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The Supreme Court has issued its decision in the case of CTS Corp. v. Waldburger, et al., __ S. Ct. __ (June 9, 2014), argued April 23, 2014.

The Court (Justice Kennedy) reversed the Fourth Circuit, which had held that CERCLA Section 9658 also preempted state “statutes of repose” as well as state statutes of limitations. Section 9658 was added to CERCLA in 1986. CTS operated an electronics manufacturing plant in North Carolina until 1987, when it was sold as being “environmentally sound”. In 2011, the plaintiffs in this case filed a lawsuit in federal court alleging that CTS’ operations had released hazardous substances that contaminated the property they had more recently purchased. CTS argued before the district court that North Carolina’s 10 year statute of repose required the dismissal of their lawsuit, and the court agreed. However, the Fourth Circuit disagreed, holding CERCLA Section 9658 also preempted this North Carolina law.

The Court granted a petition for certiorari because there were some conflicting interpretations of Section 9658 by the courts of appeal. In reversing the court of appeals (the vote was 7 to 2, with Justices Ginsberg and Breyer dissenting), the Court subjected Section 9658 to a thorough textual analysis and determined that Congress had not clearly provided that state statutes of repose were preempted by CERCLA, and so the majority concluded that state statutes of repose were not included in the preemptive effect of Section 9658. This was particularly important because, as the Court noted a few years ago, the states were “independent sovereigns in our federal system” and “the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” The dissenters stated that the Court’s decision gives “contaminators an incentive to conceal the hazards they have created until the repose period has run its full course”.

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

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We have previously written regarding critical repairs and updates needed for the Nation’s aging infrastructure. We have also noted the need for private investment to get these capital-intensive infrastructure projects off the ground. An Act recently passed with strong bipartisan support by Congress and expected to be signed into law as early as this week by President Obama seeks to promote private investment in water infrastructure projects through innovative financing programs and the use of public-private partnerships (“P3s”).

The Water Resources Reform and Development Act of 2014 (“WRRDA”) (H.R. 3080) establishes a five-year pilot program – the Water Infrastructure Finance and Innovation Act (“WIFIA”) – which provides low-interest federal loans and loan guarantees for major water infrastructure projects. WIFIA authorizes the Army Corps of Engineers and the Environmental Protection Agency to provide up to $175 million in direct loans and loan guarantees for the construction of critical water infrastructure projects, including those delivered through P3s. WIFIA is modeled after the Department of Transportation’s Transportation Infrastructure Finance and Innovation Act, a successful federal program which has supported major P3 transportation projects.

In addition, WRRDA creates a separate 15-project pilot program – the Water Infrastructure Public-Private Partnership Program – to assess the use of P3s to accelerate projects in such areas as hurricane, storm, and flood damage reduction; coastal harbor improvement; and aquatic ecosystem restoration. These pilot projects authorize the Army Corps of Engineers to enter into agreements with private entities and state and local governments to help address a significant project backlog.

It is estimated that the U.S. water and sewer infrastructure will need an investment of between $600 billion and $1 trillion in the coming decades. Given the magnitude of capital needed and the critical nature of these projects, P3s seem to be an ideal structure for accomplishing the work, particularly given the current financial pressures faced by the government and its agencies. If WRRDA and its programs prove successful, it makes sense to expand such financing programs and encourage the use of P3s to fund projects addressing other sectors of the Nation’s infrastructure.

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Enhancing the quality of life and economic opportunity in any region will require investments in social infrastructure–facilities for civic life, health care, education, and social services–as well as transportation infrastructure–transit, highways, surface streets, and parking. These projects entail considerable risks in design, approval, and execution, and must compete with investments elsewhere in the public and private sectors. Attracting economic and political support of all types for infrastructure will be critical to achieving the region’s potential.

In this article, reprinted with permission from the Bay Area Council Economic Institute, Pillsbury Partner Rob James identifies the hallmarks of projects that tend to realize the greatest success in navigating the risks and meeting the competition.

