United States: Pennsylvania Township Moves To Revive An Ordinance Banning Disposal Of Wastewater From Hydraulic Fracturing Activities, After Federal Court Ruling Invalidated It

On October 26, 2015, Grant Township, Pennsylvania, filed a Motion for Reconsideration of  Western District of Pennsylvania District Court Magistrate Judge Susan Baxter's October 14, 2015, ruling invalidating several elements of the township's ordinance (the "Ordinance").

On June 3, 2014, Grant Township adopted the Ordinance, which attempted to establish a "Community Bill of Rights for the people of Grant Township." Doc. 113 (Memorandum Opinion) at 1. This Ordinance set forth "the framers' beliefs that corporations should not have more rights than the people of its community and that the people have the right to regulate all activities pursuant to a right of local self government." Id. at 2-3.

It also specifically proscribed numerous activities, including banning the disposal of wastewater from hydraulic fracturing activities, as well as prohibiting the right to challenge the Ordinance in court. Id. at 3.

Plaintiff Pennsylvania General Energy Company, LLC ("PGE"), filed suit against Grant Township in August 2014. In the suit, which is proceeding in the United States District Court for the Western District of Pennsylvania, No. 1:14-cv-00209, PGE sought injunctive and declaratory relief to invalidate the Ordinance, as well as damages for the costs it incurred by having to dispose of wastewater at other locations.

Specifically, PGE asserted that the Ordinance's prohibition "on the depositing of waste materials from oil and gas extraction (at Section 3(a)) and declaring that no permits or licenses awarded by state or federal authorities will be deemed valid (at Section 3(b))" exceeded its limited authority as a Second Class Township. Doc. 113 at 13. Further, PGE claimed the Ordinance stripped corporations of their constitutional rights by attempting to remove their personhood status. Thus, according to PGE, Grant Township had unlawfully interfered with its ability to convert an existing deep gas well, which was originally drilled in 1997, into a brine injection well.

The court agreed that the Ordinance overstepped Grant Township's authority, as granted to it by the Pennsylvania legislature under the state's Second Class Township Code. It held:

– Because Sections 3(a) and (b) of the Community Bill of Rights Ordinance were enacted without legal authority in violation of the Second Class Township Code, these Sections are invalid;

– Because Sections 3(a) and (b) of the Community Bill of Rights Ordinance are exclusionary in violation of Pennsylvania law, they are invalid;

– Because Sections 4(b) and (c) of the Community Bill of Rights Ordinance were enacted without legislative authority in violation of the Second Class Township Code, these Sections are invalid;

– Because Section 5(a) of the Community Bill of Rights Ordinance is preempted by the Limited Liability Companies Law, this Section is invalid;

and

– Because Sections 5(a) and (b) of the Community Bill of Rights Ordinance are preempted by the Second Class Township Code, they are invalid.

Based on the foregoing, Grant Township will be enjoined from enforcing Sections 3(a) and (b), Sections 4(b) and (c), and Sections 5(a) and (b) of the Community Bill of Rights Ordinance.

Id. at pp. 21-22.

After entry of this order, the case was set to continue to determine to what damages PGE may be entitled; however, on October 26, 2015, Grant Township filed its Motion for Reconsideration of the October 14, 2015, order. The crux of its Motion is as follows:

Grant Township submits that the Court erred (1) in failing to expressly rule on whether the people of Grant Township have an inalienable and constitutional right of local community self-government, and (2) by omitting consideration of the Pennsylvania Constitution's Environmental Rights Amendment as an independent legal basis for the Community Bill of Rights Ordinance.

Doc. 119, at 1-2.

It appears unlikely the court will find in favor of Grant Township on these points, because it was particularly disdainful of the Township's failure to provide any basis for its claims to a "right to local community self government," beyond mere references to historical events, such as the Mayflower Compact of 1643. Doc. 113 at p.7. The court also relied heavily on the controlling power of the Second Class Township Code in this matter, indicating that any attempt to rely on an "Environmental Rights Amendment" by Grant Township will also likely fail to persuade the court to adjust its prior ruling. See id. at 19-21.

Thus, it appears PGE may have scored a real success in the ever-changing landscape of the attempts of local Pennsylvania municipalities to regulate all stages of oil and gas activities within their regional borders.

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