May 26, 2020

Why useful public/private partnerships often go undiscovered

Smart Business

(by Adam Burroughs with Moore Capito)

Governments offer many funding and other partnership opportunities to assist private enterprises. Businesses can benefit greatly from these public/ private partnerships, but first they need to be aware of what funding is out there. Awareness is often driven by government agencies, and industry and trade associations. However …

“There is no substitute for having a relationship with a trusted adviser who is well educated on both public and private funding mechanisms,” says Moore Capito, a shareholder at Babst Calland.

Smart Business spoke with Capito about public/private partnerships and strategies to better connect businesses with potentially helpful government opportunities.

Why isn’t there more participation in public programs by businesses?

How often or how readily businesses take advantage of government programs can depend on the type of program and the market sector. For example, agricultural businesses are heavy users of government programs — subsidies, for instance — because that’s been inculcated into that business segment. Many recent partnership opportunities have been geared toward the small business sector (i.e. Small Business Administration (SBA) programs; programs for Disadvantaged Business Enterprises; Minority-owned Businesses Enterprises; Women-Owned business Enterprises; and 8(a)/Minority or Women Owned Small Businesses; as well as SBA loans, including recent high-profile SBA loan programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan that were designed to support small businesses through the COVID-19 pandemic). However, there are plenty of existing government programs available to established businesses that are willing to take the time to look.

While lack of awareness can be a barrier, the administrative burden can also discourage participation. There tends to be significant paperwork necessitated by regulations designed for oversight. …

May 18, 2020

West Virginia DEP Receives Notice of Intent to Sue Under SMCRA Based on Deficiencies in Mine Reclamation Fund

Environmental Alert

(by Kip Power and Robert Stonestreet)

For many years, national and regional environmental interest groups have objected to the alternative bonding system (ABS) administered by the West Virginia Department of Environmental Protection (WVDEP) as a part of WVDEP’s approved coal mine regulatory program under the federal Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. 1201, et seq., (SMCRA). Unlike other bonding programs that require full-cost bonds to secure performance of reclamation requirements under mining permits, the West Virginia ABS involves two components: (1) site-specific bonds posted by mine permittees based on the anticipated costs of reclamation, limited to a maximum of $5,000 per acre; and (2) a Special Reclamation Fund (SRF), funded by a tax on coal production (currently set at 27.9 cents per clean ton). The SRF is intended to fund reclamation expenses in the event WVDEP revokes a permit and the proceeds of site-specific bonds are insufficient to cover the costs to reclaim a disturbed area governed by the revoked permit.

In February 2016, the Ohio Valley Environmental Coalition and other groups filed a petition with the U.S. Department of the Interior’s Office of Surface Mining Reclamation and Enforcement (OSM – the oversight agency under SMCRA), asking that OSM take over the bonding program for mining permits in West Virginia. That petition (which also raised concerns about allowing large companies to self-bond) was never acted upon prior to the change in presidential administrations in January 2017. Long before that, a SMCRA citizens suit was brought in early 2000 in the federal District Court for the Southern District of West Virginia, challenging OSM’s failure to invalidate the West Virginia ABS and impose a federal mine permit bonding system. In response to that suit, the court declined to order OSM to take the requested actions in light of commitments by agency officials to address the groups’ concerns. …

May 12, 2020

Opportunities: Leveraging Technology to Meet New Demands

Emerging Technologies in a Time of Pandemic

(by Ben Clapp, Julie Domike, Gina Falaschi, Justine Kasznica and Boyd Stephenson)

Most of the world is staying home, but businesses must still pay their bills. In late April the federal government estimated the U.S. economy contracted by 4.8 percent in the first quarter of 2020, mostly due to the Coronavirus pandemic. Because the real economic consequences of social distancing occurred in April, future numbers will likely be as bleak, if not worse.

Yet, some businesses are taking bold steps, innovating in communications with their customers, and leveraging pre-existing tools to retool how their customers interact with the company and its product. Companies that never before offered delivery are experimenting with last mile logistics. Farms whose regular restaurant or hotel customers are closed due to public health orders are retooling their supply chains to supply local households. And companies that previously relied on face-to-face interactions are turning to virtual solutions to bring their product to market, even in a field like wine production—where taste is an essential part of the purchasing decision. These companies described here provide just a few examples of how creatively leveraging existing technologies can allow a company to maintain operations.

