Jul 30 2012
Pennsylvania Commonwealth Court’s Decision in Robinson Township v. Commonwealth: Like Oil and Water, Fracking and Zoning Don’t Easily Mix (Part II)
On July 26, 2012, the Pennsylvania Commonwealth Court issued its decision in Robinson Township et al. v. Commonwealth of Pennsylvania, No. 284 MD 2012 (available at http://www.pacourts.us/OpPosting/Cwealth/out/284MD12_7-26-12.pdf.) In Part I of this series of blog posts (see down below this post), I discussed the background and general aspects of the decision. In this Part II, I want to focus on the biggest headline grabber of the decision: the nullification of § 3304’s requirements concerning local zoning regulation of gas and oil drilling.
The Background of the Zoning Issue
To understand the § 3304 issue, it is important to note first that the Pennsylvania Supreme Court, in the twin 2009 decisions of Huntley & Huntley, Inc. v. Borough of Oakmont, 964 A.2d 855 (Pa. 2009) and Range Resources-Appalachia, LLC v. Salem Township, 964 A.2d 869 (Pa. 2009), ruled that Pennsylvania’s Oil and Gas Act did not fully preempt local zoning control over gas drilling activities. In essence, what these two decisions held was that a local municipality could control (via zoning) the location of drilling activity, but not the activity itself. Thus, a municipality could prohibit drilling in certain zones (like residential areas), but could not regulate things like the time or noise levels of drilling activity. As a result of these two rulings, several municipalities found they could control drilling either under existing zoning ordinances or by the amendment of their zoning ordinances, and proceeded to do so.
Chapter 33 of the new Oil and Gas Act created by Act 13 clearly sought to severely restrict municipal control over gas drilling. It used a 3-prong approach. Section 3302 prohibits any municipal ordinances (other than those under the Municipal Planning Code or the Flood Plain Management Act) which seek to regulate oil and gas activities, expressly stating that the new act “preempts and supersedes” such municipal regulations. Thus, municipal ordinances that sought, for example, to ban gas drilling in a town because the municipality did not want it, were now preempted. Section 3303 declares that state environmental laws “occupy the entire field to the exclusion of local ordinances” so that all local ordinances based on environmental concerns were preempted and superseded. Thus, local ordinances which sought to ban gas drilling because it was or created an environmental problem were now preempted. That still left zoning, and § 3304 seeks to limit municipal zoning power. Section 3304(a) requires that all local zoning ordinances “shall allow for the reasonable development of oil and gas resources,” and “reasonable development of oil and gas resources” is defined in § 3304(b) to mean that a local zoning ordinance must, among other things: (1) allow “location assessment” operations such as seismic testing using explosives; (2) impose restrictions on oil and gas operations that are no more stringent than those imposed on other industrial operations; and (3) allow oil and gas operations (both drilling and impoundments) “as a permitted use in all zoning districts” (subject to some specified setback requirements). This, of course had the effect of doing away with the ability to control the location of drilling recognized by the Pennsylvania Supreme Court 3 years before. To make sure that municipalities complied with these requirements, Act 13 included some “hammers” in the form of creating a civil cause of action for a “person aggrieved” by a municipal ordinance not in compliance with Act 13 (§ 3306) with the ability of the plaintiff to obtain attorney’s fees (§ 3307), and a provision making municipalities whose ordinances are found by the Commonwealth Court or the Supreme Court to violate the Act to be “immediately ineligible” to receive any impact fees for gas drilling activity in the municipality (§ 3308).
The Court’s Opinion on the Zoning Issue
As indicated in Part I of this blog post, the Robinson Township Court struck down § 3304 and any provisions of Chapter 33 of Act 13 which enforces the provisions of § 3304 (presumably § 3305 – 3308), declaring them to be “null and void” and enjoining the Commonwealth from enforcing those provisions because it found that the restrictions of § 3304 are unconstitutional.
The majority’s analysis is based primarily on substantive due process grounds. It begins by analyzing what zoning is, calling it “an extension of the concept of a public nuisance which protects property owners from activities that interfere with the use and enjoyment of their property.” Opinion at 27. It picks up language from the US Supreme Court’s decision in City of Edmonds v. Oxford House, Inc., 514 U.S. 725, 732-33 (1975) (taken in turn from Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 388 (1926)) that “[l]and use restrictions aim to prevent problems caused by the ‘pig in the parlor instead of the barnyard’”—an image that both the majority and the dissent play off in their differing interpretations of the constitutional issue. In effect, the majority found that zoning classifications are based on a public process that results in a comprehensive plan, and that “Out of this process, a zoning ordinance implements a comprehensive zoning scheme; each piece of property pays, in the form of reasonable regulation of its use, for the protection that the plan gives to all property lying within the boundaries of the plan.” Opinion at 29. For the Court, substantive due process requires that “we take into consideration the rights of all property owners subject to the zoning and the public interests sought to be protected” in a kind of balancing test. Opinion at 30.
The problem for the Court appears to be that, in arguing the constitutionality of the Act, the Commonwealth focused on the wrong public interest—the interest in development of oil and gas resources in the state. Because “the interests that justify the exercise the police power in the development of oil and gas operations and zoning are not the same“ (though they sometimes overlap), Opinion at 31, the requirements in § 3304 that zoning ordinances must be changed have to be based on the interest in the exercise of the police power when zoning—an interest which focuses on comprehensive development according to a plan, not the development of oil and gas interests. Thus, the majority found that by “requiring municipalities to violate their comprehensive plans for growth and development, 58 Pa. C.S §3304 violates substantive due process because it does not protect the interests of neighboring property owners from harm, alters the character of neighborhoods and makes irrational classifications – irrational because it requires municipalities to allow all zones, drilling operations and impoundments, gas compressor stations, storage and use of explosives in all zoning districts, and applies industrial criteria to restrictions on height of structures, screening and fencing, lighting and noise.” Opinion at 33.
The dissent’s problem with this conclusion is that it does not see a sufficient constitutional basis for requiring this analysis. It relies on precedents that presume the validity of zoning ordinances and, viewing § 3304 as a zoning ordinance, finds no constitutional problem because Act 13 is a valid exercise of the police power. In effect, the dissent is willing to let the Legislature make legislative/policy decisions about oil and gas development and zoning.
A Few Quick Observations
(1) The notion that the private property interests held by neighbors gives rise to substantive due process protections of a constitutional nature is perhaps the most intriguing element of the Court’s opinion concerning the zoning issues. In responding to one of the dissent’s “pig in the parlor” arguments (that the “pig” of oil and gas development can only operate where the “slop” is found—that is, where the oil and gas are located), the majority states “the ‘slop’ here is not the oil and gas but the effects of oil and gas operations on other landowners’ quiet use and enjoyment of their property. The slop here – noise, light, trucks, traffic – literally affects the use of the landowner’s parlor.” Opinion at 33 n. 21. One can wonder how far such a right extends; the Court does not say. It may be limited to the unique trade-off that zoning creates (“each piece of property pays, in the form of reasonable regulation of its use, for the protection that the plan gives to all property lying within the boundaries of the plan,” Opinion at 29). One could foresee, however, private property owners attempting to extend it into other areas as a check on government regulation.
(2) Having rooted the nullification of § 3304 in substantive due process, it is difficult to see how this problem can be fixed via legislation (unless the General Assembly wants to completely revoke the MPC and grant no zoning power to municipalities—which would pose a whole different set of land use problems unrelated to oil and gas drilling). If upheld on appeal, this notion of substantive due process provides a powerful protection for, and primacy to, the zoning power of local municipalities over state regulation.
(3) The decision leaves intact §§ 3302 and 3303—for now. It does not appear that there was a challenge to those sections in this matter, so the decision cannot be viewed as providing any precedential support for those two sections. Of course, given the fact that the Court has found that Act 13 cannot restrict zoning, perhaps the preemption provided by those sections is somewhat hollow anyway. A municipality that wants to restrict drilling can simply use zoning tools to do so.
(4) There will be an issue about whether the limitations on zoning recognized by the Supreme Court in the Salem Township and Borough of Oakmont cases (i.e., that zoning can regulation location but not activities of drilling) still apply. Those cases relied on interpretation of the now-repealed language of the Oil and Gas Act. If in fact there is constitutional protection for the zoning power, one could certainly see municipalities asserting their full zoning authority to regulate both the location and the activities of drilling within their jurisdiction. In other words, far from closing the “loophole” that Salem Township and Borough of Oakmont created, Act 13 unconstitutional approach may have blown the issue wide open.
(5) The fight is not over. The Pennsylvania Supreme Court can still overturn the Robinson Township decision. In the meantime, however, oil and gas companies and drillers now have no real argument against zoning regulation of their activities.
(6) One has to wonder what the Act’s authors were thinking when they insisted that drilling take place in all zoning districts. The notion of drilling in a residential area makes the Petitioner’s arguments so much easier because it makes the reach of the Act appear so great and draconian. A plausible explanation would be that, combined with §§ 3302 and 3303, § 3304 was simply part of a bigger plan to try to make it abundantly clear that local municipalities should have no effective control over drilling. Yet the overreach on zoning may well have served to undermine the entire enterprise by now giving constitutional protection to the zoning power that can be brought to bear on drilling.