Mistick Pbt v. Chao
| Decision Date | 17 March 2006 |
| Docket Number | No. 04-5340.,04-5340. |
| Citation | 440 F.3d 503 |
| Parties | MISTICK PBT, d/b/a Mistick Corporation, Appellant v. Elaine CHAO, Secretary, United States Department of Labor, Appellee. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia (No. 03cv01767).
Maurice Baskin argued the cause and filed the briefs for appellant. Lesley A. Pate entered an appearance.
Alan Burch, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Kenneth L. Wainstein, U.S. Attorney, and Michael J. Ryan, Assistant U.S. Attorney. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.
Before: HENDERSON, BROWN, and GRIFFITH, Circuit Judges.
Opinion for the Court filed by Circuit Judge GRIFFITH.
Under the Davis-Bacon Act, 40 U.S.C. § 3141, et seq., bidders on certain construction projects funded by the federal government must pay workers specified wage rates based upon the type of work performed. See 40 U.S.C. § 3142. The Department of Labor (the "Department" or "Secretary") determines the categories of jobs and the prevailing wage rates for those jobs in the community where the construction project will be undertaken. See 29 C.F.R. §§ 1.1-1.9. This case involves the Department's conformance regulations, 29 C.F.R. § 5.5(a)(1)(ii)(A), which explain how the Secretary determines the wages for a type of job that is left out of the Department's pre-bid wage decision, but that a contractor subsequently requires for the project. Such omissions are not uncommon.
After it had been awarded a federal contract, appellant Mistick PBT ("Mistick") proposed several types of jobs and accompanying minimum rates of pay that were left out of the Secretary's pre-bid determination. Mistick argues the Department acted in an arbitrary and capricious manner by refusing to evaluate Mistick's proposed wage rates in light of several previously approved types of jobs and accompanying wage rates. The District Court agreed with the Department that because the conformance process results in a wage rate, and because the Supreme Court held in United States v. Binghamton, 347 U.S. 171, 176-78, 74 S.Ct. 438, 98 L.Ed. 594 (1954), that the courts have no jurisdiction to review whether the Secretary's wage determination correctly represents the "wages . . . prevailing," 40 U.S.C. § 3142(b), in a locality, the Department's application of the conformance regulations is insulated from judicial review. We disagree with this conclusion. In accordance with our prior decision in Ball, Ball & Brosamer, Inc. v. Reich, 24 F.3d 1447, 1451 (D.C.Cir.1994), we conclude that the Davis-Bacon Act does not provide clear and convincing evidence that Congress sought to preclude review under the Administrative Procedure Act ("APA"), 5 U.S.C. § 701, et seq., of violations of Department regulations. We hold, however, that the Department did not apply its conformance regulations here in an arbitrary and capricious fashion.
Mistick won a bid to be general contractor for Crawford Square Rental Phase III ("Crawford Square"), a residential construction project in Allegheny County, Pennsylvania, which was administered by the Urban Redevelopment Authority of Pittsburgh (the "Authority"). Because the project received federal funding and was subject to the Davis-Bacon Act, the Secretary conducted a survey of prevailing wages for similar projects in Allegheny County and issued a wage determination in July 1996 (the "1996 Wage Determination"), which applied to Crawford Square.
Mistick needed to employ seven types of workers not addressed by the 1996 Wage Determination: operators of backhoes, bobcats, excavators, hi-lifts, rollers, graders, and pavers. Mistick requested that the Authority conform these seven types of jobs to classifications found in an earlier wage determination, which was based upon a November 1992 wage survey (the "1992 Wage Determination"). The Authority rejected Mistick's request and concluded that (1) the bobcat classification should be conformed to the wage rates paid to a drywall finisher ($9.75) because the work required of a bobcat operator is "not comparable to the power equipment classifications;" and (2) Mistick's other requested classifications should be conformed to the wage rates paid to bulldozer operators ($21.87) because each involved the operation of power equipment. Mistick objected, contending that the power equipment operator classifications in the 1996 Wage Determination used by the Secretary were inapplicable here because they addressed equipment needed on a "heavy" commercial land development project and Crawford Square was a "residential" development.
