Category Archives: Legal Updates

By: Kevin R. Green

In a three-to-two split decision on July 17, 2014, the Commonwealth Court of Pennsylvania in Robinson Tp., Washington County v. Com. upheld the constitutionality of three core provisions contained within Pennsylvania’s Marcellus Shale drilling law, Act 13 of 2012. However, the court held as unconstitutional a portion of Act 13, which allowed the Public Utility Commission (PUC) authority to judge municipal ordinances that regulate oil and gas development.

Robinson appeared before the Commonwealth Court after the Pennsylvania Supreme Court’s holding on Dec. 19, 2013, which held several provisions of Act 13 violated the Environmental Rights Amendment of the state constitution, removing Act 13’s preemption over local zoning ordinances and restrictions on municipal regulations of oil and gas resources. The Supreme Court’s decision also removed Act 13’s requirement that the PA Department of Environmental Protection (DEP) issue waivers for certain well setback requirements along with the Act’s express limitations on a municipality’s ability to challenge the DEP’s issuance of the waivers. More about that can be found in a prior update here.

Deciding Robinson on remand, the Commonwealth Court specifically held Act 13 could constitutionally: (1) limit discussions between doctors and patients concerning the propriety information of fracking fluids; (2) authorize gas companies’ use of eminent domain; and (3) implement differing notice requirements as to procedures for gas-well neighbors with public water versus private water. However, the Commonwealth Court rejected the state’s argument that the PUC still has the authority to judge municipal ordinances that regulate oil and gas development after the state Supreme Court ruled in December that Act 13 unconstitutionally limited local governments’ right to say where well sites, compressor stations, and other oil and gas facilities can be located.

The Commonwealth Court’s decision clarifies several limitations of Act 13. First, while Act 13 is permitted to limit discussions between doctors and patients concerning certain proprietary information, the court emphasized that Act 13 does not prohibit a physician from sharing the disclosed confidential and proprietary information with another physician for purposes of diagnosis or treatment, nor does it preclude a physician from including the information in patient records, medical treatment or evaluations, including evaluations based on trade secrets that physicians are required to keep. Second, while Act 13 permitted to authorize gas companies’ use of eminent domain, the court emphasized the provision was limited to a “public utility” that has received a certificate of public convenience from the PUC. Third, although Act 13 requires notice to be given by drilling companies or the DEP for spills in public water systems, no notice requirement exists for spills that take place in private water systems.

Furthermore, the Commonwealth Court held that the PUC no longer has the authority to judge municipal ordinances that regulate oil and gas development. The court’s decision was a consequential byproduct of the Pennsylvania Supreme Court’s prior holding that Act 13 could not limit a local government’s right to designate where well-sites, compressor stations, and other oil and gas facilities can be located. While the state argued that the commission still had an essential role in reviewing ordinances, hearing challenges and determining if local governments are eligible to receive their share of impact fees distributed to communities that play host to drilling operations, the court found the provision unsalvageable after the Supreme Court held the uniform zoning provisions of Act 13 were unconstitutional.

As a result of the Commonwealth Court’s holding, municipalities can regulate locations but not the details of drilling operations that the DEP already regulates. As President Judge Dan Pellegrini wrote for the majority opinion, “Local zoning matters will now be determined by the procedures set forth under the [Municipalities Planning Code] and challenges to local ordinances that carry out a municipality’s constitutional environmental obligations.” Judges P. Kevin Brobson and Patricia A. McCullough wrote separate opinions that partially agreed and dissented from the majority opinion.

For questions or concerns about how the decision might affect Marcellus Shale businesses in the region, contact the Burns White Energy Group.

By: Cressinda D. Schlag

On February 21, 2014, the Pennsylvania Supreme Court rejected lawyers’ arguments on behalf of Commonwealth agencies and officials in Robinson Township regarding their reconsideration request of the court’s holding in Robinson Tp., Washington County v. Com., a landmark decision affecting several core provisions of the state’s Marcellus Shale drilling law, Act 13 of 2012, 58 Pa. C.S. §§ 2301-3504. The lawyers for the Commonwealth argued that the court’s decision had established firm factual findings regarding the impact of Act 13, which were unsupported by the record, and employed a new balancing test that was a strong departure from the Supreme Court’s historical practice.

