The Foundation Mineral and Energy Law Newsletter
Pennsylvania – Oil & Gas
(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Matthew C. Wood)
On January 26, 2024, the Pennsylvania Department of Environmental Protection (PADEP) announced that it would implement a policy requiring natural gas well operators to disclose chemicals they use in drilling and hydraulic fracturing operations before the chemicals are used on-site. See Press Release, PADEP, “Shapiro Administration, DEP Requires All Fracking Companies to Be More Transparent About Chemicals Used in Drilling” (Jan. 26, 2024). To accomplish this, PADEP said it would revise the process by which an operator submits its site-specific preparedness, prevention, and contingency plan (PPC Plan). Regulations require that an operator prepare a PPC Plan before it stores, uses, or generates regulated substances on-site, but until this change, an operator was only required to submit its PPC Plan to PADEP upon request.
Now, PADEP’s policy is that operators must submit PPC Plans to the agency prior to conducting drilling operations so PADEP can post them online on its PA Oil and Gas Mapping website. PADEP has informed operators and industry groups of the change, and since January 3, 2024, has included the policy in cover letters attached to issued unconventional well permits. This change appears to respond to one of eight recommendations summarized in the report prepared by Pennsylvania’s 43rd Statewide Investigating Grand Jury on the unconventional oil and gas industry. See Office of the Att’y Gen., Commw. of Pa., Report 1 of the Forty-Third Statewide Investigating Grand Jury (June 2020). The grand jury was convened, and the PPC Plan policy subsequently implemented, under then-Attorney General and current Governor Josh Shapiro.
Specifically, the grand jury recommended “that all chemicals employed in any stage of the unconventional oil and gas process must be publicly disclosed before they can be used.” Id. at 95. Among other things, the grand jury also recommended expanding no-drill zones, aggregating smaller sources together for the purpose of assessing air pollution, and implementing a “cooling off” period during which former PADEP employees are restricted from being employed by oil and gas operators. Id. at 10–11.
At the moment, PADEP’s change to the PPC Plan submission process appears to be strictly policy-based and unconnected to existing or proposed regulations. However, the change follows the Shapiro administration’s voluntary agreement with CNX Resources Corp. (CNX), whereby CNX announced its intention to publicly disclose chemicals and additives used in drilling operations at two of its wells, real-time air monitoring data, and other information. See Press Release, Gov’r Josh Shapiro, “Shapiro Administration and Leading Natural Gas Company CNX Resources Announce First-of-Its-Kind Collaboration on Environmental Monitoring and Chemical Disclosures” (Nov. 2, 2023); “Statement of Mutual Interests” (Nov. 2, 2023). These actions broadly mirror many of the grand jury’s recommendations.
In the announcements for both the CNX collaboration and the PPC Plan change, the Shapiro administration said that it has directed PADEP to implement formal rulemaking and policy changes mirroring the collaboration, including improved control of methane emissions to align with federal standards for oil and gas emissions sources, stronger drilling waste protections, and protections for gathering lines that transport natural gas. As such, new or revised regulations to respond to the recommendations summarized in the grand jury report and applicable to the oil and gas industry may be forthcoming.
Pennsylvania PUC Adopts Final Regulations for Intrastate Hazardous Liquid Pipelines
On February 22, 2024, the Pennsylvania Public Utility Commission (PUC) issued a Final Form Rulemaking Order (Order) that would set public utility safety standards for the transportation of hazardous liquids by pipeline in intrastate commerce. See Rulemaking Regarding Hazardous Liquid Public Utility Safety Standards at 52 Pa. Code Chapter 59, No. L-2019-3010267. In the Order, the PUC states that the goal of the safety standards is “to deter inadvertent returns, leaks, subsidence events, and water supply contamination events related to the construction, operation, and maintenance of [highly volatile liquids (HVL)] pipelines by hazardous liquid public utilities within Pennsylvania.” Id. at 2. In addition to already applicable federal standards, the rule establishes state-specific standards for hazardous liquid public utilities for the design, construction, operation, and maintenance of pipelines transporting hazardous liquids within Pennsylvania.
These include, but are not limited to:
- requirements regarding the timing and content of submitting failure analysis reports, root cause analysis reports, and accident reports;
- notifying the Pipeline Safety Section of certain activities within specified timeframes, e.g., proposed major construction, major reconstruction, or major maintenance;
- submit annually to the Pipeline Safety Division an annual report for each type of hazardous liquid pipeline facility operated at the end of the previous year;
- develop a written preparedness, prevention, and contingency plan that addresses, among other things, potential environmental impacts from drilling fluid discharges; and
- provide the Pipeline Safety Section with design plans, project costs, geotechnical reports, proof of notifications, estimated start, and completion dates.
Specifically, the rule will apply to two existing PUC certificated hazardous liquid public utilities involved in intrastate service in Pennsylvania—Sunoco Pipeline, L.P. (including the Mariner East Pipelines) and Laurel Pipe Line Company, L.P.—and to other intrastate HVL pipelines constructed in the future. The rule will not apply retroactively to existing facilities with respect to design and construction regulations (when the rule becomes effective). However, operations and maintenance, accident reporting, and public awareness requirements will apply to existing hazardous liquid pipeline facilities. The Order amends 52 Pa. Code ch. 59, but does not apply to pipelines regulated by Act 127 of 2011 (the Gas and Hazardous Liquid Pipeline Act) or interstate hazardous liquid pipelines.
After the PUC adopted and entered the Order, the Independent Regulatory Review Commission (IRRC) added the Order to its April 18, 2024, public agenda. In response to public comments submitted to the IRRC, the PUC withdrew the Order for further review. See Withdrawal Letter (Apr. 16, 2024). On April 25, 2024, the PUC entered a Revised Final Form Rulemaking Order (Revised Order), with clarifying revisions to the preamble and regulatory language, which it delivered to applicable legislative committees and the IRRC the following day. See Regulatory Analysis Form and Revised Final Form Rulemaking Order (Apr. 25, 2024). The IRRC has scheduled a public meeting on the Revised Order on June 20, 2024. If the rule proceeds further, it will be reviewed by the Office of Attorney General (for form and legality) and by the Office of Budget (to assess its fiscal impact), followed by its delivery to the Legislative Reference Bureau for publication in the Pennsylvania Bulletin. The rule’s effective date is 60 days after publication in the Pennsylvania Bulletin.
Pennsylvania County Sues Oil Companies over Climate Change
On March 25, 2024, Bucks County, Pennsylvania, filed a complaint in the Bucks County Court of Common Pleas against BP, Chevron, ConocoPhillips, Phillips 66, ExxonMobil, Shell, and the American Petroleum Institute, alleging that the companies deceived the public about the dangers of fossil fuel pollution and the role it has played in increasingly severe, damaging weather. Bucks Cnty. v. BP P.L.C., No. 2024-01836-0000 (Pa. Ct. Common Pleas filed Mar. 25, 2024).
Bucks County Commissioner Vice Chair, Bob Harvie, said in a press release that the complaint, the first of its kind in Pennsylvania, “seeks to shift the financial burden of the climate crisis from the taxpayers of Bucks County to the companies responsible for creating the crisis.” See Press Release, Bucks Cnty., “Bucks County Takes on Big Oil in Climate Crisis Lawsuit” (Mar. 25, 2024). The complaint makes many allegations against the defendants, including a claim that the companies knew about the harmful effects of fossil fuels, but did nothing to mitigate the danger, comparing them to tobacco companies that advertised low-tar and light cigarettes as healthy alternatives to regular cigarettes. The County claims that the companies affirmatively concealed those harms by engaging in a campaign of deception to increase the use of those products.
The County also claims that the companies could have chosen to facilitate a lower-carbon future, but chose corporate profits and continued deceit. The complaint also includes claims regarding misleading advertisements that portrayed the defendants as climate-friendly energy companies and accuses the companies of exacerbating the cost of adapting to and mitigating the effects of the climate crisis. As of the time of this report, the defendant companies have not filed a response.
Shapiro Administration and CNX Resources Corp. Collaborate to Implement Public Information-Sharing Agreement and Other Actions
On November 2, 2023, Pennsylvania Governor Josh Shapiro and CNX Resources Corp. (CNX) announced a voluntary agreement between Shapiro’s administration and CNX, under which CNX agreed to take certain actions regarding its unconventional oil and gas operations in Pennsylvania. See Press Release, Gov’r Josh Shapiro, “Shapiro Administration and Leading Natural Gas Company CNX Resources Announce First-of-Its-Kind Collaboration on Environmental Monitoring and Chemical Disclosures” (Nov. 2, 2023); see also Statement of Mutual Interests (Nov. 2, 2023). Specifically, CNX agreed to the following:
- “intensive” air and water quality monitoring to assess environmental impacts—data and facts that the Shapiro administration will use (with other applicable facts and data) “to inform the necessity of any additional setbacks or other future policy changes”;
- expand its no-drill zones from 500 feet to 600 feet for all sites and to 2,500 feet for sensitive sites, e.g., schools and hospitals while it is collecting data;
- publicly disclose all chemicals intended for use in drilling and hydraulic fracturing prior to use on-site;
- support regulation of gathering lines to inspect for corrosion;
- support additional safety measures applicable to transporting waste from unconventional well sites; and
- provide open-sourced, real-time emissions information to stakeholders and interested parties.
CNX also agreed not to hire Pennsylvania Department of Environmental Protection (PADEP) employees from regional offices covering CNX operations until two years after such employees leave PADEP. The actions address several recommendations from a 2020 Grand Jury Report on the unconventional oil and gas industry. See Report 1 of the Forty-Third Statewide Investigating Grand Jury (June 2020).
On December 18, 2023, Governor Shapiro announced that CNX had begun publishing real-time air monitoring data at two well sites in Washington and Greene Counties, including chemicals and additives used in drilling operations at the two sites. See Press Release, Gov’r Josh Shapiro, “As Part of Collaboration with Shapiro Administration, CNX Resources Begins Disclosing Names of All Chemicals & Posting Air Monitoring Results Online in Real-Time” (Dec. 18, 2023); see also CNX’s real-time air monitoring data here. CNX plans to expand the program across its operations in Pennsylvania, but has not established a timeframe for doing so.
Per the December Press Release, Governor Shapiro directed PADEP to begin the formal rulemaking process and implement policy changes to match the CNX collaboration, including disclosing drilling chemicals and improved control of methane emissions to align with the U.S. Environmental Protection Agency’s Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review. See 89 Fed. Reg. 16,820 (Mar. 8, 2024) (to be codified at 40 C.F.R. pt. 60). The Shapiro administration stated that its collaboration with CNX is one step in its broader goal to address climate change and protect the right to clean air and pure water “while maintaining our Commonwealth’s legacy as a national energy leader.” December Press Release, supra.
