Cooperstown Holstein Corporation, Appellant,v.Town of Middlefield, Respondent.BriefN.Y.June 3, 2014To be Argued by: SCOTT R. KURKOWSKI (Time Requested: 30 Minutes) Otsego County Clerk’s Index No. 0930/11 Appellate Division–Third Department Docket No. 515498 Court of Appeals of the State of New York COOPERSTOWN HOLSTEIN CORP., Appellant, – against – TOWN OF MIDDLEFIELD, Respondent. BRIEF FOR APPELLANT THOMAS S. WEST, ESQ. CINDY MONACO, ESQ. THE WEST FIRM, PLLC 677 Broadway, 8th Floor Albany, New York 12207 Tel.: (518) 641-0500 Fax: (518) 615-1500 SCOTT R. KURKOSKI, ESQ. LEVENE GOULDIN & THOMPSON, LLP 450 Plaza Drive Binghamton, New York 13902 Tel.: (607) 763-9200 Fax: (607) 763-9211 Attorneys for Appellant Dated: October 25, 2013 APL-2013-00242 i DISCLOSURE STATEMENT Plaintiff is a corporation organized and existing under the laws of the State of New York. It has no parents, subsidiaries or affiliates. ii TABLE OF CONTENTS PRELIMINARY STATEMENT .................................................................... 1 QUESTIONS PRESENTED ........................................................................... 3 STATEMENT OF THE CASE ....................................................................... 4 I. THE STATUTORY FRAMEWORK AND UNDERLYING POLICY ........................................................................................... 4 II. FACTUAL BACKGROUND AND PROCEEDINGS BELOW ........................................................................................... 12 JURISDICTIONAL STATEMENT ............................................................... 22 ARGUMENT: THE TOWN PROHIBITION IS PREEMPTED BY STATE LAW PURSUANT TO THE DOCTRINES OF EXPRESS PREEMPTION, FIELD PREEMPTION, AND CONFLICT PREEMPTION ................................................................................................ 23 I. ECL 23-0303 (2) EXPRESSLY PREEMPTS THE TOWN PROHIBITION GIVEN THE COMMON AND ORDINARY MEANING OF “REGULATION” AS WELL AS GIVEN THE LEGISLATURE’S INTENT TO LIMIT LOCAL JURISDICTION TO ONLY ROADS AND TAXES ..................... 25 A. The Supersession Clause Expressly Preempts the Town Prohibition Because the Common and Ordinary Meaning of “Regulation” Encompasses Local Zoning Regulation ......................... 27 B. Legislative Intent to Expressly Preempt the Local Zoning Regulation is Evidenced by the Statutory Town Law Definition ........ 29 iii C. Legislative Intent to Expressly Preempt Local Zoning Regulation is Evidenced by Local Zoning Regulation Not Being Enumerated as an Exception to Preemption in the Supersession Clause.................................................................................................... 32 D. The Legislature’s Intent to Expressly Preempt Local Zoning Regulation is Evident Upon Construing the Supersession Clause as a Whole ............................................................................................. 33 E. Legislative History Confirms That ECL 23-0303 (2) Expressly Preempts Local Zoning Regulation ...................................................... 35 F. The MLRL, Matter of Frew Run Gravel Prods., and Matter of Gernatt Asphalt Prods. Are Not Relevant to the OGSML Express Preemption Analysis ............................................................... 40 i. The Supersession Language of the OGSML and the MLRL is Materially Different .................................................... 41 ii. The Evolution and Legislative History of the OGSML Is Materially Different from that of the MLRL ............................. 46 iii. Matter of Frew Run Gravel Prods. and Matter of Gernatt Asphalt Prods. Are Distinguishable in That Each Fails to Undertake an Implied Preemption Analysis .............................. 48 II. THE OGSML OCCUPIES THE ENTIRE FIELD OF OIL AND GAS REGULATION THEREBY PREEMPTING ANY RELATED LOCAL REGULATION .................................... 49 III. THE TOWN PROHIBITION CONFLICTS WITH STATE LAW AND POLICY, THEREFORE, IT IS PREEMPTED ........... 55 iv IV. DECISIONS REACHED BY OTHER JURISDICTIONS SUGGEST THAT THE OGSML PREEMPTS LOCAL MUNICIPALITIES FROM ENACTING A TOTAL BAN ON OIL AND GAS DEVELOPMENT .......................................... 61 CONCLUSION .............................................................................................. 63 v TABLE OF AUTHORITIES CONSTITUION N.Y. Const., art. IX .................................................................................................. 43 CASES Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d 372 (1989) .......................................................................... 24, 49, 50 Anonymous v. City of Rochester, 13 NY3d 35 (2009) ........................................................................................ 60 Anschutz Exploration v Town of Dryden, 35 Misc 3d 450 (Sup Ct, Tompkins County 2012) ....................................... 44 Balbuena v IDR Realty LLC, 6 NY3d 338 (2006, Graffeo, J. ) .............................................................. 24, 48 Consolidated Edison Co. of N.Y. v Town of Red Hook, 60 NY2d 99 (1983) ........................................................................................ 55 Commonwealth of the N. Mariana Is. v Canadian Imperial Bank of Commerce, 21 NY3d 55 (2013, Rivera, J. ) ...................................................................... 31 Criscione v. City of New York, 97 NY2d 152 (2001) ...................................................................................... 35 D’Amico v Christie, 71 NY2d 76 (1987) ........................................................................................ 34 DJL Rest. Corp. v City of New York, 96 NY2d 91 (2001) ...................................................................... 23, 24, 43, 56 Doomes v. Best Transit Corp., 17 NY3d 594 (2011) ...................................................................................... 48 Drattel v Toyota Motor Corp., 92 NY2d 35 (1998) ........................................................................................ 48 vi Energy Mgmt. Corp. v City of Shreveport, 397 F3d 297 (5th Cir 2005) ..................................................................... 25, 61 Freightliner Corp. v Myrick, 514 US 280 (1995)......................................................................................... 48 Incorporated Vil. of Nyack v Daytop Vil., 78 NY2d 500 (1991) ...................................................................................... 49 Matter of Gernatt Asphalt Prods. v Town of Sardinia, 87 NY2d 668 (1996) .............................................................16, 41, 42, 45, 48 Jancyn Mfg. Corp. v County of Suffolk, 71 NY2d 91 (1987). ....................................................................................... 56 Kamhi v Town of Yorktown, 74 NY2d 423 (1989) ...................................................................................... 23 Matter of Lansdown Entertainment Corp. v New York City Dept. of Consumer Affairs, 74 NY2d 761 (1989) ...................................................................................... 60 Leader v. Maroney, Ponzini & Spencer, 97 NY2d 95 (2001) ........................................................................................ 35 Little v Young, 82 NYS2d 909 (Sup Ct, Nassau County 1948) ............................................. 31 Lundberg v State of New York, 25 NY2d 467 (1969) ................................................................................ 34-35 Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d 106 (2012, Graffeo, J. ) ................................................ 29, 31, 33, 35 Matter of Cohen v. Board of Appeals of Vil. of Saddle Rock, 100 NY2d 395 (2003) ............................................................24, 26, 49, 50, 60 Matter of Envirogas, Inc. v. Town of Kiantone, 112 Misc 2d 432 (Sup Ct, Erie County 1982) ............................................... 11 vii Matter of Frew Run Gravel Prods. v. Town of Carroll, 71 NY2d 126 (1987) .................................................. 16, 20, 41, 45, 46-47, 48 Matter of Grand Jury Subpoena Duces Tecum Served on Museum of Modern Art, 93 NY2d 729 (1999) ...................................................................................... 31 Matter of Jewish Home & Infirmary of Rochester v Commissioner of N.Y. State Dept. of Health, 84 NY2d 252 (1994) ................................................................................ 32, 33 Matter of Kamhi v. Planning Bd. of Town of Yorktown, 59 NY2d 385 (1983) .......................................................................... 23, 42, 43 Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298 (1985) ...................................................................................... 29 Matter of Norse Energy Corp. USA v Town of Dryden, 108 AD3d 25 (3d Dept 2013) .................................................................. 18, 31 Matter of Plato’s Cave Corp. v State Liq. Auth., 68 NY2d 791 (1986) ...................................................................................... 29 Matter of Richardson v Felder Roofing, 67 NY2d 246 (1986) ...................................................................................... 22 Matter of Sylvania Corp. v Kilbourne, 28 NY2d 427 (1971) .................................................................................... 7, 8 New York State Club Assn. v City of New York, 69 NY2d 211 (1987) ................................................................................ 24, 55 New York State Psychiatric Assn., Inc. v New York State Dept. of Health, 19 NY3d 17 (2012) ........................................................................................ 46 Oil Heat Inst. of Long Is. V Town of Babylon, 156 AD2d 352 (2d Dept 1989) ...................................................................... 26 Northeast Natural Energy, LLC v City of Morgantown, Civ Act No 11-C-411, 2011 WL 3584376 (W Va Cir Ct Aug 12, 2011)… ......................................................... 25, 61, 62 viii People v Couser, 94 NY2d 631 (2000) ................................................................................ 28, 29 People v Hedgeman, 70 NY2d 533 (1987) ...................................................................................... 28 People v Thompson, 99 NY2d 38 (2002) ........................................................................................ 29 Rentways, Inc. v O’Neill Milk & Cream Co., 308 NY 342 (1955) ........................................................................................ 22 Robin v Incorporated Vil. of Hempstead, 30 NY2d 347 (1972) ................................................................................ 49, 50 State ex rel. Morrison v Beck Energy Corp., 989 NE2d 85 (Ohio Ct App 9th Dist 2013) ............................................. 25, 61 Voss v Lundvall Bros., 830 P2d 1061 (Colo 1992) ....................................................................... 25, 61 Wagner v. Mallory, 169 NY 501 (1902) .......................................................................................... 8 Weingarten v. Board of Trustees of N.Y. City Teachers’ Retirement Sys., 98 NY2d 575 (2002, Graffeo, J.) ............................................................. 32, 33 Western Lands Servs., Inc. v Department of Envtl. Conservation of State of N.Y., 26 AD3d 15 (3d Dept 2005) ........................................................................ 6, 9 Vatore v Commissioner of Consumer Affairs of City of N.Y., 83 NY2d 645 (1994) ...................................................................................... 26 Zakrzewska v New School, 14 NY3d 469 (2010, Read, J. ) ...................................................................... 55 STATUTES Conservation Law, article 3-A ................................................................................. 14 CPLR 5501 ............................................................................................................... 22 CPLR 5602 (a) ......................................................................................................... 22 ix ECL, article 23, title 13 ............................................................................................ 57 ECL 21-1107 ...................................................................................................... 30, 32 ECL 23-0101 (4) ................................................................................................ 10, 50 ECL 23-0101 (11) ...................................................................................................... 7 ECL 23-0101 (20) (c) ........................................................................................... 7, 58 ECL 23-0301 .....................................................................................................passim ECL 23-0303 (1) ...................................................................................................... 10 ECL 23-0303 (2) ...............................................................................................passim ECL 23-0303 (3) ...................................................................................................... 38 ECL 23-0305 ...................................................................................................... 10, 52 ECL 23-0305 (8) .......................................................................................... 