Articles, Newsletters & Advisories
June 11, 2021Understanding legal challenges facing businesses today
Pittsburgh Business Times
(by Nick Keppler featuring Don Bluedorn)
During the past year, Babst Calland has been helping to navigate both the practical obstacles in the legal process and general anxiety among clients, said Donald C. Bluedorn II, managing shareholder of the downtown law firm, recognized for its work in environmental, energy and corporate law.
“It’s obviously an understatement to say the last year has been very challenging for all of us,” Bluedorn said in a conversation with the Pittsburgh Business Times. “Our clients have had to adapt in the face of the pandemic and its economic impacts, and of course, we did too.” Add to all of that, a new federal administration that commenced changes in energy policy and regulation in the name of climate change.
“There were a number of legal challenges that we had to work through quickly with clients. There were changes in the substantive legal area and the way things were done,” said Bluedorn. “For example, courts were closed. How do you maintain litigation and do discovery and engage with witnesses while courts are closed?” Our firm does a lot of environmental work. The offices that issue permits necessary for environmental testing were also temporarily delaying some of that work. In many cases, deadlines were suspended.
Like every other workplace, Babst Calland’s clients also faced sudden and jarring disruptions to the most basic aspects of their workplaces, including having a communal environment.
“Obviously, a number of our clients had direct issues associated with the pandemic,” said Bluedorn. Early on, these included questions of “how do they deal with people working at home and how do they decide who needs to be in the office and who doesn’t.”
Now many have moved on to “issues associated with when it is safe to come back and how to strike a balance in...
June 11, 2021EPA’s proposed budget highlights Biden administration focus on environmental justice concerns
The PIOGA Press
(by Ben Clapp)
The proposed budget for fiscal year 2022 for the U.S. Environmental Protection Agency (EPA), submitted to Congress on May 28, provides important insights into the agency’s priorities in the coming years under the Biden administration. Broadly speaking, the proposed budget, which is the largest ever in absolute terms, emphasizes what the agency describes as “four cross-cutting priorities: Tackling the Climate Crisis through Science, Advancing Environmental Justice, Supporting State, Tribal and Local Partners and Expanding the Capacity of EPA.” These points of emphasis are generally consistent with expectations and with earlier environmental policies adopted by the Biden administration, including the executive order on “Tackling the Climate Crisis at Home and Abroad” (E.O. 14008).
While the agency priorities set forth in the proposed budget are perhaps not particularly surprising, the prominence in the budget of advancing environmental justice, a topic with potential impacts on the oil and gas sector, is unprecedented. (Note, for example, that the terms “environmental justice” or “EJ” appear more than 400 times in the EPA’s lengthy budget justification document, compared to just over 40 times in the fiscal year 2021 document.) While environmental justice considerations have been a component of EPA’s work since the 1990s, the Biden EPA is poised to bring it to the forefront of environmental decision-making. This heightened emphasis is also reflected in EPA Administrator Michael Regan’s April 7 message to EPA staff, in which he stated that the agency would do more to address environmental justice concerns, including:Strengthening enforcement of violations of cornerstone environmental statutes and civil rights laws in communities overburdened by pollution. Taking immediate and affirmative steps to incorporate environmental justice considerations into EPA’s work, including assessing impacts to pollution-burdened, underserved and tribal communities in regulatory development processes and to consider regulatory options to maximize benefits to these...
June 10, 2021Major Air Regulatory Developments Anticipated for Pennsylvania Natural Gas Operators
The Legal Intelligencer
(by Gary Steinbauer)
Changes are coming to federal and state air quality regulations affecting new and existing upstream and midstream natural gas operations. Congress is in the midst of finalizing legislation to undo a Trump administration Clean Air Act (CAA) rule, which rolled back Obama-era CAA requirements. Separately, the U.S. Environmental Protection Agency (EPA) has begun developing rules for existing air emissions sources within the natural gas sector. At the state level, the Pennsylvania Department of Environmental Protection (PADEP) is poised later this year to finalize its own set of air regulations for existing sources within the natural gas sector. Any of these regulatory developments alone would be noteworthy; combined, they likely signal increased oversight, scrutiny, and regulation of new and existing air emission sources within Pennsylvania’s natural gas sector.
