Articles, Alerts & Perspectives

Babst Calland announced the addition of William L. Godfrey as Director, Mobility, Automation and Safety.

The Firm is expanding its capabilities to support the developing needs of companies with emerging technologies.  It provides strategic leadership with business and legal advice for manufacturers, suppliers, start-ups, technology companies and government entities in the full-spectrum of transportation regulatory, safety, product quality, and automation matters, including those related to automated/autonomous driving systems.

“Will Godfrey’s expertise and creativity deepens our unique vision to deliver full-stack solutions to clients’ problems that integrate technical and engineering know-how with legal insight to expand business opportunities,” said Tim Goodman, Chair of Babst Calland’s Mobility, Transport and Safety Group, and former National Highway Traffic Safety Administration Assistant Chief Counsel for Enforcement and Federal Senior Executive.

A former General Motors vehicle engineer, production manager and senior U.S. federal regulatory chief at the National Highway Traffic Safety Administration (NHTSA)/U.S. Department of Transportation (DOT), Will Godfrey will assist clients in achieving their business goals and navigating obstacles by applying a current and detailed understanding of the federal government’s approach to transportation safety regulation (particularly motor vehicles), including its programs, processes, and personnel.

Godfrey spent nearly a decade at NHTSA/DOT, where he served in various leadership capacities.  Among other things, as NHTSA’s Trends and Analysis Division Chief, he led the oversight, analysis, and investigation of more than 1,100 vehicle, equipment, tire, motorcycle, and child car seat manufacturers globally, including TREAD Act/Early Warning Reporting Program and the integration of new, data-driven techniques.  As a senior policy advisor to the NHTSA Administrator, he led the agency’s comprehensive reorganization of the NHTSA Office of Defects Investigation (ODI).

“Will Godfrey is well-regarded and uniquely qualified to serve clients with emerging technologies as a senior technical and strategic advisor, integrated with our best in class legal and technical team,” said Donald C. …

Corporate Alert

(by Johanna H. Jochum and Kevin T. Wills)

On May 25, 2018, the European Union General Data Protection Regulation No. 2016/679 (GDPR), which limits personal data processing, became effective and enforceable.  Unlike most EU regulations, portions of the GDPR are applicable to companies in third party countries—including companies in the United States.

The extraterritorial ramifications of the GDPR are already apparent.  Many U.S.-based companies that generate revenue from processing large amounts of personal data have recently revised their privacy policies to comply with the GDPR requirements.  However, for companies with business models that do not center on personal data processing, the extent of the GDPR’s reach and application is less clear.

1. What is the GDPR?

In the age of the internet, nearly everyone routinely shares personal data in everyday tasks. The purpose of the GDPR is to protect the “fundamental rights and freedoms” of people who share that personal data by limiting the extent a third party can process that personal data.

The GDPR’s definitions of “personal data” and “processing” are broad enough that most online activities are captured. For example, “personal data” can be “any information” relating to an identifiable person, including a person who can be identified by a username or location ID.[1] Further, “processing” is defined to include activities such as collection, storage or dissemination of personal data.[2]

Generally speaking, no company may process personal data that is distributed during these everyday tasks at all unless the data falls into one of six broad exemption categories: (1) consent; (2) contractual obligations; (3) legal obligations; (4) protection of “vital interests”; …

Energy and Natural Resources Alert

(by Blaine A. Lucas and Robert Max Junker)

In Gorsline, Court Declines to Rule on Broader Issue of Compatibility With Uses in Residential and Agricultural Zoning Districts, but Suggests that Municipalities May Permit Unconventional Natural Gas Drilling in any and all Zoning Districts

The Pennsylvania Supreme Court published its long-awaited opinion in Gorsline v. Board of Supervisors of Fairfield Township on June 1, 2018.  Although the majority reversed the Commonwealth Court’s decision affirming the granting of a conditional use for an unconventional natural gas well pad, it did so in a narrow holding, finding that Inflection Energy, LLC (Inflection) did not present enough evidence before the Fairfield Township (Township) Board of Supervisors (Board) establishing that its proposed unconventional gas well pad was similar to other uses allowed in the Township’s  Residential-Agricultural Zoning District (R-A District).  Unlike most zoning ordinances, the Township’s zoning ordinance did not specifically authorize oil and gas wells.  Instead, Inflection had relied upon a “savings clause,” which allowed uses “similar to” the other uses specifically allowed in the R-A District.

