DC v. DOL ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 10, 2015 Decided April 5, 2016
No. 14-5132
DISTRICT OF COLUMBIA AND CCDC OFFICE LLC,
APPELLEES
v.
DEPARTMENT OF LABOR, ET AL.,
APPELLANTS
METROPOLITAN REGIONAL COUNCIL OF CARPENTERS,
UNINCORPORATED LABOR ORGANIZATION, ET AL.,
APPELLEES
Consolidated with 14-5133
Appeals from the United States District Court
for the District of Columbia
(No. 1:13-cv-00730)
John S. Koppel, Attorney, U.S. Department of Justice,
argued the cause for appellants. With him on the briefs were
Benjamin C. Mizer, Acting Assistant Attorney General,
Vincent H. Cohen, Jr., Acting U.S. Attorney, and Michael Jay
Singer, Attorney. Jeffrica J. Lee, Attorney, U.S. Department
of Justice, entered an appearance.
2
Terry R. Yellig and Esmeralda Aguilar were on the brief
for intervenors-defendants-appellants Metropolitan Regional
Council of Carpenters, et al.
Carl J. Schifferle, Assistant Attorney General, Office of
the Attorney General for the District of Columbia, argued the
cause for appellee District of Columbia. With him on the
brief were Karl A. Racine, Attorney General, Todd S. Kim,
Solicitor General, and Loren L. AliKhan, Deputy Solicitor
General.
Maurice Baskin argued the cause and filed the brief for
appellee CCDC Office LLC.
Kevin J. McKeon was on the brief for amici curiae
Associated Builders and Contractors, Inc. and National
Association of Manufacturers in support of appellee CCDC
Office LLC. Shelly L. Ewald entered an appearance.
Before: GARLAND, ∗ Chief Judge, KAVANAUGH, Circuit
Judge, and WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge
KAVANAUGH.
KAVANAUGH, Circuit Judge: CityCenterDC is a large
private development in the heart of Washington, D.C. It
features upscale retail stores such as Hermès, Boss, and Louis
Vuitton; high-end restaurants such as DBGB and Centrolina;
the large private law firm of Covington & Burling; and luxury
residences.
∗
Chief Judge Garland was a member of the panel at the time
the case was argued but did not participate in this opinion.
3
The question in this case is whether the Davis-Bacon Act
applies to the construction of CityCenterDC. As relevant
here, the Davis-Bacon Act applies when the District of
Columbia enters into a “contract . . . for construction” of
“public works.” 1 The Act guarantees prevailing wages to
construction workers on those projects. If the Act applies
here, the construction workers who helped build
CityCenterDC might be entitled to higher wages than they in
fact received.
As the statutory definition reveals, two conditions must
be present in order for the Davis-Bacon Act to apply here: (1)
D.C. must have been a party to the contracts for construction
of CityCenterDC, and (2) CityCenterDC must be a public
work. To illustrate, suppose the District of Columbia
contracted with a construction contractor to build a new
public park. That would be a classic example of a
construction project covered by the Davis-Bacon Act.
But this case differs from the classic Davis-Bacon
scenario in two critical respects, each of which independently
suffices to take the CityCenterDC construction project outside
the reach of the Davis-Bacon Act.
1
The relevant statutory provision provides in full: “The
advertised specifications for every contract in excess of $2,000, to
which the Federal Government or the District of Columbia is a
party, for construction, alteration, or repair, including painting and
decorating, of public buildings and public works of the Government
or the District of Columbia that are located in a State or the District
of Columbia and which requires or involves the employment of
mechanics or laborers shall contain a provision stating the
minimum wages to be paid various classes of laborers and
mechanics.” 40 U.S.C. § 3142(a).
4
First, the District of Columbia was not a party to the
construction contracts for the building of CityCenterDC.
D.C. owns the land on which CityCenterDC stands, but D.C.
rented the land to private developers in a series of 99-year
leases. The private developers then entered into construction
contracts with general contractors to build CityCenterDC.
The developers – not D.C. – contracted with the construction
contractors who built CityCenterDC. That matters for
purposes of the Davis-Bacon Act. Put simply, because D.C.
was not a party to the construction contracts, the Davis-Bacon
Act does not apply to CityCenterDC.
