Act 13: A “Fractured” Pennsylvania Supreme Court Decision on Pennsylvania’s Oil and Gas Act

Act 13: A “Fractured” Pennsylvania Supreme Court Decision on Pennsylvania’s Oil and Gas Act

 by Jeremy Mercer[1]

I. Introduction and Practical Implications Summarized

While environmental groups, anti-drilling groups, and certain municipalities touted Act 13 as Governor Corbett’s Valentine’s Day present to the oil and gas industry,[2] the Pennsylvania Supreme Court’s December 19, 2013, decision on the validity of portions of Act 13 was an early Christmas present to those environmental groups, anti-drilling groups, and municipalities. More than a year after oral argument, the Pennsylvania Supreme Court issued its decision in the case of Robinson Township v. Commonwealth, deciding part of the future of the revised Oil and Gas Act in Pennsylvania. No. 64 MAP 2012, 2013 Pa. LEXIS 3068 (Pa. Dec. 19, 2013) [an enhanced version of this opinion is available to lexis.com subscribers]; see also 58 Pa. Cons. Stat. §§ 2301-3504. That decision was highly fractured, with three Justices signing onto a 160+ page decision, one Justice concurring in that lengthy decision but writing separately, and two Justices each authoring their own dissents.[3] The outcome:  the Court, among other things, struck down significant portions of the Act, enjoined enforcement of other portions, determined that public officials, municipalities, and an individual doctor have standing to challenge acts of the General Assembly, and remanded the matter to the Commonwealth Court for additional consideration.

The multitude of issues addressed by the Supreme Court in its decision on Act 13 likely will spawn many a law review article, with authors thereof waxing poetically of esoteric legal issues and theorizing about impacts of the decision on other areas of the law. This, however, is not such an article. Instead, the author attempts to provide an overview of the main points of the decision, while highlighting practical implications of the decision on the oil and gas industry. While these implications are discussed in greater detail in the “Practical Implications” section of this paper, they are summarized here:[4]

  • An oil and gas operator, or royalty owner, desiring to challenge a local ordinance as impermissibly restricting or regulating oil and gas development no longer has to spend months before local zoning boards and the trial court but can start the challenge at the Commonwealth Court;
  • A challenger of a local ordinance, claiming the ordinance impermissibly restricts or regulates oil and gas developmental, who prevails on the challenge may be awarded its attorney fees and other reasonable costs incurred in the challenge;
  • A municipality whose ordinance is determined to be improper (either by violating the Municipalities Planning Code or other provisions of the Oil and Gas Act) is ineligible to receive impact fees until the offending ordinance is repealed or amended (or the decision of ordinance impropriety is overturned on appeal);
  • The Pennsylvania Public Utility Commission has the ability to review an allegedly improper municipal ordinance for compliance with the Municipalities Planning Code and other provisions of the Oil and Gas Act and issue a decision, which is appealable to the Commonwealth Court de novo. A decision against the municipality renders the municipality ineligible to receive impact fees until the offending ordinance is repealed or amended or the decision is overturned on appeal;
  • Municipalities may be subject to suit by an oil and gas operator or royalty owner for mismanagement of natural resources within its borders if it does not allow for the prudent development of oil and gas;
  • The Supreme Court remanded a number of issues for further consideration by the Commonwealth Court, including whether other provisions of the Act are not severable and, therefore, should be considered unconstitutional, in addition to those declared unconstitutional by the Court;
  • The Court found that the Delaware Riverkeeper Network and an individual doctor had standing and, by finding the doctor had standing, potentially reinstated the doctor’s appeal of the trade secret protection provisions of Act 13 relating to chemical disclosures; and
  • The Commonwealth filed an application for reconsideration by the Supreme Court, which is under consideration as of this writing.

Further information on these implications is provided below, starting with the portions of the Act held unconstitutional.

II. Portions of the Act Held Unconstitutional

Probably of most significance (or at least of most immediate significance) to the industry, a majority of the Supreme Court struck down two complete Sections and portions of another Section of the Act as being unconstitutional. Specifically, the Court determined that Section 3303 (preempting local ordinances covering oil and gas operations that already are regulated by an existing state or federal environmental act), Section 3304 (setting forth zoning restrictions and requiring uniformity of local ordinances), and portions of Section 3215 (allowing the Department of Environmental Protection to waive certain setback requirements and governing its consideration of comments on well permits) were unconstitutional. Interestingly, though, while a majority of the Justices participating in the decision agreed those Sections were unconstitutional, they could not agree as to why those Sections were unconstitutional. Three Justices (Castille, Todd and McCaffery) opined that the Sections were unconstitutional because they violated the “Environmental Rights Amendment” to the Pennsylvania Constitution (Art. I, Sec. 27). The fourth Justice (Baer) opined that the Sections were unconstitutional because they violated due process rights protected by the Pennsylvania Constitution (Art. I, Sec. 1) [an annotated version of this statute is available to lexis.com subscribers]  .

A. Environmental Rights Amendment (Art. I, Sec. 27)

The so-called Environmental Rights Amendment to the Pennsylvania Constitution, adopted in 1971 and actually entitled “Natural resources and the public estate,” provides as follows: 

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

The plurality opinion devoted approximately 98 pages of its 162 page opinion to the subject of the Environmental Rights Amendment and its application to Act 13. However, in order for any of that discussion to even matter, the plurality had to determine that the Constitutional provision actually conferred rights or obligations on municipalities. On initial reading, this would seem difficult to do given that the “Commonwealth” is declared to be the trustee, empowered with and charged with conserving and maintaining the natural resources. However, the plurality concluded that municipalities are included within the definition of “Commonwealth,” putting municipalities and all other levels of government on the same footing as the Commonwealth when it comes to conserving and maintaining Pennsylvania’s natural resources. How did it do that?  In one four word sentence:

The Commonwealth is named trustee and, notably, duties and powers attendant to the trust are not vested exclusively in any single branch of Pennsylvania’s government. The plain intent of the provision is to permit the checks and balances of government to operate in their usual fashion for the benefit of the people in order to accomplish the purposes of the trust. This includes local government.

Robinson Twp., 2013 Pa. LEXIS 3068, at *139 (emphasis added).

The sole Pennsylvania case cited by Chief Justice Castille for the sweeping inclusion of municipalities within the word “Commonwealth” was a 1982 Pennsylvania Supreme Court case discussing the County Code, the Local Health Administration Law, the Second Class Township Code, and the Solid Waste Management Act to determine whether municipalities had standing to challenge the issuance of a permit for a toxic waste landfill within their borders. Franklin Twp. v. Commw., 452 A.2d 718, 722 & n.7 (Pa. 1982) [enhanced version]. Interestingly, though, Chief Justice Castille failed to look to other portions of the Constitution to determine whether that document distinguishes between the Commonwealth and municipalities. To find that answer, he would have only had to look one section away - Article I, Section 26, which does so distinguish:  “Neither the Commonwealth nor any political subdivision thereof shall deny to any person the enjoyment of any civil right, nor discriminate against any person in the exercise of any civil right.” (emphasis added).[5] Article IX of the Constitution, denominated “Local Government” also provides an answer to that question, specifically using the words “municipalities” and “counties” when dealing with governmental entities that are not at the Commonwealth level. Regardless, the plurality opinion imputed to local governments responsibility and power when it comes to conserving and maintaining Pennsylvania’s natural resources.

Next, the plurality reviewed the existing precedent (from the early to mid-1970s) interpreting and applying the Environmental Rights Amendment and determined that it was lacking. The plurality determined that there were three deficiencies in the existing analytical framework under the Environmental Rights Amendment:  (i) the test described the Commonwealth’s obligations under the constitutional provision in narrower terms than the Constitution; (ii) the test assumed that legislative action must provide for and can constrain judicial relief under the constitutional provision; and (iii) the existing test minimized the obligations of the judicial and executive branches, circumscribing their abilities to carry out their constitutional obligations. See Robinson Twp., 2013 Pa. LEXIS 3068, at *171-72. As such, the plurality concluded that the existing analytical framework was unworkable and not applicable to the type of case before the Court.

Because of these critical difficulties, we conclude that the non-textual Article I, Section 27 test established in Payne and its progeny is inappropriate to determine matters outside the narrowest category of cases, i.e., those cases in which a challenge is premised simply upon an alleged failure to comply with statutory standards enacted to advance Section 27 interests.

Id. at *172. Despite the lack of any relevant articulated test or standard, the plurality concluded that, “this Court has an obligation to vindicate the rights of its citizens where the circumstances require it and in accordance with the plain language of the Constitution.” Id. at *179. But see supra, pp. 3-4, regarding plain language of the Constitution.

