[00:00:02] Speaker 00: Case number 14-5132 at L, District of Columbia and CCDC Office, LLC, 13 CA 737 versus Department of Labor at L Appellants, Metropolitan Regional Council of Carpenters, Unincorporated Labor Organization at L, Mr. Cappell for the Appellants, Mr. Shipley for Appley District of Columbia, and Mr. Baskin for Appley CCDC Office, LLC. [00:00:34] Speaker 05: May it please the Court, I'm John Cappell from the Appellate Staff Civil Division U.S. [00:00:37] Speaker 05: Department of Justice and I'm representing the Appellants in this action. [00:00:42] Speaker 05: City Center DC is a vast public-private mixed-use development project that was initiated, authorized, approved, and largely supervised and controlled by the District of Columbia to redevelop approximately 10 acres of prime city-owned land in downtown DC. [00:01:08] Speaker 05: There can be no question [00:01:12] Speaker 05: Well, D.C. [00:01:14] Speaker 05: has derived extensive social and economic and infrastructural benefits from this project. [00:01:23] Speaker 03: Isn't that characteristically the case when there's a, at least in the views of the officials addressing the matter, [00:01:33] Speaker 03: City development gets city approval? [00:01:37] Speaker 03: I mean, they don't give their approval and say, this is going to be disastrous for the city, right? [00:01:42] Speaker 05: No, Your Honor. [00:01:43] Speaker 05: But here, they not only, they initiated, basically, they called the shots with this project from the outset, and they determined what it would consist of. [00:01:56] Speaker 05: It's also, had they done this project directly with a construction contractor instead of going through developers and intermediary, there really could be no question that this would be considered a public work within the meaning of the day. [00:02:12] Speaker 03: Well, that's sort of an interesting, I mean, one could sort of bring the changes on such an alternative hypothetical, right? [00:02:19] Speaker 03: Right. [00:02:19] Speaker 03: I mean, they built this vast place [00:02:21] Speaker 03: with apartment houses, office buildings, and so forth, and then they sell it. [00:02:27] Speaker 03: I mean, I guess they could. [00:02:31] Speaker 03: And we may assume that that would qualify as a public work. [00:02:38] Speaker 03: It's never to be occupied by the public at all or by people there under [00:02:45] Speaker 03: government aegis. [00:02:48] Speaker 03: Could I have a stretch? [00:02:49] Speaker 05: Well, but Your Honor, it's certainly more than condos. [00:02:55] Speaker 05: What this project involved was the reopening of the 10th and I street corridors, which had been closed off by the old convention center, also the creation of a public park and a public plaza. [00:03:12] Speaker 05: and the affordable housing, affordable rental housing. [00:03:18] Speaker 03: My limited experience as a newspaper reader, those happen all the time in what everyone recognizes as private development. [00:03:29] Speaker 03: Municipal governments have a powerful hand in moderate development. [00:03:36] Speaker 05: That is correct. [00:03:37] Speaker 05: And that is why the one of the reasons why this should be regarded as a public. [00:03:42] Speaker 03: If you are you're going over to the position that anything done with such a degree of scrutiny in the district would be covered by Davis Bacon. [00:03:53] Speaker 05: Well, certainly it would satisfy the public interest prong. [00:03:56] Speaker 05: And then the relevant inquiry is whether it's directly by authority of the district within the meaning of the regulation, 5.2K. [00:04:07] Speaker 03: It's not a fair or false without the authority of the municipal government, right? [00:04:13] Speaker 03: That's just a recognition of reality. [00:04:16] Speaker 05: Yes, but there, for instance, there is a world of difference between, say, zoning regulations and the kind of hands-on involvement that the District of Columbia had with this process, which it initiated and it determined what it wanted, how it wanted. [00:04:35] Speaker 03: That's probably true of your zoning regulations from 1913, but zoning's evolved a great deal since then. [00:04:43] Speaker 05: And granted, Your Honor, and of course the definition of public works has evolved since that time as well. [00:04:52] Speaker 05: Well, that's an interesting question. [00:04:55] Speaker 03: I didn't see any suggestion that in ordinary parlance such a project as this had ever been called public work. [00:05:05] Speaker 03: I mean, you didn't offer [00:05:07] Speaker 03: Certainly not dictionary definitions, whatever they might be worth, or examples from newspapers or magazines or any current examples of language. [00:05:20] Speaker 05: Well, we certainly cited dictionary definitions that are consistent with this that don't require sort of direct funding by the government of the project in question. [00:05:32] Speaker 05: And also, this is entirely consistent with the Department of Labor case law that is at issue here, the crown point. [00:05:45] Speaker 05: Fort Drum and Phoenix Field Office decision. [00:05:50] Speaker 08: As the district court said, those circumstances were the exact reverse of this circumstance in the sense that the government was leasing the property and then would operate the property once developed. [00:06:03] Speaker 05: Yes, it is true that they were different in that respect, but the principles, the recognition that the concept of public works was broader, that it entailed projects other than the traditional relationship between the government and a construction contractor, [00:06:28] Speaker 05: building a public building or a public work, that applies equally here. [00:06:38] Speaker 08: Now, just to start with the text of the statute, for me it does refer to every contract to which the federal government or the District of Columbia is a party for construction. [00:06:49] Speaker 08: of public buildings and public works, and the District of Columbia is not a party to the construction contract. [00:06:57] Speaker 08: Why is that not the end of the case? [00:07:00] Speaker 05: It is a party to a contract in which construction is a significant element, and that's... It's a party to the lease agreement, but the construction contract is a separate [00:07:14] Speaker 08: contract between the developer and the builder. [00:07:18] Speaker 08: The district is not a party to that contract, correct? [00:07:21] Speaker 05: It's not a party to the contract between the developer and the builder. [00:07:24] Speaker 05: However, it is a party to the exclusive rights agreement and to the restated development agreement. [00:07:33] Speaker 05: and to the leases with the developer. [00:07:39] Speaker 05: And those documents, they contemplate construction that is in excess of $2,000, and that is sufficient to qualify. [00:07:49] Speaker 05: under Davis-Bacon. [00:07:51] Speaker 05: And the district court in this circuit, in the Turnage case, recognized that principle, that this would satisfy the contract for construction element because... In that case, though, the government funds were being paid, passed through, in essence, to pay for the construction. [00:08:12] Speaker 05: Well, that is correct. [00:08:14] Speaker 08: And here we don't have government funds going for the construction, correct? [00:08:17] Speaker 05: You do not have direct government funding. [00:08:21] Speaker 05: That is correct. [00:08:23] Speaker 05: However, the developers obviously benefiting [00:08:29] Speaker 05: economically from this relationship by virtue of being able to rent the retail and the residential space and to sell the condos. [00:08:38] Speaker 05: So that is how this project is financed. [00:08:43] Speaker 05: And had the district done it itself, obviously it would have paid up front and it would be reaping correspondingly greater economic rewards. [00:08:54] Speaker 05: That is why this is a different financial arrangement, but it is functionally equivalent to the traditional relationship. [00:09:06] Speaker 08: But then to take it and pick up on Judge Williams' question, it's functionally equivalent. [00:09:11] Speaker 08: How is it functionally not equivalent to [00:09:14] Speaker 08: all sorts of private development that is approved through zoning boards, approved through municipal governments around the country. [00:09:23] Speaker 08: In other words, what's the limiting principle to this being a pretty massive expansion of Davis-Bacon's coverage? [00:09:30] Speaker 05: Well, one of the limiting principles is that the project was initiated and essentially controlled by the district from the outset. [00:09:40] Speaker 05: The district determined exactly what it wanted, what it would require in the master plan. [00:09:47] Speaker 08: Isn't it common for city and local governments around the country to say, we want to encourage development in certain parts of the neighborhood, of the downtown, of certain areas, and we're going to zone for that and seek development of that? [00:10:03] Speaker 08: Are all those construction projects now going to be covered by Davis-Bacon? [00:10:08] Speaker 05: No, Your Honor. [00:10:09] Speaker 05: Again, if it's simply a matter of zoning, that would not qualify under Davis-Bacon. [00:10:15] Speaker 05: But here, you have the contractual relationship between the district and the developer that contemplates this massive construction to design what is clearly a public work, to basically redo this prime part of downtown DC. [00:10:33] Speaker 03: What about