52, 53, 57 ECL 23-0501 ........................................................................................................ 9, 56 ECL 23-0501 (1) (b) ................................................................................ 9, 51, 52, 57 ECL 23-0501 (2) ..................................................................................................... 52 ECL 23-0503 .................................................................................................... 6, 9, 56 ECL 23-0503 (2) . .................................................................................................... 52 ECL 23-0901 ........................................................................................................ 9, 52 ECL 23-2101 .............................................................................................................. 5 ECL 23-2703 (2) ................................................................................................. 2, 41 Energy Law § 3-101 (5) ................................................................................. 2, 15, 36 General City Law § 20 (24) ..................................................................................... 30 McKinney’s Cons of Laws of NY, Book 1, Statutes § 97 ....................................... 34 McKinney’s Cons of Laws of NY, Book 1, Statutes § 124 ..................................... 35 McKinney’s Cons of Laws of NY, Book 1, Statutes § 222 ..................................... 31 McKinney’s Cons of Laws of NY, Book 1, Statutes § 223 ..................................... 31 McKinney’s Cons of Laws of NY, Book 1, Statutes § 231 ..................................... 35 McKinney’s Cons of Laws of NY, Book 1, Statutes § 234 ..................................... 28 McKinney's Cons of Laws of NY, Book 1, Statutes § 240 ..................................... 32 Municipal Home Rule Law, article 3 ....................................................................... 44 Municipal Home Rule Law § 2 (9) .......................................................................... 44 Municipal Home Rule Law § 10 ........................................................................ 43, 44 Statute of Local Governments § 10 (6) .............................................................. 30, 43 Town Law § 130 ...................................................................................................... 44 Town Law § 131 ...................................................................................................... 44 Town Law § 261 ..............................................................................29, 31, 42, 43, 44 Town Law § 264 ...................................................................................................... 44 x Village Law § 7-700 ................................................................................................ 30 LEGISLATIVE HISTORY DOCUMENTS L 2008, ch 376 ........................................................................................................... 2 L 1987, ch 618 ......................................................................................................... 32 L 1981, ch 846 ....................................................................................... 16, 26, 32, 37 L 1978, ch 396 ............................................................................................. 15, 36, 37 L 1974, ch 1043 ....................................................................................................... 41 L 1963, ch 959 ............................................................................................. 14, 25, 36 L 1932, ch 634 ............................................................................................. 30, 31, 42 A6928 ....................................................................................................................... 39 Bill Jacket, L 1981, ch 846 ...................................................................................... 48 Governor’s Approval Mem, Bill Jacket, L 1981, ch 846 ........................................ 38 Mem in Support S6455-B / A8475-B ...................................................................... 37 REGULATIONS 6 NYCRR part 550 ............................................................................................... 8, 53 6 NYCRR part 551 ................................................................................................... 53 6 NYCRR part 553 ................................................................................. 51, 52, 56, 57 6 NYCRR ch V ........................................................................................................ 10 6 NYCRR 550.3 (ao) ................................................................................................. 8 6 NYCRR 550.6 ....................................................................................................... 53 6 NYCRR 553.1 ....................................................................................................... 51 6 NYCRR 553.2 ....................................................................................................... 51 6 NYCRR 554.7 ....................................................................................................... 53 SEQRA DOCUMENTS Generic Environmental Impact Statement on the Oil [1992] ............................ 10, 51 Revised Draft SGEIS [September 2011] ................................................................. 11 EXECUTIVE ORDERS Executive Order (Paterson) No. 41 (9 NYCRR 7.41) ............................................. 13 Executive Order (A. Cuomo) No. 2 (9 NYCRR 8.2) .............................................. 13 OTHER AUTHORITIES Assn. of Towns of the State of New York, Town Manual ..............29, 42, 43, 44, 45 xi Black’s Law Dictionary (9th ed 2009) .............................................................. 28, 33 Martin & Kramer, Oil and Gas Law (2008) .......................................................... 1, 8 25 NY Jur 2d Counties, Town, and Municipal Corporations § 123) ....................... 24 25 NY Jur 2d Counties, Town, and Municipal Corporations § 328) ....................... 44 77 NY Jur 2d, Mines and Minerals § 83) .................................................................. 6 77 NY Jur 2d, Mines and Minerals § 87) .................................................................. 6 Patricia E. Salkin, NY Zoning Law & Practice) .................................... 29-30, 42, 43 Terry Rice, Zoning and Land Use, 43 Syracuse L Rev 615 (1992) ........................ 42 1 PRELIMINARY STATEMENT This case concerns one town’s use of zoning and land use authority to supplant a comprehensive and detailed statutory scheme created and enforced by the State of New York for the purposes of regulating oil and gas development in a manner that prevents waste, provides for a greater ultimate recovery of oil and gas and protects mineral owners’ correlative rights (see ECL 23-0301).1 In the aftermath of the energy crisis of the 1970s, the Legislature enacted amendments to the Oil, Gas Solution Mining Law (“OGSML”) to further enable the efficient and safe development of oil and gas in this State [R: 727, 840].2 In this regard, a supersession clause was inserted into the statute stating that this law “shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supersede local governments jurisdiction over local roads or rights . . . under the [RPTL]” (ECL 23-0303 [2]). Subsequently, after the OGSML provisions on well permitting and spacing were expanded in response to the advent of horizontal and high- 1 Correlative rights is a legal theory pertaining to the nature of the landowner’s interest in minerals (see 1 Martin & Kramer, Oil and Gas Law §§ 203, 203.2 at 27-32.1, 39-43 [2008]; 8 Martin & Kramer, Oil and Gas Law at 214-217 [2008]). The theory is that “all land owners whose tracts overlay a producing formation have . . . rights in the formation” (8 Martin & Kramer, Oil and Gas Law at 214-217 [2008]). This is discussed in greater detail at pp. 5-7, infra. 2 All citation references preceded by “R” are to the original record entitled “Record on Appeal.” 2 volume drilling (see L 2008, ch 376), defendant enacted a local law broadly prohibiting within its geographic borders all oil and gas activities, including, but not limited to, the “extraction, production, transportation, purchase, processing, and storage of oil or gas” [R: 98, 100, 114]. Accordingly, plaintiff commenced this action and, among other things, moved for summary judgment seeking a declaration that defendant’s local law is preempted because it is contrary to the expressed and implied intentions of the Legislature [R: 26-36, 43-44]. Supreme Court, in turn, granted defendant’s cross motion dismissing the complaint, and the Appellate Division, Third Department affirmed [5-15, 88-89, 1029-1031]. This Court should reverse and grant summary judgment in plaintiff’s favor finding that defendant’s local law is preempted because it bans activity that is expressly, exclusively, and exhaustively reserved to the State. The implications here cannot be understated. If the Appellate Division’s ruling is permitted to stand, it would obliterate the rights of mineral owners throughout this State and in effect ban an entire industry from New York – all in conflict with the policy declarations of the OGSML and Energy Law (see ECL 23-0301; Energy Law § 3-101 [5]). More broadly, if the OGSML does not preempt defendant’s local law, then municipalities will be encouraged to ban other industries of statewide importance through the guise 3 of land use. This Court simply cannot authorize a municipal “not in my back yard” approach to a matter of vital State importance – particularly where, as here, the Legislature’s express intent is to promote development of indigenous energy resources through a comprehensive uniform statewide scheme of regulation. Here, the Appellate Division failed to give express meaning to the provisions of ECL 23-0303 (2) by implementing all of the applicable tools of statutory construction and failed to consider the broader policy implications of the OGSML and the “promote development” objective of the Energy Law. Municipal drilling bans, like that at issue here, preclude resource recovery, and result in the ultimate in waste and destruction of a landowner’s correlative rights. Accordingly, by simply giving meaning to the expressed and implied intentions of the Legislature, this Court should reverse the Appellate Division and thereby allow the Department of Environmental Conservation to continue safely and efficiently regulating oil and gas development. QUESTIONS PRESENTED Q1. Under the doctrine of express preemption, is defendant’s zoning law preempted by the OGSML because the state law expressly provides that it “shall supersede all local laws and ordinances relating to the 4 regulation of the oil, gas and solution mining industries; but shall not supersede local government jurisdiction over local roads or the rights of local governments under the real property tax law”? Q2. Under the doctrine of field preemption, is defendant’s zoning law specifically banning all oil and gas activities preempted by the OGSML because the state law outlines a comprehensive and detailed statutory scheme that indicates the need for statewide uniformity in the field of oil and gas development? Q3. Under the doctrine of conflict preemption, is defendant’s zoning law preempted by the OGSML because defendant’s zoning law imposes inconsistent restrictions that inhibit the state law specifically designed to promote the efficient and safe development of oil and gas, so as to prevent waste, provide for greater ultimate recovery of oil and gas and protect mineral owners’ correlative rights? STATEMENT OF THE CASE I. THE STATUTORY FRAMEWORK AND UNDERLYING POLICY The Oil, Gas and Solution Mining Law (see ECL article 23) governs regulation of the oil and gas industry by, among others things, outlining the well permitting process, well spacing requirements, and the Department of 5 Environmental Conservation’s broad enforcement authority. The statutory scheme is one of a kind given the geophysical nature of oil and gas, and given the scientific expertise required to undertake such regulation. The OGSML is the result of New York’s membership in the Interstate Oil and Gas Compact Commission (hereinafter Commission), a multi-state governmental agency of a group of oil and gas producing states, whose purpose “is to conserve oil and gas by the prevention of physical waste from any cause” (ECL 23-2101) [R: 719-720]. The Commission arose in a time period in which the lack of regulation was resulting in overproduction and the waste of oil and gas resources in producing states [R: 719-720]. The participating states endorsed, and Congress ratified, the Interstate Compact to resolve these issues [R: 719-720]. The Interstate Compact requires each member state to enact laws that prevent, among other things, “[t]he drilling, equipping, locating, spacing or operating of a well or wells so as to bring about physical waste of oil or gas or loss in the ultimate recovery thereof” (ECL 23-2101) [R: 720]. New York became a member state of the Commission, enacted the Interstate Compact in 1941, and remains a member state today [R: 720]. New York thus adopted the OGSML which, from its initial enactment in 1963 through the present day, incorporates the requirements of the Interstate Compact (see 6 Matter of Western Lands Servs., Inc. v Department of Envtl. Conservation of State of N.Y., 26 AD3d 15, 17 [3d Dept 2005], lv denied 6 NY3d 713 [2006]) [R: 719-725]. In accord with the Interstate Compact, the OGSML is designed to create uniform statewide regulation of all aspects of the oil and gas industry, including the exploration, development, production, and utilization of oil and gas [R: 46-47, 720, 721-723, 736-780]. To that end, the OGSML contains terms of art informing statutory policy objectives that are wholly unique to the oil and gas industry. Moreover, considering the complex and scientific nature of oil and gas development, these policy objectives specifically guide the Department of Environmental Conservation (hereinafter DEC) in the well spacing and well permitting determinations (see ECL 23-0503, 23-0901; 77 NY Jur 2d, Mines and Minerals §§ 83, 87). Accordingly, the policy objectives of OGSML and the unique terms contained therein are of great significance in this action. In this regard, the OGSML’s declaration of policy states: It is … in the public interest to regulate the development, production, and utilization . . . of oil and gas in this state in such a manner as will prevent waste; to authorize and to provide for the operation and development of oil and gas properties in such a manner that a greater ultimate recovery of oil and gas may be had, and that the correlative rights of all owners and the rights of all persons including landowners and the general public may be fully protected (ECL 23-0301). 