Wayne Land & Mineral Grp., LLC v. Del. River Basin Comm'n

• Decision Date: 23 March 2017
• Docket Number: 3:16–CV–00897
• Citation: 247 F.Supp.3d 477
• Parties: WAYNE LAND AND MINERAL GROUP, LLC, Plaintiff, v. DELAWARE RIVER BASIN COMMISSION, Defendant, and Delaware Riverkeeper Network Maya K. Van Rossum, the Delaware Riverkeeper, Intervenors–Defendants
• Court: U.S. District Court — Middle District of Pennsylvania

247 F.Supp.3d 477

WAYNE LAND AND MINERAL GROUP, LLC, Plaintiff,

v. DELAWARE RIVER BASIN COMMISSION, Defendant,andDelaware Riverkeeper Network Maya K. Van Rossum, the Delaware Riverkeeper, Intervenors–Defendants

3:16–CV–00897

United States District Court, M.D. Pennsylvania.

Filed March 23, 2017

Christopher R. Nestor, Overstreet & Nestor, LLC, Harrisburg, PA, David R. Overstreet, Overstreet & Nestor, LLC, Pittsburgh, PA, Jeffrey Belardi, Belardi Law Offices, Scranton, PA, Joseph Robert Rydzewski, Spall, Rydzewski & Anderson, P.C., Hawley, PA, for Plaintiff.

Kenneth J. Warren, Warren Environmental Counsel LLC, Bryn Mawr, PA, for Defendant.

Jordan B. Yeager, Curtin & Heefner LLP, Doylestown, PA.

John J. Zimmerman, Zimmerman & Associate, Potomac, MD, for Intervenors–Defendants.

MEMORANDUM OPINION

Robert D. Mariani, United States District Judge

Presently before the Court is a Motion to Dismiss filed by Defendant Delaware River Basin Commission (the "Commission" or "DRBC"). (Doc. 12). For the reasons that follow, Defendant's Motion will be granted. On the face of Plaintiff's Complaint, it is apparent that its proposed activities within the Delaware River Basin constitute a "project" within the meaning of that term as defined in Sections 1.2(g) and 1.2(i) of the Delaware River Basin Compact (the "Compact"). Accordingly, the Compact requires Plaintiff to submit an application to the Commission for a determination as to whether its proposed "project" has a "substantial effect on the water resources of the Basin" and, if so, whether the Commission shall approve or disapprove such project based on its determination that the project would or would not substantially impair or conflict with the Commission's comprehensive plan. Compact at § 3.8.

I. INTRODUCTION AND PROCEDURAL HISTORY

On May 17, 2016, Plaintiff Wayne Land & Mineral Group, LLC ("WLMG" or "Plaintiff") filed a Complaint against the Commission, (Doc. 1). In the Complaint, Plaintiff "asks this Court to declare that the Delaware River Basin Commission lacks authority under the Delaware River Basin Compact to review and approve a natural gas well pad, a gas well and related facilities and associated activities on WLMG's property in the Delaware River Basin (‘Basin’)." (Id. at 1). Intervenors–Defendants the Delaware Riverkeeper Network and Maya K. Van Rossum, the Delaware Riverkeeper (collectively referred to as the "DRN") filed a Motion to Intervene on July 5, 2016, (Doc. 10), which the Court granted on September 12, 2016.¹ (Doc. 26).

On July 8, 2016, the Commission filed a Motion to Dismiss the Complaint. (Doc, 12). On September 19, 2016, WLMG filed a Motion for Oral Argument and Plenary Hearing on Defendant's Motion to Dismiss, (Doc. 29), which the Court granted on November 7, 2016. (Doc. 43). The Court held an evidentiary hearing and heard oral argument on January 24, 2017.

II. STATEMENT OF FACTS

A. The Complaint

Plaintiff WLMG "owns approximately 180 acres of land, including the natural gas and minerals present on the land, in Wayne County, Pennsylvania. Approximately 75 acres of the land owned by WLMG is located in the Basin" (the "Property"). (Doc. 1, at ¶ 12). The Property "is located in a part of the Basin that overlays natural gas reserves in shale formations," (Id. at ¶ 13), and Plaintiff "acquired the Property with an intent to explore for, extract and sell the natural gas located in shale formations associated with the Property and other nearby land in order to recoup, and earn a reasonable return on, its investment in the Property." (Id. at ¶ 21).

The Defendant Commission is an agency created by the Compact, an agreement entered into by the United States, New York, Pennsylvania, New Jersey, and Delaware, and approved by Congress in 1961. (Id. at ¶ 14). Section 3.8 of the Compact provides that: "[n]o project having a substantial effect on the water resources of the basin shall hereafter be undertaken by any person, corporation or governmental authority unless it shall have been first submitted to and approved by the commission, subject to the Provisions of Section 3.3 and 3.5." (Id. at ¶ 15). Project is defined as "any work, service or activity which is separately planned, financed, or identified by the commission, or any separate facility undertaken or to be undertaken within a specified area, for the conservation, utilization, control, development or management of water resources which can be established and utilized independently or as an addition to an existing facility, and can be considered as a separate entity for purposes of evaluation." (Id. at ¶ 16).

