Brianne K. Kurdock has joined law firm Babst Calland as a shareholder in its Energy and Natural Resources Group and newest member of its Pipeline and Hazardous Materials Safety practice in Washington, D.C.
Ms. Kurdock joins Babst Calland from the Interstate Natural Gas Association of America (INGAA), the national trade organization for interstate gas pipelines, where she served as the primary regulatory attorney. Kurdock is reuniting with her former colleagues, energy attorneys James Curry and Keith Coyle, all of whom previously worked together at the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency that oversees the safety of the country’s vast network of gas and hazardous liquids pipelines. Attorneys Curry and Coyle joined Babst Calland in January of this year when the firm opened its new Washington, D.C. office.
At PHMSA, Ms. Kurdock handled regulatory, enforcement, and litigation matters involving the federal regulation of oil and gas pipelines and liquefied natural gas facilities. She also served as regional counsel in administrative enforcement cases and incident investigations. While at PHMSAMs. Kurdock served as lead attorney for special permit applications and rulemaking initiatives and represented PHMSA in inter-agency meetings with the Department of Justice, the Federal Energy Regulatory Commission, the Environmental Protection Agency and the Department of the Interior.
Ms. Kurdock previously represented clients in connection with land use and environmental issues as an associate in a private law firm in New Jersey. She also served as a law clerk in the Superior Court of New Jersey. Ms. Kurdock is admitted to practice in New Jersey and New York. She received her J.D. from Seton Hall University School of Law, and a B.A. in Government from the University of Virginia.
“Brianne Kurdock’s addition to our nationally-recognized energy and environmental practice further demonstrates our firm’s commitment to providing industry experience and value to our clients,” said Chester R. Babst III, managing shareholder of Babst Calland. “Together, Attorneys Kurdock, Curry and Coyle add to our energy and environmental capabilities and bring focused training and work experience in compliance, regulatory and legislative affairs, strategic counseling, enforcement, litigation, and audit preparation in the area of pipeline and hazardous materials safety ,” said Babst.
The firm’s new office in the nation’s capital is located at The Southern Building at 805 15th Street NW, Suite 601, Washington, D.C.
The Legal Intelligencer
On Jan. 13, the Commonwealth Court rendered a decision in Honey Brook Estates v. Board of Supervisors of Honey Brook Township, 2016 Pa. Commw. LEXIS 52 (Pa. Commw. Ct. 2016), that reaffirmed a municipality’s obligation to act in good faith when processing subdivision and land development plans. The Commonwealth Court originally articulated the elements of this obligation in Raum v. Board of Supervisors, 370 A.2d 777 (Pa. Commw. Ct. 1977).
In Raum, a landowner submitted a subdivision plan for review and approval approximately 80 days before the township was scheduled to act on a proposed rezoning of the landowner’s property. Upon receipt of the landowner’s plan, the township did nothing but attempt to derail the landowner’s approval. Specifically, the township waited until the last possible moment (i.e., two days before enacting the proposed rezoning) to raise objections to the plans, then claimed there was insufficient time to consider modifications made in response to the township’s objections. Finding the township had a “deliberate, pervasive plan and intent to thwart” the landowner’s development and thus acted in bad faith, the Commonwealth Court ruled that the landowner was entitled to plan approval. In reaching this conclusion, the court stated: “A municipality has a legal obligation to proceed in good faith in reviewing and processing development plans. The duty of good faith includes discussing matters involving technical requirements or ordinance interpretation with an applicant, and providing an applicant a reasonable opportunity to respond to objections or to modify plans where there has been a misunderstanding or difference.”
Nearly 40 years later, in Honey Brook Estates, the court revisited the parameters of a municipality’s obligation to review development plans in good faith. There, a landowner purchased property in Honey Brook Township with the intent of constructing a 78-unit residential development. However, approximately five months after purchasing the property the landowner learned that the township planned to rezone, among other things, its property from residential to agricultural. In order to vest its right to use its property for residential purposes, the landowner quickly submitted preliminary subdivision and land development plans to the township, which rejected the plans as incomplete. In doing so, the township engineer noted five deficiencies in the plans. The landowner remedied these deficiencies and resubmitted amended plans to the township a few days before the proposed rezoning was enacted. The township manager again rejected the amended plans as incomplete, noting, for the first time, that the landowner failed to submit a sewage planning module, a certification of sewer and water facilities, and a traffic study. The township manager also informed the landowner that because the plans were deemed incomplete, the plans would not be forwarded to the planning commission for review and comment.
