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Quick Note: Staying, Not Dismissing, Arbitrable Disputes Under Federal Arbitration Act

July 31, 2024 — David Adelstein - Florida Construction Legal Updates
As you hopefully know from posted articles, arbitration is a creature of contract. Stated differently, there must be a contractual basis to have a dispute resolved through binding arbitration. The Federal Arbitration Act (FAA) applies to transactions involving interstate commerce. Oftentimes, lawsuits are filed despite an arbitration provision in a contract because parties can, if they desire, waive their rights to have their dispute resolved through binding arbitration. In what should not be a shocker, the United States Supreme Court in Smith v. Spizzirri, 144 S.Ct. 1173, 1178 (2024), held that when a federal “district court finds that a lawsuit involves an arbitrable dispute, and a party requests a stay pending arbitration, section 3 of the FAA compels the court to stay the proceeding.” Dismissing the lawsuit should not be the option. Staying the lawsuit should. Read the full story...
Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

ASCE Statement on House Passage of the Water Resources Development Act of 2024

August 05, 2024 — Marsia Geldert-Murphey, P.E., President of the American Society of Civil Engineers
WASHINGTON — The American Society of Civil Engineers (ASCE) commends the House of Representatives for passing H.R. 8812, the bipartisan Water Resources Development Act (WRDA) for 2024. The House WRDA 2024 bill will help improve America's ports and inland waterways, enhance flood risk management and storm risk reduction programs, and prioritize ecosystem restoration. While we urge the Senate to swiftly vote on its version of WRDA, we are encouraged that our nation's critical water resources infrastructure remains a congressional priority. The House version of WRDA includes several key provisions to enhance the safety of America's dams and levees, which each received a 'D' on the 2021 Report Card for America's Infrastructure, as well as provisions to modernize the nation's inland waterways system, which received a 'D+' in the 2021 Report Card. This includes one of ASCE's top legislative priorities for this year, the reauthorization of the National Dam Safety Program through 2028. But beyond the reauthorization, this bill reduces restrictions on the amount of funds states can receive in National Dam Safety Program State Assistance Grants; improves access to the High Hazard Potential Dam Rehabilitation Grant Program; and requires the incorporation of low-head dams into the National Inventory of Dams. Each of these provisions are critical to ensuring the long-term safety of our nation's dams and ASCE applauds the House for their inclusion. Furthermore, ASCE was pleased to see that the House legislation extends the National Levee Safety Program through 2033, which will help support the establishment of state levee safety programs, develop and publish national guidelines for levee safety, and enhance flood protection nationwide. While these measures are not included in the Senate version of WRDA, we encourage lawmakers to ensure they are included in a final conference version of the bill. We thank the House of Representatives for moving forward WRDA 2024 and strongly encourage the Senate to pass its version so that Congress can keep this vital water resources legislation on a biennial schedule and ensure our nation's dams, levees, ports, and inland waterways can support the American economy and protect public safety. ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS Founded in 1852, the American Society of Civil Engineers represents more than 160,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.

Storm Debby Is Deadly — Because It’s Slow

September 16, 2024 — Brian K Sullivan - Bloomberg
Tropical Storm Debby has killed at least five people as it churns across the US East, where it’s expected to inflict $1 billion or more in damage and losses. One reason for the storm’s destructive power: It’s moving very slowly. Although Debby came ashore with hurricane-strength winds, its rainfall — forecast to exceed two feet in some areas — is even more dangerous. The St. Marys River in northern Florida rose more than 10 feet in one day, while New York will likely see downpours from Debby later in the week. Homes, businesses and farms may be deluged, putting crops and infrastructure at risk. Read the full story...
Reprinted courtesy of Brian K Sullivan, Bloomberg

Surprising Dismissal of False Claims Act Case Based on Appointments Clause - What Does It Mean?

October 15, 2024 — Steven H. Lee - Lewis Brisbois Newsroom
Atlanta, Ga. (October 1, 2024) - In a surprising turn of events, the U.S. District Court for the Middle District of Florida recently dismissed a False Claims Act (FCA) lawsuit brought by relator Clarissa Zafirov against Florida Medical Associates, LLC, and other defendants. U.S. District Judge Kathryn Kimball Mizelle ruled that the FCA’s qui tam provisions, which allow private individuals to bring lawsuits on behalf of the government, violate the Constitution’s Appointments Clause. This decision follows another unexpected ruling by U.S. District Judge Aileen Cannon in the Southern District of Florida, where the court similarly dismissed an indictment against former President Donald Trump based on the same constitutional clause. At the heart of these rulings is the argument that FCA relators - who decide whom to sue, which legal theories to pursue, and how to proceed - exercise significant executive authority. Because they are not appointed by the President, a department head, or a court, the judges concluded that these relators hold their positions unconstitutionally. As a result, Judge Mizelle dismissed the case entirely. Read the full story...
Reprinted courtesy of Steven H. Lee, Lewis Brisbois
Mr. Lee may be contacted at Steven.Lee@lewisbrisbois.com

Ethical Limits on Preparing a Witness for Deposition or Trial

October 28, 2024 — Stu Richeson - The Dispute Resolver
In this week’s blog post, we are going to take a brief look at ethical issues associated with preparing a witness for a deposition or to testify at trial. Most attorneys would agree that it is permissible to meet with a witness before the witness’s deposition to discuss what to expect. On the other hand, there is no question that advising a witness to provide false testimony would be improper. But what about the area in between those two extremes? For instance, can an attorney suggest to a witness how to phrase answers to anticipated questions that, while true, might not be the way the witness would have answered the question absent the attorney’s coaching? A little over a year ago, the American Bar Association Standing Committee on Ethics and Professional Responsibility issued ABA Formal Opinion 508: The Ethics of Witness Preparation. The opinion provides certain examples of things that are and are not permissible in preparing a witness for a deposition or trial. Read the full story...
Reprinted courtesy of Stu Richeson, Phelps
Mr. Richeson may be contacted at stuart.richeson@phelps.com

Federal District Court Addresses Material Misrepresentation in First Party Property Damage Claim

August 26, 2024 — James M. Eastham - Traub Lieberman
In Pittsfield Dev. LLC v. Travelers Indem. Co., 2024 U.S. Dist. LEXIS 117530 (N.D. Ill. July 3, 2024), the United States District Court for the Northern District of Illinois addressed an alleged material misrepresentation by an insured during the course of the adjustment of a water loss claim at an insured property. Subsequent to a pipe burst event which caused damage to a number of the floors in the insured building, the insured submitted a claim to Travelers and also submitted, with the assistance of a retained public adjuster, a damage estimate of the damages at the property. Included within the estimate submitted by the insured was a line item for "Lead Paint & Asbestos Removal" with a corresponding dollar amount of $1,140,000. It was this line item which formed the basis of Travelers' claim of misrepresentation. At his deposition, the public adjuster testified that the $1,140,000 figure was an oral estimate received over the phone from an asbestos remediation company. Travelers disputed the testimony and contended that no such estimate was ever provided. For support, Travelers pointed to deposition testimony from a remediation company employee that while rough estimates were occasionally given verbally, the largest over the phone estimate she could recall was in the $20,000-$25,000 range. It was also disputed that the company would ever provide an oral quote of that magnitude sight unseen, especially since the largest project the remediation company had ever completed was less than $250,000. Read the full story...
Reprinted courtesy of James M. Eastham, Traub Lieberman
Mr. Eastham may be contacted at jeastham@tlsslaw.com

Beyond the Flow-Down Clause: Subcontract Provisions That Can Expose General Contractors to Increased Liability and Inconsistent Outcomes

December 10, 2024 — Phillip L. Parham III - ConsensusDocs
Flow-down clauses in construction subcontracts—blanket clauses providing that some or all of the terms and conditions in the prime contract between the general contractor and the property owner apply equally between the subcontractor and general contractor—are an important component to managing risk for a general contractor and reducing the likelihood of disputes with either/both the owner and subcontractor. Put simply, flow-down provisions can provide continuity between the general contractor’s obligations to the owner and the subcontractor’s obligations to the general contractor. Properly drafted, flow-down clauses reduce the general contractor’s risk by ensuring that the subcontractor is legally bound to meet the owner’s objectives for the project in the same way as the general contractor. But relying on blanket flow-down clauses, alone, to protect the general contractor is like a soldier going into battle with nothing but a helmet, leaving significant other areas exposed and unprotected. In other words, a general contractor should look beyond just a singular, blanket flow down of terms to ensure its bases are properly covered. Accordingly, this article goes beyond the blanket flow-down clause and highlights several key subcontract provisions where inconsistent obligations among the subcontractor, general contractor, and owner expose the general contractor to increased liability and inconsistent outcomes. Specifically, this article will examine disputes resolution clauses, liquidating provisions, notice provisions, and termination provisions. However, this article will not provide a deep examination of these clauses, nor does it highlight every potentially relevant clause. Rather, it focuses on these select clauses to highlight important issues associated with flow-down provisions. Read the full story...
Reprinted courtesy of Phillip L. Parham III, Jones Walker LLP
Mr. Parham may be contacted at pparham@joneswalker.com

A Game of Texas Hold’em: How Texas Stopped Wage Increases for Salaried Exempt Employees Nationwide

December 03, 2024 — Matthew DeVries - Best Practices Construction Law
Construction contractors often have to deal with classification of employees, particularly those who work in the home office. Today’s guest post by Alexandra Shulman and Leah Lively addresses a recent court decision affecting the wage protection of employees under the the Fair Labor Standards Act (FLSA). On November 15, 2024, a federal court in Texas vacated a U.S. Department of Labor (DOL) rule (the “2024 Rule”) that increased the minimum salary threshold for employees classified as exempt from overtime and minimum wage protections under the FLSA. The Texas court’s decision nullifies the 2024 Rule nationwide, effective immediately. Read the full story...
Reprinted courtesy of Matthew DeVries, Buchalter
Mr. DeVries may be contacted at mdevries@buchalter.com

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