Second, and an independent reason why the Davis-Bacon
Act does not apply here, CityCenterDC is not a “public
work.” To qualify as a public work, a project must possess at
least one of the following two characteristics: (i) public
funding for the project’s construction or (ii) government
ownership or operation of the completed facility, as with a
public highway or public park. Here, CityCenterDC’s
construction was not publicly funded, and CityCenterDC is
not a government-owned or government-operated facility. So
CityCenterDC is not a public work. 2
In short, D.C. was not a party to the contracts for
construction of CityCenterDC, and CityCenterDC is not a
public work. For either of those two alternative and
independent reasons, the Davis-Bacon Act does not apply to
the construction of CityCenterDC.
2
At least one of those two characteristics is necessary for a
project to qualify as a public work; we need not and do not decide
whether either characteristic alone is sufficient for a project to
qualify as a public work.
5
It bears emphasis, moreover, that in the 80 years since its
enactment, the Davis-Bacon Act has never been applied to a
construction project such as CityCenterDC that is privately
funded, privately owned, and privately operated. The novelty
of the U.S. Department of Labor’s interpretation strongly
buttresses our conclusion that the Act does not apply here.
See, e.g., FDA v. Brown & Williamson Tobacco Corp., 529
U.S. 120, 160 (2000); Loving v. IRS, 742 F.3d 1013, 1021
(D.C. Cir. 2014).
In a thorough and persuasive opinion, the District Court
held that the Davis-Bacon Act does not apply to
CityCenterDC. We affirm the judgment of the District Court.
I
To evaluate whether the Davis-Bacon Act applies to the
construction of CityCenterDC, we begin by examining the
history of the Act, the details of CityCenterDC, and the
procedural background of this case.
A
In 1931, Congress passed and President Hoover signed
the Davis-Bacon Act. By that point in the Great Depression,
economic activity, including construction, had already
declined significantly. To offset the dropoff in private
construction and to help put construction workers back to
work, the Federal Government launched a variety of
construction projects to build and repair public works. But
the government construction projects led to a collateral
problem. Some government agencies awarded construction
contracts to contractors who hired cheap itinerant labor and
made low-wage bids. The market impact, Congress believed,
6
was to depress wages for local construction workers below
what the local workers otherwise would receive.
To prevent government contracts from depressing wages
for local construction workers, the Davis-Bacon Act
guaranteed prevailing local wages to construction workers on
federal and D.C. construction projects for public buildings.
Offering a succinct summary of the Act’s purpose, one
Member of Congress remarked: “The purpose of this bill is to
require the contractors, including subcontractors, to pay not
less than the prevailing rate of wages for work of a similar
nature in the city, town, village, or other civil division of the
State in which the public buildings are located, or in the
District of Columbia.” 74 Cong. Rec. 6515 (1931) (statement
of Rep. Kopp) (internal quotation marks omitted).
As initially enacted, the Davis-Bacon Act covered only
federal and D.C. contracts for construction of “public
buildings.” Pub. L. No. 71-798, 46 Stat. 1494 (1931). In
1935, Congress passed and President Franklin Roosevelt
signed a new law that amended the Act to cover federal and
D.C. contracts for construction of “public works,” as well as
public buildings. Act of Aug. 30, 1935, Pub. L. No. 74-403,
49 Stat. 1011.
B
In July 2001, a District of Columbia task force
recommended a “mixed-use” urban neighborhood on the site
of the D.C. convention center. In September 2002, acting on
that recommendation, D.C. issued a Request for Proposals for
a Development Partner. D.C. ultimately chose various
developers, whom we will refer to collectively as “the
Developers.”
7
D.C. and the Developers entered into 99-year ground
lease agreements for the right to use the property. Under
those lease agreements, the Developers agreed to pay D.C. at
least $2 million each year.
D.C. and the Developers also entered into development
agreements. The development agreements obligated the
Developers to, among other things, build CityCenterDC. As
required by those development agreements, the Developers
would enter into contracts with general contractors for
construction of CityCenterDC. D.C. maintained the right to
approve the Developers’ general contractors for various
components of the project, and to approve the construction
contracts entered into between the Developers and the
contractors.
Under the lease agreements and the development
agreements, D.C. would not be a party to any construction
contracts for the building of CityCenterDC. Rather,
according to the lease agreements and the development
agreements, the required follow-on construction contracts
would be executed between the Developers and general
contractors.
