Category: Construction Law

Key Considerations for the Construction Industry in 2025 Under President-Elect Trump

As President-elect Trump prepares to take office on January 20, the construction industry must anticipate shifts in trade policy, particularly concerning tariffs. These changes are expected to have significant implications for various sectors, including energy and clean technology.
The industry’s growing reliance on energy-efficient and clean technology components is driven by sustainability goals and regulatory requirements. For example, the US Department of Energy (DOE) guidelines on “Zero Emissions Building” provide a framework for sustainable practices, offering benchmarks for energy efficiency, zero on-site emissions, and clean energy use. Similarly, New York City’s Local Law 97 (LL97) sets ambitious emissions reduction targets for buildings, focusing on energy efficiency and renewable energy.
However, potential tariffs on imported clean technology materials could lead to increased costs, hindering compliance with regulations that rely on the imports of energy-efficient materials, and posing challenges to the adoption of sustainable building practices.
As these developments unfold, the construction sector must remain vigilant in monitoring policy changes that could affect the availability and cost of clean technology components in 2025.
Key Points to Watch in 2025
1. Evolving Tariff Policies:

The topic of tariffs under Trump’s second Administration has been a source of concern as President-elect Trump has already threatened to impose universal tariffs in addition to other country-specific tariffs.
At this juncture, we can anticipate an increase in tariff measures, but the specific measures are still unknown in part due to the uncertainty surrounding the rate of potential new tariffs, the countries they may affect, and the mechanisms that will be used to impose them, which will impact the timing any tariffs will take effect.
Because the Trump Administration’s trade policies have particularly focused on imports from Mexico, Canada, and China, such targets could significantly impact the import of construction materials, such as steel, aluminum, softwood lumber, concrete, glass, and binding materials.
For example, tariffs could benefit domestic manufacturers by increasing demand for locally produced materials, such as mass timber, but could create vulnerabilities for the construction sector that relies on imports raw materials used for energy efficiency and sustainable buildings that are sourced from Canada, Mexico, or China.

2. Material Cost Fluctuations:

Be prepared for possible increases in material costs due to tariff adjustments. This could lead to higher project expenses and necessitate budget recalibrations.
Contractors may face challenges in predicting material costs and securing project financing due to economic uncertainty and potential price volatility.

3. Supply Chain Adjustments:

Anticipate disruptions in supply chains as suppliers adapt to new trade regulations. This may result in delays and increased lead times for material availability.
Evaluate current supply chain dependencies and explore alternative sourcing options to mitigate risks.

How Can We Help?
As the new administration takes office, the construction industry must remain vigilant and proactive in addressing potential challenges posed by evolving tariff measures. Companies may need to adjust their project plans to account for potential cost increases and supply chain disruptions. Strategies such as seeking alternative suppliers, exploring domestic options, and reevaluating project budgets and timelines will be crucial in navigating these challenges.
Strategic planning and collaboration with trade experts and legal advisors will be crucial in navigating these changes. Here are some strategic ideas to consider:

Diversify Suppliers: Consider expanding your supplier base to reduce reliance on any single source, particularly those affected by tariffs.
Explore Alternative Materials: Investigate the use of alternative materials that may offer cost advantages or are less impacted by tariffs.
Contractual Safeguards: Review and update contracts to address “escalation,” “force majeure,” or other potential political risks, trade restrictions, and cost fluctuations.
Engage in Advocacy: Participate in industry advocacy efforts to influence policy decisions and promote favorable outcomes for the construction sector.
Monitor Trade Policy Developments: Monitor announcements from the new administration regarding free trade agreements (FTAs) and tariff adjustments that could affect material costs. These could include benefits from the United States-Mexico-Canada Agreement (USMCA) and exclusions from tariffs, such as the Section 301 tariffs on products from China.

Industry members seeking detailed analysis and guidance are encouraged to consult with trade experts and legal advisors specializing in construction and trade policy.

