The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
RUTH H. WELLS, ARLEN GLENN
WELLS, JR. and NANCY L. INMAN,
Plaintiffs,
v. CIVIL ACTION NO. 1:20CV9
(Judge Keeley)
ANTERO RESOURCES CORPORATION,
Defendant.
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
Pending before the Court is the motion of the defendant,
Antero Resources Corporation (“Antero”), to exclude the expert
testimony of Daniel Fisher (“Fisher”) (Dkt. No. 31). For the
reasons that follow, the Court GRANTS Antero’s motion.
I. BACKGROUND
Ruth H. Wells, Arlen Glenn Wells, Jr., and Nancy L. Inman,
(collectively, “the Plaintiffs”), own an undivided one-fourth 1/4
interest in oil and gas in and beneath 450 acres, more or less, of
property located in Doddridge County, West Virginia (Dkt. No. 1-1
at 6-7).1 The Plaintiffs’ interest is subject to an oil and gas
lease (“Lease”) dated June 13, 1961, to which Antero is the
1 The Court takes these facts from the Complaint and construes
them in the light most favorable to the Plaintiffs. See De’Lonta v.
Johnson, 708 F.3d 520, 524 (4th Cir. 2013).
WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
successor-in-interest. Id. at 7. In March and April 2018, Antero
executed and recorded a Declaration of Pooling for each of the four
units at issue (the “Units”). Id. at 8-11. However, it was not
until April 9, 2019 that Antero requested that the Plaintiffs agree
to modify the Lease “to allow for modern horizontal drilling
technology because the Lease did not contain a pooling clause.” Id.
The Plaintiffs, however, refused sign the proposed modification
(Dkt. No. 1-1 at 8). Within each Unit in dispute are horizontal
well bores drilled by Antero that pass through both the Plaintiffs’
property and property not owned by the Plaintiffs. Id.
According to the Plaintiffs, despite their refusal to allow
the inclusion of their property in these Units, Antero has been
producing and selling oil and gas from their wells in the Units.
Id. at 8-11. Consequently, on December 16, 2019, they filed a
complaint in the Circuit Court of Doddridge County, West Virginia,
asserting a single breach of contract claim (Dkt. Nos. 1-1, 1-2),
alleging that Antero materially breached the Lease by improperly
producing and selling oil and gas extracted from horizontal
drilling units that pass through their property despite their
refusal to permit the unitization of their property. Id. at 7-8. On
January 14, 2020, Antero timely removed the case to the Northern
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
District of West Virginia on the basis of diversity jurisdiction
(Dkt. No. 1 at 2). Currently pending is Antero’s motion to exclude
the testimony of the Plaintiffs’ expert witness, Daniel Fisher
(Dkt. No. 31).
II. LEGAL STANDARD
Federal Rule of Evidence 702, governing the admissibility of
expert testimony, provides:
A witness who is qualified as an expert by
knowledge, skill, experience, training, or
education may testify in the form of an
opinion or otherwise if: (a) the expert's
scientific, technical, or other specialized
knowledge will help the trier of fact to
understand the evidence or to determine a fact
in issue; (b) the testimony is based on
sufficient facts or data; (c) the testimony is
the product of reliable principles and
methods; and (d) the expert has reliably
applied the principles and methods to the
facts of the case.
Fed. R. Evid. 702. The court, as the gatekeeper, should admit the
proposed expert testimony only if it is reliable and helps the jury
in understanding the issues or evidence. Westberry v. Gislaved
Gummi AB, 178 F.3d 257, 260 (4th Cir. 1999); Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 591 (1993). If the proposed
expert testimony fails to meet either prong of this test, the
testimony must be excluded. Id. The proponent of the expert
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
testimony bears the burden of establishing its admissibility by a
preponderance of the evidence. Cooper v. Smith & Nephew, Inc., 259
F.3d 194, 199 (4th Cir. 2001); Daubert, 509 U.S. at 592 n. 10.
To assess reliability, the court conducts a flexible inquiry
evaluating the expert's methodology rather than the expert's
conclusion. TFWS v. Schaefer, 325 F.3d 234, 240 (4th Cir.2003). "A
reliable expert opinion must be based on scientific technical or
other specialized knowledge and not on belief or speculation, and
inferences must be derived using scientific or other valid
methods." Oglesby v. General Motors Corp., 190 F.3d 244, 250 (4th
Cir.1999). Generally, the court bases its reliability evaluation on
the following non-exclusive factors:
(1) whether the particular scientific theory “can be (and
has been) tested”; (2) whether the theory “has been
subjected to peer review and publication”; (3) the “known
or potential rate of error”; (4) the “existence and
maintenance of standards controlling the technique’s
operation”; and (5) whether the technique has achieved
“general acceptance” in the relevant scientific or expert
community.
