April 29, 2024

EPA Finalizes Rule Expanding Federal CCR Program

Pittsburgh, PA

Environmental Alert

(by Donald C. Bluedorn II, Gary E. Steinbauer, and Mackenzie M. Moyer)

On April 25, 2024, the U.S. Environmental Protection Agency (EPA) finalized changes to the coal combustion residuals (CCR) regulations to now regulate inactive surface impoundments at inactive electric utilities, known as legacy CCR surface impoundments. The Final Rule also imposes requirements on an additional, new category of CCR units, known as CCR management units, or CCRMUs. Regulated legacy CCR surface impoundments will need to comply with the requirements in Subpart D, as articulated in the Final Rule, beginning as early as six months after the date of publication of the Final Rule in the Federal Register and CCRMUs will need to comply with specified requirements beginning 21 months after publication.

The Final Rule is being promulgated in response to the August 21, 2018 opinion by the U.S. Court of Appeals for the District of Columbia Circuit in Utility Solid Waste Activities Group, et al. v. EPA, in which the Court vacated and remanded the provision of the 2015 CCR Rule that exempted inactive impoundments at inactive facilities from regulation. EPA is also expanding the CCR Rule to address CCRMUs due to the associated risks from the direct placement of CCR on the land; according to information obtained from EPA since 2015, these previously unregulated units are contaminating groundwater and pose risks similar to the risks associated with currently regulated activities. In the last year, EPA has focused on CCR Rule enforcement, adding “protecting communities from coal ash contamination” as one of EPA’s six National Enforcement and Compliance Initiatives for fiscal years 2024 through 2027. …

April 25, 2024

FTC Finalizes Non-Compete Ban, Legal Challenges Promptly Follow

Pittsburgh, PA

Employment and Labor Alert

(by Alex Farone)

On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to publish its proposed final rule banning most noncompetition agreements, or “non-competes.” The final rule becomes effective 120 days after its date of publication in the Federal Register, but legal challenges to the FTC’s authority to issue this ban will likely result in a stay in enforcement of the ban until litigation is resolved.

As of the effective date, the final rule would ban new non-competes with employees, independent contractors, and volunteers nationwide, on the basis that non-competes are an unfair method of competition and therefore a violation of Section 5 of the FTC Act, with one exception. The ban will not apply to a non-compete that is entered into pursuant to a bona fide sale of a business entity, the persona’s ownership interest in a business entity, or all or substantially all of a business entity’s operating assets.

The final rule will also void pre-existing non-competes, with two exceptions. First, existing non-competes for senior executives will remain enforceable after the effective date of the final rule. A “senior executive” is defined as a worker earning more than $151,164 annually who is in a policy-making position, meaning a company president, chief executive officer or equivalent, or any other person who has final authority to make policy decisions that control significant aspects of a business entity. Second, the ban will not apply where an existing non-compete has been breached and a cause of action accrued prior to the effective date.

The final rule will additionally require employers to provide “clear and conspicuous notice” to all workers, other than senior executives, with existing non-competes by the effective date stating that the non-compete will not be, and cannot legally be, enforced. …

April 24, 2024

EPA Designates Two PFAS as CERCLA Hazardous Substances and Issues Related Enforcement Policy Focused on “Major PRPs”

Pittsburgh, PA

Environmental Alert

(by Matt Wood and Jean Mosites)

On April 17, 2024, the U.S. Environmental Protection Agency (EPA) released a pre-publication version of its long-anticipated final rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), and their salts and structural isomers, as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  The final rule will be effective 60 days after publication in the Federal Register.  PFOA and PFOS are the two most prominent and studied compounds in a “family” of per- and polyfluoroalkyl substances (PFAS) consisting of thousands of manmade chemicals.  PFAS have been widely used for decades in various applications, including manufacturing water-, stain-, and heat-resistant consumer products, e.g., waterproof clothing and food packaging, and as ingredients in aqueous film forming foams (AFFF) used to extinguish certain kinds of chemical fires.  Research indicates that exposure to PFAS, which are prevalent and persistent in the environment, may cause various health-related impacts.

