Litigation over Ohio’s Dormant Mineral Act, R.C. 5301.56, (DMA) began as a trickle in 2012 and turned into a flood in 2014 that continues to confound mineral title attorneys and challenge judges. Questions about the DMA have all but paralyzed oil and gas companies still looking to acquire and develop mineral leases. Now all eyes are on the Ohio Supreme Court for guidance on myriad questions regarding the validity and application of the statute. This post provides an update of DMA appeals and issues pending before the Ohio Supreme Court to date.

Though the Ohio Supreme Court hasn’t yet issued any decisions related to DMA, that is about to change. The court has accepted five DMA cases for review — all accepted in 2014. These five cases present a total of 15 questions of DMA law. Only two of these cases (Dodd andBuell) have been argued, at least in part (the question accepted sua sponte in Dodd was not argued). The other cases have yet to be scheduled for oral argument. In addition, six more cases present another 20 questions of law that have been appealed to the Ohio Supreme Court but are not yet accepted for review.

The overlap between many of the cases and issues highlights the hottest current DMA issues. However, this list of questions and issues is far from complete. In hindsight, we may find that the wave of DMA litigation crested in 2014, but experienced oil and gas attorneys expect litigation surrounding the Dormant Mineral Act will continue for years as landowners and courts wrestle with unique fact scenarios and title transactions. But for now, any definitive guidance from the Ohio Supreme Court would be helpful. Following are cases, issues and questions of law appealed to the Ohio Supreme Court to date:

Cases and issues accepted by the Ohio Supreme Court

A. Phillip Dodd et al. v. John Croskey et al.
Case Number 2013-1730

Proposition of law (accepted 3/12/2014):

  1. Ohio Rev. Code § 5301.56(B)(1) requires a showing by a party claiming the preservation of a prior mineral interest of a “savings event” that occurred in the 20 years prior to the notice being served and not a “savings event” after the date of the notice being served.

Proposition on cross appeal accepted sua sponte (accepted 8/28/2014):

  1. Does a transfer of the surface that specifically references the severed mineral interest qualify as a “title transaction?”

B. Chesapeake Exploration, L.L.C., et al. v. Kenneth Buell et al.
Case Number 2014-0067 (certified questions accepted 3/26/2014)

Certified questions of state law:

  1. Is the recorded lease of a severed subsurface mineral estate a title transaction under the Ohio Dormant Mineral Act, Ohio Rev. Code § 5301.56(B)(3)(a)?
  2. Is the expiration of a recorded lease and the reversion of the rights granted under that lease a title transaction that restarts the 20-year forfeiture clock under the ODMA at the time of the reversion?

C. Hans Michael Corban v. Chesapeake Exploration, L.L.C., et al.
Case Number 2014-0804 (certified questions accepted 7/23/2014)

Certified questions of state law:

  1. Does the 2006 version of the 1989 version of the ODMA apply to claims asserted after 2006 alleging that the rights to oil, gas and other minerals automatically vested in the surface land holder prior to the 2006 amendments as a result of abandonment?
  2. Is the payment of a delay rental during the primary term of an oil and gas lease a title transaction and “savings event” under the ODMA?

D. Jon Walker, Jr. v. Patricia J. Shondrick-Nau, Executrix of the Estate of John R. Noon and Successor Trustee of the John R. Noon Trust
Case Number 2014-0803 (Accepted 9/3/2014)

Propositions of law:

  1. The 2006 version of the DMA is the only version of the DMA to be applied after June 30, 2006, the effective date of said statute.
  2. To establish a mineral interest as “deemed abandoned” under the 1989 version of the DMA, the surface owner must have taken some action to establish abandonment prior to June 30, 2006. In all cases where a surface owner failed to take such action, only the 2006 version of the DMA can be used to obtain relief.
  3. To the extent the 1989 version of the DMA remains applicable, the 20-year look-back period shall be calculated starting on the date a complaint is filed which first raises a claim under the 1989 version of the DMA.
  4. For purposes of Ohio Rev. Code § 5301.56(B)(3), a severed oil and gas mineral interest is the “subject of” any title transaction which specifically identifies the recorded document creating that interest by volume and page number, regardless of whether the severed mineral interest is actually transferred or reserved.
  5. Irrespective of the savings events in Ohio Rev. Code § 5301.56(B)(3), the limitations in Ohio Rev. Code § 5301.49 can separately bar a claim under the DMA.
  6. The 2006 version of the DMA applies retroactively to severed mineral interests created prior to its effective date.

