Defending Marcellus shale groundwater contamination claims: the case against class actions and other theories of liability.

• Author: Mullady, Raymond G., Jr.

RECENT ADVANCES in drilling and hydraulic fracturing techniques have led to dramatic increases in the accessibility of the Marcellus Shale natural gas reserve. Although the benefits of Marcellus Shale production are numerous, increased drilling activity has elevated concerns of potential harm to both public health and the environment. Lawsuits have been filed in Pennsylvania, New York and West Virginia claiming the drilling, storage, and containment process and procedure in the Marcellus Shale have caused contamination of groundwater and/or the water supply. (1) Raising the stakes even higher, plaintiffs in other parts of the country are attempting to aggregate groundwater contamination claims from natural gas drilling activity into class action lawsuits. These cases--which may provide a model for subsequent class litigation relating to the Marcellus Shale--propose to certify a putative class of landowners and residents in proximity to natural gas operations.

The class plaintiffs seek injunctive relief in the form of "air, soil, groundwater and atmosphere" monitoring for the presence of hazardous chemicals and compounds, as well as medical monitoring "to determine the extent to which Defendants' operations pose a health risk to persons exposed thereto." (2)

This article addresses whether Marcellus groundwater contamination plaintiffs can meet Rule 23 class certification threshold requirements, with particular focus on claims that common issues of fact and law predominate over issues affecting only individual class members and that class action is superior to other methods for adjudication. This article also considers the viability of common law claims that either have been asserted or may be asserted in the future by Marcellus Shale plaintiffs in Pennsylvania, New York and West Virginia courts. These include causes of action typically seen in environmental and toxic tort litigation: public nuisance, strict liability for abnormally dangerous activities, medical monitoring, gross negligence, and diminution of property value.

1. The Marcellus Shale Formation And Hydraulic Fracturing

   Pennsylvania--sitting on top of an enormous natural gas reserve called the Marcellus Shale--has been called the "Saudi Arabia of natural gas." (3) The formation, which is about the size of Greece, extends from Virginia through the southern half of New York beneath the Appalachian landscape, and contains a significant quantity of natural gas. (4) The reserve is so large in fact that some experts believe it holds enough gas to supply the heating and electricity needs of the United States (at current consumption rates) for at least the next 15 years. (5)

   Advances in hydraulic fracturing--the practice of injecting water, mixed with chemicals and propping agents like sand, under high pressure, into wells to release oil and natural gas trapped in underground rock formations--have led to dramatic increases in the accessibility of this natural gas reserve in recent years. (6) Drilling production in Pennsylvania's Marcellus Shale formation during the last half of 2010 exceeded the amount of drilling production for the entire preceding year. (7) Although these statistics have lead some to incorrectly conclude that hydraulic fracturing is a "new" and "unsafe" process, hydraulic fracturing has been used safely in Pennsylvania since the 1950s. (8) In fact, all Pennsylvania wells drilled since the 1980s have been fractured. (9) Hydraulic fracturing is also regulated by the state oil and gas boards or state natural resource agencies (10) as well as by the EPA, which regulates many issues relating to hydraulic fracturing under environmental statutes such as the Clean Water Act and the Safe Drinking Water Act. (11)

   Current drilling practices for natural gas have advanced to the point where it is now not only feasible to drill deeper, but also to drill vertical, horizontal and directional (S-shaped) wells. (12) These recent advances in drilling techniques have also led to increases in the required water volumes, typically withdrawn from local surface and groundwater sources. (13) Hydraulic fracturing works as follows: following well construction, hydraulic fracturing fluid is injected into the well, causing the formation to crack and releasing the natural gas. Next the pressure is reduced and the direction of the fluid flow is reversed, allowing the natural gas to flow back to the surface. (14) A portion of the injected fracturing fluid also returns to the surface. (15) Carried in the returning fracture fluid are fracturing chemicals, salts and naturally occurring radioactive material brought back from these deep wells. (16) Radioactivity levels in the used hydraulic fracturing fluids can and sometimes do exceed the maximum levels allowed by federal drinking water standards. (17) Next, the fracturing liquid is reused or sent to a wastewater treatment unit or an underground injection well. If it is treated in a wastewater plant, the wastewater flow should be discharged into surface water in accordance with federal Clean Water Act regulations.

   There are many public benefits of drilling in the Marcellus Shale formation: thousands of new jobs created in Pennsylvania alone, five-figure incomes to residents who lease their land to the drillers and substantial revenue increases for the government. (18) Like any natural resource development, harnessing the reserves in the Marcellus Shale formation also has drawbacks, as drilling derricks and waste pits have popped up across the rural landscape. Concerns about groundwater contamination from the fracturing fluid have accompanied the increased drilling. Landowner complaints about contamination of water wells from neighboring Marcellus Shale operations are plentiful. (19)

   Inevitably, drilling in the Marcellus Shale formation already has produced litigation. In Pennsylvania, thirteen Lenox Township families filed a lawsuit in Susquehanna County Court alleging that hydraulic fracturing fluids contaminated their water supply and made them sick. (20) In Dimock, Pennsylvania, seventeen families filed suit claiming that drilling and gas well operations near their homes contaminated their drinking water wells with methane and other chemicals. (21) In Washington Township, a resident claims that the hydraulic fracturing of gas wells on his property caused elevated levels of arsenic, benzene and naphthalene in groundwater. (22) Although plaintiffs' counsel have yet to attempt to aggregate groundwater contamination claims within the Marcellus Shale into a class action lawsuit, such cases have been filed elsewhere in the country, (23) and it may be reasonably anticipated that class litigation arising out of hydraulic fracturing activity in the Marcellus Shale will be filed in courts in New York, Pennsylvania and West Virginia.

2. The Case Against Class Action Treatment For Marcellus Shale Groundwater Contamination Claims

   Class action practice developed to address situations where it was not practical or feasible for a single plaintiff to bring his suit individually, or where it was not feasible for all relevant plaintiffs to be joined in a single action. Class action practice benefits the judiciary by preserving court resources, such as judicial time and preventing piecemeal litigation. (24) In light of these concerns and benefits, the 1966 Amendments to the Federal Rules of Civil Procedure established the basis for Federal Rule of Civil Procedure 23, which authorizes certifications of class actions. Rule 23 has two relevant sets of requirements that must be met to achieve class certification, the threshold requirements of Rule 23(a), and the additional class certification requirements of Rule 23(b)(3), including that (1) class-wide common issues of fact and law must predominate over issues affecting only individual class members; and (2) the class action must be superior to other methods for the fair and efficient adjudication of the controversy. (25) Groundwater contamination claims face challenges surmounting either of these requirements.

   1. Challenges to Class Certification for Marcellus Shale Groundwater Contamination Cases

      A class may only be certified if the purported class members are "so numerous that joinder of all members is impracticable." (26) Although there is no one fixed test for determining whether the "numerosity" requirement has been met, courts will typically examine the sheer number of members included in the class as well as other factors such as: the geographic dispersion of class members; the ease of identifying and locating class members; and the claimants' ability to institute individual suits. (27) Class size is the most important factor in determining whether joinder is impracticable. There are no hard-and-fast rules regarding the exact number necessary; however, typically a class of 20 or fewer is insufficiently numerous, (28) and a class of 41 or more is sufficiently numerous to meet numerosity requirements. (29)

      Because hydraulic fracturing activities generally, and in the Marcellus Shale region in particular, occur in rural areas where people draw their water from privately-owned wells, the number of people exposed to purportedly contaminated water supplies may be small, and potentially insufficiently numerous. Even if the class size is pleaded so as to be extremely large, courts have held that the numerosity requirements have not been met when other factors mitigate against a finding that joinder is impracticable. A class that might otherwise satisfy the numerosity requirements may not be certified if the presumed class members are all from the same general area and/or easily identifiable. (30) Thus, if a group of plaintiffs claim that a Marcellus Shale defendant has contaminated their underground drinking water supply, defendants may argue that all class members live within a small defined geographic area and, as a result, joinder would not be impracticable.

      The claimants'...