Public Sector Alert
(by Max Junker and Alex Giorgetti)
As Pennsylvania local governments are no doubt well aware, on June 30, 2021, the General Assembly enacted Act 65 of 2021, which amended the Pennsylvania Sunshine Act, 65 Pa.C.S. §§701-716, (Sunshine Act) to require that agencies make their meeting agendas available to the public, and set restrictions on taking official action on any item not listed on the published agenda. The Sunshine Act requires that agencies provide citizens with notice of, and access to, all meeting agendas at which official action and deliberations by a quorum will occur at least 24 hours in advance. The agenda must be posted at the municipal building and on the municipality’s website. There is a process to amend the posted agenda at the meeting, but the Commonwealth Court ruled that the Sunshine Act only permitted such revisions in limited circumstances for emergencies or actions which did not require the expenditure of funds or a contract. On November 24, 2025, the Supreme Court overruled that decision and reinstated the process for amending an agenda for any reason.
Four Exceptions to the Prohibition on Official Action Not Included on Posted Agenda
The legislature included four exceptions to the requirement that items be listed on the agenda before a board can take public action. First, Section 712.1(b) permits the agency to take official action on matters not included in the agenda if they relate to a real or potential emergency involving a clear and present danger to life or property.
Second, Section 712.1(c) permits official action on a matter brought to the attention of the agency within the 24-hour period prior to the meeting, provided the matter is de minimis in nature and does not involve the expenditure of funds or entering into any contract or agreement.
Third, Section 712.1(d) permits business raised by a resident or taxpayer at the meeting to be considered for the purposes of referring it to staff, researching it for inclusion at a later meeting, or for full consideration where it is de minimis and does not involve the expenditure of funds or entering into any contract or agreement.
The fourth and final exception in Section 712.1(e) allows an agency to amend the agenda at the meeting in question. Subsection (e) states that upon a majority vote of the individuals present and voting during the meeting, the agency may add a matter of agency business to the agenda. The agency must announce the reasons for changing the agenda before voting to make those changes. If the vote passes, the agency may then take official action on that matter. If an agency amends its agenda in this manner, it must post the amended agenda on its website no later than the following business day and include the details of the matter added, the vote, and the reasons for the addition in its meeting minutes. Meeting minutes are required to be kept by Section 706 of the Sunshine Act.
The Commonwealth Court Limits the Exceptions
After these four exceptions went into effect with the 2021 amendment, the Commonwealth Court held that Subsection (e) could not be used on its own to amend the agenda at the meeting in question. It could only be utilized in relation to a matter falling under one of the other three exceptions.
However, on November 24, 2025, the Pennsylvania Supreme Court overruled the Commonwealth Court in Coleman v. Parkland School District and found that Section 712.1 of the Sunshine Act unambiguously creates four freestanding exceptions to the general prohibition that an agency cannot take official action on items not listed on the meeting agenda pursuant to the 24-hour notice rule. This includes the majority vote exception as provided by the fourth and final exception in Section 712.1(e). The Supreme Court rejected the Commonwealth Court’s interpretation of Section 712.1(e) and held that “the Commonwealth Court essentially redrafted Section 712.1 to align it with a textually unsustainable view of the ostensible spirit of the Sunshine Act and its 2021 amendment.”
Impact and Considerations
The Pennsylvania Supreme Court’s ruling reinstates the majority vote exception and permits agencies, if they wish, to vote to add matters to the official meeting agenda and then take action on those newly-added agenda items at that public meeting. The ruling also reaffirms the validity of all four exceptions. The reinstatement of this exception in particular will allow for greater efficiency in municipal operations and save money and time on additional advertisements and meetings. However, agencies will need to comply with the specific requirements of Section 712.1 if and when voting to add items to the meeting agenda. And because the Sunshine Act requires an agency to provide an opportunity for public comment before official action is taken, an agency voting to add items to the meeting agenda should allow for public comment as part of the process.
If you have questions about the Sunshine Act, please contact Robert Max Junker at (412) 773-8722 or rjunker@babstcalland.com or Alexander O. Giorgetti at (412) 773-8718 or agiorgetti@babstcalland.com.
Environmental Alert
(by Lisa Bruderly and Ethan Johnson)
On November 17, 2025, the U.S. Environmental Protection Agency (EPA) and Army Corps of Engineers (the Corps) proposed a revised definition of “waters of the United States” (WOTUS) under the Clean Water Act (Proposed Rule). The Trump administration announced that the Proposed Rule would “provide greater regulatory certainty and increase Clean Water Act program predictability and consistency.”
The new definition is expected to reduce the number of streams and wetlands that are regulated under the Clean Water Act and will impact several federal regulatory programs, including Section 404 permitting of impacts to regulated waters. The agencies drafted the Proposed Rule to closely mirror the U.S. Supreme Court’s 2023 decision in Sackett v. EPA, which held that the Clean Water Act extends to “relatively permanent” bodies of water connected to traditional navigable waters and wetlands with a “continuous surface connection” to those waters.
The Proposed Rule adds definitions for several terms, including “relatively permanent,” “tributary,” “continuous surface connection,” “prior converted cropland,” and “ditch.”
The public comment period will begin when the Proposed Rule is published in the Federal Register. If finalized, it will replace the Biden administration’s 2023 definition of WOTUS. The definition of WOTUS has changed several times in the last decade. Each new definition has been challenged in the courts.
Babst Calland will stay up to date on WOTUS developments and the Clean Water Act, in general. If you have any questions or would like any additional information, please contact Lisa Bruderly at (412) 394-6495 or lbruderly@babstcalland.com, or Ethan Johnson at (202) 853-3465 or ejohnson@babstcalland.com.
Environmental Alert
(by Kevin Garber and Alex Graf)
On November 12, 2025, Governor Josh Shapiro signed House Bill 416, a Fiscal Code Bill and a segment of the Pennsylvania budget package for Fiscal Year 2025-26. The Fiscal Code has several important implications for industry regulation, including the abrogation of the Regional Greenhouse Gas Initiative regulations, permitting relief through expedited review schedules for certain air and water general permits, and provisions to ensure grid reliability.
The Fiscal Code abrogates the RGGI provisions contained in 25 Pa. Code Chapter 145, Subchapter E, known as the CO2 budget trading program. The RGGI regulations were promulgated in 2022 but have not yet been implemented in Pennsylvania because of ongoing legal challenges. In November 2023, the Pennsylvania Commonwealth Court ruled that RGGI is an unconstitutional, unenforceable tax. Governor Shapiro and many other parties appealed that ruling to the Pennsylvania Supreme Court, where the case was fully briefed and argued last May. Although the Court’s course of action remains uncertain now that RGGI has been abrogated, the Court could dismiss the appeal as moot and decline to issue an opinion.
The Fiscal Code also expedites permitting for certain air and water-related general permits. The Pennsylvania Department of Environmental Protection now must respond within 20 days of submission to an application under the Air Pollution Control Act for coverage under a general plan approval or general permit. If the applicant addresses the technical deficiencies within 25 days, DEP must issue a final determination on the application within 30 days thereafter. However, if DEP misses this deadline, the application is deemed to have been approved. DEP may seek a one-time, 5-day extension to respond if the applicant agrees.
The Fiscal Code contains similar provisions for NPDES general permits.[1] DEP must respond to an application to renew an NPDES general permit issued under 25 Pa. Code § 92a.54 within 40 days of submission, and if the applicant addresses each identified technical deficiency within 50 days, DEP must issue a final determination on the renewal application within 60 days thereafter. If DEP misses this deadline, the application is deemed to have been approved.
To improve transparency in the permitting process among DEP and other state agencies, the new law requires all state agencies to compile and maintain, by February 10, 2026, publicly available lists of all types of permits issued by that agency. State agencies must notify applicants within five days of receiving a permit application and direct them to the new tracking system to follow the status of their applications. This system must include the processing time for each permit application, the date of receipt of each application, the estimated time remaining to complete the application process, and the contact information for the relevant agency reviewer.
Finally, the new law requires the Pennsylvania Public Utility Commission to investigate and validate load forecasts submitted by Pennsylvania utility companies to PJM Interconnection, coordinate with PJM and other states so that system planning reflects accurate information, and obtain access to confidential materials that are necessary to perform this oversight. PJM relies on load forecasts submitted by Pennsylvania utility companies to plan system needs and set capacity requirements that affect costs to consumers. The Fiscal Code states that PUC oversight of load forecasts is necessary to provide information on projections for significant growth in electricity demand driven by data centers, vehicle and building electrification, and other large load additions.
For more information on the implications of the 2025 Fiscal Code or other related matters, please contact Kevin Garber at (412) 394-5404 or kgarber@babstcalland.com, or Alexandra Graf at (412) 394-6438 or agraf@babstcalland.com.
