# Hydraulic Fracturing (Fracking ): Litigation Trends

Duke K. McCall, III

Bingham McCutchen LLP 2020 K Street Washington, D.C. 20006 duke.mccall@bingham.com

# Discussion Topics

• Fracking in the United States

• Fracking Litigation

• Factors Driving Fracking Litigation

• Fracking Litigation to Date

• Litigation Trends



# • Questions

2

# Use of Fracking

• Fracking has been used for over 60 years in the United States in traditional, vertical wells in confined reservoirs.

• An estimated 1 million wells have been fracked, approximately 35,000 annually.

• R ecent advancements in fracking and horizontal drilling in shale formations have opened up new areas of the US to oil and gas production.

• If current trends continue, the United States could, as a result of increased production from shale deposits through fracking, become an exporter of liquefied natural gas (LNG) as soon as 2016.

3

# The Fracking Process

4 

# Horizontal Wells in Shale Conventional Wells v
.

# Shale Formations in the United States

5

# Factors Driving Fracking Litigation: Location

6 

# • Fracking has opened up areas for production that have not previously seen oil and gas operations at the current scale, if at all.

• The proximity of the Marcellus Shale, in particular, to the largest natural gas markets in the United States has helped fuel demand.

• I ncreased exploration and production in areas not accustomed to oil and gas operations has given rise to conflicts and increased litigation risks.7

# Factors Driving Fracking Litigation: Public Perception

• Concerns include potential:

• Contamination of drinking water

• Surface water and soil impacts from fluid leaks and spills

• Induced seismicity (earthquakes)

• Vibration and subsidence

• Air emissions, including releases of greenhouse gasses that could contribute to global warming

• Increased truck traffic and diesel emissions

8

# Factors Driving Fracking Litigation: Media Attention

9

# A Factor Driving Future Fracking Litigation: Water Scarcity

11 

# • Fracking in most shale formations requires substantial water.

• Water used in fracking can sometimes be re

- used in wells but generally is not re

- used for other purposes.

• Some shale formations are located in areas of limited water supply where water allocations are already in dispute.

• Disputes between oil and gas producers, agricultural interests and other water consumers are expected to grow as fracking increases.

# Fracking Litigation to Date

• Since 2009, more than 200 “fracking

- related” lawsuits have been filed in state and federal courts:

• Dozens of lawsuits alleging property damage (from fracking itself or other aspects of drilling operations utilizing fracking)

• Dozens more alleging personal injuries or seeking medical monitoring

• Several lawsuits alleging induced seismic activity

• More than 50 lawsuits against agencies challenging a perceived lack of regulation or enforcement

• More than a dozen enforcement actions against drillers for alleged violations

• Lease disputes

• FOIA litigation

12

# Fracking Litigation Trends

• Few lawsuits alleging property damage and personal injury have been fully adjudicated

• Trends

– Traditional Tort Procedures Apply

• **Strudley v. Antero Resources Corp**  **.,** No

. 12CA1251, Colo. Ct. App. July 3, 2013)

– Colorado Court of Appeals reversed a trial court dismissal of personal injury and property damages claims under a “Lone Pine” order that required a prima facie showing of causation. The Court of Appeals held that Lone Pine orders are not permitted under Colorado law and would not have been appropriate in this case in any event.



# • Trends

– Potential for Jury Appeal

• **Parr et al. v. Aruba Petroleum Inc** ., No. 11

- 01650

- E, ( Dall

. Cnty , Tex. Apr. 2014)

– Texas jury awarded family $2.925 million for personal injuries and property damage in a lawsuit alleging that wells operated on adjacent properties by Aruba Petroleum created a private nuisance.

13

# Fracking Litigation Trends (Cont.)

• Trends

– Litigation to Force Disclosure

• **Powder River Basin Resource Council v. Wyoming Oil & Gas**  **Conserv**

**. Com’n**  **,** 320 P.3d 222 ( Wy . Mar. 14, 2014)

-- Wyoming Supreme Court ordered district court to reconsider ruling that composition of fracking fluids was a trade secret exempt from public disclosure

.



