Shale Gas Perspectives - Is the NYS Association of Towns Overzealous in Supporting the "Home Rule" Rights of Towns Which Oppose Deep Shale Natural Gas Drilling (Vol. I, No. 8)

A Periodic Blog on the Status of Marcellus Shale Development in the Southern Tier of New York - and Other Interesting and Exciting Developments in the Law, Science and Politics of Natural Gas Development (Or Not) in the Empire State.

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(June 19, 2013)
 
The Association of Towns of New York State [the Association] “was established in 1933 to help towns obtain greater economy and efficiency.”  http://www.nytowns.org/about/history-and-mission.  According to its website, the Association represents 97% of all towns in the State, recognizes their diversity (ranging from Red House with a population of 38, to Hempstead with a population of 756,000), and it “is dedicated to serving all members” and “utilizes… the benefits of [this] diversity [as well as]… the advantages of… similarity in developing services… [,etc.].”  Id.

However, strains have recently arisen among member towns and the Association because of the diversity of positions among these towns on the issue of “high-volume horizontal hydrofracturing” (HVHF), sometimes known as unconventional gas drilling, or “fracking.”  And, while the Association contends that it is not for or against gas drilling, but that it is merely interested in protecting the “home rule” rights of members, that is not always clear.  These strains may have reached the breaking point as several Upstate towns are now considering withdrawing from the Association.

The Town of Dryden Case
The Association was one of three associations and 52 towns that joined a friend-of-the court brief prepared by the Albany law firm of Whiteman Osterman & Hanna LLP on December 10, 2012.  This amicus curiae brief was submitted to the Appellate Division, Third Department, in the case of Norse Energy Corp. USA, v. Town of Dryden.  The brief supported the position of the Town of Dryden whose zoning ordinance, banning all oil and gas extraction, exploration, development and related activities in the town, was upheld by the Supreme Court, Tompkins County on February 12, 2012¹,  and, later, affirmed on appeal by the Third Department, on May 2, 2013.  See earlier blog, Vol I, No. 6, http://blog.hhk.com/?p=230.

The amicus brief in which the Association joined, opposed the position of Norse / Anschutz and argued that the Town of Dryden’s land use powers trump the supersession provision of the Oil, Gas & Solution Mining Law, ECL §23-0303(2), “which preempts a municipality’s regulation of the operations of oil and gas extraction.”  Indeed, the brief argues that “there is no basis in ECL 23-0303(2) to find preemption of a municipality’s land use powers.”  Amicus brief, p. 1.

The brief argues that “generally applicable” municipal zoning ordinances are not preempted (pp. 3-4); that, without a comprehensive plan, “there can be no rational allocation of land use” (p. 6); that local governments deserve deference because they “spend significant amounts of time, effort, and resources on developing comprehensive plans, outlining the zoning and planning goals for the future of their communities according to the identifiable features of the lands and [their specific] natural resources…” (p. 5); and that a municipality is free to limit the exploitation of any and all natural resources within the town “if limiting that use is a reasonable use of the police powers to prevent damage to the rights of others and to promote the interests of the community as a whole” (p. 17).  The brief also recognizes that judicial precedents make clear that “local governments may not exercise their police power by adopting a law inconsistent with the Constitution or any general law of the State” (p. 8); and that zoning regulations may not “single[ ] out oil and gas drillers for special treatment” (p. 11).

The attorney submitting the Association’s brief, John Henry, was quoted in an Associated Press story, as saying of his clients: “They want to make sure that municipalities have a say in regulating the activities within their borders [emphasis added].”  http://www.pressconnects.com/article/20121030/NEWS11/310300076/Towns-cities-look-get-involved-hydrofracking-home-rule-case, (But doesn’t ECL 23-0303[2] preempt regulation of oil and gas extraction operations by local governments?  Is preemption of “activities” really different from preemption of “operations”?)

