MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Defendants' Motion to Dismiss or, in the Alternative, to Transfer Venue, filed May 18, 2011 (Doc. 16)("Motion"). The Court held a hearing on July 27, 2011. The primary issue is whether, pursuant to the Miller Act, 40 U.S.C. §§ 3131-3134, the United States District Court for the District of New Mexico is the proper venue for Plaintiff Brown Minneapolis Tank Co. ("BMT Co.") to bring this action. The Court finds that venue is appropriate, because the Miller Act's venue provision requires that claims must be brought in the location where the contract was performed, and the construction was done in New Mexico. The Court therefore denies the Motion.

FACTUAL BACKGROUND

"The basic facts and procedural history are not in dispute." Motion at 2. See Use Plaintiff Brown Minneapolis Tank Co.'s Response to Defendants' Motion to Dismiss Or, in the Alternative, to Transfer Venue at 1, filed May 31, 2011 (Doc. 20)("Response")("For the most part, the background facts which are relevant to this issue are not disputed, and the parties have stipulated to the following facts. . . ."). In April 2009, Kinley Construction entered into contract number W912PP-09-C-0025 ("Prime Contract") with the Department of the Army, U.S. Army Corps of Engineers, for the construction of, among other things, two fuel storage tanks and related facilities at Kirtland Air Force Base, located within Bernalillo County, State of New Mexico (the "Project"). Response ¶ 1, at 2. See Motion ¶ a, at 2. In connection with execution of the Prime Contract, Kinley Construction, as principal, and Defendant Travelers Casualty and Surety Company of America, as surety, executed payment bond number 105246436. See Response ¶ 2, at 2.

In September, 2009, Kinley Construction and BMT Co. entered into the Agreement between Contractor and Subcontractor, Contract No. 10-001-01, filed May 18, 2011 (Doc. 16-1)("the Subcontract"), under which BMT Co. agreed to build the fuel storage tanks required for the Project under the Prime Contract. Motion ¶ b, at 2; Response ¶ 3, at 2. According to Kinley Construction, under the terms of the Subcontract, BMT Co. was to complete fabricating the tanks no later than April 13, 2010. See Motion ¶ b, at 2; Subcontract ¶ 7, at 4; id. Ex. B. Pursuant to the Subcontract, BMT Co. performed labor and supplied materials which were incorporated into the work required by the Prime Contract. See Response ¶ 4, at 2.

Because of high wind conditions at the job site, one of the tanks collapsed in April, 2009. Kinley Construction alleges that BMT Co. negligently failed to adequately protect its work from weather damage; BMT Co. denies that it was negligent and alleges that it went far beyond industry standards in its efforts to secure the tank. See Motion ¶ c, at 2-3. BMT Co. rebuilt the tank. BMT Co. also designed and installed a wind protection system intended to protect the tank from further damage. In June, 2010, however, a second high wind event caused the tank to collapse a second time. See Motion ¶ d, at 3. The final completion of the Project was delayed due to the two tank collapses. A dispute has arisen between BMT Co. and Kinley Construction regarding whether BMT Co.'s performance was timely under the Subcontract. See Response ¶ 6, at 2. Kinley Construction has taken the position that BMT Co. is responsible for the costs Kelly incurred from the delays, which BMT Co. denies. See Motion ¶ e, at 3. BMT Co. has issued, and Kinley Construction has refused to pay, invoices for labor and materials furnished to and incorporated into the work required by the Prime Contract. See Response ¶ 5, at 2.

PROCEDURAL BACKGROUND

Kinley Construction filed suit against BMT Co. in the 67th Judicial District Court, Tarrant County, Texas on March 8, 2011. See Kinley Constr. Co. v. Brown Minneapolis Tank Co., No. 67-251478-11, Plaintiff's Original Petition (Tex.D.Ct. March 8, 2011)(Doc. 16-2)(the "Texas Action"). Kinley Construction brought breach of the contract, negligence, indemnity, and unjust enrichment claims based on BMT Co.'s performance under the Subcontract, alleging that BMT Co. was at fault for the collapse of the fuel tanks and liable to the ensuing delays and the $336,138.75 in costs Kinley Construction incurred as a result of the delays. On April 8, 2011, BMT Co. removed the Texas Action to the United States District Court for the Northern District of Texas. See Kinley Constr. Co. v. Brown Minneapolis Tank Co., No. CIV 11-0231-01, Notice of Removal (N.D.Tex. Apr. 8, 2011).

On April 6, 2011, BMT Co. filed its Complaint for Violation of the Miller Act, Claim on Payment Bond and Breach of Contract in this action. See Doc. 1 ("Complaint"). BMT Co. commenced this action within one year of the date on which it last performed labor or supplied materials for the work required by the Prime Contract. See Response ¶ 8, at 2. BMT Co. brings Miller Act claim against the Defendants, a breach of contract claim against Kinley Construction, and a claim for payment on the bond against Travelers. See Complaint Counts I-III, at 3-4. BMT Co. alleges that, "[w]hile Brown was prosecuting its work under the Subcontract, the construction site experienced weather events which—through no fault of Brown's—resulted in collapses of the partially erected tanks." Complaint ¶ 10, at 1. BMT Co. alleges that it completed all work it was obligated to do under the contract, and that Kinley Construction refuses to pay the $74,402.00 balance that remains due under the contract.

On April 27, 2011, BMT Co. filed a motion to transfer the Texas Action to this Court, to be consolidated with this action. See Kinley Constr. Co. v. Brown Minneapolis Tank Co., No. CIV 11-0231-08, Defendant's Motion to Transfer Venue (N.D.Tex. April 27, 2011)("Motion to Transfer Venue"). Kinley Construction opposes the motion. See Kinley Constr. Co. v. Brown Minneapolis Tank Co., No. CIV 11-0231-19, Plaintiff's Response and Opposition to Defendant's Motion to Transfer Venue (N.D.Tex. May 18, 2011).

The Defendants now move to dismiss or, in the alternative, to transfer venue to the Northern District of Texas. The Defendants assert that, when related cases are pending before two federal courts, the court in which the case was last filed may refuse to hear it if the cases raise substantially overlapping issues. They argue that this case involves duplicative or substantially similar issues as the Texas Action, and that the two cases should be resolved together. They further argue that, because the Texas Action was filed first, the Northern District of Texas is the appropriate venue for adjudication. The Defendants also contend that BMT Co.'s claims arise from the same transaction or occurrence, and therefore must be brought, if at all, as compulsory counterclaims in the Texas action under rule 13 of the Federal Rules of Civil Procedure.

On May 31, 2011, BMT Co. filed its Response. BMT Co. does not dispute that the facts in this case involve identical or substantially overlapping issues as the Texas Action. Indeed, BMT Co. asserts in its Motion to Transfer Venue that it filed in the Texas Action that the Texas Action should be consolidated with this action, because the actions "involv[e] the same parties, the same contract and the same incident." Motion to Transfer Venue at 1. BMT Co. argues instead that, notwithstanding the first-to-file doctrine, under the Miller Act's venue requirements, the District Court of New Mexico has "exclusive venue" for its Miller Act claim. Response at 1. They contend that the Miller Act's venue provision is a special circumstance that makes it unnecessary for the Court to weigh the inconveniences to the parties, because "[w]here Congress has established an exclusive venue for actions, inconvenience is not an appropriate consideration for the courts." Response at 5. BMT Co. further argues that the "Miller Act constitutes a special circumstance that outweighs prudential venue considerations of the first-filed suit." Response at 6.

