Articles, Alerts & Perspectives

Pittsburgh, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(by Joseph Schaeffer)

Whether attorneys have encountered an inadvertently produced privileged document in their own practice, it is a common enough occurrence that the procedure is well established: Suspend further review, sequester the document, and notify opposing counsel. What is not well-established is what attorneys should do when they encounter inadvertently produced non-privileged documents. A New York trial court recently dealt with this situation in a case of first impression.

In Pursuit Credit Special Opportunity Fund, L.P. v. Krunchcash, LLC et al., No. 615070/2022 (N.Y. Sup. Ct. Oct. 4, 2023), the plaintiff’s financial consultant had responded to a subpoena from the defendants by producing multiple emails with a Dropbox link in the message body. As the defendants discovered early in their review, the Dropbox link not only was “live,” it provided access to a bevy of the plaintiff’s sensitive internal files—including folders named “Legal,” “Tax,” and “Financial.” Rather than immediately notify plaintiff’s counsel, though, the defendants reviewed the Dropbox (with the exception of the “Legal” folder) and sent the plaintiff a letter about a week later that referenced the internal documents as part of a demand for voluntary dismissal of the litigation. The plaintiff responded by moving the trial court to order the defendants to show cause why they should not be sanctioned for accessing the Dropbox files.

The trial court granted the plaintiff’s motion and entered a sanction against the defendants of nearly $156,000, representing the plaintiff’s costs in bringing the motion. Though acknowledging the absence of directly applicable authority, the trial court found guidance in Rule 4.4 of the New York Rules of Professional Conduct. …

Pittsburgh, PA

Pretrial Practice & Discovery

American Bar Association Litigation Section

(by Andy DeGory)

The process of researching and identifying an expert witness can be a daunting task in a complex commercial litigation setting. However, securing the appropriate expert tailored to your needs can be a critical component of a successful litigation strategy. While there is no exact formula for expert witness selection, the following pointers can help lead your team towards the right witness and a favorable outcome:

• Utilize your colleagues and network. When starting your search for an expert witness, polling your colleagues and other connections in the legal field can instantly provide you with multiple favorable candidates. Furthermore, your network may be able to significantly narrow your search down to a few options that will fit the needs of your case. This option is also particularly helpful for lesser-experienced attorneys who might be starting an expert search for the very first time.
• Google is your friend. Litigation attorneys may joke about relying on Google for legal research, however, an expert-witness search is actually an appropriate opportunity to fire up the search engine. Google (or another search engine) allows you to cast a wide net to build your list of expert candidates prior to a more formal vetting of your options.
• Vet your candidates with Westlaw or Lexis. Once you have narrowed your search down to your favorite expert candidates, Westlaw and Lexis provide excellent tools for vetting your candidates’ background and history serving as an expert witness. In particular, these legal databases allow you to examine past cases in which the candidate has provided expert testimony, prior expert reports submitted in those cases, deposition transcripts (if available), and any motions in limine/to exclude the candidate’s testimony.

…

Pittsburgh, PA

Smart Business

(By Adam Burroughs featuring Michael Fink)

A company’s capitalization table, simply put, details who has what ownership within a company. That’s straightforward when the company has a single owner. But as other equityholders are introduced, it can become much more complicated.

While an accurate cap table is crucial for determining who gets paid what when a company is sold, it’s also important every day of the company’s life.

“Companies should start dealing with their cap table from day one and will need to stay on top of it throughout the entire life of the enterprise,” says Michael E. Fink, a shareholder at Babst Calland. “An orderly, up-to-date cap table is central to well-informed business decisions.”

Smart Business spoke with Fink about the role of the cap table and how failing to accurately maintain it can be costly.

How are cap tables used?

Cap tables are critical when a company seeks new investment, such as via a private placement of preferred stock. That’s because every investor — both new ones as well as current investors, who typically need to approve new investment — needs to know its position on the cap table post-investment and what impact a contemplated investment would have on its position.