Beachfront Boundaries: Regulatory Takings Clarified

Jones v. Town of Harwich involved a dispute over the application of the Wetland Protection Bylaw and Regulations in Harwich, Massachusetts (“Wetland Protection Regulations”). In 1958, Lois H. Jones (“Jones”) purchased two distinct lots separated by a private driveway. The lots were known as 5 and 6 Sea Street Extension (“5 Sea Street” and “6 Sea Street”). 5 Sea Street was, and remains, a vacant lot that abuts the ocean. 6 Sea Street is improved with a four-bedroom house. In 1999, Jones sold 6 Sea Street. The record in the case indicated that Jones long intended to construct a single-family dwelling on 5 Sea Street. 
In 2011, Jones filed a Notice of Intent with the Harwich Conservation Commission, proposing construction of a single-family residence on 5 Sea Street. In 2012, the Commission issued a denial Order of Conditions. Later that year, the Massachusetts Department of Environmental Protection issued a Superseding Order of Conditions, denying the project under the Massachusetts Wetlands Protection Act. In 2013, the Town of Harwich changed the tax assessment designation associated with 5 Sea Street to “unbuildable” and reduced the assessed valuation from $1,434,500 to $24,000. In 2015,1 the DEP, Jones, and some abutters, reached a settlement, which included a Final Order of Conditions. Nonetheless, the Harwich Conservation Commission maintained its position that Jones’s proposed construction would violate the Wetlands Protection Regulations, as well as the state wetlands regulations, and denied approval.
Jones filed suit against the Town of Harwich in the U.S. District Court for the District of Massachusetts, alleging that the application of the Wetland Protection Regulations to 5 Sea Street constituted a regulatory taking, entitling her to compensation. The Town argued that Jones could only recover if the Wetland Protection Regulations were the “but for” cause of 5 Sea Street being unbuildable. The Town argued that since state wetlands regulations also precluded developing 5 Sea Street, the local Regulations could not be the but for cause of Jones’s harm, and therefore, she could not recover from the Town. The District Court rejected this argument on summary judgment because the record contained evidence that the DEP’s 2015 decision could be amended, and the project might be allowed under state wetland regulations. 
Next, the Court applied the cornerstone Penn Central test to determine whether or not the Town’s application of the Wetlands Regulation could constitute a regulatory taking. Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 124 (1978). The factors applied by the Court include: economic impact of the Regulations on the Plaintiffs; the extent to which the Regulations have interfered with distinct investment-backed expectations; and the character of the governmental action.
The District Court found that the significant decrease in the property’s value supported a substantial economic impact as a result of the Town’s Regulations. Additionally, the extent to which the Regulations interfered with investment-backed expectations was not appropriate for summary judgment because the parties presented competing arguments and evidence as to Jones’ intention to develop the property, and the alleged “windfall” that her estate would receive from development. Id., at 6. Finally, the District Court held that the character of the governmental action could be equivalent to a typical taking because the Regulations prevent any structure on the lot despite being generally applicable to all property. 
Jones is a helpful reminder that application of local regulations may constitute a regulatory taking.

1 Jones passed away in 2014, but her estate continued her efforts to develop 5 Sea Street. 

New Antidumping and Countervailing Duty Petitions on Temporary Steel Fencing from China

On January 14, 2025, ZND US Inc (Petitioner or ZND), domestic producer of temporary steel fencing, filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking the imposition of antidumping duties (AD) and countervailing duties (CVD) on temporary steel fencing from China. Such structures include fencing for construction sites, security perimeters, events, and animal kennels. The scope does not include permanent steel fencing.
Under U.S. law, a domestic industry may petition the United States government to initiate an AD investigation into the pricing of an imported product to determine whether it is sold in the United States at less than fair normal value prices. For market economies (which China is not), normal value is home market or third-country price, or actual cost plus reasonable profit of the foreign producer/exporter. For deemed non-market economy China, normal value is a constructed cost plus deemed reasonable profit based on surrogate values in a market economy deemed of comparable level of economic development to China.
A domestic industry also may petition for the initiation of an investigation of alleged countervailable subsidies provided by a foreign government to producers and exporters of the subject merchandise. DOC will impose AD and/or CVD duties on subject merchandise if it determines that imports of that product are dumped and/or subsidized, and if the ITC also determines that the domestic industry is materially injured or threatened with such injury by reason of imports of the subject merchandise.
The immediate activity will occur at the ITC. In the preliminary stage, the threshold to find injury from the accused imports is low such that the ITC generally finds sufficient indicia of injury to a U.S. industry from the accused imports to continue the AD/CVD investigations. If the ITC votes to continue, then the investigation moves to DOC.
If the ITC and DOC make preliminary affirmative determinations, U.S. importers will be required to post cash deposits in the amount of the AD and/or CVD duties for all entries of the subject merchandise entered on or after the date of DOC’s preliminary determinations being published in the Federal Register. Note that if there is a surge of imports from the subject countries following the filing of the petitions, DOC can find critical circumstances for a particular subject country (or producer) and instruct U.S. Customs & Border Protection (CBP) to collect cash deposits retroactively to 90 days before the date of publication of the preliminary determination. 
Following further factual investigation, verification, and briefing, DOC can change the preliminary AD/CVD rates in its final determinations. AD/CVD Orders will only issue if both the DOC and ITC make affirmative final determinations. The ITC final injury investigation is more rigorous than its preliminary injury investigation, where historically 30% or so of petitions are rejected at that stage.
Scope
Petitioner requests the following product scope for the investigation:
“The merchandise subject to this investigation is temporary steel fencing. Temporary steel fencing consists of temporary steel fence panels and temporary steel fence stands. Temporary steel fence panels, when assembled with temporary steel fence stands or other types of stands outside of the scope, with each other, or with posts, create a free-standing structure. Such structures may include, but are not limited to, fencing for construction sites, security perimeters, and events, as well as animal kennels. Temporary steel fence panels are covered by the scope regardless of whether they attach to a stand or the type of stand to which they connect.
Temporary steel fence panels have a welded frame of steel tubing and an interior consisting of chain link, steel wire mesh, or other steel materials that are not more than ten millimeters in actual diameter or width. The steel tubing may surround all edges of the temporary steel fence panel or only be attached along two parallel sides of the panel. All temporary steel fence panels with at least two framed sides are covered by the scope, regardless of the number of edges framed with steel tubing.
Temporary steel fence panels are typically between 10 and 12 feet long and six to eight feet high, though all temporary steel fence panels are covered by the scope regardless of dimension. Temporary steel fence panels may be square, rectangular, or have rounded edges, and may or may not have gates, doors, wheels, or barbed wire or other features, though all temporary steel fence panels are covered by the scope regardless of shape and other features. Temporary steel fence panels may have one or more horizontal, vertical, or diagonal reinforcement tubes made of steel welded to the inside frame, though all temporary steel fence panels are covered by the scope regardless of the existence, number, or type of reinforcement tubes attached to the panel. Temporary steel fence panels may have extensions, pins, tubes, or holes at the bottom of the panel, but all temporary steel fence panels are covered regardless of the existence of such features.
Steel fence stands are shapes made of steel that stand flat on the ground and have one or two open tubes or solid pins into which temporary steel fence panels are inserted to stand erect. The steel fence stand may be made of welded steel tubing or may be a flat steel plate with one or two tubes or pins welded onto the plate for connecting the panels.
Temporary steel fencing is covered by the scope regardless of coating, painting, or other finish. Both temporary steel fence panels and temporary steel fence stands are covered by the scope, whether imported assembled or unassembled, and whether imported together or separately.
Subject merchandise includes material matching the above description that has been finished, assembled, or packaged in a third country, including by coating, painting, assembling, attaching to, or packaging with another product, or any other finishing, assembly, or packaging operation that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the temporary steel fencing.
Temporary steel fencing is included in the scope of this investigation whether or not imported attached to, or in conjunction with, other parts and accessories such as hooks, rings, brackets, couplers, clips, connectors, handles, brackets, or latches. If temporary steel fencing is imported attached to, or in conjunction with, such non-subject merchandise, only the temporary steel fencing is included in the scope.
Merchandise covered by this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under the subheading 7308.90.9590. The HTSUS subheading set forth above is provided for convenience and U.S. Customs purposes only. The written description of the scope is dispositive.”
Foreign Producers and Exporters of Subject Merchandise
A list of foreign producers and exporters of temporary steel fencing, as identified in the petition, is provided in Attachment 1.
U.S. Importers of Subject Merchandise
A list of U.S. importers of temporary steel fencing, as identified in the petition, is provided in Attachment 2.
Alleged Margins of Dumping/Subsidization
Petitioners allege the following dumping import duty margins:
China: 405.19%
These are only estimates based on data most favorable to Petitioner. DOC generally assigns duties at the highest alleged dumping rate to foreign producers and exporters who fail to cooperate during the investigation as to answering DOC questionnaires to obtain an AD/CVD margin based on their actual situation.
Petitioner does not provide specific subsidy rates in the petition.
Potential Trade Impact
According to official U.S. import statistics, imports of the subject merchandise totaled 38,423 short tons in 2024, representing approximately 85% of all imports of temporary steel fencing into the United States.
Estimated Schedule of Investigations

