Technica, LLC v. Carolina Cas. Ins Co.

The absence of a state license to contract does not preclude a subcontractor from pursuing a claim under the Miller Act for payments due under the contract.

Technica, Inc. ( “Technia”) contracted to be the subcontractor on a federal fencing project in California. During the contract, Technica expended $893,697.77 worth of resources on the project but did not receive complete compensation from the primary contractor Candelaria Corporation (“Candelaria”). Technica filed a claim under the Miller Act to recover the outstanding payments under the subcontract. In response, Candelaria argued that a California statute requiring all contractors and subcontractors to be licensed with the state precluded the unlicensed subcontractor, Technia, from collecting compensation. The district court agreed, holding Technica was not a licensed contractor as required by California law, and therefore precluded from bringing a claim under the Miller Act for denied payments under the subcontract. On appeal, the panel held that Technica can collect under the Miller Act. The Miller Act allows for any person who has provided resources on a federal construction project who has not been adequately compensated after 90 days, to bring a civil suit for the remainder due. The Ninth Circuit followed the Eighth and Tenth Circuits as well as the Supreme Court, in holding that a state law cannot preclude rights or remedies provided for in a federal act. The panel explained that federal subcontractors often bid to work on projects that span across the country and involve multiple states. The Miller Act was intended to limit the procedural and substantive hurdles that subcontractors often face when seeking denied payment of wages or supplies. A requirement for a subcontractor to comply with licensing requirements in any particular state in which they perform work is contrary to the congressional intent of the Miller Act. REVERSED and REMANDED.