PENNSYLVANIA GENERAL ENERGY COMPANY, LLC v. GRANT TOWNSHIP
Filing
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MEMORANDUM OPINION re 16 MOTION to Intervene filed by PIOGA, 96 Renewed MOTION to Intervene filed by LITTLE MAHONING WATERSHED, EAST RUN HELLBENDERS SOCIETY, INC., 37 MOTION to Intervene filed by LITTLE MAHONING WATERSHED, EAST RUN HELLBENDERS SOCIETY, INC. An appropriate order will follow. Signed by Magistrate Judge Susan Paradise Baxter on 10/14/2015. (lrw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
PENNSYLVANIA GENERAL ENERGY
COMPANY, LLC,
Plaintiff
vs.
GRANT TOWNSHIP,
Defendant.
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C.A.No. 14-209ERIE
Magistrate Judge Baxter
MEMORANDUM OPINION
Magistrate Judge Susan Paradise Baxter
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Plaintiff Pennsylvania General Energy Company, LLC, ("PGE") filed this action
challenging the constitutionality, validity and enforceability of an ordinance adopted by Grant
Township that established a so-called Community Bill of Rights, which prohibits Plaintiffs
ability to operate in Grant Township. Plaintiff seeks relief against Defendant Grant Township on
the grounds that the Ordinance purports to strip Plaintiff of its federal constitutional rights.
Additionally, Plaintiff contends that the Ordinance is in direct conflict with a number of
Pennsylvania statutes and is therefore preempted. Defendant Grant Township has filed a
counterclaim alleging that by challenging the Ordinance, PGE is violating the inalienable rights
ofthe people of its Townships to "local community self government." Two motions to intervene
in the dispute are currently before the Court.
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In accordance with the provisions of28 U.S.C. § 636(c)(l), the parties have voluntarily
consented to have a United States Magistrate Judge conduct proceedings in this case, including
the entry of a final judgment.
First, a Pennsylvania nonprofit trade association representing individuals and
corporations involved in the oil and gas industry in the Commonwealth moved to intervene
pursuant to Rule 24(b) of the Federal Rules of Civil Procedure to challenge the Defendant's
Ordinance. ECF No. 16. Pennsylvania Independent Oil & Gas Association ("PIOGA") has at
least five member oil and gas well operators in Grant Township affected by the terms ofthe
Community Bill of Rights Ordinance. This motion is opposed by Defendant Grant Township.
ECF No. 32.
Second, two proposed intervenors, East Run Hellbenders Society, Inc. ("Hellbenders")
and the Little Mahoning Watershed, filed a single motion to intervene seeking to defend the
Ordinance pursuant to Fed.R.Civ.P. Rule 24(a), and, alternatively, Fed.R.Civ.P. 24(b). ECF No.
37. Hellbenders is a self-described advocacy group organized in April of 2014 "in response to
POE's planned injection well and residents' desire to exercise their right oflocal community self
government to protect their health, safety, welfare, and natural environment." ECF No. 38, page
5. Hellbenders was the primary advocate for the Community Bill of Rights Ordinance. Id. at
page 7; ECF No. 37-3,
~
29; ECF No. 37-4, ~ 23; and ECF No. 37-5,
~~
15, 21. The Little
Mahoning Watershed "is an ecosystem that encompasses C¥rtain aquatic and terrestrial
ecosystems associated with Little Mahoning Creek," including the tributaries East Run Creek
and Mill Run Creek, and the ground water systems below Grant Township. ECF No. 37, ~~ 7, 8.
Plaintiff opposes the intervention of Hellbenders and the Little Mahoning Watershed. ECF No.
45.
The facts of this case are well set out in the Memorandum Opinions filed this date
determining motions to dismiss and for judgment on the pleadings and will not be repeated here.
Neither motion to intervene was untimely filed so to be a burden to the other side. Instead, the
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arguments against intervention focus mainly on the appropriateness and necessity of each of the
proposed intervenors. In addition, with the Little Mahoning Watershed, an issue of standing is
also raised.
Rule 24 ofthe Federal Rules of Civil Procedure
Rule 24 provides for intervention as a matter of right and permissive intervention.
Fed.R.Civ.P. 24(a) and (b). To qualify for intervention as a matter of right, four requirements
must be met: I) the application must be timely, 2) the applicant must have sufficient interest in
the lawsuit, 3) the interest must be affected or impaired by the disposition of the lawsuit, and 4)
the interest must not be adequately represented by an existing party. Fed.R.Civ.P. 24(a)(2);
United States v. Territory ofthe Virgin Islands, 748 F.3d 514,519 (3d Cir. 2014). In contrast,
permissive intervention relies upon the discretion of the Court when an applicant "has a claim or
defense that shares with the main action a common question of law or fact." Fed.R.Civ.P.
