Supreme Court Ruling Leaves Door Open to Local Regulation of Oil & Gas Development

Supreme Court Ruling Leaves Door Open to Local Regulation of Oil & Gas Development

A majority of the Ohio Supreme Court, including Justices French, O’Connor, Kennedy and O’Donnell, appear to have ruled in favor of the oil and gas industry, striking down application of five Munroe Falls ordinances that the Court says conflict with ODNR regulations.

But not so fast! In the last paragraph of its majority opinion, the Court leaves wide open the door to possible broad local regulation of oil and gas development. And Judge O’Donnell, the apparent “swing vote,” in his concurring opinion takes great pains to clarify that that the decision only applies to the five specific Munroe Falls ordinances at issue.

Justice O’Donnell states:

  •  “This appeal does not present the question whether R.C.1509.02 conflicts with local land use ordinances that address only the traditional concerns of zoning laws, such as insuring compatibility with local neighborhoods, preserving property values, or effectuating a municipality’s long-term plan for development, by limiting oil and gas wells to certain zoning districts without imposing a separate permitting regime applicable only to oil and gas drilling. Thus, in my view, it remains to be decided whether the General Assembly intended to wholly supplant all local zoning ordinances limiting land uses to certain zoning districts without regulating the details of oil and gas drilling expressly addressed by R.C. Chapter 1509.”

The three dissenting justices, Pfeifer, Lanzinger and O’Neill, emphatically disagree with the majority. Justice O’Neill states:

  •  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.

Four of the seven Justices appear to approvingly refer to recent precedent in New York, Pennsylvania and Colorado that allow local zoning regulation of oil and gas development.

Thus, four of the seven justices who heard this case appear to adamantly maintain that state preemption does not apply to local zoning generally, and the whole Court seems to agree that the application of ODNR preemption to local zoning in Ohio remains an open question.

So the preemption battle will rage on. Undoubtedly Ohio municipalities will be flexing their muscles and push the issue. And the oil and gas industry has little to gloat over.

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Alan D. Wenger is an oil & gas lawyer in Youngstown, Ohio, and chair of the Oil & Gas Law Practice Group at HHM.