Search

Stay Informed


SUBSCRIBE

February 19, 2019

The Whereabouts of Weed: Zoning Implications of the Medical Marijuana Act

The Legal Intelligencer

(by Krista-Ann M. Staley and Jenn L. Malik)

In 2016, Pennsylvania joined several other states in enacting legislation legalizing the use or possession of medical marijuana within its borders. Inherent in adopting this legislation is the regulation of the various retailers and manufacturers charged with supplying legal green to licensed users of medical marijuana. Now that the commonwealth has legislated the “how” of medical marijuana use, local governing bodies are taxed with legislating the “where.” The following addresses state and local regulation concerning the zoning of the medical marijuana industry.

State Regulation of Medical Marijuana Organizations

 The Medical Marijuana Act (the act), 35 P.S. Section 10231.101 et seq., authorizes the Pennsylvania Department of Health (the department) to issue permits to “medical marijuana organizations” (MMOs), bifurcated by the act into two categories—namely dispensaries and grower/processors. As the terms suggest, dispensaries are authorized by the department to dispense medical marijuana and grower/processors are permitted by the department to grow and process medical marijuana. The act required the department to divide the commonwealth into regions and to regulate the number of permits issued per region. As a result, the department essentially regulates the amount of medical marijuana grown, manufactured and sold in each region. (The act required the department to establish at least three regions and the department actually established six regions). The department is initially only permitted to issue 25 permits to growers/processors and 50 permits to dispensaries statewide. In addition to the limited number of permits available, stringent state-mandated application requirements and hefty fees (i.e, an initial application fee of $10,000 for grower/processors and $5,000 for dispensaries; a first-year permitting fee of $200,000 for grower/processors and $30,000 for dispensaries; and additional renewal permitting fees) further limit MMO locations in the commonwealth.

Under the act, grower/processors may only conduct their operations within...

EPA Announces its Action Plan to Address PFAS While States Push for Faster Response

Environmental Alert

(by Lindsay P. Howard, Alana E. Fortna and Matthew C. Wood)

On February 14, 2019, the U.S. Environmental Protection Agency (EPA) released its Action Plan for regulating and addressing risks concerning per- and polyfluoroalkyl substances (PFAS), comprising a group of synthetic chemicals with widespread consumer, commercial, and industrial applications.  PFAS refers to a large collection of man-made chemicals that includes PFOA and PFOS (both specifically targeted in the Action Plan), as well as PFBS, perfluorononanoic acid (PFNA), and others referred to as GenX chemicals, and thousands of other compounds.  Although there have been only limited widespread studies, evidence suggests that exposure to some PFAS chemicals can lead to adverse health effects.  PFAS have been widely-used since as early as the 1940s, but public and governmental interest has grown, especially in the last decade, as concerns regarding the potential effects of exposure to PFAS have increased.

Although the Action Plan generally tends to focus on drinking water, EPA notes that exposure may occur through, among other things, consumption of plants and meat in which PFAS have bioaccumulated, consumption of food exposed to PFAS, exposure to commercial and consumer products such as non-stick cookware, stain-resistant carpet and clothing, and pizza boxes.  According to EPA, the ubiquitous nature of PFAS means that most people have been exposed to PFAS chemicals.  In the environment, PFAS have been found in dozens of states, as well as on military bases and tribal land.

EPA developed the Action Plan in response to more than 120,000 comments in the public docket and feedback from federal, state, and local stakeholders who attended the Agency’s two-day National Leadership Summit on PFAS in Washington, D.C.  EPA also gathered input by visiting and engaging with members of PFAS-affected communities in several states.  In a press conference to announce...

February 18, 2019

Public Comment Period Now Open on Proposed Rule Revising Definition of “Waters of the United States

Environmental Alert

(by Lisa M. Bruderly and Gary E. Steinbauer)

On February 14, 2019, the U.S. Environmental Protection Agency and Army Corps of Engineers’ proposed rule to revise the definition of “waters of the United States” (WOTUS) under the Clean Water Act (CWA) was published in the Federal Register.  The publication begins a 60-day public comment period, which ends on April 15, 2019, and comes more than two months after the Agencies released the proposed revised definition of WOTUS to the public on December 11, 2018.  A detailed description of the proposed revised definition of WOTUS was covered in our previous Environmental Alert.

The Agencies are seeking comments on all aspects of their proposal, including the six categories of waters that would categorically be considered to be WOTUS, the 11 categories of waters or features that would not be considered to be WOTUS, and the newly proposed definitions of the terminology referenced in the proposal, such as “tributary” and “adjacent wetland.”  In addition, the Agencies have specifically requested comments on the following issues:

Whether the “significant nexus” test must be a component of the proposed new definition of WOTUS. Whether the definition of “tributary” should be limited to perennial waters only and not those with intermittent flows. Whether “effluent-dependent streams” should be included in the definition of “tributary.” Whether the jurisdictional cut-off for “adjacent wetlands” should be within the wetland or at the wetland’s outer limits. Whether a ditch can be both a “point source” and a WOTUS under the CWA. Whether the Agencies should work with states to develop, and make publicly available, state-of-the-art geospatial data tools that could be used to identify the locations of WOTUS. The appropriate field methodologies for identifying perennial or intermittent flow and navigability.

