Realtors Face Liability Risk for Fracking Health Problems

A dispute over natural gas drilling in the Mid-Atlantic is breaking new legal ground on whether corporations can silence property owners who sign settlement agreements with them.

Although the dispute is centered near Pittsburgh, Pennsylvania, it is spilling over into lawsuits against oil and gas companies in West Virginia, New York and elsewhere.

Homeowners are suing the companies because they say “fracking,” in which drillers fracture pockets of natural gas before pumping it out, is fouling their air and water while afflicting them with health problems. It also is driving down their property values.

The oil and gas companies typically try to settle the disputes to avoid protracted litigation. In the case of Range Resources Corp., the company has asked homeowners who accept settlements to sign non-disclosure agreements.

The non-disclosure agreements ask the homeowners not to discuss either the terms of their settlements or the health hazards that prompted their complaints.

Civil liberties groups say the non-disclosure agreements are really an attempt by the companies to cover up the scandal created by their unsafe industrial methods. They also say the agreements represent a violation of First Amendment free speech.

The agreements are potentially dangerous for the liability of realtors, who are required by law to disclose known hazards to their clients. If non-disclosure agreements interfere with the ability of realtors to know the hazards, the realtors face possible legal action if the purchasers get sick or lose property value.

The leading case involves Pennsylvania homeowners Chris and Stephanie Hallowich, who complained in 2011 of headaches, burning eyes, sore throats and nose bleeds after Range Resources started drilling near their house. Range Resources and two other companies agreed to a $750,000 settlement but on a condition that the Hallowiches and their children not disclose anything about the settlement.

The Hallowiches signed an affidavit saying no medical evidence links their health problems to gas drilling.

Nevertheless, Pennsylvania health regulators say at least 120 reports of water contamination between 2009 and 2012 could be linked to fracking. The Environmental Protection Agency is studying the pollution allegations.

Washington County Common Pleas Court Judge Debbie O’Dell-Seneca unsealed the non-disclosure agreement in response to media complaints about a lack of access to information important to the public. The judge said the companies failed to prove their trade secrets or reputations would be harmed if the records were opened.

Despite the revelations of water pollution, fracking and horizontal drilling are likely to continue after the Obama administration threw its support behind them. President Obama has said fracking lessens U.S. dependence on foreign oil while creating more jobs.

As a result, disputes about fracking’s damage to property values and the owners’ health are likely to increase, along with the liability of realtors who are blamed for failing to disclose the hazards.