Sunday, December 21, 2014

Approaching Omega Point in Swepi v. Mora County

For many of us following this case there's a growing inclination that Swepi's dog won't hunt!
U.S. Judge James O. Browning, usually an alpha dog in his own courtroom, rolled over and showed his belly in Friday's hearing in Swepi v. Mora County. Unable or unwilling to continue to perform Swepi's heavy lifting, he sent Plaintiff's attorney back to Santa Fe, tail between his legs with a whole lot of explaining to do to his colleagues and client about how he lost not only the day, but the momentum.

As we reach the winter solstice, the “Mora County Community Water Rights and Local Self-Government Ordinance”is still the law of the land in Mora County. In fact, the darkest days in defense of the historic ordinance may be behind Mora. Thanks to Browning's ruling to allow the Intervenors (Mora Land Grant and Jacobo Pacheco) to take Discovery, Mora is now empowered to have its requests for information answered by Swepi. And though it is not always true that knowledge equals power, in this case, it could. The game completely changes if Mora can show that Swepi  has no imminent or realistic plans to drill their leased properties, and therefore no Standing to bring the suit. For Mora County and Mother Earth, it was a good day in court.

By contrast, the news that Swepi's General Counsel is soon going to have to fire up the photocopier and fork over proprietary documents to the Mora legal team, could not have been even the slightest bit welcome at Royal Dutch Shell headquarters. That very day the oil giant was busy buying up 165,000 of its own shares for cancellation, propping up its share price in a petro-world gone awry. In an environment of fallen and falling oil prices, these are strange days for big oil and gas, and maybe even strange enough to persuade Swepi to drop its ill-conceived suit. As Judge Browning said yesterday: "A lot can happen in five weeks."

Judge Browning should know. He hails from Leveland, Texas, where fracking wells pop up at an alarming rate of frequency! Once Oil & Gas are in, there's no stopping them. Hence Mora's desire for an outright ban.
The sequence of events on Friday went something like this: First, Browning denied Swepi's Motion to Stay Discovery. It was an old motion that had been kicking around since the days Judge Scott was presiding over the case, prior to the suit being reassigned to Browning. Browning's Opinion consists of 40 pages of various iterations of no can do (with one of the sexiest footnotes citing the case of Pres. Clinton v. Paula Jones on a technical point about scheduling). 

Second, he granted both motions filed by Mora County (the Defendants) and the Mora Land Grant and Jacobo Pacheco (the Intervenors), allowing them to take Discovery. Following his own logic, he had little choice but to do exactly that. Having allowed the Intervenors in the case, however reluctantly, Browning felt he couldn't now not allow them to fully participate in the Discovery process. Jeff Haas, who represents both Mora County and the Intervenors on a pro bono basis, said it best: allowing the Intervenors in the suit but preventing them from taking Discovery would be a Phyrric victory. Browning had to admit that indeed "it wouldn't be fair." 

Swepi's White Collar Crime Expert. Attorney John C. Anderson was 0 for 3 on Friday. 
Swepi attorney John C. Anderson, who is Of Counsel at Holland & Hart in Santa Fe, whined and whimpered a little, saying repeatedly that Haas was trying to do an "end run" around the court. He claimed the Defendants had already had a chance to take Discovery and had not done so "consciously and strategically." But the Mora attorneys provided a satisfactory explanation as to why they hadn't, and Judge Browning, looking down at Anderson from his lofty bench, asked: "Don't the Intervenors have you over a barrel?" 

The bottom line is that oil prices have fallen to less than $57 a barrel.
Whipped on this point, Anderson urged the judge to at least limit the scope of Discovery, reminding him that he had the authority to impose restrictions. This seemed to appeal to Browning who asked Anderson for more specifics: "What would I do? I have the power, but how do I use it? How would I write it?" Clearly vamping, Anderson answered vaguely that he was sympathetic to "the analytical difficulty in fashioning appropriate Discovery..." But in the moment it mattered, he seemed totally unprepared to provide much to Browning in the way of practical guidance.

