Articles, Alerts & Perspectives Archive

Pennsylvania PUC Denies Petition to Reconsider Jurisdiction over Certain Class 1 Gathering Pipelines

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Christina Puhnaty)

On March 16, 2023, the Pennsylvania Public Utility Commission (PUC) entered an order (Order) denying a petition for reconsideration (Petition) of its December 8, 2022, implementation order (Implementation Order), under which the PUC asserted jurisdiction over Class 1 natural gas gathering pipelines, including Type R intrastate pipelines, and certain liquid natural gas facilities. To reach this conclusion, the PUC relied on the Gas and Hazardous Liquids Pipelines Act (Act 127), 58 Pa. Stat. §§ 801.101–.1101, and amendments to regulations made in the final Gas Gathering Rule of the Pipeline and Hazardous Materials Safety Administration (PHMSA), 86 Fed. Reg. 63,266 (Nov. 15, 2021) (to be codified at 49 C.F.R. pts. 191, 192). As de-scribed in the Implementation Order, the PUC determined that Type R lines were subject to Act 127 registration and assessment, meaning that as issued, the Implementation Order would have required operators of Type R lines to register with the PUC on an annual basis and pay annual assessments.

In its Petition, the Pennsylvania Independent Oil & Gas Association (PIOGA), a trade association representing Pennsylvania oil and natural gas interests, challenged the PUC’s conclusion. It argued that the PUC had committed an error of law because Type R lines are subject only to annual and incident reporting requirements under 49 C.F.R. Part 191, which governs annual, incident, and other reporting requirements, but not subject to safety requirements under 49 C.F.R. Part 192, which governs minimum federal safety standards. PIOGA contended that because Type R lines are not subject to the Part 192 safety regulations, they do not implicate the PUC’s pipeline safety program. As such, the PUC lacked jurisdiction under Act 127, with its accompanying registration and annual assessment requirements, which apply only to “pipelines, pipeline operators or pipeline facilities regulated under Federal pipeline safety laws.” 58 Pa. Stat. § 801.103.

The PUC rejected PIOGA’s argument, finding that Act 127 defines “Federal pipeline safety laws” as “[t]he provisions of 49 U.S.C. Ch. 601 (relating to safety), the Hazardous Liquid Pipeline Safety Act of 1979 (Public Law 96-129, 93 Stat. 989), the Pipeline Safety Improvement Act of 2002 (Public Law 107-355, 116 Stat. 2985) and the regulations promulgated under the acts.” 58 Pa. Stat. § 801.102. The PUC reasoned that because 49 C.F.R. Subtitle B, Subchapter D, Parts 190—199, were promulgated pursuant to 49 U.S.C. Ch. 601, those Parts were subject to Act 127 and thus fall under the PUC’s jurisdiction. Accordingly, the PUC denied PIOGA’s Petition and determined that Type R pipeline operators must register annually with the PUC and it must maintain a registry of these operators.

In addition to the registration requirements, the PUC clarified two points on assessment and reporting obligations for Type R pipelines. The PUC said that Act 127 assessments apply to “regulated onshore [gas] gathering pipeline miles.” 58 Pa. Stat. § 801.503(b). Because Type R pipelines are specifically excluded from that definition under 49 C.F.R. Part 192, the PUC determined that there is no basis under Act 127 to assess Type R pipeline operators. Regarding reporting, the PUC explained that although it has a duty and the authority under Act 127 to regulate pipeline operators consistent with federal pipeline safety laws, PHMSA intends to enforce the 40 C.F.R. Part 191 reporting requirements for Type R intrastate pipeline operators, meaning the PUC does not need to enforce those requirements at this time.

The Implementation Order, PIOGA’s Petition, and the Order, as well as other related documents, are available at PUC Docket # M-2012-2282031 at https://www.puc.pa.gov/search/document-search/.

PADEP Holds Public Meetings Regarding Climate Action for Environmental Justice Communities

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi Buchman and Christina Puhnaty)

In April 2023, the Pennsylvania Department of Environmental Protection’s (PADEP) Energy Programs Office, local partners, and its contractor, Preservation Design Partnership, hosted meetings with leaders and residents of environmental justice (EJ) communities around the state. The meetings were intended as listening sessions to learn how PADEP can assist Pennsylvania’s EJ communities become more sustainable and prepare for the effects of climate change. The meetings also provided information on the Energy Programs Office’s Climate Action for Environmental Justice Communities Program and provided information on additional available resources. Sessions were held in Meadville, Pittsburgh, Scranton, Reading, Harrisburg, Norristown, and Philadelphia, and also provided for virtual attendance. Discussions covered a wide range of topics including fuel source strategies, land use regulations and building codes, infrastructure, and public health.

During its Philadelphia session, the Energy Programs Office representative indicated that PADEP plans to be more intentional about the inclusion of EJ in the Pennsylvania Climate Action Plan, which is updated every three years (the last update was released in 2021). In addition, what they learn from the meetings will inform other program development, such as grants. Lastly, the Energy Programs Office plans to incorporate community feedback from the meetings in the Guide to Climate Action for Environmental Justice Communities that is currently under development. The guide is intended to inform PADEP’s climate action planning to ensure that strategies produce meaningful benefits in EJ communities and adequately prioritize state and federal funding. PADEP anticipates releasing the guide in summer 2023.

In Response to Environmental Groups’ Request, PADEP Declines to Issue Order to Shell Plant to Cease Operations

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Christina Puhnaty)

On February 17, 2023, the Clean Air Council (CAC) and the Environmental Integrity Project (EIP) sent a letter to the Pennsylvania Department of Environmental Protection (PADEP) requesting that the agency issue an order to Shell Chemical Appalachia LLC (Shell) to temporarily halt operations at the Shell Polymers Monaca Plant in Beaver County, Pennsylvania (Plant). See Letter from EIP & CAC to PADEP (Feb. 17, 2023). Specifically, CAC and EIP alleged that people living near the Plant had been exposed to volatile organic compounds (VOCs), nitrogen oxide (NOx), and other pollutants emitted in violation of Shell’s plan approval, the federal Clean Air Act, and the Pennsylvania Air Pollution Control Act (APCA). CAC and EIP cited PADEP’s February 2023 notice of violation (NOV) documenting the Plant’s exceedances of the 12-month rolling total emission limitations for VOCs in November and December 2022 and the 12-month rolling total emission limitations for NOx in December 2022, as well as the agency’s December 2022 NOV for the same VOCs emissions violations during September and October 2022. CAC and EIP also highlighted multiple malfunction reports submitted to PADEP by Shell documenting alleged violations of the visible emissions limitations of the Clean Air Act and Shell’s plan approval related to emissions from the Plant’s flares.

CAC and EIP urged PADEP to immediately act using the authority granted to it under the APCA, arguing that the statute allows the agency to issue orders to facilities to cease operations in violation of the APCA, plan approvals, or permits, citing as precedent a stop construction order PADEP issued in 2018 related to incidents during the construction of the Mariner East 2 pipeline. CAC and EIP requested that PADEP issue a similar order to Shell until the company can demonstrate that the Plant can operate in compliance with applicable laws. Prior to submitting their request to PADEP, CAC and EIP also sent Shell a notice of intent to sue the company under the citizen suit provisions of the Clean Air Act and the APCA to compel the Plant’s compliance with applicable requirements. See Notice of Intent to Sue (Feb. 2, 2023).

PADEP responded to CAC and EIP’s allegations in a February 28, 2023, letter in which the agency declined to issue an order to Shell, citing ongoing evaluations and inquiries, but said it would consider CAC and EIP’s letter in evaluating future enforcement actions. See PADEP Response (Feb. 28, 2023). The agency explained that according to Shell, the Plant is still in the commissioning phase, which started in mid-2022, and Shell has represented that the malfunctions and violations during commissioning will not occur during normal operations. PADEP also noted that it had fined Shell, was considering other penalties, and directed Shell to submit an emission exceedance report and mitigation plan examining the causes of, and identifying measures to prevent, the violations and malfunctions, which Shell did on January 30, 2023. Since then, PADEP requested, and Shell provided, additional technical information regarding the mitigation plan. PADEP has also issued Shell four more NOVs and Shell has submitted another malfunction report. For additional information, see https://www.dep.pa.gov/About/Regi onal/SouthwestRegion/Community%20Information/Pages/Shell-Petrochemical-Complex-.aspx.

West Virginia Supreme Court Refuses to Extend Employer’s Duty of Care in Speedway v. Jarrett

Employment and Labor Alert

(by Mychal Schulz)

The West Virginia Supreme Court issued a decision in a closely watched case where the estate of a motorcyclist killed by an employee after she left work, and who was found to have numerous prescription drugs in her system at the time of the accident, sought to impose liability on the employer.

Facts.
Brandy Liggett began her employment with Speedway on September 13, 2015, and she received training while working at a Speedway store on September 13, 14, and 15. On September 15, Ms. Liggett worked the 6 a.m. to 2 p.m. shift. During that shift, her manager, Bobby Jo Maguire, and another employee, Jennifer Wells, observed Ms. Liggett nod off to sleep. Specifically, Ms. Maguire observed Ms. Liggett appearing to fall asleep a couple of times while watching training videos. Ms. Maguire sent Ms. Liggett outside, believing that the fresh air would wake her up, but then Ms. Maguire and Ms. Wells observed Ms. Liggett nodding her head and appearing to fall asleep while standing next to a trash can outside. Ms. Wells remarked to Ms. Maguire that “something was going on” and that “something might be wrong with” Ms. Liggett.

Nonetheless, as Ms. Liggett approached the end of her shift, she was asked if she would work an extra hour as Speedway needed another person from 2 p.m. to 3 p.m. because of a call off. Neither Ms. Maguire nor Ms. Wells could stay, so Ms. Liggett volunteered to stay that extra hour.

At 3 p.m., Ms. Liggett left the Speedway and drove to her son’s middle school to drop off football equipment. Thereafter, she drove home, but on her way home and about five miles from the school, she crossed the center line and struck a motorcycle, killing the driver, Kevin Jarrett. Following the accident, Ms. Liggett tested positive for amphetamines, benzodiazepine, and suboxone, none of which had been prescribed for her. Ms. Liggett pled guilty to driving under the influence causing death, negligent homicide, and driving left of center.

