In August, a Colorado trial court dismissed Evenson v. Antero Resources, a putative class action brought by Battlement Mesa, Colo., residents attempting to stop natural gas development using the technique known as hydraulic fracturing or “fracking” in their community.
Fracking involves injection of a fluid mixture, typically consisting primarily of water, sand and a very small proportion of chemicals (typically less than 1 percent of the volume) into shale rock under high pressure to crack the rock formation and release natural gas.
Potential environmental impacts from fracking have been the subject of substantial controversy. Initially, concerns focused on potential groundwater contamination, with either methane, as alleged in several highly publicized cases in Dimock, Pa, or fracking fluid constituents (some of which have been classified as hazardous by regulators), purportedly identified in a draft Environmental Protection Agency report on Pavillion, Wyo., that was harshly criticized and the EPA subsequently backed away from by agreeing to conduct additional testing.
More recently, concerns have focused on potential air emissions from fracking operations and earthquakes potentially associated with deep injection wells used to dispose waste water.
Fracking has spawned approximately four dozen private tort lawsuits claiming personal injury, medical monitoring, property damage and various forms of injunctive relief.
Of the fracking tort suits filed to date, Evenson was probably the most interesting because it was an implicit test case for a novel legal theory — anticipatory nuisance. Plaintiffs did not explicitly characterize Evenson as an anticipatory nuisance case, but the characterization is apt.
The plaintiffs cited one historical incident in which Antero allegedly received a notice of violation from state regulators for hydrocarbon odors emanating from an existing well pad near Battlement Mesa. Most of the plaintiffs allegations, however, were not related to past events or current alleged injuries, but the plaintiffs’ contention that irreversible future harm was “reasonably certain” to occur as a result of fracking operations yet to begin.
The plaintiffs relied heavily upon a “Health Impact Analysis" (HIA) commissioned by the Garfield County Board of County Commissioners and prepared by the Colorado School of Public Health to support their contention that future harm would probably occur as a result of fracking.
The HIA had two stated goals: to identify ways that proposed natural gas development “can affect the health of Battlement Mesa residents;” and to develop recommendations “to minimize the potential health impacts.” The HIA concluded, “the health of Battlement Mesa residents will most likely be affected by chemical exposures, accidents/emergencies resulting from industry operations, and stress-related community changes.” Using risk assessment techniques that are not designed to prove causation but to identify potential impacts among the most sensitive members of the population, with wide margins of safety built in, the HIA identified airborne exposures to chemicals released during fracking operations as having the greatest potential impact on human health for residents living within a half mile of a well pad.
As initially filed, Evenson asserted three claims for relief: diminished property value, medical monitoring and equitable relief establishing a medical monitoring fund and imposing conditions on gas development to prevent “hazardous spills, releases, emissions and discharges.”
In response to a motion to dismiss, the court noted that the status of medical monitoring as either a claim or a remedy was uncertain under Colorado law but undoubtedly depended upon an allegation of underlying tortious conduct by the defendant. Similarly, the court reasoned that any stigma allegedly associated with fracking that reduced property values was “not actionable” in itself, “absent a recognized cause of action such as trespass or nuisance.” Concluding that the plaintiffs had failed to assert any cognizable claims to support the requested relief, the court dismissed the initial complaint in its entirety, with leave to amend.
The plaintiffs subsequently filed a First Amended Complaint that included a single claim — equitable relief in the form of a permanent injunction prohibiting Antero from “conducing any oil or gas drilling activities” in Battlement Mesa. The plaintiffs alleged that they had a “reasonable fear of imminent and substantial harm.”
In addition to the HIA, the plaintiffs cited an alleged increase in breast cancer rates in six Texas counties with substantial natural gas development, the EPA’s draft report concerning alleged groundwater contamination in Pavillion, Wyo., and Antero’s alleged history of safety violations to support their claims.
According to the plaintiffs, the following alleged consequences of drilling were “reasonably certain” to occur: exposure of the plaintiffs and their properties to “toxic and hazardous substances,” “noxious malodors,” “environmental contamination and polluting events,” diminished property values, interference with property rights and “significantly increased risk of contracting serious latent disease.”
Ruling on a second motion to dismiss, the court concluded that it lacked jurisdiction over the plaintiffs’ claims for several reasons.
First, the court held that it lacked jurisdiction to grant the requested relief. To enjoin natural gas development “would, in effect, revoke or preclude the issuance of a drilling permit by the Colorado Oil and Gas Conservation Commission.” The court found that both Colorado’s Administrative Procedure Act and Oil and Gas Conservation Act provided statutory mechanisms for seeking judicial review of any permits issued to Antero. The court rejected the plaintiffs’ futility argument and refused to let plaintiffs make an end run around the requirement that they exhaust their statutory remedies before pursuing tort remedies.
Second, the court held that the plaintiffs’ claims were not ripe and found that the plaintiffs’ claims were contingent upon events that might not occur: Antero’s seeking and the commission granting drilling permits. Similarly, the court noted that Antero’s alleged history of spills is “no guarantee that future accidents will occur.” The court held that plaintiffs “cannot support tort claims until the injuries actually occur or begin to occur.”
Dismissal of the Evenson case represents a significant setback for plaintiffs hoping to make new law to facilitate future fracking claims. Anticipatory nuisance is a critical component of a strategy that, if successful, would permit plaintiffs to bring claims now, rather than later, if and when an injury in fact occurs.
Moreover, this strategy maximizes the number of potential plaintiffs since there are more people potentially at risk than there are people (if any) who will, in fact, ultimately be injured. And, by setting the bar for proof of injury so low, an anticipatory nuisance theory maximizes the potential for a judicial finding of commonality that could permit aggregation of claims in a class action.
The Evenson court’s rejection of this implicit anticipatory nuisance claim at the motion to dismiss stage, particularly in this case, where the plaintiffs relied upon a neutral, third-party study purporting to find a likelihood of future adverse health impacts in the precise community at issue, represents a significant defense victory.
Law360, New York (September 25, 2012, 2:30 PM ET)