Title: Chesapeake Exploration, LLC v. Oil & Gas Comm'n

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Chesapeake Exploration, L.L.C. v. Oil & Gas Comm., Slip Opinion No. 2013-Ohio-224.] 
 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2013-OHIO-224 
CHESAPEAKE EXPLORATION, L.L.C. v. OIL AND GAS COMMISSION ET AL. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as Chesapeake Exploration, L.L.C. v. Oil & Gas Comm.,  
Slip Opinion No. 2013-Ohio-224.] 
Oil and gas wells—Issuance of permit to drill not appealable—R.C. 1509.03, 
1509.03, and 1509.36—Writ of prohibition issued. 
(No. 2012-1207—Submitted January 9, 2013—Decided January 30, 2013.) 
IN PROHIBITION. 
____________________ 
 
Per Curiam. 
{¶ 1} This is an action for a writ of prohibition to prevent respondents, 
Ohio Oil and Gas Commission and three of its five members, from exercising 
jurisdiction in an appeal from the issuance by the chief of the Ohio Division of 
Oil and Gas Resources Management of a permit to relator, Chesapeake 
Exploration, L.L.C. (“Chesapeake”), to drill an oil and gas well, and to vacate the 
commission’s actions in the appeal.  Because the commission patently and 
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unambiguously lacks jurisdiction over the appeal from the chief’s issuance of the 
permit, we grant the writ. 
Facts 
{¶ 2} In 2004, Summitcrest, Inc. entered into an oil and gas lease with 
Mason Dixon, who assigned the lease to Burlington Resources.  A portion of 
Burlington’s lease interests was ultimately assigned to Chesapeake, which is an 
Oklahoma limited-liability company that is registered to do business in Ohio. 
{¶ 3} Chesapeake applied to the Ohio Division of Oil and Gas Resources 
Management for a permit under R.C. 1509.06 to drill an oil and gas well on the 
lease property.  In March 2012, the chief of the division issued a permit to 
Chesapeake to drill the wells.  Summitcrest appealed the chief’s issuance of the 
permit to the Oil and Gas Commission. 
{¶ 4} Under R.C. 1509.36, the chief of the division is the appellee in 
appeals from orders of the chief.  The division filed a motion to dismiss the appeal 
based on its claim that the issuance of permits to drill oil and gas wells did not 
constitute an order that was appealable to the commission.  Chesapeake 
intervened and joined in the division’s motion to dismiss. 
{¶ 5} On July 10, 2012, the commission denied the motion to dismiss, 
relying on former R.C. 1509.03(B) and its determination that “the statutory and 
regulatory provisions directly addressing the jurisdiction of the Oil & Gas 
Commission did not specifically preclude an appeal of the Chief’s issuance of a 
drilling permit to the Oil & Gas Commission.”  The three members who voted to 
deny the motion constituted a quorum of the commission, with the two remaining 
members recusing themselves.  
{¶ 6} On July 19, 2012, Chesapeake filed this action for a writ of 
prohibition to prevent respondents, the Oil and Gas Commission and the three 
commission members who denied the motion to dismiss the appeal, from 
exercising further jurisdiction in the appeal and to vacate any actions taken by 
January Term, 2013 
3 
 
them.  On July 23, the commission heard the appeal, and on August 8, the 
commission decided the merits of the appeal by affirming the issuance of the 
drilling permit to Chesapeake.  No party appealed the commission’s August 8 
order. 
{¶ 7} On August 31, respondents filed a motion to dismiss this 
prohibition case based on mootness, and on September 10, Chesapeake filed a 
memorandum in opposition.  Summitcrest filed a motion to intervene as an 
additional respondent, but it later withdrew the motion after the commission 
decided the merits of its appeal on August 8.  We denied respondents’ motion to 
dismiss, granted an alternative writ, and issued a schedule for the presentation of 
evidence and briefs.  133 Ohio St.3d 1408, 2012-Ohio-4650, 975 N.E.2d 1027.  
We later denied respondents’ motion for leave to argue lack of standing in their 
merit brief.  133 Ohio St.3d 1480, 2012-Ohio-5246, 978 N.E,2d 205.1   
{¶ 8} This cause is now before the court for our consideration of the 
merits. 
Analysis 
{¶ 9} To be entitled to the requested writ of prohibition, Chesapeake 
must establish that (1) the commission and its members are about to or have 
exercised quasi-judicial power, (2) the exercise of that power is unauthorized by 
law, and (3) denying the writ would result in injury for which no other adequate 
remedy exists in the ordinary course of law.  State ex rel. Bell v. Pfeiffer, 131 
Ohio St.3d 114, 2012-Ohio-54, 961 N.E.2d 181, ¶ 18 and 23; State ex rel. Miller 
v. Warren Cty. Bd. of Elections, 130 Ohio St.3d 24, 2011-Ohio-4623, 955 N.E.2d 
379, ¶ 12. 
                                          
