What happens in other oil and gas states is often instructive for us in Montana. The oil and gas industry constantly works to develop new legislative, legal and business strategies to try to control drilling without interference from landowners. Strategies that are successful get exported to other states. States that are farther ahead in the shale revolution, where these strategies have already been used, can teach us about the ways of the industry and how it works to keep landowners in check, and how these strategies might be used here.
In Texas and Oklahoma, for example, we have seen successful legislative strategies to keep localities from having any say in the regulation of oil and gas drilling. We know that this is now a national strategy that the industry will try to implement elsewhere. In Montana and other states we have seen oil money from outside the state funneled in to try to pack the courts with pro-oil ideologues. In Pennsylvania, we have seen Energy Corporation of America successfully sued for systematically underpaying royalties to lease owners.
Corporate landowners sue environmental organizations for protesting
So it is of particular interest that, in Pennsylvania, a corporate landowner and twelve individual landowners who have leased their shale gas drilling rights to an oil and gas operator have filed suit against environmental organizations that oppose the drilling.
Rex Energy has proposed drilling six shale gas wells about a thousand yards from a local school. The three-member Middlesex zoning hearing board, all of whom have leased shale gas under their properties to drilling companies, approved new zoning rules in May that would allow these wells and open up more than 90 percent of Middlesex Township to shale gas drilling.
The lawsuit claims that appeals by drilling opponents, including the Delaware Riverkeeper Network and the Clean Air Council, both statewide environmental organizations, are “a sham” and “frivolous.” The plaintiffs seek punitive damages and costs totaling more than $500,000 for the alleged contractual interference and civil conspiracy.
Attorneys for the environmental groups have argued that the suit is a “SLAPP suit” — a strategic lawsuit against public participation — targeting individuals and groups for participating in public debate on government policies and the legal appeals of those policies.
According to Wikipedia:
“A strategic lawsuit against public participation (SLAPP) is a lawsuit that is intended to censor, intimidate, and silence critics by burdening them with the cost of a legal defense until they abandon their criticism or opposition.
“The typical SLAPP plaintiff does not normally expect to win the lawsuit. The plaintiff’s goals are accomplished if the defendant succumbs to fear, intimidation, mounting legal costs or simple exhaustion and abandons the criticism. In some cases, repeated frivolous litigation against a defendant may raise the cost of directors and officers liability insurance for that party, interfering with an organization’s ability to operate. A SLAPP may also intimidate others from participating in the debate. A SLAPP is often preceded by a legal threat.
“There is a difficulty in that plaintiffs do not present themselves to the Court admitting that their intent is to censor, intimidate or silence their critics. Hence, the difficulty in drafting SLAPP legislation, and in applying it, is to craft an approach which affords an early termination to invalid abusive suits, without denying a legitimate day in court to valid good faith claims. Thus, anti-SLAPP laws target tactics used by SLAPP plaintiffs. Common anti-SLAPP laws include measures such as penalties for plaintiffs who file lawsuits ruled frivolous and special procedures where a defendant may ask a judge to consider that a lawsuit is a SLAPP (and usually subsequently dismiss the suit).”
There is no federal law against SLAPP suits, although 29 states have enacted anti-SLAPP laws. Montana is not one of them. Montana also doesn’t have any setback laws that would protect schools like the ones in Middlesex Township from winding up in the shadow of a well pad.
Update. Suit dismissed…for now
Since I started writing this post, plaintiffs’ lawsuit was dismissed for lack of specificity and for failure to associate various allegations with specific defendants. Although defendants’ attorneys are claiming that this is “a victory for the First Amendment and for the right of all Americans to speak their minds on important issues,” Plaintiffs were given 20 days to amend their complaint. (For those of you wanting to track this, the case is Dewey Homes & Investment Properties LLC et al. v. Delaware Riverkeeper Network et al., case number 15-10393, in the Butler County Court of Common Pleas.)
It could happen here
While there haven’t yet been any SLAPP suits relating to oil and gas development in Montana, it doesn’t take much imagination to realize it can happen here. Many of the elements that exist in Pennsylvania
- Insufficient regulation of oil and gas. The primary topic that we cover on this site is the lack of regulation that exists at the state level in Montana. The lack of regulation means that environmental groups and landowners are required to fight oil and gas operators because state institutions fail to reign in their activities. Examples:
- Montana Board of Oil and Gas Conservation: The primary agency for permitting of wells in the state is structured to favor the development of oil and gas wells for profit. The provision of regulation that allows the public to protest a well permit is clearly broker, as evidenced by recent events.
- County Commissions: County Commissions have discretion over whether to allow citizens to form citizen initiated zones. Based on events in Carbon County, the default is to say no. As a result, local landowners are having to sue for their right to determine what happens on their own property.
- Legislature. The Montana Legislature failed to pass any of the bills regulating oil and gas before it in the last session. Given the current structure of the two houses, there seems little likelihood of environmentally-friendly legislation passing in the near future.
- Apparent conflicts of interest among government officials. In Pennsylvania, the three members of the local zoning board who approved the zoning changes had already leased their properties to gas operators and stood to profit from their zoning decision. In Montana, some government officials who have the authority to approve citizen initiated zoning are also owners of mineral rights that enable them to profit from oil leases. In Stillwater County, for example, at least on County Commissioner is a mineral rights owner and has active oil leases on her property. This certainly creates at least an appearance of a conflict of interest.