And what of the “home rule” rights of towns that support gas drilling?  A group of Southern Tier town officials reacted angrily to the Association’s support of Dryden’s gas drilling ban: “the Association of Towns does not speak for a significant number of its members to the extent that it supports either the pro natural gas development or anti natural gas development positions.  In fact, the Association’s town members were never asked to vote on whether the Association would submit Amicus Curiae briefs in these cases.”  This position was articulated in a February 15, 2013 letter to the Third Department.  It contained over 50 signatures by town officials from 16 towns (ultimately, 65 officials from 20 towns).  The letter also noted the following:

“Towns simply do not have the expertise, knowledge and resources to properly
evaluate and administer natural gas development.  Towns passing bans or moratoriums are acting upon emotional and political pressures from various groups opposing natural gas development, and not empirical evidence derived by towns.  Most towns have done little or no independent investigation into natural gas drilling.  Many bans are primarily delay tactics to discourage drilling companies from coming to New York State ….”

http://www.slideshare.net/MarcellusDN/ny-towns-disagree-with-nys-association-of-towns-on-fracking-ban ; http://www.recordonline.com/apps/pbcs.dll/article?AID=/20130224/NEWS/302240319 .

Association representatives justify their action as neutral with respect to a substantive position on gas drilling, pro or con.  They assert that they are merely seeking to vindicate the “home rule” powers of towns under the State Constitution, the Statute of Local Governments, and the Municipal Home Rule Law.  For example, the amicus brief states (p. 7):

“Although municipalities need not exercise that authority, and may indeed choose to welcome oil and gas extraction within their borders, as some municipalities in New York have, the fact remains that constitutional home rule authority is sufficiently broad to permit each municipality in New York to make that decision upon its own unique comprehensive plan.”

Yet, the Association, in other circumstances (e.g., City of Binghamton, Town of Sidney) has supported local drilling bans or moratoria even where oil and gas drillers have been singled out, where land use restrictions are not a reasonable or plausible use of the police power, and/or where such local laws were adopted without adherence to general State laws.  When the ends seem always to justify the means, it is hard to believe that the proponent of the means is not also an advocate of the ends.

Breaking News: The author of this blog was reliably informed today by a town supervisor that several Southern Tier towns are seriously considering withdrawing from the Association of Towns over the Association’s involvement in gas drilling issues and, in particular, the perceived failure of staff to consult with or take into account the views of pro-gas drilling members.

The Town of Sidney Case
The Town of Sidney, in Delaware County, approved a one-year gas drilling moratorium on February 14, 2013 by three affirmative votes within the 5-member Town Board (one member was absent; the other voted nay).  As alleged in a lawsuit filed by landowners (represented by HH&K) in Delaware County Supreme Court on June 12, 2013, Grafe-Kieklak v. Town Board, Town of Sidney (Index No. 2013 602; RJI No. 13-0220), the vote was jurisdictionally defective and invalid because, under both General Municipal Law 239-m and Town Law 265, a supermajority of four affirmative votes was required.  Other legal deficiencies were also alleged. 

Although the Association is not (yet) actively involved in this case, it did play a role in the drama leading up to the approval of the moratorium law.  A public hearing preceding the final vote on the proposed moratorium was scheduled (at a January 10, 2013 “special meeting” in which the supervisor and the other objecting board member did not participate) to be held on February 14th.  The “special meeting” was authorized at a January 3rd regular town board meeting over the objection of the town supervisor and another board member.

The town attorney, Joseph A. Ermeti, Esq., issued a legal opinion on January 15, 2013, expressing the view “that the special meeting held to vote on the Natural Gas Moratorium constituted an illegal meeting.”  He based this opinion on Section 62 of the Town Law, which specifies two methods for calling a special meeting of the town board: (1) it can be called by the Supervisor on his own initiative; or (2) it must be called by the Supervisor within ten days of receiving written requests from two members of the town board.  The town attorney found additional support for his opinion in the Special Meetings section of the Town Law Manual (p. 19).  In addition to echoing the language of Town Law 62, the Town Law Manual cites opinions of the State Attorney General and the State Comptroller:  “The Attorney General and Comptroller have agreed that business conducted at a special meeting held without two days’ notice is valid as long as all the councilpersons had actual notice of the meeting and attended and participated therein [1980 Op.Atty.Gen. (Inf) 109; 18 Op.St.Comp.No. 442].”