The proposed new definition of WOTUS would replace the...

February 13, 2019

Pennsylvania climate change initiatives

The PIOGA Press

(by Jean M. Mosites and Casey J. Snyder)

On January 8, Governor Tom Wolf issued the first executive order (EO) of 2019 entitled: Commonwealth Leadership in Addressing Climate Change and Promoting Energy Conservation and Sustainable Governance. The six-page EO is the current administration’s most recent action to address climate effects from greenhouse gas (GHG) emissions.

The EO consists of the following four components, with the majority of the order applying only to Pennsylvania executive agencies:

Committing Pennsylvania to a GHG emissions goal Setting energy performance goals for Pennsylvania agencies Reestablishing the GreenGov council Detailing specific responsibilities for Pennsylvania agencies to achieve the energy performance and GHG goals

Statewide climate reduction goals

The EO includes an important, statewide goal within an order that otherwise applies only to state agencies. The EO commits Pennsylvania to a goal to achieve a 26 percent reduction of GHG from 2005 by 2025 and an 80 percent reduction by 2050. The directive places Pennsylvania in a league with 20 other states with specific GHG reduction targets. Pennsylvania’s goal is more stringent in the short term compared to states like Michigan and less stringent in the long term than goals set by California and New York. Of the states with GHG reduction targets, Pennsylvania is the leading net energy producer and the leading natural gas producer, according to the U. S. Energy Information Agency.

The EO comes during a time when the Trump administration has been critical of climate change initiatives. President Trump announced in 2017 that the U.S. would withdraw from the Paris Accord, and the EPA under his administration is considering rolling back regulation of methane emissions from onshore natural gas production. States are free to commit to their own climate plans, but the EO does not specify precisely how the Commonwealth will achieve the...

February 7, 2019

Examining the Shutdown’s Impact on the EEOC and Charges of Discrimination

The Legal Intelligencer

(by Stephen A. Antonelli)

By the time you are reading this, the federal government will have re-opened, at least temporarily. On Friday, Jan. 25, the president and Congress agreed to end a 35-day partial shutdown of the U.S. government—the longest in history—by passing a continuing resolution that will fund the government through Feb. 15.

Throughout the shutdown, there were numerous news stories concerning the deadlines by which federal courts were expecting to run out of money. As a result, employment litigators and other federal court practitioners questioned whether the shutdown would interfere with their clients’ filing deadlines and how it might affect their practices, generally. Early on, courts were expected to run out of operating funds by Jan. 18. That deadline was later extended to Jan. 25 and then to Feb. 1. Luckily, courts were able to maintain mostly normal operations until the shutdown ended.

Likewise, the shutdown did not affect the National Labor Relations Board (NLRB) or the U.S. Department of Labor (DOL). The same cannot be said for the Equal Employment Opportunity Commission (EEOC), which closed on Dec. 22 and did not reopen until Jan. 28. For the 37 days in between those dates, the EEOC did not process new charges of discrimination and it did not investigate pending charges.

According to the EEOC’s website, during the shutdown, most services were unavailable. Its toll-free phone numbers were unstaffed, its digital portals were inaccessible, and intake interviews were cancelled (unless a charging party was in danger of missing a filing deadline). In other words, unless a deadline was nearing, if parties to a charge of discrimination had questions about the status of a charge, those questions were likely unanswered during the shutdown.

Through a notice posted on its website, the EEOC provided information for potential charging parties as well as to those who...

January 25, 2019

Find the middle ground: The corporate opportunity doctrine when your investors are competitors

Smart Business

(by Jayne Gest)

Consider this scenario: A startup in the artificial intelligence (AI) space develops a unique algorithm. A larger AI firm is interested in this algorithm but isn’t sure it’ll work. The larger company doesn’t want to buy the startup, but it wants a foot in the door on the new technology and is willing to invest. The startup needs funds but is concerned about the competitive issues created by giving the larger company a board seat and waiving the corporate opportunity doctrine.

“A smaller company is under pressure — in this scenario or others like it — to waive the corporate opportunity doctrine,” says Sara M. Antol, shareholder at Babst Calland. “Before you do that, stop and think about what this will mean. You need to determine whether there’s room to compromise with tailored language that serves the purposes of both the company and the investor.”

Smart Business spoke with Antol and Christian A. Farmakis, shareholder and chairman of the board at Babst Calland, about the corporate opportunity doctrine.

What is the corporate opportunity doctrine?

The corporate opportunity doctrine is part of the duty of loyalty imposed upon corporate fiduciaries. It’s not uncommon for a business owner or entity to invest in another company. If the investment is significant, the investor may demand a board seat to help influence the policies and operations of the company. If this person finds out about an opportunity as a board member, the corporate opportunity doctrine stops that director or officer from personally benefiting from an opportunity that would belong to the corporation, if it meets a four-pronged test:

If the corporation is financially able to exploit the opportunity. If the opportunity is within the corporation’s line of business. If the corporation has an interest or expectation relating to the...

