Document: 434 U.S. 586 98 S.Ct. 873 55 L.Ed.2d 50 J. W. BATESON COMPANY, INC., et al., Petitioners,v.UNITED STATES ex rel. BOARD OF TRUSTEES the NATIONAL AUTOMATIC SPRINKLER INDUSTRY PENSION FUND al. No. 76-1476. Argued Nov. 30, 1977. Decided Feb. 22, 1978. Syllabus Petitioner prime contractor (Bateson) entered into a Government contract for construction of hospital addition and posted payment bond as required by Miller Act to protect those who have direct contractual relationship with either or "subcontractor." Bateson then subcontracted portion work firm (Pierce) which in turn another (Colquitt) installation sprinkler system. When Colquitt failed pay over amounts withheld from its employees' wages union dues, vacation savings, various trust funds, collective-bargaining agreement respondent union, trustees filed suit against name United States amount claimed due under bond. The District Court granted summary judgment respondents, Appeals affirmed, holding that although was "technically sub-subcontractor," nevertheless it should be considered "subcontractor" purposes recovery employees their representatives, since performing "an integral significant part [Bateson's] contract" Government. Held: Colquitt's were not protected bond, they did Pierce any other cannot Clifford F. MacEvoy Co. v. Calvin Tomkins Co., 322 102, 64 890, 88 L.Ed. 1163, D. Rich Industrial Lumber 417 116, 94 2157, 40 703, distinguished. As confirmed Act's legislative h story, word used must construed being limited meaning one contracts contractor. Pp. 875-878. 179 U.S.App.D.C. 325, 551 F.2d 1284, reversed. Jack Rephan, Washington, D.C., petitioners. Donald Capuano, respondents. Mr. Justice MARSHALL delivered opinion Court. 1 Under Act, 49 Stat. 793, amended, 80 1139, U.S.C. § 270a seq., on federal project involving $2,000 post issue this case is whether term "subcontractor," encompasses technically "sub-subcontractor." 2 material facts are dispute. an provided signed Bateson's president representatives petitioner sureties. Bateson, contractor, Associates original work, Sprinkler system, items specified between States. Road Fitters Local Union 669, obligated dues contribute union's welfare, pension, educational funds. make these payments end members' employment firm, notified them 3 Columbia Circuit 1284 (1977). appellate court recognized Colquitt, had but concluded representatives. Id., at 327, F.2d, 1286.1 Applying functional test based "substantial[ity] importan[ce]" noted jobsite Government, "was performed substantial period time," access payroll records, could itself "through otherwise" default. Ibid., U.S.App.D.C., 1286. 4 We certiorari, 433 907, 97 2971, 53 1090 (1977), resolve conflict decision below holdings least three Circuits.2 now reverse. 5 Like predecessor Heard Aug. 13, 1894, ch. 280, 28 278, 24, 1905, 33 811, designed provide alternative remedy mechanics' liens ordinarily available private projects. 122, 2161, 703 (1974). Because "a lien attach property," persons supplying labor materials 121-122, 2161. scope protection limited, however, proviso 2(a) "had no counterpart Act." 107, 894, 1163 (1944). This has effect requiring lack "contractual express implied [prime] contractor" show "direct subcontractor" order recover 270b(a);3 see supra, S.Ct., 2161; 332 107-108, 893-894. In instant conceded enjoyed relationship, "express implied," relationship" Colquitt. question before us, then, can 6 we observed Congress accordance "usage building trades." U.S., 108-109, 894; id., 10, 895. trades, 7 subcontractor performs takes specific requirements . ." 109, 894 (emphasis added). 8 It thus appears prerequisite "subcontractor."4 interpretation language history, leaves room doubt about Congress' intent. While relatively brief, authoritative Committee Reports both House Representatives Senate squarely focus here: 9 "A sub-subcontractor may avail himself giving written notice far bill goes. felt more remote relationships ought come within purview bond." H.R.Rep.No. 1263, 74th Cong., 1st Sess., (1935); S.Rep.No. 1238, (1935). 