On April 16, 2012, Governor Nathan Deal signed the Georgia Taxpayer Protection False Claims Act (House Bill 822) into law.  The Georgia Taxpayer Protection False Claims Act, which goes into effect on July 1, 2012, establishes civil penalties for any person or legal entity that commits or conspires to engage in certain fraudulent acts, including but not limited to:

• Knowingly presenting a false or fraudulent claim for payment or approval;
• Possessing property or money to be used by the state or local government and knowingly delivering less than all of that money or property;
• Knowingly buying or receiving as a pledge of an obligation or debt, public property from an officer or employee of a state or local government who lawfully may not sell or pledge the property; and,
• Knowingly concealing or improperly avoiding an obligation to pay or transmit money or property to the state or a local government.

The acquittal today of crane rental company owner James Lomma, on charges of negligent homicide and manslaughter, brings to a close the third high-profile New York criminal case against construction workers or executives with a not guilty verdict.  Which raises the question as to whether the criminal arena was ever the right place to seek redress. 

If you’re going to be an industry leader in standard form contract documents, you need to make it easy to access and use your forms.  Last week ConsensusDOCS announced its new platform, which will allow its roster of documents to be edited using Microsoft Word.  The announcement here provides some more detail.  It’s about time. 

We’re happy to announce that our construction group has made Chambers' short-list for the Chambers USA Award for Excellence. 2012 marks the third year in a row Duane Morris has been nominated. Criteria for the nomination includes notable achievements over a 12-month period such as outstanding work, impressive strategic growth and excellence in client service and is based on the independent research conducted for  Chambers USA 2012. Congratulations to all of our construction attorneys for this recognition.

The United States District Court for the Eastern District of Virginia recently issued a decision that may have broad implications to the calculation and imposition of civil penalties in False Claim Act (FCA) cases, because, for the first time, a court refused to issue mandatory civil penalties against a contractor that was found to have violated the FCA.

Prior to 2007, the Pennsylvania Mechanic’s Lien Law of 1963, 49 P.S. §1101-§1902 (the “Mechanic’s Lien Law”) operated for over 40 years in its original form, without any significant or substantive modifications.  In 2007, however, amendments to the Mechanic’s Lien Law went into effect that significantly changed the statute.  For example, the 2007 amendments changed, inter alia, the enforceability of upfront waivers and the definition of a “subcontractor.”  In 2009, additional amendments to the Mechanic’s Lien Law went into effect which changed some of the 2007 amendments. 

Now, the Pennsylvania legislature is once again considering major revisions to the Mechanic’s Lien Law.  More specifically, on March 27, 2012, by a vote of 190-6, the Pennsylvania House of Representatives passed HB 1602.  HB 1602 provides a major overhaul to the Mechanic’s Lien Law by changing (1) residential mechanic’s lien requirements; (2) introducing a new notice requirement for owners and subcontractors; and (3) developing a new statewide notice directory.  HB 1602 will now move to the Senate for further consideration.

A controversial project is being discussed in the public arena.  It could be a casino, with lots of supporters and detractors, or a public works project that will require substantial public funding.  And one of the arguments typically trotted out in support of the project is the proclamation that “this project will result in [fill in the blank] construction jobs!”  Easy to say, but hard to verify.  Who comes up with these numbers, anyway?

On March 9, 2012, the Nuclear Regulatory Commission (NRC) announced that it directed its staff to issue three Orders, which are effective immediately, to United States commercial reactor plants.  According to the NRC, this expedited mandate attempts to implement “lessons learned from the accident at Japan’s Fukushima Daiichi nuclear power plant.”

Both lawyers and clients agonize over the tactical advantages and disadvantages of arbitration and litigation.  Generally, the reason for the prolonged deliberation is the parties are attempting to make a reasoned and informed decision when selecting a dispute resolution provision for their contract. 

Some parties prefer arbitration, because they believe arbitration is faster and provides them with a decision-maker who is experienced in the industry.  Others prefer litigation, because, among other things, they want access to a trial by jury.  Costs are also a decisive factor in determining whether to arbitrate or litigate.      

One “cost” that is often overlooked is administrative fees, which can be surprisingly expensive in arbitrations.  Parties understand that they will incur fees for the time spent by their attorneys, experts, and the arbitration panel.  Some parties, however, are surprised to learn that the arbitration organizations (American Arbitration Association, JAMS, etc.) also charge a fee, which is in addition to the professional fees paid to the arbitrators.  The administrative fees cover the organization’s processing and management of cases and the provision of resources to assist the parties through the dispute resolution process.

Last summer, the United States Court of Appeals for the Third Circuit issued a precedential opinion in Sloan Co. v. Liberty Mutual Ins. Co., 653 F.3d 175 (3d Cir. 2011), that had broad implications for the construction community, because it affirmed an important industry-standard practice.  More specifically, the Third Circuit held that a “pay-if-paid” provision in a subcontract, which provided that the general contractor’s receipt of full payment from the owner is an express condition precedent to the subcontractor’s right to full payment from the general contractor, was valid and enforceable by the general contractor and/or its payment bond surety.

Since the Third Circuit’s ruling in Sloan, the legal and construction community have speculated on whether a Pennsylvania state court would follow the Third Circuit’s legal analysis and ruling.  Now, a recent decision by the Philadelphia Court of Common Pleas suggests that Pennsylvania state courts will follow the Third Circuit, and enforce “pay-if-paid” clauses.

On February 15, 2012, Governor Chris Christie announced his recommendation of twenty new capital school construction projects in eighteen municipalities.  These new school projects will be financed and administered through the New Jersey Schools Development Authority (“SDA”).    

The 20 projects set to advance in 2012 were divided into three categories addressing: 1) high educational priority needs; 2) high educational priority needs that require further discussions; and 3) serious facility deficiencies.

A troubling report has been injected into the “feel good” aura of LEED construction.  Matthew Hallowell, a professor at the University of Colorado Boulder, has confirmed via research and study that LEED projects carry an increased risk of worker injury.  The study was reported last week in ENR Mountain States, and comes with detailed reports on the nature of the increased risks.  Even a representative of the USGBC admits that the study is troubling.