Massive Legal Victory in New York State: Towns can ban fracking; New York’s highest court ruled in 27 days

Towns elated, gas industry dismayed by fracking ruling by Jon Campbell, June 30, 2014, Politics on the Hudson
Mary Ann Sumner, town supervisor of Dryden, Tompkins County, was elated with the decision. Dryden was first sued over its ban in 2011, as was the town of Middlefield, Otsego County. She said she hopes the ruling spurs other town boards to act—both in New York and beyond. “Heavy industry has never been allowed in our small farming town and three years ago, we decided that fracking was no exception,” Sumner said in a statement. “The oil and gas industry tried to bully us into backing down, but we took our fight all the way to New York’s highest court. And today we won.”

More from Sumner: “I hope our victory serves as an inspiration to people in Pennsylvania, Ohio, Texas, Colorado, New Mexico, Florida, North Carolina, California and elsewhere who are also trying to do what’s right for their own communities.” [Emphasis added]

2014 06 30 Map of NY bans moratoriums

NY Fracking Ruling Ratchets Up Risk For Drilling Industry by Pete Brush, June 30, 2014, Law360 The move Monday by New York’s top court to affirm local oil and gas drilling bans won’t end the fight over fracking statewide, but experts say it will make it far riskier for the industry to pursue drilling profits, by taking away its ability to sue and by giving towns the power to trump oil and gas interests at any time. [Emphasis added]

The Court of Appeals’ Dryden/Cooperstown Decision – Court Upholds The Sanctity of Local Zoning, But Does It Doom Fracking In New York? by Steven C. Russo, Greenberg Traurig, LLP, June 30, 2014, The National Law Review
The Court made its ruling in the face of broad statutory language in New York’s Oil, Gas and Solution Mining Law (OGSML) that preempts “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries.”   The Court relied heavily on its 1987 decision in Matter of Frew Run Gravel Products v. Town of Carroll, 71 N.Y.2d 126 (1987), in which the court, interpreting a preemption provision contained in the State’s mining law, drew a distinction between laws regulating how mining is conducted versus laws regulating where the activity could take place.  The court found that the seemingly broad language contained in the OGMSL preemption provision only spoke to laws regulating “the actual operations of the oil and gas industries.”  The Court thus rejected the Industry Appellants’ main argument that a ban does constitute the regulation of actual operations.  The court found that, while local zoning bans would “undeniably have impact on the oil and gas enterprises,” the bans at issue regulated land use in general and did not attempt to regulate the details, procedures and operations of the oil and gas industries.  The court drew heavily on its view that the regulation of local land use is “one of the core powers of local governance.”
The Industry Appellants made a secondary argument, pointing to the fact that the preemption language authorized localities to regulate only transportation and taxes.  Appellants’ basic point is that local control over land use and zoning should also have been included as a carve out.  The Court of Appeals rejected this interpretation, finding that, unlike local land use laws, laws relating to road use and taxes could be construed as directly regulating industry operations. …

Finally, the Court of Appeals rejected the argument that preemption would be inconsistent with the overall structure and regulation of the industry under the OGSML law.  The court found that the scheme providing for efficient extraction of the resource and the prevention of waste did not necessitate preemption of the location of well pads.  Like the lower courts that faced the issue, however, the Court of Appeals did not confront the actual language associated with the local bans that proscribed the location of surface well pads and banned location of subterranean laterals. [Emphasis added]

Big win for Dryden officials as top court approves fracking bans by Ithaca Journal, June 30, 2014
Dryden, N.Y. — Dryden’s fracking ban will stand after New York’s top court ruled that the state’s municipalities can vote to prevent fracking within their borders. The court upheld bans in Dryden and Middlefield that had been challenged by the gas and oil industry, according to Bloomberg News.

A press release from the Dryden Town Supervisor’s office stated:

ITHACA, NY – Today, in a precedent-setting ruling, the New York State Court of Appeals upheld the rights of local towns over big oil and gas companies with its decision in Matter of Wallach, Trustee for Norse Energy v. Town of Dryden. The Dryden Resource Awareness Coalition and Town of Dryden officials will host a press conference today, Monday, June 30 at 12 PM at the Ithaca Town Court in Ithaca, to discuss the implications of this ruling, which gives legal backing to the more than 170 municipalities across New York State which have taken measures, similar to those in Dryden and Middlefield, that protect their residents from the dangers of fracking and gas and oil development.