EPA’s designation of PFOA and PFOS as CERCLA hazardous substances is unprecedented and not uncontroversial because it is the first time the agency has made such designations using its authority under CERCLA Section 102, 42 U.S.C. § 9602.  Until now, CERCLA has always defined hazardous substances by reference to other statutes (e.g., the Clean Water Act and the Resource Conservation and Recovery Act).  To reach its conclusion that the designations were warranted, EPA says it evaluated available scientific and technical information about PFOA and PFOS to determine whether they “may present a substantial danger to public health welfare or the environment” as contemplated by CERCLA section 102(a).  EPA also conducted a “totality of the circumstances” analysis considering multiple factors, including benefits versus costs.  …

April 19, 2024

EPA Agrees to Impose Novel Water Quality Requirements for West Virginia Streams

Charleston, WV

Environmental Alert

(by Kip Power and Robert Stonestreet)

The federal Environmental Protection Agency (EPA) has agreed to impose novel water quality requirements for West Virginia streams to resolve a lawsuit filed by multiple environmental advocacy organizations.  On March 18, 2024, the Sierra Club, the West Virginia Highlands Conservancy, and the West Virginia Rivers Coalition (Plaintiffs) filed a lawsuit against EPA in the U.S. District Court for the Southern District of West Virginia (at Huntington). The suit alleges that EPA has improperly failed to take action under the federal Clean Water Act with respect to certain “biologically impaired” streams located in the Lower Guyandotte River Watershed in West Virginia. Specifically, Plaintiffs assert that because the West Virginia Department of Environmental Protection (WVDEP) has failed to do so, EPA must step in and develop pollution reduction plans (known as “total maximum daily loads” or “TMDLs”) for those streams.

However, rather than seek to reduce levels of conventional pollutants (e.g., iron, aluminum, etc.), the lawsuit addresses the concentration of dissolved minerals in the water (often referred to as “total dissolved solids” or conductivity). According to the Plaintiffs, certain levels of conductivity lead to an adverse impact (known as “ionic toxicity”) on specific species of aquatic life. Neither West Virginia nor EPA has developed a specific water quality standard for total dissolved solids or conductivity. A wide range of activities can affect conductivity levels of a stream, including wastewater treatment and earth disturbances associated with construction activities or mining. Naturally occurring conductivity levels can also vary widely among different streams.

About 10 days after the suit was filed, Plaintiffs and EPA announced a settlement, in the form of a proposed Consent Decree (CD). …

April 17, 2024

Governor’s Proposed PACER and PRESS Legislation Seek to Lower GHG Emissions

Pittsburgh, PA and Washington, DC

PIOGA Press

(By Kevin Garber and Jessica Deyoe)

On March 13, 2024, Governor Shapiro’s office announced the Pennsylvania Climate Emissions Reduction Initiative (PACER) and the Pennsylvania Reliable Energy Sustainability Standard (PRESS) legislative proposals. Together, these two initiatives seek to lower greenhouse gas emissions and promote the use of alternative energy for the electric energy grid in Pennsylvania. We note that first, as of the date of this article, the language of the bills has not been made publicly available and second, these initiatives are not mutually exclusive, so it is possible the legislature may pass only one of them.

Pennsylvania Climate Emissions Reduction Initiative (PACER)

PACER is a Pennsylvania-specific-cap-and-invest program that, if passed, would set a declining cap on carbon emissions from Pennsylvania’s fossil fuel-fired power plants and require them to purchase credits from the Commonwealth to offset emissions. It would also remove Pennsylvania from the Regional Greenhouse Gas Initiative (RGGI). PACER Credits would be tradeable emission credits, similar to RGGI credits; however, non-profit entities will not be allowed to purchase PACER credits to remove them from the market. This program would direct DEP to conduct a Pennsylvania-run auction similar to the RGGI program. DEP could be allowed to delegate the implementation of the auction to an agent but retain enforcement authority. If passed, DEP will be required to review the Pennsylvania Base Budget established under the currently enjoined RGGI regulation within 120 days to determine whether a new Base Budge should be established. The new regulation, if needed, would be promulgated by the streamlined Final Omit regulatory process.

