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Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 1 of 18
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`IN THE UNITED STATES COURT
`FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
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`Civil Action No.
`
`(Electronically Filed)
`
`WAYNE LAND AND
`
`
`MINERAL GROUP, LLC,
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`
`
`
`
`
`
`
`
`v.
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`
`
`DELAWARE RIVER BASIN
`COMMISSION,
`
`
`
`
`
`
`
`
`
`
`Defendant.
`
`
`
`COMPLAINT
`
`
`
`
`Wayne Land and Mineral Group, LLC (“WLMG”) asks this Court to
`
`declare that the Delaware River Basin Commission (“Commission”) lacks
`
`authority under the Delaware River Basin Compact (“Compact”) to
`
`review and approve a natural gas well pad, a gas well and related
`
`facilities and associated activities on WLMG’s property in the Delaware
`
`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
`
`1.
`
`3.8 of the Compact, claims discretionary authority to review, approve,
`
`and thereby regulate nearly all forms of human activity in the Basin,
`
`including the use of private land for residential, commercial and
`
`industrial purposes.
`
`2.
`
`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
`
`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
`
`Basin.
`
`3.
`
`Because it is difficult, if not impossible, to identify an
`
`undertaking in the Basin that does not involve water in some manner,
`
`the Commission’s discretionary “project” review authority purportedly
`
`extends to nearly every form of human endeavor in the Basin, subject
`
`only to the Commission believing, in a given case, that a proposed
`
`“project” may have a “substantial effect” on the water resources of the
`
`Basin.
`
`
`
`2
`
`

`

`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 3 of 18
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`4.
`
`The Commission, relying on the enormous power that it
`
`contends has been delegated to it by Section 3.8 of the Compact, and
`
`seeking to placate those State governments and special interest groups
`
`opposed to natural gas development, has declared that all natural gas
`
`well pads and related facilities targeting shale formations in the Basin
`
`are “projects” that it will review under Section 3.8 of the Compact.
`
`5.
`
`In addition to asserting that well pads and related facilities
`
`are “projects” that it must approve before they are constructed, the
`
`Commission has announced that it will not review applications for well
`
`pads and related facilities, and associated activities, until it adopts
`
`governing regulations. This moratorium, which amounts to a ban on the
`
`lawful use of land that cannot be remedied at the ballot box, has been in
`
`effect since 2010.
`
`6. WLMG, by this Complaint, seeks relief from the Commission’s
`
`ultra vires assertion of jurisdiction and related dictate that WLMG is
`
`prohibited from constructing a well pad and drilling a natural gas well
`
`without Commission approval.
`
`7. WLMG, as partial relief
`
`for
`
`the
`
`trampling of
`
`its
`
`constitutionally protected rights, and seeking to make otherwise lawful
`
`
`
`3
`
`

`

`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
`
`does not have authority to require WLMG to apply for and obtain
`
`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.
`
`JURISDICTION AND VENUE
`
`8.
`
`This action arises under the Compact. The Commission is
`
`asserting jurisdiction, pursuant to Section 3.8 of the Compact, over the
`
`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
`
`owned by WLMG.
`
`9.
`
`The Commission’s assertion of jurisdiction is based on its
`
`current interpretation of Section 3.8 of the Compact, which provides for
`
`Commission approval of “projects,” and its related assertion that natural
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`gas well pads and related infrastructure associated with exploration and
`
`production wells targeting shale formations, together with related
`
`activities conducted on the well pads, constitute “projects” as that term
`
`is defined in the Compact.
`
`
`
`4
`
`

`

`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
`
`under 28 U.S.C. § 1331 because it raises a federal question, and under
`
`the statute effectuating the Compact, Pub. L. 87-328, 75 Stat. 688, §
`
`15.1(p) (1961), because this action arises under the Compact. WLMG
`
`seeks declaratory and other appropriate relief under 28 U.S.C. §§ 2201
`
`and 2202.
`
`11. Venue is proper within this district pursuant to 28 U.S.C. §
`
`1391(b).
`
`PARTIES AND THE PROPERTY
`
`12.
`
` WLMG resides, and owns approximately 180 acres of land,
`
`including the natural gas and minerals present on the land, in Wayne
`
`County, Pennsylvania. Approximately 75 acres of the land owned by
`
`WLMG is located in the Basin (the “Property”).
`
`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
`
`is an agreement among the United States, New York, Pennsylvania, New
`
`Jersey, and Delaware, as approved by Congress in 1961.
`
`
`
`5
`
`

