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A Case of First Impression

In a case of first impression, P&A represented a general contractor, whose home office is in Maryland, with respect to a project in New Jersey. A subcontractor brought a lawsuit against the general contractor in state court in New Jersey. The subcontract between P&A’s client and the subcontractor identified Maryland as the choice of venue. P&A first removed the case from state court to federal court. Then, P&A moved to transfer the case from New Jersey federal court to Maryland federal court. The subcontractor objected, and argued that the New Jersey Prompt Payment Act overrode the parties’ venue selection clause in the subcontract. No court had previously addressed this issue since the Prompt Payment Act was enacted in 2006. On April 24, 2018, the New Jersey federal district court (Judge Hillman) issued an opinion ruling that the Act did not override the parties’ subcontract, and transferred the case to the Maryland federal court.

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