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Federal Jury Finds Cabot Responsible For Tainted Pennsylvania Water Wells, Awards $4M-Plus

After deliberating for two days, a federal jury has awarded two families in rural Dimock Township, PA, more than $4 million, finding that Cabot Oil & Gas Corp.'s operations there were responsible for contaminating their water wells.

The jury's decision, and the punitive and compensatory damages it awarded, are the latest development in an ongoing saga that began in 2009. Dozens of residents from the small Susquehanna County community filed a federal civil lawsuit in November of that year against Cabot, alleging that the company contaminated their groundwater supplies through drilling activities. It all began when a residential water well exploded there, but Cabot has consistently denied those claims, arguing that any methane present in the water is naturally-occurring and treatable (see Shale Daily, Jan. 26, 2009).

In 2012, 40 residents settled with Cabot outside of court for an undisclosed amount, but two families pressed ahead with the lawsuit (see Shale Daily, Aug. 16, 2012). The trial began late last month. It opened at the U.S. District Court for the Middle District of Pennsylvania to fanfare, with protesters gathered in front of the courthouse and statewide news media coverage.

But by the time proceedings got under way, the plaintiffs had scant evidence to prove that horizontal hydraulic fracturing had contaminated the water. Jurors were essentially asked whether Cabot had been a nuisance to the families.  

On Thursday, the jury awarded $2.75 million to Scott Ely and Monica Marta-Ely. It awarded $1.49 million to Ray and Victoria Hubert as well.

In a statement issued Thursday, Cabot said it was "surprised at the jury's verdict" given a lack of evidence provided to support the plaintiffs’ nuisance claim.

"The verdict disregards overwhelming scientific and factual evidence that Cabot acted as a prudent operator in conducting its operations," the company said. "Cabot will be filing motions with the court to set the verdict aside based upon lack of evidence as well as conduct of plaintiffs’ counsel calculated to deprive Cabot of a fair trial."

The company was represented by international law firm Norton Rose Fulbright, while the plaintiffs employed just one New York-based attorney, Leslie Lewis. The Dimock incident served as an early rallying cry for shale gas opponents, having been featured in the anti-fossil fuel documentary Gasland and other films, as well as drawing the attention of Hollywood actors, such as Mark Ruffalo, who supported the plaintiffs.

Several rounds of testing by the U.S. Environmental Protection Agency determined that water from the private wells was safe to drink, while separate testing by the Pennsylvania Department of Environmental Protection (DEP) arrived at the same conclusion (see Shale Daily, March 19, 2012; Jan. 23, 2012).

Still, a 2009 DEP investigation determined that Cabot was responsible for the methane contamination in water wells serving 19 households. Cabot settled with the DEP in December 2010 without accepting blame but nevertheless agreeing to pay the affected residents $4.1 million and provide whole-house gas mitigation systems (see Shale Daily, Dec. 17, 2010).

Cabot has long been one of the state's leading producers, reporting the second-highest volumes of natural gas in Pennsylvania last year (see Shale DailyFeb. 22). The company recorded its sixth-consecutive year of double-digit production growth in 2015, reporting volumes of 602.5 Bcfe, driven largely by its operations in Northeast Pennsylvania (see Shale DailyFeb. 19).

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