AGC goes to the U.S. Supreme Court to defend the practice of pre-bid interaction between public owners and contactors that ultimately leads to better RFPs and projects.

AGC filed a joint April 18 “friend-of-the-court” brief in the case Sackett v. Environmental Protection Agency at the U.S. Supreme Court. The Court will take a fresh look at what are “waters of the United States” (WOTUS) under the Clean Water Act (CWA), which may limit federal agencies’ permitting and enforcement authority over construction work in isolated wetlands and ephemeral streams. The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers’ (Corps) will need to factor the Court’s decision into their planned WOTUS rulemakings.

In a favorable decision issued March 11, the TN Court of Appeals agreed with AGC of America and AGC of Tennessee that a subcontractor cannot sue a general contractor on one and the same set of facts for not only breach of contract (seeking to recover its purely economic losses) but also in tort for misrepresentation (seeking compensatory and punitive damages). The court of appeals ruled that the subcontractor’s ability to recover monetary damages was limited by its contract with the general contractor. As such, the court vacated the lower court’s award of punitive damages because they were not permitted under the contract.

Victory for Construction Advocacy Fund-Financed AGC Lawsuit

The Small Business Administration (SBA) intends to withdraw the “Loan Necessity Questionnaire” that has heavily burdened and delayed all applications for forgiveness of Paycheck Protection Program (PPP) loans of $2 million or more. AGC sued SBA last December for developing the form entirely in secret, and without public input, and for using the form to change the de facto requirements for the forgiveness of such loans. During lawsuit settlement negotiations, AGC learned of SBA’s decision to withdraw the questionnaire. Recently, AGC has also received an exceptionally large number of reports about SBA approving these loans for forgiveness. This is excellent news for the thousands of AGC members who accepted such loans in good faith in order to keep their people working.

Together, AGC of America and its Michigan Chapter have extended the association’s long string of successful efforts to establish that the commercial general liability insurance (CGL) policy sold to construction contractors across the United States does provide coverage for property damage resulting from unexpected and unintended defects in a subcontractor’s workmanship (unless one of the policy’s specific exclusions applies). On June 29, 2020, the Michigan Supreme Court became the latest of many state supreme courts to agree that such damage is an “occurrence.”

Together, AGC of America and its Maryland Chapter have plugged a potential loophole in standard contract provisions intended to preclude costly litigation over the damage that a project suffers during construction. The association’s victory in Maryland’s highest court means the standard provisions will continue to have their intended effect, precluding litigation over property damage that the builder’s risk insurance will cover.