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NEW YORK STATE COURT OF APPEALS
_____________________________________________________________
In the Matter of NORSE ENERGY
CORP. USA,
Petitioner-Plaintiff-Appellant,
- against - Docket No.: 515227
Tompkins Co. Sup. Ct.
Index No.: 2011-0902
TOWN OF DRYDEN et al.,
Respondents-Defendants-Respondents.
DRYDEN RESOURCES AWARENESS
COALITION,
Proposed Intervenor-Cross-Appellant.
NOTICE OF MOTION FOR
LEAVE TO APPEAL TO THE COURT OF APPEALS
PLEASE TAKE NOTICE, that upon the Affidavit of Thomas S. West,
Esq., sworn to May 31, 2013, together with a copy of (1) the Opinion and
Order of the Appellate Division, Third Department, decided and entered
May 2, 2013, finally determining the action/proceeding, and (2) exhibits
annexed hereto, the Petitioner-Plaintiff-Appellant will move this Court at
Motion Term, June 17, 2013, at 10:00 a.m., at the New York State Court of
Appeals, Court of Appeals Hall, 20 Eagle Street, Albany, NY 11207-1095,
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for an Order granting the Petitioner-Plaintiff-Appellant leave to appeal to the
Court of Appeals from the Opinion and Order of the Appellate Division,
Third Department, decided and entered May 2, 2013, which affirmed the
Decision and Order of the Supreme Court, Tompkins County (Rumsey, J.),
entered on February 22, 2012, granting summary judgment to Respondents
and dismissing the Verified Petition and Complaint, and for such other and
further relief as this Court deems just and proper.
Dated: May 31, 2013
_____________________________
Thomas S. West, Esq.
Attorney for Petitioner-Plaintiff-
Appellant Norse Energy Corp. USA
The West Firm, PLLC
677 Broadway, 8th Floor
Albany, NY 11207-2996
Tel: (518) 641-0500
Fax: (518) 615-0500
Email: twest@westfirmlaw.com
TO: Deborah Goldberg, Esq. Alan J. Knauf, Esq.
Attorney for Respondents- Attorney for Proposed
Defendants-Respondents Intervenor-Cross-Appellant
EARTH JUSTICE Knauf Shaw LLP
156 William Street, Suite 800 1125 Crossroads Building
New York, NY 10038-5326 2 State Street
Rochester, NY 14614
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NEW YORK STATE COURT OF APPEALS
_____________________________________________________________
In the Matter of NORSE ENERGY
CORP. USA,
Petitioner-Plaintiff-Appellant,
- against - Docket No.: 515227
Tompkins Co. Sup. Ct.
Index No.: 2011-0902
TOWN OF DRYDEN et al.,
Respondents-Defendants-Respondents.
DRYDEN RESOURCES AWARENESS
COALITION,
Proposed Intervenor-Cross-Appellant.
AFFIDAVIT OF THOMAS S. WEST, ESQ.
IN SUPPORT OF THE MOTION
BY PETITIONER-PLAINTIFF-APPELLANT
FOR LEAVE TO APPEAL TO THE COURT OF APPEALS
THOMAS S. WEST, ESQ., being duly sworn, deposes and says as
follows in support of the Petitioner-Plaintiff-Appellant’s motion for leave to
appeal to the Court of Appeals:
1. I am an attorney duly admitted to practice law in all courts of
the State of New York and the founding partner of The West Firm, PLLC,
located at 677 Broadway – 8th Floor, Albany, New York.
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2. I am the attorney for Petitioner-Plaintiff-Appellant Norse
Energy Corp. USA (“Norse”) and am fully familiar with the facts and
circumstances of this case.
3. I make this Affidavit in support of Norse’s motion for leave to
appeal to this Court from the Opinion and Order of the Appellate Division,
Third Department, decided and entered on May 2, 2013 (Exhibit A), which
affirmed the Decision and Order of the Supreme Court, Tompkins County
(Rumsey, J.), entered on February 22, 2012 (Exhibit B), granting summary
judgment to Respondents-Defendants-Respondents and dismissing the
Verified Petition and Complaint (the “Complaint”).
4. Pursuant to 22 NYCRR § 500.22(b)(6), annexed hereto and
incorporated herein by this reference are the following exhibits:
Exhibits Description
A. The Opinion and Order of the Appellate Division
of the Supreme Court, Third Judicial Department,
dated May 2, 2013, in the Matter of Norse Energy
Corp. USA v. Town of Dryden, 2013 N.Y. Slip
Op. 03145 with Notice of Entry;
B. The Decision and Order of the Supreme Court,
Tompkins County (Rumsey, J.), dated February
21, 2012;
C. The Decision and Order of the Supreme Court
Appellate Division, Third Department,
Substituting Norse Energy Corp. USA, dated
October 5, 2012;
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D. The Decisions and Orders of the Supreme Court,
Appellate Division, Third Department, Granting
Amicus Status;
E. The Memorandum and Order of the Appellate
Division of the Supreme Court, Third Judicial
Department, dated May 2, 2013 in the Matter of
Cooperstown Holstein Corporation v. Town of
Middlefield, 2013 N.Y. Slip Op. 3148; and
F. Lenape Resources, Inc. v. Town of Avon.
1. Pursuant to 22 NYCRR § 500.22(c), submitted herewith and
incorporated herein by this reference are the following materials:
a. Volumes I, II and III of the Record on Appeal;
b. The Brief of Petitioner-Plaintiff-Appellant Norse Energy
Corp. USA;
c. The Brief of Respondents-Defendants-Respondents
Town of Dryden and Town of Dryden Town Board;
d. The Reply Brief of Petitioner-Plaintiff-Appellant Norse
Energy Corp. USA;
e. The Brief of Proposed Intervenor-Cross-Appellant
Dryden Resources Awareness Coalition;
f. The Amici Curiae Briefs submitted in Support of
Plaintiff’s Appeal:
i. New York Farm Bureau;
ii. American Petroleum Institute, The Chamber of
Commerce of the United States of America and
Independent Oil and Gas Association of New York;
and
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iii. Business Council of New York State, Inc., Clean
Growth Now, National Association of Royalty
Owners, NARO-NY and The Joint Landowners
Coalition of New York, Inc.; and
g. The Amici Curiae Briefs submitted in Opposition to
Plaintiff’s Appeal:
i. Town of Ulysses and fifty-one other municipalities
together with the Association of Towns of the State of
New York, New York Conference of Mayors and
New York Planning Federation;
ii. Professor Vicki Been and others;
iii. Catskill Mountainkeeper and eight other national or
local environmental groups;
iv. A&E Management & Contracting, Inc., along with
twenty-six other New York businesses; and
v. Assemblywoman Barbara Lifton.
PROCEDURAL HISTORY
5. Beginning in or around December 2006, Norse, through its
predecessors Anschutz Exploration Corporation (“Anschutz”) and Ansbro
Petroleum Company, began acquiring oil and gas leases in the Town of
Dryden, Tompkins County, New York (the “Town”). Record Below
(“R.__”) 58, Affidavit of Pamela S. Kalstrom, sworn to September 15, 2011
(“Kalstrom Aff.”), ¶¶ 6, 7. The purpose of the oil and gas leases was to
explore and develop natural gas resources underlying the leased properties.
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R. 58, id. ¶ 5. Norse’s predecessors-in-interest obtained gas leases covering
approximately 22,000 acres in the Town and also invested approximately
$5.1 million in the exploration and development of these oil and gas leases.