Construction of CityCenterDC began in 2011. Today,
CityCenterDC is already home to several upscale shops and
restaurants, and to a major private law firm. When it is
finished, CityCenterDC will house approximately 60 retail
stores and nearly 700 residential units. A 370-room hotel
catering to luxury travelers is scheduled to open in the next
three years.
To summarize the basic contractual relationships
underlying CityCenterDC: (1) D.C. and the Developers
entered into various lease agreements and development
8
agreements; and (2) those lease agreements and development
agreements, in turn, directed the Developers (not D.C.) to
execute construction contracts with general contractors.
D.C. provided no public funding for construction of
CityCenterDC. D.C. does not occupy any space at
CityCenterDC. D.C. does not own or operate any of the
businesses located there. And D.C. does not offer any
government services there.
C
In April 2008, a labor union – the Mid-Atlantic Regional
Council of Carpenters – asked D.C. to determine whether the
Davis-Bacon Act applied to the construction of
CityCenterDC. In response to that request, Deputy D.C.
Mayor Neil Albert concluded that the Act did not apply
because “the District will not be party to any construction
contracts, the project to be built will not be owned by the
District and no District funds will be used to pay construction
costs.”
The following year, the Carpenters requested a ruling on
the issue from the U.S. Department of Labor. In August
2010, the Chief of the Branch of Government Contracts at the
U.S. Department of Labor ruled that the Davis-Bacon Act did
not apply to CityCenterDC because the project was not a
public work. The Branch Chief noted the primarily private
purpose of the project and the lack of government funding,
among other things.
The Carpenters administratively appealed the Branch
Chief’s ruling within the U.S. Department of Labor. In June
2011, the Administrator of the Wage and Hour Division of the
U.S. Department of Labor overturned the Branch Chief’s
9
decision. The Administrator determined that the various
development agreements qualified as contracts for
construction within the meaning of the Davis-Bacon Act.
And the Administrator concluded that CityCenterDC was a
public work. Describing the private component of the project
as “not insubstantial,” the Administrator nonetheless found
that CityCenterDC “sufficiently” served the public interest to
qualify as a public work.
D.C. then appealed that ruling to the Administrative
Review Board of the U.S. Department of Labor. The Board
affirmed, concluding that the various agreements between
D.C. and the Developers were contracts for construction
under the Davis-Bacon Act and, further, that CityCenterDC
was a public work within the meaning of the Act.
D.C. then filed suit in federal court, seeking declaratory
and injunctive relief against the U.S. Department of Labor.
On cross-motions for summary judgment, the District
Court ruled for D.C. The District Court concluded that the
“plain language of the statute, as well as its history and
purpose” make clear that the Davis-Bacon Act does not cover
private projects like CityCenterDC. District of Columbia v.
Department of Labor, 34 F. Supp. 3d 172, 182 (D.D.C. 2014).
In reaching its conclusion, the District Court noted the novelty
of the position advanced by the U.S. Department of Labor:
“All parties in this case agree that” the Davis-Bacon Act “has
never before been applied to a project that, like
CityCenterDC, is privately financed, privately owned, and
privately maintained.” Id.Our review of the District Court’s interpretation of the
Davis-Bacon Act is de novo.
10
II
For the Davis-Bacon Act to apply, a project must involve
(1) a “contract . . . to which the Federal Government or the
District of Columbia is a party, for construction” of (2)
“public works.” 40 U.S.C. § 3142(a). The CityCenterDC
project meets neither requirement. First, D.C. is not a party to
the contracts for construction of CityCenterDC. Second,
CityCenterDC is not a public work.
A
By its terms, the Davis-Bacon Act applies to construction
contracts between a federal or D.C. government agency and a
construction contractor. In this case, the U.S. Department of
Labor seeks to stretch the Act to cover a three-party
relationship in which a government agency rents property to a
private developer, and the private developer in turn enters into
a construction contract with a construction contractor. Or put
another way, the Department contends that the Act covers
contracts entered into by D.C. that are not themselves
construction contracts but rather are contracts with developers
where the developers will then separately enter into
construction contracts with construction contractors.
No court has previously sanctioned such a significant
expansion of the Davis-Bacon Act. We will not be the first.