24(b)(1 )(B). Important considerations for the Court in making this determination are whether
intervention would prejudice a party by delay or otherwise, and whether intervention is necessar
to protect rights that are not identical to an existing party. Virgin Islands, 748 F.3d at 524.
PIOGA's Motion to Intervene
PIOGA moves for permissive intervention under Fed.R.Civ.P. 24(b). ECF No. 16, ~ 9.
As its motion was filed early in the case, such that Defendant is not prejudiced by the timing of
the proposed intervention, the pivotal inquiry for the Court is whether PIOGA has particular
interests that are not protected by Plaintiff. PIOGA agrees that the claims brought in the action
by Plaintiff describe its issues as well -mainly, that its members may continue exploring and
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developing oil and natural gas business, including managing brine and produced fluids generated
from operating gas wells, in Grant Township. ECF No. 16, ~ 5. Despite this, PIOGA argues that
as an industry trade association its concerns and interests extend beyond Plaintiffs to the
industry as a whole. In this regard, PIOGA represents businesses that operate under different
contracts or leases from Plaintiffs in Grant Township. In addition, PIOGA claims that the events
as they play out in this case will affect members' businesses across the Commonwealth and
beyond. ECF No. 42.
Defendant makes two main arguments in opposition to PIOGA's intervention: 1) there
are no common claims as the Ordinance does not affect "temporary" storage of oil and gas waste
materials at the members' well sites and no PIOGA member is in violation of the Ordinance
currently; and 2) Plaintiff adequately represents PIOGA' s interests without intervention.
As to the first argument- that there are no common claims- Defendant is off the mark.
In fact, Defendant's arguments are similar to those it regularly makes in filings and oral
argument attempting to limit this action in terms ofwhether or not Plaintiff is able to dispose of
its oil and gas waste at the Yanity Well site. On the contrary, despite the fact that this case may
affect Plaintiffs operations in that regard, the claims of the Amended Complaint are much more
far-reaching than Defendant's description of them. This is discussed more fully in the
Memorandum Opinion on Defendant's motion to dismiss based on standing, to which the parties
are referred. See ECF No. 111; ECF No. 113.
In its Amended Complaint, Plaintiff charges that the Ordinance violates its federal
constitutional rights and is pre-empted by state law, among other things. These claims are also
PIOGA's members' claims, not only those with lease contracts in Grant Township, but also thos
members who may face this type of local legislation in other places within the Commonwealth.
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For example, the claims in the Amended Complaint that the Ordinance violates Plaintiffs rights
under the First Amendment, the Contract Clause and the Due Process Clause of the United States
Constitution and is preempted by several state laws are the precise claims that PIOGA's
members have with the Ordinance. For its part, Defendant's argument that the Ordinance does
not affect "temporary" storage of wastes- whether or not that is borne out by the language of the
Ordinance itself- is irrelevant to whether the Ordinance forbids access to the courts to challenge
its terms or whether the Ordinance purports to void existing lease contracts, for example. These
are some ofthe common issues between Plaintiff and PIOGA's members and these are the
claims in the Amended Complaint.
Importantly for the inquiry here, there are some differences. The members ofPIOGA
have separate business relationships, operations and contracts in Grant Township from those of
Plaintiff, which makes Plaintiffs representation of them insufficient for challenging the
Ordinance without intervention. PIOGA also raises a claim under the Pennsylvania Constitution
that is not made by PGE. See ECF No. 16-1, Proposed Intervenor Complaint, Count VII. These
details are the essence of the considerations a court must make in exercising its broad discretion
whether to permit intervention under Rule 24(b). Because the interests ofPIOGA's members are
directly affected by the outcome of this litigation and because those interests are not identical to
Plaintiffs, permissive intervention is appropriate. This Court will not file PIOGA's Intervenor
Complaint, however, which is attached as Exhibit 1 to its motion [ECF No. 16-1 ], without
providing it sufficient time to amend in conjunction with the rulings made today.
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Hellbenders and Little Mahoning Watershed's Motion to Intervene
Hellbenders and the Little Mahoning Watershed move together to intervene to support
Defendant Grant Township in its pursuit of protecting the health, safety, welfare and natural
environment of its community through legislation such as the Ordinance in this case. ECF No.
38. Although Hellbenders and the Little Mahoning Watershed seek to intervene in support of
Grant Township's answer and affirmative defense, they do not seek to intervene in Grant
Township's assertion of a counterclaim. See ECF No. 37-2, Proposed Intervenor Answer.
These Intervenor Applicants move for intervention both as of right and, alternatively, by
permission. As to their motion seeking to intervene as of right, the analysis follows the four
elements listed in Rule 24(a)(2), without the broad discretion afforded by Rule 24(b). The first
three elements- timeliness, sufficient interest and interests affected by the lawsuit- are wellalleged by the Intervenor Applicants and not contested by Plaintiff, so no analysis is required
here. The fourth element- the adequacy of Defendant's representation- is where the Court will
base its determination.
