Articles, Alerts & Perspectives

PADEP to Rescind and Revise Water Supply Replacement Technical Guidance Documents Due to Changes to Coal and Noncoal Regulations

The Foundation Mineral and Energy Law Newsletter

Pennsylvania – Mining

(by Joe Reinhart, Sean McGovern, Christina Puhnaty and Ethan Johnson)

In a February 25, 2025, Mining and Reclamation Advisory Board and Aggregate Advisory Board Joint Regulation, Legislation, and Technical Committee Meeting, the Pennsylvania Department of Environmental Protection (PADEP) presented its plans to rescind two technical guidance documents (TGDs) and revise two others due to the TGDs being inaccurate and out of date after changes to Pennsylvania’s coal regulations and noncoal regulations. See PowerPoint Presentation, PADEP, “Water Supply Replacement TGDs” (Feb. 25, 2025).

PADEP plans to rescind its Water Supply Replacement and Permitting TGD (TGD 562-4000-101) but to convert some of its sections into standard operating procedures. PADEP also plans to rescind the Insurance Requirements and Water Supply Replacement Assurance TGD (TGD 562-2500-702) due to its inaccuracy following PADEP’s 2023 revisions to 25 Pa. Code ch. 77 regarding liability insurance rates. Any information still needed from the WSR and Permitting TGD and the Insurance Requirements and Water Supply Replacement Assurance TGD will be incorporated into a revised Water Supply Replacement and Compliance TGD (TGD 563-2112-605).

PADEP plans to make minor revisions to its Increased Operation and Maintenance Costs of Replacement Water Supplies (on All Coal and Surface Noncoal Sites) TGD (TGD 562-4000-102). PADEP will also revise its Water Supply Replacement and Compliance TGD (TGD 563-2112-605), which PADEP will rename as Water Supply Replacement, Permitting, and Compliance. In the revised TGD, PADEP will incorporate background information from the rescinded Water Supply Replacement and Permitting TGD (TGD 562-4000-101), remove requirements that are now in regulations, remove attached forms, and include relevant information from the rescinded Insurance Requirements and Water Supply Replacement Assurance TGD (TGD 562-2500-702). PADEP also announced its intention to remove statements regarding de minimis maintenance or treatment costs, which are no longer addressed in 25 Pa. Code chs. 87 and 88.

PADEP expects the revised TGDs to be published for public comment in fall 2025. PADEP’s mining TGDs are available here.

PADEP Announces Bond Rate Guidelines for the Calculation of Land Reclamation Bonds on Coal Mining Operations and Bond Schedule for Noncoal Mining Operations
The Pennsylvania Department of Environmental Protection (PADEP), on March 22, 2025, announced the 2025 land reclamation bond rate guidelines for coal mining operations, and on March 29, 2025, announced the land reclamation bond schedule for noncoal mining operations. The coal mining operations bond rate guidelines became effective on April 1, 2025, and are available at 55 Pa. Bull. 2392 (Mar. 22, 2025). The noncoal mining operations bond schedule became effective March 29, 2025, and is available at 55 Pa. Bull. 2576 (Mar. 29, 2025).

PADEP Announces Rates to Be Used for Calculating Long-Term Operation and Maintenance Bonds for Water Supply Replacement
On February 15, 2025, the Pennsylvania Department of Environmental Protection (PADEP) announced that the inflation rate for calculating anthracite and bituminous coal and industrial mineral mining water supply operation and maintenance bond amounts for replacement water supplies will be 3.80% and the interest rate for the 20-year Treasury bill will be 3.08%. 55 Pa. Bull. 1603 (Feb. 15, 2025). The rates became effective on April 1, 2025, and will be in effect until the new rates are published in February 2026.

Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado

Data Centers and Our Region

West Virginia Executive

(by Moore Capito)

As the “backbone” of digital infrastructure, data centers are becoming more and more critical in meeting the demands of the modern digital world. With advances in artificial intelligence (AI) and the increased reliance on computing by people all over the world, demand for data centers is outpacing supply.

We are in a global modern-day gold rush to build data centers. And just as the 49ers faced infrastructure challenges of the day, data center developers are facing a critical infrastructure obstacle: energy.

A data center is a physical facility that houses servers that manage, store, and process data. There are several types of data centers, and while all do not require the same prerequisites to develop, they all require vast amounts of electricity. According to the United States Department of Energy, data centers account for two percent of the electricity usage in the country consuming 10 to 50 times more electricity per floor space than a typical commercial structure.

The electricity required to power data centers is adding stress on grids that are already pushing the limits. Utilities are having difficulty guaranteeing the level of power required to sustain current demand and meet projected future demand. As a result, developers are evaluating alternative ways to power their projects.

Recently, Amazon Web Services (AWS) purchased Talen Energy’s 1,200 acre data center campus which provides direct power from the Susquehanna Steam Electric Station. Tech companies and developers are no longer waiting on the utilities and are trending toward establishing dedicated power sources. This trend provides energy rich states an incredible opportunity.

Energy companies are actively exploring how to provide direct power ranging from laying additional pipelines to evaluating construction of new power plants dedicated to powering data centers. As evidenced by the recent energy deals, states like West Virginia offer an attractive proposition to data center developers – access to vast amounts of energy sources. Additionally, West Virginia boasts incredible research and development institutions, including West Virginia University and Marshall University. As a result, this region is well positioned to be the next hub for data center development.

Of course, there are challenges. Navigating the regulatory environment, finding suitable property, and identifying partners with available energy supply are just a few. Our firm, Babst Calland, specializes in environmental, energy, and emerging technologies law. As such, we are perfectly situated to connect those pieces because we understand each geographic footprint and tailor legal strategies accordingly, with a deep knowledge of state regulation and local jurisdictions. We provide the cross-disciplinary legal team to address these challenges and support regional and national data center projects.

The demand for data centers is growing and projected to grow even faster. We know the greatest challenge is meeting the electricity requirements. West Virginia has an abundant supply of natural resources, affordable land, artificial intelligence research and development, and proximity to densely populated areas. Now is the time to leverage those strengths. If we do so, our region is poised to benefit greatly from this rush for data centers.

With increased demand for complex data center development, whether navigating potential legal challenges related to financing, project siting, land acquisition, zoning, or regulatory compliance, Babst Calland is prepared to address the region’s most pressing concerns.

Moore Capito is a shareholder in the Corporate and Commercial, Emerging Technologies, and Energy and Natural Resources groups of Babst Calland. He has substantial experience in all phases of complex corporate, commercial and real estate transactions. He routinely counsels clients in entity, joint venture and partnership structuring and formation, and general business matters. For more information, please contact Moore Capito at (681) 205-8953 or mcapito@babstcalland.com or visit babstcalland.com.

Reprinted with permission from the Spring 2025 edition of WV Executive.

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TAKE IT DOWN Act Signed into Law by President Trump

TEQ Hub

(by Kristen Petrina)

On May 19, 2025, President Trump signed into the law the “TAKE IT DOWN Act (the “Act”). The Act includes data privacy, digital protections, and AI governance requirements of companies to remove deepfakes from “covered platforms”, particularly with a focus on nonconsensual intimate imagery (“NCII”).

The Act, whose acronym stands for “Tools to Address Known Exploitation by Immobilizing Technological Deepfakes on Websites and Networks Act” includes both criminal and civil elements; however, it does not create a new private right of action, rather provides the Federal Trade Commission with the enforcement authority over failures to comply with the notice and removal obligations, which would constitute an unfair or deceptive act or practice under the Federal Trade Commission Act.

Criminal and Civil Liability

The Act criminalizes the publication of an authentic or computer-generated NCII and outlines penalties for when the images of “intimate visual depiction” as defined in 15 USC 6851(5)(A), of an adult or minor and imposes new obligations on social media and online platforms to respond to requests to promptly remove unlawful NCII. Synthetic or computer-generated NCII, includes the term “digital forgery” meaning “any intimate visual depictions of an identifiable individual created through the use of software, machine learning, artificial intelligence, or any other computer generated or technological means, including by adapting, modifying, manipulating, or altering an authentic visual depiction, that, when viewed as a whole by a reasonable person, is indistinguishable from an authentic visual depiction of the individual.” An identifiable individual includes someone “(i) who appears in whole or in part in an intimate visual depiction; and (ii) whose face, likeness, or other distinguishing characteristic (including a unique birthmark or other recognizable feature) is displayed in connection with such intimate visual depiction.”

Criminal Liability for “Knowingly” Publishing NCII

1. Involving Adults. The Act prohibits the use of an interactive computer service to knowingly publish an intimate visual depiction of an adult identifiable individual, who is not a minor, if (i) the intimate visual depiction was obtained or created under circumstances in which the person knew or reasonably should have known the identifiable individual had a reasonably expectation of privacy; (ii) what is depicted was not voluntarily exposed by the identifiable individual in a public or commercial setting; (iii) what is depicted is not a matter of public concern; and (iv) publication of the intimate visual depiction is intended to cause harm or causes harm, including psychological, financial or reputational harm, to the identifiable individual. For synthetic or computer-generated digital forgeries, the test is similar, except to establish criminal liability, the depiction would have to be published without consent of the identified individual.
2. Involving Minors. Under the Act, NCII involving minors, defined as anyone under the age of 18 years, sets forth stricter prohibitions making it unlawful to publish NCII of an identifiable individual who is a minor with the intent to (i) abuse, humiliate, harass, or degrade the minor; or (ii) arouse or gratify the sexual desire of any person.
3. Consent, Disclosure and Disclosure Exceptions. The Act recognizes that the consent to create an image is not the same as consent to publication, stating that the fact that (i) an identifiable individual providing consent for the creation of an image; or (ii) the identifiable individual disclosure of the intimate visual depiction to another individual does not establish or constitute consent to publication. However, certain exceptions apply to allow for disclosure to law enforcement, professional obligation reporting requirements, or publication of an individual’s own images.

