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Wednesday, December 17, 2014

Rulings on Four Dormant Mineral Act Cases Before Ohio Supreme Court Should Offer Clarity

From Gas & Oil:
There are currently four ODMA cases pending before the Ohio Supreme Court, and the Court could decide to hear additional cases in the next few months. 
  • Dodd v. Croskey is an appeal from Ohio’s Seventh Appellate District, which includes the majority of counties experiencing Utica development.  The propositions of law on which the Court will rule are: (1) Whether the recitation of a prior mineral reservation constitutes a title transaction under Ohio’s Dormant Minerals Act (“ODMA”); and (2) Whether a mineral interest owners filing of a preservation affidavit after a notice of abandonment acts to “cure” prior activity with respect to the mineral interest rather than only giving a right to “contest” the abandonment.  The Court’s ruling in this case will significantly alter how lower courts interpret the ODMA and could dramatically shift the playing field in favor of surface owners.
  • Chesapeake v. Buell is a case in which the Ohio Supreme Court accepted certified questions of law from the United States District Court, Southern District of Ohio.  Those questions are: (1) Is the recorded lease of a severed subsurface mineral estate a title transaction under the ODMA; and (2) Is the expiration of a recorded lease and the reversion of the rights granted under that lease a title transaction that restarts the 20-year forfeiture clock under the ODMA from the time of reversion.  Again, a ruling by the Supreme Court could expand on instances that could be interpreted as “savings events” under the ODMA, thus favoring the rights of mineral owners.
  • Corbin v. Chesapeake, LLC is another case in which the Ohio Supreme Court agreed to hear certified questions from the United States District Court, Southern District of Ohio:  (1) Does the 2006 version or the 1989 ODMA apply to claims asserted after 2006 alleging the rights to oil and gas and other minerals automatically vested in the surface landowner prior to the 2006 amendments as a result of abandonment; and (2) Is payment of the delay rental during the primary term of an oil and gas lease a title transaction and a “savings event” under the ODMA.
  • Walker v. Noon is another appeal from Ohio’s Seventh Appellate District.  The propositions of law to be decided by the Court all involve the ODMA interplay between the 1989 version and the 2006 version of the ODMA and whether surface owners can bring claims under the 1989 ODMA subsequent to the 2006 amendment of the ODMA.  Rulings in the Corbin and Walker cases could dramatically swing the balance of power under the ODMA in favor of the rights of surface owners.
 In addition to the foregoing cases, discretionary appeals to the Ohio Supreme Court have been sought in these cases:

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