Shapiro Administration Announces 100th Abandoned Well Plugged Since Taking Office
On October 18, 2023, Pennsylvania Governor Josh Shapiro’s office announced that the Pennsylvania Department of Environmental Protection (PADEP) and the Shapiro administration had capped and plugged 100 orphaned and abandoned wells since Shapiro took office in January 2023, which surpasses the total number of wells plugged in the previous six years combined. See Press Release, Gov’r Josh Shapiro, “Shapiro Administration Has Plugged 100 Orphaned & Abandoned Wells in Just 10 Months, Surpassing Total Over Previous 6 Years Combined” (Oct. 18, 2023).
In addition to state resources, significant funding to address these wells comes from allocations to Pennsylvania from the federal Infrastructure Investment and Jobs Act (IIJA), Pub. L. No. 117-58, 135 Stat. 429 (2021). Pennsylvania received initial IIJA grant funding totaling $25 million and is eligible for an additional $300+ million in the coming years. See Press Release, U.S. Dep’t of the Interior, “Biden Administration Announces $1.15 Billion for States to Create Jobs Cleaning Up Orphaned Oil and Gas Wells” (Jan. 31, 2022, updated June 5, 2023). According to the Shapiro administration, the IIJA funds are not only being used to cap and plug wells—PADEP has awarded contracts for 224 wells to date—but are also directed toward identifying and inventorying wells, as well as taking enforcement actions against applicable operators.
Approximately 45% of the wells are in environmental justice areas, which is consistent with the Biden administration’s Justice40 Initiative. The goal of the Justice40 Initiative is to direct 40% of the benefits of certain federal investments to disadvantaged communities across one or more of seven areas: climate change, clean energy and energy efficiency, clean transit, affordable and sustainable housing, training and workforce development, remediation and reduction of legacy pollution, and the development of critical clean water and wastewater infrastructure. See White House, “Justice40, A Whole of Government Initiative” here.
As of May 16, 2024, 175 wells have been plugged, with 51 remaining wells in progress. More information about this program and PADEP’s progress can be found on the Oil & Gas IIJA Project Tracker website.
Commonwealth Implements “PAyback” Website to Check Status and Refund Eligibility for Permit Applications
On November 1, 2023, Pennsylvania Governor Josh Shapiro announced the release of “PAyback,” an online tool for Pennsylvania permit, license, and certification applicants. See Press Release, Gov’r Josh Shapiro, “Governor Shapiro Launches First-in-the-Nation Online Money-Back Guarantee System to Bring Increased Accountability & Transparency to Commonwealth Permitting, Licensing, and Certification Processes” (Nov. 1, 2023). Specifically, PAyback allows an applicant to confirm the processing time of its application and request a refund if the application is not processed within the appropriate timeline. Refund eligibility applies to approximately 70% of applications, excluding those that, e.g., do not have an application fee. The refund policy is not retroactive and only applies to applications completed on or after November 1, 2023.
The PAyback tool is one component, and a result of Shapiro’s stated goal of increasing transparency, efficiency, and certainty for Pennsylvanians subject to these processes and requirements. Its development followed Shapiro’s issuance of Executive Order 2023-07, “Building Efficiency in the Commonwealth’s Permitting, Licensing, and Certification Processes” (Jan. 31, 2023), which directed each applicable Executive Agency to “compile a catalog of the types of permits, licenses, or certifications it issues and submit that catalog to the Governor’s Office” within 90 days. Id. Relevant Executive Agencies were tasked with compiling the following information for each permit, license, or certification:
- type, term, and basis (e.g., statutory, regulatory, or other);
- method for receiving applications and when the method was last updated;
- legal authority governing the length of application processing times;
- applicable fees and the underlying authority for same;
- analysis and recommendation of the appropriate length of time to promptly process completed applications; and
- any other relevant information as requested.
In subsequent announcements, Governor Shapiro reported that (1) the Executive Agencies had completed their cataloging efforts, totaling more than 750 licenses, 800 permits, and 360 certifications, and that his office would review and establish efficient application processing times based on agency recommendations; and (2) from related efforts, many state agencies had reduced application backlogs or processing times for their respective applications. See Press Release, Gov’r Josh Shapiro, “Shapiro Administration Announces All Commonwealth Agencies Take Critical Step in Improving Licensing, Permitting, and Certification Processes” (May 5, 2023); Press Release, Gov’r Josh Shapiro, “Governor Shapiro Keeps Commitment to Improve Commonwealth’s Permitting, Licensing, and Certification Processes and Make Government Work Faster for Pennsylvanians” (Oct. 26, 2023). With the PAyback announcement, the Shapiro administration said that future goals include “filling key vacancies, updating the Commonwealth’s IT and technological assets, improving the application processes, and more.” November Press Release, supra. The PAyback tool and more information about it can be found on its website.
DOE Announces Negotiations for Seven Regional Hydrogen Hubs, Including Two in Pennsylvania
On October 13, 2023, the U.S. Department of Energy (DOE) announced that it had selected seven Regional Clean Hydrogen Hubs (H2Hubs) to negotiate awards for $7 billion in funding allocated under the Biden administration’s Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, 135 Stat. 429 (2021). According to DOE, the H2Hubs will “accelerate the commercial-scale deployment of low-cost, clean hydrogen—a valuable energy product that can be produced with zero or near-zero carbon emissions . . . .” Press Release, DOE, “Biden-Harris Administration Announces $7 Billion For America’s First Clean Hydrogen Hubs, Driving Clean Manufacturing and Delivering New Economic Opportunities Nationwide” (Oct. 13, 2023). Two of the H2Hubs are located in Pennsylvania and surrounding states, and other Hub projects are located in California; Texas; Minnesota, North Dakota, and South Dakota; Illinois, Indiana, and Michigan; and Washington, Oregon, and Montana.
The Mid-Atlantic Hydrogen Hub (Selectee: Mid-Atlantic Clean Hydrogen Hub (MACH2)) is located in Pennsylvania, Delaware, and New Jersey. Per DOE, it will repurpose historical oil infrastructure and use existing rights-of-way “to develop renewable hydrogen production facilities from renewables and nuclear electricity using both established and innovative electrolyzer technologies” to reduce energy costs and carbon emissions. Office of Clean Energy Demonstrations, DOE, “Regional Clean Hydrogen Hubs Selections for Award Negotiations,” available here. This Hub anticipates supporting apprenticeship programs, certifications, and other employment support, and creating more than 20,000 jobs (including more than 6,000 permanent jobs). This Hub’s federal cost share is up to $750 million.
The Appalachian Hydrogen Hub (Selectee: Appalachian Regional Clean Hydrogen Hub (ARCH2)) is located in West Virginia, Ohio, and Pennsylvania and will “leverage the region’s ample access to low-cost natural gas to produce low-cost clean hydrogen and permanently store the associated carbon emissions.” Id. This Hub anticipates bringing more than 21,000 jobs (3,000+ permanent) to the Appalachian region, creating equitable workforce opportunities, and creating a Community Benefits Advisory Board, a Community Benefits Plan, and a Community Commitment Fund “to ensure the Hub reenergizes the Appalachian region economically, socially, and environmentally.” Id. This Hub’s federal cost share is up to $925 million.
DOE’s selection of the seven H2Hubs for project negotiation is the first step in a years-long process toward completing the Hubs. Next steps include negotiations, project awards, and implementation, which is divided into four phases: (1) project planning; (2) project development; (3) installation, integration, and construction; and (4) ramping-up and operations. See Office of Clean Energy Demonstrations, DOE, “H2Hubs Local Engagement Opportunities,” available here. During the negotiations phase, reviewers and applicants will review the project organization, management, and budget, and evaluate risk, among other things. After completion of these steps, the reviewers will finalize documents, form awards packages, and review, approve, and issue funding awards. See Office of Clean Energy Demonstrations, DOE, “Award Negotiations.”
Copyright © 2024, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
The Foundation Mineral and Energy Law Newsletter
Pennsylvania – Mining
(Joseph K. Reinhart, Sean M. McGovern, Gina F. Buchman, Christina M. Puhnaty)
Pennsylvania Governor Josh Shapiro recently announced two pieces of legislation as part of his “commonsense energy plan” that would replace state efforts to join the Regional Greenhouse Gas Initiative (RGGI): (1) the Pennsylvania Climate Emissions Reduction Act (PACER) and (2) the Pennsylvania Reliable Energy Sustainability Standard (PRESS). Press Release, Gov’r Josh Shapiro, “Governor Josh Shapiro’s Energy Plan Builds on Pennsylvania’s Legacy of Energy Leadership by Protecting and Creating Energy Jobs and Lowering Electricity Costs for Consumers” (Mar. 13, 2024). According to the Shapiro administration, these Pennsylvania-specific programs are aimed at reducing greenhouse gas emissions, lowering utility bills for consumers, and creating and protecting jobs in the Commonwealth.
PACER was introduced as House Bill 2275 by Representative Aerion Abney and as Senate Bill 1191 by Senator Carolyn Comitta on May 8, 2024, along with many cosponsors. The legislation proposes to establish a Pennsylvania-run CO2 Budget Trading Program with its own auction of CO2 allowances. The bill directs the Pennsylvania Department of Environmental Protection (PADEP) to administer this program in accordance with parts of the regulation promulgated to implement the commonwealth’s participation in RGGI, 25 Pa. Code ch. 145, subch. E (CO2 Budget Trading Program), with some changes. “Budget sources”—fossil fuel-fired electricity generators with a nameplate capacity of 25 MW or more—would be required to comply with the program under PACER and purchase allowances (authorization to emit one ton of VOCs) equal to the tons of CO2 emitted annually.
The legislation also directs PADEP to review the base budget—the number of allowances available for auction set in the CO2 Budget Trading Program regulation—and consider the impact of the budget on jobs, consumers, and the environment to determine whether revisions to the budget are necessary.
If PADEP determines that budget revisions are needed, it would recommend a revised budget to the Environmental Hearing Board. The Environmental Hearing Board is permitted under the legislation to promulgate a final-omitted regulation under the Regulatory Review Act, effectively bypassing the typical rulemaking process, to amend 25 Pa. Code § 145.341 and adopt the recommended PACER emissions budget.
The proceeds from the auction of allowances would remain in Pennsylvania. The legislation requires that 70% of the proceeds be given to Pennsylvania consumers through an electric bill rebate. The remaining 30% of the proceeds would support projects to reduce air pollution, further reduce electric bills for low-income households, and invest in clean energy projects like carbon capture and storage.
PRESS was also introduced on May 8, 2024, as House Bill 2277 by Representative Danielle Friel Otten and as Senate Bill 1190 by Senator Steve Santarsiero, along with many cosponsors. PRESS will significantly increase the amount of renewable energy that utilities in Pennsylvania use by modifying and expanding Pennsylvania’s Alternative Energy Portfolio Standards (AEPS) first implemented two decades ago. The bill would add nuclear power and next-generation technologies like fusion to AEPS, as well as incentivize lower emissions for gas-fired power plants.
