A federal appeals court panel in Philadelphia has overturned a lower court’s decision to throw out a lawsuit filed by a small exploration and production company that is challenging the authority of the Delaware River Basin Commission (DRBC) to enact a de facto moratorium on hydraulic fracturing (fracking).

On Tuesday, a three-judge panel of U.S. Court of Appeals for the Third Circuit vacated a March 2017 decision by the U.S. District Court for the Middle District of Pennsylvania to dismiss a lawsuit filed nearly one year earlier by Wayne Land and Mineral Group LLC (WLMG), WLMG v. DRBC, No. 17-1800. Justices Kent Jordan, Thomas Hardiman and Anthony Scirica ordered the case remanded back to District Court Judge Robert Mariani for further review.

Court records show that the 1961 compact that created the DRBC includes language giving the commission authority to review “all public and private projects and facilities” within the basin. The DRBC is led by the governors of Delaware, New Jersey, New York and Pennsylvania, as well as the commander of the U.S. Army Corps of Engineers’ North Atlantic division. However, while Mariani dismissed WLMG’s lawsuit on the grounds that fracking constituted a “project,” the appellate court justices weren’t so sure.

“Because we conclude that the meaning of the word ‘project’ as used in the compact is ambiguous, we will vacate the order of dismissal and remand the case for fact-finding on the intent of the compact’s drafters,” Jordan wrote for the panel. He later added that “there are other provisions in the compact that suggest that the drafters did not intend to define ‘project’ as broadly as the commission contends…

“Broadly defining ‘project’ to include WLMG’s proposed fracking-related activities would sweep in undertakings that could appear out of place among the (admittedly non-exhaustive) list of projects and facilities expressly set forth in the description of the commission’s general powers. That list includes: water and waste treatment plants, stream and lake recreational facilities, trunk mains for water distribution, local flood protection works, small watershed management programs, and ground water recharging operations. Those are arguably different in purpose and in kind than fracking operations.”

According to its complaint, WLMG owns about 180 acres of land in Wayne County, PA, including 75 acres within the river basin.

The Delaware Riverkeeper Network (DRN), granted intervenor status as a defendant and which supports the de facto moratorium, predicted that the ban would ultimately be maintained.

“The court of appeals recognized the importance of these issues and is giving the parties the opportunity to establish a full record on remand to the district court,” said DRN lead counsel Jordan Yeager. “We are confident that when a full record is established the courts will conclude that the DRBC has not only the authority to regulate fracking and related infrastructure, but the absolute duty to do so.”

Last April, the DRBC said it had received more than 8,600 public comments over proposals to permanently ban fracking within the Delaware River Basin and discourage fresh water exports and wastewater imports that could be used to support the practice elsewhere. Much of the basin in New York and Pennsylvania overlaps the Marcellus Shale.

The DRBC said in 2009 that all gas drilling in the basin needed to be reviewed but said it would not approve any development until rules were adopted governing the industry. The agency postponed the gas development review in 2010 and failed to act on adopting rules in 2011, leaving in place a de facto moratorium.