August 4, 2023

Legislative & Regulatory Update

Pittsburgh, PA

The Wildcatter

(By Nikolas Tysiak)

In Collingwood Appalachian Minerals III, LLC v. Erlewine, — S.E.2d —, 2023 WL 4013373 (June 15, 2023), the West Virginia Supreme Court heard another case that contributes to the ongoing saga surrounding oil and gas rights being sold at tax sale. This case is a bit unique, in that there is both a language interpretation issue and a tax sale issue presented. The tract at issue contains 135 acres. In 1909, J. E. Huff conveyed the land to James Sivert, reserving ½ the oil and gas. James Sivert conveyed the land to Joseph and Myrtle Rogers in 1944, reserving ¼ the oil and gas. The Rogerses conveyed the land to Osborn Dunham in 1945, reserving from the conveyance “all exceptions and reservations contained in all prior deeds”. Meanwhile, James Sivert conveyed his ¼ oil and gas interest to Joseph Palmer also in 1945, who then conveyed such ¼ oil and gas interest to Osborn Dunham in November of 1945. As of 1945, Osborn Dunham held ½ the oil and gas and all of the surface as to the 135 acres. Critically, beginning in 1930, James Sivert was assessed for the surface and ½ the oil and gas separately. Upon his reservation of ¼ oil and gas in 1944, the Rogerses and Sivert were each assessed for ¼ oil and gas under the land.

In 1968, Dunham conveyed to Russell F. Stiles “the same land” as received by him in 1945. Following this deed, Stiles became assessed for the surface and ¼ oil and gas, while Stiles became assessed for another ¼ oil and gas. Royalties were also paid in accordance with this division of oil and gas rights. …

August 1, 2023

EPA Adds Nine PFAS Chemicals to the Toxics Release Inventory Reporting List

Pittsburgh, PA

Environmental Alert

(by Matt Wood and Mackenzie Moyer)

On June 23, 2023, the U.S. Environmental Protection Agency (EPA) published a final rule updating the Toxics Release Inventory (TRI) chemical list to add nine more per- and polyfluoroalkyl substances (PFAS).  This update, applicable starting in the 2023 reporting year, requires facilities subject to TRI reporting obligations that manufacture, process, or otherwise use any of the newly added PFAS in quantities exceeding 100 pounds in 2023 to report such uses to EPA by July 1, 2024 (and in future years, as applicable).  The final rule increases the total number of TRI-listed PFAS to 189.  The nine PFAS added to the TRI chemical list are available here and the complete list (through reporting year 2022) is available here.

PFAS compounds or classes of PFAS are automatically added to the TRI effective January 1st of the calendar year following the occurrence of certain “triggers” enumerated in the National Defense Authorization Act for Fiscal Year 2020 (2020 NDAA), which was signed into law on December 20, 2019.  Those triggers include the date on which: (1) EPA finalizes a toxicity value for the PFAS; (2) EPA makes a covered determination for the PFAS, i.e., a determination made by rule under the Toxic Substances Control Act (TSCA) section 5(a)(2) that a use of a PFAS or class of PFAS is a significant new use; (3) the PFAS is added to a list of substances covered by a covered determination; or (4) the PFAS to which a covered determination applies is added to the list published under section 8(b)(1) of TSCA and is designated as an active chemical substance under TSCA § 8(b)(5)(B).  …

August 1, 2023

New laws meant to protect consumer data will affect nearly all companies

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring Ember Holmes)

Several states have passed or are in the process of implementing data privacy laws, largely in an effort to put control of consumers’ information back into the hands of the consumer.

Four states — California, Colorado, Connecticut and Virginia — have data privacy laws that are already in effect. There also are states — Indiana, Iowa, Montana, Tennessee, Texas and Utah — where the laws have been passed and are set to go into effect at some point in the next three years. Additionally, there are six states — Delaware, Massachusetts, New Jersey, North Carolina, Oregon and Pennsylvania — where bills relating to data privacy have been introduced and are at different stages of the legislative process.

