February 11, 2020

PHMSA Proposes New Valve Installation and Minimum Rupture Detection Standards for Gas and Hazardous Liquid Pipelines

Pipeline Safety Alert 

(by James Curry, Keith Coyle and Brianne Kurdock)

On February 6, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a notice of proposed rulemaking (NPRM) in the Federal Register containing new valve installation and minimum rupture detection standards for gas and hazardous liquid pipelines.  The NPRM would require the installation of automatic shutoff valves (ASV), remote-control valves (RCV), or equivalent technology, on certain gas transmission and hazardous liquid pipelines.  The NPRM also contains proposed requirements for rupture detection and mitigation, including provisions for improving emergency response and conducting failure investigations and analyses.  Public comments must be filed in response to the NPRM on or before April 6, 2020.  Additional background information and a brief summary of PHMSA’s proposals are provided below.

Why Did PHMSA Issue the NPRM?

In 2010, a pair of significant pipeline incidents occurred in Marshall, Michigan, and San Bruno, California.  The resulting NTSB investigations led to the issuance of safety recommendations relating to the use of ASVs and RCVs and other measures to improve rupture detection and response.  Also, in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (2011 Act), Congress added mandates to the Pipeline Safety Act directing PHMSA to conduct studies and, if appropriate, establish regulations to address the concerns identified in NTSB’s safety recommendations.  In the years following the 2011 Act, PHMSA commissioned the studies required by the congressional mandates and received separate recommendations from GAO on the need to improve pipeline incident response.  PHMSA also issued two ANPRMs after the 2010 pipeline incidents asking for public comment on the need to amend the pipeline safety regulations for valve installation and rupture detection.  …

February 10, 2020

Revised DEP policy would expand the scope of projects requiring PHMC review

The PIOGA Press

(by Jean Mosites, Hannah Baldwin and Casey Snyder)

On December 28, the Pennsylvania Department of Environmental Protection published notice of a substantive revision to the Policy for Pennsylvania Historical and Museum Commission (PHMC) and DEP Coordination During Permit Application Review and Evaluation of Historic Resources (012-0700-001). The draft policy, if finalized, would replace Implementation of the Pennsylvania State History Code: Policy and Procedures for Applicants for DEP Permits and Plan Approvals, finalized in 2002 and amended in 2006, and establishes the framework DEP would implement for its plan approvals and permit application reviews to comply with Pennsylvania’s History Code, 37 Pa. C.S. §§ 101 et seq.

The History Code and its application to oil and gas operations

Under Section 507 of the History Code, Common-wealth agencies must notify PHMC before undertaking any Commonwealth or Commonwealth-assisted permitted or contracted project that affects or may affect archaeological sites and provide PHMC with information concerning the project or activity. DEP requires applicants to submit the State Historic Preservation Office (SHPO) Project Review Form to PHMC if their project potentially affects an archaeological site. After receiving the form from the applicant, PHMC must then determine whether the project may adversely affect an archaeological site.

Oil and gas operations potentially fall within the History Code’s consultation and survey requirements as “Commonwealth-assisted permitted projects.” Activities that require state permits, such as construction of well pads, pipelines, compressor stations and underground injection control wells, could have the potential to affect historic resources that come within the purview of the PHMC coordination requirements in the History Code.

Neither the History Code nor the draft policy mandates outcomes for known or discovered historic resources identified during the review process or during a survey or field investigation. …

February 7, 2020

New WOTUS definition finalized, new challenges expected

The PIOGA Press

(by Lisa Bruderly and Kevin Garber)

On January 23, the U. S. Environmental Protection Agency and the U. S. Army Corps of Engineers pre-published the final Navigable Waters Protection (NWP) Rule, which (yet again) redefines the scope of waters regulated under the Clean Water Act (CWA). In particular, the final NWP Rule revises the definition of “waters of the United States” (WOTUS) in 12 federal regulations and will become effective 60 days after publication in the Federal Register.

Once effective, the NWP Rule will almost certainly be challenged in the courts by NGOs and other interested parties. These challenges could result in the courts staying the NWP Rule in some, or all, states while the lawsuits are litigated.