planned unit developments? [00:10:35] Speaker 05: Excuse me, Your Honor? [00:10:36] Speaker 03: What about planned unit developments, which are a perfectly standard outgrowth of zoning? [00:10:43] Speaker 03: You're not familiar with that? [00:10:44] Speaker 02: I'm not familiar with the term. [00:10:45] Speaker 02: Isn't it the case that the ARB specifically said it wasn't extending this to any project requiring city permits or approvals and [00:10:58] Speaker 02: The ARB said that it was distinguishing it in part on the ground that this is a massive project in the middle of downtown where the land is all owned by the District of Columbia, where there's thousand-page lease specifying what kind of construction can go on, what kind can't, where that thousand-page lease includes a park available to the population, opening of alleyways, et cetera. [00:11:25] Speaker 02: and low-cost housing and where it provides that if construction doesn't meet specific milestones that the project can be ended. [00:11:37] Speaker 05: that is absolutely right your honor and that is the that is the essence of uh... uh... uh... of the uh... the arby's uh... holding and that is why this is does constitute a a public work with me let me ask you about public work you didn't mention the kilo case isn't that an example uh... uh... uh... uh... an answer to judge [00:11:57] Speaker 02: Williams' question of how the words, in that case, public use, but as the other side points out, public works, and it's often defined in terms of public use, extends to public-private partnerships. [00:12:10] Speaker 05: Again, Your Honor, yes, we've emphasized that in our briefs. [00:12:13] Speaker 05: The key load stands for this proposition that this is a public use within the meaning of the Takings Clause, but it would apply equally in this context. [00:12:22] Speaker 02: And on the question of contracts for construction, [00:12:25] Speaker 02: I take it all three of the Labor Department cases all held, they involved leases, the other cases, that were the precedents, Fort Drum, et cetera, Crown Point, and which the board found in interpreting the statute that the specific contract [00:12:47] Speaker 02: itself doesn't have to be for with the contractor, it can be about construction as long as it's the city or the federal agency is a party. [00:12:57] Speaker 02: Is that right? [00:12:58] Speaker 02: Yes, your honor. [00:12:59] Speaker 02: Didn't we so hold in the Ober case with respect to the service contract? [00:13:02] Speaker 02: Yes, that's exactly what you held in the Ober case. [00:13:06] Speaker 02: uh... so those would have been good answers to the questions of my colleagues uh... well thank you your honor they are in the brief so i i i i i agree with that i don't think it waived that argument yet now on the uh... limiting principle on page forty five of the uh... [00:13:23] Speaker 08: Your opposing counsel's brief. [00:13:24] Speaker 08: They say if city center were a public work within the meaning of the Davis-Bacon Act, then a private tenant at city center who paints his or her office or resident or makes other alterations or repairs exceeding $2,000 would be subject to the act. [00:13:37] Speaker 08: Do you want to respond to that? [00:13:39] Speaker 05: Well, Your Honor, we would not necessarily concede that that is true, that there's a point at which the action that's being taken is sufficiently ancillary to the contract, that it would no longer, that it would not fall under the rubric of Davis-Bacon. [00:14:01] Speaker 05: It would not be controlled by this master agreement. [00:14:03] Speaker 08: So that's a test before writing the opinion going your way. [00:14:06] Speaker 08: What is the test to distinguish a situation like that? [00:14:11] Speaker 08: You said, I think, sufficiently ancillary, which does not give me great confidences to the clarity of the test going forward. [00:14:19] Speaker 05: Well, Your Honor, it's hard to specify an exact test, a bright line, for that type of situation. [00:14:29] Speaker 05: But certainly, given the size, the magnitude of this project, and contrasting that with, say, painting the partner's office. [00:14:45] Speaker 05: Why does the size of the project matter? [00:14:48] Speaker 05: Well, because that is what makes this a public work. [00:14:55] Speaker 05: That is part of what makes this a public work for purposes of Davis-Bacon, that it is so extensive, that it involves so many. [00:15:06] Speaker 03: So it's just a question of scale? [00:15:08] Speaker 05: Well, scale is significant, Your Honor. [00:15:11] Speaker 05: Size does matter here. [00:15:13] Speaker 03: Any cases supporting that distinction? [00:15:17] Speaker 05: Some of these seem to be quite tiny, the VA clinic. [00:15:25] Speaker 05: Certainly it can be if all we're talking about is a small scale project. [00:15:33] Speaker 02: I don't understand what scale has to do with the painting by a tenant of their apartment. [00:15:38] Speaker 02: Who does the tenant have a contract with? [00:15:40] Speaker 05: Well, the tenant would have a contract with CCDC. [00:15:44] Speaker 02: And does the district's contract with CDCDC say tenants must construct and paint in a certain way the insides of their apartment? [00:15:53] Speaker 02: No, Your Honor. [00:15:54] Speaker 02: I don't believe that it... There aren't any specifications about the painting of the insides of apartments, is there? [00:16:02] Speaker 02: No, Your Honor. [00:16:02] Speaker 05: There are extensive specifications with respect to the broader parameters of the project, which is what I was driving at, but there's certainly nothing reaching down to this level of minutiae. [00:16:19] Speaker 08: This might be a repeat of something I asked before, but if one lands owned by the government and then leased to a private developer for development, and the lease agreement contemplates development by the private developer, will any contract that the developer has with a builder then fall within Davis-Bacon? [00:16:39] Speaker 08: And if not all of them, how would you distinguish which do and which don't? [00:16:44] Speaker 05: Well, Your Honor, certainly anything that the developer enters into that is carrying out the mandate of the Davis-Bacon project would fall within it. [00:16:58] Speaker 05: OK. [00:17:00] Speaker 08: And so that's a pretty significant expansion, right, of Davis-Bacon. [00:17:05] Speaker 08: Davis Bank and although I guess you could draw the baseline the other way and I will when I'm talking to the other side which would be you could argue it's a contraction not to apply it I suppose to that circumstance but it does seem like Davis Bank and originally was contemplating and we know that was originally contemplating a different scenario than this. [00:17:23] Speaker 05: Well, Your Honor, certainly in 1931, when Davis-Bacon was enacted, there was a much narrower conception of public works and public buildings generally. [00:17:34] Speaker 05: And that has evolved over time. [00:17:36] Speaker 05: And the Supreme Court recognized that in the Irwin case, specifically, which was already 1941. [00:17:42] Speaker 05: It said that even in the last 12 years, the concept had expanded significantly. [00:17:49] Speaker 05: And since then, it has expanded further. [00:17:53] Speaker 08: But what I meant was the other prong, which is that in the original act and the text of the statute, it's contemplated as the contract between the government and the builder. [00:18:04] Speaker 08: And what we're talking about here is a contract between the government and the developer and then a separate contract between the developer and the builder, which does not seem covered by the text of the statute. [00:18:13] Speaker 08: And the question is really whether it's sufficiently similar to draw within the terms of the statute, I suppose. [00:18:20] Speaker 05: Yes, Your Honor, it's certainly consistent with the literal language of the statute. [00:18:25] Speaker 05: It's within the fact that it doesn't necessarily – when it says contract for construction in excess of $2,000, to which the federal government or the district is a party, that is certainly consistent with this type of [00:18:42] Speaker 05: It being a contract that contemplates construction, as this one does, that's clearly in excess of $2,000, even though the federal government or the district is not contracting directly with a construction contractor. [00:18:57] Speaker 08: I don't mean to push back too hard, but that's not within the literal terms of the statute. [00:19:02] Speaker 08: The district's not a party to the contract for construction. [00:19:07] Speaker 08: Right? [00:19:09] Speaker 08: It's a party to the lease agreement, which, in your words, contemplates construction. [00:19:13] Speaker 05: Well, it's a party to the exclusive rights, the redevelopment agreement. [00:19:18] Speaker 02: Well, there couldn't be any construction without this contract, right? [00:19:21] Speaker 02: That's correct, Your Honor. [00:19:23] Speaker 02: So the agency's interpretation of contract for construction is a contract that authorizes construction. [00:19:29] Speaker 02: Yeah, exactly. [00:19:30] Speaker 02: And without it, there wouldn't be any construction. [00:19:32] Speaker 05: That's correct, Your Honor. [00:19:33] Speaker 05: And again, that's the key point. [00:19:36] Speaker 05: And it's clearly, this is a contract for construction, and it's obviously in excess of $2,000. [00:19:42] Speaker 02: I'm going to just ask on the question of city permits and