Oxbow Carbon & Minerals, LLC v. Department of Industrial Relations
122 Cal. Rptr. 3d 879
Cal. Ct. App.2011Background
- Oxbow Carbon & Minerals, LLC appeals a writ of mandate denying its challenge to a DIR determination that work at Pier G, Pad 14, Long Beach, is a public work under Labor Code section 1720.
- Two contracts—Conveyors Contract (new conveyors) and Enclosure Contract (roof and enclosure)—were undertaken to make the coke receiving/storage facility rule 1158 compliant.
- Public funds reimbursement was made for conveyors; Enclosure work was privately funded but essential to the facility’s operation.
- DIR determined the combined work constituted a single integrated public works project subject to prevailing wage laws; Oxbow appealed, arguing the two contracts were separate.
- Trial court affirmed the Director, citing Lusardi’s prohibitions on contract-based circumvention of prevailing wage requirements.
- Court held that the complete integrated coke handling facility, created by interdependent enclosure and conveyor work, was construction paid for in part by public funds and thus a public work.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of construction paid by public funds | Oxbow argues enclosure work is separate from conveyor work and not paid by public funds. | Department/Director treated the project as a single integrated public works funded in part by public funds. | Both contracts constitute construction paid by public funds. |
| Complete integrated object standard | Construction should be viewed as separate components with distinct end products. | Construction is the complete integrated coke facility created by interdependent work. | Complete integrated object approach governs; both contracts are public works. |
| Lusardi circumvention principle applied | Contracting to limit public funds to conveyors avoids prevailing wage laws. | Lusardi supports examining totality of facts to prevent circumvention; cannot contract around law. | Lusardi rule applied; overall project funded publicly and subject to prevailing wage. |
| Director's use of 'project' language | Calling it a 'project' improperly expands the analysis beyond 'construction'. | Use of 'project' language is permissible and does not invalidate analysis. | No reversible error; term used does not defeat the analysis. |
| Oxbow's proposed test for 'construction' | Proposes a two-part test based on end product or interdependent construction. | Test is unworkable and unnecessary; statutory language controls. | Oxbow's test rejected; determination depends on statute and facts. |
Key Cases Cited
- Lusardi Construction Co. v. Aubry, 1 Cal.4th 976 (Cal. 1992) (central to contractor circumvention concern; construction funded by public funds governs)
- City of Long Beach v. Department of Industrial Relations, 34 Cal.4th 942 (Cal. 2004) (broad interpretation of prevailing wage law and public works coverage)
- State Building & Construction Trades Council of California v. Duncan, 162 Cal.App.4th 289 (Cal. App. 4th 2008) (judicial deference to agency interpretation while preserving independent statutory meaning)
- McIntosh v. Aubry, 14 Cal.App.4th 1576 (Cal. App. 1993) (construction meaning tied to complete integrated object)
- Priest v. Housing Authority, 275 Cal.App.2d 751 (Cal. App. 1969) (definition of construction includes renovation and related processes)
- Plumbers & Steamfitters, Local 290 v. Duncan, 157 Cal.App.4th 1083 (Cal. App. 2007) (broad interpretation of construction under section 1720)
- Azusa Land Partners v. Department of Industrial Relations, 191 Cal.App.4th 1 (Cal. App. 2010) (applies Lusardi approach to a multi-component project funded via public means)
- Greystone Homes, Inc. v. Cake, 135 Cal.App.4th 1 (Cal. App. 2005) (distinguishes when public funds are used for non-construction costs)
- City of Long Beach v. Department of Industrial Relations, No additional; see above (Cal. 2004) (reiterated in discussion of prospective application of amendment)
- Lewis Jorge Construction Management, Inc. v. Pomona Unified School Dist., 34 Cal.4th 960 (Cal. 2004) (public works project interpretation and prevailing wage framework)
- TRB Investments, Inc. v. Fireman’s Fund Ins. Co., 40 Cal.4th 19 (Cal. 2006) (context on construction project interpretations)