Pennsylvania Business Central
For more than 20 years, the Pennsylvania Business Central has entered the new year by celebrating the top 100 people in its expanding readership that have accomplished both personal and financial success with an honest sense of direction imbued in them by mentors, personal experiences, failures and successes.
The Legal Intelligencer
(by Blaine Lucas and Alyssa Golfieri)
In an effort to provide better safeguards to surface and mineral rights owners who might not otherwise become aware of proposed municipal actions that could affect their property interests, such as a municipality’s consideration and adoption of a new zoning ordinance or zoning ordinance amendment, Gov. Tom Corbett signed Act 36 of 2013 into law July 2, 2013. Act 36, which took effect Aug. 31, 2013, amended the Pennsylvania Municipalities Planning Code to add a requirement that municipalities provide “mailed notice” or “electronic notice” of public hearings concerning proposed zoning ordinances and zoning ordinance amendments to the owners of tracts or parcels of land or the owners of mineral rights in tracts or parcels of land located within their borders upon request by those owners.
Prior to the enactment of Act 36, the MPC imposed upon municipalities a number of notice and distribution requirements for the adoption of land use ordinances. For zoning ordinances and zoning ordinance amendments, these requirements included: (1) a public hearing; (2) publication of notice of the hearing for two successive weeks in a newspaper of general circulation in the municipality, with the first publication being no more than 30 days and the second publication being no less than seven days from the date of the hearing; (3) publication of notice of the proposed enactment of the ordinance at least once no more than 60 nor less than seven days prior to passage, with either publication of the full text or a summary of the proposed ordinance, in which case copies also must be provided to the newspaper publishing the notice and to the county law library; (4) transmittal of a copy to the county planning agency for review and comment at least 30 days prior to the public hearing; and (5) in the case of an amendment involving a zoning map change, posting of the property and mailing of notice to the addresses to which real estate tax bills are sent for all real property located within the area to be rezoned.
However, absentee surface and mineral rights owners frequently do not have access to local newspapers and therefore have no way of seeing the public notices regarding proposed zoning ordinances or zoning ordinance text amendments (as opposed to proposed rezoning of specific properties) affecting their property rights. Act 36 was enacted to provide additional safeguards to these absentee owners in the form of individual notice regarding public hearings on proposed zoning ordinances and amendments.
Specifically, Act 36 amends Section 608 of the MPC, dealing with the initial adoption of zoning ordinances, and Section 609, dealing with the adoption of amendments to zoning ordinances, to require that mailed notice or electronic notice of a proposed ordinance be provided to “any owner of a tract or parcel of land located within a municipality, or an owner of the mineral rights in a tract or parcel of land within the municipality who has made a timely request in accordance with Section 109” of the MPC. Act 36 defines electronic notice as notice “given by a municipality through the Internet” and defines mailed notice as “notice given by a municipality by first-class mail.”
Act 36 also adds a new Section 109 to the MPC, which establishes the procedures and parameters for requesting and receiving mailed and electronic notices. Mailed notice is required if the owner has made a written request that the notice be mailed and has supplied the municipality with a stamped, self-addressed envelope prior to a public hearing. Electronic notice is required if the owner has made a written request that notice be sent electronically and has supplied the municipality with an electronic address prior to the public hearing, and only if the municipality maintains the capability of generating an electronic notice.
With respect to mailed notice, the property owner is responsible for the number, accuracy and sufficiency of the envelopes supplied and the municipality is not responsible or liable if the owner does not provide to the municipality notice of any changes in the owner’s mailing address or if the owner fails to replenish the supply of stamped, self addressed envelopes. One written request for mailed notice is sufficient.
With respect to electronic notice, an owner is responsible for the accuracy and sufficiency of the information provided in connection with requests for electronic notice and the municipality is not responsible or liable if the owner does not provide to the municipality notice of any changes in the owner’s information. Again, one written request for electronic notice is sufficient and it is the owner’s responsibility to notify a municipality of any change in the electronic address.
When there is a proposed zoning ordinance or zoning ordinance amendment, the municipality must mail or provide electronic notice not more than 30 days and not less than seven days prior to the scheduled date of the hearing. For each public hearing, “the municipal secretary or zoning officer shall prepare, sign and maintain a list of all mailed notices, mailing dates, electronic notices and electronic notice dates. The signed lists shall constitute a presumption that the notice was given.” A mailed notice is “deemed received” by the owner on the date it is deposited in the U.S. mail and electronic notice is deemed received on the date the municipality electronically notifies the owner. Generally speaking, a municipality’s failure to comply strictly with the publication and distribution requirements of the MPC is fatal, and a timely filed procedural validity challenge will result in invalidation of the ordinance, as in Messina v. East Penn Township, 62 A.3d 363, 372 (Pa. 2012).
