Copyright Infringement Claims for Alleged Copycat Design & Construction

Thursday, October 17th, 2013

When we think about copyright infringement, most often we think about someone copying some or all of a book or article. In the construction arena, an ever-evolving and seemingly more disputed copyright issue arises in claims related to the concept and design for buildings, including high-end homes. Recently, a custom home designer/builder (we’ll refer to that as the Plaintiff Designer) sued several defendants, including a husband and wife homeowners (we’ll refer to them as the Homeowners) in federal court in Norfolk for violations of federal copyright law. The Plaintiff Designer also sued the design firm that ultimately designed a Georgian-style house for the Homeowners, and the construction company that built the house.

At the heart of the complaint by the Plaintiff Designer was that the Homeowners had toured a model of a certain style of house that the Plaintiff Designer had copyrighted, and later had another firm design a house substantially similar to the copyrighted one. In an opinion issued in late September, the district court judge granted summary judgment in favor of all of the defendants in a lengthy opinion.

From the court’s opinion, there are several key issues that affect construction copyright issues in Virginia going forward:

• This can be a complicated area of the law factually. In this case, there were a number of factors that complicated the court’s analysis. One major factor was that the copyrighted house and the one the Homeowners had built were both in the same subdivision, which had strict subdivision design requirements. Further, both the copyrighted house and the one the Homeowners built were Georgian-style, which necessarily meant there were similar features. The court’s analysis had to spend much time reviewing the nature of the Georgian style, and how the subdivision’s policies on exterior improvements factored into the competing designs. In the end, the court recognized that there were many houses within the subdivision that resembled each other to a substantial degree.
• Getting your work copyrighted early on is a head start, but not the final solution. Having been involved in a few of these cases over the years, it is a huge head start for a design professional to have taken steps through the federal Copyright Office to obtain a Certificate of Copyright. With such a certificate there is a presumption of originality in favor of the holder. But, because the copyright office does not perform an analysis of the originality, the federal court in this case emphasized that the presumption is “fairly easy to rebut.” The court also pointed out that the copyright only protects the “original” aspects of the copyrighted design.
• Access to the copyrighted materials is a pivotal issue. A major focus of the court’s opinion was whether there was a genuine issue of fact about the defendants having access to the copyrighted materials. It concluded that there was not a genuine issue raised by the Plaintiff Designer in opposition to the position of the subsequent designer and builder that they did not have sufficient “intermediate” access to the copyrighted plans. Once the court concluded that there was no evidence that the Homeowners sent any information about the copyrighted design to them, the court dismissed the case against the subsequent designer and builder.
• Substantial Similarity is a critical issue. The court’s analysis hinged on the fact that, in a circumstantial evidence-based case, the plaintiff must prove the original and subsequent designs are “substantially similar.” Again, the focus is on the original, protected features of the copyrighted work, and the ultimate design. In doing so, the court did not afford any protection to design elements that are “either indispensable or common to Georgian-style architecture.” As to the areas of the design that might be protected, the court concluded that there were a “few similarities and many differences” between the copyrighted design and the one used by the Homeowners, and issued summary judgment in favor of the Homeowners on that point.

With the amount of discovery that had taken place in this case, the number of pages consumed by the filings and opinion of the court, and the obvious vigor of the parties positions, an appeal by the Plaintiff Designer would appear to be on the horizon. Likewise, this is an issue that is getting attention nationally as to whether the law on these issues should be changed, as discussed in this ABA Intellectual Property article recently.

Guess Who Is Coming to Inspect Your Worksite?

Wednesday, October 16th, 2013

As part of an OSHA worksite inspection, who has a right to come onto your premises other than a federal OSHA inspector? Until recently, there were two possibilities. First, if the OSHA inspector determined there was “good cause” because of unique circumstances, a non-employee such as an industrial hygienist or safety engineer with specific expertise could be brought along. Second, if the workplace was unionized, then a union representative was allowed to accompany the OSHA inspector during the walk-around inspection. No one would ever have guessed that in a non-union worksite, an outside union agent might be permitted to accompany the OSHA inspector in a walk-around inspection. Well, that all changed in Spring 2013.

In an interpretation letter publicly released on April 5, 2013, OSHA announced for the first time that non-union employees have the right to be represented by a union representative when OSHA inspects a workplace, even if no collective bargaining agreement exists. It has always been true that an employee “personal representative” can file a complaint on behalf of the employees, and can request workplace inspections and participate in any informal conferences to discuss citations and challenge the abatement periods in citations if contested by the employer. However, in 2003, OSHA issued an opinion and stated that a non-employee who filed a complaint did not have the right to participate in a walk-around inspection connected to that complaint.

Now, ten years later, OSHA asserts its regulations explicitly allow walk-around participation by an employee representative who is not an employee of the employer when, in the judgment of OSHA, such representation is “reasonably necessary to conduct an effective and thorough physical inspection.” How did it reconcile this position with the 2003 opinion? First, OSHA pointed out that this earlier letter did not address the rights of workers at that facility without a collective bargaining agreement to have a representative of their own choosing in the inspection. Second, OSHA “withdrew” this 2003 opinion to avoid any “confusion.” In other words, the new Administration simply changed its mind.

As you might expect, this policy change is being hailed by labor unions, and could be used to their advantage during an organizing campaign. One big concern that arises from OSHA’s new interpretation is that if a union organizer is allowed on the premises, his presence will send a message to non-union employees that the union must have some real power beyond the control of the employer if one of its organizers must be let on company premises. This concern will be a particular issue if the union is attempting to mount a union organizing campaign or a campaign is actively underway.

