How Should Businesses Respond to a Notice of Intent Letter?

This article was originally published in the Vancouver Business Journal.

When businesses open a letter from Northwest Riverwatcher (a fictional environmental group) with the subject line “Notice of Intent to Sue Under the Clean Water Act,” the tendency, particularly among smaller businesses, is to ignore it and hope Riverwatcher goes away. There may be a mistaken belief that the threat to sue is an empty one, and that Riverwatcher sends out scores of such letters, hoping that a small percentage of the recipients will pay some money to make it go away. Continue Reading

State of Oregon Loses Statutory Recreational Immunity Defense Under New Court of Appeals Decisions

ORS 105.682 provides immunity from contract or tort claims to landowners who permit the public the use of their lands for recreational purposes. Under that statutory provision, a recreational user or the estate of such a user cannot sue the landowner if that user suffers personal injury, death, or property damage from the use of the land. On August 1, 2018, the Oregon Court of Appeals released decisions in two cases in which the State of Oregon used ORS 105.682 as a defense to negligence claims by injured users of State-owned property. In the first case, a 14-year-old boy had been surfing at Pacific City near Cape Kiwanda when he collided with a dory boat, which severed his arm. In the second case, a man was severely injured by a submerged boulder when he dove into Lake Billy Chinook at Cove Palisades State Park. In both cases, the critical question was whether the State had the authority to “make a volitional decision whether or not to allow recreational use on the land in question.” The court found in both cases that the State had not effectively demonstrated that it had that authority. The court used the standard text-in-context/legislative history interpretational aids to interpret ORS 105.682 as providing a legislative quid pro quo to landowners to encourage them to open their lands to the public for recreational purposes in exchange for immunity. If the owner of land does not have that authority, recreational immunity does not apply. 


Injunctive Relief Exclusive Remedy For Successful Bidder Seeking Damages on Construction Job Not Performed

On July 26, 2018, the Washington Supreme Court issued a new decision addressing public bidding in Specialty Asphalt & Constr., LLC v. Lincoln County. Specialty Asphalt was the winning bidder on a paving project for Lincoln County. After not requiring a performance bond typically required by statute in the bid, the County asked that Specialty post one as part of the contract award. Specialty refused and the project was delayed, resulting in damages to Specialty. Later, the County dropped the bond requirement, but Specialty decided not to perform and sued for damages based on breach of contract and discrimination. Specialty argued that it was entitled to pursue monetary damages for its breach of contract claim, analogizing its case to Scoccolo Construction, Inc. v. City of Renton, 158 Wn.2d 506, 145 P.3d 371 (2006).

The Court of Appeals and the trial court instead relied on Skyline Contractors, Inc. v. Spokane Housing Authority, 172Wn. App. 193, 289 P.3d 690 (2012). The Supreme Court agreed with the Court of Appeals. In Scoccolo, the contractor completed the project. Specialty did not, nor did it even begin performance. Therefore, injunctive relief was the exclusive remedy even if the successful bidder was impacted by the delays.

The rationale was affirmed with the following quote:

[W]hile equitable,  extraordinary,  or declarative  relief  may  serve the public interest by preventing the award and execution of a contract for an excessive amount, permitting damages in such cases serves the bidder’s interest alone, and is contrary to the public interest the competitive bidding laws were designed to protect, further burdening a treasury already injured by paying too high  a price for the goods or services.

Id.  at  591  (emphasis  omitted)(quoting  James  L.  Isham,  Annotation,  Public Contracts: Low  Bidder’s  Monetary  Relief  against  State  or Local  Agency for Nonaward of Contract, 65 A.LR.4th 93, § 2[a] (1988)).

In summary, if a contractor seeks damages before breach of contract to perform a public contract, they need to perform the work. Otherwise, the contractor is left with only seeking declaratory or injunctive relief.

Oregon Supreme Court Allows Coos Bay Terminal Project to Move Forward

On July 26, 2018, the Oregon Supreme Court affirmed the Court of Appeals in its affirmance of a Department of State Lands’ (DSL) final order granting a permit to the Port of Coos Bay that allows the Port to dredge 1.75 million cubic yards of material from the bay for a deep water marine terminal. Coos Waterkeeper v. Port of Coos Bay, 363 Or 354 (2018). DSL issued the permit under ORS 196.825, which contains a number of approval criteria applicable to the applicant’s “project.” Petitioners argued that the “project” is the “construction, existence, and operation” of the terminal and that DSL erred in failing to consider negative effects of the operation of the terminal when it reviewed the Port’s application. The Court disagreed, and held instead that ORS 196.825 in this case was limited to the impacts of removal and fill activity, and the construction of the proposed development. The Court reached that conclusion by analyzing ORS 196.825 according to the standard rules of statutory interpretation, and determined that the text and legislative history of the statutory provisions were not consistent with a requirement that DSL analyze ongoing operations.

