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Coalition v. Department of Environmental Protection of Commonwealth

Supreme Court of Pennsylvania

June 1, 2018

THE MARCELLUS SHALE COALITION, Appellee
v.
DEPARTMENT OF ENVIRONMENTAL PROTECTION OF THE COMMONWEALTH OF PENNSYLVANIA AND ENVIRONMENTAL QUALITY BOARD OF THE COMMONWEALTH OF PENNSYLVANIA, Appellants

          ARGUED: October 18, 2017

          Appeal from the Order of the Commonwealth Court at No. 573 MD 2016 dated 11/8/16

          OPINION

          SAYLOR, CHIEF JUSTICE.

         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.

         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]

         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 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, 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 "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 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 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).

         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. 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. 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, 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. §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 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 (1) 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. 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 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 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 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).

         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, 34 ...


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