Civil Liability for Failure to Comply with Notice and Removal Requirements

The criminal provisions of the law went into effect immediately, the Act provides,  “covered platforms” a year after the date the law went into effect, to develop a process for notice and removal of NCII identified from their platforms within 48 hours of receiving a valid request from an identifiable individual or someone authorized to act on the individual’s behalf. A covered platform means “a website, online service, online application, or mobile application that (i) serves the public or (ii) for which it is the regular course of business of trade or business of the website, online service, online application, or mobile application to publish, curate, host or make available content of nonconsensual intimate visual depictions.” Covered platforms do not include ISPs, email providers, online services that consist primarily of not user generated content, or services for which chat, comment or interactive functionality is directly related to the provision of not user generated content.

A covered platform must provide a clear, easy to understand and conspicuous policy which shall include valid removal request requirements, how to submit a removal request and the removal responsibilities of the platform. A valid removal request must be in writing, with a physical or electronic signature, and include (i) enough information to locate the depiction; (ii) a statement of the individuals’ good faith belief that the depiction was not consensual; and (iii) the requester’s contact information.

Within 48 hours of a valid removal request, the covered platform must remove the intimate visual depiction and make reasonable efforts to identify and remove any known identical copies of such depiction.

The Act gives covered platforms liability protections from claims from content posters based on the covered platforms good faith removal, disabling access to, or removal of, material claimed to be NCII, regardless of whether the intimate visual depiction is ultimately determined to be unlawful or not.

Covered Platform Next Steps

While the removal obligations will not take effect until May of 2026, covered platforms face significant obligations to confirm compliance. Knowledge of the Act allows companies to develop a business model to aid in immediate removal of NCIIs as it must occur with 48 hours. Therefore, companies that host user generated content, should prepare to take the following steps to determine if and how they would need to comply:

1. Determine if you or your company would be a covered platform.
2. Determine whether your company has enough resources, proper operating and escalation procedures, and training to implement the Act’s requirements.
3. Establish a notice process and policy.
4. Review your data privacy, AI, cybersecurity, document retention and digital governance policies.
5. Consider engaging professional support to confirm that your company is prepared to comply with the Act’s requirements.

Kristen Petrina is an associate in the Corporate and Commercial and Emerging Technologies groups of Babst Calland. She represents domestic and international clients on a broad range of general corporate and commercial law matters and advises businesses on data privacy and protection and security compliance.

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Accumulating Accountability: Commonwealth Court Reviews Constitutional Limits on Cumulative Municipal Fines

The Legal Intelligencer

(by Michael Korns and Anna Jewart)

Pennsylvania municipalities are empowered not only to adopt ordinances and enforce them but to establish fines and penalties for violations of the same. However, municipalities are creatures of statute and authorized only to act within the bounds of the powers granted to them by the General Assembly.  The various municipal enabling statutes, such as the First Class Township Code, as well as other statutes such as the Pennsylvania Municipalities Planning Code, all include express authorizations for municipalities to prescribe fines and penalties for violations of municipal ordinances and also establish restrictions on the upper limits of those fines or civil penalties per violation.  Typically, these statutes also expressly establish that a municipality may, by ordinance, provide that a separate violation shall arise for each day of violation and for each applicable section of the ordinance. Consequently, municipalities, generally, are permitted to seek cumulative fines which grow each day a violation persists.  Both the Pennsylvania State Constitution, article I, section 13, PA. CONST. art. I §13, and the Eighth Amendment of the United States Constitution, U.S. CONST. amend. VIII, (as made applicable to the states through the Fourteenth Amendment, U.S. CONST. amend. XIV) prohibit excessive fines, providing in relevant part that “[e]xcessive bail shall not be required, nor excessive fines imposed…” On April 2, 2025, the Commonwealth Court explored whether a cumulative municipal fine imposed under the Philadelphia Code, as authorized by the First Class City Home Rule Act, 53 P.S. §13101 et seq., was unconstitutionally excessive.

In City of Philadelphia v. Epstein, No. 515 C.D. 2024, 2025 WL 981892 (Pa. Cmwlth. April 2, 2025)^[1] the Court reviewed the outcome of a longstanding enforcement action by the City of Philadelphia originating from a 2018 enforcement notice and 2019 complaint seeking a permanent injunction and fines regarding violations of the City Code.  An order of the Court of Common Pleas of Philadelphia County directed remedial action and indicated that a $2,300 daily fine would be imposed if the defendant did not comply with the order, beginning to accumulate on April 7, 2020. During the course of proceedings prolonged due to the COVID-19 pandemic, defendant failed to remedy the violations originally cited by the City.  On February 6, 2023, the common pleas court issued a final order which assessed a statutory fine of $65,333.33 but noted that the total statutory amount of accrued fines to which the City was entitled (as of November 8, 2022) was $3,456,900.00.  The defendant filed a post-trial motion seeking a reduction of the statutory fine, in part, on the grounds that it was excessive and punitive in violation of the First Class City Home Rule Act, the Pennsylvania State Constitution, and the Eighth Amendment of the U.S. Constitution.  The common pleas court denied the motion, and the defendant appealed to the Commonwealth Court.

Section 17 of the Home Rule Act and the City Home Rule Charter both authorized the city to impose fines and penalties for violation of City ordinances “not exceeding … $2,300…”.  The Home Rule Act further provides that “a city of the first class may increase any fine… or penalty… provided that the increase does not exceed… $400… in any calendar year and the total amount of the fine…or penalty does not exceed two thousand dollars.” The defendant alleged that the City could only seek a maximum fine of $2,300 for each of the violations issued against the property plus a $400 increase per year, amounting to a total of $7,800 maximum.  She also argued that regardless, the fine imposed was excessive and punitive, in part because she had trusted her now estranged husband to bring the property into compliance. The City countered that the Court had already rejected the argument that the Home Rule Act and City’s Home Rule Charter capped fines at $2,300 per violation plus $400 per year in City of Philadelphia v. Neely, No. 480 C.D. 2022 (Pa. Cmwlth. Mar. 25, 2024), and that the City was statutorily authorized to impose daily fines.  It further argued that the $65,000 fine at issue was not violative of the constitutional restrictions on excessive fines.

The Court first reviewed the relevant statutory authority applicable to Philadelphia, as well as the City Code, noting that it expressly states that “[e]ach day that a violation continues after issuance of a notice or order shall be deemed a separate offense.”  The defendant argued that this provision conflicts with the Home Rule Act and Home Rule Charter, but the Court disagreed.  It concluded the plain language of the Act and Charter did not prohibit the imposition of a fine or penalty for each offense as defined by the Code.  Further, while Section 17 of the Act limited the penalty the City may impose for each individual violation, it did not limit the City’s ability to define what constitutes a violation or offense through an ordinance.  As the Court stated, the objective behind cumulative fines for each day a property remains in violation is to encourage property owners to expeditiously remedy ongoing violations, and for those reasons, the Court has generally upheld cumulative or aggregate assessments for continuing violations that remain uncorrected for extended periods. It therefore refused to overturn the imposition of the fine by the common pleas court on those grounds, noting the 1,503 day period over which the defendant had failed to correct the relevant violations.

The Court then turned to the topic of more interest to the remainder of the state – the impact of the Excessive Fines Clauses of the Pennsylvania and U.S. Constitution, which limits the government’s powers to extract payments as punishment for an offense.  The Court noted that since fines serve not only as a punishment but as a deterrent, the amount of a fine can be raised to whatever sum is necessary to discourage future or continued violations, subject to any restriction imposed on the amount of the fine by the enabling statute or the Constitution. There need not be strict proportionality between the harm resulting from the offense and the penalty imposed, but a fine may be deemed unconstitutionally excessive where the amount is so great as itself to be confiscatory and beyond the bounds of all reason and justice. Defendant argued that the fine was grossly excessive and disproportionate to the wrong committed as well as to the value of the property, and that the property owner would be unable to pay the fine.  The Court rejected these arguments, noting that neither the value of the noncompliant property nor the inability to pay are factors in determining if a fine is unconstitutionally excessive.  The Court reasoned that the fine imposed was the result of ongoing violations for a 1,503-day period and fell within the statutory parameters of the Code. Finally, comparing the statutory maximum ($3,345,900) to the fine imposed, the Court noted that the common pleas court had provided a 98% reduction which it found to be a “lenient sum” in comparison.  The Court therefore agreed with the court of common pleas that the fine was not unconstitutionally excessive.

As with any other authority, the power of a municipality to seek fines and penalties is not only limited by the state statute that authorizes it but confined by the protections of the state and U.S. Constitution.  The Court’s decision in Epstein suggests that constitutional limits will not automatically serve to disrupt cumulative fines that are otherwise levied within the boundaries of state law and perceived to be in furtherance of the dual goals of punishment and deterrence.

Michael T. Korns is senior counsel in the public sector, and energy and natural resources groups of Babst Calland.  Anna S. Jewart is an associate in the public sector, and energy and natural resources groups of Babst Calland and focuses her practice on land use, zoning, and general municipal matters.

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Reprinted with permission from the April 24, 2025 edition of The Legal Intelligencer© 2025 ALM Media Properties, LLC. All rights reserved.

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^[1] Opinion reported and pending official citation.

