In recent years, oil and gas companies have increasingly used hydraulic fracturing—known as “fracking”—to extract hard-to-reach deposits from mineral wells. Concern over this controversial technique has brought mining activities into the public spotlight and generated a significant amount of litigation. A number of important legal issues are now being addressed by the courts.
One recent case involved a municipal contract allowing a private company to extract mineral deposits from under a city park. A group of local activists challenged the contract on the grounds that it constituted a “sale” or “lease” of park land that required voter approval pursuant to state law and the city charter. In Don’t Drill the Hills v City of Rochester Hills, the Michigan Court of Appeals rejected those challenges, finding that mineral resources located under park land are distinct from the park itself.
Another pending case involves a local effort to regulate mining activities. In City of Southfield v Jordan Development Company, LLC, a circuit court recently dismissed a lawsuit that sought to enjoin mining activities that violated a city zoning ordinance and a city-wide moratorium on new drilling sites. The court specifically ruled that the city’s regulations were preempted by state law, which authorizes the Michigan Department of Environmental Quality to issue permits for oil and gas drilling. The city has appealed the circuit court’s ruling, which could result in a significant precedential decision on this issue.