R. 59, id. ¶ 11.
6. Subsequently, on August 2, 2011, Respondents-Defendants-
Respondents Town of Dryden and the Dryden Town Board (collectively, the
“Town Board” or “Respondents”) enacted a zoning amendment which
expressly prohibits any and all oil and gas extraction, exploration,
development and related activities anywhere within the Town (the “Town
Prohibition”). R. 49-51, Complaint ¶¶ 12-17. Specifically, Section 2104 of
Article XXI of the Town Prohibition prohibits all oil and gas exploration,
extraction, processing and storage and support activities within the
geographical borders of the Town, thereby depriving Norse and all other
mineral rights owners in the Town of their respective oil and gas estates.
R. 50-51, id. ¶ 17.
7. On September 16, 2011, Norse’s predecessor-in-interest
(Anschutz) brought an action in the Supreme Court, Tompkins County,
challenging the validity of the Town Prohibition. R. 43-45. On October 21,
2011, the Town Board answered and moved for summary judgment, seeking
a declaration that the Town Prohibition is valid and a judgment dismissing
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the Complaint. R. 89-97, 451. Anschutz opposed the motion and cross-
moved for the Supreme Court to grant summary judgment in its favor,
asserting that the Town Prohibition was expressly and impliedly preempted
by the Oil, Gas and Solution Mining Law (“OGSML”), Environmental
Conservation Law (“ECL”) Article 23. R. 502, ¶¶ 6-7; R. 51-52, Complaint
¶¶ 19-26 (express preemption cause of action); R. 52-53, Complaint ¶¶ 27-
25 (conflict preemption cause of action); Exhibits A & B.
8. Subsequently, Dryden Resources Awareness Coalition
(“DRAC”), an association of Town residents and landowners, moved to
intervene and defend the Town Prohibition. R. 658-59.
9. On February 21, 2012, the Supreme Court (Rumsey, J.)
rendered its Decision and Order (the “Decision”): (1) granting the Town
Board’s motion for summary judgment, concluding that, with the exception
of a provision invalidating permits issued by other local or state agencies,
the Town Prohibition was not preempted by the OGSML; (2) granting
amicus curiae applications of Assemblywoman Barbara Lifton and George
A. Matthewson to the extent they related to matters in this
proceeding/action; and (3) denying the motion to intervene by DRAC, but
granting DRAC amicus curiae status. Exhibit B & R. 14-41.
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10. Anschutz and DRAC timely appealed from the Decision to the
Appellate Division, Third Department. R. 3, 8.
11. Norse was later substituted as a party in the place and stead of
Anschutz by Order of the Appellate Division, Third Department. Exhibit C
& R. 1, ¶ 2.
12. In addition, several interested groups were granted permission
to file amicus curiae briefs on the appeal. See Exhibit A, 2013 N.Y. Slip
Op. 03145, at 4-5 n.4 (granting amicus curiae relief to the New York Farm
Bureau, 2012 WL 5369074, 2012 N.Y. Slip Op. 89400[U] [3d Dep’t Nov. 1,
2012]; American Petroleum Institute, Chamber of Commerce of the United
States of America and Independent Oil and Gas Association of New York,
2012 WL 5457280, 2012 N.Y. Slip Op. 89955[U] [3d Dep’t Nov. 2, 2012];
Business Council of New York State, Inc., Clean Growth Now, National
Association of Royalty Owners, NARO-NY and Joint Landowners Coalition
of New York, 2012 WL 5619548, 2012 N.Y. Slip Op. 90485[U] [3d Dep’t
Nov. 13, 2012]; Town of Ulysses and fifty-one other municipalities, together
with the Association of Towns of the State of New York, New York
Conference of Mayors and New York Planning Federation, 2012 WL
5896899, 2012 N.Y. Slip Op. 91270[U] [3d Dep’t Nov. 16, 2012]; Member
of Assembly Barbara Lifton, 2012 WL 7802752, 2012 N.Y. Slip Op.
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95156[U] [3d Dep’t Nov. 23, 2012]; Professor Vicki Been and others, 2012
WL 7802749, 2012 N.Y. Slip Op. 95153[U] [3d Dep’t Nov. 23, 2012];
Catskill Mountainkeeper and eight other national or local environmental
groups, 2012 WL 7802751, 2012 N.Y. Slip Op. 95155[U] [3d Dep’t Nov.
23, 2012]; and A&E Management & Contracting, Inc., along with twenty-
six other New York businesses, 2012 WL 7802750, 2012 N.Y. Slip Op.
95154[U] [3d Dep’t Nov. 23, 2012].
13. On May 2, 2013, the Third Department rendered its Opinion
and Order (the “Appellate Decision”) affirming the Decision. Exhibit A,
2013 N.Y. Slip Op. 03145. Specifically, the Third Department held that (1)
the supersession clause of the OGSML, ECL § 23-0303(2), does not
expressly preempt the Town Prohibition; and (2) the OGSML does not
impliedly preempt the Town Prohibition under principles of conflict
preemption. Id., 2013 N.Y. Slip Op. 03145, at 7-15. The Third Department
also found that the Supreme Court did not abuse its discretion in denying
DRAC’s motion to intervene and granted DRAC amicus curiae status. Id.,
2013 N.Y. Slip Op., at 5-6.
14. Here, Norse seeks leave to appeal to this Court from the
Appellate Decision.
TIMELINESS
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15. This motion for leave to appeal to this Court is timely. No prior
motion for leave to appeal was filed at the Appellate Division. On May 6,
2013, Norse was served with the Appellate Decision sought to be appealed
from, with notice of entry. Exhibit A. This motion was served on the
Respondents on May 31, 2013, and filed with this Court on May 31, 2013,
and is, therefore, timely. See Civil Practice Law and Rules (“CPLR”) §§
5513(b), 5515(1), 5515(2), R 5516, R 2103(b), and 22 NYCRR §§ 500.21 &
500.22.
JURISDICTION
16. This Court has jurisdiction of this motion and of the proposed
appeal because the proceeding/action originated in the Supreme Court (see
R. 43-45, 14-41), and the Appellate Decision sought to be appealed is an
order of the Appellate Division, Third Department, which (1) finally
determined the action/proceeding by affirming dismissal of the Complaint
and (2) is not appealable as of right. See CPLR §§ 5601, 5602(a)(1)(i);
Exhibit A.
QUESTIONS PRESENTED FOR REVIEW
17. The following questions are presented for this Court’s
consideration on this motion.
Question 1:
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a) Is a municipal zoning ordinance that bans all oil and gas
development expressly preempted by the OGSML, which directs that
it (1) “shall supersede all local laws and ordinances relating to the
regulation of the oil, gas and solution mining industries,” (2) expressly
limits the “jurisdiction” of municipalities to local roads and taxation,
and (3) regulates where the operator may locate its wells by directing
that well location and spacing be established by the New York State
Department of Environmental Conservation based upon the location
of oil and gas pools, not municipal boundaries, according to specific
statutory and regulatory requirements that are designed to meet the
statute’s policy objectives of preventing waste, promoting the greater
ultimate recovery of oil and gas, and protecting the correlative rights
of “all owners” – which policies are fundamental and unique to oil
and gas development and totally inconsistent with municipal bans?
b) Is this Court’s precedent regarding express preemption
under the Mined Land Reclamation Law (“MLRL”) determinative of
the express preemption analysis under a wholly different statute – i.e.,
here, the OGSML – whose language, legislative history, policies, and
means and subject matter of regulation differ markedly from that of
the MLRL? Stated differently, does this Court’s holding that the
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MLRL’s supersession language “relating to the extractive mining
industry” preempts only local regulation of the operational aspects
(i.e., the “how”) of mining, but not local zoning, mandate holding that
a different statute’s supersession language “relating to the regulation
of the . . . industry” can never encompass “where” the activity takes
place, even if that statute explicitly regulates where the activity may
occur and has policy objectives that are defeated by parochial zoning
bans?
