Shale Daily / Northeast

New York AG Seeks Dismissal of Second Frack Delay Lawsuit

For the second time in a month, the New York Attorney General's Office has filed a motion to have a lawsuit filed against Gov. Andrew Cuomo and others for the ongoing regulatory delay over high-volume hydraulic fracturing (HVHF) dismissed.

In February, the Joint Landowners Coalition of New York Inc. (JLCNY), which supports natural gas development, filed suit in Albany County Supreme Court against Cuomo, the state departments of Environmental Conservation (DEC) and Health and their commissioners, Joseph Martens and Nirav Shah, respectively (see Shale Daily, Feb. 18).

Other plaintiffs included the Kark Family Trust, LADTM LLC, and Schaefer Timber & Stone LLC, landowners whose properties were issued HVHF drilling permits but have been unable to proceed with development.

According to court records, assistant attorneys general Morgan Costello and Stephen Nagle said the lawsuit should be dismissed, arguing that the petitioners lack legal standing and have no clear legal right to mandamus relief, and that their claims for relief are barred by the statute of limitations and fail to show a cause for action.

On Feb. 21, Attorney General Eric Schneiderman filed a motion to have a separate lawsuit filed against Cuomo, Martens and Shah dismissed (see Shale Daily, March 7). The plaintiffs in that case are Mark Wallach -- a bankruptcy court-appointed trustee representing Norse Energy Corp. USA, a subsidiary of Norway's Norse Energy Corp. ASA -- and James Lobdell, a private investor in Norse's parent company who lost more than $20,000.

Oral arguments in both cases are scheduled for April 25 at 9:30 a.m.

"We knew that was going to be coming the minute that we filed it," JLCNY President Dan Fitzsimmons told NGI's Shale Daily on Monday. "We knew there would be a motion to dismiss. It's pretty much a standard thing that the other side is going to do. We're taking it very seriously, though, and we've been preparing for it. I think we're ready and I think we're going to do well."

JLCNY attorney Scott Kurkoski alleges the DEC failed to complete its non-discretionary duty to complete a supplemental generic environmental impact statement (SGEIS) on HVHF. He also said the DEC had failed to meet deadlines set forth in the State Environmental Quality Review Act and had run afoul of the state's official energy policy.

Meanwhile, in their lawsuit, Wallach and Lobdell are seeking an Article 78 proceeding, a provision of state law that can be used to challenge the actions of an administrative agency in court.

Norse Energy Corp. USA and Norse Energy Holdings Inc. entered Chapter 7 bankruptcy last October (see Shale Daily, Oct. 18, 2013). Norse holds oil and gas leases for about 130,000 net acres in the state's portion of the Marcellus and Utica shales. The lawsuit was filed to motivate the DEC to release an SGEIS on HVHF and give value to the leases as part of Norse's bankruptcy (see Shale Daily, July 31, 2013).

In September 2012, Martens asked Shah to conduct a health impact analysis of HVHF before the DEC completed a SGEIS (see Shale Daily, Sept. 24, 2012). The SGEIS was ordered in July 2008 by then-Gov. David Paterson, effectively placing a moratorium on drilling horizontal wells in New York.

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