Articles, Alerts & Perspectives

The PIOGA Press

(by Kevin Garber, Jean Mosites and Esther Mignanelli)

In a case of first impression, the Pennsylvania Supreme Court rejected the Department of Environmental Protection’s untested legal theory that penalty liability under the Clean Streams Law continues as long as any constituents of a release remain in waters of the Commonwealth—days, months and years after the release has been stopped.

On March 28, the Supreme Court held “[t]he mere presence of a contaminant in a water of the Common – wealth or a part thereof does not establish a violation of Section 301, 307, or 401 of the Clean Streams Law, since movement of a contaminant into water is a predicate to violations.” EQT Prod. Co. v. Com., Dep’t of Envtl. Prot., 6 MAP 2017, slip op. at *37 (Pa. Mar. 28, 2018) (emphasis in original). In other words, a violation of these sections of the Clean Streams Law is based on the initial entry of pollutants into waters of the Commonwealth, not the presence or movement of constituents within such waters.

The Supreme Court’s opinion provides necessary clarification concerning the scope of liability for penal – ties under the Clean Streams Law for all persons, entities, businesses and industries that are responsible for remediation, those who would redevelop brownfield properties for reuse under Act 2, as well as any property owner with an historic contamination in groundwater that it did not cause. The decision reaffirms that penalty liability is distinct from cleanup liability and recognizes that penalties are neither appropriate nor effective in altering the time that may be necessary for full remediation.

The parallel proceedings between EQT and the department
The court’s statutory construction stemmed from a controversy between EQT Production Company and DEP regarding the liability and penalties that could be imposed for  a release from an onsite pit at a Marcellus Shale well pad in Tioga County in 2012. …

The PIOGA Press 

(by Jean M. Mosites and Abigail F. Jones)

On June 28, 2016, the U.S. Environmental Protection Agency (EPA) published a rule entitled “Effluent Limitation Guidelines and Standards for the Oil and Gas Extraction Point Source Category,” which prohibits the discharge of unconventional wastewater to publicly owned treatment works (POTWs). The rule went into effect on August 29, 2016.

The prohibition, now codified in 40 C.F.R. §§ 435.33 and 435.34, applies to “wastewater pollutants associated with production, field exploration, drilling, well completion or well treatment for unconventional oil and gas extraction.” The phrase “unconventional oil and gas extraction” (UOG) is defined in the rule to mean oil and natural gas produced from “a shale and/or tight formation (including, but not limited to, shale gas, shale oil, tight gas, tight oil).”

Subsequently, the rule was challenged in court and has been remanded to EPA for review and possible revision. The legal challenge to the rule, described in detail below, relates to its applicability to Pennsylvania-defined “conventional” oil and gas operators. However, EPA’s administrative review of the rule could affect oil and gas wastewater disposal options for both conventional and unconventional operators in Pennsylvania.

Implementation deadline extension

In the preamble to the publication of the final rule, EPA stated that no operators subject to the rule were currently discharging to POTWs. Based on this understanding, the rule was to go into effect within 60 days of publication. Following promulgation of the rule, EPA received letters indicating that there were facilities likely discharging UOG wastewater to POTWs in Pennsylvania. As a result, EPA issued a final rule on December 7, 2016, to extend the implementation deadline for existing sources that were lawfully discharging wastewater to POTWs between April 17, 2015, and June 28, 2016. …

Pittsburgh Post-Gazette

(by Patricia Sheridan)

The atmosphere was festive, the participants enthusiastic and the sun was shinning Sunday for the second annual UNcathlon at the Oval Sportsplex in Schenley Park.

The competitive event for athletes with intellectual disabilities supports and is presented by the Special Olympics of Pennsylvania.

For the full article, click here.

The Legal Intelligencer

(by Blaine Lucas and Alyssa Golfieri)

Preservation of the commonwealth’s historically significant natural, scenic, cultural, and architectural features and resources is a rising priority among local municipalities—and for good reason. Historic preservation not only helps cultivate an aesthetically pleasing environment for residents and business owners to live, work, and play, but it can increase property values, generate new tourism/economic development opportunities, and encourage future development with high-quality site design and architectural patterns. Municipalities are vested with several options when it comes to historic preservation. The two most common are the utilization of their authority under the Pennsylvania Historic District Act, 53 P.S. Section 8001 et seq., (Historic District Act) and the Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq., (MPC).

