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Verdict Set Aside in High Profile Pennsylvania Energy Case

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On March 31, 2017, the United States District Court for the Middle District of Pennsylvania issued its much anticipated opinion in Ely v. Cabot Oil & Gas Corp., No. 3:09-CV-2284 (M.D. Pa. Mar. 31, 2017), a case that garnered national attention last March.  The court set aside the $4.24 million jury verdict against Cabot Oil & Gas Corporation (“Cabot”), which “bore no relationship to the facts of the case, the plaintiffs’ own testimony, or the Court’s instructions on the law.”  In doing so, the court agreed 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.”

The plaintiffs’ initial claims for breach of contract, fraudulent inducement, private nuisance, negligence, negligence per se, medical monitoring, and alleged violations of a variety of Pennsylvania environmental laws, were gradually winnowed during the course of the six-year litigation. At the conclusion of the plaintiffs’ case-in-chief, the court granted Cabot’s motion for entry of judgment in its favor on the plaintiffs’ negligence claim because the plaintiffs failed to provide sufficient evidence, particularly in regard to expert testimony.  At the conclusion of the nearly three-week jury trial, the only remaining claim before the jury was the plaintiffs’ allegation that Cabot’s drilling activity was negligent and interfered with and damaged the plaintiffs’ access to water and their enjoyment of their property.  However, rather than providing evidence to support their nuisance claim, the plaintiffs continued to provide evidence unrelated to the sole remaining claim, which “had the effect of repeatedly inviting the jury to engage in unwarranted speculation that was plainly prejudicial to the defense.”

The plaintiffs’ testimony that their water problems began or worsened after Cabot began drilling was overwhelmed by other testimony and evidence.  In addition, the court characterized the testimony offered by the plaintiffs’ expert witnesses as being speculative and based upon weak factual support.  In contrast, Cabot’s experts offered uncontradicted scientific evidence that undermined the plaintiffs’ case.  The failure of plaintiffs’ experts to establish cause and effect left the jury to sympathy and speculation. The court noted that “it is impossible to justify such an extraordinarily high amount based on the limited evidence that was offered in support of any damages awarded at all; it was by any measure excessive.”

As noted by the court, plaintiffs’ counsel failed to “reconcile the case as they imagined it to be with the actual case as borne out by the law and the facts.” Counsel for the plaintiffs also engaged in improper conduct throughout the trial despite the court’s repeated warnings that she was in danger of undermining any award that her clients might receive.  The court’s warnings to plaintiffs’ counsel “were not heeded, and the seeds sown by this trial conduct now bear a bitter fruit for the plaintiffs.”

Click here to view the full opinion.  The parties were ordered to engage in a settlement conference and provide a joint status report on or before June 5, 2017.

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