Document: 417 U.S. 116 94 S.Ct. 2157 40 L.Ed.2d 703 F. D. RICH CO., INC., and Transamerica Insurance Co., Petitioners,v.UNITED STATES For the Use of INDUSTRIAL LUMBER COMPANY, INC. No. 72—1382. Argued Jan. 9, 1974. Decided May 28, Syllabus Petitioner Rich prime contractor on a federal housing project in California, had two separate contracts for with Cerpac one contract being to select, modify, detail, install all custom millwork other supply exterior plywood. turn ordered lumber called under plywood from respondent. When needed another South Carolina, shipments by respondent's was diverted Carolina. defaulted its payments respondent plywood, including Carolina shipment, gave notice surety Miller Act claim thereafter brought suit Federal District Court Eastern California where located. Finding that 'subcontractor' within meaning Act, rather than merely materialman, hence could assert against Rich, venue as well properly lay, U.S.C. § 270b(b), granted judgment amount due unpaid invoices, but denied attorneys' fees. The Appeals affirmed large part, held fees should be awarded Held: 1. Based substantiality importance relationship contractor, MacEvoy Co. v. United States Benefit Calvin Tomkins 322 102, 64 890, 88 L.Ed. 1163, clearly subcontractor purposes, considering not just also project. Moreover, closely interrelated management financial structures, their same many similar projects; it would have been easy secure itself loss result Cerpac's default. Pp. 121—124. 2. Venue shipment lay since there sufficient nexus satisfaction 270b(b)'s requirements. between executed materials thereunder delivered worksite, remained site performance original despite diversion There no showing prejudice resulting case's heard considerations judicial economy convenience supported court claims adjudicated single proceeding. 124—126. 3. Attorneys' were improperly 126—131. (a) erred construing require award reference 'public policy' State which brought, provides cause action is evidence any congressional intent incorporate state law govern such an important element litigation liability 127—128. (b) provision 270b(a) claimants recover 'sums justly due,' does asserted ground without fee shifting, fully compensated. To hold otherwise obviation 'American Rule' are ordinarily recoverable absence statute or providing therefor, context everyday commercial litigation, policies underlie limited judicially created departures rule inapplicable. 128—131. 473 F.2d 720, part reversed part. Lawrence Gochberg, Stamford, Conn., petitioners. Dennis S. Harlowe, Tacoma, Wash., Mr. Justice MARSHALL opinion Court. 1 49 Stat. 793, amended, 80 1139, 270a et seq., requires Government contractor1 post bond 'for protection persons supplying labor material prosecution work provided for' contract. further person who has so furnished paid full 90 days after last performed supplied may bring payment balance. 270b(a). This case presents several unresolved issues administration Act. 2 * Between 1961 1968, petitioner numerous projects. During years 1963—1966, much if these projects organization intertwined Rich. principals substantial voting interest stock, major share working capital, thoroughly familiar operations condition. 3 On October 18, 1965, contracted build 337 family units at Beale Air Force Base, California. Rich's surety, Transmerica posted required then project, millwork, standard each incorporating terms A arrangement employed during this period. 4 February 22, 1966, placed order Industrial Lumber broker, purchasing wood products resale. It acknowledged complete order, purchased own suppliers arranged deliveries begin March 10, 1966. Each receipted arrived representative. 5 Shortly Industrial's began, informed more constructed Charleston, decided divert some Charleston. Accordingly, advised site. shipped railhead near 22 Contract.2 subsequent 6 April fell behind Industrial, July 13, having received invoices nine shipments, instant California.3 recognized our decision 1163 (1944), turned whether materialman. found subcontractor; supplier, rejected improper holding Cerpac4 primary obligees bond, jointly severally liable $31,402.97, amoun Court, however, 7 Both appealed. part.5 cross-appeal, reversed, attorney's successful plaintiff remanded consideration awarded. 