Defendants Memorandum in Opposition to Plaintiffs Motion for Summary Judgment

Transcription

1 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 1 of 33 In the United States District Court for the District of New Mexico Mary L. Vermillion, et al., ) ) Plaintiffs, ) Case No. 1:13-cv CEG/GBW ) v. ) ) Mora County, et al., ) ) Defendants. ) ) Defendants Memorandum in Opposition to Plaintiffs Motion for Summary Judgment

2 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 2 of 33 TABLE OF CONTENTS I. INTRODUCTION...1 II. SUMMARY OF ARGUMENT...2 III. STANDARD OF REVIEW...3 IV. OBJECTIONS AND UNDISPUTED FACTS...3 A. Defendants Objections to Plaintiffs Undisputed Facts...3 B. Defendants Additional Undisputed Facts...5 V. ARGUMENT...6 A. Plaintiffs are not Entitled to Summary Judgment Because They have Failed to Satisfy Rule 56 s Requirements Plaintiffs have failed to establish that there is no genuine issue of material fact Plaintiffs evidence supporting their summary judgment motion is speculative...8 B. Plaintiffs Are Not Entitled to Summary Judgment on their Fourteenth Amendment Deprivation Claims Plaintiffs fail to establish any property deprivation Plaintiffs substantive due process claim should be rejected because a more specific constitutional provision exists to allow relief The Ordinance is substantially related to a legitimate government interest Plaintiffs cannot raise new issues not pleaded in their Complaint i

3 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 3 of 33 C. Plaintiffs First Amendment Claim is Not Ripe for Adjudication Balance of hardships weighs in favor of Defendants The Ordinance does not chill First Amendment activities D. The New Mexico Oil and Gas Act Does not Preempt the Mora County Ordinance The Court should abstain from deciding the preemption issue Plaintiffs preemption claim should be certified to the New Mexico Supreme Court Defendants possessed the authority to enact the Ordinance The Oil and Gas Act does not preempt the Mora County Ordinance The Ordinance provisions are severable VI. CONCLUSION ii

4 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 4 of 33 Table of Authorities Federal Statute 42 U.S.C. 300h(b)(2)...1 Federal Cases Action Apartment Ass n, Inc. v. Santa Monica Rent Control Opinion Bd., 509 F.3d 1020 (9th Cir. 2007) Automatic Radio Manufacturing, Co., Inc. v. Hazeldine Research, Inc., 339 U.S. 827 (1950)....9 Blythe v. Sohio Petroleum Corp., 271 F.2d 861 (10th Cir. 1959)...6 Burford v. Sun Oil Corp., 319 U.S. 315 (1943) Camigula v. City of Albuquerque, 448 F.3d 1214, 1222 (10th Cir. 2006)... 7, 13 Celotex Corp. v. Catrett, 477 U.S. 317 (1986)....3 Crider v. County of Boulder, 246 F.3d 1285 (10th Cir. 2001)...4 Doe v. Albuquerque, 667 F.3d 1111, (10th Cir. 2012)...3 Foley v. City of Las Vegas, 747 F.2d 1294 (9th Cir. 1984)...4 Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005) iii

5 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 5 of 33 Gallagher v. Clayton, 699 F.3d 1013, (8th Cir. 2012) Graham v. Connor, 490 U.S. 386 (1989)... 11, 12 Hutchinson v. Proxmire, 443 U.S. 111 (1979)...8 Kansas Judicial Review v. Stout, 519 F.3d 1107 (10th Cir. 2008)... 16, 17 Keystone Bituminous Coal Ass n v. DeBenedictus, 480 U.S. 470 (1987) Louisiana Power & Light v. Thibodaux, 360 U.S. 25 (1959) Messiah Baptist Church v. County of Jefferson, 859 F. 2d 820 (10th Cir. 1988) Packer Corp. v. Utah, 285 U.S. 105 (1932) Railroad Comm n of Texas v. Pullman, 312 U.S. 496 (1941) Rancho Lobo, Ltd. v. DeVargas, 303 F.3d 1195 (10th Cir. 2002)... 22, 23, 24 Ricci v. DeStefano, 557 U.S. 557 (2009)...3 Seamons v. Snow, 206 F.3d 1021 (10th Cir. 2000)...8 Seitel Geophysical, Inc. v. Greenhill Petroleum Corp., 1995 U.S. Dist. LEXIS (E.D. La. 1995)...6 iv

6 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 6 of 33 Stagman v. Ryan, 176 F.3d 986, (7th Cir. 1999)...8 Uhlrig v. Harder, 64 F.3d 567 (10th Cir. 1995) Washington v. Glucksberg, 521 U.S. 702 (1997)...9 Federal Rules Fed. R. Civ. P. 56(a)...3 Fed. R. Evid International Cases / Resolutions Case of the Yakye Axa Indigenous Community v. Paraguay 167, Complaint No , Judgment (June 17, 2005) San Mateo de Huachor Community v. Peru, 59, Report No. 69/04, OEA/Ser.L/V/II.122, Doc. 5, rev. 1 (2004) United Nations Resolution The human right to water and sanitation (A/res/64/292) (2010)... 14, 15 New Mexico Statutes NMSA 1978, (B) New Mexico Cases Bradbury & Stamm Const. Co. v Bureau of Revenue, 372 P.2d 808 (N.M. 1962) v

7 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 7 of 33 Duvall v. Stone, 213 P.2d 212 (N.M. 1949) Jones-Noland Drilling Co. v. Bixby, 282 P.2d 382 (N.M. 1929) Marbob Energy Corp. v. N.M. Oil Conservation Comm n, 206 P.3d 135 (N.M. 2009)...1 San Pedro Mining Corp. v. Bd. of County Comm ns of Santa Fe County, 909 P.2d 754 (Ct. App. 1995)... 21, 22, 23, 24 New Mexico Rules NMRA (A) New Mexico Register 24 N.M. Reg Cases From Other States Mutschler v. City of Phoenix, 129 P.3d 71 (Ariz. Ct. App., 2006) Stephens County v. Mid-Kansas Oil & Gas Co., 254 S.W. 290, 292 (Tex. 1923) Texas Co. v. Daugherty, 176 S.W. 717 (Tex. 1915) Wallach v. Town of Dryden, 16 N.E. 3d 1188 (N.Y. 2014)... 13, 14, 23, 24 vi

8 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 8 of 33 I. Introduction Oil and gas development leaves a wake of toxic pollution in water, air and land in every community where it occurs. These communities also suffer an array of secondary social problems: increased violent and property crime, increased traffic, increased substance abuse, increased domestic violence, and plummeting property values. After the oil boom goes bust, as it invariably will, communities are left with water that is so contaminated with carcinogens and toxic chemicals like benzene, polycyclic aromatic hydrocarbons, diesel range organics, radium, ethylbenzene, toluene and napthalene that it can never be used for any purpose, and certainly not as drinking water. Soils are often similarly damaged beyond repair. Despite the well documented impacts of oil and gas development on communities, Federal and state regulatory agencies have failed to increase regulation and indeed, have demonstrated a pattern of weaker enforcement. The Halliburton Loophole prohibits the United States Environmental Protection agency and states implementing the Safe Drinking Water Act from protecting underground sources of drinking water from hydraulic fracturing impacts. 42 U.S.C. 300h(b)(2). In New Mexico, state regulatory agencies are systematically weakening or removing safety protections that formerly applied to the oil and gas industry, such as removing incentives for closed loop oil and gas field waste systems and significantly increasing the concentrations of contaminants in waste oil or gas corporations may bury in a pit in the ground. See, 24 N.M. Reg Moreover, the state agency responsible for regulating oil and gas development has failed to levy a single civil penalty on an oil and gas corporation since See, Marbob Energy Corp. v. N.M. Oil Conservation Comm n, 206 P.3d 135 (N.M. 2009). 1

9 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 9 of 33 It is against this backdrop that the people of Mora County, through their elected representatives, decided that the only way to effectively protect their resources and health was to act on their own. The result is Ordinance , the Mora County Community Water Rights and Local Self-Government Ordinance ( Ordinance ). Doc This Ordinance not only serves to protect community resources and health, but also serves to assert the primacy of local decision making on issues that most intimately impact the community. It represents the paragon of democracy. The Plaintiffs in this case, unsatisfied with the oil and gas industry s already disproportionate influence on state and Federal decision-makers, have filed a Complaint seeking to extinguish Mora County s assertion of community democratic will. Irrespective of Plaintiffs motives, however, the arguments Plaintiffs advance in their Motion for Summary Judgment (Doc. 57) ( Motion ) and Memorandum in Support of Plaintiffs Motion for Summary Judgment (Doc. 57-1) ( Memorandum ) are without merit and should be rejected. II. Summary of Argument Plaintiffs Motion should be denied for four reasons. First, genuine issues of material fact exist in this case. The allegedly undisputed facts which Plaintiffs proffer in their Memorandum are not only objectionable and disputed, but in many cases are entirely speculative and inappropriate for summary judgment. Second, the Plaintiffs Fourteenth Amendment property deprivation claims are meritless because the Plaintiffs have failed to establish that they have any property that the Ordinance deprives them of, nor have they invoked the proper Constitutional provisions for the relief 2

10 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 10 of 33 sought. Moreover, the Ordinance is clearly substantially related to the legitimate government interest of protecting Mora County resources, health, and general welfare. Third, the Plaintiffs First Amendment claim is not ripe for adjudication. Finally, Plaintiffs argument that the Ordinance is preempted by the New Mexico Oil and Gas Act ( Oil and Gas Act ) is meritless. Under a county s police power and in the absence of either express or implied preemption, the Defendants clearly had the authority to pass the Ordinance. Further, nothing in the Oil and Gas Act prevents the Defendants or any county from exercising powers related to land use and general welfare traditionally reserved for local governments. III. Standard of Review Rule 56 provides that summary judgment is appropriate where: 1) there is no genuine dispute; 2) as to any material fact; and 3) the moving party is entitled to judgment. Fed. R. Civ. P. 56(a). A genuine issue of material fact exists when the record, viewed as a whole, could lead a trier of fact to find for the nonmoving party. Ricci v. DeStefano, 557 U.S. 557, 586 (2009). The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When applying this standard, "we view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party." Doe v. Albuquerque, 667 F.3d 1111, 1122 (10th Cir. 2012). IV. Objections and Undisputed Facts A. Defendants Objections to Plaintiffs Undisputed Facts. Defendants object to Plaintiffs facts at p. 2, 1, sentence 2 in the Memorandum, because Commissioner Garcia s personal reasons for voting against the Ordinance are irrelevant pursuant 3

