December 22, 2021

Extreme Discovery Misconduct May Result in Extreme Consequences

Pretrial Practice & Discovery

American Bar Association Litigation Section by the American Bar Association

(By Jessica L. Altobelli)

A reminder to attorneys to take their discovery obligations seriously and not let things get out of hand.

While I haven’t polled all ABA members, I think it’s safe to assume that obtaining default judgment during discovery isn’t a regular case-winning strategy of most litigators. And while Rule 37 of the Federal Rules of Civil Procedure does include default as a potential remedy for a party’s failure to cooperate during discovery, it is undoubtedly an extreme measure. Where a party is engaged in extreme or egregious discovery misconduct, however, default judgment may be a court’s last-resort remedy.

In spring 2021, for example, a Tennessee court entered a default judgment against the pharmaceutical company Endo after determining that Endo and its counsel engaged in a “coordinated strategy” to interfere with the administration of justice. Staubus v. Purdue Pharma L.P., No. C-41916 (Tenn. Cir. Ct. Apr. 6, 2021). As detailed in the court’s April 6, 2021, order granting the default judgment, counsel for Endo made numerous false statements during court proceedings throughout the pendency of the matter, and improperly withheld thousands of documents during discovery. Documents that were provided by Endo, in some cases, contradicted testimony of Endo’s own executives. Upon entry of the default, the judge acknowledged the harshness of the penalty, but stated that anything less than default in the circumstances at hand “would make a mockery of the attorneys who play by the rules and the legal system.”

A recent opinion out of the Southern District of Alabama reveals that courts may take the dramatic step of entering a default judgment for discovery misconduct in any variety of matters.  …

November 19, 2021

Infrastructure Bill Provides Billions in Funding for Hydrogen and Carbon Capture, Utilization, and Storage

Client Alert

(By Jim Curry, Ashleigh H. Krick, Christopher T. Kuhman)

On November 15, 2021, President Biden signed the bipartisan $1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684). This Alert reviews the key provisions related to hydrogen and carbon capture, utilization, and storage (CCUS). Babst Calland has also issued a companion Alert on other renewable energy-related provisions in the Infrastructure Bill.

Hydrogen

  • Regional Clean Hydrogen Hubs (Sec. 40314): In perhaps the most impactful provision, the Bill authorizes an $8 billion program to support the development of at least four regional clean hydrogen hubs to network hydrogen producers, storage, offtakers and transport infrastructure. DOE must solicit proposals for regional clean hydrogen hubs by May 15, 2022, and select the four hubs by May 15, 2023. DOE will solicit at least one hub proposal for each of the following hydrogen production technologies: fossil fuels, renewables or nuclear. And, DOE will solicit at least one hub to provide hydrogen to each of the following sectors: power generation, industrial, residential and commercial heating, and transportation.
  • Clean Hydrogen Definition and Production Qualifications (Secs. 40312 & 40315): Defines “clean hydrogen” and “hydrogen” in a technology neutral way, and requires DOE and EPA to develop an initial carbon standard for projects to qualify as clean hydrogen production, eligible for the variety of incentives throughout the Bill. Clean hydrogen means “hydrogen produced with a carbon intensity equal to or less than 2 kilograms of carbon dioxide (CO2)-equivalent produced at the site of production per kilogram of hydrogen produced.” The standard must consider technological and economic feasibility and allow production from fossil fuels with CCUS, hydrogen carrier fuels, renewables, nuclear and other methods that DOE determines are appropriate.

    • …

November 19, 2021

Infrastructure Bill Seeks to Expand and Improve Grid Infrastructure Incentivize Renewables Growth

Client Alert

(by Ben Clapp, Anna Jewart and Josh Snyder)

On Monday, November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (Infrastructure Bill) into law.  The historic $1.2 trillion package contains a number of provisions aimed at promoting the growth of the renewable energy sector and places significant emphasis on large-scale improvements to, and expansion of, the electric transmission grid.  Key provisions of the Infrastructure Bill aimed at benefitting the renewables sector are discussed below.  Babst Calland is issuing a companion Alert on the Carbon Capture, Utilization, and Storage and Hydrogen Technologies provisions in the Infrastructure Bill.