PRESS also provides for the investment of $5.1 billion in advanced energy technologies by 2035, incentivizing new development in Pennsylvania, with a focus on specific forms of energy development—primary battery storage, natural gas, and nuclear power—to establish reliable base-load power. PRESS establishes a target of 35% Tier I energy generation by 2035, with 10% Tier II generation and 5% Tier III generation.
Tier I includes solar photovoltaic and solar thermal energy, wind power, low-impact hydropower, geothermal energy, and biologically derived fugitive emissions. Tier II, which is limited to in-state resources, includes Tier I reliable energy sources in Pennsylvania, non-solar distributed generation systems, combined heat and power, demand-side management, large-scale hydropower, natural gas or coal using clean hydrogen (80%) co-fired blend or equivalent carbon intensity reduction technologies, fuel cells, biomass energy, and 24-hour storage co-located with a Tier I resource. Tier III, which is also limited to in-state resources, includes natural gas or coal using clean hydrogen (20%) co-fired blend or equivalent carbon intensity reduction technologies, waste coal, municipal solid waste, integrated combined coal gasification technology, and generation of electricity utilizing by-products of the pulping process and wood manufacturing process.
The Governor’s office anticipates that PRESS and PACER will create nearly 15,000 energy jobs and save Pennsylvania ratepayers $252 million during the first five years after passage. This legislation is still pending in the Pennsylvania General Assembly.
PADEP Proposes Revised Coal-Mine Methane Enclosed Flares General Permit
On March 16, 2024, the Pennsylvania Department of Environmental Protection (PADEP) announced in the Pennsylvania Bulletin an opportunity to submit public comments on the proposed revised General Plan Approval and/or General Operating Permit BAQ-GPA/GP-21, Coal-Mine Methane Enclosed Flare (Revised GP-21). See 54 Pa. Bull. 1429 (Mar. 16, 2024). As reported in Vol. 40, No. 3 (2023) of this Newsletter, PADEP previously published a final version of the General Plan Approval and/or General Operating Permit BAQ-GPA/GP-21, Coal-Mine Methane Enclosed Flare (GP-21) on September 23, 2023, which industry groups appealed.
According to PADEP’s technical support document (TSD) for the Revised GP-21, PADEP “was presented additional source and site-specific information after September 23, 2023, and upon review, decided certain changes were warranted to address the new information and intended use of GP-21.” TSD for the Revised GP-21, at 2. Although the TSD references changes to address the appellants’ concerns, it does not provide specific details about the appeal.
In the Revised GP-21, PADEP proposes to raise the best available technology (BAT) compliance requirement to limit NOx emissions to less than or equal to 0.15 lb/MMBtu, up from 0.08 lb/MMBtu. As explained in the TSD, PADEP determined that the 0.08 lb/MMBtu limit finalized in September was “not appropriate at the variable site conditions and the concentration of methane present in Pennsylvania mines.” Id. at 3. The Revised GP-21 also allows operators to install and operate methane gas monitors to continuously measure and record the coal-mine gas methane concentration. This option permits operators to forgo the prior requirement under GP-21 that they conduct quarterly gas analysis at the inlet gas stream to the enclosed flare to monitor heat input to the flare. PADEP explains in the TSD that it made this change in response to cost concerns raised by appellants and that the continuous monitoring option meets the intent of PADEP’s quarterly analysis requirement. Comments on the Revised GP-21 were due to PADEP by April 29, 2024.
Copyright © 2024, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
The Legal Intelligencer
(by Alex Farone)
On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to publish its proposed final rule banning most noncompetition agreements, or “non-competes.” The final rule was published on May 7, 2024, in the Federal Register and therefore becomes effective 120 days later, on September 4, 2024, but legal challenges to the FTC’s authority to issue this ban will likely result in a stay in enforcement of the ban until litigation is resolved.
As of the effective date, the final rule would ban new non-competes with employees, independent contractors, and volunteers nationwide, on the basis that non-competes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act, with one exception. The ban will not apply to a non-compete that is entered into pursuant to the bona fide sale of a business, the persona’s ownership interest in a business entity, or all (or substantially all) of a business entity’s operating assets.
The final rule will also void pre-existing non-competes, with two exceptions. First, existing non-competes for senior executives will remain enforceable after the effective date of the final rule. A “senior executive” is defined as a worker earning more than $151,164 annually who is in a policy-making position, meaning a company president, chief executive officer or equivalent, or any other person who has final authority to make policy decisions that control significant aspects of a business entity. Second, the ban will not apply to an existing non-compete that has been breached and where a cause of action accrued prior to the effective date.
The final rule will also require employers to provide “clear and conspicuous notice” to all workers, other than senior executives, with existing non-competes by the effective date stating that the non-compete will not be, and cannot legally be, enforced.
This final rule originates from the notice of proposed rulemaking the FTC issued in January 2023, which was subject to a 90-day public comment period. The FTC received over 26,000 public comments prior to the April 23, 3024 vote. The same day it voted to publish the final rule, tax services and software company Ryan LLC filed a lawsuit in the U.S. District Court for the Northern District of Texas seeking an injunction to stop the implementation of the ban. The following day, the U.S. Chamber of Commerce and three other business groups filed a similar lawsuit in the Eastern District of Texas challenging the ban.
There is a reasonable likelihood that legal challenges to the ban will be successful. In West Virginia v. EPA, 597 U.S. 697 (2022), the U.S. Supreme Court recently demonstrated skepticism of sweeping rulemaking from regulatory agencies, due to potential violation of the separation of powers doctrine. The Court adopted the major questions doctrine, which holds that in extraordinary cases of political and economic significance, where an agency makes “unheralded” use of its authority, the agency must be able to identify a clear statement from Congress authorizing that particular action. Given the broad scope of the final rule, it is likely that the Court would consider a national non-compete ban to be an extraordinary case of political and economic significance that would have to clear the major questions doctrine hurdle to survive.
Employers who use non-competes should certainly plan for the upcoming effective date and think strategically about implementing stronger non-disclosure and/or confidentiality agreements in the event that we reach the effective date of the final rule without pending litigation resulting in a stay of enforcement of the ban. As the effective date is not until September 4, 2024, employers should not jump to conclusions about the immediate or ultimate enforceability of the FTC’s non-compete ban.
Alexandra Farone is an associate in the Litigation and Employment and Labor groups of Babst Calland. Ms. Farone’s employment and labor practice involves representing corporate clients, municipalities, and individuals on all facets of employment law, including restrictive covenants, discrimination claims, human resources counseling, grievances, and labor contract negotiations. Please contact her at 412-394-6521 or afarone@babstcalland.com.
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Reprinted with permission from the May 24, 2024 edition of The Legal Intelligencer© 2024 ALM Media Properties, LLC. All rights reserved.
Firm Alert
Babst Calland Stands Ready to Advise All Clients on FinCEN Matters – Let Us Help Your Company Navigate the Current Uncertainty
(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)
As part of our commitment to keeping clients informed about regulatory changes that may impact their business, we want to draw your attention to the uncertainty surrounding the Financial Crimes Enforcement Network (FinCEN) Beneficial Ownership Information Reporting Rule (the “Rule”) under the Corporate Transparency Act (CTA). By now, you have likely heard about this Rule from your accountant or business colleagues. If not, the Rule requires most entities to disclose information about individuals who directly or indirectly own or control such entities. The intended purpose of the Rule is to enhance transparency and combat financial crimes by requiring certain covered entities to report information about their beneficial owners to FinCEN. Most entities in the U.S. will likely be required to comply with the Rule but some might be exempt if your entity meets one of the 23 identified exemptions. Entities formed before January 1, 2024, have until 2025 to comply; entities formed in 2024 have a 90-day compliance period. Pretty straight forward, right? NOPE, NOT AT ALL. The Rule is currently being challenged in the courts on constitutional grounds, and reporting requirements have been paused for certain entities following an injunction issued by the Northern District of Alabama on March 1, 2024, which ruled the CTA unconstitutional. Babst Calland is closely following these evolving developments. What should your company do in the meantime?
Given the legal uncertainty, many law firms and accounting advisors are declining to advise their clients on their compliance obligations. Babst Calland is not one of those – we are ready to help with all aspects of compliance, from legal analysis of your reporting obligations or exemption therefrom, through the filing process using our firm’s secure technology platform. Given the uncertainty about the constitutionality of the Rule and future enforcement, we are currently advising our clients as follows:
- New entities formed or registered on or after January 1, 2024, and before January 1, 2025, should comply with the applicable reporting requirements and make their filings within 90 calendar days after formation or registration.
- Existing entities formed or registered prior to January 1, 2024, should wait until September 2024 to begin their compliance efforts. This will allow time for further legal challenges or administrative guidance to develop without prematurely expending resources in the event the Rule is modified or suspended. Babst Calland will continue to monitor any changes and will reach out with relevant updates as new guidance and decisions are issued. Beginning in September, barring any such changes, Babst Calland’s team is ready to support your compliance needs with plenty of time to make the filing in advance of the January 1, 2025 deadline.
Please reach out to fincenassist@babstcalland.com or your Babst Calland client relationship lawyer if you would like Babst Calland to assist you with your company’s compliance obligations under the Rule. To be clear, Babst Calland will only provide advice related to Rule compliance when explicitly requested to do so. We look forward to servicing your needs on this confusing and developing area of the law.
Thank you for your continued trust and partnership.
PIOGA Press
(by Jean Mosites and Mackenzie Moyer)
On April 10, 2024, the U.S. Environmental Protection Agency (EPA) finalized the National Primary Drinking Water Regulation (NPDWR) Rule regulating six per- and polyfluoroalkyl substances (PFAS) under the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq. This final rule establishes the first-ever nationally enforceable drinking water standards for PFAS. The final rule establishes Maximum Contaminant Level Goals (MCLGs) and Maximum Contaminant Levels (MCLs) for perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), and perfluorohexane sulfonic acid (PFHxS). The final rule also establishes a Hazard Index MCLG and MCL for mixtures containing two or more of PFNA, HFPO-DA, PFHxS, and perfluorobutane sulfonic acid (PFBS).
For PFOA and PFOS, the final rule sets MCLGs – non-enforceable health-based goals that represent the maximum concentration of a contaminant in drinking water at which there is no known or anticipated negative effect on a person’s health – at 0 parts per trillion (ppt). The MCLs, which are legally enforceable, are set at 4.0 ppt for PFOA and PFOS. The MCLs represent the maximum concentrations allowed in drinking water that can be delivered to users of a public water system and are informed by factors such as available treatment technologies and cost. As a change from the proposed rule, the final rule sets MCLGs and MCLs for PFNA, PFHxS, and HFPO-DA at 10 ppt.
