This post, which is the second in a two-part series exploring the scope of Pennsylvania’s Environmental Rights Amendment (the “ERA”), will delve deeper into the text of the ERA as analyzed and explained by the Pennsylvania Supreme Court in Pennsylvania Environmental Defense Fund (“PEDF”) v. Commonwealth, 161 A.3d 911 (Pa. 2017).

In PEDF, the Court ruled that the ERA grants citizens of the Commonwealth two distinct rights: 1) the right to clean air and pure water, and to the preservation of natural, scenic, historic and esthetic values of the environment; and 2) the right of common ownership by the people, including future generations, of Pennsylvania’s public natural resources. The Court noted that the first right, which comes directly from the text of the ERA itself, “places a limitation on the state’s power to act contrary to [the] right, and while the subject of the right may be amenable to regulation, any laws that unreasonably impair the right are unconstitutional.” Despite this declaration by the Court, the scope and meaning of the first right remains undefined. It remains to be seen how the courts will define “clean air” or “pure water” and even more intangibly, who will determine which “scenic” or “esthetic” values are worthy of preservation?

The second right identified by the Court stems from the second and third sentences of the ERA, which provide as follows:

Pennsylvania’s public natural resources are the common property of all the people including generations yet to come.  As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of the people.

In examining these provisions, the Court found that the ERA essentially creates a public trust, the corpus of which is the Commonwealth’s public natural resources. The Commonwealth is the trustee and Pennsylvania citizens are the named beneficiaries of the trust. As trustee, the Commonwealth has a fiduciary obligation to maintain the Commonwealth’s public natural resources for the benefit of its citizens. Specifically, the Court found that the Commonwealth has two basic duties as trustee: 1) to prohibit the “degradation, diminution and depletion” of its public natural resources, whether these harms result from direct state action or from the actions of private parties; and 2) to act affirmatively via legislation to protect the environment.

The application of these concepts was particularly relevant in the PEDF decision, which involved the legislative diversion of royalties received by leasing public land for natural gas extraction from the Pennsylvania Department of Conservation and Natural Resources to the Commonwealth’s general fund. Applying the aforementioned public trust concepts, the Court held that legislation authorizing this re-appropriation of royalties was unconstitutional as it “plainly ignore[d] the Commonwealth’s constitutionally imposed fiduciary duty to manage the corpus of the environmental public trust for the benefit of the people” and permitted the trustee to use trust assets for non-trust purposes, “a clear violation of the most basic of a trustee’s fiduciary obligations” under the ERA.

Despite all of the foregoing, in the wake of the PEDF decision, Pennsylvania land use practitioners and developers are left with more questions than answers. The PEDF Court expressly noted that the Commonwealth’s trustee obligations “are not vested exclusively in any single branch of Pennsylvania’s government”; rather, “all agencies and entities of the Commonwealth government, both statewide and local, have a fiduciary duty to act toward the corpus with prudence, loyalty, and impartiality.” Although there have been several Environmental Hearing Board decisions which addressed challenges under the ERA to the issuance of permits by the Department of Environmental Protection, it likely will take several years before a consensus emerges as to how local entities (such as municipalities or municipal authorities) will interpret their obligations under PEDF.

Please feel free to contact any member of the McNees Wallace & Nurick Land Use Group for assistance with any land use or development issues and/or if you have any questions regarding this post.

Although the Environmental Rights Amendment (the “ERA”) to the Pennsylvania Constitution was ratified in 1971, for many years it was rarely a topic of discussion among land use practitioners. Recent Pennsylvania Supreme Court jurisprudence, however, has revived this long-dormant amendment, and is reason to reconsider the ERA’s potential impact on development projects. This two-part post will explore the history of the ERA, the current legal standard for evaluating ERA violations as articulated by the Supreme Court, and potential future implications of the Court’s decision.

The ERA, found in Article I, Section 27 of the Pennsylvania Constitution, provides as follows:

The people have a right to clean air, pure water, and to the preservation of natural, scenic, historic and esthetic values of the environment.  Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come.  As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of the people.

In Payne v. Kassab, 312 A.2d 86 (Pa. Commw. Ct. 1973), the Pennsylvania Commonwealth Court established a three-prong test to be used in determining whether an action or activity violated the ERA:

  1. Was there compliance with all applicable statutes and regulations relevant to the protection of the Commonwealth’s public natural resources?
  2. Did the record demonstrate a reasonable effort to reduce the environmental incursion to a minimum?
  3. Did the environmental harm which would result from the challenged decision or action so clearly outweigh the benefits to be derived therefrom that to proceed further would be an abuse of discretion?

