First Fracking Verdict in U.S. History

Plaintiff Awarded $2.9 Million:  Post-Trail Motions and Appeal Certain

Charles Sartran of the Energy & the Law blog discusses what is being characterized as the "first fracking verdict in U.S. History." 

Background: 

[A] Texas jury awarded $2.9 million to landowners in a case involving alleged hydrocarbon exposure due to hydraulic fracturing operations. Here is the jury verdict. The Parrs sued Aruba Petroleum, alleging that drilling and frac[k]ing at Aruba’s 22 wells located within two miles of the Parr’s 40-acre property in Wise County was making them sick. They alleged a wide array of health issues, including nose bleeds, irregular heartbeat, muscle spasms, and open sores, all of which were allegedly caused by hazardous gases and airborne chemicals emanating from Aruba’s well sites.

Outcome:

The case proceeded to the jury only on the nuisance claim. The award, for intentionally creating a private nuisance, comprised $275,000 for loss in property value, $2 million for past pain and suffering, $250,000 for future pain and suffering, and $400,000 for past mental anguish. The jury did not find evidence of the malice necessary to justify an award of punitive damages.

In my Environmental Dispute Resolution course, we spend a 2-hour class period discussing fracking, as well as the power landowners gain against developers when they collaborate in the negotiation for shale gas recovery.  

The fracking process is explained in this industry video.

Several videos on YouTube describe the risks of the fracking process to adjacent landowners and aquifers.  I found them compelling, but I admit that I have not spent enough time in the industry to developed an informed opinion.  Links to the videos are here, here, here, here, here, and here.  You can also find industry dismissal of the risks here.

My concern is that production outpaces what we know about the long-term risks to human health.  

May 1, 2014 Update:  New York Times op-ed piece discussing pros and cons of shale gas development here.  Authors Michael Bloomberg and Fed Krupp argue:

Strong rules and enforcement are critical. And, as one of us, Fred Krupp, describes in the current issue of Foreign Affairs, states are beginning to take action. Texas has imposed tough standards for well integrity, a key to groundwater protection. Wyoming has set strong requirements for water testing before drilling begins. Ohio is emerging as a leader in reducing air pollution from leaky oil and gas equipment. And in February, Colorado became the first state to directly regulate methane emissions from oil and gas operations — a huge step forward.

ADR and the BP Gulf Claims Facility

Using ADR to Compensate Victims of Environmental Catastrophes

In my Environmental Dispute Resolution course, I devote one class to a discussion of the claims facilities used in the 9/11 terrorist attacks and the BP Gulf Coast oil spill disaster.  The facilities attempted to handle the inevitable claims arising from these traumatic events in an organized way that allowed expeditious handling of the claims outside of litigation.  Both adopted a form of arbitration.  

If well designed, these facilities could also enhance procedural justice for claimants --  voice, careful consideration of the facts by the neutral, impartiality by the neutral, and respectful and dignified treatment of claimants.

Updating the Story

An article in The New York Times today updates the status of the Gulf Coast claims facility.    

The Times describes the spill this way:

The oil rig fire and the nearly unstoppable fountain of oil that followed at the Macondo Prospect on April 20, 2010, was the largest marine oil spill in the nation’s history. The oil poured into the gulf for 87 days, fouling an estimated 68,000 square miles of waters and almost 500 miles of coastline from Louisiana to Florida.

The spill released approximately 210 million gallons of oil.

BP, its reputation damaged and facing administrative penalties, criminal prosecution, and vast class action lawsuits, agreed to create a process designed to handle the civil claims for damages. With time, the agreement governing the Gulf Coast claims facility morphed into a 1,000-page document entitled the 2179 Economic and Property Damage Class Action Settlement Agreement.  

BP's Buyer's Remorse

Increasingly, BP has had buyer's remorse as the tab for the civil liability associated with the spill has grown from a predicted payout of  $7 billion to an estimated pay-out of $ 19.5 billion.  The Times explains:

A central element of the agreement . . . would prove to be a time bomb. Instead of having claims calculators contend with different kinds of arguable evidence to prove that damage was linked to the spill, the negotiators came up with a formula that relied solely on financial data for proof of harm. If a business was in a certain region and could prove that its income dropped and rose again in a specific pattern during 2010, that would be enough to establish a claim.

This liberal test has brought a "frenzy" of claims.  