On June 3, 2011, the Defendants filed their Memorandum in Reply to Plaintiff's Response to Motion to Dismiss or, in the Alterantive [sic], to Transfer Venue. See Doc. 21 ("Reply"). The Defendants assert that they filed the Texas Action almost a month before BMT Co. filed this action. The Defendants assert that BMT Co. contends that the Court has exclusive jurisdiction, and argues that the Miller Act venue provision "`is merely a venue requirement' and not a jurisdictional absolute." Reply at 2 (quoting F.D. Rich Co., Inc. v. United States ex rel. of Indus. Lumber Co., 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974)). The Defendants further contend that the Miller Act's venue provision benefits only defendants, and defendants may elect to assert or waive the venue requirement. Accordingly, the Defendants argue, because they do not seek the Miller Act's venue provision's benefits, BMT Co. has no ground upon which to invoke them. The Defendants also assert that "the inconvenience that might be suffered by one party or the other, based on where the cases ultimately are consolidated and tried, is equally balanced." Reply at 4.

At the July 27, 2011 hearing, Thomas G. Gruenert, counsel for the Defendants, stated that the Court was likely correct to surmise that the Honorable John H. McBryde, United States District Court Judge for the United States District Court for the Northern District of Texas, was likely waiting to see whether the Court would grant the Motion before ruling on BMT Co.'s Motion to Transfer Venue. See Transcript of Hearing at 5:19-6:8 (taken July 27, 2011)(Court, Gruenert)("Tr.").1 Mr. Gruenert also contended that the weight of the caselaw supports that Judge McBryde, who first had jurisdiction over this matter, should decide which venue is appropriate. See Tr. at 6:20-7:1 (Gruenert). The Defendants asserted that the Miller Act does not provide exclusive jurisdiction in Albuquerque, New Mexico. See Tr. at 7:2-5 (Gruenert). They argued that the Miller Act's venue provision is "an election that Kinley Construction could have taken advantage of to insist on the case being in Albuquerque," and that "Kinley has not done that." Tr. at 7:2-5 (Gruenert). Mr. Gruenert asserted that "forum nonconvenience issues cut both ways," Tr. at 7:19-8:5 (Gruenert), and that the forum nonconvenience analysis "is a wash," Tr. at 8:19-20 (Gruenert). The Defendants further contended that the Northern District of Texas is where Kinley Construction is headquartered, and where monies related to the contract were sent and received. See Tr. at 6:20-7:1 (Gruenert).

David Gorman, BMT Co.'s counsel, responded that the Miller Act's venue provision is clear on its face that this Court is the exclusive venue for this case. See Tr. at 9:14-16 (Gorman). Mr. Gorman argued that the cases on which the Defendants rely for the proposition that the Miller Act's venue provision protects defendants address circumstances in which defendants, not plaintiffs, seek to challenge venue, making them inapposite. See Tr. at 9:16-21 (Gorman). Mr. Gorman further argued that the Defendants should not be able to undermine BMT Co.'s Miller Act rights by first filing in a different venue. See Tr. at 9:25-10:3 (Gorman). Mr. Gorman acknowledged that the United States Court of Appeals for the Tenth Circuit recognizes the first-filed rule as a rule of judicial convenience, but asserted that it applies when other considerations are equal, and that Congress' express venue provision in the Miller Act trumps the judge-made doctrine. See Tr. at 11:23-12:13 ("Mr. GORMAN: . . . I don't think a court-developed rule of convenience can overcome Congress' mandate.").

The parties agreed that this Action and the Texas Action should be tried together. See Tr. at 12:14-20 (Gorman); Tr. at 6:9-22 (Gruenert). The parties also agreed that there is no forum selection clause in the Subcontract. See Tr. at 10:15-16 ("MR. GORMAN: [T]here is no forum selection clause. . . ."); Tr. at 11:11 ("MR. GRUENERT: There is not a forum selection clause. . . .").

On August 10, 2011, Judge McBryde granted BMT Co.'s Motion to Transfer Venue. He ordered the Texas Action transferred to the District of New Mexico. See Kinley Constr. Co. v. Brown Minneapolis Tank Co., No. CIV 11-0231-35, Order Transferring Case (N.D.Tex. August 10, 2011). On August 11, 2011, the Texas Action was transferred to the District of New Mexico, and opened as case No. CIV 11-0705.

LAW REGARDING THE MILLER ACT

"[T]he Miller Act establishes the general requirement of a payment bond to protect those who supply labor or materials to a contractor on a federal project." F.D. Rich Co., Inc. v. United States ex rel. Indus. Lumber Co., Inc., 417 U.S. 116, 121-22, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974).2 See Limerick v. T.F. Scholes, Inc., 292 F.2d 195, 196 (10th Cir.1961)("Congress enacted the Miller Act to protect persons who supply labor and materials for the construction of federal buildings.").3 "[T]he Miller Act . . . is `highly remedial in nature' and must be liberally construed `to effectuate the Congressional intent to protect those whose labor and materials go into public projects.'" Limerick v. T.F. Scholes, Inc., 292 F.2d at 196 (quoting United States ex rel. Sherman v. Carter, 353 U.S. 210, 216, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957)).

"The Miller Act grants federal courts exclusive jurisdiction." United States ex rel. B & D Mech. Contractors, Inc. v. St. Paul Mercury Ins. Co., 70 F.3d 1115, 1118 (10th Cir.1995)(citing United States ex rel. Gen. Rock & Sand Corp. v. Chuska Dev. Corp., 55 F.3d 1491, 1493 (10th Cir.1995); United States ex rel. Owens-Corning Fiberglass Corp. v. Brandt Constr. Co., 826 F.2d 643, 645 (7th Cir.1987)(discussing how federal courts have unanimously held Miller Act jurisdiction to be exclusively federal), cert. denied, 484 U.S. 1026, 108 S.Ct. 751, 98 L.Ed.2d 764 (1988)).

Before a 2002 amendment, the Miller Act, which was then codified at 40 U.S.C. § 270b(b), stated:

40 U.S.C. § 270b(b)(2000)(emphasis added). Courts disputed whether the Miller Act's provision that the suit must be brought in the "district in which the contract was to be performed and executed" was a jurisdictional requirement or a venue requirement. In United States Fidelity & Guaranty Co. v. Hendry Corp., 391 F.2d 13, 17 n. 3 (5th Cir.1968), the United States Court of Appeals for the Fifth Circuit stated:

391 F.2d at 17 n. 3 (citations omitted). See Tex. Constr. Co. v. United States ex rel. Caldwell Foundry & Mach. Co., 236 F.2d 138, 140 (5th Cir.1956)(noting that "[t]his precise question [whether the language restricts jurisdiction or venue] has not been decided by any federal court," and "conclud[ing] that . . . the statute is a restriction only on venue rather than on the power of the court to entertain the suit").

Similarly, in F.D. Rich Co., Inc. v. United States ex rel. Industrial Lumber Co., Inc., the Supreme Court of the United States rejected the petitioner's contention that the Miller Act's language created a jurisdictional requirement and held that it established "merely a venue requirement," which is satisfied if there is a "sufficient nexus" between the contract and the venue. 417 U.S. at 125, 94 S.Ct. 2157. In that case, the prime contractor, Rich, contracted with the United States to build family housing units at Beale Air Force Base in California. Transmerica Insurance Co., as Rich's surety, posted a payment bond in accordance with the Miller Act. "Rich then awarded Cerpac two contracts on the project, one to select, modify, detail, and install all custom millwork, and one merely to supply all standard exterior plywood, each contract incorporating by reference terms of the prime contract." 417 U.S. at 119, 94 S.Ct. 2157. Cerpac, in turn, placed a single order with plaintiff/respondent Industrial Lumber Co. "for all exterior plywood required under its plywood contract for the Beale project." 417 U.S. at 119, 94 S.Ct. 2157. Rich also had a contract with Cerpac to supply plywood for another government project being constructed in Charleston, South Carolina.