Congress Set to Disapprove Trump EPA Oil and Natural Gas CAA Rule
In March 2021, Congress invoked its rarely used Congressional Review Act (CRA) authority to rescind a Trump EPA rule that excluded emission sources in the transmission and storage segments and rescinded methane emission limits for the production and processing segments in New Source Performance Standards for the Crude Oil and Natural Gas Industry at 40 C.F.R. Part 60, Subparts OOOO and OOOOa (NSPS). Oil and Natural Gas Sector: Emissions Standards for New, Reconstructed, and Modified Sources Review, 85 Fed. Reg. 57018 (Sept. 14, 2020). Reinstating the NSPS methane requirements means that EPA would be statutorily required to regulate methane emissions from existing affected sources within the natural gas sector. See 42 U.S.C. § 7411(d)(1).
While U.S. Senate voted to pass a joint resolution revoking the Trump administration’s revisions to these NSPS in April 2021, a vote in the House of Representatives has yet to be scheduled. News outlets are reporting that the delay in the House is because EPA...
June 3, 2021Changing Compliance Obligations for Employers Continue into 2021
The Legal Intelligencer
(by Molly Meacham)
Even in ordinary times, keeping up with an ever-changing employment law landscape is a compliance challenge for businesses. The extraordinary circumstances of the COVID-19 pandemic sparked unprecedented compliance challenges for employers, including workplace safety issues, additional temporary leave requirements, and interpreting existing obligations through the lens of COVID-19.
Compliance obligations for employers are continuing to evolve in 2021. Presidential administration change and a change in the majority party in the U.S. Senate each typically cause new and revised legislation and regulations. Combined with the ongoing pandemic, the result is continued significant alteration to the legal and regulatory framework that will impact employers in 2021 and beyond. These developing issues include worker classification under the Fair Labor Standards Act (FLSA), a temporary expansion of the Consolidated Omnibus Budget Reconciliation Act (COBRA) under the American Rescue Plan Act of 2021 (ARPA), and COVID-19 workplace safety issues relating to fully vaccinated employees.
FLSA Independent Contractor Rule Withdrawn
One of the most important baseline employment-related determinations a business can make is whether a worker is properly classified as an employee or an independent contractor under the FLSA. Worker misclassification is a frequently-litigated issue that represents significant legal exposure for businesses, as damages for misclassification can include retroactive application of minimum wage and overtime requirements, the value of employee benefits that were not provided, any legally-mandated sick time, or self-employment tax paid by the worker.
In the last weeks of the Trump administration in early 2021 the Department of Labor (DOL) issued a Final Rule seeking to clarify the independent contractor test and make it easier to identify workers covered by the FLSA. The traditional independent contractor test contains six non-exclusive factors which the DOL’s Wage and Hour Division and the federal courts evaluate on a case-by-case basis to determine whether a worker is,...
June 2, 2021Molly Meacham Named to Pittsburgh Business Times’ 20 People to Know in Law
Pittsburgh Business Times
20 People to Know connects the Pittsburgh-area business community with influential businesspeople working in key industries. In this installment of 20 People to Know, the Pittsburgh Business Times focused on legal professionals.
These listings are not meant to be comprehensive or a ranking, but rather an introduction to some of the behind-the-scenes players, key leaders and up-and-comers. Those selected offered their wisdom and thoughts on the region’s legal marketplace during this turbulent and transformative time.
Named to this list, Molly Meacham became co-chair of Babst Calland’s Litigation Group two years ago and recently was appointed to the firm’s board and is a member of its Emergency Response Committee. She also works in Babst’s Emerging Technologies Group, where she helps to bridge the litigation and mobility/transport practices. Her practice has two primary aspects: representing companies in commercial litigation and employment litigation matters, and serving as outside counsel providing companies with human resources advice and counseling.
For the full article, click here.
