Search

Stay Informed


SUBSCRIBE

April 28, 2020

Recent Climate Change Developments in Pennsylvania: DEP Meeting on RGGI Modeling and Update to Climate Impacts Assessment

Client Alert

(by Kevin Garber, Jean Mosites and Casey Snyder)

RGGI Rulemaking Special Informational Meeting

On April 23, 2020, DEP presented modeling results of Pennsylvania’s potential participation in the Regional Greenhouse Gas Initiative (RGGI) cap and trade program at a special joint information meeting with the Air Quality Technical Advisory Committee and the Citizens Advisory Council.

DEP utilized consulting firm ICF International’s Integrated Planning Model to estimate the effects joining RGGI would have on Pennsylvania’s electricity generation, CO2 emissions and the PJM Interconnection. DEP is proposing an initial CO2 baseline budget allowance of 78 million short tons of CO2. If Pennsylvania’s regulation becomes effective in January 2022 as proposed by Governor Tom Wolf, the 78 million short ton CO2 budget would decrease annually by approximately 2.5 tons a year, arriving at a budget of 58 million tons in 2030, which is a 25 percent decrease from 2020. DEP proposed setting aside 9.3 million allowances annually for waste-coal-fired generators.

DEP asserted during the presentation that by joining RGGI:

Pennsylvania would realize “significant CO2 reductions” immediately beginning in 2022 and continuing through 2030 but DEP did not quantify the reductions. Pennsylvania would remain a leading electricity exporter at roughly historic generation levels. Wholesale energy prices would increase only slightly. Pennsylvania’s generation mix over the next decade would favor gas over coal but generation from renewables will not increase significantly. Pennsylvania would take a critical step toward meeting unspecified GHG reduction goals.

DEP offered relatively little data to substantiate the above claims. Its presentation did not address to any meaningful degree the effects joining RGGI will have on Pennsylvania’s economy and job market, how RGGI proceeds will be reinvested, or the estimated price of electricity at the household level. DEP did not disclose the initial proposed cost for CO2 allowances although the ICF model predicted...

April 28, 2020

How established companies can secure game-changing innovations

Smart Business

(by SBN Staff with Justine Kasznica)

There is global consensus that large companies across various sectors need to innovate, be agile and anticipate new technologies, new markets and new demand cycles to stay competitive.

“We are seeing a paradigmatic shift among large companies,” says Justine M. Kasznica, a shareholder at Babst Calland. “Not only are these companies seeking to attract a diverse and innovative workforce, they are pursuing business-optimizing innovation and solutions, which are often found outside their walls.”

Smart Business spoke with Kasznica about how established companies are finding and taking control of technologies that set them up for a bright future.

How does internal innovation offer large companies a competitive advantage?

While large companies have traditionally innovated from within, recently this model has matured. Now large companies are creating R&D labs with a tech transfer capability designed to be more agile than the parent company. These innovation centers have a distinct culture that’s more agile, nimble, able to sustain high growth. In this model, the company funds and owns the innovations outright and can decide the best course of action to bring them to commercial life — as an asset of the company or a spinout entity that licenses the technology from the parent company and grows independently.

What should companies consider when acquiring companies for their technologies?

As an alternative way to innovate, many large companies search for and acquire companies to bring their technology and innovators in-house through M&A. In this model, due diligence is critical. In addition to financial assessment, it requires an evaluation of whatever technology is being purchased and whether the intellectual property (IP) is sufficiently protected. It further requires a review of employment, confidentiality and licensing agreements to ensure that the acquirer will be free to commercialize and develop the acquired technology assets.

April 24, 2020

Supreme Court Extends Potential Clean Water Act Liability to Discharges to Groundwater that Reach Surface Water

Environmental Alert

(by Lisa Bruderly and Kevin Garber)

In yesterday’s landmark decision, the Supreme Court ruled by a 6-3 majority that, in certain circumstances, discharges of pollutants through groundwater to navigable waters could be required to have an NPDES permit under the Clean Water Act (CWA). While the Court remanded the Hawai’i Wildlife Fund v. County of Maui matter to the Ninth Circuit to reconsider the specific issue of injected wastewater that reached the Pacific Ocean through lava tubes, it more broadly provided a new “functional equivalent” test to address whether the CWA requires an NPDES permit when pollutants originating from a point source are conveyed to navigable waters by a nonpoint source, such as groundwater.

Rejecting the Ninth Circuit’s “fairly traceable” test as being too broad, Justice Stephen Breyer, writing for the majority, more narrowly held that an NPDES permit is required "when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge" (emphasis added). The Court’s new test for CWA liability has far-reaching implications, creating potential exposure for agency permitting and enforcement and citizen suit pressure under many scenarios where pollutants may intentionally or unintentionally enter surface water by way of groundwater through Class V injection wells, coal ash ponds, waste impoundments/lagoons, pipeline releases, existing groundwater contamination, spills and releases to ground, leaking underground storage tanks and, even, septic tanks.

New “Test” Creates More Questions Than Clarity

Subjective, conflicting interpretations of the new “functional equivalent” test are inevitable. Focusing primarily on considerations of time and distance, Justice Breyer offered the following two contrasting examples of how the test might be applied: (1) "where a pipe ends a few feet from navigable waters and the pipe emits pollutants that travel those few feet through groundwater (or over...

