The Act 13 decision: A setback for setbacks?

In writing that Act 13 violated the Environmental Rights Amendment to the Pennsylvania Constitution, did the Supreme Court actually harm the government’s ability to protect the environment? That is the contradictory narrative being spun by some who apparently disagree with the Court’s ruling in Robinson Township.

When the Pennsylvania Supreme Court struck down subsection 3215(b)(4) of Act 13 – the part of the law that allowed the Department of Environmental Protection (DEP) to waive setback protections for streams and wetlands based on a plan submitted by the operator -- it also enjoined the DEP from enforcing the setback requirements that are found in another subsection of 3215(b). The Court reasoned that the waiver and setback requirements were intended to be a “package deal.” “It would appear that the General Assembly did not intend for the setback provision to operate without allowing industry operators to secure waivers from the setbacks.” Because the setback protections were not legally “severable” from the invalid waiver provision, the Supreme Court enjoined DEP from applying any portion of section 3215(b).

It would be inappropriate, and violate the fundamental basis of Justice Castille’s “pioneering” opinion, for the government to conclude that it lacked authority to protect waters of the Commonwealth because of the Robinson Township decision.

It is important to emphasize that the Court found nothing repugnant about the setback protections in the law. The Court held that the law gave DEP too much discretion to waive the requirements without adequate guidance on doing away with the protections. Any suggestion that wells should now be permitted without adequate buffers to protect streams would directly contradict the rationale behind the Court’s opinion.

DEP retains authority under the Oil and Gas law to enact regulations addressing appropriate setback protections for streams and wetlands. Section 3274 expressly provides the Environmental Quality Board with express authority to promulgate regulations under the law. This provisions was not affected by the Court's decision. With the legislature already indicating its intent to establish minimum setback protections, the DEP could use this authority to propose regulations for EQB adoption that would establish setback protections consistent with the General Assembly’s intent.

In addition, DEP has both the authority and obligation under the Clean Streams Law to take a variety of actions, including putting conditions in permits, which would protect Pennsylvania’s streams and wetlands. Indeed, under certain circumstances such as in special protection watersheds, it would violate the federal Clean Water Act for DEP to issue permits that would not protect the existing water quality of streams and wetlands.

As Justice Castille wrote, Article I, Section 27 “requires each branch of government to consider in advance of proceeding the environmental effect of any proposed action,” and it imposes on the Commonwealth “a duty to refrain from permitting or encouraging the degradation, diminution, or depletion of public natural resources.” If anything would be an affront to the Court's ruling, it would be for DEP to use the ruling as a basis for issuing permits that fail to ensure protection of the resources that it holds in trust for this and future generations.

DEP has not announced how it intends to evaluate permit applications in light of the Supreme Court's Robinson Township decision. What should be clear, however, is that even without section 3215(b) of Act 13, DEP has ample authority to require that oil and gas development activities be planned and conducted in a manner that fully protects the waters of the Commonwealth.

Mark Szybist is a staff attorney in PennFuture's Wilkes-Barre office. He specializes in oil and gas issues.

Standing tall: Act 13 decision affirms ability of environmental groups to challenge regulations.

It isn’t the sexiest holding to come from the Pennsylvania Supreme Court’s decision in Robinson Township v. Commonwealth of Pennsylvania, but environmental advocates should nonetheless take note of the Supreme Court’s analysis of the Delaware Riverkeeper Network’s standing in the case.

An important aspect of affirmative environmental litigation is establishing standing necessary to participate in the case. To establish standing, a plaintiff must be able to demonstrate, among other things, that it has “a substantial, direct and immediate interest in the outcome of the litigation.”Fumo v. City of Philadelphia, 972 A.2d 487, 496 (Pa. 2009).

The Commonwealth Court held in Robinson Township that the injuries alleged by Delaware Riverkeeper and its Executive Director, Maya van Rossum, were not sufficiently direct or immediate to confer standing.

