Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-01024/USCOURTS-casd-3_15-cv-01024-1/pdf.json

Nature of Suit Code: 130
Nature of Suit: Miller Act
Cause of Action: 

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

FOR THE USE AND BENEFIT OF:

HELIX ELECTRIC, INC., a California

corporation,

Plaintiff,

CASE NO. 15cv1024-WQH-KSC

ORDER

v.

KISAQ RQ 8A 2JV, a joint venture;

FEDERAL INSURANCE

COMPANY, a New Jersey

corporation; and WESTERN SURETY

COMPANY, a South Dakota

corporation, 

Defendants

KISAQ RQ 8A 2JV, a joint venture,

 Counter Claimant,

 v.

UNITED STATES OF AMERICA

FOR THE USE AND BENEFIT OF:

HELIX ELECTRIC, INC., a California

corporation; TRAVELERS

CASUALTY & SURETY COMPANY

OF AMERICA; and ROES 1 through

10, inclusive, 

 Counter Defendants.

HAYES, Judge:

The matter before the Court is the motion to dismiss this action for lack of federal

jurisdiction filed by Counter-Defendant United States of America for the Use and

Benefit of Helix Electric. Inc. (“Helix”). (ECF No. 54). 

- 1 - 15cv1024-WQH-KSC

Case 3:15-cv-01024-WQH-KSC Document 64 Filed 11/09/17 PageID.<pageID> Page 1 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

I. BACKGROUND

On May 7, 2015, the United States of America for the Use and Benefit of Helix

Electric, Inc. (“Helix”) initiated this action by filing a Complaint against the KISAQ

RQ 8A 2JV (“JV”), Federal Insurance Company, and Western Surety Company. (ECF

No. 1). The Complaint alleges the following claims for relief: (1) breach of subcontract

against the JV, (2) recovery under the Miller Act Payment Bond against Federal

Insurance and Western Surety, and (3) quantum meruit against the JV. Id. The

Complaint alleges, “Jurisdiction in this matter is conferred under 40 U.S.C. sections

3131-3134 (Miller Act). The Court has pendent and supplemental jurisdiction over the

state law claims alleged in the Complaint pursuant to 28 U.S.C. section 1367.” (ECF

No. 1 at 1). 

On August 10, 2015, the JV, Federal Insurance, and Western Surety collectively

filed an Answer. (ECF No. 8 at 1-8). The JV also brought a counterclaim alleging

breach of subcontract against Helix. Further, the JV alleged a counterclaim for recovery

under performance and payment bond against Travelers Casualty & Surety Company

of America (“Travelers”). (ECF No. 8 at 9-18).

On October 31, 2016, Federal Insurance, the JV, and Western Surety filed a

motion for partial summary judgment and summary judgment. (ECF No. 25). The JV,

Federal Insurance, and Western Surety moved for summary judgment as to the three

causes of action alleged by Helix in Helix’s complaint and the JV moved for partial

summary judgment as to liability on the JV’s counterclaim for breach of subcontract

arising from the Helix’s alleged (1) failure to adequately staff the project, (2)

abandonment of the project, and (3) defective work. Id.

On February 24, 2017, the Court heard oral argument on the motion for summary

judgment and partial summary judgment. During oral argument, Helix moved to

dismiss Helix’s Complaint against the JV, Federal Insurance and Western Surety with

prejudice. The Court orally granted the motion and dismissed the Complaint against

the JV, Federal Insurance, and Western Surety with prejudice. 

- 2 - 15cv1024-WQH-KSC

Case 3:15-cv-01024-WQH-KSC Document 64 Filed 11/09/17 PageID.<pageID> Page 2 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 On April 10, 2017, the Court issued an order stating 

IT IS HEREBY ORDERED that the JV’s motion for partial summary judgment (ECF No. 25) as to liability on its counterclaims

against Helix is GRANTED as to liability on the breach of subcontract

arising from Helix’s abandonment of the project and defective work on the end line splices and crimping conditions and otherwise DENIED.

IT IS FURTHER ORDERED that Helix’s complaint against the JV, Federal Insurance, and Western Surety is dismissed with prejudice. (ECF No. 1). The motion for summary judgment filed by the JV, Federal

Insurance, and Western Surety (ECF No. 25) as to the causes of action alleged in Helix’s complaint is DENIED as moot. 

(ECF No. 50). The Court granted summary judgment to the JV on its breach of

subcontract counterclaim arising from Helix’s abandonment of the project and defective

work on the end line splices and crimping conditions as to liability only; the Court has

not yet made any ruling as to damages relating to these issues. The following causes

of action, which were not resolved on summary judgment, also remain pending before

the Court: the JV’s counterclaim against Travelers for recovery under performance and

payment bond and the JV’s counterclaim against Helix for breach of subcontract arising

from Helix’s failure to adequately staff the project.

II. CONTENTIONS OF THE PARTIES

Helix contends that this action should be dismissed in its entirety for lack of

jurisdiction.1

 (ECF No. 54). Helix contends that there is no diversity between the

parties and the only federal claim in this action, the Miller Act claim, has been

dismissed with prejudice. Id. at 4-5. Helix contends that the Court should decline to

exercise supplemental jurisdiction over the remaining state law claims. Helix contends

that there is no reason for this Court to retain jurisdiction because only state law claims

remain and “principles of comity are well-served by allowing the state courts to resolve

claims solely of state law.” Id. at 6. Helix contends that there will be “minimal

redundancy or waste of judicial resources if this case is dismissed” at this stage in the

proceedings. Id. at 9. Helix contends that the JV has failed to satisfy its burden to

1

 Helix request for judicial notice of certain facts and documents is denied as

unnecessary. See, e.g., Asvesta v. Petroutsas, 580 F.3d 1000, 1010 n. 12 (9th Cir. 2009) (denying request for judicial notice where judicial notice would be “unnecessary”). 