Pursuant to 29 C.F.R. § 5.5(a)(1)(ii)(C), the dispute was submitted to the Department of Labor's Administrator of the Wage and Hour Division of the Employment Standards Administration (the "Administrator"). Mistick requested that two positions — bobcat and roller operators — be conformed to the wage rates paid to drywall finishers ($9.75) and that the other five positions be conformed to the wage rates paid to ornamental ironworkers ($13.36). A section chief rejected Mistick's proposal without stating reasons and approved the Authority's determination; consequently, bobcat operators were assigned a wage rate of $9.75 and the other six positions were assigned a wage rate of $21.87. Mistick appealed to the Administrator. Mistick agreed that the bobcat operator position was properly conformed to the wage rate paid to drywall finishers, but objected to conforming the remaining six classifications to the much higher wage rate paid to a bulldozer operator. These six classifications, Mistick contended, all involved operating "light machinery much closer in nature to a bobcat [which had been conformed to the lower-wage drywall finisher position] than a heavy/highway bulldozer." At most, Mistick argued that these classifications involved the skill of a drywall finisher or an ornamental ironworker.
The Administrator declined to conform the six remaining new classifications to the drywall finisher or ornamental ironworker positions. Instead, the Administrator conformed these positions to the bulldozer classification, citing one of the agency's past decisions, Tower Construction, No. 94-17, 1995 WL 90010 (Dep't of Labor, Wage Appeals Bd. Feb. 28, 1995), for the proposition that the Administrator will not conform power equipment operator positions to non-power equipment operator classifications. The Administrator noted that it made no change to the bobcat classification only because Mistick did not take issue with that conformance. Pursuant to 29 C.F.R. § 7.1(b), Mistick appealed to the Administrative Review Board (the "Board"). Mistick argued to the Board that if the Administrator was going to follow Tower Construction, it would be more reasonable to conform the six new equipment operator positions to the conformed bobcat operator classification and not the more highly skilled bulldozer classification. Mistick also argued that Tower Construction was ill-reasoned and that it was arbitrary for the Administrator to compare Mistick's requested classifications only to power equipment operator positions.
The Board rejected Mistick's challenge but did not offer any findings why these new classifications differed from the bobcat classification. Instead, the Board relied upon procedural grounds and concluded that it need not compare Mistick's six requested classifications with the bobcat classification. The Board also determined that the Administrator properly followed Tower Construction by comparing Mistick's six remaining requested classifications only to power equipment operator positions.
On August 20, 2003, Mistick filed a complaint in the United States District Court for the District of Columbia alleging violations of the Davis-Bacon Act and the APA. The District Court held that Binghamton precluded judicial review of Mistick's challenge to the Department's application of its conformance regulations because "the essence of Mistick's challenge falls upon the correctness of the Department's decision rather than the actual procedure that the Board employed." Mistick PBT v. Chao, No. 03-1767, slip op. at 8, 2004 WL 3517425, at *4 (D.D.C. July 27, 2004). In the alternative, the District Court held that there was nothing arbitrary and capricious about the Board's decision to conform the six new classifications to one of the pre-existing power equipment classifications as opposed to any of the non-power equipment classifications. Mistick filed a timely notice of appeal, invoking our jurisdiction under 28 U.S.C. § 1291 to review the final decision of the District Court.
To understand the dispute in this case, some background is needed on the wage determination process employed prior to a construction firm's bid for a federal contract and the subsequent conformance process set forth in the Department's regulations. The Board provided a helpful summary of both processes in its opinion, setting out the "fundamental differences" between the two processes:
A wage determination dictates the minimum wage rates paid to classifications of employees. It is incorporated into bid packages and ultimately into the contract. Thus all bidders are provided with the same information concerning the minimum wage rates that must be paid on a federal procurement. The Administrator typically engages in extensive analysis of statistical data in determining locally prevailing or collectively-bargained rates. Interested parties must challenge wage determinations prior to submissions of bids on procurement. This requirement ensures an equitable procurement process in order that competing contractors know in advance of bidding what rates must be paid so that they can bid on an equal basis.
A conformance, on the other hand, entails adding an employment classification omitted from...
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