The NWP Rule is the final step in fulfilling the Trump administration’s promise to repeal and replace the Obama administration’s 2015 Clean Water Rule (CWR), which many believe improperly expanded the scope of waters regulated under the CWA. Effective December 23, 2019, EPA and the Corps repealed the CWR and restored the WOTUS definition that existed before 2015. Prior to the repeal, the pre2015 rule’s WOTUS definition applied in approximately half of the states, while the CWR’s WOTUS definition applied in the remainder (including Pennsylvania), resulting in certain states having more federally regulated waters than other states.

The stated intent of the NWP Rule is to provide “clarity, predictability and consistency” regarding CWA jurisdiction. Consistent with President Trump’s February 28, 2017, Executive Order, the NWP Rule heavily reflects and relies upon Supreme Court Justice Antonin Scalia’s interpretation of the pre-2015 rule’s definition of WOTUS, as expressed in his plurality opinion in the seminal case, Rapanos v. …

February 6, 2020

DOL Issues First Meaningful Revision to Joint Employer Rule in Decades

The Legal Intelligencer

(by Stephen Antonelli and Andrew DeGory)

On Jan. 16, the U.S. Department of Labor (DOL) released a final rule updating its interpretation of “joint employer” under the Fair Labor Standards Act (FLSA). The update represents the first “meaningful revision” of its interpretation, codified at 29 CFR Part 791, since the FLSA’s inception in 1958. The final rule takes effect on March 16 and carries meaningful significance for companies that rely on temporary staffing and subcontractors and franchise owners. It could also allow companies to exert more influence over temporary workers without being considered a “joint employer.” While not binding on the federal courts, the final rule will serve as the DOL’s official interpretation moving forward and guide its enforcement of this issue under the FLSA.

The FLSA has always recognized that an employee can have two or more employers who are jointly and severally liable for the wages of its workers. The act requires covered employers to pay their employees at least the federal minimum wage for every hour worked and overtime for every hour worked over 40 in a workweek. The FLSA defines the term “employer” to “include any person acting directly or indirectly in the interest of an employer in relation to an employee.”

Part 791 recognizes two scenarios where an employee may have joint employers. In the first scenario, and most commonly, an employee performs work for an employer while another person or entity “simultaneously benefits” from that work. Thus, the employee only works one “set” of hours in a given week. In the second scenario, “one employer employs an employee for one set of hours in a workweek, and another employer employs the same
employee for a separate set of hours in a workweek.”

The DOL’s final rule primarily addresses the first scenario and adopts a four-factor balancing test derived from the U.S. …

February 5, 2020

Elizabeth A. Dupuis named to Pennsylvania Business Central’s “Top 100 People”

Pennsylvania Business Central 

Elizabeth A. Dupuis has been named to this year’s Pennsylvania Business Central’s “Top 100 People” list and profiled in its Signature Top 100 issue. Nominations were taken throughout the publication’s 24-county coverage area, and the final honorees were selected by a special selection committee for their professional and community contributions.

Betsy Dupuis has practiced law in Central Pennsylvania since 1997, most recently as Managing Shareholder at law firm Babst Calland’s State College office. Her practice focuses on real estate transactions, business planning and formation, commercial and contract litigation, estate planning and administration. She is also a licensed title agent in Pennsylvania and conducts commercial real estate closings through MidState Closing Company, a Babst Calland affiliate.

Among other honors, she is a graduate of Leadership Centre County and was recognized by LCC with the Community Leadership Association’s Distinguished Leader Award. She is the incoming chair for the National Association of Home Builders Legal Action Committee. She presently serves on the boards of the Centre County Chamber of Business and Industry (CBICC), the Central Pennsylvania Risk Management Association, and the Pennsylvania Builders Association. She is a past Chair of the Centre County United Way and the Palmer Museum of Art Gala.

She was recently re-appointed for a second four-year term as Solicitor for Centre County.