“One common theme of the various laws is to shift the default for companies that collect and sell consumer data from assumed, passive consent to express, active consent,” says Ember K. Holmes an Associate at Babst Calland. “These laws also give consumers the right to opt out of having their data collected, or to have their data deleted if it has already been collected.”

While the aim of these laws is similar, each is unique. That’s making it difficult for companies across sectors to understand how these laws affect their business and avoid what are often significant penalties for noncompliance.

Smart Business spoke with Holmes about data privacy laws states are enacting and how they are going to affect companies.

Why might data privacy laws in one state affect a company that’s headquartered in another?

Although Pennsylvania does not have a robust body of privacy laws, organizations may have obligations under the privacy laws of other states. …

July 26, 2023

EPA Proposes to Usurp State’s Judgment and Standards for Stream Impairment Classification

Charleston, WV

Environmental Alert

(by Robert Stonestreet and Kip Power)

The federal Environmental Protection Agency (EPA) has taken rare action in proposing to not only supersede the role of the West Virginia Department of Environmental Protection (WVDEP) in addressing water quality conditions in the state, but also seeking to impose a new standard for determining how to classify the biological health of West Virginia waters. Under Section 303(d) of the federal Clean Water Act, state governments are required to identify, every three years, waters within their borders that do not meet designated water quality standards. Such waters are deemed “impaired” for the water quality standards exceeded and are placed on what is known as a “303(d) List.” That list must include waters that fail to meet numeric water quality standards – i.e., specific concentrations of iron, aluminum, and other substances. Waters can also be “impaired” for failure to comply with “narrative” water quality standards – i.e., narrative descriptions of certain prohibited conditions, such as distinctly visible foam, sludge deposits, foul odors, or discoloration. West Virginia’s narrative standards also provide that waters can be considered “biologically impaired” if they contain “materials in concentrations which are harmful, hazardous, or toxic to man, animal or aquatic life.”

When a stream is placed on the 303(d) List, it is put in line for the development of a pollution reduction plan (known as a “total maximum daily load” or “TMDL”). Among other things, a TMDL results in more restrictive permit limits for discharges associated with the parameters deemed to be contributing to the impairment.

For more than 20 years, the WVDEP has used the West Virginia Stream Condition Index (WVSCI) as the primary methodology for evaluating whether a stream is “biologically impaired.” Under WVSCI, a stream is considered impaired if it does not support a certain volume and diversity of insects and other aquatic life even if the stream meets all numeric water quality standards. …

July 21, 2023

The Role of Local Government in the Energy Transition

Pittsburgh, PA

The Foundation for Natural Resources and Energy Law

(by Blaine Lucas and Anna Jewart)

§ 31.01 Introduction*

At a national level, public support for renewable energy generation has increased significantly. National approval, however, does not necessarily translate into local support. Local governments have long enjoyed considerable freedom to regulate traditional energy sources, such as oil and gas, under their police powers. At the behest of residents concerned about its impacts, local governments are similarly exercising their authority to restrict renewable development under zoning, siting and other land use ordinances, efforts that may undermine renewable portfolio standards and other state energy transition policy goals. This chapter will focus on local land use regulation of the most common forms of renewable energy development—utility-scale wind and utility-scale solar projects. In this context, this chapter will address: (1) the differing state statutory philosophies regarding the division of regulatory responsibility between state and local governments, (2) the types of local government procedural and substantive land use requirements being imposed on wind and solar projects, and (3) case law themes and trends evolving around the country in response to this new regulatory landscape.

