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JLCNY Lawsuit Complaint Against NY State for Illegal "Takings" in Ongoing Frack Moratorium
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JLCNY Lawsuit Complaint Against NY State for Illegal "Takings" in Ongoing Frack Moratorium

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The lawsuit paperwork that will soon be filed by the Joint Landowners Coalition of New York against New York State, Gov. Andrew Cuomo, DEC Commissioner Joe Martens and State Health Commissioner Nirav …

The lawsuit paperwork that will soon be filed by the Joint Landowners Coalition of New York against New York State, Gov. Andrew Cuomo, DEC Commissioner Joe Martens and State Health Commissioner Nirav Shah for illegal "takings"--that is, landowners are being intentionally denied their private property rights under the 5th Amendment of the U.S. Constitution by not being able to allow drilling for natural gas on their private property. If landowners move forward and the state continues to deny them their rights, the outcome may very well bankrupt the state in settlement payments. Cuomo has made an utter mess of this whole issue with his ongoing inability to make a decision on fracking. Very un-leader like, wouldn't you say?

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  • 1. STATE OF NEW YORK SUPREME COURT: COUNTY OF ALBANY _________________________________________ PLAINTIFF “A” - PLAINTIFF “E ”, COMPLAINT/PETITION Plaintiffs/Petitioners, vs. Index No.: THE STATE OF NEW YORK, ANDREW M. CUOMO, Governor of the State of New York, THE NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, JOSEPH MARTENS, Commissioner of the New York State Department of Environmental Conservation, THE NEW YORK STATE DEPARTMENT OF HEALTH and NIRAV SHAH, Commissioner of the New York State Department of Health, Defendants/Respondents. _________________________________________ Plaintiffs/petitioners (“plaintiffs”), by and through their attorneys, complaining of the defendants/respondents (“defendants”), herein state as follows: PRELIMINARY STATEMENT 1. Plaintiffs bring this hybrid action and proceeding to obtain monetary damages and/or mandamus and/or injunctive relief for damages suffered by plaintiffs as a result of: 1) defendants’ actions which have effected a “taking” of plaintiffs’ property interests thereby depriving plaintiffs of certain property rights protected by the United States Constitution and the Constitution of the State of New York, and 2) the enactment by defendants of a Moratorium on the issuance of well drilling permits utilizing high volume hydraulic fracturing, a technique commonly used throughout the country to develop thousands of natural gas wells in deep shale formations. 1
  • 2. 2. The Marcellus shale formation is estimated to contain some 500 trillion cubic feet of natural gas and covers a large area, some 54,000 square miles in the main states of New York, Ohio, Pennsylvania and West Virginia. 3. Beginning in 2008, natural gas drilling companies such as Fortuna Energy (now Talisman Energy), Chesapeake Energy, Hess Corporation and Nornew, Inc. (“Nornew”) (now known as Norse Energy Corp. USA (“Norse”)) evidenced great interest in drilling for natural gas in the Southern Tier of New York causing an oil and gas leasing frenzy with natural gas drilling companies paying some landowners as much as $5,000 per acre for nothing more than signing an oil and gas lease. 4. On July 21, 2008, The State of New York brought an end to virtually all of the leasing activity and development when it imposed a Moratorium on the issuance of well drilling permits utilizing high volume hydraulic fracturing (“HVHF”) that by its terms would run to some indeterminate future time when the Department of Environmental Conservation of the State of New York (“DEC”) issued a Supplemental Generic Environmental Impact Statement (“SGEIS”) addressing the environmental effects of HVHF. 5. Other states including Ohio, Pennsylvania, West Virginia, Illinois and California which are rich in oil and gas resources completed their studies and adopted regulations and laws pertaining to HVHF in just eight to twenty-four months and no state with oil and gas resources has ever issued a moratorium on HVHF. 6. Though the SGEIS process for HVHF began in New York in 2008, it has yet to be completed and has become exclusively a political issue with no discernible end in sight. From July 21, 2008 through today, the apparently indeterminable SGEIS process has rendered the 2
  • 3. plaintiffs’ property and the natural gas trapped below the surface, unable to be developed and unmarketable. 7. HVHF is the only commercially viable method of extracting natural gas from beneath plaintiffs’ land and without the ability to use HVHF the plaintiffs’ natural gas is valueless. 8. As more fully alleged herein, the conduct of defendants in imposing and perpetuating a Moratorium on the only commercially viable method to extract natural gas from the plaintiffs’ properties effectuates an unconstitutional taking of plaintiffs’ property interests and, alternatively, is an invalid exercise of the police power of the State of New York. THE PARTIES PLAINTIFFS “A” 9. At all times hereinafter mentioned, plaintiff ______________was and is a resident of the County of Broome and State of New York. 10. At all times hereinafter mentioned, plaintiff_____________ is a resident of the State of Pennsylvania. 11. At all times hereinafter mentioned, plaintiff ____________ is a resident of the County of Broome and State of New York. 12. At all times hereinafter mentioned, plaintiff ____________ is a resident of the State of Connecticut. 13. Plaintiffs__________________________________________________________ _________________ are hereinafter collectively referred to as the “_______ Plaintiffs”. 14. Prior to November 2, 2012, ________ Plaintiffs were the owners in fee simple absolute of certain real property located in the Town of Fenton, County of Broome and State of 3
