Krol et al v. Arch Insurance Company

Filing 38

OPINION AND ORDER re: 24 MOTION to Dismiss filed by Arch Insurance Company, 15 MOTION to Certify Class Pursuant to Fed. R. Civ. P. 23 filed by Henryk Krol. For the reasons set forth above, the Court finds that Krol cannot b ring a section 3 claim because he does not plead that (1) the contracting agency or the DOL made an administrative determination that his employer, Fox, failed to pay prevailing wages, and (2) any withheld funds are insufficient to reimburse him. Th e Court enters judgment on the pleadings in favor of Defendants, but dismisses the case without prejudice, since Krol could conceivably reinstitute this suit once an appropriate administrative determination has been made. Accordingly, IT IS HERE BY ORDERED THAT: (1) Arch's motion is DEEMED to be brought under Rule 12(c) as a motion for judgment on the pleadings and is, so deemed, GRANTED; and (2) Krol's class certification motion is DENIED AS MOOT. The Clerk of the Court is respectfully directed to terminate the motions pending at Doc. Nos. 15 and 24 and to close this case. (Signed by Judge Richard J. Sullivan on 9/11/2014) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
_____________________
No. 13-cv-449 (RJS)
_____________________

UNITED STATES OF AMERICA
ex rel.
HENRYK KROL,
on behalf of himself and all others similarly situated,
Plaintiffs,
VERSUS

ARCH INSURANCE COMPANY,
Defendant.
_____________________
OPINION AND ORDER
September 11, 2014
_____________________
RICHARD J. SULLIVAN, District Judge:
Plaintiff Henryk Krol brings this
putative class action against Defendant Arch
Insurance Company (“Arch”), the surety of
a payment bond issued under the Miller Act,
to recover wages allegedly due under a
contract covered by the Davis-Bacon Act.
Now before the Court is Arch’s motion to
dismiss pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure, which the
Court deems to be a motion for judgment on
the pleadings pursuant to Rule 12(c).

For the reasons discussed below, the
Court finds that Krol cannot maintain his
claim unless (1) there has been an
administrative determination that his
employer failed to pay the prevailing wage
rates required by the Davis-Bacon Act, and
(2) any funds administratively withheld by
the government are insufficient to reimburse
him. Because Krol’s claim does not plead
these elements, the Court grants Arch’s
motion.

I. BACKGROUND

$24.06 per hour. (Id. ¶ 21.) Fox also failed
to pay other members of the putative class
the prevailing wages and benefits they were
due under the classifications of labor they
performed. (Id. ¶ 22.)

A. Facts
This case arises out of a public works
contract (the “Contract”) between the United
States General Services Administration (the
“GSA”) and Fox Industries Ltd. (“Fox”) for
Fox to perform work on the Jacob K. Javits
Federal Building in Manhattan (the
“Project”). 1 (Compl. ¶ 1.) The Contract
called for Fox to perform construction work
on the Project, including “bricklaying,
masonry,
stone
setting
and
other
construction trades.” (Id. ¶ 14.) Pursuant to
the Davis-Bacon Act, 40 U.S.C. §§ 3141 et
seq., the Contract contained a provision
requiring Fox, and any subcontractors of
Fox, to pay laborers who worked on the
Project wages and benefits at the prevailing
rates for the type of labor performed. (Id.
¶¶ 16–17.)
In addition, the Contract
included a schedule of prevailing rates (the
“Prevailing Rate Schedule”) for various job
classifications. (Id. ¶ 17.) As required by
the Miller Act, 40 U.S.C. §§ 3131 et seq.,
Fox obtained a payment bond, issued by
Arch, to guarantee payment to laborers and
suppliers. (Compl. ¶¶ 6, 18.)

B. Procedural History
On January 18, 2013, Krol filed this
action, on behalf of himself and a putative
class of all laborers who worked for Fox on
the Project, to recover prevailing wages due
under the Davis-Bacon Act on the Miller
Act bond issued by Arch. (Compl. ¶ 1.)
Arch filed its answer on February 21, 2013.
(Doc. No. 3.) On October 17, 2013, Krol
filed a motion to certify the putative class
pursuant to Rule 23 of the Federal Rules of
Civil Procedure. (Doc. No. 15.) Arch filed
an opposition to Krol’s motion on
November 25, 2013. (Doc. No. 22.) On
December 30, 2013, while the class
certification was still pending, Arch filed the
instant motion, arguing that Krol’s claim
cannot
be
maintained
absent
an
administrative determination that a DavisBacon Act violation occurred. 2 (Doc. No.
24.) The motion was fully briefed on
February 17, 2014. (Doc. No. 35.)

