Fracking Waste Lawsuit Highlights Dangerous Trend of Corporations Targeting Community Rights Defenders
Marcellus Shale rig and gas well operation on Ridge Road in Jackson Township operated by Rex Energy. WCN 24/7 / Flickr
By Simon Davis-Cohen January 18, 2018
In early January, a federal judge ordered the nonprofit law firm Community Environmental Legal Defense Fund (CELDF) to pay $52,000 to an oil and gas exploration company for defending a rural Pennsylvania township’s ban on underground injections of fracking waste.
This sanction comes at the request of Pennsylvania General Energy Company (PGE) and the Pennsylvania Independent Oil & Gas Association, but is part of a growing trend to prevent municipalities across the nation from pushing back against state and federal attempts to overrule them.
Starting in 2012, PGE proposed an injection well which, according to Grant Township’s Board of Supervisors, “would receive 30,000 barrels [1.26 million gallons] of frack wastewater per month for 10 years.” The board of supervisors for this small community near Pittsburgh warned that the injection well “threatens to subject every resident of Grant Township to a slow poisoning, and threatens thousands more who depend on Grant Township’s watershed for clean water.”
The community’s law, they added, bans the injection well “as a violation of our basic civil rights.” PGE operates multiple gas-extraction wells in the township.
Rights of Nature, Local Governance
CELDF, which has defended Grant’s efforts to prevent waste injection wells for over three years, has worked with some 200 municipalities in the U.S. to defend local laws challenging similar corporate projects. The group aims to drive state constitutional change to bolster the rights of local residents and ecosystems against what it calls regressive state preemption and corporate personhood.
Grant Township, for example, is elevating a “right of self-government,” rights “to clean air, water, and soil” and “ecosystem rights” above corporations’ “rights” to inject waste from oil and gas extraction in the township.
These types of local laws often face substantial legal pushback from private corporations and states which claim authority over issues such as fossil fuel production. Along with the sanctions against CELDF, PGE is suing Grant Township itself, population 741, for damages that would likely be in the hundreds of thousands of dollars. Among its claims: The injection well ban violates the corporation’s rights as a “person” under the First, Fourth, and Fifth Amendments; the Equal Protection Clause of the Fourteenth Amendment; and the Contract Clause and Supremacy Clause of the U.S. Constitution.
Grant Township is the fourth local government CELDF has defended in federal court.
‘Frivolous’ Legal Arguments
At the heart of the court’s decision awarding PGE sanctions against the legal nonprofit (the company originally asked for $500,000) is an argument that the sanctions are justified because CELDF’s legal arguments are contrary to “settled” law and therefore “frivolous.” This reasoning asserts that corporate personhood and Pennsylvania’s authority over municipalities on issues affecting drinking water and fossil fuel development is settled, and therefore CELDF’s defense of Grant’s claim to the contrary is “clearly unreasonable.”
Grant Township, the court wrote, “seeks to disavow constitutional rights afforded corporations so as to prevent PGE from the lawful exercise of its right to pursue gas extraction related activities within its borders.” On top of all this, Grant’s law recognized legal rights for a local ecosystem. CELDF’s attempt to represent that ecosystem in court, the judge ruled, violates the Federal Rules of Civil Procedure, a set of rules that govern how legal proceedings take place in U.S. district courts.
Local Governments Sanctioned Across U.S.
CELDF is not alone in facing sanctions for challenging so-called settled law on similar issues. Defend Local Solutions is a campaign led by Tallahassee’s Mayor Andrew Gillum which is aimed at expanding the powers of municipalities in Florida. The campaign said at least seven states have “super preemption” bills on the books that sanction local officials who dare challenge specific state preemption bills that rescind powers from municipalities.
In Florida, for example, Gillum personally faced the threat of sanctions after he refused to repeal a local law that banned fire arms in public parks (even though the ordinance wasn’t being enforced).
New bills, such as Texas’s highly controversial “show me your papers” and sanctuary city preemption bill (SB4), also include punitive language for municipalities pushing back against state and federal authority.
Texas’s bill would fine local officials and employees $25,000 per day or even remove them from office if they defy the law, according to the Mexican American Legal Defense and Education Fund. Parts of this section of the law, however, are hung up in court. However, the court ruled that local officials can be sanctioned if they outright ban police from asking for people’s immigration papers, and other sections of the bill are in effect, including a section that threatens punishment for local jail officers. The concept of economic retribution for noncompliance is spreading.
Georgia’s 2017 bill, HB37, removes funding from any private college that “prohibits or restricts officials or employees … from communicating or cooperating with federal officials or law enforcement officers with regard to reporting [immigration] status information.” And in 2016 Arizona passed a bill which withholds state funds from localities that enact policy that challenges the state’s claimed supremacy.
In CELDF’s sanction case, the court acknowledges that sanctions can have the effect of “chilling novel legal or factual arguments.”
