Oil and Gas Developer Challenges an Extreme Waste Disposal Ordinance Enacted by a Pennsylvania Township

by BakerHostetler
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Oil and gas developer Pennsylvania General Energy Company, LLC (“PGE”) recently filed suit against Grant Township in Indiana County, Pennsylvania, alleging that a waste disposal ordinance enacted by the Township violates the United States Constitution and Pennsylvania statutes. The nationwide oil and gas boom has given rise to disputes similar to this all over the country. See our coverage of other cases addressing the authority of federal, state, and local governments to regulate oil and gas development here, here, here, here, here, here, here, and here.

Grant Township adopted an ordinance on June 3, 2014 titled “Community Bill of Rights Ordinance.” Under the Community Bill of Rights Ordinance (the “Ordinance”), it is “unlawful within Grant Township for any corporation or government to engage in the depositing of waste from oil and gas extraction.” The Ordinance provides that any “corporation or government that violates any provision of [the] Ordinance shall be… sentenced to pay the maximum fine allowable under State law for that violation.”

The Ordinance includes several extreme provisions in service of its general prohibition. For example, the Ordinance provides that permits, licenses, and other authorities issued by any state or federal government are deemed invalid within the Township to the extent they conflict with the Ordinance. The Ordinance also provides that Pennsylvania state statutes and regulations apply in Grant Township only to the extent they do not violate the Ordinance.

Corporations that violate the Ordinance are “not deemed to be ‘persons,’ nor possess any other legal rights, privileges, powers, or protections which would interfere with the rights or prohibitions enumerated by [the] Ordinance.” This includes “the power to assert state or federal preemptive laws in an attempt to overturn [the] Ordinance, and the power to assert that the people of the municipality lack the authority to adopt [the] Ordinance.”

PGE filed a complaint on August 8, 2014, asserting twelve Counts against Grant Township. PGE challenges the Ordinance on the following bases:

  1. Violation of the Supremacy Clause of the Sixth Amendment to the U.S. Constitution
  2. Violation of the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution
  3. Violation of the right to petition the government for redress of grievances under the First Amendment to the U.S. Constitution
  4. Violation of both substantive and procedural due process under the Fifth and Fourteenth Amendments to the U.S. Constitution
  5. Violation of the Contract Clause of the U.S. Constitution
  6. Impermissible exercise of police power under Pennsylvania’s Second Class Township Code
  7. Preemption by Pennsylvania’s Second Class Township Code
  8. Preemption by Pennsylvania’s Oil and Gas Act
  9. Preemption by Pennsylvania’s Limited Liability Company Law

The Ordinance was enacted in the wake of the Pennsylvania Supreme Court’s decision in Robinson v. Commonwealth of Pennsylvania, where the Court struck down a state law that required municipalities to permit oil and gas drilling in all zoning districts, including those designated exclusively for residential use. See our coverage of the Robinson case here. The Robinson decision was a big victory for Pennsylvania municipalities seeking to regulate oil and gas development. However, the provisions of the Ordinance are quite extreme, and there is good reason to believe that many, if not all, of them are unconstitutional.

The North American Shale Blog will continue to track and report on the development of this case.

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.

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