Marcellus Shale Coal. v. Dep't of Envtl. Prot. of Pa.

[J-73-2017]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

THE MARCELLUS SHALE COALITION, : No. 115 MAP 2016
:
: Appeal from the Order of the
Appellee : Commonwealth Court at No. 573 MD
: 2016 dated 11/8/16
:
v. :
:
DEPARTMENT OF ENVIRONMENTAL :
PROTECTION OF THE :
COMMONWEALTH OF PENNSYLVANIA :
AND ENVIRONMENTAL QUALITY :
BOARD OF THE COMMONWEALTH OF :
PENNSYLVANIA, :
:
Appellants : ARGUED: October 18, 2017

OPINION

CHIEF JUSTICE SAYLOR DECIDED: June 1, 2018

This is a direct appeal in the context of pre-enforcement judicial review of

regulations governing the operation of unconventional gas wells in Pennsylvania. The

Commonwealth Court, sitting as a trial court, issued a single-judge opinion and order

preliminarily enjoining the enforcement of some of the challenged regulations. The

administrative-agency parties appeal from that decision.

I. Background

On October 13, 2016, Appellee, the Marcellus Shale Coalition (“MSC”), filed in

the Commonwealth Court’s original jurisdiction a petition for review in the nature of a
complaint seeking declaratory and injunctive relief (the “Petition”), on behalf of itself and

its members. MSC describes itself as a non-profit membership organization whose

members explore, produce, transmit, and distribute natural gas from the Marcellus and

Utica Shale formations. See Petition ¶¶3-4. MSC named as respondents the

Pennsylvania Department of Environmental Protection (“DEP”) and the Pennsylvania

Environmental Quality Board (the “EQB”) (collectively, the “Agencies”).1

In the Petition, MSC challenged the validity of several regulations relating to

unconventional gas well operations as governed by Pennsylvania’s Oil and Gas Act of

2012, known as Act 13.2 See Robinson Twp. v. Commonwealth, 623 Pa. 564, 584 &

n.1, 83 A.3d 901, 913 & n.1 (2013). Those provisions are contained in Title 25, Chapter

78a of the Pennsylvania Administrative Code. They were promulgated as part of a

rulemaking package which included regulations for conventional wells under Chapter 78

and for unconventional wells under Chapter 78a.3 The package went into effect upon

its publication in the Pennsylvania Bulletin on October 8, 2016.

1 The Commonwealth Court noted that Pennsylvania’s environmental administration is
divided among three entities: DEP, which enforces environmental laws and regulations;
the EQB, which is a rulemaking body; and the Environmental Hearing Board, an
adjudicative entity tasked with resolving disputed matters. See MSC v. DEP & EQB,
No. 573 M.D. 2016, slip op. at 3 n.2 (Pa. Cmwlth. Nov. 8, 2016) (citing Tire Jockey
Serv., Inc. v. DEP, 591 Pa. 73, 106, 915 A.2d 1165, 1185 (2007)).

2 Act of Feb. 14, 2012, P.L. 87, No. 13 (as amended 58 Pa.C.S. §§2301-3504). Under
Act 13, an unconventional gas well is defined as a bore hole drilled so as to obtain
natural gas from an “unconventional formation,” 58 Pa.C.S. §2301, which in turn
signifies a “geological shale formation existing below the base of the Elk Sandstone or
its geologic equivalent stratigraphic interval where natural gas generally cannot be
produced at economic flow rates or in economic volumes except by vertical or horizontal
well bores stimulated by hydraulic fracture treatments or by using multilateral well bores
or other techniques to expose more of the formation to the well bore.” Id.

3 In compliance with legislation enacted in 2014, regulations relating to unconventional
gas wells were segregated from those pertaining to conventional gas wells, which are
(continued…)
[J-73-2017] - 2
 MSC asserted seven counts, focusing on regulations pertaining to discrete areas

within Chapter 78a which were part of the new package. These included: public

resources, see 25 Pa. Code §§78a.1, 78a.15(f), (g); area of review, see id. §§78a.52a,

78a.73(c), (d); onsite processing, see id. §78a.58(f); impoundments, see id. §§78a.59b,

78a.59c; site restoration, see id. §78a.65; remediation of spills, see id. §78a.66(c); and

waste reporting, see id. §78a.121(b). MSC alleged that these provisions were void and

unenforceable for multiple reasons, including that they were vague, lacked statutory

authorization, and conflicted with other regulations and statutes applicable to the

industry. See Petition ¶34. As well, MSC averred that the rulemaking process did not

comply with the Regulatory Review Act, and that the EQB failed to develop criteria for

DEP to use in conditioning a drilling permit on relevant factors. See id.

A. Request for preliminary injunctive relief

Contemporaneous with the Petition, MSC filed an Application for Expedited

Special Relief (the “Application”), requesting a preliminary injunction with respect to the

Chapter 78a regulations challenged in the Petition pending a ruling as to their validity.

The Agencies submitted a joint answer opposing the Application and arguing MSC

failed to meet the requirements for a preliminary injunction. An evidentiary hearing was

held with MSC bearing the burden to demonstrate the need for interim relief.4

(…continued)
governed under Chapter 78. Thus, Chapter 78a is a new chapter which pertains
specifically to unconventional gas wells.

4 To obtain a preliminary injunction, a litigant must show: (1) it is needed to prevent
irreparable harm that cannot be adequately compensated by damages; (2) greater
injury would result from refusing the injunction than from granting it, and, concomitantly,
an injunction will not substantially harm other interested parties in the proceedings; (3)
the injunction will restore the parties to their status as it existed prior to the alleged
wrongful conduct; (4) the party seeking injunctive relief has a clear right to relief and is
(continued…)
[J-73-2017] - 3
 At the hearing, MSC did not present any witnesses, but it did enter documents

into the record, including the transcript of an EQB meeting, a copy of Chapter 78a

regulations, a regulatory analysis form submitted to the Independent Regulatory Review

Commission (“IRRC”) for consideration with those regulations, and correspondence

from the House and Senate Environmental Resources and Energy Committees to the

IRRC and EQB suggesting legislative disapproval of the proposed Chapter 78a

regulations. For their part, the Agencies presented the testimony of DEP Deputy

Secretary Scott Perry, who heads the agency’s Office of Oil and Gas Management.

Secretary Perry supplied information concerning unconventional gas drilling and how it

differs from conventional drilling. He also addressed the substance of the disputed

regulations, the process by which they were finalized, and the need for such rules.

B. Trial court decision granting relief in part

The Commonwealth Court, per Judge Brobson, issued a single-judge,

unpublished opinion and order, granting in part and denying in part preliminary

injunctive relief. As MSC has not cross-appealed, we are only concerned with the

portion of the decision granting such relief. In particular, the court granted the

(…continued)
likely to prevail on the merits; (5) the injunction is reasonably suited to abate the
offending activity; and, (6) the injunction will not adversely affect the public interest. See
SEIU Healthcare Pa. v. Commonwealth, 628 Pa. 573, 584, 104 A.3d 495, 502 (2014)
(citing Warehime v. Warehime, 580 Pa. 201, 209-10, 860 A.2d 41, 46-47 (2004)).

In light of the applicant’s burden of proof on these elements, Justice Donohue criticizes
MSC for not calling its own witnesses. See Concurring and Dissenting Opinion, slip op.
at 3. However, MSC introduced into the record various items of documentary evidence,
and it subjected Secretary Perry to extensive cross-examination. The Commonwealth
Court could properly consider all such evidence – as well as the Secretary’s direct-
examination testimony where appropriate – in assessing whether the factors
enumerated above were satisfied.

[J-73-2017] - 4
Application for interim relief (at least in part) with respect to Counts I, II, IV, and V of

Petition, and denied the Application in all other respects.

General precepts

Initially, the court made several general comments concerning the prerequisites

for preliminary injunctive relief. The court explained, for example, that where a party

incurs losses from having to comply with an invalid regulation and the relevant

government agency is immune from liability, the party’s losses constitute irreparable

harm. See MSC, No. 573 M.D. 2016, slip op. at 8 (citing Boykins v. City of Reading,

128 Pa. Cmwlth. 154, 158, 562 A.2d 1027, 1028-29 (1989)). With respect to the clear-

right-to-relief/likelihood-of-success element, the court added that it need not finally

decide the merits of the challenger’s substantive claims; rather, the court explained, the

inquiry is whether the challenger has presented a substantial legal question that must

be resolved to determine the parties’ rights and obligations. See id. (citing T.W. Phillips

Gas & Oil Co. v. Peoples Natural Gas Co., 492 A.2d 776, 780-81 (Pa. Cmwlth. 1985)).

Finally, the court indicated that the status quo to be preserved by a preliminary

injunction is the last “peaceable, lawful, noncontested status which preceded the

pending controversy.” Id. (citing The Woods at Wayne Homeowners Ass’n v. Gambone

Bros. Constr. Co., 893 A.2d 196, 204 n.10 (Pa. Cmwlth. 2006)).