The Lawsuit.
Mr. Jarrett’s estate filed a wrongful death complaint against both Ms. Liggett and Speedway, as Ms. Liggett’s employer. Ms. Liggett’s carrier settled for policy limits, and the case proceeded against Speedway under the theory that Speedway, as the employer, was under a duty to control Ms. Liggett’s conduct and/or or that Speedway’s conduct caused, in part, the accident.

The circuit court denied Speedway’s motion for summary judgment based upon Speedway’s argument that it owed no duty to Mr. Jarrett or the public, and the case proceeded to trial. The jury returned a verdict that placed 70 percent of the fault on Ms. Liggett and 30 percent of the fault on Speedway. After the circuit court determined that the jury did not award sufficient non-economic damages, a second damages-only trial resulted in a verdict of a little over $6.6 million, of which Speedway was liable for a little over $2 million. Thereafter, Speedway appealed the circuit court’s denial of its motion for judgment as a matter of law.

The Issue.
On appeal, the Supreme Court found that the “issue is whether the circuit court erred in concluding that Speedway engaged in conduct that created an unreasonable risk of harm to others, including Mr. Jarrett, thereby triggering a legal duty on the part of Speedway to prevent Ms. Liggett from driving home after work.” Specifically, the Supreme Court noted that “[t]he issue before us is whether . . . Speedway’s conduct relating to Ms. Liggett created a foreseeable risk of harm to others that Speedway had a duty to guard against.” Speedway, No. 21-0215, pp. 9, 15.

In finding that the Speedway did not owe a duty here, the Supreme Court noted that, to have such a duty, Speedway “must have engaged in ‘affirmative conduct, thereafter realize[d] or should [have] realize[d] that such conduct . . . created an unreasonable risk ofharm to another[,] including Mr. Jarrett’” Speedway, No. 21-0215 at 15 (citing to Robertson v. LeMaster, 301 S.E.2d 563 (W. Va. 1983)).

The Supreme Court reasoned:

Speedway’s conduct of allowing Ms. Liggett to continue working her shift and then work an extra hour past her shift and to leave her unsupervised while watching training videos does not constitute “affirmative conduct” that “created an unreasonable risk of harm to another.” Rather, the evidence was uncontroverted at trial that Ms. Liggett arrived for her shift while already under the influence of drugs and then took more drugs at work surreptitiously. There was no evidence that anyone at Speedway contributed to her state of impairment from drugs by either providing or condoning her consumption of them. Aside from the three instances where Ms. Liggett was observed falling asleep, she exhibited no signs of impairment such as glassy eyes or slurred speech, and she worked the remainder of her shift (including the hour of overtime) without incident. Following the accident, Ms. Liggett tested positive for various and sundry prescription medications that she had illegally purchased “off the street” and she pled guilty to various crimes related to the accident, including driving under the influence causing death. Further, although respondent argues that Ms. Maguire either knew, or should have known, that Ms. Liggett was too “exhausted” to drive herself home, thereby suggesting that fatigue contributed to the accident, she points to no evidence indicating that fatigue was found to have caused or contributed to the accident. In allowing Ms. Liggett to drive her own vehicle home after her shift, Speedway “did no more than acquiesce in [her] determination to drive [her] own car.” Indeed, Ms. Liggett testified that she believed she was capable of driving herself home that day, that there were family members she could have called if she needed a ride, that she had money for a cab, and that she would have refused a ride home had anyone from Speedway offered to drive her. The evidence at trial, when viewed in the light most favorable to respondent, failed to demonstrate that Speedway engaged in affirmative conduct that created an unreasonable risk of harm to the motoring public, including Mr. Jarrett. Therefore, Speedway had no duty to exercise reasonable care by preventing Ms. Liggett from driving.

Speedway, No. 21-0215 at 16-19 (citations omitted).

Notably, the estate argued that despite Speedway’s employees seeing Ms. Liggett fall asleep during the training videos and changing garbage cans, and despite the employees thinking that “something was going on” and that “something might be wrong with” Ms. Liggett, Speedway’s supervisor should have either taken her car keys away from her or called either a cab or other family member to take her home. It posited that these “acts of omission” – i.e., its decisions “not to conduct an investigation of Ms. Liggett’s impairment” and “not to fully evaluate [Ms. Liggett] before and after her overtime shift” – represented “affirmative conduct” for which Speedway could be liable. Speedway, No. 21-0215 at 19, n. 17. The Supreme Court rejected this position because the evidence, in its view, “simply did not warrant an investigation or evaluation of Ms. Liggett for drugs and/or fatigue and, thus, a failure to act in this regard did not give rise to a duty on the part of Speedway to protect others by preventing Ms. Liggett from driving home after work.” Speedway, No. 21-0215 at 19, n. 17.

The Impact.
The Speedway decision represents a significant win for employers. An adverse decision would have potentially exposed an employer to liability if the employer – and especially front-line supervisors – failed to sufficiently investigate if an employee appeared “off” or just tired at work, and then gets in an accident on the way home from work. This would have put a significant burden on front-line supervisors to do “something” if she observed an employee who is tired or “off” and would have been an ominous extension of an employer’s duty of care to the general public.

Still, employers still need to be aware of whether circumstances indicate that an employee is under the influence of a drugs or alcohol, and if circumstances indicate that an employee is under the influence, employers must take affirmative steps to prevent the employee from driving a motor vehicle. In Speedway, for example, had the employee slurred her speech or appeared glassy-eyed, the Supreme Court may have found that such circumstances made it reasonably foreseeable that harm would occur if the employee were permitted to drive herself home. In this way, Speedway represents both a win and a cautionary tale for employers.

If you have any questions about the decision made in this case, please contact Mychal S. Schulz at 681.265.1363 or mschulz@babstcalland.com.

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EPA Bets on Low-GHG Hydrogen and Carbon Capture & Sequestration Technologies in Latest Proposed Power Plant Clean Air Act Rule

Legal Intelligencer

(by Gary Steinbauer and Christina Puhnaty)

In the nearly decade-long saga to regulate greenhouse gas (GHG) emissions from fossil fuel-fired power plants, the U.S. EPA recently began the rulemaking process for a new set of regulations that would impose restrictions on emission units at new and existing power plants. On May 23, 2023, the U.S. EPA published a proposed rule entitled “New Source Performance Standards for Greenhouse Gas Emissions From New, Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse Gas Emissions From Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean Energy Rule” (Proposed Rule), starting a comment period that ends on July 24, 2023. 88 Fed. Reg. 33,240 (May 23, 2023). EPA’s Proposed Rule relies heavily on hydrogen co-firing and carbon capture and sequestration (CCS) deployment as part of the decarbonization of the power-producing sector.

In the Proposed Rule, EPA proposes five distinct actions under section 111 of the Clean Air Act (CAA). First, EPA is proposing to amend existing New Source Performance Standards (NSPS) for GHG emissions from new and reconstructed fossil fuel-fired stationary combustion turbine EGUs. Second, EPA is proposing to amend existing NSPS for GHG emissions from fossil fuel-fired steam generating units that undergo a large modification. Third, EPA is proposing emissions guidelines for GHG emissions from existing fossil fuel-fired steam generating EGUs (including coal, oil, and gas-fired steam generating EGUs). Fourth, EPA is proposing emissions guidelines for GHG emissions from the “largest, most frequently operated” existing stationary combustion turbines. Lastly, EPA is proposing to repeal the Affordable Clean Energy (ACE) Rule promulgated by the Trump administration in 2019 because “the emissions guidelines established in ACE do not reflect the Best System of Emissions Reduction (BSER) for steam generating EGUs and are inconsistent with section 111 of the CAA in other respects.” 88 Fed. Reg. at 33,243.

Under section 111 of the CAA, EPA identifies source categories that emit dangerous air pollutants and establishes NSPS for new sources of dangerous air pollutants in that source category, as well as emissions guidelines for certain pollutants from existing sources in that source category. 42 U.S.C. § 7411. In promulgating NSPS and emissions guidelines, EPA must determine the best system of emission reduction (BSER)—taking into account the cost of the reductions, health and environmental impacts, and energy requirements—that is “adequately demonstrated” for the purpose of improving the emissions performance of the covered sources. EPA notes in the Proposed Rule that the agency “may determine a control to be ‘adequately demonstrated’ even if it is new and not yet in widespread commercial use, and, further, that the EPA may reasonably project the development of a control system at a future time and establish requirements that take effect at that time.” The technologies that are “new” and “not yet in widespread commercial use” are CCS and low-GHG fuels/hydrogen co-firing, technologies that could allow steam generating EGUs and stationary combustion turbines to continue producing power with less GHG emissions.

EPA’s reliance on CCS and low-GHG hydrogen in the Proposed Rule is based on Congressional support of these technologies in the 2021 Infrastructure Investment and Jobs Act (IIJA, also known as the Bipartisan Infrastructure Law) and the 2022 Inflation Reduction Act (IRA). The IIJA provided more than $65 billion for infrastructure investments and upgrades for clean energy technologies, including low-GHG hydrogen. Several IIJA programs are intended to improve the country’s transmission capacity and pipeline infrastructure, including the Carbon Dioxide Transportation Infrastructure Finance and Innovation Program to provide federal funding to build carbon dioxide (CO₂) pipelines. The IIJA also allocated $8 billion for the development of regional clean hydrogen hubs across the United States.

The IRA also increased Internal Revenue Code section 45Q tax incentives for the capture and storage of CO₂, including from coal-fired steam generating units and natural gas-fired stationary combustion turbines. This 70 percent increase in credit values equals $85 per metric ton for CO₂ captured and securely stored in geologic formations and $60 per metric ton for CO₂ captured and utilized or securely stored incidentally in conjunction with enhanced oil recovery. New provisions of the Internal Revenue Code at 45V provide tax credits for clean hydrogen, utilizing a tiered approach based on the estimated GHG emissions from the hydrogen production process.

The agency also notes that many utilities across the country have made public commitments to stop using coal and move towards low-GHG energy generation. Relying on these financial incentives and commitments, EPA concludes that low-GHG hydrogen co-firing and CCS are sufficiently achievable such that the agency can establish these technologies as the BSER for GHGs in the power sector.

