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Ely v. Cabot Oil & Gas Corp.

United States District Court, M.D. Pennsylvania

March 31, 2017

NOLEN SCOTT ELY, et al., Plaintiffs
v.
CABOT OIL & GAS CORPORATION, et al., Defendants

          MEMORANDUM OPINION

          Martin C. Carlson United States Magistrate Judge

         I. INTRODUCTION

         The process of litigation often transforms, sharpens and defines disputes. As a result, frequently the case that is actually presented at trial is very different than the case that the parties imagined when they began the litigation. Therefore, litigation by its very nature presents the potential for either clarity or confusion. Clarity in litigation comes from a candid recognition of how the law, the facts and the clash of ideas, re-defines the issues and claims in a case over time. Confusion erupts when a party fails to see their case as it is, but instead persists in attempting to present that case as they wished it would be.

         So it is here.

         On March 10, 2016, following a nearly three-week trial that capped more than six years of litigation, an eight-person jury seated in Scranton, Pennsylvania found in favor of nine plaintiffs on claims that Cabot Oil & Gas Corporation's drilling activity at two gas wells in Susquehanna County, Pennsylvania was negligent and caused the plaintiffs' compensable nuisance injuries by interfering with and damaging the plaintiffs' access to water and their enjoyment of their property. This claim, which was the sole claim submitted to the jury, differed significantly from the claims described six years earlier in the plaintiffs' complaint. It also varied materially from the claims that the plaintiffs led to jury to believe would be presented to them at the outset of this trial. Further, although the evidence offered in support of the plaintiffs' sole remaining claims was limited, often substantially rebutted or discredited, and notably lacking with respect to damages, the jury found in the plaintiffs' favor and awarded them $4.24 million in the aggregate.

         After the jury's verdict had been delivered and the panel was dismissed from the courtroom, Cabot advised the Court and the plaintiffs that it intended to renew its motion for judgment notwithstanding the jury's verdict, or alternatively seek a new trial. Now pending before the Court is Cabot's motion seeking three alternative forms of relief from the jury's judgment in this case: judgment as a matter of law pursuant to Rule 50 of the Federal Rules of Civil Procedure; a new trial pursuant to Rule 59 of the Federal Rules of Civil Procedure; or remittitur of the jury's damages award. (Doc. 756.) The parties have filed hundreds of pages in briefs in support of and opposition to Cabot's motion. (Docs. 762, 763, 765, 787, 788, 792, 797, 798.) With these voluminous submissions, the briefing on the motion is now concluded and Cabot's motion is ripe for adjudication.

         For the reasons that follow, although the Court agrees with Cabot that the evidence presented in support of the plaintiffs' claims was spare, sometimes contradictory, frequently rebutted by other scientific expert testimony, and relied in some measure upon tenuous inferences, giving full deference to that verdict under the exacting standards prescribed by law, the Court does not agree that Cabot has demonstrated that it is entitled to have judgment entered in the company's favor. The legal standards for granting judgment in favor of the losing party are appropriately high and difficult to surmount, and in this case we find that that Cabot has not met that high standard, since the evidence may permit a narrow path for limited success by the plaintiffs, albeit on a claim framed in a manner that is very different from the claims argued by the plaintiffs before this jury.

         However, the Court does agree with Cabot that the weaknesses in the plaintiffs' case and proof, coupled with serious and troubling irregularities in the testimony and presentation of the plaintiffs' case - including repeated and regrettable missteps by counsel in the jury's presence - combined so thoroughly to undermine faith in the jury's verdict that it must be vacated and a new trial ordered. Moreover, the jury's award of more than $4 million in damages for private nuisance bore no discernible relationship to the evidence, which was at best limited; and even were the Court to find that the jury's verdict of liability should stand, the Court can perceive no way in which the jury's damages award could withstand even passing scrutiny regardless of the applicable standard of review.

