August 20, 2021

NHTSA Opens Investigation into Tesla Crashes Involving Autopilot

Washington, DC

EmTech Law Blog

(by Ashleigh Krick)

On August 13, 2021, the National Highway Traffic Safety Administration’s (NHTSA) Office of Defect Investigations (ODI) opened a Preliminary Evaluation (PE21-020) into crashes with in-road or roadside first responders involving Tesla vehicles where Autopilot was confirmed to have been engaged during the approach to the crash.  NHTSA cites to 11 crashes involving emergency vehicles that involved 17 total injuries and 1 fatality.  The earliest cited crash is the January 22, 2018, crash in Culver City, California, where a Tesla Model S rear-ended a firetruck parked along a California freeway. A National Transportation Safety Board investigation into the crash found that the driver was overly reliant on Autopilot and that Autopilot allowed the driver to disengage from the driving task.

In the investigation report, ODI described Tesla’s Autopilot as an SAE Level 2 Advanced Driver Assistance System (ADAS) system “in which the vehicle maintains its speed and lane centering when engaged within its Operational Design Domain (ODD).” Even with the ADAS active, ODI noted that the driver continues to hold primary responsibility for Object and Event Detection and Response (OEDR).  As such, ODI explained that the investigation will “assess the technologies and methods used to monitor, assist, and enforce the driver’s engagement with the dynamic driving task during Autopilot operation.”  ODI will also evaluate Autopilot’s ODD and OEDR.

While the investigation focuses on a relatively narrow issue—the ability of Autopilot to identify and respond to parked emergency vehicles—it reinforces the Agency’s interest in crashes involving SAE Level 2 ADAS systems that are being deployed on public roads.  Particularly, the Agency’s interest in how vehicle manufacturers are perhaps enforcing the driver’s engagement when these systems are activated.  

August 19, 2021

Keith Coyle Gives Testimony on the Environmental and Economic Benefits of Pipelines

Pennsylvania House Environmental Resources and Energy Committee Hearing

In his testimony on August 17, 2021 at the Pennsylvania House Environmental Resources and Energy Committee public hearing on the Environmental and Economic Benefit of Pipelines, Babst Calland Attorney Keith Coyle, chairman of the Marcellus Shale Coalition’s Pipeline Safety Workgroup, explains, “As long as we are relying on fossil fuels to produce power, we need pipelines to deliver them safely. …It’s pretty clear we are going to be relying on natural gas and petroleum for some time. There is no other way to do this safely and to move product in bulk besides these pipelines.”

To view the video of the full public hearing of the House Environmental Resources & Energy Committee on the Environmental and Economic Benefits of Pipelines, click here.

August 19, 2021

Privilege under Texas Audit Act Not Applicable in Federal Court

Environmental Alert

(by Julie Domike)

An August 10, 2021 decision by Judge Michael J. Truncale of the U.S. District Court for the Eastern District of Texas may upend assumed privilege for documents and studies gathered as part of an environmental self-audit in Texas. The Order on Motion to Quash Subpoena, Sierra Club v. Woodville Pellets, LLC, No. 9:20-cv-178, 2021 WL 3522443 (E.D. Tex. Aug. 10, 2021) addressed the subpoena for stack test reports sought by the Sierra Club in a Clean Air Act enforcement case against the wood pellet manufacturing facility in Woodville, Texas.

Background

On August 18, 2020, Sierra Club filed a complaint under the citizen suit provisions of the federal Clean Air Act, alleging that Woodville Pellets, LLC had violated the statute by emitting unpermitted amounts of air pollutants from its facility. The matter will be tried before a jury in November; during discovery, the Sierra Club sought reports of stack testing that Trinity Consultants conducted as part of a facility audit under Texas law. Failing to receive the documents from Woodville Pellets, the Sierra Club served a subpoena on Trinity, which is not a party to the litigation, seeking these and other documents. Woodville and Trinity moved to quash the subpoena on the grounds that the documents sought are privileged under the Texas Environmental, Health, and Safety Audit Privilege Act (Audit Act) and this prevents their production.