Despite headlines and press releases touting the Gorsline decision as a wholesale rejection of oil and gas development in residential and agricultural zoning districts, its ruling was much more limited.  In fact, language in both the Gorsline majority and dissenting opinions largely rejects the post-Robinson Township assertion of many shale gas opponents that natural gas wells must be relegated to industrial zoning districts and are fundamentally incompatible with residential or agricultural zoning districts.

Background

Babst Calland’s overview of the Commonwealth Court’s September 14, 2015 decision can be found here.  …

Energy Alert

(by David W. Ross, Mark A. Lindsay and Erica K. Dausch)

On May 25, 2018, in In re: Sabine Oil & Gas Corporation, 2018 WL 2386902 (2d. Cir. May 25, 2018), the United States Court of Appeals for the Second Circuit affirmed that a bankrupt energy and production company could reject its gas gathering agreements with a midstream company under Section 365 of the Bankruptcy Code because the gas gathering agreements did not create or involve an interest in real property.

Background
Sabine Oil & Gas Corporation (Sabine), an energy and production (E&P) company, filed for Chapter 11 bankruptcy protection in 2015 in the Southern District of New York.  Prior to its bankruptcy filing, Sabine entered into gathering agreements (the “Agreements”) with Nordheim Eagle Ford Gathering, LLC (Nordheim), whereby Sabine was required to “dedicate” all of the gas it produced in a designated area to Nordheim, which would then gather and treat the gas.  If Sabine could not deliver the minimum required amounts of gas to Nordheim, it was required to make significant deficiency payments.

Section 365 of the Bankruptcy Code permits a debtor to reject pre-petition executory contracts and unexpired leases that the debtor deems to be burdensome, thereby relieving the debtor of the obligation to perform moving forward.  Agreements that involve the conveyance or creation of interests in real property (other than unexpired leases) are generally not subject to rejection under Section 365.

Sabine sought to reject the Agreements under Section 365 because Sabine deemed the terms of the Agreements, including the requirement to make significant deficiency payments, overly burdensome.  Nordheim argued that the “dedications” contained in the Agreements were “covenants that run with the land” and thereby constituted interests in real property that were not subject to rejection under Section 365. …

Environmental Alert 

(by Kevin J. Garber and Jean M. Mosites)

On May 11, 2018, in The Delaware Riverkeeper, et. al. v. DEP and R.E. Gas Development, LLC., the Pennsylvania Environmental Hearing Board issued an opinion upholding well permits and renewals issued by the Department of Environmental Protection in an appeal based in part on Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA). EHB Dkt. No. 2014-142-B (consolidated with 2015-157-B) (May 11, 2018).

The ERA provides:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

The Board previously addressed the ERA in Friends of Lackawanna v. DEP and Keystone Sanitary Landfill, EHB Dkt. No. 2015-063-L (November 10, 2017) (FOL) and Center for Coalfield Justice and Sierra Club v. DEP, EHB Dkt. No. 2014-072-B (August 15, 2017) (CCJ). In another matter involving the Center for Coalfield Justice and DEP permitting action with respect to proposed mining operations, the Board also analyzed the ERA in a decision denying a petition for supersedeas. Center for Coalfield Justice and Sierra Club v. DEP, EHB Dkt. No. 2018-028-R (April 24, 2018). All of these cases analyze Department permitting decisions in light of the Pennsylvania Supreme Court’s June 20, 2017 decision in Pennsylvania Environmental Defense Foundation v. …

Attorney Tim Goodman will be presenting a pre-conference workshop “Automated/Autonomous Driving Systems (ADS) Innovation Boot Camp for Automotive Product Liability Litigators” at the American Conference Institute’s Automotive Product Liability Conference, July 18-20, 2018.

Automotive experts forecast that within the next five years, we will be sharing the road with automated/autonomous vehicles on a daily basis. In theory, vehicular automation is intended to increase safety by eliminating the human error component that causes most accidents. However, in practice, the prospect of every OEM developing an autonomous vehicle does not come without concerns, especially relative to automotive product liability. Despite the intended consequences of autonomous vehicles, there are certain outcomes that are leaving members of the legal community scratching their heads. Join attorneys and technical specialists who are helping shape ADS policy in the mobility, transport and safety space.

