good morning may please the court and opposing counsel philip campanella appearing on behalf of the plaintiff landowners we would like to reserve three minutes of time for rebutting we urge the court to reverse and vacate the decision of the district court and to remand this case for further proceedings consistent with the fourteenth amendment the district court erred in dismissing the complaint for failure to state a claim upon which relief can grant the essence of this case involves plaintiff's property rights and the process for taking those property rights all of which osha cured by the fourteenth amendment which imposes limitations upon the state regulatory police powers with respect to the plaintiff's property rights both the united states supreme court and the ohio supreme court have stated that the owner of the property it is the surface of the property also owns the minerals the next the property and his a right to extract those minerals by operations conducted on its own land and all of those rights are secured by the fourteenth amendment united states supreme court cases include ohio oil versus indiana and west versus kansas natural gas company the ohio supreme court cases include kili vs ohio oil which was recently reaffirmed by the supreme court in chesapeake exploration vs buell in addition the ohio supreme court has stated that the owner of the surface of the land has a right to exclude invasions of the subsurface that interfere with the foreseeable in a reasonable use of the subsurface by the owner that cases the chains are says b p chemicals case which is an adaptation of the principle of law articulated by the united states supreme court and us vs cosby where the united states supreme court stated that the owner of the surface of the land owns at least so much of the space above the land as the owner can use or occupied in the instant case the oil the natural gas and the natural gas liquids are located in the subsurface beneath plenty of land there for the pla yes and so all you're saying that the procedure by the state of ohio that they have established is what unconstitutional yes ok they have to be a party to this case state of ohio no they they received they are through the attorney general's office representing the chief of the division of oil and gas resources management and therefore they have notification  defined the rights of people in these subsurface situations and as that beyond their power to do that's not consistent with the citizens of the united states supreme court or the ohio supreme court yes it is the process that was used in this case violated the taking school as the united states supreme court has held in at least four cases that the permanent physical intrusion of property rights constitutes a per se taking of that property in violation of the taking in schools those cases are the horn case the kaiser et in the case lingle case in the libretto case that's with respect to the takings clause with respect to the due process clause of the united states supreme court stated that no right secured by the fourteenth amendment can be taken by state regulatory police powers and that's exactly what th court in the chicago railroad case stated that just compensation includes full and fair compensation equivalent to the property taken the administrative officer chief  case made no attempt and is not even authorized to attempt to determine what just compensation is and in doing so that would be a second violation of the due process clause according to the united states supreme court the united states supr excuse hicks versus oklahoma stated that where a state has a statute such as ohio's mandatory appropriation statute and there's a failure to follow that state you say that you it is a denial of due process of law in the instant case the defendant chief simmers fail to follow hiles mandatory appropriations that you're in the taking of the plaintiff's property that is the subsurface the oil gas and indeed because it provides for a judicial determination of public use specifically it provides for a jury trial on the issue of just compensation that is consistent with the  three and applicable well that is not consistent your honor we understand that's are positioned not consistent with the lugar case the lugar case the cited by the united states supreme court sets forth facts that are parallel to the instant case in the luger case a judged creditor used a constitutionally defective statute and attachment statute to seize the property of the debtor with the assistance of the sheriff the supreme court of the united states said that's a of section one nine hundred eighty three because the judgment creditor was a state actor under color of law and its actions are fairly attributable to the state in the instant case the defendant chesapeake to permanently and physically invade the subsurface of plaintiff's land by horizontal drilling by the injection of millions of gallons of water sand and chemicals in order to release the oil gas and natural  minerals and continues to do so and has sold those minerals and continues to sells minerals for its own benefit all in violation of plaintiffs right secured by the fourteenth are you getting paid for the removal of the product under your land there is a commission of a royalty of twelve and a half percent that is not nowhere near what fair compensation would be that that's ohio has told the state agencies what it must do by the mandatory appropriation statute when it seeks to take property rights in the defendant chief simmers has failed to do that your arguments to stardom and everything are understandable but this was sort of a proceed your old dismissal of this case which really if the court was correct and you're saying it isn't but if the court was correct and that it really doesn't implicate we believe that is in here or not only in direct addicks the principle of law remains very valid your honor and that the facts are quite parallel they used him stand this court has other decisions but the for example the  watson case cited by the defendants in this case in the watson case where this court determined one thousand nine hundred three was not violated the parties exchanged a deed that conveyed the property rights in this case it is the state of ohio through the defendant simmers that seeks to convey the plaintiffs property rights to a private entity for its private use by the way that's the  third violation of the due process clause supreme court has been very clear that the conveyance of private property to a private entity for private use is a violation of due process clause that's the missouri pacific railway case and the key location in this case that's exactly what has occurred the the state of ohio by and through the defendant chief simmers has conveyed plaintiff's property rights in the subsurface in the oil gas and natural gas liquids and the right to extract to defend then chesapeake a private entity for its private use in violation of the due process clause according to the supreme court so with all due respect to