Marcellus Shale Update
The Pennsylvania Supreme Court on December 19, 2013, issued its widely anticipated decision in the case of Robinson Township, et al v. Commonwealth of Pennsylvania, et al. This decision has sent shockwaves through the natural gas and oil industry and has been enthusiastically received by environmental rights organizations as well as municipal officials. While the full impact of the decision is yet to be seen, perhaps the most significant part of the decision for municipalities was the Supreme Court’s declaration of the unconstitutionality of Section 3304 of Act 13, which required municipalities to adopt uniform zoning ordinances that would allow drilling in all zoning districts and preempted any municipal regulations to the contrary.
The Supreme Court affirmed a deeply split Commonwealth Court which ruled that the Act 13 requirement that municipalities bring their zoning ordinances into compliance with the statute forced local governments to violate substantive due process by allowing incompatible uses in their district, including residential districts. While four of the six Supreme Court Justices ruled that Section 3304 of Act 13 is unconstitutional, only one of them, Justice Max Baer, based his decision on substantive due process grounds. The other three Justices ruled that Section 3304 violated the Environmental Rights Amendment to the Pennsylvania State Constitution, which provides that the “Commonwealth” has an obligation to deter actions of private parties that are likely to harm the environment and public natural resources. Justices Castille, Todd and McCaffrey interpreted the word “Commonwealth” to encompass state and local government, to wit municipalities. They held that the uniform scheme under Section 3304 is unconstitutional because the Legislature cannot take from local government and assign to the state the duty to act as a trustee to preserve the public natural resources. The Justices specifically noted that the Environmental Rights Amendment establishes two essential constitutional rights in the people of the Commonwealth: (1) the right of citizens to clean air and pure water, and to the preservation of natural, scenic, historic and aesthetic values of the environment; and (2) the common ownership of the people, including future generations, to Pennsylvania’s public natural resources. Surprisingly, only Justice Baer agreed with the majority of the Commonwealth Court that the Legislature, by enacting Act 13, had usurped the duty of local municipalities to impose and enforce community planning and the concomitant reliance by property owners, citizens and others on such community planning.
The Supreme Court’s decision effectively restores the state of the law as it existed prior to the adoption of Act 13 under the Oil and Gas Act. While the Supreme Court has previously held that municipalities cannot constitutionally enact ordinances that solely regulate or discriminate against the oil and gas industry, the Court has held that municipalities may validly use zoning ordinances to restrict oil and gas operations in certain areas pursuant to their inherent power to protect the health, safety and public welfare. The logical consequence of the Supreme Court decision will be the prohibition of oil and gas drilling in residential type districts and the requirement that the oil and gas companies satisfy specified criteria of either a conditional use or special exception proceeding, thus affording municipalities a greater degree of control over where and how the oil and natural gas drilling activities are conducted.
It is also likely that the Robinson Township decision will have farther reaching effects, including, for example, challenges to the ability of municipalities to regulate uses such as billboard advertising on solely environmental or aesthetic grounds.