December 23, 2013
On December 19, the Pennsylvania Supreme Court issued its long-awaited decision in Robinson Township, et al. v. Commonwealth, 63 MAP 2012, resolving a variety of constitutional challenges to Act 13 of 2012, an amendment to the Pennsylvania Oil and Gas Act that, among other things, implemented a uniform statewide land use regime for oil and gas development. See 58 Pa. C.S. §§ 2301-3504.
In a fragmented 4-2 decision, the Court invalidated certain of Act 13’s core provisions, including notably its implementation of statewide zoning standards for oil and gas operations. The decision will dramatically impact the oil and gas industry in many ways, and assuredly will require the industry to comply with a variety of differing regulations. It may even prompt efforts by some aggressive municipalities to ban drilling altogether. The decision sweeps more broadly, however: it “constitutionalizes” local zoning and limits state legislative oversight over local land use regulation. Indeed, depending on how ensuing cases interpret broad language in the three-justice plurality opinion, the decision may greatly expand judicial review over all legislative and government actions that have any arguable impact on Pennsylvania’s natural or historical resources. In the immediate term, it will almost certainly lead to a dramatic expansion of environmental litigation, especially with respect to Marcellus and Utica Shale development, but also more broadly.
Act 13’s Imposition of Uniform Statewide Rules
One of the most dramatic economic changes of the past decade in Pennsylvania has been the development of unconventional oil and gas resources (extracted from the Marcellus Shale formation and, increasingly, from the deeper Utica Shale). Despite the rapid expansion of oil and gas development, producers frequently complained about inconsistent local approaches to oil and gas production. While the Pennsylvania Supreme Court in 2009 held that municipalities could not regulate those aspects of drilling that were already within the scope of the Oil and Gas Act (for example, by requiring a local drilling permit or bond or regulating the plugging of inactive wells), see Range Resources – Appalachia v. Salem Twp., 964 A.2d 569 (Pa. 2009), the Court also held that the Oil and Gas Act did not preempt local zoning ordinances and that local zoning ordinances could limit the location of wells to specified zones, see Huntley & Huntley v. Borough of Oakmont, 964 A.2d 855 (Pa. 2009). As a result, while municipalities could not regulate the details of drilling and production activities, they could effectively declare, on a piecemeal basis, that large tracts of the Commonwealth would be “off limits” to oil and gas activities.
Act 13 – a centerpiece of Governor Tom Corbett’s legislative agenda – was in large part an effort to address this concern and to ensure uniform treatment of oil and gas operations throughout Pennsylvania. Act 13 comprehensively amended the Oil and Gas Act, repealing parts of the Act and adding new chapters, including Chapter 32, which describes the well-permitting process and defines statewide limits on oil and gas development, and Chapter 33, which prohibits local regulation of oil and gas operations, including environmental legislation, and requires Commonwealth-wide uniformity for local zoning ordinances dealing with oil and gas. Among other things, Act 13:
Act 13 further defined minimum setback requirements, limiting oil and gas operations near streams and wetlands, id.; see also § 3215(b)(1)-(3)), but also gave the Department of Environmental Protection (DEP) the authority to waive these distance restrictions if the operator identified additional measures, facilities or practices to protect the waters of the Commonwealth, id. § 3215(b)(4). The stated purpose of Act 13 is to “permit optimal development of oil and gas resources of this Commonwealth” while at the same time protecting “natural resources, environmental rights and values secured by the Constitution of Pennsylvania.” 58 Pa. C.S. § 3202.
The Commonwealth Court’s Ruling
Act 13, although welcomed by oil and gas operators, was controversial from the outset, and almost immediately drew constitutional challenges from a variety of sources. This suit was brought by seven municipalities and municipal officials objecting to the override of local zoning ordinances, the Delaware Riverkeeper Network and its appointed “riverkeeper,” and a physician complaining about restrictions on the disclosure of the constituents of proprietary well stimulation fluids. It was filed in the first instance in the Pennsylvania Commonwealth Court, a specialized court with statewide trial and appellate jurisdiction over (among other things) actions against the Commonwealth.
The plaintiffs argued that Act 13 violated the Pennsylvania Constitution, and in particular those provisions of the Constitution relating to the inherent rights of mankind, eminent domain and natural resources, among others. The plaintiffs also argued that Act 13 violated the separation of powers doctrine and the due process clause of the United States Constitution. The matter proceeded on an expedited track: the plaintiffs moved for summary relief, and the Commonwealth filed preliminary objections and a cross-motion for summary relief.
The Commonwealth Court – by a 4-3 majority – held Act 13 unconstitutional in part and enjoined application of certain sections of Chapter 32 and Chapter 33. Robinson Twp. v. Commonwealth, 52 A.3d 463 (2012). In particular, the Commonwealth Court found that Act 13’s statewide land use regime violated principles of substantive due process secured by the Pennsylvania and United States Constitutions because the Act required local governments to amend existing zoning ordinances without regard for basic zoning principles, and thus (in the Commonwealth Court’s view) “allows incompatible uses in zoning districts and does not protect the interests of neighboring property owners from harm, alters the character of the neighborhood, and makes irrational classifications.” 52 A.3d at 485.
