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In Lacey Act Lessons from the Lumber Liquidators $13 Million Settlement, Pillsbury attorneys William Sullivan and Benjamin Cote explore the ramification of Lumber Liquidators’ agreement to plead guilty to five criminal charges, including one felony, stemming from its purchase and import of certain wood products through three separate Chinese suppliers. Among other things, the plea agreement marks the first criminal conviction of a major U.S. company under 2008 Lacey Act amendments that expanded the reach of the wildlife protection statute to wood products sourced from foreign countries.

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Empty Pockets (Oct. 16, 2015)

Wondering if your company qualifies for a partial sales and use tax exemption on equipment purchases and leases? The California Contractors State License Board is inviting manufacturers, research & development companies, construction contractors, retailers of construction materials and everyone else to join it for a FREE webinar:  Manufacturing and Research & Development Sales Tax Exemption Webinar on Wednesday, October 21, 2015, from 11: a.m. to 12:00 p.m. PST.  It tempts everyone to consider that they may qualify for a partial sales and use tax exemption on equipment purchases and leases. To register for the webinar, go to www.boe.ca.gov/webinars or call (844) 829-8353. The CSLB is asking everyone to register by October 20, 2015.

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Some of the current Justices sitting on the U.S. Supreme Court have written that they are dissatisfied with the state of the law regarding the deference the courts must accord to a federal agency’s interpretation of its own regulations. A workplace safety case decided on October 13, 2015, by an en banc panel of the U.S. Court of Appeals for the Eighth Circuit may provide a vehicle for the U.S. Supreme Court to review these issues. The issue of what deference to apply in these situation arises from the U.S. Supreme Court’s decisions in Bowles, et al., v. Seminole Rock & Sand Co., 325 U.S. 410 (1945) and Auer, et al., v. Robbins, et al., 519 U.S. 452 (1997); these cases have been interpreted as granting federal agencies “substantial deference” when the courts are asked to review an agency’s interpretation of its own rules. However, the growth and reach of the federal government plainly concern some of the Justices, and if there is to be a case at hand to sort through these issues, then Perez, Secretary, U.S. Department of Labor, v. Loren Cook Company may be the case to do this if the government chooses to appeal.  There appears to be a trend that courts are paying very close attention to the text of the law, and less to what the agency says the law actually means in the eyes of the agency, especially when the agency is arguing that the Congress provided the agency with boundless power and discretion.

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The California Labor Commissioner now has more power to enforce  minimum wage requirements and to collect payment for wage-related claims. California Governor Brown’s website confirmed Saturday that he has signed into law special provisions permitting the Labor Commissioner to, among other things, file a lien or levy on an employer’s property in order to assist an employee in collecting unpaid wages-related judgment. The Labor Commissioner has this power regardless of whether the judgment is entered in its favor or in favor of the employee. In addition, if a final judgment against an employer is unsatisfied, as required by the new law, the employer will not be permitted to continue to conduct business in California unless the employer has obtained a bond from a surety company and has filed a copy of that bond with the Labor Commissioner. Contractors beware, the bottom line is that you will not be able to ignore wage-related judgments without potentially significant consequences.

Additional Sources:  Senate Bill 588 (De León)

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On October 9, 2015, the U.S. Court of Appeals for the Sixth Circuit, in a split decision, stayed the implementation of the new rule redefining the regulatory definition of “waters of the United States” (the Rule), which is the linchpin of much of the federal government’s jurisdiction under the Clean Water Act (CWA). The case is State of Ohio, et al., v. U.S. Army Corps of Engineers.

The Rule, promulgated by the Environmental Protection Agency (EPA) and Corps of Engineers, was published in the Federal Register on June 29, 2015, and was to be effective on August 28, 2015. The Rule has been challenged and defended in many federal district and appellate courts, and the four actions that were considered by the Sixth Circuit followed the decision of the Judicial Panel on Multi-District Litigation to consolidate these appeals in the Sixth Circuit. The petitioners in these four actions also requested that the Sixth Circuit stay the Rule while it determines whether it even has jurisdiction over this case, given the complexity of the CWA’s provisions regarding judicial review.

The Sixth Circuit agreed that it made sense to do so, to allow the parties to submit briefs on the Sixth Circuit’s jurisdiction, which the court will review carefully, and the Sixth Circuit also indicated that its decision should be made “in a matter of weeks.”

