Opinion ID: 621521
Heading Depth: 1
Heading Rank: 5

Heading: The Miller Act and Federal Question Jurisdiction

Text: Arena asserted a claim under the Miller Act as a basis for his federal question subject-matter jurisdiction. Federal question jurisdiction arises when a plaintiff[ ] set[s] forth allegations `founded on a claim or right arising under the Constitution, treaties or laws of the United States.' Hart v. Bayer Corp., 199 F.3d 239, 243 (5th Cir.2000) (citations omitted). The purpose of the Miller Act is `to protect persons supplying labor and material for the construction of federal public buildings in lieu of the protection they might receive under state statutes with respect to the construction of nonfederal buildings.' U.S. for Use and Benefit of Water Works Supply Corp., v. George Hyman Constr. Co., 131 F.3d 28, 31 (1st Cir.1997) (citing U.S. ex rel. Sherman v. Carter, 353 U.S. 210, 216, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957)). The Act gives suppliers and subcontractors the right to sue a prime contractor in U.S. district court for the amount owed to them. See 40 U.S.C. § 3133(b)(1). The Act creates a right to sue when the plaintiff has furnished labor or material in carrying out work provided in a contract for which a payment bond is furnished under § 3131 of this title ... Id. This statutory scheme was created to protect parties such as subcontractors or suppliers who work on federal projects as state-law liens cannot be applied against federally-owned property and traditional state-law remedies are unavailable. See U.S. for Use of Gen. Elec. Supply Co. v. U.S. Fid. & Guar. Co., 11 F.3d 577, 580 (6th Cir.1993). The Miller Act itself does not explicitly mention that a bond is necessary to maintain jurisdiction under the statute. Federal case law, however, has established that a claim under the Miller Act cannot be maintained without it. Absent the existence of a bond, there can be no claim under the [Miller] statute. Faerber Elec. Co., Inc. v. Atlanta Tri-Com, Inc., 795 F.Supp. 240, 244 (N.D.Ill.1992) (citing Arvanis v. Noslo Eng'g Consultants, Inc., 739 F.2d 1287, 1290 (7th Cir.1984), cert. denied, 469 U.S. 1191, 105 S.Ct. 964, 83 L.Ed.2d 969 (1985)); see also United States v. Olympic Marine Servs., Inc., 827 F.Supp. 1232, 1234 n. 1 (E.D.Va.1993) (noting that federal courts maintain jurisdiction over Miller Act cases only if bonds have been provided). A subcontractor's right to sue for recovery under the Miller Act is traditionally limited to a general contractor's payment bond. See U.S. for Use and Benefit of Superior Sys. Inc., v. Levy Wrecking Co. Inc., No. 93-2440, 1994 WL 142113, at  (8th Cir. Apr. 22, 1994) (citations omitted) (unpublished). Indeed, satisfaction of the bond requirement to establish proper jurisdiction goes back for many years. The Honorable Judge Cardozo discussed the bond requirement in reference to the predecessor of the Miller Act. Judge Cardozo succinctly held: Congress has said that contractors shall be made liable to materialmen and laborers in an amount to be made determinate by the giving of the bond. The statutory liability, which in turn is inseparably linked to the statutory remedy, assumes the existence of a bond as an indispensable condition. Till then, there is neither federal jurisdiction nor any right of action that can rest upon the statute. Strong v. American Fence Constr. Co., 245 N.Y. 48, 52-53, 156 N.E. 92, 93 (1927) (citations omitted). Here, no bond was secured for the government project at issue. This fact is conceded by both Arena and Stevens. Arena, however, contends that the Fifth Circuit has recognized the existence of supplemental jurisdiction over state-law claims where a plaintiff's primary claim under the Miller Act has been dismissed. It cites to our decision in U.S. for the Use of American Bank v. C.I.T Constr. Inc. of Tex., 944 F.2d 253 (5th Cir.1991) to support its position. In American Bank, the district court determined that it lacked jurisdiction over American's claim under the Miller Act because American failed to file suit within the one-year period specified within the statute. We reversed, holding that the court should have exercised jurisdiction because Congress had supplied [the district court] with `express statutory jurisdiction' over any `action on a bond executed under [a] law of the United States,' which included a suit on a Miller Act payment bond. American Bank, 944 F.2d at 257 (citing U.S. ex rel. Tex. Bitulithic Co. v. Fid. and Deposit Co., 813 F.2d 697, 699 (5th Cir.1987)). In our holding, we clarified that the one-year period of the Miller Act is limitational and not jurisdictional, thus the district court had subject-matter jurisdiction. [6] Id. Because the one-year limitation rule is not jurisdictional, we remanded to the district court so that it could determine whether the exercise of pendent jurisdiction was proper over American's state-law claims. [7] Id. at 261. Arena's reliance on American Bank is misplaced as the key distinction between that holding and the instant case is that Arena's Miller Act claim is jurisdictionally deficient and fatally defective because the bond requirement was not satisfied. Proper federal question jurisdiction for his Miller Act claim was not established. Without a secured bond, there can be no Miller Act claim. And without his Miller Act claim, Arena lost the anchor of his federal question jurisdiction under 28 U.S.C. § 1331. Despite the dismissal of Arena's federal claim, the court determined that it properly retained jurisdiction over his state-law claims.