 
1.  Chesapeake has standing to raise its prohibition claim.  An entity has standing in a prohibition 
case if it “is either a party to the proceeding sought to be prohibited * * * or demonstrates an 
injury in fact to a legally protected interest.”  State ex rel. Matasy v. Morley, 25 Ohio St.3d 22, 23, 
494 N.E.2d 1146 (1986).  Chesapeake was a party to the appeal it sought to prohibit, and it was 
forced to expend time and money to defend against the appeal that it claims the commission 
lacked jurisdiction to decide. 
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{¶ 10} The commission and its named members exercised quasi-judicial 
power by accepting jurisdiction over Summitcrest’s appeal from the division 
chief’s issuance of an oil and gas permit to Chesapeake.  The appeal provided in 
R.C. 1509.36 requires a hearing resembling a judicial trial.  See Miller at ¶ 13. 
{¶ 11} For the remaining requirements, “[i]f an inferior tribunal patently 
and unambiguously lacks jurisdiction, prohibition will lie to prevent any future 
unauthorized exercise of jurisdiction and to correct the results of prior 
jurisdictionally unauthorized actions.”  State ex rel. Baker v. State Personnel Bd. 
of Review, 85 Ohio St.3d 640, 642, 710 N.E.2d 706 (1999).  “Where jurisdiction 
is patently and unambiguously lacking, relators need not establish the lack of an 
adequate remedy at law because the availability of alternate remedies like appeal 
would be immaterial.”  State ex rel. Sapp v. Franklin Cty. Court of Appeals, 118 
Ohio St.3d 368, 2008-Ohio-2637, 889 N.E.2d 500, ¶ 15. 
{¶ 12} The dispositive issue is thus whether the Oil and Gas Commission 
patently and unambiguously lacked jurisdiction over Summitcrest’s appeal. 
Patent and Unambiguous Lack of Jurisdiction 
{¶ 13} The General Assembly created the Oil and Gas Commission.  See 
R.C. 1509.35(A) (“There is hereby created an oil and gas commission consisting 
of five members appointed by the governor”).  Because the commission is a 
creation of state law, “its powers and duties extend only so far as the statutes grant 
authority, while being constrained by whatever limits the statutes impose.”  
Delaney v. Testa, 128 Ohio St.3d 248, 2011-Ohio-550, 943 N.E.2d 546, ¶ 20 
(office of county auditor); see also Cincinnati School Dist. Bd. of Edn. v. 
Hamilton Cty. Bd. of Revision, 87 Ohio St.3d 363, 367, 721 N.E.2d 40 (2000) 
(county board of revision); Morgan Cty. Budget Comm. v. Bd. of Tax Appeals, 
175 Ohio St. 225, 193 N.E.2d 145 (1963), paragraphs three and four of the 
syllabus (state board of tax appeals).  “When the General Assembly grants an 
administrative agency power to hear appeals, the statutory language determines 
January Term, 2013 
5 
 
