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Welcome to the newest edition of the Construction In Brief newsletter. This issue includes:
What’s New at Cohen Seglias
A New World Order?
By Edward T. DeLisle
The Uncertain Future of Website Compliance Standards Under the Americans with Disabilities Act
By Steven M. Williams and Jackson S. Nichols
Big Changes to the PA Lien Law Took Effect in 2017
By Jason A. Copley and Daniel E. Fierstein
More Paperwork for Demolition Contractors Working in Philadelphia
By Lane F. Kelman and Jennifer F. Brand
Q&A with Our New Partners
With Lori Wisniewski Azzara and Maria L. Panichelli
Greetings from the Editorial Team at Construction In Brief! We are excited to introduce our new Partners, Lori Wisniewski Azzara and Maria Panichelli. In the New Partner Q&A, you will get a chance to learn about their practices at the Firm. We also continue our coverage of the big changes to the Pennsylvania Lien Law and new requirements for demolition contractors in Philadelphia.
We hope you will enjoy this first issue of 2017!
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Lori divides her time between the Firm’s Pittsburgh and Kentucky offices, and actively practices in Pennsylvania, Kentucky, Ohio, and West Virginia. She is a member of the Firm’s Construction and Green Building & Sustainability Groups, and is co-editor of the Firm’s construction blog. Lori counsels clients in all construction related matters, including contract negotiation, construction defect claims, claims for delay and inefficiency, and mechanics’ liens, and has also successfully assisted clients in procuring minority and woman-owned business certifications.
Maria divides her time between the Firm’s Philadelphia and Washington, DC offices and practices in the Federal Contracting and Construction Groups. Her practice focuses on federal contracting matters, including bid protests, REAs, CDA contract claims and appeals, and compliance counseling. Maria also assists clients in all aspects of small business procurement, including eligibility analyses, certification, and asserting/defending against size and status protests. She works closely with a number of Procurement Technical Assistance Centers, providing educational content for a variety of government contractors. She is also a community partner at Govology, a legal content contributor to VetLikeMe, Targetgov, GovBizConnect and Onvia, and is a faculty member at the Government Contracting Institute.
New Construction Chair
We are pleased to announce that Jason Copley has been named Chair of the Construction Group. Jason, who previously served as Firm Managing Partner for six years, is ready to take on this new leadership role at the Firm.
Please welcome Zachary D. Sanders, who joins the Firm as an Associate in the Construction Group in Philadelphia and concentrates his practice on construction litigation, assisting the Firm’s clients with delay and design defect claims, contract disputes, mechanics’ liens, and bond claims. Prior to joining Cohen Seglias, Zachary was a commercial litigator and represented large corporations, closely-held organizations, and individuals in a variety of legal issues. Zachary graduated cum laude from Drexel University Thomas Kline School of Law. He interned at the Delaware County and Philadelphia County District Attorneys’ Offices, helping to prosecute hundreds of felony and misdemeanor offenses.
9th Annual Labor & Employment Law Seminar
Please join us for our annual Labor & Employment Law Seminar series featuring the latest labor and employment issues impacting your business. Topics include:
April 26 at the Hilton Philadelphia City Avenue
May 3 at the Hershey Country Club
May 10 at the Omni William Penn Hotel in Pittsburgh
Kerstin is the Firm’s Marketing Director. She can be reached at (215) 564-1700 or firstname.lastname@example.org.
By Edward T. DeLisle
In the wake of November’s elections, just about the only thing that Washington can agree on is a pervasive sense of uncertainty about the future, which includes the direction of government regulation. The fact that many of the new agency heads and cabinet secretaries come from nontraditional backgrounds and, consequently, do not have a long record of public comments only serves to deepen the apprehension across regulated industries.
While the banking and pharmaceutical industries often garner the bulk of column inches when it comes to federal regulations, government contractors are directly affected by federal rules and regulations. So, what does the near future hold for contractors? Recent congressional statements and proposed legislation offer a clue into what lies ahead.
