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B.W. Electric, Inc. v. Gilliam-Johnson

Superior Court of Delaware

April 4, 2019

B.W. ELECTRIC, INC., a Delaware corporation, Petitioner,
v.
PATRICE GILLIAM-JOHNSON, Delaware Secretary of Labor, DANIEL NELSON and the DELAWARE DEPT. OF LABOR, Respondents.

          Submitted: January 2, 2019

         Upon Petitioner's Petition in Certiorari Reversed and Remanded.

          Daniel F. McAllister, Esquire of Baird Mandalas Brockstedt, LLC, Wilmington, Delaware; attorney for Petitioner.

          Oliver J. Cleary, Esquire, Deputy Attorney General, Department of Justice, Wilmington, Delaware; attorney for Respondents.

          OPINION AND ORDER

          William L. Witham. Jr. Resident Judge

         INTRODUCTION

         The Petitioner, B.W. Electric, Inc., filed a Petition in Certiorari in this matter, challenging the Respondents' - The Delaware Department of Labor (hereinafter "Department"), Daniel Nelson (hereinafter "Nelson"), and the then Secretary of the Department, Patrice Gilliam-Johnson (hereinafter "Secretary") - application of Delaware's Prevailing Law for lacking legal authority, legal error, and unconstitutionality. The matter concerns the Petitioner's alleged violations relating to the misclassification of workers under the Delaware Prevailing Wage Law and the Department's conduct in response to the Petitioner's appeal.

         After considering the parties' arguments and record, the Court REVERSES AND REMANDS the Secretary's decision.

         FACTUAL AND PROCEDURAL BACKGROUND

         A. Delaware's Prevailing Wage Law and Regulations

         Delaware's Prevailing Wage Law (hereinafter, "PWL"), [1] as implemented by Delaware's Prevailing Wage Regulations (hereinafter "PWR") tasks the Department with establishing and enforcing payment of prevailing wages for various classes of laborers and mechanics who are employed as part of certain "public works" projects.[2] The applicable definitions for "laborer" and "electrician" are set forth in Delaware's Prevailing Wage Law Booklet.[3]

         B. The Department's Investigation and Secretary's Final Decision

         On October 24, 2017, Respondent Nelson, a Labor Enforcement Officer II for the Department's Office of Labor Law Enforcement (hereinafter "OLLE"), informed the Petitioner that - in addition to labor laws not part of the certiorari petition - it had violated Delaware PWR 7.1.1.3.3[4] by failing to maintain proper daily logs for its employees as part of the "US 301 Levels Road to Summit Bridge Road [C]onstruction [P]roject."[5]

         Respondent Nelson also accused the Petitioner of misclassifying certain employees in violation of Delaware PWR 3.1.1 and 29 Del. C. § 6960.[6] He stated that his determination was based upon (1) the tasks reported in the Department of Transportation's Inspector Daily reports; (2) witness impact statements; and (3) data gathered during five on-site visits conducted by the Department.[7]

         On November 7, 2017, and in response to the determination, the Petitioner filed a timely appeal with the Secretary.[8] The appeal stated that the Petitioner was appealing Respondent Nelson's decision in accordance with instructions set forth in the determination and while it stated grounds for the appeal, the Petitioner failed to provide evidence supporting its assertions.

         On December 15, 2017, the Secretary dismissed the Petitioner's appeal due to a lack of evidence that demonstrated abuse of discretion by Respondent Nelson.[9] The Secretary further stated "[s]ince the language of [section] 7.1.3 is clear, under the plain language of the regulation, no hearing may be held regarding OLLE's alleged abuse of discretion."[10]

         C. The Petitioner's Certiorari Petition

         On January 9, 2018, the Petitioner submitted to this Court its petition seeking a writ of certiorari and declaratory judgment.[11] The Respondents filed a subsequent motion to dismiss pursuant to Superior Court Civil Rule 12(b)(6). The Court granted, in part, the Respondents' motion and dismissed several of the Petitioner's claims.[12]As a result of the Court's decision granting the Respondents' motion to dismiss in part, the remaining claims pertaining to the Petitioner's writ of certiorari are presently before the Court:

