July 14, 2017
A Duty to Reimburse Defense Costs When Accepting a Defense as an Additional Insured in Pennsylvania-Practical Considerations
The Critical Path
Insurance coverage issues on commercial construction projects are complex. Add in the contractual requirement of providing additional insured status and problems can arise when tendering and accepting a defense.
This article discusses a unique insurance coverage issue which may arise in a multi-defendant property damage action involving additional insured requirements among contractors. It is common in a property damage action for a carrier to provide a defense and later file a declaratory judgment when evidence discerned in discovery establishes that no coverage existed. In these situations, the policy language and jurisdiction determines whether the insured owes defense costs to the carrier.
But what is the duty of an additional insured to reimburse the carrier for defense costs when it is subsequently determined that coverage did not exist? The additional insured has no written contract with the carrier. Moreover, what if the additional insured was provided a defense from its own carrier, only to have the defense tendered to a
different carrier based upon additional insured status? What is the obligation of the primary insurer? Let’s address this through a factual example.
The Owner hires Contractor to construct a mixed-use building and the Contractor subsequently hires a Subcontractor. The contract between Contractor and Subcontractor calls for Subcontractor to add and recognize Contractor as an additional insured to its policy.
Substantial completion is achieved and the Owner takes possession of the building despite a payment dispute between Contractor and Owner. The Contractor files suit against the Owner. The Owner claims major structural issues with the building. The Owner then files a Counterclaim for breach of contract and negligence against the Contractor and joins the Subcontractor under a negligence theory.
Contractor and Subcontractor each turn the claims over to their respective carriers, and each provide a defense under a reservation of rights. Contractor’s carrier recognizes its…
D.C. Circuit Strips Portions of EPA’s 2015 Definition of Solid Waste Rule, Relaxing Standards for Industry
The U.S. Court of Appeals for the District of Columbia Circuit (“the Court”) has vacated parts of the U.S. Environmental Protection Agency (EPA) Definition of Solid Waste Rule (“the Rule”) under the Resource Conservation and Recovery Act (RCRA). The decision will have a significant impact on generators of hazardous secondary materials (HSMs) and facilities that store or recycle them. Although the Court’s decision relaxed some of the requirements of the Rule, facilities still will need to carefully evaluate how to handle and manage HSMs both onsite and offsite.
In 2015, EPA revised the Rule governing the recycling of certain HSMs (e.g., spent materials, listed by-products, listed sludges) in an effort to cut down on “sham recycling.” The rulemaking required generators of HSMs that were destined for recycling to demonstrate that the recycling of such material is legitimate pursuant to certain “Legitimacy Criteria.” The 2015 rulemaking also required generators that shipped HSMs offsite for recycling to send such materials to RCRA-permitted facilities or to EPA- or state agency-approved “verified recyclers” pursuant to the so-called “Verified Recycler Exclusion.” This exclusion allowed certain HSMs to be considered “reclaimed” and thus not subject to solid waste regulation.
Industry and environmental groups filed petitions challenging the 2015 rulemaking. On July 7, 2017, in a 2-1 decision, the Court in American Petroleum Institute, et al. v. EPA
, ruled largely in favor of industry groups as it vacated parts of the Legitimacy Criteria and the Verified Recycler Exclusion.
EPA’s 2015 rulemaking required companies to meet four (4) factors (the Legitimacy Criteria) to distinguish legitimate recycling of HSMs from sham recycling:
- The HSM must provide a useful contribution to the recycling process or to a product or intermediate of the recycling process;
- The recycling process must produce a valuable product or intermediate;
- The HSM must be handled as a valuable…
July 12, 2017
Supreme Court reexamines the Environmental Rights Amendment
The PIOGA Press
The Pennsylvania Supreme Court has rejected the long-standing test for analyzing claims brought under Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA). In its June 20, decision in Pennsylvania Environmental Defense Foundation (PEDF) v. Commonwealth, the Supreme Court set aside the test from Payne v. Kassab that has been used since 1973, and held that the Commonwealth’s oil and gas rights are “public natural resources” under the ERA and that any revenues derived from the sale of those resources must be held in trust and expended only to conserve and maintain public natural resources.
The Supreme Court’s opinion in PEDF is an important step in the ongoing judicial reexamination of the ERA. However, the impact of the court’s decision on environmental and land use issues beyond the relatively narrow facts of this case remains unclear.
A statutory special fund in Pennsylvania known as the Oil and Gas Lease Fund holds all rents and royalties from oil and gas leases of Common wealth land. The lease fund was originally required by statute to be used “exclusively used for conservation, recreation, dams, or flood control.” In 1995, the Pennsylvania Department of Natural Resources (DCNR) became the entity responsible for making appropriations from the lease fund for projects. Between 2009 and 2015, the Pennsylvania General Assembly made a number of budgetary decisions related to the lease fund, including the enactment of Sections 1602-E and 1603-E of the Fiscal Code, which transferred control over the royalties from oil and gas leases from the DCNR to the General Assembly and required that there could be no expenditures of money in the lease fund from royalties unless that money was transferred to the General Fund by the General Assembly.
