Court Opinion

ID: 9795526
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:30:41.279922+00
Date Added: 2024-06-11T08:30:12.219851
License: Public Domain

KENNARD, J., Dissenting.
When a construction project is funded in whole or in part by a public entity, California law requires that the workers be paid the local prevailing wage. Here, a city and a charity entered into a contract for construction of a building, and agreed that the city would pay for certain expenses essential to the overall project but would not pay for erection of the building itself. The majority concludes the project was not a public work and therefore not subject to the prevailing wage. I disagree.
*955I
In 1998, the City of Long Beach (City) contracted with the Society for the Prevention of Cruelty to Animals, Los Angeles (SPCA-LA) for the latter to construct a building that was to contain an animal shelter as well as the SPCA-LA’s headquarters and the City’s animal control department. The City agreed to contribute $1.5 million to the project (which ultimately cost approximately $10 million) and to lease to the SPCA-LA, at a nominal fee, the six and one-half acres of land on which the facility was to be built.
In December 1999, just after ground was broken and the actual building had begun, a local newspaper reported on the project. This prompted a labor organization to ask the state Department of Industrial Relations (DIR) to investigate whether the project was a public work and therefore subject to the prevailing wage law. In response to the DIR’s inquiry, the City explained in a letter written in September 2000 that the SPCA-LA had placed the City’s $1.5 million contribution in a segregated account; that roughly $1 million was being used to pay the architects, project managers, lawyers, and surveyors, as well as the insurance costs; the rest would be used for advertising, fundraising, and “startup costs” such as furniture and equipment; and that none of the City’s money would be used to pay for the building itself. The City asserted that because its financial contribution would not be used to pay for the building itself, the project was not a public work. The DIR, however, determined that the project was a public work and therefore subject to the prevailing wage law; that ruling was affirmed on administrative appeal. The City challenged that decision in a petition for writ of mandate in the superior court. The court granted the writ, and the DIR appealed. The Court of Appeal reversed the superior court, concluding that the project was a public work.
II
Labor Code section 17711 provides that “all workers employed on public works” costing more than $1,000 must be paid “the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed . . . .” When the City and the SPCA-LA contracted to build the animal control facility in question, the version of section 1720, subdivision (a) (former section 1720(a)) then in effect defined “public works” in these words: “Construction, alteration, demolition, or repair work done under contract and paid for in whole or in part out of public funds . . . .” (Stats. 1989, ch. 278, § 1, p. 1359, italics added.) At issue here is what the Legislature meant by the term “construction.” That term, which has been in section 1720 since its enactment in 1937, is ambiguous. In a narrow sense it *956could mean—as the majority concludes—erection of the actual building only. In a broader sense it could mean—as the Court of Appeal concluded—the entire construction project, including the architectural, project management, insurance, surveying, and legal costs paid for by the City here. The parties furnish no legislative history bearing on the intent of the Legislature in 1937, when it used the word “construction” in former section 1720(a). But two principles of statutory interpretation provide guidance, as discussed below.
In construing an ambiguous statute, courts generally defer to the views of an agency charged with administering the statute. “While taking ultimate responsibility for the construction of a statute, we accord ‘great weight and respect to the administrative construction’ thereof. ...[][] Deference to administrative interpretations always is ‘situational’ and depends on ‘a complex of factors’ . . . , but where the agency has special expertise and its decision is carefully considered by senior agency officials, that decision is entitled to correspondingly greater weight. . . .” (Sharon S. v. Superior Court (2003) 31 Cal.4th 417, 436 [2 Cal.Rptr.3d 699, 73 P.3d 554], citations & fn. omitted (Sharon S.); see also Styne v. Stevens (2001) 26 Cal.4th 42, 53 [109 Cal.Rptr.2d 14, 26 P.3d 343]; Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 11-15 [78 Cal.Rptr.2d 1, 960 P.2d 1031].)
The Legislature has given the Director of the DIR “plenary authority to promulgate rules to enforce the Labor Code,” including “the authority to make regulations governing coverage” under the prevailing wage law. (Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 989 [4 Cal.Rptr.2d 837, 824 P.2d 643].) When, as here, the meaning of a statutory term is ambiguous and there is no indication of the Legislature’s intent regarding its meaning, this court should defer to the DIR’s determination based on its “special expertise” (Sharon S., supra, 31 Cal.4th at p. 436), so long as that determination was “carefully considered by senior agency officials” (ibid.) and is consistent with the DIR’s previous decisions (Yamaha Corp. of America v. State Bd. of Equalization, supra, 19 Cal.4th at p. 13 [courts should not defer to an administrative agency that has taken a “vacillating position” as to the meaning of the statute in question]).
Here, in a 13-page decision signed by DIR Director Stephen Smith, the DIR concluded that this project was a public work. The DIR’s regulations have long stated that surveying work, which the City paid for here, comes within the definition of the term “construction” under former section 1720(a), whether or not it occurs before the actual building process begins, so long as it is “integral to” the project. (Cal. Code Regs., tit. 8, § 16001, subd. (c).) The City does not deny that the work performed by the architect and the project manager—also paid for by the City—was integral to the construction project here. Thus, the DIR’s determination that the construction project in question *957is a public work was carefully considered by a senior agency official and is consistent with the agency’s regulations. Therefore, that decision commands great deference.
