Plaintiffs are Colorado farmers who own the surface rights above a large oil and gas deposit and defendants hold the mineral rights below. Between 2004-2007, the defendants’ lessees drilled seven vertical wells. Plaintiffs requested that defendants drill directional wells, which would have reduced the number of well site to two. The lessees did not drill directional wells, and the plaintiffs and similarly situated neighbors sued the mineral rights holders for trespass in a class action lawsuit. The crux of their argument is that only using vertical wells when directional wells would have sufficed caused the mineral right holders to exceed their right to drill and the excess wells are a trespass based on unreasonable surface use.
The court used a “three-step burden-shifting approach” examine a trespass claim based on unreasonable surface use. The surface owner must first prove that the mineral right holder “material interfered with surface uses.” Material interference is a high standard. It requires that the surface rights holder prove their use of the land is “completely precluded or substantially impaired” and that there is “no reasonable alternative” to the current use. The court found that the plaintiffs failed to prove material interference since the land was still used for agricultural purposes. The court acknowledged the plaintiffs were inconvenienced by the presence of the wells, but that alone is not enough to establish material interference.
Bay v. Anadarko E&P Onshore, LLC, No. 21-1361 (10th Cir. July 18, 2023).
