Major WV Court Case Goes Against Surface Landowners

court gavelA major court case before the West Virginia Supreme Court was decided last week, and the decision is not favorable to surface rights landowners. MDN previously alerted you to the case as it went to court back in September (see this MDN story). In brief, in WV the sub-surface mineral rights in many cases were severed and sold separately from the surface landowner rights—years ago. Surface rights landowners understand that mineral rights owners (and drillers) need access, but they want the right to have a say in where a drilling pad will be located on their property—and just compensation for taking the property for that purpose.

The WV Supreme Court decided last week (a copy of the decision is embedded below) that surface rights landowners cannot challenge WV DEP permits for drill pads, and where the pads are located, on their property:

Thanks to a decision last week by the West Virginia Supreme Court of Appeals, surface owners will continue to have little, if any, say in how and where natural gas wells are positioned on their land. The high court determined surface owners do not have the right to appeal drilling permits issued by the West Virginia Department of Environmental Protection.

“We understand our rights are limited but do not believe they are so limited as to deprive us of all the due process rights property owners should have,” said Dave McMahon, founder of the West Virginia Surface Owners’ Rights Organization. “Surface owners are very disappointed, but we will not give up.”

Many who live in West Virginia – and some who live in Ohio – may own the surface of the property on which their home sits, while someone who lives in a completely different area of the country owns the coal, oil and natural gas under the surface. This can cause problems for everyone because the mineral owner and the gas company have the right to extract the minerals – and can do so without much regard for the desires of the surface owner.

Industry leaders hailed the high court’s decision, as West Virginia energy law attorneys Bridget D. Furbee and Armando F. Benincasa said the action would end industry concerns by eliminating “the possibility of delays by surface owners for otherwise lawful drilling permits.”

“The decision ends significant concerns within the industry that if surface owners were granted appeal rights that future permitting in the state would be greatly impeded if not halted in some instances,” Furbee and Benincasa wrote in their explanation of how the ruling would impact drilling in West Virginia.

The case originated from a conflict in Doddridge County involving EQT Corp.’s efforts to drill gas wells there. Once EQT filed for DEP permits to drill, surface owner Matthew Hamblet filed objection comments with the DEP. After the DEP issued the permits anyway, Hamblet sought relief from the Doddridge County Circuit Court.

The high court’s decision, authored by Justice Margaret Workman, states, “Here, EQT has a legally binding lease that grants it explicit rights of access to the oil and gas underlying Mr. Hamblet’s property.”

She adds that the court finds no provision in state law that gives a surface owner the right to appeal DEP drilling permits.

Workman wrote that the high court “urges the Legislature to re-examine this issue and reconsider whether surface owners should be afforded an administrative appeal under these circumstances.”

Although surface owners lost out on this case, McMahon said the fight continues.

“We continue to hope that in the long run, our state will not make all the mistakes with the Marcellus Shale that it did with coal and will continue to work toward that goal,” he said.(1)

The Supreme Court justices appear to be sensitive to the issue of surface rights owners, but felt constrained by the law itself and the way the law is written. As part of their written opinion, the justices encouraged the WV State Legislature to consider amending the law to allow surface rights owners more say:

The West Virginia Supreme Court is urging lawmakers to reconsider whether surface landowners in the state should have the right to appeal when oil and gas drilling permits are issued for their land.

The suggestion was included as part of a new court ruling concluding that current state law does not give appeal rights to surface property owners who don’t also hold title to oil and gas reserves buried underground.

Justice Margaret Workman, writing for a unanimous court, noted that current laws on drilling permit appeals were written prior to the “extensive development of the Marcellus Shale in this state.”

“This court urges the Legislature to re-examine this issue and consider whether surface owners should be afforded an administrative appeal under these circumstances,” Workman said in the court’s 23-page opinion.(2)

MDN’s view: As we’ve said many times before, we’re not lawyers—we just use common sense. And common sense says to us that drillers should work closely with surface rights owners to accommodate them if at all possible—and certainly to compensate them for taking their land. That’s only fair and just. This decision by the WV Supreme Court, while it may be good jurisprudence, is not fair and just for surface landowners. Hopefully the WV legislature will heed Justice Workman’s words and remedy the situation.

(1) Wheeling (WV) The Intelligencer/Wheeling News-Register (Nov 27, 2012) – Surface Owners Have No Say

(2) Charleston (WV) Gazette (Nov 26, 2012) – Court suggests lawmakers revisit appeals of drilling permits

The official opinion from the WV Supreme Court in Case #11-1157 – James Martin, et al. v. Matthew L. Hamblet: