United States: Oklahoma Court Dismisses Fracking Earthquake Case Due To Court's Lack Of Scientific Expertise

Sierra Club v. Chesapeake Operating LLC et al., __ F. Supp. 3d ___, 2017 WL 1287546 (W.D. Okla. 2017). The Sierra Club filed a citizen suit under the Resource Conservation and Recovery Act ("RCRA") against Chesapeake Operating LLC, Devon Energy Production Co. LP, Sandridge Exploration and Production LLC, and New Dominion LLC (collectively, "defendants"), alleging that the defendants' fracking activities increased the number and severity of earthquakes in Oklahoma. Id. at *1. The Sierra Club sought declaratory and injunctive relief from the court requiring the defendants to reduce their wastewater disposal volume, reinforce structures vulnerable to earthquakes, and establish an earthquake monitoring center. Id. The defendants moved to dismiss the complaint, contending that the court should decline to exercise jurisdiction under the Burford abstention and primary jurisdiction doctrines because the ("OCC") has implemented new regulations and water disposal directives in response to increased seismic activity. Id. at *2. The district court granted the defendants' motion to dismiss, deferring to the OCC expertise on both grounds. Id. at *10.

The court began its analysis by recounting the complicated legal framework and processes governing fracking in Oklahoma. The court recognized that the OCC has "exclusive jurisdiction, power and authority . . . to promulgate and enforce rules" to regulate injection wells, or Class II wells, used in fracking. Id. at *2. Furthermore, the OCC regulates Class II wells through a comprehensive system of permit adjudication and must approve every Class II well. Id. The OCC may suspend, modify, vacate, amend or terminate "an order or permit granting an underground injection application during its term for cause." Id. Additionally, any interested person has the right to apply to the OCC to repeal, amend, modify, or supplement its administrative orders. Id. The OCC must consider these applications as expeditiously as possible and any appeal lies with the Oklahoma Supreme Court. Id. Finally, the court noted that the OCC may "take whatever action necessary to promptly respond to emergency situations having potentially critical environmental or public safety impact . . . including, but not limited to, seismic activity." Id. at *2–3.

The court concluded that, under this regulatory framework, the OCC "responded energetically" to minimize the earthquake risk due to fracking activities within the state. Id. at *10. In 2014, the OCC adopted rules requiring a daily recording of well pressure and volume for disposal wells. Id. at *4. In 2015 and 2016, it issued numerous directives to reduce disposal volumes, such as implementing a 40 percent volume reduction plan for over 600 wells, or to stop operations altogether. Id. In the aggregate, the reduction plans reduced Class II disposal wells by approximately 800,000 barrels a day and involved about 700 disposal wells. Id. This year, the OCC imposed additional limits for wells within the 15,000-square-mile area of interest. Id. All of these directives were mandatory and required immediate implementation. Id.

With this background in mind, the court addressed defendants' first request to dismiss the Sierra Club's RCRA claim pursuant to the Burford abstention doctrine. This doctrine, which was enacted to protect complex state administrative processes from undue federal influence, requires federal courts to decline jurisdiction in situations "where the exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern." Id. at *10. The court determined abstention was appropriate because the OCC was the primary Class II wastewater regulator under both federal and state law and, pursuant to its authority, the OCC had to make a coordinated response to seismicity that encompassed a substantial portion of the state. Id. at *11. Furthermore, seismicity is an area of substantial public concern. Finally, the court determined that timely state court review was available as well. Id. at *11. Accordingly, the court declined review under the Burford abstention doctrine. Id.

The court also granted defendants' motion to dismiss on the basis of primary jurisdiction for similar reasons. First, the court found that the Sierra Club's factual issues are outside the conventional experience of judges. Id. at *17. The court determined that the OCC is "better equipped . . . to resolve the seismicity issue relating to disposal well activities by specialization, by insight gained through experience, and by more flexible procedure." Id. at *18. Second, the court observed that the defendants "could be subjected to conflicting orders of both the court and the OCC" if the court found for the Sierra Club. Id. The court viewed a clear need for uniformity and consistency in addressing seismic activity so it deferred to the OCC. Id. Third, although no formal agency proceedings had been initiated, the court found that the OCC "had been taking an escalating series of voluntary measures to curtail injection." Id. at *19. Fourth, the court determined that the "OCC had demonstrated diligence in resolving these issues." Id. at *20. Fifth, the Sierra Club requested injunctive relief, which makes the primary jurisdiction doctrine more readily applicable. Id. In addition, the requested relief required scientific and technical expertise, which the OCC possesses. Id. Consequently, the court found that the OCC had primary jurisdiction. Id. Finally, because there is no statute of limitation applicable to the Sierra Club's RCRA claim, the Sierra Club would not be unfairly prejudiced or disadvantaged by a dismissal instead of a stay. Id. at *21–22.

This article originally appeared in the American Bar Association's “Environmental Litigation and Toxic Torts Committee Newsletter.”

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