LUJAN, LABOR COMMISSIONER OF CALIFORNIA, et al. v. G & G FIRE SPRINKLERS, INC.

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189 OCTOBER TERM, 2000
Syllabus
LUJAN, LABOR COMMISSIONER OF CALIFORNIA,
et al. v. G & G FIRE SPRINKLERS, INC.
certiorari to the united states court of appeals for
the ninth circuit
No. 00–152. Argued February 26, 2001—Decided April 17, 2001
The California Labor Code (Code) authorizes the State to order with-
holding of payments due a contractor on a public works project if a
subcontractor on the project fails to comply with certain Code require-
ments; permits the contractor, in turn, to withhold similar sums from
the subcontractor; and permits the contractor, or his assignee, to sue
the awarding body for alleged breach of the contract in not making
payment to recover the wages or penalties withheld. After petitioner
State Division of Labor Standards Enforcement (DLSE) determined
that respondent G & G Fire Sprinklers, Inc. (G & G), as a subcontractor
on three public works projects, had violated the Code, it issued notices
directing the awarding bodies on those projects to withhold from the
contractors an amount equal to the wages and penalties forfeited due
to G & G’s violations. The awarding bodies withheld payment from
the contractors, who in turn withheld G & G’s payment. G & G filed a
42 U. S. C. § 1983 suit against DLSE and other state petitioners in
the District Court, claiming that the issuance of the notices without a
hearing deprived it of property without due process in violation of the
Fourteenth Amendment. The court granted G & G summary judg-
ment, declared the relevant Code sections unconstitutional, and enjoined
the State from enforcing the provisions against G & G. The Ninth Cir-
cuit affirmed. This Court granted certiorari, vacated that judgment,
and remanded for reconsideration in light of its decision in American
Mfrs. Mut. Ins. Co. v. Sullivan, 526 U. S. 40, that the respondents there
had no property interest in payment for disputed medical treatment
pending review of the treatment’s reasonableness and necessity, as au-
thorized by state law. On remand, the Ninth Circuit reinstated its
prior judgment and opinion, explaining that G & G’s rights were vio-
lated not because it was deprived of immediate payment, but because
the state statutory scheme afforded no hearing at all.
Held: Because state law affords G & G sufficient opportunity to pursue
its claim for payment under its contracts in state court, the statutory
scheme does not deprive it of due process. In each of this Court’s

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190 LUJAN v. G & G FIRE SPRINKLERS, INC.
Syllabus
cases relied upon by the Ninth Circuit, the claimant was denied a right
by virtue of which he was presently entitled either to exercise own-
ership dominion over real or personal property, or to pursue a gain-
ful occupation. See, e. g., United States v. James Daniel Good Real
Property, 510 U. S. 43, 62. Unlike those claimants, G & G has not been
deprived of any present entitlement. It has been deprived of payment
that it contends it is owed under a contract, based on the State’s deter-
mination that it failed to comply with the contract’s terms. That prop-
erty interest can be fully protected by an ordinary breach-of-contract
suit. If California makes ordinary judicial process available to G & G
for resolving its contractual dispute, that process is due process. Here,
the Code, by allowing a contractor to assign the right of suit, provides
a means by which a subcontractor may bring a breach-of-contract suit
to recover withheld payments. That damages may not be awarded
until the suit’s conclusion does not deprive G & G of its claim. Even
if G & G could not obtain assignment, it appears that a breach-of-
contract suit against the contractor remains available under state
common law, although final determination of the question rests in the
hands of the California courts. Pp. 195–199.
204 F. 3d 941, reversed.
Rehnquist, C. J., delivered the opinion for a unanimous Court.
Thomas S. Kerrigan argued the cause and filed briefs for
petitioners.
Jeffrey A. Lamken argued the cause for the United States
as amicus curiae urging reversal. With him on the brief
were Solicitor General Waxman, Assistant Attorney Gen-
eral Ogden, Deputy Solicitor General Kneedler, Mark B.
Stern, Jacob M. Lewis, and Daniel L. Kaplan.
Stephen A. Seideman argued the cause and filed a brief
for respondent.*
*Briefs of amici curiae urging reversal were filed for the American
Federation of Labor and Congress of Industrial Organizations by Jona-
than P. Hiatt, James B. Coppess, Scott A. Kronland, and Laurence Gold;
and for the Port of Oakland et al. by David L. Alexander and Christopher
H. Alonzi.