11 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 11 of 33 to Federal Rule of Evidence 401. See also, Crider v. County of Boulder, 246 F.3d 1285 (10th Cir. 2001) (subjective intent of individual local legislators irrelevant to Fourteenth Amendment substantive due process claim against ordinance); Foley v. City of Las Vegas, 747 F.2d 1294, (9th Cir. 1984) (officials motives in adopting an ordinance irrelevant to a determination of the ordinance s constitutionality). Defendants object to Plaintiffs facts at Memorandum 1, pp. 2-3, 5, sentences 3, 5, and 6. Plaintiffs allegations that Yates Petroleum s failure to assign leases is due to the Ordinance is speculation. Defendants object to Plaintiffs facts at p. 3, 9. The facts alleged are irrelevant and therefore inadmissible. Fed. R. Evid The acts of third parties not before this Court have no bearing on whether the Defendants or the Ordinance impacted Plaintiffs First Amendment activities. Defendants object to Plaintiffs facts at p. 4, 11. Defendants dispute that the Ordinance has affected Plaintiff Independent Petroleum Association of New Mexico ( IAPNM s ) First Amendment activities. See, Section V.A, below. Defendants object to Plaintiffs facts at p. 4, 12. Defendants dispute that a corporation chose not to extend its lease rights to Ronald Miles mineral estate most likely because of the Ordinance. The corporation could just as likely have chosen not to extend its lease rights because Mr. Miles mineral estate contained no oil or gas resources. See, Section V.A, below. 1 All citations in this section are to Memorandum in Support of Plaintiffs Motion for Summary Judgment. 4

12 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 12 of 33 Defendants also object to Mr. Miles assertion because it is inadmissible hearsay under Federal Rule of Evidence 801(c). Defendants object to Plaintiffs facts at p. 4, 15. Defendants dispute that the only way Ms. Vermillion can exercise her rights in her oil and gas estate is by leasing the rights to a corporation. That assertion is pure speculation and conjecture. Ms. Vermillion has provided no explanation or evidence about how the ordinance prevents her from pooling resources with an unincorporated association of investors to exploit her mineral estate. Defendants object to Plaintiffs facts at p. 5, 19. Defendants dispute that the Ordinance prevents Plaintiffs JAY and Yates Ranch from exploring their mineral estates. The Ordinance plainly allows for oil and gas exploration activities that do not involve drilling a well. Doc at 3.2. Defendants have provided no explanation or evidence about why they cannot explore for hydrocarbon resources using methods other than drilling a well, particularly since they have admitted the first step in discovering a resource is through seismic surveys. B. Defendants Additional Undisputed Facts. Defendants offer the following undisputed facts in support of this Response. 1. None of the Plaintiffs have actual oil or gas resources present below land they own or lease. Plaintiffs Response to Defendants First Set of Discovery ( First Set of Discovery Responses ), Request for Admission 8, attached as Exhibit 1; Plaintiffs Response to Defendants Second Set of Discovery, Request for Admission 15, attached as Exhibit None of the Plaintiffs mineral estates, either owned or leased, contain actual oil, gas, or other hydrocarbon resources. See, Exhibits 1, 6. 5

13 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 13 of The Ordinance, 3.2, permits oil and gas exploration that does not involve drilling a well. Doc. 17-1, The first step in discovering oil and gas resources is conducting seismic surveys. First Set of Discovery Responses, Request for Admission 8, attached as Exhibit 2; see e.g, Blythe v. Sohio Petroleum Corp., 271 F.2d 861, 863 (10th Cir. 1959) (besides drilling a well, seismic exploration is the most useful and accurate method of identifying oil traps); Seitel Geophysical, Inc. v. Greenhill Petroleum Corp., 1995 U.S. Dist. LEXIS 17595, 1, n.1 (E.D. La. 1995) (through the use of seismic data, an oil company determines the mineral horizons most likely to produce by-products at a profit and therefore be developed). V. Argument A. Plaintiffs are not Entitled to Summary Judgment Because They have Failed to Satisfy Rule 56 s Requirements. As the movants, Plaintiffs bear the burden of proving there is no genuine issue of material fact. Further, Plaintiffs are required to satisfy all the other requirements of Rule 56 in order to prevail. Here, Plaintiffs have failed to satisfy Rule 56 s requirements and their Motion should be denied. 1. Plaintiffs have failed to establish that there is no genuine issue of material fact. As noted in Section IV.A, above, Plaintiffs have failed to show that undisputed facts exist which support their claims. Summary judgment should therefore be denied. All of the facts the Plaintiffs assert regarding the reasons for their failure to develop their respective mineral estates (Doc. 17, 64-67; Memorandum p. 4, 12, 15; p. 5 19) are both material and subject to a genuine dispute. These facts are material because they are a critical 6

14 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 14 of 33 element in the Plaintiffs Fourteenth Amendment property deprivation claim. In order to prevail on their property deprivation claim, Plaintiffs must show that 1) they have property and 2) that a governmental action, and not some other reason, deprived them of that property. Camigula v. City of Albuquerque, 448 F.3d 1214, 1222 (10th Cir. 2006); see also, Section V.B, below. Plaintiffs cannot demonstrate, by facts in the current record, that they have actual property that the Defendants have deprived them of due to passage of the Ordinance. 2 See, Exhibits 1, 6. Further, there is a genuine dispute over those material facts. If the Plaintiffs do not have any actual property of which they have been deprived, or deprivation is for a reason other than the County s Ordinance, a rational trier of fact would find for the nonmoving party, in this case, the Defendants. Thus, a genuine dispute over those facts exists. Likewise, Plaintiff IPANM s assertion that it has curtailed its First Amendment activities in Mora County, and the ostensible reasons for such curtailment, represents a genuine issue of material fact that is disputed. In Plaintiffs recitation of allegedly undisputed facts (Memorandum, p. 4, 11), and in an affidavit from IPANM executive director Karin Foster attached to the Plaintiffs Motion for Summary Judgment, Plaintiffs allege that the Ordinance curtailed and chilled IPANM First Amendment activities in Mora County. In her affidavit, Ms. Foster alleges that she was subject to verbal threats and intimidation during and after the time the County s Ordinance was being considered and adopted. Doc at 7-8, 21. However, Ms. Foster did not, and cannot, allege that those actions could be attributed to any individual Defendant or County authority. Thus, based on the evidence Plaintiffs present, the reason that 2 The absence of evidence indicating actual hydrocarbon resources is also relevant to whether Plaintiffs have standing to bring their claims. Defendants have addressed Plaintiffs lack of standing in their Motion to Dismiss and accompanying memorandum of law (Doc. 55 and 55-1). 7

15 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 15 of 33 IPANM has curtailed its First Amendment activities in Mora County are not because of any provision of the Ordinance, but rather because of acts by third parties, unaffiliated with Defendants, who are not before this Court. Significantly, Plaintiffs also concede that, individually and collectively, they have engaged in activities protected by the First Amendment in Mora County since the Ordinance was enacted. First Set of Discovery Responses, Request for Admission 7 and response to Interrogatory 8, attached as Exhibit 3. Defendants concede that Ms. Vermillion continues to attend county commission meetings dealing with oil and gas development and that IPANM continues to disseminate information about oil and gas within Mora County. Id. Given the evidence indicating that Plaintiffs First Amendment activities have not actually been impacted because of the Ordinance, a rational trier of fact could certainly find in favor of the Defendants with respect to Plaintiffs First Amendment claim based on the evidence in the record. Because Plaintiffs have failed to establish that there is no genuine issue of material fact, their Motion for Summary Judgment should be denied. 2. Plaintiffs evidence supporting their summary judgment motion is speculative. The record indicates that Plaintiffs allegations that the Ordinance is the reason for Plaintiffs alleged inability to lease their mineral estates to corporations is based entirely on speculation. Moreover, because the Plaintiffs deprivation claim hinges on the motivations of others for their failed leasing experiences, that claim is not amenable for summary disposition. Hutchinson v. Proxmire, 443 U.S. 111, 120 n. 9 (1979); Seamons v. Snow, 206 F.3d 1021, (10 th Cir. 2000). Further, mere speculation or conjecture regarding a fact is insufficient to satisfy a movant s burden of proof. Stagman v. Ryan, 176 F.3d 986, 1001 (7th Cir. 1999); see 8

16 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 16 of 33 also, Automatic Radio Manufacturing, Co., Inc. v. Hazeldine Research, Inc., 339 U.S. 827, 831 (1950) (overruled on other grounds) (affidavit in support of summary judgment based on information and belief does not comply with requirements of Rule 56(e)). Because the truth of these facts under the governing Constitutional provision would affect this case s outcome, the facts are material and disputed. Plaintiffs Motion should therefore be denied. B. Plaintiffs Are Not Entitled to Summary Judgment on their Fourteenth Amendment Deprivation Claims. Under limited circumstances, the due process clause of the Fourteenth Amendment has been used to give heightened protection to certain fundamental rights and liberties. Washington v. Glucksberg, 521 U.S. 702, 720 (1997) (citations omitted). The rights and liberties subject to heightened protection against government interference have been specifically enumerated and have included limited fundamental liberty interests such as the right to bodily integrity, the right to marry, the right to have children, the right to marital privacy, the right to abortion and the right to contraception. Id. (citations omitted). These substantive due process protections have been narrowly construed and expanded reluctantly because doing so removes the areas of protection from the sphere of public debate and legislative action. Id. In this case, Plaintiffs advance the radical theory that property is a fundamental right subject to heightened substantive due process protections. However, Plaintiffs arguments are meritless for three reasons. First, Plaintiffs have provided no demonstration that the Ordinance has deprived them of any cognizable property. Second, Plaintiffs should have, but did not, pursue their alleged property deprivation claims under the specific property takings provisions of the Fifth Amendment, rather than the more generalized substantive due process clause of the 9

17 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 17 of 33 Fourteenth Amendment. Finally, Plaintiffs provide no support for their argument that property deprivation requires special protection under the Fourteenth Amendment. 1. Plaintiffs fail to establish any property deprivation. The foundation of the Plaintiffs substantive due process claim is that the Ordinance arbitrarily deprives them of their property. Doc. 17 at 64-67; Memorandum at According to Plaintiffs, the property of which the Ordinance deprives each of them is the mineral estate. Doc. 17 at Under New Mexico law, the mineral estate is an interest in real estate. Jones-Noland Drilling Co. v. Bixby, 282 P.2d 382, 383 (N.M. 1929). This real estate interest consists of the minerals in place. Id. A Texas court has described oil and gas in place as minerals and realty, subject to ownership, severability and sale while embedded in the sands or rocks beneath the earth s surface, in like manner and to the same extent as coal or any other solid mineral. Stephens County v. Mid-Kansas Oil & Gas Co., 254 S.W. 290, 292 (Tex. 1923). Additionally, in Duvall v. Stone, the New Mexico Supreme Court noted that a royalty interest in oil and gas is an interest in real estate, and therefore an interest in the oil and gas in or under the surface land. Id., 213 P.2d 212, 216 (N.M. 1949). Finally, in Texas Co. v. Daugherty, the Texas Supreme Court held that oil and gas in place, as real property, can be conveyed when it exists below the land s surface, but when no actual oil and gas exists, any conveyance is void. Id., 176 S.W. 717, (Tex. 1915). Thus, when actual resources are in the ground, they constitute a property right. Id. at In IPANM s case, the property deprivation claim is advanced by its representative member. First Set of Discovery, response to Interrogatory 3, attached as Exhibit 4. 10

