Articles, Newsletters & Advisories

April 14, 2021

West Virginia Legislature Enacts Renewable Energy Site Reclamation Law

(by Christopher (“Kip”) Power)

In an effort to ensure that owners of solar and wind energy facilities (“renewable energy facilities”) do not decommission production facilities without completing proper reclamation, on April 10, 2021, the West Virginia Legislature enacted Senate Bill 492, creating the West Virginia Wind and Solar Energy Facility Reclamation Act (as new Article 32 of Chapter 22 of the West Virginia Code (“Reclamation Act”)). The Reclamation Act (effective July 9, 2021) generally requires that an owner of a wind generation facility or a solar generation facility submit certain information to the West Virginia Department of Environmental Protection (“DEP”), including the date the facility commenced operation; a proposed decommissioning plan (prepared by a “qualified independent licensed professional engineer”); and a cost estimate for execution of that plan. The DEP will use that and other relevant information in preparing (or approving) a decommissioning plan for the site and in determining an appropriate reclamation bond amount for the facility.

Renewable energy facilities with a nameplate capacity of less than 1.0 megawatts are excluded from coverage. In addition to that limitation, the following are exempt from the application and bonding requirements of the statute: (1) those facilities owned by entities that are “regulated public utilities” who can convince the Public Service Commission (“PSC”) and DEP that they have sufficient “financial integrity and long-term viability” to obviate the need for a reclamation bond; (2) facilities whose owners are legally bound by a decommissioning agreement “based upon a qualified independent party” executed prior to July 9, 2021; and (3) facilities that are subject to a siting certificate or other authorization from the PSC that was conditioned on execution of a decommissioning agreement prior to July 9, 2021 (as long as the owner is in compliance with the agreement, the facility has not been sold...

April 13, 2021

Water law update: Five topics to watch in 2021

The PIOGA Press

(by Lisa Bruderly)

State and federal water law permitting can pose significant obstacles for natural gas construction projects that impact waterbodies (e.g., wells pads, access roads and pipelines). The following five new and proposed regulatory changes are likely to significantly affect project design and construction in Pennsylvania.

1. Waters of the United States (WOTUS)

The definition of WOTUS identifies which waters are federally regulated under the Clean Water Act (CWA) and therefore determines when a federal permit is required for projects that involve dredging or filling of a waterbody (i.e., a Section 404 permit). The current WOTUS definition was promulgated in 2020 under the Trump administration. It has been criticized by environmental groups as federally regulating fewer types of waterbodies than the WOTUS definition promulgated under the Obama administration. For example, ephemeral streams are not regulated under the current WOTUS definition. President Biden has already signaled he intends to change the current WOTUS definition. In his first week in office, he asked the U.S. Army Corps of Engineers and the U. S. Environmental Protection Agency (EPA) to consider revising or rescinding the current definition. He has also asked courts to stay judicial challenges to the current WOTUS definition while his administration reconsiders the issue.

The Biden administration is expected to eventually propose its own definition of WOTUS, which will undoubtedly be more expansive than the current definition and require more projects to obtain federal CWA permitting. Among other things, the Biden administration’s definition of WOTUS is likely to regulate waters (including ephemeral streams) that are considered to have a “significant nexus” with traditionally navigable waters. This definitional change is expected to extend the time and increase cost of permitting for many natural gas projects.

2. Nationwide Permits (NWPs)

In Pennsylvania, qualifying projects impacting federally regulated waters may be eligible for one of two...

April 8, 2021

Winds of Change: Biden’s Impact on Superfund

The Legal Intelligencer

(by Alana Fortna)

Introduction

The great Bob Dylan sang, “may you have a strong foundation when the winds of changes shift.” His song may have been released nearly 50 years ago, but his lyrics ring true today in many facets of life, even environmental law and policy. President Joe Biden stayed true to his word on combatting climate change when he signed an executive order before the dust settled on his luggage in the White House. In this article, I discuss these policy changes and my opinions on what this could mean for Superfund sites.

Executive Order on Tackling the Climate Crisis at Home and Abroad

On Jan. 27, Biden signed an executive order regarding climate change and related environmental justice concerns. The executive order speaks to taking a “governmentwide” approach to the climate crisis.

Section 202 establishes the White House Office of Domestic Climate Policy headed by a National Climate Advisor with a National Climate Task Force consisting of Executive Branch agency heads. Pursuant to Section 211, within 120 days of the order, each federal agency must submit a draft action plan to the task force describing efforts to bolster adaption and increase resilience to climate change. To ensure follow-through, agencies must submit annual progress reports on their implementation efforts.

Section 216 provides that within 90 days of the order, the Secretary of the Interior must submit a report to the task force recommending steps to take, working with state, local, Tribal, and territorial governments, agricultural and forest landowners, fishermen, and other stakeholders, to conserve at least 30% of our lands and waters by 2030. The executive order also calls for the Secretary of Commerce to “collect input from fishermen, regional ocean councils, fishery management councils, scientists, and other stakeholders on how to make fisheries and protected resources more resilient to...