On appeal, however, the Pennsylvania Supreme Court reversed the Commonwealth Court’s standing analysis and delivered a victory to environmental advocates. With respect to the Delaware Riverkeeper Network, the Court held that the group had established associational standing, because its members are “likely to suffer considerable harm” to home values and property enjoyment as a result of the oil and gas operations that either have been established or are likely to be established as a result of zoning changes mandated by Act 13. Robinson Township v. Commonwealth of Pennsylvania, J-127A-D-2012, Opinion at 21-22 (Pa. 2013). The Court cited the “serious risk of alteration in the physical nature of their respective political subdivisions and the components of their surrounding environment” as the basis for the environmental group’s standing. Id. The Court further held that Ms. Van Rossum had standing in her capacity as Executive Director of the Delaware Riverkeeper Network.

By affirming that the "likely" harm from "likely" natural gas operations is not too remote a harm to confer standing, the Supreme Court has confirmed the importance of allowing groups to prevent harms to the environment before they happen, rather than reacting to damage after the fact.

Michael Helbing is a staff attorney in PennFuture's Philadelphia office.

Act 13 case: More to come.

In its recent decision in Robinson Township v. Pennsylvania, a plurality of the Pennsylvania Supreme Court made some decisive proclamations in declaring certain portions of Act 13 unconstitutional. But the Court’s decision also left a number of significant issues undecided by “remanding” several issues to the Commonwealth Court – i.e., finding that the Commonwealth Court had decided those issues incorrectly and sending them back (with instructions) – for the Commonwealth Court to re-decide.

• One of the most significant issues remanded to the Commonwealth Court involves “severability.” When parts of a statute have been struck down, severability enables the remaining portions of the statute to remain and continue as law. In this case, the question is whether the portions of Act 13 not declared unconstitutional remain valid law in the absence of the unconstitutional sections. Pennsylvania law creates a presumption in favor of severability, but it allows judges to declare an entire statute unconstitutional if the remaining portions of the law “are so essentially and inseparably connected with, and so depend upon, the void provision or application, that it cannot be presumed the General Assembly would have enacted the remaining valid provisions without the void one” or “are incomplete and are incapable of being executed in accordance with the legislative intent.” 1 Pa.C.S. § 1925. The Supreme Court’s decision in Robinson Township determined that certain otherwise valid provisions of Act 13 – e.g., section 3215(b), which establishes gas well setbacks from streams and wetlands – were not severable from the unconstitutional provisions, and therefore had to be struck down with them. But, it directed the Commonwealth Court to consider more carefully the broader issue of the severability of the rest of Act 13. This could be a difficult issue for the Commonwealth Court, and it is worth following closely. If the Commonwealth Court ultimately decides that the remaining portions of Act 13 are not severable, the entire act would be struck down – even if no further provisions are deemed unconstitutional.

• The Pennsylvania Supreme Court also remanded the claims of Dr. Mehernosh Khan, who challenged the portion of Act 13 that requires physicians treating patients sickened by fracking fluids to sign a confidentiality agreement in order to obtain the chemical composition of those fluids. Contrary to the Commonwealth Court’s initial holding, the state Supreme Court determined that Dr. Khan was an appropriate person to raise the claim (i.e., had “standing”), and instructed the Commonwealth Court to evaluate Dr. Khan’s claim on the merits.

• Finally, the Supreme Court directed the Commonwealth Court to reconsider the plaintiffs’ claims – initially rejected by the Commonwealth Court – that Act 13 is unconstitutional as a “special law” and an unlawful “taking” of private property. Article III, Section 32 of the Pennsylvania Constitution prohibits “special laws” that apply too narrowly to a particular person or group of people and are not generally applicable, and both the Pennsylvania and United States Constitutions prohibit the government from unlawfully taking private property for private uses.

Considering the stakes of this litigation, it is possible (even likely) that the Commonwealth Court’s resolution of some of these issues will be appealed by one or both parties back to the Pennsylvania Supreme Court. Bottom line: this decision is already a landmark case, but stay tuned. There could be even more excitement to follow.

