By: Blair M. Gardner
The U.S. District Court for the Middle District of Pennsylvania entered summary judgment in favor of Cabot Oil & Gas Corporation on February 9 in a case arising in Dimock Township, Pennsylvania. Dimock Township is a rural political subdivision of Susquehanna County that is about 29.5 square miles in size and was made famous by the 2010 documentary Gasland. Gasland alleged that hydraulic fracturing used for the 170 gas wells drilled in the township since 2000 contaminated the water wells upon which residents rely. Numerous Hollywood celebrities with fading careers have lent whatever remaining fame they possess to condemn this practice. In short, Dimock has attracted an assortment of crack-pots, Luddites and plaintiffs’ lawyers the way Wyoming’s Devil’s Tower attracted the possessed in the 1977 movie, Close Encounters of the Third Kind.
Lawyers, unlike the other categories of the idle and curious, eventually have to prove their allegations. The plaintiffs’ lawyers failed to do so on Monday. The federal district court granted summary judgment to Cabot Oil & Gas on the plaintiffs’ claim that natural gas drilling constitutes an abnormally hazardous activity. If the plaintiffs had succeeded, they would need only to prove that drilling caused damage to water wells without having to prove any negligence on the part of the drilling operator.
The district court reached its decision by relying on traditional principles of Pennsylvania law. Pennsylvania generally recognizes a strict liability cause of action in tort for abnormally dangerous and ultrahazardous activities. For example, the Pennsylvania Supreme Court has held blasting to be an ultrahazardous activity. See Federoff v. Harrison Constr. Co., 362 Pa. 181, 66 A.2d 817 (1949). The Pennsylvania Superior Court, in a series of cases decided in the 1990s, applies the standards expressed in the Restatement (Second) of Torts to determine if an activity is abnormally dangerous. Section 519 of the Restatement states, in pertinent part, that “[o]ne who carries on an abnormally dangerous activity is subject to liability for harm . . . of another resulting from the activity, although he exercised the utmost care to prevent the harm.” Section 520 identifies the following six factors for courts to employ to determine if an activity is abnormally dangerous:
(a) existence of a high degree of risk of some harm to another person, land or chattels;
(b) likelihood that the harm that results from it will be great;
(c) inability to eliminate the risk by the exercise of reasonable care;
(d) extent to which the activity is not a matter of common usage;
(e) inappropriateness of the activity to the place where it is carried on; and
(f) extent to which its value to the community is outweighed by its dangerous attributes.
The district court concluded that the plaintiffs failed to demonstrate that natural gas well drilling satisfied even a single of these six factors.
Most gratifying was the court’s analysis of the sixth factor, which considers an activity’s value to the community. Reviewing the evidence submitted by Cabot, the court found compelling the economic benefits that drilling provides to the community. For example, the local school district receives monthly royalties sufficient to avoid any tax increases, landowners in Susquehanna County received royalty income in excess of $90 million in a single year, the county receives state-distributed impact revenue and benefits from increased wages and employment, the state receives an increase in income tax payments, Pennsylvania consumers save approximately $3,200 annually on heating bills, and nearly 250,000 jobs in Pennsylvania are linked to natural gas production. In comparison, the court found the plaintiffs “failed to identify sufficiently compelling countervailing evidence that could allow the Court to find that this factor favors the Plaintiffs’ position.”
The cases is Ely v. Cabot Oil & Gas Corporation, 2014 WL 4071640 (M.D. Pa.)
This article was authored by Blair M. Gardner and Aaron S. Heishman, Jackson Kelly PLLC.