OK Supreme Court Rules Oil and Gas Companies Can Be Sued

01.31.2018


By Liz Carey

Oklahoma City, OK (WorkerCompensation.com) – Just days after an explosion on a gas drilling explosion killed five men, the Oklahoma Supreme Court ruled that giving oil and gas company operators immunity from lawsuits was unconstitutional. 

The decision stems from a case where David Chambers, an employee of RDT Trucking, Inc., was killed as a result of an accident at a well owned by Stephens Production Company. In 2014, Chambers was working on or around a “heater treater” at a Stephens well, when he was severely burned. Chambers eventually succumbed to the burns and died.

Later, his daughter, Glory Strickland, filed a wrongful death lawsuit against the company in Oklahoma County District Court alleging negligence, and failure to properly operate, maintain and inspect the well, and failure to warn of dangerous conditions at the site.

In answer to the suit, Strickland v. Stephens Production Company, SPC moved that the lawsuit be dismissed citing Section 5 of the Oklahoma Administrative Workers’ Compensation Act (OAWCA) which states that “any operator or owner of an oil or gas well… shall be deemed to be an intermediate or principal employer” and extended immunity from civil liability. The district court denied the motion to dismiss and found that Section 5 was unconstitutional. 

Stephens appealed the decision. 

The Supreme Court upheld the lower court’s ruling, citing a previous case that eliminated special treatment for some businesses, writing “We adhere to the teachings of Goodyear Tire today and find no valid reason exists for the special treatment of the oil and gas industry… is an impermissible and unconstitutional special law under Art. 5, § 59 of the Oklahoma Constitution, and it shall be severed from the remainder of that provision.”

The court also found that SPC is not precluded from arguing about whether or not SPC was actually Chambers’ principal employer when he was injured.

When contacted by WorkersCompensation.com, a spokesman for SPC said the company had no comment at this time about the Supreme Court’s decision.

Bob Burke, an attorney for Strickland, said the ruling could help the five workers killed earlier this week.

“The ruling is significant for the families of the five men killed in the gas well explosion this week in Oklahoma,” Burke said. “If the law had been found to be constitutional, the families would not have been able to sue any third party that might have been negligent on the well site and caused the explosion.  But, since the unanimous Supreme Court found the exception to liability given only to the oil and gas industry an unconstitutional law, the families will be able to bring a common law action against any negligent third party company that contributed to the horrible damages.”

Burke said this likely isn’t the last piece of legislation that will be found unconstitutional when it comes to the OAWCA.

“Most lawyers anticipated this ruling. The Oklahoma constitution has a strong section that prohibits a ‘special’ law that provides different treatment to members of the same class,” Burke said. “The oil and gas industry was the only industry that was exempt from third party liability by the law… This provision is the 50th provision of the 2013 reform law, the Administrative Workers' Compensation Act, which has been found to be unconstitutional, invalid, or inoperable.”

Burke predicted there would be more pieces of the legislation that would be found unconstitutional.

According to the US Bureau of Labor Statistics, oil and gas extraction is one of the more dangerous jobs in the country, with a fatality rate of 29 fatalities per every 100,000 workers per year.

Six of the judges affirmed the decision, with one concurring, and another, Justice Patrick Wyrick, recusing himself from the case.

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This article was updated as of 01/25/18.


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