# • Trends

– Litigation to Force Regulation

• **Center for Biological Diversity v. California Dept. of Conserv** 

**.** , No. RG12

- 652054 (Sup. Ct. Jan. 29, 2014)

– Trial court dismissed claims of environmental groups against the California Division of Oil, Gas and Geothermal Resources ( DOGGR ) alleging that DOGGR violated the California Environmental Quality Act ( CEQA ) by allowing fracking without environmental impact reports. The court concluded that SB

- 4 directed DOGGR to authorize fracking authorize fracking pending issuance of new regulations in 2015.

14

# Questions

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# Fracking Litigation Reference List

Class Action Lawsuits to Date Include:

Arkansas

• **Ginardi v. Frontier Gas Services, Inc.** (No. 4:11

- CV

0420, E.D. Ark.)

– Negligence, nuisance, trespass and strict liability claims for alleged soil and groundwater contamination from natural gas compressor stations (filed 2011, plaintiffs’ motion for summary judgment denied as premature, settled 2012)

• **Hearn v**

**. BHP Billiton**  **Petroleum (Arkansas) Inc**

**.** (No. 4:11

- CV

- 00474, E.D. Ark.)

– Property damage claims alleging that injection wells for the disposal of used fracking fluids triggered earthquakes in north

- central Arkansas (filed 2011, consolidated with other cases, pending)

• **Hill , et al. v. Southwestern Energy Company**  (No. 4:12

- CV

- 00500, E.D Ark.)

– Trespass claims for subsurface disposal of used fracking fluids in injection wells (filed 2011, pending )

• **Scoggin v. Southwestern Energy Company**  (No. 4:12

- CV

- 763 , E.D. Ark .)

– Negligence , nuisance, trespass and strict liability claims for alleged personal injury and property damage from groundwater contamination, noise, vibration and air emissions from fracking and related trucking operations (filed 2012, pending )

• **Sheatsley v. Chesapeake Operating, Inc., et al.** (No. 4:11

- CV

- 00353, Ark. Circuit Ct.)

– Negligence, nuisance and trespass for damage from earthquakes allegedly triggered by fracking (filed 2011, removed to federal court)

17 

## Arkansas (cont.)

• **Tucker v. Southwestern Energy Company, et al.** (No. 1:11

- CV

- 00044, E.D. Ark.)

– Negligence, nuisance, trespass and strict liability claims for property damage from soil and groundwater contamination and air emissions (filed 2011, motion for a more definite statement granted, settled 2012)


## Louisiana

• **Andre v. Exco Resources, Inc., et al.** (No. 5:11

- CV

- 00610, W.D. La.); and **Beckman, et. al v. Exco Resources, Inc., et al.**  (No. 5:11

- CV

- 00617, W.D. La.)

– Negligence, strict liability and state statutory claims for property damage alleging groundwater contamination from a well blowout (filed 2011, settlement

- in

- principle in 2012, case stayed pending finalization of settlement) 

## Pennsylvania

• **Bidlack , et. al v. Chesapeake Appalachia, LLC, et al.**  (No. 3:11

- CV

- 00129, Pa. Ct. of Common Pleas)

– Negligence, nuisance, trespass, strict liability and state statutory claims for personal injury, medical monitoring and property damage alleging drinking water contamination ( filed 2011, pending)

# Fracking Litigation Reference List Other Property Damage Lawsuits to Date Include:

Alabama

• **Kennedy v. Jim Walter Resources, Inc., et al.** (No. CV

2011

- 900276.00, Circuit Court Ala .)

– Negligence, trespass and nuisance claims alleging noise and damage to homes from subsidence ( filed 2011, pending )


## Louisiana

• **Wesley v. J**

**- W Operating Company, Inc.**  (No. 563014

- C, 1st Judicial District Court La .)

