March 31, 2020

EPA’s New Proposed Interpretation of “Begin Actual Construction” Under the New Source Review Preconstruction Permitting Regulations

Environmental Alert 

(by Julie Domike and Michael Winek)

On March 25, 2020, EPA released a draft guidance memorandum proposing to change the agency’s interpretation of the term “begin actual construction” under the New Source Review (NSR) preconstruction permitting regulations.  If finalized, this proposed guidance would expand the activities the factories, power plants, refineries and other industrial operations may undertake while waiting to receive an NSR permit.

Federal NSR permitting regulations provide that “[n]o new major stationary source or major modification . . . shall begin actual construction without a permit that states that the major stationary source or major modification will meet those requirements.” 40 CFR § 52.21(a)(2)(iii).  The regulations define the term “begin actual construction” to mean “in general, initiation of physical on-site construction activities on an emissions unit which are of a permanent nature.” 40 CFR § 52.21(b)(11).

EPA currently interprets “begin actual construction” as almost any physical on-site construction activity that is of a permanent nature, even if the activity does not involve construction “on an emissions unit.”  This interpretation precludes many preparatory activities such as installation of building supports and foundation, paving, laying of underground piping, construction of a permanent storage structure, and other similar activities.

Under the proposed revised interpretation, a source owner or operator, prior to obtaining an NSR permit, may undertake physical on-site activities – including activities that may be costly, that may significantly alter the site, and/or are permanent in nature – provided that those activities do not constitute physical construction on an emissions unit.  Under this interpretation, an “installation necessary to accommodate” the emissions unit at issue is not considered part of the actual emissions unit; thus, construction of such an installation would be permissible in advance of obtaining an NSR permit.  …

March 30, 2020

Assessing Your Organization’s Stimulus Program Options

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

The COVID-19 pandemic is impacting every business sector in the United States. Federal government and the Commonwealth of Pennsylvania have announced various stimulus programs to assist businesses eligible to receive certain economic benefits. Babst Calland’s Corporate and Commercial attorneys have been following the existing and new stimulus programs currently being offered.

This is a time-sensitive opportunity to consider how these programs may apply to your business. Various programs are summarized below for your convenience. Together, we can help you navigate this crisis and prepare your organization to continue thriving in the months and years ahead. To schedule a private conversation to help you evaluate whether these programs are right for your company, contact Attorney Moore Capito at 304.552.8986 or mcapito@babstcalland.com.

ECONOMIC INJURY DISASTER LOAN

Description

An Economic Injury Disaster Loan (EIDL) is a long-term, low-interest loan that provides small businesses with working capital of up to $2 million directly from the U.S. Treasury. The intent of this federal program is to provide six months of working capital to qualified applicants.
In response to the impacts of the COVID-19 pandemic, the U.S. Small Business Administration (SBA) has lifted certain requirements to make it easier for small businesses to receive an EIDL.

Who is eligible to receive it?

Small businesses and sole proprietors in all 50 states, Washington, D.C., and U.S. territories may apply for an EIDL, so long as they do not exceed the size standard for the industry in which they operate. …

March 30, 2020

EPA Establishes Temporary Policy for Excusing COVID-19-Related Noncompliance

Environmental Alert

(by Lisa Bruderly, Ben Clapp and Gary Steinbauer)

In light of historic protective measures and travel bans to prevent community spread of COVID-19, the U.S. Environmental Protection Agency (EPA) issued an unprecedented temporary policy for exercising its enforcement discretion for environmental noncompliance caused by the COVID-19 pandemic.  On March 26, 2020, the EPA published a memorandum entitled, COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program (“EPA’s COVID-19 Policy” or “Policy”).  EPA’s COVID-19 Policy applies retroactively, beginning on March 13, 2020, and is in effect until EPA provides notice online within seven days of its termination.  This Alert addresses five critical questions about EPA’s COVID-19 Policy.

When Does EPA’s COVID-19 Policy Apply?

