878 N.W.2d 1
Minn.2016Background
- MnDOT awarded highway contracts to prime contractors SMC and Hardrives, who required a specific grade of asphalt cement from MnDOT‑certified refineries.
- Subcontractors Donovan and Wayne purchased and hauled asphalt cement from commercial refineries to the contractors’ permanent asphalt‑mixing facilities; none delivered directly to the project work sites.
- MnDOT’s Labor Compliance Unit concluded these hauling drivers performed “work under a contract” under Minn. R. 5200.1106 and demanded prevailing wage payroll records; MnDOT assessed potential penalties for noncompliance.
- Appellants sued MnDOT seeking declaratory and injunctive relief; district courts granted summary judgment to MnDOT and the court of appeals affirmed.
- The Minnesota Supreme Court granted review to decide whether hauling that is not to, from, or on the public‑works project site qualifies as “work under a contract” under the Prevailing Wage Act and applicable administrative rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether truck drivers hauling asphalt from refineries to contractor plants are performing “work under a contract” subject to prevailing‑wage law | Donovan/Wayne: Off‑site deliveries to contractor facilities are not "to, from, or on" the project site and thus not covered; longstanding practice supported noncoverage | MnDOT: "Work under the contract" covers all construction‑related hauling associated with the project, including deliveries to contractors’ facilities; Rule examples include trucking | Hauling must be to, from, or on the project work site to constitute "work under a contract"; off‑site deliveries to contractor plants are not covered |
| Proper construction of Minn. R. 5200.1106 — ambiguous or plain? | Plaintiffs: Rule limits hauling coverage to on‑site or to/from site activities; subparts should be read consistently | MnDOT: Rule broadly covers all construction‑associated hauling and specifically lists trucking activities | Court: Rule is ambiguous as to off‑site deliveries; use rulemaking history and canons to resolve ambiguity in favor of narrower construction |
| Weight of agency interpretation and enforcement history | Plaintiffs: DLI/MnDOT historically treated only site‑related hauling as covered; reliance supports narrower reading | MnDOT: Current interpretation is reasonable and covers these hauls | Court: Deference not warranted for a recent, inconsistent enforcement position; longstanding rulemaking history supports limiting coverage to hauls to/from/on site |
| Need to address commercial‑establishment exception | Plaintiffs: Alternatively, hauling falls within the commercial‑establishment exception | MnDOT: Disagreed; relied on rule language | Court: Did not decide the exception because it resolved that hauling here is not "work under a contract" |
Key Cases Cited
- Krummenacher v. City of Minnetonka, 783 N.W.2d 721 (Minn. 2010) (statutory interpretation reviewed de novo)
- Troyer v. Vertlu Mgmt. Co./Kok & Lundberg Funeral Homes, 806 N.W.2d 17 (Minn. 2011) (construe administrative rules as a whole; avoid rendering words superfluous)
- Annandale v. Cities of Annandale & Maple Lake NPDES/SDS Permit Issuance, 731 N.W.2d 502 (Minn. 2007) (use rulemaking record to determine agency intent)
- Citizens Advocating Responsible Dev. v. Kandiyohi County Bd. of Comm’rs, 713 N.W.2d 817 (Minn. 2006) (relying on rulemaking record and SONARs to interpret ambiguous rules)
- McBoyle v. United States, 288 U.S. 25 (1933) (narrow construction where statutory enumeration suggests limits)
- Federal Trade Comm’n v. Bunte Bros., Inc., 312 U.S. 349 (1941) (agency’s long failure to assert a power is evidence about its scope)
- Bankamerica Corp. v. United States, 462 U.S. 122 (1983) (consistent nonenforcement over time undermines late expansive claims)
- Brekke v. THM Biomedical, Inc., 683 N.W.2d 771 (Minn. 2004) (penal provisions construed narrowly)