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Article: Fracking-Related Earthquake Litigation Gains Momentum

Business Litigation Reports

On June 30, 2015, the Oklahoma Supreme Court issued a decision that opened the courthouse doors to lawsuits for property damage and personal injuries caused by earthquakes purportedly related to fracking activities. See Ladra v. New Dominion, LLC, --- P.3d ----, No. 113396, 2015 WL 3982748, 2015 OK 53 (Okla. June 30, 2015). 

Sandra Ladra, a resident of Prague, Oklahoma sued New Dominion LLC and Spess Oil Co. alleging that an earthquake triggered by the companies’ disposal of fracking wastewater in wells near her home caused a portion of her chimney to collapse. The trial court dismissed the case on lack of jurisdiction grounds, agreeing with the defendants that they lawfully operated their injection wells under permits from the Oklahoma Corporation Commission, the state’s oil and gas regulator, which had exclusive jurisdiction over the dispute. The Oklahoma Supreme Court reversed, holding that the trial court does have jurisdiction to hear the dispute and that the regulatory body has  no authority to award damages or to decide disputes between private parties. 

The decision paves the way for such disputes to be heard by a jury. Several recent reports by academics and regulators purporting to find a link between wastewater injection wells and seismic activity have resulted in the proliferation of similar lawsuits in Oklahoma and in other states like Arkansas where fracking is common. 

Although scientists have known for decades that man-made activities can trigger seismic activity, it is only recently that academics and regulators have started focusing on the potential link between the use of wastewater injection wells by the oil and gas industry and increased quake activity. In April, the Oklahoma Geological Survey issued a statement confirming that it “considers it very likely” that most of the hundreds of earthquakes in the state in recent years were triggered by the use of injection wells. Oklahoma Geological Survey, Summary Statement on Oklahoma Seismicity, Apr. 21, 2015, http://earthquakes.ok.gov/ wpcontent/uploads/2015/04/OGS_Summary_ Statement_2015_04_20.pdf. According to the OGS, in 2014, Oklahoma experienced 585 quakes of at least a 3.0 magnitude (big enough to be felt indoors), which is more than the total number of quakes in the state over the previous 30 years, and the most of any state in the contiguous United States. 

Similarly, researchers from the U.S. Geological Survey have concluded that most induced earthquakes in the United States are a result of the deep disposal of wastewater related to oil and gas production. See Justin L. Rubinstein & Alireza Babaie Mahani, Myths and Facts on Wastewater Injection, Hydraulic Fracturing, Enhanced Oil Recovery, and Induced Seismicity, 86 Seismological Res. Letters 4, 1 (2015), available at https://profile.usgs.gov/myscience/upload_folder/ci2015Jun1012005755600Induced_EQs_Review. pdf.; Mark D. Petersen, et al., U.S. Geological Survey, Incorporating Induced Seismicity in the 2014 United States National Seismic Hazard Model—Results of 2014 Workshop and Sensitivity Studies, Open-File Report 2015-1070, available at http://pubs.usgs.gov/ of/2015/1070/pdf/ofr2015-1070.pdf. Both OGS and the USGS have clarified that the primary source for suspected triggered seismicity is not fracking itself, but rather the use of injection/disposal wells during oil and gas production, including fracking. While causation is not conclusive, there may be sufficient scientific data for these lawsuits to have legs and pose a real threat to the oil and gas industry as well as its insurers.