Court Continues to Reject Validity Challenges to Oil and Gas Development

Legal Intelligencer

(By Anna S. Jewart and Blaine Lucas)

In 2013, the Pennsylvania Supreme Court rendered its ground-breaking decision in Robinson Township v. Commonwealth, (Robinson II), in which a three-justice plurality relied on  the Pennsylvania Environmental Rights Amendment, Article I, Section 27 of the Pennsylvania Constitution (ERA) to invalidate certain provisions of Act 13 (the General Assembly’s 2012 comprehensive update to the former Oil and Gas Act) limiting the authority of local governments to regulate oil and gas development. This decision triggered a wave of challenges from objectors who argued local ordinances are substantively invalid where they fail to place sufficient restrictions on oil and gas uses or allow them in allegedly incompatible zoning districts. To date, these types of claims have been consistently rejected by local zoning hearing boards, the Common Pleas Courts and the Commonwealth Court. Extensive case law following Robinson II makes it clear that where oil and gas development occurs is squarely within the purview of local zoning authority, while how it occurs is a state regulatory matter. The Supreme Court’s decisions in Gorsline v. Fairfield Township, 186 A.3d 375 (Pa. 2018), and Robinson IV, 147 A.3d 536 (Pa. 2016), and several Commonwealth Court decisions including Frederick v. Allegheny Township Zoning Hearing Board, 196 A. 3d 677 (Pa. Cmwlth. Ct. 2018), Delaware Riverkeeper Network v. Middlesex Township Zoning Hearing Board, No. 2609 C.D. 2015 (Pa. Cmwlth. 2019) and Protect PT v. Penn Township, No. 1632 C.D. 2018 (Pa. Cmwlth. Nov. 14, 2019), appear to have laid to rest any lingering doubts concerning a municipality’s authority to allow oil and gas uses within its boundaries. The Pennsylvania Supreme Court has declined to hear appeals in FrederickDelaware Riverkeeper or Protect PT.

The Commonwealth Court recently reiterated these principles in Murrysville Watch Committee v. Municipality of Murrysville Zoning Hearing Board, No. 579 C.D. 2020 (Jan. 24, 2022). On Jan. 24, the court issued an opinion and order affirming the decisions of the Westmoreland County Common Pleas Court and the Murrysville zoning hearing board, denying the objectors’ challenge to the oil and gas regulations in the municipality’s zoning ordinance. The 48-page opinion, authored by Judge Patricia McCullough, comprehensively rejected the substantive, procedural, and evidentiary arguments raised by the objectors, relying heavily on its prior decisions in Frederick and Protect PT. On Feb. 23, the objectors in Murrysville Watch filed a petition for allowance of appeal with the Supreme Court.

The Murrysville Watch decision offers an opportunity to revisit treatment by the courts of zoning ordinances which permit oil and gas development in any, or all, zoning districts. Although the objectors in Murrysville Watch alleged the ordinance at issue does not sufficiently limit oil and gas development, the restrictions placed on those uses are more stringent than those upheld in cases like Frederick, Delaware Riverkeeper or Protect PT 

Frederick involved a validity challenge to the Allegheny Township, Westmoreland County zoning ordinance, which allowed oil and gas wells as a use by-right in all zoning districts, subject to certain additional requirements. Although the ordinance did not contain a provision requiring an enumerated setback for oil and gas development, application of the state-mandated 500-foot setback between a well-head and an existing building left less than 50% of the township land mass available for oil and gas development. Objectors brought a validity challenge, which was denied by both the local zoning hearing board and the lower court. The en banc Commonwealth Court affirmed on appeal, rejecting the objectors’ contentions that the ordinance violated substantive due process and the ERA.

In analyzing the ERA claim, the Commonwealth Court in Frederick addressed the Supreme Court’s 2017 ruling in Pennsylvania Environmental Defense Foundation v. Commonwealth, 161 A.3d 911 (Pa. 2017), wherein the Supreme Court ruled that challenges raised under the ERA should be decided in accordance with its text. Acknowledging that the precise duties imposed upon local governments by the first sentence of the ERA are by no means clear, the Commonwealth Court ascertained the relevant standard to be whether the governmental action “unreasonably impairs” the environmental values implicated. However, the Commonwealth Court found the Supreme Court’s holding in Robinson II did not give municipalities the power to act beyond the bounds of their enabling legislation and that they lack the power to replicate the environmental oversight that the General Assembly has conferred upon the Department of Environmental Protection and other state agencies.

