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Cabot's Motion to Dismiss Dimock Lawsuit Denied

A federal judge in Pennsylvania has denied a motion by Cabot Oil & Gas Corp. to dismiss a case brought by Dimock Township, PA, residents who claim that their health and property has been harmed by the producer's natural gas activities.

Cabot had asked the U.S. District Court for the Middle District of Pennsylvania to dismiss a lawsuit brought in November 2009 by 63 residents of the Susquehanna County township. Cabot argued that the plaintiffs had failed to establish a legal basis for their case (Norma J. Fiorentino, et al., v. Cabot Oil & Gas Corp. and Gas Search Drilling Services Corp., No. 09-cv-2284).

The Houston-based producer has been cited by the Pennsylvania Department of Environmental Protection (DEP) numerous times for incidents in the Dimock Township area. According to DEP, Cabot contractors in three separate incidents in September 2009 spilled drilling fluids at the company's Heitsman natural gas well pad in the township (see Daily GPI, Sept. 24, 2009).

Dimock residents sued the producer in November 2009 after some of the homeowners' water wells were found to be contaminated by methane gas that apparently migrated into groundwater supplies during drilling activities. The lawsuit claimed that Cabot's gas drilling activities allowed methane and other toxins to migrate onto their land and into their drinking water, causing them illness, property damage, fear of future sickness and emotional distress.

Cabot last year was ordered by DEP to install permanent treatment systems in the affected homes (see Daily GPI, April 19; Nov. 6, 2009). DEP also ordered Cabot two months ago to pay nearly $12 million to cover the costs to replace water mains to Dimock (see Shale Daily, Oct. 21).

District Court Judge John E. Jones III said in a order on Nov. 15 that the plaintiffs' case may move forward on all but a portion of one count. Cabot's request to strike several allegations from the complaint also was denied.

Of particular note to gas drillers was a portion of the order that denied Cabot's request to throw out the plaintiffs' claim that the producer was legally responsible for the alleged harm based on the principle of strict liability. The strict liability principle holds that some activities are so dangerous that parties conducting them are responsible for any damage caused, regardless of the precautions taken.

Pennsylvania courts to date have not addressed whether gas drilling is considered an "abnormally dangerous" activity that would fall under the strict liability standard. Cabot had argued that state courts had determined that similar activities, such as operating underground storage tanks or pipelines, are not considered abnormally dangerous.

It is too early to extend the standard for storage tanks and pipelines to gas drilling, said Jones.

"We believe it improvident to automatically extend this reasoning to drilling activities without more thorough consideration," Jones wrote. Cabot, he said, may raise the issue before the court when more facts have been presented in the case.

In a minor victory for Cabot, Jones dismissed the plaintiffs' claim of gross negligence as a cause of action. However, Jones said the plaintiffs may retain the allegations made under the gross negligence claim to support a broader cause for punitive damages.

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