BP has unsuccessfully challenged in federal court the administrator's interpretation of the agreement.  Its lawyers also sought greater oversight of possible fraud in the claims handling process.  The supervising judge called in Freeh Group, a firm headed by Louis J. Freeh, the former F.B.I. director, to investigate. Freeh issued a 98-page report finding some problems, but not a vast system of corruption.  More recently, BP began appealing one in five claims awards under the appeals provisions of the settlement agreement.

ADR Expert Expresses Dismay

Kenneth Feinberg, who spoke to our students last year, served as the administrator of the 9/11 Victims Compensation Fund and as the first administrator of the Gulf Coast claims facility. 

The Times quotes him expressing "dismay" that the problems associated with the Gulf Coast claims facility “too easily lead[] to the conclusion that an alternative resolution doesn’t work, and in an oil spill you’re better off with an Exxon-Valdez, decades-of-litigation approach. That’s a real public policy missed opportunity.”

Exxon Valdez Spill

Feinberg references the March 24, 1989 accident in which the Exxon Valdez ran aground, tore its hull, and spilled 11 million gallons of oil into the Alaska's Prince William Sound. Until the BP spill, the Exxon Valdez accident was seen as the biggest environmental disaster in U.S. history. 

In 1989, only a few law schools were beginning teach ADR principles, skills, and values, most notably the University of Missouri Law School under the leadership of Len Riskin.  

Accordingly, the court adopted the best known approach to mass torts. It approved a class consisting of 32,000 fishermen, Alaska natives, landowners, and others whose livelihoods were gravely affected by the disaster. Lawyers for this class have explained the history of the litigation:

• A class action jury trial was held in federal court in 1994. The jury returned an award of $5 billion in punitive damages. 

• In 2001, the Ninth Circuit Court of Appeals ruled that the original $5 billion punitive damages verdict was excessive. 

• In 2002, U.S. District Court Judge H. Russell Holland reinstated the award at $4 billion. Judge Holland stated that, “Exxon officials knew that carrying huge volumes of crude oil through Prince William Sound was a dangerous business, yet they knowingly permitted a relapsed alcoholic to direct the operation of the Exxon Valdez through Prince William Sound.” 

• In 2003, the Ninth Circuit again directed Judge Holland to reconsider the punitive damages award under United States Supreme Court punitive damages guidelines. 

• In January 2004, Judge Holland issued his order finding that Supreme Court authority did not change the Court’s earlier analysis. 

• In December 2006, the Ninth Circuit Court of Appeals issued its ruling, setting the punitive damages award at $2.5 billion. 

• Subsequently, [in 2008,] the U.S. Supreme Court further reduced the punitive damages award to $507.5 million, an amount equal to the compensatory damages. With interest, the total award to the plaintiff class was $1.515 billion.

In short, class action claimants waited over 20 years to reach this litigated resolution.  One environmental organization called it a "historic legal battle." 

Most of my students would have been toddlers when the accident happened. 

So, back to my first paragraph.  These claims facilities must be well-designed.  The Gulf Coast claims facility will offer new lessons for future designers about when this alternative approach makes sense.

So far, the federal courts have backed the process and shown overall confidence in the current administrator, Patrick Juneau.   

May 9, 2014 Update: More on BP's challenges of certain claims here. 

Stories of Success Among Grads of Lower Ranked Schools

Some Balance to the Gloom and Doom Stories

Brian Leiter, ABA Top 100 Blawger, has shared a conversation among graduates of lower tiered schools here. The conversation started with this question:

cheapbrass (Apr 18, 2014 - 2:53 pm)
If you are a tier 2 or below grad...and are somewhat successful ($100k+ salary) post here. how far out of school you are and your firm size, or if you are a solo, partner, or associate. Me first: Tier 3, 10+ years out, firm size 5-10, forever associate.

The comments, largely stories of success, mirror the stories I hear from most of the alumni of ASL.  

If you have your own stories of success, feel free to post them in the comments to this blog.   

Trust: Breach and Repair

Trust: Breach and Repair

The Nature of Trust

Three elements contribute to the level of trust one has for another:

• The individual’s chronic disposition towards trusting others;
• Situational parameters; and
• The history of their relationship. 

Two general categories of trust exist:

• Calculus-based trust: Grounded in the fear of punishment for violating trust and in the rewards to be derived from preserving it.

