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April 16, 2018

Fourth Circuit’s “Conduit Theory” Decision Extends CWA Liability for Migrating Groundwater Contamination

Environmental Alert (by Lisa M. Bruderly and Gary E. Steinbauer) On April 12, 2018, the U.S. Court of Appeals for the Fourth Circuit in Upstate Forever v. Kinder Morgan Energy Partners, L.P., No 17-1640, held that the Clean Water Act (CWA) regulates point source discharges that reach “navigable waters” through groundwater with a “direct hydrologic connection” to the surface water. With this decision, the Fourth Circuit (which includes Maryland, North Carolina, South Carolina, Virginia and West Virginia) has joined the Ninth Circuit in recognizing the so-called groundwater “conduit theory” of liability under the CWA, a theory environmental groups are relying upon in several CWA citizen suits across the country. Under the groundwater “conduit theory,” separately regulated and permitted wastewater collection basins, impoundments, wells, and/or pipelines that result in groundwater contamination could be the targets for CWA liability, even though it is widely accepted that the CWA does not regulate discharges to groundwater itself. These cases have broad implications for many industries, including steelmaking, pipelines, mining, chemical manufacturing, oil and gas development, and utilities. Background and District Court Decision The Upstate Forever case dates back to 2016, when two environmental organizations filed a lawsuit alleging CWA violations stemming from a 2014 pipeline leak. According to the complaint, 369,000 gallons of petroleum products leaked from an underground pipeline. The plaintiffs alleged that the pipeline contents seeped into groundwater and later into two nearby creeks and their adjacent wetlands downgradient from the leak. The leak was fixed within a few days of discovery and approximately 209,000 gallons of petroleum products were recovered through remediation efforts overseen by a state environmental regulatory agency. The plaintiffs, however, alleged that a plume of petroleum contaminants continued to migrate from groundwater to surface water several years after the leak was fixed. The district court dismissed the case after finding…

April 9, 2018

Taking “Yes” for an Answer; Court Dismisses NPDES Permit Challenge as Non-Justiciable Following Elimination of Problematic Effluent Limit

Environmental Legal Perspective  (by Christopher B. (Kip) Power) In a decision with potential ramifications for challengers of many different types of environmental permits and approvals, the U.S. District Court for the Southern District of West Virginia (the “Court”) recently dismissed a lawsuit filed by the Sanitary Board of the City of Charleston (the “CSB”) seeking to overturn a decision of the Environmental Protection Agency (EPA) regarding the permissible concentrations of copper in discharges from the CSB’s wastewater treatment plant to the Kanawha River. Sanitary Board of the City of Charleston, West Virginia v. Scott Pruitt, et al., Civil Action No. 2:16-cv-03060 (March 29, 2018 Memorandum Opinion and Order) (Goodwin, J.). After two years of litigation (and more than four years of administrative proceedings prior to that), the Court determined that the decision of the West Virginia Department of Environmental Protection (WVDEP) to omit any limit on discharges of copper in the CSB’s most recent National Pollutant Discharge Elimination System (NPDES) permit rendered the CSB’s challenge to EPA’s action “either hypothetical or imminence.” As a result, the Court ruled there was no longer a justiciable “case or controversy” between the parties, depriving it of subject matter jurisdiction over the dispute. The case centered on the WVDEP’s promulgation of statewide limits on allowable levels of copper in streams, acting pursuant to its delegated authority under the federal Clean Water Act (CWA). Using the general formula provided in its rules, the WVDEP translated these in-stream standards into specific effluent limits for copper when it issued a NPDES permit to the CSB in 2012. Recognizing that it could not operate in compliance with the assigned copper effluent limits, the CSB developed the necessary factual information and scientific rationale to support development of an alternative, facility-specific water quality standard (using a procedure known as…

March 28, 2018

Legal Issues Impact Appalachian Gas

The American Oil & Gas Reporter (by Kevin Garber, Blaine Lucas, Keith J. Coyle, and Jay Hammond) PITTSBURGH, PA.–Driven by demand growth in the industrial and electric generation sectors as well as expanding pipeline and liquefied natural gas export volumes, U.S. natural gas consumption is expected to reach record levels this year. However, production also is forecast to soar to new heights, partly as a result of increasing associated gas production in tight oil resource plays. According to U.S. Energy Information Administration projections, dry natural gas production will increase by 6.7 billion cubic feet a day in 2018, outpacing estimated year over-year demand growth. Expecting surging supplies to likely translate into relatively low dry natural gas prices for some time, Appalachian Basin natural gas producers continue to work to reduce costs and improve efficiency, while taking advantage of attractive opportunities. From a business perspective, oil field services remain a primary point of focus for Marcellus and Utica operators in their efforts to reduce costs and improve efficiency, with service providers delivering innovative products to make more productive wells at a lower cost per unit of production. Furthermore, shale gas producers remain focused on consolidating their activities geographically, including selling noncore assets to smaller (often largely debt-financed) operators looking for particular assets less attractive to larger operators (including shallow oil and, in certain circumstances, liquids from shale). Consolidation continues apace in the shallow conventional natural gas production industry as well. Apart from joint ventures, acreage swaps and other traditional transactions, shale gas producers in the Appalachian region also are pursuing more novel operational strategies to reduce costs and increase profits despite relatively steady natural gas prices. These strategies include new makeup water delivery systems, pad sharing, colocation of facilities, and other efforts to reduce duplication of operational outlay. At the same time,…