EPA dismisses any potential legal concerns with the emerging nature of hydrogen and CCS technologies. More specifically, to show that a system of emissions reduction is “adequately demonstrated” to be an achievable emission limitation, the system must be “one which has been shown to be reasonably reliable, reasonably efficient, and which can reasonably be expected to serve the interests of pollution control without becoming exorbitantly costly in an economic or environmental way.” Essex Chem. Corp. v. Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973), cert. denied, 416 U.S. 969 (1974). In the Proposed Rule, EPA cites Sierra Club v. Costle, 657 F.2d 298, 364 (D.C. Cir. 1981) to justify its reliance on new technology that is not yet in widespread commercial use, stating that EPA may “hold the industry to a standard of improved design and operational advances, so long as there is substantial evidence that such improvements are feasible.” According to EPA and its review of relevant case law, “common sense dictates that the EPA may promulgate a rulemaking that imposes a standard on the sources, but establishes the date for compliance as a date-certain in the future, consistent with the period of time the source needs to install and start operating the control equipment.” 88 Fed. Reg. at 33,273. The Proposed Rule lays out timelines for the implementation and adoption of low-GHG hydrogen co-firing and CCS technologies at regulated emission units that EPA projects will provide sufficient time to manufacture the necessary control equipment and ensure that the necessary infrastructure upgrades are made to support these technologies.

EPA is also required by section 111(a)(1) of the CAA to take into account the cost of achieving an emission reduction and the extent to which emissions are reduced when determining whether an emission control is the “best system of emission reduction . . . adequately demonstrated.” When considering the cost of low-GHG hydrogen and CCS technologies in the Proposed Rule, EPA considered both the pre and post-IIJA and IRA cost effectiveness, i.e., costs in dollars per metric ton of GHG reduced. See, e.g., Hydrogen in Combustion Turbine Electric Generating Units, Technical Support Document, EPA Docket ID No. EPA-HQ-OAR-2023-0072 (May 23, 2023), https://www.epa.gov/system/files/documents/2023-05/TSD%20-%20Hydrogen%20in%20Combustion%20Turbine%20EGUs.pdf (Hydrogen TSD). When considering the costs of co-firing hydrogen in combustion turbines, for example, EPA recognized three sets of potential costs: (1) the capital costs of combustion turbines that have the capability of co-firing hydrogen; (2) pipeline infrastructure to deliver hydrogen; and (3) the fuel costs related to production of low-GHG hydrogen. Similarly, when evaluating the costs of CCS for new combined cycle units, for example, EPA considered the cost of installing and operating CO₂ capture equipment as well as the costs of CO₂ transport and storage. See, e.g., Carbon Capture and Storage for Combustion Turbines, Technical Support Document, Docket ID No. EPA-HQ-OAR-2023-0072 (May 23, 2023), https://www.epa.gov/system/files/documents/2023-05/TSD%20-%20GHG%20Mitigation%20Measures%20for%20Combustion%20Turbines.pdf.

The Proposed Rule is expected to garner significant interest by the regulated community, States, and environmental groups. Time will tell whether EPA hits the jackpot on its bet on hydrogen and CCS technologies in its latest suite of CAA regulations aimed at reducing GHG emissions from the power sector.

Gary Steinbauer is a shareholder and Christina Puhnaty is an associate in Babst, Calland, Clements and Zomnir’s environmental group. Their practices focus largely on matters arising under the Clean Air Act, analogous state clean air laws, and their implementing regulations. Contact them at gsteinbauer@babstcalland.com and cpuhnaty@babstcalland.com.

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Supreme Court Removes Barrier to Appeals of “Purely Legal” Issues

Litigation Alert

(by Christina McKinley and Alex Farone)

Last week, the United States Supreme Court ruled that litigants can appeal a summary judgment ruling based on a purely legal issue without filing a post-trial motion to preserve the issue. The unanimous decision authored by Justice Amy Coney Barrett in Dupree v. Younger resolved a significant split among the Circuit Courts of Appeal on this issue. No. 22-210.

For trial practitioners, particularly those who litigate within multiple circuits, Dupree will be a welcome relief, as the ruling comports with the majority of circuits, the Rules of Civil Procedure, and common sense. It will remove one more obstacle from perfecting the appellate record, and it will promote consistency among the circuits. Nevertheless, out of an abundance of caution, counsel should take care to renew their arguments in a post-trial motion even on “legal” summary judgment issues when there may be a question as to whether the issue is “purely legal.”

Prior to Dupree, the First, Fourth, Fifth, Eighth, and Eleventh Circuits had held that when a party is dissatisfied with any summary judgment ruling, that party must file a post-trial motion for judgment as a matter of law, re-raising the issue in order to preserve it for a possible appeal. In contrast, the remaining circuit courts required this preservation exercise only for summary judgment issues decided on factual grounds. With Dupree, the Supreme Court sided with the majority of circuits, drawing a procedural distinction between factual and legal summary judgment determinations. Dupree provides much needed clarity in this procedural arena, where previously, an unwary litigant risked waiver of appellate review if it thought (sensibly) that re-raising a legal issue denied at summary judgment would have been futile.

Requirements of the Federal Rules
Federal Rule of Civil Procedure 56(a) provides that a district court may enter summary judgment on a claim or defense if (1) there is no genuine issue as to any material fact, and (2) the movant is entitled to judgment as a matter of law. Summary judgment motions decided on the first portion of the rule—whether the plaintiff has produced sufficient evidence for a reasonable factfinder to determine that they have met the elements of their claim—are considered factual issue rulings. These types of summary judgment rulings are based on the facts developed at the time of the motion. After a denial of summary judgment, the case moves forward and an additional factual record is established based on presentation of evidence at trial. Because the facts continue to develop leading up to and during trial, the summary judgment factual determinations are rendered stale and moot. As such, if it is dissatisfied with the ultimate determination from a factual standpoint, a party must file a post-trial motion under Federal Rule of Civil Procedure 50 to confirm whether there was sufficient evidence in the trial record to support the verdict.

By contrast, summary judgment determinations based on purely legal issues are made when the facts relating to a dispositive legal issue are not in dispute, and lead the court to find in favor of one party as a matter of law. For example, if the facts of a case are not in dispute as to when a certain negligent act occurred and that the plaintiff was immediately aware of the act and the harm that followed, then whether the lawsuit was timely filed within the statute of limitations period is a purely legal issue that could dispose of the case at summary judgment, regardless of whether factual disputes remain as to liability. Prior to Dupree, in a minority of circuits, a defendant who lost a purely legal argument at summary judgment was required to file a post-trial motion to raise the same issue again in order to preserve the issue for appeal, despite no developments at trial to change the court’s analysis or determination on the legal issue. The majority of circuits instead would not have required this post-trial motion to re-assert a pure legal argument raised previously on summary judgment.

Dupree Resolves the Circuit Split
In Dupree, the Supreme Court held that the rationale underlying the requirements for a renewed post-trial motion on sufficiency of the evidence does not support a requirement for a renewed post-trial motion based on a “purely legal” summary judgment determination. Dupree came before the Court after the Fourth Circuit declined to hear a requested appeal that the case should have been dismissed for failure to exhaust administrative remedies. Inmate Kevin Younger was assaulted by corrections officers while being held in pretrial detention. He pursued a civil rights claim under 42 U.S.C. § 1983 against several prison officials including former lieutenant Neil Dupree. Dupree argued at the summary judgment stage that Younger had failed to exhaust his administrative remedies as required by the Prison Litigation Reform Act. The district court denied summary judgment, stating that there was “no dispute” that the prison system had internally investigated the assault, thereby satisfying the exhaustion requirement. At trial, Dupree did not present any evidence relating to the exhaustion defense. After the jury found Dupree liable and awarded Younger $700,000 in damages, Dupree did not file any post-trial motion to re-raise his exhaustion defense. For this reason, the Fourth Circuit dismissed the appeal. The Supreme Court vacated the Fourth Circuit’s determination, holding that it was error to require a purely legal issue resolved at summary judgment to be renewed in a post-trial motion in order to preserve the issue for appeal.

The Court held that a summary judgment motion is sufficient to preserve legal claims, because pure questions of law are not affected by future developments in the case at trial. Requiring a litigant to renew its summary judgment motion on a purely legal issue in a post-trial motion to the district court is a rote and “empty exercise,” the Court reasoned, because a trial has no impact on the legal issues underlying a case.

The Court also rejected arguments that this ruling would be practically unworkable because the line between factual and legal questions allegedly can be “vexing.” In practice, the appellate courts can easily separate factual and legal issues in the majority of instances.

If you have questions about the Dupree decision, or federal or state court appeals in general, please contact Christina Manfredi McKinley at 412.394.5432 or cmckinley@babstcalland.com or Alexandra G. Farone at 412.394.6521 or afarone@babstcalland.com.

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How buyers can avoid common zoning and land use pitfalls in real estate transactions

Smart Business

(By Adam Burroughs featuring Alyssa Golfieri)

There are common pitfalls related to zoning and land use that can occur in real estate transactions. When acquiring a property with the intent to develop, redevelop, or continue an existing use, there are simple, inexpensive steps buyers can take to get ahead of and navigate these issues during the due diligence process.

“Local regulation and municipal cooperation can be a big hurdle,” says Alyssa E. Golfieri, a shareholder at Babst Calland. “But the zoning due diligence process doesn’t have to be complicated and can be started before buyers execute a letter of intent.”

Smart Business spoke with Golfieri about zoning and land use due diligence in real estate transactions.

What documents need to be acquired, reviewed and analyzed?

Before a buyer’s due diligence period expires, the buyer should confirm what, if any, zoning, land use and condemnation-related matters are or were pending, initiated, or approved that affect the subject property. Relying on the seller to provide relevant zoning and land use records is a major pitfall buyers fall into. It is rare that a seller can produce such records, especially when the seller isn’t the original developer. Buyers should take advantage of their state’s public disclosure laws because it is an easy, inexpensive process that can yield significant results. Submit the records request early in the process because municipalities have a generous range of time for response.

What should buyers know about existing permits and approvals?

Failure to confirm conditions or obligations that are imposed through existing permits and approvals is a common pitfall for buyers. Buyers need to understand what permits and approvals exist for the property and use as early as possible because they often contain conditions or ongoing obligations that become the buyer’s responsibility upon closing. Such permits and approvals could include conditional use approvals, special exception approvals, variances, special permits, land development/site plan approval, certificates of occupancy, and business licenses.

