Pennsylvania Commonwealth Court Allows Attorney General to Pursue UTPCPL Claims Against Oil and Gas Companies
On March 15, 2019, the Pennsylvania Commonwealth Court in Anadarko Petroleum Corporation v. Commonwealth held that the Attorney General can bring claims under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”) against companies that lease oil and gas rights from landowners. The companies argued that the UTPCPL was “designed to only protect consumers against underhanded behavior of sellers, rather than all parties to a given transaction” and because they “were not selling or distributing anything” the UTPCPL was not applicable. The Court rejected this argument and held that the UTPCPL’s definition of “trade” and “commerce” was broad enough to include claims against purchasers, as well as sellers. The Court noted that the UTPCPL places restrictions on the ability of private citizens to file suit, but that those restrictions do not apply to the Attorney General. The language of the UTPCPL quoted by the Court suggests that its holding does not open the door for private UTPCPL claims against oil and gas lessees. The Court also addressed whether the UTPCPL supports antitrust claims. The Court held that the UTPCPL “is not designed to render all antitrust violations actionable.” The Court dismissed the Attorney General’s antitrust claim that was based on the premise that “joint venture and market sharing agreements intrinsically violate[] the UTPCPL.” However, the Court held that the Attorney General did allege an actionable UTPCPL antitrust claim when it claimed that the companies were “giving [landowners] misleading information, and/or failing to disclose information, regarding the open market’s true appetite for subsurface mineral leases, as well as the whether the terms of the agreed-to leases ‘were competitive and fair.’”
Judge Covey issued a concurring and dissenting opinion, arguing that the “Majority manipulate[d] the language of the UTPCPL for a purpose the General Assembly never intended” – i.e. that the UTPCPL “a consumer protection statute intended to bolster consumers’ bargaining powers, can authorize legal action against a purchaser.” Jude Covey concurred in the Majority’s dismissal of the Attorney General’s UTPCPL antitrust claim. The case may be appealed to the Pennsylvania Supreme Court.