The Pennsylvania Supreme Court’s Sweeping Ruling Invalidates Act 13’s Statewide Oil and Gas Development Land Use Regime and Heralds a New Era in Pennsylvania Environmental Litigation
On December 19, the Pennsylvania Supreme Court issued its long-awaited decision in Robinson Township, et al. v. Commonwealth, 63 MAP 2012, resolving a variety of constitutional challenges to Act 13 of 2012, an amendment to the Pennsylvania Oil and Gas Act that, among other things, implemented a uniform statewide land use regime for oil and gas development. See 58 Pa. C.S. §§ 2301-3504.
In a fragmented 4-2 decision, the Court invalidated certain of Act 13’s core provisions, including notably its implementation of statewide zoning standards for oil and gas operations. The decision will dramatically impact the oil and gas industry in many ways, and assuredly will require the industry to comply with a variety of differing regulations. It may even prompt efforts by some aggressive municipalities to ban drilling altogether. The decision sweeps more broadly, however: it “constitutionalizes” local zoning and limits state legislative oversight over local land use regulation. Indeed, depending on how ensuing cases interpret broad language in the three-justice plurality opinion, the decision may greatly expand judicial review over all legislative and government actions that have any arguable impact on Pennsylvania’s natural or historical resources. In the immediate term, it will almost certainly lead to a dramatic expansion of environmental litigation, especially with respect to Marcellus and Utica Shale development, but also more broadly.
Act 13’s Imposition of Uniform Statewide Rules
One of the most dramatic economic changes of the past decade in Pennsylvania has been the development of unconventional oil and gas resources (extracted from the Marcellus Shale formation and, increasingly, from the deeper Utica Shale). Despite the rapid expansion of oil and gas development, producers frequently complained about inconsistent local approaches to oil and gas production. While the Pennsylvania Supreme Court in 2009 held that municipalities could not regulate those aspects of drilling that were already within the scope of the Oil and Gas Act (for example, by requiring a local drilling permit or bond or regulating the plugging of inactive wells), see Range Resources – Appalachia v. Salem Twp., 964 A.2d 569 (Pa. 2009), the Court also held that the Oil and Gas Act did not preempt local zoning ordinances and that local zoning ordinances could limit the location of wells to specified zones, see Huntley & Huntley v. Borough of Oakmont, 964 A.2d 855 (Pa. 2009). As a result, while municipalities could not regulate the details of drilling and production activities, they could effectively declare, on a piecemeal basis, that large tracts of the Commonwealth would be “off limits” to oil and gas activities.
Act 13 – a centerpiece of Governor Tom Corbett’s legislative agenda – was in large part an effort to address this concern and to ensure uniform treatment of oil and gas operations throughout Pennsylvania. Act 13 comprehensively amended the Oil and Gas Act, repealing parts of the Act and adding new chapters, including Chapter 32, which describes the well-permitting process and defines statewide limits on oil and gas development, and Chapter 33, which prohibits local regulation of oil and gas operations, including environmental legislation, and requires Commonwealth-wide uniformity for local zoning ordinances dealing with oil and gas. Among other things, Act 13:
- required municipal zoning ordinances to allow oil and gas wells, pipelines and impoundments in every zoning district, with setback requirements to limit production activities in high-density areas in lieu of categorical prohibitions, 58 Pa. C.S. § 3304(b)(5)-(6);
- required ordinances to allow pipeline compressor stations and natural gas processing plants in industrial and agricultural zones, subject to setback and noise restrictions, id. § 3304(b)(7)-(8);
- prohibited municipalities from treating oil and gas operations differently from other land uses, see id. § 3304(b)(2)-(3); and
- imposed limits on the amount of time local officials could take in ruling on applications (30 days for completed applications for permitted uses, and 120 days for conditional uses), id. § 3304(b)(4).
