When Is a Final Approval Not the Final Word? Empire Wind Halt Raises Questions About Managing Risk for Previously Approved Infrastructure Projects
BOEM Halts Construction of Empire Wind 1
On April 16, 2025, the Bureau of Ocean Energy Management (BOEM) issued a formal director’s order instructing Empire Offshore Wind LLC to cease all construction activities related to the Empire Wind 1 offshore wind project. The directive, citing concerns the National Oceanic and Atmospheric Administration (NOAA) raised about the project’s environmental analyses, stems from a broader offshore wind review President Trump’s January 2025 memorandum (90 Fed. Reg. 8363 (Jan. 29, 2025)) initiated. In the January 2025 executive order, Trump cited concerns over “alleged legal deficiencies underlying the federal government’s leasing and permitting of onshore and offshore wind projects,” which could lead to “grave harm—including negative impacts on navigational safety interests, transportation interests, national security interests, commercial interests and marine mammals.”
Although Empire Wind 1 had already received all necessary federal approvals based on a previous NEPA review and begun early-stage construction, BOEM invoked its authority under the Outer Continental Shelf Lands Act and 30 C.F.R. Part 585 to halt activities while the agency reexamines the project’s compliance. The directive requires Empire to remain paused until the review is complete and outlines potential enforcement actions for noncompliance. Work on the project has reportedly been halted.
State Officials’ Response
Gov. Kathy Hochul criticized the move, vowing to oppose what she characterized as federal overreach. “Every single day, I’m working to make energy more affordable, reliable and abundant in New York, and the federal government should be supporting those efforts rather than undermining them,” she stated. The federal halt also drew criticism from Rory M. Christian, chair of the New York State Public Service Commission (PSC), with both officials emphasizing the project’s scale and importance—delivering 800 megawatts of offshore wind energy, powering over 500,000 homes, and supporting more than 1,000 union jobs tied to the South Brooklyn Marine Terminal’s redevelopment.
Permitting Reversals and Political Instability
BOEM’s authority to halt offshore activities is grounded in the Outer Continental Shelf Lands Act and its implementing regulations. See 43 U.S.C. § 1337(p)(4); 30 C.F.R. § 585.102(b).
Federal action to stop work on previously approved projects is rare and typically limited to instances where agencies assert violations of those approvals rather than a re-thinking of the approvals themselves. The reversal of Empire Wind follows a separate determination by the Trump Administration to revoke the 2024 approval of New York’s congestion pricing program after completing environmental review under NEPA and SEQRA.[1] Congestion pricing is continuing right now, but the revocation decision is currently being litigated in the courts.[2] Both cases reveal that even where fully permitted, project sponsors and those financing these undertakings should not discount continued regulatory uncertainty during project construction. It is likely that eventually court decisions will provide further guidance on the level of discretion that federal agencies have to rescind prior project approvals. However, until such guidance is forthcoming this new regulatory environment may lead project applicants to consider a reevaluation of risk allocation in construction agreements and financing for major infrastructure projects.
[1] See Final Environmental Assessment for the Central Business District Tolling Program, U.S. Dep’t of Transp., Fed. Highway Admin. (June 2023), FHWA Approval 88 Fed. Reg. 41999 (June 28, 2023); see also 23 U.S.C. § 109(h).
[2] See e.g., Metro. Transp. Auth. v. U.S. Dep’t of Transp., No. 1:25-cv-01413-LJL (S.D.N.Y. filed Feb. 19, 2025) (seeking declaratory and injunctive relief to prevent the federal government from rescinding prior approval of New York City’s congestion pricing program under the Value Pricing Pilot Program).; State of New Jersey v. U.S. Dep’t of Transp., No. 2:23-cv-03885-LMG-LDW (D.N.J. filed July 21, 2023) (challenging the Federal Highway Administration’s approval of New York’s Central Business District Tolling Program under NEPA and the APA based on alleged environmental and procedural deficiencies).
Mitigation Grant Program Offers Benefits to Homeowners and Communities
The Federal Home Loan Bank (FHLB) of Dallas FORTIFIED Fund Grant Program is entering its third year of operation with more capacity than ever before. The program provides grants through FHLB Dallas members to help income-qualified homeowners install FORTIFIED Roof systems designed to prevent damage from hurricanes, high winds, and other severe weather events.
Funding
The FORTIFIED Fund Grant Program began in 2023 with FHLB Dallas making $1.75 million in grant funds available. In 2024, FHLB Dallas increased the amount to $4 million. Both years, the funds were exhausted. This year, $10 million has been allocated to the FORTIFIED Fund. As of April 18, 2025, $9,131,285 remained available.
Application Process
FHLB Dallas began accepting grant applications on April 15, and the offering will remain open until June 13. Applications are reviewed on a first-come, first-served basis. In the event funds remain available, a second offering will open July 7 and remain open until October 31, or until funds are exhausted. All applications must be submitted by FHLB Dallas member institutions and may request up to $500,000 for up to 50 preapproved households. Grants are capped at $15,000 per home for roof renovations and $7,500 per home for new construction. Members may work with an intermediary organization to identify and qualify households, find roofers and evaluators, and facilitate payments to appropriate parties. Alternatively, members may assume these responsibilities themselves. Application forms and required documentation are available from FHLB Dallas.
FORTIFIED Roof Standards
The FORTIFIED Fund Grant Program helps homeowners replace or upgrade their roofs to meet FORTIFIED Roof standards established by the Insurance Institute for Business & Home Safety (IBHS), an independent, nonprofit scientific research and communications organization. IBHS’s building safety research helps to create more resilient communities. FORTIFIED is a nationally recognized set of construction methods to retrofit or build a home, business, or multifamily development designed to prevent damage that commonly occurs during high winds, hurricanes, hailstorms, severe thunderstorms, and tornadoes up to EF-2. FORTIFIED is based on decades of research, testing, and observations by IBHS. FORTIFIED Roof standards have specific requirements beyond what is required by most building codes that provide a high level of protections from storms.
