Articles, Alerts & Perspectives

Pittsburgh, PA

The Wildcatter

(by Nik Tysiak)

Just a few cases to report this time.

Property Tax Assessment and Pipeline Valuation
The West Virginia Intermediate Court of Appeals in Lemley v. MarkWest Liberty Midstream & Resources, LLC, — S.E.2d —-(2025) established significant precedent for oil and gas transportation infrastructure taxation. The court affirmed the Office of Tax Appeals’ application of a 35% reduction in assessed value for 20-inch natural gas liquid pipelines due to economic obsolescence. The court held that external market forces beyond an operator’s control, including COVID-19 pandemic impacts, can justify substantial economic obsolescence adjustments when pipelines operate significantly below design capacity.

The decision recognized that beginning in 2018, MarkWest installed 20-inch NGL lines anticipating increased production that never materialized due to market conditions that lessened demand for NGLs and led to scaling back of planned natural gas processing facilities. The court found that calculations showing pipeline utilization at only 28%, 36%, and 47% of design capacity demonstrated that economic obsolescence was necessary to fairly value the pipelines. This represents a significant shift in how underutilized oil and gas transportation infrastructure may be assessed for property tax purposes.

The court also confirmed important procedural changes affecting oil and gas operators challenging property tax assessments. Effective January 1, 2023, the West Virginia Legislature transferred jurisdiction over contested property tax matters from county commissions to the Office of Tax Appeals, establishing OTA as an independent quasi-judicial agency with de novo hearing authority. Most significantly, the Legislature reduced the burden of proof for taxpayers from “clear and convincing evidence” to a “preponderance of the evidence” standard, representing a substantial reduction in the evidentiary burden for oil and gas operators disputing tax assessments. …

Pittsburgh, PA

TEQ Hub

(featuring Justine Kasznica)

The rapid growth of data centers – driven by cloud computing, artificial intelligence, and the need for low-latency digital infrastructure – has transformed what were once primarily real estate projects into some of the most complex developments in the energy and infrastructure sectors in our region.

At the core of modern data center development is power. Securing sufficient, reliable, and resilient electricity has become one of the defining challenges for developers, particularly as grid congestion, interconnection delays, and regulatory scrutiny increase. Many projects now require sophisticated power purchase agreements (PPAs), power generation agreements (PGAs), and on-site or co-located generation solutions to meet capacity and uptime requirements.

Today’s data center projects sit at the intersection of power generation, environmental regulation, land use, construction, and technology governance, requiring coordinated legal strategies across multiple disciplines. Babst Calland’s legal team has become increasingly involved from the earliest stages of development on projects – advising on site acquisition and control, evaluating water and energy access, and assessing regulatory and permitting risks across state and federal jurisdictions, and use and zoning approvals, including variances and conditional use permits, often require public hearings and coordination with local governments, which often add another layer of complexity and potential delay.

Behind-the-Meter Power and Islanded Systems Gain Momentum

Grounded in active, large-scale work, Babst Calland is currently guiding the development of well over 3,000 megawatts of new power generation capacity tied to data center projects across Pennsylvania and West Virginia. These projects range from hyperscale campuses to smaller modular facilities encompassing the design, permitting, interconnection, and financing of both behind-the-meter generation assets, such as natural gas turbines and solar paired with battery storage, as well as fully islanded power systems. …

Pittsburgh, PA

Breaking Ground

(by Marc Felezzola and Ryan McCann)

I. Blueprints for Disaster: Foundational Failures of a Different Kind

In construction, the biggest threat isn’t a faulty foundation, it’s a compromised inbox. Courts nationwide have seen a surge in cases involving fraudulent wire-transfer instructions due to bad actors inserting themselves into legitimate transactions and siphoning funds before anyone notices. Because progress payments routinely travel by wire and project timelines depend on fast, clean transfers, the construction industry is becoming an increasingly attractive target. Understanding how these schemes work, how to guard against them, and what remedies remain once the money disappears is now essential for every member of the industry.

II. How Wire-Fraud Schemes Operate

In 2024 and 2025, wire transfers were the payment method most frequently targeted by business email compromise scams. These schemes often unfold quietly: a hacker slips into a company’s email system, studies the back-and-forth between parties negotiating a payment, and waits until transfer of funds is imminent. Then the hacker intervenes—diverting legitimate emails, impersonating one party by using a near-identical address, and sending counterfeit wire instructions in the hope that the recipient won’t spot the subtle switch. Most businesses usually do not become aware of the fraud until it is too late. Additionally, scammers have found success through sending deceptive emails that appear to come from a trusted source to trick recipients into providing sensitive information. Similarly, hackers have also begun sending fake invoices that closely resemble legitimate ones from real suppliers leading companies to wire money directly into the scammer’s account.

