Lipsky vs Range 2011
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Transcript of Lipsky vs Range 2011
CAUSE NO. CV11-0798
STEVEN and SHYLA LIP SKY
v.
DURANT, CARTER, COLEMANLLC, SILVERADO ON THE BRAZOS §DEVELOPMENT COMPANY #1LTD, JERRY V. DURANT, Individually §JAMES T. COLEMAN, Individually,ESTATE OF PRESTON CARTER,RANGE PRODUCTION COMPANY,And RANGE RESOURCESCORPORATION
V.
ALISA RICH
IN THE DISTRICT COURT
RECEIVED AND FILEDOF RECORD
O'Ci..ock
JUL 1. 4 Z011
ILLILAND, Divipt Clock
COUNTY; 1E-MR
PARKER COUNTY, TEXAS
43 RD JUDICIAL DISTRICT
AT
SHARE
By
RANGE RESOURCES CORPORATION'S AND RANGE PRODUCTION COMPANY'S ANSWER AND COUNTERCLAIM AND THIRD PARTY
PETITION AGAINST ALISA RICH
TO THE HONORABLE JUDGE OF THE COURT:
NOW COME Range Resources Corporation and Range Production Company
(which, although separate legal entities, are for convenience collectively referred to as
"Range"), and in response to Plaintiffs' Original Petition respectfully show the Court the
following.
PRELIMINARY STATEMENT
1. Range Production Company, a wholly owned indirect subsidiary of Range
Resources Corporation, is a Fort Worth based natural gas producer committed to the
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 1
responsible development of our nation's energy resources. This commitment includes
placing a high priority on safety, environmental care, and fostering good relationships
within the communities in which it engages in operations. The two natural gas wells
operated by Range Production Company that are closest to the property owned by
Lipskys are the Teal #1-H well and the Butler #1-H well (the "Gas Wells").
2. Plaintiffs' allegations that the Gas Wells have contaminated their water
well have already been declared false by the Railroad Commission of Texas (the
"Railroad Commission"). The Railroad Commission is the state agency with direct
supervision over the oil and gas industry and the expertise to properly investigate Mr.
Lipsky's claims. Over the course of several months, the Railroad Commission
thoroughly investigated Mr. Lipsky's claims. The Lipskys and their attorneys
participated in depositions leading up to the Railroad Commission's evidentiary hearing.
However, apparently realizing that the facts disproved their claims against Range, the
Lipskys declined to participate at the Railroad Commission hearing. After conducting a
two day hearing, which was open to anyone wishing to speak, and after hearing testimony
from a number of highly qualified experts and examining a multitude of documentary
evidence, the Railroad Commission issued its Final Order finding and concluding that
Range's operations did not cause or contribute to any gas in the Lipsky water well. (Exh.
13 attached). This determination by the state agency with the most experience and
expertise in the oil and gas industry should have ended the accusations against Range, but
Plaintiffs continue to close their eyes to the facts in their effort to blame Range for
something for which it clearly is not responsible.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 2
3. Plaintiffs simply chose to ignore the Railroad Commission's findings and
conclusions and all the evidence supporting the findings. (Exh. 14 attached). Instead,
Plaintiffs filed this lawsuit blaming Range for the presence of natural gas in a water well
which Range neither caused nor contributed to. As set forth below, Plaintiffs' claims are
groundless and Range is not liable to the Lipskys for any alleged loss, alleged "mental
anguish" or any other claim. Plaintiffs' unfounded and disparaging statements and their
"expert's" trumped up efforts to involve the United States Environmental Protection
Agency (the "EPA") have required Range to spend millions of dollars to establish its
innocence. The damage done to Range's reputation is not as easily calculated, but is
more harmful in the long term. Range is entitled to recover for these damages.
4. Range also is entitled to recover the costs and expenses borne by Range and
its shareholders as a result of the false, misleading, and disparaging statements made by
Third Party Defendant Alisa Rich. Rich concocted a disingenuous plan to improperly
acquire samples and develop false conclusions from allegedly objective data regarding
the presence of natural gas in the Plaintiffs' water well. Rich's scheme was designed to
enlist the EPA in pursuing a costly "investigation" against Range, which resulted in
significant harm to Range's well-deserved business reputation as a high quality driller
and operator of Barnett Shale horizontal natural gas wells. Rich's actions, with which the
Lipskys agreed, approved, and/or acquiesced, resulted in losses to Range and, therefore,
its shareholders, in an amount in excess of $3 million dollars in expenditures and other
harm to its business reputation.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 3
FACTS
A. Range Resources is a leader in the natural gas industry and is headquartered in Fort Worth.
5. Range Resources Corporation is a Fort Worth based independent natural gas
company which owns, directly or indirectly, subsidiary companies that are engaged in the
exploration, development, and acquisition of oil and gas properties. Range currently
produces natural gas exclusively in the United States in eight states, including Texas. The
creation of what is Range today was started by a Fort Worth native, and its corporate
headquarters have been in Fort Worth for approximately 20 years.
6. Range Production Company is a wholly owned indirect subsidiary of Range
Resources Corporation. Range Production Company was formed to operate Texas and
Oklahoma properties owned by its affiliates, including Range Texas Production, LLC
which owns the Butler and Teal wells. Range Production Company is a separate entity
but, like all of its affiliates, strives to conform with the goals, policies, objectives, and
values of Range Resources Corporation.
7. As of December 31, 2009, Range had over 1,850 net producing wells and
almost 900,000 gross acres under lease in the southwestern region of the United States.
Natural gas is twice as clean as coal or oil, and is an abundant, reliable, versatile,
domestic, and secure source of energy for our country. Range, like other independent oil
and gas producers, creates, directly and indirectly, thousands of jobs. Range's primary
business goal is to operate safely, protect public health and safety through meeting or
exceeding all legitimate government regulation, and increase shareholder value while
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 4
producing natural gas in an environmentally sound way. Range employed a top Barnett
Shale technical team with hundreds of years of collective experience in developing the
Barnett Shale safely.
8. Range is committed to the responsible development of our nation's energy
resources and, specifically, natural gas. This commitment includes placing a high priority
on safety, environmental care, and the fostering of good relationships in the communities
in which Range employees live and work. In furtherance of this commitment, Range
strives to be a good corporate citizen and a good neighbor. Range has maintained an
excellent safety track record, and has been recognized as a safety leader in the natural gas
industry, especially with regard to drilling processes, voluntary disclosure of frac fluids
and water recycling for hydraulic fracturing.
B. A typical Barnett Shale well consists of a vertical portion and ahorizontal portion that usually runs more than one mile below thesurface of the Earth.
9. All of the wells drilled by Range in the north Texas area are horizontal
wells. As depicted in the illustration below, a typical horizontal well drilled in the Barnett
Shale is first drilled vertically to a depth of about one mile beneath the surface of the
Earth before the well bore turns horizontal. The horizontal portion of the well is usually
more than one mile below the surface of the Earth.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 5
Range's Gas Wells Are Approximately One Mile Below The Water Aquifer
Thus, there are a number of different layers of rock between the horizontal part of a well
and the surface of the Earth. Layers of impermeable rock are included among the various
rock formations and serve as a barrier between the horizontal well bore and geological
layers close to the surface. The horizontal wellbores of the Gas Wells are both located
more than one mile below the Earth's surface.
10. Like all natural gas producers in the Barnett Shale, Range utilizes a process
known as hydraulic fracturing, commonly known as "fracing," to allow production of this
shale gas. Fracing is used to stimulate production from new and existing wells by
pumping a sand and water mix into the well at a pressure high enough to create small
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 6
cracks in the shale along the horizontal portion of the wellbore. Unlike others in the
industry, Range does not claim trade secret protection for its "fracing formula" and its
formula does not include diesel fuel. Despite the prevalence of false statements published
on the internet by a number of uninformed commentators, the fracing of natural gas wells
is a safe method for extracting natural gas from the Barnett Shale thousands of feet
underneath the surface. Fracing is a practice that has been used for decades in connection
with the production of oil and gas, and fracing deep shale formations does not and
absolutely cannot cause damage to relatively shallow water aquifers using existing
technologies in accordance with state regulations.