FORTIFIED Benefits
It is well recognized within the construction and insurance industries that regardless of the type of roof — shingles, metal, or tile — FORTIFIED Roof requirements (including stronger edges, better attachment, sealed roof deck, and impact-resistant shingles) make a home stronger. It has been proven effective repeatedly in real-world severe weather events, lowering insurance premiums and adding financial value. For example, during the record-breaking 2020 hurricane season (hurricanes Laura, Sally, Delta, and Zeta), approximately 95% of the nearly 17,000 FORTIFIED homes impacted by hurricanes experienced little to no damage and had no insurance claims. Additionally, homes with a FORTIFIED designation generally receive discounts/credits on the wind portion of their homeowner’s insurance premium that could be as great as 55% in some states. Furthermore, studies have shown that FORTIFIED homes sell for nearly 7% more than non-FORTIFIED homes.
Eligibility Criteria
The FORTIFIED Fund Grant Program targets owner-occupied, income-qualified primary residences within the FHLB Dallas District, Arkansas, Louisiana, Mississippi, New Mexico, and Texas. Households must meet specific income limitations (120% or less of Area Median Income) and comply with IBHS standards for FORTIFIED Roof systems. All homes included in applications must be precertified as eligible to receive a FORTIFIED Roof by an IBHS-certified evaluator. Documentation requirements include proof of income, homeownership, and compliance with FORTIFIED standards.
Grant Funds
Grant funds are disbursed to FHLB Dallas member institutions prior to renovations for the member to disburse to contractors and evaluators as roofs are completed and certified. FORTIFIED Fund grants can cover costs associated with the pre- and post-construction evaluations to verify that FORTIFIED compliance standards are met. Also, grant funds can be used to cover intermediary fees for roof renovations. Intermediary fees are paid to organizations for their work in sourcing applicants and identifying contractors. These fees are included in the $15,000-per-home maximum grant. Any funds not used in accordance with program requirements must be returned to FHLB Dallas.
Conclusion
While the FORTIFIED Fund Grant Program application process and rules may at first glance appear somewhat daunting, it may be worth the time and effort to consider the opportunities presented by the program. Members not already participating in the program may wish to start with a modest number of homes and plan for greater participation in subsequent years, as indications are that FHLB Dallas will continue the program in the future.
Mistake No. 10 of the Top 10 Horrible, No-Good Mistakes Construction Lawyers Make: Not Treating Your Arbitrator Like Santa
I have practiced law for 40 years with the vast majority as a “construction” lawyer. I have seen great… and bad… construction lawyering, both when representing a party and when serving over 300 times as a mediator or arbitrator in construction disputes. I have made my share of mistakes and learned from my mistakes. I was lucky enough to have great construction lawyer mentors to lean on and learn from, so I try to be a good mentor to young construction lawyers. Becoming a great and successful construction lawyer is challenging, but the rewards are many. The following is the final No. 10 of the top 10 mistakes I have seen construction lawyers make, and yes, I have been guilty of making this same mistake.
Your and your client’s goal after a construction arbitration is to open the emailed award and be as happy as Ralphie, in the beloved movie A Christmas Story, when he opened up his Red Ryder BB gun Christmas morning. While he later almost “shot his eye out” while battling pirates in his backyard, the point is that he was a good boy all year, and it was up to Santa to review his behavior and decide if he deserved his desired BB gun. In any arbitration, your Santa is, of course, your arbitrator. While you may have presented the best case possible, there is no guaranty of your desired award/present under the tree. The mistake made by many lawyers is failing to treat the arbitrator like Santa to make it as easy as possible for that arbitrator to put you on the very nice award list. You need to – prior, during, and after the hearing – provide the best possible cookies and make it more likely for Santa to easily slide down the chimney to deliver that great award in your favor under the tree.
Some of these suggestions below are equally applicable to trial judges, but never forget that most construction arbitrators are not full-time neutrals and are concurrently practicing as a lawyer representing clients. Yes, there are non-lawyers on many panel lists (like the AAA), but the use of any non-lawyer on a three-person arbitration panel is very rare these days. One of the most touted benefits of arbitration is that the experienced arbitrators are experts in construction and can sift through irrelevant evidence and arguments as opposed to a judge (or jury) who may have zero experience in construction.
Know your arbitrator’s likes and dislikes. Santa does not want fish sticks left by the tree; he wants milk, really good cookies and fresh carrots for his reindeer. All arbitrators have their own likes and dislikes, and doing something before, during or after a hearing that is a “dislike” is a bad idea. While you vetted potential arbitrators during the selection process, once chosen, you need to do so all over again. You should be able to get some good information since most of the better-known arbitrators are those that are chosen more often. Reach out within your firm as well as to your construction colleagues. What kind of scheduling order does she prefer? What about handling discovery disputes and dispositive motions? Any preferences for how exhibits are put together? What about “hot boxing” experts (testifying back to back)? Is a time clock used for witnesses (and to reign in long-winded lawyers)? More importantly, are there are any known tendencies on specific issues (like delay damages)? Is there an oft-used arbitrator who is unbelievably hard on parties in their presentation about meeting their burden of proof on damages, even with the informality of arbitration and where the rules of evidence may not be strictly enforced?
Wear the white hat in pre-hearing matters, and don’t be a jerk. Arbitrators hate discovery disputes and ego fights between lawyers just as much as judges. I have found that because as an arbitrator I am not an elected judge, and arbitration is informal, this brings out the jerk in some lawyers. Being a zealous advocate is not the same. Will being difficult help your client? You are building your credibility with the arbitrator in every pre-hearing filing and in-person or telephonic hearing.
Don’t forget that the arbitrator is a construction expert. You helped choose the arbitrator because of his or her expertise. This is not a trial judge who, as in the middle of a bench trial years ago where I was counsel, called the lawyers up and asked, “I keep on hearing about something called a ‘pay application.’ What is that?” In a large multi-week arbitration where I served as chair, one of the lawyers during a direct examination went on for 30 minutes getting the witness to talk about certain construction processes as if the panel were a bunch of fifth graders. As nicely as I could, I interrupted the lawyer and said that he could move on and that the panel did not need to be educated on that topic. Did that impact his credibility? Yes, it did, but the panel did not penalize his client for such a stupid waste of time. Santa knows that time is money, and he has other houses to visit.