Sick of Healthcare? Healthcare Benefit Update for Employers – What to Watch in 2025

TEQ Hub

(by Jenn Malik and Anna Hosack)

Regardless of party affiliation, the one issue that most Americans seem to be able to agree about in 2025 is that we all are sick of our healthcare system.  Healthcare reform is no stranger to the American political discourse, but recent public sentiment at the expense, difficulty, and confusion inherent in navigating the American healthcare is at an all-time low.  Americans’ dissatisfaction with the current state of the healthcare industry is unsurprising when between 2008 and 2022, the per enrollee cost of private health insurance has grown by 61.6% according to a study by the Kaiser Family Foundation.^¹ Despite rising costs, rates for denials of coverage have increased nationally with a current average of around 19%.^²  Add to these statistics the change of administration and corresponding anticipated changes in healthcare benefits policy, along with increased litigation against Plan Sponsors reminiscent of the retirement plan litigation in the late 2000s, and we are all left scratching our heads with how to provide healthcare coverage to employees at an affordable cost – especially when, according to a recent study by Forbes, two-thirds (2/3) of American employees name employer-covered healthcare as the most important benefit in considering whether to take a job.^³  Below are key issues for employers to watch in the healthcare benefits space this year to guide in planning your organization’s healthcare benefits and to budget accordingly:

Challenge to Affordable Care Act’s Preventive Care Coverage

Currently, the Patient Protection and Affordable Care Act (ACA), also known as Obamacare, mandates that most health insurance plans must cover certain preventive services at no cost share to patients.^⁴  These services include benefits such as an annual wellness visit, maternity care, STD testing, certain immunizations for adults and children, cancer screenings, and well-baby/well-child visits.^⁵  The United States Preventive Services Task Force (USPSTF)^⁶, the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP) are various agencies tasked with recommending what benefits must be covered at no cost share under the preventive care mandate.^⁷  Proponents of the mandate argue that covering these benefits at no cost-share leads to earlier detection of serious medical conditions, earlier medical intervention, and more positive patient outcomes which can decrease the number of high-cost claims in the population and deter costs, while critics oppose the increased costs to employers/plan sponsors and may also oppose certain preventive services on religious grounds, such as the requirement to cover pre-exposure prophylaxis for HIV (PrEP) or birth control.

This April, SCOTUS is set to hear a challenge brought by Braidwood Management, Inc., and other employers to the mandate on the basis that the USPSTF, in its role as an administrative body that recommends what services are covered at no cost share, are “principal officers” who must be nominated by the U.S. President and confirmed by the Senate in accordance with the Constitution’s Appointment’s Clause.^⁸  These employers also challenged the mandate on religious grounds, arguing that the ACA’s requirement that plans cover medication for HIV prevention violated the Religious Freedom Restoration Act (RFRA).  In 2022, a Texas District Court agreed with the employers, holding that the USPSTF’s recommendations are unconstitutional because its members are officers of the United States that were not appointed in accordance with the Appointments Clause.^⁹  The District Court held that because the members were unconstitutionally appointed, all recommendations implemented by the USPSTF after March 23, 2010 (the effective date of the ACA) must be vacated and issued a nationwide injunction blocking enforcement of the ACA’s preventive care mandate.  The District Court also held that the USPSTF’s recommendation to cover PrEP at no cost share violated the RFRA.

On appeal, the Fifth Circuit Court of Appeals affirmed the District Court decision that the USPSTF members were unconstitutionally appointed; however, the Fifth Circuit held that the District Court had erred in vacating all agency actions to implement and enforce the USPSTF’s preventive care requirements and erred by enjoining enforcement nationally.^¹⁰  The Fifth Circuit limited the remedy of enjoining enforcement to the particular plaintiffs and those similarly situated in lieu of a national injunction.  The Fifth Circuit also declined to issue similar decisions against ACIP and the HRSA and issued a remand to address whether the Secretary of Health and Human Services properly ratified the recommendations of those agencies.

SCOTUS granted certiorari and will specifically review whether USPSTF members are “inferior officers” of the United States, meaning their appointment was constitutional, and whether the District Court failed to sever the allegedly unconstitutional provision.  SCOTUS denied certiorari on the Plaintiff’s cross-petition for review of whether all ACA preventive care requirements violated the non-delegation canon; consequently, all ACA preventive care requirements recommended prior to March 23, 2010 are preserved.

What employers should consider for 2025:

Until SCOTUS renders an opinion, employers subject to the ACA should continue to cover the preventive services recommended by the USPSTF at no cost-share to their employees.  If the challenge is successful, employers may be able to impose cost sharing for certain preventive services and/or benefits which may initially reduce healthcare costs.  However, it is important to remember that federal law sets the floor, and not the ceiling for required covered benefits – and that while imposing cost-sharing on employees may have an immediate financial gain in the short-term, shifting costs to employees can cause delays in care, which can lead to later medical interventions, higher cost claims, and ultimately, a sicker workforce. 

Financial Impact of Prescription Drug Developments 

Prescription drug costs are skyrocketing with prescription drug cost trends outpacing medical cost trends in 2025: according to a Segel Health Plan Cost Survey, prescription drug costs grew by 11.4% and medical costs increased by 8%.  This trend is heavily influenced by the emergence of glucagon-like peptide-1 receptor agonists (commonly known as GLP-1s) used to treat type 2 diabetes and obesity.  While the monthly cost of these drugs is low compared to some other medications, typically ranging from $900 – $1300 per month per patient, their widespread utilization by the public has left employers and health insurers scrambling with how to maintain costs.  The financial impact of GLP-1s has been so staggering that many insurers have begun to offer buy-up options to employers if they choose to include GLP-1s on their covered medications list (i.e. Formulary) for weight loss.  Proponents of GLP-1s argue that inclusion of the medications on Formulary greatly reduces other costly medical interventions such as gastric bypass surgery, and likewise reduces cardiovascular conditions such as heart attack, and stroke.  Those against coverage of GLP-1s argue that there is a lack of independent studies on the impact of long-term usage of GLP-1s, that the costs have significant negative fiscal impacts to the healthcare system,  and that the side effects cause even more high-cost claims.  Big Pharma continues to seek approvals from the FDA for expanded indications of GLP-1s including for the treatment of sleep apnea, kidney disease, and liver disease.

Additionally, the financial savings that were anticipated when biosimilars, or biologic drugs that are highly similar to an already FDA-approved biologic product, hit the market as many brand medications began to lose their patent protection has been underwhelming.  Biosimilar adoption has been slow due to concerns about safety and efficacy among healthcare providers and patients, complex Formulary and reimbursement structures that favor brand drugs over biosimilars, and lack of patient and provider education despite the significantly decreased price tag.

Specialty medications, which on average account for 50% of prescription drug spend, continue to be developed and while these medications offer life altering treatments for patients living with severe illnesses – they also come with a hefty price tag.  For example, a new treatment to cure Hemophilia B, a lifelong debilitating bleeding disorder, comes at a price tag of $3.5 Million per treatment.  While many balk at the cost, consider on average that an individual with Hemophilia averages $700,000-$800,000 in medical costs per year – so in theory the treatment would pay for itself in 4-5 years.  However, for employer-sponsored plans, a single claim of $3.5 million would have an extreme impact on renewals.

Finally, the Trump Administration announced on April 8, 2025 that his administration would soon announce tariffs on pharmaceutical imports.  While it is uncertain how Big Pharma will respond to such tariffs, it is certain that if such tariffs come into effect, they will very likely cause significant increases to how much consumers – and specifically plan sponsors/employers will spend on prescription medications.  For reference, the U.S. imported over $210 Billion in pharmaceuticals in 2024.

What employers should consider for 2025:

Employers should anticipate prescription drug costs to continue increasing and budget accordingly as GLP-1s are here to stay and increased indications for GLP-1 drugs continue to be considered by the FDA.  Employers looking to reduce costs should consider whether to cover GLP-1s for weight loss only.  Likewise, employers should speak to their carriers and pharmacy benefits managers (PBMs) about their biosimilar strategy as a means to reduce cost.  Employers should investigate copay accumulator programs as a means to leverage drug manufacturer coupon dollars to lower costs of specialty medications and consider plan design changes to their prescription benefits.  Finally, employers should prepare for the impact of tariffs on their plans’ prescription drug spends.

Challenge to Mental Health Parity and Addiction Equity Act

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally requires health plans to cover mental health and substance use disorder benefits similarly to medical and surgical benefits.  Since MHPAEA’s enactment, complex federal regulations have been published to determine whether a health plan treats these benefits in parity which has led to significant difficulty for issuers and plan sponsors in determining whether a health plan is in compliance.  In late 2020, Congress enacted the Consolidated Appropriates Act (CAA) which requires group health plans and health insurers to conduct comparative analyses to demonstrate that both quantitative treatment limitations (QTLs), or treatment limitations that are numerical in nature such as visit limits and copays, and non-quantitative treatment limitations (NQTLs), i.e. non-numerical limitations such as network access to providers, are no more stringently applied to mental health/substance abuse benefits than medical/surgical benefits.  Since 2021, plans and insurers have been required to make these comparative analyses available to the Department of Labor, HHS, and Department of Treasury (Departments), upon request – but due to the complexity of the rules, enforcement has been challenging and many plans have been found to be out of compliance.

This led to the Departments eventually publishing final rules amending the longstanding 2013 rules on September 23, 2024 (2024 Final Rules).  The 2024 Final Rules establish new NQTL standards, bolster the comparative analysis requirements that were added by the CAA, and prohibit plans and issuers from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to mental health/substance use disorder benefits as compared to medical/surgical benefits when designing NQTLs.^¹¹  Some of these regulations are already in force while others begin on or after January 1, 2026.