Shortly after Industrial's shipments began, Rich informed Cerpac that more plywood was needed for the Charleston project. Rich and Cerpac decided to divert lumber from the California project to Charleston.

417 U.S. at 119, 94 S.Ct. 2157 (footnotes omitted).

Eventually, Cerpac fell behind in its payments to Industrial, and Industrial filed suit against Rich and its surety in the United States District Court for the Eastern District of California. Rich argued, among others things, "that venue for suit on the South Carolina shipment was improper in the Eastern District of California." 417 U.S. at 120, 94 S.Ct. 2157. The district court rejected Rich's argument, and granted judgment for Industrial. On appeal, the Supreme Court agreed with the district court' holding that the Eastern District of California was the appropriate venue in the case:

417 U.S. at 124-25, 94 S.Ct. 2157 (footnotes omitted)(emphasis added).

In 2002, Congress amended and recodified 40 U.S.C. § 270(b) at 40 U.S.C. § 3133(b)(3) in its current form, which provides:

40 U.S.C. § 3133(b)(3)(bold in original). Congress thus made express that the Miller Act's requirement that suit be filed in the district where the "contract was to be performed" is a venue requirement and not a jurisdictional requirement. While Congress kept the language specifying that an action "must be brought . . . in the United States District Court for any district in which the contract was to be performed and executed," it dropped the "and not elsewhere" language. This change appears to be primarily stylistic, because the statute continues to require that the action "must be brought" in the district where the contract was performed. At most, the change further clarifies that the provision is a venue requirement and not a jurisdictional requirement. Accordingly, the case law construing the Miller Act's old language continues to control.

Tex. Constr. Co. v. United States ex rel. Caldwell Foundry & Mach. Co., 236 F.2d at 140.

Despite the seemingly absolute language of the Miller Act's venue provision, courts have interpreted it to be a venue requirement that parties may waive. In United States for Use of B & D Mechanical Contractors, Inc. v. St. Paul Mercury Insurance Co., 70 F.3d 1115 (10th Cir.1995), the Tenth Circuit held that a forum selection clause can override the Miller Act's venue requirement:

70 F.3d at 1117. The Tenth Circuit concluded that it was "persuaded by [its] sister circuits and agree[d] that a valid forum selection clause supersedes the Miller Act's venue provision." 70 F.3d at 1117. The forum selection clause provided that "[t]he Subcontract Agreement and any claims arising under it shall be governed by the laws of the State of Texas and exclusive venue shall be proper in Bexar County, Texas." 70 F.3d at 1116. The Tenth Circuit went on to decide that the forum selection clause was invalid, because it provided that a state court would have exclusive jurisdiction over a suit arising under the contract, and, "[a]lthough parties are able to contractually alter the Miller Act's venue provisions, they are not able to change its jurisdictional requirements." 70 F.3d at 1117.

LAW REGARDING TRANSFER OF VENUE

In 1948, Congress enacted the federal change-of-venue statute, codified at 28 U.S.C. § 1404, to allow a district court to transfer an action filed in a proper, though not necessarily convenient, venue to a more convenient district. That statute provides, in pertinent part: "For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). Section 1404(a) affords a district court broad discretion to adjudicate motions to transfer based on a case-by-case review of convenience and fairness. See Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1516 (10th Cir.1991). "Recognizing that what is convenient for one litigant may not be convenient for the other, the Supreme Court has taught that section 1404(a) "is intended to place discretion in the district court to adjudicate motions for transfer according to [a] `. . . case-by-case consideration of convenience and fairness.'"" Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 977 (7th Cir.2010) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988)) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964)). "The statutory language guides the court's evaluation of the particular circumstances of each case and is broad enough to allow the court to take into account all factors relevant to convenience and/or the interests of justice." Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d at 977. The statute permits a "flexible and individualized analysis," and affords district courts the opportunity to look beyond a narrow or rigid set of considerations in their determinations. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. at 29, 108 S.Ct. 2239.

Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d at 1516 (internal quotation marks omitted). See Texas Gulf Sulphur v. Ritter, 371 F.2d 145, 147 (10th Cir.1967)(stating the factors that courts consider in making a venue determination under § 1404(a)).

The "interest of justice" is a separate element of the transfer analysis that relates to the efficient administration of the court system. Van Dusen v. Barrack, 376 U.S. at 626-27, 84 S.Ct. 805. "For this element, courts look to factors including docket congestion and likely speed to trial in the transferor and potential transferee forums; each court's relative familiarity with the relevant law; the respective desirability of resolving controversies in each locale; and the relationship of each community to the controversy." Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d at 977 (citations omitted). In some circumstances, "[t]he interest of justice may be determinative, warranting transfer or its denial even where the convenience of the parties and witnesses points toward the opposite result." Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d at 977 (citing Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220-21 (7th Cir.1986)).

LAW REGARDING THE FIRST-TO-FILE RULE

"[T]he `first to file' rule . . . . pertains when two district courts have jurisdiction over the same controversy, affording deference to the first filed lawsuit." Lipari v. U.S. Bancorp NA, 345 Fed.Appx. 315, 317 (10th Cir.2009).

Buzas Baseball, Inc. v. Bd. of Regents of Univ. Sys. of Ga., 189 F.3d 477, at *2 (10th Cir.1999)(table).

Courts do not mechanically apply the first-to-file rule, but "the court which first obtains jurisdiction should be allowed to first decide issues of venue." Hospah Coal Co. v. Chaco Energy Co., 673 F.2d 1161, 1164 (10th Cir.1982). A district court may decline to follow the first-to-file rule and dismiss a declaratory judgment action if that action was filed for the purpose of anticipating a trial of the same issues in a court of coordinate jurisdiction. See Tempco Elec. Heater Corp. v. Omega Eng'g, Inc., 819 F.2d 746, 749 (7th Cir.1987)(stating that, where declaratory judgment action is filed in anticipation of trademark infringement action, the "infringement action should proceed, even if filed" after the declaratory judgment action); Amerada Petroleum Corp. v. Marshall, 381 F.2d 661, 663 (5th Cir.1967).

In Hospah Coal Co. v. Chaco Energy Co., the Tenth Circuit reversed and remanded a district court's preliminary injunction order with instructions for the district court to dismiss that action so that the court in which the matter was first filed could first decide issues of venue. The Tenth Circuit stated:

673 F.2d at 1163-64.

In Research Automation, Inc. v. Schrader-Bridgeport Intern., Inc., the United States Court of Appeals for the Seventh Circuit explained:

626 F.3d at 979-82 (footnotes and some citations omitted).

ANALYSIS

The Court denies the Defendants' Motion. Courts interpret the Miller Act's venue provision liberally, and there does not appear to be any sound reason in this case not to give effect to Congress' intent that Miller Act cases be brought where the contract was to be performed and executed. Accordingly, the Court will not transfer this case. Moreover, Judge McBryde granted BMT Co.'s Motion to Transfer Venue, and transferred the Texas Action to the District of New Mexico. Consequently, there is no longer a sound reason to transfer the case to the Northern District of Texas.

I. THE TEXAS ACTION INVOLVES IDENTICAL OR SUBSTANTIALLY OVERLAPPING ISSUES AS THIS ACTION.

The Defendants contend that this action presents duplicative or substantially identical facts as the Texas Action. They therefore argue that the Court should dismiss this action or transfer venue to the Northern District of Texas. BMT Co. does not dispute that the facts in this case involve identical or substantially overlapping issues as the Texas Action. Indeed, BMT Co. asserts in its Motion to Transfer Venue that it filed in the Texas Action that the Texas Action should be consolidated with this action, because the actions "involv[e] the same parties, the same contract and the same incident." Motion to Transfer Venue at 1. BMT Co. argues that, pursuant to the Miller Act, the District of New Mexico has "exclusive venue" for its Miller Act claim. Response at 1.

