The Louisiana Private Works Act (“LPWA”) [1] provides helpful security to unpaid contractors, subcontractors, and suppliers. In particular, it can provide persons that have no contract with the owner a direct claim against the owner for payment and provides both those with and without direct contracts with the owner a privilege or lien on the owner’s property, which is often helpful security for enforcing payment rights. But these benefits are only available if the LPWA’s relatively strict provisions are followed. Further, as the Louisiana Court of Appeal, First Circuit recently confirmed, the claim and lien rights provided by the LPWA are only available to properly licensed contractors, and any lien filed by an unlicensed contractor is invalid where a license is required to perform the work.

In Ilgen Construction, LLC v. Raw Materials, LLC, [2] RML attempted to file two liens on property owned by Ilgen where RML had performed clearing and dirt work for which it claimed to have not been paid. The First Circuit looked past arguments that dominated the trial court proceedings concerning notice of contract requirements to hold that the liens were invalid because RML was not a licensed contractor. The Court reasoned that the LPWA’s protections are designed to secure debts arising from contracts, and because contracts with unlicensed contractors are absolute nullities (i.e., completely invalid), an unlicensed contract cannot assert a valid lien under the LPWA.

In addition to the fact that licensing is required by law, this holding provides another reason for contractors to ensure that they are properly licensed with the Louisiana State Licensing Board for Contractors. If you need assistance with or have questions concerning licensing, liens, or any other construction issues, please reach out to our construction team at this link: https://www.keanmiller.com/construction.html.

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[1] La. R.S. 9:4801, et seq.

[2] Ilgen Constr., LLC v. Raw Materials, LLC, 2020-0862 (La. Ct. App. 1st Cir. 4/16/21), 2021 WL 1438726.

On September 6, 2021, Louisiana Governor John Bel Edwards signed and issued Emergency Proclamation 170 JBE 2021 (the “Proclamation”) designed to provide assistance to certain groups affected by Hurricane Ida, including a temporary suspension of certain deadlines and requirements relating to unemployment insurance as well as the temporary suspension of legal deadlines applicable to legal proceedings in all courts, administrative agencies, and boards.

This Proclamation follows Emergency Proclamation 165 JBE 2021, which declared a state of emergency in anticipation of Hurricane Ida.

The suspension of legal deadlines is similar to the previous suspensions that occurred in 2020 in relation to the COVID-19 pandemic. The suspension is broad reaching, affecting prescription for filing legal claims, discovery deadlines, and all other deadlines set forth in the Louisiana Civil Code, Louisiana Code of Civil Procedure, Louisiana Children’s Code, and many provisions of Louisiana’s revised statutes. Deadlines are suspended until September 24, 2021.

In addition to the suspension of legal deadlines, the Proclamation suspends some requirements relating to certain unemployment benefit claims resulting directly from the effects of Hurricane Ida. Due to the suspensions in the Proclamation, certain hurricane related claims are temporarily prevented from being charged against employers, and certain requirements that unemployment claimants register and search for work (although claimants must still be able and available to work) are suspended. In addition, the one-week waiting period for claimants is suspended, allowing claimants to begin receiving benefits immediately. Further, claimants are temporarily relieved from avoiding certain disqualifiers before receiving benefits. Usually a claimant could be disqualified for: leaving his previous employment without “good cause” or being discharged from his prior employment for “misconduct”. These disqualifiers are temporarily suspended. Additionally, under the usual rules, if during the time period being applied for the claimant has already received or is receiving: wages, workers compensation remuneration, or receives payment for vacation time, severance pay, or dismissal pay then the claimant would normally be prevented from recovering unemployment payments during the time period corresponding with the payments being received, however, under the Proclamation these disqualifiers are temporarily suspended.

The Proclamation also contains a provision requiring hotels, motels, and other places of lodging to prioritize lodging for first responders, healthcare workers, and other individuals performing emergency related tasks.

These provisions expire on September 24, 2021 as written.

