Success of nuisance suits against Texas oil and gas companies in limbo by Maryann B. Zaki, Sutherland Asbill & Brennan LLP, November 9, 2015, FuelFix.com
Marathon Oil EF, LLC, and Plains Exploration & Production Co. recently prevailed against landowners who claimed harm to their health and property from surrounding oil and gas operations in the Eagle Ford shale. The trial court dismissed the case for lack of evidence backing the landowners’ claims, and the San Antonio Court of Appeals agreed.
This holding could have a chilling effect on future lawsuits from other homeowners, except for one thing: The outcome of another similar lawsuit is currently on appeal and is still pending. In that case, landowners in the Dallas area won a $2.9 million jury verdict based on similar claims despite a lack of scientific expert testimony. The Dallas Court of Appeals hasn’t yet issued a decision to either affirm or overturn the jury verdict. Thus, the question of whether nuisance claims like these can succeed against oil and gas companies in Texas remains in limbo.
Here’s how the two lawsuits compare:
In Karnes County, Texas, Michael and Myra Cerny filed suit in 2013, alleging that the oilfield operations conducted by Marathon and Plains exposed them to toxic chemicals, noxious odors, dust, and noise that worsened their pre-existing health conditions and their “fixer-upper” home. As an attempt to circumvent the need for expert testimony that would link the activities of Marathon and Plains to the Cernys’ alleged injuries, the couple specifically disclaimed that they were seeking any personal injury damages that would invoke the need for expert testimony. Instead, they presented personal affidavits outlining their health symptoms, as well as affidavits from a worker with environmental advocacy group, an independent air quality expert, a forensic meteorologist, and a toxicologist.
The San Antonio Court of Appeals held that this was not enough. Instead, the court held that toxic tort claims of this type have to be proven with expert testimony and have to meet the proof requirements as set out by the Texas Supreme Court in a 1997 case, Merrell Dow Pharmaceuticals v. Havner. Havner requires plaintiffs to produce at least two epidemiological studies that would prove that the exposure complained of “more likely than not” caused the plaintiff’s injury. Plaintiffs in such cases also need to show that they are similar to the subjects in the epidemiological studies, and the expert testimony must also exclude other plausible causes of their injury with reasonable certainty.
Both the trial court and the appellate court ruled that the Cernys did not provide such expert testimony. The Court of Appeals also noted that the Cernys suffered “multiple chronic health conditions” before drilling began, and that their home was not in the best shape prior to Marathon and Plains beginning operations. Further, the fact that there were many other oil companies conducting oil and gas operations in the vicinity of the Cernys’ home which could have been the culprit for their alleged injuries was similarly detrimental to the Cernys’ claims. Thus, the Court of Appeals held that causation “cannot be established by mere speculation.”
The result in the Cernys’ case stands in contrast to the Dallas County case, Parr v. Aruba Petroleum Inc., where a Dallas jury awarded $2.9 million in damages to a Wise County family who made claims similar to the Cernys. Like the Cerny family, the Parrs also tried to avoid Havner’s expert testimony requirements by disclaiming any personal injury damages, which would require it. However, the Parr family fared better because the jury did not hesitate to award damages despite the same lack of expert testimony which the Court of Appeals held was necessary in the Cernys’ case. As the Parr case is currently on appeal to the Dallas Court of Appeals, it will be interesting to see whether the Dallas court addresses the San Antonio Court of Appeals’ decision when issuing an opinion. However, one thing is for sure: Energy companies with drilling operations in Texas will be watching with interest. [Emphasis added]