On March 11, 2015, the Cuyahoga County Court of Common Pleas issued an Opinion and Judgment Entry in Bass Energy, Inc. v. City of Broadview Heights, Ohio, ruling that a local ordinance prohibiting new oil and gas drilling is pre-empted by Ohio Revised Code Chapter 1509.
In the wake of the Utica Shale boom, several Ohio communities have passed local ordinances banning oil and gas development within city limits. Like the cities of Athens and Bowling Green, the city of Broadview Heights passed an amendment (Article XV) to the city’s Charter in 2012, prohibiting any new oil or gas drilling within city limits and prohibiting the storage or transportation of oil and gas well waste water through the city.
Prior to the passage of the Article XV, Bass Energy, Inc. and Ohio Valley Energy Systems Corp. (known further on as the “Plaintiffs”) executed an oil and gas lease with the St. Sava Serbian Eastern Orthodox Church of Cleveland, which owns approximately 100 acres of land in Broadview Heights. Plaintiffs then obtained drilling permits from the Ohio Department of Natural Resources (ODNR) and drilled and operated three wells on the property. After the passage of Article XV, Plaintiffs’ plans to drill a newly permitted well were halted.
On June 10, 2014, Plaintiffs filed suit in the Cuyahoga County Court of Common Pleas seeking declaratory judgment that Article XV directly conflicted with Ohio Revised Code Chapter 1509 and thus, was invalid as a matter of law.
Revised Code 1509 grants the ODNR the sole, exclusive authority to regulate the drilling and operation of oil and gas wells in Ohio. Plaintiffs argued, while the Home Rule Amendment to the Ohio Constitution grants municipalities authority to “exercise all powers of local self-government and to adopt and enforced within their limits,” municipalities do not have authority to obstruct oil and gas activities and operations the state has permitted under Chapter 1509 of the Revised Code.
The Cuyahoga Common Pleas Court agreed, and citing the Ohio Supreme Court’s recent decision in State ex rel. Morrison v. Beck Energy Corp., Slip Opinion No. 2015-Ohio-485 (Feb. 17, 2015), held:
[T]he Court finds that Article XV’s ban on new or expanding drilling of oil and gas wells conflicts with R.C. 1509’s state regulatory scheme. It is clear in this case that the “ordinance prohibits that which the statute permits” because Article XV attempts to prohibit Plaintiffs from oil and gas drilling activities which ODNR has expressly allowed them to perform pursuant to R.C. 1509…
[T]he court holds that Article XV is an invalid exercise of Broadview Heights’ home rule authority and is preempted by R.C. Chapter 1509 as a matter of law.
In reaching its decision, the Cuyahoga County Court granted Plaintiffs’ request for declaratory judgment that the city of Broadview Heights had no authority to prevent drilling of the newly permitted well and entered an Order enjoining the city from preventing Plaintiffs from exercising their rights pursuant to their ODNR drilling permits.