The landowner objected to the township’s decision and requested reconsideration, arguing the township was imposing requirements on it that had never been imposed on a preliminary plan applicant. The township, upon advice from its solicitor, who agreed that the township “has [previously] been far less technical in its objections to completeness of plans,” decided, unbeknown to the landowner, to forward the plans to the planning commission. In its cover letter to the planning commission, the township: (1) listed 93 critical comments on the merits of the plans; (2) disclosed that it believed the plans were incomplete; (3) noted that the commission’s review would not invalidate the earlier finding that the plans were substantially incomplete and should be rejected; and (4) explained the plans were only being forwarded for review and comment out of an abundance of caution. The planning commission, after noting the absence of the landowner, voted to recommend disapproval of the amended plans.
Unaware that the planning commission had reviewed and recommended disapproval of the plans, the landowner submitted to the township supplemental documentation related to its sewage planning module, certification of sewer and water facilities and traffic study. Since the planning commission had already recommended disapproval of the plans, the township returned the supplemental documentation. The township board of supervisors then rejected the landowner’s amended plans, citing 59 reasons for its decision. Neither the planning commission nor the board of supervisors reviewed the landowner’s supplemental documentation.
Asserting that bad faith and irregularities in the township’s review deprived it of the opportunity to have its plans reviewed objectively on the merits, the landowner appealed the board of supervisors’ decision. On appeal, the trial court granted the parties permission to present evidence on the township’s alleged bad faith. Part of the evidence presented consisted of depositions from the township engineer and the township manager. The township engineer testified that the township was concerned that developers, after learning of the proposed rezoning, would rush to beat its enactment and file preliminary development plans haphazardly. In reaction to this concern, the township revised its plan review policy to prohibit incomplete preliminary plans from entering the township’s review cycle.
The township engineer further testified that the township did not advise the public of this policy change. In addition, the township manager testified that prior to the implementation of the township’s new review policy, he could not recall a single instance where a preliminary plan was not submitted to the planning commission as a matter of course or a landowner was not present during a meeting at which the planning commission considered its plans.
Finding the landowner’s allegation of bad faith lacked merit, the trial court affirmed the board of supervisors’ decision. The landowner appealed to the Commonwealth Court, which reversed. In doing so, the court reiterated the Raum principle that a municipality is obligated to act in good faith when processing subdivision and land development plans.
Analyzing the township’s actions under the Raum standard, the Commonwealth Court found that the township acted in bad faith when it: (1) continued to find new reasons to object to the plans after the landowner revised the same in response to township comments; (2) denied the landowner the opportunity to present supplemental documentation to the planning commission and board of supervisors; (3) told the landowner the plans would not enter the township’s review cycle, then did an about-face and sent the plans to the planning commission for review and comment without notifying the landowner; and (4) offered the planning commission volumes of additional materials and new reasons why the landowner’s plans should be denied. The Commonwealth Court remanded the matter back to the township board of supervisors with instructions that it review the landowner’s plans under the zoning ordinance in existence at the time the plans were submitted, provide input on technical requirements and ordinance interpretation, identify objections to and deficiencies in the plans, and provide the landowner the opportunity to respond to the same.
The Commonwealth Court’s decision in Honey Brook Estate is an important reminder to municipalities that they must review and consider land-use applications in good faith. Local land-use officials cannot use the process to thwart development plans, and indeed they have an affirmative obligation to work with applicants to identify ordinance requirements and give them a reasonable opportunity to respond to objections.
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 and Zomnir. 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, code enforcement and public bidding matters.
*Reprinted with permission from the 4/24/16 issue of The Legal Intelligencer. © 2016 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
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Midstream Business
Stunned by a judge’s advisory ruling in early March that could put many contracts with upstream partners up for renegotiation, midstream operators warily await a more definitive ruling in the Sabine Oil & Gas bankruptcy case as the realization sets in that a key advantage in putting deals together could be lost. The ruling by U.S. Bankruptcy Judge Shelley Chapman authorized Sabine to reject gathering and processing contracts with two midstream companies, Nordheim Eagle Ford Gathering LLC and HPIP Gonzales Holdings LLC because the E&P could not meet minimum production requirements and faced substantial financial penalties of up to $35 million.
