Lewis v. Gaylor, Inc.

• Decision Date: 24 September 2012
• Docket Number: No. 1:11–cv–01421–SEB–TAB.,1:11–cv–01421–SEB–TAB.
• Citation: 914 F.Supp.2d 925
• Parties: Joshua S. LEWIS, Plaintiff, v. GAYLOR, INC., Defendant.
• Court: U.S. District Court — Southern District of Indiana

914 F.Supp.2d 925

Joshua S. LEWIS, Plaintiff,

v.GAYLOR, INC., Defendant.

No. 1:11–cv–01421–SEB–TAB.

United States District Court,

S.D. Indiana,

Indianapolis Division.

Sept. 24, 2012.

Elijah D. Baccus, Marilyn Lee Widman, Allotta Farley Wichman Co., LPA, Toledo, OH, for Plaintiff.

Craig M. Williams, Stephen W. Lyman, Hall Render Killian Heath & Lyman, Indianapolis, IN, for Defendant.

ORDER ADOPTING THE MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION REGARDING THE FEDERAL STATUTORY CLAIM, AND STAYING A RULING ON THE INDIANA STATUTORY CLAIM PENDING CERTIFICATION TO THE INDIANA SUPREME COURT

SARAH EVANS BARKER, District Judge.

The Court has considered Plaintiff's objections to the Magistrate Judge's Report and Recommendation [Docket No. 38] regarding Defendant Gaylor, Inc.'s Motion to Dismiss, in which the Magistrate Judge proposes that Plaintiff Joshua S. Lewis's claims brought pursuant to the Davis–Bacon Act (“DBA”), 40 U.S.C. § 3141 et seq., and Indiana's Common Construction Wage Act (“CCWA”), Ind. Code § 5–16–7 et seq., be dismissed because no private cause of action exists under either statute. We address Plaintiff's objections in turn below.

I. Davis–Bacon Act

In his Report and Recommendation, the Magistrate Judge recognizes that, in McDaniel v. University of Chicago, 548 F.2d 689 (7th Cir.1977), the Court of Appeals ruled that “implying a private right of action in the Davis–Bacon Act is necessary to effectuate the intention of Congress in passing the statute.” Id. at 695. However, after conducting an exhaustive review of subsequent case law, including the Supreme Court's decisions in Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979) and Universities Research Association, Inc. v. Coutu, 450 U.S. 754, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981), the Magistrate Judge concluded that this was the “rare case” in which the district court could depart from Seventh Circuit precedent being “powerfully convinced” that, in light of subsequent decisions, the Seventh Circuit would likely depart from its prior decision in McDaniel at the earliest opportunity to find that no implied private right of action exists.

The Court, having given careful consideration to the issues presented, pursuant to Title 28 U.S.C. § 636(b)(1)(B), and being duly advised in the premises, finds that the Magistrate Judge's analysis of Plaintiff's claim brought pursuant to the DBA is well reasoned and supported by the facts as well as the law. Accordingly, the Court overrules Plaintiff's objection and hereby adopts the Magistrate Judge's Report and Recommendation that Plaintiff's claim brought pursuant to the DBA be dismissed and incorporates the opinion of the Magistrate Judge by reference herein.

II. Common Construction Wage Act

Plaintiff's second objection to the Magistrate Judge's conclusion relates to whether a private cause of action exists under the Indiana statute titled the CCWA, which is the type of supplemental state wage law like those that the Seventh Circuit has noted are “sometimes referred to as the ‘little Davis–Bacon Acts.’ ” Frank Bros., Inc. v. Wisconsin Dept. of Transp., 409 F.3d 880, 883 (7th Cir.2005) (citation omitted). As recognized by the Magistrate Judge in his Report and Recommendation, the Indiana Supreme Court has to date never addressed this issue, but a divided Indiana Court of Appeals panel, adopting the Seventh Circuit's reasoning in McDaniel, held that an implied right of action does exist under the CCWA. See Stampco Const. Co., Inc. v. Guffey, 572 N.E.2d 510 (Ind.Ct.App.1991). Citing reasons similar to those that he cites as justification for departing from the McDaniel decision, coupled with the dearth of Indiana cases other than Stampco supporting an implied right of action under the CCWA, the Magistrate Judge's report takes an opposing view to the holding of the divided Indiana Court of Appeals, and recommends that the district court dismiss Plaintiff's claim brought pursuant to the CCWA. It is clear that the Magistrate Judge's Report and Recommendation on this issue is well reasoned. However, given that (1) it is a question that is reasonably likely to recur; (2) the Indiana Supreme Court has not had occasion to address the issue; and (3) the only state precedent on point is a divided opinion of the Court of Appeals that largely relies on the analysis set forth by the Seventh Circuit in McDaniel s, which, for the reasons adopted above is called into question by subsequent rulings, we stay a ruling on this issue and, pursuant to Indiana Appellate Rule 64(a), certify the question to the Indiana Supreme Court. A Certification to the Indiana Supreme Court shall issue.