Public resources (Count I)

In Count I, MSC alleged that regulations pertaining to public resources, as

reflected in Sections 78a.15(f) and (g), together with related definitions in Section 78a.1,

were void and unenforceable for a variety of reasons.

The court noted that Section 78a.15(f) imposes on drilling applicants a pre-

application-notice obligation relative to “public resources” – a term that is not defined

but, in context, appears to signify various types of features such as forests, game lands,

[J-73-2017] - 5
wildlife areas, national natural landmarks, state or national scenic rivers, historical and

archaeological sites, threatened or endangered species, and critical habitats. See 25

Pa. Code §78a.15(f)(1). Under the Chapter 78a regulations, it also includes “common

areas on a school’s property or a playground” and “other critical communities.” Id.

“Other critical communities” is defined in Section 78a.1 to include plant and animal

“species of special concern identified on a [Pennsylvania Natural Diversity Inventory]

receipt[.]” Id. §78a.1. Further, a “common area on a school’s property” comprises “an

area on a school’s property accessible to the general public for recreational purposes.”

Id. Thus, the court observed, in relation to each public resource that may potentially be

impacted by a proposed drilling operation, the applicant must provide to each “public

resource agency” – that is, an entity which manages a public resource, including

playground owners, see id. – information concerning its proposal, such as a plat and

any measures which might mitigate prospective harm to the public resource in question.

MSC forwarded eleven distinct legal challenges to this scheme, see Petition ¶44,

based largely on the premise that, in Robinson Township v. Commonwealth, 637 Pa.

239, 147 A.3d 536 (2016) (“Robinson Twp. IV”), this Court enjoined enforcement of

Section 3215(c) of Act 13 – with the consequence that DEP lacked authority to protect

“public resources” under Act 13. In the alternative, MSC claimed, inter alia, that: Act 13

does not authorize the type of pre-permitting notification scheme required by the above-

mentioned regulations; such regulations exceed the scope of DEP’s authority by

extending public-resource status to species of special concern, common areas of

schools, and playgrounds; the regulations improperly confer “public resource agency”

status upon local government agencies and private parties; and the scheme does not

comply with Section 3325(e) of Act 13. As to this latter contention, the court explained

that Section 3215(e) directs the EQB to develop, by regulation, criteria for DEP to use in

[J-73-2017] - 6
“conditioning a well permit based on its impact to the public resources identified under

subsection (c) and for ensuring optimal development of oil and gas resources and

respecting property rights of oil and gas owners.” 58 Pa.C.S. §3215(e)(1) (emphasis

added). In turn, subsection (c) indicates that DEP “shall consider the impact of the

proposed well on public resources” such as parks, forests, wildlife areas, scenic rivers,

natural landmarks, habitats of “rare and endangered flora and fauna and other critical

communities,” historical and archaeological sites, and sources of “drinking supplies[.]”

Id. §3215(c) (emphasis added).

The Commonwealth Court ultimately rejected MSC’s general argument that DEP

lacks authority to protect public resources under Act 13. The court explained that, in

Pennsylvania Independent Oil & Gas Ass’n v. DEP, 146 A.3d 820 (Pa. Cmwlth. 2016),

aff’d per curiam, ___ Pa. ___, 161 A.3d 949 (2017), it had concluded that, in the wake

of Robinson Township v. Commonwealth, 623 Pa. 564, 83 A.3d 901 (2013) (“Robinson

Twp. I”), DEP’s authority under Section 3215(c) of Act 13 “to consider the impact that a

proposed well will have on public resources, those listed and unlisted, is extant, limited

only by” the portion of Robinson Twp. I that enjoins Act 13’s enforcement with respect to

certain statutory water source setback and waiver provisions. MSC, No. 573 M.D.

2016, slip op. at 14 (quoting Pa. Indep. Oil & Gas Ass’n, 146 A.3d at 829). The court

also found most of the other legal theories forwarded by MSC to be insufficient to

warrant preliminary injunctive relief.

The court did, however, conclude that MSC had raised a colorable argument that

the regulations improperly expanded the list of protected resources beyond those

enumerated in Section 3215(c). Although acknowledging that Section 3215(c)’s list is

not exhaustive, the court observed that a substantial question remained whether the

General Assembly intended to protect only publicly-owned natural resources, or all

[J-73-2017] - 7
publicly-owned property, as well as privately-owned property open to the public. See id.

at 16-17.

Similarly, the Commonwealth Court found that MSC presented a substantial

question regarding the permissibility of subsuming “species of special concern” within

the public-resource protection rules by including them within the definition of “other

critical communities.” 25 Pa. Code §78a.1. It expressed that such resource

classification fell below endangered or threatened species, was not the result of public

rulemaking, and lacked special protection under Pennsylvania statutes enforced by

DEP. Accordingly, the court indicated that the inclusion of “species of special concern”

within the challenged regulations was “untethered” to the Agencies’ authority under Act

13. MSC, No. 573 M.D. 2016, slip op. at 18.

Overall, then, the court determined that MSC had satisfied the clear-right-to-relief

prong in relation to the Chapter 78a regulations in question insofar as they include as

public resources “common areas on a school’s property or a playground” and “species

of special concern,” and include playground owners as public resource agencies. The

court reasoned that these aspects of the regulations gave rise to irreparable harm per

se and, additionally, irreparable harm via the “cost [of] compliance with these provisions

– costs that well applicants will be unable to recover . . . if this Court should rule in favor

of MSC on the merits.” Id.

Finally, the court held that the harm to MSC from refusing a narrowly-tailored

preliminary injunction relative to the above discrete items outweighed the harm from

granting it, particularly as granting it would leave in place the overall notice, comment,

and mitigation scheme reflected in Section 78a.15(f), and the Agencies had not offered

evidence at the hearing that preliminarily enjoining these provisions would harm any

person, entity, or the public. As well, the court noted that a narrowly-tailored injunction

[J-73-2017] - 8
would restore the parties to the status quo as it existed prior to the alleged wrongful

conduct and would not adversely affect the public interest. See id. at 19 & n.13.

Area of review (Count II)

In Count II of the Petition, MSC challenged the validity of regulations appearing in

Sections 78a.52a and 78a.73(c) and (d), which relate to the obligations of well operators

relative to nearby wells and the operators of such wells. These rules are designed to

address DEP’s concern with the unintentional migration of fluids and other materials

associated with unconventional drilling from the target well to nearby orphan,

abandoned, or plugged wells.

Under the regulations, prospective operators must, in the pre-drilling timeframe,

conduct an area-of-review survey identifying all active, inactive, orphan, abandoned,

and plugged-and-abandoned wells that lie within 1,000 feet of the operator’s intended

vertical well bore or of any point on the surface above the length of an intended

horizontal bore.5 They must also provide notice of their planned drilling activities to the

operators of all such nearby wells. They are additionally required to engage in ongoing

visual monitoring of all such nearby wells during well stimulation activities, and to

provide remediation – such as plugging orphan and abandoned wells – in the event

stimulation of a well by hydraulic fracturing causes an intrusion into or alteration of a

well listed in the area-of-review survey. See 25 Pa. Code §§78a.52a, 78a.73(c), (d).

5 Act 13 defines an abandoned well as one that has not been used for extraction within
the past 12 months, or for which production equipment has been removed, or which is
considered dry and not equipped for production within 60 days after drilling or
deepening. See 58 Pa.C.S. §3203. It defines an orphan well as one that was
abandoned before April 18, 1985, which “has not been affected or operated by the
present owner or operator and from which the present owner, operator or lessee has
received no economic benefit other than as a landowner or recipient of a royalty interest
from the well.” Id.

[J-73-2017] - 9
 MSC alleged that: these provisions impose an unreasonable and unwarranted

monitoring obligation; there is no legal authority for such area-of-review requirements;

requiring someone other than the well owner to plug an orphan or abandoned well

conflicts with Section 3220 of Act 13, which imposes plugging requirements only on the

well owner or operator, see 58 Pa.C.S. §3220; the regulations are void for vagueness in

light of DEP’s admission at an EQB meeting that it intends to issue technical guidance

documents to clarify the obligations created under them; and the monitoring and

remediation provisions would force well operators to enter illegally onto property owned

and controlled by others.

As with Count I, the Commonwealth Court granted preliminary injunctive relief in

part. Initially, the court rejected the contention that the challenged regulations were

unreasonable or unfounded, as MSC failed to demonstrate that the migration of drilling

fluids poses no risk to Commonwealth waters as broadly defined by the Clean Streams

Law.6 See 35 P.S. §691.1 (relating to definitions). Further, the court indicated that in

passing Act 13, the General Assembly envisioned that DEP’s authority to regulate well

operations in the public interest extended beyond Act 13 and “encompassed authority

granted under a plethora of existing environmental laws, working in concert with Act 13.”