The Decision

The Court accepted that the stack tests were done as part of an audit under the Audit Act, which extends a privilege to documents gathered as part of an environmental self-audit. The privilege provides these documents are not admissible as evidence or subject to discovery in a civil action under state law.

August 19, 2021

Three Babst Calland Attorneys Named as 2022 Best Lawyers® “Lawyers of the Year”, 31 Selected for Inclusion in The Best Lawyers in America©, and 13 Named to Best Lawyers® “Ones to Watch”

Babst Calland is pleased to announce that three lawyers were selected as 2022 Best Lawyers “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 2022 Best Lawyers “Lawyer of the Year” include:

Kevin K. Douglass, Natural Resources Law “Lawyer of the Year” in Pittsburgh, Pa.

Mark D. Shepard, Bet-the-Company Litigation “Lawyer of the Year” in Pittsburgh, Pa.

Robert M. Stonestreet, Environmental Law “Lawyer of the Year” in Charleston, W. Va.

In addition, 32 Babst Calland lawyers were selected for inclusion in the 2022 Edition of The Best Lawyers in America (by BL Rankings), the most respected peer-review publication in the legal profession:

  • Chester R. Babst – Environmental Law, Litigation – Environmental
  • Donald C. Bluedorn II – Environmental Law, Water Law, Litigation – Environmental
  • Dean A. Calland – Environmental Law
  • Matthew S. Casto – Commercial Litigation
  • Frank J. Clements – Corporate Law
  • Kathy K. Condo – Commercial Litigation
  • James Curry – Oil and Gas Law
  • Julie R. Domike – Environmental Law, Litigation – Environmental
  • Kevin K. Douglass – Natural Resources Law
  • Christian A.
August 19, 2021

New Legislation Providing for Deployment of Small Cell Wireless Facilities Becomes Effective August 29th

The Legal Intelligencer

(by Krista Staley and Anna Jewart)

On June 30, 2021, Governor Tom Wolf signed Pennsylvania House Bill 1621, the Small Wireless Facilities Deployment Act as Act 50 of 2021 (“Act 50”), into law. This Act reflects years of negotiations between industry groups and municipalities over the balance of local land use authority and ease of deployment in small cell infrastructure deployment.  Effective August 29th, the Act standardizes the local permitting process for small cell facilities located within municipal rights-of-way.

As demand increases exponentially for faster and more reliable wireless service, so does the demand to develop infrastructure capable of providing greater coverage and capacity.  A decade ago, a single large cell tower on the outskirts of town could meet a community’s wireless voice and data service needs.  However, the reliability of these large “macro cell” wireless facilities has decreased as mobile data traffic exploded. The telecommunications industry responded by developing “small cell networks” distributed throughout communities and buildings to better meet to the constant on-the-go data needs of the modern age.  Instead of utilizing a single tower, possibly hundreds of feet high, small cell networks use multiple low-power antennas that connect to fiber optic cables. These small cell systems allow for greater speeds and more uniform coverage where they are deployed. However, they require a greater level of “wireless density” in order to function as intended.  In other words, small cell facilities must be installed every few blocks rather than every few miles.

To achieve the desired wireless density providers have sought to utilize existing utility poles, street lights, or other structures within municipal rights-of-way. This allows for ease of installation as well as proximity to users.  While the use of the right-of-way, and the existing infrastructure therein, is a convenient solution for wireless providers, the rapid development of these technologies has forced municipalities across the country to scramble to determine how to handle permits for the installation of small cell facilities within their communities. 

August 17, 2021

Regional Developments

The PIOGA Press

This is another excerpt from The 2021 Babst Calland Report, which represents the collective legal perspectives of Babst Calland’s energy attorneys addressing the most current business and regulatory issues facing the oil and natural gas industry. The full report is available online at reports.babstcalland.com/the-2021-babst-calland-report-1.

Appalachian Storage Hub

As has been chronicled in earlier editions of this white paper, the explosive growth of natural gas production from the Marcellus and Utica shale formations in the Appalachian region starting in 2010 produced strong economic gains for West Virginia, Pennsylvania and eastern Ohio for several years.

