"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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District Court Rejects Challenge to Decision of Fish and Wildlife Service to Withdraw Proposed ESA Listing of the Dunes Sagebrush Lizard

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On September 30, 2014, the U.S. District Court for the District of Columbia rejected a challenge to the decision of the U.S. Fish and Wildlife Service (FWS) to withdraw a proposed listing of the Dunes Sagebrush Lizard, a species found in many oil and gas producing areas, as an endangered species under the Endangered Species Act. The case is Defenders of Wildlife, et al. v. Jewell. The District Court held that the decision of the FWS was lawful, and comported with the requirements of the ESA and the FWS' and National Marine Fisheries Service's (NMFS) 2003 Policy for Evaluation of Conservation Efforts When Making Listing Decisions (PECE) for the Evaluation of Conservation Efforts When Making Listing Decisions. Of particular importance were three conservation mechanisms--the BLM's Resource Management Plan Amendment, the "New Mexico Agreement", and the "Texas Plan". The New Mexico and Texas plans are Candidate Conservation Agreements that the Service approved.

The Texas Comptroller and several oil and gas associations intervened as defendants to support the Service and their own conservation plans. This decision is likely to be appealed, but it certainly seems to strengthen the case for the measures that are being proposed (and challenged) to protect the Lesser Prairie Chicken, a species that was listed as threatened earlier this year.

3rd Cir.: Natural Gas Pipeline Company Can Immediately Exercise Its Powers of Eminent Domain to Replace Deteriorating Pipeline

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On September 26, 2014, a divided panel of the U.S. Court of Appeals for the Third Circuit reversed the U.S. District Court of the Middle District of Pennsylvania, holding that Columbia Gas Transmission Company, an interstate natural gas company regulated by FERC, has the right of eminent domain granted by 15 U.S.C. § 717f(h) to obtain easements over the land of objecting landowners, even when such new easements would be located outside of the existing right of way, in order to replace a deteriorating pipeline that is now located in a heavily populated area of Pennsylvania. The case is Columbia Gas Transmission, LLC v. 1.01 Acres, More or Less in Penn Township, York County, Pennsylvania, Located on Tax ID# 440002800150000000 Owned by Dwayne P. Brown and Ann M. Brown, et al.

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Intergovernmental Immunity Protects Both the Federal Government and Its Contractor

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On September 19, 2014, the U.S. Court of Appeals for the Ninth Circuit held that California Senate Bill 990 violates the Constitutional doctrine of "intergovernmental immunity" because it directly regulates the activities of the US Department of Energy in violation of the Supremacy Clause. S.B. 990 prescribes state radioactive cleanup standards at the Santa Susan Field Laboratory, a site which is undergoing extensive cleanup by the federal government. The case is The Boeing Company v. Movassaghi, Acting Director of the California Department of Toxic Substance Control, et al.

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$8 Billion Los Angeles Wind Power Project Would Be Engineering Marvel and Green Energy Landmark

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Four energy companies - Pathfinder Renewable Wind Energy, Duke-American Transmission, Dresser-Rand, and Magnum Energy - have jointly proposed an $8 billion plan to supply Los Angeles with more than twice the amount of electricity generated by the Hoover Dam. According to Duke Energy, the proposal would require construction of "one of America's largest wind farms in Wyoming, one of the world's biggest energy storage facilities in Utah, and a 525-mile electric transmission line connecting the two sites." The compressed air storage facility in Utah - consisting of four vertical chambers, each approaching the size of the Empire State Building, carved from an underground salt formation - would yield 1,200 megawatts of electricity, which is enough to serve 1.2 million homes in the Los Angeles area.

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California Looking For Next Registrar of Contractors

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UPDATE: Applications for the Position of the Registrar of Contractors must be received by 5:00 p.m. PST on November 17, 2014 and must include all required information.

The California Contractors State License Board invites applications for the position of Registrar of Contractors. The Registrar of Contractors is responsible for, among other things, carrying out the policies of the CSLB and for planning, organizing, and directing CSLB activities in the areas of administration, enforcement, information technology, and licensure. The position is located in Sacramento, California. All submissions must be received by 5:00p.m. on October 15, 2014, and must include both email and telephone contact information. For additional information review the invitation or contact Eileen Fuller at (916) 574-8385.

The current Registrar of Contractors, Steve Sands, announced on April 24, at the CSLB's quarterly board meeting, that he planned to retire at the end of the year, after being "at the helm" of the CSLB since January 1, 2001.

Additional Resources: California CSLB Registrar of Contractors Announces Departure

5th Circuit Considers Scope of CSB's Subpoena Power After Serious Incident

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On September 18, 2014, a divided panel of the U.S. Court of Appeals for the Fifth Circuit decided another Deepwater Horizon case. The case is United States v. Transocean Deepwater Drilling, Inc., and involves the statutory authority of the U.S. Chemical Safety and Hazard Investigation Board (CSB) to issue administrative subpoenas to Transocean, the operator of the Deepwater Horizon drilling unit, following the disaster on the Deepwater Horizon drilling unit in the Gulf of Mexico.

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