Canada: Alberta Court Rules Novel Fracking Claim Against Province Has Reasonable Prospect Of Success; Landowner Will Take Well-Water Fight To Supreme Court

Canada: Alberta Court Rules Novel Fracking Claim Against Province Has Reasonable Prospect Of Success by John Georgakopoulos, November 18 2014, Willms & Shier Environmental Lawyers LLP
On November 7, 2014, a decision by the Court of Queen’s Bench of Alberta dismissed the Government of Alberta’s application to strike portions of Jessica Ernst’s claim against Alberta for allegedly failing to protect her water supply. The Court also dismissed Alberta’s application for summary judgment.

In 2007, Ms. Ernst brought claims against EnCana Corporation, Alberta’s Energy Resource Conservation Board (ERCB) and the Government of Alberta. Ms. Ernst sued EnCana for damages to her water supply allegedly caused by Encana’s hydraulic fracturing (fracking) activity. Ms. Ernst also sued the Government of Alberta for allegedly failing to protect her water supply. In 2013, Ms. Ernst’s claims against the ERCB for failing to respond to her concerns about her well water were struck and dismissed. This decision was upheld by Alberta’s Court of Appeal in September 2014. Ms. Ernst is appealing the Court of Appeal’s decision to the Supreme Court of Canada.

Only the Government of Alberta participated in the recent application to strike Ms. Ernst’s claim on the basis that she failed to disclose a reasonable cause of action. In the alternative, Alberta requested summary judgment dismissing the action. Alberta argued that Ms. Ernst’s claim should be dismissed on the basis that the statutory regimes applicable to Alberta establish only a duty of care to the public at large, and not a private duty of care to Ms. Ernst. Alberta also relied on the statutory immunity provisions contained in Alberta’s Environmental Protection and Enhancement Act and Alberta’s Water Act. Alberta argued that the statutory immunity clauses protect the province from lawsuits by individuals affected by the administration of legislation.

Justice Neil Wittmann held that “while this is a novel claim, I find there is a reasonable prospect Ernst will succeed in establishing that Alberta owed her a prima facie duty of care”. Justice Wittmann further held, “there is also a reasonable prospect that Ernst will succeed in defeating Alberta’s statutory immunity claims on the basis that the provisions Alberta relies upon do not protect it, or, in the alternative, that Alberta acted in bad faith, resulting in no protection”.

The Court dismissed Alberta’s application for summary judgment, finding that Alberta was unable to establish that there was no genuine issue requiring trial. The Court also held that Alberta was unable to establish Ms. Ernst’s claim had no merit.

This article was written with the assistance of Mark Youden, Student-at-Law.

Landowner Will Take Well-Water Fight To Supreme Court by James Mahony, Daily Oil Bulletin, November 13, 2014
An Alberta landowner who is suing the Alberta government in a case arising from claims of well water contamination has vowed to fight all the way to the Supreme Court of Canada.  Jessica Ernst first sued the province, Encana Corporation and the then-Energy Resources Conservation Board (ERCB) in December 2007 and has pursued the case ever since.

She alleges the well water on her Rosebud-area acreage, roughly an hour northeast of Calgary, was contaminated years ago, first by coalbed methane (CBM), and later during hydraulic fracturing of local wells.

Ernst’s case is advancing on two fronts. Last week, Alberta’s Court of Queen’s Bench delivered a ruling which Ernst considers a win. In that Nov. 7 decision, the court dismissed the Alberta government’s bid for summary judgment against Ernst, while awarding her an unusual bonus: triple legal costs against the province.

“I think this is a big victory,” she said. “Even if the Alberta government appeals [the Queen’s Bench court] ruling, and we lose [at the Court of Appeal], I will appeal the [latter ruling].”

In September, the Alberta Court of Appeal ruled on a case she’d brought to Queen’s Bench in 2013. In that case, she sued the ERCB, alleging it had not properly discharged its regulatory duties, among other allegations. Ernst is well-known to the ERCB, which allegedly stopped communicating with her at one point.

As for the damages she is seeking from the ERCB in her lawsuit, the Court of Queen’s Bench ruled that a statutory immunity clause — section 43 of the Energy Resources Conservation Act — protects the board and its members from such lawsuits. The Court of Appeal later affirmed that point in a Sept. 15, 2014, ruling that Ernst will appeal to the Supreme Court of Canada shortly, she told the Bulletin yesterday.

Ernst’s case against Encana is proceeding, although the company denies all of her allegations, and indeed denies that the two CBM wells she claims are the source of contamination were ever hydraulically fractured.