The Historic District Act was enacted in 1961 and confers upon counties, third class cities—First and second class cities (i.e., Philadelphia and Pittsburgh) are expressly excluded from the Historic District Act’s grant of authority—boroughs, incorporated towns, and townships the authority to designate historic districts within their geographical limits. In order to create a historic district, a municipality must do two things. First, it must adopt an ordinance. While the Historic District Act does not command in great detail what content or subject matters the ordinance must cover, it should, at a minimum, express the municipality’s intent to create a historic district pursuant to the Historic District Act, delineate the historic district’s boundaries, establish a historical architectural review board (HARB), enumerate the powers and duties of the HARB, and set forth guidelines and the approval process applicable to the issuance of a certificate of appropriateness (COA). Next, the municipality must provide the Pennsylvania Historical and Museum Commission written notice of the ordinance’s enactment.  …

The American Oil & Gas Reporter

(by Kevin Garber, Blaine Lucas, Keith J. Coyle, and Jay Hammond)

PITTSBURGH, PA.–Driven by demand growth in the industrial and electric generation sectors as well as expanding pipeline and liquefied natural gas export volumes, U.S. natural gas consumption is expected to reach record levels this year. However, production also is forecast to soar to new heights, partly as a result of increasing associated gas production in tight oil resource plays.

According to U.S. Energy Information Administration projections, dry natural gas production will increase by 6.7 billion cubic feet a day in 2018, outpacing estimated year over-year demand growth. Expecting surging supplies to likely translate into relatively low dry natural gas prices for some time, Appalachian Basin natural gas producers continue to work to reduce costs and improve efficiency, while taking advantage of attractive opportunities.

From a business perspective, oil field services remain a primary point of focus for Marcellus and Utica operators in their efforts to reduce costs and improve efficiency, with service providers delivering innovative products to make more productive wells at a lower cost per unit of production. Furthermore, shale gas producers remain focused on consolidating their activities geographically, including selling noncore assets to smaller (often largely debt-financed) operators looking for particular assets less attractive to larger operators (including shallow oil and, in certain circumstances, liquids from shale).

Consolidation continues apace in the shallow conventional natural gas production industry as well. Apart from joint ventures, acreage swaps and other traditional transactions, shale gas producers in the Appalachian region also are pursuing more novel operational strategies to reduce costs and increase profits despite relatively steady natural gas prices. …

PA Business Central 

Family leave, sexual harassment, sexual orientation discrimination, overtime salary threshold and duties tests, employer health care insurance and related tax reporting requirements, mandatory drug testing, executive compensation, disability benefits claims procedure, contraceptive coverage, legal marijuana use, the proper classification of workers as independent contractors or employees, salaried or hourly, paid or unpaid interns: all are among the labor and employment issues that employers have long been grappling with.

Discrimination based on sexual orientation and gender identity

The latest change in employment law came on March 7 when The Sixth Circuit Court of Appeals in Cincinnati, Ohio, which covers Kentucky, Michigan, Ohio and Tennessee, held that discrimination against transgender/LBGTQ employees is discrimination based on sex, and therefore, it violates Title VII of the Civil Rights Act of 1964. The court held the opinion in the case EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. of Detroit, Michigan.

When the plaintiff, Aimee Stephens, began working as a funeral director, he presented himself as a male and was named Anthony Stephens. Stephens was fired after she informed the funeral home that she would no longer be presenting as a male but would transition and dress as a female. The funeral home argued that Stephens’ continued employment would negatively impact its business clients, and the change in sexual orientation violated the Christian values of the funeral home’s owner. The three-judge panel concluded that the funeral home could not use the Religious Freedom Restoration Act to justify such discrimination, and decided in favor of Stephens.

Two weeks earlier, in a 10-3 decision, the Second Circuit Court of Appeals in NYC, whose territory covers Connecticut, New York and Vermont, ruled that Title VII of the Civil Rights Act of 1964 covered sexual orientation discrimination. …

Pipeline & Gas Journal 

(by Keith Coyle)

Having recently filled the two most important political appointments at the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), the Trump administration appears ready to take further action on two rulemaking proceedings that could reshape the nation’s federal safety standards for hazardous liquid and natural gas pipelines.

Howard R. Elliott was recently sworn in as PHMSA’s administrator. Elliot brings more than four decades of experience in the freight rail industry to his new leadership position, including expertise in the areas of hazardous material safety and security.

