United States District Court, D. Colorado
MARVIN BAY and MILDRED BAY, Co-Trustees of the Bay Family Trust, Plaintiffs,
v.
ANADARKO E&P COMPANY LP; and ANADARKO LAND CORPORATION, Defendants.
OPINION AND ORDER DIRECTING BRIEFING
Marcia
S. Krieger, Senior United States District Judge
THIS
MATTER comes before the Court pursuant to the
instructions of the 10th Circuit Court of Appeals
in Bay v. Anadarko E&P Onshore, LLC, 912 F.3d
1249 (10th Cir. 2018). That order vacated the
judgment entered by this Court in favor of the Defendants and
remanded the matter for further proceedings consistent with
the court's opinion.
The
Court assumes the reader's familiarity with the
proceedings to date and the 10th Circuit's
opinion, and the Court will not further summarize them. The
Court is given pause by the 10th Circuit's
discussion of the “material interference”
standard, which requires the Bays to establish that the
Defendants' use of the surface estate “completely
precludes or substantially impairs” the Bays'
ability to make use of the parcel as a whole. 912 F.3d at
1262. The surface owner must show that “surface use
[is] infeasible or nearly impossible under the
circumstances” created by the exploitation of the
mineral estate. Id. at 1261. It is not sufficient
for a surface owner to simply demonstrate that
“inconvenience and some unquantified amount of
additional expense” results from the exploitation of
the mineral estate; rather, the surface owner must show that
it “has no reasonable alternative method to maintain
the existing use” of the surrounding property once
mineral exploitation begins. Merriman v. XTO Energy,
Inc., 407 S.W.3d 244, 252 (Tx. 2013), cited with
approval in Bay, 912 F.3d at 1262. Noting that this
standard presents a “high bar, ” the
10th Circuit expressed some doubt as to whether
the evidence that the Bays had adduced at trial would be
sufficient to satisfy it, but it declined to reach that
question because it had not been raised on appeal.
The
10th Circuit's observation presents a
potential question of legal sufficiency, similar to a
mid-trial motion for judgment as a matter of law pursuant to
Fed.R.Civ.P. 50 that would, if resolved in favor of the
Defendants, ameliorate the need for a re-trial. As such, the
Court believes that it is appropriate to address the issue on
the record created at the September 2017 trial in this
case.[1]
Marvin
Bay testified about farming two plots of land, the North Farm
and the South Farm, both located in Eaton, Colorado. The Bays
grow sugar beets, alfalfa, corn, wheat, and beans on the
parcels in question. The Bays' claims here concern gas
wells that Noble Energy, the Defendants' subcontractor,
drilled on the Bays' property - two on the South Farm and
three on the North Farm - beginning in or around 2006. The
drilling and operation of the five challenged wells has not
prevented the Bays from continuing agricultural uses on both
parcels, and indeed, it appears that the farms remained
operational through the time of trial in 2017. In explaining
how the five wells in question[2] affected his farming operations,
Mr. Bay identified several categories of concerns.
First,
he described some degree of inconvenience that resulted from
farming operations being conducted in the vicinity of the
wells in question. Mr. Bay explained that when he is using
farm equipment and approaches one of the well locations,
“I have to stop, lift up my equipment, back up, go
around the well where I can't cut any crops . . . [and]
start on the other side.” Mr. Bay explained that the
resultant “gap” - that is, the area he is unable
to farm around the well site because he had to lift his
equipment - becomes “a good place for weeds to
grow.”
Second,
he described “compaction, ” that is, a compacting
of soil that results from oil and gas operations. Mr. Bay
explained that compacted soil “will not grow very good
crops, ” but that “as you keep farming [it],
eventually it gets better and better.” Mr. Bay's
testimony seemed to suggest that compaction had occurred
along fence lines that Noble Energy had constructed to
section off its production activities, such that crops near
those fence lines were less healthy than crops elsewhere on
the property. Later, Mr. Bay also described a situation in
which a production vehicle was driven on thawed land,
resulting in compacted “wheel tracks” going out
that particular well location. Mr. Bay estimated that it took
five years before the affected soil could be brought back up
to grade level so that it could be properly irrigated.
Third,
Mr. Bay described a circumstance in which a developer - Mr.
Bay's testimony was not particularly specific as to who,
when, and where - failed to completely restore a mud pit,
leaving a situation where a portion of the property was
“real sticky.” Mr. Bay stated that one of his
center pivot sprinklers traveling over that area “would
sink into that” former pit area and could not be moved.
Mr. Bay stated that he tried to dig the sprinkler out but was
unable to, and that as a result, he would have to “go
in there with a tractor and pull the sprinkler out of the
hole.” Doing so would causing him to “knock[ ]
all the corn down” in the area around that sprinkler.
Fourth,
Mr. Bay complained that soil conditions over flow lines
installed by Noble were “very soft, ” such that,
again, irrigation equipment would sink into the soil and have
to be pulled out. Mr. Bay stated that “we had to pull
it out several times, ” and that, eventually, he
decided to “put rocks and sand in the bottom of the
sprinkler track.” He testified that even this solution
was suboptimal, because if “you knock some of the rocks
out, now you've got these rocks out in your field.”
Fifth,
Mr. Bay indicated that Noble is “supposed to keep the
weeds out” on those portions of property it occupies.
He acknowledged that Noble “send[s] out somebody to
spray weeds” about once a year, but that
“we've got a tremendous bunch of weeds”
around the well locations.
Sixth,
Mr. Bay stated that the South Farm is on hillier property and
that “water can get in the . . . trenches where they
put down the flow lines and run down those and erode the
hillside out some.”
Seventh,
Mr. Bay testified, somewhat unclearly, that “it wastes
some water on the center pivot . . . it gets in the wrong
rows and it runs off the field because of the flow
lines.”
Eighth,
Mr. Bay complained that Noble employees driving down access
roads to get to the wells “knock[ ] out the crop in
about a 15-foot wide strip going out to the wells.”
Ninth,
Mr. Bay explained that the construction of the wells entailed
“lights all time of the night” as well as noises
from vehicles driving out to the well sites and as a result
of other well operations. Mr. Bay also testified that, during
the course of well drilling, there was a “tremendous
amount of diesel” exhaust fumes that was “not a
pleasant thing.” These were problems associated
particularly with one well that were located close to the
Bays' residence on the North Farm. Mr. Bay also testified
...