Judge throws out $4M tainted-water award to Dimock shale-gas families

A federal judge on Friday threw out a jury’s award of $4.24 million for two Dimock, Pa., families who claimed that their water was contaminated by a Marcellus Shale gas driller and ordered a new trial.

U.S. Magistrate Judge Martin C. Carlson set aside the verdict by an eight-member jury that sat in Scranton, saying the evidence “was spare, sometimes contradictory, frequently rebutted by other scientific expert testimony, and relied in some measure upon tenuous inferences.”

The jury found that Cabot Oil & Gas Corp.'s drilling was negligent and created a nuisance for the families of Scott Ely and Monica Marta-Ely and Ray and Victoria Hubert. It awarded the Elys $2.75 million and the Huberts $1.49 million.

Cabot maintained that its drilling was not responsible for the elevated level of methane in the families' water wells, and asked Carlson to reverse the judgment and rule in its favor. Carlson instead ordered a new trial if Cabot and the families are unable to negotiate a settlement.

The company welcomed Carlson’s decision.

“Cabot felt confident that once a thorough review of the overwhelming scientific evidence and a full legal analysis of the conduct of the plaintiffs' counsel was conducted, the flaws in the verdict would be understood,” George Stark, a Cabot spokesman, said in a statement Friday.

The attorney for the families, Leslie Lewis of New York City, called the decision “another dark chapter for the victims of oil and gas contamination.”

Lewis said the judge appeared to have ignored the plaintiffs' arguments.

"It is not clear to me why the court required an entire year to essentially rubber-stamp defendants' position that they were somehow robbed of a fair trial, " she said.

The Elys and Huberts were among a group of more than 40 Dimock residents who sued Cabot in 2009, claiming that the Houston gas producer's rush to drill the Marcellus Shale had polluted their water wells.

All but the Elys and Huberts settled in 2012 after tests showed the wells contained elevated levels of methane but none of the chemicals associated with gas drilling.

In a 58-page memorandum, Carlson said he did not lightly take the step to void the unanimous judgment of a jury that sat through nearly three weeks of trial.

He cited the “substantial and varied weaknesses” in the plaintiffs' case, along with “myriad examples of inappropriate conduct that repeatedly occurred in the jury’s presence and may have colored the outcome of this case.”

The judge also said the amount of the jury’s award was unjustified.

“The jury’s award of more than $4 million in damages for private nuisance bore no discernible relationship to the evidence, which was at best limited; and even were the court to find that the jury’s verdict of liability should stand, the court can perceive no way in which the jury’s damages award could withstand even passing scrutiny regardless of the applicable standard of review,” he said.

During the trial, Cabot complained about Lewis' conduct, and Carlson cited the attorney's  "repeated testimony and argument" that he said was prejudicial to Cabot. He said her closing argument "risked stoking juror prejudice and confusion and, in our view, materially contributed to the jury’s confusion."

Dimock was the focus of the Oscar-nominated documentary Gasland, lengthy investigations by federal and state environmental agencies, and protests by anti-drilling activists after residents complained of water contamination when Cabot ramped up drilling in 2008.

During the trial, the plaintiffs did not attempt to establish that chemicals from hydraulic fracturing got into their water, or that the drilling caused illness, but they maintained that the methane contamination disrupted their lives and deprived them of the enjoyment of their property.

Lewis portrayed Cabot's expert witnesses as biased and the families' claims as a David vs. Goliath story.

The families claimed that Cabot's drilling and poor well construction caused stray gas to migrate underground into their wells. Methane itself is not poisonous, but at elevated levels it is explosive.

Cabot suggested there was a long history in Dimock of methane naturally appearing in wells. It also maintained that the two gas wells nearest the Ely and Hubert homes were not drilled until several months after the residents first complained about stray gas.

There was testimony that Cabot had installed methane-venting equipment and treatment systems on some homes, which may have suggested to the jury that the company took some responsibility for the stray gas. Cabot agreed to install the systems as part of a settlement with Pennsylvania environmental regulators.

The two families declined the treatment systems, saying they did not think they would work. They testified that they had their own water delivered, and that their children shared baths for six years to conserve water.

At trial, the judge dismissed a property-damage claim against Cabot because the plaintiffs introduced no evidence that their property values had been affected. Ely testified that he had spent $700,000 to build his 7,000-square-foot home — after the water went bad.

Carlson cited “serious and troubling irregularities in the testimony.” He said “the uncontradicted evidence” showed the impact on the plaintiffs’ water began before drilling started, so it was hard to blame the drilling, even if negligent, as “the sole or exclusive cause” of the nuisance.

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