The Commonwealth Court also unanimously held that Section 3215(b)(4), empowering the DEP to grant variances from stream and wetland buffer zone requirements, unconstitutionally delegated to DEP the authority to make legislative policy judgments reserved to the General Assembly, in that it failed to provide sufficient direction to guide DEP’s decision-making. Id. at 490-93. The Commonwealth Court rejected the remaining challenges to other aspects of Act 13. Of special relevance, in light of the Supreme Court’s ultimate holding, the Commonwealth Court held that Act 13 did not violate Article I, Section 27 of the Pennsylvania constitution, which guarantees the “right to clean air, pure water, and . . . the preservation of the natural, scenic, historic and esthetic values of the environment,” and which obligates the Commonwealth to “conserve and maintain them for the benefit of all the people.” Id. at 488-89.
Three judges dissented, believing that the majority opinion wrongly “reaches a legal conclusion that any zoning ordinance that allows a particular use in a district that is incompatible with the other uses in that same district is unconstitutional.” Id. at 496 (Brobson, J., dissenting). To the dissenting judges, “[t]he desire to organize a municipality into zones made up of compatible uses is a goal, or objective, of comprehensive planning” but “it is not an inflexible constitutional edict.” Id. In short, the dissent acknowledged that the plaintiffs “have legitimate concerns and questions about Act 13,” but believed that “it is not our role to pass upon the wisdom of a particular legislative enactment.” Id. at 498. [1]
The Commonwealth (including the Attorney General, the Public Utility Commission and the Department of Environmental Protection) and the plaintiffs all cross-appealed, each side challenging those portions of the judgment on which it did not prevail. The matter was promptly accepted for review, and was briefed and argued in less three months after the Commonwealth Court’s decision. More than a year passed before the Supreme Court rendered its ruling, however.
The Supreme Court’s Ruling
The 4-2 decision repudiated the Commonwealth’s position at almost every turn, affirming the Commonwealth Court’s view that Act 13’s statewide zoning rules were unconstitutional. [2] The majority split 3-1 on the fundamental rationale, however, leaving no majority opinion articulating a consistent view of the constitutional limitations on the Commonwealth’s authority.
The 162-page lead opinion on the issue, written by Chief Justice Ronald Castille, spoke for only a plurality of three justices. Chief Justice Castille, joined by Justices Debra Todd and Seamus McCaffery, viewed the overarching issue in the case as “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.” Slip op. at 57. Accordingly, the plurality found that the plaintiffs’ claims primarily implicated the Environmental Rights Amendment of the Pennsylvania Constitution, Article I, Section 27, which provides “a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment,” declares that “Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come,” and obligates the Commonwealth “[a]s trustee of these resources” to “conserve and maintain them for the benefit of all the people.” [3] Id.; Pa. Const. art. I § 27.
The plurality recognized that there was little precedent for such a view, slip op. at 71, 105, and acknowledged that the parties’ arguments on the issue were not thoroughly developed, id. at 57. Nonetheless, the plurality articulated a sweeping view of the Commonwealth’s obligations, and citizens’ rights, under the Environmental Rights Amendment:
While the plurality opinion did note that the economic well-being of citizens is also a legitimate state interest, it concluded that “economic development cannot take place at the expense of an unreasonable degradation of the environment” and that the Commonwealth’s police power must be exercised to promote sustainable property use and economic development. Id. at 79.
Against this standard, the plurality found the Commonwealth’s accommodation of oil and gas development to be unconstitutional. The plurality’s view of oil and gas development was neither subtle nor secreted: the plurality compared the extraction of oil and gas from the Marcellus Shale to the timber industry’s deforestation of Pennsylvania and to the “devastating” and “shortsighted” environmental and health effects of the formerly unregulated coal industry, and found 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 . . . core aspects of Pennsylvania’s environment.” Id. at 117.
Despite the fact that the record in the case was compiled in the context of an expedited and summary process, and consisted principally of aggrieved landowners’ anecdotal accounts offered by affidavit, the plurality articulated the following conclusion, an act of appellate fact-finding of startling breadth on an issue that is in fact the subject of considerable debate:
By any responsible account, the exploitation of the Marcellus Shale Formation will produce a detrimental effect on the environment, the people, their children, and future generations, and potentially on the public purse, potentially rivaling the environmental effects of coal extraction.
Id. at 118. [4]
Accordingly, the plurality concluded that Section 3303, imposing statewide environmental regulation of oil and gas, undid existing environmental protections in certain localities and therefore violated the Environmental Rights Amendment. Id. at 122. In examining Section 3304, the Court struck down Act 13’s allowance of industrial oil and gas operations “as of right” throughout every zoning district in the Commonwealth, including residential, commercial and agricultural districts, finding it irreconcilable with the Constitution’s mandate that the Commonwealth act as the trustee of public lands. Id. at 125-28. Last, the Court examined Section 3215(b)(4) and 3215(d), governing mandatory setbacks from waterways and the DEP’s authority to grant waivers upon an appropriate showing. Id. at 129. The Court found that these provisions also violated the Environmental Rights Amendment. The Court thus enjoined application and enforcement of these Sections. Id. at 161. The Court further found that certain remaining parts of Act 13 were not severable, because they implement or enforce the enjoined portions of the Act, and thus also enjoined their application or enforcement. Id.
