Tioga County, Pennsylvania De Facto Takings (UGI Storage Company) – Class Action Litigation

Tioga County, Pennsylvania De Facto Takings (UGI Storage Company) – Class Action Litigation

Chimicles Schwartz Kriner & Donaldson-Smith LLP is representing property owners in Tioga County, Pennsylvania, who allege to have been subjected to a de facto taking of their subterranean oil and gas rights by UGI Storage Company (“UGI”), a public utility with the power of eminent domain.

In November 2009, UGI filed an application with the Federal Energy Regulatory Commission (“FERC”) to, among other things, take ownership and to operate the Meeker Storage Field – an underground natural gas storage facility – and create a 3,000-foot protective buffer zone around this storage area.  The buffer zone, which encompasses some 2,980 acres, is designed to prohibit fracking and drilling operations that could come too close to UGI’s underground storage areas.  In October 2010, FERC issued an order partially certifying the buffer zone and indicating that UGI would need to meet certain requirements, including providing proper notification to affected property owners in the buffer zone, before FERC would give UGI final authority to fully implement this buffer zone.  The Plaintiffs in these lawsuits allege that in the ensuing twelve years, UGI has not provided required notice to property owners about its proposed buffer zone and how the buffer zone has adversely impacted owners’ rights and the values of properties located in the buffer zone. Plaintiffs also allege that UGI has yet to pay just compensation to property and property rights owners within the buffer zone.

The clients we represent allege that UGI’s conduct has effectively prohibited any fracking activities from occurring on those properties.  Essentially, oil and gas exploration companies are avoiding the buffer zone because of UGI’s conduct. Their properties are situated above the Utica and Marcellus shales in a region of Northcentral Pennsylvania where fracking activities are abundant.

Our clients have alleged that UGI’s conduct amounts to an unlawful taking of the property rights of owners of oil and gas rights that are situated within the buffer zone. The law of eminent domain applies and requires that persons who have had property taken are entitled to just compensation.  As such, we are attempting to recover appropriate monetary relief for the clients we represent in these cases.

On November 29, 2021, CSKD secured a landmark unanimous ruling from the Pennsylvania Supreme Court that clarified the distinction between de facto and de jure takings and found that UGI possessed the power of eminent domain with respect to our clients’ properties.  A copy of that opinion is available below.

The Supreme Court remanded the cases to the Commonwealth Court for further proceedings.  The case is active and ongoing.