Role of NDAs

An NDA is a legally binding contract that requires one or more parties to keep specified information confidential and use it only for defined purposes. In economic development transactions, NDAs often govern the exchange of proprietary business plans and financial projections, site selection criteria and infrastructure requirements, and technical specifications and operational details. These agreements serve a critical purpose: they allow private companies to share sensitive information with the counterparty that is necessary for evaluating incentives, locations, and partnerships without risking competitive harm, while giving public entities a structured framework to manage receipt, handling, and disclosure in alignment with applicable public records laws.

NDAs remain the primary tool to align expectations, narrow the scope of confidential information, and set timelines for disclosure. For public entities, NDAs should align with applicable open-records laws by clearly identifying what information may and may not be disclosed and the timing of such disclosures. Effective NDAs define confidential categories narrowly, establish project-phase triggers for disclosure, and include mechanisms for notice and objection. They also articulate operational commitments, such as access restrictions, secure data rooms, and record-retention coordination, to ensure promises made on paper are performed in practice.

Business Drivers for Confidentiality Requests

Companies seek confidentiality because poorly timed disclosure can distort markets, strain operations, and jeopardize strategic objectives. Competitive site selection processes depend on discretion; early identification of a prospective location can attract competing bidders, trigger land speculation, or otherwise undermine a company’s ability to secure real property and supporting infrastructure on viable terms. Public companies must also manage securities law obligations, including Regulation FD and the handling of material nonpublic information; premature leaks can disrupt planned investor communications, create selective disclosure risks, and complicate board approvals or financing arrangements.

Strategic and operational sensitivities are likewise acute: disclosure of growth strategies, geographic positioning, or potential mergers, acquisitions, and partnerships can invite competitive countermeasures; workforce planning and facility consolidation discussions can unsettle employees, spur attrition, and complicate labor relations. Market and transaction stability can also suffer if vendors and suppliers reprice or adjust terms in anticipation of awards, if speculation inflates acquisition costs, or if counterparties alter behavior based on incomplete signals. Time-limited, carefully scoped confidentiality allows companies to test-fit sites and incentives, validate infrastructure and utility requirements, and coordinate governance and financing without creating external pressures that could distort the business case, while still providing for transparency once milestones are reached.

Core Tension

Public agencies must respond to legitimate transparency interests while stewarding competitive projects that depend on discretion. Broad, open-ended confidentiality promises can be unenforceable or impractical for public bodies, yet insufficient protection can chill investment. The solution is not secrecy by default or disclosure by default; it is calibrated confidentiality keyed to statutory allowances, time-limited to milestones, and supported by disciplined workflows.

National Trends

Across jurisdictions, legislatures are refining what economic development information may be withheld, with greater emphasis on process discipline. Common themes include: (a) defining protected categories tied to competition-sensitive negotiations; (b) time-boxing confidentiality to pre-award or pre-announcement phases; (c) conditioning nondisclosure on documented need and ongoing negotiations; and (d) encouraging proactive public summaries once key milestones occur. This trend rewards agencies that integrate legal review early, standardize labeling for protected materials, and adopt milestone tracking to trigger timely reassessment of confidentiality.

Ohio Focus: HB 184 and the Expansion of R.C. 9.66

Ohio’s HB 184 reflects a shift toward statutory confidentiality for certain economic development records and materials. At a high level, the expanded R.C. 9.66 identifies categories of information associated with active economic development projects that may be treated as confidential during defined phases of negotiation and evaluation. By anchoring confidentiality in statute rather than solely in contract, the law reduces discretion that agencies previously exercised on existing statutory requirement, which now creates some statutory conflict, and on a case-by-case basis, while placing greater weight on compliance with the statutory framework.

Under HB 184, covered information may be required to remain confidential while a project is being actively pursued, negotiated, or evaluated, and until specified milestones occur. This phase-based approach clarifies timing: some materials may be withheld during active negotiations but may become subject to disclosure once a deal is finalized, announced, or otherwise reaches statutory endpoints. The practical effect is to move agencies away from ad-hoc determinations and toward standardized protocols.

Public officials and staff should implement tighter protocols and route potentially covered communications and materials through legal review before external sharing or public release. Because the statute more clearly prescribes confidentiality for defined categories and phases, inadvertent disclosure can create risk, including potential administrative or contractual consequences. While the law does not convert every breach into a criminal matter, unauthorized disclosure can still carry liability exposure and reputational harm; agencies should treat statutory categories and timelines as compliance obligations, not preferences.

Practical Considerations

Agencies and their partners should translate legal requirements into daily practice:

• Training: Engage in specific training of elected and non-elected officials and staff.
• Intake and triage: Identify at the outset whether a proposal or inquiry implicates protected economic development categories and mark the file accordingly and make sure it is not released as public records. Use a standard intake checklist keyed to statutory definitions and project phase.
• Phase mapping: Maintain a simple phase chart for each project (e.g., inquiry, evaluation, negotiation, approval, announcement, post-award) and tie confidentiality status to each phase. Update promptly when milestones are reached.
• Narrow tailoring: Limit confidential treatment to the smallest necessary set of documents and data fields. Over-designation undermines credibility and can complicate records responses.
• Parallel communications: Prepare non-confidential summaries when feasible to facilitate stakeholder engagement without jeopardizing sensitive terms.
• Official action: When undertaking official action that statutorily requires the release or disclosure of information that could be considered confidential, limit such disclosure to only that information which is itself statutorily mandated or required.
• Sunset discipline: Record anticipated sunset or milestone dates for each confidential designation and trigger periodic reviews to release or reclassify materials as phases change.

Ohio-Specific Drafting and Operations Guidance

For public entities in Oho and their private partners working under HB 184 and expanded R.C. 9.66:

• Discussion and communication: For public bodies, utilize options, such as executive session, to conduct meetings and deliberations that incorporate or rely on information or records likely covered by the law.
• Align NDA definitions: Track statutory categories in the definition of “Confidential Information,” using cross-references to the covered economic development materials and phases. Clarify that statutory confidentiality controls in case of conflict and that disclosures mandated by law are permitted.
• Phase-based clauses: Incorporate language tying confidentiality to defined project phases and statutory milestones, with automatic reassessment upon phase change. Include procedures for documenting when a project transitions to public announcement or award.
• Labeling and flags: Require consistent labeling, such as “R.C. 9.66—Economic Development Materials—Phase [X],” on documents and in subject lines. Use standardized metadata tags in document management systems to support records searches and retention.
• Records-request workflow: Establish a dedicated public-records intake path for economic development materials that triggers legal review under R.C. 9.66 before any release. Build in notice to counterparties where permitted and maintain response templates reflecting statutory categories.
• Access controls: Limit access to covered materials to a named team, use role-based permissions, and segregate negotiation drafts and incentive models in restricted repositories. Avoid use of personal devices or unsanctioned channels for project communications.
• Training and playbooks: Provide periodic training for staff on HB 184 and R.C. 9.66, including practical examples, labeling, and escalation points. Publish a short playbook for project managers outlining dos and don’ts during active phases.
• Sunset and milestone tracking: Use a central tracker to record key dates (e.g., negotiation start, board action, announcement) and anticipated confidentiality sunsets. Calendar reminders to reassess designations and prepare public-facing materials at milestone events.
• Counterparty expectations: Include rider language for private companies explaining Ohio’s statutory framework, clarifying that certain information may be confidential only during defined phases, and encouraging submission of segregated, well-labeled materials to facilitate compliance.
• Incident response: Define a brief protocol for suspected unauthorized disclosure, including internal notification, containment steps, and counterparty communication. Document corrective measures to reduce repeat risk.

