Articles, Alerts & Perspectives

Pittsburgh, PA

TEQ Hub

(by Kristen Petrina)

Artificial Intelligence (AI) is advancing at unprecedented speeds. AI relies on vast amounts of datasets for processing and model training, creating the challenge of balancing the benefits of AI, while protecting data privacy. As a result of improper data processing and usage, organizations are facing harsh penalties including AI usage prohibition, algorithm disgorgement, and multibillion dollar fines. When considering how to introduce AI into any organization, one of the first questions to consider is, “How can AI be utilized to drive innovation without violating privacy and misusing collected data?”

AI governance analysis should be under a privacy lens, as personal data is at the core of many opportunities that come with AI development. Privacy risks may result in societal and ethical impacts on individuals which speaks to the heart of responsible AI usage. Incorporating responsible AI practices is user specific to each organization and it is possible to protect privacy and drive innovation. In order to achieve both goals, organizations should consider data protection preventative measures before implementing AI into its processes.

• Data privacy should be addressed at the onset of AI implementation. Organizations should conduct risk assessments and consider data enablement through AI from the beginning before it becomes an issue. Generative AI in particular is self-learning, the more data fed into the model, the harder it will be to unwind or remove data if improperly used.
• AI and data privacy governance teams must work together from the beginning to address any risks that may arise. Organizations may consider forming an ethical AI committee engaging diversified team members to reduce potential bias in the development and design.
• Contemplate data inputs by asking questions such as what the existing and potential future data sources may be, what data will be collected, what are in the datasets, how to categorize the types of data, will the data modeling receive personal or sensitive data, should those things be included.

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Pittsburgh, PA, Charleston, WV, and Washington, DC

Babst Calland is pleased to announce that two lawyers were selected as 2025 Best Lawyers in America® “Lawyer of the Year” in Pittsburgh, Pa. and Charleston, W. Va. (by BL Rankings). Only a single lawyer in each practice area and designated metropolitan area is honored as the “Lawyer of the Year,” making this accolade particularly significant.

Receiving this designation reflects the high level of respect a lawyer has earned among other leading lawyers in the same communities and the same practice areas for their abilities, professionalism, and integrity. Those named to the 2025 Best Lawyers in America® “Lawyer of the Year” include:

Blaine A. Lucas, Litigation – Land Use and Zoning “Lawyer of the Year” in Pittsburgh, Pa.

Timothy M. Miller, Litigation – Environmental “Lawyer of the Year” in Charleston, W. Va.

View the award recipients here.

In addition, 40 Babst Calland lawyers were selected for inclusion in the 2025 edition of The Best Lawyers in America®, the most respected peer-reviewed publications in the legal profession:

• Chester R. Babst III – Environmental Law, Litigation – Environmental
• Donald C. Bluedorn II – Environmental Law, Litigation – Environmental, Water Law
• Lisa Bruderly – Environmental Law
• Joseph G. Bunn – Banking and Finance Law, Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law, Business Organizations (including LLCs and Partnerships), Commercial Transactions / UCC Law, Corporate Law, Mergers and Acquisitions Law, Mining Law
• Dean A. Calland – Environmental Law
• Matthew S.

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Pittsburgh, PA and Washington, DC

PIOGA Press

(by Kevin Garber, Gina Falaschi Buchman, and Sean McGovern)

On July 17, 2024, Governor Josh Shapiro signed the Carbon Capture and Sequestration Act into law, effective immediately.  This comprehensive new statute positions Pennsylvania to join a growing list of states, including North Dakota, Wyoming, Indiana, and West Virginia, that promote underground storage of carbon dioxide.

The Act authorizes the underground injection and sequestration of CO2; confirms that the surface owner of real property owns the subsurface pore space; gives the Pennsylvania Department of Environmental Protection statutory authority to obtain primacy to issue injection permits; transfers title to stored carbon dioxide to the Commonwealth fifty years after injection ends; and establishes the Carbon Dioxide Storage Facility Fund to defray the Commonwealth’s long-term monitoring and management costs.

