Divided Ohio Supreme Court finds that state law preempts city ordinances regulating oil and gas drilling

by Gary Taylor

State ex rel. Morrison and the City of Munroe Falls v. Beck
Ohio Supreme Court, February 17, 2015

Beck Energy Corporation obtained a permit from the Ohio Department of Natural Resources to drill an oil and gas well on property within the corporate limits of the City of Munroe Falls. When Beck Energy began drilling, the City filed a complaint seeking injunctive relief and alleging that Beck Energy was violating several provisions of the Munroe Falls Codified Ordinances. These provisions included a zoning ordinance requirement for a zoning certificate for land disturbing activities within the city, and four ordinances directly relating to oil and gas wells and drilling. The trial court issued a permanent injunction prohibiting Beck Energy from drilling until it complied with all local ordinances. The Ohio Court of Appeals reversed the trial court, concluding that state law preempts local control over the permitting, location, and spacing of oil and gas wells and production operations within the state of Ohio.  Munroe Falls appealed to the Ohio Supreme Court.

In a 4-3 opinion, The Ohio Supreme Court affirmed, holding that the Home Rule Amendment does not grant the City the power to discriminate against, unfairly impede, or obstruct oil and gas activities and production operations that the State has permitted under chapter 1509.  Ohio R.C. 1509.02 gives state government “sole and exclusive authority” to regulate the permitting, location, and spacing of oil and gas wells and production operations within Ohio.  In 2004, the General Assembly amended Chapter 1509 to provide “uniform statewide regulation” of oil and gas production within Ohio and to repeal “all provisions of law that granted or alluded to the authority of local governments to adopt concurrent requirements with the state.” The majority of the Court found that the preemption clauses of R.C. 1509.02 clearly prevent local governments from imposing their own regulations on the oil and gas industry.

In his dissent, Justice Lanzinger countered that “the broad language of a preemption clause is not sufficient to create a conflict. We have never held that a preemption statement alone is sufficient to divest municipalities of their constitutional right to home rule. To the contrary, a declaration by the General Assembly of its intent to preempt a field of legislation ‘does not trump the constitutional authority of municipalities to enact legislation pursuant to the Home Rule Amendment, provided that the local legislation is not in conflict with general laws.'”  Justice Lanzinger pointed out that Chapter 1509 does not specifically preempt local zoning, and also argued that the local ordinances of Munroe Falls do not present specific conflicts with Chapter 1509.

Joining in Justice Lanzinger’s dissent, Justice O’Neill went on to write:
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.

 

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