Articles, Alerts & Perspectives Archive

Accumulating Accountability: Commonwealth Court Reviews Constitutional Limits on Cumulative Municipal Fines

The Legal Intelligencer

(by Michael Korns and Anna Jewart)

Pennsylvania municipalities are empowered not only to adopt ordinances and enforce them but to establish fines and penalties for violations of the same. However, municipalities are creatures of statute and authorized only to act within the bounds of the powers granted to them by the General Assembly. The various municipal enabling statutes, such as the First Class Township Code, as well as other statutes such as the Pennsylvania Municipalities Planning Code, all include express authorizations for municipalities to prescribe fines and penalties for violations of municipal ordinances and also establish restrictions on the upper limits of those fines or civil penalties per violation. Typically, these statutes also expressly establish that a municipality may, by ordinance, provide that a separate violation shall arise for each day of violation and for each applicable section of the ordinance. Consequently, municipalities, generally, are permitted to seek cumulative fines which grow each day a violation persists. Both the Pennsylvania State Constitution, article I, section 13, PA. CONST. art. I §13, and the Eighth Amendment of the United States Constitution, U.S. CONST. amend. VIII, (as made applicable to the states through the Fourteenth Amendment, U.S. CONST. amend. XIV) prohibit excessive fines, providing in relevant part that “[e]xcessive bail shall not be required, nor excessive fines imposed…” On April 2, 2025, the Commonwealth Court explored whether a cumulative municipal fine imposed under the Philadelphia Code, as authorized by the First Class City Home Rule Act, 53 P.S. §13101 et seq., was unconstitutionally excessive.

In City of Philadelphia v. Epstein, No. 515 C.D. 2024, 2025 WL 981892 (Pa. Cmwlth. April 2, 2025)^[1] the Court reviewed the outcome of a longstanding enforcement action by the City of Philadelphia originating from a 2018 enforcement notice and 2019 complaint seeking a permanent injunction and fines regarding violations of the City Code. An order of the Court of Common Pleas of Philadelphia County directed remedial action and indicated that a $2,300 daily fine would be imposed if the defendant did not comply with the order, beginning to accumulate on April 7, 2020. During the course of proceedings prolonged due to the COVID-19 pandemic, defendant failed to remedy the violations originally cited by the City. On February 6, 2023, the common pleas court issued a final order which assessed a statutory fine of $65,333.33 but noted that the total statutory amount of accrued fines to which the City was entitled (as of November 8, 2022) was $3,456,900.00. The defendant filed a post-trial motion seeking a reduction of the statutory fine, in part, on the grounds that it was excessive and punitive in violation of the First Class City Home Rule Act, the Pennsylvania State Constitution, and the Eighth Amendment of the U.S. Constitution. The common pleas court denied the motion, and the defendant appealed to the Commonwealth Court.

Section 17 of the Home Rule Act and the City Home Rule Charter both authorized the city to impose fines and penalties for violation of City ordinances “not exceeding … $2,300…”. The Home Rule Act further provides that “a city of the first class may increase any fine… or penalty… provided that the increase does not exceed… $400… in any calendar year and the total amount of the fine…or penalty does not exceed two thousand dollars.” The defendant alleged that the City could only seek a maximum fine of $2,300 for each of the violations issued against the property plus a $400 increase per year, amounting to a total of $7,800 maximum. She also argued that regardless, the fine imposed was excessive and punitive, in part because she had trusted her now estranged husband to bring the property into compliance. The City countered that the Court had already rejected the argument that the Home Rule Act and City’s Home Rule Charter capped fines at $2,300 per violation plus $400 per year in City of Philadelphia v. Neely, No. 480 C.D. 2022 (Pa. Cmwlth. Mar. 25, 2024), and that the City was statutorily authorized to impose daily fines. It further argued that the $65,000 fine at issue was not violative of the constitutional restrictions on excessive fines.

The Court first reviewed the relevant statutory authority applicable to Philadelphia, as well as the City Code, noting that it expressly states that “[e]ach day that a violation continues after issuance of a notice or order shall be deemed a separate offense.” The defendant argued that this provision conflicts with the Home Rule Act and Home Rule Charter, but the Court disagreed. It concluded the plain language of the Act and Charter did not prohibit the imposition of a fine or penalty for each offense as defined by the Code. Further, while Section 17 of the Act limited the penalty the City may impose for each individual violation, it did not limit the City’s ability to define what constitutes a violation or offense through an ordinance. As the Court stated, the objective behind cumulative fines for each day a property remains in violation is to encourage property owners to expeditiously remedy ongoing violations, and for those reasons, the Court has generally upheld cumulative or aggregate assessments for continuing violations that remain uncorrected for extended periods. It therefore refused to overturn the imposition of the fine by the common pleas court on those grounds, noting the 1,503 day period over which the defendant had failed to correct the relevant violations.

The Court then turned to the topic of more interest to the remainder of the state – the impact of the Excessive Fines Clauses of the Pennsylvania and U.S. Constitution, which limits the government’s powers to extract payments as punishment for an offense. The Court noted that since fines serve not only as a punishment but as a deterrent, the amount of a fine can be raised to whatever sum is necessary to discourage future or continued violations, subject to any restriction imposed on the amount of the fine by the enabling statute or the Constitution. There need not be strict proportionality between the harm resulting from the offense and the penalty imposed, but a fine may be deemed unconstitutionally excessive where the amount is so great as itself to be confiscatory and beyond the bounds of all reason and justice. Defendant argued that the fine was grossly excessive and disproportionate to the wrong committed as well as to the value of the property, and that the property owner would be unable to pay the fine. The Court rejected these arguments, noting that neither the value of the noncompliant property nor the inability to pay are factors in determining if a fine is unconstitutionally excessive. The Court reasoned that the fine imposed was the result of ongoing violations for a 1,503-day period and fell within the statutory parameters of the Code. Finally, comparing the statutory maximum ($3,345,900) to the fine imposed, the Court noted that the common pleas court had provided a 98% reduction which it found to be a “lenient sum” in comparison. The Court therefore agreed with the court of common pleas that the fine was not unconstitutionally excessive.

As with any other authority, the power of a municipality to seek fines and penalties is not only limited by the state statute that authorizes it but confined by the protections of the state and U.S. Constitution. The Court’s decision in Epstein suggests that constitutional limits will not automatically serve to disrupt cumulative fines that are otherwise levied within the boundaries of state law and perceived to be in furtherance of the dual goals of punishment and deterrence.

Michael T. Korns is senior counsel in the public sector, and energy and natural resources groups of Babst Calland. Anna S. Jewart is an associate in the public sector, and energy and natural resources groups of Babst Calland and focuses her practice on land use, zoning, and general municipal matters.

To view the full article, click here.

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^[1]Opinion reported and pending official citation.

Sick of Healthcare? Healthcare Benefit Update for Employers – What to Watch in 2025

TEQ Hub

(by Jenn Malik and Anna Hosack)

Regardless of party affiliation, the one issue that most Americans seem to be able to agree about in 2025 is that we all are sick of our healthcare system. Healthcare reform is no stranger to the American political discourse, but recent public sentiment at the expense, difficulty, and confusion inherent in navigating the American healthcare is at an all-time low. Americans’ dissatisfaction with the current state of the healthcare industry is unsurprising when between 2008 and 2022, the per enrollee cost of private health insurance has grown by 61.6% according to a study by the Kaiser Family Foundation.^¹Despite rising costs, rates for denials of coverage have increased nationally with a current average of around 19%.^² Add to these statistics the change of administration and corresponding anticipated changes in healthcare benefits policy, along with increased litigation against Plan Sponsors reminiscent of the retirement plan litigation in the late 2000s, and we are all left scratching our heads with how to provide healthcare coverage to employees at an affordable cost – especially when, according to a recent study by Forbes, two-thirds (2/3) of American employees name employer-covered healthcare as the most important benefit in considering whether to take a job.^³ Below are key issues for employers to watch in the healthcare benefits space this year to guide in planning your organization’s healthcare benefits and to budget accordingly:

Challenge to Affordable Care Act’s Preventive Care Coverage

Currently, the Patient Protection and Affordable Care Act (ACA), also known as Obamacare, mandates that most health insurance plans must cover certain preventive services at no cost share to patients.^⁴ These services include benefits such as an annual wellness visit, maternity care, STD testing, certain immunizations for adults and children, cancer screenings, and well-baby/well-child visits.^⁵ The United States Preventive Services Task Force (USPSTF)^⁶, the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP) are various agencies tasked with recommending what benefits must be covered at no cost share under the preventive care mandate.^⁷ Proponents of the mandate argue that covering these benefits at no cost-share leads to earlier detection of serious medical conditions, earlier medical intervention, and more positive patient outcomes which can decrease the number of high-cost claims in the population and deter costs, while critics oppose the increased costs to employers/plan sponsors and may also oppose certain preventive services on religious grounds, such as the requirement to cover pre-exposure prophylaxis for HIV (PrEP) or birth control.

