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Archive for the ‘Construction & Surety Law’ Category

The Fate of REAXX

Posted on: February 13th, 2017

By: Neil L. Wilcove & Daniel A. Nicholson

Per a January 27th ruling, the International Trade Commission (ITC) has ordered Customs to exclude “Bosch Reaxx table saws, and cartridges for those saws, from entering the United States” and issued a Cease and Desist letter to Robert Bosch Tool Corp. that Bosch must “cease and desist from conducting any of the following activities in the United States: importing, selling, marketing, advertising, distributing, transferring (except for exportation), and soliciting United States agents or distributors for imported [Reaxx] table saws.”[1]

A Brief Recap As we have reported before, flesh-detecting injury-mitigation technology like SawStop’s may become the industry standard for table saws in the future. Bosch developed its own flesh-detecting technology and implemented it in the REAXX table saw marketed for the U.S. and Canada (where it will still be available). SawStop, currently the only major manufacturer of such technology in the United States, filed suit against Bosch for patent infringement in July of 2015. Bosch moved forward with the release of the saw late last year during the litigation proceedings.

On November 17, 2016 the ITC, after reviewing the legal arguments of both Bosch and SawStop, put the public on notice that it would not review the initial determination by an Administrative Law Judge that ruled Bosch had infringed on two SawStop patents and would review the ALJ’s recommended remedy. On January 27, 2017, after several extensions, the ITC ultimately ruled in favor of SawStop by issuing a Limited Exclusion Order to U.S. Customs and Border Protection, and a Cease and Desist Order to Bosch. The Commission, coming to this conclusion after “having reviewed the record in this investigation, including the written submissions of the parties,”[2] makes these decisions based on public policy: public health and welfare, competitive conditions in the United States economy, competitive production, the United States consumer, and foreign relations.

The decision of the ITC will now move to the United States Trade Representative (USTR), as delegated by the President, who must approve or disapprove the ITC’s final decision in sixty (60) days. The USTR rarely goes against the ITC, having disapproved of the ITC’s determination once in nearly 30 years. During this sixty (60) day period the REAXX saws will most likely still be on sale, as Bosch is allowed to import and sell the saw and cartridges under bond which the ITC set at 0%.

What the Ruling Means for You According to the Cease and Desist order the expiration of the REAXX ban will be February 1, 2022. We spoke to Bosch to clear up a misconception some may have in the industry that the cartridges will not be available due to the ITC ruling; that is not the case. Owners of REAXX table saws will still be able to purchase cartridges and have their saws serviced indefinitely because the cartridges are produced in the U.S. – so if you own one, or are thinking of buying one within the 60 day period, you are safe to continue using it and purchase one without worry that it will eventually become inoperable or obsolete.

Here’s Bosch’s official response regarding the ruling:

Robert Bosch Tool Corp. is disappointed with the ITC’s decision. We are now in the 60-day presidential review period, in which we hope the president will review the facts of the case and then veto this exclusion order.

Bosch maintains that development of its professional table saw product respects other companies’ patents and represents a new and unique technology in the construction market. It is disappointing that a competitor is continuing its campaign to stop the sale of REAXX technology to consumers.

We believe that advanced REAXX safety technology does not violate any competitor’s intellectual property rights. The patents asserted against REAXX are based on applications filed more than 15 years ago; Bosch does not believe they apply to REAXX technology. In addition, Bosch believes that if the U.S. Patent and Trademark Office had complete information, it would not have issued certain patents in the first place.

It is our firm belief that the development, marketing and distribution of the REAXX Jobsite Table Saw is completely separate and distinct from anything other brands or manufacturers are doing.

At Bosch, safety is a priority. We will work to defend consumers’ rights to buy our products.

For any questions, please contact Neil Wilcove at nwilcove@fmglaw.com or Daniel Nicholson at dnicholson@fmglaw.com.

To view the original online article, click here.

