Andrews v. Antero Res. Corp.

• Decision Date: 10 June 2019
• Docket Number: No. 17-0126,17-0126
• Citation: 242 W.Va. 39,828 S.E.2d 858
• Parties: Robert L. ANDREWS, et al., Plaintiffs Below, Petitioners v. ANTERO RESOURCES CORPORATION and Hall Drilling, LLC, Defendants Below, Respondents
• Court: West Virginia Supreme Court

242 W.Va. 39

828 S.E.2d 858

Robert L. ANDREWS, et al., Plaintiffs Below, Petitioners

v.ANTERO RESOURCES CORPORATION and Hall Drilling, LLC, Defendants Below, Respondents

No. 17-0126

Supreme Court of Appeals of West Virginia.

Submitted: January 15, 2019

Filed: June 10, 2019

Anthony J. Majestro, Powell & Majestro, PLLC, James C. Peterson, Aaron L. Harrah, Hill, Peterson, Carper, Bee & Deitzler, PLLC, Charleston, West Virginia Attorneys for the Petitioners

W. Henry Lawrence, Richard M. Yurko, Lauren K. Turner, Amber M. Moore, Jason W. Turner, Steptoe & Johnson PLLC, Bridgeport, West Virginia, Ancil G. Ramey, Steptoe & Johnson PLLC, Huntington, West Virginia, Donald C. Sinclair II, Steptoe & Johnson PLLC, Wheeling, West Virginia Attorneys for Respondent, Antero Resources Corporation

Christopher L. Hamb, Craig S. Beeson, Robinson & McElwee, PLLC, Charleston, West Virginia, Stephen F. Gandee, Clarksburg, West Virginia Attorneys for Respondent, Hall Drilling, LLC

William M. Herlihy, Spilman Thomas & Battle, PLLC, Charleston, West Virginia, Matthew P. Heiskell, Spilman Thomas & Battle, PLLC, Morgantown, West Virginia Attorneys for Amici Curiae, West Virginia Oil & Natural Gas Ass’n, and The Independent Oil & Gas Ass’n of West Virginia, Inc.

Louis S. Southworth, Albert F. Sebok, Candice M. Harlow, Jackson Kelly PLLC, Charleston, West Virginia Attorneys for Amici Curiae, West Virginia Chamber of Commerce, et al.

Jenkins, Justice:

This appeal from the Mass Litigation Panel ("MLP") pertains to ongoing Marcellus shale litigation and arises from claims asserted by surface owners of several tracts of land. These surface owners contend that their use and enjoyment of their land is being improperly and substantially burdened by horizontal wells being used to develop the Marcellus shale underlying their properties,¹ even though the wells are not physically located on any of their properties. The MLP resolved the claims based upon property rights arising from relevant severance deeds, and granted summary judgment in favor of the defendants below, who are the leaseholder of the gas and oil estates and the company who is conducting the drilling. In granting summary judgment, the MLP concluded that the effects on the surface owners resulting from the horizontal drilling were within the implied rights to use the surface granted by virtue of the severance deeds, and did not impose a substantial burden on the surface owners. Thus, to overcome summary judgment on this issue, the surface owners were required to establish the existence of a genuine issue of material fact as to whether the effects on their surface estates were reasonably necessary to develop the mineral estate, or whether such effects substantially burdened the owners of the relevant surface estates. Having considered the briefs submitted by the parties and by Amici Curiae,² the appellate record, the oral arguments presented, and the relevant law, we find no genuine issues of material fact were established in this particular case, and we, therefore, affirm the order of the MLP.

I.FACTUAL AND PROCEDURAL HISTORY

Antero Resources Corporation and Antero Resources Bluestone, LLC (collectively "Antero"), Respondents herein, are engaged in the development of the Marcellus shale in West Virginia and own numerous horizontal Marcellus shale wells located in Doddridge, Harrison, and Ritchie Counties.³ Antero contracted with Hall Drilling, LLC ("Hall"), also a Respondent, for the construction of well pads and roads, well drilling, and the operation of wells and gathering lines. Relevant to the instant litigation, Antero has leasehold rights to develop oil and gas underlying various properties in Harrison County, including surface properties that are resided on and/or owned by the Petitioners herein⁴ (collectively "Property Owners").

Antero’s leasehold rights to develop the subject oil and gas located in Harrison County derive from severance deeds, executed in the early 1900s, that retained mineral rights underlying the properties. The properties belonging to Robert and Deborah Andrews,⁵ Rodney Ashcraft, and Greg McWilliams are each subject to a severance deed executed in 1905 that reserves mineral rights including,

the right to drill, bore and operate for [oil and gas] at any time, also the right to use water from said land for the purpose of said drilling, boring and operating, and the right at any time to remove all necessary machinery used for the last named purposes, upon or off said land[.]

