What A “Fracking” Decision!

Image Credit: Sam Howitz

Image Credit: Sam Howitz

“WHAT THE DRILLING INDUSTRY HAS BOUGHT AND PAID FOR IN CAMPAIGN CONTRIBUTIONS THEY SHALL RECEIVE”

Munroe Falls, OH (TFC) -The Ohio State Supreme Court ruled in a fractured 4-3 majority, that Munroe Falls city zoning ordinances and procedures conflict with Ohio Statute governing the issuance of permits for oil and gas wells and production operations. The decision in the case, The City of Munroe Falls, v. Beck Energy Corporation ET AL.,  essentially trumped the local zoning authority of Munroe Falls granted under the Ohio State Constitution.

In 2011 Beck Energy Corporation applied for and received a permit from a division of the Ohio Department of Natural Resources for the purpose of drilling an oil and gas well on property within the corporate limits of the city of Munroe Falls. Soon after Beck Energy began drilling, the city issued a stop-work order and filed a complaint seeking injunctive relief in the Summit County Court of Common Pleas. The complaint alleged that Beck Energy was violating multiple provisions of the Munroe Falls Codified Ordinances.


Munroe Falls Complaint stated five specific ordinances that Beck Energy had violated.
 The first is a general zoning ordinance that prohibits any construction or excavation without a “zoning certificate” issued by the zoning inspector. To obtain the zoning certificate, the applicant must obtain various approvals from the planning commission, the city council, the zoning inspector, and when a variance is being requested, the board of zoning appeals. For example, an applicant seeking approval of a conditional use must obtain a “conditional zoning certificate” by following the procedures outlined in the Munroe Falls Codified Ordinances, which include notice and a public hearing.

Does fracking impact you? Probably.

Does fracking impact you? Probably.

The other four ordinances specifically relates to oil and gas drilling. Munroe Falls Ordinances prohibits any person from drilling a well for oil, gas, or other hydrocarbons “until such time as such persons have wholly complied with all provisions and a conditional zoning certificate has been granted by Council to such person for a period of one year.” Munroe Falls Codified Ordinances also require an applicant to pay a fee of $800 and deposit $2,000 for a performance bond at the time of filing. Finally, Munroe Falls Codified Ordinances requires a public hearing at least three weeks prior January Term, 2015 to drilling and requires the permit applicant to schedule the hearing and notify all property owners and residents within 1,000 feet of the well head.

For anyone that had the experience of seeking a zoning variance all of these procedures are fairly common no matter where you live in this country. State laws are always involved and govern where applicable as well of course, but zoning laws have its say in every instance and it also allows for the public to be properly notified about and comment on, as it sees fit, within their own community.  Munroe Falls process in this regard promulgated the same procedures and protections.

The Summit County Court of Common Pleas, agreeing with the Munroe Falls, granted the city’s request for a permanent injunction prohibiting Beck Energy from drilling until it complies with all local ordinances. Beck Energy had argued that the Munroe Falls Codified Ordinances conflicted directly with State Law and had no authority over the oil and gas well drilling operations. Beck Energy refused to seek the permission of the Munroe Falls Zoning Commission and appealed the decision.

The Ohio State Court of Appeals reversed the trial court decision essentially holding that State Law forbids Munroe Falls from enforcing its ordinances. The court of appeals rejected the city’s argument that the Ohio State Constitution’s Home Rule Amendment allowed it to impose its Zoning Ordinance requirements on oil and gas drilling operations.

Munroe Falls appealed.

In its ruling the Court stated, “Article II, Section 36 vests the General Assembly with the power to pass laws providing for the regulation of methods of mining, weighing, measuring and marketing coal, oil, gas and all other minerals.” With the comprehensive regulatory scheme in R.C. Chapter 1509, the General Assembly has done exactly that. We hold that the Home Rule Amendment to the Ohio Constitution, Article XVIII, Section 3, does not allow a municipality to discriminate against, unfairly impede, or obstruct oil and gas activities and production operations that the state has permitted under R.C. Chapter 1509.”

