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`IN THE UNITED STATES COURT
`FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
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`Civil Action No.
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`(Electronically Filed)
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`WAYNE LAND AND
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`MINERAL GROUP, LLC,
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`Plaintiff,
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`v.
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`DELAWARE RIVER BASIN
`COMMISSION,
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`Defendant.
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`COMPLAINT
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`Wayne Land and Mineral Group, LLC (“WLMG”) asks this Court to
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`declare that the Delaware River Basin Commission (“Commission”) lacks
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`authority under the Delaware River Basin Compact (“Compact”) to
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`review and approve a natural gas well pad, a gas well and related
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`facilities and associated activities on WLMG’s property in the Delaware
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`River Basin (“Basin”) and, in support, states:
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 2 of 18
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`INTRODUCTION
`The Commission, purporting to interpret and rely on Section
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`1.
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`3.8 of the Compact, claims discretionary authority to review, approve,
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`and thereby regulate nearly all forms of human activity in the Basin,
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`including the use of private land for residential, commercial and
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`industrial purposes.
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`2.
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`The Commission’s position, distilled to its essence, is that any
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`activity, development or other human undertaking in the Basin that uses
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`water in some manner is a “project” that the Commission has the
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`prerogative to review and approve if the Commission believes that the
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`undertaking may have a “substantial effect” on the water resources of the
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`Basin.
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`3.
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`Because it is difficult, if not impossible, to identify an
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`undertaking in the Basin that does not involve water in some manner,
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`the Commission’s discretionary “project” review authority purportedly
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`extends to nearly every form of human endeavor in the Basin, subject
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`only to the Commission believing, in a given case, that a proposed
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`“project” may have a “substantial effect” on the water resources of the
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`Basin.
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`2
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 3 of 18
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`4.
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`The Commission, relying on the enormous power that it
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`contends has been delegated to it by Section 3.8 of the Compact, and
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`seeking to placate those State governments and special interest groups
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`opposed to natural gas development, has declared that all natural gas
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`well pads and related facilities targeting shale formations in the Basin
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`are “projects” that it will review under Section 3.8 of the Compact.
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`5.
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`In addition to asserting that well pads and related facilities
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`are “projects” that it must approve before they are constructed, the
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`Commission has announced that it will not review applications for well
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`pads and related facilities, and associated activities, until it adopts
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`governing regulations. This moratorium, which amounts to a ban on the
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`lawful use of land that cannot be remedied at the ballot box, has been in
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`effect since 2010.
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`6. WLMG, by this Complaint, seeks relief from the Commission’s
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`ultra vires assertion of jurisdiction and related dictate that WLMG is
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`prohibited from constructing a well pad and drilling a natural gas well
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`without Commission approval.
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`7. WLMG, as partial relief
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`for
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`the
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`trampling of
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`its
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`constitutionally protected rights, and seeking to make otherwise lawful
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`3
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 4 of 18
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`use of its property, requests that the Court declare that the Commission
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`does not have authority to require WLMG to apply for and obtain
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`Commission “project” approval for a natural gas well pad and related
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`facilities targeting natural gas in shale formations on WLMG’s property.
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`JURISDICTION AND VENUE
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`8.
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`This action arises under the Compact. The Commission is
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`asserting jurisdiction, pursuant to Section 3.8 of the Compact, over the
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`construction of a well pad, appurtenant facilities, and unspecified
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`“related” activities, associated with the drilling, completing and
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`operating of a gas well targeting shale formations on private property
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`owned by WLMG.
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`9.
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`The Commission’s assertion of jurisdiction is based on its
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`current interpretation of Section 3.8 of the Compact, which provides for
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`Commission approval of “projects,” and its related assertion that natural
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`gas well pads and related infrastructure associated with exploration and
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`production wells targeting shale formations, together with related
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`activities conducted on the well pads, constitute “projects” as that term
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`is defined in the Compact.
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`4
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 5 of 18
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`10. The Court has subject matter jurisdiction over this action
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`under 28 U.S.C. § 1331 because it raises a federal question, and under
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`the statute effectuating the Compact, Pub. L. 87-328, 75 Stat. 688, §
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`15.1(p) (1961), because this action arises under the Compact. WLMG
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`seeks declaratory and other appropriate relief under 28 U.S.C. §§ 2201
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`and 2202.
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`11. Venue is proper within this district pursuant to 28 U.S.C. §
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`1391(b).
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`PARTIES AND THE PROPERTY
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`12.
