Prime Electric Co. v. Oklahoma State Department of Labor

[16] This case started as an administrative proceeding before the Labor Commissioner [Commissioner] to debar a subcontractor, Prime Electric Co., Inc. [Subcontractor or Prime], from public work for its failure to pay prevailing wages to several laborers on a public-construction job. Today's opinion holds that these laborers' claims were in the "pipeline" created by the supplemental opinion on rehearing in City of Oklahoma City et al v.State ex rel. Oklahoma Dept. of Labor¹ [City] and hence fall under this court's axe of constitutional invalidation. City teaches that the sentence of nullity pronounced in that case shall govern all constitutional challenges to prevailing-wage clauses, interposed by public constructionbuilders (payors under the main contract), whose claims, counterclaims or cross-claims were pending in the pipeline on October 10, 1995.² *Page 366

[17] In a debarment proceeding³ based on Subcontractor's alleged underpayment of wages, the Commissioner determined that Subcontractor had violated the prevailing-wage law.⁴ The Commissioner's August 13, 1995 order debarred Subcontractor from performing work on public projects for two years and found it liable for underpaid wages. Both the district court and Court of Appeals affirmed this disposition. Today's pronouncement vacates the Court of Appeals' opinion, reverses the trial court's decision and sets aside the Commissioner's order.

[18] I dissent from the court's holding that the laborers' claims in thiscause have pipeline status. Today's decision rests on the erroneous notion that because Prime (1) pressed the clause's invalidity in its petition for rehearing before the Court of Appeals and (2) its appeal was in the decisional process on October 10, 1995, Subcontractor's challenge was timely made. This rationale is incorrect for two reasons. A challenge interposed on rehearing comes much too late, and it is highly doubtful that Subcontractor would have had standing to assail the prevailing-wage clause if its attack had been timely made.

I

[19] SUBCONTRACTOR'S CHALLENGE TO THE PREVAILING-WAGE CLAUSE, INTERPOSED FORTHE FIRST TIME IN THE REHEARING STAGE OF ITS APPEAL, CAME MUCH TOO LATE

[20] Subcontractor's challenge to the constitutionality of the prevailing-wage clause, first interposed at the rehearing stage before the Court of Appeals, was not timely pressed. Nonjurisdictional issues, urged for the first time on rehearing, are generally deemed unfit for appellate review.⁵ II

[21] ON THIS RECORD, SUBCONTRACTOR WOULD NOT HAVE HAD STANDING TO CHALLENGETHE CONSTITUTIONALITY OF THE PREVAILING-WAGE CLAUSE IF ITS ATTACK HAD BEENTIMELY LAUNCHED UNLESS SUBCONTRACTOR COULD SHOW THAT IT WAS ECONOMICALLYHARMED BECAUSE ITS GENERAL CONTRACTOR'S UNDERTAKING WAS ENTITLED TOPIPELINE STATUS AND SUBCONTRACTOR'S CLAIM TO RECOVER FULL CONTRACT PRICESTOOD IMPAIRED BY THAT POSTURE

[22] Only an "aggrieved" party may have standing to challenge the validity of its contract's *Page 367 prevailing-wage clause. Standing must be predicated on economic harm.⁶ Prime incurred the obligation of paying the then-prevailing wage under an undertaking that presumably factored that wage into the contract price. By accepting the benefits of that contract, Prime is estopped from denying its undertaking's validity.⁷ Inasmuch as, on this record, Subcontractor has shown no harm suffered from the assumed obligation, it has no standing to challenge the infirmity of the prevailing-wage clause. Moreover, the prudential bar of restraint commands that constitutional issues not be resolved in advance of strict necessity.⁸

[23] This record does not reveal, and we cannot say, that our City opinion protects Subcontractor's refusal to comply with the prevailing-wage obligation. There is absolutely no proof that (a) the main contract between the public builders (Noble Research Center at Oklahoma State University and I.L.S. Training Facility at the Federal Aviation Administration Center in Oklahoma City) and the Subcontractor's general contractor on the job was in the pipeline on October 10, 1995 (when City was handed down) and (b) if in fact it was in that pipeline, whether Subcontractor's claim to recover its full contract price stood impaired by the general contract's pipeline posture.

[24] SUMMARY [25] Because at the time this case was reached for trial neither the parties nor the judge assigned to the case had the benefit of our October 10, 1995 City pronouncement (and of the subsequent supplemental opinion on rehearing), I would counsel the court today to vacate the Court of Appeals' opinion, reverse the trial court's order and remand this cause for further proceedings at nisi prius to afford Subcontractor an opportunity to show that (a) its general contractor's undertaking for payment of thethen-prevailing wage does indeed rest in the pipeline and hence came to be invalidated by City and (b) this invalidation impairs Subcontractor's ability to recover the full contract price. Nothing less would give this Subcontractor standing to attack, as infirm, its promise to pay the prevailing wage.