Michael Helbing is a staff attorney in PennFuture's Philadelphia office.

Playing ping pong with important issues: Where is Governor Corbett on forced pooling?

The Pennsylvania Environmental Hearing Board issued a decision yesterday rejecting the Corbett administration's attempt to have the EHB decide whether a gas company could use forced pooling in the Utica Shale formation.

Forced Pooling
"Pooling" enables companies to combine adjacent tracts of leased land into one unit from which they can develop the gas. "Forced pooling" generally allows a company to access minerals beneath private property even if the landowner opposes drilling, and without having to independently reach a financial agreement with a willing landowner. Many, including Governor Corbett, have described "forced pooling" as "private eminent domain" because it allows the company to forcibly take away one of the bundle of rights commonly associated with private property ownership.

The Pennsylvania Oil and Gas Conservation Law is a 50-year-old statute that was enacted before horizontal drilling made development of the Marcellus and Utica Shale economically feasible. The Conservation Law only applies to wells that penetrate the Onondoga formation - which lies beneath the Marcellus and above the Utica Shale. Before drilling a well that penetrates the Onondoga, gas drillers must obtain a permit from the Department of Environmental Protection (DEP). Once a well has been drilled into the Onondoga, the operator can apply for a well spacing order from the DEP, which has the ability to limit wells that will be located in the spacing unit within a ten-square-mile area.

The Conservation Law further allows that when a spacing unit includes multiple real estate parcels that are owned separately, the owners may voluntarily integrate their parcels for the purpose of developing the resources within the unit. But if the landowners do not reach a voluntary agreement, "an operator having an interest in the spacing unit" can apply for an integration order with "terms and conditions that are just and reasonable." In other words, for wells that penetrate the Onondoga such as Utica Shale wells, the Conservation Law seemingly allows companies to obtain government orders that require "forced pooling" of parcels within the unit.

DEP Sends Hilcorp To The EHB
In July 2013, Hilcorp Energy Company submitted an application to DEP asking it for a well spacing order regarding the Utica Shale formation for 3,267 acres in Lawrence and Mercer counties – all but 35 acres of which the company has under lease. Hilcorp's request included a forced pooling order regarding the 35 acres of private property that the company does not have under lease. But the Corbett administration apparently wanted nothing to do with it, as its DEP directed the company to apply to the Environmental Hearing Board for relief instead.


The EHB Punts It Back To DEP
At DEP's direction, Hilcorp filed an application to the EHB either for a well spacing order under the Conservation Law, or an order requiring DEP to act on its application. On Wednesday, the EHB rejected DEP's arguments that it, and not the agency, had the responsibility for making forced pooling decisions. Judge Mather's stinging concurrence described the DEP's position as "Orwellian" and counter to the agency's forty-two year history of implementing the Conservation Law. Though the EHB directed Hilcorp to file its application with the DEP, it stopped short of an order directing DEP to act on the application.

Corbett's Next Move
It is understandable why the administration sought to avoid its responsibilities under the Conservation Law. Gov. Corbett has been, at best, inconsistent on forced pooling.  On the one hand, he made public statements opposing the very concept, calling it "private eminent domain." And yet, in July he signed a bill that allowed companies to force pooling on property owners where the companies hold leases that did not otherwise give them that right. In that instance, the administration seemed completely ignorant that the law takes away the right of property owners to negotiate a fair price for the company to pool the mineral rights - the very definition of "forced pooling."

So the question is, what is the administration's next move? Does it direct the DEP to do its job under the Conservation Law? Does it appeal the EHB's decision? Does it enlist the legislature to amend the Conservation Law? Or does it try to find another governmental agency other than the EHB that will make the decision?

Stay tuned. Forced pooling is back in the news and its not likely to go away anytime soon.

The devil in chapter 78

Last year, Governor Corbett signed into law Act 13 of 2012, the first comprehensive revision of Pennsylvania’s oil and gas law since 1984.

