Real Estate, Land Use and Environmental Law Blog - Up-to-date information on Real Estate, Land Use and Environmental Law

By Edward B. Lozowicki and James G. Higgins

Owners, developers and major general contractors are ramping up their use of wrap-up insurance policies on building and industrial projects. When sponsored by an Owner, wrap-ups are dubbed  Owner-Controlled Insurance Program ("OCIPs"). If the general contractor sponsors the wrap-up, it is termed a Contractor Controlled Insurance Program ("CCIPs"). These policies offer significant cost savings to owners and generals. Traditionally, bid packages required the general contractor and its subcontractors each to carry liability insurance and to indemnify the Owner and name it as an additional insured. This arrangement has been criticized as requiring costly duplication of coverage, and causing needless litigation over indemnity rights. Wrap-ups seek to avoid these consequences by affording liability coverage to all participants on a project under a single policy. However there have been problems with wrap-ups such as inadequate policy limits and gaps in coverage. And the controversy over contractual indemnity clauses continues.

By Robert Uram and Robyn Christo

The United States Fish and Wildlife Service (the "Service") is accepting public comments through November 23, 2009, on its proposed Strategic Plan for Climate Change ("Strategic Plan") and accompanying 5-Year Action Plan ("Action Plan"). Both Plans are part of the Department of the Interior's (the "Department's") commitment to organizing a Department-wide effort to protect the country's water, land, fish and wildlife against the effects of global warming. The Service developed the Plans to provide the basic framework for and specific details of its overall strategy for working with others to "ensure the sustainability of fish, wildlife and habitats in the face of climate change." The Strategic Plan lays out the Service's general climate change goals whereas the Action Plan identifies specific actions the Service will take to accomplish those goals. 
 

By Misti M. Schmidt

In 2008, a superior court judge placed a moratorium on certain aspects of the emissions trading program administered by the South Coast Air Quality Management District ("District"), instructing the District to complete an environmental impact report regarding its 2007 amendments to District Rule 1315 and District Rule 1309.1. See Natural Resources Defense Council v. South Coast Air Quality Management District, Case No. BS110792 (C.D. Cal., Nov. 3, 2008). Rule 1315 sets forth procedures for tracking emissions credits, while Rule 1309.1 establishes a priority reserve to more easily provide credits to certain preferred sources. Perhaps unexpectedly, the decision with respect to Rule 1309.1 had a large impact on small businesses and public services which have not been permitted to expand because the District has been unable to issue any emissions credits to these entities.
 

By Kyndra Joy Casper

In a move certain to fuel the debate over climate change legislation in Congress, the U.S. Environmental Protection Agency (the "EPA") recently revealed a new proposal to regulate greenhouse gas ("GHG") emissions from power plants, factories and refineries, which are considered large GHG emitters.  The regulations being developed would, for the first time, require the use of best available control technology (“BACT”) to compel large emitting sources to curb GHG emissions whenever a new facility is constructed or a major modification takes place. The proposal would require large industrial facilities that emit at least 25,000 tons of GHGs a year to obtain construction and operating permits. Small businesses such as farms, restaurants, and many other types of small facilities would not be included in these requirements. The EPA’s proposal signals that it will act under the existing authority provided by the Clean Air Act, meaning that if Congress does not pass a climate change bill, the EPA will act on its own to curb emissions.
 

California recently enacted SB 816 to change the penalty provisions for failure to timely file a transfer of property ownership statement with the State Board of Equalization (the "BOE") upon a change in control or change in ownership of a corporation, partnership, limited liability company, or other legal entity. Note that these new rules apply only to late filings of ownership statements upon the change in control or ownership of a legal entity, and not to late filings of ownership statements required to be filed with the county assessor's office upon the recording of a deed transferring real property.

By James Pugh & Dave Lanferman

On October 22, 2009, the California Supreme Court decided not to review the Court of Appeal's decision in the landmark Palmer/Sixth Street Properties v. City of Los Angeles case. [See SMRH Blog 08/18/2009, for detailed discussion of Palmer decision.] This decision, although favorable for Palmer, could launch "inclusionary zoning" and similar affordable housing laws across the state into uncertain legal waters as municipalities attempt to enforce now-questionable inclusionary zoning requirements.

Guggenheim v. City of Goleta (9th Circuit, No. 06-56306, 9/28/2009).

By Dave Lanferman and Deborah Rosenthal

According to a panel of the federal Ninth Circuit Court of Appeal, the City of Goleta owes compensation to mobile home park owners for economic losses resulting from the enactment of a mobile home rent control ordinance. In Guggenheim v. City of Goleta, the panel held that, on its face, the rent control ordinance effectuated a “naked transfer” of approximately 90% of the value of the property from the park owner to the tenants. The court declared that “a facial challenge [to an ordinance] exists as a viable legal claim” under the ad hoc, multi-factor standards first described by the U. S. Supreme Court in 1978, in Penn Central v. City of New York (1978) (438 U.S. 104). Based on the unusual circumstances of this case, the court addressed the merits of the claim and found that this severe loss of value was a compensable regulatory “taking,” even though the park owners continued to earn positive annual returns.

Standard Pacific Corporation v. Superior Court of San Bernardino (Garlow) (2009) ___ Cal. App. 4th ____ (Aug. 14, 2009, No. E046844)

By James Pugh

The Fourth District Court of Appeal recently held that construction-defect plaintiffs must provide developers with notice and an opportunity to repair before filing suit. This holding in Standard Pacific Corporation v. Superior Court of San Bernardino (Garlow) confirms the procedural requirement of Senate Bill 800, which is also known as the “Fix It Law.”

Connecticut v. American Electric Power Company Inc., ____F.3d ____, No. 05-5104 (2nd Cir. 2009)

By James Rusk

States and private plaintiffs may sue utility operators under the federal common law of nuisance to abate carbon dioxide ("CO₂") emissions that contribute to global warming, the Second Circuit Court of Appeals held this month. Although the 139-page opinion appears to open a new front in the fight over climate change, its full import is uncertain. The court held only that plaintiffs had standing, that they had stated public nuisance claims under the federal common law and that those claims were justiceable. It did not reach the merits of plaintiffs' claims, and it expressly noted that those common law claims could yet be displaced by federal legislative or rulemaking action. With that in mind, the case could prove more significant as an additional impetus for national greenhouse gas regulation than as a tool for judicial control of emissions.

By Brenna Moorhead

The California Natural Resources Agency (CNRA) led twelve state agencies in preparing the Draft California Climate Adaptation Strategy. The Strategy responds to the mandates of Executive Order S-13-08, which called for development of an adaptation strategy for addressing climate change. Consistent with the Order, the Strategy summarizes the best known science on climate change impacts, assesses the state’s vulnerability to these impacts, and outlines solutions to be implemented by state agencies to promote resiliency.