Inspections are a very common condition or obligation that trips up deals. Some municipalities tie inspection requirements to business license registrations or renewals, some tie it to the transfer of a certificate of occupancy, some impose it as a condition to approval, and other stricter municipalities require it upon a mere change in ownership.

Once buyers confirm the universe of conditions and obligations, including inspection obligations, they can proactively develop a plan with their sellers for addressing any identified issues.

What should buyers know about new approvals?

The biggest pitfall for buyers purchasing property for a new use or development is failure to confirm that local zoning regulations allow the property to be used and developed in the manner that the buyer intends. If acquiring property for purposes of a new development, prior to the expiration of its due diligence period, a buyer needs to confirm that the buyer’s proposed use is permitted in the underlying zoning district; the buyer’s proposed site development fits on the property within the confines of current bulk and area zoning regulations; and what, if any, supplemental zoning regulations are applicable. Most zoning regulations are available online, so buyers can do this analysis before executing a letter of intent.

In a similar vein, if acquiring an already-developed property or business, a buyer needs to confirm that the use is permitted in the underlying zoning district, and all existing structures and improvements comply with current bulk and area zoning regulations. If the answer is no to either of the foregoing questions, the use, structure, or improvement is nonconforming, and it is the property owner’s burden to prove such nonconformity is legal and permitted to continue. The easiest way to do this is producing municipal permits, approvals, and authorized site plans. Hence, collecting and becoming knowledgeable of existing zoning and land use documents related to the property, from the seller and the municipality, is a critical step in real estate transactions.

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D.C. Circuit vacates PHMSA’s final rule applied to gathering pipelines

GO-WV

(By Christina Manfredi McKinley and Keith Coyle)

On May 16, 2023, the D.C. Circuit issued a decision vacating in its entirety a challenged piece of a rule related to safety valve requirements for gas gathering lines. That decision, GPA Midstream Association and American Petroleum Institute v. United States Department of Transportation and Pipeline and Hazardous Safety Administration, held that the agency violated the Administrative Procedure Act and acted arbitrarily and capriciously when it failed to explain, let alone consider, why the rulemaking’s safety standard would practicable and make sense for regulated gathering lines until issuing the final rule, when there could be no peer review or public comment.

In 2020, PHMSA published a notice of proposed rulemaking to comply with a Congressional directive to the agency to consider the use of valve, or automatic shutoff technology, on gas transmission lines. But the notice of proposed rulemaking and risk assessment said nothing about the costs and benefits of applying the standard to gathering pipelines. Nevertheless, because of certain pre-existing rules, new or replaced regulated gathering lines would have been subject to the proposed standard unless expressly carved out by the rule.

As such, in their comments to the proposed rule, the Petitioners sought an exemption for gathering pipelines. Among other things, they argued the risk assessment lacked the cost-benefit data needed to justify applying the rule to gathering pipelines. Knowing these objections, PHMSA proceeded with the rulemaking anyway. In the final rule’s preamble, PHMSA addressed some of the objections. It pointed out that the proposed rule never said regulated gathering lines would be exempt—which is correct because the proposed rule said nothing at all—and it included some data about gathering lines in the final rule’s risk assessment. Yet it made no attempt to quantify the benefits for gathering lines.

Petitioners sought review in the D.C. Circuit. The crux of Petitioners’ arguments was that by simply asserting that the analysis for transmission lines was applicable to gathering lines after the fact, PHMSA deprived the public of the right to participate in the notice and comment process, contrary to law. In fact, there are good reasons that gathering and transmission lines might be treated distinctly, and by short-circuiting the process, PHMSA ignored those distinctions.

The D.C. Circuit agreed. It vacated the final rule as applied to gathering lines, faulting PHMSA for failing to follow the process required of it under the APA and the Pipeline Safety Act. As the D.C. Circuit concluded, “‘the Government should turn square corners in dealing with the people.” Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 1909 (2020). The PHMSA did not turn square corners here. It cut corners to the prejudice of the petitioners, the administrative process, and thus the public.”

Keith Coyle and Christina Manfredi McKinley of Babst Calland represented the petitioners in this challenge. The case is No.22-1148.

Click here, to view the article online in the June issue of Go-WV News.

Sackett decision shrinks federal regulation of wetlands

GO-WV

(By Lisa Bruderly)

On May 25, 2023, the U.S. Supreme Court issued a highly-anticipated decision that significantly narrows the extent of wetlands within the definition of “waters of the United States” (WOTUS), and, therefore, within the jurisdiction of the federal Clean Water Act (CWA). Under the majority opinion in Sackett v. EPA, the Court held that “waters” are limited to “only those relatively permanent standing or continuously flowing bodies of water” that are described as “streams, oceans, rivers, and lakes” and to “adjacent” wetlands that are “indistinguishable” from those bodies of water. Therefore, a wetland is only a WOTUS (and subject to CWA jurisdiction) if: (1) the adjacent body of water is a WOTUS (i.e., “a relatively permanent body of water connected to a traditional interstate navigable water”); and (2) the wetland has a “continuous surface connection” with that water “making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” As Justice Samuel Alito stated: Federally regulated wetlands “must be indistinguishably part of a body of water that itself constitutes ‘waters’ under the CWA. . . . Wetlands that are separate from traditional navigable waters cannot be considered part of those waters, even if they are located nearby.”

The Sackett litigation involves Michael and Chantell Sackett, who have been unable to build a house because the U.S. Environmental Protection Agency (USEPA) and the U. S. Army Corps of Engineers (the Corps) determined that a wetland on their Idaho property was a WOTUS, requiring CWA Section 404 permitting. Both the U.S. District Court for the District of Idaho and the Ninth Circuit sided with the Agencies’ WOTUS determination, citing the “significant nexus” test introduced by Justice Anthony Kennedy in his concurring opinion in the U.S. Supreme Court’s seminal Rapanos v. U.S. decision. Under the “significant nexus” test, a wetland is broadly considered to be a WOTUS if it, alone or in combination with similarly situated lands in the region, significantly affects the chemical, physical and biological integrity of navigable waters.

On appeal, the U.S. Supreme Court agreed to examine whether the Ninth Circuit set forth the proper test to determine whether the Sacketts’ wetlands are WOTUS. The Court disagreed with the Ninth Circuit and, instead, upheld the plurality opinion of Rapanos (drafted by Justice Antonin Scalia), which stated that WOTUS should be limited to relatively permanent bodies of water connected to traditional interstate navigable waters and wetlands with a close physical connection to those waters, such that they are indistinguishable from those waters.

The Court’s majority opinion in Sackett was written by Justice Samuel Alito, with concurring opinions written by Justices Thomas, Kavanaugh and Kagan. The Justices unanimously agreed that the wetlands on the Sacketts’ property were not WOTUS and that the “significant nexus” test should not be used to determine federally regulated wetlands. Justice Clarence Thomas’ concurring opinion focused on the meaning of “navigable,” and appeared to advocate for an even more narrowed scope of federal regulation. The two other concurring opinions disagreed with the majority regarding the meaning of “adjacent” and asserted that adjacent wetlands should also include wetlands that are “close to, neighboring or not widely separated” from the covered water. Justice Brett Kavanaugh stated that adjacent wetlands mean “more than adjoining wetlands and also includes wetlands separated from covered waters by man-made dikes or barriers, natural river berms, beach dunes or the like.”

The Sackett ruling has immediate, practical consequences. With the elimination of the “significant nexus” test, the extent of wetlands considered to be WOTUS will markedly decrease, thereby decreasing the need for Corps permitting for land development, pipeline construction and other earth disturbance activities. In addition, the Court’s ruling will likely provide more certainty to the regulated community, as to which wetlands are regulated. Generally speaking, a “continuous surface connection” (or the lack of one) is easier to identify than a “nexus” that was often subjectively determined. However, as acknowledged by the majority, “temporary interruptions in surface connection may sometimes occur because of phenomena like low tides and dry spells.” The Court also seemingly acknowledged and addressed a potential “loophole” for federal regulation by noting that “a landowner cannot carve out wetlands from federal jurisdiction by illegally constructing a barrier on wetlands otherwise covered the CWA.”

Even though Sackett pertains directly to wetlands, it also calls into question the tests used for determining whether “waters” are WOTUS. By rejecting the “significant nexus” test, the Court has effectively weighed in on the appropriate (and more narrow) test for determining whether streams and other waterbodies are federally regulated (i.e., whether the waterbody is relatively permanent).

While Sackett narrowed federal regulation of wetlands, it is important to note that state stream/wetland and earth disturbance laws may still apply to specific projects and development. Typically, states broadly define the waters under their jurisdiction. For example, the West Virginia regulations define “water” to include “any and all water on or beneath the surface of the ground.” In light of the broad-reaching implications of Sackett, states may seize this opportunity to develop and/or strengthen their stream and wetland permitting programs.

Other WOTUS Developments

The Sackett decision comes just two months after the Biden administration’s new definition of WOTUS (2023 Rule) became effective. The 2023 Rule defines WOTUS using both the Justice Scalia test for relatively permanent waters and adjacent wetlands, as well as the Justice Kennedy “significant nexus” test. The Biden administration expressed concern that the “Supreme Court’s disappointing decision” would take the country “backwards” with regard to the protection of water quality. In a statement issued just after the publication of the Sackett decision, President Biden stated: “My team will work with the Department of Justice and relevant agencies to carefully review this decision and use every legal authority we have to protect our Nation’s waters for the people and communities that depend on them.” We will be watching to see how USEPA and the Corps react in light of Sackett.

The 2023 Rule has already faced three judicial challenges in Texas, North Dakota and Kentucky. These challenges have resulted in a nationwide split in the current definition of WOTUS, with 23 states using the 2023 Rule and 27 states relying on the WOTUS definition that was in effect prior to the 2023 Rule (i.e., the 1986 definition as influenced by the U.S. Supreme Court decisions from the 2000s, especially Rapanos). As a result, West Virginia and Pennsylvania, for example, currently rely on different WOTUS definitions to determine federal CWA jurisdiction.

Even without the extensive changes associated with Sackett, this nationwide split creates inconsistencies on how CWA jurisdiction is applied from state to state. A water may be regulated under the CWA based on the effective WOTUS definition in one state, while the same water would not be federally-regulated under the WOTUS definition effective in another state.

One thing is certain, the landscape for determining federally-regulated waters is changing again, and the regulated community must stay abreast of these changes.

