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Volume XII, Number 138

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PA Supreme Court Halts AG Lawsuit Against Oil and Gas Lessees Under UTPCPL

On March 24, 2021, in a 6-1 decision, the Pennsylvania Supreme Court halted a lawsuit against oil and gas lessees by the Pennsylvania Office of the Attorney General (OAG) under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. §§ 201-1—201-9.3, for alleged deceptive and anticompetitive practices in obtaining oil and gas leases from landowners, holding that the UTPCPL regulates the conduct of sellers and does not provide a remedy for sellers (i.e., landowners) against buyers (i.e., lessees).  

The UTPCPL is a consumer protection law against fraud and deceptive business practices. The Court cited the definition of “trade” and “commerce” under the statute, concluding that the UTPCPL prohibits unfair and deceptive practices in the conduct of “advertising, offering for sale, sale or distribution” of goods. The legislature chose to define trade and commerce as only acts of selling for purposes of the UTPCPL. This choice aligns with the intended purpose of the UTPCPL in protecting consumers. In the leasing transaction at issue, the lessees were in the position of a buyer not a seller, purchasing rights to the landowners’ mineral estates in return for bonuses, royalties and other payments. Therefore, the lessees were not subject to regulation or claims under the UTPCPL. The OAG’s additional anti-trust conduct claims were moot as a result of this decision.  

As background, the OAG filed the action under the UTPCPL, and the lessees filed preliminary objections that they were not “sellers” under the terms of the UTPCPL because they acquired mineral rights from landowners. The preliminary objections were overruled by the trial court, a decision subsequently affirmed in part by the Pennsylvania Commonwealth Court.

© Steptoe & Johnson PLLC. All Rights Reserved.National Law Review, Volume XI, Number 85
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About this Author

Nate Holland, Oil, Gas, Attorney, Steptoe Johnson Law Firm
Member

Nate Holland assists clients with business transactions and litigation involving the oil and gas industry. In particular, Mr. Holland helps clients develop solutions for novel challenges or new applications of oil and gas law.

(814) 333-4906
Brian Pulito, Steptoe Johnson, construction litigation, intellectual property
Member

Brian Pulito focuses his practice in the areas of eminent domain proceedings, construction litigation, midstream litigation, oil, gas and mineral law litigation, and insurance litigation.

 

 

814-333-4905
Jon C. Beckman, Steptoe Johnson, Natural Resource Lawyer, Energy Regulation Matters Attorney
Associate

Jon Beckman focuses his practice in the area of energy and natural resources law, specifically assisting clients with transactional and environmental matters.  Mr. Beckman is a former Combat Trauma Specialist for the Pennsylvania Army National Guard and served in Operation Iraqi Freedom.

Assisted clients with preparation of mineral title opinions, including complex calculations of ownership and leasehold interests, arising from energy exploration and production operations

Assisted energy client in perfecting an...

(814) 333-4913
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