Last Mile Logistics

The Coronavirus pandemic has shined a spotlight on last-mile delivery, with demand for food, medicine, and other deliveries skyrocketing due to social distancing requirements. While pandemic-driven demand has unquestionably strained existing last-mile delivery resources, retail suppliers that never before relied on delivery have developed their own solutions, provided by a number of companies with technology-based delivery systems and logistics platforms to demonstrate how emerging technologies can be employed to safely and efficiently bridge gaps between suppliers and their customers. …

May 11, 2020

Babst Calland Lands 2024 Space Mission Legal Work for Astrobotic

Firm to Develop Legal/Commercial Framework for Payload Service for NASA’s Artemis Human Landing System

Babst Calland today announced that under a recently announced NASA award, Astrobotic Technologies, Inc. (Astrobotic) has selected the firm to develop what could become the first-of-its-kind blueprint for commercial payload delivery to space for the Artemis human missions as well as future human-crewed space missions.

Pittsburgh-based Astrobotic will be developing the commercial payload service for Dynetics (a Leidos subsidiary), one of three prime contractors (alongside SpaceX and Blue Origin) selected by NASA to design and build a commercial Human Landing System (HLS) and compete to build a privately-developed system to take the first woman and next man to the lunar surface in 2024 as part of the NASA Artemis program.

“As the leading lunar payload delivery provider, we are thrilled to begin setting up this new business model onboard the Dynetics human lander,” said Astrobotic CEO John Thornton. “With payload expertise from our Peregrine and Griffin lunar lander programs, we are well-positioned to extend our payload services to include the new lunar lander. We’re helping to develop and set the standard for the commercial payload market, and that is very exciting,” added Thornton.

Dynetics is leading a broad coalition of industry partners, including Astrobotic, to not only send humans back to the lunar surface, but to also help companies, governments, universities, and nonprofits across the globe send non-human payloads onboard the Artemis Human Lander System. Such payloads can include critical instruments, project and infrastructure products and materials that can support human activities on the lunar surface.

“Helping to launch this new mission to the Moon and to develop the commercial, policy and regulatory framework for its payload delivery business is an exciting opportunity for Astrobotic, all of its partners, and for our team of attorneys at Babst Calland, “ said Justine M. …

May 11, 2020

Potential Clean Water Act Liability extends to discharges to groundwater that reach surface water

The PIOGA Press

(by Lisa Bruderly and Kevin Garber)

On April 23, the Supreme Court, in a landmark decision, ruled 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 litigation 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.

Justice Stephen Breyer, writing for the 6-3 majority, 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, pipeline leaks, spills and releases to ground, waste impoundments/ lagoons, existing groundwater contamination, 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; …

May 11, 2020

PHMSA proposes new guidance for farm taps

The PIOGA Press

(by Keith Coyle and Ashleigh Krick)

On April 20, the Pipeline and Hazardous Materials Safety Administration (PHMSA) 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.

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, operator identification number (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. …

May 7, 2020

Litigation Challenges Before the Pa. Environmental Hearing Board

The Legal Intelligencer

(by James Corbelli)

Pennsylvania employs a unique judicial mechanism to resolve legal disputes which arise from final decisions made by the Pennsylvania Department of Environmental Protection (DEP or department). The Environmental Hearing Board (EHB or board) has been hearing appeals from department decisions for almost 50 years. During that time, the EHB has had the exclusive authority to hear and decide appeals from DEP actions. This article will summarize what can be expected in EHB legal proceedings, and highlight certain unique features of EHB litigation. While matters before the board are similar in many ways to matters litigated in state and federal courts, there are written and unwritten aspects of litigation in front of the Board that can only be fully appreciated through experience in matters before the Board.

An initial limitation of the board is that it has limited jurisdiction, as the board can only consider final actions of the department. As a general matter, the department’s issuance of an order, permit or any other DEP final action can be appealed to the board. The DEP action must be a “final” action, which has been the subject of substantial EHB case law.