The U.S. Department of Labor insists that the statutory
term “contract . . . for construction” is sufficiently indefinite
to render its reading a reasonable one deserving deference. It
is true that under Chevron, assuming it applies here, the
fundamental question is not whether we think the
Department’s interpretation is correct, but whether the
Department’s interpretation of the Act is at least reasonable in
11
light of any ambiguities in the statute. In making that
determination, however, Chevron itself tells us that we must
first employ the traditional tools of statutory construction to
interpret the statute and to resolve any ambiguities. Chevron
U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837, 843 n.9 (1984). Only if we are then still left with an
ambiguity do we proceed to step two. In step two, we defer to
the agency’s reading if that reading is at least reasonable.
“No matter how it is framed, the question a court faces
when confronted with an agency’s interpretation of a statute it
administers is always, simply, whether the agency has stayed
within the bounds of its statutory authority.” City of
Arlington v. FCC, 133 S. Ct. 1863, 1868 (2013). In this case,
we conclude that the U.S. Department of Labor has not done
so. Its interpretation of the phrase “contract . . . for
construction” contravenes the text, structure, and purpose of
the Act.
The text of the Act is straightforward. As relevant here,
the Act covers contracts “for construction” to which “the
District of Columbia is a party.” But the parties to the
contracts for construction in this case were the private
developers and general contractors. The Act cannot
reasonably be read to cover construction contracts, such as
these, to which D.C. is not a party. That reading would
require us to erase the phrase “to which the Federal
Government or the District of Columbia is a party” from the
statute. Courts are not at liberty to rewrite laws in that
fashion. See generally Milner v. Department of the Navy, 131
S. Ct. 1259, 1271 (2011); Exxon Mobil Corp. v. Allapattah
Services, Inc., 545 U.S. 546, 557 (2005).
Contrary to the U.S. Department of Labor’s suggestion,
moreover, neither the lease agreements nor the development
12
agreements between D.C. and the Developers are themselves
contracts for construction to which D.C. is a party. A contract
for construction means a contract in which one party will
perform construction in exchange for the other party’s
payment or other consideration. The lease agreements and the
development agreements were not contracts for construction
under any reasonable understanding of what a contract for
construction entails. Rather, those agreements refer to the
eventual construction that the Developers would pay for.
Those agreements define “Construction Contract” as “each
contract with a General Contractor for the construction of all
or any part” of CityCenterDC. D.C. itself never entered into
contracts for construction of CityCenterDC.
The Department’s interpretation of the statutory term
“contract . . . for construction” would significantly enlarge the
scope of the Davis-Bacon Act. The Department’s
interpretation would embrace any lease, land-sale, or
development contract between the Federal Government or
D.C. and another party, so long as the agreements required the
counterparty in turn to undertake more than an incidental
amount of construction. The terms of the Davis-Bacon Act
are not so malleable. A contract for construction is a contract
for construction. And a lease, land-sale, or development
agreement that contemplates one of the parties entering into a
future contract for construction with a third party construction
contractor is not itself a contract for construction. 3
3
The Department cites a few agency decisions indicating that
certain kinds of lease agreements may fall within the Davis-Bacon
Act’s definition of “contract . . . for construction.” See, e.g.,
Phoenix Field Office, Bureau of Land Management, 2001 WL
767573 (2001); Crown Point, Indiana Outpatient Clinic, 1987 WL
247049 (1987), aff’d sub nom. Building & Construction Trades
Department, AFL-CIO, v. Turnage, 705 F. Supp. 5 (D.D.C. 1988);
Military Housing Ft. Drum, New York, 1985 WL 167239 (1985).
13
The U.S. Department of Labor retorts that modern
mixed-use projects often employ three-party relationships
involving a government agency, a private developer, and a
construction contractor. No doubt that is true. And the U.S.
Department of Labor may ask Congress to update the statute
to cover this new situation. See U.S. CONST. art. II, § 3, cl. 2
(Recommendations Clause). When a new situation arises
outside the scope of an old statute, the proper approach under
our system of separation of powers is for Congress to amend
the statute, not for the Executive Branch and the courts to
rewrite the statute beyond what the statute’s terms can
reasonably bear. As judges, we are not authorized to rewrite
statutory text simply because we might think it should be
updated. The Davis-Bacon Act applies only when D.C. is a
party to the construction contracts. Here, D.C. was not a
party to the construction contracts.