In a statement today, Encana said it has offered to test Ernst’s water well on several occasions, but has so far been unable to obtain her co-operation to perform the tests. The company said it has “always firmly believed that Ms. Ernst’s claims are not supported by the facts and her lawsuit is without merit.”

As for the two CBM wells, Encana said these were vertically drilled and are 6.4 and three kilometres respectively from her property. Both have been shut in and are no longer producing gas. Although not fractured, the wells were stimulated with nitrogen to produce gas.

Encana said it “conducted its operations safely, diligently and in accordance with accepted and established industry practice and complied with or exceeded the requirements of all relevant laws, regulations and directives in respect of its operations in the Rosebud area.” Further, the company said it took “all necessary and reasonable precautions to protect the Ernst property from foreseeable harm, including groundwater testing and monitoring before, during and after the two wells were drilled and completed.”

For its part, and in response to public concerns raised, Encana said Alberta Environment retained the Alberta Research Council (ARC) to complete a groundwater investigation in the Rosebud area. Encana said it co-operated with both Alberta Environment and ARC and provided them with all available information.

“When the investigation was completed in January 2008, Alberta Environment released a report showing that no water wells were affected by CBM development. Rather, the quality issues were predominantly due to naturally occurring methane, poor water well construction and maintenance issues,” Encana said.

For her part, Ernst told the Bulletin she has so far spent more than $200,000 on legal fees and will spend more as the case proceeds. At this stage, the case has become more than a dispute over contaminated water well, she explained. If that were the only issue, she said her easiest option would be to simply leave the province, something she does not plan to do.

“[Our] whole community’s water was contaminated by toluene and other petroleum hydrocarbons,” she said. “I’m [pursuing the lawsuit] because everywhere that [oil and gas companies] are fracking, people’s water wells are going bad. [Companies] then pay off the people who speak out — gag them — and then go to the next community and do it again. This has to stop.”

As well as challenging industry’s response to landowner claims of well contamination, Ernst wants to know which chemicals were used during earlier fracturing of Rosebud-area wells by EnCana. She alleges EnCana began fracturing in the area in 2004, and possibly as early as 2001, but she does not know what was being injected, although she said she began trying to get that information as early as 2006. “This legal victory is a massive step to start getting some of that information,” she said.

Ernst’s lawyers argued her rights under the Canadian Chart of Rights and Freedoms were breached by the ERCB’s handling of the case, in particular by allegedly denying her use of the usual channels of communication. Charter arguments also figure largely in her case planned for the Supreme Court. She understands that, if the court refuses to hear her case — a possibility, since it grants only a few of the hundreds of such requests each year — the Alberta Court of Appeal’s Sept. 15 ruling will stand as the final word on the matter.

Legal arguments aside, Ernst is determined to have her day in court. Up against government, the industry regulator and companies, she said small plaintiffs like her are typically worn out by the tactics well-financed opponents take, to the point that many ultimately throw in the towel.

“They want to pound you down to where you have nothing left financially, in your heart or in your spirit. I will sell everything I have, and I’m going to go all the way,” she said, adding she is also hoping for financial help from others who are like-minded. “At the end of the day, I will know I did absolutely everything I could.”

Yesterday, a spokesman for Alberta Justice and Solicitor General offered very little comment on the case. “There’s not a lot we can say at this stage of the proceedings,” Michelle Davio, assistant director of communications, said in a brief email to the Bulletin.

“The [Alberta] Crown has 20 days from Nov. 7 to decide if it will appeal the [QB court] ruling. The allegations made by the complainant have not been proven in court. The Crown will review the file and determine what the next steps are.”

Spokespeople for Alberta’s Department of Energy and its Department of Environment and Sustainable Resource Development could not be reached yesterday.

Alberta Landowner Appeals Constitutional Issue in Fracking Case, Jessica Ernst aims to challenge regulator immunity in Canada’s highest court by Andrew Nikiforuk, November 15, 2014,

November 13, 2014: Memorandum of Argument filed with the Supreme Court of Canada

Memorandum with supporting documents

Can provincial legislation protect the state and “block an individual from seeking a remedy for breach” of her fundamental rights and freedoms under the nation’s Charter of Rights?

That’s the question that lawyers representing Alberta oil patch consultant Jessica Ernst have now posed to the Supreme Court of Canada in a special legal filing known as application for leave.

Murray Klippenstein and Cory Wanless, Ernst’s Toronto-based legal team, are hoping that the court will agree to hear their arguments that the Alberta Court of Appeal erred this year when it ruled against their client.

