LEGAL UPDATE: Proposal to amend PA Dormant Oil and Gas Act would benefit both landowners and drillers

By: Jennifer L. Beresky, Esq.

On January 21, 2015, House Bill 67 was referred to the Environmental Resources and Energy Committee of the Pennsylvania House of Representatives. House Bill 67 would amend Pennsylvania’s Dormant Oil and Gas Act of 2006 to define when an oil and gas estate may be deemed abandoned.

As of now, the actions operators and surface owners can take under the Dormant Oil and Gas Act are limited. Interested parties may petition a court to have a trust declared in favor of unknown oil and gas owners, into which royalties from any operations must be paid. But, with the passage of House Bill 67, landowners would be able to have the oil and gas interest underlying their properties reunited with the surface estate. Specifically, under this bill, an oil and gas interest may be deemed abandoned if 20 years passes “after the last sale, lease, mortgage or transfer of record of the interest,” or, if 20 years passes since the last drilling permit or actual production related to the interest or to a lease covering the interest, or since its use in underground gas storage operations.

Much like Ohio’s Dormant Minerals Act (ODMA), House Bill 67 would provide predictability for operators. Being able to know under what circumstances historically reserved oil and gas interests could be abandoned would make leasing property much less arduous. Rather than having to track down heirs of parties who reserved an oil and gas interest, sometimes generations ago, drillers could complete the simpler research of discovering whether operations or transactions related to the oil and gas interest have occurred within the 20 year statutory period.

Opponents of House Bill 67 raise the concern that it deprives oil and gas interest owners of their property, but the bill includes requirements for anyone claiming abandonment of an oil and gas estate to provide notice, and non-surface oil and gas owners have the opportunity to file claims to preserve their interests.

House Bill 67 has bi-partisan support, largely due to the benefits it would offer to landowners. And for the predictability it would also provide to operating companies, industry players should be eagerly anticipating a vote on this bill. Please continue to check the Burns White Energy Group’s LinkedIn site for further updates regarding House Bill 67.

Philadelphia-area healthcare litigators obtain favorable outcomes in four consecutive cases

Philadelphia-area litigators from the Burns White Healthcare and Long-Term Care Group obtained favorable outcomes in their last four consecutive cases venued in Philadelphia County.

Most recently, Member Stuart T. O’Neal, III and Associate Sasha E. Miller secured a dismissal for an acute care hospital in a breach of standard of care case. The plaintiff, a patient who received treatment at the facility, alleged that our client failed to identify her as a fall risk and prevent her alleged injuries. Through the aggressive pursuit of discovery, Mr. O’Neal and Ms. Miller were able to show that the plaintiff failed to respond to any discovery requests and file a verification with the complaint. Prior to granting the dismissal, the court precluded the plaintiff from testifying about the information requested in our discovery requests.

In November, Mr. O’Neal and Associate Anne Schmidt Frankel obtained a complete defense verdict after a two-week trial before the Honorable Marlene Lachman for an acute care hospital client involving allegations of a delay in intubation for a patient with angioedema, swelling of the neck, mouth and airway, secondary to prescription ACE inhibitors. The plaintiff’s claims included claims of corporate negligence regarding emergency room coverage and specialty consultation availability for an airway emergency. The jury verdict was unanimous.

Earlier in 2014, Mr. O’Neal and Ms. Frankel received a summary judgment for a nonprofit client that provides residential, therapeutic, educational, vocational and social programs for individuals with intellectual and developmental disabilities. Their motion for summary judgment requested dismissal on the basis that the plaintiff failed to sustain their burden of proof of gross negligence, a required threshold in cases against facilities like our client covered by the Mental Health and Mental Retardation Act and the Mental Health Protections Act. Mr. O’Neal and Ms. Frankel further asserted that the plaintiff failed to produce expert reports to support their theories of negligence and causation. The matter is currently being appealed by the plaintiff.

Finally, Mr. O’Neal and Ms. Schmidt obtained a dismissal for a drug and alcohol rehabilitation facility client. Through aggressive investigation and discovery motions, they were able to determine and confirm that the plaintiff had died before the filing of the lawsuit. Mr. O’Neal and Ms. Frankel obtained an order on their motion for sanctions precluding the plaintiff from offering certain evidence in support of the case. They also established that there was no proper party to the suit, as the plaintiff was deceased and her counsel did not seek to timely find a substitute for her estate.

Note: The results obtained in a particular case are heavily dependent on the facts and the law specific to that case.

