A federal judge in Pennsylvania last month 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 last year was cited by the Pennsylvania Department of Environmental Protection (DEP) for spilled drilling fluid incidents in the Dimock Township area (see NGI, Sept. 28, 2009). Dimock residents two months later sued the producer 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.

DEP ordered Cabot to install permanent treatment systems in the affected homes and two months ago state officials ordered the producer to pay nearly $12 million to cover the costs to replace water mains to Dimock (see NGI, Oct. 25).

District Court Judge John E. Jones III said 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 Jones’ order, which 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 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.

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.