April 1, 2021

How alternative legal service providers can add efficiencies, create value

Smart Business 

(by Sue Ostrowski featuring Chris Farmakis)

With companies consistently scoring law firms an average of just 2 to 3 (on a scale of 10) on the value they receive for legal services, businesses and firms alike are increasingly employing the value-added services of alternative legal service providers (ALSPs).

“Alternative legal service providers are a legitimate avenue to unlock enhanced value and services for clients, and the use of this model is increasing,” says Christian Farmakis, shareholder and chairman of the board at Babst Calland, and president of its affiliated ALSP, Solvaire. “The intersection of the rise in ALSPs, coupled with the use of technology, allows ALSPs to increase efficiencies and reduce legal costs.”

Smart Business spoke with Farmakis about how ALSPs can help businesses get more value from their legal providers.

Why is the use of ALSPs on the rise?

Businesses are continuing to face unprecedented financial and legal challenges. As a result, companies are placing constant demands and pressure on all vendors, including their legal firms, to deliver more value. Well-run ALSPs allow in-house counsel and law firms to work more efficiently and focus on higher-priority work.

The traditional law firm model is based on billable hours. And while businesses generally like the quality of service they receive, they don’t believe they are always getting value based on the type of legal work being performed. While it makes sense to assign complex and specialized legal work to seasoned associates or law firm partners, other services, such as discovery, diligence and technology-enabled tasks should be delegated to others with specific skills and defined pricing models. This is where ALSPs come in. Both clients and their law firms see the value proposition in ALSPs, which are increasingly gaining traction, moving beyond ‘just’ a cost-savings measure to becoming a true industry service partner.

How do ALSPs function?

ALSPs...

March 25, 2021

‘What’s Up, John?’: A Refresher on the ‘Upjohn’ Standard When Interviewing a Corporate Client’s Employees

The Legal Intelligencer

(by Alex Farone)

As outside counsel for a company, a concern is always whether the corporation will be named as a respondent or defendant in litigation. When those situations do arise, counsel should pay particular attention to the nuances of the attorney-client privilege when beginning an investigation. Many attorneys make assumptions regarding the applicability of the attorney-client privilege when dealing with the company’s employees. Those assumptions, in certain circumstances, can result in discoverable communications. Because in-house counsel serve a dual role of providing legal advice as well as business advice, a more careful analysis must be given to their communications with employees. Therefore, this article focuses solely on typical communications to and from outside counsel when performing an investigation.

In Pennsylvania, the attorney-client privilege operates as a two-way street to protect client-to-attorney and attorney-to-client communications made for the purpose of obtaining or providing legal advice. When the client is a company, do all employees count as an extension of the client such that conversations with them would be privileged? In most situations, they do not.

For a corporate client, the attorney-client privilege extends to communications between the attorney and the corporation’s agents or employees authorized to act on the corporation’s behalf. This is typically interpreted as directors, officers and management employees.

Until the U.S. Supreme Court’s decision in Upjohn v. United States, 449 U.S. 383 (1981), some courts used to adhere to the so-called “control group test,” a similar but restricted version of the “authorized to act” standard used in Pennsylvania. The control group test only applied the privilege to communications made to officers or agents of the corporation responsible for directing the corporation’s actions in response to legal advice. However, the control group test overlooks the fact that the privilege is also meant to protect information given to the attorney. In rejecting...

March 18, 2021

PADEP Publishes Final Revised Policy on Civil Penalty Assessments for Mining Coal

The Legal Intelligencer

(by Dan Hido)

On Feb. 27, 2021, the Pennsylvania Department of Environmental Protection (PADEP) published the final revision to the technical guidance document (TGD) No. 562-4180-306, titled “Civil Penalty Assessments for Coal Mining Operations,” 51 Pa.B. 1083 (Feb. 27, 2021). The previous version of the TGD was last updated in 2005. The PADEP first published draft revisions to the TGD on May 4, 2019, and subsequently re-published an updated draft on Oct. 3, 2020 because substantial changes were made in response to public comments.

The TGD sets the procedure and formula that the PADEP will generally follow in assessing penalties against coal mining operators for violations of Pennsylvania’s coal mining laws and the Clean Streams Law. The revised TGD makes several significant changes to how such penalties are calculated, including new, separate procedures for assessing penalties for water quality violations and revisions to the calculation of penalties for all other violations based on the seriousness of the violation and the culpability of the operator.