§ 31.02 Local Versus State Land Use Jurisdiction

Land use siting decisions are typically considered quintessentially local matters. However, over the years many states have carved out legislative exceptions to this general rule, delegating decision-making authority over where certain uses of land may be located to state-level agencies and limiting or prohibiting their local regulation. Other states have created hybrid or joint regulatory regimes, where local land use regulation is permitted, but only in conjunction with an additional level of state oversight or the imposition of statutory limits on what regulations municipalities can impose. …

July 20, 2023

The New Privacy Shield – European Commission Adopts the EU-U.S. Data Privacy Framework

Pittsburgh, PA

Firm Alert

(by Ember Holmes and Justine Kasznica)

On July 10, 2023, the European Commission (EC) adopted the European Union-United States Data Privacy Framework (DPF), an adequacy decision concluding that the U.S. has adequate data privacy and security infrastructure in place for secure transfer of personal data from the European Economic Area (EEA), which is comprised of the 27 European Union Member States, Norway, Iceland, and Liechtenstein, into the U.S. Prior to the adoption of the DPF, in order to transfer data from the EEA to the U.S., organizations in the U.S. were required to use one of the EC-approved safeguards, such as standard contractual clauses or binding corporate rules. These safeguards, set forth in Article 46 of the General Data Protection Regulation (GDPR), are onerous and complicated. The DPF allows for the safe and secure flow of data for U.S. multinational corporations and organizations doing business with those in the EEA. The importance of this data flow cannot be overstated – organizations across all sectors, whether large or small, will have equal opportunity to participate in the digital economy and to engage in streamlined international commerce.

There are three branches of the DPF – the EU-U.S. DPF, the Swiss-U.S. DPF, and the UK Extension to the EU-U.S. DPF. With the July adoption of the EU-U.S. DPF by the EC, the EU-U.S. DPF permits flow of information from the E.U. to the U.S. The Swiss-U.S. DPF and UK Extension to the EU-U.S. DPF will enable personal data transfers from those jurisdictions if and when the Swiss and UK Governments officially recognize the adequacy decision.

In the U.S., the DPF is implemented and administered by the U.S. Department of Commerce (DOC), and on July 17, 2023, the DOC launched the Data Privacy Framework program website. …

July 18, 2023

Where Can a Corporation Be Sued For, Well, Anything? (An Evolving Test)

Pittsburgh, PA

Litigation Alert

(By Christina Manfredi McKinley and Joseph Schaeffer)

The 14th Amendment to the United States Constitution provides that no state shall “deprive any person of life, liberty, or property, without due process of law.” U.S. Const. Am. XIV § 1. For corporations, the question of what constitutes due process—and specifically, where the corporation can be sued for conduct unrelated to corporation’s conduct in the forum (i.e., “general personal jurisdiction”)—has continued to evolve. Indeed, over the last century, the Supreme Court’s jurisprudence has contracted the available fora in which a corporation can be subjected to general personal jurisdiction, culminating in 2014 with the concept that there are only two locations in which a corporation is “at home” for general jurisdiction purposes:  where it is incorporated or where it maintains its principal place of business. This test has been a practical one, and has provided both (some degree of) certainty to corporate defendants and a disincentive to otherwise-inclined forum shoppers.

At the close of this past term, however, the Supreme Court in Mallory v. Norfolk Southern Railway Co.[1] rejected a due process challenge to a Pennsylvania law that requires out-of-state corporations to submit to general jurisdiction in the Commonwealth as a condition of registering to do business within Pennsylvania.

The concept of “personal jurisdiction” is an important one in the law. It refers to the ability of a court to take an action that is binding on parties in front of it.[2] A court that has “general jurisdiction” over a defendant can entertain any cause of action against that defendant, irrespective of whether the defendant’s complained-of conduct has a nexus to the forum. …

July 17, 2023

D.C. Circuit Decision Vacates PHMSA’s Final Rule Applied to Gathering Lines

Pittsburgh, PA and Washington, DC

PIOGA Press

(By Christina Manfredi McKinley and Keith Coyle)

On May 16, 2023, the D.C. Circuit issued a decision vacating in its entirety a challenged piece of a rule related to safety valve requirements for gas gathering lines. That decision, GPA Midstream Association and American Petroleum Institute v. United States Department of Transportation and Pipeline and Hazardous Safety Administration, held that the agency violated the Administrative Procedure Act and acted arbitrarily and capriciously when it failed to explain, let alone consider, why the rulemaking’s safety standard would be practicable and make sense for regulated gathering lines until issuing the final rule, when there could be no peer review or public comment.

