed by contractors or subcontractors in the performance of construction work financed in whole or in part with assistance received under this chapter shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a — 276a-5).... The Secretary of Labor shall have, with respect to such labor standards, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950⁴ (15 F.R. 3176; 64 Stat. 1267) and section 276c of Title 40.

Because the CPC/HPD Contracts were funded under Title I of the HCDA, they were subject to, inter alia, the provisions of § 5310. This was explicitly stated in the CPC/HPD Contracts, which provided, in a section entitled "Federal Supplemental Terms and Conditions," that:

CPC acknowledges that this Agreement is funded under a program providing direct financial assistance from the Federal government to the City and HPD and is subject to, and the Contractor shall comply with, the requirements of all applicable Federal Statutes, rules and regulations, including, but not limited to, those set forth in Exhibit F attached to this agreement.

Included among the "applicable Federal Statutes" in Exhibit F were Title I of the HCDA, as well as the Davis-Bacon Act.

Plaintiffs assert that they were not paid prevailing wage rates, as determined by the Secretary of Labor. In their Memorandum in Opposition to Motions to Dismiss Statutory Claims, plaintiffs state that municipal defendants issued a Request for Proposals ("RFP") and ultimately signed a contract with CPC which provided that the Person Day Rate applicable to the HCDA work could not exceed $90 per diem.⁵ Plaintiffs argue that, once CPC's other expenses were deducted, the $90 cap on the Person Day Rate "ensured that each laborer would be paid at far below the prevailing wage rate." Id. at 4.

DISCUSSION

Defendants' motions present this Court with two distinct, yet related, areas of inquiry. First, the Court must determine whether 42 U.S.C. § 5310 creates a right of action under 42 U.S.C. § 1983. This inquiry turns on: (a) whether defendants were acting under color of state law; (b) whether 42 U.S.C. § 5310 creates an enforceable "right, privilege or immunity," as required under 42 U.S.C. § 1983; and (c) whether Congress intended to foreclose a 42 U.S.C. § 1983 right of action under 42 U.S.C. § 5310. Second, the Court must ascertain whether plaintiffs have an implied private right of action under 42 U.S.C. § 5310.

Part (a) of the first inquiry requires a fact-specific analysis. Parts (b) and (c) of the first inquiry, as well as the second inquiry, present questions of statutory interpretation which are issues of first impression for the federal courts.

After discussing the standards to be applied when reviewing a magistrate judge's report and recommendations and deciding a Rule 12(b)(1) or 12(b)(6) motion to dismiss, the Court will turn to these substantive issues.

A. Standards for Reviewing a Magistrate Judge's Report and Recommendations

To accept the Report and Recommendations of a magistrate judge to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record. See Rule 72, Fed.R.Civ.P., Notes of Advisory Committee on Rules (citing Campbell v. United States Dist. Court, 501 F.2d 196, 206 (9th Cir.), cert. denied, 419 U.S. 879, 95 S.Ct. 143, 42 L.Ed.2d 119 (1974)). 28 U.S.C. § 636(b)(1) affords the district court broad latitude in considering a magistrate judge's recommendation, even if no party objects to it. Grassia v. Scully, 892 F.2d 16, 19 (2d Cir.1989). When timely objection has been made to a portion or portions of a magistrate judge's report, however, the district judge must "make a de novo determination ... of any portion of the magistrate's disposition to which specific written objection has been made." Rule 72(b), Fed. R.Civ.P. See also, 28 U.S.C. § 636(b)(1). The judge may then accept, reject, or modify, in whole or in part, the magistrate judge's proposed findings and recommendations. 28 U.S.C. § 636(b)(1).

A district court's obligation to make a de novo determination of properly contested portions of a magistrate judge's report does not require that the judge conduct a de novo hearing on the matter. United States v. Raddatz, 447 U.S. 667, 676, 100 S.Ct. 2406, 2412, 65 L.Ed.2d 424 (1980). It is sufficient that the district court "arrive at its own, independent conclusion about those portions of the magistrate judge's report to which objection is made." Hernandez v. Estelle, 711 F.2d 619, 620 (5th Cir.1983). To this end, the court must "exercise ... sound judicial discretion with respect to whether reliance should be placed on the magistrate judge's findings." American Express Int'l Banking Corp. v. Sabet, 512 F.Supp. 472, 473 (S.D.N.Y.1981), aff'd without opinion, 697 F.2d 287 (2d Cir.), cert. denied, 459 U.S. 858, 103 S.Ct. 129, 74 L.Ed.2d 111 (1982).

B. Standards for Dismissal Pursuant to Rules 12(b)(1) and 12(b)(6)

1. Rule 12(b)(1)

Municipal defendants have moved to dismiss the First Amended Verified Complaint pursuant to Rule 12(b)(1), Fed.R.Civ.P., for lack of jurisdiction over the subject matter. When such a defense is asserted, "`the court should consider the Rule 12(b)(1) challenge first since if it must dismiss the complaint for lack of subject matter jurisdiction, the accompanying defenses and objections become moot and do not need to be determined.'" Rhulen Agency, Inc. v. Alabama Ins. Guar. Ass'n., 896 F.2d 674, 678 (2d Cir.1990) (quoting 5 C. Wright and A. Miller, Federal Practice and Procedure, § 1350, p. 548 (1969)).

Plaintiffs claim subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337. Section 1331, which confers jurisdiction when there is a federal question, provides that, "the district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States." Inasmuch as...