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July 12, 2013

Colorado Court Strikes Lone Pine Order in Fracking Lawsuit

Personal injury and property damage claims are abounding all across the country where shale wells are actively being drilled and hydraulically fractured.  In many instances, plaintiffs’ attorneys are bringing cases alleging broad based environmental contamination, property damage and health impacts due to hydraulic fracturing operations without any factual or scientific basis.  Their hope is that discovery will uncover support for their claims and ultimately allow them to force a trial or settle for substantial sums. Defendants have sought to protect themselves from these types of cases, and the associated discovery fishing expeditions, by seeking what are known as Lone Pine orders.  Since the 1986 decision in Lore v. Lone Pine Corp (N.J. Super. Ct.), many state and federal courts have issued such orders, which generally require plaintiffs to identify their injuries with specificity and produce some evidence of causation through expert reports, to streamline case management and promote efficient case resolution.  Unfortunately, a recent decision out of the Colorado Court of Appeals questioned the viability of Lone Pine orders in general and did so in a hydraulic fracturing case. In Sturdley v. Antero Resources Corp. et al (Co. Ct. App. July 3, 2013), a lower court’s Lone Pine order, which dismissed the plaintiffs’ claims with prejudice following only initial disclosures and prior to the start of full discovery, was found to be an abuse of discretion and reversed on appeal.  The Sturdley court held that the order entered by the trial court “interfered with the full truth seeking purpose of discovery.”  Notably, although some courts across the country have questioned the propriety of Lone Pine orders, and issued them at differing stages of litigation, the Sturdley decision charted new territory when it ruled that Lone Pine orders are not permitted as a matter of law before discovery has commenced. Notwithstanding the Sturdley decision, which could be construed to narrow the availability of Lone Pine orders, New York courts have continuously upheld the use of Lone Pine orders since 1989, although typically after discovery has commenced.  Indeed, the most recent decision in New York arises out of a case brought against Anschutz Exploration Company in federal district court which alleges similar claims associated with the drilling of Trenton Black River wells.  Accordingly, there is no indication that the Sturdley decision, which was based explicitly on Colorado law, will impact existing New York precedent and curtail this useful procedural tool for ferreting out baseless claims which are predicted to abound once shale development kicks off in New York.  

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