Articles, Alerts & Perspectives

The Legal Intelligencer

On Jan. 13, the Commonwealth Court rendered a decision in Honey Brook Estates v. Board of Supervisors of Honey Brook Township, 2016 Pa. Commw. LEXIS 52 (Pa. Commw. Ct. 2016), that reaffirmed a municipality’s obligation to act in good faith when processing subdivision and land development plans. The Commonwealth Court originally articulated the elements of this obligation in Raum v. Board of Supervisors, 370 A.2d 777 (Pa. Commw. Ct. 1977).

In Raum, a landowner submitted a subdivision plan for review and approval approximately 80 days before the township was scheduled to act on a proposed rezoning of the landowner’s property. Upon receipt of the landowner’s plan, the township did nothing but attempt to derail the landowner’s approval. Specifically, the township waited until the last possible moment (i.e., two days before enacting the proposed rezoning) to raise objections to the plans, then claimed there was insufficient time to consider modifications made in response to the township’s objections. Finding the township had a “deliberate, pervasive plan and intent to thwart” the landowner’s development and thus acted in bad faith, the Commonwealth Court ruled that the landowner was entitled to plan approval. In reaching this conclusion, the court stated: “A municipality has a legal obligation to proceed in good faith in reviewing and processing development plans. The duty of good faith includes discussing matters involving technical requirements or ordinance interpretation with an applicant, and providing an applicant a reasonable opportunity to respond to objections or to modify plans where there has been a misunderstanding or difference.”

Nearly 40 years later, in Honey Brook Estates, the court revisited the parameters of a municipality’s obligation to review development plans in good faith. There, a landowner purchased property in Honey Brook Township with the intent of constructing a 78-unit residential development. …

Midstream Business

Stunned by a judge’s advisory ruling in early March that could put many contracts with upstream partners up for renegotiation, midstream operators warily await a more definitive ruling in the Sabine Oil & Gas bankruptcy case as the realization sets in that a key advantage in putting deals together could be lost. The ruling by U.S. Bankruptcy Judge Shelley Chapman authorized Sabine to reject gathering and processing contracts with two midstream companies, Nordheim Eagle Ford Gathering LLC and HPIP Gonzales Holdings LLC because the E&P could not meet minimum production requirements and faced substantial financial penalties of up to $35 million.

The ruling by U.S. Bankruptcy Judge Shelley Chapman authorized Sabine to reject gathering and processing contracts with two midstream companies, Nordheim Eagle Ford Gathering LLC and HPIP Gonzales Holdings LLC because the E&P could not meet minimum production requirements and faced substantial financial penalties of up to $35 million.

The argument by the midstream companies that the “covenant running with the land” language in the contracts would preclude rejection by the debtor was put aside for another day, but the judge made it clear in a non-binding ruling that the agreements in question do not “run with the land” in her interpretation of Texas law.

“From a practical standpoint, what it says is, all these contracts that rely on acreage dedications are in play,” bankruptcy attorney David Ross of Babst Calland told Hart Energy. The hard line that midstream companies had assumed they could take, that the “covenant” language assured them of payment because the agreement was tied to the land and not to the owner, is now open to be challenged.

The PIOGA Press

On March 17, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of its long-awaited notice of proposed rulemaking (NPRM) for gas transmission and gathering pipelines. Under development for more than four years, the NPRM proposes significant changes to the regulations for gas pipeline facilities in 49 C.F.R. Part 192.

Read more.

Marcellus Business Central

On March 17, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed new regulations to update critical safety requirements for natural gas pipelines. The prior legislation, the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, expired at the end of FY 2015 but called for PHMSA to evaluate the need for additional damage prevention and inspection regulations.

The 549-page, pre-publication edition of the proposed regulations for gas transmission and gathering lines took over four years to make and includes four congressional mandates, one recommendation from GAO, and six recommendations from the National Transportation Safety Board (NTSB).

PHMSA’s new proposals include a climate action plan to reduce methane emissions and inspections for previously exempt gas pipelines built before 1970, such as the PG&E pipeline that exploded and started fires in San Bruno, CA in 2010, killing eight people and leveling 35 houses, and the pipeline explosion in 2011 in Allentown, Pa., which killed five people including a 4-month-old child. Both explosions were caused by leaks from old cast-iron natural gas distribution pipelines. NTSB’s investigation of the PG&E natural gas pipeline failure concluded that hydrostatic testing of grandfathered pipelines would have likely have prevented the explosion.

The proposed regulations would also broaden the scope of safety coverage by adding new assessment and repair criteria for gas transmission pipelines, including pipelines that pass through areas of medium population density where a failure could pose a serious risk to residents.

The significant growth in the nation’s production, usage and commercialization of natural gas is placing unprecedented demands on the nation’s pipeline system,” said U.S. Transportation Secretary Anthony Foxx.

“This proposal includes a number of commonsense measures that will better ensure the safety of communities living alongside pipeline infrastructure and protect our environment.”