PEDF brought claims challenging Sections 1602-E, 1603-E, and…
July 10, 2017
Former U.S. Department of Transportation and NHTSA Safety Attorney Tim Goodman Joins Babst Calland’s Washington, D.C. Office in Transportation Safety Group
Babst Calland announced that Timothy H. Goodman
has joined the firm as shareholder in the Transportation Safety Group
in the Firm’s Washington, D.C. office
Goodman brings to clients a current and detailed understanding of the federal government’s approach to transportation safety regulation (particularly motor vehicles), including its programs and personnel as a former Federal Senior Executive (key positions just below top Presidential appointees). Goodman spent nearly a decade at the U.S. Department of Transportation (USDOT), where he served in various capacities, including at the National Highway Traffic Safety Administration (NHTSA) and in the Secretary of Transportation’s Office of the General Counsel. As NHTSA’s Assistant Chief Counsel for Litigation and Enforcement, Goodman was the chief legal officer for the litigation and enforcement matters of the 600-plus employee federal agency. He also served as a senior trial attorney in the Secretary of Transportation’s Office of the General Counsel, where he led teams in matters throughout USDOT and across multiple transportation modes, including pipeline safety, hazardous materials, federal environmental, urban transit, motor carrier, aviation economic regulatory, and maritime matters.
Goodman is the fourth former USDOT regulatory attorney during the past 18 months to join Babst Calland’s Washington, D.C. office where former colleagues and energy attorneys from the USDOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) maintain a national Pipeline and HazMat Safety practice
. He joins us from a prominent global law firm where he focused on transportation regulatory and litigation matters.
At the DOT, Goodman was recognized for effectively working with corporate executives, senior officials and engineers to achieve practical and efficient results in high profile enforcement actions, landmark consent orders, litigations and rulemakings. He collaboratively led some of the largest civil enforcement actions and recalls in the history of NHTSA – including the largest and most complex safety recall in…
July 6, 2017
Managing an Environmental Crisis
The call never seems to come at an ideal time. It is usually late in the workday or over a weekend, and it often starts with a question from an unusually tense client who asks, “Hey, we have a problem. Do you have a few minutes to talk?”
Perhaps none of my prior cases have been as notable or newsworthy as the January 2014 Freedom Industries, Inc., (Freedom) spill into the Elk River in Charleston, West Virginia.1
The Freedom chemical storage and distribution facility was located in Charleston on the banks of the Elk River. On the morning of January 9, 2014, inspectors from the West Virginia Department of Environmental Protection arrived at the facility in response to complaints about a chemical odor. It subsequently was determined that as much as 10,000 gallons of a mixture of crude methylcyclohexanemethanol (MCHM) and polyglycol ethers (PPH, stripped) leaked from an aboveground storage tank at the facility and that some portion of the leaked chemicals flowed into the Elk River. The facility was located approximately 1.5 miles upstream of the intake for the West Virginia American Water drinking water treatment facility. The MCHM/PPH mixture was drawn into the West Virginia American Water intake on the Elk River, thereby contaminating the drinking water system. Later, on the evening of January 9, West Virginia American Water issued a “do not use” order for 93,000 customer accounts (approximately 300,000 residents) across portions of nine counties in West Virginia. After the spill, hospitals reported a noted increase in patient visits, with complaints of a number of symptoms including nausea, rashes, vomiting, abdominal pain, and diarrhea following exposure to the water through inhalation, ingestion, and/or skin contact. Residents affected by the “do not use” order were further advised to restrict their usage of tap water for drinking, cooking, and bathing for up to nine days.
July 5, 2017
EPA methane rule back in effect after ruling, but agency still plans 2-year stay
Even though a court struck down
the U.S. Environmental Protection Agency’s attempted 90-day pause on oil and gas industry methane regulations, the EPA may still be able to carry out plans for a longer regulatory suspension.
The 90-day stay, which went into effect June 2 but was vacated July 3, was not the only suspension in the works for the EPA rule designed to limit methane from new and modified oil and gas sources. The agency on June 16 proposed a two-year stay on the regulation’s requirements on fugitive emissions, pneumatic pumps and professional engineer certification.
For the longer stay, the agency is taking 30 days of comment from the public on the hold. Importantly, that process uses different statutory authority with different legal standards than the ones at play for the shorter, recently reversed stay, according to Whit Swift, a partner with Bracewell LLP.
“I don’t think that is fatal to the longer stay that is presumably just citing the broader authority of the EPA administrator to promulgate rules as deemed necessary,” Swift said in a July 5 interview. “If you think of that as the authority for this longer stay, the court doesn’t determine the fate of the longer stay. But it does create … the confusing situation they were trying to avoid. … Now you’ve got these elements of the methane rule springing back into effect until EPA, assuming it moves forward, does stay the rule following notice and comment.”