March 27, 2018

Employers fight to keep up with employment law changes

PA Business Central  Family leave, sexual harassment, sexual orientation discrimination, overtime salary threshold and duties tests, employer health care insurance and related tax reporting requirements, mandatory drug testing, executive compensation, disability benefits claims procedure, contraceptive coverage, legal marijuana use, the proper classification of workers as independent contractors or employees, salaried or hourly, paid or unpaid interns: all are among the labor and employment issues that employers have long been grappling with. Discrimination based on sexual orientation and gender identity The latest change in employment law came on March 7 when The Sixth Circuit Court of Appeals in Cincinnati, Ohio, which covers Kentucky, Michigan, Ohio and Tennessee, held that discrimination against transgender/LBGTQ employees is discrimination based on sex, and therefore, it violates Title VII of the Civil Rights Act of 1964. The court held the opinion in the case EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. of Detroit, Michigan. When the plaintiff, Aimee Stephens, began working as a funeral director, he presented himself as a male and was named Anthony Stephens. Stephens was fired after she informed the funeral home that she would no longer be presenting as a male but would transition and dress as a female. The funeral home argued that Stephens’ continued employment would negatively impact its business clients, and the change in sexual orientation violated the Christian values of the funeral home’s owner. The three-judge panel concluded that the funeral home could not use the Religious Freedom Restoration Act to justify such discrimination, and decided in favor of Stephens. Two weeks earlier, in a 10-3 decision, the Second Circuit Court of Appeals in NYC, whose territory covers Connecticut, New York and Vermont, ruled that Title VII of the Civil Rights Act of 1964 covered sexual orientation discrimination. In its case, Zarde v. Altitude Express, the plaintiff sued his former…

March 26, 2018

PHMSA Eyes Progress in Pipeline Safety Rulemaking Proceedings

Pipeline & Gas Journal  (by Keith Coyle) Having recently filled the two most important political appointments at the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), the Trump administration appears ready to take further action on two rulemaking proceedings that could reshape the nation’s federal safety standards for hazardous liquid and natural gas pipelines. Howard R. Elliott was recently sworn in as PHMSA’s administrator. Elliot brings more than four decades of experience in the freight rail industry to his new leadership position, including expertise in the areas of hazardous material safety and security. He previously received the Association of American Railroads (AAR) Holden-Proefrock Award for lifetime achievement for hazardous materials safety, served on AAR’s Risk Management Working Committee and Security Committee, and is a member of the American Society of Industrial Security and the FBI-DHS Domestic Security Alliance Council. Administrator Elliot’s background and experience suggests that he is well-positioned to lead PHMSA, the federal agency responsible for ensuring the safe transportation of energy products by truck, rail, vessel or pipeline. The same can be said of Elliot’s new deputy, Drue Pearce, who became PHMSA’s newly appointed deputy administrator. Pearce previously served as the federal coordinator for Alaskan Natural Gas Transportation Projects and as an official in the Department of Interior during the George W. Bush administration. She also served as a member of PHMSA’s Technical Pipeline Safety Standards Committee, the federal advisory committee that reviews PHMSA’s proposed pipeline safety regulations, and as a member of the Alaska House of Representatives and Alaska State Senate. Pearce’s prior public service and familiarity with the pipeline industry leaves her well-prepared to assume a significant role at PHMSA, particularly on pipeline safety matters. As the core of the agency’s new leadership team, Elliot and Pearce will play an important part in deciding the fate of two…

March 22, 2018

Thoughts on the Tax Code’s New ‘Harvey Weinstein Rule’

The Legal Intelligencer (by John McCreary) The Tax Cuts and Jobs Act of 2017 inserted a new subsection (q) into Section 162 of the Internal Revenue Code which denies deductions for payments made in settlements of sexual harassment or sexual abuse cases, and “related” attorney fees, when those settlements are subject to a confidentiality agreement: “(q) Payments related to sexual harassment and sexual abuse. No deduction shall be allowed under this chapter for:
  • Any settlement or payment related to sexual harassment or sexual abuse if such a settlement or payment is subject to a nondisclosure agreement, or
  • Attorney fees related to such a settlement or payment.”
This provision was added by amendment in the Senate and accepted by the House in the final enactment. The Conference Committee Report (the report) on the amendment does not disclose the rationale for the change, but it is safe to infer that it was inspired by the sordid revelations about widespread sexual harassment that were making headlines when it was passed on Dec. 20, 2017. See, e.g.https://www.ajc.com/news/world/from-weinstein-lauer-timeline-2017-sexual-harassment-scandals/qBKJmUSZRJqgOzeB9yN2JK/ (published on Dec. 19, 2017). The report contains no interpretive guidance on the meaning of “related to” as used in the statute, nor does it define what is meant by a “nondisclosure agreement.” The report simply notes that while Section 162 generally allows for the deduction of “ordinary and necessary” business expenses, various subsections disallow deductions for certain payments, such as portions of damages awarded under antitrust laws, illegal bribes or kickbacks, and criminal fines. In reaction to the headlines Congress has concluded that confidential payments resolving sexual harassment claims can no longer be considered “ordinary and necessary.” As with many efforts by Congress to provide quick fixes to perceived problems, the unintended consequences of this quick fix will likely create more uncertainty and controversy than will be resolved. A…