EPA’s COVID-19 Policy applies when environmental compliance is not “reasonably practical,” despite making every effort to comply.  Coverage under the Policy is not automatic.  It requires regulated entities to take, at a minimum, the following proactive steps: (1) minimize the effect and duration of any noncompliance; (2) identify the nature and date(s) of noncompliance; (3) identify how COVID-19 caused the noncompliance and describe the response actions taken; (4) return to compliance as soon as possible; and (5) document each of these actions.

What Compliance Monitoring and Reporting Obligations Does the Policy Cover?

Generally, EPA does not expect to assess penalties for violations of a wide-range of routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification obligations if: (1) the regulated entity takes the steps outlined above and documents that COVID-19 was the cause of the noncompliance, and (2) EPA agrees with the entity’s determination.

EPA expects regulated parties to use existing statutory, regulatory, and permitting requirements for reporting COVID-19-related noncompliance, unless COVID-19 response actions themselves hinder reporting, in which case EPA expects facilities to document and maintain noncompliance-related information internally and make it available upon request.  …

March 26, 2020

2 Recent Court Opinions Clarify Mechanics’ Lien Claim Practices, Procedures

The Legal Intelligencer

(by Marc Felezzola and Benjamin Wright)

Two recent opinions from Pennsylvania’s Superior Court clarify aspects of the practice and procedure surrounding mechanics’ lien claims in the commonwealth—one case addressed whether a subcontractor may serve its formal notice of intent to lien upon an owner via FedEx and the other addressed when, if ever, grounds for statutory preliminary objections to a mechanics’ lien claim will be deemed waived.

  • Superior Court permits service of subcontractor’s formal notice of intent to lien via FedEx.

In American Interior Construction & Blind v. Benjamin’s Desk, 206 A.3d 509 (Pa. Super. Ct. 2019), the Superior Court was asked to determine whether the procedural rules of the Mechanics’ Lien Law were to be interpreted strictly or whether substantial compliance would suffice.

In American Interior, Benjamin’s Desk had retained Brass Castle Building (Brass) as the general contractor for the construction of office space improvements. Brass retained American Interior Construction & Blind  (AICB) as a subcontractor. AICB completed its work in December 2016 and AICB alleged that Brass failed to pay AICB in full.  AICB served a timely notice of its intent to file a mechanics’ lien against Benjamin’s Desk. However, AICB used FedEx to deliver its notice of intent. AICB then filed its complaint to enforce the lien claim.

Benjamin’s Desk filed preliminary objections in the nature of a demurrer alleging AICB failed to comply with the service-of-notice requirements under the Mechanics’ Lien Law. In response, AICB filed a response arguing that personal service of the formal notice by FedEx is personal service by an adult in the same manner as a writ of summons in assumpsit and therefore was expressly permitted by section 501(d) of the Pennsylvania’s Mechanics’ Lien Act of 1963 (Lien Law), 49 P.S.  …

March 26, 2020

Pennsylvania Legislature Considering Modification of Public Meeting Rules, Suspension/Tolling of Land Use Application Deadlines during COVID-19 Emergency Declaration

Client Alert

(by Blaine Lucas, Stephen Korbel and Max Junker)

Among the many challenges facing Pennsylvania municipalities during the Coronavirus pandemic is how to conduct business in compliance with applicable statutory requirements when the physical presence of their officials, constituents, development applicants and other interested parties is either highly discouraged by public health officials or prohibited altogether. This can be particularly problematic for applicants for a variety of local government land use approvals, consideration and action on which usually are statutorily mandated to take place at public meetings and hearings.

In an effort to address these issues, the Pennsylvania General Assembly is currently considering House Bill No. 1564 on an expedited basis.  Among other things, HB 1564 would relax the requirements for physical attendance at public meetings during the Governor’s declaration of a disaster or emergency by substituting a variety of telecommunications alternatives. It also would provide for the suspension, or tolling, of statutory deadlines for municipal boards and agencies to hear and act upon a wide variety of land use and other development applications during the pendency of such a declaration.  Notably, HB 1564 provides that an applicant can request, and a municipality at its discretion may proceed with, consideration and action on an application using telecommunication alternatives.

