[co-authors: Matthew Gibson]

In August 2016, AWMS Water Solutions, L.L.C., AWMS Holdings L.L.C., and AWMS Rt. 169, L.L.C. (collectively, “Appellants”) filed their original writ of mandamus to commence property-appropriation proceedings since, in their view, the government had taken their property, they were entitled to just compensation.[1] Fast forward almost eight years, and the case is still floating around with the Ohio Supreme Court being the latest to rule on it.

The facts behind State ex rel. AWMS Water Solutions, L.L.C. v. Mertz[2] is relatively straightforward, as it starts with the Appellants securing a leasehold interest in 5.2 acres of land in Trumbull, Ohio in 2011.[3] The Appellants intended to operate two saltwater-injection wells and accordingly, filed their permits with the Ohio Department of Natural Resources (“ODNR”).[4] After the authorization for the wells, the Appellants spent over five million dollars constructing the wells.[5] Five months into their injections of the two wells there were two separate earthquakes near injection well #2, which the ODNR attributed to the Appellants injection operations and ordered the suspension of operations for both wells.[6] The ODNR eventually lifted the suspension of well #1 but left the suspension in effect for well #2.[7] Shortly thereafter, the 2016 writ of mandamus followed.

The first time this case was at the court of appeals, the court granted summary judgment for the State (“Appellees”) and denied the writ; however, on appeal, the Ohio Supreme Court reversed, holding instead that there were genuine issues of material fact concerning whether the State’s suspension of operations constituted a total taking or even a partial taking.[8] Thus, the Ohio Supreme Court remanded with the instructions to “weigh the parties’ evidence relating to AWMS’s total-takings claim” and to weigh the parties’ evidence “balance all three Penn Cent. [Transp. Co. v. New York City] factors to determine whether AWMS suffered a partial taking.”[9]

Subsequently, on this first remand, the Eleventh District Court of Appeals narrowed their focus to whether or not the Appellants in this case had a cognizable property interest that would prompt the court to conduct the total taking and partial takings analysis.[10] Ultimately, the court of appeals concluded that there was no cognizable property interest, therefore neither the total taking nor the partial taking analysis was proper.[11] Once again, the Appellants appealed to the Ohio Supreme Court asking for an oral argument.[12]

In their motion for oral argument, the Appellants contend that the court of appeals narrowed the definition of what a property interest is for a takings analysis. Still, the Ohio Supreme Court need not consider this contention because the court of appeals failed to follow the order of the remand and also violated the law-of-the-case doctrine.[13] The Ohio Supreme Court here found that the court of appeals did not deny the Appellants’ writ of mandamus because they had weighed the evidence as instructed. Still, rather the court of appeals denied the writ on a basis separate from the task that they were ordered to perform.[14] Nolan v. Nolan[15] says, “an inferior court has no discretion to disregard the mandate of a superior court in a prior appeal in the same case.” The Appellees tried to argue that the court of appeals found that this property interest had not been taken, but they argued this in the absence of the court of appeals conducting the takings analysis as they were instructed.[16] Additionally, the Ohio Supreme Court found that the court of appeals violated the law-of-the-case doctrine which provides: “the decision of a reviewing court in a case remains the law of that case on the legal questions involved for all subsequent proceedings in the case at both the trial and reviewing levels.”[17] In this case the Ohio Supreme Court had already recognized that the Appellants had a cognizable interest in the leasehold which the court of appeals improperly revived on remand, therefore in clear violation of the law-of-the-case doctrine.[18]

Ultimately, the Ohio Supreme Court denied the motion for oral argument, reversed the court of appeals’ judgment, and (once again) remanded the case with the instructions set forth in the prior remand.[19] The next installment of this case will be its third time at the court of appeals. It is expected that the upcoming decision will extensively involve a takings analysis. Barring any mistakes by the court, this issue will be at the forefront of the decision-making process.

References

[1] State ex rel. AWMS Water Solutions, L.L.C. v. Mertz, Slip Opinion No. 2024-Ohio-200.

[2] Slip Opinion No. 2024-Ohio-200.

[3] Id. at ¶5.

[4] Id.

[5] Id. at ¶6.

[6] Mertz at ¶7.

[7] Id.

[8] Id. at ¶9-10.

[9] Id. at ¶10; citing AWMS, 162 Ohio St.3d 400, 2020-Ohio-5482, 165 N.E.3d 116, at ¶56, 87-89.

[10] Id. at ¶12-14.

[11] Id.

[12] Mertz, at ¶15.

[13] Id. at ¶17.

[14] Id. at ¶20.

[15] 11 Ohio St. 3d 1, 462 N.E.2d 410 (1984), syllabus.

[16] Mertz, at ¶21.

[17] Id. at ¶24; citing Nolan, at 3.

[18] Id. at ¶26-27.

[19] Id. at ¶31.