January 11, 2019

Newly proposed definition of ‘waters of the United States’ could ease federal compliance burdens for oil and gas sector

The PIOGA Press

(by Lisa M. Bruderly and Gary E. Steinbauer)

On December 11, the U.S. Environmental Protection Agency and Army Corps of Engineers released a much-anticipated proposed rule that would redefine “waters of the United States” (WOTUS) under the Clean Water Act (CWA).1 As compared to the WOTUS definition in the Obama administration’s 2015 “Clean Water Rule” (CWR) (currently applicable in Pennsylvania), the proposed rule would significantly reduce the federal government’s jurisdiction over surface water, including wetlands, nationwide. Should the proposed rule be finalized as writ ten, the oil and gas sector could see significant changes in CWA permitting/compliance obligations associated with well sites and pipeline construction.

Revised definition limits federal government’s CWA jurisdiction

The proposed rule’s WOTUS definition is intended to provide predictability and consistency in identifying federally regulated surface waters. The agencies state the proposed WOTUS definition is “straightforward” and cost-effective while still being protective of the nation’s navigable waters and respectful of state and tribal authority over their land and water resources.

The proposal focuses on surface waters that are “physically and meaningfully connected to traditional navigable waters,” and relies largely on the “relatively permanent water” jurisdictional test established in the late Justice Antonin Scalia’s plurality opinion in United States v. Rapanos, 547 U.S. 715 (2006). The proposed rule includes the following six categories of waters that are WOTUS and also includes 11 categories of waters or features that are not WOTUS:

WOTUS includes

Traditional navigable waters, including territorial seas (TNWs) Tributaries that contribute perennial or intermittent flow to TNWs Ditches that (a) are TNWs, (b) are constructed in a tributary, (c) relocate or alter a tributary such that they are a tributary, or (d) are constructed in an adjacent wetland so long as they meet the definition of tributary Lakes and ponds that (a) are TNWs, (b) contribute...

Work It Out—Conflict Resolution for Business Owners

The Legal Intelligencer

(by Kevin K. Douglass)

Many closely-held business owners successfully ignore disagreements with co-owners for years or even decades. Understandably, there is always a more pressing and important business matter that merits immediate attention. Also, particularly in family-owned businesses, contentious issues may be “overlooked” to preserve family harmony. Unfortunately, issues that fester for years can suddenly and dramatically spiral out of control and result in expensive, harmful and sometimes embarrassing litigation. Even after litigation is threatened or commenced, or a controversy between owners otherwise escalates, business owners should remain open to the possibility of resolution through means other than litigation. These options, including mediation, are available for co-owners to address contentious issues quietly, economically and with dignity.

Recognizing There Is a Problem

A common refrain among business owners is that they were “blind-sided” when a co-owner turned aggressive, hired an attorney and began making demands that soon led to litigation. It can sometimes be difficult to pinpoint the underlying reasons for the disagreement and the triggering event that causes the controversy to bubble to the surface. This is especially true when owner animosity or even anger makes it more difficult to fully understand and resolve the underlying problem.

From a legal standpoint, even before a conflict arises, it is important to analyze the rights of each owner, including the terms of applicable agreements and documents (e.g., shareholder, partnership or operating agreements, employment agreements, buy/sell agreements, by-laws, minutes, confidentiality and noncompete provisions), as well as the statutory and common law rights each may have. It is not unusual for disgruntled owners to raise a myriad of complaints and claim damages for alleged injuries suffered directly by the owner or derivatively to the business itself. The possible allegations may include the breach of the terms of the various agreements between the owners, lack of...

January 10, 2019

EPA and Army Corps Again Propose to Redefine ‘Waters of the United States’

The Legal Intelligencer

(by Lisa M. Bruderly)

On Dec. 11, the U.S. Environmental Protection Agency and Army Corps of Engineers (collectively, the agencies) released a long-awaited proposed rule that would redefine “waters of the United States” (WOTUS) under the Clean Water Act (CWA) and dramatically alter the federal government’s jurisdiction over surface water, including wetlands, throughout the United States. The Trump administration’s proposed rule is intended to replace the Obama administration’s 2015 rule defining WOTUS, known as the “Clean Water Rule” (CWR). The purpose of the 253-page proposed rule is to provide clarity, predictability and consistency in identifying federally regulated waters. The public comment period on the proposed rule will be open for 60 days after formal publication in the Federal Register.

Earlier WOTUS Actions by the Trump Administration

Since taking office, President Donald Trump has prioritized rolling back the CWR’s definition of WOTUS, which is widely regarded as expanding the scope of federal CWA jurisdiction. In February 2017, the president’s Executive Order 13778 directed the agencies to publish a proposed rule rescinding or revising the CWR and to consider defining WOTUS in a manner consistent with the narrower interpretation of WOTUS adopted in Justice Antonin Scalia’s plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006). Scalia’s opinion limits WOTUS to include only relatively permanent, standing or flowing bodies of water. In contrast, the CWR relied heavily on Justice Anthony Kennedy’s concurring opinion in Rapanos, which adopted a “significant nexus” test for CWA jurisdiction. These actions and others by the Trump administration and related judicial decisions have resulted in the current, unique and confusing situation in which the CWR is enjoined in 28 states but in effect in 22 others, including Pennsylvania.