This April, SCOTUS is set to hear a challenge brought by Braidwood Management, Inc., and other employers to the mandate on the basis that the USPSTF, in its role as an administrative body that recommends what services are covered at no cost share, are “principal officers” who must be nominated by the U.S. President and confirmed by the Senate in accordance with the Constitution’s Appointment’s Clause.^⁸ These employers also challenged the mandate on religious grounds, arguing that the ACA’s requirement that plans cover medication for HIV prevention violated the Religious Freedom Restoration Act (RFRA). In 2022, a Texas District Court agreed with the employers, holding that the USPSTF’s recommendations are unconstitutional because its members are officers of the United States that were not appointed in accordance with the Appointments Clause.^⁹ The District Court held that because the members were unconstitutionally appointed, all recommendations implemented by the USPSTF after March 23, 2010 (the effective date of the ACA) must be vacated and issued a nationwide injunction blocking enforcement of the ACA’s preventive care mandate. The District Court also held that the USPSTF’s recommendation to cover PrEP at no cost share violated the RFRA.

On appeal, the Fifth Circuit Court of Appeals affirmed the District Court decision that the USPSTF members were unconstitutionally appointed; however, the Fifth Circuit held that the District Court had erred in vacating all agency actions to implement and enforce the USPSTF’s preventive care requirements and erred by enjoining enforcement nationally.^¹⁰ The Fifth Circuit limited the remedy of enjoining enforcement to the particular plaintiffs and those similarly situated in lieu of a national injunction. The Fifth Circuit also declined to issue similar decisions against ACIP and the HRSA and issued a remand to address whether the Secretary of Health and Human Services properly ratified the recommendations of those agencies.

SCOTUS granted certiorari and will specifically review whether USPSTF members are “inferior officers” of the United States, meaning their appointment was constitutional, and whether the District Court failed to sever the allegedly unconstitutional provision. SCOTUS denied certiorari on the Plaintiff’s cross-petition for review of whether all ACA preventive care requirements violated the non-delegation canon; consequently, all ACA preventive care requirements recommended prior to March 23, 2010 are preserved.

What employers should consider for 2025:

Until SCOTUS renders an opinion, employers subject to the ACA should continue to cover the preventive services recommended by the USPSTF at no cost-share to their employees. If the challenge is successful, employers may be able to impose cost sharing for certain preventive services and/or benefits which may initially reduce healthcare costs. However, it is important to remember that federal law sets the floor, and not the ceiling for required covered benefits – and that while imposing cost-sharing on employees may have an immediate financial gain in the short-term, shifting costs to employees can cause delays in care, which can lead to later medical interventions, higher cost claims, and ultimately, a sicker workforce.

Financial Impact of Prescription Drug Developments

Prescription drug costs are skyrocketing with prescription drug cost trends outpacing medical cost trends in 2025: according to a Segel Health Plan Cost Survey, prescription drug costs grew by 11.4% and medical costs increased by 8%. This trend is heavily influenced by the emergence of glucagon-like peptide-1 receptor agonists (commonly known as GLP-1s) used to treat type 2 diabetes and obesity. While the monthly cost of these drugs is low compared to some other medications, typically ranging from $900 – $1300 per month per patient, their widespread utilization by the public has left employers and health insurers scrambling with how to maintain costs. The financial impact of GLP-1s has been so staggering that many insurers have begun to offer buy-up options to employers if they choose to include GLP-1s on their covered medications list (i.e. Formulary) for weight loss. Proponents of GLP-1s argue that inclusion of the medications on Formulary greatly reduces other costly medical interventions such as gastric bypass surgery, and likewise reduces cardiovascular conditions such as heart attack, and stroke. Those against coverage of GLP-1s argue that there is a lack of independent studies on the impact of long-term usage of GLP-1s, that the costs have significant negative fiscal impacts to the healthcare system, and that the side effects cause even more high-cost claims. Big Pharma continues to seek approvals from the FDA for expanded indications of GLP-1s including for the treatment of sleep apnea, kidney disease, and liver disease.

Additionally, the financial savings that were anticipated when biosimilars, or biologic drugs that are highly similar to an already FDA-approved biologic product, hit the market as many brand medications began to lose their patent protection has been underwhelming. Biosimilar adoption has been slow due to concerns about safety and efficacy among healthcare providers and patients, complex Formulary and reimbursement structures that favor brand drugs over biosimilars, and lack of patient and provider education despite the significantly decreased price tag.

Specialty medications, which on average account for 50% of prescription drug spend, continue to be developed and while these medications offer life altering treatments for patients living with severe illnesses – they also come with a hefty price tag. For example, a new treatment to cure Hemophilia B, a lifelong debilitating bleeding disorder, comes at a price tag of $3.5 Million per treatment. While many balk at the cost, consider on average that an individual with Hemophilia averages $700,000-$800,000 in medical costs per year – so in theory the treatment would pay for itself in 4-5 years. However, for employer-sponsored plans, a single claim of $3.5 million would have an extreme impact on renewals.

Finally, the Trump Administration announced on April 8, 2025 that his administration would soon announce tariffs on pharmaceutical imports. While it is uncertain how Big Pharma will respond to such tariffs, it is certain that if such tariffs come into effect, they will very likely cause significant increases to how much consumers – and specifically plan sponsors/employers will spend on prescription medications. For reference, the U.S. imported over $210 Billion in pharmaceuticals in 2024.

What employers should consider for 2025:

Employers should anticipate prescription drug costs to continue increasing and budget accordingly as GLP-1s are here to stay and increased indications for GLP-1 drugs continue to be considered by the FDA. Employers looking to reduce costs should consider whether to cover GLP-1s for weight loss only. Likewise, employers should speak to their carriers and pharmacy benefits managers (PBMs) about their biosimilar strategy as a means to reduce cost. Employers should investigate copay accumulator programs as a means to leverage drug manufacturer coupon dollars to lower costs of specialty medications and consider plan design changes to their prescription benefits. Finally, employers should prepare for the impact of tariffs on their plans’ prescription drug spends.

Challenge to Mental Health Parity and Addiction Equity Act

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) generally requires health plans to cover mental health and substance use disorder benefits similarly to medical and surgical benefits. Since MHPAEA’s enactment, complex federal regulations have been published to determine whether a health plan treats these benefits in parity which has led to significant difficulty for issuers and plan sponsors in determining whether a health plan is in compliance. In late 2020, Congress enacted the Consolidated Appropriates Act (CAA) which requires group health plans and health insurers to conduct comparative analyses to demonstrate that both quantitative treatment limitations (QTLs), or treatment limitations that are numerical in nature such as visit limits and copays, and non-quantitative treatment limitations (NQTLs), i.e. non-numerical limitations such as network access to providers, are no more stringently applied to mental health/substance abuse benefits than medical/surgical benefits. Since 2021, plans and insurers have been required to make these comparative analyses available to the Department of Labor, HHS, and Department of Treasury (Departments), upon request – but due to the complexity of the rules, enforcement has been challenging and many plans have been found to be out of compliance.

This led to the Departments eventually publishing final rules amending the longstanding 2013 rules on September 23, 2024 (2024 Final Rules). The 2024 Final Rules establish new NQTL standards, bolster the comparative analysis requirements that were added by the CAA, and prohibit plans and issuers from using discriminatory information, evidence, sources, or standards that systematically disfavor or are specifically designed to disfavor access to mental health/substance use disorder benefits as compared to medical/surgical benefits when designing NQTLs.^¹¹ Some of these regulations are already in force while others begin on or after January 1, 2026.

