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Cummings v. Bussey

United States District Court, D. New Mexico

April 20, 2017

v.
v.
CELINA BUSSEY, SECRETARY OF THE NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS, and JASON DEAN, as the DIRECTOR OF THE LABOR RELATIONS DIVISION OF THE NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS, in their individual capacities, Defendants. RANDY CUMMINGS, CRUZ GALLEGOS, ROBERT J. GARCIA, RICHARD GONZALES, ELOY A. JARAMILLO, DAVID LARRANAGA, JOSEPH LOPEZ, RICK LOPEZ, DAVID MONTANO, ANGELO RINALDI, CHRIS SWEENEY, JOSH TILLINGHAST, TOMAS TRUJILLO, JEFFREY S. WADE, JOSHUA HOSELTON, CHARLES W. LEES, JAIME MARQUEZ, ROBERT MENDOZA, ARMANDO ANCHONDO, GUSTAVO BERROSPE, REYES CABRIALES, SERGIO ESCOBEDO, JASON HEAD, NICK HINOJOS, ROBERT G. HITZMAN, MICHAEL LOPEZ, JOSE RODRIGUEZ, SERGIO A. ROJO, RICHARD TENORIO, CESAR TORRES, GRANT WILLIS, HAROLD BROWN, RENE CARRILLO, HENRY NEZ, JR., KURT JOHNSON, JESUS AGUILAR-MURILLO, MARTIN F. ALVAREZ, ARTHUR ARCHULETA, ENRIQUE CORONA, RONALD HUBBARD, ANDREW M. LUGO, HENRY LUJAN, DAVID CARR, D. JEREMIAH CORDOVA, KEVIN CHARVEA, NATHAN ESPALIN, LEVI GUTIERREZ, DENNIS MOORE, ROBERT MORENO, LEVI OLIVAS, THOMAS D. PAYNE, and BRYAN WHEELER, on behalf of themselves and all others similarly situated, Plaintiffs,

          MEMORANDUM OPINION AND ORDER

         Plaintiffs allege that Defendants Celina Bussey, Secretary of the New Mexico Department of Workforce Solutions (Bussey, or the Secretary) and Jason Dean, the Director of the Labor Relations Division of the New Mexico Department of Workforce Solutions (Dean, or the Director) (together, Defendants) violated Plaintiffs' federal rights to procedural and substantive due process by failing to issue prevailing wage determinations in accordance with the New Mexico Public Works Minimum Wage Act (NMPWMWA, or the Act), NMSA 1978, §§ 13-4-10 to -17. See FIRST AMENDED COMPLAINT FOR VIOLATION OF PROCEDURAL AND SUBSTANTIVE PROCEDURAL [sic] DUE PROCESS RIGHTS UNDER 42 U.S.C. § 1983 (Doc. No. 2) (Complaint). Plaintiffs are individuals who performed work on government public works projects in the three years preceding the filing of the Complaint and who claim they did not receive the wages to which they were entitled under the Act. Compl. ¶¶ 1-7, 23. They seek to recover damages for themselves and all others similarly situated. Compl. ¶¶ 8. Defendants assert qualified immunity and ask the Court to dismiss the Complaint. See DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' COMPLAINT BASED UPON QUALIFIED IMMUNITY (Doc. No. 17) (Motion). The Motion has been fully briefed. See PLAINTIFFS' RESPONSE TO DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' COMPLAINT BASED UPON QUALIFIED IMMUNITY (Doc. No. 23) (Response); DEFENDANTS' REPLY IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS' COMPLAINT BASED UPON QUALIFIED IMMUNITY (Doc. No. 25) (Reply). The Court will grant the Motion in part and deny the Motion in part.

         I. BACKGROUND [1]

         In New Mexico, contracts for the “construction, alteration, demolition, or repair of public buildings, public works, or public roads in excess of $60, 000 to which the State or any political subdivision of the State is a party [are] required to contain a provision stating the minimum wages and fringe benefits for all trades which perform work on the project.” Compl. ¶ 13. The NMPWMWA sets forth the procedure by which the Director must determine these minimum wages and fringe benefits. Compl. ¶ 14; NMSA 1978, § 13-4-11(B). Before § 13-4-11(B) was amended in 2009, it required the Director to “conduct a continuing program for the obtaining and compiling of wage-rate information, ” to “encourage the voluntary submission of wage-rate data by contractors, contractors' associations, labor organizations, interested persons and public officers, ” and to “give due regard to the information thus obtained” before determining the wage rates for any project. NMSA 1978, § 13-4-11(B) (2005). Other than “due regard” the statute did not specify any relationship between the data obtained by the Director and the wage rates then set for public works projects. But in 2009, the Act was amended to specifically require that the Director

determine prevailing wage rates and prevailing fringe benefit rates for respective classes of laborers and mechanics employed on public works projects at the same wage rates and fringe benefit rates used in collective bargaining agreements between labor organizations and their signatory employers that govern predominantly similar classes or classifications of laborers and mechanics for the locality of the public works project and the crafts involved.