As companies get new funding and prior owners see their positions diluted, a cap table tracks who has how much equity and what type. Introducing multiple equity series often imposes multiple voting thresholds, so the cap table allows management and stakeholders to see what sort of voting blocs serve to approve any corporate action. Such actions can range from mundane to fundamental, such as approving a merger or replacing somebody on the board of directors. …

Pittsburgh, PA and Washington, DC

FNREL Water Law Newsletter

(Lisa M. Bruderly, Mackenzie M. Moyer and Jessica Deyoe)

On January 28, 2023, the Pennsylvania Department of Environmental Protection (PADEP) released an updated draft of the Pennsylvania Post-Construction Stormwater Management Manual (Manual or PCSM Manual). This Manual is intended to establish guidance standards for the management of stormwater through the implementation of stormwater control measures (SCMs) and other measures to comply with the regulatory requirements under 25 Pa. Code ch. 102.

This Manual was developed to update and replace the Pennsylvania Stormwater Best Management Practices Manual that PADEP published in December 2006 in order to reflect and incorporate the advancements in stormwater processes since that time. The Manual now extends beyond the avoidance and minimization of historic stormwater problems to include mitigation through the regulation of municipal separate storm sewer systems and combined sewer systems. It also includes an increased focus on the resilience and maintenance of SCMs.

In the Manual, SCMs are synonymous with “best management practices” (BMPs) as defined in 25 Pa. Code § 102.1. This term is intended to reflect the improved understanding of stormwater management. The use of the term SCM is also intended to clarify the functions of stormwater BMPs, consistent with a national trend to do so.

Ultimately, the objective of the PCSM Manual remains the same as the 2006 Stormwater BMP Manual: “to protect, maintain, reclaim and restore water quality and the existing and designated uses of the waters of the Commonwealth.” Similar to other guidance documents, this Manual serves as a supplement to federal and state regulations, providing numerous examples of SCMs that can be employed to meet regulatory requirements. …

Pittsburgh, PA

Legal Intelligencer

(by Blaine Lucas and Anna Hosack)

A frequent, if folksy, recitation of the purpose behind zoning and land use restrictions is to prevent problems caused by the “pig in the parlor instead of the barnyard.”  In other words zoning regulations recognize sometimes a nuisance can be caused by putting the right thing in the wrong place.  Therefore, zoning ordinances attempt to keep more “offensive uses” away from more sensitive uses.  However, prohibiting a use on paper is one thing, ensuring ordinance compliance is another.  The Commonwealth Court in Township of Cranberry v. Randy J. Spencer, Nos. 568, 569, and 570-CD-2022 (Pa. Cmwlth. Aug. 30, 2023) (Spencer II)[1] recently considered one municipality’s decades long battle over operation of a junkyard in violation of its zoning ordinance.  A review of the history of this case provides the opportunity to consider the pros and cons of different enforcement options available to municipalities when faced with ongoing violations.

In Spencer, the owner of six parcels located in Cranberry Township, Butler County had been storing a multitude of junk vehicles (117 cars, 11 box trailers, 7 motorhomes, and 8 travel trailers) on his properties in violation of the Township zoning ordinance.  The Township had been trying for over a quarter century to induce the property owner to remove the junk vehicles, and he had even paid fines related to the same in the past – yet he never removed the vehicles.  In 2019, as authorized by Section 616.1 of the Pennsylvania Municipalities Planning Code, 53 P.S. §616.1 (“MPC”) the Township served five “enforcement notices” (referred to herein as “notices of violation” or “NOVs”) against five of the properties for the unlawful operation of a junk yard in the Township’s A-1 Conservation District.  …

Washington, DC

Former transportation executive and veteran regulatory and environmental attorney, James C. Chen, has joined Babst Calland as a Shareholder in the Emerging Technologies practice in the law firm’s growing Washington, D.C. office.

Mr. Chen brings his deep experience in strategic planning and managing legal, policy and regulatory affairs for public and private companies with a focus on emerging technologies in the transportation sector, particularly electrification and sustainable energy.

“A revolution is occurring in the transportation and energy industries – from how we generate and store energy to power various modes of transportation to how those modes are operated with autonomous and artificial intelligence systems to the way we source, process and recycle the minerals needed to enable those modes,” said Mr. Chen. “Moreover, the challenge facing this revolution is not just figuring out how to best power new transportation technology, it’s also about how to best operate the factories that manufacture them.”

