Articles, Alerts & Perspectives

Washington, DC and Pittsburgh, PA

(By Paul Gough)

Three advocates for Appalachian hydrogen and carbon capture buildouts said Pennsylvania and the tri-state region will need to focus on permitting and other legal hurdles ahead of the potential projects that are likely coming over the next several decades of the energy transition.

Jim Curry and Kevin Garber, attorneys at Babst Calland, and Michael Docherty, executive director of Appalachian Energy Future, spoke during a webinar on policy and regulatory issues surrounding hydrogen and carbon capture and storage, which the Biden administration is promoting as a solution to reducing the reliance on fossil fuels in energy, electricity production and heavy industry like metal and chemical manufacturing.

For the full article, click here.

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring 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.”

Smart Business spoke with Fennell about 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. …

Pittsburgh, PA

The Foundation Water Law Newsletter

(By Lisa Bruderly & Mackenzie Moyer)

On January 27, 2023, the Pennsylvania Department of Environmental Protection (PADEP) released the final 2022 Pennsylvania State Water Plan (Plan). The Plan is intended to inform decision making and educate the commonwealth on sustainable use of the commonwealth’s aquatic resources. It identifies regional and statewide water resource priorities and recommends over 100 statewide and legislative actions to address those priorities.

Background

The Water Resources Planning Act of 2002, 2002 Pa. Legis. Serv. Act 2002-220, requires PADEP to collaborate with statewide and regional committees to update the Plan every five years. However, the last State Water Plan was published in 2009.

PADEP identified five main goals for the Plan update:

1. A reviewed and updated State Water Plan having the input, guidance, and advice from a repopulated and reinstated statewide committee, six regional committees, and the public.
2. Approved and updated critical area resource plans (CARPs) within the Potomac and the Ohio planning areas left unfinished from the 2009 Plan Update.
3. Enhanced web-based applications and tools to deliver improved access to water resource information, data, and statistics for educational and water planning purposes.
4. Plan provisions to implement applicable water resource-related strategies outlined in the 2018 Pennsylvania Climate Action Plan.
5. An updated 2009 State Water Plan Atlas using a web-based GIS application.

The Plan is meant to be a source of water resource data, the latest information, and policy recommendations. It will assist PADEP and other state agencies with developing and implementing policies, programs, and projects that correspond with Pennsylvania’s current and future water needs.

Plan Recommendations

The updated Plan recommends over 100 actions in areas such as flood control, stormwater management, water withdrawal, legacy coal mining impacts, legacy oil and gas wells, drinking water and wastewater treatment, contaminants of emerging concern, and agricultural nonpoint source pollution. …

Pittsburgh, PA

The Wildcatter

(By  Nikolas Tysiak)

Welcome back, I hope everyone had an excellent holiday season. As always, the period covering December and January is usually the slowest time of year regarding judicial and legislative activity, and this year is no exception. Just one case of interest from Ohio, and some minor administrative code revisions in Pennsylvania.

Ohio Public Works Commission v. Barnesville, 2022-Ohio-4603. The village of Barnesville, OH, purchased about 104 acres of land as an “open space” project in connection with the Clean Ohio Conservation Fund, which is administered by the Ohio Public Works Commission (“OPWC”) in 2002. As part of the deal, OPWC required that Barnesville take deeds for the lands with certain covenants and restrictions, including a limitation on the use of the purchased lands, restricting the use of the property for the stated purposes, and empowering the OPWC to enforce the covenants and restrictions with various penalties attached. Barnesville subsequently leased the oil and gas under the lands at issue to Antero Resources in 2012, without the consent of OPWC. The Ohio Supreme Court found that the actions of Barnesville in regard to the oil and gas rights violated the transferability restriction imposed by the OPWC, overruling the 7th District Court of Appeals. However, the Supreme Court also determined that the lease to Antero violated the use restriction imposed by OPWC as part of the overall transaction and affirmed the appropriateness of injunctive relief in enforcing such restrictions, including an injunction deeming the oil and gas lease unenforceable. Consequently, the Supreme Court affirmed the decision of the 7th District Court of Appeals’, remanding the case for further consideration, accordingly.