7 Thus, the OGSML has four policy objectives that underpin the statute and the DEC’s authority enumerated therein. First, the OGSML regulates oil and gas in a manner that will prevent waste. In accord with the Interstate Compact, the OGSML defines the term of art “waste” as, among other things, “locating, spacing [or] drilling” a well “in a manner which causes or tends to cause reduction in the quantity of oil or gas ultimately recoverable[,] or which causes or tends to cause unnecessary surface loss or destruction of oil and gas” (ECL 23-0101 [20] [c]). Second, the OGSML regulates oil and gas in a manner that will provide for a greater ultimate recovery of oil and gas (see ECL 23-0301). Collectively, these two policy objectives form the basis for the DEC’s oversight of well location and well spacing to ensure market efficiencies. The third policy objective – protecting the “correlative rights of all owners” – is also a phrase of art as it is a statutory policy wholly unique to the oil and gas industry. The OGSML defines “owner” to be “the person who has a right to drill into and produce from a pool” (ECL 23-0101 [11]). The protection of an owner’s “correlative rights” means that the owner is entitled to a reasonable opportunity to recover or receive the oil or gas (or the equivalent thereof) attributable to its property, regardless of where the well is drilled (see Matter of Sylvania Corp. v Kilbourne, 28 NY2d 427, 431 8 n 3, 433 [1971]; 6 NYCRR 550.3 [ao]; 1 Martin & Kramer, Oil and Gas Law §§ 203, 203.2 at 27-32.1, 39-43 [2008]; 8 Martin & Kramer, Oil and Gas Law at 214-217 [2008]). The protection of correlative rights, coupled with the objectives supporting the DEC’s oversight of well location and well spacing, reflect the unique geophysical nature of oil and gas, as distinguished from solid minerals such as sand and gravel. That is, oil and gas are substances that exist in underground pools, and their movement in the subsurface is determined by geophysical properties. Thus, a well drilled on one property may result in draining the resource underlying other properties, thereby depriving those property owners of the ability to recover the resource or receive compensation for it. Indeed, under the pre-statutory “rule of capture,” this was precisely what happened (see e.g. Wagner v. Mallory, 169 NY 501, 504-506 [1902]). The OGSML, however, modified the rule of capture through its spacing and location-related provisions which prevent wasteful practices; thereby, “all [mineral] owners” in a common source of supply are assured an opportunity to either recover the resource or be compensated in kind, thus protecting their “correlative rights” (ECL 23- 0301; see Matter of Sylvania Corp. v Kilbourne, 28 NY2d at 433; Matter of 9 Western Lands Servs., Inc. v Department of Envtl. Conservation of State of N.Y., 26 AD3d at 16-17). Accordingly, the OGSML implements “pooling” whereby oil and gas drilling may occur only if the drilling operator has “control” over a substantial part of the land over which an underground oil or gas pool exists, referred to as a spacing unit (see ECL 23-0501, 23-0503; Matter of Western Lands Servs., Inc. v Department of Envtl. Conservation of State of N.Y., 26 AD3d at 17-18. Further, to the extent that an operator does not have control over a portion of a spacing unit, the landowner not providing control to the operator must nonetheless still receive compensation (see ECL 23-0901; Matter of Western Lands Servs., Inc. v Department of Envtl. Conservation of State of N.Y., 26 AD3d at 18; Bradley J. Field, DEC Program Policy DMN-1: Public Hearing Processes for Oil and Gas Well Spacing and Compulsory Integration, Department of Environmental Conservation [2006], available at http://www.dec.ny.gov/energy/28013.html [accessed Oct 23, 2013] [discussing “Compulsory Integration”]). The setback requirements preventing drilling near the borders of these spacing units is intended to ensure oil and gas extraction in one unit does not affect the minerals in an adjacent unit or pool (see ECL 23-0501 [1] [b] [1]). A full examination of the OGSML reveals that there is no comparable concept, policy, or related 10 terminology in any other New York law, even in mining law pertaining to sand and gravel. Finally, the OGSML seeks to protect the rights of all landowners and the general public (see ECL 23-0301). This general welfare policy is achieved, however, through the comprehensive scheme contained in the OGSML. The statute is entrusted to the DEC to administer statewide (see ECL 23-0101 [4], 23-0303 [1]), and DEC is granted significant enforcement authority to ensure compliance (see ECL 23-0305). Further, the DEC has promulgated uniform rules and regulations thereto to account for the complex nature of oil and gas regulation (see 6 NYCRR ch V). Supporting the scheme is also the State Environmental Quality Review Act (see ECL article 8 [hereinafter SEQRA]), which provides additional DEC oversight because the DEC prepared a Generic Environmental Impact Statement (hereinafter the “1992 GEIS”) applicable to conventional oil and gas development (see Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program, Department of Environmental Conservation [1992], available at ftp://ftp.dec.state.ny.us/dmn/download/geismaster.pdf). With the advent of high-volume hydraulic fracturing, the DEC began preparing an applicable Supplemental Generic Environmental Impact Statement (hereinafter the 11 “SGEIS”), a process that has been ongoing for more than five years (see SGEIS on the Oil, Gas and Solution Mining Regulatory Program, Department of Environmental Conservation, http://www.dec.ny.gov/energy/47554.html) [R: 912]. The draft SGEIS incorporates even more stringent regulatory controls and prohibitions for well permitting and well location of oil and gas drilling, including locational prohibitions, setbacks, and restrictions (see Revised Draft SGEIS on the Oil, Gas, and Solution Mining Regulatory Program [September 2011], http://www.dec.ny.gov/energy/75370.html) [R: 919-921]. Thus, the general welfare is protected pursuant to these comprehensive, uniform statewide controls, which are to be implemented consistently with the OGSML’s other explicit policies derived from the Interstate Compact – i.e., preventing waste, providing for greater ultimate resource recovery, and protecting the correlative rights of “all owners” (see Matter of Envirogas, Inc. v. Town of Kiantone, 112 Misc 2d 432, 433, 434- 35 [Sup Ct, Erie County 1982], affd 89 AD2d 1056 [4th Dept 1982], lv denied 58 NY2d 602 [1982]). In sum, the OGSML has unique policy objectives which result in a detailed and comprehensive scheme intended to be applied uniformly to oil and gas activities statewide. 12 II. FACTUAL BACKGROUND AND PROCEEDINGS BELOW A. Nature of the Dispute By way of background, conventional vertical natural gas drilling has long existed in New York with active operations even to this day [R: 45-47]. Oil, gas and solution salt mining wells are economically important in New York State with more than 75,000 wells drilled in the state since the late 1800's; about 14,000 of these are still active and new drilling continues (see New York State Department of Environmental Conservation, Oil, Gas and Solution Salt Mining in New York State, http://www.dec.ny.gov/energy/205.html [accessed Oct 21, 2013]). Extraction of oil and gas contributes half a billion dollars to the state's economy each year (id.). Plaintiff operates a dairy farm. In 2007, plaintiff executed two oil and gas leases with Elexco Land Services, Inc. with respect to property it owned in the Town of Middlefield, Otsego County [R: 28-29, 54-55]. The purpose of the oil and gas leases was to explore and develop natural gas resources underlying the property [R: 29, 55]. In June 2011, defendant enacted a zoning law, entitled “A Local Law Repealing the Town of Middlefield Zoning Ordinance and Adopting the Town of Middlefield Zoning Law” [R: 98-128]. Collectively, subsection B 13 (7) of article II and subsection A of article V broadly prohibit all oil and gas exploration, drilling, extraction, production, transportation, purchase, processing and storage (hereinafter Town Prohibition), thereby effectively banning all oil and gas activities within the geographical borders of the Town [R: 100, 114]. Prior to the enactment of the Town Prohibition, plaintiff could have been granted a permit for conventional vertical natural gas drilling, even with the existence of the statewide moratorium applying only to high-volume hydraulic fracturing (see Executive Order [Paterson] No. 41 [9 NYCRR 7.41]; Executive Order [A. Cuomo] No. 2 [9 NYCRR 8.2]). B. The Instant Action On September 15, 2011, plaintiff commenced this action in Supreme Court, Otsego County, challenging the validity of the Town Prohibition [R: 26-36]. On October 28, 2011, plaintiff moved for summary judgment, seeking a declaration that the Town Prohibition is expressly preempted by the OGSML’s supersession clause, ECL 23-0303 (2), as well as impliedly preempted because the Town Prohibition infringes upon and conflicts with the language and objectives of the OGSML (as codified in ECL article 23) and section 3-301 (5) of the Energy Law [R: 43-44]. By cross motion dated December 5, 2011, defendant opposed plaintiff’s motion and sought 14 dismissal of the complaint [R: 88-89]. In January 2012, the court granted the amicus curiae applications of both EARTHJUSTICE (on behalf of a number of environmental groups) and the Town of Ulysses, and received supplemental submissions from all parties [R: 5, 57-87]. Supreme Court then rendered its decision on February 24, 2011, rejecting the preemption claims and granting defendant’s cross motion dismissing the complaint [R: 5-15]. C. Supreme Court Decision In its decision, Supreme Court analyzed only the express preemption claim, in effect finding that the existence of the supersession clause at ECL 23-0303 (2) foreclosed any implied preemption challenges [R: 7]. In holding that the Town Prohibition was not expressly preempted, Supreme Court focused predominantly on the legislative history of article 3-A of the Conservation Law (which later became known as the OGSML) and its successor provisions in ECL article 23 [R: 7-10]. Citing the Memorandum in Support of the 1963 legislation (see L 1963, ch 959), the court acknowledged that the statute, even as initially enacted, provided the Conservation Department (now the Department of Environmental Conservation [hereinafter “DEC” or “Department”]) with “regulatory powers pertaining to the determination and establishment of proper well 15 spacing and well locations,” and “empowered [the Department] to make an early determination as to all the lands believed underlaid by a pool [in order to] fix the proper size drilling units and well locations” [R: 9 (emphasis added)]. Yet, the court concluded that nothing in the statute (as initially enacted or as later amended) or its legislative history addressed the Legislature’s intent “to impact . . . a local municipality’s right to enact legislation pertaining to land use” [R: 12]. The court also found significant the 1978 amendments to ECL 23- 0301 (see L 1978, ch 396), which concerned the stated declaration of policy [R: 10]. These amendments replaced the phrase “foster, encourage and promote” the development of oil and gas with the phrase “regulate” the development of oil and gas [R: 10, 725]. However, as the court noted, this same legislation also simultaneously amended Energy Law § 3-101 (5) to declare that it was the energy policy of the state “to foster, encourage and promote the prudent development and wise use of . . . all indigenous state energy resources, including, but not limited to, on-shore oil and natural gas, [and] natural gas from Devonian shale formations” [R: 725-726]. Nonetheless, the