New Procedures for Water Quality Violations

The most significant change to the TGD is the addition of new procedures for assessing civil penalties for water quality violations under Section 605 of the Clean Streams Law, 35 P.S. Section 691.605(b). Such violations include violations of NPDES permit effluent limitations, and under the TGD each parameter exceeding an effluent limitation may constitute a separate violation. These procedures generally follow the 2005 TGD’s existing formula applicable to all violations, which is based on seriousness of the violation, culpability of the operator, costs to the commonwealth, savings to the violator, violation history and speed of compliance. However, the application of these factors will evaluate components specifically relating to water quality, such impacts to water resources or degree of exceedance of effluent limitations.

For instance, the seriousness component is based on several sub-components. First,...

March 12, 2021

RMMLF Mineral Law Newsletter – Pennsylvania – Oil & Gas

RMMLF Mineral Law Newsletter

(by Joe Reinhart, Sean McGovern and Casey Snyder)

Governor Wolf Vetoes Conventional Oil and Gas Wells Act

On November 18, 2020, Senate Bill 790 (SB 790), the Conventional Oil and Gas Wells Act, sponsored by Sen. Scarnati (R-Jefferson), was presented to Governor Tom Wolf for signature. Governor Wolf vetoed the bill on November 25, 2020. See Governor Wolf’s Veto Letter for SB 790 (Nov. 25, 2020). SB 790 would have set a legislative framework for regulations for the conventional oil and gas industry in Pennsylvania. See Memorandum from Sen. Scarnati to All Senate Members, “Conventional Oil and Gas Wells Act” (June 6, 2019). In his veto letter, Governor Wolf acknowledged the difficulty in regulating conventional and unconventional operations under Pennsylvania’s current program, which was updated by law in 2012 and by regulations for the unconventional industry in 2016. These updates were tailored to the new unconventional industry developing in the state, and placed new requirements on the conventional industry. Proposed regulations for the conventional industry were not promulgated in 2016 after the state legislature passed legislation requiring rules for the conventional industry to be promulgated separately from the unconventional rulemaking. See Pennsylvania Grade Crude Development Act, 58 Pa. Stat. §§ 1201–1208.

Governor Wolf cited several reasons for vetoing the bill and why he believed it posed a risk to the public health and environment. He characterized the bill as including “roll backs,” stating that protections for drinking water, public resources, spills, and erosion and sediment control are weakened for the conventional industry, which he alleged violates regulations at a rate “three to four times” higher than the unconventional industry. Additionally, he stated that several parts of the bill were “likely” unconstitutional under the Pennsylvania Constitution.

Introduced in June 2019, SB 790 would create environmental rules and reporting requirements specific to...

March 12, 2021

RMMLF Mineral Law Newsletter – Pennsylvania – Mining

RMMLF Mineral Law Newsletter

(by Joe Reinhart, Sean McGovern, Daniel Hido and Gina Falaschi)

Significant Public Participation Regarding PADEP’s RGGI Rule

Pennsylvania’s Environmental Quality Board (EQB) published its proposed Regional Greenhouse Gas Initiative (RGGI) CO2 Budget Trading Program rule in the Pennsylvania Bulletin on November 7, 2020, which opened the public comment period for the rule. See 50 Pa. Bull. 6212 (Nov. 7, 2020). EQB hosted a number of virtual public hearings in December 2020 and accepted comment until January 14, 2021. EQB received more than 13,000 public comments on the proposed rule. Currently, the Independent Regulatory Review Commission (IRRC) is reviewing the proposed CO2 Budget Trading Program rule. The IRRC reviews regulations under the Regulatory Review Act to determine whether a proposed regulation is consistent with the authorizing statute and whether the regulation is in the public interest. While the IRRC has access to all public comments submitted to EQB regarding the proposed CO2 Budget Trading Program rule, the IRRC has also received a significant number of comments directly from legislators and the public. The IRRC’s comments, recommendations, or objections on the proposed regulation were due to the Pennsylvania Department of Environmental Protection by February 16, 2021.

A final regulation is expected later in 2021, at which time EQB will also release its responses to the public comments submitted on the proposed rule. The rule is tentatively scheduled to take effect in January 2022. For detailed descriptions of the content and implementation of the proposed rule, see Vol. XXXVII, No. 4 (2020), Vol. XXXVII, No. 3 (2020), Vol. XXXVII, No. 2 (2020), Vol. XXXVII, No. 1 (2020), Vol. XXXVI, No. 4 (2019) of this Newsletter.

Ozone Transport Commission Recommends Daily NOx Emission Limits at Coal-Fired Power Plants in Pennsylvania

On June 8, 2020, the U.S. Environmental Protection Agency (EPA) received a recommendation from the Ozone...