This legal battle showcased the fight between local community rights and the oil and gas industry. After the towns of Dryden and Middlefield used local zoning laws to ban heavy industry development, including oil and gas operations within their borders, they faced legal challenges from industry officials looking to use the land for fracking and gas projects.

Today’s press conference will include Jason Leifer, Dryden Town Board deputy supervisor who initiated the effort to protect Dryden against gas drilling and rallied the support needed to pass a ban; Linda Lavine, Dryden Town Board Council Member who was instrumental in bringing townspeople together to support the ban through her run for a board seat and convinced the board to retain Deborah Goldberg through Earthjustice for the appeals, leading to this final win; Don Barber, Town of Caroline supervisor who led the neighboring Town of Caroline in a hard-won fight to ban gas drilling and fracking; and Barbara Lifton, Assemblywoman for the NY 125th District, who supported and championed efforts to ban fracking at every step of the process.

Dryden’s story began in 2009, after residents pressured by oil and gas company representatives to lease their land for gas development learned more about fracking, the technique companies planned to use to extract the gas. Residents organized and educated their fellow citizens for more than two years under the banner of the Dryden Resource Awareness Coalition (DRAC), ultimately convincing the town board to amend its zoning ordinance in August 2011 to clarify that oil and gas development activities, including fracking, were prohibited.

Just six weeks after the town board passed the measure in a unanimous bi-partisan vote, Anschutz Exploration Corporation (a privately held company owned by a Forbes-ranked billionaire) sued the town. Dryden argued that their right to make local land use decisions, enshrined in the home rule provision of the New York State Constitution, applies to oil and gas development. In February 2012, a state trial court judge agreed. In May 2013, a panel of judges in a mid-level appeals court unanimously sided with the town. Today’s decision by New York’s highest court is the final ruling in the matter.

The case in Dryden has taken on special significance. Through the course of its legal battle, more than 20,000 people from across the country and globe sent messages to Sumner and her colleagues on the Town Board, expressing support for the town in its legal fight, and a video depicting the town’s fight has garnered more than 80,000 views. [Emphasis added]

Towns May Ban Fracking, New York State High Court Rules by Kate Taylor, June 30, 2014, New York Times
In a defeat for the oil and gas industry, New York State’s highest court Monday ruled that towns can use zoning ordinances to ban hydraulic fracturing, the controversial extraction method known as fracking.

The immediate effect of the decision is limited, as there is currently a moratorium on fracking across New York State, ostensibly to allow the state to study fracking’s effects on the environment. But some towns, worried that the state will eventually allow the practice, took matters into their own hands. The two towns at the center of the case – Dryden, in rural Tompkins County, and Middlefield, in Otsego County – amended their zoning laws in recent years to ban fracking, on the basis that it would threaten the health, the environment and, in Middlefield’s case, the “rural character” of the community.

Subsequently, two energy companies that had acquired leases in Dryden and Middlefield for the purpose of exploring gas extraction filed legal complaints, arguing that the town ordinances were preempted by state oil and gas law. On Monday, the New York State Court of Appeals affirmed a lower court ruling rejecting that argument, and found that the towns did indeed have the authority to ban fracking through land use regulations. [Emphasis added]

New York Towns Can Ban Fracking, State’s Top Court Rules by Chris Dolmetsch, June 30, 2014, Bloomberg

2014 06 30 New York Appeal Court Towns can ban fracing

Bloomberg’s Betty Liu reports that New York State’s highest court ruled that towns and cities can block hydraulic fracturing within their borders, upholding a six-year-old statewide moratorium on the practice. She speaks on “In The Loop.”

New York’s cities and towns can block hydraulic fracturing within their borders, the state’s highest court ruled, dealing a blow to an industry awaiting Governor Andrew Cuomo’s decision on whether to uphold a six-year-old statewide moratorium.

The Court of Appeals in Albany today upheld rulings dismissing lawsuits that challenged bans enacted in the upstate towns of Dryden and Middlefield.

The ruling may lead the oil and gas industry to abandon fracking in New York as Cuomo considers whether to lift a statewide moratorium instituted in 2008 that he inherited when he took office.

