On June 18th, Antero Resources Corp., Antero Resources Piceance Corp, Calfrac Well Services Corp, and Frontier Drilling LLC filed their Opening Brief before the Colorado Supreme Court in a “toxic tort” case concerning fracking operations in Silt, Colorado. The plaintiffs in the case, landowners in Silt, claim that the defendant companies’ operations caused contamination of their property and that they suffered “physical and personal injuries.” Before the plaintiffs filed suit, the Colorado Oil and Gas Conservation Commission conducted an investigation of the plaintiffs’ complaints of contamination and issued a report finding no evidence of contamination due to oil and gas operations.
After the parties served their initial disclosures (a mandatory exchange of key information early in the case), the defendant companies argued to the trial court that the plaintiffs’ allegations were vague and unsupported by information in their initial disclosures. Based on these deficiencies in the plaintiffs’ case, the defendant companies asked the trial court to issue a modified case management order requiring the plaintiffs to present evidence of their alleged injuries before beginning complex and expensive discovery. The trial court agreed with defendants and directed the plaintiffs to provide prima facie (i.e., preliminary) evidence, supported by expert analysis, to back up their allegations before the parties engaged in discovery. Such orders are typically referred to as “Lone Pine” orders—named after the New Jersey case that created the procedure. After the period of time set by the trial court for the plaintiffs to proffer evidence of their claims, the defendants moved to dismiss the case arguing that the evidence put forth was insufficient. The trial court agreed and dismissed the case.
The plaintiffs appealed the dismissal of their case to the Colorado Court of Appeals, which reversed the trial court concluding that Lone Pine orders “are not permitted as a matter of Colorado law.” The Court of Appeals reasoned that Colorado Supreme Court precedent prohibited trial courts from requiring plaintiffs to make a preliminary showing of exposure, causation, and injury before having the benefit of full discovery.
The companies then appealed the Court of Appeals’ reversal to the Colorado Supreme Court, which agreed in April to hear the case. The companies’ Opening Brief urges the high court to rule that trial courts are within their discretion to manage the discovery process when they order parties to make a preliminary Lone Pine showing of evidence supporting their case.
The outcome of this case is important for all oil and gas companies operating in Colorado because Lone Pine orders provide companies with an effective tool for disposing of meritless litigation prior to incurring the significant expenses associated with modern discovery, and e-discovery in particular.