When was it written?

Everyone deserves a fair hearing.  Even oil companies.

In April 2013 a North Sea oil processing station operated by Chevron was visited by a Health and Safety Inspector.  The inspector determined that the stairway accessing the helideck had become so corroded that it presented a danger to people on the facility.  He issued a prohibition notice under §22 of the Health and Safety at Work Act 1974 (UK), (Act) forbidding Chevron from carrying out certain activities at the station.

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Chevron appealed to the Employment Tribunal at Aberdeen under §24 of the Act.  Subsection 24(2) provides that –

A person on whom a notice is served may within such period from the date of its service as may be prescribed appeal to an employment tribunal; and on such an appeal the tribunal may either cancel or affirm the notice and, if it affirms it, may do so either in its original form or with such modifications as the tribunal may in the circumstances think fit.

On appeal, Chevron sought to rely on an expert report showing that the metalwork posed no threat to personnel.  The English Court of Appeal had previously held in Hague v Rotary Yorkshire Ltd [2015] EWCA Civ 696 that in such an appeal, the Tribunal was limited to considering the evidence available to the Inspector issuing the notice.  Despite this, the Tribunal considered that it was able to consider the later report supplied by Chevron and cancelled the notice.  An appeal by Chevron to the Scottish Court of Session was dismissed.  Chevron appealed to the Supreme Court of the United Kingdom.

For the Supreme Court, Lady Black pointed out that “[t]he appeal is not against the inspector’s opinion but against the notice itself”.  It followed that the Hague case had been wrongly decided and that is was open to the Tribunal on an appeal to consider all the available evidence, including evidence coming to light after service of the notice.

HM Inspector of Health & Safety v Chevron North Sea Ltd [2018] 1 WLR 964

Crimes on the Rails (part 1)

An interesting case came out of Quebec earlier this year regarding a railway disaster.

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On 6 July 2013 a train loaded with crude oil rolled out of control into the Quebec town of Lac-Megantic.  It derailed in the town. Its load of oil exploded.  Part of the town was destroyed and 47 people were killed.  The train’s engineer admitted that when he left the train that night he did not apply enough brakes to fix it in place on a sloping section of railway line.  He also admitted not having conducted a proper brake test.

The engineer was charged with criminal negligence causing death, as were the railway company’s traffic controller and manager of train operations.  Quebec Criminal Code §220 provides that –

Every person who by criminal negligence causes death to another person is guilty of an indictable offence and liable … to imprisonment for life.

The charges were heard in the Quebec Superior Court before Dumas J and a jury of twelve.  In January 2018 each of the defendants was acquitted.  One can infer that the defendants’ admitted carelessness was not considered to be the gross carelessness required by the criminal law.

The Queen v Harding, Labrie and Demaitre (2018), The Globe and Mail, 20 January 2018 and Kingston Whig-Standard, 19 January 2018.

Who are you working for?

Frank Benedetti was employed by Schlumberger Technology Corporation. Pursuant to that employment he worked on an oil well owned and operated by Cimarex Energy Company. On 9 December 2013 he was injured in a work accident. He sued Cimarex in the Canadian County District Court.

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Cimarex as well operator was considered to be immune from suit. The Oklahoma Workers Compensation Code [85 OS 2011 §302(A) and (H)] relevantly provided that –

The liability prescribed in this act shall be exclusive and in place of all other liability of the employer … at common law … for such injury … to the employee … except … where the employer has failed to secure the payment of compensation for the injured employee.

For the purpose of extending the immunity of this section, any operator or owner of an oil or gas well … shall be deemed to be an … employer for services performed at a drill site or location with respect to injured … workers whose immediate employer was hired by such operator or owner at the time of such injury.

The District Court summarily dismissed Benedetti’s claim. His appeal to the Court of Civil Appeals was dismissed. He appealed to the Supreme Court of Oklahoma.

The Supreme Court upheld his appeal. Following Strickland v Stephens Production Co., 2018 OK 6 it found that paragraph (H) was an unconstitutional “special law” breaching Art. 5 §59 of the Oklahoma Constitution

Laws of a general nature shall have a uniform operation throughout the State, and where a general law can be made applicable, no special law shall be enacted.

The case was remanded for further proceedings in the District Court.

Benedetti v Cimarex Energy Co, 2001 OK 21

Fractured and captured

In the leading English case of Bernstein v Skyviews & General Ltd, Griffiths J said “I can find no support in authority for the view that a landowner’s rights in the air space above his property extend to an unlimited height”*. The Superior Court of Pennsylvania seems to have gone in the opposite direction both spatially and jurisprudentially.

Rock Oil
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Briggs owned land in Susquehanna County, Pennsylvania. Southwestern Energy Production Co leased oil and gas rights on an adjoining parcel of land. The company extracted natural gas from below both properties using hydraulic fracturing (“fracking”). Briggs sued the company in the Court of Common Pleas for conversion of natural gas and trespass to land. The Company sought and was granted summary dismissal of the plaintiff’s claim based on the “rule of capture”. The rule of capture says that an owner (or lessee) may extract oil and gas from below ground even when doing so depletes a single reservoir of oil or gas beneath both their own and adjoining land**. The plaintiff appealed.

The Superior Court upheld the appeal and set aside summary judgment. It found that fracking was so different from conventional gas extraction that the rule of capture did not apply –

Traditionally, the rule of capture assumes that oil and gas originate in subsurface reservoirs or pools, and can migrate freely within the reservoir and across property lines, according to changes in pressure. … Unlike oil and gas originating in a common reservoir, natural gas, when trapped in a shale formation, is non-migratory in nature. … Shale gas does not merely “escape” to adjoining land absent the application of an external force. … Instead, the shale must be fractured through the process of hydraulic fracturing; only then may the natural gas contained in the shale move freely

It followed that fracking may be an actionable trespass where subsurface fractures and fracking substances entered the “subsurface estate” of a property and resulted in the extraction of natural gas.  Conceivably this trespass may extend to damage caused by earth tremors if they can be credibly linked to fracking.

Briggs v Southwestern Energy Production Co, 2018 PA Super 79

* [1978] Q.B. 479 at 487.
** Minard Run Oil Co v US Forest Service, 670 F. 3d 236 at 256 (3d Cir. 2011)