Case Name: G & G FIRE SPRINKLERS, INC., Plaintiff-Appellee, v. Victoria L. BRADSHAW, an individual, in her capacity as Labor Commissioner of the State of California; Lloyd W. Aubry, Jr., an individual in his official capacity as Director of the Department of Industrial Relations of the State of California; Daniel Dellarocca, an individual, in his official capacity as Deputy Labor Commissioner of the State of California; Roger Miller, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Rosa Frazier, an individual in her capacity as Deputy Labor Commissioner of the State of California, Defendants-Appellants; G & G Fire Sprinklers, Inc., Plaintiff-Appellee, v. Victoria L. Bradshaw, an individual in her official capacity as Labor Commissioner of the State of California; Lloyd W. Aubry, Jr., an individual in his official capacity as Director of the Department of Industrial Relations of the State of California; Daniel Dellarocca, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Roger Miller, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Rosa Frazier, an individual in her official capacity as Deputy Labor Commissioner of the State of California; Division of Labor Standards Enforcement, an agency of the State of California; Department of Industrial Relations, an agency of the State of California, Defendants-Appellants
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 2000-02-23
Citations: 204 F.3d 941
Docket Number: Nos. 95-56639, 96-55194
Parties: G & G FIRE SPRINKLERS, INC., Plaintiff-Appellee, v. Victoria L. BRADSHAW, an individual, in her capacity as Labor Commissioner of the State of California; Lloyd W. Aubry, Jr., an individual in his official capacity as Director of the Department of Industrial Relations of the State of California; Daniel Dellarocca, an individual, in his official capacity as Deputy Labor Commissioner of the State of California; Roger Miller, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Rosa Frazier, an individual in her capacity as Deputy Labor Commissioner of the State of California, Defendants-Appellants. G & G Fire Sprinklers, Inc., Plaintiff-Appellee, v. Victoria L. Bradshaw, an individual in her official capacity as Labor Commissioner of the State of California; Lloyd W. Aubry, Jr., an individual in his official capacity as Director of the Department of Industrial Relations of the State of California; Daniel Dellarocca, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Roger Miller, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Rosa Frazier, an individual in her official capacity as Deputy Labor Commissioner of the State of California; Division of Labor Standards Enforcement, an agency of the State of California; Department of Industrial Relations, an agency of the State of California, Defendants-Appellants.
Judges: Before: REINHARDT, KOZINSKI and HAWKINS, Circuit Judges.
Reporter: Federal Reporter 3d Series
Volume: 204
Pages: 941–947

Head Matter:
G & G FIRE SPRINKLERS, INC., Plaintiff-Appellee, v. Victoria L. BRADSHAW, an individual, in her capacity as Labor Commissioner of the State of California; Lloyd W. Aubry, Jr., an individual in his official capacity as Director of the Department of Industrial Relations of the State of California; Daniel Dellarocca, an individual, in his official capacity as Deputy Labor Commissioner of the State of California; Roger Miller, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Rosa Frazier, an individual in her capacity as Deputy Labor Commissioner of the State of California, Defendants-Appellants. G & G Fire Sprinklers, Inc., Plaintiff-Appellee, v. Victoria L. Bradshaw, an individual in her official capacity as Labor Commissioner of the State of California; Lloyd W. Aubry, Jr., an individual in his official capacity as Director of the Department of Industrial Relations of the State of California; Daniel Dellarocca, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Roger Miller, an individual in his official capacity as Deputy Labor Commissioner of the State of California; Rosa Frazier, an individual in her official capacity as Deputy Labor Commissioner of the State of California; Division of Labor Standards Enforcement, an agency of the State of California; Department of Industrial Relations, an agency of the State of California, Defendants-Appellants.
Nos. 95-56639, 96-55194.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Sept. 14, 1999.
On Remand from the United States Supreme Court April 19, 1999.
Filed Feb. 23, 2000.
Before: REINHARDT, KOZINSKI and HAWKINS, Circuit Judges.

Opinion:
Order; Dissent by
Judge KOZINSKI.
ORDER
In G & G Fire Sprinklers, Inc. v. Bradshaw, 156 F.3d 893 (9th Cir.1998), we held that California Labor Code provisions authorizing the state to seize money and impose penalties for a subcontractor's failure to comply with prevailing wage requirements violated the Due Process Clause of the Fourteenth Amendment. See id. at 904. The Supreme Court granted certiorari, vacated our judgment, and remanded "for further consideration in light of American Manufacturers Mutual Insurance Company v. Sullivan, 526 U.S. 40, 119 S.Ct. 977, 143 L.Ed.2d 130 (1999)." Bradshaw v. G & G Fire Sprinklers, Inc., — U.S. -, 119 S.Ct. 1450, 143 L.Ed.2d 538 (1999). Having determined that Sullivan is fully consistent with our analysis, we reinstate the judgment and opinion.