April 24, 2020

Governor Releases Guidance for Construction Industry in Pennsylvania

Construction Alert

(by Marc FelezzolaDavid White and James Miller)

Governor Tom Wolf announced on April 23, 2020 that the construction industry in Pennsylvania may resume in-person operations starting Friday, May 1, 2020 – one week earlier than previously announced.  Governor Wolf also issued “stringent” guidance intended to protect construction workers and the public when construction operations resume.  This guidance “provides universal protocols for all construction activity, as well as specific additionally guidance for residential, commercial and public construction projects.”

Among the requirements:

All persons present at a work site must wear masks/face coverings unless they are unable for medical or safety reasons and businesses must establish protocols upon discovery that the business has been exposed to a person who is a probable or confirmed case of COVID-19. All construction projects must maintain proper social distancing and provide hand washing and sanitizing stations and protocols for high risk transmission areas. Businesses must identify a “pandemic safety officer” for each project or work site or, for large scale construction projects, for each contractor at the site. Residential construction projects may not permit more than four individuals on the job site at any time, not including individuals who require temporary access to the site and are not directly engaged in the construction activity. For non-residential or commercial projects, no more than four people are permitted for spaces of 2,000 square feet or less, with one additional person allowed for each additional 500 square feet of enclosed area over 2,000. Note that enclosed square footage includes “all areas under roof that are under active construction at the time.” Commercial construction firms should also “consider strongly” establishing a written safety plan for each work location containing site specific details to be shared with all employees and implemented and enforced...

April 22, 2020

PHMSA Proposes New Guidance for Farm Taps

Pipeline Safety Alert

(by Keith Coyle and Ashleigh Krick)

On April 20, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a Request for Comments on proposed Frequently Asked Questions (FAQs) for the regulation of farm taps under 49 C.F.R. Parts 191 and 192.  The proposed FAQs come nearly two years after the Agency posted, and then withdrew, an earlier set of farm tap FAQs on its website.  Consistent with the Department of Transportation’s policy on guidance documents, PHMSA is seeking public comment before finalizing the latest version of the farm tap FAQs.  The deadline for submitting comments is June 19, 2020.  Additional information about the regulation of farm taps and the proposed FAQs is provided below.

Why did PHMSA issue the Proposed FAQs?

The regulatory status of farm taps has generated significant controversy in the past decade.  In 2010, PHMSA issued FAQs for the new Distribution Integrity Management Program (DIMP) regulations stating that the DIMP requirements applied to farm taps, even though that issue had not been specifically discussed or addressed during the rulemaking process.  The Agency defended that position in the years that followed, but eventually allowed operators to choose to include farm taps in a DIMP plan or follow the three-year periodic inspection requirement for regulators and overpressure protection equipment.

In January 2018, PHMSA published a set of new FAQs for farm taps on its website.  The FAQs addressed a range of topics, including the new three-year periodic inspection requirements, annual reporting requirements, OPID requirements, regulatory status of existing farm taps and those installed prior to 1960, operator qualification, definitional clarifications, and excess flow valve installation.  After receiving significant adverse feedback, the Agency withdrew the farm tap FAQs for further review and development.  Then, in March 2019, the Agency issued an Announcement...

April 22, 2020

New WOTUS Definition Published — Challenges Expected

Environmental Alert

(by Lisa Bruderly)

Yesterday, the U. S. Environmental Protection Agency (EPA) and the U. S. Army Corps of Engineers (Corps) fulfilled the Trump administration’s promise to repeal and replace the Obama administration’s Clean Water Rule (CWR) by publishing the final Navigable Waters Protection Rule (NWPR) in the Federal Register (85 Fed. Reg. 22250). The NWPR (yet again) redefines the scope of waters that are regulated under the Clean Water Act (CWA) by revising the definition of “waters of the United States” (WOTUS) in 12 federal regulations (see January 31, 2020 Alert for details and discussion of anticipated effect of the NWPR).

As expected, the NWPR’s WOTUS definition is much narrower and will federally regulate fewer waters than the CWR. The Rule also clarifies the scope of WOTUS in greater detail than the pre-2015 definition, which is currently in effect. The Rule consolidates jurisdictional waters into four categories: (1) territorial seas and navigable-in-fact waters; (2) tributaries; (3) lakes, ponds and impoundments of jurisdictional waters; and (4) adjacent wetlands. It includes 16 definitions and 12 exclusions, as compared to the five definitions and two exclusions in the pre-2015 definition, including, for the first time, definitions to clarify the prior converted cropland and waste treatment system exclusions. The Rule categorically excludes, among other things, ephemeral streams and ditches without perennial or intermittent flow.  In addition, missing from the NWPR is any reference to the significant nexus test.

Practical Impact of the NWPR will be State-Specific

The practical impact of the Rule for industry, developers, agriculture and others will vary from state to state. The NWPR’s effect is likely less in states with very inclusive definitions of state-regulated waters (e.g., Pennsylvania) than in states with narrower definitions of the same. For example, in Pennsylvania, state permitting will still be required for proposed impacts...

April 22, 2020

U.S. Supreme Court Ruling Opens Door to Private Litigation Challenging EPA-Approved Remedy at a Superfund Site

Environmental Alert

(by Alana Fortna)

As addressed previously in an article published by The Legal Intelligencer, one key case to watch before the U.S. Supreme Court is Atlantic Richfield Company v. Christian, Case No. 17-1498.  On Monday, April 20, 2020, the Court issued its Opinion in this case (590 U.S. ___ (2020)), which included two Dissenting Opinions and opened the door for potential private party litigation involving proposed alternative cleanup plans at Superfund sites.  While the likelihood of success on such future litigation may be questionable given the position of the United States as an amicus curia in this case, any litigation potential could still be disruptive to Superfund site cleanups, even if it is ultimately unsuccessful.