However, this may not be the case with respect to noncompliance with the requirements of Act 36, as Section 109(10) provides that “failure of an owner … to receive a requested mailed notice or electronic notice shall not be deemed to invalidate any action or proceedings under this act.”
The significance of Act 36 may have been heightened by the Pennsylvania Supreme Court’s recent decision in Robinson Township v. Commonwealth, 2013 Pa. LEXIS 3068 (Pa. 2013), in which the court concluded that several provisions of Act 13, the General Assembly’s 2012 comprehensive update to the former Oil and Gas Act, were unconstitutional. One of the provisions invalidated by the court was Section 3304, which imposed certain limitations on a municipality’s authority to regulate, by ordinance, oil and gas development within its borders. As a result of the court’s ruling, it is reasonable to expect an increase in municipal ordinance activity regulating the oil and gas industry.
Act 36 will increase the likelihood that absentee surface and mineral rights owners will become aware of and participate in public hearings on new, potentially adverse proposed ordinances before they are adopted.
*Reprinted with permission from the 2/18/14 issue of The Legal Intelligencer. © 2014 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Pittsburgh Tribune Review
Seven months of sometimes-contentious meetings by a statewide task force focused on the expanding network of gas pipelines generated a starting point for debate but no binding directives.
“It’s not meant to be the final word but a start of a conversation,” Department of Environmental Protection Secretary John Quigley said Thursday about the final report issued by the Pipeline Infrastructure Task Force he chaired.
The report includes 184 suggestions for streamlining the permit process, improving safety, ensuring environmental protection around pipelines and easing the growing strain between pipeline builders and community leaders. The industry needs additional pipeline as it produces more gas from Marcellus and Utica shale, but a complex permitting process and community opposition are slowing the buildout, Quigley acknowledged.
Seven task force meetings were punctuated by protests, arrests of environmentalists and frustration voiced by some members about how the report would be presented.
Because some of the suggestions faced opposition from within the task force, its 48 members chosen by Gov. Tom Wolf voted on the top 12 recommendations for further consideration. They include encouraging pipeline companies to meet earlier and more often with communities, more training for emergency responders, expanding agency staffing and expanding oversight of smaller gathering lines under the state’s one-call system.
The task force, which delivered its report to Wolf for consideration, said thousands of miles of pipelines are planned. Inadequate infrastructure has contributed to a supply glut in the region that is pushing down prices.
The report identifies appropriate agencies to review each suggestion but requires no action.
The Public Utility Commission, which is seeking to take over operation of the one-call system, and the Pennsylvania Energy Infrastructure Alliance commended the report.
“We look forward to working with the Governor’s Office, the General Assembly and other stakeholders to begin putting these measures into action to further safeguard our vital infrastructure,” said PUC Chair Gladys Brown, a member of the task force.
Industry groups, companies and their representatives on the task force expressed concerns about recommendations that would require new laws or that conflict with existing laws.
“Many of these recommendations … are adequately addressed by existing federal and state regulations and programs, making them redundant with limited additional environmental or public benefit,” wrote Pamela Faggert, chief environmental officer for pipeline company Dominion. The 658-page report included comments from the public and from task force members, some showing wide disagreement on the panel.
“The (task force) members were not allowed ample time to review, consider, discuss, edit or combine the recommendations published in this report,” wrote member Cristina Jorge Schwarz of environmental consultant Apex Cos.
Quigley acknowledged state agencies would need to review any recommendation before considering action, and that some of the report’s suggestions related to issues already covered by regulations.
“Reminders, in my view, are OK,” he said.
DEP officials have started meeting more regularly with agencies that oversee pipeline permits, such as the Army Corps of Engineers and the Federal Energy Regulatory Commission, Quigley said.
Expanding state oversight of issues that are under federal purview will likely face resistance, though, said Keith Coyle, an energy attorney in Washington for Pittsburgh law firm Babst Calland. He was one of more than 100 people who served on working groups that advised the task force.
“What we don’t want is legislation at the state level to get ahead of federal oversight,” he said, noting the gathering line issue. The federal Pipeline and Hazardous Materials Safety Administration plans to release rules covering the lines that run from wells to larger transmission lines.
David Conti is the assistant business editor at the Tribune-Review. Reach him at 412-388-5802 or dconti@tribweb.com.
The Legal Intelligencer
Employment law does not adhere to the biblical injunction that “No servant can serve two masters …” Under many regulatory schemes the law recognizes that two (or more) employers may owe legal duties to a single employee. Many businesses have decreased their direct employee head count by relying upon staffing firms to provide temporary employees, or outsourcing certain functions entirely. The National Labor Relations Board, or NLRB, and the Wage Hour Division, or WHD, of the United States Department of Labor have announced new rules applicable to their review of the joint employment issues created by these changes. These new rules will expand application of traditional labor and employment laws to businesses that do not consider themselves to be the “employer” of temporary or contracted employees.
