Articles, Alerts & Perspectives

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring Alyssa Golfieri)

There are common pitfalls related to zoning and land use that can occur in real estate transactions. When acquiring a property with the intent to develop, redevelop, or continue an existing use, there are simple, inexpensive steps buyers can take to get ahead of and navigate these issues during the due diligence process.

“Local regulation and municipal cooperation can be a big hurdle,” says Alyssa E. Golfieri, a shareholder at Babst Calland. “But the zoning due diligence process doesn’t have to be complicated and can be started before buyers execute a letter of intent.”

Smart Business spoke with Golfieri about zoning and land use due diligence in real estate transactions.

What documents need to be acquired, reviewed and analyzed?

Before a buyer’s due diligence period expires, the buyer should confirm what, if any, zoning, land use and condemnation-related matters are or were pending, initiated, or approved that affect the subject property. Relying on the seller to provide relevant zoning and land use records is a major pitfall buyers fall into. It is rare that a seller can produce such records, especially when the seller isn’t the original developer. Buyers should take advantage of their state’s public disclosure laws because it is an easy, inexpensive process that can yield significant results. Submit the records request early in the process because municipalities have a generous range of time for response.

What should buyers know about existing permits and approvals?

Failure to confirm conditions or obligations that are imposed through existing permits and approvals is a common pitfall for buyers. Buyers need to understand what permits and approvals exist for the property and use as early as possible because they often contain conditions or ongoing obligations that become the buyer’s responsibility upon closing. …

Pittsburgh, PA and Washington, DC

GO-WV

(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 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.  …

Pittsburgh, PA

GO-WV

(By Lisa Bruderly)

On May 25, 2023, the U.S. Supreme Court issued a highly-anticipated decision that significantly narrows the extent of wetlands within the definition of “waters of the United States” (WOTUS), and, therefore, within the jurisdiction of the federal Clean Water Act (CWA). Under the majority opinion in Sackett v. EPA, the Court held that “waters” are limited to “only those relatively permanent standing or continuously flowing bodies of water” that are described as “streams, oceans, rivers, and lakes” and to “adjacent” wetlands that are “indistinguishable” from those bodies of water. Therefore, a wetland is only a WOTUS (and subject to CWA jurisdiction) if: (1) the adjacent body of water is a WOTUS (i.e., “a relatively permanent body of water connected to a traditional interstate navigable water”); and (2) the wetland has a “continuous surface connection” with that water “making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” As Justice Samuel Alito stated: Federally regulated wetlands “must be indistinguishably part of a body of water that itself constitutes ‘waters’ under the CWA. . . .  Wetlands that are separate from traditional navigable waters cannot be considered part of those waters, even if they are located nearby.”

The Sackett litigation involves Michael and Chantell Sackett, who have been unable to build a house because the U.S. Environmental Protection Agency (USEPA) and the U. S. Army Corps of Engineers (the Corps) determined that a wetland on their Idaho property was a WOTUS, requiring CWA Section 404 permitting.  Both the U.S. District Court for the District of Idaho and the Ninth Circuit sided with the Agencies’ WOTUS determination, citing the “significant nexus” test introduced by Justice Anthony Kennedy in his concurring opinion in the U.S. …

Washington, DC and Pittsburgh, PA

GO-WV

(Brianne Kurdock, Jim Curry, Gary Steinbauer, Lee Banse)

On May 5, 2023, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released the pre-publication version of a notice of proposed rulemaking (NPRM) titled “Gas Pipeline Leak Detection and Repair.” PHMSA published the NPRM in response to section 113 of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020 (PIPES Act). Section 113 of the PIPES Act directed PHMSA to promulgate final regulations by December 27, 2021, requiring operators of gas transmission, distribution pipelines, and certain gathering lines to conduct leak detection and repair programs.

PHMSA proposes to amend 49 CFR Parts 191, 192, and 193 to: increase the frequency of leakage survey and patrolling requirements; introduce leakage survey and repair requirements for liquefied natural gas (LNG) facilities; require grading and repairs of leaks; reduce the use of blowdowns and intentional venting; impose design, configuration, and maintenance requirements for relief devices to reduce emissions; expand reporting requirements; and require that Type A, B, and C gathering lines submit geospatial pipeline location data to the National Pipeline Mapping System (NPMS). PHMSA proposes a six-month effective date for this rulemaking.

