NEWS

This week has seen a few notable updates in the ongoing dispute regarding insurance coverage for business interruption resulting from COVID-19-related business closures, as federal and state appellate courts finally have had the opportunity to weigh in on these arguments.

On September 29, 2020 in Iowa, United States District Judge Charles R. Wolle granted with prejudice an insurer’s Motion to Dismiss an oral surgery clinic’s declaratory judgment action seeking coverage for business interruption. Oral Surgeons, P.C. v. Cincinnati Ins. Co., 491 F. Supp. 3d 455 (S.D. Iowa 2020). The plaintiff claimed its losses resulted from government orders restricting performance of “non-emergency dental procedures.” The insurer emphasized that purely economic loss is not covered; rather, the policy requires physical loss to trigger coverage.

This Clean Water Act (CWA) case arose from the 2007 disposal of fill from Defendants’ property (containing purported wetlands) allegedly into “waters of the United States.”  United States v. Acquest Transit LLC, No. 09-CV-55S, 2021 WL 809984, at *13 (W.D.N.Y. Mar. 3, 2021).  The underlying issue is whether that property contained wetlands that are part of “waters of the United States” to be governed by the CWA.  The CWA applies to “navigable waters” which, in turn, are defined as the “waters of the United States,” 33 U.S.C. § 1362(7).

On February 1, 2021, FINRA published the 2021 Report on FINRA’s Examination and Risk Monitoring Program (“2021 Report”). Annually, FINRA publishes the Report on its Examination and Risk Monitoring Program in order to provide member firms with information they can use to assess and strengthen their compliance, supervisory, and risk management programs. The Report summarizes noteworthy findings from recent examinations, outlines effective practices that FINRA observed during its oversight, and provides additional resources that may be helpful to member firms in fulfilling their compliance obligations.

In D’Allessandro v. Lennar Hingham Holdings, LLC, 2020 WL 6438937 (Mass. Nov. 3, 2020), the Massachusetts Supreme Judicial Court held the statute of repose governing the claims for design and construction defects for a multi-building condominium project began to run when each building was opened for its intended use or was substantially completed, not when the first building was complete. The condominium in question consisted of twenty-eight (28) buildings built in twenty-four (24) phases between 2008 and 2015. Each building was issued a Certificate of Occupancy when the architect determined the building or units were “substantially complete.”

In Kanza Constr., Inc. v. Kansas City S. Railways Co., the Mississippi Court of Appeals analyzed whether the circuit court properly granted partial summary judgment when it found, as a matter of law, that a construction company was not entitled to acceleration damages on the contract it breached. 2021 WL 670993 (Miss. Ct. App. Feb. 22, 2021).

In response to a directive from President Biden, the U.S. Department of Labor (“DOL”) has issued guidance to state unemployment insurance agencies that expands the number of instances in which workers can be eligible for Pandemic Unemployment Assistance (“PUA”). PUA is a federally funded unemployment expansion that was adopted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide unemployment benefits for certain individuals not otherwise entitled to state benefits and unemployed for COVID-19-related reasons.  The new DOL guidance reflects the Biden administration’s pledge to “ensure that unemployed Americans no longer have to choose between paying their bills and keeping themselves and their families safe from COVID-19.”

Dan Pickett successfully defended AIDS Alabama, a local non-profit organization, at trial against Plaintiff’s worker’s compensation claim.  Plaintiff had undergone a multilevel back fusion and been assigned a 15% whole person impairment rating by her physician.  During the trial, Plaintiff claimed she was 100% permanently and totally disabled.  Dan cross examined Plaintiff and presented evidence that she was not permanently and totally disabled.  Following the trial, the Court found that Plaintiff only had a 25% vocational impairment.  Dan’s efforts were successful in substantially minimizing Plaintiff’s recovery in this case.

The Eleventh Circuit continues to dismiss suits brought by business owners seeking coverage for losses caused by COVID-19. But policyholders in other jurisdictions have achieved some notable wins so far in 2021. While “success” often means a policyholder merely survived dismissal on the pleadings, some courts have ruled in favor of policyholders in later stages of litigation.

In Paschen v. B&B Site Development, Inc., the parties to a subcontract disagreed over the scope of work required for the project. 2021 WL 359487 (Fla. App. Ct. 2021). Plaintiff F.H. Paschen, S.N. Nielson & Associates (“Paschen”) worked as the general contractor for the United States Postal Service to perform construction work at a post office in Okeechobee, Florida. Paschen’s contract with the Postal Service required it to “verify all dimensions shown of existing work” and to report any discrepancies prior to submitting a price proposal.

On January 6, 2021, the US Department of Labor (“DOL”) announced its final rule clarifying the standard for employee versus independent contractor under the Fair Labor Standards Act (“FLSA”). The effective date of the final rule is March 8, 2021.The purpose of the new rule is to provide clarity to workers and employers by making it easier to identify employees covered by the FLSA. The new rule replaces the previously used seven-factor economic realities test that the DOL and most Courts have used when analyzing a work relationship to determine independent contractor versus employee status.

Plaintiffs in Melton Properties, et al. v. Illinois Central Railroad, 2020 WL 7335018 (N.D. Miss.) recently argued the Supreme Court’s decision in County of Maui v. Hawaii Wildlife Fund, 140 S. Ct. 1462 (2020), overrules the 5th Circuit’s precedent in Hamker v. Diamond, 756 F.2d 392 (5th Cir. 1995). Plaintiffs are property owners or farmers near the site of a train derailment that caused a toxic spill.  On application for rehearing, Plaintiffs asked the Court to reinstate their previously dismissed claims.

FINRA recently issued Regulatory Notice 21-03 providing information to help FINRA member firms that engage in low-priced securities business assess and, as appropriate, strengthen their controls to identify and mitigate their risk, and the risk to their customers, including specified adults and seniors, of becoming involved in activities related to fraud involving low-priced securities.  FINRA issued this guidance because it has observed potential misrepresentations about low-priced securities issuers’ involvement with COVID-19 related products or services, such as vaccines, test kits, personal protective equipment, and hand sanitizers.

In Wright Construction Services, Inc.v. The Hard Art Studio, PLLC, 2020 WL 7906704 (N.C. App. Dec. 31, 2020), a North Carolina appellate court held that the “licensure defense,” which prevents a builder that is unlicensed at the start of a project from recovering in a breach of contract claim, does not apply to negligence claims against design professionals, and is limited only to a builder’s breach of contract claims against owners.

In Rochester Endoscopy and Surgery Center, LLC and Jaro Company, LLC v. DesRosiers Architects, PC, 2020 WL 6231823 (Mich. App. October 22, 2020), the Court of Appeals of Michigan granted Defendants’ Motion to Dismiss the professional negligence claims against the architect. The Rochester Plaintiffs purchased a unit in a condominium, which they intended to convert to a surgical outpatient facility. Plaintiffs hired OYK Engineering & Construction (“OYK”) to serve as the Design-Builder for the project. OYK subcontracted with Desrosiers Architects, PC, (“Desrosiers”) to provide design and architectural services.

The U.S. Supreme Court has agreed to hear litigation concerning which section of the law, and their different statutes of limitations, parties must use when seeking to recoup Superfund cleanup costs.  The case, Guam v. United States, Case No. 20-382, is slated to be heard in the Court’s upcoming term.

FINRA’s Board of Governors met on December 2-3, 2020, to review FINRA’s 2020 financial performance, approve the organization’s 2021 proposed budget, reaffirm FINRA’s Financial Guiding Principles, approve rule proposals, and receive several operational updates.

The Board approved two rule proposals to be filed with the Securities and Exchange Commission (SEC), directing impacting our clients. As customary, the proposed rules will be published for public comment within the year and must be approved by the SEC before becoming effective.

In Hayward Baker, Inc. v. Westfield Ins. Co., the Florida District Court of Appeal, Second District, reversed a lower court’s order denying a subcontractor’s motion for attorneys’ fees under Florida Statutes, Section 713.29.  2020 WL 7767859, at *1 (Fla. Dist. Ct. App. Dec. 30, 2020). The underlying case stemmed from construction of an addition to University Community Hospital in Carrollwood, Florida.

The Food and Drug Administration (“FDA”) recently issued emergency use authorizations for COVID-19 vaccines. As the vaccines become widely available, more employers will consider whether to mandate vaccinations for employees. While generally employers may mandate vaccinations, there are some additional considerations with the COVID-19 vaccine.

A key consideration is the Americans with Disabilities Act (“ADA”), which generally requires that a disability-related inquiry or medical examination of an employee be job related, consistent with business necessity, and no more intrusive than necessary. With the COVID-19 pandemic continuing to spread, the direct threat COVID-19 poses to the workplace may be sufficient to meet the ADA’s requirement. Many healthcare employers require employees to receive the influenza vaccine and have successfully demonstrated that the inquiries related to the flu vaccine are job related and consistent with business necessity.

On October 21, 2020, the Southern District of Alabama issued its first opinion addressing a COVID-19-related claim for lost income under the “business interruption” provision of an “all-risk” policy. Hillcrest Optical, Inc. v. Cont’l Cas. Co., No. 1:20-CV-275-JB-B, 2020 WL 6163142 (S.D. Ala. Oct. 21, 2020). After the plaintiff closed its business in compliance with Governor Ivey’s “stay-at-home” order, it filed a claim with its insurer for lost income, alleging a direct physical loss from the loss of use of its office. The plaintiff’s policy contains a provision covering “direct physical loss of or damage to” the plaintiff’s business. It does not, however, define what constitutes “direct physical loss or damage.” The policy also contains a “Business Income and Extra Expense” endorsement providing coverage for lost income from a necessary suspension of operations during a “period of restoration” caused by a covered direct physical loss to property. This provision covers expenses reasonably and necessarily incurred because of direct physical loss or damage but excludes periods of restoration extended by regulations governing the use of the covered property. It expressly contemplates physical repair to or rebuilding of the property.

The U.S. Environmental Protection Agency (EPA) has issued a Draft Guidance Memorandum following the recent U.S. Supreme Court decision in County of Maui v. Hawaii Wildlife Fund.  139 S.Ct. 1164 (2019).  This Guidance Memo attempts to give regulators and source owners additional clarity as to when the functional equivalent test should be applied. 

On November 2, 2020, the SEC adopted amendments to “simplify, harmonize, and improve certain aspects of the exempt offering framework” under the Securities Act of 1933. The amendments are intended to meet evolving market needs by providing, among other changes, all of the following: greater clarity around the SEC’s integration doctrine that can pose challenges for companies with ongoing or recurring financial needs to permit concurrent private and public offerings; increased efficiency of the private capital raising process by increasing the ceiling on the amount of funds that can be raised under Regulation A, Regulation Crowdfunding, and Rule 504 of Regulation D offerings; clear and consistent rules governing certain offering communications, including permitting certain “test-the-waters” and “demo day” communications; and aligned financial disclosure requirements for Rule 506(b) offerings to non-accredited investors with the requirements under Regulation A.

In Bristol Southside Association, Inc. v. Meridian Construction & Development, LLC, the United States District Court for the Northern District of Alabama denied the Defendant’s Motion for Summary Judgment, which it supported by arguing the Plaintiff’s claims were barred under Alabama’s statute of repose. 2020 WL 6712270.

Throughout the past few months, COVID-19 cases have continued to rise causing several areas of concern for employers across the nation. On November 18, 2020, the California Division of Occupational Safety and Health (“Cal OSHA”) proposed emergency regulations containing new workplace protocols that provide employers with more comprehensive guidelines to adequately enforce or modify existing safety rules regarding COVID-19. These regulations can be found at California Code of Regulations (CCR), Sections 3205, 3205.1, 3205.2, 3205.3 and 3205.4.

In Hinman v. ValleyCrest Landscape, Inc. and Aquatic Design & Engineering, Inc., No. 3:19-cv-551, 2020 WL 434161 (M.D. Tenn. Jan. 28, 2020), the United States District Court for the Middle District of Tennessee granted Defendants’ Motion to Dismiss the fraud claims alleged against the engineer for lack of specificity in the pleading. 