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[1] This section of the Fiscal Code applies to NPDES general permits issued for specific categories of point sources, including discharges of stormwater associated with industrial activities, discharges from small-flow treatment facilities, discharges from petroleum product contaminated groundwater remediation systems, and wet weather overflow discharges from combined sewer systems.
Environmental Alert
(by Polly Hampton, Gina Buchman and Jordan Brown)
On October 24, 2025, the Albany County Supreme Court (Court) issued a decision and order in Citizen Action of New York et al v. New York State Department of Environmental Conservation, Index No. 903160-25, NYSCEF Document No. 93. The Court directed the New York State Department of Environmental Conservation (DEC) to issue regulations to meet the emissions reduction mandates pursuant to the State’s 2019 Climate Leadership and Community Protection Act (CLCPA). The CLCPA amended the Environmental Conservation Law (ECL) to include Article 75, which sets forth the statewide greenhouse gas (GHG) limits and directs DEC to promulgate regulations to ensure compliance. Pursuant to that authority, ECL § 75-0109 required DEC to adopt rules “to ensure compliance with the statewide emissions reduction limits” established in § 75-0107. The Court’s order gives DEC until February 6, 2026, to finalize those implementing regulations.
Background
In 2019, then New York Governor Andrew Cuomo signed into law the CLCPA, which mandates two statewide GHG emissions targets: a 40 percent reduction from 1990 levels by 2030, and an 85 percent reduction by 2050. The statute directs the DEC to adopt regulations to achieve those goals, however, implementation has been economically challenging.
In early 2023, DEC and the New York State Energy Research and Development Authority (NYSERDA) initiated the rulemaking process to establish a New York Cap and Invest (NYCI) Program, engaging in significant outreach to gather input from stakeholders. In December 2023, DEC and NYSERDA published a pre-proposal outline describing the structure and major components of the forthcoming rulemaking. The outline previewed three parts: the Mandatory GHG Reporting Rule, the Cap-and-Invest Rule, and the Auction Rule.
The Mandatory GHG Reporting Rule establishes standardized methods for collecting and verifying GHG emissions data from covered sources across the State, including utilities, fuel suppliers, and large industrial facilities. Accurate reporting is essential to determine the statewide emissions baseline and to assign compliance obligations under the program.
The Cap-and-Invest Rule proposes a program that would set an annual cap on the amount of greenhouse gas permitted to be emitted in the State. DEC will allocate a corresponding number of tradable allowances to match that limit. Obligated entities must then purchase allowances at auction and surrender allowances to DEC equal to their greenhouse gas emissions for each compliance period. Proceeds from the sale of allowances would be invested into state decarbonization initiatives and distributed to New Yorkers to potentially offset program costs passed to consumers. Proposed obligated entities would include stationary sources that meet the annual GHG emissions threshold of 25,000 metric tons of CO₂e and fuel suppliers that sell 100,000 gallons of liquid fuel or 15,000,000 standard cubic feet of gaseous fuel to end users in New York based on emissions data reported through the State’s Mandatory GHG Reporting Rule. Emissions below these thresholds may still trigger obligations at the fuel supplier level, and electricity sector requirements remain under consideration.
The Auction Rule would govern the sale and distribution of emission allowances within the cap-and-invest system. The Rule would describe the operation of NYCI Allowance auctions and mechanisms to protect the overall integrity of the Allowance market, prevent market manipulation, and provide cost containment and program stability.
In January 2025, Governor Kathy Hochul’s administration paused development of the NYCI Program, stating in her annual State of the State Address briefing book the delay would “create[e] more space and time for public transparency and a robust investment planning process.” It is this tension between the Legislature’s ambitious mandates and the Executive branch’s measured approach that lies at the heart of Citizen Action of New York.
In March 2025, DEC released the GHG Reporting Rule for public comment, noting the feedback received would inform development of the remaining rules. The public comment period for the GHG Reporting Rule closed on July 1, 2025. As of the publication of this Alert, the DEC has yet to publish its responses to the comments received nor has it opened a public comment period for the remaining two Rules under the NYCI Program.
Shortly after the GHG Reporting Rule was published, on March 31, 2025, a coalition of environmental organizations filed a petition alleging that DEC had missed the January 1, 2024, deadline under ECL § 75-0109(1). Citizen Action of New York centered on the interpretation of ECL § 75-0109(1) which requires the DEC to adopt regulations “no later than four years after the effective date of this article,” or by January 1, 2024, following at least two public hearings to ensure compliance with the statewide emission limits. The petition sought a court order requiring DEC to issue the full set of regulations by February 6, 2026.
Impact of the Court’s Decision
On October 24, 2025, the Court granted the petition and ordered DEC to complete the full regulatory package consistent with the CLCPA by February 6, 2026. The Court rejected DEC’s argument that additional time was warranted to refine or phase in the regulatory framework, emphasizing that such discretion was not contemplated under the statute. The Court wrote, “whether DEC is right or wrong, making this judgment is beyond the scope of its authority under the CLCPA.” And while the Court granted DEC a brief window to complete the rulemaking process, it made clear that this freedom had its limitations. The Court warned DEC that “[r]espondent is cautioned that having afforded it with the time to both further develop its regulations and address its concerns to the political branches, the Court is highly unlikely to grant extensions of this deadline.”
DEC is unlikely to meet the Court’s February 6, 2026, deadline. Under the State Administrative Procedure Act § 202, any proposed regulation must undergo a public comment period of at least 60 days, after which DEC must review and respond to the public submissions before finalizing the rules. To afford DEC additional time to finalize regulations, DEC may appeal the decision and petition for an automatic stay of the lower court’s order. The legislature could also amend the statute prior to the end of the year to grant DEC greater flexibility or additional time to develop and implement the required regulations. Whether that occurs will depend on coordination between the Governor and Legislature, raising broader questions about the balance of power between the executive and legislative branches in shaping New York’s climate policy.
Going forward, the resolution of DEC’s compliance with the Court’s order, whether through expedited rulemaking or legislative action, will have significant implications for the State’s ability to meet its statutory climate targets.
If finalized, mandatory greenhouse gas reporting and compliance requirements under a cap-and-invest program would have significant compliance costs for obligated entities. Interested parties, particularly those that would have been considered “obligated entities” under the December 2023 pre-proposal outline, will have an opportunity to review the final proposed rule and comment on that proposal. Potentially regulated parties may want to comment on such issues as the anticipated financial impact of the program on businesses and consumers, administration of the program, reporting obligations, or interaction of the program with other regulatory schemes (such as the Regional Greenhouse Gas Initiative and federal GHG reporting obligations).
Babst Calland continues to track climate change legislation and litigation, as well as federal and state regulatory developments. For more information on this and other climate change-related matters, please contact Polly Hampton at (412) 773-8715 or phampton@babstcalland.com, Gina F. Buchman at (202) 853-3483 or gbuchman@babstcalland.com, Jordan N. Brown at (202) 853-3459 or jbrown@babstcalland.com or any of our other environmental attorneys.
Firm Alert
(by Steve Silverman)
Employers often cling to misconceptions about non-compete agreements that can prevent them from effectively using these powerful tools or render such agreements unenforceable. Here are the seven most common reasons why this happens.
- Failing To Understand What Non-Competes Are
In the common vernacular, a non-compete is an umbrella term for contractually prohibiting an employee (or independent contractor, buyer of a business, or even a vendor) from working for a competitor or otherwise restricting that employee’s subsequent employment. However, a non-compete is one of several tools available to impose restrictions on an employee leaving their employer called “restrictive covenants.” A non-compete, which is just one type of restrictive covenant, limits a former employee or independent contractor from working for a competitor for a particular time period in a specific geographic area. A non-solicit agreement is another type of restrictive covenant, which allows an ex-employee to work for any employer they want without any geographic restriction but prohibits them from seeking business from their former employer’s customers for a period of time. Another variation of a non-solicit prohibits that ex-employee from hiring away or encouraging their former colleagues to leave their employment with their former employer. These are sometimes known as anti-piracy provisions. The distinctions between these various types of restrictive covenants are important. For instance, courts are generally more willing to enforce non-solicitation provisions than non-competes. Employers have to decide which, if not all, of these restrictive covenants work best for their business.
- Assuming That Non-Competes Are Unenforceable
A significant number of employers, as well as employees, incorrectly believe that restrictive covenants such as non-competes are categorically unenforceable. While this can be true for certain classes of employees (as discussed below), this misconception cannot be further from the truth. This mistaken belief is often fueled by employees who see their employer’s refusal or unwillingness to enforce them when their colleagues subject to these agreements depart without consequence. Additionally, restrictive covenants over the last two years received a lot of publicity with the Federal Trade Commission’s efforts during the last administration to effectively outlaw them, but that effort has been abandoned. As a result, unless a state has passed a law prohibiting or significantly restricting the use of non-compete agreements, courts in most states continue to enforce non-competes and other restrictive covenants every day – provided that they are properly drafted and effectively prosecuted.
