Commonwealth Court Nullifies Two Key Provisions Of Act 13

In a stunning rebuff of Governor Corbett's and the Pennsylvania General Assembly's efforts to promote Marcellus Shale development, an en banc panel of the Commonwealth Court on July 26, 2012 voted 4 to 3 to overturn key provisions of Pennsylvania's Unconventional Gas Well Impact Fee Act ("Act 13"). In Robinson Township v. Commonwealth, Case No. 284 M.D. 2012, 2012 PA. COMMW. LEXIS 222 (July 26, 2012) ("Robinson Township"), the Commonwealth Court declared as unconstitutional, and therefore null and void: (1) the provision of Act 13 (58 PA. CONS. STAT. § 3304) that preempts local municipalities from enacting zoning ordinances that are more restrictive than the uniform requirements established by the General Assembly in the statute; and (2) the provision of Act 13 (58 PA. CONS. STAT. § 3215(b)(4)) that authorizes the Department of Environmental Protection ("DEP") to grant waivers from setback requirements for oil and gas wells from the waters of the Commonwealth.

The Secretary of the DEP and the Chairman of the Pennsylvania Public Utility Commission ("PUC"), two of the respondents sued in the case, immediately filed appeals, sending the case to a shorthanded Pennsylvania Supreme Court. The Supreme Court currently has only six available members, one Justice having been suspended while she defends criminal corruption charges. A tie vote would result in the Commonwealth Court decision being upheld.

Under Pennsylvania's Rules of Appellate Procedure, the taking of an appeal by the Commonwealth or a Commonwealth official acts as an automatic supersedeas, staying the effect of the order being appealed. But on August 15, 2012, in response to an application filed by the Petitioners, the Commonwealth Court vacated the automatic supersedeas as to Petitioners' challenge to Section 3304, while permitting the supersedeas to remain in effect as to Section 3215(b)(4). As a result, the Court's Order invalidating and enjoining the zoning provisions of Section 3304 remains in effect during the pendency of the appeal to the Supreme Court.

Background

On February 14, 2012, Governor Corbett signed into law Act 13, which amends title 58 (Oil and Gas Act of 1984, 58 PA. STAT. § 601.101 et seq.) of the Pennsylvania Consolidated Statutes. Act 13 resolved the controversy in Pennsylvania as to whether the Commonwealth should tax natural gas production from the Marcellus Shale by opting, instead, to allow counties to pass ordinances to impose an impact fee on unconventional gas well producers and...