The Atlantic Richfield case involves one of the oldest Superfund sites in the country—the Anaconda Copper Smelter Site, which covers an area of approximately 300 square miles.  Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA), Atlantic Richfield has been performing investigation and remedial activities at the Site under the oversight and approval of the United States Environmental Protection Agency (EPA) for the past 35 years.  Landowners in and around the Site sued Atlantic Richfield in Montana state court seeking, among other things, restoration damages under state law to restore their properties to their pre-contamination state.  The landowners pursued an alternative cleanup plan that sought remedial action above and beyond the EPA-approved remedy in both scope and cost.  The Montana Supreme Court agreed that the landowners could pursue their restoration claim against Atlantic Richfield despite statutory arguments to the contrary.  The U.S. Supreme Court granted certiorari to address the following issues: (i) whether CERCLA strips the state court of jurisdiction over the landowners’ state law claim for restoration damages, and (ii) if not, whether...

April 22, 2020

Update: Paycheck Protection Program (as of April 22, 2020)

Client Alert

(by Moore CapitoChristian Farmakis and Andrew Terranova)

On April 3, 2020, lenders began accepting and issuing Paycheck Protection Program loans (PPP Loans) to qualifying small businesses. In less than two weeks, the approximately $350 billion appropriated to the PPP Loans were fully depleted. Over the past two weeks, we have received questions related to the application process, appropriate use of loan proceeds during the covered period, calculating the level of loan forgiveness, and the possibility of further funding.

We understand that no two businesses are the same and that’s why we are uniquely tailoring our approach to acquisition and utilization of the PPP Loans to suit your needs. If your business received a PPP Loan, we are prepared to provide counsel to your business on how loan proceeds may be allocated.

Yesterday, the U.S. Senate passed a major enhancement to the PPP Loan program. While action by the U.S. House of Representatives is not expected until Thursday, we fully expect $310 billion additional dollars to be added to the PPP Loan program. Therefore, it is important for qualifying businesses that missed out on the first round of funding to be prepared to act quickly. The first step is ensuring your application is properly completed and submitted to an SBA-approved lender. The application can be found here and SBA-approved lenders can be found here. We have counseled dozens of clients on the application process and we are happy to assist your business as well.

If you have questions about the application and/or utilization of PPP Loans, please contact us and we will help guide you through the process. For general information on PPP Loans, check out SBA’s FAQ here.

Click here for PDF. 

April 21, 2020

Governor Amends COVID-19 Order to Recommence Limited Construction Activities in Pennsylvania

Construction Alert

(by David White, James Miller and Marc Felezzola)

As part of a three phase plan for Pennsylvania overcoming the COVID-19 Pandemic, Governor Tom Wolf announced on Monday, April 20, 2020 that limited construction activities may recommence on May 8, 2020 for non-exempt projects in Pennsylvania.  Although the full details regarding the plan have not yet been released, it is clear that all construction work must comply with the Governor’s and Secretary of Health’s April 20, 2020 amendments to their business closure orders and must be in strict compliance with the administration’s guidance referenced in those amendments, all of which are available below:

Governor Wolf’s April 20 Business Amendment Health Secretary’s April 20 Business Amendment Health Secretary’s Health Safety Measures for In-person Operations Life Sustaining Business FAQ PA Industry Operation Guidance (Matrix)

While the details regarding the limited recommencement of construction activities have not yet been released, it is believed the Governor will issue the following guidelines:

For residential construction, only four workers will be allowed to be on the jobsite at one time. For commercial construction, four workers will be allowed on a jobsite at one time for projects of 2,000 square feet or less; and for every 500 square feet, an additional worker may be added. This would apply to all construction, even the current healthcare and waiver approved projects. For example: a 5,000 square foot construction project will be allowed ten workers on site (4 workers for 2,000 SF and an additional 6 workers when considering the 3,000 SF).

The above potential guidelines are subject to change before May 8, 2020; we will provide another update once we have more information on the final guidelines.

Babst Calland’s construction attorneys are closely monitoring these developments and providing input to our...

April 20, 2020

Pennsylvania Enacts Act 15 of 2020 to Address Local Government Issues during the Pandemic

Client Alert

(by Blaine LucasStephen Korbel and Max Junker)

Modifies Public Meeting Rules, Suspends Land Use Application Processing Deadlines on a Limited Basis, Authorizes Taxing Bodies to Postpone the Property Tax Discount Date and Waive Late Fees and Penalties, and Authorizes the Remote Use of Notaries.

On April 20, in response to the COVID-19 pandemic, Pennsylvania Governor Tom Wolf signed Act 15 of 2020. Act 15 was unanimously approved by the Commonwealth’s Senate and House of Representatives, and takes effect immediately. As part of broader legislation regarding healthcare cost containment, Act 15 addresses a number of critical issues for Pennsylvania local governments, most notably how to conduct business in compliance with applicable statutory requirements when the physical presence of their officials, constituents, development applicants and other interested parties is either highly discouraged by public health officials or prohibited altogether. This can be particularly problematic for applicants for a variety of local government land use approvals, consideration and action on which usually are statutorily mandated to take place at public meetings and hearings.

