The Oil and Gas Addendum

On February 21, 2014, the Supreme Court of Pennsylvania declined to reconsider its landmark decision of December 19, 2013, invalidating several provisions of Act 13 on the grounds that various provisions of the amendments to the Oil and Gas Act, including provisions preempting local zoning restrictions, are an unconstitutional transgression of the obligation to protect environmental rights conferred under Article I, § 27 of the Pennsylvania Constitution. Robinson Township v. Commonwealth of Pennsylvania, 2013 Pa. LEXIS 3068.

Act 13 amended the Oil and Gas Act in several critical respects. Specifically, it preempted local zoning of oil and gas operations and imposed a requirement for statewide uniformity of local zoning ordinances regarding oil and gas operations. Municipalities, an individual, and a citizens group challenged Act 13 as unconstitutional on due process grounds for violating separation of powers, and for violating the Environmental Rights Amendment, Article I, Section 27 of the Pennsylvania Constitution (“ERA”), which provides the people a “right to clean air, pure water, and to the preservation of the natural, scenic, historic and aesthetic values of the environment” and states that “as trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all people.” Id. The Commonwealth argued that Act 13 is constitutional in its entirety and that it had legitimately exercised its police power when implementing the new Act 13 provisions. Commonwealth Court invalidated those provisions on substantive due process grounds, rejecting the Article I, § 27 argument.

A splintered Supreme Court agreed that the central provisions of Act 13 superceding zoning and imposing standard requirements on oil and gas operations were constitutionally infirm. Three Justices determined that those provisions of Act 13 violated the ERA. In a remarkable and unprecedented application of the ERA, the majority opinion found that the ERA grants rights to Pennsylvania’s citizens for clean air and water that limits the state’s power to act contrary to those rights. The majority found that the ERA is self-effectuating and imposes on all branches of the Commonwealth, including municipalities, obligations and rights to protect the environment in their actions. Recognizing that the rights conferred by the ERA are on par with other enumerated rights, such as the right to use and enjoy property, the majority breathed life into the ERA finding that economic development cannot take place at the expense of unreasonable degradation of the environment. The majority also found that the Commonwealth’s function as trustee of the public’s natural resources, such as air, water and wildlife, imposes a fiduciary obligation to refrain from action unreasonably degrading the environment. The majority concluded that it had an obligation to vindicate the rights of Pennsylvania’s citizens made plain under the ERA.

Applying its view of the ERA, the Court held that Section 3303 of Act 13, which attempted to preempt municipalities from regulating the oil and gas industry in any form, violated the ERA by removing from municipalities the obligation imposed by the ERA to protect natural resources and it forced municipalities to undo existing protections of the environment already in place through zoning. “The police power, broad as it may be, does not encompass such authority to so fundamentally disrupt these expectations respecting the environment. ”

As to Section 3304, the majority found it unconstitutional because the requirement that local governments ignore existing zoning classifications and allow oil and gas industrial operations in all zoning districts violated the trustees duty to “maintain” resources of the Commonwealth “for the benefit of all people,” including future generations. Id. at 212. The Commonwealth had argued that citizens would have energy and economic benefits from the extraction of shale gas and that the provision would prevent a patchwork of local zoning ordinances that would inhibit the growth of oil and gas operations. The majority concluded that Section 3304 would harm protected areas with the negative effects of oil and gas operations and would result in disparate impacts on the populace because certain landowners would be unfairly subject to oil and gas operations on their property.

Finally, the majority found that the provision of various setbacks in Section 3215(b) was unconstitutional because it allowed the state to grant waivers for the setbacks without any ability for appeal and without adequate standards to guide the exercise of discretion.

Justice Baer concurred in the result, agreeing with Commonwealth Court that the subject provisions violated substantive due process, and but declined to adopt the majority’s application of the ERA. In dissent, Justice Saylor chastised the majority for embarking upon its own course, not developed below, to reach “broadscale pronouncements” that amounted to social policymaking by the judiciary inconsistent with the great deference given the political branch. He questioned the validity of the majority’s view that municipalities have powers co-extensive with those of the General Assembly which created them. Similarly, Justice Eakin, also in dissent, criticized the majority’s conference on municipalities of the right and obligation to enforce individual constitutional rights and for administering policy rather than assuring constitutional compliance.