BILD

Riverside, CA (September 7, 2017)—A Riverside County judge has handed a victory to those who work to protect housing and other development  from regulatory cost increases.  The Building Industry Legal Defense Foundation (BILD) and Building Industry Association of Southern California, Riverside County Chapter (BIASC-RC) won their lawsuit to stop an illegal development fee from being imposed by the San Gorgonio Memorial Health Care District. 

The fee would have tacked on thousands of dollars to all new development in the area including residential, commercial, and institutional projects, like churches and schools.  Sample fees would have been $228,400 for a 100-unit subdivision, $92,050 for a small, 50-unit apartment complex, and $114,100 for a small, neighborhood strip center. 

BILD and BIASC-RC sued in May of 2015 to stop the fee claiming the Healthcare District had no legal authority to adopt development fees of any kind in any amount.  In addition, the lawsuit claimed that the fee failed to meet state law requirements, that the District was infringing on local municipalities’ police powers, and that the building plans the District was basing the fee on failed to undergo review under the California Environmental Quality Act. 

BIASC-RC and BILD were concerned not only for the damaging effect that the fee would have had on local development, but also for the potential effect that letting the District adopt the fee might have on other agencies.  “Special districts only have the powers the legislature gives them,” said BILD General Counsel, Shanda Beltran, “if you let one district ignore those limits and do whatever they want, soon you’ll have districts all over California adopting fees without any real power to do so.” 

After more than a year in court, Riverside County Judge Sharon Waters ruled that the Healthcare District acted unlawfully in adopting the fee and directed the District to cancel the fee.  BIASC and BILD’s outside lawyer, David Lanferman with Rutan & Tucker was pleased with the judgement and stated: “The Court’s decision in this case provides significant relief to the housing industry in Riverside County, and an important reminder that State law limits the power of agencies to create burdensome fees on new construction activity without clear constitutional and legislative authorization.” 

The building industry sued the Healthcare District only after more than a year of protracted discussions regarding the fee.  Said Bill Blankenship, Executive Officer of BIASC-RC about the results of the case and the lead up to it: “We are pleased with the eventual outcome; however, we are saddened that the local residents will shoulder the burden of a bad decision by the District’s Elected Board Members for a funding strategy for expanding the hospital that was outside their legal authority.  Even after it was made clear to them that the District had alternate options within their state-mandated powers, they still decided to pursue a funding option for that was clearly illegal and not within their authority.”

The case of Building Industry Association of Southern California and Building Industry Legal Defense Foundation v. San Gorgonio Memorial Healthcare District was filed in Riverside County Superior Court and the Court’s judgement can be found below. 

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The BILD Foundation is a non-profit legal advocacy group for the building industry that involves itself in matters in Southern California as well as statewide and nationally.  BIASC is a non-profit trade association with more than 1,100 member companies throughout Southern California that seeks to improve the business climate for all types of land development and construction of all types of products, including housing. 

For more than a year, BILD has been involved in a case currently before the California Court of Appeal that promises to determine whether or not insurance coverage for construction defect claims continues to exist.  The case is Navigators Specialty Insurance Company v. Moorefield Construction, Inc.  BILD has appeared in the case as a friend of the court, filing its brief in September 2015.  BILD’s outside counsel, Gerard Mooney with Rutan & Tucker, LLP, obtained an Order from the Court of Appeal to participate in oral argument and will be making BILD’s case before the Court on October 19, 2016.

The case revolves around a commercial construction defect action wherein the floor tiles of a retail store were installed by Moorefield and are now claimed to be defective as a result of an adhesive failure.  Moorefield tendered the matter to its insurer, Navigators, under its comprehensive general liability policy, seeking coverage for the retailer’s defect claims.  Navigators argued before the trial court that Moorefield’s installation of the flooring titles over a concrete slab with elevated moisture vapor levels was an intentional act, rather than an “accident” as a required by the policy, such that the policy did not cover the matter. The trial court agreed with Navigators – leaving Moorefield with no insurance coverage. 

BILD believes that the trial court erred in siding with Navigators and that to rule in any way other than to affirm Moorefield’s coverage under its policy would potentially negate coverage for construction defects under CGL policies.  Specifically, BILD’s brief contends that contractors do not intend to do their work defectively, and that any reasonable interpretation of the term “accident” should cover a contractor’s allegedly defective work, particularly given nearly all construction work is done with knowledge of a potential risk of product failure. 

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BILD Foundation is leading a broad-based coalition challenging the proposed “Procedures for Discharges of Dredged or Fill Materials to Waters of the State.”  Through a comment package submitted August 18, 2016 as well as testimony provided at State Water Resources Control Board (State Water Board) meetings on the matter, BILD is continuing in its many years of involvement in the State Water Board’s efforts to regulate wetlands and other waters throughout California.  

Working through its outside counsel, Keith Garner with Sheppard Mullin, LLP, BILD along with a coalition of 30 additional statewide and regional business, planning, agricultural, and water-related organizations provided extensive comments to the State Water Board.  As Mr. Garner explains, “The current proposal is based on questionable legal authority, conflicts with an existing federal regulatory program, and will likely result in significant delay and additional costs for public and private project sponsors.” 

BILD’s comments focused upon several glaring and significant problems with the proposed permitting program.  

To read the rest of the article, and more about the highlights, visit BILD's website by clicking here.

After several years of administrative and courtroom battling, the California Supreme Court handed down a decision on August 29, 2016, that promises to relieve pressure on the building industry to fund costly storm water quality programs throughout the state. 

The case was Department of Finance v. Commission on State Mandates, and involved a challenge brought by the County of Los Angeles seeking to have the state fund portions of their implementation program for the municipal separate storm sewer system (MS4) permit. Public storm drain permits often cost millions or billions of dollars for local governments to implement and the specific requirements challenged by the County of Los Angeles included requiring trash receptacles at transit stops and inspections of various facilities, including construction sites. 