NLRB’s Treatment of Joint Employers
In Boire v. Greyhound, 376 U.S. 473, 481 (1964), the state Supreme Court held that common law concepts of employment were intended to define the employment relationship under the National Labor Relations Act, and endorsed the NLRB’s theory that two statutory employers could jointly employ a single workforce if both “possessed sufficient control over the work of the employees.” At a later stage of the case, the NLRB held that joint employer status was demonstrated by proof that two separate employers “shared, or codetermined, those matters governing essential terms and conditions of employment ….” The U.S. Court of Appeals for the Third Circuit ultimately endorsed the NLRB’s Greyhound joint employer analysis in NLRB v. Browning-Ferris Industries of Pennsylvania, 691 F.2d 1117 (3d Cir. 1982), enf’g, 259 NLRB 148 (1981). There, the court stated that: The basis of the [joint employer] finding is simply that one employer while contracting in good faith with an otherwise independent company, has retained for itself sufficient control of the terms and conditions of employment of the employees who are employed by the other employer… Thus, the “joint employer” concept recognizes that the business entities involved are in fact separate but that they share or codetermine those matters governing the essential terms and conditions of employment.
Although its approach to joint employer relationships had received judicial endorsement, the NLRB over time strayed from strict application of the standard, eventually causing the Board itself to conclude that its cases in actual practice required that the actual exercise of control to be “direct, immediate, and not ‘limited and routine,'” as in Browning-Ferris Industries of California (BFI of CA), 362 NLRB No. 186, 204 LRRM (BNA) 1154, 1167 (2015)(quoting AM Property Holding Corp., 350 NLRB 998, 1001 (2007)).
In BFI of CA, decided in August 2015, the NLRB criticized itself for relaxing its approach to the joint employer issue just as “the diversity of workplace arrangements in today’s economy has significantly expanded.” Id. The NLRB determined to return to the traditional test it had adopted in Greyhound, as endorsed by the Third Circuit in Browning-Ferris: The Board may find that two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating the allocation and exercise of control in the workplace, we will consider the various ways in which joint employers may “share” control over terms and conditions of employment or “co-determine” them, as the board and the courts have done in the past.
There has been much alarm raised in response to the BFI of CA decision. Most temporary employee and contractor arrangements entered into during this period have been structured in reliance of the NLRB’s emphasis on the actual exercise of control as the determinative factor in the creation of a joint employer relationship. Those arrangements are now all suspect under the rejuvenated joint employer standard.
WHD’S Interpretation of Joint Employer Obligations
The Wage and Hour Division issued enforcement guidance on joint employment under the Fair Labor Standards Act (FLSA) on Jan. 16. The interpretation purports in part to clarify the WHD’s existing regulations addressing joint employer relationships, which were last amended in 1961. The guidance addresses the enforcement issues raised by employers “sharing employees or using third-party management companies, independent contractors, staffing agencies or labor providers.” It reiterates WHD’s expansive view of the employment relationship under FLSA and introduces the concepts of “horizontal” and “vertical” joint employment, which are nowhere found in the current regulations.
• Employment under the FLSA.
The FLSA’s definition of employer is different from that used by the NLRB, and far more expansive: employ is defined to include “to suffer or permit to work.” That definition has been described as “‘the broadest definition that has ever been included in any one act,'” as in S. v. Rosenwasser, 323 U.S. 360, 363 n.3 (1945). In contrast to the NLRB’s adoption of the common law “right to control” test, the WHD defines the term employee with reference to a broad “economic realities” test: Unlike the common law control test, which analyzes whether a worker is an employee based on the employer’s control over the worker and not the broader economic realities of the working relationship, the “suffer or permit” standard broadens the scope of employment relationships covered by the FLSA. The test for joint employment under the FLSA … is thus different, for example, than the test under other labor statutes, such as the National Labor Relations Act, 29 U.S.C. 151 et seq. Thus, where the NLRB might conclude that an entity is not a joint employer, the WHD might determine that it is.
• Horizontal joint employment.
The interpretation states that the “structure and nature of the relationship(s) at issue determine whether a particular case should be analyzed under horizontal or vertical joint employment, or both.” The existing regulations define what the WHD now terms “horizontal joint employment”: “if the facts establish that the employee is employed jointly by two or more employers, i.e., that employment by one employer is not completely disassociated from employment by the other employer(s), all of the employee’s work for all of the joint employers during the workweek is considered as one employment for purposes of the Act.” The focus of the inquiry is on the “relationship between the two (or more) employers.” The interpretation provides an example of horizontal joint employment two restaurants with common ownership who interchange employees, and lists several other factors significant to the analysis.