  • 4. New York, comprising approximately 70 acres, which property is more particularly described in a deed dated ____________ and recorded in the Broome County Clerk’s office on ____________, 1997 in Book ____ of Deeds at Page ___, a copy of which is attached hereto as Exhibit “A” (the “__________ Premises”) . 15. By deed dated __________, 2012, ___________ conveyed 25% interest in and to the ________ Premises to Plaintiffs ______________________. 16. The __________Premises is landlocked and at all times relevant herein the _________ Plaintiffs have and/or had no surface access to, or upon, the property. 17. The highest and best use of the _________ Premises is for oil and gas development and the property has been leased by the __________ Plaintiffs, or their predecessor(s) in interest to various oil and gas operators over past years. 18. On or about _______, 2007, plaintiff ____________ entered into an oil and gas lease with Chesapeake Appalachia, LLC (“Chesapeake”), which lease was recorded in the Broome County Clerk’s Office on ___________, 2007 at Book ____ of Deeds at Page __, a copy of which is attached as Exhibit “B” 19. Said lease had a five year primary term commencing on __________, 2007, with a three year option permitting the lessee to extend the lease for an additional three year period, which option was exercised by the lessee by the filing of a Notice of Extension of Oil and Gas Lease by Chesapeake in the Broome County Clerk’s Office on _____, 2013 in Book ____ of Deeds at Page ___. 20. On or about ______, 2007, an oil and gas lease was entered into with Chesapeake, which lease was recorded in the Broome County Clerk’s Office on ___________, 2007 at Book ____ of Deeds at Page ___, a copy of which is attached as Exhibit “C”. 4
  • 5. 21. Said lease had a five year primary term commencing on _________, 2007, with a three year option permitting the lessee to extend the lease for an additional three year period, which option was exercised by the lessee by the filing of a Notice of Extension of Oil and Gas Lease by Chesapeake in the Broome County Clerk’s Office on ______, 2009 in Book ____ of Deeds at Page ___. 22. On or about ________, 2007, plaintiff __________ entered into an oil and gas lease with Chesapeake, which lease was recorded in the Broome County Clerk’s Office on __________, 2007 at Book ____ of Deeds at Page ___, a copy of which is attached as Exhibit “D”. 23. Said lease had a five year primary term commencing on __________, 2007, with a three year option permitting the lessee to extend the lease for an additional three year period, which option was exercised by the lessee by the filing of a Notice of Extension of Oil and Gas Lease by Chesapeake in the Broome County Clerk’s Office on ______, 2013 in Book ____ of Deeds at Page ___. 24. On or about _______, 2007, an oil and gas lease was entered into with Chesapeake, which lease was recorded in the Broome County Clerk’s Office on ____________, 2007 at Book ____ of Deeds at Page ___, a copy of which is attached as Exhibit “E”. 25. Said lease had a five year primary term commencing on ____________, 2007, with a three year option permitting the lessee to extend the lease for an additional three year period, which option was exercised by the lessee by the filing of a Notice of Extension of Oil and Gas Lease by Chesapeake in the Broome County Clerk’s Office on _____, 2013 in Book ____ of Deeds at Page ___. 5
  • 6. 26. Effective ___________, 2008, a 32.5% interest in each of the aforesaid oil and gas leases was assigned by Chesapeake to Statoilhydro USA Onshore Properties, Inc. 27. Since the Moratorium, the _______ Plaintiffs have been unable to market, develop or extract the natural gas from the ________ Premises. PLAINTIFF “B” 28. Plaintiff, ________, is a resident of the County of Steuben, State of New York. 29. On or about 2005, plaintiff ______ acquired the oil and gas and other minerals in property in the Town of Addison, County of Steuben, more particularly described in a deed dated _______ and recorded in the Steuben County Clerk’s office on ________ in Book ___ of Deeds at Page ___ , a copy of which is attached hereto as Exhibit “F” (the “_______ Premises”). 30. Plaintiff _______ acquired the _______ Premises for the sole and exclusive purpose of development and extraction of the oil and gas from the premises. 31. The highest and best use of the _____ Premises is for oil and gas development. 32. Since the Moratorium, plaintiff ____ has been unable to market, develop or extract the natural gas from the ______ Premises. PLAINTIFFS “C” 33. Plaintiffs ____________, (“______”) are residents of the County of Broome, State of New York. 34. The _____ Family Trust (the “Trust”) is a trust formed on ___________ under the laws of the State of New York, of which ____________ is trustee. 35. Prior to _________, 2012, the _____ were the owners in fee simple of approximately ______ acres in the Town of Colesville, State of New York more particularly 6
  • 7. described in a deed dated _______ and recorded in the Broome County Clerk’s office on ________ in Book ___ of Deeds at Page ___ (the “____ Premises”). 36. On or about _________ the _____ entered into an oil and gas lease with Chesapeake, a copy of which is attached as Exhibit “G”, which lease had an initial five year primary term commencing on ________, 2007 and an optional additional five year extension. By payment and Notice of Extension of Oil and Gas Lease dated ______, 2012 and recorded in the Broome County Clerk’s Office on ___________, 2012 in Book ____ of Deeds at Page ___, Chesapeake extended the primary term an additional five years, to _____, 2017. 37. _____ sole and exclusive purpose in entering into the oil and gas lease was to market, develop and extract natural gas from the ____ Premises. 38. Pursuant to the oil and gas lease, and with the intent to develop the ____ Premises and extract natural gas therefrom, on or about _______, 2009, Chesapeake filed a well permit application for six horizontal wells known as ____, ______, ______, ________, _________ and _________, which were to be developed by using HVHF. 39. The targeted formation was the Marcellus shale. 40. Upon information and belief, Chesapeake filed the well permit applications in anticipation of the release of the SGEIS and with the anticipation that permits for HVHF would be issued shortly thereafter. 41. The highest and best use of the _________ Premises is for oil and gas development. 42. By deed dated ______, 2012, and recorded in the Broome County Clerk’s Office on ______, 2012 in Book ____ of Deeds at Page ___, the _____ conveyed all “oil and gas and 7
