Read the PA DEP Consent Order and Agreement with Chesapeake
CLICK HERE for an explanation and history of what happened to lead to this lawsuit.

Chesa­peake Energy has agreed  to pay $1.6 mil­lion in dam­ages to three fam­i­lies in Wyalus­ing, Brad­ford County. The case may be the first Mar­cel­lus con­t­a­m­i­na­tion law­suit to get resolved with­out a nondis­clo­sure agree­ment, mean­ing the par­ties can speak freely about the case. Todd O’Malley, an attor­ney for two of the fam­i­lies, says the plain­tiffs insisted on not sign­ing a con­fi­den­tial­ity agreement.

“They wanted the pub­lic to know what the set­tle­ment was about,” says O’Malley.

O’Malley says the major­ity of gas drilling related cases get set­tled with­out any pub­lic dis­clo­sure, includ­ing the causes of the con­t­a­m­i­na­tion, or the health impacts.

“I think the nondis­clo­sure form is prob­a­bly the worst form,” says O’Malley. “It’s referred to as ‘toxic secrets.’ The pub­lic deserves to know.”

The fam­i­lies, liv­ing along Par­adise Road, all signed leases with Chesa­peake Appalachia to drill beneath their land. But in July, 2010, the res­i­dents began to notice muddy water com­ing from their water wells.  Chesa­peake sup­plied a fil­tra­tion sys­tem, which res­i­dents say did not work. O’Malley says his inves­ti­ga­tors con­cluded that a poor cement job resulted in methane migrat­ing from the Mar­cel­lus Shale for­ma­tion into the water sup­ply of nearby residents.

Scott and Cassie Spencer, Heather and Jared McMicken, and Michael and Jonna Phillips filed suit in the Mid­dle U.S. Dis­trict Court of Penn­syl­va­nia, which was sent to arbi­tra­tion. Three days of tes­ti­mony took place before an arbi­tra­tion panel in Philadel­phia this week, pre­cip­i­tat­ing the two par­ties reach­ing an agree­ment on Thursday.

O’Malley says all three fam­i­lies signed leases that forced any dis­pute into arbi­tra­tion, which typ­i­cally leads to smaller finan­cial set­tle­ments than jury trials.

“They deserved much more money,” said O’Malley. “With what they went through, you couldn’t pay them enough. But this is enough to get them out and into new homes.”

Chesa­peake also agreed to buy the homes from the fam­i­lies, which is included in the $1.6 mil­lion. But the com­pany says their drilling prac­tices did not cause methane migra­tion. In a writ­ten state­ment, Chesa­peake says no pre-drill water tests were con­ducted at these homes, which leaves open the ques­tion of whether the methane was present before drilling occurred.

“The PA Depart­ment of Envi­ron­men­tal Pro­tec­tion cur­rently rec­om­mends pre-drill test­ing within a 2,500-foot radius of any oil or gas drilling oper­a­tion, and Chesa­peake meets or exceeds that rec­om­men­da­tion with its testing.

All of these water sources are beyond that test­ing radius, and thus Chesa­peake had not col­lected pre-drill data for the water sources.”

The state­ment goes on to say that the pre-drill test­ing done in other area homes showed methane con­t­a­m­i­na­tion before any drilling activ­ity took place.

Chesa­peake oper­ates almost 200 wells in Penn­syl­va­nia, most are in Brad­ford County. The com­pany has racked up about 190 vio­la­tions and paid about $1.2 mil­lion in fines. The wells that res­i­dents say caused the water con­t­a­m­i­na­tion along Par­adise Road are the Welles 1 3H and the Welles 1 5H.