August 9, 2019

Commonwealth Court again rejects a challenge to an ordinance authorizing oil and gas development in non-industrial zoning districts

The PIOGA Press

(by Robert Max Junker)

The argument that the Pennsylvania Constitution compels municipalities to classify natural gas extraction from shale formations as a “heavy industrial use” and therefore mineral development cannot occur in agricultural and rural residential zoning districts was roundly rejected by both the Commonwealth Court and the Supreme Court in the case of Frederick v. Allegheny Township Zoning Hearing Board, 196 A.3d 677 (Pa. Cmwlth. 2018) (en banc), appeal denied, ___ A.3d ___ (Pa., No. 449 WAL 2018, filed May 14, 2019). Nevertheless, opponents of natural gas development continue to be undeterred and refuse to give up this mantra. Attacks on municipalities’ legislative decisions on where natural gas development is appropriate within their own borders are still playing out in several Western Pennsylvania communities, with opponents seeking just one judicial decision that will breathe life into this moribund concept. With the June 26 decision from the Commonwealth Court in Delaware Riverkeeper Network v. Middlesex Township Zoning Hearing Board, No. 2609 C.D. 2015 (Pa. Cmwlth. June 26, 2019) (unreported decision), this tenuous theory was put on life support and yet its few remaining proponents stubbornly refuse to acknowledge the inevitable demise.

Middlesex Township is a rural community in Butler County. In 2014, the Board of Supervisors enacted a zoning ordinance amendment to expressly provide for the use and regulation of oil and gas operations within the township. The board decided that oil and gas well site development should be a permitted use by right in the rural residential, agricultural, residential agricultural and the restricted industrial districts; should be allowed as a conditional use following a public hearing in the commercial districts; and should not be permitted in certain other districts. …

August 8, 2019

Practice Pointers for Social Media Policies in the Workplace

The Legal Intelligencer

(by Alexandra Farone)

As social media continues to play an ever-more prominent role in our culture, employers are frequently faced with the uncomfortable situation of encountering an employee’s social media post that, at best, reflects unfavorably upon the employer or, at worst, is outright harassment or discrimination. Pennsylvania court decisions on the intricacies or enforceability of employers’ social media policies are few and far between, and do not create particularly useful guidance for employers in navigating the minefield of social media. Without such clarity, employers are encouraged to be mindful when drafting, revising or enforcing these policies to ensure compliance with existing guidance.

While public employers face the unique challenge of balancing employees’ constitutional free speech rights against protection of the employer’s reputation, private sector employers must also consider federal law when drafting a social media policy. The National Labor Relations Act (NLRA) gives unionized and nonunionized employees the right to act together to address wages, hours, and the terms and conditions of employment. Such “protected, concerted activity” could come in the form of an employee’s social media post complaining about, for example, vacation time, inadequate supervision or perceived poor safety measures. As early as 2012, the National Labor Relations Board (the board) issued a decision finding that a Facebook conversation can be protected, concerted activity, see Hispanics United of Buffalo and Carlos Ortiz, 359 NLRB No. 37 (2012). To qualify for protection, the speech has to be more than “mere griping.” Moreover, if the speech is egregiously offensive or knowingly and maliciously false, or if it disparages the employer without relating complaints to a term or condition of employment, it will likely not be protected. If, however, the speech raises a concerted or group complaint about a term or condition of employment, the employer must take care not to discipline the employee in a manner that runs afoul of the NLRA. …

August 1, 2019

Partial Summary Judgment in Challenges to Unconventional Well Regulations

The Legal Intelligencer

(by Jean Mosites and Matthew Wood)

Editor’s note: Author Jean M. Mosites of Babst, Calland, Clements & Zomnir represents MSC in this litigation. Matthew C. Wood, an associate with the firm, reported on the decision.

On July 22, the  Pennsylvania Commonwealth Court  issued an opinion addressing an industry trade group’s challenges to parts of the state’s unconventional well regulations (25 Pa. Code § 78a). The regulations impose obligations on the development of natural gas wells in unconventional formations such as the Marcellus Shale and Utica. In 2016, petitioner, the Marcellus Shale Coalition, (MSC) challenged specific portions of the new regulations governing public resources, area of review, on-site processing, well development and centralized impoundments, site restoration, spill remediation and waste reporting. Following its August 2018 decision largely invalidating the public resource provisions challenged in count one of MSC’s petition, and oral argument on the remaining counts in October 2018, the court’s en banc panel decided applications for partial summary relief by MSC and respondents, the Department of Environmental Protection (DEP) and the Environmental Quality Board (EQB).

