The Site Report - Construction Law Insights, Issue 7, July 2025

Issue 7, 2025

Welcome to our seventh issue of The Site Report for 2025! In this edition, we address direct v. consequential damages in Florida, how the OBBB will fuel construction projects, China's construction of the world's largest hydropower dam, Amazon's investment in Pennsylvania's data centers, southwest Virginia's nuclear projects, Google's investment in Pennsylvania hydropower projects, the DOE dropping accessibility requirements for buildings receiving federal funds, and Virginia's offshore wind projects continuance. We also tap Joe Hagy's experience when it comes to mediation and construction issues.

Thank you for reading.


Building Design Disputes – New Analysis of Direct v. Consequential Damages in Florida

By Stephanie U. Eaton

Are design professionals involved in your Florida project? If so, then you need to be aware of this newly decided case. The U.S. District Court for the Middle District of Florida, in Orlando, issued an Order on July 11, 2025, confirming that in Florida, remediation costs for defective design work do constitute direct damages, regardless of whether third-party contractors performed the remediation work. See Orlando Health, Inc. v. HKS Architects, Inc., Case No. 6:24-cv-00693-JA-LHP (M.D. Fla., Jul. 11, 2025). This ruling occurred despite the use of the parties’ contract – the AIA B101 (2017) - that contained a waiver of consequential damages. Could this outcome affect your Florida project? To make that determination, we need to discuss what happened in Orlando Health.

Click here to read the entire article.


Builders Say One Big Beautiful Bill Act will Fuel Construction Activity

“Firms expect a spike in starts, but the race to break ground may compound certain issues.”

Why this is important: While Biden’s Inflation Reduction Act and related measures focused on carbon-neutral energy production projects like wind and solar, dedicated tens of millions of dollars to methane emission reduction through oil and gas well plugging, and added millions more to brownfields and abandoned coal mine development, the Trump administration has turned elsewhere. The new focus on federally subsidized construction under the One Big Beautiful Bill Act spending appears to be targeted more specifically. The OBBBA includes the restoration of 100 percent bonus depreciation, the immediate expense of research and development costs, and a permanent extension of the 20 percent pass-through deduction under Section 199A.

The primary winners of the new federal spending and tax structures will likely be manufacturers across all sectors, defense contractors, and traditional energy generation equipment. Nuclear energy producers may see a kickstart to their industry for the first time since the 1950s.

What’s the largest potential drawback or snag point? Joseph Molloy, a tax partner at Anchin, a New York City-based accounting, tax, and advisory firm, notes that “The bill’s emphasis on domestic sourcing and reshoring may increase demand for U.S.-based construction labor and materials … potentially intensifying workforce and supply chain pressures.” --- Jason E. Wandling


China Starts Construction on World's Largest Hydropower Dam in Tibet

“The project, part of China’s push to expand renewable energy and reduce carbon emissions, could affect millions downstream in India and Bangladesh.”

Why this is important: China has commenced construction on what will become the world’s largest hydropower dam, located on the Tibetan Plateau. The colossal project is expected to generate approximately 300 billion kWh annually, supporting China's economic expansion while also raising concerns about downstream impacts on India and Bangladesh.

The project represents both a major infrastructure opportunity and a complex regulatory landscape. Legal and development teams should anticipate extensive environmental and transboundary regulatory scrutiny, including potential review under international water treaties, seismic impact assessments, indigenous rights considerations, and climate resilience mandates. Contractors and owners preparing to engage in hydropower construction or retrofitting should monitor this megaproject as a precedent for future high-stakes cross-border energy infrastructure in sensitive regions. --- Addison Gills, Summer Associate


 Amazon and Pennsylvania Join the Leaders in Pursuing Creative, Renewable Solution to Data Center Energy Requirements

By Barry A. Naum

As the popularity and use of language learning models such as Chat-GPT and Co-Pilot and other Artificial Intelligence (AI) products rapidly expand and as data centers continue to search for building and electric capacity to manage that demand, big business has begun to seek approval from states in a race to see who will become the front-runner in the new AI industry. Making huge steps in this endeavor, Amazon Web Services (AWS) seeks to establish its dominance in the AI industry with a $20 billion investment to build two new data centers in Pennsylvania over the next 10 years, fueled by carbon-free nuclear power.

Click here to read the entire article.


Plans in Motion for Southwest Virginia Advanced Nuclear Reactor

“The project will be supported by a $100,000 grant from the Virginia Clean Energy Innovation Bank and a $97,5000 GO Virginia grant.”

Why this is important: Plans to build an advanced nuclear reactor in southwestern Virginia continue. The project has received almost $200,000 in additional funds for the planning process and long-term construction plans. A Wise County site is the likely location for the advanced nuclear reactors, which will be built in factories and delivered to the site. Backers believe power from the plant will then stimulate economic growth. --- Mark E. Heath


Google Signs $3bn Hydropower Deal for Pennsylvania Data Centres

“The deal may mean that the US’ ageing hydroelectricity producers may be in line for modernisation.”

Why this is important: Google has finalized a $3 billion, 20‑year hydropower agreement with Brookfield Asset Management, securing an initial 670 MW of clean electricity from Pennsylvania’s Holtwood and Safe Harbor hydroelectric facilities, with the possibility of scaling up to 3 GW across the U.S. under the Hydro Framework Agreement. This landmark deal represents the largest corporate hydropower procurement ever and underscores a shift away from intermittent renewables toward more dispatchable, carbon‑free energy to power Google’s rapidly expanding AI and cloud infrastructure in the Pennsylvania-New Jersey-Maryland (PJM) region.

