Monday, September 16, 2013

WV Surface Owners Lose by the Letter of the Law with trespass suit against Chesapeake


RICHMOND, Va. – A federal appeals court issued an opinion on Sept. 4, affirming a summary judgment defense decision by Judge Frederick P. Stamp in the Northern District of West Virginia in a dispute over the burial of drill cuttings.

A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit heard the case styled Martin Whiteman and Lisa Whiteman vs. Chesapeake Appalachia, LLC, on March 21. Chief Judge William B. Traxler, Jr., Judge Dennis W. Shedd and Judge David A. Faber of the Southern District of West Virginia, sitting by designation, issued the decision.
Chesapeake was represented at the District Court and at the Fourth Circuit by Timothy Miller of Robinson & McElwee PLLC. Joseph Mark Lovett of Appalachian Mountain Advocates argued for the plaintiffs at the Fourth Circuit hearing.

The Whitemans own the surface rights to approximately 101 acres of land in Wetzel County and Chesapeake owns lease rights to minerals beneath the Whitemans’ surface property. The severance deeds involved neither reserved any specific surface rights to the mineral estate owner nor mentioned permanent waste disposal resulting from mineral extraction, according to the opinion.

“After the permitting process was complete, Chesapeake began drilling. While drilling on the Whitemans’ property, Chesapeake used a water-based drilling fluid, known in the oil and gas industry as ‘mud,’ to remove drill cuttings during the drilling process,” the opinion states.

“Once removed from the wells’ boreholes, Chesapeake disposed of the drill cuttings in accord with the waste disposal method listed on their well work and pit waste discharge permit applications, namely by depositing the drill cuttings into open pits located near the wellheads on the Whitemans’ surface property.

“At the conclusion of the drilling process, Chesapeake removed the plastic liners from the waste pits, mixed the drill waste with clean dirt, and compacted and covered the pits. Sediment control barriers surround the pits.”

The Whitemans live on their land, primarily raising sheep and using part of the land to produce hay for the sheep. The Whitemans claimed that after the disposal of drill cuttings by Chesapeake on 10 acres of their land on which three natural gas wells were drilled and operated, they could no longer produce hay on the land because that property became “unusable for any suitable purpose.”

In their complaint filed in federal district court, the Whitemans asked for an injunction and damages based on claims arising from Chesapeake’s drilling and operation of the three gas wells on their property. They alleged claims under West Virginia common law only, namely nuisance, trespass, negligence, strict liability, recklessness or gross negligence, intentional infliction of emotional distress and negligent infliction of emotional distress.

After cross motions for summary judgment were filed, the court denied the Whitemans’ motion and granted Chesapeake’s motion on the trespass claim. The Whitemans, with the court’s approval, voluntarily dismissed all their other claims and then appealed the summary judgment ruling on common law trespass to the Fourth Circuit.

“The substantive legal issue before the court on appeal is whether Chesapeake’s permanent disposal of drill waste upon the Whitemans’ surface property is ‘reasonably necessary’ for the extraction of minerals,” Faber wrote for the unanimous panel.

“In West Virginia, common law trespass is an entry on another man’s ground without lawful authority, and doing some damage, however inconsiderate, to his real property… In West Virginia, a mineral estate owner that enters upon a surface estate owner’s land does so without unlawful authority only if, under the ‘reasonable necessity’ standard, the mineral estate owner ‘exceeds its rights… thereby invading the rights’ of the surface estate owner.’

“[W]e conclude the district court was correct to hold that creating drill waste pits was reasonably necessary for recovery of natural gas and did not impose a substantial burden on the Whitemans’ surface property, that creation of the pits was consistent with Chesapeake’s rights under its lease, was a practice common to natural gas wells in West Virginia, and consistent with requirements of applicable rules and regulations for the protection of the environment. Accordingly the decision of the district court is affirmed.”

This entry was posted in Federal Court, News, Wetzel County and tagged Chesapeake Appalachia, Joseph Mark Lovett, Timothy Miller.