Snyder Brothers, Inc. v. PA PUC PA Independent Oil & Gas Association v. PA PUC
157 A.3d 1018
| Pa. Commw. Ct. | 2017Background
- SBI and PIOGA challenged a PUC order finding SBI failed to pay Act 13 impact fees on certain wells for 2011–2012; dispute turns on statutory definition of "stripper well."
- Act 13 defines a "stripper well" as an unconventional well "incapable of producing more than 90,000 cf of gas per day during any calendar month." Vertical wells (producing more) pay impact fees; stripper wells do not.
- I&E/PUC argued "any" means "every" (i.e., producing over 90,000 cf in any month makes a well subject to fees); SBI argued "any" means "one" (producing over 90,000 cf in at least one month does not convert a well from stripper status) or, if ambiguous, must be construed for the taxpayer.
- ALJ and PUC found the term ambiguous, adopted the interpretation that favored fee collection, and assessed interest and mandatory penalties (but declined discretionary civil penalties).
- Commonwealth Court (en banc) reversed: it held "any" unambiguously means "one/any single month," so wells producing under 90,000 cf in at least one month are stripper wells; alternatively, applied lenity/strict construction to resolve any ambiguity in SBI's favor, and vacated interest/penalties tied to the fee determination.
Issues
| Issue | Plaintiff's Argument (SBI) | Defendant's Argument (PUC/I&E) | Held |
|---|---|---|---|
| Meaning of "any" in "during any calendar month" | "Any" means one or any single month; plain text is unambiguous — a well is a stripper well if it cannot produce >90,000 cf in at least one month. | "Any" means "each/every" (or otherwise ambiguous); a single month over threshold makes well subject to fees. | Court: "any" unambiguously means one/any single month; reversed PUC. |
| Whether statute is ambiguous (necessitating §1921(c) factors) | Term is unambiguous; plain meaning controls. | Term ambiguous; use construction factors to effectuate legislative intent to collect fees. | Court: plain meaning controls; even if ambiguous, construction factors do not support PUC and rule of lenity favors SBI. |
| Deference to agency interpretation | Agency not entitled to deference where plain language controls and agency changed positions; prior agency materials suggested the opposite. | Agency interpretation entitled to deference as administrator of statute; construction supports fee collection. | Court: no deference where text is clear and agency's litigation-era interpretation is inconsistent with prior statements. |
| Application of penalties/interest | Because wells are stripper wells, fees, interest, and penalties should be vacated; ambiguous penal provisions construed for defendant. | Penalties and interest are mandatory under Act 13 for unpaid fees. | Court: vacated fee liability (so vacated related interest/penalties); applied lenity/strict construction if ambiguity assumed. |
Key Cases Cited
- Dechert LLP v. Commonwealth, 606 Pa. 334, 998 A.2d 575 (discussing when agency or plain-language construction controls)
- Commonwealth v. Davidson, 595 Pa. 1, 938 A.2d 198 (interpreting "any" as singular where context uses singular nouns)
- Warrantech Consumer Product Services, Inc. v. Reliance Insurance Co., 626 Pa. 218, 96 A.3d 346 (defining statutory ambiguity and use of statutory construction)
- Grayned v. City of Rockford, 408 U.S. 104 (explaining vagueness concerns and need for fair warning)
- Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (agency interpretations inconsistent with prior positions get less deference)