Remember the arbitrator is drinking through a fire hose of facts and exhibits. While you have been living with the case and know the thousands of pages of the project and the hundreds of exhibits, remember that the arbitrator is hearing testimony and reviewing exhibits for the first time when the hearing begins. Yes, there may have been dispositive motions and a pre-hearing brief, but when the hearings start, the arbitrator is listening to testimony, making notes, and juggling exhibit books. The lesson? Take your time with your examinations. Slow down. Make sure the arbitrator is caught up to where you are. Provide a brief summary before an examination of what areas you intend to go over, as well as what exhibit books you will use. Santa wants time to understand the house, the living room’s layout, and where best to put the presents.
Create a joint set of exhibit books. The previous blog post, No. 9, emphasized the many benefits of working with the opposing counsel and creating a joint set of exhibit books. Most good arbitrators require such a process, and it stops the problems (delays and confusion) of each side showing up with its own 20 thick exhibit binders when 75% of the exhibits in each set of binders are the same.
Identify the exhibit books you will be using before an examination. Do not wait until you begin a witness examination (direct or cross) to specify which book you will be using. Tell the arbitrator (and counsel) before you start which books you will be using so everyone can pull out those books and better follow your examination. Again, this eliminates all sides going back and forth to find the applicable witness books.
Consider creating witness exhibit books. This may seem counterintuitive if the goals is to limit the number of books, but if you have a witness with a small number of exhibits that are scattered among multiple books, consider putting together an exhibit book for that witness that has the exhibits already numbered (as well as what books they are in).
Color code the exhibit books on the front and the spine. Most counsel use the same black exhibit books. While there may be a label on the front and sometimes the spine, especially if there are multiple books, there can be confusion and time wasted. Using a different color code on the labels, or even different color binders, can help efficiency (“Please go to book 5, the red one”).
Make sure each page in each exhibit is numbered. While many of the exhibits will have their own numbers, confusion and delay occur when, for instance, there is an exhibit that has 20-60 pages, but the individual pages are not numbered. This happens with photos, long text streams, and multiple invoices. There is nothing more frustrating for an arbitrator (and a witness), and it disrupts an examination, for the lawyer to say: “Please turn to book 18, exhibit 135, and if you go about a fourth of the way in, you will see a picture that looks like…” And no one can find it. Worse, halfway through your “Perry Mason-like” cross examination about that picture, the arbitrator says, “Counsel, sorry, I must have been looking at the wrong picture. Can you orient me?”
Make good decisions on what exhibits go into your books, and keep up with what exhibits have been used in the hearing. The arbitrator understands that since there is limited pre-hearing discovery in most arbitrations (sometimes no depositions), the tendency is to include every document or email. But be careful not to dump scores of exhibits into books that may not have even been used. This will impact your credibility. And pay close attention to what exhibits are used during the hearing. It may be (again, treat your arbitrator like Santa) that with everyone’s cooperation, there can be scores of exhibits removed from books, or even complete books can be withdrawn.
Ralphie deserved his BB gun, but not the destruction of his family’s turkey by the next- door neighbor’s coon hounds. By thinking about and implanting the many ways to make your arbitrator’s decision-making more efficient, you create credibility for yourself and your client and will increase the likelihood of an excellent Christmas morning.
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Missouri Enacts Significant Utility/Regulatory Omnibus Bill
On April 9, 2025, Missouri Governor Mike Kehoe signed into law a comprehensive Utility Omnibus Bill – Senate Bill 4 (SB 4 or the Bill). Among other things, the Bill significantly changes the regulated electric utility landscape. SB 4 establishes a statutory integrated resource planning framework, requires electrical corporations to add schedules governing large load customers to their tariffs, authorizes recovery of construction work in progress for the development of new natural gas generation facilities and establishes new standards for decommissioning large thermal generation assets.
Integrated Resource Planning
The last section of SB 4 modifies the integrated resource planning (IRP) process under what will become Section 393.1900 RSMo. The Bill makes filing an IRP a statutory requirement, rather than the current IRP process, which is codified by regulations administered by the Missouri Public Service Commission (MPSC). Under the current regulations, utilities file a new IRP every three years with an informational-only “Preferred Plan.” Every year between the triennial filings, utilities provide annual updates. The MPSC does not “approve” the Preferred Plan, and the utility can deviate from the Preferred Plan as long as it provides notice within 60 days of the utility’s determination of the need to deviate. Under the current regulations, adherence to the Preferred Plan does not meaningfully streamline the utility’s need to file for a certificate of convenience and necessity (CCN) prior to beginning construction on a new generation facility.
By contrast, under SB 4, utilities will file its IRP every four years, and CCN approvals will be streamlined if the utility can show consistency with their Preferred Plan. After holding a public hearing, the MPSC is specifically required to determine if the Preferred Plan “represents a reasonable and prudent means of meeting the electrical corporation’s load serving obligations at just and reasonable rates.” If such a finding is made, it “shall constitute the commission’s permission for the electrical corporation to construct or acquire the specified supply-side resources.” Before issuing a CCN, the MPSC will still assess the utility’s qualifications to construct and operate the resources, their ability to finance construction or acquisition of the resources, and siting consideration. The CCN process will be vastly expedited, requiring Commission action in 120-180 days. The IRP requirements of SB 4 begin in August 2027. The MPSC is directed to promulgate rules to implement the new IRP requirements, and such rules will need to be in place prior to August 2027.