March 13, 2018

Developments to watch: Shale Appalachian Basin

The PIOGA Press (by Kevin Garber, Blaine Lucas, Keith Coyle, and Jay Hammond) Driven by demand growth in the industrial and electric generation sectors as well as expanding pipeline and liquefied natural gas export volumes, U.S. natural gas consumption is expected to reach record levels this year. However, production also is forecast to soar to new heights, partly as a result of increasing associated natural gas production in tight oil resource plays. According to U.S. Energy Information Administration projections, dry natural gas production will increase by 6.7 Bcf a day in 2018, outpacing estimated year-over-year demand growth. Expecting surging supplies to likely translate into relatively low dry natural gas prices for some time, Appalachian Basin natural gas producers continue to work to reduce costs and improve efficiency, while taking advantage of attractive opportunities. From a business perspective, oil field services remain a primary point of focus for Marcellus and Utica operators in their efforts to reduce costs and improve efficiency, with service providers delivering innovative products to make more productive wells at a lower cost per unit of production. Furthermore, shale gas producers remain focused on consolidating their activities geographically, including selling noncore assets to smaller (often largely debt-financed) operators looking for particular assets less attractive to larger operators (including shallow oil and, in certain circumstances, liquids from shale). Consolidation continues apace in the shallow conventional natural gas production industry as well. Apart from joint ventures, acreage swaps and other traditional transactions, shale gas producers in the Appalachian region are also pursuing more novel operational strategies to reduce costs and increase profits despite relatively steady natural gas prices. These strategies include new makeup water delivery systems, pad sharing, colocation of facilities and other efforts to reduce duplication of operational outlay. At the same time, there continue to be significant legal developments…

March 9, 2018

Wage Hour Division Announces PAID Program to Assist with FLSA Compliance

Employment and Labor Alert (by John A. McCreary, Stephen A. Antonelli, and Molly E. Meacham) On March 6, 2018, the Wage and Hour Division of the U.S. Department of Labor (WHD) announced a new pilot program, the Payroll Audit Independent Determination (PAID) program, which is intended to encourage employers to identify and correct potentially non-compliant practices. According to DOL’s Q&A page on the PAID program (https://www.dol.gov/whd/PAID/#4) “The PAID program provides a framework for proactive resolution of potential overtime and minimum wage violations under the FLSA. The program’s primary objectives are to resolve such claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed—faster.” PAID will cover potential violations of the FLSA’s overtime and minimum wage requirements, including violations based on alleged “off-the-clock” work, failures to pay overtime at one-and-one-half times the regular rate of pay, or misclassification of employees as exempt from the FLSA’s minimum wage and overtime requirements. Under the program, employers may self-audit their FLSA compliance, and where violations are discovered it must: i. specifically identify the potential violations, ii. identify which employees were affected, iii. identify the timeframes in which each employee was affected, and iv. calculate the amount of back wages the employer believes are owed to each employee. Once these calculations are concluded, the employer will contact WHD to discuss the issues for which it seeks resolution. Unless WHD denies the employer’s request to participate in the program at the outset (which could happen, for example, if the employer is already engaged in litigation over a challenged pay practice), WHD will then inform the employer of the manner in which the employer must submit required information, including the following: i. each of the calculations described above—accompanied by both evidence and explanation concerning…

March 6, 2018

The Clean Water Act goes underground: An Analysis and implications of the Ninth Circuit’s decision in Hawai’i Wildlife Fund v. County of Maui

Trends (by Gary Steinbauer) On February 1, 2018, the U.S. Court of Appeals for the Ninth Circuit Court in Hawai’i Wildlife Fund v. County of Maui, No. 15-17447 (9th Cir.), held that the Clean Water Act (CWA or Act) regulates point source discharges that travel indirectly through groundwater to a jurisdictional surface water—that is, a navigable “water of the United States.” Maui is the first federal appellate court decision in a recent wave of citizen suits by environmental groups relying on the so-called “groundwater conduit” theory of CWA liability. The Fourth Circuit and Sixth Circuit are poised to weigh in next and, in the wake of the Maui decision, the U.S. Environmental Protection Agency (EPA) opened a 90-day public comment period on whether it should clarify or revise its own past statements on the theory and whether it is consistent with the text, structure, and purposes of the CWA. 83 Fed. Reg. 7126 (Feb. 20, 2018). Ninth Circuit requires National Pollutant Discharge Elimination System permit for underground injection of wastewater In Maui, environmental groups sued the county alleging that it violated the CWA when treated sanitary effluent it injected into four permitted underground injection wells traveled some distance through groundwater to the Pacific Ocean. The results of a tracer dye test performed by EPA, as well as other federal and state agencies, showed that 84 days after the dye was injected into two of the county’s four wells, the dye emerged from submarine seeps along the ocean floor a half-mile away. The county’s treated sanitary wastewater reportedly represented one out of every seven gallons of groundwater that entered the ocean near the wastewater treatment plant. The Ninth Circuit affirmed the district court’s decision finding the county liable for an unauthorized discharge under the CWA. Although it disagreed with the district court and held…