Earlier this year, the ERISA Industry Committee (ERIC) filed suit against the Departments in the U.S. Court of Appeals for the D.C. Circuit seeking to invalidate the 2024 Final Rules, or at a minimum, invalidate key provisions and prohibit the Departments from implementing or enforcing the new rules, asserting that the 2024 Final Rules violate the U.S. Constitution and the Administrative Procedure Act and impose vague and burdensome requirements on health plans.¹² That same day, the Departments released a report to Congress indicating that employers had made progress on complying with MHPAEA but still fell short. The executive director of the ERIC Legal Center asserted that the new regulations “threaten the ability of employers to offer high quality, affordable coverage for the mental health and substance use disorder needs of employees and their families.”^¹³

Prior to the establishment of the 2024 Final Rules, compliance with the MHPAEA caused significant financial strain on health plans and health insurers alike, and by extension drive up compliance costs associated with healthcare benefits coverage. If the additional requirements under the 2024 Final Rules pass constitutional muster, health insurers and plans will incur additional monitoring and reporting costs. Additionally, though MHPAEA enforcement was a top priority for the Biden administration, it is unclear what the Trump administration’s position will be – or what impact the recent workforce cuts at the DOL and HHS will have on the enforcement of MHPAEA going forward.

What employers should consider for 2025:

The 2024 Final Rules may not be here to stay between budget constraints, federal staffing constraints, and the ERIC lawsuit targeting the 2024 Final Rule. In the meantime, employers should monitor updates and budget accordingly for the additional requirements in the 2024 Final Rules to ensure continued compliance with MHPAEA as applicable.

Jenn Malik is a shareholder and Anna Hosack is an associate in the public sector services group of the Pittsburgh law firm of Babst Calland, Clements & Zomnir. Malik focuses her practice on healthcare benefits administration, insurance coverage, and appellate law. Hosack focuses her practice primarily on municipal law, land use, and healthcare benefits law. Contact them at jmalik@babstcalland.com and ahosack@babstcalland.com.

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^[1]Amin, K., Cox, C., Ortaliza, J. & Wager, E., Health Care Costs and Affordability, Kaiser Family Foundation, (May 28, 2024) https://www.kff.org/health-policy-101-health-care-costs-and-affordability/.

^[2]Lo, J., Long, M., et al, Claims Denials and Appeals in ACA Marketplace Plans in 2023, Kaiser Family Foundation, (Jan. 27, 2025) https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans-in-2023/#:~:text=Key%20Takeaways,by%20insurer%20and%20by%20state.

^[3]O’Reilly, Dennis, Best Employee Benefits, Forbes (October 30, 2024) https://www.forbes.com/advisor/business/best-employee-benefits/#:~:text=More%20than%20half%20of%20American,as%20the%20most%20important%20benefit.

^[4]42 U.S.C. § 300gg-13(a)(1).

^[5]Preventive Services Covered by Private Health Plans Under the Affordable Care Act, Kaiser Family Foundation (Feb. 28, 2024) https://www.kff.org/womens-health-policy/fact-sheet/preventive-services-covered-by-private-health-plans/#:~:text=The%20services%20required%20to%20be,is%20published%20or%20otherwise%20released.

^[6]The USPSTF determines what preventive services must be covered at no cost share by reviewing scientific evidence related to the effectiveness, appropriateness, and cost-effectiveness of clinical preventive services for the purpose of developing recommendations for the health care community, and updating previous clinical preventive recommendations. 42 U.S.C. § 299b-4(a)(1).

^[7]The USPSTF recommends what services must be provided at no cost-share, while ACIP recommends which immunizations must be covered, and the HRSA determines what contraceptives require coverage.

^[8]Petition for a Writ of Certiorari, Becerra et al. v. Braidwood Management, Inc. et al., No. 24-316 (Sept. 19, 2024).

^[9]Memorandum Opinion & Order, Braidwood Mgmt. v. Becerra, 627 F. Supp. 3d 624 (N.D. Tex. 2022)

^[10] Braidwood Management, Inc. v. Becerra et al., No. 23-0326 (5^th Cir. 2024).

^[11]Fact Sheet: Final Rules Under the Mental Health Parity and Addiction Equity Act (MHPAEA), U.S. Department of Labor (last visited Apr. 1, 2025) https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/final-rules-under-the-mental-health-parity-and-addiction-equity-act-mhpaea.

^[12]See Complaint, Erisa Industry Committee v. Department of Health and Human Services et al., No. 1:25-cv-00136 (D.D.C. 2025).

^[13]Kellie Mejdrich, Trade Group Sues to Stop Federal Mental Health Parity Regs, LAW360 (Jan. 17, 2025) https://www.law360.com/articles/2286079.

Emerging Technologies and the Energy Industry

There’s no doubt that the energy sector has seen a recent surge in tech-driven initiatives. As economic pressures continue to drive companies to develop and deploy advanced technologies, the industry must also navigate the complex landscape of technology innovation and sustainability to continue to meet regulatory requirements, protect intellectual property, and manage risks associated with the rapidly changing legal and market conditions.

Whether it’s dealing with energy transition, technology onboarding and integration, or AI and automation, Babst Calland is prepared to support energy clients in handling the unique challenges and opportunities surrounding the use of emerging technologies.

For more information, click here. Reach out to Justine Kasznica at jkasznica@babstcalland.com or 412.394.5684 or your Babst Calland contact if you have questions.

Sick of Healthcare? Healthcare Benefit Update for Employers – What to Watch in 2025

Perspective

(by Jenn Malik and Anna Hosack)

Challenge to Affordable Care Act’s Preventive Care Coverage

What employers should consider for 2025:

Financial Impact of Prescription Drug Developments

What employers should consider for 2025:

Challenge to Mental Health Parity and Addiction Equity Act

What employers should consider for 2025:

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^[4]42 U.S.C. § 300gg-13(a)(1).

^[7]The USPSTF recommends what services must be provided at no cost-share, while ACIP recommends which immunizations must be covered, and the HRSA determines what contraceptives require coverage.

^[8]Petition for a Writ of Certiorari, Becerra et al. v. Braidwood Management, Inc. et al., No. 24-316 (Sept. 19, 2024).

^[9]Memorandum Opinion & Order, Braidwood Mgmt. v. Becerra, 627 F. Supp. 3d 624 (N.D. Tex. 2022)

^[10] Braidwood Management, Inc. v. Becerra et al., No. 23-0326 (5^th Cir. 2024).

^[12]See Complaint, Erisa Industry Committee v. Department of Health and Human Services et al., No. 1:25-cv-00136 (D.D.C. 2025).

^[13]Kellie Mejdrich, Trade Group Sues to Stop Federal Mental Health Parity Regs, LAW360 (Jan. 17, 2025) https://www.law360.com/articles/2286079.

Home Field Advantage: EEOC To Prioritize American Workers

The Legal Intelligencer

(by Erin Hamilton and Cella Iovino)

On February 19, 2025, United States Equal Employment Opportunity Commission (EEOC) Acting Chair Andrea Lucas announced that the agency will direct its focus on protecting American workers from unlawful national origin discrimination (the “February 2025 EEOC Guidance”). In a shift from previous priorities usually relating to the prevention of discrimination against foreign nationals and historically marginalized groups, the EEOC’s new enforcement priority will likely lead to an increase in investigations, compliance checks, and litigation relative to the protection of American workers from alleged discrimination.

Applying to employers with 15 or more employees, Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employment discrimination based on race, color, religion, sex (including pregnancy, sexual orientation, and gender identity), and national origin. National origin discrimination occurs when an applicant or employee is treated unfairly due to their country of origin, ethnicity, accent, or because they are perceived to belong to a particular ethnic group, regardless of whether they actually do. In conjunction with its enforcement of Title VII and other federal laws against workplace discrimination and harassment, the EEOC periodically releases guidance to assist employers with compliance.

Traditionally, and under previous administrations, the EEOC focused its national origin enforcement efforts on protecting foreign nationals from employment bias. However, the Trump administration has made its intention to focus on protecting American citizens from what it characterizes as anti-American bias clear. In the press release, Acting Chair Lucas highlighted that this policy shift “will help deter illegal migration and reduce the abuse of legal immigration programs by increasing enforcement of employment antidiscrimination laws against employers that illegally prefer non-American workers, as well as against staffing agencies and other agents that unlawfully comply with client companies’ illegal preferences against American workers.” Further, Acting Chair Lucas opined that the agency will be paying particular attention to employer’s policies and practices which appear to show preference to undocumented individuals, migrant workers, and visa holders over American workers.

