Articles Archives

BOI is Back: Corporate Transparency Act Reporting Requirements Reinstated

Pittsburgh Technology Council

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

Amid a series of ongoing legal battles, the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) have been reinstated. In light of the U.S. Supreme Court’s January 23, 2025 order in McHenry v. Texas Top Cop Shop Inc., which granted the government’s request for a stay of a nationwide injunction in a separate case challenging the BOI reporting requirements, on February 17, 2025, the U.S. District Court for the Eastern District of Texas granted the government’s motion to stay the preliminary injunction issued in Smith v. United States Department of the Treasury. As a result, U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is no longer prohibited from enforcing the CTA’s BOI reporting requirements, and reporting companies’ compliance obligations have resumed. This ruling is pending an appeal to the U.S. Court of Appeals for the Fifth Circuit.

FinCEN has announced a 30-day deadline extension for reporting companies. The new deadline for the majority of reporting companies to file an initial, updated, and/or corrected BOI report is March 21, 2025. FinCEN has also indicated that it will assess the need for further modifications to the reporting deadlines during this 30-day extension period, with a focus on lower-risk entities.

In parallel, BOI reporting requirements are receiving legislative attention. The Protect Small Business from Excessive Paperwork Act of 2025 unanimously passed the U.S. House of Representatives and a companion bill is awaiting action in the Senate. If enacted, reporting companies formed before January 1, 2025 will have until January 1, 2026 to comply with the BOI reporting requirements.

Reporting companies must ensure they are prepared to meet the March 21, 2025 filing deadline. While further adjustments may be forthcoming, companies are advised to remain proactive in their compliance efforts.

Babst Calland will continue to monitor regulatory and judicial updates. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you would like Babst Calland to assist you with your company’s compliance obligations. Babst Calland will only provide advice related to BOI reporting compliance when explicitly requested to do so. We look forward to servicing your needs on this developing area of the law.

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Employer Guidance for Workplace Interactions with ICE

PIOGA Press

(by Steve Antonelli and Alex Farone)

The new presidential administration’s efforts to prioritize immigration law enforcement has resulted in increased activity by U.S. Immigration and Customs Enforcement (ICE) and an uptick of questions from employers about how to handle ICE investigations. This Alert provides guidance to employers for potential interactions with or inspections by ICE at the workplace, including preliminary actions, suggested steps during an ICE visit (whether announced or unannounced), and follow-up recommendations.

There is a common misconception that only employers that specifically seek or intentionally hire unauthorized workers are at risk of a visit from ICE. However, there are multiple avenues by which a generally law-abiding employer may find itself unknowingly employing an unauthorized worker. For example, an individual may have presented the employer with fraudulent documentation for the Form I-9 employment eligibility verification, and the employer may not have realized the document was inauthentic. Or an employer may have lawfully hired a noncitizen with proper employment paperwork but later may forget to reverify the worker’s Form I-9; in this instance, the individual’s work authorization could lapse or expire without the employer noticing.

To the extent an employer’s office or work facility is private property, employers have certain legal rights when faced with an ICE arrival. Employers should become familiar with their rights and best practices in the event of an ICE visit to minimize the risk of inordinate disruption to the workforce or operations, or the unauthorized seizure of company property and information. Employers should seek to balance (1) lawful compliance and cooperation with (2) private property rights and a general duty of care for employees.

Babst Calland recognizes that the topics of immigration enforcement and undocumented persons have been politicized. We therefore offer this guidance objectively, without advocating for any particular position beyond what is legally required.

Recommended Precautionary Actions Before ICE Arrives

Designate Public and Private Spaces
ICE agents can only be present in areas open to the public (such as parking lots, reception areas, lobbies, etc.) without a judicial warrant or specific employer consent. Therefore, employers should clearly identify the boundaries of non-public areas with signs such as “Private” or “Non-Public Area” to avoid ambiguity. Once signs are posted, management should explain these “new” boundaries or designations to the workforce, with special emphasis on its explanation to security guards, receptionists, and other public-facing employees.

Understand the Types of Documents ICE Could Present
With a few exceptions, ICE generally cannot lawfully search persons or private spaces, or seize persons or private property, without certain documentation.^[1] As explained below, employers should ensure that key personnel are trained to identify and/or differentiate these documents.A judicial warrant provides the broadest search and/or seizure rights. A judicial warrant can be either a search warrant or an arrest warrant. A judicial warrant must be signed and dated by a judge or magistrate and it must describe with particularity the place to be searched, and/or the person or items to be seized. A judicial warrant will have the name of a court at the top of the document. Only a valid judicial warrant permits an ICE agent to enter private/non-public spaces at the workplace, and only a valid judicial warrant requires cooperation. Employers must strictly comply with judicial warrants, but it is not required to take any action to assist ICE beyond what is reasonably required by the judicial warrant. For example, an employer can be required to move an employee identified in the warrant into a contained area for questioning, but it cannot be required to sort employees into groups by citizenship status or nationality for an inspection by ICE.An administrative warrant is much more limited than a judicial warrant. An administrative warrant is signed by an immigration officer, and it allows ICE to arrest noncitizens suspected of committing immigration violations. An administrative warrant is typically identified as a document issued by the “Department of Homeland Security” and is usually on a Form I-200 or I-205. Notably, an administrative warrant does not give an ICE agent the right to enter private/non-public spaces at the facility unless the employer consents.^[2] Additionally, when faced with an administrative warrant, an employer is not required to tell ICE whether the employee named in the warrant is currently working or to bring the employee to the agent (or vice versa).Alternatively, ICE could present an employer with a subpoena, a notice of inspection, or a notice to appear. A subpoena is a written request for information or documents that provides a certain time limit to respond and does not require immediate compliance. Like a subpoena, a notice of inspection is a document informing an employer that it must produce employees’ I-9 Forms for an audit^[3] within 3 business days. A notice to appear is a document directed to an individual instructing them to appear before an immigration judge.

Assign an On-Site Response Coordinator
Employers should assign a particular managerial or supervisory employee at each facility to be the on-site response coordinator who can serve as a single point of contact with ICE in the event that ICE arrives, as well as a back-up coordinator if the designated worker is absent or unavailable. These personnel should be trained to differentiate between the above-described documents, and to understand and be aligned with the employer’s policy for lawful compliance with visits from ICE.

Review Applicable Collective Bargaining Agreements
For any locations that have a unionized workforce, employers should review the applicable collective bargaining agreements (CBAs) proactively to determine whether they require any additional conduct by the employer in the event of an ICE visit. For example, some CBAs might include provisions that give the union the right to be present during any ICE inspections or on-site employee interviews, or require that the employer notify all union employees when ICE agents arrive. Any additional CBA requirements should be implemented with the below recommended actions for facilities with unionized employees.

Recommended Actions If ICE Arrives

*All recommended actions below should be conducted in a calm, professional, and polite manner to prevent escalation of the interaction.*

Notify key personnel – The first steps are to immediately notify the facility supervisor, the on-site response coordinator(s), and legal counsel. Ask the agents to wait in a specific space or designated location until either a supervisor, on-site response coordinator, or legal counsel arrives to prevent disruption.

Verify agent identity – The response coordinator should clarify whether the agents are police officers or ICE agents and request their names and badge numbers.

Verify agent purpose – The response coordinator should ask the agents about the nature of their visit. Common purposes include:

- Initiation of Form I-9 Audit – If ICE intends to audit a company’s Form I-9 compliance, ICE must first provide the employer with a Notice of Inspection. These notices give employers at least 3 business days to produce the requested I-9 Forms.^[4] Additional productions and procedures will ensue if ICE determines that there are any Form I-9 errors, suspicious documents, or discrepancies, and employers should consult with an immigration attorney for further guidance if this occurs.
- Facility Search or “Raid” – ICE can arrive without warning to investigate an employer.
- Detention of specific person(s) – ICE can arrive without warning to detain specific person(s).
- Fraud Detection and National Security (FDNS) visit – this is an unannounced visit related to an employer’s recent immigration petition(s) where ICE agents conduct compliance reviews to ensure the employer is complying with the terms and conditions of the petition(s). This guidance does not address such visits, as FDNS visits are only relevant for employers who have had an H-1B or L-1 intracompany transfer petition(s) adjudicated.

