Judge Booker Stephens of McDowell County
Marcellus drilling suits head back to mediation
From an Article by Ken Ward Jr., Charleston Gazette Mail, February 26, 2016
While lawsuits against natural gas drillers are causing a stir among West Virginia lawmakers, the first in a series of those suits is headed back for another shot at settlement through mediation, following a hearing Friday in Charleston.
A three-judge panel hearing the cases against Antero Natural Resources and Hall Drilling said that they wanted the parties to take part in another mediation session after lawyers for the residents dropped one of their two major claims, an allegation that the natural gas companies were operating in a negligent manner.
Alan Moats, a Taylor County circuit judge who heads the panel, encouraged the companies and the residents to try to come up with a settlement that would allow natural gas production to continue, but reduce the impacts on nearby residents and communities. “If there’s anything that can be done that would lessen the impacts these people are experiencing, if we could do that, it would be more important than money,” Moats said.
The parties agreed that they would meet again with McDowell Circuit Judge Booker Stephens, who led a previous mediation session that did not produce a settlement. Moats led Friday’s surprisingly brief hearing, which had been scheduled for arguments on major motions that are pending and need to be resolved before trial. That trial, scheduled for July, is the first in a series of cases filed in at least seven counties by more than 200 people who allege Marcellus Shale operations by the gas industry are disrupting their lives.
The suits, first filed in October 2013, outline concerns regarding noise, dust, excessive traffic, bright lights and a variety of other effects of the boom in the natural gas industry in northern West Virginia. Cases are pending in Doddridge, Harrison, Kanawha, Marion, Monongalia, Pleasants and Ritchie counties. Antero and Hall Drilling, which operate as partners at many sites, are the defendants in almost all of the cases.
In November 2014, the state Supreme Court referred the cases to West Virginia’s Mass Litigation Panel, which often is used to handle complex lawsuits that involve common issues of law and fact, but also involve large numbers of plaintiffs or multiple defendants.
Lawmakers have become interested in the Marcellus cases, and earlier this week the state Senate passed a bill that supports say is aimed at putting a stop to such suits.
Attorneys for the residents, including Charleston lawyers Anthony Majestro and Jim Peterson, brought the cases as nuisance suits, alleging that the industry activity constitutes an unlawful interference with the residents’ use and enjoyment of their property. The lawyers originally claimed negligence by drilling companies, but have since dropped those claims.
In SB508, lawmakers want to narrow the ability of residents to bring nuisance suits. The measure would give defendants a “permit shield” if they have some sort of government authorization for their activities.
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Controversial suits provide window on Marcellus drilling debate
By Ken Ward Jr., Charleston Gazette Mail, Saturday, February 27, 2016
On Friday, a courtroom full of lawyers gathered near downtown Charleston to try to sort a path forward in litigating a series of major lawsuits that allege natural gas drilling in Northern West Virginia has forced residents to live with unbearable traffic, mountains of dust, constant heavy equipment noise, and bright lights that shine into their homes day and night.
At the other end of town, lawmakers at the state Capitol are trying to put an end to those suits, and maybe to any others like them. While lawmakers push through legislation that could severely hamper the ability of residents to bring such suits, a brief look at the cases, through Friday’s hearing and a partial review of the huge collection of court filings generated so far, provides a glimpse into how the state’s legal and political systems are responding to the controversy created when the nation’s demand for cheaper natural gas meets the desires of rural West Virginians to live their lives in peace and quiet.
“We are not saying that they can’t drill,” said Anthony Majestro, lead lawyer for about 200 residents who filed the suits. “There are ways to do this without causing these conditions.” Majestro and other lawyers began filing cases over Marcellus Shale drilling more than two years ago, representing residents like Robert and Deborah Andrews in an area from Harrison County west to the Ohio River and north toward Wetzel County, where advances in horizontal drilling and hydraulic fracturing have brought a boom in natural gas production.
The central claim is that the industry creates what’s known in the law as a nuisance, meaning certain activities unlawfully interfere with the residents’ use and enjoyment of their property. In West Virginia, the key case that determined what is and isn’t a nuisance is called Hendricks v. Stalnaker, which involved an 1989 dispute between neighbors of the competing locations of a drinking water well and a septic system. Under the case, a private nuisance is defined as “a substantial and unreasonable interference with the private use and enjoyment of another’s land.” Further, the case held that in determining if something is a nuisance, courts must balance the “gravity” of the harm caused by the activity in question against the social benefits of that activity.