Our reading of the text of the statute finds additional
support when we examine the statute’s structure and purpose.
The Davis-Bacon Act serves broadly as “a minimum wage
law designed for the benefit of construction workers.” United
States v. Binghamton Construction Co., 347 U.S. 171, 178
(1954). But the Act was not designed to directly regulate
private construction contracts between private developers and
private construction companies. It was designed to regulate
construction contracts where the Federal Government or D.C.
But in those cases, unlike here, the Government was the lessee not
the lessor, and the leases required construction for which the
Government would pay de facto through its rental payments. So
there, unlike here, the Government did in effect pay the costs of
construction, albeit indirectly, through the rental payments it made
as lessee. In any event, even if those scattered agency decisions
were squarely on point, they would not bind this Court. Because
those agency decisions are not on point, however, we need not
decide whether we agree with them.
14
was a party. To suddenly extend Davis-Bacon’s coverage to a
large swath of private construction projects would end-run the
statute’s careful line-drawing and thwart the structure and
targeted purpose of the statute.
It bears emphasis, moreover, that the U.S. Department of
Labor’s interpretation would generate significant anomalies.
First, if we were to rule that the Davis-Bacon Act applied
to CityCenterDC, D.C. would suddenly owe approximately
$20 million in backpay. See 29 C.F.R. § 1.6(f) (requiring
D.C. to pay any increase in wages mandated by the Davis-
Bacon Act). To put it in perspective, that sum equals the
combined annual salaries of more than 200 D.C. teachers or
police officers. But it would be odd to require D.C. – rather
than the Developers – to pay that amount now. After all, D.C.
did not pay (and therefore did not allegedly underpay) the
salaries to begin with. D.C. did not build CityCenterDC or
pay for the construction of it.
Second, if we were to rule that the Davis-Bacon Act
applied to the construction of CityCenterDC, the Act would
also apply to any significant future improvements within
CityCenterDC. After all, D.C.’s agreements with the
Developers require the Developers not only to construct the
buildings but also to undertake any repairs or alterations to
ensure that the buildings meet first-class standards. Imagine
an overhaul of the gym at one of the luxury rental apartments
in CityCenterDC. Or a new conference room built at the
Covington & Burling law firm in CityCenterDC. Under the
Department’s theory, those construction projects would be
covered by the Davis-Bacon Act. But that is quite absurd, of
course. No doubt recognizing as much, even the U.S.
Department of Labor has disclaimed the notion that those
kinds of improvements would be encompassed by the Act.
15
But what the Department has not done – and cannot do – is
identify a logical principle that applies the Davis-Bacon Act
to the construction of CityCenterDC but not to the
construction of those hypothetical improvements to
CityCenterDC.
In short, after examining the text, structure, and purpose
of the Davis-Bacon Act, as well as the consequences of
applying the Act to the construction of CityCenterDC, we
conclude that the Act does not apply because D.C. was not a
party to the contracts for construction of CityCenterDC. 4
B
Even if D.C. were a party to the contracts for
construction of CityCenterDC, the Davis-Bacon Act still
would not apply because CityCenterDC is not a public work.
The Davis-Bacon Act applies to “public buildings” and
“public works.” Those terms have some overlap. Even
though CityCenterDC is a building (actually, a group of
buildings), the U.S. Department of Labor does not contend
that CityCenterDC is a public building. That is not surprising.
CityCenterDC is a private building. But the Department
nonetheless claims that this private building is a “public
work.” We disagree. As the District Court observed,
CityCenterDC is quite obviously “an enclave of private
4
What about a sham arrangement that a federal agency or D.C.
enters into with an intermediary just to avoid contracting directly
with a construction contractor, all for the purpose of avoiding the
Davis-Bacon Act? The U.S. Department of Labor does not claim
that D.C. engaged in such a sham here. We therefore need not
consider whether such a sham exception exists, and if so, what its
contours might be.
16
facilities,” not a public work. District of Columbia v.
Department of Labor, 34 F. Supp. 3d 172, 175 (D.D.C. 2014).