18 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 18 of 33 The above cited cases serve to demonstrate that any property right in oil and gas is premised on the actual existence of the mineral, just as ownership in surface real estate is premised on the actual existence of land. Moreover, this view is supported by the New Mexico statute governing property taxation. That statutory provision, while excluding oil and gas estates, subjects mineral estates to property taxation only when there are minerals known to be beneath the surface estate. NMSA 1978, (B). In this case, it is undisputed that none of the Plaintiffs have shown that there are actual mineral resources under their property, or under the state land property, that the Plaintiffs have leased. See, Exhibits 1, 6. Because Plaintiffs have failed to establish the existence of any real estate to which they would have rights, their alleged property rights are meaningless. Plaintiffs are effectively asserting that the County has deprived them of property that may not even exist, and whose existence at this time is entirely speculative. Plaintiffs have failed to establish that the Ordinance has deprived them of any property, and summary judgment on this claim should be denied. 2. Plaintiffs substantive due process claim should be rejected because a more specific constitutional provision exists to allow relief. In addition to failing to satisfy the merits of their substantive due process claim, as demonstrated in Section V.B.3, below, this Court should reject Plaintiffs substantive due process claim prior to reaching the merits because a more specific Constitutional ground for relief the Fifth Amendment is available. In Graham v. Connor, the Supreme Court analyzed an excessive force claim brought by the plaintiffs in that case under 1983 and substantive due process. Id., 490 U.S. 386,

19 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 19 of 33 (1989). The Court began its analysis by noting that 1983 was not a source of rights itself, but instead a method of enforcing federal rights conferred elsewhere. Id. at Because 1983 is not an independent source of rights, a plaintiff must identify a specific Constitutional provision that is the basis for his complaint, in that case, the Fourth Amendment. Id. at 395. Moreover, the Court specifically instructed that when the Constitution has an explicit textual source that protects the litigant from the harm complained of, courts should analyze a complaint under the standard of that source, rather than the more generalized guide of substantive due process. Id. The Ninth Circuit explained the application of Graham in the context of a substantive due process claim for property deprivation. In Action Apartment Ass n, Inc. v. Santa Monica Rent Control Opinion Bd., the court stated that substantive due process claims are appropriate only when the Fifth Amendment does not provide a preclusive cause of action. Id., 509 F.3d 1020, 1026 (9th Cir. 2007). The court further explained that the Fifth Amendment was intended to provide for compensation in the otherwise proper infringement on property rights, while substantive due process was appropriate only where property deprivation could not be remedied by the Fifth Amendment. Id., n.1 (citations omitted). In this case, the Fifth Amendment is clearly the more specific source of protection for Plaintiffs alleged claim of property deprivation. Further, it is clear that if Plaintiffs actually have property that that the Defendants have taken, the Fifth Amendment provides a clear remedy: just compensation. Assuming for the sake of argument that Plaintiffs were deprived of property because of the Ordinance s provisions, the Plaintiffs could have, but did not, allege a taking under the Fifth Amendment and request compensation for their deprivation. Therefore, 12

20 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 20 of 33 the Fifth Amendment provides a remedy for the Plaintiffs alleged deprivations, and their substantive due process claim is precluded. 3. The Ordinance is substantially related to a legitimate government interest. Finally, even if a determination on the merits of Plaintiffs substantive due process property deprivation claim is warranted, the Plaintiffs have failed to establish that the Defendants acted arbitrarily in enacting the Ordinance. Summary judgment on Plaintiffs substantive due process claim should therefore be denied. Under limited circumstances, property deprivations can violate substantive due process, but only if they are extreme. Camigula v. City of Albuquerque, 448 F.3d at In order to establish a property deprivation claim under substantive due process the plaintiff must demonstrate a degree of outrageousness and a magnitude of potential or actual harm that is truly conscience shocking." Id. at (citing Uhlrig v. Harder, 64 F.3d 567, 574 (10th Cir. 1995)). This is a high level of outrageousness. Id. Under most circumstances, such as in this case, a land use ordinance that affects only property interests will be upheld if it bears a substantial relationship to the general welfare. Messiah Baptist Church v. County of Jefferson, 859 F. 2d 820, 824 (10th Cir. 1988). 4 In this case, Plaintiffs argue that no governmental interest is sufficient to justify banning all oil and gas development within the County. Memorandum at 18. However, Plaintiffs argument ignores the fact that a town in New York recently properly banned entirely oil and gas development within its boundaries. Wallach v. Town of Dryden, 16 N.E. 3d 1188, The Messiah Baptist decision clearly establishes that property rights are not fundamental and therefore not subject to the higher standard of strict scrutiny. 859 F. 2d at 820. Moreover, Plaintiffs fail to cite a single case holding that property rights are fundamental and whose deprivation is subject to a higher level of scrutiny. 13

21 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 21 of 33 (N.Y. 2014). Plaintiffs argument likewise fails to acknowledge the well established authority that local governments may ban noxious and nuisance activities or activities that threaten public health. See, e.g., Keystone Bituminous Coal Ass n v. DeBenedictus, 480 U.S. 470, , n. 22 (1987) (citations omitted) ( [l]ong ago it was recognized that all property in this country is held under the implied obligation that the owner s use of it shall not be injurious to the community. ); Mutschler v. City of Phoenix, 129 P.3d 71, 77 (Ariz. Ct. App., 2006) (upholding an ordinance banning live sex act businesses based on public health concerns). During the Ordinance adoption process, the County heard ample evidence that oil and gas exploration and development routinely results in widespread toxic contamination and public health impacts. See, e.g., Defendants Initial Disclosures; Daniels, Kate, The Other Side of the Coin: An Analysis of Socioeconomic Impacts of Oil and Gas Development on Small Communities at 19-24, presented to the Commission on November 10, 2012, attached as Exhibit 5. The Ordinance s language reflects the concerns raised and demonstrates the Commission s purpose in enacting the Ordinance was primarily to protect public health and County resources from noxious oil and gas development activities. Ordinance, 2.1. Finally, the County s policy protecting natural resources and public health is consistent with human rights norms. See, e.g, San Mateo de Huachor Community v. Peru at 59, Report No. 69/04, OEA/Ser.L/V/II.122, Doc. 5, rev. 1 (2004) (Inter-American Commission on Human Rights issuing precautionary measures protecting community from toxic waste dump); Case of the Yakye Axa Indigenous Community v. Paraguay at 167, Complaint No , Judgment (Merits, Reparations and Costs) (June 17, 2005) (linking right to health in American Convention on Human Rights to a healthy environment); United Nations General Assembly, Resolution 64/292, The human right to water 14

22 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 22 of 33 and sanitation (A/res/64/292) (2010). Far from being shocking or outrageous, the Ordinance reflects a rational policy choice substantially related to protecting the general welfare of County residents. Further, Plaintiffs argument - that prohibiting corporations, rather than human beings, from developing oil and gas within the County - is necessarily arbitrary, fails. The County s distinction is based on the simple fact that to date, only corporations have sought to develop oil and gas resources within Mora County and only corporations have actually done so. Thus, the County s decision reflects a rational policy choice. See, Packer Corp. v. Utah, 285 U.S. 105, 110 (1932) ( It is a reasonable ground of classification that the State has power to legislate with respect to persons in certain situations and not with respect to those in a different one. ). Moreover, because the Ordinance is substantially related to the legitimate government interest in protecting public health and natural resources, the alleged discriminatory behavior does not invalidate the otherwise proper Ordinance. See, Gallagher v. Clayton, 699 F.3d 1013, (8th Cir. 2012) (court refused to scrutinize singling out of smokers for public smoking ban where public health provided rational support for the regulation). Because the Ordinance is substantially related to the legitimate government interest in protecting public health and natural resources from toxic pollution, the Plaintiffs summary judgment motion should be denied. 4. Plaintiffs cannot raise new issues not pleaded in their Complaint. Plaintiffs also argue that the Ordinance arbitrarily destroys Plaintiffs other constitutionally guaranteed rights, and then proceeds to list several Ordinance provisions that allegedly infringe the Plaintiffs rights. Memorandum at However, Plaintiffs fail entirely to explain how the Ordinance allegedly infringes on these rights, or how Plaintiffs are 15

23 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 23 of 33 allegedly specifically affected. Moreover, aside from their allegation that the Ordinance infringes on their First Amendment activities, the Plaintiffs failed to raise any of the other allegations in their Complaint and those allegations should therefore be disregarded. Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 346 (2005) (Complaint must give defendants fair notice of plaintiff s claims and the grounds upon which they rest). Similarly, Plaintiffs argue that no governmental interest exists that is so great to justify the allegedly invidious discrimination against corporations in the Ordinance. Memorandum at To the extent that Plaintiffs argument implies an Equal Protection claim, any attempt to raise such a claim is inappropriate because Plaintiffs failed to include such a claim in their Complaint. Dura Pharmaceuticals Inc. v. Broudo, 544 U.S. at 346; see also, Doc. 17. C. Plaintiffs First Amendment Claim is Not Ripe for Adjudication. The Plaintiffs claim that the Ordinance violates their rights under the First Amendment to the United States Constitution. Doc at In addition to failing to establish standing to maintain their First Amendment Claim, see Doc at 13-17, summary judgment on Plaintiffs First Amendment claim should be denied because it is unripe for judicial determination. The Tenth Circuit test for whether a First Amendment claim is ripe considers three factors: 1) the hardship to the parties of withholding judicial review; 2) the chilling effect that the law may have on First Amendment liberties; and 3) the fitness of the controversy for judicial review. Kansas Judicial Review v. Stout, 519 F.3d 1107, 1116 (10th Cir. 2008). In this case, the Plaintiffs First Amendment claim fails to meet the first two factors and summary judgment should therefore be denied. 16

24 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 24 of Balance of hardships weighs in favor of Defendants. Under Kansas Judicial Review, a court should inquire whether the challenged law creates a direct and immediate dilemma for the parties. Kansas Judicial Review v. Stout, 519 F. 3d at The Plaintiffs have identified no hardship they would face in the absence of immediate judicial review. Plaintiffs First Amendment claim, for the most part, consists of vague allegations that the ordinance chills First Amendment activities. See, Doc. 17 at However, IPANM executive director Karin Foster and Plaintiff Mary Vermillion both concede that they continue to engage in allegedly prohibited First Amendment activities and fail to point to any adverse impacts attributable to Defendants. See, Exhibit 3. By their own admission, Plaintiffs are not suffering any hardship as a result of the Ordinance. Despite Plaintiffs admission that they continue to engage in First Amendment activities in Mora County, Plaintiffs attempt to salvage their First Amendment claim by making two further allegations. First, in her affidavit attached to the Plaintiffs Motion for Summary Judgment, Ms. Foster alleges that she was subject to verbal threats and intimidation during and after the time the County s Ordinance was being considered and adopted. Doc at 7-8, 21. However, Ms. Foster did not, and cannot, allege that those actions could be attributed to any individual Defendant or County authority. This Court should categorically reject Plaintiffs efforts to assign the acts of unidentified third parties to the Defendants or the challenged Ordinance. In sum, while Ms. Foster s experiences are unfortunate, they are also completely irrelevant to this matter. Second, Ms. Foster alleges that Ordinance Section 5.5 divests Yates Petroleum Corporation from its right to initiate a lawsuit on its own behalf because it is a corporation 17

