New York Law Review

Tag: Debarment

  • Dadson Plumbing Corp. v. Goldin, 66 N.Y.2d 713 (1985): Defining ‘Final Determination’ for Debarment Under Labor Law

    Dadson Plumbing Corp. v. Goldin, 66 N.Y.2d 713 (1985)

    For purposes of debarment under Labor Law § 220-b(3)(b), multiple violations of prevailing wage laws found in a single order constitute only one “final determination,” requiring a prior separate determination to trigger the debarment provisions.

    Summary

    Dadson Plumbing Corp., a plumbing business, was found by the Comptroller to have violated Labor Law § 220 by failing to pay prevailing wages to an employee across five contracts. The Comptroller’s single order finding these violations triggered concerns about debarment under Labor Law § 220-b(3)(b), which prohibits bidding on public work contracts for five years after two “final determinations” of willful violations. The New York Court of Appeals held that the Comptroller’s single order constituted only one “final determination,” preventing debarment. The court emphasized the penal nature of debarment provisions, requiring strict construction in favor of the party being penalized and establishing a need for a prior final determination before subsequent violations trigger debarment.

    Facts

    Dadson Plumbing Corporation, a father-son plumbing business, performed contracts exclusively for the New York City Board of Education.
    In 1982, Dadson was awarded five contracts.
    A plumbers’ union representative filed a complaint, leading the Comptroller to investigate whether Dadson paid prevailing wages to Randy Lane, employed as a “go-fer.”
    Evidence showed Lane drove Dadson’s truck, picked up tools, got coffee, and occasionally patched and painted holes.
    The hearing officer determined Lane was not a mere errand boy and was entitled to prevailing wages, which he did not receive.

    Procedural History

    The Comptroller found a violation of Labor Law § 220 and imposed a civil penalty.
    The Appellate Division confirmed the Comptroller’s determination by a divided court.
    Dadson Plumbing Corporation appealed to the New York Court of Appeals as of right.

    Issue(s)

    Whether a single order from the Comptroller, finding multiple violations of Labor Law § 220 across five contracts, constitutes one or multiple “final determinations” for the purposes of triggering debarment under Labor Law § 220-b(3)(b).

    Holding

    No, because the debarment provisions of Labor Law § 220-b(3)(b) require two “final determinations” to trigger ineligibility for bidding on public work contracts, and a single order finding multiple violations constitutes only one such determination.

    Court’s Reasoning

    The Court of Appeals acknowledged that substantial evidence supported the Comptroller’s determination that Dadson violated Labor Law § 220.
    The court focused on the interpretation of Labor Law § 220-b(3)(b), which imposes a five-year debarment from bidding on public work contracts after “final determinations” in “two instances” of willful violation of prevailing wage laws.
    The court emphasized the penal nature of these debarment provisions, stating they must be “strictly construed against the party seeking their enforcement and in favor of the person being proceeded against.”
    The court reasoned that the statute requires “one final determination prior to the second final determination so as to establish knowing repetition as the predicate for a five-year suspension from bidding.”
    Therefore, the Comptroller’s single order, even though it encompassed violations across five contracts, amounted to only one final determination. The court remitted the matter to the Comptroller to modify the determination to reflect that Dadson was not debarred from bidding.
    The Court explicitly stated that the statute requires “one final determination prior to the second final determination so as to establish knowing repetition as the predicate for a five-year suspension from bidding.”

  • Lewis Tree Service, Inc. v. Fire Department of the City of New York, 66 N.Y.2d 667 (1985): Collateral Attack on Comptroller’s Labor Law Determination

    Lewis Tree Service, Inc. v. Fire Department of the City of New York, 66 N.Y.2d 667 (1985)

    A determination by a comptroller regarding violations of labor law, if not challenged directly, cannot be collaterally attacked in a subsequent proceeding; however, a single determination does not result in debarment from future bidding on public contracts.

    Summary

    Lewis Tree Service, Inc. initiated an Article 78 proceeding to challenge the New York City Fire Department’s decision to award a tree-trimming contract to another bidder, despite Lewis Tree Service being the lowest bidder. The Fire Department’s decision was based on a prior determination by the Comptroller that Lewis Tree Service had violated Labor Law § 231(2) by failing to pay prevailing wages to exterminators under previous contracts with the New York City Housing Authority. The Court of Appeals held that the Comptroller’s unchallenged determination could not be collaterally attacked. However, because there was only one such determination, debarment was not warranted. While the contract in question had already been completed, the court converted the proceeding to a declaratory judgment action in favor of Lewis Tree Service, declaring they were not debarred from bidding on state or municipal contracts.

    Facts

    Lewis Tree Service, Inc. submitted the lowest bid for a tree-trimming contract with the New York City Fire Department. The Fire Department declined to award the contract to Lewis Tree Service. This decision was based on a previous determination by the City Comptroller. The Comptroller determined Lewis Tree Service had violated Labor Law § 231(2) by failing to pay prevailing wages and benefits to approximately 15 exterminators. These violations occurred under two prior tree-spraying contracts with the New York City Housing Authority.

    Procedural History

    Lewis Tree Service, Inc. commenced an Article 78 proceeding seeking to annul the Fire Department’s determination and compel the award of the contract. The lower courts’ rulings are not specified in this opinion. The Court of Appeals reviewed the case after the contract had already been awarded and completed.

    Issue(s)

    1. Whether a determination by the Comptroller regarding violations of Labor Law § 231(2), which was not challenged in a direct proceeding, can be collaterally attacked in a subsequent proceeding concerning a different contract?

    2. Whether a single determination by the Comptroller of a Labor Law violation warrants debarment from future bidding on state or municipal contracts under Labor Law § 235(7)?

    Holding

    1. No, because the Comptroller’s determination, made under the authority vested in him by Labor Law § 230 (8), § 235 and Public Housing Law § 152, was never challenged in an article 78 proceeding, and, under settled principles, cannot be collaterally attacked.

    2. No, because Labor Law § 235 (7) requires more than a single determination for debarment.

    Court’s Reasoning

    The Court of Appeals reasoned that the Comptroller’s determination regarding the Labor Law violations was made according to his statutory authority and was not challenged directly via an Article 78 proceeding. The court cited the principle that administrative determinations, once final, cannot be collaterally attacked in subsequent proceedings. The court referenced 2 Am Jur 2d, Administrative Law, §§ 491, 493 and Lacks v Lacks, 41 NY2d 71 in support of this principle. Allowing a collateral attack would undermine the finality and efficiency of administrative decisions. The court emphasized that the appropriate avenue for challenging the Comptroller’s determination was a direct challenge via an Article 78 proceeding. Regarding debarment, the court pointed to Matter of Dadson Plumbing Corp. v Goldin, 66 NY2d 718, clarifying that a single determination by the Comptroller is insufficient to trigger debarment from future bidding under Labor Law § 235 (7). Because the contract had already been completed, the court converted the proceeding into a declaratory judgment action, declaring that Lewis Tree Service was not debarred from bidding on State or municipal contracts. The court rejected the petitioner’s request for money damages.