Schmude Oil, Inc. v. Department of Environmental Quality
Court of Appeals of Michigan
856 N.W.2d 84 (Mich. Ct. App. 2014)
Michigan's 1980 state-forest development plan created both a limited-development region and a non-development region where drilling was barred, and Schmude Oil and others (plaintiffs), who leased oil and gas rights in the forest in 2006, applied for drilling permits in the non-development region, only to have the Department of Environmental Quality (DEQ) (defendant) deny the applications. The Ingham Circuit Court affirmed the denials, and the plaintiffs appealed, arguing the denials amounted to an unconstitutional taking of their private property interests without just compensation.
Whether a state or local government may limit oil and gas rights on private property for public purposes without just compensation.