One of the primary concerns of the new Congress is to scale back what it sees as the broad regulatory overreach of the previous administration. To that end, several seldom-used quirks of congressional procedure have been put back on the table. These include budget reconciliation, a process that would functionally lower the threshold for a bill passing the Senate from 60 votes to a simple majority (51 votes), preventing Democrats from organizing a filibuster. Congress has also revived an 1876 rule authorizing lawmakers to slash the pay of federal employees unilaterally — a move that is likely a symbolic gesture to signify an increased focus on accountability and fiscal belt-tightening.
The Obama administration implemented many rules on contractors — such as those mandating certain levels of health care coverage for contractor employees and raising the minimum wage for federal contractors. While these rules often furthered policy goals, they also imposed significant compliance costs on contractors, many of which are small businesses. For example, a significant cost was investing in accounting software upgrades to meet the new paycheck transparency regulations. Other rules from the previous administration would require contractors to track and disclose pending labor law proceedings, spend more time and resources vetting potential subcontractors, and make new representations and certifications to federal officials as part of the process of determining responsibility for contract awards. There are indications that one of the highest priorities of the new administration would be revoking these rules and associated executive orders with the goal of easing the compliance burden on businesses.
For those rules and regulations that the President cannot unilaterally undo, Congress — or at least the Republican portions thereof — appears committed to assisting. Congressional leaders have suggested that the Congressional Review Act (CRA), enacted in the 1990s as a reaction to President Clinton’s regulations agenda, could be used to throw a wrench into pending agency rules. Under the CRA, Congress can order hearings and ultimately vote to disapprove of a rule proposed by an executive agency. Though seldom-used in the past, the CRA could give Congress a strong hand in the rulemaking processes through which revisions to regulatory are generally made.
In addition to acting against agency rulemaking, Congress is also seeking to change the law in a way that would make it easier for contractors to challenge agency actions in court. On January 11, 2017, the House of Representatives passed The Regulatory Accountability Act of 2017 (the Accountability Act), a bill aimed at repealing the longstanding practice in federal courts of giving substantial deference to agency decision making.
The Accountability Act would significantly amend the Administrative Procedure Act (APA), 5 U.S.C. § 551 et seq., which is the law that provides a basis for challenging an agency’s actions in court, including the award and administration of a contract. Under the APA as currently written, a court will generally only set aside an agency’s decision if that decision was found to be “arbitrary and capricious.” This standard, called the Chevron standard after the 1984 Supreme Court case that established the rule, means that it is very difficult to prove that the government’s conduct in connection to the award or administration of a contract was so unfair that a court must overturn it. As many reading this may know through experience, courts grant the government a great deal of deference, and assume that the government’s actions are reasonable and performed in good faith unless there is overwhelming evidence to the contrary. The Accountability Act, if enacted, would amend the APA to remove much of this deference, meaning that the court may be able to substitute its own judgment for that of the agency, rather than simply consider whether the process the agency used to make its decision was reasonable.
While every major piece of legislation has unintended consequences, the Accountability Act would undoubtedly make it easier to prevail in a lawsuit against the government. Flaws in proposal evaluation methodology that previously would be overlooked could now be grounds for overturning an award. However, there is potential for the Accountability Act to be a double-edged sword — agencies may become wary of large awards, and an already slow evaluation and award process would likely take even longer as agencies adjust to the changes and develop new policies and guidelines.
Federal contractors can expect to see the reins loosened in a variety of ways that may relieve compliance costs. However, there is an element of unpredictability in the air as the new administration has expressed a willingness to chart a very different path. As the new Congress and administration settle in, do not be surprised to see rapid changes to the rules governing federal contracts.
Title III of the Americans with Disabilities Act (ADA) is commonly understood to set forth basic nondiscrimination requirements prohibiting the exclusion, segregation, and unequal treatment of individuals with disabilities. These requirements apply to businesses and nonprofit service providers that are “public accommodations.” Public accommodations are private facilities that are open to the public, such as restaurants, retail stores, hotels, movie theaters, private schools, convention centers, doctors’ offices, homeless shelters, transportation depots, zoos, funeral homes, day care centers, and recreation facilities.