Thomas Linzey, CELDF’s director and one of the two attorneys being personally sanctioned, said “that’s exactly the point. For years, the oil and gas corporations believed that they could stop the community rights movement by suing municipalities to overturn their local laws; but having failed to do so, they’re now coming after the lawyers who are helping those communities to stop drilling. In many ways, the industry’s filing for sanctions against us is just proof of how strong the community rights movement is becoming.”
In court records, CELDF pointed to Brown v. Board of Education (which overturned “separate but equal” schools for Black and White students, 1954), courts striking down bans on gay marriage, and other novel legal arguments as evidence that sanctions against lawyers who challenge “settled” law could set a dangerous precedent.
“We understand that the real problem isn’t the injection well, but the system of law that keeps trying to shut us down,” the Grant Township Board of Supervisors said in a statement. “We’re not going anywhere.”
Reposted with permission from our media associate DeSmogBlog.
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Oil and Gas Industry’s 2017 Suing Spree Could Set Speech-Chilling Precedents
By Sharon Kelly January 2, 2018
In 2017, while the Trump administration absorbed media attention with its cries of “fake news,” the oil and gas industry was busy launching private legal actions across the U.S., attacking critics who presented information and opinions to the public.
Those lesser-noticed legal maneuvers, if successful in 2018, could create chilling new precedents, keeping important facts away from the public eye and making it more expensive and risky to talk about the fossil fuel industry’s real and potential impacts on human health and the air, land, and water.
The past year brought some of the most aggressive lawsuits by the oil and gas industry against environmentalists in recent decades. They included legal moves aimed at preventing researchers from discussing their findings, motions painting political movements as for-profit conspiracies, and even a $5 million dollar lawsuit brought against a cancer patient whose tap water, state investigators determined years ago, was contaminated by gas drilling — by the company that is now suing him.
That lawsuit, filed by a shale gas drilling company, claims that a Pennsylvania landowner violated a non-disclosure agreement by talking to the press about his fouled drinking water, his home’s plummeting property value, the impacts of truck traffic on his community, the poor air quality around his home since drilling and fracking began in the area, or other problems he believes the company itself caused.
These oil and gas industry cases — involving novel uses of conspiracy, defamation, and even wire fraud laws — represent new and concerted efforts by large corporations to make individuals and groups pay for presenting information and opinions to the public.
Cancer Patient Gagged
Dimock, Pennsylvania, landowner Ray Kemble, who was diagnosed with bladder cancer in March 2017, was sued in August by Cabot Oil and Gas, which drilled a series of Marcellus shale wells in Kemble’s hometown.
Back in 2010 state environmental regulators concluded that Cabot Oil and Gas’s drilling operations had contaminated the area’s groundwater and ordered the company to cough up $4.6 million. In May 2016, federal health officials concluded that the drinking water in Dimock was indeed unsafe, and in December 2016, the U.S. Environmental Protection Agency’s (EPA) long-awaited national study warned that hydraulic fracturing (fracking) has contaminated drinking water supplies across the U.S. (without directly commenting on Kemble’s situation).
Cabot signed settlements with virtually all of the families drawing water from the contaminated Pennsylvania aquifer, though the precise terms of those agreements remain secret. A separate federal lawsuit, brought by two families down the road from Kemble, the Elys and the Huberts, was settled in September for an undisclosed amount, a sign that the Ely and Hubert settlement also includes a non-disclosure clause.
Cabot’s new lawsuit argues that a 2012 settlement bars Kemble from “disparaging” the company by discussing any harm he believes the company caused him — or even talking about things the company did after the settlement was reached.
But good luck finding out what exactly a settlement agreement between Kemble and the company might have said: In December, Cabot argued in court that it didn’t need to provide the document at the heart of the case to the attorneys representing Kemble’s co-defendents, nevermind the public.
Non-disparagement and non-disclosure agreements have been in the public spotlight lately amid the #MeToo scandals, after it came to light that powerful sexual harassers and assaulters frequently used the clauses to prevent those they assaulted from talking publicly.
Critics argue that non-disclosure and non-disparagement agreements (NDAs) should also not be used in cases where the public health could be at risk, warning that NDAs could, for example, keep someone sickened after drinking bad water from warning their neighbors about the danger.
Legal experts have questioned whether courts would ever actually enforce such an order — so the case brought by Cabot against Kemble could set a significant precedent.
Cabot also sued Kemble’s attorneys and the law firms where they work for representing Kemble in his earlier lawsuit against Cabot, which Kemble withdrew a few months after his cancer diagnosis (Kemble’s attorneys have cited unspecified “new information” in explaining the decision to drop the case). Kemble’s supporters say they fear that by including Kemble’s attorneys in the lawsuit, Cabot is trying to make it harder for those harmed by powerful companies to find representation.
On December 21, 2017, Susquehanna County Judge Jason J. Legg allowed Cabot’s claims against the attorneys to go forward, while admonishing Cabot for breaking Pennsylvania’s Rules of Civil Procedure by claiming $5 million in damages, even though the rules forbade Cabot to name a specific figure higher than $50,000 in their complaint. The judge noted that the claiming damages of $5 million “may have been designed to attract media attention” and “likely” served no legitimate legal purpose.
