Home Rule, a municipality’s legal right to apply its zoning laws to oil and gas wells, was defended Tuesday in New York State’s highest court, the Court of Appeals. The judges grilled both sides, but left the distinct impression that, if the Legislature wants to specifically preclude a municipality from applying land use laws to oil and gas drilling, the Legislature will need to expressly prohibit it. Because the statute in question clearly does not.
The trial courts and the state appellate court, a total of eight justices, including the judges in Avon and Binghamton that referred to Dryden, have found that zoning bans did not “seek to regulate the details or procedure of” gas drillers, but “simply establishes permissible and prohibited uses of land” within towns.
Conspicuous in their absence: The DEC.
The plaintiffs are contending that the state, in the guise of the Department of Environmental Conservation, has the right to pre-empt local land use laws. But the DEC evidently does not agree – or they would have joined this action against the towns in some form – as co-plaintiffs, intervenors or, at the least, filed an amicus brief – but they refrained from doing so.
The reason the DEC refrained from becoming involved is straightforward: the towns are not regulating the activity, that’s the DEC’s job. They towns are prohibiting the activity outright under their land use laws, that’s the town’s prerogative. The DEC understands the distinction and chose not to file an amicus brief on behalf of the plaintiffs. None of the mainstream press – except the Oneonta Daily Star and Capital Pro – have noticed the DEC’s absence in this case: The dog that didn’t bark.
While Tom West and Scott Kurkoski are gratuitously defending the DEC’s alleged right to preempt zoning they are simultaneously suing the DEC to finish the regulations that are supposed to preempt all local land use laws. Which begs the question: If the DEC has the right to preempt local land use laws and allow fracking anywhere – what regulations are they supposed to preempt them with ? The DEC’s oil and gas regulations have not been updated since 1992; none of them address high volume hydrofracking – the direct concern of both towns.
The DEC’s absence did not go unnoticed by Dryden’s attorney. Deborah Goldberg said that Tom West and Scott Kurkoski were essentially arguing that the state should have rights that it has not sought in the matter. “The [Department of Environmental Conservation] has not bothered to protect their alleged rights (to preempt zoning), they are perfectly happy to live with the decision of this court and the court should uphold the long-standing zoning rights that have always been available to municipalities,” she said.
An audio recording of the oral arguments by The Cris are here. Full video of the proceedings, courtesy of The Bill :
The plaintiffs went first. Tom West, Chesapeake’s lobbyist, representing a Frack Zombie Rent-a-Plaintiff that no longer exists but whose standing in the case has been maintained by legal legerdemain, and Shale Shyster Scott Kurkoski, representing a Corporate Welfare Queen recruited by the frack lobbyists to sue her home town of Middlefield.
Both sides were grilled by the seven justices, who often interrupted the attorneys to clarify a point. The most telling exchange came at the end, where Scott Kurkoski lapsed into what was transparently a Fracking Infomercial, which just seemed to irritate some of the judges, who pointed out that if the legislature wanted to clarify the law to specifically preempt zoning, they could do so.
Tom West for Anschutz/ Norse/ the Bankruptcy Trustee
Tom West was slightly more lawyerly than he had been at the Appellate court, but tended to lapse into his lobbyist mode when pressed. He argued that the wording of the statute and case law gave municipalities no say over oil and gas development, and Chief Justice Jonathan Lippman was incredulous:”What can the municipality do in relation to fracking? Nothing? They have no say in what happens? The elected officials have no say what happens in that municipality? The elected official says there’s nothing they can do?”
West replied that since the supersedence law permits a town only to tax oil & gas and regulate traffic, via road use agreements, as a proof that such exceptions prove that a town cannot apply its zoning laws – only taxation and road use agreements. But those local regulatory exceptions presume that the activity is allowed in the town in the first place. If the town prohibits the activity, those regulatory exceptions are irrelevant.
Zoning is not listed as one of the exceptions for a town to regulate oil and gas activities, because unlike the local gas tax and the local road use regulations, zoning does not regulate such activities, it regulates land uses.
If a town does not preclude oil and gas drilling, then any ordinance (with two exceptions) that might be construed to regulate the activity – such as a noise ordinance or curfew – would be unenforceable under the DEC’s preemption. And with what rules and regulations would the DEC preempt local land use laws ? When they have no HVHF fracking rules and regulations.
West likewise misinterprets the industry proposed spacing unit regulations which apply to subterranean rights, mineral rights, not surface rights, implying that spacing unit requirements trump zoning when they do not apply to land (surface) use at all. The location of a well from some (but not all) structures is not in the well spacing regulations, it is in the proposed dSGEIS and the proposed fracking regulations. He implied that the proposed dSGEIS and proposed fracking regulations trump all zoning – even though the regulations only exist in draft form. Which again begs the question: If the DEC supposedly can override land use laws, where was the Attorney Generals’s amicus curiae to that effect ?
The Chief Justice’s concluded that if the legislature wants to specifically preempt zoning, they can amend the law.
Scott Kurkoski for Cooperstown Holstein, Inc.
Scott Kurkoski starts off by alleging that the plaintiff did not intend to frack the well. (?) The Chief Justice cuts him off. Kurkoski then completely misconstrued how compulsory integration (CI) would be impacted by a ban – because CI deals with mineral (subterranean) rights, not surface (land use) rights. So a town ban might disallow a well site, but not preclude CI if the well pad was located in a town that permitted oil and gas drilling.
He lapses into political bombast and then agrees with the judges that the legislature can clarify the matter as they did in Frew Run. And goes into the proposed language of the dSGEIS, etc. And is questioned as to why there is a moratorium if there is such an energy crisis in New York. He tries to distinguish Middlefield from Frew Run since there was no “gravel crisis.” He goes back to West’s arguments that the two exceptions to tax and regulate roads somehow imply that zoning is not allowed by the statute. (When those two exceptions only come into play if oil and gas is allowed by zoning.)