The cases are Anschutz Exploration Corp. v. Dryden, 902/2011, New York Civil Supreme Court, Tompkins County (Ithaca); and Cooperstown Holstein Corp. v. Town of Middlefield, 1700930/2011, New York Civil Supreme Court, Otsego County (Cooperstown). [Emphasis added]

N.Y. Towns Win Right to Ban Fracking in Oil Industry Setback by Chris Dolmetsch, June 30, 2014, Bloomberg
The case, closely watched by the energy industry, may invigorate local challenges to the practice in states across the country. The Court of Appeals in Albany today ruled 5-2 to uphold the dismissal of lawsuits challenging bans in the upstate towns of Dryden and Middlefield. The towns engaged in a “reasonable exercise” of their zoning authority when they banned oil and gas extraction and production, the court said in an opinion by Judge Victoria Graffeo. The ruling means that a patchwork of rules may eventually govern whether exploration can take place across New York.

“The towns both studied the issue and acted within their home-rule powers in determining that gas drilling would permanently alter and adversely affect the deliberately cultivated small-town character of their communities,”
Graffeo wrote.

Enlarging Cracks
Fracking is the creation of fractures in rocks and rock formations by injecting fluid into cracks. The larger fissures allow more oil and gas to flow out of the formation to be carried to the surface. … The state barred fracking in 2008 while studying the environmental effects of the drilling method, which is allowed in more than 30 states.

Other jurisdictions are adopting similar laws. Beverly Hills in May became the first municipality in California to prohibit fracking. The industry also has sued the Colorado cities of Fort Collins, Lafayette and Longmont over bans.

Scott Kurkoski, attorney for a dairy farm in Middlefield that sued the township to overturn a ban passed in August 2011, argued to the Court of Appeals on June 3 that the state’s Oil, Gas and Solution Mining Law prevents local governments from enacting zoning ordinances that ban fracking. The dairy farm signed leases in 2007 to explore and develop natural-gas resources under the property.

Anschutz Lawsuit
In September 2011, Anschutz Exploration Corp., an affiliate of billionaire Philip Anschutz’s closely held company, sued Dryden over its ban after buying about 22,000 acres of gas leases there. Norse Energy, a Lysaker, Norway-based explorer whose U.S. unit filed for bankruptcy in December 2012, replaced Anschutz Exploration in the Dryden appeal.

Separate state judges dismissed the lawsuits challenging the bans in February 2012. Those rulings were affirmed by an intermediate appellate court in Albany in May 2013. A judge in Livingston County in April dismissed another lawsuit seeking to overturn a ban in Avon, a town of about 7,000 people south of Rochester.

While state law prohibits municipalities from passing laws or ordinances related to oil, gas and mining regulations, the zoning restrictions enacted in Dryden and Middletown don’t qualify as attempts to regulate the industry and aren’t preempted, the appellate court said in the May 2013 ruling.

Attorneys for the towns have contended they have the right to enact zoning laws as long as they don’t impede state regulations.

Municipalities’ Rights
Deborah Goldberg, an attorney for the nonprofit group EarthJustice representing Dryden, told the Court of Appeals on June 3 that the state legislature can take away municipalities’ rights to specific zoning laws, yet usually leaves protections in place when it does so.

State Regulator
Joe Martens, head of the state’s Environmental Conservation Department, told state lawmakers in January that he won’t issue fracking regulations until at least April 2015, signaling that Cuomo probably won’t make a decision before he faces re-election in November. [Emphasis added]

New York top court says towns can ban fracking by Daniel Wiessner, Reuters, June 30, 2014, Financial Post
The Court of Appeals in a 5-2 decision on Monday upheld drilling bans in the Ithaca suburb of Dryden and in Middlefield, near Cooperstown, saying the laws were extensions of the towns’ zoning authority.

Drilling company Norse Energy USA and an upstate dairy farmer separately sued the towns, claiming the bans violated a law designed to create uniform statewide regulations on the oil and gas industry.

The court disagreed, saying the law was designed to bar only those local ordinances that could impede the state’s ability to regulate drilling activities. “Plainly, the zoning laws in these cases are directed at regulating land use generally and do not attempt to govern the details, procedures or operations of the oil and gas industries,” Judge Victoria Graffeo wrote for the court.

