Articles Posted in Construction Generally

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On July 16, 2014, the U.S. District Court of the District of Maryland issued an important Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq. (RCRA), ruling in the case of Sherrill, et al. v. The Mayor and the City Council of Baltimore, 2014 WL 3555956. The City of Baltimore has taken steps to revive and remediate a waterfront property that was the site of a former chemical manufacturing plant. It is conceded that spills and releases of hazardous substances and hazardous wastes have contaminated the site, but the City has entered into an agreement with a casino operator to construct a casino on the property. The matter has been very controversial, causing the plaintiffs in this lawsuit to file a citizen suit under Section 6972 of the RCRA alleging that contaminants are migrating off the property and polluting adjacent properties.

The site was placed by the city into Maryland’s Voluntary Cleanup Program, which required that the City develop adequate cleanup plans. The owner and operator of the proposed casino agreed to take over some of the cleanup operations, and has in fact undertaken waste extraction and removal actions. In connection with the cleanup, the casino operator also ensured that any storm water wastewater discharges were covered by the Maryland General Construction Storm Water Permit, which incorporated the cleanup plans.

The District Court held that this Clean Water Act (CWA) storm water discharge permit triggered the “anti-duplication” provisions of the RCRA and therefore shielded the casino operator from any RCRA liability, and these claims were dismissed. In addition, the claims against the City of Baltimore and the owner of the former chemical plant were also dismissed because the court held that those allegations were insufficiently pled. In effect, this decision expands the CWA permit shield to allegations of RCRA violations.

An appeal has been filed with the 4th Circuit.

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The Texas Commission of Licensing and Regulation’s (Commission) recently amended the existing rules governing air conditioning and refrigeration contractor applicable codes, 16 Tex. Admin. Code, Chapter 75, § 75.110. Revised Section 75.110 states:

“(a) The commission adopts the following as the applicable codes as referenced in the Act and this chapter: (1) 2009 edition of the Uniform Mechanical Code; and (2) 2009 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.
(b) The 2009 codes will be in effect through December 31, 2014. All air conditioning and refrigeration work permitted or started prior to January 1, 2015, may be completed in accordance with the 2009 code editions.
(c) The commission adopts the following as the applicable codes as referenced in the Act and this chapter: (1) 2012 edition of the Uniform Mechanical Code; and (2) 2012 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.
(d) The 2012 codes will be effective January 1, 2015.” (Emphases added).

The Texas Department of Licensing and Regulation (Department) drafted and distributed the proposed rules to persons internal and external to the agency and published them in the April 11, 2014, issue of the Texas Register (39 Tex. Reg. 2735). Prior to the deadline for public comments (May 12, 2014), the Department received four public comments regarding the proposed rules. The public comments and the Department’s response to the public comments are available in its Justification for Administrative Rule Adoption.

The Department also recently lowered the number of hours of instruction on state laws and rules required annually from 2 hours to 1 hour, effective for licenses that expire on or after June 1, 2014. The total number of continuing education hours required annually, however, will remain at 8 hours. The other 7 hours of instruction must be courses taken in one or more of the following subjects: (1) Texas Occupations Code, Chapter 1302, Air Conditioning and Refrigeration Contractors; (2) Title 16, Texas Administrative Code, Chapter 75, Air Conditioning and Refrigeration Administrative Rules; (3) The International Mechanical Code, the Uniform Mechanical Code, or other applicable codes; (4) Ethics; (5) Business practices; or (6) Technical requirements. Continuing education courses must be completed within the term of the license being renewed. The continuing education courses must have been taken within the term of the license to be renewed, e.g., if the license expires on December 15, 2013, the continuing education courses must have been taken between December 15, 2012 and December 15, 2013.

Additional Source: Texas Department of Licensing and Regulation, Justification for Administrative Rule Adoption, Air Condition and Refrigeration Contractors; Texas Department of Licensing and Regulation, Air Conditioning and Refrigeration Contractors Continuing Education

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The practice of including an arbitration provision in all types of contracts has become quite common. Including such a provision in a contract should, however, always be a considered choice, based on sound advice, to avoid any misunderstandings about the breadth, scope and consequences of including such a provision. Yesterday, Pillsbury attorney Ray Sweigart published his client advisory titled About that English Law and Arbitration Clause: Consider enforcement implications before signing. In the Advisory, he discusses the practice, in international commercial contracts, parties with no operations or other relationship to England or the United Kingdom specifying English law as controlling, with a clause providing for arbitration of disputes in London. In Cruz City v Unitech & Ors, [2014] EWHC 3131 (Comm), the English High Court was faced with a dispute over enforcement of an arbitral award between a Mauritian claimant and an Indian defendant. Noting the English law policy that judgments of the English court and English arbitration awards should be complied with, and under the principles set out in Masri v Consolidated Contractors International (UK) Ltd (No 2), [2008] EWCA Civ 303, the court held that it was appropriate to enforce an arbitral award by the appointment of receivers over the foreign defendant’s assets.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Ray Sweigart, the author of this blog.

