Articles, Alerts & Perspectives

How established companies can secure game-changing innovations

Supreme Court Extends Potential Clean Water Act Liability to Discharges to Groundwater that Reach Surface Water

Environmental Alert

(by Lisa Bruderly and Kevin Garber)

In yesterday’s landmark decision, the Supreme Court ruled by a 6-3 majority that, in certain circumstances, discharges of pollutants through groundwater to navigable waters could be required to have an NPDES permit under the Clean Water Act (CWA). While the Court remanded the Hawai’i Wildlife Fund v. County of Maui matter to the Ninth Circuit to reconsider the specific issue of injected wastewater that reached the Pacific Ocean through lava tubes, it more broadly provided a new “functional equivalent” test to address whether the CWA requires an NPDES permit when pollutants originating from a point source are conveyed to navigable waters by a nonpoint source, such as groundwater.

Rejecting the Ninth Circuit’s “fairly traceable” test as being too broad, Justice Stephen Breyer, writing for the majority, more narrowly held that an NPDES permit is required “when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge” (emphasis added). The Court’s new test for CWA liability has far-reaching implications, creating potential exposure for agency permitting and enforcement and citizen suit pressure under many scenarios where pollutants may intentionally or unintentionally enter surface water by way of groundwater through Class V injection wells, coal ash ponds, waste impoundments/lagoons, pipeline releases, existing groundwater contamination, spills and releases to ground, leaking underground storage tanks and, even, septic tanks.

New “Test” Creates More Questions Than Clarity

Subjective, conflicting interpretations of the new “functional equivalent” test are inevitable. Focusing primarily on considerations of time and distance, Justice Breyer offered the following two contrasting examples of how the test might be applied: (1) “where a pipe ends a few feet from navigable waters and the pipe emits pollutants that travel those few feet through groundwater (or over the beach), the permitting requirement clearly applies;” and (2) “if a pipe ends 50 miles from navigable waters and the pipe emits pollutants that travel with groundwater, mix with much other material, and end up in navigable waters only many years later, the permitting requirements likely do not apply.”

The Court offered that other factors, including the following, “may prove relevant,” depending on the specific circumstances:

• The nature of the material through which the pollutant travels;
• The extent to which the pollutant is diluted or chemically changed as it travels;
• The amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
• The manner by or area in which the pollutant enters the navigable waters; and
• The degree to which the pollution (at that point) has maintained its specific identity.

The Court also acknowledged that application of this test is not clear, offering that there are “too many potentially relevant factors applicable to factually different cases for this Court now to use more specific language.” Rather, the Court seemingly opened the door for interpretations by the lower courts, encouraging them to “provide guidance through decisions in individual cases,” and, where appropriate, to “mitigate any hardship or injustice when they apply the statute’s penalty provision.”

The Court also looks to USEPA to provide “administrative guidance” through issuance of individual permits and promulgation of general permits. However, there is a tension relying on USEPA given the conflict between the Court’s “functional equivalent” test and USEPA’s April 23, 2019 Interpretive Statement, under which USEPA considers releases of pollutants to groundwater to be categorically excluded from CWA permitting requirements. USEPA plans to provide additional guidance in response to the Court’s opinion.

Dissenting, Justice Samuel Alito captured the frustration and uncertainty likely to be felt by many in the regulated community when he wrote: “If the Court is going to devise its own legal rules, instead of interpreting those enacted by Congress, it might at least adopt rules that can be applied with a modicum of consistency. Here, however, the Court makes up a rule that provides no clear guidance and invites arbitrary and inconsistent application.”

Path Forward for Regulated Entities is Unclear

With similar matters currently before several circuit and district courts, interpretations of the “functional equivalent” test are expected to vary greatly, creating more confusion for entities that could now be subject to CWA liability, even if they are already regulated under a federal and/or state program. For example, in the County of Maui case, the injection wells were approved by USEPA and the Hawaii Department of Health and had been operating since the 1970s. Similarly, yesterday’s ruling creates the potential for claims by states and citizens groups, even when, for example, groundwater remediation projects, with potential surface water connections, are being conducted under a state or federally approved cleanup plan.

The ruling also creates interesting questions as to whether a court could hold an entity liable for not obtaining an NPDES permit when the discharge to surface water through groundwater is caused by an unintentional occurrence, such as a spill. One such case is Kinder Morgan Energy Partners, L.P. v. Upstate Forever. A Petition for Writ of Certiorari from a Fourth Circuit decision in this matter has been pending in the Supreme Court since 2018. The matter involves a pipeline that ruptured and, though promptly repaired with state cooperation, resulted in residual gasoline in the soil and groundwater. The Fourth Circuit upheld a citizens suit action, concluding that the continued seepage of gasoline into surface water constitutes an “ongoing violation” of the CWA, even if the point source is no longer releasing the pollutant.

Babst Calland continues to analyze the practical effects of the new “functional equivalent” test and is able to assist you in evaluating how it may affect your operations and/or plans for development. If you have questions about the Supreme Court ruling or water-related matters in general, please contact Lisa M. Bruderly at (724) 910-1117 or lbruderly@babstcalland.com or Kevin J. Garber at (412) 559-5223 or kgarber@babstcalland.com.

Click here for PDF. 

Governor Releases Guidance for Construction Industry in Pennsylvania

Construction Alert

(by Marc Felezzola, David White and James Miller)

Governor Tom Wolf announced on April 23, 2020 that the construction industry in Pennsylvania may resume in-person operations starting Friday, May 1, 2020 – one week earlier than previously announced.  Governor Wolf also issued “stringent” guidance intended to protect construction workers and the public when construction operations resume.  This guidance “provides universal protocols for all construction activity, as well as specific additionally guidance for residential, commercial and public construction projects.”

Among the requirements:

• All persons present at a work site must wear masks/face coverings unless they are unable for medical or safety reasons and businesses must establish protocols upon discovery that the business has been exposed to a person who is a probable or confirmed case of COVID-19.
• All construction projects must maintain proper social distancing and provide hand washing and sanitizing stations and protocols for high risk transmission areas.
• Businesses must identify a “pandemic safety officer” for each project or work site or, for large scale construction projects, for each contractor at the site.
• Residential construction projects may not permit more than four individuals on the job site at any time, not including individuals who require temporary access to the site and are not directly engaged in the construction activity.
• For non-residential or commercial projects, no more than four people are permitted for spaces of 2,000 square feet or less, with one additional person allowed for each additional 500 square feet of enclosed area over 2,000.
  • Note that enclosed square footage includes “all areas under roof that are under active construction at the time.”
• Commercial construction firms should also “consider strongly” establishing a written safety plan for each work location containing site specific details to be shared with all employees and implemented and enforced by the pandemic safety officer.
• Owners of public construction projects are encouraged to “use best judgment in exercising their authority to conduct critical construction projects” and to “postpone non-essential projects and only proceed with essential projects when they can implement appropriate social distancing and cleaning/disinfecting protocols….”
  • This means contractors performing work on public projects should not resume work until directed to do so by the applicable government unit.
• Local governments may elect to impose more stringent requirements than those contained in the guidance.

Local officials are tasked with ensuring all construction businesses are aware of the guidance and for notifying businesses regarding any complaint of noncompliance that is received.

Questions about whether the guidance applies may be emailed to the Department of Labor and Industry at RA-LIBOIS-BUILDINGS@pa.gov.

Babst Calland’s construction attorneys are available to assist you with addressing or responding to any COVID-19-related impacts under this guidance. For more information, please contact Marc J. Felezzola at 412-773-8705 or mfelezzola@babstcalland.com, David E. White at 412-394-5680 or dwhite@babstcalland.com, or James D. Miller at 412-394-6438 or jmiller@babstcalland.com.

Click here for PDF. 

