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coverage
APPELLATE COURT AFFIRMS SUMMARY JUDGMENT IN FAVOR OF INSURED FOR COVERAGE OF LOSSES FROM RANSOMWARE ATTACK

A New Jersey appeals court affirmed summary judgment for insured pharmaceutical company Merck in a cyber coverage dispute regarding a “Hostile/Warlike Action” exclusion included in a $1.75 billion “all risks” property insurance program. Merck & Co., Inc. v. Ace American Ins. Co., No. A-1879-21, A-1882-21, 2023 WL 3160845 (N.J. Sup. Ct. App. Div. 2023).  

securities
SEC UPDATES STANDARDS OF CONDUCT FOR BROKER-DEALERS AND INVESTMENT ADVISORS

On April 20, 2023, the Securities and Exchange Commission (”SEC) released a staff bulletin regarding the standards of conduct for broker-dealers and investment advisors. The bulletin is focused primarily on the Care Obligation of Regulation Best Interest (“Reg BI”) for broker-dealers and the duty of care enforced under the Investment Advisers Act of 1940 (the “IA fiduciary standard”) for investment advisers (together, “care obligations”). Both Reg BI for broker-dealers and the IA fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest. The care obligations generally include three components:

construction
IDAHO SUPREME COURT RULES THAT STATUTE OF LIMITATIONS BEGAN TO RUN WHEN LANDSLIDE DAMAGED LOT, RATHER THAN WHEN DAMAGE TO HOME LATER MANIFESTED

In 2014, Amy and William Dempsey purchased a vacant lot in a subdivision. The Dempseys hired an architect to design a home, who then contracted with Briggs Engineering to prepare plans for site grading, drainage, and erosion control. In 2015, the Dempseys entered into a contract with BrunoBuilt, Inc. to build the home, which called for the Dempseys to transfer ownership of the lot to BrunoBuilt via a quitclaim deed. The contract noted that the Dempseys would pay for the home upon its completion, and then BrunoBuilt would transfer ownership of the property back to the Dempseys.

architects and engineers
FLORIDA PASSES NEW CONSTRUCTION DEFECT STATUTE

On April 13, 2023, Governor Ron DeSantis signed into law SB 360 (Chapter 2023-22, Laws of Florida). The new Florida law affects claims against design professionals in many ways.

First, Fla. Stat. §95.11(3)(c) establishes a new statute of repose for design defect claims. SB 360 leaves intact the four-year statute of limitations, but shortens the statute of repose from 10 to 7 years for latent defects. 

environmental
PRESIDENT BIDEN’S RECENT EXECUTIVE ORDER FURTHERS ENVIRONMENTAL JUSTICE POLICIES

On April 28, 2023, President Biden signed an executive order entitled “Executive Order on Revitalizing Our Nation’s Commitment to Environmental Justice for All” (“the Order”). The purpose of the Order is to renew a pledge made in Executive Order 12898 of February 11, 1994 (“the 1994 Order”) and more effectively implement the tenets in the prior executive order. The Order also works in conjunction with other executive orders President Bien has implemented during his time in office. April’s Order describes its purpose as more evenly distributing the human-environmental impact of government and business on people across race, income levels, and other demographic considerations. The Order describes a basic framework by which this is to be accomplished through regulatory and executive agencies.

employment
FEDERAL AGENCIES HAVE ANNOUNCED ACTION ON AI DISCRIMINATION

The Department of Justice (“DOJ”), the Federal Trade Commission (“FTC”), the Consumer Financial Protection Bureau (“CFPB”), and the Equal Employment Opportunity Commission (“EEOC”) have issued a joint statement outlining a collective commitment to monitor the use of automated systems and artificial intelligence (“AI”) and its relation to unlawful discrimination.  The agencies have warned that while AI tools utilized by employers offer a promise of advancement, their use carries the potential of unlawful bias, discrimination, and other harmful outcomes. 

architects and engineers
BUILDING A CASE FOR COPYRIGHT INFRINGEMENT: WHEN COPYING SOMEONE'S WORK GOES FROM FLATTERY TO LIABILITY IN THE WESTERN DISTRICT OF TEXAS

Kipp Flores Architects (KFA) brought a copyright infringement lawsuit against Pradera SFR (Pradera), American Housing Ventures (AHV), and KTGY in the US District Court of the Western District of Texas. KFA alleged the unlawful distribution of its copyrighted architectural design, contending that AHV either copied KFA's works or induced Pradera and KTGY to do so.

construction
TEXAS COURT AFFORDS IMMUNITY TO CONSTRUCTION COMPANY FOR PERSONAL INJURY SUIT ARISING FROM COMPLETED WORK COMPLIANT WITH STATE AGENCY’S CONTRACT

In A.S. Horner, Inc. v. Navarrette, 656 S.W.3d 717, 719 (Tx. App. 2022), a Texas Court of Appeals found a road contractor was entitled to statutory immunity for a personal injury suit after the completion of the project, as it built the road in compliance with the Texas Department of Transportation’s (“TxDOT”) design.  In an issue of first impression, the Court held immunity was not limited only to ongoing construction, but also applied to accidents occurring after completion. 

employment
NLRB GENERAL COUNSEL ISSUES GUIDANCE ON NON-DISPARAGEMENT AND CONFIDENTIALITY PROVISIONS IN SEVERANCE AGREEMENTS

The National Labor Relations Board (“NLRB”) recently issued a decision in McLaren Macomb, 372 NLRB No. 58 (2023), holding that severance agreements containing overly broad non-disparagement or confidentiality clauses violate the rights of employees under the National Labor Relations Act (“NLRA”), Section 7. The NLRB held that such clauses interfere with employees’ rights to assist co-workers or former co-workers with workplace issues and communications with others about their employment. In the weeks following the NLRB’s decision, employers have had several questions regarding the implications of this decision and how it affects the agreements they have entered into, or plan to enter into, with employees.

architects and engineers
FINRA ISSUES NEW GUIDANCE ON ACATS FRAUD

On March 28, 2023, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 23-06 addressing the “recent trend[s] in the fraudulent transfer of customer accounts through the Automated Customer Account Transfer Service (ACATS).” ACATS is an automated transfer system developed by the National Securities Clearing Corporation (NSCC). It allows eligible participants to automatically initiate, review, and complete the transfer of customer accounts through standardized procedures. FINRA Rule 11870 (Customer Account Transfer Contracts) governs the account transfer process, establishing rules that firms must follow when a customer completes a Transfer Instruction Form (TIF).

environmental
DOJ FILES COMPLAINT AGAINST NORFOLK SOUTHERN FOR OHIO DERAILMENT

On March 30, 2023, the United States Department of Justice (“DOJ”) filed suit against railway operator Norfolk Southern Corporation for violations under the Clean Water Act (“CWA”) and the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) in connection with a train derailment in East Palestine, Ohio. The February 3, 2023, derailment resulted in at least eleven train cars containing hazardous substances colliding with one another and catching on fire.

architects and engineers
TEXAS REQUIRES A CERTIFICATE OF MERIT FOR NEGLIGENT HOME INSPECTION CASE

Texas requires a plaintiff suing an engineer to obtain a “certificate of merit” from a third-party professional that the Complaint has merit, and failure to do so is grounds for dismissal.  In Tucker Engineering, Inc. v. Temperley, the Texas Court of Appeals held that an engineer hired to inspect a home was practicing engineering and a certificate of merit was therefore required before filing suit.  No. 03-21-00565-CV, 2022 WL 17684036 (Tex. Ct. App. Dec. 15, 2022) (unpublished).

employment
SUPREME COURT RULES EMPLOYEES PAID DAILY RATE ARE ENTITLED TO OVERTIME

On February 22, 2023, the U.S. Supreme Court affirmed a decision from the Fifth Circuit Court of Appeals that an employee earning a daily rate is not exempt from overtime pay under the Fair Labor Standards Act (“FLSA”). See Helix Energy Sols. Grp., Inc. v. Hewitt, 143 S. Ct. 677 (2023). In its 6-3 decision, the Supreme Court analyzed whether the employee fell within the bona-fide executive exemption to the FLSA, and ultimately found he did not because he was not paid on a salary basis.  See 29 U.S.C. § 213(a)(1).

construction
APPEALS COURT OF MASSACHUSETTS APPLIES STATUTE OF REPOSE TO DISMISS COUNTS FOR NEGLIGENCE, BREACH OF CONTRACT, AND INDEMNIFICATION BECAUSE NEGLIGENCE WAS AT ISSUE IN EACH COUNT

In Univ. of Massachusetts Bldg. Auth. v. Adams Plumbing & Heating, Inc., 102 Mass. App. Ct. 1107 (2023), the Appeals Court of Massachusetts upheld the dismissal of the Plaintiffs’ claims because negligence was at issue in each count and thus barred by the Massachusetts’ statute of repose.

securities
HIGHLIGHTS FROM THE FINRA’S FIRST BOARD OF GOVERNORS MEETING OF 2023

FINRA’s Board of Governors held its first meeting of the calendar year on March 9-10. The Board voted to amend FINRA rules to align with the Securities Exchange Commission’s (“SEC”) recent rule changes which shorten the securities settlement cycle and addressed a variety of regulatory issues and technological initiatives. Specifically, the Board discussed FINRA’s recently finalized Digital Experience Transformation, which integrates and simplifies broker-dealer’s digital interactions with FINRA. The objective of FINRA’s Digital Experience Transformation is to facilitate more innovative, efficient, and effective compliance programs. The Board also addressed FINRA’s Regulatory Operations and Membership Application Program.

environmental
EPA PROPOSES NEW PRIMARY DRINKING WATER STANDARDS FOR CERTAIN PFAS CHEMICALS UNDER THE SAFE DRINKING WATER ACT

On March 14, 2023, the EPA announced proposed National Primary Drinking Water Regulations for six PFAS chemical compounds. The rule would limit the amount of PFOA perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) to four parts per trillion (or ng/L) in drinking water across the nation.  Perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid (HFPO-DA, “GenX chemicals”), perfluorohexane sulfonic acid (PFHxS), and perfluorobutane sulfonic acid (PFBS) would be regulated at a combined amount according to a complex formula; the EPA will likely provide an online tool by which providers may input the concentrations of these chemicals they find to determine whether they are in compliance.

environmental
3M WILL DISCONTINUE PFAS MANUFACTURING

On December 20, 2022 3M, Inc. announced it would discontinue manufacturing of per and polyfluoroalkyl substances (“PFAS”) by the end of 2025. 3M is one of the world’s largest manufacturers of PFAS, accounting for $1.3 billion in annual sales revenue. 3M plans to scale down its PFAS manufacturing prior to the 2025 discontinuation date.

securities
FINRA SUSPENDS TWO NEW YORK REGISTERED REPRESENTATIVES FOR VIOLATING REGULATION BEST INTEREST
The Financial Industry Regulatory Authority (FINRA) is ramping up enforcement against registered representatives who violate the Best Interest Obligation of the SEC’s Regulation Best Interest (“Reg. BI”).  In February 2023, FINRA announced that it had disciplined two New York-based registered representatives for violating Reg BI.  Tony Cirella and Edward Scott Short, both of the Melville, New York, office of Laidlaw & Company, were both charged by FINRA with trading activity that was “excessive, unsuitable, and not in the customer’s best interest.” 
construction
SUPREME COURT OF TEXAS APPLIES ARBITRATION CLAUSE IN PURCHASE AGREEMENT AGAINST NON-SIGNATORY MINOR CHILDREN UNDER DIRECT BENEFIT ESTOPPEL THEORY

In Taylor Morrison of Texas, Inc. v. Skufca as Next Friend of KSX, the Supreme Court of Texas determined minor children who join their parents as plaintiffs in breach of contract claims based on construction defects in the home they resided in may be subject to arbitration clauses within the applicable purchase agreement based on the theory of direct-benefits estoppel. 2023 WL 443852, at *2 (Tex. Jan. 27, 2023).  Plaintiffs Jack and Erin Skufca (the “Parents”) and their minor children (collectively, “Plaintiffs”) sued Taylor Morrison of Texas, Inc. and Taylor Woodrow Communities-League City, Ltd. (collectively, “Defendants”) for alleged construction defects in the home they purchased from Defendants.  The purchase agreement for the home contained an arbitration clause which required arbitration of “any and all claims, controversies, breaches or disputes by or between the parties hereto” that “aris[e] out of or relate[ ] to this purchase agreement, the property, the subdivision or community of which the property is a part, the sale of the property by seller, or any transaction related hereto,” whether those claims were based in “contract, tort, statute, or equity.”

architects and engineers
NEVADA, FEDERAL DISTRICT COURT UPHOLDS ECONOMIC LOSS DOCTRINE FOR DESIGN PROFESSIONALS IN RESIDENTIAL CONSTRUCTION DISPUTES
In Pulver v. Kane, 2022 WL 17327182 (D. Nev. Nov. 29, 2022), a Federal District Court in Nevada upheld the economic loss doctrine to preclude a contractor from asserting tort claims against design professionals in suits seeking to recover solely economic losses arising from residential construction. Pulver Construction Company (“Pulver”) contracted with the homeowners to construct a residential home and ultimately sued the homeowners for unpaid fees.
employment
UNITED STATES SENATE REINTRODUCES BILL TO BAN NON-COMPETE AGREEMENTS

On February 1, 2023, a bipartisan group of United States Senators reintroduced a bill, entitled the “Workforce Mobility Act of 2023” (“the Act”). The Act proposes a nationwide ban on the majority of non-compete agreements and follows the recently proposed rule by the Federal Trade Commission (“FTC”).

securities
FINRA’S EXAMINATION AND RISK MONITORING PROGRAM
The Financial Industry Regulatory Authority (“FINRA”) has released its 2023 report regarding FINRA’s Examination and Risk Monitoring Program (the “Report”). FINRA’s intent is that the Report be an up-to-date, evolving resource which member firms can use to strengthen their compliance programs. This year’s Report addresses a materially broader range of topics than in prior years. Additionally, the Report introduces a new Financial Crimes section, consisting of four topics—Anti-Money Laundering (AML); Fraud and Sanctions; Cybersecurity and Technological Governance; and Manipulative Trading—that highlight FINRA’s increased focus on protecting investors and safeguarding market integrity against these ongoing threats.
environmental
SUPREME COURT MAY BRING CLARITY TO WETLANDS PROTECTED UNDER CLEAN WATER ACT IN SACKETT V. ENVIRONMENTAL PROTECTION AGENCY

The Supreme Court heard oral argument in Sackett v. Environmental Protection Agency on October 3, 2022. Sackett involves property owners challenging an EPA compliance order determining that a property on which the Sacketts intended to build a home was a wetland as defined in the Clean Water Act (CWA). Sackett v. U.S. Env't Prot. Agency, 8 F.4th 1075, 1079 (9th Cir. 2021), cert. granted in part sub nom. Sackett v. Env't Prot. Agency, 211 L. Ed. 2d 604, 142 S. Ct. 896 (2022).

construction
NEW JERSEY COURT WEIGHS IN ON RISK ALLOCATING PAY IF PAID CONTRACTUAL PROVISIONS FOR THE FIRST TIME

In JPC Merger Sub LLC v. Tricon Enterprises, Inc., 2022 WL 17479912 (N.J. Super. Ct. App. Div. Dec. 7, 2022), the Appellate Division of the Superior Court of New Jersey upheld the enforceability of pay-if-paid provisions in subcontracts so long as the terms are “clear” and “unambiguous.”  Pay-if-paid provisions mean a subcontractor gets paid by the general contractor only if the owner pays the general contractor for that subcontractors work.  These provisions are meant to shift the risk of the owners nonpayment under the subcontractor from the contractor to the subcontractor.  These provisions are unenforceable in some states, enforceable as written in others, and enforceable only if the provision is clear and unambiguous in other states. Prior to this case, New Jersey had not weighed in on the issue through either statute or judicial opinion.

architects and engineers
TENNESSEE’S STATUTE OF REPOSE APPLIES TO CLAIMS FOR CONTRACTUAL INDEMNITY

The statute of repose is a powerful defense for a design or construction professional, since most provide an absolute bar to claims filed outside the repose period.  Tennessee’s statute of repose was recently found to apply to contractual indemnity claims, when the United States District Court for the Middle District of Tennessee granted summary judgment to a third-party defendant sued by a landscape architect for claims of contractual indemnity.  Hinman v. BrightView Landscape Dev., Inc., No. 3:19-cv-00551, 2022 WL 4231019, at *1 (M.D. Tenn., Sept. 13, 2022), appeal docketed, No. 22-6019 (6th Cir. Nov. 21, 2022).

employment
FEDERAL TRADE COMMISSION PROPOSES RULE TO BAN NONCOMPETE AGREEMENTS

On January 5, 2023, the Federal Trade Commission (“FTC”) proposed a rule to ban non-compete agreements between employers and workers. The proposed rule would prevent employers from requiring workers to agree to contract clauses that prevent the worker from seeking or accepting employment with another employer or operating a business after the conclusion of the worker’s employment. The only exception to the proposed rule is non-compete agreements stemming from the sale of a business or ownership interest in a business.  The FTC has proposed the rule on the basis that non-compete agreements are unfair methods of competition, and it estimates that the rule would increase American workers’ earnings between $250 billion and $296 billion per year. 

architects and engineers
VENEZUELAN ARCHITECT’S USE OF THE WORD “ARCHITECT” IN COMMERCIAL WEBPAGE AMOUNTS TO UNLICENSED PRACTICE OF ARCHITECTURE IN FLORIDA

In Enrique Feldman and Feldman Architecture v. Florida Department of Professional Regulation, So. 3d WL 17576861, (Fla. 1d DCA 2022), the First District Court of Appeal of Florida ruled against an architect for his online marketing of design services in Florida.  Enrique Feldman is an architect with thirty-five years of experience in Venezuela, but was not licensed to practice architecture in Florida where he marketed himself as an architect.  Feldman used the word “architect” in his commercial webpages and laid out the services he offered.  As a result, Feldman was disciplined by Florida’s architectural board, the Florida Department of Professional Architecture (“Department”).  Feldman appealed the adverse ruling that the use of the word “architect” amounted to unlicensed practice of architecture in Florida.

environmental
EPA ANNOUNCES BAN ON HYDROFLOUROCABONS

On December 9, 2022, the U.S. Environmental Protection Agency (EPA) proposed a rule restricting the use of hydrofluorocarbons (HFCs). In a prepublication document, the EPA proposed the restriction of HFCs in refrigeration, air conditioning, heat pumps, foam blowing, and aerosols by 2025. The restriction would only apply if more environmentally friendly alternatives are available.

employment
PRESIDENT BIDEN SIGN SPEAK OUT ACT BARRING USE OF NON-DISCLOSURE AGREEMENTS IN HARASSMENT CASES

On December 7, 2022, President Joe Biden (“President Biden”) signed the Speak Out Act (“The Act”), which bans the use of pre-dispute, non-disclosure and non-disparagement contract clauses involving sexual assault and sexual harassment claims. The Act applies to agreements between employers, current employees, former employees and independent contractors.

construction
COURT OF APPEALS OF NORTH CAROLINA PERMITS WATERPROOFING SUBCONTRACTOR TO PURSUE SOME THIRD-PARTY CLAIMS AGAINST FELLOW SUBCONTRACTORS

In Ascot Corporation, LLC v. I&R Waterproofing, Inc., the Court of Appeals of North Carolina recently held that a subcontractor responsible for waterproofing could properly pursue the manufacturer of the waterproofing system for breach of the implied warranty of merchantability, but not for breach of express warranty, contribution, or negligence-based indemnity. Additionally, the Court held the subcontractor could pursue a subcontractor responsible for landscaping for negligence-based indemnity and contribution.  No. COA22-19, 2022 WL 16937546, at *1 (Nov 15, 2022).

