Robert L. ANDREWS, et al., Plaintiffs Below, Petitioners
v.
ANTERO RESOURCES CORPORATION and Hall Drilling, LLC, Defendants Below, Respondents
Submitted:
January 15, 2019
Syllabus
1.
"In order for a claim for an implied easement for
surface rights in connection with mining activities to be
successful, it must be demonstrated not only that the right
is reasonably necessary for the extraction of the mineral,
but also that the right can be exercised without any
substantial burden to the surface owner." Syllabus point
3, Buffalo Mining Co. v. Martin, 165 W.Va. 10, 267
S.E.2d 721 (1980).
2.
"If the moving party makes a properly supported motion
for summary judgment and can show by affirmative evidence
that there is no genuine issue of a material fact, the burden
of production shifts to the nonmoving party who must either
(1) rehabilitate the evidence attacked by the moving party,
(2) produce additional evidence showing the existence of a
genuine issue for trial, or (3) submit an affidavit
explaining why further discovery is necessary as provided in
Rule 56(f) of the West Virginia Rules of Civil
Procedure." Syllabus point 3, Williams v. Precision
Coil, Inc., 194 W.Va. 52, 459 S.E.2d 329 (1995).
Page 859
Appeal
from the Mass. Litigation Panel, Circuit Court of Ohio
County, The Honorable Alan D. Moats, Lead Presiding Judge, In
Re: Marcellus Shale Litigation, Civil Action No. 14-C-3000
Anthony
J. Majestro, Powell & Majestro, PLLC, James C. Peterson,
Aaron L. Harrah, Hill, Peterson, Carper, Bee & Deitzler,
PLLC, Charleston, West Virginia Attorneys for the Petitioners
W.
Henry Lawrence, Richard M. Yurko, Lauren K. Turner, Amber M.
Moore, Jason W. Turner, Steptoe & Johnson PLLC, Bridgeport,
West Virginia, Ancil G. Ramey, Steptoe & Johnson PLLC,
Huntington, West Virginia, Donald C. Sinclair II, Steptoe &
Johnson PLLC, Wheeling, West Virginia Attorneys for
Respondent, Antero Resources Corporation
Christopher
L. Hamb, Craig S. Beeson, Robinson & McElwee, PLLC,
Charleston, West Virginia, Stephen F. Gandee, Clarksburg,
West Virginia Attorneys for Respondent, Hall Drilling, LLC
William
M. Herlihy, Spilman Thomas & Battle, PLLC, Charleston, West
Virginia, Matthew P. Heiskell, Spilman Thomas & Battle, PLLC,
Morgantown, West Virginia Attorneys for Amici Curiae, West
Virginia Oil & Natural Gas Ass’n, and The Independent Oil &
Gas Ass’n of West Virginia, Inc.
Louis
S. Southworth, Albert F. Sebok, Candice M. Harlow, Jackson
Kelly PLLC, Charleston, West Virginia Attorneys for Amici
Curiae, West Virginia Chamber of Commerce, et al.
OPINION
Jenkins,
Justice:
Page 860
[241
W.Va. 798] This appeal from the Mass. Litigation Panel
("MLP") pertains to ongoing Marcellus shale
litigation and arises from claims asserted by surface owners
of several tracts of land. These surface owners contend that
their use and enjoyment of their land is being improperly and
substantially burdened by horizontal wells being used to
develop the Marcellus shale underlying their
properties,[1] even though the wells are not
physically located on any of their properties. The MLP
resolved the claims based upon property rights arising from
relevant severance deeds, and granted summary judgment in
favor of the defendants below, who are the leaseholder of the
gas and oil estates and the company who is conducting the
drilling. In granting summary judgment, the MLP concluded
that the effects on the surface owners resulting from the
horizontal drilling were within the implied rights to use the
surface granted by virtue of the severance deeds, and did not
impose a substantial burden on the surface owners. Thus, to
overcome summary judgment on this issue, the surface owners
were required to establish the existence of a genuine issue
of material fact as to whether the effects on their surface
estates were reasonably necessary to develop the mineral
estate, or whether such effects substantially burdened the
owners of the relevant surface estates. Having considered the
briefs submitted by the parties and by Amici
Curiae,[2] the appellate record, the oral
arguments presented, and the relevant law, we find no genuine
issues of material fact were established in this particular
case, and we, therefore, affirm the order of the MLP.