The Court of Appeal found that the province’s energy regulator can violate a citizen’s fundamental freedoms because a provincial immunity clause protects it from civil actions from citizens.

But Ernst’s landmark lawsuit, which challenges the regulation of hydraulic fracturing, is multi-sided.

It alleges that Encana, a pioneer of hydraulic fracturing, drilled and fractured shallow coal bed methane wells directly in the local groundwater supply between 2001 and 2004 near Rosebud, Alberta, polluting Ernst’s water well with enough toxic chemicals and methane to make it flammable.

The ERCB, now the Alberta Energy Regulator, is the province’s powerful energy regulator. It is to Albertans what the Texas Railroad Commission is to Texans: the primary regulator for the oil and gas industry.

In addition, Ernst’s lawsuit alleges that the ERCB ceased all communication with the oil patch consultant and falsely accused her of making “criminal threats,” thereby violating her fundamental Charter rights to free expression.

This week, Ernst won a legal victory when Chief Justice Neil Wittmann struck down the last of three attempts by the Alberta government to quash the case by ruling that Alberta Environment can be sued when it acts in bad faith.

An editorial in the Edmonton Journal hailed the decision, calling it a ”victory for the little guy.”

Previous ruling found regulator immune

But last year, Justice Wittmann delivered a somewhat different ruling for the ERCB, which oversees oil and gas development and is governed by different statutes than Alberta Environment.

Wittmann found that provincial rules granted the ERCB immunity from lawsuits as well as Charter claims, and struck the regulator from Ernst’s lawsuit — though he acknowledged ”the Charter claim of Ernst against the ERCB is valid.”

Ernst appealed that decision, because she considers the ERCB to be ”the most guilty party” in her seven-year-long fight for justice over the contamination of local groundwater.

(Nearly a decade ago, the shallow fracking of coal seams in central Alberta resulted in water well complaints from nearly 100 landowners.)

Earlier this year, the Court of Appeal of Alberta agreed with Wittmann and ruled that the immunity clause in the ERCB’s legislation broadly protected the agency from lawsuits that allege violations of the civil rights of landowners.

Now, Ernst’s lawyers have taken her Charter claim to the highest court.

A memorandum to the court argues that the ERCB breached Ernst’s right to freedom of expression by ”punishing Ms. Ernst for publicly criticizing the ERCB and by arbitrarily preventing Ms. Ernst from speaking to key offices within the ERCB.”

The public record shows that the board cut off communication with the landowner in December 2005 and returned her mail at the same time she discovered methane in her water well.

”Richard McKee, a senior lawyer with the ERCB, confirmed that the ERCB had decided to stop communication with Ms. Ernst and would not re-open communication until Ms. Ernst agreed to stop voicing her concerns publicly and agreed to raise her concerns only to the ERCB,” says the memorandum.

Ernst refused to make any deal, and continues to be a vocal critic of the regulator now chaired by Gerard Protti, a former energy lobbyist and Encana executive.

The memorandum argues that ”the Charter guarantees not only fundamental freedoms, but also guarantees the right of Canadians to seek a remedy when these fundamental Charter rights and freedoms are violated.”

Other issues case will test

In addition to addressing the question of whether or not provincial legislation can override a violation of the Charter, the case will raise other issues of national concern.

For starters, should legislatures or courts determine when the state has overstepped its powers and abused the rights of citizens?

In other words, can the court ignore the violation of fundamental freedoms of citizens such as Ernst by the government just because its agency may have an immunity clause from civil action?

Secondly, the Court of Appeal of Alberta has now upheld law in the Ernst case that puts the province at odds with laws in Ontario, where constitutional issues come first.

In Ontario, a regulator could not violate the Charter rights of a citizen like Ernst and get away with it, Ernst’s lawyers argue. They will ask whether the rights of Ontarians to seek Charter protections should be more robust than those of Albertans.

Lastly, immunity clauses are found in dozens of statutes across the country. ”The Supreme Court’s guidance on whether legislation can limit the remedies available” under the Charter will benefit all Canadians, argue Ernst’s lawyers.

The Supreme Court only hears about one in 20 cases brought before it.

To date, Ernst has covered her legal costs herself, along with a few small donations from individual landowners, seniors, urbanites and community groups. She said she will not settle and wants all of the data on the fracking of coal seams made public.

Ernst expects to sell everything she has to get to the end of the lawsuit. ”Groundwater is more important than money,” she said.

An analysis of the most recent legal ruling on the lawsuit by a University of Calgary law professor said that the Ernst case on groundwater contamination is shaping up to be ”the legal saga of the decade.”


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