PHMSA Proposes New Guidance for Farm Taps

Pipeline Safety Alert

(by Keith Coyle and Ashleigh Krick)

On April 20, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a Request for Comments on proposed Frequently Asked Questions (FAQs) for the regulation of farm taps under 49 C.F.R. Parts 191 and 192.  The proposed FAQs come nearly two years after the Agency posted, and then withdrew, an earlier set of farm tap FAQs on its website.  Consistent with the Department of Transportation’s policy on guidance documents, PHMSA is seeking public comment before finalizing the latest version of the farm tap FAQs.  The deadline for submitting comments is June 19, 2020.  Additional information about the regulation of farm taps and the proposed FAQs is provided below.

Why did PHMSA issue the Proposed FAQs?

The regulatory status of farm taps has generated significant controversy in the past decade.  In 2010, PHMSA issued FAQs for the new Distribution Integrity Management Program (DIMP) regulations stating that the DIMP requirements applied to farm taps, even though that issue had not been specifically discussed or addressed during the rulemaking process.  The Agency defended that position in the years that followed, but eventually allowed operators to choose to include farm taps in a DIMP plan or follow the three-year periodic inspection requirement for regulators and overpressure protection equipment.

In January 2018, PHMSA published a set of new FAQs for farm taps on its website.  The FAQs addressed a range of topics, including the new three-year periodic inspection requirements, annual reporting requirements, OPID requirements, regulatory status of existing farm taps and those installed prior to 1960, operator qualification, definitional clarifications, and excess flow valve installation.  After receiving significant adverse feedback, the Agency withdrew the farm tap FAQs for further review and development.  Then, in March 2019, the Agency issued an Announcement of Enforcement Discretion stating that owners and operators could choose whether to address farm taps under the three-year periodic inspection requirements in 49 C.F.R. § 192.740 or under DIMP requirements.

As discussed in more detail below, the Agency’s proposed farm tap FAQs address all the significant developments from the past decade.

What do the Proposed FAQs cover?

The following important topics are covered in the proposed farm tap FAQs:

• What is a farm tap? Citing the Part 192 definition of service line, PHMSA states that a farm tap is a distribution service line if any portion “transports gas from a common source of supply to an individual customer, to two adjacent or adjoining residential or small commercial customers, or to multiple residential or small commercial customers served through a meter header or manifold,” regardless of whether a sale of gas occurs.  However, the Agency also recognizes that a farm tap may be used to refer to other piping applications that do not satisfy the service line definition, including where customer-owned piping connects directly to the first isolation point or the farm tap meets the definition of a transmission line.
• Where does a farm tap begin and end? In an important clarification, PHMSA explains that a farm tap service line “begins at the first point where the downstream service line can be isolated from source piping (e.g. the inlet to a valve or regulator . . .)” and “terminates at the outlet of the customer’s meter or the connection to a customer’s piping, whichever is further downstream.”  Some of the Agency’s other guidance in recent years had suggested that the service line classification begins at the tap on the mainline or source piping in a farm tap configuration.  Note that PHMSA’s clarification indicates that the valve or regulator at the first isolation point is part of the distribution service line, not the source piping.
• What reporting and notification obligations apply to farm tap operators? If a farm tap is a regulated service line, PHMSA states that the operator must obtain an OPID and submit a distribution annual report form, including operators of production and unregulated gathering lines.  PHMSA also explains that only the operator of the service line downstream from the first isolation point is responsible for reporting the service line in its annual reports, and that the most-downstream entity operating the service line is responsible for notifying farm tap customers of their responsibility to maintain customer-owned buried piping under § 192.16(a).
• What are PHMSA’s expectations with respect to testing farm taps under 49 C.F.R. § 192.740? PHMSA states that the three-year inspection requirement in § 192.740 for pressure regulating, limiting, and overpressure protection devices applies to all service lines that directly connect to production, gathering, or transmission lines, and which are not part of a distribution system, regardless of installation date.  The Agency clarifies that the regulation does not require testing regulators for lockup, and that other methods may be used to comply with the regulation.  PHMSA also explains that operators can use any practicable method to test regulators with an internal relief, so long as the method is documented in the operator’s O&M Manual.  The Agency provides examples of practicable methods, such as installing a test port and then a valve downstream from the regulator with an internal relief.
• What design and installation requirements apply to service-line farm taps? Consistent with the non-retroactivity requirement in the Pipeline Safety Act, PHMSA acknowledges that a farm tap installed prior to March 12, 1971, does not need to be redesigned to meet the requirements in § 192.197.  However, the Agency notes that if the regulators are modified or replaced after the effective date in § 192.13(b) then the affected components must meet the requirements of § 192.197.  PHMSA also notes that operators of service-line farm taps must meet the excess flow valve requirements in § 192.381, 192.383, or 192.385, as applicable.
• What are other requirements operators should be aware of? PHMSA states that an operator of a service line must comply with all applicable requirements in Parts 191 and 192.  The Agency notes that production or unregulated gathering operators with regulated service-line farm taps are required to comply with the operator qualification requirements in Subpart N for covered tasks performed on the regulated service line and prepare an O&M Manual with respect to the regulated service line.  PHMSA also notes that states with certified pipeline safety programs may adopt additional safety regulations applicable to farm taps.

What are the implications of PHMSA’s Proposed Farm Tap FAQs?

• The long-running effort by interested stakeholders to clarify the Agency’s farm tap policy continues to produce results. After hearing the industry’s concerns with the 2010 DIMP FAQs, particularly the effect of requiring interstate transmission operators and production and unregulated gathering operators to apply DIMP to farm taps, PHMSA added an exception that allowed operators to comply with the three-year inspection requirements in § 192.740 instead of the DIMP regulations.  The Agency also issued a notice of Enforcement Discretion in response to continued industry concerns that allows operators to manage farm taps under either § 192.740 or DIMP, which remains in effect today.  Finally, the latest version of the proposed farm tap FAQs seeks to accommodate many of the concerns that industry expressed with the prior farm tap FAQs and other recent guidance documents, including with respect to the classification of source or mainline piping and the applicability of certain requirements in the Part 192 regulations.  The industry has the opportunity to further influence these FAQs in the pending comment period.
• Notably, PHMSA is no longer taking the position that the service line starts at the tap on the mainline in a farm tap configuration. Instead, the FAQs state that the service line starts at the first isolation point (the inlet of the valve or regulator) downstream from the source or mainline piping.  That clarification is very important because the Agency’s prior guidance indicated that operators had to treat all piping downstream from the tap as a distribution service line in a farm tap scenario, even if all of the other piping in the system was production, gathering, or transmission.  Treating all piping downstream from the tap as part of a distribution service line would have imposed significant compliance burdens on operators without producing any meaningful benefits.
• PHMSA has never actually analyzed the costs, benefits, or other impacts of applying the gas distribution service line regulations to farm taps. The Agency has never added a definition of a farm tap to Part 192 or instituted a specific rulemaking proceeding to acknowledge the status of farm taps as gas distribution service lines.  Rather, PHMSA adopted that position in letters of interpretation, guidance documents, and through other rulemakings.  Operators have the opportunity to provide cost data to PHMSA through this docket, which would invite the Agency to consider such data before issuing final FAQs.
• PHMSA notes in the Request for Comments that as part of the Agency’s regulatory review process, the Agency is considering changes to the requirements in § 192.740 due to industry comments that PHMSA had underestimated the costs of compliance with the three-year inspection requirements and that existing DIMP requirements, in conjunction with other current requirements such as leak surveys, could provide an equivalent level of safety. PHMSA previously indicated during public meetings that farm taps would be included in the Gas Pipeline Regulatory Reform proposed rule, which is currently under review at the Office of Management and Budget and will likely be published by the Agency in the coming months.

Click here for PDF. 

New WOTUS Definition Published — Challenges Expected

Environmental Alert

(by Lisa Bruderly)

Yesterday, the U. S. Environmental Protection Agency (EPA) and the U. S. Army Corps of Engineers (Corps) fulfilled the Trump administration’s promise to repeal and replace the Obama administration’s Clean Water Rule (CWR) by publishing the final Navigable Waters Protection Rule (NWPR) in the Federal Register (85 Fed. Reg. 22250). The NWPR (yet again) redefines the scope of waters that are regulated under the Clean Water Act (CWA) by revising the definition of “waters of the United States” (WOTUS) in 12 federal regulations (see January 31, 2020 Alert for details and discussion of anticipated effect of the NWPR).