stuff. [00:19:46] Speaker 02: This only applies to the District of Columbia and the federal government, right? [00:19:49] Speaker 02: The Davis-Bacon Act does, right? [00:19:52] Speaker 02: Yes. [00:19:54] Speaker 03: uh... this would not apply to these kind of projects in city of chicago or any other city uh... unless they're just a federal land unless they're federal land or federal land if the agreement between the city regulators and the developer [00:20:22] Speaker 03: written down in a contract in your vision of this contract. [00:20:28] Speaker 03: And incidentally, I think they usually are. [00:20:32] Speaker 05: If there is a contract, yes, Your Honor, that may well be. [00:20:39] Speaker 03: That is a very substantial expansion, I think, from any previous economic plan. [00:20:48] Speaker 05: Well, certainly it's consistent with the definition of contract for construction under Davis-Bacon as it's been analyzed by DOL, by OLC, and by the district court in this district. [00:21:07] Speaker 03: You don't actually have a case where you have neither the government funding of the construction nor occupancy of the project by a specific government activity. [00:21:25] Speaker 03: I'm thinking of the barracks and the VA clinic. [00:21:29] Speaker 05: There is no case directly on point, Your Honor. [00:21:32] Speaker 05: That is true. [00:21:35] Speaker 05: If there are no further questions, I would hope that the court would give me a couple of minutes on rebuttal. [00:21:42] Speaker 05: Thank you. [00:21:44] Speaker 02: We'll hear from the District of Columbia. [00:21:52] Speaker 06: Good morning and may it please the Court, Carl Schifferle for the District of Columbia. [00:21:56] Speaker 06: The District Court got it right. [00:21:58] Speaker 06: City Center, comprising private offices, shops, condos, restaurants, is not a public work under the Act. [00:22:05] Speaker 06: Enacted during a Depression-era federal spending program of public works, the Act is inapplicable because there's no public funding, there's not a public facility in any sense, and there is no primarily public purpose. [00:22:18] Speaker 06: City Center is like any large [00:22:20] Speaker 06: commercial development. [00:22:21] Speaker 06: A private developer with private funds undertakes the entrepreneurial risk of constructing buildings for private interests. [00:22:29] Speaker 08: Didn't the Supreme Court say that the Howard University Library was a public work in the Irwin case? [00:22:35] Speaker 06: Yes, Your Honor. [00:22:36] Speaker 06: In that case, there was public funding Congress specifically appropriated money for the project. [00:22:44] Speaker 06: The federal government entered into the construction contract with the builder. [00:22:47] Speaker 06: The federal government was a party. [00:22:49] Speaker 06: Howard University is a congressionally chartered university. [00:22:53] Speaker 06: It has a statutory obligation to serve the general public by providing education. [00:22:59] Speaker 02: The library wasn't open to the public, right? [00:23:02] Speaker 02: I think that's specifically said in the case. [00:23:06] Speaker 06: Well, I suppose that's correct, but that doesn't negate the points that I was making, that it was federally funded. [00:23:11] Speaker 06: The federal government entered in the contract. [00:23:13] Speaker 02: Where does the federal fund part come in? [00:23:16] Speaker 02: Where do you get that from? [00:23:18] Speaker 06: Well, we can look first at the text of the Act. [00:23:21] Speaker 06: It requires that it applies to contracts in excess of $2,000, to which the district is the party or the federal government. [00:23:28] Speaker 02: Well, this contract is in excess of $2,000. [00:23:31] Speaker 02: The lease payments are $2 million. [00:23:32] Speaker 02: So the contract itself, at least literally, is [00:23:36] Speaker 02: And certainly the construction contracts are... [00:23:42] Speaker 02: In Ober, didn't we say that that $2,000 limit doesn't mean it has to be in the contract that the government itself signs? [00:23:48] Speaker 02: In Ober travel, didn't we say exactly that? [00:23:51] Speaker 06: Well, what I recall in the Ober travel case is that the government was paying for the travel. [00:23:57] Speaker 06: The travel agent was getting a commission not directly from the government, but it was being paid in effect through the government payment of the travel. [00:24:07] Speaker 06: I would point to also the ordinary. [00:24:09] Speaker 02: It would produce revenue. [00:24:12] Speaker 02: of more than that amount, but the contract itself was a no-cost contract. [00:24:17] Speaker 02: That specifically was sort of the title of the case that applies even to no-cost contracts. [00:24:22] Speaker 02: As long as there's some later, in that case, services worth $2,500 in here, there would be construction worth that much. [00:24:31] Speaker 02: Where else do you get the words public funds from? [00:24:34] Speaker 06: Well, there is the text. [00:24:36] Speaker 06: There is also the ordinary meaning of public work. [00:24:38] Speaker 02: Where did you get that from? [00:24:40] Speaker 02: The ordinary meaning of public work. [00:24:41] Speaker 06: Well, for example, the Peterson case, which the Department of Justice has cited, is the classic definition of public work for Davis-Bacon and other depression-era statutes. [00:24:48] Speaker 06: It says specifically among [00:24:50] Speaker 06: The things that makes a public work is that the government is authorized to expend funds. [00:24:56] Speaker 06: There's the Code 2 case. [00:24:57] Speaker 02: Well, can we pause over that one? [00:24:59] Speaker 02: That uses the language includes any work. [00:25:03] Speaker 02: It doesn't say it's limited. [00:25:05] Speaker 02: And on the last page – second to last page of the case, it says, Peterson, as we review the act here, it includes a, work done on property belonging to the United States. [00:25:17] Speaker 02: be all fixed works constructed for public use at the expense of the United States. [00:25:22] Speaker 02: This is work done on property belonging to, in this case, the District of Columbia, isn't it? [00:25:29] Speaker 06: But what is being constructed is not anything that's of the district that is owned. [00:25:34] Speaker 02: That's not what the language of Peterson says. [00:25:36] Speaker 02: You told me to look to Peterson, I look to it, and it says, work done on property belonging to the United States. [00:25:42] Speaker 06: Well, I mean, I think the Peterson definition of public work does expressly say that the government is authorized to expend funds. [00:25:51] Speaker 06: Also, the CO2 case, which the Supreme Court, again, described in the Davis-Bacon Act, said, quoted as the direct of the federal agencies engaged in the disbursement of public funds. [00:26:00] Speaker 02: CO2 wasn't about this issue at all, right? [00:26:02] Speaker 02: It's about private right of action. [00:26:03] Speaker 02: And the quotation is actually from Cannon, right? [00:26:06] Speaker 02: It's from the Cannon case, which is the [00:26:08] Speaker 02: between courts decision about what constitutes. [00:26:11] Speaker 02: Do you have anything else that says, that actually defines public work as requiring public funds? [00:26:17] Speaker 02: When you say the common language, where did you get that from? [00:26:21] Speaker 02: Is that your dictionary? [00:26:22] Speaker 02: Is that where you got it from? [00:26:23] Speaker 02: Well, we did cite dictionary definitions as well as which... You cited Black's Law dictionary, right? [00:26:28] Speaker 02: Correct. [00:26:28] Speaker 02: And you think that's an important ground on which the members of Congress may have relied or at least reflected the views of the Congress that wrote it? [00:26:37] Speaker 06: Well, I think, yes, that's consistent with the ordinary meaning of public work. [00:26:43] Speaker 06: I would also note, too, that at the time you had the National Industrial Recovery Act, other depression era programs where what was occurring was publicly funded public works projects. [00:26:55] Speaker 02: So if that's the case, why did you cite us to a Black's Law Dictionary of 2014? [00:27:02] Speaker 06: Well, respectfully, I think that ordinary meaning of public work applies to what Congress intended. [00:27:10] Speaker 06: It's the ordinary meaning that's. [00:27:11] Speaker 02: So whatever Black's Law Dictionary said in the 1930s would be the correct definition of it. [00:27:17] Speaker 02: Is that right? [00:27:18] Speaker 02: You know where I'm going here, right? [00:27:20] Speaker 02: Because the definition that's in the Black's Law Dictionary that you cited to us was not the definition in 1933. [00:27:26] Speaker 02: And the words public funds was not added to that definition until 1999. [00:27:32] Speaker 02: And in 1933, looking to the very document that you say should count, is works designed to subserve some purpose of public necessity, use, or convenience, and the words public funds are not included. [00:27:48] Speaker 02: So if we go by only by the meaning of public works in blacks, certainly this provides some purpose of public convenience, doesn't it? [00:27:58] Speaker 06: Well, no, this does not suffice. [00:28:02] Speaker 06: This is a private commercial development. [00:28:04] Speaker 06: It may be true that there are incidental secondary public benefits to that, but that is common to any private development and certainly any large private development to the extent