Interestingly, though the plurality opinion did not specifically set forth a new framework for the constitutional analysis to be undertaken. Instead, it simply claimed a balancing test was required and proceeded to analyze certain Sections of Act 13 to determine whether the Commonwealth, in enacting those Sections of Act 13, complied with its obligations under Article I, Section 27 to conserve and maintain Pennsylvania’s natural resources. See Robinson Twp., 2013 Pa. LEXIS 3068, at *193 (“According to the citizens, this dispute is not about municipal power, statutory or otherwise, to develop local policy, but it is instead about compliance with constitutional duties. Unless the Declaration of Rights is to have no meaning, the citizens are correct. …  The Commonwealth’s obligations as trustee to conserve and maintain the public natural resources for the benefit of the people, including generations yet to come, create a right in the people to seek to enforce the obligations.”).

Even before it began its Section-by-Section review of those challenged Sections of Act 13, the plurality opinion telegraphed its outcome when it stated, without citation (and contrary to the express terms of the Act), that

Act 13’s primary stated purpose is not to effectuate the constitutional obligation to protect and preserve Pennsylvania’s natural environment. Rather the purpose of the statute is to provide a maximally favorable environment for industry operators to exploit Pennsylvania’s oil and natural gas resources, including those in the Marcellus Shale Formation.

Id. at *197-98 (emphasis added). But see 53 Pa. Cons. Stat. § 3302 (setting out four, equally important purposes of Act 13, including the protection of “natural resources, environmental rights and values secured by the Constitution of Pennsylvania”); Robinson Twp., 2013 Pa. LEXIS 3068, at *180 (noting four purposes of Act 13, as declared by the General Assembly); Id. at *207-08 (“With respect to Act 13, the General Assembly certainly recognized, among other things, its twin constitutional duties to provide for the general welfare and prosperity by ‘permit[ting] optimal development of oil and gas resources of this Commonwealth,’ and for the protection of ‘natural resources, environmental rights and values secured by the Constitution of Pennsylvania.’”) (brackets [sic]). The plurality then concluded, again without any factual or record support, that “development of the natural gas industry in the Commonwealth unquestionably has and will have a lasting, and undeniably detrimental, impact on the quality of these core aspects of Pennsylvania’s environment [surface and ground water, ambient air, and aspects of the natural environment in which the public has an interest], which are part of the public trust.” Robinson Twp., 2013 Pa. LEXIS 3068, at *198; see also id. at *200 (“By any reasonable account, the exploitation of the Marcellus Shale Formation will produce a detrimental effect on the environment, on the people, their children, and future generations, and potentially only the public purse, perhaps rivaling the environmental effects of coal extraction.”).[6]

Given its earlier determination that Article I, Section 27 conferred on municipalities rights and obligations related to Pennsylvania’s natural resources, the plurality had no trouble finding that Section 3303’s preemption provision was unconstitutional.

The Commonwealth, by the General Assembly, declares in Section 3303 that environmental obligations related to the oil and gas industries are of statewide concern and, on that basis, the Commonwealth purports to preempt the regulatory field to the exclusion of all local environmental legislation that might be perceived as affecting oil and gas operations. Act 13 thus commands municipalities to ignore their obligations under Article I, Section 27 and further directs municipalities to take affirmative actions to undo existing protections of the environment in their localities. The police power, broad as it may be, does not encompass such authority to so fundamentally disrupt these expectations respecting the environment. Accordingly, we are constrained to hold that, in enacting this provision of Act 13, the General Assembly transgressed its delegated police powers which, while broad and flexible, are nevertheless limited by constitutional commands, including the Environmental Rights Amendment.

Id. at *205-06.[7]

The plurality then turned to, and found unconstitutional, the provisions of Section 3304 that set forth a uniform zoning statute relative to oil and natural gas development across the Commonwealth. In short, the plurality succinctly determined that “the Act degrades the corpus of the trust.” Id. at *211. Putting some flesh on that skeleton, Chief Justice Castille explained that allowing oil and gas development, an industrial use, in every zoning district “is incapable of conserving or maintaining the constitutionally-protected aspects of the public environment and of a certain quality of life.” Robinson Twp., 2013 Pa. LEXIS 3068, at *209.[8] The plurality went even further, though, and concluded, again without any factual or record support, that given Pennsylvania’s geographic size and differing terrain, “the impact on the quality, quantity, and well-being of our natural resources cannot reasonably be assessed on the basis of a statewide average. Protection of environmental values, in this respect, is a quintessential local issue that must be tailored to local conditions.” Id.[9]

A second constitutional difficulty with Section 3304 was that its uniform approach meant that certain people and areas would bear “heavier environmental and habitability burdens than others.” Id. at *212. According to the plurality, this violated the constitutional provision that the natural resources are to be conserved and maintained for the benefit of “all the people.” Id. Essentially, the plurality took issue with the Act’s requirement that, what the plurality defined as, a heavy industrial use would be required to be permitted in every zoning district, no matter how sensitive the current property use, without any ability of the local governments to weigh in.

Act 13’s blunt approach fails to account for this constitutional command [of treating all beneficiaries equally] at all and, indeed, exacerbates the problem by offering minimal statewide protections while disabling local government from mitigating the impact of oil and gas development at a local level. …  Imposing statewide environmental and habitability standards appropriate for the heaviest of industrial uses in sensitive zoning districts lowers environmental and habitability protections for affected residents and property owners below the existing threshold and permits significant degradation of public natural resources.

Id. at *213-14.[10] To this charge, the plurality found the Commonwealth could not adequately respond, dooming this Section of Act 13 to unconstitutional status.

[T]he Commonwealth fails to respond in any meaningful way to the citizens’ claims that Act 13 falls far short of providing adequate protection to existing environmental and habitability features of neighborhoods in which they have established homes, schools, businesses that produce or sell food and provide healthcare, and other ventures which ensure a quality of human life. In our view, the framers and ratifiers of the Environmental Rights Amendment intended the constitutional provision as a bulwark against enactments, like Act 13, which permit development with such an immediate, disruptive effect upon how Pennsylvanians live their lives. To comply with the constitutional command, the General Assembly must exercise its police powers to foster sustainable development in a manner that respects the reserved rights of the people to clean, healthy, and esthetically-pleasing environment.

Id. at *216.[11]

In a footnote to its discussion of the constitutionality of this Section, the plurality also found Section 3304 to be unconstitutional because it required municipalities to ignore the rights and obligations under the Environmental Rights Amendment which the plurality opinion determined municipalities had. See Robinson Twp., 2013 Pa. LEXIS 3068, at *218 n.58.

The plurality then turned to Section 3215(b) of Act 13 – the provision allowing the Department of Environmental Protection (“DEP”) to waive certain setback requirements in certain situations. As with the prior two Sections, this Section also was found to violate the Environmental Rights Amendment. But, perhaps ironically, this Section was found to violate the Constitutional provision because it did not set across-the-board standards that would be applied in every situation, regardless of the geography in which the waiver was sought. Instead, this Section left it to the DEP to articulate terms and conditions that it deemed necessary, on a case-by-case basis, to protect the waters of the Commonwealth in order to waive the setback; presumably, then, the DEP could impose different conditions on operations depending on what the geographic surroundings were. According to the plurality, this lack of statewide, specific requirements (instead of the site-specific analysis by the DEP) would lead to “arbitrary decision-making with a disparate impact on trust beneficiaries.” Id. at *224.[12]

Another downfall of that Section of the Act, according to the plurality, was that it did not expressly require the DEP to comply with other aspects of Pennsylvania environmental protection law when making its decision on what terms and conditions were necessary to protect the waters of the Commonwealth.[13] Continuing with its dim view of the DEP’s ability to stand up to the pressure of the oil and gas industry when it comes to determining what is “necessary” to protect the waters of the Commonwealth, the plurality opined that Act 13 would allow an oil and gas operator to have leverage over the DEP, “naturally invit[ing] the Department to articulate ‘necessary’ conditions as minimal standards that an applicant would accept without litigation.” Id. at *225.[14]

B. Due Process (Art. I, Sec. 1)[15]

In his concurring opinion, Justice Baer agreed that the three above-referenced provisions of Act 13 were unconstitutional, but for a different reason. Justice Baer believed those provisions were unconstitutional under the due process rights of the Pennsylvania constitution. Id. at *278-79 (Baer, J., concurring). In doing so, though, Justice Baer enshrined in the Constitution zoning at the lowest level of government.: “I believe that in a state as large and diverse as Pennsylvania, meaningful protection of the acknowledged substantive due process right of an adjoining landowner to quiet enjoyment of his real property can only be carried out at the local level.” Id. at *278.[16]

Justice Baer, as he must, recognized that zoning power is given by the Commonwealth to the municipalities by way of the Municipalities Planning Code. Id. at *280-81 (Baer, J., concurring). And recognizing that municipalities are created by the Commonwealth, he also conceded that what the Commonwealth gives the Commonwealth can take away, but, and this is the entire hook on which his concurrence rests, “only when constitutionally permissible.” Id. at *281. And given that Justice Baer, less than a page prior to that, concluded that zoning was “a constitutionally ordained mandate,” the direction of his decision was clear. Id. at *280.