securities
MULTIPLE GOVERNMENT AGENCIES ANNOUNCE CHARGES AGAINST FORMER FTX CEO SAM BANKMAN-FRIED
On December 13, 2022, the Securities and Exchange Commission, the U.S. Attorney for the Southern District of New York, and the Commodity Futures Trading Commission each announced charges against Sam Bankman-Fried, the co-founder and former CEO of bankrupt cryptocurrency trading platform FTX Trading Ltd., stemming from parallel actions following the swift collapse of his company.
securities
SEC CHAIR LAMBASTS NON COMPLIANT CRYPTO INDUSTRY AFTER FTX BANKRUPTCY

In a November 10, 2022, interview with CNBC’s “Squawk Box”, SEC Chair Gary Gensler called for greater protections for investors in the cryptocurrency space following the stunning collapse of crypto exchange FTX.  According to FTX’s now-former CEO Sam Bankman-Fried, the crypto exchange is facing a shortfall of up to $8 billion.

environmental
NORTH CAROLINA SUPREME COURT RULES THAT STATE CAN BRING COMPANIES INTO STATE COURT FOR LIABILITIES RELATED TO PAST PFAS PRODUCTION IN EXCEPTION TO GENERAL RULE
In State ex rel. Stein v. E. I. du Pont de Nemours & Co., the North Carolina Supreme Court considered whether two companies spun off from E.I. DuPont de Nemours and Company (“DuPont”) could avoid personal jurisdiction in cases regarding claims involving the release of PFAS by asserting that those companies had never done business in North Carolina. 2022 WL 16703256, *1 (Nov. 4, 2022).
employment
ELEVENTH CIRCUIT CONTINUES TREND OF INCREASED SCRUTINY IN NO HIRE AND NO POACH AGREEMENTS

The United States District Court for the Southern District of Florida erred when it dismissed a suit against a group of Burger King franchisees that alleged the restaurants illegally maintained no-hire and no-poach agreements. The workers claimed Burger King’s franchisee agreements prevented them from obtaining employment at other franchise restaurants. See Arrington v. Burger King Worldwide, Inc., 448 F.Supp.3d 1322, 1326 (S.D. Fla., 2020).

construction
INDIANA COURT OF APPEALS AFFIRMS PARTIAL SUMMARY JUDGMENT FOR GENERAL CONTRACTOR SUED BY SUBCONTRACTOR EMPLOYEE TO WHOM THE GENERAL CONTRACTOR OWED NO CONTRACTUAL DUTY

In Tinsley-Williamson ex rel. Tinsley v. A.R. Mays Construction, Inc., 195 N.E.3d 891 (Ind. Ct. App. 2022), the Court of Appeals of Indiana affirmed partial summary judgment in favor of A.R. Mays Construction, Inc. (“A.R. Mays”), a general contractor, on the ground that neither it nor any of its subcontractors had contracted with the company that employed the Plaintiff Ethan Tinsley (“Mr. Tinsley”).  Therefore, the Court held that A.R. Mays owed no duty to Mr. Tinsley.

architects and engineers
TEXAS APPELLATE COURT HOLDS DISMISSAL IS PROPER WHEN A PLAINTIFF FAILS TO ATTACH A CERTIFICATE OF MERIT TO A COMPLAINT WHEN ALLEGING CLAIMS AGAINST ENGINEERS

In LJA Eng'g Inc. v. Santos, 652 S.W.3d 916, 918 (Tex. App. 2022), the Court of Appeals of Texas upheld the dismissal of plaintiff’s claims when plaintiff failed to file a certificate of merit with the complaint. LJA Engineering, Inc. (“LJA”) contracted with the City of Sour Lake to provide engineering services for a sanitary sewer rehabilitation project. Manuel Molina (“Molina”) was employed by Kellen Environmental, a company working on the project. A worker fell into a sewer pipe that had an open manhole cover and Molina jumped into the pipe to help. Molina was exposed to lethal poisonous gas in the pipe. Molina’s surviving spouse sued LJA alleging its negligence caused Molina’s death.

workers compensation
JOHN WEBB SPEAKS AT AWCO 2022 ANNUAL CONFERENCE

John Webb, Chair of LGWM’s Workers’ Compensation Practice Group, spoke at the Alabama Workers’ Compensation Organization (AWCO) 2022 Annual Conference.  The Conference took place November 3-4 in Birmingham, Alabama.  John teamed up with Dana Mattiace (Senior Adjuster/Team Lead) with SteadPoint Risk Management Services to provide new adjuster training for approximately 40 workers’ compensation adjusters from across the United States.  The presentation titled: “Handling Alabama Claims From Start To Finish” covered issues important for adjuster new to handling Alabama workers’ compensation claims. 

securities
NEW YORK REGISTERED REPRESENTATIVE FIRST TO BE DISCIPLINED FOR VIOLATING REG BI

The Financial Industry Regulatory Authority has disciplined a formerly registered representative for violating Regulation Best Interest (“Reg BI”).  In a first-of-its-kind disciplinary action, Charles Malico of Huntington Station, New York, has been fined $5,000 and suspended for six months for “recommending a series of transactions in the account of one retail customer that was excessive in light of the customer’s investment profile and therefore was not in that customer’s best interest,” according to FINRA’s order.

employment
U.S. DEPARTMENT OF LABOR ISSUES NEW RULE ON INDEPENDENT CONTRACTOR STATUS

On October, 11, 2022, the U.S. Department of Labor (“DOL”) released a proposed rule to update the test for determining whether a worker is an employee under the Fair Labor Standards Act (“FLSA”) or an independent contractor. The new rule significantly broadens the classification of workers as employees under the FLSA.

architects and engineers
NORTH CAROLINA AFFIRMS RULE THAT IN A LAWSUIT WITH MULTIPLE CONTRACTORS, THE STATUTE OF REPOSE RUNS WHEN EACH CONTRACTOR’S WORK IS COMPLETED, NOT WHEN THE ENTIRE PROJECT IS COMPLETED

In Gaston County Board of Education v. Shelco, LLC, 2022 WL 3363819 (N.C. App. Aug. 16, 2022), a North Carolina appellate court held that when a construction project involves multiple contractors, the statute of repose begins to run as to each contractor when its work is completed, rather than when the entire project is completed, but still refused to dismiss the claim because the date of completion was not clear from pleadings. 

construction
TENNESSEE COURT OF APPEALS UPHOLDS JUDGMENT HOLDING THAT A CONTRACT WITH A TARGET COMPLETION DATE AND START IMMEDIATELY LANGUAGE CONTAINED AN IMPLIED TIME IS OF THE ESSENCE TERM

In Franks v. Bilbrey, the Tennessee Court of Appeals held that a construction contract containing a target construction completion date and the phrase “start immediately” contained an implied “time is of the essence” term, which the contractor breached by delaying completion well beyond the target completion date. No. M2021-00766-COA-R3-CV, 2022 WL 4588871, at *1 (Tenn. Ct. App. Sept. 30, 2022).


environmental
ELEVENTH CIRCUIT RULES THAT FEDERAL INSECTICIDE, FUNGICIDE, AND RODENTICIDE ACT DOES NOT PREEMPT STATE LAW CLAIMS IN MONSANTO ROUNDUP LITIGATION

In Carson v. Monsanto Company, No. 21-10994 (11th Cir. 2022), the Eleventh Circuit ruled on July 12, 2022, that the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) did not preempt a failure to warn claim brought under Georgia law. Plaintiff’s failure to warn claim arose from claims of malignant fibrous histiocytoma that he alleges was from exposure to glyphosate, the active chemical in the Roundup brand of pesticide produced by defendant Monsanto. Plaintiff claimed that Roundup’s label failed to adequately warn of the harmful nature of glyphosate under Georgia law.

architects and engineers
FEDERAL DISTRICT COURT IN FLORIDA HOLDS SUCCESSOR ARCHITECT STATUTE DOES NOT RELEASE ORIGINAL ARCHITECT FROM LIABILITY

In Hotels of Deerfield, LLC v. Studio 78, LLC, the Court held the Florida Administrative Code Section which confers “all professional and legal responsibility” to successor architects who reuse already sealed contract documents does not also release original architects from liability.

securities
FINRA FINES BANK OF AMERICA SECURITIES $5 MILLION FOR FAILING TO REPORT LARGE OPTION POSITIONS

The Financial Industry Regulatory Authority (FINRA) has announced that it has fined BofA Securities Inc. (BofAS) $5 million for failing to report over-the-counter positions to the Large Options Positions Reporting system (LOPR).  BofAS failed to report more than 7.4 million OTC positions it held between January 2009 and October 2020.  BofAS was also censured.

construction
FLORIDA DISTRICT COURT OF APPEALS REVERSES GRANT OF SUMMARY JUDGMENT TO DEVELOPER THAT CHALLENGED DEVELOPMENT DENSITY ORDINANCE UNDER STATUTORY INORDINATE BURDEN STANDARD

In a ruling on an interlocutory appeal, the Florida District Court of Appeal for the Fifth District recently reversed a summary judgment in favor of Waters Mark Development Enterprises, LC (“WMDE”) against Brevard County (“the County”) because  WMDE had not proven that the County’s residential development density standard constituted an inordinate burden on WMDE’s use of its property intended for a subdivision. Brevard County v. Waters Mark Development Enterprises, LC, No. 5D21-1809, 2022 WL 41111172, at *1 (Fla. Dist. App. Sept. 9, 2022).

environmental
NATIONWIDE OIL AND GAS LEASE PAUSE SURVIVES FIFTH CIRCUIT RULING, BUT LIKELY DOES NOT SURVIVE INFLATION ACT

On January 27, 2021, President Biden signed Executive Order 14008, which was meant to develop policies to combat climate change. Exec. Order No. 14008, 86 Fed. Reg. 7,619 (January 27, 2021). One such policy set forth in Section 208 of the Order sought to:

"pause new oil and natural gas leases on public lands or in offshore waters pending  completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices in light of the Secretary of the Interior’s broad stewardship responsibilities over the public lands and in offshore waters, including potential climate and other impacts associated with oil and gas activities on public lands or in offshore waters."


employment
ELEVENTH CIRCUIT ENFORCES EMPLOYEE ARBITRATION AGREEMENT, HOLDING THAT THE AGREEMENT WAS NOT UNCONSCIONABLE

The Eleventh Circuit Court of Appeals recently reversed a District Court’s decision that an employment arbitration agreement was “procedurally unconscionable”. See Lambert v. Signature Healthcare, LLC, No. 19-11900 (11th Cir. July 8, 2022).

employment
CDC ISSUES NEW GUIDANCE ON COVID-19 FOCUSING ON INDIVIDUAL DECISION MAKING

On August 11, 2022, the Centers for Disease Control and Prevention (“CDC”) issued updated guidance regarding COVID-19 that emphasizes individual responsibility, rather than regulation by the government. The CDC states that the new guidance’s purpose is to help the public better understand how to protect themselves and others if they test positive for COVID-19 and what actions to take if exposed.

construction
COURT OF APPEALS OF MISSISSIPPI HOLDS THAT A PARTY SEEKING TO COMPEL ARBITRATION HAS NOT INVOKED THE LITIGATION PROCESS WHEN IT ENTERS DEFAULT AND RESPONDS TO DISPOSITIVE MOTIONS WITH A SPECIFIC RESERVATION OF ITS RIGHT TO ARBITRATION

The Mississippi Court of Appeals recently held that a general contractor that sought to compel arbitration in a breach of contract dispute between it and another contractor did not waive its right to pursue arbitration by invoking the litigation process, when it entered a notice of default (that it later agreed to withdraw) and defended against its opponent’s dispositive and procedural motions, while insisting it did not waive its right to arbitration. S. Cent. Heating, Inc. v. Clark Constr. Inc. of Miss., NO. 2021-CA-00285-COA, 2022 WL 2313877, at *1 (Miss. Ct. App. Jun. 28, 2022).

environmental
CLIMATE ACT IMPOSES NEW FEES ON METHANE EMISSIONS FROM OIL AND GAS WELLS

On August 12, 2022, Congress passed the Inflation Reduction Act, which includes $369 billion in spending on climate action. The Act introduces a “waste emissions charge,” which makes companies who produce, transport, or store oil and gas pay for methane that leaks from their facilities into the atmosphere. The charge will start at $900.00 per metric ton of methane and rise to $1,500.00 per metric ton by 2026. The Act is the first time the federal government has directly imposed a charge, fee, or tax on greenhouse gas emissions.

architects and engineers
APPLICATION OF NORTH CAROLINA’S ECONOMIC LOSS DOCTRINE IS HOTLY DEBATED SUBJECT

North Carolina’s version of the economic loss doctrine prohibits recovery for purely economic losses in tort, “for [a defendant’s] simple failure to perform his contract.”  In other words, where a party can sue for economic losses in a breach of contract claim, he is barred from also suing in tort for those same losses. 

securities
FINRA PROPOSES OVERHAUL OF EXPUNGEMENT PROCESS

FINRA has proposed a new set of rule changes to overhaul the expungement process. The proposed changes have been sent to the SEC for approval. When discussing the proposed amendments, FINRA advised the proposal targeted “straight-in expungements” and are an attempt to modify the system so these expungements “operate as intended” and “work as a remedy that is appropriate only in limited circumstances in accordance with the narrow standards in FINRA rules.”

environmental
SUPREME COURT APPLIES AND EXPOUNDS UPON THE MAJOR QUESTIONS DOCTRINE IN EPA CASE

The Supreme Court recently decided a case related to the Clean Power Plan, an Obama-era regulatory scheme that would apply to the energy industry across the country. The main holding of the opinion in West Virginia v. EPA focused on the degree to which an administrative agency may assert power over the states, and by extension the economy, by congressional grant. In other words: how much authority may an administrative agency assert without an explicit statutory grant of the powers it is trying to assert over a specific process.

employment
ELEVENTH CIRCUIT UPHOLDS ADMINISTRATIVE EXEMPTION FOR OVERTIME COMPENSATION

The Eleventh Circuit Court of Appeals recently reaffirmed in Brown v. Nexus Bus. Solutions LLC, that the Fair Labor Standards Act (“FLSA”) allows an administrative exemption from overtime provisions. (11th Cir. Apr. 1, 2022). Traditionally, FLSA requires employees be paid overtime for all hours worked beyond 40 in a week. The rate of pay is set at least one and a half times the employees’ regular rate of pay.

construction
SUPREME COURT OF TENNESSEE REVERSES LOWER COURT’S LIMITATION OF ATTORNEY’S FEES AND COSTS AWARD TO A HOMEOWNER

In Donovan v. Hastings, the Supreme Court of Tennessee analyzed whether the trial and appellate courts properly limited an award of attorney fees and costs under Tennessee Code § 20-12-119(c) to a plaintiff homeowner to those incurred after the date an amended countercomplaint was filed by the defendant contractor. 2022 WL 12301177, at *1 (Tenn. June 27, 2022).

architects and engineers
ENGINEERS HAVE NO DUTY TO OWNERS WITH WHOM THEY ARE NOT IN CONTRACTUAL PRIVITY FOR ECONOMIC LOSS IN ARIZONA

In Cal-Am Properties Inc. v. Edais Eng'g Inc., 509 P.3d 386, 388 (Ariz. 2022), the Arizona Supreme Court held design professionals are not liable for economic damages incurred by a Plaintiff with whom they are not in privity of contract. Cal-Am Properties, Inc. (“Cal-Am”) was a developer and operator of RV and mobile-home parks. Cal-Am leased the Sundance RV Resort, with the intention of constructing a new banquet and concert hall on the property.

securities
MERRILL LYNCH, PEIRCE AND FENNER & SMITH, INC. FINED 15.2 MILLION BY FINRA FOR SALES OF CLASS C MUTUAL FUND SHARES

FINRA has announced Merrill Lynch, Peirce and Finner & Smith, Inc. was fined more than $15.2 million for restitution owed to customers who purchased Class C mutual funds shares despite the availability of Class A mutual fund shares. In differentiating between the two types of mutual fund shares, FINRA noted Class A shares are subject to a front-end sales charge, in contrast to Class C shares, which are not subjected to front-end sales charges, but instead have ongoing fees and expenses that are higher than those associated with Class A shares. In many instances, mutual fund issuers allow customers to purchase Class A shares without incurring a front-end sales charge if the total purchase exceeds certain thresholds. FINRA noted that in instances where a customer qualified for the purchase of Class A shares without a front-end sales charge, there “would be no reason for the customer to purchase Class C shares with a higher annual expense.”

architects and engineers
TEXAS APPELLATE COURT HOLDS AN ARCHITECT’S THIRD-PARTY COMPLAINT FOR NEGLIGENT DESIGN REQUIRES A CERTIFICATE OF MERIT

In Thompson Hancock Witte & Associates, Inc. v. Stanley Spurling & Hamilton, Inc., 2022 WL 1010270 (Tex. App. April 5, 2022), a Texas appellate court determined a third-party plaintiff architect could not rely on the original plaintiff’s Certificate of Merit if it was not incorporated by reference into its third-party complaint.


environmental
EPA ANNOUNCES NEW DRINKING WATER HEALTH ADVISORIES FOR PFAS ‘FOREVER CHEMICALS’

On June 15, 2022, the U.S. Environmental Protection Agency (EPA) released new drinking water health advisories for per- and polyfluoroalkyl substances (PFAS). The EPA also announced $1 billion in funding to address PFAS and other emerging contaminants in drinking water.

securities
THE SEC PROPOSES NEW RULE ON ESG DISCLOSURES

The Securities and Exchange Commission has proposed new regulations that could be disruptive to Financial Advisors. There are currently 12 proposals and 26 more being discussed.

employment
UNITED STATES SUPREME COURT RULES CERTAIN AIRLINE EMPLOYEES EXEMPT FROM FEDERAL ARBITRATION ACT

On June 6, 2022, the United States Supreme Court issued a decision that certain airline employees are exempt from the Federal Arbitration Act (“FAA”), as they are considered to be a “class of workers engaged in foreign or interstate commerce”.  See Southwest Airlines Co. v. Saxon, No. 21-309 (June 6, 2022). The FAA exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from coverage. 9 U.S.C. § 1. The Supreme Court previously held that the phrase “any other class of workers engaged in foreign or interstate commerce” applies only to “transportation workers.” Circuit City Stores v. Adams, 532 U.S. 105, 119 (2001).

construction
FLORIDA COURT OF APPEAL CLARIFIES TIMING RULE IN CONSTUCTION LIEN STATUTE

In A. Alexis Varela, Inc. v. Pagio, No. 5D21-2077, 2022 WL 1592482 (Fla. Dist. Ct. App. May 20, 2022), the Florida Fifth District Court of Appeal reversed a trial court’s order dismissing a contractor’s lien foreclosure claim. The Court of Appeal stated that the trial court erred in computing the deadline for the contractor to deliver an affidavit to the homeowners pursuant to Florida’s construction lien statute. The Court of Appeal held the affidavit was timely delivered according to Florida’s rules for the computation of time.

securities
WEFUNDER AND STARTENGINE CAPITAL FINED FOR CROWDFUNDING RULE VIOLATIONS

FINRA has announced that it has fined Wefunder and StartEngine Capital for failure to comply with various securities rules and laws designed to protect crowdfunding investors.  Wefunder was fined $1.4 million for violations that occurred from 2016 to 2021.

environmental
JUSTICE DEPARTMENT BEGINS COMPREHENSIVE ENVIRONMENTAL JUSTICE STRATEGY

On May 5, 2022, Attorney General Merrick Garland and EPA Administrator Michael Regan released a memorandum entitled: “Actions to Advance Environmental Justice.” The memorandum from the Office of the Attorney General announces three actions to “secure environmental justice for all Americans.”

employment
SUPREME COURT BARS DAMAGES FOR EMOTIONAL DISTRESS UNDER THE SPENDING CLAUSE

The United States Supreme Court recently held that emotional distress damages are not recoverable in private actions to enforce statutes authorized by the Spending Clause of the United States Constitution. Cummings v. Premier Rehab Keller, P.L.L.C., No. 20-219 (Apr. 28, 2022). Statutes authorized by the Spending Clause include the Rehabilitation Act, Title IX of the Education Amendments Act of 1972, Title VI of the Civil Rights Act of 1964 and the Patient Protection and Affordable Care Act.

