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PA Supreme Court Rules Act 13 Drilling Law Municipal Preemption Unconstitutional

The PA Supreme Court Thursday issued a landmark opinion declaring unconstitutional provisions of the Act 13 Marcellus Shale drilling law relating to preempting local regulation of drilling operations, according to the Delaware Riverkeeper.

The Court also invalidated provisions of the law establishing setbacks from rivers and streams, the requirement for DEP to evaluate the impacts to public resources and restrictions on the right of municipalities to appeal DEP permit decisions.

The Court also directed Commonwealth Court to re-hear complaints by municipalities that Act 13 prevents doctors from telling patients of the health impacts of chemicals used in natural gas well fracking operations.

The significance of this ruling is not that it declared those provisions unconstitutional, but the legal basis for the opinion-- Article I, Section 27 of Pennsylvania’s Constitution, the Environmental Rights Amendment.

In the near future, the Court opinion will have an impact on portions of DEP’s proposed revisions to Chapter 78 drilling regulations required by Act 13 since they implement the setback provisions and the requirement for DEP to evaluate the impact on public resources struck down as unconstitutional by the opinion.

The opinion would also allow counties and municipalities to adopt their own environmental standards to cover drilling on State Forest Land, rather than relying solely on the standards set by the Department of Conservation and Natural Resources. In particular the controversy over drilling in the Loyalsock State Forest in Lycoming and Sullivan counties comes to mind.

This decision is likely to change the way environmental impacts are regulated in the state far beyond the Oil and Gas Act. (See related article.)

Click Here for a copy of the decision. Click Here for a copy of the concurring opinion.

Overview

The Delaware Riverkeeper said the Court stated, ““As the citizens illustrate, 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 [life, health, and liberty: surface and groundwater, ambient air, etc.] of Pennsylvania’s environment, which are part of the public trust.”

Additionally, the Court stated, ““By any responsible 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 on the public purse, perhaps rivaling the environmental effects of coal extraction.”

The Court’s decision upholds the ability of local governments to protect their local communities and natural resources through zoning. Chief Justice Castille authored the historic majority opinion. Justices Todd, McCaffrey and Baer joined in the result.

Justices Castille, Todd, and McCaffrey held that the provisions violate Article I, Section 27 of the Pennsylvania Constitution – the Environmental Rights Amendment. Justice Castille stated

that “we agree with the citizens that, as an exercise of the police power, Sections 3215(b)(4) and (d), 3303, and 3304 are incompatible with the Commonwealth’s duty as trustee of Pennsylvania’s public natural resources.”

In discussing Section 3304’s uniform zoning provisions, Justices Castille, Todd, and McCaffrey agreed that the provisions “sanctioned a direct and harmful degradation of the environmental quality of life in these communities and zoning districts.”

They also concluded that the Act forced some citizens to bear “heavier environmental and habitability burdens than others” in violation of Section 27’s mandate that public trust resources be managed for the benefit of all the people.

Justice Baer concurred in finding Act 13 unconstitutionality, agreeing with the Commonwealth Court’s reasoning. Justice Baer stated that the provisions “force municipalities to enact zoning ordinances, which violate the substantive due process rights of their citizenries.”

He further noted “Pennsylvania’s extreme diversity” in municipality size and topography and that zoning ordinances must “give consideration to the character of the municipality,” among other factors, which Act 13 did not.

“The Court has vindicated the public’s right to a clean environment and our right to fight for it when it is being trampled on. Today the environment and the people of Pennsylvania have won and special interests and their advocates in Harrisburg have lost. This proves the Constitution still rules, despite the greedy pursuits of the gas and oil industry. With this huge win we will move ahead to further undo the industry’s grip of our state government,” said Maya van Rossum, the Delaware Riverkeeper.

“This is a great historic victory for local democracy, for public health, and for the health of our environment. The shale gas industry overreached, greedily wanting to operate without respecting local concerns and without playing by the same set of rules everyone else has to play by. The Corbett Administration and the General Assembly went along with it and tried to give away our rights to the gas industry. The Supreme Court has made it clear that what they were trying to do violates our state Constitution. It’s a great day for the Constitution and the people of the Commonwealth”, said Jordan Yeager, counsel for the plaintiffs.

The Pennsylvania Supreme Court also reversed Commonwealth Court’s finding that the Delaware Riverkeeper Network lacked standing in this case. Specifically, the court found that DRN’s members engendered “a substantial and direct interest in the outcome of the litigation premised upon the serious risk of alteration in the physical nature of their respective political subdivisions and the components of their surrounding environment. This interest is not remote.”

The court also found that Maya van Rossum, as the Executive Director of the Delaware Riverkeeper Network, also has standing in her official capacity to represent the membership’s interests.”

The ruling therefore sets important precedent for what immediate interest or harm environmental organizations and their members need to demonstrate in order to properly establish standing.

Reaction- Gov. Corbett

Gov. Corbett released the following statement regarding the Supreme Court’s decision on Act 13:

"I am disappointed that the Supreme Court has invalidated some key provisions of Act 13. We are continuing to review today's decision. Act 13 was a bipartisan accomplishment between the Administration and members of the General Assembly, which raised the bar on environmental protection standards while respecting the rights of local governments.

"The Act was crafted with strong input and support from Pennsylvania's local government organizations. We must not allow today's ruling to send a negative message to job creators and families who depend on the energy industry. I will continue to work with members of the House and Senate to ensure that Pennsylvania's thriving energy industry grows and provides jobs while balancing the interests of local communities."