Thus, to Justice Baer, the question became “whether Act 13’s provisions protect the substantive due process rights of Pennsylvania landowners.” Id. at *281. Thus, he undertook the typical review that courts utilize when reviewing the validity of a zoning ordinance – is the restriction on the land use reasonable, does the governmental regulation “bear a reasonable relationship to the health, safety, morals, or general welfare of the community,” and does the “governmental purpose [ ] ‘adequately outweigh’ the private property interest.” Id. at *289 (citations omitted). If the answers to those questions are no, the zoning ordinance (or statute) is constitutionally deficient.

But, a difficulty arose for Justice Baer in applying this standard analysis because “Act 13 is not, in the common sense, a governmental intrusion into private property. Arguably, it expands private property rights by mandating that individual municipalities permit property owners in residentially or agriculturally zoned areas to bring oil and gas operations onto their land.” Id. at *289. The difficulty is that the alleged burden or intrusion imposed by the government here is not so much on the landowner but on the landowner’s neighbor. This, according to Justice Baer, meant that municipalities were being forced to pass zoning ordinances that allowed landowners to violate the alleged constitutionally-devolved maxim sic utere tuo ut alienum non laedas (so use your own property as not to injure your neighbor). Id. at *279, 289-90.[17] Justice Baer then listed some of the activities and operations that Act 13 permitted within residential and agricultural zoning districts (such as well sites, natural gas compressor stations, and natural gas processing plants) and noted the provision of Act 13 allowing the DEP to waive certain setbacks.

This was all too much for Justice Baer to conclude that the due process rights of landowners were being protected by application of a state-wide, “one size fits all” zoning statute, especially given Pennsylvania’s “extreme diversity” – for example “[t]he northwestern and southeastern corners of our state are flat; however, the 745 square miles of Allegheny County are uniformly hill and dale, and the Appalachians, one of the oldest mountain ranges on Earth, run right through the middle of our great Commonwealth.” Id. at *292 (Baer, J., concurring).

For Justice Baer, the constitution does not permit the Commonwealth to replace existing zoning provisions, ostensibly in place to protect the best interests of the health, safety, and character of local communities, given the constitutional underpinnings of the zoning ordinances, even if doing so benefits the economy of the entire Commonwealth.

[O]nce a state authorizes political subdivisions to zone for the “best interests of the health, safety, and character of their communities, … and zoning ordinances are enacted and relied upon by the residents of a community, the state may not alter or invalidate those ordinances, given their constitutional underpinning. This is so even if the state seeks their invalidation with the compelling justification of improving its economic development. …  How can the legislature’s “one size fits all” [zoning] within Act 13 possibly protect the constitutional rights of the landowners of this diverse citizenry and geography?  Zoning provisions “should . . . give consideration to the character of the municipality, the needs of the citizens[,] and the suitabilities and special nature of particular parts of the municipality.”

Id. at *292-93 (emphasis, last ellipsis, and brackets [sic]; citations omitted).[18] Additionally, the “one size fits all” nature of the zoning provision of Act 13, without any recourse by affected landowners or municipalities, struck Justice Baer as the “epitome of arbitrary and discriminatory impact.” Id. at *295;[19] see also id. at  *294 (“Whatever the proffered reason for the benefit of the community may be, it remains unassailable that the hallmark of an unconstitutional zoning ordinance or statute is ‘an arbitrary and discriminatory impact on different landowners.’”) (citation omitted). As such, Justice Baer concluded that Sections 3303, 3304, and 3215(b)(4) of Act 13 did not withstand constitutional scrutiny.

C. Dissents

The two dissenting Justices took the majority to task for their decision, regardless of whether that decision was based upon the Environmental Rights Amendment or due process concerns. Each dissenting Justice concluded that the majority was elevating the rights of the “subject” over the rights of the “sovereign.” Id. at *306 (Saylor, J., dissenting); Id. at *318 (Eakin, J., dissenting).

According to the dissenting Justices, the main downfall with the plurality decision was that it has “redefine[d] the role of municipalities relative to the sovereign.” Id. at *306 (Saylor, J., dissenting) (brackets added); Id. *317-18 (Eakin, J., dissenting) (“I find the lead opinion’s protracted expression, while thoughtful, to be ultimately inconsistent with the basic relationship between sovereign and subject, and insufficiently considerate of discrete judicial and legislative roles.”). The proper role of municipalities vis-à-vis the Commonwealth is straightforward for the dissenting Justices – the Commonwealth is supreme.

As the sovereign, statewide policymaking body, the Legislature occupies the primary fiduciary role, and, by constitutional design supported by longstanding judicial precedent, the authority and responsibilities of municipalities are derivative. …  [N]othing in our Constitution confers upon municipalities a vested entitlement in their delegated authority to manage land use or the right to dictate the manner in which the General Assembly administers the Commonwealth’s fiduciary obligation to the citizenry at large relative to the environment.

Id. at *311 (Saylor, J., dissenting); see also id. at *317 (“To the extent this case is about the hierarchy of municipal power relative to that of the Legislature, I am solidly in the camp supporting sovereign control in furtherance of the interests of the citizenry at large.”); Id. at *318-19 (Eakin, J., dissenting) (“Municipalities certainly have the power to manage land use, but such power is given by the legislature, not the Constitution. The allocation of this power is not irrevocable, and it may be removed or modified by the same body that granted it in the first place. And no municipality has any entitlement to manage land use that is superior to that granted by the Constitution to the sovereign alone. Our municipalities are part of our political structure, and certainly have great interest in the use of land within their borders, but their professed power must bow to the Constitution.”).

Justice Saylor also criticized the plurality for essentially making an argument regarding the Environmental Rights Amendment for the challengers. “[A]fter offering some apologia on Cross-Appellants’ behalf relative to the limited scope of their contentions, … the lead Justices embark on their own course to reach broad-scale pronouncements that the General Assembly has implemented ‘blanket accommodation[s] of industry and development’ … and ‘swept aside’ the Environmental Rights Amendment.’” Id. at *302 (Saylor, J., dissenting) (citations omitted; first brackets added). Given the limited role that the judiciary is to play in weighing policy decisions and the seriousness of constitutional review, which includes a presumption of constitutional validity, the “Court’s review in this case should be strictly confined to the Cross-Appellants’ actual arguments relative to Article 1, Section 27 of the Pennsylvania Constitution.” Id. at *304.

Justice Eakin was even more blunt in his critique of the majority for usurping the role of the legislature in making policy decisions for the Commonwealth.

The legislature has determined that our unique shale resource can benefit all citizens; indeed the resource has already resurrected many local economies, though not without cost. The challenge is one of balancing the competing interests of local and individual economic prosperity, national need for energy and desire for independence from foreign energy, and the unavoidable environmental impact of taking and using any resource from the ground. It is for the legislature to balance these competing interests and rights of the citizenry as a whole, for it is not merely a question of local consequence – indeed, the constitutional provision on which this action relies speaks to resources as “the common property of all the people,” not as property of the people currently living in each municipality. …  The balancing is far, far from a simple task by any measure, and it cannot be accomplished by giving 2,500 vetoes to local governments.

Id. at *319-20 (Eakin, J., dissenting) (citation omitted). Justice Saylor also took the plurality to task for ignoring, or giving “scant attention” to the environmental restrictions and regulations imposed by Act 13 and other existing environmental protection laws, such as the Clean Streams Law. Id. at *306 (Saylor, J., dissenting).[20]

Justice Saylor eloquently captured the essence of Act 13 when he summarized that “[f]or policy reasons well outside this Court’s purview, and in conjunction with the Legislature’s power to regulate and control natural resources, the Assembly has decided to supersede some of the duties and responsibilities municipalities previously have exercised in relation to land-use planning and the environment.” Id. at *305. Recognizing the difficulties that the oil and gas industry have dealt with prior to Act 13 and the need for consistency in order to develop a play that is larger than simply one municipality, Justice Saylor put into words the frustrations of the pre-Act 13 system that the General Assembly sought to remedy.