Among other things, Act 15:

Eliminates the requirements for physical attendance at public meetings during the Governor’s declaration of a disaster emergency by permitting the use of “authorized telecommunications devices.” Provides for the limited suspension, or “tolling,” of statutory deadlines for municipal boards and agencies to hear and act upon a wide variety of land use and other development applications. Authorizes taxing districts to extend the deadline for payment of property taxes at a discount and to waive fees and penalties for late payments. Authorizes the remote use of notaries via communications technologies.

Use of Telecommunications Devices to Conduct Public Meetings

Until the expiration or termination of the COVID-19 disaster emergency, an agency, department, authority, board, council, governing body or other political subdivision included in the declaration may conduct hearings, meetings, proceedings or...

April 20, 2020

Update: U.S. DOT Agencies Extend Further COVID-19 HazMat Relief

Transportation Safety Alert

(by Boyd StephensonVarun ShekharJame Curry)

Babst Calland has updated this alert to capture new shipping paper guidance extended by the Pipeline and Hazardous Materials Safety Administration.

In response to the COVID-19 pandemic, U.S. Department of Transportation (DOT) agencies that regulate the surface transportation of hazardous materials (HazMat) have extended several forms of relief.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) has waived some HazMat training requirements, delayed some equipment recertifications, provided guidance for complying with existing shipping paper rules while practicing safe social distancing, and adopted a temporary enforcement policy for transporting alcohol-based sanitizer.  The Federal Motor Carrier Safety Administration (FMCSA) and the Federal Railroad Administration (FRA) are implementing PHMSA’s waiver in their modes.  FMCSA has also allowed States to extend the effective dates for commercial driver’s licenses (CDL) and commercial learner’s permits (CLP).  Additionally, FRA has activated its emergency docket.  FRA has not extended any hazardous materials-specific relief.

Hazardous Materials Shippers, Carriers, and Package Manufacturers

Update: On April 10th, PHMSA issued a notice highlighting existing regulations that allow shipping papers to be transferred between parties while minimizing the risk of spreading COVID-19.  PHMSA reminds regulated parties that no physical contact is required to exchange shipping papers.  PHMSA suggests that shipping papers may transferred either electronically or by placing the physical copy on a table, stepping away while the shipping paper is signed, and then retrieving the signed shipping paper.  The notice also reminds shippers that they may ask another person to sign on their behalf verbally, in writing, or through electronic authorization such as an email or text message.  By following these requirements, individuals transporting HazMat should be able to comply with the regulations without special relief. On March 25th, PHMSA issued an updated policy declining to enforce recurrent training requirements under 49 C.F.R....

April 17, 2020

Regulated Entities Should Consider Benefits and Limitations of EPA’s COVID-19 Policy in Light of Post-Publication Developments

Environmental Alert

(by Lisa Bruderly, Julie Domike and Gary Steinbauer)

U.S. Environmental Protection Agency’s March 26, 2020 temporary COVID-19 enforcement discretion policy establishes the steps regulated parties must take to qualify for enforcement protection for noncompliance caused by COVID-19 (“COVID-19 Policy” or “Policy”).  Our previous Alert outlined the Policy’s scope, eligibility criteria, and expectations.  In less than a month, EPA’s Policy has generated significant controversy, conflicting media reports, congressional inquiries, and now a federal lawsuit.  Critiques of the Policy and EPA’s evolving messaging make clear that entities affected by COVID-19 should be thoughtful and strategic in their reliance on the potential relief provided by the Policy.

EPA’s Response to Backlash

In response to initial criticisms, EPA initiated several steps to explain its stance on environmental compliance and enforcement during the pandemic.  On March 30, 2020, EPA issued a news release to correct “the record on reckless reporting” by certain media outlets and clarify that the Policy applies on a case-by-case basis.  To quell legislative opposition, EPA sent members of Congress a letter on April 2, 2020, defending the Policy.  EPA has also created a Frequently Asked Questions webpage answering several questions on the scope and application of the COVID-19 Policy.

Environmental Groups Sue EPA and State Attorneys General Weigh-In

At the same time, environmental groups and the states have voiced concerns related to the Policy.  On April 1, 2020, a coalition of environmental groups, led by the Natural Resources Defense Council, petitioned EPA to promulgate an emergency rule requiring regulated parties to affirmatively report COVID-19-caused noncompliance and provide information similar to what EPA requires parties to document under the Policy.  On April 16, 2020, the coalition filed a lawsuit in the U.S. District Court for the Southern District of New York, requesting that the court order EPA to...

April 17, 2020

A. A. Moore Capito – Corporate Attorney

Emerging Technologies Profile 

Why do you have two jobs? I’ve got the best of both worlds – in business and in public service. I love being an attorney because it challenges me every day to help clients achieve their business goals. My other job is being a member of the West Virginia House of Delegates. After having worked in Washington, D.C. serving on the White House advance team and as a staff member in the Department of Defense, I attended law school to prepare me for both worlds.

What do you do at Babst Calland? I represent publicly traded and privately held clients in mergers, acquisitions and divestitures, as well as business structuring, governance, commercial contracts, and real estate transactions.

When you are not at Babst Calland, you can be found... at the State Capitol in Charleston, West Virginia performing my legislative duties. I am passionate about West Virginia and the growing opportunities to reinvent ourselves in a way that focuses on innovation, entrepreneurship, and technological growth for the future. Helping West Virginia to expand in the technology space is one of my roles as co-chair of the Tech Caucus in West Virginia’s House.

