Pennsylvania Environmental Defense Foundation v. Commonwealth of Pennsylvania

In the late 19th century, the Marcellus Shale Formation was discovered, revealing a substantial reservoir containing up to 10% of North America’s natural gas. However, natural gas extraction has raised significant environmental concerns, polluting land, water, and air. Pennsylvania initiated the leasing of public lands in 2008, oscillating between permitting and prohibiting extractive practices due to their environmental impacts. The Pennsylvania Department of Conservation and Natural Resources (DCNR) exercised caution, withholding further developments to assess and monitor the long-term environmental impact of gas activities on forested, publicly-owned land.

Between 2008 and 2014, substantial pressure from the Pennsylvania Legislature and Executive branches prompted the DCNR to continue leasing state lands to generate revenue and address budget shortfalls. Fiscal code amendments were passed during this period, redirecting over USD 335 million from conservation purposes to a General Fund, allowing for diverse uses, including oil and gas extraction. These fiscal amendments prompted an environmental and constitutional challenge by the Pennsylvanian Environmental Defense Fund (PEDF) in 2012. PEDF alleged that the state’s budgetary decisions for 2009-2015 violated Pennsylvania’s 1971 Environmental Rights Amendment (ERA), compromising the DCNR’s ability to preserve the environment and natural resources. The government’s failure to adequately evaluate the negative impact of diverting funds on conservational operations was a central argument.

The ERA mandates that the Commonwealth conserve and maintain public natural resources for the benefit of the people. However, the precedent set by Payne v. Kassab (PA 1973) had substantially weakened ERA’s protection, introducing a 3-part test to determine violations of the constitutional provision. Although PEDF initially won in the Commonwealth Court, the decision was overturned on appeal, applying a different test articulated in Robinson Township v. Commonwealth (PA 2013). Subsequently, PEDF appealed to the Supreme Court of Pennsylvania.

The Supreme Court addressed whether the Payne or Robinson tests of judicial review applied to challenges under the ERA and whether the contested fiscal amendments violated the ERA. The Court overturned the Payne test, asserting that ERA’s text must be strictly construed. ERA mandated the Commonwealth, as the trustee, to conserve and maintain public natural resources for the benefit of the populace. In other words, the Commonwealth needed to ensure the peoples’ right to a healthy environment (R2HE). The legislative actions were deemed facially unconstitutional as they disregarded the Commonwealth’s fiduciary duty to manage the environment. The money should have been exclusively allocated for conservation purposes. Furthermore, the Court held that ERA itself, as a fundamental right, was self-executing. This meant parties could appeal directly to the constitutional provision without bringing a claim under a separate act.

The decision had far-reaching implications for a constitutional right that state agencies and private actors had largely ignored. It declared the people’s R2HE, limiting the state’s ability to infringe upon the fundamental right and mandate its enforcement, and creating a legal pathway for direct appeals.

PEDF pursued its claim against the Pennsylvania government and its Governor (together the Commonwealth/Respondent), utilizing the fiduciary provisions of the Declaratory Judgment Act (DJA). Under the DJA, interested parties have the right to seek declarations of their rights and to compel executors, administrators, trustees, and fiduciaries to either take or refrain from actions affecting those rights. PEDF alleged that the Commonwealth’s diversion of resources, fiscal policies, and promotion of natural gas leasing violated their R2HE, guaranteed by ERA.

Specifically, PEDF argued that the fiscal policies regarding royalties were facially unconstitutional, as they disregarded the constitutional fiduciary duty to manage the environmental public trust. The statute’s plain language was unequivocal: the Commonwealth bore a fiduciary responsibility, and the general benefits derived from leasing and income from natural gas were improperly considered permissible use of the environmental public trust.

The Supreme Court acknowledged the formidable hurdle of demonstrating that legislation violates the Constitution, as constitutional conformity by the other branches of government is presumed. Nevertheless, the Court determined that PEDF successfully met this burden. It applied the interpretive principle of ‘popular understanding’—examining how people understood the provision when it was adopted. The language affirmed the fundamental R2HE protected by the Pennsylvania Constitution.

