Arizona Supreme Court Declines to Expand Economic Loss Doctrine

By Garrett Olexa*

The economic loss rule limits a contracting party to contractual remedies for the recovery of economic losses that are unaccompanied by physical injury to persons or other property. The Arizona Supreme Court recently issued the latest decision on the economic loss rule in Sullivan v. Pulte Home Corp. 2013 WL 3929151      P.3d      (July 31, 2013), declining to expand the application of the rule. 

In Sullivan, the Court was faced with the question of whether the economic loss rule would bar tort claims asserted against the home builder by the second owner of the home because the second homeowner could have sued the builder for breach of implied warranty. The Supreme Court rejected an attempt to expand the economic loss rule to non-contracting parties. In doing so, the Court in Sullivan re-affirmed its “express limited holding” in Flagstaff Affordable Housing Ltd. Pship v. Design Alliance, Inc., 223 Ariz. 320, 223 P.3d 664 (2010) that “a contracting party is limited to its contractual remedies for purely economic loss from construction defects.” 

The Sullivan decision suggests that the Arizona Supreme Court intends to hold the economic loss rule in-check and prevent it from being further expanded. Additionally, in citing with approval language from a secondary source indicating that the economic loss rule should only “ . . . relegate[e] a plaintiff to contract remedies in cases where there is an agreement between the parties allocating economic risks,” the Court hinted that it might also refuse to find that a tort claim is barred by the economic loss rule where (i) a tort duty exists independently of the contract and (ii) the parties’ agreement neither expressly nor implicitly addresses the scope of the duty nor the relief being sought.

*Garrett Olexa is a Member with the law firm of Jennings, Strouss & Salmon, PLC and works in its commercial litigation practice group.  He can be contacted at golexa@jsslaw.com or 623.878.2222.http://www.jsslaw.com/professional_bios/Garrett_J_Olexa

Shanna Bowman Orlich Appointed to State Bar Task Force on Sustainability

 

Phoenix, Ariz. (July 31, 2013) – Jennings, Strouss & Salmon, a leading Phoenix-based law firm, is pleased to announce that Shanna Bowman Orlich has been appointed to the State Bar of Arizona’s Task Force on Sustainability.

The goal of the task force is to equip the State Bar of Arizona (SBA) and its members with the knowledge and tools to promote conservation and protection of natural resources. The task force starts in August 2013 and concludes in June 2014. Responsibilities include:

• Assessing the environmental sustainability of SBA offices and operations.
• Evaluating ways in which the SBA may a) raise awareness of environmental sustainability and stewardship among its members; and b) equip itself and its members with the knowledge and tools to promote environmentally sustainable practices.
• Issuing a report to the SBA Board of Governors presenting the results of the Task Force’s assessment and evaluation, and make recommendations consistent with its goal and purpose.
• Assisting in the development and implementation of approved recommendations.

“Having grown up in the farming community of Yuma, AZ, I understand the importance of being a good steward of the land and protecting our natural resources,” stated Orlich. “I look forward to continuing to serve those interests for the good of the state as we balance the needs of our urban and rural communities, and I applaud the State Bar for committing to sustainability within its organization and membership.”

Orlich focuses her practice in business and finance, with an emphasis on mergers and acquisitions, securities, business planning and formation, real estate, trusts and estates, and other corporate and financial transactions. She also is well-versed in Arizona agricultural law and business practices and provides representation on agricultural and environmental issues. Additionally, she is one of the primary attorneys in the firm’s recently opened Yuma office.

Orlich earned a J.D. from Columbia University School of Law, an M.B.A with a concentration in Accounting from Columbia Business School, and a B.S.E. in Industrial Engineering from Arizona State University. Prior to joining Jennings, Strouss & Salmon, she was a trader and analyst in Goldman Sachs' Capital Structure Franchise Trading Group, which specializes in distressed assets and other litigious special situations.

About Jennings, Strouss & Salmon
Jennings Strouss & Salmon is one of the Southwest's leading law firms, providing legal counsel for over 70 years through its offices in Phoenix and Peoria, and Yuma, Arizona; and Washington, D.C. The firm's primary areas of practice include agribusiness; bankruptcy, reorganization and creditors’ rights; construction; corporate and securities; employee benefits and pensions; energy; family law and domestic relations; health care; intellectual property; labor and employment; litigation; real estate, land use and zoning; surety and fidelity; tax; and trust and estates. For additional information please visit www.jsslaw.com and follow us on LinkedIn, Facebook and Twitter.