construction
FLORIDA APPELLATE COURT UPHOLDS BUILDER’S 18 MILLION DEFAULT JUDGMENT AGAINST CHINESE DRYWALL SUPPLIER

In KB Home Fort Myers LLC v. Taishan Gypsum Co., No. 2D21-384, 2022 WL 1099385 (Fla. Dist. Ct. App. Apr. 13, 2022), Florida’s Second District Court of Appeal reversed a trial court’s decision to vacate an $18 million default judgment against a supplier that sold defective drywall. The Court of Appeal reversed the trial court because the default judgment was not void and the drywall supplier waited over seven years to seek relief.

architects and engineers
NORTH CAROLINA LEGISLATURE CLARIFIES DESIGN BUILD CONTRACTING PROCESS FOR PUBLIC PROJECTS

North Carolina’s Governor Roy Cooper signed Session Law 2022-1 early 2022, which amended and revised North Carolina statutes applicable to public construction projects within the state. Beginning March 1, 2022, the amendments and revisions went into effect, which serve to clarify and update the statutory provisions relevant to the design-build public contracting process.

environmental
ELEVENTH CIRCUIT COURT OF APPEALS HOLDS LOSS OF AESTHETIC PLEASURE IN VIEWING WETLAND SUFFICIENT TO ESTABLISH STANDING

In Glynn Env't Coal., Inc. v. Sea Island Acquisition, LLC, 26 F.4th 1235 (11th Cir. 2022), environmentalist Jane Fraser (“Fraser”) alleged that Sea Island Acquisition, LLC (“Sea Island”) filled wetlands with outside materials, diminishing her aesthetic interest in recreation and enjoyment of the natural beauty of the wetland. The Eleventh Circuit Court of Appeals held that Fraser’s allegations against Sea Island were sufficient to establish an injury in fact and therefore Fraser had standing to bring her claim.

construction
FLORIDA COURT OF APPEAL SENDS CONDOMINIUM ASSOCIATION TO ARBITRATION PURSUANT TO THE CONDOMINIUM DECLARATION
In LEN-CG S., LLC v. Champions Club Condo. Ass'n, Inc., No. 5D21-1294, 2022 WL 980910 (Fla. Dist. Ct. App. Apr. 1, 2022), Florida’s Fifth Circuit Court of Appeals recently reversed a trial court’s decision to deny a developer’s and contractor’s motion to compel arbitration. The Court of Appeal held the arbitration provision in the condominium declaration binds the condominium association, which brought claims against the contractor and developer on its own behalf and as the class representative of the unit owners.

architects and engineers
MISSOURI FEDERAL COURT HOLDS THE ECONOMIC LOSS DOCTRINE DOES NOT BAR CONTRIBUTION

In ACE American Insurance Co. v. AERCO International, Inc., 2022 WL 814788 (E.D. Mo., March 17, 2022), the United States District Court for the Eastern District of Missouri   held the absence of privity of contract and the economic loss doctrine do not bar a contractor’s contribution claim against an architect and its subconsultant.

securities
FINRA RELEASES GUIDANCE ON RESTRICTED FIRM OBLIGATIONS

FINRA released Notice 21-43 which answered frequently asked questions about Restricted Firm Obligations. Rule 4111, or Restricted Firm Obligations, became effective on January 1, 2022, and sets additional requirements for broker-dealers with a significant history of misconduct. Rule 4111 requires member firms that are identified as Restricted Firms deposit cash or qualified securities in a segregated, restricted account; adhere to specified conditions or restrictions; or comply with a combination of such obligations.

employment
SEVENTH CIRCUIT UPHOLDS SUMMARY JUDGMENT FOR EMPLOYER IN ADA DISCRIMINATION CASE BASED ON DIRECT THREAT EXCEPTION

The Seventh Circuit recently held an employer’s rescission of an employment offer upon learning the prospective employee suffered from uncontrolled seizures did not violate the Americans with Disabilities Act (“ADA”).  Russell Pontinen (“Pontinen”) applied to work as a Utility Person at United States Steel Corporation’s (“USS”) Midwest Plant and received a contingent employment offer. After an investigation, USS discovered that Pontinen suffered from an uncontrolled seizure disorder that imposed work restrictions on him. The restrictions conflicted with the requirements of the position for which he applied; so, USS rescinded the employment offer. Pontinen sued for disability discrimination under the ADA, and the district court granted USS’s motion for summary judgment.

employment
PRESIDENT BIDEN SIGNS FEDERAL LAW RESTRICTING SEXUAL HARASSMENT AND ASSAULT ARBITRATION

On March 3, 2022, President Joe Biden (“President Biden”) signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“the Act”), a law that limits the use of pre-dispute arbitration agreements and class action waivers covering sexual assault and sexual harassment claims. The Act amends the Federal Arbitration Act (“FAA”) to give employees who are parties to arbitration agreements with their employers the option of bringing sexual assault or sexual harassment claims either in arbitration or in court.

architects and engineers
STATE LAW CLAIMS AGAINST ARCHITECT ARE NOT PREEMPTED BY THE AMERICANS WITH DISABILITY ACT

In Bd. of Regents of Nevada Sys. of Higher Educ. on Behalf of Univ. of Nevada, Reno v. Worth Grp. Architects, P.C., 499 P.3d 1177 (Nev. 2021), the Nevada Supreme Court held a Plaintiff’s non-indemnity claims against an architect were not preempted by the Americans with Disabilities Act (“ADA”).

construction
FLORIDA APPELLATE COURT REVERSES JURY VERDICT IN FAVOR OF WINDOW SUPPLIER BASED ON EVIDENCE ADMITTED AT TRIAL

In Hernandez, et al., v. CGI Windows and Doors, Inc., No. 3D20-1318, 2022 WL 610122 (Fla. Dist. Ct. App. Mar. 2, 2022), Florida's Third District Court of Appeal reversed a jury verdict in favor of a window supplier and remanded the case for a new trial. The Court of Appeal held the trial court abused its discretion in allowing inadmissible unsworn pleadings showing other subcontractors on the project had been previously dismissed from the case pursuant to a stipulation for settlement.

environmental
DISTRICT COURT ISSUES INJUNCTION IN REGARD TO BIDEN ADMINISTRATION EXECUTIVE ORDER RELATED TO GREENHOUSE GAS EMISSIONS

In Louisiana v. Biden, 2022 WL 438313 (E.D. La. 2022), the States of Louisiana, Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming moved for a preliminary injunction to enjoin enforcement of an executive order that reinstated the Interagency Working Group on Social Costs of Greenhouse Gas Emissions (“IWG”) and ordered the IWG to publish interim estimates for the social costs of greenhouse gas emissions for agencies to use when monetizing the value of changes in greenhouse gas emissions resulting from regulation and other relevant agency actions.  The issues before the District Court were: (1) whether the states had standing; (2) whether the asserted claims were subject to judicial review; and (3) whether the states satisfied the requirements to obtain a preliminary injunction.

securities
JPMORGAN FINED 200 MILLION FOR BOOKKEEPING FAILURES AS A RESULT OF WHATSAPP, TEXTING AND OTHER SOCIAL MEDIA

JPMorgan Chase was recently fined $200 million for allowing employees to use their personal devices to utilize WhatsApp and other social platforms to communicate about company business and sensitive business matters. The SEC found the messages included a wide array of content, including investment strategies, client meeting and market observations. The SEC indicted that the offline communication was widespread throughout the company and even managers and senior personnel were responsible for the unauthorized communications.

architects and engineers
PENNSYLVANIA COURT HOLDS THAT ANTI ASSIGNMENT PROVISION PRECLUDED ASSIGNMENT BEFORE CONTRACT HAD BEEN PERFORMED ONLY

In Gito, Inc. v. Axis Architecture, P.C., 2021 WL 5858467 (Pa. App. Dec. 10, 2021), a Pennsylvania Appellate Court held an anti-assignment provision in a contract between the Owner and Architect precluded the Owner from assigning the contract to a third party before the contract had been performed, but did not preclude a post-performance assignment to recover damages for breach of the contract.

construction
TENNESSEE COURT OF APPEALS HOLDS ALABAMA BASED CONTRACTOR MUST LITIGATE IN DAVIDSON COUNTY

The Tennessee Court of Appeals recently held Tennessee courts could exercise personal jurisdiction over Pierce & Allred Construction, Inc. (the “Defendant”), an Alabama-based company. Baskin v. Pierce & Allred Construction, Inc., No. M202100144COAR3CV, 2022 WL 258631 (Tenn. Ct. App. Jan. 28, 2022). The Court of Appeals also held Davidson County, Tennessee was a proper venue for the action, even though the allegedly defective construction took place in Alabama. This ruling reversed the trial court’s order granting the Defendant’s Motion to Dismiss for lack of personal jurisdiction and improper venue.

employment
OSHA WITHDRAWS VACCINE OF TEST EMERGENCY TEMPORARY STANDARD FOR LARGE EMPLOYERS

On Tuesday, January 25, 2022, the U.S. Occupational Safety and Health Administration (“OSHA”) announced the withdrawal of its November 2021 Emergency Temporary Standard (“ETS”) that would have required private sector U.S. employers with 100 or more employees to either mandate COVID-19 vaccinations for their employees or require them to comply with weekly COVID-19 testing and face covering requirements. On January 13, 2022, the U.S. Supreme Court stayed enforcement of the ETS, finding that those parties challenging it were likely to succeed and sent the matter back to a lower federal appellate court for review on the merits of the parties’ arguments. In issuing its order staying enforcement of the ETS, the six-justice majority sent a clear signal to OSHA that it believed OSHA may have exceeded its authority in issuing a broad vaccination-or-testing requirement that would impact nearly 90 million U.S. employees. The Court explained that OSHA exists to regulate workplace safety, not the public health. Following the Supreme Court’s decision, OSHA decided to withdraw the ETS.

environmental
FIFTH CIRCUIT AFFIRMS THE DISMISSAL OF RESIDENTIAL ASSOCIATION’S LAWSUIT AGAINST CITY FOR SELLING ALLEGEDLY CONTAMINATED LAND TO RESIDENTS

The Residents of Gordon Plaza, Inc. (“Gordon Plaza”) filed suit under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6972(a)(1)(B), against the Mayor of New Orleans LaToya Cantrell and the City of New Orleans (the “City”) for the City’s alleged targeting of African American residents for the sale of residential units without disclosing that the location had been previously used as a landfill.  The lawsuit was dismissed due to an ongoing “removal” actions being taken by the Court, which created a RCRA statutory bar to Gordon Plaza’s Complaint.

securities
FINRA’S 2022 REPORT ON EXAMINATION AND RISK MONITORING PROGRAM

FINRA has released its 2022 Report on Examination & Risk Monitoring which included new risks to monitor this year. The list includes several categories related to 2021’s meme-stock short-squeeze and its continuing fallout. Included in the report for the first time this year include: Muni Shorts & Fails, Trusted Contacts, Crowdfunding and Portals, and Margin and Intraday Trading. Trusted Contact risks refers to FINRA Rule 4512(a)(1)(F), which requires firms to make reasonable efforts to obtain trusted contact information for customer accounts. This is part of an ongoing effort to protect customers, especially elderly customers, from financial abuse. Muni shorts and fails refers to firms trading municipal securities which can result in taxable substitute interest to customers expecting tax-free transactions. Firms engaging in these trades need to have systems in place to monitor municipal trading.

architects and engineers
FLORIDA PROPOSES NEW CONSTRUCTION DEFECT STATUTE OF LIMITATIONS AND REPOSE

On November 2, 2021, the Florida Legislature began proposing amendments to Florida’s construction defect statute of limitations and repose under 2022 Florida Senate Bill No. 736 (“SB 736”). “The purpose of a statute of repose is to cut off the right of action after a specified time measured from the delivery of a product or the completion of work, regardless of the time of the accrual of the cause of action or the notice of the invasion of a legal right.” According to the Florida Legislature, “the [new] bill provides for a [four]-year limitations period for bringing a construction defect action, whether the action is based on a patent or obvious defect or a latent or hidden defect. The statutory language authorizing a [ten]-year statute of repose for latent defects is repealed.”

environmental
THE FOURTH CIRCUIT COURT OF APPEALS HOLDS FEDERAL QUESTION JURISDICTION DOES NOT EXIST WHERE PLAINTIFF BRINGS ONLY STATE LAW CLAIMS DEMANDING RELIEF IN ADDITION TO EPA REMEDIES

In W. Virginia State Univ. Bd. of Governors v. Dow Chem. Co., No. 20-1712, 2022 WL 90242 (4th Cir. Jan. 10, 2022), the Fourth Circuit Court of Appeals held that it lacks federal jurisdiction over state law claims brought by West Virginia State University Board (“WSVU”) against Dow Chemical Company, Bayer Corporation, Bayer CropScience LP, Bayer CropScience Holding, Inc., Rhone-Poulenc, Inc., Rhone-Poulenc AG Co., Rhone-Poulenc AG Company, Inc., and Aventis CropScience USA, LP for pollution of groundwater on the WSVU campus.

construction
FLORIDA COURT OF APPEAL SAYS NEIGHBORHOOD ASSOCIATION IS BOUND BY ARBITRATION AGREEMENT

In Lennar Homes, LLC v. Martinique at the Oasis Neighborhood Association, Inc., No. 3D20-1732, 2021 WL 6057113 (Fla. Dist. Ct. App. Dec. 22, 2021), the Third District Court of Appeal reversed the trial court’s decision to deny Lennar Homes, LLC’s (“Lennar Homes”) Motion to Compel Arbitration. The Court of Appeal held the arbitration provision was enforceable against Martinique at the Oasis Neighborhood Association, Inc. (“Neighborhood Association”).

securities
FINRA REACHES SETTLEMENT WITH SIX MEMBER FIRMS RESULTING IN 16.8 MILLION IN RESTITUTION TO CUSTOMERS

FINRA recently announced the results of its targeted examination of Unit Investment Trust (UIT) early rollovers. The investigation resulted in settlement with six member firms, totaling $16.8 million in restitution for approximately 10,000 investors. Following its investigation into the six firms, FINRA concluded that each firm failed to reasonably supervise early rollovers of UIT’s, which caused customers to incur potentially excessive sales charges. UIT’s are generally intended as long-term investments and have sales charges based on their long-term nature. These charges include deferred sales charges, and a creation and development fee. When a registered representative recommends a customer sell his or her UIT before the maturation date and then roll those funds over into a new UIT, a customer incurs a greater sales charge than if the customer had held the UIT until maturity, thereby raising suitability concerns.

employment
SUPREME COURT BLOCKS PRESIDENT BIDEN’S COVID 19 EMERGENCY TEMPORARY STANDARD

On November 5, 2021, OSHA released the COVID-19 Emergency Temporary Standard (“ETS”) providing that employers with at least 100 employees adopt a vaccination policy requiring employees to be fully vaccinated or submit to weekly testing. On January 13, 2021, in a 6-3 decision, the United States Supreme Court issued a ruling blocking the mandate stating that the Labor Secretary “lacked authority to impose the mandate” and it should have been left up to Congress to decide.

architects and engineers
COLORADO APPELLATE COURT RULES LIMITAITON OF LIABILITY PROVISION IN ENGINEER’S CONTRACT WAS AMBIGUOUS, BUT NOT VOID

In Johnson Nathan Strohe, P.C. v. MEP Engineering, Inc., 2021 WL 4314216 (Colo. App. Sept. 23, 2021), a Colorado appellate court addressed an issue of first impression and held that a limitation of liability provision in the contract between an architect and engineer was ambiguous, but did not render the provision void.

construction
FLORIDA APPELLATE COURT UPHOLDS DISMISSAL OF CONTRACTOR’S CASE

In Gen. Contractors of Cent. Fla. LLC v. Heritage Prop. & Cas. Ins. Co., No. 3D21-34, 2021 WL 5617450 (Fla. Dist. Ct. App. Dec. 1, 2021), the Third District Court of Appeal affirmed the lower court’s decision to dismiss General Contractor of Central Florida’s (“General Contractors”) lawsuit seeking payment for work it performed on its client’s home.

securities
REGULATORS ARE SET TO INCREASE OVERSIGHT OF RETAIL INVESTORS' ABILITY TO MAKE RISKY OPTIONS BETS

After a dramatic boom in options trading this past year, FINRA plans to increase rules governing these risky trades. FINRA plans to solicit opinions on options rules from the public in the coming weeks.

"We share the concerns raised by the SEC and others that retail investors may be opening accounts to trade options and other complex leveraged products without fully appreciating the risks involved," FINRA Chief Executive Officer Robert Cook said in a congressional testimony earlier this year.


employment
OSHA OPENS INVESTIGATION FOLLOWING DEATH OF SIX EMPLOYEES IN AMAZON WAREHOUSE COLLAPSE

On Friday December 10, 2021, an EF-3 tornado devastated the Midwest, including the community of Edwardsville, Illinois. The Amazon warehouse in Edwardsville was hit by the tornado, causing the sides of the warehouse to collapse and the roof to cave in. Six were killed and one other hospitalized.

environmental
ON MATTER OF FIRST IMPRESSION, NORTHERN DISTRICT COURT OF ALABAMA HOLDS THAT REMEDIATION COSTS ARE RECOVERABLE, EVEN WHERE THEY EXCEED DIMINUTION OF VALUE DAMAGES, WHERE THERE IS A LEGAL DUTY TO REMEDIATE

Plaintiff KMG-Bernuth, Inc., (“KMG”) operates a pentachlorophenol (“penta”) plant in Tuscaloosa which produces and stores liquid penta, an industrial wood preservative.  Penta is a hazardous pesticide subject to Environmental Protection Agency (“EPA”) regulations.  Defendant Ranger Environmental Services, LLC's (“Ranger”) is an industrial cleaning and environmental services company based in Tuscaloosa, Alabama. 

employment
FIFTH CIRCUIT STAYS OSHA’S COVID 19 EMERGENCY TEMPORARY STANDARD

On November 5, 2021, OSHA released a COVID-19 Emergency Temporary Standard (“ETS”) providing that employers with at least 100 employees adopt a vaccination policy requiring employees to be fully vaccinated or submit to weekly testing. The ETS further required employers to provide paid time off to recover from and receive the vaccine, and unvaccinated employees must wear a mask when in contact with coworkers.  Under the ETS, the test for the number of employees is counted by the enterprise, not the location. Part-time employees are counted, but independent contractors are not. In a traditional franchisor-franchisee relationship in which each franchise location is independently owned and operated, the franchisor and franchisees would be separate entities for coverage purposes.

construction
ALABAMA SUPREME COURT DISMISSES APPEAL BROUGHT BY CONTRACTOR DUE TO UNRESOLVED COUNTERCLAIMS

Builder Sys., LLC v. Klamer, No. 1200433, 2021 WL 4472047 (Ala. Sept. 30, 2021) concerned a  contractor’s appeal from an order enforcing an arbitration award in favor of the homeowners. The Klamers purchased a home built with defective drywall. In 2011, they joined a class action against the manufacturer of the drywall. The class action settled, and, as part of the settlement, the plaintiffs chose to renovate their home, including replacing the defective drywall, some fixtures, and their HVAC unit.

environmental
ELEVENTH CIRCUIT RESOLVES FORTY YEAR OLD BATTLE TO RESTORE THE OCKLAWAHA RIVER BY CONCLUDING IT LACKS SUBJECT MATTER JURISDICTION TO REVIEW AGENCY ENFORCEMENT DECISIONS

In 1971, President Richard Nixon cancelled construction of the Cross Florida Barge Canal in order to prevent permanent damage to the Ocklawaha River.  By the time the Canal construction was cancelled, nearly one-third of the project was completed.  The Rodman Dam (now the Kirkpatrick Dam) blocked the Ocklawaha River and created the Rodman Reservoir.  The creation of the reservoir flooded approximately 9,000 acres of forest and significantly damaged the Ocklawaha River.

securities
FINRA RELEASES SEPTEMBER 2021 BOARD OF GOVERNORS MEETING REPORT

FINRA Board of Governors met on September 23-24, 2021 to approve new maintaining qualifications fees and to reaffirm FINRA’s Financial Guiding Principles.

