Enviro Rights: What’s The Public Trust Role In Pa.?

October 17, 2017Articles Law360

In the 1970s, Pennsylvania, Rhode Island, Hawaii, Illinois and Massachusetts followed the 1889 lead of Montana in providing constitutional guarantees of environmental protection. In 1971, Pennsylvania voters approved, by a margin of 4 to 1, a constitutional amendment stating:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

Very little litigation occurred to define the meaning of the so-called environmental rights amendment (ERA). The debate was largely whether or not this amendment was “self-executing”  in other words whether the state Legislature had to pass statutes to empower the commonwealth to exercise any authority under the amendment.

Now, the Pennsylvania Supreme Court has changed the discussion in Pennsylvania Environmental Defense Foundation v. Commonwealth of Pennsylvania, 2017 Pa. LEXIS 1393 (June 20, 2017) (PEDF case). The state Supreme Court considered whether funds raised by uses that took resources from the environment (i.e., extraction of oil and gas from state lands) could be transferred to general nonenvironmental funds without violating the ERA’s requirement that the government act as a “trustee” over “public natural resources.” As trustee, the appellants argued, Pennsylvania’s government must use these funds for environmental purposes.

The court agreed and used the decision to signal that it would consider the public trust connotations of the ERA in the future. It took a step further than it had in 2013, in Robinson Township v. Commonwealth of Pennsylvania, another significant case in which the court could muster only a plurality favoring a more active interpretation of the ERA.

Much has been written by the bar about the impact of the PEDF decision, what led to the ERA and what will happen in its future interpretations. In this article, we will examine what it means to be a public trustee and what positions various groups in the discussions are taking.

What is a Public Trustee?

What did the ERA change in 1971? Under common law principles, the government already had a responsibility to the environment. The ERA extended the government’s role to “public natural resources” (which was not defined in the amendment). In the absence of the ERA, was the government oblivious to any obligation to manage natural resources?

Obviously not. In fact, as far back as the Magna Carta, the king was forbidden from constructing fishing weirs that obstructed navigation. The United States Supreme Court has also recognized that the government can have duties as a trustee in 1892. The court, in Illinois Central Railroad v. Illinois, 146 U.S. 387 (1892), revoked a grant of much of the Chicago bay to the Illinois Central Railroad and stated that the common law public trust doctrine prevented the government from impairing the public right to land under navigable waters.

What role did the government have as a trustee? Common law defined the duties of “trustees” in general but did not suggest a definition to be applied to governments. The duties of a trustee, often defined in statutes, included the duty to invest and to make property productive. It did not include an express duty to defend the corpus. At common law, the trustee instead had a duty to manage the trust assets with reasonable care and skill. The trustee must act as a fiduciary, able to dispose of assets in exchange for fair value.

What is the Public Natural Resource?

The ERA declares that the commonwealth is the trustee for the “public natural resources,” yet what are those resources? The common law considered such things as the grazing of sheep on the village green. At some point, the government was to step in if that grazing became too extensive. Also, the common law looked at the ownership of land between high tide and low tide. That land was originally owned by the king as it was not usable by private parties.

Surely, the ERA’s reference to public natural resources must mean more than village greens and tidal areas. In the PEDF decision, the court took a stab at defining some of the resources and said that they “would include the state forest and park lands leased for oil and gas exploration” that were at issue in the case. It also included the oil and the gas themselves. The court then cited debate on the 1970 ERA legislation, stating that the original language included air, water, fish, wildlife and public lands. Ultimately, these references were removed in the ERA to discourage courts from limiting the scope of those resources.

Do we look at the first sentence of the ERA and use its reference to clean air, pure water and preservation of values? The PEDF court did not state that we should. In fact, it states that the ERA grants two separate rights. The first sentence is like a bill of rights provision  it prohibits the government from acting contrary to the enumerated rights of the citizens. The second sentence asserts a common ownership of some undefined public natural resource. It could be argued that different rights and privileges are protected by the two sentences. The third sentence then establishes the public trust with the natural resources as the trust corpus, providing that the commonwealth shall “conserve and maintain” those resources “for the benefit of all the people.”

So, we have raised another question for which there is no clear answer.

Work Toward Clarity?

In 2013, a plurality of the court in Robinson Township v. Commonwealth, 83 A.3d 901 (Pa. Sup. Ct. 2013), stated that the ERA created a “duty to prevent and remedy the degradation, diminution, or depletion of our public natural resources”. Id. at 957. This decision was not the mandate given in the PEDF decision, as there were more fractures in the Robinson court and the decision was only a plurality opinion. But, the PEDF case has clearly echoed that sentiment with the obligations of trusteeship clearly in balance. Moreover, the PEDF decision held that the trust contemplated by the ERA’s express language is rooted in basic private trust principles under state law, and not in the type of “public trust doctrine” outlined by the U.S. Supreme Court in Illinois Central Railroad.

