January 06, 2015 Articles

Can Products Liability Drill into Fracking?

By Prof. James T. O'Reilly

The Section of Litigation's November 18 teleconference on the legal issues of natural gas fracking coincided neatly with increasing reports about chemical exposure studies among neighbors around gas wells in the Midwest. The industry speakers on the ABA call were clear and precise: they do not expect successful lawsuits against the gas fracking industry and its suppliers. As long as states maintain sole control over the operations of this controversial process, the industry feels confident that it can repel injury claimants without interference from the plaintiffs, the local governments, or the federal EPA.

It could be useful to step back and examine those views in light of the tort jurisprudence of strict liability, negligence per se, and statutory remedies under state laws. Counsel who has not yet encountered the phenomenon of industrial scale drilling in suburban and developed exurban areas would be surprised by the volume of controversy. Certainly, we all need the benefits that gas brings to our economy, and residents adjacent to the drilling sites or injection disposal well sites are relatively few in number, compared to the millions of users of the gas that is being so vigorously sought in midwestern and eastern regions of the nation. If the gas well neighbors and community residents develop scientific support for claims of adverse effects of chemical exposure, what could the products liability system do for them?

The Iqbal, Daubert, and Lone Pine defensive strategies loom large against plaintiffs. The need to have sufficient proof to include in the complaint is job one for the injured family's counsel. Dismissal for inadequate specificity of how the radioactivity and chemical constituents of the waste from the well caused the harm is a likely prospect confronting the would-be litigant. The Daubert test for expert witnesses in federal and many state courts has become a pretrial jousting match of experts vs. experts in a bitterly fought hearing. While no industry supporters deny that there are large quantities of fracking waste, its toxic effects are vigorously contested for lack of proof of the certainty of harm, just as tobacco's effects were debated for decades. And the costs on plaintiffs are huge if a Lone Pine case management order is imposed, so only the deep pocketed plaintiff can fight the deeper pockets of the drillers.

Plaintiffs next must have a theory that gets past summary judgment. State laws on well and waste operations have been drafted by or negotiated intensively by the gas industry, so a "negligence per se" claim will be an uphill battle in light of the phrases that set out the general protections of regulatory law, for which the tort plaintiff will claim a right to private remedies. The modern development of the "ultrahazardous activity" tort in some states would be a conceptual challenge for the appellate courts, in light of the friendly receptivity with which states have been granting permits for the well operators' handling of drilling and disposing of the radioactive sludges from liquid waste ponds. Likewise, private nuisance requires sufficient proximity and egregious behavior, and the damages are small compared to those of a multiple-child cancer "cluster" in the school adjacent to a wellhead.

Products liability claims can be expected. Most often, the plaintiff will sue the driller, the gas well permit holder who has contracted for the drilling, the chemical supplier, the explosive detonation charge maker, and any intermediaries who arranged the chemical soup that is forced into the well to shatter the shale in order to release bubbles of methane gas for recovery and sale. Strict liability will be asserted, arguing that the defect in their chemical was unreasonably dangerous to residents around the liquid retention pond and to those downstream of unplanned releases. A June 2014 fire at a fracking site in Clarington, Ohio, killed about 70,000 fish in the nearby creek and led downstream water plants to close their intake valves until the burst of toxic fluids had dissipated.

Suing under strict liability requires identifying the "defect" in the biocide that has been delivered in 80,000-pound tankers, for mixing with 400,000 pounds of fine nanoparticles of sand and 200,000 pounds of lubricants and other specialized chemicals. Problem 1 is secrecy of what chemical from what supplier went into the mixer from which the slurry was pushed into the well. Problem 2 is the defense claim that the bystander had no connection to the nondefective chemical that had functioned as expected, and which had adequate cautionary language in the OSHA-required paperwork. The chemical's mixing, forced descent into the explosion area, and emergence from the well were beyond the control of the biocide maker; strict liability requires a defect as of the time the chemical had left the control of the seller. Problem 3 is that the intended use was given a state well permit, so it was arguably not "unreasonably dangerous."

Creative arguments will continue to be made about liability for environmental waste cleanup costs and long-term exposure to radioactive sludge from leaking waste pits. But products liability theories probably would be a dry hole, at best. Frackers on the Section's teleconference anticipated little in the way of products liability challenges that cannot be stonewalled by a vigorous defense.

Keywords: litigation, products liability, fracking, chemical exposure, negligence per se, ultrahazardous activity, private nuisance, strict liability

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