American Oil and Gas Reporter - February 2016 - 17

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earthquakes that continue unabated."
The petition sets out causes of action
for negligence, strict liability for an
ultrahazardous activity, and seeking
permanent injunctive relief. The first
cause of action accuses the defendants
of:
* Failing to require and/or provide
equipment and engineering controls to
eliminate or reduce the risks associated
with altering the earth's subsurface
through drilling waste disposal;
* Failing to warn others of the
earthquake dangers associated with injecting drilling waste; and
* Failing to provide reasonable
measures sufficient to protect the plaintiffs from the effects of earthquakes.
The second cause of action contends
that injecting drilling waste into
disposal wells "is abnormally dangerous
and constitutes an ultrahazardous
activity," and that the defendants "are
liable to plaintiffs regardless of the
amount of care exercised."
In those causes of action, the
plaintiffs seek "general damages in such
sum as is fair and reasonable, for
special damages in such sum as proven
at trial, (and) for exemplary or punitive
damages in an amount that will properly
punish defendants and deter them and
others from like conduct."
The third cause of action maintains
"defendants' actions have caused longterm or permanent environmental
damage unsusceptible to remediation,"
and seeks permanent injunctive relief.❒

Commonwealth Court
Sides With PIOGA In
Act 13 Permit Challenge
WEXFORD, PA.-The Pennsylvania
Independent Oil & Gas Association has
moved a step closer to enjoining the
Pennsylvania Department of
Environmental Protection from
enforcing permit requirements declared
unconstitutional in December 2013
when the state Supreme Court
overturned Act 13.
PIOGA notes that despite
invalidation by the Supreme Court's
ruling in Robinson Township v.
Commonwealth, DEP still was forcing
producers to comply with Act 13's
Section 3215 permitting requirements,
including considering the impacts of
wells on certain public resources and

submitting forms related to the
Pennsylvania Natural Diversity
Inventory (PNDI) Policy.
However, the association reports, on
Dec. 29, the Pennsylvania
Commonwealth Court overturned
DEP's objections to a challenge the
association filed in June 2015 and
ordered the agency to answer PIOGA's
claims by Jan. 28.
One of DEP's objections, PIOGA
explains, was that the association did
not have standing and that its petition
did not present an issue ripe for judicial
review. However, PIOGA says, the
court agreed with it that enforcing
Section 3215 left PIOGA members
facing an "untenable choice . . . (of)
either complying with unlawful
requirements or suffering the denial of
their permits."
The court added that "the permitting
process . . . could require those members
to expend considerable time and money
in order to simply apply for the permit,"
which could result in immediate and
actual harm, according to PIOGA.
Significantly, PIOGA continues, "The
court said PIOGA need not challenge the
validity of the provision PIOGA asserts
is the basis for DEP's use of the Public
Resources Form and PNDI Policy-
Section 3215(c)-'because our Supreme
Court already has found the provision to
be unconstitutional and enjoined.'"
Furthermore, PIOGA says, the
Commonwealth Court denied DEP's
contention that its policy could not be
challenged unless a particular permit had
been denied, and upheld PIOGA's right
to challenge the permit requirements on
behalf of any of its members.
And in response to DEP's argument
that PIOGA had not exhausted all
administrative avenues before bringing
a lawsuit, PIOGA says the
Commonwealth Court concluded that
the Environmental Hearing Board did
not have jurisdiction to consider
PIOGA's pre-enforcement challenge or
the authority to grant the relief
requested. ❒

Ohio Supreme Court
Backs Lease Language
In Beck Energy Lawsuit
COLUMBUS, OH.-The Ohio
Supreme Court affirmed that a standard
lease used in hundreds of Ohio

contracts was not a no-term perpetual
lease, and that it did contain provisions
requiring the lessee to drill wells within
10 years of signing the agreements if he
wanted to maintain control of the
properties.
The court decision, issued in
Claugus Family Farm LP v. 7th District
Court of Appeals, consolidated two
cases that both involved nearly identical
oil and gas leases, media reports
indicate.
The Hustack and Hupp families filed
suit against Beck Energy Corp. in 2011,
arguing a 2008 contract used by the
company, a Form G&T (83) lease,
allowed Beck Energy to maintain the
lease indefinitely without drilling,
making it a perpetual lease that they
contended was against Ohio public
policy, court documents state.
The plaintiffs amended the lawsuit to
include 400 Monroe County landowners
who signed similar forms with Beck
Energy. A trial court agreed they were
leases in perpetuity.
According to court documents, the
trial court certified the class as all Ohio
lessors subject to the Form G&T (83)
lease with Beck Energy whose lands
were still undeveloped. The class action
suit involved 415 Monroe County
landowners and as many as 300 with
property outside that county. The
unnamed class members were not
notified they had been included in the
suit. The trial court agreed to suspend
the leases of only the landowners
named in the case, pending the court's
decision, according to court documents.
Beck Energy appealed to Ohio's 7th
District Court of Appeals, which
reversed the trial court in 2013. The
case was appealed to the Ohio Supreme
Court.
The Supreme Court addressed two
issues: whether the leases allowed Beck
Energy to hold the leases without
developing the properties, and whether
those leases were subject to an "implied
covenant of reasonable development."
Court documents say the Form G&T
(83) lease set a term of 10 years for
development, and did require Beck
Energy to pay a delay rental if it failed
to begin drilling activities within 12
months.
The decision pointed out the contract
was similar enough to other leases
considered by the court to justify
applying earlier rulings. It decided the
FEBRUARY 2016 17
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