Earlier this year, the ERISA Industry Committee (ERIC) filed suit against the Departments in the U.S. Court of Appeals for the D.C. Circuit seeking to invalidate the 2024 Final Rules, or at a minimum, invalidate key provisions and prohibit the Departments from implementing or enforcing the new rules, asserting that the 2024 Final Rules violate the U.S. Constitution and the Administrative Procedure Act and impose vague and burdensome requirements on health plans.¹²  That same day, the Departments released a report to Congress indicating that employers had made progress on complying with MHPAEA but still fell short.  The executive director of the ERIC Legal Center asserted that the new regulations “threaten the ability of employers to offer high quality, affordable coverage for the mental health and substance use disorder needs of employees and their families.”^¹³

Prior to the establishment of the 2024 Final Rules, compliance with the MHPAEA caused significant financial strain on health plans and health insurers alike, and by extension drive up compliance costs associated with healthcare benefits coverage.  If the additional requirements under the 2024 Final Rules pass constitutional muster, health insurers and plans will incur additional monitoring and reporting costs.  Additionally, though MHPAEA enforcement was a top priority for the Biden administration, it is unclear what the Trump administration’s position will be – or what impact the recent workforce cuts at the DOL and HHS will have on the enforcement of MHPAEA going forward.

What employers should consider for 2025:

The 2024 Final Rules may not be here to stay between budget constraints, federal staffing constraints, and the ERIC lawsuit targeting the 2024 Final Rule.  In the meantime, employers should monitor updates and budget accordingly for the additional requirements in the 2024 Final Rules to ensure continued compliance with MHPAEA as applicable.  

Jenn Malik is a shareholder and Anna Hosack is an associate in the public sector services group of the Pittsburgh law firm of Babst Calland, Clements & Zomnir.  Malik focuses her practice on healthcare benefits administration, insurance coverage, and appellate law.  Hosack focuses her practice primarily on municipal law, land use, and healthcare benefits law.  Contact them at jmalik@babstcalland.com and ahosack@babstcalland.com.

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^[1] Amin, K., Cox, C., Ortaliza, J. & Wager, E., Health Care Costs and Affordability, Kaiser Family Foundation, (May 28, 2024) https://www.kff.org/health-policy-101-health-care-costs-and-affordability/.

^[2] Lo, J., Long, M., et al, Claims Denials and Appeals in ACA Marketplace Plans in 2023, Kaiser Family Foundation, (Jan. 27, 2025) https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans-in-2023/#:~:text=Key%20Takeaways,by%20insurer%20and%20by%20state.

^[3] O’Reilly, Dennis, Best Employee Benefits, Forbes (October 30, 2024) https://www.forbes.com/advisor/business/best-employee-benefits/#:~:text=More%20than%20half%20of%20American,as%20the%20most%20important%20benefit.

^[4] 42 U.S.C. § 300gg-13(a)(1).

^[5] Preventive Services Covered by Private Health Plans Under the Affordable Care Act, Kaiser Family Foundation (Feb. 28, 2024) https://www.kff.org/womens-health-policy/fact-sheet/preventive-services-covered-by-private-health-plans/#:~:text=The%20services%20required%20to%20be,is%20published%20or%20otherwise%20released.

^[6] The USPSTF determines what preventive services must be covered at no cost share by reviewing scientific evidence related to the effectiveness, appropriateness, and cost-effectiveness of clinical preventive services for the purpose of developing recommendations for the health care community, and updating previous clinical preventive recommendations. 42 U.S.C. § 299b-4(a)(1).

^[7] The USPSTF recommends what services must be provided at no cost-share, while ACIP recommends which immunizations must be covered, and the HRSA determines what contraceptives require coverage.

^[8] Petition for a Writ of Certiorari, Becerra et al. v. Braidwood Management, Inc. et al., No. 24-316 (Sept. 19, 2024).

^[9] Memorandum Opinion & Order, Braidwood Mgmt. v. Becerra, 627 F. Supp. 3d 624 (N.D. Tex. 2022)

^[10] Braidwood Management, Inc. v. Becerra et al., No. 23-0326 (5^th Cir. 2024).

^[11] Fact Sheet: Final Rules Under the Mental Health Parity and Addiction Equity Act (MHPAEA), U.S. Department of Labor (last visited Apr. 1, 2025) https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rules-under-the-mental-health-parity-and-addiction-equity-act-mhpaea.

^[12] See Complaint, Erisa Industry Committee v. Department of Health and Human Services et al., No. 1:25-cv-00136 (D.D.C. 2025).

^[13] Kellie Mejdrich, Trade Group Sues to Stop Federal Mental Health Parity Regs, LAW360 (Jan. 17, 2025) https://www.law360.com/articles/2286079.

Emerging Technologies and the Energy Industry

There’s no doubt that the energy sector has seen a recent surge in tech-driven initiatives. As economic pressures continue to drive companies to develop and deploy advanced technologies, the industry must also navigate the complex landscape of technology innovation and sustainability to continue to meet regulatory requirements, protect intellectual property, and manage risks associated with the rapidly changing legal and market conditions.

Whether it’s dealing with energy transition, technology onboarding and integration, or AI and automation, Babst Calland is prepared to support energy clients in handling the unique challenges and opportunities surrounding the use of emerging technologies.

For more information, click here. Reach out to Justine Kasznica at jkasznica@babstcalland.com or 412.394.5684 or your Babst Calland contact if you have questions.

Home Field Advantage: EEOC To Prioritize American Workers

The Legal Intelligencer

(by Erin Hamilton and Cella Iovino)

On February 19, 2025, United States Equal Employment Opportunity Commission (EEOC) Acting Chair Andrea Lucas announced that the agency will direct its focus on protecting American workers from unlawful national origin discrimination (the “February 2025 EEOC Guidance”). In a shift from previous priorities usually relating to the prevention of discrimination against foreign nationals and historically marginalized groups, the EEOC’s new enforcement priority will likely lead to an increase in investigations, compliance checks, and litigation relative to the protection of American workers from alleged discrimination.

Applying to employers with 15 or more employees, Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employment discrimination based on race, color, religion, sex (including pregnancy, sexual orientation, and gender identity), and national origin. National origin discrimination occurs when an applicant or employee is treated unfairly due to their country of origin, ethnicity, accent, or because they are perceived to belong to a particular ethnic group, regardless of whether they actually do. In conjunction with its enforcement of Title VII and other federal laws against workplace discrimination and harassment, the EEOC periodically releases guidance to assist employers with compliance.

Traditionally, and under previous administrations, the EEOC focused its national origin enforcement efforts on protecting foreign nationals from employment bias. However, the Trump administration has made its intention to focus on protecting American citizens from what it characterizes as anti-American bias clear. In the press release, Acting Chair Lucas highlighted that this policy shift “will help deter illegal migration and reduce the abuse of legal immigration programs by increasing enforcement of employment antidiscrimination laws against employers that illegally prefer non-American workers, as well as against staffing agencies and other agents that unlawfully comply with client companies’ illegal preferences against American workers.” Further, Acting Chair Lucas opined that the agency will be paying particular attention to employer’s policies and practices which appear to show preference to undocumented individuals, migrant workers, and visa holders over American workers.

The agency’s shift in focus is already making an impact. In a recent settlement, LeoPalace Guam Corporation, operating as LeoPalace Resort in Guam, agreed to pay $1,412,500.00 to resolve a case brought by the EEOC in which it alleged that the resort favored Japanese employees over non-Japanese employees, including American nationals. Specifically, the suit claimed that the resort paid non-Japanese employees less wages, gave them less benefits, and subjected them to worse terms and conditions of employment in comparison to Japanese employees in similar or lower positions. See EEOC v. LeoPalace Guam Corp. d/b/a LeoPalace Resort, Case No. 1:25-cv-00004 (D. Guam 2025). In addition to the settlement payment, the resort also agreed to equitable relief including hiring an external equal employment opportunity monitor to oversee compliance, training, and review of policies and procedures and conducting periodic audits.

Businesses and corporate entities who sponsor foreign workers via work visas or those that typically hire immigrants and/or foreign nationals are likely to be particularly affected by the February 2025 EEOC Guidance. Practical strategies to consider in light of the February 2025 EEOC Guidance include:

• Conducting an internal audit of all recruitment, hiring, benefits, compensation and promotion policies to ensure they address national original hiring, employment, work conditions, benefits and compensation in a neutral manner;

• Ensure all current and future job postings and hiring selection criteria are neutral as to national origin;

• Provide training to management and human resources staff on the requirements of Title VII including its prohibition against national origin discrimination and the February 2025 EEOC Guidance;

• Ensure that any third-party staffing agencies and/or recruiters being utilized are aware of Title VII’s prohibition against national origin discrimination and are aware of the February 2025 EEOC Guidance;

• Confirm that any visa programs, including H-1B programs, are not being utilized to displace American workers; and

• Ensure that pay and working conditions for similarly situated foreign workers and American workers are generally consistent.

Businesses and corporate entities that employ and/or recruit foreign workers should be particularly vigilant in monitoring future EEOC guidance. lawsuits, and other developments based on national origin discrimination in the coming months.

If you have questions about unlawful national origin discrimination or the February 2025 EEOC Guidance please contact Erin Lucas Hamilton at 412-394-6978 or ehamilton@babstcalland.com or Francesca C. Iovino at 412-394-6460 or fiovino@babstcalland.com.

Erin Hamilton is a shareholder in the Employment and Labor and Litigation groups of Babst Calland. Ms. Hamilton has significant experience advising and litigating relative to employment matters including the defense of discrimination and harassment claims as well as defending and prosecuting restrictive covenant, non-competition/solicitation, trade secret misappropriation and employee/executive employment contract disputes. Her experience spans a wide variety of industries, including but (not limited to) energy and natural resources, aviation, engineering, construction, manufacturing, technology, professional sports, banking, insurance and financial services.

