Articles Posted in Construction Generally

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Federal government records, including business records submitted to the government, are subject to disclosure under the federal Freedom of Information Act (FOIA). However, FOIA exempts nine categories of government records from this disclosure obligation. A May 9 ruling by the U.S. Court of Appeals for the District of Columbia in AquAlliance v. U.S. Bureau of Reclamation discusses the scope of Exemption 9. Exemption 9 provides that there is no duty to disclose “geological and geophysical information, data, including maps, concerning wells.”

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Company records and communications are typically subject to disclosure in government investigations. They may be protected from disclosure if they are protected by the attorney client privilege or attorney-work product doctrine. However, invocation of these privileges is not automatic, as confirmed in a May 4 ruling by the U.S. States Court of Appeals for the Fifth Circuit. In EEOC v. BDO USA, LLP, the Court of Appeals issued a ruling clarifying the use of a privilege log to invoke the protections of the attorney-client privilege when responding to an agency’s request for documents as part of an investigation of employment discrimination claims.

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The California Contractors State License Board (CSLB) recently announced that current Enforcement Chief David R. Fogt will serve as the CSLB’s new Registrar of Contractors starting May 2. This promotion makes David Fogt the first licensee to lead the CSLB’s operations in 20 years. Mr. Fogt obtained his California painting contractor’s license in 1986(now inactive). In February of 1990, he began his CSLB career as a Deputy Registrar Contractor and, over the next decade, he was promoted to other enforcement supervisory positions and eventually to Enforcement Chief in October 2001. Mr. Fogt will take over the day-to-day leadership of CSLB’s more than 400 employees and field offices around the State of California and have direct oversight of the CSLB’s $60 million budget, operating policies and procedures, and executive team.

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As any builder will tell you, it is impossible to know with certainty the exact amount a project is going to cost. Variables affecting the cost run the gamut from labor and material costs to delays for unforeseen conditions, weather or other causes. The longer a project is expected to take, the more uncertain the project’s costs become. For this reason, contingencies are included in budgets by all parties involved: owners, contractors, subcontractors and, occasionally, lenders. Ideally, these contingencies will allow the project to absorb delays and other unexpected events without the owner being forced to contribute additional equity (and “balance the loan”) at the time. The owner will desire maximum flexibility over the re-allocation of the contingency(ies) to line items that will then be funded by the lender—while the lender will want to “control” the use of contingency line items to the extent possible.

With this in mind, let’s look at some of the competing motivations at play and “typical” loan agreement provisions regarding the use (or re-allocation) of contingency(ies) to other line items in the Project Budget.

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On April 4, the U.S. Court of Appeals for the Third Circuit decided the case of Mirabella v. Villard, et al., a civil rights case brought under 42 U.S.C. § 1983, alleging, inter alia, violations of their First Amendment rights by local officials. Although the Court of Appeals concluded that the Mirabellas adequately alleged both a retaliation claim and a violation of their right to petition, it concluded that the rights allegedly violated “were not clearly established for the purpose of qualified immunity.” The Court of Appeal reversed the District Court’s ruling on the local officials motion to dismiss with instruction to enter judgment in their favor.

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In Brexit: The UK’s Great Reform Bill, Pillsbury attorney Tim Wright discusses Prime Minister May’s “notice to quit” under Article 50 and start  of what he aptly describes as the equivalent of a “difficult and protracted divorce proceedings.” The White Paper published sets out Prime Minister May’s plans for a great repeal bill, which at one strike will remove the United Kingdom from the purview of the European Court of Justice and restore the supremacy of domestic law. Currently, the European Communities Act 1972 enshrines the supremacy of European Union law in national law. That will come to an end on Brexit day, which will be 29 March 2019 unless an extension is agreed to by the EU27 and the European Parliament.

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On March 23, the Colorado Court of Appeals issued a ruling reversing the trial court and the Colorado Oil and Gas Conservation Commission which had denied the petitioners’ request that the Commission, when promulgating rules affecting oil and gas production operations and activities in Colorado, be required to consider public health and environmental conditions to be determinative. The case is Martinez, et al., v. Colorado Oil and Gas Conservation Commission. The American Petroleum Institute and the Colorado Petroleum Association were intervenors, and a large number of environmental groups supported the petitioners. Continue reading

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On March 24, the Texas Third District Court of Appeals (sitting in Austin) issued an important decision regarding the application of the state’s statute of limitations in a class action lawsuit. The case is Asplundh Tree Expert Co. v. Abshire, at al. The Court of Appeals affirmed the District Court’s order denying Asplundh Tree Expert Co.’s (Asplundh) motion for summary judgment, confirming that the Texas two-year statute of limitations set forth in Tex. Civ. Prac. & Rem. Code § 16.003 was tolled by the filing of a class action, as contemplated in the 1974 U.S. Supreme Court’s decision in American Pipe and Construction Co. v. State of Utah.

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This is the first post in an ongoing series of posts on real estate and construction lending. Check back soon for more posts in our series.

In New York, contractors must be careful to file the correct type of lien to ensure they will be paid for their labor and/or materials. State law provides for two distinct liens: (1) a mechanic’s lien for labor or materials provided for private real property, and (2) a public improvement lien for labor or materials provided for public improvements. Knowing which lien applies is important at the beginning of the filing process, as there are significant differences in the coverage and requirements for each.

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In Payment Practices and Performance Reporting, New UK rules aimed at tackling late payment of suppliers and vendors will require large businesses to report on their payment practices and performance, Pillsbury partner Tim Wright discusses draft regulations published by the Department for Business, Energy and Industrial Strategy (BEIS) on February 2 requiring certain companies to publish information about their payment practices and policies, and their performance by reference to those practices and policies, and BEIS’ guidance on the regulations. The new regulations are expected to become effective on April 6, 2017.

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