IN RE Port of Wilmington Gantry Crane Litigation

• Court: Supreme Court of Delaware
• Decided: November 12, 2020
• Docket: 293, 2020
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

IN RE PORT OF WILMINGTON § GANTRY CRANE LITIGATION § No. 293, 2020 § § Court Below: Superior Court § of the State of Delaware § § C.A. No. N17C-12-339 PRW § CCLD

Submitted: September 29, 2020 Decided: November 12, 2020

Before SEITZ, Chief Justice; VALIHURA and VAUGHN, Justices.

ORDER

After consideration of the notice and supplemental notice of appeal from an

interlocutory order and the documents attached thereto, it appears to the Court that:

(1) The appellant, Kocks Krane GmbH (“KKG”), has petitioned this Court,

pursuant to Supreme Court Rule 42, to accept an appeal from the Superior Court’s

opinion and order dated August 20, 2020 (the “August 20 Decision”), which denied

KKG’s motion for partial summary judgment and entered a partial judgment for the

Delaware Department of Labor (“DDOL”). The consolidated litigation in the

Superior Court is a complex commercial dispute arising from the purchase and

installation of gantry cranes and associated equipment at the Port of Wilmington, a

project for which KKG was the primary contractor. KKG’s request for interlocutory

review concerns the validity of a DDOL order directing the Diamond State Port Corporation (“DSPC”) to withhold payments from KKG for work completed on the

project, based upon DDOL’s allegations that certain of KKG’s subcontractors had

violated Delaware’s Prevailing Wage Law when paying their workers.1

(2) DSPC oversees the Port of Wilmington. DSPC and KKG are parties to

a contract for the installation of the gantry cranes and other equipment at issue in the

Superior Court litigation. KKG subcontracted with various third parties, including

Industrial Crane Services, Inc. (“ICS”), to assist with the fulfillment of the contract.

ICS further subcontracted with others, including Romar Offshore Welding Services,

LLC (“Romar”).

(3) In August 2017, DDOL ordered DSPC to withhold payments that

would otherwise be due to KKG, based upon DDOL’s determination that ICS and

Romar had failed to pay certain of their employees prevailing wages as required

under the Prevailing Wage Law. DDOL later revised the amounts of the purported

deficiencies and added penalties that DDOL claimed that either ICS or KKG owed.

Ultimately, on March 29, 2019, DDOL ordered DSPC to withhold $1,506,843.60

from KKG based upon DDOL’s various claims.

(4) KKG brought a declaratory judgment action against DSPC, DDOL, and

the Secretary and the Enforcement Supervisor of DDOL, in their official capacities.

In the action, KKG sought a declaratory judgment that (i) the Prevailing Wage Law

1 29 Del. C. § 6960. 2 does not authorize DDOL to direct DSPC to withhold payments owed to KKG

because the subcontractors, and not KKG, are the “employers” of the allegedly

underpaid workers under the statute; and (ii) the Secretary and the Enforcement

Supervisor of DDOL, acting in their official capacities, violated KKG’s due-process

rights. DDOL asserted a counterclaim against KKG, in which it alleged that KKG

is liable to ICS’s and Romar’s workers for the deficiencies in their wages, as well as

for certain civil penalties. The declaratory judgment action was consolidated with

other litigation relating to the project.

(5) KKG moved for summary judgment on its claim that the Prevailing

Wage Law does not authorize DDOL to direct DSPC to withhold payments owed to

KKG. In the August 20 Decision, the Superior Court denied KKG’s motion for

summary judgment on that claim and granted summary judgment to DDOL. The

court interpreted the Prevailing Wage Law and determined that the statute authorized

DDOL to direct the withholding of payments from KKG for wages owed to the

subcontractors’ workers. KKG also sought summary judgment on the counterclaim

“to the extent it seeks money for underpayment of wages to employees of third

parties.” The August 20 Decision denied that motion, instead awarding summary

judgment to DDOL on its counterclaim, “except to the extent that [the counterclaim]

3 seeks recovery for KKG’s alleged direct administrative violations of” the Prevailing

Wage Law.2

(6) KKG asked the Superior Court to certify an interlocutory appeal. It

argued that the August 20 Decision determined a substantial issue of material

importance3 because the issues are important to the parties and to primary contractors

in general. KKG argued that the August 20 Decision decided an issue of first

impression in Delaware4 relating to the construction and application of a Delaware

statute5—namely, the meaning of “the employer” as used in the Prevailing Wage

Law and the authority of DDOL under the statute to order withholding from a

primary contractor for the wage deficiencies of a subcontractor. KKG also argued

that interlocutory review would serve considerations of justice6 because the harm of

wrongful withholding will not be meaningfully remedied in a final order. KKG also

contended that a determination that the Superior Court incorrectly interpreted the

Prevailing Wage Law would effectively terminate the action,7 but it acknowledged

that (i) the portion of DDOL’s counterclaim relating to the administrative violations

would remain for resolution, and (ii) the dispute at issue in the request for

2 In re Port of Wilmington Gantry Crane Litig., 2020 WL 4932337, at *1 (Del. Super. Ct. Aug. 20, 2020). 3 DEL. SUPR. CT. R. 42(b)(i). 4 Id. R. 42(b)(iii)(A). 5 Id. R. 42(b)(iii)(C). 6 Id. R. 42(b)(iii)(H). 7 Id. R. 42(b)(iii)(G). 4 interlocutory appeal is part of a consolidated litigation that involves multiple other

parties and claims and which would not be terminated by an interlocutory appeal.

(7) The Superior Court denied the application for certification.8 It

determined that the August 20 Decision decided a substantial issue of material

importance because it related to the merits of a portion of the litigation and, as a

result of the order, KKG’s “immediate rights to payment of certain public works

contract funds had been diminished.”9 The court agreed with KKG that the “decision

involved an issue of first impression related to the construction and application of a

Delaware statute.”10 But the court determined that it had “merely applied the plain

meaning of certain language of the [Prevailing Wage Law] that has been in existence

for more than 25 years, and apparently has been heretofore without contest” and that

“because no other Delaware court has applied the [Prevailing Wage Law] in a

contrary manner, KKG’s claim presents no unsettled question requiring immediate

resolution by the Supreme Court.”11 The court also determined that interlocutory

review would not terminate the consolidated, multiparty litigation as a whole, or

even fully resolve the dispute between KKG and DDOL. Thus, the court concluded

that interlocutory review would merely delay and increase the cost of litigation and

8 In re Port of Wilmington Gantry Crane Litig., 2020 WL 5757344 (Del. Super. Ct. Sept. 28, 2020). 9 Id. at *2. 10 Id. at *3. 11 Id. 5 would not serve considerations of justice.12 The court therefore refused to certify

the interlocutory appeal.

(8) We agree that interlocutory review is not warranted in this case.

Applications for interlocutory review are addressed to the sound discretion of this

Court.13 In the exercise of its discretion and giving great weight to the trial court’s

view, this Court has concluded that the application for interlocutory review does not

meet the strict standards for certification under Supreme Court Rule 42(b).

Exceptional circumstances that would merit interlocutory review of the Superior

Court’s decision do not exist in this case,14 and the potential benefits of interlocutory

review do not outweigh the inefficiency, disruption, and probable costs caused by

an interlocutory appeal.15

NOW, THEREFORE, IT IS ORDERED that the interlocutory appeal is

REFUSED.

BY THE COURT:

/s/ Karen L. Valihura Justice

12 Id. at *3-4. 13 DEL. SUPR. CT. R. 42(d)(v). 14 Id. R. 42(b)(ii). 15 Id. R. 42(b)(iii). 6