Cabot Oil & Gas Goes on Offensive Against Fracking Nuisance Lawsuits

Guest post by David Middleton

AUG 22, 2017

Cabot Oil And Gas Declines To Play Sue And Settle

 

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A Cabot Oil & Gas sign stands at the entrance to a natural gas well drilling site in Dimock, Pennsylvania. Photographer: Daniel Acker/Bloomberg

There is a great, overriding bias in corporate America that favors entering into settlement agreements in litigation rather than engage in the trial process.  The oil and natural gas industry is no exception to this corporate inertia.

[…]

Most often, such decisions are made within companies on a simple cost/benefit analysis:  Unless a case is tossed out by the presiding judge in a summary judgment, it is almost always less expensive to settle than to engage in a long, drawn-out trial process.  The bottom line impacts all decisions in corporate America – as it should – and thus, this bias towards settling should surprise no one.  Corporations also fear incurring negative press coverage, knowing that the media always will tend to portray such litigation as big corporate America vs. the “little guy.”

All of which is a long way of getting around to saying that I was pleasantly surprised when I read that Cabot Oil & Gas Corporation didn’t just go into settlement mode when a landowner named Ray Kemble and his lawyers filed a nuisance suit against the company on allegations that had already been dealt with in prior litigation involving Mr. Kemble that was settled in 2012.

The easy thing to have done with such a case would have been to offer the plaintiff a token settlement, even though the company believed the case was clearly frivolous.  Instead, Cabot’s management chose to challenge what it saw as a double-dip filing, and the judge rewarded the company by dismissing the suit in a summary judgment.  In normal corporate behavior, that would have been the end of things.

But Cabot’s management had, in the words of company spokesman George Stark, “grown weary of this ‘sue and settle’ racket” that it believes this case represents.  So, rather than just let the matter drop, Cabot’s management chose instead to file a counter-suit against Mr. Kemble and his lawyers.  “We aren’t suing a landowner,” says Stark, “We’re suing a big law firm.”

The main firm targeted by the suit is the Speer Law Firm, a Missouri-based firm headed by plaintiff attorney Charles F. Speer.  The suit also includes the Pennsylvania firm of Ciarimboli, Boylan and F&C, which partnered with Speer in Mr. Kemble’s filing.

[…]

So, this is what it looks like when a U.S. corporation declines to play the ‘sue and settle’ game any longer, and chooses to aggressively defend itself on the merits instead.  It is interesting to note that, to this point anyway, Cabot has received very little in the way of negative press related to this counter-suit, despite the company’s high profile as one of the largest operators in the Marcellus Shale region.  More could certainly come as the case goes to trial, and if that happens it will be interesting to see how the company handles it.

Regardless, it is refreshing to see one company’s management reject taking the easy way out, and take a principled approach to what it sees as frivolous litigation instead. It’s a risk, but one that could benefit the entire industry should it be seen all the way through to a successful conclusion.

 

The primary targets are the “slip & fall” law firms representing Mr. Kemble in his nuisance lawsuit against Cabot.

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72 thoughts on “Cabot Oil & Gas Goes on Offensive Against Fracking Nuisance Lawsuits

    • The classic for popcorn sales was SCO vs. The World. It was a bunch of legal shenanigans lasting a decade in which SCO sued several companies, none of whom (IIRC) settled.

      There was a website, Groklaw, which documented the whole thing. As far as I can tell, SCO knew they were doomed but continued on well into bankruptcy in some kind of scorched earth campaign. Some people think they were trying to delay the adoption of Linux by creating fear, uncertainty, and dread (FUD). They were amazingly successful at stringing out their ultimately losing case.

      • It was SCO’s sue and settle policies that finally did them in. They thought they owned the rights to a lot of other people’s intellectual property.

      • Bolstering the notion that every cloud has a silver lining, SCO vs. World created a lot of debate on what makes a lawsuit frivolous and did get that bar raised a bit.

    • I’d like to see DOJ file an amicus brief urging a strong rebuke to the defendants for abusing the legal system with frivolous actions.

  1. Hard to see what the PR downside of suing a lawyer would be. Good luck to them and to everyone suing Greenpeace!

    • When I finally get to view the grass from the brown side, I plan to take plenty of warm clothes with me. I don’t expect to be able to get near the fires of Hell, for all of the lawyers.

      g

    • Not always true. For example, in patent law suits, where A is suing B for some patent infringement, and say B’s lawyers present to A’s lawyers; perhaps in some deposition situation, clear evidence that in fact their client’s case has no merit; perhaps the patent is provably invalid legally; and A’s lawyers continue to harass B and its lawyers in search of some undeserved settlement, there is this thing called ” Rule Eleven (11) ” under which A’s lawyers themselves, become liable for ALL of B’s legal expenses; possibly plus damages, if they continue to pursue B.