Key Takeaways

Statutory confidentiality regimes are maturing, and Ohio’s HB 184 expands R.C. 9.66 to more clearly protect certain economic development materials during defined project phases. NDAs should be harmonized with these rules, not used to circumvent them. Success depends on disciplined operations: accurate scoping, clear labels, phase-aware controls, and timely reassessment at milestones. Agencies that operationalize these elements reduce risk, protect negotiations, and maintain public trust.

Confidentiality in economic development is no longer managed by contract terms alone. With laws like Ohio’s HB 184 refining when and how materials may be withheld, public entities should modernize their NDAs and internal controls to reflect statutory phases and categories. A calibrated approach — one that is narrow, time-bound, and procedurally sound — best supports competitive projects and transparent governance.

For questions about NDAs and evolving transparency requirements in your jurisdiction, please contact the author or any attorney in FBT Gibbons’ Public Finance practice group.

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“If something walks like a duck, acts like a duck, and quacks like a duck, it’s a duck.” — Judge Easton’s concurrence

FBT Gibbons attorneys recently secured a precedent-setting victory in the Kentucky Court of Appeals, clarifying that local governments may only adopt local land use regulations for merchant electric generating facilities if they follow properly established planning and zoning frameworks.

In a published opinion, the Kentucky Court of Appeals held that local land-use restrictions on solar development — such as setbacks, screening, height limits, and decommissioning requirements — are planning and zoning regulations that are valid only if adopted in compliance with the mandatory requirements of Kentucky’s zoning enabling statute (KRS Chapter 100).

The case arose from ordinances enacted by Breckinridge County, Kentucky, in 2022 and 2025 to regulate solar energy systems. At the time, the county had not adopted a comprehensive plan or established a planning commission, which are prerequisites to adoption of planning and zoning regulations under Kentucky’s zoning enabling statute. Despite labeling the ordinances as exercises of its home rule authority over commerce and natural resources, the county imposed detailed siting, setback, screening and other requirements on solar projects, including those pending before the Kentucky Siting Board.

FBT Gibbons represented Clover Creek Solar Project and its participating landowners regarding a proposed 100 MW merchant electric generating facility located in Breckinridge County. Clover Creek Solar Project challenged both ordinances as unlawful zoning measures. While the trial court upheld the county’s authority, the Kentucky Court of Appeals reversed.

The appellate court emphasized that Kentucky’s statutory provisions regarding state approval of siting proposals for merchant electric generating facilities, KRS 278.700 et seq., grants primacy to local planning and zoning regulations — but only where a county has properly complied with the zoning requirements to adopt such regulations. Because Breckinridge County had not done so, its ordinances were invalid.

In a unanimous opinion, the Kentucky Court of Appeals further clarified that Kentucky’s home rule statute (KRS 67.083) does not permit counties to bypass zoning requirements by characterizing land-use regulations as measures addressing commerce or conservation. Although home rule powers are broad, they do not allow counties to bypass state statutory requirements for adopting planning and zoning regulations. In a concurring opinion, Judge Easton underscored this point, noting: “To simply say it is not intended to be a zoning ordinance does not make it so.”

Key Takeaway

Counties seeking to impose land-use regulation on solar development projects must do so through formal planning and zoning processes. Attempts to impose land-use restrictions outside that framework are subject to challenge and are invalid under Kentucky’s zoning framework. For more information about how this decision could impact any planned or future projects, contact the authors or any member of FBT Gibbons’ Renewables team.

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The FBT Gibbons deal team was led by Houston Partner Darryl Mazow, with assistance from attorneys Tim Swanson, John Kellogg, and Yasaman Hosseini from the firm’s Denver office, along with Sarah Naseman from its Houston office.

The transaction, announced May 18, 2026, brings two leading better-for-you consumer brands under Trek One’s growing portfolio of offerings in the food and beverage sector, including premium chocolate brand Alter Eco Foods, which it acquired in 2023.

Trek One Capital is a Houston-based private equity firm focused on growth-oriented businesses operating and innovating in the middle market. Its recent acquisition of No Cow and Good Karma Foods is in line with this investment focus.

No Cow is a leading producer of plant-based protein bars, while Good Karma Foods is a leading producer of flaxmilk, a non-dairy, allergen-friendly milk alternative. Both brands are sold nationally through retail and direct-to-consumer channels.

FBT Gibbons’ Business Combinations & Capital Transactions and Private Equity & Venture teams offer decades of experience creating value for investors, private funds, sponsors, management teams, and owners through successfully directing M&A and divestiture transactions, as well as joint ventures and strategic business combinations of all sizes.

About FBT Gibbons

FBT Gibbons LLP is a national law firm focused on serving companies operating and investing in the middle market. With nearly 800 lawyers across 26 offices, the firm is positioned to support clients ranging from large multinationals to mid-sized businesses and growth-oriented startups across the United States. FBT Gibbons provides legal counsel enriched with valuable business and market context, particularly in corporate, litigation, and regulatory matters within the energy, finance, life sciences, and manufacturing sectors. The firm is committed to delivering excellent service to its clients, colleagues, and the communities in which it operates.

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This article examines the fundamentals of letters of credit and the key terms that borrowers and lenders should consider addressing when using letters of credit in financing transactions.

Understanding the Basics

A letter of credit is a bank’s independent promise to pay a beneficiary a predetermined sum of money upon presentation of the applicable letter of credit documents, regardless of what may be happening between counterparties in the larger transaction underlying the need for the letter of credit. For every letter of credit, there are three parties involved: (1) the applicant, (2) the issuing bank, and (3) the beneficiary. The applicant for a letter of credit is typically involved in the underlying commercial transaction the letter of credit will serve to support, and the applicant will be responsible for paying any fees to the issuing bank and reimbursing the issuing bank for any draws on the letter of credit by the beneficiary.

Once a letter of credit application is accepted by the issuing bank, the issuing bank is then responsible for issuing the agreed letter of credit to the beneficiary listed on the application. The beneficiary, who is also typically party to the underlying transaction, will have the right to then draw on the letter of credit so long as the beneficiary satisfies any applicable draw conditions, as we discuss further below. Since the primary focus of this article is on letters of credit in commercial real estate finance transactions, we will refer to the applicant as the “Borrower” and the beneficiary as the “Lender.”

One element that makes letters of credit attractive to Lenders, particularly when they are negotiating financing terms with a Borrower with liquidity concerns, is the “independence principle” fundamental to letters of credit. Under this principle, the issuing bank must honor the letter of credit regardless of the status of the underlying obligation—allowing the Lender to rely on the issuing bank’s creditworthiness rather than the Borrower’s.

The independence principle is further supported by the fact that letters of credit are generally irrevocable by the issuing bank before their stated expiration date, again isolating the issuing bank from the term of the underlying transaction or any increase in risk on the part of the Borrower. Given the independence of the issuing bank from the underlying transaction, this makes letters of credit distinct from commercial guarantees and sureties, which are often issued by affiliates of the Borrower, and it also means there are distinct considerations for the terms that will be negotiated for a letter of credit.

