News & Insights

November 2, 2015

Pa. High Court To Hear Latest Challenge To Natural Gas Law

This article originally ran in Law360 on November 2, 2015.

 

Pennsylvania’s Supreme Court will again hear oral arguments on Act 13, the sweeping update of regulations governing the natural gas industry in the state, and this time the court will focus on the Public Utility Commission’s ability to review local drilling ordinances.

 

Last Tuesday, it said it would hear the PUC’s challenge to a Commonwealth Court ruling that the regulator couldn’t review local drilling ordinances now that statewide zoning rules at the heart of the law have been struck down.

 

After the high court invalidated the section of the law barring municipalities from banning drilling in 2013, it directed the Commonwealth Court to settle several remaining questions, including whether the PUC could evaluate these rules to determine if they complied with the law and impose penalties in the form of withheld drilling fee revenues.

 

The Commonwealth Court then decided in 2014 that local drilling ordinances will have to be reviewed by local zoning authorities, and any energy industry appeals would have to start in courts of common pleas. Under the nixed Act 13 provisions, challenges to zoning decisions could be brought in the Commonwealth Court.

 

The appeals court did leave intact several other provisions in Act 13, and they will also be subject to oral arguments in front of the Supreme Court, at a date which has not yet been set.

Environmentalists are challenging a component of the law that says drillers must only provide notice to public drinking water systems following an oil or gas related spill, not private suppliers. They say that the distinction makes it a “special law” that violates the equal protection clause of the state constitution.

 

The high court will also address the controversial “gag order” in Act 13 which allows drillers to silence health professionals who are told the composition of the fluids used in drilling. The Commonwealth Court upheld the gag order, but said there was nothing that prevents doctors from including the information in patient records, medical treatment and evaluations — including evaluations based on trade secrets they’re required to keep — as well as sharing that information with other medical providers treating that patient.

 

Opponents say the prohibition on full disclosure also qualifies as a “special law.”

 

And the high court will also hear a challenge to the provision giving natural gas shippers the power to use eminent domain.

 

The Supreme Court in December 2014 denied the PUC expedited consideration of the appeal, but since then it had received briefs from the regulator, the state’s Department of Environmental Protection, and the coalition of municipalities and one environmental group that initially challenged Act 13. It said last week that it would also allow a range of other environmental groups — the Clean Air Council, Clean Water Action, Natural Resources Defense Council and the Sierra Club — and the Pennsylvania State Association of Township Supervisors to file amicus briefs.

 

A spokesman for the PUC declined to comment on the ruling on Monday.

 

The Pennsylvania Public Utilities Commission is represented by Matthew H. Haverstick of Conrad O'Brien PC.

 

The environmentalists and municipalities are represented by Jordan B. Yeager and Lauren M. Williams of Curtin & Heefner LLP, by John M. Smith and Jennifer Schiavoni of Smith Butz LLC, by Jonathan M. Kamin of Goldberg Kamin & Garvin LLP, and by Susan J. Kraham of Columbia Law School.

 

The case is Robinson Township et al. v. Pennsylvania et al., case number 104 MAP 2014, in the Supreme Court of Pennsylvania.

 

--Additional reporting by Keith Goldberg. Editing by Rebecca Flanagan.

 

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