Whiteman et al v. Chesapeake Appalachia, No. 12-1790
Decided: September 4, 2013
The Fourth Circuit Court of Appeals affirmed the district court’s grant of summary judgment to the defendant, Chesapeake Appalachia, L.L.C. (Chesapeake), upon the Whitemans’ claim for common law trespass. The court held that Chesapeake’s creation of drill waste pits was reasonably necessary for recovery of natural gas and did not impose a substantial burden on the Whitemans’ surface property.
The Whitemans own the surface rights to approximately 101 acres in Wetzel County, West Virginia. Chesapeake owns lease rights to minerals beneath the Whitemans’ surface property. The Whitemans use their land primarily for raising sheep and to produce hay. Chesapeake operates three natural gas wells on approximately ten acres of the Whitemans’ property. Chesapeake’s well operations and permanent drill waste disposal have rendered that portion of the Whitemans’ property unusable for any suitable purpose. However, Chesapeake did obtain valid permits and gave the Whitemans notice. Chesapeake then used the common disposal method employed in West Virginia to drill the wells. The Whitemans admitted at trial that their monetary damages were “trivial.” The only expert testimony offered in the case opined that Chesapeake’s drilling operations caused no diminution in value. Rather, the only harm alleged by the Whitemans was their fear of possible future liability that might stem from the waste pits. The issue on appeal was whether Chesapeake’s permanent disposal of drill waste upon the Whitemans’ surface property was “reasonably necessary” for the extraction of minerals.
The Fourth Circuit began its analysis by describing the applicable law at issue. began its analysis common law trespass is “an entry on another man’s ground without lawful authority, and doing some damage, however inconsiderable, to his real property.” A common source of “lawful authority” is a license. However, a mineral estate owner has authority to enter upon the surface estate, even without express license or otherwise. In West Virginia, a mineral estate owner that enters upon a surface estate owner’s land does so without lawful authority only if, under the “reasonable necessity” standard, the mineral estate owner “exceeds its rights…thereby invading the rights” of the surface estate owner. In other words, a grand of minerals underlying a tract of land carries with it a right to use so much of the surface as is fairly necessary to recover the mineral and preserve the mineral holder’s “reasonably profitable enjoyment” of the mineral. What is necessary depends on the facts of each case.
The Fourth Circuit held that the drill waste pits did not impose a substantial burden on the Whitemans’ surface property. Chesapeake’s experts opined that the drill waste pits had no effect on the Whitemans’ property value, which they failed to rebut. The court reasoned that their subjective fear of potential future liability was not sufficient. Plus, the Whitemans conceded their pecuniary loss was minimal. In addition, the drill waste pits were reasonably necessary for recovery of natural gas. The Fourth Circuit asserted that the fact that Chesapeake used the common method of waste disposal, rather than the newest alternative method, did not render its method unnecessary.
– Sarah Bishop