- 3 - 15cv1024-WQH-KSC

Case 3:15-cv-01024-WQH-KSC Document 64 Filed 11/09/17 PageID.<pageID> Page 3 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

establish jurisdiction under the federal enclave doctrine. (ECF No. 62 at 6). Helix

contends that the principle behind federal enclave jurisdiction of ensuring that no area

is left without laws regulating private rights is inapplicable where the dispute centers

around a contract in which the parties voluntarily subject themselves to California law. 

Id. Helix contends that federal enclave jurisdiction does not apply because MCAS

Cherry Point is not the locus where the breach of contract claim arose. Id. at 7. Further,

Helix contends that portions of MCAS Cherry Point are not a federal enclave. Id. at 8. 

The JV contends that this motion is “an attempt to forum shop and seek a re-start

of this matter” due to Helix’s failure to diligently litigate the case and various rulings

against it. (ECF No. 59 at 1). The JV contends that the Court should exercise

supplemental jurisdiction over the remaining claims in order to ensure fairness, promote

judicial economy, and discourage forum-shopping. Id. at 2. The JV contends that Helix

is “trying to frustrate the potential enforcement of a judgment against it” and that

dismissal would be “extremely unfair” to the JV given the late stage and posture of this

case. Id. at 10. The JV further contends that the Court properly has federal question

jurisdiction under 28 U.S.C. § 1331 through federal enclave jurisdiction. The JV

contends that MCAS Cherry Point is a federal enclave and district courts properly have

jurisdiction “over disputes arising therefrom.” Id. at 6. 

III. DISCUSSION

Pursuant 28 U.S.C. § 1367, “in any civil action of which the district courts have

original jurisdiction, the district courts shall have supplemental jurisdiction over all

other claims that are so related to claims in the action within such original jurisdiction

that they form part of the same case or controversy under Article III of the United States

Constitution.” 28 U.S.C. § 1367. “A state law claim is part of the same case or

controversy when it shares a ‘common nucleus of operative fact’ with the federal claims

. . . .” Bahrampour v. Lampert, 356 F.3d 969, 978 (9th Cir. 2004). A district court may

decline to exercise supplemental jurisdiction over a state law claim if:

(1) the claim raises a novel or complex issue of State law,

(2) the claim substantially predominates over the claim or claims

- 4 - 15cv1024-WQH-KSC

Case 3:15-cv-01024-WQH-KSC Document 64 Filed 11/09/17 PageID.<pageID> Page 4 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. §1367(c). In deciding whether to exercise supplemental jurisdiction, a court

must consider the underlying objective of “most sensibly accommodating the values of

economy, convenience, fairness, and comity.” Exec. Software N. Am., Inc. v. USDC for

the Cent. Dist. of Calif., 24 F.3d 1545, 1557 (9th Cir. 1994) (internal quotations

omitted). 

“The decision whether to continue to exercise supplemental jurisdiction over

state law claims after all federal claims have been dismissed lies within the district

court's discretion.” Satey v. JPMorgan Chase & Co., 521 F.3d 1087, 1091 (9th Cir.

2008) (citing Foster v. Wilson, 504 F.3d 1046, 1051 (9th Cir. 2007)). “[I]n the usual

case in which all federal-law claims are eliminated before trial, the balance of factors

to be considered under the pendent jurisdiction doctrine—judicial economy,

convenience, fairness, and comity—will point toward declining to exercise jurisdiction

over the remaining state-law claims.” Id. (quoting Carnegie-Mellon Univ. v. Cohill,

484 U.S. 343, 351 (1988)). “However dismissal of the remaining state law claims is not

‘mandatory.’” Id. (quoting Carnegie-Mellon Univ., 484 U.S. at 350 n.7). 

The remaining causes of action arise under state law.2

 The Court has granted

partial summary judgment in favor of the JV on its breach of subcontract counterclaim

against Helix as to liability arising from certain defective work and from abandonment

of the project; however, the Court has not issued a ruling on the related damages. 

Further, the Court has not issued any ruling on the portion of the breach of subcontract

counterclaim related to Helix’s alleged failure to adequately staff the project. The Court

concludes that factors of judicial economy, fairness, and convenience to the parties

weigh in favor of the Court retaining jurisdiction in order to resolve counterclaims in

2

 Because the Court resolves this motion on other grounds, it does not reach any conclusion on whether federal enclave jurisdiction provides a separate basis for federal jurisdiction. 

- 5 - 15cv1024-WQH-KSC

Case 3:15-cv-01024-WQH-KSC Document 64 Filed 11/09/17 PageID.<pageID> Page 5 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

which the Court has previously entered an order determining liability on certain issues. 

The Court will continue to exercise supplemental jurisdiction over the state law claims

remaining in this action. See Satey, 521 F.3d at 1081.

IV. CONCLUSION

IT IS HEREBY ORDERED THAT the motion to dismiss for lack of jurisdiction

is DENIED. (ECF No. 54). 

DATED: November 9, 2017

WILLIAM Q. HAYES

United States District Judge

- 6 - 15cv1024-WQH-KSC

Case 3:15-cv-01024-WQH-KSC Document 64 Filed 11/09/17 PageID.<pageID> Page 6 of 6