Source: https://case-law.vlex.com/vid/417-u-s-116-606787774
Timestamp: 2020-08-14 15:12:03
Document Index: 38924737

Matched Legal Cases: ['§ 270', '§ 270', '§ 270', '§ 270', '§ 270', 'art.5']

417 U.S. 116 (1974), 72-1382, F.D. Rich Co., Inc. v. United States for the - Federal Cases - Case Law - VLEX 606787774
417 U.S. 116 (1974), 72-1382, F.D. Rich Co., Inc. v. United States for the
Docket Nº: No. 72-1382
Citation: 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703
Party Name: F.D. Rich Co., Inc. v. United States for the
94 S.Ct. 2157, 40 L.Ed.2d 703
F.D. Rich Co., Inc.
Petitioner F. D. Rich Co., the prime contractor on a federal housing project in California, had two separate contracts for the project with Cerpac Co., one contract being for Cerpac to select, modify, detail, and install all custom millwork and the other being for Cerpac to supply all exterior plywood. Cerpac, in turn, ordered the lumber called for under the plywood contract from respondent. When Rich needed plywood for another project in South Carolina, one of the shipments called for by respondent's contract with Cerpac was diverted to South Carolina. When Cerpac defaulted on its payments to respondent for the plywood, including the South Carolina shipment, respondent gave notice to Rich and its surety of a Miller Act claim, and thereafter brought suit in the Federal District Court for the Eastern District of California, where the California project was located. Finding that Cerpac was a "subcontractor" within the meaning of the Miller Act, rather than merely a materialman, that hence respondent [94 S.Ct. 2159] could assert a Miller Act claim against Rich, and that venue for suit on the South Carolina as well as the California shipments properly lay, under 40 U.S.C. § 270b(b), in the Eastern District of California, the District Court granted judgment for respondent for the amount due on the unpaid invoices, but denied its claim for attorneys' fees. The Court of Appeals affirmed in large part, but held that attorneys' fees should be awarded respondent.
1. Based on the substantiality and importance of its relationship with the prime contractor, MacEvoy Co. v. United States ex rel. Tomkins Co., 322 U.S. 102, Cerpac was clearly a subcontractor for Miller Act purposes, considering not just its plywood contract, but also its custom millwork contract on the California project. Moreover, Cerpac and Rich had closely interrelated management and financial structures, and their relationship on the California
project as the same as on many other similar projects; hence it would have been easy for Rich to secure itself from loss as a result of Cerpac's default. Pp. 121-124.
2. Venue for suit on the South Carolina shipment properly lay in the Eastern District of California, since there was clearly a sufficient nexus for satisfaction of § 270b(b)'s venue requirements. The contract between Cerpac and respondent was executed in California, all materials thereunder to be delivered to the California worksite. California remained the site for performance of the original contract despite the diversion of one shipment to South Carolina. There was no showing of prejudice resulting from the case's being heard in California, and considerations of judicial economy and convenience supported venue in the court where all of respondent's claims could be adjudicated in a single proceeding. Pp. 124-126.
(b) The provision of the Miller Act in 40 U.S.C. § 270b(a) that claimants should recover the "sums justly due," does not require the award of attorneys' fees on the asserted ground that, without such fee-shifting, claimants would not be fully compensated. To hold otherwise would amount to judicial obviation of the "American Rule" that attorneys' fees are not ordinarily recoverable in federal litigation in the absence of a statute or contract providing therefor, in the context of everyday commercial litigation, where the policies which underlie the limited judicially created departures from the rule are inapplicable. Pp. 128-131.
MARSHALL, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, STEWART, WHITE, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. DOUGLAS, J., filed an opinion dissenting in part, post, p. 131.
The Miller Act, 49 Stat. 793, as amended, 80 Stat. 1139, 40 U.S.C. § 270a et seq., requires a Government contractor1 to post a surety bond "for the protection of all persons supplying labor and material in the prosecution of the work provided for" in the contract. The Act further provides that any person who has so furnished labor or material and who has not been paid in full within 90 days after the last labor was performed or [94 S.Ct. 2160] material supplied may bring suit on the payment bond for the unpaid balance. 40 U.S.C. § 270b(a). This case presents several unresolved issues of importance in the administration of the Act.
During April and May, 1966, Cerpac fell behind in its payments to Industrial, and on July 13, 1966, having not received payment on invoices for nine separate shipments, Industrial gave notice to Rich and its surety of a Miller Act claim, and thereafter brought the instant action in the Federal District Court for the Eastern District of California.3 The District Court recognized that, under our decision in MacEvoy Co. v. United States ex rel. Tomkins Co., 322 U.S. 102 (1944), [94 S.Ct. 2161] Rich's liability turned on whether Cerpac was a "subcontractor" within the meaning of the Act, or merely a materialman. The District Court found that Cerpac was a subcontractor; hence Industrial, as its supplier, could assert a Miller Act claim against Rich, the prime contractor on the project. The District Court also rejected Rich's claim that venue for suit on the South Carolina shipment was improper in the Eastern District of California. Accordingly, the District Court granted judgment for Industrial, holding Cerpac4 and Rich as primary obligees and Transamerica on its bond, jointly and severally liable for the amount of all nine unpaid invoices, $31,402.97, including the amount
Both Rich and Industrial appealed. The Court of Appeals affirmed the judgment against Rich in large part.5 On Industrial's cross-appeal, the court reversed, holding that attorneys' fees should have been awarded to Industrial as a successful plaintiff under the Miller Act, and remanded to the District Court for consideration of the amount of attorneys' fees to be awarded. 473 F.2d 720 (CA9 1973). We granted certiorari.6 414 U.S. 816 (1973). We affirm the judgment below to the extent it holds that Cerpac was a "subcontractor" for Miller Act purposes and that there was...
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