Faribault County v. Minnesota Department of Transportation

472 N.W.2d 166, 30 Wage & Hour Cas. (BNA) 1081, 1991 Minn. App. LEXIS 633, 1991 WL 103051
CourtCourt of Appeals of Minnesota
DecidedJune 18, 1991
DocketC9-90-2508
StatusPublished
Cited by3 cases

This text of 472 N.W.2d 166 (Faribault County v. Minnesota Department of Transportation) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Faribault County v. Minnesota Department of Transportation, 472 N.W.2d 166, 30 Wage & Hour Cas. (BNA) 1081, 1991 Minn. App. LEXIS 633, 1991 WL 103051 (Mich. Ct. App. 1991).

Opinion

OPINION

PETERSON, Judge.

The trial court issued a preliminary injunction enjoining the state from requiring local governments to comply with Minnesota’s prevailing wage law on projects financed in whole or part by state-aid funds until such a requirement is adopted as a rule by the Department of Transportation through a rulemaking hearing. We reverse.

FACTS

The Minnesota Constitution provides for the construction, improvement, and maintenance of a county state-aid highway system and a municipal state-aid street system. Minn. Const, art. XIV, §§ 3, 4. To pay some of the costs associated with these two systems, the constitution created a county state-aid highway fund and a municipal state-aid street fund. Minn. Const, art. XIV, §§ 7, 8.

The money in these two funds is generated by highway user taxes that the legislature is authorized to levy under Minn. Const, art. XIV, §§ 9, 10. Money from the two funds is paid directly to governmental subdivisions to finance projects contracted for by the governmental subdivisions. Minn.Stat. §§ 162.06-.09, 162.12-15.

Minn.Stat. §§ 177.41-44 (1990), commonly known as the prevailing wage law, was originally enacted by the Minnesota Legis *168 lature in 1973. The statute requires that workers employed to build, remodel, or repair a public building or other public work financed in whole or part by state funds be paid a prevailing wage rate.

From 1973 to 1987, the state did not enforce the prevailing wage law on highway and street projects contracted for by counties and cities and paid for in whole or part with county state-aid highway funds or municipal state-aid street funds. By memorandum on January 14, 1988, and again on July 15, 1988, Attorney General Hubert H. Humphrey, III advised state and local officials that Minn.Stat. §§ 177.41-44 required all contracts for public works projects funded in whole or part by state funds to include provisions for the enforcement of the prevailing wage law. This requirement applied whether the project was contracted for by the state or a political subdivision.

The Commissioner of Transportation is empowered to make and promulgate rules regarding the county state-aid highway system and the municipal state-aid street system. Minn.Stat. §§ 162.02, subd. 1, 162.09, subd. 1 (1990). On April 30, 1990, the Commissioner issued a written notice to all Minnesota counties and municipalities advising recipients of state-aid funds that, effective on all bids opened on or after May 21, 1990, “no state-aid funds will be provided to any project that does not include a contract provision for the payment of prevailing wages.”

Faribault County, a recipient of county state-aid highway funds, and other governmental subdivisions that receive state-aid highway or street funds, commenced an action to declare unenforceable the notice issued by the Commissioner of Transportation on April 30, 1990. Respondents argued that the notice constituted a rule, which must be adopted pursuant to procedures set forth in the Minnesota Administrative Procedure Act, Minn.Stat. §§ 14.-001-.69 (1990). Respondents also sought a temporary restraining order to prevent enforcement of the Commissioner’s notice. A temporary restraining order that enjoined enforcement of the notice was granted until further hearing of the court or until a contested rulemaking hearing was conducted and a decision rendered. After a further hearing, a motion for a temporary injunction was granted enjoining enforcement of the notice until a trial on the merits or until a contested rulemaking hearing could be held and a decision rendered. This appeal is from the trial court order granting the motion for a preliminary injunction.

ISSUE

Did the trial court err in granting a preliminary injunction enjoining the state from enforcing the prevailing wage law on local projects funded in whole or part by county state-aid highway funds or municipal state-aid street funds?

ANALYSIS

The disputed section of the prevailing wage statute reads:

It is in the public interest that public buildings and other public works be constructed and maintained by the best means and highest quality of labor reasonably available * * *. It is therefore the policy of this state that wages of laborers, workers, and mechanics on projects financed in whole or part by state funds should be comparable to wages paid for similar work in the community as a whole.

Minn.Stat. § 177.41 (emphasis added).

Respondents contend that the Commissioner’s notice requiring local government units to pay prevailing wages on all projects funded in whole or part by state-aid funds is an interpretive rule, which could only be promulgated through a contested rulemaking hearing. Because the prevailing wage law had not previously been enforced on state-aid highway and street projects, the trial court concluded that the terms “public works” and “projects” were ambiguous, and that the Commissioner’s notice was a new interpretation of the statute. Therefore, the trial court granted injunctive relief based on its finding that the respondents’ would likely prevail at trial.

*169 Minn.Stat. § 14.02, subd. 4 (1990) defines a rule as:

[Ejvery agency statement of general applicability and future effect, including amendments, suspensions, and repeals of rules, adopted to implement or make specific the law enforced or administered by that agency or to govern its organization or procedure.

Neither party questions whether the notice is a statement by the Commissioner of general applicability and future effect. The dispute is whether the notice is merely a statement of clear statutory law, or an attempt “to make specific the law enforced.”

If the notice is simply an announcement of a clear statutory requirement that the prevailing wage law be applied to state-aid funded projects contracted for by counties and cities, it is not a rule. See Wacha v. Kandiyohi Cty. Welfare Bd., 308 Minn. 418, 420-21, 242 N.W.2d 837, 839 (1976). If the notice is an interpretation of words within the statute that may be susceptible to more than one meaning, the interpretation is a rule and may only be promulgated through the administrative rulemaking process. See Sa-Ag, Inc. v. Minnesota Dept. of Transp., 447 N.W.2d 1, 4 (Minn.App. 1989).

Minn.Stat. § 177.41 was enacted in 1973. The section originally read:

It is in the public interest that public buildings and other public works be constructed and maintained by the best means and highest quality of labor reasonably available, and that persons working on public works be compensated according to the real value of the services they perform. It is therefore declared to be the public policy of this state that wages of laborers, workmen and mechanics engaged in state projects should be comparable to wages paid for similar work in the community as a whole.

Minn.Stat.

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472 N.W.2d 166, 30 Wage & Hour Cas. (BNA) 1081, 1991 Minn. App. LEXIS 633, 1991 WL 103051, Counsel Stack Legal Research, https://law.counselstack.com/opinion/faribault-county-v-minnesota-department-of-transportation-minnctapp-1991.