On Thursday, a federal jury in Pennsylvania ordered Cabot Oil & Gas to pay more than $4.2 million in damages to two Pennsylvania families who sued in 2009 alleging that the Texas-based company's drilling operations contaminated local groundwater.
The long-running dispute – which originally featured more than 40 plaintiffs before most settled their claims – had previously made headlines after it was featured in the Emmy-winning documentary "Gasland."
The plaintiffs claimed that Cabot, one of the largest operators in Pennsylvania, negligently conducted its hydraulic fracturing operations near Dimock, Pennsylvania, which in turn caused methane gas to leak into nearby groundwater. The company argued that methane occurred naturally and that the plaintiffs could show no causal link between the contamination in their wells and the company's drilling operations.
The jury returned verdicts on the plaintiffs' negligence and private nuisance claims – the only counts that remained after Cabot was granted partial summary judgment on the plaintiffs' strict liability, breach of contract, and fraudulent inducement claims, among others.
In ruling that the plaintiffs could not move forward with their strict liability claims, the court set an important precedent, becoming one of the first courts to address the question of whether hydraulic fracturing should be considered "abnormally dangerous" and therefore subject to strict liability.
But the court refused to "take a step which no court in the United States has chosen to take, and declare hydraulic fracturing to be an ultra-hazardous activity that gives rise to strict tort liability." Ely v. Cabot Oil & Gas Corp., 38 F. Supp. 3d 518, 519 (M.D. Pa. 2014). "Instead, courts consistently have found that claims for property damage and personal injury allegedly resulting from natural gas drilling operations are governed by the more traditional negligence principles." Id.
Pennsylvania applies a six-factor test in determining whether particular activities qualify as "abnormally dangerous" and are therefore subject to strict liability. The six factors are:
(1) the existence of a high degree of risk of some harm to the person, land, or chattels of others;
(2) the likelihood that the harm that results from it will be great;
(3) an inability to eliminate the risk by the exercise of reasonable care;
(4) the extent to which the activity is not a matter of common usage;
(5) the inappropriateness of the activity to the place where it is carried on; and
(6) the extent to which its value to the community is outweighed by its dangerous attributes.
Id. at 528 (quoting Restatement (Second) of Torts § 520 (1977)).
Applying those factors, the court ruled that hydraulic fracturing is "not abnormally dangerous, and strict liability should not apply." Id. at 534.
Nonetheless, the court allowed the plaintiffs to proceed on their negligence and nuisance theories, which resulted in the $4.2 million verdict.
Cabot has vowed to appeal, citing a "lack of evidence" and "conduct of plaintiffs' counsel calculated to deprive Cabot of a fair trial," according to Cabot spokesman George Stark. Cabot has said that the jury's conclusion "disregards overwhelming scientific and factual evidence," which shows no clear link between the contamination of the families' wells and the company's hydraulic fracturing operations.
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