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A Conway County couple's federal lawsuit accusing Southwestern Energy Co. of causing millions of barrels of fracking waste to migrate onto their property, which they had refused to lease to the company, is back on, thanks to the 8th U.S. Circuit Court of Appeals.

On Sept. 25, 2015, U.S. District Judge D. Price Marshall Jr. dismissed the lawsuit after agreeing with Southwestern Energy Co. that a report prepared by the couple's engineering expert was too speculative to be reliable.

A three-judge panel of the St. Louis-based appellate court disagreed, saying in an opinion issued Monday that despite the report's admitted assumptions, it was reliable enough to assist a jury in determining how far the fracking waste would spread under certain conditions.

The panel reversed Marshall and sent the case back to him to reinstate for further proceedings.

Dale and Kari Stroud sued Southwestern Energy Co. in 2012, alleging that the company trespassed on their property and should compensate them. They said a company representative approached Dale Stroud in 2009 about selling some of the land for a disposal well or allowing Southwestern Energy Co. to lease the right to inject fracking waste water into an exhausted and plugged well on the property. But they couldn't agree on how much the company should pay for the lease, and the company leased the right to dispose of its fracking waste through a well on a neighboring property.

The company then drilled a well 180.3 feet from the Stroud property line and leased a surface area of 3.29 acres before disposing of about 7.6 million barrels of fracking waste. The leased area could hold just less than 1.1 million barrels at most, and experts agreed the volume of waste released "could not possibly fit in the reservoir space directly beneath the leasehold," according to the 8th Circuit opinion.

According to the lawsuit, when the drilling on the adjoining property began, Dale Stroud questioned the representative he had negotiated with, and the man told him that Stroud had been greedy and "they were going to use the well on [the neighbor's] property to fill up the empty gas space under [the Strouds'] property since it was all connected."

Although the company received approval from the Arkansas Oil & Gas Commission before drilling the well, the commission's primary focus wasn't the migration pattern of the waste, the opinion noted.

The Strouds later complained that the waste migrated onto the subsurface of their property. While there is no evidence of surface contamination on the Strouds' property, the opinion said, a registered engineer the Strouds hired to calculate the radial flow of the waste estimated how far the waste spread, using "a simplistic equation to create a rough model, which he believed adequate." It noted that the engineer has more than 35 years of oil and gas consulting experience, and has been qualified as an expert by the Federal Energy Regulatory Commission.

The company complained that the results weren't trustworthy because of the engineer's "simplifying assumptions," and Marshall agreed that "a jury would be speculating to return a verdict that a trespass did or did not occur."

But U.S. Circuit Judge Duane Benton of Kansas City, Mo., wrote in the 8th Circuit opinion that "the Strouds present evidence that could support a reasonable inference that the fracking waste migrated across their property line. These facts, while thin, enable a jury to draw a reasonable inference that 7.6 million barrels of waste, poured into an area capable of holding no more than 1.1 million barrels, migrated 180 feet to cross the property line."

Benton, joined by Chief U.S. Circuit Judge Lavenski Smith of Little Rock and U.S. Circuit Judge Roger Wollman of Sioux Falls, S.D., said the "reasonable inference" creates a genuine factual dispute that precludes a summary judgment -- an order based on legal arguments alone.

Metro on 05/23/2017

Print Headline: Fracking-waste suit revived on appeal

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