Master Builders of Iowa v. Polk County

Decision Date14 November 2002
Docket NumberNo. 02-1005.,02-1005.
Citation653 N.W.2d 382
PartiesMASTER BUILDERS OF IOWA, INC.; Associated Builders and Contractors of Iowa, Inc.; Des Moines Construction Council; Associated General Contractors of Iowa; Meisner Electric, Inc.; Shaw Electric, Inc.; Bruce Peterson; and Ronald Wayne Stratton, Appellants, v. POLK COUNTY, Iowa and Board of Supervisors of Polk County, Appellees, Central Iowa Building and Construction Trades Council, Intervenor-Appellee.
CourtIowa Supreme Court

John A. Templer, Greg A. Naylor, and Jeffrey D. Ewoldt of Pingel & Templer, P.C., West Des Moines, for appellants.

John P. Sarcone, County Attorney, and Michael O'Meara, Assistant County Attorney, for appellees.

Nolden Gentry and Bruce H. Stoltze of Brick, Gentry, Bowers, Swartz, Stoltze, Schuling & Levis, P.C., Des Moines, and Robert J. Henry, G. Gordon Atcheson and Charles R. Schwartz of Blake & Uhlig, P.A., Kansas City, Kansas, for intervenor-appellee.

Mark T. Hedberg of Hedberg, Owens & Hedberg, Des Moines, and Victoria L. Bor and Jonathan D. Newman of Sherman, Dunn, Cohen, Leifer & Yellig, P.C., Washington, D.C., for amici curiae Building and Construction Trades Department, AFL-CIO, and Iowa State Building & Construction Trades Council.

Ralph Potter, Assistant County Attorney, Dubuque, Thomas F. Kintigh, City Attorney, Ottumwa, and Victoria Siegel, County Attorney, Ottumwa, for amici curiae Dubuque County, Iowa, City of Ottumwa, Iowa, and Wapello County, Iowa.

CADY, Justice.

In this appeal, we must decide whether a county may legally utilize a project labor agreement to effectuate the completion of a large-scale public works project. We conclude that the use of such an agreement is permissible under current Iowa and federal law and affirm the district court.

I. Background Facts and Proceedings.

The Iowa Events Center (Events Center) is the planned centerpiece of a series of public works projects meant to advance the profile and prestige of Polk County both inside and outside the state. The Events Center is actually three projects in one: a newly constructed 16,000-seat arena, a newly constructed 100,000 square foot exhibition hall, and a renovation of Veterans Memorial Auditorium. The project was initially budgeted at a cost of $212 million and was slated to open in late 2004.

The cost and scale of the Events Center project caused Polk County, through the actions of the Polk County Board of Supervisors (collectively Board), to pursue a mixture of methods to fund and then construct the project. Polk County applied for and was awarded fifty million dollars from the Vision Iowa fund. The Board also issued general obligation municipal bonds, an undertaking that prompted this court's first consideration of issues surrounding the Events Center project. See Bowers v. Polk County Bd. of Supervisors, 638 N.W.2d 682 (Iowa 2002). At the same time the Board pursued funding, it also began to consider the methods by which the project could be completed in a timely and fiscally responsible manner. One possible method brought to the Board's attention was the implementation of a project labor agreement (PLA).

The PLA option was first presented to the Board by representatives of the Central Iowa Building and Construction Trades Council (CIBCTC), who began contacting Board members individually before October 2001. On October 18, 2001, the Board received a letter from CIBCTC representatives further advocating the use of a PLA. That letter was followed by a letter from representatives of Master Builders of Iowa, Associated Builders and Contractors, Des Moines Construction Council, and Associated General Contractors of Iowa (collectively Master Builders) stating a number of objections to the adoption of such an agreement. By late fall 2001, lobbying of varying degrees by both sides of the issue clearly had become an undercurrent to the Board's consideration of a PLA for the Events Center project.

Eventually, the Board requested that the construction manager hired to supervise the project, Weitz-Turner, undertake its own evaluation of the propriety of a PLA. On November 20, 2001, Weitz-Turner issued a report, in the form of a letter to the Board, in response to the Board's request. The report listed various advantages of a PLA, but also listed disadvantages and a number of other factors that Weitz-Turner advised the Board to consider before making a final decision on adoption of such an agreement. One week later, the Board approved a resolution directing the negotiation of an Events Center PLA. Negotiations soon were undertaken between representatives of Polk County and CIBCTC. On January 8, 2002, the Board considered and adopted, by a vote of 4-1, a resolution calling for the incorporation of the fully negotiated and finalized PLA into all future Events Center construction contracts.

On January 22, 2002, Master Builders filed a petition for declaratory judgment and temporary and permanent injunctive relief in the Iowa District Court for Polk County, naming Polk County and the Board as defendants and challenging the legality of the Events Center PLA on a number of grounds. This petition was subsequently amended to add additional plaintiffs. CIBCTC also moved for intervention and was allowed to intervene as a defendant.

Central among the plaintiffs' challenges was the claim that the Events Center PLA violated the state's right-to-work and competitive bidding laws. They also asserted a number of claims under federal law, including arguments that the PLA was preempted by the National Labor Relations Act (NLRA) and the Employee Retirement Income Security Act (ERISA) and violated constitutional rights of due process, equal protection, and free association. A hearing on the matter was held, commencing on June 2, 2002. After completion of the hearing, each party submitted its own proposed findings of fact and conclusions of law. On June 28, 2002, the court issued its findings of fact, conclusions of law and order, finding in favor of the Board on each of the five argument areas advanced by Master Builders.

Master Builders made timely notice of appeal to this court. We expedited our consideration of this appeal given the importance of the issues presented and the great public cost attendant to further delay of the disposition of this matter.

II. Standard of Review.

The parties dispute the standard of review with which we should consider the findings of the district court. The petition in this action was styled as one for declaratory judgment and injunctive relief. We review actions for injunctive relief de novo. Owens v. Brownlie, 610 N.W.2d 860, 865 (Iowa 2000). Our review of actions for declaratory judgment depends on how the action was tried to the district court. Id. To determine the proper standard of review, we must consider the "pleadings, relief sought, and nature of the case [to] determine whether a declaratory judgment action is legal or equitable." Nelson v. Agro Globe Eng'g, Inc., 578 N.W.2d 659, 661 (Iowa 1998). In addition, we consider "whether the court ruled on evidentiary objections" as an important, although not dispositive, test of whether the case was tried in law or equity. Id.

Balancing these factors leads to the conclusion that this case was fully tried in equity. Master Builders has pursued relief from the adoption and incorporation of the PLA into Events Center construction contracts and has not pursued monetary relief of any sort. Both the pleadings and the relief sought were focused on declaratory and injunctive relief, both equitable remedies. Moreover, although the district court ruled on some evidentiary objections in the course of trial, the objections were minor and did not have significant effect on the proceedings. Although we prefer that a trial judge refrain from such rulings, we do not believe the rulings in this trial altered the true nature of the district court proceedings. Sille v. Shaffer, 297 N.W.2d 379, 380-81 (Iowa 1980). Because this matter was tried by the district court wholly in equity, we review this appeal de novo. Iowa R.App. P. 6.4; Owens, 610 N.W.2d at 865.

III. Background of Project Labor Agreements.

A PLA is a "prehire' collective bargaining agreement" used by a project owner to set the terms under which a contractor who successfully bids on the project proceeds in all labor relations connected to its subsequent work on the project.1 U.S. Gen. Accounting Office, Pub. No. GAO/GGD-98-82, Project Labor Agreements: The Extent of Their Use and Related Information at 1 (1998) [hereinafter U.S.G.A.O.]; N.Y. State Chapter, Inc. v. N.Y. State Thruway Auth., 88 N.Y.2d 56, 643 N.Y.S.2d 480, 483, 666 N.E.2d 185 (1996); see also Bldg. & Constr. Trades Dept., AFL-CIO v. Allbaugh, 295 F.3d 28, 30 (D.C.Cir.2002). A PLA is considered a prehire agreement because it "can be negotiated before employees vote on union representation or before the contractor hires any workers" and typically "provides that only contractors and subcontractors who sign [the] prenegotiated agreement with the union can perform project work." U.S.G.A.O., at 1; N.Y. State Chapter, Inc., 643 N.Y.S.2d at 483, 666 N.E.2d 185. In most industries, the NLRA outlaws such agreements. National Labor Relations Act, 29 U.S.C. § 158(a), (b) (2000). PLAs, however, operate under the "construction industry" exception to the NLRA, which allows prehire agreements because of "the short-term nature of employment which makes posthire collective bargaining difficult, the contractor's need for predictable costs and a steady supply of skilled labor, and a longstanding custom of prehire bargaining in the industry." Bldg. & Constr. Trades Council v. Assoc. Builders & Contractors of Mass./R.I., Inc., 507 U.S. 218, 231, 113 S.Ct. 1190, 1198, 122 L.Ed.2d 565, 578 (1993); 29 U.S.C. § 158(f).

When utilized, a PLA is incorporated into every contract entered into for a project. Moreover, PLAs are comprehensive in their coverage of...

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