May 24, 2021Litigation Continues over West Virginia’s Coal Mine Permit Bonding Program
Environmental interest groups are continuing litigation that appears ultimately aimed at challenging the sufficiency of West Virginia’s bonding program for coal mine operations. On May 17, 2021, three environmental interest groups filed a lawsuit against the United States Department of Interior’s Office of Surface Mining (OSM). The suit alleges that OSM has failed to determine whether changes to West Virginia’s bonding program are needed after OSM received notice from the West Virginia Department of Environmental Protection (WVDEP) regarding the financial circumstances surrounding certain operators in the coal industry. This case is related to a prior suit originally filed on July 9, 2020 against WVDEP concerning the bonding program. As noted in our July 14, 2020 Environmental Alert, the July 9, 2020 suit alleged that WVDEP had failed to properly notify OSM of the financial insolvency of certain coal operators and the purported inability of West Virginia’s Special Reclamation Fund to cover the costs required to complete required reclamation work at mine sites formerly operated by one of those entities, ERP Environmental Fund. The Special Reclamation Fund receives revenue from a tax on coal production. When the amount of a forfeited bond associated with a revoked mining permit is insufficient to cover the costs of completing the required reclamation, the Special Reclamation Fund provides additional funding for use by WVDEP to perform the reclamation work. (For a more detailed explanation of the bonding system and the claims made by the plaintiffs in these lawsuits, see our May 18, 2020 Environmental Alert, West Virginia DEP Receives Notice of Intent to Sue Under SMCRA Based on Deficiencies in Mine Reclamation Fund.)
WVDEP moved to dismiss the previous civil action on various grounds, including the argument that OSM was already aware of the insolvencies of...
May 24, 2021Protecting your innovations outside the United States
(by Sue Ostrowski featuring Carl Ronald)
If you’re considering selling your innovative product or commercializing your novel processes in another country, protecting your innovations with a patent in that country may be key to your success. But trying to navigate the process alone can prove difficult.
“It’s surprising how complicated it can be, and there are a lot of places to get tripped up,” says Carl Ronald, shareholder at Babst Calland. “While you can try to do it on your own, hiring a patent attorney can make the process much smoother, ensuring you are including all relevant information and complying with all relevant deadlines to protect your invention in the most cost-effective way possible.”
Smart Business spoke with Ronald about when you might need international protection and how a patent attorney can help you navigate the complex process.
When should a company consider applying for a patent outside the U.S.?
A U.S. patent only provides a protectable interest here in the U.S.; you can’t stop someone from using what your patent teaches to compete with you in other countries unless you’ve timely filed in those countries, as well. If you have an international customer base that is purchasing products or services that, in the future, may be produced with, employ, or contain your patented process or device, you should seek protection, at a bare minimum, in those countries where your anticipated market is largest.
Keep in mind the importance of secrecy before filing your application. In the U.S., you have one year to file a patent application covering your invention after you disclose it publicly. Other nations are not so lenient and, in many countries, any disclosure of your invention to someone who does not have an obligation of confidentiality will destroy novelty and likely preclude you from ever obtaining a patent in that country.
May 20, 2021Water Law Update: Five Regulatory Changes to Watch in 2021
The Legal Intelligencer
(by Lisa Bruderly)
State and federal water law permitting can pose significant obstacles for energy infrastructure construction projects that impact waterbodies (e.g., wells pads, access roads, natural gas/oil pipelines). The following five new and proposed regulatory changes are likely to significantly affect project design and construction in Pennsylvania.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 Joseph R. Biden Jr. has asked the U.S. Army Corps of Engineers (the Corps) 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 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 energy construction projects.Nationwide Permits (NWPs)
In Pennsylvania, qualifying projects impacting federally regulated waters may be eligible for one of two types of Section 404 general permits (i.e. NWPs or the Pennsylvania State Programmatic...
May 18, 2021Corps Seeks Comments on Proposed Reinstatement of Suspended NWPs in Pennsylvania
(by Lisa Bruderly)
On May 12, 2021, the Baltimore, Philadelphia and Pittsburgh Districts of the U.S. Army Corps of Engineers (the Corps) jointly issued a 15-day Public Notice (SPN 21-26), requesting comments on whether to reinstate certain 2017 and 2021 Nationwide Permits (NWPs) that are suspended in parts of Pennsylvania. The comment period closes on May 27, 2021.
The reinstatement has been proposed in case the new Pennsylvania State Programmatic General Permit (PASPGP-6) is not finalized and issued prior to the expiration of Pennsylvania’s current state programmatic general permit (PASPGP-5) on June 30, 2021. At present, if PASPGP-6 is not issued before July 1, 2021, most projects in Pennsylvania impacting federally regulated waters would be required to obtain individual Section 404 permits. Obtaining an individual permit is typically a more lengthy and complicated process than obtaining coverage under a programmatic general permit or NWP.
