In this appeal from Allegheny County, the Commonwealth Court reaffirmed the principal that under Pennsylvania law, municipalities may not require a party to obtain permits from outside agencies before providing zoning approval. The Court held that in such a scenario, the appropriate procedure is to condition the zoning approval upon the applicant receiving such permits, as opposed to denying the application outright.

Since 1989, Penneco Oil Company has operated a gas production well on a property owned by Sedat, Inc. in the Borough of Plum (the “Borough”). Penneco Oil Company has a permit from the Pennsylvania Department of Environmental Protection (“DEP”) to operate the gas production well. Penneco Environmental Solutions, LLC (“Penneco”) sought to convert the well from a producing well to an underground injection well, which requires a permit from the U.S. Environmental Protection Agency (“EPA”). Penneco applied for such a permit with the EPA, and subsequently filed a substantive validity challenge to Borough Ordinance 71-004 (the “Ordinance”) with the Borough’s Zoning Hearing Board (the “ZHB”). Penneco claimed that the Ordinance excluded the operation of an underground injection well in all zoning districts in the Borough, and that the Ordinance was preempted by state and federal law.

A hearing ensued before the ZHB, where Penneco represented that it would file an application with the DEP for a permit to operate the injection well if the EPA gave its approval, as EPA approval must precede DEP approval. Penneco further conceded that it would not be permitted to operate an injection well on the property if the EPA and DEP did not grant the required permits and approvals. The ZHB determined that the dispute was not ripe for decision because Penneco had not yet received the required approvals from the EPA or DEP, and therefore no actual controversy existed. As a result, the ZHB denied Penneco’s substantive validity challenge, and Penneco appealed to the trial court.

The trial court reversed without taking additional evidence, holding that under Pennsylvania law, municipalities may not require a party to obtain permits from outside agencies before providing zoning approval. Therefore, the trial court found that the ZHB erred in concluding that Penneco’s substantive validity challenge was not ripe for review. The trial court further found that the zoning ordinance was de jure exclusionary and invalid, and that Penneco was entitled to site-specific relief as to its proposed underground injection well. The Borough then appealed to the Commonwealth Court, raising only one issue: that the ZHB properly denied Penneco’s substantive validity challenge for lack of ripeness.

In affirming the trial court’s decision, the Commonwealth Court determined that Penneco’s substantive validity challenge was, in fact, ripe for review because the issues involved were adequately developed for judicial review, and Penneco would suffer hardship if consideration were delayed. The Court additionally concluded that neither the Municipalities Planning Code (“MPC”) nor the Ordinance required submission of an EPA or DEP permit with an applicant’s substantive validity challenge as a prerequisite to review by the ZHB. The Court cited to a slew of cases holding that where permits from an agency outside of a municipality are required for a land development proposal, the appropriate procedure is to approve the proposal with a condition that the applicant obtain the permits, as opposed to denying the application outright. 

Click here to read: In Re: Appeal of Penneco Envtl. Sols., LLC from the decision of the Zoning Hearing Bd. of the Borough of Plum, No. 931 C.D. 2018 (Pa. Commw. Ct., March 8, 2019).

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