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January 2021

Briggs v. Southwestern Energy: Trespass is Still on the Table

The Briggs case returned to the Pennsylvania Superior Court on remand from the Pennsylvania Supreme Court’s decision in January 2020. The Pennsylvania Supreme Court previously issued a ruling in Briggs v. Southwestern Energy Production Company that many in the industry had long awaited, in which the balance between the traditional “rule of capture” – a long-standing rule of property law whereby extractors are not held liable when oil and gas from one land flows to another and is drained or “captured” – and subsurface trespass claims was at stake. The Briggs case saw the Superior Court create what was effectively a per se standard that the rule of capture did not apply in claims regarding hydraulic fracturing because such methods of oil and gas extraction induced drainage by artificial means.

However, the Supreme Court overturned this ruling, believing this to be an overreach insofar as there must still be physical intrusion to incur trespass liability. Because the pleadings in the trial court did not clearly allege there had been a physical intrusion, the Supreme Court remanded the case to the Superior Court for additional proceedings.

Following remand, the Superior Court granted each party permission to file a supplemental brief in support of their respective positions. On December 8, 2020, following careful review, the Superior Court affirmed the trial court’s Order granting summary judgment in favor of Southwestern.

The Superior Court addressed the Supreme Court’s concerns. First, the Superior Court “declined to hold that the use of hydraulic fracturing, simply due to its “artificial” nature, precludes application of the rule of capture…” Rather, the Superior Court relied on the “artificial” nature of hydraulic fracturing process to illustrate that it can create a trespass in a way that more conventional methods cannot, “i.e. through horizontal drilling, or the injection of fluids and proppants into another’s subsurface estate.” The Superior Court also “acknowledged that establishing a subsurface trespass would require the introduction of evidence.” Importantly, the Superior Court held:

Thus, we held only that hydraulic fracturing may constitute an actionable trespass where the subsurface fractures, and the fracturing fluid and proppants used in the process, cross over the boundary line, and extend into a property for which the energy company does not hold a valid mineral lease. In other words, the propulsion of fracturing fluid and proppants into an adjoining property can constitute a physical intrusion.

In addressing whether the Briggs may proceed on their physical-invasion trespass claim, the Superior Court found their Complaint did not “specifically allege that Southwestern engaged in horizontal drilling that extended onto their property, or that Southwestern propelled fracturing fluids and proppants across the property line.” Accordingly, the Superior court reinstated the trial court’s Order granting summary judgment in favor of Southwestern.

This case continues to be of extreme importance to the oil and gas industry as a whole, and specifically Pennsylvania exploration and production companies. The Pennsylvania Supreme Court upheld the rule of capture but has offered a more measured approach. In the December 8, 2020 Opinion, the Superior Court provides in footnote four, that the Supreme Court’s holding leaves open for future plaintiffs the possibility of litigating trespass claims based on hydraulic fracturing, so long as they specifically plead that hydraulic fracturing resulted in a physical invasion of their property. It is not enough for a plaintiff in a similar situation to Briggs to surmise trespass has occurred due to hydraulic fracturing. Proving trespass by plaintiffs as the result of hydraulic fracturing will be a costly endeavor, but will likely not deter plaintiffs from making future trespass claims.

Energy

Brian M. John
Lauren M. Oelrich



Energy