Francesca (Cella) Iovino is an associate in the Employment and Labor and Litigation groups of Babst Calland. Ms. Iovino’s experience encompasses all phases of litigation, including a focus on representing clients in complex employment disputes related to discrimination claims, harassment claims, wrongful termination, wage and hour violations, and unionization.

To view the full article, click here.

Reprinted with permission from the April 3, 2025 edition of The Legal Intelligencer© 2025 ALM Media Properties, LLC. All rights reserved.

EPA Announces Expansive Deregulatory Plan

GO-WV

(by Gary Steinbauer, Jessica Deyoe and Ethan Johnson)

On March 12, 2025, U.S. Environmental Protection Agency Administrator Lee Zeldin announced a sweeping plan to “undertake 31 historic actions in the most consequential day of deregulation in U.S. history.” The announcement states that the deregulatory plan is intended to “advance President Trump’s Day One executive orders and Power the Great American Comeback.” EPA states that these actions “will roll back trillions in regulatory costs and hidden ‘taxes’ on U.S. families,” making it “more affordable to purchase a car, heat homes, and operate a business.”

The ambitious plan identifies numerous past EPA regulations or actions that will be reconsidered or reviewed. The regulations identified in the deregulatory plan, which were promulgated under the Clean Air Act, Clean Water Act, and the Resource Conservation and Recovery Act, apply to a wide range of industrial sectors and regulated parties. Although described as “31 actions,” the EPA’s primary announcement lists 22 different items, with some mentioning more than one regulation or past action set to be reconsidered or otherwise addressed as part of the plan. EPA’s list is also separated by headings that appear to correspond to separate Day One executive actions by President Trump. For each of the planned deregulatory actions, EPA issued an accompanying press release providing additional information, including, in a few cases, anticipated timelines for completing the deregulatory actions and planned interim actions.

The Babst Calland team has summarized the identified deregulatory actions and information provided by EPA in the table below:

With  limited exceptions, EPA provides few details on the timing and steps it will take for each of the identified actions. In multiple announcements, EPA states or implies that it will undertake notice and comment rulemaking under the Administrative Procedure Act. Notably, EPA does not address steps it may take in pending litigation regarding several of the identified regulations. Nor does EPA mention whether the planned deregulatory actions satisfy directives under President Trump’s other Executive Orders, such as the “Ensuring Lawful Government and Implementing the President’s ‘Department of Government Efficiency Regulatory Initiative’” and  “Unleashing Prosperity Through Deregulation” orders.

The deregulatory plan will require significant resources and time to implement at a time when EPA’s new political leadership is seeking to drastically cut costs and staff. Although several of the identified deregulatory actions may take years to complete, stakeholders subject to the identified deregulatory actions must evaluate and consider developing strategies for productively engaging with EPA during the expected rulemakings and related actions. Major environmental groups have denounced EPA’s deregulatory plan and are vowing to challenge the EPA.

Babst Calland’s Environmental Practice Group will be closely tracking the steps EPA takes to implement the deregulatory plan. Updates will be provided as significant developments arise. Babst Calland attorneys are available to provide strategic advice on how EPA’s sweeping deregulatory plan may affect your business today and in the future. For more information or answers to questions, please contact Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Jessica Lynn Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com, Ethan Johnson at (202) 853-3465 or ejohnson@babstcalland.com, or your Babst Calland relationship attorney.

Click here, to view the article online in the April issue of GO-WV News.

[1] This announcement was not part of EPA’s main announcement of the “Biggest Deregulatory Action in U.S. History,” but it was announced separately on March 12, 2025.

Treasury Department Suspends Enforcement of Corporate Transparency Act’s BOI Reporting Requirements

PIOGA Press

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

In yet another twist in the ongoing roller coaster ride of Corporate Transparency Act (CTA) compliance, the U.S. Department of the Treasury’s (Treasury Department) Financial Crimes Enforcement Network (FinCEN) has paused enforcement of the CTA’s beneficial ownership information (BOI) reporting requirements. On February 27, 2025, FinCEN issued a press release stating that it “will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports…by the current deadlines.” Instead, FinCEN plans to issue an interim final rule by March 21, 2025 (the previously extended deadline for most reporting companies), which will set new deadlines and prioritize BOI reporting for entities that “pose the most significant law enforcement and national security risks.”

This announcement was rapidly followed by a Treasury Department press release on March 2, 2025 taking things a step further in announcing that U.S. citizens and domestic reporting companies will not be subject to any penalties or fines for failing to file or update BOI reports, even after the new reporting deadlines are established. The Treasury Department further indicated that it plans to issue a proposed rulemaking to narrow the scope of the BOI reporting requirements to foreign reporting companies only. Treasury Department Secretary Scott Bessent emphasized that the latest announcement is part of the Trump administration’s efforts to support American small businesses by removing burdensome regulations, describing the move as a “victory for common sense.”

What does this mean for reporting companies? Although we await more specific guidance and rulemaking from FinCEN, only “foreign reporting companies” (entities formed under the law of a foreign country and registered to do business in any U.S. state or tribal jurisdiction) will be subject to enforcement action for failure to comply with BOI reporting requirements. “Domestic reporting companies” (entities created by the filing of a document with a secretary of state or similar office under the law of a U.S. state or Indian tribe) and U.S. citizens who are beneficial owners will not face enforcement action and will be exempted from such requirements per a future rulemaking. The impact of these recent announcements on the ongoing litigation concerning the CTA or on legislative efforts to delay or repeal the CTA remains uncertain.

Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you have any questions.

To view the full article, click here.

Reprinted with permission from the March 2025 issue of The PIOGA Press. All rights reserved.

Data Centers and Our Region

OnRAMP Magazine

(by Moore Capito and Justine Kasznica)

Data center is fast becoming a household term.

Nearly everyone in the modern world benefits from data centers. As the “backbone” of digital infrastructure, data centers are becoming more and more critical in meeting the demands of the modern digital world. With advances in artificial intelligence (AI) and the increased reliance on computing by people all over the world, demand for data centers is outpacing supply.

We are in a global modern-day gold rush to build data centers. And just as the 49ers faced infrastructure challenges of the day, data center developers are facing a critical infrastructure obstacle: energy.

A data center is a physical facility that houses servers that manage, store, and process data. There are several types of data centers, and while all do not require the same prerequisites to develop, they all require vast amounts of electricity. According to the United States Department of Energy, data centers account for 2 % of the electricity usage in the country consuming 10 to 50 times more electricity per floor space than a typical commercial structure.

The electricity required to power data centers is adding stress on grids that are already pushing the limits. Utilities are having difficulty guaranteeing the level of power required to sustain current demand and meet projected future demand. As a result, developers are evaluating alternative ways to power their projects.

Recently, Microsoft entered into a power purchase agreement with Constellation Energy to reopen Three Mile Island to power their data centers and Amazon Web Services (AWS) purchased Talen Energy’s 1,200 acre data center campus which provides direct power from the Susquehanna Steam Electric Station. Tech companies and developers are no longer waiting on the utilities and are trending toward establishing dedicated power sources. This trend provides energy rich states an incredible opportunity.

Energy companies are actively exploring how to provide direct power ranging from laying additional pipelines to evaluating construction of new power plants dedicated to powering data centers. As evidenced by the recent Constellation Energy and Talen Energy deals, states like West Virginia and Pennsylvania offer an attractive proposition to data center developers – access to vast amounts of energy sources, affordable land and proximity to densely populated areas. Additionally, our two states boast incredible research and development institutions, including Carnegie Mellon University, the global leader in artificial intelligence (AI) research and development. As a result, this region is well positioned to be the next hub for data center development.

Of course, there are challenges. Navigating the regulatory environment, finding suitable property, and identifying partners with available energy supply are just a few. Our firm, Babst Calland, specializes in environmental, energy, and emerging technologies law. As such, we are perfectly situated to connect those pieces because we understand each geographic footprint and tailor legal strategies accordingly, with a deep knowledge of state regulation and local jurisdictions. We provide the cross-disciplinary legal team to address these challenges and support regional and national data center projects.

The demand for data centers is growing and projected to grow even faster. We know the greatest challenge is meeting the electricity requirements. We have an abundant supply of natural resources, affordable land, artificial intelligence research and development, and proximity to densely populated areas. Now is the time to leverage those strengths. If we do so, our region is poised to benefit greatly from this rush for data centers.

With increased demand for complex data center development, whether navigating potential legal challenges related to financing, project siting, land acquisition, zoning, or regulatory compliance, Babst Calland is prepared to address the region’s most pressing concerns.

To view the full article, click here.

Treasury Department Suspends Enforcement of Corporate Transparency Act’s BOI Reporting Requirements

Pittsburgh Technology Council

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

In yet another twist in the ongoing roller coaster ride of Corporate Transparency Act (CTA) compliance, the U.S. Department of the Treasury’s (Treasury Department) Financial Crimes Enforcement Network (FinCEN) has paused enforcement of the CTA’s beneficial ownership information (BOI) reporting requirements. On February 27, 2025, FinCEN issued a press release stating that it “will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports…by the current deadlines.” Instead, FinCEN plans to issue an interim final rule by March 21, 2025 (the previously extended deadline for most reporting companies), which will set new deadlines and prioritize BOI reporting for entities that “pose the most significant law enforcement and national security risks.”

This announcement was rapidly followed by a Treasury Department press release on March 2, 2025 taking things a step further in announcing that U.S. citizens and domestic reporting companies will not be subject to any penalties or fines for failing to file or update BOI reports, even after the new reporting deadlines are established. The Treasury Department further indicated that it plans to issue a proposed rulemaking to narrow the scope of the BOI reporting requirements to foreign reporting companies only. Treasury Department Secretary Scott Bessent emphasized that the latest announcement is part of the Trump administration’s efforts to support American small businesses by removing burdensome regulations, describing the move as a “victory for common sense.”

