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Seneca Resources Corp. v. Township of Highland

United States Court of Appeals, Third Circuit

July 17, 2017

SENECA RESOURCES CORPORATION
v.
TOWNSHIP OF HIGHLAND, Elk County, Pennsylvania; HIGHLAND TOWNSHIP BOARD OF SUPERVISORS, Elk County, Pennsylvania *CRYSTAL SPRING ECOSYSTEM; HIGHLAND TOWNSHIP MUNICIPAL AUTHORITY; CITIZENS ADVOCATING A CLEAN HEALTHY ENVIRONMENT, INC., Appellants *(Pursuant to Rule 12(a) Fed. R. App. P.)

          Argued March 23, 2017

         On Appeal from the United States District Court for the Western District of Pennsylvania District Court No. 1-15-cv-00060 Magistrate Judge: Honorable Susan Paradise Baxter

          Lindsey Schromen-Wawrin [Argued] Shearwater Law Counsel for Appellants.

          Brian J. Clark Brian C. Wauhop Buchanan Ingersoll & Rooney Stanley Yorsz [Argued] Buchanan Ingersoll & Rooney Counsel for Appellee Seneca Resources Corp.

          Arthur D. Martinucci [Argued] Quinn Buseck Leemhuis Toohey & Kroto Counsel for Appellees Township of Highland and Highland Township Board of Supervisors, Elk County, Pennsylvania.

          Before: SMITH, Chief Judge, JORDAN and ROTH, Circuit Judges

          OPINION

          SMITH, Chief Judge.

         Appellants, Crystal Spring Ecosystem, Highland Township Municipal Authority, and Citizens Advocating a Clean Healthy Environment, Inc.-all represented by the Community Environmental Legal Defense Fund ("CELDF")-sought to intervene on the side of Defendant-Appellee Township of Highland (the "Township") in defense of the legality of the Highland municipal ordinance known as the "Community Bill of Rights." The Community Bill of Rights, among other things, prohibited Plaintiff-Appellee Seneca Resources Corporation from using a well to store waste from fracking.[1] The District Court[2] denied Appellants' motion to intervene, holding that the Township adequately represented Appellants' interests in defending the Community Bill of Rights. Appellants moved for reconsideration. While the motion for reconsideration was pending, the Township repealed the Community Bill of Rights and entered into a settlement with Seneca that culminated in a consent decree adopted by the District Court. Appellants filed a motion for reconsideration of the Consent Decree, which the District Court denied along with Appellants' motion for reconsideration of their motion to intervene.

         Appellants now appeal four orders: (1) the denial of their motion to intervene, (2) the denial of the motion for reconsideration of their motion to intervene, (3) the District Court's adoption of the Consent Decree, and (4) the denial of the Appellants' motion for reconsideration of the Consent Decree. Appellants' original motion to intervene is now moot because there is no longer an ordinance to defend. In their reply brief and at oral argument, Appellants fell back on the argument that they had a right to intervene because the Consent Decree purportedly "establish[es] . . . the legality or illegality of [Appellants'] protected rights." Appellants' Reply Br. 8. But the Consent Decree does not bind any of the Appellants nor does it deprive them of any rights after the Community Bill of Rights has been repealed. Because Appellants cannot intervene, they are nonparties. Because they are nonparties, they cannot appeal the Consent Decree. Therefore, we will affirm the District Court's order denying Appellants' motion for reconsideration of the order denying intervention. We lack jurisdiction to review the remaining three orders because of mootness and standing issues.

         BACKGROUND

         I. ACTORS

         Plaintiff-Appellee Seneca Resources Corporation is a Pennsylvania corporation engaged in oil and natural gas exploration and production. Seneca sought to convert a natural gas well in Highland Township into a Class II underground injection control well in which to store waste from fracking.

         Defendants-Appellees are Township of Highland and the Highland Board of Supervisors. Highland is a township located in Elk County, Pennsylvania. The Board of Supervisors is its three-person governing body. See 53 P.S. § 65601 ("Townships shall be governed and supervised by boards of supervisors. Boards of supervisors shall consist of three members or, if approved by the electors under section 402(b), five members." (footnote omitted)).

         CELDF advocates that communities pass laws that assert community rights against corporations and others engaged in activity disfavored by members of the community.[3] CELDF appears to have drafted the ordinance at issue here. CELDF represented the Township earlier in this litigation, and a different CELDF lawyer has represented Appellants.

         Appellants are Crystal Spring Ecosystem, Highland Township Municipal Authority, and Citizens Advocating a Clean Healthy Environment, Inc.

         Crystal Spring Ecosystem "encompasses [a natural] spring, as well as the surrounding hillside and riparian forests, soils, and bedrocks, [and] the residents of James City who drink from Crystal Spring." Appellants' Br. 21; accord App.197-98 (Mot. Intervene) ¶ 14.[4]

         Highland Township Municipal Authority is a municipal government agency that provides water from Crystal Spring for unincorporated James City, a city within Highland Township.

         Citizens Advocating a Clean Healthy Environment, Inc. ("CACHE") is a nonprofit corporation that "is, and has been, the primary advocate" for the Community Bill of Rights. App.197 (Mot. Intervene) ¶¶ 9-13. Its three directors are residents of Highland Township who "own property in James City connected to the Municipal Authority water supply." App.197 (Mot. Intervene) ¶ 11.

         II. FACTUAL AND PROCEDURAL HISTORY

         On January 9, 2013, the Township enacted a far-reaching ordinance that, among other things, prohibited "disposal injection wells" from existing within Highland. App.046-50 (2013 Ordinance).