The reasons informing the legislative judgment include alleviations of the hurdles to the development of an efficient and cost-effective system of harvesting oil and gas resources posed by a fluid patchwork of restrictions differing from municipality to municipality, particularly where each of the thousands of local government units can erect – as some have erected – barriers to development and supporting infrastructure within their borders.

Id. at *305 n.1.[21] However, that appears to be where the industry again finds itself.

According to both dissents, if the Court limited its role to one of strict constitutional review, instead of reweighing policy decisions, Act 13 withstands constitutional challenge.

D. Non-Severable Sections Enjoined

In addition to enjoining the Sections of Act 13 found to be unconstitutional, the majority also enjoined several Sections of Act 13 that it determined could not be severed from those unconstitutional provisions, some in total and some only partially.

Specifically, in dealing with Section 3215, the Section that provided the DEP with authority to waive certain setbacks, the majority determined that the rest of subsection (b) was too closely intertwined with subsection (b)(4), resulting in the rest of subsection (b) (setbacks from waters of the Commonwealth) being enjoined in its entirety. While subsection (b)(4) allowed the DEP to waive those setbacks or restrictions in certain situations, the majority, noting that the challengers did not challenge the rest of subsection (b) on appeal, summarily concluded that “[i]t would appear that the General Assembly did not intend for the setback provision to operate without allowing industry operators to secure waivers from the setbacks.” Id. at *271 (plurality opinion).[22]

Other Sections of Act 13 also were enjoined but, and this is important, only to the extent those Sections enforced or implemented Sections of Act 13 the majority already found to be unenforceable. Sections 3305 through 3309 of Act 13 serve multiple purposes, including enforcement of restrictions within the Municipalities Planning Code, enforcing the Oil and Gas Act (non-enjoined parts of Act 13), and enforcing compliance with provisions of Act 13 that the majority enjoined. Id. at *272. While not enjoining those Sections in their entirety, the majority enjoined those Sections “[t]o the extent that [they] implement or enforce provisions we hold invalid.” Id.[23] This distinction is quite important as it relates to options the industry now has to guard against excessive municipal regulation. See Practical Implications, infra, Part II.E.

The majority also appears to have enjoined Sections 3215(c), relating to consideration of impact on public resources in well permitting, and 3215(e), relating to conditions in well permits to protect public resources, although the extent to which these two sections are enjoined is unclear. A reasoned view, though, is that those subsections are enjoined only so far as they enforce Sections of Act 13 found to be invalid.[24]

E. Practical Implications

Practically speaking, where does the Court’s decision on the constitutionality of certain provisions of Act 13 leave the industry?  In many respects, it resets the clock to zero and puts the parties back into positions they were in before Act 13. But, if one were to stop with that conclusion, they would be missing some of the nuances of the decisions issued by the Court and turning a blind eye to the clouds gathering on the horizon.

One of those nuances is that the majority opinion did not enjoin enforcement of Sections 3306 – 3308 entirely. Instead, those Sections were enjoined only in so far as they enforced Sections 3303, 3304, or 3215(b) & (d). But, those Sections, in their remaining enforceable form, provide the industry with options to challenge and fight overly-aggressive municipalities or local governments who attempt improperly to regulate oil and gas operations within their borders.

For example, if a local government enacts a zoning ordinance under the Municipal Planning Code (“MPC”) that goes too far in its restrictions or regulations,[25] an operator (or royalty owner) no longer must start the fight against that ordinance before a local Zoning Hearing Board or Board of Supervisors, where hearings (sometimes before an entire body of non-lawyers) can go on indefinitely, and then (after possibly months or more than a year) find itself starting the judicial battle (defending a win or challenging a loss) in the state trial court. Now, if an oil and gas operator believes a local government has gone too far, it can opt to start its challenge of that ordinance or regulation in the Commonwealth Court. See 58 Pa. Cons. Stat. § 3306.

Plus, if the oil and gas operator prevails in its challenge of the local regulation, it now has the possibility to get its attorney fees and other reasonable costs from the offending local government. See 58 Pa. Cons. Stat. § 3307. And, possibly having even a more direct and significant financial impact on the local government, a finding that the local regulation violates the MPC or the Oil and Gas Act renders the local government ineligible to receive impact fees until the offending regulation or ordinance is amended or repealed or the decision is overturned on appeal. See 58 Pa. Cons. Stat. § 3308.

Additionally, an oil and gas operator (or royalty owner), if it so chooses, can submit a local ordinance or regulation to the Pennsylvania Public Utility Commission for review under Section 3305, a Section of Act 13 expressly found to be constitutional. See 58 Pa. Cons. Stat. § 3305(b); see also Section VII, infra. The Commission then has 120 days to determine whether the local ordinance or regulation complies with the MPC and/or the Oil and Gas Act and issue its decision. Id. Should the Commission determine that the local ordinance or regulation violates either the MPC or the Oil and Gas Act, the offending municipality is ineligible to receive impact fees until the offending regulation or ordinance is amended or repealed or the Commonwealth Court or Pennsylvania Supreme Court overturn the Commission’s decision. See 58 Pa. Cons. Stat. § 3308.

These provisions alone eliminate a significant amount of delay that was attendant to challenges to local regulation of oil and gas operations in the pre-Act 13 days. They also carry with them a financial incentive for municipalities and other local governments not to overreach in their regulation of oil and gas operations, incentives that did not exist previously.

A second nuance that arises from the plurality decision is that municipalities can be subject to suit for mismanaging their constitutional obligation to conserve and maintain the natural resources of the Commonwealth. Oil and gas arguably are part of those natural resources. And as a trustee of those resources, municipalities now must ensure that they properly manage the corpus of the trust. Borrowing from trust law, as the plurality did,[26] see supra, Part II.A, a municipality could find itself the subject of a claim of mismanagement of the trust corpus if it makes it too difficult or impossible to access and use the natural resources at a time when accessing and using those resources is most desirable. Perhaps a municipality that outright bans oil and gas development could find itself on the receiving end of, among other things, a waste or breach of fiduciary duty claim by resource owners (including oil and gas operators) within the municipality.[27]

A dark cloud on the horizon is the conundrum that the Court ultimately will have to face. Assume a municipality thinks the General Assembly has not acted properly to conserve and maintain the natural resources in the context of oil and gas development and seeks to do so on its own by way of local ordinances. What then does an oil and gas operator do if it is faced with two, contradictory laws on the same aspect of oil and gas development?  Under the plurality’s opinion, both laws are enacted by a governmental unit charged under the Constitution with conserving and maintaining the natural resources. Which law will prevail?  What test is to be applied? 

A large storm cloud gathering on the horizon for the industry is a challenge, either direct (by litigation) or passive (by passing an offensive ordinance) – by a municipality to the on-going validity of Salem Township and Huntley & Huntley as it relates to preemption and limitation of certain regulation at the local level. Both of those unanimous Pennsylvania Supreme Court decisions determined that, under the pre-Act 13 preemption provision of the Oil and Gas Act, municipalities could not regulate operations of oil and gas development that already were regulated by the Commonwealth and could not enact ordinances that sought to accomplish the same purposes as the Oil and Gas Act.[28] But, neither decision addressed due process or the Environmental Rights Amendment, despite the Environmental Rights Amendment being raised by an amici in the Salem Township case. 964 A.2d at 873.

How long will it be until a municipality seeks to test its new-found rights under Pennsylvania’s constitution, either to conserve and maintain natural resources or to protect the due process rights of residents within its borders, by flexing its muscles and passing an ordinance that runs afoul of the existing preemption provision?  As municipalities were doing this long before the recent decision; is it hard to foresee, as Justice Saylor does, the “tide of mischief that will flow” from the majority’s writings?

F. Commonwealth Has Requested Reconsideration

On December 30, 2013, the Commonwealth filed an Application for Reconsideration with the Pennsylvania Supreme Court. In the Application, the Commonwealth noted that the plurality opinion regarding the Environmental Rights Amendment set out, for the first time, a balancing test that was to be used for deciding whether legislation runs afoul of that constitutional provision. As such, the Commonwealth argued, the Supreme Court should have remanded the matter to the Commonwealth Court for a hearing to determine the factors to be balanced and to conduct the initial balancing, given there had been no evidentiary hearing conducted to-date. According to the Commonwealth, fact-finding and initial balancing by the Supreme Court is “unprecedented” and “runs roughshod over the principal that [the Pennsylvania Supreme Court] ‘does not sit as a trier of issues of fact, expecting to be persuaded that one or the other side is more credible.’” Commonwealth’s Application at 3 (citation omitted).