- Not Understanding the Need for A Well-Drafted Non-Compete Agreement
A restrictive covenant agreement must be drafted to meet the unique needs of each employer. Such an agreement must be the product of a collaborative effort with an experienced attorney who understands the employer’s business. There is no downloadable form from the internet that meets every employer’s requirements. For instance, if the employer has employees working in multiple states, multiple versions of the agreements may be needed to address each state’s unique restrictive covenant laws. As explained below, different agreements may be needed for new employees versus existing employees whom the employer seeks to restrict. An employer’s agreements must also be periodically updated to address developments in the law.
- Not Supporting Restrictive Covenants With Adequate Consideration
An enforceable restrictive covenant agreement must be supported by “adequate consideration.” Consideration is an exchange of value between two parties necessary to make a contract binding. It is the “price” each party pays in exchange for the other party’s promise. What constitutes “adequate” consideration for non-competes can vary by state. For instance, nearly all states recognize that new employment is sufficient consideration to support such agreements. In other words, the employee’s “price” for getting a new job is agreeing to the restrictive covenants. However, states take different views as to whether continued employment is adequate consideration. For instance, Ohio deems that an already existing employee signing a non-compete has been given sufficient consideration because that employee gets to keep their job. But Pennsylvania says that for an existing employee to sign an enforceable non-compete, mere continuation of employment is not sufficient consideration. Instead, that Pennsylvania employee must be given some type of additional consideration – like a one-time bonus or additional benefits they would not otherwise be entitled to, or even a promotion. That is why Pennsylvania employers may have to use two versions of their non-compete agreements – one for new hires and another for existing employees. To navigate this issue, employers should always consult with counsel.
- Not Understanding What Protectible Interests Are
For a restrictive covenant agreement to be enforceable, an employer must have legitimate protectible interests. Essentially, this means that the law recognizes that certain employer property, both tangible and intangible, can be protected by restrictive covenants to prevent those interests from ending up in the hands of a competitor. This includes the company’s proprietary information, trade secrets and customer goodwill. However, the law says that only those employees who have access to those trade secrets or who are responsible for cultivating and maintaining that goodwill (such as sales people) can be subject to such agreements. That is why these agreements are not typically enforceable against receptionists, secretaries, mail clerks, or janitors. So, employers must be selective as to whom they require such agreements from and be able to justify how their protectible interests will be harmed by those employees failing to honor those agreements. This also requires employers to justify why their non-compete agreements need to extend for a particular length of time and geographic region without being overbroad, which courts dislike. Again, these are issues that employers must hash out with their counsel who draft these agreements.
- Failing to Incorporate Non-Competes into Employee On-Boarding and Off-Boarding
Employers must create a culture where their employees understand not only what their restrictive covenants are, but also that they must comply with them. Educating an employee about their post-employment obligations should start before that employee begins work. Employers should issue offer letters that clearly state that employment is contingent upon agreeing to the restrictive covenants. A copy of the non-compete agreement should be provided for the employee to sign prior to their first day of employment so that the employee cannot later argue that they did not know the type of post-employment restrictions they were agreeing to when they accepted their position. Simply put, no employee should start work before signing their agreement. Similarly, employees must be reminded of their post-employment obligations during their exit interviews upon giving notice and should be given a hard copy of the agreement at that time. Employers should also ask their departing employees point blank (a) who their new employer is; (b) what their duties will be; and (c) whether they have given their new employer a copy of the agreement. An employee refusing an exit interview or refusing to answer any of these questions should set off an alarm resulting in a consultation with counsel. If no exit interview is held, employers should still make clear in writing that they expect the employee to honor their agreement and also make sure to provide that employee with a copy, whether by mail, hand delivery, or email to a personal email address.
- Failing to Enforce A Non-Compete Through Litigation
While filing suit to enforce a non-compete can be both expensive and time consuming, failing to do so can be even worse in the long run. Those employers who do not enforce restrictive covenant agreements lose credibility among their employees and any deterrent effect that strong, enforceable agreements typically create. An employer who avoids the missteps above and places themselves in the best possible position to enforce these agreements protects their most valuable business interests. Likewise, an employer willing to enforce these agreements sends an unmistakable message to remaining employees that the employer expects them to honor their restrictive covenants and that they will pay a high price for not doing so. This often requires employers to make it abundantly clear that they are willing to do what is necessary to enforce their agreements. That message is often enough to dissuade the next departing employee from violating their post-employment obligations.
Dispelling these misconceptions is the first step in adopting and enforcing effective restrictive covenants to protect an employer’s most valuable assets.
For more than 30 years, Steve Silverman has built a career around this area of law—successfully enforcing non-compete agreements on behalf of his clients against former employees, while also defeating enforcement efforts on behalf of departing employees and their new employers.
If you have questions about the use of non-competes under existing state law or how to properly enforce them, please contact Steve at 412-253-8818 or ssilverman@babstcalland.com.
Firm Alert
(By Alex Farone and Janet Meub)
The U.S. Department of Transportation (DOT) issued an Interim Final Rule (IFR) effective October 3, 2025, instituting an immediate and significant change for the qualification of women- and minority-owned businesses in the DOT’s Disadvantaged Business Enterprise (DBE) and Airport Concessions Disadvantaged Business Enterprise (ACDBE) Program. For purposes of the DBE/ACDBE program, women- and minority-owned businesses were historically presumed to be disadvantaged, automatically meeting one of the requirements for DBE status; this is no longer the case.
What is the DBE/ACDBE program? The purpose of this longstanding program is to level the playing field for small businesses in the highway construction, transit, and airport industries, owned by socially and economically disadvantaged individuals, seeking to participate in federally funded contracts. Congress enacted the first statutory DBE provision in 1983, setting a goal that at least 10% of project funds be issued to DBEs on highway and transit projects. In 1987, Congress expanded the program for airport projects and concessionaries. This legislatively-mandated program was intended to ensure nondiscrimination and remove barriers in the award of DOT-assisted contracts, and thus the DOT was entrusted with oversight of the program.
Specifically, the program requires state and local transportation agencies that receive DOT grants to develop their own aspirational DBE contracting goals based on the availability of DBEs in their local markets, to meet the program targets. Notably, grantees are generally prohibited from using quotas or set-aside contracts for DBEs. (49 CFR § 26.43). They have been required to use race- and gender-neutral means to meet their goals to the extent possible, without using criteria favoring DBEs over non-DBEs (49 CFR §§ 26.5, 26.51). Examples of such neutral means are unbundling of large contracts, informational programs on contracting opportunities, and offering business support services. Eligibility for DOT financial assistance depends on DOT approval of grantee DBE programs; however, as long as the program is administered in good faith, grantees cannot be penalized for noncompliance or failure to meet their set DBE contracting goals. (49 CFR §§ 26.21(c), 26.47).
To qualify as a DBE, an entity must be a for-profit small business that is at least 51% owned and controlled by socially and economically disadvantaged individuals who do not exceed certain net worth caps. To qualify as socially and economically disadvantaged, the owners must either demonstrate disadvantage by meeting specific conditions or be presumed disadvantaged. Since 1987, the DOT has presumed social and economic disadvantage for women- and minority-owned business owners. As of October 3, 2025, however, this presumption ceased; henceforth, these business owners must “prove it.”
What happens now? To remain in the program, all DBE/ACDBE certified businesses owners must be reevaluated for disadvantaged status. The IFR changes the definition of a “socially and economically disadvantaged individual,” to one “who a certifier finds to be socially and economically disadvantaged on a case-by-case basis. [This] determination … must not be based in whole or in part on race or sex.”
Business owners must submit both a Personal Narrative (PN) and a Personal Net Worth Statement to demonstrate eligibility. The PN should demonstrate the existence of a disadvantage based on individual proof of specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business. The PN must state how and to what extent these impediments caused the owner economic harm, including a description of the type and magnitude, and must establish the owner is economically disadvantaged relative to similarly situated individuals. The business owner must also attach and submit a Personal Net Worth Statement, and any other financial information they consider relevant.
Those submitting commercial and financial business information normally considered proprietary or confidential are cautioned to designate those submissions as “PROPIN.” If one fails to mark the confidential business information as “PROPIN,” under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, the information is placed in the public docket for rulemaking purposes. To avoid public dissemination of confidential businesses information, entities should make sure that employees tasked with the submission of this documentation understand the need for designation.
The existing regulations require states to establish Unified Certification Programs (UCP) to handle state-wide DBE-firm certification, including making certification decisions on behalf of all DOT grant recipients in the state and maintaining a state directory of certified DBE firms. Now, each UCP is required to identify currently certified DBEs, provide them with the opportunity and instructions to submit documentation demonstrating eligibility under the new standards, and then issue a written decision indicating whether each business has been recertified or is decertified “as quickly as practicable.” The IFR does not require the UCP’s written decision to explain the specific basis for recertification or decertification. Individual UCPs are expected to create their own timelines for firm submissions of new PNs and Personal Net Worth Statements, but the DOT has expressly reserved the right to review a UCP’s reevaluation process.