Plaintiff Krol performed labor at the
Project as a bricklayer from July 2012 to
August 2012. (Compl. ¶ 20.) He was paid
wages between approximately $46.00 per
hour and $74.00 per hour, and was not paid
supplemental benefits. (Id. ¶¶ 20, 21.) At
the time, the prevailing wage rate for
bricklayers in New York County was $51.97
per hour and the prevailing benefits rate was

II. LEGAL STANDARD
Although Arch’s motion is styled as a
motion to dismiss under Rule 12(b)(6), a
defendant may not make a motion under
Rule 12(b) after it has filed its responsive
pleading. Fed. R. Civ. P. 12(b). A postanswer motion arguing that a complaint fails
to state a claim must be brought, instead, as
a motion for judgment on the pleadings

1

The facts are taken from the Complaint (Doc. No. 1
(“Compl.”)), which are assumed to be true for
purposes of this motion. In deciding the motion, the
Court has also considered Arch’s supporting
memorandum (Doc. No. 30 (“Mem.”)), Krol’s
opposition (Doc. No. 31 (“Opp.”)), and Arch’s reply
(Doc. No. 35 (“Rep.”)).

2
Following the pre-motion conference on Arch’s
Rule 12 motion, the Court adjourned sine die the
deadline for Krol’s reply brief in support of the Rule
23 motion. (Doc. No. 23.)

2

under Rule 12(c). Patel v. Contemporary
Classics of Beverly Hills, 259 F.3d 123, 126
(2d Cir. 2001). Accordingly, the Court
deems Arch’s motion to be brought pursuant
to Rule 12(c).

the prevailing wages and benefits under
those classifications. (Decl. of George J.
Curis, dated Dec. 23, 2013, Doc. No. 29
(“Curis Decl.”) ¶¶ 11–14.)
Thus, the
principal substantive dispute in this case is
whether Krol was properly classified.

Courts evaluate a motion for judgment
on the pleadings pursuant to Rule 12(c)
under the same standard as a motion for
failure to state a claim pursuant to Rule
12(b)(6). See Nicholas v. Goord, 430 F.3d
652, 657 n.8 (2d Cir. 2005). To survive
such a motion, a complaint must “provide
the grounds upon which [the] claim rests.”
ATSI Commc’ns, Inc. v. Shaar Fund, Ltd.,
493 F.3d 87, 98 (2d Cir. 2007). Plaintiffs
must allege “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570
(2007). “A claim has facial plausibility
when the plaintiff pleads factual content that
allows the court to draw the reasonable
inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). In reviewing a Rule
12(b)(6) motion to dismiss, a court must
accept as true all factual allegations in the
complaint and draw all reasonable
inferences in favor of the plaintiff. ATSI
Commc’ns, 493 F.3d at 98. However, that
tenet “is inapplicable to legal conclusions.”
Iqbal, 556 U.S. at 678. Thus, a pleading that
only offers “labels and conclusions” or “a
formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550
U.S. at 555. If the plaintiff “ha[s] not
nudged [its] claims across the line from
conceivable to plausible, [its] complaint
must be dismissed.” Id. at 570.

That substantive question is not posed by
the motion before the Court, however.
Instead, the issue before the Court is
whether Krol may maintain this claim at all,
unless (1) the U.S. Department of Labor (the
“DOL”) or the contracting federal agency –
here, the GSA – has made an administrative
determination that Krol’s employer – here,
Fox – failed to pay prevailing wages due
under the Davis-Bacon Act, and (2) any
funds withheld from the employer by the
federal government are insufficient to pay
Krol the owed wages. This appears to be an
issue of first impression in the Second
Circuit. Arch argues that because the DavisBacon Act is enforced administratively, the
above requirements are prerequisites to suit.
Without disputing this characterization of
the Davis-Bacon Act, Krol argues that
because his suit is brought under the Miller
Act, any limitations on Davis-Bacon Act
suits are inapplicable.
For the reasons discussed below, the
Court finds that Krol’s claim must comply
with section 3 of the Davis-Bacon Act, 40
U.S.C. § 3144(a)(2), which permits laborers
to bring an action on a Miller Act bond only
if (1) the DOL or the contracting agency has
made an administrative determination that a
prevailing wage violation occurred, and (2)
any payments withheld by the federal
government are insufficient to make the
laborer whole. Because Krol has failed to
allege facts to establish these elements, his
claim fails as a matter of law.