Do the public natural resources include the air? Groundwater? Surface water? Minerals? If so, how do we reconcile this with the fact these items can also be transferable private rights?

We will attempt to summarize the major debate positions, with apology to all of those in the debate for simplifying their arguments for the ease of the reader. We recognize that there are as many nuances in this very academic debate as there are ticks residing in the Pennsylvania public natural resources.

What Does the Natural Resources Community Advocate?

Environmental groups seeking to enforce the ERA have argued  and the Pennsylvania Supreme Court has agreed  that the public trustee duties that the ERA assigns to the commonwealth extend to all branches and levels of Pennsylvania government, both statewide and local. This implicates counties, municipalities and other local agencies, which are creatures of Pennsylvania state law.

In August 2017, the Pennsylvania Environmental Hearing Board (EHB) issued an opinion that  for the first time  used the ERA to analyze a Department of Environmental Protection permit decision. Center for Coalfield Justice and Sierra Club v. DEP, EHB Docket No. 2014-072-B (Aug. 15, 2017). Although presently on appeal, that decision has led to ERA claims in more and more contexts.

Although the PEDF court only considered state forests and parks  and the oil and gas deposits located thereunder  and determined that they were “public natural resources,” groups seeking to protect natural resources believe that Pennsylvania courts will give favorable treatment to an expansive reading of “public natural resources” due to the ERA legislative history.

In fact, the Supreme Court in the PEDF opinion adopts the earlier discussion in Robinson Township of the legislative history. The EHB also relied on that history in its Center for Coalfield Justice adjudication. It predicted that the Supreme Court would find that the streams at issue in that challenge to DEP coal mining permitting decisions were indeed “public natural resources.” Interestingly, the EHB invalidated one permit that would have allowed the elimination of a stream, but upheld a second permit because the DEP had imposed permit conditions to mitigate impacts on two other streams. That satisfied DEP’s duties as trustee.

We can expect these groups to challenge other types of resources and the exercise of permitting. For example, should zoning and wastewater permits issued by local governments balance the rights to the permit with the impact on the environment? What about cumulative impacts in areas nearby multiple permitted uses? Also, we expect that the challenges will go to natural resources not considered in the PEDF decision  such as air and groundwater. Are these within the corpus of the trust the ERA establishes? Do they have to be publicly owned, or can certain public natural resources  again, air and groundwater come to mind  exist on, under or above privately owned property?

What About the Regulated Community?

Initially, many in the regulated community are focused on two areas of concern. First, the commonwealth has been permitting uses of resources for years. Countless air permits, water permits and authorizations affecting the quality of natural resources have been issued since the founding of the original Department of Environmental Resource in 1970. Do these permits consider trust issues by using risk considerations? Does the PEDF decision call into question all of the permits previously issued by the government?

Second, does the ERA now require that DEP take affirmative steps to stop degradation of the natural resources without regard to economic development and private rights to use real property? Also, does DEP have an independent requirement to actively pursue permit holders or others who “pollute” and, if so, where does that money come from, given a long history of reducing public funding of the DEP?

A commonly articulated position is that all of the statutes enabling the permitting done by DEP reference the ERA provisions and incorporate them into their text. This, it is argued, demonstrates that trustee consideration has been made. Although there is some appeal to this argument, it is also recognized that courts have struck down some of the provisions in these statutes or reversed DEP decisions, so the mere reference to the Constitution is not a trump card.

Another argument is that the tests employed by DEP in its permitting are “risk-based” approaches that consider what has to be done to reduce the risk inherent in allowing activities that may both provide jobs and livelihood for people, but also negatively impact the environment. Is this enough to support DEP’s required role as trustee?

A fundamental role for a trustee in a private context is to preserve the corpus of the trust. However, the ERA directs that the commonwealth as the public trustee is to “conserve and maintain” public natural resources “for the benefit of all the people.” The Robinson Township plurality suggested that these directions “do not require a freeze of the existing public natural resource stock,” but rather allow “legitimate development tending to improve upon the lot of Pennsylvania’s citizenry, with the evident goal of promoting sustainable development.” Accordingly, it would seem that under the PEDF decision that the government may grant trust assets to private parties even if they harm the corpus, provided that there is adequate consideration given and reasonable mitigation of those harms.

Finally, what permits are within the police power of the government? Does there exist a separate competing interest of the government in protecting the public safety?

What Do We Do Next?

Clearly, there is much to be debated and to be litigated.

The primary issue will be what constitutes the public natural resources. However, just as importantly, we will ask whether the state as trustee has adequately evaluated and balanced the benefits it has given to the private entities in exchange with the benefits it receives for the public. Further, the government and regulated community must determine how best to document and ensure compliance with the ERA.

One thing should not get lost in the debate. The ERA applies to all of the government, from the state Legislature to municipal bodies. Challenges will now be brought against those branches of government, and they too must act as trustees.

Reprinted with permission from Law360. (c) 2017 Portfolio Media. Further duplication without permission is prohibited. All rights reserved.