From a construction and infrastructure standpoint, the agreement includes financing for modernization and relicensing of aging hydroelectric dams, a timely move given the poor condition grades recently assigned to U.S. dams. For industry stakeholders, this deal signals new opportunities in the refurbishment of legacy hydropower assets and highlights the growing role of long‑term power purchase agreements (PPAs) in aligning energy infrastructure with digital‑era growth strategies. Building owners, developers, and legal teams should anticipate similar arrangements as hyperscale users increasingly demand reliable, clean energy as a strategic asset. --- Addison Gills, Summer Associate


 DOE to Drop Accessibility Requirement for Buildings Receiving Federal Funds

“Federal accessibility standards won’t apply to buildings using U.S. Energy Department funds for energy efficiency or other uses under a rule rescission taking effect soon.”

 Why this is important: On May 16, the Department of Energy published a direct final rule to announce the repeal of a 1970s rule that requires any building receiving federal funds, whether for new construction or undergoing renovation, to be made accessible to handicapped or otherwise disabled Americans. The recession will become final on September 12.

Under 10 CFR 1040.73, starting in June 1980, every facility constructed by a recipient of federal financial assistance was required to be designed and constructed in a manner that it was readily accessible to, and usable by, handicapped persons. The same rule applied to renovations using federal funds after the same date, essentially requiring all construction activities that made use of federal funds to be built with disability access in mind.

The DOE noted that the regulation was unnecessary because of the general prohibition on discrimination against disabled Americans. The action received over 20,000 comments, and final action on it was delayed from the initial July 15 effective date.

As noted in the article, if “the rescission takes effect as planned, companies and other organizations that obtain DOE grants to make their buildings more efficient or for other purposes won’t need to take steps to make the buildings accessible if they’re not accessible already. Accessibility features can include ramps, wide doorways, and railings.” It’s unclear, however, what standards will apply to construction projects, since the DOE notes in the rule rescission filing in the Federal Register that general nondiscrimination provisions will still apply, which suggests that some kind of disability access will be required, without explicitly stating how that’s to be done. Litigation is certain to ensue. --- Jason E. Wandling


Virginia's Massive Offshore Wind Project Lives On

“The budget reconciliation package recently passed by Congress and signed by the president rolled back many Biden-era environmental initiatives, but not Virginia's wind farm.”

Why this is important: A massive wind farm off Virginia Beach has survived attempts to cut back such projects in the Budget Reconciliation Bill. The wind farm, when completed, will power 600,000 homes. The project is still under construction, but is half completed. Opponents realized that if the new Congressional bill had cut credits for it, Virginia ratepayers would have been charged $6 billion in construction costs on the wind farm to date and would have received no power from it. --- Mark E. Heath


 

Featured Attorney Question and Answer

Ralph J. (Joe) Hagy

Q: As we all know, litigation can be a timely process. As such, there is a trend toward mediation, especially when it comes to contracts and issues involving construction. You are a highly experienced litigator. What do you see are the pros and cons of mediation, and what guidance can you provide for contractors, subcontractors, suppliers, etc., when it comes to mediation best practices?

A: Over the years, my practice has included personal injury, premises liability, employment disputes, boundary issues, and construction law. I’ve had the opportunity to represent both plaintiffs and defendants, which has shaped my appreciation for the nuances of dispute resolution from both sides of the table. Today, my work is focused primarily on defending medical malpractice claims. Despite this evolution in subject matter, one constant remains: mediation is often the most effective path to resolution.

Construction litigation, in particular, is well-suited to mediation. These cases frequently involve multiple parties—owners, general contractors, subcontractors, and suppliers—with varying levels of risk, insurance coverage, and contractual obligations. Mediation offers a structured yet flexible forum to sort through these complexities. Key advantages of mediation in construction disputes include cost efficiency, as these matters are typically document-heavy, with extensive written discovery and multiple depositions that can drive up expenses quickly. Mediation provides an early opportunity to avoid much of that cost while still working toward resolution, and it also enables parties to craft creative, project-specific solutions, such as modified payment plans or adjusted warranty terms. Additionally, the level of party control in shaping an outcome can be particularly valuable in an industry where professional relationships are often ongoing in the midst of complex litigation.

These benefits must be weighed against the potential pitfalls. Power imbalances between a small subcontractor or supplier and a larger, better-resourced general contractor can impact negotiations. As such, obtaining and evaluating key documents well in advance of mediation is critical, especially in disputes involving indemnity clauses, change orders, or scope-of-work issues. Mediating without a firm grasp of those details can leave a party exposed or underinformed. Choosing the right decision-maker to attend mediation is another often overlooked factor. A representative with detailed knowledge of the work performed and the authority to negotiate meaningfully, whether as a project manager, a risk manager, or a principal, can help gain traction during mediation. Most importantly, candid client conversations must take place in order to identify strengths, weaknesses, and settlement expectations beforehand. 

Whether in construction, medical malpractice, or virtually any other area of the law, our results are increasingly defined by our approach to mediation.   

 

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

© Spilman Thomas & Battle, PLLC

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