Proposed WOTUS Rule

The agencies describe the proposed rule as “straightforward” and cost-effective, while still protective of navigable waters and consistent with statutory authority....

January 2, 2019

Surviving PADEP and USEPA Environmental Inspections

PA Chamber™ Pennsylvania Environmental Laws and Regulations Guidebook

(by Colleen Grace Donofrio, Michael H. Winek and Chester R. Babst III)

This white paper describes a combined legal/technical approach to help companies minimize potential liabilities that can result from environmental inspections. This approach has been followed successfully by the authors and their clients at many industrial manufacturing facilities. The need for an organized response to enforcement efforts remains a high priority for facilities in light of the changing enforcement priority designations by the Pennsylvania Department of Environmental Protection (“PADEP”) and the U.S. Environmental Protection Agency (“USEPA”) and the potential severity of civil and/or criminal enforcement actions that can be initiated based on findings resulting from environmental inspections.

In order to survive a PADEP and/or USEPA inspection, facilities must: be prepared in advance of the inspection; fully participate in the inspection in a courteous, organized manner; and promptly follow up on the inspection results. Success largely depends on what facilities do during all three phases of the inspection process, not just during the on-site inspection phase itself. The magnitude of any proposed civil penalties can be greatly reduced by following the three-phased approach described in detail below and by applying as much effort, and in many cases more effort, into preparing for the inspection and on following up after an inspection as facilities do during the on-site inspection itself. Facilities are best prepared to survive an inspection if it is assumed that an inspection could occur at any time. In order to limit potential exposure arising from an environmental inspection, it is prudent to put a proactive plan in place today. Such a plan should include actions taken well in advance of receiving notification of an upcoming inspection, as well as actions to be taken during and immediately following the inspection.

Pre-Inspection...

Financing for founders: A primer on SAFEs and their use in early-stage financing

Smart Business

(by Jayne Gest)

In 2013, San Francisco seed accelerator Y Combinator created a Simple Agreement for Future Equity (SAFE), which can be used in lieu of a convertible note. SAFEs spread throughout the California investment community. Now they’re entering regions like Pittsburgh. Investors, however, haven’t always embraced SAFEs as a reasonable vehicle for seed investment. They may be hesitant or uncomfortable with them.

Christian A. Farmakis, shareholder and chairman of the board at Babst Calland, first encountered SAFEs a few years ago when making a personal investment.

“I didn’t know much about it at the time. I initially thought, ‘How is this different than a convertible note?’” he says. “I read it and thought: ‘If the investment goes well, I’m largely in the same position. If the investment doesn’t go well, I will never be repaid, but I never expected to be.’ So, I signed it.”

Smart Business spoke with Farmakis about what entrepreneurs and investors need to understand about SAFEs.

What are the similarities and differences between SAFEs and convertible notes?

A SAFE is essentially a warrant (a contractual right to purchase equity upon the occurrence of a future triggering event, like a later priced investment round), but with the purchase price paid upfront.

SAFEs are like convertible notes in many ways. They can (a) include a discount on the per share price — a 20 percent discount would provide the investor 125 shares rather than 100; (b) include a valuation cap, capping the investor dilution when the triggering event occurs; and (c) give pricing protection for early investors. Because both are early-stage investment vehicles, the price per equity unit is not determined because the company has no company valuation.

A convertible note is a debt instrument. A SAFE is a contract. As such, a convertible note typically earns interest while it remains...

Babst Calland Names Calfe, Cooper, Fortna and James Shareholders

PITTSBURGH, January 2, 2019 – Babst Calland recently named Meredith L. Calfe, Kate H. Cooper, Alana E. Fortna and Rachel E. James shareholders in the Firm.

Meredith Calfe, a member of the Firm’s Energy and Natural Resources Group, concentrates her practice on counseling oil and gas clients on mineral-related transaction matters, including title examination, due diligence and curative work.

Ms. Calfe is a 2009 graduate of the University of Pittsburgh School of Law.

Kate Cooper, a member of the Firm’s Corporate and Commercial Group, counsels for-profit and non-profit entities in connection with mergers, acquisitions and divestitures, and a broad range of general corporate matters, including business planning and structuring, commercial contracts, securities law matters and governance issues.

Ms. Cooper is a 2010 graduate, cum laude, of Boston College Law School.

Alana Fortna is a member of the Firm’s Litigation, Environmental, Employment and Labor, and Emerging Technologies groups. Ms. Fortna represents clients in complex commercial litigation with a focus primarily on environmental litigation, including large-scale cost recovery actions under CERCLA and state law statutes, actions seeking injunctive relief under RCRA, and citizens’ suits brought under various federal statutes and regulatory programs. She also leverages her litigation experience to help companies and other entities with emerging technologies strike a balance between innovation and risk management.