United States v. Crisp, 324 F.3d 261, 266 (4th Cir. 2003) (quoting
Daubert, 509 U.S. at 593-94).
Expert opinions that are "bare conclusion[s] without reliable
support" must be excluded. See. e.g., Stolting v. Jolly Roger
Amusement Park, Inc., 37 F. App'x 80, 83 (4th Cir. 2002); McEwen
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
v. Baltimore Washington Med. Ctr. Inc., 404 F. App'x 789, 791-92
(4th Cir. 2010). "[N]othing in either Daubert or the Federal Rules
of Evidence requires a district court to admit opinion evidence
that is connected to existing data only by the ipse dixit of the
expert." McEwen, 404 F. App'x at 791-92; (quoting Gen. Elec. Co. v.
Joiner, 522 U.S. 136, 146, (1997).
III. Discussion
A. Antero’s Motion to Exclude
Daniel Fisher, the Plaintiffs’ proposed expert, is a petroleum
engineer retained to determine the “quantity of oil and gas
production from the plaintiffs’ property versus the total amount of
oil and gas production from each of the [Unit] well bores” (Dkt.
No. 34 at 2-3). The Plaintiffs intend to rely on Fisher’s
determination to calculate the royalties they should have received
from Antero based on their wells’ contributions to the Units. Id.
In his report, Fisher proposes to use an “equal production
contribution method” to obtain a percentage that “reflects the
expected proportional production contribution” from the Plaintiffs’
property to each Unit by dividing the number of perforation
clusters within the Plaintiffs’ property by the total number of
perforation clusters in each Unit well bore (Dkt. No. 32-1 at 1).
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
Antero contends that Fisher’s opinion testimony is not
reliable and will not assist the trier-of-fact either in
determining if Antero breached its contractual obligations, or in
calculating the damages the Plaintiffs may have sustained from that
breach (Dkt No. 32 at 1-2). Antero further contends that, even if
Fisher’s testimony is reliable, its probative value is
substantially outweighed by the danger of unfair prejudice. Id.
B. Fisher’s Qualifications and Background
As noted, Fisher is a registered petroleum engineer. His
expert report is based on “documentation provided by Antero,” the
well path map prepared by the Plaintiffs’ other expert, Andrea
Griffith, and his “knowledge of drilling operations, including
natural gas fracking” (Dkt. Nos. 32-1 at 1, 34 at 4). Antero does
not challenge his testimony based on a lack of “knowledge, skill,
experience, training, or education” under Rule 702.
His curriculum vitae, dated August 16, 2016, documents his
wide experience as a drilling engineer, superintendent, and manager
(Dkt. No. 34 at 3). After obtaining a degree in petroleum
engineering, Fisher worked as an offshore drilling laborer. He also
trained contractors on proper engineering principles and studied
drilling practices to enhance efficiency. Later, as a project
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
supervisor, Fisher pre-planned numerous domestic and international
drilling operations and ensured regulatory compliance; he also
oversaw project budgets, bids, contracts, equipment, and personnel.
As is apparent from his curriculum vitae, Fisher specializes
in “exploratory and developmental drilling,” often in harsh and
fragile environments. He has considerable experience in offshore
deepwater drilling operations in places such as Newfoundland,
Canada and the Gulf of Mexico.
Although an experienced engineer, Fisher has no particular
expertise in the marcellus shale gas industry. The only shale gas
experience noted in his curriculum vitae occurred two years prior
to his retirement in 2016, when he worked in Chevron’s Appalachian
Mountain Business Unit, to “assist the development and
implementation of a D&C Global Assurance process and oversee rig
assurance certification, well design, planning certification
processes and verification of well execution elements and
standards.” Nowhere does Fisher indicate that he is familiar with
the details of shale gas drilling. For example, he does not
indicate that he has studied current shale gas drilling practices,
overseen any shale gas drilling operations, established company
procedures for shale gas drilling, planned shale gas drilling
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
operations, conducted field inspections, or aided in the
implementation of approved shale gas drilling procedures.
Fisher has referenced no documented experience with or
knowledge of horizontal drilling, hydraulic fracturing practices,
or well unitization. Nor is he experienced in negotiating contract
terms with oil and gas lessors, such as the Plaintiffs. Likewise,
Fisher lacks experience pricing shale gas or calculating royalty
payments owed to lessors under oil and gas leases, where
unitization is involved. Of specific relevance to this case, he
lacks experience in estimating production volumes from well units
or well bores. Nor has he provided expert testimony in this or any
other area in the last four years (Dkt. No. 32-1 at 2).