In its petition, MSC contended that the DEP and EQB lacked statutory authority to adopt the rules, that the new regulations conflicted with current law and were unconstitutional special laws, and that the new regulations were unreasonable. The agencies largely countered that they derived their authority from multiple statutory sources and that the new regulations were necessary for the protection of the environment.

The court reviews the challenges to regulations under the three-part standard articulated in Tire Jockey Services v. Department of Environmental Resources, 915 A.2d 1165, 1187 (Pa. 2007). Under Tire Jockey a regulation is valid if it was adopted within the agency’s granted power, issued pursuant to proper procedure, and is reasonable. …

July 31, 2019

Tim Goodman Interviews NHTSA’s Chris Perry on Regulatory Oversight, Recalls and Safety Standards

Mobility, Transport & Safety Practice Leader Tim Goodman interviewed NHTSA’s Christopher Perry, the agency’s chief legal officer for enforcement, on regulatory oversight, recalls and safety standards at ACI’s annual Automotive Product Liability Litigation Conference in Chicago on July 19. Chris Perry described NHTSA’s regulatory approach as promoting communication and innovation, including in AV technology, while maintaining NHTSA’s mission of safety.

For more information, click here.

July 30, 2019

Gas Pipeline Group’s Meeting Signals Stricter Safety Rules

Law360

(by Keith Coyle)

The Gas Pipeline Advisory Committee, or GPAC, the federal advisory committee that reviews the U.S. Pipeline and Hazardous Materials Safety Administration’s gas pipeline safety rulemaking proposals, met in Washington, D.C., late last month to consider proposed changes to PHMSA’s regulations for onshore gas gathering lines. Driven by recent developments in the oil and gas industry, particularly the expansion of pipeline infrastructure in the nation’s shale plays, PHMSA published a notice of proposed rulemaking in April 2016 that contained significant amendments to the federal safety standards and reporting requirements for rural gas gathering lines.

While the Trump administration had signaled a willingness to pursue a more measured approach, the GPAC largely endorsed the prior administration’s position, a decision that could ultimately produce a final rule with far-reaching impacts for the industry. According to PHMSA’s latest estimates, the GPAC’s recommended proposal would make about 90,000 miles of additional gas gathering lines subject to the agency’s gas pipeline safety standards. The Trump administration’s alternative would only extend the agency’s gas pipeline safety standards to about 25,000 miles of additional gas gathering lines greater than 12 inches in diameter.

The GPAC’s decision to back more ambitious rules for rural gas gathering lines could represent a dramatic turning point for the industry. Most of the nation’s gas gathering infrastructure has remained outside the reach of PHMSA’s jurisdiction for decades, due to a long-standing statutory exemption and the absence of sufficient safety data to justify federal regulations.

But the emergence in recent years of larger-diameter, higher-pressure gas gathering lines in the nation’s shale plays has raised concerns about the need for new safety standards and reporting requirements. Whether those concerns warrant the expansive rules contemplated by the GPAC, which would extend PHMSA’s safety standards to approximately 32,000 miles of 8-inch-diameter gas gathering lines in sparsely populated rural locations, will likely remain the primary point of contention throughout the remainder of the rulemaking process. …

July 26, 2019

Behind the hype: Adding context to autonomous vehicle commercialization

Smart Business

(by Jayne Gest with Justine Kasznica and Timothy Goodman)

At times, automated vehicles (AV) have dominated the headlines, so it can be easy to forget that the technology is still in the early stages of development and commercialization.

Justine Kasznica, shareholder at Babst Calland, is routinely asked: Why are AV companies and their automotive partners missing their stated deployment dates?

“This question raises an important point about current challenges to AV commercialization, with direct analogy to other autonomous mobility platforms, such as drones, personal delivery robots and more,” she says.

Some resources are being held back by the industry because of regulatory uncertainty, safety and security concerns, and the need for infrastructure that supports the technology, says Timothy Goodman, shareholder at Babst Calland.

“Even in view of this, progress is happening, particularly with regard to electrification and advanced driver-assistance systems (ADAS),” he says.

Smart Business spoke with Kasznica and Goodman, in the firm’s Mobility, Transport and Safety practice group, about AV development and commercialization.

Why should business executives stay aware of AV and other mobility development?

Automation has penetrated every segment of industry. In fact, warehousing, shipping, logistics and transportation are becoming more automated at a greater pace than ever before. In the future, whether it’s a drone, a legged robot or a wheeled delivery vehicle that solves the last mile problem, nearly every business will be impacted by AV. In addition, there’s plenty of opportunity to participate in this mobility evolution, even if it’s indirectly.

How is regulatory uncertainty playing a role in AV commercialization?

