Federal Judge Crushes Fracking Plans
Norcross Wildlife Foundation successfully defended a conservation easement from successor owners’ fracking plans. A federal court in Pennsylvania rejected the argument that the parties could not have intended to ban shale gas production because they didn't consider it as a possibility when they signed the easement in 2002.
The U.S. District Court for the Middle District of Pennsylvania (Stockport Mountain v. Norcross Wildlife Foundation, No. 11-514, M.D. Pa.; 2013 U.S. Dist. LEXIS 121321) granted summary judgment in a lengthy opinion and order. The court found that the conservation easement unambiguously bans surface drilling.
Despite the fact that nobody could have predicted the development of fracking techniques and the subsequent drilling of the Marcellus shale deposit, the court wrote "The court cannot overlook the categorical prohibition in Section 4(c) [of the conservation easement] simply because the parties did not envision a boom in natural gas drilling."
The judge also wrote that Pennsylvania law explicitly requires courts to liberally interpret the conservation easement to uphold the purposes and intent of conservation easements. "Additionally, the court is compelled by Pennsylvania law to liberally construe the terms of the conservation easement. As such, the court cannot read section 5 [reserving to the owner all non-prohibited rights] so broadly as to crowd out section 4(c)'s prohibition against commercial or industrial activity of any kind."
The judge also awarded attorney fees and costs to Norcross Wildlife Federation. The deadline for Stockport Mountain to file a Request for Reconsideration and the deadline for notice of an appeal has passed. The case is now closed.
Our previous article on the Stockport Mountain Corporation LLC v. Norcross Wildlife Foundation, Inc. lawsuit has a summary of the previous motion hearing and ruling last year. In that previous ruling, this same judge denied motions to dismiss and cited the need for further evidence to make an adequate determination.
Specifically, the opinion mentioned the need for evidence of the conservation values of the property and evidence supporting arguments that the property would be damaged by commercial vehicles and equipment, and the construction of roads on the conservation property.
Further the opinion noted that only the easement was included as evidence in the original pleadings. Presumably, the parties later submitted evidence on the baseline documentation and evidence with respect to potential roads or damaging use that might occur when drilling.
The previous article also lists eight practice pointers.
- Craft a clear, unambiguous and sufficiently detailed conservation purposes clause.
- Identify conservation attributes and values and clearly articulate what makes those attributes important.
- Elaborate on the purposes, attributes and values in the baseline documentation report.
- Ensure that every reserved right does not impair the property’s conservation values.
- Articulate how the reserved rights are not inconsistent with the stated conservation purposes.
- Consider defining critical terms but use extreme caution and balance the use of definitions against the risk of them becoming obsolete.
- Include language that gives the land trust discretion to determine if any activity, use or structure is inconsistent with the purposes of the easement.
- If necessary to protect the property’s conservation values, consider drafting your easement’s mineral clause restriction to prohibit the leasing or sale of mineral rights and the exploration for, or development or extraction of, minerals or hydrocarbons from on or under the surface of the protected property by hydrofracturing, directional drilling or any other methods.
Another Pennsylvania case on drilling but here conservation easement found unambiguous: A Pennsylvania trial court upheld a Western Pennsylvania Conservancy (WPC) conservation easement finding that it unambiguously prohibited horizontal drilling proposed by the successor landowners, and that the purposes of the easement went beyond simply protecting the surface of the protected property.
Then on the successor owners’ appeal a Pennsylvania appellate court affirmed the trial court’s finding in Ray v. Western Pennsylvania Conservancy that the mining prohibition clearly and unambiguously prohibits any drilling or natural gas extraction--even where the surface is not disturbed. The mining prohibition in the conservation easement specifically forbids drilling and the extraction or removal of gas.
The mining prohibition in this easement was more detailed than that of the Stockport easement, perhaps explaining the different initial (but not ultimate) result in court.
In 2006, Colcom Foundation, a non-profit corporation, granted a conservation easement on an 84,000-acre tract to WPC. The easement contains an expansive mining prohibition, specifically prohibiting drilling or the extraction or removal of gas. The easement also recites several purposes, including preserving water quality, biological diversity, and a healthy forest ecosystem.
Shortly after conservation, Colcom conveyed the land to Robert and Diane Ray who wanted to lease the land for exploration and extraction of natural gas by horizontal drilling. The surface drilling site would be located outside of the protected property, but drilling activity would take place below the surface of the protected property.
WPC declined to approve the lease. The Rays filed a declaratory judgment action, seeking a ruling that the easement allowed horizontal drilling because it affected only the subsurface, and not the surface, of the protected property. The Rays filed a motion for judgment on the pleadings (similar to a motion for summary judgment).
Ray v. Western Pennsylvania Conservancy, No. 1799 WDA 2011 (Pa. Super. Ct., Feb. 21, 2013), affirming Ray v. Western Pennsylvania Conservancy, No. 3388 of 2011, 2011 Pa. Dist. & Cty. Dec. LEXIS 367 (Pa. C. Westmoreland Cty. Oct. 19, 2011)(Opinion and Order denying Plaintiffs’ Motion for Judgment on the Pleadings). Compare this case with the Stockport Mountain Corporation LLC v. Norcross Wildlife Foundation, Inc., summary and ultimately with the final Stockport trial court decision above.