Construction & Infrastructure Law Blog

New Legal Developments in Construction & Infrastructure Industry

On June 10, 2023, a jury in Portland, Oregon found PacifiCorp and Pacific Power (collectively, “PacifiCorp”) liable for negligence, trespass, and nuisance based on a series of four wildfires that occurred during Labor Day weekend in 2020. PacifiCorp prevailed against the plaintiffs on the claim of inverse condemnation. With respect to the tort-based claims, the jury awarded approximately $72 million in compensatory damages to 17 plaintiffs. The jury later found PacifiCorp liable for $18 million in punitive damages, or one quarter of the compensatory damages that the jury awarded to the 17 plaintiffs. The jury’s liability findings apply to a
Continue Reading Beyond Inverse Condemnation in Wildfire Litigation: An Oregon Jury Finds Utility Liable for Negligence, Trespass and Nuisance

Move over luxury bus lines and quick flights. Central Texans should be on the lookout for bulldozers and train stops. On June 24, 2022, the Supreme Court of Texas held that Texas Central Railroad & Infrastructure, Inc. and related entities (collectively “Texas Central”) have eminent domain authority to acquire property for a proposed high-speed rail system between Dallas and Houston.[1] Specifically, the Court held that the corporation qualifies as an “interurban electric railway company” under the Texas Transportation Code. This ruling grants Texas Central the broad condemnation authority to procure land for the project.
Continue Reading Texas Central Wins Authority to Take Land for High-Speed Rail System

On March 11, 2022, the Department of Labor (“DOL”) proposed reverting the definition of “prevailing wage” under the Davis-Bacon Act to a definition used over 40 years ago. According to the DOL, the proposal is meant to modernize the law and “reflect better the needs of workers in the construction industry and planned federal construction investments.”[1]
Continue Reading Turning Back the Clock: DOL Proposes Previous Davis-Bacon Prevailing Wage Definition

On September 9, 2021, the President issued Executive Order 14042, which applies new rules – including vaccination mandates – to Federal contractors and subcontractors. EO 14042 does not include a weekly testing option and is therefore a true vaccination mandate. The rule defines “Federal contractor” very broadly. As a result, the rule likely covers most companies doing business with the Federal Government, including employees of those businesses even if those employees are working from home (e.g., HR, legal, and billing employees who may not be on site). The rule also covers subcontractors at all tiers, including certain vendors. Sheppard Mullin’s Construction
Continue Reading Executive Order 14042 Survival Guide

On July 21, 2021, the National Labor Relations Board (“NLRB” or the “Board”) issued a 3-1 decision affirming its precedent that displaying banners and a large inflatable rat (“Scabby the Rat”) near neutral employers does not violate the National Labor Relations Act (“NLRA” or “the Act”).  This decision may come as a disappointment to many employers as the NLRB under the Trump administration had been making efforts to end what many felt was unlawful secondary picketing under the Act.
Continue Reading Scabby Survives Another Trip to the NLRB: Board Reaffirms Rat-and-Banner Displays Targeting Neutral Businesses Are Permissible

Not your average game of patty-cake! Earlier this week, New York’s  First Department, Appellate Division issued its decision related to 200 Amsterdam,[1] overturning the lower court’s decision which would have required 200 Amsterdam to remove several floors of its building in order to comply with zoning.  The lower court determined that the NYC Zoning Resolution did not permit a developer to utilize a portion of a tax lot to merge with a neighboring zoning lot.
Continue Reading Build Me A Building As Fast As You Can

Contractors performing work in California are required to be licensed by the California State License Board (“CSLB”).  Cal. Bus. & Prof. Code §7065.  Except for sole proprietors, contractors are typically licensed through “qualifiers,” i.e., officers or employees who take a licensing exam and meet other requirements to become licensed on behalf of the contractor’s company.  Contractors who perform work in California without being properly licensed are subject to a world of hurt, including civil and criminal penalties (see, e.g., Cal. Bus. & Prof. Code §§ 7028, 7028.6, 7028.7, 7117, and Cal. Labor Code §§ 1020-1022), and the inability to maintain a lawsuit
Continue Reading Landmark Contractor Licensing Case Limits Disgorgement Remedy in California