11. The drilling of a natural gas well is a highly regulated activity in which a
system of permits, rules, and regulations govern and control the manner in which a well
is drilled and completed. See TEX. NAT. RES. CODE ANN. § 85.202; 16 TEX. ADMIN.
CODE § 3.1, et seq. These rules and regulations cover the entire process of drilling a
natural gas well, including drilling, fracing, completion, production, and plugging of the
well, so that the drilling process will not endanger oil, gas, or geothermal resources, cause
the pollution of freshwater strata unproductive of oil, gas, or geothermal resources, and
prevent the vertical migration of fluids. 16 TEX. ADMIN. CODE § 3.1, et seq. Moreover,
the Railroad Commission has strict well construction requirements that require several
layers of steel casings and cement to protect groundwater. See 16 TEX. ADMIN. CODE §
3.13. The operator must also provide the cement formulations' minimum compressive
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 7
strength to demonstrate that the well will have sufficient cement volume and integrity to
prevent the vertical migration of fluids or gases between the casing. Id. Plaintiffs do not
plead any facts that Range failed to comply with rules and regulations of the Railroad
Commission and the Railroad Commission's Final Order does not find that Range
violated any rules or regulations. To the contrary, the Railroad Commission's Final
Order specifically found that Range did not cause or contribute to the contamination of
any water wells. See Exh. 13.
12. Because the whole goal of a fracture stimulation process is to fracture only
within the productive reservoir rock — not outside it — the fracture stimulation process
involves pumping only the fluid necessary to create fractures a few hundred feet high
(both up and down from the well bore). On the other hand, a typical Parker County water
well, like the Lipsky water well, taps into a water aquifer (the "Trinity Aquifer")
approximately only 200 feet below the surface of the Earth, while the fracing stimulation
typically occurs more than 5000 feet below the surface of the Earth. Therefore, even in
faulted reservoir rock, it is impossible for fracing stimulation to play any role in any
natural gas that might be found in water wells in the area since the fracture stimulation
volumes and pressures cannot create fractures that would intersect a shallow aquifer — a
fact Range proved in the Railroad Commission proceeding and will prove in this case.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 8
The Lipskys' Water Well
C. Plaintiffs move to the Silverado on the Brazos development in midst of Barnett Shale development.
13. Plaintiffs bought the site of their current home in the Silverado on the
Brazos development ("Silverado") in southern Parker County in 2005. Soon after
purchasing the land, the Lipskys hired Larry Peck and Peck Water Well Services to drill
the water well to supply water to a boathouse, guest house, main house and other
improvements that the Lipskys planned to construct or place on the property. At the
Lipskys' direction, the well was drilled to a depth of approximately 200 feet. See Exh.l.
14. Natural gas, predominantly methane, is naturally present in the Trinity
Aquifer in the Silverado area, a fact which has been commonly known for decades. In
fact, Larry Peck, who drilled the Lipskys' water well, experienced a large inflow of
natural gas in 2005 when drilling a water well approximately 800 feet away from the
Lipskys' water well. The natural gas in the 2005 well (the "Hurst well") was so abundant
that it forced water out of the well without any pump, and flared gas for a lengthy period
of time. The Lipskys were aware in 2005 that the Hurst well had experienced an event
causing the well to light on fire. See Exh. 2 (p. 47:5-23). A photograph of the Hurst well
flaring in 2005, four years before Range drilled the Gas Wells in 2009, is shown below:
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 9
Hurst Water Well Flaring Gas in 2005 Approximately 800 Feet AwayFrom The Lipsky Water Well
l5 In 2007, two years before Range's wells were drilled, Mr Peck drilled
another water well in the Silverado subdivision — this one for the Oujesky family — that
had gas in it. Gas has also been found in the drilling of water wells on property directly
across the river from the Silverado development. Additionally, tests performed on the
nearby Lake Country Acres public water supply system dating back many years show the
presence of natural gas in the water supply See Exh. 3 It has been well known for
many, many years that water wells in southern Parker County and northern Hood County
commonly contain gas. At the time gas was discovered in water wells in or near
Silverado and the Lake Country Acres water supply system, Range had not drilled any
wells in the area and did not have any other operations in the area. These numerous
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM
PAGE 10
examples of gas in the Trinity Aquifer in the area of Silverado, all of which predate any
and all activities by Range, are among the many pieces of proof that Range played no role
in natural gas occurring in Lipskys' water well.
D. Range drills the Gas Wells near the Parker/Hood county line in 2009.
16. Range drilled the Gas Wells in 2009, years after gas was found in the
Hurst water well in 2005, in other nearby water wells, and in the Lake Country Acres
water supply system, all of which produce water from the same formation as the Lipskys'
water well. Both of the Gas Wells were drilled from the same surface location
approximately 2300 feet from Lipskys' house, and the well bores penetrate more than one
mile below the surface of the Earth, where the Barnett Shale formation is located. The
Lipskys' allegation that the Gas Wells are located only 120 feet in horizontal distance
from their water well is intentionally misleading because it ignores the approximate one
mile vertical distance between the water well and the production zone of the Gas Wells.
The drilling and completion of the Gas Wells proceeded without incident and both began
producing natural gas in August 2009. The mechanical integrity of the Gas Wells has
never been an issue and recent pressure tests and cement bond logs confirm that the well
bore integrity of the Gas Wells is sound. The Gas Wells do not leak natural gas, they
comply with all applicable regulations, and have passed every Railroad Commission test
and inspection.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 11
E. The Lipskys complain about gas in their water well approximately one year after the Gas Wells were drilled.
17. In August 2010, almost one year after the drilling and completion of the
Gas Wells, Mr. Lipsky contacted the Railroad Commission regarding gas in the water
well. Given the vast distance between the Barnett Shale and the Lipskys' water well,
including over one mile of layers of rock, much of which is impermeable, and the
demonstrated wellbore integrity of the Gas Wells, it is simply not possible for gas to have
migrated out of the Barnett Shale formation into the Lipskys' water well as a result of any
of Range's operations. Nonetheless, despite a complete lack of evidence that Range's
operations contributed in any way to gas in the well, Range immediately began a thorough
investigation. The Railroad Commission also conducted an investigation, and Range
cooperated in the Railroad Commission's investigation and performed every test,
inspection, and analysis that the Railroad Commission requested Range to conduct.
Alisa Rich Hatches an Plan to Use the EPA to Blame Range — Regardless of the Truth
F. The Plaintiffs hire anti-drilling activist Alisa Rich.
18. The Lipskys first contacted anti-drilling activist Alisa Rich in early August
2010 after having been told to watch the environmental activist "documentary" Gasland.
See Exh. 2 (p. 85:6-24). Rich is an environmental activist who is an outspoken opponent
of the oil and gas industry and serves as a hired gun for plaintiffs lawyers who attack the
oil and gas industry. Rich seeks out opportunities to use her alleged "credentials" to
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 12
attack the natural gas industry — especially in the Barnett Shale. Rich has misrepresented
her academic record and has misrepresented her qualifications, including falsely stating
repeatedly that she held a Ph.D. when she did not. See Exh. 6 (p. 40:2-12). Rich is a paid
witness for a plaintiff in another lawsuit against Range and at least one other lawsuit
against another oil and gas exploration company active in the Barnett Shale. In the other
lawsuit against Range, the court excluded Rich from testifying as an expert witness
because her methodologies, tests, conclusions, and opinions are fundamentally flawed and
unreliable as evidence in a court of law. See Exh. 17. By her own admissions under oath,
Rich is not an engineer of any kind, is not a geologist, is not a geophysicist, is not a
toxicologist, and has never been qualified by any court anywhere to testify as an expert on
any subject matter. See Exh. 6 (p. 26:9-24; 31:11-15). Moreover, Rich has shown that
she is not above changing data and misrepresenting results to allow her to reach pre-
determined and desired conclusions, and her previous "studies" have been roundly criticized
as biased and lacking proper methodology and analysis. Not surprisingly, every time Rich
purports to find any sort of constituent in the air or water, she pins the blame on natural
gas drilling and production and rejects any other logical, scientifically established, and
actual source.