architects and engineers
ALABAMA ENACTS NEW DESIGN PROFESSIONAL STATUTE THAT PROHIBITS CERTAIN CONTRACT PROVISIONS AND ESTABLISHES A SINGLE STANDARD OF CARE FOR ALABAMA DESIGN PROFESSIONALS

On April 29, 2021, Alabama Governor Kay Ivey signed a new law that prohibits certain type indemnification provisions in professional services contracts and establishes a single standard of care for Alabama design professionals for Alabama projects governed by Alabama law. The new law, titled “Contract requirements for professional services of design professionals,” went into effect on July 1, 2021, under Alabama Code § 41-9A-3 (the “Act”), and applies to all design professional contracts created since that date. Alabama joins states such as Georgia and North Carolina by enacting a state law that seeks to limit financial liability and risk allocation to design professionals in construction contracts.

securities
FINRA ADOPTS NEW RULES TO ADDRESS FIRMS WITH A SIGNIFICANT HISTORY OF MISCONDUCT

FINRA has adopted new rules specifically tailored towards firms with a significant history of misconduct. The new rules, which become effective on January 1, 2022, allow FINRA to impose new obligations on broker-dealers with significantly higher levels of risk-related disclosures than other similarly sized peers. The new rules would also apply to firms with a high concentration of individuals with a significant history of misconduct. 

environmental
CAN TEXAS PREVENT RESIDENTS FROM ACCESSING A PUBLIC BEACH

On October 11, 2021, Community group SaveRGV (“SaveRGV”) sued the Texas General Land Office, Texas Land Commissioner George P. Bush and Cameron County (“Texas”) for allegedly violating the state constitution. SaveRGV alleges that, by frequently and unpredictably closing a nearby beach for SpaceX to launch rockets at a nearby facility, Texas is violating its constitution. SaveRGV, v. Texas General Land Office et al., 2021-DCL-05887.

employment
EEOC ISSUES GUIDANCE ON ENFORCEMENT OF DISCRIMINATION LAWS REGARDING GENDER IDENTITY AND SEXUAL ORIENTATION

Last year, the United States Supreme Court decided Bostock v. Clayton Cty., Georgia, 140 S. Ct. 1731 (2020) and held that it is unlawful under Title VII to discriminate against an employee because of their gender identity or sexual orientation. Since then, employers have been left with little guidance regarding how far the decision reaches. Earlier this year, the Equal Opportunity Employment Commission (“EEOC”) issued guidance clarifying the implications following Bostock. The EEOC Guidance is not binding, however, it shows the EEOC’s interpretation and how the EEOC intends to enforce discrimination laws going forward.

construction
ALABAMA SUPREME COURT REVERSES JUDGMENT AGAINST SUBCONTRACTOR AND DENIES REQUEST TO PIERCE THE CORPORATE VEIL OF CONTRACTOR

In Childs v. Pommer, the Supreme Court of Alabama reviewed two appeals from judgment in connection with a construction contract. 2021 WL 4022619, at *1. With respect to the first appeal, the Supreme Court analyzed whether a subcontractor could be liable under a breach-of-contract theory when he was not a party to the contract. Under the second appeal, the Supreme Court analyzed whether the Plaintiffs should be allowed to pierce the corporate veil of the contractor company to pursue a post-judgment course of action against its sole owner.

architects and engineers
ARCHITECT’S CONTRACT TO OBSERVE CONSTRUCTION DID NOT CREATE DUTY TO ENSURE THAT PLUMBING WORK COMPLIED WITH DESIGN PLANS

In Chicago Ambulatory Surgery Associates, Inc. v. Restore Construction, Inc., 2021 WL 4168597 (Ill. App. Sept. 14, 2021), an Illinois court held an architect that contracted to provide design drawings and make regular site visits did not also undertake a duty to inspect plumbing work for compliance with those drawings.

architects and engineers
WHO CAN OFFER A CERTIFICATE OF MERIT AGAINST A DESIGN PROFESSIONAL IN TEXAS

In Barrientos v. Jacobs Engineering Group, Inc., No. 13-20-00092-CV, 2021 WL 3411869 (Tex. App. Aug. 5, 2021), the Court of Appeals of Texas, Corpus Christi-Edinburg held that Texas law mandates that a design professional expert offering opinions against another design professional must be licensed or registered in Texas.

construction
FLORIDA APPELLATE COURT AFFIRMS SUMMARY JUDGMENT IN FAVOR OF GENERAL CONTRACTOR BASED ON STATUTE OF LIMITATIONS DEFENSE IN LATENT DEFECT CASE

In The Cottages at Stoney Creek Condominium Association, Inc., et al. v. JDR Construction, LLC, et al., No. 1D20-956, 2021 WL 2209851 (Fla. Dist. Ct. App. June 1, 2021), the Florida First District Court of Appeal affirmed the trial court’s decision granting summary judgment in favor of a general contractor on a statute of limitations defense. The trial court granted summary judgment in favor of the general contractor based on its determination that the owner knew or should have known of the alleged defects more than four years before suit was commenced. The trial court’s order discussed whether a six-year-old report established that the condominium association knew or should have known of the defects at issue in the case.

employment
ELEVENTH CIRCUIT UPHOLDS MONETARY AND NONMONETARY RULE 11 SANCTIONS AGAINST SERIAL ADA CASE FILERS

In Johnson v. 27th Ave. Caraf, Inc., the Eleventh Circuit Court of Appeals sent a message:  If you choose to misuse the legal system, be prepared to suffer the consequences.  No. 19-14353, 2021 WL 3627604, at *30 (11th Cir. Aug. 17, 2021).

environmental
MISSISSIPPI PROPERTY OWNERS NOT REQUIRED TO EXHAUST ADMINISTRATIVE REMEDIES BEFORE THE MISSISSIPPI STATE OIL AND GAS BOARD PRIOR TO BRINGING SUIT

In Petro Harvester Oil & Gas Co., LLC v. Baucum, No. 2019-IA-01442-SCT, 2021 WL 3418398 (Miss. Aug. 5, 2021), Mississippi property owners Tay and Deidra Baucum brought an action against Petro Harvester Oil & Gas Company (“Petro Harvester”) for improper use of its oil-disposal well located on neighboring land.  The Baucums brought trespass, public and private nuisance, and negligence claims against Petro Harvester, alleging that for decades the company engaged in systematic and illegal dumping and disposal of oil field petroleum waste and drilling waste on Petro Harvester’s property and Baucum’s property.

securities
FINRA REMINDS FIRMS OF THEIR SUPERVISORY OBLIGATIONS RELATED TO OUTSOURCING TO THIRD PARTY VENDORS

In light of the fact that many member firms are increasingly using third-party vendors to perform a variety of core business functions, FINRA recently published Regulatory Notice 21-29, “FINRA Reminds Firms of their Supervisory Obligations Related to Outsourcing to Third-Party Vendors.”

workers compensation
ALABAMA COURT OF CIVIL APPEALS FINDS EMPLOYEE NOT ENTITLED TO WORKERS’ COMPENSATION BENEFITS IN CO EMPLOYEE ASSAULT
Aaron Ashcraft obtained a defense verdict from Judge Claude Hundley in Patrick v. Mako Lawn Care, Inc., following a compensability hearing. The Plaintiff appealed the denial of benefits, but the Alabama Court of Civils Appeals recently upheld the trial court’s ruling that an employee injured by a co-worker in an assault at work was not entitled to recover worker’s compensation benefits for his injury. 2021 WL 3234914, (Ala. Civ. App., 2021).
environmental
LESS SHRIMP FOR LOUISIANA FOLLOWING RECENT REGULATION

On August 11, 2021, Louisiana’s Attorney General filed a complaint against the National Marine Fisheries Service (“NMFS) to prevent implementation of recent regulations amending 50 C.F.R. § 223 related to sea turtle conservation. Louisiana State v. Department of Commerce et al, U.S. District Court for the Eastern District of Louisiana, No. 2:21-cv-01523.  The new rule requires certain shrimp fisherman to install a device on their fishing nets to help prevent the incidental bycatch of endangered sea turtles. Sea Turtle Conservation; Shrimp Trawling Requirements, 84 Fed. Reg. 70,048 (Dec. 20, 2019) (to be codified at (to be codified at 50 C.F.R. § 223).

architects and engineers
TENNESSEE APPELLATE COURT RULES STATUTE OF LIMITATIONS AND REPOSE DEFENSES IN CONSTRUCTION CASES SHOULD BE SUBMITTED TO THE JURY WHEN FRAUDULENT CONCEALMENT OR EQUITABLE ESTOPPEL IS AT ISSUE

In Joseph Riccardi v. Carl Little Construction Co., Inc., et al., 2021 WL 3137251 (Tenn. App. July 26, 2021), a Tennessee Appellate Court held that the statute of limitations and statute of repose defenses should be submitted to the jury when fraudulent concealment or equitable estoppel is at issue, even if there is no genuine dispute of material facts.

employment
US DEPARTMENT OF LABOR WITHDRAWS JOINT EMPLOYER RULE

On July 29, 2021, the U.S. Department of Labor (“DOL”) announced the withdrawal of the “Joint Employer Rule”, which was established during the Trump Administration. This rule, which took effect on March 16, 2020, was intended to clarify the definition of who may be held jointly liable as an employer under the Fair Labor Standards Act (“FLSA”) by emphasizing whether the proposed employer:

  1.      Hires or fires the employee;
  2.      Supervises and controls the employee's work schedule or conditions of employment to a substantial degree;
  3.      Determines the employee's rate and method of payment; and
  4.      Maintains the employee's employment records.
securities
FINRA AMENDS RULES ASSOCIATED WITH PRIVATE PLACEMENT OFFERINGS

FINRA recently published Regulatory Notice 21-26, “FINRA Amends Rules 5122 and 5123 Filing Requirements to Include Retail Communications That Promote or Recommend Private Placements.” The notice amends FINRA Rules 5122 and 5123 to require additional filing requirements by member firms as it relates to the sale of private placement offerings.

coverage
EIGHTH CIRCUIT AFFIRMS POLICY PROVIDES NO COVERAGE FOR BUSINESS INTERRUPTION

The United States Court of Appeals for the Eighth Circuit recently became the first appellate court to weigh in on the litany of lawsuits filed by businesses seeking coverage for business interruption resulting from COVID-19-related restrictions. Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141 (8th Cir. 2021). In a big win for insurers, the Eighth Circuit affirmed the district court’s grant of the insurer’s Motion to Dismiss, finding the lack of physical damage to the business fatal to the insured’s claim for coverage.

workers compensation
ALABAMA SUPREME COURT EXTENDS PANDEMIC ORDER FOR WORKERS’ COMPENSATION CASES

On March 18, 2020, pursuant to §§ 12-2-30(b)(8) and 25-5-12, Ala. Code 1975, Chief Justice Tom Parker issued “Administrative Order Concerning Workers’ Compensation Cases During the Period of Suspension of In-Person Proceedings,” authorizing circuit judges to conduct workers’ compensation settlement hearings telephonically or by videoconference.  This Order also authorizes the use of the Alabama Department of Labor Ombudsman Program for remote approval of workers’ compensation settlements as well, and specifically allows the dismissal of a workers’ compensation claim that was pending in court if settled with written approval of an ombudsman.  The order is in effect until October 29, 2021, or further order of the Court. 

workers compensation
PRESIDING JUDGE OF JEFFERSON COUNTY EXTENDS VIRTUAL COURT PROCEEDING ORDER

On July 15, 2021, the presiding judge of Jefferson County entered an Administrative Order extending the previously entered Order allowing the holding of non-jury court proceedings by video or audio conference. 

The previous Order provided Jefferson County Circuit Judges with discretion to hold virtual court hearings in all non-jury proceedings which included workers’ compensation cases. 

In light of the recent increase in the number of Delta variant related cases in Jefferson County, we anticipate some of our local judges will set workers’ compensation hearings, status conferences and trials via audio conference.

workers compensation
ALABAMA SECRETARY OF LABOR SETS NEW MAXIMUM AND MINIMUM RATES EFFECTIVE JULY 2, 2021

In accordance with the provisions of Section 25-5-68(c), Code of Alabama 1975, the Secretary of Labor determined the new maximum workers’ compensation payable is $983.00 per week and the minimum increased to $270.00 per week

The memorandum regarding the new maximum and minimum rates issued by the Director of the Alabama Department of Labor Workers’ Compensation Division Steve Garrett, can be accessed at https://labor.alabama.gov/docs/guides/wc_weeklywage.pdf

employment
FIFTH CIRCUIT COURT OF APPEALS REJECTS LOWER STANDARD FOR GENDER IDENTITY DISCRIMINATION CLAIMS UNDER TITLE VII

Last summer, the United States Supreme Court decided Bostock v. Clayton County and held that Title VII of the Civil Rights Act of 1964 makes it unlawful to discriminate against individuals for being homosexual or transgender. 140 S. Ct. 1731 (2020). The Fifth Circuit Court of Appeals recently decided Olivarez v. T-Mobile USA, Inc., where it rejected the argument that Bostock altered the standard for these individuals in their Title VII suits. No. 20-20463, 2021 WL 1945680 (5th Cir. May 14, 2021).

architects and engineers
WHEN IS AN ARCHITECT REQUIRED TO NOTIFY ITS INSURER

In RLI Insurance Company v. Architrave, Inc., 2021 WL 1863259 (D.S.C. May 7, 2021), a federal court in South Carolina held that a factual issue remained as to when an architect was required to put its insurer on notice of a potential claim.

Bobbitt Design Build (“Bobbitt”) was hired by Mount Moriah Missionary Baptist Church, Inc., (“the Church”) to construct a new worship center. Bobbitt hired Architrave, Inc. (“Architrave”) to design the worship center. Three (3) years after the project was completed, the Church sent two demand letters to all the entities that were associated with the project, including Architrave. The demand letters listed various problems with the HVAC system and water intrusion from the roof, which Architrave contended were unrelated to its work.  Architrave did not report these demand letters to its carrier, RLI Insurance Company (“RLI”).


construction
TENNESSEE APPELLATE COURT REVERSES TRIAL COURT’S DENIAL OF ATTORNEY’S FEES FOR PLAINTIFF BASED ON PROVISION OF CONSTRUCTION CONTRACT

In Jones v. Reda Homebuilders, Inc., the Court of Appeals of Tennessee, at Nashville, analyzed whether the trial court properly denied Plaintiffs’ Motion for Attorney’s Fees based on the language of the construction contract. 2021 WL 2375883, at *1 (Tenn. Ct. App. June 10, 2021). The appellate court additionally analyzed whether the trial court’s award of damages was speculative.

Plaintiffs Frederick and Kimberly Jones (“Plaintiffs”) entered into a “New Construction Purchase and Sale Agreement” (the “Contract”) with the Defendant home builder, Reda Homebuilders, Inc. (“Reda”), on or about April 21, 2014. Reda provided Plaintiffs with a one-year builder’s warranty at closing. Within the applicable one-year warranty period, Plaintiffs discovered numerous defects in the construction of the home and brought suit against Reda for breach of contract, breach of warranty, and negligence.





environmental
UNITED STATES SUPREME COURT HOLDS BOTH STATE AND PRIVATE PROPERTY CAN BE CONDEMNED BY A CERTIFICATE HOLDING NATURAL GAS COMPANY

In PennEast Pipeline Company, LLC v. New Jersey, the Supreme Court of the United States (SCOTUS) defended the federal government’s ability to delegate its eminent domain power to a natural gas company.  No. 19-1039, 2021 WL 2653262, (U.S. June 29, 2021). 

The Natural Gas Act (“NGA”) was passed by Congress in 1938 to regulate the sale and transportation of natural gas across state lines.  NGA requires a natural gas company to obtain a certificate from the Federal Energy Regulatory Commission (“FERC”) in order to build an interstate gas pipeline.  The certificate reflects that construction of the pipeline “is or will be required by the present or future public convenience and necessity.” 15 U.S.C. § 717f(e). 

securities
FINRA, SEC, AND NASAA OFFER NEW RESOURCE TO ASSIST SECURITIES FIRMS IN IMPLEMENTING THE TRAINING REQUIREMENTS OF THE SENIOR SAFE ACT

FINRA, SEC, and NASAA recently announced a new presentation intended to assist securities firms in detecting, preventing, and reporting financial exploitation of seniors pursuant to the Senior Safe Act, Section 303 of the “Economic Growth, Regulatory Relief, and Consumer Protection Act,” which was signed into law on May 24, 2018, as well as the state training requirements for certain firms and financial institutions relating to senior investor protection. 

workers compensation
THE ALABAMA COURT OF CIVIL APPEALS DISALLOWS A CONTRACTUAL AGREEMENT PREVENTING VENUE TO BE ESTABLISHED IN THE STATE OF ALABAMA

In Sellers v. Venture Express, Inc. (not yet released for publication), the Plaintiff asserted a workers’ compensation action in the Circuit Court of Cullman County asserting an on-the-job injury in the course and scope of her employment with Defendant Venture Express.  The claimed  injury occurred in Alabama, but the Plaintiff and Defendant entered into an agreement stating that all workers’ compensation complaints were to be filed in Tennessee.  The Defendant filed a Motion to Dismiss the Complaint based on the agreement and the Trial Court granted the Motion.  The Plaintiff appealed the dismissal of her complaint.

workers compensation
ALABAMA COURT OF CIVIL APPEALS FINDS COMPLEX REGIONAL PAIN SYNDROME TOOK PLAINTIFF’S ARM INJURY OUTSIDE THE SCHEDULE
In Turner v. Robert J. Baggett, Inc., 2021 WL 403889, (Ala. Civ. App. 2021), the Alabama Court of Civils Appeals held that the trial court erred in finding the injured employee’s injury to his right arm was confined to “the schedule” and instructed the trial court to award the employee compensation based on the extent of his permanent loss of earning capacity.
construction
TENNESSEE APPELLATE COURT AFFIRMS TRIAL COURT’S HOLDING THAT OWNER OF CORPORATION ENGAGED AS CONTRACTOR ON CONSTRUCTION PROJECT COULD NOT BE HELD PERSONALLY LIABLE FOR CORPORATION’S ALLEGED STATUTORY VIOLATIONS

In Clarksville Towers, LLC v. Straussberger, the Court of Appeals of Tennessee analyzed whether the trial court properly granted summary judgment for the owner of a corporation which was engaged as the contractor in a multi-million-dollar construction project. 2021 WL 1884636, at *1 (Tenn. Ct. App. May 11, 2021). The plaintiff, Clarksville Towers, LLC (“Clarksville Towers”), sought to hold the owner, John Straussberger, personally liable for the corporation’s alleged violations of the Tennessee Contractors Licensing Act (“TCLA”) and the Tennessee Consumer Protection Act (“TCPA”). The trial court determined the owner could not be held personally liable for the corporation’s alleged violations and granted summary judgment on the claims against Straussberger. The Court of Appeals of Tennessee affirmed the grant of summary judgment.

employment
OSHA ISSUES EMERGENCY TEMPORARY STANDARD FOR COVID 19 FOR HEALTHCARE EMPLOYEES

On June 10, 2021, the Occupational Safety and Health Administration (“OSHA”) published an Emergency Temporary Standard (“ETS”) limited to employers in the healthcare section for COVID-19.  OSHA has the authority to issue an ETS without utilizing the regular rulemaking process if it determines that (1) workers are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful, or from new hazards; and (2) an ETS is necessary to protect workers from that danger.

environmental
FEDERAL COURT REMANDS UNFAIR TRADE PRACTICES LAWSUIT AGAINST EXXON

The United States District Court for the District of Connecticut has granted the state’s remand motion in its case against Exxon Mobil for allegedly misleading the public about connections between its products and climate change, as well as alleged interference with the marketplace for renewable energy and “greenwashing.”  Connecticut v. Exxon Mobil Corp., No. 3:20-cv-1555 (June 9, 2021).

architects and engineers
ENGINEER’S CONTRACTUAL INDEMNITY CLAIM AGAINST CONTRACTOR DISMISSED, AS INDEMNIFICATION AGREEMENT EXCLUDED CLAIMS FOR DAMAGES TO THE WORK ITSELF

In County of Saratoga v. Delaware Engineering, D.P.C., 189 A.D.3d 1926, 139 N.Y.S.3d 381 (3d Dept 2020), the New York Supreme Court Appellate Division held that an engineer’s contractual indemnity claim against the contractor was due to be dismissed, as the indemnity provision unambiguously and expressly excluded claims for damage to the “work itself.”

securities
FINRA ANNOUNCES ALL DISPUTE RESOLUTION HEARING LOCATIONS WILL BE OPEN FOR IN PERSON PROCEEDINGS ON AUGUST 2, 2021
In March of 2020, FINRA announced that due to the COVID-19 pandemic, it had administratively postponed all in-person arbitration and mediation proceedings.  Subsequent announcements extended those adjournments through July 3, 2021.  In mid-May, 2021, FINRA announced that 62 hearing locations would be open for in-person hearings starting July 5, 2021, and recently, FINRA stated that starting August 2, 2021, all FINRA dispute resolution hearing locations will be open for in-person hearings.  In-person proceedings at the following hearing locations were further postponed through July 30, 2021: Augusta, Maine; Boca Raton, Florida; Buffalo, New York; Detroit, Michigan; Philadelphia, Pennsylvania; Providence, Rhode Island; and Wilmington, Delaware. 

architects and engineers
TEXAS APPELLATE COURT REAFFIRMS HOLDING THAT CERTIFICATE OF MERIT ADDRESSING INDIVIDUAL ENGINEER’S ALLEGED NEGLIGENCE SATISFIES REQUIREMENTS AS TO THE EMPLOYER

In Carlson, Brigance & Doering, Inc. v. Compton, 2020 WL 7233612 (Tex. App. Dec 8, 2020) the Court of Appeals of Texas held that a Certificate of Merit addressing the alleged negligence of an individual engineer does not have to separately address the employer’s alleged negligence arising out of the same acts or omissions. 

securities
FINRA ISSUES GUIDANCE REGARDING PREDISPUTE ARBITRATION AGREEMENTS FOR CUSTOMER ACCOUNTS
FINRA recently issued Regulatory Notice 21-16 “FINRA Reminds Members About Requirements When Using Predispute Arbitration Agreements for Customer Accounts.” The Notice reminds members firms about certain requirements when using predispute arbitration agreements for customer accounts, as FINRA has recently become aware of customer agreements containing provisions that do not comply with FINRA rules.
employment
US DEPARTMENT OF LABOR WITHDRAWS INDEPENDENT CONTRACTOR RULE

On May 6, 2021, the U.S. Department of Labor (“DOL”) announced the withdrawal of the “Independent Contractor Rule”, which was established in the last days of the Trump Administration. This rule would have established a uniform standard for determining a worker’s status as an “independent contractor” under the Fair Labor Standards Act (“FLSA”).

construction
SUPREME COURT OF TEXAS HOLDS THAT APPELLATE COURT ERRED IN REVERSING GRANT OF SUMMARY JUDGMENT FOR GENERAL CONTRACTOR ON NEGLIGENCE CLAIM BROUGHT BY EMPLOYEE OF ITS INDEPENDENT CONTRACTOR

In JLB Builders, L.L.C. v. Hernandez, the Supreme Court of Texas analyzed whether the Texas Court of Appeals erred in finding a fact issue existed as to whether a general contractor on a construction project owed a duty of care to a concrete subcontractor’s employee who was injured on the job. 2021 WL 1822947, at *1 (Tex. May 7, 2021).

environmental
HOLCIM REACHES SETTLEMENT OVER ALLEGED ILLEGAL LEACHATE DISCHARGES

On April 28, 2021, the Department of Justice lodged a proposed consent decree with the United States District Court for the Northern District of New York in the lawsuit entitled United States and State of New York v. Holcim (US) Inc., CV No. 1:21-cv-490.  The United States and the State of New York filed the action for injunctive relief and civil penalties pursuant to Sections 309(b) and (d) of the Clean Water Act (“CWA”), 33 U.S.C. §1319(b) and (d), and Article 17 of the New York Environmental Conservation Law (“ECL”) against Holcim (US) Inc., for illegal discharges of leachate pollutants. 

workers compensation
ORDER TO CONDUCT TELEPHONIC BENEFIT REVIEW CONFERENCES EXTENDED UNTIL JULY 29, 2021

On March 18, 2020, pursuant to §§ 12-2-30(b)(8) and 25-5-12, Ala. Code 1975, on March 18, 2020, Chief Justice Tom Parker issued “Administrative Order Concerning Workers’ Compensation Cases During the Period of Suspension of In-Person Proceedings”, authorizing circuit judges to conduct workers’ compensation settlement hearings telephonically or by videoconferencing.  This Order also authorized the use of the Alabama Department of Labor Ombudsman Program for approval of workers’ compensation settlements as well, and specifically allowed the dismissal of a workers’ compensation claim that was pending in court if settled with written approval of an ombudsman.

construction
SOUTHERN DISTRICT OF FLORIDA HOLDS THAT PEDESTRIAN BRIDGE CONSULTANT IS NOT SUBJECT TO PROFESSIONAL NEGLIGENCE STATUTE OF LIMITATIONS DUE TO LACK OF CONTRACTUAL PRIVITY WITH BRIDGE OWNER

In March 2018, a pedestrian bridge collapsed at Florida International University (“FIU”) in Miami-Dade County, Florida. Magnum Construction Management, LLC v. WSP USA Solutions, Inc., 2021 WL 799448 (S.D. Fla. 2021). FIU had retained Plaintiff Magnum Construction Management, LLC (“Magnum”) to design and construct an elevated pedestrian bridge. Magnum contracted with FIGG Bridge Engineers, Inc. (“FIGG”) to perform all design and engineering services for the bridge. FIGG then contracted with The Louis Berger Group, Inc. (“Louis Berger”) for an independent peer review of certain aspects in the bridge’s design.

architects and engineers
CONSULTING EXPERT RETAINED BY NON PARTY CONTRACTOR DOES NOT ENJOY ATTORNEY CLIENT OR WORK PRODUCT PROTECTIONS

In Curtis Park Group, LLC, v. Allied World Specialty Insurance Co., 2021 WL 1022703 (D. Colo. March 17, 2021), the United States District Court for the District of Colorado held that a report produced by an engineering expert retained by the contractor was discoverable in an action between owner and its insurer, as the report was not created in anticipation of litigation and therefore was not work product.  

employment
ELEVENTH CIRCUIT HOLDS WEBSITES NOT PLACES OF PUBLIC ACCOMMODATION UNDER AMERICANS WITH DISABILITIES ACT

On April 7, 2021, the Eleventh Circuit Court of Appeals rendered its opinion in Gil v. Winn-Dixie Stores, Inc., reversing the trial court’s decision against Winn-Dixie, holding that websites are not places of public accommodation under Title III of the Americans with Disabilities Act (“ADA”) and an inaccessible website is not necessarily equal to the denial of goods or services.  See Gil v. Winn-Dixie Stores, Inc., No. 17-13467 (11th Cir. Apr. 7, 2021).

environmental
SUPREME COURT DISMISSES FLORIDA’S CASE AGAINST GEORGIA OVER WATER USE IN THE APALACHICOLA CHATTAHOOCHEE FLINT RIVER BASIN

In an April 1, 2021 ruling, the U.S. Supreme Court unanimously dismissed Florida’s claims against Georgia in a long-running dispute over the use of water in the Apalachicola-Chattahoochee-Flint (ACF) river basin. State of Florida v. State of Georgia, 141 S.Ct. 1175 (2021).  The court rejected Florida’s request for an order requiring Georgia to reduce its use of water in the Apalachicola - Chattahoochee - Flint River Basin (“Apalachicola River Basin”), affirming the Special Master’s finding that Florida did not meet its burden of proof in establishing Georgia's water use caused serious harm to Florida's oyster fisheries or river wildlife and plant life.

securities
SEC DIVISION OF EXAMINATIONS ANNOUNCES 2021 EXAMINATION PRIORITIES

The SEC Division of Examinations recently announced its examination priorities for fiscal year 2021, discussing key risks, trends, and examination priorities in an overall effort to promote and improve compliance.

The two largest programs run by the Division, Investment Adviser/Investment Company Program and Broker-Dealer and Exchange Program, focus on the protection of retail investors and retirement savers.  The Division stated in its annual report that this year’s emphasis will be on sales related to mutual funds and exchange-traded products, municipal securities, other fixed income products, and microcap securities, but the examinations will be in the context of compliance with Regulation Best Interest (“Reg BI”).


coverage
APPELLATE COURTS TO HEAR BUSINESS OWNERS’ CLAIMS FOR INSURANCE COVERAGE FOR BUSINESS INTERRUPTION

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.


environmental
NAVIGABLE WATERS PROTECTION RULE DOES NOT REQUIRE DISMISSAL OF CWA CASE

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).

securities
HIGHLIGHTS FROM THE FINRA 2021 RISK MONITORING AND EXAMINATION PRIORITIES LETTER

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.

architects and engineers
MASSACHUSETTS SUPREME COURT RULES THAT STATUTE OF REPOSE FOR CONSTRUCTION AND DESIGN DEFECT IN MULTI-BUILDING PROJECT RAN WHEN EACH BUILDING WAS SUBSTANTIALLY COMPLETED

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.”

construction
MISSISSIPPI APPELLATE COURT HOLDS DEFECTIVE WORK PERFORMED BY SUBCONTRACTOR CONSTITUTED MATERIAL BREACH PREVENTING IT FROM RECOVERING ALLEGED ACCELERATION DAMAGES

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).

employment
DEPARTMENT OF LABOR ISSUES GUIDANCE TO STATE UNEMPLOYMENT INSURANCE AGENCIES THAT EXPANDS ELIGIBILITY FOR PANDEMIC UNEMPLOYMENT ASSISTANCE

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.”

workers compensation
ALABAMA SUPREME COURT EXTENDS ORDERS PERTAINING TO WORKERS’ COMPENSATION CASES AND REMOTE TESTIMONY
On March 18, 2020, pursuant to §§ 12-2-30(b)(8) and 25-5-12, Ala. Code 1975, Chief Justice Tom Parker issued “Administrative Order Concerning Workers’ Compensation Cases During the Period of Suspension of In-Person Proceedings, authorizing circuit judges to conduct workers’ compensation settlement hearings telephonically or by videoconferencing.  This Order also authorized the use of the Alabama Department of Labor Ombudsman Program for approval of workers’ compensation settlements as well, and specifically allowed the dismissal of a workers’ compensation claim that was pending in court if settled with written approval of an ombudsman.
workers compensation
DAN PICKETT SUCCESSFULLY DEFENDED CLAIM OF 100 PERCENT PERMANENT AND TOTAL DISABILITY AT TRIAL

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.

coverage
BUSINESS OWNERS EXPERIENCING SOME SUCCESS IN COVID BUSINESS INTERRUPTION LAWSUITS

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.

construction
FLORIDA COURT RULES THAT GENERAL CONTRACTOR FAILED TO ADEQUATELY SPECIFY THE SCOPE OF ITS SUBCONTRACT RESULTING IN UNEXPECTED PAYOUT TO SUBCONTRACTOR

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.

employment
DEPARTMENT OF LABOR ANNOUNCES FINAL RULE ON STANDARD FOR EMPLOYEES VERSUS INDEPENDENT CONTRACTORS

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.

environmental
MISSISSIPPI FEDERAL DISTRICT COURT RULES SUPREME COURT DECISION IN MAUI DOES NOT APPLY TO TOXIC SPILL IN CLEAN WATER ACT CASE

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.

securities
FINRA URGES FIRMS TO REVIEW THEIR POLICIES AND PROCEDURES RELATING TO RED FLAGS OF POTENTIAL FRAUD INVOLVING LOW PRICED SECURITIES

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.


architects and engineers
NORTH CAROLINA APPELLATE COURT RULES THE LICENSURE DEFENSE DOES NOT BAR CONTRACTOR’S NEGLIGENCE CLAIMS AGAINST DESIGN PROFESSIONALS

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.

architects and engineers
MICHIGAN COURT OF APPEALS FINDS ARCHITECT DID NOT OWE PROJECT OWNER A DUTY ABSENT A CONTRACT OR SPECIAL RELATIONSHIP

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.

environmental
UNITED STATES SUPREME COURT WILL HEAR A CASE SEEKING GUIDANCE ON THE APPLICABLE STATUTE OF LIMITATIONS IN A CERCLA CONTRIBUTION CASE

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.

securities
FINRA RELEASES DECEMBER 2020 BOARD OF GOVERNORS MEETING REPORT

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.

construction
FLORIDA APPELLATE COURT FINDS SETOFF AWARD WAS RELEVANT CONSIDERATION FOR DETERMINING PREVAILING PARTY UNDER LIEN ENFORCEMENT STATUTE

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.

employment
CAN EMPLOYERS REQUIRE EMPLOYEES TO RECEIVE COVID-19 VACCINATION?

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.


coverage
SOUTHERN DISTRICT OF ALABAMA GRANTS WITH PREJUDICE INSURER’S MOTION TO DISMISS BUSINESS OWNER’S DECLARATORY ACTION SEEKING COVERAGE FOR COVID-RELATED BUSINESS INTERRUPTION

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.

environmental
EPA ISSUES GUIDANCE MEMORANDUM ON COUNTY OF MAUI’S FUNCTIONAL EQUIVALENT TEST

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. 

securities
SEC ADOPTS RULE CHANGES TO PRIVATE OFFERING EXEMPTIONS

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.

construction
UNITED STATES DISTRICT COURT DENIES GENERAL CONTRACTOR’S SUMMARY JUDGMENT MOTION BASED ON STATUTE OF REPOSE ISSUES DUE TO CONTRACTOR’S ACTUAL KNOWLEDGE OF CONSTRUCTION DEFECTS AND MISREPRESENTATIONS OF THAT KNOWLEDGE

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.

employment
CALIFORNIA SAFETY AGENCY IMPOSES COVID-19 EMERGENCY REGULATIONS

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.

architects and engineers
FRAUD CLAIMS ASSERTED BY HOMEOWNER AGAINST ENGINEER DISMISSED FOR LACK OF SPECIFICITY

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. 

securities
FINRA ADOPTS RULE REGARDING REGISTERED REPRESENTATIVES BEING NAMED A CUSTOMER’S BENEFICIARY OR HOLDING A POSITION OF TRUST FOR A CUSTOMER

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.

employment
OSHA COVID INVESTIGATIONS

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.

environmental
SEVENTH CIRCUIT WILL DECIDE SUPREME COURT IMPACT ON GROUNDWATER DISPUTE
The United States Court of Appeals for the Seventh Circuit will soon have the opportunity to apply the U.S. Supreme Court’s recent County of Maui v. Hawaii Wildlife Fund ruling to a long-running dispute between an environmental group and the owner of a coal-fired power plant. 140 S.Ct. 1462 (2020).  The case is Prairie Rivers Network v. Dynegy Midwest Generation, LLC, No. 18-3622 (7th Cir.), and at issue is whether Dynegy is liable under the Clean Water Act (CWA) for alleged discharges from coal ash ponds through groundwater into a local river.
construction
TENNESSEE APPELLATE COURT SETS LOW THRESHOLD FOR SATISFYING NOTICE AND OPPORTUNITY TO CURE REQUIREMENTS FOR ALLEGED CONSTRUCTION DEFECTS

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).

architects and engineers
NEW YORK APPELLATE COURT RULES OWNERS CLAIM AGAINST ARCHITECT ACCRUED UPON COMPLETION OF THE PROJECT RATHER THAN WHEN DAMAGE WAS DISCOVERED

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.

coverage
FLORIDA DISTRICT COURT FINDS VIRUS EXCLUSION ARGUABLY AMBIGUOUS AS APPLIED TO COVID19 BUSINESS LOSSES

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.

construction
GEORGIA APPELLATE COURT FINDS QUESTION OF MATERIAL FACT REGARDING WHETHER A MATERIALMEN’S LIEN ATTACHES BASED UPON ENTITY NAME IN SUBCONTRACT

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.

architects and engineers
TEXAS COURT OF APPEALS REAFFIRMS STRICT ADHERENCE TO CERTIFICATE OF MERIT REQUIREMENTS IN CASE INVOLVING ENGINEERING FIRM

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.

securities
FINRA SEEKS COMMENT ON PROPOSED AMENDMENTS TO FINRA RULE 2165

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.

environmental
D.C. CIRCUIT REFUSES TO IMPOSE DEADLINE ON EPA TO SUBMIT TMDL

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.

employment
PRESIDENT TRUMP’S ORDER ON COMBATING RACE AND SEX STEREOTYPING AND HOW IT IMPACTS GOVERNMENT CONTRACTORS
President Trump recently signed Executive Order 13950, Combating Race and Sex Stereotyping (the “EO”), which seeks to “combat offensive and anti-American race and sex stereotyping and scapegoating,” and end “divisive concepts” covered in some of these workplace trainings. The EO establishes requirements aimed at “promoting unity in the Federal workforce,” by prohibiting messages in workplace trainings that imply “an individual, by virtue of their race or sex, is inherently racist, sexist or oppressive, whether consciously or unconsciously.”
securities
FINRA ISSUES GUIDANCE

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.

environmental
THIRD CIRCUIT HOLDS CERCLA CONTRIBUTION CLAIMS NOT EXTINGUISHED BY STATE CLEANUP SETTLEMENT
The U.S. Court of Appeals for the Third Circuit has ruled a potentially responsible party’s (PRP) settlement with New Jersey resolving its state-law liability in connection with contamination at a municipal landfill did not protect it from third-party lawsuits seeking contribution toward expenditures made by EPA on the same site.  New Jersey Department of Environmental Protection v. American Thermoplastic Corp., Nos. 18-2865 and 19-2243 (3rd Cir. September 8, 2020).  The opinion highlights CERCLA § 113(f)(2), which provides “[a] party who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement.”  The opinion also emphasizes CERCLA § 104 cooperative agreements in the context of settlements.
employment
NLRB ISSUES GUIDANCE ON COVID-19

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.

architects and engineers
NEW YORK ALLOWS ARCHITECT TO SEEK CONTRIBUTION FROM ENGINEER DESPITE NO EXPRESS CONTRACTUAL RELATIONSHIP

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.

construction
FLORIDA APPELLATE COURT INTERPRETS SECTION 713.18, FLORIDA STATUTES, TO PERMIT SERVICE ON LAST KNOWN ADDRESS OF PARTY, DESPITE FILING OF NOTICE OF COMMENCEMENT LISTING DIFFERING ADDRESS
In Fettig's Constr., Inc. v. Paradise Properties & Interiors LLC, the Florida District Court of Appeals, Fourth District, analyzed whether absence of a notice of commencement is a prerequisite to a contractor’s ability to serve its claim of construction lien on the last known address of the party to be served pursuant to the requirements of section 713.18(3)(a), Florida Statutes (2019). 2020 WL 4667654, at *1 (Fla. Dist. Ct. App. Aug. 12, 2020). The appellate court granted the writ of certiorari brought by the Petitioner Fettig’s Construction, Inc. (“Fettig’s”), which challenged the trial court’s partial final judgment dismissing Fettig’s lien foreclosure action and discharging its recorded lis pendens and lien. The trial court’s dismissal was based on its finding that Fettig’s claim was barred by the statute of limitations because he “failed to properly serve the claim of lien or contractor's affidavit in accordance with the provisions of section 713.18, Florida Statutes (2019).”
workers compensation
PHYSICIAN REFERRALS AND PANELS OF FOUR

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.

