On April 4, 2017, a federal district court dismissed a citizen-enforcement action under the Resource Conservation and Recovery Act that could have profound impact on fracking suits against the oil and gas industry.
In Sierra Club v. Chesapeke Operating, LLC, the Sierra Club alleged that the deep injection of liquid waste from oil and gas activities has caused an increase in the number and severity of earthquakes in Oklahoma. To address this alleged harm, the Sierra Club sought several forms of injunctive relief, including reduction of waste disposal activities, reinforcement of structures vulnerable to earthquakes, and the establishment of an independent earthquake monitoring center.
Defendants Chesapeake Operating, LLC, Devon Energy Production Co., LP, and New Dominion, LLC moved to dismiss the case on several grounds. The court granted the motions on two of these grounds, finding that the issues raised by Sierra Club are best addressed at the state administrative level.
First, the court invoked the so-called “Burford absention” doctrine. In a nutshell, this doctrine allows for dismissal where the exercise of federal jurisdiction would interfere with the proceedings or orders of state administrative agencies. In this case, the court noted that the Oklahoma Corporation Commission (“OCC”) is vested with exclusive authority to regulate injection/disposal wells. Pursuant to this authority, the OCC has taken several steps to address the concerns raised by Sierra Club, including permitting requirements and the issuance of new rules and directives. In light of these activities, the court found that “[f]ederal review at this juncture would be disruptive of the OCC’s efforts to establish a coherent policy with respect to seismic activity relating to the disposal wells.” The court also found that dismissal would not leave Sierra Club without a remedy, because the primary relief requested in the lawsuit—the immediate and substantial reduction of wastewater disposal—could be obtained by application to the OCC.
Second, the court dismissed the case under the “primary jurisdiction” doctrine. Like Burford abstention, the primary jurisdiction doctrine is concerned with protecting the state administrative process from federal judicial interference. Under this doctrine, courts will decline to hear cases that raise complex issues not within the conventional experience of the courts, deferring instead to administrative agencies with specialized expertise. Sensitive to these concerns, the Oklahoma federal court found that “[t]he relief sought by plaintiff would require the court to operate (and this would amount more to regulation than adjudication) at the confluence of several areas of expertise, including geology, geophysics, hydraulics and petroleum engineering, to say nothing of seismology.” The court also noted that if the case was allowed to proceed in federal court, and the plaintiff ultimately prevailed, the defendants could be subjected to conflicting orders from the court and the OCC.
Although the court’s ruling only binds the parties to the dispute, it may impact the viability of future fracking suits against the oil and gas industry. Defendants seeking to avoid federal court will no doubt argue that the forum state’s administrative process is the proper vehicle for addressing fracking disputes. For more information about this blog entry or related issues, please contact attorney Philip Dore at email@example.com.
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