IN RE Port of Wilmington Gantry Crane Litigation

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