Before they go fracking broke. . . What the frack are you waiting for ?
By Peter Hayes
March 14 — A recent jury verdict and $4.2 million award in favor of two Pennsylvania families who alleged fracking operations contaminated their well water is likely to trigger the filing of more suits, sources tell Bloomberg BNA.
A jury March 10 found Cabot Oil & Gas acted negligently in drilling fracking wells in Dimock, Pa., which created a private nuisance and significantly harmed the plaintiffs in their use and enjoyment of the property. A number of other families involved in the litigation settled before trial for a total amount less than what was awarded here.
It is one of the first fracking nuisance verdicts finding for plaintiffs but is not unprecedented.
A Texas jury awarded $2.9 million in 2014 to a family who alleged contamination from fracking operations caused them a variety of personal injuries, in Parr v. Aruba Petroleum Inc., Tex. County Ct., No. CC-11-01650-E, 4/22/14.
In this case, however, no personal injury allegations were put before the jury.
Counsel for the plaintiffs, Leslie Lewis, a solo practitioner in New York, declined to speculate whether the case will have an impact on further litigation.
“I have no idea what the future will bring regarding other cases and future verdicts; this case was a particular fact pattern, with shoddy operations occurring early in the so-called ‘gas boom’ years,” Lewis told Bloomberg BNA March 14.
“This case was about gas drilling operations, not necessarily hydraulic fracturing,” Lewis said. “This is maybe the second nuisance verdict in the U.S.; the only other I am aware of is the Parr case, which is under appeal. Presently, I do not know how many other cases are out there and where.”
Defense attorney Brent Allen, with Greenberg Traurig LLP in Washington, said the verdict could spark the filing of more suits.
“Seeing plaintiffs prevail here, even on limited claims and with debatable evidence, suggests that lawyers for plaintiffs will be emboldened to pursue many more cases. Whether those cases translate to more verdicts will depend on the specific facts of each situation,” Allen told Bloomberg BNA March 14.
“Nevertheless, the verdict is significant because it shows how juries tend to react to claims of water contamination, ” Allen said. “Water contamination cases that reach a jury are very dangerous for defendants.”
Allen focuses his practice on the litigation of complex business disputes, and has experience involving refinery operations, gasoline distribution, and natural gas gathering and processing.
Prof. Hannah Wiseman of Florida State University College of Law agreed the outcome in this case could encourage landowners to pursue more fracking nuisance claims. It also could encourage plaintiffs to hold out for a verdict rather than settle.
“It shows that plaintiffs can pursue these cases and win,” Wiseman told Bloomberg BNA March 14.
Wiseman declined to speculate on whether the verdict would survive on appeal, but acknowledged it is difficult to challenge a jury verdict.
Despite these predictions, some defense attorneys say the boom in fracking litigation hasn’t yet played out like some have predicted .
They also said the facts of this case may have limited application.
“Five years ago, the plaintiffs’ bar thought fracking would be the next asbestos. That hasn’t been the case. These cases which have been brought seem to be localized and episodic. Or, companies may be resolving appropriate cases after investigation,” defense attorney J. Michael Showalter, with Schiff Hardin in Chicago, told Bloomberg BNA.
Allen, of Greenberg Traurig, agreed that the facts may not extend far beyond this case.
“Every situation is different, so the jury verdict in this case should not be determinative in other cases involving different facts,” Allen said.
“In addition, my understanding is that there were irregularities in how plaintiffs’ evidence was introduced, so Cabot is understandably planning to appeal,” he said.
Showalter, who handles environmental litigation for Schiff Hardin, also said it’s difficult to draw conclusions from the verdict.
“The message is still incomplete. We don’t know how the Third Circuit will evaluate the sufficiency of the plaintiffs’ case. It seems like fingerprinting the gas would have been key in this case. The question is how the appeals court will evaluate that evidence. We’re probably a year away from knowing,” he said.
Another defense attorney, Frank Leone, with Hollingsworth LLP in Washington, said that the verdict may be an outlier.
Leone specializes in environmental and toxic tort litigation.
“It may be an unusual situation because there were allegations of improper drilling techniques and surface spills, which could have given rise to contamination,” Leone told Bloomberg BNA.
Going forward, plaintiffs will still face a problem of causation, defense attorney Carl Pernicone with Wilson Elser in White Plains, N.Y. told Bloomberg BNA.
“The jury did not return a finding that the fracking process, itself, resulted in contamination of drinking water supplies. Indeed, from a liability standpoint, the focus of the case wasn’t about fracking at all; rather, it was on drilling,” Pernicone said.
“At end of the day, despite all the spin, the Ely verdict simply does not provide the plaintiff’s bar with what they’ve desperately been seeking: A clear, unequivocal jury finding of a nexus between the mechanisms of hydraulic fracturing and contamination of drinking water resources,” he said.
The suit originally was filed in 2009 by more than 40 residents.
It was winnowed by settlements and dismissals to four adult plaintiffs—Scott and Monica Ely, and Raymond and Victoria Hubert— and their children.
The Ely family was the subject of “Gasland 2”—a 2013 Oscar-nominated documentary about fracking by Josh Fox.
In December 2010, Cabot settled with 19 Dimock families for a total of $4.1 million.
As part of that agreement, Cabot also paid the Department of Environmental Protection $500,000. That was to offset the agency’s investigation into the gas migration problem, following a January 2009 report that a private water well had exploded.
The DEP determined that methane gas from a shallow formation had been disturbed and migrated through poorly constructed wells that Cabot built while drilling the deeper Marcellus Shale formation. Cabot disputes that finding.
In February 2016, the court barred the plaintiffs and their experts from putting before the jury evidence about alleged personal injuries or the various settlements accepted by some of the original plaintiffs. Also barred was information about consent decrees or notice of violations by government agencies .
Cabot to Challenge Verdict
Cabot has vowed to challenge the verdict.
“Cabot will be filing motions with the Court to set the verdict aside based upon lack of evidence as well as conduct of plaintiff’s counsel calculated to deprive Cabot of a fair trial,” the company said in a statement March 10.
Leslie Lewis, a solo practitioner in New York, represents the Elys and Huberts.
Norton Rose Fulbright US LLP in Canonsburg, Pa., represents Cabot and related defendants.