Interestingly, this new interpretation appears to directly conflict with OSHA’s inspection regulations, Section 1903.8, which reads, in part, as follows:

(b) If there is no authorized representative of employees, or if the Compliance Safety & Health Officer is unable to determine with reasonable certainty who is such representative, he shall consult with a reasonable number of employees concerning matters of safety and health in the workplace.

(c) The representative(s) authorized by employees shall be an employee(s) of the employer …

The new interpretation raises many practical questions which are left unanswered, including:

• Who makes the determination that a representative is needed and/or that the individual selected is an “appropriate” employee representative?
• Do employees hold a vote for this representative, and does the selected “representative” have to receive a majority of employee votes at the facility?
• If one or more employees object to the person selected as a representative, does this objection void the selection?
• Do different groups of employees get to select their own representative?
• How many employee representatives can be present during an investigation?
• What rights do the non-employee representatives have during the inspection?

Given that this new “interpretation” conflicts with some of OSHA’s own regulations, an employer has a proper basis for objecting if a union organizer attempts to participate in an on-site OSHA inspection. It is critically important, however, that the company make it clear to OSHA that the company intends to cooperate with the inspection and will allow the OSHA compliance officer to conduct the inspection of its facilities, even though it intends to deny access to the union representative. At a minimum, you should ask the inspector why this union representative will be beneficial during the inspection, and require OSHA to articulate exactly why this particular individual should be allowed on your worksite. If a company refuses to allow the union representative on its premises, OSHA may choose to leave and seek a warrant. Should this occur, it will be important for the company’s lawyer to communicate with OSHA’s counsel to make it clear that OSHA is welcome to inspect and to explain that there has been a failure of any showing as to why a union representative would add any value to the inspection.

In analyzing the “explanation” to justify an “outsider” on company premises, OSHA’s recent letter suggests several ways that a third party could be “helpful”: (i) s/he brings special experience and skill in evaluating similar working conditions in a different plant, (ii) there are non-English speaking workers who want a representative who is fluent in their language and English in order to facilitate useful interactions with the inspector, and/or (iii) employees have expressed that they are not comfortable talking to OSHA without a trusted individual present.

Worksites where formal safety committees are in place may be less susceptible to the application of this new interpretation of OSHA’s walk-around inspection process. Under the OSHA Field Operations Manual, a safety committee can designate one of its members as a representative for the facility. If this situation exists and a representative is selected, it should make it more difficult for the OSHA inspector to recognize an outside union member as the representative. If your company does not have a safety committee already in place, it may be wise to consider establishing one to avoid having an “unwanted guest” as your selected representative for walk-around purposes.

For further information regarding the rights of an employer under OSHA or the National Labor Relations Act, contact David Paxton at 540.983.9334, or a member of Gentry Locke’s Employment or OSHA team: Todd Leeson, Brett Marston, Josh Johnson, and John Thomas.

What to Bring to Oral Argument

Friday, September 27th, 2013

I’ve been helping a few friends prep for their first oral arguments recently. It’s been a mutually beneficial exercise, because (1) it has forced me to think about what I do to prepare and why I do it, and (2) it reassured them that, if I can do this stuff, then anyone can.

Looking back on those conversations, though, I realized that I’d forgotten to give my friends one of the most useful pieces of information: What they should actually bring with them to the argument.

You see, if you argue enough appeals, you will eventually suffer every conceivable embarrassment and deprivation at the lectern. And you will learn from those experiences. As a result, I’ve come to stock my argument briefcase like a disaster-preparedness kit. Here’s what it usually contains:

• Argument Binder, with various outlines, modules, summaries, and questions.
• Joint Appendix
• Briefs
• 3 pens–one blue, one black, and one red. I like to take notes in different colors, and you never know when one of the pens will run dry or explode.
• Two notepads: One to record the court’s questions and the Other Guy’s answers, and one to make notes for my own argument.
• Key statutes, cases, and rules.
• If I’m in the Fourth Circuit, a binder with my notes on the judges (because there are a lot of them, and you don’t find out who will be on your panel before the day of argument).
• Sticky notes
• Hard candy
• Adhesive bandages. Because one time at the Fourth Circuit I needed a Band-Aid® and didn’t have any handy. (Pro tip: there’s a CVS across the street from the Fourth Circuit and convenient to the Supreme Court of VA.)
• Ibuprofen. Because one time at the Fourth Circuit, I did something to a nerve in my neck the night before an argument and couldn’t turn my head to the right without excruciating pain. This required me to adopt some downright Karloffian body language when addressing the judge on my right–a suboptimal persuasive technique, as his dissent proved. So, use what works for you.
• Lip balm. Because one time at the Fourth Circuit . . .
• Glasses. I use contacts in real life, but too much can go wrong on the day of argument. I’d probably swallow one while shaving and spend the whole argument squinting at the panel in monocular distress. Plus, I gain 10 IQ points and 5 years of gravitas when I wear glasses. So I go with them, and if you’ve read this far you’ve gotten the sense that I wouldn’t risk bringing just one pair. They might be stolen by beavers on the way to court.

So that’s what I bring to court. I could certainly get by with less, but why risk it? This helps me sleep at night. And lest you think I’m some kind of OCD outlier, David Frederick has a handy checklist in Supreme Court and Appellate Advocacy that includes most of these items, and some others as well.