The following is prepared by the Kean Miller LLP Utilities Regulation team on important topics affecting consumers of electrical power in Louisiana related to recent and current proceedings of the Louisiana Public Service Commission (“LPSC”).  For more information, please contact us at client_services@keanmiller.com

Entergy Formula Rate Plan (“FRP”) Extension: In May 2021, the LPSC approved an extension and modification of Entergy’s FRP for annual filings and rate adjustments in 2021, 2022, and 2023, subject to settlement terms reached by Entergy, LPSC Staff and intervenors.  The settlement terms included, among other things: a 9.50% ROE; a $63 million rate reset for 2021; a 9.0-10.0% earnings bandwidth subject to a $70 million cumulative rate cap for 2022/2023; resolution of lost revenue claims from covid and hurricanes; a distribution investment cost recovery rider; and a transmission investment cost recovery rider.

 Entergy Storm Restoration Cost Securitization and Recovery:  Proceedings are underway at the LPSC to consider Entergy claims for securitization financing and recovery for $2 billion of restoration costs from Hurricanes Laura, Delta, Zeta and Winter Freeze Uri.  By category, the costs consists of approximately 72% Distribution, 27% Transmission and 1% Generation.

LPSC Audit of Additional Fuel Adjustment Costs From Winter Freeze Uri: Audit proceedings are underway at the LPSC on $163 million of additional fuel adjustments costs incurred during the February 2021 freeze event.  The $163 million additional costs are currently being recovered from ratepayers through the fuel adjustment, amortized over the months of April-August 2021.

LPSC Rulemaking on Demand Response: In May 2021, the LPSC approved a new rule that emphasizes the importance of Demand Response in Louisiana and requires electric utilities to pursue Demand Response tariffs or justify why they are not.

Entergy Market Value Demand Response (“MVDR”) Tariff: In September 2020, the LPSC approved a new Entergy tariff that allows customers and aggregators to access MISO Demand Response products.

Entergy Proposed Experimental Interruptible Option (“EIO”) Tariff: In July 2021, the LPSC approved new Entergy tariffs that provide interruptible rate options for industrial customers.

LPSC Rulemaking on Customer-Centered Options:  The LPSC has a proceeding underway to research and evaluate customer-centered options.  In the proceeding, an industrial customer trade association – – the Louisiana Energy Users Group (“LEUG”), has proposed an Industrial Customer Market Option that would provide access to off-site CHP generation, the bilateral wholesale power market and the MISO energy, capacity and operating reserve markets.  LEUG proposes the option as a means to offset some of the need for Entergy to replace aging generation fleet, and thereby help avoid or reduce costs for all ratepayers, while also helping industrials maintain competitive rates in Louisiana.

LPSC Rulemaking on Renewable Generation Options:  The LPSC has an ongoing rulemaking proceeding to consider customer options to access renewable generation.  In the proceeding, an industrial customer trade association – – the Louisiana Energy Users Group (“LEUG”), has proposed tariff options for industrial customer participation in renewable projects through “sleeve transactions” and “virtual PPAs”.

Louisiana Task Force on Climate Change: Through participation in the Power Production Committee, an industrial customer trade association – – the Louisiana Energy Users Group (“LEUG”) is pursuing interests that include long-term reliable and competitive power supply for Louisiana, exploring access to renewable power, and use of cogeneration to increase efficiencies and reduce emissions.

Entergy Proposed Green Pricing Option (“GPO”):  Proceedings at the LPSC are underway to consider an Entergy application seeking approval of new tariffs for the sale of Renewable Energy Credits (“REC”s).

Entergy Proposal for Distributed Generation: Proceedings at the LPSC are underway to consider an Entergy application seeking approval to deploy 120 MW of utility-owned distributed natural gas fired generation ranging in size from 100 kW to 10 MW, including a rate schedule to charge host customers for a portion of the generators as back-up power costs.

LPSC Rulemaking on New Generation Deactivation Transparency Rule:  In October 2018, the LPSC issued a rule which requires electric utilities to report generation unit deactivations and retirements 120 days prior to implementation, including support for the decisions and continuing reports on units that are placed in deactivation status for possible return in the future. The final rule creates more transparency and accountability on the part of utilities.

Entergy Integrated Resource Plan (“IRP”):  The next Entergy IRP process is scheduled to begin in October 2021.  In October 2019, the LPSC approved an acknowledgment that Entergy completed the required process for its IRP for the years 2018 through 2038.  The objective of the IRP process is for the utility to provide its evaluation of a set of potential resource options that offers the most economical and reliable approach to satisfy future load requirements of the utility. However, the IRP process does not result in LPSC approval of the proposed resource plan or approval of construction or acquisition of any particular resources. Rather, LPSC consideration of resource approvals occurs in separate certification proceedings on individual proposals submitted by the utility on a case-by-case basis.

