Gravel2Gavel Construction & Real Estate Law Blog

In a decision released Friday in the case of United States of America v. Volvo Powertrain Corp., the DC Circuit affirmed the lower court’s decision finding that a Consent Decree entered into by several engine manufacturers to settle civil complaints that they had violated federal law by equipping certain engines with “defeat devices” to suppress emissions during EPA tests applied to Volvo Powertrain. The terms of the Consent Decree also required these manufacturers to attain EPA emissions standards ahead of schedule.

At issue here were Volvo Penta engines, which Volvo argued were not subject to the terms of the Consent Decree. In a long opinion interpreting the Consent Decree, Judge Srinivasan, writing for a unanimous panel, held that the consent decree, by its terms, did apply to this Volvo plant, noting that certain issues had been forfeited when they were not argued before the trial court. Interestingly, the court also held that the relevant regulations, located at 40 C.F.R. Part 89, apply to all engines for which a manufacturer seeks a certificate of conformity, regardless of whether the engines are sold in the United States.

The action was prompted by a tip from Caterpillar Inc., one of Volvo Penta’s competitors, complaining that these engines should be part of the enforceable provisions of the Consent Decree.

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.

The Seventh Circuit, in the case of State of Michigan, et al. v. US Army Corps of Engineers and the Metropolitan Water Reclamation District of Greater Chicago, once again denied a request by five states bordering on Lake Michigan seeking an injunction against the Corps and the Water Reclamation District. The Asian carp threatens to overwhelm the Great Lakes unless its migration through the Chicago Area Waterway System which connects Lake Michigan with the Mississippi River. The states appear to favor a hugely expensive and environmentally questionable project to physically separate these bodies of water to prevent the carp from entering and pillaging the Great Lakes. The court denied relief, but the opinion by Judge Wood is a masterful exposition of federal common law principles, nuisance law, and the way the 1899 River and Harbors Act is intended to work. The court declined the invitation to step into the middle of this controversy, while it acknowledges that some progress has been reported.

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.

Recently, the DC Circuit held that a Presidential Order prohibiting a transaction to develop wind farms in Oregon because of unspecified national security issues, was violative of the constitutional guarantees of due process. The case is Ralls Corporation v. the Committee on Foreign Investment in the United States (an Executive Branch committee created by the Defense Production Act of 1950). Ralls is an American corporation, but the owners are Chinese nationals. For this reason the purchase of four American limited liability wind farm companies was subject to review by the Committee and a Presidential Order implementing the Committee’s recommendation that the transaction be prohibited.

Although the law under which the President acted provides that his actions and findings are not subject to judicial review, the courts do not view this as prohibiting judicial review when the issues raised are constitutional–in this case, whether the owners’ due process rights were violated. As the court notes, they have never received any notice of the evidence of a national security concern, nor an opportunity to rebut that evidence. Consequently, the court concluded that the Presidential Order deprived Ralls of a constitutionally protected property interest without due process of law, and the matter was returned to the District Court to ensure that Ralls now has an opportunity to at least review any unclassified evidence that the government relied upon in making this disputed decision.

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.

Recently, the DC Circuit decided the case of National Mining Association v. McCarthy. Reversing the lower court, the court held that an “Enhanced Coordination Process” memo and guidance authored by EPA and the Corps of Engineers to coordinate their joint review of coal mining Clean Water Act, 33 U.S.C. §§ 1251, et seq. (“CWA”), water discharge permits was only a procedural rule and not a “final action” subject to review under the APA. The Court of Appeals concludes that the memo only enhances these agencies’ ability to coordinate the application of their duties under the CWA, and does not change their substantive statutory responsibilities.

Responding to the complaint that the memo was in fact a “legislative rule’ whose promulgation was subject to the APA and pre-enforcement review, the court refers to the case law in this area, which it describes as “sometimes byzantine”. The Court of Appeals notes that EPA acknowledged at oral argument that the memo has no legal impact. Therefore, the Court of Appeals concludes that it may not be the basis for an enforcement action against a regulated entity, and, as a “matter of law, state permitting authorities and permit applicants may ignore this final guidance without facing any legal consequences”. Accordingly, the question before the Court of Appeals was not whether judicial review was available, but “whether judicial review is available now”.

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.

The Fourth Circuit Court of Appeals has issued a ruling in the case of Southern Appalachian Mountain Stewards v. A & G Coal Corporation. The Court of Appeals affirmed the lower court’s decision in a Clean Water Act, 33 U.S.C. §§ 1251, et seq. (“CWA”), citizen suit lawsuit that A & G could not assert the “permit shield” defense. A & G operates a coal mine in Virginia, and has a National Pollutant Discharge Elimination System (“NPDES”) permit; the permit application did not list selenium as a pollutant because the coal company argued that it had no reason to believe that this toxic pollutant was discharged from its facility, and that the permit shield defense of CWA Section 1342(k) was available. Sampling at the outfalls disclosed the presence of selenium, but the parties disagree as to whether the concentrations violate any state water quality standards. The Court of Appeals closely examined the disclosures required of an NPDES permit applicant, and determined that A & G had not made an adequate disclosure to trigger the permit shield defense. The failure to fully comply with these disclosure requirements, especially regarding a substance like selenium, meant that A & G could not deploy this defense to liability.