Employers Have Until End of 2013 to Take Advantage of Veteran Tax Credits

Monday, September 23rd, 2013

Employers have until the end of 2013 to take advantage of tax credits for hiring qualified veterans.

The Work Opportunity Tax Credit (WOTC) is a tax credit offered private sector employers who hire individuals from certain targeted groups. These tax credits may range from between $1,200 and $9,600 per employee, depending on the target group of the new employee and the number of hours worked in the first year.

Although some categories of the WOTC expired in 2012, the American Taxpayer Relief Act of 2012 (ATRA) extended the WOTC for hiring certain workers through December 31, 2013. ATRA extended the WOTC for qualified veterans hired before Jan. 1, 2014, as well as several other targeted groups, including some recipients of government assistance.

All employers must obtain certification that an individual is a member of a targeted group before the employer may claim the WOTC. The process for certifying the veterans for this credit is the same for all employers.

How the Fourth Circuit Decides Whether to Award Oral Argument

Wednesday, September 4th, 2013

Depressing fact of the day: The Fourth Circuit hears oral argument in about 9% of the roughly 5,000 cases it considers each year.

For context, here’s the 2012 acceptance rate of each Ivy League school, according to Google:

• Harvard: 5.9%
• Yale: 6.8%
• Columbia: 7.4%
• Princeton: 8.5%
• Brown: 9%
• Dartmouth: 9.8%
• Penn: 12.3%
• Cornell: 16.2%

So basically, the chance of the Fourth Circuit granting oral argument in any given case is about as good as the chance of a mid-tier Ivy granting admission to any given applicant. Only the very best, cream-of-the-crop cases evidently merit that consideration.

But what does that mean? What metric does the court employ to decide which cases warrant argument?

Deena Jo Schneider has a terrific article in the current Appellate Issues that sheds some light on these questions.

Schneider moderated a panel on oral argument at the ABA’s mid year meeting. Her panelists included Roger Townsend, Justice Elizabeth Lang-Miers of the Texas Fifth District Court of Appeals, and Judge Andre Davis of our very own United States Court of Appeals for the Fourth Circuit. For your benefit, I have summarized some highlights from Schneider’s article below.

As if she were reading my mind, Schneider asked Judge Davis what determines whether a case receives oral argument. He responded that the Fourth Circuit hears far fewer cases today than it did when he clerked there. When Judge Davis joined the court, he thought that he would place more cases on the oral argument docket. But now, three years into his term, he’s concluded that the court effectively screens cases for oral argument, generally picking only those cases where the benefit of argument exceeds its cost.

Judge Davis explained that while counsel may request or disclaim argument, the ultimate decision rests with the court. Any judge on a panel can put a case on the oral argument calendar. The other judges then decide whether they want to remain on the panel. Staff attorneys work up the cases that don’t make the oral-argument cut.

Schneider followed up, asking Judge Davis what factors play into the decision to grant oral argument. He responded:

• Cost. The court’s overall reversal rate in civil cases is in the low single digits. Judges are reluctant to impose the financial cost and stress of oral argument on parties when the outcome of a case seems clear.
• Stakes. The single-judge opt-out process sometimes allows argument to be granted even in relatively clear-cut cases when the stakes are high, or when the parties are unlikely to be concerned with costs. Argument is also generally granted when a case involves a serious question of criminal or constitutional law.
• Gap-Filling. The court is putting more cases on the calendar to fill gaps in Fourth-Circuit jurisprudence that result from the years during which the court was short-staffed.

With regard to his personal practice, Judge Davis said that he votes to hear oral argument “when there is a plausible argument that what the district court did constitutes reversible error.”

While that “reversible error” standard for granting oral argument isn’t terribly helpful, the rest of this information is useful. The federal rules allow any party to file a statement as to why oral argument should or should not be permitted. Fed. R. App. P. 34(a). There’s no reason not to include such a statement in your brief; it doesn’t count toward the word limit, Rule 32(a)(7)(B)(iii), and may help sway the court–especially if it is targeted to factors such as the importance of the legal issues and any evident gaps in Fourth Circuit jurisprudence.

What Should an Employer Say (If Anything) in a Termination Letter?

Wednesday, August 14th, 2013

As a management employment lawyer, I am often asked to provide legal advice to a Virginia company as to a termination decision. If the company decides to terminate an employee, we typically then discuss how the decision will be communicated, including whether the company should notify the employee in writing.

As a general proposition, a Virginia employer is not legally obligated to provide the employee with written notice of a termination decision. Some employers, however, prefer to do so. In addition, sometimes the employee will not be returning to the employer’s premises—in such a case, a termination letter is necessary. The question then becomes how much information the employer should include. This article provides some practical recommendations.

1. You should never write a termination (or any other) communication when you are upset or angry. In the high profile criminal prosecution of George Zimmerman in the Trayvon Martin case, there were also personnel issues that garnered publicity. Most notably, on Thursday July 11, 2013 (as the jury deliberated in the criminal case), a managing director in the Florida State Attorney’s Office had a six-page single-spaced termination letter hand-delivered to Ben Kruidbos, who had been serving as the Director of Information Technology. (Kruidbos had surmised that the State had not disclosed certain electronic evidence to the defense. He obtained his own counsel for advice who subsequently informed the defense of the evidence. This led to a pre-trial hearing in which Kruidbos was compelled to testify.) After recounting the chronology and facts as to Kruidbos’ performance from the State’s perspective, the termination letter included the following language:

Your egregious lack of regard for the sensitive nature of the information handled by this office is completely abhorrent. You have proven to be completely untrustworthy. Because of your deliberate, willful, and unscrupulous actions, you can never again be trusted to step foot in this office. You have left us with no choice but to terminate your employment.