Until the UCP reevaluations are complete, goal setting and other DBE/ACDBE program elements are suspended. The current federal government shutdown of indeterminate duration will likely further slow the reevaluation process.
What prompted this IFR? On February 24, 2025, President Trump issued Executive Order 14219, Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative, which ordered agencies to identify “unconstitutional regulations and regulations that raise serious constitutional difficulties” and to target them for repeal. On April 9, 2025, the President issued a presidential memorandum to the heads of all federal agencies, directing that this effort should prioritize regulations that conflict with certain U.S. Supreme Court decisions, including Students for Fair Admissions v. Harvard, 600 U.S. 181 (2023), a landmark 2023 ruling that consideration of race in college admissions violates the Equal Protection Clause of the Fourteenth Amendment, essentially ending affirmative action.
In a pending case in the Eastern District of Kentucky, non-DBE entities who had lost bids on DOT-funded projects filed suit against the DOT, claiming that they cannot compete for DOT contracts on an equal footing with entities owned by women or racial minorities because of their presumptive qualification as DBEs. In September of 2024, the court granted a preliminary injunction, determining that the disadvantage presumption of the DBE program likely violates the Equal Protection Clause. Mid-America Milling Co. v. U.S. Dep’t of Transp., No. 3:23-cv-00072, 2024 WL 4267183 (Sept. 23, 2024). The preliminary injunction prohibits the DOT from mandating use of the presumptions with respect to the contracts on which the plaintiff entities had bid.
Shortly following the President’s February Executive Order and April memorandum, both the DOT and Department of Justice (DOJ) evaluated the DBE/ACDBE program as directed by the administration.
In May of 2025, the parties asked the court to enter a consent order resolving the constitutional challenge to the DBE program, where the DOT (represented by the DOJ in court) stipulated and agreed that the DBE program’s presumptions violate the Equal Protection Clause. The proposed consent order asks the court to declare the use of DBE contract goals to be unconstitutional nationwide and to hold that DOT cannot approve any DOT-funded projects with DBE contract goals where any DBE in the jurisdiction was determined eligible based on race- or sex-based presumptions. Notably, the consent order remains pending.
On June 25, 2025, Solicitor General D. John Sauer of the DOJ advised Speaker of the House Mike Johnson that DOJ concluded the DBE program’s race- and sex-based presumptions are unconstitutional, and that DOJ would no longer defend those presumptions in court—consistent with the proposed consent order in the pending Mid-America Milling case. Soon thereafter, on October 3, 2025, DOT issued the present IFR.
How can the DOT issue an immediately-effective rule like this IFR? The Administrative Procedures Act (APA), 5 U.S.C. §§ 551-559, mandates that federal administrative agencies follow certain procedural steps before enacting a rule. Typically, an agency must publish notice of the proposed rule in the Federal Register, citing its authority to make the rule and including the proposed terms. Then, the public must be given the opportunity to comment on the proposed rule. After considering comments and making any revisions to the rule based thereon, the agency must provide a general statement of the basis and purpose of the rule and generally must publish the final rule no less than 30 days prior to the effective date. However, an agency may skip the aforementioned procedure and issue a rule without the notice, comment, and minimum 30-day effectiveness delay if it finds good cause that the process is “impracticable, unnecessary or contrary to public interest.” 5 U.S.C. § 553(b)(B). Here, the DOT determined that the presumption of disadvantage under the DBE/ACDBE program is unconstitutional, so enforcing those presumptions would be contrary to public interest and providing an advance notice-and-comment period would be impracticable and unnecessary. While this IFR is effective immediately, the public can currently comment on the IFR for a 30-day period, and the DOT may amend the rule pursuant to submitted comments.
We will follow further developments concerning this IFR and DBE program requirements and provide updates. For more information about how these requirements affect your business, drafting a PN for certification reevaluation, and how Babst Calland can assist you, please contact Alexandra G. Farone (412) 394-6521 or afarone@babstcalland.com or Janet K. Meub at (412) 394-6506 or jmeub@babstcalland.com.
Environmental Alert
(by Ben Clapp, Gary Steinbauer and Mackenzie Moyer)
On October 2, 2025, the Environmental Protection Agency (EPA) published a Proposed Rule and a companion Direct Final Rule to extend certain compliance deadlines for effluent limitations guidelines (ELGs) for the Steam-Electric Power Generating point source category in the Federal Register. 90 Fed. Reg. 47617; 90 Fed. Reg. 47693. EPA is “taking action to provide near-term compliance flexibility to coal-fired power plants by extending seven deadlines in the 2024 ELG rule and additional flexibilities for power generators to enhance the service life of critical energy infrastructure.” EPA states that the proposal seeks to advance the goals of the Trump administration’s Unleashing American Energy Executive Orders and provide reliable energy as demand increases due to the rise of AI and data centers.
Under the Clean Water Act (CWA), EPA is authorized to establish nationally applicable, technology-based ELGs for discharges from different categories of point sources. ELGs are based on technological feasibility, not water quality, and are based on the performance of specific treatment technologies, but do not require use of those specific control technologies.
In November 2015, EPA promulgated revisions to the steam-electric power generating point source category for the first time since 1982. The 2015 Rule set the first federal limitations on certain pollutants, such as toxic metals, discharged from a steam-electric power plant’s largest wastewater streams. As a result of legal challenges, EPA was required to reconsider certain limitations in the 2015 Rule. EPA reconsidered the ELGs for flue gas desulfurization (FGD) wastewater and bottom ash (BA) transport water and published a reconsideration rule in 2020 (the 2020 Rule). Environmental groups challenged the 2020 Rule, and that challenge has been held in abeyance since 2022. In 2024, EPA finalized the Steam Electric Supplemental Rule (the 2024 Rule), which established, among other things, zero-discharge limitations for three wastewater streams: (1) FGD wastewater; (2) BA transport water; and (3) managed combustion residual leachate (CRL). The 2024 Rule was also challenged, and the litigation is currently being held in abeyance while EPA reviews and reconsiders the Rule. See Southwestern Electric Power Co. v. EPA, No. 24-2123.
The current rulemaking package is intended to provide more flexibility for subject power plants by extending seven compliance deadlines in the 2024 Rule. First, EPA proposes providing six more years, until December 31, 2031, for existing power plants to submit a Notice of Planned Participation (NOPP) for electric generating units permanently ceasing coal combustion by December 31, 2034, a compliance option that power plants can select to avoid the zero-discharge limitations established for certain waste streams in the 2024 Rule. This deadline is also the subject of the Direct Final Rule, which becomes effective on December 1, 2025, 60 days after publication in the Federal Register, without further notice, unless EPA receives adverse comments during the comment period. If EPA receives adverse comments to the extension of the NOPP deadline for the 2034 subcategory, EPA will withdraw the Direct Final Rule. Second, EPA proposes to extend the compliance deadlines for the zero-discharge limitations for FGD wastewater, BA transport water, and CRL by five years to December 31, 2034. Third, EPA’s proposal makes changes to compliance deadlines related to certain zero-discharge limitations for indirect dischargers—dischargers that send wastewater to wastewater treatment plants instead of directly to a water of the United States. EPA’s proposal aligns the deadlines applicable to indirect dischargers with those of direct dischargers. The latter two proposed extensions were not included in the Direct Final Rule.
EPA is also proposing to expand the transfer flexibilities found in 40 C.F.R. § 423.13(o) by including new options for facilities wishing to transfer between requirements for zero-discharge and requirements applicable to facilities ceasing coal combustion by 2034. Lastly, EPA is proposing to provide permitting authorities with the authority to allow site-specific extensions for paperwork submission deadlines in both the 2020 and 2024 Rules when it is necessary to address unexpected circumstances, including those related to changes to regional capacity market prices or local electricity demands materially exceeding projections made in the most recent iterations of integrated resource plans or other planning documents.
While EPA is not proposing to change the technological bases for the ELGs at this time, EPA is soliciting feedback on whether it should consider a future rulemaking related to the technology-based limits themselves and is requesting information on the availability, economic achievability, resource adequacy, and reliability impacts of the current zero-discharge technologies.
The comment periods on Proposed Rule and Direct Final Rule close on November 3, 2025. Additionally, EPA is hosting a webinar on the rule package on October 14, 2025.
Babst Calland attorneys continue to track these developments and are available to assist with CWA-related matters. For more information on this development and other water issues, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Gary E. Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Mackenzie Moyer at (412) 394-6578 or mmoyer@babstcalland.com, or any of our other environmental attorneys.
Litigation Alert
(by Joseph Schaeffer and Ryan McCann)
On September 25, 2025, the Pennsylvania Supreme Court clarified the standard governing motions to transfer venue under the doctrine of forum non conveniens and Rule 1006(d)(1) of the Pennsylvania Rules of Civil Procedure. The rule, together with its complementary doctrine, permits a party to seek transfer of venue—even when venue is otherwise proper—to another county “for the convenience of parties and witnesses.” Pa. R.C.P. 1006(d)(1).