March 11, 2021

RMMLF Water Law Newsletter – Pennsylvania

RMMLF Water Law Newsletter

(by Lisa Bruderly)

CWA § 404 Nationwide Permits (NWPs)

On September 15, 2020, the U.S. Army Corps of Engineers (Corps) published proposed revisions to certain nationwide permits (NWPs) under section 404 of the Clean Water Act (CWA), 33 U.S.C. § 1344, for discharges of dredged and fill material into waters of the United States. See Proposal to Reissue and Modify NWPs, 85 Fed. Reg. 57,298 (proposed Sept. 15, 2020). At that time, the Corps proposed to reissue all NWPs, rather than only reissuing those with proposed changes. However, on January 13, 2021, the Corps published the final NWP rule, reissuing only 12  existing NWPs, issuing four new NWPs, and reissuing the NWP general conditions and definitions with limited modifications. See Reissuance and Modification of NWPs, 86 Fed. Reg. 2744 (Jan. 13, 2021). The 16 reissued/issued NWPs are effective on March 15, 2021, and will expire on March 14, 2026.

Of particular interest to the oil and natural gas industry is the Corps’ decision to divide the existing NWP 12 (utility line activities) into three NWPs, depending on the type of utility line: oil and natural gas pipeline activities (NWP 12), electric utilities and telecommunications (NWP 57), and utility lines for water and other substances (NWP 58).

State/Regional NWP Conditions

On September 30, 2020, the Corps’ Baltimore, Philadelphia, and Pittsburgh Districts proposed, in SPN-20-62, draft state/regional conditions for the proposed NWPs, as well as a list of “Final 2020 Nationwide Permit Suspensions” for Pennsylvania, among other states/geographic locations. The proposed regional conditions for Pennsylvania pertained to 22 NWPs and six general conditions, including the requirements for completing a pre construction notification (PCN). The Corps’ Districts asked for comments on the proposed regional conditions and on the need for additional regional conditions to help ensure that the adverse environmental effects...

March 11, 2021

Babst Calland named to Pennsylvania Business Central’s Top 100 Organizations

Babst Calland has been named to this year's Pennsylvania Business Central's "Top 100 Organizations" list and profiled in its Signature Top 100 issue. Nominations were taken throughout the publication's 23-county coverage area, and the final organizations were selected by an editorial committee due to their positive impacts in the business community of central Pennsylvania.

For the full list, click here.

March 11, 2021

State Clean Transportation Initiatives

Environmental Law Reporter

The United States is experiencing a wave of state-led clean transportation initiatives that are gaining substantial momentum. Faced with insufficient federal action, states started focusing their efforts on the sector that produces the largest percentage of greenhouse gas: transportation. On November 10, 2020, the Environmental Law Institute and Babst Calland co-hosted a webinar that explored these initiatives, their potential impact, and funding sources. Click here for a transcript of the discussion, which has been edited for style, clarity, and space considerations.

Copyright © 2021 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.

March 9, 2021

Emerging Technologies Profile: Ashleigh H. Krick

Emerging Technologies Profile

What do you do? As a member of the Firm’s Emerging Technologies practice, I support the needs of clients on regulatory, intellectual property, and data privacy and security matters. With the enactment and up-tick in enforcement of the EU’s General Data Privacy Regulation and the California Consumer Privacy Act, I have been assisting a wide range of clients in complying with these laws. I am also a member of the Transportation Safety Group, where I work with clients on pipeline, hazardous materials, and motor vehicle safety matters. I am also active in the autonomous mobility and renewables industries, where I advise clients on a myriad of topics as they work to develop and commercialize these technologies.

Why do you do what you do? In high school, I took an environmental science class that piqued my interest in environmental and energy law given that energy plays such an important role in our society. I found the vast array of resources and technologies available to produce energy intriguing and exciting. I interned with the Federal Regulatory Energy Commission out of law school and that led to a position with the Firm in the environmental, transportation and pipeline safety practice groups. I am also part of the Firm’s new Renewables practice group. There are so many more energy technologies being developed today than when I was in high school, and it’s exciting to be a part of that industry.

Describe a client project that you are proud of. I assisted in developing a strategy for an autonomous vehicle company to deploy a Level 5 (fully autonomous) vehicle. This six-month project involved a complete review of federal statutory and regulatory structures, which were developed in a time where autonomous vehicles were not even contemplated. It was an interesting learning experience to engage with...

March 5, 2021

Energy Perspectives in a New Administration

Pittsburgh Business Times

(by Daniel Bates featuring Joe Reinhart, Jean Mosites and Keith Coyle)

An overabundance of domestic fossil fuels, coupled with pandemic-driven stay-at-home orders and other travel restrictions, already had dampened the growth prospects of the nation’s oil-and-gas industry through most of 2020. And that was before the presidential election.

Now President Joe Biden, in his first months in office, has set into motion a climate change agenda with major proposed changes to the nation’s energy policies and environmental regulations. Amid all of this anticipated change, it is vital to consider the forewarnings, the risks, and the legal implications for the energy industry. Having a preventative or even a proactive mindset about the legal and regulatory implications for any energy business may be one of the most important steps that can be taken at this very dynamic time.