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UPDATE: Arc Fault Circuit-Interrupter (AFCI) and Ground Fault Circuit-Interrupter (GFCI) Protection — Effective July 1, 2014, Washington will require Arc Fault Circuit-Interrupter Protection (AFCI) as specified in the 2014 National Electrical Code (NEC).

Proposed rule changes to Washington Administrative Code § 296-46B were adopted on May 20, 2014 and will become effective on July 1, 2014. In addition to the changes to WAC 296-46B, the 2014 edition of the National Electrical Code (“NEC”) (NFPA 70-2014) will also become effective July 1, 2014. The Washington State Department of Labor & Industries recently confirmed that Permits purchased prior to July 1, 2014 may conform to either the 2008 NEC or 2014 NEC. However, permits purchased July 1 or after must comply with the 2014 NEC.

It further confirmed it will enforce 2014 NEC § 210.64 for indoor electrical service areas only. 2014 NEC § 210.64 states: “At least one 125-volt, single phase, 15- or 20-ampere rated receptacle outlet shall be installed within 15 m (50 ft) of the electrical service equipment.” It recognized that this new requirement responded to concerns that cords used to power equipment used for testing and monitoring service equipment being routed down hallways, across rooms, and through doorways creating slip, trip and fall hazards. It confirms that it understand this intend and therefore will only enforce the requirements of NEC § 210.64 for indoor electrical service areas; if service equipment is located outdoors, the requirements of NEC § 210.64 will not apply.

Additional Sources: Washington 2014 Electrical Rule Development

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Many of you who read blogs and other on-line publications likely understand the power of social media. Is it a tool in your company’s tool belt? Amy Pierce June 2 2014.jpgWhat are your reasons for using social media? How are you using it? And, if not, why not?

Important reasons for embracing and/or changing the way you view social media may include:

  • Building networks, making connections, fostering existing relationships, developing leads, and filling your pipeline with your company’s next big project
  • Connecting with the next generation of clients — Are You Battling for the Millennials’ Spending Power?
  • Sharing company news with the world, including showcasing your quality projects — Hint: Include pictures — A View Into the Different Worlds of Construction
  • Voicing your opinion on industry-related developments to effect change
  • Establishing and fostering your company’s reputation, which may include building goodwill in your community and elsewhere
  • Collecting information on what people are saying about your company so that you can continue to grow and change as your company and clients do
  • Engaging your employees with relevant information about your company, including its goals and successes
  • Recruiting new talent
  • Last, but certainly not least, competing with others in the industry that are using social media to set themselves apart

Popular social media platforms currently being used by the industry include:

Additional Source: Forbes, Grow Your Business With Pinterest (Jun. 23, 2014);

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Revised Code of Washington §§ 19.28.041, 19.28.161, and 19.28.006 definitions of “Equipment” and “Electrical construction trade” require that all parts and components of solar photovoltaic (PV) systems be installed and maintained by properly licensed electrical contractors and certified electricians. Construction contractors who are not electrical contractors are not properly licensed to install solar PV panels except in very specific applications as described in Washington Administrative Code § 296-46B-690. The allowance in Washington Administrative Code § 296-46B-690(5) permits construction contractors and uncertified individuals to place only “building integrated” PV panels but all electrical work, including wiring installation, terminations, etc., necessary to complete the electrical installations must be completed by the entity that obtained the electrical work permit.

Section 296-46B-690(5) states:

The entity placing a building integrated cell, module, panel, or array is not subject to the requirements for electrical inspection, licensing, or certification so long as the work is limited to the placement and securing of the device and an electrical work permit has been previously obtained for the electrical work related to the equipment by an entity authorized to do that electrical work.

