Earlier this year, we reported in our Client Alert dated January 15, 2014, on the Pennsylvania Supreme Court’s decision in Robinson v. Commonwealth of Pennsylvania, 83 A.3d 901 (Pa. 2013). In Robinson, the Supreme Court struck down as unconstitutional provisions of Act 13 that required municipalities to adopt uniform zoning requirements that could allow drilling in all zoning districts. In so ruling, the Robinson court found that the disputed provisions of Article 13 violated the Environmental Rights Amendment in that it removed from Pennsylvania’s municipalities the right to be stewards over natural resources within their own borders. By way of background, Act 13 repealed Pennsylvania’s Oil and Gas Act and replaced it with a new framework, which was challenged as unconstitutional. The Pennsylvania Supreme Court previously found in Robinson that the portion of Act 13 that required municipalities to adopt uniform zoning ordinances was unconstitutional.
The Supreme Court also remanded the case back to the Pennsylvania Commonwealth Court for further rulings on the constitutionality of provisions of Act 13:
Overview of the Commonwealth Court Decision
On July 17, 2014, a majority of the Pennsylvania Commonwealth Court issued a decision ruling on the constitutionality of these provisions, the details of which are summarized below.
Issue 1: Requiring notice only to public, but not to private, drinking water systems when there is a spill.
The Court found this provision of Act 13 constitutional. The basis for this ruling was that the Commonwealth of Pennsylvania has a “legitimate interest in protecting the public water supply by ensuring that any public drinking water facilities that could be affected by a spill or contamination are notified of the event and any expected impact on water quality.” Moreover, private water supplies are not regulated by the Department of Environmental Protection (DEP), and the distinction between private and public water supply “is a reasonable classification related to the legitimate state interest promoted” by Act 13.
Issue 2: Conferring power of eminent domain to a corporation that transports, sells or stores natural gas.
Concerning the issue of eminent domain, and Act 13 permitting a corporation to acquire property for a non-public purpose of “injecting, storing, and removing natural gas,” the Commonwealth Court found this provision constitutional. The Court ruled that this particular eminent domain power was limited to only those corporations “empowered to transport, sell or store natural gas in this Commonwealth….” The Court rejected additional arguments stating that Act 13 “only confers upon a public utility possessing a certificate of public convenience the power to condemn property for the injection, storage and removal of natural gas for later public use.”
Issue 3: Prohibiting health professionals from disclosing to others the amount of hydraulic fracturing additives received from drilling companies.
On the third issue, the Court stated that Act 13 requires that operators give to the DEP “completion reports,” which are filed with DEP within 30 days after a well is prepared for production of oil and gas, and uniformly requires “operators, service companies, or vendors” to “disclose chemical additives used to fracture unconventional wells to the public within 60 days of completion….” The Court further stated that while the Act refers to confidentiality agreements, “there is no indication in the statute that such agreement precludes a physician from … including such information in a patient’s records.” Therefore, nothing precluded doctors from considering such confidential information in the patient’s treatment or sharing such information with other medical providers, particularly because records cannot be released without a patient’s request. The Commonwealth Court rejected other arguments made on this subject.
Issue 4: Authorizing the PUC to review local zoning ordinances and to withhold impact fees from local governments with ordinances that don't comply with Act 13.
On this issue, the Court observed: "Apparently acceding to the oil and gas industry's claims that local ordinances tailored to local conditions were purportedly impeding their oil and gas development and that a uniform law was necessary, the General Assembly enacted Act 13, which contained a number of provisions requiring local governments to enact uniform zoning provisions and preempted them from enacting any other laws that dealt directly with oil and gas operations.” However, in view of the Supreme Court’s ruling “declaring all the substantive provisions [in Act 13] unconstitutional and unenforceable” the Commonwealth Court held that this “statutory scheme cannot be implemented.”
The Commonwealth Court noted that the drilling industry will now have to take their claims to the state's common pleas courts:
Local zoning matters will now be determined by the procedures set forth under the [Municipalities Planning Code] and challenges to local ordinances that carry out a municipality’s constitutional environmental obligations. Because challenges to those ordinances must be brought in common pleas court, it would further frustrate the purpose of the Act in having a uniform procedure.
The Commonwealth Court has left important sections of Act 13 intact by continuing to (1) limit confidential information for treatment of patients affected by spills and incidents as a result of the fracking industries and (2) require notification to the public about spills affecting public water supplies. In addition, preserving eminent domain powers for public utilities in limited instances helps businesses in this field. Striking down the PUCs’ powers to review local municipalities’ ordinances is entirely consistent with the Supreme Court’s decision in Robinson. The courts of common pleas may, consistent with this ruling, hear cases involving such municipal ordinances at the local level, before local judges.
In our view, the most immediate impact of the Commonwealth Court’s ruling is to eliminate the PUCs’ role in reviewing local ordinances, and if local ordinances did not comply, to deny impact fee money. Local zoning matters will be determined locally in a Court of Common Pleas. Therefore, one of the main goals of Act 13 for uniformity of zoning ordinances has been eliminated as unconstitutional.