• Vertical joint employment.
“Vertical joint employment” analysis focuses on “the economic realities of the relationships” between two nominally separate employers “to determine whether the employees are economically dependent on those potential joint employers and are thus their employees.” It is intended to capture both parties in the traditional “temp agency” model: In vertical joint employment situations, the other employer has typically contracted or arranged with the intermediary employer to provide it with labor and perform for it some employer functions, such as hiring and payroll. There is typically an established or admitted employment relationship between the employee and the intermediary employer. That employee’s work, however, is typically also for the benefit of the other employer.
• Impact of joint employer determination under the FLSA.
The WHD states plainly that in joint employer situations, all hours worked for both employers must be counted for purposes of overtime, and “all of the joint employers are jointly and severally liable for compliance with the FLSA ….” In a circumstance where WHD finds joint employers, an employee of both may be entitled to overtime compensation even though the employee did not work more than 40 hours in a week for either of them.
For any business party to a temporary staffing or contracting arrangement, whether as the customer or the supplier of labor, it would be prudent to examine the arrangement in light of the changed approaches announced by the NLRB and WHD. Existing indemnity arrangements may have to be restructured, and the financial terms might have to be reconsidered in light of the “economic realities” of the changed regulatory climate.
*Reprinted with permission from the 2/6/16 issue of The Legal Intelligencer. © 2016 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Pittsburgh Tribune Review
The decline in shale gas drilling in Pennsylvania prompted some law firms to dial back practice areas they formed to serve the industry during the past few months.
Downtown-based Babst Calland is instead expanding, opening a Washington office — its sixth location — with two lawyers handling issues involving energy, pipeline safety and hazardous materials.
Managing shareholder Chester R. “Chip” Babst III, one of the lawyers who founded the firm in 1986, said the move fits with its focus on environmental and regulatory law. Babst, 68, a fifth-generation Pittsburgher, spoke with the Tribune-Review about the expertise he and the firm built around an ever-changing regulatory environment.
For The Defense
The Payment Card Industry Data Security Standards (PCI DSS), developed by the PCI Security Standards Council, are a set of 12 requirements that are designed to create a minimum level of secure data management practices for banks and vendors that accept and process payments using payment cards. Most retail and hospitality companies process hundreds to thousands of payment card transactions each day, yet many of these companies do not comply with these standards. Even worse, many of the companies that are not compliant do not even realize it.
Retail and Hospitality Organizations Are Attractive Targets
Retail and hospitality companies are extremely attractive, data-rich targets for cyber-criminals, and it is important that their leaders and lawyers know why. Hospitality and retail companies are now, more than ever, providing interactive guest experiences. As technology advances facilitate an increase in interaction, there is a corresponding increase in entry points to and vulnerability among these companies. By their nature, these companies have a higher transaction frequency than companies in many other industries. High transaction turnover is valuable because of the increase in opportunity. Payment card data collected in transit is active and more likely to be valid and more valuable to cyber-criminals than older stored data. Another point to consider when weighing the value of these industries’ data is that hospitality and retail companies process expendable income transactions more often than other industries.
The PIOGA Press
The Pennsylvania Department of Environmental Protection announced in the December 19 Pennsylvania Bulletin additional meetings of the Conventional Oil and Gas Advisory Committee (COGAC) and the Oil and Gas Technical Advisory Board (TAB) on December 22. The purpose of these meetings, which were held as conference calls, were for the two advisory groups to consider comments to be submitted to the Environmental Quality Board regarding the final rulemaking amending 25 Pa. Code Chapter 78 (for conventional wells) and Chapter 78a (for unconventional wells) pertaining to environmental protection performance standards at oil and gas well sites.
The Legal Intelligencer
Pittsburgh-based Babst Calland has opened an office in Washington, D.C., the firm announced Monday, bringing a new niche to its energy and natural resources practice.
Babst Calland is bringing on two attorneys as shareholders in the new office. James Curry and Keith Coyle have focused their practices on pipeline safety and hazardous materials transportation, according to the firm.
Both attorneys come from Van Ness Feldman, a Washington-based law firm with practices in energy, environment, real estate and land use, and government relations and policy. They both previously represented the Pipeline and Hazardous Materials Safety Administration, a federal agency that oversees gas and hazardous liquids pipelines.