Wow! I am not going to opine as to whether or not the State of Florida should have fired Mr. Kruidbos. In my judgment, however, the State should not have gone into such detail or used such an emotional tone that concluded with the words quoted above. Simply stated, it is generally not a good idea to write with such strong emotion.

2. How much detail should an employer include? Another danger with “telling the whole story” is that you might miss a fact or not have all of the facts. It is for these reasons that I generally prefer a much more succinct approach. Bear in mind also that the employee should be well aware of the reason for his termination. To this end, I prefer language along these lines:

As you know and as we have discussed, we have determined that you have engaged in conduct in violation of company policy. Accordingly, we have decided to terminate your employment for performance reasons effective immediately. Thank you for your service. We wish you the best.

Some may argue that this language is too vague. I would rather see language like this, however, as opposed to lengthy or detailed letters that are more susceptible to errors.

3. If you say it, it must be true. While it may be stating the obvious, if you are going to articulate a fact or reason supporting the termination decision, it must be true. As a classic example, do not characterize a termination as a “layoff” or “restructuring,” if the real reason is performance. In addition, if there are other persons in the organization who are memorializing the termination decision, make sure that person knows the reason(s) for the termination and how it will be characterized or memorialized. For example, some companies have internal forms that they use to “code” the reason for termination. In addition, employers are often asked to complete forms for the Virginia Employment Commission as to the reason for termination. The company must be consistent and accurate in memorializing the termination decision.

4. But Todd, who writes letters anymore? If you are not able to convey the decision in person, then the question arises as to how to convey the termination decision. In such a case, I remain a fan of an old-fashioned letter, by regular U.S. Mail, to the employee’s last known address. Conversely, I would not recommend notifying the employee of his termination by text message. If you have a personal email address for the employee, I am okay with a short email that attaches the letter (which will also be mailed).

In sum, employers should not feel compelled to provide a terminated employee with a letter. If you do so, you must be exceptionally careful as to the content of any such communication, as well as the content of any other communications by others within the company.

Deal…or No Deal? Identifying and Addressing Gray Areas in Construction Contracting

Friday, August 2nd, 2013

This article, co-written by Gentry Locke attorneys Brett Marston, Spencer Wiegard, Josh Johnson, and Abigail Murchison, was published in The Construction Lawyer, Journal of the ABA Forum on the Construction Industry, Volume 33 No. 3 (Summer 2013).A version of this article with a Virginia focus first appeared in 2006. See K. Brett Marston and J. Barrett Lucy, “Deal or No Deal? Clarifying Gray Areas in Construction Contracting,” Virginia Lawyer, Vol. 55, No. 3 (October 2006).

>>> Viewed the published article here.

Following are section headings from the article:

“Let’s Make a Deal… to Make a Deal.”

One of the murkiest areas of construction contracting surrounds the back-and-forth between general contractors and subcontractors on and just after bid day. Subcontractors bidding on a particular scope of work on a project often submit their price quotation, or quotes, to more than one general contractor. For every subcontractor, there is a different quote document, containing differing verbiage. Those quotes are often transmitted a very short time before the general contractor has to compile quotes from many subcontractors with its own numbers to submit a bid for the overall project. General contractors may even communicate with representatives from particular subcontractors about the contents and viability of the quote. With their bid submissions, general contractors often have to list the subcontractors they intend to employ if successful in obtaining the contract.

• The General Camps of State Decisions
• Reasons General Contractors Do Not Recover
• Policy Considerations
• Letters of Intent
• A Handshake…and a Prayer
• Does an Agreement Exist if at Least One Party Has Not Signed?
• What are the Terms of the Agreement?
• Acceptance of Terms by Doing the Work
• What if There is no Agreement, Written or Unwritten, Between the Parties?
• Change Order Two-Step: Enforceability of Unsigned Change Orders in Private Contracts
• Various Theories of Recovery
• Varying Thresholds of Proof
• Typical Fact Patterns
• Conclusion

While it is easy to identify these issues and predict that they will continue to occur for as long as there are construction projects, it is more difficult to predict their outcomes and to fully prepare clients to perform preventative maintenance. The details of the conversations, directions, promises and “deals” all factor into the analysis of whether there is a binding agreement and what the terms are. Communication and documentation of a party’s understanding is essential to trying to establish whether there really is “a deal . . . or no deal.”

When Should Contractors Not File a Claim?

Monday, July 22nd, 2013

Although construction lawyers pursue claims for their clients everyday, there are times when a contractor should not file a claim.

A construction claim can provide a contractor with its fair compensation and most of the time pursing a valid claim is a contractor’s best course, but there are situations where it does not make good business sense – even when the claim is a strong claim. There are times when it makes more sense for a contractor to cut bait.

The following list shows why it is important to be careful in thinking about claims from the beginning and throughout a project. Many of the reasons not to file a claim can be avoided with early planning. To take just one example, a contractor should maintain its records as though it will have to prove its damages in the future. If a contractor does not prepare for its claim from day one, then the contractor could end up in a situation where pursuing the claim is not worthwhile because it cannot prove its damages.

