Oil and Gas Company Sues Environmental Activist for Libel over Facebook Comments

By Simon Davis-Cohen, editor of the Ear to the Ground newsletter, an exclusive “civic intelligence” service that mines local newspapers and state legislatures from across the country. Originally published at DeSmogBlog

On November 17, 2016, a Colorado environmental activist named Pete Kolbenschlag used Facebook to  leave a comment on a local newspaper article, the kind of thing more than a billion people do every day.

However, most people don’t get sued for libel over their Facebook comments. (Although some do.)

The Post Independent story that Kolbenschlag commented on was about oil and gas extraction on federal lands near his home, in western Colorado’s North Fork Valley. It announced that the Obama administration’s Bureau of Land Management was canceling all oil and gas leases on the iconic Thompson Divide, a large, rugged swath of Forest Service land.

In retaliation, the article reported, a Texas-based oil and gas company called SGI Interests (SGI), which owned 18 leases in the Thompson Divide area, was planning legal action against the federal government. The decision to cancel Thompson Divide leases was one of Obama’s last while in office.

SGI claimed it had obtained documents that “clearly show” that the decision to cancel the leases “was a predetermined political decision from the Obama administration taking orders from environmental groups.”

Kolbenschlag, who has opposed drilling in the region and engaged in environmental advocacy for some 20 years, responded to SGI’s allegations by posting the following comment:

“While SGI alleges “collusion” let us recall that it, SGI, was actually fined for colluding (with GEC) to rig bid prices and rip off American taxpayers. Yes, these two companies owned by billionaires thought it appropriate to pad their portfolios at the expense of you and I and every other hard-working American.”

Shortly thereafter, SGI sued Kolbenschlag for libel (which generally refers to defamatory written statements).

Investigation and Settlement

Kolbenschlag’s comment was in reference to a settlement SGI and Gunnison Energy Company (GEC), another oil and gas firm active on federal lands in the region, signed with the U.S.Department of Justice in 2012.

According to court documents filed by SGI, the settlement followed a two-year investigation into a Memorandum of Understanding (MOU) between the two oil and gas companies in which SGI would bid on certain federal oil and gas leases … and … SGI would assign GEC a 50 percent interest in any leases for which it was the successful bidder.” In other words, rather than compete in the bidding process, SGI would do the bidding, and then give GEC half of the mineral rights.

According to these court documents, the Justice Department’s two-year investigation led it to determine “that SGI’s and GEC’s agreement to bid jointly pursuant to the MOU constituted a per se violation of Section 1 of the Sherman [Antitrust] Act.”

The original settlement “required” the companies to pay $550,000 for “antitrust and False Claims Act violations.” It was the first time the federal government challenged an “anticompetitive bidding agreement for mineral rights leases.” That settlement, however, was later rejected by a federal judge, who approved a new settlement of $1 million and did not require the companies to admit to wrongdoing.

Libel or Retaliation?

SGI argues that Kolbenschlag’s statement that the company was fined for colluding with GEC is libelous because it is “contrary to the true facts, and reasonable persons … reading … the statement would be likely to think significantly less favorably about [SGI] than they would if they knew the true facts.”

The company argues that it was never convicted of or admitted to wrongdoing, and the settlement agreement did not require it. SGI further argues that it was not “fined,” but rather agreed to pay the government money to settle the case.

Moreover, SGI claims that “agreements such as the ones entered into between SGI and GEC are common place in the oil and gas industry.” And therefore, presumably, there’s nothing wrong with what they did.

Kolbenschlag’s attorney not only argues that his client’s comment was “substantially true” in the eyes of ordinary readers, but also that SGI’s lawsuit against him is in retaliation against his environmental activism. In legal briefs, his attorney writes that “this lawsuit is SGI’s transparent and blatant effort to punish Mr. Kolbenschlag for his public speech and advocacy that are not to SGI’s liking.”

For example, Kolbenschlag was part of a group called Citizens for a Healthy Community that focused on BLM rulemaking related to hydraulic fracturing (fracking) on federal lands. “SGI is misusing the judicial system as the means to silence its critics,” claimed Kolbenschlag’s attorney.

“I feel like harassment is the intent,” Kolbenschlag told DeSmog. “Like I don’t know how it’s going to play out, but it hasn’t prevented me from speaking up and remaining active.” For Kolbenschlag, the real issue centers on local concerns about the effect that proposed new drilling could have on the future of the region’s drinking and irrigation water.

“I haven’t done anything unusual in my activism,” he said, “but I have been successful in mobilizing people in the community. Things that should be lauded in a democracy, not harassed by hardball tactics.”

SGI characterizes Kolbenschlag as “a media savvy entrepreneur who has developed expertise over the years in working on public lands, energy, and recreation resource issues and organizing effective grassroots advocacy campaigns.” SGI did not respond to DeSmog’s requests for comment.