What does this mean for reporting companies? Although we await more specific guidance and rulemaking from FinCEN, only “foreign reporting companies” (entities formed under the law of a foreign country and registered to do business in any U.S. state or tribal jurisdiction) will be subject to enforcement action for failure to comply with BOI reporting requirements. “Domestic reporting companies” (entities created by the filing of a document with a secretary of state or similar office under the law of a U.S. state or Indian tribe) and U.S. citizens who are beneficial owners will not face enforcement action and will be exempted from such requirements per a future rulemaking. The impact of these recent announcements on the ongoing litigation concerning the CTA or on legislative efforts to delay or repeal the CTA remains uncertain.

Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you have any questions.

To read the full article, click here.

DEP Announces Availability of Draft Technical Guidance for Maintaining Freeboard and Dewatering of Well Development Impoundments for Unconventional Oil and Gas Operations

FNREL Water Law Newsletter

(by Lisa M. Bruderly, Jessica Deyoe and Mackenzie Moyer)

On January 4, 2025, the Pennsylvania Department of Environmental Protection (DEP) announced the availability of draft Technical Guidance for Maintaining Freeboard and Dewatering of Well Development Impoundments for Unconventional Oil and Gas Operations (Draft Guidance). See 55 Pa. Bull. 146 (Jan. 4, 2025).

The purpose of this Draft Guidance is to assist unconventional operators with how to comply with the Pennsylvania Clean Streams Law and associated regulations regarding freeboard maintenance and dewatering of well development impoundments (WDI) through land application of excess water. The Draft Guidance discusses dewatering when there is no liner in the impoundment, such as during construction and restoration phases, as well as when there is a liner in the impoundment during operational and decommissioning phases. It advises how excess water due to precipitation should be managed during construction, operation, decommissioning, and restoration phases of WDIs to prevent WDIs from overflowing and undermining the structural integrity of the WDI.

For example, before a liner is installed, or after a liner is removed, operators may need to dewater the unlined WDI to allow construction or restoration activities to continue. The Draft Guidance advises that operators should confirm and document that no regulated substances have been added or have accumulated in the water and specifies 16 different conditions that should be followed in confirming and documenting such information.

Once a liner is installed and the WDI is filled with surface water, fresh groundwater, or other fluids approved by DEP, maintaining freeboard in the WDI is necessary to ensure its safe operation. The Draft Guidance indicates that the Office of Oil and Gas Management, when necessary, will consider periodic land application from WDIs to maintain freeboard, with a recommendation that a minimum of two feet of freeboard always be maintained in WDIs to prevent the WDI from overflowing. If the Draft Guidance is approved as currently drafted, before proposing any land applications of water from the WDI, operators should sample the water in the WDIs, and the results should not exceed the maximum limits for contaminants found in Appendix A of the Draft Guidance. Appendix A contains maximum contaminant concentrations that were derived from drinking water standards, water quality standards for rivers and streams, and typical values observed in freshwater rivers and streams. Sample results from the accredited laboratory that performed the analysis should be submitted to DEP.

The Draft Guidance discusses that a WDI Dewatering Plan be submitted and approved by DEP before land applying water from a lined WDI that is in operation or being decommissioned. This Dewatering Plan should discuss the narrative requirements, as outlined in Section IV of the Draft Guidance, and include a map and aerial photograph of the facility. The narrative requirements include the history of use of any chemical additions as well as a proposed sample plan or current sample results from the WDIs.

Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado

Environmental Quality Board to Consider Proposed Notification Rules for Unauthorized Spills into Waters of the Commonwealth

The Foundation Mineral and Energy Law Newsletter

Pennsylvania – Mining

(by Joe Reinhart, Sean McGovern and Christina Puhnaty)

In November 2024, the Pennsylvania Department of Environmental Protection (PADEP) submitted to the Pennsylvania Environmental Quality Board (Board) a proposed rule that would establish notification requirements for persons reporting unauthorized discharges to waters of the Commonwealth under 25 Pa. Code § 91.33. Section 91.33 currently requires the person responsible for an unauthorized discharge to immediately notify PADEP if a discharge results in pollution, creates a danger of pollution of the waters of the Commonwealth, or would damage property. PADEP’s proposed rule references 40 C.F.R. § 117.3 to identify a list of reportable substances and quantities that require immediate PADEP notification if discharged into waters of the Commonwealth and outlines five categories of factors for consideration when determining if an unauthorized discharge does not require immediate PADEP notification. Those five categories are:

1. properties of the substance or substances involved;
2. location or locations involved;
3. weather conditions before, during and after the incident;
4. presence and implementation of adequate response plans, procedures or protocols; and
5. duration of the accident or other activity or incident.

PADEP’s preamble to the proposed rule provides that

[i]f any single one of the following factors, or a combination of the factors, can adequately establish that there is no risk of the substance reaching waters of the Commonwealth, no further analysis of the other considerations is necessary to determine that immediate Department notification is not required. This may be the case when a spill occurs into secondary containment or where a spill response plan is used to immediately capture all of a substance with low mobility.

PADEP’s proposed rulemaking further requires a person to maintain documentation regarding a decision not to notify PADEP of an unauthorized discharge and a signed statement attesting to the document’s accuracy must accompany the documentation if it is provided to PADEP at PADEP’s request.

The Board adopted the proposed rule at its November 12, 2024, meeting. The proposed rule will be published in the Pennsylvania Bulletin for a 60-day public comment period.

PADEP Issues Clarification for Blast Site Buffer Area in Noncoal Mining Operations Rules
The Pennsylvania Department of Environmental Protection (PADEP) issued a final rule correcting an inconsistency between the noncoal mining regulations in 25 Pa. Code ch. 77 and the storage, handling, and use of explosives regulations in 25 Pa. Code ch. 211. Noncoal mine operators are required to conduct blasting operations with explosives in compliance with these two chapters. Chapter 211 provides that when explosives are being loaded into drill holes ahead of a blast, the blast site plus a buffer zone of 50 feet around the blast site must be cleared of all persons and equipment except those necessary to prepare for the blast. Prior language at 25 Pa. Code § 77.564(g)(7), however, required “work within a radius of 50 feet of the blast area” to cease, which PADEP determined resulted in “a larger disruption of activities at a noncoal mine than is necessary to ensure mine worker and public safety, which was not intended and is not consistent with the same safety requirements in Chapter 211.” Exec. Summary, Final-Omitted Rulemaking: Blast Site Clarification for Noncoal Mining Operations (Nov. 12, 2024). PADEP has revised section 77.564(g)(7) to resolve this inconsistency by replacing the term “blast area” (defined in 25 Pa. Code § 211.101 as “the area around the blast site that must be cleared and secured to prevent injury to persons and damage to property”) with “blast site” (defined in section 211.101 as “the specific location where the explosives charges are loaded into the blast holes”).

Governor Shapiro Signs Executive Order Adding Pennsylvania Permit Fast Track Program to Administration’s Broader Efforts to Improve Permitting Processes
On November 19, 2024, Governor Josh Shapiro signed Executive Order 2024-04 (EO 2024-04) creating the Pennsylvania Permit Fast Track Program (Program). According to its website, the Program “streamlines permitting for high-impact economic development and infrastructure projects in Pennsylvania that require multiple permits from different Commonwealth agencies.” Commw. of Pa., “PA Permit Fast Track Program,” available here. EO 2024-04 states that the Program’s purpose is to “enhance public awareness, collaboration, accountability, coordination, transparency, and predictability in the Commonwealth’s permitting, licensing, and authorizations processes for critical infrastructure projects and projects delivering significant economic development to Pennsylvanians” through a collaborative process between the government and stakeholders. EO 2024-04, § 1.

EO 2024-04 directs the state Office of Transportation and Opportunity to take certain actions to implement the Program. These include: (1) issuing program guidance, offering training, and providing technical assistance to implement the Program; (2) determining if a project is eligible to participate in the Program; (3) providing project management services via coordination with the Governor’s office, e.g., developing coordinated timelines across relevant agencies; and (4) assisting with the online dashboard to inform the public of progress and timelines for designated projects. Id. § 2. Permits that may be fast-tracked under the Program include Chapter 102 National Pollutant Discharge Elimination System permits for Construction Stormwater and Industrial Stormwater, Chapter 105 Permits for water obstructions and/or encroachments, and Air Quality Permits. See Program website. Guidance and current Program projects are also listed on the Program’s website. Id.

EO 2024-04 is just one of the Shapiro administration’s ongoing efforts to improve Pennsylvania’s permit programs. On the same day Governor Shapiro signed EO 2024-04 the administration announced that the Pennsylvania Department of Environmental Protection (PADEP) had reduced its permit backlog by 75% since November 2023. News Release, PADEP, “Shapiro Administration Reduces DEP Permit Backlog by 75 Percent, Completely Eliminates Backlog for Oil and Gas Permits” (Nov. 19, 2024). PADEP attributes the reduction to technology investment, reviews to identify bottlenecks, and hiring additional staff. Id. PADEP has also created the Streamlining Permits for Economic Expansion and Development (SPEED) Program, which authorizes approved contractors to review applications for certain permits and recommend to PADEP whether the permit should be approved or denied. Bids to become a qualified reviewer were due by December 31, 2024. More information on the Shapiro administration’s permit modernization efforts is available here.

Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado

Environmental Groups’ Petition to Amend Regulations to Increase Setbacks from Oil and Gas Wells Clears Initial Regulatory Requirements

The Foundation Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman and Matthew C. Wood)

On November 21, 2024, the Pennsylvania Department of Environmental Protection (PADEP) notified the Clean Air Council (CAC) and Environmental Integrity Project (EIP) that the agency had reviewed their rulemaking petition requesting amendments to 25 Pa. Code Chapter 78a and determined that it complies with the petition policy of the Environmental Quality Board (EQB). Letter from PADEP (Nov. 21, 2024). Specifically, in October 2024, CAC and EIP submitted a rulemaking petition to increase the minimum setback distances from unconventional oil and gas wells to 3,281 feet from any building and drinking water well; 5,280 feet from any building serving vulnerable populations, e.g., schools, daycare centers, and hospitals; and 750 feet from any surface water of the Commonwealth. See Clean Air Council and Environmental Integrity Project Petition (Oct. 22, 2024) (Petition). Current setback requirements include 500 feet from buildings and 1,000 feet from water supply extraction points.

In their petition, CAC and EIP cite the 2020 43rd Statewide Investigating Grand Jury Report (43rd Grand Jury Report) that concluded, among other things, that the Commonwealth “take action to expand the no-drill zone between fracking and homes from 500 to 2,500 feet and to adopt a more protective no-drill zone of 5,000 feet for schools and hospitals.” Petition at 2 (citing the 43rd Grand Jury Report at 93–94). They also allege that the people living near unconventional oil and gas wells experience negative health consequences, that the wells release dangerous pollution, and the wells contaminate surface and groundwater, and for these reasons, the EQB should increase the minimum setbacks to protect public health and public resources. See generally id. Governor Shapiro has subsequently reported implementing other recommendations from the 43rd Grand Jury Report that he oversaw as then-Attorney General. See, e.g., Press Release, PADEP, “Shapiro Administration, DEP Requires All Fracking Companies to Be More Transparent About Chemicals Used in Drilling” (Jan. 26, 2024).

The petition must clear a number of regulatory hurdles prior to any proposed rulemaking to amend the relevant regulations. Initially, EQB will review the petition at its next regularly scheduled meeting, where CAC and EIP will have an opportunity to offer a presentation on why EQB should accept the petition and PADEP will make a recommendation to EQB whether to accept the petition. 25 Pa. Code § 23.4. EQB can refuse to accept the petition for certain reasons, enumerated in 25 Pa. Code § 23.5, but if EQB accepts the petition, notice of acceptance will be published in the Pennsylvania Bulletin within 30 days. Id. § 23.6. In addition, PADEP has 60 days to prepare a report evaluating the petition, including a recommendation on whether EQB should approve the action requested in the petition; if changing a regulation, PADEP must identify the anticipated date EQB will consider a proposed rulemaking. Id. PADEP must send the report to CAC and EIP, who may submit a written response within 30 days, id. § 23.7, and the report and any CAC and EIP comments will inform PADEP’s ultimate recommendation, id. § 23.8.

If PADEP recommends regulatory amendments, the agency will prepare a proposed rulemaking within six months of sending the report to CAC and EIP; if it does not recommend amendments, PADEP will make a presentation at to EQB at “the first meeting occurring at least 45 days after [PADEP] mailed its report to the petitioner.” Id. After cancelling its December 2024 and February 2025 meetings, EQB’s next meeting is set for March 11, 2025. Meeting materials will be posted to PADEP’s website.

Shapiro Administration Launches Online Resource to Streamline Access to and Provide Information About State Grant Opportunities
On October 30, 2024, the Shapiro administration announced that Secretary for Administration Neil Weaver and the Commonwealth Office of Digital Experience (CODE PA) had launched a new tool to assist stakeholders in learning more about and applying for grants under the more than 300 state grant programs. Press Release, Pa. Office of Admin., “Shapiro Administration Launches New One-Stop Grant Search Tool to Streamline Pennsylvanians’ Access to Government Funding Opportunities” (Oct. 30, 2024). According to the administration, the “Discover State Grants” website is intended to be a comprehensive resource that allows prospective applicants to sort and filter information specific to their needs and will provide links and important information about each grant program to assist in the application process. Id.

The administration said it is working to increase participation in grant programs and “level the playing field for state and federal dollars to benefit communities, small businesses, schools, non-profits, and many others across Pennsylvania.” Id. The website lists numerous grant categories that cover a wide swathe of subcategories, including grants specifically related to the oil and gas industry. For example, grants recently or currently offered under the energy category include the Methane Emissions Reduction Program General Assistance Grant (for operators of 11 or more wells), Methane Emissions Reduction Program Small Operator Assistance Grant (for operators of 10 or fewer wells), and Orphan Oil and Gas Well Plugging Grant Program (for qualified well pluggers). Other categories include Environmental and Water, Law, Justice, and Legal Services, and Transportation. See Commw. of Pa., “Discover State Grants,” here.

Per the Press Release, CODE PA will continue to work on improving the Electronic Single Application, “a shared platform that manages the application and administration processes for grants by multiple state agencies,” and technical challenges identified by grant applicants. More information about CODE PA and its ongoing work on Discover State Grants and other initiatives is available here.

PADEP Releases Guidance and Additional Information on Industrial Decarbonization Grant Program
In November 2024, the Pennsylvania Department of Environmental Protection (PADEP) released guidance regarding its Reducing Industrial Sector Emissions in Pennsylvania (RISE PA) program. RISE PA is an industrial decarbonization grant program funded by a $396-million award through the 2022 Inflation Reduction Act’s Climate Pollution Reduction Grants. The grants seek to fund activities that will reduce greenhouse gas (GHG) emissions from the industrial sector by over 8 million metric tons by 2050. Eligible projects must reduce GHG emissions through industrial electrification, energy efficiency technologies, industrial process technologies, fugitive emission reduction technologies, switching to low-carbon fuels, onsite renewable energy technologies, carbon capture, utilization, and storage technologies, or other technologies to qualify (as determined by RISE PA). PADEP is offering grants for Small-, Medium-, and Large-scale decarbonization projects. The Small-scale award track will only be available to small- and medium-sized manufacturers (500 or fewer employees at the plant site). There is no minimum GHG emissions reduction threshold for Small-scale projects, but the amount of GHG emissions reduction will be considered during the evaluation process. For Medium- and Large-scale grants, applicants must achieve at least a 20% annual facility-wide reduction in GHG emissions per project. Small-scale projects will be eligible for up to $40 million, Medium-scale projects up to $100 million, and Large-scale projects up to $220 million. PADEP plans to begin accepting applications in early 2025, with application review and selection anticipated to begin in the middle of the year.

The future of the program, however, is now uncertain. On the first day of his second term in office, President Trump signed Executive Order No. 14,154, “Unleashing American Energy,” 90 Fed. Reg. 8353 (Jan. 20, 2025), which, among many other things, directed federal agencies to pause clean energy and climate-related funding under the Inflation Reduction Act. While the funding for RISE PA had been allocated to Pennsylvania for the program, the funding has not yet been disbursed.

In a Q&A Webinar on January 24, 2025, PADEP addressed the uncertainty. PADEP noted that it has a fully executed grant award agreement in place with the U.S. Environmental Protection Agency, and that the award cannot lawfully be terminated as long as PADEP maintains compliance with the terms and conditions of the award. While PADEP believes that pausing of disbursements required by the executive order does not directly mention the Climate Pollution Grant Program, the agency admits that there is still uncertainty regarding its receipt of the disbursements. Despite the uncertainty, however, PADEP is moving forward with implementing the program.

Copyright © 2025, The Foundation for Natural Resources and Energy Law, Westminster, Colorado

PFAS: A New Four-Letter Word in Environmental Law? Updates from 2024 and Predictions for 2025

The Drill Bit Magazine

(by Sloane Wildman, Joseph Schaeffer and Jessica Deyoe)

The final year of the Biden administration saw several significant developments related to the regulation of per- and polyfluoroalkyl substances, more commonly known as PFAS. These developments included the U.S. Environmental Protection Agency’s designation of the two most common PFAS compounds as hazardous substances under federal cleanup laws and its limitation of six PFAS compounds under federal drinking water regulations, among others. The past year also saw a growing number of PFAS-related lawsuits, which are currently in various stages of litigation. What could happen to all these developments in 2025? Can the Trump administration change these rules and policies? What about the numerous PFAS related lawsuits that have been filed in the past year?  This update takes a look at some of the more significant PFAS-related developments from the past year and considers what might happen in 2025 and beyond.

What are PFAS and what were the prior administration’s PFAS priorities?

The term “PFAS” encompasses thousands of manmade chemicals.  PFAS compounds have been widely used for decades in various applications, including manufacturing water-, stain-, and heat-resistant consumer products, e.g., waterproof clothing and food packaging, and as ingredients in aqueous film forming foams (known as AFFF) used to extinguish certain kinds of chemical fires. There is research indicating that exposure to certain PFAS, which are prevalent and persistent in the environment, may cause various health-related impacts. In an effort to address the impacts related to PFAS, in 2021, the Biden administration published a “PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024” identifying a number of regulatory priorities that the administration planned to take during its four-year term. The Strategic Roadmap and annual progress reports are available here.

What were some of the most significant federal regulatory developments in 2024?

Two of EPA’s more significant regulatory actions in 2024 occurred almost back-to-back in April with its designation of two PFAS compounds as hazardous substances under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and its rule imposing regulatory limits on six PFAS compounds under the Safe Drinking Water Act (SDWA).  We reported on both of these developments in updates available here and here.

