A Closer Look at PGC vs. Proctor

A narrow ruling with limited impact

The Pennsylvania Supreme Court’s decision in PGC v. Proctor is narrow, limited in impact, and not a broad reopening of Pennsylvania land titles derived from historical tax sales.

• PGC v. Proctor did not overrule Herder Spring. The starting point remains Herder Spring Hunting Club v. Keller, which held that a pre-1947 tax sale of land could extinguish a prior separated mineral interest where the land was assessed and sold as one undivided tract. The Herder Spring decision stated that it had “limited application” and PGC v. Proctor is an even more limited subset of that case.

• The holding is limited to bad faith tax sales. The Court held that a delinquent surface owner cannot use its own tax default—directly or through an agent—to acquire a better title and wipe out another party’s separate subsurface interest.

• The affected universe is inherently small. The decision does not affect the overwhelming majority of tax-sale titles. The decision concerns formerly unseated or “wild” lands, pre-1947 tax sales, separate subsurface estates, and proof of agency or self-serving in tax sales more than a century old. Where the tax-sale purchaser is not the owner or an agent, the decision does not apply.

• The impacted parties are limited in number. The real beneficiaries of the Act 27 are a small Maryland-based company, International Development Company (IDC), and EQT, a natural gas producer – not Commonwealth agencies. The Proctor case involved Central Pennsylvania Lumber Company (CPLC) tax sales. Although the majority of CPLC’s lands were sold to PGC and DCNR, CPLC’s “successors in interest” – IDC and EQT – have eliminated the Commonwealth agencies’ claims to a significant portion of the lands involved. 

PGC v. Proctor is a narrow anti-self-dealing rule that prevents a surface owner from exploiting its own tax delinquency to eliminate a severed mineral owner’s rights. Its practical effect should be limited to the case where the tax-sale purchaser was not a bona fide independent purchaser, but instead was acting for the party whose tax default triggered the sale. This decision is very narrow, however, Act 27 is broad and could have many unintended consequences.