United States of America v. Triangle Construction Co., Inc. et al

Filing 18

ORDER granting 7 Motion to Dismiss for Lack of Subject-Matter Jurisdiction; denying 13 Motion to Lift Stay and Allow Jurisdictional Discovery. Signed by Honorable David C. Bramlette, III on January 4, 2018 (JBR)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
UNITED STATES OF AMERICA
f/u/b/o Metro Mechanical, Inc.

v.

PLAINTIFF

CAUSE NO. 3:17-CV-718-DCB-LRA

TRIANGLE CONSTRUCTION CO., INC. and
U.S. SPECIALTY INSURANCE COMPANY

DEFENDANTS

ORDER AND OPINION
This cause is before the Court on a Motion to Dismiss for
Lack of Subject-Matter Jurisdiction [Doc. 7] filed by Defendant
Triangle Construction Company, Inc. (“Triangle”) and a Motion to
Lift Stay and Allow Jurisdictional Discovery [Doc. 13] filed by
Plaintiff United States of America for use and benefit of Metro
Mechanical, Inc. (“Metro”). Having considered the motions, the
responses,

and

applicable

statutory

and

case

law,

and

being

otherwise fully informed in the premises, the Court finds as
follows:
I.

BACKGROUND

A sub-contractor on four south and southwest Mississippi
construction projects sued a prime contractor and its surety for
non-payment of amounts due under the sub-contract. The sole basis
for federal jurisdiction is the Miller Act. The prime contractor

insists that the Court is without Miller Act jurisdiction because
the

projects

and

contracting

parties

are

private.

The

sub-

contractor rejoins that the projects were federally-funded and so
Miller Act jurisdiction exists. The Court’s jurisdiction turns on
whether federally-funded construction projects to which the United
States was not a contracting party constitute “public work[s] of
the Federal Government.” See 40 U.S.C. § 3131(b) (formerly 40
U.S.C. § 270(a)).
A.

The Prime Contract
Triangle contracted with Mississippi Portfolio Partners III,

LP to perform work on four apartment complex construction projects
located

in

Hattiesburg,

(collectively,

the

Natchez,

“Projects”).

and

[Doc.

Fayette,
1,

¶4]

Mississippi

Defendant

U.S.

Specialty Insurance Company (“U.S. Specialty”) issued payment
bonds on each of the Projects. [Doc. 1, ¶4]
B.

The Sub-Contract
Metro sub-contracted with Triangle to “perform certain HVAC

and plumbing renovations” on the four apartment complexes. [Doc.
1, ¶5] Metro completed the work required of it under the subcontract, but was not paid the $150,555 it contends it is owed.
[Doc. 1, ¶¶7-8] Metro sued Triangle and U.S. Specialty in this
Court, pinning federal jurisdiction on the Miller Act. [Doc. 1,
¶2]
2

Triangle

moves

to

dismiss

for

lack

of

subject-matter

jurisdiction under Federal Rule of Civil Procedure 12(b)(1). [Doc.
7] The Court is without jurisdiction, Triangle contends, because
the Miller Act —— the sole source of federal jurisdiction —— does
not

cover

payment

disputes

attendant

to

private

construction

projects. [Doc. 8, p. 2]
Metro opposes dismissal, arguing that the Miller Act applies
because the Projects are federally-funded. [Doc. 12, p. 3] And
Metro suspects that the Projects are covered by the Miller Act
because Triangle secured payment bonds for them. [Doc. 12, p. 3]
Metro reasons that, because Mississippi law does not require a
contractor on a private project to obtain a payment bond, and
because such bonds can be costly, Metro must have obtained payment
bonds

on

the

Projects

to

fulfill

the

Miller

Act’s

bond

requirement.1 [Doc. 12, p. 3]
II.

DISCUSSION

In determining its jurisdiction, the Court looks to the
allegations of Metro’s complaint and presumes them to be true.
Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981). Subjectmatter jurisdiction turns on the applicability of the Miller Act.

1 Other than speculation concerning the cost-inefficiency of securing
payment bonds when not statutorily-required, see Doc. 12-3, ¶6, Metro offers no
evidence showing that the payment bonds cited in its complaint were issued under
the Miller Act.

3

If it applies, the Court has jurisdiction; if it does not apply,
the Court must dismiss the case.
The Miller Act requires contractors on “public work[s] of the
Federal Government” to obtain performance and payment bonds. See
40 U.S.C. § 3131. And the Act creates a civil action 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).2
The

Act

does

not

define

“public

work

of

the

Federal

Government.” See 40 U.S.C. §§ 3131-3134. And besides interpreting
the phrase to include a congressionally-authorized project for
construction of a library at Howard University, see United States
ex rel. Noland Co. v. Irwin, 316 U.S. 23, 28-29 (1942), the Supreme
Court has had little to say on the topic.
But one issue is settled —— a federally-funded project is not
necessarily a “public work” under the Miller Act. See United States
ex rel. General Elec. Supply Co. v. U.S. Fidelity & Guaranty Co.,
11 F.3d 577, 581 (6th Cir. 1993) (“[G]overnment funding alone is

2 State lien laws protect private project sub-contractors. See, e.g.,
MISS. CODE ANN. § 85-7-187. But no such protection extends to sub-contractors on
federal construction projects: liens cannot attach to federal government
property. See F.D. Rich Co. v. United States ex rel. Indus. Lumber Co., 417
U.S. 116, 121-22 (1974). To close this remedial gap, and to place the suppliers
of labor and material on federal projects on equal footing with suppliers on
private projects, Congress passed the Miller Act. United States ex rel. Sherman
v. Carter, 353 U.S. 210, 217 (1957).

4

not enough to make a project a public work.”); see also TIJ
Materials Corp. v. Green Island Const. Co., 131 F.R.D. 31, 33-34
(D.R.I.