Between stints in the public sector and at Van Ness, Coyle worked in Babst Calland’s Pittsburgh office. Pipeline and hazardous-materials transportation is a subarea of energy law where many of Babst Calland’s existing clients need service, said managing shareholder Chester R. Babst. Previously, his firm had referred much of that work to Van Ness because of the connection to Coyle. About a year ago, Coyle started speaking with Babst about returning to his former firm. “This gives us an area where we felt there was a terrific need and it’s not a need that’s being serviced by any of our competitors in the Appalachian Basin,” Babst said.
Curry estimated that nationwide, about 15 attorneys in the private sector have experience in pipeline and hazardous-materials work. Hiring outside counsel for that service has become more common among energy companies, he said.
“I think that recent significant accidents have sort of sensitized general counsel and company CEOs to the issue that this is a risk area,” Curry said.
Coyle said he sees the move for Babst Calland as a step toward becoming more of a national firm.
“There’s a lot of benefit to being located in D.C., working with the regulators, knowing what’s going on in D.C. … This is kind of where the action is, at least on this particular federal regulatory program,” Coyle said. And for the two Washington attorneys, Coyle added, joining Babst Calland provides a link to a firm that has “actual boots-on-the ground experience” in other regions.
Sean W. Moran, chair of the oil and gas practice group at Buchanan Ingersoll & Rooney, said it’s important for this specialty to be integrated into other areas of the practice. His firm also offers pipeline safety services through attorneys who worked with regulatory agencies.
“Historically, it would have been a relatively small niche practice where you would have only seen people in places where the regulatory agencies existed, like Washington, D.C., state capitals,” Moran said. “It’s an area you would expect to continue to grow as natural gas plays a larger and larger role in the industry” and as the pipeline infrastructure grows.
Babst said Curry and Coyle will bring many of their existing clients with them. He said he expects to hire up to five more attorneys in the near future in the new office to handle new pipeline and hazardous-materials clients.
“They both come over to the firm with a pretty full plate of business of their own,” Babst said. “We consider this to be both advantageous from the standpoint of the direct work they will bring, but it’s also … keeping our firm in the view of our clients as being someone who can handle their various problems, no matter what they are.”
While some energy law practices have suffered thanks to price declines, Babst said his firm actually came out ahead in 2015 compared to 2014. He said the broad number of energy and environmental services the firm offers has helped.
“If the economy goes down they don’t stop enforcing environmental regulations,” he said. “Pipeline safety is the same thing.”
The firm officially opened the Washington location Monday.
Babst Calland has more than 135 attorneys in six offices. In addition to Pittsburgh, Washington and State College, it has offices in New Jersey, Ohio and West Virginia.
*Reprinted with permission from the 1/25/16 issue of The Legal Intelligencer. © 2016 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Pittsburgh Business Times
One of Pittsburgh’s largest law firms on Monday opened a Washington, D.C., office.
Babst Calland Managing Shareholder Chester “Chip” Babst III confirmed exclusively to the Business Times that two key hires enabled Pittsburgh’s seventh-largest law firm to set up shop in the nation’s capital, and add complementary expertise.
Pipeline & Gas Journal
2015 has been a busy year of new challenges and issues facing the Appalachian oil and gas industry whose rig count in the Appalachian Basin and elsewhere is down substantially compared to the previous two years. A significant challenge ahead for shale developers in a lower price environment is to continue to be productive and active in finding land, drilling wells, and getting the natural resource to market. The following is a summary of our most recent report (published in May) on the issues and challenges facing midstream operators in the Appalachian Basin.
The Legal Intelligencer
The Pennsylvania Supreme Court recently rendered a decision in Reading Area Water Authority v. Schuylkill River Greenway Association, 100 A.3d 572 (Pa. 2014), further narrowing the definition of what constitutes a “public purpose” for a taking by eminent domain in Pennsylvania. The Reading opinion is significant, as it constitutes yet another Pennsylvania decision favoring the protection of private property rights from seizure by the government. The decision is particularly noteworthy in the context of the U.S. Supreme Court’s controversial expansive view of the eminent domain power in Kelo v. City of New London, 454 U.S. 469, from 2005.
Kelo involved a city’s use of its eminent domain power to take privately owned property to enable its redevelopment by a private developer, who proposed a higher-yielding economic use for the property. In Kelo, the Supreme Court held in a divided 5-4 opinion that such economic development projects can qualify as a “public purpose” under the “public use” provision of the takings clause of the Fifth Amendment of the U.S. Constitution, even where private enterprise drives the development-state and local governments can, for the purpose of improving the community, seize private property via eminent domain to enable private development.