HB 1564 is on a fast track, with the House approving it on March 25, 2020, and the Senate expected to act upon it in the next several days. HB 1564 can be viewed here.

The following are the key provisions of HB 1564.

Use of Telecommunication Devices to Conduct Public Meetings

If the declaration is of a disaster or emergency which would render the conduct of public business dangerous to the health or safety of the members of the governing body, officials or members of the public, the governing body may exercise its executive, legislative, and judicial powers and functions, to the extent possible, by means of telecommunication devices without a quorum physically present at any one location, subject to the following requirements:

  • The telecommunication device must permit audio communication between locations, and allow the members of the governing body to speak and hear any comments or votes;

    • …

March 25, 2020

DOL Announces April 1 Effective Date and Additional Guidance on Families First Coronavirus Response Act

Employment & Labor Alert

(by Molly Meacham, Alexandra Farone and Chelsea Heinz)

This is a follow-up to Babst Calland’s client alert on the Families First Coronavirus Response Act provisions and related new leave requirements.  The Department of Labor announced that the effective date will be April 1, 2020.  The leave is not retroactive and begins April 1.  Each company’s number of employees to determine whether it meets the 500-employee threshold will be calculated at the time the leave is to be taken.  The Department of Labor released Question and Answer guidance available here, providing additional preliminary information on calculating the employee threshold, leave calculations, rate of pay calculations, and interactions with other types of leave.  The full regulations have not yet been released, and are expected prior to the April 1 effective date.

The model notice issued by the Department of Labor is available here, and was issued along with a Frequently Asked Questions regarding the notice requirements available here.  The notice does not need to be displayed until April 1, 2020 and most employers will want to wait to publish the notice until their FFCRA policy is ready to avoid employee confusion.   The notice must be posted in a conspicuous place on the employer’s premises, which may include email, company intranet, or physically at the workplace depending upon current operations.

Please contact any of Babst Calland’s Employment and Labor attorneys if you need advice on the Families First Coronavirus Response Act and its requirements.

Click here for PDF. 

March 23, 2020

Protect what’s yours: How to create a strong trademark with a new product or business name

Smart Business

(by Jayne Gest with Carl Ronald)

A trademark or service mark identifies a company as the source of a particular set of goods or services. It protects the association, in a consumer’s mind, between goods or services and the company that sells or produces them.

“We try to protect the goodwill a company has earned by registering and enforcing their trademarks to make sure no one obtains an unfair business advantage by trading off our clients’ goodwill in the marketplace,” says Carl Ronald, shareholder at Babst Calland.

Smart Business spoke with Ronald about adopting trademarks.

How long do trademarks last?

Theoretically, trademarks can last forever. Realistically, though, trademark protection lasts as long as you continue to use a name or logo in the marketplace. There are two types, registered and unregistered, and the latter is often called “common law” marks.

A registered trademark is a text or design mark that a company applies for with the United States Patent and Trademark Office. So long as the business continues to use the mark and appropriate maintenance procedures are complied with, the registration will be good for an unlimited number of renewable terms of 10 years each.

Common law marks, on the other hand, last as long as they continue to be used in commerce but convey less protection.

What’s the procedure for protecting a new product or business name?

First, identify the word or logo you wish to use with your product or service, and decide whether you’re likely to use it longer than a few years, in order to justify the cost. …

March 20, 2020

Seeking Clarity around Governor’s Order to Close Pennsylvania Businesses that are not “Life-sustaining”

Client Advisory

(by Jim Corbelli and Molly Meacham)

In the late afternoon of March 19, 2020, and without advanced notice, Pennsylvania Governor Tom Wolf issued an Order for all “non-life-sustaining businesses” in the Commonwealth to close their physical locations.  The Order was effective at 8 p.m. last evening with enforcement to begin at 12:01 a.m. on Saturday, March 21.  A copy of the Order can be found here.  There are many questions that arise from the Governor’s Order, and it can be expected that further clarifications will be forthcoming from the Governor’s office. The Governor’s office has also issued a press release with additional information.

