Do you remember the Choose Your Own Adventure books? If you are a subcontractor on a federal project, where should you bring a lawsuit to get paid? If you are a prime contractor on a federal project, would you like the convenience of defending such a lawsuit in your own backyard?
The Federal Miller Act is designed to enforce payment for work on public buildings and public works when the U.S. Government is a party to the prime contract. Typically, a lawsuit by a subcontractor or material supplier seeking payment must be filed in the same geographic area where the Project is located. (40 USC § 3133(b)(3)(B)). However, a forum selection clause may differ and determine where such a lawsuit must be filed.
In mid-July 2015, a Federal District Court transferred a case from Connecticut to Virginia by applying a valid forum selection clause in a Miller Act lawsuit. The project was for refurbishment of a barracks building located at the U.S. Coast Guard Academy in New London, Connecticut. Typically then, Connecticut would be the proper place to file a Miller Act lawsuit.
However, the subcontract provided that all “claims related in any way or manner to the Subcontract Work . . . shall be litigated in” Virginia. The Federal Court in Connecticut followed the same logic as some other Federal Circuits (1st, 5th, 8th, and 10th) and found that when the forum selection clause is otherwise valid, it will be upheld even when the Federal Statute does not expressly provide for anything different (i.e., the Federal Statute states the Miller Act lawsuit “must” be filed where the Project is located).
The Connecticut Federal District Court also noted that Virginia law, not Connecticut law, applied to interpret the Subcontract, but this alone was not a reason to transfer the case to Virginia.
Keystone: If your Project is located in any of the Federal Circuits following the same reasoning (1st, 5th, 8th, and 10th Circuits) and your subcontract provides for a specific place to file the lawsuit, you should consider it as a defensive maneuver as a prime contractor or for efficiency sake as a subcontractor.
Case: QSR Steel Corporation, LLC v. Safeco Insurance Co. of America, Case No. 3:14-1017 (U.S.D.C., Dist. Conn., July 16, 2015).