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July 13th, 2015
The Ohio Supreme Court seems poised to start to clean up the muddled application of the Ohio Dormant Mineral Act. The ODMA has provided a mechanism to permit Ohio surface owners who do not own the minerals underlying their property to reclaim those minerals if the owner(s) of those minerals have not taken steps to use or claim those minerals from abandonment. Two of the original ideas behind the statutory scheme were to permit the reasonable extraction and production of mineral rights which had long been forgotten and to clear up ownership issues when the owners of long forgotten mineral rights. One of my prior blogs, “Reclaiming Severed Oil and Gas Rights” touched on the issue and the importance of speaking with a mineral rights attorney.
Ohio’s ODMA has been the subject of considerable litigation and appeals. As you can imagine, the Courts of Common Pleas and the Appellate Districts serving Eastern Ohio have been quite busy with this issue. Some of the questions surrounding the ODMA relate to the fact that two different statutory schemes have been enacted. One version of the statute was passed in 1989. Many Courts have held that this version of the act was “self-executing." That means that no effort or action was necessary by the surface owner to reclaim the severed minerals. If a mineral owner had not used the minerals or engaged in any type of “savings event” related to the minerals over a 20 year window, then the mineral rights automatically vested with the surface owner. The earliest that such vestings could occur was March of 1992. The first statute specifically set March of 1969 to March of 1989 as the first 20 year window. The General Assembly added a three year savings window, until March 1992, to permit mineral owners to further protect their interest.
In 2006, the law was amended and provided notice provisions designed to further protect and facilitate the ability of mineral owners to prevent abandonment of their rights. Surface owners seeking abandonment are now required to go through notice procedures which may include sending certified mailings to identifiable mineral owners and/or submitting legal notices for publication in local newspapers when such individuals cannot be reasonably located or found.
Multiple questions have arisen between the two acts. While the United States Supreme Court found an Indiana statute very similar to the 1989 act to be Constitutional under the Federal Constitution, the Ohio Supreme Court faces the question of whether the 1989 act, without requiring notice to mineral owners, meets the requirements of the Ohio Constitution. After the enactment of the 2006 version of the act, does the 1989 act still apply to minerals which could have been deemed abandoned prior to 2006? Is a lease agreement a “title transaction” that qualifies as a “savings event"? Is there one 20 year winded, 1969-1989, under the 1989 Act or is there a revolving 20 year window after each alleged “savings event”?
In Dodd v. Croskey, 2015-Ohio-2362, the Ohio Supreme Court began the process of sorting out some of these open questions. In that case, dealing solely with the 2006 version of the act, the Court held that filing a claim to preserve minerals, filed in response to a notice of abandonment by a surface owner, is sufficient to prevent an abandonment of minerals even if a “savings event” had not occurred in the prior 20 years. This decision seems to me to be a fairly straightforward ruling that has very little controversy under the 2006 version of the law. The more controversial cases will deal with the interplay between the 1989 Act and the 2006 version of the Act. Dodd v. Croskey was just the first in several cases which are expected to clear up the ODMA picture in Ohio, other cases for decisions include, Chesapeake v. Buell, Corbin v. Chesapeake, LLC, Walker v. Noon, Eisenbarth v. Reiser, and Farnsworth v. Burkhart. Stay tuned here as additional decisions come down from the Court.