  • 8. petroleum products estate, interest and rights including, without limitation, all oil gas and other rights in, under, and that may be produced” from the ____ Premises to the ____ Family Trust. 43. Due to the Moratorium, the well permit applications have not been granted, no drilling has yet occurred and neither the _____ nor the Trust have received royalty payments. PLAINTIFF “D” 44. Plaintiff, ______ (“____”) is a resident of the County of Broome and State of New York. 45. On or about ______, 2008, ____ secured a line of credit encumbering certain real property he owned and utilized as his primary residence in the sum of $175,000. 46. ____’s sole purpose in securing this line of credit was to obtain funds to purchase vacant real property in the Broome County area exclusively for oil and gas development and, in particular, to develop the Marcellus shale formation lying beneath the property(ies). 47. On or about _______, 2008, ____ purchased vacant real property comprised of approximately 22 acres located in the Town of Lisle, County of Broome and State of New York for the sum of $37,000, which property is more particularly described in a deed recorded in the Broome County Clerk’s office on ______, 2008 at Book ____ of Deeds at Page ___, a copy of which is attached hereto as Exhibit “H” (the “_______ A Premises”). 48. Almost immediately after the purchase of the ____ A Premises, plaintiff ____ was approached by Chesapeake to lease the property and on or about ______, 2008, ____ entered into an oil and gas lease with Chesapeake for extraction of natural gas from the ____ premises, which lease was recorded in the Broome County Clerk’s Office on ________, 2008, at Book ____ of Deeds at Page ____. 8
  • 9. 49. A 32.5% interest in and to the oil and gas lease was later assigned by Chesapeake to Statoilhydro USA Onshore Properties, Inc., which assignment was recorded in the Broome County Clerk’s Office on_________, 2009, in Book ____ of Deeds at Page ___. 50. On or about__________, 2009, ____ sold the ____ A Premises reserving “until July 9, 2018, any and all mineral rights of the subject property, including, but not limited to, oil, coal, gas and stone and [all] right and interest in a certain Oil and Gas Lease dated _____, 2008… All rights retained herein, including, but not limited to, any right to royalties and delay rental dues, if any, will be assigned to grantees after July 9, 2018”, as more fully described in a deed recorded in the Broome County Clerk’s Office on ________, 2009 in Book ____ of Deeds at Page ___, a copy of which is attached as Exhibit “I”. 51. On or about ___________, ____ entered into a contract for the purchase of two parcels of vacant real property comprised of approximately 13.80 acres and 1.0 acres, respectively, in the Town of Kirkwood, County of Broome and State of New York. 52. On _________, 2008, ____ purchased the aforesaid 13.80 acre and 1.0 acre parcel for the sum of $29,800.00, which real property is more particularly described in a deed dated ___________, 2008 and recorded in the Broome County Clerk’s office on _______, 2008 in Book ____ of Deeds at Page ___, a copy of which is attached hereto as Exhibit “J” (the “____ B Premises”). 53. Though the ____ B Premises are located in the heart of the prime area of the Marcellus Shale in New York, plaintiff ____ was offered only a nominal leasing bonus, when property owners located just a few miles across the border in Pennsylvania were receiving upwards of $5,000.00 per acre. 9
  • 10. 54. On or about ________, 2011, ____ sold the ____ B Premises reserving “all of the oil, gas and minerals lying below the surface of the premises….. “, said deed also reciting that “the Grantor…. shall not have any right to enter upon the surface of the Premises or to conduct any surface operations on the Premises, including but not limited to, the construction of pipelines, the exploration, development, production and/or removal of oil, gas or other minerals from under the surface of the Premises", as more fully described in a deed recorded in the Broome County Clerk’s Office on _______, 2011 in Book ____ of Deeds at Page ___. 55. On or about ____________, ____ entered into a contract for the purchase of certain vacant real property located in the Town of Lisle, County of Broome and State of New York comprised of approximately 60.5 acres. 56. On or about ______, 2009, ____ purchased the aforesaid approximate 60.5 acre parcel for the sum of $100,000.00, which property is more particularly described in a deed recorded in the Broome County Clerk’s office on ________, 2009 at Book ____ of Deeds at Page ___, a copy of which is attached hereto as Exhibit “K” (the “____ C Premises”). 57. The purchase of the ____ C Premises was subject to an existing oil and gas lease with Ansbro Petroleum Company, which lease was dated ___________, 2007 and recorded in the Broome County Clerk’s Office on _________, 2007 at Book ____ of Deeds at Page ___. 58. Said lease expired without any development upon the leased premises and, to date, plaintiff ____ has received no offers to lease ____ C Premises. 59. On or about ______, 2013, ____ conveyed ____ C Premises excepting and reserving “one hundred percent (100%) of Grantor’s mineral estate interest and rights, including, without limitation; all of the oil and gas in and under and that may be produced from the … land, and additionally excepts and reserves the right to pool, unitize and/or remove said oil and gas, 10
  • 11. the right to execute oil, gas and other mineral leases, the right to receive any and all payments therefrom, including without limitation, all rental, bonus and royalty payments for oil, gas and other mineral leases, and the right to sell or otherwise dispose of said oil, gas and other minerals…”, as more particularly described in a deed recorded in the Broome County Clerk’s Office on ______, 2013 in Book ____ of Deeds at Page ___, a copy of which is attached as Exhibit “L” 60. The highest and best use of all of the aforementioned properties owned by ____ is for oil and gas development. 61. Since ____ has acquired the subject properties, due to the Moratorium, he has been unable to market, develop and/or extract the oil and gas lying beneath the properties. PLAINTIFFS “E” 62. At all times relevant herein, plaintiff, ________ (“______”) was and is a limited liability company organized under the laws of the State of New York with an address of _________, Deposit, New York. 63. At all times relevant herein, plaintiff ______________, LLC (“________”) was and is a limited liability company organized under the laws of the State of New York with an address of _______________, Deposit, New York. 64. At all times relevant herein, _____________ LLC was and is a member of _______. 65. Prior to _________, 2007, __________ was the owner in fee simple absolute of approximately 93.3 acres of vacant real property located in the Town of Colesville, County of Broome and State of New York bearing tax map no.___________, which property is a portion of the property described in a Warranty Deed recorded on ___________, 2002 in the Broome 11