Top 100 People
The vibrant economic and social life of central Pennsylvania is powered by people. When goods or services are delivered in an efficient and timely manner, expertise and knowledge brought to bear on a problem, or necessary care provided, it’s not just the businesses and the institutions – but the people behind them that get the job done. We all know that powerhouse individual – the person with the vision, dedication and drive to not only complete the task, but to envision, expand and excel. …

January 31, 2020

Artificial Intelligence Is Transforming the Legal Industry

The Legal Intelligencer

(by Christian Farmakis)

Artificial intelligence (AI) is adding efficiencies and transforming businesses everywhere, and legal practices are no exception.

General counsels who are hiring lawyers need to understand that this technology is available now, so they can make sure their lawyers are leveraging the latest technology tools. AI can increase speed, increase efficiency and lower costs for clients—if the law firm has the right tools, but more importantly knows how to use those tools.

The following are some of the common questions about advancement of AI technology in the legal space.

•  How is AI technology disrupting the legal industry?

AI is a term generally used to describe computers performing tasks normally viewed as requiring human intellect.

AI legal technology won’t replace lawyers, but these tools will drastically change the way lawyers provide services for their clients. While estimates vary, 23% to 35% of a lawyer’s job could be automated. As a result, lawyers will need to be more strategic and supervisorial, able to act as project managers and supervise the information being fed into systems, and knowledgeable about the assumptions underlying the machine learning algorithms.

So far, projects that classify data have been impacted the most, allowing projects such as e-discovery, due diligence, document management and research to be done faster and more efficiently.

Law firms can already pass these savings on to clients, but this is only the beginning of the transformation. Early law firm adopters are implementing artificial intelligence, machine learning and predictive analytics to legal contract review and document management, enhancing efficiency, intelligence and quality while reducing costs for clients.

For example, with the addition of artificial intelligence software, Babst, Calland, Clements and Zomnir can now deploy highly trained machine learning algorithms in its due diligence process resulting in faster, more intelligent contract or document review for clients. …

January 31, 2020

New WOTUS Definition Finalized – New Challenges Expected

Environmental Alert

(by Lisa Bruderly)

On January 23, 2020, the U. S. Environmental Protection Agency (EPA) and the U. S. Army Corps of Engineers (Corps) pre-published the final Navigable Waters Protection Rule (NWP Rule), which (yet again) redefines the scope of waters that are regulated under the Clean Water Act (CWA).  In particular, the final NWP Rule revises the definition of “waters of the United States” (WOTUS) in 12 federal regulations and will become effective 60 days after publication in the Federal Register. Once effective, the NWP Rule will almost certainly be challenged in the courts by NGOs and other interested parties. These challenges could result in the courts staying the NWP Rule in some, or all, states while the lawsuits are litigated.

The NWP Rule is the final step in fulfilling the Trump administration’s promise to repeal and replace the Obama administration’s 2015 Clean Water Rule (CWR), which many believe improperly expanded the scope of waters regulated under the CWA. Effective December 23, 2019, EPA and the Corps repealed the CWR and restored the WOTUS definition that existed prior to 2015 (Pre-2015 Rule). Prior to the repeal, the Pre-2015 Rule’s WOTUS definition applied in approximately half of the states, while the CWR’s WOTUS definition applied in the remainder (including Pennsylvania), resulting in certain states having more federally regulated waters than other states.

The stated intent of the NWP Rule is to provide “clarity, predictability and consistency” regarding CWA jurisdiction. Consistent with the President’s February 28, 2017 Executive Order, the NWP Rule heavily reflects and relies upon Justice Antonin Scalia’s interpretation of the Pre-2015 Rule’s definition of WOTUS, as expressed in his plurality opinion in the seminal case, Rapanos v. United States (547 U.S. …

January 30, 2020

Council on Environmental Quality Proposes Amendments to NEPA Regulations

The Legal Intelligencer 

(by Ben Clapp, Varun Shekhar, Casey Snyder and Brianne Kurdock)

If a newly proposed rulemaking is finalized, the process by which federal agencies are required to analyze the environmental impacts caused by their actions could be comprehensively updated for the first time in over four decades. On Jan. 10, the Council on Environmental Quality (CEQ) published a notice of proposed rulemaking in the Federal Register to update its regulations implementing the National Environmental Policy Act of 1969 (NEPA). The proposed revisions seek to narrow both the scope of projects that must be reviewed under NEPA, as well as the nature and extent of such review. These changes are intended to reduce the time, cost and workload required to comply with NEPA, and could also make it more difficult for opponents of agency actions that seek to block those actions in court based on alleged NEPA violations.