that [00:28:14] Speaker 06: the Department of Labor, this decision has no limiting principle, as suggested here today. [00:28:18] Speaker 06: Any law... I'm sorry, George, I'm sorry. [00:28:20] Speaker 02: I'm going on a language before we try to limit things. [00:28:23] Speaker 02: First on the language, then you would concede that since Black's Law Dictionary does not use public funds in 1933, [00:28:30] Speaker 02: that that was not the meaning the Congress was requiring in 1930. [00:28:34] Speaker 06: No, no, I wouldn't concede that. [00:28:35] Speaker 06: Again, I would point to the text of the statute, which does have an explicit funding threshold, a public funding threshold of $2,000 in our view, the COTU decision. [00:28:45] Speaker 06: There's the structure, the purpose, and the history of the act. [00:28:48] Speaker 08: Well, on the $2,000, it seems to me that's a separate part of the statute, arguably, which is contract for construction to which the government is a party that exceeds $2,000. [00:28:57] Speaker 08: That's one part. [00:28:59] Speaker 08: And the other part is public work or public building. [00:29:02] Speaker 08: And I'm not sure public work or public building necessarily requires the public funding of the construction, as opposed to what the end [00:29:14] Speaker 08: product of the construction is. [00:29:17] Speaker 06: Well, it may be right that we can gather that public funding is required, even if we don't look specifically at the ordinary meaning of public work. [00:29:26] Speaker 06: But we put it in the context of the act itself, which does have this funding threshold. [00:29:30] Speaker 06: The structure and enforcement provisions assume, presume the government is spending money. [00:29:35] Speaker 08: Now on that, though, what do you do with the lease agreement cases? [00:29:40] Speaker 08: I guess my first question is, are those correct in your view? [00:29:45] Speaker 06: Well, we don't need to take issue with the lease – I mean, certainly they're questionable, but we don't need to take issue with them because there were two things there that are absent here. [00:29:53] Speaker 06: One, public funding, because through the agreement, the upfront agreement, the government was essentially paying the cost of the construction through the guarantee of lease payments. [00:30:03] Speaker 06: And we had a public facility, something that would be used by the government – in fact, something specifically designed in detail for a specific use by the government. [00:30:13] Speaker 06: Critical facts and essential facts are not present here. [00:30:17] Speaker 08: But if you've stretched – just on the first of those two that you identified – if you stretch the literal terms of the language slightly to cover lease agreements in which the government is leasing the property from someone else, why not do the flip side where the government is leasing it to someone else? [00:30:42] Speaker 06: Yeah, well, I wouldn't want to go down that road. [00:30:44] Speaker 06: I would point again to the text of the act, which does require that the contract be one to which the district is a party for construction public works of the district. [00:30:53] Speaker 08: Right. [00:30:54] Speaker 08: So what I hear you saying there, and you might not want to say it explicitly, is that those lease agreement cases are on questionable ground. [00:31:02] Speaker 06: They are on questionable ground, but our argument does not depend on invalidating them. [00:31:07] Speaker 06: We could distinguish them, is what you're saying. [00:31:09] Speaker 06: In fact, I think they dictate the opposite result, because they had as necessary to those holdings two things not present here, public funding and it publicly used. [00:31:19] Speaker 02: That's not what they say. [00:31:20] Speaker 02: It's clear that they're distinguishable under facts, and the Labor Department agrees with that. [00:31:25] Speaker 02: But the principle that they are all applying is quite clear. [00:31:29] Speaker 02: that even where the principal purpose of the contract is to lease a facility to be used, the construction of the building is more than an incidental element. [00:31:39] Speaker 02: Therefore, the contract in question is a contract for construction within the meaning of the Davis-Bacon Act. [00:31:45] Speaker 02: And surely the construction here is more than an incidental element of the agreement between the development authority and the District of Columbia. [00:31:55] Speaker 06: Our position is that the contract for construction to which the Act applies is between the developer and the builder, because it specifies not only what will be built, but what will be lost. [00:32:05] Speaker 02: So you're not answering the question I'm asking. [00:32:07] Speaker 02: So you are saying that part of the three precedents of the Labor Board is wrong, right? [00:32:15] Speaker 02: You have to be saying that. [00:32:17] Speaker 06: Well, respectfully, no. [00:32:18] Speaker 06: I don't have to be saying that. [00:32:19] Speaker 06: Again, our position does not depend on it. [00:32:23] Speaker 06: To the extent that it is applied to city center, that reasoning, it would be incorrect. [00:32:27] Speaker 06: There is no limiting principle to this decision. [00:32:30] Speaker 08: The type of... But is that a problem? [00:32:34] Speaker 08: In other words, the statute applies to federal government projects and D.C. [00:32:38] Speaker 08: projects. [00:32:39] Speaker 08: It does not apply to every project around the country that is approved by a local government. [00:32:46] Speaker 06: It is a problem to the extent that this Court applies the Chevron test. [00:32:49] Speaker 06: I mean, we argue it's not applicable at all. [00:32:51] Speaker 06: But to the extent it applies it, it would be a basis for striking it down under step two of the analysis. [00:32:57] Speaker 06: And I would not, I mean, I think it's- But why, I guess, why is that? [00:33:01] Speaker 08: In other words, I think there's the parade of horribles. [00:33:04] Speaker 08: This would be a massive expansion. [00:33:05] Speaker 08: But would it be a massive expansion when these kinds of projects are [00:33:11] Speaker 08: done now in the place of the traditional Davis-Bacon kind of project that was a government construction contract? [00:33:21] Speaker 06: Well, it would significantly and adversely affect economic development in the district. [00:33:26] Speaker 08: Okay, explain that. [00:33:27] Speaker 08: Why would it adversely affect economic development in the district? [00:33:31] Speaker 06: because you are imposing costs on large private development or really any private development potentially in the district you are imposing costs and by imposing costs you [00:33:43] Speaker 06: discourage development. [00:33:44] Speaker 06: You shift development elsewhere outside of the district. [00:33:48] Speaker 06: You require that other public benefits of a project be eliminated in order to offset those costs. [00:33:54] Speaker 02: Well, that's a general argument against the Davis-Bacon Act. [00:33:57] Speaker 02: That's not... Well, respectfully... Isn't that true? [00:34:00] Speaker 02: The Davis-Bacon Act always raises the costs, right? [00:34:03] Speaker 06: Well, for publicly funded construction, not for private development. [00:34:10] Speaker 02: Well, that's really the question here. [00:34:12] Speaker 02: The government of the District of Columbia could take less in lease payments in exchange, and if it felt that, work and negotiate a different kind of deal with the developer. [00:34:25] Speaker 02: But imagine, I mean, all we have before us is the case where many blocks of downtown District of Columbia are owned by the District of Columbia and are being put to this question. [00:34:36] Speaker 02: So whatever we decide in this case only need cover that kind of situation. [00:34:44] Speaker 02: That is certainly not the case with most permitting in the District of Columbia, is it? [00:34:47] Speaker 02: The government of the District of Columbia doesn't own all the land and the District of Columbia doesn't. [00:34:53] Speaker 06: No, but it is certainly involved in a large degree in private development. [00:35:00] Speaker 06: The rationale of the Department of Labor's decision is where there is the public benefits in some manner and there is considerable government authority, then that is a public order. [00:35:11] Speaker 02: All we need to do is uphold this with respect to the facts before us. [00:35:15] Speaker 02: We don't need to decide whether it would be reasonable if applied where there wasn't public land. [00:35:21] Speaker 02: I'm just asking you to take that as a hypothetical. [00:35:25] Speaker 02: Would that have the same economic impact that you're concerned about in the District of Columbia? [00:35:31] Speaker 02: Where there's a combination both of the district owning the land and a project of the degree of entanglement between the district and the development, as there is in this case. [00:35:45] Speaker 02: Can you give me another example of a project like that in the District of Columbia? [00:35:49] Speaker 06: Yes, I mean, certainly there are occasions when the government disposes of land for private development or leases it occurs. [00:36:01] Speaker 06: You have inclusionary zoning laws, which require affordable housing. [00:36:06] Speaker 06: You have planned unit developments. [00:36:08] Speaker 02: I'm still asking about the ones where the government owns the land. [00:36:11] Speaker 02: I