Gravel2Gavel Construction & Real Estate Law 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

On April 11, 2014, Mississippi Governor Phil Bryant signed into law Senate Bill 2622, enacting a construction lien law to protect contractors, subcontractors, materialmen, registered architects and professional engineers, and registered land surveyors. Compliance with the new law is imperative to avoid forfeiture of your right to a lien claim and to maintaining an enforceable lien.

For example, the new law contemplates that a lien claim may be forfeited as follows:

“Upon the written request of the property owner by registered or certified mail or statutory overnight delivery, the contractor shall furnish to the owner a complete list of all subcontractors and materialmen and upon written request from the contractor, all subcontractors shall provide the same information. If the contractor or subcontractor willfully fails or refuses to furnish the list or to give the information to the owner or contractor within a reasonable time, he shall thereby forfeit his right to a lien under this article. Similarly, if the contractor or subcontractor fails to pay any materialman or subcontractor in direct privity with him in accordance with any contract, subcontract or purchase order specifically requiring him to do so, he shall thereby forfeit his right to a lien under this article.”

In addition, no lien claim will be permitted in favor of any contractor or subcontractor who is not licensed, as required by law, or who contracts with any contractor or subcontractor who is not licensed, as required by law. And to be filed and recorded, the lien claim must have the required language.

The new law also provides a form Interim Waiver and Release Upon Payment, Waiver and Release Upon Final Payment, Affidavit of Nonpayment, Notice of Contest of Lien, and Pre-lien Notice to Owner. In addition, the lien claim must be “in substance” as follows:

“A.B., a mechanic, contractor, subcontractor, materialman, machinist, manufacturer, registered architect, registered forester, registered land surveyor, registered professional engineer, or other person (as the case may be) claims a lien in the amount of (specify the amount claimed) on the building, structure, house, factory, mill, machinery, or railroad (as the case may be) and the premises or real estate on which it is erected or built, of C.D. (describing the houses, premises, real estate, or railroad), for satisfaction of a claim which became due on (specify the date the claim was due, which is the same as the last date the labor, services or materials were supplied to the premises) for work performed or labor, services provided (or whatever the claim may be).

THIS CLAIM OF LIEN EXPIRES AND IS VOID ONE HUNDRED EIGHTY (180) DAYS FROM THE DATE OF FILING OF THE CLAIM OF LIEN IF A PAYMENT ACTION IS NOT FILED BY THE CLAIMANT WITHIN THAT TIME PERIOD.

NOTICE TO OWNER OF PROPERTY: You have the right to contest this claim of lien pursuant to Mississippi law.”

Important deadlines include, for example:

• 10 Days — As to single-family residential construction only and a subcontractor, materialman or design professional not in privity with the owner, providing the owner a pre-lien written notice at least 10 days before filing a lien claim of lien, which can be evidenced by any reliable means of delivery
• 30 Days — For any person having a right to a lien claim who does not have privity of contract with the contractor, or, if there is no contractor, with the owner, and is providing labor, services or materials for the improvement of property, within 30 days following the first delivery of labor, services or materials to the property, the person shall give a written notice to the contractor, or, if there is no contractor, to the owner, either by e-mail with a confirmed receipt, registered or certified mail, or statutory overnight delivery setting forth the following: (a) The name, address, and telephone number of the person providing labor, services or materials; (b) The name and address of each person at whose instance the labor, services or materials are being furnished; (c) The name of the project and location of the project to which labor, services or materials are provided; and (d) A description of the labor, services or materials being provided and, if known, the contract price or anticipated value of the labor, services or materials to be provided
• 90 Days — Filing for recording the lien claim in the office of the clerk of the chancery court of the county where the property is located within 90 days after the claimant’s last work performed, labor, services or materials provided, the furnishing of architectural services, or the furnishing or performing of surveying or engineering services
• 2 Days Later — Sending, no later than 2 business days after the lien claim is filed of record, a true and accurate copy of the lien claim by registered by registered or certified mail or statutory overnight delivery to the owner of the property or, if the owner’s address cannot be found, the contractor, as the agent of the owner; if the property owner is an entity on file with the Secretary of State’s office, sending a copy of the claim of lien to the entity’s address or the registered agent’s address shall satisfy this requirement.
• 2 Days Later — If the lien claimant is not the contractor, sending a copy of the claim of lien within 2 business days by registered or certified mail or statutory overnight delivery to the contractor or to the contractor’s registered agent
• 90 Days/180 Days — Filing a lien claim payment action within 180 days from the date of filing for recording the lien claim – the owner may shorten the time for filing the lien claim payment action to 90 days by it, its agent, its contractor or its contractor recording in the chancery clerk’s office a notice of contest of lien, as required by law, along with proof of delivery to the lien claimant
• Same Time as Lien Claim Payment Action — Filing a lis pendens notice with the commencement of a lien claim payment action

The new law is worth a careful read now.