As expected, the NWPR’s WOTUS definition is much narrower and will federally regulate fewer waters than the CWR. The Rule also clarifies the scope of WOTUS in greater detail than the pre-2015 definition, which is currently in effect. The Rule consolidates jurisdictional waters into four categories: (1) territorial seas and navigable-in-fact waters; (2) tributaries; (3) lakes, ponds and impoundments of jurisdictional waters; and (4) adjacent wetlands. It includes 16 definitions and 12 exclusions, as compared to the five definitions and two exclusions in the pre-2015 definition, including, for the first time, definitions to clarify the prior converted cropland and waste treatment system exclusions. The Rule categorically excludes, among other things, ephemeral streams and ditches without perennial or intermittent flow.  In addition, missing from the NWPR is any reference to the significant nexus test.

Practical Impact of the NWPR will be State-Specific

The practical impact of the Rule for industry, developers, agriculture and others will vary from state to state. The NWPR’s effect is likely less in states with very inclusive definitions of state-regulated waters (e.g., Pennsylvania) than in states with narrower definitions of the same. For example, in Pennsylvania, state permitting will still be required for proposed impacts to state-regulated streams and wetlands, even though federal permitting may not be required. For states whose definitions of state-regulated waters are the same or less inclusive than the NWPR, the Rule is expected to be a more significant consideration for project permitting and federal spill prevention and response.

Controversy Continues and Challenges are Certain

Effective as of June 22, 2020, the NWPR will almost certainly be challenged in federal district courts by NGOs, certain states and other interested parties on procedural and substantive grounds. These challenges could result in the courts staying the Rule in some, or all, states while the lawsuits are litigated, potentially creating a patchwork where the pre-2015 definition remains in effect in select states or nationwide.

Babst Calland continues to analyze the practical effects of the new definition of WOTUS (see numerous Environmental Alerts at www.babstcalland.com) and is able to assist you in evaluating how the NWPR may affect your operations and/or plans for development. If you have questions about the NWPR or water-related matters in general, please contact
Lisa M. Bruderly at (412) 394-6495 or lbruderly@babstcalland.com.

Click here for PDF.

U.S. Supreme Court Ruling Opens Door to Private Litigation Challenging EPA-Approved Remedy at a Superfund Site

Environmental Alert

(by Alana Fortna)

As addressed previously in an article published by The Legal Intelligencer, one key case to watch before the U.S. Supreme Court is Atlantic Richfield Company v. Christian, Case No. 17-1498.  On Monday, April 20, 2020, the Court issued its Opinion in this case (590 U.S. ___ (2020)), which included two Dissenting Opinions and opened the door for potential private party litigation involving proposed alternative cleanup plans at Superfund sites.  While the likelihood of success on such future litigation may be questionable given the position of the United States as an amicus curia in this case, any litigation potential could still be disruptive to Superfund site cleanups, even if it is ultimately unsuccessful.

The Atlantic Richfield case involves one of the oldest Superfund sites in the country—the Anaconda Copper Smelter Site, which covers an area of approximately 300 square miles.  Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA), Atlantic Richfield has been performing investigation and remedial activities at the Site under the oversight and approval of the United States Environmental Protection Agency (EPA) for the past 35 years.  Landowners in and around the Site sued Atlantic Richfield in Montana state court seeking, among other things, restoration damages under state law to restore their properties to their pre-contamination state.  The landowners pursued an alternative cleanup plan that sought remedial action above and beyond the EPA-approved remedy in both scope and cost.  The Montana Supreme Court agreed that the landowners could pursue their restoration claim against Atlantic Richfield despite statutory arguments to the contrary.  The U.S. Supreme Court granted certiorari to address the following issues: (i) whether CERCLA strips the state court of jurisdiction over the landowners’ state law claim for restoration damages, and (ii) if not, whether CERCLA requires the landowners to seek EPA approval for their proposed remediation plan.  In its Majority Opinion, the Court held that CERCLA does not deprive a state court of jurisdiction to hear a state law claim related to an alternative cleanup plan, but the landowners could only pursue their restoration claims if EPA approved their plan.  The Court issued Dissenting Opinions with respect to the Majority’s holdings on both issues before the Court.

With respect to the jurisdictional question, the Court in its Majority Opinion based its holding on statutory interpretation of CERCLA Section 113.  While the Court agreed that federal district courts have sole jurisdiction over claims brought under CERCLA, the Court denied the assertion that CERCLA displaces state court jurisdiction over claims under state law.  The Court reviewed the language of CERCLA Section 113(b) that references controversies “arising under” CERCLA and determined the landowners’ claims did not “arise under” CERCLA even though they clearly implicated the CERCLA remedy for the Site.  Atlantic Richfield argued that the Court must also look to CERCLA Section 113(h), which precludes jurisdiction in federal district courts over actions to review or challenge a selected remedial action.  The Court denied application of CERCLA Section 113(h) to the claims at issue finding that the two subsections work independently of one another and only overlap as to one circumstance: challenges in federal court that arise under CERCLA.  The Court, therefore, affirmed the Montana Supreme Court’s ruling regarding a state court’s ability to hear the restoration claims.

With respect to the second issue on appeal, the Court found that the Montana Supreme Court erred when it held that the landowners were not potentially responsible parties (PRPs) under CERCLA and, thus, did not need EPA approval for a remedial action.  CERCLA Section 122(e)(6) provides that once a PRP has initiated a remedial investigation and feasibility study at a facility under CERCLA, no other PRPs may undertake a remedial action at a facility unless authorized by EPA.  The landowners disputed their PRP status and argued that the restriction of CERCLA Section 122(e)(6) did not apply to them.  The Court rejected the landowners’ argument relying on the plain language of CERCLA and prior precedent holding that the four categories of “covered persons” under CERCLA Section 107(a) are PRPs with respect to response costs incurred at a facility.  In so holding, the Court in its Majority Opinion rejected several arguments raised by the landowners and Justice Neil Gorsuch’s Dissenting Opinion.  For example, both argued that the landowners are no longer PRPs because the six-year statute of limitation for a cost recovery claim had run.  The Court rejected this argument as conflating liability status with payment status, noting that even those who may qualify as “innocent landowners” under CERCLA still qualify as a PRP under CERCLA Section 107(a) as the current property owner.  The landowners also argued that the Court’s interpretation would place a permanent hindrance on their land preventing them from engaging in activities as simple as digging in their backyard to place a sandbox for their grandchildren.  The Court quickly rejected their plight, noting that CERCLA Section 122(e)(6) speaks only to “remedial actions,” which is a defined term under the statute that has import.  Additionally, both the landowners and Justice Gorsuch argued that the landowners are not PRPs because they did not receive a notice of settlement negotiations under CERCLA Section 122(e)(1).  However, EPA has a long-standing policy based on its enforcement discretion under CERCLA that it does not seek to recover response costs from landowners who are not responsible for the contamination and do not seek to interfere with the remedial action.  The Court found that the absence of a notice letter from EPA does not somehow modify status as a PRP under the plain language of CERCLA.  Arguments based on the “savings clause” and the “contiguous property owner” defense under CERCLA were also rejected by the Court.

Given long-standing EPA guidance and the plain language and understanding of CERCLA Sections 107(a) and 122(e), the Opinion is somewhat surprising to those involved in Superfund cleanups and related litigation.  While the Opinion is arguably a “win” for Atlantic Richfield, it opens the door to similar lawsuits in states where impacted landowners can find a state law hook to bring a claim challenging a selected remedial action at a site.  However, the long-term success of such legal challenges may be limited since the ability to pursue an alternative remedy is wholly dependent on the EPA’s blessing, which many challengers may not obtain.  The real practical implications come from the potential disruptions that such a lawsuit may cause from an added transactional cost standpoint and the ability to cause further delays, complications and uncertainty to the remedial process.

