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April 09, 2014

Colorado High Court To Consider Lone Pine Orders

Last year we reported that an intermediate appellate court in Colorado struck down a Lone Pineorder in a fracking toxic tort case.  Sturdley v. Antero Resources Corp. et al (Co. Ct. App. July 3, 2013).  Because the lower court’s decision, which had dismissed the plaintiffs’ claims with prejudice, came only after initial disclosures and prior to the start of full discovery, the court found it to be an abuse of discretion and reversed.  According to the Sturdley court, the order entered by the trial court “interfered with the full truth seeking purpose of discovery.”

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.

On April 7, 2014, Colorado’s Supreme Court decided to review the Sturdley decision.  Specifically, the Court agreed to hear arguments and decide whether a lower court is “barred as a matter of law from entering a modified case management order requiring plaintiffs to produce evidence essential to their claims after initial disclosures but before further discovery[.]”  This is good news since the case had drawn some concern throughout the oil and gas industry.

Indeed, personal injury and property damage claims are abounding all across the country where shale wells are actively being drilled and hydraulically fractured.  And, 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.  New York is no exception where the courts have continuously upheld the use of Lone Pine orders, although typically after discovery has commenced.

Unfortunately, the recent Sturdley decision out of the Colorado Court of Appeals questioned the viability of Lone Pine orders in general and, more troubling, in the context of a hydraulic fracturing case.  It is therefore encouraging that the Colorado Supreme Court has agreed to reconsider the Sturdley case.

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