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Energy Law Exchange

April 30, 2014

“Hydraulic Fracturing” Verdict in Texas State Court -- Texas family recovers $3 million based on nuisance theory

On April 22, 2014, a six-person jury in Dallas awarded a Texas family $2.925 million in a trial based on medical problems allegedly caused by natural gas development. While the case involved gas wells that had been hydraulically fractured, Plaintiffs did not argue that they had been injured by exposure to fracturing fluids in their water supply. Rather, they claimed air emissions from the natural gas development around their home caused their injuries. Because the same types of air emissions will be present in most fracturing projects, the case is worthy of note.

In 2011, the Parr family filed suit against a number of oil and gas companies, including Aruba Petroleum Inc., Encana Oil & Gas (USA) Inc., Burlington Resources Oil & Gas, Co., L.P., and Halliburton Energy Services, Inc. The Parrs claimed personal injuries and property damage arising from natural gas development activities near their home in the Barnett Shale in Wise County, Texas.

The Parrs argued that they had been exposed to hazardous gases, chemicals, and industrial wastechiefly through the airassociated with the development of natural gas near their property, and that this exposure resulted in significant health problems that, at times, drove them from their home. The Parrs also claimed that their property value had been diminished.

A King & Spalding client was granted summary judgment on the Parrs claims in April 2013. The Parrs reached settlements with all other defendants, except Aruba Petroleum.

Before the April 2014 trial began, the court granted summary judgment on the Parrs negligence, gross negligence and negligence claims against Aruba, leaving Plaintiffs nuisance claim. The court also limited the scope of the Parrs alleged personal injury damages, ordering that the Parrs personal injury damages were limited to those (1) that were within the common knowledge and experience of a layperson, and (2) where the sequence of events was such that a layperson could determine causation without the benefit of expert evidence. The court issued this ruling based in part on the Parrs representations regarding the type of personal injury damages they allegedly suffered.

Trial on the Parrs nuisance claim against Aruba began on April 7, 2014 in a Dallas County Court. The Parrs sought $9 million in damages from Aruba for this claim. The case was tried for approximately two and one half weeks. After about a day of deliberation, the jury held Aruba liable for creating a private nuisance, finding that Arubas conduct caused unreasonable discomfort or annoyance to a person of ordinary sensibilities attempting to use and enjoy the persons land.

The jurys verdict of $2.925 million included $2,000,000 for past physical pain and suffering; $250,000 for future physical pain and suffering; $400,000 for past mental anguish; and $275,000 for loss of market value on the Parrs home.

The jury did not find that Arubas conduct was abnormal, another nuisance classification that was submitted, and the jury did not render an award of punitive damages based on malicious conduct. With respect to punitive damages, the jury did not provide a definitive no answer, but instead did not reach the question because the verdict on nuisance was not unanimous.

While the Parr case may provide some incentive for other plaintiffs to pursue hydraulic fracturing-related litigation, it is important to note that the case focused on exposure to air pollutants generally associated with natural gas development activities, not specifically on exposure to chemicals in fracturing fluids. Moreover, the Parrs did not allege groundwater contamination associated with the natural gas development, or fracturing in particular. Lastly, the only cause of action submitted to the jury was nuisancea fact intensive claim.

In short, the medias description of the Parr case as a fracking case is somewhat misleading, as it did not focus specifically on hydraulic fracturing fluids or the hydraulic fracturing process. Nonetheless, it is an important case to note for those engaged in any type of Texas oil & gas production, including those that utilize hydraulic fracturing.