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Opinion of the Court
Chief Justice Rehnquist delivered the opinion of the
Court.
The California Labor Code (Code or Labor Code) au-
thorizes the State to order withholding of payments due a
contractor on a public works project if a subcontractor on
the project fails to comply with certain Code requirements.
The Code permits the contractor, in turn, to withhold similar
sums from the subcontractor. The Court of Appeals for the
Ninth Circuit held that the relevant Code provisions violate
the Due Process Clause of the Fourteenth Amendment be-
cause the statutory scheme does not afford the subcontractor
a hearing before or after such action is taken. We granted
certiorari, 531 U. S. 924 (2000), and we reverse.
Petitioners are the California Division of Labor Standards
Enforcement (DLSE), the California Department of Indus-
trial Relations, and several state officials in their official
capacities. Respondent G & G Fire Sprinklers, Inc. (G & G),
is a fire-protection company that installs fire sprinkler sys-
tems. G & G served as a subcontractor on several Califor-
nia public works projects. “Public works” include construc-
tion work done under contract and paid for in whole or part
by public funds. Cal. Lab. Code Ann. § 1720 (West Supp.
2001). The department, board, authority, officer, or agent
awarding a contract for public work is called the “awarding
body.” § 1722 (West 1989). The California Labor Code re-
quires that contractors and subcontractors on such projects
pay their workers a prevailing wage that is determined by
the State. §§ 1771, 1772, 1773 (West 1989 and Supp. 2001).
At the time relevant here, if workers were not paid the pre-
vailing wage, the contractor was required to pay each worker
the difference between the prevailing wage and the wages
paid, in addition to forfeiting a penalty to the State. § 1775

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192 LUJAN v. G & G FIRE SPRINKLERS, INC.
Opinion of the Court
(West Supp. 2001).1 The awarding body was required to in-
clude a clause in the contract so stipulating. Ibid.
The Labor Code provides that “[b]efore making payments
to the contractor of money due under a contract for public
work, the awarding body shall withhold and retain there-
from all wages and penalties which have been forfeited
pursuant to any stipulation in a contract for public work,
and the terms of this chapter.” § 1727. If money is with-
held from a contractor because of a subcontractor’s failure to
comply with the Code’s provisions, “[i]t shall be lawful for
[the] contractor to withhold from [the] subcontractor under
him sufficient sums to cover any penalties withheld.” § 1729
(West 1989).2
The Labor Code permits the contractor, or his assignee,
to bring suit against the awarding body “on the contract
for alleged breach thereof in not making . . . payment”
to recover the wages or penalties withheld. §§ 1731, 1732
(West Supp. 2001). The suit must be brought within 90 days
of completion of the contract and acceptance of the job.
§ 1730. Such a suit “is the exclusive remedy of the contrac-
1 The Code also imposes restrictions on recordkeeping and working
hours, and at the time relevant here, the contractor was similarly pe-
nalized if the contractor or subcontractor failed to comply with them.
Cal. Lab. Code Ann. §§ 1776(a), (b), (g) (West Supp. 2001), 1813 (West 1989).
The awarding body was required to include a clause in the contract so
stipulating. §§ 1776(h), 1813.
Sections 1775, 1776, and 1813 were subsequently amended to provide
that both contractors and subcontractors may be penalized for failure to
comply with the Labor Code. §§ 1775(a), 1776(g), 1813 (West Supp. 2001).
Amendments to § 1775 also state that either the contractor or the sub-
contractor may pay workers the difference between the prevailing wage
and wages paid. § 1775(a).
2 Amendments to the Labor Code effective July 1, 2001, impose addi-
tional requirements on contractors. See § 1727(b) (West Supp. 2001)
(contractor shall withhold money from subcontractor at request of Labor
Commissioner in certain circumstances); § 1775(b)(3) (contractor shall
take corrective action to halt subcontractor’s failure to pay prevailing
wages if aware of the failure or be subject to penalties).

