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Holders of Mineral Rights Lose First Round, Appeal to Compel New York to Expedite Review of Proposed Hydraulic Fracturing Regulations

August 20, 2014

Author: Carl J. Pernicone

The Albany County Supreme Court dismissed a pair of suits – Wallach v. New York State Department of Environmental Conservation, et al. (No. 6773-2013) and Joint Landowners Coalition of New York, et al. v. Andrew M. Cuomo, et al. (No. 843-2014) – filed by representatives of landowners holding rights to oil and gas leases in New York. The plaintiffs sought to compel the state to complete its long-pending review of proposed regulations governing high-volume hydraulic fracturing.

Wallach was filed on behalf of the trustee in bankruptcy for Norse Energy – the holder of certain oil and gas rights on undeveloped land. The Joint Landownders suit was filed on behalf of a coalition of some 38 landowners holding untapped oil and gas leases in New York. The plaintiffs in both cases were seeking an order compelling the state to complete its  more than six-year review of proposed regulations governing so-called “high-volume hydraulic fracturing (HVHF).” In both cases, however, the court found that both plaintiffs lacked standing to pursue their suits because neither plaintiff alleged that it suffered any “environmental harm” from the state’s failure to finalize the HVHF review process; instead, the court ruled that they suffered only economic harm in the form of “unrealized royalties and economic benefits.” Based on this, the court concluded in both cases: “Accordingly, as petitioners have failed to allege any environmental harm, this Court is constrained to dismiss this matter based upon lack of standing.”

Following on the heels of the Court of Appeals’s rulings in Town of Middlefield and Town of Dryden, the Wallach and Joint Landowners rulings represented the second judicial defeat in New York for fracking proponents in as many months. However, the Joint Landowners Coalition of New York announced on July 28 that they have appealed the Albany judge's ruling.

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