Revenue from the sale of CO2 allowances under the PACER Program would fund the following recipients and programs: (1) consumers as an on-bill rebate by the Public Utility Commission; …

April 15, 2024

Public Posting 2.0: High Court Creates Test for When Social Media Posts Are State Action

Pittsburgh, PA

The Legal Intelligencer

(by Harley Stone, Anna Jewart and Alex Farone)

In August of 2023, we discussed the ongoing trend of recent cases to blur the line between public officials’ “public” and “private” digital communications and social media, focusing primarily on two 2023 Pennsylvania Commonwealth Court cases – Penncrest School District v. Cagle and Wyoming Borough v. Boyer.  In these cases the courts were called upon to decide when a public official’s own social media posts are “public” and therefore subject to disclosure under the Pennsylvania Right-to-Know Law (RTKL).  While release of messages or comments intended to be kept private can be embarrassing, on March 15, 2024, the U.S. Supreme Court weighed in on an issue that more directly impacts the legal interests of public officials: when does a public official’s social media activity on a personal account constitute state action under 42 U.S.C. §1983, subjecting the public official to liability?

Section 1983 provides a cause of action against “[e]very person who, under color of any statute, ordinance, regulation, custom, or usage of any State” deprives someone of a civil right granted under the U.S. constitutional or federal statute.  It protects against acts attributable to a State (interpreted to include local government agencies), not those of a private person.  When a person associated with a State or local government agency acts in a manner that allegedly deprives someone of a federal constitutional or statutory right, the question therefore arises as to whether that act rose to the level of “state action” that triggers potential §1983 liability or was merely the private conduct of that individual.  The line between private conduct and state action can be hard to draw, and the age of social media has only made such distinctions more difficult.  …

April 15, 2024

U.S. Environmental Protection Agency Finalizes National Primary Drinking Water Regulations for Certain PFAS Chemicals

Pittsburgh, PA

Environmental Alert

(by Jean Mosites and Mackenzie Moyer)

On April 10, 2024, the U.S. Environmental Protection Agency (EPA) finalized the National Primary Drinking Water Regulation (NPDWR) Rule regulating six per- and polyfluoroalkyl substances (PFAS) under the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq.  This final rule establishes the first-ever nationally enforceable drinking water standards for PFAS.  The final rule establishes Maximum Contaminant Level Goals (MCLGs) and Maximum Contaminant Levels (MCLs) for perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), perfluorononanoic acid (PFNA), hexafluoropropylene oxide dimer acid and its ammonium salt (HFPO-DA, commonly known as GenX chemicals), and perfluorohexane sulfonic acid (PFHxS).  The final rule also establishes a Hazard Index MCLG and MCL for mixtures containing two or more of PFNA, HFPO-DA, PFHxS, and perfluorobutane sulfonic acid (PFBS).

For PFOA and PFOS, the final 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).  The MCLs, which are legally enforceable, are set at 4.0 ppt for PFOA and PFOS.  The MCLs represent the maximum concentrations allowed in drinking water that can be delivered to users of a public water system and are informed by factors such as available treatment technologies and cost.  As a change from the proposed rule, the final rule sets MCLGs and MCLs for PFNA, PFHxS, and HFPO-DA at 10 ppt.

For mixtures of two or more of PFNA, PFHxS, HFPO-DA, and PFBS, the final rule establishes a Hazard Index due to the chemicals’ likely co-occurrence.  The Hazard Index is calculated by dividing the concentration of each of the four PFAS compounds by its Health-Based Water Concentration (HBWC; …

April 12, 2024

Trends and Developments in New Transportation and Energy Technologies

Pittsburgh, PA

Pittsburgh Business Times

(By James Chen)

The transportation industry is in “the midst of a revolution,” changing the paradigm of how we transport people and goods on the nation’s public roads, said James Chen. Chen, who heads the Transportation Technology and Energy practice at Babst Calland, speaks about trends and developments in new transportation and energy technologies.

