Justia Construction Law Opinion Summaries

Articles Posted in US Court of Appeals for the Third Circuit
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In 2018, Kousisis and Alpha Painting were convicted of conspiracy to commit wire fraud, 18 U.S.C. 1349, and three counts of wire fraud, 18 U.S.C. 1343. The charges arose from false documents filed concerning “disadvantaged business enterprise” status in transportation construction projects for which the U.S. Department of Transportation provided funds through the Federal Highway Administration to the Pennsylvania Department of Transportation. The district court imposed a 20-point sentencing enhancement under U.S.S.G. 2B1.1(b)(1), which corresponds to a loss of $9.50 million-$25 million, noting that the actual loss to the government was not measurable at the time of sentencing and concluding that Alpha’s “ill-gotten profits” represented an appropriate measure of loss.The Third Circuit affirmed the convictions. The defendants secured PennDOT’s money using false pretenses and the value PennDOT received from the partial performance of those painting and repair services is no defense to criminal prosecution for fraud. The court vacated the calculation of the amount of loss for sentencing purposes, noting the extreme complexity of the case. The victim’s loss must have been an objective of the fraudulent scheme; it is insufficient if that loss is merely an incidental byproduct of the scheme. The court separately vacated a forfeiture order of the entire profit amount on the contracts. View "United States v. Alpha Painting & Construction Co., Inc." on Justia Law

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A project labor agreement (PLA) is a collective-bargaining agreement between a project owner, contractors, and unions, setting the terms and conditions of employment for a particular construction project. The terms can include recognizing a union as the workers’ exclusive bargaining representative and paying the workers union wages—even if they are not union members. The plaintiffs claim the project labor agreements violate the First and Fourteenth Amendments, the National Labor Relations Act, and the Sherman Act.The Third Circuit affirmed the dismissal of the claims, citing lack of standing. Concreteness and particularity are two Article III standing requirements but those concrete injuries must also be actual or imminent. The contractor-plaintiffs declared they never have and never will bid on PLA-covered projects, admitting they never experienced and never will experience a compelled association or economic harm. To the extent the contractors’ declarations are a proxy for determining the actuality or imminence of harm to their employees, the contractors indicate they have not and will not bid on PLA-covered projects. The employees did not plead that they did or plan to work on PLA-covered public projects. The mere fact that the contractors claim they are “able and ready” to bid or work on PLA-covered public projects does not cure their failure to bid in the past and admitted refusal to bid. View "Associated Builders & Contractors of Western Pennsylvania v. Community College of Allegheny County" on Justia Law

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In 2002, Farfield contracted with SEPTA for improvements on Philadelphia-area railroad tracks. The federal government partially funded the project. Work concluded in 2007. As required by federal regulation, Department of Labor (DOL) prevailing wage determinations were incorporated into the contract. Farfield was required to submit to SEPTA for transmission to the Federal Transit Administration a copy of Farfield’s certified payroll, setting out all the information required under the Davis-Bacon Act, 40 U.S.C. 3142(a), with a “Statement of Compliance” averring that the information in the payroll was correct and complete and that each worker was paid not less than the applicable wage rates and benefits for the classification of work performed, as specified in the applicable wage determination. Falsification of a payroll certification could subject Farfield to criminal penalties or civil liability under the False Claims Act (FCA).A union business manager suspected that Farfield had won government contracts with low bids by intending to pay less-skilled workers to perform certain work that would otherwise have been the bailiwick of higher-skilled, higher-paid workers. Ultimately, the union filed a qui tam FCA complaint. The United States declined to intervene. The court entered a $1,055,320.62 judgment against Farfield: $738,724.43 to the government and $316,596.19 to the union, plus $1,229,927.55 in attorney fees and $203,226.45 in costs. The Third Circuit affirmed. In view of the totality of the circumstances, Farfield’s Davis-Bacon violations were not minor or insubstantial. View "International Brotherhood of Electrical Workers v. Farfield Co" on Justia Law

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In 2012, Earl contracted for the purchase of a house in Allegheny County from NVR, the seller and builder of the house. NVR's agents made representations about the house’s construction, condition, and amenities, including that the house would be constructed in a good and workmanlike manner; that NVR would remedy any deficiencies; and that the house would be constructed in accordance with relevant building codes and standards. Construction was completed around March 2013. Upon moving in, Earl encountered several material defects. NVR’s attempts to repair the defects were inadequate and exacerbated some of the issues, despite NVR’s assurances that the problems were remedied. Several promised conditions and amenities that Earl had relied upon had not been provided.Earl, claiming that NVR’s failure to provide the promised conditions and amenities of the agreement were knowing and willful, sued for violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL) and breach of implied warranty of habitability. The Third Circuit reversed the dismissal of her UTPCPL claim. Rulings by Pennsylvania appellate courts subsequent to an earlier Third Circuit holding have cast substantial doubt upon the continuing validity of prior interpretations of the UTPCPL. The economic loss and “gist of the action” doctrines no longer bar UTPCPL claims. View "Earl v. NVR Inc" on Justia Law

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A Compact between Pennsylvania and New Jersey created the Delaware River Joint Toll Bridge Commission, which is authorized to “acquire, own, use, lease, operate, and dispose of real property and interest in real property, and to make improvements,” and to "exercise all other powers . . . reasonably necessary or incidental to the effectuation of its authorized purposes . . . except the power to levy taxes or assessments.” The Commission undertook to replace the Scudder Falls Bridge, purchased land near the bridge in Pennsylvania, and broke ground on a building to house the Commission’s staff in a single location. Pennsylvania Department of Labor and Industry inspectors observed the construction; the Commission never applied for a building permit as required under the Department’s regulations. The Commission asserted that it was exempt from Pennsylvania’s regulatory authority. The Department threatened the Commission’s elevator subcontractor with regulatory sanctions for its involvement in the project. The Commission sought declaratory and injunctive relief.After rejecting an Eleventh Amendment argument, the Third Circuit upheld an injunction prohibiting the Department from seeking to inspect or approve the elevators and from further impeding, interfering, or delaying the contractors. Pennsylvania unambiguously ceded some of its sovereign authority through the Compact. The fact that both states expressly reserved their taxing power—but not other powers—indicates that they did not intend to retain the authority to enforce building safety regulations. View "Delaware River Joint Toll Bridge Commission v. Secretary Pennsylvania Department of Labor and Industry" on Justia Law