Personally, what fulfills you most? My family and colleagues at work. I’m so blessed to have an opportunity to live, work, and raise a family in a place I love.

Tell us something about yourself that people may not know. The A.A. in my given name is from my late grandfather – Arch Alfred Moore, Jr., former Governor of West Virginia. My Mom – Shelley Moore Capito – is a U.S. Senator from West Virginia. I also play solitaire, with real cards, in my free time.

Click here for PDF. 

April 16, 2020

Commonwealth Court Update: Preliminary Opinions and Development Rights

The Legal Intelligencer

(by Krista-Ann Staley)

The Pennsylvania Commonwealth Court, the statewide intermediate appellate court that hears and decides land use appeals, took a temporary hiatus from issuing opinions while the Unified Judicial System of Pennsylvania adapted to the COVID-19 pandemic. During the hiatus, the Commonwealth Court: closed to the public for all nonessential functions through April 30, in accordance with a series of orders from the Pennsylvania Supreme Court; cancelled its March argument session in Harrisburg, indicating that it would decide all cases listed for argument on briefs unless a party requested an oral argument; extended certain filing deadlines under the Pennsylvania Rules of Appellate Procedure and deadlines for briefs, petitions, motions and applications for pending matters for 30 days; cancelled its April argument session in Harrisburg; relocated its May argument session from Pittsburgh to Harrisburg; and announced the May argument list. The Commonwealth Court then resumed posting opinions April 7, and is expected to work through a backlog of cases while its operations remain limited.

Prior to its hiatus, the Commonwealth Court released several land use decisions, two of which addressed statutory interpretation issues through subjects that rarely come before the court: zoning officer preliminary opinions and transferrable development rights.

In Friends of Lackawanna v. Dunmore Borough Zoning Hearing Board, No. 1586 C.D. 2018 (Pa. Commw. Ct. Feb. 18, 2020), the court addressed the “preliminary opinion” procedure set forth in the Pennsylvania Municipalities Planning Code, 53 P.S. §§10101, et seq. (the MPC). That process, added as Section 10916.2 of the MPC by the act of Dec. 21, 1988, P.L. 1329, serves to advance the timeline for a substantive validity challenge and allow a landowner to “secure assurance that the ordinance …  is free from challenge” before filing a land use application. Without a preliminary opinion, an objector can only bring a substantive...

April 15, 2020

EPA Publishes Interim Guidance on Site Field Work Decision-Making Related to COVID-19 Impacts

Environmental Alert

(by Lindsay Howard and Matthew Wood)

The COVID-19 pandemic continues to disrupt nearly all aspects of American life and business, including ongoing response activities being conducted under the authority of the U.S. Environmental Protection Agency (EPA).  In connection with these impacts, on April 10, 2020, EPA published a memorandum entitled, Interim Guidance on Site Field Work Decisions Due to Impacts of COVID-19 (“EPA’s COVID-19 Field Work Guidance” or “Guidance”).  The Guidance offers guidelines, specific factors, and examples EPA Regions should consider in their decision-making processes to continue, reduce, or suspend on-site work.  Driving these case-by-case decisions are EPA’s two main priorities: (1) protecting the health and safety of the public, as well as EPA’s staff and cleanup partners; and (2) maintaining EPA’s ability to prevent and respond to environmental emergencies.  This Alert addresses questions regarding EPA’s guidelines and decision-making under the Guidance.

To What Sites Does EPA’s COVID-19 Field Work Guidance Apply?

EPA’s COVID-19 Field Work Guidance applies to ongoing and emergency response actions conducted at sites across the United States under multiple federal programs, including Superfund, RCRA, and TSCA, where EPA is the lead agency or has direct oversight of or responsibility for the work being performed.  EPA acknowledges that any number of parties may actually be performing the work covered by its Guidance, including EPA, states, tribes, other federal agencies, or potentially responsible parties (PRPs).  Although the Guidance does not apply directly to states, EPA specifies that Regions should share the Guidance with states and assist states conducting state-lead RCRA cleanups.

In What Types of Situations Will EPA Regions Reduce or Suspend Response Actions?

The Guidance identifies multiple situations that have informed (or may inform) Regions’ decisions to reduce or suspend response actions.  Among these are where state, tribal, or local officials request a suspension of the response...

April 13, 2020

Coronavirus may be basis to invoke force majeure provision of consent orders and consent decrees in Pennsylvania

The PIOGA Press

(by Kevin Garber, Sean McGovern and Jean Mosites)

On March 6, Governor Tom Wolf issued a Proclamation of Disaster Emergency throughout the Commonwealth under the Pennsylvania Emergency Management Services Code in response to the expanding COVID-19 coronavirus pandemic. On March 13, President Donald Trump declared a state of national emergency. Many other states and local governments are following suit. These government actions may be a basis to invoke the force majeure clause of consent orders and consent decrees between regulated parties and the Pennsylvania Department of Environmental Protection, other state and local environmental regulatory agencies or the U.S. Environmental Protection Agency.

The standard force majeure provision of most DEP consent orders and agreements allows deadlines in the order to be extended if circumstances beyond the reasonable control of the regulated party prevent compliance with the order. Similar provisions are often found in consent agreements with EPA and in consent decrees approved by federal and state courts.