Per the California Constitution (Article XIII B, §6.a) the state is required to reimburse local governments that state law or regulations require them to implement programs that go beyond federal law. Many local governments have argued that numerous aspects of their municipal storm sewer permits—issued by the State Water Resources Control Board or Regional Water Quality Control Boards—go beyond the requirements of the federal Clean Water Act and are thus state mandates eligible for reimbursement. The County of Los Angeles along with most of the cities therein filed a claim with the Commission on State Mandates demanding such reimbursement and the case was the first one of its kind filed in the state. Other local governments, including the Counties of San Diego and Orange, also have matters pending before the courts or the Commission that will be impacted by this decision.

BILD Foundation was involved in each stage of the litigation, filing friend of the court briefs supporting the argument that the terms of the storm drain permits extend beyond federal requirements, are imposed at the discretion of the state, and are, thus, subject to reimbursement by the state.  The goal of the BILD briefs was to support the local governments, ensure access to funding of the local programs, and thereby relieve some pressure felt by the building and construction community to contribute to the funding of these costly programs. 

Click here to read the rest of the article on BILD's website.

For the past twenty years a small gray songbird has greatly affected the development and the conservation of the coastal real estate in California. A federal decision made recently to leave the coastal California gnatcatcher on the endangered species list has left Southern California developers stuck.

The gnatcatcher has been a cornerstone to conservation planning in San Diego, Riverside and Orange counties since it was listed as a threatened species in 1993. In 2014, the Pacific Legal Foundation petitioned the U.S. Fish and Wildlife Service to delist the bird, arguing that recent science casts doubt on its threatened status. The service rejected that petition last week, but debate over the gnatcatcher isn’t over. Building groups say they may sue over the decision, while conservation groups worry the bird remains at risk from wildfires, climate change and development pressure.

“We’re still in the process of analyzing the service’s decision,” said Robert Thornton, an attorney who represented the Building Industry Assn. of Southern California on the petition. “The next step is possibly a lawsuit. The issue here is, did the service comply with the Endangered Species Act, which requires it to use the best science available.”

The gnatcatcher is a blue-gray songbird that lives in coastal sage scrub from Santa Barbara to the Baja peninsula. Researchers say that urban sprawl has whittled away 90% of its habitat in California. By the 1990s, the birds were feeling the pinch. At that time, a 20-year-old environmentalist named David Hogan with the Center for Biological Diversity filed a petition to list the gnatcatcher under the Endangered Species Act.

“Back then, there were virtually zero measures in place anywhere in Southern California to protect the gnatcatcher or its critically endangered habitat,” Hogan said.

The listing ushered in complex systems for protecting ecosystems, known as habitat conservation plans or natural community conservation plans. The plans aimed to streamline environmental permitting, while preserving habitat for multiple species. And the gnatcatcher was at the center of it. By protecting the gnatcatcher, regulators also safeguarded animals such as the coastal whiptail lizard, coastal horned lizard and coastal cactus wren, said Ileene Anderson, a senior scientist for the Center for Biological Diversity. Developers, however, saw the bird, and its ensuing regulations, as a roadblock to the region’s construction boom.

“In general, species listing and the critical habitat designation that goes along with that listing takes areas out of consideration for building and development,” said Shanda Beltran, BILD general counsel for the Building Industry Assn. of Southern California. “That obviously would be a concern to the industry when developable area is reduced.”

The Pacific Legal Foundation said in a news release that the gnatcatcher listing took hundreds of thousands of acres in Southern California off the table for construction.

“In total, approximately 197,303 acres in San Diego, Orange, Riverside, San Bernardino, Los Angeles and Ventura counties have been designated as critical habitat for the coastal California gnatcatcher,” the foundation, a Sacramento watchdog agency for property rights and limited government, stated. “Federal officials estimate that the economic impact of these restrictions will total more $900 million by year 2025.”

In 2014 the foundation petitioned to remove the gnatcatcher from the list, on behalf of the Property Owners Assn. of Riverside County; the Center for Environmental Science, Accuracy & Reliability; and the Coalition of Labor, Agriculture and Business, along with the California Building Industry Assn. and the National Assn. of Home Builders.

They argued that new research showed that the Southern California gnatcatcher is genetically indistinguishable from its Mexican counterparts, and shouldn’t be protected as a separate species. The service, however, convened a panel of geneticists, ornithologists and statisticians, and determined that the original listing is still valid.

The Pacific Legal Foundation and its partners say they’re contemplating a lawsuit to challenge that decision. They hope to change the way the service reviews data and perhaps reset the bar for future endangered species listings.

Read the full story here from the LA Times.

This year is the Building Industry Legal Defense Foundation’s (BILD) 15th annual Law & Policy Conference. The event will take place June 2, 2016 from 1:00 pm o 5:00pm at the Executive Park Conference Center in Irvine, CA.

Attendees will hear a fast-paced discussion covering the key laws, regulations, court cases, and policy impacting the building and development industries before winding down with great food and refreshing drinks for a fun cocktail party.

This is the event for all BIASC members that will bring you in the know, give you practical advice that you and your business clients need to be prepared for in the immediate future. You’ll hear information concerning resource agency control over land use, ballot box planning, reigning in CEQA, transportation policy, affordable housing, and water supply constraints. Those seeking course credits will receive 3.5 hours of MCLE or APA CM credits.

For additional information on the conference or sponsorship, please visit bildfoundation.org, email BILD at info@bildfoundation.org, or call Maria at 949-777-3850. The deadline for sponsorship is Friday, May 31st.

Click here to learn more about or to register for the event.