Act 13 further defined minimum setback requirements, limiting oil and gas operations near streams and wetlands, id.; see also § 3215(b)(1)-(3)), but also gave the Department of Environmental Protection (DEP) the authority to waive these distance restrictions if the operator identified additional measures, facilities or practices to protect the waters of the Commonwealth, id. § 3215(b)(4). The stated purpose of Act 13 is to “permit optimal development of oil and gas resources of this Commonwealth” while at the same time protecting “natural resources, environmental rights and values secured by the Constitution of Pennsylvania.” 58 Pa. C.S. § 3202.
The Commonwealth Court’s Ruling
Act 13, although welcomed by oil and gas operators, was controversial from the outset, and almost immediately drew constitutional challenges from a variety of sources. This suit was brought by seven municipalities and municipal officials objecting to the override of local zoning ordinances, the Delaware Riverkeeper Network and its appointed “riverkeeper,” and a physician complaining about restrictions on the disclosure of the constituents of proprietary well stimulation fluids. It was filed in the first instance in the Pennsylvania Commonwealth Court, a specialized court with statewide trial and appellate jurisdiction over (among other things) actions against the Commonwealth.
The plaintiffs argued that Act 13 violated the Pennsylvania Constitution, and in particular those provisions of the Constitution relating to the inherent rights of mankind, eminent domain and natural resources, among others. The plaintiffs also argued that Act 13 violated the separation of powers doctrine and the due process clause of the United States Constitution. The matter proceeded on an expedited track: the plaintiffs moved for summary relief, and the Commonwealth filed preliminary objections and a cross-motion for summary relief.
The Commonwealth Court – by a 4-3 majority – held Act 13 unconstitutional in part and enjoined application of certain sections of Chapter 32 and Chapter 33. Robinson Twp. v. Commonwealth, 52 A.3d 463 (2012). In particular, the Commonwealth Court found that Act 13’s statewide land use regime violated principles of substantive due process secured by the Pennsylvania and United States Constitutions because the Act required local governments to amend existing zoning ordinances without regard for basic zoning principles, and thus (in the Commonwealth Court’s view) “allows incompatible uses in zoning districts and does not protect the interests of neighboring property owners from harm, alters the character of the neighborhood, and makes irrational classifications.” 52 A.3d at 485.
The Commonwealth Court also unanimously held that Section 3215(b)(4), empowering the DEP to grant variances from stream and wetland buffer zone requirements, unconstitutionally delegated to DEP the authority to make legislative policy judgments reserved to the General Assembly, in that it failed to provide sufficient direction to guide DEP’s decision-making. Id. at 490-93. The Commonwealth Court rejected the remaining challenges to other aspects of Act 13. Of special relevance, in light of the Supreme Court’s ultimate holding, the Commonwealth Court held that Act 13 did not violate Article I, Section 27 of the Pennsylvania constitution, which guarantees the “right to clean air, pure water, and . . . the preservation of the natural, scenic, historic and esthetic values of the environment,” and which obligates the Commonwealth to “conserve and maintain them for the benefit of all the people.” Id. at 488-89.
Three judges dissented, believing that the majority opinion wrongly “reaches a legal conclusion that any zoning ordinance that allows a particular use in a district that is incompatible with the other uses in that same district is unconstitutional.” Id. at 496 (Brobson, J., dissenting). To the dissenting judges, “[t]he desire to organize a municipality into zones made up of compatible uses is a goal, or objective, of comprehensive planning” but “it is not an inflexible constitutional edict.” Id. In short, the dissent acknowledged that the plaintiffs “have legitimate concerns and questions about Act 13,” but believed that “it is not our role to pass upon the wisdom of a particular legislative enactment.” Id. at 498. 
The Commonwealth (including the Attorney General, the Public Utility Commission and the Department of Environmental Protection) and the plaintiffs all cross-appealed, each side challenging those portions of the judgment on which it did not prevail. The matter was promptly accepted for review, and was briefed and argued in less three months after the Commonwealth Court’s decision. More than a year passed before the Supreme Court rendered its ruling, however.
The Supreme Court’s Ruling
The 4-2 decision repudiated the Commonwealth’s position at almost every turn, affirming the Commonwealth Court’s view that Act 13’s statewide zoning rules were unconstitutional.  The majority split 3-1 on the fundamental rationale, however, leaving no majority opinion articulating a consistent view of the constitutional limitations on the Commonwealth’s authority.