Default Terms

For letters of credit governed by the law of any state in the U.S., Article 5 of the Uniform Commercial Code (UCC) will apply. Like many other UCC provisions, a revised version of Article 5 has been adopted in New York, but other states generally follow Article 5 as proposed by the Uniform Law Commission and American Law Institute. Beyond the UCC, a letter of credit may also incorporate by reference a set of industry rules in place of, or in addition to, the laws of a particular state.

Under Article 5 of the UCC, the duration and transferability of a letter of credit are two of the most important default terms to be aware of and understand. Standby letters of credit, which are the most common type of letter of credit in a financing transaction, have a default term of one year under the UCC, and to the extent that a letter of credit states that it is perpetual, it will have a term of five years. Regarding transferability of a letter of credit, the default under the UCC is to restrict the right of the Lender to transfer the letter of credit, meaning that the Lender may not transfer its right to draw under the letter of credit to another party unless the letter of credit expressly states that it is transferable.

That said, even if a letter of credit is silent on transferability, the default terms under the UCC permit the Lender to assign its right to receive proceeds of a draw to a third party, but in order to perfect the interest of such third party, the issuing bank must expressly consent to such assignment. This assignment does not transfer the right to present documents or demand payment, and the original Lender will remain the party entitled to draw on the credit, but a third party could have a recognizable right to the proceeds coming from the draw as long as the issuing bank consents to the assignment and the letter of credit does not expressly prohibit such an assignment.

If a Lender or Borrower is interested in extending the term of a letter of credit to align with the term of the underlying transaction, to allow for transferability of the letter of credit, or prohibit an assignment of proceeds, legal teams should be prepared to negotiate a departure from the default terms under the UCC and industry rules.

Negotiating for Borrower and Lender Considerations

Below is a brief discussion of some of the most commonly negotiated letter of credit terms, including a deeper discussion of the duration and transferability concepts introduced above.

• Duration: To avoid the default one-year duration imposed by the UCC, many Lenders will incorporate an automatic renewal clause that will cause the letter of credit to automatically renew at the expiration of each one-year term, unless a notice of non-renewal is provided. In addition to automatic renewals, Lenders will often include terms that expressly permit them to draw on the letter of credit upon a notice of non-renewal where there has not been a replacement letter of credit issued.
• Transferability: To avoid the default imposed by the UCC restricting Lenders from assigning their rights under a letter of credit, Lenders will typically require that a letter of credit expressly stipulate that they can freely transfer such letter of credit, that the issuing bank’s consent is not required to authorize the transfer, and that the costs of any transfer be the responsibility of the Borrower.
• Issuing bank: Given that letters of credit are often turned to in order to reallocate a liquidity risk of a Borrower, the loan agreement governing the larger transaction will include specific requirements for the eligibility of the issuing bank. These conditions may include specifying a certain bank to serve as the issuing bank or simply including rating agencies requirements for any bank that will serve as the issuing bank.
• Partial draws: Where a letter of credit serves as a backup guarantee for a Borrower’s obligations, Borrowers and Lenders may have an interest in providing that the Lender may partially draw on the letter of credit, as opposed to a requirement that a draw be for the full amount of the letter of credit.
• Draw conditions: With respect to the conditions that must be met for the issuing bank to issue proceeds of the letter of credit to the Lender, Lenders most often stipulate that letters of credit are drawable solely based on a statement from a Lender that a draw is permitted. On the other hand, Borrowers have an interest in outlining the events that give Lenders the right to draw on the letter of credit. Most commonly, it is negotiated whether the Lender can draw when: (1) the Lender receives a non-renewal notice of the letter of credit; (2) the Lender receives a termination notice for the underlying obligation or notice of an event of default on the underlying obligation; (3) the term of the underlying obligation is set to expire; (4) the issuing bank ceases to be a bank approved by the applicable Lender; (5) the issuing bank fails to issue a replacement for a lost, mutilated, stolen, or destroyed letter of credit; or (6) the issuing bank fails to consent to a transfer by the applicable Lender.
• Presentment and payment timing: To ensure administrative convenience and certainty of receipt and to minimize any timing risk, Lenders may negotiate to provide the specific location for presentment, often requiring presentment at a specific branch or by electronic means. They may also require that the letter of credit provide for prompt payment once the draw conditions have been met. The issuing bank, by contrast, may seek to allow reasonable processing time following a draw on the letter of credit and flexibility in presentment mechanics, including standard business hours and cut-off times to align with the issuing bank’s operational practices.

Taking the Advantage

Letters of credit provide a unique opportunity for Lenders to substitute a reliance on a Borrower’s credibility with a reliance on an issuing bank’s credibility. Further, letters of credit allow Borrowers to soften the risk of unfortunate timing demands when a Lender draws on the letter of credit because the obligation to provide immediate funds is with the issuing bank instead of the Borrower. Given the unique advantages these instruments can provide in commercial real estate financing transactions, it is important to be aware of the terms that will be crucial to negotiate for in order to leverage those advantages and maintain each of the Lender’s and the Borrower’s security in the underlying transaction.

FBT Gibbons has a long history of representing and collaborating with institutional, community and regional banks, as well as a variety of commercial borrowers. We are here to help evaluate when a letter of credit may make sense in a larger financing transaction, and, when needed, we are equipped to advise on the terms that make sense for you. For more information or assistance, contact the authors or any attorneys with the firm’s Commercial Real Estate Finance team.

The Carveout

A legal blog geared toward sophisticated capital market participants, The Carveout provides insight into current trends and developments in commercial real estate finance (CREF)—with a particular focus on non-recourse carveouts and CREF loan platforms including CMBS, debt funds, private capital, REITs, life insurance companies, and other complex sources of capital.

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The post Letters of Credit: Financing Considerations and Terms for Negotiation appeared first on FBT Gibbons.

After the initial decision by the district court in Block v. Canepa, the Sixth Circuit reviewed the decision and sent it back to the district court for further evidentiary proceedings, perhaps making it an attractive ruling for the U.S. Supreme Court to consider. The district court then reconsidered and upheld the restrictions.

In the second-round decision, the district court found that the Ohio laws once again met constitutional muster, but on appeal the Sixth Circuit determined that the local physical presence requirement to obtain a license to direct ship to Ohio consumers was not required to substantially promote public health and safety. Local Ohio retailers are allowed to direct ship wine to Ohio customers with an in-state permit, but out-of-state retailers may not obtain a similar permit. Likewise, the Sixth Circuit determined that the restrictions on transporting wine into Ohio by Ohio consumers, as compared to a larger maximum transportation allowance within the state from Ohio wineries, also did not promote a legitimate public interest.

In response, the Ohio Division of Liquor Control is expected to ask for an en banc review from the Sixth Circuit, and if accepted, the ruling may be clarified as the official position of the Sixth Circuit, teeing it up for consideration by the U. S. Supreme Court. The Sixth Circuit decision is in stark contrast with other rulings by the First, Third, Fourth, Eighth, and Ninth Circuits, which upheld similar prohibitions. The pressure to expand consumer delivery options accelerated during the COVID-19 pandemic, and many states, including Ohio, have expanded their delivery and shipping options to safely meet the demand, while some regulators are trying to hold the line by strictly enforcing the boundaries of the three-tier system.

At the time of the Block v. Canepa decision, there were two separate petitions before the U. S. Supreme Court which, if accepted, could also potentially resolve similar prohibitions in Day vs. Henry and Chicago Wine Company vs. Braun. However, these petitions were both denied on May 18, 2026.

