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Missouri Lawyer Brings Nuisance Claims to Fracking Arena

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Photographer: Orlin Wagner/AP

A file photo from 2009 shows Charlie Speer, attorney at Speer Law Firm P.A. at a hog operation in Missouri. In 1999, Speer said he filed similar lawsuits against two hog farms in northern Missouri on behalf of a group of residents who said the smells and runoff from the factories constituted an “unreasonable use of their property.”

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Photographer: Orlin Wagner/AP

A file photo from 2009 shows Charlie Speer, attorney at Speer Law Firm P.A. at a hog operation in Missouri. In 1999, Speer said he filed similar lawsuits against two hog farms in northern Missouri on behalf of a group of residents who said the smells and runoff from the factories constituted an “unreasonable use of their property.” Close

A file photo from 2009 shows Charlie Speer, attorney at Speer Law Firm P.A. at a hog operation in Missouri. In 1999,... Read More

Photographer: Spencer Platt/Getty Images

A natural gas drill is viewed at a hydraulic fracturing site in South Montrose, Pennsylvania. Advances in hydraulic fracturing, or fracking and horizontal drilling, have spurred a boom in states such as Pennsylvania. Close

A natural gas drill is viewed at a hydraulic fracturing site in South Montrose, Pennsylvania. Advances in hydraulic... Read More

Photographer: Mladen Antonov/AFP via Getty Images

Workers change pipes on a horizontal gas drilling rig exploring the Marcellus Shale outside the town of Waynesburg, Pennsylvania. Since 2009, more than 35 lawsuits that allege fracking contaminated water have been filed in eight states, according to a Jan. 1 report from the law firm Fulbright and Jaworski LLP. Close

Workers change pipes on a horizontal gas drilling rig exploring the Marcellus Shale outside the town of Waynesburg,... Read More

Photographer: Andrew Harrer/Bloomberg

Complaints have come that say drilling has spoiled water and air, damaged roads, and altered the rural character of areas where gas is now being produced. Close

Complaints have come that say drilling has spoiled water and air, damaged roads, and altered the rural character of... Read More

Six Pennsylvania families who sued Chevron Corp. (CVX) and units of The Williams Companies Inc. and WPX Energy Inc. (WPX) over hydraulic fracturing-related claims have turned to a Missouri lawyer who has used nuisance allegations to win cases against commercial animal feed operations.

The Fayette County residents last week alleged in a state court lawsuit that the energy companies’ fracking efforts leaked methane and polluted water, while their employees intimidated them and even ruined a breeding stock of Black Angus cows. The focus of their lawsuit, however, isn’t the property damage so much as the offensive byproducts of the operations, a legal tactic that has begun to gain traction as courts consider the application of nuisance law to the natural gas boom.

“You avoid some of the really difficult causation issues,” Kate Sinding, a senior attorney with the Natural Resources Defense Council, said in an interview, referring to the difficulty in proving specific damages in fracking cases. “You could show an interference with use of and enjoyment of one’s property without conclusively demonstrating that a gas company for example had contaminated a particular water well.”

Nuisance suits are based in part on the loss of such use and enjoyment of property, often through noise, odors or vibration, as opposed to physical damage like poisoned water. The attorney for the families, Charlie Speer, of Speer Law Firm P.A. in Kansas City, claims such litigation in the fracking context may face an easier path through courts because it doesn’t rely on scientific evidence.

Chemically Treated

In fracking, millions of gallons of chemically treated water and sand are forced underground to free trapped gas and oil. The technology has boosted energy production and positioned the U.S. to surpass Saudi Arabia as the world’s largest oil producer by the end of the decade, according to the Paris-based International Energy Agency.

Nuisance claims like those filed by the Fayette County residents are growing in popularity, lawyers said, as more plaintiffs include them in complaints containing a spectrum of environmental allegations against drillers and distributors.

“I call them quality-of-life lawsuits,” Speer said in an interview. “I consider these to be private property rights cases and everybody in this country understands private property rights and values them.”

Nuisance complaints tied to fracking have been filed in at least 10 different states, including several in Pennsylvania, said Josh Galperin, associate director at Yale Law School’s Center for Environmental Law & Policy.

‘Private Property’

“In the case of natural gas drilling, harms stem from actions on and off private property, so the landowners and neighbors tend to present a series of legal claims, and nuisance is typically one,” Galperin said. If plaintiffs in nuisance cases “can show that there has been some substantial and unreasonable damage to the use and enjoyment of their property, they will be entitled to damages. The trick is how a judge or jury will weigh ‘unreasonableness.’ That turns on whether the utility of the activity outweighs its harm.”

In 1999, Speer said he filed similar lawsuits against two hog farms in northern Missouri on behalf of a group of residents who said the smells and runoff from the factories constituted an “unreasonable use of their property.”

A jury awarded $5.2 million to 52 plaintiffs. Speer said he has tried about a dozen cases since then on behalf of about 500 plaintiffs around the country. He said he lost one, which was partially overturned on appeal and ended up in a settlement.

Factory Cases

“I can’t speak definitively on who started this,” Charlie Tebbutt, an environmental attorney in Eugene, Oregon, said in an interview about the agricultural factory cases, “but Charlie Speer has definitely taken it to a new level by bringing them more systematically. Some of the older ones were probably more random, but Charlie has specialized in these kinds of cases.”

Advances in hydraulic fracturing, or fracking, and horizontal drilling have spurred rapid development in states such as Pennsylvania. With that have come complaints that drilling has spoiled water and air, damaged roads, and altered the rural character of areas where gas is now being produced.