For the 90-day stay attempt, EPA Administrator Scott Pruitt moved to put a hold on parts of the agency’s rule limiting methane emissions, saying stakeholders had not had enough time to discuss certain aspects of the final 2016 regulation. The rule’s supporters fired back soon after, countering that those issues were already “extensively deliberated” during the regulation’s comment period. Two out of three judges…
June 28, 2017
Appalachian Consolidation Makes Sense for Efficiency Focused E&Ps, Law Firm Says
Natural Gas Intelligence
Consolidation will continue to make sense for producers in the Appalachian Basin as those companies that made it through the recent downturn focus on efficiency, according to a recent report from Pittsburgh-based law firm Babst Calland.
In its annual report on the state of the Marcellus and Utica shale producing region, Babst Calland highlighted the impact low commodity prices have had on the industry over the past year.
Recently the Appalachian Basin has seen consolidation through merger and acquisition (M&A) activity, the firm said, pointing to recent activity by Rice Energy Inc. and EQT Corp., among others.
“With efficiency of operations in mind, natural gas producers continue to focus on consolidating their activities geographically,” the firm said. “The oil and gas industry faced significant financial stress over the past year, and 2016 will go down as one of the more dramatic years in the United States’ oil and gas history.”
Babst Calland said 2016 saw 70 North American exploration and production (E&P) companies file for bankruptcy.
Last week, EQT announced an estimated $8 billion takeover
of Appalachian neighbor Rice Energy, a deal that would create the largest U.S. natural gas producer. Management for EQT said the synergies from the transaction would be focused in Southwest Pennsylvania, where the combination of the acreage positions would allow increased lateral lengths and reduced operational costs.
While companies with “sufficient financial strength and operational ability” may be able to take advantage of opportunities for “large-scale consolidation,” others in the basin may seek joint ventures to keep costs low, according to Babst Calland.
“Where acreage positions are complementary, natural gas producers may also seek to joint venture on a unit-by-unit basis with other producers who are able to operate at a lower cost, with higher productivity, or with a more intense focus in a particular area,” the firm…
June 27, 2017
State and federal governments remain active in a changing regulatory landscape—air regulatory updates
The PIOGA Press
This article is an excerpt of The 2017 Babst Calland Report, a report which represents the collective legal perspective of Babst Calland’s energy, environmental and pipeline safety attorneys addressing the most current business and regulatory issues facing the oil and natural gas industry. A full copy is available by writing email@example.com.
The second half of 2016 was marked by several significant federal air program developments as the Environmental Protection Agency (EPA) raced to implement President Barack Obama’s Climate Action Plan before the change in administration. The final New Source Performance Standards (NSPS) for oil and natural gas production, processing, transmission and storage activities, which established first-time methane requirements, went into effect on August 2. By then, lawsuits were already well underway to challenge the 2016 NSPS and EPA’s authority to regulate methane emissions.
In October, EPA finalized the “Control Techniques Guide – lines” (CTG) directing state and local air agencies to reduce volatile organic compound (VOC) emissions from existing oil and natural gas industry sources in areas with ozone problems (including all of Pennsylvania). It is anticipated that Pennsylvania will adopt regulations to implement the CTG in the Commonwealth within the next few years.
In November, EPA issued a final Information Collection Request (ICR) to gather information for the agency to develop a federal rule to limit methane emissions from existing sources. The final ICR set in motion a flurry of activity as more than 15,000 owners and operators were tasked with submitting extensive information to EPA in a short timeframe. For many companies, the ICR presented an enormous challenge due to its broad scope, complex EPA reporting forms and significant compliance costs. Also in November, EPA finalized additional revisions to the Petroleum and Natural Gas Systems source category of its Greenhouse Gas Reporting Rule.
The Trump administration acted quickly to reverse course…
June 23, 2017
The Pennsylvania Supreme Court Reexamines the Environmental Rights Amendment
The Pennsylvania Supreme Court has rejected the long-standing test for analyzing claims brought under Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA). In its June 20, 2017 decision in Pennsylvania Environmental Defense Foundation (PEDF) v. Commonwealth, the Supreme Court set aside the test from Payne v. Kassab that has been used since 1973, and held that the Commonwealth’s oil and gas rights are “public natural resources” under the ERA and that any revenues derived from the sale of those resources must be held in trust and only expended to conserve and maintain public natural resources.
The Supreme Court’s opinion in PEDF is an important step in the ongoing judicial re-examination of the ERA. However, the impact of the Court’s decision on environmental and land use issues beyond the relatively narrow facts of this case remains unclear.