Amidst the ongoing Covid-19 pandemic, daily and sometimes hourly changes in federal, state, and local orders and regulations are significantly impacting the construction industry.  This blog provides an overview of practical issues to consider related to your California construction projects in light of the ever-changing landscape.
Continue Reading California Construction in the Time of Covid-19

Indemnification clauses appear in nearly every agreement, but they are often overlooked as mere boilerplate provisions after the parties have painstakingly negotiated all of the other terms. It is not uncommon for parties to simply re-use the indemnity language from a prior agreement without considering whether it is a good fit for their current project. This can be a big mistake that may lead to ambiguities and uncertainties if a dispute arises down the road. A standard or canned indemnification clause might work to undo all of the effort that has gone into properly allocating risk. These clauses often contain
Continue Reading Last, but NOT Least: Why You Should Take a Closer Look at Your Next Indemnification Clause

In its 84-year history, the National Labor Relations Board (NLRB, Board or Agency) has promulgated a very small number of rules pursuant to the Administrative Procedures Act, relying, instead, on individualized adjudications to establish the Board’s legislative policies. However, breaking with that long tradition, the current Board now appears to be on the verge of a formal rulemaking jag for on May 22, the Board released its “Unified Agenda” of anticipated regulatory actions which, in addition to proceeding with rulemaking regarding joint employer standards, announced the Board’s intention to consider formal rulemaking in a number of critical areas. Consistent with
Continue Reading Breaking with Tradition, The Current NLRB is on a Rulemaking Tear: Election Procedures, Recognition Bar, and 9(a) Collective Bargaining Relationships

It is unlawful for unions to secondarily picket construction sites or to coercively enmesh neutral parties in the disputes that a union may have with another employer.  This area of the law is governed by the National Labor Relations Act (“NLRA”), the federal law that regulates union-management relations and the National Labor Relations Board (“NLRB”), the federal administrative agency that is tasked with enforcing the NLRA.  But NLRB decisions issued during the Obama administration have allowed a union to secondarily demonstrate at job sites and to publicize their beefs over the use of non-union contractors there, provided the union does
Continue Reading Labor Development Impacting Developers, Contractors, and Landowners

A recent California case may force engineering, procurement and construction companies doing business with foreign suppliers to reconsider—and maybe rewrite—their contracts. In Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd., the California Court of Appeal held that parties may not contract around the formal service requirements of the Convention on the Service Abroad of Judicial and Extrajudicial Documents, commonly referred to as the Hague Service Convention. The decision could have profound implications for international business.
Continue Reading EPC Contractors Procuring from Foreign Companies need to Reconsider their Contracts

On May 14, 2018, the California Supreme Court issued its opinion in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co., No. S231549, slip. op. (Cal. Sup. Ct. May 14, 2018). In it, the Court narrowly construed the “good faith” exception to the general rule that a direct contractor must make retention payments to its subcontractors within 10 days of receiving any retention payment. The exception provides that “[i]f a good faith dispute exists between the direct contractor and a subcontractor, the direct contractor may withhold from the retention to the subcontractor an amount not in excess of
Continue Reading It’s All a Matter of [Statutory] Construction: Supreme Court Narrowly Interprets the Good Faith Dispute Exception to Prompt Payment Requirements in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co.

It is industry standard in California for owners of a construction project to make monthly payments to a contractor for work it has completed, less a certain percentage that is withheld as a guarantee of future satisfactory performance. This withholding is called a retention. Contractors generally pass these withholdings on to their subcontractors via a retention clause in the subcontract. Under such clause, if a subcontractor fails to complete its work or correct deficiencies in its work, the owner and the general contractor may use the retention to bring the subcontractor’s work into conformance with the requirements of the contract.
Continue Reading “Good Faith” May Not Be Good Enough: California Supreme Court to Decide When General Contractors Can Withhold Retention

As of January 1, 2018, direct contractors in California who make or take a contract “for the erection, construction, alteration, or repair of a building, structure, or other private work” are jointly and severally liable with their subcontractors for any unpaid wages, fringe benefits and other benefit payments or contributions owed to wage claimants. Governor Brown approved AB 1701 on October 14, 2017. The new law puts the onus on direct contractors to not only monitor their own payroll practices, but to ensure that their subcontractors and lower tier subcontractors are engaging in proper payroll practices.
Continue Reading Direct Contractors In California Should Take Steps Now To Reduce Exposure For Unpaid Wages By Subcontractors