Ms. Fortna is a 2010 graduate, magna cum laude, of Duquesne University School of Law.

Rachel James, a member of the Firm’s Energy and Natural Resources Group, represents energy clients on oil, gas and mineral-related transaction matters, including title examination, due diligence activities, curative work and the acquisition and disposition of oil and gas fee and leasehold assets.

Ms. James is a 2009 graduate of the University of Pittsburgh School of Law.

January 1, 2019

Oil and Gas Development in West Virginia Involving Unknown or Unleased Parties

Institute for Energy Law Oil & Gas E-Report

(by Joshua F. Hall, Nikolas Tysiak and Jason Zoeller)

West Virginia law presents unique challenges regarding jointly owned property in situations where a minority owner cannot be identified, is not available or refuses to join in the leasing of oil and gas. It is not uncommon for oil and gas rights in West Virginia to be owned by members of the same family for several generations, and the result is that an operator may need to approach multiple parties to lease a single parcel. Historically, West Virginia law has placed strict requirements on a lessee in leasing cotenants and required the consent of all parties before oil and gas operations could commence. However, when leasing all cotenants in an oil and gas property is not feasible, there are several statutory options available in West Virginia that may provide relief to an operator, including a new Cotenancy Modernization and Majority Protection Act that was passed this year.

For the full article, click here.

For the full report, click here.

December 20, 2018

Municipal Regulation of Agricultural Operations in Pennsylvania

The Legal Intelligencer

(by Blaine A. Lucas and Alyssa E. Golfieri)

Pennsylvania municipalities are “creatures of the state” and thus may only exercise those powers expressly and implicitly delegated to them by the General Assembly. One area in which municipalities have been delegated authority is the regulation of land uses. The Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq., establishes the framework for zoning and subdivision and land development regulation in Pennsylvania. However, a municipality’s powers are not without limitation. The General Assembly, by statute, has constrained the manner and degree to which municipalities can regulate certain types of land use. The Pennsylvania Right-to-Farm Act, 3 P.S. Section 951 et seq., (RTFA) and the Pennsylvania Agricultural, Communities and Rural Environment Act, 3 Pa.C.S. Section 311 et seq., (ACRE) are two such examples.

The RTFA was enacted in 1982 for the purpose of limiting the circumstances under which “normal agricultural operations” may be the subject matter of nuisance suits and zoning regulations. Specifically, the RTFA mandates that every municipality regulating a public nuisance exempt from its scope “normal agricultural operations” as long as the operations do not have a “direct adverse effect on the public health and safety.” It also requires municipalities to permit the direct sale of agricultural commodities on property owned and operated by a landowner who produces 50 percent or more of the commodities sold, regardless of applicable zoning regulations.

In 2005, the General Assembly recognized that owners and operators of normal agricultural operations needed a cost and time efficient way to challenge local regulatory actions running afoul of the RTFA and, in response, enacted ACRE. ACRE provides a means for those engaged in these activities to challenge and seek the invalidation of unauthorized ordinances or enforcement actions related to those ordinances. If an owner or operator believes a...

December 18, 2018

U.S. EPA and Army Corps Propose Redefining “Waters of the United States” Under the Clean Water Act

Environmental Alert

(by Lisa M. Bruderly and Gary E. Steinbauer)

Last week, the U.S. Environmental Protection Agency and Army Corps of Engineers (collectively, the Agencies) released a long-awaited proposed rule that would redefine “waters of the United States” (WOTUS) under the Clean Water Act (CWA) and dramatically alter the federal government’s jurisdiction over surface water, including wetlands, throughout the U.S. The proposed rule is part of the Trump administration’s efforts to rescind a 2015 rule defining WOTUS, known as the “Clean Water Rule” (CWR), that was promulgated by the Agencies during the Obama administration and to provide clarity, predictability and consistency in identifying federally regulated waters. The public will have 60 days to comment once the new proposed definition of WOTUS is published in the Federal Register. This Alert provides an overview of the 253-page proposal, identifies some of the key proposed changes, and discusses opportunities to comment on the proposed new definition of WOTUS and other questions posed by the Agencies.

Relevant Background

Since taking office, President Donald Trump has prioritized rolling back the CWR’s definition of WOTUS, which is widely regarded as expanding the scope of the federal government’s jurisdiction under the CWA. In February 2017, the president signed Executive Order 13778 directing the Agencies to review the CWR’s definition of WOTUS and to publish a proposed rule rescinding or revising the CWR. The Order also directs the Agencies to consider defining WOTUS in a manner consistent with the narrower interpretation of WOTUS adopted in Justice Antonin Scalia’s plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006). Justice Scalia’s opinion limits WOTUS to include only relatively permanent, standing or flowing bodies of water. In contrast, the CWR relied heavily on Justice Anthony Kennedy’s concurring opinion in Rapanos, which adopted a “significant nexus” test for jurisdiction under the...