He previously received the Association of American Railroads (AAR) Holden-Proefrock Award for lifetime achievement for hazardous materials safety, served on AAR’s Risk Management Working Committee and Security Committee, and is a member of the American Society of Industrial Security and the FBI-DHS Domestic Security Alliance Council. Administrator Elliot’s background and experience suggests that he is well-positioned to lead PHMSA, the federal agency responsible for ensuring the safe transportation of energy products by truck, rail, vessel or pipeline.

The same can be said of Elliot’s new deputy, Drue Pearce, who became PHMSA’s newly appointed deputy administrator. Pearce previously served as the federal coordinator for Alaskan Natural Gas Transportation Projects and as an official in the Department of Interior during the George W. Bush administration.

She also served as a member of PHMSA’s Technical Pipeline Safety Standards Committee, the federal advisory committee that reviews PHMSA’s proposed pipeline safety regulations, and as a member of the Alaska House of Representatives and Alaska State Senate. Pearce’s prior public service and familiarity with the pipeline industry leaves her well-prepared to assume a significant role at PHMSA, particularly on pipeline safety matters. …

The Legal Intelligencer

(by John McCreary)

The Tax Cuts and Jobs Act of 2017 inserted a new subsection (q) into Section 162 of the Internal Revenue Code which denies deductions for payments made in settlements of sexual harassment or sexual abuse cases, and “related” attorney fees, when those settlements are subject to a confidentiality agreement: “(q) Payments related to sexual harassment and sexual abuse. No deduction shall be allowed under this chapter for:

• Any settlement or payment related to sexual harassment or sexual abuse if such a settlement or payment is subject to a nondisclosure agreement, or
• Attorney fees related to such a settlement or payment.”

This provision was added by amendment in the Senate and accepted by the House in the final enactment.

The Conference Committee Report (the report) on the amendment does not disclose the rationale for the change, but it is safe to infer that it was inspired by the sordid revelations about widespread sexual harassment that were making headlines when it was passed on Dec. 20, 2017. See, e.g., https://www.ajc.com/news/world/from-weinstein-lauer-timeline-2017-sexual-harassment-scandals/qBKJmUSZRJqgOzeB9yN2JK/ (published on Dec. 19, 2017). The report contains no interpretive guidance on the meaning of “related to” as used in the statute, nor does it define what is meant by a “nondisclosure agreement.” The report simply notes that while Section 162 generally allows for the deduction of “ordinary and necessary” business expenses, various subsections disallow deductions for certain payments, such as portions of damages awarded under antitrust laws, illegal bribes or kickbacks, and criminal fines. In reaction to the headlines Congress has concluded that confidential payments resolving sexual harassment claims can no longer be considered “ordinary and necessary.”

As with many efforts by Congress to provide quick fixes to perceived problems, the unintended consequences of this quick fix will likely create more uncertainty and controversy than will be resolved. …

Trends

(by Gary Steinbauer)

On February 1, 2018, the U.S. Court of Appeals for the Ninth Circuit Court in Hawai’i Wildlife Fund v. County of Maui, No. 15-17447 (9th Cir.), held that the Clean Water Act (CWA or Act) regulates point source discharges that travel indirectly through groundwater to a jurisdictional surface water—that is, a navigable “water of the United States.” Maui is the first federal appellate court decision in a recent wave of citizen suits by environmental groups relying on the so-called “groundwater conduit” theory of CWA liability. The Fourth Circuit and Sixth Circuit are poised to weigh in next and, in the wake of the Maui decision, the U.S. Environmental Protection Agency (EPA) opened a 90-day public comment period on whether it should clarify or revise its own past statements on the theory and whether it is consistent with the text, structure, and purposes of the CWA. 83 Fed. Reg. 7126 (Feb. 20, 2018).

Ninth Circuit requires National Pollutant Discharge Elimination System permit for underground injection of wastewater

In Maui, environmental groups sued the county alleging that it violated the CWA when treated sanitary effluent it injected into four permitted underground injection wells traveled some distance through groundwater to the Pacific Ocean. The results of a tracer dye test performed by EPA, as well as other federal and state agencies, showed that 84 days after the dye was injected into two of the county’s four wells, the dye emerged from submarine seeps along the ocean floor a half-mile away. The county’s treated sanitary wastewater reportedly represented one out of every seven gallons of groundwater that entered the ocean near the wastewater treatment plant. …