(1) Because the Delaware Superior Court reviews the Secretary's determination on the record, the Secretary's decision also denied the Petitioner any right of further appeal because the Petitioner was not afforded the opportunity to create a record from which to appeal. As such, the Secretary's decision to dismiss the Petitioner's appeal of the OLLE's determination was unlawful and irregular, and should be overturned so that the Petitioner may submit evidence to support the Petitioner's appeal of the OLLE's determination; and
(2) Because the Respondents did not rely upon substantial relevant evidence, abused their discretion, committed errors of law, and acted arbitrarily and capriciously, the Secretary's decision to dismiss the Petitioner's appeal should be reversed.[13]

         STANDARD OF REVIEW

         A writ of certiorari is not a substitute for a direct appeal under a statute or regulation nor is it the functional equivalent of an appeal."[14] Its purpose "is to permit a higher court to review the conduct of a lower tribunal of record."[15]

         By its nature, the extent of the record appropriate for review on a writ of certiorari is also limited: "A certiorari proceeding differs fundamentally from an appeal in that the latter brings the case up on its merits while the ... (former) brings up the record only so that the reviewing court can merely look at the regularity of the proceedings."[16] Thus, the Court does not consider the case below "on its merits" or "substitute its own judgment for [that] of the inferior tribunal."[17] The proper record for review is "limited to the complaint initiating the proceeding, the answer or response (if required), and the docket entries."[18] Any "evidence received in the inferior court is not part of the record to be reviewed."[19]

         The "threshold qualifications for a Certiorari review that must be met before the Court considers the review are that the judgment below is final, and that there must be no other available basis for review."[20] The "burden of persuasion rests upon the party attempting to show that the Board's decision was arbitrary and unreasonable."[21] The reviewing court is then limited to determining based on that limited record whether the lower tribunal: "(I) exceeded its jurisdiction;" (ii) "proceeded illegally or manifestly contrary to law"; or (iii) "proceeded irregularly."[22] Reversible procedural irregularity includes a tribunal's failure to create an "adequate record" for judicial review.[23] Under a writ of certiorari, this Court has the power to quash or affirm the proceedings and to remand."[24] However, the Court shall uphold the decision unless the Petitioner can demonstrate that the decision "was arbitrary and unreasonable" on its face.[25]

         DISCUSSION

         The classification determination made by OLLE shall be reviewable by the Secretary and shall be reversed only upon a finding that the OLLE abused its discretion.[26] An "abuse of discretion" may only be found where the decision exceeds the bounds of reason or where rules of law or practice have been ignored so as to produce an injustice.[27]

         A. The Parties' Contentions

         The Petitioner's argument, on certiorari review, appears to be three pronged. First, the Petitioner argues that the Department proceeded irregularly by failing to create an adequate record which would be subject to review.[28] Second, the Petitioner argues that the Department committed an error of law in its determination, without factual basis, that the laborers in question, were misclassified as laborers.[29] Finally, the Petitioner argues that the Secretary committed an error of law by failing to review Respondent Nelson's determination pursuant to the PWR and thus, failed to provide the Petitioner with an opportunity to be heard.[30]

         The Respondents, in opposition, counter that Respondent Nelson's determination letter was an adequate record, and that the investigation, and facts learned through that investigation, relied upon by the Department were disclosed in Respondent Nelson's determination letter.[31] Second, the Respondents assert that the Department's interpretation of the classification booklet, in which it used to draw its conclusion that the electricians had been misclassified by the Petitioner, was not erroneous and properly applied.[32] And finally, the Respondents assert that the Secretary did not act irregularly, and acted pursuant to the PWR requirements for classification determinations.[33]

         B. The Petitioner's Writ of Certiorari is Appropriate

         As a preliminary matter, because the Secretary's decision is final and unappealable, [34] a writ of certiorari is the only basis in which the Petitioner can seek relief. Therefore, this Court must conduct a limited certiorari review of the record to determine whether Respondent Nelson and/or ...


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