~JSS~

Contact:  Dawn O. Anderson  |  danderson@jsslaw.com|  602.495.2806

FERC Issues Notice of Proposed Rulemaking as Part of Efforts to Coordinate Natural Gas and Electric Markets

On July 18, 2013, the Federal Energy Regulatory Commission (“FERC”) issued a notice of proposed rulemaking as part of its ongoing exploration of coordination between natural gas and electricity markets.

The proposed rule would revise FERC regulations and provide explicit authority to interstate natural gas pipelines and public utilities that own, operate or control transmission facilities to share non-public operational information for reliability and planning purposes. FERC initiated this rulemaking process in response to comments that FERC received related to information sharing as part of its efforts to increase coordination and communication between the two markets.
Public comments are due to FERC on August 26, 2013.

B3 Strategies Government Relations and Public Affairs Firm Launches in Phoenix: "Building Public Policy Brick-By-Brick"

PHOENIX, Ariz. (July 22, 2013) – Jennings, Strouss & Salmon announces the formation of B3 Strategies, a full-service government relations and public affairs firm. Positioned as “The Public Policy Architects,” B3 Strategies will provide clients with the development and implementation of public policy strategy at the local, state, and federal levels.

“Jennings, Strouss & Salmon has a long and distinguished history of public policy representation,” stated J. Scott Rhodes, the firm’s Managing Attorney. “We are excited about extending our ability to assist clients with all kinds of legislative and public policy concerns through B3 Strategies.”

B3 Strategies Chief Executive Officer, Russell D.Smoldon, has over 30 years of public policy experience focused on energy, water, taxation, environmental, health care and economic development issues. The relationships he has with government officials, legislators and the business community in Arizona, across the country and at the federal level in Washington, D.C. are extensive.

A former legislative assistant to Congressman Thomas S. Foley, Smoldon has been involved with nearly every public policy issue affecting Arizona over the past 25 years in his role as Manager of Government Relations with Salt River Project (SRP) in Phoenix, Arizona. Prior to joining SRP, he served as the government relations representative for Idaho and Montana with Spokane, Washington-based Avista Corporation.

As a respected leader in the Phoenix business community, Smoldon serves on the board of the Arizona Tax Research Association (ATRA), the Western Business Roundtable, the Greater Phoenix Urban League, the American Legislative Exchange Council and the National Conference of State Legislators’ Advisory Council on Energy and National Tax Partnership. He has assisted numerous non-profit organizations, including the Arizona Trails Association, and serves as a member of the Arizona Supreme Court’s Child Support Guidelines and Domestic Relations Committees and the Arizona Highway Users’ Association.

Smoldon received a B.S. in Political Science and History from Gonzaga University. While attending Gonzaga University School of Law, he left to accept the position with Avista, becoming the youngest utility lobbyist in the country at the time. Smoldon also completed a number of post-graduate courses in Theory and Political Science at Eastern Washington University before being recruited by SRP and moving to Arizona.

The vast government relations and public affairs experience Smoldon brings to B3 Strategies, united with the legal prowess of Jennings, Strouss & Salmon, provides clients with the knowledge and tools needed to present, support and implement public policy that addresses the issues affecting their businesses. Both firms assist clients in a multitude of industries, providing a wide-range of legal and lobbying services. In addition, Jennings, Strouss & Salmon’s office in Washington, D.C. will enable B3 Strategies to address federal issues at the nation’s capitol.

“I am very excited to be leading B3 Strategies,” stated Smoldon. “I’ve had a successful career managing government affairs at the corporate level and now look forward to being involved with public policy issues on a grander scale. Being affiliated with Jennings Strouss enables me to expand beyond policy issues focused on utilities. I look forward to utilizing my experience to represent a wide-range of industries at the local and state level, as well as having an impact on the national policy arena.”

About B3 Strategies
“Building Public Policy Brick-By-Brick”
Positioned as “The Public Policy Architects,” B3 Strategies, an affiliate of Jennings, Strouss & Salmon law firm, provides clients with the knowledge and tools needed to present, support and implement public policy to address issues affecting their businesses. B3 Strategies leverages relationships with an extensive network of government officials, legislators and the business community to develop and implement public policy strategies at the local state, and federal levels for a wide-range of industries, including those focused on energy, water, taxation, environmental, health care and economic development issues.