The Washington State Department of Labor & Industries concluded that this rule was necessary because of the proliferation of materials that serve a dual function as PV components and building exterior finish materials such as roofing, siding, and windows. It recently reiterated that Section 296-46B-690(5) does not allow non-electrical contractors and uncertified individuals to install PV system materials unless they meet the definition of building integrated and the requirements in Washington Administrative Code § 296-46B-690. The definition of “building integrated” PV panels is from the National Electrical Code, and is defined in Washington Administrative Code § 296-46B-690(1) as “photovoltaic cells, modules, panels, or arrays that are integrated into the outer surface or structure of a building and serve as the outer protective surface of that building, such as the roof, skylights, windows, or facades.”

Additional Sources: Revised Code of Washington § 19.28.271 Violations of RCW 19.28.161 through 19.28.271 — Schedule of penalties — Appeal

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If you provide engineering and/or surveying services in Ohio, the current Certificates of Authorization expire on June 30, 2014 — Ohio law has changed and the renewal process is now biennial. Mark your calendar — Registration Deadline is Monday, June 30, 2014 by 4:30 p.m. and Certificates of Authorization cannot be renewed online or by telephone.

Each renewal application must include:

  • Notarized Firm Certificate of Authorization 2015-2016 Biennial Renewal: PES 3011-R (Rev. 05/2014).
  • Separate notarized Firm Affidavit of Responsibility for each professional engineer and professional surveyor designated in responsible charge: PES 3012 (Rev. 05/2014). The full-time employee must be a partner, manager, member, officer or director and shall be registered in this state. The full-time employee, as contemplated by Ohio Revised Code § 4733.16, means working more than 30 hours per week or working substantially all the engineering and/or surveying hours for a firm that holds a Certificate of Authorization.
  • An active Ohio Secretary of State charter or registration number authorizing the firm to do business in the state of Ohio. In addition, if a firm is using a doing business as (DBA) name, an active Ohio Secretary of State charter or registration number authorizing the firm’s DBA name to do business in the state of Ohio is needed.
  • Appropriate application fee, using check or money order, and made payable in U.S. funds to Treasurer, State of Ohio. If submitted before June 30, 2014: Biennial renewal fee is 50.00, and if submitted after June 30, 2014: Late biennial renewal fee is $75.00.

All fields in the renewal forms are required unless otherwise indicated. Applications without the correct fee or with incomplete information will be returned. Companies that do not wish to renew their Certificate of Authorization must notify the Board in writing within 30 days. The Board warns that a Certificate of Authorization is not the same as an individual license to practice professional engineering and/or professional surveying in Ohio.

Additional Resource: Ohio’s State Board of Registration for Professional Engineers and Surveyors, Firm Certificate of Authorization 2015-2016 Biennial Renewal Instructions; Important Information for Professional Engineers and Professional Surveyors Working in Oil and Gas Extraction in Ohio

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Rod Mutch, Chief Electrical Inspector for the Washington State Department of Labor & Industries, announced his decision to step down as Chief Electrical Inspector for the Department effective June 1, 2014. He confirmed that he will remain with the Department and will be working in the Department’s Yakima office.

Until a permanent chief electrical inspector is appointed, Larry Vance has agreed to serve as interim Chief Electrical Inspector for the Department. Larry Vance has been working as an Electrical Technical Specialist in the electrical program since November 2007with brief periods where he served as the Electrical Inspection Field Supervisor in Tacoma and interim Electrical Program Manager and Chief Electrical Inspector, and he has 18 years of electrical experience in the private sector of the electrical construction industry.

Best wishes, and thank you for your service.

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The Iowa Plumbing and Mechanical Systems Board (Board) licenses those working in the plumbing, hydronic, heating, ventilation, and air-conditioning (HVAC), and refrigeration disciplines. It issues trade licenses, specialty licenses and medical gas piping installation certifications. It began to issue contractor licenses on November 1, 2012, and anyone working in these disciplines in Iowa is required to be licensed with the Board. Senate File 427, signed into law on April 26, 2013 and incorporated into Iowa Code § 105, contains several significant changes to the licensing program which will be implemented in stages throughout the next 3 years.