Pennsylvania has amended several administrative code sections regarding VOC emissions control requirements arising custody transfer from the wellhead to transmission or storage. …

Washington, DC

Legal Intelligencer

(by Ben Clapp and Gina Falaschi Buchman)

On January 12, 2023, U.S. Environmental Protection Agency (EPA) published a notice of public comment period in the Federal Register requesting “Public Comment on EPA’s National Enforcement and Compliance Initiatives for Fiscal Years 2024-2027.”[1]  Though EPA is charged with the enforcement of many environmental statutes, like any agency with limited resources, it must prioritize enforcement efforts.  Every four years, EPA reviews its priorities and sets new enforcement and compliance initiatives for which it establishes specific goals and a comprehensive strategy.[2]

Over the years, EPA has used various names for these initiatives.  The program started as the National Priorities.  In 2010, the program was changed to the National Enforcement Initiatives in response to stakeholder feedback that the term “National Priorities” implied that EPA’s many other enforcement activities were of lesser significance programmatically or environmentally.  From 2010 to 2018, the program was known as the “National Enforcement Initiatives,” but EPA decided to “evolve the National Enforcement Initiatives program into a National Compliance Initiatives (NCIs) program by providing states and tribes with additional opportunities for meaningful engagement, by developing and applying a broader set of compliance assurance tools, and by aligning the NCIs with the Agency Strategic Plan measures and priorities.”[3]

On December 20, 2022, EPA released a memorandum entitled “Updated Policy for EPA’s Enforcement and Compliance Initiatives” which explains that “[w]hile criminal enforcement and civil enforcement (judicial and administrative) remain the key tools to address serious noncompliance, hold polluters accountable and create general deterrence, EPA also uses informal enforcement and compliance tools to advance the national initiatives.  …

Pittsburgh, PA

The American Oil & Gas Reporter

(By Lisa Bruderly)

The U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers have issued a new definition of “waters of the United States” (WOTUS), which becomes effective on March 20. The regulated community is watching this new definition of WOTUS because it will determine federal jurisdiction under the Clean Water Act.

For example, projects involving oil or natural gas development or pipeline construction require federal permitting for impacts from crossing, or otherwise disturbing, WOTUS. Generally speaking, the more impacts to such federally regulated streams and wetlands, the more complicated, expensive and lengthy the Corps Section 404 permitting.

In addition to determining the scope of federal permitting for the dredging/filling of streams and wetlands, the WOTUS definition also determines the scope of several other federal regulations, including regulations associated with National Pollutant Discharge Elimination System permitting, Spill Prevention, Control and Countermeasure plans and federal spill reporting. Although WOTUS is not defined in the CWA, the WOTUS definition appears in 11 different federal regulations.

Overview And Background

The agencies have promoted this final rule as establishing a “durable definition” that will “reduce uncertainty” in identifying WOTUS. However, this definition does not appear to provide much-needed clarity. Rather, generally speaking, the new definition codifies the approach that the agencies already have been informally utilizing to determine WOTUS, for example, relying on the definition of WOTUS from the late 1980s, as interpreted by subsequent U. S. Supreme Court decisions (such as the 2006 case, Rapanos v. United States). Challenges to the new definition are already underway.

The definition of WOTUS has been debated for nearly two decades, starting with several U. …

Washington, DC and Pittsburgh, PA

PIOGA Press

(By Gina Falaschi Buchman, Justine Kasznica, and Susanna Bagdasarova)

On November 14, 2022, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) published a proposed Federal Acquisition Regulation (FAR) rule that would require certain federal suppliers to annually disclose their greenhouse gas (GHG) emissions and climate-related financial risks, as well as set GHG emissions reduction targets, on an annual basis. 87 Fed. Reg. 68,312 (Nov. 14, 2022) (Proposed Rule). The Proposed Rule entitled the “Federal Supplier Climate Risks and Resilience Rule” implements President Biden’s Executive Order 14030, directing a number of federal agencies to take action to address climate-related risks and the Administration’s push toward net-zero emissions procurement by 2050.