In addition, much of that gas is relatively “wet”— meaning that it has a high proportion of natural gas liquids (NGLs) such as ethane, propane, butanes and natural gasolines (pentanes) that are used as petrochemicals in various manufacturing industries. Regional leaders, seeking to capitalize on the vast natural gas resources of those shales, began to stress the importance of developing local businesses that use NGLs—rather than allowing plastics manufacturing and other uses to accrue in other areas.

In 2017, the American Chemistry Council published a report suggesting that the buildout of the petrochemical industry in Appalachia could support the construction of as many as five ethane crackers. Among other factors, the report described that a key to the development of petrochemical manufacturing presence in the area would be the establishment of an Appalachian Storage Hub (ASH) that would act as a conduit for the production and sale of NGLs, storing massive quantities of the liquids and connecting the storage facilities to end users via pipelines. U.S. Senators Shelley Moore Capito and Joe Manchin of West Virginia, along with Senator Rob Portman of Ohio, introduced legislation intended to promote the goal of establishing an ASH.

August 16, 2021

Medical Marijuana in the Workplace, Part 4: Recent Cases Add No Clarity to the Law

The Legal Intelligencer

(by John McCreary)

This is the latest installment of the author’s obsessive examination of Pennsylvania’s Medical Marijuana Act (MMA) and the employment law issues it creates. By this point in our examination, it is now established, at least in the trial courts of the Commonwealth, that the MMA created a private cause of action for medical marijuana users claiming that an employer has discriminated against them because of their medical marijuana use. See e.g., Judge William J. Nealon’s comprehensive opinion in  Palmiter v. Commonwealth Health Systems, No. 19-CV-1315, 2019 Pa. Dist. & Cnty. Dec. LEXIS 12307 (Lackawanna Cty. 2019); Hudnell v. Thomas Jefferson University Hospitals, Inc., 2020 U.S. Dist. LEXIS 176198; 2020 WL 5749924 (E.D. Pa. 2020)(citing Palmiter). See 35 P.S. § 10231.2103(b)(“No employer may discharge, threaten, refuse to hire or otherwise discriminate or retaliate against an employee … solely on the basis of such employee’s status as an individual who is certified to use medical marijuana …”)(emphasis supplied).

In a surprising development (at least to the author), however, Commonwealth Court construed the emphasized language in a manner favorable to employers who continue to enforce “zero tolerance” and similar drug policies. In Harrisburg Area Community College v. PHRC, 245 A.3d 283 (Pa.Cmwlth. 2020) (HACC) a nursing student with a valid medical marijuana prescription was expelled from the nursing program after testing positive for marijuana metabolites. She brought a claim before the Pennsylvania Human Relations Commission (PHRC) for disability discrimination against HACC under the Pennsylvania Human Relations Act’s (PHRA) public accommodation provisions, claiming that her medical marijuana use did not impact her ability to complete the nursing coursework and that HACC should be required to reasonably accommodate her by permitting her to use medical marijuana to treat symptoms of her underlying disabilities (post-traumatic stress disorder and irritable bowel syndrome).

August 9, 2021

Biden Administration Sets Target of 50% EV Sales Share by 2030 and Announces New Emissions and Fuel Efficiency Regulations

Environmental Alert

(by Julie Domike and Gina Falaschi)

On August 5, 2021, President Biden signed an Executive Order on Strengthening American Leadership in Clean Cars and Trucks[1] (Executive Order).  The White House signing event included American automakers Ford, GM, and Stellantis, as well as the United Auto Workers (UAW), demonstrating support for the president’s Build Back Better agenda and investment in U.S. leadership in electric vehicles and batteries, manufacturing, and jobs.  In conjunction with the signing of this Executive Order, the United States Environmental Protection Agency (USEPA) and United States Department of Transportation (USDOT) announced coordinated notices of proposed rulemaking that are intended to roll back the previous administration’s emissions and fuel economy regulations.