Babst Calland’s environmental attorneys are closely monitoring the Atlantic Richfield case and its implications on Superfund sites and litigation.  For more information, please contact Alana E. Fortna at 412-773-8702 or afortna@babstcalland.com.

Click here for PDF.

Update: Paycheck Protection Program (as of April 22, 2020)

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

On April 3, 2020, lenders began accepting and issuing Paycheck Protection Program loans (PPP Loans) to qualifying small businesses. In less than two weeks, the approximately $350 billion appropriated to the PPP Loans were fully depleted. Over the past two weeks, we have received questions related to the application process, appropriate use of loan proceeds during the covered period, calculating the level of loan forgiveness, and the possibility of further funding.

We understand that no two businesses are the same and that’s why we are uniquely tailoring our approach to acquisition and utilization of the PPP Loans to suit your needs. If your business received a PPP Loan, we are prepared to provide counsel to your business on how loan proceeds may be allocated.

Yesterday, the U.S. Senate passed a major enhancement to the PPP Loan program. While action by the U.S. House of Representatives is not expected until Thursday, we fully expect $310 billion additional dollars to be added to the PPP Loan program. Therefore, it is important for qualifying businesses that missed out on the first round of funding to be prepared to act quickly. The first step is ensuring your application is properly completed and submitted to an SBA-approved lender. The application can be found here and SBA-approved lenders can be found here. We have counseled dozens of clients on the application process and we are happy to assist your business as well.

If you have questions about the application and/or utilization of PPP Loans, please contact us and we will help guide you through the process. For general information on PPP Loans, check out SBA’s FAQ here.

Click here for PDF. 

Governor Amends COVID-19 Order to Recommence Limited Construction Activities in Pennsylvania

Construction Alert

(by David White, James Miller and Marc Felezzola)

As part of a three phase plan for Pennsylvania overcoming the COVID-19 Pandemic, Governor Tom Wolf announced on Monday, April 20, 2020 that limited construction activities may recommence on May 8, 2020 for non-exempt projects in Pennsylvania.  Although the full details regarding the plan have not yet been released, it is clear that all construction work must comply with the Governor’s and Secretary of Health’s April 20, 2020 amendments to their business closure orders and must be in strict compliance with the administration’s guidance referenced in those amendments, all of which are available below:

• Governor Wolf’s April 20 Business Amendment
• Health Secretary’s April 20 Business Amendment
• Health Secretary’s Health Safety Measures for In-person Operations
• Life Sustaining Business FAQ
• PA Industry Operation Guidance (Matrix)

While the details regarding the limited recommencement of construction activities have not yet been released, it is believed the Governor will issue the following guidelines:

• For residential construction, only four workers will be allowed to be on the jobsite at one time.

• For commercial construction, four workers will be allowed on a jobsite at one time for projects of 2,000 square feet or less; and for every 500 square feet, an additional worker may be added. This would apply to all construction, even the current healthcare and waiver approved projects. For example: a 5,000 square foot construction project will be allowed ten workers on site (4 workers for 2,000 SF and an additional 6 workers when considering the 3,000 SF).

The above potential guidelines are subject to change before May 8, 2020; we will provide another update once we have more information on the final guidelines.

Babst Calland’s construction attorneys are closely monitoring these developments and providing input to our clients. For more information, please contact David E. White at 412-394-5680 or dwhite@babstcalland.com, James D. Miller at 412-394-6438 or jmiller@babstcalland.com, or Marc J. Felezzola at 412-773-8705 or mfelezzola@babstcalland.com.

Click here for PDF.

Pennsylvania Enacts Act 15 of 2020 to Address Local Government Issues During the Pandemic

Client Alert

(by Blaine Lucas, Stephen Korbel and Max Junker)

Modifies Public Meeting Rules, Suspends Land Use Application Processing Deadlines on a Limited Basis, Authorizes Taxing Bodies to Postpone the Property Tax Discount Date and Waive Late Fees and Penalties, and Authorizes the Remote Use of Notaries.

On April 20, in response to the COVID-19 pandemic, Pennsylvania Governor Tom Wolf signed Act 15 of 2020. Act 15 was unanimously approved by the Commonwealth’s Senate and House of Representatives, and takes effect immediately. As part of broader legislation regarding healthcare cost containment, Act 15 addresses a number of critical issues for Pennsylvania local governments, most notably how to conduct business in compliance with applicable statutory requirements when the physical presence of their officials, constituents, development applicants and other interested parties is either highly discouraged by public health officials or prohibited altogether. This can be particularly problematic for applicants for a variety of local government land use approvals, consideration and action on which usually are statutorily mandated to take place at public meetings and hearings.

Among other things, Act 15:

• Eliminates the requirements for physical attendance at public meetings during the Governor’s declaration of a disaster emergency by permitting the use of “authorized telecommunications devices.”
• Provides for the limited suspension, or “tolling,” of statutory deadlines for municipal boards and agencies to hear and act upon a wide variety of land use and other development applications.
• Authorizes taxing districts to extend the deadline for payment of property taxes at a discount and to waive fees and penalties for late payments.
• Authorizes the remote use of notaries via communications technologies.

Use of Telecommunications Devices to Conduct Public Meetings

Until the expiration or termination of the COVID-19 disaster emergency, an agency, department, authority, board, council, governing body or other political subdivision included in the declaration may conduct hearings, meetings, proceedings or other business through the use of an “authorized telecommunications device”, defined as “any device, which permits, at a minimum, audio communication between individuals.” Act 15 also dispenses with provisions in certain municipal codes, such as the Borough Code, requiring the physical presence at a meeting location of a quorum of the participating members, as long as a quorum is otherwise established through the authorized telecommunications device.

To the extent practical, the local government entity shall post advance notice of each meeting conducted through an authorized telecommunications device (1) on the entity’s publicly accessible website, if any, or (2) in an advertisement of general circulation, or (3) both. The public notice shall include the date, time, technology to be used, and public participation information.  To the extent practical, the entity shall allow for public participation through an authorized telecommunications device or written comments, which may be submitted to the entity’s physical address through the United States mail or to an email account designated by the entity to receive the comments.

A local entity shall not consider any application, plat, plan, submission, appeal or curative amendment unrelated to the Governor’s COVID-19 declaration, unless notice to the public and interested parties has been provided at least five days prior to the meeting via (1) a post on the entity’s publicly accessible website, if any, or (2) a newspaper of general circulation, or (3) both.  This requirement is not limited to meetings conducted through authorized telecommunications devices, and as a result may impose advance public notice requirements on certain actions that did not previously exist.  For example, the Municipalities Planning Code does not mandate that a local governing body provide advance public notice of subdivision and land development applications.

Finally, in the event a local entity calls a meeting under exigent circumstances, without advance notice to the public, to address any issue related to the Governor’s COVID-19 declaration, minutes of that meeting “shall be posted” within 20 days after the meeting or before the next regularly scheduled meeting, whichever is earlier. However, this section of Act 15 does not specify the manner of posting.

Extensions for Existing and Pending Approvals

Act 15 also provides for the limited suspension, or tolling, of the statutory time limits for review, hearing and decision on the “approval” of an application, plat, submission, appeal or curative amendment.  An approval is defined by cross-reference to the definition of that term in Section 2 of the 2013 Development Permit Extension Act, which covers local government approvals pursuant to over 30 statutes, including the Municipalities Planning Code, the Flood Plain Management Act, the Stormwater Management Act, the Pennsylvania Construction Code, and the various city, borough and township codes.

