Publications

     

Client Alert

Pennsylvania Supreme Court Declares Portions of Marcellus Shale Act Unconstitutional, Upholds Local Regulation of Oil and Gas Operations

January 15, 2014

Authors: Kathleen D. Wilkinson, Michael J. Cawley

On December 19, 2013, in Robinson Township v. Commonwealth of Pennsylvania et al., the Pennsylvania Supreme Court declared portions of Act 13 of 2012 (Act 13), commonly known as the “Marcellus Shale Act,” unconstitutional. As enacted by the Pennsylvania legislature and signed into law by Governor Corbett, Act 13 prohibited any local regulation of oil and gas operations and provided more regulatory powers over gas drilling activities to the Commonwealth of Pennsylvania at the expense of the thousands of municipalities located throughout the state. Notably, in May 2013, a New York intermediate appeals court upheld local ordinances banning hydrofracking (“fracking,” the extraction of natural gas from shale formations) within several municipalities’ boundaries, holding that the New York State oil and gas regulations did not preempt these local zoning laws.

In March 2012, Robinson Township, PA, initiated the current lawsuit, and was subsequently joined by other parties, including nonprofit environmental organizations, municipalities and individual citizens. These parties sought a declaration of unconstitutionality and a permanent injunction prohibiting Act 13’s application. One of the key provisions of Act 13 to which the parties seeking a declaration of unconstitutionality objected was the requirement that “drilling, waste pits and pipelines be allowed in every zoning district, including residential districts, as long as certain buffers are observed.”

The Decision
Prior to the Pennsylvania Supreme Court taking up the constitutionality of Act 13, the Pennsylvania Commonwealth Court considered the issue and ruled partially in favor of the Plaintiff municipalities by striking down some portions of Act 13 on the basis that Act 13 was violative of the Plaintiffs’ due process rights. In addition to raising the alleged due process violations, the Plaintiffs also raised before the Commonwealth Court the Pennsylvania Environmental Rights Amendment (the Amendment) as a basis upon which to declare Act 13 unconstitutional. The Commonwealth Court declined to address the applicability of the Amendment to Act 13 and limited its determination that the Act was unconstitutional as to the due process violations. The parties filed to the Pennsylvania Supreme Court appeals and cross-appeals to the Commonwealth Court’s ruling.

Once before the Supreme Court, Plaintiffs again asserted the applicability of the Amendment as a basis to declare Act 13 unconstitutional. The Amendment states that the Commonwealth, as trustee of Pennsylvania’s public natural resources, has a duty to conserve and maintain certain natural resources. While the Commonwealth Court found Act 13 unconstitutional on the basis of due process violations, the Pennsylvania Supreme Court agreed with the argument that Act 13 violated the Amendment and invalidated a number of aspects of the Pennsylvania Department of Environmental Protection’s (DEP’s) decisional process to grant waivers from setback requirements from certain bodies of water.

In reliance on the Environmental Rights Amendment, the Pennsylvania Supreme Court struck down sections 3215 (b)(4) and (d), 3303 and 3304 of Act 13 as incompatible with the Commonwealth’s duty as trustee of Pennsylvania’s public natural resources. The Supreme Court’s conclusion that Act 13 violates the Environmental Rights Amendment is significant in that every municipality is now free to adopt even stricter environmental protections than those imposed by the state over those same resources.

In its ruling the Pennsylvania Supreme Court articulated a four-point rationale for its decision that effectively granted to municipalities the right to be stewards over natural resources within their own borders:

  • First, “at its core, this dispute centers upon an asserted vindication of citizens’ rights to quality of life on their properties and in their hometowns, insofar as Act 13 threatens degradation of air and water, and of natural, scenic and esthetic values of the environment, with attendant effects on health, safety and the owners’ continued enjoyment of their private property.”
  • Second, it follows from the Environmental Rights Amendment of the Pennsylvania Constitution that “all existing branches and levels of government derive constitutional duties and obligations with respect to the people,” including municipalities. As the Court also found that Act 13 “fundamentally disrupted“ the expectations of Pennsylvania residents living in residential zones, it is stated that section 3303 of Act 13 commanded municipalities to ignore their constitutional obligations, undoing existing protection of the environment in their localities.
  • Third, the General Assembly had, among other fiduciary duties under the Environmental Rights Amendment, the obligation to prevent degradation, diminution and depletion of public natural resources. Section 3304 of Act 13 permitted industrial oil and gas operations as a use “of right” in every zoning district throughout the Commonwealth. In implementing this legislation, the General Assembly did not exercise its police powers to foster development in a manner that respects the reserved rights of the people to a clean, healthy and esthetically pleasing environment. As a consequence, section 3304 of Act 13 is incompatible with the express command of the Environmental Rights Amendment.  
  • Finally, sections 3215 (b)(4) and (d) were declared unconstitutional. Under section 3215 (b)(4), the DEP had to waive the distance restrictions from any water supply extraction point if the applicant submitted a plan identifying measures to protect the water quality. The Pennsylvania Supreme Court pointed out that section 3215 (b)(4) did not describe precisely the measures that would be necessary to grant a waiver, inviting “arbitrary decision-making.” Section 3215 (b) prevented the DEP from taking into account the comments of residents while making a determination on well permits and denied municipalities or storage operators the right of appeal from the DEP’s decisions. The Court found that this provision did not allow the DEP to take into account local concerns in its permit decisions and treated the trust beneficiaries inequitably. The decision may weaken the legal validity of these waivers in the future if the DEP does not take into account the requirements of the Court during its decision-making process. 

Remaining Questions and Implications
Certain questions raised in Robinson Township are left unanswered by the Pennsylvania Supreme Court’s decision and were sent back to Commonwealth Court for reevaluation. For example, Act 13’s restrictions on physicians regarding the sharing of information on chemicals used in drilling operations could prevent them from treating patients properly.

Similarly, the constitutional challenge that the law benefits a single industry – the oil and gas industry – was sent back to Commonwealth Court.

As for the long-term implications of the decision, three, in particular, are noteworthy.

  • The decision confirms in no uncertain terms that Pennsylvania municipalities have the constitutional right to limit drilling in every zoning district, including residential ones, although municipalities are still not allowed to regulate technical aspects of drilling, which remains the sole responsibility of the DEP. 
  • The decision invalidates some aspects of the DEP decisional process in granting waivers from setback requirements from certain bodies of water, which may, in turn, weaken the legal validity of these waivers in the future if the DEP does not take into account the requirements of the Pennsylvania Supreme Court during its decisional process.
  • Finally, the decision will likely breathe new life into Pennsylvania’s rarely used and – until now – long-forgotten 42-year-old Environmental Rights Amendment. Looking ahead, fracking opponents in Pennsylvania will likely view this Amendment as a new and powerful tool in their ongoing efforts to secure a wholesale ban on natural gas exploration in Pennsylvania.  

Whether and to what extent Robinson Township may provide a “road map” for fracking opponents in other states remains to be seen. Governor Corbett has announced that the Pennsylvania Attorney General’s office will file a motion for reconsideration of the decision. As the law in this area continues to develop, Wilson Elser will keep our colleagues and clients advised.

Aurelie Cohendet provided research assistance for this alert.

View more Client Alerts