“For the first time in 100 years, we’re shifting that technology completely to a whole new powertrain structure that uses stored energy in the form of electricity and motors to power vehicles,” Chen said.

Evolving from the dominant technology of internal combustion engines – gas and diesel-powered vehicles – the industry has seen incremental improvement, moving from leaded to unleaded gas, the use of catalytic converters and on-board diagnostic systems.

Now, the concept of a robust battery pack of stored energy that moves electric vehicles through harsh changes in weather, vibration and more is serving as a platform for new methods for stable, stationary environments outside the transportation realm, as in connectivity, data and data sharing.

The electric vehicle is also providing a platform in the area of autonomy – vehicles that almost drive themselves, recognizing lines on the road, pedestrians, other vehicles and roads signs.

“What you’re basically talking about is machine learning,” he said. “And machine learning, at the end of the day, is artificial intelligence.”

These new technologies are also relevant, Chen adds, because battery stored energy can help with demand across energy sectors as the focus moves from primarily fossil fuel burning to additional types of energy generation like wind, solar, hydro-power and nuclear. All are necessary to satisfy increasing demands for energy in the United States and abroad. …

April 5, 2024

Trends and Developments in New Transportation and Energy Technologies

Washington, DC

Washington Business Journal

(By James Chen)

The transportation industry is in “the midst of a revolution,” changing the paradigm of how we transport people and goods on the nation’s public roads, said James Chen. Chen, who heads the Transportation Technology and Energy practice at Babst Calland, speaks about trends and developments in new transportation and energy technologies.

“For the first time in 100 years, we’re shifting that technology completely to a whole new powertrain structure that uses stored energy in the form of electricity and motors to power vehicles,” Chen said.

Evolving from the dominant technology of internal combustion engines – gas and diesel-powered vehicles – the industry has seen incremental improvement, moving from leaded to unleaded gas, the use of catalytic converters and on-board diagnostic systems.

Now, the concept of a robust battery pack of stored energy that moves electric vehicles through harsh changes in weather, vibration and more is serving as a platform for new methods for stable, stationary environments outside the transportation realm, as in connectivity, data and data sharing.

The electric vehicle is also providing a platform in the area of autonomy – vehicles that almost drive themselves, recognizing lines on the road, pedestrians, other vehicles and roads signs.

“What you’re basically talking about is machine learning,” he said. “And machine learning, at the end of the day, is artificial intelligence.”

These new technologies are also relevant, Chen adds, because battery stored energy can help with demand across energy sectors as the focus moves from primarily fossil fuel burning to additional types of energy generation like wind, solar, hydro-power and nuclear. All are necessary to satisfy increasing demands for energy in the United States and abroad. …

April 4, 2024

Appellate Lineup: Looking Back at Recent Pennsylvania Cases of Note and Forward to Those on Deck

Pittsburgh, PA and Harrisburg, PA

Litigation Legal Perspective

(by Joseph Schaeffer and Michael Libuser)

Major League Baseball’s Opening Day is symbolic: for a short while, every one of the 30 teams has a chance at the World Series and every one of the 26 players on those teams’ active rosters has a chance at emerging as a superstar. Over 162 games and thousands of at-bats, however, the winning teams and superstars separate themselves from the rest of the pack. Most of those games and at-bats will be remembered only by the participants, but a special few will live on in memory.

Litigation is not much different. Of the thousands of decisions issued each year by Pennsylvania’s appellate courts, most are relevant only to the parties to the dispute. A handful, though, have far broader consequences—whether by announcing a new legal principle or applying an existing legal principle in a novel manner. In this Legal Perspective, we highlight several recent decisions and a few that appear on the horizon.

Balls or Strikes? Reviewing the Pennsylvania Appellate Courts’ Recent Decisions

Sullivan v. Werner Co., 306 A.3d 846 (Pa. 2023)

Sullivan left undisturbed the longstanding prohibition on the admission of industry or government standards evidence in strict products liability cases. The defendant, a scaffold manufacturer, attempted to avoid liability in a design defect claim, in part by showing its compliance with OSHA and other standards. In a split decision, three of the six Pennsylvania Supreme Court Justices who presided over the appeal rejected that defense. Sullivan was unexpected. The Court adopted the prohibition on compliance evidence in the 1980s, in Lewis v. …

April 3, 2024

Legislative & Regulatory Update

Charleston, WV

The Wildcatter

(By Nikolas Tysiak)

A dose of new case law has arisen in Appalachia this winter. Enjoy!