Babst Calland will continue to stay up-to-date on the developments related to WOTUS and the Clean Water Act, in general. If you have any questions or would like any additional information, please contact Lisa Bruderly at (412) 394-6495 or lbruderly@babstcalland.com.

Click here, to view the article online in the June issue of Go-WV News.

PHMSA releases proposed rule on pipeline leak detection and repair

GO-WV

(Brianne Kurdock, Jim Curry, Gary Steinbauer, Lee Banse)

On May 5, 2023, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released the pre-publication version of a notice of proposed rulemaking (NPRM) titled “Gas Pipeline Leak Detection and Repair.” PHMSA published the NPRM in response to section 113 of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020 (PIPES Act). Section 113 of the PIPES Act directed PHMSA to promulgate final regulations by December 27, 2021, requiring operators of gas transmission, distribution pipelines, and certain gathering lines to conduct leak detection and repair programs.

PHMSA proposes to amend 49 CFR Parts 191, 192, and 193 to: increase the frequency of leakage survey and patrolling requirements; introduce leakage survey and repair requirements for liquefied natural gas (LNG) facilities; require grading and repairs of leaks; reduce the use of blowdowns and intentional venting; impose design, configuration, and maintenance requirements for relief devices to reduce emissions; expand reporting requirements; and require that Type A, B, and C gathering lines submit geospatial pipeline location data to the National Pipeline Mapping System (NPMS). PHMSA proposes a six-month effective date for this rulemaking.

Comments on the NPRM are due on July 17, 2023.

Scope

Among other notable features of the proposal, the scope of this NPRM extends beyond the Section 113 congressional mandate by including Type C gathering lines, underground natural gas storage facilities, and LNG facilities. The statutory mandate was limited to regulated gathering lines in a Class 2, 3, or 4 location, and new and existing gas transmission and distribution pipelines. The NPRM also includes provisions intended to avoid overlap with existing Environmental Protection Agency (EPA) leak detection and repair (LDAR) regulations at 40 CFR Part 60, Subpart OOOOa, and EPA’s proposed regulations that would be codified at 40 CFR Part 60, Subparts OOOOb and OOOOc. The scope of these anti-overlap provisions is unclear, and the provisions could prove difficult to implement from a practical perspective.

Key aspects of the NPRM include:

Increased Leakage Surveys and Patrols

With the exception of distribution pipelines located within business districts, PHMSA proposes to increase the frequency of leakage surveys and right-of-way patrols for pipeline facilities and introduces these requirements for Type B and C gathering pipelines. PHMSA proposes that transmission operators conduct right-of-way patrols every 45 days with a minimum of 12 patrols each calendar year. The proposal reflects a significant expansion of the current obligations.

PHMSA proposes to expand the leakage survey obligation to all valves, flanges, meters, regulators, tie-ins, and launcher and receiver facilities. Further, the NPRM would restrict leakage surveys that exclusively use human senses to offshore pipelines below the waterline, or, with the prior approval of PHMSA, onshore transmission and gathering lines located outside of high consequence areas or in Class 1 or 2 locations. For all other leakage surveys, an operator must deploy leak detection technologies that meet PHMSA’s proposed detection sensitivity requirements. The proposed frequencies for the leakage surveys vary based on the type and location of the pipeline, valve, flange, tie-in or launcher and receiver facility.

Development of Advanced Leak Detection Programs

PHMSA proposes to require that operators develop a written Advanced Leak Detection Program (ALDP). Operators would need to develop procedures that specify how they intend to perform leakage surveys, as well as pinpoint and investigate leaks. Among other requirements, operators would need to identify the leak detection technology they intend to use in their programs after considering several prescribed factors, and an operator’s ALDP must select a leak detection device that is capable of detecting and pinpointing all leaks that have a sufficient release rate to produce a reading of 5 parts per million when measured from a distance of 5 feet or less from the pipeline or within a wall-to-wall paved area. It is not clear whether this leak detection device sensitivity threshold is practicable or consistent with existing EPA LDAR regulations.

Leak Grade and Repair Requirements

PHMSA proposes stringent leak grade and repair regulations that would require operators to classify and repair all detected leaks on their pipeline systems. Operators would need to determine whether detected leaks qualify as grade 1 (most severe), grade 2, or grade 3 (least severe) based on pre-defined narrative criteria or specified percentages of the lower explosive limit (LEL). For a grade 1 leak, an operator would be required to take immediate and continuous action to repair the leak upon detection. A grade 2 leak would need to be repaired within 6 months of detection, but an operator must also re-evaluate the leak every 30 days until the repair is complete. In addition, an operator would be required to develop procedures to prioritize grade 2 leak repairs, and a grade 2 leak located on a transmission line or Type A gathering line in an HCA, or a Class 3 or 4 location would require repair within 30 days. A grade 3 leak would need to be repaired within 24 months of detection, and re-evaluated every 6 months until the repair is complete, unless the operator replaces the pipeline segment containing the leak within 5 years of detection. The proposal would establish post-repair inspection and leak repair verification requirements, provide for the downgrading and upgrading of leak classifications, and allow an operator to request that PHMSA extend the regulatory deadlines for completing for repairs. We note that PHMSA’s proposed leak grading scheme is not an approach adopted by EPA in its LDAR regulations, which generally include a concentration-based leak definition above which a repair is required.

Exceptions for Compressor Stations

PHMSA would not apply the proposed leakage survey, patrolling, ALDP, leak grade and repair, and personnel qualification requirements to compressor stations on gas transmission or gathering lines if the compressor station is already subject to the EPA’s LDAR standards. More specifically, compressor stations would be exempt from these proposed PHMSA requirements if they are subject to EPA’s methane detection monitoring and repair requirements under 40 CFR Part 60, Subparts OOOOa or OOOOb, or relevant standards in an EPA-approved State Plan or Federal Plan that is at least as stringent as EPA’s proposed requirements at 40 CFR Part 60, Subpart OOOOc. The EPA “requirements” PHMSA references as being in place under 40 CFR Part 60, Subparts OOOOb and OOOOc are the subject of a proposed rulemaking by EPA, and they have not been promulgated in final form. Furthermore, EPA’s proposed greenhouse gas emission guidelines under 40 CFR Part 60, Subpart OOOOc, if finalized, would generally apply to compressor stations constructed prior to November 15, 2021, but these emission guidelines would be implemented directly by states after what could be a lengthy EPA review and approval process.

Reporting

PHMSA is proposing to amend Part 191 to require operators to report estimated emissions attributed to leaks, other estimated emissions from stationary sources, and the number and grade of leaks an operator detects and repairs.

PHMSA is also introducing a new large-volume gas release report that would require an operator to report within 30 days an unintentional or intentional release of 1 million cubic feet or more from a gas pipeline facility.

The NPRM would also require operators to submit data about offshore gas gathering lines, and Type A, Type B, and Type C gas gathering lines to the National Pipeline Mapping System. This provision exceeds the existing statutory mandate for NPMS.

Mitigating Emissions from Venting

To limit methane emissions caused by venting events such as blowdowns and tank boil-off, the NPRM would require operators of gas transmission, Type A gathering, regulated offshore pipelines, and LNG facilities to choose from a list of emission reduction methodologies, such as routing gas to a flare stack or reducing the operating pressure of a line prior to venting. Operators would be required to document the methodologies they choose and describe how the chosen methodologies reduce emissions.

Design, Configuration, and Maintenance of Pressure Relief Devices

The NPRM would require a documented engineering analysis to demonstrate that new, replaced, relocated, or otherwise changed pressure relief and limiting devices on Part 192-regulated pipelines have been designed and configured to minimize unnecessary releases of gas. Operators must also develop operations and maintenance procedures to assess pressure relief devices as well as procedures to provide for the repair or replacement of the devices, if necessary.

Qualifications

The NPRM would require personnel that conduct leakage surveys, leak grading, and leak investigations on certain facilities to be operator qualified under Part 192, subpart N.

LNG Facilities

PHMSA proposes to require operators to conduct quarterly leakage surveys of equipment or components at LNG facilities that contain methane or LNG. The surveys would require use of leak detection equipment capable of detecting a methane leak that produces a reading of at least 5 parts per million when located within 5 feet of the equipment being surveyed.

PHMSA would require LNG facility operators to develop procedures to eliminate leaks and minimize releases of gas, conduct leak surveys and address any methane leaks according to their maintenance procedures or abnormal operating procedures.

PHMSA also proposes that LNG operators adopt blowdown and boiloff emission reduction methodologies from a PHMSA-proposed list. PHMSA’s list includes use of a flare or isolation of smaller piping segments, but also would allow operators to propose their own “alternative method,” if the operator can demonstrate it would reduce emissions by 50% as compared to taking no emission mitigation measures.

Underground Natural Gas Storage Facilities

The NPRM proposes to amend Sec. 192.12(c) to require operator procedural manuals to include procedures for eliminating leaks and minimizing releases of gas from storage facilities.

For a more detailed assessment of how this NPRM could affect specific asset profiles, please contact Brianne Kurdock at bkurdock@babstcalland.com, Jim Curry at jcurry@babstcalland.com, Gary Steinbauer at gsteinbauer@babstcalland.com or Lee Banse at lbanse@babstcalland.com.

Click here, to view the article online in the June issue of Go-WV News.

Sackett Decision Shrinks Federal Regulation of Wetlands

Environmental Alert

(by Lisa Bruderly)

The Sackett litigation involves Michael and Chantell Sackett, who have been unable to build a house because the U.S. Environmental Protection Agency (USEPA) and the U.S. Army Corps of Engineers (the Corps) determined that a wetland on their Idaho property was a WOTUS, requiring CWA Section 404 permitting. Both the U.S. District Court for the District of Idaho and the Ninth Circuit sided with the Agencies’ WOTUS determination, citing the “significant nexus” test introduced by Justice Anthony Kennedy in his concurring opinion in the U.S. Supreme Court’s seminal Rapanos v. U.S. decision. Under the “significant nexus” test, a wetland is broadly considered to be a WOTUS if it, alone or in combination with similarly situated lands in the region, significantly affects the chemical, physical and biological integrity of navigable waters.