know you want to slip into the other, but I'm trying to limit it and see whether there is a limitation here. [00:36:16] Speaker 02: And of course, if the government wants this kind of project, it can reduce the lease payments. [00:36:23] Speaker 02: And if it doesn't care – that is, if it's truly private and it doesn't care at all about any public benefits, it can charge max for the lease. [00:36:33] Speaker 02: That seems to be a choice that the government and the District of Columbia could make, just like the Congress has made a choice that [00:36:41] Speaker 02: that workers will be paid more than they would otherwise be paid on public projects. [00:36:45] Speaker 02: That has costs. [00:36:46] Speaker 02: There's lots of policy arguments on both sides of that. [00:36:49] Speaker 02: But we're not here to make those policy arguments. [00:36:52] Speaker 06: Right. [00:36:52] Speaker 06: But respectfully, to say that it might be good policy to apply the Davis-Bacon Act here... I'm not saying it's good policy. [00:36:58] Speaker 02: I am not judging the policy one way or the other. [00:37:01] Speaker 06: Okay, but to the extent that you could say, well, it's not an issue because the district could lower its lease payments or eliminate some of the public benefits that the project would otherwise accrue, that respectfully is not the issue. [00:37:14] Speaker 06: It's whether the Act requires it in this particular case. [00:37:17] Speaker 02: Yes, yes, but you're driving me to this because you're no longer talking about what the Act requires, but you're talking about whether there's a limiting principle. [00:37:23] Speaker 02: So that's why we're talking about limiting principles. [00:37:26] Speaker 02: If you only look on the face of the statute, you might say it covers everything without any limiting principles. [00:37:32] Speaker 02: And we have certainly held in other cases, and the Supreme Court has held, that when there's a very broad statute, it's to be interpreted, an agency is entitled to interpret it to the max. [00:37:45] Speaker 02: And now you're suggesting that we should think of some limits, and I'm trying to suggest some for you. [00:37:51] Speaker 06: Well, I would suggest that the Department of Labor has not sent any limits that we have suggested, which are very reasonable and proper limits. [00:37:59] Speaker 06: And I think the only reasonable way to interpret the Davis-Bacon Act, and that is that there is public funding, that there is some sort of public facility that is of the district, which means it is used, owned, occupied by the district or the general public, and that there is a primarily [00:38:17] Speaker 06: public purpose. [00:38:18] Speaker 06: The incidental benefits which accrue from private development are not the sorts of things that implicate the Davis-Bacon Act. [00:38:25] Speaker 06: This private commercial development is like any other private commercial development where you have private developers selling or leasing to private interests. [00:38:34] Speaker 06: It's those private interests which are dictating ultimately what will be built because it is for the use of private [00:38:41] Speaker 08: The reason I was asking about this is because I was curious if the statute could be deemed ambiguous as to whether it applies to something like this, whether it's reasonable in some respect to extend the statute to these kinds of [00:38:59] Speaker 08: public-private developments and so I was asking about that and one of the things you respond with is that it would be unreasonable because it would significantly deter economic development in the District of Columbia. [00:39:11] Speaker 08: Are there other reasons to think it would be unreasonable or problematic [00:39:17] Speaker 08: for arbitrary to extend the statute, and I'm loading the dice by using the word extend, but to apply the statute to this kind of situation. [00:39:28] Speaker 06: Yes, I mean, we do think it is unambiguous under step one. [00:39:31] Speaker 06: Erwin has described the term as playing Peterson as well. [00:39:34] Speaker 06: But even if you go to step two and what's unreasonable, yes, I think the fact is no little limiting principle that this is unprecedented, that never in nearly a century of Davis-Bacon has it been suggested it would apply to a private commercial development like this, that there are these sort of bizarre results that would occur. [00:39:52] Speaker 06: Because if city center is a public work, then under the statute, any time you alter, including paint, a public work, then Davis-Bacon applies. [00:40:02] Speaker 06: So a private tenant [00:40:03] Speaker 06: at city center, painting a law firm's office, Davis-Bacon wages would apply. [00:40:09] Speaker 06: I mean, that's just, it's just an illogical consequence of the Department of Labor's application. [00:40:14] Speaker 06: That is horrible because [00:40:17] Speaker 06: Well, I think it shows the absurd result. [00:40:19] Speaker 06: I mean, it can't possibly be that that was what Congress intended. [00:40:24] Speaker 06: We also have – there are many situations in which the federal government is involved in some way with the use of land, including where, say – and this is what we suggest in our brief – where it leases land for oil, gas exploration. [00:40:41] Speaker 08: Presumably the federal government considered its status as landowner when it took the position it's taking in this court. [00:40:51] Speaker 08: Solicitor General balanced all the interests of the federal government, presumably, and they've come down on the side that [00:40:57] Speaker 08: Davis-Bacon should apply to these kinds of circumstances, even though the federal government will be on the other side of some of these issues? [00:41:04] Speaker 06: Well, my point is that it's unreasonable, and it's unreasonable because never has it been suggested that it was contemplated that the act would apply in those sorts of circumstances. [00:41:15] Speaker 02: But I'm not following. [00:41:16] Speaker 02: Never was it contemplated that the environmental acts would include a bubble concept until the Reagan administration [00:41:23] Speaker 02: changed the rule in Chevron, and the Supreme Court said perfectly okay. [00:41:28] Speaker 02: A new administration has the authority to make changes. [00:41:33] Speaker 02: And here, no one has ever addressed this question one way or the other. [00:41:36] Speaker 02: It's not as if the agency is changing its position even. [00:41:40] Speaker 02: It is confronted with something it wasn't confronted with before and has decided that the statute is ambiguous and that this applies in this case. [00:41:50] Speaker 02: A new administration with a different view about the economic development in the District of Columbia or the cost of it or the cost of it to the federal government can take the other position. [00:42:01] Speaker 02: In fact, it looks like that has happened in the Department of Labor. [00:42:04] Speaker 02: But so this is not really, this is really a question for the federal government to decide what's in the best interest and it can change its interest if there's an election. [00:42:15] Speaker 06: Well, what I was addressing goes to the unreasonableness under Step 2 of Chevron. [00:42:20] Speaker 06: I think it's a factor that's assuming we even get passed Step 1, which I don't believe we do in light of the text, structure, purpose of the Act. [00:42:28] Speaker 06: One of the purposes of the Act was to prevent the government by using its contracting power and its requirement that it pay the lowest bid [00:42:36] Speaker 06: for a government construction project, driving down wages below that what private industry pays. [00:42:42] Speaker 06: But we don't have that concern. [00:42:43] Speaker 02: That was one of the reasons, but the Supreme Court said, and in Birmingham being among them, that the purpose really was to raise the wage of workers who are working for the federal government. [00:42:51] Speaker 02: Can you tell me what you meant by – yeah, go ahead. [00:42:55] Speaker 06: I'm sorry. [00:42:56] Speaker 06: But that purpose doesn't apply, because if the [00:43:00] Speaker 06: private developer and the builder, private builder, are setting the cost of the contract, then that is by definition what private industry would pay. [00:43:10] Speaker 06: So the concern that underlies Davis-Bacon is simply absence. [00:43:13] Speaker 02: Well, if that's the case, then you're not going to have any additional costs. [00:43:16] Speaker 02: This is a prevailing wage rate question, right? [00:43:19] Speaker 02: And the question is whether they're paying the prevailing wages in the local community. [00:43:23] Speaker 02: Now, if they are already, then you don't really have any standing to know what's the issue here. [00:43:29] Speaker 06: Well, the issue is that the Department of Labor's calculation. [00:43:32] Speaker 02: Well, there you have another argument, but that has nothing to do with the argument we're discussing today. [00:43:37] Speaker 06: Well, it's just to address your honest point that the excess cost would be about $20 million. [00:43:42] Speaker 02: So there is a difference, and that money would be going to labor, right? [00:43:48] Speaker 06: Yes, yes, but the Department of Labor's position then is that it, at least initially, was that it comes from the district. [00:43:55] Speaker 06: And the district having not entered into any procurement contract, not even procured anything, not having any approvals. [00:44:01] Speaker 02: Now you have a