In issuing the stay, the Sixth Circuit noted that it had some misgivings about the Rule and the EPA’s and Corps of Engineers’ processes by which the Rule was promulgated. In any case, a stay will “temporarily silence the whirlwind of confusion that springs from uncertainly about the requirements of the new Rule,” honors the “policy of cooperative federalism,” and will restore “uniformity of regulation under the familiar, if imperfect, pre-Rule regime, pending judicial review.” As a result of this action, the status quo will be maintained pending further review.

Additional Source:  80 F.R. 37054 (Jun. 29, 2015)

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Get ready wind, solar, biomass, and geothermal energy and transportation electrification contractors! On October 7, 2015, California Governor Jerry Brown signed into law the “Clean Energy and Pollution Reduction Act of 2015.” The objectives of the Act are: (1) to increase from 33% to 50% (by December 31, 2030), the procurement of our electricity from renewable sources; and (2) to double the energy efficiency savings in electricity and natural gas final end uses of retail customers through energy efficiency and conservation. These lofty goals are to be achieved by implementation of the California Renewables Portfolio Standard (RPS) Program, a program established in 2003. Notably, the Act includes a legislative finding that “a principal goal of electric and natural gas utilities’ resource planning and investment shall be… to encourage the diversity of energy sources through improvements in energy efficiency, development of renewable energy resources, such as wind, solar, biomass, and geothermal energy, and widespread transportation electrification.” This bill reflects California’s persistence in its efforts to turn to reliance on renewable energy. In effect, this should mean the continued growth in opportunities for contractors working in renewable energy areas.

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States that require a person that engages in work requiring a contractor’s or specialty contractor’s license generally include within their licensing law an express provision making it unlawful to advertise for work requiring a contractor’s license unless the person, in fact, is property licensed.  Many states’ licensing laws also require a licensed contractor to include its license number in any advertising.  Starting October 1, 2015, Section 624.720(2) of the Nevada Revised Statutes requires any person not licensed pursuant to Nevada’s contractors’ licensing law, Chapter 624 of the Nevada Revised Statutes, who advertises to perform or complete construction work or a work of improvement to affirmatively state in the advertisement that he or she is not licensed pursuant to Chapter 624.  Licensed contractors should also be careful not to advertise for work that exceeds the scope of their contractor’s or specialty contractor’s license.

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The U.S. Court of Appeals for the Second Circuit has issued a ruling that EPA’s Clean Water Act (CWA) Vessel General Permit (VGP), which regulates the discharge of ballast water from ships, was promulgated in violation of the Administrative Procedure Act (APA), and must be remanded to the agency.  The case is National Resources Defense Council, et al. v. EPA, which was decided on October 5, 2015.

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The U.S. District Court for the Southern District of West Virginia has ruled on the government’s motions to dismiss the plaintiffs’ constitutional arguments in a new Clean Water Act (CWA) administrative compliance order matter.  The plaintiffs, West Virginia property developers, were alleged to have violated the CWA by illegally discharging dredge and fill material into Neal Run, a tributary stream that flows into the “waters of the United States”.  EPA issued a CWA Compliance Order under Section 309 of the CWA, requiring the plaintiffs to restore the property to “pre-disturbance grade and conditions”.  The plaintiffs, who purchased the property out of the bankruptcy estate of the previous owner, then filed a lawsuit seeking declaratory and injunctive relief from the order under the Administrative Procedures Act (APA) or an injunction halting its enforcement.  They alleged that the order violated both their procedural and substantive due process rights.  The case is Foster, et al., v. EPA, et al.

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National Fire Prevention Week commemorates the Great Chicago Fire of 1871.  Over the course of two days, the fire reportedly killed more than 250 people, left 100,000 homeless, destroyed more than 17,400 structures and burned more than 2,000 acres.  On June 1, the National Fire Protection Association announced  “Hear the Beep Where You Sleep: Every Bedroom Needs a Working Smoke Alarm” as the theme for this year’s Fire Prevention Week campaign.  With this theme, its goal is to better educate the public about NFPA 72, National Fire Alarm Code®, which requires a smoke alarm in every bedroom, outside each sleeping area and on every level of the home (referred to as the “‘sleepy’ smoke alarm requirement”).   On October 2, President Oba proclaimed October 4 through October 10, 2015, as Fire Prevention Week.

Additional Sources:  National Fire Protection Association, About Fire Prevention Week