III. DISCUSSION
Arch does not dispute that Fox did not
pay Krol the prevailing wages and benefits
for a “bricklayer.” Instead, it argues that
Krol was properly classified as a “laborer”
and “cement mason” and that he was paid
3

contractors “concerning payment of
prevailing wage rates, overtime pay, or
proper classification” are resolved, in the
first instance, by the Administrator of the
Wage and Hour Division of the DOL’s
Employment
Standard
Administration
(“Administrator”), with a right of appeal to
an
administrative
law
judge
or
administrative review board. Id. §§ 5.11(a)–
(d). Contracting agencies and the DOL are
jointly responsible for ensuring that
prevailing wages are paid. Contracting
agencies “shall cause such investigations to
be made as may be necessary to assure
compliance with [the Davis-Bacon Act],” id.
§ 5.6(a)(3), and the DOL may conduct its
own investigations, id. § 5.6(b).

A. Davis-Bacon Act
Congress passed the Davis-Bacon Act
during the Great Depression to ensure that
contractors bidding on federal contracts
could not submit their bids based on belowmarket labor costs and thereby drive down
local wages. See Carrion v. Agfa Const.,
Inc., 720 F.3d 382, 384 n.4 (2d Cir. 2013);
Univs. Research Ass’n, Inc. v. Coutu, 450
U.S. 754, 773 (1981). The Act requires
federal contracts “in excess of $2,000, to
which the Federal Government . . . is a
party, for construction, alteration, or repair
. . . of public buildings and public works of
the Government” to contain a provision
requiring contractors and subcontractors to
pay their laborers and mechanics minimum
wages that are “based on the wages the
Secretary of Labor determines to be
prevailing for the corresponding classes of
laborers and mechanics employed on
projects of a character similar to the contract
work in [the relevant locality].” 40 U.S.C.
§§ 3142(a)–(b). The Act further requires
covered contracts to include a provision
permitting the federal agency to withhold
accrued payments from noncompliant
contractors and subcontractors and to use
those withheld payments to pay laborers and
mechanics the wages they are due. Id.
§ 3142(c)(3).
The Comptroller General
must pay laborers directly from such
withheld funds. Id. § 3144(a)(1). Covered
contracts must also include a provision
allowing the federal agency to terminate the
right of any noncompliant contractor or
subcontractor to continue work on the
contract. Id. § 3143.

Although the Davis-Bacon Act exists for
the benefit of laborers who perform work on
federal contracts, the ability of laborers to
bring suit under the Act is limited. In
Universities Research Association, Inc. v.
Coutu, the Supreme Court held that the Act
“does not confer a private right of action for
back wages under a contract that
administratively has been determined not to
call for Davis-Bacon work,” but left open
the possibility that laborers could bring suit
under contracts that do include Davis-Bacon
Act provisions.
450 U.S. at 767–69
(emphasis added). Along with most other
Courts of Appeals, the Second Circuit has
closed this latter possibility. In Grochowski
v. Phoenix Construction, the Circuit held
that the Davis-Bacon Act does not include a
general, implied right of action for laborers,
even if the contract is covered by the Act,
and, moreover, that laborers cannot recover
Davis-Bacon Act wages by bringing state
law contract claims or claims under the
federal Fair Labor Standards Act (“FLSA”).
318 F.3d 80, 86–87 (2d Cir. 2003). Such
suits, the Circuit observed, would be
inconsistent with the legislative scheme
calling for administrative enforcement of the
Act. Id. at 87 (“Under the [Davis-Bacon

The Davis-Bacon Act is enforced
administratively by the contracting federal
agency and the DOL. The DOL issues both
general
and
project-specific
wage
determinations for use by contracting
agencies. 29 C.F.R. §§ 1.5, 1.6. Disputes
between the contracting agency and
4

material in carrying out the work provided
for in the contract.” 40 U.S.C. §§ 3131(a)–
(b). The Miller Act confers on “[e]very
person that has furnished labor or material in
carrying out work provided for in a contract
for which a payment bond is furnished” a
right to “bring a civil action on the payment
bond for the amount unpaid at the time the
civil action is brought” if that person has not
been fully paid within 90 days of the date on
which work was last performed or materials
furnished. Id. § 3133(b)(1).