`

`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 6 of 18
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`BACKGROUND
`
`A.
`
`“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
`
`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 . . .
`
`.”
`
`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
`
`

`

`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.
`
`
`17. The Commission, purporting to rely on authority to review
`
`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
`
`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.
`
`21. WLMG acquired the Property with an intent to explore for,
`
`extract and sell the natural gas located in shale formations associated
`
`with the Property and other nearby land in order to recoup, and earn a
`
`reasonable return on, its investment in the Property.
`
`22. WLMG will proceed
`
`in phases, beginning with the
`
`construction of an access road and well pad on the Property.
`
`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
`
`will drill an exploratory well to locate productive zones of natural gas
`
`located in shale formations on the Property. The next phase of
`
`development will include the drilling of one or more lateral wells followed
`
`by hydraulic fracturing and, ultimately, the production of natural gas.
`
`
`
`8
`
`

`

`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
`
`regulations governing all phases of the development of natural gas
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`resources within Pennsylvania. Pursuant thereto, persons and entities
`
`seeking to construct well pads and appurtenant facilities, and proposing
`
`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
`
`Protection (“PaDEP”).
`
`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
`
`Property, will be designed, constructed and carried out in accordance
`
`with all applicable statutory and regulatory requirements including
`
`those implemented by PaDEP.
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`27. The well pad and the appurtenant facilities to be constructed
`
`on the Property, as well as all related activities to be carried out on the
`
`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.
`
`
`
`9
`
`

`

`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
`
`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
`
`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
`
`and approvals from PaDEP before resolving the insurmountable obstacle
`
`created by the Commission’s assertion of jurisdiction and imposition of a
`
`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
`
`dockets until some indefinite point in the future, it would be futile for
`
`WLMG to apply for Commission approval for the Well Pad to be
`
`developed on the Property.
`
`34. WLMG, moreover, should not be required to engage in an
`
`expensive, time consuming and ultimately futile exercise of attempting
`
`to obtain review and approval by the Commission for its Well Pad where,
`
`as set forth above, no such review and approval is required under the
`
`Compact.
`
`
`
`
`
`
`
`11
`
`

`

`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 12 of 18
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`D. Harm To WLMG.
`
`35. The Commission’s final determination that Well Pads
`
`constitute “projects” subject to Commission review and approval under
`
`Section 3.8 of the Compact has an immediate and practical impact on
`
`WLMG. The Commission’s unlawful assertion of jurisdiction is an
`
`absolute barrier to WLMG’s ability to move forward with its plan to
`
`develop a Well Pad on the Property.
`
`36. Other
`
`than
`
`the Commission’s unlawful assertion of
`
`jurisdiction over a Well Pad on the Property, an injury to WLMG which
`
`has been aggravated by imposition of the de facto moratorium, there are
`
`no known impediments to WLMG securing all permits and approvals
`
`necessary for the construction and operation of its Well Pad. Thus, the
`
`sole, insurmountable obstacle to the development of the Property as
`
`described herein is the Commission’s unlawful assertion of jurisdiction.
`
`37. As a result of the Commission’s unlawful assertion of
`
`jurisdiction, WLMG is unable to develop a Well Pad on the Property and
`
`to thereby recoup its upfront costs and earn a reasonable return on its
`
`investment. Among other things, WLMG is unable to drill an exploratory
`
`well in order to precisely identify productive gas zones on the Property
`
`
`
`12
`
`

`

`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
`
`WLMG’s nearby land.
`
`38. The Commission is authorized to seek civil penalties from a
`
`person who undertakes a “project” without Commission approval
`
`pursuant to Section 3.8 of the Compact. Specifically, Section 14.17 of the
`
`Compact provides that a person, association or corporation who violates
`
`or attempts or conspires to violate a provision of the Compact or a rule,
`
`regulation or order of the Commission may be liable for a penalty of as
`
`much as $1,000 for each offense and $1,000 per day for a continuing
`
`violation, attempt or conspiracy to be fixed by a court of competent
`
`jurisdiction.
`
`39. The Commission’s
`
`final determination regarding
`
`its
`
`jurisdiction and authority under the Compact puts the public on notice
`
`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
`
`located in Wayne County and other areas of the Basin without prior
`
`authorization from the Commission that they are at risk of incurring
`
`substantial civil penalties and other potential enforcement actions.
`
`
`
`13
`
`