The Act has three key aspects – pore space ownership, permitting and operating an injection and storage facility, and liability and long-term responsibility for sequestered CO2.

Pore Space Ownership.  The Act provides that the owner of the surface property interest owns the pore space beneath surface lands and waters of Pennsylvania.  “Pore space” means subsurface strata, formations, cavities, or voids, whether natural or artificially created, that can be used to store CO2.  Conveying surface ownership also conveys the pore space unless it is (or has been) excepted and reserved, similar to the conveyancing of oil, gas, and minerals.  The Act does not change Pennsylvania law regarding dominance of the mineral estate.  A notice regarding pore space, like the coal notice, is now required in property deeds.

If, through negotiations with pore space owners, a prospective operator obtains at least 75% of the ownership interest in pore space for a storage facility, the Environmental Hearing Board may include the remaining 25% in the proposed facility by issuing a “collective storage order” if the EHB finds that the operator satisfied the notice and other provisions of the Act.  …

Charleston, WV

The Wildcatter

(by Nikolas Tysiak)

July 2024 Legislative and Regulatory Article for MLBC

There are not a lot of relevant cases to report this period. Here are what the courts have been up to this month:

The West Virginia Intermediate Court of Appeals handled another important case regarding tax sales of oil and gas interests recently. In Northeast Natural Energy, LLC v. LT Realty Unlimited, LLC (— S.E.2d —; 2024 WL 338948 (July 12, 2024). The case arises from competing claims of title to oil and gas rights under approximately 119 acres of land in Clay District, Monongalia County. George Tennant owned interests in the Surface, Sewickley Coal, and the oil and gas associated with the 119 acres when he died in 1938. Two assessments were entered from 1938 through 1941 – the first covering 3/8 of the surface oil and gas under the land, and the second covering the Sewickley Coal interests under the land. In 1940, the lands of George Tennant were partitioned, as part of which all oil and gas and coal rights were reserved to the estate. The assessments for the surface dropped the oil and gas label, and only described “SUR” or surface as being the interest being assessed, entered in the name of the surface purchaser. George Tennant and his heirs continued to be assessed for the Sewickley Coal interests.

The Sewickley Coal rights and Oil and Gas rights descended to various heirs of George Tennant, but only the Sewickley Coal rights were separately assessed. Eventually, the successors to George Tennant executed deeds and leases with Northeast Natural Energy LLC and other parties, in 2015. However, in 1992, Shuman Inc. acquired a tax deed for the Sewickley Coal assessment for non-payment of taxes. …

Pittsburgh, PA

Pittsburgh Business Times

(by Kevin Douglass, Carla Castello, Stephen Antonelli)

Today’s businesses are subject to increasing workplace scrutiny concerning possible misconduct of their owners, officers, management, and personnel. When faced with an allegation that can potentially expose the company to legal, financial and reputational harm, it is critical that the company promptly investigate the facts and assess the business risk in order to make an informed decision on the best course of action.

Is an Internal Company Investigation Warranted?

Employee complaints, or even allegations from third parties, concerning improper workplace conduct should always be taken seriously. Whether the claims involve an entry level employee, a manager, a corporate officer, or anyone in between, the company should assess whether the allegations, if true, would constitute violations of law or company policies, or otherwise materially impact the company’s finances, culture, reputation, or workforce.

Workplace investigations are often sensitive. Employees may be reluctant to step forward and become the center of an investigation. They may also fear backlash from the individual(s) being investigated, particularly if they carry significant clout within the company. The company can assuage those concerns by reminding employees involved in the investigation of the company’s obligation to comply with applicable anti-retaliation laws and company policies. The company should also explain that it will perform the investigation with impartiality and (as much as possible) confidentiality, and that it will comply with the organization’s policies and procedures while minimizing business disruption.

