Monday, May 25, 2015

Stewart on Fracking in Ohio

FennerFenner Stewart (Calgary) has posted When the Shale Gale Hit Ohio: The Failures of the Dormant Mineral Act, Its Heroic Interpretations, and Grave Choices Facing the Supreme Court (Capital Law Review) on SSRN.  Here's the abstract:

As stories of signing bonuses and the promise of rich gas royalties spread through the local communities in Eastern Ohio, owning land was like owning a lottery ticket. For some, fortunes were made over night. For others, their land was not over the sweet spots of the shale plays. And for others still, what appeared to be their easy path to prosperity was blocked, much to their surprise and chagrin, by title ambiguities. It was at this point that Ohio’s dormant mineral rights became litigious, and the Ohio Dormant Mineral Act (ODMA) was scrutinized for the first time. In fact, to say that the ODMA was scrutinized may be an understatement, as local lawyers have commented: "The amount of litigation that has been generated involving Ohio’s DMA during the past three years [2011-2014] has rarely been seen with regard to a single statute."

Ohio’s Seventh District Court of Appeals recently attempted to remedy the ODMA’s ambiguities. The appellate court, however, may not have the final word on the matter. The Ohio Supreme Court will review a number of issues in the coming year, and there are still others which may ultimately need to be reviewed. In light of this, this article will evaluate the appellate court’s judgments. This study is confined to research the following issues: (1) whether all three appellant panels correctly determined that the 1989 version provides for automatic vesting; (2) whether the court in Eisenbarth correctly determined that the look-back period under the 1989 version is for a fixed twenty-year period; and (3) what is the proper interpretation and application of the title transaction savings event. This article will argue for automatic vesting, argue against a fixed look-back period, and finally, offer some guidance as to the application of the title transaction savings event.

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