Depending on high court’s ruling, every well permit could be subject to judicial review

Depending on high court’s ruling, every well permit could be subject to judicial review by Ellen M. Gilmer, September 26, 2012, E&E News
West Virginia officials and an energy company are pushing the state’s highest court to refrain from giving landowners more opportunity to contest well permits. A lower court last year tackled the question of how much say a landowner has when a company wants to drill for oil and gas beneath his or her property. Drillers who hold underground mineral leases have a legal right to reasonable access to those resources but still must give 30 days’ notice to the people who own land on top. Those landowners — or surface rights holders — can then write a letter to the state Department of Environmental Protection to voice concerns. After EQT Corp. sought a permit to drill on Matthew Hamblet’s land in 2010, the Doddridge County resident argued that he additionally had the right to a hearing with DEP before any permit was issued, along with the opportunity to appeal a completed permit. Citing the West Virginia Supreme Court Lovejoy v. Callaghan decision in 2002, the lower court agreed with Hamblet.

The case has now moved to the state Supreme Court, where high-stakes arguments played out yesterday. The justices will likely hand down their decision in the next month. If Hamblet wins, the ruling will reverberate across West Virginia’s Marcellus Shale drilling landscape, giving surface owners the right to appeal every well permit issued. “That will slow down the permitting process and ultimately the development process significantly,” said James Pardo, a New York-based attorney with McDermott Will and Emery who is not involved in the West Virginia case. “If it’s going to happen in West Virginia, it very well could happen somewhere else, too.” The arguments are muddied by Lovejoy, the case the lower court relied on as precedent. According to attorneys on both sides of the appeal, the court erred in the 2002 decision in determining that West Virginia code entitles surface owners to judicial review of permits. In fact, that provision of state law applies not broadly to surface owners, but specifically to coal seam operators and coal leaseholders. That means that surface owners clearly have the right to judicial review of permits under Lovejoy but that that decision may be rooted in a misinterpretation of state law. The court now can decide to rely on its own precedent and “compound its error,” Pardo said, or acknowledge the previous error, rule in the state’s favor and clarify Lovejoy. Arguing against the state, West Virginia Surface Owners’ Rights Organization attorney Dave McMahon said the Lovejoy precedent has become a distraction. Regardless of that decision, he said, surface owners have a constitutional right to due process, which would include judicial review of well permits that would affect their land. “We think the Supreme Court understands that even though we don’t own the minerals, we have enough rights as members of the public seeking protection,” he said after the court proceedings. [Emphasis added]