Oil and Gas Lawsuits Against Environmental Activists

In December,a judge denied Kolbenschlag’s motion to dismiss the case but decided to expedite the court proceedings. Shortly after that, SGI filed a motion to force Kolbenschlag to submit to questioning. The case is still pending in court, with a decision expected sometime in the coming weeks or months.

Kolbenschlag isn’t the only person facing legal action from the oil and gas industry in the past year. As DeSmog has reported, Energy Transfer Partners, owner of the Dakota Access pipeline, is suing the groups Greenpeace and Banktrack, and the grassroots movement known as EarthFirst! for alleged racketeering and conspiracy for their activism against the pipeline.

In addition, natural gas company Eversource Energy is threatening suit against the advocacy organization Environmental Defense Fund. Its concerns relate to the group’s analysis which concludes Eversource and another utility legally manipulated gas pipeline markets to force hikes in New England gas prices.

Finally, Marcellus shale drilling company Cabot Oil and Gas has filed a high-profile suit against Dimock, Pennsylvania, landowner Ray Kemble, whose groundwater was contaminated by Cabot drilling activity. The company settled with Kemble in 2012 but alleges he is violating that agreement by publicly discussing any supposed harm by the company, and thereby “disparaging” it.

The next year will be one to watch as these court battles between the oil and gas industry and their critics play out.

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  1. PlutoniumKun

    This sounds to me more of an act of weakness by the industry than strength. It sounds a little desperate to be trying to silence someone on a technicality of what they said on a FB post. Even in the UK/Ireland, were libel laws are far more heavily weighted in favour of wealthy litigants the industry rarely uses tactics like this, as they have the potential to rebound heavily on them (as happened with the McLibel case).

    1. Norb

      Or completely blinded by their own success. State and Federal governments have been captured and MSM runs cover for corporations. Weakness is not in the vocabulary of an enterprise so ruthless. Delusional and stupid, maybe, but never weakness.

      Something must happen to the human brain when exposed to lies and propaganda for such an extended period of time. The ability to objectively see reality must be lost. The oil and gas industries know the negative impact they pose to the environment but refuse to alter their practices. They are relentless in the pursuit of their aims, and going after such small fish, seems to me, that all the other bigger game is either extinct or safely wrapped up.

      If anything, all these large corporate players know the precarious position they are in concerning workers and the general population finally catching on to how badly they are being treated. If strikes and boycotts were to take hold once again on any type of large scale, these large corporations could be financially damaged very quickly. Precarious, fragile, and stupid. Has a better ring to it than weak.

      The irony is by so ruthlessly pursuing their aims, the industry undermines its legitimacy. In the end, it reveals the class warfare the underlies everything. It is not about right or wrong or the the finer points of law. It is the power to control and keep the majority underclass in their place.

      Consent is needed to keep current arrangements going. When that consent is withdrawn, things will get truly interesting. You can’t force someone to eat a McDonald’s burger or willfully waste energy- at least indefinitely.

      1. Arizona Slim

        If ever there were a case where the big bully loses in the court of public opinion, this is it.

        1. drumlin woodchuckles

          In this case, can the court of public opinion fine the SLAPP-suing perpetrator some very big money? Perhaps with such things as boycotts against all of SGI’s visible sales operations and visible downstream customers? Until either
          SGI drops and apologises for its suit? Or until SGI is driven into liquidation through permanent deprivation of bussiness?

  2. Nell

    May be we should all post about this story – Big Corporation sues little guy for being critical of big corporation. Naming the corporation, obviously. And post everywhere, sending links to the big company. Show them that the reputational damage from this kind of david vs goliath abuse will cost far more than local activism. Even better if we have some names of the executives of this group, and big brands they might have as part of the corporate empire.

    1. drumlin woodchuckles

      And which bussineses buy their gas and oil either for further resale or for use in their own operations? And figure out how to move customers’ end-user consumption away from those bussinesses until they can prove that they have stopped buying from SGI?

  3. Abigail Caplovitz Field

    This is called a SLAPP suit–Strategic Litigation Against Public Participation. States have considered anti-SLAPP suit legislation; I don’t know who currently has laws in place. The laws make it easier to get suits dismissed.

    1. Sam Adams

      New York has it codified at N.Y. Civ. Rights Law § 70-a – Actions involving public petition and participation; recovery of damages.
      Unfortunately the Supreme Courts are loath the apply it and the Appellate Divisions more more often will reverse on other grounds that don’t hit the plaintiffs and their attorneys in their pockets. It’s still a viable strategy.

    2. Fraibert

      Immediately struck me the same.

      Some quick internet research indicates that Colorado doesn’t have a Anti-SLAPP statute though. There is a case from the Colorado Supreme Court placing a heightened standard at the pleading stage (i.e., in the complaint) in SLAPP-type cases, and based on the OP linked Reply in Support of Motion to Dismiss, looks like the original memorandum supporting the Motion to Dismiss probably invoked this standard.