Specifically, as to any such application for approval received or pending as of the Governor’s COVID-19 declaration on March 6, 2020, the number of days provided to satisfy statutory time limits in review, hearing, and decision shall be suspended and tolled as of the date of that declaration, or as of the date received if received during the pendency of the declaration, and shall resume 30 days after the effective date of Act 15.  Since the effective date of Act 15 was April 20, 2020, tolling would cease on May 20, 2020.   Thus, for applications filed on or before the date of the Governor’s COVID-19 declaration, the total length of the tolling period would be 75 days.  The length of the tolling period would decrease for later filed applications, until there would be no tolling for an application filed on or after May 20.

The local entity must notify the applicant of the declaration, the time extension, and of the right to request any meetings, hearings, or proceedings be conducted using telecommunications devices. The failure to receive the notice does not affect the tolling of the number of days.  Within 30 days of the effective date of the Act, an applicant may request that a meeting, hearing or proceeding be held in accordance with Act 15 during the period of the COVID-19 declaration.  The local entity shall have discretion to proceed with the request under Act 15.  If a proceeding is authorized, the applicant and each party receiving actual notice of the proceeding shall be deemed to waive any challenge under the Sunshine Act or other provision of law that governs the notice, conduct or participation in a meeting or proceeding.

Property Tax Relief

Act 15 authorizes any taxing district, by majority vote of its governing body, to do any of the following with regard to 2020 real property taxes:

• Collect the tax at the discount rate no later August 31, 2020.
• Waive any late payment fee or penalty, if paid in full by December 31, 2020.

Authority for Remote Notarial Acts during the COVID-19 Disaster Emergency

Act 15 provides legislative authorization for the remote conduct of notarial acts.  Under existing law, an individual must personally appear before a notary public in order for notarial acts to be performed.  On March 25, 2020, the Pennsylvania Department of State (“DOS”) issued a notice of “Limited Suspension of In-Person Regulatory Requirements for Notaries for Real Estate Transactions,” which suspended the personal appearance requirements.  A copy of the notice may be found at https://www.dos.pa.gov/Documents/2020-03-25-Notaries-Inperson-limited-suspension.pdf.  However, until the passage of Act 15 there was no legal authority for remote online notarization without physical presence before the notary.

Under Act 15, a notary, subject to certain conditions, may conduct notarial acts remotely by the use of approved communication technology, until 60 days after the termination or expiration of the Governor’s Coronavirus declaration.  If a notary wishes to be able to perform remote notarizations, he or she must notify the DOS 30 days in advance that he or she will be performing notarial acts facilitated by communication technology, and identify the technology to be used.  The current “ENotary Application” may be found at https://www.notaries.pa.gov/Pages/NotaryChangeApplication.aspx?AppType=3; however this application may be altered following the passage of Act 15.

Additional details of the remote notary portions of Act 15 will be detailed in a future Client Alert.

For additional information, please contact Blaine A. Lucas at blucas@babstcalland.com or 412-394-5657, Stephen L. Korbel at skorbel@babstcalland.com or 412-394-5627, or Robert Max Junker at rjunker@babstcalland.com or 412-773-8722.

Click here for PDF.

Update: U.S. DOT Agencies Extend Further COVID-19 HazMat Relief

Transportation Safety Alert

(by Boyd Stephenson, Varun Shekhar, Jame Curry)

Babst Calland has updated this alert to capture new shipping paper guidance extended by the Pipeline and Hazardous Materials Safety Administration.

In response to the COVID-19 pandemic, U.S. Department of Transportation (DOT) agencies that regulate the surface transportation of hazardous materials (HazMat) have extended several forms of relief.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) has waived some HazMat training requirements, delayed some equipment recertifications, provided guidance for complying with existing shipping paper rules while practicing safe social distancing, and adopted a temporary enforcement policy for transporting alcohol-based sanitizer.  The Federal Motor Carrier Safety Administration (FMCSA) and the Federal Railroad Administration (FRA) are implementing PHMSA’s waiver in their modes.  FMCSA has also allowed States to extend the effective dates for commercial driver’s licenses (CDL) and commercial learner’s permits (CLP).  Additionally, FRA has activated its emergency docket.  FRA has not extended any hazardous materials-specific relief.

Hazardous Materials Shippers, Carriers, and Package Manufacturers

• Update: On April 10^th, PHMSA issued a notice highlighting existing regulations that allow shipping papers to be transferred between parties while minimizing the risk of spreading COVID-19.  PHMSA reminds regulated parties that no physical contact is required to exchange shipping papers.  PHMSA suggests that shipping papers may transferred either electronically or by placing the physical copy on a table, stepping away while the shipping paper is signed, and then retrieving the signed shipping paper.  The notice also reminds shippers that they may ask another person to sign on their behalf verbally, in writing, or through electronic authorization such as an email or text message.  By following these requirements, individuals transporting HazMat should be able to comply with the regulations without special relief.
• On March 25^th, PHMSA issued an updated policy declining to enforce recurrent training requirements under 49 C.F.R. § 172.704(c)(2) against HazMat employers unable to train employees due to COVID-19.  Employers are still required to provide initial training to a new hazardous materials employee before the employee may perform regulated functions.
• On April 1^st, PHMSA issued two surface transportation-related emergency special permits authorizing the filling and transportation of certain DOT specification cylinders up to 12 months after they are due for a periodic requalification during the COVID-19 emergency.  PHMSA also authorized the transportation of certain cylinders overdue for retesting due to COVID-19 disruptions.

Truck Transportation

• On March 18^th, FMCSA issued an expanded emergency declaration waiving certain provisions of Parts 390 through 399—most notably the hours of service requirements—for drivers providing direct assistance in support of relief efforts.  Direct assistance includes transporting medical supplies, food, paper, and grocery products; precursors for those products; fuel; and equipment for constructing facilities to treat or house COVID-affected individuals.  Direct assistance does not include routine commercial deliveries, including mixed loads with a nominal quantity of emergency relief items.  The waiver doesn’t provid relief from the Hazardous Materials Regulations.
• On April 2^nd, PHMSA provided relief to shippers of alcohol-based sanitizer by issuing a temporary enforcement policy for the highway mode.  The temporary policy provides liberalized minimum requirements for transporting sanitizer products composed of up to 80 percent alcohol in packages up to 119 gallons.  The policy adopts sliding requirements that increase with the size of the package.  Sanitizer product shipments normally exempt from the HazMat Regulations will remain exempt.  Update: On April 10^th, PHMSA extended this relief until July 10^th, and provided further relief, including accepting FDA labels as alternative markings for packages of up to eight gallons, provided they are visible during transportation.  In addition, PHMSA released a presentation outlining what shipments qualify and how best to take advantage of the relief.
• On March 24^th, FMCSA issued a wavier that permitted States to extend the validity of CDLs and CLPs expiring on or after March 1^st.  FMCSA’s waiver confirms that federal highway funds will not be withheld if states decide to extend licenses.  The FMCSA wavier does not require states to extend CDL and CLPs, so each state may adopt its own policies.  This could create a potentially confusing patchwork of different state license extensions that could affect interstate transportation.
• Update: On April 13^th, FMCSA released FAQs for CDL and CLP extensions.
  • So far, states haven’t extended CDLs and CLPs uniformly and some states have extended CDLs beyond June 30, 2020.
  • On April 3, 2020, TSA issued a notice allowing states to extend the validity of a HazMat endorsement (HME) issued on or after March 1st up to 180 days.  An HME is an extra certification issued with a CDL or CLP that allows the driver to transport placarded loads of HazMat.  The Federal Motor Carrier Safety Laws require an HME applicant to pass a TSA background check.  These background checks must be renewed every five years.  Like the CDL and CLP extensions, this relief is permissive and states may not implement it uniformly.

Rail Transportation

• On March 23^rd, FRA activated the Emergency Relief Docket (FRA-2020-0002) retroactive to March 13^th, and placed the emergency relief provisions in 49 C.F.R. § 211.45 into effect.  This allows railroads to submit a petition for emergency waiver of safety rules that FRA determines are directly related to an emergency event.  FRA may grant a petition for waiver without prior public notice and comment if petitioners show that the request is in the public interest, not inconsistent with railroad safety and necessary to address an emergency.  The Association of American Railroads and the American Short Line Regional Railroad Association submitted a joint petition for relief from regulations, including a request to relax timeframes for track inspections and mechanical and pre-departure inspections, but none related to hazardous materials transportation.  FRA granted the petition and it is effective until May 24, 2020.