The ERA’s second clause explicitly declares that all of Pennsylvania’s public natural resources are collectively owned by its citizens, including future generations. Consequently, the Commonwealth is entrusted with the responsibility of serving as a trustee for all people across time. The Commonwealth Court affirmed that cases concerning property protected by the Constitution and held in trust for current and future generations of Pennsylvanians were appropriately within its jurisdiction. The Supreme Court endorsed this interpretation.

It is crucial to recognize that the immediate economic gains from natural gas leasing cannot supersede or diminish the ongoing fiduciary obligation of the Commonwealth to safeguard the interests of future Pennsylvanians.

In its initial filing with the Commonwealth Court, PEDF raised over 20 issues. These issues primarily focused on ERA’s environmental and R2HE protections. However, the Commonwealth Court deemed some of these issues unsuitable for consideration under the DJA. Thus, it led to their dismissal and the court focusing on three key issues. On appeal to the State Supreme Court, PEDF presented ten issues. The Court condensed these issues to two pivotal questions: the appropriate standard of judicial review for government actions under ERA and the constitutionality of the contested Fiscal Code Amendments.

Although PEDF presented an array of legal arguments initially, the court allowed the judiciary to select the most pertinent issues. This strategic approach potentially increased the likelihood of certain arguments resonating with the court and ultimately leading to a favorable decision.

PEDF argued the Commonwealth bore a legal obligation to safeguard and sustain natural resources as part of the “public trust.” This concept asserts that the environment belongs to the people, and the government holds a fiduciary duty to preserve it. This obligation is explicitly articulated in the third clause of the ERA. PEDF contended that the diversion of resources from conservation to a General Fund, subsequently used for leasing activities, violated the Commonwealth’s constitutional duty. This diversion reduced funding for the DCNR and increased extractive activities detrimental to the environment.

The Supreme Court sided with PEDF, affirming that the Commonwealth had failed to fulfill its role as a “trustee” by prioritizing profits over conservation efforts. Compliance with the government’s constitutional obligation should be assessed based on the benefits and sustainable use of natural resources, rather than merely the financial gains derived from extractive projects. ERA obligated the Commonwealth to safeguard and restore public natural resources with “prudence, loyalty, and impartiality,” to “prevent and remedy the degradation, diminution, or depletion” of these invaluable assets.

In 1971, Pennsylvania added the Environmental Rights Amendment (Pa. Const. art. I, §27), thereby recognizing R2HE for current and future generations. The Supreme Court of Pennsylvania emphasized that the General Assembly derives its authority from the Pennsylvania Constitution, empowering it to enact laws to promote public health, safety, and general welfare. However, the powers vested in the General Assembly are circumscribed and delimited by the fundamental, inherent, and unalienable rights enshrined in Article I of the Constitution. These rights are explicitly carved out from the general governmental powers and are deemed sacrosanct and inviolable. This means that R2HE cannot be abridged through legislative or executive actions.

The Court acknowledged that ERA confers two distinct rights upon the people. First, individuals possess R2HE, which limits the Commonwealth’s authority to encroach upon and undermine this right. Second, Pennsylvania’s current and future generations collectively own the state’s public natural resources, encompassing lands within state forests and parks leased for oil and gas exploration and the oil and gas resources themselves.

The decision had profound implications for a constitutional right that state agencies and private entities had long overlooked. By reevaluating the inoperative ERA, the Court’s interpretation of the provision was narrowed to align with the provision’s layman’s understanding. It unequivocally affirmed the people’s entitlement to a healthy environment, constraining the state’s authority to encroach upon this fundamental right and compelling the Commonwealth to enforce it as part of its fiduciary duties. The ruling initiated a pivotal shift in environmental jurisprudence.