Executive Order

The Executive Order sets a new target to make half of all new vehicles sold in 2030 zero-emissions vehicles, including battery electric, plug-in hybrid electric, or fuel cell electric vehicles.  The Executive Order also directs USEPA to initiate a rulemaking to establish new vehicle and engine emissions standards, including for greenhouse gas emissions.  The Administration instructs the agency to set the following:

  • New emissions standards, including for greenhouse gas emissions, for light- and medium-duty vehicles for model years (MY) 2027 through at least MY 2030, by no later than July 2024;
  • New nitrogen oxides standards for heavy-duty engines and vehicles beginning with MY 2027 and extending through and including at least MY 2030, by no later than December 2022; and
  • New greenhouse gas emissions standards for heavy-duty engines and vehicles to begin as soon as MY 2030, by no later than July 2024.

USEPA must also consider updating the existing greenhouse gas emissions standards for heavy-duty engines and vehicles beginning with MY 2027 and extending through and including at least MY 2029 to account for the role that zero-emission vehicles may have in emissions reductions.

August 9, 2021

Ohio Enacts Legislation Providing Counties with the Authority to Block Solar and Wind Developments

Washington, DC

Renewables Law Blog

(By Ashleigh Krick)

On July 12, 2021, Ohio Governor Mike DeWine signed into law Senate Bill 52 providing counties with the authority to block the construction of certain large solar and wind facilities in unincorporated townships.  The law goes into effect on October 11, 2021.  In short, Senate Bill 52 allows county commissioners to establish restricted areas in unincorporated townships prohibiting the construction of solar developments with generating capacity over 50 MWs and wind farms with over 5 MWs of generating capacity.  If a township is incorporated, it retains jurisdiction to regulate whether the development occurs rather than defer to the county commissioners. Senate Bill 52 also contains requirements pertaining to public meetings in the counties that the facility will be located and decommissioning requirements.  Practically speaking, Senate Bill 52 means that even if a solar or wind company obtains the necessary land rights to construct a solar or wind facility, counties can block its construction.

Senate Bill 52 follows a string of legislative actions in Ohio that appear to have stifled development and investment in solar and wind in the state.  For example, in 2014, Ohio passed legislation requiring wind farms to be setback a minimum of 1,125 feet from the nearest adjacent property line.  In contrast, oil and gas production wells are only required to be located at least 100 feet from the nearest homes.  Since Ohio enacted the wind farm setback requirement, only one wind farm has been approved in the state.

While the full impact of Senate Bill 52 is unknown at this time, solar and wind developers can expect some counties to begin using their authority to restrict the location of solar and wind developments after the law goes into effect in October.

August 5, 2021

Pennsylvania Department of Environmental Protection Releases PFAS Sampling Data and Proposes Drinking Water Standards for Two “Forever” Chemicals

The Legal Intelligencer

(by Matt Wood)

Over the past few months, Governor Tom Wolf’s administration, the Pennsylvania Department of Environmental Protection (DEP), and other governmental stakeholders, have made strides toward better understanding and addressing contamination of state waters with perfluoroalkyl and polyfluoroalkyl substances (PFAS).  Specifically, recent sampling efforts of certain public water systems (PWSs) and surface waters have resulted in new information about the prevalence of PFAS in state waters and have informed DEP actions toward regulating certain PFAS compounds.

Public Water Source Sampling

On June 3, 2021, the Wolf administration released sampling results from an approximately two-year long statewide effort to sample PWSs for certain PFAS compounds.  PFAS are a group of manmade chemicals used in numerous industrial, commercial, and consumer products.  Prominent examples include non-stick and waterproofing applications and as chemical components of fire fighting foams.  In recent years, PFAS chemicals have been discovered in the environment, including in groundwater (some used as drinking water sources), and in humans, plants, and animals and some studies suggest that PFAS can negatively affect human health.  Because they do not break down naturally in the environment (including in the human body), they are commonly called “forever” chemicals.

In September 2018, Governor Wolf created via Executive Order a PFAS Action Team to investigate and address potential PFAS concerns in the Commonwealth.  The Action Team, made up of agency heads from multiple Pennsylvania agencies, subsequently developed a plan to sample PWSs for PFAS.  Specifically, the Action Team identified PWSs within a half-mile of potential PFAS sources (such as military, fire training, and manufacturing facilities).