MSC, No. 573 M.D. 2016, slip op. at 24 (footnote and citations omitted). In light of such

presumed authority, the court also determined that no substantial issue was raised

concerning the appropriateness of requiring operators to submit to DEP an area-of-

review survey as part of the application process. The court additionally rejected several

other theories forwarded by MSC, including that the regulations are void for vagueness.

Nevertheless, the Commonwealth Court found that MSC raised a substantial

legal issue regarding the reasonableness of the monitoring and remediation provisions.

6 Act of June 22, 1937, P.L. 1987, No. 394 (as amended 35 P.S. §§691.1-691.1001).

[J-73-2017] - 10
It referenced significant implementation issues apparent from the face of the regulation,

i.e., 25 Pa. Code §78a.52a(c)(3), including whether a well operator could validly obtain

access to, and remediate, every well listed in the area-of-review survey owned by

others. Moreover, the court concluded that substantial questions existed as to how

Section 78a.73(d) is consistent with the well-plugging requirements set forth in Act 13,

which place the onus on a well owner or operator to plug its own wells, and DEP’s own

authority to plug wells under that statute. See MSC, No. 573 M.D. 2016, slip op. at 26

(citing, 58 Pa.C.S. §§3220, 3271).

The Commonwealth Court also determined that MSC established irreparable

harm that outweighed any harm in refusing to grant the injunction, because the cost of

compliance as estimated by the EQB was $11 million, which may be unrecoverable if

MSC is successful on the merits. Further, the court concluded that an injunction would

restore the parties to the status quo, that is, the absence of monitoring and remediation

requirements with respect to wells owned or operated by others. Ultimately, the court

expressed that it would grant a narrow preliminary injunction whereby operators must

still monitor and remediate any of their own wells listed in the area-of-review survey, but

not the wells of others. See id. at 27.

Impoundments (Count IV)

In Count IV, MSC alleged that the Chapter 78a rulemaking package contained

regulations with extensive and burdensome new requirements for impoundments. MSC

pointed to rules setting forth new construction standards for well-development

impoundments, including requirements that they be constructed with a synthetic

impervious liner and either have a completely-surrounding fence or be continuously

monitored by an individual to prevent damage from third parties or wildlife. See 25 Pa.

[J-73-2017] - 11
Code §78a.59b(d), (e).7 MSC also noted that existing well-development impoundments

must be upgraded to meet these new standards or closed by October 10, 2017. See id.

§78a.59b(b). As well, MSC averred that the regulations mandate that centralized

impoundments either be closed or re-permitted by a date certain under the Solid Waste

Management Act (“SWMA”).8 See id. §78a.59c.

MSC challenged these regulations on a number of grounds. Among these was a

contention that operators, including its members with impoundments that were built in

compliance with DEP regulations, must now close their impoundments or upgrade them

to meet the new standards. In this respect, MSC observed there is no grandfathering

for synthetic liners already in place. See Petition ¶64.

The Commonwealth Court found that a substantial legal question existed in this

regard, noting in particular that Secretary Perry credibly testified that: the new rules

arose, not from a change in the law, but from a change in DEP’s interpretation of

longstanding law; and existing impoundments permitted and built to DEP standards

would have to be retrofitted or closed under DEP’s new interpretation. See MSC, No.

573 M.D. 2016, slip op. at 32 (quoting Young J. Lee, Inc. v. Dep’t of Revenue, 504 Pa.

367, 375, 474 A.2d 266, 270 (1983) (“The government cannot, on the one hand, create

a business which is dependent on a permit and then, with the other, destroy it by

revoking the authorizing permits without first affording sufficient due process.” (internal

quotation marks and citation omitted))). The court additionally recognized that,

7According to the Commonwealth Court, well-development impoundments store fresh
water for use in drilling operations, whereas centralized impoundments store waste
water generated from drilling activities. See MSC, No. 573 M.D. 2016, slip op. at 31.

8 Act of July 7, 1980, P.L. 380 (as amended 35 P.S. §§6018.101-6018.1003).

[J-73-2017] - 12
according to the hearing evidence, the cost of impoundment retrofitting was substantial

and potentially unrecoverable, thereby establishing irreparable harm.

Finally, while acknowledging that the proposed regulations would likely offer

greater health and safety protections, the court noted DEP offered no evidence

demonstrating that existing impoundments pose an immediate threat to the public

health and safety or to the environment – a circumstance which led the court to

conclude that the harm from refusing an injunction would outweigh any harm from

granting it.

The Commonwealth Court expressed that its preliminary injunction as to the

impoundment regulations would be closely fitted to address only the effect that such

regulations would have on existing impoundments. Thus, the court denied injunctive

relief insofar as the regulations apply to new impoundments. The court indicated that,

as thus narrowed, the injunctive relief would not adversely affect the public interest.

See MSC, No. 573 M.D. 2016, slip op. at 33.

Site restoration (Count V)

In Count V of its Petition, MSC challenged the regulations pertaining to site

restoration. As the term suggests, site restoration refers to restoration, after the

construction of a well is complete, of land surface areas disturbed during the creation of

the well. See 25 Pa. Code §78a.65(a).

Site restoration is addressed by Section 3216 of Act 13. See 58 Pa.C.S.

§3216(a) (requiring every well owner or operator to “restore the land surface within the

area disturbed in siting, drilling, completing and producing the well”). That provision

indicates operators must formulate an erosion and sediment control plan which

complies with the Clean Streams Law. See id. §3216(b). It also requires that various

aspects of site restoration be complete within nine months after a well is drilled, see id.

[J-73-2017] - 13
§3216(c), (d), unless an extension is obtained from DEP, see id. §3216(g). Finally,

restoration activities accomplished per Act 13 and its associated regulations must

comply with the Clean Streams Law. See id. §3216(e). The Commonwealth Court

observed that Section 78a.65 appears to implement the requirements contained in

Section 3216 of Act 13.

As with previous counts, MSC articulated several grounds on which it believed

that Section 78a.65 was void and unenforceable. Ultimately, the Commonwealth Court

found that only one of MSC’s claims raised a substantial legal question.

By way of further background, under the Clean Streams Law and associated

regulations in Title 25, Chapter 102 of the Pennsylvania Code (relating to erosion and

sediment control), directives are given in a rule governing post-construction stormwater

management (“PCSM”), namely 25 Pa. Code §102.8. Per that provision, all PCSM

plans must meet certain basic requirements. See id. §102.8(f). Additional mandates for

pre- and post-development stormwater analysis are listed in Section 102.8(g). Notably,

subsection (g) exempts from its scope “regulated activities that require site restoration

or reclamation, and small earth disturbance activities identified in subsection (n)[.]” Id.

§102.8(g). Subsection (n), in turn, provides a list of exempted items which includes that

portion of a site restoration plan identifying PCSM best management practices (“BMPs”)

to manage stormwater from oil and gas activities, and indicates that such items may be

used to satisfy the requirements of Section 102.8, so long as the PCSM plan meets the

requirements of several other enumerated subsections of Section 102.8 other than

subsection (g). The subsection states, in full:

(n) Regulated activities that require site restoration or reclamation, and
small earth disturbance activities. The portion of a site reclamation or
restoration plan that identifies PCSM BMPs to manage stormwater from oil
and gas activities or mining activities permitted in accordance with
Chapters 78 and 86--90; timber harvesting activities; pipelines; other

[J-73-2017] - 14
 similar utility infrastructure; Department permitted activities involving less
than 1 acre of earth disturbance; or abandoned mine land reclamation
activities, that require compliance with this chapter, may be used to satisfy
the requirements of this section if the PCSM, reclamation or restoration
plan meets the requirements of subsections (b), (c), (e), (f), (h), (i) and (l)
and, when applicable, subsection (m).
25 Pa. Code §102.8(n).

Returning to the Chapter 78a regulations in issue, MSC questioned whether

Section 78a.65(d) could be enforced, given MSC’s view that that subsection purported

to limit the above-mentioned exemption. In particular, Section 78a.65(d) states:

(d) Areas not restored. Disturbed areas associated with well sites that are
not included in a restoration plan, and other remaining impervious
surfaces, must comply with all requirements in Chapter 102 (relating to
erosion and sediment control). The PCSM plan provisions in §102.8(n)
apply only to the portions of the restoration plan that provide for
restoration of disturbed areas to meadow in good condition or better or
otherwise incorporate ABACT [antidegeneration best available
combination of technologies] or nondischarge PCSM BMPs.
25 Pa. Code §78a.65(d) (emphasis added).

The Commonwealth Court found that MSC had raised a substantial legal issue

as to whether the above subsection “imposes erosion and sediment control measure

requirements on well owners and operators in excess of what is required under the

Clean Streams Law.” MSC, No. 573 M.D. 2016, slip op. at 38. The court continued that

Section 3216(b) and (c) of Act 13 specify that erosion and sediment control measures

are to be implemented pursuant to the Clean Streams Law. It observed that in the

regulatory analysis form (the “RAF”) submitted to the IRRC for consideration with the

Chapter 78a regulations, DEP had described these provisions as mere clarifications of

existing law. The court noted that that position was undermined to the extent Section

78a.65(d) purports to abrogate any exemptions contained in the Clean Streams Law.