The Commonwealth Court reached a similar result in Delaware Riverkeeper. There, the Middlesex Township, Butler County zoning hearing board denied a validity challenge to an ordinance allowing oil and gas well site development as a use by-right in some zoning districts and as a conditional use in other zoning districts. Although oil and gas well development is textually authorized in most zoning districts in the township, the board accepted the testimony of an expert witness who testified that, when other ordinance limitations are applied, less than 30% of the township is available for drilling. After a complicated procedural history, the Commonwealth Court affirmed the decisions of the zoning hearing board and the trial court in an unpublished opinion. The Commonwealth Court quoted liberally from its earlier decision in Frederick, and similarly concluded that the ordinance violated neither substantive due process nor the ERA.

In Protect PT, the Commonwealth Court relied on Frederick to uphold the validity of the Penn Township, Westmoreland County zoning ordinance, challenged in part on ERA grounds. Objectors contested the validity of the ordinance’s creation of an overlay district in which natural gas operations were authorized by special exception. The overlay district covered 55% of the township’s land mass and, after the application of setbacks, left 9.64% of the township available for development. The challengers argued that unconventional natural gas drilling was a heavy industrial use incompatible with the underlying agricultural and residential zoned areas, rendering the zoning ordinance invalid. On appeal, the Commonwealth Court held the objectors failed to establish that unconventional natural gas development posed any substantial actual risk to the environment or health of township residents. The court found the trial court properly determined that the ordinance, which permitted oil and gas development in specific and targeted areas of the township that are rural and not densely populated, did not violate the ERA or due process.  

With these cases as a backdrop, in Murrysville Watch the Commonwealth Court addressed the objectors’ claims that the ordinance there violated due process, the ERA and equal protection. The challenged ordinance in Murrysville Watch authorized oil and gas wells as a conditional use in an overlay district, which encompassed portions of, but not all, the rural residential zoning district. The ordinance also imposed a setback of 750 feet from the edge of a well pad to “protected structures.” Application of these geographic limitations, along with the ordinance’s steep slope restrictions, left only five% of Murrysville’s land mass available for unconventional oil and gas development.

The objectors asserted that the ordinance violated substantive due process because unconventional oil and gas drilling allegedly is an industrial land use incompatible with the stated purpose of the underlying residential zoning district. In a related argument, objectors contended that the overlay constituted an unconstitutional spot zone because certain portions of the residential zone were included in the overlay, while other portions were not. Relying heavily on both Frederick and Protect PT, the Commonwealth Court rejected these claims, concluding that the objectors failed to introduce any evidence of incompatibility. Instead, the Court observed that the municipality, through the multi-year efforts of a task force, had balanced the goal of economic development with its obligation to protect the health, safety and welfare of property owners within the overlay district. The court further noted the extensive additional substantive regulations and review processes applicable to oil and gas development mandated by the challenged ordinance.

For similar reasons, the court denied the objectors’ ERA claim, again citing extensively to Frederick and Protect PT, concluding that the objectors did not prove that the challenged ordinance “unreasonably impairs” citizens’ rights under the ERA. Finally, the objectors asserted that the overlay violated the equal protection rights embodied in Article III, Section 32 of the Pennsylvania Constitution, on the basis that only the oil and gas industry was granted an overlay in residentially zoned areas and that residents of the rural residential district are not treated equally. The court rejected this claim, finding that the municipality had a rational basis for creation of the overlay district, based on available acreage and population density. The Commonwealth Court also found that the objectors failed to demonstrate the challenged ordinance violated the Pennsylvania Municipalities Planning Code, 53 P.S. Sections 10101, or that it was inconsistent with the municipality’s comprehensive plan.

Blaine A. Lucas is a shareholder in the public sector services and energy and natural resources groups of the Pittsburgh law firm of Babst, Calland, Clements & Zomnir. Anna S. Jewart is an associate in the firm’s public sector services group and focuses her practice on zoning, subdivision, land development, and general municipal matters. Contact them at blucas@babstcalland.com and ajewart@babstcalland.com.

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Reprinted with permission from the April 21, 2022 edition of The Legal Intelligencer© 2022 ALM Media Properties, LLC. All rights reserved.

 

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