Since 2009, more than 35 lawsuits that allege fracking contaminated water have been filed in eight states, according to a Jan. 1 report from the law firm Fulbright & Jaworski LLP. In those cases, homeowners must rely on scientific evidence that may not be conclusive, according to Speer.

In a nuisance complaint, the jury is asked to consider “the massive intrusion into peoples’ lives as a result of the drilling for natural gas,” Speer said. The Fayette County complaint, which he said was filed June 6, couldn’t immediately be confirmed in court records.

Fayette County

Fayette County, part of Pittsburgh’s metro area, has a population of about 145,000 in 790 square miles, according to the county’s website. The county is home to Frank Lloyd Wright’s architectural masterpiece Fallingwater and the state’s largest cave, Laurel Caverns. Uniontown, the county seat located about 50 miles southeast of Pittsburgh, is the birthplace of the McDonald’s Corp.’s Big Mac, according to the county.

Among the plaintiffs in Speer’s suit is Joseph Bezjak, a 75-year-old beef farmer, who said he agreed in 2010 to let Laurel Mountain Midstream Operating LLC, a subsidiary of Williams, run a 16-inch gas line across his 700-acre farm for $20 a foot of pipe.

Last year, the company tore down a fence on his property, leading to the interbreeding of cattle and ruining the Black Angus stock Bezjak had developed over 40 years.

Pumped Wastewater

Bezjak also alleged Williams pumped wastewater from an abandoned mine onto parts of his pasture “causing large black spots on the land,” according to the complaint.

“They got me spiritually, physically and emotionally upset,” Bezjak said in an interview. “I want to be made whole. My property’s been damaged. My cattle will never be the same.”

Tom Droege, a spokesman for Tulsa, Oklahoma-based Williams Cos., Brian Begley, a spokesman for Pittsburgh-based Atlas Energy LP (ATLS), and Russell Johnson, a spokesman for San Ramon, California-based Chevron, declined to comment.

Susan Oliver, a spokeswoman for Tulsa-based WPX, said her company, which broke from Williams in 2012, doesn’t have operations in Fayette County. Speer said he would drop the company from the case if he discovered an error in his filing.

Fayette County homeowners David and Linda Headley, who own 116 acres of farmland, repeatedly notified Atlas Resources LLC and other defendants about defects in well construction and design, according to the complaint.

New Seals

Efforts by the companies to fix the defects by installing new seals, tanks and bypass lines have failed, according to the complaint. The wells continue to leak dangerous substance, have killed trees and a hayfield used by the Headley’s horses, and routinely make noise, sometimes hourly, according to the filing.

Pennsylvania’s Department of Environmental Protection has repeatedly cited Laurel Mountain Midstream for discharging industrial waste into a creek near the Headley’s property, according to the complaint, which cites violations in June, July and August 2012.

Noise from a compressor station run by Laurel Mountain forced Benjamin Groover, his wife Lori and their two children to abandon their residence in June 2009, according to the court filing. The family has since moved within the county but still own and use the property.

‘Screeching Sound’

Robert Nicklow, who lives within 800 feet of the station, is subjected to a “high decibel screeching sound” that can sometimes last all day as well as toxic substances including benzene, methane and ethane, Speer alleged in the court filing.

“On many occasions, Nicklow is forced to stay indoors,” according to the complaint.

Ben Barros, a professor at Widener Law School in Harrisburg, Pennsylvania, called the specific allegations in Speer’s complaint “fine-grained,” and said one would need to look at the underlying leases to see if the landowners had released the drilling companies from liability.

Speer said the leases don’t inoculate energy companies from such litigation. He said a breach-of-contract suit wouldn’t have been appropriate, either, saying he doesn’t “think the contract speaks about odors and causing harmful effects.”

The Fayette County litigation includes claims by multiple landowners over damages allegedly emanating from fracking on their own property, and from that of neighboring plaintiffs also suing as part of the case.

Deck Chairs

“If its unmanageable for whatever reason, the deckchairs can be rearranged,” Speer said of the complex plaintiff structure, adding that a court could separate landowner claims.

Barros said he wasn’t surprised the landowners were suing the companies together as opposed to suing individually -- or each other -- since they are ultimately seeking compensation from the energy companies.

“Nuisance, at its most basic, says a land owner can do whatever they want with their property as long as they don’t interfere with the use and enjoyment of their neighbor’s property,” University of Kentucky law professor Stephen Clowney said in an interview. One difficulty Clowney said he foresees for the Pennsylvania plaintiffs is that the law typically makes room for technology to change and for the “social utility” of the defendants’ action.

“This may be a case where the court looks at the case and says, ‘yes the plaintiffs are experiencing some harms here, but that the social benefit of fracking is so great, benefiting Pennsylvanians in so many ways, that we’re not going to hold the drilling companies liable,’” he said.

Unsettled Law

Clowney and Barros agreed that, while Speer’s claims aren’t the first in this arena, the relative newness of the industry leaves this particular area of law unsettled.

“Working in the plaintiffs’ favor, these are classic nuisance complaints, noise, seepage on to the land, terrible smells,” Clowney said. “That in and of itself is not new. What we really don’t have is a court that’s come out and said whether or not the law is going to -- despite those harms -- make room for people who are engaging in fracking.”

“Nuisance recognizes that sometimes everybody has to put up with things that are annoying,” he said.

The case is Headley v. Chevron Appalachia LLC, Court of Common Pleas in Pennsylvania, Allegheny County (Pittsburgh).

To contact the reporters on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net; Andrew Harris in the Chicago federal court at aharris16@bloomberg.net; Sophia Pearson in Philadelphia federal court at spearson3@bloomberg.net.

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net; Michael Hytha at mhytha@bloomberg.net.

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