The Court’s majority opinion in Sackett was written by Justice Samuel Alito, with concurring opinions written by Justices Thomas Kavanaugh and Kagan. The Justices unanimously agreed that the wetlands on the Sacketts’ property were not WOTUS and that the “significant nexus” test should not be used to determine federally regulated wetlands. Justice Clarence Thomas’ concurring opinion focused on the meaning of “navigable,” and appeared to advocate for an even more narrowed scope of federal regulation. The two other concurring opinions disagreed with the majority regarding the meaning of “adjacent” and asserted that adjacent wetlands should also include wetlands that are “close to, neighboring or not widely separated” from the covered water. Justice Brett Kavanaugh stated that adjacent wetlands mean “more than adjoining wetlands and also includes wetlands separated from covered waters by man-made dikes or barriers, natural river berms, beach dunes or the like.”

While Sackett narrowed federal regulation of wetlands, it is important to note that state stream/wetland and earth disturbance laws may still apply to specific projects and development. Typically, states broadly define the waters under their jurisdiction. In light of the broad-reaching implications of Sackett, states may seize this opportunity to develop and/or strengthen their stream and wetland permitting programs.

Other WOTUS Developments

The Sackett decision comes just two months after the Biden administration’s new definition of WOTUS (2023 Rule) became effective. The 2023 Rule defines WOTUS using both the Justice Scalia test for relatively permanent waters and adjacent wetlands, as well as the Justice Kennedy “significant nexus” test. The Biden administration expressed concern that the “Supreme Court’s disappointing decision” would take the country “backwards” with regard to the protection of water quality. In a statement issued just after the publication of the Sackett decision, President Joe Biden stated: “My team will work with the Department of Justice and relevant agencies to carefully review this decision and use every legal authority we have to protect our Nation’s waters for the people and communities that depend on them.” We will be watching to see how USEPA and the Corps react in light of Sackett.

One thing is certain, the landscape for determining federally-regulated waters is changing again, and the regulated community must stay abreast of these changes.

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“Forever chemicals” a PFAS regulatory update with Jean Mosites

Pittsburgh Business Times

We all use them: consumer electronics, textiles, paper packaging, nonstick cookware, chrome plating, paints, varnishes, and stain repellents for carpeting and upholstery. However, such products – and the manufacturing processes used to make them – have incorporated per- and polyfluoroalkyl substances, or PFAS, manufactured chemicals that have been associated with various health and environmental impacts.

Not surprisingly, the U.S. Environmental Protection Agency (USEPA) and many state regulatory agencies are actively pursuing restrictive regulations to significantly reduce the most common PFAS compounds that may be present in water, air, soil, and many products, in an effort to mitigate any health-related risks that may come with them.

According to Jean Mosites, a shareholder with Pittsburgh law firm Babst Calland and a co-chair of the firm’s environmental practice group, businesses and industries are facing regulatory uncertainty, high costs of mitigation, and the potential for class-action litigation amidst increasing public awareness.

Mosites spoke on the uncertainties facing business and industry as federal and state governments try to address the issues of PFAS from a variety of angles.

“They’re not consistent at this point,” she said of the regulatory agencies’ efforts. “They’ve really been gathering their data and analysis needed to develop regulation for the past 10 years, and this process started with trying to figure out where these chemicals exist. As they realized [the PFAS] are in drinking water – something that we’re all exposed to – they’re trying to figure out what the problem is and what the health impacts are,” said Mosites.

Mosites doesn’t argue with the premise behind the ramped-up regulatory efforts to reduce PFAS.

“They are known as ‘forever chemicals’ because they are really persistent; they don’t degrade,” she said. “So, when they get into the environment, they stay there.” It is the breadth and cost, however, that presents practical limits to implementation of a multi-faceted regulatory approach with more stringent standards for PFAS than many known hazardous substances.

The EPA’s proposed clean water standards

Among the prominent recent government regulatory developments has been the USEPA’s March 2023 proposal of a first-ever national drinking water standard called the “National Primary Drinking Water Regulation.” The USEPA is accepting public comments until May 30. The federal agency, according to the USEPA’s website, anticipates passage of the proposed regulation applicable to public drinking water systems by the end of 2023.

A complex government action plan

Wrapped up in those and other new standards, though, are a complexity of issues for business and industry, Mosites explained.

“The Biden administration and previous [administrations] through the USEPA had developed an action plan that involves looking at PFAS from a variety of perspectives,” she said. “So, they’re looking at drinking water, discharges, and standards for cleanup.”

“If you have a Superfund cleanup that has PFAS, what do you do with the PFAS? Where do you send it? How do you dispose of it?” Mosites continued. “In recent years, USEPA had identified 180 Superfund sites with PFAS. And so that’s another aspect of it. It’s not just the drinking water, but it’s the cleanup sites as well.”

Mosites suggested that PFOA and PFOS – “two of the most-studied PFAS – are the two that are driving the regulations at this point, and there is a lot more to be learned.”

How companies are responding

Companies across all industries are trying to understand and anticipate “the regulations and their impacts,” Mosites said. “So, if they have wastewater discharges, they can anticipate permit changes that will impose new obligations. If they have cleanups, they will be looking at new standards for the cleanups with respect to PFAS.”

How Babst Calland is helping

Mosites and others at the firm have been working with a number of clients to consider a variety of ramifications from state and federal regulations and navigate solutions across the spectrum of issues, according to Mosites.

“We do track the regulations from a variety of levels because the states are acting differently and sometimes in advance of the federal government,” she said. “So, we need to keep track of those different levels. We provide advice on sampling strategies, permit modifications, and requests for information because the government can ask for a lot of information from companies to which they’re required to respond under a number of statutory obligations.”

In the end, she said, this evolving area of the law and the science is about risk management for those businesses and industries whose products and manufacturing processes create or use PFAS, as well as transactional and operational considerations for property owners and businesses that may simply be PFAS adjacent. Mosites sees the role of Babst Calland as both an educator and strategic partner in helping business and industry navigate such uncertainties, better understand any new rules and regulations, and effectively plan for and manage potential litigation.

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Business Insights is presented by Babst Calland and the Pittsburgh Business Times.

NLRB Restores the Right to Curse the Boss

Legal Intelligencer

(by John McCreary)

Stare decisis is one of the fundamental principles of American jurisprudence. “It protects the interests of those who have taken action in reliance on a past decision.” Dobbs v. Jackson Women’s Health Organization, 597 U.S. ___, slip op. at 39 (2022). “’Precedent is a way of accumulating and passing down the learning of past generations, a font of established wisdom richer than what can be found in any single judge or panel of judges.’” Id. (quoting N. Gorsuch, A Republic, If You Can Keep It at 217 (Forum Books 2019). For the National Labor Relations Board (NLRB), however, stare decisis is often an impediment to desired outcomes, more honored in its breach than in the observance. The disregard for precedent likely results from the fact that the NLRB “is not a court whose jurisdiction over violations of private rights must be exercised. It is an administrative agency whose function is to adjudicate public rights in a manner that will effectuate the purpose of the [National Labor Relations] Act.” Guss v. Utah Labor Relations Board, 353 U.S.1, 13 (1957) (Burton, J. dissenting). The Supreme Court has recognized that administrative adjudication is a “’constant process of trial and error.’” NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266 (1975) (quoting NLRB v. Seven-Up Co.,344 U.S. 344, 349 (1953). Indeed, the Court has observed that the trial and error approach “differentiates perhaps more than anything else the administrative from the judicial process.” Id.

The five members of the NLRB are appointed by the President, subject to Senate confirmation, and serve staggered terms of five years, “excepting that any individual chosen to fill a vacancy shall be appointed only for the unexpired term of the member whom he shall succeed.” 29 U.S.C. §153(a). The General Counsel of the NLRB is also appointed by the President with the advice and consent of the Senate to a 4-year term, and “is independent from the Board and is responsible for the investigation and prosecution of unfair labor practice cases ….” https://www.nlrb.gov/bio/general-counsel; 29 U.S.C. §153(d). Consequently, the members of the Board and the General Counsel change at regular intervals and their respective views of how to effectuate the “purpose of the Act” reflect the policy preferences of the Presidents who appoint them; the Board and the General Counsel change their views of what the labor law should be with some regularity, depending on which constituency – labor or management – holds the majority of the Board or has appointed the General Counsel. The current General Counsel, Jennifer Abruzzo, soon after being confirmed in office issued Memorandum GC 21-04, “Mandatory Submissions to Advice,” in which she identified nearly 60 areas where she intended to try to reverse or modify the existing law, including 11 specifically identified as “Cases Involving Board Doctrinal Shifts.” https://apps.nlrb.gov/link/document.aspx/09031d4583506e0c. General Counsel Abruzzo’s desire to reshape the labor law is different in kind but not in degree from those of her Republican-appointed predecessor. The NLRB and its General Counsel are fundamentally partisan.

The doctrinal contests that result from the partisan nature of the Board are exemplified in the Board’s recent decision in Lion Elastomers, LLC, 372 NLRB No. 83 (May 1, 2023), where the Board overruled a decision from 2020 and reinstituted the rules that the 2020 decision had itself rejected. The cases all involved the frequently difficult issue of when employee activity otherwise protected by Section 7 of the National Labor Relations Act loses that protection because of misconduct. Section 7 of the Act grants employees the “right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities ….” 29 U.S.C. §157. Sections 8(a)(1) and (3) of the Act declare, respectively, that it is an unfair labor practice for an employer to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7” and “by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization ….”

For years before 2020 the Board employed context-specific standards to assess whether employee misconduct vitiated Section 7 rights, thereby permitting the employer to discipline without running afoul of Sections 8(a)(1) and (3):

Where the misconduct was directed at management in the workplace, the test articulated in Atlantic Steel test, 245 NLRB 814, 816 (1979) was used:

The decision as to whether the employer has crossed the line depends on several factors: (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by the employer’s unfair labor practice.

Discipline imposed for picket line misconduct was judged by the Board using the standard established in Clear Pine Moldings, 268 NLRB 1044 (1984), which considered “whether the misconduct is such that, under the circumstances existing, it may reasonably tend to coerce or intimidate employees in the exercise of their rights under the Act [to refrain from striking].” 268 NLRB at 1046 (quoting NLRB v. W.C. McQuaide, Inc., 552 F.2d 519, 528 (3d Cir. 1977)).
When considering the propriety of discipline imposed for the use of profanity and other offensive language among employees, or in social media postings, the Board employed a totality-of-the-circumstances test. g., Desert Springs Hospital Medical Center, 363 NLRB 1824, 1824 n.3 (2016) (use of profanity during conversation about union election with another employee protected); Pier Sixty, LLC, 362 NLRB 505, 506 (2015) (Facebook posting calling supervisor “nasty m—–f—–” and urging “yes vote” in upcoming union election protected because “comments were not so egregious as to exceed the Act’s protection”).