Transmission Infrastructure Resiliency and Expansion

It is well understood that grid capacity constraints and access to adequate transmission infrastructure are often roadblocks to siting renewable energy projects.  The Infrastructure Bill’s investment in transmission infrastructure and resiliency and in building out the grid is designed, in part, to ease these impediments with the aim of making more sites viable for renewable energy development across the country.  The Infrastructure Bill allocates about $28 billion to transmission infrastructure generally, including approximately $15 billion in grants and other financial assistance to prevent outages and enhance grid resiliency, develop new or innovative approaches to transmission, storage, and distribution infrastructure, and facilitate siting or upgrading transmission and distribution lines in rural areas.

$2.5 billion is allocated to the “Transmission Facilitation Program,” a fund that allows the Department of Energy (DOE) to enter into a capacity contract for the right to use up to 50 percent of the planned capacity of certain new, expanded or upgraded transmission lines.  The program is intended to leverage the DOE investment to demonstrate the project’s viability and thereby encourage other entities to enter into capacity contracts with these transmission projects. …

November 19, 2021

A conversation about environmental justice with Attorney Sean McGovern

Pittsburgh Business Times

(By Sean M. McGovern)

Babst Calland Shareholder Sean McGovern takes a closer look at Pennsylvania Governor Tom Wolf’s executive order to develop a stronger environmental justice policy and what local business and industry can expect.

Pennsylvania businesses can expect 2022 to become the year of environmental justice, thanks largely to Executive Order 2021-7 issued by Pennsylvania Governor Tom Wolf on October 28.

So said Sean McGovern, a shareholder with Pittsburgh law firm Babst Calland’s environmental practice, who suggested the executive order will, indeed, change Pennsylvania’s approach to environmental justice significantly ahead.

“Certainly, this is a very current development,” McGovern said. “There’s no statute or explicit regulation here in the state. We already have an environmental justice policy, but this new environmental justice order, as well as the Executive Order 14008 from President Biden earlier this year, will further establish the rights and duties under the Environmental Rights Amendment to protect all people in Pennsylvania.”

McGovern shared his insights on environmental justice in Pennsylvania recently with the Pittsburgh Business Times as part of the law firm’s ongoing Business Insights series. Babst Calland is one of the Pittsburgh region’s largest law firms. McGovern is considered one of Babst Calland’s environmental counselors on issues surrounding environmental justice and other matters of environmental law.

Environmental justice defined

So, what is it? The U.S. Environmental Protection Agency defines environmental justice as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.”

While the issue has been around for decades, it took center stage earlier this year when President Biden signed an executive order prioritizing for the federal government “environmental justice on a fairly systemic federal level,” McGovern said. …

November 11, 2021

Pennsylvania Oil and Gas Producers Take Note: Five Key Changes in EPA’s Proposed Methane Rule

PIOGA Press

(By Gary Steinbauer)

On November 2, the U.S. Environmental Protection Agency (EPA) released its highly anticipated proposal to expand existing and create new regulations related to greenhouse gas (in the form of methane) and volatile organic compound (VOC) emissions from the oil and gas sector. The proposed rule is entitled Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review. The proposal, if finalized, will lead to more stringent Clean Air Act (CAA) emission limitations and other work practice requirements related to emissions of methane and VOCs from new and existing sources within the crude oil and natural gas production sector, including producers in Pennsylvania.

Brief overview of the methane proposal

The methane proposal is comprised of three distinct actions proposed under sections 111(b) and (d) of the CAA: (1) proposed amendments to the existing methane and VOC requirements in Subpart OOOOa of the New Source Performance Standards (NSPS) in 40 CFR Part 60; (2) a proposed new NSPS to be included in new Subpart OOOOb, regulating emissions of methane and VOCs from new, modified and reconstructed sources within the oil and gas sector; and (3) nationwide methane emission guidelines (EGs) for existing sources within the oil and gas sector in new Subpart OOOOc.

