FABER, Senior District Judge:
The plaintiffs below, Martin and Lisa Whiteman (Whitemans), appeal from a final order of the United States District Court for the Northern District of West Virginia that granted summary judgment to the defendant, Chesapeake Appalachia, L.L.C. (Chesapeake), upon the Whitemans' claim for common law trespass. We find no error in the district court's decision and affirm for the reasons that follow.
The Whitemans own the surface rights to approximately 101 acres in Wetzel
JA at 95, 99. Notably, the severance deeds neither reserve any specific surface rights to the mineral estate owner nor mention permanent waste disposal resulting from mineral extraction.
Today, the Whitemans live on and farm their 101 acres, primarily raising sheep and, relatedly, using part of the land to produce hay for the sheep. See JA at 22-23. Conversely, Chesapeake operates three natural gas wells on approximately ten acres of the Whitemans' property that was formerly used for hay production. JA at 22, 417. The Whitemans can no longer produce hay on those ten acres because Chesapeake's well operations and permanent drill waste disposal on the surface have rendered that portion of the Whitemans' property unusable for any suitable purpose.
Nevertheless, for each of their gas wells located on the Whitemans' surface property, Chesapeake obtained valid well work and pit waste discharge permits from the West Virginia Department of Environmental Protection (WVDEP). JA at 227, 237, 241, 608. As part of the permitting process, Chesapeake gave the Whitemans notice of Chesapeake's intent to drill and dispose of drill waste in on-site waste pits. See JA at 230, 244, 246. Chesapeake attached its WVDEP application for well work and pit waste discharge permits to the notice it gave the Whitemans. JA at 232, 247. The permit application included spaces for Chesapeake to describe anticipated pit waste as well as proposed disposal methods. Id. On each permit application, Chesapeake listed anticipated pit waste to include drill water, frac blow back, and various formation cuttings.
After the permitting process was complete, Chesapeake began drilling. While drilling on the Whitemans' property, Chesapeake used a water-based drilling fluid, known in the oil and gas industry as "mud,"
The pit or "open" system of drill waste disposal was the common method employed in West Virginia at the time the wells were drilled on the Whitemans' property, although alternative disposal methods were used in other areas of the country. See JA at 119-20, 322, 703. One such alternative is a "closed-loop" system. The closed-loop system of drill waste disposal is a relatively recent development in the oil and gas industry. Under the closed-loop system, drill cuttings and other waste are removed from the well site and placed in off-site landfills. See JA at 116. Closed-loop systems have some advantages over on-site disposal. They better preserve expensive drilling mud for future drilling operations, eliminate the possibility of a pit failure, and create a smaller drilling operation footprint at a well site. See JA at 116, 120, 572. Nevertheless, closed-loop systems are expensive and often cost $100,000 or more per well than open systems, depending on the well location. See JA at 120, 130. Chesapeake began using the closed-loop system in some of its Oklahoma and Texas operations in 2004 and 2005, and, in December 2009, began preparing to implement the system in West Virginia. See JA at 112, 119.
The Whitemans have admitted that, at present, their monetary damages are "trivial" and "not real significant." JA at 628. Indeed, the only expert testimony offered in the case regarding the value of the Whitemans' land opined that Chesapeake's drilling operations caused no diminution in value thereto. See JA at 267. Rather, the core of the Whitemans' prayer for relief is vindication of their right to exclude others from their land and affirmative injunctive relief to remove the waste pits in order to alleviate the Whitemans' fears of possible future liability that might stem from the waste pits. See JA at 421, 628, 629.
This civil action was filed originally in the Circuit Court of Wetzel County, West Virginia, and removed to federal district court on the basis of diversity of citizenship under 28 U.S.C. § 1332(a). The Whitemans are citizens and residents of West Virginia; Chesapeake is an Oklahoma corporation with its principal place of business in Oklahoma. JA at 21. The amount in controversy exceeds $75,000.
