By Anonymous on Monday, February 04, 2002 - 02:04 pm:

If a sub supplies and installs signage for and at a federal construction project where the land is not owned by the fed. gov't, where there is a payment bond w/a Surety supplied by the Prime, and where there is a direct contract b/w the Prime and the Sub, can state ct. in any remote way be the proper forum in which to sue? As the land is not owned by the feds, and as the land is not "benefitted" by the signs,feed. ct. must be the forum, I believe.

By joel hoffman on Monday, February 04, 2002 - 04:31 pm:

Anon, US District Court is the proper venue for any action pusuant to the Miller Act, according to my information statement.

section 270b (b) of the Act states:
"Every suit instituted under this section shall be brought in the name of the United States for the use of the person suing, in the United States District Court for any district in which the contract was to be performed, and not elsewhere, irrespective of the amount in controversy in such suit..."

I don't know the nature of the project - is it a civil works project, undertaken by the Government on non-federal property?
happy sails! joel hoffman

By joel hoffman on Monday, February 04, 2002 - 04:45 pm:

Anon, if you are the sub, if you haven't already done it, I'd suggest that you contact the bonding company. The Government should furnish you basic information about the bond. happy sails! joel

By Anonymous on Tuesday, February 05, 2002 - 11:52 am:

My agency encountered a similar situation to what anon is describing. A sub on a federal construction contract with a Miller Act payment bond, performed work on private land. The sub wasn't paid by the prime contractor. Instead of going through federal district court the sub chose to go through state court. Unfortunately (especially for our program), the private landowner was named as a co-defendant in the suit brought by the sub. A real property lien was placed on the private land owners property IAW state law. We now have landowners (especially the private landowner named in this suit), who for good reason, are gunshy about entering into agreements for us to perform work on their property.

I think I read in "Construction Contracting" by Richard J. Bednar, et.al., GWU, that some states allow such suits, while others don't.

By Anon1 on Tuesday, February 05, 2002 - 12:00 pm:

Might it be appropriate in this type of situation that the Prime to a Federal entity might include a clause in its subcontracts that basically states (assuming ADR or some other dispute clause isn't in)that if the subcontract is a result of a Federal endeavor, that any litigation would be under Federal jurisdiction or in that forum?

By joel hoffman on Tuesday, February 05, 2002 - 12:12 pm:

State court action would be through a lien action. I asked my attorney about lien rights on Federal contracts on non-federal property, but he hasn't answered me, yet.

If liens are allowed, I'm not sure that a prime contractor can make a sub give up those statutory rights.

happy sails! joel

By Vern Edwards on Tuesday, February 05, 2002 - 12:32 pm:

(First) Anonymous:

You have expressly requested legal advice about court jurisdiction and litigant choice of forum. That's an extremely complicated legal matter--the answer to which may depend on the nature of the business undertaking, the applicable statutes and regulations, the identities of the parties, and the state(s) in which they reside and do business--with potentially significant legal consequences. You should obtain that advice from a lawyer whom you have hired for that purpose.

By Anonymous on Tuesday, February 05, 2002 - 01:57 pm:

Anonymous on Tuesday, February 05, 2002 - 11:52 am: Has your agency taken any steps to solve the problem? A private landowner who cooperates with a Federal program by allowing any such work on their property should be insulated from such actions. If not, any number of similar programs dependent upon such agreements will be damaged. There must be a legal or contracting solution.

By joel hoffman on Tuesday, February 05, 2002 - 03:26 pm:

Federal project on non-federal property may provide more than one remedy to an unpaid supplier, subcontractor or person providing labor. You should contact an attorney for specifics, depending upon the circumstances and location of the project. At any rate, an action against the payment bond is pursued in Federal District Court, as I stated earlier, not State Court. happy sails! joel

By Anonymous on Wednesday, February 06, 2002 - 03:42 am:

It is difficult to tell, but I get the impression the original post may be from the landowner. It is questioning the state court venue, hardly the position of the sub. It also appears the post is unlikely from the prime or the agency.

The question may well be that of a citizen who cooperated with the Federal government and now finds themself in a crunch. Personally, I can see how this could develop. The prime creates a problem and the agency throws up its hands helplessly because there is no specific instruction for defending a cooperative citizen from a state court action of this sort.

It certainly would be a warning to citizens that before agreeing to any such work they need to have a firm contract with "Uncle" to hold them blameless from any claim resulting from such cooperation. For example, if a third party were injured as a result of the work the landowner could be found liable in state court. Being a good citizen should not require such liability and the solution is not the so called rocket science.