For mixtures of two or more of PFNA, PFHxS, HFPO-DA, and PFBS, the final rule establishes a Hazard Index due to the chemicals’ likely co-occurrence. The Hazard Index is calculated by dividing the concentration of each of the four PFAS compounds by its Health-Based Water Concentration (HBWC; 10 ppt for PFNA, 10 ppt for HFPO-DA (GenX), 9 ppt for PFHxS, and 2000 ppt for PFBS) and then adding the results together. A total value greater than 1.0 is an exceedance of the proposed Hazard Index MCL. For a more detailed explanation of the Hazard Index calculation, see EPA’s Fact Sheet for Understanding the Hazard Index, available here.
The final rule regulates community water systems (CWSs) and non-transient non-community water systems (NTNCWSs), collectively public water systems. A CWS is defined as “a public water system which serves at least fifteen service connections used by year-round residents or regularly serves at least twenty-five year-round residents” and a NTNCWS is “a public water system that is not a [CWS] and that regularly serves at least 25 of the same persons over 6 months per year.” 40 C.F.R. § 141.2.
Under the final rule, public water systems have three years (by 2027) to complete initial monitoring of each of the six PFAS, followed by ongoing compliance monitoring. The public must be provided with information on the levels of these PFAS in their drinking water beginning in 2027. Public water systems have five years (by 2029) to implement solutions to reduce PFAS if monitoring shows levels exceeding the MCLs. After those five years, public water systems that have PFAS in drinking water violating one of the MCLs must take action to reduce PFAS levels and provide notice to the public of the violation.
In the final rule, EPA identifies granular activated carbon, anion exchange resins, reverse osmosis, and nanofiltration as the best available technologies for PFAS removal in drinking water. According to EPA, PFAS tend to co-occur, and these four treatment technologies have been documented to co-remove other forms of PFAS, along with the six PFAS being regulated. More information on the final rule can be found on EPA’s webpage, available here.
The final rule supersedes any state-specific MCLs, if those MCLs are less stringent than EPA’s. For example, Pennsylvania adopted MCLs for PFOA (14 ppt) and PFOS (18 ppt) in January 2023. To retain primacy over the drinking water program, states must regulate PFAS no less stringently than EPA. Under the final rule, states with primacy will have up to two years after the date of rule promulgation to develop regulations that are at least as strict as the federal MCLs. Pennsylvania’s regulations already incorporate the federal drinking water standards by reference but given Pennsylvania’s earlier action to regulate PFAS in drinking water, it is likely there will be a regulatory amendment to remove Pennsylvania’s earlier standards. 25 Pa. Code § 109.202. The regulations incorporated by reference are effective on the date established by the federal regulations; therefore, regulated entities in Pennsylvania should assume that the federal standards are effective upon the dates listed in the final rule.
The final rule is the latest action under President Biden’s plan to combat PFAS pollution and EPA’s 2021 PFAS Strategic Roadmap (available here), under which EPA is taking a “whole-of-agency approach” to address PFAS throughout its lifecycle. The final rule is expected to be published in the Federal Register in the near future. Additional rulemaking proposals include the designation of certain PFAS as hazardous and information gathering obligations to be imposed on certain wastewater systems.
EPA also announced nearly $1 billion in newly available funding through the Infrastructure and Investment Jobs Act (IIJA) to help states and territories implement PFAS testing and treatment at public water systems and to help owners of private wells to address PFAS contamination. This funding is a part of the $9 billion included in the IIJA to invest in drinking water systems impacted by PFAS and other emerging contaminants.
Babst Calland’s PFAS Work Group, including environmental, public sector, and litigation attorneys, continue to track PFAS technical and legal developments and are available to assist you with PFAS-related matters. For more information on this and other remediation matters, please contact Jean M. Mosites at (412) 394-6468 or jmosites@babstcalland.com, Mackenzie M. Moyer at (412) 394-6578 or mmoyer@babstcalland.com, or any of our other attorneys in this practice.
To stay informed on timely legal and regulatory information on PFAS, view our PFAS Perspectives page, or subscribe to updates here.
Reprinted with permission from the May 2024 issue of The PIOGA Press. All rights reserved.
TEQ Hub
(by Alex Farone)
On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to publish its proposed final rule banning most noncompetition agreements, or “non-competes.” The final rule was published on May 7, 2024 in the Federal Register and becomes effective on September 4, 2024, but legal challenges to the FTC’s authority to issue this ban will likely result in a stay in enforcement of the ban until litigation is resolved.
As of the effective date, the final rule would ban new non-competes with employees, independent contractors, and volunteers nationwide, on the basis that non-competes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act, with one exception. The ban will not apply to a non-compete that is entered into pursuant to a bona fide sale of a business entity, the persona’s ownership interest in a business entity, or all or substantially all of a business entity’s operating assets.
The final rule will also void pre-existing non-competes, with two exceptions. First, existing non-competes for senior executives will remain enforceable after the effective date of the final rule. A “senior executive” is defined as a worker earning more than $151,164 annually who is in a policy-making position, meaning a company president, chief executive officer or equivalent, or any other person who has final authority to make policy decisions that control significant aspects of a business entity. Second, the ban will not apply where an existing non-compete has been breached and a cause of action accrued prior to the effective date.
The final rule will additionally require employers to provide “clear and conspicuous notice” to all workers, other than senior executives, with existing non-competes by the effective date stating that the non-compete will not be, and cannot legally be, enforced.
This final rule originates from the notice of proposed rulemaking the FTC issued in January 2023, which was subject to a 90-day public comment period. The FTC received more than 26,000 public comments prior to the April 23, 3024 vote. The same day, tax services and software company Ryan LLC filed a lawsuit against the FTC in the U.S. District Court for the Northern District of Texas seeking an injunction to stop the implementation of the ban. The following day, the U.S. Chamber of Commerce along with three other business groups filed a similar lawsuit in the Eastern District of Texas challenging the ban.
As previously reported, there is a reasonable likelihood that legal challenges to the ban would be successful. In West Virginia v. EPA, 597 U.S. 697 (2022), the U.S. Supreme Court recently demonstrated skepticism of sweeping rulemaking from regulatory agencies, due to potential violation of the separation of powers doctrine. The Court adopted the major questions doctrine, which holds that in extraordinary cases of political and economic significance, where an agency makes “unheralded” use of its authority, the agency must be able to identify a clear statement from Congress authorizing that particular action. Given the broad scope of the final rule and the unchanged makeup of the Supreme Court, it is likely that a national non-compete ban would be considered an extraordinary case of political and economic significance, and would have to clear the major questions doctrine hurdle to survive.
Employers who use non-competes should think strategically about implementing stronger non-disclosure and/or confidentiality agreements in the event that we reach the effective date of the final rule without pending litigation resulting in a stay of enforcement of the ban. As the effective date is not until September 4, 2024, employers should not jump to conclusions about the immediate or ultimate enforceability of the FTC’s non-compete ban.
If you have any questions about FTC’s non-compete ban and the impact on your business, please contact Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com.
To read the full article, click here.
Environmental Alert
(by Kevin Garber)
On May 8, 2024, a large group of Democrat members of the Pennsylvania House of Representatives introduced H.B. 2275, the Pennsylvania Climate Emissions Reduction Act, into the General Assembly. The Shapiro administration announced PACER earlier this year as an approach to creating a Pennsylvania-specific carbon reduction program instead of joining the Regional Greenhouse Gas Initiative. The actual language of the bill unsurprisingly retains key aspects of the RGGI regulation that the Environmental Quality Board promulgated on April 23, 2022. The Commonwealth Court declared that regulation void on November 1, 2023 as being an unconstitutional tax and enjoined the Pennsylvania Department of Environmental Protection from enforcing it. However, the Court’s decision does not remove the regulation from existence.
As proposed, PACER directs DEP, within 120 days of enactment, to review the base CO₂ allowance budget of 78 million tons that DEP established in the RGGI regulation in 2022 (which declines to 58 million tons in 2030) and recommend revisions to that budget, if necessary, after considering the effect of a new base budget on jobs, consumers, and the environment. DEP is not given specific authority to consider how a revised CO₂ budget would affect the reliability of the PJM grid or the potential for emission leakage outside Pennsylvania.[1] These were two of the biggest industry objections to the RGGI regulation during its development.
After DEP develops a revised CO₂ budget, the EQB would promulgate a final base budget by adopting a final-omitted regulation (a procedure that removes otherwise applicable public notice and comment opportunities), after which DEP would conduct a Pennsylvania-run auction of CO₂ allowances using the procedure already established by the RGGI regulation.
The same “budget sources” (i.e., CO₂ emission sources) that were subject to RGGI in 2022 – i.e., fossil fuel-fired electricity generators (i.e., coal, natural gas, and waste coal generation stations) with a nameplate capacity of 25 MW or more – would be subject to PACER and must buy allowances equal to the tons of CO₂ emitted annually. The critical issue will be how many CO₂ allowances are established in a revised base budget. Even if a new base budget starts with the 78 million tons allocated in 2022, the cost imposed on generation – or, the revenue provided through PACER, depending on one’s perspective – could be significantly higher than the approximately $350 million projected in 2022 based on the multi-state RGGI trading price for allowances ($5.20/allowance in the 2019 baseline year compared to $16.00/allowance in 2024). The costs could be higher if a revised baseline budget has fewer allowances and/or declines more rapidly. Although PACER would preserve the waste coal set-aside and the combined heat and power allowance from the RGGI regulation, its total costs would fall most heavily on natural gas generation because gas now makes up significantly more generation than coal.
PACER would give DEP specific authority to enforce compliance with the carbon budget. That means, among other things, affected budget sources must apply for a permit to incorporate the CO₂ trading program and begin accumulating allowances based on three-year control periods.
Finally, PACER would specifically direct revenue from CO₂ allowance auctions into alternative energy and clean energy programs, which DEP’s 2022 RGGI regulation did not do. For example, grants may be awarded from a newly created Pennsylvania Energy Transformation Account and a new Workforce Enhancement Fund for carbon capture utilization and storage, clean hydrogen production, fuel switching, and renewable energy including solar, wind, battery storage, and geothermal projects. Thus, PACER would establish a carbon cap-and-trade program to reduce fossil fuel-fired electricity generation and direct a substantial portion of the revenue generated from the sale of CO₂ allowances to the development of alternative energy sources. The bill is currently before the House Committee on Consumer Protection, Technology and Utilities. No timeline for further consideration has been announced.
For more information on PACER, RGGI or other related matters, please contact Kevin Garber at (412) 394-5404 or kgarber@babstcalland.com or any of our other environmental attorneys.
