Industry Priorities

Together, AGC of America and its Illinois Chapters have achieved a major breakthrough as to commercial general liability insurance (CGL) coverage for construction defects under Illinois law. The Illinois Supreme Court issued its opinion in Acuity v. M/I Homes of Chicago, LLC, Docket No. 129087 on Nov. 30, 2023. The case involved CGL coverage for construction defects resulting in water damage to a townhome project. In that context, the Supreme Court clarified the law to agree with many state supreme courts that such property damage is an “occurrence” in Illinois. The Supreme Court’s clarification is extremely favorable to the construction industry and was supported by an amici curiae brief sponsored by AGC of America, National Association of Home Builders, American Subcontractors Association and local chapters in Illinois.

Revised rule continues to follow principles rejected by the U.S. Supreme Court

In an eight-to-one decision issued on June 1, the U.S. Supreme Court issued a favorable decision in a labor preemption case in which AGC of America submitted an amicus brief. The case, Glacier Northwest v. International Brotherhood of Teamsters Local Union No. 174, presented the question of whether the National Labor Relations Act (NLRA) preempts an employer’s state tort claim against a union for intentionally destroying the employer’s property in the course of a labor dispute. Agreeing with arguments made in an AGC-supported coalition amicus brief, the Court affirmed the principle that strikers must take “reasonable precautions” to protect employer property from “foreseeable, imminent danger” and held that the union’s failure to do so in the case rendered its conduct outside the NLRA’s protections. Accordingly, preemption did not apply, and the employer in the case is free to pursue damages against the union in state court. For more background on the case, see AGC’s prior articles here and here.

Will Change Federal Permitting for Construction Projects

An AGC-backed lawsuit has led the U.S. District Court for the District of North Dakota to issue a preliminary injunction of the Biden Administration’s 2023 “Waters of the United States” (WOTUS) rule in 24 states (see below) on April 12. Adding to the two-state injunction the association secured from a Texas court as well as a preliminary injunction in Kentucky (AGC of Kentucky joined the Chamber of Commerce on that case), the 2023 WOTUS rule is now temporarily blocked in over half the country: 27 states in all.

AGC of America joined three other employer associations in filing an amicus brief at the U.S. Supreme Court on April 24, 2023, in a case addressing what language is needed in a notice to terminate a collective bargaining agreement (CBA) to satisfy the termination procedure in a CBA containing an “evergreen clause.”

On Jan. 18, the Associated General Contractors of America joined a coalition representing a broad cross-section of the economy in filing a lawsuit to block the U.S. Environmental Protection Agency (EPA) and the Army Corps of Engineers’ new Waters of the U.S. (WOTUS) rule. The legal action seeks to have the new rule put on hold and ultimately reversed. The construction industry invests a significant amount of time and cost in compliance with the Clean Water Act and to avoid or reduce potential impacts on the environment. The new rule is the sixth time the requirements have changed in seven years, compounding the existing uncertainty in an area of law that can not only significantly delay and increase costs on projects but also bring criminal as well as civil penalties.