The bankruptcy trustee for Norse Energy Corp. USA (“Norse”) has sued the New York State Department of Environment Conservation (“DEC”), the New York State Department of Health (“DOH”), its commissioners, and New York Governor Andrew Cuomo over the state’s failure to complete its review of fracking in the state. Norse holds leases over thousands of acres of oil and gas rights in New York State, but earlier this year filed for bankruptcy and is currently liquidating its assets. The company blames the state’s delays in issuing a final decision on whether to allow fracking to move forward, saying the delays “obliterated” the value of its oil and gas investments and assets.
As part of its lawsuit, Norse is seeking mandamus relief against the state officials and has asked the court to force the state to complete its review. The company claims state officials have violated the timing directives in the State Environmental Quality Review Act (“SEQRA”) and the Energy Law, as well as violated the rule of reason under common law. The State of New York undertook its review of fracking in 2008, but former Governor David Paterson issued an executive order that mandated further environmental review. That order was continued by Governor Cuomo. The state missed the deadline mandated by that executive order but later published a first draft of its review in July 2011 in which it declared that fracking could be done safely with strong regulatory controls. The state conducted further review and issued a second draft report in September 2011. The public comment period on this review closed in January 2012, but the state has not issued a final report. In September 2012, DEC Commissioner Joseph Martens asked the DOH to conduct a further health study on fracking, the results of which still have not been issued to the public. Norse claims the violation of the timing directives in the relevant statutes and the protracted delays in releasing the report are grounds for mandamus directing the issuance of a final report.
The directive to the DOH in particular was the impetus for Norse’s lawsuit. Norse claims that in addition to violating the timing directives of SEQRA and the Energy Law, the DEC’s request for another study by the DOH is arbitrary, an abuse of discretion and is an unlawful abrogation of a lead agency’s responsibilities. Norse says the DEC is the lead agency for the fracking review but that it is abrogating those responsibilities to a mere interested agency by letting the DOH control when the final review is released. Norse also seeks prohibition relief against Governor Cuomo over his interference with the fracking study. The company claims Cuomo has no jurisdiction at all to be involved in the review and has thus acted unlawfully. It seeks an order prohibiting the governor from interfering further with the review process and a declaration that he is an “interested agency,” thus opening all of his records related to the review process to the public.
The case is styled Mark S. Wallach, as Bankruptcy Trustee of Norse Energy Corp. USA, et al. v. The New York State Department of Environmental Conservation, et al. It is pending in the Supreme Court in Albany County.