[J-73-2017] - 15
That being the case, the court determined that MSC had raised a substantial legal

question and thus had satisfied the clear-right-to-relief prong. See id.

Further, the Commonwealth Court held that any conflict between Section

78a.65(d) and the Clean Streams Law and/or Chapter 102 constitutes irreparable harm

per se insofar as the challenged provision conflicts with legislative intent as expressly

stated in Section 3216(b) and (e) of Act 13. The court added that the harm to MSC from

denying interim relief would outweigh any purported harm to the Agencies from granting

it. On this latter point, the court expressed that preliminarily enjoining DEP from

implementing the regulation should have no effect on the agency as DEP stated in the

RAF that the regulation merely restates what the DEP believes are current restoration

requirements. See id. at 37 (quoting RAF at 101). Additionally, the court indicated that

enjoining the provision will restore the parties to the status quo before the allegedly

wrongful conduct, namely, the absence of Section 78a.65(b). See id. at 39. Lastly, the

Commonwealth Court clarified that its injunction would be narrowly tailored to

encompass only Section 78a.65(d), thus “leaving intact the bulk of Section 78a.65

pending the outcome of this litigation.” Id.

The Commonwealth Court’s order

Based on the foregoing, the Commonwealth Court issued an order granting in

part and denying in part MSC’s Application for Expedited Special Relief. The order

preliminarily enjoined DEP from implementing and enforcing: (1) Sections 78a.1 and

78a.15(f) and (g) to the extent they include “common areas on a school’s property or a

playground” and “species of special concern” as “public resources” and include

“playground owners” as a “public resource agency”; (2) Section 78a.52a(c)(3) and

Section 78a.73(c) and (d) to the degree they impose monitoring and remediation

obligations on owners and operators with respect to wells in the area-of-review survey

[J-73-2017] - 16
owned and/or operated by others; (3) Section 78a.59b(b) as to pre-existing

impoundments (but not as to new impoundments) and 78a.59c, which by its terms only

applies to operators using a centralized impoundment as of October 8, 2016; and (4)

Section 78a.65(d) in its entirety. The order denied the Application in all other respects.

See MSC, No. 573 M.D. 2016, Order, at 1-2 (Pa. Cmwlth. Nov. 8, 2016).

C. Appeal to this Court

Litigation of the Petition’s merits continues in the Commonwealth Court. In

parallel with those proceedings, the Agencies appealed from the partial grant of

preliminary injunctive relief, and this Court noted probable jurisdiction.

II. Arguments and Analysis

A. Trial court standard for interim relief

The Agencies generally contend that the Commonwealth Court did not utilize the

correct standard for granting a preliminary injunction. They note that, when finally

adjudicating the validity of a regulation adopted per an agency’s rule-making power,

courts use a three-part test whereby the regulation must be: (a) adopted within the

agency’s statutory power; (b) issued pursuant to proper procedure; and (c) reasonable.

See Brief for Appellants at 27 (quoting Tire Jockey Serv., Inc. v. DEP, 591 Pa. 73, 108,

915 A.2d 1165, 1188 (2007)). Although the Commonwealth Court’s reasoning centered

on the first element, the Agencies initially focus on the third prong, arguing that a

regulation can only be deemed unreasonable if it was fashioned in bad faith, is arbitrary,

or represents a gross abuse of discretion. See id. at 28. The Agencies continue by

asserting, without reference to supporting authority, that courts should apply the same

level of deference to an agency’s interpretation of its enabling statutes in reviewing a

[J-73-2017] - 17
pre-enforcement preliminary injunction as would be warranted in the context of a post-

enforcement challenge. See id. at 29.

Based on these dual premises, the Agencies conclude (again without citation to

authority) that, in assessing the clear-right-to-relief prerequisite for a preliminary

injunction, the Commonwealth Court should have “required MSC to show (1) manifest

error in the EQB’s interpretation of its statutory authority to promulgate the challenged

Chapter 78a [r]egulations, (2) a manifest violation of a statutory procedure in

promulgating the regulations, or (3) that the [a]gencies’ assertions that the regulations

are reasonable were made in bad faith, purely arbitrary, or a manifest abuse of

discretion.” Id.

The Agencies additionally fault MSC for failing to call witnesses at the preliminary

injunction hearing. They also emphasize that the regulations were formulated during a

six-year time period in which voluminous public comments – including comments from

other state agencies, DEP’s Oil and Gas Technical Advisory Board, experts,

stakeholders, and local governments – as well as data from the oil and gas industry

were received and taken into account, and that the regulations were published in the

Pennsylvania Bulletin as an order of the EQB. See id. at 30-31.

MSC argues that the Agencies, throughout their brief, employ an incorrect

statement of the deference owed to DEP’s interpretation of the law. MSC proffers that

the Commonwealth Court utilized the proper standard when evaluating the elements for

a preliminary injunction, and the Agencies overlay a framework more suited to a final

merits assessment of the challenged regulations’ validity. See Brief for Appellee at 16-

17 (quoting Fischer v. DPW, 497 Pa. 267, 271, 439 A.2d 1172, 1174 (1982) (noting that,

as a preliminary injunction “is designed to preserve the status quo pending final

[J-73-2017] - 18
resolution of the underlying issues,” the clear-right prerequisite is not intended to require

that a party seeking a preliminary injunction establish its claim absolutely)).

In this regard, MSC indicates that the three-prong test articulated by the

Agencies will be applied later in the litigation when the Commonwealth Court decides

the Petition’s merits, see id. at 17 (citing Rand v. State Bd. of Optometry, 762 A.2d 392,

394 (Pa. Cmwlth. 2000)), but that for now, it was sufficient for the court to determine

that there are substantial, unresolved legal questions. See id. MSC adds that, in all

events, when applying the first (lawfulness) prong in the context of a challenge to

legislative rulemaking, little deference is due to an agency with regard to its reading of

the authorizing statute, since administrative agencies have no special expertise in the

area of statutory interpretation.

The regulations presently at issue are legislative rules – meaning they establish a

controlling standard of conduct. See Borough of Pottstown v. Pa. Mun. Ret. Bd., 551

Pa. 605, 609, 712 A.2d 741, 743 (1998). Such regulations “enjoy a general

presumption of reasonableness.” Id. (citations omitted). See generally Nw. Youth

Svcs., Inc. v. DPW, 620 Pa. 140, 155-61, 66 A.3d 301, 310-13 (2013) (surveying the

different types of agency rules and the deference judicially accorded to each). As MSC

notes, however, and because legislative rulemaking “is ‘an exercise of legislative power

by an administrative agency, pursuant to a grant of legislative power by the legislative

body,’” Popowsky v. PUC, 589 Pa. 605, 630, 910 A.2d 38, 53 (2006) (quoting

Rohrbaugh v. PUC, 556 Pa. 199, 208, 727 A.2d 1080, 1085 (1999)), a legislative rule is

only valid if it falls within the scope of the rulemaking power granted by the General

Assembly. See, e.g., Rand, 762 A.2d at 395 (invalidating an agency regulation that

exceeded the scope of its legislatively-granted rulemaking powers).

[J-73-2017] - 19
 In the context of a motion for a preliminary injunction, only a substantial legal

issue need be apparent for the moving party to prevail on the clear-right-to-relief prong.

See SEIU, 628 Pa. at 590-91, 104 A.3d at 506; Fischer, 497 Pa. at 271, 439 A.2d at

1174.9 This implicates a less deferential standard relative to the agency’s interpretation

of the governing statute than would be applicable to a trial court’s final merits

determination.

B. Standard of appellate review

Appellate courts review a trial court order granting or denying a preliminary

injunction for an abuse of discretion. See Brayman Constr. Crop. v. PennDOT, 608 Pa.

584, 601, 13 A.3d 925, 935 (2011) (citing Summit Towne Ctr., Inc. v. Shoe Show of

Rocky Mount, Inc., 573 Pa. 637, 645, 828 A.2d 995, 1000 (2003)). Insofar as issues of

statutory interpretation are concerned, however, our review is de novo. See SEIU, 628

Pa. at 591, 104 A.3d at 506. Additionally,

we do not inquire into the merits of the controversy, but only examine the
record to determine if there were any apparently reasonable grounds for
the action of the court below. Only if it is plain that no grounds exist to
support the decree or that the rule of law relied upon was palpably
erroneous or misapplied will we interfere with the [decree].
Brayman, 608 Pa. at 602, 13 A.3d at 935-36 (emphasis added) (quoting Roberts v. Bd.

of Dirs. of Sch. Dist. of Scranton, 462 Pa. 464, 469, 341 A.2d 475, 478 (1975)).

9 As an aside, we note that SEIU referenced Fischer for the position that the party
seeking relief need only raise a substantial legal question regarding the parties’ rights.
For its part, however, Fischer suggested that such precept only applies where: (a) there
is a threat of irreparable harm; (b) the injunction simply restores the status quo; and (c)
greater injury would result by refusing the injunction than by granting it. Regardless,
any difference between these two formulations is presently immaterial, as the
prerequisites mentioned in Fischer are satisfied with regard to the aspects of the
Commonwealth Court’s order which we presently affirm.

