Will Pennsylvania High Court’s Ruling Expose State’s Hydraulic Fracturing Rules to “Public Trust” Challenges?

sboxermanFeatured Expert Column

by Samuel B. Boxerman, Sidley Austin LLP

*This is Mr. Boxerman’s inaugural post as The Legal Pulse‘s Featured Expert Columnist on environmental legal and policy issues.

In Robinson Township v. Commonwealth, the Pennsylvania Supreme Court weighed in on shale gas development policy in Pennsylvania by striking down aspects of the state legislature’s revisions to the state’s oil and gas law known as “Act 13.”  As the Court did not issue a majority opinion, the precedential value of the court’s 162-page opinion remains to be seen, including whether the plurality’s reasoning on a “public trust” theory will extend to other jurisdictions.

Background – Act 13.  Over the past decade, shale oil and gas development has supported economic growth across the U.S.  Pennsylvania has been at the forefront, with production from the Marcellus Shale play.  This development has created jobs and economic growth, as well as controversy, as opponents object to costs imposed on local governments and alleged risks to the environment.  In response, some local governments have banned or otherwise restricted development.  In Pennsylvania, to preempt a growing patchwork of local rules, the legislature enacted Act 13.  The law established statewide rules, including state permits and setback requirements, while simultaneously preempting local zoning laws and other local rules that would impact such operations.  As part of this package, the legislature also imposed impact fees on developers that would be shared with localities once they adopted conforming local ordinances.

Challenge and Rulings.  Several municipalities, interest groups, and individuals challenged the law.  The Pennsylvania Commonwealth Court rejected most contentions, but held that the Act 13 provisions requiring uniformity among local ordinances regulating oil and gas development violated substantive due process.  N1 The parties cross appealed and the Supreme Court struck down portions of the Act, while remanding others.

1.  Justiciability.  A majority found the claims justiciable.  Rejecting arguments the municipalities were creatures of the state and could not contest legislative restrictions on their powers, the Court found protecting the environment was “a key part of local government’s role,” and thus a municipality had standing to protect that interest, including its “constitutional duties respecting the environment and, therefore, its interests and functions as a governing entity.”  N2

2.  Plurality opinion on core issue.  A three-Justice plurality found that Section 27 of Article I of the Pennsylvania Constitution, referred to as the Environmental Rights Amendment (ERA), imposed a fiduciary obligation on the Commonwealth, including all branches of state and local governments, to manage natural resources in “public trust.” This doctrine, the plurality found, prohibited the legislature from preempting local laws that served to protect environmental interests.  The plurality acknowledged the state constitution grants the legislature broad police powers.  N3 It reasoned, however, that those police powers are subject to “certain fundamental rights reserved to the people in Article I” of the constitution, such as the rights afforded under the ERA.  N4  Statements in the opinion suggest that in reaching this result, the plurality balanced the interests based, in part, on its view of the potential for the use of hydraulic fracturing and horizontal drilling to harm the environment.  N5  The State asked the Court to reconsider its balancing of these facts, as there was no developed evidentiary record.  N6  That is pending.

3. Concurring opinion.  Justice Baer concurred on grounds similar to the Commonwealth Court, finding that by imposing uniform requirements on local governments without recourse violated substantive due process.  He reasoned that ”once 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.”  N7

4.  Other issues and remand.   A majority of the Court ruled on various other claims, remanding Act 13 for further review by the Commonwealth Court.  N8  Moreover, while the majority found that the setback requirements would not survive its decision, it held that it was not clear whether other provisions were otherwise complete and capable of being implemented and left those to be addressed on remand.  N9  Among other issues, the lower court will need to decide the extent to which the impact fees (which have totaled more than $400 million over past two years) remain enforceable.

5.  Dissenting opinions.  Two Justices dissented, finding the legislature properly exercised its police powers, balancing competing interests.  Recognizing “municipalities are creatures” of the legislature, Justice Saylor argued the plurality “redefine[s] the role of municipalities relative to the sovereign.”  N10  As the ERA expressly directs the “Commonwealth” to be a public trustee, and as municipal power is limited to that granted by the legislature, there can be no municipal power under the ERA.  N11  Justice Eakin expressed concern that giving “standing to some 2,500 sets of local officials to sue the sovereign based on alleged violations of individual constitutional rights is misguided” and fears a “tide of mischief” will result.  N12

Conclusion.  It is difficult to predict the long term effect of this ruling.  The plurality’s decision, although not binding, could be followed by lower courts, and if the dissent’s warning proves correct, it seemingly establishes a broad right for individuals to challenge Pennsylvania rules as inconsistent with environmental interests.  More broadly, the “public trust” doctrine has been invoked in other contexts, and it remains to be seen whether this decision will prove to be an impetus to other challenges in Pennsylvania or elsewhere.

NOTES

1. Robinson Township v. Comm. of Pennsylvania, 52 A.3d 463 (2012).

2. Op. 17, 18-19, 120.  The Court also found the Riverkeeper and its director had associational standing, Op. 21-22, and rejected the argument that the challenges raised a non-justiciable political question.  See Op. 27-37.

3. Op. 65, citing Pa. Const. Art III.

4. Op. 66.

5. E.g., Op. at 118, 128.

6. http://www.pacourts.us/assets/files/setting-3255/file-3450.pdf?cb=e7bd34 (State’s brief).  The applicants’ responsive brief is available here.  http://www.pacourts.us/assets/files/setting-3255/file-3487.pdf?cb=a3f3ac.

7. Concurrence, Baer, J at 15, available at http://www.pacourts.us/assets/opinions/Supreme/out/J-127A-D-2012co.pdf?cb=1.

8. Op. at 135-160.

9. Op. at 158-160.

10. Dissent, Saylor, J. at 8, available at http://www.pacourts.us/assets/opinions/Supreme/out/J-127A-D-2012do1.pdf?cb=1.

11. Id. at 11.

12. Dissent, Eakin, J. at 6, available at http://www.pacourts.us/assets/opinions/Supreme/out/J-127A-D-2012do2.pdf?cb=1.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s