– Negligence , nuisance and trespass claims alleging contamination of a drinking water well (filed 2012, pending )


## New York

• **Maring v. Nalbone** (No. K12009001499, N.Y. Sup. Ct. Chautauqua Co .)

– Property damage claims alleging contamination of well water from fracking operations (filed 2009, pending )


## Ohio

• **Mangan v. Landmark 4, LLC**  (No. 1:12

- CV

- 00613, N.D. Ohio ); and **Boggs v. Landmark 4, LLC** (No. 1:12

- CV

00614, N.D. Ohio )

– Negligence, nuisance, battery and fraudulent concealment claims for personal injury, medical monitoring and property damage alleging groundwater contamination by fracking fluid (filed 2012, pending )

18 

## Pennsylvania

• **Berish, et al. v. Southwestern Energy Company, et al.** (No. 3:10

- CV

- 01981, M.D. Pa.)

– Negligence, nuisance, strict liability and statutory claims for personal injuries, medical monitoring and property damage for alleged groundwater contamination (filed 2010, removed to federal court)

• **Butts , et al. v. Southwestern Energy Production**  **Company** (No. 3:12

- CV

- 01130, M.D. Pa .)

– Negligence and nuisance claims for noise , vibration, excessive light and degradation of roads (filed 2012, pending )

• **Fiorentino, et al. v. Cabot Oil & Gas Corporation, et al.** (No. 3:09

- CV

- 02284, M.D. Pa.)

– Negligence, nuisance, strict liability and fraudulent misrepresentation claims for property damage, medical costs and medical monitoring for alleged groundwater contamination; and breach of contract alleging failure to remediate groundwater (filed 2010, motion to dismiss denied in 2010, settled 2012 for $4.1 million)

• **Kamuck v. Shell Energy Holdings GP, LLC, et al.** (No. 4:11

- CV

- 01425, M.D. Pa.)

– Breach of contract claims alleging that lease did not permit drilling in the Marcellus Shale; and negligence, nuisance and strict liability claims for property damage and medical costs from alleged surface water contamination and air emissions (filed 2011, pending)
(continued on next slide)

# Fracking Litigation Reference List Other Property Damage Lawsuits to Date (cont.):

Texas

• **Harris v. Devon Energy Production Co., L.P.** (No. 4:10

- CV

- 00708, N. Tex.)

– Negligence, nuisance, trespass, fraudulent concealment and strict liability claims for personal injury, medical monitoring and property damage alleging groundwater contamination from fracking operations (filed 2010, plaintiffs conceded on summary judgment that they could not prove causation, dismissed 2012)

• **Lipsky v. Range Resources Corp.** (No. CV11

- 0798, Tex. Dist. Ct.)

– A landowner sued a well operator claiming that fracking had caused methane contamination of a drinking water well; the defendant countersued for defamation claiming that the plaintiff and a consultant had falsified both the data and a video showing burning methane gas from a garden hose (filed 2011, plaintiff’s motion to dismiss the counterclaim denied 2012)

• **St . Paul Fire & Marine Insurance Co. v. EOG**  **Resources, Inc.** (No. 2013

- 05158, Tex. Dist. Ct.)

– Negligence claims by an insurance company that reimbursed an insured for damage allegedly caused to its well by adjacent fracking operations by the defendant well operator (filed 2012, pending)

19 

## West Virginia

• **Hagy v. Equitable Production Co.** (No. 10

- CV

- 13722, S.D. W. Va.)

– Negligence, nuisance, trespass and strict liability claims for property damage and medical monitoring regarding alleged contamination of a drinking water well (filed 2010, dismissed on summary judgment in 2012 based on failure to prove negligence)

• **Perna v. Reserve Oil & Gas, Inc** 

**.** ( No. 11

- CV

- 2284 , Circuit Court W. Va .)