[J-73-2017] - 20
 C. Individual counts

Public resources (Count I)

(i) Playgrounds and common areas on a school’s property

The Agencies argue that the list of public resources appearing in Section

3215(c), which relates to well-location restrictions, is open ended and that “common

areas on a school’s property or a playground” and “species of special concern” are of

the same class and kind as the items expressly enumerated in that subsection.10 They

observe that these terms are defined in the regulations as follows:

Common areas of a school’s property -- An area on a school’s property
accessible to the general public for recreational purposes. For the
purposes of this definition, a school is a facility providing elementary,
secondary or postsecondary educational services.

Playground – (i) An outdoor area provided to the general public for
recreational purposes. (ii) The term includes community-operated
recreational facilities.
25 Pa. Code §78a.1. The Agencies maintain that they articulated reasons the general

public regularly uses playgrounds and common areas of a school’s property, and,

10 The provision states:

(c) Impact.--On making a determination on a well permit, the department
shall consider the impact of the proposed well on public resources,
including, but not limited to: (1) Publicly owned parks, forests, game lands
and wildlife areas. (2) National or State scenic rivers. (3) National natural
landmarks. (4) Habitats of rare and endangered flora and fauna and other
critical communities. (5) Historical and archaeological sites listed on the
Federal or State list of historic places. (6) Sources used for public drinking
supplies[.]

58 Pa.C.S. §3215(c).

[J-73-2017] - 21
moreover, such resources “share several similar characteristics with parks.” Brief for

Appellants at 36.

The Commonwealth Court did not disagree. It observed that the Agencies’

interpretation of the statute could be overly broad as it might justify the inclusion of such

items as shopping centers, movie theaters, sports stadiums, and amusement parks, all

of which, per the doctrine of ejusdem generis, do not appear to be contemplated by

Section 3215(c). See MSC, No. 573 M.D. 2016, slip op. at 17 n.11. The court

additionally noted that the Environmental Rights Amendment relates to the protection of

“natural, scenic, historic and esthetic values of the environment,” and obligates the

Commonwealth to conserve “public natural resources.” PA. CONST. art. I, §27

(emphasis added). It raised the possibility that the General Assembly intended to

conform the list of items appearing in Section 3215(c) roughly to the scope of protection

reflected in Article I, Section 27. Under these circumstances, the court concluded a

substantial question was raised whether it would be proper to interpret Section 3215(c)

as authorizing regulations which subsume private resources open to the public, such as

playgrounds and common areas of schools, which are not inherently natural, scenic,

historic, or esthetic. See MSC, No. 573 M.D. 2016, slip op. at 17-18 & n.10.

In our view, these observations support the court’s determination that a

substantial legal question was raised in relation to the challenged regulations’ inclusion

of playgrounds and school common areas as “public resources” and, concomitantly, the

owners of these items as “public resource agencies.” That being the case, there is no

basis to disturb the Commonwealth Court’s determination that MSC established the

clear-right requirement relative to this aspect of Count I.11

11 In dissent, Justice Donohue expresses that privately-owned recreational lands are “of
the same kind or class as publicly-owned parks.” Concurring and Dissenting Opinion,
slip op. at 6 (internal quotation marks and citation omitted). She also indicates that no
(continued…)
[J-73-2017] - 22
 As noted, the court deemed the irreparable-harm prong to be satisfied due to,

among other things, the cost of compliance. According to the RAF, the total cost of

compliance will be $888,000 per applicant. See RAF at 87, reprinted in R.R. 842a.

Although some of this cost would be incurred relative to public resources other than

playgrounds and school common areas, it is undisputed that the addition of those two

items accounts for at least part of the cost. Further, since the Agencies enjoy sovereign

immunity, if the challenged regulations are ultimately held invalid, that portion of the cost

would not be recoverable by MSC members. Thus, the court reasonably found that

MSC carried its burden to demonstrate irreparable harm. See generally Boykins, 128

Pa. Cmwlth. at 158, 562 A.2d at 1029 (“The inability to be adequately compensated by

an award of damages constitutes irreparable harm.” (citation omitted)).

As well, given the Agencies’ failure to produce evidence of the harm they would

suffer if the challenged provisions were enjoined preliminarily, 12 the court reasonably

(…continued)
party has compellingly argued why “impacts on [school common areas and
playgrounds] should not be considered in equal measure before the DEP issues a
permit[.]” Id. at 8.

Our task is not to formulate environmental policy, but to evaluate whether the
Commonwealth Court reasonably discerned the existence of a substantial question
concerning whether the term “public resources,” as it appears in Section 3125(c), is
sufficiently expansive to include privately owned land open to the public. In its merits
resolution, the Commonwealth Court (and/or this Court) may ultimately agree with
Justice Donohue’s position that such properties are encompassed by Section 3215(c).
In the interim, however, we believe there are “apparently reasonable grounds” to
support the Commonwealth Court’s determination that a substantial legal issue exists.

12In this respect the court observed that, while the specific regulations in issue are
designed to provide new and greater environmental protections, the Agencies did not
supply evidence that preliminarily enjoining their enforcement would “harm any person,
entity, or the public in general.” MSC, No. 573 M.D. 2016, slip op. at 19 n.13.

[J-73-2017] - 23
concluded that, for purposes of the motion, greater injury would result from refusing the

injunction than from granting it.13 We also see no basis to disagree with the court’s

explanation that issuing the preliminary injunction, narrowly tailored as appropriate,

would not adversely affect the public interest. Finally, the court reasonably concluded

that a preliminary injunction would restore the parties to the status quo ante, namely,

the absence of any regulation subsuming playgrounds and school common areas within

the notice, comment, and mitigation scheme of 25 Pa. Code §78a.15(f).

(ii) Species of special concern

As for “species of special concern,” the Agencies observe, first, that Section

3215(c)(4) indicates public resources include not only habitats of rare and endangered

species, but also “other critical communities” – a phrase that must be given some

meaning. They add that the inclusion, by regulation, of “species of special concern”

within the scope of that phrase comports with a long-standing practice whereby well

permit applicants use the PNDI database to enable DEP to consider impacts on species

of special concern in analyzing applications. See Brief for Appellants at 38-39.14

13 MSC asserts the Agencies have waived, by omitting from their brief, any challenge to
the preliminary injunction factors dealing with the weighing of harms as between the
parties, and the relief being reasonably suited to abate the offending activity. See Brief
for Appellee at 30-31. The Agencies reply that they have not waived any argument
regarding harm to the public, as MSC bore the burden of proof on all elements at the
preliminary injunction stage. See Reply Brief for Appellants at 6-7, 22. This argument
is non-responsive as it relates to a different factor. As well, the Agencies overlook that,
as appellants, they carry the burden to demonstrate error by the Commonwealth Court.

14 Section 78a.1 defines other critical communities as follows:

(i) Species of special concern identified on a PNDI [Pennsylvania Natural
Diversity Inventory] receipt, including plant or animal species: (A) In a
proposed status categorized as proposed endangered, proposed
threatened, proposed rare or candidate. (B) That are classified as rare or
tentatively undetermined.
(continued…)
[J-73-2017] - 24
 MSC suggests that the Agencies’ argument is misleading. It maintains that,

while use of the PNDI database to identify threatened or endangered species may be a

longstanding practice, imposition of mandatory protections for “species of special

concern” based on a PNDI receipt is new. See Brief for Appellee at 23.15 It observes

that, per Secretary Perry’s testimony, the designation of a species as threatened or

endangered proceeds from a “rigorous process” which includes notice-and-comment

rulemaking, N.T., Oct. 25, 2016, at 153, whereas the same is not true of species of

special concern. MSC notes Secretary Perry observed that species of special concern

are placed in the PNDI database and designated as such by the jurisdictional agencies,

that is, the Agencies with “statutory authority to protect those species,” including the

Department of Conservation and Natural Resources, the Game Commission, the Fish

and Boat Commission, and the Pennsylvania office of the United States Fish and

Wildlife Service. Id. at 153-54. MSC also emphasizes that Secretary Perry confirmed

the rule requiring consideration of species which are neither endangered nor threatened

was adopted in 2013 pursuant to a departmental policy, which cannot create law, but is

now mandatory under the challenged regulation. See id. at 152-54, 159-60.

We need not address whether or how a regulation may make obligations

imposed on an applicant depend on the contents of a database which is updated over

(…continued)

(ii) The term does not include threatened and endangered species.

25 Pa. Code §78a.1. A PNDI receipt, in turn, is defined as “[t]he results generated by
the [PNDI] Review Tool containing information regarding threatened and endangered
species and other critical communities.” Id.

15 In its Petition, MSC alleged that, because the PNDI database contents change from
day to day, the information on a receipt – including the list of species of special concern
– can vary on a daily basis. See Petition ¶44(h).