EPA’s proposed amendments to the current requirements in Subpart OOOOa are primarily in response to Congress’ June 2021 revocation of regulatory amendments made by the EPA during the Trump administration. The new proposed NSPS to be included in Subpart OOOOb would expand the existing requirements in Subpart OOOOa and regulate additional sources of methane and VOC emissions within the oil and gas sector, establishing the “best system of emission reduction” for affected sources that are new, modified, and recon-structed after the effective date. …

November 11, 2021

EEOC Provides Employers Clarity in Religious Objection Requests to Mandatory Vaccines

The Legal Intelligencer

(By Stephen Antonelli)

On September 9, 2021, President Biden announced his administration’s Path out of the Pandemic action plan, a six-pronged national strategy aimed to combat COVID-19 while keeping schools and workplaces open and safe.  One prong of the plan involves vaccinating those who are not yet vaccinated.  To achieve this goal, the president took actions that have since been on the minds of most employers and human resources professionals: he issued an Executive Order requiring contractors who do business with the federal government to mandate vaccinations for their employees; he directed the Occupational Safety and Health Administration (OSHA) to develop a rule requiring employers with 100 or more employees to ensure that their employees are either fully vaccinated or tested weekly; and he ordered the Centers for Medicare & Medicaid Services (CMS) to require vaccinations for most healthcare workers.

As of this writing in early November, the Safer Federal Workforce Task Force has released detailed guidance related to the federal contractor order, but OSHA has not yet released an Emergency Temporary Standard (ETS) to implement the mandate for large employers, and CMS has not yet issued an interim final rule related to healthcare workers.  As a result, employers across the country are waiting for important guidance and details about how vaccine mandates will impact their employees.  Complicating matters further, at least 12 states have commenced litigation against the Biden administration in at least three different federal district courts (Arizona, Missouri, and Florida) over the federal contractor rule, and several states (Texas, Florida, Arizona, and Alabama) have issued executive orders of their own opposing vaccine mandates.

In short, employers could use some clarity on the topic of implementing vaccine mandates. …

November 11, 2021

Small Businesses Need to Be Wary of Cyber Attacks (Opinion)

Charleston Gazette-Mail

(By Moore Capito)

Small-business owners have many roles to fill–from managing payrolls and marketing to customer service. But one area many small-business owners fail to plan for is their company’s cybersecurity.

According to a recent Small Business Administration survey, 88% of small-business owners feel their business was vulnerable to a cyberattack. Experts warn that small businesses, including those in West Virginia, are under constant attack by cybercriminals, be it from local, national or global actors.

We don’t have to dig deep for a local example of this threat. In 2017 Princeton Community Hospital, in Mercer County, was a victim of the Petya attack, costing the health system $27 million.

Yet, many businesses can’t afford professional IT solutions, have limited time to devote to cybersecurity or simply don’t know where to begin.

As a delegate, I am focused on supporting West Virginia small businesses through state and federal grants and providing critical resources and training to entrepreneurs across the state. Small businesses are the backbone of our economy and provide the greatest opportunity for job growth in our state. We need to do everything we can to encourage and support them. West Virginians are hard-working, dedicated people–they just need the right tools to succeed.

This is where programs like the one hosted by the National Cybersecurity Center come in. The National Cybersecurity Center is a nonprofit organization established to promote cyber innovation and awareness, and offers training for the public and private sector alike. I have the privilege of taking part in a key public education effort, Cybersecurity for State Leaders, which is training leaders in all 50 states on best practices in cybersecurity.

Best practices for maintaining good cyber hygiene apply equally to the government and to business across West Virginia. …

November 11, 2021

Governor Wolf’s Executive Order and Pennsylvania Legislature Emphasize Environmental Justice

Environmental Alert

(By Sean M. McGovern and Evan M. Baylor)

On October 28, 2021, Governor Tom Wolf issued an Executive Order (Order) addressing environmental justice in the Commonwealth (Executive Order 2021-07). In support of the Order, Pennsylvania legislators announced environmental justice actions that would reflect the directives of the Order.