The February 14, 2013 Town Board Minutes (pp. 3-4) provided the following additional insights:

“Supervisor McCarthy stated it was his belief that the meeting held on January 10th was an illegal meeting because he did not call it.  The Supervisor stated he also believes the Public Hearing scheduled to be held at this meeting is illegal because it was scheduled at the January 10, 2013 meeting.  Councilman Whitaker stated the illegality of the meeting is a personal opinion of Mr. McCarthy’s as he contacted legal counsel at Association of Towns and was told the meeting held on January 10th was a legally convened meeting and Associations of Towns gave a written opinion as such….  Town Attorney Ermeti stated he researched the legality of the meeting and was advised that it was not a legally called meeting, and agrees that a difference of legal opinions exists.  (Emphasis added.)

“Mr. Ermeti stated he does not believe that the public hearing should be held on this date and that if the public hearing is held, it could open the town up for lawsuits….  Mr. Ermeti stated he gave his opinion on the record and it is the one he could defend in Supreme Court or elsewhere.”

On or about April 11, 2013, I telephoned the Association of Towns to request a copy of the opinion publicly referenced by Councilman Whitaker at the February 14th meeting.  I wished not only to obtain a copy of the opinion, if possible, but also to ensure that the Association’s opinion was predicated on an accurate understanding of the relevant facts and circumstances.  I was referred to Michael Kenneally, an attorney in the Association’s counsel’s office.  Initially, Mr. Kenneally disavowed any knowledge of the opinion I referred to, despite my pinpointing the date of the opinion within a few weeks—although, it later turned out, Mr. Kenneally was the author of the opinion.  After conferring with his colleagues, Mr. Kenneally called me back.  This time, he acknowledged that there was such an opinion, but he declined to provide it to me, or even give me the date of the opinion, because it was provided to a member of the Association, and I was not a member (even though I had been encouraged to call the Association counsel’s office by the Association’s president, Tim Whitesell). 

Keep in mind this difference in treatment of members and non-members.

The Kenneally opinion, which I subsequently obtained from the Town through the Freedom of Information Law, was dated January 9, 2013.  In pertinent part, here is what it said:

“The Town Board is authorized to schedule its own meetings at a town board meeting.  They may establish a regular meeting schedule, and may, by resolution, establish any such other meetings that they decide to have.  For meetings other than those scheduled by the town board, Town Law section 62 provides that the Town Supervisor may call special meetings upon two days written notice to the town board members, and must call a special meeting within 10 days if he or she has received a written request for a special meeting from two town board members.  The power of a Supervisor to call a special meeting does not restrict the power of the town board to schedule a future town board meeting at a current town board meeting.”

Mr. Kenneally subsequently elaborated his position in a January 17th response to deputy supervisor, John Schaeffer.  In his response, he attaches “a case that explains that the scheduling of a meeting of a legislative body is a legislative act, meaning the town board, as the legislative body of the town, may schedule its own meetings.”  The town attorney reacted to this on January 18th, by noting:  “The case cited by Mr. Kenneally is nothing like our situation.”²

The legality of the special meeting was not raised in the recently filed lawsuit because of multiple, even more clear-cut, alleged legal violations.  Depending on how the lawsuit plays out, it will be interesting to see whether the Association of Towns elects to support the Town of Sidney in defending its moratorium.

The City of Binghamton Case
The City of Binghamton enacted a two-year gas drilling ban on December 22, 2011, which was challenged in Broome County Supreme Court on May 30, 2012, by a group of landowners and businesses.  The case, Jeffrey v. Ryan, 37 Misc.3d 1204(A) (Sup.Ct., Broome Co., 2012), was decided on October 2, 2012 by The Honorable Judge Ferris D. Lebous, who invalidated the local law on the basis that it was a “moratorium” and that it “fail[ed] to meet the criteria for a properly enacted moratorium,” including a showing of “dire need” justifying a temporary ban on a particular land use.

The City filed a Notice of Appeal, dated November 13, 2012.  And, lo and behold, the Association of Towns, on or about April 12, 2013, tendered a friend of the court brief to the Appellate Division in support of the City of Binghamton.