In a press conference at 2 p.m. today, the Governor stated that the guidelines are being revised based upon feedback from businesses and other stakeholders, and that the forthcoming guidelines will be in line with the federal government’s Cyberspace and Critical Infrastructure Security Agency (CISA) guidance that has identified 16 “Critical Infrastructure Sectors,” as available here.  In addition, the Governor encouraged businesses to seek a waiver if they believe that they have been incorrectly categorized as “non-life-sustaining.”  The waiver process is meant to “cut through red tape” and the Governor stated that decisions will issue via email.

While further guidance remains pending, this Alert will summarize the current Order and suggest methods to address confusion regarding the Order or to seek relief from its provisions.

The Order provides that “No person or entity shall operate a place of business in the Commonwealth that is not a life sustaining business regardless of whether the business is open to the members of the public.” The Order does not prevent working from home. …

March 20, 2020

Turning Down the Heat – What sort of legal and legislative action is necessary to help put Pennsylvania on the front lines of the battle against climate change

Pennsylvania’s Best Lawyers

(by Joseph Reinhart)

Much state environmental law is based on federal statutes. How can environmental-law attorneys help?

Environmental lawyers can be instrumental in sustaining rural communities and protecting natural resources by helping landowners and businesses understand the complex and interrelated laws and regulations governing so many aspects of economic development. Many municipalities in Pennsylvania have passed ordinances designed to protect residents in rural areas from environmental harm associated with natural-resource development. In some cases, these ordinances are issued with the intention of implementing Pennsylvania’s Environmental Rights Amendment. These ordinances may require approval prior to conducting activities as common as earth disturbance and road usage. Sorting out the laws and ordinances applicable to these activities, and determining which governmental authority has jurisdiction over them, are tasks well-suited to attorneys trained in environmental law.

Many states have developed their own climate-change plans. Do you think Pennsylvania will do that?

In 2018, Governor Tom Wolf issued an executive order establishing a Climate Action Plan for the commonwealth. The plan seeks to achieve, by 2025, a 26 percent reduction in greenhouse-gas emissions from 2005 levels. It includes a wide variety of proposed actions, including improvements in energy efficiency, increased use of electric vehicles, maintenance of nuclear generating capacity, and investment in solar development. The plan also contemplates development of a cap-and-trade program to limit carbon-dioxide emissions.

Will the passage of certain laws be necessary?

Wolf’s executive order requiring the development of a cap-and-trade program has been met by stiff resistance from parties concerned about the costs and potential adverse economic consequences associated with a carbon tax. In December 2019, members of the Pennsylvania House and Senate referred bipartisan companion bills, known as the Pennsylvania Carbon Dioxide Cap and Trade Authorization Act, to their respective environmental and energy committees. …

March 20, 2020

The Coronavirus May be a Basis to Invoke the Force Majeure Provision of Consent Orders and Consent Decrees in Pennsylvania

Environmental Alert

(by Kevin Garber, Sean McGovern and Jean Mosites)

On March 6, 2020, Governor Tom Wolf issued a Proclamation of Disaster Emergency throughout the Commonwealth under the Pennsylvania Emergency Management Services Code in response to the expanding COVID-19 coronavirus pandemic.  On March 13, President Donald Trump declared a state of national emergency.  Many other states and local governments are following suit.  These government actions may be a basis to invoke the force majeure clause of consent orders and consent decrees between regulated parties and the Pennsylvania Department of Environmental Protection, other state and local environmental regulatory agencies or the U.S. Environmental Protection Agency.

The standard force majeure provision of most PADEP consent order and agreements allows deadlines in the order to be extended if circumstances beyond the reasonable control of the regulated party prevent compliance with the order.  Similar provisions are often found in consent agreements with USEPA and in consent decrees approved by federal and state courts.  These force majeure provisions typically require the affected party to notify the agency of the force majeure event when the party becomes aware or reasonably should have become aware of the event impeding performance.  For example, the model PADEP Consent Order and Agreement requires telephone notice within five working days and written notice, in some circumstances by notarized affidavit, within 10 working days describing the reasons for the delay, the expected duration of the delay, and the efforts being taken to mitigate the effects of the event and length of the delay.  This model provision states that failure to comply with the timing and notice requirements invalidates a force majeure extension.

