Environmental Immunity Case Decided by Pa Supreme Court: The Terms of the Agreement Rule -- April, 2011

Environmental Immunity Case Decided by Pa Supreme Court:  The Terms of the Agreement Rule

John R. Embick, Esq. – April, 2011

Several years ago, I wrote about an environmental immunity case that originated in Chester County.  In Pennsbury Village Associates, LLC v. Aaron McIntyre, et al., No. 1452 C.D. 2007 (Pa Cmwlth Ct, May 30, 2008) (“Pennsbury”), Commonwealth Court ruled on the extent of the statutory environmental immunity protections in Pennsylvania (“PELR”).

In Pennsbury, a developer sought approval to develop property in Pennsbury Township, Chester County, Pa.   The development was contested by the developer, the Township and several private citizens.  The Township granted conditional approval for the development, and appeals were filed by the developer and the private citizens.  A feature of the proposed development involved the use of county grant-funded and township-owned parkland for sewage disposal and an access road.  The county grant funding permanently limited the use of the parkland to open space by means of a restrictive covenant.

All of the parties to the conditional approval appeal then reached agreement on the nature and scope of the development, and a stipulation was signed by all the parties, in order to resolve the conditional approval appeals.

Despite having signed the stipulation, the private citizens then communicated with the county urging disapproval of the use of parkland for sewage disposal and access.  The county eventually disapproved of the use of parkland for sewage disposal and access. 

The developer then sued the private citizens claiming breach of contract, and tortious interference with contractual relationships based on the promises contained in the stipulation.

The private citizens filed a motion with the trial court for a determination of immunity under PELR.  The trial court denied the motion, holding that the communication was not a communication about the enforcement of an environmental law or regulation.

The case was eventually appealed, and in an opinion written by Judge Smith-Ribner, Commonwealth Court determined that the communication of defendants to the county was related to the open space provisions associated with the parkland, and that such communications therefore were about an environmental law or regulation.  As such, the communications were entitled to the immunity against suit afforded by PELR.  After citing  Article 1, Section 27 of the Pennsylvania Constitution (“the Environmental Amendment”), the Commonwealth Court wrote: “Thus open space benefits are environmental, and the deed restriction requirement is a regulation implementing a statutory program’. Slip op. at 10.

Commonwealth Court then analyzed the statutory exceptions to the immunity provisions of PELR.  27 Pa.C.S. 8302(b) contains the exceptions, as follows: the allegation in the communication must not be relevant or material to the enforcement or implementation of and environmental law or regulation, and (1) the allegation in the communication is knowingly false, misleading or made with malicious and reckless disregard for the truth or falsity; (2) the allegation in the communication is made for the sole purpose of interfering with existing or proposed business relationships; or (3) the communication is later determined to be a wrongful use of process or an abuse of process.

The developer argued, among other things, that the private citizens did not intend to procure favorable governmental action through the communications, and that the sole purpose of the communication was to interfere with the developer’s business relationships.

Commonwealth Court did not agree, finding that the central analytical question related not to whether the private citizen’s communication was in breach of his promises in the stipulation, but rather whether the communication related to an environmental law or regulation and sought favorable governmental action.  Since the communication related to an environmental regulation, and sought (and eventually won) favorable governmental action, the communication was entitled to immunity.

The case was then appealed to the Pa. Supreme Court.  In Pennsbury Village Associates, LLP v. Aaron McIntyre, et al., No. 4 MAP 2009  (January 19, 2011), Justice Eakin delivered an option for the Pa High Court, overturning the Commonwealth Court decision.

The trial court had ruled that McIntyre was not immune because he did not communicate about the “implementation or enforcement of environmental law and regulations” when he asked the County Commissioners to uphold the deed restrictions (allegedly contrary to at least the spirit of the settlement agreement between Pennsbury and McIntyre).

Commonwealth Court, in overturning the trial court decision, decided that the communication was indeed about the enforcement of environment law and regulations and that the communication was immune from prosecution.

In reversing the decision of Commonwealth Court, Justice Eakin noted that the law in Pennsylvania relating to the applicability of immunity is subject to a two part test: (1) do the conditions which make immunity applicable apply, and (2) is there a legal basis for not applying immunity?

Justice Eakin held that Commonwealth Court had failed to address the second prong of the analysis: “Specifically, the court failed to consider appellee’s ability to waive statutory or constitutional rights by means of the stipulated settlement, including any right to immunity under the Environmental Immunity Act.” Slip op. at 10.

For the purpose of rendering a decision, the Pa Supreme Court assumed that McIntyre had satisfied the first prong of the analysis (i.e., the establishment of a communication about the enforcement of an environmental law or regulation).

In short, the Pa High Court found that McIntyre did not enjoy immunity for attempting to defeat the stipulation’s terms, because the stipulation of settlement provided an overriding legal basis for defeating McIntyre’s immunity claim.

In conclusion, the trial court’s primary rationale (finding no communication about an environmental law or regulation) apparently was not supported.  In addition, Commonwealth Court’s decision (finding that the communication was indeed about an environmental law or regulation) was wrong.  However, the trial court’s order was reinstated (no immunity applied).

Accordingly, we don’t think that this decision will have an impact on environmental immunity jurisprudence in Pennsylvania, as the facts presented were somewhat unusual.  However, since an analysis of the terms of the settlement agreement was determinative, parties should take care to understand what a settlement requires of them.