Although the Payne test contained three parts, courts primarily focused on the first prong of the analysis. As a result, for decades, development projects which complied with all environmental laws and regulations generally were presumed to comply with the ERA.

The Payne test first was called into question with the Pennsylvania Supreme Court’s decision in Robinson Township v. Commonwealth, 83 A.3d 901 (Pa. 2013). In Robinson Township, a plurality of the Court found portions of a proposed amendment to the Pennsylvania Oil and Gas Act unconstitutional under the ERA. While the plurality in Robinson Township decision was critical of the Payne test, the fact it was a mere plurality meant that the Payne test was not expressly overturned.

In 2017, the Pennsylvania Supreme Court again considered the scope of the ERA in Pennsylvania Environmental Defense Fund (“PEDF”) v. Commonwealth, 161 A.3d 911 (Pa. 2017). In PEDF, the Court expressly overruled the Payne test and found that “[t]he proper standard of judicial review [for alleged violations of the ERA] lies in the text of Article I, Section 27 itself as well as the underlying principles of Pennsylvania trust law in effect at the time of its enactment.” In so ruling, the Court held that the ERA grants citizens of the Commonwealth two separate rights: 1) the right to clean air and pure water, and to the preservation of natural, scenic, historic and esthetic values of the environment; and 2) the right of common ownership by the people, including future generations, of Pennsylvania’s public natural resources. Part two of this post will explore the scope and nature of these rights, and their potential implications, in greater detail.

Please feel free to contact any member of the McNees Wallace & Nurick Land Use Group for assistance with any land use or development issues and/or if you have any questions regarding this post.

A large-scale natural gas liquids pipeline project traversing the Commonwealth has shed light on an oft misunderstood legal principle regarding the municipal regulation of utilities. Municipalities typically operate under the assumption that essentially all land uses, including public utilities, are subject to municipal regulation to at least some degree (e.g., zoning ordinances, subdivision and land development ordinance, etc.). But, most public utility facilities actually are not subject to local regulation. A pair of recent Commonwealth Court cases reinforce this legal principle that is nearly sixty-five years old but rarely reflected in municipal ordinances.

In The Delaware River Keeper Network, et al. v. Sunoco Pipeline L.P., 2018 Pa. Commw. LEXIS 74 (February 20, 2018) and Flynn, et al. v. Sunoco Pipeline L.P., 2018 Pa Commw. Unpub. LEXIS 179 (March 26, 2018), the Commonwealth Court reviewed efforts by opponents to Sunoco Pipeline L.P.’s Mariner East 2 natural gas liquids pipeline project to block the project because the pipeline allegedly violated provisions of local land use ordinances. The local ordinances permitted gas and liquid pipeline facilities only in certain zoning districts (not including any residential districts) and required significant setbacks between pipelines and other structures. The opponents brought actions in the trial courts under Section 617 of the Municipalities Planning Code (the “MPC”) alleging that the local municipalities had failed to properly enforce the land use ordinances. The trial courts rejected the opponents’ arguments.

The Commonwealth Court affirmed the trial court in both cases – noting the long-standing principle that non-building facilities of public utility corporations are not subject to municipal zoning regulations. The Commonwealth Court looked at numerous Pennsylvania court decisions dating back to 1954, and in each decision the court held that the municipal regulation of public utilities is essentially pre-empted by the Public Utility Code. The Public Utility Commission has the sole jurisdiction to regulate the location of non-building public utility corporation facilities like the Mariner East 2 pipeline. Municipalities have jurisdiction to regulate only public utility corporation buildings.

The rationale for this legal principle was explained by the Pennsylvania Supreme Court in 1954:

Local authorities not only are ill-equipped to comprehend the needs of the public beyond their jurisdiction, but, and equally important, those authorities, if they had the power to regulate [public utility facilities], necessarily would exercise that power with an eye toward the local situation and not with the best interests of the public at large as the point of reference. . . . If the power of the municipality were held paramount, the [Public Utility] Commission could not compel the utility to provide adequate service or in anywise control the expansion or extension of the utility’s facilities if an order of the [Public Utility] Commission conflicted with action taken by any political subdivision of the State.

Duquesne Light Co. v. Upper St. Clair Twp., 105 A.2d 287, 293 (Pa. 1954). Thus, municipalities likely would focus their regulations of public utility corporation facilities through a lens that does not consider the multi-municipal breadth of most public utility corporation projects.

Most public utility corporation facilities are components of linear projects that cross multiple municipalities rather than a typical land use project that usually is located entirely within one municipality. It would be very difficult to provide the public utility service if the project was subject to different locational restrictions and design standards every few miles as the project crossed municipal boundaries.