The Appellate Decision holds that the OGSML does not expressly
preempt the Town Prohibition, and the Third Department reached that result
by, in part, relying on this Court’s preemption precedent decided under the
MLRL. Exhibit A, 2013 N.Y. Slip Op. 03145, at 11-13.
Question 2:
Is a municipal zoning ordinance that bans all oil and gas development
in conflict with, and thus impliedly preempted by, the OGSML which
implements a comprehensive statewide program that regulates both
the “how” and “where” of drilling to provide for the operation and
development of oil and gas properties in such a manner as to prevent
waste, promote the greater ultimate recovery of oil and gas, and
protect the correlative rights of “all owners,” where, by virtue of the
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municipal-wide ban, there can be no drilling and no resource
recovery, which results in the ultimate in waste (no production), and
the total emasculation of mineral owners’ correlative rights by
destroying their right to recover oil or gas from under their property?
The Appellate Decision holds that the OGSML does not impliedly
preempt the Town Prohibition under conflict preemption principles. Exhibit
A, 2013 N.Y. Slip Op. 03145, at 14-15. Specifically, the Third Department
found that municipal-wide bans on drilling “may harmoniously coexist” with
these policies and the explicit location-based directives of the OGSML.
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LEAVEWORTHINESS OF THE QUESTIONS
PRESENTED FOR REVIEW
18. The questions presented for review merit leave by this Court
because they are both novel and of statewide importance. See 22 NYCRR §
500.22(b)(4).
19. On the issue of express preemption, this Court has never before
interpreted the scope of supersession of local zoning ordinances under the
OGSML’s express supersedure language in ECL § 23-0303(2). Thus, the
issue presented is a novel question of statutory construction.
20. Further underscoring the novel nature of the express
preemption issue is the manner in which the lower courts of this State have
analyzed it. To date, seven lower court Justices have cited this Court’s
decision in Frew Run Gravel Prods. v. Town of Carroll, 71 N.Y.2d 126
(1987), in holding that the OGSML does not expressly preempt local zoning
bans. Exhibit F, Lenape Resources, Inc. v. Town of Avon, Index No. 1060-
2012, Decision and Order/Judgment (Sup. Ct., Livingston Cnty., Mar. 15,
2013) (Wiggins, J.) (“Lenape”); Exhibit B, Anschutz Exploration Corp. v.
Town of Dryden, 35 Misc. 3d 450, 459-60 (Sup. Ct., Tompkins Cnty., 2012)
(Rumsey, J.); Appellate Decision (Exhibit A) and Middlefield (Peters, P.J.
and Stein, Spain, and Garry, JJ.) (Exhibit E). Frew Run, however,
concerned express preemption relative to a sand and gravel mine under the
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MLRL – a wholly different statute, involving wholly distinct language,
legislative history, and policy objectives, as well as the manner and subject
matter of regulation. That notwithstanding, beyond citing to Frew Run, two
Justices have further opined that Frew Run constrained or compelled the
result under the OGSML. See Exhibit F, Lenape at 4 (opining the view that
the Frew Run decision is flawed, but also finding that it “compels the
conclusion that local zoning ordinances, such as the Local Law at issue, do
not ‘relat[e] to the regulation of the oil, gas and solution mining industries
within the meaning of the OGSML”); Exhibit B, Decision at 25 (stating that
Frew Run “constrained” the result in the instant case).
21. The novelty of this issue, therefore, is established by the fact
that this Court has never addressed whether the preemption analysis in Frew
Run was intended to make sweeping changes in how preemption is analyzed
in the context of local home rule authority relative to other State statutes. In
short, if Frew Run is intended to be applied to constrain the preemption
analysis of statutory schemes wholly distinct from the MLRL – with the end
result being a bright line rule that the statutory phrase “relating to the
regulation of the . . . industry” can never encompass “where” the regulated
activity takes place, even if the statutory scheme explicitly regulates where
the activity may take place and is motivated by statutory objectives that are
17
defeated by parochial zoning bans – then this Court should take up that
novel question and definitively rule on the issue.
22. Further highlighting the novelty of the issue of express
preemption under the OGSML is the unique evolution of the OGSML and
the specific terms of art contained in this statute (including in the declaration
of policy), all of which wholly distinguish the OGSML from the MLRL.
See generally, R. 501-21, ¶¶ 8-37 & Exhibits cited therein; see also ECL §
23-0301.
23. The OGSML is the result of New York’s membership in the
Interstate Oil and Gas Compact Commission (the “Commission”), a multi-
state governmental agency of a group of oil and gas producing states, whose
purpose “is to conserve oil and gas by the prevention of physical waste from
any cause.” R. 503-04, ¶¶ 8-13; ECL Article 23, Title 21. The Commission
arose in a climate where lack of regulation was resulting in overproduction
and the waste of oil and gas resources in producing states. R. 503, ¶ 8.
These states endorsed, and Congress ratified, the Interstate Compact to
resolve these issues. Id. The Interstate Compact requires each member state
to enact laws that prevent, among other things, “[t]he drilling, equipping,
locating, spacing or operating of a well or wells so as to bring about physical
waste of oil or gas or loss in the ultimate recovery thereof.” R. 503, ¶ 11;
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ECL § 23-2101, Article III (e). New York became a member state of the
Commission and enacted the Interstate Compact in 1941 and remains a
member state today. R. 504, ¶ 13. The OGSML’s precursor statute, and
ultimately the OGSML, were enacted in response to the requirements of the
Interstate Compact. See R. 504-07, ¶¶ 13-22.
24. Having been modeled on the Interstate Compact, the OGSML
contains terms of art that are unique to the oil and gas industry, therefore
distinguishing this statutory scheme from any other, including the MLRL.
These terms are reflected in, among other provisions, the declaration of
policy, ECL § 23-0301, which directs that development and production of
oil and gas resources are to be performed in such a manner that “will prevent
waste, . . . that a greater ultimate recovery of oil and gas may be had, and
that the correlative rights of all owners and the rights of all persons including
landowners and the general public may be fully protected . . . .” See also
Western Land Servs. v. Department of Envtl. Conservation, 26 A.D.3d 15,
17 (3d Dep’t 2005) (recognizing critical legislative purposes of OGSML
including insuring maximum recovery, preventing waste and protecting
correlative rights).
25. In accord with the Interstate Compact, ECL § 23-0101[20][c]
defines the oil and gas term “waste” as, inter alia, “[t]he locating, spacing,
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drilling, equipping, operating or producing of any oil or gas well . . . in a
manner which causes or tends to cause reduction in the quantity of oil or gas
ultimately recoverable from a pool under prudent and proper operations.”
26. The protection of the “correlative rights of all owners” also has
a very specific meaning as an oil and gas phrase of art. It means that the
“owner” – “the person who has a right to drill into and produce from a pool”
– is entitled to a reasonable opportunity to recover or receive the oil or gas
(or the equivalent thereof) attributable to its property, regardless of where
the well is drilled. See ECL § 23-0101(11) (defining “owner”); see also
Sylvania Corp. v. Kilborne, 28 N.Y. 427, 431 n.3 & 433 (discussing
correlative rights under Conservation Law precursor to ECL Article 23 and
stating that the doctrine of correlative rights provides for equitable
apportionment among landholders of the migratory gas and oil underlying
their land); 6 NYCRR § 550.3(ao) (defining protection of correlative rights
to mean “that the action or regulation by the department shall afford a
reasonable opportunity to each person entitled thereto to recover or receive
the oil or gas beneath his tracts or the equivalent thereof without being
required to drill unnecessary wells or to incur other unnecessary expenses to
recover or receive such oil or gas or its equivalent”).