      I had the very interesting pleasure to assist a type ” B ” law firm in taking a deposition of an “inventor” who had sued my employer (he actually sued the US Government, including the Department of the Army, and the US Post Office) over his “patent” for an optical contrivance, he claimed we were infringing.
      It turned out that A’s Lawyer (a very respectable and reputable one), was the only person who was not aware that his client’s patent was invalid, by virtue of a statutory bar, in that he had tried to commercialize his invention (tried to sell it) a full 18 months before he actually filed for his patent, and in fact he had written in his own handwriting in his lab note book that he knew he only had 12 months to file, after trying to cash in on his invention. Our B type lawyer had the telephone records of the would be customer for this device (a very large Aircraft manufacturer), who had in his records the phone calls, and subsequent meeting with the inventor at his place of business, to try and purchase the product; 18 months before the patent was filed. so the patent was statutorially invalid.
      Well as it turned out (A) we did NOT in fact infringe the patent anyway; our product was deliberately designed so as to not infringe that patent; about which we actually knew nothing at the time our device was developed, and (B) his patent was invalid because of Prior Art, (dating back as far as 1640 (A chap named Huygens), and moreover, the actual patent contained in the boilerplate the actual text book including page numbers in which the precise function of this chaps invention was described. So his patent literally claimed to be infringed by the prior art (dating from a 1926 textbook, so the operation was obvious to persons of ordinary skill in the art (C).

      When we laid all of this on his (A) lawyer, who was unaware of any of it, they still came back at us after we broke for lunch, having laid the statutory bomb on the attorney, and asked if we would settle for 2/3rds of what they originally sought.

      At that point our lawyer slid the Rule eleven card out of his sleeve, and peace and quiet was restored to the neighborhood.

      Some of the shenanigans in law suits, are decidedly entertaining; that one certainly was, and it saved my employer about 20 million dollars, not counting the mountainous stack of legal work our type (B) lawyer would have charged to dig out the evidence I dashed off for them over one weekend.

      But yes; it is true that sometimes the lawyers do get handed their head by the judge.

      G

    • Tom Halla – August 23, 2017 at 2:42 pm

      The problem is the tendency of judges to favor lawyers, and rarely sanction their behavior

      Yup, most people tend to forget the fact that all sitting Judges were once practicing Lawyers themselves.

      And that is why a Judge officiating over a trial will sometimes “order”, …… “You two, …. into my chambers, …… NOW.

      • In places where judges are an elected position, the biggest contributors to judges campaigns are lawyers.

  2. Something strange happening with the links, I get something to do with Twitter (which I am avoiding).

    ‘Hours dreadful and things strange, but this sore night
    Hath trifled former knowings.’

  3. Environmentalists believe in “=” (i.e. political congruence), not in equal treatment, risk assessment, etc.

  4. Interesting. We now have 3 companies suing back.
    One is in Canada regarding forestry.
    One in North Dakota about the pipeline
    One in Pennsylvania about fracking.

    • In the industry, it’s usually called hydraulic fracturing. Frac and frac’ing are the most common abbreviations. Frack has become the conventional spelling in common usage.

      I just call the anti-frac activists: frackheads and frackt@rds.

      • Fracking is really a misnomer. Fracking has been around for 60 years – and isn’t really what the econuts are upset about. Econuts get upset any time someone figures out a more efficient way of getting oil and gas. In this case the technology is lateral drilling allowing more bore space within the actual petro containing geological feature – rather than just having a small contact drilling through. It is really the lateral drilling which is causing them to go nuts. But lateral drilling doesn’t sound as bad as fracking.

      • Fracking is not a misnomer. It is a conventional spelling of frac’ing, an abbreviation of hydraulic fracturing.

        Otherwise, you are spot on. Frac’ing is nothing new. Precision directional drilling is the relatively new technology. The ability to steer a drillbit laterally through the middle of a formation enabled the shale revolution.

      • David Middleton – August 23, 2017 at 5:37 pm

        Precision directional drilling is the relatively new technology. The ability to steer a drillbit laterally through the middle of a formation enabled the shale revolution.

        David M, was not “deep well” precision directional (horizontal) drilling first employed by off-shore oil and NG producers?