The Commonwealth also urged the Supreme Court to reconsider its decision that Sections 3215(c) and (e) are not severable from Section 3215(b); therefore, they should not have been enjoined. See supra Part II.D & n.24. Noting that this issue was not fully-developed in the record before the Supreme Court, the Commonwealth argued that those subsections of 3215 were severable from 3215(b) because they “address different and unique types of public resource concerns beyond the water quality concerns that are the subject of subsection (b).” Commonwealth’s Application at 9.

On January 15, 2014, the challengers to Act 13 filed their Answer to the Application. The challengers argued that the Supreme Court made a purely legal determination that Act 13 violated the Pennsylvania constitution on its face under an existing framework. Challengers’ Answer at 4. Further, the challengers argued that even if findings of fact were necessary to conduct the balancing test, the factual record was well-developed. Id. at 10. The challengers also argued that reconsideration as to Sections 3215(c) and 3215(e) is not warranted because those sections are “interconnected” to Section 3215(b) and not severable. Id. at 11. Finally, the challengers argued that reconsideration would foster “undue delay and creates the specter of uncertainty regarding the outcome and effect of this landmark case.” Id. at 12.

As of the date of this paper, the Supreme Court has not ruled on the Application, and, in the meantime, the Supreme Court’s decision is in effect.

III. Standing – Everyone Has It

The challengers to Act 13 included individuals (suing in their individual capacity as well as their capacity as elected municipal officials), municipalities, an environmental advocacy group and its executive director, and a medical doctor. The majority undertook an analysis as to each category to determine whether each had standing to sue. The conclusion – each did have standing because the majority determined that each had alleged an interest in the outcome of the litigation that was direct, substantial, and not remote.

Regarding the elected individuals, suing in their individual and representative capacity, the majority noted that there was no challenge to the standing of those individuals in their individual capacity. The basis for that standing was an allegation that they lived in a zoning district that was, under Act 13, required to allow oil and gas development within it and, as such, the value of their homes was “affected negatively because they can neither enjoy their properties as expected, nor guarantee to potential buyers the enjoyment of these properties without intrusion or burdensome industrial uses in their residential districts.” Robinson Twp., 2013 Pa. LEXIS 3068, at *17. Given that, and given that the claims asserted by the elected individuals were the same regardless of the capacity in which they were suing, the majority did not address whether the elected individuals had standing in their official capacity.[29]

The municipalities also were found to have standing. According to the majority, prior Supreme Court decisions recognized the standing of political subdivisions to enforce environmental standards. Moreover, those political subdivisions are legal persons and “‘place[s] populated by people.’” Robinson Twp., 2013 Pa. LEXIS 3068, at *23 (citation omitted; brackets [sic]). Given that a key part of local government’s role is the “protection of environmental and esthetic interests,” the municipalities here have “a substantial and direct interest in the outcome of litigation premised upon changes, or serious and imminent risk of changes, which would alter the physical nature of the political subdivisions and of various components of the environment.” Robinson Twp., 2013 Pa. LEXIS 3068, at *23; see also id. at *25 (“The aggrievement [sic] alleged by the political subdivisions is not limited to vindication of individual citizens’ rights but extends to allegations that the challenged statute interferes with the subdivisions’ constitutional duties respecting the environment and, therefore, its interests and functions as a governing entity.”).[30]

The Delaware Riverkeeper Network (the “Network”)and its executive director also were found to have standing. The Network, a 501(c)(3) organization, is an environmental advocacy group that addresses regional and local issues that allegedly threaten water quality and the ecosystems of the Delaware River and its watershed. See Delaware Riverkeeper Network, http://www.delawareriverkeeper.org/about/whoweare.asp (last visited Jan. 3, 2014). According to the plurality, the Network had standing because members of the Network are Pennsylvania residents or owners of property or business in parts of Pennsylvania likely to see natural gas operations related to the Marcellus Shale formation. Those members alleged that they were likely to suffer harms similar to those alleged by the elected individuals. Robinson Twp., 2013 Pa. LEXIS 3068, at *30-31. As such, the plurality concluded that the Network had standing as an association based on the interest of its members; additionally, its executive director had standing in her official capacity for the same reason. Id. at *32.

A medical doctor also challenged Act 13, specifically the portion of the Act that regulates disclosure of the identity of chemicals used in oil and gas operations and the use of that information by medical professionals in treating patients. See id. at *32 n.13; 53 Pa. Cons. Stat. § 3222.1(b)(10)-(11). The Commonwealth Court determined that the doctor did not have standing but the plurality disagreed. The plurality credited the doctor’s allegations that Act 13 placed him in an “untenable and objectionable position,” requiring him to choose “between violating a Section 3222.1(b) confidentiality agreement and violating his legal and ethical obligations to treat a patient by accepted standards, or not taking a case and refusing a patient medical care.” Robinson Twp., 2013 Pa. LEXIS 3068, at *36.[31] Therefore, according to the plurality, the doctor asserted a “substantial and direct” interest in the outcome of the litigation, entitling him to participate as a party. As such, the majority remanded the matter, as it relates to the doctor’s claims, to the Commonwealth Court for a decision on the merits.

IV. Political Question Doctrine – Not Applicable

In defending the challenge to Act 13, the Commonwealth argued that the Commonwealth Court strayed beyond its constitutional limits, violated the political question doctrine, and engaged in improper second-guessing of legislative choices made by the General Assembly in enacting Act 13. Id. at *39-44. The challengers to Act 13, the Commonwealth Court, and the majority disagreed. According to the majority, the Courts were doing nothing other than what Courts always do in deciding a constitutional question – determining whether the law, as drafted, complies with or violates the relevant constitutional limitations. Id. at *44-46; see also id. at *50 (“We have made clear, however, that ‘[w]e will not refrain from resolving a dispute which involves only an interpretation of the laws of the Commonwealth, for the resolution of such disputes is our constitutional duty.’”) (citation omitted).

According to the majority, a court should defer to review a statute under the political question doctrine only in limited situations – “only where ‘the determination whether the action taken is within the power granted by the Constitution has been entrusted exclusively and finally to the political branches of government for “self-monitoring.”’” Id. at *48 (citations omitted).

The dispute before the Court, though, did not implicate any such situation. Instead, according to the majority, the issue before the Court was not whether the General Assembly made the right policy decision but whether “in the exercise of the power, the legislation produced by the policy runs afoul of constitutional command.” Id. at *50-51; see also id. at *51 (“[A] statute is not exempt from challenge brought for judicial consideration simply because it is said to be the General Assembly’s expression of policy rendered in a polarized context.”).

Ultimately, given that the Commonwealth could point to no provision of the Pennsylvania Constitution that “grants [the General Assembly] authority to adopt non-reviewable statutes addressing either oil and gas or policies affecting the environment,” the political question doctrine was not applicable. Id. at *53.[32]

V. Is Act 13 a “Special Law”?  Stay Tuned.

The challengers to Act 13 also raised a claim that Act 13 constituted a “special law,” something that is not allowed under Pennsylvania’s Constitution, specifically Article III, Section 32 thereof.[33] This provision of Pennsylvania’s Constitution has been interpreted to mean that “like persons in like circumstances should be treated similarly by the sovereign,” akin to equal protection guarantees under the federal Constitution. Robinson Twp., 2013 Pa. LEXIS 3068, at *235. The Commonwealth Court dismissed this claim, concluding that the different treatment of the oil and gas industry “is based on real differences that justify varied classifications for zoning purposes.” Id. at *230. The majority determined this conclusion was improper, essentially concluding that the Commonwealth Court did not engage in a rigorous enough analysis of the claim raised by the challengers. “In response [to the challengers’ specific claims], the Commonwealth Court proceeded to assess the constitutionality of Section 3304, and Act 13 as a vague whole, based on an overly broad distinction and absent any analysis of whether the distinction had any fair and substantial relationship to the challenged provisions’ object, in light of the distinct constitutional breaches alleged by the citizens.” Id. at *238-39.