What is not so commonly known is that public accommodations can also include company websites. In fact, in the past few years, there have been a number of lawsuits filed against companies whose websites did not meet certain minimum standards for accessibility to the hearing- and sight-impaired. These standards allow sight-impaired people to use specialized web browsers and software that interact with compliant websites to provide an enhanced internet experience, such as screen-reading software that reads the HTML code on websites and provides an audio translation of the words on the screen.
The Rise of Website Accessibility Litigation
It has been reported that since the beginning of 2015, over a hundred website accessibility lawsuits have been filed in state and federal courts claiming violations under the ADA. Most of these cases have been filed in Pennsylvania, California, and New York, where the law firms that have generated most of those suits are headquartered. Many in the industry expect the number of website compliance lawsuits to continue to rise in the future and spread to other states as well.
In some cases, plaintiffs’ attorneys have even taken a lesser step of sending letters providing notice of an impending lawsuit in order to engage the targeted company in settlement negotiations on an expedited basis. These firms typically seek an agreement by the company that it will alter its website to meet certain standards and pay attorneys’ fees and costs. Since these letters are not required to be filed publicly, it is difficult to track them; but given the number of lawsuits filed and the relative ease of sending such a letter, these pre-suit settlement attempts may continue.
On the federal appellate level, courts have disagreed over which circumstances require a company’s website to be accessible to the disabled. This disagreement focuses on whether there must be a “nexus” between the company’s online presence and any physical locations for its website to be considered a public accommodation. Some courts have held that merely having an online presence in the form of a website does not constitute a public accommodation, but that having both a website and a physical retail location does. Other courts do not have a physical location requirement and have held that only having a website can be considered a public accommodation that subjects the company to possible liability.
DOJ Enforcement and Website Requirements
While it is frustrating that businesses must navigate a patchwork of court decisions to determine whether their business model is subject to regulation under the ADA, they must also deal with the fact that there is not an official technical standard for what constitutes a compliant website. Previously, the U.S. Department of Justice (DOJ), which is responsible for enforcing the ADA, announced that it would release rules concerning such compliance and the ADA’s applicability to websites in April 2016. Instead, the DOJ withdrew its announcement in order to garner additional public comment on the subject in view of continually changing technology. Prior to the November 2016 election, it was expected that the DOJ would issue new guidelines as early as 2018. However, it remains to be seen what the new administration will do.
Even if the DOJ were to drastically curtail enforcement, plaintiffs’ attorneys are still left with their current remedies and court decisions, and companies are advised to prepare accordingly. In doing so, a company’s best hope of determining what technical requirements will make its website ADA-compliant lies in interpreting previous DOJ settlements. Many of these settlements have been resolved with the company in question agreeing to ensure that its website meets the World Wide Web Consortium’s Web
Content Accessibility Guidelines (WCAG), available at http://www.w3.org/TR/WCAG20. Many commenters predict that, if the DOJ does issue its guidelines, they will closely track or specifically incorporate the WCAG.
Although the current state of the law and the technical standards are in flux, companies can take proactive steps to protect themselves. For instance, they can hire an outside consultant to audit their current website to determine if there are accessibility issues and recommend fixes. Companies can also work with their website designer if they are designing a new online portal to ensure that the latest WCAG standards are incorporated. Legal counsel can also advise companies of the state of the law in their jurisdiction and help them assess whether they are potentially vulnerable to website accessibility litigation. Given the lack of certainty in this new area of regulation and the increasingly important role that internet access plays in commerce, it is crucial that companies are familiar with any new developments in the law.
Steve is the Chair of the Firm’s Commercial Litigation Group and a member of the Labor & Employment Group. Jackson is an Associate in the Commercial Litigation and Construction Groups. Steve can be reached at (717) 234-5530 or email@example.com and Jackson can be reached at (202) 466-4110 or firstname.lastname@example.org.
By now, you may have already heard from us about the amendments to the Pennsylvania Mechanics’ Lien Law, but it is time for an update since they are now in effect. We have explained the changes in depth in prior issues of this newsletter and on our blog. (All past articles can be found on our website.) Now, the long-anticipated Pennsylvania State Construction Notices Directory is up and running with over 30 searchable projects listed.