Executive Order

Gov. Wolf’s Order largely focuses on the establishment of bodies within the Department of Environmental Protection (DEP) and an interagency council within the Executive Branch to better address environmental justice, which is addressed in further detail below. The Order also asserts:

  1. The Commonwealth’s duty to “ensure the rights and duties of Article I, Section 27 protect all the people of Pennsylvania” and the significance of environmental justice in President Biden’s Executive Order 14008 and his administration’s mission;
  2. That low-income communities and communities of color residents bear a disproportionate share of adverse climate and environmental impacts with accompanying adverse health impacts; and
  3. That all Pennsylvanians are entitled to meaningful involvement in decision-making that impacts their lives, environments, and health and that such involvement is critical to reduce adverse impacts.

Environmental Justice Advisory Board

The Order formally established the existing Environmental Justice Advisory Board (EJAB). The EJAB makes recommendations to the DEP Secretary concerning environmental justice policies, practices, and actions. The EJAB shall meet at least semi-annually.

Office of Environmental Justice

The Order formally establishes the existing Office of Environment Justice (OEJ) within the DEP. In 2002, the DEP established the Office of Environmental Advocate. …

November 5, 2021

Supreme Court of Appeals of West Virginia Accepts Certified Questions About Deductibility of Post-Production Expenses and the Viability of Tawney

Energy Alert

(by Timothy Miller, Jennifer Hicks and Katrina Bowers)

The West Virginia Supreme Court of Appeals has accepted four questions certified to it by The United States District Court for the Northern District of West Virginia in Charles Kellam, et al. v. SWN Production Company, LLC, et al., No. 5:20-CV-85. The Court will hear oral argument during the January 2022 term. The Court will address four questions: (1) Is Estate of Tawney v. Columbia Natural Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006) (Tawney) still good law in West Virginia; (2) What is meant by the “method of calculating” the amount of post-production costs to be deducted; (3) Is a simple listing of the types of costs which may be deducted sufficient to satisfy Tawney; and (4) If post-production costs are to be deducted, are they limited to direct costs or may indirect costs be deducted as well?

At the time of the District Court’s certification in Kellam, defendants’ Motion for Judgment on the Pleadings asserting that the Kellams’ lease complied with Tawney and that the District Court was bound by the decision in Young v. Equinor USA Onshore Properties, Inc., 982 F.3d 201 (4th Cir. 2020) was pending. In Young, the 4th Circuit Court of Appeals reversed Judge Bailey and held the lease clearly and unambiguously allowed the deduction of post-production expenses and noted that “Tawney doesn’t demand that an oil and gas lease set out an Einsteinian proof for calculating post-production costs. By its plain language, the case merely requires that an oil and gas lease that expressly allocates some post-production costs to the lessor identify which costs and how much of those costs will be deducted from the lessor’s royalties.” Young, 982 F.3d at 208. …

November 4, 2021

Infrastructure Bill Would Resurrect Superfund Excise Taxes

The Legal Intelligencer

By Joe Yeager

On Aug. 10, the U.S. Senate passed President Joe Biden’s Infrastructure Investment and Jobs Act (HR 3684 or Infrastructure Bill) by a vote of 69-30. The $1 trillion Infrastructure Bill received bipartisan support with a proposed $550 billion in new infrastructure spending over the next five years that would be offset by a combination of tax and nontax provisions.

Among other proposals, the Senate bill includes a provision to resurrect a modified version of the long-expired Hazardous Substance Superfund Trust Fund (Superfund) excise tax on chemical manufacturing and imports (Superfund excise taxes). The bill reinstates certain excise taxes to replenish the Superfund, which provides the federal government with resources to respond to environmental threats related to managing hazardous substances.

Congress allowed the excise taxes to expire at the end of 1995, and this absence of funds has forced the Superfund to support cleanup efforts through general disbursements of other tax revenues. Although there have been multiple attempts to reinstate the Superfund excise tax over the course of the last 25 years, none garnered as much bipartisan support.