Large Load Tariff Schedules
SB 4 requires electric utilities to submit schedules that govern large load customers to the MPSC for inclusion in the utility’s service tariffs. This provision will be codified at Section 393.130(7) RSMo. Utilities with over 250,000 customers must submit schedules for customers who are reasonably projected to exceed 100 megawatts (MW) of annual peak demand. Utilities with fewer than 250,000 customers must submit schedules for customers reasonably projected to exceed 50 MW of annual peak demand. The schedules should be designed to reflect these customers’ representative share of the costs incurred to serve them, to prevent other customer classes’ rates from reflecting any unjust or unreasonable costs arising from service to such customers.
Recovery of Construction Work in Progress for New Natural Gas Generation Facilities
While Missouri law has prohibited electric utilities from charging customers for the costs of construction of new facilities prior to their becoming operational, SB 4 allows electric utilities to recover construction work in progress (CWIP) in its rate base for new natural gas generation units. This provision is codified in new Section393.135(2) RSMo. The amount of CWIP that a utility may recover is limited by the estimated cost of the project and project expenditures made during the estimated construction period for the project. Any recovery of CWIP is subject to refund with interest if the MPSC determines that construction costs were imprudently incurred or if the project is not placed in service within a reasonable amount of time.
Furthermore, the CWIP recovery provision replaces other allowances for recovery of funds used during construction that may have otherwise been recoverable in the rate base for an electric utility. The rate base used to determine a deferred return under Section 393.1400.3(2) RSMo. will now include an offset for the amount of CWIP included in the rate base under Section 393.135.2.
The CWIP recovery provision will sunset in 2035 unless, in a hearing conducted in 2035, the MPSC chooses to extend the provision through 2045 based upon a submission from an electric utility demonstrating good cause for such an extension.
Decommissioning & Replacement of Generation Facilities
SB 4 prescribes a new practice for decommissioning and replacing thermal generation assets. This will be codified in Section 393.401 RSMo. Before closing an existing electric generating power plant on or after January 1, 2025, the electric utility must certify to the MPSC that it has secured and placed an equal or greater amount of reliable electric generation on the grid as accredited power resources based on the relevant regional transmission organization’s resource accreditation for the technology at issue and any loss of load expected by the utility. An “existing electric generating power plant” is defined as a thermal power plant (or generating unit/combination of generating units within a thermal power plant) with over 100 MW of nameplate capacity. Concurrent with the closure of the existing generation asset, the electric utility must have adequate electric transmission lines in place and the replacement reliable electric generation shall be fully operational, unless the new facility uses some or all of the interconnection facilities of the existing asset or the existing asset is closed due to an “unexpected or unplanned event.”
Under SB 4, “dispatchable power resources” shall comprise at least 80 percent of the average of the summer and winter accredited capacity of the replacement reliable electric generation. Section 393.401.2 RSMo. Furthermore, if “existing electric generating power plant” capacity is replaced pursuant to Section 393.401, its capacity shall not be replaced by “replacement resources” as defined in Section 393.1705 RSMo., which includes wind and solar energy. It is unclear from the statute to what extent, if any, renewable energy resources may comprise up to 20 percent of the replacement reliable electric generation.
Renewable Portfolio Standards
SB 4 amended Missouri’s Renewable Portfolio Standard (RPS) statute: Section 393.1030 RSMo. Renewable energy generated by an electric utility with between 250,000 and 1,000,000 retail customers in Missouri and contracted for by an “accelerated renewable buyer” cannot have its renewable energy certificates (RECs) used to meet the utility’s RPS requirements, and the RECs shall be retired by the accelerated renewable buyer. Evergy is the only electric utility that will be affected by this provision. An “accelerated renewable buyer” is an electric utility customer with an aggregate load over 80 MW that contracts to obtain RECs — as defined in Section 393.1025 RSMo. — or energy and RECs from solar or wind generation located within the Southwest Power Pool and placed into service after January 1, 2020. SB 4 exempts “accelerated renewable buyers” from any RPS compliance costs established by utilities regulated by this section and approved by the MPSC associated with the amount of credits retired pursuant to new Section 393.1030.2.
Federal Judge in Pennsylvania Reverses Dismissal of Medical Marijuana Cardholder’s Disability Discrimination Claim
On April 11, 2025, a federal judge for the U.S. Western District of Pennsylvania reversed his recent decision to dismiss a disability discrimination claim from a job applicant with a medical marijuana card who alleged he had a job offer rescinded following a pre-employment drug screen.
Quick Hits
A federal judge reinstated a disability discrimination claim after a job applicant with a medical marijuana card alleged that his job offer was rescinded without proper consideration of reasonable accommodations for his underlying medical conditions.
The judge had previously dismissed the disability discrimination claim after finding that status as a medical marijuana cardholder was not a qualifying disability.
The ruling underscores the legal uncertainty surrounding the protection of employees’ lawful medical marijuana use under the Pennsylvania Human Relations Act.
While considering a motion to certify an appeal, U.S. District Judge Robert J. Colville reversed his March 2025 dismissal of a disability discrimination claim under the Pennsylvania Human Relations Act (PHRA) brought by a job applicant who alleged a construction company failed to accommodate his medical marijuana use.
Judge Colville said he had “failed to give due consideration” to the allegation the employer did not discuss any reasonable accommodations for the job applicant’s disability other than his medical marijuana use.
The plaintiff, Brian Davis, alleged that Albert M. Higley Company, LLC, rescinded the job offer for a project engineer position following a pre-employment drug screen. Davis alleged that he was diagnosed with anxiety, depression, and attention-deficit/hyperactivity disorder (ADHD) and was certified to use medical marijuana to treat the conditions along with other prescription drugs.
On March 7, 2025, Judge Colville dismissed Davis’s claim for disability discrimination under the PHRA. Still, the judge allowed the suit to continue on a separate claim that the company refused to hire him in violation of Pennsylvania’s Medical Marijuana Act (MMA).
In that ruling, Judge Colville stated he was “constrained” by the 2020 Commonwealth Court of Pennsylvania decision in Harrisburg Area Community College (HACC) v. Pennsylvania Human Rights Commission, which held the PHRA does not require accommodation of an individual’s legal medical marijuana use because it is not a qualified disability.
The ruling was significant in that it was potentially the first instance of a federal court finding that lawful medical marijuana use was not a qualifying disability under the PHRA.