Verify documentation – The response coordinator should ask to see a warrant.

- If a judicial warrant is provided, employers should analyze it to determine its scope and ask for a copy of it. Employers are not required to provide access to any area not specified in the warrant.
  - If a judicial warrant is not provided, the response coordinator can (but is not required to) state: “I’m sorry, but this is private property. It is company policy not to provide consent or permission to enter private or non-public areas of the facility or to access our information or records without a valid warrant signed by a judge.”
  - If there is an issue with the judicial warrant (i.e. it is not signed, not dated, is missing the correct workplace address, or does not sufficiently describe the premises to be searched or items to be searched for), an employer can accept the warrant but should note its objection so that counsel can challenge the search or seizure later if sufficient grounds exist. To be clear, in this instance, the search or seizure will still occur.
  - Ask to be provided with a list of any items seized during the search.
- If an administrative warrant is provided, the response coordinator can (but is not required to) state: “I’m sorry, but this is private property. It is company policy not to provide consent or permission to enter private or non-public areas of the facility or to access our information or records without a valid warrant signed by a judge.”

Use independent judgment if considering voluntary consent.

- Employers can decide to voluntarily consent to a search or seizure of employer property by ICE without a sufficient warrant. Moreover, ICE agents are permitted to make statements intended to encourage voluntary consent or to imply that giving consent is required even in circumstances where it is not (such as when the agents do not possess a judicial warrant).
- If considering consenting to a search or seizure without a sufficient warrant, employers should use independent judgment to evaluate the totality of the circumstances in addition to any statements made by the agents.
- Please note that non-management or non-supervisory employees do not have the authority to act on behalf of an employer to give such consent.

Be respectful, but clear, if exercising the company’s rights.

- Never attempt to block an ICE agent’s movements. If an employer believes ICE is exceeding its authority, the response coordinator can voice the employer’s objection and state that the company does not consent, but they should not argue and never physically interfere with the agent’s actions.
- If agents attempt to seize something that is critical to company operations (such as a computer, proprietary information, or an important file), explain why the item is critical to the company’s operations, request a more limited or targeted seizure, and/or ask to make a copy of the information before it is seized.
- Employers can notify employees that they have the right to remain silent, but employers cannot instruct employees not to respond to questions. Company representatives should not be confrontational, obstructive, or evasive.
- Employers and employees alike have the right to record an encounter with ICE. Consider recording interactions with ICE agents to clearly document statements and actions. Efforts to record an encounter should never interfere with the agents’ activities.

Recommended Actions After ICE Visit

Document as much as possible – The response coordinator should interview employees and make a record of the details of the event in an incident report. The report should include details such as the number of agents, a description of what they were wearing, whether the agents kept anyone from moving around the workplace freely, a detailed list of the locations of any search (including smaller spaces such as closed drawers), a detailed description of any property seized, a detailed list of statements made by the employer declining consent or asserting legal rights, and any statements made by the agents.

Follow-up notifications – employers should call legal counsel immediately to discuss next steps. If the workplace is unionized, employers should notify the union that ICE visited the workplace.

Engage and encourage open communication with and among the workforce – Employers should be open and honest with the workforce about what occurred. In addition to individual instances of absenteeism, fear of action by ICE may lead to employees discussing their concerns or voicing disagreement with the employer’s response (or potential response) to ICE. Employers must be aware that certain employee collective action (discussions, protests, other concerted activity, etc.) may be protected under the National Labor Relations Act if it relates to the terms and conditions of employment, even for non-union workers or those who may not be authorized to work in the U.S.

Provide reasonable leave – If ICE detains a worker, consider providing the worker with an unpaid leave of absence during and in the immediate aftermath of the detention. While not legally required, an employer could consider handling the matter in a manner similar to the leave that might be provided in the event of a sudden medical issue or other unexpected absence. Failure to provide such comparable leave could give rise to a claim for national origin discrimination. Employers are never, however, required to provide employees with indefinite leaves of absence.

If you have any questions about additional employer guidance concerning workplace investigations by ICE or any other federal or state agency, please contact Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com or Stephen A. Antonelli at (412) 394-5668 or santonelli@babstcalland.com.

To view the full article, click here.

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^[1]While police officers are allowed to search and arrest without a warrant in the event of different types of emergencies such as while in “hot pursuit” of a criminal suspect, ICE agents are not police officers (regardless of whether their uniforms say “Police”). ICE agents may not search and seize without a warrant if they are merely in “hot pursuit” of a suspected undocumented person. Under applicable law, this type of warrantless search or seizure is only permitted if the agent is in “hot pursuit” of an individual who “poses a public safety threat” or who the agent personally observed crossing the border.

^[2]One key exception is the “in plain view” principle. With or without a warrant, ICE agents are always allowed to look at anything in “plain view,” including computer screens or papers sitting out on desks, or listen to audible conversations that can be overheard without a listening device. If what the agent sees or hears in “plain view” gives them probable cause that unlawful activity is, has, or will occur, they can search the relevant private area and seize relevant items without a warrant.

^[3] The Form I-9 is a document used to verify the identity and employment eligibility of individuals within the United States. Federal law requires employers to create and maintain I-9 Forms and supporting documentation for all employees.

^[4] Employers are cautioned against voluntarily consenting to a search or seizure of the Forms I-9 if ICE agents do not have a judicial warrant for this information or if the 3-day period after receiving a Notice of Inspection has not yet expired. The Form I-9 rules are nuanced and strict, and it is very common for employers to unknowingly violate a rule due to an unintended error on the forms or in record-keeping. Employers can be subject to monetary fines for substantive violations and any uncorrected technical violations regardless of whether the violation was intentional.

Trump Administration Day One Executive Orders: A Transformation of American Energy and Environmental Policies

PIOGA Press

(by Ben Clapp, Gary Steinbauer, Mackenzie Moyer, Christina Puhnaty and Alexandra Graf)

On January 20, 2025, the Trump administration issued a suite of Executive Orders and memoranda signaling a dramatic shift in American energy and environmental policy. Collectively these actions, among a historically large array of “Day One” orders issued by the administration, aim to stimulate domestic energy production (with a focus on oil, natural gas, coal, hydropower, biofuels, critical minerals, and nuclear energy resources), expand energy transmission infrastructure, enlarge refining capacity, and streamline environmental permitting and review requirements for energy production and infrastructure projects while canceling Biden-era domestic climate policies, disengaging from international climate agreements, and curtailing leasing and permitting for offshore and onshore wind energy projects.

In conjunction with these Executive Orders and memoranda, the Trump administration carried out a sweeping revocation of Biden-era Executive Orders, including orders relating to energy policy and environmental regulation, climate initiatives, promoting electric vehicles, environmental justice, the withdrawal of areas of the Outer Continental Shelf from oil and gas leasing, and the implementation of the Inflation Reduction Act and Infrastructure Investment and Jobs Act.

President Trump also issued a Day One memorandum implementing a regulatory freeze requiring agencies to refrain from proposing or issuing any new rule and withdraw rules that have been finalized but not yet been published in the Federal Register, until those rules are approved by the new agency head. The memorandum also directs agency heads to consider postponing for 60 days the effective date of any rules that have been published or issued but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise. Some Biden-era rules relating to energy and the environment appear to be subject to this freeze, however, the overall impact of the freeze appears to be limited.

More detailed reviews of these actions are available at the links below.