1/14/2025
Petition filed

2/28/2025
ITC preliminary injury determination

4/9/2025
DOC preliminary CVD determination, if not postponed

6/13/2025
DOC preliminary CVD determination, if fully postponed

6/23/2025
DOC preliminary AD determination, if not postponed

7/12/2025
DOC preliminary AD determination, if fully postponed

12/26/2025
DOC final AD and CVD determinations, if both preliminary and final determinations fully postponed

2/9/2026
ITC final injury determination, if DOC’s determinations fully postponed

2/16/2026
AD/CVD orders published

Practical Considerations for Navigating Tariff Risk on Construction Projects

As the second Trump administration begins next week, developers, contractors, subcontractors and suppliers are evaluating the extent of the construction industry’s international ties – and contractual exposure to potential tariff increases. While President-elect Trump has been forthright about his intent to impose and increase tariffs, he has not provided details about which products, goods, and countries may be affected.
This uncertainty leaves many in the construction industry concerned, and both upstream and downstream parties are carefully negotiating contractual risk of changes in tariffs. Broadly speaking, tariffs are typically considered import (or export) taxes imposed on goods and services imported from another country (or exported). In the United States, Congress has the power to set tariffs, but importantly, the president can also impose tariffs under specific laws (most notably in recent years, the Trade Act of 1974), citing unfair trade practices or national security. 
Many different contractual provisions may be impacted by the introduction of new tariffs: tax provisions, force majeure provisions, change in law provisions, and price escalation provisions, for example. Procurement contracts routinely rely on Incoterms, which allocate tariff risk to either buyer or seller depending on the selected Incoterm. Negotiating an appropriate allocation of risk of changing tariffs can be as much an art as science and requires consideration of how tariffs are administered and their effects on the market. Consider, for example, the following:

Tariffs are paid by the importer of record to U.S. Customs & Border Protection. If a contractual party is not the importer of record, such party will not be directly liable for payment of tariffs.
Instead, tariffs raise the ultimate cost of goods or services because importers increase their price to buyers to account for the tariffs.
Tariffs also tend to indirectly increase the cost of goods or services related or equivalent to the goods or services subject to tariffs by raising demand for domestic or non-affected substitute goods or services.
Some goods and services are higher risk than others (e.g., goods originating from China, and potentially in a second Trump administration, goods originating from Canada and Mexico). Understanding the extent of the international reach of a construction project’s supply chain may assist in evaluating exposure and negotiating appropriate relief from imposition of new or increased tariffs.