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27. While the OGSML also declares, as an independent policy, that
the rights of all landowners and the general public are to be protected, that
articulation follows the other policies that are based upon oil and gas terms
of art per the requirements of the Interstate Compact. See ECL § 23-0301.
Moreover, this general welfare objective is meant to be accomplished
through the comprehensive scheme contained in the OGSML, which the
New York State Department of Environmental Conservation regulates
statewide through rules, regulations, a Generic Environmental Impact
Statement, and the ongoing development of the Supplemental Generic
Environmental Impact Statement relative to high-volume hydraulic
fracturing. R. 508-11, ¶¶ 30, 33, 34, 36, 37; see also Matter of Envirogas,
Inc. v. Town of Kiantone, 112 Misc. 2d 432, 434-35 (Sup. Ct., Erie Cnty.),
aff’d, 89 A.D.2d 1056 (4th Dep’t 1982), lv. denied, 58 N.Y.2d 602 (1982).
In any event, that the rights of landowners and the general public are to be
protected (i.e., through State controls) does not diminish the declared policy
that the correlative rights of “all owners” must be protected, and not just the
rights of those owners located in municipalities that allow drilling (which is
the troubling result of the Appellate Decision).
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28. Because the policies of protecting correlative rights of all
owners and preventing waste of the resource are key to the OGSML, but are
not contained in the MLRL, these two statutory schemes are wholly distinct.
29. In short, the unique evolution and nature of the OGSML wholly
distinguish it from the MLRL (and any other statutory scheme). Thus, with
all due respect, the Third Department seemingly was misguided in relying
on MLRL preemption precedent to decide the question of express
preemption under the OGSML. Because this Court has never addressed the
scope of express preemption under ECL § 23-0303(2), or the effect (if any)
of MLRL precedent on that analysis, this Court should decide this issue of
first impression.
30. The implied preemption question is likewise novel. This Court
has never addressed whether a municipal-wide ban on oil and natural gas
drilling can be squared with (1) the OGSML’s explicit well location and
spacing directives that depend upon the physical location of the underground
gas “pool,” not municipal boundaries, or (2) the statute’s underlying policies
of protecting correlative rights, preventing waste, and maximizing resource
recovery. Moreover, MLRL precedent is wholly irrelevant to this issue
because, as already explained, the MLRL does not have the policy
underpinnings of preventing waste and protecting the correlative rights of
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“all owners.” Thus, the question of implied preemption under the OGSML
is also a matter of first impression, which should be decided by this Court.
31. Notably, the Colorado Supreme Court, interpreting a similar
statutory scheme with the very same statutory policies as the OGSML, held
that a municipal ban on drilling analogous to the Town Prohibition
conflicted with the policies of protecting correlative rights, preventing waste,
and maximizing recovery. See Voss v. Lundvall Bros., Inc., 830 P.2d 1061,
1067 (Colo. 1992). The Colorado Supreme Court thus invalidated the local
ban, finding it conflict preempted. Id. Significantly, the court’s reasoning is
based on the unique nature of oil and gas – namely, that because oil and gas
are found in underground pools based on geology and geophysical properties
(rather than municipal boundaries), wells must be properly located in order
to produce effectively, prevent waste and protect correlative rights. Id.
Because municipal bans preclude proper well location and could bar
resource recovery altogether relative to some owners, drilling bans
necessarily conflict with these policies and are, therefore, invalid. Id.
32. Specifically, the Colorado Supreme Court observed:
Oil and gas are found in subterranean pools, the boundaries of
which do not conform to any jurisdictional pattern. As a result,
certain drilling methods are necessary for the productive
recovery of these resources . . . . [I]t is often necessary to drill
wells in a pattern dictated by the pressure characteristics of the
pool, and because each well will only drain a portion of the
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pool, an irregular drilling pattern will result in less than optimal
recovery and a corresponding waste of oil and gas. Moreover,
an irregular drilling pattern can impact on the correlative rights
of the owners of oil and gas interests in a common source of
supply by exaggerating production in one area and depressing it
in another. Because oil and gas production is closely tied to
well location, [a municipality’s] total ban on drilling . . . could
result in uneven and potentially wasteful production . . . . [The]
total ban, in that situation, would conflict with the [state
agency’s] express authority to divide a pool of oil or gas into
drilling units and to limit the production of the pool so as to
prevent waste and to protect the correlative rights of owners . .
. . In our view, the state’s interest in the efficient and fair
development and production of oil and gas resources in the
state, including the location and spacing of individual wells,
militates against a home-rule city’s total ban on drilling within
city limits.
Voss, 830 P.2d at 1067 (emphasis added); see also id., at 1067 n.3 (quoting
state law, defining “waste” in a manner identical to that in ECL § 23-
0101[20][c]).
33. The conflict preemption question under the OGSML, being a
matter of first impression that impacts this State’s energy policy and
potentially affects every mineral rights owner in this State, should be
decided by this Court.
34. Indeed, the question of whether the OGSML preempts local
zoning, be it expressly or impliedly, is plainly a matter of statewide
importance, thus underscoring the leaveworthiness of the issue. At the
outset, the statewide importance of this matter is demonstrated by the large
24
number of amici who participated below and spoke to both sides of the
issue. See Exhibit D.
35. Moreover, the import of this issue to landowners statewide and
this State’s energy policy is apparent. While this case relates to a municipal
ban in one town, the Appellate Decision effectively authorizes each and
every municipality across New York State to ban oil and gas development.
In fact, to date, approximately 150 municipalities have enacted bans or
moratoria on natural gas drilling which affect thousands of acres of property.
Based upon the recent decisions of the Appellate Division, Third
Department, upholding the legality of such bans, more localities are almost
certain to follow suit. See http://www.fractracker.org/maps/ny-moratoria/
for an updated list of those municipalities that have enacted bans or
moratoria.
36. As these bans are enacted, the correlative rights of landowners
and lessees are being destroyed, the objective of effective resource
development thwarted, and the ultimate in waste of New York’s oil and gas
resources assured, all on a statewide basis. Taken together, the ability of
localities to “zone out” oil and gas drilling could toll the death knell for
development of this State’s indigenous resources in direct conflict with the
explicit policy objectives of the ECL (promoting recovery, preventing waste
25
and protecting the correlative rights of “all owners”) and the express policy
of the New York Energy Law. See Energy Law § 3-101(5) (declaring it to
be State policy “to foster, encourage and promote the prudent development
and wise use of all indigenous state energy resources including, but not
limited to, on-shore oil and natural gas, off-shore oil and natural gas, natural
gas from Devonian shale formations . . . .” [L.1978, c. 396]). Aside from
the cumulative evisceration of available leasing area resulting from the ever-
increasing number of municipal bans, operators surely will be reluctant to
pursue development in New York if their investment can be obliterated by
the simple majority vote of a municipal board. Accordingly, given the
importance of this issue to mineral rights owners throughout the State and
the potential ramifications statewide relative to New York’s energy policy, it
is respectfully submitted that the interpretative questions presented in this
motion should be decided by this Court.
DISCLOSURE STATEMENT: 22 NYCRR 500.1(f)
37. Plaintiff-Petitioner, Norse Energy Corp. USA is a New York
corporation that is a wholly-owned subsidiary of Norse Energy Holdings,
Inc., a Delaware corporation that is a wholly-owned subsidiary of Norse
Energy Corp. ASA, a publicly-traded Norwegian company. Vandermark
Exploration, Inc. is a New York corporation that is a wholly-owned
26
subsidiary of Norse Energy Corp. USA. Strategic Energy Corp. and
MariCo Oil and Gas Corp. are inactive companies that are affiliated with
Norse Energy Corp. USA
27
CONCLUSION
38. For all of the foregoing reasons, I respectfully request that this
Court grant Norse’s motion for leave to appeal so that this Court may decide
these novel questions of statewide importance.