These properties also are the subject of a mineral lease that was executed in 1984, referred to by the parties as "the Moran Lease." The express rights granted to Antero in the Moran Lease include:

[E]xclusive possession and use for the purposes of exploring and operating for, producing, and marketing oil, gas, natural gasoline, casing-head gas, condensate, related hydrocarbons, and all products produced therewith or therefrom by methods now known or hereafter discovered, of injecting, storing, and withdrawing any kind of gas regardless of the source, of protecting stored gas, of injecting gas, air, water, and other fluids into sands and formations for the purpose of recovering and producing said minerals or for the purpose of disposing of waste fluids ... [along with] all other rights and privileges necessary, incident to, and convenient for the economical operation of said land alone and conjointly with other lands for the production and transportation of said minerals[.]

The severance deed pertaining to the remaining property subject to this appeal, the property owned by Robert Siders, was executed in 1903. It reserved rights to "all the oil and gas underlying the land herein conveyed together with the privilege of operating for and Marketing same." A 2001 mineral lease relevant to the Siders’ property, referred to by the parties as "the Bland Lease," granted rights to Antero that included

exploring and operating for, producing and marketing oil and gas, natural gasoline, casing head gas, condensate, related hydrocarbons, and all other related products, including the building of roads, laying pipelines and installing equipment thereon to take care of such products ... [along with] the privilege of using sufficient water and gas from said premises to run all machinery necessary for drilling and operating thereon, and all rights of way necessary to develop the premises or remove equipment, and related items[.]

Relevant to this appeal, Antero operates six well pads to facilitate its horizontal drilling in the Cherry Camp area of Harrison County.⁶ Horizontal drilling allows for the development of multiple wells from each surface well pad.⁷ Reportedly, five of the six well pads at issue are located within a range of between .42 mile and 1 mile from Property Owners’ properties. No well pads are located on any of Property Owners’ land. In addition to the construction of the well pads, and the drilling and operation of the horizontal wells, the development of the Marcellus shale has also required the construction and/or operation of well roads, pipelines, and a compressor station.⁸ The hydraulic fracturing of the horizontal wells also necessitates water and sand, which are delivered by trucks.⁹

According to Property Owners, the activities of Antero and Hall in relation to their development of the Marcellus shale have caused Property Owners to lose the use and enjoyment of their properties due to the annoyance, inconvenience, and discomfort caused by excessive heavy equipment and truck traffic, diesel fumes and other emissions from the trucks, gas fumes and odors, vibrations, noise, lights, and dust.

In 2013, Property Owners filed a complaint in the Circuit Court of Harrison County¹⁰ alleging claims for "private temporary continuing abatable nuisance and negligence"¹¹ against Antero and Hall arising from their "natural gas exploration, extraction, transportation and associated activities in close proximity to [Property Owners’] properties."¹² By order entered on November 25, 2014, this Court transferred the claims to the MLP where they were designated as the "Harrison County Cherry Camp Trial Group."¹³

Following discovery, Antero and Hall each filed motions for summary judgment. Thereafter, Property Owners filed their response in opposition to the motions for summary judgment. In their response, Property Owners voluntarily withdrew their negligence claim, and, during various hearings before the MLP, the Property Owners’ counsel repeatedly stated that no property damage claims were being asserted;¹⁴ this left only Property Owners’ claim of nuisance to be resolved by summary judgment. However, the MLP, in its summary judgment order entered on October 11, 2016, declined to apply principles of nuisance law, and instead ruled on the summary judgment motions based upon Antero’s contractual and property rights. The MLP explained that,

[b]ecause the Court resolves summary judgment based upon Antero’s contractual and property rights, it does not address the issues to which common law private nuisance principles would be applied. The Court, therefore, reaches no conclusion regarding whether Antero’s actions or its employees’ or contractors’ actions would otherwise meet the legal definition of a nuisance.

(Quotations omitted).¹⁵ The MLP also found that "Antero has leasehold rights to develop the oil and gas underlying the properties that are the subject of [Property Owners’] complaint. Those development rights were retained by the oil and gas mineral owners in the severance deeds separating the surface estates from the mineral estates." Furthermore, the MLP concluded that "the noise, traffic, dust, lights and odors of which [Property Owners] complain are reasonable and necessarily incident to Antero’s development of the underlying minerals." Therefore, the MLP granted summary judgment to Antero and Hall. Property Owners then filed a motion, pursuant to Rule 59(e) of the West Virginia Rules of Civil Procedure,¹⁶ to alter or...