Act], an aggrieved employee is limited to
those administrative mechanisms set forth in
the text of the statute.”).
Laborers who perform under contracts
governed by the Davis-Bacon Act are not
entirely without remedy, however. Section
3 of the Act (“section 3”) provides that:
If the accrued payments withheld [by
the federal agency] under the terms
of the contract are insufficient to
reimburse all the laborers and
mechanics who have not been paid
the wages required under this
subchapter,
the
laborers
and
mechanics have the same right to
bring a civil action and intervene
against the contractor and the
contractor’s sureties as is conferred
by law on persons furnishing labor or
materials.

The Supreme Court has recognized that
the cause of action referenced in section 3 of
the Davis-Bacon Act refers to the right to
bring a suit on a Miller Act bond. Univs.
Research Ass’n, 450 U.S. at 773. Thus, a
laborer may sue to recover prevailing wages
due under the Davis-Bacon Act by bringing
a claim against the surety of a Miller Act
bond. The case law is not entirely clear on
whether section 3 of the Davis-Bacon Act
creates a cause of action independent from
the Miller Act cause of action or simply
recognizes that the Miller Act cause of
action is available to enforce the
requirements of the Davis-Bacon Act.
Compare U.S. ex rel. Bradbury v. TLT
Constr. Corp., 138 F. Supp. 2d 237, 241
(D.R.I. 2001) (characterizing suit as
asserting “a Miller Act claim for unpaid
Davis–Bacon Act wages” (emphasis
added)); U.S. ex rel. Favel v. St. Paul Fire &
Marine Ins. Co., No. 99-cv-60 (RFC) (GF),
2001 WL 92149, at *2 (D. Mont. Feb. 1,
2001) (same), with Castro v. Fid. & Deposit
Co. of Maryland, No. 13-cv-818 (JEB),
2014 WL 1409572, at *5 (D.D.C. Apr. 14,
2014) (holding that section 3 of the DavisBacon Act is “a new and fully functional
right of action, and not merely a superficial
reference to remedies already available
under the bond statutes”). Krol’s motion
does not require the Court to address this

40 U.S.C. § 3144(a)(2). As discussed in
greater detail below, this section confirms
that laborers have an express cause of action
to bring claims for Davis-Bacon Act
violations on Miller Act bonds under certain
well-defined circumstances.
Univs.
Research Ass’n, 450 U.S. at 773 (“If the
wages . . . withheld [by the federal agency]
are insufficient to reimburse the laborers and
mechanics, then § 3 confers on them the
same ‘right of action and/or intervention’
conferred by the Miller Act on laborers and
materialmen.”).
B. The Miller Act
The Miller Act requires any contractor
performing on a “contract of more than
$100,000 . . . for the construction, alteration,
or repair of any public building or public
work of the Federal Government” to furnish
a “payment bond with a surety satisfactory
to the [contracting federal] officer for the
protection of all persons supplying labor and

5

question. 3 Regardless of whether the cause
of action arises under section 3 itself or the
Miller Act, it is well-settled that a laborer
may bring a claim on a Miller Act bond to
recover Davis-Bacon Act wages, and that
the contours of such a claim are defined by
section 3. Univs. Research Ass’n, 450 U.S.
at 773. For the sake of brevity, the Court
will refer to such a claim as a “section 3
claim,” leaving open the question of whether
such a claim arises under section 3 of the
Davis-Bacon Act or the Miller Act.

Krol argues that because he is suing
under the Miller Act cause of action, his
claim is not a section 3 claim and the body
of law interpreting the Davis-Bacon Act is
therefore inapplicable. That argument is
unpersuasive. As discussed, a claim on a
Miller Act bond to recover Davis-Bacon Act
wages must comply with section 3,
regardless of whether the cause of action
arises under section 3 itself or the Miller
Act. Univs. Research Ass’n, 450 U.S. at
773.
(Ҥ 3 confers on [laborers and
mechanics] the same ‘right of action and/or
intervention’ conferred by the Miller Act on
laborers and materialmen.”). Indeed, every
court that has considered a claim like Krol’s
has recognized that such a claim must
comply with the Davis-Bacon Act, even if
the cause of action arises under the Miller
Act. See, e.g., Bradbury, 138 F. Supp. 2d at
241; Favel, 2001 WL 92149, at *2; Castro,
2014 WL 1409572, at *5. That makes
sense, since the Miller Act itself creates no
liability for failure to pay prevailing wages.
The source of such liability is the DavisBacon Act. The requirements of the DavisBacon Act would be meaningless if a party
could bring a suit based on Davis-Bacon Act
violations while bypassing the extensive
administrative regime enforcing that statute
simply by pleading a cause of action under
the Miller Act.

