Articles, Alerts & Perspectives

Pittsburgh, PA and Washington, DC

The Foundation Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi & Christina Puhnaty)

As previously reported in Vol. 39, No. 2 (2022) of this Newsletter, the Pennsylvania Department of Environmental Protection’s (PADEP) CO2 Budget Trading Program rule, or RGGI Rule, which links the commonwealth’s cap-and-trade program to the Regional Greenhouse Gas Initiative (RGGI), was published in the Pennsylvania Bulletin in April 2022. See 52 Pa. Bull. 2471 (Apr. 23, 2022). RGGI is the country’s first regional, market-based cap-and-trade program designed to reduce carbon dioxide (CO2) emissions from fossil fuel-fired electric power generators with a capacity of 25 megawatts or greater that send more than 10% of their annual gross generation to the electric grid.

A number of legal challenges were filed in response to the publication of the final rule. On April 25, 2022, owners of coal-fired power plants and other stakeholders filed a petition for review and an application for special relief in the form of a temporary injunction. See Bowfin KeyCon Holdings, LLC v. PADEP, No. 247 MD 2022 (Pa. Commw. Ct. filed Apr. 25, 2022). Briefing has been filed and the court heard 30 minutes of oral argument in the case on November 16, 2022. The parties await the court’s ruling.

Additionally, on July 13, 2022, natural gas companies Calpine Corp., Tenaska Westmoreland Management LLC, and Fairless Energy LLC filed a third legal challenge to the rule with arguments similar to those brought in the other two cases. See Calpine Corp. v. PADEP, No. 357 MD 2022 (Pa. …

Pittsburgh, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(By Jessica Barnes)

The application and scope of the attorney-client privilege for communications containing both legal and nonlegal advice is a critical consideration to protect the privilege.

A “bedrock doctrine of the legal profession,” “hallmark of Anglo-American jurisprudence,” and “cornerstone of the American legal system”—these are just a few ways that the attorney-client privilege was described in briefing in a matter before the Supreme Court of the United States (SCOTUS) that has attracted attention from legal scholars across the country.

This closely watched SCOTUS case is In Re Grand Jury, No. 21-1397, which involves a dispute over the withholding of documents in the form of communications containing both legal and non-legal advice (dual-purpose communications) in response to grand-jury subpoenas on the basis of privilege. Specifically, the petitioner-law firm provided legal advice to a client regarding the tax consequences of the client’s anticipated expatriation (i.e., renouncing citizenship). Thus, some of the communications from the law firm to the client were made for the dual purpose of providing legal advice about tax consequences and to facilitate preparation of the client’s tax returns.

For example, some of the documents that the law firm withheld on a privileged basis included communications related to unsettled statutory requirements, strategies for filing amended income-tax returns for purposes of expatriation, and the drafting of a submission to the IRS advocating for the abatement of a penalty assessment. The law firm withheld these dual-purpose communications on the ground that while relating to the client’s tax returns, they were sufficiently motivated by the additional purpose of obtaining or providing legal advice regarding the client’s taxes. …

Pittsburgh, PA

Pittsburgh Trib

(By Stephanie Ritenbaugh)

An Oakland business incubator closed its initial investment — over $300,000 — in one of its first cohort of companies through its ‘angel investment’ program.

Idea Foundry’s program, IF Ventures, said the company that received the infusion was one of five presented to a group of investors in September.

Idea Foundry and its partner, law firm Babst Calland, declined to name the company because of confidentiality agreements. However, President and CEO Mike Matesic was able to say that it’s a company that develops software to help retailers and distributors.

The company is generating revenue, Matesic said.

“Part of our investment will be used for the company to expand into additional geographic models,” said Chris Farmakis, shareholder and board chairman of Pittsburgh-based Babst Calland.

Additional investments are still being considered for the group, Matesic said.

IF Ventures is an investment group managed by Idea Foundry Inc., a non-profit economic development organization. The goal of the program is to attract investors and funding for companies to boost economic development through entrepreneurship and business growth.

