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SJC‑11318

LIGHTHOUSE MASONRY, INC., & another^[1]  vs.  DIVISION OF

ADMINISTRATIVE LAW APPEALS & another.^[2]

Suffolk.     September 9, 2013.  ‑  December 31, 2013.

Present:  Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.

Labor, Public works, Wages.  Public Works, Wage determination.  Attorney General.  Division of Administrative Law Appeals.  Administrative Law, Decision.

Civil action commenced in the Superior Court Department on August 26, 2008.

The case was heard by Mitchell H. Kaplan, J., on motions for summary judgment.

The Supreme Judicial Court granted an application for direct appellate review.

Harvey B. Heafitz (Scott K. Semple with him) for the plaintiffs.

Richard C. Heidlage, Special Assistant Attorney General, for Division of Administrative Law Appeals.

Karla E. Zarbo, Assistant Attorney General (Bruce Trager, Assistant Attorney General, with her) for the Attorney General.

The following submitted briefs for amici curiae:

Christopher C. Whitney & Scott K. Pomeroy for Associated Builders & Contractors, Massachusetts Chapter.

Donald J. Siegel & James A.W. Shaw for Massachusetts Building Trades Council.

Patricia A. DeAngelis, Special Assistant Attorney General, for Department of Labor Standards.

BOTSFORD, J.  This case primarily concerns the process governing appeals from civil citations issued by the Attorney General for alleged violations of the Commonwealth’s prevailing wage law, G. L. c. 149, §§ 26-27H.  The plaintiffs, Lighthouse Masonry, Inc., and its president, Peter Alves (collectively, Lighthouse), appeal from a Superior Court judgment that affirmed a prevailing wage law decision of a Division of Administrative Law Appeals (DALA) hearing officer under G. L. c. 149, § 27C (b) (4) (§ 27C [b] [4]).  We consider here two interrelated questions about the DALA administrative hearing process directly raised in Lighthouse’s appeal:  whether the chief administrative magistrate of DALA has authority to review and approve a proposed decision of a DALA hearing officer in a § 27C (b) (4) appeal before the final decision is issued; and if so, whether, when a hearing officer of DALA resigns after drafting a decision on an appeal under § 27C (b) (4) but before the issuance of a final decision, another DALA hearing officer may take over responsibility for deciding the appeal.  We also consider Lighthouse’s challenge on substantive grounds to the affirmance of one of the civil citations issued against it by the Attorney General.  We leave for resolution in a different case issues concerning whether and, if so, when and to what extent advisory opinions of the Department of Labor Standards (DLS)^[3] on the appropriate classification of jobs and types of work are subject to review by a DALA hearing officer in the context of a § 27C (b) (4) appeal.^[4]

1.  Facts and procedural history.^[5]  On December 2, 2004, DLS issued a schedule of prevailing wage rates for a public works construction project at King Philip Regional High School in Wrentham (King Philip project).  The schedule listed wage rates for the specific job classifications of, among others, “brick/stone/artificial masonry (inc[luding] masonry waterproofing)” and “laborer:  mason tender,” but did not describe the job duties associated with the classifications listed.

Lighthouse was hired as the masonry subcontractor for the King Philip project, and performed its work during 2005 and 2006.  On July 12, 2006, the Attorney General issued four citations to Lighthouse for failing to pay the prevailing wage to certain employees on the project in violation of G. L. c. 149, § 27.  Three of the citations charged that Lighthouse paid the identified employees as laborers for certain types of work rather than as masons.  The fourth citation charged that Lighthouse paid an employee below the appropriate wage rate that was known to apply to the type of work he was performing.  With respect to this fourth citation, Lighthouse had noted the error and had corrected it before the citation issued.  Each citation imposed a $ 500 fine on Lighthouse.

After Lighthouse appealed the citations to DALA but before the appeal was heard, an assistant attorney general assigned to the case wrote to DLS and requested an opinion as to the appropriate job classifications for the types of work that were the subject of the first three citations.  The Commissioner of DLS (commissioner) responded in a letter dated March 23, 2007, opining that the work in question was properly classified as the work of a “cement mason/plasterer” or as “brick/stone/artificial masonry” — both classifications considered to be mason work –  and not the work of a laborer.^[6]

Kimberly Fletcher, a DALA administrative magistrate, was assigned as the hearing officer to hear Lighthouse’s appeal.  At the completion of the adjudicatory hearing held on August 3, 2007, Fletcher drafted a decision that was submitted for internal review in accordance with a process established by the then chief administrative magistrate of DALA, Shelly Taylor.  Under this review procedure, every decision by an administrative magistrate was read by two other administrative magistrates and then forwarded to the chief administrative magistrate.  In this case, Taylor reviewed Fletcher’s draft in early 2008.  In the subsequent months, Taylor and Fletcher appear to have engaged in several rounds of review and revision of Fletcher’s draft.