In the wake of the Kelo decision, several states, including Pennsylvania, passed legislation restricting the use of eminent domain for private business. Specifically, on May 4, 2006, the Pennsylvania General Assembly enacted the Property Rights Protection Act, which amended Title 26 (eminent domain) of the Pennsylvania Consolidated Statutes by adding a new Chapter 2, titled “Limitations on Use of Eminent Domain.” In pertinent part, Section 204(a) of the Property Rights Protection Act expressly prohibits, with only a few limited exceptions, state and local governments from condemning private property for use by private entities.
Now, almost nine years after the enactment of the Property Rights Protection Act, Pennsylvania courts are still defining the parameters of the act’s restriction on state and local governments’ power to condemn private property for use by private entities.
Most recently, in Reading, the state Supreme Court concluded that a municipal authority could not exercise its eminent domain powers to condemn an easement over privately owned land where the sole purpose of the easement was to allow a private developer to install sewer and stormwater facilities necessary for a proposed private residential development.
At issue in Reading was a strip of property located in Bern Township along the banks of the Schuylkill River and owned by the Schuylkill River Greenway Association. Greenway intended to partner with Bern Township to build a public walking/recreational trail on the land, which was adjacent to the 58-acre tract of land where the private developer proposed to construct a 219-unit residential development. In order to build the development, however, the private developer needed to obtain access to a clean water supply and sanitary and stormwater sewer facilities. The developer identified a potential water main connection under the Schuylkill River and worked with the Reading Area Water Authority (RAWA), a municipal authority created by the city of Reading, to obtain a utility easement across the Greenway property to reach it. The proposed 50-foot-wide easement would allow the developer to run water, sewer and stormwater conduits from the developer’s property to the Schuylkill River.
Private negotiations with Greenway, however, failed. As a result, RAWA adopted a resolution authorizing the use of its eminent domain power to condemn the utility easement. RAWA’s resolution reflected that: (1) the easement was to be condemned at the developer’s request; (2) the easement would be used to construct, maintain and operate utility lines and appurtenances of a water main to be placed under the Schuylkill River for water, sewer and stormwater facilities necessary for the construction of the proposed development; (3) the developer would be responsible for initiating the eminent domain proceedings in conjunction with RAWA’s solicitor; and (4) the developer would be responsible for all costs associated with the eminent domain proceedings, including just compensation to Greenway.
Next, the city of Reading passed a resolution authorizing RAWA to undertake the portions of the project unrelated to water works-the sewer and stormwater portions. Shortly thereafter, RAWA filed a declaration of taking complaint requesting a decree condemning the 50-foot-wide utility easement across Greenway’s property.
In response, Greenway filed preliminary objections, alleging that: (1) RAWA’s taking for sewer/stormwater drainage purposes was invalid under the Property Rights Protection Act because it was accomplished solely for the benefit of private enterprise-the developer’s proposed residential development; and (2) the proposed utility easement was wider than necessary to accommodate the water connection, which was the only proposed service that fell legitimately within RAWA’s function.
After hearing testimony from the Bern Township manager concerning the degree to which the easement would interfere with Greenway’s proposed walking trail, the trial court sustained Greenway’s preliminary objections. The trial court specifically noted that the sewage and stormwater management facilities would be privately owned by the developer and the primary beneficiary of the condemnation would be the developer, not the general public. The Commonwealth Court, however, reversed, explaining that RAWA may exercise eminent domain for the stated purpose-the installation of a water main and sewer and stormwater lines-because it obtained permission from the city of Reading to engage in a project that exceeds water supply works to include sewer and stormwater services. The Commonwealth Court also explained that the fact that RAWA’s exercise of eminent domain incidentally makes the developer’s homes more valuable does not, on its own, negate the project’s public purpose-providing water, sewer and stormwater services to citizens located within RAWA’s service area.
The Supreme Court granted Greenway’s petition for allowance of appeal, in which Greenway contended that neither the Pennsylvania Constitution nor the Eminent Domain Code authorizes RAWA’s condemnation, and that the Property Rights Protection Act affirmatively prohibited RAWA from taking Greenway’s property for the developer’s private use. Agreeing with Greenway, the Supreme Court concluded that RAWA’s condemnation fell within Section 204(a) of the Property Rights Protection Act’s prohibitive scope. In doing so, the Supreme Court acknowledged that this case involved a mix of public and private purposes working in conjunction with one another and that RAWA is authorized, as a municipal authority, to exercise the power of eminent domain to provide the public with water and, possibly, sewer and stormwater services.
However, the Supreme Court also noted that it is well settled in Pennsylvania that “land may only be taken without the owner’s consent if it is taken for a public use,” otherwise such a taking will “be overturned as excessive.” Applying this well settled principle to the facts of the case, the Supreme Court explained that RAWA did not purport to condemn the easement across Greenway’s property so that it could, itself, provide the public with water, sewer and stormwater services (i.e., RAWA did not condemn the property for a public use). Rather, RAWA only sought to condemn Greenway’s property to provide a utility easement to the developer, which would finance the project and acquire exclusive use of the drainage easement to install, operate and maintain private stormwater and sewage discharge facilities, thus enabling it to construct a private residential development.