         We do not take this step lightly, and we recognize the significance of voiding the judgment of a panel of jurors who sat through nearly three weeks of trial and reached a unanimous verdict. Nevertheless, upon consideration of the trial record, and following reflection on the substantial and varied weaknesses in the plaintiffs' case together with the myriad examples of inappropriate conduct that repeatedly occurred in the jury's presence and may have colored the outcome of this case, the Court is constrained to find that a new trial is not only justified, but required. Accordingly, Cabot's motion will be granted in part, the verdict will be set aside, and a new trial will be ordered.[1]

         II.BACKGROUND

         This civil litigation commenced nearly eight years ago, when 44 plaintiffs and neighbors from Susquehanna County, Pennsylvania collectively sued Cabot Oil & Gas Corporation for injuries and property damage allegedly suffered as the result of the defendants' natural gas drilling operations in Dimock Township, a rural community situated in Susquehanna County. Subsequently, a number of the plaintiffs reached settlement agreements with Cabot, eventually leaving only 9 plaintiffs who refused to reach a pre-trial resolution of their claims. Those holdout plaintiffs include Nolen Scott Ely and his wife Monica L. Marta-Ely, individually and as parents to three minor children (the “Elys”); and Ray and Victoria Hubert, individually, and as parents of one minor child, as well as a child who since reached the age of majority, Angel Hubert (the “Huberts”).[2]

         As the number of plaintiffs in this lawsuit gradually reduced, so did the remaining plaintiffs' claims reduce in number and scope.

         When the lawsuit was initiated, the Elys, Huberts and dozens of other Dimock plaintiffs launched a legal broadside on Cabot's expansive drilling activity in the northern tier of Pennsylvania, and in Susquehanna County in particular. As part of this legal assault, the plaintiffs brought claims for breach of contract, fraudulent inducement, private nuisance, negligence, negligence per se, claims for medical monitoring, and alleged violations of a variety of Pennsylvania environmental laws. The plaintiffs also endeavored to show that natural gas drilling represented an abnormally dangerous activity that should cause it to be subject to strict liability under Pennsylvania law - something that no court in Pennsylvania has ever found.

         However fashioned or labeled, litigation in this action made clear that the primary thrust of the plaintiffs' claims was that the defendants' oil and gas drilling activities caused injury to the plaintiffs' access to safe water from the wells on the property where they live by polluting their well water. Although many other residents welcomed the industry's arrival and expansion, and the economic benefits that some realized as a result, this litigation represented the concerted push-back of others in the same community against the encroachment of the natural gas industry upon communities like Dimock, which claimed to have experienced unwelcome change to the local natural environment, erosion of the bucolic surroundings, and - most especially - the alleged impairment of the local drinking water as a result of the industry's expansion in the area.

         Over the intervening years, this expansive legal strategy against Cabot and other natural gas concerns gradually winnowed and the remaining claims reduced in both number and scope. Dozens of the plaintiffs settled their claims, but the Elys and Huberts pushed forward. Following years of litigation, periodic enlargement of the discovery period to accommodate the Ely and Hubert plaintiffs as they were represented by a rotating cast of attorneys, as well as stints during which the plaintiffs were without counsel, Cabot moved for summary judgment against their remaining claims.

         The undersigned prepared reports and recommendations with respect to the motions, recommending that the District Court grant the motions entirely with respect to the Estate's claims, and with respect to all of the Ely and Hubert family claims except for the claims of negligence and private nuisance. In so doing, the Court recognized that the plaintiffs' surviving claims rested upon relatively limited evidence that was itself subject to vigorous dispute by the defendants. Nevertheless, the Court also found that viewing the evidence in the light most favorable to Elys and the Huberts, and granting all reasonable inferences in their favor, the negligence and nuisance claims had sufficient evidentiary support to go to trial.

         After the district court adopted the reports and recommendations, the parties consented to proceed before the undersigned for the remainder of the litigation. At this point, following the rulings that granted Cabot's motions for summary judgment in substantial part, the litigation became significantly more limited in its scope, as the plaintiffs' claims had been pared back, and their theories of liability substantially curtailed.

         Unfortunately, the plaintiffs proceeded to trial in late February 2016 as if their claims remained largely unaffected by these events or the court's rulings. The plaintiffs adopted a strategy which suggested they did not fully appreciate or acknowledge the significant limitations that had been imposed on their case against Cabot, and on the evidence that they could rely upon in front of a jury to prove their remaining claims. The plaintiffs' own failure to recognize the substantive change to their claims and the evidentiary limitations that would accordingly govern at trial was facilitated by a trial strategy which regrettably failed to abide the Court's orders and trial rulings regarding evidentiary matters and matters of basic civil practice. As a result, the manner in which this case was prosecuted had the effect of repeatedly inviting the jury to engage in unwarranted speculation that was plainly prejudicial to the defense. This constellation of serious problems thoroughly undermined the $4.24 million verdict that the jury ultimately rendered in favor of the plaintiffs. These grave concerns, which now combine to undermine confidence in this verdict and compel a new trial, were foreshadowed in pretrial proceedings.