However, in his latest decision, Judge Colville declined to certify the issue for an immediate appeal. Instead, he reinstated the disability discrimination claim “to the extent that it asserts that Defendant failed to engage in the interactive process in good faith by failing to discuss or consider reasonable accommodations other than Plaintiff’s marijuana use.” (Emphasis in the original.)
“To be clear, the Court did not hold that an individual with a disability who is also a medical marijuana user is not entitled to any reasonable accommodation for their disability under the PHRA,” Judge Colville said. “Rather, the Court simply held that continued marijuana use is not a reasonable accommodation under the PHRA.” (Emphasis in the original.)
Notably, the judge said the job applicant had support in a 2020 decision by the U.S. District Court for the Eastern District of Pennsylvania in Hudnell v. Thomas Jefferson University Hospitals, Inc., which had allowed a similar claim to continue where a plaintiff had “alleged a disability apart from her medical marijuana use.”
Judge Colville said that even if the PHRA does not require off-duty marijuana use as an accommodation, the allegations were that the company “summarily rescinded its offer of employment” without exploring various other potential accommodations. Therefore, the company potentially failed to engage in the required interactive process under the PHRA.
“The Court believes that the issue of good faith is a factual question that cannot be resolved at this time,” Judge Colville said.
Next Steps
Judge Colville’s reversal highlights the legal uncertainty around whether employees’ lawful, off-duty medical marijuana use is protected under the PHRA. Several courts have allowed disability discrimination claims for medical marijuana under the PHRA to continue. However, the recent ruling suggests that such claims may only be able to proceed if the medical marijuana use is simply indicative of a separate qualified disability that employers have an obligation to reasonably accommodate. Judge Colville maintained that medical marijuana use itself is not a reasonable accommodation and denied an immediate appeal on that issue.
As such, employers may want to review their drug testing and accommodations policies regarding medical marijuana cardholders in Pennsylvania. Additionally, employers may want to consider engaging in an interactive process with employees who are medical marijuana cardholders, at least to gauge the extent to which there may be another reasonable accommodation for an employee or job applicant with a qualifying disability aside from medical marijuana use.
Navigating Tariff Risk in Construction and Development Deals
Tariff Policy Shifts Introduce New Real Estate Risks
Over the past few months, there have been significant changes to tariffs by the United States and other countries around the world. These changes continue to evolve and there is significant uncertainty about the timing, rate, and overall impact of tariffs. The magnitude of uncertainty and cost associated with tariffs has resulted in new and increased risks to existing and prospective real estate projects. We see this broken down into the following questions from clients:
How are these new costs covered under our existing agreements?
How do we address the risks of these potential new costs in the agreements that we are currently negotiating?
Where to Look: Construction and Partnership Agreements
In real estate, answers to these questions are most likely to be found in the construction contract between the owner and the general contractor and the partnership agreement(s) (i.e., operating or joint venture agreement) among sponsors and investors in the project.
Reviewing Key Construction Contract Provisions
As an initial step to clarifying these questions, we recommend reviewing the provisions in your construction contracts which govern the allocation of risk and costs with respect to compliance with changes in the law, force majeure (also known as, third-party delays), and tax and tariff responsibility (Sections 3.7, 8.8 and 3.6 in the form AIA 201-2017, respectively). While the standard AIA form is silent, some parties may have negotiated these terms to clarify whether the contractor or the owner is responsible for the costs associated with newly enacted tariffs. We are already seeing general contractors proposing new provisions that expressly place the risks associated with increased costs from tariffs on the owner. In these circumstances, at a minimum, those increased costs should be passed through without any additional fees or general conditions costs and, generally speaking, there is no reason for these increased costs to result in schedule delays (unlike traditional force majeure events).
Impact on Ownership Structure and Cost Sharing
When the owner is responsible for increased costs from tariffs, the next question to ask is how those costs are allocated among the ownership parties; and whether the developer or sponsor of a project is obligated to incur all or a disproportionate share of such costs. In many circumstances, the operating agreement governing the relationship among the partners should determine how cost overruns are to be shared and whether there is any overriding force majeure clause that applies to the situation. The traditional concept of force majeure, as interpreted by the courts, is limited to “acts of God” and the like, and is unlikely to cover changes to tariffs. However, force majeure clauses are often heavily-negotiated in development joint ventures and may include concepts such as “changes in law” that, when read closely, encompass the costs associated with the changes in tariff policy. Additional questions to ask are:
In what proportion are those costs allocated among the partners;
What discretion does the developer have to apply contingency or other cost savings to cover these costs; and
What approvals are needed to adjust the development budget to reflect these costs (including through change orders to the construction contract).
Mitigating Risks Through Careful Legal Review
As clients brace for the impact from these ongoing policy changes, we encourage you to consult with legal counsel to familiarize yourself with your rights, obligations and risks with respect to newly-imposed tariffs. In these unprecedented times, attorneys can provide tailored advice to address your specific circumstances to mitigate exposure to increased project costs and schedule impacts. This can only be done through careful analysis and negotiation of your transactional documents.
Megan Goldman Watts contributed to this article
Case Alert: Repetitious Claims in Adjudication
Executive Summary
The South Australian Court of Appeal (Court of Appeal) in Goyder Wind Farm 1 Pty Ltd v GE Renewable Energy Australia Pty Ltd & Ors has delivered a landmark judgment.
The decision provides much needed clarity as to when, and in what circumstances, a contractor may (and may not) repeat claims made under the statutory security of payment (SoP) regime.
While this is a decision of the Court of Appeal and its direct impact will be limited to projects in South Australia (SA), the decision is likely to be applicable under the equivalent SoP regimes which exist in all other Australian states and territories (except the Northern Territory). The other interstate SoP regimes are drafted in similar, and often exactly the same, terms, albeit the various regimes also differ in other respects.