The proper analysis, according to the majority, required by the Constitution is to “ensure that the challenged legislation promotes a legitimate state interest, and that a classification is reasonable rather than arbitrary and ‘rest[s] upon some ground of difference, which justifies the classification and has a fair and substantial relationship to the object of the litigation.’” Id. at *236 (citations omitted; brackets [sic]). “Alternatively, a court may deem a statute or provision per se unconstitutional ‘if, under the classification, the class consists of one member and is closed or substantially closed to future membership.’” Id. at *236-37 (citations omitted).

As such, the majority vacated the Commonwealth’s decision on this issue and remanded the matter for further consideration under the above-identified analytical framework.

[T]he required inquiry is into the effect of the provisions challenged by the citizens, with respect to whether the admitted different treatment of the oil and gas industry represented by Act 13 rests upon some ground of difference that is reasonable rather than arbitrary and has a fair and substantial relationship to the object of each challenged provision. …  Finally, to the extent that the citizens also offered the alternative theory, as the Commonwealth suggests, that Act 13 is per se unconstitutional because it creates a class of one, the Commonwealth Court also failed to dispose of that claim.

Id. at *239-40.[34]

VI. Does Act 13 Allow for an Unconstitutional Taking?  Stay Tuned.

Those challenging Act 13 also claimed that Section 3241 violated the Pennsylvania and U.S. Constitutions in that it authorized an unconstitutional taking of property for private purposes. Section 3241 gives natural gas operators a conditional right to condemn subsurface reservoirs for storage.[35] The Commonwealth Court dismissed the claim that this Section was unconstitutional on the basis that no property of any challenger had been taken and that the challengers failed to follow the proper procedure in challenging a taking of property (procedures set out in the Eminent Domain Code). The majority concluded that the Commonwealth Court erred in its analysis and conclusion and remanded the matter for consideration of the merits of the claims raised. Id. at *242-47.

According to the majority, the procedures set out in the Eminent Domain Code do not apply as the challengers have not challenged a taking but have sought a pre-enforcement declaratory judgment that the law itself is unconstitutional.[36] Id. at *243-45. The majority also turned aside the arguments of the Commonwealth that the law does not authorize taking of property for private use but authorizes public utilities to take property for public use and that the Section of Act 13 being attacked is not new but a recodification of law that has been on the books for nearly 30 years. As to that latter point, the majority noted that “this is the first opportunity for this Court to address the constitutionality” of the provisions of the law under attack. Id. at *243 n.66.

VII. A Lone Victory for the Commonwealth - Act 13 Does Not Violate the Separation of Powers Doctrine

The challengers also claimed that Section 3305(a) and (b) were unconstitutional because those provisions were a violation of the separation of powers doctrine. See id. at *247 (“The core tenant of the separation of powers principle is that a branch of government is prohibited from exercising the functions committed exclusively to a co-equal branch.”) (citation omitted).[37] Section 3305(a) conferred on the Pennsylvania Public Utility Commission the authority to review, at the request of a municipality, that municipality’s proposed ordinance(s) and issue an advisory opinion as to whether the ordinance(s) is/are in compliance with the Municipalities Planning Code (e.g., zoning requirements) and/or the Oil and Gas Act (remaining parts of Act 13). Section 3305(b) allowed an oil and gas operator or a resident of a municipality to request the Commission to review a local enacted ordinance(s) to determine if the ordinance(s) is/are in compliance with the Municipalities Planning Code and/or the Oil and Gas Act (remaining parts of Act 13). Under that subsection, though, the Commission’s decision would be an order, subject to a de novo review by the Commonwealth Court.

According to the challengers, Subsection (a) violated the doctrine because it interjected a Commonwealth executive agency into the local legislative drafting process and Subsection (b) violated the principal because it conferred judicial authority on an executive agency.[38] See id. at *251-52, 260. The majority disagreed, finding the challenged Sections not to violate the separation of powers doctrine.

Regarding Subsection (a), the claim failed because (i) any restrictions on content of the ordinances derived from the legislature via Act 13 or the MPC, not from the Commission, (ii) municipalities are not required to seek pre-enactment review of the ordinances, (iii) the Commission has no authority to enforce its advisory opinion, and (iv) the municipality remains able to enact an ordinance regardless of the Commission’s opinion as to the ordinance’s compliance with the law. Id. at *268-69. As for Subsection (b), the claim failed because Pennsylvania Supreme Court precedent (i) allowed the legislature to channel constitutional questions through administrative agencies on their way to final judicial determination, and (ii) permitted administrative agencies to pass upon a constitutional claim in the first instance. Id. at *255-56. As such, regardless of the unconstitutionality of Section 3303 (environmental law preemption) and Section 3304 (uniformity and zoning provision), the Commission retains the authority to review any challenged local ordinances for compliance with the MPC’s requirement of reasonable development of oil and gas resources or for compliance with any remaining provision of the Oil and Gas Act, including Section 3302’s preemption provision.

VIII. Does the Unconstitutional Nature of Three Sections of Act 13 Doom the Entire Act?  Stay Tuned.

The challengers asked that all of Act 13 be declared to be unconstitutional based on the fact that certain of its Sections allegedly were unconstitutional. Id. at *269. The majority, though, noted the presumption under Pennsylvania law that the provisions of every statute are severable; meaning that the unenforceability of one provision of a statute will not, automatically, mean that the entire statute is unenforceable. Id. But, the majority remanded the matter to the Commonwealth Court to determine, in the first instance, whether any other portions of Act 13 (or the rest of Act 13) should be unenforceable in light of the provisions determined to be unconstitutional or otherwise unenforceable. So, the municipalities, the residents, the industry, and the Commonwealth all will have to await further briefing, argument, fact-finding, and decision-making by the Commonwealth Court (and possible appeal again to the Supreme Court) to know what part of Act 13, if any, remains good law. Until then, all will have to move forward, making the best of the Court’s decision and its impact on oil and gas development throughout the Commonwealth.

____________________________________________________

 1             Jeremy Mercer is a Partner in the Pittsburgh-Southpointe, Pennsylvania, office of Fulbright & Jaworski LLP, a member firm of Norton Rose Fulbright. The author gratefully acknowledges the contributions to this paper of Amy Barrette and Janet McQuaid, also Partners in the Pittsburgh-Southpointe Office.

2              See, e.g., Walter Brasch, Jumping Aboard Fracking’s Fossil Fuel Carousel, OpEdNews.com (10/8/2013 at 12:27:56), http://www.opednews.com/articles/Jumping-Aboard-Fracking-s-by-Walter-Brasch-Coal-Mining_Energy_Energy_Energy-131008-132.html (last visited January 6, 2014).

3              Chief Justice Castille wrote the plurality opinion, in which Justices Todd and McCaffery joined in toto. Justice Baer joined Parts I, II, IV, V, and VI(A)-(B), (D)-(G) and issued a concurring opinion on Part III. Justices Eakin and Saylor each wrote dissenting opinions. Neither former Justice Orie Melvin nor new Justice Stevens participated in the decision.

4              These Practical Implications focus on options available to operators as a result of the Court’s decision and/or Act 13. They are not an all-inclusive list of ways to move forward with development in Pennsylvania, such as working with a municipality to draft a reasonable zoning ordinance or amend an existing zoning ordinance that makes development unreasonable or unrealistic.

5              This failure is all the more curious given that the plurality, earlier in its opinion, cited case law for the proposition that the Constitution is to be interpreted consistently, in a manner that avoids contradictions. See Robinson Twp., 2013 Pa. LEXIS 3068, at *98 (“‘[T]he Constitution’s language controls and must be interpreted in its popular sense, as understood by the people when they voted on its adoption.’  …  Towards this end, we avoid reading the provisions of the Constitution in any ‘strained or technical manner.’  Indeed, ‘we must favor a natural reading which avoids contradictions and difficulties in implementation, which completely conforms to the intent of the framers and which reflects the views of the ratifying voter.’”) (citations omitted); Id. at *106 (“A specific provision will prevail over a general provision found elsewhere, but because the Constitution is an integrated whole, we are cognizant that effect must be given to all of its provisions whenever possible.”) (citation omitted).

6              This is not the first time in the plurality opinion that it accepts, seemingly as fact, the alleged deleterious effect that oil and gas development will have on the environment and surrounding properties. In his dissent, Justice Saylor noted this tendency: “Moreover, while hypothesizing an unreasonably deleterious impact of Act 13 on the environment [citations omitted], the lead opinion gives scant attention to its extensive scheme for well permitting [and other environmental and regulatory aspects].” Id. at *306. The Commonwealth noted this tendency by the plurality in its Application for Reconsideration. See infra Part II.F.