Having a working knowledge of how tariffs are implemented and their impacts on related markets is important to assessing and mitigating contractual risk. Parties to a construction contract may have different methods for managing tariff impacts. A supplier may choose to source goods from less risky countries, even if the cost of such goods is incrementally higher than their Chinese equivalent in the short term. A buyer may choose to enter into a master supply agreement, allowing the buyer to set a long-term fixed price on a guaranteed volume of goods that in turn permits the seller to better forecast its demand and supply chain. Many developers and contractors may negotiate shared risk of changed tariffs, establishing a change order threshold or cost-sharing ratio. Ultimately, those who consider and carefully negotiate provisions addressing changes in tariffs will be better prepared to face and manage their economic impact.
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Federal Circuit Clarifies Claim Construction at the Pleading Stage

Many lower courts have interpreted the Federal Circuit’s Nalco decision to hold that claim construction is inappropriate at the motion to dismiss stage. But the Federal Circuit’s recent UTTO decision clarified that claim construction is not categorically forbidden at the motion to dismiss stage.
The Court noted whether claim construction is appropriate at the motion to dismiss stage is case-specific, as sometimes “a claim’s meaning may be so clear . . . that no additional process is needed.” For patent litigants, the UTTO decision provides express support for patent litigants to make claim construction arguments at the motion to dismiss stage.
Prior Understandings From Nalco
Nalco Co. (“Nalco”) was the exclusive licensee of U.S. Patent No. U.S. 6,808,692 (the “’692 Patent), which was directed to “Enhanced mercury control in coal-fired power plants.” Independent claim 1 of the ’692 Patent recites “[a] method of treating coal combustion flue gas containing mercury, comprising . . . injecting a member selected from the group consisting of molecular halogen and a thermolabile molecular halogen precursor into said flue gas.” Chem-Mod, LLC (“Chem-Mod”) is an environmental services company that specializes in pollutant control technologies and licenses its “Chem-Mod Solution.” The Chem-Mod Solution comprises mixing a thermolabile molecular halogen precursor with coal before the coal is fed into a coal combustion process.
Nalco brought an action for patent infringement against Chem-Mod, arguing that the Chem-Mod Solution practices all steps of at least claim 1 of the ’692 Patent. At the district court, Chem-Mod argued that the Chem-Mod Solution did not infringe because mixing thermolabile molecular halogen precursors prior to combustion does not constitute “injecting” such precursors into flue gas post-combustion. The district court ultimately agreed, dismissing Nalco’s complaint and subsequent amended complaints, which Nalco ultimately appealed to the Federal Circuit.
The Federal Circuit reversed and remanded the district court’s dismissal and, in doing so, discussed the inappropriateness of claim construction at the pleading stage in this case. Focusing on the Twombly/Iqbal pleading standards, the Court held that Nalco had plausibly alleged that “injection” of the halogen precursor occurred when treated coal was fed into a furnace for combustion. In discussing this theory of infringement, the Court went on to explain:
Defendants’ objections to this theory of infringement read like classic Markman arguments. Defendants first take issue with Nalco’s allegation that “coal combustion flue gas” is “the gas that is created during the combustion of coal. But Defendants’ arguments boil down to objections to Nalco’s proposed claim construction for “flue gas,” a dispute not suitable for resolution on a motion to dismiss.

Many lower courts have read this passage and others in Nalco to hold that claim construction is categorically forbidden at the motion to dismiss stage.
UTTO’s Clarification of Nalco
UTTO Inc. (“UTTO”) owned U.S. Patent No. U.S. 9,086,441 (the “’441 Patent), which was directed to “Detection of buried assets using current location and known buffer zones.” Independent claim 1 of the ’441 Patent recites “[a] method . . . comprising . . . generating, based on the group of buried asset data points, a two dimensional area comprising the buffer zone . . ..” The core of the process involves using both (1) a GPS to pinpoint a person’s location and (2) previously stored buried assert data to locate and generate a buffer zone around a buried asset.
Metrotech Corp. (“Metrotech”), a competitor of UTTO, sold a device that had a “walk back” feature that performed substantially similar to the claimed method. However, the walk back feature “requires only a single point” to generate a buffer zone, as opposed to a group of buried asset data points.
UTTO brought an action for patent infringement and moved for a preliminary injunction against Metrotech, arguing that the walk back feature infringes on the ’441 Patent. In denying Metrotech’s motion for preliminary injunction, the district court construed the claims in favor of Metrotech.
Specifically with respect to claim 1, the Court noted that “[t]he claim does not mention ‘one or more’ data points, or ‘a’ data point. It describes a ‘group’ of ‘data points,’ plural. The ordinary and customary meaning indicates that more than one data point is necessary to create the buffer zone.” Based on the Court’s construction, Metrotech moved to dismiss UTTO’s complaint, and the dismissal of UTTO’s third amended complaint was ultimately appealed to the Federal Circuit.
The Federal Circuit sided with UTTO and vacated the dismissal of UTTO’s third amended complaint, finding the district court’s claim construction to be incomplete in this case. However, the Court squarely addressed arguments made in UTTO’s briefing that misconstrued Nalco. Specifically directed to the passages of Nalco provided in the previous Section, the Court noted that:
Those passages, we conclude, should not be read as stating a categorical rule against a district court’s adoption of a claim construction in adjudicating a motion to dismiss. The passages do not in terms state such a rule. They are readily understood to be drawing a conclusion about the need for further proceedings to resolve the particular claim-construction issues in that case before a sound determination of the appropriateness of dismissal could be reached. Nalco should be read in that case-specific way.