February 23, 2018

Regulatory Reform Bills in Pennsylvania’s House of Representatives

Environmental Alert (by Jean M. Mosites and Kevin J. Garber) Over the past several months, members of Pennsylvania’s House of Representatives have introduced bills to address and eliminate regulatory inefficiencies and burdens that affect both individuals and businesses across the Commonwealth. The bills are part of a regulatory reform package included in the House State Government Committee’s Regulatory Overreach Report, released in mid-January, 2018 by committee chair Daryl Metcalfe (R, Butler). These bills, if enacted into law, would significantly change the way regulations are promulgated, revised and enforced in Pennsylvania. These state efforts complement recent federal executive and legislative actions on regulatory reform. Shortly after taking office, President Trump issued two regulatory reform executive orders: (1) Reducing Regulation and Controlling Regulatory Costs (E.O. 13771), also known as the two-for-one executive order, which requires agencies to propose two existing rules for repeal for each additional rule promulgated in and after fiscal year 2017; and (2) Enforcing the Regulatory Reform Agenda (E.O. 13777), which requires federal agencies to designate a Regulatory Reform Officer charged with reviewing and making recommendations for the repeal, replacement, or modification of existing regulations. These executive orders address regulatory reform broadly and the long-term impact remains to be seen. There are several other examples where President Trump has issued executive orders targeting specific regulations or rules promulgated during the Obama administration. In early 2017, Congress used the Congressional Review Act (CRA), which generally authorizes Congress to repeal any rule within 60 calendar days after promulgation, to repeal 14 Obama-era rules, including changes to the stream protection rule under the Office of Surface Mining and to the Bureau of Land Management’s planning procedures. Once a rule is repealed using the CRA, the federal agency is prohibited from reissuing the rule or issuing a new rule “in substantially…

February 21, 2018

What’s Emerging in the Drinking Water?

The Voice  (by Alana E. Fortna) Contaminated water supplies are causing quite the stir and creating headlines in local newspapers across the country. The increased attention and scrutiny is due to the detection of unregulated substances that may pose a risk to human health or the environment, referred to as “emerging contaminants.” An “emerging contaminant” is a chemical or material characterized by a perceived, potential, or real threat to human health or the environment, or by a lack of a published health standard. Emerging contaminants do not have a federal maximum contaminant level for drinking water, surface water, or groundwater under the Safe Drinking Water Act (SDWA). Maximum contaminant levels are one of the factors considered by the United States Environmental Protection Agency (EPA) when evaluating the appropriate remedial action at a contaminated groundwater site. Unless a state has promulgated a standard to address the particular emerging contaminant, water purveyors, companies performing remediation work, and environmental consultants can find themselves in a state of uncertainty regarding compliance for remediation projects. So how does the EPA address emerging contaminants? Currently, the EPA issues non-binding health advisories that are sometimes used as default cleanup levels when there are no binding standards (i.e., maximum contaminant levels). There are problems with this approach, such as a lack of collaboration with states and municipalities when prioritizing contaminants for health advisories, a lack of communication with water purveyors, and a lack of clarification regarding the difference between a health advisory and a maximum contaminant level. In addition to health advisories, emerging contaminants are often placed on the contaminant candidate list, which is a list of unregulated contaminants that mayrequire regulation under the SDWA. However, the presence of these contaminants in the environment may already be widespread, and the promulgation process can be lengthy, as the regulators try to…

February 15, 2018

Commonwealth Court Addresses Zoning of Short-Term Rentals

The Legal Intelligencer (by Krista-Ann M. Staley and Amie L. Courtney) Whether you are a property owner interested in offering a room as a short-term rental, a resident opposed to short-term rentals in your neighborhood, or a municipal official hearing from concerned residents of either opinion, you should be aware that unclear zoning regulations can cause significant roadblocks for all sides of the debate. Whether you are a property owner interested in offering a room as a short-term rental, a resident opposed to short-term rentals in your neighborhood, or a municipal official hearing from concerned residents of either opinion, you should be aware that unclear zoning regulations can cause significant roadblocks for all sides of the debate. The Pennsylvania Commonwealth Court has addressed these roadblocks in several cases, recently adding Reihner v. City of Scranton Zoning Hearing Board, No. 256 C.D. 2017 (Pa. Commw. Ct. 2017) to its growing line of cases involving the application of ambiguous zoning regulations to short-term residential rentals. The uptick in these cases reflects the increased popularity of the trend, expanded by online sites such as Air BnB, VRBO, and HomeAway that connect travelers with local residents or homeowners that want to rent rooms or residences for short-term stays. Reihner, along with its predecessors, originated with a notice of violation issued in response to neighbor complaints about the use of a single-family home, or portion thereof, as a short-term rental property. Critically, in each of these cases, the municipality had not amended its zoning ordinance to address short-term rentals. Rather, each municipality relied on existing regulations and terms as the basis for enforcement. In each case, the Commonwealth Court determined that the treatment of the newly popular rental activity was ambiguous under the existing applicable zoning regulations, and that Section 603 of the Pennsylvania Municipalities Planning Code…