Curiouser and curiouser.  Remember the sharp line drawn by the Association’s counsel between members and non-members?  So, why did the Association intercede in the Binghamton appeal on behalf of a non-member City?  Even more interesting, how could the Association justify retaining a Downstate law firm (Sive, Paget & Riesel, P.C. of New York City) to prepare an amicus brief in support of said non-member City?  And how could it justify doing so without the approval of its members or the knowledge of its President (as confirmed to me by the latter)?

Doubtless, the Association weighed-in because of the precedent-setting “home rule” issues involved, right?  Not really.

As Judge Lebous held:  “Whether or not Local Law 11-006 is a moratorium is the crux of this case….  Temporarily banning development or certain land uses is the hallmark of a moratorium…  Local Law 11-006’s inclusion of a ‘sunset’ provision leads to no other rational conclusion except that this law is a moratorium….  The comments made at the Binghamton City Council work sessions clearly show that even the drafters of the law believed it was a moratorium, as well as Corporation Coun[sel] and some of the members of the council.”

The Association’s amicus brief in defense of non-member City of Binghamton, therefore, makes two arguments: one, that “a garden variety sunset clause in a local law [does not] ipso facto transform[ ] that local law into a moratorium”; and, two, that the Court below should not have relied “upon statements of outside pro bono counsel [David Slottje, who drafted the local law and pressed City Council to pass it, and then was engaged to represent the City in the ensuing litigation as “special counsel”] during public hearings [they were actually worksessions held to fashion the final version of the local law to be introduced and enacted] as a principal basis for the Court’s conclusion that the challenged local law should be deemed a moratorium.”  (Amicus brief, p. 2).³  

The amicus brief states (p. 2) the Association’s interest in the Binghamton litigation as a matter whose outcome would affect “the interests and powers of units of local government.”  If a local law that temporarily bans development or particular land uses is treated as a “moratorium,” as held by Judge Lebous, “[s]uch a ruling would place a heretofore unheard of limitation on the legislative discretion of a municipal governing body to impose a sunset on a local law”, and “a judicial mandate that a sunset clause must meet the standards for a moratorium would effectively eviscerate [the ‘core’] power [of a municipal governing body to determine how long a law is to be effective].”  The Association is also “both interested and concerned” that the lower Court determined the meaning and effect of the Binghamton local law based on “the opinions of its drafters” rather than on the language of the law itself. 

The petitioners (represented by HH&K) will respond to the hyperbolic assertions of the Association in their appellate brief (due on or before August 22, 2013).

In the meantime, Association members may wish to encourage their Association to reexamine how it formulates positions and injects itself into litigation on contentious issues like natural gas drilling, on which its members are deeply divided.

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¹The case below was Anschutz Exploration Corp. v. Town of Dryden, 35 Misc.3d 450 (Sup.Ct. Tompkins Co., 2012)  Norse was Anschutz's successor in interest.

²In a March 15, 2013 e-mail to another Town of Sidney councilman, Eric Wilson, the New York State Department of State's expert on local governments, Natasha Phillip, referenced opinions of the attorney general that the two-day notice requirement of Town Law 62 "may be waived if all of the members of a town board attend and participate in a special meeting" [in this case, only three board members were present a the special meeting].  Attorney Phillip also noted that, since the dates of the referenced attorney general opinions[1950, 1977, and 1980] and a 1960 lower court decision [interpreting former Village Law §87], "at least one higher court has invalidated a special town board meeting when less than two days advance notice to the other town board members was provided by the town supervisor (see McGovern v. Tatten, 213 A.D.2d 778 (3d Dept. 1995)."  She went on that the "McGovern case...makes clear that substantial compliance is not enough for all procedural steps required under Section 62(2)."

³Here is one of the illustrative statements by Mr. Slottje at a November 21, 2011 City Council worksession: "It's [the local law being proposed] a moratorium in the sense of having a finite period.  It's like a sunset clause.  24 months.  It is not literally a zoning ordinance.  This is a police power ordinance.  But it quacks like a duck and walks like a duck.  So, you can absolutely think of it in terms of being a moratorium."
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Article written by Kenneth S. Kamlet, Esq.  For more information, contact Mr. Kamlet at 607-231-6914 or via email at kkamlet@hhk.com.

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