January 2012 - Parks & Recreation - 23

Corporation v. Huffman, 705 S.E.2d 806;
2010 W. Va. LEXIS 122 (November 3,
2010), the West Virginia Department of
Environmental Protection (DEP) refused
to issue five oil and natural gas well drilling permits in Chief Logan State Park.
The circuit court, however, ordered the
DEP Office of Oil and Gas to issue the requested permits to allow development of
wells in Chief Logan State Park by Cabot
Oil & Gas Corporation (Cabot) under its
lease of mineral rights with Lawson Heirs,
Inc.
The Lawson Heirs, Inc. owned substantial land holdings in present-day Logan
County, West Virginia. In 1960, the Lawson Heirs and the Logan Civic Association began negotiations about forming a
West Virginia state park in Logan County.
On November 18, 1960, the Lawson Heirs
conveyed 3,271 acres of surface land and
coal to the Logan Civic Association for
$90,000. In the deed, the Lawson Heirs
explicitly reserved the property's oil and
gas rights as well as the ability to drill
wells for the extraction and production
of these resources. The deed also recognized the property was intended to be
used as a West Virginia state park. Furthermore, the deed specified the manner
in which the Lawson Heirs would exercise
their oil and gas rights and the manner
in which such wells would be developed.
Following this initial conveyance, the
Logan Civic Association conveyed the
entire parcel to the State of West Virginia to be managed first as Chief Logan
Recreation Area and later as Chief Logan State Park. In 1961, the West Virginia
Legislature passed W. Va. Code § 20-4-3
which described " the purpose of a state
park and recreation system " as follows:
Promote conservation by preserving
and protecting natural areas of unique
or exceptional scenic, scientific, cultural, archaeological or historic
significance, and to provide outdoor
recreational opportunities for the citizens of this state and its visitors.
In accomplishing such purposes the
director of the DNR shall, insofar as is
practical, maintain in their natural condition lands that are acquired for and
designated as state parks, and shall not
permit public hunting, the exploitation

	

of the minerals or harvesting of timber
thereon for commercial purposes.
(Emphasis added by Court).

In 1995, the West Virginia Legislature
re-codified this language at W. Va. Code
§ 20-5-2. The version of this statute in effect at the time Cabot requested issuance
of the five well permits provided, in pertinent part:
The Director of the Division of Natural
Resources may not permit public hunting, except as otherwise provided in
this section, the exploitation of minerals or the harvesting of timber for
commercial purposes in any state park.
(Emphasis added by Court).

As contemplated in the 1960 deed, the
Lawson Heirs ultimately exercised their
reserved oil and gas rights and leased
these rights to Cabot. On November 21,
2007, Cabot filed five well work permit
applications to drill wells to develop the
oil and gas reserves underneath Chief
Logan State Park.
On June 17, 2009, the circuit court ordered the Office of Oil and Gas to issue the permits requested by Cabot. In
reaching this decision, the circuit court
concluded " [t]he DEP [Department of
Environmental Protection] exceeded its
statutory authority and erred as a matter
of law by relying upon the DNR statute to
deny the well work permit applications. "
While the DNR statute expressly prohibited " the exploitation of minerals for commercial purposes in any state park, " in
the opinion of the circuit court, this DNR
statute " clearly does not apply to minerals
not owned by the state. "
To apply it otherwise would deprive the
mineral owners of their private property
rights and would be blatantly unconstitutional. By drafting specific legislation
to preclude the Director of the DNR
from permitting the exploitation of minerals for commercial purposes in any
state park, the legislature likely intended
to reserve unto itself the ability to decide when state owned minerals could
be produced or sold.

As a result, the circuit court found
the state legislature had not intended to
" bar any and all exploitation of minerals in state parks whether state-owned or
privately-owned. "

The interpretation of W. Va. Code § 205-2(b)(8) applied by the DEP, would
result in the taking of the valuable
property rights reserved by the Lawson Heirs, and the lease rights granted
to Cabot. Such an interpretation would
run afoul of multiple provisions of the
Constitution of West Virginia...
The DEP permit denial would constitute an inverse condemnation or
regulatory taking since it clearly would
prohibit the development of the oil and
gas estate and would take away substantial private property rights which were
previously recognized by the State,
when it obtained title to the property
which became Chief Logan State Park.

In the opinion of the circuit court, upholding DEP's interpretation of the law
would also violate the terms of the 1960
deed by " impairing the obligation of the
deeds and property rights reserved by
the Lawson Heirs, and leased to Cabot. "
DNR and the other defendants (i.e., DEP
Office of Oil and Gas, the Sierra Club,
and Friends of Blackwater) appealed to
the state supreme court.

Deed as Contract
On appeal, the issue before the state
supreme court was, therefore whether
" the statutory provision prohibiting the
DNR from authorizing mineral exploitation within West Virginia state parks preclude the issuance of the well permits for
which Cabot has applied. " In the opinion of the state supreme court, the DNR
statutory prohibition against mineral exploitation in state parks would not legally
preclude the requested permits because
this " this statutory language was enacted
after the 1960 deed conveying the subject property was executed. As a result,
the court found these statutes could not
be " applied to retroactively modify the
parties' written agreement memorialized
in their deed, " i.e., the " agreement of the
Lawson Heirs and the Logan Civic Association vis-a-vis the oil and gas rights underlying the property conveyed therein "
in 1960.
As noted by the state supreme court,
" the 1960 deed is a contract " and " like any
other written agreement, are the repository of the contract. " Accordingly, the court's

w w w . N R P A . O R G    J A N U A R Y 2 0 1 2    Parks

& Recreation	

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January 2012 - Parks & Recreation

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