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` WLMG resides, and owns approximately 180 acres of land,
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`including the natural gas and minerals present on the land, in Wayne
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`County, Pennsylvania. Approximately 75 acres of the land owned by
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`WLMG is located in the Basin (the “Property”).
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`13. The Property is located in a part of the Basin that overlays
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`natural gas reserves in shale formations.
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`14. The Commission is an agency created by, and with only such
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`authority as is expressly conferred on it by, the Compact. The Compact
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`is an agreement among the United States, New York, Pennsylvania, New
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`Jersey, and Delaware, as approved by Congress in 1961.
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`5
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 6 of 18
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`BACKGROUND
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`A.
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`“Project” Review.
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`15. Section 3.8 of the Compact states: “No project having a
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`substantial effect on the water resources of the basin shall hereafter be
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`undertaken by any person, corporation or governmental authority unless
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`it shall have been first submitted to and approved by the commission . . .
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`.”
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`16. For purposes of Section 3.8 of the Compact, a “project” is: “any
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`work, service or activity which is separately planned, financed, or
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`identified by the commission, or any separate facility undertaken or to be
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`undertaken within a specified area, for the conservation, utilization,
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`control, development or management of water resources which can be
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`established and utilized independently or as an addition to an existing
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`facility, and can be considered as a separate entity for purposes of
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`evaluation.”
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`6
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 7 of 18
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`B. The Commission’s Assertion of Jurisdiction Over
`Natural Gas Well Pads and Related Facilities and
`Activities.
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`17. The Commission, purporting to rely on authority to review
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`and approve proposed “projects” pursuant to Section 3.8 of the Compact,
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`has determined, and, by publicly announcing its position, has informed
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`WLMG and other landowners in the Basin, that it has jurisdiction over
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`natural gas well pads, all appurtenant facilities, and related activities
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`carried out in connection with gas wells targeting shale formations in the
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`Basin (collectively “Well Pads”).
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`18. The Commission, as the basis for its assertion of jurisdiction,
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`has determined, and publicly announced, that Well Pads constitute
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`“projects” that cannot be constructed or undertaken in Wayne County,
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`Pennsylvania and other areas of the Basin with first applying for and
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`obtaining Commission approval.
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`19. The Commission has also announced that it will not consider
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`applications for approvals for Well Pads, which are referred to by the
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`Commission as “well pad dockets,” until after it adopts regulations
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`purporting to govern Well Pads.
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`7
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 8 of 18
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`20. The Commission’s de facto moratorium on the otherwise
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`lawful use of private property for natural gas development has been in
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`force since 2010 and the Commission has yet to adopt regulations
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`governing Well Pads.
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`C. WLMG’s Planned Development of the Property.
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`21. WLMG acquired the Property with an intent to explore for,
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`extract and sell the natural gas located in shale formations associated
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`with the Property and other nearby land in order to recoup, and earn a
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`reasonable return on, its investment in the Property.
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`22. WLMG will proceed
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`in phases, beginning with the
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`construction of an access road and well pad on the Property.
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`23. WLMG has identified a location for the access road and well
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`pad on the Property, taking into account siting requirements.
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`24. After the access road and well pad are constructed, WLMG
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`will drill an exploratory well to locate productive zones of natural gas
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`located in shale formations on the Property. The next phase of
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`development will include the drilling of one or more lateral wells followed
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`by hydraulic fracturing and, ultimately, the production of natural gas.
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`8
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 9 of 18
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`25. Pennsylvania has adopted comprehensive environmental
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`regulations governing all phases of the development of natural gas
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`resources within Pennsylvania. Pursuant thereto, persons and entities
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`seeking to construct well pads and appurtenant facilities, and proposing
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`to carry out related activities such as drilling, fracturing, completing and
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`operating natural gas wells in Pennsylvania, must obtain permits and
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`approvals from the Pennsylvania Department of Environmental
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`Protection (“PaDEP”).
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`26. The well pad and appurtenant facilities to be constructed on
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`the Property, as well as related activities to be carried out on the
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`Property, will be designed, constructed and carried out in accordance
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`with all applicable statutory and regulatory requirements including
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`those implemented by PaDEP.
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`27. The well pad and the appurtenant facilities to be constructed
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`on the Property, as well as all related activities to be carried out on the
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`Property, will be designed, built, operated and carried out for the
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`exploration, extraction and development of natural gas and not for the
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`conservation, utilization, control, development or management of water
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`resources.
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`9
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 10 of 18
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`28. WLMG does not propose to develop, construct or operate a
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`water withdrawal, dam, impoundment or reservoir, or to construct or
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`operate a wastewater treatment or discharge facility in connection with
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`the development on the Property.
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`29. All water used in connection with the planned Well Pad on
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`the Property will be obtained from properly licensed and approved
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`sources owned and operated by persons or entities other than WLMG,
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`will be managed and delivered to the Well Pad in accordance with all
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`applicable laws and regulations and any applicable fees will be paid.
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`30. All wastewater generated in connection with the Well Pad on
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`the Property will be managed by properly licensed and/or permitted
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`entities other than WLMG in accordance with all applicable laws and
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`regulations.
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`31. When the obstacle created by the Commission’s assertion of
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`project approval jurisdiction is removed, WLMG will make the
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`substantial investment associated with obtaining, and take steps
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`necessary to secure, all required permits and approvals from PaDEP and,
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`upon receipt of same, will carry out its plans for the Property.
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`10
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 11 of 18
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`32.
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`It would be futile and wasteful for WLMG to apply for permits
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`and approvals from PaDEP before resolving the insurmountable obstacle
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`created by the Commission’s assertion of jurisdiction and imposition of a
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`moratorium. Permits and approvals issued by PaDEP are valid for
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`defined and limited periods of time and, moreover, PaDEP will not issue
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`final permits and approvals for a Well Pad over which the Commission
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`has asserted jurisdiction and project review authority until after the
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`Commission reviews and approves the Well Pad.
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`33. Given the Commission’s decision not to consider well pad
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`dockets until some indefinite point in the future, it would be futile for
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`WLMG to apply for Commission approval for the Well Pad to be
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`developed on the Property.
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`34. WLMG, moreover, should not be required to engage in an
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`expensive, time consuming and ultimately futile exercise of attempting
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`to obtain review and approval by the Commission for its Well Pad where,
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`as set forth above, no such review and approval is required under the
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`Compact.
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`11
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 12 of 18
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`D. Harm To WLMG.
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`35. The Commission’s final determination that Well Pads
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`constitute “projects” subject to Commission review and approval under
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`Section 3.8 of the Compact has an immediate and practical impact on
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`WLMG. The Commission’s unlawful assertion of jurisdiction is an
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`absolute barrier to WLMG’s ability to move forward with its plan to
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`develop a Well Pad on the Property.
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`36. Other
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`than
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`the Commission’s unlawful assertion of
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`jurisdiction over a Well Pad on the Property, an injury to WLMG which
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`has been aggravated by imposition of the de facto moratorium, there are
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`no known impediments to WLMG securing all permits and approvals
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`necessary for the construction and operation of its Well Pad. Thus, the
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`sole, insurmountable obstacle to the development of the Property as
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`described herein is the Commission’s unlawful assertion of jurisdiction.
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`37. As a result of the Commission’s unlawful assertion of
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`jurisdiction, WLMG is unable to develop a Well Pad on the Property and
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`to thereby recoup its upfront costs and earn a reasonable return on its
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`investment. Among other things, WLMG is unable to drill an exploratory
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`well in order to precisely identify productive gas zones on the Property
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`12
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 13 of 18
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`and, thereby, to immediately increase the value of the Property and
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`WLMG’s nearby land.
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`38. The Commission is authorized to seek civil penalties from a
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`person who undertakes a “project” without Commission approval
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`pursuant to Section 3.8 of the Compact. Specifically, Section 14.17 of the
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`Compact provides that a person, association or corporation who violates
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`or attempts or conspires to violate a provision of the Compact or a rule,
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`regulation or order of the Commission may be liable for a penalty of as
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`much as $1,000 for each offense and $1,000 per day for a continuing
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`violation, attempt or conspiracy to be fixed by a court of competent
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`jurisdiction.
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`39. The Commission’s
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`final determination regarding
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`its
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`jurisdiction and authority under the Compact puts the public on notice
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`that persons that construct well pads and appurtenant facilities, or that
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`engage in related activities, in connection with wells targeting shales
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`located in Wayne County and other areas of the Basin without prior
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`authorization from the Commission that they are at risk of incurring
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`substantial civil penalties and other potential enforcement actions.
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`13
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 14 of 18
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`40. WLMG must choose between proceeding in the face of
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`incurring substantial civil penalties and other sanctions or waiting for
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`the Commission to lift the moratorium at some indefinite point in the
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`future and then incurring the substantial expense of seeking Commission
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`approval for an undertaking over which the Commission does not have
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`jurisdiction.