So what can the energy industry – and local economies – expect amidst a charged political climate aiming to increase environmental regulations and usher in an era of “green,” renewable energy?

“De-fossilizing” the country – political emphasis on renewable energy

“I think most people are aware of the fact that there has been a significantly different perspective brought to Washington than from the Trump administration,” said Attorney Joseph Reinhart, a shareholder with Pittsburgh law firm Babst Calland who serves as co-chair of the firm’s Energy and Natural Resources practice. “For example, we had the Trump administration putting into place executive orders that were intended to expedite permitting of infrastructure to foster the domestic development of oil and gas and coal.

“You have almost the exact opposite going on now, with the regulatory freeze,” he continued. “You’ve got...

March 3, 2021

EPA heightens aftermarket defeat device enforcement

Smart Business

(by Sue Ostrowski featuring Julie Domike and Gina Falaschi)

As vehicle emissions continue to represent the largest contributor to air pollution, the Environmental Protection Agency is becoming more vigilant about prosecuting manufacturers of the parts designed to decrease the effectiveness of emissions controls, and those who use them. And if your business has these parts installed on your vehicles or other equipment, you could be at risk of fines, or jail time — even if you’re not aware that tampering has occurred.

“The EPA has been, and will continue to, look seriously at tampering with vehicle emissions controls and has issued guidance to clarify its approach and requirements,” says Julie Domike, shareholder at Babst Calland. “The transportation sector is a huge source of emissions, and the EPA is signaling it is working with the states to step up enforcement, taking a closer look at vehicles that have been tampered with for the purpose of increasing fuel economy and decreasing down time.”

Smart Business spoke with Domike and Gina Falaschi, an associate at Babst Calland, about the crackdown on the use of aftermarket defeat devices and how businesses can ensure they remain in compliance with the Clean Air Act.

Why is the EPA increasing its enforcement of tampering and the use of defeat devices?

The EPA reports that more than 550,000 diesel trucks have had emissions controls tampered within the last 10 years, increasing emissions equating to having 9 million additional diesel vehicles on the road. With a goal of reducing emissions, pursuing illegal tampering is much more palatable to states than limiting the use of vehicles. While the EPA has arguably the most robust enforcement authority for new vehicles and engines, it is looking to states and associations that deal with air quality issues to take on cases involving tampering with vehicles...

February 22, 2021

Has COVID-19 affected the value of your commercial real estate?

The pandemic and the recession have had an unwelcome impact on the market value of many types of commercial real estate.  In particular, properties used for entertainment, hospitality, retail, restaurants, office complexes, nursing homes and assisted living facilities may have assessments that are higher than the actual current market value of the real estate.

March 31, 2021 is the deadline to assert an annual real estate tax assessment appeal in the state of Ohio and in Allegheny County, Pennsylvania.  The deadlines for the rest of Pennsylvania’s 67 counties fall between August 1st and October 4th.

If you believe that your property may be over-assessed, it is worthwhile evaluating whether a tax assessment appeal is warranted.  Babst Calland has a strong track record of assisting commercial property owners with real estate tax assessment appeals.  We would be happy to discuss your property’s performance, review the current assessment, and give you our thoughts as to whether an appeal may be warranted.

For more information, please contact Peter Schnore at pschnore@babstcalland.com or Meghan Moran at mmoran@babstcalland.com.

February 17, 2021

PHMSA publishes gas regulatory reform final rule

The PIOGA Press

(by Keith Coyle and Ashleigh Krick)

On January 11, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final rule amending the gas pipeline safety regulations at 49 C.F.R. Parts 191 and 192. Adopted as part of the Trump administration’s efforts to reduce or eliminate unnecessary regulatory burdens, PHMSA estimates the final rule will result in approximately $130 million in annualized cost savings for pipeline operators. Although the effective date of the final rule is March 12, the agency provided a deferred compliance date of October 1, 2021, for the new amendments.

Additional information about the final rule is provided below.

Distribution integrity management program exemptions and farm taps

Consistent with the policy announced in PHMSA’s March 2019 Exercise of Enforcement Discretion, the final rule provides operators with the option to maintain pressure regulating devices on farm taps under either the distribution integrity management program (DIMP) requirements or 49 C.F.R. § 192.740. The final rule exempts farm taps originating from unregulated production and gathering pipelines from the DIMP requirements, the overpressure protection inspection requirements in § 192.740 and the annual reporting requirements in Part 191. The final rule does not amend PHMSA’s regulations to provide additional clarity in determining what qualifies as a farm tap or where production, gathering or transmission piping ends and distribution service line piping begins in farm tap configurations. The agency stated that these definitional issues will be addressed in a guidance document that remains under development or in a future rulemaking proceeding. In the preamble to the final rule, PHMSA emphasized that any portion of a farm tap originating from an unregulated pipeline that meets the definition of service line must still comply with all applicable Part 191 and 192 requirements. (Editor’s note: For background on PHMSA’s farm tap guidance, see the...

