3rd Circuit Upholds Private Property Rights

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In Minard Run Oil Company, et al v.
United States Forest Service, et al
Nos. 10-265 and 10-2332 the US
Court of Appeals for the 3rd Circuit faced an appeal of a courageous
opinion by US District Judge Sean J. McLaughlin preliminarily enjoining efforts
of the US Forest Service to impose policies that would have virtually
terminated any meaningful rights of the owners of oil and gas underlying the
Allegheny National Forest to develop their properties.  The actions of the
Forest Service in the case are remarkable. 

 

The Forest Service,
the "Forest Service Employees for Environmental Ethics," the Sierra
Club and the "Allegheny Defense Project" became parties to what this
writer can only conclude to have been a very friendly "lawsuit" that
was "settled" by the Forest Service and the other parties agreeing to
impose burdens on the oil and gas industry operating within the forest that
were simply not supported by any clear legal authority.  The Forest
Service even agreed to pay nearly $20,000 in public money toward the legal fees
of its "antigonists" as part of the
"settlement."    

 

Minard Run, the Pennsylvania Independent Oil and Gas Association, the
Allegheny Forest Alliance and the County of Warren, Pennsylvania, filed the
action to obtain an injunction against the Forest Service implementing its
planned regulatory regime allegedly required by the
"settlement."   The District Court, after exhaustive review
and supported by a most thorough opinion,  (See, 2009 WL 4927785) granted
the requested preliminary injunction.

 

The district and
circuit court opinions in this case  provide absolutely clear statements
of essential principles that set enforceable limits upon environmental
regulatory regimes that impact private property rights.  The district
court did a masterful demonstration of a proper balancing of equities between
private rights and alleged public concerns.  The Circuit reviewed that
balancing effort in great detail and approved it without qualification. 
The Circuit also clearly ruled that equitable relief is available to targets of
public agency action where the "potential economic loss is so great as to
threaten the existence of the movant's business...."  The Circuit
also expressly recognized that under Pennsylvania law "the mineral estate
is the dominant estate and entails the right to use of as much surface land as
reasonably necessary to extract the minerals" and that "[a]lthough
the mineral owner must show "due regard" to the rights of the surface
owner, the mineral owner need not obtain consent or approval before entering
land to mine for minerals." 

 

In a prior litigation
with the Forest Service, Minard
Run I
, 1980 U.S. Dist. LEXIS 9570, Minard Run set a standard for
private / public cooperation in the forest that was actually incorporated by
the Forest Service in its 1984 "ANF Handbook" as part of its
"standard operating procedures."   The industry can be grateful
to Minard Run for again successfully vindicating the rights of mineral owners
and operators.   It is interesting to note that on its website (www.minardrunoil.com), Minard Run Oil
Company reports that [it] "is the oldest family owned and operated
independent oil producer having drilled and produced oil and gas in three
centuries (1875-present)."

 

Read the
entire opinion of the 3rd Circuit by clicking HERE.

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