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Ohio 'Home Rule' Case Moves Forward at State Supreme Court

A court case to decide the fate of local ordinances, or "home rule" laws, in the emerging Utica Shale is advancing before the Supreme Court of Ohio.

Last June, the high court agreed to hear the dispute between the City of Munroe Falls and Beck Energy Corp. (see Shale Daily, June 24).

Thomas Houlihan, lead attorney for the plaintiffs and a member of the Akron, OH-based firm Amer Cunningham Co. LPA, said the case -- State of Ohio ex rel. Jack Morrison Jr., Law Director City of Munroe Falls, Ohio, et al. v. Beck Energy Corp. et al. (No. 2013-0465) -- was currently in the briefing phase.

At issue is whether state laws regulating the oil and gas industry preempt local ordinances.

"It's only important to municipalities in about half the state of Ohio, because that's where paying quantities of oil and gas are found," Houlihan said of the case on Monday. "In municipalities where they're not sitting on top of the shale formations, they probably couldn't care less.

"That's part of the problem we have. The treatment of oil and gas drilling is being mandated from Columbus as a statewide concern, when really it's something that should be dealt with at the local level, because the local authorities have different considerations."

Houlihan predicted that oral arguments could be heard in four to six months.

In 2011, Munroe Falls ordered Beck to stop work on a natural gas well and alleged that the company had violated several local ordinances. A lower court ruled in favor of the city, but the Ninth Appellate District Court sided with Beck in February and ordered a reversal (see Shale Daily, Feb. 8).

"People buy into these neighborhoods in order to be protected to some degree from their neighbors engaging in an industrial use of the property," Houlihan said. "If the state comes in and disrupts local authorities' zoning plans -- and forces industrial uses into zones that the municipality did not anticipate those uses to occur -- that will lead to a lot of disruption and concerns about property values."

John Keller, lead attorney for Beck and a member of the Columbus firm Vorys, Sater, Seymour and Pease LLP, could not be reached for comment Monday.

According to court records, the last document filed in the case was on Sept. 18, when Beck asked for an extension to file a merit brief until Oct. 28. The American Petroleum Institute (API) and the Ohio Chamber of Commerce filed motions for admission pro hac vice for four attorneys on Sept. 17; the high court granted the requests on Oct. 1.

Several grassroots organizations are lobbying the state government to grant local governments home rule powers, which they could then use to regulate oil and gas activities (see Shale Daily, Sept. 5, 2012). API and other industry groups are opposed to the idea.

Home rule is also being debated in New York and Pennsylvania. Last year in New York, the State Assembly considered bill A3245, which would empower localities to regulate oil and gas drilling and mining activities (see Shale Daily, Jan 10, 2012). Meanwhile, Pennsylvania's omnibus Marcellus Shale law, At 13, allotted revenue to local governments from an impact fee on unconventional gas wells in exchange for adopting state zoning rules (see Shale Daily, Feb. 15, 2012). That law has been challenged by municipalities which seek to receive impact fees, but make their own rules, and the case continues in court (see Shale Daily, Aug. 9).

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