On June 20, the Pennsylvania Supreme Court issued a significant and potentially far-reaching opinion in Pennsylvania Environmental Defense Foundation (PEDF) v. Commonwealth of Pennsylvania, 2017 Pa. LEXIS 1393, No. 10 MAP 2015 (June 20, 2017). While initial attention has been paid to the decision's potential monetary impact via the use of oil and gas lease funds, a more detailed analysis reveals that the longer lasting impact of PEDF will be found in its pronouncements on the scope of judicial review of government actions and, perhaps, implicating the separation of powers among the three branches of the government.

Background

On its face, the case involved the challenge by PEDF to the Legislature's transfer of certain funds from the Oil and Gas Lease Fund to general governmental purposes. PEDF argued that those transfers were unconstitutional as being contrary to the commonwealth's duties as a trustee under the Environmental Rights Amendment (ERA), (Pa. Envtl. Def. Found., 2017 Pa. LEXIS 1393 at *26). The ERA provides: “The people have a right to clean air, pure water and to the preservation of the 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 all the people.

The Commonwealth Court had held (Pennsylvania Environmental Defense Foundation v. Commonwealth, 108 A.3d 140 (Pa. Cmwlth. 2015)), that since the transferred funds were used for the general benefit of the public (i.e., “the benefit of all the people”), there was no constitutional infirmity. The Supreme Court reversed. Four justices (Christine Donohue, Debra Todd, Kevin Dougherty and David Wecht) held that the challenged provisions of prior fiscal codes were unconstitutional because the funds were not transferred to uses consistent with the trust purposes, namely for conserving and maintaining public natural resources. Justice Max Baer concurred in part but dissented from the majority's application of private trust principles to the analysis, arguing that public trust principles should apply and that, accordingly, the Commonwealth Court's decision should be affirmed. Chief Justice Thomas Saylor joined in the dissenting portion of Justice Baer's opinion only.

The Impact of PEDF

Most of the initial media attention has been focused on the monetary implication of the decision. However, that aspect of the decision may have limited impact. While they found the challenged fund transfers to be unconstitutional, the majority noted that DCNR is not the only agency committed to conserving and maintaining public natural resources and specifically noted: “the General Assembly would not run afoul of the constitution by appropriating trust funds to some other initiative or agency dedicated to effectuating Section 27.” One can readily envision multiple uses of oil and gas lease funds that would not violate the court's limitations. For example, the Department of Environmental Protection's (DEP) entire function is essentially “dedicated to effectuating Section 27.” More narrowly, the DEP has historically been in need of more funds to address acid mine drainage from abandoned coal mines which date back to the 19th century, some of which are located on public lands, and the very popular “Growing Greener” program is always searching for a secure funding source. Either of these purposes would seem to satisfy the court's holding. To the extent that PEDF was looking to limit the use of monies in the Oil and Gas Lease Fund to expenditures for state parks and forest lands, they may have achieved a limited victory.

Arguably, the constitutional limitation on the use of funds derived from the lease of oil and gas resources under state parks and forests was all the court needed to examine to address the PEDF challenge. However, on appeal the court specifically elected to examine the “proper standards for judicial review of government actions and legislation challenged under [the ERA] in light of Robinson Township v. Commonwealth, 83 A.3d 901 (Pa. 2013) (plurality)” (Pa. Envtl. Def. Found., 2017 Pa. LEXIS 1393 at *33-34). This portion of the court's decision has the potential to have a far greater and far longer lasting impact than the question of how to spend lease funds. The majority opinion will be prime fodder for law review articles and will likely spawn much litigation. Depending on how broadly the opinion is read and applied in the future, it is not too extreme to see a potential constitutional crisis brewing between the court and the Legislature.