The agency’s shift in focus is already making an impact. In a recent settlement, LeoPalace Guam Corporation, operating as LeoPalace Resort in Guam, agreed to pay $1,412,500.00 to resolve a case brought by the EEOC in which it alleged that the resort favored Japanese employees over non-Japanese employees, including American nationals. Specifically, the suit claimed that the resort paid non-Japanese employees less wages, gave them less benefits, and subjected them to worse terms and conditions of employment in comparison to Japanese employees in similar or lower positions. See EEOC v. LeoPalace Guam Corp. d/b/a LeoPalace Resort, Case No. 1:25-cv-00004 (D. Guam 2025). In addition to the settlement payment, the resort also agreed to equitable relief including hiring an external equal employment opportunity monitor to oversee compliance, training, and review of policies and procedures and conducting periodic audits.

Businesses and corporate entities who sponsor foreign workers via work visas or those that typically hire immigrants and/or foreign nationals are likely to be particularly affected by the February 2025 EEOC Guidance. Practical strategies to consider in light of the February 2025 EEOC Guidance include:

Conducting an internal audit of all recruitment, hiring, benefits, compensation and promotion policies to ensure they address national original hiring, employment, work conditions, benefits and compensation in a neutral manner;

Ensure all current and future job postings and hiring selection criteria are neutral as to national origin;

Provide training to management and human resources staff on the requirements of Title VII including its prohibition against national origin discrimination and the February 2025 EEOC Guidance;

Ensure that any third-party staffing agencies and/or recruiters being utilized are aware of Title VII’s prohibition against national origin discrimination and are aware of the February 2025 EEOC Guidance;

Confirm that any visa programs, including H-1B programs, are not being utilized to displace American workers; and

Ensure that pay and working conditions for similarly situated foreign workers and American workers are generally consistent.

Businesses and corporate entities that employ and/or recruit foreign workers should be particularly vigilant in monitoring future EEOC guidance. lawsuits, and other developments based on national origin discrimination in the coming months.

If you have questions about unlawful national origin discrimination or the February 2025 EEOC Guidance please contact Erin Lucas Hamilton at 412-394-6978 or ehamilton@babstcalland.com or Francesca C. Iovino at 412-394-6460 or fiovino@babstcalland.com.

Erin Hamilton is a shareholder in the Employment and Labor and Litigation groups of Babst Calland. Ms. Hamilton has significant experience advising and litigating relative to employment matters including the defense of discrimination and harassment claims as well as defending and prosecuting restrictive covenant, non-competition/solicitation, trade secret misappropriation and employee/executive employment contract disputes. Her experience spans a wide variety of industries, including but (not limited to) energy and natural resources, aviation, engineering, construction, manufacturing, technology, professional sports, banking, insurance and financial services.

Francesca (Cella) Iovino is an associate in the Employment and Labor and Litigation groups of Babst Calland. Ms. Iovino’s experience encompasses all phases of litigation, including a focus on representing clients in complex employment disputes related to discrimination claims, harassment claims, wrongful termination, wage and hour violations, and unionization.

To view the full article, click here.

EPA Announces Expansive Deregulatory Plan

GO-WV

(by Gary Steinbauer, Jessica Deyoe and Ethan Johnson)

On March 12, 2025, U.S. Environmental Protection Agency Administrator Lee Zeldin announced a sweeping plan to “undertake 31 historic actions in the most consequential day of deregulation in U.S. history.” The announcement states that the deregulatory plan is intended to “advance President Trump’s Day One executive orders and Power the Great American Comeback.” EPA states that these actions “will roll back trillions in regulatory costs and hidden ‘taxes’ on U.S. families,” making it “more affordable to purchase a car, heat homes, and operate a business.”

The ambitious plan identifies numerous past EPA regulations or actions that will be reconsidered or reviewed. The regulations identified in the deregulatory plan, which were promulgated under the Clean Air Act, Clean Water Act, and the Resource Conservation and Recovery Act, apply to a wide range of industrial sectors and regulated parties. Although described as “31 actions,” the EPA’s primary announcement lists 22 different items, with some mentioning more than one regulation or past action set to be reconsidered or otherwise addressed as part of the plan. EPA’s list is also separated by headings that appear to correspond to separate Day One executive actions by President Trump. For each of the planned deregulatory actions, EPA issued an accompanying press release providing additional information, including, in a few cases, anticipated timelines for completing the deregulatory actions and planned interim actions.

The Babst Calland team has summarized the identified deregulatory actions and information provided by EPA in the table below:

EPA’s Description	Key Points from EPA Press Release	EPA’s Target Timeline
Unleashing American Energy
EPA Announces Reconsideration of Clean Power Plan 2.0	Reconsidering the “Clean Power Plan 2.0” based on the Biden administration’s rule requiring “unlawful fuel-shifting” and “overreaching” Citing U.S. Supreme Court’s stay of the Clean Power Plan and subsequent decision overturning it in West Virginia v. EPA	No stated timeline
EPA Announces Reconsideration of OOOO b/c	Reconsidering regulations for the oil and gas industry under Clean Air Act (CAA) § 111 (40 CFR Part 60, Subparts OOOOb/c) and revisions to 40 CFR Part 98, Subpart W of the Greenhouse Gas Reporting Program as “ideologically driven regulations” that prevent U.S. “energy dominance” Referring to “major recent Supreme Court precedent” related to federal agencies’ interpretation and implementation of governing statutes	No stated timeline
EPA Announces Reconsideration of Mercury and Air Toxics Standards (MATS)	Reconsidering the MATS rule based on noted costs for compliance, past mercury emissions reductions, and significant regulatory uncertainty for coal plants in several states, including Pennsylvania and West Viriginia Considering 2-year compliance exemption via CAA § 112(i)(4) for affected power plants during EPA’s rulemaking process	No stated timeline for completing reconsideration EPA is considering 2-year compliance exemption
EPA Announces Reconsideration of Greenhouse Gas Reporting Program	Reconsidering the mandatory Greenhouse Gas Reporting Program based on noted costs of calculating and submitting annual emissions reports Noting that mandatory GHGRP is “not directly related to” developing regulations and could be better used to drive improvements at reporting facilities	No stated timeline
EPA Announces it Will Reconsider 2024 Water Pollution Limits for Coal Power Plants (ELG: Steam Electric)	Revising 2024 wastewater regulations for coal burning power plants on flue gas desulfurization wastewater, bottom ash transport water, combustion residual leachate and legacy wastewater Reconsidering technology-based ELGs and evaluating immediate relief from leachate requirements Stating that EPA will consider how it might provide “immediate relief from some of the existing leachate requirements,” and “in a series of related actions,” EPA will provide clarifying updates on leachate requirements and reevaluate availability and cost of membrane technology	No stated timeline
EPA Will Revise Wastewater Regulations for Oil and Gas Extraction	Modernizing regulations on wastewater discharges for oil and gas extraction facilities to “provide regulatory flexibility” and support environmentally sustainable water reuse with “modern technologies and management strategies” Reviewing and evaluating technologies and strategies for produced water to be treated for beneficial reuse, including for AI and data center cooling, rangeland irrigation, fire control, power generation, and ecological needs Considering expanding the geographic scope of where treated wastewater can be used and discharged in the U.S.	No stated timeline
EPA Announces Reconsideration of the Risk Management Plan	Reconsidering 2024 Risk Management Plan (RMP) rule due to “significant concerns relating to national security and the value of the prescriptive requirements within the rule” Stating that the 2024 RMP rule makes oil and natural gas refineries and chemical facilities less safe and less competitive	No stated timeline
Lowering The Cost of Living for American Families
EPA Announces Action to Implement POTUS’s Termination of Biden-Harris Electric Vehicle Mandate	Reconsidering Model Year 2027, Later Light-Duty, Medium-Duty, and Heavy-Duty Vehicle regulations based on noted regulatory and compliance costs and effort to bring back American auto jobs Reevaluating Biden administration’s “Clean Trucks Plan” and “2022 Heavy-Duty Nitrous Oxide (NOx) rule”	No stated timeline
EPA Kicks Off Formal Reconsideration of 2009 Greenhouse Gas Endangerment Finding with Agency Partners	Reconsidering the 2009 Greenhouse Gas Endangerment Finding in collaboration with Office of Management and Budget and other agencies based on costs of regulations that flow from the finding Reconsidering all of EPA’s prior regulations and actions that rely on the 2009 Endangerment Finding Stating that “EPA will follow the Administrative Procedure Act and Clean Air Act, as applicable, in a transparent way for the betterment of the American people and fulfillment of the rule of law” Stating in a separate one-page document that “EPA does not prejudge the outcome” of the reconsideration	No stated timeline
EPA Announces Reconsideration of the Technology Transition Rule	Reconsidering the technology transition rule based on noted costs of refrigerant systems required under rule Stating that the rule harms semiconductor manufacturing and raises the cost of food at grocery stores	No stated timeline
EPA Announces Path Forward on NAAQS for PM2.5 to Aid Manufacturing, Small Business	Reconsidering the PM2.5 National Ambient Air Quality Standards (NAAQS) based on “serious concerns” from states and the standards serving “as a major obstacle to permitting” Releasing guidance “soon” to increase flexibility on NAAQS implementation, reforms to New Source Review, and direction on permitting obligations	No stated timeline for completing reconsideration Guidance to be released “soon”
EPA Announces Reconsideration of Air Rules Regulating American Energy, Manufacturing, Chemical Sectors (NESHAPS)	Reconsidering initially the National Emission Standards for Hazardous Air Pollutants (NESHAPS) for integrated iron and steel manufacturing, rubber tire manufacturing, synthetic organic chemical manufacturing industry, commercial sterilizers for medical devise and spices, lime manufacturing, coke ovens, copper smelting, and taconite ore processing Considering a 2-year compliance exemption via CAA § 112(i)(4) for affected facilities during EPA’s rulemaking process Evaluating other NESHAPs and New Source Performance Standards to determine whether they should be reconsidered	No stated timeline
Administrator Zeldin Begins Restructuring Regional Haze Program	Reconsidering implementation of program based on noted significant costs to power plants in the past Reviewing Regional Haze Program regulations “to ensure that it fulfills Congressional intent, is based on current scientific information, and reflects recent improvements in air quality”	No stated timeline
EPA Announces Action to Address Costly Obama, Biden “Climate” Measurements (Social Cost of Carbon)	Revisiting Biden administration’s “social cost of carbon” based on “significant regulatory costs”	Executive Order requires guidance issued within 60 days of order
Administrator Zeldin Directs Enforcement Resources to Align with Executive Orders and EPA’s Core Mission	Immediately revising National Enforcement and Compliance Initiatives “to ensure that enforcement does not discriminate based on race or socioeconomic status” or “shut down energy production” Stating that enforcement discretion will provide predictability “as EPA considers changes to regulations” and “cost savings”	EPA states it “will immediately revise” initiatives
EPA Terminates Biden’s Environmental Justice, DEI Arms of Agency	Terminating DEI and Environmental Justice arms of EPA	No stated timeline
Advancing Cooperative Federalism
EPA Announces Plan to Work with States on SIPs and Reconsider “Good Neighbor Plan”	Tackling “troubled” “Good Neighbor Plan” to advance cooperative federalism and work with states on Statement Implementation Plans to improve air quality	No stated timeline
Administrator Zeldin Takes Action to Prioritize Cooperative Federalism, Improve Air Quality Faster	Announcing commitment to address backlog of State/Tribal Implementation Plans Noting EPA will assist states to ensure air quality is protected while growing economy Referencing states’ concerns “related to being punished for emissions” outside of their control and “air quality monitors not being located in most logical locations” Specifically mentioning development of semiconductor manufacturing and artificial intelligence	EPA’s goal to clear backlog “as soon as possible”
Administrator Zeldin Takes Action to Decrease Risk of Future Catastrophic Wildfires	Prioritizing allowance of prescribed fires within State/Tribal Implementation Plans to decrease risk of future wildfires	No stated timeline
EPA to Accept Nominations for Science Boards	Reconstituting Science Advisory Board and Clean Air Scientific Advisory Committee Stating changes are critical to EPA receiving scientific advice “consistent with its legal obligations to advance core mission of protecting human health and the environment”	Accepting nominations for 30 days following publication in Federal Register
EPA Announces Action on Coal Ash Program	Prioritizing a number of “timely” actions on coal ash, “including state permit program reviews and update to coal ash regulations” Reviewing Legacy-Coal Combustion Residuals Management Units Rule (CCRMU Rule) and “evaluating whether to grant short- and long-term relief such as extending compliance deadlines”	EPA will propose determination on North Dakota program within 60 days EPA aims to complete CCRMU Rule changes within “a year”
EPA Announces Use of Enforcement Discretion to Further North Carolina’s Recovery from Hurricane Helene	Granting an extension of the no action assurance that North Carolina requested to “use large air curtain incinerators to clear debris without Title V permits to allow more efficient burning of debris with lower emissions”	Immediate

Administrator Zeldin Announces EPA Will Revise Waters of the United States Rule [1]	Revising Clean Water Act (CWA) Waters of the United States definition to reduce red tape, cut permitting costs and lower costs of doing business Undertaking rulemaking process guided by Sackett and providing guidance to states while rulemaking proceeds	EPA will “move quickly” on review and “expeditiously” obtain input from stakeholders

With limited exceptions, EPA provides few details on the timing and steps it will take for each of the identified actions. In multiple announcements, EPA states or implies that it will undertake notice and comment rulemaking under the Administrative Procedure Act. Notably, EPA does not address steps it may take in pending litigation regarding several of the identified regulations. Nor does EPA mention whether the planned deregulatory actions satisfy directives under President Trump’s other Executive Orders, such as the “Ensuring Lawful Government and Implementing the President’s ‘Department of Government Efficiency Regulatory Initiative’” and “Unleashing Prosperity Through Deregulation” orders.

The deregulatory plan will require significant resources and time to implement at a time when EPA’s new political leadership is seeking to drastically cut costs and staff. Although several of the identified deregulatory actions may take years to complete, stakeholders subject to the identified deregulatory actions must evaluate and consider developing strategies for productively engaging with EPA during the expected rulemakings and related actions. Major environmental groups have denounced EPA’s deregulatory plan and are vowing to challenge the EPA.

Babst Calland’s Environmental Practice Group will be closely tracking the steps EPA takes to implement the deregulatory plan. Updates will be provided as significant developments arise. Babst Calland attorneys are available to provide strategic advice on how EPA’s sweeping deregulatory plan may affect your business today and in the future. For more information or answers to questions, please contact Gary Steinbauer at (412) 394-6590 or gsteinbauer@babstcalland.com, Jessica Lynn Deyoe at (202) 853-3489 or jdeyoe@babstcalland.com, Ethan Johnson at (202) 853-3465 or ejohnson@babstcalland.com, or your Babst Calland relationship attorney.

Click here, to view the article online in the April issue of GO-WV News.

[1] This announcement was not part of EPA’s main announcement of the “Biggest Deregulatory Action in U.S. History,” but it was announced separately on March 12, 2025.

Treasury Department Suspends Enforcement of Corporate Transparency Act’s BOI Reporting Requirements

PIOGA Press

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

In yet another twist in the ongoing roller coaster ride of Corporate Transparency Act (CTA) compliance, the U.S. Department of the Treasury’s (Treasury Department) Financial Crimes Enforcement Network (FinCEN) has paused enforcement of the CTA’s beneficial ownership information (BOI) reporting requirements. On February 27, 2025, FinCEN issued a press release stating that it “will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports…by the current deadlines.” Instead, FinCEN plans to issue an interim final rule by March 21, 2025 (the previously extended deadline for most reporting companies), which will set new deadlines and prioritize BOI reporting for entities that “pose the most significant law enforcement and national security risks.”

This announcement was rapidly followed by a Treasury Department press release on March 2, 2025 taking things a step further in announcing that U.S. citizens and domestic reporting companies will not be subject to any penalties or fines for failing to file or update BOI reports, even after the new reporting deadlines are established. The Treasury Department further indicated that it plans to issue a proposed rulemaking to narrow the scope of the BOI reporting requirements to foreign reporting companies only. Treasury Department Secretary Scott Bessent emphasized that the latest announcement is part of the Trump administration’s efforts to support American small businesses by removing burdensome regulations, describing the move as a “victory for common sense.”