Soon – perhaps as early as Friday – the Pennsylvania Environmental Quality Board (EQB) will seek public comment on the first major revisions of Pennsylvania’s oil and gas well regulations (which are set forth at 25 Pa. Code Chapter 78) since 1989. The revisions run to some 74 pages.

Generally speaking, Pennsylvania environmental law takes two forms: (1) statutes like Act 13, which are passed by the General Assembly and signed into law by the governor; and (2) regulations, which are promulgated by the EQB, a special governmental body whose sole function is to establish regulations for the Department of Environmental Protection (DEP). Though not technically considered laws, terms and conditions set forth in permits issued by DEP constitute a third variety of enforceable standards and restrictions.

Statutes are the broad strokes of the law – detailed in places, but typically rich in ambiguities and gaps, often due to legislative compromise. Regulations “implement” statutes by clarifying ambiguities and filling gaps; they are the tools that state agencies use to give effect to the statutes they administer. Permit terms apply statutes and regulations to particular activities.

The purpose of the upcoming Chapter 78 revisions is twofold: First, to implement Act 13, and second, to codify a number of regulatory approaches that the DEP has so far implemented only through permit terms, such as design and construction standards for centralized wastewater impoundments.

In the coming weeks, this blog will return to parts of the Chapter 78 revisions that merit particular public attention and comment. We all know who skulks in the details.

U.S. Supreme Court to Review EPA Greenhouse Gas Permitting Requirements for Industrial Facilities

On Tuesday, the United States Supreme Court agreed to consider challenges to the Environmental Protection Agency's (EPA) application of Clean Air Act permitting requirements to greenhouse gas emissions from stationary sources.

The six petitions for certiorari invited the Court to take up a long list of issues, including the extent of EPA’s authority to regulate greenhouse gas emissions.
The Supreme Court, however, limited its review to a single question: “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

Although the Supreme Court’s decision to consider this issue could potentially be a setback for EPA’s ability to regulate greenhouse gas emissions from certain industrial facilities, the limited scope of the Court’s review means that much of the agency’s efforts to curb greenhouse gas emissions will remain unaffected. For example, the Supreme Court is NOT reviewing EPA’s determinations that:

• Greenhouse gases may be regulated as a pollutant under the Clean Air Act;

• Greenhouse gases are a threat to public health (Endangerment Finding); and

• Regulation of vehicle tailpipe pollution is appropriate under the Clean Air Act (Tailpipe Rule).

The sole issue before the Court will be whether EPA’s regulation of greenhouse gases from vehicles automatically triggers permitting requirements for stationary sources under other provisions of the Clean Air Act.

Under the Clean Air Act, any facility considered a “major emitting facility” that undergoes construction or modification must obtain a permit and install the “best available control technology” (BACT) for any pollutant subject to regulation under the Act. 42 U.S.C. § 7475(a). A “major emitting facility” is defined in the Act as a stationary source that may emit a threshold amount of “any air pollutant.” 42 U.S.C. § 7479(1).

EPA interprets “any air pollutant” to mean “any air pollutant regulated under the Clean Air Act.” Thus, under EPA’s reasoning, once EPA began regulating greenhouse gases as air pollutants for new motor vehicles, all stationary sources that had the potential to emit the threshold amount of greenhouse gases would be required to install BACT and apply for a permit.

The D.C. Circuit Court of Appeals considered this issue in its 2012 decision in Coalition for Responsible Regulation, Inc., et al., v. United States Environmental Protection Agency, 684 F.3d 182 (D.C. Cir. 2012), and upheld EPA’s interpretation of the Clean Air Act, holding that the text of the statute was unambiguous and "compelled" EPA’s interpretation. The Supreme Court will now review this aspect of the decision. Oral arguments are likely to be held in early 2014, and a decision is expected by June 2014.

Although the Court’s decision to review this single issue is concerning, it is important to recognize that, regardless of the outcome of the Supreme Court case, important programs for reducing greenhouse gas emissions will remain in place.