The ruling by U.S. Bankruptcy Judge Shelley Chapman authorized Sabine to reject gathering and processing contracts with two midstream companies, Nordheim Eagle Ford Gathering LLC and HPIP Gonzales Holdings LLC because the E&P could not meet minimum production requirements and faced substantial financial penalties of up to $35 million.
The argument by the midstream companies that the “covenant running with the land” language in the contracts would preclude rejection by the debtor was put aside for another day, but the judge made it clear in a non-binding ruling that the agreements in question do not “run with the land” in her interpretation of Texas law.
“From a practical standpoint, what it says is, all these contracts that rely on acreage dedications are in play,” bankruptcy attorney David Ross of Babst Calland told Hart Energy. The hard line that midstream companies had assumed they could take, that the “covenant” language assured them of payment because the agreement was tied to the land and not to the owner, is now open to be challenged. Read more ›
The PIOGA Press
On March 17, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of its long-awaited notice of proposed rulemaking (NPRM) for gas transmission and gathering pipelines. Under development for more than four years, the NPRM proposes significant changes to the regulations for gas pipeline facilities in 49 C.F.R. Part 192.
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Marcellus Business Central
On March 17, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed new regulations to update critical safety requirements for natural gas pipelines. The prior legislation, the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, expired at the end of FY 2015 but called for PHMSA to evaluate the need for additional damage prevention and inspection regulations.
The 549-page, pre-publication edition of the proposed regulations for gas transmission and gathering lines took over four years to make and includes four congressional mandates, one recommendation from GAO, and six recommendations from the National Transportation Safety Board (NTSB).
PHMSA’s new proposals include a climate action plan to reduce methane emissions and inspections for previously exempt gas pipelines built before 1970, such as the PG&E pipeline that exploded and started fires in San Bruno, CA in 2010, killing eight people and leveling 35 houses, and the pipeline explosion in 2011 in Allentown, Pa., which killed five people including a 4-month-old child. Both explosions were caused by leaks from old cast-iron natural gas distribution pipelines. NTSB’s investigation of the PG&E natural gas pipeline failure concluded that hydrostatic testing of grandfathered pipelines would have likely have prevented the explosion.
The proposed regulations would also broaden the scope of safety coverage by adding new assessment and repair criteria for gas transmission pipelines, including pipelines that pass through areas of medium population density where a failure could pose a serious risk to residents.
The significant growth in the nation’s production, usage and commercialization of natural gas is placing unprecedented demands on the nation’s pipeline system,” said U.S. Transportation Secretary Anthony Foxx.
“This proposal includes a number of commonsense measures that will better ensure the safety of communities living alongside pipeline infrastructure and protect our environment.”
The U.S. DOT stated it expects the proposed changes to result in fewer incidents, which could lead to a reduction in greenhouse gases, with average annual reductions of 900-1,500 metric tons of carbon dioxide and 4,600-8,100 metric tons of methane.
The new regulations will affect the 16 new “greenfield” transmission pipelines planned for the region over the next three years.
“The new regs should have little impact on the construction schedule and total cost of the 16 proposed greenfield projects,” said Dave Messersmith, Penn State extension educator, whose expertise includes natural gas pipeline siting and regulations.
“One of the most costly aspects of the new regulations may be hydrostatic testing of pipelines built prior to 1970, because there are many of these previously exempt pipelines in operation in the Commonwealth, and it will be a significant undertaking to hydrostatically test all of them.”
In addition to interstate pipeline operators being able to invoke the “right of condemnation” or “eminent domain” on private land through which the pipelines run, state owned lands are also not exempt from hosting a natural gas transmission line; however, they are avoided in favor of alternative routes if feasible. The cost of rerouting pipelines is about $5 million per mile, but it can vary significantly, depending on the diameter of the pipeline.
The Babst Calland Pipeline and HazMat Safety team at the law firm’s new Washington, D.C. office, which is led by energy attorneys James Curry and Keith Coyle, reviewed the proposed regulations and issued a three-page white paper outlining several areas that pipeline operators may wish to investigate further.