[1] “Emission leakage” refers to an increase in greenhouse gas emissions in one state caused by stricter emission controls in another state.
TRIBLive
(by Justin Vellucci)
For Tim Novosel, Brazilian jiu jitsu is more about control than contact.
The Pittsburgh police commander — who launched a jiu jitsu training program for city cops about two years ago — talked about the importance the martial art places on focus instead of force. Nearby, a dozen officers grappled nearby on an ocean of blue mats in Pittsburgh police’s North Side training academy.
The officers’ limbs — each cloaked in a navy-blue gi, a robe-style top that’s part of jiu-jitsu’s uniform — furled around each other trying to gain an upper hand. Trainers in black gi leaned in periodically to help officers with dominant positions or demonstrate how to master moves like the Triangle Choke.
“It’s like human chess, it’s such a thinking man’s sport,” said Novosel, 51, a North Side native who took over leadership in February of Pittsburgh’s Zone 2 station, which covers Downtown. “You’re always examining the body and seeing how you can fit.”
“I’m passionate about it because it you came and told me, ‘Patrol over there,’ I’d rather go out without my gun than without my jiu jitsu,” he added. “It’s another tool on your belt.”
A couple of generations ago — long before Novosel joined the Pittsburgh force in 2007 — cops trained by boxing, the commander told TribLive.
Today, he said, Pittsburgh police integrate Brazilian jiu jitsu into teaching recruits the bureau’s defensive tactics — and keeping more tenured officers fit and focused.
About 120 officers — three of them women — have taken part in the bureau’s voluntary jiu jitsu training, with 50 coming to sessions regularly.
The martial art, which originated in Japan and integrated elements of wrestling while being taught in Brazil in the 1970s, allows smaller individuals to challenge larger attackers, its proponents say.
Brazilian jiu jitsu, or BJJ, training is said to improve self-defense and physical fitness, teach cops to seek control and sharpen teamwork and officers’ well-being.
Some police departments cite data hat shows how the training decreases use of force and helps minimize arrest-related injuries and hospitalizations for cops and suspects.
Novosel said he uses his jiu jitsu training principles “every time I touch somebody.”
Teaching control
Certain incidents, though, stand out, he said.
One night, Novosel remembered being called to Tequila Cowboy, a North Shore bar, where a man — who was “6-foot-4 and 280 pounds of muscle,” said the commander with a smile — was screaming and causing a scene.
The man started to get physical. Novosel said he relied on his jiu jitsu training to safely stop the man’s attacks.
“Ten seconds — done,” Novosel said.
Last year, for the first time, a Pittsburgh police academy class of 24 recruits studied jiu jitsu as part of their formal training, police said. More than half of those officers have continued training since graduating March 6, Novosel said.
Since the covid-19 pandemic, a cadre of officers has joined Novosel twice a week to train at the bureau’s brick-lined North Lincoln Avenue academy — handfuls of them breaking sweats as a speaker nearby pumps out 90s-era alt-rock staples such as Nine Inch Nails’ “Head Like A Hole” or Red Hot Chili Peppers’ “Californication.”
Once every two weeks, a pair of private trainers from Steel City Martial Arts volunteers to guide the sessions.
There are no payments or bureau contracts between the parties, police said. The private trainers are working for free, and the cops taking part are doing so voluntarily.
“What jiu jitsu teaches you is control. It doesn’t teach you how to fight — and that’s why this translates well for the officers,” said one of those trainers, Santino Achille, 39, of Peters in Washington County, who owns Steel City Martial Arts. As he spoke last Tuesday, officers practiced grappling, or “rolling,” on mats in the nearby gym. “When you look out here, you won’t see a single punch, a single kick.”
“There’s a difference between the sport and the reality with policing,” added Don Bluedorn, a Downtown attorney by day who has trained with Steel City Martial Arts for 20 years. “But, being able to adapt in a critical situation, to control somebody, is essential. This training gives them confidence, so they don’t overcompensate with aggression.”
The newly formed North Allegheny Police Department, a school district police force, also sat through a Steel City Martial Arts presentation about starting jiu jitsu training for officers, Achille said.
North Allegheny police Chief Eric Harpster, a 36-year law enforcement vet who served as a task force officer for the Drug Enforcement Administration, said he participated in jiu jitsu training while working for Pittsburgh police.
Police in Pittsburgh said it’s too early to start parsing data to measure the impact of jiu jitsu training locally on use-of-force rates, injuries and hospitalizations, or other metrics.
Helping with use of force
The scope of the trend to train law enforcement in jiu jitsu remains unclear nationwide. But the discipline’s benefits appear to be echoing elsewhere in the U.S.
Gracie University, a California group that teaches jiu jitsu trainers, said on its website that it’s been advocating for jiu jitsu training for those in American law enforcement for nearly 30 years.
Gracie Survival Tactics, a “train the trainer” course the group has offered for at least 15 years, works to “help officers verbally and physically de-escalate while humanely prevailing resistant and/or aggressive subjects,” according to the company’s website.
To illustrate Brazilian jiu jitsu training benefits, Gracie University points to the Atlanta suburb of Marietta, Ga., where municipal police made the training mandatory for all new hires in April 2019. One year later, the program was extended, on a voluntary basis, to the whole department.
To date, 95 of Marietta’s 145 sworn officers have attended more than 2,600 jiu jitsu classes. The training has helped reduce Marietta officers’ use of force, with Taser deployments dropping 23%, Gracie University said. Officers who train in jiu jitsu there use force on suspects half as frequently as colleagues who haven’t taken the training.
Pittsburgh police Officer Sean M. Jozwiak thinks the training also benefits men and women who seek to protect and serve here in Pittsburgh. Jozwiak started teaching defensive tactics to recruits at the academy last summer; in-classroom training for the recent grads started July 24, 2023.
“This gives me a foundation, a base, on how the body works,” said Jozwiak, 37, who grew up in Pittsburgh’s Polish Hill neighborhood and has lived for seven years in Brookline. “That knowledge, that confidence helps me teach recruits.”
“No one should be purposely injuring anybody into submission — and all the things they learn here are crucial,” added Detective Jed Pollock, 43, of Moon, as he paused his jiu jitsu grappling this week and wiped sweat from his brow. “It’s better for us. It’s better for the public. I’m just really proud to be a part of it.”
For others, jiu jitsu dictates tone.
“As a cop, (jiu jitsu) gave me confidence to speak with someone in a stressful situation,” said Pittsburgh police Officer Kevin Hendry, 49, who worked for Swissvale police for two years before joining the Pittsburgh force in 2019.
Hendry earned his jiu jitsu black belt, also in 2019, from trainer Tommy Costa at High Ground Jiu Jitsu, a members-only club with locations in Monroeville and Greensburg.
“I maintain a calm and level head,” Hendry said. “All my training has helped me know how to de-escalate a situation, instead of escalating it.”
Novosel said he and others embrace jiu jitsu as they mature in their respective jobs.
Novosel knows he’s not the same man who in 2008, while still in his 30s, won a heavyweight title in the martial art known as muay thai. But taking part in jiu jitsu training multiple times a week has led him to other improvements in his life; his diet’s better and so are his sleep routines.
“As an officer, when you start to do this, you become better,” he told TribLive. “And you want to become a better cop.”
Standing Tuesday near the blue training mats, Novosel reflected on how jiu jitsu has helped to unify and break down walls between many officers on the Pittsburgh force. It’s teaching officers from different backgrounds and with different levels of experience to speak a kind of shared language, he said.
“Police-wise, everyone’s from a different place — there are recent academy graduates, 20-somethings, ‘rolling’ with department veterans,” Novosel said. “There are guys here from narcotics, guys from homicide. I think every zone’s represented.”
“Here,” he added, “you get a chance to be more than just guys on the same shift.”
To read the full article, click here.
Reprinted with permission from the May 6, 2024 edition of TRIBLive. All rights reserved.
The Legal Intelligencer
(by Casey Alan Coyle and Michael Libuser)
Online gaming is a booming industry. In fiscal year 2022–23, the Pennsylvania Lottery’s iLottery program generated $872.5 million in eInstant sales, while online gambling revenues topped $2 billion in Pennsylvania last year according to published reports. But behind the scenes, a dispute has arisen that pits the Pennsylvania Lottery against privately owned casinos. The fight is over legislation that prohibits the Pennsylvania Department of Revenue (the “Department”), the administrator of the Lottery, from offering products that “simulate casino-style lottery games” as part of the iLottery program. The Pennsylvania Supreme Court recently construed the meaning of that phrase in Greenwood Gaming & Entertainment, Inc. v. Department of Revenue, 306 A.3d 319 (Pa. 2023), and remanded the case to the Commonwealth Court with instructions to apply a corresponding standard. The question now is whether, and to what extent, the Commonwealth Court will be able to establish a boundary between iLottery games and the online products offered by casinos.
Act 42
On March 15, 1972, the Pennsylvania Lottery sold its first ticket for a weekly drawing. The Lottery, then only a year into its existence, operated without competition and continued to do so for decades. Over the years, with the rising popularity of Lottery games, including now-ubiquitous “scratch-offs,” came a tide of competition and technology that shepherded in a new legislative era for Pennsylvania gambling rules. First came the Race Horse Development and Gaming Act (the “Gaming Act”), which authorized slot machines. Six years later, the Legislature expanded the Gaming Act to include table games. Then, in 2014, the General Assembly amended the State Lottery Law (the “Lottery Law”) to prohibit the Department from offering “[i]nternet instant game[s]” and “simulated casino-style lottery game[s]” through the Lottery, absent further legislative authorization.
But before long, the General Assembly charted a new course. In 2017, it amended the Lottery Law and the Gaming Act to permit both the Lottery and privately owned casinos to offer different forms of online gaming. The legislation that effected this change, known as Act 42, authorized the Department to offer “iLottery games,” defined as “[i]nternet instant games and other lottery products.” 4 Pa.C.S. § 502. At the same time, Act 42 authorized casinos to offer “interactive gaming,” which, broadly stated, encompasses paid-for gambling games “offered through the use of communications technology.” Id. § 1103. To keep iLottery and casinos in their respective lanes, the Legislature drafted Act 42 to give each an exclusive space in which to operate. The Department can offer iLottery games but cannot offer products that “simulate casino-style lottery games.” Id. § 502. Casinos can offer “interactive gaming” but not a “lottery game or [i]nternet instant game” as defined in the Lottery Law. Id. § 1103.
With Act 42 in place, the Department began work on its iLottery program. The Department modeled the program after the Michigan iLottery program. Unlike Pennsylvania, however, Michigan’s law does not prohibit its lottery from simulating casino-style games. The Department relied upon Scientific Games, a leading slots game designer, to develop the iLottery platform. The Department subsequently promulgated temporary regulations for the iLottery program. But the temporary regulations did not address the limits on the iLottery authorization and contained no guidance with respect to limiting iLottery games to those that do not represent or simulate casino-style games. On May 22, 2018, the Department launched “iLottery,” offering games played online and on mobile devices.