Entergy 980 MW Power Plant in St. Charles Parish:  In December 2016, the LPSC approved Entergy’s proposal to construct a 980 MW CCGT unit located in Montz, Louisiana (near New Orleans), at a site adjacent to the existing Little Gypsy generation units.  The project was selected as a self-build project in a Request-for-Proposals (“RFP”), was estimated to cost $869 million, and went into service in 2019.

Entergy 994 MW Power Station in Lake Charles, Louisiana:  In July 2017, the LPSC approved Entergy’s proposal to construct a 994 MW CCGT unit located in Westlake, Louisiana.  The project was selected as a self-build project in a Request-for-Proposals (“RFP”), was estimated to cost $872 million, and went into service in 2020.

Entergy 361 MW Combustion Turbine in Washington Parish:  In May 2018, the LPSC approved Entergy’s acquisition of the Washington Parish Energy Center, a new 361 MW simple cycle combustion turbine (“CT”) to be constructed in Bogalusa, Louisiana by a subsidiary of Calpine Corporation (“Calpine”) for a purchase price of approximately $222 million.  Calpine had submitted an unsolicited offer to Entergy to construct the CT and sell it to Entergy for a turn-key price.  The acquisition and related assets was estimated to cost $261 million, and the unit went into service in 2020.

Trippe Hawthorne, a partner, and construction lawyer at Kean Miller, was a featured author for the American College of Real Estate Lawyers (ACREL), where he wrote on the subject of contractors and what it means to be licensed, insured, and bonded. Many property owners see this nomenclature in marketing and promotional materials for General Contractors, but may be unclear as to what it all means.

With the aftermath of Hurricane Ida, being educated on the nuances of these designations are of critical importance to both the property owner and the contractors.

Following is the full-text of the article, originally published in the August 2021 issue of the ACREL News and Notes monthly newsletter.

Every property owner who has endeavored to undertake a construction, renovation, or repair project has heard or seen the phrase “licensed, bonded, and insured”. But what does this mean, and does it really matter? Like all good questions, the best answer is, “it depends”.

Licensing: Many but not all states require contractors to be licensed. If the project is in a state where a contractor’s license is required, the importance of observing the licensing laws is critical. Violations of state licensing law can have catastrophic consequences to the unlicensed contractor and to the project. While owners do not typically have direct liability for a contractor’s violation of state licensing law, a project employing unlicensed contractors is subject to being shut down by licensing board investigators and authorities, which will undoubtedly cost the owner significant time and money. Also, it is generally the case that where a license is required for a particular type of work, a contract for such work with an unlicensed person may be subject to nullification.

The licensing process varies from state to state, but it is generally structured to require proof that a contractor has basic financial, business, and technical competency to perform the work for which the license in a particular classification has been issued in a responsible way. Technical competency is typically addressed through testing and/or required levels of experience in the specific area for which the license is sought. Many states have a tiered or subdivided contractor license system under which the state’s requirements for licensing are differentiated based on the monetary value of the contractor’s contracts and/or the type of services the contractor offers. Contractors that are licensed for large commercial construction contracts may hold a different type of license than subcontractors who are not dealing directly with owners, or contractors that only perform residential construction or home remodeling. Contractors and subcontractors performing inherently dangerous work which can threaten life, health, and safety (such as plumbing or electrical work) might need still other types of licenses.

Financial and business competency and viability is typically addressed through minimum asset requirements, examination of basic financial records, and background checks. The background checks may be for the licensed contractor and its key employees and agents, and will include review for things like bankruptcies or unsatisfied judgments.

The structure and purpose of most state contractor licensing systems is to ensure basic competency and basic levels of financial stability. State licensing requirements help create, identify, and illuminate the channels available to customers, creditors, and the government to hold a contractor accountable, particularly where there is a public threat to life, health, or safety. Nevertheless, a contractor’s ability to obtain a license should not be overvalued, particularly with regard to competency, and state licensing law is generally of little help to owners in the event of a contractual dispute with a licensed contractor. A license (where required) is the bare minimum that any responsible contractor needs before they begin to accept contracts.