State Programmatic General Permit
The PASPGP is the mechanism that the Pennsylvania Department of Environmental Protection (PADEP) and the Corps rely upon to permit most projects in Pennsylvania that impact federally regulated waters, but do not require an individual Section 404 permit. PASPGP-6 allows applicants to obtain both federal Section 404 permits and state water obstruction and encroachment permits for projects impacting federal and state-regulated waters.
PASPGP-6 has not yet been finalized. The draft PASPGP-6 was published for public comment on September 4, 2020 (SPN 20-57), and the public comment period closed on October 4, 2020. On February 12, 2021, PADEP issued a conditional state water quality certification (SWQC) under Section 401 of the Clean Water Act, which certifies that activities authorized by PASPGP-6 would comply with the Commonwealth’s water quality standards if the applicant complies with the following conditions and “constructs, operates and maintains the project in compliance with the terms and conditions of State permits obtained to...
May 17, 2021Pennsylvania Trial Courts Hold that the Term “At the Wellhead” in Natural Gas Leases Allows Operators to Deduct Post-Production Costs
In two recent opinions in which Babst Calland represented oil and gas operators, Pennsylvania federal and state trial courts ruled that the term “at the wellhead” in natural gas leases must be interpreted to allow operators to deduct post-production costs when calculating royalty payments. Coastal Forest Res. Co. v. Chevron U.S.A., Inc., et al., No. 2:20-cv-1119, 2021 WL 1894596 (W.D. Pa. May 11, 2021); Dressler Family, LP v. PennEnergy Res., LLC, A.D. No. 2017019357 (Butler Cty. C.P. Apr. 28, 2021). In doing so, the trial courts held that the Pennsylvania Supreme Court’s interpretation of the term “at the wellhead” in Kilmer v. Elexco Land Servs., Inc., 990 A.2d 1147 (Pa. 2010) is not confined to issues of statutory interpretation, but also applies to leases.
In Kilmer, the Pennsylvania Supreme Court ruled that, among other things, the use of the net-back method to calculate royalties did not violate the Guaranteed Minimum Royalty Act (GMRA), 58 P.S. § 33, which required leases to guarantee the lessor at least a one-eighth royalty of all gas recovered from the property. When calculating royalties, the net-back method provides a mechanism for determining allowable deductions for post-production expenses associated with bringing the oil or gas from the “wellhead” to the market where it is sold. In reaching its conclusion, the Court in Kilmer relied on a variety of sources specific to the oil and gas industry that stated a royalty is generally not payable from the operator’s gross profit, but from the net amount remaining after the deduction of post-production costs. 990 A.2d at 1157-58.
In the decade since Kilmer, disputes have arisen as to the scope of its holding. In particular, many lessors and operators have disagreed whether Kilmer should be confined to issues of...
May 12, 2021U.S. Senate passes joint resolution disapproving Trump oil and gas methane rule
The PIOGA Press
On April 28, 2021, the U.S. Senate passed a joint resolution, known as S.J. Res. 14, retroactively revoking a Trump administration rule revising Obama-era Clean Air Act New Source Performance Standards for the Crude Oil and Natural Gas Industry at 40 C.F.R. Part 60, Subparts OOOO and OOOOa (NSPS) that were initially promulgated in 2012 and 2016. The joint resolution, if enacted into law, would reinstate Obama administration rules regulating the methane emissions from the oil and natural gas industrial sector, including the production, processing, transmission and storage segments.
The Trump administration’s Policy Amendments rule The joint resolution takes aims at a specific Trump administration rule published in the Federal Register on September 14, 2020. Referred to as the “Policy Amendments,” the rule resulted in four key changes to these NSPS, which were promulgated in 2012 and 2016.
First, the Policy Amendments removed the transmission and storage segment, including transmission compressor stations, pneumatic controllers and underground storage vessels. In removing the transmission and storage segments from regulation under the NSPS, the U.S. Environmental Protection Agency (EPA) found that the segments were improperly regulated because the statutory-mandated finding that sources contribute significantly to air pollution was not made when the segments were added to the industrial sector and the NSPS in 2012 and 2016.