February 7, 2018

The Clean Water Rule is delayed in response to U.S. Supreme Court decision

The PIOGA Press (by Lisa M. Bruderly and Gary E. Steinbauer) On February 6, the U.S. Environmental Protection Agency (EPA) and Army Corps of Engineers published a final rule delaying implementation of the Obama administration’s 2015 Clean Water Rule (CWR)— a landmark rule revising the definition of “waters of the United States” (WOTUS) that arguably expanded the scope of the federal government’s authority under several regulatory programs, including those associated with wastewater discharges and dredge/fill activities under the Clean Water Act (CWA). The February 6 final rule delays implementation of the CWR until February 6, 2020. 83 Fed. Reg. 5200. The final rule delaying implementation of the CWR is a significant step in the Trump administration’s efforts to reconsider the Obama administration’s revised definition of WOTUS. Meanwhile, the pre-2015 WOTUS regulatory regime, which has been criticized by many as inefficient and inconsistent, remains in place. Supreme Court decision forced agencies to quickly delay applicability of CWR The agencies’ rule delaying implementation of the CWR was finalized less than two weeks after the U.S. Supreme Court’s decision in National Association of Manufacturers v. Department of Defense, et al., No. 16-299 (Jan. 22, 2018) (NAM), which started a countdown for the expiration of a nationwide judicial stay of the CWR. In NAM, the Supreme Court held that federal district courts, as opposed to federal appellate courts, were the appropriate forums for the legal challenges to the CWR. Once the Supreme Court’s decision takes effect, the nationwide stay of the CWR, imposed by the U.S. Court of Appeals for the Sixth Circuit in October 2015, will be lifted and more than a dozen federal district lawsuits challenging the CWR will be revived. After it was finalized in June 2015, more than 100 parties, including industry groups and 31 states, filed lawsuits challenging the CWR in both…

February 6, 2018

The Underground Reach of the Clean Water Act: It’s Not Just for Surface Water

Environmental Legal Perspective (by Robert M. Stonestreet and Lisa M. Bruderly) Since its enactment in 1972, the federal agencies who administer the Clean Water Act (the Act), the Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (the Corps), have taken the position that the definition of “waters of the United States” governed by the Act (also known as “jurisdictional waters”) does not include groundwater. Regulation of groundwater therefore falls outside the scope of the Act. In 2014, the Obama administration proposed the Clean Water Rule to clarify the definition of jurisdictional waters. Both the proposed and final versions of the Clean Water Rule, which was issued in 2015 and is currently suspended, note that EPA and the Corps “have never interpreted the ‘waters of the United States’ to include groundwater.” In fact, the Clean Water Rule clearly states “groundwater, including groundwater drained through subsurface drainage systems” does not qualify as “waters of the United States.” Nothing in the Clean Water Act precludes state governments from regulating groundwater under their own programs as a “water of the state,” which many states have done. Since the Clean Water Act does not apply to groundwater, a federal Clean Water Act discharge permit (known as an NPDES permit) should not be required to discharge into groundwater, right? Not necessarily. What happens when materials discharged into groundwater later reach a jurisdictional water such as a stream or ocean? Federal district courts that have wrestled with this issue disagree. Certain district courts have concluded that an NPDES permit is not required under these circumstances. Other district courts have ruled that the Act does apply, and therefore pollutants discharged into groundwater without an NPDES permit violate the Act if those pollutants reach a jurisdictional water. On February 1, 2018, the Ninth Circuit Court of Appeals…

February 1, 2018

Pa. Employers Must Prepare for Potential Sweeping Changes to State Overtime Rules

The Legal Intelligencer  (by Stephen L. Korbel) For Pennsylvania employers, Gov. Tom Wolf’s recent announcement regarding sweeping changes to Pennsylvania’s overtime pay regulations is déjà vu all over again. Most employers will recall the concern, confusion and litigation that followed the Obama administration’s attempt in 2016 to nearly double the federal minimum salary levels exemption from overtime pay from $23,360 to $47,476. On Jan. 17, 2018, Wolf announced that the Pennsylvania Department of Labor and Industry will issue proposed regulations in March that will increase the minimum salary level to determine overtime eligibility and will “clarify” the duties test for executive, administrative and professional employees. If the proposed regulatory changes become final, it will be the first time in more than 40 years that Pennsylvania has updated its overtime regulations. Wolf directed the department to phase in regulatory changes to the minimum salary levels over four years. If enacted, the first stage will raise the salary level to determine overtime eligibility for most workers from the federal minimum of $455 per week, $23,660 annually, to $610 per week, $31,720 annually. The first stage will take effect on Jan. 1, 2020. The minimum salary level will increase to $39,832 on Jan. 1, 2021, followed by an increase to $47,892 in 2022. The Wolf administration estimates that the salary level changes will extend overtime eligibility to 370,000 workers in 2020 and up to 460,000 workers in 2022. Also, following the implementation of the final phase of the new salary level to $47,892 in 2022, the Wolf administration proposed that the minimum salary level automatically update every three years. The first automatic increase would not likely occur until Jan. 1, 2025. At this point, the Wolf administration has not provided any indication as to the manner in which the automatic salary level increase will…

January 30, 2018

Pennsylvania legislature attempts to inject new life into expired oil and gas leases