The new version of the Superfund tax would apply to the production of certain chemicals through Dec. 31, 2031, effective for periods after June 30, 2022. In addition, the Superfund tax will increase the rate of tax per ton on a list of taxable chemicals. Its proponents assert that over the course of 10 years, the new tax is estimated to raise approximately $14.4 billion (or $1.2 billion annually). In support of the Infrastructure Bill, the funds would be specifically aimed at shoring up the Superfund, addressing the overall goals of cleanup and protection of human health and the environment from historical contamination, and bolstering EPA efforts to conduct additional investigations and collect more data on newer sites. …

November 4, 2021

PHMSA Releases Long-Awaited Final Rule for Onshore Gas Gathering Lines

Pipeline Safety Alert

(by Keith Coyle, Jim Curry and Brianne Kurdock)

On November 2, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of its final rule for onshore gas gathering lines.  The final rule, which represents the culmination of a decade-long rulemaking process, amends 49 C.F.R. Parts 191 and 192 by establishing new safety standards and reporting requirements for previously unregulated onshore gas gathering lines.  Building on PHMSA’s existing two-tiered, risk-based regime for regulated onshore gas gathering lines (Type A and Type B), the final rule creates:

  • A new category of onshore gas gathering lines that are only subject to incident and annual reporting requirements (Type R); and
  • Another new category of regulated onshore gas gathering lines in rural, Class 1 locations that are subject to certain Part 191 reporting and registration requirements and Part 192 safety standards (Type C).

The final rule largely retains PHMSA’s existing definitions for onshore gas gathering lines but imposes a 10-mile limitation on the use of the incidental gathering provision.  The final rule also creates a process for authorizing the use of composite materials in Type C lines and prescribes compliance deadlines for Type R and Type C lines.  Additional information about these requirements is provided below.

     Type R Lines

The final rule creates a new category of reporting-only regulated gathering lines.  These gathering lines, known as Type R lines, include any onshore gas gathering lines in Class 1 or Class 2 locations that do not meet the definition of a Type A, Type B, or Type C line.  …

November 4, 2021

Babst Calland Ranked in 2022 “Best Law Firms”

Babst Calland has been ranked in the 2022 U.S. News & World Report-Best Lawyers® “Best Law Firms” list nationally in eight practice areas and regionally in 32 practice areas:

  • National Tier 2
    • Environmental Law
    • Land Use & Zoning Law
    • Litigation – Environmental
    • Oil & Gas Law
  • National Tier 3
      • Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
      • Litigation – Construction
      • Mining Law
      • Natural Resources Law
  • Metropolitan Tier 1
    • Pittsburgh
      • Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
      • Bet-the-Company Litigation
      • Commercial Litigation
      • Construction Law
      • Corporate Law
      • Energy Law
      • Environmental Law
      • Information Technology Law
      • Land Use & Zoning Law
      • Litigation – Bankruptcy
      • Litigation – Construction
      • Litigation – Environmental
      • Litigation – Land Use & Zoning
      • Municipal Law
      • Natural Resources Law
      • Water Law
    • Charleston-WV
      • Commercial Litigation
      • Energy Law
      • Environmental Law
      • Litigation – Environmental
      • Oil & Gas Law
  • Metropolitan Tier 2
    • Pittsburgh, PA
      • Labor Law – Management
    • Charleston-WV
      • Mining Law
      • Natural Resources Law
    • Washington, D.C.
      • Oil & Gas Law
  • Metropolitan Tier 3
    • Pittsburgh, PA
      • Mediation
      • Mergers & Acquisitions Law
    • Charleston-WV
      • Bet-the-Company Litigation
      • Litigation –

    • …

November 1, 2021

WVDEP Working on Permitting Rules for Storage of Captured CO2

GO-WV News

By Christopher (Kip) Power

The West Virginia Department of Environmental Protection (WVDEP) is continuing work on rules for permitting of geologic storage of captured CO2 — a necessary (but not sufficient) element in developing a CCS industry.

As discussed in the August GO-WV News, the WVDEP released proposed amendments to its Underground Injection Control (UIC) permitting and related regulations (47 CSR 13) on June 23, 2021 and held a public hearing on the proposed rules on July 23, 2021. Although they include substantial changes to the rules for Class 1 permits (governing hazardous waste injection wells) and Class 2 permits (for enhanced recovery of oil and gas, and disposal of produced water), the rule changes primarily consist of an entirely new section establishing a permitting program for Class 6 wells (those used for injecting carbon dioxide for the purpose of permanent geologic sequestration). Those proposed new Class 6 rules are largely modeled on EPA’s detailed “Class VI” regulations promulgated under the federal Safe Drinking Water Act (40 CFR 146).