the parameters of the agency’s jurisdiction.”  Cuyahoga Cty. Bd. of Cty. Commrs. 
v. Daroczy, 10th Dist. No. 08AP-123, 2008-Ohio-5564, ¶ 17. 
{¶ 14} Under R.C. 1509.36, “[a]ny person affected by an order by the 
chief of the division of oil and gas resources management may appeal to the oil 
and gas commission for an order vacating or modifying the order.”  For oil and 
gas wells, however, a permit to drill a new well, drill an existing well deeper, 
reopen a well, convert a well to any use other than its original purpose, or plug 
back a well to a different source of supply, including associated production 
operations, is not considered to be an order of the chief of the division.  R.C. 
1509.06(F) (“The issuance of a permit shall not be considered an order of the 
chief”).  Because these statutes relate to the same subject matter, they are 
considered in pari materia so as to give full effect to the provisions.  State ex rel. 
Waters v. Spaeth, 131 Ohio St.3d 55, 2012-Ohio-69, 960 N.E.2d 452, ¶ 11; State 
ex rel. Colvin v. Brunner, 120 Ohio St.3d 110, 2008-Ohio-5041, 896 N.E.2d 979, 
¶ 46. 
{¶ 15} Although R.C. 1509.36 generally confers appellate jurisdiction on 
the Oil and Gas Commission over appeals from orders of the chief of the Division 
of Oil and Gas Resources Management by persons adversely affected, R.C. 
1509.06(F) manifestly divests the commission of appellate jurisdiction over the 
chief’s decisions to issue permits for oil and gas wells.  See Rosen v. Celebrezze, 
117 Ohio St.3d 241, 2008-Ohio-853, 883 N.E.2d 420, ¶ 46 (“the mere fact that 
the Ohio court has basic statutory jurisdiction to determine custody matters in 
legal-separation and divorce cases * * * does not preclude a more specific statute 
* * * from patently and unambiguously divesting the court of such jurisdiction”); 
State ex rel. Sanquily v. Lucas Cty. Court of Common Pleas, 60 Ohio St.3d 78, 80, 
573 N.E.2d 606 (1991) (“We need not * * * refuse the writ in every case where 
‘basic statutory jurisdiction’ exists”).  That is, by the plain language of these 
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provisions, the chief’s issuance of a permit for an oil and gas well does not 
constitute an order of the chief and cannot be appealed to the commission. 
{¶ 16} The commission’s reliance on former R.C. 1509.03(B) does not 
warrant a different result.  Former R.C. 1509.03(B) provided: 
 
 
Any order issuing, denying, or modifying a permit or 
notices required to be made by the chief pursuant to this chapter 
shall be made in compliance with Chapter 119. of the Revised 
Code * * *.  Every order issuing, denying, or modifying a permit 
under this chapter and described as such shall be considered an 
adjudication order for purposes of Chapter 119. of the Revised 
Code. 
 
2011 Am.Sub.H.B. No. 153.  A version substantively the same was first enacted 
in 1982.  Am.H.B. No. 745, 139 Ohio Laws, Part II, 4374. 
{¶ 17} As Chesapeake cogently observes, former R.C. 1509.03(B) neither 
expanded the Oil and Gas Commission’s appellate jurisdiction under R.C. 
1509.36 nor  defined which orders of the chief of the Division of Oil and Gas 
Resources Management are appealable.  At most, former R.C. 1509.03(B) merely 
provided that decisions of the chief that are considered to be orders should 
comply with R.C. Chapter 119.  Construing these provisions in this manner does 
not render R.C. 1509.03(B) superfluous, because it would still apply to certain 
permits issued by the chief.  See R.C. 1509.21 (permit issued by chief to conduct 
secondary or additional mining operations), 1509.22 (permit issued by chief to 
inject brine or other waste substances into an underground formation), and 
1509.27 (permit issued by the chief for a mandatory pooling order). 
{¶ 18} Moreover, insofar as former R.C. 1509.03(B) could be found to 
conflict with R.C. 1509.06(F), the amendment to R.C. 1509.06(F) specifying that 
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7 
 