Recap: Construction Breakfast Roundtable & Seven Habits of Highly Effective Contractors/Owners

We had a great turnout at our Seattle Breakfast Roundtable earlier this week, which was attended by in-house counsel, representatives from a diverse group of companies across the industry, and attorneys in our Construction team. Our conversation covered a range of topics, including contract terms and requirements, project communications, and documentation. In particular, we discussed the importance of making sure contracts match what happens in the field and ensuring that the onsite team has knowledge and understanding of the contract. The group also discussed new technologies (e.g., BIM, PlanGrid, text messages, etc.) and how they can solve or complicate claims.

Based on the early feedback we have received, the biggest benefit to our attendees was the opportunity to hear the perspective from representatives across the industry. We had a lively discussion about the industry and business constraints on various groups, legal solutions to common pitfalls, and opportunities for more effective and efficient project delivery. Below are the seven habits of highly effective contractors/owners that we covered at the event.

For those who missed this roundtable, we will be holding another on this topic in our Portland office on June 5th. In addition, we will be holding another roundtable in Seattle this fall. Please keep an eye out for more details in the coming months. Thank you to those who joined us. If you were not able to attend, but would like more information on these topics, contact Tara O’Hanlon or Brian Esler.

Click here for our printable handout, which includes the seven habits of highly effective contractors/owners.

Buzz Kill: Coffee Companies Roasted by Court Over Warning Labels

Chances are that if you live in or have visited California, you have seen conspicuously placed “WARNING” signs notifying you that a product you are consuming or a location you are entering “contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm.”

Now, following a March 30, 2018, proposed statement of decision in the Los Angeles Superior Court case Council for Education & Research on Toxins v. Starbucks Corp., cancer-warning labels may need to be added to coffee under Proposition 65, California Health & Safety Code section 25249.6 et seq. Continue Reading

Tara O’Hanlon Published in The Contractor’s Compass: How to Minimize Risks for Successful BIM-Powered Projects

Tara O’Hanlon, Miller Nash Graham & Dunn construction attorney, was recently published in The Contractor’s Compass, the official educational journal of the American Subcontractors Association.

In her article, “How to Minimize Risks for Successful BIM-Powered Projects,” Tara explores contract terms that will help to ensure that all parties adequately understand and allocate associated risks and responsibilities, while better identifying potential conflicts that can minimize adverse legal consequences.

Read the full article.

New Public-Private Partnership Authority Available for Ports

On March 22, 2018, Governor Inslee signed HB 2664, which gives port districts new authority to enter into public-private partnerships (“P3s”) to develop telecommunications services and infrastructure. Such P3 arrangements are an increasingly popular method of delivering infrastructure, and broadly are “contractual agreements between a public agency and a private entity that allow for greater private participation in the delivery of projects.”

Although it started out as a bill to provide P3 authority only to rural port districts, the legislation signed by the Governor eliminated that limitation, so there is now blanket P3 authority for all port districts in the area of telecommunications. As with many recent P3 laws, there is nothing in the act requiring (or prohibiting) application of the normal bond and retainage requirements (RCW Ch. 39.08 and 60.28) for public works projects. Time (and probably litigation) will tell whether those requirement apply to such public-private partnerships.

Oregon Construction Contractors Board Newsletter

The Oregon Construction Contractors Board’s February 2018 newsletter offers information on upcoming education opportunities for licensed contractors. Topics include getting certified to win government contracts, Spanish fall hazard awareness, and OSHA safety consultations. Also included is the 2018 schedule for in-person CCB law, regulations, and business practices courses, and Association Conferences for March and April 2018.

For more information and to read the full newsletter please click here.

Are State and Local Regulations Making the Portland Housing Affordability Crisis Worse?

Is the Portland area’s regional housing crisis being made better or worse by state and local land use regulations? Gerald Mildner, Ph.D, an associate professor of real estate and finance at Portland State University, and the academic director of the University’s Center for Real Estate, would say, “worse.” According to Dr. Mildner in his paper “Portland Housing Market and 2018 UGB,” the region’s urban growth boundary (UGB) in conjunction with other regional and local initiatives is likely exacerbating the housing crisis, and measures meant to alleviate that crisis are either making it worse or having less efficient positive effects than alternative measures. For example, Metro did not expand the UGB in 2015 because it determined that there was enough capacity within the existing UGB to accommodate the region’s housing and employment needs for the next 20 years. The problem, however, is that most of the future housing capacity relied upon lies in areas that are in eastside Portland neighborhoods that are not close to Portland’s urban core, like the Gateway and 122nd Street areas, and the assumption was that the capacity need will be met by high-rise residential projects. The reality is that high-rise projects are expensive to build and require rents that those outlying areas cannot hope to support anytime soon. So the capacity is there, but the market is not. Further, according to Dr. Mildner, there could be serious economic consequences to the region if rents in Portland actually increase to the point that high-rise residential projects can be supported in those areas.  Continue Reading