– Negligence, trespass, nuisance and state statutory claims by an owner of land leased to the defendant well operator alleging contamination and failure to restore property (filed 2011, pending )

• **Teel v. Chesapeake Appalachia, LLC** (No. 5:11

- CV

000059, W. Va. Circuit Ct .)

– Negligence, trespass, nuisance and state statutory claims by owner of land leased to the defendant well operator alleging contamination and failure to restore property (filed 2011, summary judgment granted for defendant under state law allowing owner of subsurface rights to use the surface in a manner “fairly necessary for the enjoyment of the subsurface estate,” appeal pending)

# Fracking Litigation Reference List Other Personal Injury Lawsuits to Date Include:

Colorado

• **Strudley v. Antero**  **Resources Corp.** ( No. 2011CV2218, Colo. Dist. Ct.)

– Negligence, nuisance, trespass and strict liability claims for alleged personal injuries and medical monitoring regarding well contamination allegedly caused by fracking operations (filed 2011, court entered Lone Pine case management order requiring threshold showings of harm and causation, dismissed with prejudice in 2012 after plaintiffs failed to make prima facie showing of causation)


## Ohio

• **Mangan v. Landmark 4, LLC** (No. 1:12

- CV

- 00613, N.D. Ohio); and **Boggs v. Landmark 4, LLC** (No. 1:12

- CV

00614, N.D. Ohio )

– Negligence, nuisance, battery and fraudulent concealment claims for personal injury, medical monitoring and property damage alleging groundwater contamination by fracking fluid (filed 2012, pending )

20 

## Pennsylvania

• **Berish, et al. v. Southwestern Energy Company, et al.** (No. 3:10

- CV

- 01981, M.D. Pa.)

– Negligence, nuisance, strict liability and statutory claims for personal injuries, medical monitoring and property damage for alleged groundwater contamination (filed 2010, removed to federal court)

• **Fiorentino , et al. v. Cabot Oil & Gas Corporation, et al.**  (No. 3:09

- CV

- 02284, M.D. Pa.)

– Negligence, nuisance, strict liability and fraudulent misrepresentation claims for property damage, medical costs and medical monitoring for alleged groundwater contamination; and breach of contract alleging failure to remediate groundwater (filed 2010, motion to dismiss denied, settled 2012 for $4.1 million)

• **Kamuck v. Shell Energy Holdings GP, LLC, et al.** (No. 4:11

- CV

- 01425, M.D. Pa.)

– Breach of contract claims alleging that lease did not permit drilling in the Marcellus Shale; and negligence, nuisance and strict liability claims for property damage and medical costs from alleged surface water contamination and air emissions (filed 2011, pending)
( continued on next slide)

# Fracking Litigation Reference List Other Personal Injury Lawsuits to Date (cont.):

Texas

• **Harris v. Devon Energy Production Co., L.P.** (No. 4:10

- CV

- 00708, N. Tex .)

– Negligence , nuisance, trespass, fraudulent concealment and strict liability claims for personal injury, medical monitoring and property damage alleging groundwater contamination from fracking operations (filed 2010, plaintiffs conceded on summary judgment that they could not prove causation, dismissed 2012)

• **Mitchell v. Encana Oil & Gas (USA), Inc., et al.** (No. 3:10

- CV

- 02555, N. Tex.)

– Negligence, nuisance, fraudulent concealment and strict liability claims for personal injury, medical monitoring and property damage for groundwater contamination allegedly caused by fracking operations (filed 2010, settled 2011)

21 

## West Virginia

• **Bombardiere v. Schlumberger Tech. Corp.** (No. 11

- 00050, N.D. W.Va.)

– Claims by a contractor for personal injuries allegedly caused by workplace exposure to fracking fluids at a well site (filed 2011, independent medical examination report found only one valid occupational injury and concluded that it already had been treated, dismissed 2013)

• **Hagy v. Equitable Production Co.**  (No. 10

- CV

- 13722, S.D. W. Va.)