Bonded: While, as discussed below, traditional insurance is not intended to guarantee a contractor’s performance under a construction contract, certain types of surety bonds are. “Bonded” means that a surety will stand behind the contractor for some obligation owed by the contractor. The surety guarantees some aspect of the contractor’s performance to someone. The key questions then are “what performance has been guaranteed” and “to whom”?

Generally, when the words “licensed, bonded, and insured” are used in an advertisement for a contractor, the word “bond” generally refers to a license and/or permit bond. This license and/or permit bond guarantees that the contractor will abide by the terms of the license issued and/or the permit they have pulled, protecting some or all of the licensing board, the public works department, the owner, or the general public. The existence of and requirements for obtaining a license and permit bond vary greatly by state, county, or municipality. In the event of a troubled contractor, though, the proceeds of these bonds are likely to be claimed by a number of different people, and the amount of the bond may not be likely to be sufficient to cover the contractor’s liabilities. In other words, while it could be nice that a bond of general applicability exists, owners should not place any reliance on such a bond in their decision-making process.

For a significant project, the owner will want to dictate the terms and conditions of the bond and have it dedicated to the project and that particular owner. Typically, this is done through a “payment and performance bond” issued for a specific project. The payment bond guarantees payment to subcontractors, material suppliers, laborers, and others that have worked on the project, and who may have lien rights against the owner. The performance bond generally serves as a guarantee by the surety to the owner that the contractor will perform the work pursuant to the terms and conditions of the contract. The performance bond does not entitle the owner to anything more than is owed under the construction contract, but does provide security that the project will be completed for the contract sum, even if not by the contractor.

Insurance: Whether a contractor is “insured” may be the most important or least important part of the trio, depending on the risk at issue. Insurance is the most valuable tool in protecting against the risks to third parties created by a construction project, but is not particularly useful in protecting the owner for its own damages caused by the contractor’s breach or bad work.

The most common risks addressed by a contractor’s liability insurance include property damage, injuries, and workers’ compensation claims. Many states’ contractor licensing laws require a minimum amount of general liability and workers’ compensation insurance in order to obtain and maintain a license. Liability and worker’s compensation insurance is important to protect owners from claims by third persons arising out of or related to their project, and insurance for these claims is of critical importance if they arise. While an owner can ascertain and determine a contractor’s available insurance through review of an insurance certificate supplied by the contractor’s insurance agent, for more significant projects, the owner will want to be added as an “additional named insured” to the contractor’s liability insurance policies and ensure that the available insurance has appropriate coverage and limits for the work at issue, and will defend the owner and contractor in the event of a claim.

While a contractor’s liability insurance may protect the contractor and even the property owner from claims for damages to third parties arising out of the project, it is not intended to protect the owner against breach of contract by the contractor or bad workmanship. In other words, “insured” means that a contractor has insurance to protect against risks to people other than the owner, and it is not likely to protect the owner from the owner’s own damages that may arise out of or relate to the project.

Construction projects also typically involve different types of property insurance, ranging from the owner’s property insurance policy or program to a builder’s risk policy, which protects the project and the materials and component parts thereof while the work is incomplete.

It’s important to understand the difference between being bonded and insured. For a contractor, one of the biggest differences between insurance and bonding is which entity takes on the risk; an insurance policy transfers the risk to the insurer, while a bond ultimately keeps the risk with the bonded contractor. For an owner, the main difference is in which types of circumstances are covered by bonds versus which are covered by insurance. Bonds should generally be associated with the Contractor’s performance of its obligations under the contract, whether to perform the work, or to pay subcontractors and material suppliers. Insurance should be associated with personal injury or property damage, typically to third parties.

The cost of licensing and insurance for a contractor is typically a general cost of doing business, while the cost of a project specific bond is… project specific. So, for projects where cost is a key factor (are there any where it is not?) many times, eliminating bonding requirements is a way to reduce project costs.

Surety bonds protect the interests of the project owner and ensure that the projects are completed correctly, securing the completion of the job and the security of the owner’s investment. Many surety bond companies won’t issue a bond without having sufficient security from the contractor and unless the contractor is sufficiently insured. If an incident occurred, causing property damage or personal injury, the surety would want to be confident that the contractor’s insurance would protect the continued viability of the contractor and its ability to complete the project, which the surety has guaranteed.