25 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 25 of 33 seeking to engage in activities prohibited by the Ordinance, and therefore Yates Petroleum must rely on IPANM to file a lawsuit to redress Yates Petroleum s grievances. Doc at 25. This allegation, however, contradicts Plaintiffs own position. In its First Amended Complaint, Plaintiffs Jay Land, Ltd. and Yates Ranch Property, LLP, allege that they are corporations seeking to develop their minerals estates and are therefore corporations seeking to engage in activities the Ordinance prohibits. Doc. 17 at 94. Plaintiffs allegation that IPANM members First Amendment activities are chilled is undermined by the fact that Jay Land and Yates Ranch Property are plaintiffs in this lawsuit. Thus, Plaintiffs have not identified any direct or immediate dilemma the Ordinance creates. In contrast, the Defendants would sustain certain hardship if a judicial decision is rendered immediately. Given the evidence that Plaintiffs have not suffered any harm to their First Amendment activities due to the Ordinance, a judicial decision at this time would unnecessarily stifle further exercises in democracy like the Ordinance by Defendants and other communities. Hence, the balance of hardships weighs in favor of determining that the Plaintiffs First Amendment claim is not ripe for judicial review. 2. The Ordinance does not chill First Amendment activities. None of the Plaintiffs allegations indicate that the Ordinance is chilling any First Amendment activities. Indeed, the Plaintiffs are actively engaging in First Amendment activities by virtue of their petitioning this Court for redress of their grievances and have suffered no consequences pursuant to the Ordinance. Additionally, as noted above, Plaintiffs conceded that they continue to engage in First Amendment activities in Mora County since the Ordinance was 18

26 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 26 of 33 enacted. Thus, there is no evidence that the Ordinance has chilled any First Amendment activities and Plaintiffs First Amendment claim is therefore not ripe for determination. D. The New Mexico Oil and Gas Act Does not Preempt the Mora County Ordinance. The Plaintiffs assert that the New Mexico Oil and Gas Act preempts Mora County s Ordinance. Doc at This argument should be rejected and summary judgment denied. 1. The Court should abstain from deciding the preemption issue. Generally, a Federal court should abstain from hearing a case (not just a state claim) when a state law claim will decide the case. Railroad Comm n of Texas v. Pullman, 312 U.S. 496, (1941). This abstention doctrine is premised on avoiding Federal intervention in state policies, comity toward state courts, and judicial efficiency. Id Additionally, in Louisiana Power & Light v. Thibodaux, the Supreme Court held that where a claim involved the relationship between a local government and state government or involved a previously undetermined or uncertain issue of state law, the Federal court should stay proceedings pending a determination of state law. Id., 360 U.S. 25, 28 (1959). Finally, in Burford v. Sun Oil Corp., the Supreme Court declined to exercise its jurisdiction where state law claims involving regulation of oil and gas predominated the complaint, because the regulation of oil and gas was a quintessential state law issue that implicated complex considerations of state policy, with which state courts should grapple. Id., 319 U.S. 315, 332 (1943). In this case, no New Mexico court has decided whether the Oil and Gas Act s provisions preempt local land use or other ordinances, and none of the cases that Plaintiffs cite address this question. Moreover, as in Burford v. Sun Oil Corp., the issues in this case involve the complex 19

27 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 27 of 33 relationship between state and local governments, considerations of state mineral development policy, and the extent to which New Mexico counties may exercise their authority to protect their residents health and resources. Finally, the Plaintiffs state law preemption claim could determine the entirety of this case. Therefore, this Court should abstain from deciding the state law preemption claim, and more properly, should abstain from deciding the Plaintiffs entire case. 2. Plaintiffs preemption claim should be certified to the New Mexico Supreme Court. Alternatively, if abstention is not warranted in this case, the Plaintiffs state law preemption claim should be certified to the New Mexico Supreme Court. The New Mexico Rules of Appellate Procedure provide that Federal courts may certify questions of law to the New Mexico Supreme Court if the question is one for which the answer is not provided by a controlling New Mexico Supreme Court or Court of Appeals opinion or a New Mexico constitutional provision or statute. Rule (A) NMRA. In this case, the question of whether the Oil and Gas Act preempts local land use or other ordinances has never been addressed by a New Mexico court. Further, the statutory language and New Mexico constitutional provisions that Plaintiffs cite are not dispositive of the preemption question they require interpretation in the context of the current Mora County Ordinance. Therefore, if abstention is not warranted in this case, the Plaintiffs preemption claim should be certified to the New Mexico Supreme Court for determination. 3. Defendants possessed the authority to enact the Ordinance. Plaintiffs argue that the County lacks authority to enact the Ordinance because it is inconsistent with New Mexico law and the Ordinance allegedly deprives Plaintiffs of rights 20

28 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 28 of 33 under the New Mexico and United States constitutions. To the extent this argument implicates the right of Mora County to enact a community rights ordinance and the interaction of the Ordinance with the United States and New Mexico constitutions, Defendants have addressed those issues in their memorandum accompanying their Motion for Summary Judgment and those arguments are incorporated by reference herein. To the extent that Plaintiffs argue that Defendants do not have authority over land use within County boundaries, New Mexico law clearly establishes this authority as a fundamental aspect of county power. San Pedro Mining Corp. v. Bd. of County Comm ns of Santa Fe County, 909 P.2d 754, 760 (Ct. App. 1995). Thus, Defendants plainly have the authority to enact land use ordinances and Plaintiffs argument fails. 4. The Oil and Gas Act does not preempt the Mora County Ordinance. If this Court determines that a decision on the merits of the Plaintiffs preemption claim is warranted, the Plaintiffs summary judgment motion should be denied as a matter of law. The Defendants Ordinance is neither expressly nor impliedly preempted under New Mexico law. A local government is presumed to retain the power to exercise its normal authority over an activity, so the legislature s intent to preempt local control must be clearly stated if express preemption is to result. San Pedro Mining Corp. v. Bd. of County Comm ns of Santa Fe County, 909 P.2d at 758. In this case, there is no language in the Act that expressly preempts the Ordinance, and the Plaintiffs admit that one exists. Therefore, the Ordinance is not expressly preempted. However, preemption may also be implied. A county ordinance may be preempted if it conflicts with a state statute or regulation, or if the statute demonstrates intent to occupy the 21

29 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 29 of 33 entire field it purports to govern. Id. at 759. In San Pedro Mining Corp., the New Mexico Court of Appeals determined that the New Mexico Mining Act ( Mining Act ) did not preempt a Santa Fe County ordinance restricting hard rock mining, even though both the Mining Act and the county ordinance regulated the same activity and contained significant regulatory overlap. Id. However, the court found: [s]ignificantly, neither the [Mining] Act nor the regulations contain any mention of development issues with which local governments are traditionally concerned, such as traffic congestion, increased noise, possible nuisances created by blasting or fugitive dust, compatibility of the mining use with the use made of surrounding lands, appropriate distribution of land use and development, and the effect of the mining activity on surrounding property values. Id. Thus, the court determined that the Mining Act left room for concurrent jurisdiction, with the county regulating traditional county concerns, including issues of offsite safety and land use compatibility. Id. at 760. Likewise, in Rancho Lobo, Ltd. v. DeVargas, the Tenth Circuit concluded that the New Mexico Forest Conservation Act ( Forest Act ) did not preempt a Rio Arriba County ordinance regulating, and in certain cases prohibiting, timber harvesting in that county. Id., 303 F.3d 1195, 1206 (10th Cir. 2002). The Tenth Circuit adopted the court s reasoning in San Pedro Mining Corp., in finding that although the Forest Act and its regulations comprehensively regulated logging, it did not address the kinds of issues with which local governments were traditionally concerned, including timber harvest impacts on water quality and availability, local employment, timber harvest impacts on adjacent lands and soil, and land use compatibility. Id. at The county s proper exercise of its authority included prohibiting logging altogether under certain circumstances. Id. at

30 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 30 of 33 While neither San Pedro Mining Corp. nor Rancho Lobo specifically dealt with a complete ban on a particular state regulated activity, both courts reasoning parallels that of the New York Court of Appeals in Wallach v. Town of Dryden. In that case, the court of appeals upheld a complete ban on oil and gas exploration, extraction and storage within the town of Dryden s boundaries. Wallach v. Town of Dryden, 16 N.E. 3d at In reaching its holding, the New York Court of Appeals analyzed the New York statute governing oil and gas development, and found that while it contained language regulating oil and gas extraction, regulating was different than banning. Because the county ordinance governed where oil and gas should be developed and not the details of how it should be developed, the state oil and gas law therefore did not preempt the town s ban. Id. at The court found that determining where an activity should be located is a land use decision within a municipality s traditional authority. Id. at In this case, the Plaintiffs contend that the Oil and Gas Act s provisions granting the New Mexico Oil Conservation Commission the authority to promulgate regulations protecting public health and the environment and operations safety preempt the Ordinance. Doc at 24. However, none of the statutory provisions the Plaintiffs cite (and the Act contains no such provisions) touch on land use issues clearly within the County s traditional authority. Additionally, the Ordinance s plain language demonstrates that it was enacted for reasons consistent with traditional county authority. In the Ordinance s preamble, the County states that the purpose of the ordinance is to protect County residents quality of life and resources such as clean air, water and land. Ordinance , 3. Further, the Ordinance is intended to protect ecosystems within the County. Id. at 4-5. The Ordinance s purpose of protecting 23

31 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 31 of 33 water, public health and safety, and community lifestyle is reiterated in Section 1.2, Purpose. Id. at 1.2. These purposes are expanded further in Section 4, which allows for protection of water generally ( 4.1), protects water resources for agriculture ( 4.2), encourages sustainable development of local renewable energy resources ( 4.4) and protects local culture ( 4.7). Under the reasoning of San Pedro Mining Corp., Rancho Lobo, and Wallach, these purposes are those which counties traditionally have authority over, and which allow for concurrent jurisdiction with the New Mexico Oil and Gas Act. The Plaintiffs state law preemption claim should therefore be rejected. 5. The Ordinance provisions are severable. Using New Mexico s severability test, the Ordinance provisions are clearly severable. See, Bradbury & Stamm Const. Co. v. Bureau of Revenue, 372 P.2d 808, 811 (N.M. 1962). The Ordinance has two main purposes: asserting community rights and banning oil and gas development. If the community rights provisions are overturned, the provisions banning oil and gas development remain unaffected and vice versa. The Plaintiffs argument is without merit. VI. Conclusion For all the above-cited reasons, the Plaintiffs Motion for Summary Judgment should be denied. Respectfully submitted this 15 th day of December,