C. Krol’s Claim
1. Section 3 Claim
It is clear from the Complaint that Krol’s
claim is a section 3 claim, that is, a claim on
a Miller Act bond to recover prevailing
wages due under the Davis-Bacon Act. (See
Compl. ¶¶ 25–26 (suing surety of Miller Act
bond to recover prevailing wages and
benefits).)

3

The issue turns on the language in section 3 of the
Davis-Bacon Act that “laborers and mechanics have
the same right to bring a civil action . . . as is
conferred by law on persons furnishing labor or
materials [under the Miller Act].”
40 U.S.C.
§ 3144(a)(2). On one interpretation, this language
merely confirms that the Miller Act cause of action is
available to enforce Davis-Bacon Act prevailing
wage requirements. On an alternative interpretation,
this language creates a separate, express cause of
action under the Davis-Bacon Act that mirrors the
Miller Act cause of action. See Castro, 2014 WL
1409572, at *6–8. The difference between these two
understandings is potentially significant, since the
Miller Act has a one-year statute of limitations, 40
U.S.C. § 3133(b)(4), while the Davis-Bacon Act has
a two-year statute of limitations, 29 U.S.C. § 255.
See Univs. Research Ass’n, 450 U.S. at 780; U.S. ex
rel. Glynn v. Capeletti Bros., Inc., 621 F.2d 1309,
1315–16 (5th Cir. 1980); Castro, 2014 WL 1409572,
at *6–8. That discrepancy is not at issue here, since
Krol’s claim is timely even under the one-year statute
of limitations.

Indeed, the Second Circuit has rejected
analogous attempts to plead around the
Davis-Bacon Act.
In Grochowski, the
plaintiffs sought to recover prevailing wages
due under the Davis-Bacon Act by bringing
claims under state law breach-of-contract
and quantum meruit theories. 318 F.3d at
86. The Second Circuit affirmed the district
court’s dismissal of these claims, finding
them to be impermissible end-runs around
the administrative procedures of the DavisBacon Act. Id. (“At bottom, the plaintiffs’
state-law claims are indirect attempts at
privately enforcing the prevailing wage
6

administratively determined that the
contractor or subcontractor has failed to pay
prevailing wages. Although this second
requirement is not expressly stated, it is
strongly implied by both the text and the
structure of the statute.

schedules contained in the [Davis-Bacon
Act]. To allow a third-party private contract
action aimed at enforcing those wage
schedules would be inconsistent with the
underlying purpose of the legislative scheme
and would interfere with the implementation
of that scheme.” (citation and internal
quotation marks omitted)). Thus, even if
Krol’s claim arises under the Miller Act, it
must still comply with the requirements of
section 3 of the Davis-Bacon Act.

First, the statute’s requirement that “the
accrued payments withheld [by the federal
agency] under the terms of the contract
[must be] insufficient to reimburse all the
laborers and mechanics” assumes that there
has been an administrative determination
that prevailing wages were not paid; without
such a determination, there would be no
basis for withholding accrued payments.
See 40 U.S.C. § 3142(c)(3). Thus, the text
of the statute assumes, without directly
stating, that a section 3 claim may be
brought only if there has been an
administrative determination that DavisBacon Act wages were not paid. See
Bradbury, 138 F. Supp. 2d at 241 (“This
language contemplates an administrative
determination as to what wages, if any, are
actually due.”).