The Court of Appeal considered the following issues:
Whether the principle of Anshun estoppel, whether described in that way or in terms of an abuse of process, applies to subsequent payment claims and adjudication applications under the SoP regime; and
If so, whether that principle, howsoever described, applied to prevent the contractor from making and prosecuting the second payment claim for delay costs in respect of extension of time claims made by the Contractor.
The Court of Appeal held:
There is no scope under the Building and Construction Industry Security of Payment Act 2009 (SA) (SoP Act) for the common law doctrine of issue estoppel or, consequently, the extended doctrine of Anshun estoppel to operate against a payment claim or an application for an adjudication determination under that Act. This is a finding of some significance, given there was some uncertainty about this issue following earlier authorities.
There, however, remains scope for the operation of a doctrine of preclusion under the SA SoP Act, in regard to conduct which may be characterised as an abuse of the processes of that Act. This is again a significant finding and provides useful clarification as to the limits which may be placed on the alleged repetition of claims.
In this case, it was not an abuse of the processes of the SA SoP Act for the Contractor to have included different categories of delay costs in subsequent payment claims. That is, there was no repetition of claims as a matter of fact, despite that the claims arose out of the same delay events. This is also despite the earlier articulation of the delay costs claim in a Notice of Arbitration.
Background
The case relates to a significant wind farm project in country SA. The joint venture Contractor claimed it was entitled to various extensions of time and delay costs attributable to Principal caused access delays. These access delays were alleged to have been caused by delays in obtaining environmental approvals.
The Contractor issued two separate payment claims (in February 2024 and April 2024) in respect of different reference dates. It subsequently made two separate applications for adjudication of those payment claims, both of which resulted in adjudication determinations. The Principal sought to quash the second adjudication determination by way of judicial review, on the basis that the second adjudication application was a reagitation of the first. Both the primary judge and the Court of Appeal found that there was no overlap between the first and second payment claims.
The judge at first instance dismissed the Principal’s application for judicial review. Whilst the judge accepted that the two claims arose from a common cause of delay, it did not follow that delay costs arising from the same delay constituted a singular claim for delay. The Principal appealed the judge’s decision.
Court’s Findings and Commentaries
The Court of Appeal dismissed the appeal. The Court of Appeal, having regard to the provisions of s32 of the SoP Act, did not consider the common law concept of issue estoppel to be applicable. It then followed that an extended doctrine of Anshun estoppel was similarly inapplicable. The Court of Appeal held that this was not to say that there is no scope for the operation of a doctrine of preclusion under the SoP Act; however, this would likely be made pursuant to an application for an abuse of process.
The Court of Appeal went on to consider whether the Contractor’s submission of two payment claims for delay costs amounted to an abuse of process, however, it could not conceive of a situation where nonoverlapping claims for delay costs amounted to an abuse. That is, there would at least need to be factual repetition of claims for there to be an abuse of process, noting, however, that repetition alone may not be sufficient.
Takeaways
For the construction industry, the key takeaways are:
The SoP Acts themselves set certain limits on the making of claims. In particular, under s13(5), only one payment claim may be made in respect of each reference date. Under s22(4), an adjudicator must value work the same as has been previously determined, unless the value has changed. These provisions provide for some amount of “finality” in the adjudication process. The SoP Act, however, concerns progress payments and expressly does not finally determine the parties’ rights and obligations in respect of payment. The SoP Acts are therefore relevantly different to other sorts of proceedings, in which the doctrines of issue and Anshun estoppel apply. The Court of Appeal rejected the imposition of additional limitations on the making of nonoverlapping claims on the basis of these broader legal doctrines.
A contractor may therefore claim nonoverlapping components of a delay costs claim in separate payment claims (so long as the making of such claims is otherwise within the other limitations set by the SoP Act, such as the requirement for claims to be within the six-month period mandated by s13(4)(b)).
Statutes of Repose: Protecting the Pantheon’s Builders After Nearly 2,000 Years
Even though construction cases often involve colorful facts, legal opinions are often quite boring. When a judge writes a colorful opinion about an otherwise boring case, we tip our hat. This week we tip our hat to Judge Brandon Harrison and colleagues on the Arkansas Court of Appeals for their opinion in Thompson Thrift Construction v. Modus Studio et al., 2025 Ark. App. 193 (2025), a construction defect case arising out of a student housing project in Fayetteville. The issue was whether the Arkansas statute of repose – which cuts off a builder’s liability for defects after a certain number of years have passed following substantial completion – defeated the plaintiff’s claim.
Here is how Judge Harrison’s opinion introduced this otherwise boring issue of statutory interpretation:
The Pantheon in Rome has stood for more than 1,900 years. If it collapsed tomorrow, the claim-accrual and statute-of-limitations principles that apply in Arkansas to ordinary negligence claims would give an injured person three additional years to sue those who were alleged to have negligently designed or constructed it. That’s a long time to stay on the legal hook. So in the 1960s, like legislatures in a number of other states, the Arkansas General Assembly changed the accrual and limitations principles that apply to tort or contract claims for damages “caused by any deficiency in the design, planning, supervision, or observation of construction or the construction and repairing of any improvement to real property” against a person “performing or furnishing the design, planning, supervision, or observation of construction or the construction and repair of the improvement.” Ark. Code Ann. § 16-56-112. With a few express exceptions, for those architectural or construction-type claims “no action … shall be brought” more than five years from the date of substantial completion of the improvement, even if the limitation period for that kind of claim has not run—and even if no claim exists yet because no damage or injury has yet occurred.
As the above-quoted passage indicates, other states passed similar statutes of repose around the same time. Today, 48 states and the District of Columbia have one. The wording of those statutes varies from state to state. For example, in many states the period of repose begins to run upon substantial completion. In others, the period begins with final completion or the acts or omissions at issue. Many states allow an extension if the injury occurs in the final year of the repose period, while others do not. Some states apply different periods depending on the nature of the injury (property damages v. personal injury) or the identity of the plaintiff (private v. government). All are subject to change at any time at whim of the state legislature. None should be confused with statutes of limitation, which have a similar effect but generally begin to run only when the injury or damage occurs (which in the Pantheon example may not occur for some 1,900 years after construction).