                Moreover, the opinion also expounded at length about environmental disasters that befell Pennsylvania’s natural resources in the past, in absence of regulation on industries. See Robinson Township, 2013 Pa. LEXIS 3068, at *147-55. This exposition, despite being dicta, failed to recognize the significant regulations and restrictions imposed on the oil and gas industry by state law and made more stringent by Act 13. Moreover, it presumed, without citation of any support, that these events (some of the late 1800s or early 1900s) were “in the recent collective memory of the General Assembly” when the General Assembly crafted the Environmental Rights Amendment in 1967. Robinson Township, 2013 Pa. LEXIS 3068, at *155.

7              The challengers to Act 13 did not challenge the constitutionality of the other preemption provision in Act 13, Section 3302. But, given the broad language and holdings throughout the plurality opinion, an attack on the validity of that Section may not be too far off. In such a case, though, the challengers would not only have to surmount the hurdle of gaining a majority of Justices to buy-in to the Environmental Rights Amendment argument but also to convince those Justices to turn aside their decisions in Range Resources – Appalachia, LLC v. Salem Township. and Huntley & Huntley, Inc. v. Borough Council of the Borough of Oakmont, wherein the unanimous Pennsylvania Supreme Court found the preemption provision to be effective in restricting the aspects of oil and gas development that local governments can regulate, even when one of the amici made an argument based on the ERA. See Range Resources – Appalachia, LLC v. Salem Twp., 964 A.2d 869, 873 (Pa. 2009) [enhanced version]; Huntley & Huntley, Inc. v. Borough Council of the Borough of Oakmont, 964 A.2d 855 (Pa. 2009) [enhanced version].

8              The plurality opinion did not address, though, the unique nature of oil and gas – it is located below the surface and cannot be accessed or developed fully, optimally, or even rationally solely by doing so through surface operations limited to certain zoning districts. Nor did the plurality seem to take into consideration the limited temporal duration of operations on a site or that a reclaimed site can blend into the preexisting neighborhood or scenery as well as, if not more so, than a large home, barn, or other structure.

9              One has to strain to reconcile this broad, unsupported conclusion with the plurality’s earlier concession that the “citizens do not dispute that the General Assembly has the authority to preempt local laws, amend the Oil and Gas Act, or simply remove municipalities’ zoning power entirely.” Id. at *74-75. Has the plurality just opened the flood gates to challenges to other statewide environmental regulatory statutes on the basis that they do not provide for adequate or sufficient local flavor or regulation? 

10           To the extent municipalities attempt rezoning within their borders, even if it is to make oil and gas development less attractive or available, these same arguments or excerpts could be cited by opponents to that rezoning. Moreover, the plurality ignored the fact that Act 13 does treat all beneficiaries equally in that, for example, no beneficiary could exclude oil and gas operations from their zoning district.

11           As Justice Saylor noted in his dissent, to reach its conclusion, the plurality ignored the reality of the restrictions imposed by Act 13. Robinson Twp., 2013 Pa. LEXIS 3068, at *306 (Saylor, J., dissenting); see infra Part II.C (discussing dissents).

12           One must wonder if the plurality appreciated the inconsistency here. In an earlier portion of their decision, the plurality noted that environmental decision-making was required, constitutionally, to be done locally. See Robinson Twp., 2013 Pa. LEXIS 3068, at *209 (“Protection of environmental values, in this respect, is a quintessential local issue that must be tailored to local conditions.”)  However, here, the plurality said that, under the very same constitutional provision, the fact that environmental decision-making was to be done locally (on a site-by-site basis, “tailored to local conditions”) was a constitutional infirmity. Additionally, the plurality did not note or explain its inconsistency between its position on this issue (that a state agency does not have the authority or ability to carry out duties of a trustee of Pennsylvania’s natural resources) with its earlier rejection of the analytical framework for deciding constitutional questions relative to the Environmental Rights Amendment because, among other things, that framework minimized “the constitutional duties of executive agencies and the judicial branch, and circumscrib[ed] the abilities of these entities to carry out their constitutional duties independent of legislative control.” Id. at *172.

13           The plurality seemed to imply that the DEP would not comply with its other legal obligations unless it was expressly required to do so in Act 13. Such an implication, without any factual or record support, is unprecedented and, arguably, reveals a lack of respect for an agency of a co-equal branch of Commonwealth government.

14           The plurality also found that Section 3215(d) of Act 13 (stating the DEP “may” consider comments from municipalities and storage operators in making a well permit determination; no appeal by municipality or storage operator is allowed) was unconstitutional as it “marginalizes participation by residents, business owners, and their elected representatives with environmental and habitability concerns, whose interests Section 3215 ostensibly protects.” Id. at *225.

[1]5           Substantive due process rights are found in Article I, Section 1 of the Pennsylvania constitution, which provides “All men are born equally free and independent, and have certain inherent and indefeasible rights, among which are those of enjoying and defending life and liberty, of acquiring, possessing and protecting property and reputation, and of pursuing their own happiness.” Pa. Const. article I, section 1.

16           This appears to contradict, without explanation, Justice Baer’s statement a few pages later where he said that “[n]o constitutional or statutory law prohibits the Commonwealth from establishing itself in the field of statewide zoning….” Id. at *283. This also differs from the plurality opinion which, in several spots, noted that the Commonwealth can remove the power to zone from municipalities. See, e.g., Robinson Twp., 2013 Pa. LEXIS 3068, at *205.

                Justice Eakin also disagrees with this conclusion, at least when dealing with a resource that exists throughout the state. “The point is that there is one body with the authority to address the broad statewide issues that necessarily are involved here – it simply cannot be done town by town or township by township. It demands a comprehensive plan respectful of every citizen’s right to the resource.” Id. at *320 (Eakin, J., dissenting).

17           In his dissent, Justice Saylor questioned the constitutional source of this maxim. “In his concurring opinion, Mr. Justice Baer appears to translate the common-law duty of sic utere tuo ut alienum non laedas into a federal constitutional duty, on the part of local municipalities, to protect property owners from the use of neighboring properties in ways that are undesirable to them.” Id. at *314 n.2 (Saylor, J., dissenting).

18           Again, Justice Baer appeared to contradict, without explanation, his earlier statement that “[n]o constitutional or statutory law prohibits the Commonwealth from establishing itself in the field of statewide zoning….” Id. at *283.

19           One has to wonder whether Justice Baer would have reached a different conclusion had Act 13 set up some sort of statewide zoning hearing board that was charged with hearing variance-type requests or challenges by impacted landowners. As this would allow for some of the local, site-specific evaluation that Justice Baer seems to believe zoning requires, it could be a way to address the constitutional infirmities he sees. See, e.g., id. at *295 (Act 13 does not have “any mechanism for objection or remedy by the citizenry consistent with the individualized concerns of each municipality, zoning district, or resident”); Id. at *297 (“Different landowners, in different parts of the Commonwealth (indeed, different neighbors in the same municipality), will be arbitrarily impacted by [Act 13]. …  Individual landowners and municipalities alike will be unable to acclimatize to the fledgling world of Marcellus Shale hydrofracturing and drilling and the continuing fluidity of its development, and will be unable to seek recourse for the unquestionable damages to their private enjoyment of property.”) (citation omitted).

20           To elucidate how the challengers distorted the impacts of Act 13, a distortion the majority embraced, Justice Saylor noted that the majority and the challengers claimed that the 500 foot setback from existing buildings and 300 foot setback from property lines was insufficient protection and would not stop drill sites or other related infrastructure from popping up in every residential district throughout the Commonwealth. However, “[t]o put this in perspective, an acre of land (of equal dimensions) would be approximately 208 feet by 208 feet. The typical residential neighborhood in Pennsylvania … would simply not be impacted by Section 3304. …  The General Assembly could have reasonably concluded that the benefits of increasing the potential supply of natural gas by allowing limited development in relatively undeveloped and non-densely populated areas of the Commonwealth outweighs the harm in requiring municipalities to deviate from the comprehensive plans under” the MPC. Id. at *308-09 (first brackets and second ellipses added). Additionally, the majority’s view on this issue ignored the reality of space required for a well pad and other development, which further reduces the amount of space available in a residential district for oil and gas development.

21           One of those hurdles is infrastructure, more specifically pipelines, which Justice Eakin addressed in Footnote 2 of his dissent. Id. at *320 n.2 (Eakin, J., dissenting).

22           It is hard to understand the logic or reasoning behind this conclusion from a majority who continually attacked Act 13 as not doing enough to protect the environment.