In 2020, PHMSA published a notice of proposed rulemaking to comply with a Congressional directive to the agency to consider the use of valve, or automatic shutoff technology, on gas transmission lines. But the notice of proposed rulemaking and risk assessment said nothing about the costs and benefits of applying the standard to gathering pipelines. Nevertheless, because of certain pre-existing rules, new or replaced regulated gathering lines would have been subject to the proposed standard unless expressly carved out by the rule.

As such, in their comments to the proposed rule, the Petitioners sought an exemption for gathering pipelines. Among other things, they argued the risk assessment lacked the cost-benefit data needed to justify applying the rule to gathering pipelines. Knowing these objections, PHMSA proceeded with the rulemaking anyway. In the final rule’s preamble, PHMSA addressed some of the objections. It pointed out that the proposed rule never said regulated gathering lines would be exempt—which is correct because the proposed rule said nothing at all—and it included some data about gathering lines in the final rule’s risk assessment. …

June 29, 2023

Companies face uncertainties as governments crack down on PFAS

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring Jean Mosites)

Fluorinated chemicals, or per- and polyfluoroalkyl substances (PFAS), are a large and diverse family of chemical compounds used in myriad consumer, commercial and industrial products. Because these “forever chemicals” do not break down and tend to accumulate when released into the environment, numerous state and federal agencies are emphasizing, and increasingly enforcing, new waste and water management practices.

“They’re attempting to significantly reduce PFAS compounds that may be present in water, air, soil and many products to mitigate any health-related risks that may come with them,” says Jean M. Mosites, shareholder and co-chair of the Environmental Practice Group at Babst Calland. “Because of this, businesses are facing regulatory uncertainty, high costs of mitigation, and the potential for class-action litigation amidst increasing public awareness.”

Smart Business spoke with Mosites about the uncertainties facing businesses as governments work to address the known or suspected impacts of PFAS.

How have government regulations changed recently?

Recently, the Environmental Protection Agency (EPA) laid out a whole-of-agency approach to addressing PFAS. The roadmap sets timelines by which the agency plans to take specific actions and commit to bolder new policies.

Some states have already enacted laws regulating the presence of PFAS in drinking water, food packaging and consumer products. There have been increased federal and state regulation across a variety of program areas, including drinking water, site remediation and operational permits issued under the Clean Water Act.

Among the more sweeping recent government regulatory developments has been the EPA’s March 2023 proposal of a first-ever national drinking water standard called the National Primary Drinking Water Regulations. The proposed standard is far below any of the standards adopted by the states, all of which will need to revise their laws to be as strict as federal law when finalized. …

June 23, 2023

Employment Eligibility Verification Requirement Flexibility to End August 30, 2023

Pittsburgh, PA

Employment and Labor Alert

(by Alex Farone and Steve Antonelli)

All employers must soon resume physically inspecting the Form I-9 and employment eligibility documentation for new employees, a requirement that has not been strictly enforced since the beginning of the COVID-19 pandemic.

The U.S. Immigration Customs Enforcement (ICE) of the Department of Homeland Security (DHS) had temporarily allowed remote I-9 verification during the pandemic for employees working remotely. After several extensions, these permitted flexibilities are scheduled to end on July 31, 2023. ICE has announced that employers will have a 30-day grace period until August 30, 2023, to reverify in person all employment eligibility documents for employees who were hired after March 20, 2020 with virtual or remote examination. This requirement particularly relates to Section 2 of the Form I-9, where the employer must certify by signature under penalty of perjury that they have examined evidence of the employee’s identity and documentation authorizing them to work in the U.S. within three business days of the employee’s first day of employment, thereby verifying employment eligibility. For all new hires moving forward, the in-person verification requirements will resume on July 31, 2023.