Background of NEPA

NEPA, enacted in 1970, is a procedural law; it does not mandate substantive environmental outcomes. The purpose of NEPA is to promote accountability and transparency in federal decisions to ensure that environmental concerns are integrated into federal decision-making. The CEQ, a division of the Executive Office of the President, is charged with overseeing implementation of NEPA  CEQ first promulgated regulations implementing NEPA in 1978.

NEPA applies to major federal actions significantly affecting the quality of the human environment, including those undertaken by nonfederal entities that receive federal funding or require federal permitting approvals. Federal agencies have three primary means of complying with NEPA. First, federal actions that have previously been determined to involve no significant impacts to the environment may receive a categorical exclusion (CE) from a more in-depth and time-consuming, review. …

January 24, 2020

Trucking regulators look to alleviate cost increases, while keeping safety first

Smart Business

(by Jayne Gest with Boyd Stephenson)

The trucking industry is still adjusting to the final transition to electronic logging devices (ELDs). Some relief may be on the horizon, however, as federal regulators consider whether to relax the hours of service requirements.

“Every solution has unintended consequences, and that is exactly what we are seeing now,” says Boyd A. Stephenson, associate at Babst Calland. “The supply chain is like a balloon, where everything is interconnected. You push on one part and another piece will pop out.”

Paper logbooks are left to the discretion of the driver, while ELDs record driving time automatically to ensure driving hours are strictly followed. The idea is to make the roads safer. Effective now, strict enforcement of the ELD mandate applies to all drivers, unless they operate under the short-haul rule exemption.

The trucking industry is dealing with rising transportation costs and an overall driver shortage in an economic expansion. Freight volumes also grew more slowly in 2019, with trade conflicts and tariff increases taking a toll on growth.

An American Transportation Research Institute survey found that the top industry concerns for 2019 were driver shortages, hours of service, driver compensation and detention or delays at customer facilities. These obstacles increase trucking costs, which get passed on to shippers that need their goods transported.

Smart Business spoke with Stephenson about hours of service rules and other industry changes that businesses should be aware of in 2020.

Why did the Federal Motor Carrier Safety Administration (FMCSA) feel a need to change the hours of service rules?

With ELDs in place, drivers cannot adjust their logs. Difficulties like wait time while cargo is loaded or unloaded, weather and traffic have highlighted the need to adjust the hours of service and let drivers spend more time on the road. …

January 22, 2020

The Council on Environmental Quality Proposes to Amend NEPA Regulations

Environmental Alert

(by Ben Clapp, Varun Shekhar, Casey J. Snyder and Brianne K. Kurdock)

On January 10, 2020, the Council on Environmental Quality (CEQ) published a notice of proposed rulemaking in the Federal Register to revise regulations implementing the National Environmental Policy Act of 1969 (NEPA).  These revisions could significantly affect projects in several industries, including infrastructure development, that require approval by federal agencies.

NEPA is a procedural statute that requires federal agencies to evaluate environmental impacts associated with proposed major actions.  Major actions are actions subject to federal control and responsibility with potential significant effects.  CEQ’s regulations that implement NEPA aim to ensure that environmental effects from such actions are considered before they are undertaken.  These regulations have never been comprehensively revised since they were promulgated in 1978, despite statutory changes that provided for a more streamlined NEPA review of certain infrastructural projects.  The Trump administration first signaled its intent to update the NEPA regulations in 2017, when it issued an Executive Order directing CEQ to review the environmental review process to enhance its efficiency, specifically for major infrastructure projects.  In June 2018, CEQ published an advance notice of proposed rulemaking (ANPRM) soliciting comments on potential revisions to the NEPA regulations.  CEQ considered those comments when developing the current proposed rule.

Summary of CEQ’s Proposed Changes

CEQ has proposed extensive revisions to its regulations in an effort to create a more efficient and timely NEPA review process.  The proposed changes would impact several fundamental aspects of the NEPA process, such as the application and scope of NEPA review, analysis of alternatives, and timing requirements.  Key proposed changes include:

  • Revision of the term “effects.”  This revision would alter the scope of an agency’s effects analysis under NEPA. 

