2020 Ohio 5482
Ohio2020Background
- AWMS obtained a lease and permits to build and operate two Class II saltwater‑injection wells on 5.2 acres in Trumbull County, Ohio, and spent about $5.6 million developing the facility.
- After small earthquakes near the site in July–August 2014, ODNR’s Division of Oil and Gas (the division) suspended operations at AWMS’s deeper well (#2) while allowing well #1 to operate; AWMS submitted restart plans that the division found inadequate or did not respond to.
- The Ohio Oil and Gas Commission upheld the suspension; the common‑pleas court vacated that order as unreasonable for failing to respond to AWMS’s plan; the Tenth District reinstated the suspension; AWMS’s appeals to this court were denied.
- AWMS filed a mandamus action seeking an order compelling the state to commence appropriation proceedings, claiming the suspension effected a regulatory taking (both total and partial) requiring just compensation.
- The Eleventh District granted summary judgment for the state; the Ohio Supreme Court reversed, holding genuine issues of material fact exist as to both total‑taking (Lucas) and partial‑taking (Penn Central) claims and that the state waived its nuisance defense on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ripeness / final decision | AWMS contends agency ignored its restart plans; further admin process would be futile so claim is ripe | State says AWMS must submit a new plan and obtain a final agency decision before ripeness | Court: AWMS’s claim was ripe; division rebuffed/ignored prior plans and creating moving targets would be unfair |
| Temporary vs. permanent taking | AWMS argues suspension is open‑ended and effectively permanent because division controls restart | State argues suspension is temporary and revocable, so Lucas categorical rule doesn't apply | Court: Suspension is indefinite (no fixed end); it cannot be treated as a finite temporary moratorium for Lucas/Tahoe‑Sierra purposes |
| Total taking under Lucas (all economically beneficial use) | AWMS’s expert computed net‑present‑value losses showing loss >99% (near or total loss of investment) | State experts give much smaller losses and attribute decline to capacity limits and market factors | Court: Genuine factual dispute over economic impact; summary judgment improper — remand to weigh evidence; state waived nuisance defense because it did not ground it in Ohio property/nuisance law on summary judgment |
| Partial taking under Penn Central (ad‑hoc balancing) | AWMS: economic impact and interference with investment‑backed expectations support taking; character of action contested | State: regulation protects public health and safety; AWMS entered a highly regulated industry and knew seismic risks | Court: Genuine disputes on economic‑impact and expectations; character factor favors state (harm‑prevention); remand to weigh evidence and apply Penn Central balancing |
Key Cases Cited
- Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (categorical rule: regulation that deprives property of all economically beneficial use is a taking unless barred by background principles)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) (ad hoc three‑factor test for partial regulatory takings)
- Lingle v. Chevron U.S.A., 544 U.S. 528 (2005) (clarified relationship between Lucas and Penn Central tests)
- Tahoe‑Sierra Preservation Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302 (2002) (temporary moratoria of finite reasonable duration analyzed under Penn Central rather than Lucas)
- Williamson County Regional Planning Comm. v. Hamilton Bank, 473 U.S. 172 (1985) (ripeness requires final agency decision; cited with discussion of futility)
- State ex rel. Shelly Materials, Inc. v. Clark Cty. Bd. of Commrs., 115 Ohio St.3d 337 (2007) (Ohio application of Penn Central framework)
- State ex rel. R.T.G., Inc. v. State, 98 Ohio St.3d 1 (2002) (plurality discussing complexity of regulatory takings)