What does this mean for reporting companies? Although we await more specific guidance and rulemaking from FinCEN, only “foreign reporting companies” (entities formed under the law of a foreign country and registered to do business in any U.S. state or tribal jurisdiction) will be subject to enforcement action for failure to comply with BOI reporting requirements. “Domestic reporting companies” (entities created by the filing of a document with a secretary of state or similar office under the law of a U.S. state or Indian tribe) and U.S. citizens who are beneficial owners will not face enforcement action and will be exempted from such requirements per a future rulemaking. The impact of these recent announcements on the ongoing litigation concerning the CTA or on legislative efforts to delay or repeal the CTA remains uncertain.

Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you have any questions.

To view the full article, click here.

EPA Announces Expansive Deregulatory Plan

Firm Alert

(by Gary Steinbauer, Jessica Deyoe and Ethan Johnson)

The Babst Calland team has summarized the identified deregulatory actions and information provided by EPA in the table below:

EPA’s Description	Key Points from EPA Press Release	EPA’s Target Timeline
Unleashing American Energy
EPA Announces Reconsideration of Clean Power Plan 2.0	Reconsidering the “Clean Power Plan 2.0” based on the Biden administration’s rule requiring “unlawful fuel-shifting” and “overreaching” Citing U.S. Supreme Court’s stay of the Clean Power Plan and subsequent decision overturning it in West Virginia v. EPA	No stated timeline
EPA Announces Reconsideration of OOOO b/c	Reconsidering regulations for the oil and gas industry under Clean Air Act (CAA) § 111 (40 CFR Part 60, Subparts OOOOb/c) and revisions to 40 CFR Part 98, Subpart W of the Greenhouse Gas Reporting Program as “ideologically driven regulations” that prevent U.S. “energy dominance” Referring to “major recent Supreme Court precedent” related to federal agencies’ interpretation and implementation of governing statutes	No stated timeline
EPA Announces Reconsideration of Mercury and Air Toxics Standards (MATS)	Reconsidering the MATS rule based on noted costs for compliance, past mercury emissions reductions, and significant regulatory uncertainty for coal plants in several states, including Pennsylvania and West Viriginia Considering 2-year compliance exemption via CAA § 112(i)(4) for affected power plants during EPA’s rulemaking process	No stated timeline for completing reconsideration EPA is considering 2-year compliance exemption
EPA Announces Reconsideration of Greenhouse Gas Reporting Program	Reconsidering the mandatory Greenhouse Gas Reporting Program based on noted costs of calculating and submitting annual emissions reports Noting that mandatory GHGRP is “not directly related to” developing regulations and could be better used to drive improvements at reporting facilities	No stated timeline
EPA Announces it Will Reconsider 2024 Water Pollution Limits for Coal Power Plants (ELG: Steam Electric)	Revising 2024 wastewater regulations for coal burning power plants on flue gas desulfurization wastewater, bottom ash transport water, combustion residual leachate and legacy wastewater Reconsidering technology-based ELGs and evaluating immediate relief from leachate requirements Stating that EPA will consider how it might provide “immediate relief from some of the existing leachate requirements,” and “in a series of related actions,” EPA will provide clarifying updates on leachate requirements and reevaluate availability and cost of membrane technology	No stated timeline
EPA Will Revise Wastewater Regulations for Oil and Gas Extraction	Modernizing regulations on wastewater discharges for oil and gas extraction facilities to “provide regulatory flexibility” and support environmentally sustainable water reuse with “modern technologies and management strategies” Reviewing and evaluating technologies and strategies for produced water to be treated for beneficial reuse, including for AI and data center cooling, rangeland irrigation, fire control, power generation, and ecological needs Considering expanding the geographic scope of where treated wastewater can be used and discharged in the U.S.	No stated timeline
EPA Announces Reconsideration of the Risk Management Plan	Reconsidering 2024 Risk Management Plan (RMP) rule due to “significant concerns relating to national security and the value of the prescriptive requirements within the rule” Stating that the 2024 RMP rule makes oil and natural gas refineries and chemical facilities less safe and less competitive	No stated timeline
Lowering The Cost of Living for American Families
EPA Announces Action to Implement POTUS’s Termination of Biden-Harris Electric Vehicle Mandate	Reconsidering Model Year 2027, Later Light-Duty, Medium-Duty, and Heavy-Duty Vehicle regulations based on noted regulatory and compliance costs and effort to bring back American auto jobs Reevaluating Biden administration’s “Clean Trucks Plan” and “2022 Heavy-Duty Nitrous Oxide (NOx) rule”	No stated timeline
EPA Kicks Off Formal Reconsideration of 2009 Greenhouse Gas Endangerment Finding with Agency Partners	Reconsidering the 2009 Greenhouse Gas Endangerment Finding in collaboration with Office of Management and Budget and other agencies based on costs of regulations that flow from the finding Reconsidering all of EPA’s prior regulations and actions that rely on the 2009 Endangerment Finding Stating that “EPA will follow the Administrative Procedure Act and Clean Air Act, as applicable, in a transparent way for the betterment of the American people and fulfillment of the rule of law” Stating in a separate one-page document that “EPA does not prejudge the outcome” of the reconsideration	No stated timeline
EPA Announces Reconsideration of the Technology Transition Rule	Reconsidering the technology transition rule based on noted costs of refrigerant systems required under rule Stating that the rule harms semiconductor manufacturing and raises the cost of food at grocery stores	No stated timeline
EPA Announces Path Forward on NAAQS for PM2.5 to Aid Manufacturing, Small Business	Reconsidering the PM2.5 National Ambient Air Quality Standards (NAAQS) based on “serious concerns” from states and the standards serving “as a major obstacle to permitting” Releasing guidance “soon” to increase flexibility on NAAQS implementation, reforms to New Source Review, and direction on permitting obligations	No stated timeline for completing reconsideration Guidance to be released “soon”
EPA Announces Reconsideration of Air Rules Regulating American Energy, Manufacturing, Chemical Sectors (NESHAPS)	Reconsidering initially the National Emission Standards for Hazardous Air Pollutants (NESHAPS) for integrated iron and steel manufacturing, rubber tire manufacturing, synthetic organic chemical manufacturing industry, commercial sterilizers for medical devise and spices, lime manufacturing, coke ovens, copper smelting, and taconite ore processing Considering a 2-year compliance exemption via CAA § 112(i)(4) for affected facilities during EPA’s rulemaking process Evaluating other NESHAPs and New Source Performance Standards to determine whether they should be reconsidered	No stated timeline
Administrator Zeldin Begins Restructuring Regional Haze Program	Reconsidering implementation of program based on noted significant costs to power plants in the past Reviewing Regional Haze Program regulations “to ensure that it fulfills Congressional intent, is based on current scientific information, and reflects recent improvements in air quality”	No stated timeline
EPA Announces Action to Address Costly Obama, Biden “Climate” Measurements (Social Cost of Carbon)	Revisiting Biden administration’s “social cost of carbon” based on “significant regulatory costs”	Executive Order requires guidance issued within 60 days of order
Administrator Zeldin Directs Enforcement Resources to Align with Executive Orders and EPA’s Core Mission	Immediately revising National Enforcement and Compliance Initiatives “to ensure that enforcement does not discriminate based on race or socioeconomic status” or “shut down energy production” Stating that enforcement discretion will provide predictability “as EPA considers changes to regulations” and “cost savings”	EPA states it “will immediately revise” initiatives
EPA Terminates Biden’s Environmental Justice, DEI Arms of Agency	Terminating DEI and Environmental Justice arms of EPA	No stated timeline
Advancing Cooperative Federalism
EPA Announces Plan to Work with States on SIPs and Reconsider “Good Neighbor Plan”	Tackling “troubled” “Good Neighbor Plan” to advance cooperative federalism and work with states on Statement Implementation Plans to improve air quality	No stated timeline
Administrator Zeldin Takes Action to Prioritize Cooperative Federalism, Improve Air Quality Faster	Announcing commitment to address backlog of State/Tribal Implementation Plans Noting EPA will assist states to ensure air quality is protected while growing economy Referencing states’ concerns “related to being punished for emissions” outside of their control and “air quality monitors not being located in most logical locations” Specifically mentioning development of semiconductor manufacturing and artificial intelligence	EPA’s goal to clear backlog “as soon as possible”
Administrator Zeldin Takes Action to Decrease Risk of Future Catastrophic Wildfires	Prioritizing allowance of prescribed fires within State/Tribal Implementation Plans to decrease risk of future wildfires	No stated timeline
EPA to Accept Nominations for Science Boards	Reconstituting Science Advisory Board and Clean Air Scientific Advisory Committee Stating changes are critical to EPA receiving scientific advice “consistent with its legal obligations to advance core mission of protecting human health and the environment”	Accepting nominations for 30 days following publication in Federal Register
EPA Announces Action on Coal Ash Program	Prioritizing a number of “timely” actions on coal ash, “including state permit program reviews and update to coal ash regulations” Reviewing Legacy-Coal Combustion Residuals Management Units Rule (CCRMU Rule) and “evaluating whether to grant short- and long-term relief such as extending compliance deadlines”	EPA will propose determination on North Dakota program within 60 days EPA aims to complete CCRMU Rule changes within “a year”
EPA Announces Use of Enforcement Discretion to Further North Carolina’s Recovery from Hurricane Helene	Granting an extension of the no action assurance that North Carolina requested to “use large air curtain incinerators to clear debris without Title V permits to allow more efficient burning of debris with lower emissions”	Immediate

