Marcellus Shale Update – The Major Issues Addressed by the Commonwealth Court on Remand of the Robinson Township Case

Following the Pennsylvania Supreme Court’s landmark plurality decision that struck down several sections of Act 13 under the Environmental Rights Amendment, Robinson Township v. Commonwealth was remanded back to the Commonwealth Court. On remand, the court reconsidered four issues raised by Act 13: (1) whether requiring DEP to notify public, but not private drinking water systems of a fracking fluid spill was unconstitutional because it created a special law or violated equal protection; (2) whether prohibiting health professionals from disclosing the chemicals added to fracking fluids and requiring the execution of confidentiality agreements violated Pennsylvania’s single subject or special law provisions; (3) whether conferring the power of eminent domain upon gas companies was unconstitutional because it permitted a taking for a “private purpose”; and (4) whether those provisions of Act 13 that authorized the Public Utility Commission (PUC) to review local zoning ordinances for compliance with Act 13 and withhold impact fees from municipalities whose ordinances are deemed non-compliant were severable from the enjoined provisions of the Act.

First, the Commonwealth Court held that notifying only public water suppliers of a potential contamination did not create an unconstitutional “special law” or violate equal protection under Pennsylvania’s Constitution. It reasoned that the General Assembly’s distinguishing public from private water suppliers was not arbitrary, but rather was rationally based on real distinctions between the two: considering that private water wells have historically been omitted from DEP regulations, it followed that requiring notice to all private well owners could prove difficult for DEP, and additionally, contamination of a private well could be remedied much easier, as opposed to large public wells that serve many residents. According to the court, these differences justified the disparate treatment of public and private water sources, and thus, such treatment did not violate equal protection or create a special law.

Second, the court held that permitting a gas production company to take private property did not violate the Pennsylvania or United States Constitutions. It noted that Act 13 only vested the power of eminent domain in a corporation empowered to “transport, sell or store natural gas” in Pennsylvania. 58 Pa. C.S. § 3214(a). Looking to other Pennsylvania law that similarly empowered public utility companies to take private property when necessary to provide a public utility, the court reasoned that furnishing natural gas to the public by a gas company possessing a “certificate of public convenience” was clearly a public purpose by a public utility company.

Third, the court held that prohibiting physicians from disclosing “proprietary” information regarding chemicals added to fracking fluids neither violated Pennsylvania’s prohibition against special laws nor the Commonwealth’s single subject rule. The court stated that just because the challenged provisions created a different set of disclosure requirements for fracking fluid chemicals, than those used in other industrial applications, does not mean that Act 13 creates a “special law,” because non-disclosure applies to all fracking companies, rather than singling out any one company. Furthermore, Act 13 does not prohibit the sharing of chemical information between doctors or including toxicity reports in medical records to diagnose patients. Additionally, the court held that such provisions regulating health professionals’ use of chemical information also did not violate Pennsylvania’s single subject rule because all of the provisions related to proprietary information regarding chemicals added to fracking fluids used in unconventional gas wells.

Finally, the court held that 58 Pa. C.S. Sections 3305 to 3309, which granted the PUC jurisdiction to review local zoning ordinances, were not severable from the sections held unconstitutional by the Supreme Court and thus were unconstitutional themselves. Most importantly, it held that §3307 (allowing the PUC to award attorney’s fees) and §3308 (allowing the PUC to withhold impact fees from municipalities whose ordinances are deemed non-compliant with Act 13) could not stand alone, outside of Act 13’s universal attempt to provide state-wide regulations to the gas industry. In short, those provisions granting the PUC jurisdiction to sanction municipalities for violating that universal scheme were so interdependent with the unconstitutional provisions that it could not be presumed that the General Assembly would grant the PUC such jurisdiction outside of that universal scheme. Removing the PUC’s jurisdiction to determine local zoning matters will result in such matters being determined by the procedures set forth in the MPC, and challenges to local ordinances will be reviewed by the common pleas courts, as was the case before Act 13. Most important to local communities is that Act 13 will no longer allow a judicial or quasi-judicial body to withhold drilling impact fees from municipalities. This is especially important as many local governments across Pennsylvania struggle to make ends meet. Now, municipalities can enact ordinances that regulate where gas drilling can occur, in accordance with their obligations to protect sensitive natural areas under the Environmental Rights Amendment, without fearing the loss of drilling impact fees that many may come to rely on to balance their budgets.

Against the backdrop of the Robinson Township decision, it has been reported that the Attorney General’s office may be investigating reports that citizens have contacted the Department of Health regarding symptoms they believe to be related to natural gas drilling but received no response from the Department. While the existence of an investigation has not been confirmed, a Department of Health spokesperson has stated that the Department responds to every complaint that it receives.

Meanwhile, Governor Corbett’s opposition to the imposition of a severance tax on natural gas drillers continues to be a major issue in the gubernatorial campaign.