Additional actions by President Trump on energy and environmental issues are expected, and legal challenges are practically certain as federal agencies take concrete steps to implement these directives. We are tracking these matters closely and will issue future Alerts as significant developments arise. As always, Babst Calland attorneys are available to provide guidance on how these actions affect your business. For more information on the actions discussed in these Alerts or related matters, please contact Ben Clapp at (202) 853-3488 or bclapp@babstcalland.com, Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, or your Babst Calland client relationship attorney.

To view the full article, click here.

Pennsylvania Right-to-Know Law Update: The Death of the Attorney-Client Privilege Log?

The Legal Intelligencer

(by Michael Korns and Anna Hosack)

In a recent case, the Pennsylvania Commonwealth Court found that the use of an attestation may negate the need for a full privilege log when responding to a Right-to-Know Law, 65 P.S. §§ 67.701 et seq., (“RTKL”) request where there are redacted privileged documents and an attestation providing context for the privilege. In Bergere v. Pennsylvania Department of Community and Economic Development, No. 269-CD-2024 (Pa. Cmwlth. Jan. 30, 2025) the Commonwealth Court reviewed an Office of Open Records (“OOR”) Final Determination relating to a RTKL request filed by the requester with the Department of Community and Economic Development (the “Department”) which sought records relating to communications and post decisional deliberations between board members and staff members regarding a Board of Property decision in favor of the applicant on April 24, 2023 and its subsequent vacation a day later on April 25, 2023.

The Department’s Open Records Officer (“ORO”) provided 163 pages of records in response to the request with a certification attesting that a good faith search has occurred in addition to the following language:

Certain emails included with the responsive records were redacted per the attorney-client privilege.
As to the claim of attorney-client privilege in the responsive records:
(a) the asserted holders of the attorney-client privilege, namely the Board of Property and its administrators, are clients of legal counsel, Thomas Blackburn, Esquire;
(b) the people to whom the referenced email communications were made are (1) Thomas Blackburn, Esquire, (2) the Board Members of the Board of Property; and (3) administrators of the Board of Property;
(c) the referenced email communications relate to facts of which legal counsel was informed by his client, without the presence of strangers, for the purpose of securing assistance in a legal matter (specifically, the drafting and finalization of an Order); and
(d) the attorney-client privilege has been claimed and not waived by the client.

Upon receipt of the records and certification, the requester appealed to the OOR seeking to have the redactions removed. The OOR’s final determination denied the requester’s appeal finding that the evidence was undisputed that Blackburn provides legal representation to the Board of Property, its members, and its administrators and that the communications in question “were for the purpose of obtaining legal advice and guidance concerning the drafting and finalization” of a Board adjudication. Furthermore, the requester offered no evidence that the emails were shared with third parties; that the legal advice was for the purpose of committing a crime or tort; or that the asserted attorney-client privilege had been waived. The OOR reviewed the subject matter lines in the redacted emails and the ORO’s certification and attestation, and inferred “that the redacted communications consist of discussions between legal counsel and Board members/administrators that, more likely than not, involve the solicitation and receipt of legal advice and guidance regarding the issuance of relevant Board of Property Orders.” The requester then petitioned the Commonwealth Court for review of the OOR’s final determination.

In his petition, the requester alleges that the Department’s invocation of the attorney-client privilege was deficient and that the OOR should have reviewed the redacted emails in camera or at the very least required a privilege log. In the requester’s brief, he argues that the certification and supplemental attestation merely recite the elements of the attorney-client privilege.

To establish the attorney-client privilege, the party claiming the privilege must demonstrate the following facts: (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made is a member of the bar of a court, or his subordinate; (3) the communication relates to a fact of which the attorney was informed by his client, without the presence of strangers, for the purpose of securing either an opinion of law, legal services or assistance in a legal matter, and not for the purpose of committing a crime or tort; and (4) the privilege has been claimed and is not waived by the client. Notably, the attorney-client privilege cannot be asserted as a single blanket assertion, rather it must be asserted with each redaction and with each document sought to be withheld. Generally, the privilege is asserted by providing a privilege log listing the date, record type, author, recipients, and a description of the withheld record can serve as sufficient evidence to establish an exemption, especially where the information in the log is bolstered with averments in an affidavit or attestation.

The ORO’s supplemental attestation contained the following additional information regarding the redacted emails:

The emails are communications between Board of Property Board Members (“Board”), Board of Property administrators (“administrators”), and Board of Property legal counsel, Thomas Blackburn, Esquire.
The emails consists of (a) Board and administrators supplying information to and seeking legal guidance from Mr. Blackburn in connection with the drafting and finalization of a Board of Property Order and (b) Mr. Blackburn responding to the Board and administrators’ information supplied and requests for legal guidance in connection with the drafting and finalization of a Board of Property Order.
The emails were not shared with individuals outside of the Board, Board administrators, and Mr. Blackburn.
The Board and Board administrators claim the attorney-client privilege in connection with the emails and do not waive such privilege.
To supply any further detail about the emails than what has been provided in this Attestation and in the Certification Affidavit would violate the attorney-client privilege being claimed by providing the substance of the legal advice sought and the legal advice supplied therein.

The Commonwealth Court acknowledged that it is often a challenge to provide an adjudicating body enough detail to establish the privilege without also disclosing the protected information. For that reason, the OOR, in some instances, has required in camera review of documents to confirm privilege. In Bergere, the Department’s ORO identified the specific legal controversy before the Board of Property and attested that the communications concerned the Board’s adjudication in that matter, no single document was withheld in its entirety as privileged, and the documents produced contained enough unredacted information to identify the privileged nature of the information that was redacted. The Court’s overall holding was that, in effect, the Department produced the functional equivalent of a privilege log. Because both the Court and the OOR were able to determine that the redactions were appropriate without a privilege log and in camera review, it was not necessary for the OOR to require an in camera review of the same.

Drafting a privilege log and annotating each individual instance of privilege can be a substantial task for an ORO where there are numerous responsive records including communications with the Solicitor. Allowing OROs to assert privilege via an attestation identifying the legal controversy provides a time-saving approach to an ORO’s response. While the Right-to-Know Law’s purpose and intent is to provide government transparency, it’s clear that the OOR is acknowledging the challenges that OROs are facing and open to finding creative solutions to assist OROs in their duties.

OROs should however be aware that the Court did not grant a blanket exemption stating that privilege logs are never required, nor did it say that a bare-bones attestation that simply stated that documents were redacted due to privilege would satisfy the ORO’s obligations under the RTKL. In addition, the Court implies that if documents had been withheld in their entirety, it would have been much more difficult to establish the privilege and that this would have led to higher scrutiny for the Department. In Bergere, the Department met its burden by providing an attestation that, in conjunction with the unredacted information on the documents in question, allowed both the OOR and the Commonwealth Court to find that the privilege had been properly applied.

Furthermore, OROs should also be cautious about withholding documents in their entirety. The attorney-client privilege exemption applies only to the information that is specifically privileged itself, not the entire document. While there may be cases where an entire document is privileged, this is uncommon, and more often, basic information such as the author, recipient, and date of the document are not privileged. As this case demonstrates, even the subject matter or title of a document is often not privileged, as the mere fact that a municipal entity received guidance from an attorney on a specific issue is generally not privileged itself, though there are exceptions to this general rule. By not withholding entire documents and appropriately redacting documents provided, an ORO can provide the OOR enough information to concretely establish the privilege without being required to undergo a laborious privileged log process. Consult your Solicitor for guidance on how to best create a strong attestation.

Michael T. Korns is senior counsel at Babst Calland Clements and Zomnir, P.C. and focuses his practice primarily on municipal permitting, planning, subdivision and land use, and zoning issues. He is also a member of the firm’s Energy and Natural Resources group. Contact him at 412-394-6440 or mkorns@babstcalland.com.

Anna R. Hosack is an associate at the firm and focuses her practice primarily on municipal and land use law. Contact her at 412-394-5406 or ahosack@babstcalland.com.