This workshop will provide insights into this technology, along with the legal and regulatory ramifications. Points of discussion, among other things, will include:

• SAE levels of driving automation
• ADS systems, sensors, connectivity, architecture and related issues
• ADS and self-certification of applicable federal safety standards
• Homologation and regulatory compliance challenges
• Innovative mobility and safety approaches
• Best practices and emerging trends
• Recent legislative and regulatory developments

For more information about the conference and this pre-conference workshop, click here.

Environmental Alert

(by Lisa M. Bruderly and Gary E. Steinbauer)

On April 12, 2018, the U.S. Court of Appeals for the Fourth Circuit in Upstate Forever v. Kinder Morgan Energy Partners, L.P., No 17-1640, held that the Clean Water Act (CWA) regulates point source discharges that reach “navigable waters” through groundwater with a “direct hydrologic connection” to the surface water. With this decision, the Fourth Circuit (which includes Maryland, North Carolina, South Carolina, Virginia and West Virginia) has joined the Ninth Circuit in recognizing the so-called groundwater “conduit theory” of liability under the CWA, a theory environmental groups are relying upon in several CWA citizen suits across the country. Under the groundwater “conduit theory,” separately regulated and permitted wastewater collection basins, impoundments, wells, and/or pipelines that result in groundwater contamination could be the targets for CWA liability, even though it is widely accepted that the CWA does not regulate discharges to groundwater itself. These cases have broad implications for many industries, including steelmaking, pipelines, mining, chemical manufacturing, oil and gas development, and utilities.

Background and District Court Decision

The Upstate Forever case dates back to 2016, when two environmental organizations filed a lawsuit alleging CWA violations stemming from a 2014 pipeline leak. According to the complaint, 369,000 gallons of petroleum products leaked from an underground pipeline. The plaintiffs alleged that the pipeline contents seeped into groundwater and later into two nearby creeks and their adjacent wetlands downgradient from the leak. The leak was fixed within a few days of discovery and approximately 209,000 gallons of petroleum products were recovered through remediation efforts overseen by a state environmental regulatory agency. The plaintiffs, however, alleged that a plume of petroleum contaminants continued to migrate from groundwater to surface water several years after the leak was fixed. …

Environmental Legal Perspective 

(by Christopher B. (Kip) Power)

In a decision with potential ramifications for challengers of many different types of environmental permits and approvals, the U.S. District Court for the Southern District of West Virginia (the “Court”) recently dismissed a lawsuit filed by the Sanitary Board of the City of Charleston (the “CSB”) seeking to overturn a decision of the Environmental Protection Agency (EPA) regarding the permissible concentrations of copper in discharges from the CSB’s wastewater treatment plant to the Kanawha River. Sanitary Board of the City of Charleston, West Virginia v. Scott Pruitt, et al., Civil Action No. 2:16-cv-03060 (March 29, 2018 Memorandum Opinion and Order) (Goodwin, J.). After two years of litigation (and more than four years of administrative proceedings prior to that), the Court determined that the decision of the West Virginia Department of Environmental Protection (WVDEP) to omit any limit on discharges of copper in the CSB’s most recent National Pollutant Discharge Elimination System (NPDES) permit rendered the CSB’s challenge to EPA’s action “either hypothetical or [lacking in] imminence.” As a result, the Court ruled there was no longer a justiciable “case or controversy” between the parties, depriving it of subject matter jurisdiction over the dispute.

The case centered on the WVDEP’s promulgation of statewide limits on allowable levels of copper in streams, acting pursuant to its delegated authority under the federal Clean Water Act (CWA). Using the general formula provided in its rules, the WVDEP translated these in-stream standards into specific effluent limits for copper when it issued a NPDES permit to the CSB in 2012. Recognizing that it could not operate in compliance with the assigned copper effluent limits, the CSB developed the necessary factual information and scientific rationale to support development of an alternative, facility-specific water quality standard (using a procedure known as a “water effects ratio” analysis) that would have allowed it to discharge copper in concentrations approximately five times higher than EPA’s nationally recommended criteria without harming the aquatic life the standard is designed to protect. …