American Oil and Gas Reporter - December 2015 - 45

page 45-47_Layout 1 12/2/2015 10:03 AM Page 45

SpecialReport: Natural Gas White Papers

Court Rulings Favorable To Industry
By Kevin J. Garber
and Blaine A. Lucas

PITTSBURGH-In less than two
months, courts in three Pennsylvania jurisdictions rendered decisions addressing
the appropriate scope and application of
local government ordinances to the oil and
gas industry. All three were decided in favor of the energy industry.
The first reversed a controversial lower court decision that had invalidated a local government's approval of an unconventional natural gas well pad development. The second declared invalid a
"community bill of rights ordinance" that
banned underground injection wells and
in all likelihood any unconventional well
development. The last case, conversely,
rejected a substantive validity challenge
to a local zoning ordinance that authorized
oil and gas wells in all zoning districts.
Although the cases involved different
procedural and substantive issues, they all
addressed attempts by people opposed to
the oil and gas industry to thwart development through local land-use controls.
These cases, which Babst Calland argued
on behalf of the affected oil and gas operators, are relevant in shale development
regions in Pennsylvania and around the
country as they serve to be either precedential or as guidance to courts deciding
similar cases.

Compatible With Zoning
On Sept. 14, the Commonwealth Court
of Pennsylvania issued a much-anticipated ruling in Gorsline v. Board of Supervisors of Fairfield Township, reversing a
decision by the Lycoming County Common Pleas Court, which had ruled that developing an unconventional natural gas
well pad in a residential/agricultural (RA)
zoning district was not similar to and compatible with other uses in that zoning district. The ruling is significant because a
considerable amount of natural gas development in Pennsylvania takes place in similar zoning districts.
In 2013, Inflection Energy LLC applied
for conditional use approval for its plan to
construct a natural gas well site in Fairfield
Township's RA district. The township's
zoning ordinance does not address oil and
natural gas development specifically, but
does contain a "savings clause" that permits a property owner to apply for condi-

tional use approval for a use that is similar to and compatible with other uses within the zoning district.
Neighboring landowners objected,
expressing vague, unsubstantiated concerns regarding traffic, noise and water.
Nevertheless, the Fairfield Board of Supervisors granted Inflection's conditional use application and the neighboring
landowners appealed to the Lycoming
County Common Pleas Court. The common pleas court reversed, ruling that Inflection failed to prove the use was similar to and compatible with other permitted uses in the RA district.
Inflection appealed that decision to the
Pennsylvania Commonwealth Court. The
Marcellus Shale Coalition filed an amicus
brief in support of Inflection's position,
highlighting Pennsylvania's long history
of oil and natural gas development.
A panel of the Commonwealth Court
unanimously overturned the common
pleas court's decision, finding that the objectors did not meet their burden because
they did not present any real facts regarding any potential harm, and their testimony with regard to alleged harms was pure
speculation. The Commonwealth Court
also found that the proposed well pad was
consistent with permitted uses within the
RA district.
Significantly, the Commonwealth
Court also concluded in a footnote that
the objectors' claim that Inflection's
proposed use violated their rights under
the Environmental Rights Amendment to
the Pennsylvania Constitution had no
merit. The court noted that such a claim
presumed Inflection's use was not compatible with the permitted uses in the RA
district and would cause environmental
harm.
The court found that such a presumption did not apply, as the hearing record
supported Fairfield Township's conclusion
that Inflection's use was compatible with
permitted uses in the RA district, and the
objectors failed to present any evidence to
the contrary.
There is no automatic right to appeal
the Gorsline decision, and any such appeal
is heard at the discretion of the Pennsylvania Supreme Court. On Oct. 14, the objectors filed a petition for allowance of appeal with the Supreme Court, which had
not decided whether it would hear the case
as of mid-November.

Community Bill Of Rights
Pennsylvania General Energy Company (PGE) obtained a federal Underground
Injection Control Program permit from the
Environmental Protection Agency to inject produced fluids into one of its depleted gas wells in Grant Township, Indiana
County, Pa. The township does not have
a zoning ordinance, but it banned injection
wells using a "community bill of rights"
ordinance that declared corporations had
no constitutional rights.
In Pennsylvania General Energy v.
Grant Township, PGE challenged the
constitutionality, validity and enforceability of the community bill of rights ordinance in the U.S. District Court for the
Western District of Pennsylvania. On
Oct. 14, the district court invalidated
several provisions of the ordinance.
The U.S. district court found these ordinance provisions were invalid because:
* Grant Township was not authorized
to adopt such an ordinance under its enabling legislation, the Pennsylvania Second Class Township Code.
* The ordinance impermissibly excluded a use from the township.
* The ordinance was pre-empted by
the Pennsylvania Limited Liability Company Law, which expressly acknowledges that such entities have the same legal capacity as natural persons.
The township was represented on a pro
bono basis by the Community Environmental Legal Defense Fund, which has
sought to convince communities across the
country to enact similar community bills
of rights, which are designed to stop oil
and gas extraction, as well as managing
wastes from those activities.
A similar ordinance has been overturned in Mora County, N.M., and a legal
challenge to a community bill of rights ordinance adopted in Highland Township,
Elk County, Pa., is pending in the U.S. District Court for the Western District of
Pennsylvania.
Subsequent to this court decision,
Grant Township voters on Nov. 3 adopted by referendum a home rule charter that
removed the township from the purview
of Pennsylvania's Second Class Township
Code. The home rule charter also bans depositing waste from oil and gas extraction,
and would effectively ban injection wells
in the township. Further litigation is expected.
DECEMBER 2015 45

American Oil and Gas Reporter - December 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - December 2015