Board of Trade, Inc. v. State

968 P.2d 86
CourtAlaska Supreme Court
DecidedNovember 27, 1998
DocketS-7952
StatusPublished
Cited by24 cases

This text of 968 P.2d 86 (Board of Trade, Inc. v. State) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Board of Trade, Inc. v. State, 968 P.2d 86 (Ala. 1998).

Opinion

968 P.2d 86 (1998)

BOARD OF TRADE, INC., Appellant,
v.
STATE of Alaska, DEPARTMENT OF LABOR, WAGE AND HOUR ADMINISTRATION, Appellee.

No. S-7952.

Supreme Court of Alaska.

November 27, 1998.

*88 Kevin T. Fitzgerald, Bogle & Gates, P.L.L.C., Anchorage, for Appellant.

Toby N. Steinberger, Assistant Attorney General, Anchorage, and Bruce M. Botelho, Attorney General, Juneau, for Appellee.

Before MATTHEWS, C.J., and EASTAUGH, FABE and BRYNER, JJ.

OPINION

FABE, Justice.

I. INTRODUCTION

In this appeal we must decide whether an employer must pay prevailing wages under the Little Davis-Bacon Act[1] to workers employed at a quarry thirteen miles from the site of an airport construction project. The employer challenges the validity of the Department of Labor's regulation that broadly defines the term "on-site" to encompass activities occurring away from the construction site but dedicated exclusively to the construction contract. Although we uphold the validity of the regulation itself, we conclude that the Department erred in interpreting the regulation and remand for further proceedings.

II. FACTS AND PROCEEDINGS

A. Facts

In June 1991 the Alaska Department of Transportation and Public Facilities (DOTPF) issued an invitation for bids for a runway rehabilitation project at the Nome airport. The bid specifications suggested that rock suitable for crushed aggregates for asphalt concrete would be available at Cape Nome Quarry, located thirteen miles from the Nome airport. The specifications further remarked that the State was "unaware of any other material sources in closer proximity meeting project requirements."

In July 1991 DOTPF notified Knik Construction, Inc. (Knik) that it was the lowest bidder on the prime contract for the runway renovation project. At the same time, Board of Trade, Inc. (BOT), a Nome gravel supplier, entered into a contract with the owners of the Cape Nome Quarry for the removal of material from the quarry to supply the job. In August 1991 DOTPF formally awarded Knik the runway renovation contract. Knik and BOT then entered into a formal contract for the supply of aggregate materials from the quarry to the Nome airport project.

B. The Prevailing Wage Issue and the Prior Proceedings

In August 1992 the Department of Labor (Department) informed BOT that under the regulations interpreting the Little Davis-Bacon Act (LDBA),[2] the Cape Nome Quarry was considered "onsite" and employees at the quarry were entitled to compensation at the prevailing wage rate. The Department also instructed DOTPF to withhold $100,000 from Knik for BOT's failure to pay prevailing wages to its quarry employees.[3]

In February 1994 the Department filed a prevailing wage complaint against BOT. The Department concluded that because BOT's activities at the quarry were dedicated virtually exclusively to the performance of the Nome airport contract, they were considered "on-site" under 8 Alaska Administrative Code (AAC) 30.910(a) and the work of BOT's *89 employees was thus compensable at the prevailing wage rate. After an informal hearing, the Department calculated the additional wages owed by BOT to be $118,110.59.

BOT requested a formal hearing and challenged the validity of the regulation defining on-site activity. The hearing officer, Robert Landau, granted the Department's motion for summary judgment, ruling that he did not have authority to address the validity of the Department's regulation. He concluded that BOT was liable for the prevailing wage rate because the quarry work was exclusively dedicated to the airport project and was "on-site" under the Department's regulations. The Director of the Division of Labor Standards and Safety adopted the hearing officer's findings and ordered BOT to pay $118,110.59.

BOT appealed to the superior court. In December 1996 Superior Court Judge Milton M. Souter affirmed the Department's decision in its entirety. BOT appeals.