10 passage indicates understood difference "sub-subcontractors" like "subcontractors" Pierce, intended extend further than sub-subcontractors. See MacEvoy, 893-894 n. 5. There nothing contrary anywhere history. Thus, while defaulted obligations, similarly default, because "subcontractor."5 11 view what reinforced fact all reported decisions question, except early decision, reached same conclusion.6 Presumably aware well-settled body law dating back almost 20 years, never moved modify coverage. result, concerned projects—prime contractors, sureties, levels subcontractors employees—have been led assume would affairs accordingly.7 absence some clear indication contrary, defeat reasonable expectations, particularly importance certainty regard bonding practices generally 110-111, 12 reaching result Courts Appeals, address history quoted above among Circuits ruling created. Instead, focused primarily substantiality supra 588, relying approach our C cases involve proviso, arose situations issue, unlike supplier "subcontractor,"8 dispositive statutory ultimately look "functional" considerations. 123-124, 2162; case, contrast, traditional tools definitive answer hence inappropriate utilize relied Appeals. 13 concluding unmindful obligation construe "highly remedial" "liberal[ly] properly effectuate Congressional intent whose go public projects." 893. wrote "such salutary policy does justify ignoring plain words limitation imposing wholesale liability bonds. [W]e disregard limitations impose 2(a)." drew line sub-subcontractors "more relationships" H.R.Rep.No.1263, 3; 2; 108, Rich, If afforded extended, change. 14 Reversed. 15 BLACKMUN took consideration case. 16 STEVENS, whom BRENNAN joins, dissenting. 17 Court's narrow reading creates system workers I believe intended. drives wedge working side tasks equally vital "the prosecution work." 270a(a)(2). reading, general "first-tier" bond; unprotected. 18 statute derives strong support statement distinguishing relationships." Nevertheless, am persuaded evidence congressional outweighs isolated upon rests. shall therefore first explain why think protects every person supplied contract. Thereafter, excerpt compel conclusion. 19 * preceded it, covers "all [a construction] contract."1 Unless narrowly read cover only directly o contractor—and suggests such proper—it plainly identifies work" proper so comparable Hill American Surety 200 197, 26 168, 437. "liberal interpretation" needed manifest purpose require actually contributed paid security end." 203, 170.2 allowed indirectly through subcontractor.3 21 heart cut coverage Act. there change identifying sufficient reason intended.4 conclusion study entire 22 speed workmen's recoveries correcting procedural flaws old Not hinted too broad. To proposed revision consistently presented measure strengthen existing rights laborers works.5 "The most radical changes made bills," Congressman Miller, proponent explained, "is two bonds; performance bond."6 23 workers, sought do framework law. Witnesses testifying urged preserve much possible, past judicial interpretations continue apply new Act.7 "rather loath disturb where correct difficulty without doing so."8 Thus especially drafters lifted bodily provision already Hill. 24 historical context enacted confirms analysis. passed during depression 1930's. Few find Reform urgency ironic discovery precious jobs often proved worthless when irresponsible unable his workers. An exchange Senators Walsh McCarran shows sentiments day: 25 "Mr. WALSH. President, investigation conducted subcommittee Education Labor showed deplorable condition reference way buildings defrauded cheated wages, will tend help secure compensation justified. McCARRAN. That object pending 79 Cong.Rec. 13383 27 entirely consistent obvious substantive protections extends IN THE PROSECUTION WORK PROVIDED FOR [THE] CONTRACT ."9 many state mechanic's statutes. Note, Mechanics' Liens Bonds Building Trades, 68 Yale L.J. 138 (1958). projects, subject liens.10 Giving ordinary Acts achieve purpose. requires having give claim statute. merely covered protection.11 29 true, course, anomalous given first-tier second-tier subcontractors.12 1163. But anomaly avoided if refer contracted contract, dealt subcontractor. common usage include materialmen. 