It is vital to discuss at the outset that a presumption arises that there is an adequacy of
representation when the party in the action representing the interests ofthe intervenor applicant
is the government. Thus, if this presumption is not rebutted, the motion fails. Virgin Islands, 748
F.3d at 520. In this regard, "a potential intervenor can only overcome the presumption and
thereby intervene by making a 'compelling showing ... to demonstrate why [the government's]
representation is not adequate."' Id. quoting Mountain Top Condo Ass'n v. Dave Stabbert
Master Builder, Inc., 72 F.3d 361, 369 (3d Cir.\995).
Intervenor Applicants did not acknowledge this presumption in their moving papers and
instead argued that their showing in this regard need only be minimal. ECF No. 38, page 16. The
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crux of their argument is: "Allowing Hellbenders and the Little Mahoning Watershed to
intervene in these circumstances advances a 'major premise of intervention- the protection of
third parties affected by pending litigation."' Id. at page 1, quoting Kleissler v. U.S. Forest
Service, 157 F.3d 964, 971 (3d Cir. 1998).
Plaintiff opposed the motion on several grounds, but as to this point, insisted that clear
and convincing evidence must be presented to rebut the presumption of adequacy of
representation by Defendant. Relying heavily on the Virgin Islands case, as well as other Third
Circuit precedence, Plaintiff argued that Hellbenders and the Little Mahoning Watershed share
the same interests and goals as Defendant Grant Township. Moreover, Plaintiff argued that the
Intervenor Applicants provided no evidence, let alone clear and convincing evidence, to rebut the
presumption that Defendant did not represent their interests by vigorously defending the
Ordinance. ECF No. 45.
In reply, reliance is made on the Kleissler case, which permitted a lighter standard to
rebut the presumption in cases where "an agency's views are necessarily colored by its view of
the public welfare rather than the more parochial view of a proposed intervenor whose interest is
personal to it." Kleissler, 157 F.3d at 972 (citations omitted). Because the Third Circuit discusse
at length in the Virgin Island case the distinction between the use of the clear and convincing
standard and the relaxed standard for rebutting the presumption, instruction is sought there.
The Third Circuit agreed with the ruling in the Keissler case that the relaxed standard is
only appropriate where a conflict exists "between the intervenors' direct economic interests and
the government's shifting public policy interests." Virgin Islands, 748 F.3d at 521. In Keissler,
the government agency was re-thinking its policy regarding timber removal contracts to reflect
more conservation concerns. Entities who relied on the revenue generated by the contracts,
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including school districts, sought to intervene in the litigation determining the validity of those
contracts. In such a case, the strictly monetary interests of the intervenors could conflict with the
governmental interest of balancing revenue with new conservation policies.
No such conflict existed in the Virgin Islands case where an inmate sought to intervene in
a civil rights action brought by the United States government to improve prison conditions. In
that case, the intervenor applicant quoted directly from the government's pleadings in his own
filings and received the same benefit from the government's efforts to improve the conditions
there. The Court held that clear and convincing evidence was required in such a situation where
the '"personal' and 'parochial' views ofthe proposed intervenor align with the constitutional
interests ofthe particular government agency." Virgin Islands, 157 F.3d at 524 (citations
omitted). In short, when the benefits are the same to the government-party and the intervenor,
clear and convincing evidence is needed to rebut the presumption.
That is precisely the case here. The benefits from successfully defending the Ordinance
are spelled out in the Ordinance itself. These are the precise results -- health, safety, welfare and
natural environment protection- sought by the Intervenor Applicants to the benefit of the area
encompassed by the Little Mahoning Watershed. In addition, the rights of the residents of Grant
Township are enumerated in the Ordinance, such that the defense of the Ordinance in this action
necessarily defends the proposed Intervenor Hellbenders' members as well. The mission of the
incorporated organization aligns exactly to the terms of the Ordinance being defended by Grant
Township, as well it should since Hellbenders advocated for the adoption of the Community Bill
of Rights Ordinance.
As to the issue of whether the Little Mahoning Watershed, an ecosystem, has standing
under the law, no determination need be made here. Clear and convincing evidence has not been
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produced to show that Defendant's vigorous defense of the Ordinance, the terms ofwhich
protect the Watershed in all of its locations, do not line up precisely.
Finally, and alternatively, these Intervenor Applicants suggest that if they do not qualify
for intervention as of right, the Court should grant them permissive intervention. Because the
discretionary decision for permissive intervention relies heavily on the adequacy of
representation of the proposed intervenors' interests, permissive intervention is also
inappropriate for the reasons discussed above. Neither Hellbenders nor the Little Mahoning
Watershed is appropriately intervened here.
An appropriate order will issue.
/s/ Susan Paradise Baxter
SUSAN PARADISE BAXTER
United States Magistrate Judge
Dated: October 14, 2015
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