the district court decision of this or this record is not sustainable based upon the decisions of the united states supreme court therefore we urge this court to reverse and vacate the decision of the district court and to remain in this case for further proceedings consistent with the fourteenth amendment but simply stated the defendant's state cannot take the plaintiffs property in violation of the due process clause in the good morning your honour's and may please the court i'm sam peterson on behalf of the ohio department of natural resources i'll be arguing for ten minutes this morning to make greener is here on behalf of chesapeake exploration you'll be arguing for the remaining five no one disputes that all ohio landowners have a right to seek to obtain the benefit of any oil and gas that exist underneath their property this is not an absolute right and it is not a right to the oil and gas itself instead it's known what is it what right it's a right that is held together with all neighboring landowners whose property it also sits on top of a common source of supply units is asian order like the one at issue in this  means of protecting among other things those corella have rights and district court correctly determined does not constitute taking now i think you can break plaintiff's arguments down into two separate types of taking there's what i think of as a traditionalist taking as it relates to the oil and gas in the value of the oil and gas and then there's a well read oh style taking which constitutes a physical innovation claim and i think you can actually break the into two other parts but i'd like to start with the first part with the oil and gas itself and briefly just take a step back to discuss the nature of the right that is alleged to take in the school relative right in ohio cr rights are defined by fifteen zero nine point zero one i and they say that it is in opportunity to every person to seek to obtain the oil and gas under their property or the benefit there of and crow rights replaced what was known as the rule of capture in before one thousand nine hundred five in ohio what happened with oil and gas was if i drilled well on my property anything that came out of that well whether it came from my property whether it came from my neighbor's property belongs to me and so therefore some landowners could lose all benefit of any oil and gas that existed under their property when ohio adopted a corella of rights scheme they joined many other oil and gas producing states in protecting everyone's rights and so under the law as it exists in ohio it is actually more protective of oil and gas rights then it used to be because now no longer are you running the risk that you could be deprived of all of your oil and gas instead when you are part of a unit you are guaranteed some portion of the proceeds some portion of the oil and gas i gather that one of the point your opponent is making is that nine hundred decision from the u s supreme court where they recognize that when states adopt statutes governing the exercise of corellas of rights those do not constitute the taking and every court and point the the first answer to the extent that the plaintiffs have questions about how that state police powers been exercised it's not a question about it taking but matter more a question about the process and they had an opportunity to to those those issues when the unit has a shorter was issued they chose not to do so they filed first in federal court then they went back to state court filed mandamus and now we are back here in federal court on a new claim but i would also point to the unit as ation statute itself fifteen zero nine point two eight and there are two relevant provisions there that show that nothing has been taken first the statute specifically says that no order providing  unit operation shall be construed to result in a transfer of all or any part of title to the oil and gas and then it goes on to say that the oil and gas allocated to any tract and proceeds from the sale shall be the property in the income of the party to whom they are allocated and so at no point has anything been taken either as a statutory matter or as a jurisprudential matter and as a matter of precedent and i know the plaintiffs also cite ohio oil but the passage that they say in that case is actually a summary of an argument the court then goes on to reject and so high oil does not stand for the principles for which the plaintiffs cite if i may i would like to also address their physical invasion claim there of the red of style claim because the district court also correctly determined that there has been no taking in that context and as i said i think you can break their claim down into two different component parts one related to the drilling of the well itself and one related to the stimulation of the well and i think there are at least three reasons why neither of those constitute a taking and the first reason goes back to the krell of rights doctrine because it's not just that this right to the oil and gas is a collective right that is held together by all affected landowners but when a well is drilled the unit is a shorter provides that it is done on behalf of all of those landowners that there is some contribution either as a risk penalty or other allocation of the cost of drawing well so yes chesapeake may be drilling the well but is actually a collective action and that distinguishes it from the radio in the sense that the radio said that putting a cable box by the cable company on your property is a physical invasion and therefore constitutes a taking even if it's de minim is but i'd also said that if you owned the cable box if you were if they put that on there in the title transferred to you as the property owner then that would not be the same type of concern there would not be a physical invasion here when you have a well that is going underneath your property it is a well that is owned in part by all of the affected land owners they have all contributed so yes chesapeake has drilled it but it is for the benefit of all the land owners to protect their corella have rights  growing so that you don't have to go down to a pool you can go through a pool and that you can also engage in fracking which where through that process you can control the direction and the way the oil and gas might flow in the important about that is that is not really a new technique as is bruce kramer in the ohio oil and gas association pointed out there mique is a page six and seven and page eleven there's always been that type of fracturing of a rock and so the amount that you can control is yes you have some degree of control over how the oil and gas flows but you do not have any significant the greater degree of control when it comes to the some cases well stimulation but i think whatever label you put on it the fracturing process is warner and sayin i don't know what all goes into the process but you can change the flow of the oil underground that's it doesn't really change how the change the direction of the