"[T]he `first-to-file' rule permits a district court to decline jurisdiction where a complaint raising the same issues against the same parties has previously been filed in another district court." Buzas Baseball, Inc. v. Bd. of Regents of Univ. Sys. of Ga., 189 F.3d 477, at *2 (citations omitted). See Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 603 (5th Cir.1999). "[I]n determining whether to dismiss an action, the court must answer two questions: (1) are the two pending actions so duplicative or involve substantially similar issues that one court should decide the issues; and (2) which of the two courts should resolve the case?" Excel Music, Inc. v. Simone, No. 95-3626, 1996 WL 5708, at *5 (E.D.La. Jan. 5, 1996) (citing Texas Instruments, Inc. v. Micron Semiconductor, Inc., 815 F.Supp. 994, 997 (E.D.Tex.1993)). Generally, the issues presented in two separate actions need not be identical to allow one court to decide the action, "but there must be substantial overlap between the two suits." Excel Music, Inc. v. Simone, 1996 WL 5708 at *5. The two cases must have such a common identity that a determination in one action leaves little or nothing to be determined in the other. See Thermal Dynamics Corp. v. Union Carbide Corp., 214 F.Supp. 773, 774 (S.D.N.Y.1963). In the present case, there is no doubt that there would be nothing left to try in this action if the Northern District of Texas resolves that Texas Action. Should the court in Texas conclude that BMT Co. was at fault for failing to timely complete its work, thereby damaging Kinley Construction, the Miller Act claim necessarily would be moot. Similarly, if this Court concluded that BMT Co. was not responsible for the fuel tanks' collapse and the resulting delays, then Kinley Construction's claims in the Texas Action would be moot.

II. THE MILLER ACT'S VENUE PROVISION IS NOT JUST FOR THE DEFENDANTS' PROTECTION.

Because the issues in this action and the Texas Action are identical or substantially overlapping, the question becomes which court should decide the issue. The Defendants contend that "[t]he court with prior jurisdiction over the common subject matter should resolve all issues presented in related actions." W. Gulf Mar. Ass'n v. ILA Deep Sea Local 24, 751 F.2d 721, 730 (5th Cir.1985). BMT Co. responds that the Miller Act's venue provision prevails over the first-to-file rule. The Court believes that the Miller Act's venue provision, which requires that a Miller Act claim be filed in the district where the contract was to be performed, prevails over the judicial doctrine favoring keeping a suit in the first court that has jurisdiction. The Court agrees that either no forum non conveniens analysis applies in light of a Miller Act's venue provision, or, in the alternative, that the Miller Act's venue provision is a "special circumstance" that prevails over the first-filed rule, Hoffman v. Blaski, 363 U.S. 335, 352, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960)("Section 1404(a) was devised to avoid needless hardship and even miscarriage of justice by empowering district judges to recognize special circumstances calling for special relief."); especially where, as here, the forum non conveniens analysis is a "is a wash," Tr. at 8:19-20 (Gruenert).

The Defendants contend that the Miller Act's venue provision benefits only defendants. The plain language of the Miller Act's venue provision, which states that an action under it "must be brought . . . in the United States District Court for any district in which the contract was to be performed and executed," 40 U.S.C. § 3133(b)(3)(B), does not suggest such a limited reading. The Defendants cite two cases in support of this contention. The Defendants assert the Fifth Circuit "stated that the venue provision was enacted `for the benefit of the defendants, not the plaintiffs.'" Reply at 2 (quoting United States ex rel Harvey Gulf Int'l Marine, Inc. v. Md. Cas. Co., 573 F.2d 245, 248 (5th Cir.1978)). They also cite United States ex rel. Benefit of Bailey-Lewis-Williams of Fla., Inc. v. Peter Kiewit Sons Co. of Canada, Ltd., 195 F.Supp. 752 (D.D.C. 1961), in support of the contention that "courts have treated the Miller Act venue provision as an election for the defendant to assert or waive." Reply at 2. After a careful review of these cases, and the Fifth Circuit's opinion in Texas Construction Co. v. United States ex rel. Caldwell Foundry & Machine Co., on which these cases are based, the Court is unconvinced by this non-binding authority.

In United States ex rel. Benefit of Bailey-Lewis-Williams of Fla., Inc. v. Peter Kiewit Sons Co. of Canada, Ltd., the United States District Court for the District of Columbia addressed a surety's motion to dismiss a Miller Act claim. The surety argued that, because the contract was performed in Canada, the district court lacked jurisdiction over the suit. The district court rejected this argument, holding in part that the Miller Act provided a venue requirement, not a jurisdictional prerequisite, and that the District of Columbia was, out of necessity, an appropriate venue to provide the plaintiff with the relief the Miller Act was meant to provide:

195 F.Supp. at 755, 756 (footnotes omitted). The district court did not address a plaintiff's attempt to invoke or waive the Miller Act's venue provision, and the district court did not say that the provision confers a privilege only on defendants. Instead the district court, to preserve the Miller Act's benefits for the plaintiff, "construed [the Miller Act] as containing an exception in respect of suit such as this where the contract was to be performed and executed in a foreign country having no United States District Court." 195 F.Supp. at 756. The district court thus held that it had venue by necessity, as did the United States Court of Appeals for the D.C. Circuit when it affirmed the district court sub nom, in Indemnity Ins. Co. of North America v. United States ex rel. Bailey-Lewis-Williams of Fla., Inc., 299 F.2d 930 (D.C.Cir.1962), stating:

299 F.2d at 931. See United States ex rel. Bryant Elec. Co. v. Aetna Cas. & Sur. Co., 297 F.2d 665, 669 (2d Cir.1962)(similarly rejecting a defendant's argument that the United States District Court for the Southern District of New York lacked jurisdiction over a Miller Act claim based on a contract performed in Canada).

The D.C. District Court relied on the Supreme Court's decision in Lee v. Chesapeake & Ohio Ry., which was not a Miller Act case, and the Fifth Circuit's opinion in Texas Construction Co. v. United States ex rel. Caldwell Foundry & Machine Co., which cited Lee v. Chesapeake & Ohio Ry., in support of its interpretation of the Miller Act. In Lee v. Chesapeake & Ohio Ry., the Supreme Court addressed whether a defendant's general appearance waives objections to improper venue under the Judicial Code and whether a plaintiff may object to the venue to which the defendant removes a case. The plaintiff was a citizen and resident of Texas, and the defendant a corporate citizen and resident of Virginia. The plaintiff began the action in a state court in Bracken County, Kentucy. The defendant removed the case, based on diversity of citizenship, to the United States District Court for the Eastern District of Kentucky, which included Bracken County. The plaintiff moved the district court to remand to the state court, arguing that the federal district court was without jurisdiction, because neither party was a resident of that district. The district court entered judgment for the defendant, and the plaintiff appeal on a writ of error.

The Supreme Court first concluded that the district court had diversity jurisdiction over the suit. The Supreme Court next turned to the question whether the district court was the appropriate forum:

260 U.S. at 655, 657, 43 S.Ct. 230 (citations omitted)(emphasis added). The Supreme Court thus held that, because "removals are had only at the ins[is]tance of defendants," the removal statute "confers a personal privilege on the defendant, which he may assert, or may waive, at his election." 260 U.S. at 655, 657, 43 S.Ct. 230. Unlike the Miller Act, the Judicial Code expressly vested the right of removal in only "the defendant or defendants." 260 U.S. at 657, 43 S.Ct. 230 (quoting 28 Stat. 1010). See 28 U.S.C. § 1441 ("[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants. . . .").