The Court went on to say that some case-specific circumstances make it improper to resolve a claim construction dispute at the pleading stage, but “sometimes a claim’s meaning may be so clear . . . that no additional process is needed.”
While claim construction is now expressly not forbidden at the pleading stage under UTTO, Nalco is still good law and should be read in a case-specific way. Like the Federal Circuit did in both Nalco and UTTO, cases will still be remanded where “[t]here has been insufficient exploration in the record, both [at the Federal Circuit] and in the district court, of too many questions of apparent relevance to identifying a proper construction of [a] limitation.”

Bid Protests in New Jersey

Bradley has been publishing an ongoing survey of state-level bid protest processes and procedures (see our posts on “Bid Protests in Georgia,” “Bid Protests in the District of Columbia,” “Bid Protests in New York,” “Bid Protests in Virginia,” “Bid Protests in Massachusetts,” and our “Update on Bid Protests in Alabama”). For the next state in this series, we focus on the bid protest procedures in New Jersey.
What Rules Apply?

The Division of Purchase and Property (DPP) of the New Jersey Department of the Treasury provides centralized procurement and related services to agencies of the executive branch of state government. 
Procurements by local boards of education under the Public School Contracts Law, N.J.S.A 18A:18A-1 et seq., procurements by the New Jersey Turnpike Authority (Ch. 9 of Title 19 of the New Jersey Administrative Code), and procurements by public municipalities, counties, and local government/authorities are outside of the authority of the DPP. 
N.J. Admin. Code § 17:12-3 governs bid protest procedures for procurements that fall under the authority of the DPP.

Who May Protest?

For pre-award protests, a vendor that intends to submit a proposal in response to an advertised request for proposals and that objects to a term or specification therein may submit a written protest to the Director of Purchasing. N.J.A.C. 17:12-3.2(a). 
For post-award protests, a bidder who has submitted a proposal in response to a request for proposals may submit a written protest to the Director of Purchasing concerning (1) the rejection of its proposal, when such objection is based upon the bidder’s failure to comply with N.J.A.C. 12.12-2.2, (2) the notice of award of a contract, or (3) cancellation of an RFP after the opening of proposals. N.J.A.C. 17:12-3.3.

When Must a Protest Be Filed?

Pre-award protests shall be submitted to the Director of Purchasing only after the DPP has formally responded to questions posed during the request for proposals question and answer period. N.J.A.C. 17:12-3.2(b). The Director of purchasing may disregard any pre-award protest filed fewer than seven business days prior to the scheduled deadline for proposal submission. N.J.A.C. 17:12-3.2(b)(3). 
Post-award protests must be filed within 10 business days following the bidder’s receipt of written notification that its proposal is non-responsive or of notice of award, as applicable, or prior to the deadline specified in the DPP’s notice of intent to award communication to the bidder, whichever date is earlier. N.J.A.C. 17:12-3.3(b).

What Must the Protest Include?

Pre-award protests must contain the following: (1) identification of the solicitation number; (2) the terms/specifications at issue and the specific grounds for challenging the cited terms/specifications, including all argument materials, or other documentation that may support the protester’s position; and (3) a statement as to whether the protester requests an opportunity for an in-person presentation and the reason(s) for the request. N.J.A.C. 17:12-3.2(b)1. 
Post-award protests must contain the following: (1) identification of the solicitation number; (2) the specific grounds for challenging the proposal rejection, the notice of intent to award, or the cancelation, including all arguments, materials, and/or other documentation that may support the protester’s position; and (3) a statement as to whether the protester requests an opportunity for an in-person presentation and the reason(s) for the request. N.J.A.C. 17:12-3.3(b)1. 

What Are the Discovery Procedures?

The Director is entitled to request, receive, and review copies of all records and documents relevant to the issues and arguments set forth in the protest. 
Upon receipt of the Director’s request, the bidder shall promptly provide the requested records and documents free of charge in the time, place, and manner specified by the Director. 
If the protesting bidder fails to comply with the request, such failure may constitute a reasonable basis for the Director to resolve the protest against the protester.
The Director may also consider relevant information requested and received from other parties. N.J.A.C. 17:12-3.4. 

Will a Hearing Be Held?

For both pre- and post-award protests, the Director, or the Director’s designee from within or outside the Division may perform a review of the written record or conduct an in-person presentation. In the case of a review or an in-person presentation being handled by a hearing officer designee from outside the DPP, the determination of such designee shall be in the form of a report to the Director, which shall be advisory in nature and not binding on the Director.
All parties shall receive a copy of the hearing officer’s report and shall have 10 business days to provide written comments or exceptions to the Director. After the 10-business-day period for comments/exceptions, the Director shall make a final written decision on the matter.
In the case of a review or in-person presentation being handled by a designee from within the Division, the determination shall be issued by the Director, or the Director’s designee, and such determination shall be a final agency decision. See N.J.A.C. 17:12-3.2(f); N.J.A.C. 17:12-3.3(f). 