December 12, 2018

Comment period ending for EPA’s proposal to reconsider key parts of methane rule

The PIOGA Press

(by Meredith Odato Graham and Gary E. Steinbauer)

In 2016, the U.S. Environmental Protection Agency finalized a rule that established first-time federal standards for methane emissions from new, modified, and reconstructed sources in the oil and gas industry. The so-called new source performance standards (NSPS) at 40 C.F.R. 60, Subpart OOOOa (Subpart OOOOa), have since become the subject of considerable debate and litigation. Consistent with the Trump administration’s other deregulatory efforts, EPA published a proposal in the Federal Register in October that aims to reduce the Subpart OOOOa regulatory burden for industry.

EPA estimates that the proposed improvements to the rule could save industry tens of millions of dollars in compliance costs each year. EPA held a public hearing in November and is accepting stakeholder comments through December 17.

Significant changes to applicable requirements

The 52-page rulemaking notice describes several proposed amendments to Subpart OOOOa. EPA is addressing certain issues that were presented to the agency in formal petitions for reconsideration, as well as “other implementation issues and technical corrections” brought to the agency’s attention after Subpart OOOOa was promulgated. For example, it is proposing significant changes to the requirements for fugitive emissions components, including revised leak monitoring frequencies. Whereas the current regulation subjects well sites to semiannual leak monitoring, the revised Subpart OOOOa would require monitoring every other year for low production well sites and annually for all other well sites. The required frequency of compressor station monitoring would be reduced from quarterly to either semiannual or annual. (The proposal includes distinct monitoring requirements for well sites and compressor stations on the Alaska North Slope.) EPA also is proposing to reduce the schedule for repairing leaks from 30 to 60 days. Finally, EPA proposes to no longer require monitoring surveys at well sites once all major production...

November 30, 2018

Sincerely Held Secular Beliefs Do Not Qualify for Religious Exemption From Flu Shot Policy

The Legal Intelligencer

(by Stephen A. Antonelli)

It’s that time of year again. The days are getting shorter, the weather is getting colder, and families are starting to think about the menu for their Thanksgiving dinners.

And I still haven’t gotten my flu shot.

It’s on my to-do list, I promise. It’s not that I don’t like going to the doctor, or that I am particularly afraid of needles, but when it comes to the flu shot, for some reason, I tend to procrastinate. Some employees who work in the health care industry do not have the option of procrastinating when it comes to getting a flu vaccine because their employer requires them to be vaccinated.

The Center for Disease Control (CDC), the Advisory Committee on Immunization Practices (ACIP), and the Healthcare Infection Control Practices Advisory Committee (HICPAC) recommend that all U.S. health care workers get vaccinated annually against influenza. This recommendation applies to physicians, nurses, nursing assistants, therapists, technicians, emergency medical service personnel and anyone potentially exposed to infectious agents that can be transmitted to and from health care workers and patients. As a result, many health care employers require their employees to get vaccinated annually.

Employers that mandate flu vaccinations should be sure to allow employees to request exemptions to their flu shot policies for medical reasons, including but not limited to, allergies to the vaccine or its components or a history of Guillain-Barré syndrome. Employers should also allow an exemption to employees with sincerely held religious beliefs that conflict with receiving the vaccination. Employers may then require employees who have been granted an exemption to wear a mask when interacting with patients or coworkers. Not surprisingly, mandatory flu vaccinations policies have been the subject of litigation, including several cases filed by the Equal Employment Opportunity Commission  (EEOC).

Near the end of 2017, in Fallon...

Paving the Way for Autonomous Vehicles

TriState Infrastructure Summit 

On Tuesday, November 27, 2018, 160 industry and public sector representatives attended the 2018 TriState Infrastructure Summit, presented by the TriState Infrastructure Council and its partners, at the Regional Learning Alliance in Cranberry Township, Pa.  The Summit addressed transportation and infrastructure needs in the Ohio River Valley integral to the petrochemical industry and related economic growth in the region.

Stan Caldwell, CMU Executive Director of Traffic21 and Mobility21 participated with Justine Kasznica of law firm Babst Calland’s Mobility, Transport and Safety practice on the panel Paving the Way for Autonomous Vehicles hosted by Babst Calland.  The presentation included a discussion about autonomous vehicles in the broader context of infrastructure design and development, and issues related to urban infrastructure and research and advancements in mobility technologies.

O. Chris Jackson, Production Unit Manager for Logistics, Shell Polymers, Pennsylvania, was the keynote speaker for the event on Regional Transportation and Infrastructure Considerations for a World Class Petrochemical Complex.

For more information, including a complete agenda for the TriState Infrastructure Summit, click here.

Issues Redefine Regulatory Landscape

The American Oil & Gas Reporter

(by Jean M. Mosites, Keith J. Coyle and Krista-Ann M. Staley)

PITTSBURGH–The Marcellus and Utica shale plays account for some 30 percent of total U.S. natural gas output, compared with only 3 percent a decade ago. The Appalachian Basin’s rapid growth in natural gas and natural gas liquids production has occurred despite relatively low natural gas prices, driven by greater well productivity from improved drilling and completion techniques, including longer laterals and optimized well spacing.