Energy litigators secure a summary judgment for a natural gas producing client in a lease royalty dispute

Energy Group Co-Chair and Member Jeffrey D. Roberts and Associate Cressinda D. Schlag received a summary judgment for a large natural gas producing client in a lease dispute involving the distribution of royalties in Greene County, Pa. The land involved in the dispute was initially part of a lease that was entered into by a husband and wife in 1928. Their estate was eventually subdivided between three parties with the latest modification to the lease occurring in 2009. The plaintiffs, a married couple who owned the majority of the surface estates and oil and gas rights in the lease, disputed the allocation of royalties in regard to one of the individuals in the lease in 2010. In accordance with the lease, our client ceased making payments to that individual and placed the disputed funds into suspense. The plaintiffs then sued, alleging that our client withheld royalty payments that belonged to them.

Burns White argued that the subdivision of royalties and suspension of funds were in accordance with the terms found in the modified lease that was signed by all parties involved. The court agreed and granted summary judgment, noting that no additional interpretation of the lease was required.

Note: The results obtained in a particular case are heavily dependent on the facts and the law specific to that case.

GROUP BLOG: Must employees disclose their religion to their employers? It depends: Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc.

Later this month, Abercrombie & Fitch, the brand made for the “popular kids”, will have its chance to argue that without explicit notification from the employee or applicant that a religious accommodation is required, there can be no liability under Title VII for a hiring decision based on the clothes worn by the applicant, even if worn for religious observance and practice. Click here to read Sasha E. Miller’s take on how the decision made in this case may impact employers.

Burns White hires seasoned trial attorney as Of Counsel in Pittsburgh

PITTSBURGH, Jan. 26, 2015 — Burns White LLC hired seasoned trial attorney C. Leon Sherman as Of Counsel to its Pittsburgh office.

With more than 40 years of experience, Mr. Sherman has successfully managed a wide range of construction, products liability, insurance coverage and business matters in state and federal courts throughout Pennsylvania, bringing more than 120 jury trials to verdict. He has represented clients in litigation in many state and federal courts throughout the United States. In addition, Mr. Sherman is a federal court-qualified mediator well versed in alternative forms of dispute resolution.

He received both degrees — a J.D. and B.A. in English — from the University of Pittsburgh.

GROUP BLOG: The EEOC’s mandatory duty to conciliate discrimination claims under question in EEOC v. Mach Mining

On Jan. 13, the Supreme Court heard arguments in EEOC v. Mach Mining, a case that could tame, what some employer groups have called, the agency’s aggressive litigation posture in certain high-profile cases.

Presented before the high court is the question of “whether and to what extent a court may enforce the EEOC’s mandatory duty to conciliate discrimination claims before filing suit.” Click here to read Associate Joshua A. Brand’s take on the case and its possible impact on employers.

ATTORNEY BLOG: OSHA may be expanding its recordkeeping requirements to match its five-year retention policy

By: Cressinda “Chris” D. Schlag, Esq.

During the first week of December, OSHA held a meeting with the Advisory Committee on Construction Safety and Health (ACCSH). The committee, which is comprised of representatives for employers, employees, and both federal and state public representatives, provides advice and assistance to OSHA on current and proposed construction standards. One primary focus during the ACCSH meeting was OSHA’s consideration of a proposed rule amending the current recordkeeping regulations to clarify that an employer’s duty to make and maintain accurate records of work-related injuries and illnesses is an “on-going obligation” during the statutory established five year retention policy.

OSHA’s plan to clarify the standard is in direct response to the United States Court of Appeals for the District of Columbia’s decision in AKM LLC v. Secretary of Labor (AKM), whereby the District Court held that a violation for an employer’s failure to properly record an injury or illness could only be issued within six-months of the day the employer failed to make the initial record. 675 F.3d 752 (D.C. Cir. 2012). By relying on the six-month statute of limitations for the issuance of citations, the Circuit Court specifically rejected the Secretary’s argument that a failure to record an injury or illness was a continuing violation and held that “[n]othing in the statute suggests Congress sought to endow this bureaucracy with the power to hold a discrete record-making violation over employers for years, and then cite the employer long after the opportunity to actually improve the workplace has passed.” In the wake of AKM, OSHA’s ability to cite employers for inaccurate recordkeeping has been limited to only the six-month window from when the employer initially failed to make a record.

OSHA’s consideration of a proposed rule amending current recordkeeping regulations to match its five-year retention policy, if enacted, would open the door for OSHA to cite employers for up to five years after an employer’s failure to record an injury or illness. While OSHA’s proposed amendments would not necessarily create any additional compliance obligations for employers, the extension of time for citing an employer for a violation significantly enhances an employer’s potential liability for recordkeeping errors. At the close of the meeting, the ACCSH made a formal recommendation for OSHA to issue a Notice of Proposed Rule Making for amending current recordkeeping regulations.

As an ongoing obligation for the five-year retention period could substantially increase employers’ liability for recordkeeping compliance, employers should actively watch for OSHA’s Notice of Proposed Rule Making and participate in the notice and comment period.