A statutory special fund in Pennsylvania, known as the Oil and Gas Lease Fund (Lease Fund), holds all rents and royalties from oil and gas leases of Commonwealth land. The Lease Fund was originally required, by statute, to be used “exclusively used for conservation, recreation, dams, or flood control.” In 1995, the Pennsylvania Department of Natural Resources (DCNR) became the entity responsible for making appropriations from the Lease Fund for projects. Between 2009 and 2015, the Pennsylvania General Assembly made a number of budgetary decisions related to the Lease Fund, including the enactment of Sections 1602-E and 1603-E of the Fiscal Code, which transferred control over the royalties from oil and gas leases from the DCNR to the General Assembly and required that there could be no expenditures of money in the Lease Fund from royalties unless that money was transferred to the General Fund by the General Assembly.
PEDF brought claims challenging Sections 1602-E, 1603-E,…
June 22, 2017
Stormwater Management Ordinance Not Land Use Ordinance Under MPC
The Legal Intelligencer
The Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq., authorizes municipalities to engage in land use planning and implement land use controls through a number of mechanisms, including comprehensive plans, official maps, zoning ordinances, subdivision and land development ordinances and planned residential developments. On May 9, the Commonwealth Court rendered a decision in Delchester Developers v. Zoning Hearing Board, 2017 Pa. Commw. Ct. LEXIS 192 (Pa. Commw. Ct. 2017), concluding, among other things, that stormwater management ordinances are not land use ordinances governed by the MPC.
In Delchester Developers, Delchester Developers L.P. submitted a preliminary land development plan application to the township of London Grove seeking approval to develop commercially two lots located within the township’s Groundwater Protection Overlay District. The overlay district encompasses a threatened geological formation in the township that allows water to move quickly through it. In recognition of the threat to and challenges posed by the geological formation, the township board of supervisors adopted stringent stormwater management regulations applicable in the overlay district to ensure recharge, prevent sinkhole formation and protect the groundwater from contamination.
In order to effectuate its plans, Delchester sought several variances and special exceptions from the township’s zoning hearing board, and brought challenges to the substantive validity of various township ordinances, including the township’s stormwater management ordinance (SWMO). The township zoning hearing board denied all of Delchester’s requests. The zoning hearing board rejected Delchester’s substantive validity challenge to the SWMO, concluding that because the SWMO is not a land use ordinance under the MPC, the zoning hearing board lacked jurisdiction over the challenge. The trial court affirmed.
Section 909.1(a)(1) of the MPC confers upon a zoning hearing board exclusive jurisdiction to hear and render final adjudications on “substantive challenges to the validity of any land use ordinance,” 53 P.S. Section…
June 21, 2017
O&G industry rebounds, but challenges remain: Babst Calland
The oil and gas industry rebounded during the past year through efficiency measures, consolidation and a resurgence of business opportunities related to shale gas development and its impact on upstream, midstream and downstream companies, according to a just-released study by Pittsburgh-based law firm Babst Calland.
As a result, many new opportunities and approaches to regulation, asset optimization and infrastructure are underway, The 2017 Babst Calland Report – Upstream, Midstream and Downstream: Resurgence of the Appalachian Shale Industry; Legal and Regulatory Perspective for Producers and Midstream Operators
“This report provides perspective on the challenges and opportunities of a resurging shale gas industry in the Appalachian Basin, including: the divergence of federal and state policy that creates more uncertainty for industry; increased special interest opposition groups on new issues and forums despite their lack of success in the courts; and the expansion from drilling to midstream development and now to downstream manufacturing that demonstrates the emergence of a more diverse energy economy,” according to Joseph K. Reinhart
, co-chair of Babst Calland’s Energy and Natural Resources Group.
Shale gas continues to provide Pennsylvania, Ohio and West Virginia with “significant economic opportunities through employment and related revenue from the development of well sites, building of pipelines necessary to transport gas to market, and new downstream opportunities being created for manufacturing industries due to the volume of natural gas and natural gas liquids produced in the Appalachian Basin.”
Shell’s progress from a year ago to construct an ethane cracker plant in Beaver County, Pa., represents just one example of the expanding downstream market for natural gas, according to the law firm, Kallanish Energy finds.
Many other manufacturing firms are expected to enter the region and establish businesses drawn by the energy and raw materials associated with natural gas and natural gas liquids from the Marcellus and…
June 20, 2017
The 2017 Babst Calland Report – Upstream, Midstream and Downstream: Resurgence of the Appalachian Shale Industry; Legal and Regulatory Perspective for Producers and Midstream Operators
Babst Calland released its seventh annual energy industry report entitled The 2017 Babst Calland Report – Upstream, Midstream and Downstream: Resurgence of the Appalachian Shale Industry; Legal and Regulatory Perspective for Producers and Midstream Operators.
This annual review of shale gas development activity acknowledges the continuing evolution of this industry in the face of economic, regulatory, legal and local government challenges. To request a copy of the Report, contact firstname.lastname@example.org.
In this Report
, Babst Calland attorneys provide perspective on issues, challenges, opportunities and recent developments in the Appalachian Basin and beyond relevant to producers and operators .