The Proposed Rule would introduce a new FAR subpart 23.XX containing mandatory GHG emissions1 disclosure and reporting requirements for major federal suppliers, which are divided into “significant” and “major” contractors for purposes of the applicable requirements. “Significant contractors,” defined as federal contractors receiving at least $7.5 million but less than $50 million in federal contract obligations in the prior fiscal year, must conduct a GHG inventory of their annual Scope 12 and Scope 23 emissions and report the total annual emissions in the System for Award Management (SAM). “Major contractors,” defined as federal contractors receiving more than $50 million in federal contract obligations in the prior fiscal year, are subject to the same requirement with respect to Scope 1 and Scope 2 emissions and must also conduct and report the results of a GHG inventory of their annual Scope 34 emissions.

Major contractors are also required to use the Carbon Disclosure Project (CDP)5 Climate Change Questionnaire annually to complete a publicly available disclosure of their Scope 1, Scope 2, and Scope 3 emissions as well as their climate risk assessment process and any risks identified. …

Pittsburgh, PA

Eric M. Spada recently joined Babst Calland as senior counsel in the Litigation Group. Mr. Spada’s practice focuses primarily on commercial litigation. He has represented a diverse array of clients in a variety of cases in state and federal courts in Pennsylvania, Ohio, West Virginia, and Florida, and also in commercial and construction arbitrations. Mr. Spada has also practiced in front of real estate tax assessment and appeal boards and state and federal ALJs. His litigation experience includes matters relating to construction, real estate, energy and natural resources, tax assessments and tax exemptions, and financial services. He has also successfully litigated cases concerning closely-held business disputes, franchising, civil identity theft, and insurance fraud issues. Mr. Spada also has extensive experience in the e-Discovery space.

Prior to joining Babst Calland, Mr. Spada was an associate with Buchanan Ingersoll & Rooney PC. He is a 2008 graduate of George Washington University Law School.

Pittsburgh, PA

Legal Intelligencer

(By Jennifer Malik and Anna Hosack)

While municipalities continue to grapple with the repercussions of Slice of Life, proponents for another controversial residential use—community living or group homes—attempted to rely on Slice of Life to support a curative amendment to a zoning ordinance that would allow a community living use in a residential district.

In 2019, the Pennsylvania Supreme Court examined the zoning issues surrounding the increasingly popular use of single-family homes as short-term rentals in Slice of Life v. Hamilton Township Zoning Hearing Board, 207 A.3d 886 (Pa. 2019). In the nearly four years since Slice of Life was decided, many municipalities have relied on its holding to prohibit short-term rentals in residential zoning districts—reasoning that the purely transient use of short-term rentals is inconsistent with the common definition of “family” that is typically defined as a single household in local ordinances. While municipalities continue to grapple with the repercussions of Slice of Life, proponents for another controversial residential use—community living or group homes—attempted to rely on Slice of Life to support a curative amendment to a zoning ordinance that would allow a community living use in a residential district.

On Nov. 7, 2022, the Pennsylvania Commonwealth Court rendered a decision in Hope House in Midland PA v. Borough of Midland, PA, No. 145-CD-2022 2022 WL 16727674 (Pa. Cmwlth. 2022), affirming the denial of a property owner’s curative amendment that would have permitted a group home in a single family residentially zoned district. Although the court’s decision was unreported, it may be cited for persuasive value in the future and is indicative of the court’s interpretation of the boundaries of the holding in Slice of Life. …

Pittsburgh, PA

ACBA Young Lawyers’ Division newsletter Point of Law

(By Alexandra Farone)

On January 5, 2023, the Federal Trade Commission (FTC) proposed a national ban on noncompetition agreements. Noncompetition agreements, or “non-competes,” are contractual terms between employers and workers that prohibit the worker from working for a competing employer or starting a competing business, typically within a certain geographic area for a certain period of time. If a worker violates a non-compete clause, the employer can sue the worker for breach of contract and may be able to obtain a preliminary injunction enjoining the worker to stop the conduct that purportedly violates the non-compete clause. If successful in litigation, the employer may be able to obtain a permanent injunction and/or the payment of monetary damages. If the FTC’s proposed ban becomes final, this is all about to change.

As a basis for the proposed rule, the FTC made a preliminary finding that non-competes constitute an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act (the “Act”). Section 5 of the Act provides that “unfair methods of competition in or affecting commerce” are unlawful, and that the FTC is “empowered and directed” to prevent businesses from using unfair methods of competition.