The 162-page lead opinion on the issue, written by Chief Justice Ronald Castille, spoke for only a plurality of three justices. Chief Justice Castille, joined by Justices Debra Todd and Seamus McCaffery, viewed the overarching issue in the case as “an asserted vindication of citizens’ rights to quality of life on their properties and in their hometowns, insofar as Act 13 threatens degradation of air and water, and of natural, scenic and esthetic values of the environment, with attendant effects on health, safety, and the owners’ continued enjoyment of their private property.” Slip op. at 57. Accordingly, the plurality found that the plaintiffs’ claims primarily implicated the Environmental Rights Amendment of the Pennsylvania Constitution, Article I, Section 27, which provides “a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment,” declares that “Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come,” and obligates the Commonwealth “[a]s trustee of these resources” to “conserve and maintain them for the benefit of all the people.” Id.; Pa. Const. art. I § 27.
The plurality recognized that there was little precedent for such a view, slip op. at 71, 105, and acknowledged that the parties’ arguments on the issue were not thoroughly developed, id. at 57. Nonetheless, the plurality articulated a sweeping view of the Commonwealth’s obligations, and citizens’ rights, under the Environmental Rights Amendment:
- Contrary to suggestions in prior decisions, the amendment does not serve merely as a source of authority to justify legislative action, but affirmatively creates “an obligation on the government’s behalf to refrain from unduly infringing upon or violating the right, including by legislative enactment or executive action.” Id. at 74; see also id. at 86.
- The amendment “requires each branch of government to consider in advance of proceeding the environmental effect of any proposed action on the constitutionally protected features. Id. at 74 (emphasis added).
- The amendment’s “constitutional obligation binds all government, state and local, concurrently,” id. at 75, and the General Assembly therefore “has no authority to remove a political subdivision’s implicitly necessary authority to carry into effect its constitutional duties,” id. at 120.
- The amendment is self-executing, id. at 98 n.52, creating “a constitutional right personal to each citizen,” id. at 73 n.39; see also id. at 115, that is enforceable by the courts, id. at 75-76.
- The amendment was intended to be “a bulwark against actual or likely degradation,” id. at 77, and “would permit not only reactive but anticipatory protection of the environment for the benefit of present and future generations,” id. at 95 (emphasis added).
- The constitutionality of a particular governmental action under the amendment “is a quintessentially local issue that must be tailored to local conditions,” and “cannot reasonably be assessed on the basis of a statewide average.” Id. at 124.
While the plurality opinion did note that the economic well-being of citizens is also a legitimate state interest, it concluded that “economic development cannot take place at the expense of an unreasonable degradation of the environment” and that the Commonwealth’s police power must be exercised to promote sustainable property use and economic development. Id. at 79.
Against this standard, the plurality found the Commonwealth’s accommodation of oil and gas development to be unconstitutional. The plurality’s view of oil and gas development was neither subtle nor secreted: the plurality compared the extraction of oil and gas from the Marcellus Shale to the timber industry’s deforestation of Pennsylvania and to the “devastating” and “shortsighted” environmental and health effects of the formerly unregulated coal industry, and found that “development of the natural gas industry in the Commonwealth unquestionably has and will have a lasting, and undeniably detrimental, impact on the quality of . . . core aspects of Pennsylvania’s environment.” Id. at 117.
Despite the fact that the record in the case was compiled in the context of an expedited and summary process, and consisted principally of aggrieved landowners’ anecdotal accounts offered by affidavit, the plurality articulated the following conclusion, an act of appellate fact-finding of startling breadth on an issue that is in fact the subject of considerable debate:
By any responsible account, the exploitation of the Marcellus Shale Formation will produce a detrimental effect on the environment, the people, their children, and future generations, and potentially on the public purse, potentially rivaling the environmental effects of coal extraction.
Id. at 118. 