For more information on the various forms of COVID-19 HazMat relief extended by DOT agencies, contact Boyd A. Stephenson at bstephenson@babstcalland.com or 202.853.3452, Varun Shekhar at vshekhar@babstcalland.com or 202.975.1390, and James Curry at jcurry@babstcalland.com or 202.853.3455.

Click here for PDF.

Regulated Entities Should Consider Benefits and Limitations of EPA’s COVID-19 Policy in Light of Post-Publication Developments

Environmental Alert

(by Lisa Bruderly, Julie Domike and Gary Steinbauer)

U.S. Environmental Protection Agency’s March 26, 2020 temporary COVID-19 enforcement discretion policy establishes the steps regulated parties must take to qualify for enforcement protection for noncompliance caused by COVID-19 (“COVID-19 Policy” or “Policy”).  Our previous Alert outlined the Policy’s scope, eligibility criteria, and expectations.  In less than a month, EPA’s Policy has generated significant controversy, conflicting media reports, congressional inquiries, and now a federal lawsuit.  Critiques of the Policy and EPA’s evolving messaging make clear that entities affected by COVID-19 should be thoughtful and strategic in their reliance on the potential relief provided by the Policy.

EPA’s Response to Backlash

In response to initial criticisms, EPA initiated several steps to explain its stance on environmental compliance and enforcement during the pandemic.  On March 30, 2020, EPA issued a news release to correct “the record on reckless reporting” by certain media outlets and clarify that the Policy applies on a case-by-case basis.  To quell legislative opposition, EPA sent members of Congress a letter on April 2, 2020, defending the Policy.  EPA has also created a Frequently Asked Questions webpage answering several questions on the scope and application of the COVID-19 Policy.

Environmental Groups Sue EPA and State Attorneys General Weigh-In

At the same time, environmental groups and the states have voiced concerns related to the Policy.  On April 1, 2020, a coalition of environmental groups, led by the Natural Resources Defense Council, petitioned EPA to promulgate an emergency rule requiring regulated parties to affirmatively report COVID-19-caused noncompliance and provide information similar to what EPA requires parties to document under the Policy.  On April 16, 2020, the coalition filed a lawsuit in the U.S. District Court for the Southern District of New York, requesting that the court order EPA to respond to the petition immediately and alleging that the Policy deprives the public of compliance-related information and raises environmental justice issues.

States have also entered the fray, vowing to hold regulated parties accountable for COVID-19-caused noncompliance.  In an April 15, 2020 letter, attorneys general from 14 states, including Pennsylvania, urged EPA to rescind the Policy, claiming that the Policy ignores the connection between air pollution and respiratory/cardiovascular conditions with increased risk of serious harm for those who contract COVID-19.  The  letter follows correspondence sent by California’s attorney general to EPA on April 9, 2020.

Thoughtful Consideration and Documentation Are Necessary for Protection under EPA’s Policy

EPA’s post-Policy communications emphasize that EPA continues to enforce federal environmental laws, and regulated entities should remain vigilant in meeting their compliance obligations to the extent reasonably practical.  They also preview EPA’s evolving consideration of enforcement discretion and reinforce the need for regulated entities to develop a sound strategy before relying on the Policy.  The following points should be considered:

• Coverage under the Policy is not guaranteed. EPA will make case-by-case determinations on whether the circumstances of noncompliance meet the criteria of the Policy.  Coverage under Policy also requires that regulated entities notify the appropriate implementing authority of COVID-19-caused noncompliance that may cause an acute risk or imminent threat to human health or the environment, and failures of treatment technology that may cause exceedances of applicable limits or thresholds.  Consequently, regulated entities may be forced to self-disclose potential noncompliance to EPA that it later determines is not covered by the Policy.
• Coverage is not confirmed immediately. EPA did not commit to a time frame for making coverage determinations under the Policy.  The Policy also does not address whether these individualized determinations will be made by EPA Headquarters or its Regional offices.  Regulated entities will not know whether EPA agrees that they qualify for relief under the Policy for an unspecified time, potentially months or years after the Policy is lifted.
• Coverage determinations will depend heavily on the extent of documentation. The necessary documentation to obtain Policy coverage varies based on the complexity of the facility and the circumstances of noncompliance.  There is no one-size-fits-all approach, and EPA expects the regulated community to “fully and completely explain and support the situation presented by COVID-19 public health emergency-caused noncompliance and the facility’s response to it.”  Regulated entities will need to thoughtfully consider the eligibility criteria when preparing documentation, weighing the goal of obtaining Policy coverage with the possibility that this information may become subject to public review.

We note that, when considering the Policy, regulated entities must keep in mind that it applies only to EPA’s discretion to enforce federal environmental laws.  States, including Pennsylvania, have developed their own COVID-19 policies, some of which differ significantly from EPA’s.

Babst Calland’s environmental attorneys can guide you through the complexities of EPA’s Policy and the Coronavirus environmental regulatory landscape and assist you with related strategic decisions.  For more information, please contact Lisa M. Bruderly at 724-910-1117 or lbruderly@babstcalland.com, Julie R. Domike at 301-518-0972 or jdomike@babstcalland.com, or Gary E. Steinbauer at 419-410-4286 or gsteinbauer@babstcalland.com.

Click here for PDF. 

A. A. Moore Capito – Corporate Attorney

Emerging Technologies Profile 

Why do you have two jobs? I’ve got the best of both worlds – in business and in public service. I love being an attorney because it challenges me every day to help clients achieve their business goals. My other job is being a member of the West Virginia House of Delegates. After having worked in Washington, D.C. serving on the White House advance team and as a staff member in the Department of Defense, I attended law school to prepare me for both worlds.

What do you do at Babst Calland? I represent publicly traded and privately held clients in mergers, acquisitions and divestitures, as well as business structuring, governance, commercial contracts, and real estate transactions.

When you are not at Babst Calland, you can be found… at the State Capitol in Charleston, West Virginia performing my legislative duties. I am passionate about West Virginia and the growing opportunities to reinvent ourselves in a way that focuses on innovation, entrepreneurship, and technological growth for the future. Helping West Virginia to expand in the technology space is one of my roles as co-chair of the Tech Caucus in West Virginia’s House.

Personally, what fulfills you most? My family and colleagues at work. I’m so blessed to have an opportunity to live, work, and raise a family in a place I love.

Tell us something about yourself that people may not know. The A.A. in my given name is from my late grandfather – Arch Alfred Moore, Jr., former Governor of West Virginia. My Mom – Shelley Moore Capito – is a U.S. Senator from West Virginia. I also play solitaire, with real cards, in my free time.

Click here for PDF. 

Commonwealth Court Update: Preliminary Opinions and Development Rights

The Legal Intelligencer

(by Krista-Ann Staley)

The Pennsylvania Commonwealth Court, the statewide intermediate appellate court that hears and decides land use appeals, took a temporary hiatus from issuing opinions while the Unified Judicial System of Pennsylvania adapted to the COVID-19 pandemic. During the hiatus, the Commonwealth Court: closed to the public for all nonessential functions through April 30, in accordance with a series of orders from the Pennsylvania Supreme Court; cancelled its March argument session in Harrisburg, indicating that it would decide all cases listed for argument on briefs unless a party requested an oral argument; extended certain filing deadlines under the Pennsylvania Rules of Appellate Procedure and deadlines for briefs, petitions, motions and applications for pending matters for 30 days; cancelled its April argument session in Harrisburg; relocated its May argument session from Pittsburgh to Harrisburg; and announced the May argument list. The Commonwealth Court then resumed posting opinions April 7, and is expected to work through a backlog of cases while its operations remain limited.