32 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 32 of 33 /s/ Eric Jantz Eric Jantz Staff Attorney New Mexico Environmental Law Center 1405 Luisa Street, Ste. 5 Santa Fe, New Mexico ejantz@nmelc.org /s/ Daniel E. Brannen, Jr. Daniel E. Brannen Jr. Brannen Law LLC 9 Glorieta Road, Santa Fe NM dbrannen@brannenlawllc.com /s/ Thomas Alan Linzey Thomas Alan Linzey Community Environmental Legal Defense Fund P.O. Box 360 Mercersburg, Pennsylvania (717) (c) 25

33 Case 1:13-cv CG-GBW Document 67 Filed 12/15/14 Page 33 of 33 CERTIFICATE OF SERVICE I hereby certify that on December 15, 2014, I filed the foregoing electronically through the CM/ECF system, which caused the following parties or counsel to be served by electronic means, as more fully reflected on the Notice of Electronic Filing: Andrew J. Cloutier Hinkle, Hensley, Shanor & Martin LLP 400 Penn Plaza, Suite 700 Roswell, New Mexico Telephone: (575) Facsimile: (575) drew@hinklelawfirm.com Steven J. Lechner Jaimie N. Cavanaugh Mountain States Legal Foundation 2596 South Lewis Way Lakewood, Colorado Telephone: (303) Facsimile: (303) lechner@mountainstateslegal.com jcavanaugh@mountainstateslegal.com By: /s/ Eric Jantz 26

34 Case 1:13-cv CG-GBW Document 67-1 Filed 12/15/14 Page 1 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO MARY L. VERMILLION, et al., ) ) Plaintiffs, ) CaseNo.1:13-cv CEG/GBW ) ~ ) ) MORA COUNTY, NEW MEXICO, et ai., ) ) Defendants. ) PLAINTIFFS' RESPONSE TO DEFENDANTS' FIRST SET OF DISCOVERY REQUESTS Pursuant to the Federal Rilles ofcivil Procedure, Plaintiffs in the above captioned case hereby answer Defendants' First Set ofdiscovery Requests as follows. GENERAL OBJECTIONS 1. Plaintiffs object to these requests for discovery to the extent that they seek information or documents that are within the possession, custody, and/or control ofdefendants or are equally available to Defendants and Plaintiffs. 2. Plaintiffs object to these requests for discovery to the extent that they seek infonnation or documents that are protected from disclosure by the attorney-client privilege, the attorney work-product doctrine, and/or any other recognized privilege. This objection extends to any information or documents withheld and to any information or documents produced inadvertently or by mistake. To the extent that Plaintiffs may provide to Defendants any privileged information or documents, there is no intent to thereby waive any such privilege, should Defendants determine to utilize the privileged information or documents. Finally, the

35 Case 1:13-cv CG-GBW Document 67-1 Filed 12/15/14 Page 2 of 3 With this said and without waiving and objections, Plaintiffs admit that since enactment of the subject ordinance, they have, either individually and/or collectively, engaged in activity protected by the First Amendment within Mora County. For example, PlaintiffMary L. Vermillion regularly attends public meetings held by the Mora County Board ofcounty Commissioners and often participates during the time for public comments at such meetings. PlaintiffIPANM manages a website ( where it publishes news updates and announcements. The website is publicly accessible and can be viewed by anyone with an internet connection, including anyone in Mora County. See Smith v. Plati, 258 F.3d 1167, 1177 (10th Cir. 2001) (holding that publishing a website is an activity protected by the First Amendment). 8. Plaintiffs do not know ifthere are recoverable reserves ofoil, natural gas, or other hydrocarbons within their real property in Mora County, within the real property with Mora County ofmembers ofthe Independent Petroleum Association ofnew Mexico, or within the areas within Mora County leased by plaintiffs or IPANM members. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object to this request as ambiguous, irrelevant, and not reasonably calculated to lead to the discovery of admissible evidence. Without waiving the foregoing objections, Plaintiffs note that the term "recoverab.le reserves" is ambiguous. See e,g., BLACK' S LAW DICTIONARY (9th ed. 2009) (defining "recoverable" as "[c]apable ofbeing recovered"); Williams and Meyer, Manual ofoi! and Gas Terms, (8th ed.1991) (defining reserves as "[t]he unproduced but recoverable oil and/or gas in place in a formation which has beenproven by production) (emphasis added); see also id. (explaining difficulty in determining reserves because ofassumptions in rock characteristic, the 8

36 Case 1:13-cv CG-GBW Document 67-1 Filed 12/15/14 Page 3 of 3 thickness ofthe deposit, the amount ofarea a well may drain, etc). In short, no one knows what might be recovered until a well is drilled: The first step in an oil and gas operation, both offshore and onshore, is to collect and interpret geological and geophysical infonnation to detennine ifthe area in question contains subterranean structures which constitute potential traps for accumulations ofoil or gas. Such G & G infonnation is generally obtained through general and detailed seismic surveys. The basic technique for making such surveys is the same offshore as onshore. Based upon the results ofsuch seismic surveys and other infonnation, geologists and geophysicists prepare maps ofthe areas in question which reflect their interpretation ofsuch infonnation and, hopefully, identify structures which constitute potential traps for accumulations of oil or gas. However, the only way to determine whether a postulated structure contains hydrocarbons is to drill a well. Therefore, the next step in an oil and gas operation, both onshore and offshore, is to drill exploratory or "wildcat" wells to penetrate the postulated structures to detennine ifthey contain oil or gas in commercial quantities. Only about one in 8 to 12 wildcat wells drilled, whether onshore or offshore, results in a commercial discovery. Gates Rubber Co. & Subsidiaries v. Comm'r ofinternal Revenue, 74 T.C. 1456, 1460 (l980) ajf'd sub nom. Gates Rubber Co., & Subsidiaries v. CLR., 694 F.2d 648 (loth Cir. 1982) (emphasis added). 9. It is possible for corporations to explore for and identify recoverable reserves of oil, natural gas, or other hydrocarbons without violating the subject ordinance. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object to this request as ambiguous, irrelevant, and not reasonably calculated to lead to discoverable infonnation. See Plaintiffs' Response to Request for Admission No.8. Without waiving the foregoing objections, Plaintiffs admit that corporations can explore for and identify recoverable reserves ofoil, natural gas, or other hydrocarbons in other states, without violating the subject ordinance. 10. Plaintiffs have not, either individually or collectively, pursued or exhausted all available state remedies for injuries allegedly caused by the subject ordinance. 9

37 Case 1:13-cv CG-GBW Document 67-2 Filed 12/15/14 Page 1 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO MARY L. VERMILLION, et al., ) ) Plaintiffs, ) CaseNo.1:13-cv CEG/GBW ) ~ ) ) MORA COUNTY, NEW MEXICO, et ai., ) ) Defendants. ) PLAINTIFFS' RESPONSE TO DEFENDANTS' FIRST SET OF DISCOVERY REQUESTS Pursuant to the Federal Rilles ofcivil Procedure, Plaintiffs in the above captioned case hereby answer Defendants' First Set ofdiscovery Requests as follows. GENERAL OBJECTIONS 1. Plaintiffs object to these requests for discovery to the extent that they seek information or documents that are within the possession, custody, and/or control ofdefendants or are equally available to Defendants and Plaintiffs. 2. Plaintiffs object to these requests for discovery to the extent that they seek infonnation or documents that are protected from disclosure by the attorney-client privilege, the attorney work-product doctrine, and/or any other recognized privilege. This objection extends to any information or documents withheld and to any information or documents produced inadvertently or by mistake. To the extent that Plaintiffs may provide to Defendants any privileged information or documents, there is no intent to thereby waive any such privilege, should Defendants determine to utilize the privileged information or documents. Finally, the

38 Case 1:13-cv CG-GBW Document 67-2 Filed 12/15/14 Page 2 of 3 With this said and without waiving and objections, Plaintiffs admit that since enactment of the subject ordinance, they have, either individually and/or collectively, engaged in activity protected by the First Amendment within Mora County. For example, PlaintiffMary L. Vermillion regularly attends public meetings held by the Mora County Board ofcounty Commissioners and often participates during the time for public comments at such meetings. PlaintiffIPANM manages a website ( where it publishes news updates and announcements. The website is publicly accessible and can be viewed by anyone with an internet connection, including anyone in Mora County. See Smith v. Plati, 258 F.3d 1167, 1177 (10th Cir. 2001) (holding that publishing a website is an activity protected by the First Amendment). 8. Plaintiffs do not know ifthere are recoverable reserves ofoil, natural gas, or other hydrocarbons within their real property in Mora County, within the real property with Mora County ofmembers ofthe Independent Petroleum Association ofnew Mexico, or within the areas within Mora County leased by plaintiffs or IPANM members. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object to this request as ambiguous, irrelevant, and not reasonably calculated to lead to the discovery of admissible evidence. Without waiving the foregoing objections, Plaintiffs note that the term "recoverab.le reserves" is ambiguous. See e,g., BLACK' S LAW DICTIONARY (9th ed. 2009) (defining "recoverable" as "[c]apable ofbeing recovered"); Williams and Meyer, Manual ofoi! and Gas Terms, (8th ed.1991) (defining reserves as "[t]he unproduced but recoverable oil and/or gas in place in a formation which has beenproven by production) (emphasis added); see also id. (explaining difficulty in determining reserves because ofassumptions in rock characteristic, the 8

39 Case 1:13-cv CG-GBW Document 67-2 Filed 12/15/14 Page 3 of 3 thickness ofthe deposit, the amount ofarea a well may drain, etc). In short, no one knows what might be recovered until a well is drilled: The first step in an oil and gas operation, both offshore and onshore, is to collect and interpret geological and geophysical infonnation to detennine ifthe area in question contains subterranean structures which constitute potential traps for accumulations ofoil or gas. Such G & G infonnation is generally obtained through general and detailed seismic surveys. The basic technique for making such surveys is the same offshore as onshore. Based upon the results ofsuch seismic surveys and other infonnation, geologists and geophysicists prepare maps ofthe areas in question which reflect their interpretation ofsuch infonnation and, hopefully, identify structures which constitute potential traps for accumulations of oil or gas. However, the only way to determine whether a postulated structure contains hydrocarbons is to drill a well. Therefore, the next step in an oil and gas operation, both onshore and offshore, is to drill exploratory or "wildcat" wells to penetrate the postulated structures to detennine ifthey contain oil or gas in commercial quantities. Only about one in 8 to 12 wildcat wells drilled, whether onshore or offshore, results in a commercial discovery. Gates Rubber Co. & Subsidiaries v. Comm'r ofinternal Revenue, 74 T.C. 1456, 1460 (l980) ajf'd sub nom. Gates Rubber Co., & Subsidiaries v. CLR., 694 F.2d 648 (loth Cir. 1982) (emphasis added). 9. It is possible for corporations to explore for and identify recoverable reserves of oil, natural gas, or other hydrocarbons without violating the subject ordinance. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object to this request as ambiguous, irrelevant, and not reasonably calculated to lead to discoverable infonnation. See Plaintiffs' Response to Request for Admission No.8. Without waiving the foregoing objections, Plaintiffs admit that corporations can explore for and identify recoverable reserves ofoil, natural gas, or other hydrocarbons in other states, without violating the subject ordinance. 10. Plaintiffs have not, either individually or collectively, pursued or exhausted all available state remedies for injuries allegedly caused by the subject ordinance. 9

