Are fraud claims ever asserted in environmental lawsuits?

Depending on the interactions between the parties, a claim for fraud might also arise in an environmental lawsuit.  For instance, in Mitchell v. Encana Oil & Gas (USA), Inc., the plaintiffs claimed that the defendants failed to warn the plaintiffs of the dangers of potential discharges into groundwater from their exploration activities.  Plaintiffs claimed that this failure amounted to fraud as facts were concealed knowingly and with reckless disregard to plaintiff’s health and well-being. 

In Harris v. Devon Energy Prod. Co, the plaintiff made similar allegations concerning the defendant’s failure to disclose the chemicals its used in its operations near the plaintiff’s home.  Finally, in Celanese Corp. v. Coastal Water Authority, the plaintiff claimed that defendants hit and damaged a pipeline in 2002, but hid the damage by backfilling over the damaged portion without informing the plaintiff.  The plaintiff sued the defendants for fraud, among other things, claiming that the failure to disclose the information constituted fraud where the particular circumstances imposed a duty to disclose the information.  

The elements of fraud are:

  • The defendant made a material representation that was false;
  • The defendant knew the representation was false or made it recklessly without regard to its truth;
  • The defendant intended to induce the plaintiff to act upon the representation;
  • The plaintiff actually and justifiably relied upon the false representation; and
  • The plaintiff suffered injury. 

A plaintiff must plead fraud with particularity and must include the time, place and contents of the false representations, as well as the identity of the person making the misrepresentation and what that person obtained thereby.  In addition, the plaintiffs must prove that they relied on the fraudulent statements.  

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