In general, the oil and gas industry has rebounded during the past year through efficiency measures, consolidation and a resurgence of business opportunities related to shale gas development and its impact on upstream, midstream and downstream industries. As a result, many new opportunities and approaches to regulation, asset optimization and infrastructure are underway. Increased spending during the past year has led to a significantly higher rig count in the Appalachian Basin enabling growth in the domestic production of oil and gas as other shale plays across the country experience reductions.
The shale gas industry continues to provide the tri-state region with significant economic opportunities through employment and related revenue from the development of well sites, building of pipelines necessary to transport gas to market, and new downstream opportunities being created for manufacturing industries due to the volume of natural gas and natural gas liquids produced in the Appalachian Basin. Shell’s progress from a year ago to construct an ethane cracker plant in Beaver County, Pennsylvania represents just one example of the expanding downstream market for natural gas. Many other manufacturing firms are expected to enter the region and establish businesses drawn by the energy and raw materials associated with natural gas and natural gas liquids from the…
June 19, 2017
Enforcement of Philadelphia’s Wage History Prohibition on Hold
PA Law Weekly
Job interviews are tough and they can be full of awkward questions. One of the awkward questions many applicants face is a potential employer’s request for an applicant’s compensation history. Not only is that question awkward, but some have theorized that basing starting compensation on an applicant’s historical compensation perpetuates the gender and minority wage gap. As a result, a percentage increase of the current salary of an applicant who is impacted by the wage gap could result in an even wider wage gap when compared to an applicant who is not negatively impacted by the wage gap. Accordingly, there has been a recent trend in several cities and states to propose and even pass legislation banning a new employer from seeking salary history information from an applicant or basing a starting salary on an applicant’s prior salary.
In 2016, Massachusetts became the first state to pass a law prohibiting employers from asking potential candidates about their salary histories prior to making a job offer. Massachusetts Gov. Charlie Baker signed “The Act to Establish Pay Equity” on Aug. 1, 2016, with an effective date of July 1, 2018. Under this law, among other things, it is unlawful for an employer to “seek the wage or salary history of a prospective employee from the prospective employee or a current or former employer or to require that a prospective employee’s prior wage or salary history meet certain criteria,” Section 105A(c)(2). Salary history bills have also been introduced in other states such as California, New Jersey and Washington.
Cities are also getting in on the action, passing ordinances prohibiting the salary history question. On May 4, Mayor Bill De Blasio of New York City signed a bill into law prohibiting employers from asking applicants about their salary histories or relying on the…
May 26, 2017
And the beat goes on: Municipal ordinances continue to face legal challenges
The PIOGA Press
The oil and gas industry has enjoyed recent successes in two types of ordinance challenges in Pennsylvania. The first victory came in another in a growing line of zoning ordinance validity challenges, this one in Mount Pleasant Township, Washington County. The second victory came in a challenge to Grant Township, Indiana County’s prohibition on underground injection wells.
Mount Pleasant Township
As we reported last year for The PIOGA Press
, five municipalities faced zoning ordinance validity challenges in 2015 and 2016. The cases were inspired largely by the Pennsylvania Supreme Court’s plurality opinion in Robinson Township v. Commonwealth
, and essentially argued that the ordinances did not regulate oil and gas development stringently enough, that zoning ordinances cannot permit oil and gas uses in agricultural or residential districts, and that municipalities must engage in extensive environmental assessments when enacting regulations.
In May 2016, while the Allegheny and Middlesex cases were pending on appeal before the Commonwealth Court and the Pulaski case was pending before the Lawrence County Court of Common Pleas, Citizens for Pennsylvania’s Future (PennFuture), with assistance from Fair Shake Environmental Legal Services (Fair Shake), challenged the Mount Pleasant Township, Washington County, zoning ordinance on similar Robinson Township
Range Resources-Appalachia, LLC, MarkWest Energy Partners, L.P., and owners of a proposed well site intervened in the case. The Mount Pleasant Township Zoning Hearing Board took testimony through nine nights of hearings and ultimately decided, as did the zoning hearing boards in the previous challenges, to uphold the targeted ordinance.
Critically, in the Mount Pleasant Township validity…
May 22, 2017
Trump Effect: How the Administration Could Reshape Pipeline Regulation
Pipeline & Gas Journal
A Conversation with Babst Calland Energy Attorney Keith Coyle.
P&GJ: What are you hearing from the pipeline industry in terms of its expectations on anticipated federal regulatory reforms resulting from President Trump’s executive actions? What are the financial and safety stakes at hand?
Coyle: The pipeline industry has been largely supportive of the actions taken by the new administration. The temporary regulatory freeze the White House imposed on Inauguration Day deferred several significant regulations that President Obama tried to issue at the end of his administration. President Trump’s approval of the Dakota Access and Keystone XL pipelines also fulfilled a key campaign promise and represented a sharp break from the policies pursued by his predecessor.
The recent executive orders on regulatory reform should have a positive impact on federal oversight of the pipeline industry during his administration. If President Trump is able to implement these reforms, the pipeline industry will be operating in a more efficient and effective regulatory environment, which should reduce unnecessary costs and encourage additional investment and development.