FINRA recently adopted Rule 3241, limiting registered representatives from being named a customer’s beneficiary or holding a position of trust for a customer. The rule limits a registered representative from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust for or on behalf of a client, unless specifically approved by the broker dealer prior to accepting the position of trust. The rule does not apply, however, where the customer is a member of the registered person’s immediate family.

Across the nation, COVID-19 cases continue to rise and so have COVID-related complaints to the Occupational Safety and Health Administration (“OSHA”). OSHA has initiated over 1,000 investigations related to COVID, and as of October 22, 2020, OSHA had issued just under 150 COVID-related citations. OSHA has not developed standards specific to COVID-related concerns. Instead, it is applying existing OSHA standards.

In Liberty Constr. Co., LLC v. Curry, the Tennessee Court of Appeals, Nashville Division, reversed a lower court’s holding that the owners of a commercial building failed to provide a construction company with notice and a reasonable opportunity to cure a defect it allegedly caused. 2020 WL 6158461, at *1 (Tenn. Ct. App. Oct. 21, 2020).

In Town of West Seneca v. Kideney Architects, P.C., 2020 WL 5867490 (N.Y. App. Oct 2, 2020), a New York appellate court held a project owner’s claim against the architect accrued, and the statute of limitations began, upon completion of the project, rather than discovery of the damage.  Town of West Seneca, the project owner, contracted with an engineering firm for professional services on the project.  The engineering firm then contracted with Kideney Architects (“Kideney”) for architectural services.  The project was certified as substantially complete in 2002.

The Middle District Court of Florida in Urogynecology Specialist of Florida, LLC, v. Sentinel Insurance Company, LTD., 2020 WL 5939172 (M.D. Fla. 2020) broke from many other cases in Florida and elsewhere in denying an insurer’s motion to dismiss a COVID-19 business loss claim on the grounds of a virus exclusion in the policy.  The court held that the virus exclusion included in an all-risk insurance policy was “arguably ambiguous” as applied to the forced shutdown, which made a coverage determination inappropriate on a motion to dismiss.  The policy, which provided coverage for “physical loss of or physical damage to Covered Property” also covered loss of business income due to necessary suspension of operations.  The policy’s coverage was extended to pay for losses to the business’s accounts receivable.

In Optum Construction Group, LLC et al. v. City Electric Supply Company, 2020 WL 5792581 (Ga. App. 2020), appellee City Electric Supply Company (“City Electric”) furnished materials to Palmetto Power Services, LLC (“Palmetto Services”), an entity that represented itself as a subcontractor for a hotel construction project on which appellant Optum Construction Group, LLC (“Optum”) was the general contractor. After Palmetto Services failed to pay City Electric for the materials, City Electric sued Palmetto Services and filed a materialman's lien on the hotel and real estate (“the Property”) on which it was constructed. Optum and its surety, Fidelity and Deposit Company of Maryland (“Fidelity”), discharged the lien by filing a bond.

Plaintiffs continue to struggle in compliance with Certificate of Merit requirements in Texas. In TRW Engineers, Inc. v. Hussion Street Buildings, LLC, 2020 WL 4457975 (Tex. Ct. App. August 4, 2020), the Texas Court of Appeals held that an engineer’s deposition testimony, which was read into the record by the plaintiff, did not obviate the need for compliance with the certificate-of-merit requirement found in Tex. Civ. Prac. & Rem. Code § 150.002, and accordingly dismissed plaintiff’s unsupported petition.

In 2019, FINRA launched a retrospective review to assess the effectiveness and efficiency of its rules and administrative processes meant to help protect senior investors from financial exploitation.  Based on feedback received during the review, FINRA is now proposing amendments to Rule 2165 regarding financial exploitation of specific adults to extend the hold period and allow temporary holds on transactions.

The United States District Court for the D.C. Circuit has denied an environmental advocacy group’s motion to reconsider the Court’s 2018 ruling giving Environmental Protection Agency’s (EPA) discretion as to how to establish a new “total maximum daily load” (“TMDL”) for trash in the Anacostia River.  Plaintiff Natural Resources Defense Council (“NRDC”) argued little progress had been made since the Court’s 2018 ruling and that EPA should be required to establish a TMDL within one year.

FINRA recently issued Regulatory Notice 20-30 “Fraudsters Using Registered Representatives Names to Establish Imposter Websites.” The Notice warns of individuals maliciously using publicly available information regarding registered representatives in order to create “imposter websites” exhibited as the registered representative’s personal website. Through these “imposter websites,” individuals are able to collect personal information from potential customers with the likely goal of committing financial fraud.

The National Labor Relations Board (“NLRB”) recently addressed the issue of COVID-19 for the first time since the pandemic. The NLRB issued a series of advice memoranda instructing its regional offices to dismiss various COVID-19 related charges against employers.

In 22 Gramercy Park, LLC v. Michael Haverland Architect, P.C., 2020 WL 4141384 (N.Y. Cty. Sup. Ct. July 20, 2020), a New York court held an architect that was sued for design defects could not seek common law indemnification from an engineer, but could seek contribution.

In Ex parte Kohler Company, Inc., 29 ALW 4-4 (2190081); 1/17/2020, the Employer, Kohler Company, Inc., (“Kohler Company”) petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to vacate its Order denying Kohler’s Motion to Vacate the Order granting the employee’s motion to provide a second opinion doctor.  The Alabama Supreme Court denied Kohler’s writ of mandamus.

Businesses continue to grapple with the realities of working during the COVID-19 pandemic and the quickly evolving legal landscape regarding returning employees to work. A number of new lawsuits related to pregnancy discrimination have been recently filed because COVID-19 can present an elevated immune and respiratory risk to pregnant women.

The U.S. District Court for the Northern District of California has dismissed a Clean Air Act (CAA) complaint asserting EPA must reassess risks of hazardous pollution sources whenever it requires technological upgrades for them.  Citizens for Pennsylvania's Future et al. v. Wheeler, No. 19-cv-2004, 2020 WL 3481425 (N.D. Cal. June 26, 2020).  In a matter of first impression, the Court rejected the environmental groups' argument that the CAA, 42 U.S.C.A. § 7412(d)(2) requires the agency to reassess hazardous air pollution risks within eight years of any revision of emissions standards.

In Edwin Taylor Corp. v. Mortg. Elec. Registration Sys., Inc., the Florida District Court of Appeals, Third District, analyzed whether a subcontractor’s properly perfected claim of a construction lien could relate back to the date the general contractor recorded a notice of commencement that was not signed by the property owner for purposes of determining the priority of competing interests in lien foreclosure action. 2020 WL 3261177 (Fla. Dist. Ct. App. June 17, 2020). The issue was one of first impression for the Court.

For over 40 years, the Securities and Exchange Commission (SEC) has used disgorgement as a common enforcement tool. In securities enforcement matters, disgorgement requires wrongdoers to disgorge ill-gotten profits or commissions. The Ninth Circuit has stated that “disgorgement is designed to deprive a wrongdoer of unjust enrichment, and to deter others from violating securities laws by making violations unprofitable.” See Security and Exchange Commission v. JT Wallenbrock & Associates., 440 F.3d 1109, 1113 (9th Cir. 2006).

On May 6, 2020, the Alabama Secretary of Labor, Fitzgerald Washington, determined, pursuant to Alabama Code Section 25-5-68(c), that the State of Alabama’s average weekly wage for 2019 was $920.07. Based on this determination, Steve Garrett, Director of the Alabama Department of Labor Workers’ Compensation Division, issued a memorandum on May 11, 2020 stating the maximum workers’ compensation payable to injured workers is increased to $920.00 per week and the minimum is increased to $253.00 per week. The new rates take effect July 1, 2020, and apply to injuries occurring on or after that date. 

The 9th Circuit U.S. Court of Appeals has affirmed the right of state and local governments to sue Volkswagen over tampering with emissions devices on their vehicles after they were sold.  The decision reverses the lower court’s dismissal of the claims and opens the door for more litigation.  In re Volkswagen "Clean Diesel" Mktg., Sales Practices, & Prod. Liab. Litig., No. 18-15937, 2020 WL 2832121 (9th Cir. June 1, 2020).

In Whitaker v. R2M Engineering, LLC, 2020 WL 2786941 (Tex. Ct. App, May 28, 2020), the Texas Court of Appeals held that plaintiff’s alleged damages arose out of the provision of professional services by a licensed or registered professional, triggering the Certificate of Merit requirements.

In Decks N Such Marine, Inc. v. Daake, the District Court of Appeal of Florida, First District, considered whether a trial court’s award of attorney’s fees to a junior interest holder in a construction lien enforcement action was proper under Section 713.29, Florida Statutes (2018). 2020 WL 2507500 (Fla. 1st Dist. Ct. App. 2020). The Appellate Court found that junior interest holders are not entitled to attorney’s fees as the prevailing party in an action brought to enforce a construction lien.

On February 7, 2020, FINRA filed with the SEC a proposed rule change to amend FINRA’s Code of Arbitration Procedure for Customer Disputes and Code of Arbitration Procedure for Industry Disputes to apply minimum fees to requests for expungement of customer dispute information.  The SEC recently approved this proposed rule change in an order dated May 26, 2020, which was published in the Federal Register on June 1, 2020. 

On June 15, 2020, the United States Supreme Court ruled that Title VII of the Civil Rights Act of 1964 (“Title VII”) protects gay, lesbian and transgender persons in their employment. Prior to the Supreme Court’s ruling, the law had no specific protection for sexual orientation or gender identity. The Court’s decision has resolved a conflict among several federal circuits as to whether Title VII prohibits employment discrimination on the basis of sexual orientation and gender identity.

In Baker v. Rabren General Contractors, Inc., 2020 WL 12145326 (M.D. Ala. 2020), the United States District Court for the Middle District of Alabama analyzed whether an arbitration provision in an unsigned subcontract was enforceable. Defendant Rabren General Contractors, Inc. (“Rabren”) filed a Motion to Compel Arbitration in the suit brought against it by Plaintiff Charles Baker (“Baker”), pursuant to an arbitration provision in an unexecuted written contract drafted by Rabren. The subcontract purported to be for concrete work by Baker on a construction project Rabren had been awarded to build a new high school in Auburn, Alabama (the “Auburn Project”).

The Equal Employment Opportunity Commission (“EEOC”) has clarified a question that has been playing on the minds of employees and employers alike: during the COVID-19 pandemic, how does the ADA apply to workers who do not want to return to the workplace because they are “high risk?”  If an employee, who has a medical condition identified by the Center for Disease Control (“CDC”) that puts him or her at greater risk of severe illness from COVID-19 infection, requests a reasonable accommodation, the employer should provide the reasonable accommodation. If the employee does not request a reasonable accommodation, the ADA does not require that the employer take action.

In Management & Consulting, Inc. v. Tech Electric, Inc., the District Court of Appeal of Florida, Third District, reviewed a lower court’s denial of a motion for discharge of a mechanic’s lien. 2020 WL 1540958 (Fla. 3d Dist. Ct. App. 2020). The Appellate Court found a subcontractor failed to comply with the requirements of section 713.21(4), Florida Statutes, when it asserted the validity of its mechanic’s lien, but failed to show good cause as to why its lien had not been enforced or file a foreclosure suit within the statutory timeframe.

In Preyde One, LLC v. Hoffman Consultants, LLC, 2020 WL 908943 (Mich. App. Feb. 25, 2020), a Michigan appellate court ruled that a project owner's claim against a structural engineer was a malpractice claim, governed by the malpractice statute of limitations and untimely. Preyde One, LLC ("Owner") sued Glasers Lumber ("Glasers") for breach of contract for allegedly providing defective work and materials on the construction of a hotel. Glasers identified Hoffman Consultants, LLC ("Hoffman"), the structural engineer for the hotel, as a responsible non-party and Owner filed a Second Amended Complaint against Hoffman, alleging Hoffman negligently prepared the drawings and specifications and negligently inspected and supervised the structural work.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which is a $2 trillion relief package aimed to help diminish the economic impact of the COVID-19 pandemic. The Act includes certain provisions particularly relevant to employers.