In 1935, when Congress amended the Davis-Bacon Act
to cover “public works” as well as “public buildings,” the
phrase “public works” carried a meaning similar to its current
meaning. Think, for example, of public roads, dams, parks,
railroads, canals, and docks. The 1933 edition of Black’s Law
Dictionary defined “public works” as follows: “Works,
whether of construction or adaptation, undertaken and carried
out by the national, state, or municipal authorities, and
designed to subserve some purpose of public necessity, use,
or convenience; such as public buildings, roads, aqueducts,
parks, etc.” (3d ed. 1933). The Black’s definition cited a
series of cases involving public works that ranged from a
government-owned dam to a public road financed with
municipal bonds.
Dictionaries from that era supplied similar definitions.
One defined public works to encompass “[a]ll fixed works
constructed or built for public use or enjoyment, as railroads,
docks, canals, etc., or constructed with public funds and
owned by the public; often, specif., such works as constitute
public improvements, as parks, museums, etc., as
distinguished from those involved in the ordinary
administration of the affairs of a community, as grading of
roads, lighting of streets, etc.” Webster’s New International
Dictionary (2d ed. 1934). The New Standard Dictionary of
the English Language defined public works as “permanent
works or improvements made for public use or benefit, as
roads, canals, or harbors, especially such as are made by or at
the expense of the local or central government.” (1937). And
The American College Dictionary defined the term as
“constructions as roads, dams, post offices, etc. out of
government funds for public use.” (1947).
17
The meaning has not changed over time. The current
edition of Black’s Law Dictionary defines “public works” as
“[s]tructures (such as roads or dams) built by the government
for public use and paid for by public funds.” (10th ed. 2014
online). The American Heritage Dictionary defines the term
as “[c]onstruction projects, such as highways or dams,
financed by public funds and constructed by a government for
the benefit or use of the general public.” (5th ed. 2015
online).
In the 1933 National Industrial Recovery Act, enacted
two years before Congress added “public works” to the
Davis-Bacon Act, Congress defined “public works” as “any
projects of the character heretofore constructed or carried on
either directly by public authority or with public aid to serve
the interests of the general public.” Pub. L. No. 73-67, § 202,
48 Stat. 195, 201 (1933). The Supreme Court later adopted
that definition when interpreting the statutorily undefined
phrase “public work” in the 1935 Miller Act, a statute that
required contractors on certain public works projects to post
bonds securing their payment obligations. See United States
v. Irwin, 316 U.S. 23, 28 (1942).
Exercising its authority to enforce the Davis-Bacon Act,
the U.S. Department of Labor has long maintained a
regulation that defines “public work” in largely the same way
that the National Industrial Recovery Act and the Irwin Court
did: “The term public building or public work includes
building or work, the construction, prosecution, completion,
or repair of which, as defined above, is carried on directly by
authority of or with funds of a Federal agency to serve the
interest of the general public regardless of whether title
thereof is in a Federal agency.” 29 C.F.R. § 5.2(k).
18
Although all of these various definitions do not align
perfectly, it is clear enough that a project must possess at least
one (if not both) of the following two characteristics 5 in order
to qualify as a public work under the Davis-Bacon Act: (i)
public funding for the construction or (ii) government
ownership or operation of the completed facility. 6
5
At least one of the two characteristics is necessary for a
project to qualify as a public work; we need not and do not decide
whether either characteristic alone is sufficient for a project to
qualify as a public work.
6
For a project to qualify as a public work, the U.S.
Department of Labor regulation requires the first of these two
characteristics – public funding for the construction – but does not
appear to require the second – government ownership or operation
of the completed facility. In this case, the U.S. Department of
Labor argues to this Court that its regulation actually requires
neither of those characteristics. In particular, the Department says
that the phrase “construction . . . carried on directly by authority of
or with funds of a Federal agency” includes situations where D.C.
neither builds the project nor expends funds for construction, but
merely leases land to a developer who then pays for the
construction by contracting with a general contractor. We disagree.