Greenwood Gaming
A group of casinos filed a Petition for Review against the Department four months later, alleging that its iLottery games simulate slot machines and other casino-style lottery games, in violation of Act 42. The casinos moved for a preliminary injunction, seeking to enjoin the Department from offering iLottery games that include features of interactive slot games, such as autoplay, reveal all, adjustable bet, and bonus games. The Department opposed the injunction principally on the contention that iLottery games have different “mechanics” (i.e., programming and features) than slot machines and other casino-style games. Despite finding that “the side-by-side video comparisons of the iLottery games with the online or land-based casino games . . . highlight[ed] striking similarities,” the Commonwealth Court denied the preliminary injunction.
At the ensuing bench trial, the Department largely abandoned its defense from the preliminary injunction hearing. Instead, it contended that the features offered in iLottery games are “rooted in traditional lottery products.” Following post-trial submissions, the Commonwealth Court denied the Petition and dismissed the claims. The Court noted that there are undefined terms in Act 42 and the Lottery Law, namely, “simulate” and “casino-style.” Resorting to their common and approved usage, the Commonwealth Court concluded that, as used in Act 42, “simulate” means “to give or assume the appearance or effect of often with the intent to deceive” or “to make a simulation of.” In applying that definition, however, the Court superimposed an exclusivity requirement not found in any law, regulation, or definition of any statutory term—i.e., whether a game uses features that are “particular” or “exclusive” to casino-style slot machines. The Court also held that, for purposes of Act 42, “casino-style lottery games” means “online games that create a likeness or assume the appearance of a game that is in the style, with reference to form, appearance or character, particular to a casino slot machine.” The Court further held that only “signature, iconic, or key features particular to” casino slot machines would meet this definition, and the only such features are spinning reels and pay lines, even though this construction conflicts with the definition of “slot machine” within the same statute.
The Commonwealth Court then turned to the challenged features, limiting its evaluation to reviewing the features in isolation instead of considering the simulation of the games as a whole. This is despite the fact that: (a) the Legislature prohibited the Department from offering casino-style games, not casino-style features, as part of the iLottery program; and (b) only one game traditionally combines all of the features used in iLottery games, and it is a slot machine. In any event, and notwithstanding its previous acknowledgement of the “striking similarities” between iLottery games and land-based and online casino games, the Court held that the iLottery games do not simulate casino-style slot machines.
The Pennsylvania Supreme Court reversed on appeal in a 5–1 decision. The Supreme Court determined that Act 42 prohibits the Department from offering iLottery games that “give the appearance or effect of casino games,” adding: “[t]he class of casino games that may not be simulated includes, but is not limited to, . . . slot machines.” The Supreme Court reasoned that the Commonwealth Court’s more narrow interpretation “threatens to dissolve” the legislatively created barrier between lottery games and casino games because: (a) it “reduces slot machines to spinning reels and pay lines,” when, “by definition, a slot machine in Pennsylvania need not employ spinning reels or pay lines”; and (b) “reads the term ‘simulate’ out of the statutes by limiting the prohibition to games that incorporate only particular features unique to a casino game.”
Applying a plain-language analysis, the Supreme Court held that Act 42 prohibits the Department from offering iLottery games that “mimic slot machines in operation.” According to the Supreme Court, “[t]his requires a subjective assessment of the appearance and play function of an iLottery game that cannot be reduced to an objective inquiry regarding the presence or absence of pay lines and spinning reels.” The Supreme Court ordered that, on remand, the Commonwealth Court must apply Act 42 as the Supreme Court interpreted it, “focus[ing] on the overall appearance and experience of play of an iLottery game, not the presence of any particular feature.”
Impact
In the wake of Greenwood Gaming, the Commonwealth Court issued an Order directing the parties to submit supplemental briefing addressing the standards set forth by the Supreme Court and the application of those standards to the record evidence. Supplemental briefing is set to conclude in June, and oral argument to take place in July. The Commonwealth Court’s forthcoming decision could have far-reaching consequences for the future of the iLottery program because, according to the casinos, every single one of the games approved by the Department as of October 31, 2019, “in some degree, assume[s] the character of slot machines by imitating the appearance, function, and player interface of slot machines.”
It also remains to be seen whether the Commonwealth Court will cabin its forthcoming decision to the 57 games at issue when the discovery phase concluded or will include subsequent games approved by the Department as well. Moreover, regardless of how the Commonwealth Court rules in this case, it seems highly probable that the fact-specific standard articulated by the Supreme Court will lead to future challenges by the casinos over the legality of particular iLottery games, as the Supreme Court eschewed a bright-line rule in favor of a “subjective assessment of the appearance and play function of an iLottery game.”
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Casey Alan Coyle is a shareholder at Babst, Calland, Clements and Zomnir, P.C. and Co-Chair of the firm’s Litigation Group. He focuses his practice on appellate law and complex commercial litigation. Coyle is also a former law clerk to Chief Justice Emeritus Thomas G. Saylor of the Pennsylvania Supreme Court. He represented the casinos at trial and during the merits briefing stage on appeal. Contact him at 267-939-5832 or ccoyle@babstcalland.com.
Michael Libuser is a litigation associate at Babst, Calland, Clements and Zomnir, P.C. He focuses his practice on appellate law and complex commercial litigation. Before entering private practice, Libuser served as a law clerk to the Honorable Yvette Kane, Senior United States District Judge for the Middle District of Pennsylvania, and the Honorable Karoline Mehalchick, United States District Judge for the Middle District of Pennsylvania (then United Magistrate Judge). Contact him at 717-868-8379 or mlibuser@babstcalland.com.
To view the full article, click here.
Reprinted with permission from the April 29, 2024 edition of The Legal Intelligencer© 2024 ALM Media Properties, LLC. All rights reserved.
Environmental Alert
(by Donald C. Bluedorn II, Gary E. Steinbauer, and Mackenzie M. Moyer)
On April 25, 2024, the U.S. Environmental Protection Agency (EPA) finalized changes to the coal combustion residuals (CCR) regulations to now regulate inactive surface impoundments at inactive electric utilities, known as legacy CCR surface impoundments. The Final Rule also imposes requirements on an additional, new category of CCR units, known as CCR management units, or CCRMUs. Regulated legacy CCR surface impoundments will need to comply with the requirements in Subpart D, as articulated in the Final Rule, beginning as early as six months after the date of publication of the Final Rule in the Federal Register and CCRMUs will need to comply with specified requirements beginning 21 months after publication.
The Final Rule is being promulgated in response to the August 21, 2018 opinion by the U.S. Court of Appeals for the District of Columbia Circuit in Utility Solid Waste Activities Group, et al. v. EPA, in which the Court vacated and remanded the provision of the 2015 CCR Rule that exempted inactive impoundments at inactive facilities from regulation. EPA is also expanding the CCR Rule to address CCRMUs due to the associated risks from the direct placement of CCR on the land; according to information obtained from EPA since 2015, these previously unregulated units are contaminating groundwater and pose risks similar to the risks associated with currently regulated activities. In the last year, EPA has focused on CCR Rule enforcement, adding “protecting communities from coal ash contamination” as one of EPA’s six National Enforcement and Compliance Initiatives for fiscal years 2024 through 2027. Every four years, EPA publishes a list of national initiatives to focus its enforcement efforts, and on August 17, 2023, EPA formally announced CCR issues as an enforcement priority for the next four years. With this Final Rule expanding the scope of the CCR Rule regulatory program, EPA has also increased the number of potential targets for enforcement.
A legacy CCR surface impoundment is defined in the Final Rule as “a CCR surface impoundment that no longer receives CCR but contained both CCR and liquids on or after October 19, 2015, and that is located at an inactive electric utility or independent power producer.” The Final Rule imposes all CCR requirements already applicable to inactive CCR surface impoundments at active facilities under Subpart D of 40 C.F.R. Part 257 on these so-called legacy CCR surface impoundments, with limited exceptions. EPA also finalized a change to the existing groundwater monitoring requirements for legacy CCR surface impoundments by combining the detection and assessment monitoring requirements and finalized two new requirements—applicability documentation and a site security requirement.
EPA estimates that there are 194 legacy CCR surface impoundments located at 85 facilities that are subject to the Final Rule. A list of potentially regulated surface impoundments can be found here. Given the extent of groundwater monitoring and other requirements that these previously unregulated facilities will need to undertake, the compliance deadline is short and affected facilities will need to devise and implement compliance programs quickly.
The Final Rule also imposes requirements on a new category of regulated CCR units, CCRMUs. A CCRMU is “any area of land on which any noncontainerized accumulation of CCR is received, is placed, or is otherwise managed, that is not a regulated CCR unit” and includes inactive CCR landfills and CCR units that closed prior to October 19, 2015. CCRMUs are subject to regulation under the Final Rule when they are located at “covered CCR facilities”: (1) facilities currently regulated under the 2015 CCR Rule; (2) inactive facilities with a legacy CCR surface impoundment; and (3) facilities that, on or after October 19, 2015, produced electricity for the grid but were not regulated under the 2015 CCR Rule because they had ceased placement of CCR in onsite CCR units and did not have an inactive CCR surface impoundment. The Final Rule imposes groundwater monitoring, corrective action, closure, and post-closure care requirements for all CCRMUs at regulated CCR facilities. EPA estimates there are 179 CCRMUs at 92 active facilities and 16 CCRMUs at 12 inactive facilities that are subject to the Final Rule. A list of potentially regulated CCRMUs at inactive facilities can be found here and at active facilities can be found here.
EPA continues to take action on CCR, focusing on CCR Rule regulatory and enforcement matters, and operators of CCR Rule-regulated units, now expanded by this recent Final Rule, should be prepared for continued oversight by EPA. Babst Calland attorneys continue to track these developments and are available to assist with CCR-related matters. For more information on this development and other waste matters, please contact Donald C. Bluedorn II at (412) 394-5450 or dbluedorn@babstcalland.com, Gary E. Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Mackenzie M. Moyer at (412) 394-6578 or mmoyer@babstcalland.com, or any of our other environmental attorneys.
Employment and Labor Alert
(by Alex Farone)
On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to publish its proposed final rule banning most noncompetition agreements, or “non-competes.” The final rule becomes effective 120 days after its date of publication in the Federal Register, but legal challenges to the FTC’s authority to issue this ban will likely result in a stay in enforcement of the ban until litigation is resolved.
