Hydraulic Fracturing Lawsuits: Plaintiffs Can Use the Court System to Sue Oil Companies Contributing to Damage through Hydraulic Fracturing (“Fracking”) Georgetown International Environmental Law Review

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Plaintiffs Can Use the Court System to Sue Oil Companies Contributing to Damage through Hydraulic Fracturing (“Fracking”)

by Tyler Bridegan, Staff Contributor

A recent Oklahoma Supreme Court order has signaled a new, common sense approach to liability arising from man-made earthquakes. Over the past few years, a dramatic increase in the number of earthquakes in Oklahoma is widely believed to be attributable to the fracking activities by oil companies and their subsequent use of wastewater disposal wells. Significant political and legal barriers, such as the Oklahoma Corporation Commission (OCC), have prevented any personal injury lawsuits from being brought against oil companies utilizing hydraulic fracturing. The Oklahoma Supreme Court recently reversed a previously granted motion to dismiss a personal injury lawsuit in which a woman sought damages after an earthquake caused her chimney to crumble and debris to land on her legs, causing her severe injury.[1] This case is the first to survive a motion to dismiss in the state of Oklahoma.

 Increased Earthquakes and Subsequent Damages

It is well established that since 2009, the earthquake rate in the central United States dramatically increased.[2] Within this increase was the largest earthquake ever recorded in Oklahoma, which occurred in November 2011 near Prague, Oklahoma.[3] This earthquake registered a 5.6-magnitude.[4] The earthquake destroyed 6 houses, 20 homes sustained major damage (averaging $80,000 per home for repairs), and 38 homes had minor damage (estimated repair costs of $13,000 per home).[5]

After the earthquake in Prague, the past few years (2013–2015) have seen a continuous increase in the rates of earthquakes, thus raising concerns for potential hazard to local communities and energy-industry infrastructure in central Oklahoma.[6] In 2013, Oklahoma experienced 109 magnitude 3+ earthquakes and five times that amount in 2014.[7] The current average rate of earthquakes is approximately 600 times historical averages and earthquake activity continues to accelerate in 2015.[8] Notably, although there have been increased efforts to monitor earthquake activity, the increase in recorded earthquakes are not a result of improved seismic-network monitoring capabilities.[9]

Recent Legal Developments

In Ladra v. New Dominion, LLC, Sandra Ladra brought a class action against multiple oil companies that were participating in fracking near her home and became the first case to survive a motion to dismiss.[10] The defendant oil companies responded to her complaint with a motion to dismiss arguing the district court lacked jurisdiction because the Oklahoma Corporation Commission had exclusive jurisdiction over the claims.[11] The district court granted the motion to dismiss but the Supreme Court of Oklahoma overturned their decision.[12] If the Court had not overturned the lower court’s ruling, any citizen of Oklahoma wanting to sue an oil company participating in fracking would have had to bring their case to the Oklahoma Corporation Commission.

The Background of the Oklahoma Corporation Commission

The Oklahoma Corporation Commission is made up of three elected Republican commissioners.[13] Presently, the Commission regulates oil and gas drilling, production and environmental protection; the safety aspects of motor carriers; rail and pipeline transportation; and the environmental integrity of petroleum storage tank systems.[14] Recently, in response to research suggesting a wastewater disposal-earthquake link, the Commission developed a plan covering hundreds of disposal wells to examine if they are injecting too deep into the ground and requiring that they not be as deep.[15] The agency also implemented a volume cutback plan for areas with recent heavy earthquake activity.[16]

The Supreme Court of Oklahoma’s Decision Is Common Sense

Ultimately, the Supreme Court of Oklahoma held that district courts have jurisdiction over private tort actions when regulated oil and gas operations are at issue and this jurisdiction does not exert inappropriate oversight and control over the Oklahoma Corporation Commission.[17] For justice to prevail, a politically motivated panel such as the OCC should not have control over whether a victim from an induced earthquake has a claim. Thus, a district court has the power to inquire into the validity of an OCC order to ascertain if the OCC had jurisdiction to issue the order in the first place.[18] The Court noted that an OCC order “does not immunize the operator, or other parties connected to the pooling order, from lawsuits in the district courts.”[19] Rather, district courts simply cannot reverse, modify, or correct OCC orders.[20]

The Potential for Oil Companies To Be Held Liable Now Exists

With the Supreme Court of Oklahoma’s decision, there is now the possibility for people who have suffered injury from fracking and wastewater injection induced earthquakes to get relief through the courts. Because of the make-up of the Oklahoma Corporation Commission, it is easy to speculate that little relief would have been afforded to any of the victims.

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[1] Ladra v. New Dominion, LLC, 2015 OK 53, 353 P.3d 529.

[2] William L. Ellsworth Injection-Induced Earthquakes: Science, 341, no. 6142, 142–149.

[3] Oklahoma Geological Survey, http://www.okgeosurvey1.gov/pages/earthquakes/information.php.

[4] Id.

[5] Z. Branstetter & C. Killman, Earthquake politics: “We don’t work in a vacuum,” Oklahoma state seismologist says: Tulsa World, 10 February 2015, http://www.tulsaworld.com/earthquakes/earthquake-politics-we-don-t-work-in-a-vacuum-oklahoma/article_9cea5c50-246a-5f6d-8b98-3b7979430ca6.html, accessed 20 February 2015.

[6] D.E McNamara, H.M. Benz, R.B. Hermann, E.A. Bergman & M. Chapman, The MW 5.8 central Virginia seismic zone earthquake sequence of August 23, 2011: Constraints on earthquake source parameters and fault geometry: Bulletin of the Seismological Society of America, 104, 40–54.

[7] Office of the Secretary Of Energy & Environment, http://earthquakes.ok.gov/what-we-know/ (last visited Jan. 19, 2015).

[8] Id.

[9] Id.

[10] Ladra, 353 P.3d at 530.

[11] Id.

[12] Id.

[13] Oklahoma Corporation Commission, http://www.occeweb.com/index.html (last visited Jan. 19, 2015).

[14] Id.

[15] Dow Jones Business News, Oklahoma Quakes Linked to Industrial Activity, Study Says (Oct. 22, 2015, 5:25 AM), http://www.nasdaq.com/article/oklahoma-quakes-linked-to-industrial-activity-study-says-20151022-00158.

[16] Id.

[17] Ladra, 353 P.3d at 532.

[18] Pelican Prod. Corp. v. Wishbone Oil & Gas, Inc., 1987 OK CIV APP 74, ¶ 13, 746 P.2d 209, 212.

[19] Grayhorse Energy, LLC v. Crawley Petroleum Corp., 2010 OK CIV APP 145, 245 P.3d 1249.

[20] Id. (citing 52 O.S. 2011, § 111).

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