The opinion of the court was delivered by: MCCLURE
This cases requires the court to determine whether a statute that requires contractors to hire Pennsylvania residents to work on state-funded public works violates the Privileges and Immunities Clause of the Constitution of the United States. Plaintiffs, a highway construction contractor and two of its employees, initiated this action with the filing of a complaint on December 16, 1994. The complaint alleges that the plaintiff contractor was awarded a contract for road construction within the Commonwealth of Pennsylvania, but later was informed that payment on the contract might be withheld because the two employees were residents of the State of New York. On January 20, 1995, the court issued a preliminary injunction against the enforcement of the allegedly offending statute.
The complaint sets forth four counts: under the Privileges and Immunities Clause, U.S. Const., art. IV, § 2, cl. 1 (Count I); under the Equal Protection Clause, U.S. Const., amend. IV (Count II); pursuant to 42 U.S.C. § 1983, with no specific provision of the Constitution or federal law otherwise set forth (Count III); and under the Constitution of the Commonwealth of Pennsylvania, specifically Pa. Const. art. I, § 1, and art. III, § 32 (Count IV).
Before the court is a motion by defendants for partial summary judgment, and a motion by plaintiffs for partial summary judgment and a permanent injunction. The motions relate to Count I of the complaint, the Privileges and Immunities Clause claim, upon which plaintiffs in large part appear to rely for the merits of their case.
Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c) (emphasis added).
... The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be 'no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is 'entitled to judgment as a matter of law' because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.
Celotex v. Catrett, 477 U.S. 317, 323-324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
The moving party bears the initial responsibility of stating the basis for its motions and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. He or she can discharge that burden by "showing ... that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 323, 325.
Issues of fact are genuine "only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 694 (3d Cir. 1988) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)). Material facts are those which will affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248. In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the non-moving party. White v. Westinghouse Electric Co., 862 F.2d 56, 59 (3d Cir. 1988).
The parties have stipulated to the following facts:
1. Plaintiff A.L. Blades & Sons, Inc. ("Blades"), is a heavy and highway contracting business, with a principal place of business at 7610 County Route 65, P.O. Box 590, Hornell, New York 14843. Blades is licensed to do business in, among other states, the Commonwealth of Pennsylvania.
2. Plaintiff Jeffrey Elliot is an adult individual who performs work as a Class I Laborer for Blades as work is available, and is a citizen and resident of the State of New York, with an address of 3965 Railroad Avenue, Scio, New York 14880.
3. Plaintiff Simon R. Barnes is an adult individual who performs work as a Class III Laborer for Blades as work is available, and is a citizen and resident of the State of New York, with an address of 1070 North Main Street, Limestone, New York 14753.
4. Defendants, who are sued in their individual and official capacities, are officials of the Pennsylvania Department of Transportation ("PennDOT"), including the Secretary of Transportation, the Deputy Secretary for Highway Administration, the District Engineer for Engineering District 2-0, the Assistant District Engineer for Construction in District 2-0, and an Assistant Construction Engineer in District 2-0.
5. PennDOT publishes standard specifications which are included in all of its contracts for highway construction, commonly known as the "Form 408 Specifications."
6. Section 107.26 of Form 408 reads:
107.26 SELECTION OP LABORERS AND MECHANICS -- This section does not apply to projects which are partially or totally financed with Federal funds.
(a) Residence Requirements. Laborers and mechanics to be employed for work under the contract are required, by Act 1935-414, to have been residents of the State for a period of at least 90 days prior to their starting work on the contract. Failure to comply with these provisions will be sufficient reason to refuse paying the contract price.
(b) Veteran's Preference. In employment on public works, provisions of 51 P.S. 492.1 require a preferential rating, similar to that given to State employees, to any soldier making application for employment and on intended discharge for reduction in force. The word "soldier," as used in the cited act, means a person who served in the armed forces of the United States or in any official women's organization, during any war or armed conflict in which the United States was engaged, and who has an honorable discharge from such service.
Stipulation, Joint Exhibit 1.
7. On May 12, 1994, bids were opened for a project to be constructed in Potter County, Pennsylvania. The project was funded entirely by the Commonwealth.
8. Blades was the apparent low bidder for the project, and the contract was awarded to Blades on September 14, 1994.
9. The project was to be performed in Potter County, Pennsylvania, which is located geographically within Engineering District 2-0, and is in this judicial district.
10. Prior to the execution of the contract, at a preconstruction meeting held in September, 1994, Benjamin LaParne, the Assistant Construction Engineer assigned to the project, specifically discussed the residency requirements of Section 107.26 of Form 408.
12. Upon receipt of the notice to proceed, Blades proceeded to perform work on the project. Included among the individuals Blades employed to work on the project were plaintiffs Jeffrey Elliot and Simon Barnes, both of whom are New York residents.
13. On November 23, 1994, Blades received a letter signed by Frank Latosky which informed Blades that both Section 107.26 of the Form 408 Specifications and Act 1935-414 prohibited the use of non-resident laborers and mechanics on 100% state-funded projects. The letter further informed Blades that "Timothy Elliott" was not a resident of Pennsylvania, and that until such time as Blades was in compliance with Act 1935-414, no payments would be made for work performed. The letter further indicated that continued non-compliance may result in Blades being declared in default of the contract, and may adversely affect Blades' prequalification status to do work in Pennsylvania.
14. Subsequently, on December 12, 1994, Blades received a letter from Mr. Latosky which clarified his November 23, 1994, letter. In the December 12 letter, Mr. Latosky noted that while Timothy Elliott (who had been identified in the November 23 letter) was a Pennsylvania resident, that Jeffrey Elliott [sic.] and Simon Barnes were not. Latosky then reiterated the threats to enforce the residency requirement against plaintiffs.
15. As reflected in the December 12 letter, defendants withheld payments totalling $ 18,171.00 from Blades for work performed on the project.
16. Accordingly, Commonwealth officials charged with the duty of enforcing the statute have both threatened to enforce the statute, and have actually enforced the statute as ...