Dated: May 31, 2013
Respectfully submitted,
______________________
Thomas S. West
SWORN TO BEFORE ME
THIS 31st
DAY OF MAY 2013
________________________
Notary Public

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  • 1. 1 NEW YORK STATE COURT OF APPEALS _____________________________________________________________ In the Matter of NORSE ENERGY CORP. USA, Petitioner-Plaintiff-Appellant, - against - Docket No.: 515227 Tompkins Co. Sup. Ct. Index No.: 2011-0902 TOWN OF DRYDEN et al., Respondents-Defendants-Respondents. DRYDEN RESOURCES AWARENESS COALITION, Proposed Intervenor-Cross-Appellant. NOTICE OF MOTION FOR LEAVE TO APPEAL TO THE COURT OF APPEALS PLEASE TAKE NOTICE, that upon the Affidavit of Thomas S. West, Esq., sworn to May 31, 2013, together with a copy of (1) the Opinion and Order of the Appellate Division, Third Department, decided and entered May 2, 2013, finally determining the action/proceeding, and (2) exhibits annexed hereto, the Petitioner-Plaintiff-Appellant will move this Court at Motion Term, June 17, 2013, at 10:00 a.m., at the New York State Court of Appeals, Court of Appeals Hall, 20 Eagle Street, Albany, NY 11207-1095,
  • 2. 2 for an Order granting the Petitioner-Plaintiff-Appellant leave to appeal to the Court of Appeals from the Opinion and Order of the Appellate Division, Third Department, decided and entered May 2, 2013, which affirmed the Decision and Order of the Supreme Court, Tompkins County (Rumsey, J.), entered on February 22, 2012, granting summary judgment to Respondents and dismissing the Verified Petition and Complaint, and for such other and further relief as this Court deems just and proper. Dated: May 31, 2013 _____________________________ Thomas S. West, Esq. Attorney for Petitioner-Plaintiff- Appellant Norse Energy Corp. USA The West Firm, PLLC 677 Broadway, 8th Floor Albany, NY 11207-2996 Tel: (518) 641-0500 Fax: (518) 615-0500 Email: twest@westfirmlaw.com TO: Deborah Goldberg, Esq. Alan J. Knauf, Esq. Attorney for Respondents- Attorney for Proposed Defendants-Respondents Intervenor-Cross-Appellant EARTH JUSTICE Knauf Shaw LLP 156 William Street, Suite 800 1125 Crossroads Building New York, NY 10038-5326 2 State Street Rochester, NY 14614
  • 3. 3 NEW YORK STATE COURT OF APPEALS _____________________________________________________________ In the Matter of NORSE ENERGY CORP. USA, Petitioner-Plaintiff-Appellant, - against - Docket No.: 515227 Tompkins Co. Sup. Ct. Index No.: 2011-0902 TOWN OF DRYDEN et al., Respondents-Defendants-Respondents. DRYDEN RESOURCES AWARENESS COALITION, Proposed Intervenor-Cross-Appellant. AFFIDAVIT OF THOMAS S. WEST, ESQ. IN SUPPORT OF THE MOTION BY PETITIONER-PLAINTIFF-APPELLANT FOR LEAVE TO APPEAL TO THE COURT OF APPEALS THOMAS S. WEST, ESQ., being duly sworn, deposes and says as follows in support of the Petitioner-Plaintiff-Appellant’s motion for leave to appeal to the Court of Appeals: 1. I am an attorney duly admitted to practice law in all courts of the State of New York and the founding partner of The West Firm, PLLC, located at 677 Broadway – 8th Floor, Albany, New York.
  • 4. 4 2. I am the attorney for Petitioner-Plaintiff-Appellant Norse Energy Corp. USA (“Norse”) and am fully familiar with the facts and circumstances of this case. 3. I make this Affidavit in support of Norse’s motion for leave to appeal to this Court from the Opinion and Order of the Appellate Division, Third Department, decided and entered on May 2, 2013 (Exhibit A), which affirmed the Decision and Order of the Supreme Court, Tompkins County (Rumsey, J.), entered on February 22, 2012 (Exhibit B), granting summary judgment to Respondents-Defendants-Respondents and dismissing the Verified Petition and Complaint (the “Complaint”). 4. Pursuant to 22 NYCRR § 500.22(b)(6), annexed hereto and incorporated herein by this reference are the following exhibits: Exhibits Description A. The Opinion and Order of the Appellate Division of the Supreme Court, Third Judicial Department, dated May 2, 2013, in the Matter of Norse Energy Corp. USA v. Town of Dryden, 2013 N.Y. Slip Op. 03145 with Notice of Entry; B. The Decision and Order of the Supreme Court, Tompkins County (Rumsey, J.), dated February 21, 2012; C. The Decision and Order of the Supreme Court Appellate Division, Third Department, Substituting Norse Energy Corp. USA, dated October 5, 2012;
  • 5. 5 D. The Decisions and Orders of the Supreme Court, Appellate Division, Third Department, Granting Amicus Status; E. The Memorandum and Order of the Appellate Division of the Supreme Court, Third Judicial Department, dated May 2, 2013 in the Matter of Cooperstown Holstein Corporation v. Town of Middlefield, 2013 N.Y. Slip Op. 3148; and F. Lenape Resources, Inc. v. Town of Avon. 1. Pursuant to 22 NYCRR § 500.22(c), submitted herewith and incorporated herein by this reference are the following materials: a. Volumes I, II and III of the Record on Appeal; b. The Brief of Petitioner-Plaintiff-Appellant Norse Energy Corp. USA; c. The Brief of Respondents-Defendants-Respondents Town of Dryden and Town of Dryden Town Board; d. The Reply Brief of Petitioner-Plaintiff-Appellant Norse Energy Corp. USA; e. The Brief of Proposed Intervenor-Cross-Appellant Dryden Resources Awareness Coalition; f. The Amici Curiae Briefs submitted in Support of Plaintiff’s Appeal: i. New York Farm Bureau; ii. American Petroleum Institute, The Chamber of Commerce of the United States of America and Independent Oil and Gas Association of New York; and
  • 6. 6 iii. Business Council of New York State, Inc., Clean Growth Now, National Association of Royalty Owners, NARO-NY and The Joint Landowners Coalition of New York, Inc.; and g. The Amici Curiae Briefs submitted in Opposition to Plaintiff’s Appeal: i. Town of Ulysses and fifty-one other municipalities together with the Association of Towns of the State of New York, New York Conference of Mayors and New York Planning Federation; ii. Professor Vicki Been and others; iii. Catskill Mountainkeeper and eight other national or local environmental groups; iv. A&E Management & Contracting, Inc., along with twenty-six other New York businesses; and v. Assemblywoman Barbara Lifton. PROCEDURAL HISTORY 5. Beginning in or around December 2006, Norse, through its predecessors Anschutz Exploration Corporation (“Anschutz”) and Ansbro Petroleum Company, began acquiring oil and gas leases in the Town of Dryden, Tompkins County, New York (the “Town”). Record Below (“R.__”) 58, Affidavit of Pamela S. Kalstrom, sworn to September 15, 2011 (“Kalstrom Aff.”), ¶¶ 6, 7. The purpose of the oil and gas leases was to explore and develop natural gas resources underlying the leased properties.
