Texas Supreme Court Will Decide Important CERCLA Insurance Matter

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The Texas Supreme Court confirmed that it will decide an issue of Texas law that was certified to the Court by the U.S. Court of Appeals for the Fifth Circuit. The case is McGinnes Industrial Maintenance Corporation v. The Phoenix Insurance Company; The Travelers Indemnity Company. The issue is whether the receipt of Potentially Responsible Party (PRP) letters and unilateral administrative order, issued pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), from EPA Region 6 is a "suit" that triggers a duty by the insurers to defend, investigate and settle.

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NH Electricians: 2014 NEC Continuing Education Deadline -- Jan. 1, 2015

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The New Hampshire Electrician's Board has confirmed that the 2014 National Electrical Code (NEC) will become effective January 1, 2015 and, moreover, that all exams will be on the 2014 NEC starting on October 1, 2014. All New Hampshire licensed master and journeyman electricians will also be required to complete an "approved" 15-hour course on the 2014 NEC between January 1, 2014 and December 31, 2014 regardless of the licensee's renewal date. See R.S.A. § 319-C:6-c. Each master and journeyman license without verification of the required 2014 NEC continuing education by January 1, 2015 will be invalid until proof of the course is received, and invalid licenses will be treated the same as a lapsed license and subject to the applicable laws for performing electrical installations without being licensed. See id.

Additional Source: State of New Hampshire Electricians' Board; ECC, Adoption of 2014 edition of National Electrical Code®

NV Licensing Board to Discuss Proposed Amendments to NAC 624.170 Concerning Remodel of High Rise Buildings

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The Nevada State Contractors Board, at its meeting scheduled for October 23, 2014, at 8:45 a.m. by video conference at two of the Board's offices, is expected to discuss, in its Executive Session, proposed amendments to Nevada Administrative Code § 624.170 concerning remodel of high rise buildings for possible action.

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11th Cir. Narrowly Interprets Revised NC Statute of Repose in Wake of CTS Corp. v. Waldburger

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A few months ago, the U.S. Supreme Court decided the case of CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014), and held that the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 94 Stat. 2767, as amended, 42 U.S.C. §§ 9601 et seq. (CERCLA), the federal Superfund statute, does not preempt state statutes of repose such as the North Carolina 10 year statute of repose. For example, North Carolina's "statute prevents subjecting a defendant to a tort suit brought more than 10 years after the last culpable act of the defendant. N.C. Gen. Stat. Ann. § 1-52(16) (Lexis 2013) ('[N]o cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action'); Robinson v. Wadford, ___ N.C.App. ___, ___, 731 S.E.2d 539, 541 (2012) (referring to the provision as a "statute of repose")." The Waldburger decision imperiled toxic tort lawsuits that were filed against the United States on behalf of many plaintiffs who alleged that the drinking water at Camp Lejeune, North Carolina was contaminated.

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Alaska: Construction Contractor Bonding Requirements Increase In 2015

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Effective January 1, 2015, Senate Bill 193, signed into law on July 11, 2014 by Alaska Governor Sean Parnell, increases the required construction contractor bonding amounts as follows:

"...(1) general contractor shall be $25,000;
(2) general contractor with a residential contractor endorsement under AS 08.18.025 who performs exclusively residential work shall be $20,000;
(3) mechanical or specialty contractor or home inspector shall be $10,000; or
(4) contractor whose work on one project with an aggregate contract price of $10,000 or less, including all labor, materials, and other items, when the work is not part of a larger or major operation or otherwise divided into contracts of less than $10,000 to evade a higher bonding requirement, shall be $5,000."
Under the amended law, in lieu of a surety bond, the license applicant may file with the Commissioner a cash deposit or other negotiable security acceptable to the Commissioner in the amount of the required bond.

Additional Source: Alaska Department of Commerce, Community, and Economic Development, New Legislation Affecting Licensure in Alaska

Tax Implications Of Legal Entity Ownership Changes

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By Pillsbury Winthrop Shaw Pittman

Today, Pillsbury attorneys Matthew Burke, Craig Becker and Kerne Matsubara published their client advisory titled Court of Appeal Holds Transfer Tax Applies to Legal Entity Changes in Ownership. The Advisory discusses the 2nd District Court of Appeal decision in 926 North Ardmore Avenue, LLC v. County of Los Angeles. The Court of Appeal held that Proposition 13 changes in ownership prompted by transfers of legal entity interests should also be characterized as "realty sold," resulting in the imposition of realty transfer taxes under the California Documentary Transfer Tax Act in cases even where no real property interests are transferred at all.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Matthew Burke, Craig Becker , or Kerne Matsubara, the authors of this blog.

"Price Gouging" Not Permitted

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Governor Edmund G. Brown Jr. declared the drought in California a state of emergency on January 1, 2014 and directed state officials to take all necessary actions to prepare for these drought conditions. In response, the California Contractors State License Board (CSLB), is doing its part, began expediting applications for C-57 Well Drilling Contractors and encouraging Class "A" General Engineering Contractors that are authorized to perform water supply projects (but not well drilling unless they possess a C-57 Well Drilling classification) to add the C-57 classification to their license. More recently, the CSLB voiced its concern that there may be "price gouging" "occurring in some California counties where the drought has taken a serious toll on individual residential water wells," identifying by name Tulare and Kern counties. It reminds all contractors and, in particular, C-57 Well Drilling and C-61/D-21 Machinery and Pumps contractors to make sure the prices they are charging are within legal guidelines following the declaration of a state of emergency.