In Tranter, et al. v. Z&D Tour, et al., Nos. 18 EAP 2024 to 32 EAP 2024 (Pa. 2025), a motorcoach bus carrying approximately five dozen passengers was involved in a deadly multi-vehicle collision in Westmoreland County, in western Pennsylvania. Plaintiffs, passengers on the coach bus, filed suit in Philadelphia County, in eastern Pennsylvania, for damages sustained from the accident. After conducting limited discovery on the issues of venue and forum non conveniens, defendants filed a motion to transfer venue to Westmoreland County, citing the overwhelming number of witnesses and evidence located in that area. The trial court balanced the plaintiffs’ interest in their chosen forum against the hardships asserted by defense witnesses. Considering the totality of the circumstances, and affidavits detailing the burdens of traveling across the state to testify, the trial court granted defendants’ motions to transfer venue.
The Superior Court reversed. Drawing on its own precedent, the Superior Court held that the trial court erred in granting the motions because the defendants had not shown that the proposed testimony would be “critical” to their defense. While the defendants established that the witnesses could offer relevant testimony, the defendants neither demonstrated—nor did the trial court explain—why that testimony was essential. Accordingly, the Superior Court concluded that the defendants had not met their burden to overcome the plaintiffs’ choice of forum, as there was no indication the witnesses were truly “key” to the defense.
The Pennsylvania Supreme Court granted allocatur to determine whether the Superior Court had misapplied the doctrine of forum non conveniens. On appeal, defendants argued that the Superior Court erred by elevating its own precedent over controlling Supreme Court authority, that its “key witness” requirement imposed an unreasonable and impractical burden, and that trial courts retain broad discretion in deciding transfer motions. Plaintiffs countered that significant deference is owed to a plaintiff’s choice of forum, that modern technology reduces the weight of witness-convenience arguments, and that defendants’ affidavits were deficient on multiple fronts.
The Supreme Court reversed, finding that its decisions in Cheeseman and Bratic controlled these issues.[1] Addressing first the plaintiffs’ argument that their choice of venue is entitled to deference, the Supreme Court emphasized that such preference is “not unassailable.”[2] Instead, a defendant may overcome it by showing “with detailed information on the record, that the plaintiff’s chosen forum is oppressive or vexatious to the defendant.”[3] In practical terms, transfer is warranted where the plaintiff’s chosen forum is intended to burden or harass the defendant, or where the defendant demonstrates that another county would provide substantially easier access to witnesses or other sources of evidence.
Once the record is developed, the decision whether to grant a transfer lies within the trial court’s discretion. In Bratic, the Supreme Court underscored the “considerable discretion” afforded to trial courts in ruling on such motions. The Supreme Court reiterated that so long as a trial court does not rely on impermissible considerations—such as its own docket congestion or isolated factors like a witness’s residence or travel distance—its decision should not be disturbed on appeal.
The Supreme Court also explained that distance alone is not determinative: a venue is not automatically oppressive simply because witnesses must travel more than one hundred miles, nor is a shorter distance irrelevant. Nonetheless, as a general rule, the Supreme Court reaffirmed that one hundred miles serves as a reasonable guidepost in evaluating whether a chosen forum is oppressive.[4]
The Supreme Court next rejected the plaintiffs’ argument—and the Superior Court’s conclusion—that the affidavits were insufficient, noting that Bratic reached the opposite result. It reiterated that a defendant petitioning for transfer of venue must place the grounds on the record, “but no ‘particular form of proof’ is required.”[5] In fact, “there is no ‘affidavit requirement’ at all.”[6] Thus, the Superior Court’s criticism of the defendants’ affidavits was an error because the defendants had established on the record the potential hardship, and that hardship need not be outlined in an affidavit.
Addressing the Superior Court’s use of a “key witness” requirement, the Supreme Court characterized it as a stark departure from Cheeseman and Bratic. The Supreme Court emphasized that those precedents control and clarified that, although a petitioner must identify burdened witnesses and provide a general description of their anticipated testimony, exacting detail is not required. Nor must petitioners characterize such testimony as “necessary,” “critical,” or uniquely beneficial to their defense.[7]
Finally, the Supreme Court considered plaintiffs’ argument that distance poses no real burden in light of modern technology allowing remote testimony. The Supreme Court rejected this position, explaining that while virtual testimony may be useful when in-person proceedings are not feasible, it is not an adequate substitute in the ordinary course. To adopt such a rule, the Supreme Court cautioned, would effectively render the doctrine of forum non conveniens meaningless.
The Supreme Court’s ruling in Tranter is significant because it clarifies the standard for intrastate venue transfers. The Court confirmed that while a plaintiff’s forum choice carries weight, it may be overcome where the record shows that litigating elsewhere would ease witness or evidentiary burdens, without requiring defendants to prove that such witnesses are “key” or “critical.”
If you have questions about the Tranter decision, or its implications for your business, please contact Joseph V. Schaeffer at 412-394-5499 or jschaeffer@babstcalland.com or Ryan M. McCann at 412-773-8710 or rmccann@babstcalland.com.
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[1] See generally Bratic v. Rubendall, 626 Pa. 550 (Pa. 2014); Cheeseman v. Lethal Exterminator, Inc., 549 Pa. 200 (Pa. 1997)
[2] Tranter, slip op. at 23.
[3] Id. at 27 citing Cheeseman, 701 A.2d at 162
[4] Tranter, slip op at 32.
[5] Id. citing Bratic, 99 A.3d at 9.
[6] Id.
[7] Tranter, slip op at 37.
Environmental Alert
(by Sloane Wildman and Alex Graf)
On September 17, 2025, EPA announced that it will retain the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) hazardous substance designation for PFOA and PFOS, two PFAS compounds. The final rule designating PFOA and PFOS (and their salts and structural isomers) as hazardous substances under CERCLA became effective on July 8, 2024. Substances designated as hazardous under CERCLA are subject to release reporting requirements, specific spill rules, release tracking requirements, and additional reporting mandates under other environmental statutes. Further, EPA may require potentially responsible parties – PRPs – to clean up or pay for the cleanup of hazardous substances. In conjunction with EPA’s announcement, the U.S. Department of Justice submitted a filing in Chamber of Commerce of the United States of America v. EPA, No. 24-1193 (D.C. Cir.) (ongoing litigation, currently in abeyance, challenging the CERCLA designation of PFOA and PFOS), asking the court to lift the abeyance and propose an amended briefing schedule.
Prior to its 2024 PFOA and PFOS designation, EPA’s CERCLA hazardous substance list was comprised solely of substances designated under other environmental statutes (e.g., Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, and the Toxic Substances Control Act). EPA’s 2024 designation of PFOA and PFOS represented the first time the Agency used its authority under CERCLA Section 102(a) to list specific hazardous substances that were not designated under another environmental statute. In this week’s announcement, EPA stated its intention to initiate a rulemaking to “establish a uniform framework governing designation of hazardous substances under section 102(a) of CERCLA moving forward.” Such a “Framework Rule” would establish a uniform approach to guide future CERCLA hazardous substance designation, including EPA’s method for considering the costs of proposed designation.
EPA further stated that it will prioritize holding polluters accountable while still providing certainty for passive receivers (such as water utilities) that did not manufacture or generate PFOA or PFOS, and that it believes new statutory language will be necessary to fully address concerns regarding passive receiver liability. This statement is aligned with EPA’s PFAS strategy, issued on April 28, 2025, which expressly acknowledged the Agency’s intention to protect passive receivers of PFAS. EPA noted at the time that it intended to work with Congress and industry to establish a liability framework that operates on a “polluter pays” principle to provide greater certainty to passive receivers.
Babst Calland’s Environmental Practice Group is closely tracking EPA’s PFAS actions, and our attorneys are available to provide strategic advice on how developing PFAS regulations may affect your business. For more information or answers to questions, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com or Alexandra Graf at (412) 394-6438 or agraf@babstcalland.com.