E. Jay HouseHolder, Sr. et al. v. Dan Swartz et al.
Case Number 2014-1208 (Accepted 11/19/2014)

Propositions of law:

  1. The 1989 version of the Dormant Mineral Act does not apply after the effective date of the 2006 version of the Dormant Mineral Act.
  2. In order for a mineral interest to vest under the 1989 version of the Dormant Mineral Act, the surface owner must take some action in order to establish abandonment prior to the effective date of the 2006 Dormant Mineral Act.
  3. The 2006 DMA Operates Retrospectively and Applies to Severed Mineral Interests Created Before its Effective Date.

Note: Though this appeal was accepted, the court sua sponte ordered it to be held in abeyance and stayed briefing pending a decision in Walker v. Shondrick-Nau.

Cases and issues appealed to Ohio Supreme Court but not yet accepted

A. Ronald Dahlgren, et al. v. Brown Farm Properties LLC, et al.
Case Number 2014-1655

Dahlgren propositions of law:

  1. The 2006 amendment of Ohio’s “dormant mineral” statute was remedial in nature and intended to apply to facts occurring before its enactment. In suits filed after June 30, 2006 (the effective date of the amendment), courts should apply the new version of the statute, rather than the old version.
  2. Under the 1989 version of Ohio’s “dormant mineral” statute, the 20-year dormancy period is measured from the date suit was commenced to determine title to the minerals.

Chesapeake propositions of law:

  1. The 2006 version of R.C. 5301.56 controls in the ODMA proceedings and quiet title action initiated by Plaintiff after 2006.
  2. The 1989 version of the ODMA does not provide for an “automatic” transfer of mineral rights from record holders to surface owners.
  3. The 2006 version of the DMA applies retrospectively to severed mineral interests created prior to its effective date.

B. Leland Eisenbarth, et al. v. Dean Reusser, et al.
Case Number 2014-1767

Propositions of law:

  1. The 1989 version of DMA was prospective in nature and operated to have a severed oil and gas interests “deemed abandoned and vested in the owner of the surface” if none of the savings events enumerated in Ohio Rev. Code § 5301.56(B) occurred in the 20-year period immediately preceding any date in which the 1989 DMA was in effect.
  2. Assuming, arguendo, that the 1989 DMA operated on a “fixed” 20-year look-back period from the date of enactment, an oil and gas lease is not a “title transaction” within the meaning of Ohio Rev. Code § 5301.47(F) and Appellees’ interest has nonetheless been abandoned.

C. Benjamin Taylor, et al. v. Donald Crosby et al.
Case Number 2014-1886

Proposition of law:

  1. The 1989 DMA is prospective in nature and operates using a rolling application of the phrase, “preceding twenty years.”

D. Virgil Farnsworth, et al. v. James Burkhart, et al.
Case Number 2014-1909

Propositions of law:

  1. The 1989 version of R.C. § 5301.56, the Ohio Dormant Minerals Act (“Former DMA”), was prospective in nature; division (B) applies to any 20-year period that elapses while the Former DMA was in effect.
  2. A Claim to Preserve filed and recorded under division H(1)(A) of the current version of R.C. § 5301.56 (“Current DMA”) does not have the same effect as a claim filed and recorded under division B(3)(e) of the Current DMA.

E. Vernon Tribett, et al. v. Barbara Shepherd, et al.
Case Number 2014-1966

Propositions of law:

  1. The 2006 version of the DMA is the only version of the DMA to be applied after June 30, 2006 (the effective date of said statute) because the 1989 version of the DMA was not self-executing.
  2. To establish a mineral interest as “deemed abandoned” under the 1989 version of the DMA, the surface owner must have taken some action to establish abandonment prior to June 30, 2006. In all cases where a surface owner failed to take such action, only the 2006 version of the DMA can be used to obtain relief.
  3. Interpreting the 1989 version of the DMA as “self-executing” violates the Ohio Constitution.
  4. A severed oil and gas mineral interest is the “subject of” any title transaction which specifically identifies the recorded document creating that interest by volume and page number.
  5. Irrespective of the savings events in Ohio Rev. Code § 5301.53(B)(3), the limitations in Ohio Rev. Code § 5301.49 can independently bar a claim under the DMA.
  6. If a court applies the 1989 version of the DMA in a lawsuit filed after June 30, 2006, the 20-year look-back period shall be calculated starting on the date a complaint is filed which first raises a claim under the 1989 version of the DMA.
  7. A claim brought under the 1989 version of the DMA must have been filed within 21 years of March 22, 1989 (or, at the very latest, March 22, 1992), or such claim is barred by the statute of limitations in Ohio Rev. Code § 2305.04

F. Christopher Wendt, et al. v. Constance Clark, et. al.
Case Number 2014-2051

Propositions of law:

  1. The 2006 version of the Ohio Dormant Minerals Act controls the vesting of title in a surface owner who did not make a claim for the mineral interests before the 2006 enactment.
  2. The 1989 version of the ODMA did not provide mineral owners with the due process of law required under the state and federal constitution.
  3. The ODMA is not now and never was self-executing.