Long Beach v. Dept. Ind. Relations 7/14/03 CA2/7

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State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: B159333

Case Date: 07/14/2003

Preview:Filed 7/14/03

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN CITY OF LONG BEACH, Plaintiff and Respondent, v. DEPARTMENT OF INDUSTRIAL RELATIONS, Defendant and Appellant. APPEAL from a judgment of the Superior Court of Los Angeles County. David P. Yaffe, Judge. Reversed. John M. Rea, Chief Counsel, Steven A. McGinty, Assistant Chief Counsel, Anthony Mischel, Staff Counsel, Department of Industrial Relations, for Defendant and Appellant. Robert E. Shannon, City Attorney, Daniel S. Murphy, Principal Deputy, City of Long Beach, for Plaintiff and Respondent. Altshuler, Berzon, Nussbaum, Rubin & Demain, Stephen P. Berzon, Scott A. Kronland and Victor M. Ortiz-de-Montellano, for The State Building and Construction Trades Council of California, AFL-CIO as Amicus Curiae on behalf of Defendant and Appellant. Rutan & Tucker, M. Katherine Jenson and Mark J. Austin for 44 California Cities as Amici Curiae on behalf of Plaintiff and Respondent. B159333 (Los Angeles County Super. Ct. No. BS072516)

The Department of Industrial Relations appeals from a judgment granting a petition for writ of mandate filed by the City of Long Beach. The city seeks to overturn the department's determination a construction project financed in part with city funds was subject to the state's prevailing wage law, Labor Code section 1720 et seq. We conclude when a city contributes its funds to a private non-profit organization for the specific purpose of constructing a facility to be used by the general public the facility is a "public work" within the meaning of Labor Code section 1720 and therefore subject to the state's prevailing wage law. We further conclude the city's status as a charter city does not exempt the project from the state's prevailing wage law for two independently sufficient reasons: (1) the animal shelter is not a strictly municipal affair and (2) the state's prevailing wage law addresses matters of statewide concern. We also reject the city's arguments the department is barred by the doctrines of estoppel and laches from making a coverage determination in this case. FACTS AND PROCEEDINGS BELOW The facts are not in dispute. In 1998, the City of Long Beach (City) entered into an agreement with the Los Angeles Society for the Prevention of Cruelty to Animals (SPCA-LA) under which it agreed to contribute $1.5 million to the construction of a facility in the City which would serve as an animal shelter and the administrative headquarters of the SPCA-LA as well as provide kennels and office space for the City's animal control department. The agreement required the City's funds be placed in a segregated account and used only for expenses related to development of the project including SPCA-LA's "investigation and analysis" of the property on which the shelter was to be built, "permit, application, filing and other fees and charges" and "design and preconstruction costs." The SPCA-LA was specifically precluded from using any of the City's funds "to pay overhead, supervision, administrative or other such costs" of the organization or in 2

support of any "political activity." The agreement further provided it was "interdependent" with lease and lease-back agreements between the parties with respect to the City land on which the project would be built and "if either the lease or lease-back is terminated, then this agreement shall also terminate automatically and without notice." Finally, the agreement provided "[i]f there is a claim relating to the payment of wages arising from the construction described herein" the City shall pay 95 percent of "all costs, expenses, penalties, payments of wages, interest, and other charges related to the claim, including attorneys' fees and court or administrative costs and expenses[.]" Acting on an inquiry by a labor organization, the Department of Industrial Relations (DIR) began an investigation to determine whether the project was a "public work" under Labor Code section 1720 and therefore subject to the prevailing wage rates mandated by section 1771. The City took the position the project was not a public work but even if it was the prevailing wage law did not apply because the project was a strictly "municipal affair" of a charter city. Following its investigation the DIR concluded the project was a public work and was not exempt from the prevailing wage law by reason of the City's status as a charter city. This determination was affirmed on an administrative appeal. Evidence submitted by the City on its administrative appeal showed approximately $1 million of the City's $1.5 million contribution was spent on architecture ($318,333), project management ($440,524), legal fees ($16,645), surveying ($14,500), and insurance ($23,478). Evidence obtained from the SPCA-LA showed the project was intended to serve the entire Los Angeles County area and parts of Orange County. Animals from all
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Future unlabeled statutory references are to the Labor Code. Section 1771 states in relevant part: "[N]ot less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed . . . shall be paid to all workers employed on public works." In determining these rates the Director of Industrial Relations is required to ascertain and consider "the applicable wage rates established by collective bargaining agreements . . . within the locality and in the nearest labor market area." (

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