         On June 17, 2014, the EPA issued a final, ten-year permit to Seneca to allow it to operate a Class II-D injection well. Part 1.A of the permit says, "Issuance of this permit does not . . . authorize . . . any infringement of State or local law or regulations." App.082 (Permit).

         Sometime between November 3, 2014, and January 8, 2015, the Highland Township Board of Supervisors wrote to the EPA, stating that the EPA permit was invalid under the Township's ordinance. See App.095-96 (Letter).

         Seneca sued the Township and the Board of Supervisors on February 18, 2015, alleging that the ordinance was invalid. Seneca sought damages, attorneys' fees, and an injunction prohibiting the Township from enforcing the ordinance. The Township and the Board of Supervisors were represented by CELDF lawyers.

         On March 24, 2015, the Township adopted the Community Bill of Rights as an amendment to the January 9, 2013 ordinance. The Community Bill of Rights established a right to water and clean air for persons, natural communities and ecosystems[5] and stated that any resident could enforce an ecosystem's rights "to exist and flourish." App.119 (Community Bill of Rights). Section 3 of the Community Bill of Rights made it illegal for any corporation or government to deposit waste from "oil and gas extraction" "within Highland Township" and further claimed to invalidate any "permit, license, privilege, charter, or other authority" that violated the Community Bill of Rights. App.120 (Community Bill of Rights). Section 4(b) of the Community Bill of Rights stated that any resident could enforce the rights of the Township. App.120 (Community Bill of Rights). Section 4(c) of the Community Bill of Rights stated that any resident of Highland Township could "enforce or defend the rights of ecosystems." App.120 (Community Bill of Rights). Section 5(a) of the Community Bill of Rights stated that "[c]orporations that violate this Ordinance, or that seek to violate this Ordinance, shall not be deemed to be 'persons'" and that those corporations did not have the "power to assert state or federal preemptive laws in an attempt to overturn" the Community Bill of Rights. App.120 (Community Bill of Rights). The Community Bill of Rights called for "amendment of the Pennsylvania Constitution and the federal Constitution to recognize a right to local self-government free from governmental preemption and or nullification by corporate 'rights.'" App.121 (Community Bill of Rights).

         On April 6, 2015, Seneca filed an amended complaint. The Amended Complaint took note of the Community Bill of Rights and further alleged that the Township told the Pennsylvania Department of Environmental Protection that the original ordinance would preclude the DEP from issuing a state permit. Seneca claimed that the Township's communication with the DEP was causing the DEP to delay issuance of the state permit. The Amended Complaint alleged the same claims and requested the same relief as the original complaint. See App.106-15 (Am. Compl.).

         On August 11, 2015, Appellants, represented by a different CELDF lawyer than the lawyer who represented the Township and the Board of Supervisors, filed their motion to intervene pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure in order to defend the legality of the ordinance. See Oral Arg. At 7:04 ("[Appellants] tried to come into this case on the side of the Government with the interests of defending the ordinance . . . .").

         On December 31, 2015, one of the three members of the Board of Supervisors died.

         On March 29, 2016, the District Court denied the Appellants' motion to intervene because Appellants failed to show that the Township and the Board of Supervisors did not adequately represent Appellants' interests. See Seneca Res. Corp. v. Highland Township, No. 15-60 Erie, 2016 WL 1213605, at *2-3 (W.D. Pa. Mar. 29, 2016).

         On April 26, 2016, Appellants moved for reconsideration of the March 29, 2016 order denying their motion to intervene. Appellants alleged there had been "a material change in the relevant facts" because "the composition of the Highland Township Board of Supervisors changed." App.317 (Mot. Reconsideration Denial Mot. Intervene). According to Appellants, the new replacement supervisor expressed the view that the Community Bill of Rights was likely invalid and therefore the Board majority was opposed to continuing to defend the Community Bill of Rights. Under these new circumstances, Appellants argued, the Township would no longer adequately represent Appellants' interests. App.318-19 (Mot. Reconsideration Denial Mot. Intervene). On May 13, 2016, a CELDF lawyer filed a response to the motion for reconsideration on behalf of the Township and the Board of Supervisors. In the response, the Township and the Board said that they supported the motion for reconsideration because "it is unlikely that the Township's aggressive defense of the Ordinance will continue." App.345 (Response).

         On May 30, 2016, CELDF moved to withdraw as counsel of record for the Township and its Board of Supervisors. CELDF claimed that Defendants "have ceased to communicate with their counsel, despite multiple attempts by counsel to contact the clients, " which apparently included the period during which Defendants filed their "response" supporting Appellants' motion for reconsideration. App.348-50 (Mot. Withdrawal). On June 2, 2016, CELDF informed the court that Defendants said they were hiring new counsel.

         The Board of Supervisors repealed the Community Bill of Rights on the night of August 10, 2016.

         The following day, Seneca and Defendants filed a stipulation and consent decree under which the Township stipulated that much of the Community Bill of Rights was "an impermissible exercise of Highland's legislative authority, " "unconstitutional, " or "unenforceable." App.388-89 (Stipulation and Consent Decree) ¶ 13(a)- (g).[6] Additionally, under the Consent Decree, the Township and the Board of Supervisors withdrew their objection to Seneca's DEP permit applications and withdrew their counterclaims, and Seneca withdrew its counterclaims against the Township and the Board of Supervisors. App.389-90 (Stipulation and Consent Decree) ¶ 13(i)-(l). The parties also requested that the Court "adopt . . . as its findings and opinion regarding the merits of ...


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