Pa. Supreme Court strikes down as unconstitutional key provisions in Oil and Gas Act

By Jon Campisi | Dec 27, 2013

In a ruling that could have widespread implications for natural gas drilling

in the state, Pennsylvania’s highest court has ruled that parts of the Oil and Gas Act, including a provision that places zoning limitations on localities, run afoul of the commonwealth’s constitution.

In a 162-page ruling issued on Dec. 19, the Supreme Court determined that the law, also known as Act 13, contains several unconstitutional provisions, not the least of which is the aspect restricting municipalities from enacting zoning measures that would bar natural gas drilling from taking place within their borders.

The plaintiffs in the litigation included Robinson Township, Washington County, which is located in the western part of the state, and Nockamixon Township, Bucks County, a municipality in southeastern Pennsylvania.

Defendants in the case included the Commonwealth of Pennsylvania, the state’s Public Utility Commission, the Pennsylvania Attorney General’s Office and the Pennsylvania Department of Environmental Protection.

The majority in the 4-2 decision, who were Chief Justice Ronald Castille and Justices Max Baer, Debra Todd and Seamus McCaffery, determined that the state legislature was wrong to bar municipalities from regulating natural gas activities within their borders through the use of zoning restrictions.

The high court also determined that the law is unconstitutional because it violates the commonwealth’s Environmental Rights Amendment, which states that “the people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and aesthetic values of the environment.”

The decision also restores standing to a doctor named Mehernosh Khan who wanted to challenge a “medical gag” provision in the law, but was told he couldn’t do so by the Commonwealth Court, a lower-tier appellate body.

The high court wrote that Khan stated a justifiable claim; it remanded his claim to the Commonwealth Court for resolution on the merits.

Khan is challenging an aspect of the legislation that prevents doctors from telling patients about the health dangers related to hydraulic fracturing, a process to extract natural gas from shale rock.

The provision specifically enables gas drilling companies to give physicians information on chemical additives only if the doctor agrees to execute a confidentiality agreement.

The Supreme Court’s decision was hailed by some and panned by others.

“The ruling dismantles part of a carefully crafted compromise that has funneled additional dollars to municipalities, protected the environment and provided uniform standards for the natural gas industry to follow,” Gene Barr, president of the Pennsylvania Chamber of Business and Industry, said in a statement. “We are disappointed that the state Supreme Court decided to strike down the openness and clarity that was achieved through this landmark law.”

The Chamber was one of a number of statewide business groups and local chambers of commerce who filed amicus briefs urging the high court to keep Act 13 intact.

The Chamber’s brief stressed that the disputed aspects of the law, which was designed to give oversight to natural gas drilling in the Marcellus Shale geological formation, achieved a “proper balance between state and local government; and that uniformity of local regulations is central to protecting human health and the environment while allowing the tremendous economic potential of the Marcellus Shale to be fully realized,” reads a Chamber news release.

“The broader implications of the Supreme Court’s ruling remain unknown, but the Pennsylvania Chamber remains committed to working with the natural gas industry and with elected officials to arrive at solutions that will best serve municipalities across Pennsylvania and sustain the record levels of job growth and economic opportunity we’ve achieved through Marcellus Shale development,” Barr, the Chamber’s president, said in his statement.

Gov. Tom Corbett said he is disappointed in the decision.

“The Act was crafted with strong input and support from Pennsylvania’s local government organizations,” the governor said in a statement. “We must not allow today’s ruling to send a negative message to job creators and families who depend on the energy industry.”

Maya van Rossum, of the Delaware Riverkeeper Network, praised the justices for a ruling her organization views as protective of the citizenry.

“The Court has vindicated the public’s right to a clean environment and our right to fight for it when it is being trampled on,” van Rossum said in a statement. “Today the environment and the people of Pennsylvania have won and special interests and their advocates in Harrisburg have lost.

“This proves the Constitution still rules, despite the greedy pursuits of the gas and oil industry,” she continued. “With this huge win we will move ahead to further undo the industry’s grip or our state government.”

Jordan Yeager, a suburban Philadelphia attorney working with the Delaware Riverkeeper Network, called the high court’s ruling a “great historic victory for local democracy, for public health, and for the health of our environment.”

The lawyer said natural gas industry players “overreached, greedily wanting to operate without respecting local concerns and without playing by the same set of rules everyone else has to play by.”

“The Corbett Administration and the General Assembly went along with it and tried to give away our rights to the gas industry,” Yeager said in a statement.

The high court, just as it did with Khan, the doctor, reversed the Commonwealth Court’s finding that the Delaware Riverkeeper Network lacked standing in the case.

In its decision, the court determined that the DRN’s members engendered a “substantial and direct interest in the outcome of the litigation.”

The justices also found van Rossum could sue in her official capacity to represent the membership’s interests.

In the decision, Chief Justice Castille wrote that, “we agree with the citizens that, as an exercise of the police power, Sections 3215(b)(4) and (d), 3303, and 3304 are incompatible with the Commonwealth’s duty as trustee of Pennsylvania’s public natural resources.”

The chief justice, along with fellow Justices Todd and McCaffrey, agreed that the uniform zoning provisions under Section 3304 of the Oil and Gas Act “sanctioned a direct and harmful degradation of the environmental quality of life in these communities and zoning districts.”

Back in July, the Commonwealth Court declared the zoning provisions in the law unconstitutional, null, void and unenforceable.

As for the high court restoring standing to Khan, the doctor, the justices wrote that the law put the physician in the awkward position of violating the statute’s confidentiality agreement and “violating his legal and ethical obligations to treat a patient by accepted standards, or not taking a case and refusing a patient medical care.”

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