• Identification-based trust:  Based on the identification with the other person’s desires, goals, and intentions.  It exists because the parties can effectively understand and appreciate one another’s wants. 

Rebuilding Trust:

Re-establishing trust, once breached, is very difficult.  

“In conflict, trust is broken, cruel words are spoken, friendships dissolve, love turns to hate, and hate into revenge.” 

“Trust is rebuilt not by focusing on what the other person did or did not do, but on improving one’s own behaviors, increasing one’s trustworthiness, and being congruent – not just in words and promises, but in actions, attitudes, and character.  It depends on integrity and authenticity.”

Former adversaries can rebuild trust by:

• Treating each other with unconditional respect.

• Listening deeply and sincerely, especially to criticism.

• Expressing empathy for the other person, even if the other party does not listen or empathize in return.

• Speaking openly and honestly about problems and failures, especially one’s own.

• Being sincere and unlimited with apologies, as with criticisms.

• Negotiating clear boundaries and respecting those established by others, even when others do not respect them in return.

• Supporting participation and teamwork, empowering others, and making decisions collaboratively.

• Agreeing on vision, shared values, and goals, and acting on them.

• Acknowledging interests and being flexible regarding solutions.

• Being willing to sacrifice something important to aid a former opponent or to achieve a higher goal.

• Participating in social interactions and sharing information about each other’s personal lives.

• Being consistent and dependable in crisis and hard times.

These recommendations are easier to list than to implement.  Yet, doing so leads to personal growth and learning.  

And, even if your opponent continues to distrust you, by adopting these behaviors you can restore balance into your own life centered in positive intention, and even love, but certainly respect for yourself and for others.  

April 29, 2014 Update:  The blogger at The Legal Watercooler provides an interesting discussion of trust breach and repair through the lens of the show Mad Men.  I just started the sixth season on Netflix last night.  So, I am watching Don Draper's acts of breach of trust. I'm anxious now to learn how he goes about repairing that trust.  

Ill-Considered Rush To Re-Design Legal Education?

Protect Experiential Learning in Law School -- Let the Market Solve the Problems

Two well-respected legal scholars, who also write frequently about how to teach law, offered an op-ed piece in The New York Times, entitled: Don't Skip on Legal Training.  Erwin Chermerinsky and Carrie Menkel-Meadow open the conversation by providing this context:

Legal education, like all education, can certainly be improved, but the widely made claims of a “crisis” are exaggerated and do not reflect the contributions legal education makes to achieving justice and well-being for many in the world. In January, an American Bar Association Task Force on the Future of Legal Education declared that it had rushed to release its report because “the urgency of the problem and the serious threats to public confidence demanded rapid action.” This crisis mentality is not only unfounded, but is also creating pressure for reforms that would make legal education worse, not better.

The claims of imminent catastrophe always focus on three things: the problematic job market for law graduates, the increased cost of legal education, and the decrease in applications for law schools.

The authors then briefly discuss these three components of the current market for legal education.  I have tracked the information about all three topics in many of my blog postings, and these authors provide a credible synthesis of each topic.  

Next, they turn their attention to proposed reforms of legal education, by saying: "Our chief concern is that the claims about a crisis in legal education will be the impetus for reforms that will do more harm than good."

They focus their discussion on two proposals:  

• Reducing the undergraduate education required to take the bar exam; and
• Reducing law school to a two-year program.

They call the second proposal a "terrible idea."  They back up this opinion with several paragraphs of argument starting with this:

The profession needs law schools to produce lawyers who are better prepared to practice law, not less well trained. That would be impossible in two-thirds of the time. If law school were of just two years’ duration, the first things to be cut would be clinical education and interdisciplinary courses, which are the best innovations since we went to law school in the 1970s.

This proposal worries me, too.  Yes, we will still find ways to cram the doctrinal law into the brains of students in a two year program, but the experiential, skill-building components of the curriculum will fall away.   Moreover, proponents of the two-year curricular program apparently assume that new graduates will find practice mentors after law school.  Yet, we also hear that law firms want more practice-ready graduates. 

Here's my guess: If I asked any of our very busy second semester 3L students if they would want to sacrifice the learning they have experienced during their last year, most of them would say "no."

Most of my colleagues have 10 or more years of private practice experience, so we have been teaching practical skills in our courses long before it became a topic of conversation.   