remedy question which you have not raised with us. [00:44:03] Speaker 02: And you can go back to the district. [00:44:05] Speaker 02: If you were to lose here, you could go back to the district court on that question. [00:44:09] Speaker 02: But that's not a question before us. [00:44:11] Speaker 02: Let me ask you about Irwin. [00:44:12] Speaker 02: I'm a little confused by this. [00:44:14] Speaker 02: So Irwin is itself not a case under Davis-Bacon, right? [00:44:19] Speaker 02: That's correct, it's his annular act. [00:44:21] Speaker 02: Yeah, and that statute says, shall include among other things, among other things, not only the following, among other things, any projects of the character herefore constructed or carried on either directly by public authority or with public aid. [00:44:38] Speaker 02: It doesn't require public aid, public funding. [00:44:42] Speaker 02: You've been citing this as a case that makes it clear under Chevron 1 that this statute, a different statute, that Davis-Bacon Act requires public funding. [00:44:54] Speaker 06: Well, we don't view that disjunctive, meaning that [00:44:58] Speaker 06: It's an either-or. [00:45:00] Speaker 06: I mean, sometimes Congress writes statutes in a redundant way, and we still have to look at what is required by – carried on by public authority. [00:45:10] Speaker 06: We still have to look at the larger tax structure purposes. [00:45:13] Speaker 02: So what you're telling me is the or is ambiguous. [00:45:16] Speaker 02: It could be an inclusive or an exclusive or. [00:45:20] Speaker 06: Well, in our view, it's not exclusive. [00:45:24] Speaker 02: Well, I know that's in your view. [00:45:25] Speaker 02: But the word or can be either inclusive or exclusive. [00:45:28] Speaker 02: And there's nothing about that sentence that tells you would use and if that's what you were trying to say in that sentence, wouldn't you? [00:45:34] Speaker 03: Well, also, public funds may color the interpretation of public authority directed by public authority. [00:45:42] Speaker 06: Correct, correct. [00:45:44] Speaker 06: I don't want to lose the forest or the trees here. [00:45:46] Speaker 06: I mean, we do have to look at the entire context, and I think in light of that. [00:45:51] Speaker 02: I'm only asking about Chevron 1 and the clearness of the text that you were talking about. [00:45:55] Speaker 02: I understand the argument that it affects the context and that it may color other meanings, but I don't see anything in Irwin that makes this a Chevron 1 case. [00:46:07] Speaker 06: Well, again, in Irwin, Irwin involved a publicly funded works program. [00:46:14] Speaker 06: That was the project that was issued there. [00:46:15] Speaker 06: It was publicly funded. [00:46:18] Speaker 02: But Irwin doesn't say that if it weren't publicly funded, it wouldn't be okay. [00:46:22] Speaker 02: It just happens to deal with a case that fits within the or. [00:46:27] Speaker 06: True, but then we also have the concept of carried on directly by public authority. [00:46:32] Speaker 06: The direct authority here is exercised by private interests. [00:46:35] Speaker 06: The government at most is exercising indirect authority. [00:46:39] Speaker 06: It is a type of authority through zoning regulations, construction codes, the requirement that building plans be submitted in order for building permits to be issued. [00:46:48] Speaker 06: other zoning historic preservation laws. [00:46:51] Speaker 06: Those are all the types of indirect authority that the government might exercise in a particular case, but that is not sufficient to apply to Davis-Pake. [00:47:01] Speaker 06: And I would also want to get to the point that [00:47:04] Speaker 06: And our argument of the rape of Chevron is inapplicable here, that it's – this is not a case where the Congress has expressed the – or implicitly delegated authority to the Department of Labor to carry out or to make rules carrying the force of law. [00:47:19] Speaker 02: And so if I – I'm about the Section 3145, which says the Secretary of Labor shall prescribe reasonable regulations for contractors, [00:47:31] Speaker 02: And some contractors engaged in constructing, carrying out, completing, or repairing buildings, public buildings, public works, or buildings or works. [00:47:41] Speaker 06: That is the Copeland. [00:47:42] Speaker 06: That is the provision from the Copeland Act. [00:47:45] Speaker 06: The Department of Labor doesn't, I mean, it cites it, but it doesn't rely upon it. [00:47:49] Speaker 06: And that's because the Copeland Act concerns regulating contractors to prevent kickbacks. [00:47:57] Speaker 06: So the anti-kickback regulations are authorized by Congress. [00:48:00] Speaker 02: It does. [00:48:01] Speaker 02: This has been incorporated within the Davis-Bacon Act, and in 2002, Congress passed a statute which put it inside the Davis-Bacon Act and said, Section 3145 of this title applies to contractors and subcontractors referred to in Section 3145, who are engaged in the performance of contracts subject to this chapter, this chapter meaning the Davis-Bacon Act. [00:48:24] Speaker 02: I don't see anything in the words. [00:48:26] Speaker 02: Many times Congress passes new statutes, and they are then [00:48:30] Speaker 02: applicable to previous statutes. [00:48:33] Speaker 02: There's nothing in the words of this that says it only applies to kickbacks, is there? [00:48:37] Speaker 06: I don't think that there was any substantive change intended when it was recodified or the two statutes were put together. [00:48:46] Speaker 06: You have the Davis-Bacon Act and you have the Copeland Act. [00:48:48] Speaker 06: The Department of Labor certainly, I mean it cites to that particular provision, but does not elaborate. [00:48:53] Speaker 06: The source of its authority that it relies upon in this case is the reorganization plan. [00:48:57] Speaker 02: I'm not sure how much they need to say in the amount of briefing space we give both of you. [00:49:05] Speaker 02: But citing to it seems enough. [00:49:07] Speaker 02: I don't see why it's a problem. [00:49:10] Speaker 06: Well, I think it's unfair when the district raises this argument. [00:49:12] Speaker 02: You responded to it in your brief. [00:49:14] Speaker 02: It's not like you didn't respond to it. [00:49:16] Speaker 02: You responded to this argument. [00:49:18] Speaker 02: It's not unfair. [00:49:18] Speaker 02: In what sense is it unfair? [00:49:21] Speaker 06: I mean, if I recall, the argument wasn't really developed until the reply brief. [00:49:27] Speaker 06: What I recall, the opening brief was a very short couple sentences maybe at most. [00:49:31] Speaker 02: But what is your response other than that it's part of the Copeland Act, which I knew you were going to say, and I must have known that because I think you said it in your [00:49:39] Speaker 06: I would like the opportunity to look back at the legislative history of how it was ultimately codified. [00:49:47] Speaker 02: I think that's fair, and if you want to submit something by the end of next week, that'll be fine. [00:49:52] Speaker 06: Okay, I would appreciate that. [00:49:56] Speaker 06: The Portland Act or the reorganization plan, we don't think the reorganization plan itself is a source of authority. [00:50:03] Speaker 06: It's executive. [00:50:05] Speaker 06: It's not legislative action. [00:50:06] Speaker 06: It didn't authorize the creation of any new function. [00:50:09] Speaker 02: What about our own opinion in that copper case? [00:50:13] Speaker 06: Yeah, the copper case, it doesn't address the issue here. [00:50:20] Speaker 06: I mean, it simply, in our view, said that, well, the contracting agency had the authority to do what the Department of Labor did, so it's OK for the Department of Labor to do it. [00:50:30] Speaker 06: But that doesn't address the question of whether there was this congressional delegation of authority to enact rules carrying the force of law. [00:50:37] Speaker 06: And in fact, the plan, in our view, could not have [00:50:40] Speaker 06: created such authority because the Reorganization Act did not permit that. [00:50:45] Speaker 06: It merely allowed the transfer or coordination of agency functions, not the creation of any new power or function. [00:50:52] Speaker 06: And in fact, the plan itself merely coordinated. [00:50:54] Speaker 06: It did not transfer from the contracting agencies the administrative and enforcement responsibility under the Act. [00:51:01] Speaker 06: We also have as a separate ground the fact that there are multiple agencies involved in the administration and enforcement of the Act. [00:51:08] Speaker 06: That's the type of situation in which Chevron deference does not apply, where you have the shared responsibility. [00:51:13] Speaker 02: There's only multiple agencies with respect to enforcement. [00:51:16] Speaker 02: All those three cases, in fact, all the precedents from the Board are all cases of other agencies going to the Board and asking to overturn the Department of Labor's interpretation of the Davis-Bacon Act, right? [00:51:31] Speaker 02: So your view is that the agencies could have just ignored the Department of Labor and in fact those cases just shouldn't have been there in the first place. [00:51:44] Speaker 02: Is that right? [00:51:45] Speaker 06: No, no. [00:51:47] Speaker 06: It's a separate question of whether that ultimate decision by the Department of Labor, when it gets to court and the court reviews that decision, whether Chevron deference