Buchanan v. Alexander,
Darla Environmental Specialists performed construction work for the United States, which owes Darla about $450,000, the retainage on the contract. Darla dissolved without claiming the money; it has no incentive to do so, because its debts exceed $450,-000. Automatic Sprinkler Corporation worked as a subcontractor on the job. Darla owes it some $490,000. Automatic Sprinkler reduced the debt to judgment in this diversity action and sought to collect from the United States under Fed.R.Civ.P. 69. The United States invoked sovereign immunity and added that Darla owes taxes that must be subtracted from the $450,000. It fears that Darla may have other creditors, each of whom may demand payment; Darla’s successors or distributees also may lay claim to the $450,000. The district judge ordered the United States to pay Automatic Sprinkler notwithstanding the doctrine of sovereign immunity and the possibility of additional or inconsistent claims to the fund.
Automatic Sprinkler believes that sovereign immunity is inapplicable because it is trying to collect money that the United States concededly owes to Darla. This does not cut much ice. Buchanan did not turn on the procedure by which the creditor asserted its claim. The principle of governmental immunity is simple: anyone who seeks money from the Treasury needs a statute authorizing that relief. United States v. Sherwood,
Recognizing that sovereign immunity might put subcontractors in a bind — but unwilling to surrender its benefits — Congress enacted the Miller Act, 40 U.S.C. § 270a-270d. General contractors on projects funded by the United States must post bonds to ensure full payment of subcontractors. Subcontractors must look exclusively to the general contractors (and the bonds) for payment. They cannot obtain liens on the federal projects and buildings, and they cannot collect directly from the Treasury. Arvanis v. Noslo Engineering Consultants, Inc.,
Automatic Sprinkler had, and still may have, an alternative means to obtain partial payment. It can propel Darla into an involuntary liquidation. 11 U.S.C. § 303(b)(2). A dissolved corporation is a “person” under the Bankruptcy Code of 1978. See 11 U.S.C. § 101(33); In re Cedar Tide Corp.,
REVERSED.
