CAUSE NO.

CV11-0798

STEVEN and SHYLA LIP SKY

v. DURANT, CARTER, COLEMAN LLC, SILVERADO ON THE BRAZOS § DEVELOPMENT COMPANY #1 LTD, JERRY V. DURANT, Individually § JAMES T. COLEMAN, Individually, ESTATE OF PRESTON CARTER, RANGE PRODUCTION COMPANY, And RANGE RESOURCES CORPORATION
V.

IN THE DISTRICT COURT RECEIVED AND FILED OF RECORD O'Ci..ock AT
JUL 1. 4
SHARE By Z011 ILLILAND, Divipt 1E-MR

Clock

COUNTY;

PARKER COUNTY, TEXAS

ALISA RICH

43 RD JUDICIAL DISTRICT

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

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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.
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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.

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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

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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 a horizontal portion that usually runs more than one mile below the surface 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.

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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

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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

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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.

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The Lipskys' Water Well C. Plaintiffs move to the Silverado on the Brazos development in midst of Barnett Shale development. Plaintiffs bought the site of their current home in the Silverado on the

13.

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:

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Hurst Water Well Flaring Gas in 2005 Approximately 800 Feet Away From 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

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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.

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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

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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 predetermined 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
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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 predetermined 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 EPA to 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,

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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 email 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 strongly
recommending 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 any jurisdiction 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 into their laps to get involved - which they will jump because they are in the middle of Sunset Review (oversight by the EPA). Also, I can then contact the EPA and discuss the fact that we have a multiissue environmental concern, including potential for explosion AND impact to human health (especially children) they will be very receptive.
It is worth every penny if we can get jurisdiction to the EPA who

oversees TCEQ. I would like to get my tech out there tomorrow if you approve of
this 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's involvement. The head of the EPA region covering Texas is Dr. Alfredo Armendariz ("Armendariz"), a self-professed environmental activist.
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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 my point was that if you don't have any results, you can't ask the EPA to jump in over something that you have no results. And his results were only with the Railroad Commission. And the test results from the water are not going to be
compelling enough nor are they going to be high enough to cause an imminent -- 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 and local authorities have not acted to protect the health of such persons. 42 U.S.C. § 300i.

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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. 24. Rich lobbies the EPA with distorted data and incomplete information. 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

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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

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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]

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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:

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Q. Did you ever write Mr. Lipsky an e-mail advising him of a strategy to get the EPA involved in his case? A. Mr. Lipsky -- I don't recall an e-mail, no. Mr. Lipsky actually asked me a question about the EPA. I don't recall ever saying, "Hey, you need to call the EPA," no. Did he ask me about that? Yes. Did he ask my opinion? He probably asked my opinion about it. But I don't recall ever producing an e-mail -- well, I know I don't have an e-mail, I will tell you that. I did not find any e-mail other than the ones that I submitted."

Q. Did you ever advise Mr. Lipsky of a strategy to take air samples, and how to take 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 get my tech out there tomorrow if you approve of this strategy. Please advise." Those are 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

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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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I.

The Lipskys benefit from the plot by claiming the house was uninhabitable 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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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 valid data or any imminent danger, the EPA issues an "emergency" order without 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 selfdescribed 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 Barnett Shale.
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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
7 th

order,

In its unilateral Order, EPA said that the Trinity Aquifer covered a 20 county area and, thus, the Order contemplated that Range would incur the cost and expense of testing, eliminating gas flows, and remediating the aquifer over an extremely large area that had absolutely nothing to do with any gas in the Lipsky 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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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. email: We're about to make a lot of news. The first story has already been printed.
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Almost immediately after issuing the order, Armendariz sent the following

26

There'll be an official press release in a few minutes. Also, time to Tivo channel 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 Range caused 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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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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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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Range tested the outside air, the air from the headspace of water wells, and the water from the water wells for more than 20 residents, some of whom lived more than one mile from the Gas Wells; Range made provisions to have water supplied or to reimburse the cost of water for the Lipskys and another homeowner; Range provided natural gas monitors for in home usage for nearby homeowners — including the Lipskys; and Range regularly communicated with area residents to keep them apprised of Range's investigation including providing each owner of a water well that was tested with the test results for their wells. The extensive testing conducted by the independent experts retained by

46.

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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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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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 that the Gas Wells did not cause or contribute to any contamination of the Lipsky'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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[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 shallow Strawn formation"; 2. "Gas found in [the Lipsky water well] does not match the nitrogen fingerprint of Barnett Shale gas." 3. "The Butler and Teal wells have mechanical integrity which will prevent any 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 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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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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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. 74. Civil Conspiracy and Aiding and Abetting 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 made by Steven Lipsky and in the conspiracy with Rich.
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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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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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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 end trying 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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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
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM

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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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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. 2. Plaintiffs take nothing on their claims and causes of action; 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;
LIPSKY V. RANGE RESOURCES CORPORATION, ET AL ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM

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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. Sims State Bar No. 18415600 Russell R. Barton State Bar No. 01857250 Troy D. Okruhlik State Bar No. 24032924 HARRIS, FINLEY Sr, BUGLE, P.C. 777 Main Street, Suite 3600 Fort Worth, Texas 76102 Telephone: (817) 870-8700 Telecopy: (817) 332-6121 David P. Poole State Bar No. 16123750 RANGE RESOURCES CORPORATION RANGE PRODUCTION COMPANY 100 Throckmorton, Suite 1200 Fort Worth, TX 76102 Mac Smith Texas Bar No. 18541800 VICK, CARNEY & SMITH, LLP 111 York Avenue Weatherford, Texas 76086 817-596-5533 (phone) 817-596-8577 (fax) ATTORNEYS FOR DEFENDANTS, RANGE RESOURCES CORPORATION, AND RANGE PRODUCTION COMPANY

LIPSKY V. RANGE RESOURCES CORPORATION, ET AL ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM

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CERTIFICATE OF SERVICE The undersigned certifies that a copy of this instrument was served upon the of attorn s o record ,z all parties that have appeared in this cause by hand delivery, on , 2011. /r

Andrew D. Sims

Ar

302901.1

LIPSKY V. RANGE RESOURCES CORPORATION, ET AL ANSWER, COUNTERCLAIM, AND THIRD PARTY CLAIM

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