Ohio Justices Revive Fracking Waste Spat After Well Shutdown

An Ohio appeals court must reconsider a spat between a fracking waste disposal company and a state agency that suspended operations at one of the company’s wells following two earthquakes, the state Supreme Court said Wednesday.

The 11th District Court of Appeals’ ruling was outside the scope of the instructions the Supreme Court gave when it first sent the case back in 2020, the justices stated in their unanimous opinion. They said the appeals court didn’t consider the evidence on whether the state’s order to shut down a brine injection well operated by AWMS Water Solutions LLC constituted the government’s taking of a property and should lead to the company getting paid.

“By failing to weigh the evidence—the touchstone analysis of whether there has been a regulatory taking—the court of appeals failed to perform the task we ordered it to do on remand,” the justices said.

Instead, it improperly ruled on the already-settled matter of whether the company even had a property interest, the Supreme Court said.

The state’s high court sent back the case again with the same instructions it gave in 2020: to weigh the evidence to determine whether AWMS is entitled to compensation under the takings clause of the Fifth Amendment.

Two Wells

AWMS, a subsidiary of waste management conglomerate Avalon Holdings Corp., in December 2011 secured the rights to operate injection wells on property in Weathersfield Township, about 70 miles southeast of Cleveland.

The oil and gas branch of the Ohio Department of Natural Resources in July 2013 authorized AWMS to drill two wells, and AWMS spent about $5.6 million to build its facilities. The following March, it gave AWMS permission to start injection operations, according to the opinion.

However, authorities shut down the wells after they said they traced earthquakes in July and August 2014 back to AWMS’ operations. The division later allowed one well to resume operating, the opinion said.

Two years later, AWMS asked the 11th District to force the state to start “property-appropriation proceedings,” saying that the suspension of one of the wells’ operations was essentially the government taking its property.

The appeals court, in response to a summary judgment motion, disagreed and determined the state’s actions didn’t constitute a full or partial “taking” of AWMS’ property. But the Supreme Court reversed in 2020, saying there were factual disputes that warranted a trial.

A three-judge appeals panel held a nine-day trial in September 2021. Six months later, it asked both sides to brief questions regarding property interests. It again ruled against AWMS in December 2022, saying the company didn’t have the required interest in property “that would trigger a Fifth Amendment takings analysis.”

The high court, in again taking up the case, eschewed oral arguments, deeming them unnecessary.

AWMS is represented by Brennan Manna & Diamond LLC. The state is represented by the Ohio Attorney General’s Office.

The case is Ohio ex rel. AWMS Water Sol. LLC v. Mertz, Ohio, No. 2023-0125, 1/24/24.