Environmental Alert
(by Joseph Schaeffer, Gina Buchman and Ryan McCann)
On September 5, 2025, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reinstated an affirmative defense under the Clean Air Act (CAA) for exceedances occurring as a result of an emergency, ruling that the Environmental Protection Agency’s (EPA) rescission of that defense was arbitrary and capricious. EPA had first established that affirmative defense for state-issued Title V permits in 1992, 57 Fed. Reg. 32250, 32306, and then expanded it to federally-issued Title V permits in 1996, 61 Fed. Reg. 34202, 34239. In doing so, it created a limited shield to liability for exceedances of emissions limitations if the operator could prove that the exceedance was due to “any situation arising from sudden and reasonably unforeseeable events beyond the control of the source, including acts of God ….” 40 C.F.R. § 70.6(g)(2). By 2016, however, EPA had concluded that the affirmative defense unlawfully encroached on the judiciary’s role to impose appropriate civil penalties for CAA violations or, alternatively, rendered applicable emissions limitations “non-continuous” in violation of 42 U.S.C. § 7602(k). EPA then rescinded the regulation affording the affirmative defense in 2023. 88 Fed. Reg. 47029, 47030–31
SSM Litigation Group (SSM), a coalition of interest groups representing Title V permit holders, petitioned the D.C. Circuit for review. After first disposing of EPA’s challenge to SSM’s standing, the Court turned to whether EPA’s elimination of the affirmative defense was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
EPA’s merits-based argument was two-pronged. The CAA allows any person to commence a civil action against another person or entity who is alleged to have violated an emission standard or limitation. 42 U.S.C. § 7604. Once such a suit has been brought, district courts have the authority to determine an appropriate civil penalty. Id. EPA maintained that the affirmative defense limits a district court’s authority to impose such civil penalties by allowing operators to escape liability. The Court, relying upon its own recent precedent, disagreed. Citing Florida Electric Power Coordinating Group, Inc. v. EPA, 94 F.4th 77 (D.C. Cir. 2024), the Court reiterated the distinction between a complete defense and a defense limited solely to remedies. Affirmative defenses that apply only to remedies exceed EPA’s authority, as they impermissibly constrain the discretion of district courts to impose civil penalties once enforcement proceedings have commenced. Conversely, establishing complete defenses does not run afoul of EPA’s authority because complete defenses relate to liability and not penalties. In other words, the district court’s authority to impose civil penalties is not hindered where the affirmative defense precludes any finding of liability.
EPA also maintained, though, that the affirmative defense violated the CAA’s continuity principle by authorizing deviations from applicable emissions limitations. See 42 U.S.C. § 7602(k). The Court found this logic to be flawed because affirmative defenses do not halt the applicable standards. Instead, the Title V defense simply prevents operators from incurring liability for non-compliance during emergencies. The underlying emissions standard continues to apply, and is therefore “continuous,” but the operator is not liable despite their failure to abide with the ongoing standards. To further clarify the breadth of this ruling, the Court stated that “a complete affirmative defense to liability does not render an emission limitation non-continuous.”
In sum, EPA’s rescission of the Title V defense was based on a legal interpretation of the CAA that the D.C. Circuit has since rejected, rendering the agency’s action arbitrary and capricious. As a result, the Title V affirmative defense for emergencies remains a liability shield for operators.
Babst Calland is closely tracking these regulatory developments, and our attorneys are available to provide strategic advice on how these actions may affect your business. For more information or answers to questions, please contact Joseph Schaeffer at (412) 394-5499 or jschaeffer@babstcalland.com, Gina Buchman at (202) 853-3483 or gbuchman@babstcalland.com, Ryan McCann at (412) 773-8710 or rmccann@babstcalland.com, or your Babst Calland relationship attorney.
Environmental Alert
(by Kip Power and Mackenzie Moyer)
On August 21, 2025, the West Virginia Department of Environmental Protection (WVDEP) published its proposed Clean Water Act (CWA) Section 401 Water Quality Certification package with respect to two separate expedited permitting mechanisms recently proposed by the U.S. Army Corps of Engineers (Corps). The proposed 401 Certification would approve the use of the Corps’ proposed Regional General Permit (RGP) and Letter of Permission (LOP) for energy projects in West Virginia, each of which was published by the Corps on June 4, 2025. The Corps proposed the RGP and LOP to expedite permitting of energy related projects under Section 404 of the CWA and (as to the RGP) Section 10 of the Rivers and Harbors Act of 1899 (RHA), as a means of implementing several Executive Orders issued by President Trump aimed at expediting regulatory approval of such projects. In finalizing its decision on the proposed Certifications, the WVDEP will consider the impact of activities that would be authorized using these mechanisms on water resources, fish and wildlife, recreation, critical habitats, wetlands, and other natural resources. WVDEP is accepting public comment on its proposed Certification package until September 23, 2025.
Section 401 Water Quality Certifications are required for permits or licenses issued by federal agencies to ensure that such projects do not violate a state’s water quality standards or adversely affect designated uses of specific streams. Under applicable federal regulations and the terms of the Corps’ proposals, the WVDEP is required to act upon the Corps’ request for CWA Section 401 Certification of both the RGP and LOP within 60 days after they were received by the WVDEP, and a failure to meet that deadline would be deemed to be a waiver of the WVDEP’s certification authority. The public comment deadline of September 23, 2025 regarding the WVDEP’s proposed Certifications is presumably geared towards allowing WVDEP to meet the 60-day response deadline established by the Corps.
The Corps’ proposed RGP, if finalized, would be available for energy or energy resource-related activities that would permanently impact one acre or less of federal jurisdictional waters and are considered to have no more than minimal individual and cumulative adverse environmental impacts. The RGP defines “energy or energy resources” as “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606(a)(3).” Further, “critical mineral” does not include “fuel minerals; water, ice, or snow; or common varieties of sand, gravel, stone, pumice, cinders, and clay.” Any applicant seeking coverage under the RGP would have to file a Pre-Construction Notification (PCN) with the Corps (containing detailed information pertaining to the project) as part of its application.
The proposed LOP would be available for energy or energy resource-related projects in West Virginia that impact no more than two acres of federal jurisdictional waters, are likely to have “minimal” effects on the human environment and are viewed as involving “minor” work. 30 C.F.R. 325.2(e)(1). Any application for coverage under the LOP must include detailed information regarding the proposed project, be coordinated with federal and state fish and wildlife authorities, and be subject to a public interest evaluation. However, issuance of a LOP would not require submission of a PCN to the Corps or publication of individual public notice of the application.
WVDEP’s proposed Certification package includes its own proposed “Standard Conditions” and “Special Conditions” to the Corps’ RGP and LOP (which are substantively identical). If finalized, West Virginia’s 401 Certifications for the RGP and LOP (including all such conditions) will be incorporated by reference into each of these permitting mechanisms. For example, Standard Condition 14 would require that any applicant proposing to conduct horizontal directional drilling beneath a Section 10 (i.e. RHA) water must prepare and submit an Inadvertent Return Contingency Plan, a Groundwater Protection Plan, and an Operations Contingency Plan to WVDEP for review and approval. If finalized as proposed, the Special Conditions would require, among other things, prior written notification to WVDEP for any proposed work in streams identified in Standard Condition 10 and in RHA Section 10 rivers within West Virginia. Notification must be provided at least 60 days prior to construction, describing the project purpose, location, and impacts. WVDEP reserves the right to require individual Section 401 Water Quality Certifications for any activities resulting in greater than 200 linear feet of cumulative impact to any stream listed in Standard Condition 10 or to any Section 10 river. See Special Condition 2.
Babst Calland attorneys continue to track these developments and are available to assist with CWA-related matters, such as project-related permitting, in West Virginia and other states. For more information on this development and other water issues, please contact Christopher B. (Kip) Power at (681) 265-1362 or cpower@babstcalland.com, Mackenzie Moyer at (412) 394-6578 or mmoyer@babstcalland.com, or any of our other environmental attorneys.
Environmental Alert
(Christopher (Kip) Power and Robert Stonestreet)
Recognizing the “diversity in terrain, climate, biologic, chemical and other physical conditions” among the States in which coal is mined, the federal Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. 1201, et seq. (“SMCRA”) specifies that governmental responsibility for regulating the coal industry “should rest with the States.” SMCRA § 101(f). To accomplish that, SMCRA provides for delegation of primary regulatory authority (or “primacy”) to a State if its regulatory program meets national standards. 30 U.S.C. § 1253. Residual oversight authority is vested in the Department of the Interior’s Office of Surface Mining Reclamation and Enforcement (“OSM”), which was created to ensure that primacy states adequately maintain and enforce their approved State programs and to inspect and possibly intervene where problems are reported at specific mine sites that the State regulatory authority (“SRA”) has failed to address.
The rules governing the exercise of OSM’s oversight authority with respect to primacy States under SMCRA may soon change. On June 16, 2025, OSM published a proposal to revise those regulations, essentially seeking to restore them to the form that existed prior to promulgation by the Biden administration of its own changes to those rules, entitled “Ten-Day Notices and Corrective Action for State Regulatory Program Issues” (89 Fed. Reg. 24714, April 9, 2024) (the “2024 TDN Rule”). The comment period on the proposed changes to unwind the 2024 TDN Rule closed on July 16, 2025. 90 Fed. Reg. 25174 (June 16, 2025).
Under SMCRA, if OSM has reason to believe that there may be a violation of the approved State program at a particular mine site that has not been adequately addressed by the SRA, OSM is authorized to issue a ten-day notice (or “TDN”) to a SRA. The TDN describes the alleged violation and provides the SRA with ten days to investigate and either take appropriate action to cause any violation to be addressed, or to explain to OSM why no such action was determined to be necessary (e.g., because the alleged violation no longer exists or never did exist).