40 Case 1:13-cv CG-GBW Document 67-3 Filed 12/15/14 Page 1 of 5 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO MARY L. VERMILLION, et al., ) ) Plaintiffs, ) CaseNo.1:13-cv CEG/GBW ) ~ ) ) MORA COUNTY, NEW MEXICO, et ai., ) ) Defendants. ) PLAINTIFFS' RESPONSE TO DEFENDANTS' FIRST SET OF DISCOVERY REQUESTS Pursuant to the Federal Rilles ofcivil Procedure, Plaintiffs in the above captioned case hereby answer Defendants' First Set ofdiscovery Requests as follows. GENERAL OBJECTIONS 1. Plaintiffs object to these requests for discovery to the extent that they seek information or documents that are within the possession, custody, and/or control ofdefendants or are equally available to Defendants and Plaintiffs. 2. Plaintiffs object to these requests for discovery to the extent that they seek infonnation or documents that are protected from disclosure by the attorney-client privilege, the attorney work-product doctrine, and/or any other recognized privilege. This objection extends to any information or documents withheld and to any information or documents produced inadvertently or by mistake. To the extent that Plaintiffs may provide to Defendants any privileged information or documents, there is no intent to thereby waive any such privilege, should Defendants determine to utilize the privileged information or documents. Finally, the

41 Case 1:13-cv CG-GBW Document 67-3 Filed 12/15/14 Page 2 of WL at *3 (N.D. Ill. 1995) (espousing that "hypothetical questions" are not within purview of[fed. R. Civ. P.] 36). 7. Since enactment ofthe subject ordinance, the plaintiffs, individually and/or collectively have engaged within Mora County in activity protected by the First Amendment of the U.S. Constitution. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object to this request as ambiguous, irrelevant, and not reasonably calculated to lead to discoverable information. Without waiving the foregoing objections, Plaintiffs note that activity protected by the First Amendment is expansive, and includes the free exercise ofreligion, the freedom of speech, the freedom ofthe press, the right to assembly, the right to associate and to not associate, and the right to petition for the redress ofgrievances. U.S. Const. amend. 1. Furthermore, the Supreme Court has held that because ofthe sensitive nature ofrights protected by the First Amendment, a party may challenge overly broad regulations without first risking prosecution under the regulations. Dombrowski v. Pfister, 380 U.S. 479, 486 (1965) ("Because ofthe sensitive nature ofconstitutionally protected expression, we have not required that all ofthose subject to overbroad regulations risk prosecution to test their rights. For free expression-of transcendentvalueto all society, and notmerelyto those exercisingtheir rights-mightbethe loser." (internal citation omitted)); Board ofairport Comm'rs ofcity o/los Angeles v. Jewsfor Jesus, Inc., 482 U.S. 569, 574 (1987) ("Under the First Amendment overbreadth doctrine, an individual whose own speech or conduct may be prohibited is permitted to challenge a statute on its face because it also threatens others not before the court-those who desire to engage in legally protected expression but who may refrain from doing so rather than risk prosecution..." (internal quotation and citation omitted)). 7

42 Case 1:13-cv CG-GBW Document 67-3 Filed 12/15/14 Page 3 of 5 With this said and without waiving and objections, Plaintiffs admit that since enactment of the subject ordinance, they have, either individually and/or collectively, engaged in activity protected by the First Amendment within Mora County. For example, PlaintiffMary L. Vermillion regularly attends public meetings held by the Mora County Board ofcounty Commissioners and often participates during the time for public comments at such meetings. PlaintiffIPANM manages a website ( where it publishes news updates and announcements. The website is publicly accessible and can be viewed by anyone with an internet connection, including anyone in Mora County. See Smith v. Plati, 258 F.3d 1167, 1177 (10th Cir. 2001) (holding that publishing a website is an activity protected by the First Amendment). 8. Plaintiffs do not know ifthere are recoverable reserves ofoil, natural gas, or other hydrocarbons within their real property in Mora County, within the real property with Mora County ofmembers ofthe Independent Petroleum Association ofnew Mexico, or within the areas within Mora County leased by plaintiffs or IPANM members. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object to this request as ambiguous, irrelevant, and not reasonably calculated to lead to the discovery of admissible evidence. Without waiving the foregoing objections, Plaintiffs note that the term "recoverab.le reserves" is ambiguous. See e,g., BLACK' S LAW DICTIONARY (9th ed. 2009) (defining "recoverable" as "[c]apable ofbeing recovered"); Williams and Meyer, Manual ofoi! and Gas Terms, (8th ed.1991) (defining reserves as "[t]he unproduced but recoverable oil and/or gas in place in a formation which has beenproven by production) (emphasis added); see also id. (explaining difficulty in determining reserves because ofassumptions in rock characteristic, the 8

43 Case 1:13-cv CG-GBW Document 67-3 Filed 12/15/14 Page 4 of 5 Response to Interrogatory No.6. Without waiving the foregoing objections, Plaintiffs note that documents responsive to this interrogatory have been previously provided to Defendants. See Plaintiffs' Initial Disclosures, Bates Nos (Mar. 18,2014). 8. Identify, with specificity and organized by each plaintiffand by each person and entity from your response to interrogatory number 2, all activity protected by the First Amendment ofthe U.S. Constitution in which each has engaged within Mora County since enactment ofthe subject ordinance. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs further object to this request as ambiguous, irrelevant, overly broad, and not reasonably calculated to lead to discoverable information. Without waiving the foregoing objections, Plaintiffs note that activity protected by the First Amendment is expansive, and includes the free exercise of religion, the freedom ofspeech, the freedom ofthe press, the right to assembly, the right to associate and to not associate, and the right to petition for the redress ofgrievances. U.s. Const. amend. I. Furthermore, the Supreme Court has held that because ofthe sensitive nature ofrights protected by the First Amendment, a party may challenge overly broad regulations without first risking prosecution under the regulations. Dombrowski v. Pfister, 380 U.S. 479,486 (1965) ("Because ofthe sensitive nature ofconstitutionally protected expression, we have not required that all ofthose subject to overbroad regulations risk prosecution to test their rights. For free expression-oftranscendent value to all society, and not merely to those exercising their rights-might be the loser." (internal citation omitted)). Plaintiffs further object to this interrogatory as unduly burdensome in its demand for a description ofall activity engaged in by Plaintiffs in Mora County and protected by the First Amendment. See Lectrolarm Custom Systems, Inc. v. Pelco Sales, Inc., 212 F.R.D. 567 (B.D. 20

44 Case 1:13-cv CG-GBW Document 67-3 Filed 12/15/14 Page 5 of 5 Cal. 2002) (denying motion to compel a response to a discovery request seeking all documents referring or relating to communications, meetings, contracts or other dealings with defendant as unduly burdensome). With this said and without waiving any objections, Plaintiffs admit that since enactment ofthe subject ordinance, they have, either individually and/or collectively, engaged in activity protected by the First Amendment within Mora County. For example, PlaintiffMary L. Vermillion regularly attends the public meetings held by the Mora County Board ofcounty Commissioners and often participates during the public comment sections ofsuch meetings. PlaintiffIPANM manages a website ( where it publishes news updates and announcements. The website is publicly accessible and can be viewed by anyone with an internet connection, including anyone in Mora County. See Smith v. Plati, 258 F.3d 1167, 1177 (10th Cir. 2001) (holding that publishing a website is an activity protected by the First Amendment). 9. Identify, by name, address, and telephone number, all witnesses who might provide affidavits, testimony, or other evidence on behalfofplaintiffs in this matter, and the subject ofthereof. Response: See Plaintiffs' Initial Disclosures, A (Mar. 18,2014). Ronald Miles Post Office Box 3841 Roswell, New Mexico (575) For each ofyour responses to the requests for admissions that is anything other than an unqualified admission, explain in detail all ofthe bases and other reasons for your response. Response: See Plaintiffs' Responses to Request for Admissions Nos

45 Case 1:13-cv CG-GBW Document 67-4 Filed 12/15/14 Page 1 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO MARY L. VERMILLION, et al., ) ) Plaintiffs, ) CaseNo.1:13-cv CEG/GBW ) ~ ) ) MORA COUNTY, NEW MEXICO, et ai., ) ) Defendants. ) PLAINTIFFS' RESPONSE TO DEFENDANTS' FIRST SET OF DISCOVERY REQUESTS Pursuant to the Federal Rilles ofcivil Procedure, Plaintiffs in the above captioned case hereby answer Defendants' First Set ofdiscovery Requests as follows. GENERAL OBJECTIONS 1. Plaintiffs object to these requests for discovery to the extent that they seek information or documents that are within the possession, custody, and/or control ofdefendants or are equally available to Defendants and Plaintiffs. 2. Plaintiffs object to these requests for discovery to the extent that they seek infonnation or documents that are protected from disclosure by the attorney-client privilege, the attorney work-product doctrine, and/or any other recognized privilege. This objection extends to any information or documents withheld and to any information or documents produced inadvertently or by mistake. To the extent that Plaintiffs may provide to Defendants any privileged information or documents, there is no intent to thereby waive any such privilege, should Defendants determine to utilize the privileged information or documents. Finally, the

46 Case 1:13-cv CG-GBW Document 67-4 Filed 12/15/14 Page 2 of 3 2. Ifyou assert that the Independent Petroleum Association ofnew Mexico has standing, in whole or in part, on behalfofone or more ofits members, identify each such member by name, address, and telephone number. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object that Defendants seek information already provided by Plaintiffs in their Initial Disclosures to Defendants. Plaintiffs' Initial Disclosures, A (Mar. 18,2014). Without waiving the foregoing objections, Plaintiffs answer this interrogatory as follows: A. Yates Petroleum Corporation 105 South 4th Street Artesia, New Mexico (575) B. Ronald Miles Post Office Box 3841 Roswell, New Mexico (575) Identity, with specificity and organized by each person and entity in your response to interrogatory number 2, all conduct by, and other facts and bases relevant to, such people and entities that you assert gives the Independent Petroleum Association ofnew Mexico standing to bring the subject litigation. Response: Plaintiffs incorporate all oftheir general objections. Plaintiffs object that Defendants seek information already provided by Plaintiffs in their Initial Disclosures and thus in the possession ofdefendants. Without waiving these objections, Plaintiffs note that IPANM member Yates Petroleum Corporation owns several state leases. See Plaintiffs' Initial Disclosures, Bates Nos (Mar. 18,2014). Yates Petroleum Corporation paid valuable consideration for each ofits leases and complies with the provisions ofits leases by making annual rental payments. Under their terms, the leases were conveyed "exclusively, for the sole 14

