Living in Dryden

Definition and Determination of "Taking"

Supporters of gas drilling (and opponents of zoning) seem to enjoy calling every effort by any government anywhere to regulate land use for whatever reason a "taking". They argue that these takings must be compensated, and threaten gigantic lawsuits over uses of land that haven't been proven to be worth anything.

I was looking though the 1992 Final Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program (GEIS), the predecessor to the currently controversial Revised Draft SGEIS on the Oil, Gas and Solution Mining Regulatory Program (September 2011) Well Permit Issuance for Horizontal Drilling and High-Volume Hydraulic Fracturing in the Marcellus Shale and Other Low-Permeability Gas Reservoirs, when I stumbled on a clear description of how "taking" works in New York State.

The numbered steps sound promising for those claiming that "taking" has happened to them - and then "lost all but a bare residue of value" knocks down practically every possible case in these situations.

Definition and Determination of "Taking"

To determine whether a mineral rights owner can be awarded just compensation for a taking of mineral property, the legitimate public interest served by environmental land use restrictions must be balanced against the equally legitimate property rights of the mineral rights owner. The New York Court of Appeals has interpreted this balance to mean that a taking has occurred only if the property is rendered unsuitable for any reasonable income-producing or private use for which it is adapted, and thus its economic value, or all but a bare residue of its value, is destroyed.

To establish that a "taking" has occurred, the minerals owner must do the following:

1. present evidence of the monetary value of the property under the current and proposed permitted use,
2. show that the permit has been applied for and denied,
3. demonstrate that the effect of the denial is to prevent economically viable use of the land, and
4. show that the mineral rights were obtained prior to the regulations that limit the property --

The courts will entertain the taking issue only if the minerals owner presents "dollars and cents" evidence that the property has lost all but a bare residue of its value and that all avenues of administrative remedy have been exhausted. The minerals owner must also demonstrate to the court that the prohibited use would not have a negative or conflict-creating effect on the protected land.

Conclusion

... Even if a permit to drill a well was denied, and the operator could not recover the minerals from the property, the owner would have to demonstrate that the land was rendered unsuitable for any purpose.

(1992 FGEIS 23, 24, emphasis added)

I suspect that "lost all but a bare residue of its value" issue is why both the lawsuits against both Dryden and Middlefield only seek to have zoning prohibitions lifted. Even in the Middlefield case, which is a landowner suing rather than a gas company, they simply aren't going to be able to prove that the existing dairy farm use only qualifies as "a bare residue."

In short, unless there's a massive reversal of long-held policy, this piece from the DEC suggests that we don't need to lose too much sleep over claims that takings lawsuits will bankrupt the Town.