The United States Court of Appeals for the D.C. Circuit has ruled EPA acted improperly when it suspended restrictions on the use of hydrofluorocarbons (HFCs) to replace ozone-depleting substances (ODSs).  Natural Resources Defense Council v. Wheeler, No. 18:1172 (D.C. Cir. April 2020).  EPA did this without going through notice-and-comment procedures, which is what the Natural Resources Defense Council challenged and won.

FINRA amended its Code of Arbitration Procedure for Customer Disputes (Customer Code) to expand the options available to customer claimants dealing with “inactive members”—those firms or individuals whose FINRA registration has been terminated, suspended, canceled, or revoked, or who have been expelled or barred from FINRA.  FINRA has amended the Customer Code to further the routes available to customers in situations where a firm becomes inactive during a pending arbitration or where an associated person becomes inactive either before a claim is filed or during a pending arbitration. 

In Mississippi State Board of Contractors v. Hobbs Construction, LLC, the Supreme Court of Mississippi analyzed whether the Mississippi State Board of Contractors (“the Board”) deprived Hobbs Construction, LLC (“Hobbs”) of its procedural right to due process. 2020 WL 1081410 (Miss. 2020).

The United States Court of Appeals for the Fourth Circuit has affirmed a District Court order remanding to state court a suit filed by the City of Baltimore seeking to hold oil companies accountable for climate change.  In 2018, the Mayor and City Council of Baltimore filed suit against major oil companies in state court. The complaint alleged that the oil companies contributed to climate change by extracting, producing, promoting and selling fossil fuels, while deceiving the public about the known harms of fossil fuel products. Baltimore brought eight state law claims against the oil company, including nuisance and trespass.

In Gannett Fleming, Inc. v. Corman Construction, Inc., 2019 WL 6207616 (Md. App. Nov. 21, 2019), the Maryland Court of Special Appeals held that an arbitration provision contained in a subsequent agreement may still apply to work performed under a prior agreement that did not contain a similar arbitration provision.

In June 2019, the SEC adopted Regulation Best Interest. The Regulation requires broker-dealers (and natural persons associated with broker-dealers) to act in the best interest of their retail customers in making a recommendation of any securities transaction or investment strategy involving securities. Since the rule’s promulgation, there have been several questions relating to compliance with Regulation Best Interest. Accordingly, within the past few months, and as recent as February 2020, the U.S. Securities and Exchange Commission (SEC) Division of Trading and Markets released answers to Frequently Asked Questions (FAQs) relating to compliance with Regulation Best Interest.

Both the Occupational Safety and Health Administration (“OSHA”) and the Center for Disease Control and Prevention (“CDC”) published guidance for employers on planning for and protecting their workplaces from exposure to and infection from COVID-19, or coronavirus.

On January 16, 2020, the U.S. Department of Labor published in the Federal Register the Final Rule regarding joint employer status under the Fair Labor Standards Act (“FLSA”). These changes to the rule are the first meaningful revisions to the regulations in more than 60 years.

On January 23, 2020, the EPA and the U.S. Army Corps of Engineers released the Navigable Waters Protection Rule (NWPR) which redefines “waters of the United States” (WOTUS). This new rule adopts a more limited definition of WOTUS that are subject to the Clean Water Act.  The NWPR defines WOTUS to include only four categories of waters: (1)  territorial seas and waters which are currently used, or were used in the past, or may be susceptible to use in interstate or foreign commerce, including waters which are subject to the ebb and flow of the tide; (2) tributaries; (3) lakes and ponds, and impoundments of jurisdictional waters; and (4) adjacent wetlands. The NWPR confirms that groundwater is not subject to regulation under the Clean Water Act, which means water features connected only by groundwater are also not subject to regulation.

In WSA Group, PE.,PC v. DKI Engineering & Consulting USA PC, 2019 WL 7173322 (N.Y. App. Dec. 26, 2019), a New York appellate court held that the statute of limitations governing malpractice claims against architects and engineers in New York begins to accrue when the contract is complete and the professional relationship ends, rather than when the plaintiff incurs damages.

FINRA released its 2020 Risk Monitoring and Examination Priorities Letter.  The Letter addresses emerging priorities for FINRA’s risk monitoring, surveillance, and examination programs in the coming year.

On October 4, 2019, the Alabama Court of Civil Appeals released AMEC Foster Wheeler Kamtech, Inc. v. Chandler, -- So. 3d --, 2019 WL 4894327 (Ala. Civ. App. 2019), which found the employer, Defendant AMEC Foster Wheeler Kamtech, Inc., failed to prove the employee, Plaintiff Jimmy Chandler, returned to work making the same or greater average weekly wage (“AWW”) and that Ala. Code § 25-5-57(a)(3)i (the “return-to-work” statute) did not apply to prevent the trial court from awarding damages based on Plaintiff’s vocational impairment.

In Couvillion Group, LLC v. Plaquemines Parish Government, 2019 WL 6769614 (La. App. Dec. 11, 2019), Plaquemines Parish Government (“PPG”) contracted with Couvillion Group, LLC (“Couvillion”) to be the general contractor for the Project. PPG contracted with Professional Engineering Consultants Corporation (“PEC”) to provide engineering services for the project.

The National Labor Relations Board (“NLRB”) ruled that an employer may now require confidentiality from employees involved in open workplace investigations.  This resolves a conflict between the NLRB and the Equal Employment Opportunity Commission (“EEOC”) and provides clarity for employers.

A federal district court in Ohio has endorsed the “constructive submission” doctrine as a way to require the EPA to set standards for polluted bodies of water when states neglect or refuse to set those standards. Environmental Law & Policy Center v. EPA, Docket No. 3:19-cv-00295 (November 13, 2019, N.D. Ohio). The Clean Water Act citizens suit, which was filed by two environmental groups, asks EPA to require Ohio’s EPA to adopt a legally sufficient and adequate Total Maximum Daily Load (TMDL) for western Lake Erie.

In Goudy Construction, Inc. v. Raks Fire Sprinkler LLC, Plaintiff Goudy Construction, Inc. (“Goudy”) served as the general contractor for a project for which Defendant Raks Fire Sprinkler LLC (“Raks”) submitted a bid to install a fire sprinkler system. 2019 WL 6841067 (N.D. Ala. 2019). Goudy accepted Raks’ bid and entered into a contractual agreement that required Raks to provide commercial liability insurance for the duration of the Project and was also required to provide a performance bond with Goudy as the owner. Raks complied with these requirements, purchasing the performance bond from Defendant Aegest Security Insurance Company (“Aegest”).

The FINRA Board of Governors met on December 4-5, 2019 to discuss the organization’s 2020 proposed budget, reaffirm its Financial Guiding Principles, discuss several operational updates, and approve two rule proposals.

Of noted importance to our clients, the Board approved two rule proposals to be filed with the Securities and Exchange Commission (SEC). Both proposed rules will be published for public comment within the year and must be approved by the SEC before becoming effective.

In Grace and Naeem Uddin, Inc. v. Singer Architects, Inc., 278 So. 3d 89 (Fla. 4th DCA 2019), Florida’s Fourth District Court of Appeals held an architect had sufficient supervisory control over a contractor to establish a duty of care.  Broward County (the “County”) hired Grace and Naeem Uddin, Inc. (“GNU”), a general contractor, for an improvement project at the Fort Lauderdale Airport (the “Project”). The County hired Singer Architects, Inc. (“Singer”) to provide consulting and administrative services for the Project.

The United States District Court for the District of Massachusetts has ruled pollution from a Cape Cod resort that travels through groundwater into the Atlantic Ocean is not subject to Clean Water Act permitting requirements.  Conservation Law Foundation v. Longwood Venues & Destinations, Inc., No. 1:18-cv-11821 (November 26, 2019, D. Mass.).  The Complaint alleges treated wastewater seeps through the groundwater into Wychmere Harbor from a wastewater treatment facility at the Massachusetts Wychmere Beach Club on Cape Cod.  The Massachusetts Department of Environmental Protection found that the discharges were partially responsible for excessive nitrogen in the harbor.

FINRA is seeking comments on a new rule proposal that would limit any registered person of a broker-dealer from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust, for or on behalf of a customer.  FINRA believes being a customer’s beneficiary or holding a position of trust may present significant conflicts of interest and hopes the proposed rule would help further address misconduct in this area.

The Middle District of Florida held that a client-owner was not unjustly enriched despite a subcontractor’s belief that the client-owner was undercharged by the general contractor. In Commercial Repairs and Sales, LLC v. Signet Jewelers Limited, Plaintiff Commercial Repairs and Sales, LLC (“CRS”) provided construction improvement and facility management. Defendant Signet Jewelers Limited (“Signet”) is a jewelry conglomerate with retail locations around the world.

After a recent Eleventh Circuit decision in Lewis v. Governor of Alabama 896 F.3d 1282 (11th Cir. 2018), the Eleventh Circuit Court of Appeals agreed to a full-court review to decide the validity of a 2016 Alabama Law prohibiting cities or other local municipalities from adopting their own laws concerning minimum wages. The law was originally enacted in response to an ordinance by the Birmingham City Council that increased the minimum wage for all employees within the Birmingham City’s boundaries from the current federal minimum of $7.25 to $10.10.  The day after this ordinance was enacted to increase the minimum wage, the Alabama Legislature enacted and the Governor signed the Alabama Minimum Wage Act, voiding Birmingham’s wage increase after one day of operation.

The United States Supreme Court heard oral arguments on November 6, 2019, in Hawai’i Wildlife Fund v. County of Maui, a groundwater case that challenges the scope of the Clean Water Act (“CWA”).  831 F.3d 754 (9th Cir. 2018).  The Ninth Circuit previously held that where a point source discharge to groundwater is fairly traceable to a navigable water, it falls within the jurisdiction of the Act.

In Rankin v. South Street Downtown Holdings, Inc., 2019 WL 3562167 (N.H. Aug. 6, 2019), the New Hampshire Supreme Court addressed whether the state’s Statute of Repose applied to indemnity and contribution claims against architects, or only applied to claims for direct losses.  The Court found the statute did apply and imposes a time limit on indemnity claims against architects.

On October 16, 2019, FINRA published its 2019 Report on Examination Findings and Observations (“The Report”). The Report essentially details observations from recent examinations of broker-dealer firms. In the past, broker-dealer firms have used these reports to anticipate potential areas of concern and improve their procedures and controls accordingly.

In E Solutions for Buildings, LLC v. Knestrick Contractor, Inc., et al., appellant E Solutions for Buildings, LLC (“E Solutions”) challenged the trial court’s award as it related to a subcontractor’s payments owed to E Solutions. 2019 WL 5607473 (Tenn. Ct. App. 2019). The case stemmed from the construction of the Centennial Sportsplex Indoor Fitness Expansion Building (the “Sportsplex”) by the Metropolitan Government of Nashville and Davidson County (“Metro”). Metro entered into a contract with Knestrick Contractor, Inc. (“Knestrick”) for the construction of the Sportsplex (the “Contract”). Under the Contract, Knestrick was obligated to accomplish substantial completion of the project by December 2, 2013.

On November 8, 2019, a unanimous three-judge panel of the Tenth Circuit Court of Appeals issued an opinion in Tesone v. Empire Marketing Strategies holding that employees who sue their employers for violations of the Americans with Disabilities Act (“ADA”) do not necessarily need to submit expert medical testimony to establish they have a disability. 

On October 18, 2019, the Alabama Court of Civil Appeals released an opinion holding that Plaintiff Orethaniel Swain’s (“Plaintiff”) outrage, fraud and conspiracy claims against Defendants AIG Claims, Inc., Insurance Company of the State of Pennsylvania, Coventry Health Care Workers’ Compensation, Inc. and Jackie Angeles (“Defendants”), based on the handling of his worker’s compensation claim were not barred by the exclusive remedy provisions of Ala. Code § 25-5-53 and stated a valid claim. Swain v. AIG Claims, Inc., 2019 WL 5284748, at *10 (Ala.Civ.App. 2019).