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`41.
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`In light of the fact that the Commission is not considering
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`applications for project approval of Well Pads, WLMG must choose
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`between the substantial risks associated with proceeding without
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`Commission approval or indefinitely deferring otherwise lawful use of
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`the Property.
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`42. The Commission’s assertion of jurisdiction over otherwise
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`lawful use of land in connection with natural gas extraction by WLMG,
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`as well the Commission’s assertion of jurisdiction over “related”
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`activities, materially and adversely affects WLMG by interfering with
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`WLMG’s right to use the Property in conducting a lawful business
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`activity. The material and adverse effect on WLMG’s rights to use the
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`Property and to conduct a lawful business activity is caused by the
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`14
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 15 of 18
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`Commission’s unlawful assertion of jurisdiction, not simply by the
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`existence of the Compact.
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`43. A decision in favor of WLMG in this case will remove the sole
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`insurmountable barrier to WLMG’s plan to develop the Property in the
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`manner described in this complain and also will result in an increase in
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`the market value of the Property and nearby land owned by WLMG.
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`44. Absent the relief requested herein, WLMG will be deprived of
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`its constitutionally protected right to use its Property in a lawful and
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`productive manner. In addition, WLMG will incur economic injury in
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`that it will be prevented from confirming the full scope of, and then
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`extracting and selling natural gas associated with, the Property and also
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`from benefiting from an increase in the market value of the Property
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`which will follow the drilling of an exploratory well.
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`15
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 16 of 18
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`COUNT I – DECLARATORY JUDGMENT
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`45. WLMG repeats and re-alleges paragraphs 1 through 44 of this
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`complaint as if fully set forth herein.
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`46. The Commission’s “project” approval jurisdiction does not
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`extend to all human undertakings that may have a substantial effect on
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`the water resources of the Basin.
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`47. The Commission’s project approval jurisdiction under Section
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`3.8 of the Compact is limited to “projects” that have a substantial effect
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`on the water resources of the Basin
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`48. The Well Pad as proposed by WLMG does not constitute a
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`“project” under Section 3.8 of the Compact.
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`49. Because WLMG’s proposed Well Pad does not constitute a
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`“project,” the Commission lacks authority under Section 3.8 of the
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`Compact to require WLMG to obtain Commission approval for the Well
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`Pad.
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`50. Because WLMG’s proposed Well Pad does not constitute a
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`“project,” it is irrelevant whether or not the Commission believes that the
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`proposed Well Pad may have a substantial effect on water resources in
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`the Basin.
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`16
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 17 of 18
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`51. The Commission otherwise lacks authority to require WLMG
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`to submit for its review, and to obtain its prior approval for, the proposed
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`Well Pad.
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`52. The Commission, in asserting jurisdiction over WLMG’s
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`proposed Well Pad, is misconstruing and unlawfully exceeding its
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`authority under the Compact.
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`53. The Commission, in asserting jurisdiction over, and by
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`precluding the development of WLMG’s proposed Well Pad, has and will
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`continue to deprive WLMG of constitutionally protected rights.
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`17
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`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 18 of 18
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`WHEREFORE, WLMG requests that the Court:
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`1. Declare that the Commission does not have jurisdiction over,
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`or the authority to review and approve, or to require WLMG to seek prior
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`approval from the Commission for, or to otherwise preclude the
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`development of, WLMG’s proposed well pad, appurtenant facilities or the
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`related activities to be carried out on the Property.
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`2. Grant such further relief as the Court deems appropriate.
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`Respectfully submitted,
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`s/David R. Overstreet
`David R. Overstreet
`PA 68950
`OVERSTREET & NESTOR, LLC
`461 Cochran Road, Box 237
`Pittsburgh, PA 15228
`(717) 645-1861
`david.overstreet@palawgroup.com
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` May 17, 2016
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`Jeffrey Belardi
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`PA 71826
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`BELARDI LAW OFFICES
`410 Spruce Street, 4th Floor
`Scranton, PA 18503
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`(570) 342-4555
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`jeff@belardilaw.com
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`Attorneys for Wayne Land and Mineral Group, LLC
`
`Christopher R. Nestor
`PA 82400
`OVERSTREET & NESTOR, LLC
`1425 Crooked Hill Road #62066
`Harrisburg, PA 17106-2066
`(717) 350-5939
`christopher.nestor@palawgroup.com
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`18
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