Articles Posted in Construction Generally

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On July 10, the U.S. Court of Appeals for the Ninth Circuit issued its much anticipated and a pro-contractor ruling in MP Nexlevel of California, Inc. v. CVIN LLC. The appeal arose from a dispute over the scope of a California specialty contractor’s license and, more particular, involved whether the subcontractor’s performance of certain work was outside the scope of its license constituting a breach of contract and resulting in the contractor not being entitled to payment for its work (Cal. Bus. & Prof. Code § 7031(a)). In an unpublished opinion, the Ninth Circuit reversed and remanded the matter, finding that “Nexlevel’s work here was ‘incidental and supplemental’ to the installation of these fiberoptic systems,” as contemplated by Cal. Code Regs. Tit. 16, § 831.

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On July 6, the U.S. Court of Appeals for the D.C. Circuit decided the case of Sierra Club and Natural Resources Defense Council v. EPA. Senior Judge Sentelle, writing for a unanimous panel, mostly granted the environmental petitioners petition for review of an Environmental Protection Agency (EPA) Clean Air Act (CAA) rule, establishing National Emissions Standards for Hazardous Air Pollutants (NESHAP) hazardous air pollutant emissions limits for Brick and Structural Clay Products Manufacturing and Clay Ceramics Manufacturing. These rules were initially promulgated in 2003, only to be vacated later by the D.C. Circuit.

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Today, our colleagues Cathie Meyer and Amy Pierce published their Client Alert titled California Enacts Mini-GDPR Effective January 1, 2020. Under the new law, covered businesses will need to update policies and procedures for responding to customer inquiries about collection, use, sale and disclosure of customers’ personal information or face stiff enforcement actions. Takeaways from the Client Alert include:

  • The California Consumer Privacy Act of 2018 provides consumers with broad rights to control use of their personal information by covered businesses.
  • Covered businesses will need to review and revise their existing privacy policies to make the required disclosures and to provide two methods for customers to inquire about use of their personal information.

The new law is effective January 1, 2020.

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On June 27, the U.S. Court of Appeals for the Seventh Circuit decided the case of Orchard Hill Building Co. v. U.S. Army Corps of Engineers. The Court of Appeals vacated the decision of the District Court granting the U.S. Army Corps of Engineers’ (Corps) motion for summary judgment dismissing the Orchard Hill Building Company’s (Orchard) complaint that the Corps’ jurisdictional determination erroneously found that the waters at issue were “jurisdictional waters” under the Clean Water Act (CWA) subject to the Corps’ jurisdiction. Acknowledging that the Corps and EPA had promulgated a new rule re-defining “waters of the United States” in 2015—which is now being challenged in the courts—the Court of Appeals noted that this case is controlled by the pre-2015 definition of “waters of the United States.” The Court of Appeals remanded the case to the Corps, directing it to determine if there was a significant nexus, as required.

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Today, our colleague Tom Shoesmith published his Client Alert titled China: Are Joint Ventures the Answer to Trump’s Trade Wars?  In the Alert, Tom discusses how U.S. companies may respond to the Trump Administration’s tariff wars. This could including entering into a joint venture (JV) with a Chinese partner, enable the U.S. company to respond nimbly to changes in the global trade environment. However, Tom notes that JVs in China are subject to structural requirements and a regulatory regime unlike those found in Western countries and encourages U.S. companies to consider whether the JV should be organized in a non-People’s Republic of China (PRC) jurisdiction.

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Recently, our colleague Trevor Wood published a Client Alert titled LIBOR and the Transition to Risk-Free Rates, discussing the Chief Executive of the UK Financial Conduct Authority’s (FCA) recent announcement that, because of insufficient trading in the underlying markets, the London Interbank Offered Rate (LIBOR) will no longer be supported by the FCA after 2021. Take always from the Client Alert include:

  • Work continues on the transition to risk-free rates, but progress is slow—FCA has published timetable and milestones.
  • The London Loan Market Association (LMA) issued guidelines, but changes may not be readily accepted by market participants.
  • A “synthetic” or “zombie” LIBOR will likely continue to be published in order to deal with legacy transactions.

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This morning, our colleagues on the State & Local Tax team published their Client Alert titled The U.S. Supreme Court Changes Sales and Use Tax Collection Nexus. In South Dakota v. Wayfair, Inc., the Court overrules the “physical presence” requirement as “unsound and incorrect.” Takeaways from the Court’s decision include:

  • South Dakota law satisfies the Commerce Clause “substantial nexus” requirement based on the “economic and virtual contacts” with the State.
  • The Wayfair decision does not prohibit the retroactive application of this new standard for Commerce Clause “substantial nexus.”
  • The decision strikes a blow to the Court’s stare decisis jurisprudence.

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Today, our colleagues Ryan Vanderford and Mark Litvack published their Client Alert titled The Supreme Court Narrows Its Holding in American Pipe & Construction Co. v. Utah. Takeaways include:

  • The Court bars previously absent class members from bringing subsequent class actions outside the applicable statute of limitations period.
  • The Court’s decision in China Agritech, Inc. v. Resh cements a new limit on the filing of successive class actions.

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Today, the U.S. Supreme Court issued its decision in China Agritech v. Resh et al., a decision concerning the U.S. Court of Appeals’ application of the tolling rule first stated in American Pipe & Constr. Co. v. Utah and later clarified in Crown, Cork & Seal Co. v. Parker.  The Court was called on to answer the question

“Upon denial of class certification, may a putative class member, in lieu of promptly joining an existing suit or promptly filing an individual action, commence a class action anew beyond the time allowed by the applicable statute of limitations?”

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Today, our colleagues Paula Weber and Erica Turcios Yader published their client Upending the Gig Economy? California Supreme Court’s new Dynamex test may throw a wrench into business models that rely on independent contractors. Takeaways include

  • The California Supreme Court has imposed a new test for determining who is an independent contractor or employee subject to protection under the California Wage Orders;
  • The new 3-part test, which requires employers to satisfy each element of the test, will make it harder for companies to classify workers as independent contractors; and
  • Workers who do not engage in an independent business and who do not provide services outside the usual course of the hiring entity’s business will be deemed employees, even if they are free from the direction and control of the hiring entity.

Additional Source: Dynamex Operations West Inc. v. Superior Court of Los Angeles