As can be deduced from the descriptions of these tests, they were largely subjective, requiring the Board to assess the severity of the misconduct and weigh it against its potential impact on the exercise of Section 7 rights.

The subjectivity of the context-specific approach was abandoned in the Board’s 2020 decision in General Motors, LLC, 369 NLRB No. 127 (July 21, 2020): “[t]hese setting-specific standards aimed at deciding whether an employee has or has not lost the Act’s protection [ ] have failed to yield predictable, equitable results … We believe that, by using these standards to penalize employers for declining to tolerate abusive and potentially illegal conduct in the workplace, the Board has strayed from its statutory mission.” Slip op. at 1. In place of the context-specific approach, the General Motors Board substituted the “familiar Wright Line standard.” Id. Wright Line, 251 NLRB 1083, enf’d, 662 F.2d 899 (1^st Cir. 1981), cert. denied, 455 U.S. 989 (1982), approved in NLRB v. Transportation Management Corp., 462 U.S. 393 (1983), adopted the test for deciding the legality of “mixed motive” disciplinary action articulated by the Supreme Court in Mt. Healthy School District Board of Education v. Doyle, 429 U.S. 274 (1977):

Under the Mt. Healthy test, the aggrieved employee is afforded protection since he or she is only required initially to show that protected activities played a role in the employer’s decision. Also, the employer is provided with a formal framework within which to establish its asserted legitimate justification.

251 NLRB at 1089. Application of the Mt. Health/Wright Line test involves shifting the burden of proof to the employer once the General Counsel has made out a prima facie case:

[W]e shall henceforth employ the following causation test in all cases alleging violation of Section 8(a)(3) or violations of Section 8(a)(1) turning on employer motivation. First, we shall require that the General Counsel make a prima facie showing sufficient to support the inference that protected conduct was a “motivating factor” in the employer’s decision.

Once this is established, the burden will shift to the employer to demonstrate that the same action would have taken place even in the absence of the protected conduct.

Id. (footnote omitted). Thus, General Motors discarded considerations of context in favor of a more objective examination of motive in all cases involving the exercise of Section 7 rights and employee misconduct. Its rationale for so doing was that “abusive conduct that occurs in the context of Section 7 activity is not analytically separate from the Section 7 activity itself.” General Motors, 369 NLRB No. 127, slip op. at 1. The General Motors Board concluded that “where causation is at issue” Wright Line should apply. Id. at 2.

Less than three years later, after substantial turnover of Board members and appointment of a new General Counsel, the Lion Elastomers Board restored the subjective, context-specific approach to deciding Section 8(a)(1) and 8(a)(3) cases. In its view “[t]here is a fundamental difference … between employee misconduct committed during Section 7 activity and misconduct during ordinary work.” 372 NLRB No. 83, slip op. at 2. The decision rejected General Motors’ focus on employer motive because, it contended, focus on motive ignored the res gestae of the protected activity:

[C]onduct occurring during the course of protected activity must be evaluated as part of that activity – not as if it occurred separately from it and in the ordinary workplace context. [This principle] reflects a policy choice. It ensures that adequate weight is given to the rights guaranteed to employees by Section 7 of the Act by ensuring that those rights can be exercised by employees robustly without fear of punishment for the heated or exuberant expression of advocacy that often accompanies labor disputes, whether they are exercised by participating in contract negotiations, or grievance meetings, or walking a picket line as strikers and confronting employees who cross the line, or in discussing workplace issues with their coworkers.

Id. at 3. Lion Elastomers “overrule[d] General Motors and return[ed] to the Board’s setting-specific standards … As the Board did for decades, with judicial approval, we strike a different balance from the General Motors Board between the Section 7 rights of employees and the legitimate interests of employers.” Id. Or stated more imperiously, “the Board – not employers – referees the exercise of protected activity under the Act.” Id. at 11.

In the end, therefore, context matters again. Words or actions that would otherwise be grounds for discipline may ultimately escape sanction if expressed or undertaken during labor contract negotiations, grievance meetings or any number of other contexts in which employees engage in activity protected by Section 7. General Motors’ attempt to establish a more objective standard for deciding all claims of violations of Section 7 rights has been rejected in favor of the gnostic approach of the Lion Elastomers majority: in the appropriate context, as ultimately determined by the Board, an employer’s uniform application of the rules pertaining to civility in the workplace can be illegal.

John A. McCreary, Jr. is a shareholder in the employment and labor and public sector groups of Pittsburgh law firm Babst Calland. His practice spans the full range of issues encountered in the employment setting, including labor contract negotiation and administration, grievance arbitration, benefit plan issues, disputes over hiring practices, wrongful termination claims, as well as litigation over pension and benefit entitlements. Contact him at 412-394-6695 or jmccreary@babstcalland.com.

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It’s Groundhog Day for Pennsylvania’s Fair Share Act

Legal Intelligencer

(by Casey Alan Coyle and Ed Phillips)

In 1993, Bill Murray starred in the film Groundhog Day, a comedy about a TV weatherman who becomes trapped in a time loop, forcing him to relive Groundhog Day over and over again. The movie became a common reference during the height of the COVID-19 pandemic as people woke up, realized something was amiss, and then went on with a day that repeated the last. Ever since a two-judge Superior Court panel issued its decision in Spencer v. Johnson, 249 A.3d 529 (Pa. Super Ct. 2021), Pennsylvania tort law has been caught in what seems to be a never-ending, “Groundhog Day” scenario regarding the scope of the Fair Share Act, 42 Pa.C.S. §7102.

The Fair Share Act

The doctrine of joint and several liability is a relic of the English common law dating back to the 17th Century. See, e.g., Smithson v. Garth, 3 Lev. 324, 83 Eng. Rep. 711 (1691). Pursuant to the doctrine, when multiple tortfeasors cause an indivisible injury, each tortfeasor is liable for the full extent of the damages regardless of the percentage of liability assessed by the jury. The doctrine therefore allows the plaintiff to satisfy an entire judgment against any of the defendants—even when one defendant was responsible for only a small amount of the harm. That meant that a defendant found liable for 1% of the harm could be forced to pay 100% of the verdict. This anomaly incentivized plaintiffs to sue deep-pocket defendants to bankroll a much larger verdict than a jury might expect them to have to pay.

Until a decade ago, Pennsylvania was only one of eight states that had yet to alter or repeal joint and several liability. That changed on June 28, 2011, when Governor Tom Corbett signed the Fair Share Act into law. The Act provides that, apart from five exceptions, “a defendant’s liability shall be several and not joint.” 42 Pa.C.S. §7102(a.1)(2). In its place, the Act adopted a proportionate liability model that permits a jury to award damages based on a percentage of fault. Id. §7102(a.1)(1). Following its passage, courts consistently held that the Fair Share Act eliminated joint and several liability for multi-defendant cases—including actions for strict liability—unless the defendant was found liable for 60% or more of the total liability apportioned to all parties, or one of the other four statutory exceptions applied. See, e.g., Rost v. Ford Motor Co., 151 A.3d 1032, 1044 at n.7 (Pa. 2016) (“Pennsylvania has now eliminated joint and several liability in most cases through amendment of the Fair Share Act[.]”); see also Roverano v. John Crane, Inc., 226 A.3d 526, 527 (Pa. 2017) (applying the Act in the context of a strict liability asbestos action). In March of 2021, however, the scope of the Fair Share Act was cast into doubt by a two-judge panel decision.

Spencer v. Johnson

In Spencer, a pedestrian was struck by a motorist operating his wife’s company car and severely injured. The pedestrian sued the motorist, the motorist’s wife (who was authorized to use the car by her employer), and the wife’s employer. At trial, the jury found all three defendants were negligent and their negligence were each factual causes of the pedestrian’s harm. The jury allocated liability among the defendants as follows: the motorist (36%); the motorist’s wife (19%); and the wife’s employer (45%). The pedestrian then sought to mold the verdict to make the wife’s employer jointly and severally liable for her negligence—and, in turn, exceed the 60% threshold required to trigger one of the exceptions under the Fair Share Act. The trial court denied the motion.

On appeal, a two-judge Superior Court panel reversed, holding that the trial court erred by failing to grant the pedestrian’s motion. Spencer, 249 A.3d at 536, 551-52. The panel concluded that the jury’s general verdict warranted a finding that the wife’s employer was vicariously liable for her negligence and their combined liability exceeded 60%, and therefore, the theory of joint and several liability applied under the Act. Id. at 557. The panel then provided what it termed an “alternative basis” for its holding—that, even if vicarious liability did not apply, the trial court still erred because the pedestrian was never alleged or found to have contributed to the accident. Id. at 559. According to the two-judge panel, “[f]or the Fair Share Act to apply, the plaintiff’s negligence must be at issue in the case,” i.e., comparative negligence. Id.

The wife, the wife’s employer, and 19 amici timely moved for reargument, contending, among other things, that:

Neither the parties nor the amicus curiae argued that the Fair Share Act only applied in instances of comparative negligence, meaning that the two-judge panel raised the issue sua sponte. That practice is disfavored because it is at odds with the core principles underlying appellate law. See, g., Danville Area Sch. Dist. v. Danville Area Educ. Ass’n, PSEA/NEA, 754 A.2d 1255, 1259 (Pa. 2009);
In setting forth its alternative reasoning, the panel purported to undertake a statutory analysis of the Fair Share Act and determined that the Act applies only “where a plaintiff’s own negligence may have or has contributed to the incident.” Spencer, 249 A.3d at 559. But the panel’s reading of the statute conflicts with the terms of the Act and at least four other Superior Court decisions interpreting the same. Adams v. Rising Sun Med. Ctr., 257 3d 26, 42 (Pa. Super. Ct. 2020); Veneesa, Inc. v. Stevenson, 237 A.3d 491 (Table), at *6 n12 (Pa. Super. Ct. 2020); Roverano v. John Crane, Inc., 177 A.3d 892, 905 (Pa. Super. Ct. 2017) (per curiam), rev’d in part on other grounds, 226 A.3d 526 (Pa. 2020); Fratz v. Gorin, No. 969 EDA 2012, 2013 WL 11266146, at *2 n.3 (Pa. Super. Ct. Apr. 10, 2013); and
The panel asserted that, in enacting the Fair Share Act, “there is no indication the legislature intended to make universal changes to the concept of joint and several liability outside of cases where a plaintiff has been found to be contributorily negligent.” Spencer, 249 A.3d at 559. Yet, the legislative history reflects that, although proponents and opponents of the legislation disagreed on the merits, they all agreed on one thing: that the Fair Share Act abolished joint and several liability except for five classes of cases. House Legislative Journal, Apr. 11, 2011, at 546, 549, 557, 563; Senate Legislative Journal, June 20, 2011, at 691-93; House Legislative Journal, June 27, 2011, at 1553.