894. describe subordinate contractors accepted responsibility basic matter how lie work.13 30 State courts, occasion deal do, recognize generic use proper. For example Colorado's furnishing "contractor, subcontractor." Despite personal pronoun, Colorado Supreme held "second-tier" subcontractor, saying: 31 "To 'subcontractor' exclude 'sub-subcontractor' contractor's us ignore Since benefits act projects constructed governmental agencies, similar legislature supplies stands lieu statute, supply works." South-Way Constr. Adams City Serv., 169 Colo. 513, 516-517, 458 P.2d 250, 251 (1969). 32 Other courts taken approach. See, e. g., Nash Eng. Marcy Realty Corp., 222 Ind. 396, 54 N.E.2d 263 (1944); Bumb Petersmith Controls, Inc., 377 817 (CA9 1967) (remote California law); Hey Kil y Man, Inc. Azalea Gardens Apts., 333 So.2d 48, 50-51 (Fla.App.1976). also 45 Harv.L.Rev. 1236, 1238-1239 (1932) (using generically noting trend favoring "remote subcontractors"). consider broad laws contracts, conclude "sub-subcontractor" perform job protected. II 34 argument rests entirely14 draws distinction relationships."15 significance overemphasized. 35 Those participated making know reports ometimes contain statements summarize portions hearings testimony expressing concerns bill. reason, examined understand relies. days testimony, mentioned briefly. A witness surety company raised specter materialmen seeking "subcontractors," idea quickly rejected: 36 "Colonel PROCTOR. [If] everybody down goes you insurance surety. example, quarryman strips quarry, he man cuts stone, lays stone situation 37 MILLER. figuring going subcontractors." Hearings, 6, 61-62 38 colloquy danger might loosely suppliers Report forestall. Obviously, "work [that] job." They bar claims employees. 62 39 stonecutter author wording adequate intent, unnecessarily allay concern identified hearings.16 concern—if Act—I convinced accomplish purpose.17 sum, unequivocally assert my explanation correct, apparent genesis casts prevent overriding compelling 41 respectfully dissent. right funds behalf established Sherman Carter, 353 210, 218-220, 77 797-798, 776 (1957). employer agreed recovered 217-218, 797. Powers Regulator Hartford Accident & Indemnity 376 811 (CA1 1967); Halloran Steel Erection Frederick Raff 271 415 1959); Fidelity Deposit Harris, 360 402, 407-409 1966); Elmer Guaranty 275 89 (CA5), cert. denied, 363 843, 1612, 1727 (1960). DuKane Corp. 422 597, 599-600, (CA4 1970). Section set forth 270b(a), provides full: "Every furnished [the] respect section title full therefor expiration ninety after day last done him made, sue amount, balance thereof, unpaid time institution prosecute said action final execution sum sums justly him: Provided, date stating accuracy party performed. Such served mailing registered mail, postage prepaid, envelop[e] addressed place maintains office conducts business, residence, manner marshal district improvement situated authorized serve summons." structure relates lends view. 90 completing 270b(a); 3, supra. requirement "permits waiting days, safely fear additional materialmen." Munroe-Lang-Stroth, Praught, 270 235, 238 1959). prevents "double payments" "interminable delay settlements A. Edwards Thompson Construction 273 873, 875-876 (CA2 1959), 362 951, 864, 869 meant seems likely required, intermediate Pierce. surety, initial claimant, probably withhold from, file against, indemnity by, (Here, indemnify losses. Brief Petitioners 15.) Hence contractor: prevention double (e. owed employees) delayed settlements. note statutes 589. always varied widely, large number States, including commercially restricted dealing prim Battista Horton, Myers Raymond, 76 1, 128 29, (1942) (District statute); Wynkoop People, App.Div.2d 620, 153 N.Y.S.2d 836 (1956), summarily aff'd, N.Y.2d 892, 174 470, 150 771 (1958) (New York restricting "performing [or] subcontractor"). 