OKLAHOMA CITY (Legal Newsline) - Two Oklahoma women and their attorneys have dropped a class action lawsuit in federal court that blames the recent spate of earthquakes in the state on oil and gas exploration, but they will re-file their claims against the fracking industry next year in a different court.
Lawyers for Logan County residents April Marler and Lisa Griggs say they will re-file the case in a state court after waiting a year, which is required by law.
Attorneys representing the energy industry count numerous reasons why the strategic legal move could pay off for the plaintiffs in the long run.
What’s more, one of the attorneys representing the plaintiffs, William B. Federman of Federman & Sherwood, said his firm is being “inundated” with requests for even more legal action pertaining to the quakes.
Of course, his first lawsuit was originally filed in a state court before Devon Energy removed it to federal court under the Class Action Fairness Act of 2005. That law gives federal courts jurisdiction over class actions in which more than $5 million is at issue.
It remains to be seen if one of the future defendants does the same to the next lawsuit. U.S. District Judge Stephen Friot refused the plaintiffs’ request to send their case back to state court on June 30, prompting the voluntary dismissal.
Industry attorney Carter Williams, in the Houston office of Baker Donelson, said that he suspected the plaintiffs dropped the case in federal court because of the concern their petition might be found not to satisfy federal pleading standards.
The standard, he said, became more rigorous after the Supreme Court’s 2007 decision in Bell Atlantic v. Twombly and the 2009 decision in Ashcroft v. Iqbal.
“To survive a motion to dismiss in federal court, a complaint must assert more than a ‘formulaic recitation of the elements’ of a cause of action,” Williams said.
Conclusory allegations are not enough. By voluntarily dismissing their case "without prejudice," plaintiffs are free to later re-file their claims.
Williams continued, “In contrast, a dismissal would have precluded them from doing so. Surviving a motion to dismiss is often the first big challenge for plaintiffs in purported class actions.
“If they are able to do so, the prospect of class discovery and protracted, expensive litigation can provide leverage at the settlement table.”
Other industry attorneys, like Eric Skanchy of Stoel Rives in Sacramento, CA, agreed.
“It is likely that the plaintiffs will be able to proceed further into the litigation without having to produce significant amounts of evidence early on to support their claims,” Skanchy said.
“The Federal Rules of Civil Procedure requires a significant showing of evidence early on in the case, whereas state courts, generally, are more lenient in the early stages of a lawsuit.
“This would allow them to continue to gather evidence and data for a longer period of time.”
He added that the standards for expert witnesses may be less onerous in state court.
“This would give the plaintiffs more latitude to bring in expert testimony in an attempt to connect the underground injection activities to the seismic activity,” he said.
The lawsuits stem from the injection disposal back into the earth of brine, a byproduct of unlocking oil and gas. Plaintiffs argue that a series of earthquakes, and resulting injuries and property damage, are directly linked to this disposal process.
The water is a mixture of ancient seawater recovered from reservoirs, water injected in the formation being drilled and any additives in the water being injected.
The lawsuits could rely on studies that blame the increase in earthquakes on saltwater disposal.
In a separate action, parties in a case filed this past February in federal court by the Oklahoma Chapter of the Sierra Club and Washington-based Public Justice await the judge’s response to the industry’s motion to dismiss.
A staff attorney in the Environmental Enforcement Project at Public Justice, Richard Webster, said that if the judge rules not to dismiss he expects the case to then move very quickly.
Sierra and Public Justice argue that injection disposal violates the federal Resource Conservation and Recovering Act (RCRA). Webster said that RCRA applies since the wastewater amounts to solid waste under the law.
One environmental lawyer said that citing RCRA was a stretch at best.
“This is the ‘Star Trek’ of lawsuits,” Andrew H. Perellis in the Chicago office of Seyfarth Shaw said in an earlier article on the issue.
“They are boldly taking RCRA where it has never gone before.”
Perellis said that the lawsuit was the equivalent “of suing a company that warehouses hazardous chemicals over a danger arising from an increase in truck traffic to and from the facility.”
“The waste here (the water) is not the cause of the endangerment,” he said. “They’re using RCRA to regulate land use, and it wasn’t designed to be used that way.
Meanwhile, the Oklahoma Corporation Commission (OCC), which regulates injection disposal in the state, said that a recent EPA report calling for a moratorium on “targeted” wells is outdated – it’s based on what the OCC has done through the end of June 2015.
“I think we can all agree that the bottom line is that we should consider stopping the operation of some disposal wells in response to earthquakes,” OCC spokesman Matt Skinner said.
“That’s what we’ve done since the 2015 fiscal year.”
He added that the OCC has established a 15,000-square-mile “Area of Interest” that goes beyond the current quake activity.
Overall, it has ordered the shutting down of more than 70 wells covering the timeline in the EPA report, and it has to take action on more than 700 wells by ordering volume reductions along with the closures.
“It’s also important to know that this is not an ‘us vs. them’ issue,” he said of the EPA. “We have a very close, positive, working relationship with the Region 6 office of the EPA.”