The Department has not cited any cases where it has previously
interpreted this regulatory language to stretch to situations in which
there is no public funding for the construction. So, too, the
Department has cited no cases in which the similar language in the
National Industrial Recovery Act or the Miller Act has been applied
to a project with no public funding for the construction. In light of
the history, context, and terms of the regulation, the Department’s
reading of its regulation is not reasonable. It would vastly expand
the coverage of the regulation – and indeed would stretch the
regulation beyond what the statute can reasonably bear. Put simply,
the interpretation that the Department offers to this Court is
inconsistent with the regulation, see Auer v. Robbins, 519 U.S. 452(1997), and if adopted would make the regulation inconsistent with
the statute, see Chevron, 467 U.S. 837 (1984).
19
Therefore, to determine whether CityCenterDC is a
public work, we must assess whether CityCenterDC possesses
at least one of the following two characteristics: (i) public
funding for the construction of CityCenterDC or (ii)
government ownership or operation of CityCenterDC.
CityCenterDC possesses neither characteristic.
First, D.C. did not expend funds for the construction of
CityCenterDC. Quite the opposite. The Developers make
substantial rental payments to D.C. Those rental payments to
D.C. pad D.C.’s coffers, not drain them. By contrast to this
arrangement, every case cited by the Department concerning
the scope of the Davis-Bacon Act involved the expenditure of
public funds for construction. See, e.g., Binghamton
Construction Co., 347 U.S. at 173; Tom Mistick & Sons, Inc.
v. Reich, 54 F.3d 900, 902 (D.C. Cir. 1995); see also Irwin,
316 U.S. at 27 (interpreting “public work” in the Miller Act to
cover publicly funded university library). The Department
cites no cases – zero – where no public funds were expended
for construction and the project was nonetheless declared a
public work for purposes of the Davis-Bacon Act. This will
not be the first.
Second, D.C. does not own or operate CityCenterDC.
CityCenterDC is privately owned and privately operated. To
use the District Court’s apt description, CityCenterDC is “an
In this case, moreover, it is doubtful that this regulation even
applies to D.C.’s contracts for construction in the first place, as the
District Court noted. District of Columbia v. Department of Labor,
34 F. Supp. 3d at 191. The terms of the regulation apply only to
federal agency contracts for construction, not to D.C. contracts for
construction. But we need not rest on that point here, because, in
any event, CityCenterDC is not a public work under the statute or
regulation.
20
enclave of private facilities.” District of Columbia v.
Department of Labor, 34 F. Supp. 3d at 175.
In short, CityCenterDC possesses neither characteristic of
a public work.
In arguing that CityCenterDC nonetheless should be
considered a public work, the U.S. Department of Labor
emphasizes that D.C. helped plan CityCenterDC and that the
project will produce benefits for the public. But that is true of
many private projects. Through its zoning, taxing, and
regulatory powers, D.C. and other local governments are
often intimately involved in attracting, planning, approving,
and regulating private development, often down to the nitty-
gritty details. And private development often benefits the
public by creating jobs, generating tax revenues, and
providing places for work, housing, recreation, and
entertainment. That’s why local governments, including
D.C., get deeply involved in zoning and urban planning in the
first place. But those realities do not transform the Davis-
Bacon Act into an all-encompassing prevailing wage law for
private development projects in D.C.
Make no mistake: Under the Department’s reading,
many future D.C. construction projects that are privately
funded, privately owned, and privately operated would be
covered by the Davis-Bacon Act, at least so long as the
Federal Government or D.C. has some hand in leasing the
property or even just in planning or approving the use of the
property. We are unwilling to green-light such a massive,
atextual, and ahistorical expansion of the Davis-Bacon Act.
The concept of a public work may well be elastic. But it
cannot reasonably be stretched to cover a Louis Vuitton.
CityCenterDC is not a public work.
21
***
The U.S. Department of Labor has advanced a novel
reading of the Davis-Bacon Act that would significantly
enlarge the number and kinds of construction projects covered
by the Act. Expanding the coverage of the Davis-Bacon Act
in this way may or may not be a wise policy decision. But
that choice belongs to the political branches, which may enact
new legislation if they so choose. Our job is to construe the
statute as written and long understood. The Department’s
interpretation of the Davis-Bacon Act contravenes the statute.
To use the administrative law vernacular, the Department’s
interpretation fails Chevron step one because it is foreclosed
by the statute. In any event, the Department’s interpretation
would likewise fail Chevron step two because it is
unreasonable in light of the statute’s text, structure, and
purpose. We affirm the judgment of the District Court.
So ordered.