2. Requirements of Section 3 Claim
Section 3 provides that laborers and
mechanics may sue on a Miller Act bond
only “[i]f the accrued payments withheld [by
the federal agency] under the terms of the
contract are insufficient to reimburse all the
laborers and mechanics who have not been
paid the wages required.”
40 U.S.C.
§ 3144(a)(2). This language refers to the
provisions of the Davis-Bacon Act allowing
the federal contracting agency to withhold
payments from noncompliant contractors
and subcontractors and to disburse those
withheld payments directly to laborers. Id.
§§ 3142(c)(3), 3144(a)(1). As discussed, the
contracting
agency
has
primary
responsibility for ensuring that prevailing
wages are paid, 29 C.F.R. § 5.6, and the
DOL may initiate investigations of its own
and must resolve any disputes between the
contracting agency and the contractor
“concerning payment of prevailing wage
rates,
overtime
pay,
or
proper
classification,” id. § 5.11.

Second, the structure of the Davis-Bacon
Act and its implementing regulations
suggests that the principal avenue of
enforcement under the statutory scheme is
administrative. As discussed, agencies are
required to include prevailing wage
provisions in their contracts, investigate
violations by contractors, and withhold
payments where necessary. See 29 C.F.R.
§§ 5.5, 5.6. Disputes between agencies and
contractors on any issues “of fact or law
concerning payment of prevailing wage
rates, overtime pay, or proper classification”
must be resolved administratively by the
DOL. Id. § 5.11. Only when this scheme
falls short – that is, only when the payments
withheld by the agency are inadequate to
make laborers whole – does the Act permit
laborers to file suit. 40 U.S.C. § 3144(a)(2).
When considered in this light, it seems

It follows that section 3 claims must
meet two requirements. First, as the text
expressly states, laborers may bring a claim
only if funds withheld by the agency are
insufficient to fully reimburse all laborers
who are entitled to prevailing wages.
Second, a laborer may bring a claim only if
the federal government – that is, either the
contracting agency or the DOL – has
7

highly unlikely that Congress would have
constructed such an elaborate administrative
scheme only to give laborers a way to
bypass it completely by filing a civil suit.
See Bradbury, 138 F. Supp. 2d at 242
(“Therefore, to prevail in such an action,
plaintiff must receive an administrative
determination that he is owed unpaid Davis–
Bacon Act wages; to hold otherwise could
disrupt Congress’s carefully crafted
administrative scheme.”); cf. Grochowski,
318 F.3d at 87 (“Under the [Davis-Bacon
Act], an aggrieved employee is limited to
those administrative mechanisms set forth in
the text of the statute. The plaintiffs’
attempt to use the FLSA to circumvent the
procedural requirements of the [DavisBacon Act] must fail.” (citation omitted)).

States v. Dan Caputo Co., 152 F.3d 1060,
1062 (9th Cir. 1998) (“Regulations under
the Davis–Bacon Act set forth procedures
for the administrative resolution of
classification disputes. . . . Accordingly,
deferral to the [DOL] with respect to
classification determinations is proper under
the doctrine of primary jurisdiction.”); U.S.
ex rel. I.B.E.W., AFL-CIO, Local Union No.
217 v. G.E. Chen Const., Inc., 954 F. Supp.
195, 197 (N.D. Cal. 1997) (“The Court
therefore finds that to the extent that
plaintiffs’ [False Claims Act] claims are
based on allegations that defendants
misclassified employees [under the DavisBacon Act], it lacks jurisdiction to decide
those claims. Instead, those claims must be
brought to the Department of Labor.”); U.S.
ex rel. Windsor v. DynCorp, Inc., 895 F.
Supp. 844, 852 (E.D. Va. 1995) (“[T]he
Department of Labor has sole responsibility
for resolving classification disputes under
the Davis–Bacon Act.”).
The risk of
inconsistent rulings is eliminated if section 3
permits suit only when the federal
government – in particular, the DOL – has
already determined that a misclassification
has occurred.

Third, permitting a section 3 claim to go
forward
absent
an
administrative
determination would raise the risk of
inconsistent rulings by the DOL and the
Court about whether a violation has
occurred. This risk is especially heightened
in a case like this one, where the principal
dispute concerns the classification of labor,
an issue on which the DOL has particular
expertise. See 29 C.F.R. § 5.11. Indeed,
many courts have gone so far as to rule that,
in light of the complexity of the
classification
system,
the
primary
jurisdiction doctrine gives the DOL sole
jurisdiction to determine whether a laborer
was properly classified. 4 See, e.g., United

