While the recent $2.9 million verdict in Dallas County, Texas in Bob and Lisa Parr’s nuisance suit against Aruba Petroleum grabbed headlines as a “first of its kind” fracking victory for plaintiffs, its precedential value remains unclear — even assuming the verdict is upheld on appeal. Indeed, in a case with remarkably similar allegations to those made by the Parrs – only this time in Karnes County, Texas, District Judge Stella Saxon just granted the defendants summary judgment, concluding that plaintiffs Mike and Myra Cerny lacked sufficient medical and scientific evidence to prove to a jury that they were sickened by the defendants’ oil field emissions. [click to continue…]
Late last month, the Sixth Circuit reversed a trial court’s exclusion of expert evidence in a product liability action, despite the discretion generally given to trial court judges to handle evidentiary matters. The case involved allegations that a product defect caused the plaintiff’s injuries while target shooting with his revolver. The plaintiff proferred an expert in the field of mechanical engineering to explain how the alleged defects in the revolver caused his injuries. The expert’s theory, however, contradicted the plaintiff’s own testimony regarding what happened at the time of the accident. Despite the fact that other evidence presented in the case supported the expert’s theory, and the argument that the plaintiff’s recollection may have been faulty, the trial court excluded the expert’s testimony on the grounds that it was not relevant to the facts of the case due to the inconsistencies. The Sixth Circuit reversed, holding that because the expert’s opinion was based on other facts in the case, including other witness accounts and certain physical evidence, and because the expert otherwise used reliable methodology and had sufficient qualifications, there were no grounds for exclusion.
In particular, the Sixth Circuit noted that relevance is not determined by consistency but by whether there is a plausible relationship between the evidence and the ultimate facts at issue. According to the Court, it could be proper for a jury to find for the plaintiff based on the inference that the plaintiff’s own testimony was inaccurate, and the expert’s testimony is relevant to this alternative account of the incident. The opinion clarified that the plaintiff’s testimony as a witness is not a judicial admission, and there is no rule requiring that the legal arguments made by plaintiff’s counsel rely on its truth and accuracy. The Sixth Circuit noted that an expert opinion should be excluded where it “relies on facts that no jury could accept, or relied on the rejection of facts that any jury would be required to accept,” and pointed out that it was critical in this case that the expert’s theory did not contradict the physical evidence, which has to be accepted as plain fact.
The dissent concluded that excluding the expert testimony on relevance grounds was properly within the trial court’s discretion as gatekeeper. In defending the exclusion, the dissent noted not only that admitting the expert testimony would require a degree of speculation that is not demanded of the trial court judge, but also that finding an abuse of discretion where the trial court judge does not entertain this level of speculation “runs the risk of creating a one-size-fits-all standard of expert evidence that makes the relevancy requirement a nullity.” While the dissent was a bit animated, it shows that requiring a finding of relevance for expert testimony that contradicts a plaintiff’s story – as the majority opinion does – really struck a nerve.
A clear takeaway from the decision is that experts may not be strictly bound by the testimony of the parties who proffer them, and attorneys should not be afraid to work past inconsistencies where there is a plausible explanation to build a well-reasoned theory of their case. Of course, it would be best to avoid any inconsistencies in the first place, but in the absence of that luxury, and so long as there is other evidence to support the theory, an expert may still be free to offer an opinion that deviates even from her proponent’s recitation of the facts.
Last month, I posted on the New York Court of Appeals highly charged decision addressing preemption of local fracking bans within the state of New York. There, the Court rejected the oil and gas companies’ preemption argument, upholding the local fracking ordinances under the towns’ home rule authority. This month, a Colorado District Court found just the opposite. In Colorado Oil and Gas Association v. City of Longmont, the Court found that the City’s fracking ban was invalid as preempted by the State’s Oil and Gas Conservation Act. This decision emphasizes that the issue of preemption of local fracking bans will be determined on a state by state basis, depending on the individual state’s statutory scheme and judicial precedent.
Back in 2011, the Colorado Commission adopted rules regarding operator disclosure and reporting of chemicals used in fracking. In November 2012, the voters of the City of Longmont passed an amendment, Article XVI, to the city charter, which banned fracking and the storage and disposal of fracking waste within the City’s borders. The City claimed that Article XVI was a valid exercise of its home rule police and land use authority.
In analyzing the issue of preemption, the Court explained that there are three ways a state statute can preempt local government regulations: 1) express preemption, 2) implied preemption; and 3) operational conflict preemption. Although Plaintiffs first attempted to argue implied preemption, the Court found that it would not “go so far as to find  implied preemption[,]” instead, opting for the more “traditional approach of conducting an operational conflict analysis.”
Under operational conflict preemption, the Court considers four factors: 1) whether there is a need for statewide uniformity of regulation; 2) whether the municipal regulation has an extraterritorial impact; 3) whether the subject matter is one traditionally governed by state or local government; and 4) whether the Colorado Constitution specifically commits the particular matter to state or local regulation.
Applying the first factor, the court found that the need for statewide uniformity weighed in favor of preemption. “Patchwork regulation can result in uneven production and waste.” As to the second factor, the Court found that the City’s ban had an extraterritorial impact. The Court provided an example of a company that drilled a well from a well pad outside of the City, but that went under acreage that was considered part of the City of Longmont as well. Because of the City’s ban, the company could only frack the portions of the well that did not underlie the City of Longmont, which resulted in less oil and gas produced. Applying the third factor, the Court found that oil and gas activity has traditionally been governed by the State. The Court did not address the fourth factor because the Colorado Constitution does not address whether oil and gas activity should be regulated by state or local government.
As a result, the threshold issue in the case turned on whether the City’s ban stemmed from a purely local concern since under Colorado law, regardless of a conflict, a city’s ordinance supersedes a state statute if derived from a purely local concern. Where there is mixed local and state concern, however, a state statute supersedes the local ordinance where a conflict exists. The District Court found that this matter was one of mixed local and state interest. In support of the City’s interest, the City submitted affidavits from its citizens who expressed concerns with fracking, including concerns of water contamination, chemical spills, and health effects. Although the Court “appreciate[d] the Longmont’s citizens’ sincerely-held beliefs about risks to their health and safety,” the Court found this insufficient to “completely devalue the State’s interest, thereby making the matter one of purely local concern.”
Moving on to whether a conflict existed, the Court found that the operational conflict was “obvious.” The Commission permitted fracking, while the City prohibited it. Furthermore, the Commission permitted storage and disposal of fracking waste, while the City prohibited it. Because an “irreconcilable conflict” existed, the Court found that the City’s regulation must yield to the State’s interest. Accordingly, the Court granted summary judgment in favor of Plaintiffs, finding that the City’s ban was invalid as preempted by the Colorado Oil and Gas Conservation Act. The Court, however, stayed the order during the time permitted for filing a notice of appeal.
We will continue to monitor this case to see if Colorado’s highest court will face this hotly debated issue. Meanwhile, we should expect to see many more cases addressing preemption while more cities and towns across the country attempt to regulate fracking within their borders.