In 2015, the United States Congress passed the Energy Easement Accountability Act (the Act). The Act allows a landowner to sue, in federal court, any defendant whose energy-related easements cause property damage or other harms. The affected landowner may recover money damages, and may obtain both preliminary and permanent injunctions to prevent the defendant from continuing the harmful activity. Congress meant for the Act to operate similarly to a common-law trespass or nuisance claim.
An oil company operates a pipeline that carries crude oil. Under an easement, the pipeline crosses 2,000 acres of land owned by a cattle rancher. The pipeline passes within 100 feet of a natural pond on that land; the pond is the cattle’s only source of water. Assume that this pipeline and the easement by which it crosses the rancher’s land are subject to the Act.
Shortly after the pipeline is installed, a section of pipe near the pond begins to leak. The rate of leakage is a slow drip, but the oil gradually accumulates and leaches into the pond. This makes the water temporarily unfit for the cattle to drink. Thus, the rancher must install, at great expense, a temporary watering system to provide water to the cattle.
An environmental expert tells the rancher that at present, it is still possible to clean the pond and make it fit for the cattle to use. However, if the leak continues for too much longer, then it will contaminate the pond permanently. This would force the rancher to install a permanent watering system or dig a new pond; both options would be very expensive. The oil company, though, regards the leak as a low priority, and continues to transport oil through the leaking pipe.
The rancher sues the oil company under the Act, in the appropriate federal district court. The rancher seeks damages (1) for the expense of the temporary watering system and cleaning up the pond, or in the alternative, (2) for the cost of a permanent watering system or a new pond.
In addition to damages, the rancher seeks two forms of injunctive relief. First, he seeks a preliminary injunction requiring the oil company to cease transporting oil through the pipeline, either until the trial is over or until the oil company repairs the leak. Second, he seeks a permanent injunction requiring the oil company to reroute the pipeline or to keep it in good repair.
At the hearing on the preliminary injunction, the rancher’s expert testifies that another month or two of continued leakage will likely contaminate the pond permanently. Another expert testifies that permanent contamination will diminish the market value of the rancher’s property by at least five to 10 percent. The property is currently valued at $8,000,000. An executive at the oil company testifies that it will cost $50,000 to repair the leak, or $1,000 per week to reroute the oil. The oil company’s revenues are approximately $1,000,000 per week.
After the hearing, the judge issues the preliminary injunction over the oil company’s objection.
The rancher’s complaint includes a general demand for trial by jury. However, the Act is silent as to whether a plaintiff is entitled to a jury trial. At the pretrial conference, the oil company’s attorney asks for a bench trial. The rancher continues to demand a jury trial.
- Did the judge rule correctly in issuing the preliminary injunction? Explain.
- Is the rancher entitled to a jury trial? Explain.