Given the increasing importance of direct shipping in alcohol sales and the demand for this option by consumers, we can expect that the Block v. Canepa decision and the current split of opinions will likely be resolved ultimately by that the Supreme Court. Some commentators have predicted that Block vs. Canepa would strike a deadly blow to the three-tier system for wine retailers in Ohio. However, such a strong reaction may not be merited since the Sixth Circuit allowed that Ohio regulators can still impose a regulatory framework upon direct shipping so long it is not primarily discriminatory in impact.

From the consumer standpoint, direct shipping of wine from out-of-state suppliers is here to stay. Direct shipping cases related to wine, beer, and spirits should be separately analyzed and not generalized across these classes even though the constitutional principles remain the same since state regulators often regulate the distinct classes differently.

For example, Tennessee previously imposed residency requirements upon the receipt of a license to direct ship wine, leading to the Tennessee Wine and Spirits Retailers case. At the same time, Tennessee does not permit any direct shipment of distilled spirits for both in-state and out-of-state shippers, leading to a different result in State of Tennessee v. Bottle Buzz, Inc.

On the other hand, limitations on the direct shipment of beer in Pennsylvania by out-of-state brewers was challenged by Urban Artifact along similar lines as the Ohio and Tennessee wine shipping cases.  The Urban Artifacts case is proceeding to trial in July after concluding discovery, and there are no public reports as to a settlement in the offing.

The bottom line for manufacturers and distributors alike is to evaluate their direct shipping options with care considering the patchwork of state laws and decisions, and to seek legal advice as to the propriety of workaround solutions posed by the industry.   Savvy regulators that want to regulate direct shipping are likely to find creative ways to regulate direct shipping while avoiding a discriminatory impact so as to pass constitutional muster. Meanwhile, given the huge opportunity to expand markets and sales for manufacturers and for retail direct shippers, all eyes are peeled for the next decision related to direct shipping from the Sixth Circuit and beyond.

For more information or assistance complying with the applicable regulations in your operational footprint, contact the author or any attorney with FBT Gibbons’ Consumable Goods team.

The post What to Make of the Sixth Circuit Overturning Ohio’s Out-of-State Wine Retailer Shipping Ban appeared first on FBT Gibbons.

Chambers USA 2026 has recognized FBT Gibbons across 19 practice areas and more than 100 individual lawyer rankings, highlighting the firm’s strength in litigation, finance, energy, real estate, labor and employment, intellectual property, and regulatory matters. Notably, the firm earned a nationwide ranking for Litigation: General Commercial, underscoring the depth of its litigation bench and its ability to handle complex business disputes across jurisdictions.

The rankings include numerous Band 1 practice and individual recognitions across key U.S. markets, reflecting feedback from clients, peers, and industry leaders gathered through Chambers’ in-depth independent research process. The rankings also reflect the breadth of FBT Gibbons’ platform following the firm’s combination and continued expansion across major business markets nationwide.

Chambers USA rankings are based on extensive independent research, including interviews with clients, attorneys, and industry professionals.

Chambers USA Recognized FBT Gibbons Across Key Practices Including:

• Banking & Finance (New Jersey, Ohio, West Virginia)
• Bankruptcy/Restructuring (Ohio, New Jersey)
• Construction (Indiana, New Jersey)
• Corporate M&A (Kentucky, New Jersey)
• Employee Benefits & Executive Compensation (New Jersey)
• Energy & Natural Resources (Pennsylvania)
• Environment (New Jersey, New York, Ohio)
• Environment, Natural Resources & Utilities (Kentucky)
• Healthcare (New Jersey)
• Immigration (Ohio)
• Intellectual Property (Indiana, Kentucky, New Jersey, Ohio)
• Labor & Employment (Indiana, Kentucky, New Jersey, Ohio, Tennessee)
• Life Sciences (New Jersey)
• Litigation: General Commercial (Indiana, Kentucky, New Jersey, Ohio, Texas, Nationwide, West Virginia)
• Litigation: Product Liability (New Jersey)
• Litigation: White-Collar Crime & Government Investigations (New Jersey)
• Public Finance (Indiana, New Jersey, Ohio, West Virginia)
• Real Estate (Indiana, Kentucky, New Jersey, Ohio, West Virginia)
• Tax (Kentucky, New Jersey)

Senior Statesperson Ranking:

• Scott W. Dolson – (Corporate M&A, Kentucky)
• C. Edward Glasscock (Corporate M&A, Kentucky)
• Stephen P. Samuels Environment (Ohio)
• R. James Straus (Corporate M&A, Kentucky)

Star Individual Ranking:

• Lawrence Lustberg (Litigation: White-Collar Crime & Government Investigations, New Jersey)

FBT Gibbons lawyers earning Band 1 rankings include:

• Christine A. Amalfe (Labor & Employment, New Jersey)
• Charles H. Chevalier (Life Sciences, New Jersey)
• Richard S. Cleary (Labor & Employment, Kentucky)
• Amy R. King Condaras (Banking & Finance and Public Finance, West Virginia)
• John D. Draikiwicz (Public Finance, New Jersey)
• David J. Freeman (Environment, New York)
• Scott A. Galano (Public Finance, New Jersey)
• Ronald E. Gold (Bankruptcy/Restructuring, Ohio)
• Craig A. Griffith (Tax, West Virginia)
• Timothy J. Hagerty (Environment, Natural Resources & Utilities: Environment, Kentucky)
• William S. Hatfield (Environment, New Jersey)
• Barry A. Hines (Real Estate, Kentucky)
• Warren J. Hoffmann (Environment, Natural Resources & Utilities: Natural Resources, Kentucky)
• Matthew W. Hoyt (Immigration, Ohio)
• Emmett M. Kelly (Public Finance, Ohio)
• Edward M. King (Bankruptcy/Restructuring, Ohio)
• Scott A. Krapf (Public Finance, Indiana)
• Kim Martin Lewis (Bankruptcy/Restructuring, Ohio)
• Michael J. Lubben (Banking & Finance, New Jersey)
• Ricardo Solano, Jr. (Litigation: White-Collar Crime & Government Investigations, New Jersey)
• Peter J. Torcicollo (Construction, New Jersey)
• Peter J. Ulrich (Tax, New Jersey)
• Donald L. Warner III (Public Finance, Ohio)
• Beau F. Zoeller (Public Finance, Indiana)

FBT Gibbons lawyers honored include:

• Frederick W. Alworth (Litigation: General Commercial, New Jersey)
• John F. Bennett (Intellectual Property, Ohio)
• Kelly Ann Bird (Labor & Employment, New Jersey)
• Jamie Brodsky (Corporate M&A and Real Estate, Kentucky)
• Patricia Kirkwood Burgess (Bankruptcy/Restructuring, Tennessee)
• John I. Cadwallader (Real Estate, Ohio)
• Andrew J. Camelotto (Real Estate, New Jersey)
• Theresa A. Canaday (Litigation: General Commercial, Kentucky)
• Frank T. Cannone (Corporate M&A, New Jersey)
• Kim M. Catullo (Litigation: Product Liability, New Jersey)
• Charles H. Chevalier (Intellectual Property, New Jersey)
• Kevin L. Colosimo (Energy & Natural Resources, Pennsylvania)
• Steven M. Condaras (Real Estate, West Virginia)
• Peter M. Cummins (Litigation: General Commercial, Kentucky)
• David E. De Lorenzi (Intellectual Property, New Jersey)
• Carrie G. Doehrmann (Environment, Indiana)
• Keely C. Downs (Real Estate, Colorado)
• Gregory Dutton (Environment, Natural Resources & Utilities: Utilities, Kentucky)
• Howard D. Geneslaw (Real Estate: Zoning/Land Use, Ohio)
• James A. Giesel (Corporate M&A, Kentucky)
• John W. Gragg (Real Estate, Kentucky)
• Christopher S. Habel (Environment, Ohio)
• Stephen N. Haughey (Environment, Ohio)
• John S. Higgins (Construction, Ohio)
• Douglas J. Janacek (Real Estate: Zoning/Land Use, New Jersey)
• Clayton L. Kuhnell (Intellectual Property, Ohio)
• Eric Lamb (Intellectual Property, Ohio)
• Eric Landen (Real Estate, Ohio)
• Constance R. Lindman (Intellectual Property, Indiana)
• Jonathan S. Liss (Healthcare, New Jersey)
• Lisa Lombardo (Construction, New Jersey)
• John T. Lovett (Labor & Employment, Kentucky)
• Michael Lubben (Corporate M&A, New Jersey)
• Alan K. MacDonald (Corporate M&A, Kentucky)
• John Mairo (Bankruptcy/Restructuring, New Jersey)
• Michael McDonald (Litigation: General Commercial, New Jersey)
• Kevin N. McMurray (Environment, Ohio)
• Susan L. Nardone (Labor & Employment, New Jersey)
• Patrick R. Northam (Environment, Natural Resources & Utilities: Natural Resources and Environment, Natural Resources & Utilities: Utilities, Kentucky)
• Michael J. O’Grady (Banking & Finance, Ohio)
• Camille V. Otero (Environment, New Jersey)
• Nicholas C. Pappas (Litigation: General Commercial and Litigation: Product Liability, Indiana)
• Morgan L. Patterson (Bankruptcy/Restructuring, Delaware)
• Raymond N. Pomeroy (Environment, New York)
• Samantha M. Quimby (Intellectual Property, Ohio)
• Eric M. Robbins (Intellectual Property, Ohio)
• Harlan W. Robins (Real Estate, Ohio)
• Christopher W. Rogers (Energy & Natural Resources, Pennsylvania)
• Kevin C. Schiferl (Litigation: Product Liability, Indiana)
• Kevin T. Shook (Litigation: General Commercial, Ohio)
• Cory J. Skolnick (Litigation: General Commercial, Kentucky)
• Jennifer Phillips Smith (Real Estate: Zoning/Land Use, New Jersey)
• Maggie L. Smith (Litigation: Appellate, Indiana)
• Kristin D. Sostowski (Labor & Employment, New Jersey)
• Christina M. Sprecher (Real Estate, Ohio)
• Alexander G. Staffieri (Corporate M&A, Kentucky)
• Cynthia L. Stewart (Intellectual Property, Kentucky)
• Griffin Terry Sumner (Litigation: General Commercial, Kentucky)
• Timothy M. Swanson (Bankruptcy/Restructuring, Colorado)
• Peter J. Torcicollo (Litigation: General Commercial, New Jersey)
• Jared Tully (Litigation: General Commercial, West Virginia)
• Andrew B. Ulmer (Intellectual Property, Ohio)
• Vance V. VanDrake III (Intellectual Property, Ohio)
• Alicia M. Visse-Kroger (Immigration, Ohio)
• Joseph Ward (Litigation: General Commercial, West Virginia)
• A.J. Webb (Bankruptcy/Restructuring, Ohio)
• Steven M. Wesloh (Environment, Ohio)
• Geoffrey M. White (Real Estate, Kentucky)
• Heather L. Wilson (Labor & Employment, Indiana)
• Stephen P. Withee (Construction, Ohio)

Up and Coming Ranking:

• Jennifer L. Bame (Labor & Employment, Kentucky)
• Jonathan Bont (Litigation: White-Collar Crime & Government Investigations, Indiana)
• Carrie J. Cecil (Banking & Finance and Public Finance, West Virginia)
• Anne M. Collart (Litigation: White-Collar Crime & Government Investigations, New Jersey)
• Alyson N. Hurley (Banking & Finance, Ohio)
• Chris Kim Kahn (Environment, Ohio)

About FBT Gibbons

FBT Gibbons LLP is a national law firm focused on serving companies operating and investing in the middle market. With nearly 800 lawyers across 26 offices, the firm is positioned to support clients ranging from large multinationals to mid-sized businesses and growth-oriented startups across the United States. FBT Gibbons provides legal counsel enriched with valuable business and market context, particularly in corporate, litigation, and regulatory matters within the energy, finance, life sciences, and manufacturing sectors. The firm is committed to delivering excellent service to its clients, colleagues, and the communities in which it operates. To learn more, visit FBTGibbons.com.

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California’s 2025 CEQA reforms aimed to reduce delays for projects tied to statewide priorities, including housing, infrastructure, health care, food access, and advanced manufacturing. For regulated businesses, that shift matters. California needs faster approvals to meet its climate, housing, supply chain, and economic development goals.

But streamlining depends on fit. A statutory exemption works best when it covers projects with predictable and manageable environmental effects. Advanced manufacturing presents a harder problem. The category can include facilities with sharply different operations. A final assembly facility, a battery plant, and a chemical-intensive industrial process may all use advanced technology but present very different risks for air emissions, hazardous materials, water use, fire safety, and nearby communities.

SB 954 responds to that concern. The bill would revise the advanced manufacturing exemption by adding location, emissions, risk, community, labor, and certification standards before a project could qualify. SB 954 has not yet become law; after passing the Senate, it moved to the State Assembly on May 26, 2026, where it was read for the first time and held at the desk. For businesses, the message is clear: CEQA streamlining remains valuable, but exemption strategy now requires a defensible, project-specific record.

The Exemption Problem

CEQA generally requires a lead agency to decide whether a project may cause a significant environmental effect. Depending on the record, the agency may prepare an environmental impact report (EIR), adopt a negative declaration, or adopt a mitigated negative declaration. That process discloses impacts, evaluates mitigation, and creates a record for judicial review.

The 2025 reforms created a statutory CEQA exemption for certain advanced manufacturing facilities on sites zoned exclusively for industrial uses. That statutory structure matters. CEQA’s categorical exemptions, adopted through the CEQA Guidelines, include express exceptions. Most notably, an agency may not use a categorical exemption when unusual circumstances create a reasonable possibility of significant environmental effects. The California Supreme Court confirmed that rule in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086.

A statutory exemption works differently. Unless the Legislature builds conditions into the statute, the CEQA Guidelines’ categorical-exemption exceptions do not provide the same project-specific safety valve. The Legislature may decide that some projects deserve faster treatment. But when an exempt category covers industrial facilities with varied environmental profiles, the statutory conditions must do more screening work. SB 954 seeks to add that precision.

SB 954’s Screen

SB 954 would remove advanced manufacturing from the broader exemption and create a narrower path for qualifying facilities. The bill would limit eligibility to facilities used exclusively for “final tier manufacturing,” which it defines as final assembly, integration, final quality control, or packaging of a completed, market-ready product. It excludes raw material production and intermediate components or subassemblies not sold or distributed as complete end-use products.