Accordingly, the plurality concluded that Section 3303, imposing statewide environmental regulation of oil and gas, undid existing environmental protections in certain localities and therefore violated the Environmental Rights Amendment. Id. at 122. In examining Section 3304, the Court struck down Act 13’s allowance of industrial oil and gas operations “as of right” throughout every zoning district in the Commonwealth, including residential, commercial and agricultural districts, finding it irreconcilable with the Constitution’s mandate that the Commonwealth act as the trustee of public lands. Id. at 125-28. Last, the Court examined Section 3215(b)(4) and 3215(d), governing mandatory setbacks from waterways and the DEP’s authority to grant waivers upon an appropriate showing. Id. at 129. The Court found that these provisions also violated the Environmental Rights Amendment. The Court thus enjoined application and enforcement of these Sections. Id. at 161. The Court further found that certain remaining parts of Act 13 were not severable, because they implement or enforce the enjoined portions of the Act, and thus also enjoined their application or enforcement. Id.
Justice Max Baer concurred, but would have affirmed on the same ground cited by the Commonwealth Court, opining that the statewide zoning provisions offended principles of substantive due process. Unlike the Commonwealth Court, however, Justice Baer would also have invalidated Section 3215(b)(4)’s stream setback waiver as a violation of substantive due process as well.
Finally, all four justices in the majority joined in overturning all but one of the Commonwealth’s victories below:
- The Court overturned the Commonwealth Court’s dismissal of the claim that Act 13 was an unconstitutional “enactment of special laws” in violation of Article III, Section 32 of the Pennsylvania Constitution. See slip op. at 132-41.
- The Court held that the plaintiffs’ challenge to Act 13’s eminent domain provisions did not need to be brought in the context of a condemnation, but could be challenged now through a declaratory judgment proceeding. See id. at 141-45.
- The Court held that the physician plaintiff did have standing to challenge Act 13’s restrictions on the disclosure of chemicals used in well fracturing. See id. at 23-27.
(In the Commonwealth’s lone victory, the Court upheld the provisions allowing the Public Utility Commission to issue orders or advisory opinions determining whether municipal ordinances violate Act 13. See id. at 145-58. Given that the principal land use regulations in Act 13 are now void, however, that authority may now be illusory.)
The Supreme Court then remanded the matter to the Commonwealth Court to address these remaining issues and to consider whether any remaining portions of Act 13, to the extent they are valid, are severable. Id.
The Dissenting Opinions
Justice Thomas Saylor, joined by Justice J. Michael Eakin, dissented. (Justice Eakin also wrote a brief separate dissenting opinion.) They expressed, in general, four broad reservations about the majority’s view, and the lead plurality opinion in particular:
- First, the dissenters believed that the majority improperly substituted its views on a matter of public policy for those of the General Assembly, which “possesses superior resources for information-gathering, debate and deliberation in the policymaking arena,” contrary to the admonition that the “court must take special care to avoid substituting their own policy preferences for those of the political branch.” Slip op. at 6 (Saylor, J., dissenting).
- Second, they believed that the plurality “appears to completely redefine the role of municipalities relative to the sovereign,” even though the Court in the past “consistently recognized that municipalities are creatures of the General Assembly.” Id. at 8.
- Third, they criticized the plurality for “hypothesizing an unreasonably deleterious impact of Act 13 on the environment” – a “non-record-based portrayal of Act 13’s impact” that was “without a shred of evidentiary support.” Id. at 9.
- Fourth, as Justice Eakin noted, the dissenters were concerned that “the sweeping, general and necessarily aspirational terms on which the holding is based are too broad and insufficiently defined to provide meaningful guidance in the future.” Slip op. at 6 (Eakin, J., dissenting).
McGuireWoods’ Preliminary Analysis
Given the lack of a majority on the key substantive issue presented in Robinson Township, and the length of the lead opinion, the ultimate impact of the decision, while far-reaching, remains uncertain. In many ways – as we said with respect to the Commonwealth Court’s opinion in the case – this decision raises more questions than it answers. The decision could perhaps be seen as the sui generis expression of the policy preferences of the majority in unique circumstances (a hostility to oil and gas development coupled with a romantic view of municipal decision-making), a position that the Supreme Court is not likely to extend in future disputes that come before it – an oil-and-gas law analogue to Bush v. Gore, as it were. At the same time, the decision – the plurality in particular – speaks in extraordinarily broad and general terms. Despite the uncertainties surrounding the decision, however, some significant implications can be gleaned.