Here are five situations where a contractor should consider not to pursuing its claim:

1. Cannot Prove Damages or there were no damages – The contractor can’t isolate its damages, it can’t back them up, it doesn’t have sufficient documentation; or there was little or no financial damage. On government projects, the Federal False Claims Act and the Virginia Fraud Against Taxpayers Act (Va. Code Section 8.01-216.1, et seq.) have sharp teeth making this a serious consideration on government projects. If a contractor submits a claim without legitimate damages on a government project, then the company can end up with serious fines or even jail time for the individuals involved.
2. The Contractor is partially or wholly at fault – Or even if it is not the contractor’s fault, the contract shifted the responsibility onto the contractor.
3. Contributing Cause of the Claim – There were things that the contractor’s employees did to exacerbate the problems leading up to the claim.
4. Pyrrhic Victory caused by a victory over a judgment-proof debtor – Even if the contractor wins the claim, it may not be able to collect from the entity that caused the claim because of bankruptcy, etc.; This problem has become especially true in the construction economy since 2007.
5. Cannot Prove Delay Claims – The contractor can’t prove that the overall project was delayed.

Before filing a claim, contractors should carefully assess whether pursuing the claim is the most sensible option. If the contractor is working on government projects, then that analysis is serious because of the False Claims Acts. There are also many times when pursuing a claim is a not a good business decision. You certainly don’t want to throw good money after bad. The above points also highlight the importance of good record-keeping to prove a claim. Without those documents, a claim is more difficult to prove, but if a contractor has a thoroughly documented claim, then pursuing the claim is easier (which means fewer attorney’s fees) and the contractor has increased the likelihood that it will get paid.

EEOC Seeks to Provide Job Protection for LGBT Employees

Wednesday, July 17th, 2013

This article appeared in the Summer/Fall 2013 issue of “Virginia Human Resources Today” magazine.

In its Strategic Enforcement Plan published in December 2012, the EEOC identified 6 national priorities. One of these priorities is devoting more attention and resources to “emerging or developing” issues. The EEOC specifically identified “coverage of lesbian, gay, bisexual and transgender individuals under Title VII” as an emerging issue. What does this mean for employers?

Let’s start with the EEOC’s seminal decision on April 20, 2012 in Macy v. Holder. Macy applied for a position at a federal agency. The agency told Macy it intended to hire him pending the completion of some paperwork. In the interim, Macy informed the agency she was transgender and in the process of transitioning from male to female. Five days later, the agency told Ms. Macy the position was no longer available. The EEOC held that “claims of discrimination based on transgender status, also referred to as claims of discrimination based on gender identity, are cognizable under Title VII.” Moving forward, the EEOC contends that there is a violation of Title VII when it is shown that “gender” is a factor in an employment action.

Consider the facts of another recent case. Mr. Doe worked in an all-male warehouse with a “culture of horseplay” that was found to be “vile and obnoxious enough to score 9 on a scale of 10.” The obnoxious conduct was directed to Mr. Doe, but to other male employees as well.
Doe finally complained to HR and the conduct stopped. However, Doe was subsequently laid off. He filed a charge with the EEOC contending that he was subjected to a hostile work environment based on sex as well as retaliation. The EEOC sued on his behalf.

In EEOC v. McPherson, a federal district court recently dismissed the EEOC’s case. In so doing, the Court found that Doe was married, had children, weighed 220 pounds, and was not physically threated by the comments. He also conceded that there was no sexual proposition or sexual touching. He did not carry himself like a woman or act in a way that could be characterized as feminine. He testified that he was “just as much of a man as anyone else.” Based on these facts, the Court dismissed the case holding that it would be inappropriate to “expand the reach of Title VII to preclude offensive workplace language even when it is not directed at a person of the male sex because of that person’s male sex.”

Although unsuccessful in McPherson, this case demonstrates that the EEOC will be looking for test cases to develop and/or expand the law. (Another same sex harassment case that bears watching is EEOC v. Boh Brothers Construction, a case on appeal to the full Fifth Circuit Court of Appeals.)

There is currently no federal statute that makes it illegal for a private employer to discriminate against a person based on his or her sexual orientation. In April 2013, however, the House and Senate reintroduced the Employment Non-Discrimination Act (ENDA), which would prohibit discrimination on the basis of “sexual orientation or gender identity.” As of this writing, however, it does not appear that ENDA will become the law in 2013.

I have no doubt that questions and challenges as to the potential legal rights of LGBT employees in the workplace will become much more prevalent. As with all legal developments impacting the workplace, HR professionals will need to be proactive to understand the new and evolving landscape. HR professionals should also analyze what steps, if any, need to occur within their businesses. As examples, should employers modify their current EEO policies? Do managers need training as to potential LGBT issues? These questions, and others, are ones you will need to evaluate as the law continues to develop.

Winning Zoning Litigation Before the Lawsuit is Filed: Measuring Success by Things that Do Not Happen

Friday, July 12th, 2013

This article, co-authored by Paul M. Mahoney, the County Attorney for Roanoke County, and Gregory J. Haley, a partner at Gentry Locke Rakes & Moore, was published in the “Journal of Local Government Law”, Vol. XXIII, No. 3, Winter 2013, a publication of the Local Government Section of the Virginia State Bar.