The case will return to the district court to determine whether there is, in fact, a violation of the Virginia water quality standards applicable to selenium. The case has attracted considerable interest; briefs were filed on behalf of the American Petroleum Institute, the National Mining Association, the National Association of Home Builders, and the Virginia Mining Association.

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.

Today, Pillsbury attorney Ray Sweigart posted his client advisory English Contract Law: Has the Camel’s Nose of “Good Faith” Crept Under the Tent Flap? The Advisory discusses Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd [2014] EWHC 2104 (Comm), which involves a challenge brought under Section 67 of the English Arbitration Act 1996 that the tribunal lacked substantive jurisdiction.

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.

LINKS UPDATED AUGUST 30, 2017

California’s Contractors’ State License Law, Bus. & Prof. Code §§ 7000, et seq., requires all contractor’s license applicants to submit a full set of fingerprints for a criminal background check. Once submitted, the fingerprints are compared to the records of the California Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) to determine if the applicant has a criminal history. The Contractors State License Board (CSLB) has confirmed that “[t]he number one reason that an application may be denied is the applicant’s failure to accurately disclose his/her conviction record.”

Who Must Be Fingerprinted?
All contractor license applicants and each officer, partner, owner listed on the application must be fingerprinted; the CSLB’s Application for Original Contractor License further explains that “[a]ll corporations must also provide the name(s) of their corporate officer(s): California corporations – president, secretary, and treasurer; foreign corporations – president only.” Applicants for a joint venture license are not required to be fingerprinted.

After a contractor’s license application has been accepted by the CSLB as complete (aka “posted”), each individual listed on the license application is sent instructions on the process for obtaining and submitting fingerprints and a “Request for Live Scan Service” (form BCII 8016). Live Scan fingerprinting services are available at most California local police and sheriff departments, and any public Live Scan site.

Cal. Code of Regs.§ 869.3.  and the CSLB’s FAQs confirm that, if you do not live in California and do not plan to come to California during the application process, or if you do not have access to a Live Scan site, it will permit you to submit fingerprints using hard copy fingerprint cards. Additional fees will apply. It also warns that the processing time required for hard copy fingerprint cards is substantially longer than Live Scan fingerprinting, taking 3 to 6 months or longer.

What Sort of “Convictions” Must Be Disclosed?
A conviction of any kind — misdemeanor and felony — regardless of the nature of the conviction and regardless of when it occurred. A “conviction” means a plea or verdict of guilty or a conviction following a plea of nolo contendere. All convictions are reported to the CSLB, including those that have been sealed, expunged, or reduced under Penal Code § 1203.4 or an applicable code of another state. Failure to disclose all convictions is falsification of the application, which was signed under penalty of perjury, and is grounds for denial.

Will a Conviction Prevent the CSLB From Issuing a Contractor’s License?
The CSLB’s Criminal Background Unit (CBU) reviews on a case-by-case basis all criminal convictions to determine if the crime at issue is “substantially related to the duties, qualifications, and/or functions of a contractor.” The criteria the CBU uses to review a criminal conviction is “whether the crime shows the present or potential unfitness of an applicant or licensee to perform the functions authorized by the license in a manner consistent with the public health, safety, or welfare.” The primary factors in the evaluation of conviction records are (1) the nature and severity of the crimes, (2) the amount of time that has elapsed since the conviction, and (3) any rehabilitation that has been demonstrated by the applicant. In addition, the CBU will review and consider any evidence of rehabilitation submitted by the applicant or licensee. See Cal. Code of Regs. §§ 868, 869.

Depending on the conviction record, the CBU may either clear an applicant’s license application for further processing or request additional documentation or statements from the applicant that may be necessary for the CBU to complete a thorough evaluation of the applicant’s conviction record. If it requests additional information, upon completion of the CBU’s review: (1) the applicant’s license application is cleared for further processing toward licensure, (2) the applicant is offered a probationary license for a specified term in lieu of denial, pursuant to Cal. Bus. & Prof. Code § 7073, or (3) the applicant’s license application is denied based on the applicant’s criminal conviction history.

Additional Resources: CSLB’s Fingerprinting, Disclosure, and Background Review

The Federal Communications Commission’s Accessibility and Innovation Initiative will host an “Accessing Social Media” event on Thursday, July 17, 2014 from 9 a.m. to 4 p.m. in the Commission Meeting Room in its headquarters located at 445 12th Street, S.W., Washington, D.C. The event will be webcast without open captioning. The event is open to the public, however, RSVPing for in-person attendance is encouraged.

The FCC’s stated purpose of the event is “to facilitate a collaborative, cross-sector exchange of information about making social media tools and content accessible to people with disabilities, including information about authoring tools, client apps and best practices.” The event will include panels of industry, consumer and government representatives and feature technology demonstrations in an exhibit area.

Additional Sources: Social Media, Not Just For Everyone Else

The Sacramento Ronald McDonald House recently broke ground on a project to double the capacity of its housing facility located at 49th Street on the U.C. Davis Medical Center campus with a $6 million expansion. The expansion will add 20 bedrooms to the existing 18 bedroom facility, and add a kitchen, dining area, indoor playroom and fitness facilities. The 18,000 square foot expansion was made possible from a variety of fundraising efforts.

There are a total of 11 Ronald McDonald’s Houses in California. Reportedly, McDonald’s funds approximately 16% of the financial needs, which includes donating $0.15 for each McFlurry sold.

Additional Source: Sacramento Ronald McDonald’s House will double capacity in $6 expansion; Ronald McDonald House Charities