For contractors, keeping track of the various provisions and requirements of federal statutes such as the federal Clean Air Act (CAA) while also jumping through the many hoops of local permitting can be quite an achievement in and of itself. But as a recent case shows us, the “litigative shield” of full CAA compliance can mean little in the face of state common law. In a noteworthy decision issued on November 2, 2015, the U.S. Court of Appeals for the Sixth Circuit ruled, in a federal class action complaint seeking compensatory and punitive damages from a local distillery for negligence, nuisance and trespass, that the “Federally Enforceable District Origin Operating Permit issued and overseen by the Louisville Metro Air Pollution Control District” under which the defendant is operating was not preempted by the CAA. Let Merrick, et al., v. Diageo Americas Supply, Inc. serves as a cautionary note to contractors, even full compliance with the federal CAA may not eliminate their exposure to claims under the states’ common laws.
Recently, the California Court of Appeal for the Fourth Appellate District, in Womack v. Lovell, et al., Case No. G409587 (June 5, 2015), reversed a judgment in favor of the homeowner, noting that “[t]he devil isn’t the only resident in the details; sometimes truth and fairness lodge there as well.” The Court of Appeal, holding the homeowner to his judicial admission that the general contractor was licensed, concluded that the homeowner’s judicial admission coupled with his failure to comply with the local rule requiring identification of all controverted issues warranted a ruling in the contractor’s favor. This ruling serves as a reminder to contractors to diligently seek a verified certificate of licensure from the California Contractors State License Board (CSLB) if their licensure may be a controverted issue in a dispute because it may take the CSLB several months to issue the certificate.
The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers’ (Corps) have finalized their much-discussed joint “waters of the United States” definition and rule. This regulatory definition controls the scope and scale of these agencies’ regulatory authority under the federal Clean Water Act (CWA). It was slated to go into effect August 28, 2015. However, on August 27, 2015, the U.S. District Court for the District of North Dakota, in State of Ohio, et al., v. U.S. Army Corps of Engineers, issued a preliminary injunction staying implementation of the new rule in the States of North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, Wyoming, and New Mexico pending further proceedings. The Court also decided that the stay is limited to these states. Then, on October 9, 2015 the U.S. Court of Appeal for the Sixth Circuit, in a separate proceeding, entered a nationwide stay of the rule to give the court additional time to determine if it, rather than the district courts, has jurisdiction to hear these appeals. Challenges to the rule are pending in other district courts as well. The litigation already engendered by this new rule indicates that the rule will be before the federal courts and there will be significant uncertainty for some time to come.
UPDATE: We invite in-house counsel to join Amy and Robert at the upcoming conference. In-house counsel that are new registrants may use the code PILLSBURYVIP, subject to approval by the ALM Events Team.
Please join Amy Pierce and Robert Wallan at the West Coast General Counsel Conference on November 17 at Hotel Nikko in San Francisco for the panel discussion Social Consciousness – Not Just for the Millennials.
Under the California Transparency in Supply Chains Act of 2010, since January 1, 2012, every retailer, seller and manufacturer doing business in California and having annual worldwide gross receipts that exceed $100 million has been required to disclose on its website its efforts to eradicate slavery and human trafficking from its direct supply chain.
Even if you have disclosed your efforts and self-certified your compliance with the Act, you may still be required to defend your efforts and, for that matter, your supply chain in 2015 and beyond.
We will be discussing the Act and litigation exposure created by this “shaming” statute.
Photo: Debs (ò‿ó)♪, Shiny! (Creative Commons)
Acquiring adequate insurance coverage against environmental risks, in particular the spill or release of pollutants or contaminants in day-to-day operations, is important to many construction businesses confronting the requirements of environmental regulation. For example, EPA’s hazardous waste rules require permittees (at both the state and federal level) to demonstrate financial responsibility for the operations of these facilities, including site closure and post-closure care, and coverage for sudden and accidental discharges. This requirement can be satisfied by proof of acceptable insurance coverage. In addition, having such insurance often assists companies facing the challenge of an extensive and prolonged Superfund cleanup. Many courts have ruled that the receipt of a Superfund Notice Letter from EPA triggers the responsibility of the insurer to provide the coverage in the policy.
In Lacey Act Lessons from the Lumber Liquidators $13 Million Settlement, Pillsbury attorneys William Sullivan, Tom Allen, and Benjamin Cote explore the ramification of Lumber Liquidators’ agreement to plead guilty to five criminal charges, including one felony, stemming from its purchase and import of certain wood products through three separate Chinese suppliers. Among other things, the plea agreement marks the first criminal conviction of a major U.S. company under 2008 Lacey Act amendments that expanded the reach of the wildlife protection statute to wood products sourced from foreign countries.
