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By Kerry Shapiro

Last week, President Trump signed an executive order with potentially wide-ranging implications for the mining industry and many other affected stakeholders. The order directs the Department of the Interior (DOI) to review national monuments, particularly those larger than 100,000 acres, that were designated since January 1, 1996, and to recommend if any of those designations should be modified, resized or rescinded.

The Bears Ears National Monument Controversy

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My partner, Jon Welner, is a leading practitioner of prevailing wage law in California and is the Chair of JMBM’s Prevailing Wage Group. He is also a member of JMBM’s Natural Resources and Mining Group and advises and defends the construction materials industry on prevailing wage matters including recent California legislation to expand prevailing wage law to cover the delivery of concrete to public work sites (AB 219).

— Kerry Shapiro

The U.S. Court of Appeals Has Revived AB 219 Once Again!

by Jon Welner

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

 

In a dizzying turn of events, the U.S. Court of Appeals has revived AB 219 for a second time. Less than three weeks ago, I posted an article describing how the U.S. District Court issued a permanent injunction overturning AB 219, effectively striking it down for the second time. Now it’s back!

A Quick Recap

AB 219 took effect on July 1, 2016. It applied California prevailing wage requirements to the delivery of ready-mix concrete to public works. This was big news for two reasons: (1) it hit the ready-mix concrete industry—and all of the businesses that depend on it—very hard; and (2) it represents the first time that prevailing wage requirements have been imposed on material suppliers (as opposed to on-site contractors).

On June 30, 2016—the day before AB 219 took effect—eight ready-mix companies filed a lawsuit in federal court challenging the constitutionality of the new statute on Equal Protection grounds. In essence, they argued it was unfair to single out ready-mix concrete companies for special treatment, leaving all other material suppliers unaffected. Continue reading

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My partner, Jon Welner, is a leading practitioner of prevailing wage law in California and is the Chair of JMBM’s Prevailing Wage Group. He is also a member of JMBM’s Natural Resources and Mining Group and advises and defends the construction materials industry on prevailing wage matters including recent California legislation to expand prevailing wage law to cover the delivery of concrete to public work sites (AB 219).

— Kerry Shapiro

Reversal of Fortune Deja Vu: Court Overturns AB 219… Again!

By Jon Welner

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

The U.S. District Court in Los Angeles has struck down AB 219 as unconstitutional once again.

AB 219 took effect on July 1, 2016. It applied California prevailing wage requirements to the delivery of ready-mix concrete to public works. This was big news for two reasons: (1) it hit the ready-mix concrete industry—and all of the businesses that depend on it—very hard; and (2) it represents the first time that prevailing wage requirements have been imposed on material suppliers (as opposed to on-site contractors).

On June 30, 2016—the day before AB 219 took effect—eight ready-mix companies filed a lawsuit in federal court challenging the constitutionality of the new statute on Equal Protection grounds. In essence, they argued it was unfair to single out ready-mix concrete companies for special treatment, leaving all other material suppliers unaffected.

Since then, the Court battle has taken a number of dramatic twists and turns. AB 219 has been suspended, reinstated, overturned, and appealed, as follows:

  • Oct. 21, 2016—District Court issues preliminary injunction suspending enforcement of AB 219. [AB 219 not in effect.]
  • Oct. 24, 2016—State appeals the preliminary injunction.
  • Dec. 16, 2016—Court of Appeals stays the preliminary injunction pending appeal. [AB 219 back in effect.]
  • Mar. 14, 2017—District Court issues permanent injunction overturning AB 219. [AB 219 not in effect.]
  • Mar. 14, 2017—State appeals the permanent injunction.
  • Mar. 29, 2017—State files motion to stay the permanent injunction pending appeal.

If the Court of Appeals grants the stay, AB 219 will be back in effect once again!

What should ready-mix companies do now?

With all of this back and forth, what should ready-mix companies do? Should they stop complying with AB 219, since it has been declared unconstitutional by the District Court? Or should they continue complying until there is a final decision on appeal?

Companies should consult with their own legal counsel to decide on a course of action. Here are some important considerations:

  • Contracts. Even though AB 219 has been ruled unconstitutional, ready-mix companies must still comply with their contractual obligations. If they have contracts requiring them to pay prevailing wage or take other steps consistent with AB 219, they must continue to do so (or modify the contract).
  • Non-DIR Enforcement. The lawsuit challenging AB 219 was brought against the Director of the Department of Industrial Relations (DIR) and the Labor Commissioner, the chief enforcement official at DIR. DIR has therefore taken the position that the permanent injunction only prohibits the enforcement of AB 219 by DIR—not enforcement by other agencies such as Caltrans or by workers or unions in private lawsuits. So despite the District Court’s ruling, we can expect Caltrans to continue requiring and enforcing AB 219 on its projects; and some drivers might work with unions to file lawsuits against their employers. (Of course, ready-mix companies will argue that no agency or person should be allowed to enforce AB 219, since the District Court ruled it to be unconstitutional!)
  • Retroactive Enforcement. DIR has also taken the aggressive position that if AB 219 is upheld on appeal, DIR intends to retroactively enforce it going back to the date it first took effect, i.e., July 1, 2016. This policy seems patently unfair: it requires companies to comply with AB 219 even though the District Court has declared the law to be unconstitutional. It is not clear whether courts in the future will allow DIR to do this. Nonetheless, DIR’s position creates uncertainty and risk for ready-mix companies who choose not to comply with AB 219.