[J-73-2017] - 25
time by other agencies. In finding a substantial legal question, the Commonwealth

Court did not focus on that aspect of the challenged provision. Rather, after indicating

that species of special concern, as a resource classification, falls below threatened or

endangered, see MSC, No. 573 M.D. 2016, slip op. at 18 – a proposition that is not in

dispute – the court centrally highlighted that such classification is not the result of public

rulemaking and “does not have any special protection afforded under the laws of this

Commonwealth that DEP is entrusted to enforce.” Id. The Agencies do not contradict

the Commonwealth Court’s essential observation in this regard, opting instead to

highlight their general entitlement to deference and the presence of the statutory

phrase, “other critical communities.” Thus, the Agencies’ argument is not responsive to

the Commonwealth Court’s reasoning, which, again, relates to whether the Agencies

are authorized by statute to include within the permitting process a categorization that

no statute expressly obligates DEP to protect.

Without deciding finally whether the absence of statutory authority requiring DEP

to protect species of special concern is a valid basis to conclude that the “other critical

communities” necessarily excludes that category from the scope of Section 3215(c) of

Act 13, we agree with the Commonwealth Court that, at a minimum, a substantial legal

issue on this point has been raised. Accordingly, we affirm its determination that MSC

has satisfied the clear-right element for preliminary injunctive relief.16

16 The dissent characterizes MSC’s argument as stating that the PNDI’s “use to identify
species of special concern is new,” and refers to testimony concerning a “long-standing
practice” of using the PNDI to identify such species. Concurring and Dissenting
Opinion, slip op. at 8. The dissent concludes that it was unreasonable for the
Commonwealth Court to find a substantial legal issue. See id. at 9. Respectfully, the
dissent mischaracterizes both the issue and MSC’s argument. As discussed, what is
“new” is the imposition of mandatory protections for species of special concern based
on a PNDI receipt, and the issue arises because their regulatory designation as “other
critical communities” did not proceed from notice-and-comment rulemaking.

[J-73-2017] - 26
 Further, under the regulations challenged in Count I, the inclusion of species of

special concern in the “public resource” category triggers the same notice, comment,

and mitigation obligations for the well applicant as were applicable to playgrounds and

school common areas. See 25 Pa. Code §§78a.1, 78a.15(f), (g)(2). The analysis given

above concerning the other preliminary injunction factors applies equally to the species-

of-special-concern facet of MSC’s challenge. That being the case, the Commonwealth

Court had “apparently reasonable grounds” for its action in granting MSC a closely

tailored preliminary injunction as to Count I.

Area of review (Count II)

In relation to Count II, as discussed, the Commonwealth Court rejected many of

MSC’s challenges to the area-of-review regulations, see 25 Pa. Code §§78a.52a,

78a.73(c) and (d), which require well operators to identify, monitor, and remediate all

active, inactive, orphan, abandoned, and plugged-and-abandoned gas and oil wells

within a certain distance from the operator’s well bore. The court did, however, grant a

preliminary injunction with regard to the monitoring and remediation provisions insofar

as they gave rise to significant implementation issues by requiring well operators to

“trespass” onto others’ lands. MSC, No. 573 M.D. 2016, slip op. at 22.

The Agencies posit that the Commonwealth Court erred by failing to recognize

their broad statutory authority under Act 13 and the Clean Streams Law to protect the

waters of the Commonwealth and the public from the impacts of drilling – powers which

they exercised by promulgating the area-of-review regulations. They refer to Section

3274 of Act 13 in particular as giving the EQB authority to promulgate regulations

necessary to accomplish such objectives. See Brief for Appellants at 44 (citing 58

Pa.C.S. §3274 (stating that the EQB “shall promulgate regulations to implement”

Chapter 32, relating to oil and gas)). The Agencies also note the Clean Streams Law

[J-73-2017] - 27
gives DEP discretion to order landowners to provide access to their land whenever a

condition on that land is causing pollution or a danger of pollution. See id. at 45

(quoting 35 P.S. §691.316).

In terms of liability for environmental harms, the Agencies observe that the Clean

Streams Law provides an independent basis for liability and that such liability can be

triggered by causation alone, as opposed to land ownership, thereby undercutting the

Commonwealth Court’s concern that the regulations are inconsistent with Sections 3220

and 3271 of Act 13. See id. at 46 (citing Commonwealth v. Harmar Coal Co., 452 Pa.

77, 306 A.2d 308 (1973)). The Agencies also advert to the large number of abandoned

oil and gas wells in this state, the many documented stray-gas-migration investigations

that have taken place since 1984, and “geyser-like events” and polluted groundwater

that can result from communication between an active unconventional well and an

existing oil or gas well. Id.17 Overall, in this regard, the Agencies fault the

Commonwealth Court for what they view as an overly narrow interpretation of their

authority under Act 13 and the Clean Streams Law. See id. at 47.

Notwithstanding the Agencies’ arguments, there are reasonable grounds for the

Commonwealth Court’s determination that a substantial legal question was raised in

terms of the monitoring and remediation obligations imposed by the regulations on well

operators relative to wells located on other persons’ property. The provision of the

Clean Streams Law giving DEP power to require entry onto others’ land is not only

discretionary, it is only triggered by actual pollution or a danger of pollution. The new

regulatory mandate to enter onto others’ land, visually monitor their wells, and cap their

wells if necessary, is far broader. Indeed, the regulations dictate that all identified wells

17Secretary Perry testified that “the act of fracking a well” can only cause groundwater
contamination when a well-communication incident occurs. N.T., Oct. 25, 2016, at 116.

[J-73-2017] - 28
be visually monitored during stimulation activities, although it is not evident how this

may be achieved without traversing the lands of others. The Agencies have not brought

to our attention a legal basis on which DEP would be authorized to require access onto

private land in the case of an inaccessible well which posed no apparent danger of

pollution. Further, counsel for the Agencies conceded at the hearing that DEP might not

have the authority to require anyone to allow access to their property for well-monitoring

purposes. See N.T., Oct. 26, 2016, at 358.18

Nor is Harmar Coal on point. In that matter this Court consolidated two appeals

dealing with the obligation of a coal mine operator to treat acid mine drainage (a type of

polluted water) before discharging it from its own mine into Commonwealth waters. In

one appeal, some of the drainage had its source in adjacent mines and flowed by

gravity into the subject mine. In the other, it had to be pumped out of an adjacent mine

to avoid destruction of a barrier between the two. See Harmar Coal, 452 Pa. at 81, 306

A.2d at 311. In both instances, the statutory language was applicable inasmuch as it

covered pollution discharges from the subject mine or from any other mine as needed to

enable operation of the subject mine. See id. at 100, 306 A.2d at 321. Notably, the

18 The dissent seeks to circumvent this problem by pointing to evidence that pollution
could result from a well-communication incident. See Concurring and Dissenting
Opinion, slip op. at 12. It bears noting that the Commonwealth Court acknowledged
such potentiality and declined to find a substantial legal issue with regard to it. See
MSC, No. 573 M.D. 2016, slip op. at 24. Instead, the court focused on issues arising
from the face of the regulation when considered in light of governing statutory
provisions. As discussed, these concerns include such items as: whether a well
operator may access and monitor every well owned by others and located on another’s
property within the area-of-review survey; and whether Section 78a.73(d) is consistent
with Act 13’s well-plugging requirements, which mandate that well operators plug their
own wells. See id. at 26. Such issues are not resolved by observing that it is possible
for a well-communication incident to occur and to cause pollution.

[J-73-2017] - 29
controversy did not relate to the entry by a mine operator onto the property of another

absent ongoing pollution or a known danger – or for visual monitoring purposes.

Given the above, we conclude there are apparently reasonable grounds to

support the court’s determination that MSC raised a significant legal question in regard

to the implementation of the area-of-review requirements.

In terms of the balancing-of-harms inquiry, the Commonwealth Court’s analysis is

somewhat conclusory. See MSC, No. 573 M.D. 2016, slip op. at 26. Unfortunately,

however, the parties’ arguments are not entirely helpful as they are not directly apposite

to the grant of preliminary relief. MSC notes that the RAF reflects an overall cost to

industry of $11 million to comply with the area-of-review regulations, and adds that

these costs will be unrecoverable if the regulations are ultimately deemed invalid. Still,

that figure appears to be the total cost going forward indefinitely, not the probable cost

to be incurred pending a final ruling on the merits. Likewise, the Agencies do not give

an expected cost which takes into account the limited timeframe involved. Rather, they

maintain there is a non-zero probability of communication between an unconventional

well and an existing well, which, if it were to occur, would result in water pollution and

substantial cleanup costs.

If such incidents were frequent, the Agencies’ argument would carry more

weight. According to Secretary Perry, however, they are “not a common occurrence.”