Comments on the NPRM are due on July 17, 2023.

Scope

Among other notable features of the proposal, the scope of this NPRM extends beyond the Section 113 congressional mandate by including Type C gathering lines, underground natural gas storage facilities, and LNG facilities. The statutory mandate was limited to regulated gathering lines in a Class 2, 3, or 4 location, and new and existing gas transmission and distribution pipelines. …

Pittsburgh, PA

Legal Intelligencer

(by John McCreary)

Stare decisis is one of the fundamental principles of American jurisprudence. “It protects the interests of those who have taken action in reliance on a past decision.” Dobbs v. Jackson Women’s Health Organization, 597 U.S. ___, slip op. at 39 (2022). “’Precedent is a way of accumulating and passing down the learning of past generations, a font of established wisdom richer than what can be found in any single judge or panel of judges.’” Id. (quoting N. Gorsuch, A Republic, If You Can Keep It at 217 (Forum Books 2019). For the National Labor Relations Board (NLRB), however, stare decisis is often an impediment to desired outcomes, more honored in its breach than in the observance. The disregard for precedent likely results from the fact that the NLRB “is not a court whose jurisdiction over violations of private rights must be exercised. It is an administrative agency whose function is to adjudicate public rights in a manner that will effectuate the purpose of the [National Labor Relations] Act.” Guss v. Utah Labor Relations Board, 353 U.S.1, 13 (1957) (Burton, J. dissenting). The Supreme Court has recognized that administrative adjudication is a “’constant process of trial and error.’” NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266 (1975) (quoting NLRB v. Seven-Up Co.,344 U.S. 344, 349 (1953). Indeed, the Court has observed that the trial and error approach “differentiates perhaps more than anything else the administrative from the judicial process.” Id.

The five members of the NLRB are appointed by the President, subject to Senate confirmation, and serve staggered terms of five years, “excepting that any individual chosen to fill a vacancy shall be appointed only for the unexpired term of the member whom he shall succeed.” 29 U.S.C. …

Harrisburg, PA and Pittsburgh, PA

Legal Intelligencer

(by Casey Alan Coyle and Ed Phillips)

In 1993, Bill Murray starred in the film Groundhog Day, a comedy about a TV weatherman who becomes trapped in a time loop, forcing him to relive Groundhog Day over and over again.  The movie became a common reference during the height of the COVID-19 pandemic as people woke up, realized something was amiss, and then went on with a day that repeated the last.  Ever since a two-judge Superior Court panel issued its decision in Spencer v. Johnson, 249 A.3d 529 (Pa. Super Ct. 2021), Pennsylvania tort law has been caught in what seems to be a never-ending, “Groundhog Day” scenario regarding the scope of the Fair Share Act, 42 Pa.C.S. §7102.

The Fair Share Act

The doctrine of joint and several liability is a relic of the English common law dating back to the 17th Century.  See, e.g., Smithson v. Garth, 3 Lev. 324, 83 Eng. Rep. 711 (1691).  Pursuant to the doctrine, when multiple tortfeasors cause an indivisible injury, each tortfeasor is liable for the full extent of the damages regardless of the percentage of liability assessed by the jury.  The doctrine therefore allows the plaintiff to satisfy an entire judgment against any of the defendants—even when one defendant was responsible for only a small amount of the harm.  That meant that a defendant found liable for 1% of the harm could be forced to pay 100% of the verdict.  This anomaly incentivized plaintiffs to sue deep-pocket defendants to bankroll a much larger verdict than a jury might expect them to have to pay. …

Pittsburgh, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(By Joseph Schaeffer)

It is essential to follow the necessary steps so that a court has the authority to authorize alternative service of process when that becomes the only remaining option.

Early in 2023, in a class action arising out of the collapse of the FTX cryptocurrency exchange, a Florida judge denied the plaintiffs’ request for alternative service of the complaint on NBA legend (and one-time FTX pitchman) Shaquille O’Neal via social media. The judge held that the plaintiffs had not demonstrated that alternative service complied with Florida law—although perhaps he was simply skeptical that a 7-foot-1-inch, 325-pound former basketball star could not be personally served. Yet in another recent case—this one filed by two Georgia election workers against Rudy Giuliani—a District of Columbia judge granted the plaintiffs’ request for alternative service of a subpoena on Jenna Ellis, a former attorney for President Trump. Freeman v. Giuliani, No. 1:21-cv-03354-BAH (D.D.C. May 10, 2023). Why the difference?

