Petro Harvester Oil & Gas Co. v. Baucum

• Decision Date: 05 August 2021
• Docket Number: NO. 2019-IA-01477-SCT,NO. 2019-IA-01442-SCT,2019-IA-01442-SCT
• Parties: PETRO HARVESTER OIL & GAS CO., LLC, Petro Harvester Operating Company, LLC, Comstock Oil & Gas, LP, Jerry Huddleston, Gary McAdams, Champion Oilfield Service, LLC, Boots Smith Oilfield Services, LLC, Rockall Energy, LLC, and Deepwell Energy Services, LLC v. Tay BAUCUM and Deidra Baucum Tay Baucum and Deidra Baucum v. Petro Harvester Oil & Gas Co., LLC, Petro Harvester Operating Company, LLC, Champion Oilfield Service, LLC, Boots Smith Oilfield Services, LLC, Comstock Oil & Gas, LP, Jerry Huddleston, Gary McAdams, Rockall Energy, LLC, and Deepwell Energy Services, LLC
• Court: Mississippi Supreme Court

323 So.3d 1041

PETRO HARVESTER OIL & GAS CO., LLC, Petro Harvester Operating Company, LLC, Comstock Oil & Gas, LP, Jerry Huddleston, Gary McAdams, Champion Oilfield Service, LLC, Boots Smith Oilfield Services, LLC, Rockall Energy, LLC, and Deepwell Energy Services, LLC

v.Tay BAUCUM and Deidra Baucum

Tay Baucum and Deidra Baucum

v.Petro Harvester Oil & Gas Co., LLC, Petro Harvester Operating Company, LLC, Champion Oilfield Service, LLC, Boots Smith Oilfield Services, LLC, Comstock Oil & Gas, LP, Jerry Huddleston, Gary McAdams, Rockall Energy, LLC, and Deepwell Energy Services, LLC

NO. 2019-IA-01442-SCT

NO. 2019-IA-01477-SCT

Supreme Court of Mississippi.

August 5, 2021

ATTORNEYS FOR APPELLANTS: R. DAVID KAUFMAN, Jackson, BRETT WOODS ROBINSON, RYAN JEFFREY MITCHELL, Laurel, WILLIAM F. BLAIR, Brandon, NORMAN ELVIN BAILEY, JR., JACOB ARTHUR BRADLEY, Jackson (NO. 2019-IA-01442-SCT)

ATTORNEYS FOR APPELLEES: MICHAEL D. SIMMONS, Jackson, PAUL MANION ANDERSON, Hattiesburg, WALKER (BILL) JONES, III, DAVID WAYNE BARIA, Bay St Louis, JUSTIN RONALD GLENN, New Orleans, SAMUEL STEVEN McHARD, JESSE MITCHELL, III, Ridgeland, DOUGLAS EGAN ADAMS, II, Ridgeland (NO. 2019-IA-01442-SCT)

ATTORNEYS FOR APPELLANTS: WALKER (BILL) JONES, III, DAVID WAYNE BARIA, Bay St Louis, MICHAEL D. SIMMONS, Jackson, SAMUEL STEVEN McHARD, JESSE MITCHELL, III, Ridgeland, PAUL MANION ANDERSON, Hattiesburg, DOUGLAS EGAN ADAMS, II, Ridgeland, JUSTIN RONALD GLENN, New Orleans (NO. 2019-IA-01477-SCT)

ATTORNEYS FOR APPELLEES: WILLIAM F. BLAIR, Brandon, R. DAVID KAUFMAN, Jackson, BRETT WOODS ROBINSON, RYAN JEFFREY MITCHELL, Laurel, NORMAN ELVIN BAILEY, JACOB ARTHUR BRADLEY, Jackson (NO. 2019-IA-01477-SCT)

BEFORE KING, P.J., COLEMAN AND BEAM, JJ.

KING, PRESIDING JUSTICE, FOR THE COURT:

¶1. The crux of this interlocutory appeal is whether Plaintiffs, complaining of personal injury and property damage as a result of the alleged improper use of an oil-disposal well, must exhaust their administrative remedies before the Mississippi State Oil and Gas Board (MSOGB) prior to proceeding on their common-law claims in the circuit court. Because the MSOGB can provide no adequate remedy for the Baucums’ personal-injury and property-damage claims, we find that the Baucums are not required to exhaust administrative remedies before proceeding in the circuit court.

FACTS AND PROCEDURAL HISTORY

¶2. Tay Baucum and Deidra Baucum (the Baucums) each own a parcel of real property in Jones County.¹ The Baucums’ properties neighbor real property owned and controlled by Petro Harvester Oil & Gas Co., namely the Laurel Oil Field. On the Laurel Oil Field is a Class II disposal well. The disposal well was created "for the downhole injection and disposal of various drilling and produced fluids brought to the surface in association with the drilling, completion, recompletion and/or reworking of wells" within the Laurel Oil Field. Petro Harvester uses the disposal well for the noncommercial disposal of waste.²

¶3. On April 4, 2014, the Baucums filed a complaint against Petro Harvester, Comstock Oil & Gas, Jerry Huddleston, Gary McAdams, Champion Oilfield Service, LLC, Boots Smith Oil Field Services, LLC, Rockall Energy, LLC, and Deepwell Energy Services, LLC, (collectively, "Petro Harvester") in the Circuit Court of Jones County for damages to real property. The Baucums claimed that Petro Harvester's activities had resulted in trespass, public and private nuisance, and negligence. The complaint alleged that Petro Harvester had "[f]or several decades ... both in concert and separately ... engaged in systematic and illegal dumping and disposal of oil field petroleum waste and associated petroleum drilling waste both on the plaintiffs[’] property, on the adjoining property owned or controlled by the defendants, and in the subterranean ground and aquifer." As a result, the Baucums stated that their properties had become unusable for anything other than waste disposal.