Specifically, Anderson urged the judge 1) not to allow duplicative requests from the Defendants and the Intervenors. Well, this point had already been agreed to. Furthermore, if a duplicative request somehow did manage to slip through, all Swepi would have to do is make reference to the previous request, and move on; 2) to limit the number of documents that Mora can request (though presumably Browning would have to justify his reasoning for such a limitation, which could be more trouble than it's worth as it's not in Mora's interest to overwhelm itself with extraneous records); and 3) (and here he repeated himself) to use his powers to restrict the scope of the requests. Again, easier said than done in a case that has garnered international attention. 

Anderson insisted that Mora was going on a "fishing expedition," hoping to get lucky. He seemed almost adolescently miffed at Browning for not finding a means of preventing Discovery from going forward.

They tussled politely over the elements of proving Standing. Browning revealed that he was already 20 pages into writing about the Standing issue alone, and certain things still remained unclear, like for instance the profitability issue. He didn't explicitly say so but if extraction isn't profitable, who's going to believe that a for-profit corporation with a fiduciary duty to its shareholders would go ahead and frack in certain knowledge that big money would be lost? In such a scenario Royal Dutch Shell would likely be vulnerable to criticism, perhaps even legal action by its own shareholders. 

Overtly, as well as at the level of subtext, Browning seemed to be urging Anderson to be reasonable, to appreciate how difficult it would be for him to write a credible opinion "on this poor record." And it's true. Given that Swepi would lose money if it tried to frack now, and everyone knows it, how can Browning possibly craft an opinion in Swepi's favor that wouldn't be received as ludicrous, even farcical? Mr. Anderson, Throw the old dog from Leveland a bone! 

As oil prices fall, the road seems to be rising to meet Mora County's plight to protect its water, land and inhabitants from the well-documented ravages of fracking. And while no one explicitly  brought up New York State's recent fracking ban, it perfumed the air of Judge Browning's courtroom. Is Browning supposed to ignore the fact that the Empire State has effectively declared fracking a health hazard and banned it statewide? Do New Mexicans have some inborn immunity to those same hazards? Of course not. Arguably Browning now has to be even more scrupulous as to the fairness and transparency of his process. His actions, especially in the face of these contingencies, are subject to intense scrutiny, and he can safely assume that his every error in judgement will be magnified, exponentially.

"See my problem?" Browning said to Anderson at one point. But Anderson didn't see it, or pretended not to, and insisted that Swepi already had unimpeachable Standing for each of its claims simply by virtue of having mineral rights in Mora. Browning, however, was unconvinced that the other factors weren't relevant to the discussion. Anderson seemed annoyed at having to inform the judge that the issue of Standing does not rise or fall with the price of gas and oil, and further that the price of oil has no effect on Swepi's "Takings claim." 

But Anderson's assertion extended to its logical conclusion is frankly absurd. He seems to be suggesting that Mora County could somehow be construed to be harming Swepi by enforcing the Ordinance and preventing Swepi from inflicting financial self-harm upon itself.

Anderson is further suggesting that because Swepi is the possessor of some leases in Mora, Mora is not entitled to substantiate for itself that Swepi is ready, willing and able to extract the oil and gas that may or may not exist at those leased properties. Rather, they must take Swepi's word for it, even as Swepi pretends to insist that it will proceed at all costs, even at a financial loss.
For a Fordham Law graduate and experienced white collar litigator,  John C. Anderson has managed to back himself into quite an idiotic corner.
We understand that big oil and gas wishes the Ordinance would disappear from the law books, that they experience it as an affront to corporate hegemony over community rights, and want it gone. But the Ordinance has been alive long enough to have etched itself on our consciousness, to show us another world of possibility, and that can't be undone. As DeLillo writes in Point Omega:
"Consciousness accumulates. It begins to reflect upon itself. Something about this feels almost mathematical to me. There's almost some law of mathematics or physics that we haven't quite hit upon, where the mind transcends all direction inward. The omega point," he said. "Whatever the intended meaning of the term, if it has a meaning, if it's not a case of language that's struggling toward some idea outside our experience."
"What idea?"
"What idea. Paroxysm. Either a sublime transformation of mind and soul or some worldly convulsion. We want it to happen."
"You think we want it to happen."
"We want it to happen. Some paroxysm."
 He liked this word. We let it hang there.

1 comment:

  1. Nice bit of reporting there, FM. Best wishes for the New Year!


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