As of the effective date, the final rule would ban new non-competes with employees, independent contractors, and volunteers nationwide, on the basis that non-competes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act, with one exception. The ban will not apply to a non-compete that is entered into pursuant to a bona fide sale of a business entity, the persona’s ownership interest in a business entity, or all or substantially all of a business entity’s operating assets.
The final rule will also void pre-existing non-competes, with two exceptions. First, existing non-competes for senior executives will remain enforceable after the effective date of the final rule. A “senior executive” is defined as a worker earning more than $151,164 annually who is in a policy-making position, meaning a company president, chief executive officer or equivalent, or any other person who has final authority to make policy decisions that control significant aspects of a business entity. Second, the ban will not apply where an existing non-compete has been breached and a cause of action accrued prior to the effective date.
The final rule will additionally require employers to provide “clear and conspicuous notice” to all workers, other than senior executives, with existing non-competes by the effective date stating that the non-compete will not be, and cannot legally be, enforced.
This final rule originates from the notice of proposed rulemaking the FTC issued in January 2023, which was subject to a 90-day public comment period. The FTC received more than 26,000 public comments prior to the April 23, 3024 vote. The following day, on April 24, 2024, the U.S. Chamber of Commerce along with three other business groups filed a lawsuit against the FTC in the U.S. District Court for the Eastern District of Texas seeking an injunction to stop the implementation of the ban.
As previously reported, there is a reasonable likelihood that legal challenges to the ban would be successful. In West Virginia v. EPA, 597 U.S. 697 (2022), the U.S. Supreme Court recently demonstrated skepticism of sweeping rulemaking from regulatory agencies, due to potential violation of the separation of powers doctrine. The Court adopted the major questions doctrine, which holds that in extraordinary cases of political and economic significance, where an agency makes “unheralded” use of its authority, the agency must be able to identify a clear statement from Congress authorizing that particular action. Given the broad scope of the final rule and the unchanged makeup of the Supreme Court, it is likely that a national non-compete ban would be considered an extraordinary case of political and economic significance, and would have to clear the major questions doctrine hurdle to survive.
Employers who use non-competes should think strategically about implementing stronger non-disclosure and/or confidentiality agreements in the event that we reach the effective date of the final rule without pending litigation resulting in a stay of enforcement of the ban. As the effective date is more than 120 days away and such legal challenges are already under way, employers should not jump to conclusions about the immediate or ultimate enforceability of the FTC’s non-compete ban.
If you have any questions about FTC’s non-compete ban and the impact on your business, please contact Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com.
Environmental Alert
(by Matt Wood and Jean Mosites)
On April 17, 2024, the U.S. Environmental Protection Agency (EPA) released a pre-publication version of its long-anticipated final rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), and their salts and structural isomers, as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The final rule will be effective 60 days after publication in the Federal Register. PFOA and PFOS are the two most prominent and studied compounds in a “family” of per- and polyfluoroalkyl substances (PFAS) consisting of thousands of manmade chemicals. PFAS have been widely used for decades in various applications, including manufacturing water-, stain-, and heat-resistant consumer products, e.g., waterproof clothing and food packaging, and as ingredients in aqueous film forming foams (AFFF) used to extinguish certain kinds of chemical fires. Research indicates that exposure to PFAS, which are prevalent and persistent in the environment, may cause various health-related impacts.
EPA’s designation of PFOA and PFOS as CERCLA hazardous substances is unprecedented and not uncontroversial because it is the first time the agency has made such designations using its authority under CERCLA Section 102, 42 U.S.C. § 9602. Until now, CERCLA has always defined hazardous substances by reference to other statutes (e.g., the Clean Water Act and the Resource Conservation and Recovery Act). To reach its conclusion that the designations were warranted, EPA says it evaluated available scientific and technical information about PFOA and PFOS to determine whether they “may present a substantial danger to public health welfare or the environment” as contemplated by CERCLA section 102(a). EPA also conducted a “totality of the circumstances” analysis considering multiple factors, including benefits versus costs. Ultimately, EPA determined that the advantages of designation outweighed the disadvantages.
Among other things, the final rule will require parties to report to federal, state, tribal, and local authorities, as applicable, unpermitted releases of PFOA and/or PFOS at or above the applicable “reportable quantity” (one pound or more within a 24-hour period). It also imposes certain obligations on federal agencies when selling and transferring federally owned real property, e.g., providing notice if PFOA/PFOS (or any other hazardous substance) was stored on-site for a year or more and/or was released or disposed of on-site and warranting that the United States has remediated the property prior to the transfer (and will conduct future remediation as necessary).
More broadly, the final rule provides the federal government additional authority under CERCLA to address PFOA/PFOS contamination in the environment. It will allow EPA and other agencies with delegated CERCLA authority to: (1) respond to PFOA/PFOS releases without making an imminent and substantial danger finding; (2) require potentially responsible parties (PRPs) to clean up PFOA/PFOS contamination; and (3) recover cleanup costs from PRPs. Private parties who conduct cleanups consistent with CERCLA’s National Contingency Plan will be able to seek to recover PFAS cleanup costs from other PRPs. The final rule could potentially affect closed sites with existing remedies, e.g., if the presence of PFOA and/or PFOS affects the protectiveness of the remedy. However, these sites will have to be addressed on a case-by-case basis according to site-specific facts.
In a related action, on April 19, 2024, EPA issued a policy memorandum, “PFAS Enforcement Discretion and Settlement Policy Under CERCLA” (“Policy”) summarizing the agency’s intent to use its discretion to not “pursue entities where equitable factors do not support seeking response actions or costs under CERCLA . . . .” These entities include community water systems and publicly owned treatment works, municipal separate storm sewer systems, publicly owned/operated municipal solid waste landfills, publicly owned airports and local fire departments, and farms where biosolids are applied to the land. EPA will also consider not seeking PFAS response actions or costs under CERCLA based on the totality of four factors:
- Whether the entity is a state, local, or tribal government, or works on behalf of or conducts a service that otherwise would be performed by a state, local, or tribal government.
- Whether the entity performs a public service role in:
- Providing safe drinking water;
- Handling of municipal solid waste;
- Treating or managing stormwater or wastewater;
- Disposing of, arranging for the disposal of, or reactivating pollution control residuals (e.g., municipal biosolids and activated carbon filters);
- Ensuring beneficial application of products from the wastewater treatment process as a fertilizer substitute or soil conditioner; or
- Performing emergency fire suppression services.
- Whether the entity manufactured PFAS or used PFAS as part of an industrial process.
- Whether, and to what degree, the entity is actively involved in the use, storage, treatment, transport, or disposal of PFAS.
EPA says it will focus “on holding accountable those parties that have played a significant role in releasing or exacerbating the spread of PFAS into the environment, such as those who have manufactured PFAS or used PFAS in the manufacturing process, and other industrial parties,” called “major PRPs” under the Policy. In addition to its enforcement discretion, EPA says it can use its settlement authority in one of two ways to protect parties that satisfy the equitable factors. First, in a settlement with a major PRP, EPA could require the major PRP to waive its right to sue such non-settling parties. Second, EPA may enter into a settlement agreement with a party where factors do not support enforcement, whereby the settling party resolves its CERCLA liability and is not liable for third-party contribution claims for matters covered by the settlement.
EPA cautions that exercising its discretion under the Policy is contingent upon full cooperation by an applicable party, the Policy does not exempt parties from other CERCLA reporting requirements, e.g., PFAS releases, and the Policy does not apply to enforcement actions outside of CERCLA. EPA also notes that the Policy’s scope may evolve to reflect scientific and/or regulatory advances. More information about EPA’s designation of PFOA and PFOS as hazardous substances under CERCLA is available here, and more information about EPA’s broader PFAS regulatory goals are detailed in the agency’s “PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024,” with its annual progress reports, available here.
As the federal government continues to ramp up its statutory and regulatory efforts to address PFAS across multiple program areas, Babst Calland attorneys will track these developments and are available to assist you with these matters. For more information on this development or related matters, please contact Jean M. Mosites at (412) 394-6468 or jmosites@babstcalland.com, or Matthew C. Wood at (412) 394-6583 or mwood@babstcalland.com, or any of our other environmental attorneys. For additional resources and more information on other PFAS developments, please visit Babst Calland’s PFAS Perspectives page, here.
Environmental Alert
(by Kip Power and Robert Stonestreet)
The federal Environmental Protection Agency (EPA) has agreed to impose novel water quality requirements for West Virginia streams to resolve a lawsuit filed by multiple environmental advocacy organizations. On March 18, 2024, the Sierra Club, the West Virginia Highlands Conservancy, and the West Virginia Rivers Coalition (Plaintiffs) filed a lawsuit against EPA in the U.S. District Court for the Southern District of West Virginia (at Huntington). The suit alleges that EPA has improperly failed to take action under the federal Clean Water Act with respect to certain “biologically impaired” streams located in the Lower Guyandotte River Watershed in West Virginia. Specifically, Plaintiffs assert that because the West Virginia Department of Environmental Protection (WVDEP) has failed to do so, EPA must step in and develop pollution reduction plans (known as “total maximum daily loads” or “TMDLs”) for those streams.
However, rather than seek to reduce levels of conventional pollutants (e.g., iron, aluminum, etc.), the lawsuit addresses the concentration of dissolved minerals in the water (often referred to as “total dissolved solids” or conductivity). According to the Plaintiffs, certain levels of conductivity lead to an adverse impact (known as “ionic toxicity”) on specific species of aquatic life. Neither West Virginia nor EPA has developed a specific water quality standard for total dissolved solids or conductivity. A wide range of activities can affect conductivity levels of a stream, including wastewater treatment and earth disturbances associated with construction activities or mining. Naturally occurring conductivity levels can also vary widely among different streams.
About 10 days after the suit was filed, Plaintiffs and EPA announced a settlement, in the form of a proposed Consent Decree (CD). 89 Federal Register 22140 (March 29, 2024). According to the Federal Register notice, the parties have been discussing the settlement for approximately one year (since Plaintiffs sent EPA notice of their intent to file suit, on March 21, 2023). Unless extended, written comments on the proposed CD will only be accepted by EPA until April 29, 2024.
The CD is available at https://www.regulations.gov (Docket No. EPA-HQ-OGC-2024-0145), along with public comments and other documents in the public docket. Under the proposed CD, EPA must publish draft TMDLs for the subject streams for public comment by October 31, 2024 and finalize those TMDLs by January 15, 2025 unless WVDEP does so first (which EPA must approve). Plaintiffs agree not to pursue further litigation against EPA alleging the need for TMDLs to address “ionic toxicity” in other West Virginia watersheds until after January 15, 2025.