On June 30, 2014, the US Court of Appeals for the Fifth Circuit reversed the lower court’s determination that the State of Texas’ administration of its water management authority under state law violated the Endangered Species Act (ESA) by “taking” whooping cranes, a protected species under the ESA, by failing to ensure that adequate supplies of freshwater flowed into the river serving the Aransas National Wildlife Refuge, located along the Texas coast. To remedy the situation, the lower court ordered the state officials to refrain from approving or granting new water permits until the State of Texas persuaded the court that such permits will not take whooping cranes in violation of the ESA. The case is The Aransas Project v. Shaw.

The appeals court held that the lower court utilized an erroneous standard of proof, in that it failed to follow the foreseeability and proximate cause requirements for ESA liability described in the 1995 Supreme Court decision in Babbitt, Secretary of the Interior v. Sweet Home Chapter of Communities for a Great Oregon. The case is significant because it describes the standard of proof that must be met in many ESA-taking cases when the link between a government action (usually a permitting decision) and the taking of a threatened or endangered species ~ the Fifth Circuit described the whooping crane as “a majestic bird that stands five feet tall and has a wingspan of more than eight feet” ~ must be established utilizing these proximate cause factors. In this case, the connection between permitting actions, the water usage of hundreds of licensed users and the impact of a historic drought was too remote to establish liability for the state. The appeals court also ruled that the injunction issued by the lower court was an abuse of discretion and must be reversed.

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.

Additional Sources: Unofficial Transcript of Oral Argument Aug. 8, 2013

Photo: USFWSmidwest, Whooping crane (Federally endangered) pair feed and rest at Patokah River National Wildlife Refuge in Indiana on their migration south, Taken Nov. 22, 2010 – Creative Commons

Evidently everyone does have an App, except me. OSHA’s Heat Safety Tool App enables workers and supervisors to calculate the heat index for their worksite. Based on the heat index, the App displays a risk level to outdoor workers and access via a “click” to reminders about the protective measures that should be taken at that risk level to protect workers from heat-related illness-reminders. Remember that the industries most affected by heat-related illness include construction; trade, transportation and utilities; agriculture; building, grounds maintenance; landscaping services; and support activities for oil and gas operations.

OSHA encourages employers to establish a complete heat illness prevention program to prevent heat illness, and reminds employees to Water, Rest, Shade to prevent heat related illness and fatalities:

• Drink water every 15 minutes, even if you are not thirsty
• Rest in the shade to cool down
• Wear a hat and light-colored clothing
• Learn the signs of heat illness and what to do in an emergency
• Keep an eye on fellow workers
• “Easy does it” on your first days of work in the heat to enable yourself to get use to it

It also warns that every year, thousands of workers become sick from exposure to heat, and some even die. Exposure to heat can manifest as a heat rash, heat cramps, heat exhaustion and heat stroke; heat stroke requires immediate medical attention and can result in death. These conditions are preventable ~ Water, Rest, Shade. Be safe!!!

Additional Sources: U.S. Department of Commerce, National Oceanic and Atmospheric Administration, Heat Wave: A Major Summer Killer; Welcome to OSHA’s Campaign to Prevent Heat Illness in Outdoor Workers; OSHA Compliance Issues: Correcting Common Health And Safety Program Deficiencies At Remediation Sites; OSHA Technical Manual (OTM) Section III: Chapter 4; Cal/OSHA Issues 2nd High Heat Advisory to Employers with Outdoor Workers

Photo: Hey Paul Studios, Outside, Taken Aug. 5, 2012 – Creative Commons

Today, the California Department of Industrial Relations (DIR) announced that it has approved implementation of the 2014/15 Alternative Security Program (ASP), which it boasts that this “first-in-the-nation, innovative program” “frees $7.54 billion in working capital and provides self-insured California businesses greater financial flexibility.”

All employers in California are required to have workers’ compensation insurance to protect themselves and workers, and to minimize the impact of work-related injuries and illnesses. Meeting California’s requirement that all employers in California have workers’ compensation insurance can be done either by buying an insurance policy, or through obtaining authority from DIR’s Office of Self Insurance Plans (OSIP) to self-insure the employer’s workers’ compensation liabilities.

OSIP reports Self Insurance by the Numbers – 2013 Annual Report Statistics as follows:

• $177 Billion total self-insured payroll
• 4 Million CA Workers covered by self-insurance
• 1 in 4 CA Workers is covered by self-insurance
• 9,849 CA Employers are active self-insurers

The ASP, which is operated by the non-profit California Self Insurers’ Security Fund with the DIR, provides financial guarantees to replace security deposits required to collateralize self-insured workers’ compensation liabilities. Otherwise, if an employer is self-insured, it is required to maintain a deposit to collateralize its risk in an amount equal to estimated liabilities as determined by an actuary, e.g., cash, letters of credit, surety bonds or securities. An ASP member’s cash or line of credit is freed up, enabling them to invest these monies into its business.

Additional Source: DIR News Release No. 2014-56, California’s Alternative Security Program Frees $7.5 Billion in Working Capital for Businesses (Jul. 2, 2014); Office of Self Insurance Plans