Initial Thoughts on Yesterday’s Court Decision in Pennsylvania Environmental Defense Foundation v. Commonwealth of Pennsylvania

Yesterday (Jan. 7), the Commonwealth Court issued an opinion in the challenge brought by the Pennsylvania Environmental Defense Foundation (PEDF) against the Commonwealth. PEDF’s challenge concerned both the legality of leasing public lands for natural gas development, as well as re-appropriation of revenues generated from that leasing for non-environmental purposes.

John Walliser

At play in the Court’s decision were both the newly invigorated Environmental Rights Amendment (Article I, Section 27) of the PA Constitution, as well as a 1955 Law – the Oil and Gas Lease Fund – that directs how those revenues should be spent. In the past several years, the General Assembly has consistently diverted a significant portion of those revenues into the General Fund.

Here are some very brief reflections on the decision.

Can the Commonwealth continue to lease state forestland for development in light of recent court decisions emboldening the Environmental Rights Amendment?

The tongue-in-cheek answer to this question is “it depends”.

The Commonwealth Court actually refused to address the legality of the specific leasing events challenged in this litigation – occurring in both 2008 and 2010 by the Pennsylvania Department of Conservation and Natural Resources (DCNR)) – because the companies that procured those leases were not a party to this legal proceeding.

However the Court did recognize that leasing of state forestland could in fact be challenged pursuant to the Environmental Rights Amendment. Any such challenge would need to be done on a case-by-case basis.

Who has the right to make a decision about leasing state forestland?

Remarkably, the Commonwealth Court held that the Secretary of DCNR, and not the Governor, has the final authority on leasing of state forestlands for development. The Court also dismissed the ability of the General Assembly to exclusively determine whether leasing is in the state’s “best interest.”

In addition, the Court stated that DCNR must provide “adequate public notice” of any decision to lease. This would appear to require that DCNR publish its decision to allow leasing in the Pennsylvania Bulletin, with opportunity for public comment.

Can the General Assembly redirect revenues generated from leasing on state forestland?

Due to wording of the law that established the Oil and Gas Lease Fund (which distinguishes between “rents” and “royalties”), and basic judicial deference based on separation to powers, the Court found that the General Assembly was within its right to re-appropriate royalty revenues from leasing, and that this diversion of revenues did not violate the Environmental Rights Amendment. Had the General Assembly attempted to re-appropriate lease rents in addition to the royalties, we may have had a different result. But it is important to recognize that possible different outcome would have been based solely on competing statutes, and not the Environmental Rights Amendment.

How does this decision affect the state Supreme Court’s recent reinforcement of the Environmental Rights Amendment?
The Commonwealth Court embraces the state Supreme Court’s plurality decision in Robinson Township v. Commonwealth (2013) to embolden the Environmental Rights Amendment with respect to the state’s obligation as trustee of Pennsylvania’s natural resources, noting that neither the concurring nor dissenting opinions in that decision disputed the plurality’s construction of the Environmental Rights Amendment.However, the Commonwealth Court is hesitant to stray from what it believes is still-controlling precedent (based on a 1976 decision of the state Supreme Court in a case known as Payne v. Kassab) on how it should determine whether the Environmental Rights Amendment has in fact been violated. While the plurality opinion in Robinson sought to limit application of a balancing test established in the Payne v. Kassab decision, the Commonwealth Curt held that “[i]n the absence of a majority opinion from the Supreme Court or a decision from this Court overruling [Payne v. Kassab], that opinion is still binding.” This appears to be in conflict with the approach advocated by the plurality in the Robinson Township case.What does this mean? While the Supreme Court in Robinson Township made an important step forward in honoring the promise of the Environmental Rights Amendment to the Pennsylvania Constitution, the Commonwealth Court appears reluctant to abandon a more restrained balancing test unless and until the Supreme Court establishes further guidance. Thus, the full potential of the Robinson Township decision may remain on hold for the time being.