In the natural-gas fields of Pennsylvania, Cabot Oil & Gas Corp. has had a split week in federal court — winning its motion to dismiss an amended complaint from a drilling company with which it had a contract and losing its argument that plaintiffs should show a heavy burden of proof before starting discovery in a separate case.
In the case filed by Mickel Drilling Partners, a federal judge held that Mickel couldn’t change the operative lease agreement by filing an amended complaint after it had proceeded in the court for the last 18 months with the assertion that a later contract held sway.
In the unrelated case filed by two couples who claim that their water has been contaminated by Cabot’s extraction of natural gas, a federal magistrate judge held that the case can proceed without a Lone Pine order, which would require the plaintiffs to provide prima facie evidence to the court before the discovery process begins.
“The nature of the claims in this case do not compel the derogation of the Federal Rules of Civil Procedure in favor of imposing an extraordinary case management procedure that would force plaintiffs to establish a prima facie case before defendants may be obligated to respond to discovery or otherwise respond to this litigation,” said U.S. Magistrate Judge Martin C. Carlson of the Middle District of Pennsylvania in Roth v. Cabot Oil & Gas.
Cabot had argued for the imposition of a Lone Pine order because it anticipates that discovery will be both time-consuming and expensive, according to the opinion, and it expects that the plaintiffs, Frederick and Debra Roth, will not be able to prove their case.
Carlson, however, sided with the plaintiffs, who argued that Lone Pine orders are typically used in complex, mass-tort and toxic-tort cases, largely as a mechanism for preserving judicial economy.
They were conceived from a 1986 opinion out of the New Jersey Superior Court in Lore v. Lone Pine, in which the court “entered a pretrial order that required the plaintiffs to provide facts in support of their claims through expert reports, or risk having their case dismissed,” Carlson said.
He cited a litany of cases to buttress his holding that Lone Pine orders are used for complex litigation with multiple parties where the “discovery process would be particularly burdensome, and where the plaintiff’s ability to sustain their burden of proof was found to be questionable.” Carlson found neither of those issues present in this case.
Cabot prevailed in the case filed by Mickel, though, when U.S. District Judge A. Richard Caputo of the Middle District of Pennsylvania dismissed the amended complaint from Mickel with prejudice.
“Because plaintiffs represented in their original complaint and in multiple subsequent filings for approximately 18 months after the action was commenced that the October 2008 lease was the operative document in this breach of contract action, I accept as true the allegation that this breach of contract dispute is governed by the terms of the October 2008 lease,” Caputo said in Mickel Drilling Partners v. Cabot Oil & Gas.
In its recently filed amended complaint, Mickel had argued that an earlier lease, from August 2008, actually governed the terms of its agreement with Cabot.
The dispute arose over a $95,925 bonus that Cabot had agreed to pay Mickel, but, importantly, the terms of its payment differ between the August and October contracts, according to the opinion.
“Plaintiffs claim that, on a motion to dismiss, Cabot cannot argue that the August 2008 lease was a draft, and that the court must accept as true plaintiffs’ allegations in the amended complaint that the August 2008 lease is the final signed agreement,” Caputo said.
“While plaintiffs’ premise is generally correct, and the court must ordinarily accept as true the plaintiff’s allegations in deciding a motion to dismiss, the instant matter presents a different issue: whether, on a Rule 12(b)(6) motion, the court must accept as true allegations in plaintiffs’ amended complaint that directly contradict their representations in the original complaint,” he said.
Caputo held that, while a typical case may well present good reason for a contradictory pleading, this case doesn’t fit that description.
“Tellingly, there are no facts pled to explain why, after almost 18 months of litigation, plaintiffs reached the conclusion that this action is governed by a different version of the oil and gas lease,” Caputo said, dismissing the amended complaint and its argument for proceeding under the earlier lease.
Joseph Robert Rydzewski of Spall Rydzewski Anderson Lalley & Tunis in Hawley, Pa., represented Mickel and couldn’t be reached for comment.
Amy Barrette of Fulbright & Jaworski in Canonsburg, Pa., represented Cabot and declined to comment on either case, as did Jose Almanzar of Napoli Bern Ripka Shkolnik in New York, who represented the Roths.
(Copies of the 16-page opinion in Mickel Drilling Partners v. Cabot Oil & Gas, PICS No. 12-2003, and copies of the 17-page opinion in Roth v. Cabot Oil & Gas, PICS No. 12-2004, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •