The Commonwealth Court has ordered the state Public Utility Commission to cease and desist from reviewing municipal ordinances to determine whether they comply with the Pennsylvania Municipalities Planning Code and the state Oil and Gas Act.

The agency was charged with the task under Section 3305, Chapter 33 of the recent Act 13 amendments to the Oil and Gas Act but Senior Judge Keith B. Quigley said in an order issued Thursday that the PUC should have ceased performing the reviews following the Commonwealth Court’s July 26 en banc ruling invalidating as unconstitutional those amendments that require municipalities to adopt uniform zoning ordinances that would allow drilling in all zoning districts.

Counsel for the plaintiffs told The Legal on Friday that the PUC has been withholding impact fee payments to several municipalities and citing the pending ordinance reviews as the reason.

According to Quigley, the July 26 order permanently enjoined the PUC from enforcing Section 3304 of the Oil and Gas Act, which requires uniformity among all local ordinances to “allow for the reasonable development of oil and gas resources,” as well as all remaining provisions enforcing Section 3304.

Therefore, Quigley said, the order also permanently enjoined the PUC from performing reviews under Section 3305.

“Section 3305 is a provision enforcing Section 3304 as it grants the PUC authority to review proposed local ordinances at the request of municipalities and to issue orders after review of local ordinances at the request of aggrieved parties,” Quigley said in Thursday’s one-page order, adding that the July 26 order enjoined the PUC from reviewing ordinances for compliance with both the MPC and the Oil and Gas Act.

Thursday’s order granted an application for relief filed by the plaintiffs in the ongoing Act 13 litigation — the Washington County townships of Robinson, Peters, Cecil and Mount Pleasant, along with South Fayette Township in Allegheny County and Yardley Borough and Nockamixon Township in Bucks County, as well as the Delaware Riverkeeper Network, Delaware Riverkeeper Maya van Rossum, Peters Township Councilman David M. Ball and Monroeville, Pa.-based Dr. Mehernosh Khan.

In the application, filed September 10, the plaintiffs alleged that despite the Commonwealth Court’s July 26 ruling, which is currently pending on appeal before the state Supreme Court, the PUC “has now chosen to reverse its prior policy of restraint until the validity of the legislation has been judicially determined, and to commence its zoning ordinance reviews by reviewing the zoning ordinances of two of the municipal petitioners (i.e. Township of South Fayette and Robinson Township).”

The plaintiffs had filed suit on March 28 against the state, the PUC, the Attorney General’s Office and the Department of Environmental Protection, alleging that Act 13 unconstitutionally robs municipalities of the power to regulate drilling and gives that power to the drilling industry itself.

According to the plaintiffs’ September 10 application, the PUC had stated in a July 2 letter to South Fayette Township that it would not be processing Section 3305 ordinance review requests “due to the uncertainty surrounding the pending litigation.”

On July 26, the Commonwealth Court ruled 4-3 to overturn Section 3304, reasoning that requiring municipalities to bring their zoning ordinances into compliance with Act 13 means forcing local governments to violate substantive due process by allowing incompatible uses in their districts.
Despite the court’s ruling, the PUC sent a written request on August 20 to South Fayette Township announcing its intention to review the township’s ordinance pursuant to Section 3305(b), according to the plaintiffs’ application.

On August 22, according to the plaintiffs’ application, the PUC sent out a letter informing interested parties that it would begin processing review requests.

On August 30, the PUC informed Robinson Township that it intended to review its ordinance, the plaintiffs said in their application.

The plaintiffs alleged in their application that the PUC’s decision to begin processing review requests was a clear violation of the July 26 ruling.

“Section 3305(b) of the act is clearly an enforcement provision of Section 3304, and is therefore enjoined until further order of this court,” the plaintiffs said in their application, adding that allowing the PUC to proceed with ordinance reviews while questions regarding the constitutionality of Act 13 are pending before the Supreme Court “does not make sense from either a practical or judicial economy standpoint.”

The PUC, however, said in its September 21 answer to the application that it interpreted the July 26 order as enjoining Chapter 33 provisions “only to the extent that they enforce Section 3304, but not to the extent they enforce other provisions, which Section 3305(b) expressly does.”

“Had this court’s intent been to strike down or enjoin other provisions of Chapter 33 wholesale, including Section 3305, there would have been no need for the qualifying language; the court would have simply enjoined ‘all remaining provisions of Chapter 33,’” the PUC said in its answer. “Having not done so, the court, at least as the commission reasonably understands the order, intended only to take away the teeth of Section 3304, and not any other remaining provision of Chapter 33, like Section 3305(b), that supply enforcement mechanisms for provisions other than Section 3304, including Sections 3302 and 3303.”

But Quigley disagreed in Thursday’s order, calling Section 3305 “a vehicle by which Section 3304 is enforced.”

One of the attorneys for the plaintiffs, John M. Smith of Smith Butz in Canonsburg, Pa., said in an emailed statement Friday that his clients “correctly interpreted the law as to the PUC’s role in ordinance reviews and despite the clear statutory provisions, the PUC sought to go forward anyway to deny close to $1 million of impact fee monies to these select Act 13 plaintiffs.”

“As the Commonwealth Court agreed completely with our position, we fully expect and demand that the PUC immediately release the impact fees to these four communities,” Smith said.

According to Jordan B. Yeager of Curtin & Heefner in Doylestown, Pa., who also represents the plaintiffs, those four municipalities are South Fayette, Peters, Cecil and Mount Pleasant.

Yeager said he was “pleased that the court rejected the PUC’s continuing attempts to ignore what the court previously laid down.”

Counsel for the PUC and the DEP, Matthew H. Haverstick of Conrad O’Brien in Philadelphia, could not be reached for comment Friday.

Zack Needles can be contacted at 215-557-2493 or zneedles@alm.com. Follow him on Twitter @ZNeedlesTLI.