Munroe Falls -- The city has suffered a setback in its battle over local control of oil and natural gas drilling within its boundaries.

In a July 14 decision on a request for declaratory judgement the city filed in May, Summit County Common Pleas Judge Paul Gallagher said state law granting the authority for drilling to the Ohio Department of Natural Resources takes precedence over a city ordinance requiring that Beck Energy apply for a zoning certificate.

The case stems from Beck's plans to drill a well on a parcel of land owned by South Carolina-based Sonoco Products Co. just west of Sonoco's paper mill on the west side of Route 91, a little north of Munroe Falls Avenue.

"Because of this conflict, Munroe Falls is not entitled to the declaratory judgement it seeks in this case," wrote Gallagher.

Gallagher also said a decision on four counterclaims filed by Beck Energy against the city "remains pending before the court."

"Basically, the court has found that our codified ordinances are in conflict with state law," Law Director Tom Kostoff said during City Council's July 19 regular meeting.

Kostoff added that the result of Gallagher's decision is "essentially dismissing our declaratory judgement matter."

"This basically means we're dead in the water," said Councilor Mike Barnes.

Beck Energy President Raymond Beck did not return a phone call seeking comment before press time.

"Obviously, Beck Energy was pleased with the decision," said Beck Energy attorney Scott Zurakowski July 21. "We thought it was the right decision because the court obviously picked up on the arguments that Beck was making that this codified ordinance Munroe Falls was trying to enforce conflicts with state law, which regulates oil and gas drilling in the state of Ohio."

Zurakowski said it was uncertain when drilling operations at the site would begin.

"As soon as possible," he said. "I know that Beck is in the process of rescheduling the drilling rig to get out to the site to commence drilling."

Mayor James Armstrong told the Stow Sentry July 20 that the city is considering filing an appeal of the decision in the Ninth District Court of Appeals.

"We have a right to appeal. That's a decision we haven't made yet," said Armstrong, adding that the city has about 30 days to file an appeal from the time that Gallagher rendered his decision.

"Hopefully, we'll have an answer as to whether we will appeal by next week," he said. "Certainly, by [Council's Aug. 2 meeting]."

Armstrong told Council that the city filed the request for declaratory judgement May 27 to seek information about what authority the city has in light of what it perceived as an ambiguous decision made by the Ohio Supreme Court in February 2015 in a case the city filed against Beck Energy.

"We just wanted an answer -- 'Can the city enforce the zoning codes?'" said Armstrong.

"And we wanted an answer in the quickest amount of time," said Kostoff.

According to court documents, ODNR issued a new drilling permit to Beck Energy June 16 which expires June 18, 2017. A previous one-year permit expired in April.

Two sides argue

over authority

The city's various legal fights with Beck Energy extend back to 2011. In its most recent case, the city argued that while state law gives the ODNR authority to regulate oil and gas production in the state, the law "does not expressly prohibit the enforcement of local zoning ordinances."

But in explaining his decision, Gallagher said that while the high court case dealt with a different section of the city's codified ordinances that it ruled was in conflict with state law, both sections include the zoning certificate requirement, the matter at the heart of the current case.

"...the Ohio Supreme Court determined that requiring a zoning certificate under [city ordinances] is preempted by [state law] because of these conflicts," wrote Gallagher.

Zurakowski said this was at the core of Beck's argument.

"Obviously, the court followed our reasoning in finding that the [Supreme Court case] dealt with the same zoning certificate," he said.

In court documents, the city also cited concerns about a "municipal water field" operated by Cuyahoga Falls about a half mile to the west of the proposed well site, saying that if the "integrity" of the field is "compromised" by the well, "the communities of Munroe Falls, Cuyahoga Falls, and Silver Lake would be without an immediate water supply source."

Gallagher said this argument "appears the only legitimate distinguishing aspect" between the latest case and the Supreme Court case.

But in court filings, Zurakowsi said that the location of the water source, "is well in excess of the distance required by State statute" of no closer than 50 feet of a body of water.

And Gallagher noted that the ODNR permit includes specific construction requirement to protect water sources.

At Councilor Steve Stahl's request, Service Director Jim Bowery said he would contact Cuyahoga Falls to determine if the water in the field can be tested in advance of any drilling in the event that drilling does cause contamination.

"I just don't want to be in the position where a defense is that [contaminants] could have been there beforehand," said Stahl.

Counterclaims unresolved

"What remains is Beck Energy's counterclaims," Kostoff told Council July 19.

The four allegations made against the city in Beck Energy's July 5 counterclaim include:

/ The city's actions constitute an "interference with business relationship" between Beck Energy and Sonoco.

/ The city "acted to deprive...Beck energy, of all economically beneficial use of its protected private rights and interests in its private property mineral interests..." without "just compensation" in violation of both the U.S. and Ohio constitutions.

/ The city failed to provide "procedural due process" under the U.S. Constitution and state law.

/ The city failed to provide "substantive due process" by "enforcing the City of Munroe Falls' zoning ordinance in a manner that is arbitrary, capricious, in bad faith, in direct contradiction" to the Ohio Supreme Court decision.

Armstrong told the Stow Sentry that the counterclaims are a factor in the city's appeal decision.

"Part of the case is still pending, so that's kind of weighed into the matter as well," he said.

Editor's note: Senior Editor Marsha McKenna contributed to this story.

Email: jsaunders@recordpub.com

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