Lopez Castro v. Fidelity and Deposit Company of Maryland, 39 F. Supp. 3d 1

Background

Plaintiffs are laborers employed by S & J Acoustics, a second-tier subcontractor on a District of Columbia construction project subject to the Davis-Bacon Act (DBA).
Whiting-Turner was the prime contractor and obtained a payment bond under the D.C. Little Miller Act (DCLMA); Fidelity and Travelers are the bond co-sureties and defendants here.
Plaintiffs allege they were paid below DBA-mandated prevailing wages and filed an administrative complaint with the Department of Labor (DOL); DOL closed its initial inquiry because project payments had already been released.
The district court stayed the case to require further DOL exhaustion; DOL thereafter declined further action because no funds remained to withhold, and the court found exhaustion adequate to proceed.
Defendants moved to dismiss arguing (1) plaintiffs lack standing to sue on the payment bond because they were hired by a sub-subcontractor and (2) the suit is time-barred by the DCLMA’s one-year limitations period.
The court permitted amendment clarifying contractual relations and addressed whether the DBA (§ 3144(a)(2)) provides an independent cause of action and whether the Portal-to-Portal Act’s two-year limitations period applies.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether on-site laborers employed by a sub-subcontractor may sue on the prime contractor’s bond under DBA § 3144(a)(2)	§ 3144(a)(2) creates an independent cause of action for all laborers on the site regardless of contractual privity	§ 3144(a)(2) only confers "the same right" as bond statutes (DCLMA/Miller Act), which exclude remote workers/sub-subcontractor employees	Court held § 3144(a)(2) creates an independent cause of action covering on-site laborers irrespective of hiring tier
Whether DCLMA alone controls eligibility to sue the bond	DBA grants rights to laborers and § 3144(a)(2) is independent of DCLMA; DOL regs define "laborer" by function, not privity	DCLMA (modeled on Miller Act) restricts bond suits to prime/immediate subs and materialmen; plaintiffs are outside that class	Court concluded DCLMA is limited and DBA/regulations extend protection to ordinary on-site laborers beyond DCLMA’s privity limits
Whether DOL regulatory definitions and Chevron deference apply to interpret DBA terms	Secretary of Labor’s regulations reasonably define "laborer" and "contract" to include on-site workers of any subcontract tier	Resist expansive regulatory reading that would override bond statute limits	Court applied and accepted DOL regulations as reasonable and controlling under Chevron, supporting plaintiffs’ scope argument
Applicable statute of limitations for DBA bond actions: one-year DCLMA/Miller Act vs. two-year Portal-to-Portal Act (PPA)	PPA § 255 provides a two-year (or three-year for willful) limitations period for actions to enforce unpaid wages under DBA; thus plaintiffs’ suit is timely	The DCLMA’s one-year limitations period applies to bond suits; Supreme Court dicta about "incompatibility" of limitations periods suggests one-year governs	Court held PPA’s two-year statute governs DBA wage actions to enforce unpaid wages (after administrative exhaustion), so plaintiffs’ suit was timely

Key Cases Cited

Dep’t of Army v. Blue Fox, 525 U.S. 255 (1999) (government property cannot be subject to mechanics’ liens; explains Miller Act rationale)
F. D. Rich Co. v. U.S. ex rel. Indus. Lumber Co., 417 U.S. 116 (1974) (Miller Act provides alternative remedy for suppliers; limits on coverage)
J.W. Bateson Co. v. U.S. ex rel. Bd. of Trustees, 434 U.S. 586 (1978) (Miller Act does not extend beyond sub-subcontractors)
Clifford F. MacEvoy Co. v. U.S. ex rel. Calvin Tomkins Co., 322 U.S. 102 (1944) (Miller Act excludes ordinary laborers)
Univers. Research Ass’n v. Coutu, 450 U.S. 754 (1981) (discusses DBA, PPA interaction; dictum on limitations period tensions)
TRW Inc. v. Andrews, 534 U.S. 19 (2001) (statutory-construction principle against rendering provisions superfluous)