Off the Beaten Path: The Federal Circuit Departs From Precedent in Lumbermens

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On August 23, 2011, the Washington, D.C. metropolitan area was surprised and shocked by an earthquake with a magnitude of 5.8, leading to the evacuation and temporary closing of multiple public and private buildings, and leaving area residents feeling unsettled, at the least. Twenty days earlier, the U.S. Federal Circuit Court of Appeals’ opinion in Lumbermens Mutual Casualty Company v. United States left Miller Act sureties similarly unsettled and queasy with its “simple” holding that, “once a surety makes overpayments on its bond obligation, it has no right to affirmatively recover against the United States,” among other things.

This article will look at Lumbermens and its reasoning, including a review of the typical vehicles for surety claims against the federal government, the history of Supreme Court, Federal Circuit, and Claims Court cases that established the route from which Lumbermens diverted, and the impact of the opinion on Miller Act sureties.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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