Ohio Supreme Court Sides with Injection Well Owner

YOUNGSTOWN, Ohio – After six years of legal wrangling, AWMS Water Solutions LLC will finally get its day in court.

The Ohio Supreme Court on Wednesday ruled 6 to 1 to overturn a decision made in March 2019 by the 11th District Court of Appeals that upheld a state order to shutter a Class II injection well owned by AWMS.

The high court’s ruling sends the case back to the 11th District for trial, said Steve Kilper, vice president of Howland-based AWMS.

“This has been going on for six years now,” he said. “It’s been a long time, but it’s nice that we’ll finally get our day in court.”

No trial date has been set to hear the case yet.

AWMS, a division of Avalon Holdings Corp., received permits in 2013 to drill two injection wells along state Route 169 in Weathersfield Township. The wells were completed and began commercial operations the following year.

Injection wells are used to store contaminated wastewater generated from drilling and hydraulic fracturing operations used to produce oil and gas. However, a series of earthquakes in 2011 – one of which registered 4.0 in magnitude — was linked to an injection well in Youngstown, and the state shut the well down.

In July 2014, small tremors measuring a magnitude of 1.7 and 2.1 were detected near AWMS #2 well, the deeper of the two injection wells. The oil and gas division ordered the operations suspended in August until the company submitted a comprehensive plan that addressed the issues.

AWMS submitted a plan to ODNR. However, the Oil and Gas Division found that the plan was “generic and inadequate,” according to court documents.

According to court papers, the state justified the continued shut down of the well was because the AWMS site was located near a “previously unknown earthquake fault.”

Kilper said the second, shallower well is also shut down, since it’s not economically feasible to operate the site with just the smaller well in production.

Four years ago, AWMS filed a petition for writ of mandamus in the 11th District, alleging the suspension order interfered with AWMS’ property rights and that it constituted a “total taking” of the site.

In March 2019, the 11th District Court ruled that the Oil and Gas Division’s “suspension order is neither unfair nor arbitrary,” according to court documents. And, the court denied the company’s petition for writ of mandamus, court papers say.

That decision led to AWMS’ appeal to the Ohio Supreme Court in April 2019.

AWMS stipulated in court papers that the company has lost more than $20.5 million since the well was shut down.

In the 48-page Supreme Court opinion, justices concluded that there is a “genuine issue of material fact” as to whether the state’s order to shut down the well deprived AWMS of “all economically beneficial use” of its property and remanded the case to the 11th District.

Copyright 2021 The Business Journal, Youngstown, Ohio.