The federal government controls motor vehicle safety, with input from the automotive industry. …

July 15, 2019

The Expected and Unexpected of Working with Artificial Intelligence

Legaltech News

(By Christian A. Farmakis)

Stories of how AI will change the legal ecosystem forever are endless, yet ‘rubber meets the road’ proof that this is actually happening are few and far between. Here’s what one firm learned about knowing what AI can do and what they didn’t know it could do.

Like many law firms, Babst Calland is acutely focused on providing the best client service. However, pick up any corporate counsel survey and you quickly realize that the lack of quality legal service delivery by outside counsel is the number one point of dissatisfaction by GCs. While there’s disagreement between firms and clients about the degree of top-notch service delivery, there’s absolute agreement in identifying technology as the greatest service and innovation accelerator.

Enter artificial intelligence and machine learning, the proverbial silver bullets for every law firm looking to ‘do more with less’ and satisfy every client need. Stories of how AI will change the legal ecosystem forever are endless, yet ‘rubber meets the road’ proof that this is actually happening are few and far between. In fact, according to a Bloomberg Law survey on the state of legal operations and legal technology released during the recent Corporate Legal Operations Consortium (CLOC) Institute annual meeting, less than 25 percent of survey respondents indicated that they are using legal technology with artificial intelligence or machine learning. And of those deploying AI, I guarantee not all are game changing.

Our firm, along with our affiliate technology division Solvaire Technologies, are not only AI believers but after exhaustive AI tool evaluations, trials, and numerous AI projects under our belt, we have become our clients’ go-to resource in how we can leverage AI for their benefit. …

July 11, 2019

Major title issues in Pennsylvania, West Virginia and Ohio: Allocation wells royalty disputes, frac hits and water rights

The PIOGA Press

(The 2019 Babst Calland Report)

This article is an excerpt of The 2019 Babst Calland Report, which represents the collective legal perspective of Babst Calland’s energy, environmental and pipeline safety attorneys addressing the most current business and regulatory issues facing the oil and natural gas industry. A full copy of the report is available by writing info@babstcalland.com.

 Pennsylvania

 Emerging trend of allocation wells and cross unit drilling in the Appalachian Basin

 Allocation wells and cross unit drilling have the potential to create more economic wells using longer laterals, while overcoming unit size limitations commonly found in oil and gas leases. An allocation well is a lateral wellbore that crosses multiple lease boundaries of tracts that have not been pooled or unitized. Similarly, cross unit drilling involves laterals that traverse multiple units.

The use of allocation wells and cross unit drilling in Texas and Oklahoma has evolved out of legislation, administrative rulings and case law. Allocation drilling and cross unit drilling are not yet widely used in the Appalachian Basin, but as drilling technology evolves it is likely that operators will look to the feasibility of employing that technology across the basin.

The biggest risk with allocation wells in the Appalachian Basin is the lack of specific authority under most standard Appalachian Basin leases granting the operator the authority to drill allocation wells. Consequently, possible claims might be asserted challenging an operator’s transportation of non-native gas across leased lands or the commingling of native and non-native gas produced from separate units or leases. Another issue associated with the potential use of allocation wells is determining the appropriate method of allocating production royalties between the different lessors. …

July 3, 2019

Crossroads helps students reach their full potential

Pittsburgh Catholic

(by Paula A. Smith)

Dwayne Coleman, 24, speaking to a group of graduates at a college signing ceremony in May, said that if someone had told him as a teenager that he would travel to China and teach English he would have never believed them.

But with help from the Crossroads Foundation, his mother and the staff at Cardinal Wright Regional School, he came to believe in his academic abilities and potential for success.

Coleman, who was raised by a single mother with two younger children on Pittsburgh’s North Side, graduated from Central Catholic High School in 2012, thanks to assistance from Crossroads.

For the past nine months he worked with the Rand Corp. on the Phresh Project for Pittsburgh Hill/Homewood Research on Neighborhood Change and Health.

“Crossroads really fosters a sense of community,” Coleman said. “It’s easy for students like us to feel out of place because of having a lower socioeconomic background or for being disadvantaged students. But Crossroads provided financial support and tried to make sure the emphasis was on the whole person.”

The Crossroads Foundation is an organization like no other in Pittsburgh. It is a college preparatory program that began with 11 students in 1988 and recently celebrated its 30th academic year with 580 alumni.

Crossroads provides an integral approach committed to helping promising students of all ethnicities with a limited income to obtain a quality Catholic high school education and receive academic support to attend college. Students do not need to be Catholic.