NMSA 1978, § 13-4-11(B) (2009). If no local collective bargaining agreements (CBAs) exist that are applicable to the class of labor, the Director must look to the nearest and most similar location or labor classification for which a CBA does exist. § 13-4-11(B)(1). While “any interested person” still has the right to submit information to which the Director must “give due regard, ” § 13-4-11(B)(2)-(3), the rates and benefits must be set according to CBAs. See N.M. Bldg. & Constr. Trades Council v. Dean, 2015-NMSC-023, ¶ 21, 353 P.3d 1212 (issuing “writ of mandamus ordering the Director to comply with the Act and set rates in accordance with CBAs”).

         Before the July 1, 2009 effective date of the amendments, a group of nonunion contractors challenged the Act as unconstitutional, alleging violations of due process and equal protection because the Act required prevailing wages to be determined according to union CBAs. See COMPLAINT FOR DECLARATORY JUDGMENT, TO HOLD A STATUTE UNCONSTITUTIONAL AND VOID AS THE STATUTE VIOLATES PLAINTIFFS' DUE PROCESS, EQUAL PROTECTION, THE PUBLIC POLICY OF THE STATE OF NEW MEXICO AND FOR INJUNCTIVE RELIEF, N.M. Associated Builders & Contractors v. Dep't of Workforce Solutions, No. 09-CV-546 WJ/ACT (D. N.M. June 4, 2009), Doc. No. 1 (2009 Complaint). Labor union organization New Mexico Building and Construction Trades Council (NMBCTC) moved to intervene in defense of the Act, but District Judge William Johnson denied the motion. See MEMORANDUM OPINION & ORDER DENYING MOTION TO INTERVENE, N.M. Associated Builders & Contractors v. Dep't of Workforce Solutions, No. 09-CV-546 WJ/ACT (D. N.M. Aug. 20, 2009), Doc. No. 24. While the suit was pending, the same nonunion contractors also filed an administrative appeal challenging the regulations adopted on December 9, 2009 to implement the amended Act. See Mot. Ex. A, Appeal to the Labor & Industrial Commission (LIC). The notice of appeal referenced the pending federal case under the statute and argued that the regulations were invalid for substantially the same reasons, in addition to challenging the rule making process. Id.

         Judge Johnson dismissed the 2009 Complaint for lack of standing because the nonunion contractors had not demonstrated imminent injury to a protected interest, leaving the merits of the claim undecided. See MEMORANDUM OPINION & ORDER GRANTING DEFENDANTS' MOTION TO DISMISS, N.M. Associated Builders & Contractors v. Dep't of Workforce Solutions, No. 09-CV-546 WJ/ACT (D. N.M. Mar. 9, 2010), Doc. No. 39. On July 7, 2010, the LIC denied the administrative appeal on the grounds that the Director had substantially complied with the rule making process and that any substantive objections to the regulations were either without merit or beyond the purview of the Commission because they were rooted in objections to the statute itself. See Mot. Ex. B, Administrative Opinion & Order. However, the LIC stayed the new regulations pending the resolution of any judicial appeal or the expiration of the time in which an appeal could be filed. Id.

         The nonunion contractors continued to challenge the Act. In two separate actions in July and August of 2010, they appealed the LIC's decision to the State of New Mexico First Judicial District Court. See Mot. Ex. C, 2011 Petition for Writ of Mandamus ¶¶ 51-58. They also appealed two subsequent decisions by the LIC that had dismissed their attempts to administratively appeal two announcements by the then-Director of the Labor Relations Division, one that sought the voluntary submission of information needed to set prevailing wage rates for 2011 under the Act, and a second that contained notice of a hearing scheduled for setting those 2011 rates. Id. ¶¶ 59-72. Finally, on December 23, 2010, they filed an appeal with the LIC from the notice of new prevailing wage rates that were scheduled to take effect in 2011. Id. ¶¶ 73-74.

         Any interested person may appeal a determination of the Director to the LIC. NMSA 1978, § 13-4-15. Within ten days of filing the appeal, the LIC must set a hearing to be held within 30 days, and must then issue a decision within ten days after that hearing. Id. Accordingly, the LIC scheduled a hearing on the appeal from the proposed 2011 rates to be held January 19, 2011. But on January 13, two of the three members of the LIC were removed from their positions, effective immediately, by newly-elected New Mexico Governor Susana Martinez. See Mot. Ex. C, 2011 Petition for Writ of Mandamus ¶¶ 27, 77. The nonunion contractors then moved the LIC to vacate the hearing, which it did. Id. ¶ 78. Governor Martinez appointed two new LIC members on January 27, 2011, one of whom was the President of a group of nonunion contractors involved in these appeals. Id. ¶¶ 34-35. The Governor also appointed Secretary Bussey, who had previously been an executive officer of one of the nonunion groups challenging the Act. Id. ¶¶ 27-28. Despite its statutory mandate, the reconstituted LIC did not reschedule the hearing, and the rates calculated for 2011 did not take effect. Id. ¶¶ 45-46, 81; see NMAC 11.1.2.16(B)(1) (filing of notice of appeal stays the effectiveness of any determination).

