Carbon County Resource Council v. Mont. Bd. of Oil & Gas Conservation

Carbon County Resource Council v. Mont. Bd. of Oil & Gas Conservation, 2016 MT 240 (Sept. 27, 2016) (Baker, J.; McGrath, C.J., concurring) (5-0, rev’d)

Issue: Whether Plaintiffs’ claims were ripe for judicial review.

Short Answer: Yes.

Reversed. 

Facts: In October 2013, Energy Corporation of America announced plans to develop oil and gas leases in the Beartooth Mountains. Energy Corp. filed an application with the Board for a permit to drill an exploratory oil and gas well in Carbon County, the Hunt Creek 1–H well. Carbon County Resource Council and Northern Plains Resource Council objected to the permit. The Board held a hearing, after which it approved the permit, stating that Energy Corp. did not propose hydraulic fracturing (fracking) at the site.

In July 2014, Energy Corp. notified the Board that it intended to stimulate the well and perform a diagnostic fracture injection test. Pursuant to ARM 36.22.608(2), the Board approved Energy Corp.’s notice and allowed it to perform the diagnostic test without engaging in any additional review or public process. 

After the hearing, but before Energy Corp.’s notice, Plaintiffs challenged the Board’s approval, claiming in part that the Board’s application of ARM 36.22.608(2) denied them a meaningful opportunity to participate in the government decisions.

Procedural Posture & Holding: On cross-motions for summary judgment, the district court held that Plaintiffs’ claims were not ripe because fracking had not occurred at the Hunt Creek well. Resource Councils appeal and the Supreme Court reverses, holding that the Board did not violate Plaintiffs’ constitutional right to participate in government operations, but directing that judgment be entered for the Board on the merits.

Reasoning: As a quasi-judicial state agency, the Board must ensure public participation in its decision making processes. Ripeness, a justiciability doctrine, is concerned with whether a case presents an actual controversy rather than a hypothetical or illusory dispute. The Court first holds that Plaintiffs’ claim is ripe before considering the merits of that claim.

Because Plaintiffs had notice and an opportunity to be heard, they had the opportunity to meaningfully participate. Hydraulic fracturing has not occurred at the well site, and if it is proposed in the future, the Plaintiffs will have the opportunity to participate in the permitting process.

Chief Justice McGrath’s Concurrence (joined by Justices Shea and Wheat): Plaintiffs challenged the sundry notice and 48-hour notice provisions of ARM 36.22.608. Although the majority finds the Board’s initial permitting process satisfied the constitutional right to participate, the rule may be unconstitutional in other circumstances. If hydraulic fracturing is proposed for this well, the Board will implement procedure to ensure that the public’s right to a meaningful opportunity to participate is protected.