Oil and Gas Industry's 2017 Suing Spree Could Set Speech-Chilling Precedents

Read time: 9 mins
Dimock, Pennsylvania resident Ray Kemble

In 2017, while the Trump administration absorbed media attention with its cries of “fake news,” the oil and gas industry was busy launching private legal actions across the U.S., attacking critics who presented information and opinions to the public.

Those lesser-noticed legal maneuvers, if successful in 2018, could create chilling new precedents, keeping important facts away from the public eye and making it more expensive and risky to talk about the fossil fuel industry's real and potential impacts on human health and the air, land, and water.

The past year brought some of the most aggressive lawsuits by the oil and gas industry against environmentalists in recent decades. They included legal moves aimed at preventing researchers from discussing their findings, motions painting political movements as for-profit conspiracies, and even a $5 million dollar lawsuit brought against a cancer patient whose tap water, state investigators determined years ago, was contaminated by gas drilling — by the company that is now suing him.

That lawsuit, filed by a shale gas drilling company, claims that a Pennsylvania landowner violated a non-disclosure agreement by talking to the press about his fouled drinking water, his home's plummeting property value, the impacts of truck traffic on his community, the poor air quality around his home since drilling and fracking began in the area, or other problems he believes the company itself caused.

These oil and gas industry cases — involving novel uses of conspiracy, defamation, and even wire fraud laws — represent new and concerted efforts by large corporations to make individuals and groups pay for presenting information and opinions to the public.

Cancer Patient Gagged

Dimock, Pennsylvania, landowner Ray Kemble, who was diagnosed with bladder cancer in March 2017, was sued in August by Cabot Oil and Gas, which drilled a series of Marcellus shale wells in Kemble's hometown.

Back in 2010 state environmental regulators concluded that Cabot Oil and Gas's drilling operations had contaminated the area's groundwater and ordered the company to cough up $4.6 million. In May 2016, federal health officials concluded that the drinking water in Dimock was indeed unsafe, and in December 2016, the U.S. Environmental Protection Agency's (EPA) long-awaited national study warned that hydraulic fracturing (fracking) has contaminated drinking water supplies across the U.S. (without directly commenting on Kemble's situation).

Cabot signed settlements with virtually all of the families drawing water from the contaminated Pennsylvania aquifer, though the precise terms of those agreements remain secret. A separate federal lawsuit, brought by two families down the road from Kemble, the Elys and the Huberts, was settled in September for an undisclosed amount, a sign that the Ely and Hubert settlement also includes a non-disclosure clause.

Cabot's new lawsuit argues that a 2012 settlement bars Kemble from “disparaging” the company by discussing any harm he believes the company caused him — or even talking about things the company did after the settlement was reached.

But good luck finding out what exactly a settlement agreement between Kemble and the company might have said: In December, Cabot argued in court that it didn't need to provide the document at the heart of the case to the attorneys representing Kemble's co-defendents, nevermind the public.

Non-disparagement and non-disclosure agreements have been in the public spotlight lately amid the #MeToo scandals, after it came to light that powerful sexual harassers and assaulters frequently used the clauses to prevent those they assaulted from talking publicly.

Critics argue that non-disclosure and non-disparagement agreements (NDAs) should also not be used in cases where the public health could be at risk, warning that NDAs could, for example, keep someone sickened after drinking bad water from warning their neighbors about the danger.

Legal experts have questioned whether courts would ever actually enforce such an order — so the case brought by Cabot against Kemble could set a significant precedent.

Cabot also sued Kemble's attorneys and the law firms where they work for representing Kemble in his earlier lawsuit against Cabot, which Kemble withdrew a few months after his cancer diagnosis (Kemble's attorneys have cited unspecified “new information” in explaining the decision to drop the case). Kemble's supporters say they fear that by including Kemble's attorneys in the lawsuit, Cabot is trying to make it harder for those harmed by powerful companies to find representation.

On December 21, 2017, Susquehanna County Judge Jason J. Legg allowed Cabot's claims against the attorneys to go forward, while admonishing Cabot for breaking Pennsylvania's Rules of Civil Procedure by claiming $5 million in damages, even though the rules forbade Cabot to name a specific figure higher than $50,000 in their complaint. The judge noted that the claiming damages of $5 million “may have been designed to attract media attention” and “likely” served no legitimate legal purpose.

To Kemble, the lesson is clear. “This is just a way to shut the people up of the county and of the state, and I just don’t think it’s right,” Kemble said, according to NPR's State Impact. “We the people have the right to talk.”

Get DeSmog News and Alerts

Stop Citing Working Paper, Gas Supplier Demands

In a December 11, 2017 letter, natural gas supplier Eversource Energy demanded that environmental advocacy group Environmental Defense Fund (EDF) stop citing a study that found evidence that Eversource and another utility legally manipulated natural gas pipeline markets in ways that caused astronomical gas price spikes during cold snaps from mid-2013 to mid-2016.