applies. [00:51:55] Speaker 06: I mean, that's a separate question. [00:51:57] Speaker 06: And because the contracting agencies have authority, because the Department of Justice itself said that it has the ability to interpret the act contrary to… Do they have the authority? [00:52:09] Speaker 02: Why go to the board at all, then, if they can just ignore the board? [00:52:13] Speaker 02: Can they ignore the board? [00:52:14] Speaker 02: Can the agencies ignore the board? [00:52:17] Speaker 06: The federal agencies in those cases? [00:52:20] Speaker 06: Yeah. [00:52:22] Speaker 06: I mean, that's a matter for internal executive administration. [00:52:26] Speaker 06: It's not, in our view, a question of Congress. [00:52:29] Speaker 02: Well, it looks like a bunch of precedents in which the agencies think the opposite of what you think, namely that they have to go to the board. [00:52:35] Speaker 02: What about your own concession that the DOL clearly has jurisdiction here? [00:52:44] Speaker 02: Did you make a concession below in a letter to the agency saying that we think that this is your letter of May 27, 2009, to the Department of Labor, wage and hour administrator, the terms public buildings and public works are not defined in the Act, Davis-Bacon Act, but are defined in regulations of the Department of Labor as follows. [00:53:08] Speaker 02: Although this definition speaks of a federal agency, it is clear that it also applies to the district. [00:53:15] Speaker 06: That's something that the deputy mayor wrote in a letter. [00:53:19] Speaker 06: It is, you know, to the extent that the terms or the definition of the regulation might apply and the district might explain why that applies. [00:53:29] Speaker 02: It doesn't say might apply. [00:53:30] Speaker 02: I mean, it says that it's clear it also applies to the district. [00:53:33] Speaker 02: You had a different view of the meaning of the regulation, but you agreed that the regulation applied to the district. [00:53:40] Speaker 06: Yeah, but that does – it's a separate – well, I – no, I mean, I disagree that we were conceding, or some later proceeding, the issue of Chevron deficit. [00:53:50] Speaker 02: Did you challenge the authority of the Department of Labor to rule on this question and to make a final ruling on the question? [00:53:56] Speaker 06: we were willing to be bound by the department's decision, subject to judicial review. [00:54:05] Speaker 06: And of course, at the judicial review stage, that's when the issue of Chevron deference arises. [00:54:09] Speaker 06: It doesn't arise before then. [00:54:11] Speaker 02: Well, if the agency has authority to adjudicate, normally under Mead, we say that's Chevron deference. [00:54:16] Speaker 02: If the agency has the authority to make adjudications in which it interprets the meaning of the statute and regulations, [00:54:23] Speaker 02: That's sort of classic. [00:54:24] Speaker 02: That and regulations themselves are sort of the classic situations where we give, Sheriff Ronda. [00:54:31] Speaker 06: Right, but the premise there is that the Congress has delegated or implicitly delegated the authority to make rules carrying the force of law. [00:54:38] Speaker 06: And simply because there's a procedure for the internal administration of the government, that's something different from rules carrying the force of law. [00:54:47] Speaker 06: I would also point out that the regulation merely parrots the case law. [00:54:50] Speaker 06: It comes from [00:54:51] Speaker 06: The department's regulation comes from the Irwin decision. [00:54:54] Speaker 02: Well, I looked at Irwin and it doesn't look like it's the same at all. [00:54:57] Speaker 02: It looks like they're relying in part on analogy to the NRA, not to the decision. [00:55:04] Speaker 02: But I do have another. [00:55:05] Speaker 02: What about all our cases where we've given Chevron deference to the NRA? [00:55:09] Speaker 02: Department of Labor's interpretation. [00:55:11] Speaker 02: What do we do with those? [00:55:12] Speaker 06: Well, I think those cases are distinguishable first because they involve other subject matters like the Copeland Act or the related provision in the Davis-Bacon Act where the payments can't, the contractor can't, has to make the payments without subsequent deduction or rebate or they involve [00:55:31] Speaker 06: the Secretary of Labor's setting of the wages – the wage rates. [00:55:36] Speaker 06: I mean, those are subject matters upon which the Department of Labor does have authority, but does not have wholesale authority to make rules carrying the force of law under the act, and particularly with respect to the coverage of the act and how the term public work is interpreted. [00:55:54] Speaker 06: I don't think the issue of Chevron deference was even contested in those cases, I would point out, and I think binding precedent. [00:56:00] Speaker 06: Do you know that to be the case? [00:56:03] Speaker 02: Because all of our decisions – these three decisions of our court all rely on Chevron expressly. [00:56:09] Speaker 06: Yeah, I should have said the applicability of the Chevron test was not an issue or specifically contested from what I recall of reading those decisions. [00:56:21] Speaker 06: That is, whether Congress had delegated [00:56:24] Speaker 06: authority to enact rules carrying the force of law. [00:56:26] Speaker 06: And maybe that's because the subject matter was different. [00:56:30] Speaker 06: As I indicated, it involved the Secretary of Labor setting the wage rates. [00:56:34] Speaker 06: That is something we're not disputing. [00:56:36] Speaker 02: Well, Mystic involved the words other bona fide affringe benefits, which are words in the Davis-Bacon Act in a very similar place. [00:56:44] Speaker 06: Well, that is part of the wages. [00:56:47] Speaker 06: In fact, the fringe benefits are included in the definition of wages. [00:56:51] Speaker 06: So that is part of the Department of Labor's wage setting, wage rate setting authority. [00:56:58] Speaker 06: This is a different type of authority which the Department of Labor is exercising here. [00:57:02] Speaker 06: It's the coverage of the Act. [00:57:03] Speaker 06: It's determining what project constitutes public work under the Act. [00:57:06] Speaker 06: We submit there has been no congressional delegation of authority with respect to that. [00:57:11] Speaker 06: And there is also the point that the regulation defining public work can't be read any other way than excluding the district from its definition of public work. [00:57:22] Speaker 06: It only applies to federal agencies. [00:57:23] Speaker 06: And it may be true that we allow the Department of Labor to adjudicate it, but when we get to court, [00:57:29] Speaker 06: And, you know, we always reserve the right to judicial review. [00:57:32] Speaker 06: When we get to court, we have the right, I think, to argue then that Chevron deference shouldn't – that the test itself simply doesn't apply, and it's for the reasons that I gave. [00:57:43] Speaker 02: My colleagues have any further questions? [00:57:46] Speaker 06: And I know Mr. Baskin is available to support us with questions as well. [00:57:50] Speaker 02: Thank you. [00:57:53] Speaker 02: We just went 22 minutes over. [00:57:55] Speaker 02: Can there be anything that he didn't say? [00:57:58] Speaker 07: Well, I would like to correct what I think is a fundamental misconception about the city center project. [00:58:02] Speaker 07: I've heard it described as vast, massive, unique. [00:58:05] Speaker 07: It's none of those things. [00:58:06] Speaker 07: It's a project not unlike many others that have been built under land disposition agreements in which the district disposes of property that by statute has to be property no longer serving a public purpose. [00:58:20] Speaker 07: If you go over to city center and you eat at the fine restaurants and shop at the fine stores, it's clear this is not something that Congress intended when it passed a law for the disposition of spending of public funds to build bridges, dams, or military housing, or veterans clinics. [00:58:38] Speaker 07: None of those things. [00:58:39] Speaker 07: There has never been a case like this in which the act has been extended this far. [00:58:44] Speaker 07: It has been stretched. [00:58:45] Speaker 07: But you are breaking it. [00:58:47] Speaker 07: Don't kid yourselves. [00:58:48] Speaker 07: This is the most radical expansion of the act that has ever occurred if you allow it to affect this project. [00:58:54] Speaker 07: And there are many projects. [00:58:56] Speaker 07: We cited a number in our briefs in which the district has disposed of land. [00:59:00] Speaker 07: I heard a reference, isn't this owned by the district? [00:59:04] Speaker 07: A 99-year lease under District of Columbia law is the equivalent of a feasible disposition. [00:59:08] Speaker 07: So the district is not, for all practical purposes, owning this land. [00:59:12] Speaker 07: It's not a dime of public money. [00:59:14] Speaker 02: I tell you, that's not how people are going to feel in the 90th year. [00:59:18] Speaker 02: There are a number of places in the area around here where there were 99-year leases, and now suddenly people are suddenly coming to grips with the fact that they're no longer going to own their condominium, their co-op, et cetera, right? [00:59:30] Speaker 07: But very entirely speculative of what's going to happen. [00:59:33] Speaker 07: We don't know if the buildings are still going to be there in 99 