workers compensation
ALABAMA SUPREME COURT AUTHORIZES WORKERS’ COMPENSATION SETTLEMENT APPROVAL HEARINGS VIA TELEPHONIC AND VIDEO CONFERENCES
On March 18, 2020, in the wake of the COVID-19 pandemic, the Alabama Supreme Court entered its “Administrative Order Concerning Workers’ Compensation Cases During the Suspension of In-Person Proceedings”.  The Administrative Order allows circuit court judges and Ombudsmen of the Alabama Department of Labor to approve any worker’s compensation settlement via telephonic or video conferencing.
employment
COVID LITIGATION FILED BY PREGNANT EMPLOYEES

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.

environmental
COURT DISMISSES CASE SEEKING EPA REVIEW OF EMISSIONS RISKS

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.

construction
FLORIDA APPELLATE COURT HOLDS PROPERLY PERFECTED CLAIM OF CONSTRUCTION LIEN COULD RELATE BACK TO DATE OF FILING OF NOTICE OF COMMENCEMENT THAT WAS NOT SIGNED BY PROPERTY OWNER PURSUANT TO 713.13(1)(g), FLORIDA STATUTES

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.

architects and engineers
LIMITATION OF LIABILITY PROVISION IN ARCHITECT’S CONTRACT ALSO LIMITED PROFESSIONAL NEGLIGENCE CLAIM
In DMK Development Group, LLC v. Cole + Russel Architects, Inc., 2020 WL 2306894 (S.D. Ohio May 8, 2020), a federal district court in Ohio held that a contractual provision limiting an architect’s potential liability to the amount of the architect’s fee was not limited strictly to breach of contract claims. The Court held the professional negligence claim overlapped the breach of contract claim, and therefore, the limitation provision also applied to the professional negligence claim.
securities
SUPREME COURT LIMITS SECURITIES AND EXCHANGE COMMISSION’S POWER OF DISGORGEMENT

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).

workers compensation
ALABAMA DEPARTMENT OF LABOR INCREASES MAXIMUM AND MINIMUM WORKER’S COMPENSATION RATES

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. 

environmental
NINTH CIRCUIT HOLDS CLEAN AIR ACT DOES NOT PREEMPT ANTI TAMPERING LAWS AGAINST POST SALE VEHICLES

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).

architects and engineers
TEXAS COURT OF APPEALS RULES CERTIFICATES OF MERIT ARE REQUIRED IF THE ALLEGED TORTIOUS ACTIONS ORIGINATE, STEM OR RESULT FROM THE PRACTICE OF ENGINEERING

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.

construction
FLORIDA APPELLATE COURT AFFIRMS DENIAL OF ATTORNEY’S FEES TO A JUNIOR INTEREST HOLDER IN A CONSTRUCTION LIEN ENFORCEMENT ACTION UNDER SECTION 713.29, FLORIDA STATUTES

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.

securities
SEC APPROVES FINRA RULE CHANGE APPLYING MINIMUM FEES TO REQUESTS FOR EXPUNGEMENT OF CUSTOMER DISPUTE INFORMATION

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. 

employment
TITLE VII PROHIBITS DISCRIMINATION ON THE BASIS OF SEXUAL ORIENTATION AND GENDER IDENTITY

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.

architects and engineers
ECONOMIC LOSS RULE BARS TORT CLAIM AGAINST ENGINEER THAT DESIGNED UPGRADE TO TURBINE CONTROL SYSTEM
In Golden Spread Electric Coop. Inc., v. Emerson Process Management Power & Water Solutions, Inc., 954 F.3d 804 (5th Cir., 2020), the Fifth Circuit, applying Texas law, held the economic loss rule precluded a utility company from pursuing tort claims against a firm that designed an upgrade to the control system for turbine generators.  Golden Spread Electric Cooperative, Inc. (“Golden Spread”), a public utility operating a power generation facility using turbine generators, filed suit against Emerson Process Management Power & Water Solutions, Inc. (“Emerson) for breach of contract and express warranty, negligence, and strict liability. 
securities
FINRA ISSUES GUIDANCE ON FINANCIAL FRAUD AMIDST COVID 19 PANDEMIC
FINRA recently issued Regulatory Notice 20-13 “FINRA Reminds Firms to Beware of Fraud During the Coronavirus (COVID-19) Pandemic.” The Notice was released in response to the COVID-19 pandemic, which has had a strong impact on the U.S. economy and markets.
construction
ARBITRATION PROVISION IN UNSIGNED SUBCONTRACT NOT ENFORCEABLE, DESPITE PART PERFORMANCE BY SUBCONTRACTOR, WHEN EXPRESS TERMS OF SUBCONTRACT REQUIRED SIGNATURE

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”).

environmental
UNITED STATES SUPREME COURT ISSUES RULING IN CLEAN WATER ACT CASE
On April 23, 2020, the United States Supreme Court issued its decision in County of Maui v.  Hawaii Wildlife Fund, No. 18-260, addressing whether the Clean Water Act (CWA) requires a permit when pollutants originate from a point source, but are conveyed to navigable waters by a nonpoint source, such as groundwater.  The Court found the CWA may require a permit when there is a direct discharge, or a functional equivalent of a direct discharge, of pollutants from a point source into navigable waters.
employment
INTERPLAY OF THE ADA AND RETURNING HIGH RISK EMPLOYEES TO WORK DURING COVID 19

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.

construction
FLORIDA APPELLATE COURT AFFIRMS DISCHARGE OF SUBCONTRACTOR’S MECHANIC’S LIEN WHEN SUBCONTRACTOR FAILED TO SHOW GOOD CAUSE FOR ITS FAILURE TO FORECLOSE

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.





architects and engineers
OWNER'S NEGLIGENCE SUIT AGAINST STRUCTURAL ENGINEER UNTIMELY

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.





employment
PRESIDENT SIGNS CARES ACT ATTACHING STRINGS TO BUSINESS LOANS

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.





environmental
D.C. CIRCUIT REINSTITUTES EPA RESTRICTIONS ON HFCs AS OSDs

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.





securities
FINRA AMENDS ARBITRATION CODE TO EXPAND OPTIONS FOR CUSTOMERS IF A FIRM OR ASSOCIATED PERSON IS OR BECOMES INACTIVE

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. 





construction
SUPREME COURT OF MISSISSIPPI FINDS THAT ITS STATE BOARD OF CONTRACTORS VIOLATED PROCEDURAL DUE PROCESS

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).





environmental
FOURTH CIRCUIT COURT OF APPEALS AGREES BALTIMORE CLIMATE SUIT BELONGS IN STATE COURT

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.





architects and engineers
MARYLAND APPELLATE COURT HOLDS A PRIOR AGREEMENT WAS WITHIN THE SCOPE OF THE ARBITRATION PROVISION IN A SUBSEQUENT AGREEMENT

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.





securities
SEC ISSUES GUIDANCE ON REGULATION BEST INTEREST

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.





employment
OSHA AND CDC GUIDANCE TO EMPLOYERS REGARDING THE CORONAVIRUS

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.





construction
FLORIDA COURT RECOGNIZES GENERAL CONTRACTOR’S RIGHT TO COMMON LAW INDEMNITY
In Brother’s Painting & Pressure Cleaning Corp., Appellant v. Curry-Dixon Construction, LLC, et. al., Appellees, the general contractor Curry-Dixon Construction, LLC (“Curry-Dixon”) and Brother’s Painting & Pressure Cleaning Corporation (“Brother’s Painting”) were both defendants in a lawsuit involving negligence during the course of construction renovations. 2020 WL 559193 (Fla. App. Ct. 2020). Plaintiffs, owners of a condominium unit, originally filed suit against both Curry-Dixon and Brother’s Painting for negligence after a fire occurred during the course of renovations at the condominium complex. In Curry-Dixon’s contract, it agreed that it would “maintain a clean site and dispose of debris in a dumpster or trailer on site.”




employment
DEPARTMENT OF LABOR ISSUES FINAL RULE ON JOINT EMPLOYER STATUS UNDER THE FLSA

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.





environmental
EPA AND U.S. ARMY CORPS OF ENGINEERS RELEASE NAVIGABLE WATERS PROTECTION RULE REDEFINING WATERS OF THE UNITED STATES

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.





architects and engineers
NEW YORK APPELLATE COURT RULES NEGLIGENCE CLAIMS AGAINST ARCHITECT AND ENGINEER ACCRUE WHEN THE CONTRACT TERMINATES RATHER THAN WHEN DAMAGES ARE INCURRED

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.





securities
HIGHLIGHTS FROM THE FINRA 2020 RISK MONITORING AND EXAMINATION PRIORITIES LETTER

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.


workers compensation
ALABAMA COURT OF CIVIL APPEALS FINDS EMPLOYER FAILED TO PROVE EMPLOYEE RETURNED TO WORK MAKING THE SAME OR GREATER AVERAGE WEEKLY WAGE AND THE RETURN TO WORK STATUTE DID NOT APPLY

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.





architects and engineers
INDEMNITY PROVISION REQUIRING ENGINEER TO INDEMNIFY AN OWNER FOR DAMAGE TO PROPERTY MAY ENCOMPASS ECONOMIC LOSSES IN LOUISIANA

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.





employment
EMPLOYERS MAY REQUIRE CONFIDENTIALITY IN WORKPLACE INVESTIGATIONS

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.





environmental
OHIO COURT APPLIES CONSTRUCTIVE SUBMISSION DOCTRINE TO CWA CASE

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.





construction
CONTRACTOR’S BAD FAITH CLAIM PREMISED ON SUBCONTRACTOR PERFORMANCE BOND DOES NOT EXIST UNDER ALABAMA LAW

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”).





securities
FINRA RELEASES DECEMBER 2019 BOARD OF GOVERNORS MEETING REPORT

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.






workers compensation
EXCLUSIVITY PROVISIONS OF THE WORKERS’ COMPENSATION ACT DO NOT BAR CLAIMS OF NEGLIGENCE AND WANTONNES AGAINST THE EMPLOYER FOR CONDUCT OCCURING AFTER THE WORKPLACE INJURY
In Ex parte Burkes Mechanical, Inc., 28 ALW 50-3 (1180402); 12/6/2019, 170-3 (2171022), 4/19/2019, the Employer, Burkes Mechanical, Inc., (Burkes Mechanical) petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to vacate its Order denying its Motion to Dismiss claims of negligence and wantonness asserted against it by Employee Alexsie McCoy, (McCoy) and to enter an Order dismissing those claims.  The Alabama Supreme Court denied the petition.




architects and engineers
FLORIDA APPELLATE COURT HOLDS ARCHITECT’S SUPERVISION WAS SUFFICIENT TO GIVE RISE TO DUTY OWED TO CONTRACTOR

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.





environmental
DISTRICT COURT RULES EPA’S INTERPRETATION OF CLEAN WATER ACT PERMITTING REQUIREMENTS IS REASONABLE

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.





securities
FINRA REQUESTS COMMENT ON A PROPOSED RULE TO LIMIT A REGISTERED PERSON FROM BEING NAMED A CUSTOMER’S BENEFICIARY OR HOLDING A POSITION OF TRUST FOR OR ON BEHALF OF A CUSTOMER

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.





construction
COURT HOLDS THAT SUBCONTRACTOR CANNOT RECOVER FOR UNJUST ENRICHMENT FROM CLIENT OWNERS

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.





employment
ELEVENTH CIRCUIT DISMISSES EQUAL PROTECTION CHALLENGE TO ALABAMA MINIMUM WAGE LAW

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.





environmental
SCOTUS HEARS ORAL ARGUMENT IN COUNTY OF MAUI CLEAN WATER CASE

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.






architects and engineers
NEW HAMPSHIRE SUPREME COURT RULES STATUTE OF REPOSE APPLIES TO INDEMNITY AND CONTRIBUTION CLAIMS AGAINST ARCHITECTS

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.





securities
FINRA PUBLISHES 2019 REPORT ON EXAMINATION FINDINGS AND OBSERVATIONS

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.





construction
TENNESSEE COURT OF APPEALS MODIFIES TRIAL COURT RULING ON FEES OWED UPON DELAY ISSUE

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.





employment
TENTH CIRCUIT COURT OF APPEALS HOLDS ADA PLAINTIFFS DO NOT NEED EXPERT TESTIMONY TO PROVE DISABILITY

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. 





workers compensation
ALABAMA COURT OF CIVIL APPEALS FINDS EMPLOYEE’S FRAUD, OUTRAGE AND CONSPIRACY CLAIMS ARE NOT BARRED BY EXCLUSIVE REMEDY PROVISION OF ALA. CODE SECTION 25 5 53

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).





environmental
MAUI COUNTY VOTES TO SETTLE CLEAN WATER ACT CASE PENDING REVIEW BEFORE THE UNITED STATES SUPREME COURT

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.





construction
GEORGIA APPELLATE COURT REINFORCES CONTRACTUAL WAIVER OF PAYMENT CLAUSE

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.





architects and engineers
ARCHITECT’S NEGLIGENT INSPECTION EXPOSES HIM TO LIABILITY FOR PERSONAL INJURY

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.





employment
U.S. DEPARTMENT OF LABOR ISSUES FINAL OVERTIME RULE

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. 





securities
FINRA PROVIDES GUIDANCE ON DISCLOSURE INNOVATIONS IN ADVERTISING AND OTHER COMMUNICATIONS WITH THE PUBLIC

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.  






securities
FINRA ISSUES GUIDANCE ON MEMBER FIRMS’ SUPERVISORY OBLIGATIONS WHEN PARTICIPATING IN INVESTMENT RELATED ACTIVITIES WITH MUNICIPAL CLIENTS

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.






environmental
ELEVENTH CIRCUIT RULES ALABAMA’S NPDES PERMITTING PARTNERSHIP WITH EPA CAN CONTINUE

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.).





architects and engineers
ENGINEER DID NOT ASSUME RESPONSIBILITY FOR ALL ASPECTS OF DESIGN WHEN HE STAMPED THE DRAWINGS THAT DID NOT INCLUDE A WELD DESIGN

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.





construction
UNITED STATES DISTRICT COURT FINDS THAT CONSTRUCTION DEFECT EXPERTS MAY NOT OFFER LEGAL CONCLUSIONS

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”).





employment
EEOC ISSUES NEW GUIDANCE REGARDING REPORTING NON BINARY EMPLOYEES

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.






environmental
FEDERAL COURT JUDGE REDUCES $75 MILLION VERDICT AGAINST ROUNDUP TO $20 MILLION
A United States District Court Judge for the Northern District of California has reduced an $75 million punitive damages award against Monsanto Company to $20 million in the nation’s first federally-tried Roundup case.  Hardeman v. Monsanto, 3:16-cv-00525 (N.D. Cal., July 15, 2019).  In reducing the award, the Court stated Monsanto deserves to be punished, but that the punitive damages award was constitutionally impermissible.




employment
SCOTUS SET TO RULE WHETHER TITLE VII PROHIBITS DISCRIMINATION ON THE BASIS OF SEXUAL ORIENTATION AND GENDER IDENTITY
The United States Supreme Court recently granted certiorari in a group of three cases challenging the scope of Title VII of the Civil Rights Act of 1964’s (“Title VII”) prohibition on discrimination on the basis of sex. This decision will resolve a conflict among federal circuits as to whether Title VII prohibits employment discrimination on the basis of sexual orientation and gender identity. This topic is currently the subject of uncertainty as many circuits differ on whether the term “sex” encompasses sexual orientation.




securities
FINRA REQUESTS COMMENT ON RULES AND ISSUES RELATING TO SENIOR INVESTORS

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.





construction
MIDDLE DISTRICT OF FLORIDA RULES IN FAVOR OF UNPAID SUB SUBCONTRACTOR
Taylor Industrial Construction v. Westfield Insurance Company involved a general contractor, subcontractor, sub-subcontractors, and a surety disputed over payment after termination of the contract. 2019 WL 3068395 (M.D. Fla. 2019). In May 2016, general contractor Slone Associates, Inc. (“Slone”) was hired to provide construction-related services and materials for the ceiling area of a WalMart Distribution Center (“the Project”). Slone entered into a subcontract with Daniels Welding Services, Inc. (“Daniels”) to perform certain roof joist reinforcement work. Taylor Industrial Construction, Inc. (“Taylor”) was hired by Daniels as a sub-subcontractor to perform welding work, which Taylor began on June 25, 2016.




architects and engineers
UTAH COURT OF APPEALS RULES ECONOMIC LOSS RULE BARS PROPERTY OWNERS’ CLAIMS AGAINST GEOTECHNICAL ENGINEERING FIRM

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.





architects and engineers
TEXAS SUPREME COURT RULES ENGINEER’S CONDUCT EVIDENCED INTENTIONAL WAIVER OF CERTIFICATE OF MERIT REQUIREMENT
In LaLonde v. Gosnell, 2019 WL 2479172 (Tex. June 14, 2019), the Texas Supreme Court held an engineer’s engagement in the judicial process, through the completion of discovery and until one month before trial, waived the Certificate of Merit requirements.




environmental
D.C. CIRCUIT UPHOLDS RCRA’S TRANSFER-BASED EXCLUSION FOR RECYCLED SOLID WASTE
The D.C. Circuit has upheld an EPA rule that classifies as "recycled" certain hazardous material sent to a third-party reclamation facility and thus exempt from the Resource Conservation and Recovery Act (RCRA) regulations governing discarded waste.  California Communities Against Toxics, et al., v. EPA, et al., No. 18-1163 (D.C. Cir., July 2, 2019).




construction
ALABAMA COURT HOLDS GENERAL CONTRACTOR NEED NOT PAY SUBCONTRACTOR WHEN AGREEMENT WAS ILLEGAL EVEN WHEN SUBCONTRACTOR PERFORMED WORK

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.





employment
EEOC UPDATES INFORMATION REGARDING NEW PAY DATA REPORTING RULE
In 2016 the Equal Employment Opportunity Commission (“EEOC”) adopted a controversial rule requiring employers with over 100 employees to report pay data and hours worked broken down by sex and race as part of annual EEO-1 reporting obligations. On July 2, 2019, the EEOC updated its website to provide additional information and about new pay data reporting requirements and provided sample forms. (https://eeoccomp2.norc.org/ ) The website portal opened to employers to begin submissions on July 15, 2019.  The deadline for employers to submit the data is September 30, 2019.

securities
FINRA ISSUES GUIDANCE ON COOPERATION BY BROKER DEALERS AND BROKERAGE FIRMS DURING REGULATORY INVESTIGATIONS

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.





workers compensation
A PETITION FOR WRIT OF MANDAMUS IS NOT THE PROPER REMEDY FOR REQUESTING REVIEW OF DISCOVERY ORDERS

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. 






environmental
U.S. SUPREME COURT GRANTS REVIEW OF MONTANA SUPERFUND SITE RULING
The U.S. Supreme Court has granted a petition for writ of certiorari to review questions regarding clean-up activities required by the U.S. Environmental Protection Agency (“EPA”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”).  Atlantic Richfield Co. v. Christian, No. 17-1498.  In the suit, Atlantic Richfield seeks to overturn a decision by the Montana Supreme Court which allows private landowners to challenge the EPA’s cleanup plan at one of the nation’s largest Superfund sites.




employment
ALABAMA ENACTS NEW EQUAL PAY ACT TO PREVENT WAGE DISPARITY
On June 11, 2019, Alabama Governor Kay Ivey signed a new law that prohibits employers from paying less for the same work on the basis of gender or race. The new law, titled the Clarke-Figures Equal Pay Act (the “Act”), makes Alabama the 49th state to enact a state law against wage inequality, with only Mississippi remaining. The Act will go into effect on September 1, 2019.


securities
SEC ADOPTS RULES AND INTERPRETATIONS REGARDING BROKER DEALER AND INVESTMENT ADVISER STANDARDS OF CONDUCT
On June 5, 2019, the SEC voted to adopt a package of rulemakings and interpretations regarding broker dealers’ and investment advisers’ standards of conduct, including new Regulation Best Interest, new Form CRS Relationship Summary, and two interpretations under the Investment Advisers Act of 1940.