That distinction shifts the exemption away from a broad technology label and toward the operational question that drives environmental risk. A facility that assembles a finished product often presents a different risk profile than one that processes raw materials or manufactures chemical or industrial inputs. Whether the final bill draws that line with enough precision remains the central design question.

SB 954 would also add location-based limits. A qualifying project would need to sit on land zoned exclusively for heavy industrial uses as of January 1, 2026. It could not sit within 1,600 feet of a sensitive receptor or within 1,000 feet of a disadvantaged community, including communities identified under Health and Safety Code section 39711, unincorporated communities, and census tracts in the highest 15% of CalEnviroScreen Pollution Burden scores.

The bill would also require emissions and risk screening. A project could not exceed specified thresholds for reactive organic gases, oxides of nitrogen, PM10, PM2.5, methane, oxides of sulfur, or carbon monoxide. It would also need to comply with a qualifying community risk-reduction plan or show that increased cancer risk and noncancer hazards remain below specified levels for receptors within 1,000 feet of the facility fence line. SB 954 also requires zero-emission backup generation and excludes projects on natural and protected lands, including projects that would cause significant adverse impacts to tribal cultural resources unless an enforceable agreement addresses those impacts. and.

Certification Record

SB 954 would require gubernatorial certification. To qualify, a project must satisfy the bill’s eligibility criteria, achieve LEED Gold or better, and show significant improvements over industry standards for energy consumption, water consumption, water quality, PFAS effluent, and air quality.

LEED certification focuses mainly on building performance. It does not, by itself, resolve whether manufacturing operations create process emissions or hazardous-materials concerns. That distinction matters because SB 954 uses certification to decide whether a project may bypass ordinary CEQA review. The certification record must therefore do more than recite design features. It should connect the project’s operations, emissions profile, resource demands, risk controls, and community commitments to the statutory eligibility criteria.

This model differs from the Environmental Leadership Development Project framework first enacted through AB 900 and later amended. That framework allows the governor to certify qualifying projects for expedited CEQA judicial review, but certified projects still proceed through environmental review and final EIR certification. SB 954 would use gubernatorial certification for a different purpose: determining whether an advanced manufacturing project qualifies for an exemption from CEQA review.

SB 954 would also require at least one public hearing before the lead agency decides whether the exemption applies. It would require a community benefits agreement with enforceable commitments for local environmental mitigation, high-road employment standards, job access, and community improvements. Businesses should treat these requirements as a durability measure. A strong exemption record and bona fide community benefits agreement can reduce litigation risk, improve local acceptance, and distinguish lower-impact projects from facilities with greater operating concerns.

What Companies Should Do

Companies should read SB 954 as evidence that industrial exemptions will face closer scrutiny when statutory language does not address project-specific environmental risk.

• First, evaluate exemption eligibility early. Under SB 954’s current structure, threshold review includes heavy-industrial zoning, sensitive-receptor buffers, disadvantaged-community buffers, CalEnviroScreen data, emissions thresholds, community-risk criteria, tribal cultural resources, protected lands, and backup power.
• Second, build a record even when no EIR is required. Statutory exemptions reduce process. They do not eliminate the need to prove that the project fits the exemption. A thin record may save time at the front end and create risk at the back end.
• Third, treat community engagement as part of the entitlement strategy. CEQA exemptions narrow formal review, but public concern often remains. For industrial projects, opposition may shift to hearings, political advocacy, media scrutiny, and litigation over exemption eligibility.

SB 954’s broader lesson is that speed and precision can work together. California needs advanced manufacturing. It also needs a permitting framework that distinguishes final-product assembly from more intensive industrial operations.

For companies planning projects now, durable reliance on streamlining will depend on proof that the project’s environmental profile fits the exemption the Legislature provides. SB 954 therefore tests whether California can make CEQA streamlining work for industrial development without sacrificing the project-specific discipline that makes approvals durable.

If you have specific questions about SB 954, CEQA exemptions, permitting strategy, or how these developments may affect your project, please contact the author or any attorney with FBT Gibbons’ Environmental Practice Group.

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The Supreme Court declined to adopt a bright-line rule requiring transportation workers to cross state lines or interact with interstate vehicles to qualify for the exemption. Although the holding is narrow, this ruling continues the court’s recent trend of broadly interpreting the FAA’s exemption to arbitration agreements. This will allow more employees to challenge their arbitration agreements.

Background

The FAA generally requires courts to enforce arbitration agreements as they would other contracts. Under the FAA, workers who sign arbitration agreements typically must resolve their disputes through private arbitration instead of in court. However, Section 1 of the FAA exempts “contracts of employment” for certain transportation workers who are engaged in interstate commerce.

In Flowers Foods, the Supreme Court focused on what it means to be “engaged in interstate commerce.” Specifically, the court had to decide whether a worker must personally cross state lines, or directly deal with goods or vehicles that cross state lines, to qualify for the exemption.

Brock, a delivery driver, operated exclusively within Colorado. As a franchisee, Brock purchased rights to distribute Flowers Foods’ products within a defined geographic territory solely in Colorado. His job involved picking up baked goods from a local warehouse and delivering them to retail locations in the Denver area. Brock’s routes never took him across state lines, and he never interacted with trucks that crossed state lines. However, the goods he delivered originated from out-of-state bakeries and were transported across state lines before arriving at the Colorado warehouse.

The Supreme Court held that Brock was still “engaged in interstate commerce” even though he never traveled interstate. The court explained the law did not require Brock to personally cross state lines. Instead, it was enough that he took part in the overall process of moving goods across state lines. Essentially, Brock was a part of the larger continuum of the goods flowing through interstate commerce. Brock delivering the goods to their final destinations (or “last leg”) was part of the same interstate journey that began when the goods were produced out of state.

The Supreme Court rejected a bright-line rule requiring transportation workers to engage in interstate transportation, such as driving across state lines or interacting with interstate vehicles, to qualify for the exemption. Instead, the focus is on whether the worker is a “direct, active and necessary part” in completing the continuous process of moving goods interstate — from where they are made to where they are sold.

Practical Implications

Although the Supreme Court’s holding is narrow, the ruling has important implications. First, it continues the Supreme Court’s recent trend of taking an expansive view of the FAA’s transportation exemption. Second, it has the likely effect of allowing more workers to avoid their arbitration commitments and bring their claims in court instead. This could apply to many delivery drivers who work locally but handle goods that come from other states. For example, workers who deliver packages for large national companies may fall under this exemption if they are part of an interstate supply chain.

For businesses, the decision may require revisiting how they use arbitration agreements or how effective they will be. Companies that rely on arbitration agreements with their local delivery drivers can no longer assume those agreements will be enforced. This could have the downstream effect of allowing more class and collective actions to proceed in court rather than through individual arbitrations.

Logistics, Distribution and Transportation Industries

Companies in the logistics, distribution and transportation industries will be primarily impacted by this decision. The origin and destination of the supply chain will now be central in any analysis of whether an arbitration agreement is enforceable. Delivery start and stop points are not necessarily dispositive. Instead, companies should review the transport route of their supply chain to determine which individuals in that chain are more likely to qualify for the exemption. Arbitration agreements still will be enforceable for those employees who are sufficiently removed from interstate transport.