From a planning perspective, knowing that a contractor is “licensed, bonded, and insured” is certainly better than hiring a contractor that is not licensed, is not insured, and can’t get a bond, but prudence will always suggest consideration of the requirements and ramifications of the particular project, and at least some analysis of whether the protections offered by this contractor for a particular project are appropriate and sufficient.

To our clients, families, and friends – Our hearts go out to those affected by Hurricane Ida, including the attorneys and staff in our law firm.  We will stand with you in the coming weeks and months. The communities where we live and work are resilient and resourceful, and the people within our law firm are as well.  Whether we are helping our neighbors, serving our clients, or lending a hand to the less fortunate, we remain committed to a robust regional recovery of which we can all be proud.  We have learned much over the past fifteen years, from hurricanes Katrina to Gustav, and from the 2016 floods to the global pandemic.  Those lessons will serve us well as we navigate this new challenge, working in our office, or remotely. 

 Attorneys in our New Orleans office will be working remotely while the city grapples with the aftereffects of Ida. Our other office locations in Louisiana and Texas stand ready to support them, and our clients, as usual.  Thank you for the messages of hope and concern from around the country and around the world.  Your words of concern and comfort are meaningful and appreciated.

 Please do not hesitate to contact me if you have questions, suggestions, or for opportunities to assist those impacted by this natural disaster. 

 Linda Perez Clark
Managing Partner

The Louisiana Department of Natural Resources (LDNR) has issued an Emergency Use Authorization to permit certain activities necessary to address the impacts of Hurricane Ida that would normally require a Coastal Use Permit to be issued before the work.  This applies only within the Louisiana Coastal Zone. It is intended to complement the emergency use provisions of LAC 43:I.723.B.3.  Keep in mind that a Coastal Use Permit is not required for “normal maintenance or repair of existing [previously permitted] structures including emergency repairs of damage caused by accident, fire, or the elements,” pursuant to LAC 43:I.723.B.1.a.iii. However, if the repair goes beyond the normal repair of an existing structure, such as dredge or fill activities or construction of a new or expanded structure, then a permit may be required.  This emergency authorization,  however, allows the work to proceed immediately to be followed later by an after-the-fact permit.  The authorization for emergency work applies ONLY to those activities needed to restore infrastructure. Infrastructure is defined in LAC 43:VII.701 as “those systems which provide needed support for human social institutions and developments, including transportation systems, public utilities, water and sewerage systems, communications, educational facilities, health services, law enforcement, and emergency preparedness.”  This would include dredge or fill activities or other similar activities needed to address damages to docks, power lines, pipelines, drainage systems, and the like.

The LDNR authorization “reminds all emergency users to avoid and minimize impacts resulting from the activities authorized by this notice to coastal resources where possible, since compensatory mitigation for these impacts will most likely be required [if an after-the-fact permit is required].” LDNR requires the person responsible for the work to provide the department with notification via letter, email, or fax as soon as possible (preferably before or as soon as the work commences).  The notification should include: the name of the entity undertaking the activity,  a description of the work performed, a vicinity map showing the location of the emergency work, and project coordinates (latitude/longitude) if available.

The LDNR Coastal Use Emergency Authorization is currently effective only through September 3, 2021; but LDNR may extend it. See the authorization and fax, email, and other information at: http://www.dnr.louisiana.gov/assets/OCM/PublicNotices/PN_2021/ida.pdf.

The United States Army Corps of Engineers (USACE) has also announced special emergency permitting procedures for permits required by Section 404 of the Clean Water Act to expedite authorization for activities for response and recovery associated with Hurricane Ida damages.  The emergency permitting procedures are authorized by 33 C.F.R. 325.2(e)(4). The USACE directs an applicant for an emergency permit to “provide basic plans/ drawings summarizing the emergency situation, briefly describing the proposed work and location, and an estimate of the acreage of waters and/or wetlands to be impacted, preferably via email.  For work in the Louisiana Coastal Zone (LCZ), applicants must also submit this information to the LDNR, Office of Coastal Management (OCM).  The USACE will make a decision on the permit within 24-48 hours of the request.  Approvals will be granted via Programmatic General Permit if the project is located in the LCZ or USACE New Orleans District MVN General Permit No. 20 if the project is located outside the LCZ.  A link showing the terms of the Programmatic General Permit and the MVN General Permit No. 20 is available at: https://www.mvn.usace.army.mil/Missions/Regulatory/Permits/General-Permits/.

