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MADER CONSTR. CORP. v. UNITED STATES DOL

April 12, 1985

MADER CONSTRUCTION CORPORATION, Plaintiff,
v.
UNITED STATES DEPARTMENT OF LABOR, RIVERVIEW APARTMENTS COMPANY, JACK E. CHRISTIAN HEATING & PLUMBING, INC., R.A.N.J. INTERNATIONAL CONSTRUCTION, LTD., GARY KIRTON d/b/a KIRTON ELECTRIC, HAKES BROTHERS CONTRACTORS, INC., and GROSS PLUMBING & HEATING CO., INC., Defendants.



The opinion of the court was delivered by: ELFVIN

MEMORANDUM

This Memorandum supports and supplies the rationale underlying this Court's Order of October 30, 1984.

Plaintiff ("Mader") has alleged in its Complaint that it was contacted and informed by the United States Department of Labor and the Department of Housing and Urban Development ("HUD") September 6, 1979 that these agencies were commencing an investigation into possible violations of the Davis-Bacon Act, 40 U.S.C. § 276a et seq., and of the Contract Work Hours and Safety Standards Act, 40 U.S.C. § 327 et seq. in connection with a project known as the Riverview Apartments. At the time, Mader was the general contractor for this development, a non-union housing project financed in part by HUD. The Department of Labor and HUD allegedly advised Mader that, as general contractor, it would be required to remit to the Department of Labor, $79,030 out of a $90,000 job payment escrow fund being withheld from Mader by defendant Riverview Apartments Company ("Riverview") pending the outcome of the agency wage underpayment investigations.

 On September 25, 1979 Mader requested a hearing pursuant to 29 C.F.R. § 5.11(b) with respect to the Department of Labor's allegations. Before such Department had responded, HUD requested that Riverview remit $79,030 out of the escrow fund to cover the wage underpayment claims. Mader contacted HUD and the Department of Labor to object to such remittance.

 On April 14, 1980 Mader received a letter from an assistant administrator of the Department of Labor's Employment Standards Administration, Wage and Hour Division, which stated that the Department was continuing its investigation and that Mader's request for a hearing would be considered upon completion of the investigation. Mader again contacted the Department March 20, 1981 regarding its request for a hearing. On April 10, 1981 Mader was notified that the investigation files had been transferred to the solicitor's office for review and referral for a hearing.

 A December 5, 1981 Order of Reference granted Mader's request for a hearing and referred the matter to the Chief Administrative Law Judge for appointment of a presiding officer. On or about February 11, 1982 Mader filed a motion to dismiss the pending administrative proceeding on the ground that the hearing was barred by the two-year statute of limitations contained in the Portal-to-Portal Act, 29 U.S.C. § 255. Mader's motion was denied by the Administrative Law Judge (the "ALJ") August 5, 1982. Mader then petitioned the Administrator of the Wage and Hour Division pursuant to 29 C.F.R. § 5.11(b). The Administrator affirmed the ALJ's decision June 2, 1983.

 Mader has commenced the instant action to review the Administrator's decision. It seeks a declaratory judgment, the dismissal of the Department of Labor's claims under the Davis-Bacon Act and Contract Work Hours and Safety Standards Act and recovery of the funds which had been withdrawn from the escrow account. The Department of Labor has moved to dismiss the Complaint due to Mader's failure to exhaust the administrative remedies provided for in 29 C.F.R. § 5.11(b) and 29 C.F.R. Part 7.

 Mader contends that the decision of the Administrator is final for purposes of judicial review pursuant to 29 C.F.R. §§ 5.11(b) and section 10(c) of the Administrative Procedures Act ("the APA"), 5 U.S.C. § 704. Furthermore, Mader maintains that exhaustion of administrative remedies is not mandated in the case at bar inasmuch as any further administrative proceedings would be futile.

 The procedure for resolution of disputes of fact or law concerning payment of prevailing wage rates, overtime pay or proper classification had been set forth in 29 C.F.R. § 5.11(b). *fn1" This section provided in part:

 "The administrative law judge's decision shall be sent to the interested parties and shall be final unless a petition for review of the decision by the Administrator of the Wage and Hour Division is filed by any such parties * * *.

 "The Administrator's decision shall be subject to further review by the Wage Appeals Board, as it may provide in its discretion."

 While it is true that under 29 C.F.R. Part 7, the Wage Appeals Board has discretionary jurisdiction to hear and decide appeals concerning questions of law and fact from final decisions under Parts 1, 3 and 5, this discretionary authority does not abrogate a party's duty to pursue administrative remedies.

 FTC v. Standard Oil Co. of Cal., 449 U.S. 232, 66 L. Ed. 2d 416, 101 S. Ct. 488 (1980) ("Standard Oil "), provides guidance in determining the finality vel non of agency action and therefore the availability of judicial review. Although the particular issue therein was whether the issuance of a complaint by the Federal Trade Commission ("the FTC") was final agency action subject to judicial review before administrative adjudication had concluded, the Court's discussion of the notion of finality as previously addressed in Abbott Laboratories v. Gardner, 387 U.S. 136, 18 L. Ed. 2d 681, 87 S. Ct. 1507 (1967), is instructive. In Standard Oil, the respondent company had filed a complaint against the FTC in the United States District Court for the Northern District of California, alleging that the FTC had issued its complaint without having reason to believe that the company had been violating the Federal Trade Commission Act. The company sought an order declaring that the issuance of the complaint was unlawful and requiring that such be withdrawn.

 The decision noted the distinction between the type of action deemed "final agency action" under Abbott Laboratories v. Gardner and the ...


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