Indep. Training v. Cal. Dep't Indus. Relations, No. 11-17763 (9th Cir. 2013)
Annotate this CaseI-TAP, an approved apprenticeship program for Federal purposes, but not recognized by California as a state-approved apprenticeship program, filed suit seeking declaratory and injunctive relief on the ground that the CDIR's actions were inconsistent with the National Apprenticeship Act of 1937 (Fitzgerald Act). The court concluded that federal subject-matter jurisdiction existed in this case; the court declined to afford controlling deference to the DOL's new interpretation of the meaning of "Federal purposes" under 29 C.F.R. 29.2 under Auer v. Robbins, but nevertheless adopted that interpretation as the most persuasive construction of the regulation at issue; the court adopted the DOL's new interpretation of Federal purposes, which required of agreements, contracts, etc., that conformity with federal apprenticeship standards be a condition for the federal assistance at issue; plaintiffs' preemption claim failed where the three projects at issue did not qualify as Federal purposes, and it was not impermissible for the CDIR to require the contractors on the projects to comply with California's apprenticeship standards; and plaintiffs' dormant Commerce Clause, equal protection, and substantive due process challenges failed. Accordingly, the court affirmed the judgment of the district court.
Court Description: Labor Law. The panel affirmed the district court’s judgment in favor of the defendants in a suit seeking declaratory and injunctive relief on the ground that the California Department of Industrial Relations’ actions were inconsistent with federal Fitzgerald Act regulations governing the employment of apprentices on public works projects qualifying as “Federal purposes.” The CDIR threatened to impose fines on two contractors that used apprentices enrolled in an apprenticeship program that was registered with the United States Department of Labor as an approved program for “Federal purposes” but that was not recognized by California as a state-approved apprenticeship program. The panel held that, regardless of whether the Fitzgerald Act confers a private right of action, there was subject matter jurisdiction because the plaintiffs sought injunctive relief from state regulation on the ground that it was preempted by a federal statute. The panel declined to afford controlling deference to the Secretary of Labor’s new interpretation, in an amicus brief, of the meaning of “Federal purposes” under 29 C.F.R. § 29.2 because that interpretation was inconsistent with a prior interpretation, and there was a significant potential for unfair surprise. The panel nevertheless adopted the Secretary’s new interpretation as the most persuasive construction of the regulation and held that a project qualifies as a “Federal purpose” under § 29.2 when conformity with federal apprenticeship standards is a condition of eligibility for federal assistance. The panel held that the CDIR’s actions were not in contravention of the federal apprenticeship regulations because the construction projects at issue did not qualify as “Federal purposes.” Accordingly, the plaintiffs’ preemption claim failed. The panel also affirmed the district court’s judgment on claims under the dormant Commerce Clause and the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Judge Murguia concurred in the opinion. She wrote separately to highlight that allowing the Department of Labor to retroactively withdraw a conclusive interpretation of its own ambiguous regulation exposed the parties to the same risk of unfair surprise as would deferring to the agency’s new interpretation.
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