19. Prior to being hired by the Lipskys, and before she obtained any data or
conducted any tests, Rich had already decided that Range would be blamed for gas in
Lipskys' water well. Rich's August 9, 2010 project proposal to Mr. Lipsky stated that
lilt is our understanding that recent gas well development has occurred in the county and
near your property," and "[d]evelopment of the gas industry in a residential area can
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 13
cause general annoyance to human population as well as noise, vibration, air, water and
soil contamination." See Exh. 7. Rich proceeded to propose a set of air and water tests
designed to support her already established conclusion — that any alleged air and water
contamination experienced by Plaintiffs was caused by Range. Mr. Lipsky accepted the
proposal and permitted the testing.
20. One day after her proposal letter to Mr. Lipsky, Rich began perfoiming
alleged air and water quality "tests" at the Plaintiffs' property designed to support her pre-
determined conclusions. The samples obtained by Rich were not obtained in a manner
consistent with established testing protocols and are not reliable. For example, Rich had
her 19 year old son (who she describes as her "technician") collect the water samples
from Lipskys' water tank. In taking the samples, Rich's son stuck his hand down into the
water to obtain the sample. See Exh. 6 (p. 76:9 — 77:25). Moreover, consistent with her
typical misuse of test data, the air test results reported by Rich were not compared to the
proper health and safety standards as published by the Texas Commission on
Environmental Quality. And, when the lab results showed no surfactants in the Lipskys'
well water, Rich sought a different test from another lab. See Exh. 18.
G. Rich contrives a scheme to bypass Texas authorities and use the EPAto attack Range's drilling operations.
21. Within three days of her project proposal letter to Mr. Lipsky, and before
any test results were available, Rich devised a plan or "strategy" to bypass the proper state
authorities (the Railroad Commission) and get the EPA involved. Rich knew the Railroad
Commission was conducting its own independent investigation into the Lipskys' complaint,
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 14
but Rich's strategy was to cut short the Railroad Commission's investigation by getting
the EPA to intervene. Rich's ploy was to question the Railroad Commission's neutrality
(although the Railroad Commission had made no findings at that time and had an active
ongoing investigation), and undermine its regulatory authority.' In an August 12, 2010 e-
mail from Rich to Mr. Lipsky, only six days after Mr. Lipsky first contacted the Railroad
Commission and before any of Rich's tests were complete, Rich revealed her scheme to
Mr. Lipsky:
Steve,
I left a message for you earlier today regarding an air test at the wellhead. Yes,I know it is expensive - but after serious consideration I am stronglyrecommending we take an air sample 5 feet away from the hose that is hooked up to the wellhead. This is my thinking... TCEQ does not have anyjurisdiction over water, only the RRC - and you saw how helpful they were. Just wait, it gets better. However, TCEQ has total jurisdiction over air emissions.Once the natural gas leaves the water it is an airborne issue; and therefore falls intotheir laps to get involved - which they will jump because they are in the middle ofSunset Review (oversight by the EPA).
Also, I can then contact the EPA and discuss the fact that we have a multi-issue environmental concern, including potential for explosion AND impact tohuman health (especially children) they will be very receptive.
It is worth every penny if we can get jurisdiction to the EPA whooversees TCEQ. I would like to get my tech out there tomorrow if you approve ofthis strategy. Please advise.
Exh. 8 (emphasis added).
22. The August 12 e-mail clearly evidences Rich's plot, quickly approved and
adopted by Mr. Lipsky, to manufacture a level of alleged "contamination" of outside air to
Rich actually had no interest in "neutrality" because her underhanded plot included inducing the EPA'sinvolvement. The head of the EPA region covering Texas is Dr. Alfredo Armendariz ("Armendariz"), aself-professed environmental activist.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 15
get the EPA involved in the process and, at the same time, to blame Range (and, indirectly,
the natural gas drilling industry) for a contrived problem that Range did not cause. Rich
devised that an air monitor be set up 5 feet away from the hose hooked up to the wellhead.
The hose that Rich would monitor is not a hose that carries water from the water well, but
is a hose directly attached to a gas vent, the very purpose of which is to vent gas from the
head space of the water well. In other words, Rich proposed to take measurements of the
gas levels at Lipskys' property at a location that she knew would yield high gas readings,
which Rich knew would misrepresent the actual air quality at Lipskys' property. Rich and
Plaintiffs decided to intentionally turn a blind eye to the objective facts and moved forward
with Rich's plot to get the EPA involved.
23. Rich's scheme to take air tests using flawed methodology was also
necessary because Rich knew that water test results would not provide support for any
regulatory intervention by the EPA. According to Rich's sworn deposition testimony:
I — [Mr. Lipsky] and I — [Mr. Lipsky] had wanted to get the EPA involved, and mypoint was that if you don't have any results, you can't ask the EPA to jump in oversomething that you have no results. And his results were only with the RailroadCommission. And the test results from the water are not going to becompelling enough nor are they going to be high enough to cause animminent -- imminent danger.2
See Exh. 6 (p. 266:5-19). In other words, Rich knew that the testing that had been
performed or that she was performing would not show any imminent danger, so she
concocted, and the Lipskys agreed to, a plan to perform a sham test to get her desired
2 The EPA only has jurisdiction under the Safe Drinking Water Act if, among other conditions precedent,
there is an imminent and substantial endangetnient to the health of persons and that appropriate state andlocal authorities have not acted to protect the health of such persons. 42 U.S.C. § 300i.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 16
results, by using test conditions that would artificially and falsely make it appear that
imminently "dangerous" conditions existed at Lipskys' home. The Plaintiffs' approval,
support, and assistance of the plan allowed Rich's scheme to move forward.
H. Rich lobbies the EPA with distorted data and incomplete information.
24. Ten days after her testing began, Rich contacted the EPA. In an internal
EPA e-mail dated August 20, 2010 and attached as Exhibit 9, Willie Lane, Chief of the
Water Resources Section of Region VI of the EPA, discusses a call initiated by Rich to
the EPA. Rich told Lane that she "was very concerned. . . about the ongoing risk to Mr.
Lipsky and his family." In reality, the Lipsky family was in no danger since, as of late
July, Mrs. Lipsky and the children were out of town visiting Mrs. Lipsky's parents, Mr.
Lipsky had moved to the guest house, nobody was using the water from the water well,
and given the water treatment system, there was no likelihood of any harmful natural gas
entering the Lipsky home. See Exh. 2 (p. 82:23-83:23). Rich also reported to the EPA
that she "had detected methane, ethane, propane and butane gases" at the Lipsky property
(which simply is consistent with the known presence of natural gas in the aquifer for
many years).