         On February 12, 2016, at a pretrial conference, the Court was presented with a startling issue that had arisen: despite having been preparing for this litigation for many years, the plaintiffs had failed to provide or identify scores of documents that they now first proposed to introduce at trial. Cabot, reasonably, moved to exclude these undisclosed materials, and the Court was constrained to enter an Order excluding more than 300 of the plaintiffs' proposed trial exhibits resulting from counsel's “completely unexplained, and wildly kaleidoscopic” submission of “voluminous, contradictory, cryptic, confused and confusing” exhibit lists. (Doc. 685, pp. 1-2 and n.1.) Indeed, the Court was compelled to acknowledge that never in the undersigned's 36-years as a federal court litigator and judge had the Court “[ever] observed a wholesale discovery default of this scope and dimension” and it was thus something that constituted “an unprecedented event in our experience.” (Id.) This ruling, which the plaintiffs' vigorously contested, was compelled by the plaintiffs' wholly unexplained production of thousands of pages of exhibits, and over 300 categories of exhibits, which had never previously been identified, and in some cases even produced, over the course of the entire litigation. Thus, the Court found itself confronted on the eve of trial by a profound tension between what the plaintiffs wished their case to be and what it was in fact. This tension was exemplified by the plaintiffs' interest in using countless previously undisclosed exhibits at a trial that was more than six years in the making and the defendant's interest in not being ambushed with a trial-by-surprise. This tension, and others substantially similar, would bedevil this case over its duration.

         The plaintiffs' casual approach to identifying their exhibits in a “vague, ever-changing, and idiosyncratic form that continues to take still new shape even with trial approximately one week away” compelled the conclusion that “the plaintiffs' disregard of their obligation to produce discovery in a timely manner, and to timely and intelligibly identify trial exhibits in accordance with the Court's Local Rules and prior orders” required that the plaintiffs be limited to the 24 exhibits that they had identified in their pretrial memoranda. (Id.)

         The Court includes reference to this tragic pretrial event because it offered a worrisome preview of what was to come once a jury was empaneled: a failure to reconcile the plaintiffs' case as they imagined it with the significantly changed legal and factual landscape of this litigation. The plaintiffs' case had been substantially, and appropriately, narrowed by the District Court's ruling on summary judgment. The plaintiffs' documentary evidence in support of these narrowed claims had been made narrower still through their own pretrial missteps and disregard of the Court's orders. The plaintiffs were thus faced with an especially narrow path to prove their remaining claims, and the plaintiffs were made explicitly aware of just how narrow that path was. Yet, the plaintiffs, their witnesses, and their counsel proved unable to stay within the narrow boundaries that had been set by legal rulings in this case - rulings that were compelled by the law, the evidence that had been adduced, and the plaintiff's own pretrial conduct.

         The exclusion of the plaintiffs' proposed exhibits would be a harbinger of what would follow over the course of trial, with numerous instances in which the plaintiffs' witnesses were invited to stray from the confines of what they were permitted to discuss to offer passing commentary about other drilling activity in the area; to hint at other matters unrelated to the plaintiffs' claims that suggested Cabot engaged in prior misconduct; or to suggest to the jury that there were additional admissible factual issues that they were not permitted to discuss but were obviously relevant to the plaintiffs' claims. The aggregate effect of this repeated trespass into prohibited areas was compounded during a highly irregular closing argument, which ultimately created the impression for the jury that Cabot must have been responsible for all of the plaintiffs' alleged water problems - problems that began before the Gesford wells were drilled, a fact that we now know because the plaintiffs stipulated to it before trial.

         This course of conduct is particularly regrettable because, as we discuss below, there was a narrow path the plaintiffs could have pursued to properly litigate some of their surviving claims. The existence of this path, which can be discerned from the evidence when that evidence is construed in a light most favorable to the plaintiffs, leads us to decline Cabot's invitation to find for the defendant as a matter of law. However, by eschewing this path, and instead steering an erratic course in contravention of the Court's rulings and admonitions which led to confusion and prejudice, the plaintiffs have compelled us to grant the defendant's motion for new trial. As explained below, the myriad problems that occurred at trial, both respect to the plaintiffs' proof and counsel's conduct, resulted in a verdict and damages award that is impossible to sustain.