Planning for and Conducting the Investigation

At the outset, the company must define the scope and purpose of the investigation (i.e. identify the allegations and the reasons for undertaking the investigation), select an investigation team, and determine a timeline for the investigation. …

Harrisburg, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(by Michael Libuser)

“Discovery sanctions serve the objectives of discovery by correcting for the adverse effects of discovery violations and deterring future discovery violations from occurring.” Taylor v. Illinois, 484 U.S. 400, 425 (1988) (Brennan, J., dissenting). Serving these objectives is important given the common refrain that “practitioners, judges, and academics . . . perceive discovery abuse . . . as a major, if not the major contributor to the growing cost and delay of litigation and to the dissatisfaction with our court systems in resolving civil disputes.” Earl C. Dudley, Jr., “Discovery Abuse Revisited: Some Specific Proposals to Amend the Federal Rules of Civil Procedure,” 26 U.S.F. L. Rev. 189, 190 (1992). Still, many litigators write off motions for sanctions as noncredible threats that rarely gain traction. See, e.g., William T. Gallagher, “IP Legal Ethics in the Everyday Practice of Law: An Empirical Perspective on Patent Litigators,” 10 J. Marshall Rev. Intell. Prop. L. 309, 341 (2011). And some judges have outspokenly decried them. A federal judge recently commented, “There are few things that I truly despise. The short list includes meatloaf, the Ohio State Buckeyes, and hangovers. It also includes motions for sanctions. It is no exaggeration to say that I hate, hate, hate motions for sanctions.” Boshears v. Polaris Eng’g, Inc. …, 2023 WL 2572204, at *1 (S.D. Tex. Mar. 20, 2023) (per Edison, J.). One form of discovery sanction—awards of expenses—is rarely imposed. Why that is so, and, more specifically, the extent to which state procedural rules authorize those awards, is the impetus for this practice point.

Pittsburgh, PA

Pittsburgh Technology Council

Firm Announces Strategic Partnership with Former PIT General Counsel Jeff Immel

Law firm Babst Calland announced today its plan to expand the firm’s capabilities in its Aerospace, Aviation and Airports practice through a strategic partnership with Jeff Immel, former general counsel of the Allegheny County Airport Authority (ACAA), the operator of Pittsburgh International Airport and Allegheny County Airport, and experienced aviation and aerospace attorney.

Prior to joining ACAA, Immel served as the head of U.S. aviation regulatory and legal affairs for Zipline International Inc. where he provided legal counsel in obtaining and maintaining all federal approvals necessary to begin unmanned aircraft systems (UAS) commercial package delivery operations in the U.S. He also served as the primary legal and regulatory counsel to Amazon Prime Air and Amazon Air and was an associate attorney for Jenner & Block and Jones Day where he advised clients on various aspects of aviation regulation and emerging technologies law. Prior to attending to law school, Immel served in the United States Navy as a combat fighter pilot, where he achieved the rank of Lieutenant Commander.

Led by Justine Kasznica, Babst Calland currently actively supports the mission and vision of the growing space industry in the region, and currently serves as general counsel for various aerospace contractors and suppliers and non-profit space organizations. Babst Calland is also in partnership with the Department of Defense and U.S. Space Force’s AFWERX/SpaceWERX hub in Pittsburgh, and is a founding member of the Pittsburgh-based Keystone Space Collaborative and the Moonshot Museum,

“We look forward to partnering with Jeff on many new endeavors as we forge new pathways in the aerospace, aviation and airport industries and helping our existing clients in these sectors to grow and expand,” said Justine Kasznica, shareholder, and chair of Babst Calland’s Emerging Technologies practice. …

Pittsburgh, PA

The Current (PA Chamber Business Blog)

(by Christina Manfredi McKinley)

On July 31, 2024, the Pennsylvania Chamber will offer a free webinar addressing the effect on the business community of three significant administrative law cases from the Supreme Court’s recently concluded term: Loper Bright, Corner Post, and Ohio v. EPA.