25. In furtherance of the scheme, Rich told the EPA that Mr. Lipsky was able to
"light his water hose." See Exh. 9. To illustrate this misleading statement, Rich provided
to the EPA a video of the "water hose" which was actually connected to the gas vent on the
well. See Exh. 9. Mr. Lipsky has falsely claimed that he can light his water on fire and
that statement has been repeated to the media. See Exh.10. At least two local television
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 17
stations ran stories on their nightly newscast showing excerpts from a video that purports to
show Mr. Lipsky's "water" on fire. In fact, what is actually being lighted in the videos is not
water at all — it is gas coming from a water hose attached to the gas vent located on top of
the water well. A photograph of the Lipsky water well is shown below
Lipsky Water Well With Green Garden Hose Attached To Vent
The photograph shows the green hose (the same one shown in the Lipsky videos) attached
to a valve specifically installed on this water well, as on many other water wells in the area,
to vent gas from the top of the well. It should come as no surprise that a vent designed to
release gas from a water well will, in fact, sometimes release gas, and that the gas may
LIPSKY V RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 18
light if the owner holds a match to it. However, water does not come out of the vent, nor
does water come out of the green water hose attached to the vent. It is obvious that the
green garden hose was attached to the gas vent to mislead the media and others into
believing that water was being lighted on fire, as opposed to gas, to support the false
claims against Range.
26. Indeed, the Lipskys' own actions cause or contribute to any build up of the
naturally occurring gas in his water well. Even though his water well was equipped with
a vent specifically installed to release the headspace gas, Mr. Lipsky routinely closes the
gas vent valve on the water well, which allows the natural gas to build up in the
headspace of the water well. Keith Wheeler, a hydrologist and expert on subsurface
groundwater investigations, testified that there would be no safety or health issues at all if
the Lipskys' water well vent was properly left open. See Exh. 15 (p. 202:14-20). Rather
than acting in a reasonable manner to reduce the presence of gas in his well, Mr. Lipsky
closes off the valve and allows the naturally occurring gases to build up so he can attempt
to light the hose attached to the vent on fire, just as he did when Mr. Wheeler was on the
Lipsky property to conduct air, soil, and water testing in connection with the Railroad
Commission proceeding. See id. (p. 183:13-20).
27. In the August 20, 2010 EPA e-mail, Mr. Lane of the EPA recounted that
Rich stated she saw Mr. Lipsky "light his water hose" and "that a 10-foot flare was the
result". See Exh. 9. The e-mail also reflects that Rich said "she had a video of [a 10 foot
flare from the hose] and that she had sent it to [Regional Administrator Al Armendariz]
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 19
and that she would send me a copy." No photographs or videos obtained by Range
pursuant to a subpoena issued from the Railroad Commission proceeding show any water
from a water hose on fire. The hose pictured and discussed above, is not a hose for water
at all, but is used solely for the purpose of venting gas. Rich's and the Lipskys' attempts
to characterize the lighting of the hose connected to the gas vent as "water on fire" is
wrong, and a gross distortion of the truth.
28. Mr. Lipsky also provided Rich's intentionally flawed test results to the EPA
and the Railroad Commission. On December 2, 2010, the Lipskys, through their attorney
David Ritter, wrote a letter to the EPA and included a summary of Rich's flawed test
results. In the letter, attached as Exhibit 11, Mr. Ritter concluded that "[t]he proximity of
[the Range wells], the timing of the contamination, and the composition of both the water
and air contamination raises serious questions regarding the origin of the contamination."
The letter from Mr. Ritter also referred to "the apparent impact of natural gas exploration
on the Lipsky's [sic] drinking water as well as the larger aquifer system." These assertions
made by the Lipskys' attorney, Mr. Ritter, based on Rich's unobjective testing and
analysis, have been shown to be false.
29. Despite the clear language of the August 12, 2010 e-mail from Rich to Mr.
Lipsky, Rich initially denied under oath that she devised a scheme and presented it to Mr.
Lipsky. In her deposition taken in connection with the Railroad Commission matter,
Rich denied e-mailing Mr. Lipsky about her planned strategy:
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 20
Q. Did you ever write Mr. Lipsky an e-mail advising him of a strategy to get theEPA involved in his case?
A. Mr. Lipsky -- I don't recall an e-mail, no. Mr. Lipsky actually asked me aquestion about the EPA. I don't recall ever saying, "Hey, you need to call theEPA," no. Did he ask me about that? Yes. Did he ask my opinion? He probablyasked my opinion about it. But I don't recall ever producing an e-mail -- well, Iknow I don't have an e-mail, I will tell you that. I did not find any e-mail otherthan the ones that I submitted."
Q. Did you ever advise Mr. Lipsky of a strategy to take air samples, and how totake them, to get the EPA involved in his case?
A. No, sir. No, sir.
See Exh. 6 (p. 114:23 — 116:13). Only after being confronted with a copy of her August
12, 2010 e-mail — which she had failed to produce from her own records — did she
acknowledge the scheme she proposed to Mr. Lipsky:
Q. Well, on August the 12th in your e-mail, don't you say, "I would like to getmy tech out there tomorrow if you approve of this strategy. Please advise." Thoseare your words.
A. That is what I said.
See id. (p. 261:19-24).
30. Rich also falsely denied having multiple contacts with the EPA. In her
January 18, 2011 deposition in connection with the Railroad Commission proceeding, Rich
swore that she had no contacts with the EPA other than a chance meeting at the Lipskys'
house one day when the EPA was there. See Exh. 6 (p. 133:1-134:6). However,
documents produced by the EPA prove otherwise. The August 20, 2010 e-mail from
Mr. Lane shows that Rich initiated a call to Mr. Lane on August 20, 2010 to discuss her
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 21
tests on the Lipskys' property. See Exh. 9. As reflected by the same e-mail, Rich told Mr.
Lane that she had e-mailed Armendariz a video of the gas from the vent hose being burned.
31. As Rich and Mr. Lipsky were implementing the plan and scheme to falsely
blame Range for the alleged contamination, Range was conducting a thorough, good faith
investigation to determine the actual source and extent of the gas in the Lipskys' water
well. Range's investigation confirmed that natural gas existed in the Trinity Aquifer long
before Range drilled the Gas Wells. Range obtained testimony from multiple witnesses
with knowledge about drilling water wells in the Silverado area and photographs showing
the presence of gas in shallow water wells in the Silverado area long before Range had
initiated any operations in the area. At considerable expense, Range retained the services
of a team of experienced, independent experts in groundwater investigations. Range also
retained the services of an independent hydrogeologist with many years of experience in
subsurface investigations to assist in preparing the plan for testing water wells in the
Silverado area. The tests and investigation showed that the source of the natural gas in the
Lipskys' water well is from the Strawn formation, a shallow gas-bearing geological
formation located immediately below the Trinity Aquifer. The Strawn formation,
approximately a mile above the Barnett Shale, is in direct contact with the formation
containing the Trinity Aquifer into which some water wells in the immediate area have
actually been drilled.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 22
I. The Lipskys benefit from the plot by claiming the house wasuninhabitable in order to slash their real property taxes.
32. The Lipskys took advantage of the claim that natural gas was present in the
water well by using the claim to have their tax burden slashed. The Lipskys sought and
received an ad valorem tax break that slashed their property value from approximately
$2.4 million to $300,000, resulting in a reduction of their property taxes from what
would have been approximately $50,000 per year to approximately $6,000 per year. See
Exh. 2 (p. 75:14 — 76:10), Exh. 4. Despite living in an approximately 15,000 square foot
house on approximately 14 acres with a resort style pool, a 30-zone sprinkler system, a
sizable guest house, and a pier and beach right on the Brazos River, the Lipskys sought
and received a valuation of approximately $25,000 on the structures, and approximately
$275,000 on the land. See Exh. 4.