On December 19, 2013, the Supreme Court in Robinson Tp., Washington County v. Com., held that several core provisions of Act 13 of 2012 violated the Environmental Rights Amendment of the state constitution. The Supreme Court’s determination that provisions of Act 13 were unconstitutional, in effect removed Act 13’s preemption of local zoning ordinances, and restrictions on municipal regulations of oil and gas resources. The Supreme Court’s decision also removed Act 13’s requirement that the PA Department of Environmental Protection (DEP) issue waivers for certain well setback requirements along with the Act’s express limitations on a municipality’s ability to challenge the DEP’s issuance of the waivers. The Supreme Court reasoned that these provisions of Act 13 were unconstitutional because they violated the Environmental Rights Amendment of the state constitution, which guarantees “clean air, pure water,” and “preservation of the natural, scenic, historic and esthetic values of the environment,” by removing environmental protections established by local regulatory authorities. The Supreme Court’s determination that local authorities should be permitted to restrict, define, and limit areas where oil and gas operations can take place for the purposes of environmental protection is expected to have a significant impact on oil and gas exploration and production companies operating in the Pennsylvania region.

While the Supreme Court’s denial of the request for reconsideration means that the Court’s earlier holding will be upheld, Robinson Tp., Washington County v. Com., has been remanded to the Commonwealth Court to determine which additional sections of Act 13 should be eliminated. On remand, the Commonwealth Court will specifically determine whether Act 13’s provisions limiting discussions between doctors and patients concerning certain fracking fluids, authorizing gas companies’ use of eminent domain, and stipulating lease notice requirements containing different procedures for gas well neighbors with public water versus private water, are consistent with the Supreme Court’s constitutional balancing test.

So far, local governmental bodies have responded to the Supreme Court’s ruling in Robinson Tp., Washington County v. Com., with a mixture of enthusiasm and apathy. For example, newly seated supervisors in Robinson, Washington County have already initiated plans to revise zoning and drilling regulations related to oil and gas operations that are near agricultural areas or special conservation districts. In stark contrast to Washington County’s current zoning efforts, counties such as Susquehanna and Bradford have reported that they have no plans to enact any zoning ordinances regarding oil and gas operations. In fact, a State Impact Analysis of Pennsylvania, which used data from the Department of Economic and Community Development, suggests that upwards of 45% or two out of every five municipalities, did not have any zoning laws on the books relating to Marcellus Shale operations.

While it is clear that following Robinson Tp., Washington County v. Com., oil and gas exploration and production companies operating in Pennsylvania will be required to diligently investigate and comply with all local zoning ordinances and land use regulations, the full impact of the Supreme Court’s decision cannot truly be assessed until after the Supreme Court’s list of unresolved issues have been addressed by the Commonwealth Court during remand.

For additional questions or concerns about how the decision might affect Marcellus Shale businesses in the region, contact the Burns White Energy Group.

By: Nichole E. Humes, Esq.

On November 22, 2013, the Pennsylvania Supreme Court handed down a ruling that dramatically impacts the nature of asbestos litigation against employers in the Commonwealth in Tooey v. AK Steel Corporation et al., No. 21 WAP 2011. In what has been called a landmark decision, the Supreme Court held that the exclusivity provision of the Workers’ Compensation Act does not apply to occupational diseases which occur outside of the 300-week time period provided in the Act, therefore allowing employers to file common law actions against their employers.

The Workers’ Compensation Act provides that “the liability of an employer under this act shall be exclusive and in place of any and all other liability to such employees, … or anyone otherwise entitled to damages in any action at law or otherwise on account of any injury or death…” 77 P.S. § 481(a) The Act further indicates that occupational diseases include asbestos and cancer resulting from direct contact with, handling of, or exposure to the dust of asbestos in any occupational involving such contact, handling or exposure.” 77 P.S. § 27.1(I).