Moderated by the Chamber’s General Counsel and Vice President of Government Affairs Megan Martin, this experienced panel will discuss and debate some of the likely consequences for Pennsylvania’s business community in this new frontier of administrative law. Whether individually or collectively, the import of these cases on the existing administrative state cannot be understated. Particularly for businesses, which nearly always are subject to federal regulations in some capacity, these cases create both significant opportunities and corresponding risks.

The United States is, in part, governed federally by what has come to be known as “the administrative state.” That term refers to the network of administrative agencies—operating under the direction of the Executive Branch—that frequently write, interpret, and enforce their own rules, which, in turn, apply to the communities they regulate. The administrative state is expansive and includes agencies touching on nearly every facet of American life, from tax to immigration, the environment to government land, and labor to finance.

This past term, the United States Supreme Court (“SCOTUS”) handed down a number of decisions, which, individually and collectively, have the potential to reshape the administrative state as we know it:

• In Loper Bright v. Raimondo, SCOTUS overruled its 1984 decision in Chevron USA, Inc. v. Natural Resources Defense Council. That decision was the seminal case creating what had long been known as Chevron.

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Pittsburgh, PA and Washington, DC

The Legal Intelligencer

(by Jean Mosites, Sloane Wildman and Amanda Brosy)

Per- and poly-fluoralkyl substances (PFAS), known as “forever chemicals” due to their persistence in the environment, have been manufactured and used in a variety of industries for nearly 80 years.  Following decades of concerns with human health effects and environmental contamination, the United States Environmental Protection Agency (EPA) laid out its PFAS Strategic Roadmap: EPA’s Commitments to Action 2021-2024 (PFAS Roadmap) and emphasized the need to ensure science-based decision making.  PFAS Strategic Roadmap:  EPA’s Commitments to Action, 2021-2024, at 7 (October 2021) https://www.epa.gov/system/files/documents/2021-10/pfas-roadmap_final-508.pdf.  As EPA notes: “Regulatory development, either at the state or federal level, would greatly benefit from a deeper scientific understanding of the exposure pathways, toxicities, and potential health impact of less-studied PFAS.”  The most researched of the tens of thousands of PFAS are PFOA and PFOS, so EPA’s initial regulatory efforts focused on those two compounds.  But, as described below, the regulations developed under EPA’s PFAS Roadmap go beyond PFOA and PFOS, inviting scrutiny by the public, regulated entities, and various stakeholders.

PFAS are a group of manmade chemicals identified by chains of extremely durable fluorine and carbon bonds that have been manufactured and used in the U.S. since the 1940s.  While the PFAS family of chemicals includes the more commonly known and used PFOA, PFOS, and GenX, thousands of additional compounds are also classified as PFAS.  Because of their useful properties, including their resistance to heat, water, oil, and stains, PFAS have been utilized in many different industries and incorporated into numerous consumer products over the years.  Examples include firefighting foam (known as “AFFF”), roofing materials, coatings, stain-resistant carpets, water-resistant outdoor clothing and gear, food packaging, nonstick cookware, and personal care products, among others.  …

Harrisburg, PA

Morgan M. Madden recently joined Babst Calland as an associate in the Energy and Natural Resources, Public Sector and Employment and Labor groups. Ms. Madden represents traditional and renewable energy industry clients in land use and other local regulatory matters.  She also has served as a solicitor for several Pennsylvania municipalities and municipal authorities.  Ms. Madden provides a wide range of services to clients in both the public and private sectors, with an emphasis on land use, zoning, planning, labor and employment advice, and litigation.

Prior to joining Babst Calland, Ms. Madden served as an associate with Eckert Seamans Cherin & Mellott, LLC. She is a 2017 graduate of Widener University Delaware Law School.

Pittsburgh, PA

TEQ Hub

(by Chris Farmakis, Susanna Bagdasarova, Kate Cooper, and Dane Fennell)

By now, you have likely heard about the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) Beneficial Ownership Information Reporting Rule (the “Rule”) from your accountant, attorney, or business colleagues. Promulgated under the Corporate Transparency Act (CTA), the Rule requires most business entities to disclose information to FinCEN about their “beneficial owners”:  individuals who directly or indirectly own or control such entities.

