Shale Daily / NGI All News Access

Arkansas High Court Upholds Dismissal of Gas Lease Lawsuit

The Supreme Court of Arkansas on Thursday upheld a lower court ruling dismissing a lawsuit against the Arkansas Game and Fish Commission (AGFC) for leasing thousands of state-protected wildlife acres in the Fayetteville Shale for gas exploration.

James Dockery had argued that the AGFC did not have the authority to conclude a $32 million lease agreement with Chesapeake Energy Corp. in 2008. Under the lease, the Oklahoma City-based company was given drilling rights to more than 7,500 acres in the Petit Jean River Wildlife Management Area and about 4,000 acres in the Gulf Mountain Wildlife Management Area (see Daily GPI, July 30, 2008). He also sought to have the lease revenue deposited in the state's general fund rather than have the money going directly to funding for the wildlife agency.

"Without specificity, [Dockery] failed to allege how the [commission's] actions of leasing mineral rights to private companies constituted an unlawful action or how any third party drilling created a detrimental impact on the commission's lands," Associate Justice Courtney Hudson Henry said of the decision in Case No. 10-651, Dockery v. Morgan et al.

"It is what it is," Dockery, who is retired and had filed the lawsuit as a private citizen, told NGI's Shale Daily on Friday. "Unfortunately it's been decided on the wrong issues in my opinion, but that's a legal interpretation."

According to court records, AGFC deposited the $32 million from Chesapeake into the Game Protection Fund of the state treasury, and the legislature subsequently appropriated those funds to the commission. Dockery filed suit in Pulaski County Circuit Court on Feb. 25, 2009 and had sought to have the lease revenue deposited to the state's general fund. The circuit court dismissed the lawsuit on March 4, 2010.

"We are in negotiations with the state Department of Environmental Quality [DEQ] in granting them funds to hire additional inspectors for the Fayetteville Shale area," AGFC spokeswoman Nancy Ledbetter told NGI's Shale Daily on Thursday. She said the commission was considering giving the DEQ $500,000 for each of two fiscal years.

ISSN © 2577-9877 | ISSN © 2158-8023
Comments powered by Disqus