The decision affirmed rulings by three lower courts.

The plaintiffs had told the court that upholding the bans would make drilling companies reluctant to invest in the state, since they would be faced with a patchwork of local laws that could change.

Dryden and Middlefield in 2011 were among the first of more than 170 municipalities in New York to ban gas drilling as state officials considered whether to lift a moratorium on fracking, which is still in place.

In dissent, Judge Eugene Pigott said the towns’ bans went beyond their zoning authority because they include detailed language about drilling activities, such as the storage of gas and use of drilling equipment. The bans “do more than just regulate land use; they regulate oil, gas and solution mining industries under the pretext of zoning,” Pigott wrote, joined by Judge Robert Smith. [Emphasis added]

NY Communities Triumph Over Fracking Industry In Precedent-Setting Case, As NY high court rules towns can zone out oil and gas operations, trend spreads to other states Press Release by Earth Justice June 30, 2014
ALBANY, NY – Local communities have triumphed over the fracking industry in a precedent-setting case decided today by the New York Court of Appeals, the state’s highest court.

Link to decision

In a test case pitting community rights against the oil and gas industry, the Court ruled that the towns of Dryden and Middlefield can use local zoning laws to ban heavy industry, including oil and gas operations, within municipal borders.

“Today the Court stood with the people of Dryden and the people of New York to protect their right to self determination.  It is clear that people, not corporations, have the right to decide how their community develops,” said Dryden Deputy Supervisor Jason Leifer. “This would not have been possible without the hard work of many of my friends and neighbors and our lawyers Deborah Goldberg of Earthjustice and Mahlon Perkins. Today’s ruling shows all of America that a committed group of citizens and public officials can stand together against fearful odds and successfully defend their homes, their way of life, and the environment against those who would harm them all in the name of profit. “

“Heavy industry has never been allowed in our small farming town and three years ago, we decided that fracking was no exception. The oil and gas industry tried to bully us into backing down, but we took our fight all the way to New York’s highest court. And today we won,” added Dryden Town Supervisor Mary Ann Sumner. “I hope our victory serves as an inspiration to people in Pennsylvania, Ohio, Texas, Colorado, New Mexico, Florida, North Carolina, California and elsewhere who are also trying to do what’s right for their own communities.”

Deborah Goldberg, an attorney with the public interest law organization, Earthjustice, represented the Town of Dryden in the case.

“This decision by the Court of Appeals has settled the matter once and for all across New York State and has sent a firm message to the oil and gas industry,” said Earthjustice Managing Attorney Deborah Goldberg. “For too long the oil and gas industry has intimidated and abused people, expecting to get away with it. That behavior is finally coming back to haunt them, as communities across the country stand up and say ‘no more.’ Earthjustice is proud to have stood with, and fought on behalf of, one such community.”

Today’s decision gives legal backing to the more than 170 New York municipalities that have passed measures to protect residents from the impacts of the controversial oil and gas development technique. The news also gives a green light to dozens of other New York towns that have been waiting for today’s decision to pass their own local ban. 

“Town by town, New Yorkers have taken a stand against fracking. Today’s victory confirms that each of these towns is on firm legal ground,” said Helen Slottje, an Ithaca-based attorney whose legal research inspired New York’s local fracking ban groundswell and who was honored with the 2014 Goldman Environmental Prize. “The oil and gas industry tried to take away a fundamental right that pre-dates even the Declaration of Independence: the right of municipalities to regulate local land use. But they failed. The anti-fracking measures passed by Dryden, Middlefield and dozens of other New York municipalities are fully enforceable.”

The decision comes as a growing number of local communities in Colorado, Ohio, Texas, Pennsylvania and California are opting to exert community control to guard against the environmental and public health threats of a deregulated, fracking-enabled oil and gas industry rush. 

“We did it! This victory is for everyone who loves their town and will fight to the end to protect it,” said Dryden resident Deborah Cipolla-Dennis. “I’m proud of my town and I’m proud of the people in Fort Collins, Colorado, Denton, Texas, Santa Cruz, California and all the others who are standing up to the oil and gas industry.”

