UPDATE: Since this post was written, Anschutz lawyer Tom West has indicated that the lawsuit in Dryden probably will be appealed, and backed off of the spurious takings claim.  Explained well here.


The response to yesterday’s court decision (see previous post) in favor of Town of Dryden in the Home Rule case has been varied.  Many drilling proponents– and many reporters– have simply assumed that the case would be appealed.  However, the gas company that brought the lawsuit has said that it is considering its options, and will not decide whether or not to pursue an appeal immediately.  An article in today’s New York Times seems to suggest that they are considering other options, as well, including perhaps substituting a lawsuit based on an entirely different premise, that of a governmental “taking” of private property.

The Dryden case, however, is sure to prompt further litigation. Thomas West, the Albany lawyer representing Anschutz, said the company might appeal or instead pursue a “takings” claim against the town — based on the principle that private property should not be taken without just compensation. Mr. West said the company had spent more than $5 million securing land leases from Dryden property owners and could claim the lost value of its assets, including any profits it would have derived from exploiting the mineral rights under the land.

In general, courts have held that it is not considered a “taking” when governmental actions such as zoning designate property as usable for certain uses but not others.  The classic example is residential versus commercial use; when a property is rezoned to allow only residential use, rather than commercial, there is usually a loss of value.  However, the courts have held that, as long as there is the capacity for the property owner to make some economic use of the property (such as building a home), a taking has not occurred.  It is only when there is no viable economic use left for the property owner that it is construed that it is the responsibility of the governmental unit to compensate (buy out) the property owner for the prior value of the property.

However, there is a well-funded effort to attempt to move the law on governmental takings away from prior jurisprudence, in order to effectively nullify much environmental regulation.  An excellent treatment of this topic can be found at the Community Rights Council website.  Their paper, “The Takings Project: Using Federal Courts to Attack Federal Protections,” outlines the organized effort to hamstring environmental and community laws protecting health and the environment by requiring those governments to compensate irresponsible landowners for any and all money they would have made by sacrificing that environment.  This is a radical right-wing view, supported by very conservative forces.  As explained by Community Rights Council:

Enter Professor Epstein. In a theory first articulated in the late 1970s and, with a grant from a conservative foundation, printed in book form in 1985,17  Professor Epstein posited that the Takings Clause could be used as a tool to implement the Reagan administration’s crusade against federal regulations. Put another way, Epstein theorized that the Takings Clause renders unconstitutional any and all redistributions of wealth, and thus renders “constitutionally infirm or suspect many of the heralded reforms and institutions of the twentieth century: zoning, rent control, workers’ compensation laws, transfer payments, [and] progressive taxation.”18 

Professor Epstein’s thesis is simple enough to describe. He contends that there is a natural right to property ownership, and that, based on the philosophy of John Locke, the government has only a very limited right to interfere with such ownership. Property ownership, in turn, consists of a bundle of rights, of which possession, use, and disposition are the most important. Any governmental interference with any of these rights, Epstein asserts, is a taking that must be compensated — “no matter how small the alteration and no matter how general its application.”19 

To reach his result, Epstein suggested that the Supreme Court should revise then-standing precedent in several critical ways….

Thus far, Professor Espstein’s full laundry-list of prohibitions on governmental actions has not been supported by the courts, but, there has been some erosion in the capacity of governments to enact laws for the good of all that impact a particular property owner negatively.

This is one to watch.  Not clear whether the intent– if a takings lawsuit is initiated– would be to maintain an intimidating presence in the short run, so that town boards across the state are too frightened to enact zoning that prohibits gas exploration and mining, or if there would be an intent to actually try to force the Takings Project agenda forward in the New York State courts, hoping to appeal to the Supreme Court to make changes in the basic precedents that set the parameters for governmental actions to protect the people and the environment.