The purpose of this article is to keep Local Government Attorneys (“LGAs”) out of trouble. Sooner or later, every LGA will have the opportunity to defend the decision of his or her local governing body in a controversial land use matter. Some land use disputes evolve unexpectedly into litigation. In many cases, however, there are land use decisions where litigation is inevitable or at least likely. This article is intended as a resource for when litigation is expected in a land use matter; it sets out, in a checklist format, factors an LGA should consider in such circumstances.

A Roanoke lawyer named Frank Flippin has been known to explain good legal work with the wry observation: “It is difficult to measure success by things that do not happen.” When questioned, Mr. Flippin could not say whether he read this somewhere or thought it up himself. In any event, this observation is particularly appropriate in the context of avoiding zoning litigation. A lot of good lawyering is invisible — bad things do not happen because of good preventive legal practice.
It is easy to declare that an LGA must know the applicable law and make sure the locality complies with all requirements. The real world, however, has a way of throwing up obstacles, including competing demands for limited resources (including time), uncooperative staff, disinterested members of the governing body, aggressive developers, angry citizens, and a host of other factors.

The evolution of zoning law and zoning ordinances has created a situation in which it can be quite difficult to adopt zoning ordinance amendments, or take a significant land use action, without running afoul of some procedural requirement. A challenger will flyspeck the zoning record to find a defect. It behooves an LGA, therefore, to do the same.

The LGA must overcome the inertia of the normal. Compliance with procedural requirements only matters when there is a litigation challenge. Accordingly, when a challenge is an obvious possibility, the LGA must ensure that the zoning process is not carried on as “business as usual.” The case reports are replete with decisions invalidating zoning actions because of procedural defects or the failure of the locality to create an adequate legislative record establishing the fairly debatable nature of the challenged decision. The LGA, therefore, has a compelling interest in getting involved at an early stage.

A. Getting in Front of the Problem.

The first challenge is to recognize the problem coming. There are certain “lightning rod” projects in which litigation is likely — landfills, asphalt plants, quarries, windmills, and local government initiated text amendments that limit development rights. Other high-profile projects that are good litigation candidates include: big box and large retail projects, large residential projects with significant traffic impacts, locality-initiated “economic development” projects, truck stops, and anything associated with the word “history”.

In these cases, the LGA must get involved at an early stage. This means extra work, intruding on the traditional turf of the land use staff, and doing things differently than is typically done. The LGA ends up managing the staff, the governing body, the applicant and the citizens. The land use policy issues remain the responsibility of the staff to develop. Nevertheless, the legal issues — both procedural and substantive — require substantial legal input.

The locality’s land use team should develop a checklist that identifies every procedural and substantive requirement under the statutes and the locality’s zoning ordinance. This list should also anticipate foreseeable problems and set out strategies to manage the foreseeable problems.

B. Two Bottom Line Rules.

There are two bottom line rules that must be remembered in this context.

1. Procedural Errors. Procedural errors are fatal. A locality cannot win if there has been a procedural error in the zoning process. The locality must go back and repeat the process and correct any procedural errors. See e.g., Renkey v. County Board, 272 Va. 369 (2006); City Council v. Potomac Green Associates, 245 Va. 371 (1993).
2. The Fairly Debatable Rule. The courts will forgive just about anything, even bad judgment, if there is some record establishing a valid basis for a land use decision. See e.g., City Council v. Wendy’s, 252 Va. 12 (1996). In Wendy’s, the Supreme Court of Virginia upheld the denial of a rezoning application to allow a commercial use on a major highway when the legislative record established that denying the commercial rezoning allowed the locality to reserve property for future industrial development.

C. The Pre-Application and Application Process.

1. Text Compliance. Problems can be avoided at this stage by insuring that the proposed use meets applicable text definitions and the proposed use is listed as a permitted use or a special use in the relevant district.
2. Comprehensive Plan Issues. Possible projects should be reviewed for comprehensive plan compliance and whether review under Va. Code § 15.2-2232 is required.
3. Subdivision and Site Plan Issues. The possible project should be reviewed to determine whether there are subdivision or site plan issues that need to be analyzed before an application is filed.
4. Maintaining credibility. The pre-application process can create a dynamic in which the developer interprets the staff’s comments as support for the project and a commitment that the locality will act in specific ways. The only way to attempt to manage this dynamic is through appropriate limiting comments and disclaimers. The staff must develop credibility with all the stakeholders by “calling balls and strikes” and not taking sides.
5. Drafting Conditions and Proffered Conditions. The pre-application process also involves the negotiation and drafting of conditional use permit conditions and possible future proffered conditions. At the time the application is filed, the proposed conditions or proffered conditions should be clearly written and describe who will do what, when and how. There should be specific triggers and benchmarks in the conditions. Vague language should be avoided.
   Proffered conditions must comply with the complicated and confusing provisions of Va. Code Ann. §§ 15.2-2297 and 15.2-2298.
6. E-Mail Discipline. Throughout the application and review process, the staff should be professional in its e-mail communications. If the LGA becomes aware of playful or insulting e-mail communications among the staff, he or she should immediately intervene to end the practice. These types of e-mail communications will inevitably end up in the public eye if there is litigation.
7. Application Review. Once an application is filed, the staff must carefully review the application documentation to ensure that it is in proper form, all required information and attachments are included, the ordinance references are correct, and all signatures are in place. If there is a problem, it should be identified and corrected at an early stage.
8. Dealing with the Bad Application. In some cases, a developer may insist on filing an application that includes procedural or substantive problems. In such cases, the staff must be direct in advising the applicant of the problems at the earliest possible stage.
9. Amendments Initiated by the Locality. In situations in which the governing body or the planning commission is initiating zoning ordinance amendments pursuant to Va. Code § 15.2-2286(A)(7), the initiating resolution must include the public purpose language required by § 15.2-2286(A)(7) and must also satisfy the requirements of the locality’s zoning ordinance.