  • 7. 7 R. 58, id. ¶ 5. Norse’s predecessors-in-interest obtained gas leases covering approximately 22,000 acres in the Town and also invested approximately $5.1 million in the exploration and development of these oil and gas leases. R. 59, id. ¶ 11. 6. Subsequently, on August 2, 2011, Respondents-Defendants- Respondents Town of Dryden and the Dryden Town Board (collectively, the “Town Board” or “Respondents”) enacted a zoning amendment which expressly prohibits any and all oil and gas extraction, exploration, development and related activities anywhere within the Town (the “Town Prohibition”). R. 49-51, Complaint ¶¶ 12-17. Specifically, Section 2104 of Article XXI of the Town Prohibition prohibits all oil and gas exploration, extraction, processing and storage and support activities within the geographical borders of the Town, thereby depriving Norse and all other mineral rights owners in the Town of their respective oil and gas estates. R. 50-51, id. ¶ 17. 7. On September 16, 2011, Norse’s predecessor-in-interest (Anschutz) brought an action in the Supreme Court, Tompkins County, challenging the validity of the Town Prohibition. R. 43-45. On October 21, 2011, the Town Board answered and moved for summary judgment, seeking a declaration that the Town Prohibition is valid and a judgment dismissing
  • 8. 8 the Complaint. R. 89-97, 451. Anschutz opposed the motion and cross- moved for the Supreme Court to grant summary judgment in its favor, asserting that the Town Prohibition was expressly and impliedly preempted by the Oil, Gas and Solution Mining Law (“OGSML”), Environmental Conservation Law (“ECL”) Article 23. R. 502, ¶¶ 6-7; R. 51-52, Complaint ¶¶ 19-26 (express preemption cause of action); R. 52-53, Complaint ¶¶ 27- 25 (conflict preemption cause of action); Exhibits A & B. 8. Subsequently, Dryden Resources Awareness Coalition (“DRAC”), an association of Town residents and landowners, moved to intervene and defend the Town Prohibition. R. 658-59. 9. On February 21, 2012, the Supreme Court (Rumsey, J.) rendered its Decision and Order (the “Decision”): (1) granting the Town Board’s motion for summary judgment, concluding that, with the exception of a provision invalidating permits issued by other local or state agencies, the Town Prohibition was not preempted by the OGSML; (2) granting amicus curiae applications of Assemblywoman Barbara Lifton and George A. Matthewson to the extent they related to matters in this proceeding/action; and (3) denying the motion to intervene by DRAC, but granting DRAC amicus curiae status. Exhibit B & R. 14-41.
  • 9. 9 10. Anschutz and DRAC timely appealed from the Decision to the Appellate Division, Third Department. R. 3, 8. 11. Norse was later substituted as a party in the place and stead of Anschutz by Order of the Appellate Division, Third Department. Exhibit C & R. 1, ¶ 2. 12. In addition, several interested groups were granted permission to file amicus curiae briefs on the appeal. See Exhibit A, 2013 N.Y. Slip Op. 03145, at 4-5 n.4 (granting amicus curiae relief to the New York Farm Bureau, 2012 WL 5369074, 2012 N.Y. Slip Op. 89400[U] [3d Dep’t Nov. 1, 2012]; American Petroleum Institute, Chamber of Commerce of the United States of America and Independent Oil and Gas Association of New York, 2012 WL 5457280, 2012 N.Y. Slip Op. 89955[U] [3d Dep’t Nov. 2, 2012]; Business Council of New York State, Inc., Clean Growth Now, National Association of Royalty Owners, NARO-NY and Joint Landowners Coalition of New York, 2012 WL 5619548, 2012 N.Y. Slip Op. 90485[U] [3d Dep’t Nov. 13, 2012]; Town of Ulysses and fifty-one other municipalities, together with the Association of Towns of the State of New York, New York Conference of Mayors and New York Planning Federation, 2012 WL 5896899, 2012 N.Y. Slip Op. 91270[U] [3d Dep’t Nov. 16, 2012]; Member of Assembly Barbara Lifton, 2012 WL 7802752, 2012 N.Y. Slip Op.
  • 10. 10 95156[U] [3d Dep’t Nov. 23, 2012]; Professor Vicki Been and others, 2012 WL 7802749, 2012 N.Y. Slip Op. 95153[U] [3d Dep’t Nov. 23, 2012]; Catskill Mountainkeeper and eight other national or local environmental groups, 2012 WL 7802751, 2012 N.Y. Slip Op. 95155[U] [3d Dep’t Nov. 23, 2012]; and A&E Management & Contracting, Inc., along with twenty- six other New York businesses, 2012 WL 7802750, 2012 N.Y. Slip Op. 95154[U] [3d Dep’t Nov. 23, 2012]. 13. On May 2, 2013, the Third Department rendered its Opinion and Order (the “Appellate Decision”) affirming the Decision. Exhibit A, 2013 N.Y. Slip Op. 03145. Specifically, the Third Department held that (1) the supersession clause of the OGSML, ECL § 23-0303(2), does not expressly preempt the Town Prohibition; and (2) the OGSML does not impliedly preempt the Town Prohibition under principles of conflict preemption. Id., 2013 N.Y. Slip Op. 03145, at 7-15. The Third Department also found that the Supreme Court did not abuse its discretion in denying DRAC’s motion to intervene and granted DRAC amicus curiae status. Id., 2013 N.Y. Slip Op., at 5-6. 14. Here, Norse seeks leave to appeal to this Court from the Appellate Decision. TIMELINESS
  • 11. 11 15. This motion for leave to appeal to this Court is timely. No prior motion for leave to appeal was filed at the Appellate Division. On May 6, 2013, Norse was served with the Appellate Decision sought to be appealed from, with notice of entry. Exhibit A. This motion was served on the Respondents on May 31, 2013, and filed with this Court on May 31, 2013, and is, therefore, timely. See Civil Practice Law and Rules (“CPLR”) §§ 5513(b), 5515(1), 5515(2), R 5516, R 2103(b), and 22 NYCRR §§ 500.21 & 500.22. JURISDICTION 16. This Court has jurisdiction of this motion and of the proposed appeal because the proceeding/action originated in the Supreme Court (see R. 43-45, 14-41), and the Appellate Decision sought to be appealed is an order of the Appellate Division, Third Department, which (1) finally determined the action/proceeding by affirming dismissal of the Complaint and (2) is not appealable as of right. See CPLR §§ 5601, 5602(a)(1)(i); Exhibit A. QUESTIONS PRESENTED FOR REVIEW 17. The following questions are presented for this Court’s consideration on this motion. Question 1:
  • 12. 12 a) Is a municipal zoning ordinance that bans all oil and gas development expressly preempted by the OGSML, which directs that it (1) “shall supersede all local laws and ordinances relating to the regulation of the oil, gas and solution mining industries,” (2) expressly limits the “jurisdiction” of municipalities to local roads and taxation, and (3) regulates where the operator may locate its wells by directing that well location and spacing be established by the New York State Department of Environmental Conservation based upon the location of oil and gas pools, not municipal boundaries, according to specific statutory and regulatory requirements that are designed to meet the statute’s policy objectives of preventing waste, promoting the greater ultimate recovery of oil and gas, and protecting the correlative rights of “all owners” – which policies are fundamental and unique to oil and gas development and totally inconsistent with municipal bans? b) Is this Court’s precedent regarding express preemption under the Mined Land Reclamation Law (“MLRL”) determinative of the express preemption analysis under a wholly different statute – i.e., here, the OGSML – whose language, legislative history, policies, and means and subject matter of regulation differ markedly from that of the MLRL? Stated differently, does this Court’s holding that the
  • 13. 13 MLRL’s supersession language “relating to the extractive mining industry” preempts only local regulation of the operational aspects (i.e., the “how”) of mining, but not local zoning, mandate holding that a different statute’s supersession language “relating to the regulation of the . . . industry” can never encompass “where” the activity takes place, even if that statute explicitly regulates where the activity may occur and has policy objectives that are defeated by parochial zoning bans? The Appellate Decision holds that the OGSML does not expressly preempt the Town Prohibition, and the Third Department reached that result by, in part, relying on this Court’s preemption precedent decided under the MLRL. Exhibit A, 2013 N.Y. Slip Op. 03145, at 11-13. Question 2: Is a municipal zoning ordinance that bans all oil and gas development in conflict with, and thus impliedly preempted by, the OGSML which implements a comprehensive statewide program that regulates both the “how” and “where” of drilling to provide for the operation and development of oil and gas properties in such a manner as to prevent waste, promote the greater ultimate recovery of oil and gas, and protect the correlative rights of “all owners,” where, by virtue of the
  • 14. 14 municipal-wide ban, there can be no drilling and no resource recovery, which results in the ultimate in waste (no production), and the total emasculation of mineral owners’ correlative rights by destroying their right to recover oil or gas from under their property? The Appellate Decision holds that the OGSML does not impliedly preempt the Town Prohibition under conflict preemption principles. Exhibit A, 2013 N.Y. Slip Op. 03145, at 14-15. Specifically, the Third Department found that municipal-wide bans on drilling “may harmoniously coexist” with these policies and the explicit location-based directives of the OGSML.