      One source: https://www.rcfp.org/slapp-stick-fighting-frivolous-lawsuits-against-journalists/colorado. Key quote from it:

      “Under this standard, the plaintiff must show that the defendant’s petition activities were not immune under the First Amendment because: the defendant’s claimed exercise of the petition right lacked any reasonable factual support or cognizable basis; the primary purpose of the petition activity was to harass the plaintiff or achieve some other improper objective; and the activity had the capacity to adversely affect a legal interest of the plaintiff.”

      I take the reasonable factual support is playing a big role based on the Reply.

      I view the case as a sign of weakness, too. Besides the fact that the alleged statements appear substantially accurate to me, it also rarely makes sense to for defamation, because it just makes the supposedly defamatory statements more public.

      Really, with the internet today, costs of litigation, etc., the only time I see it makes sense to do a defamation suit (at least from an economic and PR perspective) is if a genuine falsehood has a material effect on an individual’s ability to make a living or a business’ ability to remain a going concern.

  4. Sam Adams

    Classic SLAPP (strategic litigation against public participation) suit tactic. Hope the court imposed sanctions, but not holding my breath. We’ve come a long way baby….

  5. Hamford

    The precedent set by SGI et al. is key.

    The Department of Interior is the 1- puppet of extractors:


    2 – The DOI has reassigned senior pro-environment scientists to dark corners until they resign:


    3- The current voices of the DOI were the voices of the extractors:


    Yes, the extractor class has full ROI in today’s DOI. Our western lands are open for business. All that may lie in their way is individuals and local activists, hence the need to silence individual speech.

  6. Jean

    His highlighted comment at the top of this page does not open.

    Where are the hungry contingency lawyers that could counter sue the oil companies for big bucks?

    This guy can lose at most his house, unless it’s homesteaded, and part of his bank account.

    If the First Amendment is not sacrosanct, then neither is the corporate veil, or more like “the Corporate Burka”, these days.

    The oil company corporate fiction could lose a huge amount of money to a hungry lawyer suing justifiably under the First Amendment, or perhaps, the corporate board of directors could lose their (second) houses and bank accounts to him?

    1. Norb

      The Corporate Burka is very funny- thanks.

      No offense to Muslims. Seems very fitting for crazy American viewpoints though.

    2. drumlin woodchuckles

      Since libel and/or slander are very bad things to be accused of, one wonders whether a bussiness which accuses a critic of libel/slander for what that bussiness knows very well is not libel/slander . . . is itself guilty of libel/slander. Or at least very plausibly open to being sued for libel/slander.

      Should this targeted activist’s lawyers think of countersuing SGI for libel and slander?

      The other idea suggested upthread of web-viralising this whole think as far, fast and furious as possible to be-fece SGI’s public image as broadly as possible seems like a good one too. Also, could it be found out who SGI sells gas and oil to, and could all the people who buy SGI oil and gas for resale or use be themselves boycotted until they can publicly prove that they have stopped buying any SGI oil or gas from current wells? In other words, could an “extermicott” against SGI be organized to demonstrate that SLAPP sue-ers may well be revenged against?

      When will activists think of expanding the concept of a Legal Defense Fund into a Legal Defense-Offense Fund?

    3. JBird

      After reading the words, I still don’t understand how this is happening. I really don’t understand on basis that the companies can sue as claiming a single post on on a position that is easily defended? Did the big bad activist hurt their feelings? The First Amendment is so strongly supported legally and socially supported that it remains effective. Unlike all our other Rights.

      Yes, I understand SLAPP suits but there’s not enough there for one.

  7. Jeremy Grimm

    This post reminds of the way C. Wright Mills was put down:
    “While Mills began his long process of recuperation [from a major heart attack], the Batista mafia in Miami filed a $25 million defamation lawsuit, according to FBI calculations, against Mills and the publishers of Listen, Yankee. The bureau itself admitted that the US government tried to interfere and impede them from mounting a proper defense.” [https://www.thenation.com/article/waiting-c-wright-mills/]

    1. Norb

      When a strategy works, keep using it until it doesn’t. When all fails, kill the opposition. It’s hard to beat these guys at their own game. You have to be a violent sociopath.

      Brings home the necessity to build parallel social structures while trying to bring about change. Seems like the only way. One light of hope is that defense is always easier than offense.

    1. Pespi

      A more specific term would be “abuse of process.” Lawfare is sort of a catch-all for the legal justifications for security state matters.

  8. Mickey Hickey

    The surest way to destroy one’s reputation is to sue for libel. Oscar Wilde is the most blatant example but there are many others. Of course if one does not care what the public thinks then suing for libel is a good intimidation tactic.

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