In June 2019, the DEP started sampling these PWSs (as well as other locations outside of the half-mile radius of potential sources to establish a baseline). 

August 4, 2021

Force majeure: Why these contract provisions are drawing new scrutiny

Smart Business 

(by Sue Ostrowski featuring Kate Cooper)

“With the pandemic, our clients suddenly cared a lot about whether their contracts included a force majeure provision, what it said, what it meant and how it could be interpreted,” says Cooper.

Smart Business spoke with Cooper about force majeure provisions and how approaches to them are changing.

What are force majeure provisions?

Force majeure provisions govern the conduct of both parties if unexpected or unforeseeable events result in a party being unable to deliver on the terms of the contract, with an emphasis on the unforeseeable. They’re designed to cover unexpected events and potentially allow you to delay delivering on a contract. But the provisions are not a get-out-of-jail free card, and in most circumstances, they do not let a party to a contract completely off the hook.

The disruption to the supply chain caused by the pandemic and government shutdowns has drawn renewed attention to these clauses. For example, when suppliers couldn’t deliver to their customers, those disruptions had a knock-on effect down the supply chain. Companies aiming to avoid breaching their contracts were hopeful that their force majeure provisions would provide them with relief. However, many were disappointed to find that what they wanted to do — whether that be delay performance obligations, or even terminate the contract entirely — wasn’t permitted by the language of the specific provisions set forth in their contracts.

How is the conversation regarding force majeure changing?

It will be difficult to argue that the pandemic is an unforeseeable event now that we are a year and a half into COVID-19, meaning that COVID-19 (and pandemics generally) will need to be specifically referenced in the provision in order for it to be enforceable in most jurisdictions.

August 2, 2021

Donald C. Bluedorn II Elected as an Active Fellow to The American College of Environmental Lawyers

The American College of Environmental Lawyers (ACOEL)

Babst Calland Managing Shareholder Donald C. Bluedorn II was recently elected as an Active Fellow to The American College of Environmental Lawyers for 2021.

The American College of Environmental Lawyers announced that this year it has elected 22 new Active Fellows and two Honorary Fellows to membership in the College. Each individual was selected for his or her distinguished experience, high standards of practice and substantial contributions to the field of environmental law.

ACOEL President, Mary Ellen Ternes, partner with Earth & Water Law, LLC, stated, “The 22 lawyers elected as Fellows to the College represent the best environmental lawyers in government service, public interest, academia, and private practice from across the country. Our new Fellows have earned this recognition based on their career achievements and as leaders in the broad and diverse areas of environmental law and policy. Our Honorary Fellows have distinguished themselves for their substantial contributions as leaders in thought and action regarding Environmental Justice.“

ACOEL Press Release

July 22, 2021

Litigation, land use and trends in local ordinances

The PIOGA Press

This article is an excerpt from The 2021 Babst Calland Report, which represents the collective legal perspectives of Babst Calland’s energy attorneys addressing the must current business and regulatory issues facing the oil and natural gas industry. The full report is available online at reports.babstcalland.com/the-2021-babst-calland-report-1.

Pennsylvania royalty cases

In two recent cases litigated by Babst Calland, courts applying Pennsylvania law reaffirmed that operators were entitled to deduct post-production costs from royalty payments based on lease language containing references to “at the wellhead” provisions. On April 28, 2021, the Court of Common Pleas of Butler County in Dressler v. PennEnergy Resources considered this issue where the lease provided that the gas royalty was to be paid based on “gas sold at the well.” The court held that phrase equated to “at the wellhead” language, which mandates using the net back method for calculating royalties―thus justifying post-production cost deductions.

A nearly identical decision was rendered by the United States District Court for the Western District of Pennsylvania less than two weeks later in Coastal Forest Resources Co. v. Chevron USA, Inc. There, the district court held that the lease’s royalty provision containing “at the wellhead” language had to be broadly interpreted to also allow for post-production cost deductions. Both cases relied on the Pennsylvania Supreme Court’s decision in Kilmer v. Elexco Land Servs., Inc., where “at the wellhead” was defined, to justify their holdings. It is likely that the two decisions will help temper further royalty litigation on the propriety of post-production deductions.

