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In January of this year, the Supreme Court of Pennsylvania tackled an issue that has been confronted by few other courts—whether the rule of capture precludes a claim for subsurface trespass due to hydraulic fracturing.[1]

Prior to the Pennsylvania ruling, there were two seminal cases that have addressed the issue and reached conflicting results.  The first is a 2008 Texas Supreme Court decision in which the court framed the issue as “whether subsurface hydraulic fracturing of a natural gas well that extends into another’s property is a trespass for which the value of gas drained as a result may be recovered as damages.”[2]  Both the trial court and the appellate court awarded damages to the plaintiffs for the gas drained.  The Texas Supreme Court reversed, finding that the rule of capture precluded an actionable trespass claim.  The court found that an actionable trespass claim requires an injury and that the only claimed injury in this case—drainage of gas from beneath the plaintiff’s property—was barred by the rule of capture.[3]  Notably, the court left open the possibility that a plaintiff could recover in the event the plaintiff suffered non-drainage damages such as damage to the reservoir, but that was not alleged in this particular case.

The second prelude to the recent Pennsylvania decision was a 2013 Federal District Court for the Northern District of West Virginia ruling in Stone v. Chesapeake Appalachia, L.L.C.[4]  Although the Stone decision was ultimately vacated on a joint motion after the parties settled, the court’s ruling is instructive.  Applying West Virginia law, the district court found that the rule of capture does not apply when hydraulic fracturing extends beyond subsurface property lines.  The court relied heavily on the reasoning of the dissenting opinion in Garza, finding that “the common law rule of capture is not a license to plunder.”[5]

The Supreme Court of Pennsylvania’s recent decision provides additional guidance on the issue, but still leaves some unanswered questions surrounding hydraulic fracturing and subsurface trespass claims.  Plaintiffs, unleased mineral owners, owned a tract of land adjacent to property leased by Southwestern Energy Production Company.  Southwestern operated several wells on the leased tract, several of which were hydraulically fractured.  Plaintiffs filed suit alleging that Southwestern produced gas from beneath their land as a result of the hydraulic fracturing operations, but, importantly, did not allege in their petition that Southwestern caused any fluids or proppants to physically intrude onto plaintiffs’ property.

Southwestern filed a motion for summary judgment arguing that the rule of capture bars plaintiffs’ trespass claim, which the trial court granted.[6]  Plaintiffs appealed the trial court’s decision relying heavily on the argument that hydraulic fracturing is an artificial means of forcing gas that is otherwise trapped in a tight formation to migrate and, thus, the rule of capture should not apply.[7]  The two-judge panel for the Superior Court reversed the trial court decision, agreeing in part with the plaintiffs’ argument that hydraulic fracturing is different than conventional drilling and should not be treated the same as conventional drilling under the rule of capture.  The panel found that plaintiffs may have a claim for trespass, particularly if they can show that there was a physical intrusion beneath their property.[8]  Accordingly, the panel held that summary judgment was premature and remanded the case to the trial court for further proceedings to determine whether there had been a physical invasion.[9]

Southwestern appealed to the Supreme Court of Pennsylvania, submitting a single question for review: “Does the rule of capture apply to oil and gas produced from wells that were completed using hydraulic fracturing and preclude trespass liability for allegedly draining oil or gas from under nearby property, where the well is drilled solely on and beneath the driller’s own property and the hydraulic fracturing fluids are injected solely on or beneath the driller’s own property?”[10]  Notably, Southwestern did not ask the court to address whether the rule of capture bars a claim for trespass if the stimulated fractures extend beyond subsurface property lines.

The Supreme Court of Pennsylvania vacated the Superior Court’s ruling and remanded the case back to the Superior Court for reconsideration.[11]  Perhaps most importantly, the Supreme Court rejected the Superior Court’s suggestion that the rule of capture does not apply to hydraulic fracturing due to the fact that hydraulic fracturing is an artificial means to stimulate production.  The court reasoned that every oil and gas well, whether conventional or otherwise, artificially creates a pressure gradient that causes minerals to flow towards the wellbore that otherwise would have remained in place.[12]  Accordingly, the rule of capture is not rendered inapplicable simply because hydraulic fracturing provides an additional mechanism by which operators stimulate production.

Southwestern also argued that the traditional notions of trespass should not extend miles below the surface just as those notions do not extend miles above the surface.[13]  The Court recognized that this theory has been adopted by some states, but determined that this theory related to actual trespass claims involving a physical invasion did not fall within the limited issue for review.[14]

The Supreme Court of Pennsylvania’s recent decision in Briggs does provide some additional guidance moving forward.  The decision makes a well-reasoned argument as to why hydraulic fracturing should be treated no different than conventional drilling practices for purposes of the rule of capture, which is an important threshold issue in subsurface trespass suits.  However, the decision was expressly limited to situations where there has been no physical invasion of proppants, frac water, etc.  If the plaintiffs can show that there has been a physical invasion, it seems likely Southwestern will appeal back to the Supreme Court of Pennsylvania to determine whether the rule of capture bars a subsurface trespass claim when there has been a physical invasion.  This case will be one to watch as it moves forward in the lower Pennsylvania courts.

If you have any questions concerning the Briggs v. Southwestern Energy Production Company decision or other legal issues relating to hydraulic fracturing and subsurface trespass, please contact Jamie Rhymes, Jeff Lieberman, or Caleb Madere.

[1]              Briggs v. Southwestern Energy Production Company, 2020 WL 355911 (Pa. 2020).

[2]              Coastal Oil & Gas Corp. v. Garza Energy Trust, 268 S.W.3d 1, 4 (Tx. 2008).

[3]              Id. at 12-13.

[4]              No. 5:12–CV–102, 2013 WL 2097397 (N.D. W. Va. Apr. 10).

[5]              Id. at p.6 (quoting Young v. Ethyl Corp., 521 F.2d 771 (8th Cir.1975)).

[6]              Briggs, 2020 WL 355911 at p. *5.

[7]             Briggs v. Southwestern Energy Production Company, 184 A.3d 153, 156-57 (Pa. Super. 2018).

[8]              Id. at 162-63.

[9]              Id. at 164.

[10]             Briggs, 2020 WL 355911 at p. *7.

[11]             Id. at *14.

[12]             Id. at *11.

[13]             Id. at *13.

[14]             Id.

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