33. The Lipskys' property tax consultant obtained the reduction in or about
September 2010 by showing the appraisal board one of Mr. Lipsky's videos of gas from
the gas vent being lit. See Exh. 5. An Appraisal Review Board member can be heard
saying "It's fire [] coming out." See id. The Lipskys' property tax consultant responds
by saying, among other things, "they can't live in the property that the gases are in the
house as well now." See id. In fact, Mr. Lipsky testified under oath that he may have
told "friends and family" that Range would own his property within a year. See Exh. 2
(p. 133:25 — 134:12). Indeed, the property tax consultant also stated that "probably this
time the next year, the gas company will own" the property, which evidences that,
consistent with Rich's scheme, Mr. Lipsky had already determined to blame Range, even
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 23
though the Railroad Commission was still investigating his claims, and notwithstanding
that there is no evidence to implicate Range. See Exh. 5. Moreover, contrary to the
representation to the Appraisal Review Board that the house was uninhabitable, Mr.
Lipsky testified that he and his family were living in the main home in September of
2010 and continued to live in the home. See Exh. 2 (p. 137:4-21). Based on false and
misleading information, the tax commissioners reduced the value of Plaintiffs' property,
resulting in a tax savings to Plaintiffs of approximately $44,000 per year.
J. Relying in part on Rich's baseless allegations, and despite any validdata or any imminent danger, the EPA issues an "emergency" orderwithout any prior notice to Range.
34. Almendariz is the EPA Administrator for Region VI (which includes
Texas). Based on EPA documents, it is clear that Rich, in implementing the plan and
scheme to involve the EPA, sent Armendariz a video of Mr. Lipsky lighting the end of
the hose hooked up to the gas vent on the water well. See Exh. 9. Armendariz is a self-
described environmental activist who was a professor at SMU, a consultant to
environmentalist groups, and was critical of Barnett Shale drilling and operations prior to
his appointment to the EPA.3
35. On December 7, 2010, without prior notice to Range, without offering Range
an opportunity to be heard, and without even sharing the purported evidence on which it
relied, EPA issued an ex parte order, despite evidence to the contrary, expressly concluding
that Range caused or contributed to the gas in the Lipskys' water well. EPA further found
A_rmendariz was featured in Gasland and was critical of drilling and production operations in the BarnettShale.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 24
that the Railroad Commission had not taken sufficient action, even though the Railroad
Commission had been actively investigating Lipsky's complaint since August 2010. Under
the guise of its "emergency" authority, EPA ordered Range, among other things, to (i)
submit a plan for EPA's approval to perform testing on every private water well located
within 3,000 feet of the wellbore tracks of the Gas Wells, and (ii) submit a plan to
identify gas flow pathways to the entire Trinity Aquifer, eliminate gas flow to the entire
aquifer, if possible, and remediate the areas of the entire aquifer that have been
impacted.4
36. The EPA has admitted that, prior to issuing the order, it was aware that
water wells in the area of the Lipsky well had experienced significant amounts of natural
gas years before Range drilled the Gas Wells. Nonetheless, the EPA dismissed all
alternative scenarios as to how gas may be occurring in the Lipsky well and blamed
Range — but even when asked, the EPA stated it had no idea how Range's Gas Wells
might have impacted the Lipsky water well. See Exh. 16 (pp. 57, 60-61, 94-100, 215,
222-228). Prior to issuing the order, EPA also knew that Lipsky had ceased using the
water well, that Lipsky had a water purification system, and that EPA's own water tests
on the Lipsky well revealed no quantities or constituents that posed any health concerns.
See Exh 16 (pp. 155-161, 176, 224). At the time the EPA issued its December 7th order,
4 In its unilateral Order, EPA said that the Trinity Aquifer covered a 20 county area and, thus, the Ordercontemplated that Range would incur the cost and expense of testing, eliminating gas flows, andremediating the aquifer over an extremely large area that had absolutely nothing to do with any gas in theLipsky well. Actually, the Trinity Aquifer covers much more than 20 counties and extends, in Texas,from the Red River all the way to the northern portions of Medina and Uvalde counties.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 25
there was no human health or safety risk or any reasonable likelihood of such a
circumstance.
37. EPA also failed to perform any evaluation of the geology in the area of the
Lipsky water well, failed to consider that the natural gas-bearing Strawn formation,
which lies directly below the Trinity Aquifer, could be causing the gas in the Lipsky well,
and failed to make any attempt to determine if there was a pathway from the producing
zones of the Gas Wells to the aquifer, by which gas could have migrated over one mile
through layers of rock to the location of the aquifer. See Exh. 16 (pp. 95-96, 98-100,
106-107, 164, 170-71, 223). However, despite having no evidence to even suggest, let
alone support, any gas migrating from the Gas Wells, the EPA issued its order, based in
part on Rich's flawed test results, Rich's misrepresentations on behalf of herself and the
Lipskys, and a flawed isotopic analysis that EPA's own experts cautioned was
insufficient to conclude that Range caused the contamination. See Exh. 16 (pp. 116-117,
121-123, 263-275). EPA then systematically cherry-picked information to allegedly
"support" the order by intentionally excluding all information that proved that Range did
not cause the alleged contamination in the Lipskys' water well, even to the extent of
disregarding the EPA's own technical staff's advice that the EPA's information was
insufficient to support a conclusion that Range caused the presence of natural gas in the
Lipskys' water well. See Exh. 16 (pp. 42-58, 183-184, 263-275).
38. Almost immediately after issuing the order, Armendariz sent the following
email:
We're about to make a lot of news. The first story has already been printed.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 26
There'll be an official press release in a few minutes. Also, time to Tivochannel 8. Bug [an EPA public infoi nation employee] for more info.
See Exh. 12. Armendariz also made statements to the media in which he inaccurately
claimed that EPA's scientists and engineers had established that Range had caused the
contamination in the Lipsky water well. These statements were published and broadcast
by these media outlets causing significant harm to Range and its shareholders.
39. However, approximately one month after the issuance of the order and
Armendariz's damaging statements to the media, John Blevins, the EPA official who
actually signed the order, testified under oath that Range may not have caused or
contributed to the gas in the Lipsky water well. Contrary to Armendariz's statements to
the media and the express words used in the order, Blevins would only say that Range
may have caused or contributed to the gas in the Lipsky well and that EPA, even then, did
not actually know what the source of the gas was. See Exh. 16 (pp. 223, 225-228). By
then, however, EPA had already issued the order and had already labeled Range in the
media as a polluter of drinking water, all without any notice or hearing and, by EPA's
own admission under oath, without evidence to back up its allegation.
K. The Railroad Commission schedules a hearing to determine whether Rangecaused or contributed to the presence of gas in the Lipsky water well.
40. On December 8, 2010, the Railroad Commission scheduled a hearing to
consider whether the Gas Wells caused or contributed to contamination of certain
domestic water wells in Parker County, Texas. The Railroad Commission directed Range
to appear at the hearing and present evidence on this issue and invited the EPA and the
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 27
Lipskys to appear at the hearing, which, not surprisingly, the EPA and the Lipskys
refused to do.
41. To prepare for the Railroad Commission hearing, Range endeavored to obtain
evidence voluntarily from Mr. Lipsky, Rich (through the Lipskys' attorneys Allen Stewart
and David Ritter), and the EPA, but they all refused to cooperate. Range obtained
"commissions" from the Railroad Commission authorizing the necessary depositions of Mr.
Lipsky, Rich, and representatives of the EPA. Once again, Mr. Lipsky, Rich, and the EPA
resisted the depositions that would aid in the investigation. The EPA informed Range that it
would ignore the commissions and that its representatives would not testify as to the basis
of the EPA's accusations. Lipsky's attorneys, Allen Stewart and David Ritter, filed
motions in Denton and Tarrant County district courts regarding Mr. Lipsky's and Rich's
depositions as a delay tactic, and refused to produce Mr. Lipsky and Rich for deposition.
Range offered to conduct the depositions at a mutually convenient time, but the Lipskys'
lawyers — the same lawyers representing the Lipskys in this case — simply refused.