  • 15. 15 LEAVEWORTHINESS OF THE QUESTIONS PRESENTED FOR REVIEW 18. The questions presented for review merit leave by this Court because they are both novel and of statewide importance. See 22 NYCRR § 500.22(b)(4). 19. On the issue of express preemption, this Court has never before interpreted the scope of supersession of local zoning ordinances under the OGSML’s express supersedure language in ECL § 23-0303(2). Thus, the issue presented is a novel question of statutory construction. 20. Further underscoring the novel nature of the express preemption issue is the manner in which the lower courts of this State have analyzed it. To date, seven lower court Justices have cited this Court’s decision in Frew Run Gravel Prods. v. Town of Carroll, 71 N.Y.2d 126 (1987), in holding that the OGSML does not expressly preempt local zoning bans. Exhibit F, Lenape Resources, Inc. v. Town of Avon, Index No. 1060- 2012, Decision and Order/Judgment (Sup. Ct., Livingston Cnty., Mar. 15, 2013) (Wiggins, J.) (“Lenape”); Exhibit B, Anschutz Exploration Corp. v. Town of Dryden, 35 Misc. 3d 450, 459-60 (Sup. Ct., Tompkins Cnty., 2012) (Rumsey, J.); Appellate Decision (Exhibit A) and Middlefield (Peters, P.J. and Stein, Spain, and Garry, JJ.) (Exhibit E). Frew Run, however, concerned express preemption relative to a sand and gravel mine under the
  • 16. 16 MLRL – a wholly different statute, involving wholly distinct language, legislative history, and policy objectives, as well as the manner and subject matter of regulation. That notwithstanding, beyond citing to Frew Run, two Justices have further opined that Frew Run constrained or compelled the result under the OGSML. See Exhibit F, Lenape at 4 (opining the view that the Frew Run decision is flawed, but also finding that it “compels the conclusion that local zoning ordinances, such as the Local Law at issue, do not ‘relat[e] to the regulation of the oil, gas and solution mining industries within the meaning of the OGSML”); Exhibit B, Decision at 25 (stating that Frew Run “constrained” the result in the instant case). 21. The novelty of this issue, therefore, is established by the fact that this Court has never addressed whether the preemption analysis in Frew Run was intended to make sweeping changes in how preemption is analyzed in the context of local home rule authority relative to other State statutes. In short, if Frew Run is intended to be applied to constrain the preemption analysis of statutory schemes wholly distinct from the MLRL – with the end result being a bright line rule that the statutory phrase “relating to the regulation of the . . . industry” can never encompass “where” the regulated activity takes place, even if the statutory scheme explicitly regulates where the activity may take place and is motivated by statutory objectives that are
  • 17. 17 defeated by parochial zoning bans – then this Court should take up that novel question and definitively rule on the issue. 22. Further highlighting the novelty of the issue of express preemption under the OGSML is the unique evolution of the OGSML and the specific terms of art contained in this statute (including in the declaration of policy), all of which wholly distinguish the OGSML from the MLRL. See generally, R. 501-21, ¶¶ 8-37 & Exhibits cited therein; see also ECL § 23-0301. 23. The OGSML is the result of New York’s membership in the Interstate Oil and Gas Compact Commission (the “Commission”), a multi- state governmental agency of a group of oil and gas producing states, whose purpose “is to conserve oil and gas by the prevention of physical waste from any cause.” R. 503-04, ¶¶ 8-13; ECL Article 23, Title 21. The Commission arose in a climate where lack of regulation was resulting in overproduction and the waste of oil and gas resources in producing states. R. 503, ¶ 8. These states endorsed, and Congress ratified, the Interstate Compact to resolve these issues. Id. The Interstate Compact requires each member state to enact laws that prevent, among other things, “[t]he drilling, equipping, locating, spacing or operating of a well or wells so as to bring about physical waste of oil or gas or loss in the ultimate recovery thereof.” R. 503, ¶ 11;
  • 18. 18 ECL § 23-2101, Article III (e). New York became a member state of the Commission and enacted the Interstate Compact in 1941 and remains a member state today. R. 504, ¶ 13. The OGSML’s precursor statute, and ultimately the OGSML, were enacted in response to the requirements of the Interstate Compact. See R. 504-07, ¶¶ 13-22. 24. Having been modeled on the Interstate Compact, the OGSML contains terms of art that are unique to the oil and gas industry, therefore distinguishing this statutory scheme from any other, including the MLRL. These terms are reflected in, among other provisions, the declaration of policy, ECL § 23-0301, which directs that development and production of oil and gas resources are to be performed in such a manner that “will prevent waste, . . . that a greater ultimate recovery of oil and gas may be had, and that the correlative rights of all owners and the rights of all persons including landowners and the general public may be fully protected . . . .” See also Western Land Servs. v. Department of Envtl. Conservation, 26 A.D.3d 15, 17 (3d Dep’t 2005) (recognizing critical legislative purposes of OGSML including insuring maximum recovery, preventing waste and protecting correlative rights). 25. In accord with the Interstate Compact, ECL § 23-0101[20][c] defines the oil and gas term “waste” as, inter alia, “[t]he locating, spacing,
  • 19. 19 drilling, equipping, operating or producing of any oil or gas well . . . in a manner which causes or tends to cause reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations.” 26. The protection of the “correlative rights of all owners” also has a very specific meaning as an oil and gas phrase of art. It means that the “owner” – “the person who has a right to drill into and produce from a pool” – is entitled to a reasonable opportunity to recover or receive the oil or gas (or the equivalent thereof) attributable to its property, regardless of where the well is drilled. See ECL § 23-0101(11) (defining “owner”); see also Sylvania Corp. v. Kilborne, 28 N.Y. 427, 431 n.3 & 433 (discussing correlative rights under Conservation Law precursor to ECL Article 23 and stating that the doctrine of correlative rights provides for equitable apportionment among landholders of the migratory gas and oil underlying their land); 6 NYCRR § 550.3(ao) (defining protection of correlative rights to mean “that the action or regulation by the department shall afford a reasonable opportunity to each person entitled thereto to recover or receive the oil or gas beneath his tracts or the equivalent thereof without being required to drill unnecessary wells or to incur other unnecessary expenses to recover or receive such oil or gas or its equivalent”).