Although the Reading decision is significant because it evidences a continuing trend in Pennsylvania to favor the protection of private property rights from seizure by the government via eminent domain, the scope of the decision is not without limitations.
For example, the Pennsylvania Supreme Court declined to analyze the taking at issue in Reading under the Fifth Amendment. Rather, the Supreme Court relied solely upon an analysis under Pennsylvania’s Eminent Domain Code, specifically Section 204(a) of the Property Rights Protection Act. Thus, despite the Supreme Court’s guidance in Reading, property owners and governments throughout the state will likely continue to face a multitude of challenges in connection with condemnation via eminent domain, particularly with respect to which takings constitute a taking for public purpose or public use. At this juncture, all that can be gleaned with certainty from the post- Kelo decisions handed down in Pennsylvania is that the type of taking that constitutes a public purpose or public use is highly factdependent.
Blaine A. Lucas is a shareholder and Alyssa E. Golfieri an associate in the public sector services and energy and natural resources groups of the Pittsburgh law firm of Babst Calland. Lucas coordinates the firm’s representation of energy clients on land use and other local regulatory matters. He also teaches land use law at the University of Pittsburgh School of Law. Golfieri focuses her practice on zoning, subdivision, land development, taxation, real estate, code enforcement, public bidding and contracting
The PIOGA Press
Wastewater management remains a significant challenge for conventional and unconventional oil and natural gas producers in the Commonwealth. The recent slow-down in the pace of new drilling is reducing opportunities for beneficial reuse of produced fluid from operating wells. According to the Pennsylvania Department of Environmental Protection’s oil and gas reporting website, exploration and production companies reported producing 45 million barrels of flowback and produced fluid in 2014, an increase of nearly 5 million barrels from the amount reported in 2013. The increase in wastewater created by extraction highlights the importance of several state and federal regulatory efforts that could affect the handling and disposal of such material in 2016.
The Legal Intelligencer
On Oct. 29, the Pennsylvania Supreme Court rendered a decision in Scott v. City of Philadelphia, 2015 Pa. LEXIS 2510 (Pa. 2015), clarifying the difference in the law related to standing before a zoning hearing board governed by the Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq., (MPC) and standing before a zoning board of adjustment governed by the Pennsylvania First Class City (i.e., Philadelphia) Home Rule Act, 53 P.S. Section 13131.1, (“Home Rule Act). Attention to the intricacies of the law governing standing is critical because a failure to challenge an objector’s standing at the appropriate stage of a proceeding can result in the use of an applicant’s property being interrupted or prevented by an objector who may not be directly impacted by that use.
The law regulating standing to appear before, present evidence to, and thereafter appeal a decision from a zoning hearing board governed by the MPC differs at each stage of a proceeding. First, standing to initiate an appeal to a zoning hearing board is limited by Section 913.3 of the MPC to: (1) affected landowners; (2) officers or agencies of the municipality; and (3) persons aggrieved. Once an appeal is filed, standing to appear before the board (i.e., standing to respond to and present evidence, advance arguments and cross-examine adverse witnesses on all relevant issues) is limited by Section 908(3) of the MPC to “parties,” which are defined as: the municipality; any person affected by the application who has made timely appearances of record before the zoning hearing board; and any other person, including civic or community organizations, permitted to appear before the board. Once a person becomes a party before a zoning hearing board without objection by the applicant, the person is considered “necessarily aggrieved” by an adverse decision of the board and is entitled to appeal the board’s decision to court.
In stark contrast to the MPC, the Home Rule Act does not limit who may bring, attend and participate in a hearing before the Philadelphia Zoning Board of Adjustment (ZBA). Thus, unlike hearings under the MPC, once an appeal is brought before the ZBA, anyone is free to attend and address the board during a hearing (i.e., anyone is free to respond to and present evidence, advance arguments and cross-examine adverse witnesses on all relevant issues). Standing only becomes relevant in a hearing governed by the Home Rule Act when a decision of the ZBA is appealed to court. Pursuant to Section 17.1 of the Home Rule Act, only persons aggrieved by a ZBA decision have standing to appeal the decision to court.