architects and engineers
FLORIDA APPELLATE COURT HOLDS STATUTE OF REPOSE DOES NOT APPLY TO CLAIM ALLEGING NEGLIGENT INSPECTION
In Manney v. MBV Engineering, Inc., 2019 WL 2079379 (Fla. 5th DCA May 10, 2019), the Fifth District Circuit Court of Appeals of Florida held the statute of repose did not apply to a homeowner’s claim against an engineer for negligently inspecting a newly constructed home because the inspection did not qualify as the design, planning or construction of an improvement to real property.




construction
GEORGIA SUPREME COURT UPHOLDS LONGSTANDING ACCEPTANCE DOCTRINE IN NEGLIGENT CONSTRUCTION CASE
In Thomaston Acquisition, LLC v. Piedmont Construction Group, Inc., Georgia’s Supreme Court addressed the scope of the “acceptance doctrine” in negligent construction cases. 2019 WL 2332043 (Ga. 2019). Thomaston Acquisition, LLC (“Thomaston”) was the subsequent purchaser of an apartment complex and, after purchase, it discovered that the roof and HVAC system had been negligently constructed. Thomaston’s purchase contract with the seller included an “as is” clause. Thomaston filed suit against Piedmont Construction Group, Inc. (“Piedmont”), the original contractor who constructed the complex, alleging negligent construction and breach of contract/implied warranty.




workers compensation
ATTORNEYS AARON ASHCRAFT AND JOHN C. WEBB PREVAILED ON A RES JUDICATA ARGUMENT, OBTAINING SUMMARY JUDGMENT IN A WORKERS’ COMPENSATION CASE

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.





construction
MIDDLE DISTRICT OF FLORIDA FINDS THAT THE FLORIDA DECEPTIVE TRADE AND UNFAIR PRACTICES ACT PROTECTS GENERAL CONTRACTORS, NOT JUST CONSUMERS
In Continental 332 Fund, LLC, et al. v. Albertelli Construction Inc., et al., the Middle District of Florida analyzed Albertelli Construction, Inc.’s (“Albertelli”) claims against third-party defendant Continental Properties Company, Inc. (“Continental”) 2019 WL 2009369 (M.D. Fla. 2019). General contractor Albertelli filed third-party claims against Continental, one of which alleged a violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). Continental then filed a motion to dismiss, arguing that that Albertelli, a business, did not have standing to bring a claim under the FDUTPA.




employment
ELEVENTH CIRCUIT AFFIRMS APPLICATION OF MOTOR CARRIER EXEMPTION TO INTRASTATE DRIVERS
The Motor Carrier Exemption of the Fair Labor Standards Act (“FLSA”) provides a defense to many overtime claims by interstate truck drivers and others involved in the interstate shipment of goods.  The exemption is not, however, limited to drivers who cross state lines.  Rather, the exemption also applies to intrastate drivers as long as the drivers complete one leg of a larger interstate transport of goods.
environmental
CALIFORNIA JURY AWARDS 2 BILLION IN FAVOR OF COUPLE IN ROUNDUP CANCER TRIAL
A California jury has awarded a $2.055 billion verdict in favor of a California couple, finding Monsanto’s product Roundup likely caused the couple’s cancer.  Pilliod v. Monsanto Co., Case No. RG-1786272 (Cal. Super. Ct., Alameda Division).  This is Bayer AG’s third consecutive Roundup trial loss since mid-2018 in cases involving claims the product caused cancer.




securities
FINRA REQUESTS COMMENT ON PROPOSED RULE 4111 IMPOSING ADDITIONAL OBLIGATIONS ON FIRMS WITH A SIGNIFICANT HISTORY OF MISCONDUCT
FINRA is requesting comment on proposed Rule 4111 (Restricted Firm Obligations) that would impose obligations, including financial requirements, on designated member firms that cross specified numeric disclosure-event thresholds. FINRA believes that the proposal would promote investor protection and market integrity and provide another tool to incentivize broker dealers to comply with regulatory requirements and to pay arbitration awards.
architects and engineers
MAINE FEDERAL DISTRICT COURT HOLDS ECONOMIC LOSS DOCTRINE PRECLUDES NEGLIGENCE ACTION
In Fletch’s Sandblasting & Painting, Inc. v. Fay, Spofford, and Thorndike LLC, 2019 WL 847731 (D.Me. Feb. 21, 2019), the Federal District Court held that a subcontractor that was not in contractual privity with an engineer could not seek to recover its economic losses caused by the engineer’s alleged negligent design due to the economic loss doctrine.




workers compensation
TRIAL COURT NOT BOUND BY IMPAIRMENT RATINGS ASSIGNED BY TREATING PHYSICIAN
In Tuscaloosa County v. Beville, 28 ALW 170-3 (2171022), 4/19/2019, Employee Chaka Beville (“Beville”) slipped and fell while working in the course and scope of her employment at the Tuscaloosa County jail in 2014, injuring her left wrist.  She was treated by her authorized treating physician, Dr. Buckley, who performed surgery and later ordered a Functional Capacities Evaluation (“FCE”).




employment
ATTORNEYS FROM LGWM SUPPORT CAHABA VALLEY HEATH CARE SEE MORE SMILES BANQUET
Attorneys from LGWM’s Birmingham office attended Cahaba Valley Health Care’s annual See More Smiles Fundraising Breakfast. LGWM’s Brittany Herring serves as a board member for Cahaba Valley Health Care.  The organization provides free dental and vision services for low-income individuals in Jefferson and Shelby Counties. Taffi Stewart, Sarah Redmond and Hannah Stokes also attended the fundraising event.
environmental
EIGHTH CIRCUIT UPHOLDS 11 MILLION DOLLAR CERCLA JUDGMENT OVER SALE OF CONTAMINATED BUILDING
The Eighth Circuit for the U.S. Court of Appeals has upheld an $11 million judgment entered against two subsidiaries of Titan International (collectively “Titan”) by a lower court which ruled Titan had improperly sold contaminated buildings to avoid cleanup.  United States v. Dico, Inc., No. 17-3462 (8th Circuit 2019).  The Court’s holding affirms the lower court’s judgment that Titan violated the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).




employment
ELEVENTH CIRCUIT TO CLARIFY 2015 SUPREME COURT RULING IN UPCOMING PREGNANCY BIAS CASE
In February of 2019, a team of lawyers from the ACLU filed an opening brief in a new Eleventh Circuit pregnancy bias action. This new action involves an Alabama EMT named Kimberlie Durham (“Ms. Durham”), who has sued her company for alleged pregnancy discrimination. She alleges that her employer did not assign her to a less strenuous job during her pregnancy.
construction
SUPREME COURT OF ALABAMA FINDS THAT AN ARBITRATOR HAS POWER TO DETERMINE LOCATION OF ARBITRATION PROCEEDING BETWEEN CONTRACTORS FROM DIFFERENT STATES
In Alliance Investment Company, LLC v. Omni Construction Company, Inc., the Alabama Supreme Court was faced with analyzing who has the power to determine the location of an arbitration proceeding –the arbitrator or the Madison Circuit Court. 2019 WL 1219416 (Ala. 2019).




architects and engineers
MISSISSIPPI SUPREME COURT RULES ENGINEER DID NOT HAVE DUTY TO WARN OF DANGEROUS CONDITIONS
In Waltman v. Engineering Plus, Inc., 2019 WL 1071533 (Miss. March 7, 2019), the Mississippi Supreme Court held that an engineering firm providing engineering services for a roof repair did not have a duty to warn a roofing company’s employee of a dangerous condition.




workers compensation
THE ALABAMA COURT OF CIVIL APPEALS REVERSES PAIN MANAGEMENT ORDER BY TRIAL COURT
In Ex parte Trusswalk, Inc., No. 2180266, 2019 WL 1415997 (Ala. Civ. App.), the Alabama Court of Civil Appeals reviewed a trial court’s order directing an employer to provide pain management treatment for a workers’ compensation claimant.




insurance fraud and special investigation
JOHN C. WEBB AND DEVON K. RANKIN PRESENT AT THE IASIU AL MARCH MEETING
John Webb and Devon Rankin recently presented at the International Association of Special Investigation Units-Alabama Chapter's ("IASIU") March Training event in Birmingham, Alabama.
employment
ELEVENTH CIRCUIT CLARIFIES COMPARATOR STANDARD IN TITLE VII CASES
On March 21, 2019, the full en banc U.S. Court of Appeals for the Eleventh Circuit clarified that in order to establish a prima facie case of workplace discrimination through alleged preferential treatment of a comparator outside of the plaintiff’s protected class...




environmental
UNITED STATES SUPREME COURT GRANTS CERTIORARI IN NINTH CIRCUIT CWA CASE
The United States Supreme Court has granted certiorari in County of Maui, HI v. Hawaii Wildlife Fund, et al., No. 18-260, a Ninth Circuit case, as to the question of whether the Clean Water Act (“CWA”) requires a permit when pollutants originate from a point source discharge, but are conveyed to navigable waters by a nonpoint source, such as groundwater.  The Court will determine whether the National Pollution Discharge Elimination System (NPDES) program’s reach is limited, covering only “direct” discharges to navigated waterways...




construction
ELEVENTH CIRCUIT INTERPRETS GEORGIA’S PROMPT PAY ACT
In Fatt Katt Enterprises, Inc. v. Rigsby Construction, Inc., a dispute arose between the general contractor, Rigsby, and one of its subcontractors, Fatt Katt, over Rigsby’s failure to pay Fatt Katt amounts allegedly owed under a construction contract. 2019 WL 972043 (11th Cir. 2019). Fatt Katt asserted Rigsby violated the State of Georgia’s Prompt Pay Act, O.C.G.A § 13-11-1, et. seq., and sought damages for work that Fatt Katt allegedly performed.




employment
DEPARTMENT OF LABOR DISCLOSES PROPOSED UPDATED OVERTIME RULES
The United States Department of Labor (“DOL”) issued a long-awaited proposed overtime rule and new exemption threshold under the Fair Labor Standards Acts (“FLSA”) on March 7, 2019.  The proposed rule raises the salary threshold for overtime eligibility from $23,660.00 to $35,308.00, or $679.00 per week.  As such, employees earning under $35,308.00 a year must be paid overtime for hours worked in excess of 40 each week.  Above this salary level, eligibility for overtime varies based on job duties.
architects and engineers
RHODE ISLAND SUPREME COURT RULES ENGINEER THAT PREPARED DOCUMENTS FOR PUBLIC BIDDING DID NOT OWE DUTY TO GENERAL CONTRACTOR
In John Rocchio Corporation v. Pare Engineering Corporation, 2019 WL 575822 (R.I. Feb 13, 2019), the Warwick Sewer Authority (“WSA”) contracted with Pare Engineering Corporation (“Pare”) to provide pre-bid services, including preparing a Request For Proposal (“RFP”) to be provided to general contractors submitting bids.  Pare completed the RFP and WSA received bids from five companies.  John Rocchio Corporation (“Rocchio”) submitted the lowest bid and DiGregorio, Inc. (“DiGregorio”) submitted the second lowest bid.




securities
FINRA EXTENDS DEADLINE FOR BROKER DEALERS TO SELF REPORT 529 SAVINGS PLAN VIOLATIONS AS PART OF NEW INITIATIVE
FINRA recently announced a self-reporting initiative to promptly compensate harmed investors and promote firms’ compliance with the rules governing the recommendation of 529 savings plans.  529 plans are tax-advantaged plans that are designed to encourage saving for the future educational expenses of a designated beneficiary, and shares are commonly sold in different classes, with fees and expenses that vary widely from plan to plan.
coverage
GEORGIA SUPREME COURT RULES IN FAVOR OF INSURER ON FAILURE TO SETTLE CLAIM

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...






construction
SUBCONTRACTOR MAY BE REQUIRED TO PAY ATTORNEYS’ FEES DESPITE VERDICT IN ITS FAVOR

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...





architects and engineers
TEXAS COURT OF APPEALS RULES ENGINEERS MAY NOT PROVIDE CERTIFICATES OF MERIT IN SUITS AGAINST ARCHITECTS
In Kayne Anderson Capital Advisors, L.P. v. Hill & Frank, Inc., 2018 WL 6613656 (Tex. Ct. App., Dec. 18, 2018), the Texas Court of Appeals held an engineer’s affidavit does not satisfy the Certificate of Merit requirement in a suit against an architect.




environmental
TEXAS SUPREME COURT HOLDS JOINT VENTURE LIABILITY CAP INAPPLICABLE TO DEFENSE COSTS
On January 25, 2019, the Texas Supreme Court issued a unanimous ruling reversing the lower court’s holding regarding an insurers’ obligation to pay a significant amount of legal defense costs that resulted from its liability in the Deepwater Horizon oil spill. See Anadarko Petroleum Corp. v. Houston Casualty Co., No. 16-1013 (Tex. Jan. 25, 2019). The Court ruled that a joint-venture liability cap in an insurance policy did not limit coverage for Anadarko’s defense expenses related to the Deepwater Horizon oil spill where the provision only capped “liability”—an undefined term.
employment
ELEVENTH CIRCUIT REVERSES DISCRIMINATION CLAIM LEADING TO A FULL COURT REVIEW OF CHALLENGE TO ALABAMA LAW
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 has agreed to a full-court review to decide the validity of a 2015 Alabama Law prohibiting cities or other local municipalities from adopting their own laws concerning minimum wages, leave benefits, collective bargaining and other employment related issues. The law was originally enacted in response to an ordinance by the Birmingham City Council that increased the minimum wage for all employees...



securities
HIGHLIGHTS FROM THE FINRA 2019 RISK MONITORING AND EXAMINATION PRIORITIES LETTER

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.





workers compensation
THE ALABAMA SUPREME COURT REVERSES PRIOR PRECEDENT AND CLARIFIES VENUE IN A WORKERS’ COMPENSATION ACTION AGAINST A FOREIGN CORPORATION
Venue for actions against corporations, both domestic and foreign, are governed by Ala. Code §6-3-7(a)(3) (1975). The statute provides an action may be brought against a corporation in “the county in which the plaintiff resided, or if the plaintiff is an entity other than an individual, where the plaintiff had its principal office in this state, at the time of the accrual of the cause of action, if such corporation does business by agent in the county of the plaintiff's residence.”
construction
FLORIDA DISTRICT COURT OF APPEALS AFFIRMS THAT A CONDOMINIUM NEED NOT BE UNINHABITABLE TO BREACH THE IMPLIED WARRANTY OF HABITABILITY

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.





securities
FINRA APPROVES FILING WITH THE SEC RULES PROHIBITING COMPENSATED NON ATTORNEY REPRESENTATIVES FROM PRACTICING IN FINRA ARBITRATION AND MEDIATION
FINRA currently allows non-attorney representatives to work with investors filing securities arbitration claims and throughout mediation.  FINRA’s Board of Governors recently approved filing with the SEC amendments to the Codes of Arbitration and Mediation Procedure which would prohibit non-attorney representatives from practicing in the arbitration and mediation forums. 




environmental
NIGHTTIME NEARS FOR DUSKY GOPHER FROG?

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.





architects and engineers
DISTRICT COURT OF APPEALS OF FLORIDA UPHELD THE ADMISSIBILITY OF EXPERT TESTIMONY PURSUANT TO DAUBERT BECAUSE THE TESTIMONY WAS NOT BASED ON NEW SCIENTIFIC METHODS

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





employment
NINTH CIRCUIT HOLDS TIP CREDIT CANNOT APPLY TO CERTAIN TYPES OF WORK
The Fair Labor Standards Act of 1938 (“FLSA”) establishes minimum wage, overtime pay, record keeping requirements and child labor standards.  It also allows employers to take a “tip credit,” in certain tipped occupations, such as a server, in order to offset the employer’s obligation to pay hourly minimum wage.  Employers can pay as little as $2.13 per hour to tipped employees, but if the employee’s wages and tips combined do not meet the minimum wage, the employer must make up the difference.




environmental
SUPREME COURT ASKS SOLICITOR GENERAL TO WEIGH IN ON TWO CLEAN WATER ACT CASES
The United States Supreme Court has asked the Solicitor General to weigh in on two petitions for writ of certiorari -- one Fourth Circuit case, Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637 (4th Cir. 2018), and the other a Ninth Circuit case, Hawai’i Wildlife Fund v. County of Maui, 886 F.3d 737 (9th Cir. 2018).  The issue is whether the scope of the Clean Water Act extends to pollutants that travel through groundwater before reaching navigable waters.




employment
ELEVENTH CIRCUIT EXPANDS APPLICATION OF THE FLSA
After a recent Eleventh Circuit decision in Asalde v. First Class Parking Systems LLC 894 F.3d 1248 (11th Cir. 2018), more employers are subject to the requirements of the Fair Labor Standards Act (“FLSA”). In Asalde, Plaintiffs were valet car drivers who sued their employer alleging violations of the FLSA. The trial court granted summary judgment for the employer, reasoning that because parking cars in Florida is a local activity, there is no interstate commerce and, therefore, no FLSA coverage.




construction
ALABAMA SUPREME COURT ENFORCES FORUM SELECTION CLAUSE
In Ex parte Killian Constr. Co., No. 1170696, 2018 WL 5730138, at *1 (Ala. Nov. 2, 2018), the Alabama Supreme Court issued a writ directing the lower court to dismiss the claims against Killian Construction Company (“Killian”) based on improper venue.  The Court found the forum selection clause in the parties contract was enforceable, despite the case having almost no contracts with the contractually selected forum.




securities
FINRA PUBLISHES SECOND ANNUAL REPORT ON EXAMINATION FINDINGS
FINRA published its 2018 Report on Examination Findings, its second annual report detailing observations from recent examinations of broker-dealer firms that it considers worth highlighting because of their potential significance, frequency, and impact on investors and the markets.  It also describes practices FINRA has observed to be effective in certain circumstances. 




architects and engineers
PENNSYLVANIA SUPERIOR COURT HOLDS THE CERTIFICATE OF MERIT REQUIREMENT DOES NOT APPLY TO THIRD PARTY CLAIMS RELATED TO PLAINTIFF’S CLAIMS
In Kelly Systems, Inc. v. Leonard S. Fiore, Inc., 2018 WL 5629644 (Pa. Super. Ct. October 31, 2018), the Pennsylvania Superior Court held the requirement to file a Certificate of Merit to support a professional negligence claim does not apply to third party complaints.




construction
SUBCONTRACTOR LEFT WITH NO REMEDY AGAINST HOMEOWNER BASED UPON PLAIN LANGUAGE OF TEXAS’ MATERIALMAN’S LIEN PROVISIONS

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.





environmental
KIDS’ CLIMATE CHANGE SUIT TEMPORARILY DELAYED IN NINTH CIRCUIT
The trial in a climate change lawsuit brought by 21 youths has been stayed after the Ninth Circuit Court of Appeals granted the government’s request that it consider halting the case.  Juliana v. United States, No. 18-73014 (November 8, 2018), was filed in 2015 and contends the federal government pursued energy policies that caused climate change even though it has known for more than fifty years that carbon emissions destabilize the climate, and that the failure to protect future generations from the effects of climate change violated their generations’ constitutional right to live in a “climate system capable of sustaining human life.”




architects and engineers
TEXAS COURT OF APPEALS HOLDS THAT AGGREGATE ANALYSIS DOES CONSTITUTE THE PRACTICE OF ENGINEERING
In Ronald R. Wagner & Co., LP v. Apex Geoscience Inc. and Braun Intertec Corporation, 2018 WL 4344713 (Tex. Ct. App., Sept. 18, 2018), the Texas Court of Appeals held that preparation of an aggregate analysis report was not exempt from the Texas Engineering Practice Act.  Ronald R. Wagner & Co., LP (“Wagner”), a contractor specializing in the application of pavement sealer and pavement surface treatment, bid a road project for the Texas Department of Transportation (“TXDOT”).  Wagner received quotes for materials for the project from Advantage Asphalt of Lubbock, LLC (“Advantage”) and Advanced Pavement Maintenance, Ltd. (“Advanced”), which offered to supply Wagner with B-4 Aggregate.  Apex Geoscience, Inc. (“Apex”), who was acquired by Braun Intertec Corporation (“Braun”), issued an Aggregate Analysis Report finding the B-4 aggregates met the TXDOT specifications for the project.