February 11, 2021

Venture debt: Determining when it’s the right path for your business

Smart Business

(by Sue Ostrowski featuring Michael Fink)

For startup companies lacking the cash flow or liquid assets to obtain a traditional bank loan, venture debt could be the answer to help elevate them to the next level.

“Startups often lack many of the characteristics that would give traditional lenders comfort that a regular commercial loan would be a good deal for them,” says Michael Fink, attorney at Babst Calland. “Venture debt can be an alternative to help bridge the gap to a company’s next valuation.”

Smart Business spoke with Michael about how taking on venture debt can keep a business moving forward without decreasing its valuation.

What is venture debt, and how is it structured?

At its core, venture debt looks similar to other commercial debt a company may incur; it may be structured as a term loan or line of credit, or an option to draw on either. The startup generally may choose the facility it feels best fits its needs.

However, because it’s a riskier loan for lenders, venture debt terms are generally more favorable to the lender than those of traditional loans. Borrowers can expect an interest rate higher than the prime rate (5 to 15 percent being common), more lender control rights and expanded negative covenants, prohibiting, for example, making large purchases or divesting a line of business without the lender’s consent.

Venture debt’s availability is based primarily on a company’s ability to raise future equity rounds, so venture debt lenders often require a small equity component in exchange for the higher risk the lender is taking on. For example, the lender may receive a warrant to purchase either common equity or the preferred equity to be issued in the next fundraising round, typically at a discount.

When should a company consider pursuing venture debt?

Venture debt typically isn’t available until a company has...

February 11, 2021

Court: Township Has No Standing to Enforce Neighbor’s Conservation Easement

The Legal Intelligencer

(by Anna Jewart and Krista-Ann Staley)

Zoning regulations, although important, are not the sole restrictions on land use. Property owners and a variety of entities may agree to impose additional private restrictions on specific pieces of land. These private restrictions can create confusion regarding who, between the parties to the agreement and the municipality, has the authority to interpret and enforce their terms. The Pennsylvania Commonwealth Court recently issued a detailed, albeit nonprecedential, opinion addressing this type of scenario in Naylor v. Board of Supervisors of Charlestown Township, No. 659 C.D. 2018 (Pa. Cmwlth. Jan. 7, 2021). In Naylor, the court addressed a decades-long disagreement over the scope of a conservation easements. Among its holdings, the court concluded a township did not have standing to enforce a private conservation easement, even when it owned a separate parcel subject to the same easement. Naylor is a good reminder that municipal regulations and private agreements are distinct matters with independent enforcement mechanisms.

Easements are a common form of private land use restriction. An easement is a nonpossessory interest of a holder in real property, imposing limitations or affirmative obligations on property called the “servient” estate. Conservation easements are designed for certain “conservation” purposes, such as protecting the natural or scenic values of real property; assuring its availability for agricultural, or recreational use; protecting, or managing the use of natural resources; or maintaining land, air, or water quality.

In Pennsylvania, conservation easements receive certain statutory protections under the Conservation and Preservation Easement Act, 32 P.S. §§5051 et seq., (Easement Act). Enacted in 2001, the Easement Act sets forth requirements for the interpretation, construction and enforcement of conservation easements. Conservation easements created before the Easement Act are typically reviewed under the common law rules of construction, the same rules applicable to contract interpretation.

Naylor involved a long history...

February 3, 2021

Jean Mosites named to Pennsylvania Business Central 2021 Top 100 People

PA Business Central

This has been a year like no other! Our annual Top 100 People edition highlights the vibrant economic and social life of central Pennsylvania by honoring the people who make it happen. 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. We are fascinated by the impact a single individual can have on their workplace, their community and the lives of those around them. The stories of these individuals can provide instruction, inspiration and the motivation to raise our own standard of excellence. That is why we take great pride in bringing you Pennsylvania Business Central’s Top 100 People for 2021!

As always, we reached out to community leaders, local chambers of commerce, and you, our loyal readers, to identify those individuals whose unique contributions have set them apart as leaders. We received a wealth of nominations that reflect the rich diversity of central Pennsylvania and its business community. So many deserving nominations in such a challenging year, that we had to expand our list of honorees – and so we are proud to honor 120 outstanding leaders in this year’s edition!

In selecting this year’s honorees, we wanted to show the full spectrum of leadership – from the small entrepreneur to the CEO of a large corporation – that helps shape our communities and our lives. And while every story is unique, we think you’ll find that these honorees share a dedication to hard work, dynamic...