Countless municipal land use ordinances contain provisions attempting to regulate public utility corporation facilities without regard to the well-established principle explained above. It is typical for a municipal zoning ordinance to permit utility facilities or “essential services” in most but not all zoning districts. Even where permitted in all districts, there usually are setback requirements, minimum fence standards and other design requirements imposed by the ordinance. These provisions simply do not apply to non-building public utility facilities. Many ordinances also parrot language from Section 619 of the MPC. But, the language in Section 619 of the MPC applies only to situations where a public utility corporation petitions the Public Utility Commission to exempt a building from municipal regulation. The language of Section 619 of the MPC has no bearing on non-building facilities.

Municipalities should review their land use ordinances to determine whether their regulations are consistent with the pre-emption principle discussed above. Maintaining ordinances that contain provisions that are inconsistent with the law will create confusion for municipal officials. Those same provisions also will cause residents to have unreasonable expectations about what can be required of the public utility corporation. Public utility corporations should consider working with municipalities to design their facilities with municipal regulations in mind wherever possible, even if pre-empted, in an effort to foster a positive working relationship with the municipality.

Please feel free to contact any member of the McNees Wallace & Nurick Land Use Group for assistance with any land use or development issues and/or if you have any questions regarding this post.

With four million Airbnb listings worldwide, this rapidly growing short-term rental (STR) site and others like it have property owners, neighborhood groups, local government, and the real estate industry running in circles – and looking for a vacation spot. In the case of STRs, hosts are enjoying extra income and municipalities are keeping properties on the tax roll, while some nearby property owners are seeing a spike in their local rental rates or disruption to neighborhoods. In this post, the second in a two-post series (See “Regulating Short-Term Rentals,” by Jamie Strong), we discuss a case out of Lackawanna County decided this past December. The case of interest in this post was decided approximately six months after a case out of Monroe County – now on appeal to the Pennsylvania Supreme Court – was decided by the Commonwealth Court.

In Reihner v. City of Scranton Zoning Hearing Bd., 176 A.3d 396 (Pa. Commw. Ct. 2017), George and Judith Reihner (Reihners) were served a Notice of Violation (NOV) by the City of Scranton for allegedly running an illegal bed and breakfast from their home. As often is the case with STRs, the City issued the NOV after receiving complaints from neighbors. The Reihners had been renting the third floor of their Victorian mansion to generate additional income as hosts through Airbnb, but they never considered their arrangement a “bed and breakfast.” Accordingly, the Reihners appealed the NOV to the City’s Zoning Hearing Board (ZHB) where they argued their use was not a “bed and breakfast” as defined by the City’s Zoning Ordinance (Ordinance). The Ordinance’s definition of “bed and breakfast” concluded with: “…and which does not provide any cooking facilities or provision of meals for guests other than breakfast.” Based on the Ordinance’s definition, the Reihners contended their use could not be considered a “bed and breakfast” because they did not offer guests breakfast. The ZHB, however, upheld the NOV.

The Reihners appealed the ZHB’s decision to the Court of Common Pleas, which concluded the Reihners’ activities clearly met the Ordinance’s definition of “bed and breakfast” because the definition did not require that breakfast must be served. The Reihners appealed to the Commonwealth Court which ruled in favor of the couple on multiple grounds. The Commonwealth Court found the Ordinance’s definition of “bed and breakfast” to be unclear and ambiguous. The Court reminded municipalities that when an ordinance is ambiguous, the ordinance must be interpreted in favor of the landowner and in favor of the least restrictive use of the property. Additionally, the Court cited the Statutory Construction Act of 1972, which provides that “[w]ords and phrases shall be construed according to rules of grammar and according to their common and approved usage.” Consequently, given that the definition of the term uses the exact words “bed and breakfast,” providing a bed without breakfast cannot be a “bed and breakfast.” The Reihners maintained breakfast was never offered or served, so the Court held the ZHB abused its discretion by narrowing the terms of the Ordinance and further restricting the use of the Reihners’ property. Accordingly, the NOV was overturned.

Cases like this and those discussed in our prior post are popping up more and more, setting the stage for battles across the Commonwealth. As seen in these cases, antiquated ordinances and ambiguous language in them are often the greatest hurdles for municipalities attempting to determine how a new use, such as an STR, should be treated. Further, what works for one municipality may not work for another. In the absence of clear regulations, STR-related uses – and numerous other newer uses such as craft breweries and marijuana dispensaries – are being shoe-horned into out of date ordinances, leaving all involved struggling to find the right fit. By analyzing pros and cons, seeking community input, and monitoring data and trends, mutually-agreeable language and definitions can be put into place. Indeed, in an entrepreneurial world where new uses are being created almost daily, it is imperative that municipalities stay on top of land use ordinances to ensure such ordinances appropriately account for new and significant uses because failing to do so leads to discord in the community and potential litigation.