The PIOGA Press  (by Nicholas J. Habursky) On October 30, Governor Tom Wolf signed House Bill 74, which amended the Pennsylvania Fiscal Code. The 90-page bill included Section 1610-E, entitled “Temporary Cessation of Oil and Gas Wells,” which codified certain rights of oil and gas lessors and lessees to extend leases during periods of temporary cessation of production. This article explores how traditional savings clauses found in leases and existing legal precedent may be impacted by Section 1610-E, and provides an analysis of potential challenges arising out of the application of this new law. The new law provides: Section 1610-E: Temporary Cessation of Oil and Gas Wells “(a) General rule.–An oil and gas lessor shall be deemed to acknowledge that a period of nonproduction under an oil and gas lease is a temporary cessation insufficient to terminate the lease and the lessor waives his right to seek lease termination upon those grounds if, prior to claiming the lease has terminated: (1) production is recommenced and the lessor accepts royalty payments for the production. Any first royalty payment following recommencement of production after a period of more than one year of inactivity shall be accompanied by an explanation, in plain terms, that acceptance of the royalty payment shall constitute acknowledgment of an existing lease with the operator; or (2) the operator, after notifying the lessor of its intent to drill a new well and giving the lessor 90 days within which to object, drills a new well under the lease. (b) Lease provisions.–Nothing in this section is intended to waive lease requirements related to commencement of operations during a lease’s primary term or affect a lease provision expressly providing for lease termination following a fixed period of nonproduction.” Savings clauses preventing lease termination Traditional Pennsylvania oil and gas leases typically terminate upon the: i) expiration of the primary…

January 25, 2018

U.S. Supreme Court Decision Revives Multiple Federal District Court Lawsuits Challenging the Clean Water Rule

Environmental Alert (by Lisa M. Bruderly and Gary E. Steinbauer) On January 22, 2018, the U.S. Supreme Court unanimously held that lawsuits challenging the Obama administration’s 2015 Clean Water Rule (Rule) – a landmark revision to the definition of “waters of the United States” (WOTUS) that arguably expanded the scope of the federal government’s authority under several regulatory programs, including those associated with wastewater discharges and dredge/fill activities under the Clean Water Act (CWA) – must be filed in federal district courts instead of the federal courts of appeal. Nat’l Assoc. of Mfrs. v. Dept. of Def., No. 16-299 (Jan. 22, 2018) (NAM). While the Supreme Court’s decision in NAM did not address the merits of the lawsuits challenging the Rule, it did determine the appropriate forum for those legal challenges. The decision is significant because it will end the nationwide judicial stay of the Rule, dismiss all appellate-level judicial challenges, and revive more than a dozen federal district court lawsuits challenging the Rule filed by more than 100 parties, including industry groups and 31 states. Among other considerations, the revival of the numerous federal district court cases increases the likelihood that the Rule will be inconsistently interpreted across the United States and lengthens the amount of time before a challenge to the merits of the Rule could reach the Supreme Court. For example, one of the federal district courts with a pending challenge to the Rule previously held that it had jurisdiction and stayed the Rule in 13 states. North Dakota v. U.S. EPA, No. 3:15-cv-59 (D.N.D. August 27, 2015) (staying the Rule in Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, and Wyoming). Absent further judicial decisions or action by the Agencies to delay the Rule’s effective date, the Rule will…

January 23, 2018

The Pittsburgh Life Sciences Greenhouse Partners with Babst Calland to Assist Startups

Legal Services for Incorporation and Standard Business Agreements The Pittsburgh Life Sciences Greenhouse (PLSG) has partnered with local law firm Babst Calland to offer startup companies in the PLSG portfolio access to legal assistance regarding certain corporate governance work and drafting of certain standard business agreements, under a flat fee arrangement*. This Flat Fee Program is available to individuals and entities that come through PLSG for investment and development. Under the Flat Fee program, Babst Calland can assist with: • Incorporating a business, including preparing and filing with the Department of State the Articles of Incorporation, as well as preparation of other required documents. • Assisting with the establishment of a single-member limited liability company, including the preparation and filing of a Certificate of Organization with the Department of State, and the preparation of an Operating Agreement. • Preparing certain standard business agreements, including: (1) confidentiality agreement/non-disclosure agreement; (2) employment agreement/noncompete agreement. “Our team can provide efficient and effective legal assistance to help companies new and old navigate the day-to-day issues commonly faced by businesses, and we look forward to working with PLSG and its exciting portfolio of emerging life sciences companies,” said Alana Fortna of Babst Calland. “The life sciences space is essential to the continued growth of our region.” “PLSG believes in the mission of helping regional life sciences companies achieve successful commercialization, and Babst Calland’s offer to bring its legal expertise and insight to bear on behalf of our startups for a flat fee is both incredibly valuable and very much appreciated,” said Jim Jordan, PLSG President and CEO. “By developing this Flat Fee Program with Babst Calland, we can make sure that our companies have experienced counsel at a predictable cost.” The PLSG kicks off this new program by giving away one free legal service* at a drawing during its B2B event, “Start-ups: Why…