         By April of 2011, nearly two years after the July 1 effective date for the 2009 amendments to the Act, the nonunion contractors were involved in five unresolved appeals related to those amendments, four pending before the State of New Mexico First Judicial District Court and one before the LIC. See Mot. Ex. C, 2011 Petition for Writ of Mandamus ¶ 14. The Director had never set prevailing wages according to CBAs, and had not set new rates at all since determining the 2010 rates using the old methods in 2009. Id. ¶ 45; N.M. Bldg. & Constr. Trades Council, 2015-NMSC-023, ¶ 3. Consequently, on April 13, 2011 the NMBCTC filed a Petition for Writ of Mandamus asking the New Mexico Supreme Court to compel the Director to set prevailing wage and benefit rates in accordance with CBAs as required by the Act. See Mot. Ex. C, 2011 Petition for Writ of Mandamus. The Court denied the writ on June 15, 2011. See Mot. Ex. D, 2011 Order Denying Writ of Mandamus; N.M. Bldg. & Constr. Trades Council, 2015-NMSC-023, ¶ 3. However, the denial was not on the merits of the legal issue, but in reliance on statements made in oral argument by counsel for the Secretary that a writ of mandamus was not necessary to achieve compliance with the Act. N.M. Bldg. & Constr. Trades Council, 2015-NMSC-023, ¶ 3. The Secretary's counsel assured the Court that the Secretary was “intent on getting this done” and that the Director could set new rates within four or five months. Id.

         In March 2012, the Secretary promulgated new regulations and amended others implementing the Act, but did not set new prevailing wage and benefit rates. See Id. ¶¶ 3-4. NMBCTC challenged these regulations before the LIC, but waived its right to stay the effectiveness of the rules during the appeal process in the interest of having “the Department . . . update the prevailing rates in some manner as soon as possible given that the current rates are based on 2009 data and have not been updated for more than two years.” Mot. Ex. E, 2012 Notice of LIC Appeal. NMBCTC also requested that the LIC waive any automatic stay of the regulations. Id. But the Director still did not set new rates. N.M. Bldg. & Constr. Trades Council, 2015-NMSC-023, ¶ 3. The LIC denied the appeal on July 29, 2014, see Mot. Ex. F, 2014 LIC Order on Appeal, and NMBCTC sought judicial review of the denial in the State of New Mexico Second Judicial District Court, see Mot. Ex. G, 2014 Notice of Appeal; N.M. Bldg. & Constr. Trades Council v. Bussey, Case No. D-202-CV-2014-05512. By June of 2015, the state-court litigation was still pending and the Director had yet to set new prevailing wage and benefit rates despite the prior assurances made to the New Mexico Supreme Court. See N.M. Bldg. & Constr. Trades Council, 2015-NMSC-023, ¶¶ 3-4.

         Consequently, NMBCTC filed a second Petition for Writ of Mandamus with the New Mexico Supreme Court in 2015, again asking the Court to compel the Director to set prevailing wage and benefit rates in accordance with CBAs. Id. ¶¶ 2-3. This time the Court granted the writ and issued an opinion holding that “under the Act, specifically Section 13-4-11, the Director has a mandatory, nondiscretionary duty to set prevailing wage and prevailing benefit rates the same as those negotiated in applicable CBAs.” Id. ¶ 21. The Court ordered the Director to set rates in accordance with CBAs within 30 days of the issuance of the June 15, 2015 opinion, and to continue to set rates in that manner. Id.

         The Director's persistent failure to comply with the amended Act resulted in the use of prevailing wage rates that were not equivalent to CBAs or even updated from the 2009 determinations until after the writ of mandamus issued in June of 2015. Compl. ¶¶ 19-20. Plaintiffs were paid less and received fewer benefits than they should have for the work they performed on public works projects from 2009 until the date of the Complaint because the minimum wages and benefits guaranteed by their contracts were lower than the prevailing rates required by the Act. Compl. ¶¶ 21-23. Plaintiffs assert that Defendants' actions violated their constitutional rights to substantive and procedural due process. Compl. ¶¶ 8, 42-43, 48.

         II. LEGAL STANDARD

         Plaintiffs bring their due-process claims under the Fourteenth Amendment and 42 U.S.C. § 1983. See Compl. ¶¶ 8, 37, 48. The Court has original jurisdiction over these claims under 28 U.S.C. § 1331 and 28 U.S.C. § 1343(a)(3). Defendants answered the Complaint, see DEFENDANTS' ANSWER TO FIRST AMENDED COMPLAINT FOR VIOLATION OF PROCEDURAL AND SUBSTANTIVE PROCEDURAL [sic] DUE PROCESS RIGHTS UNDER 42 U.S.C. ยง 1983 (Doc. No. 9), but then moved for judgment on ...


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