Employers may perform the in-person inspections themselves by requesting that these employees visit the office or by sending another employee to perform the inspection in person. Alternatively, employers are permitted to designate an authorized representative, including non-employees such as third-party notaries, to conduct the in-person inspection on behalf of the employer. In fact, DHS permits any person other than the employee in question to act as an employer’s authorized representative. Some employers utilize third-party services for this function, and others request contact information for a friend or family member of the employee to have them perform this role. …

June 15, 2023

Seeing the Forest for the Trees: Understanding How Original Jurisdiction in ACRE Cases Impacts Your Municipality

Pittsburgh, PA

Legal Intelligencer

(By Michael Korns and Anna Hosack)

Municipalities in Pennsylvania are “creatures of the state,” and thus, have only those powers that have been granted to them by the Commonwealth.  One of the foundational statutes of Pennsylvania municipal law is the Pennsylvania Municipalities Planning Code (“MPC”), 53 P.S. § 10101 et seq.  The MPC grants municipalities the right to regulate subdivision, land use, and zoning, and establishes the procedures and guidelines that govern local land regulation.  However, the MPC is just a statute, and what powers the state has granted, it can just as easily take away.  A recent opinion from the Commonwealth Court shows the dangers of relying solely on the MPC procedural rules when other statutes are also potentially in play and highlights the importance of understanding when the normal day to day protocols of the MPC may be superseded by other laws.

In R. Bruce McNew v. East Marlborough Township, No. 29-MD-2022, 2023 WL 3081354 (Pa. Cmwlth. Apr. 26, 2023), the Pennsylvania Commonwealth Court revisited the impact of the Agricultural Communities and Rural Environmental Act (“ACRE”), 3 Pa.C.S. § 101 et seq., and the Right to Farm Act, 3 P.S. §§ 951-958 (“RTFA”), on a municipality’s ability to regulate forestry and timber harvesting within its boundaries.

Fundamentally, Pennsylvania municipalities have no inherent power of their own; but rather, they possess only such powers of government as are expressly granted to them by statute and as are necessary to carry the same into effect.  Through enactment of the MPC, the General Assembly authorized the governing body of each municipality to enact, amend, and repeal zoning and subdivision and land development ordinances to allow for local regulation of land use.   …

June 14, 2023

Why AI Isn’t Going to Replace Your Lawyer…Yet

Pittsburgh, PA

TEQ Magazine

(By Dane Fennell)

Artificial Intelligence (AI) has made its way into the legal profession — though not in the way that some news headlines might suggest. Recently, a program called ChatGPT passed several law and business school exams. However, for anyone who has any thoughts that we are entering an age of AI legal representation, flesh and blood lawyers who engage in utilizing AI on a daily basis can confirm that those days are a long way off.

“While AI is being used as a tool in a number of different areas of the law, it’s not yet capable of taking over all human roles,” says Dane Fennell, Senior Counsel at Babst Calland. “It’s just an arrow in the quiver that professionals can use to help them be more efficient, saving them and their clients time and money.”

Fennell discusses the state of AI technology in the legal profession — how it’s being used, and what it can and can’t do.

How would you characterize AI’s place in the legal world?

There are a number of ways that AI has found its way into the legal profession. For example, in M&A due diligence, AI can be used to review large volumes of documents to assist the legal team to home in on the key aspects of a deal with much more speed and efficiency than a manual review. This saves clients time and money, and actually enables the review team to expand the scope of a review to find the “needle in the haystack” issues.

Consumer-based programs are helping those who find themselves with relatively minor legal issues, such as parking tickets and credit card fees. …

June 13, 2023

Pennsylvania Supreme Court Vacates the Commonwealth Court 2018 Decision that had Invalidated “Public Resource” Portions of Chapter 78a Regulations

Pittsburgh, PA

PIOGA Press

(By Jean Mosites and Kevin Garber)

The Marcellus Shale Coalition v. Department of Environmental Protection and Environmental Quality Board, 573 M.D. 2016.

In April 2023, the Pennsylvania Supreme Court vacated the Commonwealth Court’s decision that had invalidated several “public resource” provisions in 25 Pa. Code Chapter 78a. The Supreme Court’s decision is an abrupt departure from its 2018 decision affirming the preliminary injunction on Count I that had been imposed by the Commonwealth Court in 2016. The Supreme Court’s latest ruling puts these regulations into effect in the well permit process for the first time.

