Oklahoma Homeowners Can Sue Oil and Gas Companies Over Earthquakes, Court RulesJul 6, 2015
The Oklahoma Supreme Court ruled last week that homeowners who have sustained injuries or property damage from earthquakes they say are caused by oil and gas company drilling operations can sue for damages in state courts.
The 7-to-0 ruling opens the door for homeowners to pursue oil and gas companies for quake-related damage, the New York Times reports. It is the first time the court has specifically addressed whether plaintiffs could sue for damage believed to be caused by the massive amounts of wastewater generated by oil and gas drilling involving the process hydraulic fracturing, or fracking.
The wastewater is injected into underground disposal reservoirs near fault zones. Oklahoma has faced the brunt of fracking-related quakes in recent years, the Times reports. Before the fracking boom, Oklahoma typically had just one or two quakes of magnitude 3.0 or higher per year. But over the past decade, the number has risen steadily, to 585 last year, more than in any state except Alaska. Predictions put Oklahoma on a pace for 1,100 quakes of magnitude 3.0 or higher, according to the Times.
Industry attorneys had argued that by law, the Corporation Commission, a state regulatory agency, was the proper venue for disputes over wastewater-related quake damage. Several of the worst quakes hit the town of Prague in November 2011. One registered 5.7 and another 5.0. The tall chimney of Sandra Ladra's home crumbled, and she suffered significant knee and leg injuries when she was hit by large pieces of falling stone. Ladra filed suit against two companies that operate nearby wastewater disposal wells that she believed caused the quakes. When her lawsuit was dismissed, Ladra's lawyer appealed to the State Supreme Court, which resulted in last week's ruling. "People have been waiting on this decision," the attorney said. He is proceeding with the Ladra case and a class-action lawsuit related to the 2011 quakes, according to the Times.
The court did not take a position on whether wastewater disposal wells caused the quake that injured Ladra and damaged her home, but the justices noted the "dramatic increase in the frequency and severity of earthquakes" in the state, the Times reports. In explaining their ruling, the justices cited "the long-held rule that district courts have exclusive jurisdiction over private tort actions when regulated oil and gas operations are at issue."
Top officials in Oklahoma had long maintained that a link between quakes and disposal wells was not clear, but in April they reversed themselves and accepted the scientific consensus on the issue. They cited a determination by the state's geological survey that "the majority of recent earthquakes in central and north-central Oklahoma are very likely triggered" by wastewater disposal wells, according to the Times. Industry official say more study is required.
The state legislature has passed a law restricting municipalities from regulating oil and gas wells within their jurisdiction. The industry is also seeking passage of a law requiring a state-approved expert to first certify any lawsuits over wastewater-induced quakes, which could make it more difficult for homeowners to bring suit over earthquake damage.