  • 20. 20 27. While the OGSML also declares, as an independent policy, that the rights of all landowners and the general public are to be protected, that articulation follows the other policies that are based upon oil and gas terms of art per the requirements of the Interstate Compact. See ECL § 23-0301. Moreover, this general welfare objective is meant to be accomplished through the comprehensive scheme contained in the OGSML, which the New York State Department of Environmental Conservation regulates statewide through rules, regulations, a Generic Environmental Impact Statement, and the ongoing development of the Supplemental Generic Environmental Impact Statement relative to high-volume hydraulic fracturing. R. 508-11, ¶¶ 30, 33, 34, 36, 37; see also Matter of Envirogas, Inc. v. Town of Kiantone, 112 Misc. 2d 432, 434-35 (Sup. Ct., Erie Cnty.), aff’d, 89 A.D.2d 1056 (4th Dep’t 1982), lv. denied, 58 N.Y.2d 602 (1982). In any event, that the rights of landowners and the general public are to be protected (i.e., through State controls) does not diminish the declared policy that the correlative rights of “all owners” must be protected, and not just the rights of those owners located in municipalities that allow drilling (which is the troubling result of the Appellate Decision).
  • 21. 21 28. Because the policies of protecting correlative rights of all owners and preventing waste of the resource are key to the OGSML, but are not contained in the MLRL, these two statutory schemes are wholly distinct. 29. In short, the unique evolution and nature of the OGSML wholly distinguish it from the MLRL (and any other statutory scheme). Thus, with all due respect, the Third Department seemingly was misguided in relying on MLRL preemption precedent to decide the question of express preemption under the OGSML. Because this Court has never addressed the scope of express preemption under ECL § 23-0303(2), or the effect (if any) of MLRL precedent on that analysis, this Court should decide this issue of first impression. 30. The implied preemption question is likewise novel. This Court has never addressed whether a municipal-wide ban on oil and natural gas drilling can be squared with (1) the OGSML’s explicit well location and spacing directives that depend upon the physical location of the underground gas “pool,” not municipal boundaries, or (2) the statute’s underlying policies of protecting correlative rights, preventing waste, and maximizing resource recovery. Moreover, MLRL precedent is wholly irrelevant to this issue because, as already explained, the MLRL does not have the policy underpinnings of preventing waste and protecting the correlative rights of
  • 22. 22 “all owners.” Thus, the question of implied preemption under the OGSML is also a matter of first impression, which should be decided by this Court. 31. Notably, the Colorado Supreme Court, interpreting a similar statutory scheme with the very same statutory policies as the OGSML, held that a municipal ban on drilling analogous to the Town Prohibition conflicted with the policies of protecting correlative rights, preventing waste, and maximizing recovery. See Voss v. Lundvall Bros., Inc., 830 P.2d 1061, 1067 (Colo. 1992). The Colorado Supreme Court thus invalidated the local ban, finding it conflict preempted. Id. Significantly, the court’s reasoning is based on the unique nature of oil and gas – namely, that because oil and gas are found in underground pools based on geology and geophysical properties (rather than municipal boundaries), wells must be properly located in order to produce effectively, prevent waste and protect correlative rights. Id. Because municipal bans preclude proper well location and could bar resource recovery altogether relative to some owners, drilling bans necessarily conflict with these policies and are, therefore, invalid. Id. 32. Specifically, the Colorado Supreme Court observed: Oil and gas are found in subterranean pools, the boundaries of which do not conform to any jurisdictional pattern. As a result, certain drilling methods are necessary for the productive recovery of these resources . . . . [I]t is often necessary to drill wells in a pattern dictated by the pressure characteristics of the pool, and because each well will only drain a portion of the
  • 23. 23 pool, an irregular drilling pattern will result in less than optimal recovery and a corresponding waste of oil and gas. Moreover, an irregular drilling pattern can impact on the correlative rights of the owners of oil and gas interests in a common source of supply by exaggerating production in one area and depressing it in another. Because oil and gas production is closely tied to well location, [a municipality’s] total ban on drilling . . . could result in uneven and potentially wasteful production . . . . [The] total ban, in that situation, would conflict with the [state agency’s] express authority to divide a pool of oil or gas into drilling units and to limit the production of the pool so as to prevent waste and to protect the correlative rights of owners . . . . In our view, the state’s interest in the efficient and fair development and production of oil and gas resources in the state, including the location and spacing of individual wells, militates against a home-rule city’s total ban on drilling within city limits. Voss, 830 P.2d at 1067 (emphasis added); see also id., at 1067 n.3 (quoting state law, defining “waste” in a manner identical to that in ECL § 23- 0101[20][c]). 33. The conflict preemption question under the OGSML, being a matter of first impression that impacts this State’s energy policy and potentially affects every mineral rights owner in this State, should be decided by this Court. 34. Indeed, the question of whether the OGSML preempts local zoning, be it expressly or impliedly, is plainly a matter of statewide importance, thus underscoring the leaveworthiness of the issue. At the outset, the statewide importance of this matter is demonstrated by the large
  • 24. 24 number of amici who participated below and spoke to both sides of the issue. See Exhibit D. 35. Moreover, the import of this issue to landowners statewide and this State’s energy policy is apparent. While this case relates to a municipal ban in one town, the Appellate Decision effectively authorizes each and every municipality across New York State to ban oil and gas development. In fact, to date, approximately 150 municipalities have enacted bans or moratoria on natural gas drilling which affect thousands of acres of property. Based upon the recent decisions of the Appellate Division, Third Department, upholding the legality of such bans, more localities are almost certain to follow suit. See http://www.fractracker.org/maps/ny-moratoria/ for an updated list of those municipalities that have enacted bans or moratoria. 36. As these bans are enacted, the correlative rights of landowners and lessees are being destroyed, the objective of effective resource development thwarted, and the ultimate in waste of New York’s oil and gas resources assured, all on a statewide basis. Taken together, the ability of localities to “zone out” oil and gas drilling could toll the death knell for development of this State’s indigenous resources in direct conflict with the explicit policy objectives of the ECL (promoting recovery, preventing waste
  • 25. 25 and protecting the correlative rights of “all owners”) and the express policy of the New York Energy Law. See Energy Law § 3-101(5) (declaring it to be State policy “to foster, encourage and promote the prudent development and wise use of all indigenous state energy resources including, but not limited to, on-shore oil and natural gas, off-shore oil and natural gas, natural gas from Devonian shale formations . . . .” [L.1978, c. 396]). Aside from the cumulative evisceration of available leasing area resulting from the ever- increasing number of municipal bans, operators surely will be reluctant to pursue development in New York if their investment can be obliterated by the simple majority vote of a municipal board. Accordingly, given the importance of this issue to mineral rights owners throughout the State and the potential ramifications statewide relative to New York’s energy policy, it is respectfully submitted that the interpretative questions presented in this motion should be decided by this Court. DISCLOSURE STATEMENT: 22 NYCRR 500.1(f) 37. Plaintiff-Petitioner, Norse Energy Corp. USA is a New York corporation that is a wholly-owned subsidiary of Norse Energy Holdings, Inc., a Delaware corporation that is a wholly-owned subsidiary of Norse Energy Corp. ASA, a publicly-traded Norwegian company. Vandermark Exploration, Inc. is a New York corporation that is a wholly-owned
  • 26. 26 subsidiary of Norse Energy Corp. USA. Strategic Energy Corp. and MariCo Oil and Gas Corp. are inactive companies that are affiliated with Norse Energy Corp. USA
  • 27. 27 CONCLUSION 38. For all of the foregoing reasons, I respectfully request that this Court grant Norse’s motion for leave to appeal so that this Court may decide these novel questions of statewide importance. Dated: May 31, 2013 Respectfully submitted, ______________________ Thomas S. West SWORN TO BEFORE ME THIS 31st DAY OF MAY 2013 ________________________ Notary Public