Tri-Power Resources, Inc. v City of Carlyle (IL)

Summary: A city may deny a permit for the right to drill for oil within its city limits, even if the statute governing such permits only grants the city the power to give “official consent.” Official consent necessarily includes the right to deny.

Tri-Power Resources, Inc v City of Carlyle, 2012 Il App (5th ) 110075 (5th D, 2012).

Facts: In April 2005, Tri-Power Resources Inc. leased the oil and gas rights from the owners of a parcel of land in what was then unincorporated Clinton County, IL. In June 2005, Tri-Power obtained a permit to drill for oil. In September 2005, however, the city of Carlyle annexed the land and it was automatically zoned as a residential district, which meant it could not be drilled for oil. Tri-Power filed a complaint against the city arguing that the city did not have the authority to deny the company’s right to drill. Tri-power sought summary judgment on that issue and the circuit court denied the motion. Tri-power then appealed, seeking a declaratory judgment on the certified question of whether Carlyle has the authority to prohibit Tri-power from drilling for oil.

Holding:  Certified question answered in the affirmative and case remanded. The appellate court held that the statutes granting the city the power to issue permits to drill also granted it the authority to deny permits. The court acknowledged that Carlyle was a non-home-rule unit of government and thus subject to Dillon’s Rule. Dillon’s Rule provides that a non-home-rule city “possess[es] only those powers specifically conveyed by the constitution or by statute.” Tri-power argued that as a non-home-rule city, Carlyle only had powers specifically conveyed by statute, and that the statutes regarding oil permits only said Carlyle could grant or “impose reasonable restrictions” but did not specifically say they could deny permits. The statute did, however, say that the city had the power to give “official consent” to oil drilling permits, and the court held that this included the power to deny Tri-power the right to drill. “The power to give ‘official consent’ or permission,” the court said, “necessarily entails the power to deny the same.” Therefore, Carlyle, despite being a non-home-rule unit of government, still had the specific grant of power to prohibit Tri-power from drilling for oil within Carlyle’s municipal limits.

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By: ATG Underwriting Department | Posted on: Mon, 07/23/2012 - 1:16pm