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Seneca Resources Corp. v. Highland Township

United States District Court, W.D. Pennsylvania

September 20, 2017

SENECA RESOURCES CORPORATION, Plaintiff
v.
HIGHLAND TOWNSHIP, et al., Defendants.

          MEMORANDUM OPINION [1]

          SUSAN PARADISE BAXTER, UNITED STATES MAGISTRATE JUDGE.

         On Municipal Authority's Motion to Intervene

         Introduction

         Plaintiff Seneca Resources Corporation (“Seneca Resources”) brought this action to challenge the constitutionality, enforceability, and validity of the Home Rule Charter (the “Charter”) in Highland Township. Named as Defendants to this action are: Highland Township and the Township's Board of Supervisors.

         Pending before the Court is a motion to intervene filed by Proposed Intervenor, the Highland Township Municipal Authority (“Municipal Authority”). ECF No. 34. For the following reasons, the Municipal Authority's motion to intervene will be denied.

         Relevant Procedural History

         Seneca Resources, a corporation engaged in oil and gas exploration and production, initiated this action on November 30, 2016, challenging the Home Rule Charter[2] which bans Seneca Resources' ability to create and operate an injection well within the Township. ECF No. 1, page 1. Seneca Resources has requested that the Court strike the entire Home Rule Charter and temporarily and permanently enjoin Highland Township and the Board of Supervisors (the “Board”) from enforcing the Charter. Id.

         The Municipal Authority seeks to intervene, pursuant to Fed.R.Civ.P. Rule24(a), and alternatively, Fed.R.Civ.P. 24(b), in order to defend the Charter and bring counterclaims[3] against Seneca Resources. Both Plaintiff and Defendants oppose this motion to intervene.

         Intervention under Federal Rule 24

         Rule 24 provides for intervention as a matter of right and permissive intervention. Fed.R.Civ.P.24 (a) and (b).[4] To qualify for intervention as a matter of right under Rule 24(a)(2), four requirements must be met: 1) 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. United States v. Territory of the Virgin Islands, 748 F.3d 514, 519 (3d Cir. 2014). Additionally, it is required that each of the four elements be met separately to intervene as of right. Id. It is the burden of the party seeking intervention to satisfy all four requirements. Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005).

         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 necessary to protect rights that are not identical to an existing party. Virgin Islands, 748 F.3d at 524. “The court may consider the same facts and circumstances used to determine whether intervention was appropriate under Rule 24(a) to determine whether the court should use its discretion to permit intervention under Rule 24(b). Community Vocational Schools of Pittsburgh, Inc. v. Mildon Bus Lines, Inc., 2017 WL 1376298, at *8 (W.D. Pa. Apr. 17, 2017) (internal citations omitted).

         The Previous Litigation

         This case and the current motion closely track a previous action involving Seneca Resources and the Defendants. See Seneca Resources Corp. v. Highland Township, C.A. No. 1:15-cv-00060. There, the Municipal Authority, along with two other proposed intervenors, attempted to intervene in an effort to defend the Township's Community Bill of Rights Ordinance (the “Ordinance”). Unlike the Home Rule Charter at issue in the present case, the disputed Ordinance was passed by the former Board of Supervisors in 2013-2014. The Ordinance prohibited the operation of underground injection control wells to dispose of waste water from oil and gas extraction within the Township.

         This Court denied the motion to intervene on the grounds that the proposed intervenors failed to provide clear and convincing evidence to show that the Township and Board did not adequately represent their interests. Later, the Board of Supervisors rescinded the Community Bill of Rights Ordinance and reached a settlement that resulted in the entry of a Stipulation and Consent Decree (“Consent Decree”). The Consent Decree entered into between Seneca Resources and Highland Township and its Board of Supervisors specifically provided that portions of the Community Bill of Rights Ordinance were unconstitutional, unenforceable and invalid. Seneca Resources Corp. v. Highland Township, C.A. No. 1:15-cv-00060: ECF No. 82.

         In response, the proposed intervenors appealed the denial of the motion to intervene, the adoption of the Consent Decree, as well as motions for reconsideration of each. The Court of Appeals for the Third Circuit held: 1) the motion to intervene to defend the Ordinance was rendered moot by the Ordinance's repeal; 2) district court did not abuse its discretion in denying the proposed intervenors' motion to reconsider the order denying their motion to intervene to challenge the consent decree; and 3) the proposed intervenors lacked standing to challenge the consent decree. Seneca Resources Corp. v. Township of Highland, 863 F.3d 245 (3d Cir. Jul.17, 2017).

         On November 8, 2016, by popular vote, the citizens of Highland Township, adopted the challenged Home Rule Charter pursuant to Pennsylvania's Home Rule Charter and Optional Plans Law, 53 Pa. C.S.A. §290. ECF No. 1-1, page 3. The Charter functions as a local constitution and promises to guarantee and protect a range of rights, including “community and ecosystem rights above the claimed rights of corporations and to prohibit frack wastewater injection wells.” ECF No. 34-1, page 1. Additionally, the Home Rule Charter purports to provide the right to self-government in the local community free from interference by the state or federal government. ECF No. 1-1, page 5.

         The Parties and the Proposed Intervenor

         It is essential to understand the structure and powers of the Proposed Intervenor the Municipal Authority as they relate to those of the Defendant Board of Supervisors. The Board of Supervisors consists of three representatives elected by the citizens of Highland Township and acts as the governing body of the Home Rule municipality. ECF No. 1-1, page 3. As stated in the Defendants' Answer, the Board had no part in the adoption of the Home Rule Charter nor does it have the authority to repeal or amend the Charter. ECF No. 15, pages 2-3. Further, the Board acknowledged arguing against the initial adoption of the Home Rule Charter and acknowledges that several portions “appear to be void and unenforceable under current state or federal law.” Id.[5] Further, the Board admits to a significant portion of the allegations but further maintains that the Board of Supervisors has no applicable authority to authorize any changes to the Home Rule Charter. Id. Only the Township's citizens have authority to make changes to the Charter.

         Proposed Intervenor, the Municipal Authority, is a Pennsylvania municipal authority formed by and operating under the Pennsylvania Municipal Authorities Act, 53 Pa. Cons. Stat. §5601 and is classified as a quasi-governmental body. ECF No. 34-1, pages 11, 20. It is a separate entity of the local government, within Highland Township, and is an independent agency of the Commonwealth. Under the Pennsylvania Municipal Authorities Act, municipal authorities generally have the purpose of “acquiring, holding, constructing, financing, improving, maintaining and operating, owning or leasing, either in the capacity of lessor or lessee, projects” including “waterworks, water supply works, [and] water distribution systems.” 53 Pa. Cons. Stat. §5607(a). Although the Board of Supervisors is allowed to appoint members to the Municipal Authority, the Municipal Authority argues that its mission is separate from the Board and argues that its functions are mandated by the public: “the public approves of the Municipal Authority's operations…[and entrusts it] to care for the Crystal Spring, and to administer distribution of its water to the ...


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