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Opinion of the Court
tor or his or her assignees.” § 1732. The awarding body
retains the wages and penalties “pending the outcome of the
suit.” § 1731.3
In 1995, DLSE determined that G & G, as a subcontractor
on three public works projects, had violated the Labor Code
by failing to pay the prevailing wage and failing to keep
and/or furnish payroll records upon request. DLSE issued
notices to the awarding bodies on those projects, directing
them to withhold from the contractors an amount equal to
the wages and penalties forfeited due to G & G’s violations.
The awarding bodies withheld payment from the contractors,
who in turn withheld payment from G & G. The total with-
held, according to respondent, exceeded $135,000. App. 68.
G & G sued petitioners in the District Court for the Cen-
tral District of California. G & G sought declaratory and
injunctive relief pursuant to Rev. Stat. § 1979, 42 U. S. C.
§ 1983, claiming that the issuance of withholding notices
without a hearing constituted a deprivation of property
without due process of law in violation of the Fourteenth
Amendment. The District Court granted respondent’s
motion for summary judgment, declared §§ 1727, 1730–1733,
1775, 1776(g), and 1813 of the Labor Code unconstitutional,
and enjoined the State from enforcing these provisions
3 Sections 1730–1733 of the Code have been repealed, effective July 1,
2001. Section 1742 has replaced them. It provides that “[a]n affected
contractor or subcontractor may obtain review of a civil wage and penalty
assessment [under the Code] by transmitting a written request to the
office of the Labor Commissioner.” § 1742(a). The contractor or sub-
contractor is then entitled to a hearing before the Director of Industrial
Relations, who shall appoint an impartial hearing officer. Within 45 days
of the hearing, the director shall issue a written decision affirming, modify-
ing, or dismissing the assessment. A contractor or subcontractor may
obtain review of the director’s decision by filing a petition for a writ of
the mandate in state superior court. §§ 1742(b), (c). These provisions
are not yet in effect and these procedures were not available to respondent
at the time of the withholding of payments at issue here.

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Opinion of the Court
against respondent. App. to Pet. for Cert. A85–A87. Peti-
tioners appealed.
A divided panel of the Court of Appeals for the Ninth Cir-
cuit affirmed. G & G Fire Sprinklers, Inc. v. Bradshaw, 156
F. 3d 893, 898 (1998) (Bradshaw I). The court concluded
that G & G “has a property interest in being paid in full for
the construction work it has completed,” id., at 901, and
found that G & G was deprived of that interest “as a result
of the state’s action,” id., at 903. It decided that because
subcontractors were “afforded neither a pre- nor post-
deprivation hearing when payments [were] withheld,” the
statutory scheme violated the Due Process Clause of the
Fourteenth Amendment. Id., at 904.
Following Bradshaw I, we decided American Mfrs. Mut.
Ins. Co. v. Sullivan, 526 U. S. 40 (1999), where respondents
also alleged a deprivation of property without due process
of law, in violation of the Fourteenth Amendment. Sullivan
involved a challenge to a private insurer’s decision to with-
hold payment for disputed medical treatment pending re-
view of its reasonableness and necessity, as authorized by
state law. We held that the insurer’s action was not “fairly
attributable to the State,” and that respondents therefore
failed to satisfy a critical element of their § 1983 claim.
Id., at 58. We also decided that because state law entitled
respondents to reasonable and necessary medical treatment,
respondents had no property interest in payment for medical
treatment not yet deemed to meet those criteria. Id., at 61.
We granted certiorari in Bradshaw I, vacated the judgment
of the Court of Appeals, and remanded for reconsideration
in light of Sullivan. Bradshaw v. G & G Fire Sprinklers,
Inc., 526 U. S. 1061 (1999).
On remand, the Court of Appeals reinstated its prior
judgment and opinion, again by a divided vote. The court
held that the withholding of payments was state action be-
cause it was “specifically directed by State officials . . . [and]
the withholding party has no discretion.” G & G Fire