Second, the Policy Amendments rescinded the methane emission requirements for the production and processing segments of the sector, which include various emission sources at well sites, gathering and boosting compressor stations, and natural gas processing plants.
Third, by removing the methane limits on the production and processing segments, the Policy Amendments eliminated the Clean Air Act (CAA) requirement to regulate methane emissions from existing sources from within these segments.
Fourth, as an alternative basis for rescinding the limits on methane emissions, the Policy...
May 4, 2021Has COVID-19 Escalated Disagreements Between Business Owners?
Closely-Held Business Perspective
(by Kevin Douglass)
Business owners faced with extraordinary operational and financial challenges caused by the COVID-19 pandemic may also be managing special demands and concerns posed by their owners. There is never a good time for an internal ownership squabble to bubble up to the surface, but owner conflicts or differences can be particularly troublesome when the business is already under duress.
Disruption Can Create Conflict
There is no question that the pandemic has impacted many businesses’ finances and strategy, as well as relationships between co-owners. The warning signs of an owner disagreement should never be ignored. If left unchecked, these misunderstandings can cause real damage to a company’s health and vitality including negative impacts on the bottom line, employee morale, and even relationships with creditors, customers and suppliers. A company can be particularly vulnerable at critical moments when its owners may already be dealing with the pandemic ramifications or other financial and operational challenges. Do not wait for the perfect time to deal with owner disagreements because that time will never come. The stability of a company’s day-to-day operations and future financial success are often dependent upon resolution of these multi-faceted disagreements between owners.
April 30, 2021Second Circuit Holds New York’s Climate Tort Lawsuit in Federal Court is Pre-Empted by the Clean Air Act
In a unanimous opinion, the federal Second Circuit Court of Appeals ruled that state law “climate tort” claims asserted by the City of New York (the “City”) against five oil companies are preempted by the federal Clean Air Act (CAA). City of New York v. Chevron Corporation et al., No. 18-2188, 2021 WL 1216541 (2nd Cir. 2021). In doing so, the Second Circuit became the first federal appellate court to address the merits of climate change tort suits asserted under state law and filed in federal court.
The City filed the lawsuit in 2018 in federal district court alleging state law claims of public nuisance, private nuisance, and trespass under New York law. The City argued that the companies’ production, promotion, and sale of fossil fuels has caused, and will cause, the City to expend significant resources in response to climate change impacts, and the companies should bear these costs instead of the City’s taxpayers.
The district court granted the companies’ motions to dismiss the complaint. In its opinion, the Second Circuit affirmed the dismissal for largely the same reasons as the district court:federal common law, rather than New York law, applied to City's claims; the CAA displaced claims under federal common law; the CAA regulates only domestic, not foreign, emissions; and foreign policy precluded recognition of a federal common law cause of action targeting greenhouse gas emissions emanating from beyond country's national borders.
Given the global nature of greenhouse gas emissions, the court determined that such claims were beyond the scope of state law, despite the City’s pleadings alleging only state law claims. In so holding, the court could apply settled precedent from the Supreme Court holding that the CAA preempts federal common law claims concerning domestic emissions.
The Second Circuit made clear...
April 29, 2021Aggressive goals aim to decrease emissions — but challenges await
To remain competitive, businesses should stay on top of evolving state and federal policies on renewable energy. These changes present both opportunities and challenges, according to James Curry, managing shareholder in Babst Calland’s Washington, D.C. office, and Ashleigh Krick, an associate at Babst Calland. Commercial and industrial power consumers may be able to obtain benefits from sourcing renewable power, both financially and to answer growing shareholder and lender scrutiny.
At the same time, the increasing level of renewables coming online presents challenges related to grid reliability, underscoring the continued relevance for other more stable sources of electricity.
Smart Business spoke with Curry and Krick about the increase in state-level carbon reduction targets, the challenges associated with increased use of renewable energy and the role of traditional generation sources to maintain reliability.
What is the current state of affairs for renewables?