These force majeure provisions typically require the affected party to notify the agency of the force majeure event when the party becomes aware or reasonably should have become aware of the event impeding performance. For example, the model DEP Consent Order and Agreement requires telephone notice within five working days and written notice, in some circumstances by notarized affidavit, within 10 working days describing the reasons for the delay, the expected duration of the delay, and the efforts being taken to mitigate the effects of the event and length of the delay. This model provision states that failure to comply with the timing and notice requirements invalidates a force majeure extension.

There are compelling reasons why the coronavirus pandemic, which is unlike any event experienced in this country, is beyond the contemplated scope of agency force majeure clauses such that strict adherence...

April 13, 2020

DEP will consider requests to temporarily suspend environmental requirements due to COVID-19

The PIOGA Press

(by Lisa Bruderly and Daniel Hido)

As businesses in Pennsylvania struggle to deal with significant disruptions and challenges to their operations caused by the COVID-19 pandemic, environmental agencies have recognized the challenges the pandemic presents to achieving compliance with environmental obligations. For example, on March 26 the U.S. Environmental Protection Agency issued a temporary policy for excusing COVID-19-related noncompliance (see accompanying article). Similarly, on March 31 the Pennsylvania Department of Environmental Protection issued an alert (www.dep.pa.gov/Pages/AlertDetails.aspx) announcing that it would consider requests to temporarily suspend certain regulatory, permit, and/or other legal requirements due to COVID-19. DEP also provided the form needed to make such a request.

This announcement reflects a thought change from DEP’s previous assertion that COVID-19’s impact on businesses in Pennsylvania would not excuse compliance with environmental laws, stating that “ll permittees and operators are expected to meet all terms andconditions of their environmental permits, including conditions applicable to cessation of operations.”

What is required to request a temporary suspension?

Unlike EPA’s temporary policy, which does not require regulated entities to submit documentation regarding an inability to meet routine compliance obligations, DEP is requiring submittal of the request form. While DEP did not elaborate on how it will review requests for suspension, it will generally evaluate (1) the reasons for the request in light of the COVID-19 pandemic, and (2) the risk of harm to the environment or public health if the request is or is not granted.

Importantly, it will not be enough for entities to show that COVID-19 has restricted their ability to comply with regulatory, permit or other legal requirements; entities must demonstrate that strict compliance would prevent, hinder or delay necessary action in coping with the COVID-19 emergency. This standard reflects the language of Governor Tom Wolf’s March 6 Proclamation of Disaster Emergency and...

April 8, 2020

Update: U.S. DOT Agencies and TSA Extend COVID-19 HazMat Relief

Transportation Safety Alert

(by Boyd StephensonVarun ShekharJame Curry)

Babst Calland has updated this alert to capture new HazMat background check relief extended by the Transportation Security Administration (TSA).

In response to the COVID-19 pandemic, U.S. Department of Transportation (DOT) agencies that regulate the surface transportation of hazardous materials (HazMat) have extended several forms of relief.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) has waived some HazMat training requirements and delayed some equipment recertifications.  The Federal Motor Carrier Safety Administration (FMCSA) and the Federal Railroad Administration (FRA) are implementing PHMSA’s waiver in their modes. FMCSA has also allowed states to extend the effective dates for commercial driver’s licenses (CDL) and commercial learner’s permits (CLP).  Additionally, FRA has activated its emergency docket.  FRA has not extended any hazardous materials-specific relief.  Finally, the Transportation Security Administration (TSA) is allowing states to extend HazMat endorsements (HME).

Hazardous Materials Shippers, Carriers, and Package Manufacturers

On March 25th, PHMSA issued an updated policy declining to enforce recurrent training requirements under 49 C.F.R. § 172.704(c)(2) against HazMat employers unable to train employees due to COVID-19.  Employers are still required to provide initial training to a new hazardous materials employee before the employee may perform regulated functions. On April 1st, PHMSA issued two surface transportation-related emergency special permits authorizing the filling and transportation of certain DOT specification cylinders up to 12 months after they are due for a periodic requalification during the COVID-19 emergency. PHMSA also authorized the transportation of certain cylinders overdue for retesting due to COVID-19 disruptions.

Truck Transportation

On March 18th, FMCSA issued an expanded emergency declaration waiving certain provisions of Parts 390 through 399—most notably the hours of service requirements—for drivers providing direct assistance in support of relief efforts.  Direct assistance includes transporting medical supplies, food, paper, and grocery products; precursors for...

April 8, 2020

Amidst Coronavirus Pandemic NHTSA Issues First Proposed Rule Modifying the Federal Motor Vehicle Safety Standards to Remove Barriers to Automated Vehicles

Transportation Safety Alert

(by Ashleigh Krick, Boyd Stephenson and Justine Kasznica)

Amidst the coronavirus pandemic, the National Highway Traffic Safety Administration (NHTSA or the Agency) is moving forward with Automated Driving Systems (ADS) rulemakings.  On March 30, 2020, NHTSA issued the first of several anticipated regulatory actions proposing to amend the Federal Motor Vehicle Safety Standards (FMVSSs) to remove barriers to ADS-equipped vehicles, including those without traditional manual controls.  As with prior guidance from NHTSA, the Agency seeks to prioritize safety while promoting technology innovation.

