The Ninth Circuit United States Court of Appeals recently issued a decision that impacts Miller Act Claims across the United States. In Pre Con Industries, Inc. v. First National Insurance Company of America, the parties were arguing about the scope of the one year statute of limitation. The Ninth Circuits discussion of this legally technical argument is interesting, and the ending result is good for potential claimants nationwide.
The One Year Deadline in the Miller Act
The deadline at controversy in the Pre Con Industries case is straight-forward, as is most of the Miller Act. Those who furnish labor or materials to a federal improvement project, and who are unpaid, can file a lawsuit against the “Miller Act” bond within 1 year from last furnishing.
Note that the term lawsuit is in italics because a formal claim may actually be required long before this lawsuit deadline. Most claimants must file a claim within 90 days of last furnishing, and the one-year deadline is merely a foreclosure time limitation. The 90 day claims deadline was not at issue in this case, but to learn more, view our Miller Act Frequently Asked Questions and Resources.
The issue in this case was exactly what type of deadline was prescribed by the US Miller Act: A “jurisdictional requirement” or a “claims processing rule.”
Facts and Argument in the Pre Con Industries Case
In the Pre Con Industries case, the claimants had brought their lawsuit in federal court arguably after the 1 year deadline. The claimants argued that even if their claim was late, their underlying claims to get paid were alive. In other words, they may be late on recovering against the payment bond, but they could at least recover under their construction contract.
The general contractor argued otherwise, however, urging that the Miller Act set forth a “jurisdictional deadline” that completely shut out all of the claimant’s claims. Since the lawsuit wasn’t filed within that one year period, the contractor argued, the claimant lost all ability to collect the debt.
Ninth Circuit Rules That Miller Act 1 Year Deadline Is A Claims Processing Rule
After analyzing the US Supreme Court’s recent efforts to “bring some discipline” to the use of the term “jurisdictional,” and a review of law and jurisprudence contradicting the contention that the Miller Act’s 1 year period was a “jurisdictional requirement,” the Ninth Circuit held that the 1 year period was merely a claims processing rule.
In other words, the claimant could bring their lawsuit against applicable parties to get paid on the project, even if they could not make the Miller Act claim on time. The Miller Act 1 year deadline only prevented them from brining a claim against the Miller Act bond, not a claim under any theory of recovery whatsoever.
In addition to all other reasons why the act does not proscribe a “jurisdictional deadline,” the Ninth Circuit cited the nature of the Miller Act as a “highly remedial” law. This is music to the ears of a guy like me, and to lien claimants everywhere:
Lastly, the Miller Act “was intended to be highly remedial,” and the Supreme Court has stated that courts must construe the Miller Act’s provisions with this highly remedial purpose in mind…It is unlikely Congress intended the Miller Act’s statute of limitations to be a jurisdictional requirement given the Act’s highly remedial purpose…