West Virginia Record

Sunday, September 22, 2019

State Supreme Court says Antero Resources can continue drilling for Marcellus shale

State Supreme Court

By Kyla Asbury | Jul 10, 2019


CHARLESTON — The West Virginia Supreme Court of Appeals sided with the Mass Litigation Panel in an appeal involving Marcellus shale litigation.

The appeal arose from claims by surface owners of several tracts of land who argued their use and enjoyment of their land was improperly and substantially burdened by horizontal wells used to develop the Marcellus shale underlying their properties, according to a recent opinion.

Justice Evan Jenkins authored the majority opinion. Justice Beth Walker concurred and filed her own opinion. Justice Margaret Workman and Judge Russell Clawges, who was sitting by temporary assignment, dissented.


Jenkins

"The MLP resolved the claims based upon property rights arising from relevant severance deeds, and granted summary judgment in favor of the defendants below, who are the leaseholder of the gas and oil estates and the company who is conducting the drilling," Jenkins wrote in the majority opinion.

The MLP concluded that the effects on the surface owners resulting from the horizontal drilling were within the implied rights to use the surface granted by virtue of the severance deeds, and did not impose a substantial burden on the surface owners.

"Thus, to overcome summary judgment on this issue, the surface owners were required to establish the existence of a genuine issue of material fact as to whether the effects on their surface estates were reasonably necessary to develop the mineral estate, or whether such effects substantially burdened the owners of the relevant surface estates," Jenkins wrote. "Having considered the briefs submitted by the parties and by Amici Curiae,2 the appellate record, the oral arguments presented, and the relevant law, we find no genuine issues of material fact were established in this particular case, and we, therefore, affirm the order of the MLP."

Antero Resources Corp. and Antero Resources Bluestone are in the process of developing Marcellus shale in West Virginia and own several horizontal Marcellus shale wells in Doddridge, Harrison and Ritchie counties.

Antero contracted with Hall Drilling for the construction of well pads, roads, well drilling and the operation of wells and gathering lines. 

Antero also has leasehold rights to develop oil and gas underlying various properties in Harrison County, including surface properties that are owned by the petitioners, according to the majority opinion. Antero operates six well pads to facilitate its horizontal drilling in the county and five of those six are within 0.42 miles and 1 mile from the property owners’ properties.

In 2013, the property owners filed the complaint in Harrison Circuit Court. It was transferred to the MLP on March 25, 2014. 

The MLP concluded “the noise, traffic, dust, lights and odors of which [property owners] complain are reasonable and necessarily incident to Antero’s development of the underlying minerals.”

The MLP granted summary judgment to Antero and Hall and the property owners then filed a motion, pursuant to Rule 59(e) of the West Virginia Rules of Civil Procedure, to alter or amend the judgment, which the MLP denied by order entered on Jan. 11, 2017. The property owners then appealed.

“In summary, property owners have failed to establish a genuine issue of material fact as to either Buffalo Mining factor,” the opinion states. “They have failed to present evidence that the activities of which they complain are not reasonably necessary for Antero and Hall to develop the Marcellus shale, and they also have failed to present evidence that they are being substantially burdened by these activities, which arise from the extraction of oil and gas from the Marcellus shale using wells that are not located on their properties, and that have caused no damage to their surface estates.”

The property owners have simply failed to meet their burden to produce sufficient evidence in this case to overcome summary judgment. The Supreme Court affirmed the MLP’s grant of summary judgment in favor of Antero and Hall.

In her concurring opinion, Walker wrote that she wanted to emphasize something the majority’s decision did not.

“The court does not decide whether respondents’ activities on petitioners’ surface estates created a nuisance,” Walker wrote. “And, the court does not answer the broader question of whether the owner of mineral rights underlying Surface Estate A may or may not create a nuisance on Surface Estate A to develop the minerals below Surface Estate B.”

Walker wrote that the court did not decide those issues because this particular case did not present the opportunity to do so.

“The panel denied petitioners’ motion to alter or amend its final order because their new legal argument ‘could have been made by [petitioners] during the extensive briefing and argument of dispositive motions, yet [petitioners] chose not to make it… [a]rgument or evidence that could and should have been presented cannot be raised for the first time in a Rule 59(e) motion,’” Walker wrote.

Walker noted that the MLP never ruled on the issue of whether the owner of minerals underlying Surface Estate A can create a nuisance on that surface to develop the minerals below Surface Estate B.

“Consequently, the Court cannot decide the question, either,” Walker wrote.

In her dissenting opinion, Workman wrote that she felt the majority failed to provide any guidance on striking a proper balance between rights.

“The majority did only a cursory analysis of existing principles of law requiring balance between mineral owners vs. surface owners; and failed to enunciate any legal guidance for such conflict in the context of fracking when the claims of more than 200 plaintiffs remain pending before the MLP,” Workman wrote.

Both the MLP and the majority were wrong in holding that a nuisance claim is not tenable under any set of facts when mineral owners act within their implied rights, according to Workman. Both parties are also wrong in failing to establish any analytical framework for creating balance between the sets of competing rights.

“The majority’s refusal to develop our law to provide a workable set of standards that balances the rights of surface and mineral owners is untenable,” Workman wrote. “The MLP and the majority opinion of this court effectively preclude any cause of action for nuisance while completely eviscerating existing legislative and caselaw.”

Workman wrote that the court should have enunciated the parameters of a nuisance claim in the fracking context.

West Virginia Supreme Court of Appeals case number 17-0126

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