III. DISCUSSION

A. Standard of Review

We will not defer to the decision of a superior court acting as an intermediate court of appeal.[4] Instead, we "independently review the merits of an administrative determination."[5] Whether the grant of summary judgment was appropriate is a question of law that we review de novo.[6] We "must determine whether there was a genuine issue of material fact and whether the moving party was entitled to judgment on the law applicable to the established facts."[7] The moving party "has the entire burden of proving that his opponent's case has no merit."[8]

We also exercise our independent judgment in determining the validity of an administrative regulation and in interpreting the underlying statute.[9] But we will not substitute our judgment for that of the agency with regards to the efficacy or wisdom of the regulation.[10] We limit our review of an administrative regulation to: "(1) whether the regulation is reasonable and not arbitrary"; and "(2) whether the regulation is consistent with the statute and reasonably necessary to its purposes."[11] We have explained, however, that "reasonable necessity is not a requirement separate from consistency" and the scope of review should center around consistency with the authorizing statute.[12] We review an administrative regulation with a presumption of validity.[13] The party challenging the regulation has the burden of demonstrating invalidity.[14] An agency's interpretation of its own regulations is reviewed under the reasonable basis standard and "is normally given effect unless plainly erroneous or inconsistent with the regulation."[15]

B. The Department's Regulation Is Consistent with and Reasonably Necessary to Carry Out the Purpose of the LDBA.

1. The Little Davis-Bacon Act

The LDBA was first enacted in 1931 and was modeled after the federal Davis-Bacon *90 Act of the same year.[16] We have previously recognized that "`[t]he fundamental purpose of [Alaska's] Little Davis-Bacon [Act] is to assure that employees engaged in public construction receive at least the prevailing wage,' the same purpose as under the federal legislation."[17] Noting the remedial nature of the LDBA, we have also held that "[the LDBA] is therefore liberally construed to effectuate its beneficent purpose."[18]

The LDBA provides that where a public construction contract involves the employment of mechanics, laborers, or field surveyors, they are to be paid the prevailing wage.[19] Alaska Statute 36.95.010(3) defines "public construction" as:

[T]he on-site field surveying, erection, rehabilitation, alteration, extension or repair, including painting or redecorating of buildings, highways, or other improvements to real property under contract for the state....

(Emphasis added.)

The Department promulgated 8 AAC 30.910, which broadly defines the term "on-site" to cover not only the "physical place where the construction ... will remain when work on it has been completed," but also "other adjacent or nearby property ... which can be reasonably said to be included in the site because of proximity."[20] The regulation contains an example of how the term is to be interpreted for a large airport project such as this one: "on-site" may include "[f]abrication plants, mobile factories, batch plants,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

All Am. Oilfield, LLC v. Cook Inlet Energy, LLC
446 P.3d 767 (Alaska Supreme Court, 2019)
Alaska Airlines, Inc. v. Darrow
403 P.3d 1116 (Alaska Supreme Court, 2017)
City of Valdez v. State
372 P.3d 240 (Alaska Supreme Court, 2016)
Burke v. Houston Nana, L.L.C.
222 P.3d 851 (Alaska Supreme Court, 2010)
Jurgens v. City of North Pole
153 P.3d 321 (Alaska Supreme Court, 2007)
Simpson v. State, Commercial Fisheries Entry Commission
101 P.3d 605 (Alaska Supreme Court, 2004)
State, Department of Natural Resources v. Greenpeace, Inc.
96 P.3d 1056 (Alaska Supreme Court, 2004)
Alaska Center for the Environment v. State
80 P.3d 231 (Alaska Supreme Court, 2003)
Diaz v. Silver Bay Logging, Inc.
55 P.3d 732 (Alaska Supreme Court, 2002)
D.H. Blattner & Sons, Inc. v. N.M. Rothschild & Sons, Ltd.
55 P.3d 37 (Alaska Supreme Court, 2002)
Lakosh v. ALASKA DEPT. OF ENVIRON. CONSERV.
49 P.3d 1111 (Alaska Supreme Court, 2002)
Lakosh v. Alaska Department of Environmental Conservation
49 P.3d 1111 (Alaska Supreme Court, 2002)
Long v. Interstate Ready-Mix, L.L.C.
83 S.W.3d 571 (Missouri Court of Appeals, 2002)
Interior Alaska Airboat Ass'n v. State
18 P.3d 686 (Alaska Supreme Court, 2001)
Lauth v. State
12 P.3d 181 (Alaska Supreme Court, 2000)
Jerrel v. State, Department of Natural Resources
999 P.2d 138 (Alaska Supreme Court, 2000)
O'CALLAGHAN v. Rue
996 P.2d 88 (Alaska Supreme Court, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
968 P.2d 86, Counsel Stack Legal Research, https://law.counselstack.com/opinion/board-of-trade-inc-v-state-alaska-1998.