  • 12. County Clerk’s Office at Book ____ of Deeds at Page ____, a copy of which is attached as Exhibit “M” (the “_________ Premises”). 66. On or about _______, 2007, _______ entered into an oil and gas lease with Nornew, a copy of which is attached as Exhibit “N” encumbering the ______ Premises which provided for an initial five year primary term, subject to an option to extend the lease for a second five year term. 67. _______’s sole purpose in entering into the oil and gas lease was to market, develop and extract natural gas in the premises and receive royalty payments therefor. 68. On or about ________, 2008, _______ conveyed the _______ Premises, reserving, inter alia, “the right to all surface and subsurface oil, gas and minerals … and to enter upon the premises for the purpose of exploration for and removal of any or all oil, gas and minerals” as more particularly described in the deed which was recorded in the Broome County Clerk’s Office on ________, 2008, at Book _____ of Deeds at Page ___. 69. A correction deed dated _________, 2012 and recorded in the Broome County Clerk’s Office on _________, 2012 was executed by the same parties to the _______, 2008 deed to reflect that _______ excepted and reserved an “undivided one-half interest in all oil, gas and other minerals located on, in and under all of the premises… together with the right of ingress and egress for the purpose of exploring, drilling, operating, producing or marketing oil, gas and other minerals, and for the purpose of construction and maintenance of any pipeline necessary for the transporting of such oil, gas and other minerals …”. 70. _______’s sole and exclusive purpose in excepting reserving the oil and gas was to develop and extract natural gas lying beneath the property and, in particular, from the Marcellus shale formation. 12
  • 13. 71. Pursuant to the oil and gas lease, and with the intent to develop the ______ Premises and extract natural gas therefrom, on ________, 2010, Norse filed a well permit application with the DEC. 72. Upon information and belief, the Norse permit application was filed for a conventional vertical well due to the existing Moratorium. 73. Upon information and belief, Norse filed the well permit application for a vertical well with the intent of drilling other wells using HVHF from the same well pad as soon as HVHF was permitted in New York. 74. The Norse permit was granted by the DEC on __________, 2010. It expired by its terms during the Moratorium and the ______ Premises has not been developed to date. 75. On or about December 6, 2012, Norse filed for relief under Chapter 11 of the United States Bankruptcy Code and converted to Chapter 7 on or about October 10, 2013, which, upon information and belief, was caused by New York’s failure to permit HVHF to extract Marcellus shale natural gas. 76. On or about ________, 2012, ________ acquired ownership of 100% of all of the oil, gas and other minerals underlying the ________ Premises as is more particularly described in a Mineral Deed recorded on ________, 2012 in the Broome County Clerk’s Office at Book ____ of Deeds at Page ___, a copy of which is attached hereto as Exhibit “O”. 77. ______ owns only the oil, gas and minerals in the _______ Premises and does not have any rights to the surface of the property, other than those incidental to the extraction of oil and gas. 78. Upon information and belief, had Norse been permitted to develop the property using HVHF, plaintiffs _______ and ______ would have realized substantial royalty payments. 13
  • 14. 79. The highest and best use of the property is for oil and gas development. 80. Since the Moratorium, plaintiffs ________ and _______ have been unable to market, develop and extract oil and gas from ________ Premises. 81. The defendants’ Moratorium banning HVHF has rendered valueless or virtually valueless the valuable oil and gas reserves of plaintiffs “A” through “E”, collectively referred to herein as “plaintiffs”, and irreparably injured the plaintiffs. THE DEFENDANTS 82. Defendant, State of New York, is a state organized and maintained pursuant to the New York State Constitution with its principal office located at the State Capital, Albany, New York. 83. Defendant, Andrew M. Cuomo, is the Governor of the State of New York. 84. The New York State Department of Environmental Conservation is an agency of the State of New York with its principal offices located in Albany, New York. 85. Defendant, Joseph Martens, is the Commissioner of the New York State Department of Environmental Conservation. 86. The New York State Department of Health (“DOH”) is an agency of the State of New York with its principal offices located in Albany, New York. 87. Defendant, Nirav Shah, is the Commissioner of the New York State Department of Health. 88. Each individually named defendant is sued in his individual capacity and official capacity. 14
  • 15. 89. Defendants State of New York, Andrew M. Cuomo, New York State Department of Environmental Conservation, Joseph Martens, New York State Department of Health and Nirav Shah are collectively referred to herein as “Defendants”. OPERATIVE FACTS 90. The DEC oversees the regulation of oil and gas drilling in the State of New York. 91. It is the policy of the State of New York as codified at §23-0301 of the Environmental Conservation Law to develop existing natural gas and oil resources within the state in ways that prevent waste and provide for the greatest ultimate recovery of these valuable resources. 92. The New York State Environmental Quality Review Act (“SEQRA”) requires that governmental agencies, including the DEC, consider various factors prior to approving certain activities, such as the drilling of a natural gas well, that may have an adverse effect on the environment. 93. The DEC is required under SEQRA and applicable regulations to expedite proceedings in the interest of prompt review and to minimize procedural and administrative delay. 94. In 1992, to streamline the well permitting process, the DEC prepared a Generic Environmental Impact Statement (“GEIS”) applicable to the operations and impacts associated with the drilling of an oil and gas well. After the GEIS was adopted, any subsequent application for the drilling of a natural gas or oil well within the parameters of the GEIS could be approved without any additional SEQRA review. 95. When the DEC finalized the GEIS some 30 years ago, a technique known as horizontal drilling was commonly in use in New York and was used to drill natural gas wells. 15