I.
FACTUAL AND PROCEDURAL HISTORY
Antero
Resources Corporation and Antero Resources Bluestone, LLC
(collectively "Antero"), Respondents herein, are
engaged in the development of the Marcellus shale in West
Virginia and own numerous horizontal Marcellus shale wells
located in Doddridge, Harrison, and Ritchie
Counties.[3] Antero contracted with Hall Drilling,
LLC ("Hall"), also a Respondent, for the
construction of well pads and roads, well drilling, and the
operation of wells and gathering lines. Relevant to the
instant litigation, Antero has leasehold rights to develop
oil and gas underlying various properties in Harrison County,
including surface properties that are resided on and/or owned
by the Petitioners herein[4] (collectively "Property
Owners").
Page 861
[241
W.Va. 799] Antero’s leasehold rights to develop the subject
oil and gas located in Harrison County derive from severance
deeds, executed in the early 1900s, that retained mineral
rights underlying the properties. The properties belonging to
Robert and Deborah Andrews,[5] Rodney Ashcraft, and Greg
McWilliams are each subject to a severance deed executed in
1905 that reserves mineral rights including,
the right to drill, bore and operate for [oil and gas] at any
time, also the right to use water from said land for the
purpose of said drilling, boring and operating, and the right
at any time to remove all necessary machinery used for the
last named purposes, upon or off said land[.]
These
properties also are the subject of a mineral lease that was
executed in 1984, referred to by the parties as "the
Moran Lease." The express rights granted to Antero in
the Moran Lease include:
[E]xclusive possession and use for the purposes of exploring
and operating for, producing, and marketing oil, gas, natural
gasoline, casing-head gas, condensate, related hydrocarbons,
and all products produced therewith or therefrom by methods
now known or hereafter discovered, of injecting, storing, and
withdrawing any kind of gas regardless of the source, of
protecting stored gas, of injecting gas, air, water, and
other fluids into sands and formations for the purpose of
recovering and producing said minerals or for the purpose of
disposing of waste fluids ... [along with] all other rights
and privileges necessary, incident to, and convenient for the
economical operation of said land alone and conjointly with
other lands for the production and transportation of said
minerals[.]
The
severance deed pertaining to the remaining property subject
to this appeal, the property owned by Robert Siders, was
executed in 1903. It reserved rights to "all the oil and
gas underlying the land herein conveyed together with the
privilege of operating for and Marketing same." A 2001
mineral lease relevant to the Siders’ property, referred to
by the parties as "the Bland Lease," granted rights
to Antero that included
exploring and operating for, producing and marketing oil and
gas, natural gasoline, casing head gas, condensate, related
hydrocarbons, and all other related products, including the
building of roads, laying pipelines and installing equipment
thereon to take care of such products ... [along with] the
privilege of using sufficient water and gas from said
premises to run all machinery necessary for drilling and
operating thereon, and all rights of way necessary to develop
the premises or remove equipment, and related items[.]
Relevant
to this appeal, Antero operates six well pads to facilitate
its horizontal drilling in the Cherry Camp area of Harrison
County.[6] Horizontal drilling allows for the
development of multiple wells from each surface well
pad.[7] Reportedly, five of the six well pads
at issue are located within a range of between .42 mile and 1
mile from Property Owners’ properties. No well pads are
located on any of Property Owners’ land. In addition to the
construction of the well pads, and the drilling and operation
of the horizontal wells,
Page 862
[241 W.Va. 800] the development of the Marcellus shale has
also required the construction and/or operation of well
roads, pipelines, and a compressor station.[8] The hydraulic
fracturing of the horizontal wells also necessitates water
and sand, which are delivered by trucks.[9]
According to Property Owners, the activities of Antero and
Hall in relation to their development of the Marcellus shale
have caused Property Owners to lose the use and enjoyment of
their properties due to the annoyance, inconvenience, and
discomfort caused by excessive heavy equipment and truck
traffic, diesel fumes and other emissions from the trucks,
gas fumes and odors, vibrations, noise, lights, and dust.
