Lujan v. G & G Fire Sprinklers, Inc.

PETITIONER: Lujan
RESPONDENT: G & G Fire Sprinklers, Inc.
LOCATION: Attorney General's Office of MA

DOCKET NO.: 00-152
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 532 US 189 (2001)
ARGUED: Feb 26, 2001
DECIDED: Apr 17, 2001

ADVOCATES:
Jeffrey A. Lamken - Argued the cause for the United States, as amicus curiae, by special leave of court, supporting the petitioners
Stephen A. Seideman - Argued the cause for the respondent
Thomas S. Kerrigan - Argued the cause for the petitioners

Facts of the case

The California Labor Code requires that contractors and subcontractors on public works project pay their workers a prevailing wage that is determined by the state. The Code authorizes the state to withhold payments from contractors who fail to pay the prevailing wage. The contractor can, in turn, withhold payments to subcontractors who fail to pay the wage. To recover the wages or penalties withheld, the Code permits the contractor to sue for breach of contract. After the State Division of Labor Standards Enforcement (DLSE) determined that G & G Fire Sprinklers, Inc., a public works subcontractor, had violated the Code, it withheld from the contractors an amount equal to the wages and penalties forfeited due to G & G's violations. After its payment was withheld, G & G filed suit against DLSE, claiming that the lacking of a hearing deprived it of property without due process in violation of the Fourteenth Amendment. Granting G & G summary judgment, the District Court declared the relevant Code sections unconstitutional. Ultimately, the Court of Appeals affirmed. The court reasoned that G & G's rights were violated not because it was deprived of immediate payment, but because the state statutory scheme afforded no hearing at all.

Question

Must states provide contractors and subcontractors a hearing to challenge a decision to withhold wage payments from contractors and subcontractors who fail to pay prevailing wages to satisfy due process?

Media for Lujan v. G & G Fire Sprinklers, Inc.

Audio Transcription for Oral Argument - February 26, 2001 in Lujan v. G & G Fire Sprinklers, Inc.

Audio Transcription for Opinion Announcement - April 17, 2001 in Lujan v. G & G Fire Sprinklers, Inc.

William H. Rehnquist:

I have the opinion of the Court to announce in No. 00-152 Lujan versus G&G Fire Sprinklers, Inc.

The California Labor Code authorizes the State to withhold payments due to a contractor on a public works project if a subcontractor on that project fails to comply with certain prevailing wage requirements of the Code, and it permits the contractor in turn to withhold the similar sums from the sub.

Respondent G&G, a fire protection company, has served as a sub on several California public works projects, payments was withheld from it, pursuant to the statutory plan.

G&G sued the petitioners, various State officials and State agencies under Section 1983, claiming that the withholding of payments without a hearing deprived G&G of property, without due process in violation of the Fourteenth Amendment.

The District Court agreed, declared the relevant Code provisions unconstitutional.

The Court of Appeals for the Ninth Circuit affirmed.

In an opinion filed with the Clerk today, we reverse.

We assume without deciding that payments were withheld from respondent under color of state law, and the respondent has a property interest in its claim for payment under its contract, but we conclude that because California law affords G&G sufficient opportunity to pursue its claim in State Court, the Labor Code does not deprived of its claim with due process of law.

In cases involving deprivation of present entitlements, such as the right of ownership in property, the right to pursue a gainful occupation, we have held the due process requires a reasonably prompt hearing.

The G&G has no present entitlement, it has only a claim that it complied with the terms of its contracts and therefore it has entitled to be paid in full.

G&G’s interest in its claim can be fully protected by an ordinary breach of contract suit.

We believe that such a suit is available to it either under the California Labor Code or state common law.

We therefore hold that the relevant provisions of the Code do not deprive respondent of property without due process of law.

The opinion of the Court is unanimous.