Krol advances three principal arguments
for why an administrative determination is
not required, none of which the Court finds
persuasive. First, he argues that it would be
unfair to make laborers obtain an
administrative determination, since they
have no control over whether the DOL or
the contracting agency will initiate an
investigation
into
prevailing
wage
violations. (Opp. at 12.) This argument is
overstated. In fact, the regulations do
recognize the possibility of laborer-initiated
investigations, see 29 C.F.R. § 5.6(a)(3)
(“Complaints of alleged violations shall be
given priority.”), and specifically instruct
contracting agencies and the DOL to
interview affected laborers and keep the fact
of such interviews confidential, id

4

“The doctrine of primary jurisdiction allows a
federal court to refer a matter extending beyond the
‘conventional experiences of judges’ or ‘falling
within the realm of administrative discretion’ to an
administrative agency with more specialized
experience, expertise, and insight.” Nat’l Commc’ns
Ass’n, Inc. v. Am. Tel. & Tel. Co., 46 F.3d 220, 222–
23 (2d Cir. 1995) (quoting Far East Conference v.
United States, 342 U.S. 570, 574 (1952)). Because
neither party has addressed this issue, the Court
expresses no view as to whether the primary
jurisdiction doctrine applies in this case.

8

work covered by the bond, (2) the laborer
has not been fully paid, and (3) the laborer
intended for the labor to be furnished on the
government’s project” – and argues that all
three of those elements are pleaded in the
Complaint. (Opp. at 6–8.) The Court again
disagrees. The cases Krol cites are entirely
inapposite, since none of them involved
claims based on a contractor’s failure to pay
prevailing wages under the Davis-Bacon
Act. See U.S. ex rel. Balzer Pac. Equipment
Co. v. Fidelity & Dep. Co. of Md., 895 F.2d
546, 547 (9th Cir. 1990); U.S. ex rel. Canion
v. Randall & Blake, 817 F.2d 1188, 1189
(5th Cir. 1987); U.S. ex rel. Polied Envtl.
Servs., Inc. v. Incor Grp., Inc., 238 F. Supp.
2d 456, 457 (D. Conn. 2002); U.S. ex rel.
Hussmann Corp. v. Fidelity & Dep. Co. of
Md., 999 F. Supp. 734, 734 (D.N.J. 1998).
Instead, each of these cases involved
ordinary Miller Act claims, that is, claims by
subcontractors or sub-subcontractors who
provided labor or materials, but never got
paid. See Castro, 2014 WL 1409572, at *3
(explaining purpose of Miller Act was to
protect suppliers and subcontractors against
the risk of default from prime contractors).
Because Krol’s claim is based on Fox’s
alleged failure to pay prevailing wages due
under the Davis-Bacon Act, it is not enough
for Krol to plead the elements of an ordinary
Miller Act claim; he must also plead that he
has satisfied the requirements of section 3 of
the Davis-Bacon Act.

§ 5.6(a)(3), (5). To the extent that laborers’
control of administrative proceedings is
limited, that is entirely consistent with the
legislative design of the Davis-Bacon Act.
See Grochowski, 318 F.3d at 87 (“Under the
[Davis-Bacon Act], an aggrieved employee
is limited to those administrative
mechanisms set forth in the text of the
statute.”).
Second, Krol argues that requiring an
administrative determination would make
recovery impossible for many laborers, since
it will sometimes be the case that the oneyear Miller Act statute of limitations will
run out before the agency or the DOL has
had the opportunity to make an
administrative determination. (Opp. at 10–
12.) The Court disagrees. As already noted,
it is far from settled that a section 3 claim
like Krol’s is subject to the one-year Miller
Act statute of limitations. At least one
district court has held that such claims arise
under a section 3 cause of action and thus
the two-year Davis-Bacon Act statute of
limitations applies.
Castro, 2014 WL
1409572, at *6–8. Furthermore, because
Krol cannot bring his claim until there has
been an administrative determination that a
Davis-Bacon Act violation occurred, there is
a colorable argument that the claim does not
accrue, and the statute of limitations does
not begin to run, until such an administrative
determination is made. Santos v. Dist.
Council of New York City & Vicinity of
United Bhd. of Carpenters & Joiners of Am.,
AFL-CIO, 619 F.2d 963, 968-69 (2d Cir.
1980) (“A cause of action ordinarily accrues
when the plaintiff could first have
successfully maintained a suit based on that
cause of action.” (citation and internal
quotation marks omitted)).