DISCUSSION
Sullivan involved the Pennsylvania Workers' Compensation Act, under which an employer or its insurer must pay for all "reasonable" and "necessary" medical treatment for work-related injuries. See 119 S.Ct. at 982. Under the Pennsylvania scheme, an insurance company could withhold payment for medical treatment if it disputed the reasonableness or necessity of that treatment. See Pa. Stat. Ann. § 531(5) ("All payments to providers for treatment . shall be made within thirty (30) days of receipt of such bills and records unless the employer or insurer disputes the reasonableness or necessity of the treatment."). The Sullivan plaintiffs claimed that the failure to pay their contested benefit claims within thirty days, before a process was provided to resolve the dispute about the "reasonableness" of their treatment, amounted to a deprivation of due process.
Sullivan dealt with two questions: (1) whether the insurance company's decision to withhold payment for disputed medical treatment was fairly attributable to the State so as to subject insurers to the constraints of the Fourteenth Amendment, 119 S.Ct. at 984; and (2) whether the Due Process Clause requires workers' compensation insurers to immediately pay disputed medical bills prior to a determination that the medical treatment was reasonable and necessary. Id. at 985.
The first question concerns whether there is state action, since the Fourteenth Amendment does not reach private acts or actors. Sullivan repeats a familiar calculus to determine the presence of state action: there must be some deprivation of a constitutional right and the party charged with the deprivation must be fairly said to be a state actor. Id. at 986. The second question turns on whether the claimant has a property interest in the matter complained of.
The Supreme Court found that the Sullivan plaintiffs did not possess a property interest in the immediate, unconditional payment for all medical treatment under the Pennsylvania statute. Nevertheless, the Court stated that the plaintiffs did have an interest in payment of "reasonable" medical costs, see Sullivan, 119 S.Ct. at 990, and went out of its way to make clear that its holding did not upset previous Supreme Court precedent supporting the conclusion that the plaintiffs had a property interest in their claims for payment. See id. at n. 13 ("Respondents do not contend that they have a property interest in their claims for payment, as distinct from the payments themselves, such that the State, the arguments goes, could not finally reject their claims without affording them appropriate procedural protections.") (citing Logan v. Zimmerman Brush Co., 455 U.S. 422, 430-31, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982)). Justice Ginsburg, who provided the fifth vote necessary to make the due process discussion in Sullivan an opinion of the Court, further clarified this distinction in her concurrence:
I join Part III of the Court's opinion on the understanding that the Court rejects specifically, and only, respondent's demands for constant payment of each medical bill, within 30 days of receipt, pending determination of the necessity or reasonableness of the medical treatment. I do not doubt, however, that due process requires fair procedures for the adjudication of respondents' claims for workers' compensation benefits, including medical care.
Sullivan, 119 S.Ct. at 991 (emphasis added) (citation omitted).
Our opinion adopts the approach explicitly preserved by the Sullivan majority and unequivocally adopted in Justice Ginsburg's concurrence. We specifically held that G & G did not have a right to payment of the disputed funds pending the outcome of whatever kind of hearing would be afforded to determine whether G & G complied with the California prevailing wage laws. See G & G Fire Sprinklers, 156 F.3d at 903-04. To the contrary, we explicitly authorized the withholding of payments pending the hearing. See id. G & G's due process rights were violated, we held, not because it was denied immediate payment, but because the California statutory scheme afforded no hearing at all when state officials directed that payments be withheld. See id. at 904. Nor can there be any doubt whether the action at issue here was compelled by the State. The withholding in Sullivan was carried out by a private insurer exercising its discretion in a way permitted by State law. The withholding here was specifically directed by State officials in an environment where the withholding party has no discretion at all. Moreover, in their complaint the plaintiffs directly attack the notices of withholding issued by the state agency, alleging that they were issued "arbitrarily and unreasonably."
Because our holding is not contrary to the Court's ruling in Sullivan, and because our opinion's reasoning fits comfortably within the analytic framework set forth in Sullivan, we REINSTATE the judgment and the opinion reported at 156 F.3d 893 (9th Cir.1998).
. It is true that our opinion addressed the withholding of payments pending the outcome of the hearing to determine contractor compliance in its discussion of the "process due" to a protected property interest, and not in its discussion of the nature of the property interest protected. In contrast, the above discussion in Sullivan is situated in the Supreme Court's discussion of the existence or nonexistence of a protected property interest. But this does not reduce the relevance of Sullivan 's reasoning. As the Court recognized in the seminal due process case Mathews v. Eldridge, the definition of a protected property interest often includes a temporal component. See 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (identifying the property interest at stake as the beneficiary's interest in continuing to receive benefits for approximately one year). For this reason, issues of timing can arise at either the property-determination or the process-determination stage.