Commonwealth Court Rejects Constitutional Challenge to Natural Gas Production on State-Owned Lands and Use of Lease Funds in General Budget

by Buchanan Ingersoll & Rooney PC

The Commonwealth Court of Pennsylvania has dismissed a lawsuit filed by the Pennsylvania Environmental Defense Foundation (PEDF) to declare unconstitutional and enjoin natural gas extraction from State park and forest land. PEDF also sought to stop the Legislature from using monies generated from mineral leases for purposes other than conservation.

PEDF’s claims were based on Article I, Section 27 of the Pennsylvania Constitution (the Environmental Rights Amendment), and the Pennsylvania Supreme Court’s discussion of that provision in Robinson Township v. Commonwealth (2013). PEDF asserted that extraction of natural gas from State lands causes immediate and long-term negative impacts to public natural resources held in trust for Pennsylvania citizens. Citing Robinson Township, PEDF argued that by allowing natural gas production on and under State lands, the Commonwealth violated its constitutional duty to protect those natural resources.

Pennsylvania has been leasing State lands for mineral extraction since 1947. Since 1955, rents and royalties obtained from the Commonwealth’s leasing program were deposited into the Oil and Gas Lease Fund and used for conservation, recreation, dams and flood control. Before the advent of shale gas development, annual revenues were about $2.7 million. But since 2009, the Commonwealth’s oil and gas lease program has generated over $500 million in new revenue.

In recent years, the General Assembly has transferred some of this revenue from the Oil and Gas Lease Fund to the General Fund to address budgetary needs, while continuing to adequately fund conservation and environmental programming. PEDF argued that the money generated from the Commonwealth’s oil and gas lease program is part of a public trust constitutionally protected by the Environmental Rights Amendment. According to PEDF, the Legislature is constitutionally required to use these trust funds solely for conservation and may not redirect it to other budgetary needs.

The Commonwealth Court considered PEDF’s case en banc: the panel consisted of seven judges rather than three as is customary. In its unanimous decision, the court rejected PEDF’s far-reaching constitutional arguments and denied all of its claims.

The court summarily dismissed PEDF’s claims relating to past and current leasing of State lands for gas extraction. First, PEDF seeks to extinguish the contractual rights of the leaseholders who paid for the right to conduct gas production operations on or under State lands, but PEDF did not make those leaseholders parties to the case. Because the leaseholders’ rights are so connected with PEDF’s claims, they are indispensable parties, and the court determined that it could not act in their absence.

Second, the court did not accept PEDF’s maximalist interpretation of the Environmental Rights Amendment and its aggressive use of the Robinson Township plurality decision. Rather, the Commonwealth Court noted that the rights and duties conferred by the Environmental Rights Amendment are balanced by other legitimate state interests, such as sustainable property use and economic development. The court also noted that because the plurality decision in Robinson Township did not command a clear majority, the Supreme Court’s treatment of Article I, Section 27 in that case is persuasive only to the extent it is consistent with existing precedent on the same subject. This means the balancing test established in the 1973 case Payne v. Kassab remains viable and controlling.

The Commonwealth Court’s rejection of PEDF’s constitutional theory regarding the meaning and scope of the Environmental Rights Amendment is perhaps the most significant aspect of the decision.

Finally, the court refused to second-guess the Legislature’s fiscal decisions with respect to budget priorities and the sources and uses of Commonwealth funds. Without a clear constitutional limitation on the use of monies generated by the State’s oil and gas leasing program, the Legislature remains free to make funding decisions without judicial oversight.

PEDF has indicated its intention to appeal the Commonwealth Court’s decision to the Pennsylvania Supreme Court.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Buchanan Ingersoll & Rooney PC | Attorney Advertising

Written by:

Buchanan Ingersoll & Rooney PC

Buchanan Ingersoll & Rooney PC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.