Articles, Alerts & Perspectives

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring Audra Hutter)

Act 122 was signed into law on November 3, 2022, by Pennsylvania’s former Gov. Tom Wolf. This legislation makes various changes to Title 15 of the Commonwealth’s Consolidated Statutes, also known as the Associations Code. One notable change for businesses in Pennsylvania is the new mandatory Annual Report Filing. This requirement replaces the previous Decennial Report Filing requirement and aligns Pennsylvania with a majority of other states that already require similar annual report filings.

While the form is simple and inexpensive, the consequences of missing the filing date can be significant.

Smart Business spoke with Audra Hutter, an attorney at Babst Calland, about Act 122, the filing change, and what it means for entities doing business in Pennsylvania.

What is the filing requirement?

Now, every year, organizations must file a report with the Pennsylvania Department of State that includes their business name; jurisdiction; registered office address; the name of at least one director, member or partner; names and titles of the principal officers; principal office address and its Department of State provided entity number.

Filling out the form is relatively simple and will likely be very similar to the forms companies were previously required to fill out every 10 years. There will be a $7 filing fee for businesses, corporations, LLCs, limited partnerships, and limited liability partnerships. There is no fee for organizations that operate for not-for-profit purposes.

Who needs to file and when are the deadlines?

Organizations should receive information and a letter from the Pennsylvania Department of State letting them know that their filing deadline is approaching. …

Harrisburg, PA and Pittsburgh, PA

Legal Intelligencer

(by Casey Alan Coyle, Anna Jewart and Anna Hosack)

In December 2022, the Pennsylvania Supreme Court issued its opinion in Central Dauphin School District v. Hawkins, 286 A.3d 726 (Pa. 2022), the latest in a line of cases considering the intersection of the federal Family Educational Rights and Privacy Act, 20 U.S.C. §1232g (“FERPA”), and the Pennsylvania Right-to-Know Law, 65 P.S. §§67.101-67.3104 (“RTKL”).  The majority held that, while the school bus surveillance video at issue constituted an “education record” under FERPA, the school district was nonetheless required to release the video under the RTKL, following redaction of students’ personally identifiable information (“PII”).  Hawkins has clear implications regarding the treatment of school surveillance videos under FERPA and the RTKL.  However, Hawkins raises several questions, including whether a non-public record can “become” public through redaction, and therefore, be subject to disclosure under the RTKL.

RTKL

The RTKL is the state open records law.  It requires state and local government agencies, including public school districts, to provide access to “public records’ upon request, subject to certain exceptions.  The statute broadly defines a “public record” as a record of a Commonwealth or local agency that is not exempt under one of 30 enumerated exemptions, not protected by a privilege, and “not exempt from being disclosed under any other Federal of State law or regulation or judicial order or decree.”  A record in the possession of an agency is presumed to be a public record unless, inter alia, “the record is exempt from disclosure under any other Federal or State law or regulation or judicial order or decree.”  The RKTL also contains a disclaimer: “Nothing in this act shall supersede or modify the public or nonpublic nature of a record or document established in Federal or State law, regulation or judicial order or decree.”  Notably, the RTKL includes a provision mandating redaction of exempt information, Section 706.  …

Pittsburgh, PA

Christina Manfredi McKinley, a shareholder in Babst Calland’s Litigation, Energy & Natural Resources, and Environmental groups, was selected by The Legal Intelligencer as a “2023 Lawyer on the Fast Track” in Pennsylvania.

A graduate of The Catholic University of America Columbus School of Law, Ms. McKinley continually strives to provide business-oriented solutions to her clients and routinely serves as a general advisor, counseling clients on day-to-day legal and business matters on any number of issues. Her business-focused, proactive approach to problem-solving allows her to provide solutions to clients in a variety of industries. Her experience spans a wide range of industries, including manufacturing, retail, energy, chemicals, and environmental.

As a litigator who focuses on complex commercial matters, Ms. McKinley’s trial practice encompasses all phases of litigation, from early alternative dispute resolution through post-trial motions. She has concentrated experience in complex purchase agreement and commercial contracts disputes, protection of competitive interests (e.g., Lanham Act, unfair competition, tortious interference, trade secret protection, restrictive covenants), technology disputes (e.g., software services and license agreements), and corporate governance.

The Legal Intelligencer asked the Pennsylvania legal community to submit nominations for the annual Lawyers on the Fast Track honors. After reviewing their results, a six-member judging panel composed of evaluators from all corners of the legal profession and the state selected 29 attorneys as the 2023 Lawyers on the Fast Track. This recognition is only given to attorneys under the age of 40 who have demonstrated excellence in four categories: development of the law; advocacy and community contributions; service to the bar; and peer and public recognition.