N.T., Oct. 25, 2016, at 120. Even accepting that the cleanup effort ensuing from a

single occurrence would be financially burdensome, see id., absent some indication that

there is more than a de minimus probability the risk will materialize before MSC’s claims

are decided (discussed below), we cannot say that the Commonwealth Court lacked

any reasonable basis for its conclusion regarding the balancing of harms.

[J-73-2017] - 30
 As for adverse effects to the public interest, the Agencies, again, portray that

well-communication incidents tend to cause significant environmental harms,

particularly if the communication is between an unconventional well and a conventional

one. See Brief for Appellants at 48. It is self-evident that significant environmental

harms have an adverse effect on the public interest. Again, however, such effects only

arise from an actual incident. MSC suggests that the record only supports a low

probability of this occurring. It argues that, with over 9,000 unconventional wells having

been drilled in Pennsylvania, see 46 Pa. Bull. No. 41, at 6463 (Oct. 8, 2016), reprinted

in R.R. 694a (reflecting a figure of 9,486), the record references only five well-

communication incidents and of those, only one was between an unconventional well

and a conventional one. See RAF at 89, reprinted in R.R. 844a.19

It is not clear from the record whether the five episodes mentioned in the RAF

were intended to comprise all such events that have occurred, as they are couched as

incidents which DEP chose to analyze for cost-comparison purposes. See id. In their

reply brief, though, the Agencies do not contradict MSC’s assertion that these are the

only five which have occurred since unconventional well drilling began, and moreover,

the Agencies do not point to any aspect of the record suggesting that more than five

incidents have occurred. Under these circumstances, an apparently reasonable basis

exists for the Commonwealth Court to conclude that, if a preliminary injunction were to

issue, the expected effect on the public interest would be slight due to a low probability

of a well-communication incident occurring within the limited timeframe involved.20

19More generally, Secretary Perry testified that communication into abandoned wells is
of substantially greater concern for conventional, than unconventional, drillers. See
N.T., Oct. 25, 2016, at 116-17.

20The dissent appears to take the position that the public interest is adversely affected
so as to defeat preliminary injunctive relief whenever there is any possibility of harm to
(continued…)
[J-73-2017] - 31
 Finally, we see no basis to disagree with the court’s suggestion that the

preliminary injunction, narrowed so that it applies only to wells located on the lands of

others, restores the parties to their status quo ante. See MSC, No. 573 M.D. 2016, slip

op. at 26-27.

Impoundments (Count IV)

Relative to Count IV, the Commonwealth Court preliminarily enjoined, as applied

to existing impoundments, Sections 78a.59b(b) and 78a.59c. Those provisions relate to

well-development impoundments and centralized impoundments, respectively. See

supra note 7. As to the latter, Section 78a.59c indicates centralized impoundments

must be closed or re-permitted by October 8, 2019, in compliance with the requirements

of Title 25, Subpart D, Article IX of the Pennsylvania Code, which relate to residual

waste management and were promulgated under SWMA, among other laws. See 25

Pa. Code §78a.59c.

For its part, Section 78a.59b(b), relating to well-development impoundments, has

two parts. It states that operators of unconventional wells must register existing well-

development impoundments with DEP. In pertinent part, it also mandates that any such

(…continued)
the environment, no matter how remote or speculative. See Concurring and Dissenting
Opinion, slip op. at 13 (suggesting a “no effect” test which would not countenance even
minimal or speculative risks). Other courts have eschewed that stance and instead
have considered the probable consequences of an injunction. See, e.g., Stormans, Inc.
v. Selecky, 586 F.3d 1109, 1139 (9th Cir. 2009) (explaining that, in analyzing the public-
interest prong for purposes of a preliminary injunction, courts should not consider
effects that are remote or speculative, but should “weigh the public interest in light of the
likely consequences of the injunction” (emphasis in original)). Although the dissent
quotes general language from SEIU reciting the standard formulation for the sixth prong
of the governing preliminary-injunction standard, the SEIU Court had no occasion to
consider whether remote or speculative harms operate to defeat entitlement to
preliminary injunctive relief.

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impoundments be upgraded to use a synthetic, impervious liner and be surrounded by a

fence (unless an individual is continually present) to prevent unauthorized acts by third

parties and damage from wildlife. See 25 Pa. Code §78a.59b(b), (d), (e).

The primary substantive basis on which interim relief was granted pertains to the

circumstance that existing impoundments were built to DEP standards extant at the

time, and there has been no change in the governing statutory law which would

authorize DEP to retroactively change such standards for impoundments built years ago

in reliance on DEP’s prior authorization. See MSC, No. 573 M.D. 2016, slip op. at 32.

Presently, the Agencies do not argue that the authorizing statutes have changed.

Instead, they proffer that they retain the authority to change impoundment requirements

via the rulemaking process and apply the new requirements retroactively to existing

impoundments without violating due process. In this regard, the Agencies distinguish

Young J. Lee, which the Commonwealth Court quoted, noting that that dispute involved

agency action which was adjudicative, rather than legislative, in nature. MSC responds

that the Commonwealth Court was appropriately skeptical that the Agencies had newly-

discovered powers under statutes that had been on the books for many years and, as

such, correctly held that a substantial legal question was raised as to the legality of the

regulations. Their argument is consistent with the Commonwealth Court’s expression

that “Secretary Perry credibly testified that these regulations stem not from a change in

the law, but from a change in DEP’s interpretation of long-standing law.” MSC, No. 573

M.D. 2016, slip op. at 32.

(i) Well-development impoundments

There is little in the record to suggest any reinterpretation of a statute occurred

with regard to well-development impoundments, which previously were minimally

regulated and were only subject to permitting if at least five acres of earth would be

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disturbed. See Brief for Appellants at 14-15 (providing background). Rather, Secretary

Perry explained that, given the sheer size of the new well-development impoundments

used for unconventional wells – ranging up to 30 million gallons – they are essentially in

the nature of a dam and, as such, are appropriately regulated under the Dam Safety

and Encroachments Act (“DSEA”).21 See N.T., Oct. 25, 2016, at 128. According to the

record, although these impoundments generally store freshwater, the water may at

times include other fluids used in well development which are not indigenous to the local

watershed, the escape of which can pose a threat of pollution to the waters of the

Commonwealth. See RAF at 31, reprinted in R.R. 786a.22

The Commonwealth Court did not identify a substantial legal issue with regard

DSEA’s authorization to regulate these impoundments. As noted, the court proceeded

from the supposition that the Agencies’ interpretation of governing law had changed – a

premise that does not apply with regard to well-development impoundments. Absent

any particularized contention tending to cast doubt upon the Agencies’ position that

DSEA allows for such regulations, see, e.g., 32 P.S. §693.5 (generally authorizing the

EQB to adopt regulations relating to dams, reservoirs, water obstructions, and

encroachments), there is little basis in the present record to believe the Agencies lacked

the authority to promulgate Section 78a.59b(b).

Moreover, by enjoining Section 78a.59b(b) without distinguishing between its two

parts, the court stayed enforcement of the well-registration requirement, which it never

21 Act of Nov. 26, 1978, P.L. 1375, No. 325 (as amended 32 P.S. §§693.1–693.27).

22The Agencies now also allow operators to store and use mine-influenced water in well
development impoundments, see 25 Pa. Code §78a.59b(h), although it is unclear
whether operators requested such ability or find it desirable. The Agencies view such
practice as beneficial because it reduces the consumption of fresh water from the
Commonwealth’s waterways. See RAF at 32, reprinted in R.R. 787a.

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discussed. Also, we are not convinced by the court’s reliance on Young J. Lee for

principles sounding in procedural due process. Instead, we agree with the Agencies

that that dispute was unlike the present one insofar as it dealt with adjudicative agency

action, namely, the revocation of a license. The promulgation of legislative regulations

involves procedural mechanisms absent from adjudications and, as such, is materially

different for due process purposes. See Small v. Horn, 554 Pa. 600, 613, 722 A.2d

664, 671 (1998) (“It is well settled that procedural due process concerns are implicated

only by adjudications, not by state actions that are legislative in character.” (footnote

and citation omitted)). Nor does the fact that the regulation may affect existing well-

development impoundments alone make it constitutionally unsound. See generally

Harmar Coal, 452 Pa. at 92, 306 A.2d at 316-17 (observing that the state’s police

power, including regulations maintaining the state’s water resources, may be applied to

business operations even where doing so causes “the imposition of new costs”

(citations omitted)).

Accordingly, we conclude that, at this stage, MSC has not carried its burden to

demonstrate a clear right to relief as to Section 78a.59b(b).