47 Case 1:13-cv CG-GBW Document 67-4 Filed 12/15/14 Page 3 of 3 and only purpose ofexploration, development and production ofoil or gas (including carbon dioxide and helium), or both thereon and therefrom with the right to own all oil and gas so produced and saved therefrom..." Plaintiffs' Initial Disclosures, Bates Nos (Mar. 18, 2014). IPANM member, Ronald Miles, owns an interest in a mineral estate, including the concomitant oil and gas estate in Mora County, New Mexico. See Bates Nos attached hereto. Mr. Miles paid valuable consideration for his mineral estate. Mr. Miles' only purpose in acquiring his mineral estate was to lease his minerals for oil and gas production. Mr. Miles has previously leased his minerals in Mora County for valuable consideration to a corporation. ld. Bates Nos The lease was granted with the express purpose of"investigating, exploring by geophysical and other methods, prospective, drilling and mining for and producing oil and gas (including but not limited to, gas producible from coal burning formations) and all substances therewith, laying pipe lines, building tanks, power stations, telephone lines, roads and other structure thereon to produce, save, take care of, treat, transport, and own said products, and housing its employees..." ld. Bates No But for the subject ordinance, Mr. Miles would seek to lease his minerals to a corporation again. 4. Identify, with specificity and organized by each plaintiffand by each person and entity from your response to interrogatory number 2, every one ofthem who you assert is or has been "in violation" ofand/or "seeking to engage in activities prohibited by" sections 5.1, 5.2, 5.3, and/or 5.4 ofthe subject ordinance, and specifying which ofthese sections for each such plaintiff, person, or entity. Response: Plaintiffs incorporate all oftheir general objections. Without waiving the foregoing objections, to the extent Defendants are seeking information relating to past or present 15

48 Case 1:13-cv CG-GBW Document 68 Filed 12/15/14 Page 1 of 4 PAULA A. GARCIA CHAIRMAN LAUDENTE T. QUINTANA VICE-CHAIRMAN JOHN P. OUVAS MEMBER THOMAS M. SANCHEZ COUNTY MANAGER ~tatc of ~efu 4fl\texico QIountg of c!jl!tont P.O. Box 580 Mora, New Mexico (575) Fax (575) MORA COUNTY COMMISSION OIL & GAS EDUCATIONAL WORKSESSION November 10, :00 PM MORA HIGH SCHOOL AUDITORIUM AGENDA 1. Call to Order 2. Pledge of Allegiance --~3~RoJLCa!II Approval of Agenda 5. Presentation by Kate Ganga Daniel-Economic Impacts 6. Public Comment 7. Tierras Arraigadas Film Viewing- Renea Roberts 8. Adjourn If you are an individual with a disability who is in need of a reader, amplifier, qualified sign language interpreter or any other form of auxiliary aid service to attend or participate in the meeting, contact the Mora County Administration Office located on HWY 518 Main St. Mora County Courthouse, Mora, NM as soon as possible at

49 Case 1:13-cv CG-GBW Document 68 Filed 12/15/14 Page 2 of 4 PREPARED FOR THE SAN MIGUEL COUNTY OIL AND GAS ORDINANCE TASK FORCE The Other Side ofthe Coin An Analysis of Socioeconomic Impacts of Oil and Gas Development on Small Communities Kate Daniel 5/17/2011 A discussion of research findings regarding the social and economic impacts on small communities hosting an oil and gas development boom. Income potential, hard and soft costs accruing to the host community, and impacts on community cohesion are discussed. Mitigation and preventive measures are recommended.

50 Case 1:13-cv CG-GBW Document 68 Filed 12/15/14 Page 3 of 4 The Other Side of the Coin Revisiting the "boom-bust" pricing cycle mentioned above, the market price of natural gas is well below its economic production cost. Yet drilling is still increasing. This is abnormal behavior, since the normal response to low market prices is to curtail production, not increase it. What could be the explanation? One obvious explanation is that gas producers are anticipating a lucrative export market. There is a technology - called Liquefied Natural Gas (LNG) - that allows gas to be changed into a liquid so that it can be shipped in tankers, the same way oil is transported. Many countries in the world have no natural gas supplies within their borders and must import all of the natural gas they use. Japan is one such country. In these markets, natural gas sells for $14/md and above;compared to less than $5/mcf in the US. With international prices like these, current domestic over-production begins to make sense if the product can be exported. In addition, many foreign countries, especially China, are buying substantial stakes in US domestic production. This gas will all leave the country, destined for use as fuel for the growth of overseas economies. The argument that 'it's patriotic to encourage gas production and unpatriotic to regulate it' simply falls flat in the face of the reality that as exports increase, domestic supplies will fall, and the price of natural gas for US consumers will rise substantially. Should San Miguel County suffer the potentially catastrophic consequences of unregulated natural gas development so that China can gain access to US natural gas supplies? "Something has to be done with all ofthis gas production, so for now a move is on to create LNG facilities for export. Export of LNG to the UK has already begun. While several import facilities were planned and built (before unconventional gas even came into the picture) in anticipation of high LNG imports in the coming decades, the U.S. has very limited LNG export capability. That could be about to change. There are two LNG export facilities announced this year--freeport LNG and Australia's Macquarie Bank have agreed to build one in Texas to export 1.4 billion cubic feet per day of gas, and Cheniere Energy's will be on the site of its Sabine Pass facility to export 16 million metric tons per year. Both plan to produce and export LNG by 2015," In addition, the existing LNG import terminals are being retrofitted for export and are expected to be on line by Credited excerpt from: Exploding-Without-Apparent-End.html Furthermore, it is vital to understand that any decision to halt production due to market conditions will be made without regard to the impact on the affected locol economy. It's a simple business decision. VII. Other Miscellaneous Costs to Local Economies "The BLM clearly recognizes key issues in these counties related to rapid population growth as a result of economic development. Most notable are the current housing crisis, the increasing demand for emergency services, increased traffic and traffic infractions, and growth in the crime rate," - Sublette County Socioeconomic Impact Report, Ecosystem Research Group, 2008 "The local governments of Big Piney, Marbleton, Pinedale, and Sublette County saw large increases in both revenues and expenditures dueto royalties from natural gas development and the mitigation of impacts from the development. The towns of Big Piney and Marbleton saw revenues increase enough to match needed infrastructure projects although with little money left over, while significant revenues to the town of Pinedale have notbeen enough ta meetinfrastructure, maintenance, and administration demands," - The Northeast Regional Center for Rural Development, Pennsylvania State University, NERCRD Rural Development Paper No. 43 January 2009 (emphasis added) Page 119

51 Case 1:13-cv CG-GBW Document 68 Filed 12/15/14 Page 4 of 4 The Other Side of the Coin Water Usage The fracking process by which gas wells are drilled uses an enormous quantity of water. Where does this water come from? "You get it from wherever you can," said Bob Gallagher, (former) president of the New Mexico Oil and Gas Association, a trade organization that represents the industry. "You might drill a water well specifically for that lease. it depends." This brings up an interesting point: water wells for domestic use have a right to use 1 acre-foot ofwater per year. Compare this to the water used to frackjust one gas well: from 8 to 17 acre-feet (2.6 to 5.5 million gallons)! Nevertheless, Gallagher is adamant: "I don't accept the thought process that we are usingtoo much water. Let's getreal - if water is one of the products that is needed, we have a right to use waterjust iike anybody else." (Quoted in the Santa Fe New Mexican 03/02/08) Most people will probably agree that there is a qualitative as well as quantitative difference between water used for agricultural irrigation - which, here in San Miguel County, returns virtually unpolluted water to the ground to be eventually reabsorbed by the aquifer it came from - and water used for gas extraction, where the water used is polluted by toxic chemicals used in the fracking process, rendering it unfit for any other uses. If a 400-acre property is developed to the maximum density allowed by state law, there will be 10 gas wells on this property. If water use is not regulated, then at the lower water use figure, over26 million gallons ofwater will be used in just the first fracking, and wells are fracked many times during their life span. This water is polluted with toxic chemicals and cannot be recycled. It is lost forever. The price consumers pay for water delivered to their homes does not reflect its true value. We can better understand the economic value of water by looking at its impact on land prices. Un-irrigated land sells for two to three thousand dollars per acre, while irrigated land commands well over ten thousand dollars per acre. Land that sits in a dry basin - where attempts to drill even marginally producing water wells have not been successful - is extremely cheap. The wisdom ofthe oft-repeated maxim cannot be denied: "EI agua es la vida" - "Water is iife." When the oil and gas industry claims that "the oniy thing more important to your survival than oil is oxygen," we have to wonder: how many people irrigate their crops and quench theirthirst with oil? Roads Bonds must be required in amounts sufficient to repair/replace existing roadways at current, - to say nothing offuture - prices. To access drill sites, particularly in rural counties, more roads will be needed. Existing roads are not capable of sustaining the heavy pounding of drilling industry trucks. We are talking about hundreds -likely thousands - of round-trips by heavy industrial vehicles on an annual basis. On roads that have only seen the occasional hay truck as heavy traffic, the deterioration and damage will be severe. Otherwise, the County will be responsible for funding repairs to county roads, repairs that should be expected to be much more extensive than in the past. In addition, it should be required that roads constructed by O&G operators must be maintained to minimize the large amounts of dust that will result from steady use. This dust in itself is an environmental hazard. "Increasing traffic is a statewide matter in Wyoming, but the increases in Sublette County far surpass the State-wide average. From 2000 to 2006, traffic increased 16.2% across Wyoming, but in Sublette County the increase was 79% (Wyoming Department of Transportation 2007)." - Sublette County Socioeconomic Impact Report, Ecosystem Research Group, 2008 Crime "Studies have shown that as the numberof oil and gas wells increased, non-violent crime increased modestly. This can necessitate the need for more law enforcement in both rural and urban counties. Page I 20