42. Instead of cooperating in the investigation to determine the source of the gas
in the Lipsky water well, Rich and Lipskys' attorneys, Allen Stewart and David Ritter,
thwarted the investigation and subverted the Railroad Commission's jurisdiction by
stonewalling discovery as to Mr. Lipsky, Rich and her "tests." Mr. Lipsky's, and his
attorneys', actions were not consistent with someone desiring to discover the truth.
43. After a discovery hearing at the Railroad Commission, Mr. Lipsky finally
appeared for a deposition. Other depositions were also taken, including the depositions
of Larry Peck and Leland Malone, two water well drillers with extensive experience
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 28
drilling water wells in Parker County. The Lipskys, through their attorneys in this case,
participated in the discovery phase of the Railroad Commission proceeding, including the
depositions of Mr. Lipsky, Rich, and the two water well drillers. In fact, the Lipskys'
attorneys questioned the water well drillers at length in a futile attempt to find anything
that might be used to blame Range. Even though the Lipskys and their attorneys' (Allen
Stewart and David Ritter) participated in the discovery phase of the Railroad
Commission's hearing, neither the Lipskys nor their attorneys appeared at the hearing —
obviously because they had no evidence to support their allegations against Range —
notwithstanding that the Railroad Commission had invited them to attend and participate
and they had more than an adequate opportunity to appear and litigate the facts made the
basis of the Lipskys' claims against Range.
L. Despite no evidence of Range's culpability, Range was required to investigate and assist nearby homeowners.
44. Despite the complete lack of any evidence that Range caused any water well
contamination and extensive evidence proving that the gas in the Lipsky water well derived
from other sources, and as a result of Mr. Lipsky's complaint, Range was required to
expend substantial time and money in determining the source of the gas in the Lipsky
well.
45. At the Railroad Commission's request, Range also assisted the Lipskys and
other Silverado homeowners during the course of the investigation, including the
following:
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 29
• Range tested the outside air, the air from the headspace of water wells, andthe water from the water wells for more than 20 residents, some of whomlived more than one mile from the Gas Wells;
• Range made provisions to have water supplied or to reimburse the cost ofwater for the Lipskys and another homeowner;
• Range provided natural gas monitors for in home usage for nearbyhomeowners — including the Lipskys; and
• Range regularly communicated with area residents to keep them apprised ofRange's investigation including providing each owner of a water well thatwas tested with the test results for their wells.
46. The extensive testing conducted by the independent experts retained by
Range reaffirmed that the Gas Wells and Range's operations did not cause the gas in any
water wells in the Silverado area.
M. Range presents evidence to the Railroad Commission establishing no link between Range's operations and the Lipsky water well.
47. At a two day evidentiary hearing called by the Railroad Commission
beginning on January 19, 2011, Range proved that there is no causal relationship between
the Gas Wells and the Lipskys' water well or any gas in any water well in the Silverado
area. Range presented some of the foremost, independent experts in hydraulic fracturing,
geochemistry, geology, hydrogeology, and petroleum engineering. Those experts testified
that hydraulic fracturing cannot be a contributing cause to the presence of natural gas in
the Lipskys' water well, and presented evidence relating to geochemical gas
fingerprinting establishing that the source of the gas in the Lipskys' water well is the
shallow, gas-bearing Strawn formation immediately below the aquifer and not the deep
Barnett Shale formation. The evidence also proved the mechanical integrity of the Gas
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 30
Wells, and pressure tests and cement bond logs proved that there are no leaks, and that the
Gas Wells are not a possible source of the gas in the Lipskys' water well. Range presented
evidence of the extensive sampling of water wells in the area of the Lipskys' water well
which showed that there are no public health or safety issues with drinking or using the
water or the water wells, including the Lipskys' water well, as long as the water wells are
properly vented to prevent the accumulation of natural gas in the headspace, as is
customary with water wells that contain naturally-occurring gas.
48. The independent experts concluded, like others have, that the gas in the
Lipskys' well is from the shallow gas-bearing Strawn formation, and the gas did not come
from the much deeper Barnett Shale. Indeed, the evidence proved that it was impossible
for gas to have migrated to the Lipsky water well as a result of Range's fracing of the Gas
Wells over one mile below the Trinity Aquifer. Instead, the migration of gas from the
Strawn formation to the aquifer is naturally occurring, and it has been accelerated by the
numerous water wells drilled in the Silverado area in the past ten years, including into the
Strawn formation, the continuing drawdown of the aquifer because of the increased
number of water wells and large homes, and nearby shallow gas wells that were drilled
into the Strawn formation in the past. Indeed, the Lipskys' attorney, David Ritter,
admitted in his December 2, 2010 letter to the EPA that the Lipskys used large amounts
of well water for, among other things, filling their swimming pool, and for irrigation
purposes. See Exh. 11. Ritter told the EPA that the Lipskys installed a 5000 gallon
holding tank to meet the anticipated needs of the primary residence, which is
approximately 15,000 square feet, and which they moved into in or about September
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 31
2009. He also stated that, "The Lipskys noticed that the cycle was taking progressively
longer to fill up their holding tank, especially after agricultural watering was completed, a
process which typically used 2000-3000 gallons." See id.
49. In addition, the extensive air, soil-gas, and water tests conducted by highly
qualified experts revealed that none of the chemicals and other constituents in any of the
wells exceeded the applicable government health standards for drinking water and that the
water was safe to drink. Regarding the outside air testing, Range's tests revealed that
methane, ethane, and propane levels were all less than 0.05% of the applicable Lower
Explosive Limit, which is the lowest concentration of a gas in the air that will burn if
there is an ignition source present.
50. The Lipskys and their lawyers, Stewart and Ritter, apparently realizing that
they had no evidence to present to the Railroad Commission that implicates Range,
declined to attend the hearing and present evidence in support of their allegations. The
Lipskys' failure to show up at an open forum designed to get to the bottom of their own
allegations speaks volumes as to the utter lack of evidence supporting those allegations.
N. Based on extensive evidence, the Railroad Commission declares thatthe Gas Wells did not cause or contribute to any contamination of theLipsky's water well.
51. After a complete analysis of the two days of testimony and the thousands of
relevant documents, the Railroad Commission determined that the Gas Wells and
Range's operations did not cause or contribute any natural gas in the Lipsky water wells.
Specifically, the Railroad Commission's Final Order declares that "the operations of the
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 32
[Range] wells have not caused or contributed, and are not causing or contributing to
contamination of any domestic water wells." See Exh. 13 (emphasis added).
52. The Railroad Commission's final order also adopts the Examiners' Report
and Proposal for Decision. See Exh. 14. The findings and opinions of the Examiners
include the following:
1. "[T]he most likely sources of gas in the Lipsky well. . .is the shallowStrawn formation";
2. "Gas found in [the Lipsky water well] does not match the nitrogenfingerprint of Barnett Shale gas."
3. "The Butler and Teal wells have mechanical integrity which will preventany migration of gas out of the Barnett Shale."; and
4. "Steven Lipsky. . . [was] provided notice of this hearing . . . Mr. Lipsky . . .did not appear or participate in the evidentiary hearing."
0. Rich's plan and scheme has significantly harmed Range.
53. As a result of Rich's plan and scheme to falsely accuse Range of
contaminating the Lipsky water well and the Lipskys' willful agreement and complicity
in such false accusations, Range incurred substantial costs in proving its innocence in the
Railroad Commission hearing, defending itself in proceedings regarding the EPA's order,
providing accommodations to the Lipskys and another homeowner, and has incurred
substantial attorneys' fees. Moreover, the media reports have caused significant haim to
Range's reputation in the community and in the other areas where Range operates
resulting from, among other things, false accusations on the internet against Range.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 33
ANSWER PURSUANT TO THE TEXAS RULES OF CIVIL PROCEDURE
54. The previous paragraphs and allegations are incorporated by reference as if
fully set forth herein. In accordance with the Texas Rules of Civil Procedure, Range
denies the allegations in Plaintiff's Original Petition and demands that they be proved by
a preponderance of the evidence as it is entitled to under law.