Pennsylvania courts have explained, in instances under both the MPC and the Home Rule Act, that to establish “aggrieved” status for purposes of standing, a party must have a substantial, direct and immediate interest in the claim sought to be litigated, as held in Laughman v. Zoning Hearing Board of Newberry Township, 964 A.2d 19 (Pa.Cmwlth.2009). In order to have a substantial interest, there must be some discernible adverse effect to some immediate interest other than the abstract interest of all citizens in having others comply with the law, as in Pilchesky v. Doherty, 941 A.2d 95 (Pa.Cmwlth.2008). Accordingly, courts have deemed persons to be aggrieved where they have suffered or will suffer “injury in fact,” as in William Penn Parking Garage v. City of Pittsburgh, 464 Pa. 168, 346 A.2d 269 (1975).
The facts underlying the Scott decision illustrate the confusion that arises when analyzing the law regarding standing before a zoning hearing board versus a ZBA. In Scott, FT Holdings, a developer who was in the process of developing a three-phase residential condominium complex in Philadelphia, submitted a zoning/use permit application to the Philadelphia Department of Licenses and Inspections seeking various approvals necessary to implement the third phase of its development. Specifically, the developer sought approval to relocate, consolidate and merge various lot lines associated with three adjacent lots; demolish existing structures on two of these three lots; and erect a four-story residential structure on the lots. Despite the developer’s receipt of all necessary approvals for the first two phases of the development, the Department of Licenses and Inspections denied the developer’s application for phase three on the basis that the proposed residential structure violated several provisions of the Philadelphia Zoning Code.
The developer appealed the Department of Licenses and Inspections’ denial to the ZBA and, in conjunction therewith, requested the appropriate variances. The ZBA held a hearing on the request, during which a property owner, through his legal counsel, objected to the approval of the developer’s request, asserting that the developer had failed to establish undue hardship sufficient to warrant a variance; the proposed residential structure did not conform to the character of the neighborhood; there would be less light on the street once the proposed residential structure was built; and the proposed structure would create traffic and parking issues. The ZBA, finding no merit in the objector’s unsubstantiated assertions, granted the requested variances.
The objector next appealed the ZBA’s decision to the trial court. The developer intervened and moved to quash the appeal on the basis that the objector lacked standing. Specifically, the developer argued, among other things, that the objector was not aggrieved by the ZBA’s decision as required by Section 17.1 of the Home Rule Act and thus lacked standing to challenge the decision on appeal; the objector presented no evidence that his interest would be affected by the proposed development; and the objector’s concerns were general to the neighborhood and did not demonstrate any negative impact on him in particular. In response, the objector argued that the developer waived any right to challenge standing before the trial court because it did not challenge the objector’s standing before the ZBA. Finding the objector’s argument unpersuasive, the trial court quashed the appeal. The objector appealed to the Commonwealth Court, which reversed. In doing so, the Commonwealth Court, relying upon precedent established under the MPC, explained that challenges to an objector’s standing must be raised before a ZBA or are otherwise waived. Thus, the Commonwealth Court concluded that the trial court should have heard the merits of the objector’s appeal.
The Pennsylvania Supreme Court granted the developer’s petition for allowance of appeal and reversed the Commonwealth Court’s ruling, concluding that the developer properly raised its challenge to standing, for the first time, before the trial court. In reaching this decision, the court thoroughly analyzed the statutory and precedential authority applicable to proceedings before and appeals from zoning hearing boards governed by the MPC versus the ZBA governed by the Home Rule Act. Emphasizing the vast difference between the law applicable to each type of board, the court held that, pursuant to the Home Rule Act, the objector’s ability to appear and participate before the ZBA is separate and distinct from the objector’s standing to appeal the ZBA’s decision to court. Thus, the court concluded that the first time that the developer was able to challenge the objector’s standing was before the trial court. The Scott decision is significant in that it clearly articulates the difference in the law of standing before a zoning hearing board governed by the MPC versus the ZBA. In addition, the court in Scott clarified that, due to the MPC’s express restrictions on standing before a zoning hearing board, applicants before a zoning hearing board governed by the MPC must first challenge an objector’s standing before the board. Failure to do so constitutes a waiver of such a challenge and subjects the applicant to a court appeal by an objector who may not be directly impacted by the applicant’s use of the property. Conversely, in light of the Home Rule Act’s silence on standing before the ZBA, applicants are not required to challenge an objector’s standing before the ZBA, but rather may raise such a challenge, for the first time, on appeal to court.
Blaine A. Lucas is a shareholder and Alyssa E. Golfieri an associate in the Public Sector Services and Energy and Natural Resources Groups of the Pittsburgh law firm of Babst, Calland, Clements & Zomnir. In these capacities, Lucas coordinates the firm’s representation of energy clients on land use and other local regulatory matters. He also teaches land use law at the University of Pittsburgh School of Law. Golfieri focuses her practice on zoning, subdivision, land development, taxation, real estate, code enforcement, public bidding, and contracting matters.
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