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Indianapolis DCE Offers Electronic Submittal Option for Contractor License Renewals

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The Indianapolis Department of Code Enforcement (DCE), which is responsible for licensing persons and business organizations engaged in construction activity in the Consolidated City of Indianapolis, Marion County, is offering a new electronic submittal option for contractors' license renewal applications.

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Independent Contractor Versus Employee Debate Continues

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Recently, a California federal district court, in Taylor v. Shippers Transport Express, Inc., found that a class of current and former truck drivers had been misclassified as independent contractors and not employees by Shippers Transport Express, Inc. (STE). In granting the drivers' motion for partial summary judgment, the court found that, notwithstanding that the drivers and STE's agreement contemplated that the drivers were independent contractors, the drivers were STE employees premised, in part, on its findings that STE not only retained the right to exercise control over the manner and means of the truckers' accomplishing the desired results, but it also exercised this control. The order was issued in Taylor v. Shippers Transport Express, Inc., CV 13-02092 BRO (PLAx) (C.D. Cal. September 30, 2014).

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11th Cir. Discusses Pleading Standards for Toxic Tort Claims

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On October 6, 2014, the U.S. Court of Appeals for the Eleventh Circuit issued its ruling in the case of Adinolfe, et. at. v. United Technologies Corporation. The Court of Appeals reversed the decision of the lower court to dismiss, with prejudice, two toxic tort cases, involving hundreds of homeowners, at the pleading stage. United Technologies Corporation (UTC) is responsible for the operations of Pratt & Whitney, which operated an aircraft and rocket engine manufacturing plant that the plaintiffs allege released large quantities of toxic materials that migrated through groundwater to the properties of the plaintiffs, damaging their properties and even causing personal injuries.

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Illinois Prohibits Subordination of Mechanic's Liens on Construction Projects

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Illinois Governor Pat Quinn recently signed into law Senate Bill 3023 (Public Act 98-764, amending the Illinois Mechanics Lien Act, 770 ILCS 60/ et seq., to provide protection against subordination of mechanics liens on Illinois construction projects. S.B. 3023 makes an express or implied agreement to subordinate a mechanic's lien, where the agreement is in anticipation of and in consideration for the awarding of a contract or subcontract to perform work or supply materials for an improvement upon real property against public policy and unenforceable, except where the agreement to subordinate a mechanic's lien to a mortgage lien that secures a construction loan if that agreement is made after more than 50% of the loan has been disbursed to fund improvements to the property. The new law was effective July 16, 2014. This new law represents the culmination of the Illinois legislative efforts over the past few legislative sessions to provide further protection to mechanics lien claimants.

Quick Reference Lien Charts

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Clients call from time to time with questions about liens that have been filed on their property, or about liens that they want to file. The questions follow a pattern. What is the deadline to file a lien? What about foreclosing? Can a lower tier subcontractor file a lien? Does the lien claimant have to file a preclaim notice? I got one of these questions recently and sent the in house attorney a card stock printout of our quick lien reference chart for the three jurisdictions closest to my office: Virginia, DC, and Maryland. She found it so useful that she put it on her bulletin board in her office.

Given how useful most clients find this information, we decided to post it. You can see it to the right under the "Resources/Links" tab. Our California construction lawyers prepared a similar chart a couple of years ago when California revamped its lien laws. They are going to convert that into a format that looks like the VA/DC/MD one. And then we'll also prepare one for the northeast, where our New York area construction lawyers frequently answer similar questions.

So, check back for these quick reference charts. We think you'll find them useful.

Badge of Honor ~ NJ Requires Contractors' Employees to Wear Photo ID Badge

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Effective August 19, 2014, New Jersey Senate Bill 2363 went into effect, requiring contractors required to register under the Contractors' Registration Act, N.J.S.A. §§ 56:8-136, et seq. -- home improvement contractors -- to wear a state-issued identification badge "on the upper left corner of his torso when the contractor is performing, or engaging, or attempting to engage in the business of selling home improvements" at all times on the job. The badge includes a color photograph of the employee's face along with his/her name, and the contractor's registration number and business name. A new badge is required every six years. Governor Chris Christie signed into law S.B. 2363 on August 19, 2013. The bill was reportedly prompted by fears of potential scams on Superstorm Sandy victims. It is believed that requiring contractors' employees to wear these badges will add another layer of protection against fraud.

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City of Shasta Lake (CA) Issues Notice re Contractor Qualifications for Potable Water Projects

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Effective January 1, 2015, all contractors bidding on or performing work within the City of Shasta Lake, California involving connects to or modifications of the City of Shasta Lake's potable (fit or suitable for drinking) water distribution system will be required to have and to maintain a Water Distribution Operator, Grade 2 certification. This requirement applies to both work performed on the City of Shasta's system under contract with the City of Shasta and to work for a private developer or property owner. If you have questions, contact Jeff Tedder, City Engineer, 530-275-7423.

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Ruling Reinforces EPA's Broad Discretionary Powers in Reviewing Corps of Engineers 404 Permitting Decisions

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The celebrated case of Mingo Logan Coal Co. v. EPA was returned to the U.S. District Court of the District of Columbia after the Court of Appeals reversed the District Court's ruling that EPA had illegally invalidated a Army Corps of Engineers ("Corps") 404 permit issued to Mingo Logan's proposed coal mining operations in West Virginia. On March 14, 2014, the Supreme Court rejected any appeal of the DC Circuit's opinion, which is reported at 714 F. 3d 608. The District Court completed its review of the remaining APA issues and on September 30, 2014, ruled that EPA had broad authority under the law to veto a Corps permitting decision.

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