Fracker Range Resouces Sues Over YouTube of Burning Well
Business Week | Mark Drajem and Mike Lee
May 18, 2012
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Steven Lipsky shot video of methane- fueled flames shooting from a hose hooked up to his well in Weatherford, Texas, and sent it to Sharon Wilson, a blogger who posted it on YouTube. And he hired Alisa Rich to test the water in his well and alert the U.S. Environmental Protection Agency.
For gas-driller Range Resources Corp. -- which Lipsky blames for contaminating his water from two wells near his home -- those actions amount to a conspiracy to harm its reputation, and it went to state court seeking $3 million in damages from Lipsky and Rich.
Range won one round in its fight this week, when a judge ruled that Wilson had to turn over e-mails she exchanged with the EPA and Lipsky, as she is a “central and recurring character in the conspiracy lawsuit.”
“This has everything to do with Range trying to shut me up, and further intimidate opponents,” Wilson said in an interview. Wilson, who said she didn’t even receive the video of Lipsky’s flaming hose until after the EPA acted, said she fears she may be added to the suit against Lipsky and Rich.
The fight between Range and environmental activists has taken on national import as Republican lawmakers allege the EPA, and especially the regional office in Dallas, has persecuted oil and gas drillers over hydraulic fracturing, with the Fort Worth, Texas-based Range case a primary example. Hydraulic fracturing, or fracking, involves pumping water, sand and chemicals underground to free gas.
At the heart of the complaint by Range, a counterclaim to a suit filed against it by Lipsky, is the allegation that Lipsky and Rich, president of Wolf Eagle Environmental consultants, conspired to persuade the EPA to intervene, working with the EPA regional administrator Al Armendariz.
Armendariz resigned this month after a tape from 2010 emerged in which he compared the agency’s efforts against polluters to Roman conquerors suppressing Turkish towns by crucifying residents. A photo of Armendariz with Wilson is part of Range’s filing with the court. Armendariz didn’t return a telephone message.
“Everyone has a right to petition their government, but there is also a duty and a responsibility to do so truthfully and accurately,” Andrew Sims, an attorney for Range in the case, said in an interview. “The evidence is very convincing and very strong that there was a conspiracy.”
Lawyers for Rich and Lipsky tried to get Judge Trey Loftin in the 43rd district court in Parker County, Texas, to throw out the case, arguing that it violates a Texas law against so-called Strategic Lawsuits Against Public Participation, or SLAPPs. Loftin rejected that argument, and the case was appealed to the Texas Second Court of Appeals in Fort Worth.
Companies file SLAPP cases to try to deter outside critics, said Eric Goldman, a law professor at Santa Clara University School of Law in Santa Clara, California, who studies the issue.
Appealing to the government for help is a core protection in U.S. law, Goldman said in an interview. Citizens should have wide legal leeway in what they can tell public officials so “the government can make the call,” he said.
While one could argue the Range countersuit was filed to silence criticism, one could also say Lipsky hasn’t been deterred from public speech because he sued the company, said lawyer Douglas E. Mirell of Loeb & Loeb LLP in Los Angeles, who isn’t involved in the litigation.
Question of Law
If the Range counterclaim moves forward, the gas company would have to prove it had been defamed, a question of law that pivots on whether the court deems it to be a public figure, one that willingly thrust itself into the public eye, Mirell said. If Range is ruled public, then it must convince the court that its adversaries made statements they knew were false or with reckless disregard for whether they were true, he said.
“If the corporation is found to be a public figure, then it’s going to be incredibly difficult for a defamation claim to succeed,” he said. Absent such a finding, the defamation standard would be mere negligence, “and that’s a pretty low bar,” he said.
A few facts of the case are not in dispute: Range drilled near Lipsky’s property in Weatherford in 2009, and used hydraulic fracturing. In 2010 Lipsky, who didn’t respond to telephone messages seeking comment, complained about seeing vapors from gas escaping from his drinking well, and called out a service crew because he couldn’t get water from the well.
After that it gets contentious.
