Landowners Group Responds to Decision in Waste Pit Appeal

West Virginia Surface Owners’ Rights Organization
1500 Dixie Street, Charleston, WV 25311
(304) 346-5891 – FAX: (304) 346-8981
www.wvsoro.org
 
Contact: Julie Archer, WV Surface Owners’ Rights Organization, (304) 610-9094, julie@wvsoro.org
 
Landowners Group Responds to Decision in Waste Pit Appeal, September 9, 2013

Ruling Disappointing, but Leaves Door Open to Others’ Claims of Unreasonable Use
 
(Charleston, W.Va.) – Last week, a three-judge panel of the Fourth U.S. Circuit Court of Appeals upheld a West Virginia judge’s ruling in favor of Chesapeake Energy in a dispute over natural gas drilling waste pits at the company’s operations. The lower court ruled that creating drilling waste pits on the surface owners’ land was “reasonably necessary” for the recovery of oil and gas and that the pits and burial of the waste contained within them “did not impose a substantial burden” on the landowners’ property.  U.S. District Judge Frederick Stamp issued the lower court ruling in case brought against Chesapeake by surface landowners in Wetzel County.
 
The WV Surface Owners’ Rights Organization (WV-SORO), a statewide membership organization that advocates on behalf of landowners, acknowledged the ruling was disappointing, but said that it left the door open to many claims surface owners have about unreasonable use of their property.
 
“It is certainly a disappointment that the Fourth Circuit held that Chesapeake could bury pit waste on Marty and Lisa Whiteman’s land.  However, after talking to our lawyers, we think that the ruling will not generally harm the legal rights of surface owners, particularly those subject to horizontal drilling in the Marcellus and other shales,” said Julie Archer of WV-SORO.  
 
The decision stated that “determining the scope of a mineral estate owner’s implicit surface use rights is a factually intensive process and each case should be evaluated accordingly in light of the fact that what is ‘necessary’ is a fluid concept.”  “This holds the door open to many of the claims that surface owners have about unreasonable use of their surface,” said Archer.
 
According to an analysis by WV-SORO’s lawyers, the decision does not address the issue of the driller’s use of one surface owner’s land to develop minerals under neighboring mineral tracts.  “This is surface owners’ clearest defense in objecting to the use of their surface land to drill, because with horizontal drilling, the driller is drilling not only into the minerals under the surface owner, but is also drilling as many as six or more horizontal well bores into hundreds of acres of surrounding mineral tracts,” said Archer.
 
The decision also stated that, “[T]he record below supports a finding that the drill waste pits do not impose a substantial burden on the Whiteman’s surface property.  One of Chesapeake’s expert opined that the drill waste pits have not affected the Whitemans’ property value at all . . . [and that the] Whitemans failed to rebut this expert opinion, offering none of their own . . . only . . . the subjective fear of Lisa Whiteman.”  
 
WV-SORO believes that this conclusion is something that surface owners will easily rebut in future cases.  While it remains legal despite the readily available alternatives mentioned in the Court’s opinion, most drillers have now stopped burying pit waste on surface owners.  “We believe this is because the drillers have decided that the burying of these wastes is not reasonably necessary to carry out their operations due to the volume of waste generated and also the presence of naturally occurring radioactive materials (NORMs), “ said Julie Archer of WV-SORO. “The Legislature seems to agree, as they have said this waste can only be buried on site if the surface owner consents.”
 
Archer added that it was good news that the decision acknowledged that, “. . . West Virginia’s regulatory scheme does not create a right of the lessor to commit a trespass if the specific use is not granted or implied in a lease. . . ”
 
“Our lawyers say that too frequently trial court judges have equated the approval of drillers’ permit applications by the Department of Environmental Protection as some affirmation that the drillers have the property rights to do what they propose — as if getting a building permit from a city gave someone title to a lot they did not own,” Archer said.
 
“Unfortunately, the Fourth Circuit decision also suggests that monetary value is all that is important.  We think it is a trespass if you do not want somebody on your land, even if they are improving the value,” said Archer. “Also the Fourth Circuit decision seems to view any and all surface use as reasonably necessary unless it virtually destroys the surface or is otherwise totally incompatible with the rights of the surface owner. We think that holding is incompatible with the West Virginia Supreme Court case of Buffalo Mining Co. v. Martin,” she said, pointing out that West Virginia Supreme Court opinions on property law are more binding than Federal Court decisions.  
 
The Buffalo Mining case (165 W.Va. 10, 267 S.E.2d 721 (1980) dealt precisely with the issue of surface uses by mineral developers that were not specifically allowed in the severance deed that divided ownership of the surface from ownership of the minerals.  In that case, the West Virginia Supreme Court said:
 
“[W]here implied as opposed to express rights are sought, the test of what is reasonable and necessary becomes more exacting, since the mineral owner is seeking a right that he claims not by virtue of any express language in the mineral severance deed, but by necessary implication as a correlative to those rights expressed in the deed. In order for such a claim to be successful, it must be demonstrated not only that the right is reasonably necessary for the extraction of the mineral, but also that the right can be exercised without any substantial burden to the surface owner.” Buffalo Mining, 267 S.E.2d at 725-26 (emphasis added).
 
Archer said the Whiteman case is a reminder that West Virginia was not prepared to handle the huge volumes of waste being generated by Marcellus Shale development. “We are glad drillers are moving away from disposing of this waste on surface owners’ land. However, considering it’s toxic nature, we remain concerned about how it is being disposed of in county and municipal landfills and the threats posed to our groundwater and the environment for the waste that has already been buried on site. Drilling waste pits contain characteristically hazardous waste, despite the  statutory exemption for oil and gas waste under the federal Resource Conservation and Recover Act (RCRA).”

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The Whiteman case was covered in the Morgantown Dominion Post here. There was also a short AP article in the Charleston Gazette here.