D. The Staff Report.

The Staff Report as Evidence. The staff review will include substantive and procedural reviews of the application. In a case in which litigation is possible, the LGA should consider the staff report as an opportunity to ensure that the legislative record establishes the fairly debatable nature of the land use action.

A good staff report will review the land use reasons both to approve or disapprove a proposed zoning action. In this situation, the LGA can anticipate that the staff report will serve as a key exhibit establishing the fairly debatable nature of the governing body’s action.

To accomplish this utilitarian goal, the LGA should be directly involved in drafting the staff report.

In cases in which litigation is likely, the staff will have to consider whether to include any type of recommendation. This decision will be influenced by the typical practice in the locality. The decision as to whether to include a recommendation can be a particular challenge when it is not clear how the planning commission or governing body may decide the issue.

E. The Public Process.

1. A good public review and comment process prevents a challenger from arguing that the public role in the process was inappropriately minimized. In ideal situations, therefore, there will be significant opportunities for public comment which could include neighborhood meetings, workshops, and public hearings. If the locality conducts multiple public hearings, much of the anger and outrage of the stakeholders can be vented at the early meetings. In other situations, however, the press of circumstances may reduce opportunities for public comment. In such situations, the locality should maximize the opportunities for public comment to the extent practical.
2. Posting. The staff must ensure that the affected properties are posted as required by the zoning ordinance.
3. The Advertised Notice. The advertised notices of the required public hearings must comply with the provisions of §§ 15.2-2204(A) and 15.2-2285(C) and any additional requirements imposed by the zoning ordinance amendment provisions or conditional use permit provisions. Section 15.2-2204(A) provides that the advertisement must include a descriptive summary of the proposed action. The courts have been strict in requiring localities to comply with the descriptive summary requirement. See Gas Mart Corp. v. Board of Supervisors, 269 Va. 334 (2005); Glazebrook v. Board of Supervisors, 266 Va. 550 (2003). The Gas Mart decision has been heavily criticized as an overly strict reading of the descriptive summary requirement in circumstances in which there had been extensive public notice and participation. Nevertheless, the Court’s message is clear – the locality must ensure that the advertised notice gives a clear explanation of the proposed land use action. Drafting a “descriptive summary” for a complicated proposed zoning action that complies with the descriptive summary requirement is a daunting task when litigation is expected. In such cases, the LGA should be deeply involved in drafting the advertisement. The LGA should read and study the Gas Mart and Glazebrook decisions cited above. The advertisement should be in plain English and minimize the use of land use jargon and technical terms. If there is a challenge to the advertisement, the judge should be able to read the advertisement and easily understand the nature and effect of the proposed action. The LGA should develop a checklist to ensure the advertisement includes the elements required by §§ 15.2-2204(A), 15.2-2285(C), and the Zoning Ordinance. The checklist should include, at a minimum:
   
