'Fracking' litigation trends discussed at conference

Michael P. Tremoglie Sep. 12, 2011, 10:51am


PHILADELPHIA (Legal Newsline) - Plaintiff and defense attorneys, insurance industry executives, government officials, community representatives, physicians and scientists gathered Friday for a conference on the latest issues related to hydraulic fracturing.

"Fracking" litigation was a hot topic at the event hosted by plaintiff attorneys Marc Bern of Napoli, Bern, Ripka, Shkolnik in New York and Joshua Becker of the law firm of Alston and Bird in Atlanta.

Fracking involves drilling holes in rock and injecting water to release natural gas.

"It will be interesting to see whether or not the litigation takes the path that the MTBE litigation took," Bern said. "There were numerous cases filed throughout the country but there wasn't an immediate explosion of litigation."

MTBE was a chemical added to gasoline to make it burn cleaner and more efficiently. Its production caused groundwater contamination.

Initially, MTBE litigation was handled as a "one-off" basis, Bern said. But, eventually there was a proliferation of lawsuits which were then consolidated into a Multi District Litigation. He wondered if this fracking litigation will stay on a state-by-state, local course or will become an MDL.

Panelist Jared Zola of Dickstein and Shapiro om New York spoke about insurance coverage implications related to fracking.

"What interests me about the potential implications of the insurance coverage with regard to hydraulic fracturing is not necessarily that there will be any liabilities that the energy and drilling companies will incur, but that there is certainly the threat of potential liability," he said.

He cautioned that companies need to be aware that the mere allegation of liability is often enough to implicate their liability insurance policies and in turn trigger a defense in those policies.

"Meaning that, if the EPA or a private citizen alleges property damage or bodily injuries related to activities caused by hydraulic fracturing," said Zola, "whether or not those liabilities hold up and whether or not there can actually be a connection between the hydraulic fracturing and the alleged damages. Those energy companies are entitled to a defense from their insurance companies which can often be as expensive or more expensive than the liability may prove to be."

Zola added that it is possible that fracking will not cause any damages.

But he cautions, "Even though there's no proven liability, that won't stop potential plaintiffs from alleging that there are damages."

Other panels discussed:

- Where the most productive areas for gas drilling are and its impact on land values;

- Government oversight; a presidential task force; the Safe Drinking Water Act exemption for hydraulic fracturing; and congressional hearings about it;

- EPA impact studies;

- Health and environmental risks;

- Legal theories.

More News