The city has lost a round in its legal wrangling going back more than five years with an area oil and natural gas drilling firm.
On July 13, Summit County Common Pleas Judge Paul J. Gallagher ordered Munroe Falls to pay Ravenna-based Beck Energy $45,000 for “reasonable attorney’s fees and expenses incurred” in a request for declaratory judgement case the city filed last year, according to court records. Gallagher, in his decision, referred to the city’s case as “frivolous litigation conduct” because, he said, the matter had been dealt with in a 2015 Ohio Supreme Court decision.
The latest litigation was connected with a well that Beck Energy planned to drill on a vacant portion of the Sonoco paper mill property off North Main Street.
“The City of Munroe Falls respectfully disagrees with the July 13, 2017 decision of the Court of Common Pleas awarding fees to Beck Energy,” says a written statement from the city.
The court’s decision stemmed from a declaratory judgement action filed by the City of Munroe Falls on May 27, 2016. That declaratory judgement action was designed to seek clarification from the court on whether local communities have authority to impose any restrictions or even seek information from a drilling company when unelected administrative authorities such as the Ohio Department of Natural Resources have granted permits.
The court answered the question in the negative and then determined that the city’s request constituted frivolous misconduct.
“The city’s disagreement with the court’s decision on the issue of ‘frivolous misconduct’ is based upon disputed factual evidence that was not addressed by the court in its decision and also a legal issue that it believes was wrongfully decided,” the city stated. “The city believes that the court of appeals will resolve both of these issues in its favor.”
Mayor James Armstrong declined additional comment July 20 because an appeal in the Ninth District Court of Appeals is pending.
Beck Energy President Raymond Beck told the Stow Sentry July 20 that he is satisfied with the decision.
“The original lawsuit five years ago should never have happened,” said Beck. “Beck Energy never broke any laws in drilling our well at that time.
“We turned the Sonoco well on in January 2017. (Six) months later, there have been no complaints from anyone. We are thankful to Judge Gallagher in awarding us a settlement.”
The city’s battles with Beck Energy go back to 2011, with cases in the common pleas and appellate courts and then in the Ohio Supreme Court. The issue has been one of regulation, local zoning codes versus state law that grants authority to the OGNR.
In a February 2015 decision, the high court ruled 4-3 that the state has “sole and exclusive authority” over regulation of oil and gas wells. But while he was part of the majority on the decision, Justice Terrence O’Donnell separately wrote that the opinion does not address local land use ordinances.
Armstrong told the Stow Sentry last year that this was the crux of the city’s request for a declaratory judgement.
According to the city’s complaint filed last year, oil and gas wells are conditionally permitted under city zoning codes in I-1 industrial zoning districts, which total about 32 of the city’s more than 1,700 acres. The Sunoco parcel, however, is zoned R-4 residential, which would require a zoning variance to drill a well and Armstrong said the city was trying to seek clarification as to whether it can demand that Beck seek a variance.
In July 2016, Gallagher ruled against the city, stating that state law takes precedence over local zoning codes. In the meantime, Beck filed four counterclaims against the city.
Beck dismissed the counterclaims this past February, but then filed a motion for sanctions requesting that the court order the city pay Beck for its costs in the litigation.