Because emergency authorizations under either the Programmatic General Permit or MVN General Permit No. 20 are temporary,  the permittee will be required to submit a site restoration plan or an after-the-fact permit application to maintain the work, within 30 days after the emergency permit approval.   For more information and USACE contacts, see: https://www.mvn.usace.army.mil/Missions/Regulatory/

Victims of Hurricane Ida now have until January 3, 2022, to file various individual and business tax returns and make tax payments.  The relief applies to taxpayers in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance.  Currently, this relief applies to the entire state of Louisiana but other Ida-impacted localities in neighboring states may be added.

The relief postpones various tax filing and payment deadlines that occurred starting on August 26, 2021.  This means that individuals who had a valid extension to file their 2020 tax return by October 15, 2021, will now have until January 3, 2022, to file those returns.  However, the relief does not extend to the payments owed on those returns as those payments were due prior to August 26.  The relief also extends the time to pay the quarterly estimated tax payments due on September 15.

Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the disaster occurred (the 2021 return normally filed in 2022) or the return for the prior year (2020) which may allow a taxpayer to benefit from a refund sooner.  Taxpayers should use the FEMA declaration number 4611 for Hurricane Ida losses in Louisiana when claiming a loss.

More information about the various returns and taxes that are extended by this announcement can be found on the IRS disaster relief page: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

At the request of Louisiana Governor John Bel Edwards, President Joseph Biden declared that a “major disaster” exists in much of south Louisiana due to damage caused by Hurricane Ida. One consequence of this declaration is that businesses, cooperatives, and non-profit agencies operating in the “major disaster” area are eligible to apply for low-interest loans from the Small Business Administration (SBA).  Homeowners in the major disaster area with damage not covered by insurance are also eligible to apply for a loan from the SBA loan to assist with the cost of home repairs.

The SBA offers disaster-related loans to businesses: (1) to repair physical damage to a business; (2) to assist with economic injury (e.g., a business that has lost revenue but has ongoing expenses); and (3) to assist a business whose essential employee(s) is a military reservist called to active duty.  The SBA also offers disaster-related loans to individuals for the cost of making disaster-related repairs to their primary residence or to replace personal property destroyed in the disaster (if insurance is not available).

You can learn more about SBA disaster loans here, and begin the application process here. Importantly, SBA disaster loans are loans, not grants; they must be repaid. The interest rates and repayment terms for SBA disaster loans are better than many borrowers would be able to obtain from commercial lenders. According to the SBA’s Disaster Declaration Fact Sheet for Hurricane Ida, currently located here, the interest rates for the more popular SBA disaster loans are as follows:

For Physical Damage:

  • Homeowners with Credit Available Elsewhere 3.125
  • Homeowners without Credit Available Elsewhere 1.563
  • Businesses with Credit Available Elsewhere 5.710
  • Businesses without Credit Available Elsewhere 2.855
  • Non-Profit Organizations with Credit Available Elsewhere 2.000
  • Non-Profit Organizations without Credit Available Elsewhere 2.000

For Economic Injury:

  • Businesses & Small Agricultural Cooperatives without Credit Available Elsewhere 2.855
  • Non-Profit Organizations without Credit Available Elsewhere 2.000

Businesses and individuals in the following Louisiana parishes are currently eligible for Physical Damage and Economic Injury loans: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Saint Bernard, Saint Charles, Saint Helena, Saint James, Saint Martin, Saint Mary, Saint Tammany, St. John the Baptist, Tangipahoa, Terrebonne, Washington, West Baton Rouge, West Feliciana.

Businesses and individuals in the following Louisiana parishes are currently eligible for (only) Economic Injury loans: Avoyelles, Concordia, Lafayette, Saint Landry, Vermilion.  Businesses and individuals in the following counties in Mississippi are also currently eligible for (only) Economic Injury loans: Amite, Hancock, Marion, Pearl River, Pike, Walthall, Wilkinson.

Contact author and attorney, Eric Lockridge, with questions concerning this blog post and the content within.

With increasing optimism regarding offshore wind energy and commercial solar power, renewable energy projects are starting to gain steam with Louisianians. Although utility-scale solar projects are novel in Louisiana, Act 301 (formerly Senate Bill 185) proactively addresses the concerns of taxpayers, landowners, and developers concerning solar leases.