The Maui County Council has voted to settle a Ninth Circuit U.S. Court of Appeals Clean Water Act (“CWA”) case scheduled for oral argument before the United States Supreme Court on November 6, 2019.  County of Maui v. Hawaii Wildlife Fund et al., Case No. 18-260.  The case was one of three pending before the U.S. Supreme Court seeking a determination of whether the CWA’s regulatory power is limited to regulating direct releases from discrete and defined sources into federally protected water or extends to indirect releases via groundwater.

In ALA Construction Services, LLC v. Controlled Access, Inc., ALA Construction Services, LLC (“ALA Construction”) hired subcontractor Controlled Access, LLC (“Controlled Access”) to provide equipment and related services for the construction of townhomes. 2019 WL 4463305 (Ga. App. Ct. 2019). Pursuant to their written contract, Controlled Access signed two documents entitled “Interim Waiver and Release Upon Payment”, which required it to file an affidavit of nonpayment or a claim of lien within a 60 day period or else the amount due to it by ALA Construction would be considered paid in full. ALA Construction failed to pay the agreed upon amount, but Controlled Access did not file an affidavit within the required time period.

In Demetro v. Dormitory Authority of the State of New York, 170 A.D. 3d 437 (N.Y. 2019), a New York Appellate Court addressed whether an architect’s failure to identify deviations from its designs subjected the architect to liability for personal injuries as a result of the defective condition. On a Motion for Summary Judgment, the Court found there was a genuine issue of material fact regarding whether a contractor’s deviation from the design, and subsequent failure to correct deviation, was an intervening and superseding cause which relieved the architect from liability.

On September 24, 2019, the Department of Labor released its Final Rule, modifying the Fair Labor Standards Act’s (“FLSA”) overtime regulations. The Final Rule results in fewer employees being exempt, and more employees being eligible for overtime pay. As such, employers should budget to include additional expenditures in overtime for the coming year. 

In recently published Regulatory Notice 19-31, FINRA responded to questions regarding how members can comply with FINRA’s communications rules, Rules 2210 through 2220, when using electronic media.  FINRA issued this guidance to facilitate simplified and more effective disclosure in communications with the public, particularly in the context of members’ marketing and advertising of their products and services using websites, email, social media, search advertisements, mobile applications, and other electronic media.  

FINRA recently issued Regulatory Notice 19-28 addressing member firms’ supervisory responsibilities as it pertains to customer accounts owned by municipal entities. The guidance was issued to clarify misconceptions surrounding the definition of the term “municipal advisors” and to ensure compliance with relevant FINRA and SEC regulations.

The Eleventh Circuit has determined the U.S. Environmental Protection Agency (EPA) does not have to withdraw from a partnership with Alabama that allows the state to issue permits under the Clean Water Act (CWA), even though environmental groups have claimed Alabama’s program has failed to comply with the federal law’s requirements over the years.  Cahaba Riverkeeper et al. v. U.S. Environmental Protection Agency, Case No. 17-11972 (11th Cir.).

In Novum Structures, LLC v. Larson Engineering, Inc., 2019 WL 1924878 (E.D. Wis. April 30, 2019), a Wisconsin District Court addressed whether an engineer’s sealing of design drawings makes the engineer the “Engineer of Record” and establishes a duty to verify the accuracy of the entire design. In 2014, Novum Structures, LLC (“Novum”) was hired to build a glass enclosed atrium. Novum prepared design drawings and supporting calculations for the atrium’s steel structure, but the drawings did not specify the type of welds that would be used to connect trusses to beams.

In Jeanes v. McBride, Plaintiff Janet Jeanes (“Ms. Jeanes”) brought a suit against Defendant Greg McBride (“Mr. McBride”) regarding Mr. McBride’s construction of a building on a plot of land owned by Ms. Jeanes. 2019 WL 2583113 (W.D. La. 2019). Ms. Jeanes told Mr. McBride that she wanted a building for spaces for her horses and living quarters for herself (“the Building”).

The Equal Employment Opportunity Commission (“EEOC”) and the Office of Federal Contract Compliance Programs (“OFCCP”) both provide protections against discrimination on the basis of gender identity.  OFCCP’s frequently asked questions define gender identity as referring to a person’s internal sense of their own gender and that this internal sense may or may not correspond to the sex assigned at birth and may not be visible to others.  Despite these regulations, employers who are required to submit EEO-1 reports face challenges in reflecting gender identity diversity in their workforce because the federal reporting forms reflect a binary gender framework.

FINRA commenced a retrospective review of its rules and administrative processes meant to help protect senior investors from financial exploitation and is now requesting comment on suggested changes to and creation of rules and administrative processes addressing the issue.

In Hayes v. Intermountain GeoEnvironmental Services, Inc., 2019 WL 2621931 (Utah Ct. App. June 27, 2019), the Utah Court of Appeals upheld the economic loss rule, finding a property owners’ tort claims against a geotechnical engineer were barred. In 2004, a developer hired Intermountain GeoEnvironmental Services, Inc. (“IGES”) to conduct a geotechnical investigation for a proposed subdivision. IGES concluded construction could proceed and the developer sold the lots to a third-party, who later sold an individual lot to Kim and Nancy Hayes (the “Hayes”) for construction of a home.

In Construction Services Group, LLC v. MS Electric, LLC, 2019 WL 2710115 (Ala. Civ. App. 2019), the parties entered into an agreement with the Alabama Public School and College Authority. The agreement provided that Construction Services Group, LLC (“Construction Services”) would act as the general contractor on a construction project for additions and alterations to Montevallo Middle School (“the Project”). MS Electric, LLC (“MS Electric”) submitted a bid to perform the electrical work on the Project, which Construction Services accepted.

FINRA recently issued Regulatory Notice 19-23 addressing “extraordinary cooperation” by broker dealers and broker dealer firms.  The Notice highlights FINRA’s hopes to incentivize broker dealers and broker dealer firms to take “proactive and voluntary steps beyond those required under FINRA rules” by crediting such cooperation in FINRA’s regulatory enforcement decisions. The Notice also clarifies the difference between “required cooperation” and “extraordinary cooperation” by broker dealer and broker dealer firms, in light of FINRA rules and policies that already require cooperation in regulatory investigations.

In Ex parte Farley, --- So.3d ----, 2019 WL 2558824 (Ala. Civ. App. June 21, 2019), the Employee, Randy Farley (“Farley”) filed suit for workers’ compensation benefits against his Employer, Transport America, Inc. (“Transport America”) in Etowah County, Alabama.  As part of its discovery requests, Transport America asked that Farley execute releases for obtaining certain records, including his Social Security disability records, tax records from the Alabama Department of Internal Revenue and records from Alabama Department of Labor.  Farley refused, arguing that the Alabama Rules of Civil Procedure did not require execution of releases and that such a requirement would result in an overly broad release of information. 

Attorneys Aaron Ashcraft and John C. Webb recently obtained summary judgment in a workers’ compensation action pending in Bessemer Alabama. The summary judgment asserted a novel res judicata argument, and was based on the proposition that a Plaintiff cannot recover benefits after previously asserting, and settling, a claim for permanent total disability benefits against the same employer.

The Georgia Supreme Court granted certiorari in Hughes v. First Acceptance Ins. Co. of Ga., Inc., 343 Ga. App. 693, 808 S.E.2d 103 (2017), to review whether the Court of Appeals erred in reversing the grant of summary judgment to the insurer on the insured’s failure-to-settle claim. The Court also asked the parties to address...

In United States for Use and Benefit of Cleveland Construction, Inc. v. Stellar Group, Inc., the Middle District of Georgia considered the issue of whether a contract provision allows a contractor to recover attorneys’ fees, even where that contractor did not prevail on all of its claims. 2019 WL 338887 (M.D. Ga. 2019). Stellar Group, Inc. (“Stellar”) subcontracted with Cleveland Construction, Inc. (“Cleveland”) to provide certain...

FINRA released its 2019 Risk Monitoring and Examination Priorities Letter.  Compared to previous years, this Letter takes a novel approach by highlighting those topics that will be materially new areas of focus for FINRA’s risk monitoring and examination programs this year.  The Letter also identifies areas of ongoing concern that FINRA will continue to review.

In D.R. Horton, Inc. v. Heron’s Landing Condo. Assn. of Jacksonville, Inc., No. 1D17-1941, 2018 WL 6803698 (Fla. Dist. Ct. App., 1st Dist. 2018), the First District Court of Appeals of Florida affirmed a Florida Circuit Court’s ruling that a breach of the implied warranty of habitability did not require a condominium to be uninhabitable.

The United States Supreme Court recently held that land may only be designated a “critical habitat” for an endangered species if that same land is first a “habitat” for an endangered species.  In Weyerhaeuser Co. v. U.S. Fish and Wildlife Service, 139 S. Ct. 361 (2018), the Supreme Court evaluated the United States Fish and Wildlife Service’s (“the Service”) designation of certain land in Louisiana as a critical habitat for the dusky gopher frog, which is classified as an endangered species.

In D.R. Horton, Inc. – Jacksonville v. Heron’s Landing Condo. Assoc. of Jacksonville, Inc., 2018 WL 6803698 (Fla. 1st DCA Dec. 27, 2018), the District Court of Appeals of Florida, affirmed the trial court’s decision to allow expert testimony related to construction defects, even though the testimony was admitted pursuant to the Daubert standard, rather than the Frye standard.  The Court held the expert’s opinion was admissible under both Daubert and Frye. 

In Precision Roofing, Inc., Appellant v. David Zavelson & Tracy Zavelson, Appellees, No. 03-17-00550-CV, 2018 WL 5852680, at *1 (Tex. App. Nov. 9, 2018), the Texas Court of Appeals addressed the validity of a subcontractor’s materialman’s liens.

Employee Joseph Fields, (“Fields”) filed a Complaint against his employer Sexton Lawn & Landscape, for workers’ compensation benefits relating to right leg and lower back injuries he allegedly received from a brown recluse spider bite on August 13, 2015, while in the course and scope of his employment with Sexton Lawn & Landscape.

In Ohio Valley Environmental Coalition (OVEC) v. Pruitt, 893 F.3d 225 (4th Cir. 2018), the Fourth Circuit Court of Civil Appeals rejected the District Court’s application of the “constructive submission” doctrine, which applies when a state disregards its obligations to submit Total Maximum Daily Loads (TMDLs) required by federal law.   Under this doctrine, a Court may interpret the failure of a state to timely submit TMDLs as a “constructive submission” of a list of no TMDLs.

In Stapleton v. Barret Crane Design & Engineering, 2018 WL 985775, (2nd Cir. 2018), the United States Court of Appeals for the Second Circuit found that contractual privity, or its functional equivalent, did not exist between an owner and engineering firm retained by the design-builder, because there was no contract between the parties and the parties did not communicate directly to sufficiently “link” them.

The Fourth Circuit reversed a District Court’s dismissal of a lawsuit over a Kinder Morgan Energy Partners LP subsidiary’s gasoline pipeline spill in South Carolina, holding the Clean Water Act covers claims that the spill contaminated nearby creeks and wetlands after traveling through groundwater.  Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637 (4th Cir. 2018). In a split panel decision, the Appeals Court held that citizens may bring suit alleging a violation of the CWA when the point source of pollution is no longer releasing the pollutant, but the pollutant continues to be discharged into surface waterways via groundwater.

In Engineering and Terminal Services, L.P. v. TARSCO and Orcus Fire Protection, LLC, 525 S.W. 3d 394 (TX 2018), the Court of Appeals of Texas held the statutory requirement to file a Certificate of Merit along with a lawsuit based on professional negligence of an engineer does not apply to third party claims for contribution.

In Blok Builders, LLC v. Katryniok, No. 4D16-1811, 2018 WL 637399 (Fla. Dist. Ct. App. Jan. 31, 2018), the District Court of Appeal of Florida, Fourth District, overturned a trial court’s decision requiring a subcontractor to defend and indemnify a project owner based on a reference in the Subcontract which adopted and incorporated by reference the terms of the General Contract, that include an indemnification provision between the Owner and General Contractor.

