Rebuilding America’s aging infrastructure is one task that most economists and civil engineers, and most Americans, agree should be at or near the top of President Donald Trump’s agenda. President Trump touted his background as a real estate developer to convince voters that he was best positioned to identify priorities and bring various interest groups together to structure concrete solutions. If he can harness bipartisan support for fixing or upgrading roads, bridges, tunnels, railways, airports, dams and other critical infrastructure, while satisfying Congressional budget hawks, he will fulfill one of his most consequential campaign promises. However, the just announced Trump Tax-Cut Plan, while light on technical detail, would almost certainly enlarge the budget deficit and will complicate any legislative push for infrastructure funding.
The California Contractors State License Board (CSLB) recently announced that current Enforcement Chief David R. Fogt will serve as the CSLB’s new Registrar of Contractors starting May 2. This promotion makes David Fogt the first licensee to lead the CSLB’s operations in 20 years. Mr. Fogt obtained his California painting contractor’s license in 1986(now inactive). In February of 1990, he began his CSLB career as a Deputy Registrar Contractor and, over the next decade, he was promoted to other enforcement supervisory positions and eventually to Enforcement Chief in October 2001. Mr. Fogt will take over the day-to-day leadership of CSLB’s more than 400 employees and field offices around the State of California and have direct oversight of the CSLB’s $60 million budget, operating policies and procedures, and executive team.
On April 18, the U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s ruling in a Louisiana case that dismissed the plaintiff’s claims for property damage based on contamination caused to his property by long-term oil and gas operations conducted by the predecessors of Hess Corporation. The case is Guilbeau v. Hess Corporation.
On April 20, an intermediate Court of Appeals for the First Court of Appeals, sitting in Houston, reversed the trial court and directed that court to reinstate an environmental enforcement action that had purportedly been settled by agreement of the officials of Brazoria County, Texas and the defendants. Brazoria County had brought an environmental enforcement action against the defendants for violating state and county regulations regarding sewage disposal and the use of on-site sewage facilities. The State had objected to these settlement reached by Brazoria County and the defendants, but the trial court overruled the State’s objections and entered final judgment resolving the case and attaching the Agreed Judgments as exhibits to its judgment. The case is The State of Texas v. Brazoria County and Daniel Infante, Humberto Lumbrero, Isidro Dejesus Luna, and Ma Dejesus Luna.
On April 20, the U.S. District Court for the District of South Carolina, Anderson Division, dismissed the plaintiffs’ Clean Water Act (CWA) Citizen Suit which alleged that the defendant pipeline operators had violated the CWA by discharging pollutants into navigable waters without a permit. The District Court concluded that although plaintiffs “identified a discrete source for the pollution,” they “failed to allege a discrete conveyance of pollutants into navigable waters.” The District Court otherwise confirmed that “the CWA does not apply to claims involving discharge of pollution to groundwater that is hydrologically connected to surface waters.” The case is Upstate Forever and Savannah Riverkeeper v. Kinder Morgan Energy Partners, L.P. and Plantation Pipe Line Company, Inc.
Government enforcement actions, including the issuance of subpoenas and Civil Investigation Demands (CIDs), must be authorized by the laws that created the agency or invested it with such broad investigative powers. A relatively new agency like the Consumer Financial Protection Bureau (CFPB), which was established by the Dodd-Frank Act, will often see its enforcement powers challenged at the start, and the regulated community should be aware of these inherent limitations on the exercise of governmental authority.
On April 21, the U.S. Court of Appeals for the District of Columbia Circuit issued another ruling adverse to the CFPB. In CFPB v. the Accrediting Council for Independent Colleges and Schools, the Court of Appeals affirmed the District Court’s ruling that the CFPB has no authority to issue a CID to the Council seeking information held by the Council related to “unlawful acts and practices in connection with accrediting for-profit colleges.”
On April 14, a U.S. Magistrate serving with the U.S. District Court for the Northern District of Indiana issued a ruling in a matter involving the attorney-client and attorney work product privileges. The case is Valley Forge Insurance Company v. Hartford Iron & Metal, Inc. The District Court held that the attorney’s communications with environmental contractors Keramida, Inc. and CH2M Hill, Inc. were not entered into for the purpose of rendering legal advice and, therefore, the attorney-client privilege did not apply. However, the District Court did agree that some of the emails were protected by the attorney work product doctrine.
Stored materials present a potentially serious point of tension between lenders and borrowers in the negotiation of a construction loan agreement. In construction lending, the term “stored materials” refers to the materials and items that are purchased in advance of their use and incorporation into the project. Those materials will need to be stored either on the project site or in a warehouse or other location “off-site.” Many lenders are wary about allowing funds to be used for stored materials because of the risk of loss off-site and, accordingly, may place conditions on the use of such funds. However, the borrower, usually through its general contractor, needs to purchase materials “in advance” to keep construction moving smoothly. For example, it would be completely impractical to require the general contractor to purchase the windows of a high-rise on a daily, as-needed basis.
The new administration at the Environmental Protection Action has taken these actions:
- Reconsidering the New Methane Rules.
On June 3, 2016, pursuant to the Clean Air Act (CAA), EPA promulgated amendments to the existing oil and gas New Source Performance Standards, 40 C.F.R. Part 60, Subpart 0000, and established new methane emissions standards for the these sources, 40 C.F.R. Part 60, Subpart 0000a, with respect to volatile organic compounds (VOC) and greenhouse gas emissions. The new 0000a standards are designed to reduce pollutant greenhouse gases (GHG) emissions from oil and natural gas production, processing, transmission and storage activities and operations.
On April 18, responding to petitions for reconsideration filed by industry groups and trade associations, EPA determined that these petitions raised an important issue that had not been considered earlier regarding the monitoring of fugitive emissions. As a result, EPA will convene a new proceeding to reconsider these requirements, and stayed the compliance date for fugitive emissions monitoring for 90 days. EPA will also consider the impact of these rules on low–production wells.