For additional information please visit www.B3strategies.com, and follow us on LinkedIn, Facebook and Twitter.

About Jennings, Strouss & Salmon
Jennings Strouss & Salmon is one of the Southwest's leading law firms, providing business, litigation and regulatory legal counsel for over 70 years through its offices in Phoenix and Peoria, and Yuma, Arizona; and Washington, D.C. For additional information please visit www.jsslaw.com and follow us on LinkedIn, Facebook and Twitter.

~JSS~

FERC Schedules a Staff Technical Conference on California’s Reliability Issues

The Federal Energy Regulatory Commission (“FERC” or “Commission”) will hold a Technical Conference on July 31, 2013, in Sacramento (California), to discuss reliability issues arising from the California Independent System Operator’s (“CAISO”) proposal to implement a flexible capacity and local reliability resource retention (“FLRR”) mechanism, which was filed with FERC on December 12, 2012.

The FLRR mechanism was presented as an interim measure that would allow CAISO to address medium-term reliability concerns while working with the California Public Utilities Commission (“CPUC”) and other local regulatory authorities on the design of a multi-year forward capacity procurement obligation for all load serving entities within CAISO’s balancing authority area.

CAISO’s existing backstop funding system (known as the Capacity Procurement Mechanism) allows CAISO to levy a tax on power customers to keep qualifying resources in business. However, only the risk of energy shortages identified for the next calendar year can trigger such a backstop mechanism under CAISO’s current Tariff. The proposed FLRR mechanism would provide out-of-market compensation to resources at risk of retirement in the current year but determined to be needed in the two to five year forward period. CAISO justified the need for the FLRR mechanism as a way to avoid one-time waivers such as the one requested in 2012 for Calpine’s Sutter power plant.

FERC rejected the FLRR mechanism in an Order issued on March 29, 2013 in Docket No. ER13-550-000. The Commission found that CAISO had not demonstrated that its proposal would: (i) be effective in ensuring long-term reliability; (ii) be consistent with CAISO’s market design; and (iii) result in just and reasonable rates not unduly discriminatory or preferential. The Commission further directed its staff to convene a technical conference for the purpose of coordinating with the CPUC, CAISO and other industry participants on resolving the reliability issues presented in the FLRR proceeding.

The Technical Conference on July 31^st will consist of two panels discussing: (i) the risk-of-retirement problem and its impact on reliability; and (ii) whether a multi-year resource adequacy framework with a CAISO backstop mechanism is a solution to the risk-of-retirement problem.

House Votes to Delay Obamacare Mandates

Today in a Republican-lead vote, the U.S. House of Representatives voted to delay key components of ObamaCare, specifically the requirement on individuals to buy health insurance, until 2015. They also voted for the measure that the Whitehouse announced earlier this month, delaying the requirement that businesses with more than 50 employees provide insurance coverage or pay a penalty. Read the full story

Norma Izzo Milner Featured in 'Scottsdale Living' Article Discussing Infidelity

 

Jennings, Strouss & Salmon family law attorney Norma Izzo Milner discusses dealing with the rising infidelity trend in this article from Scottsdale Living:

Hide Your Husbands: How to Handle Living in the City with the Highest Chance of Infidelity

Jennings, Strouss & Salmon Expands Phoenix and D.C. Offices With Addition of Three Attorneys



 

  

Phoenix (July 8, 2013) – Jennings, Strouss & Salmon, PLC, a leading Phoenix-based law firm, is pleased to announce that Steven J. Kalish, John C. Norling and Ryan Womack have joined the firm.

“We are very pleased to welcome Steve, John, and Ryan to the firm,” stated J. Scott Rhodes, Managing Attorney at Jennings, Strouss & Salmon. “They possess the knowledge and experience in their respective areas of practice to support and expand the services Jennings Strouss provides to clients.”

Steven J. Kalish is a Member in the Energy Department of the firm’s Washington, D.C. office. He assists regulated entities, customers of regulated entities, and other interested parties in rulemaking, rate setting, licensing, and merger matters. Kalish also represents clients before numerous federal and state courts and regulatory agencies, including the Federal Energy Regulatory Commission (natural gas) and Surface Transportation Board (railroads). He earned a J.D. from the University of Pennsylvania and a B.A. in Economics from the University of Massachusetts.