What Are the Appeal Procedures?

Final agency decisions on both pre- and post-award protests are appealable to the Superior Court Appellate Division. N.J.A.C. 17:12-3.1(b).

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Wisconsin Appellate Court Interprets Construction Defect Exclusion and Fungi Exclusion

Cincinnati Insurance Company v. James Ropicky, et al., No. 2023AP588, 2024 WL 5220615 (Wis. Ct. App. Dec. 26, 2024)
On December 26, 2024, the Court of Appeals of Wisconsin issued is decision in Cincinnati Insurance Company v. James Ropicky, et al., No. 2023AP588, 2024 WL 5220615 (Wis. Ct. App. Dec. 26, 2024), addressing whether an ensuing cause of loss exception to a Construction Defect Exclusion, Fungi Exclusion, and Fungi Additional Coverage endorsement contained in a homeowner’s insurance policy issued by Cincinnati to its insureds precluded coverage for damage sustained by the insureds’ home following a May 2018 rainstorm. A final publication decision is currently pending for this case.
Background Information
James Ropicky and Rebecca Leichtfuss (collectively “the insureds”) submitted a claim to their homeowner’s insurer, Cincinnati Insurance Company (“Cincinnati”), for alleged water and fungal damage that their home sustained as a result of a rainstorm that occurred on May 11, 2018. Based on Cincinnati’s investigation and the opinions rendered by its expert following his inspections of the insureds’ home, Cincinnati provided limited coverage for the insureds’ claim based on the contention that a majority of the damage was the result of “design or installation deficiencies” that had allowed storm water to enter the interior wall structure. Therefore, Cincinnati concluded the subject damage was either excluded under the policy’s Construction Defect Exclusion and Fungi Exclusion, or subject to the policy’s Fungi Additional Coverage endorsement. As a result, Cincinnati paid $10,000 under the policy’s fungi-related coverage (Fungi Additional Coverage endorsement) and $2,138.53 for other damages falling within the ensuing cause of loss exception to the Construction Defect Exclusion. Cincinnati denied coverage for costs associated with remedying and repairing the purported construction defects.
Eventually, Cincinnati filed a lawsuit against its insureds seeking declaratory judgement as to its coverage position. In response, Cincinnati’s insureds disputed Cincinnati’s coverage position and filed counterclaims against Cincinnati for breach of contract, declaratory judgment, and bad faith related to Cincinnati’s handling of their claim. The circuit court ultimately granted Cincinnati’s summary judgment motion as to coverage, agreeing that the Construction Defect and Fungi Exclusions contained in the applicable homeowner’s policy barred any additional coverage under the policy’s terms beyond that which Cincinnati had already paid with respect to the alleged May 2018 rainstorm damage. Further, because the circuit court ruled in Cincinnati’s favor and held that Cincinnati had not breached its contract with the insureds, the court dismissed, sua sponte, the insured’s bad faith claim as a matter of law. The insureds appealed the circuit court’s decision.
Decision and Analysis
On appeal, the Court of Appeals of Wisconsin concluded the ensuing cause of loss exception to the policy’s Construction Defect Exclusion reinstates coverage, and the policy’s Fungi Additional Coverage endorsement renders the Fungi Exclusion inapplicable. Thus, the appellate court reversed the circuit court’s decision, finding the circuit court erred in granting summary judgment in Cincinnati’s favor, and remanded the case for further proceedings.
First, the appellate court held that even assuming the Construction Defect Exclusion applies, the damage to the insureds’ home nevertheless constitutes an ensuing cause of loss under the policy’s ensuing cause of loss exception and the authority of Arnold v. Cincinnati Insurance Co., 2004 WI App 195, 276 Wis. 2d 762, 688 N.W.2d 707. Relying on Arnold as binding authority, the appellate court explained that an “ensuing loss” “is a loss that follows the excluded loss ‘as a chance, likely, or necessary consequence’ of that excluded loss[,]” and “in addition to being a loss that follows as a chance, likely, or necessary consequence of the excluded loss, an ensuing loss must result from a cause in addition to the excluded cause.” Id. at ¶¶27, 29 (emphasis added). The appellate court then proceeded to apply the following three-step framework adopted in Arnold to determine whether the ensuing cause of loss exception applies: (1) first identify the loss caused by the faulty workmanship that is excluded; (2) identify each ensuing loss, if any – that is, each loss that follows as a chance, likely, or necessary consequence from that excluded loss; and (3) for each ensuing loss determine whether it is an excepted or excluded loss under the policy. See id. at ¶34. Based on the appellate court’s application of this three-step framework, it concluded the rainwater at issue, i.e., the May 2018 rainstorm, was an ensuing cause of loss within the meaning of the applicable policy’s ensuing cause of loss exception to a Construction Defect Exclusion.
Second, the appellate court held that the policy’s Fungi Exclusion and its anti-concurrent cause of loss clause did not exclude coverage for the damage to the insureds’ home. Most significantly, in reaching this conclusion, the appellate court determined that the phrase “[t]his exclusion does not apply” in the Fungi Exclusion does not introduce an exception to the exclusion, but rather introduces two scenarios in which the Fungi Exclusion is never triggered in the first instance because its conditions for application are never satisfied. According to the appellate court, one of the circumstances enumerated in the Fungi Exclusion, wherein it states the exclusion “does not apply” “[t]o the extent coverage is provided for in Section I, A.5. Section I – Additional Coverage m. Fungi, Wet or Dry Rot, or Bacteria with respect to ‘physical loss’ caused by a Covered Cause of Loss other than fire or lightning,” rendered the exclusion inoperative with respect to the subject loss. Notably, the concurring opinion explains how the majority’s interpretation of the Fungi Exclusion’s “this exclusion does not apply” language appears to depart from prior case law, wherein Wisconsin courts have repeatedly concluded that this language creates an exception to an exclusion that reinstates coverage. See Neubauer, J. (concurring).
Third, the appellate court held the policy’s $10,000 limit of Fungi Additional Coverage applies to the portion of subject home’s damages that was at least partially caused by “fungi, wet or dry, or bacteria.” However, the $10,000 limit does not decrease or limit the coverage that was otherwise available for the home’s damages caused solely by rainwater.
Based on its interpretation of the policy provisions set forth above, the appellate court additionally held: (1) genuine questions of material fact exist at least as to whether “fungi, wet or dry rot, or bacteria” caused any of the damage to the insureds’ home, and if so, what portion of the damage is attributable to “fungi, wet or dry rot, or bacteria”; (2) only after properly apportioning any damage caused by “fungi, wet or dry rot, or bacteria” can Cincinnati determine the extent of coverage it is obligated to provide under the terms of the homeowner’s insurance policy; and (3) because issues of material fact remain as to the cost to repair the construction defects (not the ensuing loss), this issue remains to be addressed on remand. The appellate court also reinstated the insureds’ bad faith claim asserted against Cincinnati in the underlying action, which had been dismissed by the circuit court when granting summary judgment in Cincinnati’s favor.

