Abstract

Over the past decade many environmentally motivated restrictions and withdrawals have been carried out at the expense of private property owners, most of whom seemed to have no effective recourse. This paper (1) summarizes a recent case in which a Michigan oil operator and several mineral owners fought back, winning a judgment worth $120 million from the State of Michigan, and (2) analyzes the essential geotechnical procedures, particularly those involving stochastic exploration risk analysis, required to determine and to justify the plaintiff`s claims for monetary damages. The intent is to provide encouragement and guidance to other private property owners, especially those involved in mineral resources, who may be contemplating similar legal actions. The Fifth Amendment to the US Constitution prohibits the taking of private property for public use without just compensation, and the 14th Amendment forbids the state to deprive any person of property without due process of law. Nevertheless, most knowledgeable attorneys generally conceded that the law concerning takings of private property by state regulatory restriction has been murky and uncertain at best.

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