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The Joint Board of Licensure and Certification, State of New Hampshire compiled a list of the most common electrical installation deficiencies in the State of New Hampshire in 2014, formatted to the 2014 edition of the National Electrical Code (NFPA 70-2014) as follows:

  • Use of electrical equipment without following the manufacturer’s instructions, including installation and securing of expansion fittings in runs of Rigid Polyvinyl Chloride (PVC) Conduit and improper tightening of electrical connections
  • Inadequate clearances: working space, clear spaces, headroom and dedicated equipment space
  • Improper sealing of underground raceways
  • Improper grounding of electrode system
  • Bonding of metal water piping in the vicinity of separately derived systems
  • Wireways and consideration of 310.15(B)(3)(a)
  • Improper use of NM cable in other structures permitted to be Types III, IV or V construction
  • Improper installation of exposed vertical risers from fixed equipment
  • Improper use of Flexible Cords and Cables, Article 400
  • Failure to use weather-resistant outdoor receptacles
  • Inadequate mounting height of switches
  • Failure to use proper methods for circuit directories and circuit Identification
  • Improper connection of septic pumps
  • Failure to comply with signage requirements
  • Lack of separation of Emergency System Conductors from other conductors
  • Misunderstanding of the requirements for the installation of branch circuits supplying emergency lighting

Additional Source: Electrical Licensing Concerns And Commonly Found Installation Deficiencies in the State of New Hampshire 2014

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On October 13, 2004, California Governor Edmund G. Brown Jr. appointed Susan Granzella of Sacramento as a new (public) member of the California Contractors State License Board. Prior to the appointment, according to the Governor, Granzella “held several positions at Visa Inc. from 1996 to 2014, including senior director and vice president for technical documentation and audit and compliance coordination for global development.” The CSLB further noted that, in the latter role, Granzella “oversaw Visa’s technical writing and publishing efforts, distributing content internationally to banks and processors, and managed staff in both the United States and India.” Registrar of Contractors Steve Sands swore in Ganzella on October 21, 2014, and her term continues through June 1, 2016. With Granzella’s appointment, there remains only one vacancy on the 15-member Board. Congratulations and welcome!

Additional Information: CSLB, Industry Bulletin # 14-16 (Oct. 22, 2014).

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The New Hampshire Electrician’s Board has confirmed that the 2014 National Electrical Code (NEC) will become effective January 1, 2015 and, moreover, that all exams will be on the 2014 NEC starting on October 1, 2014. All New Hampshire licensed master and journeyman electricians will also be required to complete an “approved” 15-hour course on the 2014 NEC between January 1, 2014 and December 31, 2014 regardless of the licensee’s renewal date. See R.S.A. § 319-C:6-c. Each master and journeyman license without verification of the required 2014 NEC continuing education by January 1, 2015 will be invalid until proof of the course is received, and invalid licenses will be treated the same as a lapsed license and subject to the applicable laws for performing electrical installations without being licensed. See id.

Additional Source: State of New Hampshire Electricians’ Board; ECC, Adoption of 2014 edition of National Electrical Code®

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The Nevada State Contractors Board, at its meeting scheduled for October 23, 2014, at 8:45 a.m. by video conference at two of the Board’s offices, is expected to discuss, in its Executive Session, proposed amendments to Nevada Administrative Code § 624.170 concerning remodel of high rise buildings for possible action.

Currently, NAC § 624.170 addresses Class B general building contractor subclassifications and the work authorized for persons licensed in the respective subclassifications:

1.  PREMANUFACTURED HOUSING (subclassification B-1): The fitting, assembling, placement and installing of premanufactured units, modular parts and their appurtenances for the erection of residential buildings which do not extend more than three stories above the ground.
2.  RESIDENTIAL AND SMALL COMMERCIAL (subclassification B-2): The construction and remodeling of houses and other structures which support, shelter or enclose persons or animals or other chattels, and which do not extend more than three stories above the ground and one story below the ground.
3.  SPECULATIVE BUILDING (subclassification B-3): The construction upon property owned by the contractor of structures for sale or speculation.
4.  SERVICE STATIONS (subclassification B-4): The construction of structures and installation of equipment used to perform service upon vehicles.
5.  PREFABRICATED STEEL STRUCTURES (subclassification B-5): The construction with prefabricated steel of structures to be used for the support, shelter or enclosure of persons or animals or other chattels.

Nevada State Contractors Board Office Locations:

2310 Corporate Circle, Suite 200
Henderson, Nevada 89074
9670 Gateway Drive, Suite 100 Reno, Nevada 89521

Additional Source: Nevada State Contractors Board Notice of Meeting (Oct. 23, 2014).

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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.

In response to the Waldburger decision, the North Carolina Legislature amended the state’s statute of repose (Senate Bill 574, Session Law 2014-17), adding a new exception that would purportedly revive groundwater contamination lawsuits pending on the day of the Supreme Court’s decision. Session Law 2014-44 is titled “An Act to Make Technical Amendments to Session Law 2014-17.” Session Law 2014-17 was signed into law on June 20, 2014, and it provides that “is effective when it becomes law and applies to actions arising or pending on or after that date. For purposes of this section, an action is pending for a plaintiff if there has been no final disposition with prejudice and mandate issued against that plaintiff issued by the highest court of competent jurisdiction where the claim was timely filed or appealed as to all the plaintiff’s claims for relief to which this act otherwise applies.”

On October 14, 2014, the Eleventh Circuit reviewed the application of the revised statute in Bryant v. United States, Case No. 12-15424, and agreed that the amendment substantially amended the law and made it retroactive. However, under North Carolina precedent, the court of appeals held that law cannot be applied on a retroactive basis against the United States. The revised law can only apply prospectively if it is not to divest the United States of a vested right, i.e., the availability of a defense under state law. Interestingly, the Eleventh Circuit was obliged to make an educated “guess” as to the application of North Carolina law because there are no procedures in place by which a question can be certified to the North Carolina Supreme Court.

The case has been remanded to the lower court, where the remaining issues can be sorted out, including whether the last act or omission of the government at Camp Lejeune is covered by the statute of repose.

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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

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Today, Pillsbury attorneys Matthew Burke and Craig Becker 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 or Craig Becker, the authors of this blog.