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New York Judge Dismisses Frack Delay Lawsuits; Appeal 'Very Likely'

A judge in New York State dismissed two lawsuits filed against Gov. Andrew Cuomo and other officials over the ongoing regulatory delay for considering high-volume hydraulic fracturing (HVHF), on the grounds that the plaintiffs in both cases do not have proper legal standing.

Supreme Court Justice Roger McDonough ruled Friday that the plaintiffs in both cases -- Wallach v. NYS DEC [Index No. 6770] and Joint Landowners v. Cuomo [Index No. 843] -- "have not alleged that they will suffer any form of environmental harm" from the supplemental generic environmental impact statement (SGEIS) review process over HVHF.

"The three claims in the petition/complaint, and all of the petitioners' other submissions, make clear that the potential injuries are solely economic in nature," McDonough said in near identical rulings in both cases. "Indeed, the entire focus of the submissions is upon petitioners' inability to realize royalties and economic benefits from the use of HVHF in the development of their mineral estates.

"Accordingly, as petitioners have failed to allege any environmental harm, this court is constrained to dismiss this matter based upon lack of standing."

Last year, Mark Wallach and James Lobdell sued Cuomo, Department of Environmental Conservation (DEC) Commissioner Joseph Martens and Department of Health (DOH) Commissioner Nirav Shah (see Shale Daily, Nov. 25, 2013). Wallach is a bankruptcy court-appointed trustee representing Norse Energy Corp. USA, a subsidiary of Norway's Norse Energy Corp. ASA, while Lobdell is a private investor in Norse's parent company who lost more than $20,000.

In February, the Joint Landowners Coalition of New York Inc. (JLCNY), which supports natural gas development, sued Cuomo, Martens, Shah, the DEC and the DOH (see Shale Daily, Feb. 18). Other plaintiffs included the Kark Family Trust, LADTM LLC, and Schaefer Timber & Stone LLC, landowners with HVHF drilling permits but who are unable to proceed with development.

The plaintiffs in both cases were seeking an Article 78 proceeding, a provision of state law that can be used to challenge the actions of an administrative agency in court.

Scott Kurkoski, an attorney with the law firm Levene Gouldin & Thompson LLP representing the JLCNY, said attorneys and Mountain States Legal Foundation were reviewing McDonough's ruling.

"We are very likely to appeal," Kurkoski told NGI's Shale Daily on Tuesday. "Our concern is that the judge is saying that no one has standing to challenge the state in the preparation of the SGEIS. That cannot be correct. The landowners have fundamental property rights and they have been affected by the state. These landowners deserve to be heard."

JLCNY President Dan Fitzsimmons concurred.

"If we don't have standing, then who does?" Fitzsimmons said in a statement Monday. "These cases involved Norse Energy, a company with pending drilling permits driven into bankruptcy by New York's anti-business environment; landowners who only owned the subsurface oil and gas rights to their properties; and the JLCNY which represents 70,000 landowners whose mission is 'to foster, promote, advance, and protect the common interest of the people as it pertains to natural gas development through education and best environmental practices.'

"The court effectively ruled that no one has standing to challenge the state."

New York Attorney General Eric Schneiderman, who had sought dismissal of the two lawsuits, praised McDonough's ruling (see Shale Daily, March 31; March 7).

"The court's decision to allow the state review of hydrofracking risks to continue is an important victory in our effort to ensure all New Yorkers have safe water to drink and a clean, healthy environment," Schneiderman said Monday. "New Yorkers are rightly concerned about studies showing the environmental risks associated with hydrofracking.

"We should not allow hydrofracking to begin in New York until the DOH completes its analysis of its impact on public health. Given the risks of contamination to wells and the aquifer that supplies drinking water to many New Yorkers, we need to make sure we can safeguard our water before we move forward."

In September 2012, Martens asked Shah to conduct a health impact analysis of HVHF before the DEC completed an 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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