On March 30, 2020, NHTSA issued a Notice of Proposed Rulemaking (NPRM) proposing to amend several of the crashworthiness FMVSSs (200 Series) for vehicles equipped with ADS that do not have manual controls and vehicles that are designed to transport only property (Occupant-less Vehicles).  NHTSA proposes several new or changed definitions, textual clarifications, and applicability changes to preserve the same level of occupant protection provided in current standards, while clarifying the application of the standards to ADS-equipped vehicles.  Specifically, NHTSA addresses configurations where, due to the lack of manual controls, the “driver seat” should rather be considered a front “passenger seat.”  NHTSA also proposes to modify the applicability of the 200 Series to Occupant-less Vehicles.

NHTSA issued this NPRM in response to comments received from the Agency’s January 18, 2018 Request for Comments that sought input on regulatory barriers in existing FMVSSs for ADS-equipped vehicles with non-traditional interior designs.  Many commenters thought that most of the regulatory barriers in the 200 Series did not require extensive research as only minor textual changes—principally driver-related references—would be needed.  Commenters agreed that the current crash protection provided to vehicle occupants should be maintained for ADS-equipped vehicles.

What is NHTSA proposing?

Definitions. NHTSA proposes new definitions for “driver air bag,” “driver dummy,” “driver’s designated seating position,” “passenger seating...

April 7, 2020

Update: Paycheck Protection Program FAQs (as of Tuesday, April 7, 2020)

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

Yesterday, the Small Business Administration (the SBA) published “Frequently Asked Questions” (the FAQ) guidance regarding the Paycheck Protection Program (PPP Loan), enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Among other clarifications, below are some of the critical points that the SBA has clarified in the FAQ. The full FAQ can be found here. The SBA intends to update this document on a regular basis.

Monthly Payroll Verification by Lender

A lender is not to replicate an applicant’s calculation of “monthly payroll costs.” A lender’s minimal review of calculations based on a payroll report by a recognized third-party payroll processor, for example, would be reasonable. If the lender identifies errors in the borrower’s calculation, the lender should work with the borrower to remedy the error.  See FAQ #1.

Some Companies with More than 500 Employees can Apply for PPP Loan

Companies with more than 500 employees can qualify for the PPP loan if the company satisfies the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act. A company can qualify if it meets the employee-based or revenue-based size standard corresponding to its primary industry. Visit www.sba.gov/size for the industry size standards.

Additionally, a business can qualify for a PPP loan as a small business concern if it meets both tests in the SBA’s “alternative size standard” as of March 27, 2020. This test is satisfied if: (1) maximum tangible net worth of the business is not more than $15 million; and (2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.  See...

April 3, 2020

U.S. DOT Agencies Extend COVID-19 HazMat Relief

Transportation Safety Alert

(by Boyd Stephenson, Varun Shekhar, Jame Curry)

In response to the COVID-19 pandemic, U.S. Department of Transportation (DOT) agencies that regulate the surface transportation of hazardous materials (HazMat) have extended several forms of relief.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) has waived some HazMat training requirements and delayed some equipment recertifications.  The Federal Motor Carrier Safety Administration (FMCSA) and the Federal Railroad Administration (FRA) are implementing PHMSA’s waiver in their modes.  FMCSA has also allowed states to extend the effective dates for commercial driver’s licenses (CDL) and commercial learner’s permits (CLP).  Additionally, FRA has activated its emergency docket.  FRA has not extended any hazardous materials-specific relief.

Hazardous Materials Shippers, Carriers, and Package Manufacturers

On March 25th, PHMSA issued an updated policy declining to enforce recurrent training requirements under 49 C.F.R. § 172.704(c)(2) against HazMat employers unable to train employees due to COVID-19.  Employers are still required to provide initial training to a new hazardous materials employee before the employee may perform regulated functions. On April 1st, PHMSA issued two surface transportation-related emergency special permits authorizing the filling and transportation of certain DOT specification cylinders up to 12 months after they are due for a periodic requalification during the COVID-19 emergency.  PHMSA also authorized the transportation of certain cylinders overdue for retesting due to COVID-19 disruptions.

Truck Transportation

On March 18th, FMCSA issued an expanded emergency declaration waiving certain provisions of Parts 390 through 399—most notably the hours of service requirements—for drivers providing direct assistance in support of relief efforts.  Direct assistance includes transporting medical supplies, food, paper, and grocery products; precursors for those products; fuel; and equipment for constructing facilities to treat or house COVID-affected individuals.  Direct assistance does not include routine commercial deliveries, including mixed loads with a nominal quantity of...

April 3, 2020

PADEP Will Consider Requests to Temporarily Suspend Environmental Requirements Due to COVID-19

Environmental Alert

(by Lisa Bruderly and Daniel Hido)

As businesses in Pennsylvania struggle to deal with significant disruptions and challenges to their operations caused by the COVID-19 pandemic, environmental agencies have recognized the challenges that the pandemic presents to achieving compliance with environmental obligations. For example, on March 26, 2020, the U.S. Environmental Protection Agency (USEPA) issued a temporary policy for excusing COVID-19-related noncompliance (see Babst Calland’s March 30, 2020 Environmental Alert for further details). Similarly, on March 31, 2020, the Pennsylvania Department of Environmental Protection (PADEP) issued an Alert announcing that it would consider requests to temporarily suspend certain regulatory, permit, and/or other legal requirements due to COVID-19. It also provided the form needed to make such a request. This announcement reflects a thought change from PADEP’s previous assertion that COVID-19’s impact on businesses in Pennsylvania would not excuse compliance with environmental laws, stating that “ll permittees and operators are expected to meet all terms and conditions of their environmental permits, including conditions applicable to cessation of operations.”

