Wednesday, July 25, 2018

Shale Law in the Spotlight – Overview of Recent Legal Actions Relating to Induced Seismicity Damage Claims in the United States (Part 3 of 3)

Written by Chloe Marie – Research Fellow

This article provides an overview of recent legal developments relating to induced seismicity damage claims in the United States. This article is the third in a series that will look at select cases addressing this issue. The first article in this series was published on July 18, 2018, and the second was published on July 20, 2018.

Bryant v. Eagle Road Oil, LLC et al., in the District Court of Pawnee County, Oklahoma (Docket No. CJ-17-18)

On March 8, 2017, Janice and Johnny Bryant filed a lawsuit against Eagle Road Oil LLC, Cummings Oil Company, and several unnamed entities engaged in wastewater disposal activities in Pawnee County, Oklahoma, claiming that defendants “introduced contaminants into the natural environment that caused an adverse change to it in the form of unnatural seismic activitiy.” Plaintiffs alleged that defendants are responsible for the occurrence of an M5.8 earthquake in Pawnee County and its numerous aftershocks that affected plaintiffs on September 3, 2016, and the subsequent days.

Plaintiffs asserted they suffered personal and property damages arising from defendants’ negligence in operating wastewater injection wells, and they sought recovery of compensatory and punitive damages. 

Motions to dismiss the complaint have been filed by defendants. The case is still pending. 

Reid et al. v. White Star Petroleum, LLC et al., in the District Court of Payne County, Oklahoma (Docket No. CJ-16-543)

On December 5, 2016, David and Myra Reid along with other plaintiffs filed a class action petition against White Star Petroleum, LLC and various other energy companies seeking compensation for personal and property damages suffered by plaintiffs following an induced earthquake that occurred around Cushing, Oklahoma, on November 7, 2016. Defendants are engaged in wastewater injection well operations, and plaintiffs claimed that defendants induced said earthquake because of wastewater injection activities. 

Defendant White Star Petroleum, LLC filed a motion to dismiss the class action petition on December 30, 2016, as did defendant FHA Investments, LLC on February 23, 2017. The court denied defendants’ motions on May 31, 2017, and on March 1, 2018, stayed the case until September 6, 2018.

Adams et al. v. Eagle Road Oil, LLC et al. in the District Court of Pawnee County (Docket No. CJ-16-78); in the U.S. District Court for the Northern District of Oklahoma (Docket No. 4:16-cv-00757)

On November 17, 2016, James Adams filed a class action petition against Eagle Road Oil LLC, Cummings Oil Company, and several other unnamed entities to recover damages resulting from the M5.8 earthquake that occurred on September 3, 2016, around Pawnee as well as the aftershocks that occurred the following days. Plaintiffs asserted multiple claims for negligence, private nuisance, and trespass. Plaintiffs alleged that “Defendants’ actions, in knowingly causing seismic activity as a result of their injection well operations, constitute wanton or reckless disregard for public or private safety, and are thus subject to a claim for punitive damages.” The case was removed to federal court on December 21, 2016. 

On December 27, 2016, Defendant Cummings Oil Company filed a motion to dismiss plaintiff’s class action petition for failure to state a claim, and on January 4, 2017, Defendant Eagle Road Oil LLC moved to dismiss the complaint. 

On January 20, 2017, plaintiff James Adams filed a motion to remand the case to state court, which was granted by the court on April 12, 2017. The court scheduled an evidentiary hearing for August 23, 2018, to determine whether wastewater injection well activities should be considered ultra-hazardous.

Hearn v. BHP Billiton Petroleum (Arkansas) Inc. et al., in the Circuit Court of Faulkner County, Arkansas (Docket No. 23CV-11-492); in the U.S. District Court for the Eastern District of Arkansas (Docket No. 4:11-cv-00474)

On May 24, 2011, Stephen Hearn filed a class action petition against BHP Billiton Petroleum (Arkansas) Inc., BHP Billiton Petroleum (Fayetteville) LLC, Chesapeake Operating, Inc. and Clarita Operating, LLC, alleging that their oil and gas drilling operations caused an induced earthquake on February 28, 2011, near Greenbrier and Guy in central Arkansas. Plaintiff also argued that the earthquake’s occurrence “is directly linked and contributed to by Defendants’ operations and injection wells, and substantially and unreasonably interferes with the Plaintiff and the Class’ use and enjoyment of their property and causes reasonable fear of the safety of the Class.” In addition, plaintiff pointed out that defendant’s actions “have caused the price and deductibles for earthquake insurance in the Central Arkansas area to skyrocket as well as detrimentally impacted property values.”

Plaintiff sought to obtain compensatory and punitive damages as well as injunctive relief preventing defendants from conducting any more activity that would lead to further seismic activity. The case was removed to federal court on June 9, 2011. 

On August 2, 2011, Stephen Hearn filed, along with other plaintiffs involved in similar cases, a motion to consolidate the following actions: 

-       Frey et al. v. BHP Billiton Petroleum Arkansas Inc. et al., Docket No. 4:11-cv-0475;
-       Lane et al. BHP Billiton Petroleum Arkansas Inc. et al., Docket No. 4:11-cv-0477; and
-       Palmer et al. v. BHP Billiton Petroleum (Arkansas) Inc. et al. Docket No. 4:11-cv-0476.

The court granted such motion on August 31, 2011, with Hearn v. BHP Billiton Petroleum (Arkansas) Inc. et al., 4:11-cv-00474 becoming the lead case. On August 28, 2013, the court dismissed the consolidated Hearn, Palmer, and Lane cases. On March 20, 2014, it also dismissed the Frey case with prejudice. The case is now closed.

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