Fletcher resigned from DALA effective June 4, 2008; at the time of her resignation, DALA had not yet issued a decision on Lighthouse’s appeal.  On June 12, Fletcher wrote to counsel for Lighthouse and the Attorney General, stating,

“I resigned my position with [DALA] effective June 4, 2008.  Many months ago, I completed my decision in the [Lighthouse] case.  The decision has not yet been issued by DALA.  I am writing this letter to let you know that I am not the cause of the delay.”

In response to Fletcher’s letter, Lighthouse requested that Taylor release Fletcher’s decision.  Taylor did not do so.

On July 10, 2008, Taylor held a status conference with the parties to inform them that a new hearing officer would be assigned to the matter.  Thereafter, Taylor appointed herself to perform this role.^[7]  On July 29, the DALA decision on Lighthouse’s appeal was issued, signed by Taylor.  As had been true of Fletcher’s draft decision, the decision signed by Taylor affirmed the fourth citation and vacated the first three.  Fletcher’s and Taylor’s respective rationales for vacation, however, differed.^[8]

Both Lighthouse and the Attorney General appealed the DALA decision in separate complaints filed in the Superior Court.  For reasons not clear on the record, however, the two appeals were not consolidated for hearing and decision.^[9]  Lighthouse’s complaint named the Attorney General and DALA as defendants and combined Lighthouse’s appeal under G. L. c. 30A, § 14, from the affirmance of the fourth citation with requests for an injunction ordering DALA to produce Fletcher’s decision; a declaration that Fletcher’s decision was the final, binding DALA decision in this matter; and the vacation of Taylor’s decision on the ground that Fletcher’s decision was final and binding, and DALA had no authority to rewrite that decision.  The Attorney General and DALA, as defendants, filed a single motion for summary judgment, and Lighthouse filed a motion for partial summary judgment.  After hearing, in a written memorandum of decision, a Superior Court judge (motion judge) granted the defendants’ motion and denied Lighthouse’s motion.^[10]  Judgment entered affirming the DALA decision and dismissing all counts of Lighthouse’s complaint.  Lighthouse filed a timely appeal, and we allowed its application for direct appellate review.

2.  Statutory framework.  The prevailing wage law requires that contractors and subcontractors on every public works construction project pay the “mechanics and apprentices, teamsters, chauffeurs and laborers” working on the project at the prevailing wage rate assigned to the various job classifications performing the work.  G. L. c. 149, § 26.  The commissioner of DLS is tasked with preparing a list of the specific jobs “usually performed on various types of public works” that employ such mechanics, apprentices, teamsters, chauffeurs, and laborers, and with “classify[ing]” those jobs.  G. L. c. 149, § 27.  The commissioner may “revise such classification[s] from time to time, as he may deem advisable.”  Id.  The commissioner also must determine the appropriate prevailing wage rates for the jobs within a given public works construction project and furnish a schedule of these wage rates to the appropriate public official or public body responsible for the project, and update the wage rates annually.  Id.  The applicable wage rate schedule must be attached to advertisements for bids on every public works project.  Id.  Should a party wish to appeal either a job classification determination or a prevailing wage rate determination, that party may do so pursuant to G. L. c. 149, § 27A, “[w]ithin five days from the date of the first advertisement or call for bids.”^[11]  Under § 27A, the commissioner or a designee is required to hold a public hearing on the appeal “immediately,” and render a decision within three days after the hearing closes.  The commissioner’s decision on such an appeal is final.  Id.

Violations of the prevailing wage law by public contractors are governed primarily by G. L. c. 149, § 27C.  Section 27C (a) provides for criminal penalties, and § 27C (b) provides for an alternative regime of civil penalties — warnings and citations — administered by the Attorney General.^[12]  Section 27C (b) (4) sets forth the procedures governing appeals of citations:

“Any person aggrieved by any citation or order issued pursuant to this subsection may appeal said citation or order by filing a notice of appeal with the attorney general and [DALA] within ten days of the receipt of the citation or order.  Any such appellant shall be granted a hearing before [DALA] in accordance with chapter 30A.  The hearing officer may affirm or if the aggrieved person demonstrates by a preponderance of evidence that the citation or order was erroneously issued, vacate, or modify the citation or order.  Any person aggrieved by a decision of the hearing officer may file an appeal in the superior court pursuant to the provisions of said chapter 30A.”