  • 16. 96. When the DEC finalized the GEIS some 30 years ago, low volume hydraulic fracturing was also an established technology having been used in New York since the 1950's. 97. More recently, various technological advancements, particularly in the use of horizontal drilling combined with high volume hydraulic fracturing, have enabled economic extraction of natural gas in previously undeveloped “tight” shale formations, such as the Marcellus and Utica shale formations. 98. High volume hydraulic fracturing involves the injection of water, sand and chemicals under high pressure to create a multitude of small fractures to facilitate high volumes of natural gas production. 99. The combination of horizontal drilling and HVHF has been successfully utilized to develop thousands of wells in many other states, including thousands of such wells in Pennsylvania – many of them just a few hundred feet from the New York border. 100. Beginning in approximately February, 2008, New York’s Southern Tier, Western New York and Central New York, experienced a profound expansion of oil and gas leasing activity as these areas are believed to be located in the heart of the Marcellus shale formation. 101. In response to the heightened interest in developing deep shale formations the legislature amended the Environmental Conservation Law of the State of New York (the “ECL”) in 2008 to establish spacing requirements of drilling units for wells utilizing horizontal drilling and hydraulic fracturing. 102. Spacing refers to the size of the drilling unit that can be efficiently drained by one well. The ECL amendments made the administrative permitting process more efficient and eliminated many hearings before the DEC on the appropriate size of the spacing unit for a proposed Marcellus or other deep shale well. 16
  • 17. 103. On July 21, 2008, now former Governor David Paterson signed into law the amendments addressing uniform spacing requirements for well drilling using HVHF. Two days later Governor Paterson also issued a press release ordering the DEC to initiate a formal public process to update the 1992 GEIS to address the environmental impacts of HVHF. 104. Governor Paterson’s directive resulted in a Moratorium which effectively shut down the development of deep shale formations. 105. The development of the SGEIS began with public scoping meetings in November and December, 2008. The purpose of the scoping meetings was to allow members of the public and interested persons to recommend topics to be covered in the SGEIS. The scoping meetings prompted over 3,700 written comments, and following review and incorporation of these comments the DEC released the final scope for the draft SGEIS in February, 2009. 106. Thereafter, the draft SGEIS was released by the DEC on September 30, 2009. Public hearings on the contents of the draft SGEIS were held in October and November, 2009. Over 13,000 written comments were submitted through to December 31, 2009, when the public comment period on the draft SGEIS came to a close. 107. The DOH assisted with and contributed to the draft SGEIS. 108. For a period of almost a year, the DEC purportedly was reviewing the comments in an effort to complete the SGEIS. On December 13, 2010, now former Governor Paterson issued Executive Order No. 41, directing the DEC to publish a revised draft SGEIS on or about June 1, 2011. 109. Executive Order No. 41 explicitly provided that no permits would be issued until the completion of a final SGEIS, thus perpetuating the July 21, 2008 Moratorium. 17
  • 18. 110. Executive Order No. 41 was extended by defendant, Governor Andrew M. Cuomo, on January 1, 2011, continuing the Moratorium. 111. The DEC released the revised draft of the SGEIS, a month late, on July 8, 2011. In its press release of June 30, 2011, announcing the impending release of the revised draft SGEIS, the DEC reported that it had “engaged independent consultants to perform research, sought further information from the gas drilling industry, considered more than 13,000 public comments and studied other states’ regulations and experience.... Since September, 2009, DEC staff has spent approximately 10,250 hours updating the document.” 112. On July 1, 2011, Commissioner Martens announced the initial members of the High-Volume Hydraulic Fracturing Advisory Panel charged with developing recommendations to ensure DEC and other agencies are enabled to properly oversee, monitor and enforce HVHF activities; developing recommendations to avoid and mitigate impacts to local governments and communities; and evaluating the current fee structure and other revenue streams to fund government oversight and infrastructure related to high-volume hydraulic fracturing. The committee met several times between July and December of 2011, but postponed and canceled several meetings thereafter. The panel has not met since mid-December 2011, and never issued any recommendations. 113. Despite this extensive review, and despite the initial scoping process, the DEC decided to further consider the community and socioeconomic impacts of HVHF and engaged independent consultants to research these effects. 114. The DEC stated that the community and socioeconomic research would be completed by July 31, 2011. 18
  • 19. 115. On September 7, 2011, the revised draft SGEIS was released which incorporated the analysis of the community and the socioeconomic impacts of HVHF. 116. On September 28, 2011 the DEC released draft regulations for HVHF (“HVHF Regulations”) and the proposed State Pollution Discharge Elimination System General Permit regulations for storm water discharges associated with HVHF (“SPDES Regulations”) (collectively referred to herein as the “Regulations”). The proposed Regulations for well construction and HVHF reflected the provisions contained in DEC’s revised draft SGEIS. 117. Public hearings were held concurrently on the revised draft SGEIS and the Regulations with the public comment period held open until January 11, 2012. 118. The State Administrative Procedure Act mandates that proposed regulations be final within one year of the last public hearing (SAPA § 202(2)(a)(ii)) giving the DEC until November 29, 2012 to finalize the Regulations. 119. On or about January 11, 2012, Commissioner Martens stated the DEC “is months, but not years” away from finalizing the revised draft SGEIS. 120. Beginning in early 2012, in order to minimize the political consequences related to the release of the SGEIS, the Cuomo administration began pursuing a plan to limit the first HVHF permits those communities in Broome, Chemung, Chenango, Steuben and Tioga Counties that expressed support for the technology. In response to the Governor’s proposal, over forty (40) towns signed resolutions expressing their support. The Governor’s plan was confirmed by a senior DEC official as reported by New York Times reporter Danny Hakim on June 13, 2012. 121. Governor Cuomo made numerous statements in 2012 that the final SGEIS was imminent and that it would be completed before the end of the 2012 summer. 19