Specifically, in April 2024, the EPA published a final rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), and their salts and structural isomers, as “hazardous substances” under CERCLA, available here. As we reported previously, EPA’s designation of PFOA and PFOS as CERCLA hazardous substances was unprecedented and controversial because it was the first time the Agency used its statutory authority under CERCLA to designate a hazardous substance.  Until that point, hazardous substances under CERCLA had only been defined by reference to other statutes (e.g., the Clean Water Act and the Resource Conservation and Recovery Act).  Among other things, the rule requires parties to report unpermitted releases of PFOA and/or PFOS at or above the applicable “reportable quantity” (one pound or more within a 24-hour period) to federal, state, and local authorities.  It also imposes certain obligations on federal agencies when selling and transferring federally owned real property. And most significantly, the rule provides the federal government with additional authority under CERCLA to address PFOA/PFOS contamination in the environment, allows private parties who conduct cleanups consistent with CERCLA’s National Contingency Plan to seek to recover PFAS cleanup costs from other potentially responsible parties (PRPs), and potentially affects closed sites with existing remedies.  At the same time EPA published the final CERCLA rule, it issued a policy memorandum, “PFAS Enforcement Discretion and Settlement Policy Under CERCLA” summarizing the Agency’s intent to use its discretion to not “pursue entities where equitable factors do not support seeking response actions or costs under CERCLA . . . .”  and generally focus on so-called “major PRPs” – parties who, in EPA’s view, “have played a significant role in releasing or exacerbating the spread of PFAS into the environment, such as those who have manufactured PFAS or used PFAS in the manufacturing process, and other industrial parties.” Some industries that would be protected under this Policy, including publicly owned treatment works and publicly owned/operated municipal solid waste landfills, expressed concern that the policy provides only discretionary rather than mandatory protection and that it does not prevent other PRPs from pursuing claims against them.

Also in April 2024, EPA published a National Primary Drinking Water Regulation establishing the first-ever national enforceable drinking water standards for six PFAS under the Safe Drinking Water Act (SDWA), available here. The rule sets enforceable Maximum Contaminant Levels (MCLs) and non-enforceable health-based Maximum Contaminant Level Goals (MCLGs) for PFOA and PFOS, and four additional PFAS compounds – perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), and perfluorohexane sulfonic acid (PFHxS).  EPA set MCLs (the maximum concentrations allowed in drinking water that can be delivered to the users of a public water system) at 4.0 parts per trillion (ppt) for PFOA and PFOS and 10 ppt for PFNA, PFHxS and HFPO-DA. In addition, EPA set MCLGs at 0 parts per ppt for PFOA and PFOS and at 10 ppt (same as the enforceable MCL) for PFNA, PFHxS and HFPO-DA. Under the rule, public water systems are given until 2027 to complete initial monitoring of each of the six PFAS, followed by ongoing compliance monitoring, and until 2029 to implement solutions to reduce PFAS where MCLs are exceeded. After those five years, public water systems that exceed one or more of the MCLs must take action to reduce PFAS levels and provide notice to the public of the violation.

In 2024, EPA proposed other rules related to PFAS that have not yet been finalized. For example, in February 2024, EPA published two proposed rules to address PFAS and other emerging contaminants under the authority of the Resource Conservation and Recovery Act (RCRA). First, EPA proposed to add nine PFAS (including their salts and structural isomers) to the list of “hazardous constituents” in Appendix VIII of 40 C.F.R. Part 261 that would need to be considered in facility assessments and, where necessary, considered in any further investigation and cleanup through the corrective action. Second, EPA also proposed to clarify, by regulation, that emerging contaminants – including PFAS – can be addressed under RCRA’s Corrective Action Program. For more information about the proposed RCRA rules, see our previous update, available here.

What were some of the major developments in PFAS litigation?

Regulatory developments directly influenced litigation developments. While the regulated community pushed back, plaintiffs’ attorneys relied on the new regulations to identify new targets for litigation and prove the elements of their cases. Overall, the prior year signaled three major developments in PFAS litigation.

First, a variety of stakeholders pushed back at the Biden administration’s efforts to regulate PFAS. In American Water Works Association v. U.S. Environmental Protection Agency, No. 24-1188 (D.C. Cir. 2024), a coalition of industry and major water utilities challenged the EPA’s regulation of PFAS under the SDWA. They argue that the Agency set MCLs for six PFAS beyond what are technologically and economically feasible and, further, adopted an unprecedented “hazard index” approach to regulating two additional PFAS. And in Chamber of Commerce v. U.S. Environmental Protection Agency, No. 24-1193 (D.C. Cir. 2024), industry challenged the EPA’s designation of two PFAS as hazardous substances under CERCLA. Emphasizing that the Agency has never before invoked its statutory authority to directly designate hazardous substances under CERCLA, they argue that the Agency conducted an improper “substantial danger” analysis and failed to properly consider the costs and consequences of its regulation. Barring deregulatory action from the Trump administration, both cases are expected to be decided in 2025 and will have major implications for whether and how the EPA may regulate PFAS going forward.

Second, PFAS manufacturers cemented a significant victory when the U.S. Court of Appeals for the Sixth Circuit declined to revisit its opinion in Hardwick v. 3M Co., where it ruled that the district court erred by allowing a “class comprising every person residing in the State of Ohio” to bring claims against ten manufacturers of PFAS for allegedly contaminating their blood with PFAS. Hardwick v. 3M Co., No. 22-3765, at *2 (6th Cir. Nov. 27, 2023). Holding that the lead plaintiff lacked standing, the Court noted that he “does not know what companies manufactured the particular chemicals in his blood stream; nor does he know, or indeed have much idea, whether those chemicals might someday make him sick; nor, as a result of those chemicals, does he have any sickness or symptoms now.” Id. at *1. Given the ubiquity of PFAS in the environment, and the numerous potential sources of exposure, Hardwick’s legacy may be to raise the bar for standing, causation, and harm in cases alleging PFAS exposure.

And, third, enterprising plaintiffs’ attorneys avoided the standing issues raised in Hardwick by bringing false advertising claims against manufacturers of products alleged to contain PFAS. Relying frequently on state consumer protection laws, the plaintiffs in these cases allege that product manufacturers misled consumers and delivered products that are worth less than they would have been if the presence of PFAS had been disclosed. In one such case filed in late 2024, for instance, the plaintiff alleges that Samsung Electronics failed to disclose the presence of PFAS in bands used with its smart watches, thereby “causing [plaintiff] to overpay for Products” and “enjoy[ing] an unfair competitive advantage, receiving millions of dollars from consumers in ill-gotten proceeds while putting the health and welfare of millions of consumers and their families at risk ….” Class Action Complaint at ¶ 8, Gonzalez v. Samsung Electronics Am., Inc., No. 2:24-cv-11234 (C.D. Cal. filed Dec. 31, 2024). Expect these lawsuits to proliferate as government reporting obligations and third-party investigations lead to the discovery of PFAS in products where it was previously unknown to have been used.

What can happen to these rules and cases under the new administration? 

On the regulatory front, the Trump administration is expected to deregulate at the federal level and take a less active approach to PFAS than the Biden administration. One major tool that can be used to rescind regulations is the Congressional Review Act (CRA). The first Trump administration liberally used the CRA to rescind regulations issued in the final days of the then-outgoing Obama administration. A “lookback” provision in the CRA allows a new Congress to review and overturn regulations issued during the final sixty legislative days of the prior session – for purposes of the incoming Trump administration, the “lookback” period of the CRA is August 2024. The Biden administration intentionally finalized many regulations, including the PFAS MCLs and designation of PFOA and PFOS as hazardous substances under CERCLA, prior to August 2024 to stay out of reach of the CRA.

Though these PFAS-related regulations are out of reach of the CRA “lookback period” for rescinding regulations, there are other tools for doing so. EPA can amend or overturn a rule through ordinary notice and comment rulemaking under the Administrative Procedure Act. The notice-and-comment rulemaking requires that EPA develop a legal record justifying the proposed change and undergo a lengthy public notice process on the proposed regulatory/deregulatory action. Although it would be time-consuming, the EPA can use this option to amend or overturn the designation of PFOA and PFOS as hazardous substances under CERCLA as well as the PFAS MCLs. Of course, the future of these rules could also be determined by the ongoing litigation discussed above.

Another tool that already has been used by the new Trump administration to direct regulatory action in numerous substantive areas is the issuance of executive orders (EOs).  On the first day of his second term, President Trump signed several EOs affecting environmental policy established by the Biden administration, including an EO entitled “Initial Rescissions of Harmful Executive Orders and Actions,” which expressly rescinds a number of Biden administration EOs, including those addressing climate change and environmental justice. Proposed rules and guidance documents, such as the RCRA proposal discussed above, are now subject to President Trump’s EO entitled “Regulatory Freeze Pending Review” which requires that (1) no federal agency propose or issue any rule without review and approval of an agency head appointed or designated by President Trump, and (2) any rule submitted to the Federal Register that is not yet published must be withdrawn pending review. It is also possible that EOs will be issued to withdraw specific guidance documents inconsistent with the new administration’s goals and policies. For example, the EPA’s PFAS Strategic Roadmap could be shelved or rescinded.

These anticipated Trump administration regulatory actions could impact the trajectory of litigation challenging the Safe Drinking Water Act and CERCLA rules, especially if the EPA signals that it intends to withdraw or modify those actions. The private civil litigation, however, is expected to continue unabated.

As the new administration is expected to significantly alter the federal regulatory efforts to address PFAS across multiple program areas, potentially impacting both existing and yet-to-be-filed litigation, Babst Calland attorneys will track these developments and are available to assist you with these matters.  For more information on the federal regulatory and litigation developments discussed in this update or related matters, please contact Sloane Wildman at (202) 853-3457 or swildman@babstcalland.com, Joseph Schaeffer at (412) 394-5499 or jschaeffer@babstcalland.com, Jessica Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com or any of our other environmental attorneys.  For additional resources and more information on other PFAS developments, please visit Babst Calland’s PFAS Perspectives page, here.