The Fracking of Act 13: How the Supreme Court Torpedoed Marcellus Law

  • Municipalities in Pennsylvania that sought to limit shale drilling won a major battle with the Supreme Court's Act 13 ruling. Photo: Reid R. Frazier

January 10, 2014

“Not so fast.”

That was the resounding answer from the Pennsylvania Supreme Court to Act 13, the state’s landmark oil and gas drilling law passed in 2012. The 4-2 decision threw not just a monkey wrench into Governor Corbett’s signature legislation; it may have taken a wrecking ball to it, legal experts say.

Though the administration is hoping a last-minute request for review will keep some portions of the law in play, one thing is clear: the court has taken the legs out from under the Governor’s Marcellus shale law.

And most surprising to many court-watchers, an until-now obscure bit of legislation from the early days of the environmental movement gave the court ordnance enough to not only oppose Act 13, but potentially tilt other environment-industry legal battles in the favor of greens.

The December decision overturned several key portions of Act 13 and has sent a lawsuit over the case back to a lower court to decide if other parts of the bill should go, too.

The four judges in the majority decided that two key provisions of the Act were unconstitutional:

  • Local Zoning ‘Preemption’: Act 13 forbade municipalities from instituting zoning restrictions on drilling. The Commonwealth Court ruled this provision unconstitutional. The Supreme Court agreed, finding that the state cannot prevent municipalities from imposing these restrictions.

“[F]ew could seriously dispute how remarkable a revolution is worked by this legislation” on Pennsylvania’s zoning regimen, wrote Chief Justice Ronald Castille, in a three-judge plurality decision.

  • Setback waiver: The court found Act 13’s setback waiver instructions did not protect Pennsylvanians’ right to clean air and pure water. The law set minimum setback distances from bodies of water and buildings. But the law also stipulated drillers were entitled to setback waivers, so long as they presented a plan to ensure environmental protection. 

“Remarkably,” Castille wrote, “if a drilling permit that contains Department-imposed conditions is appealed, it is not the industry, but the Department” that has the burden of proof to show that its conditions were needed.

CORBETT: DECISION ‘UNACCEPTABLE’

The Governor’s office has asked the Supreme Court to reconsider key parts of the decision.

In its announcement that it is seeking reconsideration, the Governor’s office of General Counsel called the decision “a stunning departure from the historical practice” of the Supreme Court, and asked the court “give Act 13 its fair day in court, as every law of this Commonwealth deserves when challenged.”

It’s possible the court could do so, but is unlikely, experts said.

Corbett said he was ‘disappointed” by the decision to overturn the law, which he said in a press release “raised the bar on environmental protection standards while respecting the rights of local governments.” He also said the court’s decision to invalidate the setback waivers “could imperil our water quality” and called the decision “unacceptable”.

Corbett called on drillers to maintain the setback provisions written into the law, even though that portion of Act 13 is now invalidated. Corbett said three main industry groups indicated they would comply with the request. 

The decision has sent shockwaves across Pennsylvania not just for what the court decided--but why. Experts say the judges’ rationale could have a resounding effect on future environmental disputes.

AN ENVIRONMENTAL RIGHT ASCENDS

Four judges found Act 13's key provisions unconstitutional. One judge, Justice Max Baer, found that the law violated the due process provisions of the state constitution. But three of them, signing a plurality opinion written by Chief Justice Ronald Castille, found the provisions violated the state’s Environmental Rights Amendment.

The Amendment--Article I Section 27 of the Pennsylvania Constitution--states: “The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment.”

The amendment was passed unanimously by both sides of the legislature in 1970 and then approved by voters by a 4-1 margin the following year. It was passed at a time when the environmental effects of the state’s coal and steel industries were obvious.

“It is not a historical accident that the Pennsylvania Constitution now places citizens’ environmental rights on par with their political rights,” Castille’s opinion states. “Later generations paid and continue to pay a tribute to early uncontrolled and unsustainable development financially, in health and quality of life consequences.”

More than 40 years after the amendment was passed, however, the amendment, or “Section 27” was viewed as a relative footnote in Pennsylvania constitutional law, experts say.

“It has not been a feature of Pennsylvania jurisprudence,” said Paul Stockman, a Pittsburgh-based energy lawyer for McGuireWoods, who’s followed the case closely.

Though courts have invoked the amendment in past decisions, it’s never been the centerpiece for overturning legislation.

Bruce Ledewitz, a Duquesne law professor who advised the plaintiffs in the case said the state’s courts had essentially ignored the amendment in the years since it was passed. That’s why he advised them against claiming Act 13 violated Section 27 when he met with them.

“When they told me that they intended to rely on Section 27, I told them it was a waste of their time -- that it didn’t mean anything,” Ledewitz said.  But they didn’t heed his advice, and their strategy worked, to the surprise of many.

A LONG HISTORY OF RESOURCE EXTRACTION

The Castille opinion lays out its case by exploring Pennsylvania’s environmental history: clear-cutting of the state’s vast forests, the loss of wild game from over-hunting, and the deleterious effects of the coal industry on the commonwealth’s air and water.

With respect to Pennsylvania’s recent gas boom, the opinion recounts the sworn testimony of a Washington County nurse who had to abandon her family’s home after fracking began near her home. The woman complained that her water soon had a “sulfur chemical smell” to it and blamed the fracking for her “constant and debilitating headaches, nosebleeds, nausea” and other ailments.

Stories like these seemed to resonate with the judges who joined the opinion of Castille, a Republican who will reach the mandatory retirement age of 70 this year.

“By any responsible account,” Castille wrote, “the exploitation of the Marcellus Shale Formation will produce a detrimental effect on the environment”

The judges found that Act 13 did not provide enough protections to the environment. The state’s role as environmental protector, they wrote, “must be exercised in a manner that promotes sustainable property use and economic development.”

Legal experts said the fact that there was no majority opinion in the case means its impact on future cases is uncertain. It may mean that future courts will have to consider more closely whether state laws satisfy the Environmental Rights Amendment. This could apply to other practices--like real estate.

“The (Castille) opinion--it’s certainly an effort to stake out a new vitality” for the amendment,” said Stockman. 

“It has immediate impact on oil and gas development, but it could really affect just about anything that gets done or built in Pennsylvania,” Stockman said. “The vision of the environmental rights amendment that the plurailty sketched out is really astonishingly broad--is there anything that we do these days that couldn’t be said to have some arguable effect on environmental or aesthetic resources?”

AN AMENDMENT'S PROUD FATHER

Among the most interested in the outcome of the ruling was Franklin Kury. Kury is the man who wrote the Environmental Rights Amendment when he was a member of the Pennsylvania House of Representatives from Northumberland County.

Kury, a lobbyist for Malady & Wooten in Harrisburg, said he had seen first-hand the impact that a virtually unregulated coal industry had done to the state.

“I was very angry about what the coal companies had done to exploit Pennsylvania’s natural resources, particularly Northeast Pennsylvania. They really ravished the land--they took the money out and left many miles of acid-mine drainage polluted (rivers).”

He said he had no idea the amendment would play such a big role in such a big case. But he was pleased the amendment was finally getting the kind of attention he thought it deserved.

Was it a good decision? He offered no judgement on that.