    • …

January 14, 2020

Pennsylvania Supreme Court establishes requirements for easements by necessity

The PIOGA Press

( by Megan Mariani and Nicholas Habursky)

The modern oil and gas industry is a complex and multifaceted operation involving significant upstream, midstream and downstream infrastructure. Well pads located on the surface are necessary to extract the oil and gas from the subsurface. A constantly expanding network of pipelines are required to transport the produced oil and gas from the well pad to places of market or refinement. This complexity requires a constant balance of property rights between surface owners and mineral owners and operators. One mechanism by which the parties balance property rights is through the use of easements. Easements can be created in several different ways, including through an implied easement by necessity which was recently addressed by the Supreme Court of Pennsylvania in Bartkowski v. Ramondo, No. 60 MAP 2018, 2019 Pa. LEXIS 6100 (October 31, 2019).

Implied easement by necessity

Before discussing Bartkowski, it is helpful to understand the elements of an implied easement by necessity. In Pennsylvania, for an implied easement by necessity to exist, three elements must be met:

  1. Title to the dominant and servient properties were once held by one person;
  2. This unity of title must have been severed by a conveyance of one of the tracts; and
  3. The easement must be necessary for the dominant owner to use the land, with the necessity existing both at the time of the severance of title and at the time of the exercise of the easement. An easement by necessity is always of strict necessity and not a mere matter of convenience.

Claiming an easement by necessity involves inherent risks. …

January 9, 2020

Trump Administration Partners with US DOT in Releasing New Autonomous Vehicle Guidance

Emerging Technologies Alert

(by Justine Kasznica, Ashleigh Krick and Boyd Stephenson)

On January 8, 2020, the Trump administration, in collaboration with the U.S. Department of Transportation (US DOT), issued Automated Vehicles 4.0: Ensuring American Leadership in Automated Vehicle Technologies. This is the federal government’s fourth iteration of its voluntary guidance on autonomous vehicles (AVs). So far, the US DOT’s hands-off approach to AV regulation has allowed for technological innovation while allowing industry participants and states to explore different avenues for testing AV technologies on public roads.  AV 4.0 does not disturb this approach, and instead focuses on explaining the research and development happening across the federal government and the opportunities for stakeholders to become involved.

Background

In September 2016, the National Highway Traffic Safety Administration (NHTSA) issued its first guidance on AVs called the Federal Automated Vehicles Policy.  The Policy provided a model state policy framework, explained NHTSA’s current regulatory tools to address AVs, and described potential new tools and authorities that NHTSA could use in addressing AVs.  NHTSA also provided vehicle performance guidance to AV manufacturers and developers for designing, testing, and deploying AVs.

NHTSA replaced this guidance in September 2017 with Automated Driving Systems 2.0 (ADS 2.0).  ADS 2.0 established a “Voluntary Safety Self-Assessment”, recommending that entities engaged in the testing and deployment of AV technologies voluntarily submit an assessment of how they address safety to establish public trust and confidence in the technology. AV 2.0 outlined 12 safety elements (including system safety, operational design domain, crashworthiness and others).  By the end of 2019, only a small fraction (under 25 percent) of AV testers published such assessments.  ADS 2.0 also provided guidance to state legislatures on potential legislation and best practices for regulatory bodies charged with ensuring roadway safety. …

January 9, 2020

RGGI’s New Relative, TCI: A Cap-and-Invest Initiative for Emissions from Transportation Fuel

Environmental Alert

(by Julie R. Domike and Gina N. Falaschi)

A new regional program under consideration in 12 Northeast and Mid-Atlantic states and the District of Columbia would create a cap-and-invest program for GHG emissions from fossil fuels used in transportation. The initiative proposed by the Transportation and Climate Initiative (TCI) – a regional collaboration of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia that seeks to improve transportation, develop the clean energy economy and reduce carbon emissions from the transportation sector – would be similar to the Regional Greenhouse Gas Initiative (RGGI), which administers a cap and trade program for power plant GHG emissions.