III. Why the Construction Industry is Uniquely Vulnerable

Despite the availability of safeguards, many construction companies operate without them, making the industry uniquely susceptible to the very risks these practices are designed to prevent. …

Charleston, WV, Pittsburgh, PA, Harrisburg, PA

Babst Calland recently named Tiffany M. Arbaugh, Alexandra G. Farone and Stefanie Pitcavage Mekilo shareholders.

Tiffany Arbaugh practices in the Firm’s Charleston, W.Va. office and is a member of the Energy and Natural Resources and Litigation groups. Tiffany has more than twenty years of experience and focuses her practice on representing corporations in a variety of litigation matters with an emphasis in corporate transactions and all facets of energy-related litigation including mineral title, real estate, trespass, fraud, title curative, personal injury and toxic torts. Her practice also includes advising clients in customary business operations, litigation avoidance strategies and litigation preparedness. Tiffany is a 2005 graduate of Appalachian School of Law.

Alexandra Farone practices in the Firm’s Pittsburgh, Pa. office and is a member of the Employment and Labor, Litigation, and Emerging Technologies groups. Alex has extensive experience advising and representing corporate, technology, municipal, and energy clients in employment and labor law and complex commercial litigation. Her practice includes comprehensive human resources counseling and litigation for employers ranging from Fortune 500 companies and startups to municipalities, police departments, family-owned businesses, healthcare providers, financial services and technology companies. She advises on restrictive covenants, discrimination and harassment, disability accommodation, grievances, personnel best practices, contract negotiations, wage and hour issues, and collective bargaining, and litigates matters involving complex commercial disputes, trade secrets, employment discrimination, restrictive covenants, product liability, and toxic torts. Alex also has additional experience litigating matters concerning technology, insurance, construction, class actions, maritime, environmental, and oil and gas law. She is a 2017 graduate of the University of Pittsburgh School of Law.

Stefanie Pitcavage Mekilo practices in the Firm’s Harrisburg, Pa. office. Stefanie is a civil litigator who draws on more than a decade of trial-court experience in the federal judiciary to guide clients through all aspects of the litigation process. …

Pittsburgh, PA

The Legal Intelligencer

(by Jenn Malik and Peter Zittel)

Imagine sitting down for a virtual meeting where sensitive legal matters are being discussed and internal strategy decisions are unfolding, with everyone assuming the conversation is confidential and limited to the people on the call. Only later does someone in the meeting realize that a small “note-taker” icon was glowing in the corner of the screen, an artificial intelligence tool was present, recording and transcribing every word that was said. In that moment, the participants realize that what they assumed was a confidential discussion may indeed, not be so private.

These are the exact events that resulted in the filing of a nationwide class action in August 2025. In Brewer v. Otter.ai, plaintiffs allege that Otter.ai’s “Notetaker” and “OtterPilot” tools unlawfully intercepted and recorded private video-conference meetings without obtaining consent from all participants. The complaint claims the AI assistant joins calls as an autonomous participant, transmits conversations to Otter’s servers for transcription, records even non-account holders, provides little or no participant notice, and shifts responsibility for consent onto meeting hosts. Plaintiffs further allege Otter retained recordings indefinitely and used captured communications to train its AI models, including voices of individuals who were unaware they were being recorded. The lawsuit asserts federal wiretap and computer-access violations, multiple California privacy law violations, and common-law claims for intrusion and conversion, casting AI notetakers not as neutral productivity tools but as unauthorized third-party surveillance operating inside private meetings.

AI meeting assistants offer numerous benefits, including allowing participants who would otherwise be taking notes to stay fully engaged, automatically generating meeting summaries and action items, producing uniform and unbiased notes for all participants, and even identifying speakers by their voices.  …

Pittsburgh, PA and Washington, DC

PIOGA Press

(by Lisa Bruderly and Ethan Johnson)

On November 17, 2025, the U.S. Environmental Protection Agency (EPA) and Army Corps of Engineers (the Corps) proposed a revised definition of “waters of the United States” (WOTUS) under the Clean Water Act (Proposed Rule). The Trump administration announced that the Proposed Rule would “provide greater regulatory certainty and increase Clean Water Act program predictability and consistency.”

The new definition is expected to reduce the number of streams and wetlands that are regulated under the Clean Water Act and will impact several federal regulatory programs, including Section 404 permitting of impacts to regulated waters. The agencies drafted the Proposed Rule to closely mirror the U.S. Supreme Court’s 2023 decision in Sackett v. EPA, which held that the Clean Water Act extends to “relatively permanent” bodies of water connected to traditional navigable waters and wetlands with a “continuous surface connection” to those waters.

The Proposed Rule adds definitions for several terms, including “relatively permanent,” “tributary,” “continuous surface connection,” “prior converted cropland,” and “ditch.”

The public comment period will begin when the Proposed Rule is published in the Federal Register. If finalized, it will replace the Biden administration’s 2023 definition of WOTUS. The definition of WOTUS has changed several times in the last decade. Each new definition has been challenged in the courts.