The only two states without a statute of repose are New York and Vermont. Potential claimants against the contractors and architects of ancient Rome would do well to start there. Just know that Judge Harrison and his colleagues on the Arkansas Court of Appeals “would take the defense side of that case” (Thompson, 2025 Ark. App. 193 n. 1).
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May v. Must – The Scope of Agency Permitting Review under Statutory Standards
The Law Court recently issued a decision in Eastern Maine Conservation Initiative v. Board of Environmental Protection that contains an enlightening discussion of what an agency must consider—as opposed to what an agency may consider—in issuing a permit. In so doing, it adopted an important limit on how far agencies must go in reviewing a project’s downstream impacts.
The case involved an appeal of a permit issued by the Department of Environmental Protection for an aquaculture facility. The permit, upheld by the Board of Environmental Protection, authorized construction of the aquaculture facility under the state Site Location of Development Law (Site Law) and installation of intake and outfall pipes under the Natural Resources Protection Act (NRPA).
Opponents of the project argued that the agency erroneously failed to conduct an independent assessment under NRPA of the harm that the project would cause to wildlife habitats. NRPA specifies that certain enumerated activities require a permit, including construction and dredging. These proposed activities must then meet various standards, including that the activity will not “unreasonably harm” wildlife habitat. Petitioners did not challenge the agency’s assessment of the impacts of construction and dredging; instead, they argued that the agency should have analyzed the effects of effluent discharge—an activity that is not enumerated in NRPA—on wildlife habitat.
The Law Court rejected this argument based on the plain language of NRPA. The Court concluded that only enumerated “activities” trigger agency review in an application for a permit under NRPA. Because the discharge of treated wastewater is not an enumerated activity, the Court held that the agency did not err by declining to analyze the issue in approving the permit.
Most interestingly, the Law Court went on to distinguish one of the cases relied upon by the petitioners, Hannum v. Board of Environmental Protection. In that case, the Law Court had upheld a denial of a NRPA permit for installation of a pier and floating dock. The agency had concluded that the use of the dock—not just its construction—would disturb tern and seal colonies. The Court affirmed because it concluded that the Board has the power to deny a permit based on its proposed use. In Eastern Maine Conservation Initiative, the Court distinguished the case as follows:
To be clear, in Hannum we did not say that the agency is obligated under NRPA to consider the expected effects on wildlife of the intended use of a structure or facility. Rather, Hannum held that it was within the agency’s discretion to take those impacts into consideration in evaluating compliance with the standard in [NRPA].
In the Court’s view, then, Hannum establishes that (at least in certain circumstances) DEP may consider activities other than those enumerated in NRPA. As an aside, it may be reasonable to question the holding in Hannum—after all, if NRPA specifically identifies the relevant activities whose impacts must be considered, the expressio unius est exclusio alterius canon of statutory interpretation would seem to suggest that the agency may not go any further. Regardless, Eastern Maine Conservation Initiative makes clear that Hannum only goes so far—simply because it may consider certain unenumerated activities, the agency at the very least does not have to consider unenumerated activities that may follow from NRPA-regulated conduct (and which had separately been reviewed under a different statutory scheme). This is an important limitation on the required scope of agency review for environmental permits.
Changes to Long Island Development: Oversight Through Special Use Permits
Go-To Guide:
Special use permits are becoming more common for various developments across Long Island municipalities.
These permits allow certain uses in zoning districts, subject to additional standards or conditions.
The approval process typically involves public hearings and consideration of factors like traffic, environmental impact, and community compatibility.
Municipalities aim to balance development needs with community concerns through special use permits, but the process may be time-consuming for applicants.
Long Island municipalities have been revising their zoning ordinances to address evolving community needs, environmental considerations, and intelligent development, expanding the list of uses that require special use permits. This GT Advisory explains what a special use permit is, what it entails, and analyzes the potential implications of a special use permit on future development.
In the past year, the towns of Babylon, Huntington, and Smithtown have revised, or are considering revising, their respective zoning codes to incorporate or expand special use permit requirements.
Town of Babylon – The town board revised its code to require a special use permit for recreational marijuana dispensaries.
Town of Huntington – In the Melville Town Center overlay, the town board adopted amendments to its zoning code to require a special use permit for mixed-use buildings, breweries, wineries, and similar uses. Huntington is also considering requiring a special use permit for certain warehouse uses in industrially zoned properties.
Town of Smithtown – Officials are considering amending the zoning code to require a special use permit for rail transfer stations and rail freight terminals.
A special use permit (also known as a “special permit,” “special exception,” or “conditional use permit”) is a land use approval for a use that is generally considered to be permitted in the respective zoning district subject to compliance with additional standards or conditions. The special use permit differs from a variance in that “[a] variance is an authority to a property owner to use property in a manner forbidden by the ordinance while a special [use permit] allows the property owner to put his property to a use expressly permitted by the ordinance.” North Shore Steak House, Inc. v. Board of Appeals of the Inc. Village of Thomaston, 30 N.Y.2d 238, 331 N.Y.S.2d 645 (1972). Simply put, a special use permit is an “as of right” use subject to additional conditions that ensure compatibility with the character of the surrounding community.
Throughout Long Island, special use permits are often required for religious or educational uses within a residential zone, drive-through establishments, and active recreational uses. Municipalities favor special use permits because they require a public hearing where the deciding board can ensure that the application conforms to the required standards or conditions. These standards or conditions are set forth in the local zoning ordinance and vary from municipality to municipality, but often center around traffic and parking impacts, conformity with the municipality’s comprehensive plan, environmental effects, and pedestrian safety. This provides the municipality flexibility by allowing the deciding board to consider each application on a case-by-case basis.
