Property Pooling Ohio Municipalities vs. the State

In its recent decision of Simmers v. City of North Royalton, the Franklin County Court of Common Pleas, Case No. CV15-42, ruled that in a review of an application for a mandatory pooling order, the Division of Oil & Gas Resources Management must consider factors other than economics, such as safety and other intangible concerns, in order to approve an order for mandatory pooling.

The land at issue is a city-owned property that the pooling applicant, Cutter Oil Co., wanted to include with adjacent properties to create a drilling well that would meet the state minimum acreage requirements based well depth. The city of North Royalton was opposed to the mandatory pooling because of other safety incidents that had occurred with Cutter Oil Co. and the well’s proximity to an urbanized area. This case was an administrative appeal from the Ohio Oil & Gas Commission, which ruled against the mandatory pooling order issued by the Chief of the Division of Oil & Gas Management.

The Court stated in regard to safety concerns that “[w]ith such risks always in the background, it would be illogical to narrowly construe the law and force landowner into a mandatory pool – even for compensation superficially deemed just and equitable – while completely ignoring legitimate safety or other intangible concerns important to any sensible property owner.”

The Court further stated “generally speaking, municipalities like North Royalton are vested with very broad authority to speak for their citizen on matters of health, safety, and welfare. They are not, in that sense, just ‘ordinary’ landowners.”

Thus, a Municipality’s opposition to a mandatory pooling application based on safety and other intangible concerns must be afforded consideration when determining whether to approve or deny an application for a mandatory pooling order.

For more information regarding this case or any real estate issue, please feel free to contact Anthony CoyneBruce RinkerJohn MonroeTracey McGurk or Justin Eddy in our Real Estate and Land Use Practice Group at Mansour Gavin LPA at (216) 523-1500.



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