International Brotherhood Elec v. Farfield Co
5 F.4th 315
| 3rd Cir. | 2021Background
- Farfield, an open-shop contractor, performed a federally funded SEPTA rail project (2002–2007) under a contract incorporating Davis‑Bacon prevailing‑wage determinations and requiring weekly certified payrolls with sworn statements of compliance.
- Prevailing wages were based on local CBAs that differentiated classifications (groundman, lineman, laborer); Farfield logged many groundmen/laborer hours under phase codes tied to lineman tasks (conduit installation, wire pulling).
- DOL audited Farfield in 2004, found only a limited holiday‑pay error; Farfield’s final invoice was paid in 2007.
- IBEW Local 98 filed a qui tam FCA suit in 2009 alleging Farfield submitted false certified payrolls to induce federal payments; DOJ declined intervention and DOL declined a District Court referral to resolve classifications.
- A Special Master found Farfield misclassified employees, recklessly certified false payrolls for 105 weeks, calculated wage underpayments ~$159,000 (trebled), imposed civil penalties, and recommended judgment of ~$1.055M; the District Court adopted the R&R and awarded substantial attorneys’ fees; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactivity of 31 U.S.C. § 3729(a)(1)(B) (FERA) | FERA applies to all FCA suits pending on or after June 7, 2008, so the post‑FERA liability standard governs Farfield’s pre‑2008 conduct. | "Claim" in FERA §4(f)(1) means the FCA definition (a request for payment), so the new standard applies only to claims presented on/after June 7, 2008, not to earlier conduct merely sued after that date. | The court held Congress intended “claims” to mean cases pending on or after June 7, 2008; §3729(a)(1)(B) applies retroactively to this suit and does not violate Ex Post Facto. |
| Worker classification (groundmen/laborers vs. linemen) | Local 98: local industry practice reserves conduit/wire work to linemen; Farfield’s logging and testimony show groundmen/laborers performed lineman work. | Farfield: CBAs permissively allow employer discretion; groundmen may "assist" linemen, and lineman was usually present, so no misclassification. | The court affirmed that local union practice controls classification; Special Master credibility findings were not clearly erroneous and support misclassification. |
| Materiality of false certified payrolls under the FCA | Local 98: Davis‑Bacon compliance and accurate certified payrolls were conditions of payment; falsified payrolls had a natural tendency to influence federal payment decisions. | Farfield: government had discretion to withhold; DOJ non‑intervention, DOL inaction, and the underpaid amount relative to total contract were evidence of immateriality. | The court held the certifications were material: compliance was an express/de facto condition of payment, no evidence government would knowingly pay despite violations, and violations were not minor. |
| Burden‑shifting on damages (Mt. Clemens framework) | Local 98: representative testimony and Farfield’s own records establish prima facie damages; burden should shift to Farfield to show precise non‑lineman time. | Farfield: Mt. Clemens is limited to FLSA; plaintiff must prove damages with specificity for all employees. | The court approved applying Mt. Clemens burden‑shifting in this FCA/Davis‑Bacon context and found the representative evidence adequate; burden shift and damages calculation were proper. |
Key Cases Cited
- Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (2008) (Supreme Court reading of pre‑FERA FCA narrowed presentment and intent requirements)
- Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (framework for retroactivity analysis)
- Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016) (holistic materiality standard for FCA claims)
- Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) (burden‑shifting for wage/hour damages when employer records are inadequate)
- Abhe & Svoboda, Inc. v. Chao, 508 F.3d 1052 (D.C. Cir. 2007) (local union practices govern Davis‑Bacon classifications derived from CBAs)
- Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995) (appellate courts must apply retroactive laws to pending nonfinal judgments where Congress so provides)
- Rivers v. Roadway Express, Inc., 511 U.S. 298 (1994) (legislative overruling and retroactivity analysis)
- U.S. ex rel. Garbe v. Kmart Corp., 824 F.3d 632 (7th Cir. 2016) (construing FERA §4(f) as applying to suits pending on June 7, 2008)