FIRST TORT RULING IN A MARCELLUS GAS DAMAGE CASE — by Joel R. Burcat, Esq., Saul Ewing LLP, Harrisburg

Background


In Fiorentino v. Cabot Oil & Gas Corp., No. 09-CV-2284, 2010 WL 4595524 (M.D. Pa., Nov. 15, 2010), the United States District Court addressed a variety of issues in the first ruling to arise from a tort claim for personal injuries and property damage from Marcellus Shale Gas drilling. This case arises out of the allegations in Dimock, Pennsylvania that drilling for Marcellus Shale gas by the defendant, Cabot Oil & Gas Corp., caused property damage and personal injuries to residents. As has been highlighted both in a documentary movie and on 60 Minutes, drinking water supplies have been alleged to contain methane, natural gas and other toxins and allegedly have been released onto plaintiff’s land. Plaintiffs brought suit seeking an injunction prohibiting future natural gas operations, seeking compensatory and punitive damages, the cost of future health monitoring, attorneys’ fees and other unspecified relief.
The plaintiffs’ complaint alleged the following claims against the defendant: 1) Hazardous Sites Cleanup Act, 35 P.S. §§ 6020.101 et seq. (“HSCA”); 2) negligence; 3) private nuisance; 4) strict liability; 5) breach of contract; 6) fraudulent misrepresentation; 7) medical monitoring trust funds; and 8) gross negligence.
The defendant filed a motion to dismiss the claims brought pursuant to HSCA, strict liability, medical monitoring and gross negligence. The defendant also filed a motion to strike a number of allegations largely related to the claims they were seeking to dismiss, as well as negligence per se and attorneys’ fees. The ruling by Judge John E. Jones, related only to the motion to dismiss these claims and the motion to strike. For the most part, in his ruling, the Judge sided with the plaintiffs.
Issues

Whether the court should dismiss claims against a natural gas drilling company relating to HSCA, strict liability, medical monitoring and gross negligence.
Whether the court should strike allegations relating to punitive damages, negligence per se and attorneys’ fees.
Rulings

Defendants argued that the plaintiffs were required to file a written notice 60-days prior to commencing an action under HSCA. Such notices are required by provisions contained in HSCA. The court ruled that since the HSCA claim was brought under Sections 507 and 702 for response costs, no 60-day notice was required. Such a notice would be required, however, “in citizen suits for property damage and actual or potential bodily injury.” The court followed Judge Caldwell’s ruling in Two Rivers Terminal, L.P. v. Chevron, USA, 96 F.Supp.2d 426 (M.D. Pa. 2000).
The court noted that strict labiality does not apply in Pennsylvania in actions involving underground storage of petroleum products and operation of petroleum pipelines. The court ruled however, that “Pennsylvania courts have yet to address whether the conduct at issue sub judice, gas-well drilling, is an abnormally dangerous activity that is subject to strict liability under Pennsylvania law.” The court felt it would be improvident to “extend the reasoning to drilling activities without more thorough consideration.” Thus the court denied the motion to dismiss and suggested that the defendants could reassert the issue in a motion for summary judgment after the record had been more fully developed.
The plaintiffs had also made a claim for medical monitoring expenses, to which the defendant filed a motion to dismiss. In denying the motion, the court quoted from the Pennsylvania Supreme Court’s ruling in Redland Soccer Club, Inc. v. Dept. of the Army, 696 A.2d 137 (Pa. 1997), to lay out the criteria for a claim for medical monitoring. The court held that while the plaintiffs may not have set out their claim in the precise manner endorsed by the Pennsylvania Supreme Court, the District Court held that, viewed as a whole, the complaint had sufficiently stated a plausible common law claim for medical monitoring to allow discovery to proceed.
The court did dismiss the plaintiffs’ claim for gross negligence without any objection by the plaintiffs other than they were not abandoning their claim for punitive damages.
The court refused to strike the allegations relating to attorneys’ fees at this time, preferring to wait to see if there were circumstances where such an award would be appropriate.
Finally, the court held that the claim for negligence per se, which would establish two of the four required elements of a negligence claim (duty and breach), was appropriate to this case.
Commentary

There have been many reports of damages actions having been filed relating to a variety of alleged personal injuries and property damages claims. This is the first one to have reached the level of a reported opinion. In particular, the ruling on the HSCA claim and medical monitoring may be of great significance when reviewed by other courts.
DEP and the news media have reported a settlement of a claim by DEP and Cabot Oil & Gas, in which Cabot has agreed to pay $4.1 Million in damages for the loss of water to a number of plaintiffs. See “Dimock Residents to Share $4.1 Million, Receive Gas Mitigation Systems Under DEP-Negotiated Settlement with Cabot Oil and Gas,” DEP New Release (Dec. 16, 2010). The settlement also requires Cabot to pay for whole house methane mitigation systems for 19 affected homes. This settlement, however, relates to a separate claim brought by DEP against Cabot, not to this case. Thus, the claim for personal injuries will continue.

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