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R.I., Inc. v. McCarthy

March 5, 2007

RE: R.I., INC. ET AL.
v.
MICHAEL MCCARTHY, ET AL.,



The opinion of the court was delivered by: Joel A. Pisano United States District Judge

JOEL A. PISANO UNITED STATES DISTRICT JUDGE

LETTER OPINION

ORIGINAL TO BE FILED WITH THE CLERK OF THE COURT

Dear Parties,

Currently before the Court is a motion by defendants, Michael McCarthy, Director of the New Jersey Department of Labor and Workforce Development ("NJDOL"), Raymond Smit, an Assistant Chief at the NJDOL, and Theodore Tardiff, also an Assistant Chief at the NJDOL, to dismiss the complaint in this action based upon the abstention principles promulgated by the United States Supreme Court in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed. 2d 669 (1971). Plaintiff has opposed the motion. For the reasons set forth herein, to the extent that the complaint seeks injunctive and declaratory relief, the Court find abstention under Younger to be appropriate and dismisses those claims. To the extent the complaint seeks money damages, the Court shall stay those claims pending final resolution of the related state court proceeding.

I. Background

Plaintiff, R.I., Inc., who does business as "Seating Solutions," is a New York corporation engaged in the business of manufacturing, selling, leasing, assembling and installing "seating audience [and] spectator seating systems." See Complaint at ¶ 2. Plaintiffs Lisa Suprina, Scott Suprina and Tony English are officers and directors of the corporation. Seating Solutions is a registered contractor with the NJDOL. This case arises as a result action taken by the NJDOL against Plaintiffs for alleged violations of the New Jersey Prevailing Wage Act, N.J.S.A. 34:11-56.25, et seq. (the "Wage Act"), and the New Jersey Wage Payment Act, N.J.S.A. 34:11-4.1, in connection with several public works projects in New Jersey during the period February 2005 to May 2005. The NJDOL alleged Plaintiffs committed various violations such as unpaid or late wages, failure to pay prevailing wages, and records violations.

In October 2005, the NJDOL notified Plaintiffs of its intent to debar Plaintiffs from eligibility to be awarded any contract for public work in New Jersey, and sought the collection of unpaid wages, administrative fees and penalties from Plaintiffs. In response, Plaintiffs argued that the employees of Seating Solutions, through their union, had waived the benefits of prevailing wage law in a collective bargaining agreement in exchange for layoff protection and also that application of the Act is preempted by federal law governing the collective bargaining process. Shortly thereafter, on November 10, 2005, Plaintiff's filed*fn1 their complaint in this case alleging that defendants undertook the above-described investigation and related actions as part of a conspiracy to drive Plaintiffs' business out of the state of New Jersey in favor of "local residents and/or members of NJ Carpenters Local 1342." Compl. at ¶ 31. Plaintiffs brought their claims pursuant to 42 U.S.C. § 1983 and allege that defendants' actions violated various of their constitutional rights, including due process and equal protection.*fn2 The complaint is brought against defendants in both their official and individual capacity, for injunctive relief and monetary damages, respectively.*fn3

The NJDOL's action was referred to the Office of Administrative Law and a hearing was held before an Administrative Law Judge ("ALJ") June 28-29, 2006. On August 25, 2006, the ALJ issued his decision in which he rejected Plaintiffs' arguments and affirmed the enforcement action by the NJDOL. On October 13, 2006, the Commissioner of the NJDOL issued his final decision accepting and adopting the findings, conclusions and recommendations of the ALJ. The Commissioner ordered that Plaintiffs be debarred for a period of three years and that they pay a total of $57,965.96 in wages, fees and penalties. Plaintiffs have appealed the Commissioner's decision to the Appellate Division of the Superior Court of New Jersey.

In the instant action, Plaintiffs seek an injunction enjoining defendants from further action against Plaintiffs, money damages and declaratory relief. Plaintiffs seek a declaratory judgment stating that (1) the Wage Act is unconstitutional; (2) the administrative charges against Plaintiffs are unconstitutional, null and void; (3) certain defenses that defendants may potentially raise are unconstitutional; (4) an Executive Order promulgated by former New Jersey governor James McGreevey creating "Project Labor Agreements" is unconstitutional; (5) Plaintiffs and their agents "have a right to negotiate a waiver of a known right within a collective bargaining agreement;" and (6) Plaintiff's existing Collective Bargaining Unit grants eligible employees certain benefits of financial value to employees that can be credited to meeting the requirements of the Act.

II. Discussion

Defendants argue that the abstention doctrine of Younger v. Harris require dismissal of the instant complaint. Younger generally requires federal courts to abstain from taking jurisdiction over federal constitutional claims that involve or call into question ongoing state proceedings. Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed. 2d 669 (1971). Plaintiffs, on the other hand, argue that abstention is not appropriate because (1) they are not seeking to enjoin the state proceeding; (2) "exceptional circumstances" exist that would warrant the granting of federal injunctive relief in connection with a pending state court action; and (3) they are seeking monetary as well as injunctive relief.

Despite Plaintiffs claim that they are not expressly seeking to enjoin the state court action, there is no doubt that the relief they seek in the instant action would directly interfere with the ongoing state proceeding. Therefore, this Court must examine whether abstention pursuant to Younger is warranted. The Supreme Court has set forth a three-part test that this Court must apply in order to determine whether abstention is proper. Younger abstention is appropriate when: (1) there is a pending state judicial proceeding; (2) the proceeding implicates important state interests; and (3) the state proceeding affords an adequate opportunity to raise constitutional challenges. Middlesex County Ethics Committee v. Garden State Bar Ass'n, 457 U.S. 423, 432, 102 S.Ct. 2515, 73 L.Ed. 2d 116 (1982).

To the extent that Plaintiffs seek injunctive relief and declaratory relief, all three of theserequirements are met. First, the state proceedings are judicial in nature, as the administrative action is presently under appeal in the Superior Court of New Jersey. See id. at 432 ("The policies underlying Younger are fully applicable ...


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