C. Fisher’s Proposed Expert Opinion
Under Rule 702, the Plaintiffs must establish by a
preponderance of the evidence that Fisher’s testimony is
sufficiently reliable and relevant. Cooper, 259 F.3d at 199. As to
reliability, the Plaintiffs must prove that Fisher’s equal
production contribution method is based upon scientific or
technical knowledge, not mere on belief or speculation. Oglesby,
190 F.3d at 250. According to Fisher, he devised his equal
production contribution method because Antero has run no production
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
surveys down hole from the Plaintiffs’ wells (Dkt. No. 32-1 at 1).
His calculation assumes that the Plaintiffs’ contributions to the
gas produced from the Unit well bores are equal to the percentage
of Unit perforation clusters located on their property. Fisher,
however, does not provide a methodology for converting proportional
perforation clusters to damages via the equal production
contribution method in his report. The Plaintiffs intend to use
Fisher’s analysis to contend that, based on the result of his equal
production contribution method, they can calculate damages
“arguably” as acceptable as Antero’s proposed “surface acreage
approach,” which is the commonly accepted method used in the shale
gas industry to calculate royalties where a pooling agreement has
been reached (Dkt. No. 34 at 4).
According to the Plaintiffs, Antero, as an industry
representative, is advocating for an industry standard created to
benefit gas producers. They desire to utilize Fisher’s novel method
to derive a royalty calculation more beneficial to royalty payees.
The problem with Fisher's equal production contribution method,
however, is that it appears to be his own ipse dixit. While he
challenges the prevailing industry standard for calculating
royalties from shale gas wells as biased toward gas producers, he
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
has not supported his assumption or the basis for his opinion with
authority beyond his own experience, which notably is lacking in
the very industry his critiques.
Fisher's curriculum vitae documents no experience in
determining the necessity of unitization, pricing shale gas,
calculating royalties based on shale gas production, or estimating
production volumes from well bores. Nor does he explain how any of
his prior exploratory or deepwater work experience has prepared him
to opine on the methods of calculating royalty payments related to
pooled horizontal drilling units. Thus, Fisher lacks a reliable
basis in his previous work or experience to propose what is clearly
a novel method for calculating the amount of royalties Antero
allegedly owes the Plaintiffs.
Likewise, the Plaintiffs have offered no evidence that
Fisher's method is the product of reliable principles and methods
for calculating royalties in the oil and gas field. Fed. R. Evid.
702 (c). The only support they offer for the reliability of
Fisher's method is their own sweeping conclusion as to its
reliability and "reasonableness" (Dkt. No. 34 at 6). But Fisher's
report never discusses his standards of calculation, or
demonstrates that it is based on an acceptable method of
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
accounting. Rather, it appears that Fisher created his calculation
based on his beliefs and observation of the Unit maps. This is not
sufficiently reliable.
The Plaintiffs have also failed to establish that Fisher has
tested or attempted to test his equal production contribution
method. Without such testing, Fisher cannot prove, as he has
theorized, that the percentage of perforation clusters located on
a tract of land within a well bore unit is proportional to the
amount of gas that those wells contributed to the well bore unit.
Nor have the Plaintiffs cited any peer-reviewed literature
supporting Fisher’s conclusion, the accuracy of his calculation, or
its potential rate of error. There are simply no standards cited in
his report to ensure that Fisher’s calculation is replicable.
Moreover, Fisher's opinion lacks reliability because it does not
explain why the generally accepted methodology for calculating
royalties in the industry, the surface acreage approach, is
inadequate or unreliable to calculate the amount of royalties due
to the Plaintiffs in this case.
In sum, Fisher’s method has not been subjected to the rigors
of peer review or otherwise critiqued. Because no one in the
relevant industry has tested or even advanced Fisher's theory, the
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
Court concludes that his equal production contribution method, far
from having achieved general acceptance in the relevant expert
community, is unknown in that community. Crisp, 324 F.3d at 266;
Daubert, 509 U.S. at 593-94.
Given Fisher's lack of experience in calculating shale gas
royalties and the fact that he has developed and applied an
untested methodology, his opinion that the Plaintiffs' damages
should be calculated based on his equal production contribution
method is not sufficiently reliable. The Court therefore concludes
that the Plaintiffs have failed to meet their burden of
establishing the reliability of Fisher’s testimony under Rule 702
and excludes his expert opinion. Westberry, 178 F.3d at 260.
IV. CONCLUSION
For the reasons discussed, the Court finds that Fisher’s
testimony is not reliable and GRANTS Antero’s motion to exclude it
(Dkt. No. 31).
It is so ORDERED.
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WELLS v. ANTERO RESOURCES CORPORATION 1:20CV9
MEMORANDUM OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO EXCLUDE EXPERT WITNESS
TESTIMONY OF DANIEL FISHER [DKT. NO. 31]
The Court directs the Clerk to transmit copies of this
Memorandum Opinion and Order to counsel of record.
DATED: October 29, 2020
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
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