court found that this change “streamlin[ed] the regulatory function of the Department of Environmental Conservation” [R: 10] even though the bill’s stated purpose – now reflected not only in the ECL, but also 16 in the Energy Law – was to “encourage the State to develop all of its indigenous energy resources,” thus, again reaffirming the overarching policy objectives of providing for greater ultimate recovery, preventing waste, and protecting mineral owners’ correlative rights [R: 726]. The court then examined the 1981 amendments (see L 1981, ch 846), which added the supersession clause (see ECL 23-0303 [2]), and reiterated its view that promotion and regulation were separate activities, and that the DEC was responsible only for the latter [R: 11-12]. The court summarily concluded that “regulation” dealt only with the “activity of the industry,” meaning the “method and manner of drilling and the like, but not the broader component of the development of this natural resource” [R: 11-12]. To support this determination the court relied on the Merriam-Webster Dictionary definition of “regulation” to conclude that the statute empowers the DEC to regulate only the “how” of drilling, but not the “where” [R: 12]. Finally, the court stressed Court of Appeals’ rulings in Matter of Frew Run Gravel Prods. v Town of Carroll (71 NY2d 126 [1987]) and Matter of Gernatt Asphalt Prods. v Town of Sardinia (87 NY2d 668 [1996]), based on constructions of a supersession clause in the Mined Land Reclamation Law (“MLRL”), to support its finding that the Town Prohibition was not expressly preempted [R: 12-14]. The court reached this conclusion 17 notwithstanding that the supersession language and the objectives of the MLRL are substantially different relative to the supersession language and the objectives of the OGSML. In sum, the court erred in failing to apply all the applicable tools of statutory construction and in failing to apply the implied preemption doctrines. D. Plaintiff’s Motion to Renew On March 29, 2012, plaintiff moved to renew based on newly discovered facts, namely, additional legislative history that was not in the official Bill Jacket of the 1981 amendments, but, instead, was buried deep in the New York State Archives [R: 940-941, 942-995]. This information was not in the official Bill Jacket because the final amendments enacted in 1981 had incorporated three individual program bills presented by the Governor on behalf of the DEC, however, the legislative history of the three separate bills had never been consolidated or included in the Bill Jacket of the omnibus legislation [R: 944-950]. The Memorandum in Support of one of the separate bills (see A6928) specifically addresses the supersession clause, stating: The provision for supersedure by the [OGSML] of local laws and ordinances clarifies the legislative intent behind the enactment of the oil and gas law in 1963. The comprehensive scheme envisioned by this law and the technical expertise required to administer and enforce it, necessitates that this authority be reserved to that State. Local government’s diverse 18 attempts to regulate the oil, gas, and solution mining activities serve to hamper those who seek to develop these resources, with Statewide repercussions. With adequate staffing and funding, the State’s oil, gas, and solution mining regulatory program will be able to address the concerns of local governments and assure the efficient and safe development of these energy resources [R: 949, 995]. Defendant opposed plaintiff’s motion to renew, and by a decision dated June 19, 2012 and entered on June 20, 2012, Supreme Court found that there was no basis to change its prior decision and denied plaintiff’s motion to renew [R: 18-21]. On August 8, 2012, the court then entered judgment, dated August 1, 2012, as to both decisions [R: 24-25]. Plaintiff timely filed a notice of appeal, dated August 24, 2012 [R: 2]. E. Appellate Division Decision On May 2, 2013, the Appellate Division, Third Department, rendered its decision affirming Supreme Court by incorporating the reasoning it outlined in Matter of Norse Energy Corp. USA v Town of Dryden, 108 AD3d 25 (3d Dept 2013), lv granted 21 NY3d 863 (2013) [R: 1029-1031]. Accordingly, the Appellate Division held that ECL 23-0303 (2) does not expressly preempt the Town Prohibition, and that the OGSML does not impliedly preempt the Town Prohibition as there is no inconsistency in the provisions and objectives of the OGSML compared to the Town Prohibition. 19 On the issue of express preemption, the Appellate Division focused solely on the first clause within the supersession clause that “[t]he provisions of this article shall supersede all local laws or ordinances relating to the regulation of the oil, has and solution mining industries,” in effect ignoring the second clause that the provisions of the article “shall not supersede local government jurisdiction over local roads or the rights . . . under the [RPTL]” [R: 1038-1044]. Thereafter, the court administered a plain language analysis, using the Merriam-Webster On-line dictionary to define the term “regulation,” and concluded that the phrase “regulation of the … industr[y]” pertained narrowly to the “details or procedure” of the oil and gas industry, and thus the clause did not concern land use regulation [R: 1038-1039]. The Appellate Division then examined the legislative history, also noting that the OGSML’s declaration of policy was modified in 1978 to replace “foster, encourage and promote development” with “regulate the development” [R: 1040]. Accordingly, the court summarily concluded that “the Legislature clearly acknowledged that promotion and regulation were considered separate and distinct activities,” thereby tasking the Energy Office with promotion of energy and tasking the DEC with regulation of the oil, gas and solution mining industries [R: 1040]. The court then looked to 20 the 1981 amendments to the OGSML, which enacted the supersession language, and again concluded that the DEC is tasked only with regulating the “technical, operational” aspects of oil and gas activities, but not where drilling may occur [R: 1041-1042]. Lastly, the court also relied on the Court of Appeals’ rulings in Matter of Frew Run Gravel Prods. v Town of Carroll and Matter of Gernatt Asphalt Prods. v Town of Sardinia to support finding that the Town Prohibition was not expressly preempted even though the supersession language and the objectives of the MLRL are substantially different from the supersession language and the objectives of the OGSML [R: 1042-1044]. As for implied preemption, the Appellate Division first determined correctly that the OGSML’s express supersession clause does not foreclose an implied preemption analysis [R: 1044-1045]. However, in conducting the substantive implied preemption analysis – while the court acknowledged the statutory provisions relating to unit size, spacing and well location – it nonetheless classified these matters as “regulatory” and thereby concluded that these provisions relate only “to the details and procedures” of the well [R: 1045]. Then, rather than undertaking the relevant inquiry of whether local bans on oil and gas activities infringe on compliance with these requirements, the court simply concluded that because these provisions do 21 not relate to “traditional land use considerations,” there was no conflict [R: 1045]. Indeed, the court concluded that a local ban “may harmoniously coexist [with the OGSML]; the zoning law will dictate in which, if any, district drilling may occur, while the OGSML [will] instruct[] operators as to the proper spacing . . . to prevent waste” [R: 1045]. Finally, despite the explicit statutory directive that “the correlative rights of all [mineral] owners . . . be fully protected,” the Appellate Division found no inconsistency between the policy objectives of the OGSML and the enactment of the Town Prohibition banning all oil and gas activities [R: 1045-1046].3 The court reasoned that nothing in the OGSML or its legislative history suggested an intention to maximize recovery at the expense of local land use regulation [R: 1045-1046], and stated that the OGSML seeks to protect the rights of all persons, including the general public [R: 1046]. The court stated that individual municipalities could use the provisions of the OGSML to protect the rights of “all persons including landowners and the general public,” but in so doing, misapplied the OGSML since its provisions are exclusively within the authority of DEC [R: 1046]. Furthermore, the Appellate Division did not explain how the OGSML’s 3 Correlative rights is a legal theory that “all land owners whose tracts overlay a producing formation have . . . rights in the formation” (see n 1, supra; pp, 5-7, supra). 22 policy objectives of protecting correlative rights and preventing waste could possibly be achieved by a municipal-wide drilling ban that precludes any resource recovery [R: 1044-1046]. In sum, the Appellate Division erred in failing to give express meaning to the provisions of ECL 23-0303 (2) by implementing all of the applicable tools of statutory construction and in failing to properly apply an implied preemption analyses. JURISDICTIONAL STATEMENT Plaintiff moved for leave to appeal to the Court of Appeals, which was granted by a decision and order dated August 29, 2013 [R: 1026-1027]. This Court has jurisdiction to review the questions raised in this brief because plaintiff fully briefed and argued the legal theories of express and implied preemption in both Supreme Court and the Appellate Division [7, 33-34, 43-51, 1038-1046] (see CPLR 5501, 5602 [a]; see also Matter of Richardson v Felder Roofing, 67 NY2d 246, 250 [1986]; Rentways, Inc. v O’Neill Milk & Cream Co., 308 NY 342, 349 [1955]). 23 ARGUMENT THE TOWN PROHIBITION IS PREEMPTED BY STATE LAW PURSUANT TO THE DOCTRINES OF EXPRESS PREEMPTION, FIELD PREEMPTION, AND CONFLICT PREEMPTION The Town Prohibition violates the expressed and implied intentions of the State Legislature. Defendants cannot, under the guise of their municipal home rule powers, justify a local zoning law that is contrary to language expressed in this State’s general laws and which, further, infringes upon a comprehensive State regulatory scheme and conflicts with specific State statutory provisions and policies. Thus, the Town Prohibition is preempted pursuant to the doctrines of express preemption and implied preemption. By way of background, it is well-settled that “[t]owns . . . have no inherent power to enact or enforce zoning or land use regulations. They exercise such authority solely by legislative grant and in the absence of legislative delegation of power their actions are ultra vires and void” (Matter of Kamhi v. Planning Bd. of Town of Yorktown, 59 NY2d 385, 389 [1983]; see DJL Rest. Corp. v City of New York, 96 NY2d 91, 94 [2001]; Kamhi v Town of Yorktown, 74 NY2d 423, 427 [1989]). In this regard, towns have historically been granted authority to enact local zoning and land use ordinances and, more recently, were granted authority to enact local zoning and land use laws; however, both actions are subject to the Legislature’s 24 oversight (see 25 NY Jur 2d Counties, Town, and Municipal Corporations § 123).4 Thus, especially considering the Legislature’s oversight in zoning and land use regulation, “[t]he preemption doctrine represents a fundamental limitation on home rule powers” (Matter of Cohen v Board of Appeals of Vil. of Saddle Rock, 100 NY2d 395, 400 [2003], quoting Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d 372, 377 [1989]). This Court has articulated two distinct, yet related, preemptions doctrines, express preemption and implied preemption; further, this Court has determined that implied preemption can be analyzed pursuant to the theories of field preemption and conflict preemption (see DJL Rest. Corp. v City of New York, 96 NY2d at 95; New York State Club Assn. v City of New York, 69 NY2d 211, 217 [1987], affd 487 US 1 [1988]; 25 NY Jur 2d, Counties, Towns, and Municipal Corporations §§ 349-351; cf. Balbuena v IDR Realty LLC, 6 NY3d 338, 356 [2006, Graffeo, J.]). Here, it is submitted that the Town Prohibition is preempted on all three grounds. In addition, further support for finding the Town Prohibition preempted by the OGSML is offered by distinguishing the precedent relied upon by Supreme Court and the Appellate Division, as well as by outlining the decisions of other state 4 The distinctions between ordinances and local laws, and State oversight over each, are addressed in detail at Point I, F, i, infra. 