   a. Title. “Notice of Intention” to consider the specific action.
   b. Descriptive summary of the proposed action. This could include: the specific parcels affected; a description of the areas and the locality that would be affected; a description of the nature and characteristics of the proposed change in the zoning regulations; a description of the existing regulations; a description of how the zoning map would be changed; and a description of the existing comprehensive plan designation and density provisions as required by § 15.2-2285(C) (in cases involving zoning map changes).
   c. A reference to the places where copies of the materials may be examined.
   d. The time and place of the public hearing.
   e. A statement that persons affected may appear and present their views.
   f. In cases involving a proposed zoning map change, the public notice must state the general usage and density range of the proposed amendment and the general usage and density range, if any, set forth in the applicable part of the comprehensive plan.
   g. Anything else required by the locality’s zoning ordinance.
4. Publication. Section 15.2-2204(A) requires that the notices must be published in a newspaper published in or having general circulation in the locality. The publication must be made once a week for two successive weeks. The notices must be published at least twice with not less than six days elapsing between the first and second publication. The LGA should count the days to confirm that these requirements, and any additional requirements under the locality’s zoning ordinance, are met. Errors in the timing and sequence of publication are common. The notices for both the planning commission and the governing body may be published concurrently. If the planning commission and the governing body hold a joint public hearing, the published notice need only be given by the governing body.
5. The Property Owner Notice Letters. Section 15.2-2204(B) requires that the locality provide written notice to property owners when a proposed amendment to the zoning ordinance involves a change to the zoning map classification of property. Property owners must also receive written notice if the proposed zoning amendments involve a change to the zoning ordinance text that decreases the allowed dwelling unit density of any parcel of land. This written notice must be given at least five days before the hearing. If a proposed amendment affects less than twenty-five parcels, then this written notice must be sent to the affected property owners, the owners of abutting properties, and the owners of properties immediately across the road or street. If the proposed amendment affects more than twenty-five parcels, then the notice must be sent to the owners of each parcel of land involved. The locality must also comply with any specific notice requirements under the locality’s zoning ordinance. Section 15.2-2204(B) does not specify what the written notice must contain. At a minimum, the property owner notice should contain the same information in the published advertised notice. If practical, the notice should include a description of how the proposed amendments will affect the property.
6. Public Hearing Logistics and Rules. If a large public turnout is expected, the locality should ensure that the location for the public hearing is adequate. Appropriate public address equipment should be available. The locality should arrange for the attendance of law enforcement officers, if appropriate. The planning commission and the local governing body should also consider adopting rules for the public hearing, including time limits on speakers and prohibitions against personal attacks.
7. Preparing the Board and Commission Members. If a contentious public hearing is expected, the LGA should prepare the planning commission members and governing body members for the hearing. The chair should be briefed to anticipate inappropriate comments and remarks and how to best manage such incidents. The LGA should caution the planning commission and governing body members to carefully consider any comments they make. Any such comments must be addressed only toward appropriate land use factors. The members should make no comments suggesting bias, prejudice, or other factors that could be considered unfair. The LGA can point out that any such comments will undoubtedly be quoted in the newspaper and in the pleadings if litigation follows. One technique is to suggest to the members that their comments should address only the “magic words” of land use concerns including:
   – Traffic
   – Adequacy of streets and related facilities
   – Parking
   – Access- Noise
   – Odors
   – Dust
   – Artificial lighting/glare- Adequate water and sewer facilities
   – Storm water management- School facilities
   – Parks
   – Open space
   – Recreation facilities
   – Economic development
   – Tax revenues
   – New jobs
   – Retaining existing businesses- Minimizing impacts on nearby properties
   – Buffers
   – Screening
   – Landscaping
   – Property values
   – Compatible/incompatible uses- Wetlands
   – Floodplains
   If litigation is expected, the LGA can brief the governing body in a duly-called closed meeting and explain the legal issues involved pursuant to Va. Code § 2.2-3711(A)(7).
8. Preparing the Ordinance, the Resolution, and the Recommendation. In situations in which litigation is expected, the LGA should prepare the resolutions and ordinance documents with care. In some cases, the LGA should prepare documents both approving and denying the requested action.
   a. Required Findings.
   Many zoning ordinances require that the planning commission or governing body consider specific factors or make specific finding as a precondition to granting a conditional use permit or amending a zoning ordinance. The LGA must ensure that the resolution and ordinance documents include references to required study factors and any specific findings as may be required by the zoning ordinance.
   b. Conditions.
   The LGA should have language available for any conditions that may be imposed as part of the conditional use permit process.
   c. Proffers.
   The LGA should anticipate, to the extent possible, any language changes or proffer changes that may be discussed as a result of the public hearing process. Any proposed changes to proffered conditions must comply with § 15.2-2297(A).
   d. Recitals.
   Finally, when litigation is likely, the LGA should consider including recitals that help establish procedural compliance and the fairly debatable nature of the action. The ordinance or resolution can also refer to the staff report and the land use factors that have been considered to help establish the fairly debatable nature of the action as part of the legislative record. If this technique is used, and litigation follows, the locality can use the legislative record to help prove not only procedural compliance but also that the action satisfies the fairly debatable rule.
   These documents can make a self-authenticating, self-proving, and essentially unimpeachable record of the legitimate land use reasons proving the fairly debatable nature of the challenged land use decision. For example, the amendments or resolution can recite that the governing body has considered the impact of the proposed use on nearby properties and concluded that the applicable conditions and restrictions adequately mitigate the foreseeable adverse effects. Similarly, the amendments or resolution could recite the economic benefits, including new jobs and tax revenues, that will result from the development project and benefit the community.
   e. Roll Call Vote.
   The LGA should ensure that the action is taken by a roll call vote.
9. Additional Problems to Avoid. In, thankfully, rare cases, zoning actions have been challenged based on allegations of improper actions by the governing body or the locality’s staff. To avoid this remote possibility, the LGA should make sure that there are no secret meetings or bending of the rules. If mistakes are made, they should be acknowledged and corrected in an open and fair process.
10. The Result. If these steps are followed, they should minimize the chance of a litigation challenge to the zoning action because there has been good procedure, good substance, and a clear record demonstrating procedural compliance and the fairly debatable nature of the decision. If such a challenge is nevertheless brought, the locality should prevail at the earliest possible stage.

F. Litigation Issues.

The handling of litigation, if brought, is beyond the scope of this article. Several brief points, however, may be helpful.

First, the locality should immediately give notice to its insurer. Some policies provide for coverage for the cost of defense if a land use challenge is brought and the insurer is notified in a timely manner.

Second, if the complaint indicates that the locality made a procedural error, the locality should seriously consider going back through the process to correct the procedural error. It may be quicker and cheaper to repeat the legislative process than continue the litigation.

Third, the locality should decide early whether to use in-house staff or hire an outside expert to give testimony on the land use issues.

Fourth, the locality should use the legislative record at an early stage to defend. The LGA should consider a motion craving oyer or judicial notice to get the legislative record before the court at the earliest possible stage.

Fifth, the locality should resist any efforts to take the deposition of members of the governing body. The individual analysis or motive of elected members of the governing body are rarely, if ever, relevant, admissible, or even subject to discovery.

Sixth, the LGA should take every opportunity to frame the issues in the litigation including familiarizing the court with the fairly debatable standard.

This article covers as much ground as possible but, given the myriad of situations in which these issues may arise, it is inevitable that novel issues will develop that will challenge the most diligent local government attorney. The local government attorney, however, is in a unique position to make the governing body look good, make the planning staff look good, and implement good land use and public policy. Using the points reviewed in this article, the LGA can frame the issues, improve the facts, create a better record and successfully manage any litigation that cannot be avoided.