In U.S. for benefit of Bonita Pipeline, Inc. v. Balfour Beatty Construction LLC, et. al., 2017 WL 2869721 (U.S. Dist. Ct., S.D. Cal.), the United States District Court for the Southern District of California ruled the Spearin Doctrine, in which an entity providing plans or specifications is liable for deficiencies in the plans or specifications, applies to subcontractors in design-build projects, even when plans or specifications are by definition meant to be further refined by the subcontractor.

Last week, the Eleventh Circuit in InComm Holdings, Inc. v. Great American Insurance Company affirmed a district court decision holding an insurer is not obligated to reimburse a prepaid debit card processer for a $10.7 million loss.

In recent years, a Circuit Court split has emerged regarding whether Title VII prohibits discrimination based solely on sexual orientation.  On February 26, 2018, the Justices of the Second Circuit Court of Appeals heard an appeal seeking reinstatement of a Title VII claim brought by the estate of a former employee, Donald Zarda (“Mr. Zarda”).  The estate alleged that Mr. Zarda was fired from his job as a skydiving instructor after he told a customer he was gay.  Zarda v. Altitude Express addressed a narrow question: whether Title VII prohibits discrimination on the basis of sexual orientation.  The Second Circuit overturned its earlier precedent and held that Title VII does prohibit discrimination on the basis of sexual orientation.

In Patrick Durkin v. MTown Construction, LLC, N No. W201701269COAR3CV, 2018 WL 1304922, (Tenn. Ct. App. Mar. 13, 2018), the Court of Appeals of Tennessee overturned an award of property damages which was predicated in part upon the diminution of property value based upon a finding that the defendant had failed to present sufficient evidence establishing the unreasonableness of the costs to repair the real property.

FINRA launched a retrospective review of its outside business activities and private securities transactions rules in May of 2017 to assess their effectiveness and efficiency. This request for comment stems from that review of FINRA Rule 3270 (Outside Business Activities of Registered Persons) and FINRA Rule 3280 (Private Securities Transactions of an Associated Person). The proposed rule would replace FINRA Rules 3270 and 3280 and is intended to reduce unnecessary burdens, while strengthening investor protections relating to outside activities.

In Triangle Construction Company, Inc. v. Fouche and Associates, Inc., 218 So. 3d 1180 (Mississippi 2017), Triangle Construction Company, Inc. (“Triangle”) contracted with East Madison Water Association (“EMWA”) to build a water system in Madison and Leake Counties in Mississippi.  The contract designated Fouche and Associates (“Fouche”) as the project engineer, although Fouche was not a signatory to the contract.  Triangle nevertheless argued Fouche was a party to the contract because Fouche’s seal was affixed to the contract’s cover, was designated as the project engineer and was designated as the agent and representative of the owner.

Shell, BP and Sunoco have agreed to pay $196.5 million to resolve New Jersey’s contamination claims over a gasoline additive that seeped into groundwater throughout the state.  The case is the first to be finalized since voters approved a constitutional amendment prohibiting money from such lawsuits being diverted away from cleanup and restoration of natural resources.

Stephen Hrobowski (“Hrobowski”) was involved in a motor vehicle accident in Montgomery County, Alabama in 2015 wherein his vehicle collided with a vehicle being operated by Kevin Ledyard (“Ledyard”).  The impact of this collision caused Ledyard’s vehicle to strike a vehicle being operated by Roosevelt McCorvey (“McCorvey”).

The United States Court of Appeals for the First Circuit has affirmed a lower court’s decision that the Environmental Protection Agency is under no obligation to require permits of landowners contributing to violations of state-developed Total Maximum Daily Loads (“TMDLs”).  Conservation Law Foundation v. EPA, 48 ELR 20013 (1st Cir. 2018).

The U.S. Department of Labor (“DOL”) announced that the “primary beneficiary” test is the definitive test for analyzing intern-employer relationships under the Federal Labor Standards Act (“FLSA”).  That test has been promulgated by several Circuit Courts, including the Second, Sixth, Ninth and Eleventh Circuit Courts of Appeal. See Benjamin v. B & H Educ., Inc., 877 F.3d 1139 (9th Cir. 2017); Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528, (2d Cir. 2016); Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. 2015); Solis v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518,529 (6th Cir. 2011).

In Ballard v. Lee A. McWilliams Constr., Inc., No. 2160469, 2018 WL 670459, at *1 (Ala. Civ. App. Feb. 2, 2018), the Alabama Court of Civil Appeals determined an award of prejudgment interest is due despite a defense that such damages should not be recoverable given that they were not “certain” at the time of the alleged breach due to the parties’ disagreement on the amount owed under the oral cost-plus contract.

Arbitration case filings through December 2017 reflected a 6 percent decrease compared to cases filed in 2016 during the same time frame.  More specifically, 3,681 cases were filed in 2016, but 3,456 cases were filed in 2017.  Of the 3,456 cases filed, 65 percent or 2,260 were customer disputes and 35 percent or 1,196 were intra-industry disputes. 

In Zirkelbach Construction, Inc. v. DOWL, LLC, 402 P.3d 1244 (Mont. 2017), the Supreme Court of Montana ruled design professionals can contract to limit liability for a contract claim, even if the limitation is a nominal percentage of the overall fees paid, as long as the parties do not disclaim all liability outright. However, the Court held that the limitation did not apply to the negligence claim in the suit.

In Curtis Engineering Corporation v. Superior Court of San Diego, 16 Cal. App. 5th 542 (Cal. App. Ct. 2017), the Court of Appeals for the Fourth District of California addressed the impact of the relation-back doctrine on the certificate of merit law in professional negligence actions against design professionals.  California’s certificate of merit law, codified in the Business and Professions Code, Section 411.35, requires an attorney to consult with an architect or engineer in the same discipline before filing a complaint against a licensed architect or registered professional engineer and certify that, based on the consultation, there is reasonable and meritorious cause for filing the complaint.  If an attorney is unable to obtain a consultation prior to the running of the statute of limitations, the law provides that a certificate of merit may be filed within sixty (60) days after the filing of the complaint.

In Devin B. Strickland v. Arch Insurance Company, No. 17-10610, 2018 WL 327443 (11th Cir. Jan. 9, 2018), the Eleventh Circuit Court of Appeals affirmed the District Court’s determination that Strickland’s claim against the bond surety was time-barred due to his waiting more than one year after the completion of the contract and the acceptance by the public authority to bring suit. 

The United States Court of Appeals for the First Circuit affirmed the District Court’s entry of summary judgment on all remaining claims in an action filed by the Town of Westport against Monsanto Company, Solutia, Inc., and Pharmacia.  Town of Westport v. Monsanto Company, Case No. 17-1461 (December 8, 2017).  In the suit, Westport alleged Monsanto and its related corporations, Solutia, Inc. and Pharmacia, were liable for property damage caused by PCB-laden caulk installed in a Massachusetts middle school in the 1960s. 

FINRA released its annual list of Regulatory and Examination Priorities for 2018.  FINRA will continue its focus on high-risk and recidivist brokers in terms of rulemaking initiatives and examinations. This year’s priority includes strengthening the current operation, while becoming more efficient. 

An opinion from the 10th Circuit Court of Appeals, Bandimere v. Sec. & Exch. Comm'n, 844 F.3d 1168 (10th Cir. 2016), has the potential to substantially upend the Black Lung Benefits Act, particularly as it concerns authority of Administrative Law Judges to decided cases under the Black Lung Benefit Act.

Section 25–5–89 of Alabama’s Workers’ Compensation Act provides a trial court the discretion to tax costs incurred by an injured party in pursuing their claim against an employer. However, this discretion is not unfettered and in Ex parte Ampro Prod., Inc., No. 2160818, 2017 WL 4563053, at *1 (Ala. Civ. App. Oct. 13, 2017), the Alabama Court of Civil Appeals addressed the properness of such costs.

The United States District Court for the Southern District of Indiana has ruled that an insurer must bear the costs of a remediation agreement entered into voluntarily by the policyholder without the insurer’s knowledge or consent.  Southern Pilot Ins. Co. v. Matthews Auto Repair, Inc., 2017 BL 425647; No. 17-cv-01027 (S.D. Ind., November 29, 2017).  In 2016, an environmental investigation revealed toxic waste on Matthews Auto’s property.  Subsequently, Matthews Auto entered into a voluntary remediation agreement with the Indiana Department of Environmental Management ( “IDEM”) without notifying its insurer.

In Perez-Gurri Corp. v. McLeod, No. 3D15-2590, 2017 WL 5616924, at *1 (Fla. Dist. Ct. App. Nov. 22, 2017), the District Court of Appeal of Florida, Third District, overturned a trial court’s decision to preclude a general contractor from seeking delay damages on the basis that the subcontractors were not intended third-party beneficiaries of the contract between the general contractor and the owner.

More and more plaintiffs are testing the judicial waters by bringing claims for discrimination based on sexual orientation under Title VII. Just recently, the Equal Employment Opportunity Commission (“EEOC”) celebrated its first success in a sexual orientation discrimination lawsuit.

In Sierra Court Condominium Association v. Champion Aluminum Corporation, 2017 IL App (1st) 143364, 75 N.E.3d 260 (Ill. Ct. App. 2017), First District Appellate Court of Illinois reaffirmed architects and engineering firms are not subject to the implied warranty of habitability of construction, even in the event the developer and general contractor are insolvent. 

Our firm recently obtained an award from a FINRA panel granting a Motion for Expungement.  The claim (Arbitration number 16-01770) was filed in June, 2016 and alleged negligence, breach of fiduciary duty, negligent supervision, and breach of contract.  The claims were related to charges Claimant suffered when he surrendered a fixed annuity and losses he incurred in various types of moderately aggressive investments.

The Eastern District of Michigan recently entered summary judgment in favor of an insurer in a coverage dispute concerning a computer fraud provision in American Tooling Center, Inc. v. Travelers Cas. & Sur. Co. of America, 2017 WL 3263356.

In Sears, Roebuck & Co. v. Hardin Constr. Grp., Inc., 697 F. App'x 637 (11th Cir. 2017), the United States Court of Appeals for the Eleventh Circuit affirmed the United States District Court for the Southern District of Alabama’s conclusion that a specific written timeframe is necessary in order to extend Alabama’s statute of repose.

The FINRA Codes of Arbitration and Mediation Procedure currently allow compensated non-attorney representatives (“NAR”) to represent clients in securities arbitration and mediation subject to some exceptions.  Some parties are represented by relatives or friends who assist with case preparation or presentation.  NAR firms typically provide public investors an alternative to representation by attorneys in disputes between investors and broker dealers. FINRA is conducting a review of the efficacy of continuing to allow such representation and is accepting comments from member firms and other interested parties.

In Twist Architecture & Design, Inc. v. Oregon Board of Architect Examiners, 361 Or. 507, 395 P.3d 574 (Or. 2017), the Supreme Court of Oregon ruled that the “practice of architecture” includes the preparation of master plans drawn to scale for the development of a project, even if construction drawings or specifications are not ultimately produced. 

In Ex parte Locklear Chrysler Jeep Dodge, LLC and Locklear Automotive Group, Inc., the Alabama Supreme Court granted a Petition for Writ of Mandamus (“Petition”), finding that the trial court exceeded its discretion when it granted a Motion to Compel discovery on issues unrelated to arbitration while a Motion to Compel arbitration was presently pending.

In Team Contractors, L.L.C. v. Waypoint Nola, L.L.C., et al., No. CV 16-1131, 2017 WL 4366855 (E.D. La. Sept. 29, 2017), the United States District Court for the Eastern Division of Louisiana concluded that because the contract was ambiguous as to whether the type of lost profits sought in the case were considered “consequential damage” by the terms of the contract, the matter was not ripe for summary judgment as it required it to determine whether the parties intended such damages to fall within the contract’s “consequential damages” waiver.

