In Review: SCOTUS Environmental and Administrative Decisions in the 2020 Term
August 10, 2021 —
Anthony B. Cavender - Gravel2GavelSeveral decisions of interest were issued in the 2020 term, which stretched from October 2020 until early July 2021. This review will concentrate on environmental and administrative law cases.
Texas v. New Mexico
On December 14, 2020, the Court issued its ruling in an Original Action. Water is precious in the Pecos River Valley, and the distribution of water is governed by the Pecos River Compact. Here, Texas complained that New Mexico illegally was seeking delivery credits for evaporated water credits but the Court agreed that New Mexico was entitled to these credits under the provisions of the River Master’s Manual.
Florida v. Georgia
On April 1, 2021, in another waters right ruling on an Original Action filed in the Supreme Court, the Court rejected Florida’s claims that Georgia’s use of interstate waters harmed Florida’s businesses. Florida had to satisfy a heavy burden of proof, which it failed to do.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Environmental and Regulatory Law Update: New Federal and State Rulings
April 19, 2022 —
Anthony B. Cavender - Gravel2GavelThe first quarter of 2022 has yielded a number of decisions, reversals and agency adjustments worth note.
FEDERAL CIRCUIT
U.S. Court of Appeals for the D.C. Circuit – Food & Water Watch v. Federal Energy Regulatory Commission
On March 11, 2022, the court decided the FERC case. On December 19, 2019, the Commission issued a Certificate to Tennessee Gas Pipeline and determined that a “modest expansion” and upgrade of the existing 11,000-mile natural gas pipeline would have no significant environmental impact. However, one of the Commissioners filed a partial dissent, arguing that the Commission’s treatment of the climate change impacts was inadequate. A petition for review was filed, and now the court has decided that the Commission erred in not accounting for the indirect effects of the expansion, namely the downstream emissions of greenhouse gas generated by the pipeline’s delivery of the gas to its customers. Consequently, NEPA’s requirement that a rigorous environmental assessment be made before the authorization was granted was violated. However, the court decided against vacating the Commission’s orders, which would have had a “disruptive effect” on the project which is, or soon will be, operational.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Land Planners Not Held to Professional Standard of Care
October 10, 2013 —
Heather Anderson — Higgins, Hopkins, McLain & Roswell, LLC.Recently, the Colorado Court of Appeals indicated that there is no professional duty of care applicable to land planners. See Stan Clauson Associates, Inc. v. Coleman Brothers Constr., LLC, 297 P.3d 1042 (Colo. App. 2013). Stan Clauson Associates, Inc. (“SCA”) agreed to provide land planning services to Coleman Brothers Construction, LLC (“Coleman”) for property referred to as Crown Mountain in a letter and then verbally agreed to provide a development analysis for another property, located on Emma Road in Basalt, Colorado. Thereafter, SCA sent letters to the defendant concerning the possible subdivision and development of the Emma Road property.
Approximately two years later, SCA sued Coleman for breach of the verbal agreement concerning the Emma Road property. Coleman then asserted counterclaims against SCA for negligently providing inaccurate advice about whether the Emma Road property could be subdivided and developed, and that the county had denied the planned unit development sketch plan SCA prepared and submitted on behalf of Coleman. The district court granted SCA’s motion for summary judgment thereby concluding that the economic loss rule barred Coleman’s negligence counterclaims. The Court of Appeals agreed.
In its opinion, the Court of Appeals reiterated the economic loss rule espoused in the Colorado Supreme Court in the Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000) case. “Under the economic loss rule, ‘a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law.’”
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Heather AndersonHeather Anderson can be contacted at
anderson@hhmrlaw.com
Brooklyn Atlantic Yards Yields Dueling Suits on Tower
September 03, 2014 —
Erik Larson – BloombergForest City Ratner Cos., the initial developer of Brooklyn’s $4.9 billion Atlantic Yards project surrounding Barclays Center arena, exchanged lawsuits with the Swedish construction firm Skanska AB (SKAB) over claims of design flaws and delays in building a stalled residential tower.
The lawsuits, filed today in Manhattan state court, focus on a contract for the 34-floor “modular” residential high-rise building under construction next to the arena for the National Basketball Association’s Brooklyn Nets that opened in 2012 as the centerpiece of the former rail yard and a symbol of the New York borough’s resurgence.
Skanska, a Stockholm-based firm that has grown to become New York’s second-largest building contractor, seeks at least $50 million in damages for changes to the building that were made without consultation, according to its complaint. Brooklyn-based Forest City Ratner blames Skanska for the project’s problems, citing “tens of millions of dollars” in cost overruns caused by a lack of skill and a failure to adhere to terms of the 2012 contract.
