On April 22, 2014, a Dallas jury awarded almost $3 million to a Texas family in a nuisance case referred to in media headlines as the first-of-its-kind “fracking” case. Parr v. Aruba Petroleum, Inc., No. 11-01650-E (County Ct. at Law No. 5, Dallas County, Texas). This case is important to insurers and companies watching the development of fracking as the facts of the case reveal that the lawsuit did not center on concerns solely related to hydraulic fracturing operations, but instead involved the airborne release of alleged oilfield contaminants associated with operations that are incidental to the drilling of any oil or gas well.
The Parr plaintiffs live on a 40-acre ranch near Decatur, Texas, surrounded by more than 20 oil and natural gas wells. The Parr family alleged cumulative environmental contamination and polluting events arising from the operation of the oil and gas wells caused them injuries. Specifically, the plaintiffs refer to the releases, spills, emissions and discharges of above-surface “air pollution” causing the plaintiffs and their property to be exposed to hazardous gases, chemicals and industrial hazardous wastes. The plaintiffs also claim exposure to offensive noises, odors and smells, and construction and trucking activity. As a result of such exposure, the plaintiffs claim they were diagnosed with health effects, including unreasonable fear, apprehension, rashes, nausea and other symptoms. The plaintiffs also claim they experienced the death of house pets, chickens, calf/calves and the physical dwarfing of a newborn calf.
The lawsuit was filed in March 2011, and named seven other oil and gas companies as defendants. The case went to trial with Aruba Petroleum, Inc. as the sole remaining defendant. The last live pleading, the 11th Amended Petition, includes claims for negligence, gross negligence, negligence per se, private nuisance, and trespass to real property. Prior to trial, Aruba was granted summary judgment on the negligence, gross negligence, and negligence per se claims. Only the private nuisance claim was submitted to the jury. The plaintiffs initially sought $66 million in damages, including actual and exemplary damages. When the case went to the jury, the damages demand had been reduced to $9 million.
In a 5-1 verdict, the jury found that Aruba intentionally created a private nuisance. Nonetheless, the jury concluded that Aruba’s conduct was not abnormal or out of place in its surroundings. The damages awarded were comprised of $2 million for past physical past 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 of the family’s ranch. No exemplary damages were awarded. The jury did not decline to award exemplary damages, but rather was not asked to consider the question as the verdict was not unanimous. Aruba has indicated that it will appeal.
It is important to note that this private nuisance claim involves airborne contaminants. The crux of the claim was not operations exclusive to hydraulic fracturing, but instead ordinary oil and gas operations conducted in the drilling of any oil or gas well. This included the use of vehicles and engines, construction and trucking activity, flaring, and the venting of gas to the atmosphere. Even so, the verdict and the media attention will likely result in an increase in the number of lawsuits filed against oil and gas companies engaging in hydraulic fracturing. Because nuisance cases are fact specific, it is unlikely this case will have implications for other lawsuits filed against other oil and gas companies engaged in hydraulic fracturing despite the media attention.