720 (CA9 1973). We certiorari.6 414 816, 41, 38 48 (1973). affirm below extent holds purposes proper venue, reverse propriety II 8 Section 270a(a)(2) establishes general requirement protect those Ordinarily, supplier private construction can mechanic's lien improved property law. But cannot attach property, see Illinois Surety John Davis 244 376, 380, 37 614, 616, 61 1206 (1917), deprived usual security interest. intended provide alternative remedy rights suppliers. 9 afforded limited, proviso In supra, construed limit contractual agreement 'subcontractor.' Those remote relationships, mere protected. U.S., 109—111, S.Ct., 894 895. Cerpac. Thus, giventhe statutory notice, contractor. But, too enjoy protections 10 Petitioners courts finding subcontractor. role alone broker receiving and, turn, modification argue looked beyond determine status 11 MacEvoy, adopted functional technical definition term subcontractor, used proviso. noted 'one performs takes specific requirements . ..' 109, 894. went explain reason exclusion materialmen opposed subcontractors: 12 'The relatively few subcontractors perform represent sense known him. himself requiring give otherwise, directly subcontractors. method generally inadequate cope manufacturer, wholesaler ordinary manfacturer, retailer.' Id., 110, (Emphasis added.) 13 establish test his contractor.7 will usually himself, he easily 'subcontractors' whom 14 Measured test, 'highly remedial (and) entitled liberal application effectuate Congressional whose go into public projects.' 107, 893. consistent look total subcontractor.8 only agreed Cerpac, effect, took over itself. structures companies was, observed, 'in special, integral, almost symbiotic (with) Rich.' F.2d, 724. default III 15 agree provides: 16 'Every instituted section shall district elsewhere 270b(b). 17 bars California9 adjudicating arising 270b(b) requirement10 satisfaction. 'Beale 647' described therein worksite State. Although made pursuant later convenience, purposes.11 Several shipment. petitioners pointed support IV 18 now question plaintiff. so-called governing 'are enforceable therefor.' Fleischmann Distilling Corp. Maier Brewing 386 714, 717, 87 1404, 1407, 475 (1967). concerning case. Nor explicitly allows contexts. reasoned remedies " lieu upon land buildings customary owned persons' .. substitute unavailable lien. Therefore, (law) fees, different apply ..'12 Looking law, because Cal.Govt.Code 4207 (1966) allowed recovery actions bonds contractors municipal works projects.13 19 think statute. action, scope substance thereby matter Neither nor offers Many involve State, often, here, parties little contact, itself, reasonable expectations potential litigants better served uniform national application. 20 avoids pitfalls already manifested themselves using referents. example, awards suits And, inapplicable States.14 nonetheless controls recoveries, free 'state proceeded find appropriate. premised theory "in persons," affords involved disputes extricate morass trying divine bonds. 21 Finally, intimates 270b(a), Congress must compensated—the claimant's always diminished cost legal representation. argument restates oft-repeated criticisms American Rule.15 Almost half century ago, Massachusetts Judicial Council pleaded reform, asking, 'On what principle justice wrongfully run down highway doctor's bill lawyer's bill?'16 recognize force party bear out whole. countervailing well. observed penalized defending prosecuting lawsuit, poor might unjustly discouraged instituting vindicate penalty losing included opponents' counsel.' 718, 'the time, expense, difficulties proof inherent litigating constitutes fees,' ibid., given us pause, even though regularly engaged endeavor contexts shifting mandated statute, policy, possibility threat posed independent advocacy earnings attorney flow pen judge before argues. Rule served, absolute bar judiciary exceptions costs long when opponent acted bad faith, vexatiously, wantonly, oppressive reasons,17 litigant conferred benefit class court's operates spread proportionately among members benefited class.18 lower applied rationale based premise expense often formidable insurmountable obstacle necessary enforce policies.19 'private general' squarely now; do we intend imply view either validity doctrine. here observe fall exceptions. 23 plain simple litigation. effect then, asked mile case, obviate unprepared do. perspectives profession, consumers services, interested groups weighed substantially undercut aware issue.20 Thus whatever merit arguments departure addressed Congress. 