E-Commerce and Digital Retail Platforms

Many e-commerce companies rely heavily on “last-mile” package delivery providers. These individuals transport products from a local warehouse to the end destination. Under the Supreme Court’s ruling, local drivers that engage purely in intrastate commerce may still be considered exempt from enforcement of arbitration agreements if they are sufficiently involved in the continuous movement of the goods through interstate commerce. E-commerce companies should review their supply chains and determine whether their drivers are direct, active and necessary parts of moving goods through interstate commerce.

Bottom Line

The Supreme Court’s ruling confirms that participation in interstate commerce does not depend on geography alone. A worker who helps move goods along their interstate path — whether across state lines or within a single state — may qualify for the FAA’s transportation worker exemption. As a result, many workers involved in the final stage or “last mile” of delivery may retain their right to pursue claims in court, reshaping the legal landscape for arbitration in the transportation and logistics sectors.

For more information about this decision or assistance in determining whether your employees are subject to the FAA’s transportation worker exemption, please contact the authors or any member of FBT Gibbons’ Labor & Employment practice group or Wage & Hour team.

The post When “Interstate Commerce” Does Not Require Interstate Travel: Supreme Court Expands FAA Transportation Worker Exemption to Arbitration Agreements appeared first on FBT Gibbons.

The remaining question is practical: can produced water reuse scale in a meaningful way?

Although interest in reuse continues to grow, large-scale implementation faces substantial technical, economic, infrastructure, and public-confidence challenges. Even as operators expand recycling efforts, disposal remains the dominant management pathway across much of the Southwest.

Produced Water Management Pathways

Disposal by Injection

One of the dominant management pathways for produced water is underground injection, often through saltwater disposal wells. Deep-well injection has long been viewed as an efficient option because it avoids the expense of advanced treatment while providing a practical method for managing enormous fluid volumes.

Department of Energy data published in 2024 noted that produced water is often managed through deep underground injection because of its salts, organics, metals, and other constituents.

Heavy reliance on disposal wells, however, raises additional concerns. Injection can increase subsurface pressure and, in some cases, induce seismicity. In the Permian Basin and elsewhere in Texas, mounting concern surrounding seismic activity has increased regulatory scrutiny and made exclusive reliance on underground disposal less attractive as a long-term basin-wide solution.

Recycling for Hydraulic Fracturing

The most common form of reuse today is internal recycling within oil and gas operations, particularly for hydraulic fracturing.

This pathway is attractive because treatment requirements may be less demanding than for surface discharge or agricultural reuse, and recycled water can often be used close to where it is produced.

Many Permian Basin operators now rely heavily on recycled produced water for completion activities, reducing freshwater demand for new wells.

Even so, recycling for hydraulic fracturing is not a complete solution. Only a portion of total produced water volumes can currently be absorbed by completion demand, leaving substantial volumes that still require disposal or alternative management pathways.

From an operational perspective, recycling represents the clearest example of water-conscious practices already underway. By reusing produced water in completion activities, operators can reduce freshwater demand, lower transportation burdens in some settings, and make greater use of water already generated within the basin.

Advanced Treatment and Beneficial Reuse

A more ambitious pathway involves advanced treatment for use outside the oilfield, including industrial applications, irrigation, dust control, and other non-potable uses.

The Department of Energy has identified possible beneficial uses such as fire control, power generation, washing, and non-edible crop irrigation following characterization and treatment. The Bureau of Land Management’s 2026 produced-water guidance similarly encourages field offices to work with operators to identify reuse opportunities consistent with federal and state requirements.

Legislators have also attempted to incentivize investment in water-reuse technology. On May 13, 2026, Senators Ben Ray Luján and Katie Britt introduced the Advancing Water Reuse Act, the Senate companion to H.R. 2940 in the House of Representatives.

The legislation would provide a 30% Investment Tax Credit for projects installing onsite industrial water-recycling systems or replacing freshwater with recycled water. Operators could potentially use the incentive to offset capital costs associated with produced-water treatment technologies used in drilling, completions, and other industrial processes.

Researchers are also exploring whether produced water may yield valuable critical minerals, particularly lithium. The U.S. Geological Survey Produced Water Database has identified 40 of the 50 critical minerals on the agency’s critical-mineral list in produced-water samples and estimates that large-scale recovery potential exists in some basins.

The Department of Energy’s National Energy Technology Laboratory has similarly emphasized produced water as a potential unconventional resource for critical minerals and materials, including lithium.

Practical Challenges

The barriers to large-scale produced-water reuse remain substantial and help explain why disposal continues to dominate.

Technical Complexity

Produced water is chemically heterogeneous and changes from basin to basin, well to well, and even over the life of a single well. No single treatment method currently addresses all reuse objectives reliably.

As a result, treatment systems often must be tailored to specific operating conditions and intended uses.

Treatment Cost and Energy Demand

Treatment is often more expensive than disposal, particularly where the intended end use requires low salinity or heightened public-health protections.

Thermal processes, membrane systems, advanced oxidation, adsorption, electrochemical methods, and biological treatment technologies all have potential applications, but each presents cost, energy, or operational tradeoffs.

Converting produced-water streams into large-scale water supplies may therefore require substantial energy inputs, reinforcing the broader economic challenge.

Infrastructure and Logistics

Large-scale reuse depends on infrastructure, including pipelines, storage systems, treatment facilities, monitoring equipment, and delivery networks.

Southwest operations often span significant geographic distances, and moving water can be as challenging as treating it. The Department of Energy has suggested that basin-wide treatment infrastructure and shared business models may ultimately be necessary to improve the economics of reuse and resource recovery.

Environmental and Health Uncertainty

Even as treatment technologies improve, important questions remain regarding treatment standards, constituent characterization, and monitoring protocols.

Produced water can contain hundreds of chemical constituents, and some may lack approved analytical methods or complete constituent data. Debate continues regarding treatment reliability, environmental impacts, and protections for soil, crops, surface water, wildlife, and human health where produced water is considered for broader reuse.

Public Acceptance

Because produced water originates within a heavily regulated industrial setting and may contain constituents requiring extensive treatment and monitoring, stakeholder confidence remains critical.

Beneficial reuse proposals will likely depend not only on engineering performance, but also on transparent monitoring, enforceable standards, and demonstrated health protections.

Outlook and Considerations

Produced water is no longer merely an operational management issue. In the Southwest, it has become a strategic issue touching water security, energy production, seismic risk, and resource recovery.

The attraction is obvious. In arid basins such as the Permian, operators bring enormous water volumes to the surface every day in places where freshwater resources are increasingly constrained. Texas more than any other state illustrates both the scale of the opportunity and the magnitude of the challenge.

Still, produced water is not a uniform or one-size-fits-all water source. It remains a highly variable industrial byproduct that often requires complex treatment, significant infrastructure, rigorous monitoring, and regulatory clarity before it can be reused safely outside oilfield operations.

The Southwest may ultimately rely on produced water as one component of a broader response to water scarcity, but it is not yet a universal solution.

Using produced water as a meaningful long-term water-management tool will continue to require significant investment, technological advancement, regulatory development, and legal clarity. Texas will likely remain the primary proving ground because of its production volumes, infrastructure, legal developments, and intensifying water stress.

In that sense, produced water represents both a substantial opportunity and a complicated implementation challenge. It offers a potential supplemental resource in one of the driest and most economically important regions of the country, but only if the transition from byproduct stream to reusable asset is managed with legal precision, scientific caution, and technological realism.

If you have questions about or comments on this article, please contact the authors or any attorney with FBT Gibbons’ Oil, Gas and Minerals team.