In contrast to SMCRA, the 2024 TDN Rule amended the federal regulations so that OSM may issue TDNs to SRAs based on programmatic (rather than site-specific) concerns. Moreover, for the first time it allows citizens to request that OSM issue TDNs without notifying the appropriate SRA of the matter and allowing the State to investigate and attempt to resolve it. Taken together, these regulations create a scenario in which OSM may issue a TDN on the basis of an alleged permit defect that has no connection to any asserted environmental problem at a specific mine site. In addition to allowing third parties to circumvent the permit appeal process available under State laws, TDNs issued on that basis generally take more time to investigate and resolve with OSM, diverting limited State resources away from permitting, inspection and enforcement.
These and other changes made by the 2024 TDN Rule are the subject of a pending legal challenge filed by 14 primacy States in the U.S. District Court for the District of Columbia (State of Indiana, et al. v. Burgum, Civ. Action No. 1:24-cv-01655 (RBW)). On June 12, 2025, Judge Reggie B. Walton issued an Order staying that litigation and vacating all deadlines for briefing in that case, on the basis of the defendants’ stated intent to publish what became the June 16, 2025 proposal. It is likely that once the current proposal is finalized, this civil action will be dismissed as moot. Of course, if OSM finalizes its pending changes and substantially reverts to the 2020 version of OSM’s oversight regulations, it is also reasonable to assume that those groups who intervened to defend the 2024 TDN Rule will challenge such a move. Judge Walton may wish to keep his docket open.
For questions about OSM’s proposal or other issues arising under SMCRA, OSM regulations or counterpart State regulatory programs, please contact Christopher B. (Kip) Power at (681) 265-1362 or cpower@babstcalland.com; Robert M. Stonestreet at (681) 265-1364 or rstonestreet@babstcalland.com; or your Babst Calland relationship attorney.
Environmental Alert
(by Gary Steinbauer, Gina Buchman and Christina Puhnaty)
On July 31, 2025, EPA published in the Federal Register its highly anticipated Interim Final Rule to extend several deadlines in 40 C.F.R. Part 60, Subparts OOOO, OOOOa, OOOOb and OOOOc that were promulgated in EPA’s 2024 Methane Rule. 90 Fed. Reg. 35966 (July 31, 2025). That same day, environmental groups filed a lawsuit challenging the Interim Final Rule. Envtl. Defense Fund v. U.S. EPA, Case #25-1164 (D.C. Cir.). Absent a stay by the court, which the environmental groups are currently not seeking, the Interim Final Rule and the various extended deadlines are effective.
Summary of Deadline Extensions
The Interim Final Rule extends numerous compliance deadlines for oil and gas air emission sources subject to the New Source Performance Standards in 40 C.F.R. Part 60 Subparts OOOO, OOOOa, OOOOb and OOOOc. The previous compliance deadlines were published in a March 2024 final rule. 89 Fed. Reg. 16820 (March 8, 2024). The Interim Final Rule, which became effective upon publication, extends many deadlines in OOOOb, the date that the requirements of the Super-Emitter Program apply with respect to OOOO, OOOOa, and OOOOb, and the date by which states must submit plans to EPA pursuant to the OOOOc emissions guidelines.
EPA extended the following OOOOb compliance deadlines to at least January 22, 2027:
- Process Controllers: The date by which process controller affected facilities are required to be zero-bleed devices. 40 CFR §§ 60.5370b(a)(5)(i), 60.5390b(a), 60.5415b(h)(1).
- Storage Vessels:
- The date by which receiving additional crude oil, condensate, intermediate hydrocarbons, or produced water throughput at tank batteries triggers a modification. 40 CFR § 60.5365b(e)(3)(ii)(C) and (D).
- The date by which a legally and practicably enforceable limit used to determine the potential VOC and methane emissions from a storage vessel must include the elements provided in paragraphs 40 CFR § 60.5365b(e)(2)(i)(A) through (F). 40 CFR § 60.5365b(e)(2)(i).
- The date by which the potential for VOC and methane emissions from storage vessels must be calculated using a generally accepted model or calculation methodology that accounts for flashing, working, and breathing losses, based on the maximum average daily throughput to the tank battery determined for a 30-day period of production. 40 CFR § 60.5365b(e)(2)(ii).
- Covers and Closed Vent Systems: The date by which a required closed vent system or cover must be designed and operated with no identifiable emissions and corresponding inspections must be performed. This new compliance deadline is 18 months after the date the Interim Final Rule is published in the Federal Register or upon startup, whichever is later. 40 CFR §§ 60.5411b(a)(3), § 60.5411b(b)(4), 60.5416b(a)–(b).
- Control Devices: The date by which you must install and operate a continuous burning pilot or combustion flame, as applicable, and the date by which an alert must be sent to the nearest control room whenever the pilot or combustion flame is unlit. 40 CFR §§ 60.5412b(a)(1)(viii) and (3)(viii), 60.5413b(e)(2), 60.5415b(f)(1)(vii)(A)(1), 60.5417b(d)(8)(i), 60.5417b(i)(6)(v).
EPA also gave regulated facilities until November 28, 2025, or 180 days after startup, whichever is later, to comply with continuous monitoring system requirements for enclosed combustors or flares. 40 CFR §§ 60.5370b(a)(9)(i) and (iii).
Regarding OOOOc, the EPA emission guidelines that States are required to use when regulating existing sources (i.e., regulated emission sources that commenced construction, modification, or reconstruction on or before December 6, 2022), EPA extended the deadline for States to submit their OOOOc plans to January 22, 2027. 40 CFR § 60.5362c(c). As indicated in our recent Alert, the Pennsylvania Department of Environmental Protection (“PADEP”) has issued public notice and provided an opportunity for comment for its proposed OOOOc plan. The comment period on PADEP’s proposed OOOOc plan closed on July 30, 2025. Several commenters urged PADEP to delay implementation of the OOOOc plan until EPA finalizes its reconsideration of OOOOc, and others raised concerns about PADEP’s analysis, or lack thereof, related to considering the “remaining useful life and other factors” when devising the proposed OOOOc plan requirements. PADEP’s proposed OOOOc plan noted the original March 2026 deadline for submission to EPA. It remains to be seen whether PADEP will continue moving forward with its plan given that it now has an additional 10 months to finalize and submit Pennsylvania’s OOOOc plan to EPA for approval.
EPA also extended deadlines in OOOOa and OOOOb associated with the so-called “super emitter program” created under the March 2024 Methane Rule. In the preamble for the Interim Final Rule, EPA notes that in implementing the “super emitter program,” which would allow EPA-approved third parties (using EPA-approved technologies) to provide EPA with data on super-emission events, “EPA has experienced unanticipated difficulties and concerns that require additional time for effective and lawful administration of various program procedures.” 90 Fed. Reg. at 35976. EPA is delaying implementation of the super-emitter program until after January 22, 2027, during which time EPA will not act on applications seeking approval for remote-detection technologies for use under the program. See 40 CFR §§ 60.5371a and 60.5371b.
The Interim Final Rule indicates that EPA may make additional, substantive revisions to the 2024 Methane Rule in a separate reconsideration action. EPA invites comments on the revisions in the Interim Final Rule by September 2, 2025, even though the rule became effective on July 31, 2025.
Environmental Groups’ Challenge
Ten environmental groups promptly filed a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit, challenging the Interim Final Rule. The Court has set initial filing deadlines, including a deadline to file any dispositive motions by September 18, 2025. A briefing schedule has not been established.
Press releases by the environmental groups suggest that they may attack the Interim Final Rule on both procedural and substantive groups. Procedurally, the grounds contend that EPA violated the law by offering no opportunity for public input. Substantively, the groups indicate that they plan to defend the 2024 Methane Rule requirements, including the original deadlines and requirements of that rule.
Babst Calland’s Environmental Practice Group is closely tracking these regulatory developments, and our attorneys are available to provide strategic advice on how these actions may affect your business. For more information or answers to questions, please contact Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Gina Buchman at (202) 853-3483 or gbuchman@babstcalland.com, Christina Puhnaty at (412) 394-6514 or cpuhnaty@babstcalland.com, or your Babst Calland relationship attorney.
Environmental Alert
(by Ben Clapp, Gary Steinbauer and Mackenzie Moyer)
On July 22, 2025, the U.S. Environmental Protection Agency (EPA) published a Direct Final Rule and a Companion Proposal in the Federal Register to extend certain compliance deadlines for coal combustion residual (CCR) management units (CCRMUs) regulated under EPA’s May 2024 Legacy CCR Rule, under which certain inactive CCR surface impoundments and landfills became subject to federal regulation under existing EPA CCR rules. The Direct Final Rule is effective on January 22, 2026, unless EPA receives adverse comments by August 21, 2025. Comments are also due on the Companion Proposal by August 21, 2025.