         III. DISCUSSION

         A. Motion for Judgment as a Matter of Law

         We begin by addressing Cabot's motion for judgment as a matter of law pursuant to Rule 50(b) of the Federal Rules of Civil Procedure. Cabot has presented an exhaustive argument in support of this aspect of its motion that presents multiple arguments as to why it is entitled to have judgment entered in its favor regardless of the evidence presented. With few exceptions, these were also arguments that Cabot made prior to trial, either in its motion for summary judgment, or in motions in limine that sought to exclude or limit certain testimony, particularly that of the plaintiff's hydrology expert, Paul Rubin. Thus, in a number of particulars Cabot has essentially repeated and amplified those arguments again in its post-trial motion, which can reasonably be read as a motion seeking reconsideration of the Court's prior rulings masquerading as a motion for judgment as a matter of law.

         The Court has studied Cabot's motion carefully, as it has done with all of the motions that the parties have filed over the past several years. The Court has also examined the trial record, and is intimately familiar with that record, which Cabot now urges the Court to discuss in great detail. The Court's consideration of that record does not, however, cause the Court to reconsider its prior rulings with respect to expert testimony; the right of the Huberts to prosecute a claim for private nuisance; or the narrow scope of the claims that were permitted to proceed to trial. The Court further is bound to consider these matters in accordance with the highly deferential standard of review that must be used after a jury has reached a verdict. Consideration of the testimony offered at trial in the context of this deferential standard of review causes the Court to find that although the jury's verdict must be set aside and a new trial ordered in this case, Cabot is not entitled to judgment in its favor on the very narrow claims that the Court previously found the plaintiffs were entitled to try before a jury.

         Cabot's arguments fall predominately into two categories. First, Cabot argues that because the plaintiffs' stipulated as to the date on which Cabot first began drilling the Gesford wells, and because that date comes after the time that the plaintiffs represented that they began experiencing problems with their water, Cabot is necessarily entitled to judgment because any other result would be absurd, and lead to the conclusion that a cause did not precede the alleged effect.

         Second, Cabot takes aim at the testimony of the plaintiffs' expert witnesses, Paul Rubin and Dr. Anthony Ingraffea, arguing that Rubin's testimony should have been disallowed entirely and failed in any event to offer anything probative with respect to an underground pathway in which water flowed from the Gesford wells to the underground aquifers that fed the plaintiffs' water wells. Cabot also argues that Dr. Ingraffea's testimony was deeply flawed, relied upon a number of unreasonable and unsupported inferences, was highly prejudicial, and failed to connect with Rubin's testimony to allow a jury to find that Cabot was negligent in its drilling and cementing of the Gesford wells after they experienced faults. Cabot argues that Ingraffea's testimony was so flawed, and so thoroughly rebutted by Cabot's own experts, that it could not be used by a jury to infer that any failure in cementing the wells allowed gas to migrate into an aquifer that fed into the plaintiffs' water supply.[3]

         1. Standard of Review Under Rule 50

         After a party has been fully heard on an issue during trial, Rule 50 of the Federal Rules of Civil Procedure allows a court to grant a motion for judgment as a matter of law, or a new trial, if the court finds “that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue[.]” Fed.R.Civ.P. 50(a). Where a party has made a Rule 50 motion before the matter is submitted to the jury, and where that motion has been denied, the party may renew the motion following trial, as Cabot has done here. Fed.R.Civ.P. 50(b). When presented with such a motion, the court may either let the verdict stand, order a new trial, or direct entry of judgment as a matter of law in favor on the moving party. Id.

         Although available under the Rules, “judgment as a matter of law should be granted sparingly.” Avaya Inc., RP v. Telecom Labs, Inc., 838 F.3d 354, 373 (3d Cir. 2016) (quoting Goodman v. Pa. Tpk. Comm'n, 293 F.3d 655, 665 (3d Cir. 2002)); see also Bender v. Norfolk S. Corp., 31 F.Supp.3d 659, 664 (M.D. Pa. 2014) (“Judgment as a matter of law should be used sparingly and may be granted only if, ‘as a matter of law, the record is critically deficient in that minimum quantity of evidence from which a jury might reasonably afford relief.'”) (quoting Whelan v. Teledyne Metalworking Prods., 226 F. App'x 141, 145 (3d Cir. 2007) (quoting Trabal v. Wells Fargo Armored Serv. Corp., 269 F.3d 243, 249 (3d Cir. 2001)).