The U.S. …

Pittsburgh Business Times

On March 17, 2016, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) released a long-awaited rulemaking proposal that could have a dramatic impact on the gas pipeline industry. More than four years in the making, the proposed rules would make significant changes to PHMSA’s pipeline safety standards by imposing new requirements for gas transmission and gathering lines. This ambitious proposal, issued in the waning days of the Obama Administration, seeks to address a number of issues raised by the Congress, other federal agencies, and the rapid development of energy infrastructure in the nation’s shale plays, particularly in the Marcellus and Utica regions.

Read more. 

Breaking Ground

On three different occasions over the past year, the Pennsylvania appellate courts have recently elaborated on the potentially broad reach of negligent misrepresentation claims a contractor may have against a design professional for a faulty design, despite the absence of a contract between them.

Read more.

Natural Gas Intelligence

One week after the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a pre-publication version of proposed rules governing natural gas transmission and gathering lines, experts agree that it will take some time for producers, pipeline companies, trade associations, state regulators and other stakeholders to sort through the federal agency’s proposals.

But early indications are that stakeholders will focus on the cost of implementing the proposed new rules, and determining how they affect existing state and federal regulations.

Employment Bulletin

February 25, 2016 the United States Department of Labor (DOL) published a notice of proposed rule making to implement Executive Order 13706 (found at: https://www.gpo. gov/fdsys/pkg/FR-2015-09-10/pdf/2015-22998.pdf), “Establishing Paid Sick Leave for Federal Contractors,” which requires certain federal contractors to provide their employees with up to seven days of paid sick leave annually, including paid leave allowing for family care (the “Proposed Rule”).

The 80-page proposal (found at: https://www.gpo.gov/fdsys/pkg/FR-2016-02-25/ pdf/2016-03722.pdf) will only be open for public comment through March 28, 2016. Thus, contractors or other interested parties are encouraged to act quickly if they wish to provide the agency with comments before the rule is finalized. To aid in this process and to preview the requirements soon to be imposed on federal contractors, we are providing an overview of the proposal’s key provisions.

Contracts Covered. The Proposed Rule lists four major contract categories to which the executive order applies: (1) procurement contracts for construction covered by the Davis-Bacon Act (the “DBA”), (2) services contracts covered by the McNamara-O’Hara Service Contract Act (the “SCA”), (3) concessions contracts, and (4) contracts in connection with federal property or lands and related to offering services for federal employees or the public. The Proposed Rule states the Order does not apply to contracts worth $3,000 or less, where wages are governed by the Fair Labor Standards Act (the “FLSA”) – nor will it apply to contracts for the manufacturing or furnishing of materials, supplies or equipment.

The rule will apply to new contracts or replacements for expiring contracts with the federal government that result from solicitations issued on or after January 1, 2017. And the “contractors” covered by the rule include not only the prime contractor, but “all of its subcontractors of any tier on a contract with the Federal Government.”

Employees Covered. …

The American Oil & Gas Reporter

PITTSBURGH—Managing flowback, produced fluids, and other oil and gas wastewater continues to be a significant industry concern in light of ongoing federal and state regulatory activity.

In the Appalachian Basin’s Marcellus Shale play, this is being exacerbated as a result of fewer newly drilled wells being available to reuse flowback and produced fluids because of low gas prices.

Read more.

The PIOGA Press

On February 5, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) published an advisory bulletin in the Federal Register on the safety of underground gas facilities. 81 Fed. Reg. 6334-6336. Citing several incidents at underground gas storage facilities, including the ongoing natural gas leak at a facility in the Porter Ranch area of Los Angeles, California, PHMSA’s advisory bulletin recommends operators of these facilities take measures to ensure public safety and the protection of the environment.

Read more.

Pennsylvania Business Central

For more than 20 years, the Pennsylvania Business Central has entered the new year by celebrating the top 100 people in its expanding readership that have accomplished both personal and financial success with an honest sense of direction imbued in them by mentors, personal experiences, failures and successes.

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The Legal Intelligencer

(by Blaine Lucas and Alyssa Golfieri)

In an effort to provide better safeguards to surface and mineral rights owners who might not otherwise become aware of proposed municipal actions that could affect their property interests, such as a municipality’s consideration and adoption of a new zoning ordinance or zoning ordinance amendment, Gov. Tom Corbett signed Act 36 of 2013 into law July 2, 2013. Act 36, which took effect Aug. 31, 2013, amended the Pennsylvania Municipalities Planning Code to add a requirement that municipalities provide “mailed notice” or “electronic notice” of public hearings concerning proposed zoning ordinances and zoning ordinance amendments to the owners of tracts or parcels of land or the owners of mineral rights in tracts or parcels of land located within their borders upon request by those owners.

Prior to the enactment of Act 36, the MPC imposed upon municipalities a number of notice and distribution requirements for the adoption of land use ordinances. For zoning ordinances and zoning ordinance amendments, these requirements included: (1) a public hearing; (2) publication of notice of the hearing for two successive weeks in a newspaper of general circulation in the municipality, with the first publication being no more than 30 days and the second publication being no less than seven days from the date of the hearing; (3) publication of notice of the proposed enactment of the ordinance at least once no more than 60 nor less than seven days prior to passage, with either publication of the full text or a summary of the proposed ordinance, in which case copies also must be provided to the newspaper publishing the notice and to the county law library; (4) transmittal of a copy to the county planning agency for review and comment at least 30 days prior to the public hearing; …