The final actions before the board can be quite varied and address a wide range of environmental matters, such as DEP decisions that involve oil and gas rights, landfills, mining of coal and noncoal minerals, dams and encroachments, air, drinking water, storage tanks, stormwater management and more. The EHB can hear actions commenced by the DEP, a member of the regulated community, individuals or citizens groups. Matters that are brought before the EHB may involve an appeal of a permit denial, permit approval, order by the DEP for an operator to take a certain action, a penalty assessment for an alleged violation of law, etc. …

May 4, 2020

Montana District Court’s Vacatur of NWP 12 Impacts Pipeline Projects Across United States

Environmental Alert

(by Lisa Bruderly and Ben Clapp)

Repercussions of a Montana District Court’s vacatur of the U.S. Army Corps of Engineers (Corps) Nationwide Permit (NWP) 12 continue to unfold. NWP 12 is widely utilized by pipeline developers, other energy project proponents, and utilities to authorize certain stream and wetland crossings, and any resulting discharge of dredged or fill material into waters of the United States under Section 404 of the Clean Water Act (CWA).

NWP 12 was cast into a state of confusion in mid-April, when a federal judge in Montana, presiding over a challenge to the Keystone XL Pipeline, vacated the nationwide permit, asserting that the Corps failed to comply with the Endangered Species Act (ESA) when the NWPs were last issued in 2017. The court enjoined the Corps from authorizing any activities under the permit, pending completion of Corps consultations with the U.S. Fish and Wildlife Service and National Marine Fisheries Service (collectively, Services) regarding the permit’s impact on listed species or critical habitat. The order, issued in Northern Plains Resource Council, et al. v. Army Corps of Engineers, has resulted in an immediate halt to the review of thousands of pending NWP 12 requests and, unless stayed, is expected to result in lengthy delays and increased costs for companies engaged in the construction and maintenance of pipelines and other utility lines throughout the country.

NWP 12 Scope and Authorization

NWPs are general permits that the Corps issues under Section 404 for certain regulated activities, under certain thresholds of disturbance, which the Corps has determined will have minimal adverse environmental effects. The NWPs are published by the Corps approximately every five years, with the last publication in 2017, when 52 NWPs were issued. …

April 30, 2020

PHMSA Proposes Regulatory Reforms for Hazardous Liquid Pipelines

Pipeline Safety Alert

(by Brianne Kurdock and Varun Shekhar)

On April 16, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) released a Notice of Proposed Rulemaking (NPRM) to amend the facility response planning, reporting, and external corrosion control requirements for hazardous liquids pipelines in 49 C.F.R. Parts 194 and 195.  PHMSA also proposes modifications to the inspection and investigation requirements in Part 190 which would impact all regulated operators (hazardous liquid, natural gas, underground natural gas storage, and LNG).  PHMSA’s proposal is intended to reduce regulatory burdens, as identified in internal agency reviews and stakeholder comments collected in 2017.  Comments are due June 15, 2020.

Proposed Revisions to Inspection and Investigation Procedures

Under 49 C.F.R. § 190.203, operators are required to provide to PHMSA, upon request, all records and information during an inspection or that pertain to an accident or incident involving a pipeline facility.  The NPRM would amend this regulation to formally allow operators to submit such records and information electronically as long as the records (1) can be downloaded and printed by PHMSA from any U.S. internet access point without watermarks, redaction or alteration, (2) have functionality which matches the original document, and (3) are associated with a contact person of the submitter who will be responsible for addressing any issues with the system or record displayed.  In addition, if documents are made available through an access system provided by the submitter, the operator must disable activation or access codes, internet connectivity requirements, document tracking features, or any pre-access conditions such as log-in agreements.  In addition, any time-out functionality must be set at a reasonable amount of time.

These proposals would prohibit common data security measures, such as access codes, “view only” document portals that restrict printing or downloading, watermarking, and access date and time stamping.  …

April 30, 2020

Recent and Proposed Changes to Pa.’s Water Quality Standards

The Legal Intelligencer

(by Daniel Hido and Hannah Baldwin)

There have been several notable developments recently regarding the Pennsylvania Department of Environmental Protection’s (PADEP) water quality standards regulations at 25 Pa. Code Chapter 93. First, on Jan. 31, the Pennsylvania Independent Regulatory Review Commission (IRRC) approved updates set forth as part of PADEP’s triennial review of the state’s water quality standards. Second, significant changes to the water quality standard for manganese moved closer to becoming law when the Pennsylvania Environmental Quality Board (EQB), a 20-member independent board that reviews and adopts PADEP proposed regulations before publication for public comment, approved PADEP’s proposed rulemaking on Dec. 17, 2019. Finally, PADEP continues work on a final rulemaking with respect to several proposed Class A stream redesignations after receiving comments from the IRRC on June 6, 2019.