There is no statutory right to judicial review of new regulations in Pennsylvania. Such challenges must proceed in the form of declaratory judgment action in the Commonwealth Court or “as applied” in an appeal before the Environmental Hearing Board on a case-by-case basis. The latter course is duplicative, lengthy and costly, offering only piecemeal relief. MSC challenged portions of the new Chapter 78a regulatory package through a declaratory judgment action in October 2016, seeking relief for its members from regulations beyond the scope of Environmental Quality Board’s (EQB) authority, regulations with high cost and little discernible benefit.

Count I of MSC’s Petition for Review challenged Sections 78a.15(f) and (g), and the related definitions contained in Section 78a.1 of the Chapter 78a regulations. The provisions created a new pre-permitting process for well permit applicants, requiring new notice and comment opportunities in addition to those expressly authorized by Act 13, as adopted in 2012. The relevant defined terms include:

Common areas of a school’s property—An area on a school’s property accessible to the general public for recreational purposes. …

June 13, 2023

The Future of Pennsylvania’s RGGI Rule Remains Uncertain

Pittsburgh, PA and Washington, DC

The Foundation Mineral and Energy Law Newsletter

Pennsylvania – Mining

(By Joseph Reinhart, Sean McGovern, Gina Falaschi Buchman and 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 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.

Three 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, which was granted. See Bowfin KeyCon Holdings, LLC v. PADEP, No. 247 MD 2022 (Pa. Commw. Ct. filed Apr. 25, 2022); Vol. 39, No. 3 (2022) of this Newsletter. Briefing has been filed and the court heard 30 minutes of oral argument in the case on November 16, 2022. On March 24, 2023, the Supreme Court of Pennsylvania granted requests to dismiss the preliminary injunction because the petitioners had failed to pay the bond required to secure the preliminary injunction. Petitioner Bowfin KeyCon Holdings, LLC, which has an interest in some of the subject coal-fired power plants, filed an appeal of the bond amount in summer 2022, claiming that the bond was infeasible or impossible to pay and asked the court to reduce it to a negligible amount. …

June 13, 2023

In Response to Environmental Groups’ Request, PADEP Declines to Issue Order to Shell Plant to Cease Operations

Pittsburgh, PA

 The Foundation Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(By Joseph Reinhart, Sean McGovern, Matthew Wood and Christina Puhnaty)

On February 17, 2023, the Clean Air Council (CAC) and the Environmental Integrity Project (EIP) sent a letter to the Pennsylvania Department of Environmental Protection (PADEP) requesting that the agency issue an order to Shell Chemical Appalachia LLC (Shell) to temporarily halt operations at the Shell Polymers Monaca Plant in Beaver County, Pennsylvania (Plant). See Letter from EIP & CAC to PADEP (Feb. 17, 2023). Specifically, CAC and EIP alleged that people living near the Plant had been exposed to volatile organic compounds (VOCs), nitrogen oxide (NOx), and other pollutants emitted in violation of Shell’s plan approval, the federal Clean Air Act, and the Pennsylvania Air Pollution Control Act (APCA). CAC and EIP cited PADEP’s February 2023 notice of violation (NOV) documenting the Plant’s exceedances of the 12-month rolling total emission limitations for VOCs in November and December 2022 and the 12-month rolling total emission limitations for NOx in December 2022, as well as the agency’s December 2022 NOV for the same VOCs emissions violations during September and October 2022. CAC and EIP also highlighted multiple malfunction reports submitted to PADEP by Shell documenting alleged violations of the visible emissions limitations of the Clean Air Act and Shell’s plan approval related to emissions from the Plant’s flares.

CAC and EIP urged PADEP to immediately act using the authority granted to it under the APCA, arguing that the statute allows the agency to issue orders to facilities to cease operations in violation of the APCA, plan approvals, or permits, citing as precedent a stop construction order PADEP issued in 2018 related to incidents during the construction of the Mariner East 2 pipeline. …

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