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Opinion of the Court
Sprinklers, Inc. v. Bradshaw, 204 F. 3d 941, 944 (CA9 2000).
In its view, its prior opinion was consistent with Sullivan
because it “specifically held that G & G did not have a right
to payment of the disputed funds pending the outcome of
whatever kind of hearing would be afforded,” and “explicitly
authorized the withholding of payments pending the hear-
ing.” 204 F. 3d, at 943. The court explained that G & G’s
rights were violated not because it was deprived of immedi-
ate payment, but “because the California statutory scheme
afforded no hearing at all when state officials directed that
payments be withheld.” Id., at 943–944.
Where a state law such as this is challenged on due proc-
ess grounds, we inquire whether the State has deprived
the claimant of a protected property interest, and whether
the State’s procedures comport with due process. Sullivan,
supra, at 59. We assume, without deciding, that the with-
holding of money due respondent under its contracts oc-
curred under color of state law, and that, as the Court of
Appeals concluded, respondent has a property interest of the
kind we considered in Logan v. Zimmerman Brush Co., 455
U. S. 422 (1982), in its claim for payment under its contracts.
204 F. 3d, at 943–944. Because we believe that California
law affords respondent sufficient opportunity to pursue that
claim in state court, we conclude that the California statu-
tory scheme does not deprive G & G of its claim for pay-
ment without due process of law. See Logan, supra, at 433
(“[T]he Due Process Clause grants the aggrieved party the
opportunity to present his case and have its merits fairly
judged”).
The Court of Appeals relied upon several of our cases
dealing with claims of deprivation of a property interest
without due process to hold that G & G was entitled to a
reasonably prompt hearing when payments were withheld.
Bradshaw I, supra, at 903–904 (citing United States v. James
Daniel Good Real Property, 510 U. S. 43 (1993); FDIC v.
Mallen, 486 U. S. 230 (1988); Barry v. Barchi, 443 U. S. 55

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Opinion of the Court
(1979)). In Good, we held that the Government must afford
the owner of a house subject to forfeiture as property used
to commit or to facilitate commission of a federal drug of-
fense notice and a hearing before seizing the property. 510
U. S., at 62. In Barchi, we held that a racetrack trainer
suspended for 15 days on suspicion of horse drugging was
entitled to a prompt postdeprivation administrative or judi-
cial hearing. 443 U. S., at 63–64. And in Mallen, we held
that the president of a Federal Deposit Insurance Corpora-
tion (FDIC) insured bank suspended from office by the FDIC
was accorded due process by a notice and hearing proce-
dure which would render a decision within 90 days of the
suspension. 486 U. S., at 241–243. See also Sniadach v.
Family Finance Corp. of Bay View, 395 U. S. 337 (1969)
(holding that due process requires notice and a hearing be-
fore wages may be garnished).
In each of these cases, the claimant was denied a right
by virtue of which he was presently entitled either to ex-
ercise ownership dominion over real or personal property,
or to pursue a gainful occupation. Unlike those claimants,
respondent has not been denied any present entitlement.
G & G has been deprived of payment that it contends it
is owed under a contract, based on the State’s determina-
tion that G & G failed to comply with the contract’s terms.
G & G has only a claim that it did comply with those terms
and therefore that it is entitled to be paid in full. Though
we assume for purposes of decision here that G & G has a
property interest in its claim for payment, see supra, at 195,
it is an interest, unlike the interests discussed above, that
can be fully protected by an ordinary breach-of-contract suit.
In Cafeteria & Restaurant Workers v. McElroy, 367 U. S.
886, 895 (1961) (citations omitted), we said:
“The very nature of due process negates any concept
of inflexible procedures universally applicable to every
imaginable situation. ‘ “[D]ue process,” unlike some
legal rules, is not a technical conception with a fixed

