SWN appeals ‘rule of capture’ case

BY REGGIE SHEFFIELD

Correspondent

Southwestern Energy company has asked the full bench of the state Superior Court to decide whether a three-judge panel erred earlier this month when it ruled that the gas drilling giant could no longer use the century-old defense known as “right of capture” in a trespass case filed by a Susquehanna County family.

In papers filed with the Superior Court Monday, lawyers for the Houston-based driller argue that Judge John L. Musmanno incorrectly applied the law in ruling that because the “right of capture” was established with traditional vertical drilling in mind it should not apply to more contemporary horizontal drilling of the type used in the case of the Harford Twp. Briggs family.

Earlier this month Musmanno ruled that the case should be sent back here to county court to decide if there was a trespass after he and two other Superior Court judges ruled that Southwestern could not use the capture defense after taking gas from under the Briggs family’s property without a lease.

But in their petition, lawyers for Southwestern said that the three-judge panel’s decision lacked enough of a proper legal foundation to erase a well-established legal standard that has stood for over a century.

“Regardless of whether gas is in a reservoir near the surface or farther below the surface in the shale formation, the only thing keeping it in its location is the earth around it, and the only thing that triggers its movement is human intervention. Gas is gas, and it will flow when humans intervene,” wrote attorneys for Southwestern, quoting a 1900 Pennsylvania appellate court case.

“We believe the trial court correctly applied established law that has stood for over a century,” Southwestern spokeswoman Jan Sieving said in an e-mailed statement.

“This law encourages responsible use of Pennsylvania’s natural resources and is helping establish U.S. energy independence while creating jobs.”

 “Southwestern Energy remains committed to operating safely and contributing to Pennsylvania job growth while producing low carbon, environmentally friendly natural gas,” Sieving’s statement continued.

In November 2015 in the Susquehanna County Court of Common Pleas, the Briggs family sued Southwestern Energy for trespassing.  In August 2017, now retired Monroe County Senior Judge Linda Wallach Miller, sitting in Susquehanna by special designation, ruled in favor of Southwestern, saying that the “rule of capture” protected its right to recover gas from under an 11-acres parcel owned by the Briggs.

The theory behind the “rule of capture” is that underground pools of gas discovered by traditional vertical drilling tend to move over time.  Therefore, the rule stated, the first driller to expend the time, effort and expense to discover them could “capture” them even if they later moved, or migrated under another property. 

The Briggs appealed. Musmanno’s opinion disagreed, saying that the practice of fracking used by Southwestern releases gas which is otherwise trapped underground a person’s property and not subject to movement.

Last week, after ruling that Southwestern could not use the rule of capture as a defense, the Superior Court sent the case back here to county court to resolve the issue of whether Southwestern’s actions nevertheless constituted a trespass.  No hearing has been scheduled.  Southwestern has operated gas wells on adjacent properties since 2011.

 “The decision of the Superior Court is a thorough, scholarly and well reasoned consideration of the issue presented and should not be disturbed,” said Briggs attorney Laurence Kelly of Montrose.

Legal experts have interpreted the court’s decision as clarifying the law on the property owner’s rights in horizontal drilling cases such as the Briggs’ and said it will help insure that both the rights of the property owner and driller are protected.

The Marcellus Shale Coalition filed a “friend of the court,” or amicus, statement in support of Southwestern’s petition, saying that the three-judge panel has in effect created a new way type of civil liability for the drilling industry in Pennsylvania.

“The panel’s decision disrupts longstanding rules of law on which property owners, production companies, and many other stakeholders in Pennsylvania have relied to conduct their affairs and creates an unprecedented form of tort liability that has negative implications for property owners, the natural gas industry, and Pennsylvania’s economy,” it read.

The American Petroleum Institute, based in Washington, D.C., the largest trade association for the gas and oil industry in the United States, joined the coalition in its own amicus statement also filed Monday.

“Changing the long settled law to recognize a new tort, trespass by fracture, would deprive vested rights, defeat reasonable, investment backed expectations and create a flood of unwarranted, and unanticipated, claims and litigation,” it said.

Owen L. Anderson, who studies the oil and gas industry at the University of Texas and the University Of Oklahoma School Of Law, also filed a statement supporting Southwestern.