Conference To Feature Fractured Debate On Gas Drilling Litigation

Even though the litigation arising out of unconventional gas drilling operations—also known as “hydraulic fracturing”, or “fracking”—is still in its infancy, attorneys on both sides of the fence are waiting to see whether it will become a larger and more prominent toxic tort, said Marc Bern of Napoli, Bern, Ripka, Shkolnik LLP, who is co-chairing the Gas Drilling Operations Conference, sponsored by HB Litigation Conferences.

The conference, which will be held on Sept. 9, 2011 at the Hub Cira Centre in Philadelphia, is going to be “very comprehensive”, said Bern, who represents plaintiffs in fracking cases, as well as other various toxic and pharmaceutical tort cases.

“This conference will not only be comprehensive but will be most useful, on a day-to-day basis, for practitioners who are either considering getting involved in the litigation or have already become involved in the litigation.  So this should prove to be a real ‘nuts and bolts’ conference, with an emphasis on information from those practitioners who actually have experience in the area,” he said.

Contamination and Injury Cases

Bern will be joined by his co-chair Joshua Becker of Alston & Bird.  The conference will feature a full day of presentations on a variety of topics beginning with an introduction to the process of hydraulic fracturing, by which holes are drilled into large rock formations (also known as “plays”) so that water can be forced into them to cause fracturing of the rock in order to release natural gas.  This process has become more commonplace in recent years with the advent of new technologies.  However, it has also brought about concerns about groundwater contamination, air quality, and toxic spills, all of which will also be discussed at the conference.

There will also be presentations on the assessment of fracking contamination and injury cases, discovery issues, published literature, government oversight and insurance coverage implications.

“It will be interesting to see whether or not the litigation takes the path that the MTBE litigation took.  In that litigation, there were numerous cases filed throughout the country but there wasn’t an immediate explosion of litigation. For the first several years, the MTBE litigation was handled on a ‘one-off’ basis.  Finally when there was a proliferation of the litigation, it was consolidated into a MDL.  So it will be interesting to see how this litigation shapes up and whether it stays on a state-by-state, potentially local course, or if it takes more of a federal course and potentially becomes an MDL,” said Bern.

Insurance Coverage

Jared Zola of Dickstein Shapiro, who represents policy holders in insurance coverage disputes, and who will be presenting on coverage implications related to fracking, said that he is looking forward to a “lively debate” at the conference both between he and his co-panelist and from the other sessions which feature representatives from both the plaintiff and defense sides.

“What interests me about the potential implications of the insurance coverage with regard to hydraulic fracturing is not necessarily that there will be any liabilities that the energy and drilling companies will incur, but that there is certainly the threat of potential liability,” he said.

“Those companies need to be aware that the mere allegation of liability is often enough to implicate their liability insurance policies and in turn trigger the duty to defend in those policies.  Meaning that, if the EPA or a private citizen alleges property damage or bodily injuries related to activities caused by hydraulic fracturing—whether or not those liabilities hold up and whether or not there can actually be a connection between the hydraulic fracturing and the alleged damages—those energy companies are entitled to a defense from their insurance companies which can often be as expensive or more expensive than the liability may prove to be,” said Zola.

Proven Liability

Zola said that the possibility exists that no actual property damage or bodily injury will ever be connected to hydraulic fracturing.

“Right now we’re at a point where certainly a lot of environmental groups are wary of those risks and the EPA is looking into it—but it’s not a situation where there’s any sort of a liability, such as, for example, CERCLA in relation to Superfund sites,” he said

“Even though there’s no proven liability that won’t stop potential plaintiffs from alleging that there are damages,” said Zola.