flow what it does is it creates fractures in the rock and then it expands sort of expands those fractures to increase the ability and the porosity of the rock but but that type of activity sort of the fracturing the rock and injecting the water those types of things were done even with the vertical well so there's nothing really unique about that aspect of it and you have other decisions  n the coastal oil decision from texas that talks about whether that activity the fracking if you will constitutes a physical invasion and says it does not in brief we are on i'd like to also address the second point why this is not a physical invasion now really it's the chance the b p oil decision in this case this well is about a mile and a half below the surface and the ohio supreme court in chance said that you're subsurface property rights are not the same as your surface property rights and when things occur that far down just like a plane flying overhead does not constitute trespass neither does activity far below the surface wouldn't matter if the activities are below the surface site or cause and that use has to be at least in this case separate from the oil and gas interest because as we talk about in the context of the traditional taking it is not a taking in that respect and i said my time is up we would ask the court to affirm the district that no taking has occurred in this case morning your honesty may please the court in mcgrane or on behalf of the aptly to speak exploration as judge guy noted my client has an additional grounds for affirming the dismissal below that chesapeake was not a state actor in any way as you noted the luger case on which play is primarily belie is a case that has been limited by this court expressly to only those circumstances involving prejudgment attachment and prejudgment execution this court has stated on multiple occasions that does not apply outside of those contacts in addition luger factually is different because in that case there was some activity by a state actor to the property that was alleged to have been taken here all of the activities that the appellant's allege chesapeake engaged in were activities that chesapeake engaged in on its own chesapeake was to want to drill the wells here chesapeake was the one to engage in the hydraulic fracturing and just because the lawn to extract the minerals the state didn't participate in any of those activities at all it was all done on behalf of chesapeake for all of the courage of rightful owners in that pool separate private right the third that's correct they have not alleged any sort of tort liability on behalf of chesapeake or any breach of contract or any other type of allegations against chesapeake in this case the only allegations that they direction you want to go into and then capture that oil through the horizontal drilling and mark correct about that almost and what happens is you east surface location where we do have the rights to be on that property and you go down about a mile and a half and then you can drill out five thousand six thousand these are now going up to fifteen thousand feet out two different locations and what happens is you you fill that with water and sand in various proppants that pop open the rock and allow the gas to flow but you don't have the ability to necessarily control where those fractures go it's the cracks in the rock that you lose control of you can control the wellbore in the direction of the wellbore but you don't have the ability to control the the fractures and that's why it's important to understand the corella to nature of the oil and gas here it's because of that inability to control where the fractures go you don't know where the oil and gas is going to thing come from so you could be up to your neighbor property line but you're the fractures in the flow of gas can come from that neighboring property and that's why when you have a pool as the chief here found there was a pool you have a corella to write for every member in that pool to take their fair share and that's why this is not taking it's actually enhanced in their right to receive property because otherwise under their theory we'd have to be so far away from their property that it would never get developed they'd never get paid in using corroborative right to take their fair share how is that fair share determined so in under the statute the chief makes a determination on the factors necessary to provide plaintiffs have the opportunity to if they disagree with that amount then the opportunity to appeal that to then to the oil and gas commission they didn't raise that at the body they then had an opportunity to appeal that decision to the court of common pleas which could determine whether the chief set their amount appropriately they didn't avail themselves of that opportunity and so they passed on and so it is at this point that the chief's decision was an your honor judge moore with respect to your issue regarding compensation we refer this court to the horn case the chicago railway case and the ohio revised coach up to one sixty three dealing with the mandatory appropriations that you judge merit with respect to the horizontal drilling and the drug fracturing that is a relatively new process in ohio didn't begin until about two thousand and ten with the advent of horizontal drilling combined follows the point of least resistance which is the bore hole that they've drilled under the plane is property and then it returns it to the well that on adjacent property or defendant the chesapeake takes control with respect to the one nine hundred eighty three the defendant chesapeake did work in concert with the state division of oil and gas resources management because the defendant just made apply to the chief for the right to invade the of the state act we are relying upon their actions being fairly attributable to the state because they apply to the division chief defendants simmers for the right to drill beneath the property inject millions of gallons of water sand and chemicals to fracture the shale beneath plains property to release the oil gas and natural gas the goods and then to remove them to extract them if those are property rights protests secured by the fourteenth amendment which we believe then there was a violation of those property rights and we referred this case this court to the case of city of norwood versus orany which was cited by the kit court with approval in the cambridge case decided in october of two thousand and eighteen where the supreme court of ohio stated a very high regard for property rights stating that those property rights are so their fundamental and original rights that exist prior to the formation of government itself also we were for this court to the case of mecca mirror society of written and dealing with the pertinent rights also cited in the cambridge case in the concurring opinion so we believe that the there was state action by the defendant chesapeake and because it took upon itself to apply for the right to invade and take place this property thank you your hon