Washington, DC

PIOGA Press

(By Ben Clapp and Gina Falaschi Buchman)

On March 22, 2023, Chubb, one of the world’s largest insurance companies, introduced new climate-focused underwriting standards intended to induce reductions of methane emissions from the oil and gas production sector.

Under the new standards, Chubb will continue to offer coverage only to clients that implement evidence-based plans to manage methane emissions including, at a minimum, a leak detection and repair (LDAR) program, elimination of non-emergency venting, and measures to reduce emissions from flaring. These criteria commence immediately, but customers will have time to develop an action plan based on their individual risk characteristics. Chubb has also committed to creating a customer resource center to support oil and gas insureds implementing these requirements.

Chubb also announced that it will immediately cease offering coverage for oil and gas projects in government-protected conservation areas designated by state, provincial or national governments. This will include conservation areas covered by International Union for the Conservation of Nature (IUCN) management categories I-V in the World Database on Protected Areas, which includes nature reserves, wilderness areas, national parks and monuments, habitat or species management areas, and protected landscapes and seascapes. A sixth IUCN category applies to protected areas that allow sustainable use, and Chubb plans to develop standards for projects in category VI areas and for oil and gas extraction projects in certain key zones not currently listed in the World Database on Protected Areas by the end of 2023.

It is unclear how Chubb’s new underwriting criteria will compare with existing and proposed federal and state rules like NSPS Part 60, Subparts OOOO and OOOOa, the proposed NSPS Part 60, Subparts OOOOb and OOOOc, and Pennsylvania’s 2022 Control of VOC Emissions from Unconventional and Conventional Oil and Natural Gas Sources Rules. …

Pittsburgh, PA

The Wildcatter

(By Nikolas Tysiak)

For this month’s edition of the Wildcatter, we have two cases from Ohio that are of interest.

In Tera, LLC v. Rice Drilling D, LLC (2023-Ohio-273; 7th Dist.), the Court of Appeals for Ohio’s 7th district was asked to overturn the significant award of monetary damages in favor of a landowner based on a trespass claim. The lease at issue expressly reserved all the oil and gas rights “in all formations below the base of the Utica Shale,” while production indicated that the wellbores had penetrated the Point Pleasant formation. The trial court found that such penetration violated the reservation language of the lease, resulting in the trespass. The Operators involved appealed on various grounds, conceding that the Point Pleasant formation is now considered a distinct rock formation, but was not considered separate from the Utica Shale at the time the leases at issue were executed in 2013 and 2014, and that the term “Utica Shale” held special meaning at that time in Ohio, allowing for the use of extrinsic evidence (evidence outside the lease document) to interpret the lease. The court of appeals agreed with the trial court that the term “Utica Shale” was entirely unambiguous and that no extrinsic evidence was warranted to interpret the same and upheld the trial court’s decision. The appeals court went on to indicate that some of the factors regarding the calculation of damages required further analysis at trial and remanded to the trial court with some instructions on damages calculations. The key takeaway being, at least at this time, in Belmont County, Ohio, leases covering the “Utica Shale” will not cover the Point Pleasant formation.

In Chartier v. …

Pittsburgh, PA

Legal Intelligencer

(by Matt Wood and Mackenzie Moyer)

On March 14, 2023, the U.S. Environmental Protection Agency (EPA) provided a pre-publication version of a proposed National Primary Drinking Water Regulation Rulemaking that would regulate six polyfluoroalkyl substances (PFAS) under the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq (PFAS Rule). The proposed PFAS Rule would establish Maximum Contaminant Level Goals (MCLGs) and Maximum Contaminant Levels (MCLs) for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS), two of the most common PFAS – a group of thousands of manmade chemicals used in various consumer, commercial, and industrial manufacturing processes since the 1940s – as individual contaminants. It would also establish a Hazard Index MCL for mixtures containing one or more of perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), perfluorohexane sulfonic acid (PFHxS), and perfluorobutane sulfonic acid (PFBS). Years in the making, the final PFAS Rule will be the first federally enforceable drinking water rule governing PFAS. EPA intends to finalize the PFAS Rule by the end of 2023.

PFAS have been used to make products water-, stain-, and heat-resistant and have been a key ingredient in some aqueous film forming foams (AFFF) used to extinguish flammable liquid fires (e.g., those that might occur on airports or military bases). PFAS are known as “forever chemicals” because they do not break down naturally in the environment. Due to these properties and their ubiquitous nature, PFAS have been found in various environmental media, such as groundwater (including drinking water), plants, animals, and in humans. Toxicity studies suggest that PFAS exposure can lead to adverse health effects.