3.  Discussion.  a.  Fourth citation.  Lighthouse argues that because it failed to pay an employee the correct wage rate due to a clerical error, it should not have been cited for a violation of G. L. c. 149, § 27.  The argument fails.  Like the Wage Act, G. L. c. 149, §§ 148, 150, and the independent contractor statute, G. L. c. 149, § 148B, see Somers v. Converged Access, Inc., 454 Mass. 582, 591-592 (2009), the prevailing wage law is a strict liability statute.  It specifically provides for civil penalties to be imposed where a contractor or subcontractor has no intent to violate the law.  See G. L. c. 149, § 27C (b) (2).  Under a strict liability scheme, an employer’s reason for the violation is irrelevant; the fact of violation is sufficient for a penalty to issue.  Cf. Dixon v. Malden, 464 Mass. 446, 452 (2013), quoting Somers, supra at 591 (“Employers must ‘suffer the consequences’ of violating the statute regardless of intent”).  Accordingly, the Superior Court judge was correct in affirming the fourth citation.

b.  Authority of the chief administrative magistrate to review and approve a hearing officer’s decision in a § 27C (b) (4) appeal before final opinion issues.^[13]  Lighthouse contends that the language of § 27C (b) (4) makes it plain that the chief administrative magistrate lacks the authority to implement an internal review procedure for decisions of hearing officers in administrative appeals under that section.^[14]  Lighthouse points specifically to the use in § 27C (b) (4) of “hearing officer” in its last two sentences, and argues that the Legislature’s choice of “hearing officer” rather than DALA itself means that the decision is the responsibility of the hearing officer alone and cannot be subjected to any type of internal agency review.^[15]  We disagree.

First, § 27C (b) (4) itself contains no express language that supports Lighthouse’s reading.  Rather, the statute provides that a person aggrieved by a citation or order is to be granted a hearing before DALA governed by G. L. c. 30A, and then describes the range of outcomes available to the individual DALA hearing officer conducting that hearing.  (See note 15, supra.)  When the Legislature has wished to ensure that the decision of an individual hearing officer in an administrative agency is not to be subject to review by anyone else in the agency, including a supervising director, the Legislature has so indicated expressly.  See, e.g., G. L. c. 18, § 16 (director of division of hearings within Department of Transitional Assistance is responsible for training referees to conduct adjudicatory hearings under G. L. c. 30A on appeals by aggrieved parties, but “[n]either [the director] nor any other employee of the department shall review, interfere with, change or attempt to influence any hearing decision by a referee”).^[16]  Given these examples, we conclude that the absence of any similar directive in § 27C (b) (4) should not be ignored:  we will not read such a directive into § 27C (b) (4) when the Legislature has chosen not to include it.  See, e.g., Protective Life Ins. Co. v. Sullivan, 425 Mass. 615, 620-621 (1997); Commonwealth v. LeBlanc, 407 Mass. 70, 75 (1990); AFSCME, Council 93, Local 419 v. Sheriff of Suffolk County, 78 Mass. App. Ct. 249, 250-251 (2010).^[17]

Further, G. L. c. 7, § 4H, vests the chief administrative magistrate of DALA with substantial authority over the agency’s direction and administration.  The statute specifically provides that the chief administrative magistrate is wholly responsible for hiring the staff necessary to do the work of DALA, including administrative magistrates (hearing officers), and assigning them to handle particular types of cases.  In contrast to the statutes cited in the previous paragraph and in note 16, supra, there is no language in § 4H limiting the chief administrative magistrate’s authority to review decisions of the hearing officers working within DALA.  Instead, § 4H provides that “[i]t shall be the responsibility of said chief administrative magistrate to organize his division to provide speedy and fair disposition of all appeals and to establish policies that will encourage and aid parties in limiting and consolidating issues and pleadings to the superior court.”^[18]  A policy providing for internal review of hearing officers’ decisions by other hearing officers and the chief administrative magistrate for purposes of quality control fits within this legislative directive.

That said, it is obvious that any internal review policy must operate within boundaries that respect and protect the capacity of an individual DALA hearing officer to exercise independent professional judgment in hearing and deciding administrative appeals; the integrity of the administrative adjudicatory process demands no less.  The hearing officer is the one who presides over the § 27C (b) (4) hearing; hears the witnesses who testify and determines their credibility; and finds facts based on the evidentiary record presented.  The hearing officer’s credibility judgments and findings of fact generally are entitled to deference, and an internal agency review process should not be used to reject or change the findings on the ground that the chief administrative magistrate disagrees with them or would not have made them.  Cf. Andrews v. Civil Serv. Comm’n, 446 Mass. 611, 616 (2006) (in reviewing decision of defendant commission, court “defer[s] . . . to the credibility determinations made by the hearing officer”); Guarino v. Director of the Div. of Employment Sec., 393 Mass. 89, 92 (1984) (in conducting judicial review of adjudicatory decision regarding unemployment benefits, judge “does not properly act as fact finder”; sole responsibility for finding facts rests with agency).  A hearing officer’s application of the law to the facts found  may properly be the subject of internal review, cf. Guarino, supra at 92-93, but there are limits:  if the hearing officer’s decision reflects a reasoned and reasonable application of the law to the facts, it would be inappropriate for an internal review process to be used to withhold DALA’s issuance of the decision solely because the chief administrative magistrate might reach a different result.^[19]

c.  Hearing officer substitution.  A separate but related aspect of Lighthouse’s procedural challenge is that because (in the view of Lighthouse) Fletcher’s decision was “complete” when she left DALA, Taylor had no authority to substitute herself as the hearing officer and cause her own decision rather than Fletcher’s to be issued as the DALA decision.  A major difficulty with this argument is that its factual premise is incorrect:  while Fletcher apparently considered that she had completed her decision months earlier, her decision had not been “issued” by DALA, the term that appears in the final two paragraphs of G. L. c. 7, § 4H, to equate with completion of an administrative appeal referred to DALA.  Nor had a copy been delivered or mailed to the parties, as contemplated by G. L. c. 30A, § 11 (7), (8).^[20]  As such, Fletcher’s decision was not “complete,” and the question is whether in such circumstances, another hearing officer (including the chief administrative magistrate) permissibly could take over and decide the Lighthouse appeal on the same administrative record.

Neither § 27C (b) (4) nor G. L. c. 30A addresses the question what happens when a hearing officer is not available to complete a decision.  The standard adjudicatory rules of practice and procedure set forth in 801 Code Mass. Regs. §§ 1.01 (1998) touch on the issue in 801 Code Mass. Regs. § 1.01(11)(e).^[21]  Taylor, in providing notice to the parties that she was assigning the Lighthouse appeal to herself, made reference to that regulation,but, as Lighthouse suggests, it is doubtful that § 1.01(11)(e) applies to an administrative appeal under § 27C (b) (4).^[22]  Nonetheless, even if the regulation does not apply directly in this case, it offers useful guidance for dealing with a situation — i.e., a hearing officer who conducted the administrative hearing becomes unavailable to complete the decision — that obviously can and does occur.  Taylor, as the substitute hearing officer, followed the substance of 801 Code Mass. Regs. § 1.01(11)(e):  after a hearing with the parties to explain that there would be a successor hearing officer, she appointed herself to fill that role and decided the Lighthouse appeal on the basis of the previously closed administrative record.^[23]  A comparison of Fletcher’s draft decision and Taylor’s decision indicates that Taylor took a different view of the legal principles, which affected the types of factual findings Taylor considered relevant.  Lighthouse does not appear to contest Taylor’s approach; its challenge is to Taylor’s stepping in at all, given that, in Lighthouse’s view, Fletcher’s decision was complete and constituted the binding administrative decision under § 27C (b) (4).^[24]  We have rejected that challenge, and conclude that Taylor’s actions in completing the § 27C (b) (4) hearing and administrative decision process were appropriate.

d.  Scope of review in a § 27C (b) (4) appeal of job classification opinion letters issued by DLS.  As previously indicated, after Lighthouse filed its appeal from the Attorney General’s citations with DALA, the Attorney General sought and obtained an opinion from DLS on the appropriate job classification — mason or laborer — for certain work performed by Lighthouse employees on the King Philip project.  The DALA decision authored by Taylor concluded that the DLS opinion letter was a binding job classification determination not subject to review in a § 27C (b) (4) proceeding.  See note 9, supra.  Lighthouse challenges this conclusion before us, arguing that the type of opinion letter by DLS at issue here is simply an informal pronouncement rendered after a job has been bid; that such opinion letters are not properly issued pursuant to G. L. c. 149, § 27; and that, as such, they are not binding on employers such as Lighthouse.  The Attorney General and DALA argue otherwise.