Justice Max Baer concurred, but would have affirmed on the same ground cited by the Commonwealth Court, opining that the statewide zoning provisions offended principles of substantive due process. Unlike the Commonwealth Court, however, Justice Baer would also have invalidated Section 3215(b)(4)’s stream setback waiver as a violation of substantive due process as well.
Finally, all four justices in the majority joined in overturning all but one of the Commonwealth’s victories below:
(In the Commonwealth’s lone victory, the Court upheld the provisions allowing the Public Utility Commission to issue orders or advisory opinions determining whether municipal ordinances violate Act 13. See id. at 145-58. Given that the principal land use regulations in Act 13 are now void, however, that authority may now be illusory.)
The Supreme Court then remanded the matter to the Commonwealth Court to address these remaining issues and to consider whether any remaining portions of Act 13, to the extent they are valid, are severable. Id.
The Dissenting Opinions
Justice Thomas Saylor, joined by Justice J. Michael Eakin, dissented. (Justice Eakin also wrote a brief separate dissenting opinion.) They expressed, in general, four broad reservations about the majority’s view, and the lead plurality opinion in particular:
McGuireWoods’ Preliminary Analysis
Given the lack of a majority on the key substantive issue presented in Robinson Township, and the length of the lead opinion, the ultimate impact of the decision, while far-reaching, remains uncertain. In many ways – as we said with respect to the Commonwealth Court’s opinion in the case – this decision raises more questions than it answers. The decision could perhaps be seen as the sui generis expression of the policy preferences of the majority in unique circumstances (a hostility to oil and gas development coupled with a romantic view of municipal decision-making), a position that the Supreme Court is not likely to extend in future disputes that come before it – an oil-and-gas law analogue to Bush v. Gore, as it were. At the same time, the decision – the plurality in particular – speaks in extraordinarily broad and general terms. Despite the uncertainties surrounding the decision, however, some significant implications can be gleaned.
As an initial matter, the decision will undoubtedly have substantial impacts upon the regulation of, and development of, oil and gas production throughout the Commonwealth:
The Court’s reasoning is not limited to the oil and gas industry, however. The broad language in the plurality opinion may well have effects on virtually anything that involves land use or that has any measurable (or even arguable) impact on environmental, natural, scenic, historic and esthetic values:
In short, while the ultimate impact of the Supreme Court’s decision remains to be determined, it is clear that there is enough in it to ensure that there will be years of costly and time-consuming litigation to flesh out the full contours of the principles it articulates. Any citizen, municipality or group that claims to be aggrieved by an act or omission with arguable environmental, natural, scenic, historic and esthetic impact may now seek judicial relief under the Environmental Rights Amendment to the Pennsylvania Constitution. While the impact on Pennsylvania’s oil and gas industry is most immediate and most immediately harmful, the decision sweeps more broadly and may – depending on how it is interpreted by lower courts and ensuing Supreme Court decisions – have a substantially harmful effect on Pennsylvania’s economy and society as a whole.
NOTES:
1. Under the Commonwealth Court’s internal operating procedures, only seven of the nine judges heard the case “en banc.” One of the remaining judges who had not participated in the argument adopted the dissent’s view, and the other did not participate. As a result, the case was effectively decided by a 4-4 “majority.”
2. As an aside, there was initial speculation that the decision had been delayed because the six members of the Court at argument (three Democrats and three Republicans) had divided equally and were awaiting the appointment of a seventh justice to break the tie. The ultimate decision, however, refuted that speculation: Chief Justice Castille joined the three Democratic justices, and newly appointed Justice Correale Stevens did not participate in the decision. The delay, it now appears, was likely a consequence of the length and scope of the plurality opinion.
3. There is no federal constitutional analogue, and only Montana and Rhode Island have explicitly enacted similar clauses. See slip op. at 93.
4. The sweeping generalization of this finding of fact is particularly noteworthy given that it sprang from the pen of Chief Justice Castille, a decorated war veteran and former district attorney who is usually viewed as one of the Court’s more conservative voices.
5. Indeed, the majority opinions have, at their core, a tacit romantic notion of municipal decision-making. They overlook the mischief that municipal governments – particularly in the area of land use planning and regulation – can and do create in pursuit of narrow or parochial goals, and the considerable harm unrestrained municipal authority can have on the broader general welfare. Those concerns are particularly significant given that Pennsylvania has one of the most balkanized systems of local governments in the nation – a warren of boroughs and townships, each now with the apparent constitutional authority, in effect, to do as it pleases in the land use arena, with only limited state oversight or control, regardless of its impact on the Commonwealth as a whole.