Colorado Ruling Raises Stakes in Fracking Litigation and Beyond

by Dechert LLP

In an Independence Day gift to plaintiffs, the Colorado Court of Appeals ruled in Strudley v. Antero Resources Corp., No. 12CA1251 (July 3, 2013), that Colorado law does not allow pre-discovery Lone Pine orders, often used by trial courts to manage complex toxic tort cases. The decision comes in the new area of hydraulic fracturing or “fracking” litigation and involves a matter of first impression for the Colorado courts. It is for now, and pending further review by the Colorado Supreme Court, a significant win for fracking litigation plaintiffs — both within the state and nationally. It also will be cited in other product liability and toxic tort cases where plaintiffs bring claims involving complex issues of medical causation and defendants seek Lone Pine relief.

William and Beth Strudley sued various entities involved in the hydraulic fracturing of natural gas, claiming that nearby fracking operations had caused contamination to the air, water and ground around their home, resulting in property damage and “personal and physical injuries, known and unknown.” The complaint contained a list of chemicals and contaminants alleged to be potentially responsible for causing them harm. But it did not provide any detail regarding which chemical, through which route of exposure, was responsible for which alleged injury.

Defendants asked for and obtained a Lone Pine order, so named for the type of case management order first issued in Lore v. Lone Pine Corp., 1986 WL 637507 (NJ. Super. Ct. Law Div. Nov 18, 1986). Lone Pine orders rely upon a court’s inherent case management authority and have been employed to avoid unnecessary and expensive discovery where plaintiffs cannot establish a prima facie case.

In granting the Lone Pine motion, the trial court particularly noted that: (1) plaintiffs asserted only vague harms without any formal diagnosis; (2) they did not allege that any particular harm was cause by any specific chemical(s) or means of exposure; and (3) the Colorado Oil and Gas Conservation Commission had previously investigated the complaint and concluded that there was nothing to indicate any oil & gas related harms.

Thus, the trial judge required the plaintiffs to produce expert reports or affidavits with supporting data establishing: (1) the substance(s) to which the Strudleys were exposed; (2) whether and what illness the substance(s) are claimed to cause; (3) the dose and duration of exposure; (4) the location of the exposure; (5) evidence of a medically recognized illness; and (6) a conclusion the illness was caused by the exposure.

The Strudleys responded with a Ph.D. chemist, who opined that well water testing on the Strudleys’ property “could be consistent with contamination from gas well chemicals…although that conclusion cannot be reached unequivocally from the chemical data alone.” They also offered a medical doctor, who never examined them but spoke to them by telephone and looked at pictures. The medical doctor offered only that there was enough evidence of a possible link presented to warrant further discovery. No expert actually offered a causation opinion and the Strudleys never clarified the precise injuries alleged.

Thereafter, the defendants moved to dismiss and the trial court agree. It held that the Strudleys had failed to make out a prima facie case.

The Colorado Court of Appeals reversed, not merely limiting itself to the particulars of the case before it, but rather holding broadly that pre-discovery Lone Pine orders are not allowed in Colorado as a matter of law. It based its decision on:

  • Colorado cases not involving toxic injuries or issues of medical causation, which disapprove of plaintiffs being put to a pre-discovery duty to establish a prima facie case.
  • Colorado’s Rule 16, which it read as not giving state trial judges the same broad management discretion as granted by Federal Rule 16.
  • Cases outside of Colorado, noting that Lone Pine orders are most frequently granted in litigation involving large groups of plaintiffs or defendants and/or when some discovery has already been completed.

There is ample room for defendants to criticize the Court of Appeals reasoning by analogy to cases not involving toxic injury, as well as its narrow and somewhat arbitrary construction of Colorado’s Rule 16. For example, the Colorado Court did not address at all whether a less burdensome version of a Lone Pine order might be permissible in Colorado.

Still, for the Strudley defendants and beyond, the narrower basis for the decision may prove the hardest to dislodge. Several other courts — including in fracking litigation since Strudley — have declined to enter Lone Pine orders for specific fact-based reasons. See, e.g., Roth v. Cabot Oil & Gas Corp., 287 F.R.D. 293, 297 (M.D.Pa. 2012); Kaumuck v. Shell Energy Holdings GP, LLC, 2012 WL 3864954 (M.D. Pa. Sept. 5, 2012) (unpublished opinion and order).

We will continue to watch as this litigation proceeds and as defendants in fracking and other toxic injury claims file seek to employ Lone Pine.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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