There are compelling reasons why the coronavirus pandemic, which is unlike any event experienced in this country, is beyond the contemplated scope of agency force majeure clauses such that strict adherence to the timing and notice provisions should be excused and extensions should be granted as necessary.  …

March 19, 2020

The Families First Coronavirus Response Act

Employment & Labor Alert

(by Molly Meacham, Alexandra Farone and Chelsea Heinz)

The Families First Coronavirus Response Act (the “Act”) was enacted on March 18, 2020 and adds two additional types of leave connected to the coronavirus (“COVID-19”) pandemic.  Employers should immediately institute policies relating to these new leaves to ensure proper compliance and to avoid violating the Family and Medical Leave Act or the Fair Labor Standards Act.

Key Provisions Related to Coverage

  • The new leave provisions apply to private sector employers with fewer than 500 employees and provide eligible workers with additional paid and unpaid time off over and above any existing leave already provided by their employer.  Businesses that were too small to be previously subject to FMLA are now covered by these provisions.
  • Under the Act, the Secretary of Labor is given the authority to issue regulations that would exclude health care workers and emergency responders from the Act, as well as businesses with less than 50 employees where the regulations would jeopardize the business as a going concern.  Unless and until the Secretary of Labor issues such regulations, the provisions of the Act apply to all private sector employers with less than 500 employees.
  • Any leave payments made pursuant to the Act are capped as described below at the amount of the tax credits created to reimburse employers (maximum aggregate over both leaves of $15,110 per employee).
  • The Act is effective not later than April 2, 2020, and remains in effect until December 31, 2020.  Under the Act the Department of Labor is to issue a mandatory workplace poster relating to the new leave provisions by March 25, 2020.

    • …

March 18, 2020

Business Continuity During the COVID-19 Pandemic; Leveraging AI/Machine Learning Contract Review

Client Advisory

(by Christian Farmakis)

Dear Clients and Friends:

Clearly, in light of the COVID-19 pandemic, this is a time for reflection and a time for staying on top of our personal and professional priorities.

With the Coronavirus pandemic having a widespread effect on business continuity, supply chains and revenues, Babst Calland and its alternative legal service provider, Solvaire, are currently advising C-suite executives and managers as they seek to quickly assess their contract provisions, evaluate their exposure and make effective operational and financial risk-based decisions. Of particular concern, key suppliers may desire to invoke “force majeure”, delay or termination provisions during this time of uncertainty. Similarly, our clients may desire to invoke these same provisions to delay or terminate unessential projects.

By employing a series of AI/machine learning and other legal technologies, we can conduct accelerated and thorough searches across huge document sets revealing key information about each contract before our professional staff even begins reviewing the documents.
During this time, we understand the unprecedented challenges your organization and internal teams may be facing. Our team is here to help. Solvaire has 20 years of project management and quality control experience to organize and manage contract review projects from start to finish.

We employ flexible staffing models and can quickly ramp up staffing based on deadlines and need. Our reviewers and staff are fully capable of working remotely, allowing us to comply with the latest CDC Guidelines regarding social distancing.

Projects can be customized to fit your timeline and needs. Representative contract clause extraction provisions include force majeure, material adverse effect, termination, insurance, delay, term, governing law, payments and notice information, among others. Our legal technologies can also be quickly “trained” to find critical contract provisions unique to your business or industry. …

March 11, 2020

DEP unveils initial draft of carbon dioxide trading rule to Air Quality Technical Advisory Committee

The PIOGA Press

(by Kevin Garber and Jean Mosites)

On February 13, the Department of Environmental Protection presented its preliminary draft proposed rulemaking to establish a carbon dioxide budget trading program to the Air Quality Technical Advisory Committee (AQTAC). The proposed trading program would apply to fossil fuel fired electricity generators of greater than 25 MW in Pennsylvania. The draft proposal reflects a first look at DEP’s vision for a cap-and-trade program as directed by Governor Tom Wolf’s October 3, 2019, Executive Order 2019-07.