A few things to keep in mind are that the Directory is for projects costing more than $1.5 million, and it is optional for owners to register such projects. If an owner registers a project, all subcontractors and suppliers on the project must file a Notice of Furnishing within 45 days of commencing work or first providing materials to retain their lien rights. Subcontractors and suppliers that fail to file their Notice of Furnishing within 45 days of commencing their work on the registered projects will lose their lien rights.
The prior lien notice rules remain in place, so subcontractors and suppliers must still provide owners with written notice of their intention to file a lien claim at least 30 days before filing a lien on the subject property, with a lien being required within 6 months of last work. In other words, if an owner registers a project, there are front-end Notice of Furnishing requirements and back-end Notice of Intent to Lien requirements, together with the lien filing itself.
By clicking on a project registered on the website (https://apps.pa.gov/scnd), all participants on a construction project (including the general public) have access to property and contact information for the owner, contractor, and any party that has filed a Notice of Furnishing.
The Directory will: (1) help owners identify the pool of lower-tier contractors and monitor their lien risk; and (2) help lower-tier contractors and suppliers monitor the status of a project and protect their payment rights.
If you have any questions about navigating the Directory or ensuring that your lien rights are protected, we encourage you to contact counsel. Many of our attorneys will be giving seminars on this topic, and we will continue to provide updates on our construction law blog, Twitter page, and LinkedIn page.
In the wake of a 2013 deadly building collapse on Market Street in Philadelphia, the Department of Licenses and Inspections for the City of Philadelphia (L&I) overhauled its permit, inspection, training and enforcement procedures and requirements on construction sites, particularly those sites involving demolition. Former Mayor Michael A. Nutter signed the ordinance making these changes in February 2014 and it has gradually been implemented. On January 3, 2017, additional permit requirements took effect for work involving
A “Complete Demolition Permit” is required when a contractor intends to remove two-thirds of structural framing members and modify the exterior envelope. Other demolitions also require permitting, but the Complete Demolition Permit requirements are more arduous because an owner seeking such a permit must submit a Site Safety Plan (SSP) with the permit application, signed by the owner of the property. Due to the technical nature of the SSP, it is likely that the licensed demolition contractor will complete this information on the owner’s behalf. The SSP includes two components: Part A provides information for the public and Part B includes a detailed work plan that will not be made public by L&I.
Part A includes information for the public on the height and dimensions of the building. It also requires that a disclosure be made on safety and environmental issues, such as the existence of asbestos, lead paint, or other flammables, and how such materials will be removed. Part A explains the size of the site safety zone that must be implemented depending on the type of demolition methods used. In the event the building being demolished is higher than the roof of an adjoining building, the Part A submission should indicate how the adjoining buildings will be protected with shoring, bracing and other means. Applicants should also provide information on protection measures for other structures, such as utility poles, sidewalks, and trees.
Part B of the SSP requires the applicant to provide a detailed work plan. This work plan includes information on the material used in the existing structure, such as masonry exterior walls, steel framed roof, and internal columns made of reinforced concrete. Part B further requires the applicant to identify how each element of the structure will be demolished, e.g. handheld devices or with mechanical means. Importantly, applicants must provide a description of how the demolition will proceed. Specifically, no wall section which is more than one story or 12 feet in height can stand alone. The applicant must also describe how the site will be restored and debris disposed.
Submission of the SSP raises interesting questions regarding the review and acceptance by the City. For example, who is responsible if the City disagrees with a method of demolition or requires more costly precautionary measures? Also, with respect to the relationship between a contractor and the owner, who is liable for a delay in the City’s issuance of the Complete Demolition Permit due to the City’s failure to timely review the SSP? Moreover, if a resident is concerned as a result of information contained in Part A of the SSP, must the contractor respond or change its means and methods in response to the resident’s complaint? Would such a complaint constitute notice to the contractor in a lawsuit?
These are just some of the questions that may arise and will be resolved by the Courts as the new demolition regulations are put into effect and enforced on construction sites across the City. If you have a question regarding a permit, the attorneys at Cohen Seglias can assist in regulation compliance or liability, whether it be city, state or federal regulations.