West Virginia

For those paying attention, there has been some litigation regarding the West Virginia statutory pooling laws passed in 2022. In Sonda v. West Virginia Oil and Gas Conservation Commission, two landowners sued the West Virginia Conservation Commission, challenging the new pooling laws (W. Va. Code §22C-9-1, et seq.) in federal court, alleging an unlawful taking without due process of law under the U. S. Constitution. Instead of proceeding on the merits, the U.S. district court for the Northern District of West Virginia unilaterally decided to abstain from hearing the case, stating that the parties needed to litigate in West Virginia state court first, without identifying the issues that needed to be resolved in state court. The U.S. Fourth Circuit Court of Appeals found that the U.S. District Court had “abused its discretion” in abstaining from the action, as there were clear questions of federal law presented for adjudication and no clear statement of state law issues to be decided. In order to abstain as attempted by the District Court, there must be an unclear issue of state law which may render the need to go to federal court moot. The Court of Appeals therefore reversed the District Court Order of Abstention and remanded to that court for further proceedings.

Ohio

The U.S. District Court for the Southern District of Ohio, Eastern Division, confronted a question of whether the Point Pleasant formation constituted part of the Utica Shale, or a deeper formation. In Honey Crest Acres LLC v. Rice Drilling D LLC (2024 WL 1155970 (March 18, 2024 S. …

March 29, 2024

Safe, Secure, and Trustworthy: White House Executive Order on Artificial Intelligence

Pittsburgh, PA

Pennsylvania Business Central

(By Mary Binker and Susanna Bagdasarova)

On October 30, 2023, President Biden issued Executive Order 14110 on “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,”[1] taking a significant step toward shaping the future of AI[2] and its regulation. The Order, which reflects growing calls for federal guidance on AI from public and private stakeholders, focuses on establishing a framework for safe, secure, and trustworthy AI development, focusing on ethical innovation, national security, and global cooperation. The Order builds on the White House’s October 2022 “Blueprint for an AI Bill of Rights”[3] and the National Institute of Standards & Technology’s (NIST) January 2023 “Artificial Intelligence Risk Management Framework.”[4]

The Order is broad in scope, covering a spectrum of industries and issues, including the establishment of new standards for AI safety and security; protection of privacy; advancement of equity and civil rights; support of consumers, patients, and employees; and promotion of innovation and competition.

Although the Order is primarily applicable to federal agencies, it reflects a vision and roadmap for AI regulation intended to guide both industry standards and future federal legislation.

The Order sets out eight principles and priorities to guide policymaking on AI systems:

  • AI must be safe and secure, requiring robust, reliable, repeatable, and standardized evaluations of AI systems, as well as mechanisms to test, understand, and mitigate risks.
  • The U.S. should promote responsible innovation, competition, and collaboration through investments in AI-related education, training, development, research, and capacity as well as by opposing monopolies and unlawful collusion with respect to key assets.

    • …

March 27, 2024

New to Whom? The Fifth Circuit strikes down EPA’s attempt to regulate ongoing uses of PFAS under TSCA’s “significant new use” provision.

Pittsburgh, PA and Washington, DC

Environmental Alert

(By Joseph Schaeffer and Sloane Wildman)

On March 21, 2024, the U.S. Court of Appeals for the Fifth Circuit issued an opinion in Inhance Technologies, L.L.C. v. U.S. Environmental Protection Agency, No. 23-60620 (5th Cir. Mar. 21, 2024) that confirmed the obvious: a company that has a 40-year history of using perfluoroalkyl substances (PFAS) in its fluorination manufacturing process is not engaged in a “significant new use” under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601-2697. While not preventing the U.S. Environmental Protection Agency (EPA) from regulating existing uses of PFAS under other TSCA provisions, this common-sense conclusion provides industry with much-needed clarity and predictability.