25 courts, which have all held that similar zoning bans are preempted (see Voss v Lundvall Bros., 830 P2d 1061 [Colo 1992]; State ex rel. Morrison v Beck Energy Corp., 989 NE2d 85 [Ohio Ct App 9th Dist 2013], appeal allowed 989 NE2d 70 [2013]; see also Energy Mgmt. Corp. v City of Shreveport, 397 F3d 297 [5th Cir 2005]; Northeast Natural Energy, LLC v City of Morgantown, Civ Act No 11-C-411, 2011 WL 3584376 [W Va Cir Ct Aug 12, 2011]). Accordingly, plaintiff respectfully urges this Court to reverse the orders of Supreme Court and the Appellate Division, declare that the Town Prohibition is preempted, and, thereby, allow the DEC to continue safely and efficiently regulating oil and gas development in New York. POINT I ECL 23-0303 (2) EXPRESSLY PREEMPTS THE TOWN PROHIBITION GIVEN THE COMMON AND ORDINARY MEANING OF “REGULATION” AS WELL AS GIVEN THE LEGISLATURE’S INTENT TO LIMIT LOCAL JURISDICTION TO ONLY ROADS AND TAXES The OGSML (codified at ECL article 23) was originally enacted in 1963 based on an interstate model designed to achieve uniform Statewide regulation of all aspects of the oil and gas industry, including exploration, development, production and utilization (see L 1963, ch 959) [R: 46-47, 721, 736-80]. The supersession clause at issue here (see ECL 23-0303 [2]) was 26 enacted by amendment to the OGSML in 1981 (see L 1981, ch 846, § 4) [R: 727-728]. In full, ECL 23-0303 (2) states: The provisions of this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supersede local government jurisdiction over local roads or the rights of local governments under the real property tax law [emphasis added]. The intent of this language is unambiguous, and its application is straightforward: with the sole exception of local roads and real property taxation, all local laws or ordinances that would purport to relate to the regulation of the oil and gas industry are expressly preempted, including, as here, a local zoning law that bans all oil and gas activities within the Town’s geographic borders. The doctrine of express preemption renders void local laws and ordinances that are expressly prohibited by State statute (see Matter of Cohen v Board of Appeals of Vil. of Saddle Rock, 100 NY2d at 400; Oil Heat Inst. of Long Is. V Town of Babylon, 156 AD2d 352, 352 [2d Dept 1989]). The inquiry into express preemption routinely turns on principles of statutory construction, in which the primary consideration is to ascertain and give effect to the intention of the Legislature (see e.g. Vatore v Commissioner of Consumer Affairs of City of N.Y., 83 NY2d 645, 647, 650 [1994]). Here, the supersession clause, ECL 23-0303 (2), expressly 27 preempts the Town Prohibition given the common and ordinary meaning of “regulation,” which includes land use prohibitions or restrictions. The Legislature’s intent to expressly preempt can be further ascertained from (i) other statutes pertaining to local zoning regulation, (ii) the limitation of local government “jurisdiction” to discrete enumerated exceptions to preemption (i.e., local roads and property taxes) that do not pertain to local zoning, (iii) a reading of the statute as a whole, and (iv) the overall legislative history. In this regard, Supreme Court and the Appellate Division erred in failing to utilize all of these tools to determine the Legislature’s intent and, instead, assigned a technical definition to “regulation” derived primarily from distinguishable decisions of this Court, which concerned statutory construction of a distinguishable statute. A. The Supersession Clause Expressly Preempts the Town Prohibition Because the Common and Ordinary Meaning of “Regulation” Encompasses Local Zoning Regulation. Focusing specifically on the first clause within the supersession clause that “this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries,” this Court’s determination on express preemption turns on whether the term “regulation” encompasses local zoning regulation or, as the Appellate Division found, more narrowly pertains only to the regulation of the technical operational 28 activities of the oil, gas, and solution mining industries. The OGSML does not define “regulation.” In similar circumstances, however, this Court has routinely turned to Black’s Law Dictionary to determine the common and ordinary meaning of terms expressed in a statute (see e.g. People v Couser, 94 NY2d 631, 636-637 [2000]; People v Hedgeman, 70 NY2d 533, 538 [1987]; see also McKinney’s Cons of Laws of NY, Book 1, Statutes § 234). In this regard, Black’s Law Dictionary defines “regulation” as “[t]he act or process of controlling by rule or restriction” (Black’s Law Dictionary [9th ed 2009], regulation). The Town Prohibition falls within this definition of “regulation” and is, thus, preempted. The Town’s Prohibition, by its own terms, controls and restricts oil and gas activities by banning all such activities within its geographic borders [R: 100, 114]. In this regard, the Town Prohibition is itself enacted though a section entitled “General Regulations Applying To All Districts,” which states that “all oil, gas or solution mining and drilling are prohibited uses” [R: 114 (emphasis added)]. Accordingly, the Supreme Court and the Appellate Division erred in assigning a narrow, constrained definition to the term “regulation,” taken from the Merriam-Webster On-line dictionary – i.e. that regulation only pertains to details or procedures. This Court should adopt the broader 29 definition in line with the common and ordinary meaning of regulation – i.e. the act or process of controlling by rule or restriction (as confirmed in, inter alia, the Town Law) – and, thus, find that the supersession clause expressly preempts the Town Prohibition (see e.g. People v Thompson, 99 NY2d 38, 41-42 [2002]; compare People v Couser, 94 NY2d at 636-637). B. Legislative Intent to Expressly Preempt the Local Zoning Regulation is Evidenced by the Statutory Town Law Definition. Further, this Court also routinely applies the canon of in pari materia in construing the Legislature’s intent in the terms expressed in its statute (see e.g. Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d 106, 121 [2012, Graffeo, J.]; Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298, 304 [1985]). This canon explains that “[s]tatutes that relate to the same subject are in pari materia and should ‘be construed together unless a contrary intent is clearly expressed by the Legislature’” (Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d at 121, quoting Matter of Plato’s Cave Corp. v State Liq. Auth., 68 NY2d 791, 793 [1986]). In this regard, the State has historically granted zoning and land use authority to towns through the enactment of Town Law § 261 (see Assn. of Towns of the State of New York, Town Manual §§ 6-1, 6-4, at 109-110, 113; Patricia E. Salkin, NY 30 Zoning Law & Practice § 2:12; see also L 1932, ch 634), which provides further support that “regulation” encompasses local zoning regulation, as it states: “town board[s are] hereby empowered by local law or ordinance to regulate and restrict . . . the location and use of . . . land for trade [and] industry . . . provided that such regulations shall apply to and affect only such part of a town as is outside the limits of any incorporated village or city” [emphasis added]. The analogous enabling statutes through which the State has granted zoning and land use authority to villages and cities also contain language that supports “regulation” encompassing local zoning regulation (see Village Law § 7-700; General City Law § 20 [24]; see also Statute of Local Governments § 10 [6]). Collectively, in reviewing these related statutes pertaining to local zoning authority, it is apparent that the term regulation is to be broadly defined to encompass local zoning regulation. It is noted that Supreme Court and the Appellate Division did not undertake this particular analysis in determining the legislative intent in the supersession clause. Nonetheless, the Appellate Division did make light of an unrelated statute concerning the operation of hazardous waste facilities, ECL 27-1107, in which “the Legislature expressly prohibited local municipalities from requiring ‘any approval consent, permit, certificate or other condition, including conformity with local zoning or land use laws and ordinances’” 31 (Matter of Norse Energy Corp. USA v Town of Dryden, 108 AD3d 25, 35 n 7 [2013], supra) [R: 1042 n 7]. It was suggested that this indicates that the Legislature specifically prohibits local zoning and land use regulation if that is its intention (see id.). Initially, it is submitted that any comparison to a statute on hazardous waste facilities is misguided as it is unrelated to the subject matter at issue (cf. Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d at 121). Nonetheless, the canon of in pari material provides that in construing a statute, while comparison to subsequently enacted statutes may be helpful, comparisons should predominantly focus on previously enacted statutes as the Legislature is presumed to be familiar with legislation of the same subject that is already enacted (see Commonwealth of the N. Mariana Is. v Canadian Imperial Bank of Commerce, 21 NY3d 55, 62 [2013, Rivera, J.]; Matter of Grand Jury Subpoena Duces Tecum Served on Museum of Modern Art, 93 NY2d 729, 745-746 [1999]; McKinney’s Cons of Laws of NY, Book 1, Statutes §§ 222-223). Thus, it is noted that the language in Town Law §261 indicating that local zoning is the regulation of land for trade and industry was enacted in 1932 (see L 1932, ch 634; Little v Young, 82 NYS2d 909, 915 [Sup Ct, Nassau County 1948], affd 274 AD 1005 [1948], affd 299 NY 699 [1949]), the supersession clause at issue was 32 enacted in 1981 (see L. 1981, c. 846, § 4), and ECL 21-1107 was amended specifically to mention local zoning or land use laws and ordinances in 1987 (see L 1987, ch 618, §10). Accordingly, conferring the appropriate statute of the same subject matter, it is apparent that the Legislature intended that the supersession clause preempt local zoning regulation as the term regulation has historically encompassed local zoning regulation. C. Legislative Intent to Expressly Preempt Local Zoning Regulation is Evidenced by Local Zoning Regulation Not Being Enumerated as an Exception to Preemption in the Supersession Clause. The Legislature’s enumeration of discrete exceptions to the scope of supersession – with no reference to local zoning ordinances among those exceptions - confirms legislative intent not to except zoning restrictions. In construing the Legislature’s intent “where the Legislature lists exceptions in a statute, items not specifically referenced are deemed to have been intentionally excluded” (Weingarten v. Board of Trustees of N.Y. City Teachers’ Retirement Sys., 98 NY2d 575, 582-583 [2002, Graffeo, J.]; Matter of Jewish Home & Infirmary of Rochester v Commissioner of N.Y. State Dept. of Health, 84 NY2d 252, 262-263 [1994]; see also McKinney's Cons Laws of N.Y., Book 1, Statutes § 240). Thus, now focusing on the second clause within the supersession clause which states that the article “shall not supersede local government 33 jurisdiction over local roads or the rights of local governments under the [RPTL],” this clause speaks specifically to the “jurisdiction” retained by local governments under the OGSML with such jurisdiction being excluded from preemption. “Jurisdiction” is a term of art, which, in pertinent part, is defined as “[a] government’s general power to exercise authority over . . . things within its territory” (Black’s Law Dictionary [9th ed 2009], jurisdiction). Accordingly, the Legislature’s intent – with respect to oil and gas regulation – was to confine local authority specifically and solely to two discrete areas – local roads and property taxes – and not zoning and land use restrictions. Further, it is noted that Supreme Court and the Appellate Division erred in not applying this Court’s precedent with regard to construing exceptions enumerated within a statute (see Weingarten v. Board of Trustees of N.Y. City Teachers’ Retirement Sys., 98 NY2d at 582-583; Matter of Jewish Home & Infirmary of Rochester v Commissioner of N.Y. State Dept. of Health, 84 NY2d at 262-263). D. The Legislature’s Intent to Expressly Preempt Local Zoning Regulation is Evident Upon Construing the Supersession Clause as a Whole. In matters of statutory interpretation, “it is well settled that a statute must be construed as a whole” (Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d 106, 120 34 [2012, Graffeo, J.]; see McKinney’s Cons of Laws of NY, Book 1, Statutes § 97). Now focusing on the two clauses within the supersession clause together, it is noted that the supersession clause first outlines local preemption with respect to oil and gas regulation, and then enumerates local roads and taxation as exceptions to preemption. Construing the supersession clause as a whole, the Legislature’s intent to preempt local zoning regulation is apparent as the supersession clause first preempts all local regulation – encompassing zoning regulation – and then carves out two specific exemptions to preemption concerning local roads and taxation. In this regard, Supreme Court and the Appellate Division determined that the supersession clause first narrowly preempts local regulation of the technical operational activities of the oil, gas, and mining industries, and that the clause then apparently carves out two specific exemptions concerning local roads and taxation. This construction of the statute as a whole makes little sense because road usage and property taxes have nothing to do with technical operations, i.e., the “method and manner” of conducting oil and gas drilling. The mere fact that a drilling operator may use local roads in the course of conducting drilling operations (e.g., to get to and from the drill site) does not transform local road usage into a drilling operation (cf. D’Amico v Christie, 71 NY2d 76, 88 [1987]; Lundberg v State of New 35 York, 25 NY2d 467, 471 [1969]). Likewise, ad valorem taxes – imposed by the State on all industries to varying levels – have nothing to do with the specific industry’s “operations,” i.e., the technical aspects of conducting the industry’s physical