Posts Tagged ‘Wall Street Journal’

New Orleans Business Market Receives National Acclaim

Over the weekend a good friend living in New York City, sent me a link to a Wall Street Journal article which outlines what all of us here in New Orleans have been seeing over the past few years, new exciting business growth. The article by Douglas McCollam, talks about the success of the non-profit Idea Village which was started in NOLA a decade ago.

The most telling aspect of McCollam’s piece is how he sees, and how it is apparent to New Orleans residents, that the attitude and culture of business has changed. Hurricane Katrina helped to rid the city of the negative attitude and filled it with a group of forward thinking resilient entrepreneurs who want to make a difference, while at the same time making a dollar.

One of the more colorful excerpts from McCollam’s article addresses the problem with the former attitude of the city,

“We had found the root of the problem.” It’s a problem that New Orleans seems to have overcome in the years since Hurricane Katrina—so much so that Mr. Williamson can now afford a little levity.

Other positive organizations that are helping to aid in business growth and entrepreneurial spirit include the New Orleans Startup Fund. This all ties into constructionlawmonitor.com because, NOLA startup fund recently picked Zlien.com as one of its featured start up companies to help grow and become a successful New Orleans and nation-wide company. Zlien.com was founded by Wolfe Law Group founder, Scott G. Wolfe, Jr. Scott is the embodiment of the Wall Street Journal article and the national focus on our great city.

The winds of change are among us here in New Orleans and its a great time to live in this city. McCollum points out that Forbes and Inc.com have recently coined New Orleans as a harbor for business growth and young talent. Only time will tell how this will change this city, but it will be a fun ride nonetheless.

Posted in:     Around The Web, Common Topics, Construction News, Louisiana  /  Tags: , , , , , , , , , ,   /   Leave a comment

The US Supreme Court’s AZ Immigration Decision Could Spell Trouble For The Construction Industry

By now you’re heard the news that the United States Supreme Court has upheld the controversial Arizona immigration law allowing states to shut down businesses that hire illegal workers.

A pointed summary of law’s effects is found in the above-linked WSJ article:

The Legal Arizona Workers Act requires employers to use a federal system called E-Verify to check employees’ legal status. It says the state can revoke charters or licenses from employers that repeatedly hire noncitizens lacking work permits. Signing the legislation in 2007, then-Gov. Janet Napolitano called it the “business death penalty.”

The Supreme Court’s decision adds fuel to the E-Verify debate, which we have discussed on this blog in exhausting detail.  The E-Verify system is currently very confusing to contractors. Regulations previously promised to make it mandatory, and those were abandoned two or three times, with the system now being mostly voluntary.  There are, however, exceptions, as it is required on certain federally funded projects, and on all projects in Mississippi, South Carolina, and Arizona.  It is required on state projects in Utah, Colorado, Nebraska, Minnesota, Missouri, Georgia and North Carolina.

The consequences of not following the E-Verify requirements can be severe (see the AZ “death penalty” law), and unfortunately, most contractors are just flat-out confused about how to use the system, when to use it, and what to do when if something turns up about an employee when using it.

The USSC’s sanction of the AZ law demonstrates just how severe penalties for non-compliance can be, and it confirms that the federal government and states can fight illegal workers by penalizing the businesses for using illegal labor. State legislation and federal legislation targeting businesses is likely to follow this big decision. Ensure you don’t get penalized by getting informed and active with the E-Verify program immediately.

Posted in:     Construction News  /  Tags: , , ,   /   2 Comments

How To Make Arbitration “Worth It” Again

Arbitration has been the talk of the town amongst the legal community this week, and really, it should be.

One could say that arbitration is at a crossroads these days.   Over the years, the expenses and delays associated with arbitration have rivaled litigation.   From a personal level, I can tell you that arbitration is simply feeling more and more like ordinary litigation.   In recent arbitrations, the parties have engaged in a substantial amount of discovery, and the proceeding itself felt wrapped in a court-like formality with objections to evidence made left and right.

And let’s not even mention the costs associated with an arbitration.   I recently filed for arbitration with the American Arbitration Association paying a $4,500 filing fee, and then, just a few months later being asked to pay another $4,000 for our share of the arbitrator’s fee.   Even the AAA knows their fees are out of hand, as I’ve recently gotten a survey phone call from them where it seems the AAA’s administrative nightmare is looking for answers.

After all of this, you may think I’m opposed to alternative dispute resolution?   Well, I’m not .   Not yet.

Similar to the online discussion about arbitration this week, I believe there is a way to make arbitration worth it for the parties (despite the natural slippery slope tendency of things).   It requires some extra front end work and legal jargon, and yes, counsel from an attorney to predict which type of ADR situation will work best for your matter.

Part One:   Conversations on What’s Wrong (or Right) with Arbitration

There’s no shortage of complaints about arbitration (we’ve even done it!)   Just this week, the WallStreet Journal published this on its Law Blog:  Has Arbitration Become More Burdensome than Litigation? It starts with this revealing statement:

Arbitration was once known as a faster, cheaper, better way to settle disputes.

But has the process become as bogged down as conventional litigation?

And look at some of the comments to this article; scathing lawyers, of course:  “Of course Arbitration has become hugely expensive;” and “Arbitration is extremely more expensive than litigation;” and, my favorite, “So lawyers complicate arbitration and make it way more expensive.  Is this news?”

