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Pennsylvania Supreme Court Considers Act 13 Appeal

The Pennsylvania Supreme Court last week was asked to decide whether to uphold or overturn a lower court ruling in July, which declared that portions of the Act 13, which imposes an impact fee on producers, were unconstitutional see NGI, July 30). Plaintiffs argue that the law limits local zoning rules and violates municipalities' right to substantive due process ((Robinson Township et al. v. Commonwealth et al., No. 284-MD-2012).

Kevin Moody, general counsel for the Pennsylvania Independent Oil and Gas Association, said he had reviewed the proceedings and was optimistic. "I'm encouraged that Justice [Thomas] Saylor apparently understood and agreed with a key point of our argument, that all municipal zoning authority flows from the General Assembly, and that the [municipalities'] authority wouldn't exist but for a grant of authority from the General Assembly," Moody told NGI. "That's very encouraging."

He said attorneys representing the Commonwealth did a good job framing the argument as a state-versus-municipality authority issue. There was also discussion about a 2009 ruling in which a Pennsylvania municipality was found to have improperly denied a drilling permit to an oil and gas company (Huntley & Huntley Inc. v. Borough Council of the Borough of Oakmont).

"Act 13 represented the legislature's balancing of the 'where' guidance and clarification that was requested in the court's prior Huntley decision, which drew a distinction between how drilling is conducted and where," Moody said. "In Huntley they said the 'how' was preempted by the Oil and Gas Act, but the 'where' was not, absent further legislative guidance. The justices said that phrase twice [in court]. On the industry's side, we've always believed that now the legislature and Act 13 have provided that further guidance on the 'where,' and that's what Act 13 is. It clearly is what was envisioned by the Supreme Court in that Huntley decision."

Smith Butz LLC attorney John Smith represents the plaintiffs: Cecil, Mount Pleasant, Peters and Robinson townships in Washington County, South Fayette Township in Allegheny County, Nockamixon Township and Yardley Borough in Bucks County (see NGI, April 2).

"I thought it went well," Smith also said. "What was good is that they let us argue every single issue that we had. By contrast, at the Commonwealth Court we only had 15 minutes per side. So the majority of our case wasn't even orally argued at the Commonwealth Court, and there were a lot of issues that people heard for the first time today. The court gave us full opportunity to develop those issues, as it did the other side."

Plaintiffs' attorney Jordan Yeager, of the Morrisville, PA-based law firm Curtin & Heefner LLP, concurred. "I think it went fine. The court gave us all two hours to argue our points. It was obviously a very thorough discussion, which reflects the seriousness of the issue. Now we'll wait and see."

It may be some time before the high court issues a final ruling on the issue. "You figure we had two hours of argument over maybe 12 different constitutional issues," Smith said. "I can't even fathom it. The court already has a full plate of activities. They will have to write an opinion and address every single thing. It's going to be a pretty long opinion. I don't expect anything [soon]. Maybe this year. I guess at the earliest, maybe December. It's so hard to speak for their schedule, it would be pure speculation."

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