Lane is a Partner and Jennifer is an Associate, both practicing in the Firm’s Construction and Green Building and Sustainability Groups. They can be reached at (215) 564-1700, email@example.com and firstname.lastname@example.org.
Our newsletter team recently sat down with new partners Lori Wisniewski Azzara and Maria L. Panichelli.
Q: How did you get started in construction, given that few women lawyers focus on this industry?
A: Lori — During law school, I worked at a construction law firm in Pittsburgh. While there, I was immersed in all aspects of construction and construction law and quickly learned the unique and exciting aspects of the industry. One partner that I worked closely with was a woman and a mother, and showed me that women can be successful in the construction industry, despite often times being the minority.
Q: What first drew you to Cohen Seglias?
A: Maria — Prior to working at Cohen Seglias, I practiced at two large-sized firms. I was kind of a jack-of-all trades, general litigator. I really liked litigation, but I was looking for a career that would allow me to develop my expertise in a particular practice area. When I was approached and asked to interview for the Federal Group at Cohen Seglias, it was the perfect opportunity. I knew of the firm — it has a great reputation with its clients and with other attorneys — and working with the Federal Group offered me a chance to continue litigating but also develop a very specialized area of practice in a growing and dynamic field. It was a perfect fit.
Q: What made you stay and grow here? What is it that you like about the firm?
A: Lori — Since starting at the firm, I have been a part in helping it grow, not only in the Pittsburgh region, but into Kentucky, Ohio and West Virginia. When I started, we had only a few offices. Now, we have grown to 10 offices and have more than doubled the number of attorneys. It is exciting to be a part of that growth, and I look forward to continuing to play a role, now as a partner, in the firm’s very promising future.
A: Maria — I think our firm is unique in that we approach the practice of law in a holistic way. It is not just about solving the specific problem a client puts in front of you, but looking at a company, its business plan, and its future goals, to help develop a comprehensive plan for success. We are always looking at the big picture and striving to see what additional value we can provide the client. I really like that. Our practice is also very collaborative and friendly. Even though many of us are in different practice groups, with various areas of expertise, we all work together to help achieve the best possible result for our clients.
Q: What services do you provide your clients?
A: Lori — Because I am licensed in Pennsylvania, Kentucky, Ohio and West Virginia, I am able to assist my clients on both a regional and local level. In construction, clients are often working across state lines. I can provide continuity in assisting with all aspects of their projects, from contract review and negotiation to preparing notice letters during construction to claim preparation and submission, regardless of the state in which they are working. After being a part of the development of the Pittsburgh office, I am taking that experience and focusing on the development of the Kentucky office and increasing our presence in the Midwest.
A: Maria — I run the gamut of all things Federal contracting and small business procurement. From SBA and VA Small Business programs certification and eligibility issues, to REAs and claims, to bid protests, to size/status determination cases, to drafting subcontracts, teaming agreements, and joint ventures. If it is in the Federal contracting realm, I do it.
Q: What do you enjoy most about your practice?
A: Maria — Two things, really. First, the problem solving. I really enjoy sitting down and figuring out how to make the law work in our client’s favor. Second, I like that in law, you are always learning new things. You never stop growing and expanding your capabilities.
A: Lori — Practicing in the construction industry and at this firm for the last 10 years has opened so many doors and allowed me to see and be a part of many amazing projects. Every day is different for me, and I truly enjoy getting out of the office to meet my clients at the project site to see their work. I can be a part of a project from the beginning with contract drafting and negotiation, all the way to the end, with ensuring that my clients are fully compensated for their work. In addition, I am very passionate about green and sustainable construction, and Pittsburgh is leading the country on so many levels in this area. It is an exciting time to practice in the Pittsburgh and surrounding areas.
Lori is based in the Firm’s Pittsburgh office and can be reached at (412) 434-5530 or email@example.com. Maria is based in the Firm’s Philadelphia office and can be reached at (215) 564-1700 or firstname.lastname@example.org.