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Pennsylvania's Act 13 Still Up in the Air

August 27, 2012
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Nearly three weeks after ruling that portions of Pennsylvania's omnibus Marcellus Shale law, Act 13, were unconstitutional, the state's Commonwealth Court ordered an injunction against the preemption provision to remain in place pending appeal while a provision affecting setback waivers was lifted.

Act 13, which Gov. Tom Corbett signed into law in February, gave shale-rich counties in the state the ability to impose a 15-year impact fee on unconventional gas wells if they agreed to abide by state zoning rules and made upgrades to environmental regulations (see NGI, Feb. 20). Several townships filed a lawsuit challenging the law (see NGI, April 2).

In a 4-3 decision on July 26, an appeals court ruled that Act 13's zoning requirements were unconstitutional on the grounds that its limits on local zoning violate municipalities' right to substantive due process (see NGI, July 30). The Commonwealth immediately appealed to the state Supreme Court and asked for the process to be expedited (see NGI, Aug. 6).

The Commonwealth Court heard oral arguments over whether the state's appellate court rules -- which require that any previous injunction order be automatically stayed in the event of an appeal by the Commonwealth, a legal action known as supersedeas -- should be waived for the legal challenge to Act 13's provision allowing state preemption of municipal zoning. Ultimately, the court sided with Act 13 opponents and kept the injunction in place.

"Obviously we think it's a good decision," attorney Jordan Yeager of Curtin & Heefner LLP told NGI. "It would have been havoc all around if we had a period of time when municipalities would be required to enact ordinance provisions that the court has already deemed to be unconstitutional."

Kevin Moody, general counsel for the Pennsylvania Independent Oil and Gas Association (PIOGA), said the court did not lift the supersedeas for another key provision of Act 13 that it also found unconstitutional -- that the state Department of Environmental Protection (DEP) be given the power to grant waivers on setback restrictions. Essentially, that leaves in place the DEP's waiver powers while the appeal is pending.

"That's significant for the industry because that has real world, every day practical application," Moody told NGI. "We're upset with the present situation because, come Sept. 1, lots of money has to be paid for the local impact fee. But what the industry was supposed to receive in exchange -- consistent, uniform zoning provisions across the state -- we don't have at this point."

Yeager said he believes the appellate court sent a message in allowing the one injunction to continue -- that Act 13's opponents will ultimately prevail. "The court ruled that we have a reasonable likelihood of success going forward. The law is a drastic overreach that would undermine the whole premise of zoning around the state, and it would disrupt the property and due process rights of residents and businesses. We're confident that the [state] Supreme Court will agree."

Moody disagreed. "This means nothing, as far as we're concerned, as to the likelihood of success at the Supreme Court," he said. "The judge who presided yesterday was the author of the [appellate court] opinion. He announced at the beginning of the proceedings that he didn't want to hear any arguments on the merits."

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