The Circuit Court of Appeals for the Sixth Circuit has held that residents of Flint, Michigan, may pursue class claims against state actors in state court. Mays v. City of Flint, 47 E.L.R. 20112, No. 16-2484, (6th Cir., September 11, 2017).  In January 2016, several plaintiffs filed a class-action lawsuit in state court alleging they had been harmed since April 2014 by the toxic condition of the Flint water supply. In April 2016, defendants sought removal under 28 U.S.C. §1442, the federal-officer removal statute, and 28 U.S.C. §1441, which allows removal of state court actions that involve substantial federal questions. State officials from the Michigan Department of Environmental Quality (MDEQ) claimed they were being sued for actions they took while acting under the direction of EPA, which delegated primary enforcement authority to the MDEQ to implement the Safe Water Drinking Act in Michigan.

In Sedgewick Homes, LLC v. Stillwater Homes, Inc., 2017 WL 3221488 (W.D. NC. 2017), the United States District Court for the Western District of North Carolina ruled there was a genuine issue of material fact as to whether Stillwater Homes, Inc. (“Stillwater”) infringed upon the copyrighted architectural plans of its competitor, Sedgewick Homes, LLC (“Sedgewick”). Sedgewick and Stillwater are home builders in North Carolina, who both interacted with two customers, the Bivins and the Shoemakers.

The Seventh Circuit Court of Appeals recently ruled in Severson v. Heartland Woodcraft, Inc., No. 15-3754, 2017 WL 4160849 (7th Cir. Sept. 20, 2017) that the ADA does not require employers to accommodate employees by granting them leave well beyond the employee’s leave entitlement under the FMLA.  The Court addressed what amount of leave constitutes a reasonable accommodation under the ADA and concluded that employers are not required to provide multiple months of additional leave, despite a stipulation of definite duration, to employees who have already exhausted their 12 weeks of FMLA leave. The Court’s decision was premised on the fact that long periods of leave render employees practically unable to work and unable to be “qualified individuals” under the ADA.  The Court, however, indicated that short periods of additional leave would continue to be a reasonable accommodation under the ADA given the proper factual circumstances.

Every October, FINRA’s Office of Dispute Resolution significantly reduces mediation prices in order to encourage mediation and settlement of customer and industry disputes.  The goal of Settlement Month is to encourage parties to experience the benefits of mediation for the first time and to reinforce its value and effectiveness for those who have been through the mediation process already.

In Don Facciobene, Inc. v. Hough Roofing, Inc., No. 5D15-1527, 2017 WL 3091578 (Fla. Dist. Ct. App. July 21, 2017), the Fifth District Court of Appeal of Florida held that although a valid merger clause in subcontract signed after the subcontract was almost completed, it applied retroactively to the date work first commenced.  However, the Court held that failure by general contractor to plead an affirmative defense regarding a condition precedent in the subcontract with enough specificity and particularity as required under Florida Rules of Civil Procedure barred it from relying upon what otherwise would have been an enforceable provision of the subcontract and, thus, the general contractor was required to pay the subcontractor in full. 

In Parkcrest Builders, LLC v. Housing Authority of New Orleans, 2017 WL 3394033 (E.D. LA. 2017), the United States District Court for the Eastern District of Louisiana held the Court could determine whether substantial completion had been achieved, despite a contract provision assigning this determination to the Architect.

An Eleventh Circuit Court of Appeals panel held that a “gender non-conformity claim is not ‘just another way to claim discrimination based on sexual orientation,’” but is instead a “separate, distinct avenue for relief under Title VII.” The majority opinion explained that Title VII recognizes discrimination based on a failure to conform to a gender stereotype (i.e., discrimination based on gender non-conformity) as a type of sex-based discrimination, but declined to hold that Title VII can provide relief for an individual claiming sex-based discrimination on the basis of their sexual orientation alone.

The Ninth Circuit Court of Appeals vacated a District Court’s summary judgment in favor of the defendant in a contribution action under CERCLA, finding mining company Asarco timely brought a claim to recoup compensation from Atlantic Richfield.  Asarco, LLC v. Atlantic Richfield Co., No.14-35723 (9th Cir., August 10, 2017).   CERCLA § 113(f) provides that after a party has, pursuant to a settlement agreement, resolved its liability for a “response” action or the costs of such an action, that party may seek contribution from any person who is not a party to the settlement. 

In Saarinen v. Hall, 26 ALW 36-8 (1160066), 9/1/2017, the Supreme Court held that the failure of the employee’s supervisors to install a safer saw that was on the employer’s premises was not the equivalent of removing a safety guard from an existing saw so as to subject the supervisors to liability under the Alabama Workers’ Compensation Act.

In Wyatt v. Baptist Health Sys., Inc., No. 2160280, 2017 WL 3096691, at *1 (Ala. Civ. App. July 21, 2017), the Alabama Court of Civil Appeals clarified that the Plaintiff bore the burden of establishing medical causation and that the fact finder did not have to resolve all reasonable doubts in conflicting medical evidence in her favor.

In Grieser v. Advanced Disposal Services Alabama, LLC, 26 ALW 33-4 (2160290), 8/11/17, the Court of Civil Appeals reversed a trial court’s refusal to consider the employee’s vocational disability and held that separate circumstances relieving an employer’s liability under the “Return to Work” statute are affirmative defenses which must be plead or are deemed waived.

In Am. Builders & Contractors Supply Co. v. Precision Roofing & Consulting, LLC, No. 2:17CV97-WHA, 2017 WL 3431844, (M.D. Ala. Aug. 9, 2017), the United States District Court for the Middle District of Alabama dismissed a breach of contract claim filed against a distributor that provided supplies to a roofing subcontractor in light of the plaintiff, a subcontractor, having failed to obtain its own license at the time work commenced.

In Sunset Beach Investments, LLC v. Kimley-Horn and Associates, Inc., 207 So. 3d 1012 (Fla. Ct. App. 2017), the Fourth District Court of Appeal of Florida held an engineering intern could not be liable for professional negligence.  The Court explained an “engineer intern” could not be considered a professional because he does not maintain a license.

The United Parcel Service (“UPS”) recently agreed to pay $2 million to settle the claims of approximately 90 disabled employees.  Approximately 70 employees were parties to a lawsuit filed by the EEOC and the remaining 20 had pending administrative Charges. 

The United States District Court for the District of Columbia has ruled the Environmental Protection Agency does not have authority under the Clean Air Act to force companies that use hydrofluorocarbons (“HFCs”) in products like spray cans, automobile air conditioners and refrigerators to replace the HFCs with an EPA-approved alternative.  The EPA enacted the rule in 2015, responding to research showing HFCs contribute to climate change.  Mexichem Flour Inc. and Arkema Inc. challenged the rule’s legality.

The Department of Labor (“DOL”) recently submitted a proposal to delay implementation of the remaining parts of its fiduciary rule from January 1, 2018 until July 1, 2019.  Two provisions of the rule, which greatly expands the definition of who counts as a fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code, took effect on June 9, 2017.  One remaining provision includes the best interest contract exemption, which allows brokers to charge variable compensation for products as long as they sign a legally binding agreement to put their clients’ interests ahead of their own.  The other exemptions include those for principal transactions and for insurance agents and brokers.

In LaShip, LLC v. Hayward Baker, Inc., No. 15-30816, 2017 WL 829503 (Mar. 1, 2017), the Fifth Circuit held a commercial contractor was not required to warn the owner of alleged defects in the design specifications of foundation columns that were provided by the engineer despite the fact the contractor had specialized experience in foundation design.  The Fifth Circuit refused to broaden the affirmative tort duty to warn based on a party’s expertise and upheld the statutory protections for the contractor.

The SEC approved a proposed rule change to amend FINRA Rules 12402 and 12403 of the Customer Code and Rule 13403 of the Industry Code to allow the Director of FINRA’s Office of Dispute Resolution (“Director”) to send the list generated by the Neutral List Selection System to all parties at the same time, within 30 days after the last answer is due.  The list will now be sent within this time, regardless of whether the parties agree to extend any answer due date.

A West Virginia federal judge rejected a proposed $151 million deal reached by American Water Works and Eastman Chemical that would have settled class claims arising from a 2014 coal-processing chemical spill, but indicated the agreement is salvageable.   Good et al. v. American Water Works Co. Inc. et al., Case No. 2:14-cv-01374, (S.D. W. Va., July 6, 2107). The chemical, called methylcyclohexane methanol, or crude MCHM, caused nausea, vomiting and eye irritations that led to infections after it entered the water supply in January 2014.

Since November 2016, a nationwide injunction has prevented the Obama Administration’s new overtime rule for white collar workers from going into effect.  The Obama-era rule, which increase the minimum annual salary required to support exempt status from $23,660.00 to $47,476.00, was poised to convert millions of employees from exempt to non-exempt from the FLSA’s overtime rules.  Many employers re-classified employees, increased salaries or both in an effort to comply with the new standard, which was scheduled to take effect in December 2016.  Since the injunction, those same employers have awaited clarification on whether the rule, or a modified version, would go into effect. 

In Curtis v. Miss. Board For Architects, Prof. Engineers, Prof. Land Surveyors, and Prof. Landscape Architects, No. WD 80174, 2017 WL 2241516 (Mo. Ct. App. May 23, 2017), the Missouri Court of Appeals affirmed the Missouri Board of Architects, Professional Engineers, Professional Land Surveyors, and Professional Landscape Architects’ (the “Board”) disciplinary order against an architect for violations of a previous probation order.  Donald Dustin Curtis was an architect based in Arizona and licensed in multiple jurisdictions, including Missouri.  Mr. Curtis’s license was placed on probation in Missouri for one year after he failed to inform the Board of disciplinary action in Nevada.  As part of his probation Mr. Curtis was required to submit his plans for any projects in Missouri to the Board for review.

In Melden & Hunt, Inc. v. East Rio Hondo Water Supply Corporation, No. 16-0078, 2017 WL 2492006 (Tex. June 9, 2017), East Rio Hondo Water Supply Corp. contracted with Melden & Hunt, Inc. to provide engineering-design and project-supervision services for a new water-treatment plant in San Benito, Texas. Following substantial completion of the project, East Rio complained about the quality of water treated at the plant and attributed the water-quality issues to the plant’s design and construction. East Rio subsequently filed a complaint against Melden & Hunt asserting claims for breach of contract, breach of express and implied warranties, negligence, and negligent misrepresentation.

Recent decision issued by the Ninth Circuit Court of Appeals held that an employer may defend a claim under the Equal Pay Act by proving that its pay structure was based on employees’ prior salaries, so long as this structure was reasonable and effectuated a business policy. This decision parts ways with other Circuits that have discouraged using an employee’s prior pay, by itself, to justify pay decisions.

In Anderson v. Taylor Morrison of Florida, Inc., No. 2D16-314, 2017 WL 2374404 (Fla. Dist. Ct. App. May 31, 2017), the Second District Court of Appeal of Florida held an arbitration provision in a homeowner’s sales agreement was void as against public policy because it limited the homeowner’s statutory remedies. 

Our firm recently obtained an award from a FINRA panel denying all of Claimant’s claims and finding for Respondents.  The panel also granted our Motion for Expungement.  The claim (Arbitration number 16-03568) was filed in December, 2016.  Claimant alleged claims of breach of fiduciary duty, breach of contract, failure to supervise, violation of the Alabama Securities Act, violation of securities regulatory rules, ongoing fraud, and common law claims of misrepresentation, unjust enrichment and negligence.  The claims were related to Claimant’s purchase of preference plus variable annuities in 2005 and 2007.

A New York Appellate Court has ruled a hazardous materials exclusion did not relieve an insurer of its obligation to defend a recycling plant operator from claims the Plant is spreading a foul odor.  Hillcrest Coatings, Inc. v. Colony Ins. Co., 2017 NY App. Div. LEXIS 4519 (NY 4th Dept. June 9, 2017).  The five-judge panel partially upheld the lower court decision finding the insurer had a duty to defend because the source of the odor behind the underlying suit against Hillcrest Coatings is not necessarily hazardous materials. 