In
2013, Property Owners filed a complaint in the Circuit Court
of Harrison County[10] alleging claims for "private
temporary continuing abatable nuisance and
negligence"[11] against Antero and Hall arising from
their "natural gas exploration, extraction,
transportation and associated activities in close proximity
to [Property Owners’] properties."[12] By order entered
on November 25, 2014, this Court transferred the claims to
the MLP where they were designated as the "Harrison
County Cherry Camp Trial Group."[13]
Following
discovery, Antero and Hall each filed motions for summary
judgment. Thereafter, Property Owners filed their response in
opposition to the motions for summary judgment. In their
response, Property Owners voluntarily withdrew their
negligence claim, and, during various hearings before the
MLP, the Property Owners’ counsel repeatedly stated that no
property damage claims were being asserted; [14] this left
only Property Owners’ claim of nuisance to be resolved by
summary judgment. However, the MLP, in its summary judgment
order entered on October 11, 2016, declined to apply
principles of nuisance law, and instead ruled on the summary
judgment motions based upon Antero’s contractual and property
rights. The MLP explained that,
[b]ecause the Court resolves summary judgment based upon
Antero’s contractual and property rights, it does not address
the issues to which common law private nuisance principles
would be applied. The Court, therefore, reaches no conclusion
regarding whether Antero’s actions or its employees’ or
contractors’ actions would otherwise meet the legal
definition of a nuisance.
(Quotations omitted).[15] The MLP also found that
"Antero has leasehold rights to develop
Page 863
[241 W.Va. 801] the oil and gas underlying the properties
that are the subject of [Property Owners’] complaint. Those
development rights were retained by the oil and gas mineral
owners in the severance deeds separating the surface estates
from the mineral estates." Furthermore, the MLP
concluded that "the noise, traffic, dust, lights and
odors of which [Property Owners] complain are reasonable and
necessarily incident to Antero’s development of the
underlying minerals." Therefore, the MLP granted summary
judgment to Antero and Hall. Property Owners then filed a
motion, pursuant to Rule 59(e) of the West Virginia Rules of
Civil Procedure,[16] to alter or amend the judgment,
which the MLP denied by order entered on January 11, 2017.
This appeal followed.
II.
STANDARD OF REVIEW
We have
previously held:
The standard of review applicable to an appeal from a motion
to alter or amend a judgment, made pursuant to W.Va. R. Civ.
P. 59(e), is the same standard that would apply to the
underlying judgment upon which the motion is based and from
which the appeal to this Court is filed.
Syl. pt. 1, Wickland v. Am. Travellers Life Ins.
Co., 204 W.Va. 430, 513 S.E.2d 657 (1998). Because the
judgment underlying the MLP’s Rule 59(e) ruling was the MLP’s
award of summary judgment, this Court’s review is de
novo . See Syl. pt. 1, Painter v.
Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994) ("A
circuit court’s entry of summary judgment is reviewed de
novo ."). Accordingly, we proceed with our plenary
review of this appeal.
III.
DISCUSSION
In
granting summary judgment in favor of Antero and Hall, the
MLP found that "Antero has leasehold rights to develop
the oil and gas underlying the properties that are the
subject of Plaintiffs’ complaint. Those development rights
were retained by the oil and gas mineral owners in the
severance deeds separating the surface estates from the
mineral estates." In view of Antero’s leasehold rights
and the original severance deeds, the MLP concluded that,
[b]ased on its review of the record, the Court concludes
there are no disputed issues of material fact and Defendants
Antero and Hall are entitled to summary judgment as a matter
of law. Antero, as the owner of the mineral estate, and its
contractors have the right to use the Plaintiffs’ surface
estates for the production of its mineral rights. The Court
further concludes that Antero and its contractors have the
legal right to develop the mineral estate. The Court finds
that the activities complained of were reasonably necessary
to the production of the mineral estate and did not exceed
the fairly necessary use
Page 864
[241 W.Va. 802] thereof or invade the rights of the surface
owner[.]
