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District of Columbia v. Department of Labor

United States Court of Appeals, District of Columbia Circuit

April 5, 2016

DISTRICT OF COLUMBIA AND CCDC OFFICE LLC, APPELLEES
v.
DEPARTMENT OF LABOR, ET AL., APPELLANTS, METROPOLITAN REGIONAL COUNCIL OF CARPENTERS, UNINCORPORATED LABOR ORGANIZATION, ET AL., APPELLEES

         Argued September 10, 2015

          Appeals from the United States District Court for the District of Columbia. (No. 1:13-cv-00730).

         John S. Koppel, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Benjamin C. Mizer, Acting Assistant Attorney General, Vincent H. Cohen, Jr., Acting U.S. Attorney, and Michael Jay Singer, Attorney. Jeffrica J. Lee, Attorney, U.S. Department of Justice, entered an appearance.

         Terry R. Yellig and Esmeralda Aguilar were on the brief for intervenors-defendants-appellants Metropolitan Regional Council of Carpenters, et al.

         Carl J. Schifferle, Assistant Attorney General, Office of the Attorney General for the District of Columbia, argued the cause for appellee District of Columbia. With him on the brief were Karl A. Racine, Attorney General, Todd S. Kim, Solicitor General, and Loren L. AliKhan, Deputy Solicitor General.

         Maurice Baskin argued the cause and filed the brief for appellee CCDC Office LLC.

         Kevin J. McKeon was on the brief for amici curiae Associated Builders and Contractors, Inc. and National Association of Manufacturers in support of appellee CCDC Office LLC. Shelly L. Ewald entered an appearance.

         Before: GARLAND,[*] Chief Judge, KAVANAUGH, Circuit Judge, and WILLIAMS, Senior Circuit Judge.

          OPINION

         Kavanaugh, Circuit Judge

         CityCenterDC is a large private development in the heart of Washington, D.C. It features upscale retail stores such as Hermès, Boss, and Louis Vuitton; high-end restaurants such as DBGB and Centrolina; the large private law firm of Covington & Burling; and luxury residences.

         The question in this case is whether the Davis-Bacon Act applies to the construction of CityCenterDC. As relevant here, the Davis-Bacon Act applies when the District of Columbia enters into a " contract . . . for construction" of " public works." [1] The Act guarantees prevailing wages to construction workers on those projects. If the Act applies here, the construction workers who helped build CityCenterDC might be entitled to higher wages than they in fact received.

         As the statutory definition reveals, two conditions must be present in order for the Davis-Bacon Act to apply here: (1) D.C. must have been a party to the contracts for construction of CityCenterDC, and (2) CityCenterDC must be a public work. To illustrate, suppose the District of Columbia contracted with a construction contractor to build a new public park. That would be a classic example of a construction project covered by the Davis-Bacon Act.

         But this case differs from the classic Davis-Bacon scenario in two critical respects, each of which independently suffices to take the CityCenterDC construction project outside the reach of the Davis-Bacon Act.

         First, the District of Columbia was not a party to the construction contracts for the building of CityCenterDC. D.C. owns the land on which CityCenterDC stands, but D.C. rented the land to private developers in a series of 99-year leases. The private developers then entered into construction contracts with general contractors to build CityCenterDC. The developers -- not D.C. -- contracted with the construction contractors who built CityCenterDC. That matters for purposes of the Davis-Bacon Act. Put simply, because D.C. was not a party to the construction contracts, the Davis-Bacon Act does not apply to CityCenterDC.

         Second, and an independent reason why the Davis-Bacon Act does not apply here, CityCenterDC is not a " public work." To qualify as a public work, a project must possess at least one of the following two characteristics: (i) public funding for the project's construction or (ii) government ownership or operation of the completed facility, as with a public highway or public park. Here, CityCenterDC's construction was not publicly funded, and CityCenterDC is not a government-owned or government-operated facility. So CityCenterDC is not a public work.[2]

         In short, D.C. was not a party to the contracts for construction of CityCenterDC, and CityCenterDC is not a public work. For either of those two alternative and independent reasons, the Davis-Bacon Act does not apply to the construction of CityCenterDC.

         It bears emphasis, moreover, that in the 80 years since its enactment, the Davis-Bacon Act has never been applied to a construction project such as CityCenterDC that is privately funded, privately owned, and privately operated. The novelty of the U.S. Department of Labor's interpretation strongly buttresses our conclusion that the Act does not apply here. See, e.g., FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000); Loving v. IRS, 742 F.3d 1013, 1021, 408 U.S.App. D.C. 281 (D.C. Cir. 2014).

         In a thorough and persuasive opinion, the District Court held that the Davis-Bacon Act does not apply to CityCenterDC. We affirm the judgment of the District Court.

         I

         To evaluate whether the Davis-Bacon Act applies to the construction of CityCenterDC, we begin by examining the history of the Act, the details of CityCenterDC, and the procedural background of this case.

         A

         In 1931, Congress passed and President Hoover signed the Davis-Bacon Act. By that point in the Great Depression, economic activity, including construction, had already declined significantly. To offset the dropoff in private construction and to help put construction workers back to work, the Federal Government launched a variety of construction projects to build and repair public works. But the government construction projects led to a collateral problem. Some government agencies awarded construction contracts to contractors who hired cheap itinerant labor and made low-wage bids. The market impact, Congress believed, was to depress wages for local construction workers below what the local workers otherwise would receive.

         To prevent government contracts from depressing wages for local construction workers, the Davis-Bacon Act guaranteed prevailing local wages to construction workers on federal and D.C. construction projects for public buildings. Offering a succinct summary of the Act's purpose, one Member of Congress remarked: " The purpose of this bill is to require the contractors, including subcontractors, to pay not less than the prevailing rate of wages for work of a similar nature in the city, town, village, or other civil division of the State in which the public buildings are located, or in the District of Columbia." 74 Cong. Rec. 6515 (1931) (statement of Rep. Kopp) (internal quotation marks omitted).

         As initially enacted, the Davis-Bacon Act covered only federal and D.C. contracts for construction of " public buildings." Pub. L. No. 71-798, 46 Stat. 1494 (1931). In 1935, Congress passed and President Franklin Roosevelt signed a new law that amended the Act to cover federal and D.C. contracts for construction of " public works," as ...


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