To Kemble, the lesson is clear. “This is just a way to shut the people up of the county and of the state, and I just don’t think it’s right,” Kemble said, according to NPR’s State Impact. “We the people have the right to talk.”
Stop Citing Working Paper, Gas Supplier Demands
In a December 11, 2017 letter, natural gas supplier Eversource Energy demanded that environmental advocacy group Environmental Defense Fund (EDF) stop citing a study that found evidence that Eversource and another utility legally manipulated natural gas pipeline markets in ways that caused astronomical gas price spikes during cold snaps from mid-2013 to mid-2016.
That analysis found that Eversource and Avangrid booked pipeline capacity and then left it unused, driving down New England’s natural gas supplies while demand was high, costing New England’s power customers over $3.6 billion. This working paper, prepared by a group of researchers including an EDF economist, emphasized that researchers hadn’t found that anything the company’s did was illegal, but suggested that the laws might need reform.
Those price spikes have been heavily touted by pipeline builders, who say they prove that New England needs to build more pipelines to carry fracked natural gas to the northern states in winter. The new study calls into question whether gas shortages were caused by a lack of pipelines or a failure to fully use the ones already built.
“Limited pipeline capacity is indeed partly responsible for these extreme prices,” the researchers wrote. “But we also find strong evidence that two firms that held significant shares of the contracts to flow gas on the Algonquin Gas Transmission Pipeline — one of the two major pipelines serving New England — regularly restricted capacity to the region by scheduling deliveries without actually flowing gas.”
The cease and desist letter warns EDF that Eversource could sue the environmental group if it continues to cite claims the company describes as “unsupported by fact.”
EDF told DeSmog that the study has been presented for peer review, the method the scientific and academic communities use to ensure research is rigorous. “The Working Paper is going through the process for academic publication in a peer-review journal,” EDF spokesperson Jon Coifman told DeSmog. “Versions have been presented at several academic conferences and workshops.”
Cease and desist letters are often sought in defamation cases, which allow people and companies to sue when someone harms their reputation by deliberately spreading false factual claims — which means it’s unusual to see a cease and desist letter sent over scientific analysis.
The study was authored by Levi Marks, PhD candidate at the University of California, Santa Barbara and Charles Mason, Chair in Petroleum and Natural Gas Economics at the University of Wyoming, along with EDF researcher Kristina Mohlin, and Matthew Zaragoza-Watkins, Assistant Professor of Economics at Vanderbilt.
In November, Eversource and Avangrid were hit with a class action lawsuit over the same general allegations made in the study. The class action argues that the companies violated consumer protection and anti-trust laws, and unjustly enriched themselves by driving up power prices by 20 percent.
EDF has rebuffed the cease and desist demand. “We stand by the analysis and reject this obvious attempt to intimidate and chill legitimate public inquiry,” Coifman told UtilityDive shortly after receiving Eversource’s letter.
Suing the Grassroots
In August, Dakota Access pipeline builder Energy Transfer Partners (ETP) filed a major lawsuit alleging racketeering and conspiracy by the grassroots environmental movement Earth First!, along with environmental groups Greenpeace and Banktrack.
The lawsuit accuses the non-profits of seeking to profit through environmental activism. “Maximizing donations, not saving the environment, is Greenpeace’s true objective,” ETP’s complaint alleges, while accusing pipeline opponents of violating anti-racketeering laws (meant to protect against mafia-style organized crime) and characterizing emails and tweets sent by Dakota Access pipeline (DAPL) critics as wire fraud.
The lawsuit claims that ETP suffered nearly a billion dollars in damages and seeks to legally bar defendants from engaging in political protests. But civil rights advocates have taken issue with the coporation’s approach.
“Defendants employed time-honored, lawful means to advance their views, protected by core constitutional rights of free speech and association,” the American Civil Liberties Union (ACLU) wrote in a friend-of-the-court brief objecting to ETP’s claims of racketeering, defamation, and conspiracy. “Under ETP’s theories, ordinary political speech that runs counter to a corporation’s business interests could expose the speaker to enormous, unwarranted liability.”
In December, attorneys for Earth First Journal, a publication whose name echoes the name of the activist group Earth First!, arrived in federal court to argue that Earth First! is a social movement based on a shared set of ideas, and not a legal entity like a corporation, and therefore isn’t a thing that you can sue.
Earth First!, the journal’s attorney said, lacks the sorts of characteristics you’d find at something like a corporation, like a leadership structure, employees, or even members.
Even if the oil industry’s 2017 lawsuits don’t make it very far, the specter of defending multi-million dollar legal claims could make non-profits and social movements nervous about publicly criticizing powerful corporations.
And that, opponents say, is exactly the point.
“Defending major lawsuits like these against deep-pocketed corporations is extremely expensive, time consuming, and stressful, particularly for cash strapped non-profits,” ACLU staff attorney Brian Hauss wrote in a December 6, 2017 post about ETP’s 231-page lawsuit. “If the courts have any sense, this case won’t get to trial. But ETP doesn’t need to win in court to do major damage.”