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Opinion of the Court
content unrelated to time, place and circumstances.’ It
is ‘compounded of history, reason, the past course of
decisions . . . .’ ”
We hold that if California makes ordinary judicial process
available to respondent for resolving its contractual dispute,
that process is due process.
The California Labor Code provides that “the contractor
or his or her assignee” may sue the awarding body “on
the contract for alleged breach thereof ” for “the recovery
of wages or penalties.” §§ 1731, 1732 (West Supp. 2001).
There is no basis here to conclude that the contractor would
refuse to assign the right of suit to its subcontractor. In
fact, respondent stated at oral argument that it has sued
awarding bodies in state superior court pursuant to §§ 1731–
1733 of the Labor Code to recover payments withheld on
previous projects where it served as a subcontractor. See
Tr. of Oral Arg. 27, 40–41, 49–50. Presumably, respond-
ent brought suit as an assignee of the contractors on those
projects, as the Code requires. § 1732 (West Supp. 2001).
Thus, the Labor Code, by allowing assignment, provides a
means by which a subcontractor may bring a claim for breach
of contract to recover wages and penalties withheld.
Respondent complains that a suit under the Labor Code
is inadequate because the awarding body retains the wages
and penalties “pending the outcome of the suit,” § 1731,
which may last several years. Tr. of Oral Arg. 51. A law-
suit of that duration, while undoubtedly something of a
hardship, cannot be said to deprive respondent of its claim
for payment under the contract. Lawsuits are not known
for expeditiously resolving claims, and the standard practice
in breach-of-contract suits is to award damages, if appro-
priate, only at the conclusion of the case.
Even if respondent could not obtain assignment of the
right to sue the awarding body under the contract, it ap-
pears that a suit for breach of contract against the contrac-
tor remains available under California common law. See 1

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B. Witkin, Summary of California Law §§ 791, 797 (9th ed.
1987) (defining breach as the “unjustified or unexcused . . .
failure to perform a contract” and describing the remedies
available under state law). To be sure, § 1732 of the Labor
Code provides that suit on the contract against the awarding
body is the “exclusive remedy of the contractor or his or her
assignees” with respect to recovery of withheld wages and
penalties. § 1732 (West Supp. 2001). But the remedy is ex-
clusive only with respect to the contractor and his assignees,
and thus by its terms not the exclusive remedy for a subcon-
tractor who does not receive assignment. See, e. g., J & K
Painting Co., Inc. v. Bradshaw, 45 Cal. App. 4th 1394, 1402,
53 Cal. Rptr. 2d 496, 501 (1996) (allowing subcontractor to
challenge Labor Commissioner’s action by petition for a writ
of the mandate).
In J & K Painting, the California Court of Appeal re-
jected the argument that § 1732 requires a subcontractor
to obtain an assignment and that failure to do so is “fatal to
any other attempt to secure relief.” Id., at 1401, n. 7, 53
Cal. Rptr. 2d, at 501, n. 7. The Labor Code does not ex-
pressly impose such a requirement, and that court declined
to infer an intent to “create remedial exclusivity” in this
context. Ibid. It thus appears that subcontractors like re-
spondent may pursue their claims for payment by bringing
a standard breach-of-contract suit against the contractor
under California law. Our view is necessarily tentative,
since the final determination of the question rests in the
hands of the California courts, but respondent has not con-
vinced us that this avenue of relief is closed to it. See id.,
at 1401, and n. 4, 53 Cal. Rptr. 2d, at 500, and n. 4 (noting
that the contractor might assert a variety of defenses to the
subcontractor’s suit for breach of contract without evaluating
their soundness). As the party challenging the statutory
withholding scheme, respondent bears the burden of dem-
onstrating its unconstitutionality. Cf. INS v. Chadha, 462
U. S. 919, 944 (1983) (statutes presumed constitutional). We

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therefore conclude that the relevant provisions of the Cali-
fornia Labor Code do not deprive respondent of property
without due process of law. Accordingly, the judgment of
the Court of Appeals is reversed.
It is so ordered.