¹ Okla., ___ P.2d ___ (1996) (67 OBJ 1693, 1996 WL 306672)(supplemental opinion on rehearing).

² The supplemental opinion on rehearing, supra note 1, which gives our pronouncement in City limited retrospective reach, states in pertinent part:

" * * * (a) public-construction contracts negotiated and executed before the date of the of the opinion [October 10, 1995] shall be impervious to an attack upon the constitutionality of their prevailing-wage clauses and (b) contracts, like those described in subparagraph (a), though negotiated before but executed after the opinion's date, shall be equally safe from attack absent proof of a postopinion downward contract price adjustment (that would reflect a pre-execution rejection of the prevailing-wage clause). . . . Regardless of the date a contract was negotiated and executed, . . . the opinion's declaration of invalidity will govern this case and all other public builders' constitutional challenges of the prevailing-wage clause's validity, which stood pending in the litigation pipeline on October 10, 1995." (Emphasis added.)

³ The debarment phase of the administrative proceeding below is, of course, governed by the law in force at the time the debarment order was issued. Subcontractor would hence be bound by the prevailing-wage obligation unless, as discussed later in this writing, the general contractor's undertaking was in fact in the pipeline at the critical time and Subcontractor's claim to recover its full contract price stood impaired by the general contract's pipeline status. See discussion in Part II.

⁴ 40 O.S. 1991 §§ 196.1-196.165[40-196.1-196.165] (the now condemned Little Davis-Bacon or Prevailing Wage Act).

⁵ See City, supra note 1 at 365; Brigance v. Velvet Dove Restaurant, Okla., 756 P.2d 1232, 1234 (1988); Pirrong v. Pirrong, Okla.,552 P.2d 383, 387 (1976); Pointer v. Hill, Okla., 536 P.2d 358, 361 (1975); Brown v. State Election Bd., Okla., 369 P.2d 140, 151 (1962); Hope v. Peck,38 Okla. 531, 134 P. 33 (1913). For similar federal jurisprudence, see Wills v. Texas, ___ U.S. ___, 114 S.Ct. 1867, 128 L.Ed.2d 488 (1994)(O'Connor, J., concurring); Hoover v. Ronwin, 466 U.S. 558, 574 n. 25, 104 S.Ct. 1989, 1998, 80 L.Ed.2d 590 (1984); Radio Station WOW v. Johnson,326 U.S. 120, 128, 65 S.Ct. 1475, 1480, 89 L.Ed. 2092 (1945).

⁶ Standing must be predicated on an injury to an interest which is "direct, immediate and substantial." Democratic Party of Oklahoma v. Estep, Okla., 652 P.2d 271, 274 (1982); Application of State ex rel. Dept. of Transp., Okla., 646 P.2d 605, 609 (1982); Underside v. Lathrop, Okla.,645 P.2d 514, 517 (1982); Cleary Petroleum Corp. v. Harrison, Okla.,621 P.2d 528, 530 (1980).

⁷ The terms of 15 O.S. 1991 § 75[15-75] are:

"A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it so far as the facts are known, or ought to be known to the person accepting."

D.W.L., Inc. v. Goodner-Van Engineering Co., Okla., 373 P.2d 38, 42 (1962); Carlisle v. National Oil Development Co., 108 Okla. 18, 234 P. 629, 630 (1924); Shawnee Nat. Bank v. Purcell Wholesale Grocery Co., 34 Okla. 34,124 P. 603, 608 (1912).

⁸ In re Snyder, 472 U.S. 634, 642-643, 105 S.Ct. 2874, 2880, 86 L.Ed.2d 504 (1985); Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 501-502, 105 S.Ct. 2794, 2801, 86 L.Ed.2d 394 (1985); I.N.S. v. Chadha,462 U.S. 919, 937, 103 S.Ct. 2764, 2776, 77 L.Ed.2d 317 (1983); Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 347, 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936) (Brandeis, J., concurring); Wright v. Grove Sun Newspaper Co., Okla., 873 P.2d 983, 990 n. 31 (1994); In re Initiative Petition No. 347 State Question No. 639, Okla., 813 P.2d 1019, 1037 (1991) (Opala, C.J., concurring); Smith v. Westinghouse Elec. Corp., Okla., 732 P.2d 466, 467 n. 3 (1987); Schwartz v. Diehl, Okla., 568 P.2d 280, 283 (1977); Dablemont v. State, Department of Public Safety, Okla., 543 P.2d 563, 564-565 (1975).