January 10, 2018

Babst Calland Names Milleville, Rorabaugh and Tysiak Shareholders

Babst Calland recently named Benjamin W. Milleville, Elena L. Rorabaugh and Nikolas E. Tysiak shareholders in the Firm. Benjamin W. Milleville, a member of the Firm’s Corporate and Commercial Group, advises businesses and nonprofit organizations on corporate and transactional matters, including mergers and acquisitions, reorganizations, joint ventures, commercial contracts, governance matters, compliance, and real estate transactions.  Mr. Milleville advises businesses of varying size and complexity, and at various points in their lifecycles.  In his role as outsourced corporate counsel to a multinational public company, he counsels senior management in the U.S. and abroad on a broad range of legal matters.  Mr. Milleville also advises entrepreneurs and startup businesses on the legal issues faced by emerging companies, including business structuring and protection of intellectual property.  In his nonprofit practice, Mr. Milleville counsels clients, including charitable organizations and trade associations, on obtaining and maintaining tax-exempt status, nonprofit governance, and nonprofit mergers and strategic alliances. Mr. Milleville is a 2008 graduate of the University of Pittsburgh School of Law. Elena L. Rorabaugh, a member of the Firm’s Energy and Natural Resources Group, is experienced in assisting oil and gas companies navigate the legal obstacles involved with exploration and production. Her practice focuses on energy, oil, gas and mineral-related transaction matters, including title examination and title curative work. Ms. Rorabaugh also counsels clients with respect to the acquisition and disposition of oil and gas properties and has experience in all aspects of title due diligence.  Ms. Rorabaugh also has experience representing E&P, midstream and other energy companies in mergers and acquisitions, and she counsels clients on a variety of business and corporate transactional matters. Ms. Rorabaugh is a 2009 graduate of Duquesne University School of Law. Nikolas E. Tysiak, a member of the Firm’s Energy and Natural Resources Group, practices in the areas of energy…

January 8, 2018

An Attorney’s Perspective: Tips for Commenting on a Draft Air Permit

Zephyr Currents (by Meredith Odato Graham) Draft permit review is an important part of the air permitting process. Careful evaluation of the draft permit enables the permittee to head off possible compliance issues and otherwise refine the permit before it becomes final. As the permittee, you will typically have at least two chances to comment on a draft permit—once on a pre-draft version and again during the official public comment period. Take advantage of these opportunities to craft an air permit that best suits your facility, and keep in mind the following tips as you prepare written comments for submission to the agency. Establish an Internal Schedule: The very first thing you should do upon receiving the draft permit is confirm how much time is available for the review. Double check the comment deadline and plan to meet it. You’ll need ample time to review the relevant documents, gather internal input and prepare written comments. Make time to get feedback from the facility personnel who will actually implement the permit on a day-to-day basis. Mark the calendar and establish interim deadlines to keep the ball rolling. It may become necessary to request an extension, in which case you’ll want to show that a good faith effort was made to meet the original deadline. Request the Draft Permit in a Writeable Format: Ideally, your submission will include a “marked up” or redlined version of the draft permit which clearly shows the changes you are requesting. This is much easier to do when the agency can provide the draft permit in a writeable format such as Microsoft Word. In situations where an existing permit is in effect, it will be helpful to make a comparison document showing the differences between the existing permit and the draft permit. Ask the permit writer to provide a…

December 12, 2017

End-of-the-year checkup concerning personnel files

The PIOGA Press (by Stephen A. Antonelli) It is officially that time of year again. The weather will soon be frightful, and if your place of employment is anything like mine, the first of many holiday parties is already in the rearview mirror. Please don’t worry, this is not another article about how to behave (or how not to behave) at an office party. No, this article is about a considerably less scandalous topic: whether and how employees and former employees may view their own personnel files. Please try to contain your enthusiasm, and demonstrate a bit of holiday charity by continuing to read. Many employers use the month of December to wrap up financial matters and to plan for the coming year by preparing goals, budgets, forecasts and strategic plans. Many employers also use this time of year to conduct employee reviews and make determinations about employees’ compensation. Hopefully, most of your employees will receive good or even great reviews. Some may even receive yearend bonuses. (Side note: if paid to non-exempt employees, bonuses should either be (1) discretionary or (2) taken into consideration when calculating the regular rate for overtime purposes, but that is another article for another issue of The PIOGA Press). Some employees receive a review that is the equivalent of a proverbial lump of coal. As you might imagine, employees who receive such reviews react in a number of different ways. Some react emotionally, others stoically. Some take constructive criticism to heart and address the problematic aspects of their review head-on, in a sincere attempt to improve upon their performance. Others immediately begin to search for a new place of employment. Most react somewhere in between. Those employees who receive mediocre to problematic reviews may wish to review their personnel files. Pennsylvania employers should be mindful of the fact…

December 1, 2017

Air Permitting Documents for Oil and Gas Industry Released by DEP

Alert:  Environmental On November 30, 2017, the Pennsylvania Department of Environmental Protection announced the details of highly-anticipated changes to its air permitting program for the oil and gas industry. The Department released in final draft form two air program general permits, “GP-5” and “GP-5A,” as well as a permit exemption known as “Exemption 38.” Plans to revise the air permitting framework were first announced in January 2016 as part of Governor Tom Wolf’s Methane Reduction Strategy for Pennsylvania. The recently updated permits and exemption are not yet in effect or legally binding, which means there may still be an opportunity to influence these critical air permitting documents. The final draft permits and exemption will be presented to the DEP Air Quality Technical Advisory Committee (AQTAC) at a public meeting scheduled to occur on December 14, 2017 in Harrisburg, Pa. AQTAC advises DEP on the technical, economic and other social impacts of major program changes like this one. In addition to the AQTAC meeting, the Department is informally soliciting feedback from stakeholders to further refine GP-5, GP-5A and Exemption 38 before they become effective. DEP intends to finalize the permits and exemption in the first quarter of 2018 by publishing an official notice in the Pennsylvania Bulletin. Also slated for discussion at the AQTAC meeting is a forthcoming rulemaking to reduce volatile organic compound (VOC) emissions from existing oil and gas industry sources. In October 2016, the U.S. Environmental Protection Agency finalized a “control techniques guidelines” document that provided states with recommendations for reducing VOC emissions from a range of equipment and processes used by the oil and gas industry. As a result, DEP has until October 2018 to submit regulations for EPA approval. DEP anticipates that this rulemaking will have a collateral effect of reducing methane emissions. In addition to these oil and…