TCI released a draft memorandum of understanding (TCI MOU) on December 17, 2019, which anticipates that each participating jurisdiction will follow its legal process to adopt a program consistent with a jointly developed Model Rule to implement the final TCI MOU. TCI plans to finalize the Model Rule by the end of 2020 after a 60-day comment period and expects that the TCI cap-and-invest program could be implemented in 2022.

The cap and invest program would begin with an initial GHG emissions allowance cap assigned to each participating jurisdiction, which would then decline each subsequent year to bring about a reduction of emissions from the transportation sources. These emission allowances would be distributed at auctions, and funds generated from these auctions are anticipated to fund low-carbon and clean mobility options in urban, suburban, and rural communities. The contemplated program will cover all gasoline and on-road diesel fuel dispensed at the terminal rack and require fuel suppliers to hold emissions allowances equal to the GHG emissions from the fuel they distribute in the participating jurisdictions. …

January 8, 2020

Arbitration Means Arbitration: Golden Eagle Resources II v. Willow Run Energy

(by Mychal Sommer Schulz)

The West Virginia Supreme Court of Appeals recently signaled that it would treat arbitration issues under the West Virginia Revised Uniform Arbitration Act, W. Va. Code § 55-10-8, et. al. (the “Act”), exactly the same as arbitration issues that arise under the Federal Arbitration Act (FAA).

In Golden Eagle Resources II, L.L.C. v. Willow Run Energy, L.L.C., No. 19-0384 (Nov. 19, 2019), the Court addressed a written contract by which Willow Run conveyed mineral interests in property to Golden Eagle. The written contract contained an arbitration provision by which the parties agreed that any “disagreement between the Parties concerning this Agreement or performance thereunder” would be submitted to arbitration. A dispute arose about whether a cloud on title existed on the mineral interests conveyed, which led Golden Eagle to withhold payment for those interests, after which Willow Run filed a breach of contract civil action in the Circuit Court of Pleasants County.

Golden Eagle sought to dismiss the civil action and have the dispute referred to arbitration. After the circuit court agreed to allow Willow Run to amend its complaint to include a declaratory judgment claim against additional defendants who allegedly may have created the cloud on title, the circuit court refused to refer Golden Eagle’s claims to arbitration because it found that (1) W. Va. Code § 51-2-2(d) (2017) grants circuit courts jurisdiction “to remove any cloud on the title to real property, or any part of the cloud, or any estate, right or interest in the real property[,]” and (2) the additional parties in the amended complaint, who were not signatories to the arbitration agreement, were necessary parties to the dispute as they allegedly may have cause the cloud on the title to the mineral interests conveyed to Golden Eagle. …

January 8, 2020

Legal Tech: Babst Calland & Solvaire: An AI Contract Review Use Case

Law Journal Newsletters

(by Christian A. Farmakis)

Babst Calland and our technology affiliate, Solvaire, have been performing complex due diligence, discovery, and document management projects for clients for more than 20 years. Our clients look to us for due diligence guidance in the areas of acquisitions and divestitures, as well as complex corporate, commercial and real estate transactions.

The firm has a long history of utilizing the latest technologies to enhance contract review. And, in the last few years, the firm has taken a deep look at AI-assisted review and its ability to enhance efficiency and reduce cost for clients. Saying that we have become “AI Believers” in the process is an understatement. After many AI tool evaluations, trials, and getting numerous AI projects under our belts, we have become our clients’ go-to resource in leveraging AI for their benefit.

Taking Off On an AI Journey

In today’s business climate, clients demand greater efficiency when it comes to contract review for many complex deals and transactions. We have found that the combination of deep legal expertise, coupled with embracing carefully researched and vetted technology, is the most effective means of delivering high quality and timely review in an increasingly competitive marketplace.

Over the last few years, our firm has embarked on an exhaustive search for tools that will help us deliver more value to our clients. We spent the first 36 months of our AI journey reviewing nine different well-known contract review tools. Within the last 12-18 months, we have incorporated specific tools into the firm’s due diligence and contract management processes. We are particularly excited about our selection of Diligen, which we find to be a high-performance contract review platform. …

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