2019 Ohio 923
Ohio Ct. App.2019Background
- Relators (AWMS entities) obtained permits and operated two salt‑water injection wells in Weathersfield Township; AWMS #2 accounted for 95% of injections.
- After seismic events in 2014 near the AWMS site that experts linked to AWMS #2, ODNR Division issued a Suspension Order halting AWMS #2 and requiring a detailed seismic‑risk plan; AWMS #2 has not operated since.
- AWMS appealed the Suspension Order to the Ohio Oil & Gas Commission (affirmed) and pursued administrative and common‑pleas appeals; the Tenth District ultimately upheld the Suspension Order as reasonable and Ohio Supreme Court declined jurisdiction.
- AWMS filed a mandamus petition seeking to compel ODNR to commence appropriation (eminent‑domain) proceedings, alleging either a categorical taking (total deprivation) or a partial regulatory taking.
- The court considered takings law (Lucas/Loretto/Penn Central), reviewed the record (AWMS’s continued operations at the site in some capacities, investor disclosure of seismic risks, failure to perform subsurface testing, and AWMS’s deficient restart plan), and applied collateral estoppel to the Tenth District’s reasonableness ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Suspension Order effects a categorical taking (total deprivation) | AWMS: Order eliminated economically viable use of property and thus requires appropriation | ODNR: Site retained value; AWMS continued some operations and property can be used for other brine‑related activities | Held: No categorical taking; summary judgment for respondents — property not totally deprived of economic use |
| Whether the Suspension Order effects a partial regulatory taking under Penn Central | AWMS: The suspension and delay are severe and unreasonable, interfering with investment‑backed expectations | ODNR: Action protects public safety, was reasonable (Tenth Dist.) and AWMS lacked objectively reasonable investment‑backed expectations given disclosed risks | Held: No partial taking; summary judgment for respondents — Penn Central factors favor respondent |
| Whether AWMS had reasonable, investment‑backed expectations | AWMS: Obtained permits and expected profitable operations | ODNR: AWMS disclosed seismic risks, did not do subsurface testing, and accepted regulatory oversight — expectations were speculative | Held: Expectations were not objectively reasonable; favors respondents |
| Whether ODNR’s conduct was arbitrary or unduly dilatory (affecting takings analysis) | AWMS: ODNR refused reasonable restart conditions and delayed unreasonably | ODNR: Developed nationwide guidelines, properly evaluated site‑specific risk, and found AWMS’s plan inadequate | Held: No unreasonable delay or arbitrariness; Tenth District’s reasonableness ruling preclusive |
Key Cases Cited
- Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (permanent physical occupation is a categorical taking)
- Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (regulations depriving owner of all economic use are categorical takings)
- Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978) (ad‑hoc test for non‑categorical regulatory takings)
- Chicago, B. & Q. Co. v. Chicago, 166 U.S. 226 (1897) (Just Compensation Clause applies to states)
- State ex rel. Shelly Materials v. Clark Co. Bd. of Comm’rs, 115 Ohio St.3d 337 (2007) (discussing categorical takings and Penn Central factors in Ohio)
- State ex rel. Levin v. Sheffield Lake, 70 Ohio St.3d 104 (1994) (mandamus is the vehicle to compel appropriation proceedings for alleged involuntary takings)