Matter of Wallach v. Town of Dryden, 23 N.Y.3d 728 (2014)
A municipality’s zoning authority, derived from its home rule powers, allows it to prohibit oil and gas production activities, including hydrofracking, within its borders, and this power is not preempted by the Oil, Gas and Solution Mining Law (OGSML).
Summary
The New York Court of Appeals held that towns can ban oil and gas production, including hydrofracking, through local zoning laws. The Towns of Dryden and Middlefield adopted zoning amendments to prohibit oil and gas exploration and extraction. Norse Energy Corp. USA and Cooperstown Holstein Corporation challenged these bans, arguing the OGSML preempted local zoning laws. The Court of Appeals affirmed the lower courts’ decisions, ruling that the OGSML’s supersession clause does not preempt the home rule authority of municipalities to regulate land use through zoning. The court emphasized that zoning laws regulate land use generally, while the OGSML focuses on the technical operations of the oil and gas industry.
Facts
The Town of Dryden amended its zoning ordinance to prohibit all oil and gas exploration, extraction, and storage, citing potential harm to the community’s health and environment. Similarly, the Town of Middlefield amended its master plan to classify oil, gas, and solution mining and drilling as prohibited uses, aiming to preserve the town’s rural character and tourism industry. Both towns took these actions after reviewing scientific studies and holding public meetings concerning the potential impacts of hydrofracking.
Procedural History
In Dryden, Norse Energy Corp. USA challenged the zoning amendment via a CPLR article 78 proceeding and declaratory judgment action. Supreme Court upheld the amendment, except for the provision invalidating state and federal permits, and the Appellate Division affirmed. In Middlefield, Cooperstown Holstein Corporation sued to invalidate the zoning law. Supreme Court dismissed the complaint, and the Appellate Division affirmed. The Court of Appeals consolidated the appeals.
Issue(s)
Whether the supersession clause in the Oil, Gas and Solution Mining Law (ECL 23-0303[2]) preempts a municipality’s home rule authority to enact zoning laws that prohibit oil and gas exploration and production activities, including hydrofracking, within its boundaries.
Holding
No, because the OGSML’s supersession clause only preempts local laws that regulate the technical operations of the oil and gas industry, and not zoning laws that regulate land use generally.
Court’s Reasoning
The Court applied the three-part test established in Matter of Frew Run Gravel Prods. v Town of Carroll, considering (1) the plain language of the supersession clause, (2) the statutory scheme as a whole, and (3) the relevant legislative history. The Court found the OGSML’s supersession clause, which states that the law supersedes “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,” does not explicitly mention zoning laws. Referencing Frew Run, the court reasoned that zoning laws regulate land use, whereas the OGSML regulates operations. Thus, local zoning ordinances prohibiting certain land uses do not conflict with the state’s regulation of the technical aspects of oil and gas operations. The court stated that the OGSML aims to prevent wasteful practices and ensure the Department of Environmental Conservation can regulate the technical operations of the industry effectively. The legislative history does not indicate an intent to take away local land use powers through the supersession clause. The Court also cited Matter of Gernatt Asphalt Prods. v Town of Sardinia, stating municipalities are not obligated to permit exploitation of natural resources if limiting such use is a reasonable exercise of police powers. The court held that the town-wide ban was a reasonable exercise of zoning authority. The Court emphasized it was not ruling on the merits of hydrofracking itself, but rather on the division of power between state and local governments.