Decedent, John Tooey, worked for Ferro Engineering as an industrial salesman of asbestos products from 1964 until 1982. In December 2007, 1,300 weeks following his last date of employment, Tooey was diagnosed with mesothelioma and eventually passed away. In 2008, Tooey and his spouse filed tort actions against multiple defendants, including his employer, Ferro, claiming that his mesothelioma was the result of his exposure to asbestos during the time he worked for Ferro. Tooey’s employers filed summary judgment on the basis that his cause of action was barred by the exclusivity provision of Section 303(a). The plaintiff/appellants responded to the summary judgment motions claiming that the federal and state constitutions and Pennsylvania case law permit a tort action against an employer where the disease falls outside the jurisdiction, scope and conversation of the Workers Compensation’ Act. The trial court agreed with the plaintiff / appellant and denied the employer’s motion for summary judgment. The Superior Court of Pennsylvania overruled the trial court and the matter was appealed to the Supreme Court.

The Supreme Court granted review of the case to determine whether under the plain language of the Act, the definition of “injury” excludes an occupational disease that first manifests more than 300 weeks after the last occupational exposure to the hazards of such disease, such that the exclusivity provision of the Act does not apply. In reaching their analysis, the Court stated that when reviewing issues concerning the Act, “we are mindful that the Act is remedial in nature and its purpose is to benefit the workers of this Commonwealth. Thus, the Act is to be liberally construed to effectuate its humanitarian objections, and borderline interpretations are to be constructed and resolved in favor of the injured employee.”

The Court conducted a review of the statutory language of the Act and ultimately concluded that the Act was written in such a way that it only applies if an employee develops an occupational disease within 300 weeks after that last date of employment. As such, if an employee develops an occupational disease after 300 weeks following the last date of employment, the Act does not apply and the employee is permitted to bring a cause of action against their employer at common law.

In reaching this decision, the Court focused on the fact that if it were to interpret the exclusivity provision otherwise, the injured employee were to have no opportunity for redress against their employer in contravention of intentions of the legislature when enacting the Act, the mandates of the Act itself, as well as the dictates of prior common law which provided that the Act should not be construed to allow an employer to avoid liability under both the Act and common law.

The Court concluded that the Workers’ Compensation Act does not apply to Appellant’s claims. The Court therefore held that “the exclusivity provision of Section 303(a) does not preclude Appellants from seeking compensation for their injuries via a common law action against Employers.” In reaching its decision, the Court stated that “it is inconceivable that the legislature, in enacting a statue specifically designed to benefit employees, intended to leave a certain class of employees who have suffered the most serious of work-related injuries without any redress under the Act or at common law.

By: John Cromer, Esq.

The Pennsylvania Supreme Court has finally accepted an appeal to directly address the question of the “Battle of the Restatements.” In Tincher v. Omega Flex, the Supreme Court has agreed to hear Omega Flex’s appeal with regard to whether the Supreme Court “should replace the strict liability analysis of Section 402A of the Second Restatement with the analysis of the Third Restatement.” Additionally, the court has asked the parties whether or not any application of the Third Restatement should be applied prospectively or retroactively.

More to follow on the issues in the Tincher case…

The West Virginia Supreme Court of Appeals voted 5-0 to approve a new trial court rule establishing a Business Court Division in West Virginia. The business court opened its doors on Oct. 10, 2012 handling disputes involving commercial or technology issues, including complex tax appeals. The court is also expected to handle cases that “involve matters of significance to the transactions, operations or governance between business entities.” The goal is for business disputes to be concluded within 10 months from the date the case management order is entered. The court will have seven regions, with each region to encompass 6 to 11 counties.

The Supreme Court has appointed four of seven judges to serve on the business court; each will serve seven-year staggered terms with the ability to do so in succession. Judge Christopher Wilkes (Berkeley, Jefferson and Morgan counties), Judge James Rowe (Greenbrier and Pocahontas counties), and Judge Donald Cookman (Hampshire, Hardy and Pendleton counties) were appointed to start on Oct. 10, 2012; and Wayne County Circuit Judge James Young Jr. was appointed to start on Jan. 1, 2013.

If you would like to discuss the impact of the new West Virginia Business Court, please contact any of the attorneys in the Construction Group at 412-995-3000.