P&GJ: How could the Trump administration’s energy regulatory policies affect pipeline safety at the state level?
Coyle: The state agencies that regulate pipeline safety must adopt the minimum federal safety standards established by the Pipeline and Hazardous Materials Safety Administration (PHMSA). PHMSA initiated two rulemaking proceedings during the Obama administration that proposed significant changes to the safety standards for hazardous liquid and natural gas pipelines.
The new administration is going to have a lot of influence in determining whether and to what extent these regulatory changes become law in the near future. PHMSA is also required, under President Trump’s executive orders on regulatory reform, to identify obsolete or unnecessary regulations for revision or repeal. Both of these initiatives will have an impact on the federal pipeline safety regulations that state agencies…
May 16, 2017
Clean Water Act Squeeze Play: EPA Asks the Fourth Circuit Not to Force Work on New Water Quality Standards Pending Appeal in “Constructive Submission” TMDL Case
On May 2, 2017, the U.S. District Court for the Southern District of West Virginia (Chief Judge Robert C. Chambers) issued a Memorandum Opinion and Order denying a request by the Environmental Protection Agency (EPA) for a Stay of that court’s earlier decision on liability, in an important pending Clean Water Act case. Ohio Valley Environ. Coalition, et al. v. Pruitt (Civil Action No. 3:15-0271; S.D.W.Va.). At issue is a February 14, 2017 decision issued by Judge Chambers, granting summary judgment to the plaintiff groups (collectively, “OVEC”) against EPA. In that ruling, the court directed EPA to either approve or disapprove the “constructive submission” of “no TMDLs ” for all biologically impaired bodies of water within West Virginia, within 30 days.
OVEC filed the underlying action based upon the listing by the West Virginia Department of Environmental Protection (WVDEP) of 573 streams as “biologically impaired” under the WVDEP’s narrative water quality standards, one of which prohibits “materials in concentrations which are harmful…to man, animal, or aquatic life.” This list (known as a Clean Water Act “303(d) List”) was started in the late 1990s and includes streams that were added as recently as 2010, using a tool known as the “West Virginia Stream Condition Index.” Ordinarily, when a stream is listed on a 303(d) List as impaired, the relevant state agency develops a TMDL for that stream (which is a formula or method for limiting the concentration of pollutants flowing into the stream and thereby returning it to compliance).
In 2012, the West Virginia Legislature amended the West Virginia Water Pollution Control Act by directing the WVDEP to develop a new tool to assess the health of biological communities for purposes of determining compliance with the WVDEP’s biological water quality standard. Once that new methodology is finalized, an…
April 27, 2017
James Miller Selected by The Legal Intelligencer as a “2017 Lawyer on the Fast Track”
James D. Miller, a shareholder in the Litigation and Construction groups at law firm Babst Calland, was selected by The Legal Intelligencer
as a “2017 Lawyer on the Fast Track” in Pennsylvania.
The Legal Intelligencer
asked the Pennsylvania legal community to submit nominations for the annual Lawyers on the Fast Track honors. After reviewing their results, a six-member judging panel composed of evaluators from all corners of the legal profession and the state selected 32 attorneys as the 2017 Lawyers on the Fast Track. This recognition is only given to attorneys under the age of 40 who have demonstrated excellence in four categories: development of the law; advocacy and community contributions; service to the bar; and peer and public recognition.
For the full article, click here
April 13, 2017
Trump administration focuses on energy regulations
The opening days of the Trump administration have seen a flurry of activity focused on regulations affecting the oil and gas industry. President Donald Trump has issued a series of executive orders and presidential memoranda aimed at reducing regulations that impact the energy industry. Congress has also used its authority under the Congressional Review Act (CRA) to repeal several recently issued regulations. While the industry has largely applauded these moves, environmental groups have signaled they intend to challenge these actions aggressively in court.
Executive actions and presidential memoranda
On January 20, the new White House chief of staff issued a regulatory freeze memo instructing executive branch agencies to (1) withdraw rules that had been sent to the Federal Register but had not yet been published; (2) refrain from sending new rules to the Federal Register for publication until a senior official appointed by the administration had reviewed the contents of the rule; and (3) extend the effective date for those rules that had been published prior to Inauguration Day but had not yet taken effect.
On January 24, President Trump issued memoranda calling for the expedited review and approval of the Keystone XL Pipeline and Dakota Access Pipeline projects, which had been blocked or stalled during the previous administration. The president also directed the secretary of commerce to develop a plan within 180 days for using materials and equipment produced in the United States in all new, repaired or replaced pipelines.
On January 30, the president issued an executive order entitled “Reducing Regulations and Controlling Regulatory Costs” (informally known as “the Two-for-One Order”). The Two-forOne Order requires agencies to identify two regulations for repeal for every new regulation the agency proposes or promulgates. The Two-for-One Order also establishes cost caps for regulatory action. The net incremental cost cap for the remaining portion…
We Must Respect the Law, Whatever it May Be
The State Journal
The “law.” We all agree we need laws to be a civil society, but like other cornerstones of America’s political and social house — such as “liberty” and “freedom” and “equality” — the “law” is complex and can mean many different things.