In reviewing a grant of summary judgment, we apply de novo the same standard that the district court was required to apply for granting the motion for summary judgment. Ray Commc'ns, Inc. v. Clear Channel Commc'ns, Inc., 673 F.3d 294, 297 n. 1 (4th Cir.2012). Specifically, summary judgment is warranted if, from the totality of the evidence, including pleadings, depositions, answers to interrogatories, and affidavits, the court believes no genuine issue of material fact exists for trial and the moving party is entitled to judgment as a matter of law. See Rule 56(c) of the Federal Rules of Civil Procedure; Sylvia Dev. Corp. v. Calvert Cnty., Md., 48 F.3d 810, 817 (4th Cir.1995). When an appeal arises from a grant of summary judgment, the reviewing court must view the evidence, and draw all reasonable inferences therefrom, in the light most favorable to the non-moving party. See Laing v. Fed. Exp. Corp., 703 F.3d 713, 714 (4th Cir.2013).
The substantive legal issue before the court on appeal is whether Chesapeake's permanent disposal of drill waste upon the Whitemans' surface property is "reasonably necessary" for the extraction of minerals.
As noted above, the district court below granted summary judgment in favor of Chesapeake as to the Whitemans' common law trespass claim only.
In Marvin, a surface estate owner sought, among other things, to enjoin a mineral estate owner from mining underneath the surface estate owner's land. Marvin, 1874 WL 11019, at *2. The surface estate owner complained that the mineral estate owner had, among other things, deposited "ore and rubbish" (from the mines) along the front and atop the surface estate owner's land. Id. at *3. The lower court in Marvin concluded, as a matter of law, that although the mineral estate owner had a right to enter the surface estate owner's land to mine, the mineral estate owner had "no right to deposit or keep upon [the surface estate owner's] lands any ... refuse stuff or rubbish." Id. at *4. Accordingly, the lower court ordered that the mineral estate owner be enjoined from further waste disposal on the surface estate owner's land and that the mineral estate owner remove mine waste that the mineral estate owner had already deposited on the surface. Id. at *5. The New York Court of Appeals reversed the lower court as to this conclusion of law, among others, and sent the case back for a new trial because the Court of Appeals believed the lower court failed to consider whether depositing mine waste on the surface was "necessary to be done for the reasonably profitable enjoyment" of the mineral estate owner's property in the minerals. Id. at *17. More specifically, the Court of Appeals held that a mineral estate owner may not claim, as incident to the grant of the mineral estate itself, "that which is convenient [but] only that which is necessary, but may have that in a convenient way." Id. at *10. In other words, the court
If not earlier, the West Virginia Supreme Court of Appeals cited Marvin with enthusiastic approval in both Porter v. Mack Mfg. Co., 65 W.Va. 636, 64 S.E. 853 (1909) and Squires v. Lafferty, 95 W.Va. 307, 121 S.E. 90 (1924),
In Porter, the mineral estate owner sought to mine clay and other minerals and carry them off using a tram road he proposed to build on the surface estate owner's property, but the surface estate owner obstructed. See Porter, 64 S.E. at 853. In Squires, the mineral estate owner sought to drill test holes and transport machinery and men over the surface estate owner's property, but the surface estate owner went so far as to lock the mineral estate owner's access gate and then assault the mineral estate owner's employee that forced passage. Squires, 121 S.E. at 90. In both cases, the West Virginia Supreme Court of Appeals ruled in favor of the mineral estate owner, finding the building of a tram road across the surface estate owner's property "fairly necessary" to enjoying the mineral estate in Porter, and finding the drilling of test holes and transport of machinery and men across the surface "fairly necessary" in Squires. Notwithstanding their dissimilarity to this case, Porter and Squires enshrine the overarching principle that, incident to mineral estate ownership, a mineral estate owner in West Virginia has a right to use the surface "in such manner and with such means as would be fairly necessary" to enjoy the mineral estate. Moreover, both Porter and Squires demonstrate that the application of such a principle is necessarily fact-intensive, just as the New York Court of Appeals said in Marvin. See Marvin, 1874 WL 11019, at *9. The "fairly necessary" standard from Porter and
In Adkins v. United Fuel Gas, a surface estate owner brought a trespass claim against the mineral estate owner for damages caused by the mineral estate owner's gas drilling operations on the surface owner's land.
After it had completed drilling the gas well, the mineral estate owner removed one gas pipe, drained the ditches and covered them over, leaving the permanent gas pipe just under the surface. Id. As to the "reasonable necessity" of the mineral estate owner's use of the surface, the court in Adkins held:
Id. at 636. In other words, the court in Adkins did not change the "reasonable necessity" standard. Rather, it simply applied the standard, as it always had before, to a set of facts unique to the case in Adkins.