Oftentimes, the deciding board may waive the conditions of the special use permit. Where the board deciding the special use permit is the local planning or zoning board, under the New York State Town Law and Village Law, the governing board (typically the town board or village board of trustees) may authorize the board to waive approval conditions. As long as the board has the authority to do so, it may waive conditions if it determines the conditions, as they apply to the specific application, are not in the interest of the public health, safety, or general welfare, or inapplicable to the requested use. To make this determination, boards will often consider the application’s consistency with the local zoning code, the comprehensive plan, compatibility with surrounding uses, precedent, fairness, and – often most importantly – public input.
Regardless of whether the board decides to grant or deny the special use permit application, the decision must be based upon substantial evidence in the written record. North Shore Steak House, 30 N.Y.2d at 245. Generalized community objections, community pressure, and speculation cannot be the sole basis for denial of a special use permit. Instead, the written record must support that the special use permit’s specific negative impacts will exceed similar as-of-right uses. Robert Lee Realty Co. v. Village of Spring Valley, 61 N.Y.2d 892, 474 N.Y.S.2d 475 (1984).
Municipalities throughout Long Island face challenges as they increase reliance on special use permits. The special use permit application process requires significant time and resources – including traffic studies, civil and architectural plans, and environmental review under the State Environmental Quality Review Act. Some applicants may grow impatient and choose to abandon projects that might have economic and community benefits to the locality. As such, the reviewing agency should have the resources to ensure a speedy review so that the applicant can secure a public hearing.
Special use permits likely will remain a central land use regulation in Long Island’s future. The regulation generally provides a tool to allow municipalities to promote sustainable development and ensure compatibility with the comprehensive plan. However, municipalities should work with applicants and residents to navigate the challenges and opportunities discussed in this GT Advisory.
10 Ideas for MSHA Leaders in the Trump Administration to Consider
The Trump administration has made a number of changes to the Mine Safety and Health Administration (MSHA) already, and more are sure to come. So now is as good a time as ever to list some ideas for the new agency leadership to consider.
Quick Hits
The Trump administration has already implemented several changes to MSHA, with more expected, prompting a call for new leadership to consider ideas such as improving inspector consistency and deemphasizing noncritical safety standards.
Enhancing compliance outreach, especially for small or new mines, and advocating for rule changes are key priorities for mine operators.
To promote safety and health, MSHA should increase transparency in inspector training, issue more policy guidance, emphasize compliance assistance, manage inspector professionalism, continue issuing safety alerts, and hold all stakeholder meetings with online participation options.
Improving consistency regarding inspector interpretation of MSHA standards is at the top of many operator lists. Deemphasizing spending inspection time on standards that do not appreciably affect safety is high on the list of priorities, as well.
Yet another priority is enhancing compliance outreach for all operators—especially small or new mines. Operators may also want to advocate for certain rules to be changed.
Ten Ideas for MSHA to Explore
Mine operators will likely have many more good ideas to add to this list. Once a new assistant secretary at MSHA is in place, the mining industry should be ready to offer these suggestions—and more. Here are ten suggestions to get things rolling:
1. Establish a means via MSHA’s website for operators to submit to agency headquarters specific examples of misinterpretations of standards and other issues that occur in the field.
This will provide an opportunity for headquarters to weigh in. It will also allow headquarters to be informed directly by operators about what’s happening in the districts.
A specific occurrence may end up being resolved at the local level, but it is important for headquarters to know and track trends. This would present opportunities to enhance inspector training or issuance of guidance to operators.
2. Improve transparency and fair notice to operators by providing more information on how new and existing inspectors are being trained on the Mine Act and MSHA’s standards. This will help compliance, as well as increase the overall understanding regarding how inspectors are to apply the law.
3. MSHA should generally issue more policy guidance for new and existing standards.
4. End the growing practice of issuing citations for workplace examinations based on other violations being found in an area. MSHA’s “Program Policy Manual” states that the agency will not do this, yet it has become a common practice.
5. Increase the agency’s emphasis on compliance assistance to mine operators. This directly contributes to the agency’s mission of promoting safety and health by not only providing operators with information to help reduce exposure to hazards, but by enhancing the agency’s goodwill with operators and miners.
Such goodwill can help operators be fully receptive to the compliance assistance and lessons learned when enforcement is necessary. It can also facilitate further positive interactions with the agency that can help to improve safety.
6. As for specific standards to de-emphasize, we are not suggesting reinstating MSHA’s “Rules to Live By.” That list was largely used to justify heightened enforcement.
What we mean here is there are certain standards that are cited more than they should be given how minor the conditions typically are. Inspection time, which will be more critical given the shortage of inspectors, could be better spent if inspectors are not devoting energy to looking for things like whether switches are labeled in electrical boxes or portable extension cords have had a continuity check done.
7. MSHA needs to manage its inspector workforce to promote professionalism and good use of official time on duty. Inspectors who spend time berating the mine operator and its managers and using aggressive tactics to intimidate foremen and miners are hurting the agency’s effectiveness.
8. MSHA should continue to issue fatalgrams and other best practices alerts. The agency should provide updates on its fatal accident reports to note when citations issued in the investigation were modified or vacated.
9. MSHA’s ability to change its current final rules is constrained by the Mine Act, but there are certainly opportunities to do so without diminishing safety. Among the obvious rule changes needed are the prohibitions in MSHA’s crystalline silica rule on the use of respirators and rotation of miners for compliance.
10. On a positive note, MSHA should continue its stakeholder meetings at the district level and at the headquarters level. District-level meetings should always offer an online participation option, but not all do.
Stakeholder meetings are a great opportunity for the agency to provide updates and safety information, as well as answer questions from the audience.
Lay of the Land: Challenges to Data Center Construction—Past, Present and Future [Podcast]
In this episode of Lay of the Land, we are joined by Paul Manzer, principal and data center market leader with Navix Engineering, to explore the evolving landscape of data center construction. We dive into the unique civil engineering challenges—from site selection to due diligence—and trace the evolution of these challenges from past limitations to present-day complexities like supply chain issues and legal hurdles.
Looking ahead, we discuss future trends driven by AI and emerging technologies, examining how legal strategies and engineering innovation can address these challenges. We provide key takeaways for developers and investors, emphasizing the critical collaboration between legal and engineering teams.