  • 20. 122. Upon information and belief, the DEC was prepared to issue the final SGEIS soon after Labor Day 2012. 123. Upon information and belief, in September 2012, Defendant, Andrew M. Cuomo, arbitrarily directed the DEC to delay the release of the SGEIS until after the election of November 2012, a decision influenced exclusively by political concerns, unrelated to any legitimate concerns with the SGEIS and without regard to the interests of prompt review and minimal procedural and administrative delay. 124. On September 17, 2012, Fredric U. Dicker reported that Cuomo administration insiders said a final decision on the SGEIS would not be made until after the 2012 November election. 125. Thereafter, on September 30, 2012, more than a year following the release of the second revised draft SGEIS, Commissioner Joseph Martens announced that he had requested New York State Health Commissioner, Nirav Shah, to assess the impact of HVHF on public health and declared that not until Commissioner Shah’s evaluation was completed would a decision be rendered as to whether to permit HVHF in New York and, hence, permit development of the Marcellus and other deep shale formations (the “Health Review”). Commissioner Joseph Martens also announced that he had asked Commissioner Shah to create an outside panel of experts to advise him in his Health Review. 126. The Health Review was announced, notwithstanding that DOH had already been actively engaged in the process at the time the initial draft SGEIS was released and not withstanding that the DEC in early 2012 had concluded that potential health risks from air emissions, water contamination and other possible sources would be preventable with the state’s 20
  • 21. proposed guidelines and had determined that significant adverse human health impacts were unlikely. 127. In approximately November, 2012, a panel of experts was identified to facilitate the Health Review. 128. On November 28, 2012, after receiving and processing over 66,000 individual public comments on the Regulations, the DEC issued a Notice of Revised Rule Making with revisions to the Regulations. The revised Regulations were subject to a thirty (30) day public comment period which was thereafter extended to ninety (90) days to February 27, 2013. 129. On January 29, 2013, Bill Schwarz, a spokesman for DOH, stressed that the outside consultants’ recommendations were part of a larger review being done by Commissioner Shah and said in response to questions about whether the experts had made their recommendations: “The State Health Commissioner and three external consultants are reviewing the data and information regarding potential public health impacts included in DEC’s draft environmental impact statement”. 130. During sworn testimony before a Legislative Budget Hearing on January 30, 2013, Commissioner Shah testified that the vast majority of the material being reviewed for the health assessment was available on the internet at the DEC website. During that testimony, Commissioner Shah advised that the results of his assessment would be fully revealed within “a few weeks”. 131. On February 8, 2013, it was reported that the three outside experts assisting Commissioner Shah with the Health Review had completed their work on the Health Review more than a month earlier, a fact Commissioner Shah failed to disclose during his lengthy testimony before lawmakers the previous week and DOH spokesman Bill Schwarz failed to 21
  • 22. disclose in his January 29, 2013 statement. One panel expert said his review was completed two months earlier and was in the hands of the DOH; another said she completed her last comments on the review about six weeks earlier; and, the third said all three consultants finished their work at the same time. 132. On or about February 12, 2013, Governor Cuomo met with Commissioner Martens and Commissioner Shah and authorized the release of two statements to the public: (1) Commissioner Shah’s February 12, 2013 letter to Commissioner Martens advising him that he needed to review three studies, two of which were by Geisinger Health Systems and University of Pennsylvania and said “I anticipate delivering the completed Public Health Review to you within a few weeks, along with my recommendations”, and (2) a statement dated February 12, 2013 from Commissioner Martens indicating that Commissioner Shah advised him that he expected his review to be complete within “a few weeks” and that the DEC could issue permits for HVHF if “the DOH Public Health Review finds that the SGEIS has adequately addressed health concerns”. 133. Upon information and belief, the Geisinger Health Systems and University of Pennsylvania health studies have still not been fully funded. 134. DEC failed to meet the February 27, 2013 deadline for completion of the Regulations and allowed the Regulations to expire. 135. A month later, on March 12, 2013, Commissioner Shah indicated that his review would, again, be done “in a few weeks”. 136. To date, Commissioner Shah has not issued a report, the SGEIS is not final, and DEC has issued no HVHF permits. 22