Dryden’s story began in 2009, after residents pressured by oil and gas company representatives to lease their land for gas development learned more about fracking, the technique companies planned to use to extract the gas.  Residents organized and educated for more than two years under the banner of the Dryden Resource Awareness Coalition (DRAC), ultimately convincing the town board to amend its zoning ordinance in August 2011 to clarify that oil and gas development activities, including fracking, were prohibited.

Just six weeks after the town board passed the measure in a unanimous bi-partisan vote, Anschutz Exploration Corporation (a privately held company owned by a Forbes-ranked billionaire) sued the town. Dryden argued that their right to make local land use decisions, enshrined in the home rule provision of the New York State Constitution, applies to oil and gas development. In February 2012, a state trial court judge agreed. In May 2013, a panel of judges in a mid-level, appeals court unanimously sided yet again with the town. Today’s decision by New York’s highest court is the final ruling in the matter.

The case in Dryden has taken on special significance. Through the course of its legal battle, more than 20,000 people from across the country and globe sent messages to Sumner and her colleagues on the Town Board, expressing support for the town in its legal fight, and a video depicting the town’s fight has garnered more than 80,000 views.

Resources:

COURT DECISION

PHOTOS related to this case

GRAPHIC showing the status of similar legal fights across the country

VIDEO Dryden: The Small Town That Changed The Fracking Game

AUDIO of pre-decision press briefing

[Refer also to:

December 20, 2013: VICTORY! Pennsylvania Supreme Court Says It’s Unconstitutional For Gas Companies To Frack Wherever They Want; Act 13, Gas Industry Takeover Law thrown out by State’s Highest Court

“By any responsible account,” Chief Justice Castille wrote, “the exploitation of the Marcellus Shale Formation will produce a detrimental effect on the environment, on the people, their children, and the future generations, and potentially on the public purse, perhaps rivaling the environmental effects of coal extraction.”

Ernst vs Encana Time Tracker:

One month and 3 weeks (7 weeks) since Court of Appeal of Alberta heard arguments on May 8, 2014 regarding the Court of Queen’s Bench granting the ERCB complete legal immunity, even for violating the Canadian Charter of Rights and Freedoms.

2012 Justice Barbara Veldhuis states – too much information; 2014 Court of Appeal of Alberta Justices state – not enough information:

April 2012: Justice Veldhuis requests a shorter Statement of Claim;
Klippenstein states in court that, in his experience, courts will inevitably ask for more information. Ernst cooperates and fulfills the request for a shortened Claim.

May 2014: the Court of Appeal of Alberta Justices complain there wasn’t more information in the shortened Statement of Claim, and inquire about the ERCB’s Statement of Defence (to date, the ERCB has not filed one).

Two months and 2 weeks (10 weeks) since Court of Queen’s Bench heard arguments in Drumheller on April 16, 2014 on Alberta Environment’s Motion to Strike (after 3 years of process already and their failed application to strike the word contamination and mention of other contaminated water wells at Rosebud), and the regulator’s secret editing of Dr. Alec (Alexander) Blyth’s “independent” report dismissing the contamination of Ernst’s well water.

And, two months and 2 weeks (10 weeks) since Justice Wittmann requested document exchange between Ernst and Encana. The hold up is Encana; the company won’t even agree to schedule a case management phone call with Justice Wittmann. Finally, a date is set, but not until July 14, 2014.

It took nearly 9 months (35 weeks) for Court of Queen’s Bench to rule on the January 18, 2013 hearing: ERCB motion to strike and Alberta Environment motion to remove the word contamination and mention of other contaminated water wells in Rosebud.

It took a year to set the first hearing on April 26, 2012, where Justice Veldhuis requested a shorter statement of claim. It took 7 months to set the January 18, 2013 hearing. It took another 7 months from Justice Wittmann’s September 19, 2013 ruling to get to  the third hearing, on April 16, 2014.

It took 2 years and 4 months for Encana to file statement of defence.

The ERCB and Alberta Government did not file statements of defence.

It took 4 years to get the data from the Alberta Research Council (now Alberta Innovates) on the water contamination cases under Freedom of Information legislation, ordered released by OIP Commissioner’s Office after a year and half in inquiry. The public baseline water well testing data remains withheld even though it was ordered released to Ernst. ]

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