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Briggs v. Southwestern Energy Production Co.

ELR Citation: 48 ELR 20056
Nos. 2018 PA Super 79, (Pa. Super. Ct., 04/02/2018)

A Pennsylvania appellate court held that a family may go forward with its lawsuit against a natural gas company for operating wells on adjacent property to extract natural gas from beneath the family's property via hydraulic fracturing. The family asserted claims for trespass and conversion and sought punitive damages. The company argued the claims were barred by the "rule of capture," a fundamental principle of oil and gas law that allows companies to drain natural resources from under the lands of another so long as there has been no trespass. But the family argued that this principle should not apply to hydraulic fracturing. After reviewing the relevant case law and the principles underlying oil and gas extraction, the court agreed that hydraulic fracturing is distinguishable from conventional methods. Traditionally, the rule of capture assumes that oil and gas originate in subsurface reservoirs or pools, and can migrate freely within the reservoir and across property lines, according to changes in pressure. But unlike oil and gas originating in a common reservoir, natural gas trapped in a shale formation is non-migratory in nature and does not merely "escape" to adjoining land absent the application of an external force. The court therefore held that the rule of capture does not preclude liability for trespass due to hydraulic fracturing. Hydraulic fracturing may constitute an actionable trespass where subsurface fractures, fracturing fluid and proppant cross boundary lines and extend into the subsurface estate of an adjoining property for which the operator does not have a mineral lease, resulting in the extraction of natural gas from beneath the adjoining landowner's property. Here, the family's allegations are sufficient to raise an issue as to whether there has been a trespass. The court therefore reversed and remanded the lower court's grant of summary judgment in favor of the company.