Marginalized Landowners on the Losing End of Lawsuits

by Duane Nichols on December 4, 2013

Rough roads ahead for landowners

Lawsuit denied appeal
Chesapeake sued over drilling waste

From the Article by David Beard, Morgantown Dominion Post, December 2, 2013

A Wetzel County couple lost their appeal of a Marcellus gas well case in federal court.

Dewey and Gay Teel sued Chesapeake Appalachia for common law trespass regarding drill cuttings pits on their property.

In October, a three-judge panel in the U.S. Court of Appeals for the Fourth Circuit upheld the decision in Chesapeake’s favor previously issued by the U.S. District Court for the Northern District of West Virginia. The mandate making the judgment effective was issued this month.

According to the original complaint, the Teels own 104 acres on Blake Ridge. The mineral rights were severed in 1959. In 2009, during gas well operations, Chesapeake created and left pits containing drilling mud, drill cuttings and chemicals. The pits had their liners removed and were covered. At other drilling sites, Chesapeake hauled such waste to landfills, rather than leaving it on the property.

In its mid-October opinion, the panel noted that this case was essentially identical to that of another Wetzel couple, Martin and Lisa Whiteman. The Whitemans lost their appeal in the same court in September.

The panel said trespass exists if a party’s entry onto another’s land, or leaving something upon the land, is without lawful authority. In the case of a severed estate, where the mineral owner has the right to enter and burden the surface to do what is reasonably necessary to exploit the minerals, the burden falls to the surface owner to show lack of reasonable necessity.

The court determined that neither the Whitemans nor the Teels demonstrated that.

Among other things, they failed to show that Chesapeake’s closed-loop system, which was being tried in other states at the time of the Teel work, was the norm in West Virginia at the time. In fact, Chesapeake was still using open disposal pits in West Virginia. “The Teels have also failed to muster evidence plausibly suggesting that Chesapeake’s operations impose a substantial burden on their property.”

The opinion is considered “unpublished” and does not set a binding precedent in the 4th Circuit. The panel echoes a point highlighted in the Whiteman case: That analyzing reasonable necessity is fact specific, and “what is necessary is a fluid concept that must be determined on a case-by-case basis.”

Following on the heels of the Whiteman case, this one resolved itself more quickly. The Whiteman appeal case ran from June 2012 through September. The Teel case ran from November 2012 to early this month.

The Dominion Post reached Teel attorney Joseph Lovett on Wednesday, but he wasn’t free to speak, and asked to call him back Friday. He did not reply to calls or an email sent Friday. Co-counsel Isak Howell did not respond to a voice mail. Chesapeake declined to comment.


Judge dismisses most of Preston gas lease lawsuit

From an  article at the WV Gazette on December 2, 2013

MORGANTOWN, W.Va. — More than half of the counts and more than a dozen defendants in a West Virginia oil and gas lease lawsuit have been dismissed.

The lawsuit combines 68 cases filed by 121 mineral owners in Preston County who allege that Traverse City, Mich.-based Magnum Land Services and Belmont Resources LLC fraudulently persuaded them to sign gas leases below their true value.

Defendants also include Canada-based Enerplus Resources and 19 employees of Magnum and Belmont. The lawsuit said the leases were transferred in 2010 to Enerplus. The company was excluded from two counts associated with notarizing the leases.

The companies have denied the allegations.

U.S. District Judge Irene Keeley dismissed the 19 employees from the lawsuit, saying in two separate orders that they weren’t served papers in a timely manner, The Dominion Post reported Monday.

Keeley also dismissed five of the lawsuit’s nine counts, including slander of title, one fraud count, leases void because of disqualifying interest, misconduct of notary public against Magnum and Belmont, and tort of outrage, which means inducing the plaintiffs to sign lowball leases was unconscionable.

Part of a conspiracy count relating to the employees also was dismissed. A portion of the count alleging conspiracy between Magnum and Belmont was retained.

The other remaining counts include fraud in the inducement of the leases, unconscionability relative to plaintiffs’ inadequacy in bargaining power, and declaratory relief to nullify and renegotiate the leases.

The case originally was filed in Preston County Circuit Court in November 2012 and was transferred to federal court in February. The residents are demanding unspecified compensatory and punitive damages.

A trial is set for Oct. 27, 2014.

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