In the latest chapter of the saga surrounding the legal challenges to the sweeping 2012 amendments to Pennsylvania’s Oil and Gas Act, otherwise known as Act 13, on Wednesday the Supreme Court of Pennsylvania again struck down a number of provisions of the beleaguered statute.
First, the Supreme Court found that Sections 3305 through 3309 of Act 13, which granted either the Public Utilities Commission (“PUC”) or the Commonwealth Court the authority to review challenges to local ordinances directed at the oil and gas industry, were not severable from other Act 13 provisions that were originally designed to provide state-wide standards for such local ordinances, but subsequently found unconstitutional. As a result, any claim that a local ordinance affecting the oil and gas industry violates the Municipal Planning Code must use the process in place before Act 13 was enacted, i.e., challenges brought before local governing bodies or the courts of common pleas.
The Supreme Court next turned to Sections 3222.1(b)(10) and 3222.1(b)(11) of Act 13, which required operators, vendors and service providers to supply trade secret information to health professionals about hydraulic fracturing fluids in a medical emergency or when such information was needed for the purpose of diagnosis or treatment. The health professional, in turn, was required to agree (either verbally or in writing) to keep the information confidential. The Supreme Court enjoined enforcement of these provisions, concluding that they amounted to “special laws” that provided a unique benefit to the oil and gas industry, and as such, violated Article III, Section 32 of the Pennsylvania Constitution.
Along similar lines, the Supreme Court held that Section 3218.1 of Act 13, which required the Department of Environmental Protection (“DEP”) to notify public water facilities—but not private well owners—of spills from oil and gas operations that threaten water supplies, also amounted to a “special law” because it unjustifiably distinguished between public and private wells. While the Supreme Court strongly signaled that the solution was for DEP to be required to notify both public and private well owners and operators, it declined to rewrite the section. Instead, the Supreme Court stayed the mandate on Section 3218.1 for 180 days to give the General Assembly an opportunity to enact “remedial legislation.”
Lastly, the Supreme Court struck down Section 3241 of Act 13, which granted eminent domain powers to private corporations empowered to transport, sell or store gas or manufactured gas in Pennsylvania for the purpose of underground gas storage. On this issue, the Supreme Court held that while Section 3241 paralleled the statutory standard used by the PUC to deem companies to qualify as public utilities, the absence of certain language found in the Public Utility Code caused the provision to amount to the taking of private property for a private purpose and therefore violated the 5th amendment of the U.S. Constitution and Article I, Section 10 of the Pennsylvania Constitution.
Notably, in Wednesday’s opinion the Supreme Court explicitly declined an invitation to revisit and “disavow” its reasoning in a previous plurality opinion that a number of Act 13 provisions violated the Environmental Rights Amendment at Article I, Section 27 of the Pennsylvania Constitution. Thus, clarification of that issue by the Supreme Court will need to wait for another day.
More fallout from this opinion will likely unfold over the next few weeks, and additional analyses of the decision will be posted as appropriate on the MGKF Litigation blog at: http://www.mgkflitigationblog.com/.