EPA Proposes Updated General Clean Water Act NPDES and Construction Permits

Key Takeaways

What Happened? The U.S. Environmental Protection Agency (EPA) proposed the 2026 version of the National Pollutant Discharge Elimination System (NPDES) Multi-Sector General Permit (MSGP) for stormwater discharges associated with industrial activities. When finalized, this new permit will replace the current MSGP when it expires on February 28, 2026. In addition, EPA proposed a narrow modification to its 2022 Construction General Permit for Stormwater Discharges (CGP), to expand the list of areas eligible for coverage. EPA is currently soliciting public comment on all aspects of the proposed MSGP, as well as on the CGP modification.
Who Is Affected? In the short term, the 2026 MSGP will apply to industrial facilities from thirty different sectors where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. In the long term, EPA’s proposed action will affect industrial facilities in states that model their NPDES stormwater general permits after EPA’s MSGP. Meanwhile, the CGP modification will affect construction activities in Lands of Exclusive Federal Jurisdiction.
Next Steps? Industrial facilities covered by the existing MSGP should consider how to engage in public comment by February 11, 2025, to ensure EPA adopts a reasonable final permit with the best information available and consistent with the law. Meanwhile, entities affected by the CGP should consider submitting comments by January 13, 2025. For more information, please contact the authors.

2026 MSGP
EPA released its proposed 2026 MSGP, which authorizes stormwater discharges associated with industrial activities in jurisdictions where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. This newest version of EPA’s MSGP would take effect in February 2026, when the current 2021 MSGP expires. EPA is currently soliciting public comment on the proposed 2026 MSGP, with a comment deadline of February 11, 2025.
As with the current MSGP, the proposed coverage under the 2026 MSGP would be available in jurisdictions where EPA is the NPDES permitting authority for stormwater discharges from industrial facilities in thirty different sectors, including but not limited to: timber, chemicals, glass and cement, metals and mining, landfills, and transportation. While the proposed permit, once finalized, would immediately affect industrial facilities where EPA is the permitting authority, states implementing authorized NPDES programs could also choose to model their permits after EPA’s MSGP. This proposed permit could thus have significant short-term and long-term impacts on numerous industrial facilities.
Proposed Changes Compared to the 2021 MSGP
EPA proposed that the 2026 MSGP would differ from the current MSGP in several respects:

Considerations of Stormwater Control Measure Enhancements for Major Storms

The proposed 2026 MSGP would modify a number of considerations in the 2021 MSGP by, among other things, removing the word “temporarily” to indicate EPA’s view that “it is generally best practice to implement SCMs [stormwater control measures] on a more regular basis than just temporarily.”
The new permit also clarifies that, when evaluating whether the facility has previously experienced major storm events, the permittee must do so based on current conditions, defined as “100-year flood (the 1% -annual-chance flood) based on historical records;” and, when evaluating whether the facility may be exposed in the future to major storm and flood events, the permittee must do so based on best available data, defined as “the most current observed data and available forward-looking projections.”
The proposed 2026 MSGP also specifies that all stormwater control measures must be based on the best available data. EPA intends this requirement “to ensure stormwater control measures are resilient to withstand storms and properly manage stormwater through their lifespan to reduce pollutants in stormwater discharges.”