As an initial matter, the decision will undoubtedly have substantial impacts upon the regulation of, and development of, oil and gas production throughout the Commonwealth:
- Statewide oil and gas land use regulation is, for all practical purposes, now impossible. In light of the Court’s broad pronouncements about the need for local control in zoning – whether driven by the Environmental Rights Amendment or principles of substantive due process – it may be difficult for any effort to regulate oil- and gas-related land uses on a statewide basis to pass constitutional muster. As a result, oil and gas developers need to be prepared to address wide variations in land use regulation from municipality to municipality.
- Municipal regulation of oil and gas operations may be stricter. Further, with a “free pass” to regulate land uses related to oil and gas development, municipalities whose populace (or the leading political faction thereof) is hostile to oil and gas development may be emboldened to impose further restrictions, ranging from onerous limitations to outright bans. As a result, it is foreseeable that oil and gas development, at least in some locales, will become more expensive or practically impossible.
- Other oil and gas regulations may be open to challenge. If the plurality opinion is carried forward by a Court majority in subsequent cases, other aspects of oil and gas regulation that appear well-settled may be open to question. For example, as noted above, the Court had previously held that municipalities cannot regulate matters that are already within the scope of the Oil and Gas Act. See Range Resources – Appalachia v. Salem Twp., 964 A.2d 569 (Pa. 2009). Now, however, the viability of this decision may be in doubt. In light of the broad standing given to municipalities to challenge state regulations that they believe affect municipal residents, the potentially broad scope of judicial authority under the plurality’s construction of the Environmental Rights Amendment, and the Court’s emphasis on the importance of local environmental standards, the industry may find all aspects of statewide oil and gas regulation subject to attack on the ground that those regulations are insufficiently protective of the environment or local prerogatives. Even if those attacks do not succeed, they provide municipalities and citizens with the ability to delay substantially the progress of oil and gas exploration and development, as they bring challenges that have to work themselves through the court system, and will certainly increase the cost and burden through litigation.
- The Supreme Court appears to be an unfriendly venue for the oil and gas industry, and lower courts may feel constrained to follow suit. Some of the language in the plurality opinion would appear to reflect a deep-seated hostility toward oil and gas development. On a record that is thin at best, three of the Court’s justices reached out to stake a definitive position on a controversial issue on which there is vigorous debate and disagreement among scientists and laymen alike. If members of the Court are willing to say that “any responsible account” of oil and gas development shows that it “will produce a detrimental effect on the environment,” then it is reasonable to conclude that they will likely withhold support for the industry in other contexts. Further, the plurality’s sweeping language may make it difficult for lower courts to resolve close questions in favor of oil and gas producers. In short, the condemnatory language in the plurality opinion may have the effect of putting a thumb on the scales of justice, to the detriment of the oil and gas industry.
The Court’s reasoning is not limited to the oil and gas industry, however. The broad language in the plurality opinion may well have effects on virtually anything that involves land use or that has any measurable (or even arguable) impact on environmental, natural, scenic, historic and esthetic values:
- Local zoning now appears to have a constitutional dimension. The Commonwealth Court decision appears to have recognized, for the first time, a constitutional right to retain a particular zoning classification, enforceable by municipalities and landowners. Under the court’s rationale, it is difficult to see how zoning classifications could ever be loosened to allow more intense land uses, so long as a judge could conclude that the new land use is “incompatible” with what came before. While the plurality did not rely on that rationale, it did not reject it either, and there are aspects of the decision that suggest that the plurality may be sympathetic to the concept. After all, zoning in almost every case is presented as an attempt to protect environmental, scenic or (at a minimum) esthetic values. As such, local zoning arguably falls within the ambit of the Environmental Rights Amendment. The fact that the plurality emphasized citizens’ “reasonable expectations” arising out of existing zoning restrictions – a concept on which the Commonwealth Court also relied – heightens that likelihood. And of course, Justice Baer explicitly recognized that zoning is a “constitutionally ordained mandate” with “constitutional underpinning,” and that municipalities have a “constitutional duty to preserve the character of neighborhoods” and “to enforce ordered zoning.” Slip op. at 8, 10, 12, 15-16 (Baer, J., concurring). As a result, after this ruling, it is not clear that the General Assembly could mandate (for example) fair housing or medical care facilities in all districts. Indeed, although the Court contended otherwise, this rationale suggests that the General Assembly, having given municipalities the right to enact zoning ordinances, cannot withdraw that authorization without violating the constitution.