As one can see Justice French based her decision on two premises. That the law in question specifically removes zoning authority from local municipalities and that by requiring zoning, Munroe Falls was somehow discriminating against, unfairly impeding or obstructing Beck Energy.

Nowhere in the Statute does it indicate the removal of local zoning ordinances and at no time during the trial was it proven that Munroe Falls was discriminating against, unfairly impeding or obstructing Beck Energy. On the contrary the Court specifically ordered that all Beck Energy had to do was comply with the ordinance. There was never any zoning denial by Munroe Falls. Justice French somehow equates that requiring Beck Energy to follow the law somehow has placed an undue burden on Beck Energy. The record does not support this factual finding so how would it support that legal conclusion?

While somehow agreeing with the judgment of Justice French, Justice O’Donnell wrote in a concurring opinion,  “Accordingly, whether a municipality has authority to enact zoning ordinances that affect oil and gas wells within its territory is a question yet to be decided, and for that reason, I concur in the resolution of this case.” Justice O’Donnell reasoned that this court ruling only governed these five ordinances from Munroe Falls and was not a blanket ruling overturning all other city zoning ordinances involving oil and gas well drilling. No doubt all of the Cities in Ohio will need to revise their own ordinances to comply with this decision. With the ambiguity and assumptions offered by Justice French there is no doubt that this task will not be an easy one.

Seven Justices sit on this court and only two of them did not write an opinion. All three dissenting Judges did. Justice J. Pfeifer offered this conclusion, “It appears that the General Assembly has attempted to bring order to Ohio’s historically scattershot way of dealing with oil booms. I would find that R.C. 1509.02 leaves room for municipalities to employ zoning regulations that do not conflict with the statute. By leaving some space for local control, the General Assembly has recognized that a “big picture” approach with local input is the best way to encourage the responsible and sustainable development of Ohio’s natural resources.” Judge Pfeifer also did not find any language that removed this local authority.

In a well penned opinion Justice J. Lanzinger stated,

“Because it is not clear to me that the Munroe Falls zoning ordinances actually conflict with a general state statute, I respectfully dissent. I believe that local zoning ordinances can have a place beside the state’s statutes regulating oil and gas activities.”

Again finding no language that supported the majority assertion of only state control. Justice Lanzinger pointed out numerous times throughout the writing how the General Assembly “knows how to specifically prohibit the enforcement of local zoning ordinances as part of a statewide and comprehensive legislative scheme” and how the Court had acknowledged this in a number of cases. Justice Lanzinger goes even further and offers a colloquy of cases throughout the country that clearly show how to “harmonize” State Law and Local Zoning relevant to oil and gas operations. Clearly dismissed by the majority. Justice Lanzinger smartly concludes, “There is no need for the state to act as the thousand-pound gorilla, gobbling up exclusive authority over the oil and gas industry, leaving not even a banana peel of home rule for municipalities.” Calling for further proceedings and requiring that the General Assembly addresses the open question presented by this case and ensuring that both jurisdictions remain relevant.

Rarely though has there ever been a dissent of the kind offered by Justice J. O’Neill.

“Let’s be clear here. The Ohio General Assembly has created a zookeeper to feed the elephant in the living room. What the drilling industry has bought and paid for in campaign contributions they shall receive. The oil and gas industry has gotten its way, and local control of drilling-location decisions has been unceremoniously taken away from the citizens of Ohio. Under this ruling, a drilling permit could be granted in the exquisite residential neighborhoods of Upper Arlington, Shaker Heights, or the Village of Indian Hill—local zoning dating back to 1920 be damned.”

One does not read comments by sitting State Supreme Court Justices like the one offered here by Justice O’Neill.  As pointed out by Think Progress, Justice French’s campaign contributions lists a who’s who in the oil and gas Industry while racking up “tens of thousands of dollars.” Among her contributors are Diversified Resources and American Energy, two fracking companies doing business in Ohio, a fracking equipment manufacturer Kimble Company and Murray Energy and First Energy Utility Companies. American Electric Powers and its political action committee gave large sums of money as well. One can only wonder if Justice O’Neill looked at the campaign contributions given to Justice French before writing that dissent.