Water Quality-Based Effluent Limitations or Other Limitations The 2026 MSGP proposes to revise the provision on water quality-based effluent limitations to add more specific language on what discharges must not contain or result in, such as: observable deposits of floating solids, scum, sheen, or substances; an observable film or sheen upon or discoloration from oil and grease; or foam or substances that produce an observable change in color. EPA’s proposed revisions also struck the current MSGP’s vague requirement that each “discharge must be controlled as necessary to meet applicable water quality standards.” The agency likely proposed this change in anticipation of a ruling from the U.S. Supreme Court in City & County of San Francisco v. EPA, No. 23-753, a case in which the Court will decide whether EPA has the authority to impose permit requirements like the language EPA has dropped from the proposed 2026 MSGP.
Monitoring

The proposed 2026 MSGP would include a new provision requiring a majority of sectors to conduct “report-only” indicator analytical monitoring for Per- and Polyfluoroalkyl Substances (PFAS).
EPA is also proposing to shift certain sectors from “report-only” indicator monitoring to benchmark monitoring for pH, total suspended solids (TSS), and chemical oxygen demand (COD). The benchmark monitoring parameters would be based on indicator monitoring results collected under the 2021 MSGP.
The proposed 2026 MSGP sets new benchmark monitoring for ammonia, nitrate, and nitrite by operators in subsector I1.
EPA also proposes that several new subsectors conduct benchmark monitoring for various specific metals based on EPA’s industry analysis of pollutants that stem from common activities.
The 2026 MSGP further proposes a heightened monitoring schedule for benchmark monitoring that would require operators to conduct quarterly monitoring for the first three years of permit coverage (or a minimum of twelve quarters or monitoring periods of sampling). By comparison, the current MSGP calls for benchmark monitoring only in the first and fourth year of a permittee’s permit coverage.
Finally, the schedule for impaired waters monitoring would also change to mandatory quarterly monitoring for the entire five-year permit term, a departure from the current MSGP’s requirement to conduct impaired waters monitoring only in the first and fourth years of permit coverage.

Additional Implementation Measures (AIM)

The 2026 MSGP would add to current AIM Level 1 response requirements by requiring facilities to conduct an inspection to identify the cause of a benchmark exceedance.
EPA also proposes to require operators to obtain express EPA approval of a natural background exception before discontinuing compliance with AIM. Under the current a claimed natural background exception is “automatically in place and the operator [is] not required to wait for verification from EPA to discontinue [AIM] compliance.”
The 2026 MSGP would require operators to submit an AIM Triggering Event Report to EPA anytime a facility triggers AIM at any level.
Additionally, EPA proposes required corrective action equivalent to AIM Level 1 responses when facilities discharging into impaired waterbodies detect a pollutant causing an impairment.

Public Comment
EPA welcomes, and interested parties should consider submitting, public comments on any aspect of the proposed 2026 MSGP. Additionally, EPA is requesting specific feedback on the following issues:

A host of questions pertaining to 6PPD-quinone, including how to identify sources of 6PPD-quinone in stormwater discharges and the types of best management practices permittees might implement to reduce 6PPD-quinone in their discharges;
What methods to use for PFAS indicator monitoring;
Whether EPA should include benchmark monitoring for iron and magnesium;
Whether to require PFAS-related benchmark monitoring for some or all of the sectors identified for PFAS-indicator monitoring; and
Whether to require impaired waters monitoring throughout the entire permit term, and any alternative approaches.

CGP Modification
In parallel, on December 13, 2024, EPA proposed a narrow modification to the 2022 CGP, which covers stormwater discharges from regulated construction activities in areas where EPA is the permitting authority. If adopted, the proposed modification would take effect in early 2025. EPA is currently soliciting public comments on the proposed CGP modification, with a comment deadline of January 13, 2025.
The CGP modification aims to expand the list of areas eligible for coverage to include construction projects in Lands of Exclusive Federal Jurisdiction. As the 2022 CGP failed to clarify, this proposed modification would specifically provide eligibility for all Lands of Exclusive Federal Jurisdiction without disrupting permit coverage for ongoing construction activities. The proposed CGP modification also clarifies the requirements for projects discharging to receiving waters within the Lands of Exclusive Federal Jurisdiction. Operators of such projects would follow the same requirements as used in the CGP for discharges to sensitive waters.
Next Steps
EPA is currently soliciting public comments on both proposed permits. All comments for the MSGP should be submitted to EPA by February 11, 2025, while comments for the CGP should be submitted by January 13, 2025. While EPA has not yet scheduled any public hearings, it plans to host informational webinars on the 2026 MSGP. The agency’s timetable for acting on these permits may also change after the new Trump administration takes office. For instance, new EPA personnel may modify and re-propose a version of the 2026 MSGP that better reflects the new administration’s priorities. Ultimately, engaging in public comment is an important opportunity for regulated industries to provide information and recommendations to EPA and help shape their stormwater permit obligations in years to come.

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