For example, Curry and Coyle suggested operators assess the scope of materials verification. While the new provision appears to apply only to pipelines in certain locations, cross references to the materials verification rule in several other proposals from PHMSA apply to all transmission lines. The team’s report stated the new regulations would create new materials verification requirements for certain onshore gas transmission lines, modify maximum allowable operating pressure (MAOP) requirements for all gas pipelines and impose strict requirements for verifying the MAOP of certain pipelines.
The proposed regulations would also impact gathering lines.
“While the new proposal for determining whether a pipeline qualifies as a gathering line appears to draw on many of the concepts in the existing regulations, two important changes are notable,” Curry and Coyle state in the report.
“First, the gathering function would begin at a point closer to the wellhead in many cases, thereby narrowing the extent of exempt production operations. Second, new restrictions would be imposed on the use of the incidental gathering designation, potentially expanding the universe of transmission lines in the midstream sector.”
R. Brock Pronko, Regional Business Analyst
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Pittsburgh Business Times
On March 17, 2016, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) released a long-awaited rulemaking proposal that could have a dramatic impact on the gas pipeline industry. More than four years in the making, the proposed rules would make significant changes to PHMSA’s pipeline safety standards by imposing new requirements for gas transmission and gathering lines. This ambitious proposal, issued in the waning days of the Obama Administration, seeks to address a number of issues raised by the Congress, other federal agencies, and the rapid development of energy infrastructure in the nation’s shale plays, particularly in the Marcellus and Utica regions.
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Breaking Ground
On three different occasions over the past year, the Pennsylvania appellate courts have recently elaborated on the potentially broad reach of negligent misrepresentation claims a contractor may have against a design professional for a faulty design, despite the absence of a contract between them.
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Natural Gas Intelligence
One week after the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a pre-publication version of proposed rules governing natural gas transmission and gathering lines, experts agree that it will take some time for producers, pipeline companies, trade associations, state regulators and other stakeholders to sort through the federal agency’s proposals.
But early indications are that stakeholders will focus on the cost of implementing the proposed new rules, and determining how they affect existing state and federal regulations. Read more ›
Employment Bulletin
February 25, 2016 the United States Department of Labor (DOL) published a notice of proposed rule making to implement Executive Order 13706 (found at: https://www.gpo. gov/fdsys/pkg/FR-2015-09-10/pdf/2015-22998.pdf), “Establishing Paid Sick Leave for Federal Contractors,” which requires certain federal contractors to provide their employees with up to seven days of paid sick leave annually, including paid leave allowing for family care (the “Proposed Rule”).
The 80-page proposal (found at: https://www.gpo.gov/fdsys/pkg/FR-2016-02-25/ pdf/2016-03722.pdf) will only be open for public comment through March 28, 2016. Thus, contractors or other interested parties are encouraged to act quickly if they wish to provide the agency with comments before the rule is finalized. To aid in this process and to preview the requirements soon to be imposed on federal contractors, we are providing an overview of the proposal’s key provisions.
Contracts Covered. The Proposed Rule lists four major contract categories to which the executive order applies: (1) procurement contracts for construction covered by the Davis-Bacon Act (the “DBA”), (2) services contracts covered by the McNamara-O’Hara Service Contract Act (the “SCA”), (3) concessions contracts, and (4) contracts in connection with federal property or lands and related to offering services for federal employees or the public. The Proposed Rule states the Order does not apply to contracts worth $3,000 or less, where wages are governed by the Fair Labor Standards Act (the “FLSA”) – nor will it apply to contracts for the manufacturing or furnishing of materials, supplies or equipment.
The rule will apply to new contracts or replacements for expiring contracts with the federal government that result from solicitations issued on or after January 1, 2017. And the “contractors” covered by the rule include not only the prime contractor, but “all of its subcontractors of any tier on a contract with the Federal Government.”
Employees Covered. The employees covered by the rule are individuals who work directly on covered contracts or conduct work “in connection” with covered contracts and whose wages are governed by DBA, SCA or the FLSA, regardless of the employer’s characterization of its contractual relationship with the individual.
The Rule exempts from coverage any employee working 20 hours or less per week “in connection” with the covered contract; which means completing work necessary to complete performance of the contract, but not performing the work directly called for in the contract.
Notably, even if an employee is exempt under the Fair Labor Standards Act or is designated by the employer as an independent contractor, that employee may be entitled to accrue leave.