Perhaps the most recent and comprehensive scrutiny of the "reasonable necessity" doctrine, however, occurred in Buffalo Mining Co. v. Martin, 165 W.Va. 10, 267 S.E.2d 721 (1980). There, as in Porter and Squires, a mineral estate owner sought to enjoin the surface owner from interfering with the mineral estate owner's mining operations. Specifically, the mineral estate owner endeavored to construct a power line necessary to ventilate a coal mine located under the surface
Buffalo Mining, 267 S.E.2d at 725-26 (emphasis added).
Although Buffalo Mining involved a severance deed more detailed than those presented here, its holding nevertheless harmonized the "reasonable necessity" standard as it applies to two divergent types of conflict between mineral estate owners and surface estate owners. The first involves conflicts where the mineral estate owner engages in activity that disturbs, perhaps permanently and negatively, the surface. See Adkins v. United Fuel Gas Co., 134 W.Va. 719, 723, 61 S.E.2d 633, 635 (1950) (cutting ditches through surface owner's farmland, permanently burying a gas pipeline used for gas drilling, and spilling oil and oily water on surface owner's crops); Squires v. Lafferty, 95 W.Va. 307, 121 S.E. 90 (1924) (drilling test holes on surface and transporting machinery and men across the surface); Porter v. Mack Mfg. Co., 65 W.Va. 636, 64 S.E. 853 (1909) (construction of tram road on surface to transport minerals). The second involves conflicts where the mineral estate owner engages in activity that "virtually destroy[s]" the surface or is otherwise "totally incompatible with the rights of the surface owner." Buffalo Mining, 267 S.E.2d at 725; see Brown v. Crozer Coal & Land Co., 144 W.Va. 296, 107 S.E.2d 777 (1959) (refusing to construe a severance deed to allow "auger mining," which had resulted in slippage of the surface sufficient to uproot trees, toss boulders, and divert streams); W. Virginia-Pittsburgh Coal Co. v. Strong, 129 W.Va. 832, 837, 42 S.E.2d 46, 50 (1947) (refusing to construe a severance deed to allow "strip mining" and reasoning that "if the owner of the surface has a proprietary right to subjacent support ... he has at least an equal right to hold intact the thing to be supported, i.e., the surface."). Buffalo Mining's articulation of "reasonable necessity without substantial burden" generally allows the first set of surface uses, when "reasonably necessary," as implicit to a grant of a mineral estate because the surface generally incurs no "substantial burden." Conversely, the second set of surface uses will generally be disallowed as implicit to a grant of a mineral estate; the burden of such uses on the surface is generally so substantial that an explicit deed provision will usually be required.
Before Buffalo Mining, the "reasonable necessity" doctrine simply did not discern
The court below acknowledged that the severance deeds in question did not address the issue of use of the property surface to store drill cuttings and other waste but nevertheless found such right to be created by implication as a reasonably necessary incident to creation of a gas well. The Whitemans advance several arguments as to why the lower court's conclusion was erroneous. We address each separately.
As a threshold matter, the Whitemans essentially argue that Chesapeake had a burden to show its use of the surface was reasonably necessary and did not impose a substantial burden upon the surface, that Chesapeake "failed utterly to develop a record" to support such a showing, and that the court below erred in granting Chesapeake summary judgment as a result. See Appellant Br. at 9, 20. The Whitemans apparently rely, in part, on Buffalo Mining, and no other authority, to support this argument. See id. at 21 (stating "Chesapeake is subject to Buffalo Mining Company's `exacting' test in which it must show both necessity and the absence of a substantial burden on the surface."). The Whitemans miss a fundamental distinction between this case and Buffalo Mining concerning which party would carry the initial burden of proof at trial. As with any ordinary tort claim, the plaintiff must make an affirmative showing of a prima facie case; the defendant need neither affirm nor rebut anything. See Rhodes v. E.I. du Pont de Nemours & Co., 636 F.3d 88, 94 (4th Cir.2011) cert. denied, ___ U.S. ___, 132 S.Ct. 499, 181 L.Ed.2d 347 (2011) (noting that common law trespass "require[s] that a plaintiff establish that the defendant's conduct produced some `injury' to the plaintiff or to the plaintiff's property.") (citing Hark v. Mountain Fork Lumber Co., 127 W.Va. 586, 34 S.E.2d 348 (1945)).