138, 147-148 cited 2, supra; Aetna Ins. Southern, Waldrip Harvick, 198 F.Supp. 505 (N.D.Cal.1961); Whitmore Oxygen Idaho Crane Rigging 193 802 (D.C. 1961); Jonathan Handy Deschenes 188 (D.C.Mass.1960); Newport News Shipbuilding Dry Dock Blount Bros. 168 407 (D.C.Md.1958). Contra, McGregor Architectural Iron Merritt-Chapman Scott Corp.,150 323 (M.D. Pa.1957). H. Cohen, Public Contracts Law 7.9, p. 208 (1961); McBride I. Wachtel, 49.320[2] (1977); R. Shealey, 143A, 187 (3d ed. 1938); Forster DeBenedictis, Practice 14.13, pp. 683-684 (1964); Stickells, Contractors Federal Works: B.U.L.Rev. 499, 512-516 (1956); 5, 164. affected parties arranged assumption 15, doubtless contracting ibid., presumably employees, recourse Finally, contained provision, chose enforce, guarantee App. 13; (affidavit trustee). install certain housing Almost identical contractors] contract." (1926 ed.). explained Report: "Your committee fully bill, existence mechanics material-men class cases, allow material-men's works, entering wholly insolvent completion thereby remedy. "In usual penal works good just premises, bonds bring H.R.Rep. 97, 53d (1893). significant, explains origin legislation, sentence illustrates care sometimes edited. Cf. 16, infra. considering determining divergent views court. Upon hand insisted strictly liberal permitted country intending interpretation, effecting erection owned profit contribution materials. "Looking terms form, amended 202-204, 169-170. general, principles governed control Fleisher Hallenbeck, 311 18, 61 81, 83, 85 12. accomplished" stated Treasury Department, adopted major afford greater subcontractors, laborers, shortening instituted With Department accord, instances several years elapsed law." 1-2 (1935) (quoting letter Department). Report, reprints Report. S.Rep. differences them, Hearings Works Judiciary, 67 One told Committee: books 1905. Its August 1894. Now, forty-odd companies spent hundreds thousands dollars finding out means. say, called attention times rendered cost lots money thoroughly analyzed construed. You say clause court, place, time. unusual controversy arise fundamental claimant not." 49-50. Another concurred statement. 59. 102. went preferred simply amend eventually horough necessary. Ibid. 204, 170, 437: "[A]ll source indicated circumscribed. 'supplied' for. How stated, known advanced furnished. "If limiting incurred permit principal, happen for, owing default defeated." "As grounds, substitute otherwise obtained attaching property individual." 170. states: "Provided, .' 270b(a). produced encompass subcontractors. notice, need not. avoids cutting provision. Rather letting tail wag dog, sensible broadly, match breadth relies quotation declaring excluding italicizes dictum omits holding. Ante, 590. agree holding; "in 893 (leaving open). unfortunately worded, contradict Ultimately, "from contractor," indirectly. argued unwilling sureties long chain relationships. ignores refuse claims. even each fact, liable, view, tier, agreements today. present 593, n.7. My lead cautious demand guarantees sureties' grow beyond ability estimate. basis estimating aggregate contingent liability. addition, well generous contemplated. 590-591, n.4. understandably worried unwary forfeit complicated imposed. Indeed, opposed reason: "[O]ver nine-tenths your men business small scale constant touch lawyers requirement, wake up expired barred." 99-100. 103, 30-31, 36-37. Requiring deceitful nature suggested Committee. 63. rejected suggestion. Forcing laborer notify added burden increases lost single imposed businessmen. practical matter, prejudice flow omission. proximate return indemnity, promptly transmit receives. demonstrated n.2, report edited carefully itself. Unlike Court, put great weight industry's longstanding "assumption" 592-593, ratified assumption, mid-1950's divided. notes supported attacked it. 588-589, n.2. finds pattern Courts: four favor opposed. 592 n.6. preponderance authority supports industry, hardly "well settled" argues seldom grants certiorari decide "well-settled" questions.

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