What is Required to Request a Temporary Suspension?

Unlike USEPA’s temporary policy, which does not require regulated entities to submit documentation regarding an inability to meet routine compliance obligations, PADEP is requiring submittal of the request form. While PADEP did not elaborate on how it will review requests for suspension, it will generally evaluate (1) the reasons for the request in light of the COVID-19 pandemic, and (2) the risk of harm to the environment or public health if the request is or is not granted.

Importantly, it will not be enough for entities to show that COVID-19 has restricted their ability to comply with regulatory, permit, or other legal requirements; entities must demonstrate that strict compliance would prevent, hinder, or delay necessary action in coping with the COVID-19 emergency. This...

April 3, 2020

Update: Interim Final Rule Issued for Paycheck Protection Program

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

On April 2, 2020, the Small Business Administration (the SBA) published an Interim Final Rule regarding the Paycheck Protection Program (PPP Loan), enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Below are critical points that the SBA has clarified in the published guidance. The Interim Final Rule can be found here.

What is the interest rate of the loan?

The SBA has advised that the interest rate of the loan has been increased from a 0.5 percent fixed rate to a 1 percent fixed rate.

Do independent contractors count as employees for purposes of PPP Loan calculations or PPP Loan forgiveness?

No. Independent contractors have the ability to apply for their own PPP Loans, so they do not count for purposes of a borrower’s PPP Loan calculations or forgiveness.

How can PPP Loan proceeds be used?

The proceeds of a PPP loan are to be used for:

payroll costs (as defined in the Act and in 2.f.); costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; mortgage interest payments (but not mortgage prepayments or principal payments); rent payments; utility payments; interest payments on any other debt obligations that were incurred before February 15, 2020; and/or refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020.

If you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP Loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP Loan. If your EIDL loan was used for payroll costs, your PPP Loan must be used to refinance your EIDL loan. Proceeds from...

April 2, 2020

US Supreme Court Update: Cases to Watch for CERCLA Practitioners

The Legal Intelligencer 

(by Alana Fortna)

While there are several interesting environmental cases currently before the U.S. Supreme Court, two cases are particularly relevant for any legal practitioner handling Superfund cases, whether they involve site remediation issues or litigation over the cleanup costs. The two cases to watch are Atlantic Richfield v. Christian, Case No. 17-1498, and County of Maui v. Hawaii Wildlife Fund, Case No. 18-0260. Respectively, these two cases deal with the important legal questions of preemption and how groundwater discharges can be regulated and enforced. Both issues could have a significant impact on the scope of remediation and potential litigation at Superfund sites. CERCLA practitioners should watch for the opinions in these two cases.

The Atlantic Richfield appeal came out of the Montana Supreme Court, and it asks the court whether the Comprehensive Environmental Response, Compensation and Recovery Act (CERCLA), 42 U.S.C. Section 9601 preempts state common law remedies. The case involves the Anaconda Smelter Site, a Superfund site covering 300 square miles of property impacted by historical smelter and ore processing operations. The U.S. Environmental Protection Agency (EPA) placed the site on the National Priorities List in 1983 and identified Atlantic Richfield Co. as a potentially responsible party (PRP). After years of remedial investigation under EPA oversight, the EPA approved a remedial action plan for the cleanup of the site. The respondents in the appeal are a group of landowners who sued Atlantic Richfield alleging common law tort claims seeking more traditional damages, such as monetary damages and diminution of property value.  However, the respondents also sought relief in the form of restoration, asking that Atlantic Richfield remediate or pay for remediation above and beyond the EPA-approved remedy. The respondents argued that Montana law supports their requested relief and requires Atlantic Richfield to restore the property to its pre-contamination state before...

April 2, 2020

COVID-19 Updates to Pennsylvania & West Virginia Unemployment Laws

Employment & Labor Alert

(by Stephen Antonelli, Mychal Schulz and Brian Lipkin)

At this uncertain time, many employers are considering whether to lay off or furlough employees – particularly employees who are unable to work remotely.  Earlier this week, we provided guidance on an alternative to layoffs and furloughs, as some employers are exploring grants and loans that are available under the new federal and state stimulus programs.  With this Alert, we are providing an update on recent changes to Pennsylvania and West Virginia unemployment laws:

Increased Benefit Amounts  Normally, unemployment benefits are capped at $573 per week in Pennsylvania and $424 per week in West Virginia.  Under the Paycheck Protection Program provision of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the federal government will supplement state unemployment benefits by $600 per week.  Through July 31, 2020, unemployment benefits will be capped at $1,173 per week in Pennsylvania, and $1,024 per week in West Virginia.  As a result, for the next four months, some workers may actually earn more in unemployment benefits than they would have earned in wages.  For example, an employee who would otherwise receive $100 per week of state unemployment benefits will now receive an additional $600 per week from the federal government.  After the federal supplement of $600 per week expires, the employee may continue to collect unemployment benefits at the usual rate in each state Expanded Eligibility  Until recently, Pennsylvania and West Virginia limited unemployment benefits to certain employees.  In Pennsylvania, to receive unemployment benefits, an employee must have earned at least $116 per week, during at least 18 weeks in the past year.  In West Virginia, employees must satisfy two requirements within the past year: they must have earned a total of at least $2,200; and they must...