Typically, if an employee is injured on the job they can file two types of actions. First, and the most traditional, is filing suit against their employer for workers’ compensation benefits. Second, if the injured employee sustained the injury as a result of a defective product or in a car accident involving an individual who is not a co-employee, they have the right to file a separate suit against that entity or individual.

The Massachusetts Supreme Court recently issued the most comprehensive opinion to date addressing whether an insurer’s duty to defend extends to counterclaims asserted by the insured. The court in Mount Vernon Fire Ins. Co. v. VisionAid,Inc., SJC-12142 (Mass. 2017), held that where an insurance policy provides that the insurer has the “duty to defend any claim” initiated against the insured, the insurer’s duty to defend does not require it to prosecute affirmative counterclaims on behalf of its insured.

On January 17, 2017, the IRS issued a Guidance Notice classifying syndicated conservation easement transactions as “Listed Transactions,” or presumed tax shelters.

The Washington State Supreme Court recently published an opinion that may impact how courts will approach exclusions in certain liability policies. In Xia v. ProBuilders Specialty Insurance Company, 2017 WL 1532219 (Wash. Apr. 27, 2017), a homeowner became ill soon after moving into a new house. It later was determined an improperly installed exhaust vent for the hot water heater discharged carbon monoxide into the basement of the home.

The National Employment Law Project (“NELP”) partnered with several other organizations to spearhead a grassroots movement to encourage employers to change their policies to consider the qualification of job applicants without consideration of their criminal history.  Prior to the efforts of NELP, it was commonplace for an employer to ask a job applicant whether the applicant has been convicted of a crime.

In Corwin v. NYC Bike Share, LLC, No. 14-CV-1285, 2017 WL 1399034 (S.D.N.Y. Apr. 13, 2017), the Southern District of New York granted a Motion for Summary Judgment in favor of Alta Planning + Design + Architecture of New York, PLLC (“APD”) against the City of New York (the “City”) based on deviations from APD’s design of a bike share station which the Court concluded constituted an intervening cause of the alleged damage.

In Busch v. Lennar Homes, LLC, No. 5D16-1626, 2017 WL 1372085 (Fla. Dist. Ct. App. April 13, 2017), Florida’s Fifth District Court of Appeals found the trial court improperly dismissed the Homeowner’s complaint regarding construction defects based on the ten year statute of repose.  The Court determined the Homeowner’s complaint was not barred by the ten year statute of repose, because the purchase contract contained a provision allowing the builder to correct defects within a reasonable time after closing and the complaint did not conclusively establish that such repair work did not occur.

A Mississippi federal court has held expert testimony regarding health risks posed by exposure to the disposal of a hazardous waste is admissible, even though plaintiffs did not assert claims for personal injuries.  Hollingsworth v. Hercules, Inc., 2:14-cv-KS-MTP (S. D. Miss. Jan. 3, 2017).  The testimony was offered by two experts for the defendant, a company that operated a chemical plant in Hattiesburg, Mississippi from the 1920s until 2009.

In Regulatory Notice 17-20, FINRA announced it is requesting comments on Rules 3270 and 3280 governing outside business activities and private securities transactions.  The request for comments comes as a result of FINRA’s new retrospective rule review.  The review concentrates on rules governing broker dealer employees’ business and securities activities carried out away from their firm—activities that are outside the regular course of scope of their employment with the firm.

In United States of America v. Osborne, No. 4:11-CV-1029, 2017 WL 1135640 (N.D. Ohio March 27, 2017), the Northern District of Ohio denied a Motion for Summary Judgment filed by Third-Party Defendant William R. Gray Associates, Inc. (“Gray”) based on the permit procurement obligations in Gray’s agreement for engineering services with Third-Party Plaintiff City of Willoughby (the “City”).

In early April, the United States Court of Appeals for the Seventh Circuit became the first Federal Circuit Court to hold that discrimination on the basis of sexual orientation is a form of sex discrimination and, therefore, prohibited by Title VII of the Civil Rights Act of 1964 (“Title VII”).  The Seventh Circuit’s decision sides with the position taken by the EEOC, which has been pushing to extend Title VII’s protections to include sexual orientation.

The United States District Court for the Eastern District of New York has held that Defendants responsible for dumping hazardous waste in a town park are not liable under CERCLA because they did not know of the hazardous nature of the material dumped.   Town of Islip v. Datre, 47 E.L.R. 20049 (E.D.N.Y. 2017).

Arbitration case filings for year-end 2016 reflected a 7 percent increase compared to cases filed in 2015 during the same time frame.  More specifically, 3,435 cases were filed in 2015, but 3,681 cases were filed in 2016.  Of the 3,681 cases filed, 68 percent or 2,519 were customer disputes and 32 percent or 1,162 were intra-industry disputes. 

The Eleventh Circuit recently affirmed summary judgment in favor of an insurer on the issue of pre-tender defense costs in EmbroidMe.com, Inc. v. Travelers Property & Casualty Company of America, 845 F.3d 1099 (11th Cir. 2017). Applying Florida law, the court denied the insured’s breach of contract suit for over $400,000 in fees incurred before the insured notified its insurer.

In Horton v. Hinton, 26 ALW13-4 (2150631), the Court of Civil Appeals affirmed a trial court’s dismissal of a lawsuit based on plaintiff’s failure to comply with discovery orders.  

In Levinson Alcoser Associates, L.P. v. El Pistolón II, LTD., No. 15-0232, 2017 WL 727269 (Tex. Feb. 24, 2017), the Supreme Court of Texas held Texas’s recently amended Certificate of Merit statute requires a plaintiff to accompany his complaint not only with a sworn Certificate of Merit from an expert stating the claim has merit, but also, the Certificate of Merit must demonstrate the expert has knowledge of the area of practice to which the complaint relates.

     In Golden Nugget Lake Charles, LLC v. W.G. Yates & Sons Constr. Co., No. 16-30496, 2017 WL 892407 (5th Cir. Mar. 6, 2017), the Fifth Circuit Court of Appeals determined the 60-day period for general contractors to file a lien against a project owner’s property under Louisiana Private Works Act § 9:4822(B) does not begin to run until the owner files either a Notice of Termination or a Notice of Substantial Completion.  The Court rejected the owner’s interpretation of the statute that the 60-day period begins when the event of substantial completion occurs, not when the Notice of Substantial Completion is filed.

A recent decision issued by the Tenth Circuit Court of Appeals provides support for employers seeking to avoid broad and seemingly irrelevant Requests for Information by the Equal Employment Opportunity Commission (“EEOC”).  While an employer’s response to Requests for Information is usually an avenue to support its defenses, in the rare instance of overreaching or an apparent fishing expedition, employers have additional authority with which to negotiate a compromise regarding the scope of the EEOC’s requests. 

The United States Court of Appeals for the Fourth Circuit has ruled CERCLA’s discovery rule applies to toll West Virginia’s statutes of limitations only where the plaintiff has a viable CERCLA claim.  Blankenship v. Consolidation Coal Company, et al., No. 15-2480 & 2482 (4th Cir., March 7, 2017).

In SEC v. Levin, the United States Court of Appeals for the Eleventh Circuit (“Eleventh Circuit”) held that the safe harbor provision of Regulation D’s Rule 508(a) is available to a defendant in a Securities and Exchange Commission (“SEC”) enforcement action based on a failure to register securities under Section 5 of the Securities Act.

Last week, the District of Oregon became the latest court to rule on the pollution exclusion that appears in almost every general liability policy. The court in Colony Insurance Company v. Victory Construction LLC, 2017 WL 960024 (D. Or. Mar. 9, 2017), concluded Colony had no duty to defend or indemnify its insureds for two bodily injury lawsuits arising from the release of carbon monoxide from a pool heater.

In Ex parte Tenax Corp., the Alabama Supreme Court reaffirmed that the exclusive-remedy provisions of the Alabama Workers' Compensation Act, § 25–5–1 et seq., Ala. Code 1975 can provide immunity from tort claims filed by workers’ provided to an employer through a staffing agency.

In Orchard, Hiltz & McCliment, Inc. v. Phoenix Insurance Co., Nos. 16-1176 & 16-1231, 2017 WL 244787 (6th Cir. 2017), the United States Court of Appeals for the Sixth Circuit affirmed a lower court’s grant of Summary Judgment against the Engineer, Orchard, Hiltz & McCliment, Inc. (“OHM”)...

In Hand Constr., LLC v. Stringer, the Court of Civil Appeals addressed an issue regarding the scope of jurisdiction under the Alabama Worker’s Compensation Act for out of state injuries. The Plaintiff, a resident of Mobile, Alabama, entered into a contract for hire with a construction contractor operating out of Shreveport, Louisiana. The job offer was communicated to the Plaintiff while he was in Mobile, but he traveled to Louisiana to sign the employment contract.

In Pharmacists Mut. Ins. Co. v. Advanced Specialty Pharmacy LLC, No. 1140046, 2016 WL 6819657 (Ala. Nov. 18, 2016), the Alabama Supreme Court reduced an award against a pharmacy’s general liability and umbrella insurer by $3M after finding underlying claims only were subject to the policies’ general aggregate limit, and not also the products/completed work hazard aggregate limit.

In Harleysville Group Ins. v. Heritage Communities, Inc., 2017 WL 105021 the South Carolina Supreme Court considered the impact that vague reservation of rights letters have on an insurer's right to pursue its coverage defenses. The claim arose out of property damage to condominiums originally caused by the insureds' faulty workmanship.

Insurance-appointed counsel should be familiar with the “tripartite” relationship. Those insurance-appointed counsel who defend under a reservation of rights (“ROR”) especially should be aware of the potential conflicts that befall such representation. One commentator aptly described the ROR defense as “deeply and unavoidably vexing.”1 The Supreme Court of Mississippi has recognized the “tripartite” relationship creates problems that would “tax Socrates.”

On September 16, 2016, the Alabama Court of Civil Appeals released its decision in Page v. Southern Care, Inc., --- So.3d ---, 2016 WL4938180 regarding reimbursement of reasonably necessary mileage costs.   

 In Sandlin v. Harrah’s Illinois Corp., 2016 WL 4585932 (App. Ct. Ill. September 2, 2016), the Appellate Court of Illinois (the “Appellate Court”) affirmed a lower court’s grant of Summary Judgment for Cross-Claim Defendant Hnedak Bobo Group, Inc. (“HBG”)  dismissing Cross-Claim Plaintiff Harrah’s Illinois Corporation (“Harrah’s) claims for contribution.  

  In Sierra Pacific Industries v. Bradbury, 2016 WL 4699116 (Colo. App. September 8, 2016), the Colorado Court of Civil Appeals, Division I, upheld the district court’s entry of summary judgement in favor of a subcontractor on an indemnification claim for damages, costs and expenses related to an underlying construction defect claim brought by the condominium association based on the statute of repose.

In Ebert v. General Mills, 823 F.3d 472 (8th Cir. 2016), the United States Court of Appeals for the Eighth Circuit held the United States District Court of Minnesota’s entry of an Order certifying a proposed class of plaintiffs in an environmental pollution case was an abuse of discretion because “the class lacks the requisite commonality and cohesiveness to satisfy Rule 23.” The case was remanded to the District Court with directions to revisit the issues in conformity with the Court’s holding.  

The National Labor Relations Board (“NLRB”) filed a petition for certiori earlier this month asking the United States Supreme Court to consider the enforceability of class-action waivers in employee arbitration agreements.  The arbitration agreements at issue are those that require employees to waive their right to bring or join a class action, instead requiring the employees to submit to individual arbitration.  The NLRB’s position is that such agreements are invalid because they are contrary to the National Labor Relations Act’s protection of concerted activity.

 FINRA allows for expedited arbitration proceedings in cases involving senior and seriously ill parties.  While there is no specific rule within the Code of Arbitration Procedure, once FINRA determines that a matter involves an elderly or ill party, the case is flagged as an expedited case.  FINRA then endeavors to complete the arbitration process as quickly as possible.  FINRA recently formed a committee to determine how to process expedited cases more efficiently.  