Plaintiff intends to construct a well pad, drill exploratory wells on its property, and commence hydraulic fracturing. Plaintiff "will proceed in phases, beginning with the construction of an access road and well pad on the Property," (Id. at ¶ 22), and "has identified a location for the access road and well pad on the Property, taking into account siting requirements." (Id. at ¶ 23). Following construction of the well pad and access road, Plaintiff "will drill an exploratory well to locate productive zones of natural gas located in shale formations on the Property. The next phase of development will include the drilling of one or more lateral wells followed by hydraulic fracturing and, ultimately, the production of natural gas." (Id. at ¶ 24). The well pads and facilities constructed on the Property, as well as all related activities, "will be designed, built, operated and carried out for the exploration, extraction and development of natural gas and not for the conservation, utilization, control, development or management of water resources." (Id. at ¶ 27). Plaintiff "does not propose to develop, construct or operate a water withdrawal, dam, impoundment or reservoir, or to construct or operate a wastewater treatment or discharge facility in connection with the development of the Property." (Id. at ¶ 28). "All water used in connection with the planned Well Pad on the Property will be obtained from properly licensed and approved sources owned and operated by persons or entities other than WLMG, which will be managed and delivered to the Well Pad in accordance with all applicable laws and regulations and any applicable fees will be paid." (Id. at ¶ 29). "All wastewater generated in connection with the Well Pad on the Property will be managed by properly licensed and/or permitted entities other than WLMG in accordance with all applicable laws and regulations." (Id. at ¶ 30).

According to the Complaint, the Commission "has declared that all natural gas well pads and related facilities targeting shale formations in the Basin are ‘projects' that it will review under Section 3.8 of the Compact." (Id. at ¶ 4). Specifically, Plaintiff alleges that the Commission "has determined, and, by publicly announcing its position, has informed WLMG and other landowners in the Basin, that it has jurisdiction over natural gas and well pads, all appurtenant facilities, and related activities carried out in connection with gas wells targeting shale formations in the Basin."² (Id. at ¶ 17). Moreover, the Commission "has determined, and publicly announced, that Well Pads constitute ‘projects' that cannot be constructed or undertaken in Wayne County, Pennsylvania and other areas of the Basin with [out] first applying for and obtaining Commission approval." (Id. at ¶ 18). "The Commission has also announced that it will not consider applications for approvals for Well Pads, which are referred to by the Commission as ‘well pad dockets,’ until after it adopts regulations purporting to govern Well Pads." (Id. at ¶ 19). "The Commission's de facto moratorium on the otherwise lawful use of private property for natural gas development has been in force since 2010 and the Commission has yet to adopt regulations governing Well Pads." (Id. at ¶ 20).

The State of Pennsylvania "has adopted comprehensive environmental regulations governing all phases of development of natural gas resources within Pennsylvania." (Id. at ¶ 25). According to those regulations, "persons and entities seeking to construct well pads and appurtenant facilities, and proposing to carry out related activities such as drilling, fracturing, completing and operating natural gas wells in Pennsylvania, must obtain permits and approvals from the Pennsylvania Department of Environmental Protection" ("PaDEP"). (Id. ). According to the Complaint, the proposed development on Plaintiff's property, as well as all related activities, "will be designed, constructed and carried out in accordance with all applicable statutory and regulatory requirements including those implemented" by the PaDEP. (Id. at ¶ 26). However, according to the Plaintiff:

It would be futile and wasteful for WLMG to apply for permits and approvals from PaDEP before resolving the insurmountable obstacle created by the Commission's assertion of jurisdiction and imposition of a moratorium. Permits and approvals issued by PaDEP are valid for defined and limited periods of time and, moreover, PaDEP will not issue final permits and approvals for a Well Pad over which the Commission has asserted jurisdiction and project review authority until after the Commission reviews and approves the Well Pad.

(Id. at ¶ 32). Moreover, "[g]iven the Commission's decision not to consider well pad dockets until some indefinite point in the future, it would be futile for WLMG to apply for Commission approval for the Well Pad to be developed on the Property." (Id. at ¶ 33). Plaintiff further claims that it "should not be required to engage in an expensive, time consuming, and ultimately futile exercise of attempting to obtain review and approval by the Commission for its Well Pads where ... no such review and approval is required under the Compact." (Id. at ¶ 34).

Plaintiff's Complaint alleges that "[t]he Commission's final determination that Well Pads constitute "projects" subject to the Commission review and approval under Section 3.8 of the...