years. [00:59:35] Speaker 07: And so to make assumptions about what does Davis Bacon, which is supposed to be about the government spending money to build things, apply for a public purpose, a public works. [00:59:47] Speaker 07: Is it supposed to be, did Congress intend to use it [00:59:50] Speaker 07: to apply to a Louis Vuitton or a nice restaurant that won't name more names but these are entirely I think the district court referred to at Chipotle. [01:00:01] Speaker 07: I mean it does not make sense and we ask you to use your common sense. [01:00:06] Speaker 02: Thank you. [01:00:07] Speaker 02: Okay, the government. [01:00:11] Speaker 02: Well, since the other side went considerably over, we'll give you five minutes. [01:00:14] Speaker 03: Thank you, Your Honor. [01:00:23] Speaker 03: much less the Hard Rock Mining Act, which are two instances where the government indisputably owns the property and maintains very detailed control over the way in which it is developed. [01:00:41] Speaker 03: And for the case of the Hard Rock Mining Act, [01:00:48] Speaker 03: Since the enactment of Davis-Bacon, since the Mineral Leasing Act, 95 years, I do not believe Davis-Bacon has ever been thought to apply to those. [01:01:00] Speaker 03: We're talking of thousands of leases and other transactions, thousands. [01:01:07] Speaker 05: Your Honor, I apologize. [01:01:10] Speaker 03: I'm really not in a position to... Well, it was cited in your adversary's brief as what your theory would take the world to. [01:01:24] Speaker 03: And you seem to resist the thought of contemplating the implications of your reading, but why not? [01:01:32] Speaker 05: Well, I would hope that we would have a chance to address that. [01:01:41] Speaker 05: You had a chance. [01:01:43] Speaker 03: That's what's called a reply brief. [01:01:44] Speaker 05: Well, yes, Your Honor, but of course, our words here were very limited, and we had to pick and choose what we would address. [01:01:53] Speaker 03: Well, now you have. [01:01:55] Speaker 03: Mr. Garland's given you another 22 minutes. [01:02:02] Speaker 03: So go hold back. [01:02:04] Speaker 03: Have you got any? [01:02:05] Speaker 08: Presumably this was considered when you appealed that the interests of the federal government are going to be on both sides of this issue. [01:02:14] Speaker 08: Yes, certainly. [01:02:15] Speaker 08: So you presumably have an answer to does this act apply to all these federal projects under various [01:02:24] Speaker 08: of statutes that give federal government power to dispose of property. [01:02:29] Speaker 03: And if not, why not? [01:02:35] Speaker 03: The things you point to, a public purpose done under the authority of the government, no government funds, government property, everything is present in those cases. [01:02:48] Speaker 05: I'm reluctant to address that. [01:02:53] Speaker 05: Just as Mr. Schieffeli was reluctant to address the 3145 issue without an opportunity to do so in writing, because it was not the focus of our argument or the ARB decision [01:03:17] Speaker 03: Well, it's fine by me certainly, but you're given an opportunity. [01:03:21] Speaker 03: Actually, Mr. Chippewas, respond on that. [01:03:25] Speaker 02: Looks like we're going to get some more briefing here. [01:03:26] Speaker 02: All right. [01:03:28] Speaker 02: Letters, letters, letters, letters, letters, letters, letters. [01:03:32] Speaker 02: 28 jailers, I think we call them. [01:03:36] Speaker 02: When will you be able to do this? [01:03:37] Speaker 02: Let's say I gave Mr. Schifferle until the end of next week for his. [01:03:41] Speaker 02: I could do that again for you, but then Mr. Schifferle needs another week probably to respond himself. [01:03:47] Speaker 02: Does that seem fair to the parties? [01:03:49] Speaker 05: Well, will we be addressing both? [01:03:53] Speaker 02: You can address the oil leasing question and the mining question. [01:03:57] Speaker 02: In your defense, the Hard Rock Mining Act was not mentioned in the brief, but the oil leasing was, so you guys should get right on it. [01:04:08] Speaker 05: oil and gas and hard rock mining oil and gas and hard rock mining yes your honor any other questions you have something more you want to say yes I had a number of points most of them have been addressed in the colloquy between the court and council and in our briefs but there are a number of things that I would want to reiterate first I would point out that [01:04:35] Speaker 05: The district did not dispose of this property, as Your Honor pointed out. [01:04:40] Speaker 05: This was a lease, and DC owns this property, and it will revert to DC at the end of the lease. [01:04:48] Speaker 05: And the plaintiffs are obligated, CCDC is obligated to maintain this in first-class conditions. [01:04:56] Speaker 05: So this is not a case where the... What's that relevant to? [01:05:01] Speaker 05: Well, it's relevant to Mr. Baskin's point that this is – that basically D.C. [01:05:10] Speaker 05: has given this away, that it's not the case. [01:05:13] Speaker 05: It's – this is – But does that affect our – It remains government property, and it's – it was – it's government property on which – Does that affect our interpretation of public work? [01:05:23] Speaker 08: Is that what you're saying? [01:05:24] Speaker 08: Yeah, it does. [01:05:27] Speaker 08: or how is it relevant? [01:05:28] Speaker 08: I'm trying to figure out how what you're saying is relevant. [01:05:30] Speaker 03: Before you get too dug in on that, remember, that's clearly applicable under the Minimum Leasing Act, and I think it's also applicable under the Under-Operating Act. [01:05:44] Speaker 04: Well, I don't really, again, I sort of, I'm not, I feel. [01:05:48] Speaker 02: All right, I think we should let you go and contemplate these questions. [01:05:52] Speaker 02: I think that you can see that this is an important question to the panel, and I think [01:05:57] Speaker 02: which is the United States actually making this decision about this suggests that you need to go a little higher up in the hierarchy, make sure that the United States actually... Well, to appeal, presumably the Solicitor General had to approve, so I'm presuming this was already considered. [01:06:13] Speaker 05: The Solicitor General certainly didn't authorize the appeal. [01:06:16] Speaker 02: Well, then you may want to address with the Solicitor General, or however the hierarchy now works, what the position of the government would be with respect to [01:06:26] Speaker 02: there's a place to limit it from the mineral and hard rock leasing. [01:06:29] Speaker 05: That's right. [01:06:30] Speaker 05: I will do so, Your Honor. [01:06:32] Speaker 05: There are just a couple of points that I would like to make in reply. [01:06:37] Speaker 05: It's extremely incongruous for the district to be arguing that this is not, that it's using public property here for what is primarily a private benefit or private purpose. [01:06:50] Speaker 05: That really sort of, it doesn't, [01:06:56] Speaker 05: It's not what one expects of a government authority. [01:07:05] Speaker 01: What do you mean by that? [01:07:09] Speaker 05: For the district to be saying that it's using public land primarily for private purposes and private benefit, that really seems to be [01:07:22] Speaker 05: unusual for a government authority. [01:07:27] Speaker 03: The district believes that a prosperous downtown is in the district's interest. [01:07:32] Speaker 05: Right, but that of course, that plays into the notion of a public work and why there is a public benefit here. [01:07:38] Speaker 03: Yes, it also involves the concept of public work which is unlimited, unbounded. [01:07:47] Speaker 08: It is common, just on your point, for mayors and the like to say that they want to facilitate private development to make the city a better place. [01:07:58] Speaker 05: Right, that is facilitated, but that is occurring under the aegis of public authority, and that is why there is direct authority within the meaning of Davis-Bacon here. [01:08:08] Speaker 08: That does go to Judge Williams' point. [01:08:11] Speaker 08: I guess it cuts both ways. [01:08:12] Speaker 05: Yes. [01:08:15] Speaker 05: Also, it's clear that the Department of Labor has primary authority under the Davis-Bacon – to regulate under the Davis-Bacon Act, both under 30 – 40 U.S.C. [01:08:25] Speaker 05: 3145, which we did cite a couple of times in our brief, and also under Reorganization Plan number 14 of 1950. [01:08:37] Speaker 05: And the cases, as Judge Garland pointed out, the cases where multiple agencies were involved are readily distinguishable because they did not have primary authority. [01:08:52] Speaker 05: Also, the public benefit here is not incidental. [01:09:00] Speaker 05: It's at the very heart of this project. [01:09:07] Speaker 05: I think that, well, in closing, also the city of Arlington establishes that the fact that something that is a so-called jurisdictional question within the meaning of chevron doesn't mean that it's outside of chevron. [01:09:23] Speaker 05: Even questions of authority are covered within the chevron doctrine. [01:09:28] Speaker 05: So if there are no further questions, I'd urge the Court to reverse and we will address the questions that the Court has raised. [01:09:37] Speaker 02: I think we'll issue an order with these schedules so everybody will have it, hopefully by the end of the day. [01:09:43] Speaker 02: Thank you both very much. [01:09:44] Speaker 02: Very good and interesting argument.