Additionally, infrastructure build-out in the region, including the development of significant interstate pipeline projects featuring large-scale transmission of natural gas and NGLs (such as the Rover, Nexus and Mariner East 1 projects), has allowed access to Northeast population centers to increase demand for Appalachian-derived natural gas resources. Continued innovations in the industry, such as improvements to water logistics, likely will be important to reduce operational costs and further improve efficiency to maintain growth.

While the industry continues forging ahead in the Marcellus, Utica and conventional Appalachian plays, the legal landscape continues to evolve with everchanging federal and state environmental and safety regulations, along with a variety of local government requirements across the basin. The federal and state courts, legislatures and regulatory agencies continue to address a variety of issues that affect all facets of oil and gas development in the multistate region.

These decisions and developments not only affect drilling and production, but also the midstream and transportation infrastructure that is so critical to Appalachian producers’ ability to market their production. This article summarizes developments in the legal and regulatory landscape facing oil and gas producers and midstream operators in the Appalachian Basin.

In October 2016, the Marcellus Shale Coalition filed a petition in the Pennsylvania Commonwealth Court challenging seven new provisions in 25 Pa. Code Chapter 78a, a set of...

November 21, 2018

Commonwealth Court upholds ordinance allowing drilling in all zoning districts

The PIOGA Press

(by Blaine A. Lucas and Robert Max Junker)

On October 26, the Pennsylvania Commonwealth Court published an en banc opinion in Frederick v. Allegheny Township Zoning Hearing Board, et al., No. 2295 C.D. 2015, 2018 WL 5303462 (Pa. Cmwlth. Oct. 26, 2018) rejecting a challenge to the validity of the Allegheny Township, Westmoreland County, zoning ordinance. The court addressed the contention of oil and gas industry opponents that an unconventional natural gas well pad can be permitted only in an industrial zoning district. After reviewing the detailed record developed in the substantive validity challenge decided by the township Zoning Hearing Board and addressing recent Pennsylvania Supreme Court decisions on shale gas drilling, the court in a 5-2 decision rejected this “one size fits all” proposition. It found that state law empowers municipalities to determine where well sites are appropriate and compatible with other land uses within their boundaries.

Background

In 2010, the township Board of Supervisors enacted a zoning ordinance amendment that allowed oil and gas well operations in all zoning districts as a use permitted “as of right,” provided the applicant satisfied numerous specified standards to protect the public health, safety, and welfare. A use permitted “as of right” requires administrative approval; it does not require public notice or a hearing.

In 2014, CNX Gas Company, LLC applied to the township for a zoning permit to develop an unconventional well pad (Porter Pad) in the R-2 Agricultural/Residential Zoning District and submitted all the information required by the 2010 ordinance. Once CNX received the zoning permit, three nearby individuals (the objectors) appealed to the board. They challenged the granting of the permit and raised a substantive validity challenge to the 2010 ordinance. The objectors claimed that based on the Pennsylvania Supreme Court’s decision in Robinson Township v. Commonwealth,...

Water law update: Recent developments expected to affect the natural gas industry

The PIOGA Press

(by Lisa M. Bruderly and Gary E. Steinbauer)

Recent developments regarding two facets of Clean Water Act (CWA) regulation could affect natural gas pipeline siting/permitting and exploration and production activities in Pennsylvania and elsewhere. The first issue is the ongoing challenge to define “waters of the United States,” with the definition recently changing in Pennsylvania. The second issue is the concept of Clean Water Act liability extending to releases to ground water that eventually make their way to surface water (known as the “conduit” theory of liability).

Definition of “water of the United States”

It is widely known that in 2015 the Obama administration promulgated a new definition of the term “water of the United States” (WOTUS) in a rule commonly referred to as the Clean Water Rule (CWR). Industry and states promptly filed lawsuits challenging the CWR as an unlawful expansion of the types of waters subject to regulation under the CWA. Among other issues, the expanded definition increased the types of waters that were subject to U.S. Army Corps of Engineers and Environmental Protection Agency (EPA) jurisdiction. With the increased scope of federal jurisdiction, a pipeline project or exploration and production activities could impact a larger quantity of waters that were now considered to be regulated and require more complicated, costly and time-consuming permitting under Section 404 of the CWA. In some instances, a project could not be permitted due to the extent of impacts.

Almost immediately after the CWR was issued, lawsuits challenged it. Until 2018, the CWR was stayed (i.e., suspended) throughout the United States based on a nationwide injunction issued by the Sixth Circuit Court of Appeals. The nationwide judicial stay was lifted following a decision by the U.S. Supreme Court on January 22, 2018, which invalidated the Sixth Circuit’s nationwide injunction, holding...