While our students would want to avoid the expense of a third year of law school, I expect most of them have enjoyed the opportunity to put theory into practice.  In fact, as we have offered my summer and intercession courses, many students are taking additional courses, not required to graduate, because they find them useful to future career plans. 

I see the market responding to all three concerns that the reformers identify: jobs, cost of education, and decrease in applicants.  In a few more years (many say by 2016 or 2017) legal jobs and graduates will equalize.  As more potential applicants wait for that day, the current applicants to law school are benefiting from trimmed tuition costs or increased scholarship money.  I've blogged on these topics previously.   

Creating Your Purpose

Then, Living with Purpose

Tom Asaker, who blogs on business and marketing, takes a look at the difference between finding your purpose and creating it.

He says:

[P]urpose isn't discovered.
It's created.
It isn't a carefully considered and crafted image.
It's a bold statement.
A way of believing and behaving that grows and evolves and enhances people's lives.
Purpose isn't something we pull out of our brands.
It's something we passionately build into them.
Out of our experiences and values.

                            * * *

Purpose means progress.
It's movement towards a more ethical and meaningful way of being.
Purpose creates a new world.

I teach at a purpose-driven school.  We exist to create opportunities for Appalachians who are often the first member in their immediate families to attend college or professional school.  On to that purpose, we have layered  our commitment to community service and to producing graduates who will return to their communities to provide leadership and public service.  Add to that, our purpose of changing the problem-solving paradigm by teaching students Alternative Dispute Resolution, while continuing to offer courses that will make them fearless courtroom advocates.

More recently, we have built a Natural Resources Law program that rivals any program east of the Mississippi River.  In doing so, we mindfully created a program that encouraged broad discussions from many points of view about coal, fracking, renewable energy, and environmental issues surrounding any decision we make in this area of law and policy.  These conversations can be lively.  Many of our students have family members who have worked in coal production.  One of our first students was a disabled coal miner.  We have graduates working for gas production companies.  They bring their work experiences back to campus during some of these classroom conversations.

My Dean gave me a great opportunity to bring several aspects of our school's purpose together in my Environmental Dispute Resolution course.  I am teaching it for a second year.  The students are learning group facilitation/consensus building skills, values, and processes.  We focus on several difficult local issues, most recently whether to site a wind farm on a ridge of the Appalachian Mountains about an hour from campus.

In that simulation, I have used 2L students to serve as neutral fact-finders for the 3L students in the course. Those 2Ls have given presentations on the risk of wind farms to crop dusters, bats, and birds.  They have discussed the risks of wind farms to cultural sites, to aviation safety, and to communication systems, including TV, radio, cellular, and aviation radar.  Most recently, two students discussed the economic impact of the proposed wind farm on the local tax base, tourism, and property values.

Last week, we talked about the difficulty of holding all this information "gently" while the group begins to see how all the puzzle pieces might fit together.

Last year, students gave the course good evaluations.  This past Thursday, this year's students provided evaluations.  I hear several of them provided long written comments.  I look forward to reading them after I submit grades for the course.  I want to make the course better because it expresses my purpose for teaching and it expresses the purpose of my little mission-driven school.

Photo: 2013 students listening to a presentation about the archaeological, historic, and Native American cultural sites in the area.

A Mother's Love and the Gift of More Time

Honoring Her with Love and Purpose

I should have had this epiphany some time ago.  But, instead, it came to me last night as I was dropping off to sleep.

I turn 60 years old this summer.  My mom, JoAnn Drinkwater Young, died at the age of 61 in 1997.  When she was my age, she was already carrying the colon cancer that would kill her.

Shortly after her death, I filled a glass bowl full of translucent blue glass marbles.  Each marble represented a week in my life should I only live to be 61.  I intended it to remind me to live my life joyfully, lovingly, and with purpose.  

On a regular basis, I have thrown a handful of marbles into my garden representing the lapse of those weeks.  Until this morning, I had about 120 marbles left in that bowl.  Just now, I threw all but one of the remaining marbles into my colorful spring garden.  The last one I put in my "treasure box." 

Every week I live beyond age 61 is a gift, in my mind.  If my mom had had extra weeks to live a healthy and satisfying life, what would she have done?  I remember her saying she'd quit work.  At the time, she served as my Dad's dental office manager, receptionist, and hygienist.  