Property
Owners contend that the MLP applied the wrong legal standard
and ignored established rights belonging to surface owners
under West Virginia law. Specifically, they contend that a
mineral owner does not have the right to extract natural gas
using methods that were uncontemplated when the operative
severance deeds were executed, where those uncontemplated
methods are not necessary to the extraction of the minerals
and substantially burden the surface. According to Property
Owners, the MLP impliedly and mistakenly relied on
Quintain Development, LLC v. Columbia Natural Resources,
Inc., 210 W.Va. 128, 556 S.E.2d 95 (2001),[17] to
conclude that the severance deeds constituted an easement and
Antero’s actions could not constitute a nuisance because
their actions did not exceed the scope of the
easement.[18]
Antero
and Hall respond that the MLP applied the correct legal
standards as to the rights of mineral owners vis-à-vis
surface owners under West Virginia law, and correctly
concluded that Antero holds an implied easement to use
Property Owners’ surface estates to the extent reasonable and
necessary to develop its mineral leasehold.
Both
of the severance deeds at issue granted to the mineral owner
the right to produce oil and gas. The 1905 deed granted the
mineral owner "the right to drill, bore and operate for
[oil and gas]," while the 1903 deed retained for the
mineral estate "all the oil and gas underlying the land
herein conveyed together with the privilege of operating
for and marketing same. " (Emphasis added). These
express provisions clearly demonstrate a basic intention by
the parties to the deeds that oil and gas would be extracted
from the mineral estate. On this point there is no
dispute.[19] In general, where a deed severs the
mineral and surface estates and plainly allows for the
extraction of the mineral estate, certain uses of the surface
by the mineral owner are necessarily implied. As early as
1909, this Court held that "[t]he owner of the surface
cannot obstruct the mineral owner from a use of the surface
[that is] fairly useful and necessary ." Syl.
pt. 1, in part, Porter v. Mack Mfg. Co., 65 W.Va.
636, 64 S.E. 853 (1909) (emphasis added). In reaching this
holding, the Porter Court reasoned that, even
[i]f the deed [in question] had not reserved the right to
mine and remove the minerals, there would have been an
implied right to use the surface in such manner and with such
means as would be fairly necessary for the enjoyment of their
estates in the minerals . Without this right, what
account would be the minerals which they reserved?
Id. at 638, 64 S.E. at 854 (emphasis added). See
also Phillips v. Fox, 193 W.Va. 657, 662, 458
S.E.2d 327, 332 (1995) ("It is well-settled that
ownership of a mineral estate includes the right to enter
upon and use the superjacent surface by such manner and means
as is fairly reasonable and necessary to reach and remove the
minerals."); Syl. pt. 1, Squires v. Lafferty,
95 W.Va. 307, 121 S.E. 90 (1924) ("The owner of the
mineral underlying land
Page 865
[241 W.Va. 803] possesses, as incident to this ownership, the
right to use the surface in such manner and with such means
as would be fairly necessary for the enjoyment of the mineral
estate."). See generally 1A Rev. Nancy
Saint-Paul, Summers Oil & Gas � 8:4 at 256 (3d ed.
2015) ("If in the grant or reservation of a separate
interest in oil and gas the grantor does not expressly grant
or retain the rights necessary for the production and
operation of the land for oil and gas purposes, these rights,
such as easement and water rights, are held to be created
by implication ." (emphasis added) (footnote
omitted)). Thus, insofar as vertical wells would have been
the normal method of extracting oil and gas contemplated by
the parties at the time the relevant severance deeds were
executed, it clearly would be a fairly necessary method for
Antero to enjoy the mineral estate it has leased. In other
words, Antero and Hall would certainly be within their rights
to enter Property Owners’ land and drill vertical wells.