employment
SUPREME COURT HOLDS ADEA STILL APPLIES TO SMALL COUNTY EMPLOYER
The United States Supreme Court resolved a split among Circuit Courts on the question of whether the Age Discrimination in Employment Act (“ADEA”) applies to state and federal political entities with fewer than 20 employees.  In Mount Lemmon Fire Dist. v. Guido, 586 U.S. ____ (2018), the Court unanimously held that the ADEA applies to all federal and state entities, regardless of the size of those entities’ workforce.




securities
SEC’S OWN INVESTOR ADVISORY COMMITTEE RECOMMENDS SEC CLARIFY PROPOSED REGULATION BEST INTEREST
On April 18, 2018, the SEC proposed a new rule under the Securities Exchange Act of 1934 entitled “Regulation Best Interest” to establish a standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities to the retail customer.




construction
SOUTH CAROLINA COURT OF APPEALS AFFIRMS DECISION TO ALLOW JURY TO DETERMINE DATE LATENT DEFECTS WERE FIRST DISCOVERED
In Stoneledge at Lake Keowee Owners' Assoc., Inc. v. IMK Dev. Co., LLC, No. 2015-000417, 2018 WL 4905772, at *1 (S.C. Ct. App. Oct. 10, 2018), the South Carolina Court of Appeals affirms the trial court’s decision to deny a request for a directed verdict and allow the jury to determine whether or not the claims were time-barred.




environmental
SIXTH CIRCUIT REJECTS HYDROLOGICAL CONNECTION THEORY AS BASIS FOR CWA LIABILITY
The 6th U.S. Circuit Court of Appeals has ruled the Clean Water Act (CWA) does not apply to pollutants that travel through groundwater before entering navigable waters.  Tennessee Clean Water Network, et al. v. Tennessee Valley Authority (TVA), Case No. 17-6155 (6th Cir., September 24, 2018).  The ruling comes less than two weeks after a similar ruling by the 4th Circuit, which found discharge of arsenic from a coal ash storage site through groundwater into surrounding waters did not violate the CWA and did not require a NPDES permit.  Sierra Club v. Virginia Electric & Power Co., No. 17-1895 (4th Cir., September 12, 2018).




securities
FINRA ESTABLISHES A PER ARBITRATOR FEE AND HONORARIUM FOR LATE CANCELLATION OF PREHEARING CONFERENCES
The SEC approved amendments to FINRA’s customer and industry arbitration rules to charge parties who request cancellation of a prehearing conference within three business days of the prehearing conference a $100 per-arbitrator fee. The amendment also provides for a $100 honorarium to each arbitrator scheduled to attend the cancelled prehearing conference.
employment
TENTH CIRCUIT AFFIRMS COURTS CAN HEAR SUITS WITHOUT EEOC CHARGES
Most cases involving allegations of workplace discrimination under the federal anti-discrimination statutes are first brought to light through a plaintiff’s filing of a Charge with the Equal Employment Opportunity Commission (“EEOC”).  Through Title VII, Congress established a procedure requiring an individual seeking to file an employment discrimination claim to first file a charge with the EEOC. Id. §2000e-5(e)(1).  If plaintiffs do not fulfill this requirement before filing suit under the federal anti-discrimination statutes, their suits are typically dismissed.




architects and engineers
LOUISIANA FEDERAL DISTRICT COURT RULES CONTRACTOR COULD NOT RECOVER FOR ACTS OF CONTRACT ADMINISTRATION MADE BY ARCHITECT IN GOOD FAITH
In Patriot Contracting, LLC v. Star Insurance Company, 2018 WL 1123586 (U.S. Dist. Ct., E.D. La.), the United States District Court for the Eastern District of Louisiana ruled that exculpatory clauses in the general contract benefitting the architect were enforceable.




environmental
ENERGY COMPANY’S COAL ASH PONDS NOT SUBJECT TO CLEAN WATER ACT
The 4th U.S. Circuit Court of Appeals has ruled discharge of arsenic from a coal ash storage site through groundwater into surrounding waters does not violate the U.S. Clean Water Act and does not require a NPDES permit.  Sierra Club v. Virginia Electric & Power Co., No. 17-1895 (4th Cir., September 12, 2018).  A three-judge panel reversed a lower court's finding that Dominion Virginia Power could be liable for leaks from coal ash dumps at Chesapeake Energy Center, which closed in 2014.  The Court held Dominion's coal ash landfill and settling ponds did not qualify as a "point source" under the Clean Water Act because the arsenic flowed from sites through groundwater before reaching the Elizabeth River and Deep Creek.



construction
FLORIDA APPELLATE COURT CLARIFIES CHOICE OF DAMAGES A PARTY IS ENTITLED TO FOR MATERIAL BREACH OF CONTRACT
In Forbes v. Prime Gen. Contractors, Inc., No. 2D17-353, 2018 WL 4265287, at *1 (Fla. Dist. Ct. App. Sept. 7, 2018), Florida’s Second District Court of Appeals rejected a trial courts decision to only consider benefit of the bargain damages, holding that in cases involving a material breach of the contract the non-breaching party has the option to elect either benefit of the bargain damages or damages to put them in the place they would have been had the contract never been formed.




architects and engineers
DESIGN PROFESSIONALS MAY OWE A DUTY DIRECTLY TO CONTRACTORS FOR DEFECTIVE PLANS AND SPECIFICATIONS
In Suffolk Construction Co., Inc v. Rodriquez Quiroga Architects, et al., 2018 WL 1335185 (U.S. Dist. Ct., S.D. Fla. Mar 15, 2018), the United States District Court for the Southern District of Florida held that an architect and engineer breached owed a duty to the contractor by providing design plans which the contractor relied upon.




employment
ELEVENTH CIRCUIT AFFIRMS CONVINCING MOSAIC STANDARD
Most cases involving allegations of discipline or discharge based on discrimination are brought under the disparate treatment theory.  In a case of disparate treatment under Title VII, an individual initially establishes a prima facie case of intentional discrimination.  In the Eleventh Circuit, a plaintiff may establish a prima facie case of discrimination by showing: (1) they are qualified; (2) they suffered an adverse employment action such as termination or discipline; and (3) similarly situated employees outside of their protected class were treated more favorably.
securities
THE SEC APPROVES FINRA RULES AMENDMENTS FOR SIMPLIFIED ARBITRATIONS
The SEC recently approved a rule amendment to create an intermediate form of adjudication for small claims.  The proposal amends Rules 12600 and 12800 of the FINRA Code of Arbitration Procedure for Customer Disputes and Rules 13600 and 13800 of the FINRA Code of Arbitration Procedure for Industry Disputes.  The amendments provide parties with claims of $50,000.00 or less an opportunity to argue their cases before a single arbitrator in a shorter, more limited telephonic hearing format.




workers compensation
SIA K NEWMAN SUCCEEDS AT TRIAL IN CHALLENGING PLAINTIFF’S CLAIM OF 100 PERCENT PERMANENT AND TOTAL DISABILITY

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.

architects and engineers
INDIANA FEDERAL DISTRICT COURT CLARIFIES THE REQUIREMENTS FOR APPLICATION OF ECONOMIC LOSS DOCTRINE
In City of Whiting, Indiana v. Whitney, Bailey, Cox, & Magnani, LLC, 2018 WL 1400890 (U.S. Dist. Ct., N.D. Ind. March 20, 2018), the United States District Court for the Northern District of Indiana held that an owner’s tort claim for damage caused by the failure of a retaining wall designed by a subconsulting engineering firm was barred because all claimed damages were to the overall project and therefore barred by Indiana’s economic loss doctrine.




employment
DEPARTMENT OF LABOR ISSUES NEW GUIDANCE REGARDING NURSES AND CAREGIVERS AS INDEPENDENT CONTRACTORS
Health care registry companies provide matchmaking and referral services for qualified, pre-screened and vetted home caregivers.  They often also provide administrative services.  As part of the "gig economy," health care registries often tread a fine line between classifying caregivers as independent contractors or employers.
construction
COURT OF APPEALS OF TENNESSEE AFFIRMS RULING PRECLUDING RECOVERY BY DEVELOPER DUE TO IT COMMITTING A PRIOR MATERIAL BREACH OF THE SAME CONTRACT
In The Manor Homes, LLC v. Ashby Communities, LLC, et al., No. M201701369COAR3CV, 2018 WL 3814981 (Tenn. Ct. App. Aug. 10, 2018), the Court of Appeals of Tennessee affirmed a ruling precluding recovery by the developer due to it committing a prior material breach of the contract. The case involved the construction of a house in Arrington, Tennessee. Ashby Communities, LLC (“Ashby”) was the developer and owner. Ashby entered into a contract with The Manor Homes, LLC (“Manor Homes”) to serve as its builder.
securities
FINRA SEEKS COMMENT ON PROPOSED AMENDMENTS TO FIRM AND ASSOCIATED PERSONS DOCUMENT PRODUCTION LIST
FINRA is requesting comment on proposed amendments to the Firm and Associated Persons Document Production List and Discovery Guide. The proposed amendments to the Discovery Guide require firms and associated persons, upon request, to produce documents concerning third-party insurance coverage in a customer arbitration proceeding. These proposed amendments would strictly limit the circumstances under which insurance coverage information could be presented to the arbitrators.
environmental
JURY AWARDS $289 MILLION IN FIRST MONSANTO ROUND UP CASE
A California State Superior Court jury has found Monsanto’s Roundup and Ranger Pro herbicides contributed to a school groundskeeper’s lymphoma and awarded the plaintiff a combined $289 million in compensatory and punitive damages in a landmark suit against the company, which has denied links between its herbicides and cancer for decades.  Johnson v. Monsanto, et al., Case No. CGC16550128.  The verdict included $250 million in punitive damages, $2.3 million for past and future economic losses, and $37 million for pain, suffering and loss of life expectancy.
environmental
FOURTH CIRCUIT WEIGHS IN ON CLEAN WATER ACT’S CONSTRUCTIVE SUBMISSION DOCTRINE

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.





construction
ALABAMA SUPREME COURT UPHOLDS FORUM SELECTION CLAUSE
In Ex parte Consol. Pipe & Supply Co., Inc., No. 1170050, 2018 WL 3083719 (Ala. June 22, 2018), the Alabama Supreme Court overturned an order granting a motion to transfer venue based upon a valid forum-selection clause. The Court held that the doctrine of forum non conveniens cannot be used to frustrate an otherwise valid forum-selection clause.




architects and engineers
THE COURT OF APPEALS OF MICHIGAN HOLDS THAT AN ARCHITECT OWED NO COMMON LAW DUTY TO OWNER FOR ALLEGED PROFESSIONAL NEGLIGENCE
In Auburn Hills Tax Increment Finance Authority v. Haussman Construction Co., 2018 WL 385057 (Mich. Ct. App. January 11, 2018), the Michigan Court of Appeals held that the owner of a construction project could not maintain a professional negligence claim against the architect for failing to adequately review payment applications.




securities
FINRA ANNOUNCES INITIATIVE TO TRANSFORM REGISTRATION SYSTEMS THAT WILL LEAD TO ENHANCED EFFICIENCIES AND REDUCED COMPLIANCE COSTS FOR FIRMS
On June 14, 2018, FINRA announced details of a multi-phased effort to overhaul its registration and disclosure programs, including the Central Registration Depository (CRD). FINRA operates the CRD for the U.S. securities industry and its regulators and it provides the backbone of BrokerCheck.
employment
SUPREME COURT STRIKES DOWN FAIR SHARE FEES FOR PUBLIC SECTOR UNIONS
On June 27, 2018, the United States Supreme Court decided in a 5-4 decision that public sector unions may no longer collect “fair share” fees from non-members.  The decision in Janus v. American Federation of State, County and Municipal Employees, Council 31, has broad implications for public sector unions and employers.




workers compensation
THE COURT OF CIVIL APPEALS CONFIRMS THAT AN EVIDENTIARY HEARING MUST BE CONDUCTED BEFORE A TRIAL JUDGE CAN COMPEL MEDICAL TREATMENT
In Ex parte Sears Roebuck and Co., 27 ALW 20-6 (2170632), 5/11/2018, the employee, Jeffrey Donaldson, (“Donaldson”), filed a Complaint for workers’ compensation benefits against his employer, Sears Roebuck and Co. (“Sears”) alleging that he suffered a compensable injury to his back while repairing an air-ventilation unit in 2016.




architects and engineers
THE SECOND CIRCUIT HOLDS A PROVISION FOR SEALED DRAWINGS DOES NOT SUFFICIENTLY LINK THE OWNER AND DESIGN PROFESSIONAL FOR PURPOSES OF CONTRACTUAL PRIVITY EQUIVALENCE TO ALLOW A DIRECT SUIT BY THE OWNER AGAINST THE DESIGN PROFESSIONAL

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.





employment
SUPREME COURT AFFIRMS VALIDITY OF EMPLOYMENT AGREEMENTS CONTAINING WAIVERS FOR CLASS OR COLLECTIVE ACTIONS
On May 21, 2018, in Epic Systems Corp. v. Lewis, the Supreme Court upheld the enforceability of arbitration agreements containing class and collective action waivers of wage and hour disputes.  In deciding the case, the majority held that the Federal Arbitration Act (“FAA”) mandates the enforcement of arbitration agreements and the right to pursue class or collective relief is not a protected concerted activity under Section 7 of the National Labor Relations Act (“NLRA”).




construction
ALABAMA LEGISLATURE EXPANDS SCOPE OF HOME BUILDERS LICENSURE BOARD ACT TO CLARIFY SCOPE OF LICENSURE REQUIREMENT FOR HOME IMPROVEMENTS AND NOW GOVERNS ALL RESIDENTIAL ROOFING COMPANIES
The Alabama legislature recently amended provisions of the Home Builders Licensure Board Act (the “HBLB Act”) to expand the scope of home building projects and companies required to comply with the HBLB Act.  The HBLB Act was originally enacted to protect individual homeowners when engaging a Construction company to either build a new home or during a remodel. The HBLB Act required General Contractors to obtain a license from the Home Builders Licensure Board (the “Board”) prior to entering into contracts with perspective clients.
securities
ENHANCEMENTS TO FINRA’S DISCLOSURE REVIEW VERIFICATION PROCESS PERMITS FIRMS TO RELY ON PROCESS FOR COMPLIANCE WITH PUBLIC FINANCIAL RECORDS SEARCHES OF APPLICANTS AND REGISTERED PERSONS
Beginning on July 9, 2018, FINRA is enhancing its disclosure review process to enable it to conduct a public records search of information relating to bankruptcies, judgments and liens, within fifteen calendar days from the date of an applicant’s Form U4. These enhancements will allow FINRA to verify the accuracy and completeness of an applicants’ information relating to all bankruptcies, judgments and liens reported to the Central Registration Depository (CRD) system through the Form U4.
environmental
COURT REDUCES $50 MILLION PUNITIVE DAMAGES AWARD IN HOG FARM NUISANCE CASE
A federal judge in North Carolina has reduced a $50 million punitive damages award in a nuisance suit against a hog farm that stored the animal waste in open-air lagoons and sprayed it on nearby fields.  McKiver, et al. v. Murphy-Brown, LLC, 7:14-CV-180 (May 7, 2018, E.D.N.C.).  The Court relied on North Carolina’s law capping punitive damages awards to reduce the $50 million reward to $3.25 million.




securities
FINRA REVISES THE SANCTION GUIDELINES
FINRA revised its Sanction Guidelines to instruct adjudicators in the disciplinary process to consider customer-initiated arbitrations that result in adverse arbitration awards or settlements when assessing sanctions. As a result, when a Respondent’s disciplinary history, and history of arbitration awards and arbitration settlements, together with the violation found in a disciplinary case, form a pattern, the new Sanction Guidelines will advise that adjudicators should consider imposing more stringent sanctions.




environmental
FOURTH CIRCUIT HOLDS INDIRECT DISCHARGES ACTIONABLE UNDER CWA AS ONGOING VIOLATION

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.





employment
RECENT CHANGES IN DEPARTMENT OF LABOR TIP POOL RULE
The recently passed Consolidated Appropriations Act (“CAA”) put an end to an ongoing controversy over the status of a proposed Department of Labor (“DOL”) tip rule and the underlying dispute over whether employers who do not claim the tip credit against the federal minimum wage may be prohibited from including non-tipped employees in mandatory tip pools. In 2017, the DOL moved to roll back an Obama-era regulation extending this restriction to employers that pay their tipped employees the full minimum wage.
construction
CALIFORNIA SUPREME COURT CLARIFIES EXTENT OF EXCEPTION TO GENERAL RULE REQUIRING TIMELY PAYMENT TO CONTRACTORS
In United Riggers & Erectors, Inc. v. Coast Iron & Steel Co., No. S231549, 2018 WL 2188916 (Cal. May 14, 2018), the Supreme Court of California determined that while a general contractor or owner may withhold monies from subcontractors in circumstances where a dispute has arisen between the parties, the exception is limited to only those amounts actually in dispute.




architects and engineers
COURT OF APPEALS OF TEXAS HOLDS THE CERTIFICATE OF MERIT REQUIREMENT DOES NOT APPLY TO THIRD PARTY CONTRIBUTION CLAIMS

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.





securities
U.S. APPEALS COURT VACATES OBAMA ERA ‘FIDUCIARY RULE’ REQUIRING FINANCIAL ADVISORS TO ACT IN CUSTOMERS’ BEST INTEREST
On March 15, 2018, the 5th U.S. Circuit Court of Appeals in New Orleans voided the U.S. Department of Labor’s “fiduciary rule” adopted by the Obama administration in 2016 as a means to limit and reduce conflicts of interest among financial advisors providing retirement planning advice. The majority found in the case, Chamber of Commerce of the United States of America v. U.S. Department of Labor, 17-10238, that the Department of Labor overstepped its authority and that the Obama-era rule’s redefinition of “fiduciary” was unreasonable.




construction
FOURTH DISTRICT COURT OF APPEAL OF FLORIDA DETERMINES DUTY OF SUBCONTRACTOR TO DEFEND AND INDEMNIFY GENERAL CONTRACTOR DID NOT EXTEND TO PROJECT OWNER

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.





employment
THE SUPREME COURT ADOPTS A BROADER VIEW OF FLSA EXEMPTIONS REJECTING THE LONGSTANDING NARROW CONSTRUCTION PRINCIPLE
On April 2, 2018, the Supreme Court of the United States issued a ruling in Encino Motorcars, LLC v. Navarro, 584 U.S. ___ (2018), holding that auto dealership service advisors are exempt from the Fair Labor Standards Act’s (“FLSA”) overtime pay requirement.  The case began in 2012 in a California District Court, and was later appealed to the Ninth Circuit Court of Appeals, when Encino Motorcars’ service advisor employees brought suit seeking time-and-a-half compensation for overtime hours. 




architects and engineers
CALIFORNIA FEDERAL DISTRICT COURT EXTENDS SPEARIN DOCTRINE TO A DESIGN BUILD PROJECT

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.





environmental
SIXTH CIRCUIT DECLINES TO PIERCE CORPORATE VEIL IN CERCLA SUIT
In Duke Energy Florida, LLC v. Firstenergy Corp., CV No. 17-3024, April 10, 2018, the Sixth Circuit refused to pierce the corporate veil to determine which corporate entity would be liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., for costs associated with cleaning up hazardous waste released at two manufactured gas plants in the early 1900s.  The processes used at the time to create gas for home consumption inevitably released harmful byproducts, including coal tar, into the local environment, causing groundwater contamination.




coverage
ELEVENTH CIRCUIT RULES IN FAVOR OF INSURER OVER COMPUTER FRAUD CLAIM

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.





employment
FURTHER CIRCUIT SPLIT REGARDING SEXUAL ORIENTATION DISCRIMINATION UNDER TITLE VII

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.





construction
COURT OF APPEALS OF TENNESSEE HOLDS IT IS DEFENDANT’S BURDEN TO PRESENT EVIDENCE TO LIMIT A PLAINTIFF’S DAMAGES TO DIMINUTION OF VALUE

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.