“The investor interest and attraction of new investors exceeded our expectations at this early stage,” Matesic said.

“One of the most promising actions that occurred was that our initial group of investors encouraged their peers to join and ultimately became part of this initial investment,” he said.

To view the full article, click here.

Pittsburgh, PA

PIOGA Press

(By Lisa Bruderly)

Projects involving oil or natural gas development or pipeline construction require U.S. Army Corps of Engineers (Corps) permitting for impacts from crossing, or otherwise disturbing, federally regulated streams and wetlands. The extent of required federal permitting is dependent on the definition of “waters of the United States” (WOTUS), which determines federal jurisdiction under the Clean Water Act (CWA).  Typically, the more impacts to federally regulated streams and wetlands, the more likely the permitting will cause project delays and increase expenses.

As one of their last actions for 2022, U. S. EPA and the Corps (the Agencies) released a prepublication notice of a new definition of WOTUS on December 30, 2022. The new definition will become final 60 days after publication in the Federal Register.

Although the Agencies have promoted this final rule as establishing a “durable definition” that will “reduce uncertainty” in identifying WOTUS, this definition does not appear to provide much-needed clarity. Rather, generally speaking, the new definition codifies the approach that the Agencies have already been informally utilizing to determine WOTUS, which entails relying on the definition of WOTUS from the late 1980s, as interpreted by subsequent U. S. Supreme Court decisions (e.g., Rapanos v. United States, 547 U.S. 715 (2006)). The Agencies reverted back to this definition in August of 2021, when the U.S. District Court for the District of Arizona vacated the definition of WOTUS promulgated by President Trump’s administration, referred to as the Navigable Waters Protection Rule (NWPR).

The Agencies’ current approach to interpreting WOTUS relies heavily on both of the frequently discussed tests identified in the Rapanos decision. In Rapanos, Justice Antonin Scalia issued the plurality opinion, holding that WOTUS would include only “relatively permanent, standing or continuously flowing bodies of water” connected to traditional navigable waters, and to “wetlands with a continuous surface connection to such relatively permanent waters” (i.e., adjacent wetlands). …

Pittsburgh, PA

Pittsburgh Business Times- Pittsburgh INNO

(By Nate Doughty)

A new Pittsburgh-based investment program backed by local angel investors has marked the close of its first capital infusion into a startup company.

IF Ventures, a joint program from Pittsburgh-based nonprofit economic development organization Idea Foundry made in partnership with Pittsburgh-based law firm Babst Calland, announced it invested over $300,000 into one of the program’s inaugural cohort of companies.

Chris Farmakis, a shareholder and board chair at Babst Calland, declined to disclose the name of the startup that received the investment citing confidentiality agreements made between the parties but noted that this is just the first of several deals the program is looking to make in the coming months.

Farmakis said the program isn’t to be likened to a fund like those raised by venture capital firms. Instead, IF Ventures serves as the vetter of hundreds of companies looking to take on investment and only selects a few firms to be presented to its cadre of angel investors who are open to deploying capital in budding enterprises.

There is no requirement that individuals in this program invest in every company, Farmakis said, though periodic investments must be made if investors wish to remain participants in the program.

“This is more about taking successful entrepreneurs, successful business people and people that have the ability to invest in these companies, aggregate them together and give them access in a painless way to make discernible investment decisions,” Farmakis said. “And that’s what we’re doing with this program.”

IF Ventures is expecting to close on its second investment soon and a second cohort of companies will be brought before the investors in its program next month.

