Bill Gives Design Build Boost in Public Contracting

Design-build is increasingly showing up in public works projects in the Washington State. This method allows the price to be established based on a conceptual design rather than through the competitive bid process. Offsetting the lack of competitive bid, the price can be set after construction documents are completed and all the subcontracts work can be put out for bid. Design-build has unique challenges. It leads to fundamental changes in the relationships between owners, designers and contractors. As a result, concerns were expressed that public agencies may not understand the resulting changes in their responsibilities or the impacts to contractors and design professionals so the legislature put strict limits on what capital project qualified for use of this method. Continue Reading

ORS 701.640 May Not Void Forum-Selection and Choice-of-Law

Miller Nash partner Jacob Zahniser had an article published in the Oregon State Bar Construction Law Section’s Construction Law Newsletter concerning little-discussed elements of construction contracts. The link to the full story is available below.

Do not underestimate forum-selection and choice-of-law clauses when coupled with an arbitration provision; ORS 701.640 may not apply and your client may find itself arbitrating claims far from the project under unfamiliar and unfriendly law.

Click here to read the full article.

Oregon Court of Appeals Gives a Boost to the State’s Provision of New Housing

On March 20, 2019, the Oregon Court of Appeals affirmed the Land Use Board of Appeals (“LUBA”) in a decision interpreting ORS 197.307(4), which is the “clear and objective” requirement of the ORS 197.295-.314 needed housing statutes. Warren v. Washington County helps ensure that the Portland metro region and other cities in Oregon can meet goals for the provision of new housing. Housing has been a critical issue in Oregon, especially since the recovery from the Great Recession of the mid-2000s. Since 1981, Oregon has had the needed housing statutes in place in one form or another. The purpose of the needed housing statutes is to ensure an adequate supply of buildable lands within urban growth boundaries for housing.  Continue Reading

Op-Ed: Tax-Advantaged Project Financing and Investment

David Brandon and Olivia Grabacki published an op-ed in a recent issue of the Daily Journal of Commerce. The article discusses the differing benefits between 1031 Exchanges and Qualified Opportunity Zones for real estate investments. The full article is available here (note that the full article is only available to paid subscribers).

Portland-Area Consumer Price Index Discontinued

Many local commercial leases use the Portland-area consumer price index (“CPI”) to calculate periodic rent adjustments. That index was discontinued in 2018.  For commercial landlords and tenants whose leases rely on the now-discontinued Portland-area CPI, discussing how to handle rent adjustments now can prevent tension later.

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Improving a Typical 1031

Section 1031 of the U.S. Internal Revenue Code provides real estate investors the opportunity to sell existing real property investments, reinvest the proceeds into the acquisition of qualified, like-kind replacement property, and defer recognition of capital gains realized from the sale to a later disposition, subject to time constraints and other regulations. Such a qualified like-kind exchange, more commonly known as a “1031 Exchange,” can be beneficial to investors holding appreciated investment properties that may otherwise be subject to a large tax liability at the time of sale. But to be able to completely defer tax on disposition, the replacement property must have a total fair market value equal to or greater than that of the relinquished property, and the investor must completely reinvest the sale proceeds into the replacement property, thereby limiting investors’ options. An improvement exchange, however, can provide investors more qualifying options to fully defer tax and the benefit of acquiring the “perfect” replacement property. Continue Reading

Condo Lien Gone Wrong: Summary Lien Procedure used Successfully to Challenge Excessive Condo Lien

ServPro filed a single lien on a condo for water damage remediation work in the amount of $183,945.09 but did not allocate proportionally the amount of its billing among the 20 units impacted. This mistake illustrates the difficulties in getting a lien filed correctly on a condo and the consequences of doing it wrong.

Pursuant to RCW 60.04.081, the condo owner filed a motion to seek to have the lien invalidated. Finding it both frivolous and clearly excessive, the court released the lien, leaving ServPro with no recovery. Not wanting to get skunked, ServPro appealed. The Court of Appeals determined the lien must be reduced but not completely released (down but not out) based on lien method utilized when filed. Continue Reading

Supreme Court to Take Up Protection of Confidential Information Provided to the Government

On January 11, the United States Supreme Court announced it accepted the Food Marketing Institute’s cert petition to review the Eighth Circuit’s decision in Food Marketing Institute v. Argus Leader Media, representing the latest development toward resolving a conundrum we have described before—how to protect confidential and trade secret information provided to the government in light of public disclosure laws.

This will be an important case for government contractors—and anyone else providing information to the federal government—to watch. If the Supreme Court agrees with the Eighth Circuit’s standard, it will become harder to prevent disclosure of confidential information to competitors when dealing with the federal government.

Read more about it on our firm blog, IP Law Trends.


Oregon’s 2019 Cap and Invest Legislation

Speaking today at a seminar sponsored by the University of Oregon, Senator Michael Dembrow and Representative Karin Power stated that they intend to introduce cap and invest legislation by the end of this month. The system is aligned with the Western Climate Initiative, the members of which include California and Quebec.

The general idea is to set a limit on carbon emissions from certain sectors of the economy, including power generation and transportation. Regulated entities in those sectors will be required to obtain carbon emission allowances for their emissions. The overall total of allowances will decline each year in accordance with Oregon’s carbon reduction goals. It appears that some allowances will be given to the regulated entities and the remainder will be auctioned. Initially, regulated entities will be able to satisfy up to 8 percent of their allowances using carbon offsets.

Revenue from the auctions will allocated into four general areas: greenhouse gas reduction projects, adaptation strategies, carbon sequestration, and transition assistance. The focus of transition assistance is to help people and companies adjust to the reduced-carbon economy.

Governor Brown has proposed that a new agency be formed to implement the legislation. The “Oregon Climate Authority” would consolidate some existing climate change programs at Ecology, Energy, and the PUC and take responsibility for implementing the cap and invest program.

Senator Dembrow hopes to have a bill-signing ceremony on April 22, 2019.

Proposition 65—Under Construction

California’s Safe Drinking Water and Toxic Enforcement Act of 1986, otherwise known as Proposition 65, continues to be amended to address errors and omissions in the original regulations. Proposition 65 applies to all businesses in the chain of commerce in California and requires all businesses to provide a “clear and reasonable” warning before knowingly and intentionally exposing any individual in California to one of nearly 1,000 listed chemicals. While Proposition 65 has been on the books for more than three decades, the regulations have never been clear as to how an upstream business, such as a manufacturer or distributor, is to provide the mandated warning to the final consumer through the chain of commerce. On November 16, 2018, California’s Office of Environmental Health Hazard Assessment (OEHHA) proposed amending the regulation to help clarify this process. But OEHHA’s proposed amendment falls short of the stated goal. Continue Reading