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PUC Divested Of Remaining Marcellus Zoning Duties

In Robinson Township v. Commonwealth, 83 A.3d 901(Pa. 2013) the Pennsylvania Supreme Court invalidated key provisions of Act 13, the statute that removed from local zoning control the power to regulate oil and gas operations through restrictions on the placement and operation of  oil and gas facilities.  The Court remanded to the Commonwealth Court to consider whether other provisions of Act 13, including provisions that give the PUC power to review local zoning ordinances and withhold impact fees, remain viable.

The Commonwealth Court on remand has now invalidated and enjoined enforcement of those other provisions that give the PUC jurisdiction to review the provisions of local ordinances to determine whether they comply with Act 13 and, if not, to withhold impact fees imposed on drillers and operatorsto alleviate the “impacts” of drilling on municipalities or to impose attorney fees and costs on the municipalities.  Robinson Township v. Commonwealth, __A.3d __ (Pa. Cmwlth. 2014)(July 17, 2014).

Specifically, the Commonwealth Court enjoined enforcement of sections 3302 and 3305 to 3309 of the statute.  Section 3302 provides that “[n]o local ordinance adopted pursuant to the MPC [Municipalities Planning Code] or the Flood Plain Management Act shall contain provisions which impose conditions, requirements or limitations on the same features of oil and gas operations regulated by Chapter 32 or that accomplish the same purposes as set forth in Chapter 32. The Commonwealth, by this section, preempts and supersedes the regulation of oil and gas operations as provided in this chapter.”  The Court held that the Supreme Court’s invalidation of the Act 13’s preemption of local regulation necessarily invalidates section 3302.

The Commonwealth Court invalidated sections 3305-3309 for similar reasons.  Section 3305 provides that municipalities may seek an advisory opinion from the PUC as to whether a proposed ordinance complies with Act 13, and provides that well operators and residents may seek similar opinions once a local ordinance is enacted.  Section 3306 provides that any person aggrieved “by the enactment or enforcement of a local ordinance that violates the MPC, this chapter or Chapter 32 (relating to development)” may bring an action in the Commonwealth Court “to invalidate the ordinance or enjoin its enforcement” whether or not initial review by the PUC was sought.  The Court determined that the effect of the Supreme Court’s decision “is that the statutory scheme cannot be implemented. Local zoning matters will now be determined by the procedures set forth under the MPC and challenges to local ordinances that carry out a municipality’s constitutional environmental obligations. Because challenges to those ordinances must be brought in common pleas court, it would further frustrate the purpose of the Act in having a uniform procedure.”  The Court invalidated  section 3307 (relating to the award of attorney fees and costs in actions brought under section 3306), section 3308 (relating to the withholding of impact fees for municipalities enacting or enforcing local ordinances that violate the MPC or Chapters 32 or 33), and  section3309(a) (relating to the applicability of Chapter 33) for similar reasons.

A copy of the Commonwealth Court’s decision is available here.

Commonwealth Court OKs Nonmonetary Contract Claims Against Commonwealth in Casino Central Computer RFP Dispute

In a case arising from the award of the contract for the Gaming Board/Department of Revenue’s Central Computer Control System that monitors transactions in slot machines in Pennsylvania’s casinos, the Commonwealth Court has ruled that a claim based on a contract that seeks relief that is nonmonetary in nature (i.e., for declaratory relief and specific performance) can proceed directly in the Commonwealth Court.  Scientific Games International, Inc. v. Commonwealth, __ A. 3d __ (380 M.D. 2011, filed Nov. 30, 2011).

Scientific Games outbid GTECH, the existing Central Computer provider, in the RFP process for a new contract.  After negotiations following selection as the successful bidder, Scientific executed the contract provided by the Commonwealth, but the Commonwealth thereafter, following a bid protest by GTECH, decided to cancel the RFP as being in the “best interests of the Commonwealth” and extend the GTECH contract.  Scientific filed suit against the Commonwealth in the Commonwealth Court and the Commonwealth and GTECH  filed preliminary objections, arguing that the Board of Claims has exclusive jurisdiction over such disputes, that even if the Court has jurisdiction Scientific has an adequate administrative remedy under the Procurement Code, that in any event the Court cannot order specific performance in a disappointed bidder dispute, and that Scientific lacks standing because it is a disappointed bidder.

The Commonwealth Court overruled all objections. Rejecting the jurisdictional claim, the Court ruled as a matter of first impression that the Supreme Court’s previous holdings that the Board of Claims has exclusive jurisdiction not only over contract damage claims but also over whether a valid contracts exist, were based on the since-repealed Board of Claims Act and that the 2002 Procurement Code expressly permits pursuit of nonmonetary relief, including a declaratory judgment that a contract exists and specific performance if it does exist,  in suits filed in forums other than the Board of Claims.  The Court also rejected the adequate administrative remedy claim, finding that a complainant need not use the Procurement Code administrative process for nonmonetary claims.  The Court likewise rejected standing claims, finding that Scientific was not a disappointed bidder but an entity that claimed it had an enforceable contract.

Below is a copy of the Court’s decision

380MD11 – 11-30-11.pdf