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Wednesday, July 24, 2024 | Back issues
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Contractor on Immigrant Fencing Job Wins Appeal

(CN) - A company that built high-tech fences for an immigration-detention facility in California may still seek payment though it lacks a license there, the 9th Circuit ruled Tuesday.

Virginia-based Technica Inc. claimed in San Diego that Candelaria Corp. had failed to pay some $600,000 for labor and materials Technica provided in 2007 and 2008 for a fence-building project at the Immigration and Customs Enforcement Service Processing Center in El Centro, Calif.

Candelaria, the primary contractor on the project, subcontracted with Otay Group Inc. in late 2007, which in turn hired Technica, a systems engineering and software development company that regularly contracts with the federal government.

Technica eventually billed Otay and Candelaria $893,697, but received a check for only $287,861. Candelaria terminated Otay's subcontract in 2008 without paying the remainder, and Technica sued the company under the Miller Act.

In granting Candelaria and its insurer summary judgment in the case, U.S. District Judge Marilyn Huff agreed that, under the California Business and Professions Code, Technica could not pursue payment because it did not have a California contractor's license when it worked on the project.

An appeals panel reversed on Tuesday, finding that "rights and remedies under the Miller Act may not be conditioned by state law."

The Supreme Court has said that enforcement of state licensing statutes in Miller Act cases would "wreak havoc on the uniform application of the Miller Act," Judge Richard Paez wrote for the unanimous panel.

"Federal subcontractors routinely bid on projects throughout the country and often perform contracts that span multiple states," Paez wrote. "Requiring them to comply with contractor licensing requirements in any given state in which they may work is contrary to the intent of Congress in enacting the Miller Act, which was meant to reduce the substantive and procedural hurdles placed on federal subcontractors, labor providers and materialmen in seeking payment or wages denied to them."

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