Babst Calland will stay up to date on WOTUS developments and the Clean Water Act, in general. If you have any questions or would like any additional information, please contact Lisa Bruderly at (412) 394-6495 or lbruderly@babstcalland.com, or Ethan Johnson at (202) 853-3465 or ejohnson@babstcalland.com. …

Pittsburgh, PA

PIOGA Press

(by Kevin Garber and Alex Graf)

On November 12, 2025, Governor Josh Shapiro signed House Bill 416, a Fiscal Code Bill and a segment of the Pennsylvania budget package for Fiscal Year 2025-26.  The Fiscal Code has several important implications for industry regulation, including the abrogation of the Regional Greenhouse Gas Initiative regulations, permitting relief through expedited review schedules for certain air and water general permits, and provisions to ensure grid reliability.

The Fiscal Code abrogates the RGGI provisions contained in 25 Pa. Code Chapter 145, Subchapter E, known as the CO2 budget trading program.  The RGGI regulations were promulgated in 2022 but have not yet been implemented in Pennsylvania because of ongoing legal challenges.  In November 2023, the Pennsylvania Commonwealth Court ruled that RGGI is an unconstitutional, unenforceable tax.  Governor Shapiro and many other parties appealed that ruling to the Pennsylvania Supreme Court, where the case was fully briefed and argued last May.  Although the Court’s course of action remains uncertain now that RGGI has been abrogated, the Court could dismiss the appeal as moot and decline to issue an opinion.

The Fiscal Code also expedites permitting for certain air and water-related general permits. The Pennsylvania Department of Environmental Protection now must respond within 20 days of submission to an application under the Air Pollution Control Act for coverage under a general plan approval or general permit. If the applicant addresses the technical deficiencies within 25 days, DEP must issue a final determination on the application within 30 days thereafter. However, if DEP misses this deadline, the application is deemed to have been approved. DEP may seek a one-time, 5-day extension to respond if the applicant agrees. …

Pittsburgh, PA

The Legal Intelligencer

(by Janet Meub)

When can an employee hold its employer liable for harassment by a third-party? For instance, can a concierge hold a hotel liable for the inappropriate conduct of a paying guest? The consensus in many circuit courts, heavily influenced by the Equal Employment Opportunity Commission’s (EEOCs) guidance and procedural regulations, is that negligence is enough to answer that question in the affirmative.  If an employer knew or should have known of the third-party harassment and failed to take immediate action, the employer can be held liable. However, the Sixth Circuit recently strayed from the path of the negligence theory of liability, and in Bivens v. Zep, Inc., 147 F. 4th 635 (Aug 8, 2025), held that Title VII “imposes liability for non-employee harassment only where the employer intends for the harassment to occur.”

To establish a sex-based hostile work environment claim under Title VII, a plaintiff must establish that (1) she is a member of a protected class (2) who faced unwelcome harassment, which (3) was based on her sex and (4) created a work environment that reasonably interfered with her work performance, for which (5) her employer is responsible. Employers can be held directly liable for the actions of their agents, whether those of a supervisor who can bind the company or those of a lower-level employee whose intentional acts are within the scope of employment can result in vicarious liability for the employer. Because sexual harassment does not serve any business purpose, most circuit courts have interpreted Title VII to require a showing that the harasser was either “aided in accomplishing the tort by the existence of the agency relationship” or that the employer was negligent in letting the employee commit the tort. …

Harrisburg, PA and Pittsburgh, PA

The Legal Intelligencer

(by Casey Alan Coyle and Ryan McCann)

Pleadings are the opening act of litigation—setting the stage, defining the cast, and signaling the story to come.  But Bernavage v. Green Ridge Healthcare Group, LLC, et al., No. 1576 MDA 2023 (Pa. Super. Ct.), which is pending on appeal before the en banc Superior Court, presents a plot twist: what happens when a plaintiff introduces an entirely new theory just as the curtain is about to fall and the house lights begin to rise?  Specifically, the appeal poses the question of whether a plaintiff is permitted to amend her complaint in the middle of trial to add allegations of the defendants’ recklessness and request an award of punitive damages.

Standard to Amend Pleadings

Rule 1033 of the Pennsylvania Rules of Civil Procedure governs amended complaints.  It states, in relevant part, that a party may amend a pleading—whether to “change the form of action, add a person as a party, correct the name of a party, or otherwise amend the pleading”— “at any time” “either by filed consent of the adverse party or by leave of court.”  Pa.R.Civ.P. 1033(a).  On its face, Rule 1033 does not impose a time limit on when a pleading such as a complaint must be amended.  Indeed, the Superior Court has held that a complaint may be amended “at the discretion of the trial court after pleadings are closed, while a motion for judgment on the pleadings is pending, at trial, after judgment, or after an award has been made and an appeal take therefrom.”  Biglan v. Biglan, 479 A.2d 1021, 1025–1026 (Pa. …