AFFIRMATIVE DEFENSES
55. The previous paragraphs and allegations are incorporated by reference as if
fully set forth herein into each affirmative defense.
56. Plaintiffs cannot collaterally attack the findings and determinations in the
Final Order of the Railroad Commission signed on March 22, 2011.
57. Pleading in the alternative, if necessary, Plaintiffs' claims are subject to the
primary jurisdiction of the Railroad Commission.
58. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by the doctrine of collateral estoppel.
59. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by the doctrine of res judicata.
60. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by laches.
61. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by waiver.
62. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by acquiescence.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 34
63. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by an unavoidable accident or event.
64. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by an act of God.
65. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited because of Plaintiffs' negligence and/or other tortious and wrongful conduct.
66. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited because of the doctrine of sole cause.
67. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited because of Range's compliance with all required peimits, rules, and regulations.
68. Pleading in the alternative, if necessary, Plaintiffs' claims are barred or
limited by Plaintiffs' failure to mitigate their alleged damages.
69. Pleading in the alternative, if necessary, Plaintiffs are not entitled to
exemplary damages.
70. Pleading in the alternative, if necessary, Plaintiff's claim for pre-judgment
interest is limited by the dates and amounts set forth in Chapter 304, Texas Finance Code
and Chapter 41, Texas Civil Practice and Remedies Code.
71. Pleading in the alternative, if necessary, any award of exemplary damages
is controlled and limited by Chapter 41.008 of the Texas Civil Practice and Remedies
Code including the requirement that Plaintiffs prove their claim by clear and convincing
evidence — which they cannot do.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 35
72. Pleading in the alternative, if necessary, any award of exemplary damages
is controlled and limited by the Due Process Clause of the 14th Amendment of the United
States Constitution, and by the Due Process Clause of the Texas Constitution.
COUNTERCLAIM AGAINST LIPSKYS
Discovery Control Plan
73. Plaintiffs allege that discovery should be conducted in accordance with
Level 3 of the Texas Rules of Civil Procedure, including the entry of a scheduling order
tailored to the circumstances of this suit.
A. Civil Conspiracy and Aiding and Abetting
74. The previous paragraphs and allegations are incorporated by reference as if
fully set forth herein.
75. The Lipskys conspired with Rich in a strategy to get the EPA involved by
using false and misleading infoimation to manufacture a non-existent imminent danger
and to falsely blame Range's operations for the alleged contamination. 5 On August 12,
2010, Rich sent an email to Mr. Lipsky describing a strategy in which Rich would place
air monitors 5 feet away from the gas vent of the Lipskys' well in order to create
artificially high air contaminant results. See Exh. 8. Rich told Mr. Lipsky that these
results would be the "evidence" they needed to get the EPA involved. Upon the Lipskys'
approval, Rich perfoitued air and water tests, and presented her results in such a way as
to bolster her pre-determined conclusion that the Lipskys' well was contaminated as a
In the alternative, Shyla Lipsky agreed to, authorized, or acquiesced in, the disparaging statements madeby Steven Lipsky and in the conspiracy with Rich.
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL
ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 36
result of Range's actions. Rich had communications with Armendariz and other EPA
personnel. See Exh. 9. The EPA used Rich's false and misleading information in issuing
the draconian ex parte order against Range on December 7, 2010. Range was publicly
branded as a polluter threatening to cause homes to explode. In the petition, the Lipskys
rely solely on the existence of the EPA order for causation, yet they and Rich conspired
to have the EPA issue the order by presenting false and misleading infoimation to the
EPA.
76. The Lipskys and Rich had a meeting of the minds and entered into a
conspiracy to harm Range. The object of the conspiracy was to make false and damaging
accusations that Range's operations had contaminated Lipskys' water well. As a
proximate result of this defamatory and/or disparaging conduct, Range's reputation has
been greatly damaged and Range has incurred substantial costs and expenses in
defending itself.
B. Defamation and/or Business Disparagement
77. The previous paragraphs and allegations are incorporated by reference as if
fully set forth herein.
78. The Lipskys are liable to Range for defamation and/or business
disparagement. The Lipskys published defamatory disparaging words regarding Range.
Moreover, the Lipskys intentionally made statements and/or provided false and
misleading video clips to the media to convey the wholly false message that their
drinking water was flammable, when they knew that the hose was attached to the gas vent
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 37
on the well. The Lipskys deliberately allowed multiple media outlets to falsely report
that their "drinking water" was flammable and to falsely blame Range.
79. The LipsIgs' defamatory and disparaging words and conduct were
committed with malice in an attempt to injure Range and injure Range's reputation in the
community. The Lipskys had no privilege for their disparaging conduct.
80. As a proximate result of their defamatory and/or disparaging conduct,
Range's reputation has been greatly damaged and Range has incurred substantial costs
and expenses in defending itself against such tortious conduct. Range seeks actual
damages of at least $3 million dollars. Range also seeks to recover punitive or exemplary
damages from the Lipskys.
GROUNDLESS ALLEGATIONS
81. The previous paragraphs and allegations are incorporated by reference as if
fully set forth herein.
82. Range seeks relief pursuant to Texas Rule of Civil Procedure 13. The
Lipskys' Original Petition against Range is groundless and was brought in bad faith or for
the purpose of harassment. At the time of filing of the petition, the Lipskys and their
lawyers, Stewart and Ritter, knew that the Railroad Commission had made final findings
that Range's activities — the same activities cited by the Lipskys in their petition — did not
cause or contribute to any gas found in Lipskys' water well. This finding came after
months of investigation, after a two day evidentiary hearing, and after the submission to
the Railroad Commission of thousands of pages of scientific data and documents. The
Lipskys were invited to offer any evidence they might have in their possession at the
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 38
Railroad Commission hearing, but they declined the invitation, despite the fact that they
initiated the Railroad Commission complaint in the first place. Although the Railroad
Commission made its determination absolving Range of any blame, the Lipskys willfully
bring the same claims in their Original Petition.
83. Mr. Lipsky's own deposition testimony establishes that the claims against
Range are without any basis in fact. At his deposition, taken after the EPA had issued its
erroneous order, Mr. Lipsky admits he has no answer as to why there might be gas in his
water well:
Q. You, personally, have made no investigation as to what may have caused gas --natural gas, to get in your well water, have you?
A. I spent over $6,000 in lab testing, which I was hoping would be conclusive.Called the Railroad Commission, I don't know, 40, 50 times for hours on endtrying to get them to tell me what happened. Called everybody, EPA -- I mean,my whole goal to this day, as I tell everyone, I won't stop. What happened?
Q. As you sit here today, do you have an answer as to what happened?
A. Not yet. But I will, hopefully.
See Exh. 2 (p. 186:3-16). Mr. Lipsky's attorneys, Allen Stewart and David Ritter, both
attended his deposition and were present when he declared his lack of information
regarding the cause of the alleged gas in his water well. Moreover, they are both aware
of the Order of the Railroad Commission and the overwhelming evidence supporting the
Order.