Prior to its hiatus, the Commonwealth Court released several land use decisions, two of which addressed statutory interpretation issues through subjects that rarely come before the court: zoning officer preliminary opinions and transferrable development rights.

In Friends of Lackawanna v. Dunmore Borough Zoning Hearing Board, No. 1586 C.D. 2018 (Pa. Commw. Ct. Feb. 18, 2020), the court addressed the “preliminary opinion” procedure set forth in the Pennsylvania Municipalities Planning Code, 53 P.S. §§10101, et seq. (the MPC). That process, added as Section 10916.2 of the MPC by the act of Dec. 21, 1988, P.L. 1329, serves to advance the timeline for a substantive validity challenge and allow a landowner to “secure assurance that the ordinance …  is free from challenge” before filing a land use application. Without a preliminary opinion, an objector can only bring a substantive validity challenge after an application has been filed, when an applicant may have already invested significant time and money in preparing required plans and studies. Instead, the preliminary opinion process allows a landowner to start a timeline for a substantive validity challenge without the expense and time of developing and filing a full land use application.

The court’s recent decision in Friends of Lackawanna addresses a request by Keystone Sanitary Landfill,(Keystone) for a preliminary opinion under Section 916.2. Keystone requested the zoning officer’s opinion as to whether its planned landfill expansion complied with the zoning ordinance. Specifically, Keystone sought a preliminary opinion as to whether the zoning district’s 50-foot building height limit applied to its landfill expansion, planned to reach 1,722 feet in height. The zoning officer issued a preliminary opinion stating that the terms “building” and “building height” pertain to structures with a roof supported by columns or walls. Because the landfill had none of these features, the zoning officer concluded that the height requirement for buildings did not apply.

Friends of Lackawanna and several individuals (collectively, the objectors) appealed the preliminary opinion to the zoning hearing board. Following six days of hearings the board concluded that the objectors lacked standing to file the appeal. The board also ruled on the merits, agreeing with the zoning officer’s preliminary opinion that the landfill was not subject to the height limit because it was not a “structure.” Even if the landfill were a structure, the board held, the height restriction still would not apply because it was impossible to use the ordinance’s roof-based measurement methodology for the landfill.

The trial court affirmed the board and the objectors appealed to the Commonwealth Court. The objectors challenged the merits of the preliminary opinion, arguing the board abused its discretion and erred in holding the landfill is not a structure and the landfill is not subject to the height limit. Keystone argued the zoning hearing board lacked jurisdiction to review the zoning officer’s preliminary opinion.

The court agreed that the board lacked jurisdiction over the appeal and rejected the objectors’ arguments. First, the court rejected the objectors’ position that the board’s jurisdiction over “appeals from the zoning officer’s determination under Section 916.2” allowed the board to consider the merits of the preliminary opinion. The court relied on its opinion in Susquehanna Rheems Holdings v. West Donegal Township Zoning Hearing Board, No. 1394 C.D. 2017 (Pa. Commw. Ct. July 23, 2018) (unreported), petition for allowance of appeal denied, 207 A.3d 906 (Pa. 2019), where it held an appeal from a preliminary opinion under Section 916.2 can only raise a substantive validity challenge to the zoning ordinance. The objectors brought no such challenge in Friends of Lackawanna.

Second, the court rejected the objectors’ argument that the board could consider the merits of the preliminary opinion under Section 909.1(a)(3), which gives the board jurisdiction to hear and render final adjudications on “appeals from the determination of the zoning officer, including, but not limited to, the granting or denial of any permit … ” The court noted that the objectors did not file an appeal under Section 909.1(a)(3). It also found that a Section 916.2 preliminary opinion alone is not a “determination” for purposes of Section 909.1(a)(3). Here, Keystone had not filed a development plan or zoning application and did not secure any vested right; the opinion had no bearing on any application that Keystone may eventually file, if required. Therefore, the preliminary opinion was not a “determination” subject to appeal on the merits.

Note that the Friends of Lackawanna decision is distinguishable the court’s decision in Atul K. Amin Family Limited Partnership II v. Bethlehem Township Zoning Hearing Board, No. 921 C.D. 2010 (Pa. Commw. Ct. Dec. 10, 2010) (unreported), based upon specific ordinance language. In Atul K. Amin Family Limited Partnership II the Bethlehem Township zoning ordinance gave the zoning hearing board jurisdiction to hear and decide appeals alleging that the zoning officer “misinterpreted or misapplied any valid provision of the ordinance.” This language extended the board’s jurisdiction beyond the MPC language regarding appeals from “determinations,” as examined in Friends of Lackawanna. Based upon the explicit reference to misinterpretation and misapplication, the court held that the Bethlehem Township zoning hearing board had jurisdiction to consider the merits of a preliminary opinion and remanded the case.

The court addressed transferrable development rights, another infrequent subject of land use appeals, in Geerling Florist v. Board of Supervisors of Warrington Township, No. 470 C.D. 2018 (Pa. Commw. Ct. Feb. 12, 2020). While implementation is far from widespread, the MPC does authorize land use ordinances in Pennsylvania to incorporate transferrable development rights (TDRs). Generally, TDR programs establish credit systems that allow developers to exchange development rights related to land in preservation areas for increased project intensity on land in development areas. The tool can serve a variety of land preservation goals, including aggregation and protection of agricultural areas, natural resources, and open space.

The issue in Geerling Florist arose from the TDR program set forth in the Warrington Township (township) zoning ordinance, which permitted the use of TDRs pursuant to conditional use approval. Geerling Florist (Geerling) applied to the township for TDR approval related to a 49 single family home development in the Township’s RA-Residential Agricultural Zoning District (RA District). Geerling and the township agreed that the project would require Geerling to use TDRs from another property. However, they disagreed as to the number of credits required.

Geerling’s application to the Township stated that the 49-home project would require the developer to surrender 19 TRDs. It reached the 19 TDR result using a 30-unit cluster development plan as the “baseline” for the number of homes permitted on the property. The township board of supervisors approved the 30-unit plan, under the conditions that the subject property had to preserve 83% of the site as open space in perpetuity and the project had to preserve the “maximum amount of agricultural soils on the property” in accordance with the requirements of the cluster development provision in the zoning ordinance. The township board next considered Geerling’s 49-home TDR development plan and, after further hearings, decided it required Geerling to surrender 35 TDRs, not the 19 proposed by the developer. The township reached the 35 TDR result using the 14 homes permitted by-right in the RA District as the “baseline,” rather than the 30-units available through the cluster development process, because the 49-home plan did not meet the requirements for a cluster development.

On appeal by Geerling, the trial court held that the ordinance was ambiguous because it did not address which baseline (i.e., the number of units available in a cluster development or the number of units available under the general district requirement) applies for purposes of calculating TDRs. Pursuant to the MPC’s directive to interpret ambiguous ordinance terms in the light most favorable to the applicant, the trial court used the cluster development as the baseline for determining the number of required TDRs.

The township appealed to the Commonwealth Court, which found the ordinance was not ambiguous and overturned the trial court’s decision. According to the Commonwealth Court, the different interpretations of the zoning ordinance arose from an omission, rather than competing interpretations of the terms. Because the ordinance was not ambiguous, the landowner was not entitled to the MPC’s favorable interpretation rule. Rather, the court proceeded to apply standard rules of statutory interpretation to the township’s decision. The court ultimately found no error or abuse of discretion in the township board’s interpretation.

The Commonwealth Court will continue to post decisions through the COVID-19 outbreak and asks counsel and parties to monitor individual case dockets and the court’s website for updates.

For the full article, click here.

Reprinted with permission from the April 16, 2020 edition of The Legal Intelligencer© 2020 ALM Media Properties, LLC. All rights reserved.

