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Release Agreements Bar Tort Claims in Fourth Circuit Fracking Case

In a victory for hydraulic fracturing operators that underscores the importance of contractual release agreements, the Fourth Circuit found surface owners’ trespass and negligence claims foreclosed by the plain language of such an agreement. Hagy et al v. Equitable Prod. Co. et al, No. 12-1926 (4th Cir. 2013). 

After receiving notice that Defendant Equitable Production Company was preparing to drill under the land, Plaintiffs Dennis and Tamara Hagy signed surface owner waivers for all the new wells. Hagy, slip op. at 3. The waivers stated that the property owner (the  Hagys) “irrevocably and unconditionally releases, acquits and forever discharges” the drilling company “from any and all claims of any kind or nature . . . whether known or unknown and whether now existing or yet to accrue.” Id. at 7. In 2010, alleging that they experienced water contamination and health problems as a result of the drilling, the Hagys brought negligence and trespass claims against Equitable as well as another drilling company, BJ Services. Id. at 4-5. 

The Fourth Circuit upheld the release agreements, finding that the Plaintiffs had adequate opportunity to consult legal counsel in negotiating the agreements and that there was no evidence that the releases were procured by fraud. Id. at 7. Additionally, the court rejected the Plaintiffs’ trespass and negligence claims against BJ Services, stating that the Hagys failed to “connect any allegedly wrongful conduct . . . with the harm they claim to have suffered.” Id at 7-8.