For example, the law can mean the statutes found in the United States Code or the West Virginia Code that represents the formal laws passed by the Legislature and signed by the head of the executive branch of government. In West Virginia, the state Legislature — both the Senate and House — just concluded 60 days of crafting, debating, amending, rejecting and passing laws that will either by signed into law or vetoed by Gov. Jim Justice. Those that become a law will become part of West Virginia Code.
The law also means the regulations created by government agencies that are supposed to control the way something is done or the way people behave in order to ensure that the intent of the statute is followed. This law, which has the force and effect of a statute, is not considered or voted upon by elected legislators, which is why some believe that the proliferation of regulations from federal agencies must be checked.
The law also means the common law that forms the basis for many civil lawsuits. Whether a party is “negligent” or a product is “defective” is based upon the common law that has developed through court decisions over the years. The common law of West Virginia has been developed by the Supreme Court of Appeals of West Virginia since we became a state in 1863, and even then, West Virginia adopted the common law of Virginia, which had in turn adopted the common law of England.
The law can, in every context, be messy and unwieldy. One…
April 12, 2017
Air emissions data show safety of US Northeast shale work
Oil & Gas Journal
Air emissions data from actual monitoring and testing contradict articles based on different methods claiming to have found health hazards related to oil and gas work. Data collected by objective parties in the northeastern US over the past 6 years indicate that air quality around oil and gas operations is, in fact, safe. This observation contrasts starkly with arguments made in a variety of published studies cited by opponents of domestic shale development.
Click here to read the full article.
April 10, 2017
Change in Management: The impact of regime change in Washington on labor law
Pennsylvania Business Central
By R. Brock Pronko
Historically, one of the biggest policy differences between Republicans and Democrats has been over labor issues such as unions vs. “right-to-work”, minimum wage, the overtime rule, graduate students’ right to unionize, limiting litigation in EOEC cases, pay transparency, equal pay for women, employee health care benefits, retirement payouts and class action waivers.
As a businessman, sometimes Donald Trump has had an strained relationship with labor unions during the construction of his hotels and golf resorts, occasionally resulting in regulatory disputes and legal battles. A probusiness president and Republican-majority Congress are now in a position to “repeal and replace” pro-labor laws enacted by President Obama and Congressional Democrats.
The President appointed as acting chairman of the National Labor Relations Board Phillip Miscimarra, who has been characterized by Democrats as an “an anti-union lawyer.” The NLRB consists of three members from the President’s party and two members from the opposition. The board currently has two vacancies that will be filled by the President, giving pro-business members the majority.
In 2007, VP Mike Pence, then a U.S. representative from Indiana, voted against the Employee Non-Discrimination Act, which aimed to prevent job discrimination based on sexual orientation. He also voted against raising the minimum wage.
Republican governors have signed “right-to-work” laws. Last month, Missouri became the 28th state to pass a “right-to-work” law. “Right-to-work” laws prohibit labor unions from requiring workers to pay dues as a condition of employment, but by federal law unions are required to provide fair representation to all workers covered by a contract regardless if they pay dues.
If confirmed, Supreme Court justice nominee Neil Gorsuch will likely vote in favor of conservative Republican policies on labor cases that come before the court.
Pennsylvania Business Central reached out to experienced and attorneys College to look at how this sweeping regime change…
Construction Law 2016 – The Year in Review
On Thursday, March 9, 2017, the Construction Services group of the law firm of Babst Calland Clements & Zomnir, P.C. held its annual Year in Review Seminar. Attended by over 100 construction professionals, Babst Calland’s Year in Review Seminar summarized and addressed the implications of the most noteworthy construction-related legal developments of 2016, including the latest amendments to Pennsylvania’s Mechanics’ Lien Law, labor and employment issues, cases interpreting Pennsylvania’s payment acts, construction claim damages, and a recent decision involving a jurisdictional dispute on a public construction project.
MECHANICS’ LIEN LAW AMENDMENTS
On October 14, 2014 then-Governor Tom Corbett approved legislation amending Pennsylvania’s Mechanics’ Lien Law. Commonly referred to as Act 142, the amendments established a structured procedure for owners, contractors, and subcontractors to receive and give notice of mechanics’ lien claims, as well as a central electronic repository under which these notices must be filed (the “Directory”). Act 142 was widely supported by both owners (along with construction lenders) and contractors as a means to better identify all subcontractors and material suppliers with lien rights on a project.
