Colorado oil and gas representatives Thursday hailed a federal court’s dismissal of a case challenging the state’s forced-pooling law as a win for private property rights and the public good. But the community organization that sued said it might appeal.
In a decision released Wednesday, Federal Judge R. Brooke Jackson dismissed the case by the Wildgrass Oil and Gas Committee, formed by members of the Wildgrass Homeowners Association in Broomfield. The homeowners argued that the practice of “forced pooling” by oil and gas companies is unconstitutional.
The practice allows a company to drill oil or gas in an area even if all the mineral rights owners don’t agree. Colorado used to let a company drill if just one of the owners consented.
Under legislation passed in 2019 to revamp oil and gas rules, a company now must get the consent of at least 45% of the mineral owners before it can move ahead.
“We respect Judge Jackson so much. We just disagree with his decision,” said Joe Salazar, an attorney and executive director of Colorado Rising who represents the Broomfield homeowners in the lawsuit. “We’re weighing our options. We might appeal.”
The Wildgrass group sued after challenging a decision by the Colorado Oil and Gas Conservation Commission in 2019 to allow Extraction Oil and Gas to proceed even though not all the owners wanted their minerals drilled. Members of the group said forced pooling violates their First Amendment right of freedom of association and their constitutional right to due process because it amounts to the taking of private property for private use.
The lawsuit named the Colorado Oil and Gas Conservation Commission and Gov. Jared Polis.
Jackson abstained from deciding the homeowners’ challenge of the state commission’s jurisdiction. He invoked an exemption meant to protect state administrative processes from “undue federal influence.”
Regarding other claims, Jackson said the homeowners hadn’t established that their First Amendment rights were violated. He said previous court decisions found that similar oil and gas regulations served the public interest and protected a state’s economy.
“We are pleased with the District Court’s decisive ruling on behalf of the state, as it affirms both existing law as well as the private property rights of Coloradans,” Lynn Granger, executive director of the American Petroleum Institute-Colorado, said in an email.
Dan Haley, CEO and president of the Colorado Oil and Gas Association, said in a statement that pooling serves “a public purpose by curbing resource waste while also protecting the correlative rights of property owners, ensuring that those property owners receive a fair return.”
But Salazar of Colorado Rising, an environmental group that has advocated for stronger oil and gas regulations, said he disagreed with Jackson’s decision that state courts, not federal, are the appropriate venue to decide the lawsuit’s claims.
“Federal constitutional law is the province of federal courts,” Salazar said.
He added that the Colorado Constitution prohibits the state from allowing the taking of private property for private use.
“The state is forcing people to give up their private property to a private corporation even when they don’t want to,” Salazar said.