In Buffalo Mining, as noted above, the plaintiff was a mineral estate owner seeking to enjoin the surface owner from interfering with the mineral estate owner's mining operations. Buffalo Mining, 267 S.E.2d at 722. In other words, the mineral estate owner claimed the surface estate owner was interfering with the former's incidental property rights associated with its grant of the mineral estate. Accordingly, as the plaintiff, the mineral estate owner in Buffalo Mining had the initial burden
Relatedly, the Whitemans argue that the court below failed to analyze the burden that Chesapeake's drilling operations imposed on the surface. Appellant Br. at 38-39. Again, the burden to prove unauthorized entry or use in trespass is on the plaintiff. Nevertheless, the record below supports a finding that the drill waste pits do not impose a substantial burden on the Whitemans' surface property. One of Chesapeake's experts opined that the drill waste pits have not affected the Whitemans' property value at all. JA at 267. The Whitemans failed to rebut this expert opinion, offering none of their own to evaluate the risk that the drill waste pits in this case might slip or break. See Appellee Br. at 8. The only evidence the Whitemans presented regarding potential future liability arising from the drill waste pits was the subjective fear of Lisa Whiteman. See JA at 421. Moreover, counsel for the Whitemans at oral argument below remarked that any pecuniary loss caused by the drill waste pits was minimal. See JA at 628. Martin Whiteman himself stated that any injury to the Whitemans' land that Chesapeake's entire drilling operation might have caused was limited to ten acres. JA at 264.
The Whitemans reply that no expert is needed to prove a common law trespass claim. Appellant Reply Br. at 21. We agree. However, sufficient evidence, at least a preponderance, is needed to prove trespass. The Whitemans simply failed to present sufficient evidence to show that Chesapeake's drill waste pits imposed a "substantial burden" on the surface. Absent that showing, the Whitemans could only satisfy the "unlawful authority" prong of common law trespass by proving Chesapeake's surface use was not "reasonably necessary" to their gas drilling operation. The Whitemans failed in that regard as well.
Regarding "reasonable necessity," the Whitemans first contend that Chesapeake's disposal of waste on-site was not reasonably necessary to operate its wells because an alternative method of disposal, the closed-loop system, was available. See Appellant Br. 4, 20, 23, 25. We disagree. There simply is no support for the Whitemans' implication that "reasonable necessity" amounts to "necessity," otherwise the modifier "reasonable" would be meaningless.
The two wells on the Whitemans' property were drilled between 2007 and 2009. At that time, the closed-loop system was a relatively new method of drill waste disposal. Chesapeake had begun to use the closed-loop system in Texas and Oklahoma beginning in 2004 and 2005, but did not employ it in West Virginia until December 2009. When the Whiteman wells were
Third, the Whitemans argue that the trial court confused the requisite "reasonably necessary" standard with a "reasonableness" standard, thereby applying a less rigorous rule than the law requires. See Appellant Br. at 9, 18. We need only refer to the specific language of the trial court's opinion to conclude that this argument of the Whitemans is misplaced. The trial court articulated the correct standard as follows:
JA at 754.
Fourth, the Whitemans contend that the district court relied on irrelevant state regulations and statutes. See Appellant Br. at 9, 28-30. While the Whitemans are correct in their assertion that West Virginia's regulatory scheme does not create a
Finally, the Whitemans claim the court below quoted and emphasized a 2008 mineral lease between the Whitemans and covered a separate one-acre tract from the ten acres involved here and gave Chesapeake "such exclusive rights as may be necessary or convenient" in its gas production activities. While the court below did refer to that lease in its opinion, the court also made clear that the one-acre lease, including its expansive language, is not relevant to the present case. The standard applied by the trial court, as noted above, was one of reasonable necessity; convenience did not enter into the court's calculation.
For all these reasons we conclude the district court was correct to hold that creating drill waste pits was reasonably necessary for recovery of natural gas and did not impose a substantial burden on the Whitemans' surface property, that creation of the pits was consistent with Chesapeake's rights under its lease, was a practice common to natural gas wells in West Virginia, and consistent with requirements of applicable rules and regulations for the protection of the environment. Accordingly the decision of the district court is
AFFIRMED.