For more information on the ACCSH meeting, OSHA’s current recordkeeping regulations, or assistance in preparing a comment to the Notice of Proposed Rule Making, contact any member of the Burns White Occupational Safety and Health team.

Burns White welcomes five Associates to offices in Pittsburgh and Wilkes-Barre

PITTSBURGH, Jan. 09, 2015 — Burns White LLC welcomes five associates with practices spanning energy, workers’ compensation, and healthcare and long-term care to its offices in Pittsburgh and Wilkes-Barre, Pa.

Pittsburgh

Energy
Laura R. Griesbach assists oil and gas clients with the drafting of certified title opinions, as well as the preparation of due diligence and curative recommendations to remedy title defects. Prior to joining Burns White, she served as the division order title opinion team lead at a brokerage firm. Ms. Griesbach received both a J.D. and an LL.M. degree in Business and Taxation from Capital University.

Brandon J. Lucki focuses on due diligence review, title curative measures and certified title opinions for clients operating in the coal and oil and gas industries. Prior to joining the firm, Mr. Lucki was an associate at a large regional law firm, where he primarily dealt with the drafting and reviewing of mineral and leasehold title opinions and abstracts in West Virginia, Southwestern Pennsylvania and Eastern Ohio. Mr. Lucki received a J.D. from West Virginia University.

Sean W. Triskett assists clients in the oil and gas industry with due diligence, title curative measures and certified title opinions. Before starting at Burns White, Mr. Triskett was a supervising research attorney at an oil and gas law firm in Canton, Ohio. In this role, he managed a team of research attorneys on a large scale due diligence project in Southeast Ohio for an oil and gas client. Mr. Triskett graduated, magna cum laude, from the Cleveland-Marshall College of Law at Cleveland State University.

Workers’ Compensation
Samuel J. Dalfonso concentrates his practice on the defense of employers and insurance companies in work-related injury claims. Prior to joining Burns White, Mr. Dalfonso was a law clerk at Flaherty & O’Hara PC working with local counsel on multi-state liquor licensing projects. Mr. Dalfonso graduated from the University of Pittsburgh School of Law.

Wilkes-Barre

Healthcare and Long-Term Care and Employment Litigation
Christian W. Francis’s practice has an emphasis on medical malpractice defense, professional liability litigation and employment-related matters. His experience consists of handling personal injury and professional negligence cases, and a wide range of employment issues including employment discrimination, wage, wrongful termination, breach of contract, discrimination and unfair labor practices cases. Mr. Francis earned a J.D. from the University of Pittsburgh School of Law.

ATTORNEY BLOG: Pa. Governor-elect’s policy changes to impact natural gas industry

By: Jennifer L. Beresky, Esq.

In a decisive election this past November, Democrat Tom Wolf defeated sitting Pennsylvania governor and Republican, Tom Corbett, running on a platform of, among other things, changes to the natural gas industry. Wolf will take office January 20, and his policy ideas for this industry, if implemented, would impact operators both prior to and after the point of extraction.

Tom Wolf campaigned on supporting local municipalities’ rights to impose distinct zoning restrictions affecting natural gas drillers. In passing the much debated Act 13 in 2012, the Pennsylvania legislature and Governor Corbett tried to curb local municipalities’ ability to pass ordinances restricting oil and gas drilling. Since Act 13’s enactment, the PA Supreme Court has chipped away at Act 13’s restrictions on localities, notably the uniform land-use rules contained therein, declaring parts of the law unconstitutional. Wolf supports individual municipalities’ authority to pass zoning restrictions and other ordinances that may impact the industry, e.g. where drillers may place well pad sites. For natural gas drillers, compliance may become increasingly difficult if a greater number of communities pass different standards to which they must conform.

Governor-Elect Wolf also favors imposing a 5% severance tax on gas extraction in Pennsylvania. Natural gas industry players should be familiar with a severance tax, as most states where gas drilling is common impose such a tax. However, the structure of severance taxes varies by state. For example, Ohio taxes at a specified rate of $0.03 per 1,000 cubic feet of natural gas extracted, whereas Texas assesses a 7.5% tax based on the market value of the gas. Other states, like Tennessee, base the tax on the actual sale price of the gas. Some states employ a progressive tax that increases if the price of natural gas rises above a certain price-point, rather than taxing at a set percentage rate. It was not clear from Wolf’s campaign what type of tax structure he prefers; deciding that question will be a job for the Pennsylvania legislature.

Whether Tom Wolf’s election will help or hinder natural gas drillers in Pennsylvania is, as of yet, unknown, but it is clear that changes to the industry will be coming down the pipeline soon.

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