Administrator Zeldin Announces EPA Will Revise Waters of the United States Rule [1]	Revising Clean Water Act (CWA) Waters of the United States definition to reduce red tape, cut permitting costs and lower costs of doing business Undertaking rulemaking process guided by Sackett and providing guidance to states while rulemaking proceeds	EPA will “move quickly” on review and “expeditiously” obtain input from stakeholders

[1] This announcement was not part of EPA’s main announcement of the “Biggest Deregulatory Action in U.S. History,” but it was announced separately on March 12, 2025.

Data Centers and Our Region

OnRAMP Magazine

(by Moore Capito and Justine Kasznica)

Data center is fast becoming a household term.

Nearly everyone in the modern world benefits from data centers. As the “backbone” of digital infrastructure, data centers are becoming more and more critical in meeting the demands of the modern digital world. With advances in artificial intelligence (AI) and the increased reliance on computing by people all over the world, demand for data centers is outpacing supply.

We are in a global modern-day gold rush to build data centers. And just as the 49ers faced infrastructure challenges of the day, data center developers are facing a critical infrastructure obstacle: energy.

A data center is a physical facility that houses servers that manage, store, and process data. There are several types of data centers, and while all do not require the same prerequisites to develop, they all require vast amounts of electricity. According to the United States Department of Energy, data centers account for 2 % of the electricity usage in the country consuming 10 to 50 times more electricity per floor space than a typical commercial structure.

The electricity required to power data centers is adding stress on grids that are already pushing the limits. Utilities are having difficulty guaranteeing the level of power required to sustain current demand and meet projected future demand. As a result, developers are evaluating alternative ways to power their projects.

Recently, Microsoft entered into a power purchase agreement with Constellation Energy to reopen Three Mile Island to power their data centers and Amazon Web Services (AWS) purchased Talen Energy’s 1,200 acre data center campus which provides direct power from the Susquehanna Steam Electric Station. Tech companies and developers are no longer waiting on the utilities and are trending toward establishing dedicated power sources. This trend provides energy rich states an incredible opportunity.

Energy companies are actively exploring how to provide direct power ranging from laying additional pipelines to evaluating construction of new power plants dedicated to powering data centers. As evidenced by the recent Constellation Energy and Talen Energy deals, states like West Virginia and Pennsylvania offer an attractive proposition to data center developers – access to vast amounts of energy sources, affordable land and proximity to densely populated areas. Additionally, our two states boast incredible research and development institutions, including Carnegie Mellon University, the global leader in artificial intelligence (AI) research and development. As a result, this region is well positioned to be the next hub for data center development.

Of course, there are challenges. Navigating the regulatory environment, finding suitable property, and identifying partners with available energy supply are just a few. Our firm, Babst Calland, specializes in environmental, energy, and emerging technologies law. As such, we are perfectly situated to connect those pieces because we understand each geographic footprint and tailor legal strategies accordingly, with a deep knowledge of state regulation and local jurisdictions. We provide the cross-disciplinary legal team to address these challenges and support regional and national data center projects.

The demand for data centers is growing and projected to grow even faster. We know the greatest challenge is meeting the electricity requirements. We have an abundant supply of natural resources, affordable land, artificial intelligence research and development, and proximity to densely populated areas. Now is the time to leverage those strengths. If we do so, our region is poised to benefit greatly from this rush for data centers.

With increased demand for complex data center development, whether navigating potential legal challenges related to financing, project siting, land acquisition, zoning, or regulatory compliance, Babst Calland is prepared to address the region’s most pressing concerns.

To view the full article, click here.

Treasury Department Suspends Enforcement of Corporate Transparency Act’s BOI Reporting Requirements

Pittsburgh Technology Council

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you have any questions.

To read the full article, click here.

U.S. Supreme Court Invalidates NPDES Permit End-Result Provisions

Environmental Alert

(by Lisa Bruderly, Joseph Schaeffer, and Alexandra Graf)

On March 4, 2025, the U.S. Supreme Court held in a 5-4 decision in City and County of San Francisco v. EPA, et al. that the U.S. Environmental Protection Agency (EPA) lacks authority under the federal Clean Water Act (CWA) to impose National Pollutant Discharge Elimination System (NPDES) permit requirements that condition compliance on whether receiving waters meet applicable water quality standards (i.e., “end-result” requirements). NPDES permits are issued to allow point sources discharges of pollutants into waters of the United States. These permits typically include limitations as to the quality/quantity of effluent that can be discharged (i.e. effluent limitations). Some permits also require best management practices to reduce pollution in discharges (i.e., narrative requirements). While the Supreme Court did not question the imposition of effluent limitations or narrative requirements, the issue at hand pertained to whether NPDES permits can include “end-result” requirements (e.g., a requirement that a discharge cannot exceed water quality standards).

In 2019, two end-result requirements were added to San Francisco’s NPDES permit for its combined wastewater treatment facilities that prohibited the facility from: (1) making any discharge that “contributes to a violation of any applicable water quality standard” for receiving waters, and (2) performing any treatment or making any discharge that “create[s] pollution, contamination, or nuisance as defined by California Water Code section 13050.”

The U.S. Supreme Court granted certiorari after the Ninth Circuit denied San Francisco’s petition and held that §1311(b)(1)(C) of the CWA allows EPA to impose “any” limitations that ensure the applicable water quality standards are satisfied in a receiving body of water. This is the Court’s first major CWA case since Sackett v. EPA in 2023, which narrowed the extent of wetlands under the jurisdiction of the CWA.

Before the Supreme Court, San Francisco argued that EPA overstepped its statutory authority under the CWA by imposing end-result provisions, while EPA argued it had authority under §1311(b)(1)(C) to mandate “any more stringent limitation” to meet applicable water quality standards, including inserting end-result language in NPDES permits.

The majority opinion, authored by Justice Samuel Alito, held that §1311(b)(1)(C) “does not authorize NPDES permit requirements conditioning compliance on receiving water quality.” The Court evaluated the plain meaning of “meet” and “implement,” as these terms appear in §1311(b)(1)(C), and stated that this section of the CWA “tells EPA to impose requirements to ‘implement’ water quality standards – that is to ‘ensure’ ‘by concrete measures’ that they are ‘actual[ly]’ fulfilled.” Imposing an end-result requirement “simply states the desired result; it does not implement that result.” As support for its position, the Court compared the CWA’s emphasis of placing “direct restrictions” on dischargers with the “backward-looking model” of its predecessor, the Water Pollution Control Act, which held a permittee liable if its receiving water quality did not meet water quality standards.

Justice Alito opined that end-result requirements are contrary to the protections provided by the CWA’s “permit shield,” because a permittee could comply with all requirements of its NPDES permit and still face enforcement and penalties if the receiving water’s quality dropped below designated standards. Moreover, the Court noted that, when more than one permittee discharges to a receiving water, end-result requirements prohibit EPA from fairly allocating responsibility among multiple dischargers contributing to water quality violations. Therefore, the Court reversed the Ninth Circuit and held that “§1311(b)(1)(C) does not authorize the EPA to include ‘end-result’ provisions in NPDES permits.”