Act 301, which was signed into law by Governor Edwards on June 14, 2021 and takes effect on August 1, amends two provisions of Louisiana Revised Statute § 30:1154, requiring the secretary of the Department of Natural Resources (DNR) to develop regulations governing solar leases. The Act tasks the DNR with promulgating minimum requirements for maintenance of property during a lease, including establishing minimum spacing between installations and setbacks, as well as decommissioning and final site closure upon termination of a lease.[1]

Although Act 301 aims to proactively mitigate future issues with solar farm decommissioning, the legislation likely has little bearing on residential use of solar devices on private property, as the Act clarifies that the development, installation, or operation of solar devices installed on private property for residential use may not be precluded by the DNR secretary.[2]

[1] https://www.legis.la.gov/legis/ViewDocument.aspx?d=1235566

[2] https://www.legis.la.gov/legis/ViewDocument.aspx?d=1235566

As part of an ongoing investigation led by the Delaware Attorney General’s Office into the potential environmental impacts of legacy industrial activities in the state, Delaware has reached a $50 million settlement agreement with DuPont Co., Corteva, and the Chemours Co. for alleged damages resulting from these companies’ use of chemicals called PFAS.

Dubbed the “forever chemical,” per- and polyfluoroalkyl substances, or PFAS, are a large group of synthetic chemicals that includes perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), and GenX Chemicals.[1] PFAS are ubiquitous, having been manufactured and used worldwide since the 1940s in a number of different products, such as non-stick cookware, water-repellent clothing, coatings for paper used in food packaging, stain-resistant fabrics and carpets, and other products that resist grease, water, and oil. Certain studies have found that PFAS may be associated with a range of adverse health impacts including developmental and reproductive problems, increased risk of cancers in the liver and kidney, thyroid disease, asthma, and immunological effects. The most common PFAS exposure routes are through ingesting food, drinking water, and inhaling dust and particulates.

DuPont, Corteva, and Chemours have agreed to collectively pay $50 million to resolve their alleged responsibility for elevated PFAS levels in the waterways and groundwater of all three counties in Delaware.[2] Under the settlement agreement, DuPont and Corteva will each pay $12.5 million, while Chemours will pay $25 million. The companies will fund up to an additional $25 million if they settle similar claims with other states for more than $50 million in the next eight years.[3]

PFAS litigation has expanded significantly in recent years. The widespread use of these chemicals could implicate liability for companies and products in a variety of industries. For instance, DuPont, Corteva, and Chemours committed $4 billion at the start of the year to cover alleged liabilities for their past use of PFAS and recently agreed to pay $83 million to settle multidistrict litigation in Ohio over PFOA.[4] In 2018, the 3M Company settled with the State of Minnesota for $850 million for alleged damages to drinking water and natural resources as a result of supposed PFAS contamination.[5]

The arrival of a new presidential administration, which promised to focus on PFAS regulation and has appointed key government officials with experience in dealing with PFAS issues, is expected to coincide with and potentially enable an expansion in the volume and scope of both regulation and litigation. Companies whose operations and products use, or historically used, any PFAS would be well-advised to consider strategies to evaluate, address, and mitigate legal risks and potential litigation.

The author would like to thank summer law clerk, Olivia Guidry, for her work in developing and preparing this blog article. 

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[1] EPA, Basic Information on PFAS, https://www.epa.gov/pfas/basic-information-pfas (last visited July 14, 2021).

[2] Delaware Department of Justice, State Resolves Natural Resource Damage Claims, Delaware.gov (July 13, 2021), https://news.delaware.gov/2021/07/13/state-resolves-natural-resource-damage-claims/.

[3] The $50 million settlement will go to the Natural Resources and Sustainability Trust, which will fund purification of drinking water; restoration of natural resources; environmental sampling and testing for PFAS in the ground, water, and air; research and development focused on PFAS; and community environmental justice and equity grants.

[4] Jef Feely, Tiffany Kary, & Tony Robinson, Dupont, Chemours in $4 Billion ‘Forever Chemicals’ Cost Pact, Bloomberg (Jan. 22, 2021 9:24AM), https://www.bloomberg.com/news/articles/2021-01-22/dupont-and-chemours-in-4-billion-forever-chemicals-cost-pact.

[5] Minnesota 3M PFC Settlement, https://3msettlement.state.mn.us/ (last visited July 14, 2021).