         Thus, as the Third Circuit explained in Avaya, a motion for judgment as a matter of law brought pursuant to Rule 50 should be granted only if, “viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability.” Avaya, 838 F.3d at 373 (quoting Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)). In considering the evidence in the light most favorable to the nonmoving party, the court must also give the nonmoving party “the benefit of all reasonable inferences, even though contrary inferences might reasonably be drawn.” In re Lemington Home for the Aged, 777 F.3d 620 626 (3d Cir. 2015) (citing Dudley v. S. Jersey Metal, Inc., 555 F.2d 96, 101 (3d Cir. 1977)). Additionally, a court must not make credibility determinations or weigh the evidence when considering the motion. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51 (2000). Instead, “the court should review the record as a whole, [and] it must disregard all evidence favorable to the moving party that the jury is not required to believe.” Id. At the same time, the court may grant the motion “if upon review of the record, it can be said as a matter of law that the verdict is not supported by legally sufficient evidence.” Borrell v. Bloomsburg Univ., No. 3:12-CV-2123, 2016 WL 4988061, at *2 (M.D. Pa. Sept. 19, 2016) (citing Parkway Garage, Inc. v. City of Phila., 5 F.3d 685, 691-92 (3d Cir. 1993)). “The question is not whether there is literally no evidence supporting the non-moving party, but whether there is evidence upon which the jury could properly find for the non-moving party.” Id. at *2.

         2.The Effect of the Stipulation on the Plaintiffs' Claims

         Cabot first argues that no reasonable jury could have found for the plaintiffs because the plaintiffs have admitted that problems with their water began before the date that all parties agree Cabot began drilling the two Gesford wells in late September 2008. (Doc. 696, ¶22; N.T. 2/24 56:14-57:6.) The plaintiffs repeatedly attempted at trial to distance themselves from this agreement once it became apparent that the September 2008 drilling or “spud” date came after the plaintiffs had made reports of trouble with their water, as the problem this presented for their claims was obvious. Although the plaintiffs were offered on multiple occasions the opportunity to challenge the effect of the stipulation appropriately outside the presence of the jury, they declined to do so. Instead, they seemingly shifted their focus to offer new and different theories regarding Cabot's alleged activities near the drill sites that preceded the actual spud date, and Mr. Ely in particular testified that the drilling occurred in June or July, 2008 - something that was simply inconsistent with the plaintiffs' stipulation, which the Court ultimately found to be binding for purposes of trial. (N.T. 2/29 49:1-7, 213:19-23.)

         Since the plaintiffs rested their case-in-chief, Cabot has maintained that the defense was entitled to judgment in its favor because the plaintiffs' own admissions establish irrefutably that Cabot's Gesford wells could not have been the cause of the plaintiffs' alleged water problems because the plaintiffs admitted that those problems existed before Cabot ever broke ground on either well. Cabot argues that the plaintiffs' case crumbles on the very issue of causation, since at trial the plaintiffs were boxed in by the stipulation. According to Cabot, this represented game, set and match in this case since the plaintiffs' case defied the basic science of cause-and-effect. Cabot has now argued, once again, that the plaintiffs' admissions in this regard foreclose their entire case.

         The evidence unquestionably showed that the plaintiffs had begun experiencing some problems with their water before the spud date for the Gesford wells. Mr. Ely prepared a handwritten document in 2009 noting the problems began in the summer of 2008, (Cabot Ex. 96), and Mr. Ely testified at trial that problems began in August 2008. (N.T. 2/23 126:20-127:13, 191:15-192:2, 210:21-212:10.) On cross-examination, Mr. Ely emphasized that his family “began noticing issues with our water in August of 2008.” (N.T. 2/23 212:3-10.) A day after giving this testimony, Mr. Ely reaffirmed it, noting that there was nothing about his prior testimony that he wanted to change. (N.T. 2/24 24:14-17.) Mrs. Ely testified similarly. (N.T. 2/24 78:14-19.)

         For his part, Ray Hubert testified that he began noticing problems with his own well in July 2008. (N.T. 2/24 171:12-20, 210:23-211:3.) Mrs. Hubert testified that problems began in August 2008. (N.T. 2/25 27:10-23.) Hope Hubert testified similarly that problems began during the summer of 2008. (N.T. 3/3 30:5- 11, 37:17-21.) Angel Hubert hedged somewhat in her own testimony, ...


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