For PFOA and PFOS, the proposed PFAS Rule sets MCLGs – non-enforceable health-based goals that represent the maximum concentration of a contaminant in drinking water at which there is no known or anticipated negative effect on a person’s health – at 0 parts per trillion (ppt). …

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring Kevin Douglass)

Many business owners are blindsided when a co-owner files a lawsuit against them detailing a list of grievances. When owners form a new business or an owner is added to an existing ownership group, the stakeholders are typically optimistic about the future. Owners often do not discuss or consider the possibility of future differences and may not address them in their written agreements. Consequently, when a disagreement inevitably arises, business owners frequently choose to minimize or completely ignore the dispute until considerable damage is done to the owners’ relationship, which allows these matters to fester and eventually disrupt the business. But with the right preventive approach, these challenges can be identified and resolved quickly and cost effectively.

“Even companies with just one owner eventually must deal with succession questions, so no business owner is completely immune from dealing with co-owners or the prospect of future owners,” says Kevin Douglass, shareholder at Babst Calland.

Smart Business spoke with Douglass about conflict resolution among business owners.

What can trigger disagreements among owners?

One common trigger is finances. If the company is doing very well, owners may feel entitled to more compensation or at least more input into how additional profits will be invested. In contrast, if the business begins to struggle, owners’ compensation, distributions and benefits may need to be decreased, and tough decisions made about the company’s direction.

Other reasons for conflict can include a change in an owner’s level of commitment or job performance, an owner’s desire for more authority and input into company management, or conflicting business strategies. …

Pittsburgh, PA

The Legal Intelligencer

(by Alex Farone, Janet Meub and Steve Silverman)

The National Labor Relations Board (NLRB) recently announced the return of a wide-sweeping ban on severance agreements that contain provisions that effectively silence certain employees. On February 21, 2023, the NLRB issued its decision in McLaren Macomb, 372 NLRB No. 58, reinstituting its pre-2020 precedent that severance agreements cannot contain: (1) confidentiality agreements precluding the employee from discussing the terms of the severance; and (2) non-disparagement clauses.

In McLaren, a Michigan hospital laid off eleven employees early in the COVID-19 pandemic after federal regulations prohibited the hospital from performing outpatient procedures or allowing nonessential employees to work in the building. The hospital offered these eleven employees a severance agreement that included a non-disparagement clause and a provision not to disclose the terms of the severance agreement. However, the NLRB determined that the severance agreement violated the National Labor Relations Act (NLRA) due to the inclusion of these provisions.

The Board reasoned that offering severance agreements containing broad confidentiality or non-disparagement clauses has a reasonable tendency to interfere with, restrain, or coerce employees’ exercise of their Section 7 rights under the NLRA to engage in protected concerted activity, which constitutes an unfair labor practice in violation of Section 8(a)(1). Under the NLRA, employers are prohibited from interfering with, restraining, or coercing employees who exercise their rights to engage in protected concerted activities, such as discussing the terms and conditions of their employment for the purpose of mutual aid and protection. According to the Board, the confidentiality and non-disparagement clauses in McLaren had a potential chilling effect on the employees’ exercise of their rights, because employees must waive certain Section 7 rights in order to receive the benefits of the severance agreement. …

Pittsburgh, PA

The American College of Environmental Lawyers (ACOEL)

(By Donald C. Bluedorn II)

Unless you have been hibernating this winter, you know about ChatGPT, the artificial intelligence chatbot that rolled out late in 2022. Its developer, OpenAI, describes ChatGPT as follows:

We’ve trained a model called ChatGPT which interacts in a conversational way. The dialogue format makes it possible for ChatGPT to answer followup questions, admit its mistakes, challenge incorrect premises, and reject inappropriate requests.

Or, for those of us who remember watching Star Trek, ChatGPT functions a lot like the computer on the Starship Enterprise – you ask it to do something, and it does it. People have experimented with ChatGPT to write computer code, draft poems, write term papers, and create visual art, among many others.

Recently I experimented with ChatGPT, in an effort to not be that “senior” lawyer who in the early 1990’s said, “I don’t need to learn this new email thing . . . .” More specifically, I asked ChatGPT to do two things:

1. Draft a short purchase and sale agreement for a 65-acre coal-fired power plant; and
2. Prepare a five-page memorandum on the definition of “Waters of the US.”

The results were surprising but instructive.

First, ChatGPT’s purchase and sale agreement was so basic, and so vanilla, that it would be useless to a lawyer hoping to prepare the document in a real transaction.  This surprised me because I had heard and read so many glowing reviews about ChatGPT that I anticipated a fulsome work product.  It is quite possible, if not likely, that much of this is attributable to “user error.”  If I spent more time describing the project and setting forth my anticipated parameters, I expect I would have received a better product.  …