January 28, 2021

OSHA in 2021: Planning for the Year Ahead

The Legal Intelligencer

(by Brian Lipkin)

In 2021, employers can expect a few significant developments from the Occupational Safety and Health Administration (OSHA):

COVID-19 Standards. Currently, to decide whether an employer has taken proper COVID-19 measures, OSHA typically applies the “general duty clause,” which is the “catch-all” section of the Occupational Safety and Health Act. The general duty clause requires a workplace free from recognized hazards, to protect employees from death or serious physical harm.

Currently, OSHA also applies its existing standard on respiratory protection. This standard focuses on whether an employer has identified appropriate protective equipment, issued it to employees, and trained them to use and maintain it properly.

So far, there are no OSHA standards specific to COVID-19. In the near future, we expect that to change.

On Jan. 21—his first full day in office—President Joe Biden signed an executive order on protecting worker health and safety. Biden ordered the Secretary of Labor to consider issuing emergency COVID-19 standards by March 15. In particular, Biden directed the Secretary of Labor to consider ordering employees to wear masks in the workplace.

We expect the new standards will require employers to develop written plans to limit COVID-19 exposures in the workplace. These plans will likely require employers to identify potential risks, and outline mitigation strategies.

Biden also ordered the Secretary of Labor to issue updated COVID-19 guidance for employers by Feb. 4.

OSHA will release the new standards and guidance on its website at osha.gov/coronavirus.

Targeted Enforcement. Currently, OSHA prioritizes two types of workplaces for COVID-19 enforcement: hospitals and health care providers that treat COVID-19 patients; and workplaces with high numbers of complaints or known COVID-19 cases.

These priorities are consistent with the breakdown of complaints OSHA has received. As of Jan. 24, OSHA had received the most complaints on the health care industry: a total of 2,939. Retail stores, restaurants,...

January 28, 2021

EPA Releases and Requests Public Comment on Interim Guidance for Destroying and Disposing of Certain PFAS

Environmental Alert

(by Matthew Wood)

On December 18, 2020, the U.S. Environmental Protection Agency (EPA) released for public comment interim guidance on the destruction and disposal of per- and polyfluoroalkyl substances (PFAS) and materials containing PFAS (Interim Guidance; available for download here).  PFAS are a large group of manmade chemicals that have been used in wide-ranging consumer, commercial, and industrial applications since the 1940s and more recently have been discovered in various environmental media (e.g., drinking water sources), plants, animals, and humans.  Because PFAS do not tend to break down naturally, and evidence suggests that exposure to PFAS chemicals can lead to adverse health effects, developing methods to treat, dispose of, and destroy PFAS has been viewed by stakeholders as a necessary step to address PFAS in the environment.

The Interim Guidance, which EPA was statutorily obligated to publish within one year of the enactment of the National Defense Authorization Act for Fiscal Year 2020 (FY20 NDAA), discusses certain treatment and disposal technologies that may be effective in destroying or disposing of PFAS and PFAS-containing materials.  More broadly, it represents another formal step EPA has taken to address PFAS in the environment, coming nearly two years after EPA released its PFAS Action Plan.

In addition to providing a background on PFAS, the Interim Guidance generally covers four topics: (1) the PFAS and PFAS-containing materials to which it applies; (2) the applicable destruction/disposal technologies; (3) considerations for potentially vulnerable populations living near destruction/disposal sites; and (4) ongoing and planned research and development.  The Interim Guidance is based on currently available research and science, which is limited.  As such, EPA has identified knowledge gaps, uncertainties, and research areas that, if resolved, would inform future recommendations.  As EPA continues to conduct research and accumulate information, the regulated community can expect the agency to revise...

January 27, 2021

Explore Solvaire: Babst Calland’s Affiliated Alternative Legal Service Provider

We understand the unprecedented challenges facing our organizations. Now, more than ever, we realize how critical it is for our clients to seek cost efficiencies while making legal, operational, financial and ‘game changing’ business decisions.

Solvaire, Babst Calland’s affiliated Alternative Legal Service Provider – with its enhanced AI-enabled processes and machine learning capabilities – can help to increase efficiency, while lowering project costs. For more than 21 years, Solvaire has effectively designed, performed, and implemented complex buy-side diligence projects, discovery projects and tailored document management solutions. Solvaire’s track record and satisfied clients speak for themselves.

Check out Solvaire’s new website and request a free consultation to learn how Solvaire can work with your team to provide superior diligence, discovery and document management services – on time, with accuracy and consistency and within a budget that provides price certainty.

To stay informed about Solvaire news, latest case studies and content, as well as innovative business and technology enhancements, sign up for updates here.

Explore Solvaire, and unlock the value it provides.

On behalf of Babst Calland and Solvaire, we look forward to serving you on your next project.