84. Since Mr. Lipsky's deposition, and prior to the filing of this suit, the
Railroad Commission has issued its Final Order absolving Range and stating that the Gas
Wells did not cause or contribute to any natural gas that may be in the Lipskys' water
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well. See Exh. 13. Moreover, the fact that the Strawn formation is a gas-bearing
formation, and the evidence of natural gas in water wells in the area that pre-date Range's
arrival, is irrefutable, as are the well integrity tests perfouned on the Gas Wells which
were observed by Railroad Commission personnel. In addition, Blevins testified, on
behalf of the EPA, that the EPA (1) dismissed (without investigation) all alternative
sources of the gas in the Lipsky water well, (2) did not do any evaluation of the geology,
(3) failed to consider the gas-bearing Strawn formation, and (4) failed to determine if a
pathway even existed for gas to migrate from the production zones of the Gas Wells to
the Lipsky water well. See Exh. 16 (pp. 94-100, 106-107, 164, 170-71, 223). Blevins
also admitted that, despite the wording of the EPA order, the EPA did not actually know
what the source is of the gas, and that Range may not have caused or contributed to the
gas in the Lipsky water well. See Exh. 16 (pp. 222-228). The Lipskys and their lawyers
have no evidence to refute these unassailable facts. Indeed, the EPA order, which was
issued without notice or any opportunity for hearing, has no evidentiary value and cannot
properly be relied on to support Lipskys' groundless claims against Range.
THIRD PARTY CLAIMS AGAINST ALISA RICH
85. Alisa Rich ("Rich") is an individual residing in Denton County, Texas, and
may be served with process at her residence located at 2901 Corkwood, Flower Mound,
Texas 75022, or any other place where she may be found and properly served with notice
of this lawsuit against her.
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Summary of Claims
86. Rich, with the Lipskys' agreement and cooperation, devised a scheme to
manipulate test results and circulate false accusations against Range to further her
business and her anti-natural gas agenda. Rich ignored objective facts and used false
information and misrepresentations of data to smear Range's reputation by claiming that
Range's activities were the source of natural gas in water wells in Parker County.
87. Rich's scheme involved sidestepping the proper regulatory authorities in
Texas. Three days after Rich was hired by the Lipskys, and before obtaining any lab test
analyses regarding the water samples she obtained, Rich proposed her ultimate plan to the
Lipskys to bypass the Railroad Commission, get the EPA and Armendariz involved, and
blame Range for gas in Lipsky's water wells. See Exh. 8. Although Rich's testing was
flawed and her opinions are unsupportable, Rich's scheme forced Range to defend itself
and incur substantial unnecessary costs and expenses of testing and retaining independent
experts. The groundless accusations have also substantially damaged Range's well-earned
reputation as a good corporate citizen and a high quality driller and operator of
unconventional reservoirs like the Barnett Shale with an impeccable record of safety.
The EPA's conclusions are without scientific support and have been discredited by the
Railroad Commission, the proper entity in charge of regulating the Texas oil and gas
industry. See Exhs. 13-14.
88. The EPA's involvement was a direct result of the strategy hatched by Rich
for her own personal gain and for the Lipskys. Rich put her scheme into action,
contacted the EPA, and then lied about those contacts under oath. The EPA's order and
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 41
Rich's allegations have caused Range substantial damage, both in terms of costs
unnecessarily incurred and reputational harm, all of which could have been avoided had
Rich not decided to pursue her vendetta against the oil and gas industry with her
fraudulent plan to blame Range, without any supporting facts, for gas in a water aquifer,
when that gas has been naturally present in the aquifer for many, many years.
A. Civil Conspiracy and Aiding and Abetting
89. The previous paragraphs and allegations are incorporated by reference as if
fully set forth herein.
90. Rich devised a strategy and conspired with the Lipskys to get the EPA
involved by using false and misleading data to manufacture a non-existent imminent
danger and to falsely blame Range's operations for the alleged contamination. On
August 12, 2010, Rich sent an email to Mr. Lipsky describing a strategy in which Rich
would place air monitors 5 feet away from the gas vent of the Lipskys' well in order to
create artificially high air contaminant results. See Exh. 8. Rich's email stated that these
results would be the "evidence" they needed to get the EPA involved. Upon the Lipskys'
approval, Rich conducted air and water tests, and presented her results in such a way as to
bolster her pre-determined conclusion that the Lipskys' well was contaminated as a result
of Range's actions. Rich had communications with Armendariz and other EPA
personnel. See Exh. 9. The EPA used Rich's false and misleading information in issuing
the draconian ex parte order against Range on December 7, 2010. Range was publicly
branded as a polluter threatening to cause homes to explode. In the petition, the Lipskys'
rely solely on the existence of the EPA order for causation, yet they and Rich conspired
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 42
to have the EPA issue the order by presenting false and misleading information to the
EPA.
91. The Lipskys and Rich had a meeting of the minds and entered into a
conspiracy to harm Range by falsely blaming Range for something they know is not the
fault of Range. The object of the conspiracy was to make false and damaging accusations
that Range's operations had contaminated Lipskys' water well. As a proximate result of
this defamatory and/or disparaging conduct, Range's reputation has been greatly
damaged and Range has incurred substantial costs and expenses in defending itself.
B. Defamation and/or Business Disparagement
92. The previous paragraphs and allegations are incorporated by reference as if
fully set forth herein.
93. Rich is liable to Range for defamation and/or business disparagement. Rich
published defamatory and disparaging words regarding Range. Moreover, Rich
intentionally made statements and/or provided one or more false and misleading video
clips to the EPA to convey the wholly false and misleading message that the Lipskys'
drinking water was flammable, when Rich knew that the hose was attached to the gas
vent on Lipsky's water well and she knew from her own test results the water was
actually safe. See Exh. 9. Rich performed air and water tests, and presented her
results in such a way as to bolster her false pre-determined conclusion that the Lipskys'
well was contaminated as a result of Range's actions. Rich also omitted material facts
and the EPA issued an order against Range on December 7, 2010, notwithstanding that it
did not have all the facts as of that date, in part as a result of such omissions by Rich.
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 43
94. Rich's defamatory and disparaging words and conduct were committed with
malice in an attempt to injure Range and injure Range's reputation in the community. Rich
has no privilege for her disparaging conduct.
95. As a proximate result of Rich's defamatory and/or disparaging conduct,
Range's reputation has been greatly damaged and Range has incurred substantial costs
and expenses in defending itself against such tortious conduct. Range seeks actual
damages of at least $3 million dollars. Range also seeks to recover punitive or exemplary
damages from Rich.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Range Resources Corporation and
Range Production Company pray that:
1. Plaintiffs take nothing on their claims and causes of action;
2. Range recover any and all damages against Plaintiffs to which Range may
be lawfully entitled, including, but not limited to, actual damages in an amount of at least
$3 million dollars, special and consequential damages, exemplary damages, pre- and post
-judgment interest as allowed by law, attorney's fees through trial and appeal, if any, and
costs of court;
3. Third Party Defendant Alisa Rich be served with process, and that upon trial
of this matter, that Range recover any and all damages against Rich to which Range may
be lawfully entitled, including, but not limited to, actual damages in an amount of at least
$3 million dollars, special and consequential damages, exemplary damages, pre- and post -
judgment interest as allowed by law, and costs of court;
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4. Range be awarded such other and further relief to which Range may show
itself to be justly entitled.
Respectfully submitted,
Andrew D. SimsState Bar No. 18415600Russell R. BartonState Bar No. 01857250Troy D. OkruhlikState Bar No. 24032924HARRIS, FINLEY Sr, BUGLE, P.C.777 Main Street, Suite 3600Fort Worth, Texas 76102Telephone: (817) 870-8700Telecopy: (817) 332-6121
David P. PooleState Bar No. 16123750RANGE RESOURCES CORPORATIONRANGE PRODUCTION COMPANY100 Throckmorton, Suite 1200Fort Worth, TX 76102
Mac SmithTexas Bar No. 18541800VICK, CARNEY & SMITH, LLP111 York AvenueWeatherford, Texas 76086817-596-5533 (phone)817-596-8577 (fax)
ATTORNEYS FOR DEFENDANTS,RANGE RESOURCES CORPORATION,AND RANGE PRODUCTION COMPANY
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ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM PAGE 45
ArAndrew D. Sims
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of this instrument was served upon theattorn s o record ,zof all parties that have appeared in this cause by hand delivery, on
/r , 2011.
302901.1
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