However, the instant matter takes the query farther. While
the foregoing cases make clear that a mineral owner
necessarily has the implied right to "use the surface in
such manner and with such means as would be fairly necessary
for the enjoyment of their estates in the minerals,"
Porter, 65 W.Va. at 638, 64 S.E. at 854, they do not
address whether changes in mining methods driven by
technological advancements that, according to Property
Owners, place a greater burden on their surface estates even
in the absence of physical wells being drilled thereupon,
would be "fairly necessary for the enjoyment of"
the mineral estate. Id. [20]
Property
Owners urge that this dispute is resolved by a line of cases
wherein this Court rejected certain uses of surface estates
utilizing advances in technology finding, inter
alia, that such methods were not within the
contemplation of the parties at the time the severance deeds
were executed. However, Property Owners misunderstand the
significance of these cases. Notably, in this line of cases,
the Court considered various deeds that did not expressly
grant the mineral owner a right to destroy the surface, and
rejected methods of removing minerals that caused such
destruction when they did not exist at the time of the
execution of the deed and could not possibly have been within
the contemplation of the parties to the severance
deed.[21]
Page 866
[241
W.Va. 804] The Court addressed this concept in West
Virginia-Pittsburgh Coal Co. v. Strong, 129 W.Va. 832,
42 S.E.2d 46 (1947). In Strong, the mineral owner
sought to strip mine an eight-acre area of the surface
estate. The mineral estate had been severed in a 1904 deed
that also granted
"the right to enter upon and under said land with
employees, animals and machinery at convenient point and
points, and to mine, dig, excavate and remove all said coal,
and to remove and convey from, upon, under and through, said
land all said coal and the coal from other land and lands and
to make and maintain on said land all necessary and
convenient structures, roads, ways, and tramways, railroads,
switches, excavations, air-shafts, drains and openings, for
such mining, removal and conveying of all coal aforesaid,
with the exclusive use of all such rights of way and
privileges aforesaid, including right to deposit mine refuse
on said land and waiving all claims for injury or damage done
by such mining and removal of coal aforesaid and use of such
privileges.
"All of the surface of the said land occupied or used by
the said parties of the second part, or their assigns, above
the level of the Pittsburg #8 vein of coal, for their
operations herein shall be paid for before the same shall be
so used, or occupied, at the rate of One Hundred Dollars per
acre, and said party of the first part, his heirs or assigns
shall execute and deliver a deed therefor, in fee simple,
free from liens and incumbrances [sic], when said surface
shall be taken and paid for."
Id. at 833-34, 42 S.E.2d at 48 (quoting deed). In
concluding that the parties to the 1904 deed did not grant
the right to remove the coal by the process of strip mining,
the Court based its decision in significant part on evidence
that the surface owner did not express any intent that the
surface be destroyed.
This
Court further developed this area of the law by creating a
distinction between injuries or necessary or convenient
burdens upon the surface as opposed to its destruction when
considering what was within the contemplation of the parties
at the time they executed a severance deed. In Oresta v.
Romano Bros., 137 W.Va. 633, 73 S.E.2d 622 (1952), the
Court pointed out that
there is a pronounced practical distinction between an injury
to, or the imposition of a necessary or convenient burden
upon, the surface of land containing coal in or underneath
the surface, each of which may be caused by the mining and
the removal of such coal through and by means of excavations,
tunnels, and passageways beneath the surface, or through and
by means of shafts, borings, slopes, or entries which extend
from an opening on the surface in and to the underlying coal
and are located throughout their entire course and extent
under the surface, and the destruction, the removal, or
the relocation in the mining and the removal of coal, of the
overlying surface which necessarily results in substantial
measure from the use of the presently recognized strip mining
method . See discussion of different types of
coal mining rights in Tokas v. J. J. Arnold Company,
122 W.Va. 613, 11 S.E.2d 759');">11 S.E.2d 759 [ (1940) ]. In the first
mentioned situation, the surface, even when broken or caused
to subside, is damaged, rather than destroyed; but in the
second the surface affected is completely disturbed and is
either destroyed or moved to a place other than that of its
original location. In view of this real and substantial
distinction between an injury to, or a burden upon, the
surface, in substantially its original location, and the
removal of
Page 867
[241 W.Va. 805] the surface from that location, it is
manifest that mining rights which at the time of their
creation are intended to limit, regulate and govern
operations and methods which are carried out or engaged in
chiefly in the coal and beneath the surface, do not apply to,
cover, or permit the removal or the relocation of ...