A watchdog group and four southwest Idaho landowners have filed a federal lawsuit against Idaho officials contending a state-approved process forcing them to sell their natural gas and oil violates the U.S. Constitution.
The lawsuit, filed late last month, names Idaho Department of Lands Director Tom Schultz and one current member and four former members of the Idaho Oil and Gas Conservation Commission.
Citizens Allied for Integrity and Accountability and the landowners with mineral rights say the state discriminated against them earlier this year with an order finalizing a deal that favors the oil and gas industry.
“Plaintiffs are now subject to a final order which compels them to transfer their valuable property to a third party, corporate entity, for purely commercial purposes at prices to which they did not agree,” the lawsuit states.
The lawsuit seeks to have that decision declared invalid.
The lawsuit also seeks an injunction preventing Idaho from applying some oil and gas laws until they include protections required by the Constitution.
“Fundamentally, when you’re using the law to force one private party to give up something to another private party, it is absolutely required that the parties be able to prove what it’s worth,” James Piotrowski, an attorney representing the watchdog group and landowners, said Thursday.
He said the state fell short of that mark at a hearing in December when he wasn’t allowed to present evidence on behalf of landowners and Texas-based oil company Alta Mesa, which asked the state to intervene, wasn’t required to present evidence.
Following the hearing, Schultz recommended approval of Alta Mesa’s application, and that’s what the Idaho Oil and Gas Conservation Commission did.
Sharla Arledge, spokeswoman for the Idaho Department of Lands, said the agency doesn’t comment on pending litigation.
Specifically, the lawsuit involves a process called integration. Under Idaho law, when owners with at least 55 percent of the mineral rights in an area agree to lease, the remaining minority can be forced to take part. Piotrowski is representing landowners with mineral rights who are in that minority.
Integration is a common practice in gas and oil producing states. It’s intended to prevent a minority of mineral rights owners in an area from stopping natural gas or oil production, which can generate jobs and revenue for the state.
In the area being contested by the landowners in the lawsuit, Alta Mesa says it has leases for more than 55 percent in the 640-acre area just across the Snake River from Oregon. At the December meeting, the company said lease signings went past 70 percent.
Piotrowski said the state not allowing evidence, such as how oil and gas drilling in the area could lower home values or cause environmental problems, violated due process protections in the Constitution. The plan the state ultimately approved for the minority mineral rights owners established bonus payments of $100 per acre and set a royalty amount that Piotrowski termed minimal.
“If I want to buy something, I should have to offer a price that convinces you to sell,” Piotrowski said. “That’s not the way this worked. The state said here’s the price you’re going to get regardless of what the mineral rights are worth.”
John Foster, a spokesman for Alta Mesa, said the company had no comment.