VICTORY: Bringing a water supply to a polluted town

This post is one in a month-long series speaking to 15 of PennFuture's significant victories. It was 15 years ago this September that we began our work to protect the environment and champion a clean energy economy.

For decades, citizens in one of the poorest areas of Butler County had lived with the remains of its industrial past. A chemical plant had dumped hazardous substances into ravines throughout the community, contaminating the public drinking water supply and many private water wells in and around the town of Petrolia.
 
Despite requests from local residents, both the U.S. Environmental Protection Agency and the Pennsylvania Department of Environmental Protection (DEP) failed to take action against the company responsible for the contamination, or even investigate the full extent of groundwater contamination in the community.
 

Frustrated by 20 years of official inaction, local citizens formed a group to look for legal assistance. Their search led them to the California law firm that employed Erin Brockovich as an investigator, and though that firm would not take the case, it suggested that the group contact a local nonprofit known as PennFuture. The group reached out, and PennFuture staff immediately responded by traveling to the rural valley to meet with concerned residents. We soon developed a plan of attack.

Representing nearly 100 families, PennFuture went public with its demand that DEP immediately provide safe drinking water to the community, and initiated a suit against the company responsible for the past waste disposal.

DEP responded by providing temporary drinking water to area residents, eventually earmarking $18 million to clean up the dump sites and build a new public water system that would supply residents with a permanent, safe source of drinking water. The company contributed to the cleanup through a settlement with DEP, and established a separate fund to reimburse our clients for the increased costs associated with their use of the public water supply.

The new water supply for the Petrolia Valley was completed in 2006. As of this month, the DEP continues to make slow progress on cleaning up the waste piles that originally contaminated area drinking water supplies in the town of Petrolia.

Third Circuit Preserves Common Law Nuisance Claims To Correct Harmful Air Emissions

Counsel for property owners residing near dirty coal plants will be pleased with the Third Circuit's decision in Bell et al. v. Cheswick Generating Station, Genon Power Midwest, L.P., No. 12-4216 (3d Cir. Op. filed Aug. 20, 2013). The Third Circuit held that the federal Clean Air Act does not pre-empt state law nuisance claims.

Plaintiffs Bell and Luppe were named plaintiffs in a class action representing 1,500 persons residing near Genon's 750-megawatt coal-fired power plant located in a bedroom community north of Pittsburgh along the Allegheny River.  The community, Springdale, also happens to be home to one of the finest old-fashioned custard stands east of the Mississippi.

Genon Power Plant
Springdale, Pa.

Plaintiffs sued under a variety of state law tort theories, alleging that ash and other contaminants from the plant were harming their property. Genon sought summary judgment, asserting that the Clean Air Act (CAA) pre-empted the state law claims.

The CAA's citizen suit provision contains a savings clause that reads:

"Nothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any emission standard or limitation or to seek any other relief (including relief against the Administrator or a State agency)."

The CAA also contains a so-called "state's rights" savings clause that protects the right of states to impose limits that are more stringent than federal law.

In a matter of first impression, the Third Circuit's analysis was guided by the Supreme Court's decision in International Paper Co. v. Ouellette, 479 U.S. 481 (1987).  There, property owners on a lake sued under state common law theories for reduced property values being caused by a pollutional discharge into the lake.  The Supreme Court found that the Clean Water Act's (CWA) savings clauses preserved the right of states to impose standards that were more stringent than federal law, and that those more stringent standards could be imposed either by statute or through the common law.

Finding no meaningful difference between the savings clauses under the CAA and CWA, the Third Circuit properly concluded that Ouellette controlled its decision and remanded the case to the district court for further proceedings.

The CAA's national ambient air quality standards are intended to protect public health and welfare. The secondary standards, in particular, are designed to prevent impacts to things such as buildings.  As a practical matter, compliance with those standards should shield good operators from these types of common law nuisance suits. But the Third Circuit recognized that the principles of cooperative federalism embodied in the CAA provide plaintiffs another tool to redress harm where the federal regulatory framework fails to prevent harm to local residents, as alleged in this case.