III. Conclusion

For the reasons detailed above, we adopt the Magistrate Judge's Report and Recommendation as to Plaintiff's claim brought pursuant to the DBA and incorporate it by reference herein. Accordingly, Defendant's Motion to Dismiss is GRANTED IN PART and Plaintiff's DBA claim is hereby DISMISSED. We will stay a ruling on Plaintiff's CCWA claim and certify the question to the Indiana Supreme Court.

IT IS SO ORDERED.

REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO DISMISS

TIM A. BAKER, United States Magistrate Judge.

I. Introduction

Defendant's motion to dismiss [Docket No. 16] asks the Court to depart from the Seventh Circuit's decision in McDaniel v. University of Chicago, 548 F.2d 689, 695 (7th Cir.1977), which held that “implying a private right of action in the Davis–Bacon Act is necessary to effectuate the intention of Congress in passing the statute.” When presented with such an argument, the district court's foremost responsibility is to abide by the doctrine of stare decisis, where “decisions of a superior court in a unitary system bind the inferior courts.” Colby v. J.C. Penney Co., 811 F.2d 1119, 1123 (7th Cir.1987). However, in limited circumstances, district courts may depart from Seventh Circuit precedent if the district court is “powerfully convinced” that the Seventh Circuit would overrule its previous decision at the first opportunity. Id.

This case presents one of those limited circumstances. Events subsequent to McDaniel make it almost certain that the Seventh Circuit would depart from its holding in that case. In particular, in Universities Research Association v. Coutu, 450 U.S. 754, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981), the Supreme Court although not directly addressing the validity of McDaniel, employed reasoning contrary to that in McDaniel. The reasoning in Coutu and numerous other cases compels the conclusion that the Seventh Circuit would depart from McDaniel and hold there is no implied private right of action under the Davis–Bacon Act to enforce contracts with DBA stipulations. With respect to Plaintiff's Common Construction Wage Act claim, Plaintiff does not cite an Indiana Supreme Court case recognizing that an implied private right of action exists under the CCWA, and Plaintiff has not provided the Court with any additional basis that adequately supports such a right. As more fully set forth below, the Magistrate Judge finds that no implied private right of action exists under either act and therefore recommends that Defendant's motion to dismiss [Docket No. 16] be granted.¹

II. DiscussionA. Davis–Bacon Act

The parties dispute whether there is an implied private right of action under the DBA to enforce a contract with DBA stipulations. In McDaniel, the Seventh Circuit held “that implying a private right of action in the Davis–Bacon Act is necessary to effectuate the intention of Congress in passing the statute.” 548 F.2d at 695. The Seventh Circuit began its analysis by looking to the four-part test articulated in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). The first part of the test required the court to address “[w]hether a laborer like the members of the plaintiff class is the ‘especial’ beneficiary of the Davis–Bacon Act.” McDaniel, 548 F.2d at 692 (“If he is not [an “especial” beneficiary], that may well dispose of the case at the outset. If he is, we have only passed the first hurdle.”). The court reasoned:

But for the plaintiff class to be the special beneficiaries does not mean that they must be the exclusive beneficiaries; that local contractors and communities may benefit from the Act does not mean that it was not principally directed toward the laborers and mechanics. The Davis–Bacon Act by its terms mandates that the contract between the federal government and the contractor provide that laborers and mechanics hired by the contractor be paid the minimum wages determined by the Secretary of Labor to be prevailing for the corresponding class of laborers in the locality. The laborer is not only the principal beneficiary of the statute, but also a third-party beneficiary of a contract provided for by the statute. Moreover, the legislative history of the Davis–Bacon Act and subsequent congressional comment on the Act reveals that the fundamental purpose of the Act was to benefit laborers and mechanics by paying them wages prevailing in private industry:

“The purpose of this measure is to require contractors and subcontractors engaged in constructing, altering or repairing any public building of the United States or of the District of Columbia situated within the geographic limits of the United States to pay their employees the prevailing wage rates when such wage rates have been established by private industry.”

“Almost from the inception of Federal construction activity Congress recognized the necessity for providing basic wage protection to local laborers and mechanics employed on the construction. It was precisely for the purpose of providing this protection that Congress passed the Davis–Bacon Act more than 30 years ago. Virtually all segments of our society banded together to demand its adoption.”

Moreover, the Supreme Court of the United States recognized in United States v. Binghamton Const. Co., Inc., 347 U.S. 171, 74 S.Ct. 438, ...