Please feel free to contact any member of the McNees Wallace & Nurick Land Use Group for assistance with any land use or development issues and/or if you have any questions regarding this post.

The short-term rental (STR) market for using peer to peer rental services such as Airbnb and VRBO has grown significantly in recent years. These services allow property owners to realize the economic benefit of renting all or part of their properties as an STR.   However, there are corresponding concerns raised by neighboring property owners who feel STRs could result in the loss of a sense of community given the transient nature of such a use. The biggest challenge for a municipality that wants to regulate STRs has been attempting to regulate the use under an existing zoning ordinance that does not specifically address the use.

Recent Commonwealth Court cases, most originating in Monroe County, highlight the difficulty that municipalities have in attempting to regulate STRs under zoning ordinances that do not specifically address the use. In the Monroe County cases, the municipalities attempted to regulate STRs by determining that the use was not a permitted single-family dwelling use but rather was a use not permitted in the underlying zoning district such as a “lodge,” “tourist home” or “transient lodging business.” In all three cases, and others, the Commonwealth Court looked at the definitions in the zoning ordinances and found that the use categories relied upon by the municipalities were not applicable and the STRs were not prohibited.

This is the first post in a two-post series and focuses on one of the Monroe County cases, which was decided in June 2017 by the Commonwealth Court and which the Pennsylvania Supreme Court recently agreed to hear on appeal. The second post in the series focuses on a case out of Lackawanna County that was decided by the Commonwealth Court this past December.

The case to be heard by the Supreme Court is Slice of Life, LLC v. Hamilton Township Zoning Hearing Board, 164 A.3d 633 (Pa. Commw. Ct. 2017). Specifically, the Supreme Court will be reviewing the issue of whether the Commonwealth Court ignored the precedent established by the Supreme Court in the case of Albert v. Zoning Hearing Board of North Abington Township, 854 A.2d 491 (Pa. 2004).

In the Slice of Life case, the Township issued an enforcement notice to the property owner alleging that the property was being used as a hotel or other type of transient lodging in violation of the zoning ordinance. According to the zoning ordinance, single-family residential was the only permitted use in the relevant zoning district. Unlike in the other Monroe County cases, the property owner in the Slice of Life case did not live at the property. The property owner appealed the enforcement notice and the zoning hearing board held eight hearings over a period of ten months. The zoning hearing board denied the property owner’s appeal and the Court of Common Pleas upheld the zoning hearing board’s decision.

The Township’s zoning ordinance defined the term “family” as “[o]ne or more persons, occupying a dwelling unit, related by blood, marriage or adoption, living together as a single housekeeping unit and using cooking facilities and certain rooms in common.” The zoning ordinance also defined the term “hotel.” However, the terms “single family,” “tourist home,” “transient lodging,” and “transient tenancies” were not defined in the zoning ordinance.

The Township argued STRs were not consistent with a single family residential use and that the Albert case was controlling on that issue. In the Albert case, the Court was required to determine whether a single family residential dwelling could be used as a halfway house for recovering alcoholics and drug addicts where the term “family” was not defined in the zoning ordinance. The Supreme Court stated that in the absence of a definition in the zoning ordinance of the term “family,” a “’single housekeeping unit’ must be considered the plain and ordinary meaning of ‘family’ in the zoning context.” The Supreme Court stated that in addition to functioning as a family, the “composition of the group must be sufficiently stable and permanent so as not to be fairly characterized as purely transient.” In the Albert case, the Supreme Court found that the residents of the halfway house would only be staying for short periods of time and that the resulting “instability and transience is simply incompatible with the single-family concept.” The Commonwealth Court discussed the Albert case and noted that in the Albert case, unlike in the Slice of Life case, the term “family” was not a defined term in the zoning ordinance which required that the Court determine the meaning of the term.

The Commonwealth Court found that the fact that the property owner did not live at the property did not ultimately affect the outcome of the case. What appeared to be controlling was whether the property was being used as a single family residential use. The Commonwealth Court found that there was an ambiguity in the language of the Township’s zoning ordinance and that the ambiguity required that the court interpret the language in favor of the property owner. What wasn’t discussed in the Slice of Life decision was whether the tenants actually met the definition of a “family” as that term was defined in the zoning ordinance. It appears that the Supreme Court is interested in reviewing whether the transient character of the occupants of the house must be given greater consideration by the courts in STR cases.

Please feel free to contact any member of the McNees Wallace & Nurick Land Use Group for assistance with any land use or development issues and/or if you have any questions regarding this post.