Recent Hydrofracking Cases Could be Heard by State Appellate Courts in Coming Months

By Russell E. Maines

Two recent state court rulings have determined that municipalities may enact zoning laws that prohibit natural gas “hydrofracking” without running afoul of state laws that preempt (i.e., trump) local regulation of natural gas exploration.  A February 21, 2012 judgment by Supreme Court Justice Phillip R. Rumsey in Anschutz Exploration Corporation v. Town of Dryden et ano. (Tompkins County Index No. 11-0902) upheld a town of Dryden zoning ordinance that banned all activities relating to the exploration for, and production or storage of natural gas and petroleum.  Three days later, on February 24, Acting Supreme Court Justice Donald F. Cerio, Jr. reached the same result in Cooperstown Holstein Corporation v. Town of Middlefield (Otsego County Index No. 2011-0930).

The Anschutz and Cooperstown decisions emphasized different state laws to reach their conclusions. In Anschutz, the court considered whether the state Oil, Gas and Solution Mining Law (OGSML), preempts local laws relating to zoning.  At issue was language in OGMSL enacted in 1981 which provides that state laws supersede “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries.” The town of Dryden argued that the 2011 zoning amendment was a zoning law, hence only governing land use, and was not preempted. The petitioner-plaintiff argued that the broad language of the OGSML’s preemption of “local laws or ordinances” encompassed zoning regulations.  The court’s analysis focused on a 1987 Court of Appeals case, Matter of Frew Run Gravel Products v. Town of Carroll, held that a state mining law that superseded “all other state and local laws relating to the extractive mining industry” did not preempt a local zoning law. The Anschutz decision, however, held unlawful a provision of the Dryden zoning ordinance that invalidated permits issued in violation of the ordinance.  The court held that an opponent of such permits would have to resort to existing state law to challenge them.

In the Cooperstown decision, Justice Cerio considered whether New York State Environmental Conservation Law (ECL) Section 23-0303(2), which “supercede[s] all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries” preempts a 2011 Town of Middlefield zoning law that prohibits oil and gas exploration and drilling.  The decision focused heavily on the statutory language of the 1981 amendments to the ECL, as well as precursors from 1978 and 1963. Justice Cerio concluded that “[t]here is no language contained within the legislative history which serves to support plaintiff’s claim that the supersession clause [in the ECL] was intended to impact, let alone diminish or eliminate, a local municipalities right to enact legislation pertaining to land use.”

Given the widespread state interest in the Anschutz and Cooperstown cases, it is likely that the issue will be heard by the state appellate courts in coming months.