        I assume that it again proves that “necessity is the mother of invention” …… because the “invention” of “deep well” precision directional (horizontal) drilling was a lot cheaper than moving those off-shore drilling platforms over-top of a new “site” every couple of months or so to bore a new hole.

      • I don’t know if that was the first use of directional drilling… But directional drilling is an absolute necessity offshore, particularly in water depths >100′.

        We’ve been drilling directional wells for many decades. The “new” thing is the ability to precisely steer the well using real-time logging data.

        A conventional directional well tries to hit targets within a 100′ radius. Horizontal or lateral wells are steered right down the middle of a formation.

      • Yes David “frack” was contrived by the Church of the Environment, a sect of the religion of Secular Socialism, because it begins with “F” and ends with “K” implying another verb.

      • And I fracking well use it that way all of the time… ;)

        Frack was also used as a polite cuss word in the original Battlestar Galatica… Kind of like how Lister used the word “smegging” in Red Dwarf.

      • Dave, in several bar conversations many years ago in Texas, I was told that directional drilling was originally developed as just a better way of slant drilling with less chance of getting caught. Some enterprising driller figured out that if he placed a steel plate down the bore hole and aligned it properly it would deflect the drill bit under the neighboring lease. Of course we all know that no good tool pusher would ever allow such shenanigans on ‘his’ rig :<).

      • Not legally… anyway. I’m sure there could be examples of this from many decades ago in the US. But, that’s a practice that would be almost impossible to pull off today and would carry serious monetary penalties.

      • One of the most astonishing bits of modern lateral directional drilling I recall reading about was Statoil’s exploitation of a small satellite field some 5km from one of the Oseberg platforms in the North Sea in the 1990s. It entailed steering the bit through an impervious layer that was at times little more than 1 metre thick, with some vertical deformations along the way. BP’s Goathorn Peninsula Well M-11 at Wytch Farm that reaches out 11 km into the Bay was also astonishing, and for may years held the record for lateral reach. Some of the story is told here:

        https://static1.squarespace.com/static/52d71403e4b06286127a1d48/t/53237de5e4b02c883fb23066/1394834917068/AttFWytchFarm.pdf

  5. There is also the lawsuits against Dr. Tim Ball and Mark Steyn from Mann that have been dragging on for years.

    • Yes, but these are different. The industry saying no more. We are going to fight and more than fight.
      We should be able to have a longer list, not only from Canada and USA.
      Or maybe this is just starting to turn around.

    • Check out Mark Stern’s webpage. He just recently commented on the case which remains “stuck” in the constipated DC court system.

  6. OT but our ABC still giving time to Trump bashing, the latest is an excerpt from Shillarys new book about the 2nd debate and how Donald kept invading her personal space and intensionally put her off by looking at her .

  7. Well Praise the Lord, and I’m an atheist. It’s about time somebody found their corporate courage and conscience.

    • I’m impressed! One of the other atheists that comments on this blog always thinks he has to force his beliefs on everyone else, and call those who disagree with him all manner of foul epithets. I dislike that sort of pedant.
      We could be friends, especially since you have a sense of humor. Comment on!

  8. Push back starts here.

    Richard Garneau, the chief executive of Resolute, who himself hails from the company’s centre of logging operations in the Saguenay region north of Quebec City, seized on Greenpeace’s admissions in an op-ed published Thursday in the conservative U.S. magazine National Review.

    “A funny thing happened when Greenpeace and allies were forced to account for their claims in court,” Garneau wrote. “They started changing their tune. Their condemnations of our forestry practices ‘do not hew to strict literalism or scientific precision,’ as they concede in their latest legal filings. These are sober admissions after years of irresponsible attacks.”

    Greenpeace admits its attacks on forest products giant were ‘non-verifiable statements of subjective opinion’

  9. Read about the good Judge Janice Jack and silicosis lawsuits if you want to learn about lawyer shenanigans.

  10. ‘do not hew to strict literalism or scientific precision,’ … is that a PC way of saying they lied?

  11. Hoorah!!! More US companies are emboldened to legally go after their harassers.
    ‘Sue and Settle’ provides funds for the ambulance chasing law firms (ACLFs) to go after their next ‘shake down’ target. ‘Sue and Settle’ is knee capped by ‘Counter sue and Collect’, which not only denies the ACLFs revenue from their target but also, by court order, makes them pay legal expenses and damages to their target! Now that is a Win-Win situation in my world!