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Legislative & Regulatory Update

The Wildcatter

(by Nikolas Tysiak)

Our update is West Virginia heavy this time. Here are the cases since our last update:

Kaess v. BB Land, LLC, —S.E.2d—, 2024 WL 4784609 (November 14, 2024). Certified question to Supreme Court from U.S. District Court for Northern District of West Virginia, inquiring whether the deduction of certain costs from the delivery of royalties were allowable under West Virginia law when the lease calls for “in kind” royalty delivery After extensive analysis, the Supreme Court likened an “in kind” royalty provision as being similar to a “flat” royalty provision, and ultimately held that lessor under a lease with an in kind royalty provision where the lessor elects NOT to take oil and gas in kind is not subject to the deduction of post-production costs as a matter of West Virginia law.

Venable Royalty Ltd. v. EQT Production Company, 908 S.E.2d 501 (W. Va. I. C., 2024). The Intermediate Court was presented with the problem of determining whether non-participating royalty interests (“NPRIs”) should be classified as “real estate” or “personal property” as a matter of West Virginia law. The NPRI at issue was conveyed by a tax deed following a delinquent tax sale concerning the interest. One side argued that the tax deed was void because an NPRI is personal property. The other side claimed that the tax deed was successful because an NPRI is assessable as real estate, rendering the tax deed effective as to the reserved NPRI. After reviewing the available authorities, the Intermediate Court determined that NPRIs should be classified as real estate interests because they are vested real property.

Romeo v. Antero Resources Corporation, —S.E.2d—, 2024 WL 4784706 (November 14, 2024). Another certified question from the U.S. District Court for the Northern District of West Virginia concerning post production costs. The Court adopted a “point of sale” rule, which indicates that the lessee must bear all costs incurred in exploring for, producing, marketing and transportation the product to the point of sale. The Court expressed concern that adopting a different rule would make the marketability of produced gas a question of fact to be determined by courts or other judicial proceedings, instead of a question of law. Acknowledging that their ruling put West Virginia in a minority of one regarding the deductibility of post-production costs, the Court nevertheless found that the deduction of such costs could only be taken if specifically stated in a lease, and further found that the same rulings extended to NGLs derived from produced natural gas.

West v. Armstrong, 2024 WL 4709943 (W. Va. I.C.A., November 7, 2024). In 1905, landowners conveyed ½ oil and gas interest under 30 acres, described as “one half part of the royalty and rents reserved under such lease while the same remains in force . . . ” and then includes additional language that the parties argued over whether it limited the conveyance generally or only if only certain terms of the conveyance were limited. The Supreme Court found that the limiting language contained in the oil and gas conveyance only applied to certain provisions of the deed, and not the conveyance as a whole.

Bleigh v. Dominion Energy Transmission, Inc., 2024 WL 5201003 (W. Va. I.C.A., December 23, 2024). This case involves the determination of the rights and duties under a 1909 oil and gas lease and subsequent 1952 lease modification. The modification gave the operator the right to inject and store oil and gas into the Berea Sand. A storage well was subsequently completed on the property. After the deep rights under the lease became vested in DETI and HG Energy, successors to those rights, the landowner, Bleigh, alleged that these operators did not take proper steps to develop the oil and gas under the prudent operator standard. The Court found that the modification agreement overrode the implied covenant to prudently operate and develop the oil and gas, resulting in the storage lease being sufficient to hold the lease so long as the lease continues to be used for storage.

To view the full article, click here.

To view the PDF, click here.

Trump’s “Day One” Executive Orders transform industry policies

GO-WV

(by Ben Clapp, Gary Steinbauer, Mackenzie Moyer, Christina Puhnaty and Alexandra Graf)

More detailed reviews of these actions are available at the links below.

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

Is the Collateral Order Doctrine About to Have a “Brat Summer”?

February 7, 2025

The Legal Intelligencer

(by Casey Alan Coyle)

Inspired by the Charli XCX album, the “brat summer” trend took the country by storm in the summer of 2024. From the radio to fashion to TikTok to even Vice President Harris’s campaign, “brat” was everywhere. The Collins Dictionary even declared “brat” its 2024 word of the year, defining it as “characterized by a confident, independent, and hedonistic attitude.” This spring, the Pennsylvania Supreme Court is poised to hear oral argument in Chilutti v. Uber, 58 EAP 2024. The case concerns, among other things, whether an order staying a case pending arbitration is immediately appealable as a collateral order—a question that asks the Court to not only disregard the text of the Pennsylvania Rules of Appellate Procedure but also upend four decades of contrary precedent. With the argument fast approaching, everyone is asking the same question: Is the collateral order doctrine about to have a “brat summer”?

Collateral Order Doctrine

Generally, an appellate court’s jurisdiction extends only to review of final orders. Final orders are those that dispose of all claims and all parties, are explicitly defined as final orders by statute, or are certified as final orders by the trial court or other reviewing body. Pa.R.A.P. 341. There are, however, limited exceptions to the final order rule—specifically, interlocutory appeals as of right (Pa.R.A.P. 311); interlocutory appeals by permission (Pa.R.A.P. 312); and collateral orders (Pa.R.A.P. 313). The collateral order doctrine is derived from U.S. Supreme Court case law and codified in Pennsylvania Rule of Appellate Procedure 313. It is the narrowest of the three exceptions because the rules already allow a party to seek permission to appeal an interlocutory order not enumerated in Rule 311 and that discretionary process would be undermined by an overly permissive interpretation of Rule 313’s limited grant of collateral appeals as of right. The classic example of a collateral order is one compelling the disclosure of putatively privileged material because, once that material is disclosed, “the bell has been rung, and cannot be unrung by a later appeal.” Commonwealth v. Harris, 32 A.3d 243, 249 (Pa. 2011).

To qualify as a collateral order, (1) the order must be “separable from and collateral to the main cause of action,” (2) the right involved must be “too important to be denied review,” and (3) “the question presented [must be] such that if review is postponed until final judgment in the case, the claim will be irreparably lost.” Pa.R.A.P. 313(b). With regard to the first prong, an order is separable from the main cause of action if it is entirely distinct from the underlying issue in the case and if it can be resolved without an analysis of the merits of the underlying dispute. As for the second prong, a right is important if the interests that would go unprotected without immediate appeal are significant relative to the efficiency interests served by the final order rule. The third prong requires that the matter at issue must effectively be unreviewable on appeal from final judgment. Stated differently, the claim must be of such nature that it would be lost forever if appellate review is delayed until final judgment. Unless the order satisfies all three requirements, the appellate court lacks jurisdiction.

Chilutti

The Chilutti case arises out of a car accident. A woman was injured while riding in an Uber; she and her husband then filed a negligence suit against the company and its subsidiaries. The defendants filed a petition to compel arbitration, arguing that the terms and conditions of Uber’s app required the couple to arbitrate their claims. The trial court granted the petition and stayed the matter pending arbitration, and the couple appealed to the Superior Court.

It has long been the rule in Pennsylvania that an order compelling arbitration is not immediately appealable. Indeed, courts of this Commonwealth have reaffirmed this principle again and again over the past 40 years. Nonetheless, the Superior Court panel in Chilutti held that an order compelling arbitration constitutes an appealable collateral order. Chilutti v. Uber Techs., Inc., No. 1023 EDA 2021, 2022 WL 6886984, at *5 (Pa. Super. Ct. Oct. 12, 2022). The Superior Court subsequently granted reargument and withdrew the panel’s opinion. But instead of disavowing the panel’s holding, a divided, en banc Superior Court effectively adopted it. Chilutti v. Uber Techs., Inc., 300 A.3d 430 (Pa. Super. Ct. 2023) (en banc).