According to a deposition filed with the Texas Railroad Commission, which regulates oil and gas drilling in the state, Lipsky became concerned about his water quality in 2010, and appealed to the commission and other state regulators asking them to intervene. Lipsky said he felt sick.
“I felt like maybe I was dying of cancer,” he said in the deposition from January 2011. “I’m not sure. I just felt terrible.”
He also sent off the video of flames shooting out of his hose from his well to Wilson, who writes the blog BlueDaze under the moniker TXSharon about the gas industry in Texas, she said. Lipsky hired Rich in August 2010, after state regulators failed to act, Rich said in an interview.
Before she took the job, Rich e-mailed Lipsky on Aug. 12, proposing testing emissions in the air five feet from the well.
“I can then contact the EPA and discuss the fact that we have a multi-issue environmental concern, including potential explosion AND impact to human health (especially children) they will be very receptive,” Rich wrote in the e-mail, which is in the court file. “It’s worth every penny if we can get jurisdiction to the EPA.”
That e-mail is at the core of the conspiracy case. “She reached a conclusion about how they can stage this test to get the EPA inflamed over the matter,” Sims said.
Rich says she was responding to what she heard from Lipsky, and said she always “shoots straight” with her tests. And when she took the readings at Lipsky’s house a few days later, she found dangerous methane levels, told Lipsky to move out of his house and contacted the local fire department.
“I was majorly concerned the place would blow up,” Rich said in an interview. Because state officials wouldn’t help, Rich said she also called EPA officials in Dallas later that month when the results came back and asked them to get involved.
“There was no other solution, other than to notify the EPA,” Rich said. “He was getting the classic runaround.”
Lipsky also hired a lawyer, David Ritter, who sent a letter to Range’s general counsel David Poole on Sept. 21, 2010, detailing the level of contaminants found in the water and indoor air. “The Lipskys hope that this situation may be resolved without the need for litigation, especially considering the amount of local, regional and national media attention a case of this type and magnitude may produce,” Ritter said in the letter.
In December 2010 the EPA issued an order that Range’s gas drilling near Lipsky’s home had caused “extremely high levels” of methane, which can be explosive, and the presence of benzene, a carcinogen. The EPA said in a statement that it ordered the company to “stop the contamination immediately.” A month later, the agency filed a lawsuit against Range in U.S. District Court in Dallas asking a judge to compel the company to comply with the order.
Range Not Responsible
The EPA’s December order generated the news headlines Ritter had suggested, and a flurry of actions followed. The Texas Railroad Commission held a hearing, and ruled that Range wasn’t responsible for the contamination. Lipsky sued Range, which had $1.2 billion in revenue in 2011, in district court in Parker County. In July 2011, Range fired back, filing its countersuit against Lipsky and Rich.
“Rich’s scheme was designed to enlist the EPA in pursuing a costly ‘investigation’ against Range, which resulted in significant harm to Range’s well-deserved reputation as a high- quality driller,” the company said in its countersuit.
Loftin ruled that Lipsky had to take his original complaint to state officials, not to the court.
This week, Loftin ruled that Wilson, who now works for the Earthworks’ Oil & Gas Accountability Project, should be afforded no protections as a journalist, and had to turn over e-mails requested by Range.
“The court finds that she is what she holds herself out to be: an activist,” Loftin wrote in his decision on May 15.
The EPA has backed off as well. Even before Armendariz resigned, the agency had settled its case in federal court against Range after the company agreed to test 30 local water wells and turn over relevant testing data to the agency.
Wilson said she fled a 42-acre rural property after gas drillers moved in. Sitting in her home in Allen, a suburb of Dallas, she said that instead of spending millions of dollars on legal fees and investigations of her finances, Range could pursue a much simpler strategy.
“The best way to shut me up is to drill better.”
The EPA case is U.S. v. Range Production Co., 11-cv-00116, U.S. District Court, Northern District of Texas (Dallas). The case in Texas state court is Lipsky v. Durant, 11-cv-0798, 43rd District Court of Texas, Parker County.