PADEP implements the Chapter 93 instream water quality standards by first setting designated uses of surface waterbodies in Pennsylvania, and then by implementing water quality-based effluent limitations in NPDES permits to achieve or maintain the instream water quality of the receiving water, where applicable. Thus, changes to the Chapter 93 water quality standards may result in new or revised effluent limits for any facility that holds an NPDES permit.

Updated Triennial Water Quality Standards

Under Section 303(c) of the Clean Water Act, 33 U.S.C. Section 1313(c), PADEP is required to review and modify, as appropriate, the state’s water quality standards at least every three years. The Chapter 93 water quality standards were last updated in July 2013. The current updates were first proposed in October 2017.

The revised water quality standards make several changes to Table 3 (specific water quality criteria) and Table 5 (human health and aquatic life criteria for toxic substances) in Chapter 93. …

April 28, 2020

Recent Climate Change Developments in Pennsylvania: DEP Meeting on RGGI Modeling and Update to Climate Impacts Assessment

Client Alert

(by Kevin Garber, Jean Mosites and Casey Snyder)

RGGI Rulemaking Special Informational Meeting

On April 23, 2020, DEP presented modeling results of Pennsylvania’s potential participation in the Regional Greenhouse Gas Initiative (RGGI) cap and trade program at a special joint information meeting with the Air Quality Technical Advisory Committee and the Citizens Advisory Council.

DEP utilized consulting firm ICF International’s Integrated Planning Model to estimate the effects joining RGGI would have on Pennsylvania’s electricity generation, CO2 emissions and the PJM Interconnection. DEP is proposing an initial CO2 baseline budget allowance of 78 million short tons of CO2. If Pennsylvania’s regulation becomes effective in January 2022 as proposed by Governor Tom Wolf, the 78 million short ton CO2 budget would decrease annually by approximately 2.5 tons a year, arriving at a budget of 58 million tons in 2030, which is a 25 percent decrease from 2020. DEP proposed setting aside 9.3 million allowances annually for waste-coal-fired generators.

DEP asserted during the presentation that by joining RGGI:

  • Pennsylvania would realize “significant CO2 reductions” immediately beginning in 2022 and continuing through 2030 but DEP did not quantify the reductions.
  • Pennsylvania would remain a leading electricity exporter at roughly historic generation levels.
  • Wholesale energy prices would increase only slightly.
  • Pennsylvania’s generation mix over the next decade would favor gas over coal but generation from renewables will not increase significantly.
  • Pennsylvania would take a critical step toward meeting unspecified GHG reduction goals.

DEP offered relatively little data to substantiate the above claims. Its presentation did not address to any meaningful degree the effects joining RGGI will have on Pennsylvania’s economy and job market, how RGGI proceeds will be reinvested, or the estimated price of electricity at the household level. …

April 28, 2020

How established companies can secure game-changing innovations

Smart Business

(by SBN Staff with Justine Kasznica)

There is global consensus that large companies across various sectors need to innovate, be agile and anticipate new technologies, new markets and new demand cycles to stay competitive.

“We are seeing a paradigmatic shift among large companies,” says Justine M. Kasznica, a shareholder at Babst Calland. “Not only are these companies seeking to attract a diverse and innovative workforce, they are pursuing business-optimizing innovation and solutions, which are often found outside their walls.”

Smart Business spoke with Kasznica about how established companies are finding and taking control of technologies that set them up for a bright future.

How does internal innovation offer large companies a competitive advantage?

While large companies have traditionally innovated from within, recently this model has matured. Now large companies are creating R&D labs with a tech transfer capability designed to be more agile than the parent company. These innovation centers have a distinct culture that’s more agile, nimble, able to sustain high growth. In this model, the company funds and owns the innovations outright and can decide the best course of action to bring them to commercial life — as an asset of the company or a spinout entity that licenses the technology from the parent company and grows independently.

What should companies consider when acquiring companies for their technologies?

As an alternative way to innovate, many large companies search for and acquire companies to bring their technology and innovators in-house through M&A. In this model, due diligence is critical. In addition to financial assessment, it requires an evaluation of whatever technology is being purchased and whether the intellectual property (IP) is sufficiently protected. …

April 24, 2020

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;

    • …

April 24, 2020

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.

    • …

April 22, 2020

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.  …

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