The draft proposed rule, although still in development, parallels the model rule prescribed by the Regional Greenhouse Gas Initiative (RGGI). RGGI is a coalition of 10 states in the Northeast and Mid-Atlantic that participate in a regional CO2 cap-andtrade program for fossil fuel-fired electricity generating units that have a nameplate capacity of over 25 MWe.

Under the program, each member state has a budget of CO2 allowances, which it then allocates through setaside programs, offsets or periodic auctions. The number of allowances in each state’s CO2 budget that are allocated through auction varies widely among members. Each affected source (CO2 budget source) is required to hold sufficient CO2 allowances based on its CO2 emissions as determined from continuous monitoring. Each allowance is equal to one ton of CO2 emissions.

States’ CO2 budgets, and in turn available allowances, periodically reduce over time. This requires each CO2 budget source to either reduce CO2 emissions as measured by continuous monitoring, or obtain extra CO2 allowances to cover its emissions in excess of its allowance account. Under RGGI, auctions to obtain allowances generally occur quarterly, and may be open to qualified participants other than CO2 budget sources. The draft proposed rule explicitly mentions financial institutions and environmental groups as potential auction participants. …

March 4, 2020

Potential Impacts to Real Estate Development of Proposed Amendments to NEPA Regulations

Developing Pittsburgh

(by Matthew Moses, Mary Binker, Ben Clapp and Casey Snyder)

Proposed changes to regulations implementing the National Environmental Policy Act of 1969 (NEPA) have the potential to affect real estate development within the greater Pittsburgh region and nationwide. The proposed regulations, issued by the Council on Environmental Quality (the “CEQ”) in January 2020, would revise NEPA procedures by narrowing both the scope of actions that must be reviewed under NEPA as well as the extent of such review. With these changes, the time, cost and environmental analysis required to comply with NEPA could be significantly reduced, and development projects that previously faced delays could proceed more quickly through the review process, or potentially avoid it altogether.

Background and Purpose of NEPA

NEPA was enacted in 1970 with the goal of promoting accountability and transparency in federal decision-making by ensuring that the environmental impacts associated with federal actions were considered by the agencies undertaking those actions. Under NEPA, each federal agency is responsible for conducting a NEPA analysis on all agency actions that are deemed “major Federal actions” to determine if such actions impact the environment. “Major Federal actions” are currently defined in CEQ NEPA regulations as “actions with effects that may be major and which are potentially subject to federal control and responsibility” (emphases added). That may include both federal projects and projects undertaken by non-federal entities that receive federal funding or require federal permitting. Examples of major Federal actions include oil and natural gas pipeline construction projects, highway construction, and bridge replacement. The federal agency that takes a major Federal action (e.g., the issuance of a permit) is required to prepare an analysis of the project’s effects on the environment, which can take three forms: (i) a categorical exclusion (CE) for an action that has been previously determined to involve no significant environmental impacts; …

March 4, 2020

Babst Calland Attorney Jean M. Mosites Appointed to the EHB Rules Committee

Jean M. Mosites was recently appointed by Rep. Mike Turzai, the Speaker of the Pennsylvania House of Representatives to the Pennsylvania Environmental Hearing Board Rules Committee. Committee members serve two-year terms and may be reappointed for additional terms.

The Rules Committee reviews and makes recommendations regarding procedural rules for matters brought before the EHB. The Committee consists of nine attorneys who are in good standing before the Bar of the Supreme Court of Pennsylvania and who have practiced before the Board for a minimum of three years or who have comparable experience.

As a shareholder in Babst Calland’s Environmental and Energy and Natural Resources practice groups, Ms. Mosites has extensive experience representing clients in administrative appeals and environmental litigation in state and federal courts and before the Environmental Hearing Board in Pennsylvania, as well as counseling on environmental compliance and resolving liabilities under federal and state law.

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