the issuance of a permit is not an order, which is the later enactment, prevails.  
2010 Sub.S.B. No. 165.  See Summerville v. Forest Park, 128 Ohio St.3d 221, 
2010-Ohio-6280, 943 N.E.2d 522, ¶ 26, quoting Davis v. State Personnel Bd. of 
Rev., 64 Ohio St.3d 102, 105, 413 N.E.2d 816 (1980) (“ ‘Utilizing the rules of 
statutory construction contained in R.C. 1.12, 1.51, and 1.52, a specific statute, 
enacted later in time than a preexisting general statute, will control where a 
conflict between the two arises’ ”). 
{¶ 19} Finally, although “statutes providing for appeals should be given a 
liberal interpretation in favor of appeal * * *, where jurisdiction is dependent 
upon a statutory grant, this court is without the authority to create jurisdiction 
when the statutory language does not.  That power resides in the General 
Assembly.”  Waltco Truck Equip. Co. v. Tallmadge Bd. of Zoning Appeals, 40 
Ohio St.3d 41, 42-43, 531 N.E.2d 685 (1988); see also State ex rel. Shisler v. 
Ohio Pub. Emps. Retirement Sys., 122 Ohio St.3d 148, 2009-Ohio-2522, 909 
N.E.2d 610, ¶ 25 (“there is no need to liberally construe statutes with unequivocal 
and definite meanings”). 
{¶ 20} Therefore, because the chief’s issuance of a permit to Chesapeake 
for an oil and gas well did not constitute an order of the chief, R.C. 1509.36 did 
not confer appellate jurisdiction on the Oil and Gas Commission to review the 
chief’s decision, and the commission patently and unambiguously lacks 
jurisdiction over Summitcrest’s appeal. 
Conclusion 
{¶ 21} Based on the foregoing, Chesapeake has established its entitlement 
to the requested extraordinary relief.  Because the pertinent facts are 
uncontroverted and Chesapeake’s right to relief is clear, we grant a writ of 
prohibition to prevent the Oil and Gas Commission from exercising further 
jurisdiction in Summitcrest’s appeal from the chief’s issuance of a permit to 
Chesapeake for the oil and gas well and to compel the commission to vacate its 
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decisions rendered in the appeal, including its August 8, 2012 decision on the 
merits. 
Writ granted. 
O’CONNOR, C.J., and O’DONNELL, KENNEDY, FRENCH, and O’NEILL, JJ., 
concur. 
PFEIFER and LANZINGER, JJ., dissent. 
____________________ 
PFEIFER, J., dissenting. 
{¶ 22} At the time of Summitcrest, Inc.’s appeal to the Oil and Gas 
Commission in this case, the commission did not patently and unambiguously 
lack jurisdiction.  R.C. 1509.36 provides, “Any person adversely affected by an 
order by the chief of the division of oil and gas resources management may appeal 
to the oil and gas commission for an order vacating or modifying the order.”  
Pursuant to former R.C. 1509.03(B), the issuance of a permit by the chief of the 
division constituted an order: 
 
Any order issuing, denying, or modifying a permit or 
notices required to be made by the chief pursuant to this chapter 
shall be made in compliance with Chapter 119. of the Revised 
Code * * *.  Every order issuing, denying, or modifying a permit 
under this chapter and described as such shall be considered an 
adjudication order for purposes of Chapter 119. of the Revised 
Code. 
 
2011 Am.Sub.H.B. No. 153 
{¶ 23} Thus, the statutes provided that any person adversely affected by 
an order of the chief of the Division of Oil and Gas Resources Management may 
appeal to the commission to vacate or modify the order.  Former R.C. 1509.03(B) 
January Term, 2013 
9 
 
provided that an order by the division that issues a permit is an adjudication order. 
These statutes, when read in pari materia, gave the commission jurisdiction over 
Summitcrest’s appeal. 
{¶ 24} The 2012 amendment to R.C. 1509.03(B)—“Division (B)(1) of 
this section does not apply to a permit issued under section 1509.06 of the 
Revised Code”—clears up any ambiguity regarding the interplay of R.C. 
1509.03(B) and 1509.06. 2012 Am.Sub.H.B. No. 315. But until that amendment, 
the commission did not unambiguously lack jurisdiction over appeals of the chief 
of the division’s granting of permits.  Accordingly, I dissent. 
____________________ 
LANZINGER, J., dissenting. 
{¶ 25} The amendment to R.C. 1509.03(B)(1) specifying that division 
(B)(1) “does not apply to a permit issued under section 1509.06 of the Revised 
Code,” 2012 Am.Sub.S.B. No. 315, did not become effective until September 10, 
2012.  The previous month, on August 8, the commission had decided the merits 
of the appeal by affirming the issuance of the drilling permit to Chesapeake and 
no party had appealed the commission’s August 8 order.  Because I do not believe 
that the commission patently and unambiguously lacked jurisdiction at the time 
that it acted, I respectfully dissent from the order granting the writ of prohibition. 
____________________ 
 
Vorys, Sater, Seymour & Pease, L.L.P., John K. Keller, Robert J. 
Krummen, and Daniel E. Shuey, for relator. 
 
Michael DeWine, Attorney General, and William J. Cole and Brandon C. 
Duck, Assistant Attorneys General, for respondents. 
________________________