The Fracking Case That Wasn't: Recent Texas Jury Verdict Catching the Headlines
On April 22, in an alleged "fracking case," a Dallas jury awarded almost $3 million to a Texas family, finding that an energy company's drilling activity in the Barnett shale constituted a private nuisance. Parr v. Aruba Petroleum, Inc., No. 11-01650, (County Ct. at Law No. 5, Dallas County, Tex.). The widespread media characterization of the trial as a "fracking case," however, is misleading. The plaintiffs' claims did not focus on "typical" fracking-related concerns such as seismic activity, water use, contamination of water supplies, or appropriate disposal of flowback/produced water. Instead, the plaintiffs complained about activities that are commonly required to drill almost any oil or gas well, such as flaring, construction activity, trucking traffic, and the emission of gas and chemicals into the air. These types of activities occur even if a well is not hydraulically fractured. Nevertheless, it is likely that the verdict and its attendant media coverage may embolden plaintiffs' lawyers, temporarily increasing claims against oil and gas exploration companies engaged in fracking activity.
Parr v. Aruba Petroleum, Inc.
The Parr family lives on a 40-acre ranch in Wise County, which sits atop the Barnett shale play near Fort Worth, Texas. The county is home to more than 12,000 drilled wells. Extensive energy exploration and production activity near their home led the Parr family to file a lawsuit in 2011 against Aruba Petroleum and seven other energy companies.
The Parrs alleged that the exploration and production activity polluted the air with hazardous gases. Exposure to this air pollution, they claimed, led to health problems such as asthma, ear-ringing, headaches, and nausea, as well as injury to the family's pets and livestock, including the "physical dwarfing" of a newborn calf. In their petition, the Parrs sought damages of up to $66 million. The Parrs' case was substantially narrowed by the time it was submitted to the jury, and the Parrs' claims against seven defendants were settled or dismissed before trial. Aruba Petroleum was the lone defendant at trial. Further, although the Parrs originally brought negligence and trespass claims, only one claim was submitted to the six-person jury: whether Aruba intentionally created a private nuisance. They did not allege a public nuisance.
In a 5–1 verdict, the jury found that Aruba did intentionally create a private nuisance and awarded a total of $2.9 million in damages to the Parrs: $2.25 million for physical pain and suffering, $400,000 for mental anguish, and $275,000 for the loss of market value of the family's property. In post-trial motions, Aruba's counsel has vowed to challenge the verdict and has asserted that Aruba would "certainly appeal" if judgment is entered.
Even if the verdict withstands Aruba's post-trial motions and probable appeal, it is unlikely that Parr v. Aruba Petroleum will dramatically change the long-term litigation landscape for companies involved in hydraulic fracturing activity. Most importantly, the Parrs' claims did not challenge activities unique to fracking. Their air pollution claims could be alleged against virtually any drilling operation. As such, Parr is merely one of the numerous nuisance actions routinely filed against oil and gas companies. But perceptions are important, and the media coverage of Parr as a "fracking" case may encourage other plaintiffs to file suit against companies engaged in hydraulic fracturing activities. Within a week of the Parrs' jury award, eight families in Arkansas filed a lawsuit seeking $76 million in damages against another natural gas company complaining of injuries sustained as a result of nearby fracking activity.
While the number of cases alleging damages from hydraulic fracturing is increasing, few have resulted in jury verdicts. In fact, many such cases are being settled or otherwise dismissed. See, e.g., Scoma v. Chesapeake Energy Corp., No. 3:10-cv-01385 (N.D. Tex., July 15, 2010) (case dismissed after parties reached a settlement agreement); Harris v. Devon Energy Prod. Co., L.P., No. 4:10-cv-00708 (E.D. Tex., Dec. 22, 2010) (case dismissed without prejudice after plaintiffs' groundwater "apparently purged itself of elevated levels of toxic substances"); Heinkel-Wolfe v. Williams Prod. Co., LLC, No. 2010-40355-362 (362nd Dist. Court, Denton County, Texas, Nov. 3, 2010) (case dismissed after plaintiffs dropped allegations of water contamination and settlement agreement reached at mediation). Parr v. Aruba Petroleum is unlikely to significantly alter this trend, but the size of the verdict coupled with increased media coverage may result in an uptick in suits filed against companies engaged in hydraulic fracturing.
For further information, please contact your principal Firm representative or one of the lawyers listed below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com.
David L. Burgert
N. Scott Fletcher
Josh L. Fuchs
Basheer Y. Ghorayeb
Dallas / Houston
+1.214.969.5069 / +1.832.239.3795
Roy A. Powell
Robert A. Dahnke and William R. Taylor, associates in the Houston Office, assisted in the preparation of this Alert.
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