• Dallas Court of Appeals Reverses $2.9 Million Jury Verdict, Finding Insufficient Evidence of Intent
  • February 7, 2017 | Authors: David A. Baay; Maryann B. Zaki
  • Law Firm: Eversheds Sutherland (US) LLP - Houston Office
  • In 2014, the jury awarded $2.9 million to plaintiff landowners in Lisa Parr et.al. v. Aruba Petroleum, Inc., a case involving alleged hydrocarbon exposure due to hydraulic fracturing operations. Earlier this week, the Dallas Court of Appeals reversed the jury verdict, ruling that there was insufficient evidence to support the jury’s findings that Aruba Petroleum, Inc. (Aruba) intentionally created a private nuisance.

    The Lawsuit

    Lisa Parr, individually and as next friend to her minor daughter, E.D., and Robert “Bob” Parr (the Parrs) sued Aruba, alleging that drilling and fracking at Aruba’s 22 wells located within two miles of the Parr’s 40-acre property in Wise County was making them sick. The Parrs alleged a wide array of health issues, including nose bleeds, irregular heartbeat, muscle spasms, and open sores, all of which were allegedly caused by hazardous gases and airborne chemicals emanating from Aruba’s well sites.

    The Appeal
     
    After the jury awarded the Parrs $275,000 for loss in property value, $2 million for past pain and suffering, $250,000 for future pain and suffering, and $400,000 for past mental anguish, Aruba appealed to the Dallas Court of Appeals and presented six issues for review.

    The Court of Appeals mainly focused on Aruba’s argument that there was insufficient evidence to support the jury’s findings that Aruba intentionally created a private nuisance. The court summarized Texas law regarding intent and held that “[i]ntent is measured by a subjective standard, meaning the defendant must have actually desired or intended to create the interference or must have actually known or believed that the interference would result.”

    Aruba argued that there was no evidence that it knew that it was harming the Parrs or their property, or that harm to them or their property was substantially certain to result from Aruba’s conduct. Aruba also argued that its conduct was no different than the conduct of other oil and gas operators and Aruba “had no reason to know that its wells were uniquely harming the Parrs’ land so as to cause a substantial interference with their use and enjoyment of the land.”

    The Court of Appeals agreed with Aruba. Despite evidence of the Parrs’ complaints about Aruba’s operations, and attempts to notify Aruba representatives, the Court ruled

    [T]he issue before us is not whether there is evidence in the record that Aruba created a nuisance or was negligent in creating a nuisance but whether Aruba intentionally did so as to the Parrs. And the legal standard confirmed by the supreme court in Crosstex [N. Tex. Pipeline, L.P. v. Gardiner, No. 15-0049, 2016 WL 3483165, at *16 (Tex. June 24, 2016)] is that a defendant intentionally creates a nuisance if it actually desired or intended to create the interference or actually knew or believed that the interference would result. Evidence that Aruba intentionally engaged in the conduct that caused the interference is not sufficient to establish an intentional nuisance. Rather, the evidence must show that Aruba intentionally caused the interference that constitutes the nuisance.

    Finding the evidence insufficient, the Court reversed the jury verdict and held that the Parrs were to take nothing against Aruba.

    Implications

    While this case is a win for oil and gas companies, it presents a question for plaintiffs in similar nuisance suits: what additional evidence must plaintiffs present in order to prove that a defendant’s conduct was intentional?

    Although the Parrs alleged that they spoke with someone at Aruba’s business office to ask about drilling activities, spoke by phone with Aruba’s public relations firm, spoke with individuals who were either Aruba’s employees or contractors at or near the well sites, and submitted complaints to the Texas Commission on Environmental Quality concerning Aruba’s operations, the Court ruled that these actions were not enough. Because the Parrs did not cite to any evidence that Aruba knew who placed these calls and made these complaints, none of the evidence established that Aruba actually intended or desired to create an interference on the Parrs’ land or that Aruba actually knew or believed that an interference would result.

    Although it’s not clear yet what evidence plaintiffs will be required to prove, they will definitely be required to prove more in order to prove that an oil and gas operator intentionally created a private nuisance in future cases.

    The full case style is: Aruba Petroleum, Inc., v. Lisa Parr, individually and as next friend to her minor daughter, E.D., and Robert “Bob” Parr, Court of Appeals Cause No. 05-14-01285-CV; Trial Court Cause No. CC-11-01650-E.