  • 23. 137. Upon information and belief, Governor Cuomo, his administration and/or defendants have issued a gag order preventing DEC, DOH and any New York State employee from making any public comments about the SGEIS, the Health Review or HVHF without the prior consent of the Cuomo administration. 138. On March 14, 2011, the Albany Times Union reported that Taury Smith, New York State Geologist and Director of the New York State Geological Survey of the New York State Museum made favorable comments about HVHF stating that he has been examining the science of hydrofracturing the shale for three years and has found no cases in which the process has led to groundwater contamination; that several portrayals by anti-fracking groups about underground pools being harmed because of drilling are exaggerated problems that are unrelated to HVHF; that HVHF could help fight climate change; and that allowing HVHF in New York would be a huge boost for New York job creation and for income and business tax revenues. The Times Union also reported that Former DEC Commissioner Alexander “Pete” Grannis said he agreed with Smith that the dangers of HVHF are overblown and that the DEC is on course to set solid regulations. 139. On March 28, 2011, the Albany Times Union reported that the New York State Education Department would no longer allow Mr. Smith to talk to reporters or take calls related to HVHF and that any failure to follow its internal protocol for handling media inquiries would result in appropriate administrative action. 140. Taury Smith has remained silent on HVHF since his comments were reported on March 14, 2011. He left his position with New York State for a position as a private geology consultant in January 2013. 23
  • 24. 141. Upon information and belief, DOH and Commissioner Shah have failed to expedite the Health Review in the interest of prompt review and have failed to minimize procedural and administrative delay at the direction of the Cuomo administration. 142. Upon information and belief, DOH is ready, willing and able to issue its Health Review, there being no valid, rational, or legally defensible reason for further delay. 143. Upon information and belief, the DEC is ready, willing and able to issue the final SGEIS and begin granting permits for HVHF, there being no valid, rational, or legally defensible reason for further delay. 144. Upon information and belief, Governor Cuomo has arbitrarily prevented DOH from issuing its Health Review without any good faith, valid, rational, or legally defensible reason. 145. Upon information and belief, Governor Cuomo has arbitrarily prevented the DEC from issuing the final SGEIS and granting permits for HVHF for reasons based exclusively on political concerns and without any good faith, valid, rational, or legally defensible reason. 146. In April 2013, it was reported that when asked at a political fundraiser when the HVHF stalemate would be resolved, Governor Cuomo responded by blaming the “pro-fracking lobby” for not doing enough to shift public opinion in favor of approval, implying that his personal political agenda motivated his continuation of the Moratorium which is contrary to the interests of prompt review and minimizing procedural and administrative delay. 147. The Moratorium continues apparently interminably. 148. Applications to the DEC for HVHF permits by plaintiffs or any operator would be futile. 24
  • 25. 149. Plaintiffs are suffering and will continue to suffer irreparable harm if the Moratorium is permitted to remain in place and plaintiffs are continually precluded from exercising their property rights. 150. On __________, 2013 plaintiffs made written demand upon defendants to do what the law requires them to do; to wit, finalize the SEQRA process and issue a final SGEIS with respect to HVHF within thirty (30) days of the demand. 151. Defendants have failed and refused to act in compliance with plaintiffs' written demand. JURISDICTION AND VENUE 152. The Court has jurisdiction to grant a declaratory judgment and further and consequential relief pursuant to CPLR§§ 3001 and 3017(b). 153. The Court has jurisdiction pursuant to CPLR §§ 7801 and 7803 to determine this proceeding. 154. The Court has jurisdiction pursuant to CPLR§ 6301 to grant injunctive relief necessary to implement the relief requested herein. 155. The Court has jurisdiction pursuant to common law to grant relief for a taking of property without just compensation in violation of the New York State Constitution, Article I, Section 7(a). 156. The Court has jurisdiction pursuant to 42 U.S.C. §§ 1983 and 1988 to grant relief for a taking of property without just compensation in violation of the U.S. Constitution, Fifth Amendment, as applied to the States through the Fourteenth Amendment, and to remedy and award damages for procedural and substantive due process violations under the U.S. Constitution. 25
  • 26. 157. Venue in this Court is proper pursuant to CPLR §§ 503, 506(b), and 509. FIRST CAUSE OF ACTION DECLARATORY JUDGMENT - ILLEGAL AND VOID MORATORIUM AS AGAINST ALL DEFENDANTS 158. Plaintiffs re-allege paragraphs 1 through ____ as though fully restated. 159. The conduct of the defendants has resulted in a perpetual Moratorium banning the issuance of well drilling permits for HVHF on plaintiffs’ surface and subsurface property. 160. SEQRA mandates that DEC issue a final SGEIS regarding HVHF, expedite proceedings in the interest of prompt review, and minimize procedural and administrative delay. 161. The DEC, as lead agency in the SEQRA process, has no authority to delegate its decision making to another State agency, to wit, DOH. 162. New York State enacted SEQRA to preserve and enhance the quality of the environment and to establish a process for reviewing the impact of proposed activity on the environment. 163. SEQRA is not a public health review statute, and politics should never influence the SEQRA process. 164. The Governor is not a lead agency in the SEQRA process and the Governor has no authority to direct or control the SEQRA process. 165. The DEC, as lead agency in the SEQRA process, has no authority to allow the Governor to control the process. 166. The DEC has evaded its responsibilities under SEQRA by delegating review to another State agency, to wit, DOH and allowing the Governor to direct and control the process of SEQRA decision making. 26
  • 27. 167. Defendants have used the SEQRA process to perpetuate the Moratorium thereby depriving plaintiffs of their valuable property rights in their gas and oil deposits. 168. The Moratorium, in whole or in part, in both its enactment and perpetuation, is not a valid exercise of the defendants’ powers under law, is an invalid exercise of the State’s police powers, is arbitrary and capricious and contrary to law. 169. There exists an actual, imminent and justiciable controversy between the parties with respect to whether the Moratorium, in whole or in part, is unlawful, unconstitutional, an invalid exercise of defendants’ police powers, arbitrary, capricious, irrational, and otherwise improper. 170. Plaintiffs should be granted a declaratory judgment that the Moratorium, in whole or in part, is illegal, unconstitutional, and otherwise void and unenforceable. SECOND CAUSE OF ACTION ARTICLE 78 MANDAMUS AS AGAINST CUOMO, DEC, MARTENS, DOH AND SHAH 171. Plaintiffs re-allege paragraphs 1 through _____ as though fully restated. 172. A proceeding pursuant to CPLR § 7803(1) lies to compel a body or officer to perform a nondiscretionary duty. 173. Defendants, Andrew M. Cuomo, DEC, Joseph Martens, DOH and Nirav Shah, individually or collectively, are a body or officer within the meaning of CPLR Article 78. 174. A proceeding for Article 78 mandamus relief lies to compel finalization of the SEQRA process. 175. SEQRA mandates that DEC issue a final SGEIS regarding HVHF in a timely manner. 27