activities. Accordingly, the Legislature’s intent to expressly preempt local zoning regulation is apparent because the Legislature would not have needed to carve out these two exceptions if “regulation” was confined only to technical operations. It is noted that Supreme Court and the Appellate Division erred in not applying this statutory construction analysis. Further, the lower court decisions render the exceptions to preemption mere surplusage and, thus, their construction of the statute should not be affirmed (see Criscione v. City of New York, 97 NY2d 152, 157 [2001, Graffeo, J.]; Leader v. Maroney, Ponzini & Spencer, 97 NY2d 95, 104 [2001]; see also McKinney’s Cons of Laws of NY, Book 1, Statutes § 231). E. Legislative History Confirms That ECL 23-0303 (2) Expressly Preempts Local Zoning Regulation. In determining the Legislature’s intent, this Court also considers the corresponding legislative history (see Matter of Albany Law School v New York State Off. of Mental Retardation & Dev. Disabilities, 19 NY3d at 120; McKinney’s Cons of Laws of NY, Book 1, Statutes § 124). In this regard, the legislative history of the supersession clause and, more generally, the 36 OGSML confirms the Legislature’s intent to expressly preempt local zoning regulation and confine local jurisdiction solely to roads and property taxes. As originally enacted in 1963, the OGSML sought to “foster, encourage and promote” natural gas development in a manner that would prevent waste, maximize recovery of the State’s oil and gas resources, and protect correlative rights [R: 721-723, 748-750] (see L 1963, ch 959; ECL § 23-0301 [as originally enacted]). Both the language of the statute and its legislative history reveal that the manner in which this was to be achieved was by vesting administration of the statute in the State, including the responsibility for establishing well spacing and wellbore location based on sound geologic and geophysical principles [R: 722-725, 800-816]. In 1978, the statute’s declaration of policy (codified in ECL § 23- 0301) was amended, such that the words “foster, encourage and promote” oil and gas development were replaced with the word “regulate” [R: 725] (see L 1978, ch 396). At the same time, the Legislature also amended Energy Law § 3-101 (5) to declare it to be the energy policy of the State “to foster, encourage and promote the prudent development and wise use of all indigenous state energy resources including, but not limited to, on-shore oil and natural gas, off-shore oil and natural gas, natural gas from Devonian shale formations” [R: 725-726] (see L 1978, ch 396). Thus, as of 1978, the 37 “promote development” policy language was added to the Energy Law, while regulatory responsibility remained with the DEC. Accordingly, the State’s overarching objective – as reflected in both the Energy Law and the ECL – remained the same as it had been since 1963 – to maximize the recovery of indigenous oil and gas resources and prevent waste [R: 725- 726]. Further, nothing was changed in the remainder of the OGSML (i.e., the objectives of preventing “waste,” providing for greater ultimate recovery, and protecting correlative rights) relative to the DEC’s authority to “where” drilling occurred by virtue of DEC’s control over the size, shape, and location of spacing units and the proper designation of drilling location (see L 1978, ch 396). The 1981 amendments to the ECL (see L 1981, ch 846), which added the supersession clause, came into being with the advent of the energy crisis of the 1970s and after almost two decades of problems resulting from piecemeal local regulation of the oil and gas industry [R: 46-48, 727, 840]. Thus, the 1981 amendments sought to “promote the development of domestic energy supplie[s], including NYS’s resources of oil and natural gas” [R: 727, 840] (see Mem in Support S6455-B / A8475-B). To that end, the 1981 amendments updated the regulatory program, granting the DEC additional powers “to enable it to provide for the efficient, equitable and 38 environmentally safe development of the State’s oil and gas resources,” by, among other things, adding the supersession clause of ECL 23-0303 (2) [R: 727-728, 843-844] (see Governor’s Approval Mem, Bill Jacket, L 1981, ch 846) – i.e., directing that the OGSML “shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries”, with the only exceptions being relative to local roads and real property taxes. Concomitantly, in exchange for definitively removing local control over oil and gas development, the 1981 amendments gave two new “rights” to localities: (1) a liability fund to compensate municipalities for damages related to oil and gas activities, ECL 23-0303 (3); and (2) ad valorem taxing authority (accomplished by amending the RPTL), authorizing municipalities to levy a real property tax on oil and natural gas based upon production [R: 728-729, 838, 840-841, 846-849]. In other words, the Legislature gave municipalities these two trade-offs because it was “cracking down” on years of local regulation of oil and gas development, which hampered efficient resource development. Accordingly, the Legislature’s intent was to expressly preempt all local control of oil and gas activities, including any effort to determine or otherwise regulate “where” those activities could occur (i.e., local zoning ordinances) [R: 47-50, 729-730, 949-51, 995]. 39 Indeed, legislative history to a separate bill (A6928) that was ultimately incorporated into the omnibus 1981 legislation makes plain that the Legislature intended ECL 23-0303 (2) to preclude local control over oil and gas development. Specifically, the Memorandum in Support of A6928 states: The provision for supersedure by the [OGSML] of local laws and ordinances clarifies the legislative intent behind the enactment of the oil and gas law in 1963. The comprehensive scheme envisioned by this law and the technical expertise required to administer and enforce it, necessitates that this authority be reserved to the State. Local government’s diverse attempts to regulate the oil, gas, and solution mining activities serve to hamper those who seek to develop these resources and threaten the efficient development of these resources, with Statewide repercussions. With adequate staffing and funding, that State’s [OGSML] regulatory program will be able to address the concerns of local government and assure efficient and safe development of these energy resources [R: 949, 995 (emphasis added)]. The Legislature’s intent and purpose for its supersession clause could not be stated more clearly: to create a “comprehensive scheme” for oil and gas regulation that would “be reserved to the State and would avoid the “[l]ocal government’s diverse attempts to regulate the oil [and] gas” industries that for years had “serve[d] to hamper those who seek to develop 40 these resources and threaten the efficient development of these resources” [R: 949, 995]. The Legislature also determined that local concerns would be adequately accommodated through State regulation. In other words, the State preempted all local laws and ordinances relating to oil and gas activity (including zoning), with the only exceptions being local roads and taxes [R. 949, 950-951]. Accordingly, both the factual circumstances and legislative history of the 1981 amendments establish the Legislature’s intent to expressly preempt local zoning authority. Thus, it is submitted that Supreme Court and the Appellate Division’s findings, that nothing in the legislative history indicates the intent to preempt local zoning authority, are without merit. F. The MLRL, Matter of Frew Run Gravel Prods., and Matter of Gernatt Asphalt Prods. Are Not Relevant to the OGSML Express Preemption Analysis The marked differences between the OGSML and the MLRL in all pertinent respects – i.e., supersession language, subject matter of regulation, statutory evolution and legislative history – establish that MLRL precedent does not inform the preemption analysis under the OGSML, and the lower courts erred in finding otherwise. Accordingly, this Court’s holdings in 41 Matter of Frew Run Gravel Prods. and Matter of Gernatt Asphalt Prods. can be reconciled with a finding of express preemption here. i. The Supersession Language of the OGSML and the MLRL is Materially Different. The distinctions between the OGSML and MLRL supersession clauses center on the important differences between local laws and ordinances, and, relatedly, the OGSML’s uses of the words “regulation” and “jurisdiction.” The OGSML supersession clause codified at ECL 23-0303 (2) states: “The provisions of this article shall supersede all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries; but shall not supersede local government jurisdiction over local roads or the rights of local governments under the [RPTL]” [emphasis added]. The MLRL supersession clause analyzed in Matter of Frew Run Gravel Prods., codified at ECL 23-2703 (2) (see L 1974, ch 1043), stated: “For the purposes stated herein, this article shall supersede all other state and local laws relating to the extractive mining industry; provided, however, that nothing . . . shall be construed to prevent any local government from enacting local zoning ordinances or other local laws which impose stricter mined land reclamation standards or requirements than those found herein” (71 NY2d 126, 129 [1987] [emphasis added]). The MLRL supersession clause analyzed in Matter of Gernatt Asphalt Prods. is the clause in existence today, which differs primarily in that it 42 ends “nothing . . . shall be construed to prevent any local government from . . . enacting or enforcing local zoning ordinances or laws which determine permissible uses in zoning districts” (87 NY2d 668, 682 [1996]). Accordingly, the OGSML clause broadly supersedes “all local laws or ordinances,” whereas, the MLRL clause supersedes only “local laws” and affirmatively leaves local zoning ordinances and laws specifically exempted from preemption. Remembering that towns have no inherent power to enact zoning or land use regulations absent the delegation of such authority (see Matter of Kamhi v. Planning Bd. of Town of Yorktown, 59 NY2d 385, 389 [1983]), it is critical here to detail the historical distinctions between ordinances and local laws. Since at least the 1930s, the State enabled towns to narrowly legislate through ordinances, including specifically by enacting zoning ordinances pursuant to statutory authority now codified at Town Law § 261 (see Assn. of Towns of the State of New York, Town Manual § 6-1, at 109-110; Terry Rice, Zoning and Land Use, 43 Syracuse L Rev 615, 616-617 [1992]; Patricia E. Salkin, NY Zoning Law & Practice § 2:12; see also L 1932, ch 634). After increased concerns arose regarding localities’ overall affirmative home rule authority, significant overall 43 reforms were enacted in the 1960s (see Kamhi v Town of Yorktown, 74 NY2d 423, 428-429 [1989]; Assn. of Towns of the State of New York, Town Manual § 6-1, at 109-110; Patricia E. Salkin, NY Zoning Law & Practice §§ 2:04, 2:05). Initially, the New York Constitution was amended through the enactment of article IX, which in pertinent part states that “every local government shall have power to adopt and amend local laws with the provisions of this constitution or any general law . . . except to the extent that the legislature shall restrict the adoption of such a local law” [emphasis added] (see DJL Rest. Corp. v City of New York, 96 NY2d 91, 94 [2001]). Pursuant thereto, the Legislature then enacted Municipal Home Rule Law §10 authorizing local governments to, among other things, adopt and amend any local law relating to “its physical and visual environment” so long as such local law is not “inconsistent with the provisions of the constitution or any general law” (Municipal Home Rule Law § 10 [1] [i], [ii] [a] [11]). Further, the legislature enacted the Statute of Local Governments § 10 granting local governments “the power to[, among other things,] adopt, amend and repeal zoning regulations” (Statute of Local Governments § 10 [6]). Accordingly, the effect is that towns are authorized to adopt local zoning ordinances pursuant to Town Law § 261 and authorized to adopt local zoning laws 44 pursuant to the Constitution, Municipal Home Rule Law, and Statute of Local Government, so long as such local laws are not inconsistent with the Constitution or general laws of the State (see Anschutz Exploration v Town of Dryden, 35 Misc 3d 450, 461-462 [Sup Ct, Tompkins County 2012], affd 108 AD3d 25 [2013], lv granted 21 NY3d 863 [2013]).5 However, ordinances and local laws are separately defined (see Town Law § 131; Municipal Home Rule Law § 2 [9]; 25 NY Jur 2d, Counties, Towns, and Municipal Corporations § 328) and are enacted through different procedures (see e.g. Town Law § 264; Municipal Home Rule Law, article 3). Further, with respect to the subject matter to which each applies – while they overlap in the realm of zoning regulation – each has an enumerated list of applicable subject matter (see Town Law § 130; Municipal Home Rule Law § 10 [1] [ii]; Assn. of Towns of the State of New York, Town Manual §§ 6-2, 6-11, at 110- 111, 127-129). Therefore, “local ordinances” are separate and distinct from “local laws”. Accordingly, the text of the OGSML supersession clause and MLRL supersession clause are sufficiently distinguishable, especially in light of the fact that the MLRL supersession clause was enacted in the 5 It is noted that Town Law § 261 now empowers the enactment of ordinances and local laws (see L 1997, ch 458). 