United States District Court, N.D. Ohio, Eastern Division
Corey A. Kerns, et al., Plaintiffs,
Chesapeake Exploration, LLC, et al., Defendants.
MEMORANDUM OF OPINION AND ORDER
PATRICIA A. GAUGHAN UNITED STATES DISTRICT COURT CHIEF JUDGE
matter is before the Court upon: (1) Defendant Chesapeake
Exploration, L.L.C.'s Motion to Dismiss (Doc. 9) and (2)
Motion to Dismiss of Defendant Richard J. Simmers, Chief,
Ohio Department of Natural Resources, Division of Oil and Gas
Resources Management (Doc. 8). This case involves property
rights related to natural gas located below the surface of
Plaintiffs' land. For the reasons that follow,
Defendants' motions are GRANTED.
Corey A. Kerns, Keith J. Kerns, Mark Zantene, Linda Zantene,
Robert J. Zantene Trust, Helen Zantene, and Connie Huhn,
bring this action against Defendants, Chesapeake Exploration,
L.L.C. and Richard J. Simmers, Chief of the Ohio Department
of Natural Resources, Division of Oil and Gas Resources
Management, alleging violations of the Fourteenth Amendment
in connection with unconstitutional takings of
Plaintiffs' property. Plaintiffs request declaratory
judgment, injunctive relief, and compensatory and punitive
are property owners of 127 acres of land located in Harrison
County, Ohio. (Doc. 1 ¶ 7). Plaintiffs allege that they
own the land as well as the oil, gas, and natural gas liquids
located beneath the surface of the land. Id. On
November 10, 2014, Defendant Chesapeake Exploration, L.L.C.
(“Chesapeake”) filed a unitization application
with the Division of Oil and Gas Resources Management (the
“Division”) pursuant to Ohio Rev. Code §
1509.28. Id. ¶ 34, 35. The application included
the mineral estate beneath Plaintiffs' land. Id.
Plaintiffs objected to the application and submitted a motion
to dismiss the application, which was never ruled upon by
Defendant Simmers. Id. ¶¶ 37, 38.
February 2015, while the application was pending, Plaintiffs
filed their first lawsuit in this Court, alleging wrongdoing
with the potential “takings” of their natural gas
rights located beneath the surface of their land, in
connection with Chesapeake's application. See Kerns,
v. Chesapeake Exploration, LLC,, No. 15 CV 346, Doc. 1
(N.D. Ohio, Feb. 23, 2015). On September 1, 2015, the Court
dismissed Plaintiffs' complaint because Chesapeake's
application was still pending and Plaintiffs had not availed
themselves of Ohio's procedures for obtaining just
13, 2015, Defendant Simmers issued a unitization order (the
“Order”), aggregating Plaintiffs' land with
adjacent land to form a drilling unit (the
“Unit”). Id. ¶ 13. The Order also
authorized Chesapeake to drill three wells on the Unit, but
not on the surface of Plaintiffs' land, in order to
release oil, gas, and natural gas liquid trapped within the
shale beneath the Unit. Id. Plaintiffs did not
receive notice of the Order until November 4, 2015, when it
was posted on the Division's website. Id. ¶
appealed the Order to the Ohio Oil and Gas Commission (the
“Commission”) pursuant to R.C. § 1509.36.
Id. ¶ 41. Plaintiffs asserted that the Order
violated their property rights and that the Order was
procedurally and substantively unlawful. Id. The
Commission dismissed the appeal, stating that it did not have
jurisdiction to consider Plaintiffs' constitutional law
claims. Id. ¶ 32. Plaintiffs did not appeal the
Division's decision in the Franklin County Court of
Common Pleas as provided in R.C. § 1509.37. Plaintiffs
then filed a verified complaint for a writ of mandamus with
the Ohio Supreme Court, seeking an order to compel Defendant
Simmers to commence appropriation proceedings regarding
Plaintiffs' property in accordance with Ohio Rev. Code
Chapter 163. Id. ¶ 44. The Ohio Supreme Court
denied Plaintiffs' complaint for a writ of mandamus on
the basis that Plaintiffs had an adequate remedy at law under
R.C. § 1509.37. Id. ¶ 45.
December 16, 2016, Defendant Simmers issued a drilling permit
to Chesapeake for the first oil and gas well to be drilled in
accordance with the Order. Id. ¶ 14. Pursuant
to that permit, Chesapeake drilled the well, commenced
horizontal drilling and hydraulic fracturing
(“fracking”), and removed oil, gas, and natural
gas liquids from the Unit. Id. ¶¶ 16-19.
Horizontal drilling and fracking involve injecting water,
sand, and chemicals into the shale beneath the Unit,
including Plaintiffs' land, causing the shale to fracture
and release oil, gas, and natural gas liquids, which then
flow to the wells for retrieval. Id. ¶ 13.