Oil and gas lease negotiations are not covered by the Pennsylvania Unfair Trade Practices and Consumer Protection Law

On March 24, 2021, the Pennsylvania Supreme Court issued its 6-1 decision in Commonwealth v.

July 22, 2021

PHMSA issues advisory bulletin on minimizing natural gas releases from pipeline facilities

The PIOGA Press

(by Ashleigh Krick)

On June 7, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued an advisory bulletin (ADB) reminding owners and operators of gas and hazardous liquid pipeline facilities of a self-executing mandate from the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020” (PIPES Act of 2020).

Statutory mandate

The mandate, codified at Section 114(b) of the PIPES Act of 2020, provides that by December 27, 2021, “each pipeline operator shall update the inspection and maintenance plan prepared by the operator under section 60108(a) of title 49, United States Code, to address the elements described in the amendments to that section made by [Section 114(a)].”

Section 114(a) of the PIPES Act of 2020 added to 49 U.S.C. § 60108(a) that, in deciding on the adequacy of an inspection and maintenance plan, PHMSA or a certified state authority must consider the extent to which the plan will contribute to “eliminating hazardous leaks and minimizing releases of natural gas from pipeline facilities” and “the extent to which the plan addresses the replacement or remediation of pipelines that are known to leak based on the material (including cast iron, unprotected steel, wrought iron, and historic plastics with known issues), design, or past operating and maintenance history of the pipeline.”

Additionally, Section 114(a) added to 49 U.S.C. § 60108(a) that inspection and maintenance plans must “meet the requirements of any regulations promulgated under section 60102(q).” Section 60102(q) is a new rulemaking mandate from Section 113 of the PIPES Act of 2020 that requires PHMSA to issue new leak detection rules for operators of regulated gas gathering, transmission, and distribution lines by December 27, 2021.

Section 114(a) also provided that PHMSA or a relevant state authority must review each plan not later than December 27, 2022, and then every five years.

July 19, 2021

Pennsylvania Public Utilities Commission Proposes Significant Changes to the Hazardous Liquid Pipeline Safety Regulations

Pipeline Safety Alert

(by Keith Coyle and Ashleigh Krick)

On July 15, 2021, the Pennsylvania Public Utilities Commission (PA PUC) issued a Notice of Proposed Rulemaking Order (NOPR) proposing to change the regulations applicable to public utilities that transport petroleum products and other hazardous liquids in Pennsylvania.  The NOPR follows an Advanced Notice of Proposed Rulemaking (ANOPR) that the PA PUC published on June 29, 2019, seeking comments on an expanded regulatory framework for hazardous liquid public utilities.  The proposed regulations go beyond the minimum federal pipeline safety regulations in 49 C.F.R. Part 195 and would impose significant new requirements on public utilities in Pennsylvania.

Below is a summary of the significant items from the proposed regulations.  Public utilities in Pennsylvania that transport hazardous liquids should carefully review the proposed regulations, the potential impact to their operations, and provide comments to the PA PUC accordingly.  Comments will be due 60 days from the date the NOPR is published in the Pennsylvania Bulletin.

Reporting (§ 59.133-59.134)

  • Proposes to require that an operator provide an unredacted failure analysis report based on laboratory testing and root cause analysis to the PA PUC within 120 days of a reportable accident or within 10 days of report completion, whichever comes first. If the reports are not completed within those timeframes, the public utility must provide updates to the PA PUC every 14 days. The analyses must be conducted by a PA PUC-approved independent third-party lab and consultant.
  • In addition to the requirements in 49 C.F.R. Part 195, Subpart B, the PA PUC proposes to require notification of the following:
    • Proposed major construction, major reconstruction, or major maintenance involving an expenditure of more than $300,000 or 10% of the cost of the pipe in service, whichever is less, 45 days prior to commencement.
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