Energy Whitepaper - Page 7

Columbia Gas Transm ., L . L . C . v . The Ohio Valley Coal Company , Slip Opinion No . 2020- Ohio-6787
Finally , in the waning days of December 2020 , the Supreme Court issued a fourth opinion – again drafted by Justice DeWine – applying textualist principles to hold that the Ohio Department of Natural Resources ( ODNR ) exceeded the scope of its statutory authority by adopting a rule that went too far in abrogating underground mine operators ’ common law property rights . The coal company operated pursuant to coal severance deeds granting the right to mine and remove all of the coal without any liability for surface damage . ODNR ’ s rule required mine operators to repair or compensate for surface damage caused by subsidence to “ any structures or facilities ” without regard to common law damage-liability waivers . The “ structures or facilities ” in this case were natural gas transmission pipelines .
The Court focused on the language in Ohio Rev . Code 1513.02 ( A )( 1 ) that authorizes ODNR to promulgate rules “ to meet ” ( but not exceed ) the federal law standards governing coal mining nationwide . 2020-Ohio-6787 at ¶ 24 . Federal law requires state coal mining regulatory programs to protect “ non-commercial buildings ” and “ occupied residential dwellings and structure related thereto .” Id . at ¶ 20 ; see also , 30 U . S . C . 1309a . While the Court agreed with the court of appeals that states are free to go beyond the minimum federal requirements and provide greater protections for surface structures , “[ i ] t is the General Assembly — not ODNR — that gets to set such policies .” Id . at ¶ 22 . “ An agency exceeds its grant of authority when it creates rules that reflect a public policy not expressed in the governing statute .” Id . at ¶ 22 . The Court pointedly added that it “ will not presume the legislature to have intended to abrogate a settled rule of the common law unless the language used in a statute clearly supports such intention .” Id . at ¶ 25 ( internal quotation marks omitted ).
The Risks and Benefits Posed by the Ohio Supreme Court ’ s New Strict Textualist Approach
The Ohio Supreme Court ’ s recent quartet of decisions strictly applying the General Assembly ’ s statutes pertaining to the jurisdiction and powers of the PUCO and ODNR present both risks and opportunities for the regulated community . For businesses on the wrong end of a state agency decision , this recent precedent from Ohio ’ s highest court may illuminate a clearer path toward reversal , if the appellant has appropriately preserved compelling arguments reflecting how the decision strays from applicable provisions in the Revised Code .
On the other side of the coin , however , to the extent that a regulated entity has benefitted from a state agency decision , that decision may be at a greater risk of reversal if the appellant can characterize it as a deviation from the plain text of the statutes establishing the agency ’ s jurisdiction and powers . And if you want Justice DeWine ’ s vote in a future Ohio Supreme Court appeal from an agency decision , then you may want to think long and hard before hanging your hat – or your legal position – on the concept of judicial deference to agencies ’ statutory interpretation .
If you have questions , contact Brad Hughes , Mark Stemm , Eric Gallon or any member of Porter Wright ’ s Energy Practice Group .