United States ex rel. Metro Mech., Inc. v. Triangle Constr. Co.,  2018 U.S. Dist. LEXIS 1487 (S.D. Miss. Jan. 4, 2018)

Triangle Construction Company, Inc. (“Triangle”) contracted with Mississippi Portfolio Partners III, LP (“Mississippi Partners”) to serve as the prime contractor on four apartment complex construction projects (the “Projects”) in Mississippi.  Triangle subcontracted the HVAC and plumbing work to Metro Mechanical, Inc. (“Metro”).  After Metro completed its work, Metro filed suit in the Federal District Court under the Miller Act, to collect sums due from Triangle and its payment bond surety.  Triangle moved to dismiss, asserting that the Court was without Miller Act jurisdiction because the projects and contracting parties were private.

The Miller Act requires contractors on “public work[s] of the Federal Government” to obtain payment bonds for the protection of subcontractors and suppliers.  See 40 U.S.C. § 3131.  To that end, the Millers Act also creates a civil action in federal court in favor of any “person that has furnished labor or material in carrying out work provided for” under a Miller Act contract and “that has not paid in full within 90 days.” 40 U.S.C. 3133(b)(1).  The District Court applied two alternative tests to determine whether the Projects were “public works of the Federal Government subject to the Miller Act.”

First, the Court stated that the Miller Act applies if “(1) the subcontractors and suppliers of material could assert an action for equitable recovery against the United States or one of its agencies, or (2) normal state labor and material lien remedies are unavailable because of federal ownership of lands.”  The Court found that neither of these tests were met in this instance.  Metro could not recover in equity against the United States since such recovery is only available if the surety was insolvent, and there was no allegation of such insolvency.  Further, any equitable recovery would extend only to those funds of the United States that were due to Triangle under the prime contract with Mississippi Partners and there is no suggestion that any such funds were due to Triangle.  In addition, Metro’s complaint did not allege that any labor or materials were furnished to or for the benefit of federal property.

Second, the Court noted that the Miller Act applies only when the federal government or one of its agents is a party to the construction contract.  It was undisputed that the only parties to the prime contract were Triangle and Mississippi Partners.  Therefore, the Court held that Metro’s complaint failed to trigger Miller Act jurisdiction under this alternative line of authority as well.

Accordingly, the Court dismissed Metro’s Complaint for lack of jurisdiction.

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