  12. So, do the Speer Law Firm and Ciarimboli, Boylan and F&C have some nice deep pockets that Chabot can empty out for them?

    I’d really like to see an example made of some law firm, to put a little handwriting on the wall for all those other sleazy law-troughers.

  13. Nice to see companies taking strong stands. I was so pleased when Chevron spent 15 years fighting the Ecuadorian lawyers and crooked judges and enviros and finally won. One of the videos I saw clearly showed the judge and opposing counsel talking about how to divide the spoils.

  14. It’s about time the normal people went on the offensive. The whole SJW and Marxist meme needs to be outed for what it is and not for what it portrays itself.

  15. Settling, only encourages more of the same. You should enter a fight you have a good chance of winning,of course. Mark Steyn talks about the nature of the punishment he gets with Mann’s “shut-up” lawsuit but I doubt Mann will try this again. It will have taken an enormous toll on Mann.

    Mark counter-sued for 20million+ and of course, costs. Mann hasn’t met discovery, but with the countersuit he can’t simply walk away. He is most loath to provide the “supporting” data for his hockey stick which suggests the cookery would destroy his reputation. He’s already lost his vaunted ‘Nobel Prize’ over it.

    Many warned him that he didn’t know who he was taking on. Mark had a suit brought by a plaintiff organization in Canada that he not only won, but it resulted in repeal of a lefty ‘hate’ speech federal statute.

    If the recent suit brought against Greenpeace by the big US Energy company is successful, it might cause an avalanche to follow!!

    • I hope that there is going to be much more than just an avalanche: may the Ten plagues haunt them, plus a spring flood, some earthquake, cantankerous wives and cranky children.

  16. Probably off topic, I read recently that a person in the U.S. got a multi million ‘settlement’ for using Johnson’s Talcom powder in her nether regions for many years.
    She claims it gave her cancer.
    It is possible that with all the other “me too” litigation pending the company could be bankrupted.
    My ex fiance has been using this product for the almost 50 years we have been married and she still smells of a rose and is still blooming.

  17. I would love to see the companies that are fracking sue the police here for failing to prevent the obstruction by eco freak activists of legal drilling as well as taking on Greenpeace and FOE.

  18. Will there be a fair trial? What I’ve seen, for example, from the Mann ./. Steyn lawsuit so far, I doubt it. Too many green biased Judges hanging around in court.

  19. Problem with Greenpeace, as it seemingly is with eco-activists generally, is that the act as if they are above the law . They appear to believe that they have some moral superiority, some moral justification that sets them apart from and outside of society’s rules and laws.

    There is nothing wrong with people campaigning about something they believe in, but they must be restrained to do so honestly and lawfully with truth and facts as opposed to careless propaganda that has little regard for facts.

    It is the courts and judges which must defend society against those types of behaviour with salutory penalties to make it clear this cannot continue; it is the law enforcement agencies that must robustly bring to justice any and all who threaten blackmail, violence or enter into corrupt or criminal partnerships to achieve their aims.

    It does seem to me that when a campaigning organisation uses falsehoods to raise funds then it is a fraudulent and thus criminal activity which must be stamped out.

    Maybe society urgently needs to develop a robust process which is capable of swiftly separating fact from fiction where scientific or quasi-scientific claims are made, and without the need for long, drawn out law suits. Given the apparent extent of pal-review that would need to be established outside of the scientific community as a well-toothed watchdog.

    • One of the best ways to take them down would be to challenge their charity status. Losing that will hurt them.

  20. Many years – decades even – I read an article in Compressed Air magazine about the culturing of suing for every little mishap in the US. An example was of suing a t-shirt manufacturer for not warning that his product was not resistant 25kV when worn working on electricity pylons. Common sense would have seen this thrown out but it wasn’t. The article then highlighted that there was only one volume helmet manufacturer in the US – Bell. Their existence was due to a hard policy of counter-suing anyone who sued them and as they are still here today it suggests it works. They got particularly angry about being sued over a helmet that wasn’t even a Bell – probably what tipped them over the edge.

    I also recall a session with some people in a local council regarding being sued. The subject of false cases came up and the two people said they wouldn’t fight back. The consensus of us engineers in the room was that this would just result in more false cases.

  21. Since these “slip and fall” law firms tend to sue lots of people, I wonder if they could get a class action going here?

  22. “Cabot has received very little in the way of negative press related to this counter-suit…”

    They just haven’t figured out how to connect this to Trump yet. When they do, it will get plenty of negative press.

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