1990)(project

not

a

“public

work”

despite

federal

funding). The Court is therefore unpersuaded by Metro’s argument
that the Miller Act applies, and jurisdiction exists, simply
because federal funds were perhaps “involved” in the Projects.
[Doc. 12, p. 1]
A.

The Court Lacks Miller Act Jurisdiction Under Mississippi
Road Supply
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.” United States ex rel. Miss. Road
Supply Co. v. H.R. Morgan, Inc., 542 F.2d 262, 266 (5th Cir. 1976)
(“Mississippi Road Supply”).
The first Mississippi Road Supply consideration does not give
rise to Miller Act jurisdiction. No allegation in Metro’s complaint
suggests that Metro could recover in equity against the United
States or any of its agencies. An equitable lien would extend only
to funds of the United States that are due to Triangle under the
terms of the prime contract between it and Mississippi Portfolio
Partners III, LP. See United States ex rel. Router v. MacDonald
Const. Co., 295 F. Supp. 1363, 1365 (E.D. Mo. 1968). And such a
5

lien is available only if U.S. Specialty, the surety, is insolvent.
See id. Metro’s complaint does not suggest that any funds of the
United States are due to Triangle under the prime contract. Nor
does it hint that U.S. Specialty is insolvent.
The second Mississippi Road Supply consideration, like the
first, fails to confer Miller Act jurisdiction. Metro’s complaint
does not allege that any Project-related labor was performed on,
or that any Project-related supplies were diverted to, federal
property.
Metro’s complaint meets neither of the jurisdictional tests
set forth in Mississippi Road Supply, so the Court is without
Miller Act jurisdiction. The Court nonetheless considers other
measures of Miller Act jurisdiction, each of which confirms the
absence of subject-matter jurisdiction on these facts.
B.

The Miller Act Does Not Provide Metro a Right of Action on
Payment Bonds Issued Under a Private Contract
The Miller Act applies only when the federal government or

one of its agents is a party to the construction contract. See,
e.g., United States ex rel. Polied Envt’l Servs., Inc. v. Incor
Grp., Inc., 3:02-CV-1254, 2003 WL 1797846, at *1 (D. Conn. Apr. 4,
2003); United States v. U.S. Fidelity & Guar. Co., 959 F. Supp.
345, 347 (E.D. La. 1996); United States ex rel. Miller v. Mattingly
Bridge Co., 344 F. Supp. 459, 462 (W.D. Ky. 1972).

6

Consider United States v. Suffolk Const. Co.3 There, thenJudge Sotomayor’s opinion held that a payment dispute arising from
the construction of a West Point Alumni Center was not covered by
the Miller Act. Id. at *2. Miller Act jurisdiction was lacking,
the court reasoned, because the United States was not a party to
the construction contract and the contracting party was not acting
directly as an agent of the United States. Id. at *2.
Metro, like the Suffolk plaintiff, fails to allege that either
the United States or an agent acting on its behalf was a party to
the relevant contracts. Metro’s complaint, accordingly, fails to
trigger Miller Act jurisdiction under this alternative line of
authority.
Then-Judge Sotomayor’s analysis in Suffolk finds support in
numerous federal district court opinions. See, e.g., United States
v. TK Elec. Servs., LLC, 1:09-CV-41, 2011 WL 379192, at *1 (S.D.
Ohio Feb. 3, 2011) (dismissing Miller Act claim for lack of
subject-matter jurisdiction where plaintiff failed to allege that
the federal government was a party to the construction contract);
United States ex rel. Blumenthal-Kahn Elec. Ltd. P’ship v. Am.
Home Assur. Co., 219 F. Supp. 2d 710, 715 (E.D. Va. 2002) (holding
the Miller Act inapplicable to dispute arising from construction
of pedestrian tunnel at state-operated airport because neither the
United States v. Suffolk Const. Co., 1996 WL 391875, at *2 (S.D.N.Y.
July 12, 1996) (Sotomayor, J.)
3

7

federal government nor one of its agents contracted for the
project).
It is undisputed that neither the federal government nor any
of its agents was a party to any contract for work on the Projects.
Indeed, Metro’s complaint confirms that the only parties to that
contract were Triangle and Mississippi Portfolio Partners III, LP.
[Doc. 1, ¶4] Under this standard, as under Mississippi Road Supply,
the Miller Act is inapplicable.
C.

Jurisdictional Discovery is Unwarranted
Metro asks the Court to allow it to conduct jurisdictional

discovery regarding the source of financing for the Projects. [Doc.
13] The Court finds jurisdictional discovery unnecessary because
this Order and Opinion presupposes that the Projects are federallyfunded and, even so, holds the Miller Act inapplicable.
III. CONCLUSION
No matter the test applied, the Miller Act does not cover
this payment dispute. Because the Miller Act does not apply, and
no alternative basis for subject-matter jurisdiction exists, the
Court is without jurisdiction and shall dismiss this action without
prejudice.

8

ACCORDINGLY,
IT IS HEREBY ORDERED that the Motion to Lift Stay and Allow
Jurisdictional

Discovery

[Doc.

13]

filed

by

Plaintiff

United

States of America for use and benefit of Metro Mechanical, Inc. is
DENIED.
FURTHER ORDERED

that the

Motion to Dismiss for

Lack of

Subject-Matter Jurisdiction [Doc. 7] filed by Defendant Triangle
Construction Company is GRANTED and the Complaint [Doc. 1] filed
by Plaintiff United States of America for use and benefit of Metro
Mechanical, Inc. is DISMISSED WITHOUT PREJUDICE. The Clerk of Court
is directed to close this case.
SO ORDERED, this the 4th day of January, 2018.
/s/ David Bramlette_________
UNITED STATES DISTRICT JUDGE

9