Jim Willis
Editor & Publisher, Marcellus Drilling News

Twice now, the Hallowich family has fought in court and won to preserve its rights to collect their natural gas royalties, once with the previous property owner and once with the natural gas company they sued without evidence and still could sue except they don’t still don’t have any facts.

Two weeks ago, Marcellus Drilling News (MDN) told you the final document in the long, drawn-out affair known as “the Hallowich family” court case had been released (see Last Document Released in Hallowich v Range $750K Settlement). We were wrong.

Yesterday, the final final (pinky swear) last document was finally finally released. Until the next one comes along… Yesterday’s document was the confidential settlement agreement. It contains a bombshell surprise…

You may recall that Stephanie and Chris Hallowich bought a property in Washington County, PA (western part of the state, near Pittsburgh) in 2005. The property was already leased for natural gas drilling. Range Resources drilled several wells under the property. The Hallowiches didn’t like it and were very vocal with their anti-drilling sentiments, granting interviews to the press. In general they trashed Marcellus Shale drilling (see Pittsburgh Newspapers Sue to Unseal Drilling Court Case).

We already know the Hallowiches got $750,000 in a sealed settlement. Here’s the bombshell: The Hallowiches, as part of the sealed settlement, keep receiving monthly natural gas royalty checks from the Range Resources wells drilled under their former property. Any moral high ground the Hallowiches may have had in their claims that nearby drilling was negatively affecting their family just disappeared. No wonder it was the Hallowiches–not the natural gas industry–that wanted all of the court documents in this case sealed and hushed up. Anti-drillers mistakenly thought there was a smoking gun somewhere in the court documents–that the gas industry was hiding something–and agitated until it was unsealed. Whoops. Be careful what you wish for.

Unsealing the documents show the Hallowiches admitted in writing they have had no adverse health effects from natural gas drilling. And now we know they were and continue to profit from Marcellus Shale drilling–handsomely–while at the same time they were publicly bashing it. Here’s what one paper had to say and below is the story from the Pittsburgh Post-Gazette (both parties in the matter, by the way):

The previously confidential agreement to settle a Washington County family’s claims that its health and property value were damaged by nearby shale gas development contains lifetime bans on what they can say and do, and also places restrictions on where they may live.

The 2-year-old settlement agreement, restored to the public court record Monday morning when it was filed with the Washington County prothonotary, prohibits the Hallowich family from living within 2 miles of any existing Marcellus Shale facility owned by Range Resources, MarkWest Energy and Williams Gas/Laurel Mountain Midstream, or within 1,000 feet of any existing natural gas lease involving the companies.

The 17-page settlement agreement also includes the Hallowiches’ previously reported payoff of $750,000, and notes they will continue to receive oil and gas royalties under the terms of a lease agreement entered into by the previous owners of their farm.

It prohibits them from objecting to any drilling under any new property or residence they may own, and details the lifetime nondisclosure and nondisparagement clauses preventing them from speaking publicly about the settlement or protesting or challenging any gas development activity or lease by the operators. The operators also agreed not to disclose the terms of the settlement nor to disparage the Hallowiches.

Before signing the agreement in August 2011, Stephanie Hallowich and her husband, Chris, had been vocal critics of the shale gas development that surrounded their 10-acre farm in Mount Pleasant, Washington County.

The settlement agreement states the companies denied their shale gas development activities caused any health problems, and Matt Pitzarella, a Range spokesman, has repeated that position in recent weeks when the Hallowich case has been in the news.

“We are pleased that the public now has access to this information, which clearly demonstrates that there [are] absolutely no health, environmental or safety impacts from gas development,” Mr. Pitzarella said in an emailed statement.
The settlement included an admission by the family that it suffered no environmental, health or safety impact from drilling adjacent to their property. The Hallowiches’ attorney, Peter Villari, said the companies insisted that such a provision be included in the settlement.

The settlement document, though relied on by Washington County Judge Paul Pozonsky to approve of and seal the settlement Aug. 23, 2011, was missing from the case file delivered to the prothonotary’s office that day. Its absence from the court records was discovered when Debbie O’Dell-Seneca, Washington County Court of Common Pleas president judge, acting on a request by the Pittsburgh Post-Gazette and the Washington Observer-Reporter, ordered the case file unsealed in March 2013.

Reporters from the Post-Gazette were excluded from the settlement hearing, and when the court released a hearing transcript two weeks ago at the Post-Gazette’s request, it contained a statement by Range’s attorney that the agreement’s gag order applied to the Hallowiches and their children, then ages 7 and 10.

After the release of the transcript, Mr. Pitzarella said Range never intended for the gag order to apply to the children, but the other companies have not issued similar denials. Kathy K. Condo, an attorney representing MarkWest, declined to comment, and Erin McDowell, Mark West’s attorney, did not respond to a request for comment.

At the top of the “Mutual Non-Disparagement” clause on page 13, it says “The Hallowiches, jointly and severally, agree that they shall not make or cause to be made, directly or indirectly, any statement or comment to any third party regarding Operators or oil and gas development, hydraulic fracturing, their experience with Operators or any one of them, natural gas drilling or operations or Marcellus Shale activity, “including making any such statements in the public, to the media … or via the Internet.”

There is no statement in the settlement that the Hallowich children are excluded from the lifetime stipulation that the Hallowiches not talk publicly about the agreement or Marcellus Shale development.

An accepted legal reading of the “Hallowiches, jointly and severally,” means all of them or any of them individually –including the children — according to Frederick Frank, the attorney representing the Post-Gazette in its effort to unseal the settlement.

“The agreement includes the Hallowiches’ children as parties and the Stephanie and Chris Hallowich, as the children’s natural guardians, executed the agreement on their behalf,” Mr. Frank said. He also said the Hallowich children may be able to claim that their free speech rights under the First Amendment could not be waived by their parents.

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