Pittsburgh, PA

Breaking Ground

(By Max Junker and Anna Hosack)

Since the 1999 enactment of the Pennsylvania Construction Code Act (“PCCA”), Pennsylvania has sought to establish uniformity for construction standards throughout the Commonwealth.  In pursuit of uniformity the PCCA embraced the adoption of standards drafted by the International Code Council (“ICC”), a private non-profit entity, and directed the Department of Labor & Industry (“Department”) to promulgate certain ICC standards under the Uniform Construction Code (“UCC”).  The directive to adopt standards originating from a non-governmental entity such as the ICC implicates a legal concept known as the non-delegation doctrine.  The Commonwealth Court recently invoked the non-delegation doctrine to enjoin the enforcement of the 2021 accessibility regulations promulgated by the Department in Pennsylvania Builders Association v. Department of Labor & Industry, No. 479 M.D. 2021, 2022 WL 14668728 (Pa. Cmwlth. Oct. 26, 2022).

The non-delegation doctrine is embodied in Article II, Section 1 of the Pennsylvania Constitution where it states: “The legislative power of this Commonwealth shall be vested in a General Assembly, which shall consist of a Senate and a House of Representatives.”  Together with Article III, Section 1 of the Pennsylvania Constitution addressing the passage of laws, the non-delegation doctrine constrains the General Assembly so that it cannot delegate its lawmaking power to any other branch of government, another body, or some other authority.  Christ the King Manor v. Dep’t of Pub. Welfare, 911 A.2d 624 (Pa. Cmwlth. 2006), aff’d 951 A.2d 255 (Pa. 2008).

The Commonwealth Court’s recent decision in Pennsylvania Builders Association is the culmination of litigation filed by the Pennsylvania Builders Association (“PBA”) against the Department alleging that the ICC accessibility provisions adopted pursuant to Section 304(a)(3) of the PCCA (“Accessibility Regulations”) constituted an unconstitutional delegation of legislative authority. …

Charleston, WV and Pittsburgh, PA

Babst Calland recently names Tiffany Arbaugh, Dane Fennell, Sean Keegan and Matthew Wood as Senior Counsel in the Firm.

Tiffany Arbaugh is a member of the Energy and Natural Resources and Litigation groups. Mrs. Arbaugh has more than 16 years of experience in the oil and gas industry. She focuses her practice on representing corporations in a variety of litigation matters with an emphasis on mineral title, real estate, trespass, fraud and title curative disputes. Mrs. Arbaugh’s practice also includes advising clients in customary business operations, litigation avoidance strategies and litigation preparedness.

Dane Fennell is a member of the Corporate and Commercial group of Babst Calland. Mr. Fennell’s practice focuses primarily on commercial real estate transactions, mergers and acquisitions, drafting commercial transaction agreements, and general corporate matters. Mr. Fennell’s background includes managing complex due diligence aspects of small and large acquisitions and contract management projects. For these projects, he works closely with Solvaire Technologies, L.P., an affiliate of Babst Calland, to achieve reliable and cost-effective results.

Sean Keegan is a member of the Litigation and Employment and Labor groups of Babst Calland. Mr. Keegan has a broad range of litigation experience in several practice areas including commercial, labor and employment, energy, and maritime. He has experience defending shareholder dispute claims, oil and gas lease disputes, insurance claims, and premises liability claims. Mr. Keegan has represented clients in both state and federal courts throughout the United States.

Matthew Wood is a member of the Environmental group. He assists clients on a variety of environmentally-related legal matters arising under major federal and state environmental and regulatory programs, with a focus on issues involving government inquiries, environmental investigations, remediation and concomitant activities under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA), and their state analogs. …

Washington, DC and Pittsburgh, PA

Babst Calland recently named Varun Shekhar and Josh Snyder shareholders in the Firm.

Varun Shekhar is a member of the Environmental and Transportation Safety groups. Mr. Shekhar’s Environmental practice emphasizes federal, state and local regulatory matters arising under the Clean Air Act (CAA). He counsels Title V facilities across the country regarding compliance determination and assurance, CAA Section 114 information requests, and environmental audits. Mr. Shekhar draws upon his science and engineering background to help clients develop compliance solutions that are practical, technically and legally sound, and to advise entities in the course of enforcement actions by the U.S. Environmental Protection Agency, U.S. Department of Justice, and state agencies, as well as citizen suits within federal district and appellate courts. Mr. Shekhar also has substantial experience in assisting entities with continuous parametric and emissions monitoring systems, including coordinating with consultants and other technical advisors in identifying and addressing operational and data processing issues as they relate to compliance determination.

