Monday, September 23, 2013

District court holds conservation easement prohibits natural gas drilling

On August 27, 2013, the United States District Court for the Middle District of Pennsylvania found that no genuine issues of material fact existed in interpreting a conservation easement. Stockport Moutain Corp. LLC v. Norcross Wildlife Foundation, Inc., 2013 WL 4538822 (M.D. Pa. Aug. 27, 2013). Stockport Mountain Corp. purchased a parcel of land subject to a conservation easement placed on the land by Norcross (a previous owner). The easement prohibited “commercial” and “industrial” use of the land.

In December 2007, Stockport was approached by Chesapeake Appalachia regarding the possibility of natural gas being located under the property. Stockport communicated this possibility to Norcross, and Norcross notified Stockport that it interpreted the easement to prohibit such activities. The court found three aspects of potential leases to be pertinent: 1) the use and construction of roads, 2) the construction and use of commercial structures, and 3) the storage and removal of debris. At issue is the defendant, Norcross’s, motion for summary judgment to determine whether there are any genuine issues of material fact with respect to the permissibility of surface drilling for natural gas under the conservation easement.

The court held that no genuine issues of material fact existed and that the conservation easement clearly prohibited drilling for natural gas because drilling is considered “commercial” or “industrial” use under the clear, unambiguous terms of the easement. The court explained that it would broadly construe the terms of the easement because the Pennsylvania Conservation and Preservation Easement Act instructs courts to construe the terms of conservation easements liberally. Therefore, under the dictionary definitions of “commercial” and “industrial” natural gas drilling was prohibited by the easement because the exchange of gas for royalties falls under the common meaning of commerce and the use of machinery in a systematic effort to extract gas falls under the common meaning of industrial. The court order granted Norcross’s motion for summary judgment, and awarded Norcross attorneys’ fees under the terms of the conservation easement.

Written by: Garrett Lent, Research Assistant
Agricultural Law Resource and Reference Center
September 2013

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