Overview of Force Majeure
With COVID-19 headlines dominating the news cycle, and with no end in sight to the uncertainty that the virus brings, affected businesses are wise to consider whether the current pandemic qualifies as a “force majeure.”  In the last few weeks, the Chinese government has issued “force majeure certificates” to domestic businesses as a way of shielding companies from breach of contract claims, American businesses are sending mass e-mails to customers explaining that the virus prevents the company’s performance or operations, and businesses in an array of industries have sent formal inquiries to their service providers seeking confirmation of continued performance.

What is “Force Majeure”
The defense of force majeure will excuse a party’s performance under a contract if
Continue Reading Force Majeure Provisions and the Impacts of COVID-19

In the 2007 film There Will Be Blood, Eli Sunday offers to sell Daniel Plainview the drilling rights to land of the recently-deceased William Bandy. Plainview mocks Sunday’s offer, revealing that he has already drained Bandy’s land dry of oil, and the land is now worthless. To illustrate, Plainview uses the analogy of reaching a straw across the room to drink Sunday’s imaginary milkshake. Plainview shouts “I drink your milkshake . . . I drink it up!” in Sunday’s face.

The practice of draining hydrocarbons from beneath an adjoining property is nothing new and is subject to the legal concept known as “the rule of capture.” In the context of oil and gas law, the rule of capture precludes liability for draining oil and gas from under another’s property so long as there has been no trespass. In Pennsylvania, a trespass occurs when a person intrudes onto property owned by someone else without their consent or places an object on someone’s property without their consent. On January 22, 2020, the Supreme Court of Pennsylvania declared that protection under the rule of capture applies to hydraulic fracturing, i.e. “fracking.” More specifically, developers who use hydraulic fracturing may rely on pressure differential
Continue Reading I Drink Your Milkshake! Fracking and the Rule of Capture

Sometimes, the storm hits years after a development is complete. Indeed, stormwater runoff can give rise to liability against a developer long after stormwater management facilities are constructed according to an approved final plan. Accordingly, it is important for developers to understand (1) how trespass is applied in the stormwater context and (2) that they might never be fully insulated from such claims.

Pennsylvania follows the “common-enemy rule” with respect to stormwater runoff. Under the Rule, an “upper” landowner may discharge its stormwater on the land of a “lower” landowner. However, water artificially diverted from its natural channel across a “lower” landowner’s property can be considered a trespass. In that case,
Continue Reading Water Flows Downhill – Liability Flows Up

Did you know that under certain circumstances a private individual can acquire government-owned land without the government’s consent? Although the Commonwealth’s immunity from adverse possession claims has never been in question, whether political subdivisions of the Commonwealth are subject to adverse possession claims has been less clear. On September 26, 2019, the Supreme Court of Pennsylvania addressed this matter in the case of City of Philadelphia v. Galdo, 2019 Pa. LEXIS 5452. In Galdo, the Supreme Court held that political subdivisions in Pennsylvania may be subject to claims of adverse possession, except where the property is devoted to a public use. The facts of Galdo provide great insight into this matter.

In 1974, the City of Philadelphia condemned 1101-1119 N. Front Street in Philadelphia for transit purposes related to the construction of Route I-95 (the “Parcel”). The City, however, never physically occupied the Parcel or used it for public transit purposes as originally intended. Instead, the Parcel remained vacant and unmaintained, with the City viewing it as “surplus property” that was not actively being used.
Continue Reading Use It or Lose It: Political Subdivisions are Subject to Claims of Adverse Possession

In baseball, if the base runner and the ball arrive at first base at the same time the tie is resolved in favor of the base runner and they are safe.  Under the Pennsylvania Municipalities Planning Code (MPC), if there is any ambiguity when interpreting a zoning ordinance provision, the ambiguity is interpreted in favor of the property owner and against the extension of any restriction in the ordinance provision.  This rule was applied by the Commonwealth Court recently in the case of Alleman v. North Newton Township Board of Supervisors.

In the Alleman case, the property owner owned approximately 112 acres of split-zoned land in North Newton Township.  Approximately forty acres of the property were in the Township’s Agricultural District and approximately seventy-two acres were in the Township’s Rural Residential District.  The property owner had a hog feeding operation on a portion of the forty acres
Continue Reading A Tie Goes to the Runner (or the Property Owner): Interpreting Ambiguity in Zoning Ordinances

In a series of posts last year (available HERE and HERE), I discussed the Pennsylvania Supreme Court’s revival of the long-dormant Environmental Rights Amendment (“ERA”) to the Pennsylvania Constitution.  This summer, the Pennsylvania Commonwealth Court authored another chapter in the ERA saga.  Stick with me, because it is about to get technical…

As you may recall, in Pennsylvania Environmental Defense Fund (“PEDF”) v. Commonwealth, 161 A.3d 911 (Pa. 2017), the Pennsylvania Supreme Court found that the ERA created a public trust, the corpus of which was all of Pennsylvania’s public natural resources.  In this analogy, the Commonwealth is the trustee and Pennsylvania’s citizens are the named beneficiaries of the trust.  When state park land is leased by Pennsylvania’s Department of Conservation and Natural Resources for oil and natural gas extraction, any royalties – monthly payments based on the gross production of oil and gas at each well – are proceeds received in exchange for trust assets.  As a result, royalties must be returned to the trust as part of its corpus.  In other words, they are earmarked for the conservation and maintenance of Pennsylvania’s natural resources.
Continue Reading PEDF v. Commonwealth Redux: The Commonwealth Court Weighs In