November 19, 2018

Babst Calland Partners with CMU and Industry Leaders to Discuss Mobility Technology

On Friday, November 9, 2018, Babst Calland participated in the Deployment Partner Consortium Symposium at Carnegie Mellon University organized and hosted by Traffic21 Institute and Mobility21 Transportation Center.  The Symposium brought together thought leaders in the mobility and transportation space to identify real-world transportation needs, as well as the policy and research challenges that come with advancing technology.

Johanna Jochum, attorney in Babst Calland’s Mobility, Transport and Safety and Emerging Technologies practice groups, spoke on the government panel regarding regulatory challenges at the federal level for autonomous vehicle technology. Ms. Jochum is based in Babst Calland’s Washington, D.C. office, which has direct ties to the federal regulators in transportation.

Babst Calland is a new member of Mobility21’s Deployment Partner Consortium, along with other industry and public partners.  Mobility21, the National University Transportation Center for Improving Mobility, aims to research, develop and deploy cutting edge technologies and policies, and develop educational programs to lay the groundwork for next-generation vehicles and mobility services.  Read more about Mobility21 and the Symposium at Mobility21 News.

Carnegie Mellon University’s Traffic21 Institute, which is housed in the Heinz College of Information Systems and Public Policy, was founded on the motto of Research, Development and Deployment encouraging researchers to address real-world transportation needs through partnerships. Since 2012, Carnegie Mellon University has maintained the Deployment Partner Consortium, and it continues that tradition with its US DOT funded National University Transportation Center, Mobility21, with the goal of improving the mobility of people and goods.

“Carnegie Mellon University has been at the forefront of autonomous vehicle technology for many years and continues its thought leadership through Traffic21, Mobility21 and its smart cities institute, Metro21,” said Alana Fortna, Pittsburgh-based litigation attorney and member of Babst Calland’s Emerging Technologies practice group.  “Carnegie Mellon University has had such a positive...

November 1, 2018

U.S. EPA Seeks Comment on Rollback of New Source Methane Standards

Energy Alert

(by Michael H. Winek, Meredith Odato Graham and Gary E. Steinbauer)

In 2016, U.S. EPA finalized a rule that established first-time federal standards for methane emissions from new, modified and reconstructed sources in the oil and gas industry.  The     so-called new source performance standards (NSPS) at 40 C.F.R. 60, Subpart OOOOa (Subpart OOOOa) have since become the subject of considerable debate and litigation.  Consistent with the Trump administration’s other deregulatory efforts, EPA published a proposal in the Federal Register on October 15, 2018 that aims to reduce the Subpart OOOOa regulatory burden for industry.  The agency has already received several comments from concerned citizens who oppose the proposal.  EPA will continue to accept stakeholder feedback through mid-December.

Significant Changes to Applicable Requirements

The 52-page rulemaking notice describes several proposed amendments to Subpart OOOOa.  EPA is addressing certain issues that were presented to the agency in formal petitions for reconsideration, as well as “other implementation issues and technical corrections” brought to the agency’s attention after Subpart OOOOa was promulgated.  For example, it is proposing significant changes to the requirements for fugitive emissions components, including revised leak monitoring frequencies.  Whereas the current regulation subjects well sites to semiannual leak monitoring, the revised Subpart OOOOa would require monitoring every other year for low production well sites and annually for all other well sites.  The required frequency of compressor station monitoring would be reduced from quarterly to either semiannual or annual. (The proposal includes distinct monitoring requirements for well sites and compressor stations on the Alaska North Slope.) EPA is also proposing to no longer require monitoring surveys at well sites once all major production and processing equipment is removed.  These are just a few of the many technical issues for which the agency is seeking public input.  Operators should review...

Pennsylvania Supreme Court Rules on Injunctive Relief for the Marcellus Shale Coalition

Insitute for Energy Law Oil & Gas E-Report

(by Jean M. Mosites)

On June 1, 2018, the Pennsylvania Supreme Court largely affirmed and partially vacated a November 8, 2016 temporary injunction granted to the Marcellus Shale Coalition (MSC) in its challenge to several new regulations that had been promulgated by the Pennsylvania Environmental Quality Board on October 8, 2016.

MSC had filed a Petition for Review of limited sections of the new Chapter 78a Regulations on October 13, 2016, seeking expedited relief in the form of a temporary injunction of the challenged regulations pending review and resolution on the merits.

For the full article, click here.

Pennsylvania Supreme Court Reverses Approval of Gas Well Pad on Narrow Grounds, But Suggests that Municipalities May Permit Unconventional Natural Gas Drilling in any and all Zoning Districts

Institute for Energy Law Oil & Gas E-Report

(by Blaine A. Lucas)

Robinson Township Revisited

The parameters of Pennsylvania local government regulation of the oil and gas industry continue to be refined and left uncertain by the ongoing judicial fallout from the Pennsylvania Supreme Court’s 2013 decision in Robinson Township v. Commonwealth. In Robinson Township, the Court invalidated two sections of Pennsylvania’s updated  Oil and Gas Act (Act 13) limiting the authority of local governments to regulate oil and gas operations. The three-Justice plurality decision was based on a reinvigorated interpretation and application of the Article I, Section 27 the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA), which states:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

For the full article, click here.