Joshua Snyder is a member of the Litigation and Energy and Natural Resources groups of Babst Calland.  Mr. Snyder has extensive experience representing oil and gas producers in a range of disputes.  His energy litigation experience includes defending oil and gas producers and contractors from personal injury, toxic tort, nuisance, and lease dispute claims.  Additionally, Mr. Snyder has represented clients in the manufacturing, finance, healthcare, and coal industries in a range of commercial disputes.  He has represented clients in federal and state courts, as well as before administrative bodies and arbitration panels.

Smart Business

(By Sue Ostrowski featuring Gina Falaschi and Susanna Bagdasarova)

Under a proposed new rule, many federal suppliers would be required to annually disclose their greenhouse gas (GHG) emissions and climate-related financial risks, in addition to setting GHG emissions reduction targets. The result could be a significant impact on a business’s reporting requirements.

“The proposed rule was published on Nov. 14, 2022, by the Department of Defense, General Services Administration and National Aeronautics and Space Administration,” says Susanna Bagdasarova, an associate at Babst Calland. “The Federal Supplier Climate Risks and Resilience Rule directs some federal suppliers to address climate-related risks as part of the Biden administration’s climate-change initiatives, including its goal of achieving a net-zero emissions economy by 2050.

“Businesses with government contracts should assess whether they need to comply,” says Gina Falaschi, an associate at Babst Calland. “Assessing potential impacts will help businesses be prepared for compliance deadlines when and if the rule is finalized.”

Companies can submit written comments on the proposed rule until Feb. 13, 2023, which will be reviewed prior to the federal agencies releasing the text of the final rule.

Smart Business spoke with Falaschi and Bagdasarova about how the Federal Supplier Climate Risks and Resilience Rule could impact federal suppliers.

What does the proposed rule require?

It imposes GHG emissions disclosure and reporting requirements on certain federal suppliers. “Significant contractors,” those receiving at least $7.5 million but less than $50 million in federal contract obligations during the previous fiscal year, would be required to report an annual inventory of their Scope 1 and Scope 2 emissions.

“Major contractors,” those receiving more than $50 million in federal contract obligations during the previous year, would be subject to the same requirements. …

Legal Intelligencer

(By Harley Stone and Anna Jewart)

These MPC mandated procedures require municipalities to obtain recommendations from their local planning bodies, submit proposed zoning ordinances and amendments to the relevant county planning agency, and to hold public hearings to solicit public comment.

Enacting and amending zoning regulations is a time-consuming matter. In fact, months often pass from the inception of an idea to the implementation of a zoning scheme and its actual effective date. This is due in large part to the stringent adoption requirements set forth by the Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq. (MPC). These MPC mandated procedures require municipalities to obtain recommendations from their local planning bodies, submit proposed zoning ordinances and amendments to the relevant county planning agency, and to hold public hearings to solicit public comment.

Consequently, municipalities frequently must consider what to do with land use applications received during the period in which an ordinance is “pending,” but has not yet become effective. The “pending ordinance doctrine,” was created by the courts prior to adoption of the MPC. The doctrine was designed to protect municipalities from instances where an applicant proposes a use which conforms to the existing zoning scheme but would not be permitted under zoning changes being considered by the municipality and for which it has advertised its intent to hold public hearings. When the pending ordinance doctrine applies, a land use applicant may be required to conform to proposed zoning regulations which have not yet been adopted.

However, the doctrine does not always apply. In fact, the MPC includes certain statutory exceptions to the pending ordinance doctrine which are intended to protect landowners and applicants. …