Recently in Construction Generally Category

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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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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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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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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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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California Looking For Next Registrar of Contractors

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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

Contractors Beware: Recent Supreme Court Rulings Will Impose More Environmental Restrictions

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United States Supreme Court decisions provide guideposts for the exercise of environmental permitting and enforcement power by state and federal authorities. Whether a particular facility can be permitted often determines whether it can be built or modified after it has been constructed. In addition, a decision such as the Court's ruling in the case of Marvin Brandt Revocable Trust v. US has a bearing on land use considerations. Even a decision by the Court not to take up a case will have these same consequences. For instance, the Court's refusal to review the Mingo Logan Coal Company v. EPA leaves undisturbed the EPA's asserted power to overturn a Corps of Engineers' permitting decision, which may create disincentives to begin a project in the first place if it looks controversial.

Recently, we published our advisory Supreme Court Roundup: Recent Environmental Law Rulings and Pending Cases. Our Advisory discusses the United States Supreme Court's rulings affecting environmental law during the October 2013 Term. With significant pronouncements regarding EPA's Clean Air Act regulatory authority among them, however, the October 2013 Term was far from uneventful. Several more cases slated for the October 2014 Term presage rulings across a broad spectrum of environmental and administrative law issues.

Exemptions Available to Some Contractors For New Mandated Paid Sick Leave In California

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By Pillsbury Winthrop Shaw Pittman

A new California law effective July 1, 2015 requires employers to provide at least 3 paid sick days per year. Workers covered by valid collective bargaining agreements meeting certain requirements are exempt, but contractors should review their sick leave policies for all employees to ensure they are in compliance. Please click here for a helpful guide to the new law prepared by Pillsbury's employment law group.