Monday, July 23, 2012

Summary of Cooperstown Holstein Corporation v. Town of Middlefield

Over the past three years, state and local officials, business leaders, environmentalists, and the public in New York have been locked in a fractious and escalating debate about whether and how to allow high pressure high volume hydraulic  fracturing (known as “hydrofracking” or “fracking”), a method of drilling for natural gas, in New York.
Under the Environmental Conservation Law of the State of New York, the New York Department of Environmental Conservation (“DEC”) is the permitting agency for drilling operations and must study the potential environmental impacts of hydrofracking before finalizing its regulations. The DEC has released a revised Draft Supplemental Generic Environmental Impact Statement (“dSGEIS”) regarding hydrofracking. Until the environmental impact statement is final, there is a de facto moratorium on the issuance of drilling permits. In the meantime, the industry is laying the groundwork for obtaining permits by leasing land. 
Several towns in the Marcellus Shale region have taken affirmative action against hydrofracking in their communities by temporarily or permanently banning it within their borders. Proponents of hydrofracking have brought legal challenges against the towns of Dryden and Middlefield, which have permanently banned gas drilling through zoning; the plaintiffs assert that the towns lack legal authority to adopt such laws in light of preemptive language contained in the relevant language of the Environmental Conservation Law.   
The Town of Middlefield is a rural community which encompasses a portion of the Village of Cooperstown in Otsego County, New York. Its predominant land uses are agriculture, forest and low density residential. Concerned about its water supply and its community character, the Town hired a consultant to analyze the potential impacts of heavy industry on the Town and then amended its comprehensive plan and zoning law to prohibit heavy industry throughout the Town.  Heavy industry is broadly defined by its characteristics and includes “drilling of oil and gas wells” as well as chemical manufacturing, petroleum and coal processing and steel manufacturing.  The local law to amend the Town’s zoning was adopted on June 14, 2011.
  The Town of Middlefield’s law was challenged by Cooperstown Holstein Corporation (“Holstein”), a local dairy operation that has leased approximately 400 acres of its land for natural gas development.  In its complaint, Holstein claims that the Oil, Gas and Solution Mining Law of the State of New York (“OGSML”) preempted all local regulation of gas drilling, including the adoption of local zoning laws.
On February 24, 2012, Supreme Court Justice Donald F. Cerio issued a decision denying Holstein’s motion for summary judgment and granting summary judgment in favor of the Town of Middlefield, upholding the Town’s zoning law which banned natural gas drilling.  After thoroughly reviewing the legislative history of the OGSML, the court found no provision in it to support Holstein’s position, stating that
[N]either the plain reading of the statutory language nor the history of [the OGSML] would lead this court to conclude that the phrase ‘this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries’ was intended by the Legislature to abrogate the constitutional and statutory authority vested in local municipalities to enact legislation affecting land use.
            The court also relied on caselaw interpreting a “strikingly similar” provision of the state’s Mined Land Reclamation Law (“MLRL”), which found that “in the absence of a clear legislative intent to preempt local control over land use, the [MLRL] could not be read as preempting local zoning authority.”
            The Middlefield decision upholds the constitutional authority of municipalities to control the land uses within their borders through zoning.  Towns seeking to amend their zoning laws to regulate natural gas drilling activities should take care to limit such regulations to the location of such operations, and not the manner of such operations.

The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.

This article was prepared with John R. Nolon for a forthcoming article on the regulation of hydrofracking. Mr. Nolon is Professor of Law at Pace Law School, Counsel to the Land Use Law Center, and director of the Kheel Center for the Resolution of Environmental Interest Disputes. He has been a visiting professor at the Yale School of Forestry and Environmental Studies since 2001. 

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