Opponents of fracking rally at the New York State Department of Environmental Conservation on Oct. 30, 2013.
Opponents of fracking rally at the New York State Department of Environmental Conservation on Oct. 30, 2013. (AP/Mike Groll)

ALBANY – Localities may use zoning ordinances to restrict or ban oil and gas production—including the controversial method of extracting natural gas known as “fracking”­—without violating state mining laws, a divided state Court of Appeals ruled Monday.

The 5-2 court decided that bans against fracking, or hydraulic fracturing, enacted by Dryden in Tompkins County and Middlefield in Otsego County are not barred by the “supersession” clause contained in §23-0303(2) of the state Environmental Conservation Law. The statute holds that the state law shall “supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries.”

The court held that the clause refers only to local laws or ordinances that seek to supplant the state’s role as regulator of the “safety, technical and operational aspects of oil and gas activities across the state”—not local zoning laws about where mining may be conducted.

“Nothing in the legislative history [of the state law] undermines our view that the supersession clause does not interfere with local zoning laws regulating the permissible and prohibited uses of municipal land,” Judge Victoria Graffeo (See Profile) wrote for the majority.

Chief Judge Jonathan Lippman (See Profile) and Judges Susan Phillips Read (See Profile), Jenny Rivera (See Profile) and Sheila Abdus-Salaam (See Profile) joined in her opinion.

The court said its ruling was consistent with its 1987 decision in Matter of Frew Run Gravel Prods. v. Town of Carroll, 71 NY2d 126, which held that state law did not supersede a zoning ordinance which prohibited local sand and gravel mining.

The majority stressed its decision was not pro- or anti-fracking. The technique, which involves injecting fluids into the ground at high-pressure, has been condemned by some environmentalists as unsafe while being embraced as a panacea by advocates for economic development, who say it could revitalize scores of struggling upstate communities.

The state has maintained a moratorium on fracking since 2008 and Gov. Andrew Cuomo has said his administration has been studying its safety since he took office in January 2011.

However, many anti-fracking activists are not willing to count on the state ban continuing.

About 30 municipalities have enacted zoning bans of fracking and 70 or 80 others are poised to put bans in place or have discussed doing so.

A swath of upstate New York centered in the Southern Tier around Binghamton sits atop the Marcellus Shale formation, where energy companies say drilling for natural gas is viable using fracking techniques.

Home Rule at Issue

Graffeo said the court’s concern was also about the integrity of the concept of “home rule,” whereby municipalities and their residents should determine the character of their communities.

“These appeals are not about whether hydrofracking is beneficial or detrimental to the economy, environment or energy needs of New York, and we pass no judgment on its merits,” Graffeo said. “These are major policy questions for the coordinate branches of government to resolve. The discrete issues before us, and the only one we resolve today, is whether the state Legislature eliminated the home rule capacity of municipalities to pass zoning laws that exclude oil, gas and hydrofracking activities in order to preserve the existing character of their communities.”

In dissent, Judge Eugene Pigott Jr. (See Profile) said the challenged ordinances went beyond land-use regulation by creating a “blanket ban on an entire industry without specifying the zones where such uses are prohibited.”

“Where zoning ordinances encroach upon the [state Department of Environmental Conservation's] regulatory authority and extend beyond the municipality’s power to regulate land use generally, the ordinances have run afoul of ECL §23-0303(2),” Pigott wrote.

Judge Robert Smith (See Profile) joined in the dissent.

The court’s ruling encompassed two cases, Matter of Wallach v. Town of Dryden, 130, and Cooperstown Holstein Corporation v. Town of Middlefield, 131, The court upheld Appellate Division, Third Department, in both cases (NYLJ, May 3, 2013).

Deborah Goldberg, counsel for the Manhattan-based environmental group Earthjustice, defended the Dryden law on the town’s behalf. She said she became involved in the case when filing an amicus curiae brief in the Middlefield case, and town officials asked her to represent Dryden pro bono.

Goldberg said she expected the ruling to shift the emphasis of the struggle over fracking in New York from statewide to the local level.

In addition to waiting for the Cuomo administration’s scientific study of fracking, the state Assembly last month passed a resolution by an 89-34 vote that calls for a three-year moratorium on fracking.

The Senate did not take up the measure before concluding its regular legislative session.

“I would assume that this [ruling] will encourage municipalities with bans pending to complete the process,” Goldberg said. “There may be other towns that were waiting to see what the court would do, and now that they see they can do this and not run legal risks, they will also go forward.”

She said she received congratulations from as far away as Canada, New Mexico and California following Monday’s ruling. “I think it is going to be inspiration for people across the country,” she said.

Scott Kurkoski, a partner at Levene Gouldin & Thompson in Vestal, represented the Cooperstown Holstein Corporation in its challenge to the Middlefield ordinance.

He said it was bad for both federal and New York state energy policy that Cuomo has failed to deal with fracking because of the “difficult political problem” it presents for him.

“The governor has said that any town that doesn’t want to do this should not have to,” Kurkoski said in an interview. “Now we have a clear ruling from our high court that towns that would like to ban this may ban it. But that should also mean that towns that want to move forward with fracking should be able to do it.”

Kurkoski said he was disappointed that the ruling “failed to address the overriding state interest in energy independence.”

“New York state’s energy policy should not be decided by 932 towns,” Kurkosky said, repeating a comment he made to the Court of Appeals’ judges during oral arguments on June 3 (NYLJ, June 4).

John Henry, a partner at Whiteman Osterman & Hanna in Albany, argued on behalf of Middlefield.

Thomas West, a partner in the West Law Firm in Albany, represented Mark Wallach in the Dryden case. Wallach is Chapter 7 trustee for North Energy Corp. USA, the appellant in the Dryden matter.