The majority initially—and correctly—stated that the third prong of the collateral order doctrine involves an assessment of whether the question presented is such that “if review is postponed until final judgment, the claimed right will be irreparably lost.” Id. at 437 (emphasis added). But later in the opinion, the majority declared that the relevant inquiry is whether “postponing review until final judgment in the case may result in the irreparable loss of [the plaintiffs’] claims.” Id. at 439 (emphasis added). Applying the latter (and more relaxed) standard, the majority hypothesized:

[T]here are times when a party is forced out of court because the arbitration provision either failed to meet basic contract principles or violated a party’s constitutional right to a jury trial—which does not qualify as a “fraud, misconduct, corruption, or other irregularity”—and where the arbitration award is deemed fair, and therefore unreviewable, even if there was no agreement to arbitrate between the parties, which would result in the irreparable loss to the party.

Id.

Based on this new formulation of the doctrine, the majority held that an order compelling arbitration is immediately appealable as a collateral order. The majority reasoned that, because “the standard of review for common law arbitration is very limited” and “there is always a possibility that a court may find a subsequent arbitration award was fair—meaning it was not unjust, inequitable, or unconscionable—even if there was no agreement to arbitrate between the parties; resultingly, the award would remain binding on the parties. In that scenario, a party would be denied their constitutional right to a jury trial.” Id. at 438. The majority then turned to the merits of the appeal, inventing a new, stricter standard for enforcing online arbitration agreements and holding that, based on that new test, there was no valid agreement to arbitrate between the parties. Id. at 499–450. The majority thus held that the trial court erred in granting the defendants’ petition to compel arbitration. Id. at 451.

The Pennsylvania Supreme Court subsequently accepted review of the case. Briefing is now complete, and it is anticipated that oral argument will take place this spring.

Impact

If affirmed, the en banc Superior Court’s decision could have far-reaching consequences with regard to appellate jurisdiction. Courts historically have construed the collateral order doctrine narrowly to avoid undue corrosion of the final order rule and to prevent delay resulting from piecemeal review of trial court decisions. For instance, the U.S. Supreme Court has stated that: “[T]he narrow exception should stay that way and never be allowed to swallow the general rule that a party is entitled to a single appeal, to be deferred until final judgment has been entered, in which claims of [trial] court error at any stage of the litigation may be ventilated.” Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868 (1994) (cleaned up). The Pennsylvania Supreme Court has similarly noted that “it is more important to prevent the chaos inherent in bifurcated, trifurcated, and multifurcated appeals than it is to correct each mistake of a trial court the moment it occurs.” Shearer v. Hafer, 177 A.3d 850, 858 (Pa. 2018) (cleaned up).

But by lowering the threshold to qualify for the collateral order doctrine from one in which the claim must be irreparably lost if immediate review is denied to one where the claim hypothetically could be irreparably lost absent such review, the Superior Court majority expanded the doctrine to potentially limitless ends and allowed the once-narrow exception to swallow the general rule against the appealability of non-final orders. Indeed, it is difficult to conceive of a scenario in which there would not be at least some theoretical possibility, however remote, that “postponing review until final judgment in the case may result in the irreparable loss of [the plaintiffs’] claims.” Chilutti, Inc., 300 A.3d at 439. As a result, virtually every interlocutory order would now qualify as a collateral order in Pennsylvania, ushering in a new, chaotic era of bifurcated, trifurcated, and even multifurcated appeals. By creating a right of appeal to an entire class of interlocutory orders that did not previously exist, the majority opened the door to hundreds, if not thousands, of additional appeals per year that invariably will overburden an already overtaxed appellate court system in Pennsylvania.

Conclusion

While traditionally limited to a narrow set of orders, Chilutti may extend the reach of the collateral order doctrine to unknown limits, brushing aside the text of Rule 313 itself and the 40 years of interpretive precedent standing in its way. That may leave some Pennsylvania lawyers saying, “That’s so brat.”

——————–

Casey Alan Coyle is a shareholder at Babst, Calland, Clements and Zomnir, P.C. He focuses his practice on appellate law and complex commercial litigation. Casey is also a former law clerk to Chief Justice Emeritus Thomas G. Saylor of the Pennsylvania Supreme Court. Contact Casey at 267-939-5832 or ccoyle@babstcalland.com.

To view the full article, click here.

Help the Clerk to Help Your Case: Writing Insights from a Federal Career Clerk Turned Litigator

Federal Lawyer

(by Stefanie Pitcavage Mekilo)

In modern litigation, written submissions are not just a lawyer’s first opportunity to make an impression with the court; they’re also often our last. Cases increasingly are won or lost on the papers, and trials, for better or worse, are largely a thing of the past. These trends exhibit no signs of reverting. To be effective litigators, we must learn to embrace them.

A crucial component of effective written advocacy is knowing your audience. Judges, obviously, are our ultimate audience. But most often, the first person to read a pleading, motion, brief, or letter filed with the court will be the judge’s law clerk. Though their roles and degree of influence vary from one judge to the next, law clerks usually are the front line in chambers—studying briefs and the record, conducting research, and relaying initial impressions on the outcome to the judge.

During my dozen years as a federal judicial clerk, I consumed tens of thousands of pages of legal writing—some exceptional, some decidedly less so, most falling somewhere in between. In this article, I’ll share writing insights and practical tips gleaned during my time in chambers to help you get and keep the judge’s law clerk on your side.

Start with a plan. The real work of good writing occurs before any actual writing happens at all. After you’ve done your research but before you start drafting, think about which issues to raise and the order in which to raise them. Always start with your strongest argument. The lone exception would be if you have a jurisdictional argument, even if novel or only moderately compelling, because the court must satisfy itself that it has jurisdiction before turning to the merits. Organize arguments logically and efficiently—address threshold issues or elements common to all claims first, before moving into individual claims and disputed elements. Think carefully, too, about whether an issue is worth raising. Ask yourself if your argument has plausible merit and, if it’s a close call, whether the potential “payout” is worth it; the answer may still be yes, but be mindful that kitchen-sink approaches and unsupported arguments waste the court’s time and burn credibility.

Make a strong first impression. The introduction to your pleading, motion, brief, or letter is your first opportunity to begin persuading. Punchy style and a touch of color are great for getting the reader engaged, but if that doesn’t come naturally to you, don’t sweat it; just get the job done. Distill your submission to its essence—the “who, when, where, and how” of the dispute, “what” you would like the court to do, and “why” you are right. Form introductions identifying the “what” without context ( e.g. , “Defendant moves to dismiss Plaintiff ’s Complaint for the reasons stated herein.”) are unhelpful.

Keep in mind that while you have been immersed in your case for months or even years, the court does not have your level of familiarity. Your dispute is important to the court, too, but courts are busy, with some judges managing thousands of cases at once. With the exception of career clerks, law clerks usually are transient, rotating through chambers in one- or two-year intervals, meaning the clerk who assisted the judge on your motion to dismiss may not be the same clerk assigned at summary judgment or trial. Take advantage of this opportunity to acquaint (or reacquaint) the court with your case—but keep it short, sweet, and tailored to its purpose.

Write with your ideal decision in mind. The best briefs we received in chambers were those that were well-organized and well-supported—and therefore easily adapted into an opinion or order if the judge agreed with them. There are a few things lawyers can do to fall into that category:

Write directly to the assigned judge. Take some time to filter your research results down to your assigned judge. Even if they have not addressed your precise issue, having a sense of the judge’s style allows you to structure your analysis to track their preferred framework. If the judge has written on your issue, remind them with a citation. If the case is helpful, great. If not, try to distinguish it on the facts or intervening case law. Even if you can’t distinguish the case effectively, engaging with it will score credibility points; the judge knows the decision exists
because they wrote it, so you might as well get in front of it. You might still lose the issue, but the court will be more inclined to buy what you are selling elsewhere.
Cite accurately and often. Make it easy for the judge to adopt your argument by providing every citation they would need to support a decision in your favor. Apart from roadmaps, transitions, and conclusions, a citation should follow virtually every sentence. Point the court to the exact page of the case that creates the exception you’re invoking, or the specific “page:line” of a deposition containing what you believe to be a key admission. This is especially critical for big assertions, like concessions. Too often I encountered a proposition like “Defendants concede that prison officials were aware of deficiencies in the prison’s policy,” with a citation to the policy but not the claimed concession.
Do not make unsupported arguments. The consensus among clerks I’ve spoken to is that the single most frustrating part of the job is digging for case law to substantiate unsupported arguments. An increasing number of judges have amended their practice orders to warn that unsubstantiated arguments will be summarily rejected because courts simply don’t have time to do litigants’ work for them. (This is not to say courts won’t do that work; many clerks still take a deep dive into the case law because they want to reach the right result. But they won’t be happy about it.) In addition to doing justice, the primary concern of most district judges is avoiding reversal. Writing to that concern by thoroughly supporting your argument will go a long way toward making even uncharted positions or novel exceptions more palatable.
Confront bad authority. Lawyers often hide bad authority in footnotes or wait to address it in a reply. But the court will need to get past that authority to reach your preferred result, so the earlier you provide a workaround, the better for your client. It also conveys confidence in your position and shows the court you can be trusted.
Don’t forget the “why.” This is the “A” in your law school “IRAC” formulation—the analysis section where you “show your work” and bridge the law you’ve summarized to the result you seek. Countless briefs included comprehensive rule statements and plenty of examples, followed by a conclusory statement like: “Accordingly, Plaintiff qualifies as a disabled individual under the ADA.” It is the court’s job to determine whether the law and facts align to support your position, but you’re doing yourself a disservice if you don’t spend a paragraph (or more) making that link clear.

Aim for “one-read” writing. Clerks will come back to good briefs multiple times as a reference throughout their research and writing process, but your goal should be initial comprehension after just one pass through your argument. You do not want a clerk or judge rereading a paragraph multiple times to understand your point. Some tips for how to achieve this goal follow:

Provide context before detail. Your introduction section will provide the court with broad context for your argument. But the context-first principle applies throughout the whole document. In the factual background section, it is often helpful to introduce key players, documents, and concepts at the outset. Likewise, when summarizing the applicable law, consider whether a short opening paragraph situating the court within the statutory framework or legal principle is necessary. Probably not for civil rights statutes that federal judges engage with regularly, but less routine claims (say, for example, civil RICO) may warrant a short abstract.
Use Plain English. Legal writing has earned a reputation for being overly technical and verbose. But draping complex ideas in even more complex language does not advance your cause. “Plain English” writing rejects these conventions, abandoning jargon, archaism, and Latin in favor of clear, direct prose. Plain English should not be confused with informality. It simply means using the most straightforward way of expressing an idea. Some Plain English techniques include:
- Eliminating unnecessary passive voice
- Using strong, precise verbs
- Keeping subjects close to verbs, and verbs close to objects
- Avoiding nominalizations ( i.e. , “argue” instead of “make the argument”)
- Shortening multiword phrases ( i.e. , “in the event that” becomes “if “)
- Varying sentence length and structure
- Targeting an average sentence length of 15 to 20 words
Connect the dots. Linking techniques are crucial to helping your reader follow your argument. Use roadmaps and narrative-style headings to tell the court where you are going and how a given discussion fits into your broader argument. Start each paragraph with a clear topic sentence and ensure all material in the paragraph relates to and follows naturally from that sentence. (Pro tip: To test flow, pull the topic sentences from each paragraph into a separate document. Does it make sense? If not, reorganize.) Even simple matters of word choice matter here. For example, the best writers keep references to key terms simple and consistent ( i.e. , “Defendant” or “ABC Company” or “Company,” not all three).
Keep it concise. Page limitations exist for two reasons. Courts are busy, and limitation is necessary for efficiency’s sake. But constraints also force lawyers to write with clarity and precision and to think hard about what information matters. Together, these limitations benefit everyone: lawyers’ writing is clearer and more compelling, and judges receive less paper. Remember that the longest brief is not always (nor often) the best one, and page-limit extensions, while frequently requested, are rarely warranted. Note, too, that, all other priority metrics being equal, a clerk is more likely to turn to the motion with the shortest stack of briefs first.

Mind your manners. Lawyers have an obligation to advocate zealously on behalf of their clients, but too often the noise of advocacy becomes the narrative itself. If opposing counsel has misrepresented a case or fact to the court, it is appropriate to point that out. But consider first whether it is actually an error—are they objectively wrong, or do you simply disagree with them? Even if counsel did err, jabs and charged language will not sway the court. Briefly noting (and proving) the error and then refocusing on the issues goes much further in showing confidence in your position. Likewise, while it is fair and sometimes appropriate to seek reconsideration on a given issue, remain objective and respectful. (It’s been a decade, but I still recall—not fondly—the attorney who suggested our standing analysis was “so bad and so wrong” as to compel an appeal if left unaltered.)

Edit, Edit, and then Proofread. Robert Graves once wrote, “There is no such thing as good writing; only good rewriting.” Too many lawyers get everything on paper, proofread, and file, skipping the intermediate step of editing. When you edit, you improve the overall quality of the writing, in relation to substance, organization, and style. Proofreading, by contrast, is mostly superficial—targeting objective grammar, spelling, citation, and other errors. Failing to edit first misses a prime opportunity to polish and refine your work; to ensure your argument flows logically and your theme carries throughout; and to smooth out rough edges.

Only then should you turn to proofreading. Most people proofread more effectively on paper than on a screen. But if you are stuck with a screen or prefer to save paper, other techniques can help. Changing font size or color can trick your eyes into seeing the document anew. Reading your draft aloud, too, is highly effective; after spending many hours in your draft, your ears will catch awkward phrasing and repetition more readily than your eyes. You can also use an app to read drafts aloud, so you are hearing the words in someone else’s voice. Keep a checklist of your most common errors, and run through it as a final step before submitting any filing.

Finally, do not underestimate the importance of clean work product. Every minute dedicated to proofreading is time well spent. It goes without saying that a clear, concise, and well-edited brief improves the effectiveness of your argument. But a typo-ridden brief is also a surefire way to lose credibility; if you were careless in your writing, perhaps you were careless in your research and analysis too. And if that is not incentive enough, judges are not unwilling to sanction counsel or slash fees for slipshod submissions that make their work more difficult.¹

Keep learning. The institutions that train lawyers continue to undervalue legal writing relative to doctrinal courses.² Legal writing faculty nonetheless are keenly aware of the shift toward motions-based litigation, and they work hard to develop curricula designed to introduce law students to the fundamentals. But a lawyer’s duty to develop as a writer does not end in law school, and the best lawyers remain committed to sharpening this crucial skill set throughout their careers. The writing advice I give most often is to seek out good writing and study it. Take notes of structural, stylistic, and other characteristics you find effective. You will be a better writer, and a better advocate, for the effort.

Endnotes
¹See, e.g., McKenna v. City of Philadelphia, No. 07-110, 2008 WL 4435939 (E.D. Pa. Sept. 30, 2008) (reducing fee by 85 percent—$154,161.25—based on drafting errors in prevailing counsel’s filings).

²Amy H. Soled, Legal Writing Professors, Salary Disparities, and the Impossibility of “Improved Status,” 24 J. OF LEGAL WRITING 47, 48–49 (2020) (comparing average salaries among doctrinal professors, tenure-track legal-writing professors, and non-tenure-track legal-writing professors).

Stefanie Pitcavage Mekilo is a litigation associate at Babst, Calland, Clements and Zomnir, P.C. She focuses her practice on complex commercial and environmental litigation, with a particular emphasis on federal trial work. Before entering private practice, Stefanie served for two years as a term law clerk to Hon. John E. Jones III and then for 10 years as career law clerk to Hon. Christopher C. Conner, both in the U.S. District Court for the Middle District of Pennsylvania. Contact Stefanie at 570-590-8781 or smekilo@babstcalland.com.

© 2025. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the Federal Bar Association.

Key Legal Developments on Enforcement of the Corporate Transparency Act

PIOGA eWeekly

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

In recent weeks, significant developments have unfolded regarding the implementation of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements to the Financial Crimes Enforcement Network (FinCEN), which remain subject to a nationwide injunction.