In Pennsylvania, the General Assembly has made it difficult for the state to adopt regulatory standards that are more stringent than federal law. Section 4.2(b) of Pennsylvania's Air Pollution Control Act prohibits the Environmental Quality Board from adopting control measures and other requirements that are more stringent than federal law without substantial justification. As such, the Third Circuit's decision preserving common law nuisance claims has particular import for Pennsylvania residents allegedly being harmed by air pollution.

Act 13 Watch: PUC and DEP File Petition To Get New Justice Involved

As has been reported, the Pennsylvania Public Utility Commission (PUC) and Department of Environmental Protection (DEP) filed a joint petition last week requesting that the Robinson Township case, which challenges the constitutionality of Act 13, be resubmitted to the full Court so that new Justice Correale Stevens may participate in the  decision. 

When oral argument was heard on October 17, 2012, there were only six justices on the bench as former Justice Joan Orie Melvin was suspended while being prosecuted for public corruption charges. She was eventually convicted.

Governor Corbett appointed Correale Stevens to replace Melvin. He was sworn in last Tuesday, and though the Supreme Court has yet to decide the Robinson Township case, it said that Stevens would not participate in the decision unless he heard oral argument. According to StateImpact, a spokeswoman for the Court indicated that it has rarely ordered re-argument, but that another avenue for Stevens to participate might be for the parties to resubmit briefs. Considering that the Supreme Court said that oral argument was an "integral" part of their decision-making process, it is difficult to understand how resubmitting briefs in an already well-briefed case would, by itself, make a difference in whether Justice Stevens should participate in the decision.

To review, the Commonwealth Court in Robinson Township decided that a provision of Act 13, which mandated municipalities to allow industrial activities in areas not zoned for those activities, unconstitutionally harmed those that depended on that zoning to purchase property in the district, in violation of their substantive due process rights under Art. 1, Sec. 1 of the Pa. Constitution. The Commonwealth Court also declared unconstitutional a separate provision granting DEP the right to waive gas well set-back requirements because the legislature provided no guidance for the executive branch agency to exercise that discretion, in violation of Art 1, Sec. 2 of the Pa. Constitution. In effect, the Court said that the legislature did not properly delegate its authority to the DEP.

While on the Superior Court, Justice Stevens issued no opinions on the constitutional provisions relied on by the majority in Robinson Township to strike down portions of Act 13. He did participate in a handful of decisions that raised substantive due process claims, but those cases were criminal cases that shed little light on his views. For example, Commonwealth v. Gaines involved a claim that substantive due process entitled an individual to have his arrest record expunged, and Commonwealth v. Teeter involved an individual's right to be free from vague and discriminatory sentencing statutes. Both principles are well established, but the claims of the individual defendants were rejected in those cases without much analysis.

During his tenure, Justice Stevens has not issued or joined an opinion that reveals his view of how the courts should use substantive due process to protect an individual's right to life, liberty and, in particular, the right to acquire, own and protect property as guaranteed by Art 1, Sec. 1 of the Pa. Constitution.

Pa. Supreme Court watch: Act 13 may still only have six justices voting

We previously did a review of candidates forwarded by Democratic senators for Governor Tom Corbett to consider for appointment to the Pennsylvania Supreme Court.

Corbett appointed Correale Stevens, one of the five nominees forwarded to him by Daylin Leach, Democratic Chair of the Senate Judiciary Committee, and then the President Judge of the Superior Court.

It was thought by some that the Supreme Court was waiting for the seat of convicted Justice Joan Orie Melvin to be filled, before it made a decision on the constitutionality of Act 13.

But last week I was talking to a reporter from Platts, an energy sector news service, and she informed that the Supreme Court told her that Justice Stevens would not participate in any decision in which he had not heard oral argument.

This means that the Supreme Court will either make its decision on Act 13 based on the votes of six justices, or the Court will need to order re-argument if Justice Stevens is to take part in the decision.