Complaint contains three counts. Count one, against
Chesapeake, alleges a takings claim in violation of the Fifth
Amendment, the Fourteenth Amendment, and 42 U.S.C. §
1983, as well as a claim for declaratory judgment under 28
U.S.C. § 2201 and a claim for injunctive relief. Count
two requests declaratory judgment and injunctive relief
against Defendant Simmers. Count three is a claim for
punitive damages against Chesapeake. Defendants move to
dismiss the Complaint under Fed. R. Civ. Pro. 12(b)(1) and
12(b)(6). Plaintiffs oppose the motions.
court's subject matter jurisdiction is challenged under
Rule 12(b)(1) of the Federal Rules of Civil Procedure, the
party seeking to invoke jurisdiction bears the burden of
proof. McNutt v. Gen. Motors Acceptance Corp., 298
U.S. 178, 189 (1936); Rogers v. Stratton, 798 F.2d
913, 915 (6th Cir. 1986). This burden is not onerous.
Musson Theatrical, Inc. v. Fed. Express Corp., 89
F.3d 1244, 1248 (6th Cir. 1996). The party need only show
that the complaint alleges a substantial claim under federal
12(b)(1) motion to dismiss may constitute either a facial
attack or a factual attack. United States v.
Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). Facial
attacks question the sufficiency of the jurisdictional
allegations in the complaint. Id. Thus, those
allegations must be taken as true and construed in the light
most favorable to the nonmoving party. Id. Factual
attacks, however, challenge the actual fact of the
court's jurisdiction. Id. In such cases, the
truthfulness of the complaint is not presumed. McGee v.
E. Ohio Gas Co., 111 F.2d 979, 982 (S.D. Ohio 2000)
(citing Ohio Nat'l Life Ins. Co. v. United
States, 922 F.2d 320 (6th Cir. 1990)). Instead, the
Court may weigh any evidence properly before it. Morrison
v. Circuit City Stores, Inc., 70 F.Supp.2d 815, 819
(S.D. Ohio 1999) (citing Ohio Nat'l, 922 F.2d
320; Rogers, 798 F.2d 913).
is appropriate when a plaintiff fails to state a claim upon
which relief can be granted. Fed.R.Civ.P. 12(b)(6). We assume
the factual allegations in the complaint are true and
construe the complaint in the light most favorable to the
plaintiff.” Comtide Holdings, LLC v. Booth Creek
Management Corp., 2009 WL 1884445 (6th Cir. July 2,
2009) (citing Bassett v. Nat'l Collegiate Athletic
Ass'n, 528 F.3d 426, 430 (6th Cir. 2008)). In
construing the complaint in the light most favorable to the
non-moving party, “the court does not accept the bare
assertion of legal conclusions as enough, nor does it accept
as true unwarranted factual inferences.” Gritton v.
Disponett, 2009 WL 1505256 (6th Cir. May 27, 2009)
(citing In re Sofamor Danek Group, Inc.,
123 F.3d 394, 400 (6th Cir.1997). As outlined by the Sixth
Federal Rule of Civil Procedure 8(a)(2) requires only
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” “Specific
facts are not necessary; the statement need only give the
defendant fair notice of what the ... claim is and the
grounds upon which it rests.” Erickson v.
Pardus, 551 U.S. 89, 93 (2007) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
However, “[f]actual allegations must be enough to raise
a right to relief above the speculative level” and to
“state a claim to relief that is plausible on its
face.” Twombly, 550 U.S. at 555, 570. A
plaintiff must “plead[ ] factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
Keys v. Humana, Inc., 684 F.3d 605, 608 (6th
Cir.2012). Thus, Twombly and Iqbal require
that the complaint contain sufficient factual matter,
accepted as true, to state a claim to relief that is
plausible on its face based on factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged. Twombly, 550
U.S. at 570; Iqbal, 556 U.S. at 678. The complaint
must contain “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555.
challenges Plaintiffs' standing to assert a takings claim
regarding the subsurface property rights at issue. Under
Article III of the U.S. Constitution, standing is a threshold
requirement for a court to hear all cases and controversies,
and thus implicates the issue of subject matter jurisdiction.
See Horne v. Flores, 557 U.S. 433 (2009). In order
to satisfy Article III's standing requirement, Plaintiffs
must establish: (1) an injury in fact that is concrete and
particularized; (2) a connection between the injury and the
conduct at issue; and (3) a likelihood that the injury would
be redressed by a favorable decision of the court.
Courtney v. Smith, 297 F.3d 455, 459 (6th Cir.
2002). An “injury in fact” requires that the
plaintiff suffered “an invasion of a legally protected
interest” that is “actual or imminent, not
conjectural or hypothetical.” Spokeo, Inc. v.
Robins, 136 S.Ct. 1540, 1548 (2016). The party invoking
federal jurisdiction has the burden to prove a concrete and
particularized, actual and imminent, injury in fact. See
Steel Co. v. Citizens for a Better Env't, 523 U.S.
83, 104 (1998)(“[T]he party invoking federal
jurisdiction bears the burden of establishing its
contends that Plaintiffs lack standing because they do not
own the mineral rights which are subject to the Order. In
support of its argument, Chesapeake provides a number of
leases dating back to 1981 which appear to demonstrate that
Plaintiffs leased at least some of their interest in the oil
and gas beneath their land to another party. Chesapeake
argues that, based on these leases, Plaintiffs have no
property interest in the minerals beneath their land.
Plaintiffs object to the introduction of the leases, dispute