Eleventh Circuit Rules: Attorney’s Fees for Everyone! (Including Sureties and General Contractors)

Posted on: January 31st, 2017

By: Jake Carroll

In U.S.A. f/u/b/o RMP Capital Corp. v. Turner Construction Co., et al., 2017 WL 244066 (11th Cir. 2017) (unpublished), the Court of Appeals for the Eleventh Circuit clarified a previously undecided area of law in holding that general contractors and its insurer sureties may recoup attorney’s fees under the Miller Act.

In the underlying case, Turner, the general contractor, contracted with the Department of Veterans Affairs to construct a portion of the Community Living Center in Orlando, Florida. Pursuant to the Miller Act, Turner obtained a payment bond from several sureties. Inevitably, a dispute arose between Turner and a subcontractor regarding allegedly deficient work, and Turner did not pay the subcontractor the full contract amount. The subcontractor later assigned its accounts receivable to RMP, who brought suit against Turner and its sureties under the Miller Act. RMP determined on the first day of trial that it would drop its Miller Act claims, which prompted Turner and the sureties to move for attorney’s fees, based on the subcontractor’s contract. The district court denied the motion, finding that while Eleventh Circuit precedent supports an award for attorney’s fees for subcontractors, it does not afford the same to general contractors. Turner and the sureties appealed.

The circuit court reversed the district court, and clarified that while the Miller Act does not mention attorney’s fees, Eleventh Circuit precedent dictates that “attorney’s fees are a recoverable item under [a] Miller Act bond” when provided for in a contract. This includes attorney’s fees for both subcontractors and general contractors. The holding brings the Eleventh Circuit in line with several other circuits, including the 1st, 4th, 5th, 8th and 9th. In making its determination, the court relied on the American Rule, which states that each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise. Of course, while federal law may govern the availability of attorney’s fees in Miller Act cases, state law governs the interpretation of a contract provision allowing for attorneys’ fees. See U.S. ex rel. W.W. Gay Mech. Contractor, Inc. v. Walbridge Aldinger Co., 543 Fed. App’x. 937 (11th Cir. Nov. 1, 2013).

The opinion reminds every construction professional and attorney for both subcontractors and general contractors to: (1) practice careful contract drafting; and (2) always read the contract before seeking legal action. Courts have repeatedly upheld contractual provisions, and parties should be well-aware of the terms of the agreement not only during the project, but also when pursuing legal action. For RMP, the cost of this litigation is not limited to the $240,000.00 that went unpaid by Turner, but may also include an additional $47,580.91 in attorney’s fees for bringing suit in the first place.

For any questions, please contact Jake Carroll at jcarroll@fmglaw.com.

Changes May Be Coming for H-1B Visa Program

Posted on: January 12th, 2017

By: Neil Wilcove and Timothy Holdsworth

Recently, Representative Darryl Issa (R-California) re-introduced legislation that would work several significant changes to the H-1B visa program by “closing a loophole” in the current legislation. Currently, Companies must first take good faith steps to recruit and offer a position to an American worker prior to filing an H-1B application unless the H-1B worker receives wages of at least $60,000 or has attained a master’s or higher degree in their field of work. Rep. Issa seeks to increase this threshold to $100,000, with annual adjustments for inflation, and eliminate the masters degree exemption (full bill here).

Rep. Zoe Lofgren (D-California) plans to introduce legislation that also eliminates the master’s degree exemption, but increases the wage exemption to over $130,000. Rep. Lofgren’s bill would also eliminate the lottery system and prioritize allocation of H-1B visas first to employers that hire mainly American workers and then to H-1B-dependent employers based on how much they pay their employees above the prevailing wage for their area of employment. Under the current lottery system, the U.S. Citizenship and Immigration Services performs a computer-generated process to randomly select 85,000 visas to review and rejects the remaining applications outright. Rep. Lofgren’s bill would also set aside 20% of the annual allocation of visas for small and start-up employers (those with 50 or fewer employees).

These proposed changes are not surprising given President-elect Donald Trump’s statement during his campaign that he will “end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers first for every visa and immigration program. No exceptions.”

Although any changes are unlikely to be instituted before this year’s filing period, we will continue to keep you apprised of any modifications to the H-1B visa program and are available to guide you through each step of the current process.

