Unconventional Gas Well Impact Fee Act, Act 13 of 2012; Statutory Construction
Snyder Bros., Inc. v. Pa Pub. Util. Comm’n, 157 A.3d 1018 (Pa. Cmwlth. 2017), allocatur granted Oct. 18, 2017, appeal docket 47 WAP 2017
In yet another appeal involving the infamous Act 13 (relating to impact fees and drilling of unconventional natural gas wells), the Pennsylvania Public Utility Commission (PUC) petitioned for allowance of appeal from an en banc Commonwealth Court opinion reversing the PUC’s determination that Snyder Brother’s wells are not stripper wells and thus are subject to an annual impact fee.
The Act defines a stripper well as an “unconventional gas well incapable of producing more than 90,000 cubic feet [cf] of gas per day during any calendar month . . . .” Section 2301 of Act 13, 58 Pa.C.S. §2301.
The PUC held that the definition is ambiguous because it is unclear whether “any calendar month” means one month or all months of the year. If any means one month, then far fewer wells will be subject to an impact fee. If any means all months of the year, more wells will be subject to an impact fee.
The PUC ultimately held that any means all months, and thus Snyder Brothers’ wells were subject to an impact fee.
Writing for the Commonwealth Court en banc panel, Judge McCullough found “any month” is unambiguous and the plain meaning of the term is one month. “Because a calendar year is a definite class consisting of twelve individual months, the most natural way to construe “any” is to interpret it to mean at least “one” month out of the year, no matter what or which month (“during any calendar month”).” Citing The Gregg Reference Manual, she bolstered this reading with the principle that since any is part of a prepositional phrase modifying a singular noun, it “signifies that only one or a singular month is contemplated in the grammatical scheme.” She further used Commonwealth v. Davidson, 938 A.2d 198 (Pa. 2007), where the court found “any book, magazine, pamphlet, . . .” to be singular because each of the enumerated objects was singular, to reinforce this rational.
Addressing the PUC’s counterarguments, the court found another section of the Act, 58 Pa.C.S. §2302(d), which describes the restimulation of wells, to be uninformative because it did not deal with impact fees, but also found its definition to be consistent with that section.
Since the court determined the definition is unambiguous, it did not need to consider statutory construction principles, but decided to perform the analysis anyway. Assuming arguendo the definition is ambiguous, the Court still found that any means a single month.
The court rejected the PUC’s arguments that:
- if any does not mean every then well producers could manipulate their infrastructure to depress production and escape paying impact fees because (a) there was no allegation Snyder Brothers had done so and (b) the definition uses the word “incapable,” so any artificial manipulation reducing production would not alter the status of the capability of production;
- any as singular frustrates legislative intent to collect impact fees to mitigate drilling effects on municipalities as less impact fees will be collected under this definition because (a) both types of wells could have the same detrimental effects, but the General Assembly still chose to exempt stripper wells from impact fees and (b) collection of additional impact fees for municipalities is not truly the legislative intent where the impact fees are distributed to numerous other sources and municipalities could choose to implement their own impact fees;
- legislative history showing the General Assembly originally used “a” instead of “any” indicates an intentional change from singular to plural because the change is insignificant where there is no record of the General Assembly or committees explaining the reason for the change; and
- the PUC’s interpretation should be given greater administrative deference where it had previously interpreted any as plural because the Court found the PUC did not previously find the term ambiguous and turned to statutory construction for the first time when its prosecution bureau litigated the complaint against Snyder Brothers, reasoning that: “Where an agency’s interpretation is presented in the course of litigation and has not been articulated previously in an official rule or regulation, the interpretation may still be given deference but only to the extent that it is persuasive.”
Judge Wojcik dissented, finding the definition ambiguous and agreeing with the PUC’s statutory interpretation arguments above that the court rejected. Judge Cosgrove joined the dissent.
The Supreme Court granted allocatur to determine:
(1) On a question of first impression involving substantial public interest, did the Commonwealth Court err in finding that the definition of “stripper well” in the Unconventional Gas Well Impact Fee Act of 2012 (Act 13), was clear and unambiguous?
(2) Is the Commonwealth Court’s Opinion based on factual and legal errors and is it a significant departure from accepted judicial practices?
a. Did the Commonwealth Court err in its statutory construction analysis, misreading the definition of “stripper well” in Act 13, ignoring relevant legislative history, and ultimately reaching a conclusion that is an absurd result?
b. Where the Commission is charged with the administration and enforcement of the impact fee provisions of Act 13, did the Commonwealth Court err in failing to give deference to the Commission’s interpretation of Act 13?