On February 17, 2015, the Ohio Supreme Court announced its ruling in The State Ex Rel. Morrison v. Beck Energy Corporation et al. That closely-watched case addressed whether local ordinances that impact drilling operations are preempted by the Ohio Department of Natural Resources’ (ODNR’s) authority to issue oil and gas drilling permits under R.C. Chapter 1509. In this case, Beck Energy had received a permit from ODNR to drill for oil and gas in the city of Munroe Falls. As Beck Energy began its operations, Munroe Falls successfully sought an injunction from an Ohio state court based on Beck Energy’s non-compliance with several local ordinances, including requirements to obtain a “zoning certificate,” pay a specified fee, and secure a performance bond. The court of appeals reversed the trial court, holding that Ohio’s Home Rule Amendment did not allow the city to impose its own permit requirements on oil and gas drilling operations.
In a clear victory for Beck Energy, a divided Ohio Supreme Court agreed with the appeals court ruling and invalidated all five local ordinances. A close reading of the multiple opinions, however, shows that the court did not categorically preempt all forms of local regulation that impact drilling operations. Rather, it left the door open for further litigation regarding whether “local land use ordinances that address only the traditional concerns of zoning laws, such as ensuring compatibility with local neighborhoods, preserving property values, or effectuating a municipality’s long-term plan for development, by limiting oil and gas wells to certain zoning districts” are enforceable. In other words, the court invalidated what it considered to be a “separate permitting regime” at the local level, but declined to rule on whether more traditional exercises of local zoning that impact drilling operations are enforceable.