¶4. Prior to the filing of the Baucums’ complaint, on March 3, 2014, one of the Baucums’ relations requested that the MSOGB, the Environmental Protection Agency (EPA), and the Mississippi Department of Environmental Quality (DEQ) examine the areas around the properties for pollution and/or naturally occurring radioactive material (NORM). Jerry Huddleston, the operations manager for Petro Harvester, filed an affidavit that stated that those "representatives advised me that they found no NORM violations. To date, the Board, EPA, and DEQ have not issued any environmental citations."

¶5. The Baucums filed a first amended complaint on June 9, 2014, that added an additional claim for "[i]njunctive relief requiring the defendants to cease their trespass on plaintiffs’ properties, including immediate removal of the toxic substances deposited by defendant."

¶6. On June 17, 2014, Petro Harvester filed a motion to dismiss/stay and argued that the MSOGB maintained jurisdiction over Petro Harvester's disposal of produced fluids and any alleged pollution caused by the same.³ Because the Baucums alleged that Petro Harvester had polluted their properties during the disposal process, Petro Harvester asserted that the Baucums were required to exhaust their administrative remedies before the MSOGB prior to pursing civil action and requested that the circuit court dismiss or stay the action until the Baucums exhausted their administrative remedies.

¶7. In response, the Baucums argued that they were not required to file a complaint with the MSOGB for common-law causes of action because the MSOGB had no authority on common-law claims and, therefore, no adequate remedy existed.

¶8. On August 18, 2014, the circuit court held a hearing on the motion to dismiss/stay. At the hearing, the parties agreed that the case should proceed on a parallel track in both the circuit court and before the MSOGB. The following discussion occurred:

The Court: The point I was trying to get to where if this lawsuit would go to its end like the Chevron⁴ case did, then it's over. But in the meantime, if you go through the administrative, exhaust administrative path, then, you know, when you got to your lawsuit, which they can't keep you from getting to this common law tort case, what's wrong with exhausting your administrative so we get that out of the way?

I understand that the Oil and Gas Board doesn't have any jurisdiction over common law issues and tort, but they do have a responsibility to make sure that all of these activities are done in accordance with the rules and regulations and statutes and case law and everything that's been decided before .... I always understood that once the Oil and Gas Board made the decision ... you went to the Oil and Gas Board and they gave you a hearing and made a decision. And then if the decision was contrary to the claimant's complaint, then they go to court and file a common law action. They don't make any decision about the facts of the case as far as the common law or the statutory involvement in your tort case, but that was just the way of exhausting that remedy that you have with the Oil and Gas Board.

Plaintiffs’ Counsel: Your Honor, may I suggest a parallel track then because I think what we're talking about is us filing a negligence per se claim and the permit related claims or complaints before the Oil and Gas Board? We all, at least Your Honor seems to agree with the plaintiffs, that the Oil and Gas Board can't touch nor provide any remedy for the common law claims. We would like to engage in a parallel track, commit to Your Honor that we'll go to the Oil and Gas Board. We've already been there twice. They've been done here twice. Go to the Oil and Gas Board —

The Court: Nobody has anything. That's why I asked the question about the inspectors. Nobody has showed me anything about where they have or have not been or what their findings were. I mean, they've got to make a report. I've sat in on the Oil and Gas Board many many times for many reasons, some personal and some otherwise. I know they make a decision. I didn't know, that's new to me, that you could actually appeal. What would you appeal it for?

Counsel for Petro Harvester and Comstock: Abuse of discretion, Your Honor.

The Court: Okay. That has nothing to do with the tort then.

Counsel for Petro Harvester and Comstock: No, sir. It won't affect the claims. And as the cases say, we stay these cases. And the Oil and Gas Board proceedings quickly. It's not a drawn out years and years deal. It happens fast.

The Court: He says he's willing to do that with parallel tracking. Let's do that.

Plaintiffs’ Counsel: Yes, sir, Your Honor. I'll prepare the order.

The Court: Does that suit you?

Counsel for Petro Harvester and Comstock: Your Honor, I'd like to go to the Board first and finish that and get that done.

The Court: All right. Well, whatever y'all decide to do let me know.

Plaintiffs’ Counsel: We need discovery, Your Honor, even to go to the Board we need discovery.

The Court: All right. All right.

Plaintiffs’ Counsel: I'll submit an order.

No order was entered following the bench ruling.⁵

¶9. Almost two years later, on August 8, 2016, Deidra filed a second amended complaint that added personal-injury claims and alleged that Petro Harvester's actions had resulted in the development of cancer

in Deidra.⁶

¶10. On October 21, 2016, Deidra filed a petition with the MSOGB and asked the MSOGB to ensure that Petro Harvester complied with any rules and regulations, to force Petro Harvester to clean up the pollution at the well site and on her property, and to enjoin Petro Harvester from further activities at the well site.⁷ Deidra stated that her petition contained only negligence per se claims.

¶11. On June 30, 2017, the Baucums moved for a status conference in the circuit court. In response, Petro Harvester requested that the status conference in the circuit court be held in abeyance pending the resolution of the MSOGB proceeding.

¶12. On August 16, 2017, Deidra voluntarily withdrew her petition from the...