24 insofar 25 ordered. 26 Judgment 27 DOUGLAS, dissenting 28 dealing Act's predecessor, Heard 'must liberally.' That applies Fleisher Engineering Construction Hallenbeck, 311 15, 17—18, 81, 82—83, 85 12. silent saying allow 'to prosecute said final execution sum sums him.' 29 unlike Lanham 475. itemized components afforded: injunctive relief, treble damages, 'costs' (which did include fees). 719—720, 1407—1408. attempts amend never succeeded, id., 721, 1408. Here legislative history; itemize 'sum due.' 30 says dependence inappropriate, deal uniform. great liberties there. 'Questions therefore determined State,' Brandeis speaking 381, 617. If claimant interest, him purpose Judge Carter writing equivalent laws. See 727. composed elements available collecting nonfederal One permitted due' remedy. 31 What equally applicable Act.* Under circumstances present seem quite unjust sum. less $2,000 value excepted statute's coverage. Shipments invoiced truckload. truckloads, while truckload lumber. payments, indicated deliver truckloads until satisfactory assurances payment. pay receive profit commission Industrial. June 23, payable thereafter. copies refused invoice price shipments. conceded obligation longer controversy regard amounts invoices. subsequently filed discharge bankruptcy party. All annual rate eight percent date. seven 'unliquidated claims.' Appeals, ruled liquidated damages percent. sent rendered surety. raised brief timeliness prejudgment petition certiorari, See, e.g., Namet States, 373 179, 190, 83 1151, 1156, 278 (1963); 23.1(c) Rules Aetna Casualty & Gibson Steel 382 615, 617 (CA5 1967); Basich Bros. Turner, 159 182 1946); cf. Bryant Lembke 370 293 (CA10 1966). Travelers Indemnity Western 362 896, 898 1966); Wellman MSI Corp., 350 285, 286 (CA2 1965). Base located jurisdiction court. ex rel. Capolino Sons, Inc. Electronic Missile Facilities, Inc., 364 705 cases collected, 707. Transamerica, use bonded ultimate surety's involves questions proper. pendent claim, challenged Appeals. 727 analysis accepted cases; Red Top Metal, 384 752 White Masonry, 434 855, 859 1970); Arnold Bowman Mechanical Contractors, 470 243, 245 1972). After prior Appeals' opinion, replaced, effective provisions transferred Cal.Civ.Code 3250 (Supp.1974), act Legislature, dated August 31, 1969, January 1, 1971. Given reasoning, revision language relevance reached herein. B. C. Richter Contracting Continental 230 Cal.App.2d 491, 41 Cal.Rptr. 98 (1964) (construing former n. supra). come repeated criticism years. Ehrenzweig, Reimbursement Counsel Fees Great Society, 54 Cal.L.Rev. 792 (1966); Kuenzel, Attorney's Fee: Why Not Cost Litigation?, Iowa L.Rev. 75 McLaughlin, Recovery Fees: New Method Financing Legal Services, Ford.L.Rev. 761 (1972); McCormick, Other Expenses Litigation Element Damages, Minn.L.Rev. 619 (1931); Stoebuck, Included Costs: Logical Development, U.Colo.L.Rev. 202 Note, Where Shall Ultimate Burden Lie?, Vand.L.Rev. 1216 Massachusetts, First Report, Mass.L.Q. (1925). Vaughan Atkinson, 369 527, 82 997, (1962); McEnteggart Cataldo, 451 1109 (CA1 1971); Bell School Bd. Powhatan County, 321 494 (CA4 1963); Rolax Atlantic Coast Line R. 186 1951); J. Moore, Practice 54.77(2), p. 1709 (2d ed. 1974). Hall Cole, 412 93 1943, 36 702 (1973); Mills Electric Auto-Lite 396 375, 593 (1970); Natural Resources Defense EPA, 484 1331 1973); Callahan Wallace, 466 59 1972); Bright Philadelphia-Baltimore-Washington Stock Exchange, 327 F.Supp. 495, 506 (ED Pa.1971); Nussbaum, Public Interest Litigation, N.Y.U.L.Rev. 301 Comment, Allocation U.Chi.L.Rev. 316 (1971). Cooper Allen, 467 836 Knight Auciello, 453 852 Lee Southern Home Sites 444 143 La Raza Unida Volpe, 57 F.R.D. (N.D.Cal.1972); Ross Goshi, 351 949 (Haw.1972); Sims Amos, 340 691 (MD Ala.1972); Bradley City Richmond, 416 696, 2006, 476 (1974); North-cross Memphis Education, 427, 2201, Newman Piggie Park Enterprises, 390 400, 964, 1263 (1968); supra; Awarding 'Private Attorney General': Green Light Private Interest, Hastings L.J. 733 committee charged making broad-based inquiry about services currently studying, inter alia, issue Hearings Subcommittee Representation Citizen Interests Senate Committee Judiciary, 93d Cong., 1st Sess. S.Rep.No.93—146 (1973), accompanying S.Res.101. Fifth Circuit Florida Weyerhaeuser Bucon 430 420, 425. And 859, Ninth followed Alaska

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