Court News Ohio
Court News Ohio
Court News Ohio

Court to Assess Whether 700 Landowners Can Break Oil and Gas Leases Where No Drilling Has Occurred

Among Eight Cases Scheduled for Oral Arguments

Image of the Thomas J. Moyer Ohio Judicial Center taken at night from the newly completed Scioto Mile

A dispute between landowners and Beck Energy Corp. over oil and gas leases is among one of eight cases the Ohio Supreme Court will considered during upcoming oral arguments.

Image of the Thomas J. Moyer Ohio Judicial Center taken at night from the newly completed Scioto Mile

A dispute between landowners and Beck Energy Corp. over oil and gas leases is among one of eight cases the Ohio Supreme Court will considered during upcoming oral arguments.

Two sets of Ohio landowners are engaged in protracted lawsuits with Beck Energy Corp. over leases signed to explore drilling for oil and natural gas in southern and eastern Ohio. The parties, including Beck’s partner, XTO Energy, estimated more than 700 landowners are impacted by the case, and that the dispute involves millions of dollars in potential bonus payments and royalties. The Ohio Supreme Court will hear oral arguments next week where both sides will argue how the other is blocking its path toward oil and gas profits.

The Court consolidated the two cases, Hupp v. Beck Energy and Claugus Family Farm v. Seventh District Court of Appeals, to hear multiple issues involved in the cases. The first issues, raised in Hupp, center on whether a trial court’s decision to void the Beck leases for five Monroe County landowners was valid because the court agreed with the landowners that Beck crafted the language to sit on the land as long as it wished before drilling.

In that case, the court also allowed the landowners to seek class action status to void the Beck leases of 700 landowners with similar form leases. The Seventh District Court of Appeals reversed the Monroe County court and sent the Beck leases back to the lower court for further proceedings. It also ruled the trial court took the correct steps to certify the case as a class action and allow it to proceed that way.

The second case, Claugus Family Farm¸ is brought on behalf of those absent class members who weren’t notified of the class action. When the class action was certified, the Seventh District froze all the leases on a date in 2012. Claugus Family Farm objects to the “tolling order” the court used to freeze the leases. It argues its lease with Beck would have expired by now, and the farm owners could enter into another lease that would pay more than $470,000 in signing bonuses plus more royalties than Beck offered.

Beck and XTO counter that the filing of the lawsuit and the approval of the class made it too risky to drill, so they have been thwarted from moving forward since 2012 and should have more time to drill if they choose. The Ohio Oil and Gas Association, as well as seven other gas companies, filed amicus curiae briefs in the case indicating many companies use the same standard lease form Beck used or ones very similar to it. They contend that “countlessly similar worded Ohio leases will be thrown into doubt” should the Supreme Court reverse the Seventh District.

Oral Arguments
In addition to the oil and gas cases, the Court will hear three other appeals on Tuesday, Dec. 15 and four cases on Wednesday, Dec. 16. The Court’s sessions begins at 9 a.m. at the Thomas J. Moyer Ohio Judicial Center in Columbus. The arguments will be streamed live online at and broadcast live on The Ohio Channel.

Previews Available
Along with the brief descriptions below, the Office of Public Information today released previews of the cases.

Cases for Tuesday, Dec. 15

  • To ensure it had the electricity supply available to customers who could shop for competing suppliers and rate, AEP Ohio sought out a compensation plan from the Public Utilities of Ohio for charges related to a competitive market. AEP proposed a rate of $355 per megawatt-day, but the PUCO eventually set the company’s rate at $188.88 megawatt-day. However it allowed the company to charge other competitive retail electric service providers a lower price and AEP to defer the difference between the two rates. AEP could then collect the costs later from retail customers. Three entities, Industrial Energy Users-Ohio, the Ohio Consumers’ Counsel, and FirstEnergy Solutions, challenged the rate plan in In the Matter of the Commission Review of the Capacity Charges of Ohio Power Company and Columbus Southern Power Company.
  • A church pastor was arrested, and he pled guilty to two counts of sexual battery for assaulting a 15-year-old parishioner. Her family filed a lawsuit against the church for negligently keeping the pastor as an employee despite other reported misconduct with teenagers. A jury award the family than $3.5 million in punitive damages. The question in Jessica Simpkins v. Grace Bretheren Church of Delaware is whether an appeals correctly capped the damages at $350,000 or if the cap violates the Ohio Constitution when applied to the facts of this case.
  • A 15-year-old boy carjacked a man and was charged in juvenile court of aggravated robbery and kidnapping with a firearm specification. After his conviction, the court imposed consecutive sentences for aggravated robbery, kidnapping, and the firearm specification, and he received the maximum sentence committing him to a juvenile facility until his 21st birthday.  The boy appealed his sentencing arguing the juvenile court violated his double jeopardy rights. The dispute in In re: A.G. A Minor Child v. Ohio, is whether his aggravated robbery and kidnapping charges should’ve been merged, as it would if he had been an adult tried in an adult court. He states the crimes were allied offenses and the court should treat them as one offense for sentencing.

Cases for Wed. Dec. 16.

  • For the second time in three years, several parties are asking the Ohio Supreme Court to either reject an Ohio Power Siting Board’s (OPSB) approval to build a second electricity-generating wind facility in Champaign County or for OPSB to correct errors they claim occurred during the application-vetting process. The opponents to the windfarm owner, EverPower Wind Holdings, present In the Matter of the Application of Champaign Wind, LLC, for a Certificate to Construct a Wind-Powered Electric Generating Facility in Champaign County, several arguments why they believe the process was unfair while EverPower and OPSB counter the process was fair.
  • A 17-year-old driver died early one morning from injuries resulting from a one-car automobile accident in Wayne County where investigators found the accident happened on a two-lane road that was repaved the day before the accident using a “scratch paving” technique, which added about 1 inch to 1.5 inches of asphalt on top of the existing pavement. The girl’s parents filed a wrongful death lawsuit against the county, and the county claimed governmental immunity. The Court will consider in County of Wayne et al. v. Ricky Baker, Administrator if the county is entitled to immunity as granted by the trial court, or not as ruled by the Ninth District Court of Appeals.
  • As a 17-year-old, Delaquan Brookshire robbed two Huber Heights restaurants and in both incidents, employees were held at gunpoint. Prosecutors were able to transfer the case to common pleas court so he could be tried as an adult, where he plead guilty to aggravated robbery, kidnapping, and a firearm specification. He was sentenced to nine years in prison. In Ohio v. Delaquan Brookshire, Brookshire contends a juvenile court should have conducted his kidnapping sentences, and the state argues it was correct to try him as an adult on all charges.
  • Raymond L. Eichenberger III was suspended from practicing law in Ohio because he mismanaged client funds and didn’t cooperate during the disciplinary process. The Court will consider in Disciplinary Counsel v. Raymond L. Eichenberger III a proposed a two-year suspension from the practice of law, with one year stayed on conditions