The proposed CD could well have implications for areas far beyond those streams specifically identified in it. By imposing limits on conductivity or total dissolved solids in order to limit ionic toxicity, the TMDL process completed under the CD will effectively create a new water quality standard that may come to be applied throughout the state in order to purportedly protect against violations of West Virginia’s “narrative” water quality standards (i.e., descriptions of certain prohibited conditions, such as distinctly visible foam, sludge deposits, foul odors, discoloration, or “materials in concentrations which are harmful, hazardous, or toxic to man, animal or aquatic life”). Typically, such water quality standard-setting takes place through federal and state legislative and rulemaking processes, and there are valid concerns that establishing regulatory standards through lawsuits is a poor substitute for those processes. That concern is heightened when addressing a measure such as conductivity, which may be affected by a wide range of activities and may have effects that vary greatly from one location to another. Treatment methods to reduce conductivity levels can be expensive and difficult to implement.
For questions about the proposed Consent Decree or other Clean Water Act issues, please contact Christopher B. (Kip) Power at (681) 265-1362 or cpower@babstcalland.com, or Robert M. Stonestreet at (681) 265-1364 or rstonestreet@babstcalland.com.
PIOGA Press
(By Kevin Garber and Jessica Deyoe)
On March 13, 2024, Governor Shapiro’s office announced the Pennsylvania Climate Emissions Reduction Initiative (PACER) and the Pennsylvania Reliable Energy Sustainability Standard (PRESS) legislative proposals. Together, these two initiatives seek to lower greenhouse gas emissions and promote the use of alternative energy for the electric energy grid in Pennsylvania. We note that first, as of the date of this article, the language of the bills has not been made publicly available and second, these initiatives are not mutually exclusive, so it is possible the legislature may pass only one of them.
Pennsylvania Climate Emissions Reduction Initiative (PACER)
PACER is a Pennsylvania-specific-cap-and-invest program that, if passed, would set a declining cap on carbon emissions from Pennsylvania’s fossil fuel-fired power plants and require them to purchase credits from the Commonwealth to offset emissions. It would also remove Pennsylvania from the Regional Greenhouse Gas Initiative (RGGI). PACER Credits would be tradeable emission credits, similar to RGGI credits; however, non-profit entities will not be allowed to purchase PACER credits to remove them from the market. This program would direct DEP to conduct a Pennsylvania-run auction similar to the RGGI program. DEP could be allowed to delegate the implementation of the auction to an agent but retain enforcement authority. If passed, DEP will be required to review the Pennsylvania Base Budget established under the currently enjoined RGGI regulation within 120 days to determine whether a new Base Budge should be established. The new regulation, if needed, would be promulgated by the streamlined Final Omit regulatory process.
Revenue from the sale of CO2 allowances under the PACER Program would fund the following recipients and programs: (1) consumers as an on-bill rebate by the Public Utility Commission; (2) a “Workforce Enhancement Account” for projects such as carbon capture and storage, new uses for legacy coal and natural gas sites such as modular reactor development and construction, geothermal deployment, battery storage facilities, retrofitting natural gas plants with carbon capture equipment, and advanced manufacturing and clean hydrogen development; (3) projects in the Commonwealth that reduce air pollution; and (4) a Low-Income Support Account used to reduce the energy bills of low-income consumers.
Pennsylvania Reliable Energy Sustainability Standard (PRESS)
PRESS aims to expand the Alternative Energy Portfolio Standards Act established in Pennsylvania 20 years ago, while adding nuclear power and next generation technologies such as fusion and clean forms of natural gas. To accomplish this, PRESS would promote energy build-out in Pennsylvania and create a broader mix of energy resources in Pennsylvania. PRESS emphasizes resilient forms of energy generation, including battery storage, natural gas, and nuclear power to promote reliability in the energy grid. It targets specific forms of energy development to build a more diverse, reliable grid. Reliability of the PJM grid will be a crucial challenge in the coming decades.
If passed, PRESS will raise the target for renewable energy in Tier I to 30% by 2035. Tier I includes biologically derived methane gas, solar photovoltaic and solar thermal energy, wind power, low-impact hydropower, geothermal energy, and biomass energy. Similarly, the target for renewable energy in Tier II will increase to 10% by 2035. Tier II includes Tier I reliable energy portfolio sources located within Pennsylvania, distributed generation systems, demand-side management, large-scale hydropower, fuel cells, coal mine methane, small modular reactors, and fusions technology. PRESS creates a new Tier III that includes waste coal, municipal solid waste, integrated combined coal gasification technology, generation of electricity utilizing by-products of the pulping process and wood manufacturing process, Tier I reliable energy portfolio sources located within Pennsylvania, and natural gas or coal using hydrogen (20%) co-fired blend or CCUS equivalent until 2033, requires CCUS or co-firing with 80% hydrogen blend by 2038. Tier III has a target of 10% by 2035.
For more information and insights on what PRESS and PACER may mean to the energy industry, tune in to Kevin Garber’s presentation at PIOGA’s Spring Meeting on April 18, 2024.
To view the full article, click here.
Reprinted with permission from the April 2024 issue of The PIOGA Press. All rights reserved.
The Legal Intelligencer
(by Harley Stone, Anna Jewart and Alex Farone)
In August of 2023, we discussed the ongoing trend of recent cases to blur the line between public officials’ “public” and “private” digital communications and social media, focusing primarily on two 2023 Pennsylvania Commonwealth Court cases – Penncrest School District v. Cagle and Wyoming Borough v. Boyer. In these cases the courts were called upon to decide when a public official’s own social media posts are “public” and therefore subject to disclosure under the Pennsylvania Right-to-Know Law (RTKL). While release of messages or comments intended to be kept private can be embarrassing, on March 15, 2024, the U.S. Supreme Court weighed in on an issue that more directly impacts the legal interests of public officials: when does a public official’s social media activity on a personal account constitute state action under 42 U.S.C. §1983, subjecting the public official to liability?
Section 1983 provides a cause of action against “[e]very person who, under color of any statute, ordinance, regulation, custom, or usage of any State” deprives someone of a civil right granted under the U.S. constitutional or federal statute. It protects against acts attributable to a State (interpreted to include local government agencies), not those of a private person. When a person associated with a State or local government agency acts in a manner that allegedly deprives someone of a federal constitutional or statutory right, the question therefore arises as to whether that act rose to the level of “state action” that triggers potential §1983 liability or was merely the private conduct of that individual. The line between private conduct and state action can be hard to draw, and the age of social media has only made such distinctions more difficult. The U.S. Supreme Court recently weighed in on this specific, but prolific, issue in Lindke v. Freed, No. 22-611 (Mar. 15, 2024).
Lindke v. Freed involved a city manager who created a private, personal Facebook profile page in 2008. He later changed the settings on his page so that it would be “public” – meaning anyone could see and comment on his posts. In 2014 he updated his profile page to reflect that he had been appointed as city manager and thereafter continued to post on the profile page about his private life as well as information related to his job and issues of public concern. During the COVID-19 Pandemic, a member of the public commented on some of the manager’s posts and expressed displeasure with the city’s approach to the pandemic. The manager initially deleted these comments, then ultimately blocked the user. The Facebook user sued the manager under §1983, arguing that the manager had violated the user’s right to free speech under the First Amendment because the manager’s Facebook profile page was a public forum.
The U.S. District Court for Eastern District of Michigan granted summary judgment to the manager, finding that the Facebook profile page was populated with predominantly personal posts and that there was an absence of “government involvement” in the posts. On appeal from the district court’s decision, the Sixth Circuit inquired into whether the manager ran his profile page as part of his actual or apparent duties, or whether the social media activity “couldn’t happen in the same way without the authority of the office.” In addressing this issue, the Sixth Circuit considered the following nonexclusive factors: whether (1) state law requires the office holder to maintain a social media account; (2) state funds are used in running the account; (3) the account belongs to the state or office itself; and (4) operating the account requires the authority of the office, e.g. , the office holder instructs government staff to operate the account. These same factors were considered by the Pennsylvania Commonwealth Court in Penncrest to aid in establishing the factors applicable the “public” nature of social media posts under the Pennsylvania RTKL. The Sixth Circuit affirmed the District Court.
On appeal, the U.S. Supreme Court noted that the manager’s status as an employee of the State was not determinative, and the distinction between private conduct and state action turns on substance, not labels. According to the Court, while public officials can act on behalf of the State, they are also private citizens with their own constitutional rights. The “state action” requirement of §1983 excludes from liability the acts of officers in the ambit of their personal pursuits, and thereby protects a sphere of individual liberty for those who serve as public officials or employees. This case, as the Court discussed, illustrates this dynamic. The manager did not lose his own First Amendment rights when he became city manager, and he was permitted to speak as a private citizen even as to matters of public concern, or about information learned through his public employment. The Court noted, as the Pennsylvania Commonwealth Court had in Penncrest, that there was no consensus amongst the federal circuits as to when a public official was acting in an official capacity when engaging in social media activity. Therefore, the Supreme Court established a new two-part, fact-specific rule to analyze this issue: a public official’s social media activity constitutes state action under §1983 only if the official (1) possessed actual authority to speak on the State’s behalf, and (2) purported to exercise that authority when the official spoke on social media. The appearance and function of the social media account are relative to the second step, but they cannot make up for lack of state authority in the first step. Ultimately, the Court unanimously vacated and remanded for consideration of the Facebook user’s claim in light of its newly established test.
Lindke resolved the discrepancies between federal circuits regarding state action and social media under §1983. It should therefore be closely reviewed and considered by any public employee or official who desires to engage in social media activity. However, it also clouds the longevity of Pennsylvania cases, such as Penncrest and Boyer, which established factors for the related, but not identical, legal question of when private social media is a “public” record under the RTKL.
Additionally, municipalities should take this opportunity to revisit their internal policies concerning social media, using Lindke as a guidepost. Social media policies can be made applicable to both municipal employees and elected officials due to RTKL and §1983 concerns. These policies should caution against or prohibit the employees or elected officials from making public posts on social media concerning official matters unless the employee or elected official either (1) makes a disclaimer that they are speaking on their own personal behalf and not on behalf of the municipality or (2) specifically states that they are speaking with the authority of or on behalf of the municipality. These social media policies can also place limits on which municipal employees have the authority to speak on behalf of the municipality without prior approval of a supervisor or the elected officials, and the protocol for obtaining such approval.
Harlan S. Stone is a Shareholder in the Public Sector Services and Energy and Natural Resources groups of the Pittsburgh law firm of Babst, Calland, Clements & Zomnir, P.C. Anna S. Jewart is an associate in Babst Calland’s Public Sector Services group and focuses her practice on zoning, subdivision, land development, and general municipal matters. Alexandra G. Farone is an associate in Babst Calland’s Employment & Labor and Litigation groups, and her practice includes employment, labor, and human resources counseling to both public and private sector clients.
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Reprinted with permission from the April 12, 2024 edition of The Legal Intelligencer© 2024 ALM Media Properties, LLC. All rights reserved.