52 Case 1:13-cv CG-GBW Document 69 Filed 12/15/14 Page 1 of 4 The Other Side of the Coin Costs for additional police personnel are proportionately greater, in terms of budgetary impact, in small towns than in urban areas." (Kelsey, 2009; Murray & Ooms, 2008b; Ecosystem Research Group) "Between 2000 and 200S, violent crimes increased by 106%, and property crimes increased by S6%." "The number of juvenile offenses rose 233% between 2000 and 2006." "Furthermore, according to Dayle Read-Hudson of Pine Creek Family Counseling in Pinedale, the last few years have produced more accounts of children bearing witness to violent crimes." - Sublette County Socioeconomic Impact Report, Ecosystem Research Group, 2008 Drug Use "In additional to straining existing services, the introduction of oilfield workers to the community has affected local drug use and distribution. The high pay that workers receive gives them great incentive to work as many hours as they can. It is a common practice for workers to use methamphetamine to increase the length of time they work each day (U.S. Department of Justice 2006; Urbigkit 2003). Unfortunately, methamphetamine use has spread to other parts of the community and has emerged in the general population as well as on school grounds (Urbigkit 2003). [As shown earlier in Table ,J drug abuse violations are up 209% for adult males and 400% for juvenile males from 2000 to Responding to this issue has increased the workload of law enforcement and will likely require the addition of another officer to address the issue." - Sublette County Socioeconomic Impact Report, Ecosystem Research Group, 2008 DUls An increase in DUI arrests has accompanied the advent ofoil and gas industry into communities. Should drilling start here in SMC, more police officers and patrol vehicles will likely be needed to address the increased danger on our roads. Poverty levels "The number of people living below the poverty line has increased in more populated areas (as opposed to the sparsely populated Sublette County, Wyoming). This places a larger financial burden on social services." (Murray & Ooms, 2008b; Kelsey, 2009; Rodger et ai., 2009) "As the need for service industry workers increases, the number of working poor in an area also increases." This will likely be a tiered effect in San Miguel County, with the towns experiencing the increase in working poor and rural areas remaining mostly unaffected, assuming that traditional livelihoods are not extinguished by the industrial nature of O&G activity.. - Credited excerpts from Marcellus Shale Natural Gas: Its Economic Impact League of Women Voters of Pennsylvania, Study Guide III Facilities "Health Care Services: An increase in population expands the need for health care. Small rural medical centers in Wyoming have reported the demandsfor medical care exceed their abilityto provide services both in terms of personnel and finances (Ecosystem Research Group, 2008)." In addition, there could be an increase in numbers of students at local public schools, placing stress on the educational system as well. - Credited excerpts from Marcellus Shale Natural Gas: Its Economic Impact League of Women Voters of Pennsylvania, Study Guide III Health effects from natural gas drilling and processing are well-documented, even if they tend to be anecdotal. Dozens of chemicals used in the process and the volatile organic compounds vented during processing can and do cause severe health effects among those who are exposed to them. The health effects of these chemicals are undisputed, as is the prevalence of these chemicals in O&G operations. The O&G industry is able to deny responsibility because generally the air quality is not tested prior to drilling and production activity beginning in a community, nor afterwards. The widespread impact of Page 121

53 Case 1:13-cv CG-GBW Document 69 Filed 12/15/14 Page 2 of 4 The Other Side of the Coin these chemicals on the local population's health and wellbeing will undoubtedly be another expense the county must bear, especially in the case of indigent people contracting illnesses due to inadvertent chem ical exposure. An indirect cost will be the loss of desirability as a place to live for the areas that experience these effects. "I'm not an activist, an alarmist, a Democrat, environmentalist or anything like that. I'm just a person who isn't able to manage the health of my family because of all this drilling." KELLY GANT, whose says her children have had severe asthma attacks and headaches since a gas well was set up near her house in Bartonville, Tex. - Quoted in the New York Times, 02/27/11 "Throughout the gas fields of western Garfield County, dozens of residents have complained of health problems they believe are caused by the wells that have spread across the rolling sagebrush landscape. Complaints include dizziness, nausea, difficulty breathing, sinus problems, eye and skin irritation and blistering. More severe concerns have included cancer, neurological disorders and acute chemical sensitivities. Chris Mobaldi felt burning pains across her body for months, worsening until she could no longer dress herself. She became weak, chronically nauseous and developed a string of debilitating health problems culminating in a pair of pituitary gland tumors. In two years, friends said she aged 20 years. Most puzzling, a rare brain condition called foreign accent syndrome has left her speech sounding like she's from another country, or sometimes reduced to total gibberish. She said she had smelled fumes from the surrounding gas wells for months and complained of tainted well water. [She died last year.] Karen Trulove began complaining of constant fatigue at her home south of Silt, and closed up her framing shop in town when she could no longer go to work. On the well pad above her home, a petroleum smell still fills the air, and on bad days she says the air around their home shares the same odor, accumulating in gullies and valleys on her land. Among her neighbors south of Silt, Karen Truiove counts a half-dozen who have removed the batteries from their smoke alarms after they tired of hearing them mysteriously activated. She believes they were tripped by unseen chemicals in the air. Dee Hoffmeister said the constant rumbling of diesel engines at a well site near her home south of Silt filled her home with fumes. She returned from a month-long family visit to find a gray cloud filling her front porch, she said, and the fumes caused her to pass out." --Aspen Daily News, May 3, 2006, David Frey "Farmington, NM has one of the fastest growing rates of childhood asthma in the nation. 84ppb (parts per billion) is the legal limit for ozone. SO-60ppb can cause serious health problems. In the summer of 2000, Farmington had 9 days where the ozone level was less than SOppb. In 2001, it was 4 days. In 2002, adays... a lppb increase in ozone can add $20/year/person to a communities (sic) health cost..."- "Children living in communities with higher concentrations of acid vapor, ozone, N02 and particulate matter have significantly reduced lung growth and development." - NM Dept. of Health, 200S - "Still, in the Upper Green River Basin, where at least one daycare center called off outdoor recess and state officials have urged the elderly to avoid strenuous outdoor activity, some wonder if they've made a bargain with the devil. Two days last week, ozone levels in the gas-rich basin rose above the highest Page 122

54 Case 1:13-cv CG-GBW Document 69 Filed 12/15/14 Page 3 of 4 The Other Side of the Coin levels recorded in the biggest U.S. cities last year." -- Mead Gruver, Associated Press, March 8, 2011 on air pollution resulting from gas development in Pinedale, WY The real tragedy with regard to the severe health effects being experienced is that these effects are aimost entirely avoidable. By requiring the O&G industry to use practices that mitigate the risks to land surface, air quality and water purity these effects can be largeiy, if not entirely, eliminated. Emergency Responders: "In all cases, as the number of wells increased, the number of emergency runs directly increased. This requires more emergency vehicles and crews. In rural areas, new emergency vehicles with high clearance are often required to access the back roads. Emergency Management plans require modifications to deal with natural gas well emergencies and with the toxic substances that are used inor result from - drilling and frac[k]ing." (Kelsey, 2009; Murray & Ooms, 2008b; Rodgers et ai., 2008). Municipalities that operate their own fire and ambulance services see a direct increase in costs. In areas where private services and volunteer fire departments operate, costs accrue to those services that are, in turn, passed on to local citizens and service users via necessary funding increases. The need for all volunteer fire companies to be trained in HazMat protocols, along with the purchase of expensive protective equipment will also add to costs. Many, if not most, SMC volunteer fire companies normally experience so few calls that it's an open question as to whether they could ever be sufficiently qualified to deal with a toxic emergency. These volunteer companies are also thinly staffed, especially during working hours, as many members hold full-time jobs. This will require the hiring of paid, well-trained responders to serve as additional staff within the volunteer departments. Unfortunately, oil and gas well fires are not uncommon; (a Google search returned 6,410,000 hits). They happen with terrifying suddenness, often due to an explosion. What if one happens here on a Red Flag Day? - Credited excerpts from Marcellus Shale Natural Gas: Its Economic Impact League of Women Voters of Pennsylvania, Study Guide III "Sublette County EMS runs increased by 168% between 2000 and The development phase of gas recovery has a high risk of injury, especially when placing rigs (Ring 2007). In2006, EMS runs to the oilfields accounted for 25% of all requests for medical aid. " - Sublette County Socioeconomic Impact Report, Ecosystem Research Group, 2008 Housing Infrastructure: "An increased demand for more housing is a direct result of population growth. If there is inadequate housing, the influx of workers cannot find a place to live within a community and contribute to its tax base. On the other hand, the need for development phase workers will decrease significantly in the short term (10+) years. Some communities need to weigh the value of temporary housing to protect the value of long term resident housing. The building of "Man Camps" has been proposed in some areas to house transient workers. (Long,2009) Kelsey noted that if new homes are built in response to an influx of workers, the municipalities may have a glut of housing after the drilling phase is over in ten to twelve years (Webinar presented in Indiana County, October 14, 2009). Demand for drinking water, sewage treatment, and waste management will increase and require appropriate governmental response." - Marcellus Shale Natural Gas: Its Economic Impact League of Women Voters Of Pennsylvania, Study Guide III Social Conflict: "An influx of new people into well-established communities can create a "social cost." [Established] residents may like the community the way it was and resist change. Rig crews may enjoy a styie of life that may be in conflict with traditionally accepted norms. When new costs to the community are Page I 23

55 Case 1:13-cv CG-GBW Document 69 Filed 12/15/14 Page 4 of 4 The Other Side of the Coin funded by existing revenue sources, people who have not benefited from the natural gas boom may resent paying the price of higher taxes." - Marcel/us Shale Natural Gas: Its Economic Impoct League of Women Voters of Pennsylvania, Study Guide III "By the late 1970s, a so-called "boomtown model" or "social disruption model" emerged as a prominent framework among researchers to describe the rapid growth that overwhelms local governments and permanently alters social relationships. The body of evidence tended to find a mix of positive and negative economic impacts to local residents, contrasted with highly negative social impacts. (Markussen, 1978; Freudenburg 1984; Merrifield, J. 1984; Seyfrit 1988; Perdue, et ai1999)." -The Northeast Regional Center for Rural Development, Pennsylvania State University NERCRD Rural Development Paper No. 43 January 2009 With the strong focus on family, heritage, and traditional values in San Miguel County, this could prove to be a significant source of conflict and disruption. Impacts on Tourism: Tourism is an important contributorto the economyof San Miguel County. From families owning second homes in the county to travelers enjoying the fishing, hunting, and State Parks, non-resident visitors provide a substantial net gain to County revenues, since they import money from their home locations and spend it in the SMC economy. Development of O&G production in these tourist-centric areas will likely severely impact these revenues, although no specific data could be found regarding the potential extent of the impact. Obviously, pollution and despoiled landscapes would decrease SMC's attraction to tourists. Compatibility of Lightly-Regulated Oil and Gas Development with the San Miguel County Comprehensive Plan (SMCCP) The following few excerpts from the Comprehensive Plan demonstrate unequivocally that poorly- or lightly-regulated oil and gas development is not compatible with the comprehensive plan developed by County officials in partnership with County residents: "The community consensus is that economic development is essential. Furthermore, economic development con and must sustain rural communities, locai culture, and ranching, farming and outdoor recreation as a way of life. When it comes to economic development, residents want County government to address local needs and quality-of-life concerns through heritage, "inspirational," and recreational tourism that provides good jobs and income producing opportunities while respecting local values and customs." (Page 10) emphasis added. "Many residents see themselves as "weekend" farmers or ranchers - commuting to work at desk jobs in Santa Fe and Las Vegas during the week, and returning to manage family landholdings and care for elderly parents on their days off. It is a demanding lifestyle, but one which they warmiy embrace out of love and respect for their elders, their cultural heritage, and for the land itself." (Page 11) "Environmentally sensitive areas include rivers - their floodplains and valleys, valleys, arroyo corridors, steep slopes, prominent ridges, rock outcroppings, natural landmarks, vistas and forests." (Page 22) "With the exception of the City of Las Vegas, all potable water supplied in San Miguel County comes from underground aquifers." (Page 40) Page 124