Under the proposed rule, employers could not ask new employees, independent contractors, or even unpaid volunteers to sign non-competes. All existing non-competes would have to be rescinded, and employers would have to inform current and former workers on an individual basis that their noncompete is no longer in effect within 45 days of the rescission. The proposed rule would also prohibit employers from attempting to enter non-competes, or representing to a worker under certain circumstances that the worker is subject to an enforceable noncompete. …

Pittsburgh, PA

Smart Business

(By Sue Ostrowski featuring Susanna Bagdasarova)

A number of countries require businesses to identify individuals who have a beneficial ownership interest in a company, making it more difficult for illicit actors to hide behind a corporate entity and use it for potentially illegal purposes. Until now, the United States has not been one of them. That is changing thanks to the “Beneficial Ownership Information Reporting Requirements” final rule issued by the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The information, says Susanna Bagdasarova, an associate at Babst Calland, will be filed with FinCEN to create a national, non-public database for limited law enforcement and regulatory use.

“The intent is to curtail the deliberate misuse of business entities as shell companies for illegal purposes — to deter fraud, protect national security and prevent oligarchs or criminal actors from using entities to launder money or provide a cover for drug or human trafficking,” Bagdasarova says.

Smart Business spoke with Bagdasarova about which of the 32 million businesses estimated to be subject to the rule fall under that umbrella, when they need to file, and what it means for your business.

What does filing entail and who must do so?

‘Reporting companies’ (domestic and foreign business entities, including corporations, LLCs, and other entities formed or registered to do business in a state) will be required to file reports that identify themselves and provide identifying information regarding each beneficial owner and certain ‘company applicants.’ A ‘beneficial owner’ is an individual who directly or indirectly exercises substantial control over the reporting company, or holds at least 25 percent of the ownership interests of a reporting company. …

Harrisburg, PA

Legal Intelligencer

(by Casey Alan Coyle and Emily Davis)

Sometimes life imitates art.  The Disney animated film “Encanto” centers around a family, the Madrigals.  They live in a magical house that bestows upon each child in the family a unique gift, except the protagonist, Mirabel.  Mirabel soon discovers that the magic surrounding the house is in danger and seeks out the assistance of her ostracized uncle, Bruno.  The Madrigal family avoided mention of Bruno for ten years.  Mirabel knew the basics: he could predict the future.  But the contours of his powers, the details of his disappearance, the mere mention of his name—all forbidden topics of discussion.  The family even wrote a Grammy-nominated song about it, “We Don’t Talk About Bruno.”

Likewise, for nearly a decade, the Pennsylvania Supreme Court has declined to further discuss its holding in Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2014), despite numerous calls for clarification.  As a result, uncertainty remains regarding the “gist of the action” doctrine in Pennsylvania.  Therefore, just like the Madrigal family, there is one question permeating the legal community: is it finally time to talk about Bruno?

Contract v. Tort Distinction

The contract-tort distinction is fundamental to civil litigation.  While actions for breach of contract compensate the plaintiff for damages foreseeable at the time of a contract, tort claims remedy injuries resulting from the defendant’s conduct.  Nonetheless, the contract-tort distinction is often unclear.  Charles Miller, Contortions over Contorts: A Distinct Damages Requirement?, 28 Tex. Tech. L. Rev. 1257, 1257-58 (1997).  This blurred boundary is complicated by plaintiffs’ ability to recover additional forms of damages for actions sounding in tort that are not available for actions sounding in contract, like punitive damages.  …

Pittsburgh, PA

GO-WV

(By Lisa Bruderly)

U. S. EPA and the U. S. Army Corps of Engineers (the Agencies) have issued a new definition of “waters of the United States” (WOTUS), which becomes effective on March 20, 2023. The definition of WOTUS determines federal jurisdiction under the Clean Water Act (CWA). For example, projects involving oil or natural gas development or pipeline construction require Corps permitting for impacts from crossing, or otherwise disturbing, WOTUS. Typically, the more impacts to such federally regulated streams and wetlands, the more likely the permitting will cause project delays and increase expenses.

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-need-ed 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’ 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). Justice Anthony Kennedy, however, advanced a broader interpretation of WOTUS in his concurring opinion, which was based on the concept of a “significant nexus,” meaning that wetlands should be considered as WOTUS “if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered water.”

President Biden’s new definition directly quotes and codifies these tests as regulations that may be relied upon to support a WOTUS determination. …