- Municipal authority now appears to be ascendant. Under the rationales articulated by the four-justice majority, the relationship between the Commonwealth and its political subdivisions appears to have been fundamentally altered. While the plurality gives lip service to the concept that “political subdivisions are creations of the state with no powers of their own,” and that the General Assembly has the authority to alter or remove any powers granted . . . by statute upon municipalities,” slip op. at 119-20, the decision nonetheless gives municipalities rights (and indeed, arguably, obligations) that are separate from and perhaps inconsistent with those of the General Assembly that has spawned them. By allowing municipalities to bring suit against the Commonwealth, and by giving them a co-equal role in enforcing the protections of the Environmental Rights Amendment (even as against the Commonwealth), the ruling effectively gives municipal government an independent status as a co-equal sovereign. As a result, municipalities may now be able to enforce their own parochial preferences, with constitutional imprimatur, even if those narrow local interests are harmful to the best interests of the Commonwealth as a whole. 
- There may now be a broad “constitutional tort” claim available to challenge any act (or omission) that could have an arguable past, present or future environmental or esthetic impact. If the plurality’s construction of the Environmental Rights Amendment is adopted by a majority of the Court, there is now a cause of action available broadly to all citizens, allowing them to seek relief to “vindicate” the rights granted by Article I, Section 27. Under the plurality’s reasoning, any action by the Commonwealth or its subdivisions can be subject to challenge if it threatens the values promoted by the Environmental Rights Amendment. And even in the absence of governmental action, private action can be tied up in litigation on the ground that the government, by failing to prevent it, has run afoul of the amendment. Even if the Supreme Court as a whole is not inclined to sanction such an expansion of litigation, it may be some time before that becomes clear, an interval in which lower courts may permit such claims to proceed.
- There may now be a constitutionally based and judicially imposed “environmental impact assessment” requirement. The plurality, as noted, construes the Environmental Rights Amendment to “require . . . government to consider in advance the environmental effect of any proposed action,” including not only the “actual” but also the “likely degradation.” Slip op. at 74, 77. This statement, taken at face value, arguably requires – as a constitutional prerequisite – that any executive, legislative or administrative action be preceded by an assessment of its likely environmental impact. As a result, the Pennsylvania Supreme Court may now have imposed, by judicial fiat, a process akin to those required by the National Environmental Policy Act, the New York State Environmental Quality Review Act or the California Environmental Quality Act. Moreover, if that turns out to be the case, the Court would have mandated pre-development environmental impact assessments without providing any guidance as to how they are to be conducted.
In short, while the ultimate impact of the Supreme Court’s decision remains to be determined, it is clear that there is enough in it to ensure that there will be years of costly and time-consuming litigation to flesh out the full contours of the principles it articulates. Any citizen, municipality or group that claims to be aggrieved by an act or omission with arguable environmental, natural, scenic, historic and esthetic impact may now seek judicial relief under the Environmental Rights Amendment to the Pennsylvania Constitution. While the impact on Pennsylvania’s oil and gas industry is most immediate and most immediately harmful, the decision sweeps more broadly and may – depending on how it is interpreted by lower courts and ensuing Supreme Court decisions – have a substantially harmful effect on Pennsylvania’s economy and society as a whole.