– Negligence, nuisance, trespass and strict liability claims for property damage and medical monitoring regarding alleged contamination of a drinking water well (filed 2010, dismissed on summary judgment in 2012 based on failure to prove negligence )

# Fracking Litigation Reference List Lawsuits Regarding Lease Disputes Include:

New York

• **Longo v. Chesapeake Appalachia LLC, et al.** (No. 5:12

- CV

- 00371, N.D.N.Y .)

– Claims for declaratory judgment and state statutory violations filed by a landowner alleging that the State’s 2008 suspension of fracking operations did not automatically extend the term of a drilling company’s lease under the “force majeure” doctrine (filed 2012, dismissed 2012)

22 

## Pennsylvania

• **Fiorentino, et al. v. Cabot Oil & Gas Corporation, et al.** (No. 3:09

- CV

- 02284, M.D. Pa.)

– Negligence, nuisance, strict liability and fraudulent misrepresentation claims for property damage, medical costs and medical monitoring for alleged groundwater contamination; and breach of contract alleging failure to remediate groundwater (filed 2010, motion to dismiss denied, settled 2012 for $4.1 million)

• **Kamuck v. Shell Energy Holdings GP, LLC, et al.** (No. 4:11

- CV

- 01425, M.D. Pa.)

– Breach of contract claims alleging that lease did not permit drilling in the Marcellus Shale; and negligence, nuisance and strict liability claims for property damage and medical costs from alleged surface water contamination and air emissions (filed 2011, pending)

# Fracking Litigation Reference List Lawsuits by Environmental Groups Include:

Arkansas

• **Ozark Society v. U.S. Forest**  **Service** (No. 4:11

- CV

00782, E.D. Ark.)

– Challenge to leases of federal land for gas exploration, alleging that the Service failed to analyze environmental impacts sufficiently under NEPA (filed 2011, preliminary injunction denied, pending )


## California

• **Center for Biological Diversity v**  **. Cal. Dept. of Conservation**  ( Super . Ct. Alameda County, No

. RG12652054)

– Challenge to issuance of oil and gas permits that allow fracking (filed 2012)

• **Center for Biological Diversity v.**  **U.S. Bureau of Land Management**  (No

. 11

- CV

- 6174, N.D . Cal .)

– Challenge to leases of 2,600 acres of federal land for oil development, alleging that the Bureau failed to analyze environmental impacts sufficiently under NEPA (filed 2011, pending)


## New York

• **Env. Working Group v.**  **Dept . of**  **Env. Protection** (N.Y

. Sup. Ct. Albany Co .)

– FOIA lawsuit seeking documents regarding the oil and gas industry’s involvement in drafting fracking regulations (filed 2012, pending)

23 

## Pennsylvania

• **Clean Water Action v. Municipal Authority of McKeesport** (No. 2:11

- CV

- 00940, W.D. Pa.)

– Citizen suit under the Clean Water Act and state law, alleging that a municipal water treatment plant discharged pollutants from shale gas operations in violation of a permit (filed 2011, settled 2012)

• **Citizens for Pennsylvania’s Future v. Ultra Resources, Inc.** (No. 4:11

- CV

- 1360, M.D. Pa.)

– Citizen suit under the Clean Air Act and state law, alleging that defendant failed to obtain necessary permits for oil and gas wells and failed to meet emission standards (filed 2011, pending)


## Multi

- State

• **Delaware Riverkeeper Network v. U.S. Army**  **Corps of Engineers**  (No. 11

- CV

- 3780, E.D.N.Y.)

– Suit to enjoin fracking regulations proposed by the Delaware River Basin Commission for natural gas development in New York and Pennsylvania until the U.S . Army Corps of Engineers prepares an Environmental Impact Statement under NEPA (filed 2011, pending)