Court Ruling Could Open Up Door for Stop Notice Statute Challenges in Western States
Mississippi's Fifth Circuit Court of Appeals' decision last month that rendered its Stop Notice statute unconstitutional could very well foster challenges in at least five other states with similar laws on the books. That includes California.
"I'm sure some GC will take a shot at it," said James Reed, Esq., partner at Baird Williams & Greer LLP. However, there could be enough statutory language distinctions that would likely render such challenges unsuccessful.
The case is of interest in Mississippi and anywhere a challenge is presented because, in many instances, the only means of placing any payment pressure on debtors is to file a Stop Notice. Without this option, material suppliers and subcontractors are more likely to be reluctant in extending credit for construction projects.
- Brian Shappell, CBA, CICP, NACM staff writer
MLBS customers can find deeper analysis on this story and many more affecting the construction industry in the Lien Navigator’s “News Makers” section at www.nacmsts.com.