Are the criticisms true?   The National Arbitration Forum would argue they are not, and they even have a website dedicated to the issue:   Arbitration-Truth.com.   Pointing to surveys and empirical studies like one performed by John Chalk, Sr. of for the Texas Bar ADR Section, these anti-critics argue the “empirical studies do no support the current criticisms of arbitration.”

Whose right?   Well, both the critics (like me) and the anti-critics are probably part right, and that’s exactly why folks should look at their options in making arbitration work for them, and “worth it” again.

Part Two:  Tips to Make Arbitration Worth It

So, what can you do to make the arbitration process actually work as intended?    Here’s the good news – since the rules of arbitration are left to the parties, you can do a heck of a lot.   And where do you start setting these rules?   Your contract.

Take a look at the recent article by our friend Alan Haley on the Louisiana Construction Law Blog at Blogspot:  Should Arbitration be a Standard Clause in Construction contracts? Alan comments that he advises clients to “tailor arbitration clauses…to their specific desires and the needs of the parties.”   Want more specific instructions on how to tailor the contract – check out the related post here.

Another blog post this week helpful to those looking to make arbitration right again with better contracting comes from one of my favorite blogs, Adams Drafting (we’ve talked about this blog previously here).    Interestingly, Ken Adams refers to an article on law.com and not the one on the WSJ, but it’s just a different shade of gray.

Ken highlights the importance of making the ADR clause work specifically for you with the following:

Whatever arbitration clause you use….commentators on arbitration generally recommend that you supplement it.

Part Three:  Choose Your ADR Company After Thinking About It

I’ll make this point very quickly.   Do not choose the American Arbitration Association just because it’s the company you’re heard of.   The AAA has plenty of competition, and in most cases, the competition will be cheaper and offer a more pleasant ADR experience.    In fact, the AAA uses many of the same arbitrators as these other companies.

Look around and ask your lawyer about their positive and negative experiences with these companies, and select one that works.  It might be the most important thing you can do to make the arbitration process worth it.

Posted in:     Arbitration & ADR, Construction Contracts  /  Tags: , , , ,   /   6 Comments

Liens Make Your Payment Problem the Entire Project’s Biggest Problem

When you don’t get paid on a construction project, that is a big problem for you and your company. But, is it a big problem for the entire construction project? Not likely.

So, how do you make your problem an important problem to the other players working on a construction job? With a mechanic’s lien, of course.

The Wall Street Journal recently reported on a mega-project in Las Vegas (the $8.5 billion City Center), and a contractor dispute that is affecting the project’s finances. There was something really interesting about this report for those of us who follow mechanic lien law and news – and that’s this quote from City Center President Bobby Baldwin, referring to over $500 million in liens filed against the project:

Obviously everybody is concerned about the liens. They have to be explained in great detail to our residential buyers.

To resolve the concern about the liens, the property owner is slowly paying off all of the subcontractor and supplier claims while they proceed with their dispute against the prime contractor. Without those liens, those subs and suppliers would have to wait months or years for the main dispute to resolve, and payment to trickle down from the owner to them. Depending on the size of the contract, that’s something that could cripple their business.

The Wall Street Journal article and construction dispute at the City Center was the subject of a blog post on the Construction Law Monitor, which that blog called a “Large-Scale Example of an Everyday Construction Dispute.” And that summary is perfectly true when it comes down to mechanics liens.

Regardless of how large or how small the project, mechanics liens creates a problem for the project. If you’re not paid on a construction project, the best way to make your problem the construction project’s problem, is to file a mechanics lien.

This article was originally posted on Express Lien’s topic-specific Construction Lien Blog.

Posted in:     Mechanics Lien  /  Tags: , , ,   /   3 Comments

The Project in Las Vegas A Large-Scale Example of Typical Construction Dispute

A mega-project in Las Vegas is having real problems; mega-problems.   But when you look past the large numbers, all that is left is a simple construction dispute that is played out everyday across the nation between contractors, subcontractors and owners.   The dispute – reported recently by the Wall Street Journal – serves as a good, large-scale example of how things can go wrong in a construction project.

Here are three key components of this dispute:

  • The general contractor claims the owner hasn’t paid according to the payment schedule, and the owner claims it is owed money because of construction defects.
  • Failure to pay the prime trickled down to the subs, and they have filed liens.
  • The owner further refuses to pay the prime because (i) they have a contractual duty to keep the project lien-free; and (ii) The liens are causing the owner damages in that it is more difficult to sell the condominium units.

Sound familiar?   Of course it sounds familiar, this is a summary of nearly every owner / prime contractor dispute across the country.

As your construction project approaches completion, keep these issues in mind.   Owners very frequently get tighter on the final payments because they’re afraid the prime contractor will bail before work is 100% complete.   But the budget squeeze results in subcontractor liens, animosity, catch-22s and the spark of a litigation war.

We usually recommend two ways to handle these frequent problems.

First, handle it in the contract.    Think about these issues before you sign anything, and make the contract clear about how the contract will reach final completion.

Second, set up a way to resolve the dispute out of court (mediations, initial decision makers, and the like).

What do you guys think?   Any other recommendations?

Posted in:     Arbitration & ADR, Construction News, Litigation  /  Tags: , , ,   /   4 Comments