Ohio Supreme Court to decide dispute between families over oil and natural gas rights.

Ohio Supreme Court to decide dispute between families over oil and natural gas rights.

The prospects of profitably extracting oil and natural gas from Ohio shale formations has led to many legal disputes over the ownership of mineral rights. The Ohio Supreme Court will hear oral arguments next week about a dispute between two families claiming mineral rights in Belmont County and will consider whether the 1989 law used by lower courts to decide the case is constitutional.

The Tribett and Shepherd families dispute whether the 1989 version of the Ohio Dormant Mineral Act (DMA) applies to their competing claims of oil and gas rights under the Tribetts’ property. Attorneys for the Shepherds explain this is the last of seven cases scheduled to be heard by the Ohio Supreme Court regarding the DMA. Many of the issues in this case are similar to ones in the other DMA cases pending before the Supreme Court, and the justices ordered the parties to focus their oral arguments on two issues not yet fully considered in the other cases.

The Court has asked the parties to argue about whether the 1989 version of the law is constitutional and whether any claims under the law had to be filed by March 2013.

Property Changes Hands Over the Decades
Susan Tribett and her deceased husband owned 61 acres in Belmont County. They have since sold the surface property but recorded a reservation of the oil and gas mineral rights.

In 1962, Joseph, John, and Keith Shepherd owned 137 acres of land in Belmont County, including the 61 acres now in dispute. The three sold the surface rights of the property to Seaway Coal Company, and recorded a severance deed that reserved the oil and gas rights to the three and “their heirs and assigns.” Seaway sold the surface rights in 1986 to Shell Mining Company, and Shell sold it to R&F Coal Company in 1992. In each instance the deed specifically referenced the oil and gas reservations by the Shepherds.

R&F sold the 137 acres to 12 different owners, including 61 acres to the Tribetts. In 2011, the Tribetts attempted to lease the mineral interests under their property. Oil and gas industry representatives urged the couple to assure they had a clear title by using the abandonment process outlined in the 2006 version of the DMA. The process requires those seeking clear title to reach anyone who previously claimed an interest in the mineral rights.

Family Goes to Court
The Tribetts published in a local newspaper their notice of the intent to declare the mineral interest abandoned. A few months later, Barbara, Joseph A., and David Shepherd, heirs of the three Shepherds who had owned the mineral rights, filed affidavits claiming their intent to preserve the rights.

The Tribetts then won a declaratory judgment from the Belmont County Common Pleas Court that made them the mineral rights owners. The Shepherds have appealed to the Supreme Court, arguing the 1989 DMA is unconstitutional because it violates the prohibition against retroactive laws. The family also maintains that if the Tribetts intended to use the 1989 DMA to claim ownership, they waited too long to act and their claim is barred by the state’s 21-year statute of limitations on actions to recover title or possession of real estate.

Oral Arguments
Tribett v. Shepherd will be heard on Tuesday, August 16, along with two other cases. Two cases will be heard on Wednesday, August 17. Arguments on both days will begin at 9 a.m. at the Thomas J. Moyer Ohio Judicial Center in Columbus and will be streamed live online at sc.ohio.gov 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 five cases.

Cases for Tuesday, August 16
Ohio’s competitive electric generation market has required traditional electric distribution utilities to use an affiliate to sell unregulated electric service that is separate from the still-regulated distribution of power through poles and lines. In In the Matter of the Application of Duke Energy Ohio Inc., a competitor objects to the public utilities commission’s approval of the utility’s plan to sell non-electric services. The competitor argues the power company should not be able to sell the services, and if it does, it must be sold by the separate affiliate so that the utility doesn’t benefit in any way from the profits it makes from its regulated services.

The professional conduct board in Disciplinary Counsel v. Joltin recommends a six-month actual suspension for a Canfield attorney. The board found the attorney paid himself before doing any legal work in a divorce case and mismanaged a personal injury lawsuit and an eviction matter. The investigating organization argues for a longer sanction because of the harm caused to the clients, while the attorney has agreed to accept the board’s proposed suspension.

Cases for Wednesday, August 17
A leading maker of frozen garlic bread filed for a municipal income tax refund from Bedford Heights for about $698,000 plus interest. The company originally paid its income tax by filing as separate companies, but in 2010 the company filed a consolidated amended return that generated a refund. In New York Frozen Foods v. Bedford Heights, the city denied the refund, stating a group of affiliated companies can’t change its method of filing from single to consolidated when submitting an amended return. The company argues the city overstepped its authority and ignored a state law.

The state agency that reviews public employer labor practices found that a regional transit authority headquartered in Montgomery County hadn’t processed several employee labor grievances. The transit authority appealed the ruling in Franklin County, arguing it could file the appeal there because it transacts business in the county, as the relevant law requires. The organization notes in Greater Dayton Regional Transit Auth. v. State Emp. Relations Bd. that it has multiple contracts with Franklin County entities, and contends that the meaning of “transacts business” in the statute includes any commercial activity.