As discussed in our previous Alert, on December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al., temporarily halting enforcement of the CTA and its BOI reporting requirements, including the January 1, 2025, filing deadline. The U.S. Department of Justice (DOJ) appealed, requesting a stay of the injunction or, alternatively, a narrowing of the injunction to apply only to the named plaintiffs and members of the National Federation of Independent Business.

In a flurry of year-end decisions, a panel of the Fifth Circuit Court of Appeals granted DOJ’s emergency motion on December 23, 2024, lifting the injunction. Three days later, a separate Fifth Circuit panel reversed the earlier decision, vacating the stay and reinstating the nationwide injunction. As a result, FinCEN again updated its guidance, stating that reporting companies may voluntarily submit BOI filings but are not required to do so during the pendency of the injunction.

On December 31, 2024, DOJ filed an emergency “Application for a Stay of the Injunction” with the U.S. Supreme Court, seeking to stay the injunction pending the Fifth Circuit’s review of the matter. Alternatively, DOJ invited the Court to “treat this application as a petition for a writ of certiorari before judgment presenting the question whether the district court erred in entering preliminary relief on a universal basis.”

The ongoing legal challenges have left the status of the BOI reporting requirement in flux. For the time being, unless the Supreme Court intervenes, the nationwide injunction is likely to remain in place through at least March 25, 2025, the scheduled date for oral arguments before the Fifth Circuit. Businesses that have not yet complied with the reporting requirements should remain alert to any changes. If the injunction is lifted, or if the Supreme Court grants a stay, reporting companies may be required to submit their beneficial ownership information promptly, subject to any deadline extensions provided by FinCEN. In the meantime, voluntary submissions of BOI reports to FinCEN are still accepted, but companies should be prepared to meet any new deadlines should the situation change. The next few months could prove critical for the future of the CTA and its enforcement.

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

To view the full article, click here.

West Virginia Poised to Receive Primacy Over Permitting for Carbon Dioxide Underground Injection Wells

GO-WV

(by Kip Power)

The federal Environmental Protection Agency (EPA) recently proposed to approve the application of the State of West Virginia (through its Department of Environmental Protection (WVDEP)) to obtain primary authority (a.k.a., “primacy”) over the issuance of permits for Class VI underground injection wells located within its borders. 89 Fed. Reg. 93538 (Nov. 27, 2024). The federal rulemaking proposal may be found here. Comments on the proposed approval are due on or before December 30, 2024. On the same day, EPA will hold a public hearing on the proposal at the Charleston Marriott Town Center, 200 Lee Street East, in Charleston, West Virginia. Details regarding public participation in the rulemaking may be found here.

Class VI underground injection control (UIC) wells are those wells used for injecting carbon dioxide for the purpose of permanent geologic storage or “sequestration.” WVDEP’s rules for such permits are largely modeled on EPA’s detailed “Class VI” UIC regulations promulgated under the federal Safe Drinking Water Act. If approved, West Virginia will be just the fourth state to receive primacy over the Class VI UIC permitting program (joining North Dakota, Wyoming and Louisiana).

Should it be granted primacy over Class VI well permitting, the WVDEP will be able to issue such permits without following the lengthy (and oftentimes litigated) procedures required under the federal National Environmental Policy Act that applies to EPA-issued UIC permits. The WVDEP would also be in a better position to coordinate the issuance of such Class VI UIC wells with other West Virginia regulatory requirements for carbon dioxide injection projects, including the West Virginia Underground Carbon Dioxide Sequestration and Storage Act (W.Va. Code § 22B-1-1, et seq.). This would help facilitate the development of such projects by a variety of applicants, including those seeking to use underground carbon dioxide sequestration as a part of the production of so-called “blue” hydrogen (reforming fossil fuels to separate hydrogen and capture CO₂) and those hoping to comply with proposed EPA rules mandating the use of carbon capture and injection technologies by certain natural gas and coal-fired power plants.

For questions about EPA’s proposal to grant primacy to West Virginia over the issuance of Class VI UIC wells or related issues, please contact Christopher B. (Kip) Power at (681) 265-1362 or cpower@babstcalland.com.

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

Uncertainty Over CTA Reporting Requirements as DOJ Appeals Nationwide Injunction

Pittsburgh Technology Council

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

As discussed in our previous Alert, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al., temporarily halting enforcement of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements, including the January 1, 2025, filing deadline. The ruling provided temporary relief to affected businesses, but a pending Department of Justice (DOJ) emergency motion to stay the injunction pending appeal has created further uncertainty.

On December 11 and December 13, 2024, the DOJ filed emergency motions with the District Court and the United States Court of Appeals for the Fifth Circuit respectively, requesting a stay of the District Court’s nationwide injunction. In its motion to the Court of Appeals, the government proposed an expedited briefing schedule, requesting “a ruling on this motion as soon as possible, but in any event no later than December 27, 2024, to ensure that regulated entities can be made aware of their obligation to comply before January 1, 2025.”

On December 17, 2024, the District Court denied the government’s motion, while the Court of Appeals decision remains pending and could be issued as early as December 20, 2024. If the Fifth Circuit grants the stay or narrows the scope of the injunction, the CTA’s reporting requirements, including the January 1, 2025 filing deadline, could be reinstated (unless the court or the Financial Crimes Enforcement Network (FinCEN) issues a deadline extension). FinCEN has already clarified that businesses are not required to file BOI reports while the injunction is in effect, but that they may voluntarily submit reports during this time.^[1]

If the Fifth Circuit stays the injunction, reporting companies which have not already submitted their filings should be prepared to finalize their BOI reports and file them promptly to meet the reinstated deadline. FinCEN has not indicated whether it plans to offer reporting companies an extension if the injunction is stayed or narrowed by December 27, 2024. Approximately 8 million of the estimated 32.6 million reporting companies subject to filing requirements have filed so far. In the event the January 1, 2025 deadline remains in place, FinCEN’s website is likely to be overwhelmed with filing attempts, which could lead to delays and technical issues. In light of this uncertainty, reporting companies should consider gathering the required filing information to avoid a potential race against the clock at year-end, or if your business has a conservative mindset, you should file the report now and enjoy the holiday season. Either way, doing nothing does not appear to be an option.

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

[1] https://fincen.gov/boi

To view the full article, click here.

Court Blocks Enforcement of the Corporate Transparency Act Nationwide

PIOGA Press

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

On December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction temporarily halting enforcement of the Corporate Transparency Act (CTA). With less than a month to go before the January 1, 2025 compliance deadline for entities formed prior to 2024, this ruling blocks the U.S. Department of Treasury from enforcing the requirements of the Beneficial Ownership Information Reporting Rule (the “Rule”) issued by the Financial Crimes Enforcement Network (FinCEN).

The Court’s opinion in Texas Top Cop Shop, Inc., et al. v. Garland, et al. raises significant questions about the constitutionality of the CTA and its potential negative impact on small businesses. The CTA, part of broader anti-money laundering efforts, requires companies to disclose personal information about their “beneficial owners” (individuals who ultimately own or control a company) to a federal database maintained by FinCEN. In his Memorandum Opinion and Order, United States District Judge Amos L. Mazzant concluded that the CTA and Rule are likely unconstitutional as they exceed the scope of Congress’s power. The Court held that CTA does not regulate interstate commerce and that it is further not authorized by the Necessary and Proper clause of the Constitution.

The nationwide injunction affects most business entities in the U.S., as the CTA and Rule apply to approximately 32.6 million companies. Per the Court’s order, “reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”

To view the full article, click here.