(ii) Centralized impoundments

The regulation governing centralized impoundments presents a different

situation. Secretary Perry testified that the Agencies had not previously regulated them

under SWMA on the view that they fell under SWMA’s exemption for drill cuttings from

well sites. See 35 P.S. §6018.103 (defining solid waste to exclude drill cuttings from

well sites and, in turn, defining drill cuttings broadly to include rock cuttings and any

“related mineral residues created during the drilling of wells” which are disposed of at

the well site). He then provided an explanation which, although not entirely clear,

appears to reflect that, given DEP’s experience with leakage from such impoundments,

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the Agencies reconsidered the issue and concluded that centralized impoundments

were not, in fact, located at well sites, meaning they could be regulated under SWMA;

this was true because, as noted, SWMA’s definition of “drill cuttings” only encompasses

well-drilling waste processed at the well site. See N.T., Oct. 25, 2016, at 134-35. Thus,

Secretary Perry indicated that that the Agencies’ current position was that their prior

interpretation, whereby centralized impoundments escaped SWMA regulation, “was an

error.” Id. at 135. It is on this basis that the Agencies now claim authority to require

centralized impoundments to “operate in the same manner as all other residual waste

transfer facilities located throughout the Commonwealth.” Brief for Appellants at 16.

We do not doubt that leaks from centralized impoundments are potentially

harmful to the environment. For present purposes, however, it is not apparent how

such occurrences can support the concept that the impoundments are not part of the

associated well site for SWMA purposes, whereas they were part of the well site before

it was known that they could leak. This, in turn, gives rise to a substantial legal issue

concerning the validity of the Agencies’ new interpretation of the scope of SWMA’s

exclusion of “drill cuttings” from the definition of solid waste. Thus, the Commonwealth

Court had an apparently reasonable basis to conclude that MSC had raised a

substantial legal question concerning whether SWMA authorizes the promulgation of

Section 78a.59c.

As the interim relief was limited to existing centralized impoundments that would

otherwise have to be closed or retrofitted, the court left Section 78a.59c in effect relative

to any new impoundments. Thus, any harm to the Agencies and the public interest is

limited to existing impoundments pending a final resolution on the merits. In terms of

irreparable harm from refusing the injunction, the Agencies estimated that well

operators would incur costs between $39,000,000 and $65,000,000 to retrofit existing

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centralized impoundments. See RAF at 98, reprinted in R.R. 853a.23 Therefore, as

concerns centralized impoundments, the Commonwealth Court had an apparently

reasonable basis to conclude that the injury to MSC from denying the injunction was

greater than the harm to the Agencies from granting it, and that granting interim relief

would not adversely affect the public interest.

Site restoration (Count V)

As discussed, the Commonwealth Court rejected most of MSC’s claims

regarding the new site-restoration regulations, see 25 Pa. Code §78a.65, except that it

granted preliminary relief with respect to Section 78a.65(d), which relates to disturbed

areas of land that are not included in a restoration plan and impervious surfaces that

remain in the post-drilling timeframe. The court found that a substantial legal question

had been raised as to whether that provision abrogated an exemption in the Clean

Streams Law. See MSC, No. 573 M.D. 2016, slip op. at 38 (“To the extent Section

78a.65(d) abrogates any requirements or exemptions in [t]he Clean Streams Law, MSC

has raised a substantial legal question over its validity.”).

The Agencies fault the court for finding a potential conflict between Section

78a.65(d) and the Clean Streams Law, since the identified potential conflict is not with

the enactment itself but with Section 102.8(n), a regulation promulgated pursuant to it.

23 The Agencies object that there is no evidence that the monetary cost of denying the
injunction would be incurred by MSC members because MSC did not prove that any of
its members operate existing centralized impoundments. This argument is waived as
the Agencies did not advance it before the Commonwealth Court, see MSC v. DEP &
EQB, No. 573 M.D. 2016, Brief in Opposition to Application for Expedited Special Relief,
at 36-40, and effectively assumed that MSC members would be affected. See, e.g., id.
at 38 (referring to a three-year sunset provision for decommissioning centralized
impoundments and proffering that during that period “MSC members can use these
impoundments and may even apply for permission to keep using them”).

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The Agencies argue, as well, that Section 78a.65(d) does not conflict with the

regulation. Rather, they maintain that, as expressed in the RAF, the purpose of Section

78a.65(d) is merely “to provide clarity between site restoration under Chapter 78[a] and

compliance with Chapter 102.” RAF at 38, reprinted in R.R. 793a, quoted in Brief for

Appellants at 59 (alteration supplied by Appellants).24 Separately, they also proffer that,

even if an irreconcilable conflict existed between the two regulations, Section 78a.65(d)

would nonetheless be enforceable as Section 102.8(n) is a general provision, whereas

Section 78a.65(d) is a special provision enacted later in time.

In response, MSC highlights that Act 13 requires erosion and sediment control

measures to be implemented in accordance with the Clean Streams Law. See Brief for

Appellee at 51 (citing 58 Pa.C.S. §3216). MSC continues that “Section 78a.65(d)

cannot ‘trump’ the Cleans Streams Law regulation,” id., and argues that the mere

possibility of a conflict is sufficient to raise a substantial legal issue for preliminary

injunction purposes. Notably, MSC does not reference any provision of the Clean

Streams Law with which Section 78a.65(d) is purportedly in conflict.

24 The RAF’s explanation in this regard elaborates that Section 78a.65(d) is

needed to distinguish between (1) “areas not restored” – areas not
included on the restoration plan and other remaining impervious areas and
(2) areas restored to meadow in good condition or better or areas that
otherwise incorporate antidegradation best available combination of
technologies (ABACT) or nondischarge PCSM best management
practices (BMPs). “Areas not restored” do not fall within the provisions in
§102.8(n) and therefore must meet the requirements, inter alia, of
§102.8(g). “Areas not restored” include areas where there are permanent
structures or impervious surfaces, therefore runoff produced from these
areas must be tributary to permanent PCSM BMPs to ensure the runoff
will be managed in accordance with the requirements of §102.8.

Id.

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 Unlike with some of the prior counts, the Commonwealth Court’s grant of partial

interim relief as to Count V was not based on any identified deficiency in the Agencies’

statutory authorization to promulgate the rule in question. Rather, the court discerned

that a potential conflict existed between Section 78a.65(d) and either the Clean Streams

Law or Section 102.8(n)’s limited exemption from compliance with Section 102.8(g)’s

additional requirements for a PCSM developed pursuant to the Clean Streams Law.

As we read the two regulatory provisions, it does not appear that a conflict exists.

Section 78a.56(d), on its face, only applies to impervious surfaces and disturbed areas

which are not included in a site restoration plan, whereas the exemption reflected in

Section 102.8(n) applies to a certain portion of a site restoration plan. Additionally, no

Clean Streams Law provision has been identified that may be in conflict with Section

78a.65(d). At most, there may be an incongruity between two regulations – Sections

102.8(n) and 78a.65(d) – but only in the sense that the latter narrows the scope of

circumstances in which the former applies. This in itself would be insufficient to show

that Section 78a.65(d) is in conflict with (or unauthorized by) a legislative enactment.

Even if we assume, for decisional purposes, that an irreconcilable conflict exists

between the two regulations, it is clear that Section 78a.65(d) must prevail. As the

Agencies point out, Section 102.8(n) applies generally to a number of regulated

activities that require site restoration, whereas Section 78a.65(d) applies specifically to

unconventional gas well sites. Further, Section 78a.65(d) was enacted later in time

than Section 102.8(n). Under these circumstances, Section 78a.65(d), being more

specific, takes precedence over Section 102.8(n). See 1 Pa.C.S. §1933 (reflecting that,

with an irreconcilable conflict between a general statute and a special statute enacted

later in time, the special statute prevails over – and is construed as an exception to –

the general one). See generally Saturday Family LP v. Commonwealth, 148 A.3d 931,

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935 (Pa. Cmwlth. 2016) (indicating that the rules of statutory construction apply to

regulations in the Pennsylvania Code).

Accordingly, we conclude that MSC has not demonstrated a clear right to relief in

relation to Section 78a.65(d).

D. Alleged drafting errors and overbreadth of the order

Appellants raise two additional issues. They indicate that the Commonwealth

Court’s order refers to the wrong section numbers of some of the regulations being

preliminarily enjoined due to typographical errors. Second, they assert that the relief

ordered in Count IV, relating to impoundments, was overbroad in that it failed to leave in

place the mandate that well operators register well-development impoundments with

DEP – an aspect of Section 78a.59b(b) which was not challenged. See Brief for

Appellants at 64-65.

Both issues are moot. The Commonwealth Court amended its order to address

the drafting errors Appellants have identified. Indeed, Appellants include the amended

order (in which the typographical errors are corrected) as an appendix to their brief. In

terms of the court’s failure to leave in place the impoundment-registration provision, any

such omission on the court’s part is now immaterial in light of our decision to reverse the

order insofar as it enjoins enforcement of Section 78a.59b(b).

III. Conclusion

For the reasons given above, we affirm in part and reverse in part the order of

the Commonwealth Court. We affirm the grant of preliminary injunctive relief as to

Counts I and II. As for Count IV, we affirm the grant of relief as to Section 78a.59c, but

reverse the grant of relief as to Section 78a.59b(b). Finally, we reverse the grant of

preliminary injunctive relief as to Count V.

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Justices Baer, Todd, Dougherty, Wecht and Mundy join the opinion.

Justice Donohue files a concurring and dissenting opinion.

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