Lawmakers want to rewrite these standards, so that nuisance cases could not be won if the activity in question was somehow authorized by a government approval, such as a permit from the state Department of Environmental Protection. Supporters of the bill (SB 508) paint the measure as another in a series of changes aimed at making West Virginia more attractive to business by putting limits on lawsuits.
For example, Senate Majority Leader Mitch Carmichael, R-Jackson, has said that, “some of our best corporate citizens are being subjected to 200 and 300 lawsuits.” During Friday’s hearing, though, Majestro told a three-judge panel that is presiding over the cases that almost all of the 200 claims he has pending feature two common defendants: Major gas producer Antero Natural Resources and Hall Drilling, a company that frequently partners with Antero in developing sites. “This industry is all over the state,” Majestro said. “There are a lot of different companies. But the people who come to us and complain seem to have a lot of complaints about one particular company.”
In its recent filings with the U.S. Securities and Exchange Commission, Antero said that similar sorts of nuisance cases are pending against its operations in Colorado, Ohio and Pennsylvania. Antero said that it denies the allegations and will “vigorously defend” against the suits, but that company officials “are unable to estimate the amount of monetary damages, if any, that might result from these claims.”
While its supporters in the West Virginia Legislature want to head off such lawsuits, Antero attorneys are arguing in court that the suits are already invalid under existing state law. For one thing, Antero argues that when companies own or have a lease on natural gas rights, but don’t own the surface land, long-standing West Virginia law gives drillers the right to do whatever is “reasonably necessary” to get at their minerals.
Surface owner rights advocates argue that legal doctrine is outdated, and does not take into account the huge impacts of modern natural gas drilling, compared to industry activities in earlier days. Antero lawyer W. Henry Lawrence also argues, among other things, that there’s no way that the residents Majestro represents could possibly meet the balancing test when the benefits of natural gas production are stacked up against the kinds of nuisances the industry inserts into their lives.
Lawrence cited an expert report — challenged by the plaintiffs — that details the gas industry’s economic contribution to the state, along with numerous court cases and sections of legislative intent that recite the importance to West Virginia of energy extraction industries. “West Virginia law clearly attaches significant social value to mineral development as its stated policy is to support and facilitate mineral development,” Lawrence wrote in one recent court filing.
These legal arguments now rest with three judges of West Virginia’s Mass Litigation Panel, a group appointed by the state Supreme Court to handle complex cases with similar facts and legal questions and large numbers of parties. The panel hearing the Marcellus cases is headed by Taylor Circuit Judge Alan Moats. During Friday’s hearing, Moats picked up on Lawrence’s argument about balancing the benefits of natural gas against the harms to residents in the communities where it’s produced. The judge read from one West Virginia law, the Marcellus Gas Manufacturing and Development Act, that concluded natural gas production should be increased “in the interest of national security … as a replacement for oil imported from other countries.” “The Legislature hasn’t made a finding that this industry is harmful,” Moats said. “The Legislature has made a finding that it is beneficial.”
To further emphasize the importance of natural gas, Moats showed the attorneys a copy of the front page of Friday’s Wall Street Journal, which featured a story that labeled U.S. gas “Europe’s Energy Escape Valve.”
Majestro responded that it would be unfair in his cases to pit the negative effects of the local gas industry on his clients against the nationwide or worldwide energy or economic benefits of the entire natural gas industry. “If you’re going to look at the value of the industry in its entirety, then you have to look at the harms from the industry in its entirety,” Majestro said. “If we’re going to look at national-level value, then we’ve got to look at national-level harm.” Majestro explained that while advances in industry techniques have greatly expanded gas production, they’ve also in many ways consolidated and concentrated drilling and production activities into small, rural communities that in many cases didn’t previously have that level of industrialization.
“Now, we have a big, giant disruption that is concentrated at one location, and the people who live there are the ones who have to bear the burden of it,” Majestro said. “Is it fair that the Andrews have to bear the cost for all of our national security?”
The nuisance law changes are still pending at the Legislature, and Moats and the other two judges — Derek Swope of Mercer County and David Hummel of Marshall County — made no immediate decisions on the lawsuits, except to send the parties back for one more round of mediation, trying to find a settlement. One trial is set for this July and other cases are being scheduled. “Instead of giving everybody an example of how to litigate, maybe you can give the example of how to resolve things and get along,” Swope said in encouraging the mediation. “Why can’t there be some concessions here that are designed in a manner to minimize these impacts? “Would I want one of these wells next to my property? I live in the country on a rural road, and the answer is ‘no.’”