What’s Next?

DIR has moved for a stay of the permanent injunction, pending a final decision on appeal. The Court will decide on the stay in the next few weeks.

The parties are scheduled to file their appeal briefs in August and September 2017. Oral argument will likely be scheduled for early 2018, with a decision sometime later in the year.

____

Jon Welner is a leading practitioner of prevailing wage law in California. He is a Partner at Jeffer Mangels Butler & Mitchell LLP (JMBM) and Chair of JMBM’s Prevailing Wage Group. Contact him at JWelner@jmbm.com.

JMBM’s Prevailing Wage Group advises and defends developers, contractors, and manufacturers on the most challenging and complex prevailing wage matters in California.

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BLM releases maps showing 1.3 million acres of proposed mining withdrawal

On January 13, 2017, the U.S. Bureau of Land Management (“BLM”) released maps showing the areas that BLM, on December 28, 2016, proposed to withdraw from mining. The withdrawal is designed to “protect nationally significant landscapes with outstanding cultural, biological, and scientific values” and is part of the Desert Renewable Energy Conservation Plan (“DRECP”).

What does the proposed withdrawal do?

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My partner, Jon Welner, is a leading practitioner of prevailing wage law in California and is the Chair of JMBM’s Prevailing Wage Group. He is also a member of JMBM’s Natural Resources and Mining Group and advises and defends the construction materials industry on prevailing wage matters including recent California legislation to expand prevailing wage law to cover the delivery of concrete to public work sites (AB 219).

— Kerry Shapiro

Reversal of Fortune: AB 219 is Back!

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My partner, Jon Welner, is a leading practitioner of prevailing wage law in California and is the Chair of JMBM’s Prevailing Wage Group. He is also a member of JMBM’s Natural Resources and Mining Group and advises and defends the construction materials industry on prevailing wage matters including recent California legislation to expand prevailing wage law to cover the delivery of concrete to public work sites (AB 219).

— Kerry Shapiro

New CA Prevailing Wage Law Suspended by Federal Court!

By Jon Welner

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

U.S. District Court Suspends New Law that Made Deliveries of Concrete Subject to California Prevailing Wage (AB 219)

In a surprise move, the U.S. District Court in Los Angeles issued an Order today blocking implementation of AB 219, a new statute that added the delivery of ready-mix concrete to the growing list of activities covered by California Prevailing Wage Law. (Please see my prior post on AB 219 for additional background.)

AB 219 was passed last year and took effect on July 1, 2016. The new law imposed massive new burdens on the ready-mix industry, including complex new record-keeping and tracking requirements. On June 30, 2016, a group of eight ready-mix companies filed a lawsuit challenging the new statute as a violation of Equal Protection and federal law. The Court granted the plaintiffs’ motion for a preliminary injunction on October 18, 2016.

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My partner, Jon Welner, is a leading practitioner of prevailing wage law in California and is the Chair of JMBM’s Prevailing Wage Group. He is also a member of JMBM’s Natural Resources and Mining Group and advises and defends the construction materials industry on prevailing wage matters including recent California legislation to expand prevailing wage law to cover the delivery of concrete to public work sites (AB 219).

— Kerry Shapiro

Another First: CA Prevailing Wage Law Expanded to Cover Material Suppliers

By Jon Welner

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

AB 219 Expands Prevailing Wage To Include Deliveries of Ready-Mix Concrete

Since the 1930s, prevailing wages have applied only to construction work, not to the manufacture or delivery of construction supplies.

In California this distinction was made explicit in 1976, when the Court of Appeal held that “materialmen” and “employees of materialmen” who sell supplies to the general public are exempt from prevailing wage law; and “the delivery of standard materials” to a public work is not subject to prevailing wage. O. G. Sansone Co. v. Department of Transportation (1976) 55 Cal. App. 3d 438, 442-443.

Simply put: prevailing wage has always applied to the bricklayer, not to the bricks.

Until now. Last year, the California Legislature passed and the Governor signed AB 219, which extends prevailing wage requirements to the delivery of ready-mix concrete to public works. The bill was codified as Labor Code Section 1720.9.

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California Mining Update

AB 1142 and SB 209: What operators need to know about SMARA modernization
Changes will be effective January 1, 2017

by
Kerry Shapiro
Matthew J. Sanders


This article was first published in The Conveyor magazine, a publication of CalCIMA.