TSCA Background

TSCA was enacted in 1976 to regulate chemicals that “present an unreasonable risk of injury to health or the environment.” 15 U.S.C. § 2601. EPA may do so in one of two ways. Under TSCA § 5, EPA may regulate the use of “new chemical substance[s]” and any “significant new use” of chemical substances. 15 U.S.C. § 2604. To determine whether use of a chemical substance is a significant new use, EPA considers four factors:

(1) the projected volume of manufacturing and processing of a chemical substance; (2) the extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance; (3) the extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance; and (4) the reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.

15 U.S.C. § 2604(a)(2). …

March 27, 2024

Federal Court Dismisses Challenge to WV Pooling Statute

Charleston, WV

Energy Alert

(by Robert Stonestreet and Austin Rogers)

A federal court has dismissed a challenge to the validity of a West Virginia law authorizing pooling and unitization of oil and gas formations associated with Marcellus and Utica shale wells.  The court concluded that the mineral owners who filed the suit lacked standing to bring their claims because they failed to allege an actual injury from the challenged law.

As reported in an Alert published on February 1, 2024, the Fourth Circuit Court of Appeals directed the lower court, Judge John Preston Bailey of the District Court for the Northern District of West Virginia, to resolve a pending lawsuit challenging the law, known as Senate Bill 694, enacted by the West Virginia Legislature in 2022.  This includes a determination of whether the mineral owners established legal standing to challenge the law.  The District Court had previously abstained from addressing the merits of the claims or the legal standing of the mineral owners.

Judge Bailey ruled that the mineral owners lacked legal standing for at least two reasons. First, the Court observed that the mineral owners did not allege that their mineral interests had been adversely affected by the challenged law, that they were subject to unitization under the law, or that their royalties were diminished in any way by the law. Second, the Court found no causal connection between the mineral owners’ alleged injury and the enactment of the law.  The Court noted that the mineral owners did not explain how the agency they sued, the West Virginia Oil and Gas Conservation Commission, was affecting their mineral interest “in any way” or that future enforcement of the law against them was “imminent.”

If you have questions about this lawsuit or West Virginia law governing pooling and unitization, please contact either of the following attorneys to learn more: Robert Stonestreet at rstonestreet@babstcalland.com or 681.265.1364 or Austin Rogers at arogers@babstcalland.com or 681.265.1368.

March 27, 2024

Discovery Disputes: Best Practices from the Bench

Harrisburg, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(by Michael Libuser)

For judges and their law clerks, one of the most frustrating aspects of pretrial practice is managing discovery disputes. Some advocates view them as hiccups—trivial quarrels that demand little of the court’s time—but discovery disputes often present the first meaningful opportunity for parties to interface with the court. (Case-management conferences, brief as they are, and narrowly focused on scheduling and housekeeping matters, rarely present the same opportunity.) And discovery disputes can, in fact, win and lose cases, color pretrial proceedings by sowing antagonism between the parties, and bring a case to a halt. This article cobbles together the views of numerous federal and state judges, as well as former and current law clerks, regarding best practices for addressing discovery disputes to the court. Some of these best practices are obvious, but litigants routinely fail to heed the obvious, according to the judges and law clerks who generously shared their views on this topic.

Know the Rules

Judges are unanimous: Review local and judge-specific rules. Ignoring this obvious but often-neglected advice can chip away at a lawyer’s credibility, clutter the record, and create unnecessary work for all involved. Numerous judges, for example, require parties to informally notify chambers of discovery disputes before filing formal discovery motions. This requirement advances the goals of efficiency and helps keep costs down, and some judges will deny or strike a formal discovery motion filed in violation of it.

Vet Your Position

“My first piece of advice when a litigator arrives at an impasse with opposing counsel regarding a discovery issue is to carefully review the [procedural rules] on point and research caselaw to ensure that the position you are taking is sound.” One judge estimates that 70 percent of discovery disputes can be resolved under a straightforward application of black-letter rules and law. …

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