Homebuilder Confidence Doesn’t Translate to a Homebuilding Boom

Posted on: December 21st, 2016

By: Neil Wilcove & Kristian Smith

Confidence doesn’t always translate to construction. A surresidential-buildvey from the National Association of Home Builders released earlier this month showed the highest level of homebuilder confidence in 11 years. But the numbers released by the U.S. Census one day later showed home construction plummeted by 19 percent this month.

These numbers do not seem to make much sense, but there are several reasons for the discrepancy.

Due to factors like the improving economy, high demand for housing, and the possibilities for business improvement under “Trumponomics,” many are optimistic about the housing market, but this has not translated to a boom in building.

Builders are dealing with costly new regulations, rising costs for land and materials, and a labor shortage that could continue to worsen. In addition, many builders remain cautious after the recession and seem to be focusing more on quality over quantity – high demand and low supply allows builders to demand a higher price for each home.

Also, at the end of 2012, when home construction was still reeling from the 2008 recession, confidence in home building began to increase but actual home construction did not. Experts say that as home building continues to increase in coming years, the numbers for confidence and construction will become more similar.

Some experts in the home construction industry also believe that the way the surveys weigh confidence may be skewed.

For any questions, please contact Neil Wilcove at NWilcove@fmglaw.com or Kristian Smith at KSmith@fmglaw.com.

Use It or Lose It: Georgia Court of Appeals Upholds Finding of Arbitration Waiver

Posted on: December 12th, 2016

aaeaaqaaaaaaaajjaaaajdrkogqyntg3ltljzgitndgwmi04mmm0lwnhmgrhnjq0zjk5oaBy: Jake Carroll

Recently, the Georgia Court of Appeals held that a party’s conduct in an original cause of action can constitute a waiver of its right to arbitrate in a renewed action. The opinion brings Georgia jurisprudence in line with related federal courts and clarifies a previously undecided area of arbitration law in Georgia, while also teaching a practical lesson to both practicing attorneys and parties who contract and litigate in Georgia.

In SunTrust Bank v. Lilliston, the Plaintiff, Lilliston, originally filed suit against SunTrust regarding charged and collected interest on loans issued by SunTrust. One of the loan agreements at issue contained an arbitration clause. Lilliston voluntarily dismissed the action twenty-one months after initially filing the case, following removal, discovery, summary judgment, and being placed on the trial calendar. When Lilliston refiled the case sixth months later, SunTrust moved to compel arbitration as provided in one of the loan agreements. The trial court denied the motion—finding that SunTrust waived its right to compel arbitration based on its actions in the original litigation.

The Court of Appeals affirmed the lower court, relying on legal precedent from the Eleventh Circuit, as well as prior decisions from its own docket. The opinion discussed the issue as one of first impression, but also aligned itself with a growing majority of courts in looking at the parties’ conduct to determine if arbitration has been waived. The Court of Appeals also upheld the trial court’s factual finding that “the delay and cost associated with conducting discovery prejudiced the [appellees].” The Court of Appeals again looked to the Eleventh Circuit, which has recognized prejudice in situations where litigation expenses could have been avoided had the parties gone to arbitration.

From this decision, both attorneys, and contracting parties can take away two practical lessons. First, parties should consider arbitration as an option at the outset of a case—not in the middle or end of a case. This can save time and money, and insure that arbitration is still available as an alternative to costly litigation later on in the case. The Court of Appeals makes clear that the purpose of arbitration is to reduce the cost of resolving a dispute, and that behaving inconsistently with that purpose waives the ability to arbitrate in the future.

Second, parties need to be mindful of how costly the litigation is likely to be for both sides if they want to pursue arbitration at a later date. The opinion in SunTrust suggests that a finding of waiver by the court is not governed by a defined set of rules. Instead, a finding of waiver is based on the totality of the circumstances—taking into account inconvenience to the other party, costs, time, involvement in discovery, and motions practice.

This may not be final answer from the Georgia courts on this issue as SunTrust filed certiorari to the Supreme Court of Georgia, yet developments in this area of the law remain important to monitor as courts take a harder line on wasting judicial and private resources.

For any questions you may have, please contact Jake Carroll at jcarroll@fmglaw.com