Chris Farmakis Chairman, Babst Calland President, Solvaire

January 25, 2021

California Announces the Opening of the Vehicle Fleet Reporting System for Entities with Operations in the State

Environmental Alert

(by Julie Domike and Gina Falaschi)

On January 15, 2020, the California Air Resources Board (CARB) announced the opening of the reporting system for the Large Entity One-Time Reporting Requirement for vehicle fleet owners. This reporting requirement was passed by CARB as part of its June 2020 adoption of the Clean Trucks Rule. As the California Office of Administrative Law (OAL) has not yet approved the regulation, businesses may voluntarily provide information at this time if they wish to begin the reporting process ahead of the April 1, 2021 deadline.

The Large Entity One-Time Reporting Requirement seeks to gather information about how medium- and heavy-duty vehicles are being operated by individual fleets and entities in order for CARB to: (1) determine where zero-emission vehicles may now be suitable; (2) identify the barriers to adoption of zero-emission vehicles; and (3) define necessary vehicle characteristics to meet different fleet needs.

Many businesses, organizations, and government entities must comply with this requirement on or before April 1. An entity must report if it operates a facility in California and: (1) had more than $50 million in revenues in 2019 from all related subsidiaries, subdivisions, or branches, and has at least one vehicle; (2) owns 50 or more vehicles; (3) dispatches 50 or more vehicles into or throughout California; or (4) is a government agency (federal, state, local, and municipalities) that has at least one vehicle. This reporting requirement applies to owners of on-road vehicles with a manufacturer gross vehicle weight rating (GVWR) greater than 8,500 pounds; light-duty vehicles, such as cars and small pick-ups, are not covered by this requirement.

The report must contain general information about the entity and its operations, as well as information about the vehicles it owns and operates. This includes basic information about the vehicles (including off-road yard...

January 15, 2021

Navigating business continuity in a new era

Pittsburgh Business Times

Nothing highlights the urgent need for business continuity planning like a devastating, prolonged global pandemic.

Without question, this global pandemic has forced businesses, large and small, to face and adapt to a new normal. They've had to deal with state­ mandated closures, layoffs, employee safety threats, new remote work environments, cybersecurity concerns, supply chain interruptions, real estate lease adjustments, and a myriad of other serious business continuity challenges.

Many of those same issues will haunt the business community this year and possibly beyond, even amidst what one might hope would become a strong post-pandemic period of recovery. And that, said Don Bluedorn, managing shareholder and environmental attorney of Pittsburgh law firm Babst Calland, is why more businesses need to consider a longer-term view of their future - including adaptable disaster plans that take into account business continuity in times of unexpected disruptions.

Bluedorn spoke recently with the Pittsburgh Business Times about business continuity planning.

"This has been a unique year," said Bluedorn, who not only advises businesses but also has had to confront the pandemic himself as chief executive of one of Pittsburgh's largest law firms. "There's an old saw that 'tough times don't last, but tough people and tough businesses do. And I think that's certainly true during this pandemic and the difficult economic construct we all have had to face."

Business Continuity: Pre- and Post-Pandemic

Of course, Bluedorn was quick to point out the importance of ongoing business continuity or disaster planning even without the cloud of a pandemic hovering overhead.

"A SWOT analysis of strengths, weaknesses, opportunities and threats still applies," he said. "But I think people need to look more broadly than that now. Certainly, from my perspective, looking at the legal and regulatory implications that have arisen as a result of the pandemic are critically important. I also...

January 14, 2021

EPA issues draft guidance for ‘functional equivalent’ test for point source discharges to surfacewater through groundwater

The PIOGA Press

(by Lisa Bruderly)

On December 10, the U.S. Environmental Protection Agency (EPA) issued for public comment its draft guidance regarding the U.S. Supreme Court’s County of Maui “functional equivalent” analysis within the Clean Water Act (CWA) National Pollutant Discharge Elimination System (NPDES) program (85 Fed. Reg. 79489). The comment period closed on January 11.

In County of Maui v. Hawaii Wildlife Fund, 140 S. Ct. 1462 (2020), the Supreme Court held that an NPDES permit is required in instances when a point source discharge of a pollutant through groundwater to a navigable water is the “functional equivalent” of a direct pollutant discharge from a point source into a navigable water. Babst Calland discussed the Supreme Court’s April 23, 2020, decision and its far-reaching implications in the May 2020 PIOGA Press article “Potential Clean Water Act liability extends to discharges to groundwater that reach surface water.”

The Supreme Court offered a non-exclusive list of seven factors to consider on a case-by-case basis:

Transit time; Distance traveled; Nature of the material through which the pollutant travels; Extent to which the pollutant is diluted or chemically changed as it travels; Amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source; Manner by or area in which the pollutant enters the navigable waters; and Degree to which the pollution (at that point) has maintained its specific identity.

Emphasis on threshold requirements for NPDES permits

The draft guidance stresses that the County of Maui decision did not change the structure of the NPDES permit program, and, at most, only adds another step in determining whether an NPDES permit is required under a limited number of scenarios. In fact, EPA devotes much of the eight-page draft guidance to discussing the following two threshold conditions that trigger NPDES permitting:

...