Notwithstanding these arguments, the Superior Court denied reargument.

Ensuing Confusion

In the 26 months since the decision was issued, “[t]here has been a lot of confusion . . . as to whether or not defendants are subject to joint and several liability for a judgment, regardless of their proportionate share of liability.” Ace v. Ace, No. 6242 CIVIL 2020, slip op. at 8 (Monroe Cnty. Ct. Com. Pl. 2023). Such confusion stems from the fact that courts and commentators are split as to whether two-judge panel’s “alternative basis” in Spencer constitutes a holding or dicta. In Snyder v. Hunt, No. 81 EDA 2020, 2021 WL 5232425 (Pa. Super. Ct. Nov. 10, 2021), a Superior Court panel referred to Spencer’s reading of the Fair Share Act as a “holding.” Id. at *6. Likewise, in Anderson v. Motorist Mutual Insurance Co., 608 F. Supp. 3d 214 (W.D. Pa. 2022), a federal district court called the two-judge panel’s “alternative basis” an “alternative holding.” Id. at 223.

In contrast, in Ace v. Ace, the trial court found that Spencer’s interpretation of the Fair Share Act constituted dicta, adding: “To say the legislature enacted a statute to address what was perceived as an unfair result to a big-pocket defendant following finding of minimal fault against them for injury caused by multiple defendants only in cases where a plaintiff is also contributorily negligent, seems like an absurd result. It makes more sense that the legislature would have enacted this measure in all cases of multiple defendants, even where the plaintiff has no contributory negligence.” No. 6242 CIVIL 2020, slip op. at 11-12. A number of commentators have expressed a similar view. See, e.g., Curt Schroder, 10-Year Anniversary of Pa.’s Fair Share Act Marred by Continued Attacks, The Legal Intelligencer (Aug. 12, 2021).

To date, however, neither the en banc Pennsylvania Superior Court nor the Pennsylvania Supreme Court have weighed in on the issue post-Spencer. As a result, litigants and practitioners are experiencing déjà vu, as the uncertainty over the scope of the Fair Share Act persists. Will the Pennsylvania Superior Court, sitting en banc, or Pennsylvania Supreme Court break this proverbial time loop like Bill Murray’s character did at the end of the film? Or are litigants and practitioners destined to relive, in perpetuity, the ongoing battle over the reach of the Act? Only time will tell. For now, in non-comparative negligence cases—which are the vast majority of all negligence cases—joint tortfeasors should beware that their liability may be far greater than their fair share.

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

Edward D. Phillips is an associate at Babst, Calland, Clements & Zomnir, P.C and focuses his practice on complex commercial litigation. Contact him at 412-394-6553 or ephillips@babstcalland.com.

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PHMSA Releases Proposed Rulemaking on Gas Pipeline Leak Detection and Repair

Pipeline Safety Alert

(by Brianne Kurdock, Jim Curry, Gary Steinbauer and Lee Banse)

On May 5, 2023, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released the pre-publication version of a notice of proposed rulemaking (NPRM) titled “Gas Pipeline Leak Detection and Repair.” PHMSA published the NPRM in response to section 113 of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020 (PIPES Act). Section 113 of the PIPES Act directed PHMSA to promulgate final regulations by December 27, 2021, requiring operators of gas transmission, distribution pipelines, and certain gathering lines to conduct leak detection and repair programs.

Comments on the NPRM are due on July 17, 2023.

Scope
Among other notable features of the proposal, the scope of this NPRM extends beyond the Section 113 congressional mandate by including Type C gathering lines, underground natural gas storage facilities, and LNG facilities. The statutory mandate was limited to regulated gathering lines in a Class 2, 3, or 4 location, and new and existing gas transmission and distribution pipelines. The NPRM also includes provisions intended to avoid overlap with existing Environmental Protection Agency (EPA) leak detection and repair (LDAR) regulations at 40 CFR Part 60, Subpart OOOOa, and EPA’s proposed regulations that would be codified at 40 CFR Part 60, Subparts OOOOb and OOOOc. The scope of these anti-overlap provisions is unclear, and the provisions could prove difficult to implement from a practical perspective.

Key aspects of the NPRM include:

Increased Leakage Surveys and Patrols
With the exception of distribution pipelines located within business districts, PHMSA proposes to increase the frequency of leakage surveys and right-of-way patrols for pipeline facilities and introduces these requirements for Type B and C gathering pipelines. PHMSA proposes that transmission operators conduct right-of-way patrols every 45 days with a minimum of 12 patrols each calendar year. The proposal reflects a significant expansion of the current obligations.

Development of Advanced Leak Detection Programs
PHMSA proposes to require that operators develop a written Advanced Leak Detection Program (ALDP). Operators would need to develop procedures that specify how they intend to perform leakage surveys, as well as pinpoint and investigate leaks. Among other requirements, operators would need to identify the leak detection technology they intend to use in their programs after considering several prescribed factors, and an operator’s ALDP must select a leak detection device that is capable of detecting and pinpointing all leaks that have a sufficient release rate to produce a reading of 5 parts per million when measured from a distance of 5 feet or less from the pipeline or within a wall-to-wall paved area. It is not clear whether this leak detection device sensitivity threshold is practicable or consistent with existing EPA LDAR regulations.

Leak Grade and Repair Requirements
PHMSA proposes stringent leak grade and repair regulations that would require operators to classify and repair all detected leaks on their pipeline systems. Operators would need to determine whether detected leaks qualify as grade 1 (most severe), grade 2, or grade 3 (least severe) based on pre-defined narrative criteria or specified percentages of the lower explosive limit (LEL). For a grade 1 leak, an operator would be required to take immediate and continuous action to repair the leak upon detection. A grade 2 leak would need to be repaired within 6 months of detection, but an operator must also re-evaluate the leak every 30 days until the repair is complete. In addition, an operator would be required to develop procedures to prioritize grade 2 leak repairs, and a grade 2 leak located on a transmission line or Type A gathering line in an HCA, or a Class 3 or 4 location would require repair within 30 days. A grade 3 leak would need to be repaired within 24 months of detection, and re-evaluated every 6 months until the repair is complete, unless the operator replaces the pipeline segment containing the leak within 5 years of detection. The proposal would establish post-repair inspection and leak repair verification requirements, provide for the downgrading and upgrading of leak classifications, and allow an operator to request that PHMSA extend the regulatory deadlines for completing for repairs. We note that PHMSA’s proposed leak grading scheme is not an approach adopted by EPA in its LDAR regulations, which generally include a concentration-based leak definition above which a repair is required.

Exceptions for Compressor Stations
PHMSA would not apply the proposed leakage survey, patrolling, ALDP, leak grade and repair, and personnel qualification requirements to compressor stations on gas transmission or gathering lines if the compressor station is already subject to the EPA’s LDAR standards. More specifically, compressor stations would be exempt from these proposed PHMSA requirements if they are subject to EPA’s methane detection monitoring and repair requirements under 40 CFR Part 60, Subparts OOOOa or OOOOb, or relevant standards in an EPA-approved State Plan or Federal Plan that is at least as stringent as EPA’s proposed requirements at 40 CFR Part 60, Subpart OOOOc. The EPA “requirements” PHMSA references as being in place under 40 CFR Part 60, Subparts OOOOb and OOOOc are the subject of a proposed rulemaking by EPA, and they have not been promulgated in final form. Furthermore, EPA’s proposed greenhouse gas emission guidelines under 40 CFR Part 60, Subpart OOOOc, if finalized, would generally apply to compressor stations constructed prior to November 15, 2021, but these emission guidelines would be implemented directly by states after what could be a lengthy EPA review and approval process.

Reporting
PHMSA is proposing to amend Part 191 to require operators to report estimated emissions attributed to leaks, other estimated emissions from stationary sources, and the number and grade of leaks an operator detects and repairs.

Mitigating Emissions from Venting
To limit methane emissions caused by venting events such as blowdowns and tank boil-off, the NPRM would require operators of gas transmission, Type A gathering, regulated offshore pipelines, and LNG facilities to choose from a list of emission reduction methodologies, such as routing gas to a flare stack or reducing the operating pressure of a line prior to venting. Operators would be required to document the methodologies they choose and describe how the chosen methodologies reduce emissions.

Design, Configuration, and Maintenance of Pressure Relief Devices
The NPRM would require a documented engineering analysis to demonstrate that new, replaced, relocated, or otherwise changed pressure relief and limiting devices on Part 192-regulated pipelines have been designed and configured to minimize unnecessary releases of gas. Operators must also develop operations and maintenance procedures to assess pressure relief devices as well as procedures to provide for the repair or replacement of the devices, if necessary.

Qualifications
The NPRM would require personnel that conduct leakage surveys, leak grading, and leak investigations on certain facilities to be operator qualified under Part 192, subpart N.

LNG Facilities
PHMSA proposes to require operators to conduct quarterly leakage surveys of equipment or components at LNG facilities that contain methane or LNG. The surveys would require use of leak detection equipment capable of detecting a methane leak that produces a reading of at least 5 parts per million when located within 5 feet of the equipment being surveyed.

Underground Natural Gas Storage Facilities
The NPRM proposes to amend Sec. 192.12(c) to require operator procedural manuals to include procedures for eliminating leaks and minimizing releases of gas from storage facilities.

For a more detailed assessment of how this NPRM could affect specific asset profiles, please contact Brianne Kurdock at bkurdock@babstcalland.com, Jim Curry at jcurry@babstcalland.com, Gary Steinbauer at gsteinbauer@babstcalland.com or Lee Banse at lbanse@babstcalland.com.

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