Also lending support to my conclusion is California’s long-standing policy that prevailing wage laws are to be liberally construed in favor of the worker. (Walker v. County of Los Angeles (1961) 55 Cal.2d 626, 634-635 [12 Cal.Rptr. 671, 361 P.2d 247]; McIntosh v. Aubry (1993) 14 Cal.App.4th 1576, 1589 [18 Cal.Rptr.2d 680]; Union of American Physicians v. Civil Service Com. (1982) 129 Cal.App.3d 392, 395 [181 Cal.Rptr. 93]; Melendres v. City of Los Angeles (1974) 40 Cal.App.3d 718, 728 [115 Cal.Rptr. 409]; Alameda County Employees’ Assn. v. County of Alameda (1973) 30 Cal.App.3d 518, 531 [106 Cal.Rptr. 441].) When, as here, a term in the prevailing wage law can plausibly be construed in two ways, one broad and one narrow, and there is no evidence that the Legislature intended the term’s narrow meaning, this court should adopt the term’s broader meaning. The Legislature’s objectives in enacting the prevailing wage law were these; “to protect employees from substandard wages that might be paid if contractors could recruit labor from distant cheap-labor areas; to permit union contractors to compete with nonunion contractors; to benefit the public through the superior efficiency of well-paid employees; and to compensate nonpublic employees with higher wages for the absence of job security and employment benefits enjoyed by public employees.” (Lusardi Construction Co. v. Aubry, supra, 1 Cal.4th at p. 987.) These purposes will be implemented by applying the prevailing wage law to the project here.
For the reasons given above, the word “construction” in former section 1720(a) refers to work that, in the Court of Appeal’s words, is “integrally connected to the actual building and without which the structure could not be built.” That includes the costs of surveying, architectural design and supervision, and project management paid for by the City here.
in
The majority acknowledges the two rules of statutory interpretation I just discussed. As applied here, those rules require a broad reading of the word “construction” in former section 1720(a). Yet the majority construes the term narrowly, holding that it does not encompass the expenses paid for by the City here. The majority’s reasons are unpersuasive.
The majority repeatedly characterizes as “preconstruction” costs the expenses the City paid for architectural design and supervision, project management, insurance, surveying, and legal services. (Maj. opn., ante, at pp. 946, 947, 950, 951, 954.) To label these expenses as “preconstruction” is *958misleading. The term implies that all these expenses were incurred before the building of the facility began. But, as explained below, that view finds no support in the record.
True, the surveying expenses were most likely incurred at the outset of the project, as is customarily the case. But that is not true of the project’s management and architectural costs. The SPCA-LA’s contract with project manager Pacific Development Services said the latter’s duties included “Construction Management of all phases of construction of the Project.” (Italics added.) And the SPCA-LA’s contract with the architectural firm of Warren Freedenfeld & Associates provided that the firm would “be a representative of and shall advise and consult with' the owner during construction,” would “visit the site at intervals appropriate to the stage of construction,” would “keep the Owner informed of the progress and quality of the Work,” and would attempt to “guard the Owner against defects and deficiencies in the Work” as it progressed. (Italics added.) Indeed, the City’s September 2000 letter to the DIR (see p. 955, ante) when the building phase of the project was well under way, said that of the approximately $540,000 of the City’s contribution that was budgeted for project management, $100,000 had yet to be spent; and that of the $360,000 of the City’s contribution that was budgeted for architectural fees, $40,000 had yet to be spent. The City’s letter also mentioned that smaller portions of the legal and insurance costs had yet to be paid. Thus, the contracts with the project manager and the architect, as well as the City’s letter, demonstrate that the City did not pay merely for “preconstruction” costs but also for expenses incurred while the facility was being constructed.
The majority talks at length about an amendment to section 1720(a) that the Legislature enacted in 2000, stating that the term “construction,” as used in that section, includes “the design and preconstruction phases of construction.” After a thorough review of the legislative history pertaining to the 2000 amendment, the majority concludes that the Legislature did not intend the amendment to apply retroactively. Right. So what? Retroactivity of the 2000 amendment is not at issue here; therefore, the intent of the 2000 Legislature has no bearing here. What is at issue is the intent of the Legislature back in 1937, when it first used the word “construction” to define public works in former section 1720(a). It is the duty of this court, not the 20.00 Legislature, to determine the 1937 Legislature’s intent, and the views of the 2000 Legislature on the subject are not controlling. As this court said less than two months ago: “[T]he ‘Legislature has no authority to interpret a statute. That is a judicial task. The Legislature may define the meaning of statutory language by a present legislative enactment which, subject to constitutional restraints, it may deem retroactive. But it has no legislative
*959authority simply to say what it did mean.’ ” (McClung v. Employment Development Department (2004) 34 Cal.4th 467, 473 [20 Cal.Rptr.3d 428, 99 P.3d 1015].)

TV

I would uphold the Court of Appeal’s decision that the project here was a public work and thus subject to the prevailing wage law. The majority concludes to the contrary and sees no need to resolve the remaining two issues on which this court granted review: (1) whether the project is a “municipal affair” exempt from the prevailing wage law, and (2) whether the prevailing wage law is a matter of statewide concern that overrides the municipal affair exemption. These are difficult and important questions. I would retain the case to decide them.

 All further statutory citations are to the Labor Code.