Like West, Kurkoski is suing the agency that is supposed to be able to preempt zoning– with non-existent fracking regulations that Kurkoski says preempt local land use laws. The DEC”s gas well regulations have not been updated since 1992 – before high volume fracking began. None of the 1992 regulations are applicable to shale gas industrialization.
Kurkoski basically admits that the supersedence language is, at best, not clear, and could be clarified by the legislature.
Deborah Goldberg for Dryden
She makes it clear from the outset that the law supersedes the town’s ability to make laws that “relate to the regulation” of oil and gas drilling, which is regulation of an activity, but does not preclude them from prohibiting (not regulating) such activities under their zoning laws, which is the regulation of a land use: “There’s a distinction between regulation of business and regulation of land use.”
What she bobbles are the two exceptions permitted the towns : taxation and road use – agreeing that the law “overlooked” zoning as an exception, then starts talking about ordinances in Oklahoma (?). But she overlooked the fact that those exceptions would only apply if the activity is a permitted land use in the town. An oversight that John Henry corrects.
She made the point that no state with Home Rule, where local zoning controls, has stopped the production of oil and gas. Other Home Rule states, such as Texas, apply zoning ordinances to oil and gas, but this has hardly shut down fracking in those states. So the notion that town bans will kill oil and gas in New York is a scare tactic; in fact none of the towns where there is shale gas potential have passed bans.
She also made it clear that if the legislature wanted to forbid municipalities from prohibiting oil and gas development, they would have made that prohibition explicit. That the Dryden case, including the decision of the Court of Appeals, parallels that of Frew Run.
She made it clear that the prohibition was against heavy industry, not just fracking per se: “Both of these towns have long-standing zoning codes that do not permit any industrial activity. This isn’t aimed at the oil and gas industry. What they’ve trying to do is clarify what the rules have been all along.”
She addresses the notion of waste in the context of well spacing, which applies to conventional wells, not horizontal drilling, and is a non-issue for land use regulations, since well spacing is a function of subterranean rights, not surface uses.
She made the point that the town ordinance addresses land use – the siting of a well. It could not stop a horizontal lateral from outside the town. And that Compulsory Integration of a horizontal well (from a town that does not prohibit) would not impact the surface uses in a town that banned such land uses.
John J Henry for Middlefield
John J Henry went to some lengths to point out that the two municipal powers addressed in the supersedence language – the power to tax oil and gas wells and the power to regulate trucking – both assume that the municipality has permitted oil and gas, and so they are allowed by the state in order to regulate that activity at the local level with the unique local taxation of oil and gas wells based on their production and the municipality’s unique right to have local road use agreements with frackers (the state does not tax gas production, nor can it enter into road use agreements with frackers). Both local exceptions assume that that fracking is allowed as a land use – so that the town can regulate those two aspects of it. If fracking is a prohibited land use by the zoning ordinance, then those local regulatory powers are irrelevant.
He also pointed out that the town’s ordinance prohibited all heavy industrial land use, not just fracking. And that the state has not explicitly denied towns the right to prohibit zoning. That when the legislature wants to preempt local zoning, it has always enacted a specific siting mechanism – to serve in lieu of zoning.
Judge Smith questioned Mr. Henry about the Enviro Gas case where a town oil and gas ordinance that required a local fee to the town was struck down; Henry agreed with the decision, pointing out that the ordinance had the effect of regulating the activity, not prohibiting it as a land use. For a town’s law to be declared invalid, “it has to be a local law relating to the regulation of an industry,” he told the judges. “This court has consistently held that zoning law is not a law relating to the industry, whether it’s mining, whether it’s alcohol.”
Tom West started to make a little speech about how horizontal fracking of shale is “just the same” as conventional drilling, which no one in the courtroom believed, and Judge Rivera interrupted him, incredulous that he could say they were the same.
He claimed that “No one is going to invest millions when you can be blocked by a 3-2 vote on a town board,” apparently referring to Dallas. He claimed that “It (Home Rule) has a very chilling effect because it’s very hard for operators to justify spending hundreds of millions of dollars to come in and not have regulatory certainty.” But Justice Abdus-Salaam asked him why Home Rule has not stopped oil and gas production in other (Home Rule) states where oil and gas production is significant (Texas, Oklahoma, Illinois, Kansas, New Mexico, Louisiana, California) – and he had no direct answer, he simply mumbled that he was aware of the other states’ ordinances, and that the locals and drillers “work things out” again apparently referring to Dallas, which has a de facto ban on fracking.
Scott Kurkoski pointed out that the Middlefield law did address subsurface uses, namely gas gathering systems (which can be on the surface), but which are not the same as the subterranean mineral rights of spacing units.
He tried to conclude with a Fracking Propaganda Informercial but was cut off by Judge Rivera – as being irrelevant to the case. Then Kurkoski started complaining about Obama’s power plant regulations (?) and Chief Judge Jonathan Lippman stopped him, saying that he understands that some groups want to promote oil and gas development, but said, “There’s a flip side to that argument, which is, don’t bulldoze over the voice of the people in individual municipalities who want to be heard about how they live their lives.” Chief Judge Lippman then restated the obvious – regardless of how the court rules, the loser can look to the Legislature for redress.
“On the one hand, you’re saying yes, we should have a comprehensive strategy to deal with such an important issue to our state – energy,” Chief Judge Jonathan Lippman said. “And on the other hand, municipalities believe (they can) determine how they’re going to live. They want some voice in how they live.”
They also don’t want to have to put up with frivolous lawsuits from shale shysters.
The Helen interviewed after the orals:
Some press –