## Facts

- Pennsylvania’s Constitution includes the Environmental Rights Amendment (ERA), guaranteeing rights to environmental quality and declaring public natural resources to be common property held in trust by the Commonwealth.
- The Commonwealth leased oil and gas rights on state forest and park lands, generating substantial bonus payments, rents, and royalties.
- The General Assembly enacted Fiscal Code provisions (including 72 P.S. §§ 1602‑E and 1603‑E) that directed or enabled transfers of these lease-related revenues away from the Oil and Gas Lease Fund and toward the General Fund and other non-conservation expenditures.
- Pennsylvania Environmental Defense Foundation (PEDF) filed a declaratory judgment action alleging these diversions violated the Commonwealth’s trustee obligations under the ERA.
- The Commonwealth Court granted summary relief for the Commonwealth, applying the three-part balancing framework from *Payne v. Kassab* to PEDF’s ERA claims.
- PEDF appealed, challenging both the transfers of lease proceeds and the use of the *Payne* framework for ERA review.

## Issues

1. Whether state forests and parks, including the oil and gas beneath them, are part of the public trust “corpus” under the ERA, imposing fiduciary duties on the Commonwealth as trustee.
2. Whether proceeds from leasing public natural resources (bonuses, rents, royalties) are trust assets that must be used to conserve and maintain public natural resources rather than for general budgetary purposes.
3. Whether the *Payne v. Kassab* test is a valid method for adjudicating claims under the ERA.

## Decision

- The Pennsylvania Supreme Court reversed in part, vacated in part, and remanded.
- The Court held that state parks and forests, including the oil and gas minerals in them, are part of the corpus of an ERA-based constitutional public trust.
- The Court held that money generated from selling or leasing public natural resources is also a trust asset and remains subject to constitutional trust restrictions.
- The Court held Fiscal Code provisions (including §§ 1602‑E and 1603‑E) unconstitutional to the extent they authorized diversion of trust assets to non-trust purposes.
- The Court rejected continued reliance on the *Payne* balancing test and directed that ERA analysis must begin with the constitutional text and incorporate Pennsylvania trust-law principles.
- The Court remanded for further proceedings and development of an appropriate record and remedy consistent with its interpretation of the ERA.

## Legal Principles

- Article I, § 27 is self-executing and creates a constitutional public trust in Pennsylvania’s public natural resources, with the Commonwealth as trustee for the people, including future generations.
- The trust corpus includes both public natural resources and the proceeds derived from their sale or lease; conversion of a natural resource into money does not remove the asset from the trust.
- As trustee, the Commonwealth is bound by fiduciary duties, including loyalty, prudence, and impartiality, and must manage trust assets to conserve and maintain public natural resources for all beneficiaries.
- Legislative discretion over fiscal and environmental policy is constrained by the ERA’s trustee obligations; statutes authorizing use of trust assets for unrelated governmental spending violate the ERA.
- The *Payne v. Kassab* test is not controlling for ERA claims; courts must interpret and enforce the ERA through its text and incorporated trust principles rather than a general balancing approach.

## Conclusion

The court held that the ERA establishes a constitutional public trust covering state forests, parks, their oil and gas, and the revenues derived from leasing them; because those proceeds are trust assets, the Commonwealth may not divert them to general budgetary uses, and ERA claims must be evaluated using the constitutional text and trust-law duties rather than the *Payne* test.


Pa. Env’t Def. Found. v. Commonwealth, 161 A.3d 911 (Pa. 2017)