In Texas Construction Co. v. United States ex rel. Caldwell Foundry & Machine Co., the Fifth Circuit, in construing the Miller Act's venue provision, quoted the Supreme Court's decision in Lee v. Chesapeake & Ohio Ry. The Fifth Circuit decided, as a matter of first impression for the federal judiciary, whether the Miller Act's requirement that an action be brought in the "district in which the contract was to be performed and executed and not elsewhere" was a restriction on venue or jurisdiction. 236 F.2d at 140 ("This precise question has not been decided by any federal court."). The Fifth Circuit held that the Miller Act's language "is a restriction only on venue rather than on the power of the court to entertain the suit." 236 F.2d at 140. After the district court entered judgment in favor of the plaintiff, the defendant/appellant appealed, arguing in part that 40 U.S.C. § 270b (2000) "is a jurisdictional as distinguished from a venue statute." 236 F.2d at 140. The plaintiff/appellee argued the statutory language "merely gave the defendant in such a suit the right to object if a suit was brought in another district, but did not restrict the power of the court to act if no such objection was made":

236 F.2d at 140.

The Fifth Circuit relied in part on Supreme Court precedent interpreting the "Heard Act, a predecessor to the Miller Act, and one which had as its purpose the same end of protecting unpaid subcontractors and materialmen on government contracts." 236 F.2d at 140. The Fifth Circuit noted that in United States v. Congress Construction Co., 222 U.S. 199, 32 S.Ct. 44, 56 L.Ed. 163 (1911), the Supreme Court interpreted a provision of the Heard Act:

236 F.2d at 141-42.

Having decided that the Supreme Court's decision in United States v. Congress Construction Co. did not decide whether the statutory provision was jurisdictional, the Fifth Circuit found guidance in Lee v. Chesapeake & Ohio R. Co. The Fifth Circuit stated:

236 F.2d at 142-43 (emphasis added). The Fifth Circuit thus concluded that the Miller Act's venue provision is not jurisdictional, and also stated that it "is only one for the benefit of the defendants." 236 F.2d at 143. The Fifth Circuit's decision did not require it to decide whether the Miller Act's venue provision benefitted only defendants, or whether plaintiffs could also invoke it, making it factually inapposite. Moreover, it makes that section of the Fifth Circuit's decision dicta.

The Court is unconvinced by this persuasive authority on a number of accounts. First, the Fifth Circuit does not explain why the Supreme Court's interpretation of the removal statute, under which "the right [to remove] is [expressly] given to `the defendant or defendants' without any qualification," Lee v. Chesapeake & O. Ry. Co., 260 U.S. at 658, 43 S.Ct. 230 (quoting 28 Stat. 1010), "is equally applicable to" the Miller Act, Tex. Constr. Co. v. United States ex rel. Caldwell Foundry & Mach. Co., 236 F.2d at 142, which "is `highly remedial in nature' and must be liberally construed `to effectuate the Congressional intent to protect those whose labor and materials go into public projects,'" Limerick v. T.F. Scholes, Inc., 292 F.2d at 196 (quoting United States ex rel. Sherman v. Carter, 353 U.S. at 216, 77 S.Ct. 793). The Supreme Court's opinion in Lee v. Chesapeake & O. Ry. Co. is also distinguishable, because the Supreme Court relied in part on the history of the removal statute, which Congress had amended from allowing removal by "either party" to allow removal only by defendants:

260 U.S. at 660-61, 43 S.Ct. 230. The Miller Act's legislative history reveals no analogous restriction. The Court is unconvinced that the Supreme Court's interpretation of language in a statute that expressly protects only defendants, in particular where the statute had been amended to exclude plaintiffs, provides much guidance for interpreting a statute that is designed to protect the plaintiffs.

Second, the Fifth Circuit construed the Miller Act's venue provision based on procedural peculiarities of its predecessor statute. Unlike the Heard Act, which "limit[ed] the relief to a single suit by one of the class of creditors," the Miller Act allows each subcontractor "to file his own lawsuit without regard to other pending actions." Tex. Constr. Co. v. United States ex rel. Caldwell Foundry & Mach. Co., 236 F.2d at 143. When Congress enacted the Miller Act, it shed the procedural difficulties that burdened plaintiffs' recovery:

United States ex rel. Bryant Elec. Co. v. Aetna Cas. & Sur. Co., 297 F.2d 665, 668 (2d Cir.1962). It is unclear why the Court should rely on procedural requirements Congress abandoned over a eighty years ago to interpret the language it retained. In United States ex rel. Bryant Electric Co. v. Aetna Casualty & Surety Co., the United States Court of Appeals for the Second Circuit described the Miller Act's legislative history:

Committee Hearing at 25-26. Cushman asserted that requiring the laborers and suppliers to pursue an action in a forum other than where the contract was to be performed "prejudice[d] the rights of these unpaid subcontractors and materialmen." Committee Hearing at 26. Thus, the House Committee heard testimony that the venue provision would benefit Miller Act plaintiffs.

On the second point, that laborers and suppliers would benefit from being allowed to bring multiple suits—contrary to the sureties' request—Cushman testified that allowing multiple suits would eliminate some of the procedural barriers that have proved nettlesome for Heard Act plaintiffs. Cushman noted that the Supreme Court in United States ex rel. Texas Portland Cement Co. v. McCord, 233 U.S. 157, 34 S.Ct. 550, 58 L.Ed. 893 (1911), had held that a plaintiff who intervened in a prematurely filed heard act suit lost his cause of action. Cushman also noted that, in United States v. Bradley, 37 F.2d 347 (3d Cir.1930), the United States Court of Appeals for the Third Circuit had rejected another plaintiff's attempt to avoid a similar fate by filing a new action instead of joining a prematurely filed suit. Cushman stated:

Committee Hearing at 24. Cushman further argued that, after reviewing all published cases, he could find only one instance in which a bond was insufficient to cover all claims, and that duplicative suits could be avoided, because judges could consolidate actions springing from common grounds. Thus, while "Congress did not heed [the sureties'] requests" for a single suit, United States ex rel. Bryant Elec. Co. v. Aetna Cas. & Sur. Co., 297 F.2d at 668, it heeded the request of laborers and suppliers that they be allowed to bring multiple suits. Congress also provided a separate bond for laborers and suppliers and required the action be brought where "the contract was to be performed and executed," 40 U.S.C. § 3133(b)(3), allowing Miller Act plaintiffs to bring suit locally.

Third, and perhaps most importantly, the Fifth Circuit's interpretation reads the Miller Act's venue provision narrower than the statute's plain language would suggest. The Court is reluctant to read the Miller Act to restrict its benefits to defendants when its plain language "affords no basis for subtracting anything from provisions which are definite and free from ambiguity," Lee v. Chesapeake & O. Ry. Co., 260 U.S. at 660, 43 S.Ct. 230, particularly when the statute was enacted to "protect those whose labor and materials go into public projects," Limerick v. T.F. Scholes, Inc., 292 F.2d at 196 (quoting United States ex rel. Sherman v. Carter, 353 U.S. at 216, 77 S.Ct. 793).

