New York Landowners Threaten State with Takings Claims over Drilling Moratorium

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In a draft complaint circulated to its members this week, the Joint Landowners Coalition of New York—a group of pro-drilling landowners—laid out several claims against state agencies and Governor Andrew Cuomo as a result of delays in issuing a final decision on the use of hydraulic fracturing in New York following a 2008 moratorium.

After the moratorium went into effect, New York’s Department of Environmental Conservation (DEC) instituted a plan to issue a Supplemental Generic Environmental Impact Statement (SGEIS) on the new drilling techniques prior to making a permanent decision on the moratorium. The complaint alleges that by engaging in the lengthy review process—now in its sixth year—New York has violated the State Environmental Quality Review Act (SEQRA), which requires agency reviews to be completed with “minimum procedural and administrative delay.” The landowners claim that “Governor Cuomo has arbitrarily prevented the DEC from issuing the final SGEIS. . . for reasons based exclusively on political concerns and without any good faith, valid, rational, or legally defensible reason.”

The suit also alleges that the moratorium itself violates the Takings Clause of the Fifth Amendment, which prohibits the government from taking private property “without just compensation.” In essence, the owners of oil and gas leases are alleging that a permanent moratorium on hydraulic fracturing deprives them of “all economically beneficial use” of their property right. Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The suit seeks damages based on the value of the oil and gas leases.

Fracking opponents have dismissed the suit as a mere publicity stunt, stating that the group is unlikely to prove a total loss of economic value in the property.

The Binghamton group informed members of the suit in a letter but has yet to file the lawsuit as it seeks additional funding to defray the costs of the litigation.

Further news coverage of the suit can be found here and here.

Topics:  Energy, Fracking, Fracking Bans, Moratorium, Takings

Published In: Constitutional Law Updates, Energy & Utilities Updates, Environmental Updates, Commercial Real Estate Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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