As described in detail in an earlier Babst Calland Environmental Alert, CCRMUs are inactive CCR landfills and other land-based disposal areas that had previously not been regulated under EPA’s CCR rules. Under the Legacy CCR Rule, facilities covered under the rule are required to conduct an extensive, two-part investigation known as a Facility Evaluation Report (FER) to determine whether CCRMUs are present and therefore subject to the groundwater monitoring, corrective action, closure, and post-closure care requirements in EPA’s CCR rules.
The Direct Final Rule allows facilities to submit both sections of the FER at the same time, provided that both reports are submitted no later than February 8, 2027. Facilities were initially required by the Legacy CCR Rule to submit Part 1 of the FER by February 9, 2026, and Part 2 of the FER by February 8, 2027. EPA is also extending the deadline for groundwater monitoring requirements (groundwater monitoring system installation, development of sampling program, and initiation of monitoring) for CCRMUs until August 8, 2029, from the original deadline of May 8, 2028, on the grounds that the original deadline did not provide sufficient time to come into compliance. Consistent with that extension, EPA has also revised the deadline for completing the initial groundwater monitoring and corrective action report to January 31, 2030, from January 31, 2029, extended the deadlines for preparing closure and post-closure care plans to February 8, 2030, from November 8, 2028, and extended the deadline for initiating closure to August 8, 2030, from May 8, 2029.
Along with the Direct Final Rule, EPA also published a Companion Proposed Rule which would serve as the Proposed Rule to adopt the provisions in the Direct Final Rule if adverse comments are received. In the Companion Proposed Rule, EPA is seeking comment on an alternative to extend the deadline to prepare Part 2 of the FER by 12 months and whether to extend the other compliance deadlines in the Legacy CCR Rule.
Additionally, on July 10, 2025, EPA published a memorandum providing important clarifications on its previously released memorandum entitled Considerations for the Identification and Elimination of Free Liquids in Coal Combustion Residuals (CCR) Surface Impoundments and Landfills (40 CFR Part 257, Subpart D) (“Free Liquids Memo”). The Free Liquids Memo was published by EPA in the docket for the final Legacy CCR Rule.
The presence or absence of free liquids in a CCR disposal unit is critical to determining the threshold question of whether the unit is a legacy surface impoundment subject to the Legacy CCR Rule, and to whether a legacy impoundment may be closed with CCR remaining in place. The Free Liquids Memo provided regulated entities with information on EPA’s views regarding available methods for determining whether free liquids are present in CCR units, as required by the CCR regulations. In the July 10th clarifying memorandum, EPA acknowledges that the Free Liquids Memo caused confusion, including among the regulated community. EPA’s July 10th memorandum provides that the Free Liquids Memo “does not impose legally binding requirements on the EPA, states, or the regulated community. It is not a regulation, nor does it augment or modify the existing regulations.” Importantly, EPA states that the Free Liquids Memo should not be relied upon or used by EPA personnel when implementing the regulatory requirements in the CCR rules. EPA also intends to provide further clarification on the “free liquids” issue at another time.
Babst Calland attorneys continue to track these developments and are available to assist with CCR-related matters. For more information on this development and other waste matters, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Mackenzie Moyer at (412) 394-6578 or mmoyer@babstcalland.com, or any of our other environmental attorneys.
Firm Alert
(by Susanna Bagdasarova and Justine Kasznica)
On July 23, 2025, the White House released “Winning the Race: America’s AI Action Plan”,[1] a sweeping federal initiative setting forth the administration’s strategy to secure U.S. global leadership in artificial intelligence. Issued pursuant to Executive Order 14179, “Removing Barriers to American Leadership in Artificial Intelligence”,[2] the Action Plan outlines more than 90 federal policy actions across three strategic pillars: accelerating innovation, building American AI infrastructure, and leading in international diplomacy and security. The administration describes the effort as a path to “a new golden age of human flourishing, economic competitiveness, and national security,” goals that the Action Plan aims to realize through regulatory reform, infrastructure expansion and investment, and significant geopolitical engagement.
Guiding Principles
Three central principles[3] shape the Action Plan’s policy directives across all strategic pillars:
- The American worker must benefit from the AI revolution. The expansion of AI infrastructure encouraged by the Action Plan aims to generate high-paying jobs, and AI-driven advancements in sectors like medicine and manufacturing are expected to raise the overall standard of living. Rather than displacing workers, AI is intended to enhance and support their roles.
- Neutrality and objectivity must be foundational components of AI technologies. AI systems must be “free from ideological bias” and be “designed to pursue objective truth rather than social engineering agendas”.
- National security depends on protecting AI systems. In a rapidly technologically advancing world, security initiatives must focus on preventing theft and misuse of U.S. AI technologies, as well as risk management and monitoring for emerging threats.
Key Policy Initiatives
Among the numerous directives and recommendations in the Action Plan, the administration identified four key policy initiatives:
- Exporting American AI: To bolster U.S. influence and strengthen strategic alliances, the Departments of Commerce and State, in partnership with industry, will deliver “secure, full-stack AI export packages – including hardware, models, software, applications, and standards – to America’s friends and allies around the world.” In doing so, the U.S. can set global AI standards and simultaneously prevent countries in “America’s AI alliance” from becoming dependent on AI technologies developed by its foreign adversaries.
- Promoting Rapid Buildout of Data Centers: To meet rising AI demand, the Action Plan proposes reducing regulatory burdens on infrastructure buildout to streamline permitting for data centers and semiconductor manufacturing facilities. This initiative is supplemented by directives to upgrade the U.S. electric grid and revitalize American semiconductor manufacturing, all of which is to be made possible by investments in the American workforce.
- Enabling Innovation and Adoption: The Action Plan emphasizes the need for deregulation at the federal level to encourage acceleration of AI development and deployment and signals future collaboration with private industry partners in determining which rules should make the cut. It further seeks to discourage state and local regulatory barriers, proposing that “the Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds.”
- Upholding Free Speech in Frontier Models: The Action Plan directs federal agencies to update procurement guidelines to contract for AI systems and services with developers “who ensure that their systems are objective and fee from top-down ideological bias.”
Strategic Takeaways
The Action Plan highlights the administration’s intent to make artificial intelligence a central pillar of national policy. For businesses, the framework provides new opportunities, incentives, and challenges, including:
- Export Control Compliance: Companies participating in “full-stack” AI export programs will need to closely navigate ITAR, EAR, and other export frameworks for compliance.
- Federal Procurement Standards: AI developers should anticipate additional requirements and certifications for objectivity, transparency, and model governance to qualify for government contracts.
- Infrastructure Incentives and Approvals: The expedited permitting process for data centers and semiconductor facilities may provide new opportunities for developers and investors in critical infrastructure.
- Regulatory Rollback Participation: Stakeholders, particularly private industry participants, will be able to provide feedback on which regulations obstruct innovation, offering a potential avenue to shape the future legal landscape of AI.
The Action Plan introduces significant regulatory, contractual, and operational changes across the AI value chain. Companies should evaluate their existing and planned AI-related activities in light of these developments, especially those touching federal contracting, export markets, and data infrastructure. They should also keep a close eye on state and local AI regulations in the wake of the Action Plan. Although the Action Plan stops short of imposing the moratorium on state and local AI regulation that was stripped from the final version of President Trump’s budget reconciliation bill (H.R.1.), dubbed the One Big Beautiful Bill Act, one policy recommendation encourages the Federal Communications Commission to “evaluate whether state AI regulations interfere with the agency’s ability to carry out its obligations and authorities under the Communications Act of 1934.”
As federal agencies enact the recommended policy actions, the administration has signaled that it is heavily focused on achieving U.S. global AI dominance. “Winning the AI Race is non-negotiable. America must continue to be the dominant force in artificial intelligence to promote prosperity and protect our economic and national security… These clear-cut policy goals set expectations for the Federal Government to ensure America sets the technological gold standard worldwide, and that the world continues to run on American technology,” said Secretary of State and Acting National Security Advisor Marco Rubio.
President Trump also highlighted his administration’s AI strategy during his first major speech on AI at a White House AI summit on Wednesday afternoon and signed three AI-related executive orders which correlate with various Action Plan directives.
Babst Calland attorneys are tracking the most pressing issues related to data center development – including AI usage and privacy policies, related risks and regulatory requirements, as well as data center development financing, project siting, land use, zoning and regulatory compliance – and addressing pathways forward for successful projects. For questions or more information, please contact Susanna Bagdasarova at sbagdasarova@babstcalland.com or 412.394.5434 or Justine M. Kasznica at jkasznica@babstcalland.com or 412.394.6466.
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[1] Full text available at Winning the Race: America’s AI Action Plan.
[2] Full text available at Removing Barriers to American Leadership in Artificial Intelligence.
[3] See White House Unveils America’s AI Action Plan.