For one thing, District of Columbia law expressly authorizes alternative service. It in fact had been authorized earlier in the same case. And perhaps even more importantly, the plaintiffs established that they had exhausted efforts at traditional service. They had contacted Ellis’s counsel and attempted to negotiate acceptance of service—until, that is, they learned that Ellis’s counsel no longer represented her. They had made multiple attempts at service at Ellis’s last listed address—until, that is, they learned that she had moved to Florida. And they made repeated, and unsuccessful, attempts to locate Ellis in Florida. Finally, the plaintiffs demonstrated that those efforts likely had made Ellis aware of the attempts to perform service. …

Pittsburgh, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(By Edward D. Phillips)

It is important to include key language in cases where a joint tortfeasor is obtaining a pro rata release.

When pretrial settlement negotiations are successful, one of the last crucial considerations in wrapping up the matter is to consider a release agreement that fully protects your client. In some instances, failing to include key language in a release can expose your client to liability long after obtaining an executed settlement agreement and release (SA&R). When sorting through numerous provisions in an SA&R that require modification or when drafting a SA&R from scratch, it is important to include key language in cases where a joint tortfeasor is obtaining a pro rata release.

For example, pursuant to Pennsylvania’s Uniform Contribution Among Tortfeasors Act, 42 Pa.C.S. § 8326, “[a] release by the injured person of one joint tort-feasor, whether before or after judgment, does not discharge the other tort-feasors unless the release so provides, but reduces the claim against the other tort-feasors in the amount of the consideration paid for the release or in any amount or proportion by which the release provides that the total claim shall be reduced if greater than the consideration paid” (emphasis added). Section 8326 encompasses both pro rata and pro tanto releases. Pro rata settlements reduce the final judgment by the settling defendant’s proportional share of the judgment, even where the settlement amount is not the same as the amount determined by the fact finder. Pro tanto settlements reduce the judgment only by the amount paid by the settling defendant(s).

Pursuant to Section 8327,

[a] release by the injured person of one joint tort-feasor does not relieve him from liability to make contribution to another tort-feasor, unless the release is given before the right of the other tort-feasor to secure a money judgment for contribution has accrued and provides for a reduction to the extent of the pro rata share of the released tort-feasor of the injured person’s damages recoverable against all the other tort-feasors

(Emphasis added.)

Accordingly, if the settling defendant obtains a release that does not include language expressly stating that it is pro rata release, then the release most likely will be construed to be a pro tanto release. …

Pittsburgh, PA

PIOGA Press

(By Lisa Bruderly)

An April 12, 2023, ruling by the U.S. District Court for the District of North Dakota has created a regulatory patchwork across the nation in which the definition of ‘waters of the United States’ (WOTUS), and subsequently, the jurisdiction of the Clean Water Act, now differs by state. For example, West Virginia and Pennsylvania currently rely on different WOTUS definitions to determine Clean Water Act jurisdiction.

This split creates more uncertainty about the extent that a project will impact WOTUS (if at all), what permitting will be required, and how much cost/time will be necessary to obtain appropriate permitting. It also creates inconsistencies from state to state on how the jurisdiction of the Clean Water Act is applied. For example, the Corps may determine that a water is regulated under the Clean Water Act based on the definition of WOTUS effective in one state, while the same water would not be federally-regulated based on the definition of WOTUS effective in another state. It will be difficult for regulating agencies to consistently differentiate between the two definitions, especially when a Corps District regulates WOTUS across states with differing effective definitions.

The nationwide split occurred when the North Dakota district court granted a preliminary injunction that halted the implementation and enforcement of the Biden administration’s new definition of WOTUS (2023 Rule) in the following 24 states: Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.

In granting the preliminary injunction, the North Dakota district court had harsh criticism for the 2023 Rule, noting that “the new 2023 Rule is neither understandable nor ‘intelligible,’ and its boundaries are unlimited.” It also stated that the 2023 Rule “raises a litany of other statutory and constitutional concerns.” The district court went further to state that the changing definitions of WOTUS “have created nothing but confusion, uncertainty, unpredictability, and endless litigation.”

The 2023 Rule was published as final in the Federal Register on January 18, 2023, (88 Fed. …

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. …