Justice Amy Coney Barrett authored the dissent in part, arguing that the CWA gives EPA broad authority to ensure state water quality standards are maintained, and EPA should have the ability to ensure compliance through end-result NPDES permit conditions.

As a practical implication of the ruling, EPA and authorized state agencies likely will not be able to impose or enforce permit restrictions that do not provide clear direction on how to comply with the conditions. Permittees should examine their NPDES permits for these existing conditions. For new or renewal permits, this decision could lead EPA to require submittal of additional information about a facility’s discharge during the application process, which may delay permitting processes and increase costs.

For more information on the implications of the Supreme Court’s decision in City and County of San Francisco v. EPA, et al. or water-related matters, in general, please contact Lisa Bruderly at (412) 394-6495 or lbruderly@babstcalland.com, Joseph Schaeffer at (412) 394-5499 or jschaeffer@babstcalland.com, or Alexandra Graf at (412) 394-6438 or agraf@babstcalland.com.

Treasury Department Suspends Enforcement of Corporate Transparency Act’s BOI Reporting Requirements

Firm Alert

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

Babst Calland will continue to closely monitor developments on this matter. Please reach out to fincenassist@babstcalland.com or your Babst Calland contact if you have any questions.

DEP Announces Availability of Draft Technical Guidance for Maintaining Freeboard and Dewatering of Well Development Impoundments for Unconventional Oil and Gas Operations

FNREL Water Law Newsletter

(by Lisa M. Bruderly, Jessica Deyoe and Mackenzie Moyer)

On January 4, 2025, the Pennsylvania Department of Environmental Protection (DEP) announced the availability of draft Technical Guidance for Maintaining Freeboard and Dewatering of Well Development Impoundments for Unconventional Oil and Gas Operations (Draft Guidance). See 55 Pa. Bull. 146 (Jan. 4, 2025).

The purpose of this Draft Guidance is to assist unconventional operators with how to comply with the Pennsylvania Clean Streams Law and associated regulations regarding freeboard maintenance and dewatering of well development impoundments (WDI) through land application of excess water. The Draft Guidance discusses dewatering when there is no liner in the impoundment, such as during construction and restoration phases, as well as when there is a liner in the impoundment during operational and decommissioning phases. It advises how excess water due to precipitation should be managed during construction, operation, decommissioning, and restoration phases of WDIs to prevent WDIs from overflowing and undermining the structural integrity of the WDI.

For example, before a liner is installed, or after a liner is removed, operators may need to dewater the unlined WDI to allow construction or restoration activities to continue. The Draft Guidance advises that operators should confirm and document that no regulated substances have been added or have accumulated in the water and specifies 16 different conditions that should be followed in confirming and documenting such information.

Once a liner is installed and the WDI is filled with surface water, fresh groundwater, or other fluids approved by DEP, maintaining freeboard in the WDI is necessary to ensure its safe operation. The Draft Guidance indicates that the Office of Oil and Gas Management, when necessary, will consider periodic land application from WDIs to maintain freeboard, with a recommendation that a minimum of two feet of freeboard always be maintained in WDIs to prevent the WDI from overflowing. If the Draft Guidance is approved as currently drafted, before proposing any land applications of water from the WDI, operators should sample the water in the WDIs, and the results should not exceed the maximum limits for contaminants found in Appendix A of the Draft Guidance. Appendix A contains maximum contaminant concentrations that were derived from drinking water standards, water quality standards for rivers and streams, and typical values observed in freshwater rivers and streams. Sample results from the accredited laboratory that performed the analysis should be submitted to DEP.

The Draft Guidance discusses that a WDI Dewatering Plan be submitted and approved by DEP before land applying water from a lined WDI that is in operation or being decommissioned. This Dewatering Plan should discuss the narrative requirements, as outlined in Section IV of the Draft Guidance, and include a map and aerial photograph of the facility. The narrative requirements include the history of use of any chemical additions as well as a proposed sample plan or current sample results from the WDIs.

Governor Shapiro Signs Executive Order Adding Pennsylvania Permit Fast Track Program to Administration’s Broader Efforts to Improve Permitting Processes

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(by Joe Reinhart, Sean McGovern and Christina Puhnaty)

On November 19, 2024, Governor Josh Shapiro signed Executive Order 2024-04 (EO 2024-04) creating the Pennsylvania Permit Fast Track Program (Program). According to its website, the Program “streamlines permitting for high-impact economic development and infrastructure projects in Pennsylvania that require multiple permits from different Commonwealth agencies.” Commw. of Pa., “PA Permit Fast Track Program,” available here. EO 2024-04 states that the Program’s purpose is to “enhance public awareness, collaboration, accountability, coordination, transparency, and predictability in the Commonwealth’s permitting, licensing, and authorizations processes for critical infrastructure projects and projects delivering significant economic development to Pennsylvanians” through a collaborative process between the government and stakeholders. EO 2024-04, § 1.

EO 2024-04 directs the state Office of Transportation and Opportunity to take certain actions to implement the Program. These include: (1) issuing program guidance, offering training, and providing technical assistance to implement the Program; (2) determining if a project is eligible to participate in the Program; (3) providing project management services via coordination with the Governor’s office, e.g., developing coordinated timelines across relevant agencies; and (4) assisting with the online dashboard to inform the public of progress and timelines for designated projects. Id. § 2. Permits that may be fast-tracked under the Program include Chapter 102 National Pollutant Discharge Elimination System permits for Construction Stormwater and Industrial Stormwater, Chapter 105 Permits for water obstructions and/or encroachments, and Air Quality Permits. See Program website. Guidance and current Program projects are also listed on the Program’s website. Id.

EO 2024-04 is just one of the Shapiro administration’s ongoing efforts to improve Pennsylvania’s permit programs. On the same day Governor Shapiro signed EO 2024-04 the administration announced that the Pennsylvania Department of Environmental Protection (PADEP) had reduced its permit backlog by 75% since November 2023. News Release, PADEP, “Shapiro Administration Reduces DEP Permit Backlog by 75 Percent, Completely Eliminates Backlog for Oil and Gas Permits” (Nov. 19, 2024). PADEP attributes the reduction to technology investment, reviews to identify bottlenecks, and hiring additional staff. Id. PADEP has also created the Streamlining Permits for Economic Expansion and Development (SPEED) Program, which authorizes approved contractors to review applications for certain permits and recommend to PADEP whether the permit should be approved or denied. Bids to become a qualified reviewer were due by December 31, 2024. More information on the Shapiro administration’s permit modernization efforts is available here.

Environmental Quality Board to Consider Proposed Notification Rules for Unauthorized Spills into Waters of the Commonwealth

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Mining

(by Joe Reinhart, Sean McGovern and Christina Puhnaty)

In November 2024, the Pennsylvania Department of Environmental Protection (PADEP) submitted to the Pennsylvania Environmental Quality Board (Board) a proposed rule that would establish notification requirements for persons reporting unauthorized discharges to waters of the Commonwealth under 25 Pa. Code § 91.33. Section 91.33 currently requires the person responsible for an unauthorized discharge to immediately notify PADEP if a discharge results in pollution, creates a danger of pollution of the waters of the Commonwealth, or would damage property. PADEP’s proposed rule references 40 C.F.R. § 117.3 to identify a list of reportable substances and quantities that require immediate PADEP notification if discharged into waters of the Commonwealth and outlines five categories of factors for consideration when determining if an unauthorized discharge does not require immediate PADEP notification. Those five categories are:

properties of the substance or substances involved;
location or locations involved;
weather conditions before, during and after the incident;
presence and implementation of adequate response plans, procedures or protocols; and
duration of the accident or other activity or incident.

PADEP’s preamble to the proposed rule provides that

[i]f any single one of the following factors, or a combination of the factors, can adequately establish that there is no risk of the substance reaching waters of the Commonwealth, no further analysis of the other considerations is necessary to determine that immediate Department notification is not required. This may be the case when a spill occurs into secondary containment or where a spill response plan is used to immediately capture all of a substance with low mobility.

PADEP’s proposed rulemaking further requires a person to maintain documentation regarding a decision not to notify PADEP of an unauthorized discharge and a signed statement attesting to the document’s accuracy must accompany the documentation if it is provided to PADEP at PADEP’s request.

The Board adopted the proposed rule at its November 12, 2024, meeting. The proposed rule will be published in the Pennsylvania Bulletin for a 60-day public comment period.

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