Discussion Forum

NYC Ruling Favors Modular Construction
Original Comment:
The Supreme Court of New York County recently issued a ruling favorable to the modular construction industry. The court, Judge Eileen Rakower presiding, denied a petition from the Mechanical Contractors Association which sought to reverse a decision made by the NYC Department of Buildings. The union’s position was that certain plumbing and fire suppression work was to be performed only by, or under the direct and continuous supervision of, a licensed master plumber and licensed master fire suppression contractor.

The court ruled unanimously that the Department was within their authority to determine that these activities do not apply to off-site, factory-based assembly of modular construction units. The Court supported the Department’s assertion that assembly work performed at a location other than the jobsite is not plumbing or fire suppression work as defined in the Administrative Code and those terms do not apply to work done offsite prior to its incorporation into a building or jobsite.

This decision removes uncertainty and a major barrier to continued modular construction projects in New York, where affordable housing projects are in high demand. While this is good news for the industry, we can and should expect more challenges along these lines.

View the complete ruling here >>
Started on May 27, 2015 by Liz Burnett
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Additional Comments:
Steve,

Great feedback! We anticipate that our industry will face more changes and challenges as a result of this ruling and similar rulings in other states. MBI's Government Affairs Committee regularly monitors all legislation and regulations across North America for potential impact on the industry. We also rely on our members on the ground to help be our eyes and ears. Please contact MBI with updates or news on any issues like these so we can address them in a coordinated and united manner.
Updated on June 3, 2015 by Liz Burnett

The “Supreme Court” of the State of New York is the trial-level court and hears both criminal and civil cases. There is one court for each county, including NYC. NYC’s Supreme Court hears exclusively civil matter. Decisions from this court are appealed to New York State Court of Appeals.

You will note in the opinion, the court writes, “assembly performed at a location other than the jobsite is not plumbing or fire suppression work is rationally based, is not arbitrary and capricious, and is entitled to deference” This “rationally based” terminology is used in most cases where the court is asked to review the constitutionality of a state statue, and where business and commerce are involved as opposed to some protected class of citizen (such as a statute based on race, creed, color, age, national origin, etc.) In the case of statues regulating commerce, the state agency is given “deference” provided there is some plausible, rational bases for the law and the law is not arbitrary and capricious, which is almost always the case. Similarly, if the State had passed a law requiring that, in modular buildings, all plumbing and fire suppression work must be performed only by, or under the direct and continuing supervision of a licensed master plumber or a licensed master fire suppression piping contractor, that law would have also received the same rational basis review and the law in that form would have received the same deference. To that end, the modular industry is fortunate that the DOB passed the law favorable to the modular industry.

As a result, while this NYC Supreme Court decision may be appealed to the New York State Court of Appeals, it is not likely that the appellate court will reverse the NYC Supreme Court decision. As pointed out in the above article, this is not to say that the NY Legislature cannot pass a law amending the DOB regulations to require plumbing and fire suppression work in modular buildings to be performed by or under the supervision of NY licensed plumbers or fire suppression contractor. The association should be working with modular manufacturers and contractors located in the State of New York, in preparation to lobby against that effort if and when it starts. Steve Snyder, Esquire, stevenrsnyderesq@gmail.com (717) 975-7799
Updated on June 2, 2015 by Steven Snyder

In the text of the ruling, the following is an extract:

The Department of Building's determination that "modular

. . . assembly performed at a location other than the jobsite is not plumbing or fire suppression work as . . . defined in the Administrative Code and that those terms do not apply to work done offsite prior to its incorporation into a building or jobsite,...


What are the chances of an organized effort to amend / change the definition in the NY Administrative Code? That would appear to be the next area of vulnerability that will be targeted, similar to the ongoing and current efforts in CA.

Do we have any inside track in order to be appraised or made aware of any such efforts?
Updated on June 1, 2015 by Daniel Arevalo

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