Produced Water Series

• Part 1 — Can Produced Water from Energy Production Offset Water Scarcity in the Southwest?

• Part 2 — The Legal Framework for Produced Water: Ownership, Rights, and Regulations

• Part 3 — Reuse in Practice: Produced Water Disposal, Recycling, Treatment, and Commercial Hurdles

The post Reuse in Practice: Produced Water Disposal, Recycling, Treatment, and Commercial Hurdles (Part 3) appeared first on FBT Gibbons.

This matters because the 2022 enactment of House Bill 126 stripped districts of their long-standing ability to appeal valuation decisions to the Board of Tax Appeals (BTA) for property the district neither owns nor leases. Districts hoped the loss of the BTA route would reopen a path to common pleas court under the general appeal statute. The Ohio Supreme Court has now rejected that theory.

The practical bottom line: For property a district does not own or lease, the avenues to challenge an unfavorable board-of-revision valuation decision are now extremely limited.

Statutory Background: How We Got Here

Historically, when a board of education disagreed with a county board of revision’s valuation of property, it had two possible appeal routes: (1) an appeal to the BTA under R.C. 5717.01, available even for property the district did not own; or (2) an appeal directly to a court of common pleas under R.C. 5717.05, but only if the district owned the property at issue.

Effective July 21, 2022, H.B. 126 amended R.C. 5717.01 to eliminate a district’s ability to appeal a board of revision’s valuation decision to the BTA when the district does not own or lease the property in question. As the Ohio Supreme Court noted, the General Assembly again amended R.C. 5717.01 effective September 30, 2025 via H.B. 96, but the property-owner requirement in R.C. 5717.05 was left untouched.

R.C. 2506.01 is the general statute permitting appeals of administrative decisions of political subdivisions to common pleas court. Critically, subsection (C) defines a “final order, adjudication, or decision” to exclude any decision from which an appeal is granted by statute to a “higher administrative authority” with a right to a hearing. The Olentangy Board of Education’s argument hinged on the theory that, once H.B. 126 removed its BTA route, the “higher administrative authority” exclusion no longer applied to it, thereby opening the R.C. 2506.01 path.

What the Court Decided

The Ohio Supreme Court rejected Olentangy’s theory and affirmed the Fifth District Court of Appeals. Its reasoning turned on the type of decision at issue rather than on who is seeking to appeal:

• The exclusion is decision-based, not appellant-based. Because R.C. 5717.01 establishes that a board of revision’s valuation decisions may be appealed to the BTA (a higher administrative authority that holds hearings), those decisions categorically fall outside the definition of an appealable “final…decision” under R.C. 2506.01(C). The fact that Olentangy can no longer use the BTA route with respect to property it does not own is, in the court’s words, “beside the point.”
• R.C. 2506.01 does not establish who may appeal. The statute addresses the types of decisions that may be appealed and when they are final. The court declined to read a grant of standing into the statute.
• R.C. 5717.05 still requires ownership. The direct common pleas route remains available only to a party in whose name the property is listed for taxation, i.e., the owner.
• Prior caselaw did not control. The court distinguished the line of cases Olentangy relied on (Walker, Sutherland-Wagner, Nuspl, Roper, Willoughby Hills), noting none addressed R.C. 2506.01 in the context of a board-of-revision valuation appeal or the specific Chapter 5717 scheme.

Because the threshold finality question was dispositive, the Ohio Supreme Court did not reach the parties’ remaining arguments, including the question of standing.

The Dissent (Justice Brunner)

Justice Brunner dissented, arguing the majority read R.C. 2506.01 on an improper “all-or-nothing” basis. In her view, the “higher administrative authority” exclusion should be assessed against the particular order and the particular appellant — and because H.B. 126 took away Olentangy’s BTA route, the exclusion should no longer bar it from common pleas court. Justice Brunner would have allowed the R.C. 2506.01 appeal to proceed and remanded for the lower court to decide whether Olentangy had standing as a party “adversely affected” by the valuation. Notably, the dissent emphasized the direct, dollar-for-dollar revenue impact valuations have on districts. While the dissent did not carry the day, its reasoning may inform future legislative advocacy.

Ramifications for School Districts

1. No back-door appeal of valuations the district does not own. The practical effect of H.B. 126, as now confirmed, is that districts have lost their primary tool for challenging undervaluation of commercial, industrial, and other third-party property. When a board of revision decides against the district on such property, there is generally no appellate remedy.
2. Revenue exposure is real and concentrated. As the dissent illustrated, valuation outcomes flow directly to district revenue. In the Olentangy parcels, the district received roughly three-quarters of the property tax. Undervaluation of high-value commercial property can mean a meaningful, recurring loss. Districts can no longer rely on the appeal process as a backstop against aggressive owner-side valuation positions.
3. The complaint stage is now the decisive battleground. Because the appellate safety net is largely gone for non-owned property, the district’s case must be won (or preserved) at the board of revision with proper, timely complaints and a fully developed evidentiary record.
4. Jurisdictional traps remain potent. The Olentangy complaints were dismissed at the board level for failing to satisfy R.C. 5715.19(A)(6)(a). Procedural and jurisdictional prerequisites for filing valuation complaints are strict and unforgiving, and with diminished appeal rights, a procedural misstep is now far more likely to be fatal and uncorrectable.
5. Owned/leased property is unaffected. Where the district owns (or, for the BTA route, owns or leases) the property at issue, the traditional appeal routes under R.C. 5717.01 and 5717.05 remain available.

Recommendations for School Districts to Consider

1. Shift resources upstream to the complaint stage. Invest early in identifying under-valued parcels and in building strong, well-supported complaints. With appeal rights curtailed, the board-of-revision hearing is effectively the district’s one meaningful opportunity to be heard.
2. Tighten compliance with R.C. 5715.19 filing requirements. Review your complaint intake, board-authorization, service, and deadline procedures. Confirm complaints are properly authorized and filed within the statutory window, with the required documentation, to avoid jurisdictional dismissals that can no longer be cured on appeal.
3. Develop a robust evidentiary record at the board of revision. Engage appraisers and assemble supporting evidence (sales data, income approaches, comparable transactions) before the hearing rather than treating that record as merely a precursor to appeal.
4. Prioritize by revenue impact. Given finite resources, focus complaint efforts on high-value parcels and recent sales where the potential valuation correction — and the district’s share of the resulting tax — justifies the investment.
5. Preserve appeal rights where the district owns or leases. For property the district owns (or, for BTA appeals, owns or leases), continue to calendar and protect the R.C. 5717.01 and 5717.05 appeal deadlines, which remain intact.
6. Monitor and consider legislative advocacy. The outcome here was driven by statutory text. Districts concerned about lost valuation oversight may wish to coordinate with associations such as OSBA and BASA on potential legislative changes. The dissent’s revenue-impact analysis offers a ready-made framework for that advocacy.
7. Reassess budgeting assumptions. Treasurers and CFOs should revisit revenue forecasts that previously assumed the ability to contest third-party undervaluations, and account for the reduced ability to correct them going forward.

How We Can Help

FBT Gibbons’ Government Services practice group regularly assists districts with challenges to property tax valuations. We are reviewing the implications of this decision for districts across Ohio and are available to assist with auditing your valuation-complaint procedures, strengthening hearing records, and evaluating specific parcels.

Please contact the author or any member of our Government Services practice group to discuss how this decision affects your district’s strategy.

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