For the past decade, in his executive leadership roles for several new transportation technology companies, Mr. Chen was instrumental in the commercialization of modern electric vehicles and the way they are distributed and sold. Most recently, he was Vice President of Public Policy & Chief Regulatory Counsel for Rivian Automotive, LLC and previously, was Vice President of Regulatory Affairs & Deputy General Counsel at Tesla, Inc.

“We are delighted that Jim Chen is now a part of our firm and our Washington, D.C. office,” said Babst Calland Managing Shareholder Donald C. Bluedorn II. “Jim is a great person, and he has an outstanding reputation and track record as a leader in the electric transportation and sustainable energy space. His industry experience and focused approach to providing strategic and creative solutions utilizing new technologies will be a tremendous resource for our clients.”

In addition to managing his own private practice, Mr. …

Pittsburgh, PA

Allegheny County Bar Association- Lawyers Journal

(By Peter Schnore)

The “Common Level Ratio” (CLR) is a figure calculated by a state administrative body every year for every county. It is calculated upon data that each county’s assessment office is to regularly provide to the state. It is expressed as a percentage – “ratio” is a misnomer.

The CLR is very significant in Pennsylvania tax assessment appeals, because Pennsylvania counties rely on irregularly-conducted “base year” assessments. By statute, the CLR is applied to a Board of Assessment or Court’s determination of current fair market value of a property at issue on appeal to set its assessment, with the intention that by doing so, the assessment will be sufficiently uniform with that county’s base year assessments.

Attention has been drawn to Allegheny County’s most recent CLRs following a challenge to how it was calculated for Tax Year 2022. The details of that case are very interesting, but are not germane to this article. This challenge ultimately resulted in a significant drop in that CLR, from 81.1% to 63.5%. The implications of this were significant: A property fairly assessed for 2022 based on the original CLR was suddenly more than 27% over-assessed (.811/.635 = 1.277). Allegheny County Council afforded property owners a second opportunity to appeal based on this development, and as one might expect, many property owners (those who were informed, and who had sufficient money at stake to make it worthwhile to appeal) took advantage of that opportunity. It is noted that the CLR applicable to Tax Year 2024 is 54.5%, further increasing the possibility that a given property is over-assessed.

Below are four observations regarding the Common Level Ratios. The first relates to Allegheny County, the others are points applicable statewide. …

Washington, DC

Case Western Reserve University – School of Law

(featuring Jim Chen)

On Sept. 28-29, two dozen of the foremost experts in climate change and international law gathered at Woodland Hall at the Cleveland Botanical Garden to debate how to respond to the increasing threat of global climate change. The event was organized by Case Western Reserve University School of Law’s Cox International Law Center and the school’s Burke Center for Environmental Law, and co-sponsored by the American Branch of the International Law Association.

Pictured above, alumnus Jim Chen (LAW ‘91), former vice president and counsel of Tesla and Rivian Motors, kicked things off as the Thursday evening dinner speaker with remarks about the need to safeguard human rights in the production of electric car batteries. Chen discussed a number of possible approaches to incentivize electric automobile manufacturers to adopt standards to protect the environment and human rights in their supply chain.

In his Friday morning welcome address, co-dean Michael Scharf set the stage by discussing how 2023 has seen some of the worst environmental disasters in our lifetime. “From continental-wide forest fires in Canada to floods of biblical dimension in Libya, climate change has been a daily fixture in the news this year,” he said. “In this context, I am pleased that CWRU School of Law was able to assemble such a prestigious group of experts to debate some of the most important questions facing international law: How should the international community enforce the newly recognized human right to a healthy environment? Is “ecocide” a viable international crime? Are environmental migrants entitled to refugee status? And can corporations be sued for climate change?”

John Knox, history’s first UN Special Rapporteur for Human Rights and the Environment, delivered the morning keynote address on Friday. …

Pittsburgh, PA and Washington, DC

The Foundation Water Law Newsletter

(Lisa M. Bruderly, Mackenzie M. Moyer and Jessica Deyoe)

On January 31, 2023, during his first month in office, Pennsylvania Governor Josh Shapiro signed Executive Order 2023-07, “Building Efficiency in the Commonwealth’s Permitting and Licensing Processes,” to improve licensing, permitting, and certification throughout the commonwealth. Pennsylvania’s agencies issue hundreds of licenses and permits each year. The Pennsylvania Department of Environmental Protection alone issues hundreds of permits each year, including National Pollutant Discharge Elimination System permits, erosion and sediment control permits, and water quality management permits. According to Governor Shapiro, Pennsylvanians “deserve a government that works efficiently and effectively to get them answers.” Press Release, Gov’r Josh Shapiro, “Governor Shapiro Signs Executive Order to Improve Commonwealth Licensing, Permitting, and Certification Processes by Establishing Standard Response Times and Money-Back Guarantee” (Jan. 31, 2023). The executive order aims to eliminate unpredictability and long wait times for businesses in the permitting process. Id.