Ten organizations (including GO-WV and several environmental/citizen groups) filed comments on the draft amendments, and a few of their representatives spoke at the hearing. By letter dated July 23, 2021, the WVDEP released copies of the written comments it received, along with its responses. There was a total of 10 comments that the WVDEP considered to be meritorious enough to alter the proposed rule language in minor ways, almost all of which consisted of typographical errors (along with the elimination of the use of Roman numerals for identifying the “classes” of permits). The final agency-approved rule proposal was filed with the Legislative Rule-Making Review Committee on July 30, 2021 (incorporating most, but not all, of the edits mentioned in the WVDEP’s July 23 letter). …

October 27, 2021

How FinTech is Upending a Traditional Industry

Smart Business

(by Sue Ostrowski featuring Moore Capito)

For years, the banking industry has functioned in the same ways it always has. But FinTech — financial technology — is revolutionizing the way things are done and increasing access to financial tools for those who may not have previously had it.

“At its core, FinTech is when you have the convergence of an emerging technology and a financial service,” says Moore Capito, shareholder at Babst Calland. “It’s using innovation to compete with traditional methods of delivering financial services.”

Smart Business spoke with Capito about how FinTech is revolutionizing the financial industry, the opportunities it presents and challenges it poses.

How is Fintech Changing the Financial Industry?

There are a lot of unbanked, or underbanked, people that have difficulty accessing the traditional banking industry. FinTech products, sometimes in collaboration with a traditional bank, can provide better financial services to these individuals, especially in rural areas where there is less access to bricks-and-mortar banks.

There are potentially endless applications, from insurance to mobile banking, cryptocurrency, investment apps, and financial products including mortgages — the most well-known being PayPal. The onset of COVID accelerated the necessity and the willingness to adapt with FinTech, doing more transactions remotely from phones and bringing finance directly to individuals, instead of individuals going to a physical banking location.

On the economic development side, entrepreneurs are coding programs that create the functionality behind the apps. And states such as West Virginia have created regulatory sandboxes for FinTech entrepreneurs. These let participants apply to come in and test their products in the marketplace without going the traditional regulatory route, allowing them to become viable and ready for commercialization before becoming regulated by state agencies. …

October 28, 2021

2021 PFAS Strategic Roadmap Outlines EPA’s Whole-of-Agency Approach to Addressing “Forever Chemicals” through 2024 and Beyond

Environmental Alert

(by Matt Wood and Mackenize Moyer)

On October 18, 2021, the U.S. Environmental Protection Agency (EPA) released its comprehensive strategy for addressing per- and polyfluoroalkyl substances (PFAS), “PFAS Strategic Roadmap: EPA’s Commitments to Action 2021–2024” (Roadmap).  PFAS are a large group of manmade chemicals that have been widely used in various consumer, commercial, and industrial applications since the around 1940s and more recently have been discovered in environmental media (e.g., groundwater), as well as in plants, animals, and humans.  PFAS do not tend to break down naturally, and evidence suggests that exposure to PFAS can lead to adverse health effects.  As such, the EPA Council on PFAS, established by EPA Administrator Michael S. Regan in April 2021, developed the Roadmap to “pursue a rigorous scientific agenda to better characterize toxicities, understand exposure pathways, and identify new methods to avert and remediate PFAS pollution.”[1]

The Roadmap highlights EPA’s “whole-of-agency” approach, that includes proposed actions across program offices, as well as the PFAS “lifecycle” (i.e., activities that occur prior to PFAS entering the environment, such as manufacturing).  EPA’s “Key Actions” illustrate this approach and are informed by one or more of the Roadmap’s three central directives: (1) Research; (2) Restrict; and (3) Remediate. A selection of the Roadmap’s Key Actions is summarized below.

 Office of Water

  • Establish a National Primary Drinking Water Regulation (NPDWR) for PFOA and PFOS – In March 2021, EPA published the Fourth Regulatory Determinations, which included a final determination to regulate PFOA and PFOS in drinking water. EPA expects to issue a proposed NPDWR for PFOA and PFOS in fall 2022. A final regulation is anticipated in fall 2023.

    • …

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