Pennsylvania Supreme Court Unanimously Upholds PA Statutes Restricting the Ability of Municipalities to Regulate Firearms

The Legal Intelligencer

(by Michael Korns and Anna Hosack)

In Crawford v. Commonwealth, No. 19-EAP-2022 (Pa. Nov. 20, 2024), the Pennsylvania Supreme Court unanimously upheld the constitutionality of state preemptive firearm laws that prohibit municipalities from passing local gun regulations. Advocates for stricter gun laws filed a petition for review under the Commonwealth Court’s original jurisdiction, asking the Court to declare as unconstitutional or otherwise unlawful two statutory provisions that prohibit the enactment of local legislation on the subject: (i) Section 6120 of the Pennsylvania Uniform Firearms Act of 1995, 18 Pa.C.S. § 6120, and (ii) Section 2962(g) of the Home Rule Charter and Optional Plans Law, 53 Pa.C.S. § 2962(g). Generally, these provisions prohibit local governments from enacting or enforcing ordinances that regulate the ownership, transportation, possession, or transfer of firearms.

Crawford was heard en banc at the Commonwealth Court, and ultimately the Court sustained preliminary objections in a plurality decision and dismissed the petition for failure to state claims upon which relief could be granted (demurrer). Petitioners filed an appeal seeking review of the Commonwealth Court’s decision from the Pennsylvania Supreme Court. The City of Pittsburgh, the City of Scranton, and several other Pennsylvania local governments and officials submitted amici curiae briefs in support of the appeal.

The Pennsylvania Supreme Court addressed not only the delineation of power between the legislative and judicial branches of the state government but also the interplay between state and municipal governance. First, the decision emphasized the basic fact that municipalities in Pennsylvania are creatures of the state, created by state legislation and having no inherent powers of their own not granted or delegated by the Commonwealth. The Court reiterated that the General Assembly’s authority over municipalities’ powers is “supreme” and accordingly, municipalities may do only those things which the legislature has expressly or by necessary implication placed within their power to do.

The first law challenged by the Appellants was Section 2962(g) of the Home Rule Charter and Optional Plans Law, 53 Pa.C.S. § 2962(g). Most municipalities are governed by one of four codes promulgated by the general assembly, the First and Second Class Township Codes, the Borough Code, and the Third Class City Code. However, Article IX, Section 2 of the Pennsylvania Constitution, “Home Rule” allows a municipality to “legislate concerning municipal governance without express statutory warrant for each new ordinance; [a municipality’s] ability to exercise municipal functions is limited only by its home rule charter, the Pennsylvania Constitution, and the General Assembly.” Generally speaking, this means that home rule communities can exercise any power that the General Assembly has not forbidden.

The Home Rule Law was enacted in 1996 and regulates the process for creating a home rule municipality, as well as setting boundaries on the powers that the municipality can exercise. It applies to all municipalities other than Philadelphia. In relevant part, Section 2962(c)(2) of the Home Rule Law provides that “[a] municipality shall not … exercise powers contrary to or in limitation or enlargement of powers granted by statutes which are applicable in every part of this Commonwealth.” The Appellants challenged the constitutionality of Section 2962(g) which specifically states that “[a] municipality shall not enact any ordinance or take any other action dealing with the regulation of the transfer, ownership, transportation or possession of firearms.” Pennsylvania courts have consistently held that the General Assembly may negate ordinances enacted by home rule municipalities when the General Assembly has enacted a conflicting statute concerning “substantive matters of substantive concern” including those involving “the health, safety, security and general welfare of all the inhabitants of the State” as opposed to matters of purely local concern which are of no concern to citizens elsewhere. The Supreme Court simply applied this long line of cases to this current challenge.

The second statute challenged, the Uniform Firearm Act, was originally enacted in 1972, and the General Assembly has subsequently demonstrated its state lawmaking power in the realm of firearm regulations through its numerous amendments to the Act over the course of decades. The stated intent of these amendments was to balance the right of Pennsylvania citizens to bear arms with the need for crime prevention and control. At dispute in this case, Section 6120 creates the general rule “no county, municipality or township may in any manner regulate the lawful ownership, possession, transfer or transportation of firearms, ammunition or ammunition components when carried or transported for purposes not prohibited by the laws of this Commonwealth.”

Appellants advanced three arguments in support of their case. First, the Appellants alleged that the State has violated their substantive due process rights to enjoy and defend life and liberty under Article 1, Section 1 including their right “to collectively enact measures that safeguard against gun violence” because the firearm protection laws do not provide due process rights. The Court found this argument failed because the substantive due rights given under Article 1, Section 1 of the Pennsylvania Constitution provides those rights to individuals, not a “collective” right of citizens or municipal corporation rights. A lawfully enacted prohibition on municipal power has no impact on individual due process rights.

Appellants second argument sought relief under the state-created danger doctrine. The “state-created danger” doctrine is a concept borne out of federal substantive due process principles that permits a plaintiff to obtain relief against a state actor for conduct that creates or increases a private danger that causes injury to a plaintiff. Neither the U.S. Supreme Court nor the Pennsylvania Supreme Court has endorsed the doctrine. This cause of action fails because even if endorsed, the doctrine only allows for individual claims based on injuries suffered due to state actions or failures to act. It has not been, and cannot be, invoked to render a statute unconstitutional on broad collective grounds.

Finally, the third argument was brought on behalf of Philadelphia alone, assets that the state through its absence of adequate statewide firearm regulations has improperly interfered with the public health responsibilities that the Commonwealth had delegated to political subdivisions under the Local Health Administration Law and Disease Prevention and Control Law of 1955. The Commonwealth Court plurality held that this claim failed because the term “public health” does not encompass the epidemic of gun violence and its attendant impacts. After applying the Statutory Construction Act, 1 Pa.C.S. §§ 1501-1991, the Pennsylvania Supreme Court held that the more specific firearm protection laws enacted later in time signal that Philadelphia has no delegated authority under the aforementioned laws to regulate firearms.

While these questions were highly contested in the Commonwealth Court, with a strongly worded dissent that would have found that the Appellants had stated a legally sufficient claim with respect to all three counts of the Petition, the Pennsylvania Supreme Court’s unanimous decision to dismiss the petition with prejudice appears to be a decisive answer to any further attempts to enact traditional firearm regulations by municipalities in the Commonwealth. The Court has stated with no ambiguity that regulations on ownership, sale, transfer, transportation or use are preempted by the State. However, there are currently lawsuits in various stages in the Pennsylvania Courts, asking the Pennsylvania Supreme Court to rule on several stalled local gun laws, including an assault rifle ban. In addition, there are additional pending lawsuits specifically challenging the limits of the preemption law in applicability to regulating the sale of “ghost gun” parts and the reporting of lost/stolen guns. Following Crawford, any future litigation over gun regulations would seem to be limited to questions regarding the reach of state Preemption laws, not whether they are in themselves unconstitutional. It is possible that some forms of regulation on ancillary issues may be possible, however, given the unanimous decision of the Court, it seems highly likely that gun regulation in Pennsylvania is an exclusively state issue, and further attempts at local regulations appear dubious, at best, given this decision. The Babst Calland Public Sector group will continue to monitor similar cases for further issues that may impact municipalities.

Michael T. Korns is senior counsel at Babst Calland Clements and Zomnir, P.C. and focuses his practice primarily on municipal permitting, planning, subdivision and land use, and zoning issues. He is also a member of the firm’s Energy and Natural Resources group. Contact him at 412-394-6440 or mkorns@babstcalland.com.

Anna R. Hosack is an associate at the firm and focuses her practice primarily on municipal and land use law. Contact her at 412-394-5406 or ahosack@babstcalland.com.

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Court Blocks Enforcement of the Corporate Transparency Act Nationwide

Pittsburgh Technology Council

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

While businesses are temporarily relieved of compliance obligations, the final resolution of the matter remains uncertain. Although no announcement has been made as of the time of this publication, the U.S. Department of Justice is likely to appeal the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit. Companies should stay informed and be prepared for potential changes to enforcement. Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland client relationship lawyer if you have any questions.

To view the full article, click here.

Court Blocks Enforcement of the Corporate Transparency Act Nationwide

Firm Alert

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

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