Under the executive order, agencies had until May 1, 2023, which was 90 days from the signing, to compile a catalog of the licenses, certificates, and permits they issue, the statutory authority governing the length of time in which agencies must process applications, and the application fee charged by each agency. The Governor’s Office then began a review to establish efficient application processing times based on specific agency recommendations. Once these timeframes are established, if an agency fails to respond to an applicant within the identified timeframe, the agency must refund the application fee. See Press Release, Gov’r Josh Shapiro, “Shapiro Administration Announces All Commonwealth Agencies Take Critical Step in Improving Licensing, Permitting, and Certification Processes” (May 5, 2023). …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Matthew C. Wood and Gina F. Buchman)

On July 8, 2023, the Pennsylvania Department of Environmental Protection (PADEP) published a notice of availability of a new draft technical guidance document (TGD) entitled “Guidelines for the Development and Implementation of Oil and Gas Well Site Integrated Contingency Plans for Unconventional Well Sites,” TGD No. 800-2200-001 (July 6, 2023). See 53 Pa. Bull. 3649 (July 8, 2023). The draft TGD is intended to provide direction to unconventional gas operators regarding expected and useful information to include in unconventional well site emergency response plans and preparedness, prevention, and contingency plans.

PADEP hopes that the document will provide operators with a practical and consolidated approach to meeting requirements under multiple state regulations for emergency or contingency planning. PADEP also hopes that utilizing a “one-plan” approach will minimize duplicating effort and standardize the format of emergency response information. Plans prepared in accordance with this TGD are intended to satisfy the requirements of seven different PADEP regulations and guidance documents.

The draft TGD includes a plan template divided into sections to facilitate field use: (1) a plan introduction, with pertinent site contact information and administrative obligations, and “quick sheets,” providing critical information and maps for first responders and site personnel; (2) a two-part section containing site-specific information and the purpose of the plan and the procedures and actions operators, their agents, and responders will utilize to respond to an emergency at the site; (3) a section focusing on preparedness, prevention, and contingency planning as required across multiple regulations to reduce redundant information already incorporated into other sections of the plan; …

Pittsburgh, PA and Washington, DC

FNREL Mineral and Energy Law Newsletter

Pennsylvania – Oil & Gas

(Joseph K. Reinhart, Sean M. McGovern, Matthew C. Wood and Gina F. Buchman)

On June 29, 2023, the Pennsylvania House of Representatives passed House Resolution 131, a resolution directing the Legislative Budget and Finance Committee (LBFC) to study the revenue of Pennsylvania’s oil and natural gas industry. Since the enactment of Act 13 of 2012, producers in Pennsylvania have paid an impact fee based on production and pricing for unconventional gas wells. This differs from other states, including Texas, where producers pay a severance tax—a tax on the extraction of oil and natural gas.

The resolution, which was introduced by Representative Mandy Steele, directs the LBFC to conduct a study to determine the revenue Pennsylvania may have collected since the enactment of Act 13 if a severance tax had been implemented. The bill also directs the LBFC to report its findings and severance taxes, impact fees, or other oil or gas related taxes paid by producers in other states for natural gas production by June 2024.

The LBFC is a bipartisan legislative service agency consisting of 12 members of the General Assembly. The LBFC conducts studies and makes recommendations regarding the elimination of unnecessary expenditures, promotion of economy in government, and assurance that commonwealth expenditures are made in accordance with their legislative intent. The staff of the LBFC has experience in business administration, business analytics, economics, environmental science, public administration, law, and supply chain management. They have assisted the LBFC in a variety of public policy and state program areas, including emergency preparedness, community and economic development, education, environmental protection, game and fisheries, health and welfare, law enforcement, liquor control, local government, rural affairs, transportation, and veteran’s affairs. …