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The Supreme Court 4/17/01 upheld a California Labor Code provision authorizing the state to order that payments due a contractor on a public works project be withheld if the state determines that a project subcontractor failed to comply with certain Code requirements; the contractor may, in turn, withhold payment to the subcontractor under the provision. Additionally, the provision creates a right of action in the Contractor or his assignee to sue the state agency that awarded the contract for breach of contract. A divided panel of the Ninth Circuit held that because the scheme failed to provide the subcontractor with any hearing before or after payments are withheld, it violated the Fourteenth Amendment's Due Process Clause. In a brief opinion, a unanimous Supreme Court reversed, holding that because the subcontractor could sue the awarding agency as the contractor's assignee, or bring a common law breach-of-contract action in its own right, it was not denied an opportunity to be heard. The decision is important to all businesses that engage in public contracts and, more broadly, to any business that may be subject to a provision similar in effect to the one at issue in this case.