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Erik Larson, BloombergMr. Larson may be contacted at
elarson4@bloomberg.net
When Subcontractors Sue Only the Surety on Payment Bond and Tips for General Contractors
August 13, 2019 —
Ira M. Schulman & Emily D. Anderson - ConsensusDocsPayment bonds have been a staple of public construction projects since 1874, when the U.S. Congress first passed the Heard Act, which required that contractors obtain payment bonds for public projects to ensure that subcontractors and material suppliers have a way to recover their damages if an upstream contractor fails to pay for work performed and materials furnished on the project. The 1874 Heard Act has since been replaced by the 1935 Miller Act, and the concept has been expanded to construction projects funded by the states through state statutes known as “Little Miller Acts.” But the structure remains the same: On most public projects where the project’s cost exceeds $100,000, the prime contractor (the bond principal) is required to obtain a payment bond from a surety equal to the contract price to guarantee to subcontractors and material suppliers (the bond obligees) that the surety will pay for labor and materials under certain statutory or contractual conditions should the contractor fail to make payment.
A surety is jointly and severally liable with the contractor to the subcontractor, which means that the subcontractor may seek recovery against either the contractor or the surety or both, and the contractor and surety will be liable for the damages together. Put another way, in most states and in federal court, an unpaid subcontractor has the right to sue only the surety on the payment bond without joining the contractor because a contract of suretyship is a direct liability of the surety to the subcontractor.1 When the contractor fails to perform, the surety becomes directly responsible at once — it is unnecessary for the subcontractor to establish that the contractor failed to carry out its contract before the obligation of the surety becomes absolute.
Reprinted courtesy of
Ira M. Schulman, Pepper Hamilton LLP and
Emily D. Anderson, Pepper Hamilton LLP
Mr. Schulman may be contacted at schulmani@pepperlaw.com
Ms. Anderson may be contacted at andersone@pepperlaw.com
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A “Supplier to a Supplier” on a California Construction Project Sometimes Does Have a Right to a Mechanics Lien, Stop Payment Notice or Payment Bond Claim
October 01, 2014 —
William L. Porter - The Porter Law GroupFor purposes of seeking payment on a construction related project in the California construction industry, the proper legal classification of the party seeking payment is of key importance. Whether one in contract with a prime contractor is a subcontractor or a material supplier determines the availability for mechanics’ liens, stop payment notices and payment bond claims. Generally, those in contract with subcontractors have the ability to assert mechanics liens, stop payment notices and payment bond claims against the owner, general contractor and/or sureties. On the other hand, those who supply materials to material suppliers are generally not entitled to assert a mechanics lien, stop payment notice or payment bond claim. The “rule” has generally been stated as: “A supplier to a supplier has no lien rights.” However, this rule is not always true.
The proper classification of an entity as either a subcontractor or a material supplier can be difficult. Simply because a prime contractor hires a licensed contractor to furnish labor, materials, equipment or services on a project does not mean that the party hired is actually a “subcontractor” as a matter of law. Conversely, even though a material supplier may not have a contractors’ license, he may still be classified as a subcontractor based on his scope of work. Based on recent case law, the method of determining whether an entity is a subcontractor or a material supplier has been clarified. The classification will depend on the scope of work that the hired party actually agreed to perform on the project.
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William L. Porter, The Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
Contractor Underpaid Workers, Pocketed the Difference
February 10, 2012 —
CDJ STAFFProperty Casualty 360 reports that the owner of a construction company in California’s Bay Area has been arraigned in San Francisco Superior Court. The fifty-seven felony counts include charges of payroll theft and insurance fraud.
San Francisco District Attorney, George Gascon is quoted as saying that Doherty’s actions “hurts the honest businesses that were unable to successfully compete for these projects which the defendant was able to underbid and win as a result of this scheme.”
Frances Ann Doherty, owner of Doherty Painting & Construction has been charged with submitting false documentation as to what wages she paid her workers. It is alleged that over three years she pocketed $600,000. Additionally, she is charged with underpaying her insurer by more than $100,000 by submitting to them the fake payroll information.
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Texas Shortens Its Statute of Repose To 6 Years, With Limitations
October 02, 2023 —
Jason Daniel Feld & Roni Most - Kahana FeldEffective June 9, 2023, Texas has shortened its statute of repose from the existing 10-year statute for builders of new homes to 6-years under specific conditions. The significantly shorter statute of repose bars suits against construction contractors of detached one-and two-family homes and townhomes, filed six years after the substantial completion of such homes, where the contractor also furnished a written warranty in compliance with the statute. Notably, projects including apartments, mixed-use, and hotels are not covered by the new law. It is also noted that a grey area in the law exists as to whether condominiums will be covered by the statute. The statute of repose strictly bars the filing of any action, claim or arbitration demand regardless of when the injury was actually discovered (latent defects) and is separate and distinct from any applicable statute of limitations.
The New Texas Statute of Repose Law
Under the
Texas Civil Practice & Remedies Code § 16.009, persons who construct or repair improvements to real property cannot be sued for defective or unsafe conditions of the property or deficiencies in the construction or repair of the improvement later than 10 years after substantial completion of the improvement, except in certain narrow circumstances. This statute is known as the “statute of repose.” The statute applies not only to suits for construction defects, but also personal injury, wrongful death, contribution, and indemnity.
Reprinted courtesy of
Jason Daniel Feld, Kahana Feld and
Roni Most, Kahana Feld
Mr. Feld may be contacted at jfeld@kahanafeld.com
Mr. Most may be contacted at rmost@kahanafeld.com
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