Philadelphia Construction Law Blog

A new Philadelphia ordinance, effective July 1, 2016, will have a significant effect on employers who fail to pay wages to their employees for work performed in Philadelphia. Titled Wage Theft Complaints, the ordinance provides for administrative and court remedies, and penalties for “wage theft”, defined by the ordinance as any violation of the Pennsylvania Wage, Payment and Collection Law, Minimum Wage Act, or any other federal or state law regulating the payment of wages, for work performed in Philadelphia.

The developer of the Constitution Pipeline, designed to carry natural gas from the Marcellus Shale areas in northeastern Pennsylvania to New York State and New England, has been delayed. The pipeline was to have been placed in service by the end of this year, but now will not be completed until at least the second half of 2017. The 124 mile pipeline would help ease a shortage of pipelines carrying abundant natural gas from Northeastern Pennsylvania to customers in New York and New England. When constructed, it would be the first direct path linking the Marcellus basin with New York and New England consumers.

In a recent decision, the Pennsylvania Superior Court clarified the legal requirements for a contractor’s direct claim for economic losses against a design professional caused by defective design. In Gongloff Contracting v L. Robert Kimball & Associates, a sub-subcontractor steel erector brought an action directly against a public project design professional (Kimball) for “misrepresentations” in the design documents. Gongloff claimed that the architect/engineer’s structural design was inadequate in that the steel roof structure and trusses could not safely sustain all required construction loads. As a consequence of those deficiencies, project shutdowns ensued, and multiple change orders were issued resulting in substantial additional cost to Gongloff. When the steel subcontractor and general contractor refused to pay those additional costs, Gongloff commenced an action against the design professional.

Andy Cohn is a partner in our Construction Law Department. As an experienced litigator he has tried and won many a construction case. He also reviews contracts and serves as both a mediator and an arbitrator. Here, however, is the rest of the story.

On July 9, the Pennsylvania Legislature amended the Mechanic’s Lien Law to change lien priority rules flowing from the 2012 Kessler decision by the Pennsylvania Superior Court. The Kessler Court had established that mechanic’s liens had priority over open-end mortgages where visible commencement of work at the site pre-dated the recording of the mortgage and advances on the mortgage were made for costs other than “hard construction costs”.

On January 2, 2014, the U.S. Department of Commerce reported that U.S. construction spending rose to its highest level in nearly five years in November, led by a surge in private construction project spending.