EPA Publishes Interim Guidance on Site Field Work Decision-Making Related to COVID-19 Impacts

Environmental Alert

(by Lindsay Howard and Matthew Wood)

The COVID-19 pandemic continues to disrupt nearly all aspects of American life and business, including ongoing response activities being conducted under the authority of the U.S. Environmental Protection Agency (EPA).  In connection with these impacts, on April 10, 2020, EPA published a memorandum entitled, Interim Guidance on Site Field Work Decisions Due to Impacts of COVID-19 (“EPA’s COVID-19 Field Work Guidance” or “Guidance”).  The Guidance offers guidelines, specific factors, and examples EPA Regions should consider in their decision-making processes to continue, reduce, or suspend on-site work.  Driving these case-by-case decisions are EPA’s two main priorities: (1) protecting the health and safety of the public, as well as EPA’s staff and cleanup partners; and (2) maintaining EPA’s ability to prevent and respond to environmental emergencies.  This Alert addresses questions regarding EPA’s guidelines and decision-making under the Guidance.

To What Sites Does EPA’s COVID-19 Field Work Guidance Apply?

EPA’s COVID-19 Field Work Guidance applies to ongoing and emergency response actions conducted at sites across the United States under multiple federal programs, including Superfund, RCRA, and TSCA, where EPA is the lead agency or has direct oversight of or responsibility for the work being performed.  EPA acknowledges that any number of parties may actually be performing the work covered by its Guidance, including EPA, states, tribes, other federal agencies, or potentially responsible parties (PRPs).  Although the Guidance does not apply directly to states, EPA specifies that Regions should share the Guidance with states and assist states conducting state-lead RCRA cleanups.

In What Types of Situations Will EPA Regions Reduce or Suspend Response Actions?

The Guidance identifies multiple situations that have informed (or may inform) Regions’ decisions to reduce or suspend response actions.  Among these are where state, tribal, or local officials request a suspension of the response action, where a site worker has tested positive for COVID-19, or where field personnel are not able to work due to travel restrictions or medical quarantine.  The Guidance offers other examples and indicates that the list is not exhaustive, i.e., that similar situations have supported or may support a decision to reduce or suspend on-site field work.

What Factors will Regions Consider When Deciding to Continue, Reduce, or Suspend On-Site Field Work?

EPA’s COVID-19 Field Work Guidance identifies both general guidelines and site-specific factors Regions should consider in making site field work decisions.

1. General Guidelines
   Regions should evaluate (and periodically re-evaluate) their respective ongoing response work in light of potential COVID-19 impacts and restrictions.  Such actions include considering applicable federal, state, tribal, or local health declarations in determining whether to continue work or secure a site until the declaration is resolved.  In the absence of such declarations, EPA instructs Regions to consider other relevant factors, such as the safety and availability of work crews and staff, the critical nature of the work, and logistical challenges.  Where work starts or continues, Regions must review and revise, as necessary, Health and Safety Plans to account for COVID-19 related guidelines.  If work is halted, Regions are advised to monitor site conditions and plan to safely resume work as soon as appropriate.
2. Site-Specific Factors
   The Guidance lists three categories of site-specific factors that Regions should consider in determining whether response actions should continue, be reduced, or paused.  The first is whether a failure to continue a response action “would likely pose an imminent and substantial endangerment to human health or the environment, and whether it is practical to continue such actions.”  These types of scenarios generally include: (1) emergency response and immediate threats (e.g., Time Critical Removal Actions that address an imminent threat to public health and the environment); (2) an ongoing, or threat of, direct human exposures (e.g., on-site exposures to contaminants); and (3) prevention of exposures that pose an imminent threat to public health, welfare, and the environment (e.g., preventing groundwater plume expansion or releases to water bodies that could adversely affect drinking water sources).The second category of factors that Regions should consider involves situations where “maintaining any response actions would lead to a reduction in human health risk/exposure within the ensuing six months.”  Examples provided by EPA include activities such as continuing vapor intrusion investigations or residential site work involving current exposures to residents.The third category advises Regions to evaluate whether situations “that would not provide near-term reduction in human health risk” may be considered for delay, suspension, or rescheduling in coordination with applicable stakeholders.  Examples of these types of activities include periodic monitoring, certain types of sampling, and active remediation of stable conditions.  For each of the three categories, the Guidance provides additional examples and indicates that similar situations may inform Regions’ decisions to continue, reduce, or pause response actions.

How Does the Guidance Apply to Potentially Responsible Parties Performing On-Site Work?

The Guidance directs PRPs who believe the COVID-19 pandemic will delay compliance obligations to refer to their respective enforcement instruments for provisions regarding, for example, requesting schedule adjustments or invoking a force majeure provision, and providing applicable notices.  EPA cautions that any such modifications or force majeure determinations will be made on a case-by-case basis and will consider site-specific facts, including the type of work purportedly affected.  Although the Guidance indicates that EPA will make such decisions promptly, EPA nonetheless encourages performing parties to communicate regularly with their project managers concerning the status of their sites, including regarding anticipated COVID-19-related challenges.

How does EPA’s Guidance Affect Non-Field Site Work?

EPA expects non-field work such as report preparation, modeling, and negotiations to continue to the extent these activities can be conducted remotely.  EPA recognizes, however, that the Coronavirus pandemic may also impact off-site/non-field supporting operations (e.g., laboratories) and directs any party that believes its performance obligations may be delayed by such impacts to consult relevant provisions of its applicable enforcement instrument.

Babst Calland’s environmental attorneys are available to assist you with addressing or responding to any COVID-19-related impacts under the Guidance and other applicable policies.  For more information, please contact Lindsay P. Howard at (412) 394-5444 or lhoward@babstcalland.com, Matthew C. Wood at (412) 394-6583 or mwood@babstcalland.com, or any of our other remediation attorneys.

Click here for PDF. 

Coronavirus may be basis to invoke force majeure provision of consent orders and consent decrees in Pennsylvania

The PIOGA Press

(by Kevin Garber, Sean McGovern and Jean Mosites)

On March 6, Governor Tom Wolf issued a Proclamation of Disaster Emergency throughout the Commonwealth under the Pennsylvania Emergency Management Services Code in response to the expanding COVID-19 coronavirus pandemic. On March 13, President Donald Trump declared a state of national emergency. Many other states and local governments are following suit. These government actions may be a basis to invoke the force majeure clause of consent orders and consent decrees between regulated parties and the Pennsylvania Department of Environmental Protection, other state and local environmental regulatory agencies or the U.S. Environmental Protection Agency.

The standard force majeure provision of most DEP consent orders and agreements allows deadlines in the order to be extended if circumstances beyond the reasonable control of the regulated party prevent compliance with the order. Similar provisions are often found in consent agreements with EPA and in consent decrees approved by federal and state courts.

These force majeure provisions typically require the affected party to notify the agency of the force majeure event when the party becomes aware or reasonably should have become aware of the event impeding performance. For example, the model DEP Consent Order and Agreement requires telephone notice within five working days and written notice, in some circumstances by notarized affidavit, within 10 working days describing the reasons for the delay, the expected duration of the delay, and the efforts being taken to mitigate the effects of the event and length of the delay. This model provision states that failure to comply with the timing and notice requirements invalidates a force majeure extension.

There are compelling reasons why the coronavirus pandemic, which is unlike any event experienced in this country, is beyond the contemplated scope of agency force majeure clauses such that strict adherence to the timing and notice provisions should be excused and extensions should be granted as necessary. If the pandemic is interfering or threatening to interfere with your ability to comply with requirements or deadlines in a consent order or consent agreement, because of a limited availability of employees, vendors, supplies or otherwise, consider potential options within the force majeure clause of the agreement. Also consider an application of force majeure principles to pandemicrelated difficulties complying with environmental permits.

Babst Calland’s environmental attorneys are available to help you with your situation and recommend the best course of action for proceeding in these uncertain times. For more information, please contact Kevin J. Garber at 412-394-5404 or kgarber@babstcalland.com, Sean M. McGovern at 412-394-5439 or smcgovern@babstcalland.com, or Jean M. Mosites at 412-394-6468 or jmosites@babstcalland.com.

Click here for PDF.