Wondering if your company qualifies for a partial sales and use tax exemption on equipment purchases and leases? The California Contractors State License Board is inviting manufacturers, research & development companies, construction contractors, retailers of construction materials and everyone else to join it for a FREE webinar: Manufacturing and Research & Development Sales Tax Exemption Webinar on Wednesday, October 21, 2015, from 11: a.m. to 12:00 p.m. PST. It tempts everyone to consider that they may qualify for a partial sales and use tax exemption on equipment purchases and leases. To register for the webinar, go to www.boe.ca.gov/webinars or call (844) 829-8353. The CSLB is asking everyone to register by October 20, 2015.
Some of the current Justices sitting on the U.S. Supreme Court have written that they are dissatisfied with the state of the law regarding the deference the courts must accord to a federal agency’s interpretation of its own regulations. A workplace safety case decided on October 13, 2015, by an en banc panel of the U.S. Court of Appeals for the Eighth Circuit may provide a vehicle for the U.S. Supreme Court to review these issues. The issue of what deference to apply in these situation arises from the U.S. Supreme Court’s decisions in Bowles, et al., v. Seminole Rock & Sand Co., 325 U.S. 410 (1945) and Auer, et al., v. Robbins, et al., 519 U.S. 452 (1997); these cases have been interpreted as granting federal agencies “substantial deference” when the courts are asked to review an agency’s interpretation of its own rules. However, the growth and reach of the federal government plainly concern some of the Justices, and if there is to be a case at hand to sort through these issues, then Perez, Secretary, U.S. Department of Labor, v. Loren Cook Company may be the case to do this if the government chooses to appeal. There appears to be a trend that courts are paying very close attention to the text of the law, and less to what the agency says the law actually means in the eyes of the agency, especially when the agency is arguing that the Congress provided the agency with boundless power and discretion.
The California Labor Commissioner now has more power to enforce minimum wage requirements and to collect payment for wage-related claims. California Governor Brown’s website confirmed Saturday that he has signed into law special provisions permitting the Labor Commissioner to, among other things, file a lien or levy on an employer’s property in order to assist an employee in collecting unpaid wages-related judgment. The Labor Commissioner has this power regardless of whether the judgment is entered in its favor or in favor of the employee. In addition, if a final judgment against an employer is unsatisfied, as required by the new law, the employer will not be permitted to continue to conduct business in California unless the employer has obtained a bond from a surety company and has filed a copy of that bond with the Labor Commissioner. Contractors beware, the bottom line is that you will not be able to ignore wage-related judgments without potentially significant consequences.
Additional Sources: Senate Bill 588 (De León)
On October 9, 2015, the U.S. Court of Appeals for the Sixth Circuit, in a split decision, stayed the implementation of the new rule redefining the regulatory definition of “waters of the United States” (the Rule), which is the linchpin of much of the federal government’s jurisdiction under the Clean Water Act (CWA). The case is State of Ohio, et al., v. U.S. Army Corps of Engineers.
The Rule, promulgated by the Environmental Protection Agency (EPA) and Corps of Engineers, was published in the Federal Register on June 29, 2015, and was to be effective on August 28, 2015. The Rule has been challenged and defended in many federal district and appellate courts, and the four actions that were considered by the Sixth Circuit followed the decision of the Judicial Panel on Multi-District Litigation to consolidate these appeals in the Sixth Circuit. The petitioners in these four actions also requested that the Sixth Circuit stay the Rule while it determines whether it even has jurisdiction over this case, given the complexity of the CWA’s provisions regarding judicial review.
The Sixth Circuit agreed that it made sense to do so, to allow the parties to submit briefs on the Sixth Circuit’s jurisdiction, which the court will review carefully, and the Sixth Circuit also indicated that its decision should be made “in a matter of weeks.”
In issuing the stay, the Sixth Circuit noted that it had some misgivings about the Rule and the EPA’s and Corps of Engineers’ processes by which the Rule was promulgated. In any case, a stay will “temporarily silence the whirlwind of confusion that springs from uncertainly about the requirements of the new Rule,” honors the “policy of cooperative federalism,” and will restore “uniformity of regulation under the familiar, if imperfect, pre-Rule regime, pending judicial review.” As a result of this action, the status quo will be maintained pending further review.
Additional Source: 80 F.R. 37054 (Jun. 29, 2015)