23           While the plurality opinion text and Mandate are in agreement on this point, Justice Baer, the concurring Justice, has thrown a bit of uncertainty into the mix. Justice Baer joined the part of the plurality opinion that contains the explication of the extent to which these Sections are enjoined and joins in that part of the Mandate as well. See Robinson Twp., 2013 Pa. LEXIS 3068, at *2, 271-75; Id. at *275 (Baer, J., concurring). Therefore, Justice Baer’s “joinder of the aforementioned parts of the Chief Justice’s opinion creates a majority opinion in those regards.” Id. at *275 n.1. But, in his concurrence, Justice Baer expressly stated that he would “enjoin the entirety of Sections 3305 through 3309 as ‘incapable of execution’ upon the striking of Sections 3303 and 3304.” Id. at *299. Given his joinder of Chief Justice Castille’s opinion, his own footnote noting the effect of that joinder, and his express statement that his “concurrence will address the constitutionality of the provisions contained within Sections 3215, 3303, and 3304,” a safe conclusion is that Sections 3305 through 3309 are enjoined only to the extent they enforce Sections of Act 13 found to be invalid.

24           The text of the majority decision appears to enjoin these subsections in their entirety: “Moreover, insofar as Section 3215(c) and (e) are part of the Section 3215(b) decisional process, these provisions as well are incomplete and incapable of execution in accordance with legislative intent. Application of Section 3215(c) and (e) is, therefore, also enjoined.” Robinson Twp., 2013 Pa. LEXIS 3068, at *271-72. But, the Mandate appears to enjoin those subsections only insofar as they “implement or enforce those Sections of Act 13 which we have found invalid.” Id. at *274 ¶ D. The distinction is important as, for example, Section 3215(c) requires the DEP, in making a determination on whether to grant a well permit, to consider the impact of a well location on certain public resources.

25           The MPC requires that every municipality provide for the reasonable development of oil and gas within its borders. 53 Pa. Stat. § 10603(i) (“Zoning ordinances shall provide for the reasonable development of minerals in each municipality.”); 53 Pa. Stat. § 10107 (“mineral” is defined to include “crude oil and natural gas.”). Moreover, under existing Pennsylvania Supreme Court precedent, municipalities are limited in what they can regulate relative to oil and gas operations by way of the MPC. See, e.g., Salem Twp., 964 A.2d 869 (Pa. 2009); Huntley & Huntley, Inc., 964 A.2d 855 (Pa. 2009).

26           The plurality borrowed concepts from trust law to explain how the trustees of Pennsylvania’s natural resources have an obligation to protect those resources, including a “duty to refrain from permitting or encouraging the degradation, diminution, or depletion of public natural resources, whether such degradation, diminution, or depletion would occur through direct state action or indirectly, e.g., because of the state’s failure to restrain the actions of private parties.” Robinson Twp., 2013 Pa. LEXIS 3068, at *142.

27           If a municipality were to ban oil and gas development entirely, either de facto or de jure, does the plurality’s holding subject that municipality to an Article I, Section 26 claim for discrimination on the theory that the municipality is denying the enjoyment of a civil right – the right to use natural resources?

28           The preemption language in the former Oil and Gas Act was reenacted at Section 3302 of Act 13 without change. The challengers did not include Section 3302 within the ambit of their challenge to Act 13.

29           The basis for the official capacity standing was an allegation that those individuals “would be ‘required to vote for zoning amendments they believe are unconstitutional.’” Id. at *17 (citation omitted). While claiming not to address the issue, the majority dropped a footnote wherein it said the Commonwealth Court “persuasively” addressed the elected officials’ interest in the outcome of the litigation. Id. at *271-72 n.9. The Commonwealth Court determined the elected officials had standing in their official capacity. Id. at *16.

                Interestingly, though, in a January 21, 2014, Order, the Court denied intervention by two General Assembly members to support Act 13, finding they did not have standing. See Jan. 21, 2014, Order. While noting intervention and party status may be allowed in “actions alleging a diminution or deprivation of the legislator’s . . . power or authority,” Order, p. 2, the Court denied the application. It is hard to find a clearer case of an allegation of diminution of power or authority of members of the General Assembly than this case, but the Court denied the application anyway, characterizing the requested entry by the legislators solely as them “seek[ing] to offer their perspective on the correctness of governmental conduct.” Order, p. 3.

30           Justice Saylor, in his dissent, saw this decision as opening the proverbial Pandora’s Box, without any legal support. Holding that municipalities have standing “is unprecedented, has serious ramifications, and yields the potential for myriad collateral issues and controversies. …  [S]ince municipalities are creatures of the sovereign and entirely dependent upon the will of the state for their very existence, they have no authority or duty to challenge the state’s alteration of their delegated powers. Moreover, I am concerned that protracted litigation, deriving from entertaining a host of arguments which do not demonstrate a clear, palpable, and plain violation of the Constitution can impede the Commonwealth’s ability to maintain or enhance its relative position in an increasingly competitive economic marketplace.” Id. at *316 (Saylor, J., dissenting).

                Moreover, Article I, Section 27, the provision of the Pennsylvania Constitution the municipalities were found to have standing to pursue, is found in the section of the Constitution that reserves power and authority to the people. See Pa. Const. art. I, §25 (“To guard against transgressions of the high powers which we have delegated, we declare that everything in this article is excepted out of the general powers of government and shall forever remain inviolate.”); Robinson Twp., 2013 Pa. LEXIS 3068, at *109. Therefore, the majority are “lend[ing] municipalities standing to pursue vindication of rights accorded to (or recognized in) individuals under Article I of the Pennsylvania Constitution, particularly as and against the sovereign.” Id. at *315-16 (Saylor, J., dissenting); see also id. at *318 (Eakin, J., dissenting) (“[G]iving standing to some 2,500 sets of local officials to sue the sovereign based on alleged violations of individual constitutional rights is misguided, and will have precedential repercussions – I fear we will soon face a tide of mischief that will flow from such an ill-advised notion.”).

                One has to wonder whether under the majority’s analysis the General Assembly, as representatives of a place where people live and as a trustee under Article I, Section 27 of the Pennsylvania Constitution, would have standing to intervene.

31           But, the plurality does not explain how this Hobson’s choice arises given that the Act expressly allows the doctor to use the information in treating the patient but does not allow for further dissemination.

32           Perhaps this was a bit of foreshadowing regarding the plurality’s conclusion that “Commonwealth” in the Environmental Rights Amendment was not limited to the General Assembly and included municipalities.

33           Article III, Section 32 of Pennsylvania’s Constitution provides, in pertinent part, that the “General Assembly shall pass no local or special law in any case which has been or can be provided for by general law ….” Pa. Const. art. 3, §32.

34           One wonders, though, if Chief Justice Castille was attempting to telegraph a view of the right conclusion on the latter question when he wrote, earlier in his opinion, that “Act 13 is not generalized environmental legislation, but is instead a statute that regulates a single, important industry – oil and gas extraction and development.” Id. at *197.

35           Section 3241 provides, in pertinent part, that “a corporation empowered to transport, sell or store natural gas or manufactured gas in this Commonwealth may appropriate an interest in real property located in a storage reservoir or reservoir protective area for injection, storage and removal from storage of natural gas or manufactured gas in a stratum which is or previously has been commercially productive of natural gas.”

36           On this latter point, the majority noted that the challengers were making a facial challenge to the validity of the statute and, as such, did not need to wait for enforcement to challenge the validity. Id. at *245. This holding will be of much assistance to oil and gas operators who may seek to challenge the constitutionality of municipal ordinances restricting, prohibiting, banning, or otherwise improperly limiting oil and gas development in that it will take away an argument from municipalities that the operator must make application under the ordinance and be denied a permit or otherwise await enforcement of the ordinance by the municipality. Such an argument already has been advanced by South Fayette Township, one of the challengers to Act 13, in response to a challenge by Range Resources – Appalachia, LLC that the municipality’s oil and gas ordinances prohibit any development within the township. See, e.g., S. Fayette Twp. v. Zoning Hearing Bd., SA-11-001279, Court of Common Pleas of Allegheny County, Land Use Appeal, ¶¶ 8, 12 & Exh. B thereto.

37           The majority assumed, without deciding, that a separation of powers argument could exist when dealing with a Commonwealth agency and local legislative body; those two bodies are not co-equal branches of government. See id. at *265.

38           On this latter point, the challengers’ argument was a two-step argument:  (i) all zoning challenges implicate constitutional claims and (ii) an administrative agency, like the Commission, does not have authority to pass on constitutional claims. See id. at *251.

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