One of the first changes is that all licenses issued by the Board with expiration dates between January 1, 2014 and June 29, 2014 will be extended to a single expiration date of June 30, 2014. Each licensee with a renewal that falls within this time frame should have received a letter in May advising them of the extension. During the transition period, any license within this timeframe will be given an automatic extension to June 30, 2014 at no cost, and renewal fees and proof of continuing education courses will be due beginning July 1, 2014. In turn, any license with an expiration date later than June 30, 2014 will be eligible to renew beginning July 1, 2014 in order to align all license expiration dates.

The Board confirmed that additional changes that were mandated in Senate File 427 are still in the rule making process and that announcements will be made as implementation details are developed. Expected changes are:

  • New disciplines will be added that include sheet metal and mechanical
  • HVAC and refrigeration disciplines will be combined into a new HVAC-R license
  • State Mechanical Code is now under the authority of the Plumbing and Mechanical Systems Board
  • Iowa Division of Labor Contractor Registration and Plumbing and Mechanical Systems Board Contractor License Application will combine in 2017
  • All licenses will be moving to a common expiration date on June 30, 2017

Stay tuned.
Additional Resource, Iowa Plumbing and Mechanical Systems Board, Memo: Notice of Legislative Changes

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In late March, a trial court in Bergen County, New Jersey dismissed a condominium association’s construction defect claims against several construction entities for failure to comply with the applicable statute of limitations. This decision’s appellate aftermath will be interesting to follow, because the trial court stripped away some of the protection that New Jersey’s discovery rule affords to property owners who become aware of latent defects well after a project is substantially completed.

Pursuant to the discovery rule, “a cause of action will be held not to accrue until the injury party discovers, or by an exercise of reasonable diligence and intelligence should have discovered that he may have a basis for an actionable claim.” Lopez v. Swyer, 62 N.J. 267, 272 (1973). And unlike some states, New Jersey’s discovery rule applies in contract cases involving latent construction and design defects. Torcon, Inc. v. Alexian Bros. Hosp., 205 N.J. Super. 428, 432 (Ch. Div. 1985). What this means is that the statute of limitations for design deficiencies and construction defects begins to run upon substantial completion. Mahoney-Troast v. Supermarkets General, 189 N.J. Super. 325, 329 (App. Div. 1983).

In Palisades at Fort Lee Condo. Ass’n v. 100 Palisade, 2014 N.J. Super. Unpub. LEXIS 743, *3 (Law Div. Mar. 31, 2014), construction was deemed substantially complete on May 1, 2002. The Association hired a consultant to perform inspections in November 2006, and in May 2007, the consultant issued a report identifying various construction and design defects. The Association, however, did not file a Complaint until March 2009, almost seven years after the date of substantial completion. The trial court held that although the Association’s claims may not have accrued until May 2007, when it received the report, it still had until May 2008 to file suit. The trial court stated, “[i]t has been well established in New Jersey case law that if the plaintiff has sufficient knowledge of its claim and there remains a reasonable time under the applicable limitations period to commence a cause of action, the action will be time barred if not filed within that remaining time.” Id. at *8. One of the reasons the court dismissed the Complaint is because the Association had one year to file suit after becoming aware of its potential claims.

The Palisades court cited to Torcon (another trial court opinion) for this proposition, although the Torcon court’s holding in this regard related to application of equitable estoppel in the context of a contractor’s misrepresentation or concealment of material facts. By contrast, the intent of New Jersey’s discovery rule is to toll the accrual of the statute of limitations, and the Association’s six-year statute of limitations should have commenced in May 2007, if that is the date when it knew or should have known that it may have claims arising out of defective construction.

Nevertheless, the Palisades decision should give pause to property owners and their attorneys to carefully monitor early signs of faulty workmanship, and to not assume that the discovery rule will automatically extend the six-year time period to bring claims for construction defects. A Notice of Appeal has been filed in Palisades and it will be interesting to see how the Appellate Division handles this issue.