Accrual of Paid Sick Leave. Contractors must either allow covered employees to earn at least one hour of paid sick leave for every 30 hours of paid time on covered contracts, up to a minimum of 56 hours in a year, or provide a minimum of 56 hours of paid sick leave at the beginning of each accrual year. A contractor may choose its accrual year but must use a consistent option for all employees.
Contractors choosing the first option will have to account for all time for which an employee is or should be paid (including paid time off), and will be required to calculate accrued leave at least once every workweek. Notably, though, employees need not accrue leave in increments smaller than one hour for any fraction of 30 hours worked during the prior workweek. Also, in order to exclude time spent on non-covered work, the contractor must consistently record an employee’s covered and non-covered hours worked. Contractors will be required to notify employees of the amount of their unused paid sick leave at least once a month.
The Proposed Rule does not require employers to permit the accrual of more than 56 hours in each accrual year, and a contractor may limit the total amount of paid sick leave available at any given time to 56 hours. Although employees will be permitted to carry over unused paid sick leave from the prior year, the carried-over hours cannot be used to exceed a 56-hour maximum otherwise in place by the contractor. As a consequence, the Proposed Rule permits contractors to prevent an employee from accruing additional paid leave in a year where that employee already has 56 hours of leave available, unless and until the employee chooses to use some portion of his or her available leave. An employer may of course choose to provide more than the 56-hour minimum to its employees pursuant to its own policy.
Use of Paid Sick Leave. Employees will be permitted to use paid sick leave for a number of reasons, including: (1) their own illnesses or healthcare needs (including preventive care); (2) the care of a family member (defined as a “child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship”); or (3) for purposes related to being a victim of domestic violence, sexual assault or stalking (or to assist a family member who is a victim).
Under the Proposed Rule, if the need for sick leave is foreseeable, an employee is to provide seven days oral or written notice. If it is not foreseeable, an employee should notify his or her employer “as soon as is practicable.” Contractors can require employees to provide certification from a health care provider of the employee’s need for leave if three or more days of leave are used consecutively.
The Proposed Rule also contains specific requirements for an employer’s communication of a denial of a request to use paid sick time. Specifically, a denial must be provided “as soon as is practicable,” in writing, and with an explanation for the denial.
All of these features of the Proposed Rule are very similar to the Family Medical Leave Act.
Although contractors will not be required to pay employees for any unused paid sick leave upon termination, employees who are rehired by the contractor or a successor contractor within one year must have their accrued paid sick leave reinstated. And even if a contractor chooses to pay out accrued leave upon termination, the contractor is still required to reinstate the employee’s paid sick leave if he or she is rehired within the one-year timeframe.
Additional Responsibilities Imposed on Contractors. The Proposed Rule also prohibits the interference with an employee’s accrual or use of paid sick leave and prohibits an employer from discriminating on the basis of an employee’s use of paid sick leave.
Additionally, it contains a number of recordkeeping requirements and states that employers will have to publish a notice to affected employees upon the finalization of the rule. Especially in light of these relatively onerous recordkeeping and notice requirements, contractors and subcontractors with federal contracts or interested in federal projects should begin evaluating their policies and benefits packages to ensure their practices will conform with the requirements of the Executive Order by next year.
Babst Calland’s Employment and Labor Group will continue to keep employers apprised of further developments related to Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors, and other employment and labor topics. If you have any questions or need assistance in addressing the above-mentioned area of concern, please contact John A. McCreary, Jr. at (412) 394-6695 or jmccreary@babstcalland.com, or Esther Soria Mignanelli at (412) 394-6422 or emignanelli@babstcalland.com.
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The American Oil & Gas Reporter
PITTSBURGH—Managing flowback, produced fluids, and other oil and gas wastewater continues to be a significant industry concern in light of ongoing federal and state regulatory activity.
In the Appalachian Basin’s Marcellus Shale play, this is being exacerbated as a result of fewer newly drilled wells being available to reuse flowback and produced fluids because of low gas prices.
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The PIOGA Press
On February 5, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) published an advisory bulletin in the Federal Register on the safety of underground gas facilities. 81 Fed. Reg. 6334-6336. Citing several incidents at underground gas storage facilities, including the ongoing natural gas leak at a facility in the Porter Ranch area of Los Angeles, California, PHMSA’s advisory bulletin recommends operators of these facilities take measures to ensure public safety and the protection of the environment.
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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.
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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.
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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.
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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.
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