Act 142 became effective on December 31, 2016, and the new notice requirements apply only to “searchable projects” beginning after that date and costing at least $1.5 million. Specifically, Act 142 allows the following four notices to be filed with the Directory: (1) Notice of Commencement; (2) Notice of Furnishing; (3) Notice of Completion; and (4) Notice of Nonpayment. Use of the Directory is discretionary, but an owner must file a Notice of Commencement before any labor, work, or materials are furnished for the project if the owner wishes to avail itself of the Directory’s protections. If an owner files a Notice of Commencement, a subcontractor (defined as including first and second tier subcontractors or material suppliers) must file a Notice of Furnishing…
April 7, 2017
PHMSA Issues Notice of Underground Natural Gas Storage Facility User Fees
Pipeline Safety Alert
On April 6, 2017, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a notice of agency action
(Notice) announcing the rate structure for the underground natural gas storage facility user fee. In section 12 of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act of 2016), Congress directed PHMSA to prescribe procedures to collect user fees for underground natural gas storage facilities. The fees will fund an $8 million Underground Natural Gas Storage Facility Safety Account.
In November 2016, PHMSA proposed
a rate structure for these user fees and agreed to accept comments on the proposal until January 6, 2017. As discussed below, PHMSA responded to the comments filed in response to the Notice and made certain revisions to its user fee calculations.
Working Gas Capacity
PHMSA confirmed that working gas capacity, as defined by the Energy Information Administration (EIA) and used in the EIA Monthly Underground Natural Gas Storage Report, will be used as the basis for the user fee rate structure. PHMSA acknowledged that the number of wells is an appropriate basis for the rate structure, but stated that the agency currently lacks the data needed to support such a calculation. After the agency collects information on the number of wells, the user fee structure will likely be changed in the future. PHMSA also stated that it will combine the working gas capacity for all fields operated by each holder of a PHMSA-issued operator identification number (OPID). The agency stated that it is in the process of contacting storage operators to determine the correct OPID for each storage facility. If PHMSA is unable to determine the OPID, it will sum the working gas capacities by company name.
Inclusion of Inactive Wells
PHMSA noted that since EIA’s Monthly Storage Report includes inactive wells,…
April 4, 2017
Trump Executive Order Withdraws Obama Administration Actions on Climate Change and Requires Review of Regulations Affecting Energy Sector
This is the second in a series of Administrative Watch alerts to assist in understanding the significant regulatory actions arising out of the Trump administration, and the effect of legal challenges to those actions by environmental groups.
On March 28, 2017, President Donald Trump signed an Executive Order entitled “Promoting Energy Independence and Economic Growth,” with the stated policy of “promot clean and safe development” of domestic energy resources and ensuring an affordable and reliable supply of electricity, while “avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation.” Although the Executive Order does not itself withdraw any rules issued by the U.S. Environmental Protection Agency (EPA) or other agencies, it clearly reflects President Trump’s intent to drastically change course from the Obama administration’s stance on climate change and to seek reducing environmental regulation of, among other sources of greenhouse gases, coal-fired power plants and oil and natural gas operations.
This Executive Order revokes existing Executive Order 13653, signed by President Barack Obama on November 1, 2013, which expressly recognized the existence of and potential impacts from climate change and directed interagency efforts to prepare for such impacts. The Executive Order signed by President Trump also revokes and rescinds several presidential memoranda and executive reports, including but not limited to:
- The President’s Climate Action Plan (June 2013), which, among other things, identified Obama administration priorities and laid the groundwork for measures to reduce carbon dioxide emissions from power plants, reduce methane emissions from oil and gas operations and other industries, and increase investment in renewable energy sources; and
- Presidential Memorandum on Power Sector Carbon Pollution Standards (June 2013), which directed EPA to develop and publish proposed rules to establish carbon dioxide emissions standards for existing, new, modified and reconstructed power plants.
March 24, 2017
State Must Push Harder to Capitalize on Natural Resource Development
The State Journal
West Virginia has a long history of watching most of its natural resources being harvested and sent to out-of-state users who add value to those resources. The same is happening with West Virginia’s natural gas, and we need to do something about it.
Whether it has been coal converted into electricity or timber fashioned into furniture, the value added to West Virginia’s natural resources has too often taken place outside of the state’s borders. Now, as noted in the 2017 Sustainable Energy in America Factbook, the United States has experienced a 79 percent increase in shale gas extraction since 2011, and a 12 percent jump in total gas production in the last five years. Much of this increase centers on the Marcellus and Utica shale plays, of which West Virginia is an important part.
Numerous groups rightly tout the potential for shale gas to provide a better future for both West Virginia and the region. As such, West Virginia must continue efforts to modernize its laws and regulations so natural gas can be economically and efficiently produced. Likewise, we must support the development and construction of intrastate and interstate pipelines that will only increase the demand for West Virginia’s natural gas and contribute to the country’s energy security.
But while production and transmission of natural gas are solid economic drivers for the state, each cubic foot of gas and each gallon of natural gas liquids that leaves West Virginia represents a lost opportunity to add value to that resource right here.
The only way to truly realize the full value of West Virginia’s natural gas is to adopt policies that attract and establish the activities that use — and add value to — that gas. For example, according to the Factbook, natural gas is now the largest source of power in…