`

`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
`
`future and then incurring the substantial expense of seeking Commission
`
`approval for an undertaking over which the Commission does not have
`
`jurisdiction.
`
`41.
`
`In light of the fact that the Commission is not considering
`
`applications for project approval of Well Pads, WLMG must choose
`
`between the substantial risks associated with proceeding without
`
`Commission approval or indefinitely deferring otherwise lawful use of
`
`the Property.
`
`42. The Commission’s assertion of jurisdiction over otherwise
`
`lawful use of land in connection with natural gas extraction by WLMG,
`
`as well the Commission’s assertion of jurisdiction over “related”
`
`activities, materially and adversely affects WLMG by interfering with
`
`WLMG’s right to use the Property in conducting a lawful business
`
`activity. The material and adverse effect on WLMG’s rights to use the
`
`Property and to conduct a lawful business activity is caused by the
`
`
`
`14
`
`

`

`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
`
`existence of the Compact.
`
`43. A decision in favor of WLMG in this case will remove the sole
`
`insurmountable barrier to WLMG’s plan to develop the Property in the
`
`manner described in this complain and also will result in an increase in
`
`the market value of the Property and nearby land owned by WLMG.
`
`44. Absent the relief requested herein, WLMG will be deprived of
`
`its constitutionally protected right to use its Property in a lawful and
`
`productive manner. In addition, WLMG will incur economic injury in
`
`that it will be prevented from confirming the full scope of, and then
`
`extracting and selling natural gas associated with, the Property and also
`
`from benefiting from an increase in the market value of the Property
`
`which will follow the drilling of an exploratory well.
`
`
`
`
`
`
`
`15
`
`

`

`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 16 of 18
`
`COUNT I – DECLARATORY JUDGMENT
`
`45. WLMG repeats and re-alleges paragraphs 1 through 44 of this
`
`complaint as if fully set forth herein.
`
`46. The Commission’s “project” approval jurisdiction does not
`
`extend to all human undertakings that may have a substantial effect on
`
`the water resources of the Basin.
`
`47. The Commission’s project approval jurisdiction under Section
`
`3.8 of the Compact is limited to “projects” that have a substantial effect
`
`on the water resources of the Basin
`
`48. The Well Pad as proposed by WLMG does not constitute a
`
`“project” under Section 3.8 of the Compact.
`
`49. Because WLMG’s proposed Well Pad does not constitute a
`
`“project,” the Commission lacks authority under Section 3.8 of the
`
`Compact to require WLMG to obtain Commission approval for the Well
`
`Pad.
`
`50. Because WLMG’s proposed Well Pad does not constitute a
`
`“project,” it is irrelevant whether or not the Commission believes that the
`
`proposed Well Pad may have a substantial effect on water resources in
`
`the Basin.
`
`
`
`16
`
`

`

`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 17 of 18
`
`51. The Commission otherwise lacks authority to require WLMG
`
`to submit for its review, and to obtain its prior approval for, the proposed
`
`Well Pad.
`
`52. The Commission, in asserting jurisdiction over WLMG’s
`
`proposed Well Pad, is misconstruing and unlawfully exceeding its
`
`authority under the Compact.
`
`53. The Commission, in asserting jurisdiction over, and by
`
`precluding the development of WLMG’s proposed Well Pad, has and will
`
`continue to deprive WLMG of constitutionally protected rights.
`
`
`
`17
`
`

`

`Case 3:16-cv-00897-RDM Document 1 Filed 05/17/16 Page 18 of 18
`
`WHEREFORE, WLMG requests that the Court:
`
`
`
`1. Declare that the Commission does not have jurisdiction over,
`
`or the authority to review and approve, or to require WLMG to seek prior
`
`approval from the Commission for, or to otherwise preclude the
`
`development of, WLMG’s proposed well pad, appurtenant facilities or the
`
`related activities to be carried out on the Property.
`
`2. Grant such further relief as the Court deems appropriate.
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`
`
`
`
`
`
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`
`
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`
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`
`
`
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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
`
` May 17, 2016
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Jeffrey Belardi
`
`
`PA 71826
`
`
`BELARDI LAW OFFICES
`410 Spruce Street, 4th Floor
`Scranton, PA 18503
`
`
`(570) 342-4555
`
`
`
`jeff@belardilaw.com
`
`
`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
`
`
`
`18
`
`

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