The Latest on Ladra: Updates on Induced Seismicity Tort Litigation
This summer saw major developments in Ladra v. New Dominion, LLC, the Oklahoma case some observers believe may determine the future of tort litigation over earthquakes allegedly caused by wastewater disposal. At the center of the case is Sandra Ladra, a Prague, Oklahoma, resident who was severely injured when a magnitude 5.7 earthquake caused pieces of her stone fireplace to break off and fall onto her legs in 2011. Ladra brought suit against New Dominion, Spess Oil, and a host of other oil and gas companies, alleging that their operation of disposal wells, which are used to inject wastewater that was generated by fracking or other oil and gas recovery operations, caused the earthquake responsible for her injuries. Proceeding under theories of negligence and strict liability, Ladra was one of the first plaintiffs to seek to impose tort liability on an oil and gas operator for injuries associated with induced seismicity, or man-made earthquakes.
Scheduled to go to trial in November, the litigation has traveled a winding path to get to this point, as detailed elsewhere on this very blog in May 2016. Initially, the district court dismissed the case, holding that the Oklahoma Corporation Commission (“OCC”), the governmental body responsible for regulating the oil and gas industry in Oklahoma, should have exclusive jurisdiction over litigation involving oil and gas operators. However, the Supreme Court of Oklahoma reversed and remanded, reasoning that a private tort action regarding potential infringement of an individual’s common-law rights is best adjudicated at the district court level, whereas the OCC’s jurisdiction should be “limited solely to the resolution of public rights.” This was a substantial victory for Ladra and for future induced seismicity plaintiffs; private tort actions against oil and gas companies could proceed before a jury, and at the very least, disposal-well operators would have to settle or defend themselves in court. As Scott Poynter, Ladra’s attorney, said at the time, “It’s really significant because it set the precedent that these cases belong in courtrooms, not at the OCC.”
Then, in June 2017, Ladra reached an undisclosed settlement with Spess Oil, and the claims against the company were dismissed. Poynter characterized the settlement as another victory for his client, who had brought a defendant to the bargaining table and won a sum to help her recover from the earthquake’s damage. Of course, it was something of a win for Spess as well, since the company admitted no fault and avoided a trial that may end up exceeding in cost whatever amount it paid to Ladra. Meanwhile, the claims against the other defendants continue to proceed.
Most recently, the district judge’s decisions on a set of pretrial motions provided the latest boost to Ladra’s case. In a hearing this August, Judge Lori Walkley ruled on a number of discovery motions, resulting in three key outcomes. First, Walkley ruled that New Dominion must turn over documents containing communications between the company and government officials related to the link between wastewater disposal and seismic activity. Poynter believes that these documents will show that New Dominion knew about, and acted in spite of, the risk that its disposal activities might cause damaging earthquakes. Second, Walkley ruled that Austin Holland, who worked as a seismologist for the Oklahoma Geological Survey from 2010 to 2015, may be deposed and his testimony potentially admitted at trial. Holland’s testimony could be crucial – Poynter alleges that Holland was pressured to resign from his job with the state after expressing concerns about the potential seismic dangers of subsurface wastewater disposal. Third, Walkley ruled that Todd Halihan, a professor at Oklahoma State University and former member of the Oklahoma Governor’s Seismicity Council, would not be allowed to testify regarding his work at OSU, but could eventually be called upon to speak to his time on the Governor’s Council, pending future approval. In all, the hearing seemed to represent a big break for Ladra, clearing the way for evidence that would prove New Dominion’s and the other defendants’ wrongdoing.
However, some pumping of the brakes is in order. Aside from the obvious point that the testimony compelled by Judge Walkley’s discovery rulings may not be as incriminating as Ladra and Poynter hope, even if testimony does show that the defendants were aware of the link between wastewater disposal and induced seismicity, this would be insufficient to establish the element of causation, a central and necessary piece of Ladra’s case under either a negligence or strict liability claim. Specifically, under either theory, Ladra would still need to prove that the defendants’ wastewater disposal actually caused the earthquakes that caused her injuries, a daunting legal task. With the abundance of fracking and disposal-well operations in Oklahoma, how might Ladra connect a specific defendant’s specific disposal well to the specific seismic activity that caused the earthquake that hit her home? Moreover, how might Ladra eliminate any number of potentially intervening causes, such as natural seismic activity or the prior condition of her home, either of which might be enough to sever the causal chain? Ladra’s best hope is likely a decision that imposes strict liability on a market-share basis on all disposal well operators who were active in and around Prague at the time of the earthquake in question, but this seems an extreme position for a judge to take in a case that will surely serve as precedent for future induced-seismicity tort litigation.
It is impossible to know what the ultimate result of this fascinating case will be. Will the court find the defendants liable for Ladra’s injuries, opening the floodgates of induced-seismicity tort litigation? Will New Dominion’s arguments regarding lack of proof of causation prove too convincing to overcome? Or will the court avoid a holding that provides any clear answers, leaving the issue unsettled and opening the door to appeals and future court battles? No one knows for sure, but industry observers and Oklahoma residents will be watching closely to see how it all shakes out.
 See Ladra v. New Dominion, LLC, 2015 OK 53, 353 P.3d 529.
 Id. at 530.
 Zach Deaton, Ladra v. New Dominion: Opening the Door to Tort Liability for Earthquake Damage Caused by Energy Companies, Texas Journal of Oil, Gas, and Energy Law Blog (May 8, 2016), http://tjogel.org/ladra-v-new-dominion-opening-the-door-to-tort-liability-for-earthquake-damage-caused-by-energy-companies/.
 Ladra, 353 P.3d at 530.
 Michelle Charles, Oil company settles earthquake damage suit, Stillwater News Press (Jul. 6, 2017), http://www.stwnewspress.com/news/local_news/oil-company-settles-earthquake-damage-suit/article_8281c799-98e9-545b-8519-293a01718aab.html.
 Alex Cameron, Plaintiffs Suing Oil, Gas Companies Gained Access To Critical Evidence, News 9 Investigates (Aug. 15, 2017), http://www.news9.com/story/36143821/plaintiffs-suing-oil-gas-companies-gained-access-to-critical-evidence.
 Mack Burke, Potential landmark earthquake lawsuit moves forward, The Norman Transcript (Aug. 19, 2017), http://www.normantranscript.com/news/oklahoma/potential-landmark-earthquake-lawsuit-moves-forward/article_01ef1061-7360-594c-8ecd-5094738511d5.html.