That analysis found that Eversource and Avangrid booked pipeline capacity and then left it unused, driving down New England's natural gas supplies while demand was high, costing New England's power customers over $3.6 billion. This working paper, prepared by a group of researchers including an EDF economist, emphasized that researchers hadn't found that anything the company's did was illegal, but suggested that the laws might need reform.

Those price spikes have been heavily touted by pipeline builders, who say they prove that New England needs to build more pipelines to carry fracked natural gas to the northern states in winter. The new study calls into question whether gas shortages were caused by a lack of pipelines or a failure to fully use the ones already built.

Limited pipeline capacity is indeed partly responsible for these extreme prices,” the researchers wrote. “But we also find strong evidence that two firms that held significant shares of the contracts to flow gas on the Algonquin Gas Transmission Pipeline — one of the two major pipelines serving New England — regularly restricted capacity to the region by scheduling deliveries without actually flowing gas.”

The cease and desist letter warns EDF that Eversource could sue the environmental group if it continues to cite claims the company describes as “unsupported by fact.”

EDF told DeSmog that the study has been presented for peer review, the method the scientific and academic communities use to ensure research is rigorous. “The Working Paper is going through the process for academic publication in a peer-review journal,” EDF spokesperson Jon Coifman told DeSmog. “Versions have been presented at several academic conferences and workshops.”

Cease and desist letters are often sought in defamation cases, which allow people and companies to sue when someone harms their reputation by deliberately spreading false factual claims — which means it's unusual to see a cease and desist letter sent over scientific analysis.

The study was authored by Levi Marks, PhD candidate at the University of California, Santa Barbara and Charles Mason, Chair in Petroleum and Natural Gas Economics at the University of Wyoming, along with EDF researcher Kristina Mohlin, and Matthew Zaragoza-Watkins, Assistant Professor of Economics at Vanderbilt.

In November, Eversource and Avangrid were hit with a class action lawsuit over the same general allegations made in the study. The class action argues that the companies violated consumer protection and anti-trust laws, and unjustly enriched themselves by driving up power prices by 20 percent.

EDF has rebuffed the cease and desist demand. “We stand by the analysis and reject this obvious attempt to intimidate and chill legitimate public inquiry,” Coifman told UtilityDive shortly after receiving Eversource's letter.

Suing the Grassroots

In August, Dakota Access pipeline builder Energy Transfer Partners (ETP) filed a major lawsuit alleging racketeering and conspiracy by the grassroots environmental movement Earth First!, along with environmental groups Greenpeace and Banktrack.

The lawsuit accuses the non-profits of seeking to profit through environmental activism. “Maximizing donations, not saving the environment, is Greenpeace's true objective,” ETP's complaint alleges, while accusing pipeline opponents of violating anti-racketeering laws (meant to protect against mafia-style organized crime) and characterizing emails and tweets sent by Dakota Access pipeline (DAPL) critics as wire fraud.

The lawsuit claims that ETP suffered nearly a billion dollars in damages and seeks to legally bar defendants from engaging in political protests. But civil rights advocates have taken issue with the coporation's approach.

“Defendants employed time-honored, lawful means to advance their views, protected by core constitutional rights of free speech and association,” the American Civil Liberties Union (ACLU) wrote in a friend-of-the-court brief objecting to ETP's claims of racketeering, defamation, and conspiracy. “Under ETP’s theories, ordinary political speech that runs counter to a corporation’s business interests could expose the speaker to enormous, unwarranted liability.”

In December, attorneys for Earth First Journal, a publication whose name echoes the name of the activist group Earth First!, arrived in federal court to argue that Earth First! is a social movement based on a shared set of ideas, and not a legal entity like a corporation, and therefore isn't a thing that you can sue.

Earth First!, the journal's attorney said, lacks the sorts of characteristics you'd find at something like a corporation, like a leadership structure, employees, or even members.

Even if the oil industry's 2017 lawsuits don't make it very far, the specter of defending multi-million dollar legal claims could make non-profits and social movements nervous about publicly criticizing powerful corporations.

And that, opponents say, is exactly the point.

“Defending major lawsuits like these against deep-pocketed corporations is extremely expensive, time consuming, and stressful, particularly for cash strapped non-profits,” ACLU staff attorney Brian Hauss wrote in a December 6, 2017 post about ETP's 231-page lawsuit. “If the courts have any sense, this case won’t get to trial. But ETP doesn’t need to win in court to do major damage.”

Get DeSmog News and Alerts

Main image: Ray Kemble displays a bottle of tap water at his home in Dimock, Pennsylvania, in 2016. Credit: Copyright 2015 Laura Evangelisto

Get DeSmog News and Alerts