In Pennsylvania, bipartisan legislation has been introduced to increase the state’s Alternative Energy Portfolio Standards (AEPS), enacted in 2004 with the goal of increasing the state’s share of power from renewables. The AEPS requires that electric distribution companies and electric generation suppliers supply 18 percent of their electricity from certain alternative energy sources, such as solar, hydropower, geothermal, waste coal and distributed generation. The proposed legislation would increase that requirement by 10 percent.
Although an early adopter of a renewable portfolio standard, neighboring states have jumped ahead of Pennsylvania in recent years. New Jersey and Maryland have set renewable energy targets of 50 percent by 2030, while New York has a goal of 70 percent. And, in April 2020, Virginia passed legislation requiring the state’s largest utility to provide 100 percent of its electricity from renewables by 2045.
Pennsylvania Gov. Tom Wolf recently committed state government to purchasing 50 percent of its electricity needs from...
April 26, 2021Environmental considerations for our region
Pittsburgh Business Times
Even before he won the election, President Joe Biden had pledged to reverse Trump-era environmental policies designed to ease the regulatory burden on business. Since then, he already has proposed a sweeping $2 trillion-plus, infrastructure-improvement plan designed to shore up the nation's roads, bridges, water pipes and other infrastructure, as well as create new jobs.
Such presidential plans for environmental reform are certain to require significant – and potentially expensive – shifts in business practices in the long term, according to leading attorneys from the Environmental Practice of Pittsburgh law firm Babst Calland. As a result, the region's businesses can expect a climate of transition in the short term, mixed with potential new business opportunities, costly challenges, and delayed development.
"It was no surprise when, out of the gate, the Biden administration signaled that there were going to be a lot of regulatory changes that were significantly different from the regulatory environment of the Trump administration," said Lisa Bruderly, chair of Babst Calland's Environmental Practice. "One of his first executive orders was to task EPA and other federal agencies to look at the regulations and policies and directives of the Trump administration and determine whether any of those actions should be revoked, rescinded, or revised.
"So we are waiting to see what those actions may be," she continued. "Many of those have important environmental implications that could affect future developments – how projects are permitted, for example."
Bruderly was one of three attorney colleagues who participated recently in a discussion with the Pittsburgh Business Times on "Environmental Considerations for Our Region" as part of...
April 22, 2021Commonwealth Court Holds Township Need Not Vacate the Road Less Traveled
The Legal Intelligencer
Dating as far back as 1735, when the commonwealth was a province controlled by the heirs of William Penn, Pennsylvania has recognized the importance of public roads and their role in preserving a landowner’s right to access his land. Since that time, it has become a foregone conclusion that the government, at all levels, will provide and maintain public roadways. However, because of the necessary impact on the rights of individual landowners, the creation of anything from a federal highway to a municipal alleyway involves complex legal considerations. While the legal implications involved in the creation of public roads through eminent domain or dedication are well known, the abandonment or “vacation” of public roads also has a significant impact on the property rights of individuals, governments and the public. Recently, the Commonwealth Court, in In Re Vacating of Old Route 322, No. 384 C.D. 2020 (Pa. Cmwlth. Mar. 3, 2021), considered what happens when adjacent landowners allege a public roadway has become so “useless, inconvenient or burdensome,” that the municipality is required to vacate it under the General Road Law, 36 P.S. Sections 1781-2293. Although the case is unreported and not precedential, it may be cited for persuasive value, and offers an opportunity to review of this understudied area of the law.
Local roads often are established by dedication, where a landowner offers land for public use, and the municipality accepts it on behalf of the public. Typically, when a municipality accepts a road dedication it holds that property in trust only for the use for which it was dedicated. This means the dedication of a public road does not invest the municipality with fee title to the land on which it rests but only the right to use, maintain, regulate and...
April 14, 2021West Virginia Legislature Enacts Renewable Energy Site Reclamation Law
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, 2021Water 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, 2021Winds of Change: Biden’s Impact on Superfund
The Legal Intelligencer
(by Alana Fortna)
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, 2021How alternative legal service providers can add efficiencies, create value
(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?
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, 2021PADEP 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, 2021RMMLF Mineral Law Newsletter – Pennsylvania – Oil & Gas
RMMLF Mineral Law Newsletter
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, 2021RMMLF Mineral Law Newsletter – Pennsylvania – Mining
RMMLF Mineral Law Newsletter
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, 2021RMMLF 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...