Moseley v. Electronic & Missile Facilities, Inc., 374 U.S. 167 (1963)

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

A plumbing and heating subcontractor brought suit under the Miller Act in a Federal District Court in Georgia against a prime contractor under contracts with the United States for construction work at two Air Force bases in Georgia seeking (1) recovery of amounts alleged to be due under the subcontracts, or (2) rescission of the subcontracts on grounds of fraud and recovery on a quantum meruit basis, or (3) recovery of the reasonable value of the labor and materials furnished, and (4) to enjoin the prime contractor from pursuing litigation which it had instituted in a New York State Court seeking arbitration proceedings in New York under provisions of the subcontracts, which the subcontractor claimed to be fraudulent. The District Court held that (1) the Miller Act gave the subcontractor the right to sue in the District where the subcontracts were performed and (2) the arbitration clause, if induced by fraud, would be vitiated; and it enjoined the arbitration proceedings in New York. The Court of Appeals reversed, holding that the subcontractor must arbitrate in New York under New York law.

Held: The issue of fraud must first be determined by the District Court, since a determination that the subcontracts or their arbitration provisions were fraudulent would eliminate any conflict between them, the United States Arbitration Act and the Miller Act. Pp. 168-172.

306 F.2d 554 reversed.