3. Failure to State a Claim
Like the courts in Bradbury, 138 F.
Supp. 2d at 241, and Favel, 2001 WL
92149, at *2, the Court concludes that a
claim to recover Davis-Bacon Act wages on
a Miller Act bond cannot proceed without an
administrative determination that a DavisBacon Act violation occurred. Those courts,
however, did not consider the requirements
of section 3 to be elements of the plaintiffs’
claims and, accordingly, denied the motions

Finally, Krol cites a number of cases for
the proposition that a Miller Act claim
includes only three elements – “(1) the
laborer supplied labor in prosecution of the
9

would otherwise be a legally sufficient cause
of action. As discussed in Part III.B, section
3 is the basis for Krol’s claim – but for
section 3, Krol would have no right of action
at all, since the Davis-Bacon Act contains no
general, implied right of action, Grochowski,
318 F.3d at 86–87, and the Miller Act does
not require contractors to pay prevailing
wages.

to dismiss in those cases. Instead, the
Bradbury and Favel courts opted to stay
those cases
pending the
required
administrative determinations. Bradbury,
138 F. Supp. 2d at 244; Favel, 2001 WL
92149, at *2.
The Court disagrees with the approach
taken in Bradbury and Favel. For the
reasons discussed in Part III.B, regardless of
whether a claim to recover Davis-Bacon Act
wages on a Miller Act bond arises under the
Miller Act or section 3 of the Davis-Bacon
Act, it may be brought only if “the accrued
payments withheld [by the federal agency]
under the terms of the contract are
insufficient to reimburse all the laborers and
mechanics who have not been paid the
wages required.” 40 U.S.C. § 3144(a)(2). It
is clear from the statute that the elements of
such a claim include: (1) an administrative
determination that a Davis-Bacon Act
violation occurred, and (2) the insufficiency
of funds to reimburse laborers. Krol’s
failure to plead these elements means that
his claim fails as a matter of law.

Accordingly, a plaintiff bringing a
section 3 claim must plead the existence of
an administrative determination that a
Davis-Bacon Act violation occurred and the
insufficiency of funds to reimburse laborers,
neither of which have been alleged here.
IV. CONCLUSION
For the reasons set forth above, the
Court finds that Krol cannot bring a section
3 claim because he does not plead that
(1) the contracting agency or the DOL made
an administrative determination that his
employer, Fox, failed to pay prevailing
wages, and (2) any withheld funds are
insufficient to reimburse him. The Court
enters judgment on the pleadings in favor of
Defendants, but dismisses the case without
prejudice, since Krol could conceivably
reinstitute this suit once an appropriate
administrative determination has been made.

The Court notes that, despite superficial
similarity, the administrative determination
requirement of section 3 is not analogous to
the administrative exhaustion requirement of
other federal statutes, such as the Prison
Litigation Reform Act (“PLRA”). The
PLRA provides that prisoner plaintiffs may
not bring claims based on their conditions of
confinement without first having exhausted
available administrative remedies.
42
U.S.C. § 1997e(a). The Supreme Court has
held that because failure to exhaust
administrative remedies is an affirmative
defense, prisoner plaintiffs need not plead
facts about exhaustion in their complaints.
Jones v. Bock, 549 U.S. 199, 216 (2007).
However, this reasoning does not extend to
the current context. Unlike the PLRA,
section 3 of the Davis-Bacon Act does not
provide an affirmative defense to what

Accordingly,
IT
IS
HEREBY
ORDERED THAT: (1) Arch’s motion is
DEEMED to be brought under Rule 12(c) as
a motion for judgment on the pleadings and
is, so deemed, GRANTED; and (2) Krol’s
class certification motion is DENIED AS
MOOT.

10

The Clerk of the Court is respectfully
directed to terminate the motions pending at
Doc. Nos. 15 and 24 and to close this case.
SO ORDERED.

- /0

~~~~.-~J.___J
United States District Judge
Dated: September 11, 2014
New York, New York

*

*

*
USDSSDNY
DOCUMENT
ELECTRONICALLY FILED

Plaintiffs are represented by Lloyd
Ambinder and Jack Newhouse of Virginia &
Ambinder, LLP, 40 Broad Street, 7th Floor,
New York, NY 10004.

DOC#:~~~-,--.,--~~

Defendants are represented by Chris
Georgoulis and Monica Barron of
Georgoulis & Associates PLLC, 120 Wall
Street, 18th Floor, New York, NY 10005.

11