November 17, 2017

The Pennsylvania Environmental Hearing Board’s Second Analysis of the Environmental Rights Amendment

Alert: Environmental On November 13, 2017, the Pennsylvania Environmental Hearing Board issued its second opinion analyzing Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment, in light of the Pennsylvania Supreme Court’s June 20, 2017 decision in Pennsylvania Environmental Defense Foundation v. Commonwealth (PEDF).  In Friends of Lackawanna v. DEP and Keystone Sanitary Landfill, EHB Dkt. No. 2015-063-L (November 10, 2017) the EHB applied the principles set out in PEDF and upheld a landfill permit renewal. In its PEDF decision, the Pennsylvania Supreme Court established a new standard of review based on the text of the ERA and Pennsylvania trust law principles but did not provide a definitive test regarding how the ERA is to be applied in the permitting context.  Earlier this year, on August 15, 2017, the EHB issued its first opinion interpreting and applying the new ERA standard in a third-party appeal of longwall mining permit revisions issued to Consol Pennsylvania Coal Company in Center for Coalfield Justice and Sierra Club v. DEP, EHB Dkt. No. 2014-072-B (August 15, 2017) (CCJ). The EHB reviewed the Department of Environmental Protection’s consideration of the potential environmental effects of its permitting action and whether the activity authorized by the permit was likely to cause, or in fact did cause, unreasonable degradation or deterioration of a public natural resource. Friends of Lackwanna Decision In Friends of Lackawanna, a citizens group, the Friends of Lackawanna (FOL), appealed a landfill permit renewal issued to Keystone Sanitary Landfill.  Keystone has been operating a permitted landfill for more than 30 years, with the Department renewing its permit several times over that period, most recently in 2015. FOL appealed the 2015 permit renewal, arguing that the Department did not fulfill its responsibilities under the ERA because the landfill is adversely affecting groundwater and…

November 16, 2017

The DEP Releases a Trio of Draft Technical Guidance Documents

Alert: Environmental  On October 14, 2017, the DEP published notices of availability for a trio of draft Technical Guidance Documents (TGD) in the Pennsylvania Bulletin. Each of these TGDs proposes policy departures from current practices in both the form and substance of the respective TGD. Two of them, Policy for the Development and Publication of Technical Guidance and Policy for the Development and Review of Regulations, are significantly less detailed than their predecessor TGDs. For instance, the draft TGDs omit internal procedural steps and checkpoints involved in the DEP’s promulgation of new technical guidance documents and regulations. The revisions, if finalized, will affect those regulated and public entities who routinely participate in the DEP’s TGD and regulatory development process. Overview 1. Policy for the Development and Review of Regulations (012-0820-001) The draft policy proposes substantial formatting changes – including a name change – from the current Policy for Development, Approval, and Distribution of Regulations, which was published by the DEP in 1996 and last updated in November 1999. The proposed TGD is notably shorter in the current version because it abandons 11 extensive attachments that provide guidance on both form and substance the DEP is to follow throughout the rulemaking process. Key differences in the proposed TGD include: • A new section entitled “Purposes of Environmental Regulations,” which refers to Constitutional rights, including the Environmental Rights Amendment of Article I, Section 27. The DEP refers to its duty, as an agency of the Commonwealth, as a trustee to conserve and maintain public natural resources. • A statement that the General Assembly establishes the framework and scope of the environmental programs administered to the DEP but that it “defers” to the DEP to  implement the laws. • A statement that “anyone can submit information related to a rulemaking to the DEP at any time…” for the…

November 14, 2017

Babst Calland’s Expansion Results in Move to New D.C. Office

Washington, D.C., November 14, 2017 – Babst Calland has moved its Washington, D.C. office to a new location.  Following a period of growth and expansion, the firm has outgrown its previous location and has moved to its new location at 505 9th Street NW, Suite 700, Washington, DC 20004. “Our team of attorneys in the Washington, D.C. office welcomes the move,” said James Curry, transportation safety attorney and managing shareholder of Babst Calland’s D.C. office.  “The new space will accommodate our growth while enabling us to continue to serve current and new clients,” he added. Babst Calland opened its Washington, D.C. office in January 2016 representing clients throughout the U.S. on matters relating to pipeline safety and the transportation of hazardous materials. This year, the firm expanded its team to support clients in a broader range of transportation safety matters, including its motor vehicle safety, regulatory and compliance practice (including automated driving system issues). The Washington, D.C.-based transportation safety practice focuses on representing clients through a multi-disciplinary team approach and is integrated with the firms’ Energy and Natural Resources, Environmental and other practices, which allows us to provide comprehensive multi-issue services to our clients. The group’s strength is its deep understanding of the federal government’s approach to safety regulation and its collective experience in the transportation and energy sectors.