Steptoe & Johnson: 3rd Circuit Upholds Private Property Rights

Steptoe & Johnson: 3rd Circuit Upholds Private Property Rights

By Russell L. Schetroma

In Minard Run Oil Company, et al v. United States Forest Service, et al Nos. 10-265 and 10-2332 the US Court of Appeals for the 3rd Circuit faced an appeal of a courageous opinion by US District Judge Sean J. McLaughlin preliminarily enjoining efforts of the US Forest Service to impose policies that would have virtually terminated any meaningful rights of the owners of oil and gas underlying the Allegheny National Forest to develop their properties.  The actions of the Forest Service in the case are remarkable. 


The Forest Service, the "Forest Service Employees for Environmental Ethics," the Sierra Club and the "Allegheny Defense Project" became parties to what this writer can only conclude to have been a very friendly "lawsuit" that was "settled" by the Forest Service and the other parties agreeing to impose burdens on the oil and gas industry operating within the forest that were simply not supported by any clear legal authority.  The Forest Service even agreed to pay nearly $20,000 in public money toward the legal fees of its "antigonists" as part of the "settlement."     

Minard Run, the Pennsylvania Independent Oil and Gas Association, the Allegheny Forest Alliance and the County of Warren, Pennsylvania, filed the action to obtain an injunction against the Forest Service implementing its planned regulatory regime allegedly required by the "settlement."   The District Court, after exhaustive review and supported by a most thorough opinion,  (See, 2009 WL 4927785) granted the requested preliminary injunction. 

The district and circuit court opinions in this case  provide absolutely clear statements of essential principles that set enforceable limits upon environmental regulatory regimes that impact private property rights.  The district court did a masterful demonstration of a proper balancing of equities between private rights and alleged public concerns.  The Circuit reviewed that balancing effort in great detail and approved it without qualification.  The Circuit also clearly ruled that equitable relief is available to targets of public agency action where the "potential economic loss is so great as to threaten the existence of the movant's business...."  The Circuit also expressly recognized that under Pennsylvania law "the mineral estate is the dominant estate and entails the right to use of as much surface land as reasonably necessary to extract the minerals" and that "[a]lthough the mineral owner must show "due regard" to the rights of the surface owner, the mineral owner need not obtain consent or approval before entering land to mine for minerals."  

In a prior litigation with the Forest Service, Minard Run I, 1980 U.S. Dist. LEXIS 9570, Minard Run set a standard for private / public cooperation in the forest that was actually incorporated by the Forest Service in its 1984 "ANF Handbook" as part of its "standard operating procedures."   The industry can be grateful to Minard Run for again successfully vindicating the rights of mineral owners and operators.   It is interesting to note that on its website (, Minard Run Oil Company reports that [it] "is the oldest family owned and operated independent oil producer having drilled and produced oil and gas in three centuries (1875-present)."

Read the entire opinion of the 3rd Circuit by clicking HERE.

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