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Pennsylvania Litigation Update

Over the past several months, we have provided updates on a variety of Pennsylvania litigation matters that have been percolating in Pennsylvania's trial courts, appellate courts and before various administrative bodies. This month we want to examine the current posture of several of the cases we have featured previously - the debate over whether a ban on fracking will be on the November 8 ballot in Peters Township, and the status of the appeal in Butler v. Charles Power Estate.

Peters Township

Since our initial update on the lawsuit brought by Peters Township to keep an activist group from having a referendum on amending the Township's Home Rule Charter aimed at preventing drilling in the Township put on the November 8 ballot, Washington County Court of Common Pleas Judge Paul Pozonsky ruled against the Township, allowing the question to go to the voters. The Township had sought an injunction against placing the question on the ballot, saying it would subject the Township to lawsuits from individuals and gas companies. The Township also argued that, if the referendum were approved, the Township would be in violation of the Pennsylvania Oil and Gas Act, and that the recent ordinance passed by the Township addressing drilling would be nullified. Judge Pozonsky ruled that the court lacked jurisdiction to rule on pre-election challenges "without an immediate harm caused by the presence of the measure on the ballot."

Rather than appeal Judge Pozonsky's decision prior to the election, Peters Township is attempting to drum up grass roots support among the electorate to defeat the referendum. The Township sent a letter to every Peters Township resident on October 24 urging that they vote against the anti-drilling referendum. The letter states:

"A Home Rule Charter Referendum on the ballot Nov. 8 will have numerous serious effects on the future of our community if approved. On the surface, it leads voters to believe that it's solely a ban on Marcellus Shale drilling in our community; however, if you read the `fine print,' it's much more than that. It changes landowner rights, opens the Township to numerous lawsuits, and puts the future of our community in financial jeopardy. And, what's even more detrimental is that this referendum violates residents' federally protected constitutional rights. It also proposes that the Township is not subject to both the Pennsylvania and United States Constitutions. If passed, this amendment raises serious concerns over the validity of our Home Rule Charter and the financial future of our community. We have an outstanding community and want to maintain its natural environment for future generations. And, because of that, Peters Township Council has enacted zoning ordinances to protect residents while strictly regulating Gas Drilling."

It is believed that this is the first such referendum of its kind in the nation. The actual language of the referendum that will appear on the November 8 ballot is almost absurd in its scope, proposing to invalidate permits and licenses issued by the state and federal government and proposing to deny corporations engaged in the extraction of natural gas rights guaranteed under the state and federal constitutions. The full text of the referendum is as follows:

Attention: All Registered Electors of Peters Township

A referendum question amending the Home Rule Charter appears on the Township ballot as follows:

Should the Peters Township Home Rule Charter be amended: to add a community bill of rights enumerating rights to water, natural communities, a sustainable energy future, and local self-government, and to secure those rights by:

1. Prohibiting individuals and corporations from extracting natural gas in Peters Township, from installing pipelines and compressor stations and from depositing, storing or transporting waste water or other by-products of natural gas development within Peters Township; and,

2. Invalidating permits, licenses, privileges or charters issued by the state or federal agencies inconsistent with this amendment; and

3. Denying corporations engaged in the extraction of natural gas rights guaranteed under state and federal constitutions.

Read the full article on our website.


In the News
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Water Supplies: Defending Against a Presumption of Liability
by M. Katherine Crockett

Charleston, W.Va.  

With the recent proliferation of horizontal drilling for natural gas in the Marcellus region, there continues to be significant scrutiny on potential water quality impacts, including impacts to sources of water supply. Given the current status of the law in Pennsylvania and West Virginia imposing liability upon oil and gas operators for the diminution or contamination of public water supplies, operators may want to consider a proactive approach to preserving their available defenses to such liability at the outset of the drilling activity.

Click here to read about current law in W.Va. and Pa. and our recommendations.  


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Discussion of Consolidation in the Industry
by Ronald W. Schuler 

Pittsburgh, Pa.  

Independent oil and gas companies working on the development of the Marcellus Shale region have been victims of their own success to some degree. There seems to be a consensus among commentators that all the successful drilling activity in Appalachia, among other areas of the country, combined with relatively stable consumption of natural gas, has led to a prolonged trough in natural gas prices.

Although few believe that cheap gas is a permanent circumstance, independent producers with large inventories of shale acreage have nevertheless had some difficulty balancing the high costs of drilling and producing shale wells, with conservation of operating capital, in a market that currently views gas production as a low-return proposition.

Read the full article on our website.


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Spilman Attorneys Address Marcellus Communications Professionals at Hydraulic Fracturing Initiative 


Houston, Texas - More than 150 communications professionals from the Marcellus & Utica Shale gas industry, including public relations, media, stakeholder and community relations, corporate, and public affairs specialists, are gathering today and tomorrow at the Media & Stakeholder Relations Hydraulic Fracturing Initiative in Houston, Texas.


A delegation of attorneys from the law firm Spilman Thomas & Battle, PLLC are participating in the initiative, joining industry leaders and communications professionals to provide valuable perspectives and insights on message management.


Read this story on our website


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Natural Gas Expansion Fuels $21B Pipeline Deal  


A deal reached on Oct. 16 is predicted to boost efforts to transport natural gas from the Marcellus and Utica Shales to the Gulf Coast. Kinder Morgan plans to buy El Paso Corp., which will more than double the size of Kinder Morgan's pipeline network. The system could transport up to 90,000 barrels per day through the 80,000-mile pipeline network. Click here to read more about the deal.


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Helpful Resource: FracFocus  

The FracFocus Chemical Disclosure Registry provides general information about hydraulic fracturing and groundwater protection. It also allows you to search for information about the chemicals used in fracking. Click here to explore the website.


Shari Potter

Marcellus Shale Team Member

Sharon L. Potter (Wheeling, W.Va.) 

Shari, a former U.S. Attorney, practices across a broad range of areas due to her background as a Federal & State prosecutor. She handles criminal defense work in environmental and financial cases and assists companies with internal investigations, compliance matters, evidence preservation and negotiations with law enforcement and regulatory agencies. To view Shari's full professional biography, click here.  


Please be aware that this email publication is distributed with the understanding that the author, publisher and distributor are not rendering legal or other professional advice on specific facts or matters and, accordingly, assume no liability whatsoever in connection with its use.

Responsible Attorney: Michael J. Basile