In mid-September, the Pennsylvania Supreme Court will hear oral arguments in a case that is likely to have significant impact on oil and gas production companies. The case centers on whether hydraulic fracturing (fracking) is covered by a long-standing rule protecting drillers from certain underground trespass lawsuits.
The Court’s decision will determine how the “rule of capture,” a 150-year-old legal doctrine that shields drillers from liability, will apply to fracking. The Court decided to take the case after a lower court said the rule does not apply to fracking operations, setting Pennsylvania apart from Texas where the rule of capture has been applied to modern fracking operations.
The case, Adam Briggs et al. v. Southwestern Energy Production Co., is being closely watched by oil and gas lawyers and industry experts. The decision could add to the state-by-state patchwork of legal decisions and regulations impacting fracking. Briggs is the most recent example of how states are trying to deal with established laws in the rapidly evolving drilling industry.
"To me, that is the most unique issue for hydraulic fracturing: how states deal with the rule of capture in subsurface trespass," said Don. "The Briggs case could be an important decision for underground trespass and fracking if the court makes an unambiguous pronouncement either for or against liability, especially in light of Pennsylvania’s significance to the oil and gas business." He added, "There's a potential for a patchwork and disagreement between states over the application of that [rule of capture] doctrine.”