45 years just following the State’s grant of local law powers. Accordingly, it is substantially different to preempt “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries” as opposed to preempt “all local laws relating to the extractive mining industry.” Indeed, “[h]istorically, the most prevalent use of a town’s ordinance powers had been in the adoption of land use regulations” (Assn. of Towns of the State of New York, Town Manual § 6-4, at 113). Indeed, the zoning regulation in both Matter of Frew Run Gravel Prods. and Matter of Gernatt Asphalt Prods. was unsurprisingly adopted by town ordinance, which renders these ordinances not preempted according to the plain language of the MLRL supersession clause. Additional language in the supersedure provisions of the OGSML and the MLRL further underscores the distinctions between the statutes. The enumerated exception to preemption in the MLRL supersession clause in effect stated that nothing shall be construed to prevent any local government from enacting certain local zoning laws and ordinances, whereas the OGSML exceptions for local roads and property taxes are preceded by the phrase “but shall not supersede local government jurisdiction.” The MLRL language, thus, did not suggest that it was providing a narrow exception from a broad supersedure provision. In 46 contrast, the OGSML language suggests precisely that: namely, that everything else other than what “shall not be supersede[d]” (local roads and real property taxation) is, in fact, superseded. This reading is further confirmed by the Legislature’s use of the word “jurisdiction” in the OGSML – i.e., that local “jurisdiction” (“the power or right to exercise authority”) is narrowly limited solely to local roads and taxation (with no exception for local land use or zoning ordinances). There was no comparable limiting “jurisdiction” language in the MLRL supersession clause. Accordingly, the texts of the OGSML and MLRL supersession clauses are substantially different, rendering MLRL precedent irrelevant to this analysis. ii. The Evolution and Legislative History of the OGSML Is Materially Different from that of the MLRL. The historical evolution of the OGSML, as distinguished from the MLRL, further underscores that these supersession clauses are substantially distinguishable (see New York State Psychiatric Assn., Inc. v New York State Dept. of Health, 19 NY3d 17, 24 [2012] [stating that “[t]o determine the intent of a statute, ‘inquiry must be made of the spirit and purpose of the legislation, which requires examination of the statutory context of the provision’” (citation omitted)]; Matter of Frew Run Gravel Prods. v Town of 47 Carroll, 71 NY2d at 131, 132 [noting relevance of statutory policies, purposes and history in preemption analysis]. At the outset, the statutes arose from very different factual circumstances. The OGSML supersession clause was added, by amendment, (1) in response to almost two decades of parochial local regulation relating to oil and gas development, (2) to combat the energy crisis of the 1970s, and (3) to reassert the State’s role as the exclusive regulator of oil and gas activity in the State [R: 79-81, 83-84]. There is nothing comparable in the history of the MLRL, as its supersession clause was included in the initial enactment, and unlike the shortage in energy resources, there has never been a sand and gravel crisis in New York State. Moreover, the legislative history of the MLRL establishes that stakeholder groups clearly understood that the MLRL retained (if not invited) local control over mining operations, and this generated considerable controversy and industry opposition [R: 731-734, 870, 872, 874]. For example, the Memorandum in Opposition submitted by the New York State Chapter of the Associated General Contractors of America noted that the legislation “would not insure an evenly administered State-wide program, since it would allow local governments to enact yet more stringent standards and requirements” [R: 733, 870]. No such discussion or 48 opposition based on “local” control is present anywhere in the legislative history of the OGSML, suggesting that lawmakers and oil and gas stakeholders understood the statute’s supersession clause would preempt local laws or ordinances that might seek to control oil and gas development (with the only exception being relative to local roads and taxes) (see generally Bill Jacket, L 1981, ch 846) [R: 48-49]. Accordingly, these differences further highlight that MLRL precedent is irrelevant to the OGSML preemption analysis. iii. Matter of Frew Run Gravel Prods. and Matter of Gernatt Asphalt Prods. Are Distinguishable in That Each Fails to Undertake an Implied Preemption Analysis. As a final matter, it is noted that Matter of Frew Run Gravel Prods. and Matter of Gernatt Asphalt Prods. fail to undertake a field preemption and conflict preemption analysis. This Court is clear that even where an expressed preemption clause exits, an analysis of field preemption and conflict preemption is still warranted (see Drattel v Toyota Motor Corp., 92 NY2d 35, 48-49 [1998]; see also Freightliner Corp. v Myrick, 514 US 280, 287-288 [1995]; see e.g. Doomes v. Best Transit Corp., 17 NY3d 594, 602- 603 [2011]; Balbuena v IDR Realty LLC, 6 NY3d 338, 357 [2006]). Accordingly, these decisions do not foreclose finding that the Town Prohibition is preempted. 49 POINT II THE OGSML OCCUPIES THE ENTIRE FIELD OF OIL AND GAS REGULATION THEREBY PREEMPTING ANY RELATED LOCAL REGULATION While ECL 23-0303 (2) is clear that it expressly preempts the Town Prohibition, it is nonetheless also submitted that the OGSML preempts the Town Prohibition under the implied preemption principles. Preemption of local law may be implied where the scope and purpose of State law is to occupy an entire field of a particular subject matter (see Matter of Cohen v Board of Appeals of Vil. of Saddle Brook, 100 NY2d 395, 400 [2003]; Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d 372, 377 [1989]; 25 NY Jur 2d, Counties, Towns, and Municipal Corporations §350). This intent to occupy a particular field is evidenced by a comprehensive and detailed statutory scheme (see Matter of Cohen v Board of Appeals of Vil. of Saddle Brook, 100 NY2d at 400; Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d at 377; Robin v Incorporated Vil. of Hempstead, 30 NY2d 347, 350-351 [1972]), as well as by the enactment of comprehensive and detailed regulations promulgated thereto (see Incorporated Vil. of Nyack v Daytop Vil., 78 NY2d 500, 506 [1991]). The intent to occupy the entire subject matter field may also be inferred from the nature of the subject matter and the need for statewide uniformity within the particular field (see 50 Matter of Cohen v Board of Appeals of Vil. of Saddle Brook, 100 NY2d at 400; Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d at 377). “Where the State has preempted the field, a local law regulating the same subject matter is deemed inconsistent with the State’s transcendent interest, whether or not the terms of the local law actually conflict with the a State- wide statute” (Albany Area Bldrs. Assn. v Town of Guilderland, 74 NY2d at 377; see e.g. Robin v Incorporated Vil. of Hempstead, 30 NY3d at 348-349, 351-352). The OGSML is intended to occupy the entire field of oil and gas regulation because it is a comprehensive and detailed regulatory scheme. The OGSML is entrusted to the DEC to administer (see ECL 23-0101 [4], 23-0303 [1]), pursuant to policy guidance indicating that the DEC should prevent waste, provide for greater ultimate recovery of oil and gas, and protect the correlative rights of all owners and the rights of all persons including landowners and the general public. (see ECL 23-0301; see also pp 3-9, supra). In fact, the Appellate Division incorrectly applied the OGSML by stating that a municipality could use the provisions of the OGSML to protect the rights of “all persons including landowners and the general public” since the provisions of the OGSML are exclusively within the authority of DEC [R: 1046] 51 The objectives of the OGSML are accomplished through the comprehensive statutes and regulations pertaining to well permitting and well spacing. For example, ECL 23-0501 (1) (b) (1) outlines the OGSML’s “pooling” requirement by listing the specific amount of acreage that must be under the operator’s control in order to form a spacing unit. ECL 23-0501 (1) (b) (1) also outlines the corresponding setback distances, which prohibit drilling near the boundaries of a spacing unit. These acreage and setback requirements are specific to the type of oil and gas pool (see ECL 23-0501 [1] [b] [1]; New York State Department of Environmental Conservation, Statewide Spacing Unit Sizes and Setbacks, http://www.dec.ny.gov/energy/1583.html [accessed Oct 24, 2013]). In addition to the setback requirements, DEC regulations outline other spacing requirements pertaining to the location of wells within each spacing unit (see 6 NYCRR 553.1, 553.2). The 1992 GEIS and the drafted SGEIS then in effect outline additional spacing requirements pertaining to the location of wells within each spacing unit (see Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program, Department of Environmental Conservation [1992], available at ftp://ftp.dec.state.ny.us/dmn/download/geismaster.pdf; Revised Draft SGEIS on the Oil, Gas, and Solution Mining Regulatory Program [September 52 2011], http://www.dec.ny.gov/energy/75370.html) [R: 919-921]. The result is that an operator may obtain a well permit only after demonstrating that the spacing unit conforms to the acreage requirements (see ECL 23-0501 [1] [b]; 23-0503 [2]), demonstrating that the spacing unit “is of approximately uniform shape with other spacing units within the same field or pool,” demonstrating that the spacing unit “abuts other spacing units in the same pool [or] sufficient distance remains between units for another unit to be developed” (see ECL 23-0503 [2]), and demonstrating that the well within the spacing unit is in compliance with all of the spacing requirements (see ECL 23-0501 [2]; 6 NYCRR part 553). Further, if a permit is issued and a landowner within the spacing unit has not leased his or her land to the operator, then a hearing must occur to determine that landowner’s compensation for the gas or oil extracted from within the spacing unit (see ECL 23-0901). Next, ECL 23-0305 outlines the DEC’s broad authority to enforce compliance and protect the general welfare, outlining, among other things, that the DEC has the power to “investigat[e] to determine whether waste exists or is imminent” (ECL 23-0305 [8] [a]), “order an immediate suspension of drilling or production operations whenever such operations are being carried out in violation of this article or any rule or regulation 53 promulgated thereunder” (ECL 23-0305 [8] [g]), and require an operator to post a security bond and to provide various reports of its activities (see ECL 23-0305 [8] [e], [f], [h], [i]; see also 6 NYCRR part 551, 554.7). DEC regulations expand on DEC enforcement authority (see 6 NYCRR part 550), even outlining that “[v]iolations . . . shall be punishable by fine and/or imprisonment as well as being subject to such civil penalties as are provided by law” (6 NYCRR 550.6). Accordingly, the OGSML dictates a comprehensive and detailed scheme of permitting and enforcement, premised largely on spacing and location requirements, thereby indicating an intent to occupy the entire regulatory field of oil and gas development. Moreover, it must be noted that the OGSML principally regulates the development of liquid or gaseous substances, such as oil and gas. Accordingly, as oil and gas are found in subterranean pools, its location boundaries do not conform to any particular jurisdictional pattern, particularly the geographic borders of a town. The ability to efficiently extract oil and gas deposits is dependent on the geophysical properties of the underlying pool (e.g., pressure characteristics, porosity, etc) and drilling pattern, well spacing and well location all affect whether optimal recovery can be had, or whether production is exaggerated in one area or diminished in another. In other words, production and the ability to fulfill the policy 54 objectives of the OGSML are intimately tied to spacing unit size and well location. It is for this reason that the State must dictate “where” drilling occurs -- i.e., because this is the only way that greater ultimate recovery can be had, waste prevented, and property owners’ correlative rights protected, while at the same time ensuring that local concerns are accommodated through the comprehensive statewide controls entrusted to the DEC under the statute. In addition, oil and gas development tends to be far less surface- intensive and of far shorter duration than solid mineral extraction, thus having far fewer implications for traditional land use concerns. Thus, the nature of oil and gas development is such that the OGSML must be applied uniformly statewide. Local control, particularly municipal-wide bans like the Town Prohibition, are unnecessary to ensure environmental protection and make it impossible to achieve the OGSML’s objectives, as reflected in the history leading up to the enactment of ECL 23-0303 (2) in 1981 [R: 46-51 729]. That is why the Legislature amended the statute in 1981 – to reassert the State’s role as the exclusive authority in implementing a comprehensive and uniform regulatory regime to effectively develop this State’s indigenous energy resources. 