“I was attracted to Jennings Strouss because of the quality of its energy practice group,” stated Kalish. “I joined Jennings Strouss because of its top to bottom commitment to legal ethics.”

John C. Norling is a Member in the Corporate, Securities and Finance Department of the firm’s Phoenix office. He focuses his practice on commercial transactions, mergers and acquisitions, real estate, and general business advice with an emphasis on representing the interests of automobile dealerships in all facets of their business. Norling also serves as General Counsel for the Arizona Automobile Dealers’ Association and several dealer marketing associations. He earned a J.D. from Ohio State University and a B.S. from Wichita State University.

“I am honored to join such an esteemed firm as Jennings Strouss and I look forward to teaming with my new colleagues to provide exceptional service to our clients,” stated Norling.

Ryan Womack is an Associate in the Litigation Department of the firm’s Phoenix office. Prior to joining Jennings, Strouss & Salmon, Womack served as a Judicial Clerk with Arizona Court of Appeals Judge John Gemmill. He earned a J.D. from Regent University School of Law in Virginia Beach and a B.S. in Business Administration and Biology/Chemistry from Southern Nazarene University in Oklahoma City.

“Jennings Strouss is a well-established, yet innovative, law firm with a long and successful history in Arizona,” stated Womack. “I feel honored to be a part of this team.”

About Jennings, Strouss & Salmon
Jennings Strouss & Salmon is one of the Southwest's leading law firms, providing legal counsel for over 70 years through its offices in Phoenix and Peoria, and Yuma, Arizona; and Washington, D.C. The firm's primary areas of practice include agribusiness; bankruptcy, reorganization and creditors’ rights; construction; corporate and securities; employee benefits and pensions; energy; family law and domestic relations; health care; intellectual property; labor and employment; litigation; real estate, land use and zoning; surety and fidelity; tax; and trust and estates. For additional information please visit www.jsslaw.com and follow us on LinkedIn, Facebook and Twitter.

~JSS~

 

Contact:  Dawn O. Anderson  |  danderson@jsslaw.com|  602.495.2806

Businesses Get a Reprieve: Obama Administration Delays Health Care Reform Employer Mandate

The Obama Administration announced in a White House blog, and a blog on the U.S. Department of the Treasury website, that it will delay the Affordable Care Act (ACA) mandatory employer and insurer reporting requirements until 2015.

View the full story here.

Paul G. Johnson Elected President of the Phoenix Committee on Foreign Relations

Phoenix (July 1, 2013) – Jennings, Strouss & Salmon, a leading Phoenix-based law firm, is pleased to announce that Paul G. Johnson has been elected President of the Phoenix Committee on Foreign Relations.

The Phoenix Committee on Foreign Relations (PCFR) is an independent, non profit, non partisan, membership organization created to promote unbiased information and honorable discussion about international affairs.  PCFR sets the stage for improving and building meaningful relationships within the community and around the world. The organization supports local and international communities, offering opportunities for members to become contributing participants in the improvement of policy making.

“I am honored to lead this dynamic organization for the next two years, to enhance the place of Phoenix in the international community, and further educate our members and the public about foreign policy issues,” stated Johnson.

Johnson is a commercial litigation attorney with more than 25 years of experience. In addition to his involvement with the Phoenix Committee on Foreign Relations, he has taught various legal subjects in the Political Science Department at Arizona State University, and currently teaches at the Thunderbird School of Global Management. Johnson has garnered extensive leadership experience throughout his career, serving as an officer in the United States Navy.  He earned a B.S. from the U.S. Naval Academy and a J.D. from Harvard Law School.

About Jennings, Strouss & Salmon
Jennings Strouss & Salmon is one of the Southwest's leading law firms, providing legal counsel for over 70 years through its offices in Phoenix, Peoria, and Yuma, Arizona; and Washington, D.C. The firm's primary areas of practice include agribusiness; bankruptcy, reorganization and creditors’ rights; construction; corporate and securities; employee benefits and pensions; energy; family law and domestic relations; health care; intellectual property; labor and employment; litigation; real estate, land use and zoning; surety and fidelity; tax; and trust and estates. For additional information please visit www.jsslaw.com and follow us on LinkedIn, Facebook and Twitter.

~JSS~

 

Contact:  Dawn O. Anderson  |  danderson@jsslaw.com|  602.495.2806