The Fifth Circuit's subsequent opinions in United States ex rel. Harvey Gulf International. Marine, Inc. v. Maryland Casualty Co., and in Electronic & Missile Facilities, Inc. v. U.S. for Use of Moseley, 306 F.2d 554 (1962), rev'd on other grounds, sub nom, 374 U.S. 167, 83 S.Ct. 1815, 10 L.Ed.2d 818 (1963), cite its opinion in Texas Construction Co. v. United States ex rel. Caldwell Foundry & Machine Co. for the proposition that "[t]he venue provision of the Miller Act is . . . enacted for the benefit of defendants, not plaintiffs." United States ex rel. Harvey Gulf Int'l Marine, Inc. v. Md. Cas. Co., 573 F.2d at 248 (citing Tex. Constr. Co. v. United States ex rel. Caldwell Foundry & Mach. Co., 236 F.2d at 143). See Elec. & Missile Facilities, Inc. v. United States ex rel. Moseley, 306 F.2d at 556 ("[T]he Miller Act, is only one for the benefit of the defendants and may thus be waived by them, as may any other question of venue" (quoting Tex. Constr. Co. v. United States ex rel. Caldwell Foundry & Mach. Co., 236 F.2d at 143)). In United States ex rel. Harvey Gulf International Marine, Inc. v. Maryland Casualty Co., the Fifth Circuit addressed in part a district court's entry of summary judgment against the plaintiff on its Miller Act claim. The contract at issue, "the West Atchafalaya contract[,] was to be performed in the Western District of Louisiana, not the Eastern District where suit was filed." 573 F.2d at 247. Quoting the Miller Act's language that suit should be brought where the contract was performed, the Fifth Circuit reversed the district court's grant of summary judgment, holding that the district court should have dismissed for lack of venue, and that harmless-error analysis was inapplicable in light of the Miller Act's unambiguous language. The Fifth Circuit stated:

573 F.2d at 247-48, 249. The Fifth Circuit relied on a number of non-Miller Act cases in which courts had reversed after judgment was entered under various statutory "restrictive venue provision[s]," reasoning that "[f]or [it] to enlarge upon the mandate of the Congress as to venue in such . . . actions would be an intrusion into the legislative field." 573 F.2d at 249 (quoting Schnell v. Peter Eckrich & Sons, 365 U.S. 260, 262-263, 81 S.Ct. 557, 5 L.Ed.2d 546 (1961)).4

In Electronic & Missile Facilities, Inc. v. United States ex rel. Moseley, the Fifth Circuit also stated that the Miller Act's venue provision "was obviously not designed to favor Miller Act plaintiffs." 306 F.2d at 556. In that case, a plaintiff brought suit in the United States District Court for the Middle District of Georgia, where the contract at issue was performed. The contract contained an arbitration clause, and the defendants moved, pursuant to the Arbitration Act, 9 U.S.C. § 2, to stay the action until the parties completed arbitration. The district court denied the defendants' motion, concluding that the arbitration clause was "contrary to the policy underlying the Miller Act," because "a contrary holding would nullify the provisions of the Miller Act requiring the appellee to sue in the District Court for the Middle District of Georgia and giving him the right to prosecute the suit to final execution and judgment." 306 F.2d at 555. The district court stated that an alternative "reason why th[e] action should not be stayed is that the suit seeks to cancel or rescind for fraud both of the subcontracts." 306 F.2d at 558.

The Fifth Circuit, over the Honorable Richard Rives' dissent, reversed. It stated:

306 F.2d at 556. The Fifth Circuit also held that "the District Court erred in concluding that the appellee's claim for rescission of the contracts on the ground of fraud was a bar to arbitration." 306 F.2d at 558.

The Fifth Circuit did not explain why its argument that, because it did not provide plaintiffs "a choice of forums in which to bring suit," the Miller Act's venue provision "was obviously not designed to favor Miller Act plaintiffs," did not also lead to the conclusion that the statute did not benefit defendants; Congress afforded neither party "a choice of forums in which to bring suit." 306 F.2d at 556. Under the Fifth Circuit's reasoning, the Miller Act's venue provision admits no beneficiary. The Fifth Circuit also did not explain why courts should ignore the "unambiguous Congressional mandate that Miller Act suits be brought in the district in which the contract was to be performed," particularly when the "unambiguous Congressional mandate" does not distinguish between plaintiffs and defendants. United States ex rel Harvey Gulf Int'l Marine, Inc. v. Md. Cas. Co., 573 F.2d at 248,

On appeal, the Supreme Court reversed the Fifth Circuit's decision, because the "Petitioner attack[ed] the subcontracts, as well as the arbitration agreement, as being fraudulent, and this issue, [the Supreme Court] conclude[d], must be first determined by the District Court." 306 F.2d 554, 559. Moseley v. Elec. & Missile Facilities, Inc., 374 U.S. 167, 169, 83 S.Ct. 1815, 10 L.Ed.2d 818 (1963). The Supreme Court did not reach the Miller Act issue:

374 U.S. at 171, 83 S.Ct. 1815. Chief Justice Warren and Justice Black concurred, because "to allow this question to be decided by arbitrators would be to that extent to enforce the arbitration agreement even though steeped in the grossest kind of fraud." 371 U.S. at 172, 83 S.Ct. 239 (Warren, C.J., joined by Black, J., concurring). They wrote separately, however, to "point out that this disposition leaves open questions of great importance to laborers and materialmen who under the Miller Act are entitled to have their controversies settled in independent courts of law," including whether

371 U.S. at 172, 83 S.Ct. 239 (Warren, C.J., joined by Black, J., concurring)(emphasis added).

Judge Rives dissented in the Fifth Circuit's opinion in United States ex rel. Harvey Gulf International Marine, Inc. v. Maryland Casualty Co., forcefully arguing that the Miller Act's venue provision benefits plaintiffs:

306 F.2d at 558-60 (Rives, J., dissenting). The Court believes that Judge Rives has the better interpretation of the Miller Act's venue provision. The Miller Act's plain language does not suggest that the Court should read its venue provision to benefit only defendants. On the contrary the Miller Act was enacted to benefit plaintiffs, and Congress rejected the request of Miller Act sureties that it restrict plaintiffs to bringing a single action. See United States ex rel. Bryant Elec. Co. v. Aetna Cas. & Sur. Co., 297 F.2d at 668 (footnotes omitted).

While no other Court of Appeals has adopted the Fifth Circuit's interpretation of the Miller Act's venue provision, the Second Circuit has approvingly noted that this line cases is consistent with its finding that the Miller Act's venue provision is "of `scant utility, save as a convenience to the defendants.'" United States ex rel. Capolino Sons, Inc. v. Elec. & Missile Facilities, Inc., 364 F.2d 705 (2d Cir.1966)(quoting United States ex rel. Bryant Elec. Co. v. Aetna Cas. & Sur. Co., 297 F.2d at 668). In United States ex rel. Capolino Sons, Inc. v. Electronic & Missile Facilities, Inc., the Second Circuit stated:

364 F.2d at 707.5 The Second Circuit, noting Judge Reeves dissent in Electronic & Missile Facilities, Inc. v. United States for the Use of H.W. Moseley, asserted:

United States ex rel. Capolino Sons, Inc. v. Electronic & Missile Facilities, Inc., 364 F.2d at 707 n. 2. Regardless of whether the "place in which the contract was to be performed is . . . necessarily, or even usually, the place in which a Miller Act plaintiff may find it most convenient to sue," it is unclear how it serves the Miller Act's purposes—or comports with its plain language—to deny plaintiffs the protections of its venue protection. Indeed, when the place of performance is not where the plaintiff prefers to bring suit, the plaintiff can elect to waive the venue requirement. Consequently, the plaintiff would invoke the Miller Act's venue provision when the place of performance is the plaintiff's preferred venue, realizing the Miller Act's policy of "protect[ing] those who supply labor or materials to a contractor on a federal project." F.D. Rich Co., Inc. v. United States ex rel. Indus. Lumber Co., Inc., 417 U.S. at 121-22, 94 S.Ct. 2157. In the Court's experience, which comports with Cushman's statement to the House Committee, prime contractors are often national or international companies, while subcontractors, suppliers, and laborers are often smaller, regional or local companies. It follows that having the forum be where the contract was to be performed or executed would typically benefit Miller Act plaintiffs, because they could bring suit locally.