An interesting decision concerning the course and scope of employment was recently issued by the Alabama Supreme Court, in Ex parte Lincare Inc. The Plaintiff in the action resigned from her employment with Lincare on June 6, 2014, and submitted a letter of resignation to her supervisor. After she presented her supervisor with the resignation letter, her supervisor confronted her with paperwork, which the Plaintiff forcibly removed from her supervisor’s hand.

 In Town of Windsor v. Loureiro Engineering Assoc., 2016 WL 4007747 (Conn. Super. Ct. June 20, 2016), the Superior Court of Connecticut (the “Superior Court”) granted a Motion to Decide Questions of Law and to Dispense with a Jury Trial filed by Defendants Loureiro Engineering, Inc., Newman Architects, LLC, Herbert S. Newman, and Michael Raso (collectively, “Defendants”), the engineer and architects hired by Plaintiff the Town of Windsor (the “Town”) to design the Windsor High School auditorium.  

    In Centerpoint Builders GP, LLC v. Trussway, Ltd., 2016 WL 3413329 (Tex. 2016), the Texas Supreme Court held the general contractor, Centerpoint Builders, LLC (“Centerpoint”), was not a “seller” under the Texas Products Liability Act and could not obtain indemnity from the manufacturer of the defective product even though Centerpoint had not altered the product in any form.   

 Between 1978 and 2002, PCS and its predecessor sent equipment to facilities in North Carolina for repairs.  During the repairs, PCBs were released.  In 2003, the EPA launched an investigation of the site.  The EPA settled with potentially responsible parties following its investigation.  

Last month, in Kimberly Hively v. Ivy Tech Community College, South Bend, the United States Court of Appeals for the Seventh Circuit dismissed Plaintiff Kimberly Hively’s (“Ms. Hively”) lawsuit against her employer for sexual orientation discrimination and harassment under the Civil Rights Act of 1964 (“Title VII”).  Ms. Hively alleged she was denied full-time employment and promotions based on her sexual orientation.

FINRA released Regulatory Notice 16-25 reminding broker dealers that claimants have a right to request arbitration through FINRA at any time and do not forfeit that right by signing any agreement with a forum selection provision specifying another dispute resolution process or an arbitration venue other than the FINRA arbitration forum.   

In Venturedyne, Ltd. v. Carbonyx Inc., 2016 WL 3402807 (N.D. Ind. June 21, 2016), the Northern District of Indiana (the “District Court”) granted a Motion for Judgment on the Pleadings filed by Plaintiff/Counterclaim Defendant Venturedyne, Ltd. d/b/a Scientific Dust Collectors (“SDC”), an engineer hired by Defendant/Crossclaimant Carbonyx, Inc. (“Carbonyx”), to design and manufacture dust collection systems. 

  In Schindler v. Tully Construction Co., 139 A.D.3d 930 (May 18, 2016), the New York Supreme Court, Appellate Division, reversed a trial court’s award of $209,000.00 in delay damages in favor of a subcontractor on a public contract in a nonjury trial.

The United States District Court for the Eastern District of California held the owner of a farm violated the Clean Water Act when he allowed wetlands on his property to be tilled.  Duarte Nursery, Inc. v. United States Army Corps of Engineers, No. 2:13-cv-02095-KJM-AC (June 10, 2016).  John Duarte, president of Duarte Nursery, purchased approximately 2,000 acres of real estate in Tehama County, California, in 2012.  There had been no farming activity on the land since 1988. 

On July 13, 2016, the Equal Employment Opportunity Commission (“EEOC”) proposed additional changes to EEO-1 data reporting requirements, modifying its original proposal from January 2016.  The original proposal, intended to enforce the prohibitions on pay discrimination in Title VII, the EPA and Executive Order 11246 regarding Equal Employment Opportunity, required employers to begin reporting pay data.

FINRA recently authorized filing with the SEC two proposed amendments to rules from the Code of Arbitration Procedure for Customer Disputes and Industry Disputes.  The rules affect chairperson eligibility in arbitration and the arbitrator panel selection process.

In Bd. of Managers of Film Exchange Lofts Condo. Ass’n v. Fitzgerald Associates Architects, P.C., 2016 WL 2841978 (Ill. App. May 11, 2016), the Appellate Court of Illinois consolidated three appeals and affirmed the lower courts’ decisions not to extend the implied warranty of habitability to architects. All three consolidated cases involved condominium boards bringing actions against architects for breach of the implied warranty of habitability, a claim typically alleged against the developer.

In County of Galveston v. Triple B Services, LLP, 2016 WL 3025261 (Tex. Civ. App. May 26, 2016), the Court of Appeals of Texas held a contractors’ breach of contract claim against a county fell within the scope of sovereign immunity waiver for construction contracts.  The Court determined the disruption damages sought by the contractor were "a direct result of owner-caused delays,” and the Texas statute providing limited waiver of sovereign immunity for delay damages was applicable.

In a unanimous decision, the U.S. Supreme Court ruled on May 31, 2016, that property owners could file suit against the U.S. Army Corps of Engineers over the agency’s determination that their land contains “waters of the United States” covered by the Clean Water Act.   Army Corps of Engineers v. Hawkes Co., 578 U.S. – (2016). The decision makes it easier for landowners to challenge the decision of federal regulators that the use of property is restricted by the Clean Water Act.

     This week the Eleventh Circuit Court of Appeals provided greater clarity as to what comments can establish a racially hostile work environment under Title VII.  In Mahone v. CSX Transportation, Inc., Case No. 2:14-cv-00535-AKK (June 13, 2016), the Court affirmed the lower court’s grant of summary judgment for the employer finding that that a coworker’s use of the term “homeboy” was insufficient to establish a racially hostile work environment.

FINRA issued Regulatory Notice 16-19 in an effort to encourage firms to review their practices regarding stop orders.  Registered representatives often recommend stop orders as a tool for managing market risk.  Investors use stop sell orders to protect profit position in the event a stock’s price declines and stop buy orders if they have a short position to limit losses in the event a stock’s price increases.  Once stop orders are triggered, they become market orders, which are inherently risky, especially in volatile market conditions.  

In Ex parte Lowe’s Home Centers, LLC, (Ala. Civ. App. May 6, 2016)[25 ALW 20], the employee Sarah Brown (“Brown”) filed a workers’ compensation action against her employer Lowe’s Home Centers, Inc. (“Lowe’s), seeking medical treatment for her claimed back injury and an award of disability benefits.

In Bronstein v. Omega Construction Group, Inc., 2016 WL 1577185 (N.Y. App. April 20, 2016), the Supreme Court of New York, Appellate Division, affirmed a lower court’s denial of a Motion to Dismiss filed by Defendant Michael T. Cetera, an architect hired by Plaintiffs to provide architectural services.  In 2006, Plaintiffs entered into an agreement with Mr. Cetera to prepare plans for an addition to their residence.

In Dallas/Fort Worth International Airport Board v. INET Airport Systems, Incorp., et al., 2016 WL 1445205 (5th Cir. April 12, 2016), the Fifth Circuit Court of Appeals reversed a trial court’s $1.29 million judgment in favor of the contractor and against the owner.  The Fifth Circuit determined genuine issues of fact remained regarding whether the owner first breached the contract by failing to cooperate with the contractor to resolve change orders.  

In May 2016, the U.S. Supreme Court denied Exxon’s petition for writ of certiorari seeking review of a $236 million trial judgment against it in a groundwater contamination case in New Hampshire.  The Court’s refusal to review the issues raised by Exxon leaves in place a verdict Exxon claims violates its due process rights.  

 On May 18, 2016, the U.S. Department of Labor issued its final version of the overtime exemption rule applicable to white collar employees.  The rule exempts from the Fair Labor Standards Act’s overtime requirements employees earning above a set salary threshold per year.  The new version promulgated by the Department of Labor significantly raises that salary threshold to the new figure of $47,476.

The SEC recently approved the adoption of FINRA Rule 2273 which creates an obligation to deliver educational communication in connection with firm recruitment practices and account transfers.  The new rule affects financial firms that want to recruit the former clients of newly hired representatives.

John Webb recently prevailed in a workers’ compensation trial before Judge D. Alan Mann in Madison County, Alabama in Antonio Octaviano v. Coast Personnel Services, Inc.

In, Ex parte Reed Contracting Servs., Inc., No. 2150230, 2016 WL 360725 (Ala. Civ. App. Jan. 29, 2016), the plaintiff, Henry Riley (“Riley”), injured both of his knees and wrists during the course of his employment with his employer, Reed Contracting Services (“Reed”) when he fell from a man lift in March 2012. Id. at *1. Riley was diagnosed with a torn medial collateral ligament in his right knee, and osteoarthritis in both knees in the months after the accident.

Aaron Ashcraft recently prevailed in a compensability hearing before Judge Steven Haddock in Decatur, Alabama in Darrin Hester v. Minor Tire Company, et al.

On February 27, 2015, the Alabama Court of Civil Appeals released an opinion re-affirming the principle that an employer is only liable under the Worker’s Compensation Act for treatment of the temporary injury when a work related injury aggravates a preexisting condition. Ex parte Fairhope Health & Rehab, LLC, 2015 WL 836706, at *7 (Ala. Civ. App. Feb. 27, 2015).

John Webb recently obtained a defense verdict on behalf of a global coal mining company in a workers’ compensation hearing loss trial.

On February 27, 2015, the Alabama Court of Civil Appeals entered a decision in the case of Pollock v. Girl Scouts of Southern Alabama, Inc., 24 ALW 10-6 (2130538), 2/27/15. The issue in Pollock was whether an employee’s participation in a horseback riding event organized and planned by a co-employee was within the scope of the employee’s employment. See id.

In Goodyear Tire & Rubber Co. v. Bush, the Alabama Civil Appeals Court held that the trial court erred in concluding that the employee was permanently and totally disabled under the Act, Ala. Code § 25-5-57(a)(4)(d), because it used the vocational disability of the employee as the basis for the compensation award without first deciding that an exception to the schedule applied.” 2014 Ala. Civ. App. LEXIS 153 (Ala. Civ. App. Aug. 22, 2014).

On April 4, 2014, the Alabama Court of Civil Appeals issued an opinion on the effect of an employee’s preexisting condition and its impact on the issue of medical causation.  See Madison Academy, Inc. v. Hanvey, 2014 WL 1328334 (Ala. Civ. App. 2014).

In Dubose Construction v. Simmons, the Alabama Court of Civil Appeals revisited an employee’s burden for obtaining compensation outside the schedule based on a seemingly routine knee injury. 2013 Ala. Civ. App. LEXIS 239 (Ala. Civ. App. Dec. 20, 2013). The employee, James Simmons, injured his knee in a workplace fall. Medical examinations revealed a torn medial meniscus which was arthroscopically repaired.

In Roblero v. Cox Pool of the Southeast, 2013 Ala. Civ. App. LEXIS 137 (Ala. Civ. App. June 21, 2013) the Alabama Court of Civil Appeals affirmed a trial court’s finding that an employer was entitled to subrogation of UIM/UM benefits paid to an injured worker.

In Bates v. Riley, the Alabama Court of Civil Appeals examined whether the unsafe use of a safety device was sufficient to support a co-employee liability claim based on the alleged willful or intentional removal of a safety device. 2013 Ala. Civ. App. LEXIS 32 (Ala. Civ. App. Feb. 1, 2013).

In McDuffie v. Medical Center Enterprise, the Alabama Court of Civil Appeals recently declined an opportunity to expand an exception to the “coming and going” rule when it examined the case of a nursing student injured on hospital grounds after her regular shift was over. 2012 Ala. Civ. App. LEXIS 249 (Ala. Civ. App. Sept. 14, 2012).

The 9th Circuit U.S. Court of Appeals has affirmed the right of state and local governments to sue Volkswagen over tampering with emissions devices on their vehicles after they were sold.  The decision reverses the lower court’s dismissal of the claims and opens the door for more litigation.  In re Volkswagen "Clean Diesel" Mktg., Sales Practices, & Prod. Liab. Litig., No. 18-15937, 2020 WL 2832121 (9th Cir. June 1, 2020).