On April 18, 2016, Governor Jerry Brown signed into law two bills that together provide the most significant update to the California Surface Mining and Reclamation Act (SMARA) in 25 years.  Assembly Bill (AB) 1142 (Gray) and Senate Bill (SB) 209 (Pavley) are the outgrowth of more modest changes in recent years, and of a promise by the Governor, in 2013, to reform SMARA from “top to bottom.”  Although the bills are not effective until January 1, 2017, operators must be aware of their changes and start planning for their implementation.

Most important in the near term are changes to SMARA’s inspections process, financial assurance approval process, reclamation plan requirements, and inspector qualifications.

Inspections Process

Beginning in 2017, operators must request, on their annual reports, an inspection date within 12 months of their prior inspection.  For inspections conducted in 2016, the 12-month date will be triggered for 2017.

Financial Assurances

The annual inspection date is the starting point for wholly new annual financial assurance review and approval processes.  Note the plural—under AB 1142 and SB 209, SMARA will now have (1) a process for financial assurance cost estimates (FACEs) for new or amended reclamation plans and (2) another process for annual FACE updates.  Each process sets new steps and deadlines that are tied to the annual inspection date.  Moreover, each process provides the Department of Conservation (DOC) a new right to formally consult with lead agencies and operators during the FACE review process, and to give DOC a new right to appeal a lead agency’s approval of a FACE.  Annual financial assurance review was already a SMARA requirement, but the new legislation formalizes the review process to provide greater clarity and transparency.

Corporate self-bonding is now permitted for companies worth more than $35 million, subject to regulations which will be approved by the SMGB.  Multiple operations can combine their assets to pass the financial test, but self-bonding is limited to 75% of the value of an operator’s FACE(s). Continue reading

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California Mining Update

AB 1142 and SB 209: What lead agencies need to know about SMARA Modernization
Changes will be effective January 1, 2017

by
Kerry Shapiro
Matthew J. Sanders

 

On April 18, 2016, Governor Jerry Brown signed into law two bills that together provide the most significant update to the California Surface Mining and Reclamation Act (SMARA) in 25 years.  Assembly Bill (AB) 1142 (Gray) and Senate Bill (SB) 209 (Pavley) are the outgrowth of more modest changes in recent years, and of a promise by the Governor, in 2013, to reform SMARA from “top to bottom.”  Although the bills are not effective until January 1, 2017, lead agencies and operators must be aware of their changes and start planning for their implementation.

Most important in the near term are changes to SMARA’s inspections process, financial assurance approval process, reclamation plan requirements, and inspector qualifications.

Inspections Process

Beginning in 2017, operators will request, on their annual reports, an inspection date within 12 months of their prior inspection. (For inspections conducted in 2016, the 12-month date will be triggered for 2017.)  Lead agencies may reschedule inspections, and will have 90 days — not 30 days — to file Notices of Completion with the Department of Conservation (DOC).  However, the additional time comes with a catch: lead agencies must use their Notices to describe any problems at operations and their plans for correcting them.

Financial Assurance Approval Process

The annual inspection date is the starting point for wholly new annual financial assurance review and approval processes.  Note the plural—under AB 1142 and SB 209, SMARA will now have (1) a process for financial assurance cost estimates (FACEs) for new or amended reclamation plans and (2) another process for annual FACE updates.  Each process sets new steps and deadlines, tied to the annual inspection date.  Both processes provide DOC a new right to formally consult with lead agencies and operators during the FACE review process, and also give DOC a new right to appeal a lead agency’s approval of a FACE.  Annual financial assurance review was already a SMARA requirement, but the new legislation formalizes the review process to provide greater clarity and transparency. Continue reading

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Federal environmental lawyer, Matthew J. Sanders, recently joined Jeffer Mangels Butler & Mitchell as Of Counsel in our San Francisco office. Sanders’ federal and California environmental law experience includes successfully litigating myriad federal and state appeals, writs, and motions and providing strategic representation and counseling on major projects and enforcement actions. Through his experience in government, the non-profit sector, and private practice, Sanders has developed strong relationships throughout the environmental and energy legal community.

In his recent article entitled Economic impacts in ESA critical habitat designations, co-authored with Alicia E. Thesing and published by the American Bar Association’s Section of Environment, Energy and Resources, Sanders and Thesing discuss the Ninth Circuit’s recent decision in Building Industry Association of the Bay Area v. U.S. Department of Commerce and its implications for future critical habitat decisions and challenges.

The decision — which affirmed the designation of more than 13,000 square miles (8.6 million acres) of critical habitat for the federally threatened green sturgeon — holds that the National Marine Fisheries Service (NMFS) has discretion in how it considers the economic impacts of designating critical habitat. Sanders and Thesing write that the decision “will give federal agencies more leeway in making critical habitat decisions” and have potentially different implications for environmental and industry plaintiffs.