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george-w-lithco-smallNew York’s highest court, the Court of Appeals, will consider whether lower courts correctly held that municipalities can ban the use of “hydrofracking” to develop natural gas wells.

The Court will hear appeals in two cases decided earlier this year by the Third Department, Matter of Norse Energy USA v. Town of Dryden, 108 AD3d 25 (2013) and Cooperstown Holstein v. Town of Middlefield,106 AD3d 1170 (2013).

The Appellate Division ruled in both the Dryden and Middlefield cases that the State’s Oil, Gas and Solution Mining Law did not preempt local governments from adopting laws that prohibit use of the controversial drilling technique, sustaining the dismissal of challenges to the bans enacted by those upstate towns.

Writing for a unanimous four judge panel, Presiding Justice Karen Peters found nothing in the state law or the legislative history of the OGS Mining Law “indicating an intention to usurp the authority traditionally delegated to municipalities to establish permissible and prohibited use of land within their jurisdictions.”

The Court of Appeals rarely hears cases which were unanimously decided by lower appellate courts, suggesting that the Court of Appeals believes there are noteworthy issues of statewide importance that should be addressed.

One reason may be that a large number of municipalities have adopted laws to bar the practice, citing concerns about the potential for groundwater contamination and air quality, while property owners and others believe the process could provide an important economic stimulus for upstate communities.

The Court of Appeals may believe that a ruling from the Court upholding these decisions could settle the basic legal issues and guide lower courts in resolving challenges, while sending a clear message to potential litigants that could reduce the likelihood of continuing challenges that drain municipal resources.

On the other hand, the Court may believe the Third Department erred in its preemption analysis. A fundamental element of the State’s GOS Mining Law is the creation of “pools” of drilling rights for private lands that do not necessarily follow municipal boundaries. Some property owners argue that when some municipalities choose to prohibit the practice while others don’t, the resulting patchwork of communities where hydrofracking is permitted and where it is not may not only frustrate those owners who want to lease their property, but the State’s policy of developing energy resources in an efficient and equitable manner.

It will be some time before we find out.

A spokesperson for the Court reportedly indicated oral arguments would likely to take place in May or June next year. In the interim, the law clerks await a flood of amicus briefs from advocates on both sides of the issue.

Source: Bloomberg, “Top N.Y. Court to Decide Whether Towns Can Ban Fracking,” Chris Dolmetsch, Aug. 29. 2013.

George W. Lithco is a partner on the Land Use/Environmental and Municipal Law Teams. He can be reached by phone at 845-778-2121 toll free or 845-778-2121 and by email.

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