Esther Mellinger Stief, executive director of Crossroads, said, “I make sure Crossroads keeps its commitment to every scholar of providing financial support, but more than that, the opportunities these young people need to fulfill their potential. …

June 28, 2019

Resideo Acquires LifeWhere, Expanding Remote Monitoring And Predictive Maintenance Capabilities

Babst Calland congratulates our friends at LifeWhere on their successful exit. We are proud to have represented you from formation through exit. Resideo and the LifeWhere team are well-positioned to continue the growth opportunities afforded by the LifeWhere technology.
Chris Farmakis, Sara Antol and Michael Fink from Babst Calland’s Emerging Technologies Group represented LifeWhere in the sale.
For more information, click here.

June 21, 2019

Early-stage companies: Get your patent attorney involved early

Smart Business

(by Jayne Gest with Carl Ronald)

Intellectual property (IP) drives value, especially in industries like robotics or medical devices. However, engineers would rather be developing new products. They dislike spending time on invention disclosures. Carl Ronald, shareholder at Babst Calland, believes patent attorneys can help fill this gap in younger companies that have started taking on outside investors.

“Sometimes, I will get a call from an engineering manager who just approved an employee request to present a poster at a conference. They’re wondering, ‘Is this is something that could affect patentability? Can you look at it? The conference is in five days,’” Ronald says.

It’s better to be proactive and strategic, where an attorney works with your engineering team — reducing the barriers to getting disclosures on paper, identifying what you should patent and what you should keep secret.

Smart Business spoke with Ronald about developing relationships between engineers and attorneys to build up an IP portfolio.

Why is it important to involve a patent attorney early in the development pathway?

It is critical to set the tone early. Executives that position the business as an innovative company need to make sure their employees are educated about IP, and that the organization is utilizing patents, trade secrets and other forms of IP to protect that value.

Let’s say, a Ph.D. student working with a company wants to publish an article. Some magazines have confidentiality around peer reviewers and some do not. So, a submittal to peer review could be a disclosure that could destroy novelty, thus destroying patentability. While in the U.S., you can disclose something and still file a patent within a year, overseas that is not the case. …

June 20, 2019

A Second Slice: Practical Considerations for Short-Term Rentals

The Legal Intelligencer 

(by Krista-Ann Staley and Jenn Malik)

On April 26, the Pennsylvania Supreme Court announced its opinion in Slice of Life v. Hamilton Township Zoning Hearing Board, No. 7 MAP 2018 (Pa. 2019), addressing the permissibility of short-term vacation rentals in residential zoning districts. Specifically, the Supreme Court addressed “whether a zoning ordinance that defines ‘family’ as requiring ‘a single housekeeping unit’ permits the purely transient use of property located in a residential zoning district.”

The Slice of Life litigation arose from a notice of zoning violation issued to the owner of a short-term rental property, a limited liability company whose only member resided in Brooklyn, New York. The owner operated several other properties as short-term vacation rentals. The property in question in Slice of Life operated solely as a short-term vacation rental and was located in Hamilton Township’s single-family residential zoning district. The zoning district only permitted “single family detached dwellings and accessory uses and essential services.” The applicable provisions of the township’s zoning ordinance are as follows:

  • “Dwelling” is defined as a building on a lot intended for and occupied exclusively as a residence for one family and specifically excludes hotels, motels, rooming houses or other tourist homes.
  • “Family” is defined as a “single housekeeping unit.”
  • “Single family housekeeping unit,” “rooming house” and “tourist home” are undefined by the zoning ordinance.

The subject property is a six-bedroom house that sleeps up to 17 people. One individual is responsible for signing the lease; however, no one associated with the property rental made any effort to ascertain the relationship between the individuals occupying the property. The rental company responsible for handling reservations collects no information concerning additional guests. …

June 18, 2019

Pennsylvania Public Utilities Commission Asks for Public Comments on Amending Hazardous Liquid Pipeline Safety Regulations

Pipeline Safety Alert 

(by James Curry, Keith Coyle and Brianne Kurdock)

On June 13, 2019, the Pennsylvania Public Utilities Commission (PAPUC) voted 5-0 to issue an Advance Notice of Proposed Rulemaking (ANOPR) soliciting public comment on whether to amend the pipeline safety requirements for public utilities that transport hazardous liquids.  PAPUC is seeking input on the following topics within 60 days of the date the ANOPR is published, or by no later than August 28, 2019:

  • Construction: Bare steel and vintage pipe, material and specification requirements for new and used pipe, depth of cover, underground clearance, valve location and spacing, and prior notification for construction activities.
  • Operations and Maintenance: Pressure test requirements and frequency, line markers, right-of-way inspections, leak detection, odorant, emergency response, and public awareness.
  • Corrosion Control: External and internal corrosion control measures, adequacy of cathodic protection, in-line inspections, and hydrostatic testing and pigging for assessing corrosion or cathodic protection.
  • Other topics:
    • Conversion of Service
    • Emergency Flow Restricting Devices
    • Operator Qualification
    • Accident Notification
    • Transparency and Protection for Security Information
    • Horizontal Directional Drilling
    • Geophysical Testing and Baselining
    • Protecting Public and Private Water Wells and Supplies
    • Eminent Domain

In issuing the ANOPR, PAPUC is taking an approach that is similar to the Pipeline and Hazardous Materials Safety Administration (PHMSA), which issued an Advance Notice of Proposed Rulemaking (ANPRM) in 2010 asking for public comment on whether to amend the federal safety standards for hazardous liquid pipelines. After reviewing the comments submitted in response to the ANPRM, PHMSA issued a Notice of Proposed Rulemaking (NPRM) in 2015 containing new safety standards addressing a number of topics.  …

June 18, 2019

Report Highlights Federal, State and Local Challenges and Opportunities for the U.S. Oil and Gas Industry

Natural gas production continues to increase in each of the nation’s seven largest shale basins

Babst Calland today released its annual energy industry report: The 2019 Babst Calland Report – The U.S. Oil and Gas Industry: Federal, State and Local Challenges & Opportunities; Legal and Regulatory Perspective for Producers and Midstream Operators. 

In this Report, Babst Calland energy attorneys provide perspective on issues, challenges, opportunities and recent developments in the oil and gas industry that are relevant to producers and midstream operators.

According to the International Energy Agency, “the second wave of the U.S. shale revolution is coming” and the United States will account for a 70 percent increase in global oil production and a 75 percent expansion in LNG trade in the next five years.

On a year-over-year basis, natural gas production continues to increase in each of the seven largest shale basins in the United States. Most notably, oil and natural gas production is being driven by three of the largest producing basins including Appalachia in Pennsylvania, West Virginia and Ohio, the Permian Basin in Texas and New Mexico, and the Haynesville Basin in southwestern Arkansas, northwest Louisiana, and east Texas.

Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group, said, “Domestic shale producers and operators continue to face myriad legal and regulatory challenges by regulatory agencies, the courts, activists, and the market. This annual review is a snapshot of the issues and trends on the federal, state and local level in the oil and gas industry over the past year.”

The 92-page Babst Calland Report covers a range of topics from the industry’s business outlook, regulatory enforcement and rulemaking to developments in pipeline safety and litigation trends. …

June 14, 2019

The West Virginia Supreme Court Confirms the Right of Mineral Owners to “Reasonably Use” the Surface to Extract Minerals – for Now

Energy Alert

(by Timothy Miller and Mychal Schulz)

The West Virginia Supreme Court issued an opinion in Andrews v. Antero Resources Corp. and Hall Drilling, LLC, No. 17-0126 (W. Va. June 10, 2019), an eagerly-awaited decision arising out of the In re: Marcellus Shale Litigation, in which hundreds of lawsuits have been filed against E&P and midstream oil and gas companies alleging that activities related to the production, compression, and transportation of natural gas represented a private nuisance.

The Property Owners in Andrews, which represented the first trial group in In re: Marcellus Shale Litigation, alleged that the fracking operations of Antero and Hall Drilling “in relation to their development of the Marcellus shale have caused Property Owners to lose the use and enjoyment of their properties due to the annoyance, inconvenience, and discomfort caused by excessive heavy equipment and truck traffic, diesel fumes and other emissions from the trucks, gas fumes and odors, vibrations, noise, lights, and dust.”  They filed a complaint alleging claims for “private temporary continuing abatable nuisance and negligence” against Antero and Hall Drilling arising from their “natural gas exploration, extraction, transportation and associated activities in close proximity to [Property Owners’] properties.”

Eventually, the Property Owners voluntarily dismissed all claims for (1) property damages, (2) physical or medical injury, and (3) negligence.  By the time the Mass Litigation Panel (MLP) addressed the motions for summary judgment filed by Antero and Hall Drilling only the Property Owners’ private nuisance claims remained.

While the MLP granted Antero’s and Hall Drilling’s motion for summary judgment, it “declined to apply principles of nuisance law, and instead ruled on the summary judgment motions based upon Antero’s contractual and property rights.”  Specially, the MLP’s Order stated that “[b]ecause the Court resolves summary judgment based upon Antero’s contractual and property rights, it does not address the issues to which common law private nuisance principles would be applied.  …

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