But, beyond that, I never heard her say what she would do with more days in her life.  She would have spent more time with her grandchildren.  I'm sure of that!  She would have gardened and helped with my brother's greenhouse business. She would have caught up on her sewing projects.  And, held more dinner parties.  I suspect she would have planned a few exotic trips.  I think she wanted to visit Hong Kong.  Who knew?

So, my task is to decide how to live with my gift of many more weeks.  

40,000 Page Views for The Red Velvet Lawyer

40,000 Page Views
Friends, family, and colleagues:

Despite neglecting, this past month, my commitment to blog daily for a year, my blog has reached another milestone.  Some time today, page views of my blog topped 40,000. 

The Red Velvet Lawyer celebrated its first birthday in mid-March. It has been a great learning experience. It has given back to me a voice I had as a columnist. It keeps me in a conversation with colleagues, students, and alumni.

I appreciate your ongoing support and interest.

Love you all, and thanks so very much for your support!

Niche Marketing for Lawyers: Practice that Elevator Speech!

Tell a Story.

Start a Conversation.

At the last retreat of women entrepreneurs enjoying the coaching lessons of Christine Kane in her Gold Mastermind program, we -- yet again --  focused on identifying our ideal client and then practiced our elevator speech designed to draw that ideal client to our businesses.  

So this discussion by blogger Mark Beese, at Attorney at Work, caught my eye. He reports on several presentations given at the recent conference of legal marketing professionals.

Niche marketing. Think about the last time someone asked, “So, what do you do?” at a networking event. What did you say? “I’m a [fill-in-the-blank] lawyer” or “I’m an attorney at [X] firm”? Do you think you made a lasting, positive first impression?

Kevin McMurdo, Principal of McMurdo Consulting and former CMO of Perkins Coie, led a lively discussion on teaching lawyers to focus on a specific niche market where they have a specific value proposition. He used the “elevator speech” to illustrate the point. Which of these responses is most memorable?

• “I’m a regulatory lawyer at a large firm in the Pacific Northwest.”
• “I help vintners deal with the many regulations involving wine production, bottling and distribution. My clients produce wine listed on Wine Spectator’s top 100 list. I love wine, I make my own wine and have made a career out of helping wine companies.”

McMurdo advised that lawyers define their niche market by expertise, reputation, network, industry or a specific problem they help solve. He had this advice on creating a targeted elevator speech:

• Make it succinct, detailed and distinctive.
• Tell a story.
• Make it appropriate to the situation.
• Use it to start a meaningful conversation that builds trust and chemistry.

He encourages lawyers to practice their speech within their firm, in practice group meetings, and through internal introduction videos so that others know how to best refer opportunities to you.

What is your elevator speech? 

ShalePlay App Keeps Energy Clients Current

Positioning your Law Firm 

as an Expert

Blogger Mark Beese, at Attorney at Work, reports on several presentations given at the recent conference of legal marketing professionals.  This story about "valuable free content" offered to energy law clients caught my eye.  

Paul Grabowski, CMO of Bracewell Guiliani, gave a behind-the-scenes tour of what it takes to produce an award-winning mobile app. Targeting energy companies, Bracewell’s free “ShalePlay” app provides a stream of news, analysis and legal commentary on the hydraulic fracturing industry segmented by geographic shale “plays” throughout the U.S. 

The process of creating the app took 14 months, and was a cross-disciplinary collaborative effort of in-house staff, attorneys and outside designers that required strong project management and a good budget. More than 10 software tools were involved in development, design and usage metrics. 

Grabowski’s lessons learned? 

• Create a useful tool for clients that shares information or resources — not a brochure or directory of your firm.
• Make it simple and fun to use.
• Limit self-promoting content to 10 percent.
• Innovation and creativity in law firms are fertile soil for skepticism, group-think and Murphy’s Law. Be prepared for surprises, delays and cost overruns.

ShalePlay, which received a 2014 LMA “Your Honor” award, has been promoted through multiple channels, including industry conferences and email promotions. Word of mouth, however, seemed the main driver of the thousands of downloads in its first week of release. 

The fracking glossary and news feeds have been such a valuable resource, some clients and prospects have made the app required reading for landmen and energy executives.

The iTunes Store description provides: "Requires iOS 6.0 or later. Compatible with iPhone, iPad, and iPod touch. This app is optimized for iPhone 5."