The Court also thinks it is significant that Congress did not amend the Miller Act in accordance with the Fifth Circuit's interpretation when it amended and recodified the Act in 2002. Congress, which amended the Miller Act in the light of court decisions interpreting it to protect only defendants, could have decided to modify the language to indicate this restriction. Congress did not make such a change. Instead, Congress clarified, consistent with judicial interpretation that the Miller Act provides a limitation on venue and not on jurisdiction, that the Miller Act's requirement than action under it be brought in the district where the contract was to be performed or executed limits the venue where an action may be brought:

40 U.S.C. § 3133(b)(3)(B)(bold in original). Congress made no mention of plaintiffs or defendants. To read the Miller Act's venue provision to apply only to defendants would trench "upon the mandate of the Congress as to venue" and thereby "would be an intrusion into the legislative field." United States ex rel. Harvey Gulf Intern. Mar., Inc. v. Md. Cas. Co., 573 F.2d at 249 (quoting Schnell v. Peter Eckrich & Sons, 365 U.S. at 262-263, 81 S.Ct. 557).

Moreover, neither the Supreme Court nor the Tenth Circuit have interpreted the Miller Act as protecting only defendants. On the contrary, the Tenth Circuit stated in United States for Use of B & D Mechanical Contractors, Inc. v. St. Paul Mercury Insurance Co., 70 F.3d 1115 (10th Cir.1995), that "Congress enacted the Miller Act to protect persons who supply labor and materials for the construction of federal buildings," which is the Miller Act plaintiff. Limerick v. T.F. Scholes, Inc., 292 F.2d at 196 ("[T]he Miller Act . . . is `highly remedial in nature' and must be liberally construed `to effectuate the Congressional intent to protect those whose labor and materials go into public projects.'") (quoting United States ex rel. Sherman v. Carter, 353 U.S. at 216, 77 S.Ct. 793). In their concurrence in Moseley v. Elec. & Missile Facilities, Inc., Chief Justice Warren and Justice Black stated that "Congress, in the public interest, has protected [laborers and materialmen] by fixing the venue for their claims under the Miller Act in a particular federal court." 374 U.S. at 172, 83 S.Ct. 1815 (Warren, C.J., joined by Black, J., concurring). In Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkins Co., 322 U.S. 102, 64 S.Ct. 890, 88 L.Ed. 1163 (1944), the Supreme Court stated that the Miller Act "was designed primarily to eliminate certain procedural limitations on its beneficiaries. There was no expressed purpose in the legislative history to restrict in any way the coverage of the Heard Act; the intent rather was to remove the procedural difficulties found to exist under the earlier measure and thereby make it easier for unpaid creditors to realize the benefits of the bond." 322 U.S. at 105, 64 S.Ct. 890. It would contravene this purpose to read the Miller Act's venue provision to benefit only defendants.

Moreover, when the Supreme Court held in F.D. Rich Co., Inc. v. United States ex rel. Indus. Lumber Co., Inc. that the Miller Act's venue provision established "merely a venue requirement" in 1974-approximately eighteen years after the Fifth Circuit first stated that the Miller Act's venue provision benefits only defendant in Texas Construction Co. v. United States ex rel. Caldwell Foundry & Machine Co., and twelve years after the Fifth Circuit repeated this statement in Electronic & Missile Facilities, Inc. v. U.S. for Use of Moseley—the Supreme Court did not adopt this reasoning. It did not read the Miller Act's venue provision to benefit only one particular party, and it did not hold the defendant could elect to waive the venue requirement; instead, the Supreme Court applied the venue provision against the objecting defendant to decide that the defendant was properly sued in the district the Miller Act required. If plaintiffs could not enforce the Miller Act's venue provision against the defendants' desire, the Supreme Court would not have analyzed whether the plaintiff's choice of venue was appropriate under the Miller Act; it would have instead employed a traditional venue analysis.

In P & P Industries, Inc. v. Sutter Corp., 179 F.3d 861 (10th Cir.1999), the Tenth Circuit, in holding that the Arbitration Act did not provide exclusive venue in district courts, pointed to the Miller Act as an example of "unambiguous language" that expresses Congress' intention that a "specific district court . . . be the exclusive forum for a certain matter":

179 F.3d at 869.

Other courts have held that parties cannot waive the Miller Act's venue provision. In United States ex rel. Coffey v. William R. Austin Const. Chaco., 436 F.Supp. 626 (W.D.Okla.1977), the United States District Court for the Western District of Oklahoma held that, despite the parties' agreement and desire to proceed in the Western District of Oklahoma, and despite that neither party had attacked jurisdiction and venue of the court, or requested a transfer of the case to the Western District of Arkansas, where the contract was performed, the district court transferred the action in the interest of justice. Relying on the Seventh Circuit's statement "hold[ing] that the language of [the Miller Act] is unequivocal in stating that actions are to be brought in the United States District Court for the district of performance `and not elsewhere,'" the district court sua sponte transferred the case:

436 F.Supp. at 628.

In sum, the Court is unconvinced by the persuasive authority of the Fifth Circuit line of cases and its progeny that hold the Miller Act's venue provision benefits defendants and not plaintiffs. The Miller Act's venue provision does not suggest such an interpretation. "There is nothing in the language of the Act, or in its legislative history, which would restrict to the defendants the benefit of that requirement." Elec. & Missile Facilities, Inc. v. United States ex rel. Moseley, 306 F.2d at 559 (Rives, J., dissenting). As Judge Rives forcefully argued in his dissent, reading the act to deny Miller Act plaintiffs the benefits of the Act's venue provision is contrary to the language and spirit of the Act.

III. RULE 13 DOES NOT REQUIRE THE COURT TO DISMISS OR TO TRANSFER BMT CO.'S MILLER ACT CLAIM.

The Defendants argue in support of their Motion that BMT Co.'s Miller Act claim is a compulsory counterclaim under rule 13(a). BMT Co. responds that rule 13(a) is unavailing in the face of the "unambiguous Congressional mandate that Miller Act suits be brought in the district in which the contract was to be performed." United States ex rel. Harvey Gulf Int'l Marine, Inc. v. Md. Cas. Co., 573 F.2d at 248. Rule 13(a) states that "[a] pleading must state as a counterclaim any claim that—at the time of its service— the pleader has against an opposing party if the claim ... arises out of the transaction or occurrence that is the subject matter of the opposing party's claim...." Fed. R.Civ.P. 13(a)(1)(A).

Publicis Communc'ns v. True N. Communc'ns Inc., 132 F.3d 363, 365-66 (7th Cir.1997). "Nothing in Rule 13 prevents the filing of a duplicative action instead of a compulsory counterclaim." Adam v. Jacobs, 950 F.2d 89, 93 (2d Cir.1991). Courts have held that rule 13(a) is not a vehicle to challenge venue. See Mammoth Res. Partners, Inc. v. Phoenix Drilling, Inc., No. 1:10-CV-36-M, 2010 WL 2651079, at *6 (W.D.Ky. June 20, 2010)("[V]enue is not controlled by Fed.R.Civ.P. 13(a).... Rather, venue is controlled by 28 U.S.C. § 1391...."). "The filing of the second action, however, contravenes the purpose of Rule 13: `Ideally, once a court becomes aware that an action on its docket involves a claim that should be a compulsory counterclaim in another pending federal suit, it will stay its own proceeding.'" Adam v. Jacobs, 950 F.2d at 93 (quoting 6 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1418, at 142-43 (2d ed. 1990 & Supp.1991)). Because the Defendants seek dismissal or transfer of venue, rule 13(a) is not the vehicle for the relief they seek.

Moreover, a statutory venue provision may remove a claim from rule 13(a)'s dictates. There is a dearth of authority addressing whether the Miller Act's venue provision prevails over rule 13(a) when the earlier action was not brought in the venue the Miller Act requires. The Court finds guidance in Caleshu v. United States, 570 F.2d 711 (8th Cir.1978), a tax law case. The United States Court of Appeals for the Eighth Circuit held that, where rule 13(a) conflicted with a statutory venue requirement, a matter involving the same transaction or occurrence was not a compulsory counterclaim. In that case, the "the government assessed Caleshu with certain taxes totaling over $30,000 owed by several Hawaii corporations on the theory that Caleshu was a responsible person under 26 U.S.C. § 6672." 570 F.2d at 712. Caleshu paid part of the assessed taxes before bringing an action in the "United States District Court for the Eastern District of Missouri against the United States and others, seeking a refund of alleged overpayments of federal taxes and an injunction against further collection of assessed taxes." 570 F.2d at 712. On the United States' motion, the Eastern District of Missouri transferred the case to United States District Court for the District of Hawaii. Caleshu petitioned the Eighth Circuit for a writ of mandamus, and the Eighth Circuit "direct[ed] the district court to vacate its order granting a change of venue from the United States District Court for the Eastern District of Missouri to the District of Hawaii, and to deny the government's motion for change of venue." 570 F.2d at 712. The United States subsequently filed an action in the District of Hawaii pursuant to 26 U.S.C. § 7402(a) to reduce the unpaid assessments to judgment. Caleshu countered by filing a motion in the Eastern District of Missouri to stay the action in Hawaii. "[T]he district court granted Caleshu's motion to stay the Hawaii action, holding that the government's collection action in Hawaii is a compulsory counterclaim under Fed.R.Civ.P. 13(a) to Caleshu's refund action in the Eastern District of Missouri." 570 F.2d at 713. The United States appealed.

The Eighth Circuit held that the United States' second action in the District of Hawaii was not a compulsory counterclaim:

570 F.2d at 714.

Analogous reasoning leads the Court to conclude that BMT Co.'s Miller Act claim is not a compulsory counterclaim, notwithstanding both actions arising from the same transaction or occurrence. If a plaintiff was forced to file its Miller Act claim as a counterclaim in a defendant's first-filed action, a defendant could defeat the Miller Act's venue provision by preemptively filing suit in a different forum. This result would undermine the "unambiguous Congressional mandate that Miller Act suits be brought in the district in which the contract was to be performed." United States ex rel. Harvey Gulf Int'l Marine, Inc. v. Md. Cas. Co., 573 F.2d at 248.

In Southern Const. Co. v. Pickard, 371 U.S. 57, 83 S.Ct. 108, 9 L.Ed.2d 31 (1962), the Supreme Court addressed the inverse argument: that a defendant's claim was barred when it failed to bring a compulsory counterclaim in response to a plaintiff's Miller Act claim. In that case, the subcontractor worked on a project rehabilitating barracks. Three contracts covered the work in Georgia and another contract covered the work in Tennessee. The subcontractor did not complete the work at either site, and one of the subcontractor's suppliers alleged that it was owed $34,520.00 for materials furnished on the Tennessee project and $104,000.00 for materials furnished on the Georgia project, and that the contractor and subcontractor were jointly liable for the debt. The prime contractor paid the supplier $35,000.00 in exchange for a complete release of all liability on both projects.

The subcontractor brought a suit in Georgia against the prime contractor for non-payment under the contracts. The prime contractor counterclaimed for the amount it paid the supplier. Because the Miller Act "appeared to prohibit an action in the Georgia District Court on the Tennessee project, Pickard in April 1957 filed" a second action—that was ultimately appealed to the Supreme Court—against the contractor in Tennessee, which "relat[ed] to the Tennessee project only, and by amendment eliminated this part of his claim from the Georgia action." 371 U.S. at 58-59, 83 S.Ct. 108. The prime contractor "dropped" the $35,000.00 counterclaim from the Georgia action, and first asserted the payment as a counterclaim in the Tennessee action, but "later waived any claim to affirmative relief in [the Tennessee] action and sought only a credit of $34,520 against Pickard's contract claim on the Tennessee project." 371 U.S. at 59, 83 S.Ct. 108. The district court in the Tennessee action allowed the credit and held that the subcontractor was not entitled to any recovery.

371 U.S. at 59-60, 83 S.Ct. 108 (citations omitted). Cf. Publicis Communc'ns v. True N. Communc'ns Inc., 132 F.3d at 366 ("One court of appeals has expressed in dictum the view that a party to a forum-selection clause may not raise in a different forum, even as a compulsory counterclaim, a dispute within the scope of that clause. That conclusion must be right." (citing Karl Koch Erecting Co. v. N.Y. Convention Ctr. Dev. Corp., 838 F.2d 656, 659 (2d Cir.1988))).

The Supreme Court reversed the Sixth Circuit. Accepting "that the $35,000 payment had not been allocated as between the Tennessee and Georgia projects and that it therefore could have been asserted in either action," the Supreme Court held:

371 U.S. at 60-61, 83 S.Ct. 108 (footnotes omitted)(emphasis added).

The Court finds guidance in two points from the Supreme Court's opinion. First, the Supreme Court stated that the Miller Act required the plaintiff to "split" its claims and "bring two separate actions in two different districts." 371 U.S. at 60, 83 S.Ct. 108. While the Supreme Court did not address Miller Act counterclaims, as the Seventh Circuit stated in Publicis Communication v. True North Communications Inc., the "merger and bar" doctrine imposes the same requirements on plaintiffs as rule 13(a) does on defendants. 132 F.3d at 365-66 (citing Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984); Cromwell v. Cnty. of Sac, 94 U.S. 351 (1877); Herrmann v. Cencom Cable Assocs., Inc., 999 F.2d 223 (7th Cir.1993); Supporters to Oppose Pollution, Inc. v. Heritage Group, 973 F.2d 1320 (7th Cir.1992)). Notwithstanding this doctrine, the Supreme Court stated that "[t]he fragmentation of these claims ... was compelled by federal law." 371 U.S. at 60, 83 S.Ct. 108.

Second, similar policy considerations militate against concluding that rule 13(a) bars BMT Co.'s action in this Court. While, unlike the defendants in Southern Const. Co. v. Pickard, BMT Co. did not join an existing action in this Court, BMT Co. successfully moved to transfer the Texas Action here. BMT Co., thus, does not seek to create duplicative actions, but moved the action from the Northern District of Texas to the District of New Mexico.6 The parties are in accord that this action and the Texas Action should be tried together. See Tr. at 12:14-20 (Gorman); Tr. at 6:9-22 (Gruenert). Their dispute centers on which forum should decide the matter.

In sum, because "[n]othing in Rule 13 prevents the filing of a duplicative action instead of a compulsory counterclaim," and "once a court becomes aware that an action on its docket involves a claim that should be a compulsory counterclaim in another pending federal suit, it will stay its own proceeding," Adam v. Jacobs, 950 F.2d at 93 (citations omitted), the Court does not believe that rule 13(a) is an appropriate vehicle for moving to dismiss or transfer venue, see Mammoth Res. Partners, Inc. v. Phoenix Drilling, Inc., 2010 WL 2651079, at *6. Moreover, because the parties agree that their claims should be tried together, and dispute only in which forum the claims should be heard, this dispute does not implicate rule 13(a)'s underlying policy of avoiding duplicative actions. The Court therefore will not grant the Defendants' Motion on these grounds.

IV. THE NORTHERN DISTRICT OF TEXAS FIRST DECIDED VENUE ISSUES.

The Tenth Circuit has held that the court that first has jurisdiction over an action should decide issues of venue. In Hospah Coal Co. v. Chaco Energy Chaco. the Tenth Circuit stated:

673 F.2d at 1163-64. The Defendants first filed the Texas Action before BMT Co. filed this action. The court which first obtains jurisdiction should be allowed to first decide issues of venue. Accordingly, Judge McBryde decided to transfer the Texas Action to the District of New Mexico. The Court therefore denies the Motion.

IT IS ORDERED that the Defendants' Motion to Dismiss or, in the Alternative, to Transfer Venue, filed May 18, 2011 (Doc. 16), is denied.