55 In sum, the Town Prohibition is field preempted by the OGSML. New York has an overriding state interest in the development and promotion of its oil and gas, it has a need for statewide uniformity and it has a comprehensive OGSML that supersedes inconsistent local laws and ordinances. Accordingly, this Court should reverse the Appellate Division, find that the Town Prohibition is void, and thereby allow the DEC to continue safely and efficiently regulating oil and gas development. POINT III THE TOWN PROHIBITION CONFLICTS WITH STATE LAW AND POLICY, THEREFORE, IT IS PREEMPTED. The Town Prohibition is likewise preempted because it conflicts with the language and policies of the OGSML and Energy Law. Preemption of local law may be implied where a local law is inconsistent with State law such that “local law[] prohibit[s] what would have been permissible under State law or impose[s] ‘prerequisite additional restrictions’ on rights under State law, so as to inhibit the operation of the State’s general laws” (New York State Club Assn. v City of New York, 69 NY2d 211, 217 [1987], supra, quoting Consolidated Edison Co. of N.Y. v Town of Red Hook, 60 NY2d 99, 108 [1983] [internal citations and quotations marks omitted]; accord Zakrzewska v New School, 14 NY3d 469, 480 [2010, Read, J.]; see 25 NY Jur 2d, Counties, Towns, and Municipal Corporations §351). In this 56 analysis, courts consider not only the language of the State law, but also its policy objectives, in determining if the local law is inconsistent and hence invalid (see DJL Rest. Corp. v City of New York, 96 NY2d 91, 95 [2001]; Jancyn Mfg. Corp. v County of Suffolk, 71 NY2d 91, 98 [1987]). The Town Prohibition presents a multitude of irreconcilable conflicts with the OGSML. First and foremost, the express provisions of the OGSML would plainly allow some wells to be drilled in the Town, but the Town Prohibition precludes all oil and gas drilling, even conventional drilling not subject to the State moratorium. In this regard, the comprehensive and substantive provisions of the OGSML express as to “where” drilling is to occur. The statutes and regulations dictate that the DEC issue a well drilling permit if the proposed drilling unit is within a spacing unit of sufficient size and control, the spacing unit is of approximately uniform shape with other spacing units in the same field, abuts other spacing units overlaying the same resource pool or there is sufficient distance between units for another unit to be developed, and the actual well location conforms to the spacing requirements outlined in the statute, regulations, and 1992 GEIS or eventually the SGEIS (see generally ECL 23-0501, 23-0503; 6 NYCRR part 553; see also Point II, supra). Collectively, these spacing provisions were carefully crafted to apply uniformly statewide, ensure that wells are drilled 57 and spaced in locations that provide for greater recovery, prevent waste, and protect mineral owners’ correlative rights so that they are fully compensated for their pro rata share of well production. It is simply not possible for the DEC to comply with this express statutory mandate for issuing permits if individual localities, like defendant, can exercise local zoning authority to enact bans on all drilling in entire townships. Further, the OGSML also outlines a permitting process for underground oil and gas storage (see ECL, art 23, title 13), and grants the DEC specific oversight with respect to transportation and purchase of oil and gas (see ECL 23-0305 [8] [b], [f]). However, the Town Prohibition bans all oil and gas activities within its geographic borders, including the storage, transportation, purchase, and processing of oil and gas [R: 100, 114]. Accordingly, these are additional conflicts with the OGSML. The advent of horizontal drilling also indicates that the OGSML and local zoning bans are in conflict. The Town Prohibition bans all oil and gas extraction within its geographic borders; however, an operator could obtain a drilling permit in an adjacent town and be prevented from horizontally drilling into the subsurface of defendant’s town (compare ECL 23-0501 [1] [b] [1]; 6 NYCRR part 553. This conflict is not reconcilable because, again, 58 oil and regulation is not intended to be enacted pursuant to municipal geographic borders given the nature of the oil and gas. Next, local bans on all oil and gas drilling make it impossible for the DEC to comply with the policy objectives of the OGSML. Local bans, like the Town Prohibition, preclude the DEC from issuing drilling permits for locations where drilling should occur (i.e., based on the geophysical properties of the underlying resource and environmental conditions relating to the surface location in order to maximize recovery, prevent waste and protect correlative rights). The definition of “waste” in the OGSML includes “locating . . . [a] well . . . in a manner which causes or tends to cause reduction in the quantity of oil or gas ultimately recoverable” (ECL 23-0101 [20] [c]). Yet, that is precisely what the Town Prohibition does – i.e., it prohibits wells from being constructed in the ideal location for providing greater recovery (and the prevention of waste and the protection of correlative rights). Accordingly, it frustrates the policy goals of the OGSML if the DEC in effect affirms that, based on all of the geophysical data, the wells should be drilled at certain locations to provide for greater recovery and prevent waste, yet a town zoning board can determine that drilling cannot occur at those locations. Oil and natural gas resources are where they are. Effectively recovering those resources – meeting the goals of the 59 OGSML – requires that wells be drilled where the geophysical data indicates that they should go. In the end, sweeping bans such as the Town Prohibition cannot be squared with the DEC’s mandates under the OGSML (see ECL 23-0301). Moreover, municipal bans like the Town Prohibition also conflict with the Energy Law. To the extent that Supreme Court and the Appellate Division found significant the distinction between the “promote development” language of Energy Law § 3-101 (5) and the “regulation” language of ECL 23-0301 [R: 10-11, 1040], this distinction cuts in favor of preemption, not against it. By banning all oil and gas development in the entire municipality, the Town Prohibition conflicts with the central policy and goal of Energy Law § 3-101 (5): “to foster, encourage and promote the prudent development [of] all indigenous state energy resources including . . . natural gas from Devonian shale formations” [R: 725-726, 730, 911]. And, the Town Prohibition cannot be squared with the espoused policy of the 1981 amendments to the OGSML – to promote development. Indeed, if the Appellate Division decision is allowed to stand, every municipality in New York could ban all oil and gas development – a result that plainly would conflict with both the “promotion” directive of the Energy Law and the 60 objectives of the OGSML (i.e., provide for greater ultimate recovery of oil and gas, prevent waste, protect property owners’ correlative rights) [R: 730]. Thus, even if the Town Prohibition is not “regulation” as expressed in the supersession clause and it is deemed that the OGSML does not occupy the entire field of gas development regulation, the Town Prohibition still conflicts with the well location and well spacing provisions derived from the OGSML as well as the fundamental policy underpinning the OGSML and the Energy Law. The Town Prohibition, at best, frustrates compliance with the OGSML as well as the Energy Law; and, at worst, stands as an insurmountable obstacle to meeting those objectives. In either instance, the Town Prohibition is in conflict with New York’s general laws and, therefore, is conflict preempted (see Matter of Lansdown Entertainment Corp. v New York City Dept. of Consumer Affairs, 74 NY2d 761, 764-65 [1989] [finding direct conflict between local ordinance and State law; stating “assuredly a local law which conflicts with the State law must . . . be preempted”]; Anonymous v. City of Rochester, 13 NY3d 35, 51 [2009 Graffeo, J., concurring] [stating that local curfew ordinance contradicted the Family Court Act and was thus invalid]; Matter of Cohen v Board of Appeals of Vil. of Saddle Rock, 100 NY2d 395, 400 [2003] [finding local variance 61 regulation preempted; stating in the critical area of overlap, the Legislature prevails]). POINT IV DECISIONS REACHED BY OTHER JURISDICTIONS SUGGEST THAT THE OGSML PREEMPTS LOCAL MUNICIPALITIES FROM ENACTING A TOTAL BAN ON OIL AND GAS DEVELOPMENT No court in the country has authorized a total ban on oil and gas activities through zoning as has been enacted by defendant. Instead, courts in other states have held that the development of their oil and gas resources are matters of state interests, superseding a municipality’s total ban on oil and gas development (see Voss v Lundvall Bros., 830 P2d 1061 [Colo. 1992]; see also Energy Mgmt. Corp. v City of Shreveport, 397 F3d 297 [5th Cir. 2005]; State ex rel. Morrison v Beck Energy Corp., 989 NE2d 85 [Ohio Ct App. 9th Dist 2013], appeal allowed 989 NE2d 70 [2013]; Northeast Natural Energy, LLC v City of Morgantown, Civ Act No 11-C-411, 2011 WL 3584376 [W Va Cir Ct Aug 12, 2011]). Furthermore, no court has relied upon its state’s mined land reclamation law to interpret its oil and gas regulatory scheme. A state’s interest in the development of sand and gravel simply does not rise to the same level of importance. The Colorado Supreme Court in Voss v. Lundvall Bros. (830 P2d 1061 [Colo 1992]) described four factors that weighed in favor of its holding 62 that a municipality cannot totally exclude all drilling operations from within municipal boundaries: $ First, “the state's interest in the efficient and fair development and production of oil and gas resources in the state, including the location and spacing of individual wells, militates against a [municipality’s] total ban on drilling” [id. at 1067]. $ Second, “the extraterritorial effect of the [total ban on drilling] weighs in favor of the state's interest in effective and fair development and production . . . based primarily on the pooling nature of oil and gas” [id. at 1067-1068]. $ Third, “the regulation of oil and gas development and production has traditionally been a matter of state rather than local control [id. at 1068]. $ Fourth, a municipality can exercise control over oil and gas development and production only to the extent that it does not materially impede the state’s goals in developing and producing oil and gas resources [id.]. Similarly, in Northeast Natural Energy, LLC v City of Morgantown (Civ Act No 11-C-411, 2011 WL 3584376 [W Va Cir Ct Aug 12, 2011]), in invalidating the municipality’s ban on hydraulic fracturing, the court held that West Virginia had a comprehensive scheme for regulating oil and gas drilling with no exception carved out for a municipal corporation to act in conjunction with the West Virginia Department of Environmental Protection pursuant to the Home Rule provision. It further found that West Virginia’s regulatory scheme gives the Department of Environmental Protection sole 63 discretion to perform all duties related to the exploration, development, production, storage and recovery of the state's oil and gas. As other courts have found in their states, New York has an overriding state interest in the development and promotion of its oil and gas, it has a need for statewide uniformity and it has a comprehensive OGSML that supersedes inconsistent local laws and ordinances. Accordingly, this Court should reverse the Appellate Division, find that the Town Prohibition is void, and thereby allow the DEC to continue safely and efficiently regulating oil and gas development. CONCLUSION The legal and policy implications surrounding oil and gas development in New York and our nation are of paramount importance. New York cannot have a “not in my back yard” approach to energy development. Only a uniform and intentional approach to oil and gas development - like the five-plus year review being conducted by State leaders in the DEC - can ensure a balance between the protection of our natural resources and the development of our energy resources. The promotion of New York’s domestic energy supplies cannot be accomplished with a contrary decision. 64 Plaintiff respectfully requests that this Honorable Court reverse the orders of Supreme Court and the Appellate Division, determine that the Town Prohibition is preempted, and thereby allow the Department of Environmental Conservation to continue safely and efficiently regulating oil and gas development in New York. Dated: October 25, 2013 Albany, New York LEVENE GOULD IN & THOMPSON, LLP By: By: Scott R. Kurkoski, Esq. Attorneys for Plaintiff-Appellant Cooperstown Holstein Corporation Office Address: 450 Plaza Drive Vestal, NY 13 850 Mailing Address: P.O. Box F-1706 Binghamt~i\..NY 13902-0106 Telephone: ( 7) 763-9200 Fax: (607) 763- 2 ho C y onaco, sq. orneys for Plaintiff-Appellant Cooperstown Holstein Corporation 677 Broadway, 8th Floor Albany, New York 12207 Tel.: ( 518) 641-0 5 00 Fax: (518) 615-1500