Ohio court strikes down local drilling ban

On March 10, 2015, a Cuyahoga County trial court struck down a local ban on oil and gas development. See Bass Energy, Inc. v. Broadview Heights, Slip Opinion No. CV-14-828074 (Cuyahoga Cnty. Ct. Mar. 10, 2015). This decision comes less than a month after the Ohio Supreme Court struck down a neighboring city’s ordinance which restricted oil and gas development. See State ex rel. Morrison v. Beck Energy Corp, Slip Opinion No. 2015-Ohio-485 (Feb. 17, 2015). Review Norton Rose Fulbright’s previous discussion of the Morrison decision.

On November 06, 2012, voters in Broadview Heights, a suburb of Akron, amended the city’s charter to include a “Community Bill of Rights” (the “Amendment”) that prohibited any future oil and gas drilling within the city. An exploration and production company obtained a drilling permit from the Ohio Department of Natural Resources (ODNR) for a well within the city but was told that the city would enforce the Amendment. Therefore, the exploration and production company challenged the city’s ban, arguing that the Amendment was preempted by Ohio Revised Code Chapter 1509, which, among other things, established the ODNR as the “sole and exclusive authority” to regulate the permitting, locating, and spacing of oil and gas wells in Ohio. Judge Michael Astrab agreed, writing “reasonable minds could come to only one conclusion: [the Amendment] is preempted by [Chapter 1509].”

The court’s decision closely tracked the Ohio Supreme Court’s opinion in Morrison. Under Ohio law, a municipal ordinance is preempted by a state statute if:

1. the ordinance is an exercise of police power, rather than of local self-government;
2. the statute is a general law; and
3. the ordinance is in conflict with the statute.

Judge Astrab determined that all three elements were satisfied and, therefore, the Amendment was preempted. First, the Amendment clearly was an exercise of police power because the city was trying to protect the “public health” and “general welfare of the public.” Second, the Ohio Supreme Court explicitly found that Chapter 1509 was a general law. Finally, the Amendment directly conflicted with Chapter 1509 because it prohibited an activity permitted by the State. Thus, the court declared the Amendment unenforceable.

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This post was written by Joshua Snyder (joshua.snyder@nortonrosefulbright.com or +1 724 416 0432), Jeremy Mercer (jeremy.mercer@nortonrosefulbright.com or +1 724 416 0440) and Michael Gaetani (michael.gaetani@nortonrosefulbright.com or +1 724 416 0429) from Norton Rose Fulbright's Energy Practice Group.