  • 28. 176. SEQRA mandates that the Governor and the DOH refrain from interfering with and/or obstructing the DEC’s issuance of a final SGEIS. 177. Plaintiffs do not seek a directive requiring these defendants to act with respect to discretionary matters, but rather seek to require these defendants to perform their obligations under SEQRA and permit issuance of a final SGEIS. 178. This proceeding is brought to compel these defendants to perform a duty enjoined upon them by law, that involves no discretion and that they are duty-bound to perform. 179. There are no administrative steps available to plaintiffs to obtain the result requested and the pursuit of administrative relief would be futile. 180. Plaintiffs have a clear legal right to the relief sought. 181. This proceeding is ripe for review. THIRD CAUSE OF ACTION N.Y. AND U.S. CONSTITUTIONS - TAKINGS CLAIM AS AGAINST DEFENDANT THE STATE OF NEW YORK 182. Plaintiffs re-allege paragraphs 1 through ____ as though fully restated. 183. Plaintiffs’ right to subsurface oil and gas reserves constitutes private property within the meaning of the New York State Constitution, Article I, Section 7(a) and the U.S. Constitution, Fifth and Fourteenth Amendments. 184. Plaintiffs’ property rights to subsurface oil and gas reserves are valueless unless the Moratorium is ended and HVHF permitted. 185. Defendants’ actions in enacting and continuing a perpetual Moratorium have deprived plaintiffs of all economically beneficial use of their subsurface property rights. 28
  • 29. 186. Defendants have unconstitutionally deprived plaintiffs of their private property, in whole or in part, have interfered with plaintiffs’ reasonable investment-backed expectations with respect to subsurface rights, and have taken plaintiffs’ property, all without just compensation in violation of plaintiffs’ constitutional rights. 187. Through their actions, defendants have taken plaintiffs’ property for public use. 188. Defendants have not provided just compensation to plaintiffs for taking plaintiffs’ property. 189. Defendants, in taking plaintiffs’ property without just compensation, have unconstitutionally compelled plaintiffs to bear a public burden which should be borne by the public as a whole. 190. Plaintiffs should be granted a declaratory judgment that defendant State of New York has unconstitutionally deprived plaintiffs of their property rights and are entitled to an award of monetary damages in an amount to be determined by the New York State Court of Claims. FOURTH CAUSE OF ACTION VIOLATION OF SUBSTANTIVE AND PROCEDURAL DUE PROCESS U.S. CONSTITUTION - FOURTEENTH AMENDMENT AS AGAINST ALL DEFENDANTS 191. Plaintiffs re-allege paragraphs 1 through ____ as though fully restated. 192. Defendants have deprived and continue to deprive plaintiffs of due process of law, as secured by the Fourteenth Amendment to the U.S. Constitution, by enacting and perpetuating an unlawful Moratorium, thereby depriving plaintiffs of the use of their property. 193. Defendants have deprived and continue to deprive plaintiffs of due process of law, as secured by the Fourteenth Amendment to the U.S. Constitution, by enacting and 29
  • 30. perpetuating a Moratorium that lacks a reasonable time frame for defendants’ actions to be completed, that is without a justifiable and demonstrated need, where the burden imposed is borne by selected individuals, including plaintiffs, rather than the public at large, where there is no enabling legislation or stated procedure for the Moratorium, and where there is no time certain for its expiration, all of which violate plaintiffs’ rights to due process. 194. Unless defendants are enjoined from enforcing the Moratorium, plaintiffs will suffer irreparable injury for which there is no adequate remedy at law. FIFTH CAUSE OF ACTION VIOLATION OF 42 U.S.C. §1983 AS AGAINST DEFENDANTS THE STATE OF NEW YORK AND CUOMO 195. Plaintiffs re-allege paragraphs 1 through ____ as though fully restated. 196. Defendants, acting under color of State law, have deprived and continue to deprive plaintiffs of their substantive and procedural due process rights secured by the U.S. Constitution, in violation of 42 U.S.C. §1983. 197. Accordingly, plaintiffs are entitled to damages. WHEREFORE, plaintiffs respectfully request that this Court grant the following relief: (a) A declaration that defendants’ actions constitute a Moratorium that is, in whole or in part, illegal, unconstitutional, and otherwise, void and unenforceable; (b) A judgment pursuant to CPLR Article 78 compelling the DEC to finalize the SEQRA process and issue a final SGEIS with respect to HVHF within sixty (60) days and awarding damages incidental to the primary relief requested or show cause why such relief should not be granted; (c) A permanent restraining order and preliminary and permanent injunctions, 30
  • 31. pursuant to CPLR Article 63 restraining and enjoining defendants from enforcing the Moratorium as against the plaintiffs and compelling defendants to finalize the SEQRA process and issue a final SGEIS with respect to HVHF within sixty (60) days or show cause why such relief should not be granted; (d) A declaration that plaintiffs are entitled to just compensation from the defendants as a result of the taking of plaintiffs’ property in violation of the New York State and U.S. Constitutions and an order remanding the case to the Court of Claims for a judgment awarding monetary damages; (e) A declaration that the defendants’ actions, in whole or in part, violate the plaintiffs’ rights to substantive and procedural due process of law, as protected by the Fourteenth Amendment of the U.S. Constitution; (f) An award of monetary damages against the defendants pursuant to 42 U.S.C. §1983, attorneys’ fees pursuant to 42 U.S.C. §1988 and an order remanding the case to the Court of Claims for a judgment awarding monetary damages; (g) An award to plaintiffs for the full costs and attorneys’ fees arising out of (h) Such other and further relief as this Court may deem just and proper. this litigation; Dated: ____, 2013 NY 31