Industry Reaction

Marcellus Shale Coalition president Dave Spigelmyer issued this statement on the ruling:

“We are reviewing the Supreme Court’s decision in full to evaluate its impact on our operations across Pennsylvania. As we did prior to enactment of Act 13 and have done during this period of review by the state Supreme Court, Pennsylvania’s natural gas industry will continue to work collaboratively with the communities in which we operate to ensure shale development moves forward and we continue to realize the benefits at the local level and statewide. Although we will continue to collaborate with communities across the Commonwealth, today’s decision is a disappointment and represents a missed opportunity to establish a standard set of rules governing the responsible development and operation of shale gas wells in Pennsylvania.

“This outcome should also serve as a stark reminder to policymakers of Pennsylvania’s business climate challenges. If we are to remain competitive and our focus is truly more job creation and economic prosperity, we must commit to working together toward common sense proposals that encourage – rather than discourage – investment into the Commonwealth.”

Sen. Scarnati, Speaker Smith On Ruling

Senate President Pro Tempore Joe Scarnati (R-Jefferson) and Speaker Sam Smith (R-Jefferson) issued the following statement regarding the decision:

“The decision made by four Supreme Court Justices today to invalidate a portion of Act 13 of 2012 is incredibly disappointing. While recognizing that a decision of this length will take weeks to fully absorb, we are stunned that four Justices would issue this ruling which will so harshly impact the economic welfare of Pennsylvanians. The majority decision seems to raise significantly more questions than it answers.

“Chief Justice Castille’s opinion relies in part on inaccurate antidotes and unproven science. The consequences of this decision will likely be the increase of natural gas prices for consumers, while at the same time costing a multitude of jobs in Pennsylvania. It is important to note that this decision resets the clock on zoning prior to the enactment of Act 13, therefore municipalities will continue to have some statewide checks on local discretion.

“The Marcellus Shale Impact Fee legislation was the result of great collaboration between state officials, local officials, industry leaders and environmental groups. There were dozens of strong environmental protections included in Act 13 and due to the Court’s jarring decision it seems that the Court even invalidated some of them.

“The Pennsylvania State Association of Township Supervisors was fully engaged in numerous legislative discussions and supported the zoning language during passage, until they later decided to oppose it in court. The language in dispute was crafted with their full input.

“In light of the broad severability language discussion contained in the majority opinion, there is some question whether the impact fee which has resulted in over $400 million over the past two years, will remain in place going forward.

“A reasonable level of regulatory consistency across the Commonwealth is vital to the success of any major industry or employer – however the Supreme Court failed to recognize that in their majority decision. Our fear now is that landowners and hardworking individuals will suffer because of today’s decision.”

Senate Democrats

Sen. Jay Costa (D-Allegheny), the Senate Democratic leader, offered his reaction to the decision:

“The court’s decision to overturn portions of Act 13 – those provisions that involve zoning restrictions and the community’s right to protect their own water resources – provides Pennsylvania lawmakers with a second chance to craft a better, more responsible law. This is an opportunity to revisit an issue and devise a shale drilling law that is meaningful; one that offers protections for our citizens, communities and a valuable Pennsylvania natural resource.

“While Act 13 included a wide range of subjects, it failed to institute a reasonable shale drilling tax and took too much control away from local municipalities. We left too much control in the hands of gas drilling companies and the governor was too lenient in dealing with energy companies at the expense of Pennsylvania’s citizens and our communities.

“Senate Democrats are hopeful that the governor will work with legislators on a balanced plan that includes a responsible approach to drilling restrictions and community protections.”

Earlier this year, Senate Democratic Caucus filed an amicus brief in support of overturning the blanket local zoning preemption provision and the setback requirements related to sensitive water resources in Act 13.

Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee, said in a statement--

"Today's Supreme Court decision is a significant victory for Pennsylvania's local governments, our environment and our economy – as it restores local control and gives the legislature another opportunity to maximize the economic potential of our Marcellus shale drilling industry.

"Act 13 wrongly stripped away the rights of local governments to zone industries within their municipal boundaries – and this lengthy opinion rightly restores local control and allows these local governments to have an input in protecting the environment.

"The Marcellus shale industry has the potential to change the course of Pennsylvania's economy for the next generation as long as we continue to enact smart regulations and enforce strong policies to protect our environment. It is my hope that this opinion forces the legislature's hands to seriously consider stronger environmental protections and a responsible severance tax in 2014.”

House Democrats

House Democratic Leader Frank Dermody (D-Allegheny) said, "This ruling gives us an opportunity to go back to the drawing board and do this right. We want to work with industry and environmental stakeholders to craft a law that will constitutionally protect the environment and also include a fair and reasonable severance tax on the oil and gas industry.

"Today's ruling reaffirms what House Democrats have been saying for two years – that Gov. Corbett's sham of a Marcellus Shale drilling law wrongly and unconstitutionally stripped local communities of their zoning powers. The state Supreme Court today stood up for the important principle of local control, restoring zoning authority in Pennsylvania back to residents and municipalities. It is an important victory for the environment and the communities we live in."

NewsClips:

Ruling Elevates Environmental Rights Amendment

Supreme Court Rules Municipalities Can Limit What Drillers Do

Corbett, Gas Industry Decry Court Ruling

Corbett Voices Displeasure With Gas Zoning Ruling

Supreme Court Decision Unsettles Drilling Industry

Court Sends Act 13 Doctor Gag Rule Back To Lower Court

Court Strikes Down Zoning Limits On Drilling

Court Declares Parts Of Drilling Law Unconstitutional

Court: State Can’t Make Municipalities Accept Drilling

Court Strikes Down Act 13 Local Zoning Restrictions

PA Supreme Court Jolts Shale Industry