Enacted as part of the Anti-Money Laundering Act in 2021, the CTA is intended to “prevent and combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activity.” The Rule aims to enhance transparency and support the mission of the CTA by requiring domestic and U.S. registered foreign entities to report information about their beneficial owners to FinCEN. Most entities in the U.S. will likely be required to comply with the Rule, and FinCEN estimates approximately 32 million business will be required to make a filing. The Rule exempts 23 types of entities from reporting requirements, primarily large or regulated entities already subject to various reporting requirements, such as banks, SEC-reporting companies, insurance companies, and ‘large operating companies’, as well as wholly owned subsidiaries of the foregoing.  Entities formed before January 1, 2024, have until 2025 to comply, while entities formed in 2024 have a 90-day compliance period.

Under the Rule, reporting companies must provide detailed personal identifying information for each individual beneficial owner, including name, date of birth, residential street address, and unique identifying number (such as a passport or driver’s license number). A ‘beneficial owner’ is a natural person who directly or indirectly owns or controls at least 25% of the ownership interests of a reporting company or who exercises ‘substantial control’ over the reporting company. …

Pittsburgh, PA and Washington, DC

Law360

(by Joseph Schaeffer and Jessica Deyoe)

On June 28, 2024, the modern administrative state died with the United States Supreme Court’s overruling of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Born in obscurity as a six-justice plurality opinion on the meaning of “stationary source” under the Clean Air Act, its two-step framework for resolving ambiguities in agency-administered statutes soon catapulted Chevron into the most-cited opinion in the Supreme Court’s canon. That framework required courts reviewing agency’s statutory interpretations to ask, first, whether Congress had clearly spoken to the precise question at issue. If so, the Congressional intent controlled over any contrary agency interpretation. But, if not, the Court was to defer to the agency as long as it offered a permissible construction of the statute, even if that construction was not the one the Court would have reached on its own.

Chevron and its two-step framework enjoyed a charmed childhood as a perceived means to achieving uniformity in interpretation of agency-administered statutes. But as Chevron entered its teenage years, and particularly once it entered adulthood, its original luster began to tarnish. Members of the bench and bar began to question how the deference owed to agency interpretations under Chevron could be squared with Congress’s directive in the Administrative Procedure Act that “the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.”[1] And some members of Congress and the broader public bemoaned Chevron as transferring power away from the legislative to the executive branch, enabling each new administration to offer a new gloss on statutory enactments that the prior administration had thought settled. …

Pittsburgh, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(by Lucy Wiesner)

Under the Federal Rules of Civil Procedure, parties may obtain discovery regarding any nonprivileged matter that is relevant to either party’s claim or defense and proportionate to the needs of the case. While irrelevant information falls outside the scope of the express language of the rule, courts are generally reluctant to allow parties to redact irrelevant information contained within an otherwise responsive document.

A recent decision from the Southern District of New York provides helpful guidance on when relevancy redactions may be appropriate and how parties can avoid motions practice to resolve disputes over their scope.

The case Kaiser Aluminum Warrick, LLC v. U.S. Magnesium, LLC, No. 22-cv-3105 (JGK) (KHP) (S.D.N.Y. Feb. 27, 2023) concerned the defendant’s failure to fulfill its contract to supply magnesium to the plaintiff. The defendant relied on a force majeure defense, citing unexpected equipment failures. During discovery, the defendant produced several otherwise responsive documents with relevance redactions, to which the plaintiff objected. The plaintiff moved the court to require the defendant to produce the challenged documents in full “arguing that redactions for relevance are disfavored when there is a protective order in place, as one is here.” Id. at *1. The defendant responded that the redacted information was “irrelevant and competitively sensitive, and therefore, it should not be required to be produced in unredacted form.” Id.

The court held that where relevancy redactions “are consistent with Rule 1 and Rule 26 and do not deprive the other party of context, they may be appropriate” but advised that “a party should request permission to make such redactions in advance of production.” Id.  …